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IRVINE
THE LffiRARY
OF
THE UNIVERSITY
OF CALIFORNIA
IRVINE
GIFT OF
J. A. C. Grant
«*Ao\vS>. Bte^Ja\>^WA\c
Digitized by the Internet Archive
in 2007 with funding from
IVIicrosoft Corporation
http://www.archive.org/details/americanstaterep11 5f reeiala
THE
American State Reports,
CONTAINING THE
CASES OF GENERAL VALUE AND AUTHORITY
SL^SEQUENT TO THOSE CONTAINED IN THE "AMERICAN
DECISIONS" AND THE "AMERICAN REPORTS,"
DECIDED IN THE
COURTS OF LAST RESORT
OF THE SEVERAL STATES.
SELECTED, EEPOETED, AND ANNOTATED
By A. C. FREEMAN.
VOLUME 115,
SAN FRANCISCO:
BANCROFT- WHITNEY COMPANY,
Law Publishers and Law Booksellers.
1007.
V, I IS
Copyright, 1907.
BY
BANCROFT-WHITNEY COMPANY.
San Francisco:
Tkb Filmer Brothers Electrotype Company,
Typographers and SStereotypers.
AMERICAN STATE REPORTS.
VOLUME 115.
SCHEDULE
showing the ori^nal
volumes of reports in which the cases
herein selected and re-reported
may be found,
and the pages
of this voliime devoted to each state.
PAGE.
Arkansas Reports
.
Vol. 78.
17- 63
Georgia Reports .
. .
Vol. 126.
64-131
Illinois Reports .
.
.
Vol. 224.
132-172
Kansas Reports .
.
Vol. 72.
173-240
Ejentucky Reports
Vol. 119.
241-294
Maine Reports . .
Vol. 101.
295-342
Maryland Reports .
Vol. 103.
343-387
Michigan Reports .
Vol. 144.
388-471
Missouri Reports
Vol. 198.
472-509
Montana Reports .
Vol. 34.
510-558
Nebraska Reports
Vol. 71.
559-623
New Jersey Equity R
EPORTS .
Vol. 69.
624-635
North Carolina Repc
)RTS . .
Vols. 137,141,
142.
636-762
Tennessee Reports .
• • •
Vol. 116.
763-837
Virginia Reports .
• • •
Vol. 105.
838-896
West Virginia Repoi
RTS . .
Vol. 59.
897-954
Wisconsin Reports .
• •
Vols. 125,127.
955-1081
(3)
SCHEDULE
SHOWING IN WHAT VOLUMES OF THIS SERIES THE CASES
BEPOBTED IN THE SEVERAL VOLUMES OF OFFICIAL
BEPORTS MAY BE FOUND.
Btat« reports are In parentbeaee, and the numbers of thU aerlea In bold-faced fl^nrea
ALABAMA.— (83) 3; (84) 5; (85) 7; (86) 11; (87) 13; (88) 16; (89)
18; (90, 91) 24; (92) 25; (93) 30; (94) 33; (95) 36; (96, 97) 38;
(98) 39; (99) 42; (100, 101) 46; (102) 48; (103) 49; (104, 105)
63; (106, 107, lOS) 64; (109, 110) 65; (111) 66; (112) 57; (113)
59; (114) 62; (115, 116) 67; (118, 119) 72; (120) 74; a21) 77;
(122, 123, 124, 125) 82; (126, 127) 85; (128) 86; (129) 87; (130)
89; (131, 132) 90; (133) 91; (134) 92; (135) 93; (136) 96; (137)
97; (138) 100; (139) 101; (140) 103; (141) 109; (142) 110; (143)
111; (144) 113.
ARKANSAS.— (48) 3; (49) 4; (50) 7; (51) 14; (52) 20; (53) 22; (54)
26; (55) 29; (56) 36; (57) 38; (58) 41; (59) 43; (60) 46; (61, 62)
64; (63) 68; (64) 62; (65) 67; (66) 74; (67) 77; (68) 82; (69) 86;
(70) 91; (71) 100; (72) 105; (73) 108; (74) 109; (75) 112;
(76, 77) 113; (78) 115.
CALIFORNIA.— (72) 1; (73) 2; (74) 6; (75) 7; (76) 9; (77) 11; (78,
79) 12; (80) 13; (81) 16; (82) 16; (83) 17; (84) 18; (85) 20; (86)
21; (87, 88) 22; (89) 23; (90, 91) 25; (92, 93) 27; (94) 28; (95)
29; (96) 31; (97) 33; (98) 35; (99) 37; (100) 38; (101) 40; (102)
41; (103) 42; (104) 43; (105) i5; (106) 46; (107) 48; (108) 49;
(109) 50; (110, 111) 52; (112) 63; (113) 64; (114) 65; (115)
66; (116) 68; (117) 59; (118) 62; (119) 63; (120) 65; (121) 66;
(122) 68; (123) 69; (124) 71; (125) 73; (126) 77; (127) 78; (12S,
129) 79; (130) 80; (131) 82; (132) 84; (133) 86; (134) 86; (135)
87; (136) 89; (137) 92; (138) 94; (139) 96; (140) 98; (141) 99;
(142) 100; (143) 101; (144) 103; (145) 104; (146) 106; (147) 109;
(148) 113.
COLORADO.- (10) 3; (11) 7; (12) 13; (13) 16; (14) 20; (15) 22;
(16) 26; (17) 31; (18) 36; (19) 41; (20) 46; (21) 62; (22) 66;
(23) 68; (24) 66; (25) 71; (26) 77; (27) 83; (28) 89; (29) 93;
(30) 97; (31) 102; (32) 105; (33) 108; (34) 114.
CONNECTICUT.— (54) 1; (55) 3; (56) 7; (57) 14; (58) 18; (59) 21;
(60) 26; (61) 29; (62) 36; (63) 38; (64) 42; (65) 48; (66) 50;
(67) 62; (68) 67; (69) 61; (70) 66; (71) 71; (72) 77; (73) 84;
(74) 92; (75) 96; (76) 100; (77) 107; (78) 112.
DELAWARE.- (5 Houst.) 1; (6 Houst.) 22; (7 Houst.) 40; (9 Houat.)
43; (1 Marv.) 66; (2 Marv.) 69; (1 Pennewill) 73; (2 Pennewill)
82; (3 Pennewill) 94; (4 Pennewill) 103.
FLORIDA.— (22) 1; (23) 11; (24) 12; (25, 26) 23; (27) 26; (28) 29;
(29) 30; (30) 32; (31) 34; (32) 37; (33) 39; (34) 43; (35) 48; (36)
61; (37) 63; (38) 66; (39) 63; (40) 74; (41) 79; (42) 89; (43)
•99; (44) 103; (45, 46, 47) 110; (48, 49, 50) 111.
GEORGIA.- (76) 2; (77) 4; (78) 6; (79) 11; (80, 81) 12; (82) 14;
(83, 84) 20; (85) 21; (86) 22; (87) 27; (88) 30; (89) 32; (90) 35;
(91, 92, 93) 44; (94) 47; (95, 96) 61; (97) 64; (98) 68; (99) 69;
(4)
SCHEDULK 5
(100) 62; (101) 65: (102) 66; (103) 68; (104) 69; (105) 70; (106)
71; (107) 73; (108) 75; (109) 77; (110, 111) 78; (112) 81; (113)
84; (114) 88; (115) 90; (116) 94; (117) 97; (118) 98; (119) 100;
(120) 102; (121) 104; (122) 106; (123) 107; (124) 110; (125)
114; (126) 115.
IDAHO.— (2) 35; (3, 4, 5) 95; (6) 96; (7) 97; (8) 101; (9) 108; (10)
109; (11) 114.
ILLINOIS.— (121) 2; (122) 3; (123) 5; (124) 7; (125) 8; (126) 9;
(127) 11; (128) 15; (129) 16; (130) 17; (131) 19; (132) 22; (133,
134) 23; (135) 25; (136) 29; (137) 31; (138, 139) 32; (140, 1411
33; (142) 34; (143, 144, 145) 36; (146, 147) 37; (148) 39; (149,
150) 41; (151) 42; (152) 43; (154) 45, (153, 155) 46; (156) 47;
(157) 48; (158) 49; (159) 50; (160, 161) 52; (162) 53; (163) 54;
(164, 165) 56; (166) 57; (167) 59; (168, 169) 61; (170) 62; (171)
63; (172, 173) 64, (174) 66; (175) 67; (176) 68; (177, 178) 69;
(179) 70; (180, 181) 72; (182) 74; (183, 184) 75; (185) 76; (186)
78; (187) 79; (188) 80; (189) 82; (190) 83; (191, 192) 85; (193)
86; (194, 195) 88; (196) 89; (197) 90; (198) 92; (199, 200), 93;
(201) 94; (202) 95; (203) 96; (204, 205) 98; (206, 207) 99; (208)
100; -(209) 101; (210) 102; (211, 212) 103; (213) 104; (214) 105;
(215) 106; (216, 217) 108; (218, 219) 109; (220) 110; (221) 112;
(222) 113; (223) 114; (224) 115.
INDIANA.— (112) 2; (113) 3; (114) 5; (115) 7; (116) 9; (117, 118)
10; (119) 12; (120, 121) 16; (122) 17; (123) 18; (124) 19; (125)
21; (126, 127) 22; (128) 25; (129) 28; (130) 30; (131) 31; (132)
32; (133) 36; (134) 39; (135) 41; (136) 43; (137) 45; (138) 46;
(139) 47; (140) 49; (1, 2, 3 Ind. App.; 141) 50; (4, 5, 6 Ind. App.;
142) 51; (7, 8 Ind. App.; 143) 52; (9, 10 Ind. App.) 53; (11 Ind.
App.) 54; (13 Ind. App.; 144) 55; (14 Ind. App.) 56; (15 Ind.
App.; 145) 57; (146) 58; (16 Ind. App.) 59; (17 Ind. App.) 60;
(147, 148) 62; (18 Ind. App.; 149) 63; (150; 19 Ind. App.) 65;
(20 Ind. App.) 67; (151) 68; (21 Ind. App.) 69; (152) 71; (22
Ind. App.) 72; (153) 74; (23 Ind. App.; 154) 77; (24 Ind. App.)
79; (155) 80; (25 Ind. App.) 81; (156) 83; (26 Ind. App.) 84;
(157; 27 Ind. App.) 87; (28 Ind. App.) 91; (158) 92; (29 Ind.
App.) 94; (159) 95; (30 Ind. App.) 96; (160) 98; (31 Ind. App.)
99; (161) 100; (32 Ind. App.; 162) 102; (33 Ind. App.) 104; (163)
106; (34 Ind. App.) 107; (164) 108; (35 Ind. App.) Ill; (165)
112; (36 Ind. App.) 114.
TOWA.— (72) 2; (73) 5; (74) 7; (75) 9; (76, 77) 14; (78) 16; (79)
18; (80) 20; (81) 25; (82) 31; (83) 32; (84) 35; (85) 39; (86)
41; (87) 43; (88) 45; (89, 90), 48; (91) 51; (92) 54; (93) 57;
(94, 95) 58; (96, 97) 59; (98) 60; (99) 61; (100) 62; (101, 102)
63; (1U3) 64; (104) 65; (105) 67; (106) 68; (107) 70; (108) 75;
(109) 77; (110) 80; (111) 82; (112) 84; (113) 86; (114) 89; (115)
91; (116) 93; (117) 94; (118) 96; (119) 97; (120) 98; (121) 100;
(122, 123) 101; (124) 104; (125, 126) 106; (127) 109; (128) 111;
(129) 113; (130) 114.
KANSAS.- (37) 1; (38) 5; (39) 7; (40) 10; (41) 13; (42) 16; (43)
19; ^44) 21; (,45) 23; (46) 26; (47) 27; (48) 30; (49) 33; (50)
34; (51) 37; (52) 39; (53) 42; (54) 45; (55) 49; (56) 54; (57)
57; (58) 62; (59) 68; (60) 72; (61) 78; (62) 84; (63) 88; (64)
91; (65) 93; (66) 97; (67) 100; (68) 104; (69) 105; (70) .109;
(71) 114; (72) 115.
KENTUCKY.— (83, 84) 4; (85) 7; (86) 9; (87) 12; (88) 21; (89) 25;
(90) 29; (91) 34; (92) 36; (93) 40; (94) 42; (95) 44; (96) 49;
(97) 53; (98) 56; (99) 59; (100) 66; (101) 72; (102) 80; (103)
6 SCHEDUIiS.
82; (104) 84; (105) 88; (106) 90; (107) 92; (108) 94; (109) 95;
(110) 96; (111) 98; (112) 99; (113) 101; (114) 102; (115) 103;
(116) 105; (117, 118) 111; (119) 115.
LOUISIANA.— (39 La. Ann.) 4; (40 La. Ann.) 8; (4i La. Ann.) 17;
(42 La. Ann.) 21; (43 La. Ann.) 26; (44 La. Ann.) 32; (45 La.
Ann.) 40; (46, 47 La. Ann.) 49; (48 La. Ann.) 55; (49 La. Ann.)
62; (50 La, Ann.) 69; (51 La. Ann.) 72; (52 La. Ann.) 78; (104)
81; (105) 83; (106) 87; (107) 90; (108) 92; (109) 94; (110) 98;
(111) 100; (112, 113) 104; (114) 108; (115) 112; (116) 114.
MAINE.— (79) 1; (80) 6; (81) 10; (82) 17; (83) 23; (84) 30; (85)
35; (86) 41; (87) 47i (88) 51; (89) 56; (90) 60; (91) 64; (92)
69; (93) 74; (94) 80; (95) 85; (96) 90; (97) 94; (98) 99; (99)
105; (100) 109; (101) 115.
MARYLAND.- (67) 1; (68) 6; (69) 9; (70) 14; (71) 17; (72) 20;
(73) 26; (74) 28; (75) 32; (76) 35; (77) 39; (78) 44; (80) 45;
(79) 47; (81) 48; (82) 51; (83) 55; (84) 57; (85) 60; (86) 63;
(87) 67; (88) 71; (89) 73; (90) 78; (91) 80; (92) 84; (93) 86;
(94) 89; (95) 93; (96) 94; (97) 99; (98) 103; (99) 105; (100) 108;
(101) 109; (102)111; (103) 115.
MASSACHUSETTS.— (145) 1; (146) 4; (147) 9; (148) 12; (149)
14; (150) 15; (151) 21; (152) 23; (153) 25; (154) 26; (155) 31;
(156) 32; (157) 34; (158) 35; (159) 38; (160) 39; (161) 42; (162)
44; (163) 47; (164) 49; (165) 52; (166) 55; (167) 57; (168) 60;
(169; 61; (170) 64; (171) 68; (172) 70; (173) 73; (174) 75; (175)
78; (176) 79; (177) 83; (178) 86; (179) 88; (180) 91; (181) 92;
(182) 94; (183) 97; (184) 100; (185) 102; (186) 104; (187) 105;
(188) 108; (189) 109; (190) 112; (191) 114.
MICHIGAN.— (60, 61) 1; (62) 4; (63) 6; (64, 65) 8; (66, 67) 11; (68,
69, 75) 13; (70) 14; (71, 76) 15; (72, 73, 74) 16; (77, 78) 18; (79)
19; (80) 20; (81, 82, 83) 21; (84) 22; (85, 86, 87) 24; (88) 26;
(89) 28; (90, 91) 30; (92) 31; (93) 32; (94) 34; (95, 96) 35; (97)
87; (98) 39; (99) 41; (100) 43; (101) 45; (102) 47; (103) 50;
(104) 53; (105) 55; (106) 58; (107) 61; (108) 02; (109) 63; (110)
64; (111) 66; (112, 113) 67; (114) 68; (115) 69; (116, 117) 72;
(118) 74; (119) 75; (120) 77; (121, 122) 80; (123) 81; (124) 83;
(125) 84; (126) 86; (127) 89; (128) 92; (129) 95; (130) 97;
(131) 100; (132) 102; (133) 103; (134) 104; (135)106; (137) 109;'
(138) 110; (139) 111; (136,140) 112; (141,142) 113; (143) 114;
(144) 115.
MINNESOTA.— (36) 1; (37) 5; (38) 8; (39, 40) 12; (41) 16; (42) 18;
(43) 19; (44) 20; (45) 22; (46) 24; (47) 28; (48) 31; (49) 32;
(50) 36; (51, 52) 38; (53) 39; (54) 40; (55) 43; (56) 45; (57)
47; (58) 49; (59) 50; (60) 51; (61) 52; (62) 54; (63) 56; (64)
58; (65) 60; (66) 61; (67, 68) 64; (69) 65; (70) 68; (71) 70;
(72) 71; (73) 72; ^74) 73; (75) 74; (76, 77) 77; (78, 79) 79;
(80) 81; (81, 82) 83; (83) 85; (84) 87; (85) 89; (86) 91; (87)
94; (88) 97; (89) 99; (90) 101; (91) 103; (92) 104; (93) 106;
(94) 110; (95) 111; (96) 113; (97), 114.
MISSISSIPPI.— (65) 7; (66) 14; (67) 19; (68) 24; (69) SO; (70) 35;
(71) 42; (72) 48; (73) 55; (74) 60; (75) 65; (76) 71; (77) 78;
(78) 84; (79) 89; (80) 92; (81) 95; (82) 100; (83) 102; (84) 105;
(85) 107; (86) 109; (87) 112.
MISSOURI.- (92) 1; (93) 3; (94) 4; (95) 6; (96) 9; (97) 10; (98)
14; (99) 17; (100) 18; (101) 20; (102) 22; (103) 23; (104, 105)
24; (106) 27; (107) 28; (108, 109) 32; (110, 111) 33; (112) 34;
(113, 114) 35; (115) 37; (116, 117) 38; (118) 40; (119, 120) 41;
SCHEDULB. 1
(121) 42; (122) 43; (123) 45; (124, 125) 46; (126) 47; (127) 48;
(128) 49; (129) 50; (130) 51; (131) 52; (132) 53; (133) 54; (134)
56; (135, 136) :8; (137) 59; (138) 60; (139) 61; (140) 62; (141,
142) 64; (143) 65; (144) 66; (145) 68; (146) 69; (147, 148) 71;
(149, 150) 73; (151^ 74; (152) 75; (153, 154) 77; (155) 78; (156)
79; (157) 80; (158, 159) 81; (160) 83; (161) 84; (162, 163) 85;
(164) 86; (165) 88; (166) 89; (167, 168) 90; (169) 92; (170, 171)
94; (172) 95; 073) 96; (174, 175) 97; (176) 98; (177) 99; (178,
179) 101; (180, 181, 182) 103; (183. 184, 185, 186) 105; (187) 106:
(188, 189) 107; (190, 191) 109; (192) 111; (193, 194) 112; (195,
196) 113; (197) 114; (198) 115.
MONTANA.— (9) 18; (10) 24; (11) 28; (12) S3; (13) 40; (14) 43;
(15) 48; (16) 50; (17) 52; (18) 56; n9) 61; (20) 63; (21) 69:
(22) 74; (23) 75; (24) 81; (25) 87; (26> 91; (27) 94; (28) 98;
(29) 101; (30) 104; (31) 107; (32) 108; (33) 114; (34) 115.
NEBRASKA.— (22) 3; (23, 24) 8; (25) 13; (26) 18; (27) 20; (28, 29)
26; (30) 27- (31) 28; ^32, 33) 29; (34) ??; (35) 37; (36) i8;
(37) 40; (38) 41; (39, 40) 42; (41) 43; (42, 43) 47; (44) 48;
(45, 46) 50; (47) 53; (47, 48) 58; (49) 59; (50) 61; (51, 52)
66; (53) 68; (54) 69; (55) 70; (56) 71; (57) 73: (58) 76; (59)
80; (60) 83; (61) 87; (62) 89; (63) 93; (64) 97; (65) 101; (66)
103; (67) 108; (68) 110; (69) 111; (70) 113; (71) 115.
NEVADA.— (19) 3; (20) 19; (21) 37; (22) 58; (23) 62; (24) 77;
(25) 83; (26) 99; (27) 103; (28) 113.
NEW HAMPSHIRE.- (64) 10; (62) 13; (65) 23; (66) 49; (67) 68;
(68) 73; (69) 76; (70) 85; (71) 93; (72) 101; (73) 111.
NEW JERSEY.— (43 N. J. Eq.) 3; (44 N. J. Eq.) 6; (50 N. J. L.) 7;
(51 N. J. L.; 45 N. J. Eq.) 14; (46 N. J. Eq.; 52 N. J. L.) 19;
(47 N. J. Eq.) 24; (53 N. J. L.) 26; (48 N. J. Eq.) 27; (49 N.
J. Eq.) 31; (54 N. J. L.) 33; (50 N. J. Eq.) 35; (55 N. J. L.)
39; (51 N. J. Eq.) 40; (56 N. J. L.) 44; (52 N. J. Eq.) 46; (57
N. J. L.; 53 N. J. Eq.) 51; (54 N. J. Eq.; 58 N. J. L.) 55; (59 N.
J. L.) 59; (55 N. J. Eq.) 62; (60 N. J. L.) 64; (56 N. J. Eq.) 67;
(61 N. J. L.) 68; (62 N. J. L.) 72; (57 N. J. Eq.) 73; (63 N. J.
L.) 76; (58 N. J. Eq.) 78; (64 N. J. L.) 81; (59, 60 N. J. Eq.)
83; (65 N. J. L.) 86; (61 N. J. Eq.; 66 N. J. L.) 88; (62 N. J.
Eq.) 90; (67 N. J. L.) 91; (63 N. J. Eq.) 92; (68 N. J. L.) 96;
(64 N. J. Eq.) 97; (69 N. J. L.) 101; (65 N. J. Eq.; 70 N. J. L.)
103; (66 N. J. Eq.) 105; (71 N. J. L.) 108; (67 N. J. Eq.) 110;
(68 N. J. Eq.; 72 N. J. L.) Ill; (69 N. J. Eq.) 115.
KEW YORK.— (107) 1; (108) 2; (109) 4; (110) 6; (111) 7; (112) 8;
(113) 10; (114) 11; (115) 12; (116, 117) 15; (118, 119) 16; (120)
17; (121) 18; (122) 19; (123) 20; (124, 125) 21; (126) 22; (127)
24; (128, 129) 26; (130, 131) 27; (132, 133) 28; (134) SO; (135)
81; (136) 32; (137) 33; (138) 34; (139) 36; (140) 37; (141) 38;
(142) 40; (143) 42; (144) 43; (145) 45; (146) 48; (147) 49; (148)
51; (149) 52; (150) 55; (151) 56; (152) 57; (153) 60; (154) 61;
(155) 63; (156) 66; (157) 68; (158, 159) 70; (160) 73; (161, 162)
76; (163, 164) 79; (165) 80; (166, 167) 82; (168) 85; (169, 170)
88; (171) 89; (172) 92; (173) 93; (174) 95; (175) 96; (176) 98;
(177) 101; (178) 102; (179) 103; (180) 105; (181) 106; (182) 108;
(183) 111; (184) 112; (185) 113.
NORTH CAROLINA.— (97, 98) 2; (99, 100) 6; (101) 9; (102) 11;
(103) 14; (104) 17; (105) 18; (106) 19; (107) 22; (108) 23;
(109) 26; (110) 28; (111) 32; (112) 34; (113) 37; (114) 41; (115)
8 Schedule.
44; (116) 47; (117) 53; (118) 54; (119) 56; (120) 58; (121) 61;
(122) 65; (123) 68; (124) 70; (125) 74; (126) 78; (127) 80;
(128) 83; (129) 85; (130) 89; (131) 92; (132) 95; (133) 98;
(134) 101; (135) 102; (136) 103; (137,138) 107; (139,140) 111;
(137,141,142) 115.
NORTH DAKOTA.— (1) 26; (2) 33; (3) 44; (4) 50; (5) 57; (6, 7)
66; (8) 73; (9) 81; (10) 88; (11) 95; (12) 102; (13) 112.
OHIO.— (45 Ohio St.) 4; (46 Ohio St.) 15; (47 Ohio St.) 21; (48 Ohio
St.) 29; (49 Ohio St.) 34; (50 Ohio St.) 40; (51 Ohio St.) 46;
(52 Ohio St.) 49; (53 Ohio St.) 53; (54 Ohio St.) 56; (55, 56
Ohio St.) 60; (57 Ohio St.) 63; (58 Ohio St.) 65; (59 Ohio St.)
69; (60 Ohio St.) 71; (61 Ohio St.) 76; (62 Ohio St.) 78; (63
Ohio St.) 81; (64 Ohio St.) 83; (65 Ohio St.) 87; (66 Ohio St.)
90; (67 Ohio St.) 93; (68 Ohio St.) 96; (69 Ohio St.) 100; (70
Ohio St.) 101; (71 Ohio St.) 104; (72 Ohio St.) 106; (73 Ohio St. •
112; (74 Ohio St.) 113.
OREGON.— (15) 3; (16) 8; (17) 11; (18) 17; (19) 20; (20) 23; (21)
28; (22) 29; (23) 37; (24) 41; (25) 42; (26) 46; (27) 50; (28)
52; (29) 54; (30) 60; (31) 65; (32) 67; (33) 72; (34) 75; (35)
76; (36) 78; (37) 82; (38) 84; (39) 87; (40) 91; (41) 93; (42)
95; (43) 99; (44) 102; (45) 106; (46, 47) 114.
PENNSYLVANIA.— (115, 116, 117 Pa. St.) 2; (118, 119 Pa. St.) 4;
(120, 121 Pa. St.) 6; (122 Pa. St.) 9; (123, 124 Pa. St.) 10; (125
Pa. St.) 11; (126 Pa. St.) 12; (127 Pa. St.) 14; (128, 129 Pa. St.)
15; (130, 131 Pa. St.) 17; (132, 133, 134 Pa. St.) 19; (135, 136
Pa. St.) 20; (137, 138 Pa. St.) 21; (139, 140, 141 Pa. St.) 23;
(142, 143 Pa. St.) 24; (144, 145 Pa. St.) 27; (146 Pa. St.) 28;
(147, 150 Pa. St.) 30; (151 Pa. St.) 31; (148 Pa. St.) 33; (149,
152, 153 Pa. St.) 34; (154, 155 Pa. St.) 35; (156 Pa. St.) 36;
(157 Pa. St.) 37; (158 Pa. St.) 38; (159 Pa. St.) 39; (160 Pa.
St.) 40; (161 Pa. St.) 41; (162 Pa. St.) 42; (163 Pa. St.) 43;
(164, 165 Pa. St.) 44; (166 Pa. St.) 45; (167 Pa. St.) 46; (168,
169 Pa. St.) 47; (170, 171 Pa. St.) 50; (172, 173 Pa. St.) 51;
(174, 175 Pa. St.) 52; (176 Pa. St.) 53; (177 Pa. St.) 55; (178
Pa. St.) 56; (179, 180 Pa. St.) 57; (181 Pa. St.) 59; (182 Pa.
St.) 61; (183, 184 Pa. St.) 63; (185 Pa. St.) 64; (186 Pa. St.)
65; (187 Pa. St.) 67; (188 Pa. St.) 68; (189 Pa. St.) 69; (190
Pa. St.) 70; (191 Pa. St.) 71; (192 Pa. St.) 73; (193 Pa. St.) 74;
(194 Pa. St.) 75; (195 Pa. St,) 78; (196 Pa. St.) 79; (197 Pa.
St.) 80; (198 Pa. St.) 82; (199 Pa. St.) 85; (195, 200 Pa. St.)
86; (201 Pa. St.) 88; (202 Pa. St.) 90; (203, 204 Pa. St.) 93;
(205 Pa. St.) 97; (206 Pa. St.) 98; (207 Pa. St.) 99; (208 Pa.
St.) 101; (209 Pa. St.) 103; (210 Pa. St.) 105; (211 Pa. St.) 107;
(212 Pa. St.) 108; (213 Pa. St.) 110; (214 Pa. St.) 112; (215
Pa. St.) 114.
RHODE ISLAND.— (15) 2; (16) 27; (17) 33; (18) 49; (19) 61- (20)
78; (21) 79; (22) 84; (23) 91; (24) 96; (25) 105; (26) 106; (27)
114. ^
SOUTH CAROLINA.— (26) 4; (27, 28, 29) 13; (30) 14; (31, 32) 17-
(33) 26; (34) 27; (35) 28; (36) 31; (37) 34; (38) 37; (39) 39;'
(40) 42; (41) 44; (42) 46; (43) 49; (44) 51; (45) 55; (46) 57;
(47) 58; (48) 59; (49) 61; (50) 62; (51) 64; (52) 68; (53) 69;
(54) 71; (55) 74; (56, 57) 76; (58) 79; (59) 82; (60, 61) 85; (62)
Schedule. 9
89; (63) 90; (64) 92; (65) 95; (66) 97; (67) 100; (68) 102;
(69) 104; (70) 106; (71) 110; (73, 74) 114.
SOUTH DAKOTA.— (1) 36; (2) 39; (3) 44; (4) 46; (5) 49; (6) 55;
(7) 58; (8) 59; (9) 62; (10) 66; (11) 74; (12) 76; (13) 79; (14)
86; (15) 91; (16) 102; (17) 106; (18) 112.
TENNESSEE.— (85) 4; (86) 6; (87) 10; (88) 17; (89) 24; (90) 25;
(91) 30; (92) 36; (93) 42; (94) 45; (95) 49; (96) 54; (97) 56;
(98) 60; (99) 63; (100) 66; (101) 70; (102) 73; (103) 76; (104)
78; (105) 80; (106) 82; (107) 89; (108) 91; (109) 97; (110) 100;
(111) 102; (112) 105; (113) 106; (114) 108; (115) 112; (116)
115.
TEXAS.— (68) 2; (69; 24 Tex. App.) 5; (70; 25, 26 Tex. App.) 8;
(71) 10; (27 Tex. App.) 11; (72) 13; (73, 74) 15; (75) 16; (76)
18; (77; 28 Tex, App.) 19; (78) 22; (79) 23; (29 Tex. App.) 25;
(80, 81) 26; (82) 27; (30 Tex. App.) 28; (83) 29; (84) 31; (85)
34; (31 Tex. Cr. Bep.; 86) 37; (86; 32 Tex. Cr. Eep.; 40: (87;
33 Tex. Cr. Kcp.) 47; (34 Tex. Cr. Eep.; 88) 53; (89, 90) 59;
(35 Tex. Cr. Rep.) 60; (36 Tex. Cr. Eep.) 61; (91; 37 Tex. Cr.
Eep.) 66; (38 Tex. Cr. Eep.) 70; (92) 71; (39 Tex. Cr. Rep.)
73; (40 Tex. Cr. Eep.) 76; (93) 77; (94) 86; (95) 93: (41, 42,
43 Tex. Cr. Eep.) 96; (96) 97; (44 Tex. Cr. Eep.) 100; (97) 104;
(98) 107; (45, 46 Tex- Cr. Eep.) 108.
UTAH.— (13) 67; (14) 60; (15) 62; (16) 67; (17) 70; (18) 72; (19)
75; (20) 77; (21) 81; (22) 83; (23) 90; (24) 91; (25) 95; (26) 99;
(27) 101; (28) 107; (29) 110.
VEEMONT.— (60) 6; (61) 15; (62) 22; (63) 25; (64) 33; (65) 36;
(66) 44; (67) 48; (68) 54; (69) 60; (70) 67; (71) 76; (72) 82;
(73) 87; (74) 93; (75) 98; (76) 104; (77) 107; (78) 112.
VIEGINIA.— (82) 3; (83) 5; (84) 10; (85) 17; (86) 19; (87^ 24;
(88) 29; (89) 37; (90) 44; (91) 50; (92) 53; (93) 57; (94, 95)
64; (96) 70; (97) 75; (98) 81; (99) 86; (100) 93; (101) 99; (102)
102; (103) 106; (104) 113; (105) 115.
WASHINGTON.— (1) 22; (2) 26; (3) 28; (4) 31; (5) 34; (6) 36; (7)
38; (8) 40; (9) 43; (10) 45; (11) 48; (12) 50; (13) 52; (14) 53;
(15) 55; (16) 58; (17) 61; (18) 63; (19) 67; (20) 72; (21) 75;
(22) 79; (23) 83; (24) 85; (25) 87; (26) 90; (27) 91; (28, 29)
92; (30) 94; (Si) 96; (32) 98; (33) 99; (34) 101; (35) 102; (36)
104; (37, 38) 107; (39) 109; (40, 41) 111; (42) 114.
WEST VIEGINIA.— (29) 6; (30) 8; (31) 13; (32, 33) 25; (34) 26;
(35) 29; (36) 32; (37) 38; (38, 39) 45; (40) 52; (41) 56; (42) 57;
(43) 64; (44) 67; (45) 72; (46) 76; (47) 81; (48) 86; (49) 87;
(50) 88; (51) 90; (52) 94; (53) 97; (54) 102; (55) 104; (56) 107;
(57) 110; (58) 112; (59) 115.
WISCONSIN.— (69) 2; (70, 71) 5; (72) 7; (73) 9; (74, 75) 17; (76,
77) 20; (78) 23; (79) 24; (80) 27; (81) 29; (82) 33; (83) 35;
(84) 36; (85, 86) 39; (87) 41; (88) 43; (89) 46; (90) 48; (91)
51; (92) 53; (93) 57; (94) 59; (95) 60; (96, 97) 65; (98, 99) 67;
(100) 69; (101) 70; (102) 72; (103) 74; (104, 105) 76; (106) 80;
(107, 108) 81; (109) 83; (110) 84; (111) 87; (112) 88; (113) 90;
(114) 91; (115) 95; (116) 96; (117) 98; (118) 99; (119) 100;
(120) 102; (121) 105; (122) 106; (123) 107; (124) 109; (125,126)
110; (125, 127) 115.
WYOMING.— (3) 31; (4) 62; (5) 63; (6) 71; (7) 75; (8) 80; (9) 87;
(10) 98; (11) 100; (12) 109; (13) 110.
AMERICAN STATE REPORTS.
VOLUME 115.
CASES KEPOETED.
NAME. SUBJECT. EEPORT. PAGE.
Abrams v. Uuited States Fidelity
etc. Co Guardian 127 Wis. 579 1055
Albright v. Bangs Executors .... 72 Kan, 435 . . . 219
Albrigbt-Pryor Co. v. Pacific Sell-
ing Co Attachment ...126 Ga. 498 108
Aldrich v. People Larceny 224 111. 622 166
Allen V. Thornapple Elec. Co Waters 144 Mich. 370... 453
Amnions v. Toothman Deeds 59 W, Va. 165 . . 908
Arkansas etc. Ry. Co. v. Dickin-
son Rewards 78 Ark. 483 54
Baltimore etc. Ry. Co. v. KlafE &
Co Eeplevin 103 Md. 357 363
Bibber v. Carville Equity 101 Me. 59 303
Blackwell v. Mutual Reserve Fund
Life Assn Insurance.. . .141 N. C. 117. . . 677
Bogart V. Stevens Mortgages.. .. 69 N.J.Eq.800. 627
Bowe V. Gage Brokers 127 Wis. 245... 1010
Bridger V. Exchange Bank Lis Pendens. . .126 Ga. 821 118
Brotherton v. Gilchrist Partnership . . .144 Mich. 274. . . 397
Brown V. Brown Wills 71 Neb. 200... 568
Brown v. Smith Executors 101 Me. 545 339
Brown v. Trustees of Schools Limitations.. .224 111. 184 146
Burnett V. Lyman Ejectment.. . .141 N. C. 500. . . 691
Bynum V. Wicker Entireties.. ..141N. C. 95 675
Carpenter v. Carpenter's Trustee. . Wills 119 Ky. 582 275
Cary v. Preferred Accident Ins,
Co Insurance .. ..127 Wis. 67 997
Cincinnati etc. Ry. Co. v. Msltts. .Bailroads 119 Ky. 954 289
Clancy V. Barker Innkeepers.. . 71 Neb. 83 559
Clark V. Toronto Bank Banking 72 Kan. 1 173
Cogan V. Conover Mfg. Co Assignments .. 69 N.J.Eq.809. 629
Commonwealth v. Beckett False Pretenses.ll9 Ky. 817. . , . 285
(10)
Cases Reported. 11
NAM15. SUBJECT. EEPORT. PAGE.
Costigan V. Truesdell Judicial Sale. .119 Ky. 70.,
Crabtree v. Dawson Assault 119 Ky, 148,
Daret V. Swearingen Wills 224 111. 229. . .
Davenport v. State Banking Co.. .BanJcs 126 Ga. 136..
Detroit Southern R. E. Co. v. Mal-
comson Sales 144 Mich. 172.
Dickson v. Stewart Stat, of Frauds. 71 Neb. 424.
Disconto Clesellschaft v. Umbreit. .Aliens 127 Wis. 651. .
Doan V. Ascension Parish Trusts 103 Md. 662. .
Dobbins v. Dobbins Cotenancy 141 N. C. 210.
Dunbar v. American Tel. etc. Co.. .Corporations . .224 111. 9
. 241
. 243
. 152
. 68
. 390
, 596
.1063
. 379
. 682
. 132
Fidelity Trust etc. Co. v. Louis-
ville Banking Co Judgments. ..119 Ky. 675 279
Finch V. Haynes Deeds 144 Mich. 352. . . 447
Fischer v, Butz Partition 224 HI. 379 160
Ford V. State Homicide 71 Neb. 246 591
Frazier v. Poindexter Agency 78 Ark. 241. ... 33
French v. Vradenburg Wills 105 Va. 16 838
Gertsen's Will, 'a re Wills 127 Wis. 602 1060
Greenman v. O 'Riley Seduction . . . .144 Mich. 534. . . 466
Harvey v. Ryan Injunction. . .. 59 W. Va, 134. . 897
Hay V. City of Baraboo Streets 127 Wis. 1 977
Hayes v. Rich Executors.. ..101 Me. 314 314
HoUoway v. Holloway Divorce 126 Ga. 459. 102
Huber v. Martin Insurance . . . .127 Wis. 412 1023
Humbarger v. Humbarger Probate Courts . 72 Kan. 412... 204
Insurance Co. of Tennessee v. Wal-
ler Trusts 116 Tenn. 1 763
Interstate Nat. Bank v. Bingo ... Banking 72 Kan. 116... 176
Ivers & Pond Piano Co, v. Alleo. . Trover 101 Me. 218 307
Ives V, Atlantic etc. E. R. Co Stat, of Frauds.l42 N, C. 131 732
Jackman V. Eau Claire Nat. Bank. BflHArrupfcy. ..125 Wis. 465... 955
Jacobson v. Bcntzler Contracts 127 Wis. 566 1052
Jones V. Crawford Homestead.. ,119 Ky. 5.j4 273
Jones V. Jones Bills and Notcs.lOl Me. 447 .... 328
Klauber V. Schloss Fraud. Con... .198 Mo. 502 486
Knights of Maccabees v, Sackett. , JSejie/ft Society. 34 Mont. 357... 532
Lane v. Fidelity etc. Ins. Co Insurajtce . . ..142 N. C. 55.... 729
Leahy v. Wayne Circuit Judge. . .Judgments ....144 Mich, 304... 443
Levin v. Gladatein Judgments. . . .142 N. C. 4S2. . . 747
Liddell v. Bodenheimer Judgments. ... 78 Ark. 364. . . 42
12 Cases Reported.
KAia. SUBJECT. WEPORT. PAGE.
Lloyd T. Hulick Deeds 69 N.J. Eq. 784. 624
Ludlow Lumber Co. v. KnhWng. . .Building Con... 119 Ky. 251 254
McAllister V. Fair Succession.. .. 72 Kan. 533... 233
McCauley v. Jones Mortgage 34 Mont. 375. . . 538
McConnell V. McKillip Game Laws 71 Neb. 712... 614
Marling v. Nommensen Records 127 Wis. 363 1017
Marshall v. St. Louis etc. Ry. Co.. .Bailroads 78 Ark. 213 27
Maryland Tel. etc. Co. v. Simon
Sons Co Telephones.. .103 Md. 136 346
Matlock V. WiUiamsville etc. Ey.
Co Death 198 Mo. 495 481
Mayv. Pennell Suicide 101 Me. 516 334
Metropolitan Life Ins. Co. v. Eli-
son Insurance .. . . 72 Kan. 199 189
Milske V. Steiner Mantel Co Building Con.. .WZ Md. 235 354
Moore v. Durnan Lost Check 69 N. J.Eq. 828. 635
Moores v. State Mandamus. ... 71 Neb. 522 605
Morgart V. Smouse Partnership. ..103 Md. 463.... 367
Morris v. Duncan Damages 126 Ga. 467 105
Newport News etc. Ey. Co. v.
Clark Negligence. ..105 Va. 205 868
North Carolina Corp. Com. v. At-
lantic etc. E. E. Co Railroads 137 N. C. 1 636
O'Connor v. St. Louis Transit Ck>..Atty's Lien . .198 Mo. 622 495
Perry v. Hackney Deeds 142 N. C. 368. . . 741
Petroski v. Minzgohr V'dor ir F 'dee. 144 Mich. 356. . . 450
Prewitt V. Security Mut. Life Lis.
Co Insurance.. ..119 Ky. 321 264
Purinton v. Purinton Evidence 101 Me. 250 309
Eeeder v. Meredith Executors . . . . 78 Ark. Ill ... . 22
Rich V. Hayes Executors.. ..101 Me. 324 321
Eichardson v. Busch Executors .. . .198 Mo. 174 472
Rolfe V. Lake Shore etc. Ry. Co.. .Carriers 144 Mich. 169. . . 388
Euflfner Bros. v. Dutchess Ins. Co.. Insurance . . . . 59 W. Va. 432. . 924
Rugg V. Lemley Party-wall .... 78 Ark. 65 17
Rutherford v. Eutherford Partition 116 Tenn. 383... 799
Salina, City of, v. Blaksley Weapons 72 Kan. 230... 196
Samuelson V. State Carriers 116 Teun. 470... 805
Sawyer v. Norfolk etc. E. E. Co.. . Slander 142 N. C. 1 716
Schirm v. Wieman Contract 103 Md. 541.... 373
Scoggin V. Hudgins Executors . . . . 78 Ark. 531 ... . 60
State V. Bradley Forgery.. .."..116 Tenn. 711... 836
State V. District Court Foreign Will.. 34 Mont. 96 510
State V. District Court Justice 's Court. 34 Mont. 112 .. . 522
Cases Reported. 13
NAME. SUBJECT. REPORT. PAGE.
State V. District Court Em. Domain. . . 34 Mont. 535 . . . 540
State V. Dorr Hecognizance. . 59 W. Va. 188. . 915
State V. Frederickson Intoxicants . . .101 Me. 37 295
State V. Lilliston Homicide 141 N. C. 857. . . 705
State V. Monahan Elections 72 Kan. 492 224
State V. Ring Seduction 142 N. C. 596. . . 759
State V. Wheeler Taxation 141 N. C. 773. . . 700
SufiFel V. McCartney Nat. Bank ... Banlcruptcy . . .127 Wis. 208 1004
Swing V. St. Louis Refrigerator
etc. Co Judgments.. . . 78 Ark. 246 38
Tanner v. Bowen Eelease 34 Mont. 121. . . 529
Thompson v. Fidelity Mut. Life
Ins. Co Insurance 116 Tenn. 557.. 823
Thompson v. Silverthorne Cotenancy. . . .142 N. C. 12 727
Tidewater Quarry Co. v. Scott Setoff. . 105 Va. 160 864
Tipton V. Smythe Limitations ... 78 Ark. 392 44
Townsend v. Norfolk Ry. etc. Co. . Street Bailway. 105 Va. 22 842
Trough V. Trough Divorce 59 W. Va. 464 940
United Brothers v. Williams Corporations . .126 Ga. 19 64
Walker v. Potomac etc. B. E. Co. .. Bailroads 105 Va. 226 871
Walpert v, Bohan Bathhouse E'pr..l26 Ga. 532 114
Watkins v. Robertson Options 105 Va. 269 880
White V. Horn Admin 'tions . .224 111. 238 155
Wilcke V. Duross Judgments .... 144 Mich. 243 . . . 394
Winkler v. Killian Parent ^ Child. lU N. C. 575. . . 694
Wood Reaping etc. Co. v. Ascher. . Guaranty 103 Md. 133 343
Wyandotte Brewing Co. v. Hart-
ford Fire Ins. Co Insurance 144 Mich. 440. . . 458
Yellowstone Park B. B. Co. v.
Bridger Coal Co Em. Domain 34 Mont. 545. . 546
AMEKICAJST STATE REPORTS.
VOLXTME 115.
(15)
CASES
IN THE
SUPREME COURT
OP
ARKANSAS.
RUGG V. LEMLEY.
[78 Ark. 65, 93 S. W. 570.]
PARTY-WALLS — Charge on Land. — An agreement by an ad-
jacent lot owner to pay part of the cost of a party-wall when he
commences to use it creates a charge in the nature of an equitable
lien upon his part of the lot on which the wall is erected, which is
enforceable in equity, (p. 19.)
EQUITY JUBISDICTION.— Effect of Prayer.— The statement
of facts in a complaint in equity, and not the prayer for relief, con-
stitutes the cau&e of action, which confers jurisdiction, (p. 20.)
PAETY-WALLS — Covenant Running With Land. — An agree-
ment of an adjoining owner to pay for the use of a party-wall is a
covenant running with the land, and the right to recover the sum
agreed upon passes to the grantee of the original builder under his
deed, (p. 20.)
Wood & Henderson and M. S. Cobb, for the appellants.
Greaves & Martin, for the appellee.
«« McCULLOCH, J. The plaintiffs, B. L. Lemley and
M. F. Work, are the owners of lot 27 in block 89 in the city
of Hot Springs, on which is situated a two-story brick
building, the center of the south wall of the building being
on th^ line between lots 47 and 48. Lot 48 is owned by
D. C. Riigg, who leased the same to defendant Ed Spear.
This suit was brought in chancery by the plaintiffs, Lemley
and Work, against defendants Spear and Ledwidge (a
building contractor) to enjoin them from using tKe south
wall of plaintiff's building as a party-wall in the construc-
tion of a new building on lot 48. It is alleged in the com-
plaint that the wall is wholly upon lot 47, and is the prop-
erty of plaintiffs, and that the defendants are proceeding,
without right, to cut into the wall for the purpose of join-
Am. St. Rep., Vol. 115—2 (17)
18 American State Reports, Vol. 115. [Arkansas, ■
ing the new building to it. A temporary restraining order
was issued as prayed for, but the same was subsequently
dissolved when it was shown that the wall was a party-
wall on the line between lots 47 and 48.
On motion of defendant Spear, his lessor, D. C. Rugg,
the owner of lot 48, was made a defendant in the cause.
After the dissolution of the temporary restraining order,
the plaintiffs filed an amendment to their complaint, pray-
ing that if the court should determine that the wall de-
scribed in the complaint is a party-wall, and equally on
lots 47 and 48, the plaintiffs recover of defendant Rugg one-
half of the original cost of the wall.
After the dissolution of the injunction. Alma B. Womack,
the widow of J. P. Warren, deceased, filed her intervention
in the cause, in which she alleges that said Warren in his
lifetime was the owner of lot 47 ; that w*hile such owner, by
agreement between himself and D. C. Rugg, he erected upon
the division line between lots 47 and 48 a brick wall (the
wall in question) ; that at the time of the erection of said
wall the portion ^^"^ of said lot 48 on which said wall was
built was placed in the possession of said J. P. Warren, with
the agreement and understanding by the owner of said lot
48 that whenever the wall was used by the owner of said
lot 48, Warren should be paid one-half the price or value
thereof; that said agreement was oral; that said wall then
became the personal property of said Warren ; that Warren
subsequently died, leaving the intervener, his widow, and
also leaving a will, by and in which he bequeathed to the
intervener all his personal property; that by virtue of said
will the said wall, and the agreement with reference there-
to, became the personal property of the intervener; that
the wall is of the value of five hundred and fifty dqllars;
that recently D. C. Rugg, who is now the owner of said
lot 48, by an agreement with the defendant Spear, as his
tenant, has misde use of the wall, by attaching thereto the
sleepers. and joists of the house that Spear is erecting on
said lot 48, by virtue of all of which sh« alleges that D.
C. Rugg is indebted to her in the sum of the value of said
wall.
Defendant Rugg filed demurrers to the intervention of
Mrs. Womack and the complaint of the plaintiffs, which
were both overruled by the court, and he then filed his an-
Feb. 1906,] Rugg v. Lemlet. 19
swer, in which he denied specifically all the material alle-
gations contained in said interplea.
Rugg also filed his motion to transfer to the law court,
which was overruled. Upon final hearing, the chancellor
rendered a decree in favor of the plaintiffs, Lemley and
Work, against defendant Rugg foj* the recovery of the sum
of four hundred and seventy-five dollars, with interest,
one-half of the cost of the wall, and "that, upon the pay-
ment of the judgment aforesaid by D. C. Rugg, .... his
heirs and assigns, shall hold, have and enjoy the easement
of the party-wall situate on part of said lot 47 owned by
the plaintiffs herein for the life of said wall; also to in-
clude that part of said wall on said lot 47, but in common
with plaintiffs, their heirs and assigns, as to that strip
of land actually covered by said party-wall as well as the
wall itself appurtenant to both lots,"
The intervention of Mrs. Womack was dismissed for
want of equity. Rugg and Mrs. Womack appealed to this
court.
•® There are two questions of law presented: 1. Whether
the court had jurisdiction to hear and determine the cause
of action against appellant Rugg for the recovery of half
the cost of the wall; and 2. Which of the two claimants
should recover the same, Mrs. Womack, the widow and
legatee of J. P. Warren, the original owner of lot 47 and
builder of the wall, or Lemley and Work, the grantees of
Warren under deed conveying lot 47 "with all appur-
tenances thereunto belonging."
The proof failed to sustain the cause of action stated in
the original complaint, and the court denied the relief
prayed. The "** amendment to the complaint, filed after
the dissolution of the injunction, stated a different cause of
action and one inconsistent with the facts stated in the
original complaint, but one which was cognizable in equity.
The agreement of Rugg to pay part of the cost of the wall,
when he commenced use of the wall, became a charge in
the nature of an equitable lien upon the lot on which the
wall was erected, and was enforceable in equity: Washburn
on Easements and Servitudes, 612; Richardson v. Tobey,
121 Mass. 457, 23 Am. Rep. 283 ; Nelson v. McEwen, 35 111.
App. 100; Roche v. Ullman, 104 111. 11; Keating v. Korf-
hage, 88 Mo. 524; Burr v. Lamaster, 30 Neb. 688, 27 Am.
20 American State Reports, Vol. 115. [Arkansas,
St. Rep. 428, 46 N. W. 1015, 9 L. R. A. 637 ; First Nat. Bank
V. Security Bank, 61 Minn. 25, 62 N. W. 264.
The fact that only a personal judgment against Rugg was
prayed for and granted did not prevent the court from
assuming jurisdiction. The statement of facts in the com-
plaint, and not the prayer for relief, constitued the cause of
action which conferred jurisdiction upon the court: San-
noner v. Jacobson, 47 Ark. 31, 14 S. W. 458; Waterman v.
Irby, 76 Ark. 551, 89 S. W. 884.
The more serious question in the case is whether the
agreement concerning the payment for use of the party-
wall is a covenant which runs with the land and the right
to recover the agreed sum passes to the grantee of the
original builder, under his deed to the lot, or whether it
is the personal asset of the covenantee which passes to his
assignee or personal representative.
Upon this question the authorities are inharmonious, but
we incline to the view that the chancellor was correct in
adopting the line of authorities which hold that such an
agreement is a covenant which runs with the land and
passes to the grantee of the original builder's lot: Rich-
ardson V. Tobey, 121 Mass. 457, 23 Am. Rep. 283 ; Maine v.
Cumston, 98 Mass. 317 ; Tomblin v. Fish, 18 111. App. 439 ;
McChesney v. Davis, 86 111. App. 380; Piatt v. Eggleston,
20 Ohio St. 414; Adams v. Noble, 120 Mich. 545, 79 N. W.
810; Kimm v. Griffin, 67 Minn. 25, 64 Am. St. Rep. 385,
69 N. W. 634.
Under the contract, when the wall was built, the builder
became the sole owner thereof, with an easement over the
strip of the adjoining lot built upon, subject to the right
of the owner of the adjoining lot to use the wall upon pay-
ment of half the cost thereof. The whole wall, together
with the easement over the adjoining lot, passed under
the deed executed by the builder as ''^ an appurtenance to
his lot: McChesney v. Davis, 86 111. App. 380; Kimm v.
Griffin, 67 Minn. 25, 64 Am. St. Rep. 385, 69 N. W. 634.
The owner of the adjoining lot, by paying half of the cost
of the wall in accordance with the terms of the contract,
not only obtained title to that part of the wall which was
built upon his lot, but he also acquired an easement over
the other lot for support of the wall. These consummated
rights he obtained, not from the builder, the original owner
Feb. 1906.] Rugg v. Lemley. 21
of the lot, but through and from the person who was the
owner of the lot at the time he used the wall and paid
the agreed price. Though the rights of the parties were
fixed by the original contract, yet the enjoyment of them
was consummated only when the agreed price should be
paid. Therefore, in contemplation of law, these rights were
obtained through and from the present owner of the lot
and wall, and he alone is entitled to the compensation.
As is well stated by the supreme court of Illinois in the
case of Gibson v. Holden, 115 111. 199, 56 Am. Rep. 146,
3 N. E. 282: "In all such cases (that is, where the title
to the wall is in the builder) the title to the whole wall
may be regarded as appurtenant to the lot of the builder,
and so passing, by every conveyance of it, until a severance
of the half by the payment of the purchase money. The
sale of the half of the wall does not occur, nor the title to
it pass, in those cases until the payment is made ; and so
necessarily it is, constructively, a sale by the assignee of
so much of the wall."
The contrary view is taken by the Nebraska court, and
the question is discussed with much learning and ability
by that court in the recent case of Cook v. Paul (Neb.), 66
L. R. A. 673, where all the authorities supporting that
view are cited, but we are unable to agree with the conclu-
sion there reached.
The decree of the chancellor is therefore affirmed.
Party-wall. — An Agreement Between Adjoining owners to pay for the
building of a party-wall is generally regarded as a covenant running
with the land: See Southworth v. Perring, 71 Kan. 755, 114 Am. St.
Rep. 527, notes to Dunscomb v. Randolph, 89 Am. St. Rep. 941;
Geiszler v. De Graaf, 82 Am. St. Rep. 679.
22 American State Reports, Vol. 115. [Arkansas,
REEDER V. MEREDITH.
[78 Ark. Ill, 93 S. W. 558.]
EXECUTORS AND ADMINISTEATOBS.— An Administrator
la a Trustee for all who are interested in the estate which he has in
charge, (p. 23.)
TBUSTEES — Purchase by. — Although, as a general rule, a
trustee cannot buy from the beneficiary, yet an exception exists when
there is a distinct and clear contract executed after a jealous and
scrupulous examination of all the circumstances and proof that the
beneficiary intended the trustee to buy, and there is a fair considera-
tion, no fraud, no concealment, and no advantage taken by the trustee
of information acquired by him in his character as such. (p. 23.)
TRUSTEES — ^Purchase by — Burden of Proof. — A trustee who
purchases proj)crty from his beneficiary has the burden of proof to
show the utmost good faith in the transaction, (p. 25.)
DEEDS — Voidable in Part. — A contract of conveyance, if
voidable in part, is voidable as to all, as there can be no apportion-
ment thereof, (p. 25.)
EXECUTOBS AND ADMINISTBATOBS— Purchase by— Im-
provements.— An administrator who purchases the lands of the estate
in bad faith is not entitled to any compensation for improvements
placed thereon, (p. 26.)
EXECUTORS AND ADMINISTEATOBS— Purchase by— Be-
tum of Consideration Beceived. — If an administrator purchases the
interest of an heir in the estate in bad faith, and is sued by him to
enforce a trust as to part of the property, the heir need not return
the consideration received, if the administrator has realized from part
of the property more than he paid for all of it., (p. 26.)
EXECUTOBS AND ADMINISTBATOBS— Purchase by— Ac-
counting.— If an administrator purchases the interest of an heir in
the estate and is sued by him to enforce a trust as to part of the
property purchased, he is not entitled, in such suit, to an accounting
by the administrator of his profits on the part of the interest of such
heir not involved in the suit. (p. 26.)
D. B. Sain and W. C. Rogers, for the appellant.
Feazel & Bishop, for the appellees.
**■* WOOD, J. 1. At the time appellant purchased the
land from his sisters, he was administrator of his father's
estate, and as such had possession and control of the land
for the payment of the debt *>f the estate for which it ap-
pears the lands were needed: Kirby's Digest, sec. 79, Ap-
pellant, therefore, was trustee for the creditors to see that
their claims were paid. He was also trustee for the heirs
to see that the lands were properly administered in the pay-
ment of the debts, and that the residue of the proceeds of
the lands sold for the purpose of paying the ^ebts should
March, 1906.] Reeder v. Meredith. 29
be distributed to them according to their respective inter-
ests. Appellant was a trustee for all who were interested
in the estate which he had in charge to administer: Wright
V. Campbell, 27 Ark. 637; 1 Woemer on Administration,
sec. 10; 2 Woemer on Administration, sec. 489.
The general rule, says Mr. Perry, is "that the trustee shall
not take beneficially by gift or purchase from the cestui que
trust; .... the question is not whether or not there is
fraud in fact; the law stamps the purchase by the trustee
as fraudulent per se, to remove all temptation to collusion
and prevent the necessity of intricate inquiries, in which
evil would often escape detection, and the cost of which
would be great. The law looks only to the facts of the re-
lation and the purchase. The trustee must not deal with
the property for his own benefit." "But," he continues,
"there are exceptions to the rule, and a trustee may buy
from the cestui que trust, provided there is a distinct and
clear contract, ascertained after a jealous and scrupulous
examination of all the *** circumstances; that the cestui
que trust intended the trustee to buy, and there is fair con-
sideration and no fraud, no concealment, no advantage
taken by the trustee of information acquired by him in the
character of trustee. The trustee must clear the transac-
tion of every shadow of suspicion Any withhold-
ing of information, or ignorance of the facts or of his rights
on the part of the cestui que trust, or any inadequacy of
price, will make such purchaser a constructive trustee ' ' :
Perry on Trusts, sec. 195. This is the general doctrine an-
nounced by our own court and recognized by practically all
the authorities: See Thweatt v. Freeman, 73 Ark. 575, 84
S. W. 720 ; Cook V. Martin, 75 Ark. 40, 87 S. W. 625, 1024 ;
Cornish v. Johns, 74 Ark. 231, 85 S. W. 764. As to the
purchase of trust property bj' the trustee, see, also, Gibson
V. Herriott, 55 Ark. 85, 29 Am. St. Rep. 17, 17 S. W. 589;
Hindman v. O'Connor, 54 Ark. 627, 16 S. W. 1052, 13
L. R. A. 490; White v. Ward, 26 Ark. 445; Imboden v.
Hunter, 23 Ark. 622, 79 Am. Dec. 116, where the general
rule is declared. See, also, 28 American and English Ency-
clopedia of Law, second edition, pages 1016, 1020, where the
rule and exception thereto are stated, and the numerous
authorities, English and American, are cited; 2 Woemer
on Administration, sec. 487 et seq.
24 American State Reports, Vol. 115. [Arkansas,
In Handlin v. Davis, 81 Ky. 34, it is said: "An adminis-
trator or executor is not allowed to purchase or speculate
upon the estate confided to him for the purposes of adminis-
tration. * '
In all cases the burden is on the trustee to establish all
the requirements necessary to bring his title within the
exception to the rule: 28 Am. & Eng. Ency. of Law, 2d ed.,
1023.
In Coles V. Trecothick, 9 Ves. Jr. 234, Lord Eldon said:
**Upon the question as to a purchase by a trustee from the
cestui que trust I agree, the cestui que trust may deal with
his trustee, so that the trustee may become the purchaser
of the estate. But, though permitted, it is a transaction of
great delicacy, and which the court will watch with the
utmost diligence, so much so that it is very hazardous for
a trustee to engage in such a transaction." And further
on in the opinion, after stating the requirements to bring
a case within the exception upholding such transactions,
he says: "I admit, it is a difficult case to make out, wherever
it is contended the exception prevails."
The chancellor found: "That defendant, W. S. Reeder,
was the acting administrator of the said estate; that prior
to the purchase by him he submitted to the respective plain-
tiffs an offer, on ^^® behalf of his mother, for two hundred
and twenty-five dollars for the undivided one-eighth inter-
est she had in her father's estate; that at the time of the
submission of the said offer defendant stated to plaintiffs
that after the debts of the estate had been paid that would
be their respective shares, and that his mother requested
him to purchase it in order to hold the estate together until
her death, when it would go back to all the children; that
defendant further represented to plaintiff that that part
of the lands allotted as dower and homestead* was not to be
taken into consideration in arriving at the extent of plain-
tiff's interest, and that he was not purchasing that interest
at all; that plaintiffs, relying on these declarations, exe-
cuted the deeds in controversy ; that the value of the home-
stead and dower land was four thousand five hundred dol-
lars, and that the value of the other lands was three
thousand five hundred dollars; that the two hundred and
twenty-five dollars received by plaintiffs for their respective
interests was not an adequate price therefor." It could
March, 1906.] Eeedeb v. Meredith. 25
serve no useful purpose to review at length the testimony
upon which the chancellor's findings were based. It suf-
fices to say that, eliminating all incompetent and irrelevant
testimony, we are of the opinion that his conclusions of
fact were not clearly against the weight of the evidence.
Applying the principles of law announced, supra, to these
facts, the conclusion reached by the lower court "that the
defendant (appellant here) by reason of his relation of
trustee for the creditors, the heirs and next of kin, was in-
capable of dealing with the trust property to his advan-
tage" was clearly correct.
But, aside from any trust relationship, appellant was en-
joined to the utmost good faith in dealing with his sisters.
The dependence upon and confidence in him to do the right,
engendered by the natural love and affection incident to
such close blood kin, made uberrimam fidem imperative:
Million V. Taylor, 38 Ark. 428.
2. The court did not err in canceling the deed from Annie
Meredith to appellant, so far as it related to the south
half of the northeast quarter, the northeast quarter of the
northeast quarter, and the east half of the northwest quar-
ter of section 19, and the northeast quarter of the south-
west quarter of section 20, all in township 11 south, range
27 west. "While this land had been assigned to the widow
of Sam Reeder and the mother of appellant as homestead
and dower, and was therefore not in the possession or under
the control of the appellant as the administrator, still it
was embraced in ^^"^ the deed which conveyed the interest
of appellee in the lands of the estate which were under the
control of appellant as administrator, and which deed, as
we have seen, was voidable. Now, the deed to all these
lands was based upon one and the same consideration, and
was an entire and indivisible transaction. The contract of
conveyance was entire, and, being voidable in part, was
voidable as to all. For there is no apportionment of such
a contract: See Phoenix Ins. Co. v. Public Parks Am. Co.,
63 Ark. 187, 37 S. W. 959 ; Mc(^ueeny v. Phoenix Ins. Co.,
52 Ark. 257, 20 Am. St. Rep. 179, 12 S. W. 498, 5 L. R. A.
744; State v. Scoggin, 10 Ark. 326; Jackson v. Jones, 22
Ark. 158; Iron Mt. etc. R. Co. v. Stansell, 43 Ark. 275.
And, as to entire contracts, Higgins v. Gager, 65 Ark. 604,
47 S. W. 848.
26 American State Reports, Vol. 115. " [Arkansas,
3. The court did not err in refusing to allow appellant
for alleged improvements. The testimony of appellant
tends to show that what improvements he put upon the
lands were under contract with his mother, she having pos-
session and control at the time appellant claims the im-
provements were made, and that she paid appellant for
these improvements in allowing him the use of the land for
two years. Moreover, if appellant's purchase was in bad
faith, as the court's findings show and the proof warrants,
he would not be entitled to any compensation for improve-
ments.
4. It was not necessary under the facts of this record for
appellee to offer to return the two hundred and twenty-
five dollars which appellant paid her for her interest in the
land, before she could maintain her suit for a rescission of
the contract. For the proof shows that appellant had real-
ized from appellee's interest in the estate which he bought,
apart from the reversionary interest in the dower and home-
stead, the sum of fifty-five dollars and twenty-five cents
more than he paid. He is therefore in statu quo, with a
clear profit of fifty-five dollars and twenty-five cents.
5. The claim of appellee that appellant should pay her the
amount he received from the lands sold in excess of what
he paid her for her interest is without equity, since the
oourt annulled the sale of her reversionary interest in the
dower and homestead. All the proof shows that she was
willing to sell her interest in the estate, and would have
sold it for the consideration paid her, had her dower and
homestead not been included. There is nothing in the proof
to impeach the good faith of the contract between appellant
and appellee except the alleged misrepresentation on the
part of appellant that the reversionary interest of appellee
was ^^** not to be included in the deed she should execute
for her interest in the lands of the estate. But for this there
would have been no cause for setting aside the deed.
The small profit realized would not show any inadequacy
of consideration.
So our conclusion on the cross-appeal is that the court did
not err in refusing appellee's claim for the fifty-five dollars
and twenty-five cents.
The decree was right. Affirm.
March, 1906.] IMarshall v. St. Louis etc. Ry. Co. 27
The Purchase by an Executor or Administrator of his decedent's
property may be voidable, but it is not void: See Mason v. Odum, 210
111. 471, 102 Am. St. Kep. 180, and cases cited in the cross-reference
note thereto.
A Trustee is Incapacitated, as a rule, to purchase any interest in
the trust property: Gilbert v. Hewetson, 79 Minn. 326, 79 Am. St.
Eep. 486i Petrie v. Badenoch, 102 Mich. 45, 47 Am. St. Eep. 503.
MARSHALL v. ST. LOUIS, IRON MOUNTAIN AND
SOUTHERN RAILWAY COMPANY.
■ [78 Ark. 213, 94 S. W. 56.]
EVIDENCE — ^Ees Gestae. — If a railroad brakeman is mortally
injured while in the discharge of his duty and lives only a short time
thereafter, a statement by him as to how he received the injury is
admissible in evidence as part of the res gestae, (p. 29.)
EAUiBOADS — Duty and Liability as to Disabled Cars. — A rail-
road company is bound only to exercise due care, through its vice-
principals, and through a proper system of timely inspection, to dis-
cover disabled cars and notify its trainmen of such condition. When
this is done, the risk of handling the cars and carrying them to the
shop becomes one of the risks ordinarily incident to the employment
assumed by such trainmen, (p. 30.)
BAIIjBOADS — Disabled Cars — Bisks Assumed by Trainmen. —
If a car is reported to a railroad brakeman as being out of order or
disabled, or is known to him to be in such condition, the burden of
ascertaining the defect and source of danger is cast upon and is as-
sumed by him. (p. 31.)
BAILHOADS — Disabled Cars — ^Duty to Employ^ — ^Assumption
of Bisks. — Although a railway employ^ is engaged in the hazardous
work of handling disabled cars, he does not assume risks created by
the negligence of the railroad company in not exercising due care to
protect him. (p. 32.)
BAIIjBOADS — Disabled Cars — Assumption of Bisk. — A railroad
brakeman engaged in coupling a disabled car to be taken to a repair
shop, with notice of its condition, assumes the risk of handling it.
(p. 32.)
BAUjBOADS — Disabled Cars — Assumption of Bisks. — A rail-
road employ^ whose duty it is to handle disabled cars, knowing that
a certain car is disabled, assumes as one of the ordinary risks of his
employment any injury resulting from the disabled condition of such
car in the absence of negligence on the part of the railroad com-
pany, (p. 32.)
Marshall & Coffman and Trimble & Robinson, for the
•appellant.
O. L. Miles, for the appellee.
28 American State Reports, Vol. 115. [Arkansas,
^'^ McCULLOCH, J. Appellant, as administratrix of the
estate of her deceased husband, C. R. Marshall, brought this
action against appellee to recover damages by reason of his
death, alleged to have been caused by the negligence of ap-
pellee. Deceased was a brakeman employed by appellee,
and was killed by a train at Russellville, Arkansas, while he
was coupling cars. Negligence of appellee was alleged in
allowing the roadbed to become covered with piles of
clinkers and cinders, and in allowifig a drawhead and coup-
ler on one of the cars which deceased was attempting to
couple to become defective, and in allowing a hinge of an
apron attached to the car to become broken, none of which
defects, it is alleged, deceased had notice of. The answer
denied all the allegations of negligence, and alleged con-
tributory negligence on the part of deceased, and that his
death resulted from an accident which was a part of the risk
he assumed in his employment.
When the introduction of testimony was completed, the
court instructed the jury to return a verdict for the defend-
ant, which was done, and the plaintiff appealed. The only
question, therefore, presented is whether there was suffi-
cient testimony, giving it the strongest probative force in
support of plaintiff's alleged cause of action, to justify a
verdict in her favor.
It is shown that deceased made three or four attempts to
couple the cars, which were ineffectual on account of the
failure of the coupler to work automatically. He was killed
in the last attempt. No defect in the coupler is shown to
have existed, except that it was perhaps rusty, and the
knuckle failed to open and close from the impact of the
cars coming together. Immediately after the accident it
worked all right after being greased. The car which he was
attempting to couple onto the train was a disabled dirt car
which had been in use in the work of reconstructing the
roadbed. On the end of the car was an iron apron about
three feet wide, extending the full width of the car, which
was attached to the car by large iron hinges. The apron
was arranged so that, when turned down in a horizontal
position, it covered the space between that car and the next
one, and enabled the plow to pass along unobstructed from*
car to car to expel the *** loads of dirt. One of the hinges
on the apron was broken, and, when the apron was turned
back, it protruded twelve inches, so one of the witnesses
March, 1906.] Marshall v. St. Louis etc. Ry. Co. 29
stated, over the end of the ear. Deceased, in attempting
the last time to couple the ears, stepped out from between
them, gave the signal to the engineer to back up, and
walked back between the cars to adjust the knuckle of the
coupler. He had his hand on the knuckle when the cars
came together, and he attempted to jump out from between
them, and was caught by the hinge, and fell between the
ends of the couplings, and was hurt. The hinge either
pierced his body or his clothing. He lived only a very
short while, and when asked, after he partially revived from
the shock, concerning the manner in which he received the
injury, merely said, "The hinge." There was sufficient
evidence to have justified the jury in finding that the com-
pany was guilty of negligence in allowing piles of clinkers
and cinders to accumulate along the track which might
hinder the trainmen in handling and coupling cars, but
there was no testimony tending to show that this contrib-
uted to the injury of appellant's intestate. One witness
stated that he was either "caught by something or stum-
bled," he did not pretend to know definitely which it was.
Two eye-witnesses introduced by plaintiff stated that he was
caught by something and was thrown over between the
ends of the couplings. There can be no doubt, under the
evidence, that he was caught by the hinge as he attempted
to pass out from between the cars. This was his own brief
account of the accident, which was stated under circum-
stances which rendered it admissible as part of the res
gestae. So there was nothing to go to the jury on this
charge of negligence.
The evidence was undisputed that the coupler was not in
perfect working order, and that the hinge on the apron of
the car was broken, either of which defects the jury might
have found from the evidence contributed to the injury.
There was also sufficient evidence to warrant a finding that
the car had not been inspected and notice given in the usual
way of the defects. But it does not follow from this that
the servants of the company were negligent in this regard,
or that the accident was not due to one of the risks which
appellant's intestate assumed by virtue of his employment.
On the contrary, it is clear from the evidence that he had
notice that the car was ^^"^ disabled in some way, and that
it was being coupled into the train for the purpose of carry-
ing it to Van Buren for repairs. This train was made up
30 American State Reports, Vol. 115. [Arkansas,
at Russellville for a trip to Van Buren, and the conductor
had orders from the office of the trainmaster to take up
all bad-order dirt cars and all empty boxcars on the road
between Russellville and Van Buren, and convey them to
Van Buren for repairs. Deceased knew of this order, and
assisted in locating the bad-order dirt cars (there being two
of them) on the sidetrack at Russellville. The conductor
and one of the brakemen testified that deceased had the
switch list containing the numbers of those cars, and that
all three of them hunted up the cars and looked at them.
In this way he received notice that they were disabled cars
to be carried to the shop for repairs. It may be that he did
not know of the projecting broken hinge before he was
caught by it, though it is highly probable from the evidence,
that he did observe it. It was a defect easily discernible
on casual observation of that end of the car, and the con-
ductor testified that he and deceased examined the car to-
gether, and that the latter was bound to have seen it. But
the company was not bound to give him specific notice of
the defects. It was not customary to do so, and under the
facts of this case it was not required in the exercise of due
care. It was customary for the inspector merely to mark
with chalk on the disabled car the letters "B. 0.," meaning
bad order. This was not done in this instance, and the
jury would have been warranted in so finding, and that the
inspector was guilty of negligence in failing so to do; but,
as deceased received information of the same fact from
another source, it cannot be said that the negligence of the
inspector contributed to the injury. In the operation of
railroad trains, cars will necessarily become disabled, some-
times from ordinary wear of use and sometimes from un-
avoidable accident. They must then be conveyed to the
shop for repairs, and it is the duty of the trainmen to do
this. It is necessarily and unavoidably a part of the duties
arising from their employment as train operatives, because
the company obviously cannot provide a repair shop wher-
ever a car may become disabled, nor send out a special train
and corps of men to bring in or repair every disabled car.
It is only bound to exercise due care, through its vice-prin-
cipals, **® and through a proper system of timely inspec-
tion, to discover the disabled cars and notify the trainmen
of such condition. When this is done, the risk of handling
the cars and carrying them to the shop becomes one of the
March, 1906.] ALvrshall v. St. Louis etc. Ry. Co. 31
risks ordinarily incident to the employment, and is assumed
by the employe: 1 Labatt on Master and Servant, sec. 268;
Dresser on Employers' Liability, p. 409; 4 Thompson on
Negligence, sec. 4729; Chesapeake etc. R. Co. v. Hennessy,
96 Fed. 713, 38 C. C. A. 307; Yeaton v. Boston etc. R. R.,
135 Mass. 418; Judkins v. Maine Cent. R. Co., 80 Me.
417, 14 Atl. 735 ; Arnold v. Delaware etc. Co., 125 N. Y. 15,
25 N. E. 1064; Chicago etc. Ry. Go. v. Ward, 61 111. 130;
Fraker v. St. Paul etc. Ry. Co., 32 Minn. 54, 19 N. W. 349 ;
Kelly V. Chicago etc. Ry. Co., 35 Minn. 490, 29 N. W. 173 ;
Flannagin v. Chicago etc. R. Co., 50 Wis. 462, 7 N. W. 337 ;
Watson V. H. & T. C. Ry. Co., 58 Tex. 434 ; Brown v. Chicago
etc. R. Co., 59 Kan. 70, 52 Pac. 65.
The doctrine applicable to the facts of this case is fully
stated by the supreme court of Minnesota in Kelly v. Chi-
cago etc. R. Co., 35 Minn. 490, 29 N. W. 173, as follows :
"The aspect of the case is, then, this: The plaintiff's in-
testate is notified generally that the car is in bad order, so
that it has been necessary to withdraw it from ordinary
service and lay it up for repairs. When he comes to handle
it, he does so knowing that, for some reason not disclosed
to him, it is not suitable for use in the ordinary way. Not
knowing what, in particular, those reasons are, if he han-
dles the car at all, he handles it as a ear which is unsuit-
able for use, and at his own risk, not only for its defects —
at least for such as are apparent to or would be fairly sug-
gested by ordinarly diligence and careful observation, like
those of the brake on this car The plaintiff's intes-
tate must be taken to have asstlmed the risk of handling
this car as one in bad order, which it therefore might be
dangerous to handle in the ordinary way, and as to which,
in the absence of any definite information as to the respect
in which it was defective, the burden of ascertaining the
defects and source of danger was cast upon and assumed
by him. As he took this risk and burden upon himself, he
cannot hold the defendant responsible for it."
In Chesapeake etc. R. Co. v. Hennessy, 96 Fed. 713, 38
C. C. A. 307, Judge Lurton, speaking for the court, said :
"The rule is well settled that if the work of the employe
consists, in whole or in part, in dealing with damaged or
defective cars, and which, by the very **® nature of his
occupation, he must know, or have some reason to know,
are unsafe and dangerous, he voluntarily assumes the risk
32 American State Reports, Vol. 115. [Arkansas,
and hazards which are incident to the duty he was engaged
to perform. It is not a case where dangerous or defective
instrumentalities are supplied by the master to be used
in his work, and where notice of such danger should be
given, but a case where the instrumentalities to be handled
and worked with or upon are understood to involve peril
and to demand unusual care. In such cases, the risk is
assumed by the servant as within the terms of his contract,
and compensated by his wages."
We do not mean to hold that because the servant is en-
gaged in the hazardous work of handling disabled cars he
is deemed to have assumed risks created by the negligence
of the company or its vice-principals, or that the company
is absolved from the exercise of due care to protect him.
On the contrary, we say that whilst he is engaged in that
work, though he is deemed to have assumed all the ordinary
risks incident to the performance of that particular duty,
yet the same duty rests upon the company and its vice-
principals to commit no act of negligence whereby he may
suffer injury, and to exercise ordinary care to protect him
from danger, as while he is in the discharge of other and
less hazardous work. The case of St. Louis etc. Ry. Co.
V. Touhey, 67 Ark. 209, 77 Am. St. Rep. 109, 54 S. W. 577,
is illustrative of the doctrine. In that case the servant was
a member of a wrecking crew engaged in removing wrecked
cars to the repair shops, and was injured by reason of the
negligent acts of other employes of the company in moving
the train to which the cars were attached at too rapid a
speed. The court held that the company was liable for the
negligence — that it was a risk which the servant had not
assumed. But in the case at bar the servant knew that
the car was disabled. It was a part of his duties to handle
such cars, and, according to all the authorities on the sub-
ject, he must be deemed to have assumed, as one of the or-
dinary risks of his employment, the risk resulting from the
disabled condition of the car.
This being true, the evidence did not justify a verdict in
favor of the plaintiff, and the court properly instructed the
jury to return a verdict for the defendant.
Affirmed.
Riddick, J., not participating.
March, i9i06.] Frazier v. Poindexter. 33
The Liability of an Employer to his employe for injuries arising
from defective machinery and appliances is considered in the note to
Brazil Block Coal Co, v, Gibson, 98 Am. St. Rep, 289. It is the duty
of a railroad company to provide and maintain reasonably safe and
suitable cars and appliances for its employes to work with: Cincin-
nati etc. R. R. Co. V. McMullen, 117 Ind. 439, 10 Am. St. Rep. 67;
Mason v. Richmond etc. R. R. Co., Ill N. C. 482, 32 Am. St. Rep. 814;
Eaton V. New York etc. R. R. Co., 163 N. Y. 391, 79 Am, St, Rep. 600.
On the general doctrine of assumption of risks on the part of an em-
ploye, see the note to Houston etc. Ry, Co. v. De Walt, 97 Am. St.
Rep. 884.
FRAZIER V. POINDEXTER.
[78 Ark. 241, 94 S. W. 464.]
AOENCT — Undisclosed Principal — Setoff.:^— If an undisclosed
principal sues on a contract made by his agent in his own name with
some person who had no knowledge of the agency but supposed that
the agent dealt for himself, such suit is subject to any defense or
setoff acquired by a third person against the agent before he had
notice of the principal's rights, and this rule applies not only to the
sale of goods, but as well to other contracts where the agent is au-
thorized to collect money for his undisclosed principal, (p. 36.)
AGENCY — Knowledge of Undisclosed Principal — Setoff, — If a
Eerson who deals with an agent, acting in his own name, knows, or
as reason to believe, that he is dealing with an agent, though he
does not know who the principal is, he cannot plead against such
principal a defense or setoff which he has against the agent, (p.
36.)
AGENCY — Setoff, — If an agent accepts notes for collection
Bnder an agreement that he will pay the money, when collected, over
a third person, he has no right to use it as a setoff on a demand due
him from his principal, disclosed or undisclosed, (p, 37,)
Smead & Powell and Campbell & Stevenson, for the ap-
pellant.
24* McCULLOCH, J. This is an action brought by N, F.
Frazier, appellant, against E. S, Poindexter, appellee, on
account to recover money alleged to have been collected by
the defendant upon certain promissory notes delivered to
him by one J. W, Ferguson as agent of plaintiff,
Frazier lived at El Dorado, Kansas, and owned a lot of
horses which he placed for sale in the hands of Ferguson,
who was engaged in the business of buying and selling
horses in Arkansas. Ferguson sold the horses for Frazier
in Miller county, this state, taking notes for the purchase
price in his own name. He delivered these notes to Frazier
Am, St, Eep,, Vol. 115—3
34 American State Reports, Voii. 115. [Arkansas,
who subsequently returned them to him (Ferguson) for col-
lection. There is a conflict in the testimony concerning the
indorsements on the notes. Frazier and Ferguson both tes-
tified that they were assigned to the former by written in-
dorsements on the back of each note, whilst Poindexter tes-
tified that Ferguson indorsed them in blank.
Ferguson sent the notes for collection by mail to Poin-
dexter, who was at the time an employe of Ferguson's on a
stated salary, assisting him in buying and selling horses
and cattle, making collections, etc. Ferguson testified that
he directed Poindexter to remit the money when collected
to Frazier. Poindexter testified that Ferguson instructed
him to remit to Frazier any amount left in his hands after
making expenditures directed by him (Ferguson). He col-
lected five hundred and fifty-two dollars and seventy-five
cents on the notes and remitted three hundred and twenty-
five dollars to Frazier, promising to remit the balance soon,
but subsequently he refused to pay the balance of two hun-
dred and twenty-seven dollars and seventy-five cents to
Frazier, upon the alleged ground that Ferguson owed him
more than that amount on account, and claimed that he
had collected the money for Ferguson under the belief that
the notes belonged to the latter and without any informa-
tion that Frazier owned the notes. He claimed in his tes-
timony at the trial that he knew Frazier to be a banker at
El Dorado, Kansas, and supposed that Ferguson directed th'j
remittance to be made to him because he (Ferguson) was
indebted to Frazier.
In his answer, Poindexter set forth the above as a defense
and pleaded his account against Ferguson as a setoff. He
also alleged that, under the belief that Ferguson owned the
horses and notes, he expended large sums, by direction of
Ferguson, ^^^ in feeding and taking care of the horses, and
that he was directed to pay therefor out of the said funds
collected.
A trial before a jury upon the issues thus presented re-
sulted in a verdict for the defendant, and the plaintiff ap-
pealed.
Appellant asked the court to give the following instruc-
tions: "1. The court instructs the jury that if you find
from the evidence in this case that the notes from which
March, 1906.] Frazier v. Poindexteb. 85
the money was collected were made payable to J. W. Fer-
guson or order, and that the said J. W. Ferguson, for value,
before they were due, transferred said notes to Frazier, and
that said notes were received from Frazier for collection by
Ferguson, and delivered to defendant, and he collected
same, and failed to remit said money, then your verdict
must be for plaintiff, for the amount he has received for
Frazier and has not remitted."
But the court, over the objection of appellant, added to
said instruction the following: "If the defendant knew
Frazier was the owner of the notes, or was in possession
of facts that would place a reasonable person on inquiry
as to the ownership."
Appellant also asked the court to give the following in-
struction, which the court, over his objection, modified by
inserting the words in italics: "3. The court instructs the
jury that if you find from the evidence in this case that the
notes were the property of the ^^'^ plaintiff, and the de-
fendant collected the same agreeing to remit the amount so
collected to plaintiff, and knowing the plaintiff to be the
owner of the notes, then your verdict should be for the plain-
tiff in the amount collected less amount remitted, though
you may further find that the said Ferguson is or is not in-
debted to the said Poindexter. ' '
The court refused to give the following instruction asked
by appellant: "4. The court instructs the jury that J. W.
Ferguson is not a party to this suit; and if you find from
the evidence in this case that these notes were taken in the
name of J. W. Ferguson, and by Ferguson transferred to
the plaintiff by writing his name on the back of said notes
for value, and by Frazier were delivered to Ferguson, and
by him delivered to defendant for collection for accoimt
of Frazier, and the defendant accepted said notes for col-
lection for plaintiff and collected same, then your verdict
should be for the plaintiff in the amount collected, less
amount remitted, though you may further find that the wit-
ness Ferguson is or is not indebted to the defendant."
The court erred in refusing the fourth instruction asked
by appellant. That instruction contained a recital of facts
which, if they were found to be true, were sufficient to put
appellee upon notice that the notes belonged to appellant,
and he could not under those circumstances claim a setoff
36 American State Reports, Vol. 115. [Arkansas,
against the money collected thereon. It was undisputed,
under the testimony, that the notes belonged to appellant.
If, therefore, they were taken in the name of Ferguson, but
transferred to appellant by written indorsement, and ap-
pellee accepted them for collection for appellant, he was
bound to take notice of the latter 's ownership, and account
for the money collected. He could not apply it on a debt
due him by Ferguson. This instruction was not covered by
the first instruction asked by appellant and modified by the
court. The latter did not embrace the facts stated in the
former that the assignment of the notes was in writing, so
that appellee was bound to take notice of it, nor that he
accepted the notes for collection for appellant.
It is undoubtedly the law that where an undisclosed prin-
cipal sues on a contract made by his agent in his own name
with some person who had no knowledge of an agency,
but supposed ^^^ that the agent dealt for himself, such suit
is subject to any defense or setoff acquired by the third
party against the agent before he had notice of the princi-
pal's rights: 2 Clark & Skyles on Agency, sec. 537; Tiffany
on Agency, p. 311 : George v. Clagett, 7 Term Rep. 359 ;
Rabone v. Williams, 7 Term Rep. 360; Belfield v. National
Supply Co., 189 Pa. 189, 69 Am. St. Rep. 799, 42 Atl. 131;
Sullivan v. Shailor, 70 Conn. 733, 40 Atl. 1054; Buchanan v.
Cleveland Linseed Oil Co., 91 Fed. 88, 33 C. C. A. 351.
And this rule applies not only to sale of goods, but as
well to other contracts where the agent is authorized to col-
lect money for his undisclosed principal : Tiffany on Agency,
p. 311; Montague v. Forward, [1893] 2 Q. B. 350.
But if the party who dealt with the agent, acting in his
own name, knew, or had reason to believe, that he was deal-
ing with one who was an agent for some third person, he
cannot successfully plead such defense or setoff. He must,
in order to be protected, be innocent of any knowledge or
of facts and circumstances which would put a reasonably
prudent person on inquiry that he was dealing with an
agent. Where he knows that the party he is dealing with
is an agent, although he does not know who the principal
is, he is not protected: Quinn v. Sewell, 50 Ark. 380, 8 S.
W. 382 ; Baxter v. Sherman, 73 Minn. 434, 72 Am. St. Rep.
631, 76 N. W. 211; Semenza v. Brinsley, 18 Com. B., N. S.,
March, 1906.] Frazier v. Poindexter. 37
467, 34 L. J. C. P. 161 ; 114 Eng. Com. L. 467 ; George v.
Clagett, 7 Term Rep. 359 ; Bliss v. Bliss, 7 Bosw. 344.
The third instruction asked by appellant should have
been given, and the court erred in modifying it. If the de-
fendant accepted the notes for collection under an agree-
ment that he would pay the money when collected over to
plaintiff, he had no right to apply it to his own debt, and to
refuse to pay it to plaintiff, even though he had no informa-
tion of Ferguson's agency and believed that the notes be-
longed to Ferguson.
"The right of setoff, recoupment and counterclaim in ac-
tions at law between principal and agent is," says Mr.
Mechem, "governed ordinarily by the same rules that ap-
ply in other cases. This right, however, may be waived by
contract, express or implied, and it cannot be insisted upon
where its enforcement would result in a violation of the
agent's duty to his principal. The receipt of money by an
agent to be applied to a specific purpose imposes upon him
the duty not to apply it to another and different purpose.
He cannot, therefore, apply it to his own use by using as a
setoff against it a demand due him from his principal":
*** Mechem on Agency, sec. 535; 1 Clark & Skyles on
Agency, sec. 427; Tagg v. Bowman, 108 Pa. 273, 56 Am.
Rep. 204.
The same rule would undoubtedly apply where suit is
brought by an undisclosed principal; for, if the defendant
could not have claimed the right of setoff against his own
principal, he could not do so against the undisclosed prin-
cipal of an agent with whom he dealt as principal.
There was abundant evidence to base the instruction upon
as asked by appellant. Ferguson testified that when he
sent the notes to Poindexter for collection he instructed
him to remit the amount collected to Frazier, and he was
corroborated by Frazier, who testified that Poindexter,
when he made the remittance of three hundred and twenty-
five dollars, promised to send the balance in a short time.
If the jury found these facts to be true, and that Ferguson
did not recall that direction for the application of the
funds, then the verdict should have been for the plaintiff.
The first instruction given at the request of appellee is
objectionable, because it imposed upon appellant the bur-
38 American State Reports, Vol. 115. [Arkansas,
den of showing that he had given notice to appellee of his
rights, even though the jury found that there were cir-
cumstances sufficient to put him upon notice as to appel-
lant's ownership of or interest in the notes, but this objec-
tion should have been specifically pointed out. A general
objection to the instruction as a whole was not sufficient.
For the errors indicated, the judgment is reversed, and
cause remanded for a new trial.
Suits "by Undisclosed Principals on contracts made by their agents
are considered in the note to Powell v. Wade, 55 Am. St. Rep. 915.
An undisclosed principal runs the risk, as against those who deal
with his agent as the real owner, of having his claim met by the set-
off of a demand due from the agent: Belfield v. National Supply Co.,
189 Pa. 189, 69 Am. St. Kep. 799, See, however, Baxter v. Sherman, 73
Minn. 434, 72 Am. St. Bep. 631.
SWING V. ST. LOUIS REFRIGERATOR AND WOODEN
GUTTER COMPANY.
[78 Ark. 246, 93 S. W. 978.]
JUDGMENTS, FOREIGN— Proof of, to Cpnfer Jurisdiction.—
One claiming authority to sue as trustee under a foreign judgment,
must, to maintain his suit, when the defendant denies the jurisdic-
tion of the foreign court to appoint the plaintiff a trustee, not only
produce the judgment appointing him, but also prove such pleadings
and proceedings as empowered the court to render the judgment,
(pp. 40, 41.)
JUDGMENTS — Jurisdiction. — A petition or complaint must
be filed in the court whose action is sought, or the subject matter must
be otherwise presented for its consideration in some mode sanctioned
by law, in order to confer jurisdiction upon the court to render judg-
ment, (p. 41.)
LIMITATION OF ACTIONS— Burden of Proof.— If the statute
of limitations is set up as a defense, the burden is upon the plaintiff
to prove that his action was brought within the time prescribed by
such statute, (p. 41.)
Hardage & Wilson, J. W. & M. House and P. A. Reece,
for the appellant.
J. H. Crawford, for the appellee.
**® BATTLE, J, James B. Swing, as trustee for the cred-
itors and policy-holders of the Union Mutual Insurance
Company, of Cincinnati, Ohio, in a complaint in an action
March, '06.] Swing v. St, Louis Refbigerator etc. Co. 39
against the St. Louis Refrigerator and Wooden Gutter
Company, alleged that the supreme court of Ohio, on De-
cember 18, 1890, disincorporated said insurance company,
and afterward appointed plaintiff the trustee for the credi-
tors and policy-holders of the insurance company, and he
accepted the trust and qualified, and is acting as such trus-
tee; that said insurance company was a mutual company,
and was incorporated under the laws of Ohio on May 27,
1887 ; that section 3650 of the Revised Statutes of Ohio pro-
vides that "every person who effects insurance in a mutual
company, and continues to be insured, and his heirs, ex-
ecutors, administrators and assigns, shall thereby become
members of the company during the period of insurance,
and shall be bound to pay for losses and such necessary ex-
penses as accrue in and to the company in proportion to
the original amount of his deposit note." Said mutual in-
surance company was doing business during the years 1889
and 1890, That the defendant accepted from the insur-
ance company a policy of insurance on its property against
loss by fire ; that said policy was for four thousand dol-
lars, and was in force from May 1, 1889, to May 1, 1890,
the annual premium on it being ninety-six dollars; that the
contingent liability to assessment of the defendant, under
the by-laws of the company and the statutes of Ohio and
the decree hereinafter mentioned, was and is five times the
annual premium, to wit, four hundred and eight dollars;
that by accepting and holding the policy the defendant
effected insurance in the insurance company during the
time and in the amount aforesaid, and became a member of
the same, and is legally and equitably liable for its just
proportion of all unpaid losses and expenses incurred by
the insurance company *^® during the life of the policy
and to pay such percentage on the amount of the contin-
gent liability to assessment on the policy. That the su-
preme court of Ohio, on the eleventh day of June, 1901,
assessed the rate of liability of the members and stock-
holders of the insurance company for the unpaid losses and
expenses of the company; that plaintiff, on or about the
sixth day of September, 1901, notified the defendant to
pay said assessment, but it refused to do so, and is indebted
to him as such trustee, on the assessment, in the sura of
one hundred and sixteen dollars and seventy-seven cents,
40 American State Reports, Vol, 115. [Arkansas,
with six per cent per annum interest thereon from 6th
of September, 1901.
The defendant, the St. Louis Refrigerator and Wooden
Gutter Company, answered and denied that the supreme
court of Ohio disincorporated the insurance company and
appointed plaintiff trustee as alleged, and made and en-
tered a decree of assessment; and alleged that the supreme
court of Ohio was without jurisdiction to appoint plain-
tiff trustee for the purposes alleged in the complaint; and
pleaded the statute of limitation in bar of plaintiff's right
to maintain this action.
In the trial of this action the following was shown to be
a statute of Ohio: "Every person who effects insurance in
a mutual company, and continues to be insured, and his
heirs, executors, administrators and assigns, shall thereby
become members of the company during the period of in-
surance, shall be bound to pay for losses and such neces-
sary expenses as accrue in and to the company in propor-
tion to the original amount of his deposit note or contingent
liability; and the directors shall, as often as they deem
necessary, settle and determine the sum to be paid by the
several members thereof, and publish the same in such man-
ner as they may choose, or as the by-laws prescribe, and the
sum to be paid by each member shall always be in propor-
tion to the original amount of such liability, and shall be
paid to the officers of the company within thirty days next
after the publication of such notice, ' ' etc.
The issuance of the policy, the date, the amount, the
premium and the time it was in force were shown to be as
alleged in the complaint.
What was said to be the judgment of the supreme court
of Ohio, without any pleadings or other proceedings, was
read as evidence.
^'^^ The defendant recovered judgment, and plaintiff ap-
pealed.
The appellee having denied that the supreme court of
Ohio had jurisdiction to appoint appellant trustee, the duty
and the burden devolved upon him to show jurisdiction.
He failed to do so. He produced what he called the judg-
ment of the court appointing him trustee, but did not prove
such pleadings and proceedings as authorized or empowered
the court to render the judgment. "It is essential," says
March, '06.] Swing v. St, Louis Refrigerator etc. Co. 41
Mr. Freeman, "that the jurisdiction of a court over a sub-
ject matter be called into action by some party and in
some mode recognized by law. A court does not have
power to render the judgment in favor of one as plaintiff
if he has never commenced any action or proceeding call-
ing for any action, nor has it, as a general rule, power to
give judgment respecting a matter not submitted to it for
decision, though such judgment is pronounced in an action
involving other matters which have been submitted to it
for decision, and over which it has jurisdiction. A petition
or complaint must be filed in the court whose action is
sought, or otherwise presented for its consideration in some
mode sanctioned by law": 1 Freeman on Judgments, sec.
120, and cases cited.
Many illustrations might be given of this rule. A few
will suffice. "The circuit courts of this state have juris-
diction to enforce the collection of debts according to an
established procedure. A holds the bond of B for one thou-
sand dollars, due and unpaid. He goes into a circuit court
with the bond in his hand, and without writ issued or any
pleadings, asks the court to award a rule against B to show
cause why judgment should not be rendered against him
for the debt and interest. The rule is accordingly awarded,
executed and returned, and judgment thereupon rendered
for the debt, interest and costs. Such a judgment would
be void, notwithstanding the court has jurisdiction of the
subject and of the parties. Why void? Because, in the
language of Mr. Justice Field, 'the court is not authorized
to exert its power in that way.' The same would be true
if A should sue B on one bond, and in the same action de-
cline to take judgment on the bond sued on, and take judg-
ment on another bond of B, on which no suit had been in-
stituted, without the consent of B": Anthony v. Kasey, 83
Va. 338, 5 Am. St. Rep. 277, 5 S. E. 176 ; Searaster v. Black-
stock, 83 Va. 232, 5 Am. St. Rep. 262, 2 S. E. 36; Munday
V. Vail, 34 N. J. L. 418.
*** Appellant was therefore without authority to bring
or maintain this action.
Appellee having pleaded the statute of limitation, the
burden devolved upon the appellant to prove that this ac-
tion was brought within the time prescribed by the stat-
ute : Taylor v. Spears, 6 Ark. 381, 44 Am. Dec. 519 ; McNeil
42 American State Reports, Vol. 115. [Arkansas,
V. Garland, 27 Ark. 343; Carnall v. Clark, 27 Ark. 500;
Memphis etc. Ry. Co. v. Shoecraft, 53 Ark. 96, 13 S. W. 422 ;•
Leigh V. Evans, 64 Ark. 26, 41 S. W. 427. The policy
and membership of appellee in the insurance company ex-
pired on the 1st of May, 1890. The insurance company was
disincorporated on the eighteenth day of December, 1890,
by the supreme court of Ohio. Its directors, during its
life, were authorized by the laws of Ohio to apportion its
losses and expenses among its members, and to give notice
of such apportionment; and thirty days were allowed in
which to pay the amount so apportioned. This could have
been done and the statute set in motion before the com-
pany was disincorporated. It was therefore necessary for
appellant to prove that it was not done, in order to show
that his action was not barred. The proceedings of the
supreme court of Ohio alone were not sufficient to show that
the action was brought within the time prescribed by the
statute, because the statute of limitation might in the man-
ner indicated have been set in motion before such proceed-
ings were instituted.
The evidence fails to show that this action was brought
within the time prescribed by the statute of limitation.
Judgment affirmed.
In an Action Upon a Judgment rendered by a court of a sister
state, the defendant may plead and prove a want of jurisdiction in
the court which rendered the judgment: Chicago Title etc. Co. v.
Smith, 185 Mass. 363, 102 Am. St. Eep. 350; Cuykendall v. Doe, 129
Iowa, 453, 113 Am. St. Eep. 472. See the note to Montgomery v.
Consolidated Boat Store Co., 103 Am. St. Eep. 304.
LIDDELL V. BODENHEIMER.
[78 Ark. 364, 95 S. W. 475.]
JUDGMENTS — Entry Nunc Pro Tunc. — Parol evidence of an
order omitted from the record, if satisfactory, is sufficient to au-
thorize a nunc pro tunc or judgment, (p. 44.)
JUDGMENTS — Entry Nunc Pro Tunc — Limitations. — An ap-
plication for a nunc pro tunc order cannot be barred by limitation.
(p. 44.)
JUDGMENTS — Entry Nunc Pro Tunc. — A court has no au-
thority to set aside or modify its judgment after the expiration of
the term at which it was rendered, on application for a nunc pro
tunc order, (p. 44.)
April, 1906.] Liddell v. Bodenheimer. 43
P. G. Taylor, for the appellant.
J. D. Block, for the appellee.
^** BATTLE, J. An action was brought in the name of
Bodenheimer, Landau & Company against Robert Liddell,
before a justice of the peace of Clay county, to recover the
possession of certain personal property. Plaintiffs re-
covered judgment, and the defendant appealed to the cir-
cuit court.
In the circuit court (the term is not shown) plaintiffs
represented to the court that the action was brought with-
out their consent, and asked that it be dismissed, and there-
upon S. D. ^^^ Hawkins, who had possession of the prop-
erty in controversy and claimed the same, appeared, and
asked that he be substituted for plaintiffs, and that the ac-
tion proceed in his name as such. The action was dis-
missed as to Bodenheimer, Landau & Company, and revived
in the name of S. D. Hawkins as plaintiff. This order was
not entered of record.
At the January, 1894, term of the Clay circuit court for
the eastern district, the action proceeded in the names of
Bodenheimer, Landau & Company and S. D. Hawkins, plain-
tiffs, against Robert Liddell and John Matthews Apparatus
Company, defendants, and Hawkins recovered judgment
against the defendants for the property in controversy.
This proceeding was had after the action was dismissed as
to Bodenheimer, Landau & Company. On motion of the
defendants the judgment in favor of Hawkins was set aside,
and a new trial was granted.
At the August, 1895, term of the Clay circuit court for
the eastern district of Clay county, the action was called for
trial, and the plaintiffs failed to appear. Judgment by de-
fault was rendered against Bodenheimer, Landau & Com-
pany in favor of the defendant, Robert Liddell, for the
property in controversy and costs.
In August, 1901, Bodenheimer, Landau & Company filed
an application in Clay circuit court for the eastern dis-
trict, in which they stated the foregoing facts, and asked
that the order omitted from the record be entered nunc
pro tunc. All parties appeared, and the court heard the
application and the evidence adduced in respect thereto,
and found that the order was made, and ordered that it
44 American State Reports, Vol. 115. [Arkansas,
be entered, and ordered that the judgment in favor of Lid-
dell against Bodenheimer, Landau & Company for property
be corrected so as to be against Hawkins, and to show that
Bodenheimer, Landau & Company were and are not parties
thereto ; and Liddell appealed.
Parol evidence of an order omitted from the record, if
satisfactory, is sufficient to authorize a nunc pro tunc order
or judgment : Bobo v. State, 40 Ark. 224 ; Ward v. Magness,
75 Ark. 12, 86 S. W. 822. The application for the order
was not barred, by the statute of limitations : 1 Freeman on
Judgments, 4th ed., sec. 73, and cases cited.
The court erred in setting aside or modifying a judgment
36« -vv^hich was actually rendered. It had no authority to
set aside or modify a judgment after the term at which it
was rendered has expired, on application for a nunc pro
tunc order.
The nunc pro tunc order is affirmed, and the order setting
aside or modifying a judgment rendered at a previous term
is reversed.
Hill, C. J., did not participate.
In Entering an Order Nunc Pro Tunc the court is not confined, ac-
cording to many authorities, to an examination of the judge's min-
utes, or written evidence, but may proceed on any satisfactory evi-
dence, including parol testimony: See Harris v. Jennings, 64 Neb. 80,
97 Am. St. Bep. 635, and cases cited in the cross-reference note there-
to.
TIPTON V. SMYTHE.
[78 Ark. 392, 94 S. W. 678.]
CONSTITUTIONAIj law— Due Process of Law.— A statute
providing for the calling in and payment of state bonds, and au-
thorizing the state treasurer to pay valid bonds only, and thereby
imposing upon him the duty of ascertaining the validity of all bonds
presented for payment, is not unconstitutional as depriving a bond-
holder of his property without due process of law, as an appeal
to the courts is always open to him from the adverse decision of
the state treasurer, (p. 48.)
CONSTITUTIONAL LAW — Statute of Limitations. — A statute
merely prescribing a period of limitations within which outstanding
past due state bonds may be presented for payment and redemption,
is not unconstitutional, either as depriving the bondholder of his
property without due process of law, or as impairing the obligation of
his contract, (p. 48.)
April, 1906.] Tipton v. Smythe. 45
CONSTITUTIONAL LAW — Statute of Limitations.— The legis-
lature may prescribe a period of limitation within which rights may
be asserted, even though no limitation existed when the right accrued,
or may shorten the period of limitation which existed when the right
accrued, provided the added limitation is reasonable and affords
ample opportunity for the assertion of existing rights, (p. 48.)
CONSTITUTIONAL LAW — Limitation of Actions. — In deter-
mining whether a statute of limitations affords a reasonable time
for the assertion of rights existing at the time of its passage, the
court must consider the circumstances under which it is to apply.
(p. 50.)
CONSTITUTIONAL LAW — Statute of Limitations — ^Notice. — A
statute providing for the calling in and payment of certain past due
state bonds after six months' public notice before the day fixed
for expiration of the time for presenting the bonds for payment,
is not unconstitutional as imposing unreasonably short terms as to
length of time or adequacy of the notice, either as to resident or
nonresident bondholders, (p. 51.)
CONSTITUTIONAL LAW — Statute of Limitations.— A statute
providing that certain past due state bonds shall be called in and
paid upon, six months' public notice, and that unless presented within
such time the right of presentation and payment shall be barred,
is not unconstitutional, aa depriving a bondholder, whether resident
or nonresident, of his property without due process of law, nor does
it impair the obligation of his contract, (p. 52.)
CONSTITUTIONAL LAW— Impairment of Obligation of Con-
tracts.— A statute which deprives a holder of state bonds of the
right to use his bond in payment of the purchase price of a certain
class of public lands is not unconstitutional as impairing the obli-
gation of a contract, if such statute provides for the payment by the
state of the bond in money upon due presentation, (pp. 52, 53.)
R. L. Rogers, attorney general, for the state.
Bradshaw, Rhoton & Helm, for the appellee.
»»4 McCULLOCH, J. Appellee, R. M. Smythe, being the
owner of a bond numbered 2034 in the sum of one thousand
dollars, with fifty-five semi-annual interest coupons of thirty
dollars each attached thereto, issued by the state of Arkan-
sas on January 1, 1870, and due thirty years after date,
applied to the commissioner of state lands to purchase a
certain tract of Real Estate Bank lands situated in Phil-
lips county at the price of two hundred and forty dollars,
and tendered to the treasurer of state eight of said inter-
est coupons in payment therefor.
The treasurer refused to accept said coupons on the
ground that the bond and coupons attached .were barred be-
cause not presented within the time required by an act of
the General Assembly approved May 3, 1901, and appellee
thereupon presented to the circuit court of Pulaski county
46 American ^tate Reports, Vol. 115, [Arkansas,
his petition for writ of mandamus to require the treasurer
to accept said coupons in payment for the land.
*** The treasurer appeared, and demurred to the peti-
tion; the demurrer was overruled, and final judgment was
rendered awarding the writ in accordance with the prayer
of the petition, and the treasurer has appealed to this court.
Said bond was issued by the state pursuant to the provi-
sions of an act of the General Assembly of April 6, 1869,
providing for the funding of the public debt of the state,
the particular bond in question being a reissue, under said
act, of Real Estate Bank bonds then outstanding. Section
10 of said act of 1869 pledged the faith of the state for the
payment of said bonds and interest, and to provide annually
a sinking fund to pay off the principal as the same should
become due. Section 11 of the act provides that "the pro-
ceeds of all of the mortgages, notes, bills, and other securi-
ties in possession of the state, obtained as security for the
bonds issued to the Real Estate and State Bank, are hereby
set aside as a sinking fund for the payment of the interest
and principal of the bonds to be issued in pursuance of
this act."
The act of May, 3, 1901, the validity of which is chal-
lenged by appellee, is entitled "An act to provide for the
cancellation of certain state bonds, and to fix the rate of
sinking fund tax." It provides (section 1) that immedi-
ately after its passage "the state treasurer shall make a call
for all outstanding valid bonds of the state, except those
of the issue of 1899"; and (section 2) that the publication
should be made in a daily newspaper published in the city
of Little Rock, and certified copies of the call should be
filed with the secretaries of the stock exchanges of New
York, Boston and St. Louis, six months before the day fixed
in the notice for expiration of the time in which the owners
of bonds were allowed to present bonds for redemption.
Section 3 provides that the call or notice shall warn all
holders of bonds to present same for redemption and pay-
ment within six months from the first day of said publica-
tion, "or that said bonds shall thereafter be null and void
and nonpayabl* out of the treasury." Section 5 provides
that all valid bonds presented within the time prescribed
shall be redeemed and paid by the treasurer out of the
moneys in his hands to the credit of the sinking fund, and
April, 1906.] Tipton v. Smythe. 47
the succeeding section provides for a levy of taxes to raise
a sinking fund, out of the which the bonds shall be paid.
Section 4 of the act is as follows: ^^® "All persons who
shall hold any of said valid bonds, and shall neglect or
refuse to present same to the treasurer of state for redemp-
tion within the time prescribed by this act and set out in
said notice, shall thereafter be debarred from deriving any
benefit from same; and said bonds shall thereafter be in-
valid and nonpayable. The treasurer of state shall, upon
expiration of the period of presentation and redemption
herein fixed, indorse on the record of each of said bonds
herein called in but not presented that same is barred of
payment by the provisions of this act, and same shall no
longer be carried on the books of the treasurer or auditor
as part of the valid indebtedness of this state."
Appellee in his petition attacks the validity of the act of
May 3, 1901, on the following grounds:
"A, Because said act seeks to deprive the owner of this
bond of his property, without due process of law, by cancel-
ing said bond without payment, in violation of the consti-
tution of the state of Arkansas, and of the constitution of
the United States.
"B. Because said act seeks to call in or to cancel, without
payment, an obligation of the state of Arkansas, under
terms and condition which were not the law, and not there-
fore a part of the contract at the time of the issuance of
said bond, and thereby impairs the obligation of the con-
tract between the state of Arkansas and the holder of the
bond, and said act is in conflict with the constitution of the
state of Arkansas, and the constitution of the United States.
"C. Because the time within which to present said bond
for payment is too short, and in violation of public policy.
"D. Because said act does not repeal section 4866 of
Kirby's Digest, providing for the acceptance of said bonds
in payment of the purchase price of Real Estate Bank lands
belonging to the state of Arkansas."
A feature of both the first and second contentions of ap-
pellee, that the act in question seeks to call in and cancel
the bonds of the state without payment thereof, can easily
be disposed of by reference to the express terms of the act
itself. The express object and purpose of the act is to call
in the bonds for payment und redemption, and not for
48 American State Reports, Vol. 115. [Arkansas,
adjudication as to their validity or ^^^ cancellation with-
out payment. No unreasonable provisions are found in* the
act requiring the bondholder to submit his bond to the
treasurer or any other person or board for final determina-
tion as to its validity. It is true that the act authorized
the treasurer to pay valid bonds only, and thereby imposed
upon him the duty of ascertaining the validity of all bonds
presented for payment; but his adverse decision as to the
validity of a bond was in no wise binding upon the bond-
holder, to whom the courts are always open for an adjudica-
tion of such questions. In this respect the act in question
is entirely different from the statute condemned by this
court in McCracken v. Moody, 33 Ark. 81, whereby holders
of school district warrants were required to present them
within a fixed time for cancellation and reissue, and to sub-
mit them for final determination as to their validity to a
board composed of the county judge and county clerk.
It is urged against the validity of the statute that it is
in violation of the constitution of this state and of the
constitution of the United States, because the time within
which the bonds must have been presented was too short,
and the effect was to deprive the holder of his property
"without due process of law," and that it impaired the ob-
ligation of the contract between the state and its bondhold-
ers inasmuch as, at the date of the issuance of the bond, no
authority existed in the law for peremptorily calling in such
obligations.
We do not think either contention is sound. The statute
merely prescribes a period of limitation within which out-
standing past due bonds of the state might be presented for
payment and redemption. That the legislature may pre-
scribe a period of limitation within which rights may be
asserted, even though no limitation existed when the right
accrued, or may shorten a period of limitation which existed
when the right accrued, is too well settled now for contro-
versy. The only restriction upon that power is that the added
limitation must be reasonable, and must afford an ample op-
portunity for the assertion of existing rights, otherwise the
effect would be to impair the obligation of a contract or to
deprive a person of property without due process of law.
Chief Justice Waite, in delivering the opinion of the court
in Terry v. Anderson, 95 U. S. 628, 24 L. ed. 365, said:
April, 1906.] Tipton v. Smythe. 49
"This court has often ^*^ decided that statutes of limita-
tion affecting existing rights are not unconstitutional, if
a reasonable time is given for the commencement of an ac-
tion before the bar takes effect (citing Hawkins v. Barney,
5 Pet. 457, 8 L. ed. 190; Jackson v. Lamphire, 3 Pet. 280,
7 L. ed. 679; Sohn v. Waterson, 17 Wall. 596, 21 L. ed.
737 ; Christmas v. Kussell, 5 Wall. 290, 18 L. ed. 475 ; Sturges
V. Crowninshield, 4 Wheat. 122, 4 L. ed. 529). It is diffi-
cult to see why, if the legislature may prescribe a limita-
tion when none existed before, it may not change one which
has already been established. The parties to a contract
have no more vested interest in a particular limitation which
has been fixed than they have in an unrestricted right to
sue In all such cases the question is one of reason-
ableness, and we have, therefore, only to consider whether
the time allowed in this statute is, under all the circum-
stances, reasonable. Of that the legislature is primarily
the judge; and we cannot overrule the decision of that de-
partment of the government unless a palpable error has been
committed. ' '
The same doctrine has been announced by that court in
the following cases: Koshkonong v. Burton, 104 U. S. 668.
26 L. ed. 886; Vance v. Vance, 108 U. S. 514, 2 Sup. Ct.
Rep. 854, 27 L. ed. 808; In re Brown, 135 U. S. 662, 10
Sup. Ct. Rep. 972, 34 L. ed. 304 ; Turner v. New York, 168
U. S. 90, 18 Sup. Ct. Rep. 38, 42 L. ed. 392 ; Saranac Land
etc. Co. V. Comptroller of New York, 177 U. S. 318, 20 Sup.
Ct. Rep. 642, 44 L. ed. 786 ; Wilson v. Iseminger, 185 U. S.
55, 22 Sup. Ct. Rep. 573, 46 L. ed. 804.
To the same effect see Cooley's Constitutional Limitations,
7th ed., p. 523; 2 Lewis' Sutherland on Statutory Construc-
tion, sec. 668; Meigs v. Roberts, 162 N. Y. 371, 76 Am. St.
Rep. 322, 56 N. E. 838 ; Bigelow v. Bemis, 84 Mass. 496.
It being therefore clear that the legislature had the power
to pass a statute fixing a period within which the state's
obligations should be presented for payment and redemp-
tion, it only remains for us to determine whether the stat-
ute in question prescribed a reasonable limitation upon the
right of presentation. Of this the legislature is primarily
the judge, as we have already seen: Koshkonong v. Burton,
104 U. S. 668, 26 L. ed. 886.
Am. St. Eep., Vol. 115—4
50 American State Reports, Vol. 115, [Arkansas,
"It is essential," says Judge Cooley, "that such statutes
allow a reasonable time after they take effect for the com-
mencement of suits upon existing causes of action; though
what shall be considered a reasonable time must be settled
by the judgment of the legislature, and the courts will not
inquire into the wisdom of its decision in establishing the
period of legal bar, unless the **® time allowed is mani-
festly so insufficient that the statute becomes a denial of
justice": Cooley 's Constitutional Limitations, 7th ed., 523.
In determining whether or not the statute is reasonable,
the court must consider the circumstances under which it
is made to apply, and also whether the notice provided for
is reasonable.
"It is evident from this statement of the question that
no one rule as to length of time which will be deemed rea-
sonable can be laid down for the government of all cases
alike. Different circumstances will often require a differ-
ent rule. "What would be reasonable in one class of cases
would be entirely unreasonable in another": In re Brown,
135 U. S. 662, 10 Sup. Ct. Rep. 972, 34 L. ed. 304. How-
ever, a reference to cases will illustrate the shortest periods
which the courts have approved as reasonable. The
shortest statute of limitation of this state which has there-
tofore been passed upon by this court is the two years stat-
ute as to suits to recover lands held under sales for non-
payment of taxes, and the court has repeatedly upheld the
statute: Ross v. Royal, 77 Ark. 324, 91 S. W. 178; Finley
V. Hogan, 60 Ark. 499, 30 S. W. 1045.
In Terry v. Anderson, 95 U. S. 628, 24 L. ed. 365, a stat-
ute which limited the time for bringing suit to nine and a
half months was held not unreasonable.
In Turner v. New York, 168 U. S 90. 18 Sup. Ct. Rep.
38, 42 L. ed. 392, the supreme court of the United States,
following the decision of the New York court of appeals in
Meigs V. Roberts, 162 N. Y. 371, 76 Am. St. Rep. 322, 56
N. E. 838, held that a statute of that state providing that
deeds from the comptroller of the state of lands in the forest
preserve sold for nonpayment of taxes should, after having
been recorded for two years and in any action brought
more than six months after the act took effect, be con-
clusive evidence that there was no irregularity in the as-
sessment of the taxes, was a statute of limitation, and as
such was reasonable and valid. This decision was also
April, 1906.] Tipton v. Smythe. 51
followed in Saranac Land etc. Co. v. Comptroller, 177 U. S.
318. 20 Sup. Ct. Rep. 642, 44 L. ed. 786, where Mr. Justice
McKenna, speaking for the court, said: "The decision (in
Turner v. New York, 168 U. S. 90, 18 Sup. Ct. Rep.
38, 42 L. ed. 392) establishes the following propositions:
1. That statutes of limitations are within the constitutional
power of the legislature of a state to enact; 2. That the
limitation of six months was not unreasonable."
In Vance v. Vance, 108 U. S. 514, 2 Sup. Ct. Rep. 854,
27 L. ed. 808, the same court upheld as reasonable a provi-
sion of the constitution of the state of Louisiana ^*^ adopted
in 1868, and a statute pursuant thereto passed March 8,
1869, requiring that all "tacit mortgages [in favor of a
minor on the property of his tutor] and privileges now ex-
isting in this state shall cease to have effect against third
parties after January 1, 1870, unless duly recorded." The
statute gave only the period from the date of passage March
8, 1869, until January 1, 1870, within which such mortgages
might be recorded, and the court held it to be a reasonable
provision, even against an infant.
In Krone v. Krone, 37 Mich. 308, the court, by Judge
Cooley, upheld a statute shortening the period of limitation
to one year on causes of action then existing. In Osborne
V. Lindstrom, 9 N. Dak. 1, 81 Am. St. Rep. 516, 81 N. W.
72, 46 L. R. A. 715, a statute under which an existing cause
of action could be asserted within nine months after the
statute went into effect was upheld as reasonable. In Bige-
low V. Bemis, 84 Mass. 496, the supreme court of Massa-
chusetts held that a statute was reasonable which shortened
the period of limitation and left about five months within
which an existing cause of action might be asserted.
Applying the rule illustrated by these cases, we see no
grounds upon which the statute under consideration can be
held to be unreasonable.
It must be remembered that when this statute was passed
the bonds were past due about a year and a half. The stat-
ute required the notice to be published in a daily news-
paper in the capital city of the state, and certified copies to
be filed with the secretaries of the stock exchanges of New
York, Boston and St. Louis for six months before the expira-
tion of the time for presenting the bonds for payment.
It is alleged in the petition that appellee was, at the
time of the passage of this act and the publication of the
62 American State Reports, Vol. 115. [Arkansas,
notice, without the limits of the United States, and had no
information thereof. It is argued that the statute was
unreasonable because a bondholder so situated could re-
ceive no notice of the terms of the statute. The same argu-
ment could be made in favor of a bondholder in foreign
lands if the statute had given six years, instead of six
ihonths, for presentation if he had been making no effort to
secure payment of his matured demand against the state.
The legislature doubtless had in contemplation, when it fixed
a short period, that the bonds were past due, and that the
'*^* holders were accessible and in waiting for payment. It
was not unreasonable to anticipate such a condition, and
indulge the reasonable presumption that the holders of
matured bonds would receive notice given in the manner
pointed out by the statute. It is known that such securities
are generally handled through the medium of the stock ex-
change in the principal cities of the country, and that in-
formation concerning their value may be ascertained through
those channels.
We cannot say that the statute imposed such unreason-
able terms, either as to the length of time or adequacy of
the notice, that it deprived the bondholder of his property
"without due process of law," or impaired the obligation
of the contract.
Again, it is argued that the statute in question impairs
the obligation of the contract if it be construed to bar the
bondholder of using the bond in payment of Real Estate
Bank lands, as provided by statute: Kirby's Digest, sec.
4866. The statute just cited provides that such bonds shall
be receivable in payment of the purchase price of Real Es-
tate Bank lands, but it was enacted February 26, 1879, long
after the issuance of the bonds, and therefore its provisions
did not enter into and become a part of the contract. But,
conceding that they did, the contract was in no wise im-
paired 1t)y the act of May 3, 1901, as payment of the bond
in money was provided for, and would have been made if
it had been presented. The supreme court of the United
States in the case of In re Brown, 135 U. S. 662, 10 Sup.
Ct. Rep. 972, 34 L. ed. 304, where a statute authorizing the
issuance of refunding bonds, as an inducement for accept-
ance of the bonds, provided that they should be receivable
for taxes, held that a subsequent statute limiting the time
within which the same might be so used was void because
April, 1906.] Tipton v. Smythe. 53
it impaired the obligation of the contract. The decision
was placed upon the ground that, as long as the bonds re-
mained unpaid, the holder had, according to the terms of
the original statute authorizing the issuance of the same,
the right to use them in payment of taxes, and that a re-
striction of that right impaired the obligation to that extent.
No provision was • made for payment of the bonds within
the limits prescribed by the new statute, and the court found
that it would be impracticable for the bondholder to use
all the bonds in payment of taxes within the time pre-
scribed.
■**** The statute we are now considering is vastly different
in its operation. There can be no higher method of dis-
charging a past due obligation than by payment in money;
and when this method of payment was provided by the
statute, the bondholder sustained no impairment of his con-
tract by being deprived of the right to use it in payment for
lands.
Lastly, it is contended that the statute does not in express
terms repeal the act of 1879, making the bonds receivable
in payment of the purchase price of Real Estate Bank lands,
and should be construed not to deprive the holder of that
right given by the former statute. The statute in the broad-
est terms provides that bonds not presented within the time
prescribed should thereafter be treated as invalid and barred
for all purposes. By no sort of reasoning can the act be
construed to leave the bonds in force for the purposes of
use in payment for lands purchased from the state.
The circuit court erred in awarding the writ of mandamus,
and the judgment is reversed and cause remanded, with di-
rections to sustain the demurrer to the petition.
Constitutional Law. — Statutes of Limitation affecting exi&ting rights
are not unconstitutional if a reasonable time is given for the commence-
ment of an action before the bar takes effect: Soper v. Lawrence,
98 Me. 268, 99 Am. St. Hep. 397. The statutory period of limita-
tion may be shortened, provided a reasonable time for the bringing
of actions is allowed: See Tice v. Fleming, 173 Mo. 49, 96 Am. St.
Rep. 479; Osborne v. Lindstrom, 9 N. Dak. 1, 81 Am. St. Rep. 516.
The Hetrospective Operation of Statutes of Limitation is the subject of
a note to Brown v. Pinkerton, 111 Am. St. Rep. 455.
54 American State Reports, Vol. 115. [Arkansas,
ARKANSAS SOUTHWESTERN RAILWAY COMPANY v.
DICKINSON.
[78 Ark. 483, 95 S. W. 802.]
BAILBOADS — ^Power to Offer Bewards. — A railroad company
has implied power to offer a general reward for the arrest and con-
viction of any person found maliciously placing obstructions upon its
tracks, changing switches or doing any act for the purpose of causing
derailments or the wreck of trains, (p. 56.)
RAHjBOADS — Power of General Manager to Offer Beward. —
The general manager of a railroad company has authority to offer
a general reward for the arrest and conviction of any person found
maliciously obstructing its tracks, (p. 56.)
BAILBOADS — Offer of Beward by General Manager — Notice. —
Evidence that a person who offered a reward for the arrest and con-
viction of any person found maliciously obstructing the railroad
track had acted for three years as the general superintendent of a
railroad company, that notices offering such reward were posted at
every station of such company, and must have been seen by its presi-
dent, that such notices were furnished to such manager by the vice-
president of the company, and that the act of such manager in offer-
ing the reward was never repudiated by the company, is sufficient
to sustain a finding that the other officers of the railroad company
were cognizant of and ratified the act of offering such reward,
(p. 56.)
BEWABDS — Conviction as Evidence. — If a railroad company
offers a reward for the arrest and conviction of any person found
maliciously placing obstructions on its track, the record of the con-
viction of a person for such offense is admissible, and prima facie
evidence of his guilt in an action to recover the reward, (p. 68.)
APPEAL — Presumption. — If the record shows that a paper was
placed in evidence, it must be presumed, on appeal that its contents
were made known to the jury on the trial, (pp. 59, 60.)
B. S. Johnson, for the appellant.
McRae & Tompkins, for the appellee.
483 '^OOD, J. Appellee sued appellant on the following :
"REWARD.
"One thousand dollars reward will be paid upon the
arrest and conviction of any person or persons found ma-
liciously, without ^®* regard to the lives of employes or
passengers, placing obstructions upon the track, changing
switches, etc., for the purpose of causing derailments or
wrecks.
** ARKANSAS SOUTHWESTERN RY. CO.
"J. J. Kress, Manager."
April, 1906.] Arkans.\s etc. Ry. Co. v. Dickinson. 55
Appellee alleged: "That said reward was offered by post-
ing same along the tracks and at the depot houses of the
defendant company, in Pike county, Arkansas; that on the
sixth day of October, 1902, the plaintiff procured the arrest
of one Zach Furlow charged with the offense of maliciously
placing obstructions upon the track of the defendant com-
pany in Pike county, Arkansas, the said Zach Furlow sub-
sequently being indicted by the grand jury of Pike county,
Arkansas, for said offense, and he was on the twentieth day
of August, 1903, duly convicted of said offense by the con-
sideration and judgment of the circuit court of Pike county,
which said judgment was on the thirtieth day of April, 1904,
duly affirmed by the supreme court of the state of Arkansas.
Copies of said record df conviction are filed herewith, and
made a part of this complaint."
Appellee further alleged that he had, at great expense of
time and money, procured the arrest and conviction of the
said Zach Furlow, and is entitled to recover said reward,
amounting to the sum of one thousand dollars, which the
defendant wholly neglects and refuses to pay after proper
demand made therefor.
Appellant answered, denying specifically all the allega-
tions of the complaint, and denying that it ever authorized
J. J. Kress or any other person to offer said reward, and
set up that the person alleged to have been arrested and con-
victed at the instance of Joe Dickinson, Jr., was not guilty
of said offense or any other offense; that the said Zach
Furlow, the person arrested, was found maliciously, without
regard to the lives of employes and passengers, placing ob-
structions upon the track, changing switches, or anything
else, for the purpose of causing derailments or wrecks, and
denies that said Zach Furlow was ever at any time found
placing obstructions upon tracks and changing switches for
any purpose whatever.
Plaintiff recovered judgment for the amount of the re-
ward, and defendant appealed.
***** 1. Appellant contends that it did not offer the reward.
The proof showed that one who had acted for more than
three years under the title and in the capacity of general
manager of the road, with the knowledge of the president.
had posted the reward. He had received the card offering
the reward by express from the office of the vice-president
$6 American State Reports, Vol. 115. [Arkansas,
in St. Louis, with instructions to post same. This was done
at every station, and the president of the road passed over
it as often as every ten days.
In Central Railroad etc. Co. v. Cheatham, 85 Ala. 292, 7
Am. St. Rep. 48, 4 South. 828, it was held that a railroad
corporation has the implied power to offer a general reward
"for the detection, apprehension and bringing to justice
of persons obstructing the road," and that authority to offer
such rewards is incident to the business and duties of the
superintendent, and to the purposes of his department, and
consequently within the scope of this agency. This is sound
doctrine. But appellant contends that the agency of Kress
has not been established by competent proof. The court
ruled that the agency of Kress could not be established by
whiit he said, but that his acts in the capacity of superin-
tendent and general manager might be considered. This
was correct, since there was proof to justify the conclusion
that these acts were assented to by the company: St. Louis
etc. Ry. Co. v. Bennett, 53 Ark. 208, 22 Am. St. Rep. 187,
13 S. W. 742. "We are of the opinion that the proof was
suflficient to show that Kress was the superintendent and
general manager of the road he was seeking by the offer of
the reward to protect. But if not, still appellant is shown
to have had knowledge of his acts as superintendent and
general manager, for he had acted in that capacity and un-
der that title for more than three years, and appellant had
not repudiated any of his acts as such. And appellant is
shown to have had knowledge, not only of his acts in gen-
eral, but of this specific act, for the knowledge of its pres-
ident would be sufficient to show that the company had
knowledge. The company can only act through its repre-
sentatives. The president ^^'^ of the company, as we have
said, went over the road every ten days, and these rewards
were posted at every station. This and other evidence, such
as the fact that the reward came from the office of the vice-
president, was entirely sufficient to show that the company
had knowledge of the act of Kress in offering the reward.
In Central Railroad etc. Co. v. Cheatham, 85 Ala. 292, 7 Am.
St. Rep. 48, 4 South. 828, the court said: "On questions of
ratification, facts that circulars were posted at various places
on the line of the railroad, by direction of an employe who
was under the control of the superintendent, and remained
April, 1906.] Arkansas etc. Ry. Co. v. Dickinson. 57
posted for several months and until after the rendition of
the service, were proper to go to the jury as tending to show
that the oflfieers of the company were cognizant of the super-
intendent's act in offering the reward."
2. Appellant contends that, before it could be held liable,
it was essentiaL that the appellee prove that Zach Furlow
placed obstructions upon appellant's track within the terms
of the published reward. Appellants contend that there is
no such proof, and that the papers and record of the pro-
ceedings showing that Zach Furlow had been arrested and
convicted of the criminal offense in which he was so charged
was not sufficient to show that appellant's track had been
obstructed in the manner set forth in the offer of reward,
and appellant objected to such papers and record going
to the jury as evidence of that fact. There is in the record
an affidavit made by appellee before a justice of the peace
charging Zach Furlow, with others, of the offense of "ma-
liciously placing obstructions on the Arkansas Southwestern
Railroad." Appellee testified that he procured the arrest
of Zach Furlow on this charge, and assisted in his prosecu-
tion for same because of the offer of the reward. The in-
dictment on which Zach Furlow was convicted in the circuit
court charged that he "did unlawfuly, feloniously, etc., place
an obstruction upon the track of the Arkansas Southwest-
em Railway Company." The trial court permitted the in-
dictment and the record of conviction of Zach Furlow in the
circuit court to go before the jury for the purpose of show-
ing his conviction, and also the mandate of the supreme
court, showing that the judgment of the circuit court was
affirmed, for the same purpose.
On the cross-examination of appellee by appellant this ap-
pears in the record: "Q. This is the affidavit [exhibiting
paper] ^®® that you made, is it? A. Yes, sir.
"Q. Now, you say the reward was put up the next day
after the offense was committed? A. Well, I saw it the
next day after it was committed."
One of the witnesses for appellee testified as follows: "Q.
Mr. Westbrook, do you remember the circumstances of the
track having been obstructed between Delight and Antoine?
A. Yes, sir. I remember hearing of it.
*'Q. With reference to that, when was the reward stuck
up, as you remember? A. To the best of my knowledge.
58 American State Reports, Vol. 115. [Arkansas,
it was two or three days, something like that, after the ob-
struction was placed on the track; wouldn't be positive
about that; just after something of that kind had happened,
whether it was that particular obstruction I could not say.
**Q. You remember the circumstance of Zach Furlow be-
ing arrested charged with this offense? A. Yes, sir.
"Q. And he was arrested for an obstruction between
Delight and Antoine?"
The defendant objected to that part of the question re-
ferring to the place where the obstruction occurred, and the
objection was by the court sustained.
Another witness testified that he "remembered the cir-
cumstance of Zach Furlow 's being arrested over there for
placing obstructions on the track."
A reasonable interpretation of this contract is that the
railroad company offered a reward of one thousand dollars
for the arrest and conviction of any person or persons
charged with the offense of placing obstructions upon a rail-
road track under section 1999 of Kirby's Digest. The arrest
and conviction of any person for the offense was evidently
aimed at by the appellant, and the appellee accepted and
duly performed the contract on his part when he secured
the arrest and conviction of a person for that offense. It is
obvious from the language of the reward that the company
contemplated in its offer that the conviction for the offense
should be taken as an evidence of the fact that the offense
had been committed, and that the person convicted was the
real offender. If this be the correct construction of the con-
tract, the doctrine of res inter alios does not apply. In
Brown v. Bradlee, 156 Mass. 28, 32 Am. St. Rep. 430, 30 N.
E. 85, 15 L. R. A. 809, the offer of reward was as follows:
** $2,500 reward will be paid for any person furnishing evi-
dence that will lead to the arrest and conviction of the
person who shot Mr. Edward Cunningham." The plaintiff
in that case had furnished '*®® evidence that led to the ar-
rest and conviction of a person for the shooting of Cun-
ningham. In the civil suit for the reward it was proved
by the record that one De Lucca had been convicted for
shooting Edward Cunningham, and De Lucca's evidence at
his trial, admitting that he shot Cunningham, was also put
in, but the defendants contended in that case, as appellant
contends here, that such evidence was res inter alios, and
April, 1906,] Arkansas etc. Ry. Co. v. Dickinson. 59
not competent to prove the action against them for the re-
ward that De Lucca was the guilty man. The court said:
"This position rests on too strict a construction of the words
'the person who shot Mr. Edward Cunningham' in the con-
tract. We will assume that they mean a little more than ' a
person for shooting,' and that it would be open to the de-
fendants to prove mistake or fraud in the conviction. But
we have no doubt that the contract so far adopts the pro-
ceedings of the criminal trial as a test of liability that the
conviction is prima facie evidence of guilt." In Borough
of York V. Forscht, 23 Pa. 391, a reward was offered "for
the detection and conviction of the person who set fire to"
a certain barn, and the suit was to recover on this offer of
reward by one who had given the information upon which
a certain party was arrested, and afterward tried and con-
victed. The court held, quoting syllabus, "where a reward
is offered for the detection and conviction of an offender,
and a person is detected and convicted, the record of con-
viction is evidence in an action for the reward that the per-
son convicted is the true offender." The doctrine of these
cases comports with our construction of the contract under
consideration: See Brennan v. Haff, 1 Hilt. (N. Y.) 151, and
Mead v. City of Boston, 3 Cush. (Mass.) 404. See, also,
contra, Burke v. Wells, Fargo & Co., 34 Cal. 60.
But aside from this, it is doubtful from the state of the
record whether appellant could avail itself of a failure on
the part of appellee to make proof that the offense was actu-
ally committed, and that Zach Furlow was the real offender,
when on the trial below it objected to evidence that was
tending in that direction.
3. The objection made here for the first time that the
court erred in permitting the indictment and the record of
conviction in the circuit court and the mandate of the su-
preme court in the case of Furlow v. State, 72 Ark. 384, 81
S. W. 232, to be introduced in '**** evidence without being
read to the jury, cannot avail appellant. The record shows
that "it was agreed by the parties that they [these papers]
be considered as read to the jury." Such being the case,
appellant is in no position to complain that such papers were
not read, and it will not be heard to make such complaint.
An amended record, brought here by agreement, shows that
"upon the trial of this case in the lower court, the man-
60 American State Repobts, Vol. 115. [Arkansas,
date, judgment and indictment were introduced." That ef-
fectually answers the contention in the brief that the court
erred in not having these papers read to the jury under sec-
tion 3145 of Kirby's Digest. Where a paper "is introduced
in evidence," it must be considered here that its contents
were made known to the jury.
4. Measured by the doctrine already announced, we find
the instructions of the court correct.
Affirm.
A Bailroad Company has implied power to offer a general standing
reward for the detection, apprehension and bringing to justice of
persons who may obstruct its road, or otherwise offend against its
property rights, and such authority is incident to the business
and duties of the superintendent, and to the purposes of his depart-
ment, and consequently is within the scope of his agency: Central
E. E. etc. Co. V. Cheatham, 85 Ala. 292, 7 Am. St. Eep. 48.
SCOGGIN V. HUDGINS.
[78 Ark. 531, 94 S. W. 684.]
EXECUTORS AND ADMINISTRATOES— Liability of Dece-
dent's Lands for Debt. — Land of a decedent, while held by his heirs,
may, in equity, be subjected to sale for the payment of his debts
accruing after the time allowed for the probate of claims has ex-
pired, (p. 62.)
EXECUTORS AND ADMINISTRATORS— Liability of Dece-
dent's Lands for Debts — Innocent Purchasers. — Interests or estates in
lands of a decedent in the hands of innocent purchasers for value,
and acquired from the heirs before the commencement of a suit to
charge them with the payment of the decedent's debts, cannot be
subjected thereto either in law or equity, (p. 62.)
COVENANTS— Breach— Right of Action.— If land subject to
a mortgage is conveyed with warranty of title and against encum-
brances, the covenantee's right of action for breach of the covenant
accrues on his paying the judgment recovered by the mortgagee's
receiver for the purpose of saving the land from sale. (p. 63.)
HOMESTEADS OF DECEDENTS— Claims of Creditors— Lien.
If a claim for a breach of covenant of warranty in a deed against a
decedent does not accrue until after the close of the administration
of his estate, the covenantee is entitled, on recovering judgment, to
have it declared a lien on the decedent's homestead, to be sold only
after the homestead has expired, although a constitutional provision
declares that a homestead shall not be subject to the lien of any
judgment or decree, or to sale under execution or other process
thereon, (p. 63.)
April, 1906.] SCOGGIN V. HUDGINS. 61
O. A. Graves, for the appellants.
D. B. Sain and W. C. Rodgers, for the appellee.
633 BATTLE, J. J. J. Hudgins brought a suit against
the heirs of W. G. Scoggin, deceased, to subject certain lands
descended to them to the satisfaction of his certain claim
against the deceased.
Sometime in the year 1892, W. G. Scoggin, in considera-
tion of the sum of seventy-five dollars paid to him by J. J.
Hudgins, conveyed a certain tract of land to Hudgins, and
covenanted with him that he would forever warrant and
defend the title to the land against all lawful claims. At
the time of the execution of the deed there was a valid
mortgage on the land in favor of the Southern Building and
Loan Association to secure an indebtedness of three hun-
dred and fifty dollars. Thereafter Scoggin died intestate,
leaving the defendants, his heirs, surviving him ; and on the
nineteenth day of April, 1893, letters of administration were
granted and issued to his widow, M. L. Scoggin. Sometime
in the year 1900 J. A. Bowman, as receiver of the Southern
Building and Loan Association, instituted a suit in the cir-
cuit court of the United States for the Texarkana Division
of the western district of Arkansas to foreclose the mort-
gage on the land in favor of the building and loan associa-
tion, making *^^* Hudgins and others defendants. When
that suit was instituted, Hudgins notified and requested
the administratrix of Scoggin 's estate to defend against it,
which she failed to do. On the twenty-fourth day of May,
1900, Bowman, as receiver in the suit instituted by him, re-
covered a decree foreclosing the mortgage and for one hun-
dred and eighty-six dollars and sixty-two cents; and on the
tenth day of December, 1900, for the purpose of protecting
and saving his lands from sale, Hudgins paid the amount
recovered by the decree.
Scoggin died, seised and possessed of certain lands de-
scribed in the complaint. Forty-four acres of this land con-
stituted his homestead, and after his death was occupied as
a homestead by his widow and minor heirs. The remainder
contained thirty-eight acres. Before the institution of this
suit W. M. Greene acquired the interest and share of one of
the heirs, Jane Scoggin, in these lauds, without any actual
62 American State Reports, Vol. 115. [Arkansas,
or personal knowledge on his part of any claim of Hudgins,
vested or expected.
The court found that the administratrix was not a proper
party to this action, and that W. M. Greene had acquired
and was entitled to hold the interest of James Scoggin in
the lands, and as to them, administratrix and Greene, dis-
missed the suit; and decreed that Hudgins was entitled to
recover seventy-five dollars and six per cent per annum
interest thereon from the tenth day of December, 1900, and
that the same is a lien on the lands owned by Scoggin in
his lifetime, and upon the land occupied by the widow and
minors, subject to their rights of homestead; and that, if
the seventy-five dollars, interest and costs are not paid on
or before January 1, 1904, Hudgins have a special execution
against the lands to satisfy his judgment and costs. The
defendants appealed.
The administration of Scoggin 's estate closed before the
accrual of appellee's cause of action, the two years for the
probate of claims having expired on the 19th of April, 1895.
It is settled by decisions of this court that the lands of
the deceased, while they are held by the heirs, may in
equity be subjected to sale for the payment of such claims:
Williams v. Ewing, 31 Ark. 229 ; Hecht v. Skaggs, 53 Ark.
291, 22 Am. St. Rep. 192, 13 S. W. 930; Berton v. Anderson,
56 Ark. 470, 20 S. W. 250. But interests or estates in lands
acquired by innocent purchasers for value before the com-
mencement of a suit to charge them with the payment of
such claims cannot be lawfully or equitably subjected to
such charges : Berton v. Anderson, 56 Ark. 470, 20 S. W. 250.
'^^ Hudgins' cause of action accrued on the tenth day of
December, 1900, when he paid the judgment recovered by
Bowman, as receiver. He was not bound to wait until he
was actually disseised. If he had done so, his right of
redemption would have expired, and he would have lost the
land, with the right to recover on the covenant of his
grantor only a small part of its value. Why submit to such
loss? Why wait for the inevitable? Equity does not re-
quire such sacrifice : Collier v. Cowger, 52 Ark. 322, 12 S. W.
702, 6 L. R. A. 107 ; Dillahunty v. Little Rock etc. Ry. Co.,
59 Ark. 629, 634, 27 S. W. 1002, 28 S. W. 657 ; 8 Am. & Eng.
IStucy, of Law, 2d ed., 203, and cases cited.
April, 1906.] Scoggin v. Hudgins. 63
The chancery court virtually declared a lien on the land
occupied by the Avidow and minors as a homestead, and
ordered that it be sold subject to such homestead. The con-
stitution of this state declares that "the homestead of any
resident of this state who is married or the head of a family
shall not be subject to the lien of any judgment or decree
of any court, or to sale under execution, or other process
thereon, except," etc.: Const. 1874, art. 9, sec. 3. But it
does not prevent the courts from protecting creditors in
their rights in such cases as this. The heirs may sell the
lands descended to them to innocent parties for value before
the commencement of suits in equity by creditors to subject
them to the payment of their claims. Unless the lands con-
stituting the homestead can be held in some way, creditors
of a deceased person, holding claims accruing after the close
of the administration of his estate, will be left to the mercy
of heirs. A declaration that the claim of the creditors is a
lien on the land, but it shall not be sold until the homestead
expires, would be nothing more than a declaration of the
equitable rights of the creditor, and would not interfere,
directly or remotely, with the homestead rights, and would
be stripped of the evil effects of the liens prohibited by the
constitution, and would not belong to that class of liens.
The cause is remanded, with instructions to the court to
modify its decree in accordance with this opinion.
Heir's Liability for Ancestor's Debts. — For Authorities bearing upon
the principal case, see the recent note to Crawford v. Turner 112
Am. St. Bep. 1020-1023.
CASES
IN THE
SUPREME COURT
OP
GEORGIA.
UNITED BROTHERS v. WILLIAMS.
[126 Ga. 19, 54 S. E. 907.]
CORPORATIONS. — After the Charter of a Corporation has
Expired It is Without Authority to take any proceedings of a cor-
porate nature for the purpose of expelling a member of the late
corporation, and thua depriving him of property rights, (p. 66.)
CORPORATIONS. — On the Expiration of the Charter of a
Corporation Its Property is Held in Trust for its members, (p. 66.)
CORPORATIONS. — On the Renewal of a Corporate Charter
Which has Theretofore Expired, all the property of the old corpora-
tion then in the hands of its ofticers and members is carried into the
new corporation as created by the renewal of the charter, (p. 67.)
CORPORATIONS —Rights of the Members of the Old Corpora-
tion on the Renewal of Its Charter. — On the renewal of the charter
of an expired corporation, each person interested in the assets of the
corporation as a member at the date the old charter expired becomes
a member of the corporation created by the renewal, and the corpora-
tion as renewed is bound to admit into membership every person
interested in the property of the old corporation as it existed at
the date of the expiration of the charter, (p. 67.)
CORPORATIONS. — Mandamus is a Proper Remedy for One
Who has Been Unlawfully Deprived of His Privilege as a Member
of the Corporation, (p. 67.)
CORPORATIONS. — The Expulsion of a Member of a Corpora-
tion Because He has Testified Against It in an action to which it was
a party is wholly unauthorized where there is no claim that he tes-
tified falsely, and if the corporate charter expires and a new one
is obtained he cannot be denied membership on account of such
testifying, (p. 68.)
Marion W. Harris and Julian F. Urquhart, for the plain-
tiff in error.
F. R. Martin, contra.
(64)
March, 1906.] United Brothers v. Williams. ,65
*® COBB, P. J. This was an application for a mandamus
by Hamp Williams against the United Brothers, alleged to
be a corporation of this state. It appears from the peti-
tion and amendments thereto that a corporation called the
United Brothers was created by an order of the superior
court of Bibb county at the April term, 1883. The purpose
of the corporation was to promote systematic benevolence
by providing a fund for taking care of sick members, and
paying the expenses of burial of members and members of
their families. There was no capital stock, but the funds
of the association were to be derived from membership fees
and dues. The plaintiff became a member of the association
soon after its organization, the exact date not appearing.
The charter of the association expired on the eighth day of
May, 1903. When the charter expired the association did
not go into liquidation, but the members and officers con-
ducted the business of the association as if the corporation
still existed. This state of affairs continued until 1905,
when a petition to the superior court was filed by the United
Brothers, describing itself as a corporation whose charter
had expired, and S. J. Hammond, one of its original incor-
porators, and other named persons, alleging that the charter
was granted to the United Brothers on May 8, 1883, which
expired May 7, 1903, and that petitioners desired to revive
the corporation with all the rights of the original charter
as the same appeared on the records of the court. It was
also asked that they be given authority to organize branch
societies in other ** counties, and provide constitutions and
by-laws for their government. The prayer was that it be
"incorporated and renewed for a period of twenty years."
On this petition an order was passed, April 19, 1905, grant-
ing the same. In 1904, after the original charter had ex-
pired and before the same was renewed, the plaintiff at a
regular meeting was declared expelled from the association.
This was done without notice of any charge against him,
the president of the association merely stating to the meet-
ing then in session that the plaintiff had testified against
the association in a suit against it, and as a result of his
testimony the case was decided against the association. The
plaintiff was, under the charter and by-laws, entitled to
certain substantial benefits in case of sickness or death in
his family. It is distinctly alleged that the plaintiff's testi-
Am. St. Rep., Vol. 115—5
6Q American State Keports, Vol. 115. [Georgia,
mony in the case referred to was true, and that the sole
reason for expelling him was the fact that he had testified
as a witness. The plaintiff made an effort to have himself
reinstated, but the association denied him all the rights and
privileges of membership. It is charged that the expulsion
of plaintiff was without authority, and was the result of
malice on the part of the president of the association, who
was responsible for the litigation referred to. It was al-
leged that at the time the plaintiff was expelled the associa-
tion had assets to the amount of one hundred dollars in
cash, in which plaintiff was interested. The prayer of the
petition was for the writ of mandamus, commanding the
corporation to reinstate the plaintiff to his privileges as a
member. The petition was filed on April 17, 1905. The de-
fendant filed demurrers, both general and special, which
were overruled, and the defendant excepted.
The plaintiff was a member of the corporation at the time
its charter expired in 1903. At the time the proceedings
were had which purported to expel him from the association
there was no corporation in existence. ^^ The affairs of the
former association were being carried on in an irregular,
if not an illegal, way. At that time the plaintiff was inter-
ested in the property of the association on account of having
been a member at the date of the expiration of the charter.
The officers and members were then without authority to
take any action in the nature of corporate proceedings
which would deprive the plaintiff of his property rights.
The assets and funds of the association were to be held by
them until the association went into liquidation and a di-
vision took place, or until the charter was renewed in con-
formity to law. The proceedings purporting to expel the
plaintiff from the association were therefore a nullity; for
there was no corporation from which to expel. He was a
part owner with the other members in assets held by the old
officers in trust for all the members. It is to be noted that
a new charter for a new corporation was not granted. The
old charter was renewed with certain amendments. The
effect of the renewal of the charter was to carry the prop-
erty of the old corporation then in the hands of the officers
and members into the corporation as created by the renewal
of the charter. Every person interested in the assets of the
corporation as a member on the date the old charter expired
March, 1906.] United Brothers v. Williams. 67
became a member of the corporation created by the renewal
of the charter. It was renewed under the same name with
all the powers the original corporation had, and others
added thereto. The corporation as renewed was bound to
admit into membership every person interested in the prop-
erty of the corporation as it existed at the time of the expira-
tion of the charter. The power to deal with the members, as-
sets and property of the association in a corporate capacity
died upon the expiration of the charter, but came to life with
the renewal of the charter. Persons interested as members-
of the old corporation lost no rights by the irregularities
that took place between the expiration of the old charter
and the granting of the new charter. When the corpora-
tion began business under the new charter with the funds
and property of the old corporation as a basis for its opera-
tion, all members of the old corporation were entitled to the
privileges and benefits which they would have had if the
charter had not expired. As members of the old corpora-
tion, they had no authority to deal with and expel the
plaintiff at the time the alleged action was taken against
him. He became a member of the new corporation created
by the renewal of ^ the charter. He is entitled to all the
rights and privileges of a member. This has been denied to
him. Undoubtedly he has a right of action against the
corporation for refusing to admit him as member, but this
remedy would not be adequate. He could recover damages,
but damages are not desired. He wishes to be restored to
membership, so that he may exercise the privileges and re-
ceive the benefits resulting from membership in the corpora-
tion. There are numerous decisions in other jurisdictions
that mandamus is a proper remedy to be resorted to by one
who has been wrongfully deprived of his privileges as a
member of the corporation: Bacon on Benefit Societies, 3d
ed., sees. 109, 442. In State v. Georgia Medical Soc, 38
Ga. 608, 95 Am. Dec. 408, it was held by this court that
where a corporator has a clear legal right which has been
violated by the corporation, and he has no other adequate
remedy, he is entitled to relief by mandamus: See, also,
Savannah Cotton Exchange v. Warfield, 54 Ga. 668. In the
opinion in the Waring case, Mr. Chief Justice Brown says:
"When a member feels that he is aggrieved or injured by
the illegal or oppressive action of the body, it is his right
68 American State Reports, Vol. 115. [Georgia,
to appeal to the courts for redress and protection ; and it is
the right and duty of the court to investigate such charges,
when properly before it, and to judge of the legality of the
action of the society in expelling a member or depriving him
of any other legal right."
The only reason alleged for the action of the corporation
in declining to admit the plaintiff as a member is that he
testified to the truth as a witness in a case where the associa-
tion was a party. Even if the corporation had been in exist-
ence at the time of the alleged action purporting to expel
him therefrom, this would not have been sufficient to jus-
tify an expulsion. He could not have been legally expelled
for this reason, even if he had had a formal trial, after due
notice, according to the by-laws of the association. Cer-
tainly, then, upon the renewal of the charter he cannot be
denied admission into the association on account of the pur-
ported action of the association at a time when it had no
right to deal with the question of expulsion. There was
no error in overruling the demurrers.
Judgment affirmed.
All the justices concur, except Fish, C. J., absent.
The Eight of a Corporation or association to expel members is dis-
cussed in the recent note to Del Ponte v. Societie Italiana, 114 Am.
Bt. Eep. 24.
DAVENPORT v. STATE BANKING COMPANY.
[126 Ga. 136, 54 S. E. 977.]
BANKS. — The Belation Between a Bank and Its Depositors is
that of Debtor and Creditor. The money deposited becomes the ab-
solute property of the bank, and as it is merely the debtor of the
depositor, it has no lien on his deposit for the purpose of securing
a debt due to it from him, though it may have the right to set off
the one against the other, (p. 76.)
A BANE Does not Owe to the Surety of an Indebtedness in Its
Favor the Duty of exercising its right to set oflf a sum due from it to
the depositor against the indebtedness of such depositor to it which
the obligation of surety has created, (pp. 77, 78.)
BANKING.— Surety, Duty of Bank to Apply Deposit to the
Satisfaction of Indebtedness Secured by. — If a bank holds th& note
of one of its depositors with a surety, it owes no duty to the surety
March, 1906.] Davenport v. State Banking Co. 69
to apply to the satisfaction of such note a sum due by it to the
depositor on his general deposit account, and hence such surety re-
mains liable notwithstanding he demands that such application be
made, and the bank refuses to make it. (p. 84.)
Action by the State Banking Company on two notes
against the surety of one Lipscomb. The defendant pleaded
that when the indebtedness became due, and for some time
afterward, the maker of the notes had on deposit with the
bank a sum more than sufficient to pay them, and that the
defendant demanded of the president of the bank that the
notes be satisfied out of the moneys so on deposit, and the
bank refused to make such application, and permitted the
maker of the notes to check out all of his money to pay
fines imposed on him for selling liquor without a license,
thereby rendering such maker insolvent. The plea was
stricken out as constituting no defense, and the defendant
excepted.
H. H. Dean, for the plaintiff in error.
Fletcher M. Johnson and J. A. Bell, Jr., contra.
*^ COBB, P. J. The precise question made in this case
has never been decided by this court, and in respect thereto
there is, in principle, a conflict in the decisions which have
been rendered in other jurisdictions. We say there is a
conflict in principle, because if we take the cases in which
a surety upon a note held by a bank claimed to have been
discharged because, at the time of its maturity, the principal
had sufficient funds on general deposit in the bank to pay
it, and the bank failed to charge the amount of the note up
against such deposit account, there is really not much con-
flict. But when we consider the principle, or principles, upon
which these cases, holding the surety discharged, have been
decided, and then consider the cases in which the failure of
a bank to exercise its right of setoff against deposits of the
maker of a note, made subsequently to its maturity, has been
held not to discharge a surety upon such note, and the
reasons upon which these decisions have been based, we
find that there is a marked and, to us, an irreconcilable
conflict in the authorities upon the question under considera-
tion. It has been held in a number of cases that where a
bank is the owner of a note or other obligation evidencing
an indebtedness, upon which there is a surety, and at the
70 American State Reports, Vol. 115. [Georgia,
maturity of the debt the principal debtor has funds on
general deposit with the bank, sufficient to pay the debt,
the failure of the bank to apply such funds to its payment
will discharge the surety: Commercial Bank v. Henninger,
105 Pa. 496; German Nat. Bank v. Foreman, 138 Pa. 474,
21 Am. St. Rep. 908, 21 Atl. 20 ; Dawson v. Real Estate Bank,
5 Pike (Ark.), 283; Pursifull v. Pineville Bankinjr Co., 97
Ky. 154, 53 Am. St. Rep. 409, 30 S. W. 203 ; Central Bank of
Rochester v. Thein, 76 Hun, 571, 28 N. Y. Supp. 232. The
**® contrary view was taken in Second Nat. Bank v. Hill,
76 Ind. 223, 40 Am. Rep. 239, Martin v. Mechanics' Bank,
6 Har. & J. (Md.) 235, and National Mahaiwe Bank v. Peck,
127 Mass. 298, 34 Am. Rep. 368. For although in the Massa-
chusetts case, and perhaps in each of the other two, the de-
cision might have been placed upon the narrow ground
that it did not appear that at the maturity of the note the
bank held on general deposit funds of the principal sufficient
to pay it, in none of these cases was this done, but the
decision in each case was placed upon the broad ground
that the bank was not bound to set off the amount of a
note due to it by a depositor against his general deposit ac-
count, for the protection of a surety upon the note. It has
been held by almost all the courts where the questions have
arisen that if at the maturity of a note held by a bank the
principal thereon has not sufficient funds on general de-
posit with the bank to pay it, the bank is under no duty
to a surety upon the note to apply such funds of the prin-
cipal as may then be on deposit to the payment of the note
pro tanto, nor is it bound to pay the note from subsequent
deposits of the principal, although they are sufficient for
this purpose: People's Bank of Wilkes-Barre v. Legrand,
103 Pa. 309, 49 Am. Rep. 126 ; First Nat. Bank of Lancaster
v. Shreiner, 110 Pa. 188, 20 Atl. 718; First Nat. Bank of
Lock Haven v. Peltz, 176 Pa. 513, 53 Am. St. Rep. 686, 35
Atl. 218, 36 L. R. A. 832 ; Voss v. German- American Bank,
83 111. 599, 25 Am. Rep. 415 ; National Bank of Newburg v.
Smith, 66 N. Y. 271, 23 Am. Rep. 48; Bacon's Admr. v.
Bacon's Trustees, 94 Va. 686, 27 S. E. 576; Houston v.
Braden (Tex. Civ. App.), 37 S. W. 467; Citizens' Bank v.
Elliott, 9 Kan. App. 797, 59 Pac. 1102. The only case to
the contrary which we have foiind is McDowell v. Bank of
"Wilmington & Brandywine, 1 Harr. (Del.) 369.
March, 1906.] Davenport v. State Banking Co. 71
Let us examine the grounds upon which courts have based
decisions discharging a surety when the bank holding the
note fails, upon its maturity, to pay it from funds of the
maker which it then holds on general deposit, which are
sufficient for this purpose. All of the courts which have
dealt with the question seem to recognize the right of the
bank to set off the amount due it upon a note by one of its
depositors against its indebtedness, on general deposit ac-
count, to such depositor, whether such indebtedness on its
part exists at the time the note matures or is caused by
deposits subsequently made. And it is upon this right to
extinguish the note by applying thereto an amount of its
general deposit indebtedness to the maker thereof, sufficient
for the purpose, that most of the decisions ^*^ in which
sureties have been held to be discharged have been placed.
Thus, in Commercial Nat. Bank v. Henninger, 105 Pa. 496.
while it was held that the note in question, being made
payable at the bank which held it, was equivalent to a draft
or check upon the bank for the amount of the note, yet the
court first undertook to demonstrate that the surety on the
note was released because the bank had the right to set off
the amount of the note against its general deposit indebted-
ness to the maker thereof, and this right it was bound to
exercise for the protection of the surety. The court said:
"The rule is well settled that 'when a creditor has in his
hands the means of paying his debt out of the property of
his principal debtor, and does not use it, but gives it up, the
surety is discharged. It need not be actually in the hands
of the creditor; if it be within his control, so that by the
exercise of reasonable diligence he may have realized his
pay out of it, yet voluntarily and by supine negligence re-
linquished it, the surety is discharged.' " In support of
the ruling, the court used the following illustration: "If I
am the holder of A's note, indorsed by C, and when the
note matures I am indebted to A in an amount equal to or
exceeding the note, can I have the note protested and hold
C as an indorser? It is true that A's note is not technically
paid, but the right to setoff exists, and surely C may show,
in relief of his obligation as surety, that I am really the
debtor, instead of the creditor of A. If this is so between
individuals, why is it not so between the bank and indi-
viduals f" Under this argument and this principle, it is
72 American State Reports, Vol. 115. [Georgia,
quite clear that it would make no difference whether the
note was made payable at the bank or not. In either case
the bank would have the right of setoff, and its failure to
exercise it would discharge the surety. And under the
principle here announced we cannot see why it should make
any difference whether the opportunity for the bank to
protect the surety occurred at the precise time that the note
matured or afterward. In so far as the decision in that case
and the one in German Nat. Bank v. Foreman, 138 Pa. 474,
21 Am. St. Rep. 908, 21 Atl. 20, which followed it, and any
decision rendered in another jurisdiction, may be based on
the idea that a note payable at a particular bank is equiva-
lent to a draft or check on that bank for its amount, it is
not applicable to the case with which Ave are dealing ; for in
this case the note was not made payable at any bank at
all. And we may say, in passing, that this construction of
a note payable *** at a bank, which obtains in a number
of jurisdictions, is by no means generally accepted by the
courts, but has met with vigorous protest: Grissom v.
Commercial Bank, 87 Tenn. 350, 10 Am. St. Rep. 669, 10
S. W. 774, 3 L. R. A. 273; Wood v. Merchants' Trust Co., 41
111. 267; Ridgely Nat. Bank v. Patton, 109 111. 479; Scott
V. Shirk, 60 Ind. 160; Second Nat. Bank v. Hill, 76 Ind.
223, 40 Am. Rep. 239 ; Gordon v. Muchler, 34 La. Ann. 604.
In so far as the decisions in these Pennsylvania cases, and
the other cases wherein a surety on a note owned by a bank
has been held to have been discharged by the failure of the
bank, upon the maturity of the note, to charge the amount
thereof against the deposit account of the principal obligor,
rest upon the principle that the bank was bound, for the
protection of the surety, to exercise its right of setoff against
the principal, we fail to see any rational distinction between
them and the cases in which it has been held that a surety
is not discharged by the failure of the bank to apply de-
posits of the principal debtor made subsequently to the ma-
turity of the note to its payment. For, as it is generally
held that the bank has the right of setoff in either in-
stance, it would seem that if its neglect to exercise it in the
one instance would discharge the surety, its failure to
exercise it in the other would likewise do so. And yet, as
will be seen from cases cited above, the same courts which
hold a surety discharged if the amount of the deposit of the
March, 1906.] Davenport v. State Banking Co. 73
maker of the note, at its maturity, is sufficient to pay it, and
the bank fails to avail itself of its right of setoff, also hold
that a failure by the bank to apply general deposits made
oy the maker subsequentlj'' to the maturity of the note to its
payment will not discharge the surety. For instance, it
was held in People's Bank of Wilkes-Barre v. Legrand, 103
Pa. 309, 49 Am. Rep. 126, that "Where at the maturity of a
Dote held by a bank the maker's balance on deposit in said
bank was insufficient to pay the note, which was protested
for nonpayment, the bank is not bound, for the protection
of the indorser, to apply the maker's subsequent deposits
to the payment of the note, although they were sufficient for
that purpose." In the opinion it was said: "While it is
true that a bank is a mere debtor to its depositor for the
amount of his deposit, and, therefore, in an action by the
bank against the depositor, on a note upon which he is lia-
ble, the latter may set off his deposit, yet we do not think
the bank is bound to hold a deposit for the protection of an
indorser of the depositor. A bank deposit is different from
an ordinary debt in this, *^* that from its very nature it
is constantly subject to the check of the depositor, and is
always payable on demand. The convenience of the com-
mercial world, the enormous amount of transactions by
means of bank checks, occurring every business day in all
parts of the country, require that the greatest facilities
should be afforded for the use of bank deposits by means
of checks drawn against them. The free use of checks for
commercial purposes would be greatly impaired if the banks
could only honor them on peril of relieving indorsers, with-
out an investigation of the state of the depositor's liabilities
on discounted paper It is beyond question that the
bank, in the absence of any special appropriation of the
deposit by the depositor, would have the right to apply a
general deposit to any existing matured indebtedness of the
depositor. But that privilege is a right which the bank may
or may not exercise in its discretion We fully recog-
nize the rule that where a principal creditor has the means
of satisfaction actually or potentially within his grasp, he
must retain them for the benefit of the surety, but we
regard the case of bank deposits as an exception to the
rule." Most of this language of the Pennsylvania court
was approvingly quoted, and the views therein set forth
74 American State Reports, Vol. 115. [Georgia,
were followed, by the Kansas court in Citizens* Bank v.
Elliott, 9 Kan. App. 797, 59 Pac. 1102, and by the Texas
court in Houston v. Braden (Tex. Civ. App.), 37 S. W. 467.
Again, in First Nat. Bank of Lock Haven v. Peltz, 176 Pa.
513, 53 Am. St. Rep. 686, 35 Atl. 218, 36 L. R. A. 832, it
was held: "While a bank which is a holder of a promissory
note and has on deposit at the time of maturity to the credit
of any party liable to it on the note a sum sufficient to pay
it, and not previously appropriated by the depositor to be
held for a different purpose, may apply the deposit to
the payment of the note, .yet it is not in general bound to
do so. The cases where the right becomes a duty on the
part of the bank rest on the special equity of the party —
usually the indorser — to have the payment enforced against
the depositor as the one primarily liable. In these cases the
deposit must be sufficient at the time of the maturity of
the note, it must not have been previously appropriated to
any other use, and it must be to the credit of the party
primarily liable." In the opinion the court said that though
the title to money deposited passes to the bank, "yet the
whole business of banking is founded on the faith of the
immediate availability of the deposit, as money, for the use
of the depositor, and any rule that interfered with the
freedom of action of either bank or customer, ^^^ by compel-
ling a stop of their dealings with each other to examine the
relations of other parties to the deposit, would go far toward
destroying that instant convertibility which is the essence
of the business. We do not think it desirable to go beyond
the line already marked by the authorities." In the case
with which the court was dealing it appeared that the party
claiming to have been released by the conduct of the bank
was a mere accommodation surety for the payee of the note,
who had procured the bank to discount it, and he offered
to prove that six days after the maturity of the note and at
other times thereafter the bank had a balance to the credit
of such payee sufficient to pay the note, and allowed him
to check it out, although it knew at the time it did so of
the fact of such suretyship. Yet it was held, for the rea-
sons stated in the opinion, that the evidence offered "was
incompetent and irrelevant." So both the ruling, as ap-
plied to the facts, and the opinion in the case show that
the court realized the necessity of putting a rigid and, as it
March, 1906.] Davenport v. State Banking Co. 75
seems to us, an arbitrary, limitation upon the broad prin-
ciple which has been applied in the cases in which a surety
upon a note owned by a bank has been held to have been
discharged by the failure of the bank to exercise its right
of setoff against the party primarily liable thereon. The
broad principle to which we refer and which has been in-
voked in such cases is, that when the creditor has the means
of satisfying the debt actually or potentially within his
control, he must retain them for the benefit of the surety.
If this principle applies at all to deposits of money in a
bank, it is difficult to see why it should be rigidly limited
to deposits held by the bank at the time the depositor's
debt to the bank matures; for if the means of satisfaction
can be said to be within the control of the bank then, they
would seem to be equally within its control when the depos-
its are made after the debt has matured. It has been said
by an able and often quoted text-writer that "if the bank
at the maturity of a note held by it holds funds that, by
a scratch of a pen, it could apply upon the note, thus secur-
ing itself, it is difficult to see why neglecting so easy a means
of security is not as improper as giving up collateral desig-
nated for the purpose of securing the note": 2 Morse on
Banks and Banking, 956. This argument applies as well to
a case in which the opportunity to protect the surety, "by a
scratch of a pen," occurs after the maturity of the note as
it does to a case in which such opportunity presents **^ it-
self at the time when the note falls due. We do not over-
look the fact that it has been said, in a case wherein the
party claiming to have been discharged was an indorser,
that the liability of an indorser becomes fixed when the note,
at maturity, is protested for nonpayment. But we do not
understand that this strips him of the right to be protected,
as a surety, against subsequent acts of the creditor which
will injure him, or increase his risk. "It is true that there
Is a distinction between an ordinary indorser and one who
is merely a surety, but a contract of suretyship is necessarily
included in every unqualified indorsement of a negotiable
instrument .... and the principle which protects sureties
from any act of the creditor tending to injure the surety,
or increase his risk, is applicable as well to indorsers for
value as those whose indorsement is for accommodation
merely": Tanner v. Gude, 100 Ga. 157, 27 S. E. 938. So we
76 American State Reports, Vol. 115. [Georgia,
fail to see why, even in eases involving the rights of an
ordinary indorser, there should be a distinction made based
upon the mere question as to the time when the bank had
the opportunity to protect the surety by subjecting the de-
posit account of the principal to the payment of the debt.
In our opinion, as we have already indicated, there is a di-
rect conflict in principle between the decisions which hold
the surety discharged because the bank at the maturity of
the note could have protected him by recourse to the deposit
of the principal, and failed to do so, and those which hold
that the surety is not discharged by the failure of the bank
to exercise its right of setoff against the deposits made sub-
sequently to the maturity of the debt ; and we think that the
better view of the question is that taken in the latter class
of cases.
One ground upon which it has been held that a surety
upon a note held by a bank is discharged, if, at the maturity
thereof, the bank holds on general deposit for the maker a
sum sufficient to pay the note, which it permits to be checked
out, is that the bank has a lien upon such deposit of the
principal debtor to the extent of its claim against him, and
ought, in justice to the surety, to enforce it for his protec-
tion : Zane on Banks and Banking, sec. 114 ; Sheldon on Sub-
rogation, sec. 124, and cases cited. We do not see how a
bank has a lien upon the general deposit account of its
debtor to secure his indebtedness to it. When money is de-
posited in a bank upon general deposit account, it ceases
to be the money of the depositor and becomes the absolute
property of the bank, and ^^^ the relation between the bank
and the depositor is that of debtor and creditor, the bank
becoming indebted to the depositor in the amount of his
deposit, and the debt being payable when, and in such
amounts thereof, as the creditor may, by written order or
check, demand. A general deposit of money in a bank *'is
a loan, and transforms the funds from ready money into a
chose in action": Ricks v. Broyles, 78 Ga. 610, 6 Am. St.
Rep. 280, 3 S. E. 772 ; Morse on Banks and Banking, 30, 42 ;
Newmark on Bank Deposits, sec. 105. As the bank holds no
funds or property of the depositor, but is merely his debtor
in a given amount, how can it be said the bank has a lien
upon the deposit to secure its claim against the depositor?
Let us state this lien proposition. Smith owes the bank and
March, 1906.] Davenport v. State Banking Co. 77
the bank owes him, each has a chose in action against the
other, and to secure the payment of its claim against Smith,
the bank has a lien upon the chose in action which he holds
against it. We fail to see how one can hold a lien upon
his own indebtedness to another, upon a mere chose in ac-
tion which the other holds against him. Again, if a bank
which holds a note against one of its depositors has a lien
upon his deposit account, to secure the payment of the note,
it would seem that the bank, before the maturity of the
note, would have the right to assert this lien against de-
posits made with it by him prior to the maturity of the
debt, by refusing to honor his checks whenever by so
honoring the amount of his deposit account would be re-
duced to a sum less than the amount of the note. We do
not think any court would hold that the bank could do this.
And yet this would seem to be the logical effect of holding
that the bank has a lien upon the deposit account ; and the
only escape from this conclusion would be to hold that the
lien of the bank comes into existence only at the moment
that the debt against the depositor matures. Besides, if the
theory of a lien applies to a deposit on hand when the debt
falls due, why does it not also apply to a deposit subse-
quently made, as in either case the right of the bank to set
off what the depositor owes it against the deposit exists?
The Kentucky court of appeals, in Pursifull v. Pineville
Banking Co., 97 Ky. 154, 53 Am. St. Rep. 409, 30 S. W, 203.
recognized that the discharge of a surety in a case like this
could not be placed upon the release by the bank of a lien
which it had to secure the debt. In the opinion in that case
it is said: "Now, while it is true that the bank in this case
had not, strictly speaking, a lien upon any money or prop-
erty belonging to Hurst, **® and while the surety could
not. perhaps, by paying this debt to the bank, have become
entitled to demand of it repayment out of Hurst's deposit,
which is laid down by some of the authorities as the true
test, yet it seems to us that this bank, by the voluntary sur-
render to the principal of money more than sufficient to pay
this debt, and which, it is conceded, it had a right to apply
to that purpose, has been equally reckless of the interests
of this surety as though it had surrendered a security on
which it had a specific lien." When a bank which holds a
note against one of its depositors charges it up against the
78 American State Reports, Vol. 115. [Georgia,
depositor on his deposit account and marks the note paid,
it is not availing itself of any lien against funds of the de-
positor in its hands, but is availing itself of a right, which
has been pretty generally recognized, to set off against its
indebtedness to the depositor the amount of his indebtedness
to it. In our opinion, this is a right which it may exercise
for its own protection, but which it is not bound to exercise
for the protection of a surety upon the note, unless it knows
that the depositor principal is insolvent, in which case it
seems that the bank would be bound to protect the surety:
Walsh V. Colquitt, 64 Ga. 740. If the bank, in the absence
of knowledge of insolvency on the part of the depositor,
fails to exercise its right of setoff, and allows him to check
out his deposit, we do not see how a surety upon the note
of the depositor has been legally injured, or exposed to
greater liability, or has had his risk increased. Its nonex-
ercise of its right of setoff interferes with no right of sub-
rogation which the surety would have upon payment of the
note ; for by paying the note he could not, under the right
of subrogation, reach the indebtedness of the bank to the
principal. The bank, by merely owing the principal upon
the note, held neither collateral nor lien to secure the note,
and nothing whatever to which the surety, upon payment of
the note, could, by subrogation, resort for the purpose of
reimbursement. How, then, can it be said that the surety
has been, in a legal sense, injured by the conduct of the
bank in paying the debt which it owed the principal, in-
stead of setting off against it the debt which he owed it?
In Hollingsworth v. Tanner, 44 Ga. 11, it was held that
although the owner of judgments against a principal and
surety had, while owning the judgments, employed the
principal to perform certain services for him at a stipulated
price, and when the services were rendered had paid the
principal therefor, and still held the judgments "'' unset-
tled, the surety was not discharged. In the opinion Chief
Justice Lochrane said: "The decision of this court in Curren
V. Colbert, 3 Kelly, 239, 46 Am. Dec. 427, is invoked to sus-
tain the doctrine, that any act of the holder which increases
the risk of the surety will discharge the surety. That case
was the dismission of a levy and the release of the property
of the principal, levied on by a creditor having a judgment
against the principal and surety, without privity of the
March, 1906.] Davenport v. State Banking Co. 79
surety. But the doctrine is clearly recognized as settled in
the books that mere indulgence, unless given upon a new
and distinct consideration, or unless given under such a
binding obligation as precludes the creditor from pursuing
his remedy on the debt, will not discharge the surety. ' ' In
Echols V. Head, 68 Ga. 152, it was held that, as there is no
vendor's lien in Georgia, and the right to attach for pur-
chase money is a privilege and not a lien, the fact that the
vendor of a horse, for the purchase money of which he had
taken a note with personal security thereon, subsequently
bought the horse back from the vendee, and thereby de-
stroyed his right to attach the property for the purchase
money, did not discharge the surety on the note. It will be
observed that the ruling in each of these Georgia cases is
opposed to the idea that a creditor is bound, for the pro-
tection of a surety, to avail himself of any and every means
which he may have for the protection of himself. He is not
bound to preserve his right to set off a debt due him,- where-
on there is a surety, against a debt which he may owe his
principal debtor, in order to protect the interests of the
surety. Nor is he bound, for the sake of the surety, to
preserve a remedy which he may have against the principal
debtor, of which the surety could not, upon payment of the
debt, avail himself. In Lumsden v. Leonard, 55 Ga. 374,
it was held that the neglect of a judgment creditor for
four years to levy upon real estate sold by the principal
debtor to a purchaser, who held possession until the land
was discharged from the lien of the judgment, did not dis-
charge the surety, though such real estate was sufficient to
satisfy the judgment, there being no proof, or offer to prove,
that the judgment creditor was notified in writing to levy,
and no tender of expenses by the surety. This ruling was
placed upon the ground that "Mere nonaction by the cred-
itor will not release the surety, unless such nonaction makes
unproductive some collateral security, such as a mortgage,
or is based upon a consideration paid by the principal
*^** debtor to the creditor, or he is notified under the stat-
ute to collect the debt." In the opinion, Jackson, J., said:
"On a careful examination of our own decisions since the
organization of this court, and of the law in general, upon
this subject, we conclude that the true doctrine to be gath-
ered from all the sources at our command is this (and it
80 American State Reports, Vol. 115. [Georgia,
is embodied in our code) : Some act must be done by the
creditor, either before or after judgment, which injures the
surety in some way; mere failure or negligence on the
part of the creditor will not relieve the surety. And the
exceptions to this general rule will be found where the cred-
itor omits to do something by which collateral security in
his hands is made unproductive, or where he is notified un-
der the statute to proceed, and he fails or refuses; and if
the letter of the statute on the subject of notice be extended
to embrace proceedings after judgment, we think the secur-
ity, in addition to the notice, should at least indemnify the
creditor against the expenses of litigation."
In Glazier v. Douglass, 32 Conn. 393, *'The plaintiff held
a promissory note [payable at a bank] indorsed by the
defendant for the accommodation of the makers, which had
been protested for nonpayment, the makers having become,
and still remaining, insolvent. A firm of which the plain-
tiff was a member owed the makers a larger sum than the
amount of the note, against which, if sued, they could by
statute have set off the claim held by the plaintiff. Without
requiring such application the firm paid the makers the
amount owed them, with full knowledge on the part of the
plaintiff of all the facts." It was held, "in an action brought
against the defendant on his indorsement, that he was not
discharged by the neglect of the plaintiff to secure an ap-
plication of the debt of the firm to the payment of the
note." This ruling was based upon the principle that "the
security, the discharge of which by a creditor will release
a surety, must be a mortgage, pledge, or lien — some right
to or interest in property which the creditor can hold in
trust for- the surety and to which the surety if he pay the
debt can be subrogated ; and the right to apply or hold must
exist and be absolute." In the opinion the court said:
"By a series of decisions adopting the equitable principles
of the civil law, there have been annexed to the undertaking
of a surety, in a case like this, three conditions; and if
either is broken by the creditor, that undertaking becomes
inoperative, and the surety is discharged. *^® The first is
that the creditor shall present the note to the maker at
maturity, and if dishonored use due diligence in giving no-
tice to the surety. The second is that no obligatory exten-
sion of time of payment shall be given which will preclude
March, 1906.] Davenport v. State Banking Co. 81
the surety, if he pay the note to the creditor, from enforc-
ing immediate payment by compulsory process from the
principal debtor. And the third is, that the creditor shall
apply in payment of the debt, or hold in trust for the
benefit of the surety, all securities which he may receive or
procure for that purpose by contract or operation of law,
so that if compelled to discharge the debt the surety may
be subrogated to them But although in some special
cases in equity the creditor may be compelled to proceed
against the maker, the law annexes no condition requiring
the creditor to proceed against the principal debtor, or do
any act (whatever his opportunity or however much it may
subserve the interest of the surety) to procure security or
enforce payment from the principal ; and he may remain
entirely passive and rely on the undertaking of the surety,
whether the principal be solvent or insolvent. In respect
to what shall be deemed a security within the meaning of
the condition, there has been some contrariety of decision.
The better opinion is that it must be a mortgage, pledge or
lien — some right to or interest in property which the cred-
itor can hold in trust for the surety, a^d to which the surety
if he pay the debt can be subrogated, and the right to apply
or hold must exist and be absolute The contrariety
of decision spoken of has been chiefly in respect to liens
obtained by process or operation of law. Judgment liens,
made such by the local law, are assignable, and clearly with-
in the condition. But it has been made a question whether
a lien obtained by levy of execution on the goods of the
principal debtor can be released or abandoned, and the
better opinion now is that it cannot be." In Second Nat.
Bank v. Hill, 76 Ind. 223, 40 Am. Rep. 239, the bank brought
a suit upon a promissory note against Hill, Mote and Hair.
Mote and Hair filed a joint answer, in which they alleged
that they signed the note as sureties for Hill, who was the
principal therein, which fact was known to the bank at the
time that the note was given to it for money borrowed by
Hill; that after the maturity of the note Hill made general
deposits in the bank in suras exceeding the amount due on
the note, and after the note became due the bank had of
the funds of Hill on deposit more **** than enough to pay
the note, and, except as to a small amount which was stated,
it failed to apply any of the funds of Hill which it held on
Am. St, Bep., Vol. 115 — 6
82 American State Reports, Vol. 115. [Georgia,
deposit to the payment of the note, and suffered him to
check out his funds, although prior to the maturity of the
note Hill "had consented and directed the [bank] to allow
and pay said note, interest, etc., thereon at any time after
its maturity, out of his deposits in said bank, if he should
have any such funds in said bank to pay the same or any
part thereof." The plaintiff demurred to this answer, and
the trial court overruled the demurrer, which ruling was
reversed by the supreme court of the state. In the opinion
the court said: "Though the funds deposited with the plain-
tiff might have been applied by it to the payment of the
note in suit, the bank did not hold the funds, in any sense,
in trust for the sureties of Hill on the note. Had Mote
and Hair, as such sureties, paid to the appellant the note
in suit, they could not, had the bank at the time been in-
debted to Hill on his deposit account in a sum exceeding the
amount paid on the note, have required the bank to apply
such indebtedness for their benefit, or to reimburse them
for the money paid by them on the note for Hill's benefit.
They could not have required this of the bank, for the
obvious reason that they could not have, under the cir-
cumstances, any right to, or interest in, the debt due from
the bank to Hill The question is not what a credi-
tor might or could have done, but was he obliged to do
this or discharge the surety? The creditor might sue the
principal debtor as soon as the debt matured, and thereby
save the surety from future hazard, but he is not obliged
to sue. He may delay the collection of his debt until the
principal debtor fails, without discharging the surety. To
hold that the bank was obliged to apply deposits made by
Hill to the payment of the note would be to compel him
to collect his debt, though none of the parties bound to
pay it had requested him to do so. ' ' In the case with which
we are dealing there was a request by the surety for the
creditor to collect the debt; but we know of no request
which compels the creditor to proceed to do this, except
the written notice from the surety to the creditor to sue,
provided for by our statute.
In Voss V. German-American Bank, 83 111. 599, 25 Am. Rep.
115, the supreme court of Illinois said: "The note appears
to have been made for Michelson's benefit, and Voss to
liave been only a surety, as between himself and Michel-
March, 1906.] Davenport v. State Banking Co. 83
son, and, as Michelson is shown to have had funds ^"^* on
deposit in the bank, from time to time, after the maturity
of the note, and before the bringing of the suit, to an
amount exceeding that of the note, it is insisted that the
bank was bound to apply such funds to the payment of the
note, and that, not having done so, Voss is discharged. And
the case of McDowell v. Bank of Wilmington and Brandy-
wine, 1 Harr. (Del.) 369, and Law v. East India Co., 4 Ves.
825, are cited as authorities that, under such circumstances, a
surety will be discharged. Without remark upon or con-
sideration of these authorities, we do not regard them as
having application to the case in hand. We do not recog-
nize, in such a case as is here presented, the existence of
any such obligation as the one which is asserted by appel-
lant's counsel." In National Mahaiwe Bank v. Peck, 127
Mass. 298, 34 Am. Rep. 368, Chief Justice Gray well said:
"Money deposited in a bank does not remain the property
of the depositor, upon which the bank has a lien only; but
it becomes the absolute property of the bank, and the bank
is merely the debtor of the depositor in an equal amount.
[Citing cases.] So long as the balance of account to the
credit of the depositor exceeds the amount of any debts due
and payable by him to the bank, the bank is bound to honor
his checks, and liable to an action by him if it does not.
When he owes the bank independent debts, already due and
payable, the bank has the right to apply the balance of his
general account to the satisfaction of any such debts of
his. But if the bank, instead of so applying the balance,
sees fit to allow him to draw it out, neither the depositor
nor any other person can afterward insist that it should
have been so applied. The bank, being the absolute owner
of the money deposited, and being a mere debtor to the
depositor for his balance of account, holds no property in
which the depositor has any title or right of which a surety
on an independent debt from him to the bank can avail him-
self by way of subrogation, as in Baker v. Briggs, 8 Pick.
122, 19 Am. Dec. 311, American Bank v. Baker, 4 Met.
164, cited for the defendant. The right of the bank to ap-
ply the balance of account to the satisfaction of such a debt
is rather in the nature of a setoff, or of an application of
payments, neither of which, in the absence of express agree-
ment or appropriation, will be required by the law to be
84 American State Reports, Vol. 115. [Georgia,
so made as to benefit the surety." "We do not think that
what the plea alleged occurred between the president of
the bank and the surety renders a different principle appli-
cable in the present case. ^'^^ If the bank was, as we have
seen, under no legal duty to the surety to set off the amount
which the principal upon the notes owed it against the
amount which it owed him upon his general deposit account,
it was not bound to do this upon a mere request or demand
of the surety that this should be done. It is provided by
statute in this state that a surety may, at any time after
the debt on which he is liable becomes due, give notice to
the creditor to proceed to collect the same out of the prin-
cipal, and that if the creditor fails or refuses to commence
action for the space of three months after such notice, the
surety will be discharged: Civ. Code, sec. 2974. This is the
only notice from a surety to the creditor holding the obli-
gation for which our law provides. It is true that there
are decisions which hold that where a surety has requested
the creditor to take action for the collection of the debt,
which, if taken, would result in its collection from the
property of the principal, and the creditor assures the
surety that he will do so, and thus induces the surety to
forego any means of indemnity or protection to which he
might otherwise have resorted, and the creditor fails to
redeem his promise, whereby the surety is injured, the
surety is released. Bulard v. Ledbetter, 59 Ga. 109, is a case
of this character. But in such cases it is not the mere fail-
ure of the creditor to comply with the verbal request of the
surety, but his failure to comply with a promise which
he made to the surety, and upon which the latter relied to
his injury, which discharges the surety. Here there was no
promise by the creditor which put the surety to sleep, but,
on the contrary, the surety knew that the creditor did
not intend to comply with his demand. Of course the mere
indulgence, without consideration, of the principal debtor
did not discharge the surety. The decision rendered in
Walsh V. Colquitt, 64 Ga. 740, might have required a dif-
ferent conclusion in the present case, if the plea here had
alleged that at the time the bank allowed Lipscomb to check
out the whole of his deposit he was insolvent and the bank
knew it, or that the bank, in addition to knowing the use
for which he checked out the money, knew that by so using
it he would be rendered insolvent.
March, 1906.] Davenport v. State Banking Co. 85
The judgment of the court, sustaining the motion to strike
the plea, was not erroneous, and as this left the defendant
without any issuable defense filed under oath, it was proper
for the court ^'^^ to render judgment in favor of the plain-
tiff for the amount due upon the notes.
Judgment afl&rmed.
All the justices concur, except Fish, C. J., absent.
WHAT DUTY, IF ANY, A CEEDITOE OWES TO A SURETY.
I. Scope of Note, 85.
n. Extent of Duty of Creditor to Attempt the Collection of the
Debt or Obligation by Suit or Otherwise.
a. In General, 85.
b. Duty to Present Claim Against Estate of a Deceased or
Bankrupt Principal, 86.
c. General Effect of Delay in Suing Upon the Principal Obli-
gation. 88.
d. Effect Where Creditor has been Requested by Surety to
Sue Upon the Obligation, 89.
e. Effect Where Principal is Insolvent at Time of the Request
to Sue or Becomes so Thereafter, 93.
m. Extent of Duty of Creditor to Give Surety Notice of Default
of Principal, 94.
IV. Effect Where Creditor Surrenders Securities or Funds Which were
in His Possession.
a. In General, 95.
b. Effect Where Creditor Makes Payments to Principal Which
He had a Right to Withhold, 95.
c. Duty of Creditor Where He has Property or Funds of the
Principal in His Possession, Such as Where a Bank is
Creditor, 95.
d. Duty of Creditor to Exercise Care and Diligence in the
Management of Collateral Securities, 100.
V. Effect Where Creditor Loses Lien Secured by Levy of Execution
Against Principal Debtor by His Own Negligence, 101.
VI. Effect Where Lien in Favor of Creditor is Lost by Operation of
Law, 101.
L Scope of Note.
In this note we shall include only those cases tending to illustrate
the active, as distinguished from the passive, duties of the creditor
toward the surety. We shall exclude from our consideration those
cases discussing the release or discharge of the surety by reason
of acts prohibited by the contract of suretyship itself or by reason
of acts done by the principal.
n. Extent of Duty of Creditor to Attempt the Collection of fhe
Debt or Obligation by Suit or Otherwise.
a. In General. — A creditor is not bound to sue on a bond when
due under penalty of discharging the surety therein: Thursby v.
Gray's Admr., 4 Yeates, 518. The payee of an instrument having
86 American State Reports, Vol. 115. [Georgia,
a principal obligor and surety owes no duty of active vigilance to
the surety to enforce the collection of the indebtedness arising from
the obligation, since the surety at any time after default of the
principal is entitled to pay the debt and reimburse himself by enforc-
ing it against the principal and his cosureties, if he have any; Levy
V. Wagner, 29 Tex. Civ. App. 98, 69 S. W. 112; Fanning v. Murphy,
126 Wis. 538, 110 Am. St. Eep. 946, 105 N. W. 1056, 4 L. R. A.,
N. S., 666 J Alexander v. Byrd, 85 Va. 690, 8 S. E. 577. In Eyre v.
Everett, 2 Russ. Ch. 381, a case in which the question of the failure
of the creditor to sue upon the debt for over five years was urged
as a defense by the surety, Lord Eldon observed: "The case, there-
fore, presents nothing more than the passive act of the obligees
not suing. But the surety has no right to say that he is discharged
from the debt which he has engaged to pay, together with the
principal, if all that he rests upon is the passive conduct of the
creditor in not suing. He must himself use diligence, and take such
effectual means as will enable him to call on the creditor either to
sue or to give him, the surety, the means of suing."
And the mere fact that the payee of a note failed to sue the maker
thereon while the maker was solvent, and by his passivity in that
respect allowed the maker to become insolvent, does not exonerate
a surety on the note from his liability to pay the note: Burge v.
Duden, 105 Mo. App. 8, 78 S. W. 653.
b. Duty to Present Claim Against Estate of a Deceased or Bank-
rupt Principal. — The failure of the creditor to present his claim
against the estate of the principal debtor does not operate as a dis-
charge of the surety: Winter v. Branch Bank, 23 Ala. 762, 58 Am.
Dec. 315; Bull v. Coe, 77 Cal. 54, 11 Am, St. Rep. 235, 18 Pac. 808;
Johnson v. Planters' Bank, 4 Smedes & M. 165, 43 Am. Dec. 480.
In Willis v. Chowning, 90 Tex. 617, 59 Am. St. Eep. 842, 40 S. W.
395, the court, in discussing the subject, said: "When the principal
debtor in an obligation, to which there are sureties, dies, the payee
may look to the sureties as primarily liable to perform the contract,
and need not present the claim to the administrator of the deceased
principal for allowance and payment: Scantlin V. Kemp, 34 Tex. 388;
Ray V. Breuner, 12 Kan. 105; People v. White, 11 111. 341; McBrown
V. Governor, 6 Port. 32; Minter v. Branch Bank, 23 Ala. 762, 58 Am.
Dec. 315; Ashby v. Johnston, 23 Ark. 163, 79 Am. Dec. 102; Vreden-
burgh V. Snyder, 6 Iowa, 39; Johnson v. Planters' Bank, 4 Smedes
& M. 165, 43 Am. Dee. 480; Boardman v. Paige, 11 N. H. 431.
"But it is claimed that the failure to institute suit within ninety
days after the rejection by the administrator of Morrison barred
the action by Willis and Brother against the estate, and, since Willis
and Brother could not recover against the estate of Morrison, the
sureties of Morrison were also discharged from further liabUitj upon
the judgment.
March, 1906. J Davenport v. State Banking Co. 87
"Although the debt may be barred by limitation as against the
principal, yet judgment may be entered against the surety if he be
liable thereon — in cases where suit may be maintained against the.
surety without joining the principal — and if the surety pay the
debt which is at the time barred by limitations as against the prin-
cipal, but is a valid obligation against the surety, such surety may
recover against the principal, or against his estate in case of his
death. The right of action in favor of the surety arises when
he pays the debt, and is not based upon the original debt itself, but
upon the implied contract which exists by law between the principal
and surety in such cases: Faires v. Cockerell, 88 Tex. 428, 31 S. W.
190, 639, 28 L. R. A. 528; Eeeves v. Pullian, 7 Baxt. 119; Maxey
v. Carter, 10 Yerg. 521; Marshall v. Hudson, 9 Yerg. 57; Peaslee v.
Breed, 10 N. H. 489, 34 Am. Dec. 178; Crosby v. Wyatt, 23 Me.
156; Wood v. Leland, 1 Met. 387.
"In support of a contrary proposition the defendant in error cites
the following authorities: State v. Blake, 2 Ohio St. 147, Dorsey
T. Wayman, 6 Gill, 59, and Auchampaugh v. Schmidt, 70 Iowa, 642,
59 Am. Eep. 459, 27 N. W. 805. The authorities cited fairly sup-
port the contention of the defendant in error upon this question,
but the overwhelming weight of authority, as well as sound reasoning,
are against his contention. The proposition that the surety is dis-
charged when the right of action is barred as against the principal
rests upon the doctrine that the surety's action is based upon the
right of subrogation to the claim of the payee in the contract,
against which doctrine this court has held, in the case of Faires v.
Cockerill, 88 Tex. 428, 31 S. W. 190, 639, 28 L. R. A. 528, after a care-
ful review of the authorities on the question.
"Defendant in error urges upon this court that, although it be
held that the plaintifiFs in error were not bound to present the claim
to Morrison 's administrator, yet, having done so, and having failed
to establish the claim as required by law, the sureties are, by such
failure, discharged. If the failure of Willis and Brother to sue upon
their claim within ninety days, or the fact that, having sued sub-
sequently, they were defeated upon that claim for the reason that
their right is barred by the lapse of ninety days' time, had the
effect to discharge the estate of Morrison from liability to the
sureties, then it would follow that the sureties would be discharged
from a claim against them by Willis and Brother. But a discharge
of the administrator of Morrison's estate upon that ground will not
have the effect to discharge the estate from liability to Chowning,
in case he was compelled to pay the debt; therefore, Chowning has
suffered no injury by the failure of Willis and Brother to institute
suit upon their claim within the time prescribed by law, nor by their
failure to recover judgment against Morrison's estate when suit was
instituted, and Chowning was not discharged by the bar of ninety
88 American State Reports, Vol. 115. [Georgia,
days' limitation in favor of the estate: Marshall v. Hudson, 9 Yerg.
57. In the case last cited, a suit was instituted against the ad-
ministrator of the principal debtor, and against which the admin-
istrator pleaded the statutes of limitation and was discharged. Suit
was afterward instituted against the surety, who pleaded that the
debt was barred as to the estate of the principal, and also the judg-
ment in favor of the estate, claiming that it discharged him, but
the court gave judgment against him. The surety paid the judgment
and brought suit against the estate of the deceased principal to re-
cover the amount. It was claimed, as in this case, that, the debt
being barred against the principal, the surety could not recover be-
cause he had discharged no obligation which rested upon the estate
of the principal, but the court held that the surety was entitled
to recover upon the implied obligation which arose under the law
out of the relation of principal and surety."
But the voluntary release of the estate of the principal debtor
has the effect of releasing his surety from personal liability and
the failure to present a claim against it within the time fixed for
the allowance and presentation of claims amounts to a release of the
claim, where the estate is sufficient to pay all claims against it:
Siebert v. Quesnel, 65 Minn. 107, 60 Am. St. Eep. 441, 67 N. W. 803.
The payee of a bankrupt's note owes no duty to the surety of such
note to prove the debt as a claim in the bankruptcy court. Mere
delay and passivity on the part of the creditor does not discharge
the surety. Besides, the -surety has his own efficient and appropriate
remedies: Levy v. Wagner, 29 Tex. Civ. App. 98, 69 S. W. 112.
c. General Eflfect of Delay in Suing Upon the Principal Obligation.
Inasmuch as the surety has the right to pay the debt or satisfy
the obligation, and then bring his own action against the principal,
or, in some cases, proceeding in equity or under the statutes of some
of the states to compel the principal to pay the debt or discharge
the obligation, he is not allowed to demand from the creditor any
greater degree of diligence in the collection of the debt or the en-
forcement of the obligation than is required in cases in which the
relation of principal and surety does not exist. Hence, the
general rule is that the mere forbearance of a creditor to sue upon
the principal obligation or debt does not discharge the surety. Or,
in other words, the creditor is under no active duty to sue the prin-
cipal debtor: Hooks v. Branch Bank, 8 Ala. 580; Dawson v. Eeal
Estate Bank, 5 Ark. 283; Humphreys v. Crane, 5 Cal. 173; Bull v. Coe,
77 Cal. 54, 11 Am. St. Rep. 235, 18 Pac. 808; Moreland v. State
Bank, 1 111. 263; Naylor v. Moody, 3 Blackf. 92; Kirby v. Stude-
baker, 15 Ind. 45; Holdeman v. Woodward, 22 Kan. 734; Pharr v.
McHugh, 32 La. Ann. 1280; Purdy v. Forstall, 45 La. Ann. 814, 13
South. 95; Freeman's Bank v. Rollins, 13 Me. 202; Sasscer v. Young,
6 Gill & J. 243; Banks v. State, 62 Md. 88; Hunt v. Bridgham, 2 Pick.
March, 1906.] Davenport v. State Banking Co. 89
581, 13 Am. Dec. 458; Allen v. Brown, 124 Mass. 77; Huey v. Pinney,
5 Minn. 310 (Gil, 246); Johnson v. Planters' Bank, 4 Smedes & M.
165, 43 Am. Dec. 480; Hawkins v. Eidenhour, 13 Mo. 125; Quillen v.
Quigley, 14 Nev. 215; Morris Canal etc. Co. v. Van Vorst's Admx.,
21 N. J. L. 100; Schroeppel v. Shaw, 3 N. Y. 446; Thompson v. Hall,
45 Barb. 214; Mutual Life Ins. Co. v. Davies, 56 How. Pr. 440;
Carter v. Jones, 40 N. C. 196, 49 Am. Dec. 425; Neal v. Freeman,
85 N. C. 441; Dye v. Dye, 21 Ohio St. 86, 8 Am. Eep. 40; Thursby
V. Gray's Admrs., 4 Yeates, 518; Kichards v. Commonwealth, 40 Pa.
146; Appeal of Neal (Pa.), 11 Atl. 636; Edwards v. Dargan, 30 S. C.
177, 8 S. E. 858; Johnston v. Searcy, 4 Yerg. 182; Willis v. Chowning,
90 Tex. 617, 59 Am. St. Kep. 842; Crawn v. Commonwealth, 84 Va.
282, 10 Am. St. Eep. 839, 4 S. E. 721; Harris v. Newell, 42 Wis. 687;
Fanning v. Murphy, 126 Wis. 538, 110 Am. St. Eep, 946, 105 N, W.
1056, 4 L, E, A,, N, S,, 666, But to the contrary effect are Au-
champaugh v. Schmidt, 70 Iowa, 632, 59 Am, Eep. 459, 27 N. W.
805, and Bridges v. Blake, 106 Ind. 332, 6 N. E. 833, in which cases
the court, proceeding upon the theory that when the statute of
limitations has run against the principal debtor he is under no obli-
gation to preserve the evidences of his defense against the prin-
cipal obligation, reasoned that the same rule should apply to the
surety.
The rule where the principal obligation is an unliquidated claim,
such as the fidelity bond of a public officer, is that where the statute
provides that actions for misfeasance in office are barred within a
certain time, that the action against the surety will also be barred
by the same period of limitations: State v. Conway, 18 Ohio, 234;
State V. Blake, 2 Ohio St. 147.
d. Effect Where Creditor has been Requested by Surety to Sue
upon the Obligation. — It is well settled that a surety may by a suit
in equity, after the principal obligation becomes due, compel the
creditor to collect the debt from the principal, provided, of course,
that he indemnify the creditor against loss from an unsuccessful
suit against the principal: Eice v. Downing, 12 B. Mon. 44; Whit-
ridge V. Durkee's Exrs., 2 Md. Ch. 442; Huey v. Pinney, 5 Minn.
310; King v, Baldwin, 2 Johns. Ch. 554; Kent v. Matthews, 12 Leigh,
573; Hogaboom v. Herrick, 4 Vt. 131; Eanelagh v. Hays, 1 Vern.
189; Autrobus v. Davidson, 3 Mer. 578; Lee v, Eook, Mos. 318; Nesbet
V. Smith, 2 Bro, C, C, 579; Eees v, Berrington, 2 Ves, Jr. 543.
But it is not well settled whether the creditor is obliged to sue
the principal upon the mere request of the surety to do so. The
leading case holding that the failure of the creditor to so sue the
principal upon request by the surety will exonerate the surety in the
event that the principal thereafter becomes insolvent is that of
King V, Baldwin, 17 Johns, 384, 8 Am. Dec. 415. The reasoning of
the court in that case will show the contentions made by the
90 Americ.vn State Reports, Vol. 115. [Georgia,
courts on both sides of this question. The court, after referring to
Pain V. Packard, 13 Johns. 174, 7 Am. Dec. 369, which held the same
doctrine as it was about to hold, but which had been overruled by
Chancellor Kent in a very exhaustive opinion in King v. Baldwin, 2
Johns. Ch. 554, said: "The only point in which the chancellor and
the supreme court differ is this: The chancellor maintains that the
surety has no right, by an act in pais, to require the creditor to
coerce the principal by suit to pay the debt, but he must apply to
a court of equity, which will lend its aid for that purpose; whilst
in the case decided in the supreme court, it is held that the creditor
is bound to prosecute the principal at the request of the surety, and
if he fail to do so, and the principal becomes insolvent afterward,
so that the debt is lost as against him, the surety will be discharged.
The chancellor considers it unnecessary and inexpedient to intro-
duce what he considers a new principle of action between the cred-
itor and surety; he apprehends that it will open a litigious inquiry
as to the certainty and eflBciency of the notice, and that such a
weapon put into the hands of a surety affords a temptation to
vexation and fraud.
"The principle adopted by this court in Rathbone v. Warren,
10 Johns. 587, that a surety will be discharged if a new agreement be
entered into between the creditor and the principal debtor, varying
or enlarging the time of the performance of a contract, although
amply supported by cases decided in the English courts, is of
modern growth even in a court of equity. And it is well settled
now that this defense may be set up at law. Gibbs, C. J., says in
Orme v. Young, Holt N. P. 84, 17 E, E. 611, that the principle is
borrowed from a court of equity. Our system of jurisprudence is
in a constant progress of improvement, and some of the most valuable
principles have sprung up and attained their perfection within the
recollection of many members of the bar. Many cases might be
mentioned, but I will refer to that just and salutary rule that a
court of law will take notice of and protect the rights of an assignee
of a chose in action. I have witnessed the rise, progress and es-
tablishment of that wholesome and equitable principle. This, too,
was borrowed from a court of equity. The soil into which it has
been transplanted is congenial to its nature and perfection; it has
saved much litigation and enormous costs.
"I do not, then, perceive any solid objection to a court of law
taking cognizance of the matters forming the grounds of the appel-
lant's relief because in such cases courts of equity have also juris-
diction. Much less do I perceive the necessity of applying to a
court of equity to compel a creditor to do what equity and good
conscience require of him. Courts of equity, when they interpose
to compel a creditor, at the instance of a surety, to sue the principal
debtor, undoubtedly proceed on the sound and just principle that
March, 1906.] Davenport v. State Bankestg Co. 91
it is the duty of the creditor to obtain payment, in the first instance,
of the principal debtor, and not of the man who is a mere surety
that the principal shall pay the debt. The doctrine is that it is
inequitable and unjust for the creditor, by delaying to sue, to expose
the surety to the hazards arising from a prolongation of the credit,
and that the surety has an equity sufficient to invoke the interposi-
tion of the powers of a court of chancery for his protection. In
every such case a court of equity proceeds on a pre-existing equitable
obligation, binding on the conscience of the creditor, to exert himself
to obtain payment of the debt from the principal, who is regarded as
the real debtor, and who ought to be coerced to pay the debt; and
it must be the natural and necessary consequence that if the cred-
itor, after an order or decree that he shall proceed at law to collect
the debt of the principal, omits to do so, and thereafter the principal
becomes insolvent, that the surety will be discharged.
"If this duty exists and does bind the conscience of the creditor,
[ cannot conceive why it may not be brought into exercise by an act
in pais and without the interposition of a court of equity. Upon
an application to that court by the surety, if the facts were conceded,
an order or decree that the creditor should prosecute the principal
debtor would be a matter of course; the decree would operate as a
mere declaration of the duty of the creditor, and unless his con-
science was dead to a sense of moral duty, it would not stand in
need of such an admonition. If we are at liberty, as I think we are,
to regard the consequences of the contrary doctrine, that the surety
must either pay the debt himself, or resort to a court of equity
to coerce the creditor to proceed at law against the principal, we
shall find abundant cause to adopt the principle of the decision in
Pain V. Packard, 13 Johns. 174, 7 Am. Dec. 369. The delay and
expense are serious evils; the debt itself may, and undoubtedly will,
in many cases, be jeopardized and lost as regards the principal,
and the surety will be exposed to the final payment with a vast ac-
cumulation of costs.
"The principal objection to the decision in Pain v. Packard, 13
Johns. 174, 7 Am. Dec. 369, is 'that it will open a litigious inquiry
as to the certainty and efficiency of the notice.' This objection lies
with equal force to all acts in pais, such as a demand of the goods
in an action of trover, a demand of the maker of a note and notice
of the nonpayment to the indorser, due demand and notice of nonpay-
ment to the guarantor; so in a great variety of other cases the re-
sponsibilities of parties depend on acts in pais; and I cannot perceive
any ground for alarm or apprehension as to the mode of proof,
unless we are prepared to distrust parol evidence in all cases. The
chancellor refers to the civil law in support of his opinion. It
appears that Justinian altered the civil law, and gave to the surety
an exception of discussion, by which be might require the creditor
92 American State Reports, Vol, 115. [Georgia,
to proceed in the first instance against the principal; but if the
creditor does not proceed against the sureties before he has proceeded
against the principal, he cannot be obliged to proceed against the
principal until he thinks proper; and his forbearing to proceed
against him does not eventually destroy his right of proceeding
against the surety, however great the delay has been: 1 Pothier on
Obligations, by Evans, 262-267. The civil law is evidently defective
in not affording any process which should coerce the creditor to
proceed against the principal, and the superiority of the English law
is striking and manifest in this respect.
"My opinion rests on these principles, that the creditor is under
an equitable obligation, and such is the essence of the contract,
to obtain payment from the principal debtor and not from the surety,
unless the principal is unable to pay the debt, and if the creditor
unjustly and improperly collude with the principal to throw the debt
on the surety, or after a full and explicit request by the surety
to proceed at law to recover the debt of the principal, the creditor,
from any improper motives, refuses and neglects to do so, and by
such refusal and neglect the means of recovering the debt of the
principal are lost, that theYi the surety is exonerated. 'This has been
treated as a novel and alarming doctrine; but in my apprehension,
it cannot alarm an honest or conscientious creditor; for where is the
man who will boldly avow the unjust and immoral principle that
after his debt has become due, and after he has been solicited by
the surety to proceed and collect it by prosecuting both principal
and surety, he will abstain from suing, with a view of favoring
the principal and throwing the eventual loss on an innocent man,
who from motives of friendship or humanity has become a surety!
"There is but a minute shade of difference between the opinion ex-
pressed by the chancellor and that of the supreme court in Pain v.
Packard, Johns. 174, 7 Am. Dec. 369, and it is simply this: the chancellor
holds that a court of equity must first be appealed to, to compel the credi-
tor to sue at law, whereas the supreme court maintain that he can be re-
quired by the surety to sue, without the aid of a court of equity, and if I
am right in supposing that there does exist a moral and equitable duty
on the part of the creditor to collect his debt from the principal in
the first instance and this must be so, or a court of equity could
not interpose at all, then I maintain that a court of law may, with-
out overleaping its just jurisdiction, and in analogy to several other
cases in which they take notice of existing equities, not only take
cognizance of the equity which requires a creditor to collect his debt
from the real debtor; but they may apply the consequences of the re-
fusal of the creditor to sue the principal, without which the prin-
ciple itself would be of no value, by holding that the surety is dis-
charged if the creditor will not do his duty and collect this debt, if
he can, from the principaL"
March, 1906.] Davenport v. State Banking Co. 93
Among the cases following the rule that the surety will be exon-
erated where the creditor fails to sue the principal after a request
by the surety may be found: Hempstead v. Watkins, 6 Ark. 317, 42
Am. Dec. 696; Thompson v. Kobinson, 34 Ark. 44; Martin v. Shekun,
2 Colo. 614; Ingals v. Sutliff, 36 Kan. 444, 13 Pac. 828; Manchester
Iron Mfg. Co. v. Sweeting, 10 Wend. 162; Wheeler v. Benedict, 36
Hun, 478; Eemsen v, Beekman, 25 N. Y. 552; Colgrove v. Tallman,
67 N. Y. 95, 23 Am. Eep. 90; Toles v. Adee, 84 N. Y. 222; Crandall v.
Mosten, 24 App. Div. 547, 50 N, Y. Supp, 145; De Caumont v. Easines,
38 App. Div. 153, 56 N. Y. Supp. 652; Cope v. Smith, 8 Serg. & E. 110,
11 Am. Dec. 582; Hopkins v. Spurlock, 2 Heisk. 152; Thompson v.
Watson, 10 Yerg. 362.
But the principal must be solvent at the time that the surety makes
the request: Herrick v. Borst, 4 Hill, 650; Huffman v. Hulbert, 13
Wend. 377; Merritt v. Lincoln, 21 Barb. 249. Among those cases
holding that the creditor is under no obligation or duty to commence
suit against the principal at the mere request of the surety are the
following: Taylor v. Beck, 13 111. 376; Leavitt v. Savage, 16 Me. 72;
Frye v. Barker, 4 Peck. 382; Bellows v. Lovell, 5 Pick. 307; Adams
Bank v. Anthony, 18 Pick. 238; Benedict v. Olson, 37 Minn. 431, 35
N. W. 10; Pintard v. Davis, 20 N. J. L. 205; Caston v. Dunlap, Eich.
Eq. Cas. 77, 23 Am. Dec. 194; Harris v. Newell, 42 Wis. 687.
In some of the states the statutes make it the duty of the creditor
to commence suit against the principal after receiving a notice so
to do from the surety: Cochran v. Orr, 94 Ind. 433; Barnes v. Mowry,
129 Ind. 568, 28 N. E. 535; Piper v. Newcomer, 25 Iowa, 221; Shen-
andoah Nat. Bank v. Ayres, 87 Iowa, 526, 54 N. W. 367; Smith v.
Clapton, 48 Miss. 66; Jaspar County v. Shanks, 61 Mo. 332; Updike's
Admr. v. Lane, 78 Va. 132; Coleman v. Stone, 85 Va. 386, 7 S. E.
241; Gillilan v. Ludington, 6 W. Va. 128.
e. Effect Where Principal is Insolvent at Time of the Bequest to
Sue, or Becomes so Thereafter. — The creditor, even in those states
where the rule prevails that a request on the part of the surety for
him to sue the principal will exonerate the surety from liability, is not
obliged to sue the principal where he ia insolvent at the time of the
request to sue: Hartman v. Burlingame, 9 Cal. 557; Huffman v. Hurl-
burt, 13 Wend. 377; Herrick v. Borst, 4 Hill, 650; Hunt v, Purdy, 82
N. Y. 486, 37 Am. Eep. 587; Marsh v. Dunckel, 25 Hun, 167; Bizzell
T. Smith, 17 N. C. 27. In some of the states where the matter is
regulated by statute, the duty to sue is not affected by the question
of the insolvency of the principal: Overturf v. Martin, 2 Ind. 507;
Or&bam v. Bush, 73 Iowa, 451, 35 N. W. 518; Meriden Silver Plate Co.
V. Hory, 44 Ohio St. 430, 7 N. E. 753.
Of course, where the principal was solvent at the time of the re-
quest and only becomes insolvent subsequently, the rule whether the
creditor is nevertheless under the duty to sue him under penalty of
94 American State Reports, Vol. 115. [Georgia,
exonerating the surety is dependent npon the rule followed in the par-
ticular state with respect to whether the creditor is under a positive
duty to sue the principal upon the mere request of the surety as
shown in the preceding subdivision.
In order for the creditor to be under any obligation to sue the
principal after a request so to do from the surety, it is essential that
the notice to sue be couched in language which clearly and distinctly
shows a request to sue, and not mere advice as to the propriety of
such a course of action: Savage's Admr, v. Carleton, 33 Ala. 443;
Darby v. Bemey Nat. Bank, 97 Ala. 643, 11 South. 881; Bates v.
State Bank, 7 Ark. 394, 46 Am. Dec. 293; Bowling v. Chambers, 20
Colo. App. 113, 77 Pac. 16; Kennedy v. Folde, 4 Dak. 319, 29 N. W.
667; Kaufman v. Wilson, 29 Ind. 504; Moore v. Peterson, 64 Iowa,
423, 20 N. W. 744; Lockridge v. Upton, 24 Mo. 184; Maier v. Cana-
van, 57 How. Pr. 504; Denick v. Hubbard, 27 Hun, 347; Goodwin v.
Simonson, 74 N. Y. 133; Baker v. Kellogg, 29 Ohio St. 663; Fidler v.
Hershey, 90 Pa. 363; Parrish v. Gray, 1 Humph. 88,
m. Extent of Duty of Creditor to Give Surety Notice of Default
of Principal.
The general rule is that the creditor is under no obligation to give
the surety notice of the default of the principal in order to hold the
surety liable, unless, of course, he has specifically agreed to do so in the
contract of suretyship: Treweek v. Howard, 105 Cal. 434, 39 Pac. 20;
Phoenix Mut. Life Ins. Co. v. Holloway, 51 Conn. 310, 50 Am. Eep.
21; Week v. Pugh, 92 Ind. 382; Phoenix Ins. Co. v. Findley, 59 Iowa,
591, 13 N. W. 738; Gilbert v. State Ins. Co., 3 Kan. App. 1, 44 Pac.
442; Dougherty v. Peters, 2 Eob. 534; Forrester v. State, 46 Md. 154;
Morris Canal. etc. Co. v. Van Vorst's Admx., 21 N. J. L. 100; Neal v.
Freeman, 85 N. C. 441; Matthewson v. Sprague, 1 B. I. 8; Smith v.
Martin, 4 Desaus. 148; Watson v. Barr, 37 S. C. 463, 16 S. E. 188.
But where the creditor, by positive acts on his part, leads the surety
to believe that the debt or obligation has been satisfied, and the
surety, in consequence thereof, releases security held by him, or omits
to secure himself against the default of the principal, the surety
will be discharged: High v. Cox, 55 Ga. 662; Scarratt v. F. W. Cook
Brewing Co., 117 Ga. 181, 43 S. E. 413; Thornburgh v. Madren, 33 Iowa,
380; West v. Brison, 99 Mo. 684, 13 S. W. 95; Cochecho Nat. Bank v.
Haskell, 51 N. H. 116, 12 Am. Eep. 18; Atkins v. Payne, 190 Pa. 5, 42
Atl. 378.
The question of the timeliness of the notice of default very fre-
quently arises in respect to the liability of a surety on contractor's
bonds, or on bonds for the fidelity of employes, but in such cases
the duty of the obligee is generally fixed by the terms of the bond:
Getchell etc. Mfg. Co. v. National Surety Co., 124 Iowa, 617, 100 N.
W. 556; Hurley v. Fidelity etc. Deposit Co., 95 Mo. App. 88, 68 S. W.
958; In re Byer's Estate, 205 Pa. 66, 54 Atl. 492; Dallas etc. Loan
March, 1906.] Davenport v. State Banking Co. 95
Assn. V, Thomas, 36 Tex. Civ. 268, 81 S. W. 1041; National Surety
Co. V. Long, 125 Fed. 887.
IV. Effect Where Creditor Surrenders Securities or Funds Which
were in His Possession.
a. In General. — It is the duty of the creditor, where he holds prop-
erty of the principal in his possession as security for the principal
obligation, not to release such property upon penalty of discharging
the surety to the extent of the property so released. The position
of the creditor under such circumstances is in the nature of that of
a trustee for all the parties concerned: Cullum v. Emanuel, 1 Ala. 23,
34 Am. Dec. 757; Winston v. Yeargin, 50 Ala. 340; Stallings v. Bank
of America, 59 Ga. 701; Kirkpatrick v. Howk, 80 111. 122; Holland v.
Johnson, 51 Ind. 346; Sample v. Cochran, 82 Ind. 260; Bonney v. Bon-
ney, 29 Iowa, 448; Lucas Co. v. Eoberts, 49 Iowa, 159; Barrow v.
Shields, 13 La. Ann. 57; Gay v. Blanchard, 32 La. Ann. 497; Springer
V. Toothaker, 43 Me. 381, 69 Am. Dec. 66; Cummings v. Little, 45
Me. 183; American Bank v. Baker, 4 Met. 164; Guild v. Butler, 127
Mass. 386; Ives v. Bank of Lansingburg, 12 Mich. 361; Willis v.
Davis, 3 Minn, 17; Nelson v. Munch, 28 Minn. 314, 9 N. W. 863;
Taylor v. Jeter, 23 Mo. 244; Griswold v. Jackson, 2 Edw. Ch. 461;
Third Nat. Bank v. Shields, 55 Hun, 274, 8 N. Y. Supp. 298; Smith
V. McLeod, 38 N. C. 390; New Hampshire Sav. Bank v. Colcord, 15
N. H. 119, 41 Am. Dec. 655; Day v. Ramey, 40 Ohio St. 446; Brown v.
Rathburn, 10 Or. 158; Clow v. Derby Coal Co., 98 Pa. 432; Temple-
ton V. Shakley, 107 Pa. 370; Cherry v. Miller, 7 Lea, 305; Strong v.
Wooster, 6 Vt. 536; Austin v. Belknap, 54 Vt. 495; Plankinton v. Gor-
man, 93 Wis. 560, 67 N. W. 1128; Allen v. O 'Donald, 23 Fed. 573;
Brown v. First Nat. Bank, 132 Fed. 450.
b. Effect Where Creditor Makes Pajrments to Principal Which He
had a Bight to Withhold. — A surety on a bond given as an indemnity
against defective work under a construction contract can only be re-
leased by some positive act done by the owner to the prejudice of
the surety, such as acceptance and payment with knowledge or some
act which would imply connivance amounting to fraud: Newark v.
New Jersey Asphalt Co., 68 N. J. L. 458, 53 Atl. 294. Positive acts of
negligence on the part of the creditor in making payments which he
had the right under a building contract to withhold will in some
cases release the surety: Hedrick v. Bobbins, 30 Ind. App. 595, 66 N.
E. 704.
c. Duty of Creditor Where He has Property or Funds of the Prin-
cipal in His Possession Such as Where a Bank is Creditor. — Where
money is deposited on condition that the creditor require it to be ap-
plied on his claim and he turns it over to the principal without the
consent of the surety, the surety is discharged: Pierce v. At wood, 64
Neb. 92, 89 N. W. 669. Hence the general rule is that where the
96 American State Reports, Vol. 115. [Georgia,
creditor has within his control funds of the principal debtor which
may properly be applied toward the payment of the obligation, but
fails to do so, the surety is discharged: Dawson v. Eeal Estate Bank,
6 Pike (Ark.), 283; McDowell v. Bank of Wilmington etc., 1 Harr.
369; Central Bank v. Thein, 76 Hun, 571, 28 N. Y. Stipp. 232; Com-
mercial Nat. Bank v. Henninger, 105 Pa. 496; German Nat. Bank v.
Foreman, 138 Pa. 474, 21 Am, St. Eep. 908, 21 Atl. 20; Mechanics'
Bank v. Seitz, 150 Pa. 632, 30 Am. St. Eep. 853, 24 Atl. 356; First N.
Bank of Lockhaven v. Peltz, 176 Pa. 513, 53 Am. St. Eep. 686, 36
L. E. A. 832, 35 Atl. 218.
But in order to make it incumbent upon the creditor to apply funds
or property in his possession upon the debt of the principal, the cred-
itor must have some such lien on or interest in the property or fund
that it is charged with a trust in favor of the surety. The reasons
for this rule were well set forth in the case of Glazier v. Douglas, 32
Conn. 393, the court saying: "By a series of decisions adopting the
equitable principles of the civil law, there have been annexed to the
undertaking of a surety in a case like this three conditions, and If
either is broken by the creditor that undertaking becomes inopera-
tive, and the surety is discharged.
"The first is that the creditor shall present the note to the maker
for payment at maturity, and if dishonored use due diligence in giv-
ing notice to the surety. The second is that no obligatory extension
of the time of payment shall be given which will preclude the surety,
if he pay the note to the creditor, from enforcing immediate repay-
ment by compulsory process from the principal debtor. And the third
is, that the creditor shall apply in payment of the debt, or hold in
trust for the benefit of the surety, all securities which he may receive
or procure for that purpose by contract or operation of law, so that
if compelled to discharge the debt the surety may be subrogated to
them. And the surety may waive the benefit of these conditions by
assent. But although in some special cases in equity the creditor
may be compelled to proceed against the maker, the law annexes no
condition requiring the creditor to proceed against the principal debtor,
or do any act (whatever his opportunity or however much it may
subserve the interest of the surety) to procure security or enforce
payment from that principal; and he may remain entirely passive, and
rely on the undertaking of the surety, whether the principal debtor
be solvent or insolvent.
"In respect to what shall be deemed a security within the meaning
of the condition, there has been some contrariety of decision. The
better opinion is that it must be a mortgage, pledge or lien — some
right to or interest in property which the creditor can hold in trust
for the surety, and to which the surety, if he pay the debt, can be sub-
rogated, and the right to apply or hold must exist and be absolute^
March, 1906.] Davenport v. State Banking Co. 97
"Mortgages and pledges made or given as security are, as a mat-
ter of course, within the condition. But even these may be received
under such a qualified or contingent contract that they may be re-
leased. Thus in Pearl Street Congregational Soc. v. Finlay, 23 Conn.
10, a mortgage was given as security with the understanding that
other security when offered should be received and the mortgage re-
leased, and this court held that the creditor could safely carry out
the agreement and release the mortgage. The right to hold the secur-
ity in that case was created by the agreement, and was contingent,
not absolute, and the interest of the surety in it could be no greater
than that of the creditor.
"The contrariety of decision spoken of has been chiefly in respect
to liens by process or operation of law. Judgment liens made such by
the local law are assignable, and clearly within the condition. But it
has been made a question whether a lien obtained by levy of execu-
tion on the goods of the principal debtor can be released or aban-
doned, and the better opinion now is that it cannot be: Mayhew v,
Crickett, 2 Swan, 185; Commonwealth v. Vanderslice, 8 Serg. & E. 452;
Chichester's Admr. v. Mason, 7 Leigh, 244. In the last case execution
was not levied, but the law made it a lien on all the defendants' goods
as soon as issued.
"But it is otherwise in respect to liens acquired by attachment on
mesne process. As the creditor is under no obligation of active dil-
igence, and therefore need not commence a suit whatever his oppor-
tunity, so if he commences one he is under no obligation to pursue
it, for it involves trouble and expenses not required of him where
goods are taken by the officer in execution: Hurd v. Little, 12 Mass.
502; Bank of Montpelier v. Dixon, 4 Vt. 587, 24 Am. Dec, 640; Crane
V. Stickles, 15 Vt. 252; Baker's Exrs. v. Marshall, 16 Vt. 522, 42 Am,
Dec. 528.
"Applying these principles to the case, it is clear that the defense
is groundless. If it appeared from the finding that the plaintiff was
individually indebted to Rogers & Co. for goods purchased of them
after the note was given, that indebtedness, in the absence of any
agreement tv that effect, would not be a security in his hands, within
the condition annexed by law to the defendant's udertaking. The
plaintiff would have had no lien upon it and no right by contract or
operation of law to apply it; nor would he hold the debt in trust for
the benefit of the surety; nor if the defendant paid the note could
he claim to be subrogated to it.
"The plaintiff could have retained it, and if sued could offset it,
but that the defendant had no more right to insist he should do than
to insist that he should do any other act to secure or enforce payment.
The surety could have paid the note and attached the debt by foreiga
attachment.
"The defendant cites several dicta to the effect that 'where the
creditor has the means of satisfaction actually or potentially in his hands
Am. St. Rep., Vol. 115—7
98 American State Reports, Vol. 115. L^eorgia,
and releases them the surety is discharged.' The dicta were all made
in cases where there was a lien, and the money or property held under
a right of application. Thus, in the case in the 8th Pickering, 122, 19
Am. Dec. 311 (Baker v. Briggs), property had been assigned by the
debtor in trust to pay the note, and the money was in the hands of
the assignee subject to the call of the creditor, and Judge Parker said
it was the same as if in his own hands, and as he had funds with the
right to apply them, he could not call on the surety. There the right
to apply was created by the assignment of the debtor and the money
was strictly a security. In Commonwealth v. Vanderslice, 8 Serg. &
R. 452, a lien had been acquired by the levy of execution on goods,
and the dictum cited had reference to such a state of facts. In Law
V. East India Co., 4 Ves. 825, funds had been left in the hands of
the creditor to pay the debt, and there was a right of application.
In Lichtenthaler v. Thompson, 18 Serg. & R. 157, 15 Am. Dec. 581,
the plaintiff was a lessor, and the defendant surety for the fulfill-
ment of the lease, and the lessor had a lien by statute on the goods
of the lessee which had been taken by another creditor in execution
and sold, but his lien extended to the money which he fraudulently
permitted a prior lessor to claim, and the court held the right to the
money, a security which the plaintiff was bound to apply to the officer
for and obtain. These and all the other cases from which the de-
fendant cites are cases of lien, with right of application, and would
not sustain the defense if the debt to Roger & Co. was the individual
debt of the plaintiff."
The decisions with respect to whether a bank which is the payee of a
note is obliged to retain the amount of the note from out of the de-
posit of the maker at the bank when the note becomes due are not
harmonious. Where a deposit with the bank is a special one, such
as, for instance, under an agreement that the depositor will buy cattle
and check the money out in such transactions, it is held that the
bank is under no duty to retain the deposit in order to protect the
surety from loss: Wilson v. Dawson, 52 Ind. 513; Neponset Bank v.
Leland, 5 Met. 259.
The diversity of opinion amongst the courts upon the question of
the duty of a bank holding a note made by a depositor and signed
by a surety is well shown in the principal case (Davenport v. State
Banking Co., 126 Ga. 136, ante, p. 68, 54 S. E. 977), wherein the
court said: "It has been held in a number of cases that where a bank
is the owner of a note or other obligation evidencing an indebtedness,
upon which there is a surety, and at the maturity of the debt the prin-
cipal debtor has funds on general deposit with the bank sufficient to
pay the debt, the failure of the bank to apply such funds to its pay-
ment will discharge the surety: Commercial Bank v. Henninger, 105
Pa. 496; German Nat. Bank v. Foreman, 138 Pa. 474, 21 Am. St. Rep.
808, 21 Atl. 20; Dawson v. Real Estate Bank, 5 Pike (Ark.), 283;
March, 1906.] Davenport v. State Banking Co. 99
Pursifull V. Pineville Banking Co., 97 Ky. 154, 53 Am. St. Eep. 409,
30 S. W. 203; Central Bank of Eochester v. Thein, 76 Hun, 571, 28
N. Y. Supp. 232. The contrary view was taken in Second Nat. Bank
V. Hill, 76 Ind. 223, 40 Am. Kep. 23i», Martin v. Mechanics' Bank, 6
Har. & J. 235, and National Mahaiwe Bank v. Peck, 127 Mass. 298,
34 Am. Eep. 368. For although in the Massachusetts case,_ and
perhaps in each of the other two, the decisions might have been
placed upon the narrow ground that it did not appear that at the
maturity of the note the bank held on general deposit funds of
the principal sufficient to pay it, in none of these cases was this
done; but the decision in each case was placed upon the broad
ground that the bank was not bound to set oflP the amount of a note
due to it by a depositor against his general deposit account for the
protection of a surety upon the note. It has been held by almost
all the courts where the questions have arisen that, if at the
maturity of a note held by a bank the principal thereon has not suffi-
cient funds in general deposit with the bank to pay it, the bank is
under no duty to a surety upon the note to apply such funds of the
principal as may then be on deposit to the payment of the note pro
tanto; nor is it bound to pay the note from subsequent deposits of
the principal, although they are sufficient for this purpose: People's
Bank of Wilkes-Barre v. Legrand, 103 Pa. 309, 49 Am. Eep. 126;
First Nat. Bank of Lancaster v. Shreiner, 110 Pa. 188, 20 Atl. 718;
First Nat. Bank of Lock Haven v. Peltz, 176 Pa. 513, 53 Am. St. Eep.
686, 35 Atl. 218, 36 L. E. A. 832; Voss v. German-American Bank,
83 ni. 599, 25 Am. Eep. 415; National Bank of Newburg v. Smith,
66 N. Y. 271, 23 Am. Eep. 48; Bacon's Admr. v. Bacon's Trustees,
94 Va. 686, 27 S. E. 576; Houston v. Braden (Tex Civ. App.), 37
8. W. 467; Citizens' Bank v. Elliott, 9 Kan. App. 797, 59 Pac. 1102.
The only case to the contrary which we have found is McDowell
V. Wilmington Bank, 1 Harr. (Del.) 369."
If a bank at which a note is payable and to which it belongs
had, when it became due, moneys of the maker on deposit more
than sufficient to pay it, and, instead of applying the moneys to
such payment, permitted them to be drawn out by the maker, who
subsequently became insolvent, his surety on the note is thereby re-
leased: PursifuU v. Pineville Banking Co., 97 Ky. 154, 53 Am. St.
Eep. 409, 30 S. W. 203. In the case last cited, the court observed:
"The right on part of this bank to retain a sufficiency of Hurst's
deposit gave it the absolute control of an ample security for the
payment of this debt. A lien by pledge could give no higher right
to the security than this bank had. It had the unquestioned right
to actually appropriate and apply this money, which it owed to
Hurst, to the payment of Hurst's debt to it. It matters not whether
the right to the security has its origin in the doctrine of setoflF
or under a pledge as collateral. It is the extent of the right to
100 American State Reports, Vol. 115. [Georgia,
the security, rather than the source from which that right springs,
that should determine the question whether the creditor can volun-
tarily surrender the security without releasing the surety, and, hav-
ing had in its hands a fund which it could, by mere exercise of its
option to do so, have used for the satisfaction of this debt, and which,
we may assume, the dictates of ordinary diligence and of prudent
banking would have prompted it to thus use, this bank has, in our
judgment, been guilty of bad faith toward the surety, who, accord-
ing to the facts as they are admitted here, knew of this large de-
posit to the credit of his principal, who received no notice of the
nonpayment of the note until nearly four years thereafter, and who
assumed, as he had a right to do under these circumstances, that
the note had been paid at maturity."
But a mere partial release of the maker's deposit account to the
prejudice of the surety's equitable rights will not operate as a full
discharge of the surety's obligation, though it may be so operated
to the extent of the maker's deposit: Lowe v. Eeddan, 123 Wis. 90,
100 N. W. 1038.
d. Duty of Creditor to Exercise Care and Diligence in the Man-
agement of Collateral Securities. — A creditor who receives securities
as collateral to the principal obligation owes a duty to the surety
to use proper care and diligence in the management and care of
such securities. But he is not required to exercise any greater de-
gree of care in regard to them than an ordinarily prudent man
would exercise in protecting his own interests: Sullivan v. State, 59
Ark. 47, 26 S. W. 194; Pfirshing v. Peterson, 98 111. App. 70; Crira
V. Fleming, 101 Ind. 154; Wasson v. Hodshire, 108 Ind. 26, 8 N. E.
621; Mingus v. Dougherty, 87 Iowa, 56, 43 Am. St. Eep. 354, 54 N.
W. 66; Jenkins v. National Bank, 58 Me. 275; Fennell v. McGowan, 58
Miss. 261; State Bank v. Bartle, 114 Mo. 276, 21 S. W. 816; Burr
V. Beyer, 2 Neb. 265; City Bank v. Young, 43 N. H. 457; Black Eiver
Bank v. Page, 44 N. Y. 453; Teaflf v. Eoss, 1 Ohio St. 469; Kemmerer
v. Wilson, 31 Pa. 110; Harrison Mach. Works v. Templeton, 82 Tex.
443, 18 S. W. 601; Douglas v. Eeynolds, 7 Pet. 113, 8 L. ed. 626. But
after a mortgage or other lien in favor of the creditor has been madn
effective, the creditor is under no positive duty to foreclose the lien
prior to the property subject to the lien becoming depreciated, since it is
in the power of the surety to pay the debt and become subjected to the
lien: Grisard v. Henson, 50 Ark. 229, 6 S. W. 906; Carver v. Steele, 116
Cal. 116, 58 Am. St. Eep. 156, 47 Pac. 1007; Wasson v. Hodshire, 108 Ind.
26, 8 N. E. 621; Fuller v. Tomlinson, 58 Iowa, 111, 12 N. W. 127; Sheldon
V. Williams, 11 Neb. 272, 9 N. W. 86; Schroeppell v. Shaw, 3 N. Y. 446;
Howe M. Co. v. Farington, 82 N. Y. 121; Appeal of Kindt, 102 Pa. 441;
Day V. Elmore, 4 W^is. 190. But a creditor who has a judgment lien upon
the land of the principal debtor, which land is fairly worth in the mar-
March, 1906.] Davenport v. State Banking Co. 101
ket enough to cover the principal obligation, releases the surety
where he combines with the owner in selling it at private sale for
less than it is worth: Montgomery v. Sayre, 100 Cal. 182, 38 Am. St.
Rep. 271, 34 Pac. 646. In other words, where the creditor is guilty
of colluding with the principal debtor in such a manner as to waste
the securities held by the creditor as collateral to the obligation, the
surety may avail himself of that fact: Phares v. Barbour, 49 111. 370;
Eobeson v. Eoberts, 20 Ind. 155, 83 Am. Dec. 308; Nichols v. Burch,
128 Ind. 324, 27 N. E. 737; Clopton v. Spratt, 52 Miss. 251; Sitgreaves
V. Farmers' Bank, 49 Pa. 359.
V. Efifect Where Creditor Loses Lien Secured by Levy of Execution
Against Principal Debtor by His Own Negligence.
The efifect of the loss of a lien secured by the levy of an execution
* upon the property of the principal debtor has been stated by the court
of Maine to be as follows: "Although the plaintiff was not legally
> bound to use active diligence in collecting the debt of the principal,
and the surety would not be discharged by reason of his delay in
the matter, and though the plaintiff might have discontinued proceed-
ings against the principal debtor which he need noot have instituted,
yet it would be clearly inequitable to allow him to abandon an ab-
solute lien or security upon the property of the principal, which he
^-^ had obtained as the result of those proceedings, and to retain his
i^— & hold upon the security for the whole debt": Springer v. Toothaker,
I 43 Me. 381, 69 Am. Dec. 66.
Cf-t The rule on this subject has been stated in Freeman on Executions,
section 269, to be as follows: "When third persons, as sureties, are
collaterally liable, the release of the levy cannot revive the judgment
as to them; and in general, so far as the rights of third persons are
concerned, whether they are sureties or the holders of junior liens, or
otherwise interested in the discharge of the writ, the levy upon goods
, is a satisfaction of the judgment to the extent of their value, unless
^^^ plaintiff is deprived of the benefit of his levy, without any fault,
neglect or indulgence on his part, or on the part of the oflficer. If
there are sureties for the payment of the debt for which the writ is-
sued, its levy operates as a satisfaction in their behalf, of the bene-
fit of which they cannot be deprived through the fault of the plain-
tiff or the officer. Hence, a release of the levy without their assent
relieves them of their obligation as sureties, unless the release is with-
out the concurrence of the plaintiff, as where it is accomplished by
giving an undertaking on appeal, or a forthcoming and delivery
bond."
VL Effect Where Lien in Favor of Creditor is Lost by Operation of
Law.
Where a lien secured by the creditor upon property of the principal
debtor is lost by operation of law, the surety is discharged: New-
102 American* State Reports, Vol. 115. [Georgia,
comb V. Eaynor, 21 Wend. 108, 34 Am. Dec. 219; Shutts v. Fingar,
100 N. Y. 539, 53 Am. Rep. 231, 3 N. E. 588; Wright v. Kuepper,
1 Pa. 361; Johnson v. Young, 20 W. Va. 614. But the failure of the
creditor to revive a judgment does not release a surety, in the ab-
sence of an express agreement that such judgment should be kept
revived for his benefit: Campbell v. Sherman, 151 Pa. 70, 31 Am. St.
Eep. 735, 25 Atl. 35.
HOLLOWAY V. HOLLOWAY.
[126 Ga. 459, 55 S. E. 191.]
DIVORCE — Moral Turpitude — Voluntary Manslaughter. —
Under a statute giving as a ground for divorce the conviction of
either party of an offense involving moral turpitude, and under
which he or she is sentenced to the penitentiary for a term of two
years or longer, a wife becomes entitled to a divorce on her husband
being convicted of voluntary manslaughter and sentenced to the
penitentiary for a term of more than two years, (p. i03.)
DIVORCE rOE CRIME— Pardon, Effect of.— If a husband is
convicted and sentenced for a crime entitling his wife to a divorce,
his subsequent pardon by the governor does not destroy her right
to such divorce, (p. 104.)
0. M. Duke and J. E. and L. B. McClelland, for the plain-
tiff in error.
J. D. Kilpatrick, contra.
4«o COBB, P. J. Mittie D. Holloway brought her libel
for divorce against Joseph Holloway on May 13, 1905, and
alleged that they were married on December 24, 1893; in
1899 the respondent was convicted of the offense of volun-
tary manslaughter, and sentenced to serve a term of twenty
years in the penitentiary ; they have not lived together since
the conviction of the respondent; in 1904 the respondent
was pardoned by the governor. A demurrer to the libel
was overruled, and the respondent excepted.
1. The Civil Code declares among the grounds for divorce,
"the conviction of either party for an offense involving
moral turpitude, and under which he or she is sentenced
to imprisonment in the penitentiary for the term of two
years or longer": Civ. Code, sec. 2426, par. 8. The respond-
ent was sentenced to the penitentiary for a term exceeding
two years, and the right of the libelant to a divorce depends
March, 1906.] Hollow ay v. Hollo way. 103
upon whether the offense of which he was convicted involved
moral turpitude. Turpitude in its ordinary sense involves
the idea of inherent baseness or vileness, shameful wicked-
ness, depravity: Webster's International Dictionary. In
its legal sense it includes everything done contrary to jus-
tice, honesty, modesty or good morals: Black's Law Diction-
ary; Bouvier's Law Dictionary. The word "moral," which
so often precedes the word "turpitude," does not seem to
add anything to the meaning of the term, other than
that emphasis which often results from a tautological ex-
pression. All crimes embraced within the Roman's concep-
tion of the crimen falsi involve turpitude ; but it is not
safe to declare that such crimes only involve turpitude.
Murder involves vileness and depravity; for it is the result
of an abandoned and malignant heart. Voluntary man-
slaughter involves the intentional destruction of human life.
It is true that there is no deliberation, no malice, in the
act constituting the offense, but the manslayer intends to
kill, and carries out the intention in an unlawful manner.
It may be the result of passion or '*®* teipper, and the law
in its mercy visits a less penalty than that inflicted for will-
ful killing; but it necessarily involves the intention to un-
lawfully deprive another of life. Whenever one intention-
ally and wrongfully takes human life, he does an act which
is base vile, depraved and contrary to good morals. That
the offense of voluntary manslaughter involves mo»al turpi-
tude cannot admit of serious question: See, in this connec-
tion, 5 Words and Phrases, 4580.
2. The right of'the libelant to a divorce results from the
conviction and sentence. There are three essential ingredi-
ents in the ground for divorce : the commission of the offense
involving moral turpitude, the conviction for the same, and
a sentence for a term of two years or longer in the peniten-
tiary. When this state of affairs is shown to exist, the law
declares the libelant is entitled to a divorce. Can this right
given by statute be destroyed by an executive pardon? The
pardon restores the convict, so far as the public is con-
cerned, to the position he occupied before the conviction.
He is no longer infamous; he may vote, hold office, and per-
form other public functions. Rights which have accrued to
individuals as a result of the conviction are not affected by
the pardon. Mr. Bishop, in his work on Marriage, Divorce
104 American State Reports, Vol. 115. [Georgia,
and Separation, sections 444, 1807, says that where convic-
tion for a crime is declared to be a ground for divorce it is
a defense to a divorce suit to show that the convict has
been pardoned. He cites no authority for this statement.
He does refer to the case of Young v. Young, 61 Tex. 191,
where it was held that the commutation of the sentence of
one convicted of a felony was not equivalent to a pardon.
The statute of Texas provided that if a party to a marriage
was convicted of a felony and imprisoned in a state prison,
this should be a ground for divorce, provided that no suit
could be maintained for the conviction of either party until
twelve months after final judgment of conviction, nor then
if the governor should have pardoned the convict. In that
case the governor had commuted the sentence of the con-
vict within twelve months after final judgment; and this
was held not to amount to a pardon within the meaning of
the statute. Mr. Nelson in his work on Divorce and Separa-
tion says that it would seem that if before the trial of
the suit for divorce the convict is pardoned, the divorce
should not be granted. He cites no authority for the prop-
osition. Reference is made to "**** the case of Young v.
Young, 61 Tex. 191, and also to the case of State v. Duket,
90 Wis. 272, 48 Am. St. Rep. 928, 63 N. W. 83, 31 L. R. A.
575. In that case it was held that the reversal of a sen-
tence of one convicted of a felony did not have the effect
of restorftig the conjugal rights taken away by virtue of a
statute which declared that a sentence of imprisonment for
life should dissolve the mai*riage of the person sentenced.
Mr. Keezer, in his recent work on Marriage and Divorce,
says that no pardon granted after the decree of divorce will
restore such party to his or her conjugal rights. To sustain
this proposition he cites the case of Young v. Young, 61
Tex. 191, and Handy v. Handy, 124 Mass. 394. In the case
last cited the facts were peculiar, and it is impossible to tell
from the meager statement in the report exactly what was
the extent of the ruling. We have been able to find no
decision which is a direct ruling on the question now before
us. We think the better view is that the pardon of the con-
vict does not destroy the right to a divorce, declared by stat-
ute to arise upon conviction and sentence.
Judgment affirmed.
All the justices concur, except Fish, C. J., absent.
March, 1906.] iloRRis v. Duncan. 105
The Dissolution of Marriage consequent upon the sentence of either
spouse for life is absolute, and a reversal of the sentence does not
restore the parties to their marital relations, where the court pro-
nouncing the sentence had jurisdiction of the accused and of the
offense: State v. Duket, 90 Wis. 272, 48 Am. St. Eep. 928.
MORRIS V. DUNCAN.
[126 Ga. 467, 54 S. E. 1045.]
PUNITIVE DAMAGES Against the Estate of a Decedent can-
not be Awarded, because, on account of his death, the object in
awarding such damages must fail. (p. 106.)
DAMAGES for Wounded Feelings are not Punitive but Com-
pensatory, and the estate of a decedent may be liable for such dam-
ages, (p. 106.)
STATUTES, Construction of Must be Prospective. — A statute
authorizing a court to open defaults does not apply to judgments by
default already existing, (p. 107.)
Action for damages for the malicious use and abuse of
civil process in levying on the household effects of the de-
fendant on a debt which she did not owe. During the pend-
ency of the action, the defendant died, and his executors
were substituted as defendant. The court instructed the
jury, among other things, as follows: "Now, what sum you
shall allQw, if you' allow any, is to be determined by you,
and, as already stated to you, you will take into considera-
tion the character of the wrong, and then, desiring to be
fair and just to both sides, you would assess in favor of the
plaintiff such sum as would receive the approval of your
enlightened consciences, desiring, as I have said, to be fair
and just to both sides, and not oppressive to the defend-
ant, because as to this class of damage the law declares there
is no standard by which to measure it except the enlight-
ened consciences of impartial jurors." Verdict for the
plaintiff for twelve hundred and thirty dollars, and the de-
fendant appealed.
W. H. Terrell, for the plaintiffs in error.
B. J. Conyers, contra.
470 ATKINSON, J. 1. Considering the objections urged
against the portions of the charge last above quoted, it is
106 American State Kepobts, Vol. 115. [Georgia,
evident that they were well taken. Damages which are
given merely as a punishment to deter the wrongdoer from
a repetition of the offense clearly have no reference to com-
pensation for the wrong inflicted. The award of such dam-
ages against the estate of a wrongdoer no longer in life
must fail of its object, and could not therefore be allowed :
See 12 Am. & Eng. Ency. of Law, 42, and 13 Cyc. 120, and
cit. Damages, however, for wounded feelings are not puni-
tive, but compensatory (see Head v. Georgia Pac. R. Co.,
79 Ga. 358, 11 Am. St. Rep. 434, 7 S. E. 217) ; and if the
jury in their discretion deemed it proper to award them,
the defendants might be liable for such damages, just as
well as for compensatory damages of any other class. A
given act of trespass, as, for example, by injury to personal
property, as alleged in this case, may be committed in such
a way as to authorize a recovery of damages as compensa-
tion for injury to the property, or for attorneys' fees, or
for the wounded feelings of the person injured on account
of aggravating circumstances attending the commission of
the injury. And in addition to these, if the aggravation
warrant, there may be a further sum recovered, not as
compensation to the injured party, but as a penalty against
the trespasser to prevent a repetition of such conduct upon
his part. As already stated, the defendant being dead, no
punishment can be inflicted by the allowance of a recovery
purely for that purpose, and a right of recovery, of such
damages would not survive against his representative. But
where there has been injury to the property or feelings
of the plaintiff by the trespass for which she is entitled to
compensation, her right of recovery as to these compensa-
tory damages survives, and may be enforced against the
estate of the deceased. This is true although the right to
damages for wounded feelings may arise from the same ag-
gravating circumstances which would have authorized a re-
covery of an additional sum, not in any way compensatory
to the plaintiff, but purely as a punishment of the tres-
passer, had he lived. It follows that the court should not
have charged upon the ^''^ subject of additional damages
as complained of. The charge should have been so restricted
as to prevent confusion in the minds of the jury, in order
that they might avoid confounding the right to compen-
satory damages with a liability upon the part of the defend-
March, 1906.] Morris v. Duncan. 107
ant for punitive damages. The charge as dealt with being
sufficient to require the grant of a new trial, a further dis-
cussion of the errors complained of is not necessary.
2. Prior to the act of 1902, page 117, the judge of the city
<jourt of Atlanta had no power to open a default : Dodson
Printers' Supply Co. v. Harris, 114 Ga. 966(2), 41 S. E. 54;
Beacham v. Kea, 118 Ga. 406, 45 S. E. 398; Cheatham v.
Brown-Catlett Furniture Co., 118 Ga. 420, 45 S. E. 399. A
ease in that court was required to be answered on or before
the first day of the first term of court; otherwise it would
be in default. The act above referred to provided that the
judge "may open defaults upon the same terms and condi-
tions as may judges of the superior courts of this state."
But that act was prospective in its operation, and did not
contemplate default judgments then in existence. It fol-
lows that the default in this case, which existed on the first
Monday in July, 1898, did not fall within the operation of
the act, and could not be opened by order of the court. Had
the court been vested with power, there was in point of fact
no order of court taken directing that the default be opened.
There was merely a petition filed July 5, 1898, asking per-
mission to open the default and file a plea. No order what-
ever was passed upon the petition, but a plea was filed with-
out any apparent sanction of the court. On July 21, 1904,
the plaintiff moved the court to strike the plea from the
files of the court. The plea being in court without author-
ity of law or the sanction of the court, there was no other
course except to strike the plea.
Judgment reversed.
All the justices concur, except Fish, C. J., absent.
The Death of a Wrongdoer destroys any right of action to recover
exemplary damages for the wrong: See the note to Spellman v.
Bichmond etc B. B. Co., 28 Am. St. Bep. 875.
108 American State Reports, Vol. 115. [Georgia,
ALBRIGHT-PRYOR COMPANY v. PACIFIC SELLING
COMPANY.
tl26 Ga. 498, 55 S. E. 251.]
JURISDICTION, Necessity of Return Supporting. — To au-
thorize judgment against a person who has not appeared or answered
or otherwise submitted himself to the jurisdiction of the court, there
must be not only service upon such defendant, but a legal return of
service, (p. 110.)
JURISDICTION, — In Attachment Cases the Levy Takes the
Place of the Service. Where there has been no step taken to acquire
jurisdiction of the defendant's person, and he has not submitted him-
self to the jurisdiction of the court, it is without jurisdiction to
render judgment, unless there has been a legal seizure of property-
owned by him within the jurisdiction of the court, and then only
after a legal return of such seizure has been duly entered, (p. 110.)
ATTACHMENT, Levy of Must Show on Whose Property It is.
It is essential to the validity of an attachment against a nonresident
that the entry of the levy show that the property was levied on as
the property of the defendant in the attachment, and when there are
two or more defendants, the entry must show to which of them
such property belonged, (p. 110.)
A JUDGMENT or Attachment Against a Nonresident When
the Return of the Levy Does not Show to Which of the Defendants
the Property Belongs is without jurisdiction and void. (p. 110.)
A JUDGMENT on a Garnishment Against a Nonresident is
Unauthorized and Void if, at the time it was rendered, the garnishee
had not answered, and there was nothing before the court from
which it could be determined whether any property of either of the
defendants had been seized, (p. 111.)
ATTACHMENT — ^Amendment of Entry of Levy. — If an at-
tachment is levied on personal property, the entry of such levy is
amendable, but the amendment does not relate back so as to render
a judgment previously entered valid, (p. 111.)
ATTACHMENT — Jurisdiction to Enter Judgment in Must be
Acquired Before the Return Term. — The subsequent issuing and re-
turn of summons in garnishment cannot give validity to a judgment
if there had been no seizure of the property of the defendant before
the return term, and jurisdiction had not been otherwise acquired,
(p. 112.)
PRACTICE. — An Amendment May be Made to a Motion to Set
Aside a Judgment in which other grounds are added to the motion,
(p. 113.)
Moore & Pomeroy, for the plaintiff.
J. W. Moore and George Gordon, for the defendant.
^»» COBB, P. J. On October 28, 1904, Albright-Pryor
Company sued out an attachment against the Pacific Selling
Company, a nonresident corporation, and Thos. Roberts &
March, '06.] Albright-Pbyor Co. v. Pacific etc. Co. 109
Co., a nonresident partnership, claiming an indebtedness of
one thousand dollars. This attachment was levied by serv-
ing summons of garnishment upon three railroad companies,
and "also by levying on the following property as the
property of defendant: fifty cases of canned salmon, con-
tained in Southern car No. 24,425," etc. The attachment
was returnable to the January term of the city court of
Atlanta, which begins on the first Monday in January. At
the time none of the railroad companies answered the sum-
mons of garnishment. On January 25, 1905, the attach-
ment was further levied by serving summons of garnish-
ment upon the Atlanta National Bank. On February 24,
1905, the plaintiff filed its declaration in attachment. At
the March term, which was the trial term, the Atlanta
National Bank answered, admitting possession of fifteen
hundred and thirty-eight dollars and sixty cents belonging
to the Pacific Selling Company; and as the latter company
failed to answer the suit, a judgment was rendered against
it on April 14, 1905. On May 29, 1905, the Pacific Selling
Company filed a motion to vacate the judgment against it,
upon the ground that no jurisdiction had been obtained
against the movant by levy ^^^ upon any of its property.
It was alleged in the motion that the salmon levied upon
was not the property of movant, but was the property of
Roberts & Co. ; that no property of movant was seized by the
garnishment upon the railroad companies; and that on the
first Monday in January, 1905, the date on which the at-
tachment was returnable, no property of movant had been
seized. It was also alleged that while the attachment was
sued out for one thousand dollars, the petition showed an
indebtedness of only nine hundred dollars, and the judg-
ment should be vacated upon this ground. It was further
alleged, by amendment, that the entry of the constable,
wherein it appeared that he levied upon the canned salmon
"as the property of the defendant," was void for uncer-
tainty, there being two defendants. To the motion and
amendment the plaintiff filed general and special demurrers,
which were overruled. An answer was also filed, denying
the material allegations of the motion. The levying officer,
who had been made a party, offered to amend his entry so
that it would appear that the canned salmon had been
levied on as the property of the Pacific Selling Company.
110 American State Reports, Vol. 115. [Georgia,
This amendment was disallowed. After a hearing, the judg-
ment was vacated as prayed. Albright-Pryor Company ex-
cepted to each of the rulings stated.
1. To authorize a judgment against a person who has not
appeared and answered or otherwise submitted himself to
ihe jurisdiction of the court, there must be not only service
upon such person, but also a legal return of such service.
Until service has been made and a legal return entered, the
court is without jurisdiction to enter judgment against a
defendant who has not appeared: Wood v. Callaway, 119
Ga. 801, 47 S. E. 178, and cases cited.
2. In attachment cases the levy takes the place of service.
When no steps have been taken in an attachment case to
acquire jurisdiction of the defendant's person, and he has
not appeared and answered or otherwise submitted himself
to the jurisdiction of the court, the court is without juris-
diction to render a judgment until there has been a lawful
seizure of property owned by him within the jurisdiction of
the court, and then only after a lawful return of such seiz-
ure has been duly entered: Tuells v. Torras, 113 Ga. 691, 39
S. E. 455.
^*^ 3. It is essential to the validity of the levy of an at-
tachment issued against a nonresident that the entry of levy
should show that the property was levied on as the property
of defendant in attachment ; and this is so whether the prop-
erty be realty or personalty: Drake on Attachments, 7th
ed., sec. 449. In the absence of such a return the court has
no jurisdiction to render a judgment in the case: Tuells v.
Torras, 113 Ga. 691, 39 S. E. 455. When an execution
against several defendants is levied, it is essential to the
validity of the levy that the entry should disclose to which
of the defendants the property seized belonged. A mere
general levy upon the property without describing it as
the property of the defendant is invalid, and a sale there-
under will not devest the title of the real owner of the land :
Cooper V. Yearwood, 119 Ga. 44, 45 S. E. 176. It necessarily
follows from what was laid down in the decision cited,
that when an attachment against two defendants is levied,
and the entry of levy simply shows that certain property
was seized as the "property of the defendant," not dis-
closing which defendant was referred to, the levy fails to
disclose a valid seizure of the property of either defendant.
March, '06.] Albright-Pryob Co. v. Pacific etc. Co. Ill
and is insufficient as the basis of a judgment on the attach-
ment. There being, at the time that the judgment on the
attachment in the present case was rendered, no entry of
levy other than the one above described, the judgment was
void, it not appearing from the entry of levy that any prop-
erty of the defendant against whom the judgment on the
attachment was rendered had been seized, and the court
was therefore without jurisdiction.
4. It is said that the judgment is authorized, because there
was an entry of service of garnishment upon three railroad
companies, and the garnishees had not answered, and that
the judgment was valid, and would be operative upon any
property that would thereafter be disclosed by the answer
of such garnishees. The garnishees not having answered,
it was impossible at the time the judgment was rendered
to determine whether any property of either of the defend-
ants had been seized, and until this fact appears the court
is without jurisdiction to render the judgment: Henry v.
Lennox-Haldeman Co., 116 Ga. 9, 42 S. E. 383.
5. The levy having been upon personal property and the
entry, therefore, being mere evidence of seizure and not the
seizure itself, it is amendable. The jurisdiction of the court
depending upon both the seizure and the entry, the amend-
ment would not relate *®* back so as to render the judg-
ment valid. The case of Jones v. Bibb Brick Co., 120 Ga.
321, 48 S. E. 25. was not an attachment case, and in addition
to this the motion to set aside the judgment showed affirm-
atively that the garnishee had been properly served.
6. But it is said that the summons of garnishment issued
against the bank resulted in an answer disclosing assets in
the hands of the bank belonging to the defendant against
whom the judgment in attachment was rendered, and there-
fore the court had jurisdiction to render the judgment. The
code declares that when affidavit and bond to obtain gar-
nishment have been given, summons of garnishment may
issue from time to time before trial, without giving any
additional bond: Civ. Code, sec. 4709. In Alston v. Dun-
ning. 35 Ga. 229, it was held that summons of garnishment
founded on an attachment may issue after the return term
of the attachment without additional affidavit and bond.
In that ease the attachment was levied upon certain personal
property of the defendant, and was also executed by ser-
112 American State Reports, Vol. 115. [Georgia,
vice of summons of garnishment, all of this being done be-
fore the return term. The garnishments were subsequently
dismissed, and after the return term new summons issued
directed to the same garnishees. The jurisdiction of the
court depends upon the proceedings had prior to the return
term: Waples on Attachment, 2d ed., sec. 295; Drake on
Attachments, 7th ed., sec. 451 (b) ; 1 Wade on Attachment,
sec. 128 ; 2 Wade on Attachment, sec. 336 ; Nance v. Barber,
7 Tex. Civ. App. Ill, 26 S. W. 151. If there has been no
seizure of the property of the defendant before the return
term, the court is without jurisdiction in the matter, and
all subsequent proceedings are invalid. Hence when the
court had failed to acquire jurisdiction at the return term,
summons of garnishment issued after that time would be
invalid. It would be otherwise, however, if the court had
acquired jurisdiction. In the case above cited (Alston v.
Dunning, 35 Ga. 229), the validity of the attachment was
not brought into question, and therefore the decision cannot
be treated as authority for the proposition that a seizure
of personal property before the return term, which is
claimed by a third person and the claim subsequently sus-
tained, would give the court jurisdiction to render a judg-
ment on the attachment. If there has been a levy upon
tangible personal property under the attachment and be-
fore the return term, the court would have jurisdiction to
render a judgment on the attachment, provided the legal re-
turn of such levy was ^^^ made before the return term, or
thereafter entered nunc pro tunc before the judgment. If
the attachment has been executed by serving summons of
garnishment, it is of course not essential to jurisdiction that
the fact that effects of the defendant have been seized un-
der the garnishment should appear before the return term.
But the jurisdiction of the court is in abeyance until the
fact that there are effects in the hands of the garnishee
appears by answer, or by judgment on a traverse to the
answer. If the court acquires jurisdiction before the return
term as a result of a seizure under levy of tangible personal
property, judgment may be so entered that it will operate
upon funds thereafter brought in under answers of gar-
nishees: Steers v. Morgan, 66 Ga. 552. The seizure of the
personalty would give the court jurisdiction to render an
absolute judgment as to the property so seized, and a pro-
March, '06.] Albright-Peyor Co. v. Pacific etc. Co. 113
visional judgment as to that which plight thereafter be
brought in under proceedings against the garnishees. How-
ever, if the attachment is executed by service of summons of
garnishment only, then no judgment can be rendered until
it is made to appear to the court that the effects of the
defendant have been seized under garnishment proceedings.
In the present case the court did not acquire jurisdiction
as to the property levied on, for the reason that there had
been no legal entry of the levy prior to the judgment. At
the time the judgment was rendered it did not appear
from the answer of the garnishees who had been summoned
to answer at the return term that any of the effects of
the defendant were in their hands. The validity of the
garnishment sued out after the return term depending upon
the jurisdiction of the court having been acquired be-
fore the return term, the court was without authority to
enter judgment on the answer of such garnishee, until it ap-
peared from the answer of the other garnishees whether
such jurisdiction had been acquired.
7. An amendment was offered to the motion to set aside
the judgment, in which other grounds were added to the
motion. Objection was made to this amendment, on the
ground that it added a new cause of action. We do not
think the law prohibiting the addition of new causes of
action by amendment has application to a proceeding of
this character, and the court did not err in allowing the
amendment.
Judgment affirmed.
All the justices concur, except Fish, C. J., absent
Judgments Depending for Their Validity on an attachment of prop-
erty are considered in the note to Miller v. White, 76 Am. St. Eep.
800.
Am. St. E«p., VoL 115— «
114 American State Repoets, Vol. 115. [Georgia,
WALPERT V. BOHAN.
[326 Ga. 532, 55 S. E. 181.]
INNKEEPEB, Liability of When He Also Maintains a Bath-
hOTise. — If one keeps an inn, and, separately therefrom, a bathhouse,
where persons bathing in the sea change their garments and leave
their clothes, be is not liable as an innkeeper for property stolen from
the bathhouse, (p. 116.)
BATHHOUSES and Bathing Establishments, Liability of
Keepers of. — The proprietor of a bathing establishment who receives
from his patrons a sum demanded for the privikge of the bath and
assumes the custody of their wearing apparel while they are bathing,
is a voluntary custodian for profit, and bound to exercise due care
to guard against the loss of theft by others having access to his
establishment by his permission. He is a bailee for hire and bound
to exercise ordinary care, and liable for his failure to do so. (p. 117.)
Alexander & Edwards, for the plaintiflP.
O 'Connor, 0 'Byrne & Hartridge, for the defendant.
532 LUMPKIN, J. Mrs. Walpert brought suit against
William Bohan, alleging in substance as follows : Bohan was
a resident of Chatham county, and was during the month
of May, 1905, the proprietor and owner of a certain sea-
shore inn called " Bohan 's Pavillion," or " Bohan 's Hotel,"
located on the island of Great Tybee, and was "at that
time engaged at said place in the business of an innkeeper.
In connection with said inn, and as a part of said inn, and
as a part of his said business at said place as an innkeeper,
said Bohan maintained a certain bathhouse, where he is and
was at that time accustomed to furnish for rent or hire
to such of his guests and the general public who desired
to enjoy the pleasure and benefits of sea-bathing, bath-
rooms, bathing suits, and other bathing accessories." On
May 11, 1905, ''petitioner, along with several friends, de-
siring to enjoy the entertainment of said inn, and the
pleasure and advantages of sea-bathing, paid to the said
William M. Bohan the charges or hire therefor, and be-
came and were the guests of said inn and of the said Will-
iam M. Bohan as such innkeeper, and as such were guests
and were received as such therein and thereat; that in said
bathhouse, a part of said inn, as aforesaid, is a certain
public room or office in charge of a keeper or attendant as
the servant, agent, and direct representative of the said
March, 1906.] Walpert v. Bohan. 115
William Bohan, .... who furnishes to guests, for hire,
such bathing-rooms, towels, etc., as is required for sea-
bathing, and assigns then to bathrooms ^^^ in said inn or
bathhouse; and receives from said guests for safekeeping,
while they are bathing in the sea and not occupying their
said rooms, such articles, jewelry, money and other valu-
ables as they may have, so that the same shall not be lost or
stolen from their bathrooms while they are absent there-
from, and that posted in a conspicuous place and in full
view of the public is a large printed or written sign or no-
tice requiring the guests of said inn and bathhouse to de-
posit with the keeper or custodian in charge of said office
all moneys, jewelry and other articles of value for safe-
keeping, and warning them that upon failure to comply with
this requirement the said innkeeper would be relieved of all
liability for any losses sustained through theft, or other-
wise." Petitioner, after having inquired of defendant's
agent whether a deposit of her valuables would be safe, and
being assured that they would be, and after having shown
the same to such attendant and apprised him of their value,
deposited with such agent of defendant a hand-bag con-
taining a small sum of money and a diamond brooch and
ring of the value of seven hundred dollars, receiving a check
therefor. This deposit of valuables was made along with
those of one of petitioner's party of friends accompanying
her, and a single check issued for the property of both.
After returning from her bath, Robinson, "acting for him-
self and petitioner," presented the check and received the
hand-bag, when upon examination it was found that "peti-
tioner's hand-bag or purse had been entered" and the dia-
mond brooch and ring taken therefrom. It was opened in
full view of the attendant in charge, and the loss immedi-
ately reported to this agent of defendant. Petitioner de-
manded of defendant compensation for her loss, and the de-
fendant refused to pay the same. Petitioner's loss was not
occasioned by any fault or neglect on her part, but oc-
curred through the neglect "of the said William M. Bohan,
innkeeper, his servants, agents, employes, and representa-
tives, as aforesaid." The petition prayed for a judgment
for seven hundred dollars and costs, and for process. The
defendant filed a general demurrer, which was sustained,
and the plaintiff excepted.
116 American State Reports, Vol. 115. [Georgia,
If one keeps an inn, and also, separate from the inn, keeps
a bathhouse where persons bathing in the sea change their
garments '^^ and leave their clothes, he is not chargeable
as an innkeeper for property stolen from the bathhouse:
Minor v. Staples, 71 Me. 316, 36 Am. Rep. 318. In the opin-
ion in this case it is said: "We are not now speaking of
bathrooms attached to or kept within hotels, but of sepa-
rate buildings, erected upon the seashore, and used, not as
bathrooms, but as places in which those who bathe in the
sea change their garments and leave their clothes and other
valuables while so bathing." In Schouler's Bailments and
Carriers, third edition, section 280, it is said: "One who
keeps a public house may, not inconsistently, carry on a
restaurant, cater to a select company, serve liquors at a bar,
keep a shaving-saloon, or permit outside parties to get up
a ball on his premises ; and, as to strangers who avail them-
selves of such extraneous service, he is no innkeeper at all. ' '
It is true that the declaration alleges in general cerms that
in connection with the inn, and as a part of it, and as a
part of his business at that place, the defendant maintained
a certain bathhouse where he was accustomed, for rent or
hire, to furnish to such of his guests and the general public
as desired to enjoy the pleasure and benefits of sea-bathing,
bathrooms, bathing suits, and other bathing accessories.
It does not appear, however, that the bathhouse was physi-
cally connected with the inn, or was for the use of guests
as such, or that becoming a guest at the inn entitled one to
use the bathhouse, or that conducting it was an actual part
of innkeeping; but apparently it was a separate and dis-
tinct building on the seashore, where the general public,
whether guests of the inn or not, could for hire obtain
dressing-rooms and other accessories of sea-bathing. We do
not think this was sufficient to show that the relation of inn-
keeper and guest existed between the proprietor of the bath-
house and those who went there for the purpose of bath-
ing in the sea. Although the proprietor of the bathhouse
may have also been an innkeeper, operating the bathhouse,
it did not thereby become a part of the innkeeping. When
the facts set forth show that the defendant, in reference to
the transaction under consideration, is not an innkeeper,
merely to call him by that name in the pleading does not
determine his liability as that of an innkeeper. Ancient
March, 1906.] Walpert v. Bohan. 117
common-law definitions of an inn are not altogether ap-
plicable to modem conditions and methods of travel and
innkeeping. Thus Lord Bacon defines an innkeeper to be
"a person who makes it his business to entertain travelers
and passengers, and to provide lodgings ^^'^ and necessaries
for them and their horses and attendants": Bacon's Abridg-
ment, title "Inn and Innkeepers," B. Few now travel with
horses and attendants ; nor is the entertainment of transient
customers confined to actual travelers. A very good defini-
tion of an innkeeper at present is, "one who regularly keeps
open a public house for lodging and entertaining transient
comers, on the general expectation of his suitable recom-
pense": Schouler on Bailments and Carriers, sees. 279, 303.
If the proprietor of a hotel should also furnish, for hire by
his guests and others, boats for rowing and sailing on a
river or lake, or should maintain a public racecourse or
golf-links or a baseball park, where all could enter by pay-
ing an admission fee, these things would evidently not be
a necessary part of keeping an inn, although they might
furnish attractive sports which would give pleasure to
guests and others: See Bonner v. Welborn, 7 Ga. 296; 16
Am. & Eng. Ency of Law, 2d ed., 509.
2, 3. While this is true, we think the presiding judge
erred in dismissing the petition on general demurrer. In
Bird V. Everard, 4 Misc. Rep. (N. Y.) 104, it was held that
the proprietor of a bathing establishment who receives from
his patrons the sum demanded for the privilege of a bath,
and assumes the custody of their wearing apparel while the
latter are enjoying the privileges thereof, becomes a volun-
tary custodian of the patrons' apparel for profit, and is
bound to exercise due care to guard against loss or theft
by others having access to his establishment with his permis-
sion; and for any loss or theft which could have been pre-
vented by the exercise of such care, said proprietor is an-
swerable in damages: See, also, Bunnell v. Stern, 122 N. Y.
539, 19 Am. St. Rep. 519, 25 N. E. 910, 10 L. R. A. 481;
Tombler v. Koeling, 60 Ark. 62, 46 Am. St. Rep. 146, 28 S.
W. 795, 27 L. R. A. 502; Dilberto v. Harris, 95 Ga. 571, 23
S. E. 112; 7 Am. & Eng. Ency. of Law, 2d ed., 321, 322, and
notes. The proprietor of such an establishment, who re-
ceives the apparel or valuables of a bather for safekeeping
while the customer is bathing, and receives a consideration
118 American State Reports, Vol. 115, [Georgia,
for this and the use of the bathroom or dressing-room and
accessories to the bath, being a bailee for hire, is bound to
use ordinary care, and is liable for a failure to do so. The
declaration sufficiently alleged negligence on the part of
the defendant or his agent, and was not subject to a general
demurrer.
Judgment reversed.
All the justices concur, except Fish, C. J., absent.
The Liahility of InnJceepers for injury to or loss of the property of
their guests is considered in the note to Johnson v. Chadburn Finance,
99 Am. St. Rep. 577.
The Liability of the Keeper of a Bathhouse for the property of his
customer is considered in Tombler v. Koelling, 60 Ark. 62, 46 Am. St.
Bep. 146.
BRIDGER V. EXCHANGE BANK.
[126 Ga. 821, 56 S. E. 97.]
PRACTICE. — ^Whether a Court Will Keopen a Canse for the
introduction of further evidence after both parties have announced
the evidence closed, and while the motion for the direction of the
verdict is being argued, rests in the discretion of the court, (p. 120.)
PRACTICE — Partial Reopening of a Cause — The Court may
Permit the Reopening of a Cause to allow evidence to* be offered on
a particular point without being compelled to reopen it for the gen-
eral introduction of evidence, (p. 121.)
NOTICE. — ^Possession of Land is Notice of whatever right or
title the occupant has. (p. 121.)
LIS PENDENS Affects not Only a Purchaser from One of the
Parties to the suit, but also those who hold under him. (p. 123.)
LIS PENDENS Applies to Purchasers from the Plaintiff as
well as to purchasers from the defendant, (p. 123.)
LIS PENDENS Applies to a Judgment Creditor whose rights
as an encumbrancer are acquired during the existence of the lis
pendens; and also to the purfehaser of the property at a judicial
sale had in execution of the judgment in favor of a person whose
interests in the property to be sold are affected by the lis pendens,
(p. 123.)
LIS PENDENS Begins in Georgia from the filing and docket-
ing of the petition, if followed by the issuance and service of process
and due prosecution, (p. 124.)
LIS PENDENS — Cross-complaint. — Relative to an affirmative
cross-action or cross-complaint, the defendant occupies the position of
a plaintiff, and a lis pendens as to the cross-complaint operates
against a purchaser from the plaintiff only from the time it is filed,
(p. 126.) j<.
Oct. 1906.] Bridgeb v. Exchange Bank. 119
LIS PENDENS — Laches. — Either the plaintiff or the defendant
may lose the benefit of the pendency of lis pendens by failure on his
part to prosecute with due diligence, (p. 128.)
NOTICE. — The Continued Possession of the Grantor After the
Execution of a Conveyance gives the world notice of his rights, as
where his conveyance was in effect given as security for indebtedness
and he took a bond for a reconveyance on its payment, (p. 130.)
EXECUTION SALE of Property Conveyed to Secure Indebted-
ness.— If one makes a promissory note and executes a conveyance
to secure its payment, and an execution against his grantee is levied
on the property, the grantor remaining in possession, the purchaser
under such execution takes only the rights of such grantee, (p.
130.)
EXECUTION, Burden of Proof in an Attack Upon. — One who
alleges that a levy is void for excessiveness carries the burden of
sustaining his contention, (p. 130.)
EXECUTION. — ^A Levy is not Necessarily Excessive because
the value of the land is considerably more than the amount of the
execution, (p. 130.)
EXECUTION — Excessiveness of Levy, When a Question for the
Jury. — If the property levied upon and sold under execution was
worth considerably more than the amount due, and it was reasonably
capable of subdivision, and fronted fifty-five feet on one street
and ran back two hundred feet to an alley, giving an outlet to an-
other street, and there were houses fronting on both the street
and the alley, separately numbered and separately rented, it is a
question for the jury whether the levy was excessive and whether
the property should have been divided for the purpose of sale. (pp.
130, 131.)*
Petition filed Auo^nst 15, 1893, and served on the eigh-
teenth day of the same month by H. L. Woodward against
J. C. Bridger, praying for a judgment declaring a special
lien against certain real property, on the ground that the
same had been conveyed by Bridger, as trustee for his wife
and children, for the purpose of securing the payment of
certain indebtedness. The defendant pleaded that the in-
debtedness held by the plaintiff was accommodation paper,
wholly without consideration, and was the individual obli-
jjation of Bridger, all of which was known to the plaintiff
before he received it. The defendant alleged that the con-
veyance to plaintiff was a cloud on the title of the defend-
ant and his cestui que trust.
On October 27, 1905, and after the filing of the defend-
ant's answer, the Exchange Bank of Atlanta was permitted
to intervene. By its complaint in intervention it alleged
that on September 27, 1892, Bridger, as trustee for his wife
and children, conveyed to plaintiff the property described
in his petition under a conveyance duly recorded, and the
plaintiff by a conveyance recorded May 30, 1895, conveyed
120 American State Reports, Vol. 115. [Georgia,
his interest to Emmet B. Woodward; that the bank levied
upon and sold under execution the interest of Emmet B.
Woodward in the property, and received a sheriff's deed
therefor, having no notice that he was not the absolute
owner of the property, although the present suit had been
previously commenced; that no pleading had been filed in
the present suit after its commencement until a few days
before the filing of the petition for intervention, when the
defendant filed his amended answer and cross-bill. The
bank prayed that the cross-bill be stricken out and relief
thereunder be denied, and that the conveyance made by the
defendant to H. L. Woodward be declared good and valid.
Bridger, as trustee, answered the complaint of intervention,
alleging that neither Emmet B. nor H. L. Woodward had ever
had possession of the land, and that Emmet B. Woodward
when he took his conveyance had full knowledge of the na-
ture of the transaction between the defendants and H. L.
Woodward. The court directed a verdict against the de-
fendant and in favor of the bank upon the issues as to title,
and the defendant appealed.
W. H. Terrell, for the plaintiff in error.
L. Z. Rosser, J. H. Porter and Dorsey, Btewster & Howell,
contra.
824 LUMPKIN, J. 1, 2. After both parties had an-
nounced the evidence closed, and while a motion for the di-
rection of a verdict was being argued, it rested in the dis-
cretion of the court to determine whether he would reopen
the case for the introduction of further evidence : Walker
V. Walker, 14 Ga. 242; Blaekman v. State, 80 Ga. 785, 791.
7 S. E. 626 ; Orr v. Garabold, 85 Ga. 373, 11 S. E. 778 ; Powell
V. State, 101 Ga. 9, 65 Am. St. Rep. 277, 29 S. E. 309; Green.
V. State, 119 Ga. 120, 45 S. E. 990; Maddox v. Cole, 81
Ga. 325, 6 S. E. 601; Cushman v. Coleman, 92 Ga. 772, 19
S. E. 46; Georgia R. & B. Co. v. Churchill, 113 Ga. 12, 38
S. E. 336; Watson v. Barnes, 125 Ga. 733, 54 S. E. 723.
This was not an application seeking to save a nonsuit by
supplying an omitted link in the chain of evidence and thus
causing the case to proceed to a termination of the litiga-
tion, but a desire to add evidence to avoid the direction of
a verdict, which addition would probably require a general
reopening of the trial on the evidence. ^^^ No good reason
Oct. 1906.] Bridgeb v. Exchange Bank. 121
was shown why the additional evidence was not offered be-
fore. On application the court did reopen the case to al-
low evidence to be introduced on a particular point; but,
by having done so, he was not compelled to throw the case
open broadly for the general introduction of evidence.
Even as to a motion to reopen the case after a motion for
nonsuit has been made and argued, and especially after the
judge has announced his decision, the rule does not seem
to be entirely arbitrary and regardless of the circumstances :
Cushman v. Coleman, 92 Ga. 772, 19 S. E. 46; Brooks v.
Lowe, 122 Ga. 358, 50 S. E. 146 (citing McColgan v. Mc-
Kay, 25 Ga. 631, as to the general practice). But that point
is not directly before us.
3, 4. The defendant (plaintiff in the cross-petition) testi-
fied that as trustee he was in continuous possession of the
property, through his tenants, except that after the sheriff's
sale the bank obtained and held possession for a time, when
he again took possession. If this be accepted as true,
which it must be on a motion to direct a verdict against
him, so far as the matter of notice by possession is involved,
the ease falls within the general rule declared in the Civil
Code, section 3931, that "possession of land is notice of
whatever right or title the occupant has." This has been
held to apply to possession under a bond for title (Finch
V. Beal, 68 Ga. 594; Jordan v. Rhodes, 24 Ga. 480), and gen-
erally to any right or title of the occupant: Neal v. Jones,
100 Ga. 765, 28 S. E. 427; Baldwin v. Sherwood, 117 Ga.
827, 45 S. E. 216. This case is not controlled by that of
Johnson v. Equitable Securities Co., 114 Ga. 604, 40 S. E.
787, 56 L. R. A. 933. It was there held that a bona fide
purchaser at sheriff's sale, who has paid the purchase
money without notice of a secret equity, will be protected.
On page 608 it was said that "the purchaser at such sale
would, in our opinion, occupy the same position as the pur-
chaser at a private sale, so far as any secret equity held by
some one in the property was concerned, if such purchaser
bought the property and paid his money without notice of
such secret equity." It was not decided that if he bought
with notice he would obtain a good title, nor was the ques-
tion of notice by po.ssession discussed. In Malette v.
Wright, 120 Ga. 735, 48 S. E. 229, it was held that where
one sold property and made a fee simple deed thereto, but
122 American State Keports, Vol. 115. [Georgia,
by mistake included in the deed certain land not intended
to be included, and such deed was duly recorded, his re-
maining in possession would not give notice to the world of
the mistake, so as to affect bona fide purchasers or those oc-
cupying a like *^® situation. This was the only point de-
cided. The decision never intended to abrogate the gen-
eral rule, but merely held that the facts of that case did
not fall within it. What was said in the opinion must be
construed in the light of the question involved.
Although the bond for title was made to Bridger as an
individual, the trust estate had an interest, which could
not be thus destroyed. If he had a right to make the con-
veyance and take the bond for title, the latter in his hands
would be affected with an equity in favor of the trust.
That possession puts a prospective purchaser on inquiry:
See Walker v. Neil, 117 Ga. 733, 45 S. E. 387; Austin v.
Southern Home Bldg. etc. Assn., 122 Ga. 439, 50 S. E. 382.
5-10. Two different theories have been advanced as the
basis of the doctrine of lis pendens. Numerous courts and
text-writers state that it is referable to the doctrine of con-
structive notice, and say that a pending suit concerning
property operates as notice to the world, and that a pur-
chaser of the property under one of the parties is bound by
the result of the litigation, because he is charged with such
notice. The other view is thus stated in Bellamy v. Sabine,
1 De Gex & J. 566: "The doctrine as to the effect of lis
pendens on the title of an alienee is not founded on any prin-
ciples of courts of equity with regard to notice, but on the
ground that it is necessary to the administration of justice
that the decision of the court in a suit should be binding,
not only on the litigant parties, but on those who derive
title from them pendente lite, whether with notice of the
suit or not." On page 584 Lord Justice Turner makes
this clear and concise statement: "It is, as I think, a doctrine
common to the courts both of law and of equity, and rests,
as I apprehend, upon this foundation — that it would plainly
be impossible that any action or suit could be brought to a
successful termination, if alienations pendente lite were per-
mitted to prevail. The plaintiff would be liable in every
case to be defeated by the defendant's alienating before
the judgment or decree, and would be driven to commence
his proceedings de novo, subject again to be defeated by
Oct. 1906.] Bkidger v. Exchange Bank. 123
the same course of proceeding." The latter theory appears
to have been adopted by most of the recent decisions: 2
Pomeroy's Equity Jurisprudence, sec. 632, and notes.
Whichever opinion may be accepted, it will not affect the
well-settled rules concerning lis pendens, although if the
second be upheld it may "prevent the extension ^^"^ of the
doctrine, and restrict its further application to particular
persons and conditions": 2 Pomeroy's Equity Jurispru-
dence, sec. 632, and notes.
An application of the doctrine to the present case in-
volves a decision of several points. Not only is a purchaser
from one of the parties to the suit affected, but also those
who hold under him: Beardsley v. Hilson, 94 Ga. 50, 20
S. E. 272. It applies not merely to purchasers from the
defendant, but also to purchasers from the plaintiff: Ben-
nett on Lis Pendens, 287, sec. 239. "The rule has been ap-
plied with steadiness to all cases of transfer during the
progress of a cause, notwithstanding the hardship of in-
dividual cases, from considerations of public policy and con-
venience. Suits would be interminable, if the rights of
parties could be disturbed by mesne conveyances; and a
necessity imposed for the introduction of other parties
upon the record": Secombe v. Steele, 61 U. S. 94, 15 L.
ed. 833; Fash v. Ravesies, 32 Ala. 451; Berry v. Whitaker,
58 Me. 422; Cole v. Winnipisseogee Lake etc. Co., 54
N. H. 242; Olson v. Leibpke, 110 Iowa, 594, 80 Am. St.
Rep. 327, 81 N. W. 801; Welton v. Cook, 61 Cal. 481;
Borrowscale v. Tuttle, 5 Allen, 377; Garth v. Ward, 2
Atk. 174; Bellamy v. Sabine, 1 De Gex & J. 566; 2 Pom-
eroy's Equity Jurisprudence, 3d ed., sec. 633; Story's
Equity Pleading, 10th ed., sec. 156. The rule applies to a
judgment creditor whose rights as an encumbrancer are ac-
quired during the existence of the lis pendens; and also to
a purchaser of the property at a judicial sale had in ex-
ecution of a judgment in favor of a person whose inter-
ests in the property thus sold are affected by the lis pen-
dens: 21 Am. & Eng. Ency. of Law, 645, 646; Carmichael
V. Foster, 69 Ga. 372; Bennett on Lis Pendens, p. 242, sec.
181; Secombe v. Steele, 61 U. S. (20 How.) 94, 15 L. ed.
833; Allen v. Halliday, 28 Fed. 261; Cotton v. Dacey, 61
Fed. 481; Freeman on Judgments, sec. 205; Hope v. Blair,
105 Mo. 85, 24 Am. St. Rep. 366, 16 S. W. 595; Watson v.
124 American State Reports, Vol. 115. [Georgia,
Wilson, 2 Dana, 406, 26 Am. Dec. 459; Ettenborough v.
Bishop, 26 N. J. Eq. 262 ; MeCauley v. Rogers, 104 111. 578.
When does the lis pendens begin? In England and in
some states it has been held to be upon service of process
or subpoena. In this state a pending suit is notice to the
world from the filing and docketing, if followed by the is-
suance and service of process and due prosecution: Civ.
Code, sec. 3936; Weems v. Harold, 75 Ga. 866; Cherry v.
North & South R. Co., 65 Ga. 633. What, then, as to a
cross-action or answer in the nature of a cross-bill seeking
*** affirmative relief? Does it relate back to the begin-
ning of the suit and affect a purchaser from the plaintiff
from that time, or does it operate as a lis pendens from the
date of its filing? Two different opinions are entertained
on this subject. The leading case on one side is Hall Lum-
ber Co. V. Gustin, 54 Mich. 624, 20 N. W. 616, in which that
distinguished jurist, Judge Cooley, delivered the decision.
The seventh headnote reads as follows: "A suit and cross-
suit constitute one cause, and notice of the suit is notice
of the cross-suit also. So held in the case of a lis pendens
filed in an original foreclosure suit, but not in a cross-
suit for foreclosure ; it was constructive notice to all the
defendants." Strictly speaking, the exact matter before
the court was this: A statute required (as in many states
and now in England) a notice of a lis pendens to be filed
in order to be effectual. On the bringing of a foreclosure
suit the notice was filed. Later a cros^-bill was filed, but
no notice under the statute was filed as to it. The ques-
tion was whether it was necessary to file such a notice as
to the cross-bill, or whether that filed at the commence-
ment of the suit covered the whole case. It would be per-
haps too narrow a view to treat this decision as merely a
construction of the Michigan statute; as the reasoning goes
to the point of holding that "notice of the suit was notice
of all that properly belonged to it," including the cross-
bill as a mode of defense. In Bennett on Lis Pendens, sec-
tion 331 (pages 379, 380), in stating this as a rule it is said:
"That is to say, a lis pendens will exist as between all par-
ties to the suit. It might be held otherwise as to third par-
ties having no knowledge of the cross-claim." The only
case referred to in this footnote is the Hall case (54 Mich.
624, 20 N. W. 616), and the criticism was evidently meant
Oct. 1906.] Bridger v. Exchange Bank. 125
to apply to it: See, also, Henderson v. Wanamaker, 79 Fed.
736, 25 C. C. A. 181 (where, however, the answer of the
defendant had been filed) ; Kinney v. Consolidated Virginia
Min. Co., 4 Saw. 382, Fed. Cas. No. 7827. The adverse
view Is thus clearly stated in 2 Pomeroy's Equity Juris-
prudence (third edition, section 634) : **I would remark, in
passing, that while the general doctrine of notice by lis
pendens and the foregoing special rules have ordinarily
been applied to real property described by the plaintiff in
his bill of complaint, they should, upon principle, apply
with equal force to the 'counterclaims' and 'cross-com-
plaints' authorized by the reformed procedure, by which
the defendant alleges some equitable interest or right, and
demands some affirmative equitable relief. In such
^^^ pleadings the defendant becomes the actor, and is to all
intents and purposes a plaintiff." This remark is quoted
approvingly, though the point is not decided, in Walker
v. Goldsmith, 14 Or. 125, 12 Pac. 537.
It appears to us that the proper determination of the
mooted question depends largely on what is the extent of
the lis pendens arising on the original suit. Or, if the
doctrine of notice be adopted, of what does the original
suit give notice to one dealing with the property. Mr.
Pomeroy says (2.' Pomeroy's Equity Jurisprudence, 3d ed.,
sec, 634): "Lis pendens is notice of everything averred in
the pleadings pertinent to the issue or to the relief sought,
and of the contents of exhibits filed and proved The
notice arising from a pending suit does not affect property
not embraced within the descriptions of the pleading; nor
does its operation extend beyond the prayer for relief."
"Averred" in what pleadings — in those filed by the com-
plainant before the time of the purchase (together with
certain amendments thereto, as will be seen below) and in
the denials or defensive pleadings of the defendant, or in
possible affirmative pleadings which may be thereafter filed
by the defendant, not merely combating the plaintiff's case,
but seeking affirmative relief? Generally, amendments to
a bill or petition relate back to the filing of such bill or peti-
tion. It has been held that a bill so defective in its aver-
ments as not to create a lis pendens may be subsequently
cured by amendment, but the lis pendens will commence
at the time of filing the amendment, if the defendant has
12S American State Reports, Vol, 115. [Georgia,
been served with process: Norris v. He, 152 111. 190, 43 Am.
St. Rep. 233, 38 N. E. 762. See, also, Miller v. Sherry, 2
Wall. 237, 17 h. ed. 287 (where the defect was for want
of description of the property) ; Worthman v. Boyd, 66
Tex. 401, 1 S. W. 109 (where an original suit to cancel a
deed was amended so as affirm the deed and enforce a
grantor's lien) ; Mansur & Tebbetts I. Co. v. Beer, 19
Tex. Civ. App. 311, 45 S..W. 972; Letcher v. Reese, 24 Tex.
Civ. App. 537, 60 S. W. 256 ; Stone v. Connelly, 58 Ky. 652,
71 Am. Dec. 499. Statements in some of the text-books
imply that the continuity of the suit may be broken by a
simple ameudment, but this seems not to be well founded
where the parties are the same, the property to be affected
is the same, and the general purpose and object is the
same: Turner v. Houpt, 53 N. J. Eq. 526, 33 Atl. 28. It
would appear, therefore, that when a suit is filed by a plain-
tiff, anyone taking from the defendant a conveyance of the
property involved takes with notice of, or subject to, the
plaintiff's action as it stands, and that mere ordinary *^** or
amplifying amendments which do not change the identity
of the suit or affect the general purpose or object, or create
a new lis pendens, will relate back to the date of the filing
of the original petition. So, also, if one purchases from the
plaintiff, the suit operates as a lis pendens in respect to
the property described and the relief prayed; and the pur-
chaser may fairly anticipate that the defendant will resist
the action, and that he will set up any appropriate defen-
sive matter thereto. But he is not bound to anticipate that
the defendant will bring a cross-action against the plaintiff
in respect to the property or will file an affirmative cross-
complaint against the plaintiff, setting up some equitable
right and demanding affirmative equitable relief in regard
thereto. Relatively to such affirmative cross-action or cross-
complaint the defendant occupies the position of a plain-
tiff, and the lis pendens as to such cross-complaint operates
as against a purchaser from the plaintiff only from the time
when it is filed. It is evident that if the defendant had to
file a separate action against the plaintiff in order to set
up the affirmative claim and pray for relief, it would only
operate as a lis pendens from the time when it was brought ;
and where, under our uniform procedure act, the plaintiff
or defendant may assert all of his rights, legal or equi-
Oct. 1906.] Bridger v. Exchange Bank. 127
table, in respect to the subject matter of the suit in one
proceeding, the same reason would seem to apply to a cross-
complaint or affirmative equitable plea praying relief. Un-
der the very liberal system of amending which prevails in
this state, the plaintiff may bring an action of complaint
for land, which by amendment may be changed into an ac-
tion seeking equitable relief in regard to the land; and in
an equitable action, what would have required a supple-
mental bill in England can be brought in by amendment in
Georgia: Civ. Code, sec. 4969. The defendant may answer
the plaintiff's suit by denying title; and subsequently he
may amend by alleging affirmative equitable rights on his
part in respect to the property and praying relief. Indeed,
it is quite common for a suit to begin as an apparently
simple action at law, and terminate as a most complex ac-
tion to settle equities and cross-equities.
If the rule which we have suggested above is not a cor-
rect one, and if a person who purchases from a plaintiff in
a pending lawsuit were bound to anticipate all possible
cross-complaints, which might greatly broaden the scope of
the action or alter the nature of **^* the relief sought, and
if he were affected by the lis pendens as to all such possible
cross-complaints before they were filed, it would be an ex-
ceedingly dangerous matter to purchase property at all from
any person who might happen to be either plaintiff or de-
fendant in any sort of action. It is true that the defendant
may often show by way of defense substantially the same
matters as those on which his affirmative equitable plea
would rest; and if one who purchases from the plaintiff
after suit has been brought and while the defendant is en-
titled to plead, but before he has done so, is bound to an-
ticipate that the latter will deny the plaintiff's right of
recovery, and to take subject to his doing so, and to the
result of the action, the difference in effect between this
and his taking subject to a cross-complaint based on like
facts may not appear to be great. But the distinction be-
tween mere defensive action and an effort to obtain affirma-
tive relief is well recognized, even where similar facts are
involved in the two : English v. Thorn, 96 Ga. 557, 23 S. E.
843. In Hart v. Hayden, 76 Ky. 346, it was held that
"When a mortgagee has sued to foreclose his mortgage, and
made another mortgagee a defendant, the action of the lat-
128 American State Reports, Vol. 115. [Georgia,
ter is not a lis pendens until he has filed his cross-petition
and has process issued." In Garver v. Graham, 6 Kan. App.
344, 51 Pac. 812, where a husband brought an action of
divorce, and his wife filed an answer and cross-petition,
denying the grounds alleged by him, setting up grounds for
divorce in her favor, that she was the owner of certain
lands, describing them, and that the husband was the owner
of certain other real estate and personal property, describ-
ing it, and praying that a divorce be granted her, that the
real estate then in the name of her husband (describing it)
might be decreed to her, that alimony should be granted,
and that all of the property both real and personal should
be appropriated to satisfy the decree, it was held that the
answer and cross-petition brought the property described
within the jurisdiction of the court, and that a person subse-
quently taking a mortgage from the husband was bound by
the judgment and decree rendered: See, also, Mansur &
Tebbetts v. Beer & Co., 19 Tex. Civ. App. 311, 45 S. W. 972.
In Tinsley v. Rice, 105 Ga. 285, 31 S. E. 174, it was said :
"The protection afforded to a plaintiff under the doctrine
that lis pendens is notice to all the world may be lost by a
failure on his part to prosecute his action with due dili-
gence": See, also. Civ. Code, sec. 3936. This ruling was in
favor of one against whom the doctrine of lis pendens
*^^ would otherwise operate for the benefit of the plain-
tiff. A similar rule would naturally apply as to the defend-
ant's cross-complaint. The defendant cannot be charged
with laches in not pressing the plaintiff's suit for him, but
may be charged with laches for failing to duly press his
cross-complaint. The bank holds under the plaintiff. It
could hardly claim that the defendant lost whatever right
existed in his favor under the plaintiff's suit, by virtue of
the doctrine of lis pendens prior to the conveyances under
which the bank holds, because the plaintiff failed to prose-
cute with diligence. Certainly the plaintiff could not suc-
cessfully claim that, by reason of his own laches in prose-
cuting his action against the defendant, the latter should
suffer. Can one who purchases under the plaintiff and, by
intervention, becomes himself a party plaintiff, do so, if the
defendant be not in laches? What duty was on him, before
he filed his cross-complaint, to press the plaintiff's action?
In Fox V. Reeder, 28 Ohio St. 181, 22 Am. Rep. 370, it was
Oct. 1906.] Bridger v. Exchange Bank. 129
said: "The rule itself, though undoubted, will not be ap-
plied where the party has been negligent to the injury of
innocent parties. As Sugden says in an early edition of
his work, the application of the rule may rest upon the
question whether or not the party seeking its benefit has
been 'guilty of laches.' " Different courts have used differ-
ent expressions in describing the negligence or failure to
prosecute duly which may cause a loss of the protection
afforded under the doctrine of lis pendens. Some have re-
ferred to it as negligence, some as gross negligence, some as
a failure to duly prosecute, some as unusual and unreason-
able or inexcusable negligence in prosecuting, and other
expressions have been employed. Mere lapse of time in
which the party who ought to prosecute an action has
failed to do so, though it may be for a considerable period,
is not conclusive, but may be explained by showing a rea-
sonable excuse for the delay: Wickliffe's Exr. v. Breckin-
ridge's Heirs, 64 Ky. 427; Watson v. Wilson, 32 Ky. 406,
26 Am. Dec. 459 ; Hayes v. Nourse, 114 N. Y. 595, 11 Am.
St. Rep. 700, 22 N. E. 40. In Bennett on Lis Pendens, sec-
tion 109, page 179, it is said: "The ground upon which to
place the invalidity of lis pendens for a failure to take
action in pending suits, for want of 'full prosecution,' as
provided in Lord Bacon's rule, is not, as in many cases
seems to be supposed, negligence merely as such, but es-
toppel as warranted by such negligence, and other con-
duct on the part of those seeking the enforcement of lis
®^ pendens." And this is substantially quoted by Mr.
Justice Little in Tinsley v. Rice, 105 Ga. 285, 31 S. E. 174.
Referring to the interposition by courts of equity of a bar on
account of laches, it has been said that this power as exer-
cised by courts of equity is well symbolized by the emblem
of Time, "who is depicted as carrying a scythe and an
hour-glass, and that while with one he cuts down the evi-
dence which might protect innocence, with the other he
metes out the period when innocence can no longer be
assailed": Graff v. Portland Town etc. Co., 12 Colo. App.
106, 54 Pac. 854.
Counsel for plaintiff in error urged that an intervener
took the case where he found it: Charleston etc. R. Co. v.
Pope, 122 Ga. 577, 50 S. E. 374. In that case it was held
that an intervener "could not be heard to make objections
Am. St. Rep., Vol. 115—9
130 American State Reports, Vol. 115. [Georgia,
to the pleadings or process which the defendant vouching
him into court did not urge." He would not be prevented,
however, from contesting rights asserted antagonistic to
his own.
11. If Bridger as trustee wrongfully made a conveyance
to secure his individual indebtedness and took a bond for
title from his grantee to himself as an individual, the equi-
table interest would be in him as trustee, and his holding
would be for the benefit of the trust estate: Bourquin v.
Bourquin, 120 Ga. 115, 47 S. E. 639. Aside from this, if one
makes a promissory note and executes a deed to secure it,
taking a bond to reconvey upon payment of the debt and
remaining in possession; and if an execution against the
grantee in the deed is levied on the property, what does
the purchaser at such a sale acquire? Evidently the inter-
est of the defendant in execution, whatever that may be.
The continued possession of Bridger as trustee, as we have
seen, gave notice to the world of his rights ; and a purchaser
under a sale against the grantee would acquire only the
rights which the latter might have : Parrott v. Baker, 82
Ga. 364, 9 S. E. 1068 ; Wilkerson v. Burr, 10 Ga. 117 ; Leitch
v. May, 98 Ga. 714, 27 S. E. 151. If the grantee in the
security deed made a conveyance to another, the second
grantee could acquire no more relatively to the debtor in
possession with bond for title than the first grantee had to
convey; and if the sheriff's sale was under a judgment
against the second grantee, the purchaser would acquire no
more than if such second grantee had made a deed to him.
12, 13. One who alleges that a levy is void for excessive-
ness carries the burden of sustaining his contention. It
does not follow ^^^ as matter of course that, because the
value of land levied on is considerably more than the amount
of the execution, the levy is void. The property may be in-
capable of subdivision, or such as can only be levied on its
entirety: Forbes v. Hall, 102 Ga. 47, 66 Am. St. Rep. 152,
28 S. E. 915; Roser v. Georgia Loan etc. Co., 118 Ga. 181,
44 S. E. 994. In the present case, however, we think that
there was enough evidence to require the submission to the
jury of the question whether the property was reasonably
capable of subdivision, and whether the levy was excessive.
It appeared that the lot fronted fifty-five feet on a street,
and extended back two hundred feet to an alley, fifteen or
Oct. 1906.] Bridger v. Exchange Bank. 131
twenty feet wide, which gave an outlet to another street
only a short distance away, that there were houses on the
lot fronting on the public street, separately numbered, and
that on the rear of the lot there was one frame house con-
taining six rooms, and two containing two rooms. All of
them were dwelling-houses, and they were rented sepa-
rately. Bridger testified that the entire property was worth
at the time of the sale fifteen thousand dollars, and that
one of the two mortgages upon it had been paid off, leaving
the other outstanding. No witness expressed the opinion
that the lot was capable of subdivision ; yet, considering the
testimony above referred to, there was enough evidence to
authorize this question to be submitted to the jury rather
than to be determined by the court.
Judgment reversed.
All the justices concur.
The Possession of Seal Property as notice of the occupant's rights
therein is considered in the note to Crooks v. Jenkins, 104 Am. St.
Bep. 331-354.
The Law of Lis Pendens is the subject of a note to Stout v. Philippi
Mfg. etc. Co., 56 Am. St. Eep. 853.
CASES
IN THE
STJPKEME COURT
OF
ILLINOIS.
DUNBAR V. AMERICAN TELEPHONE AND TELE-
GRAPH COMPANY.
[224 HI. 9, 79 N. E. 423.]
COEPORATION — Purchase of Stock of a Bival to Prevent
Competition. — If one corporation purchases a majority of the stock
of another for the purpose of controlling the latter and preventing
competition, the transaction is one which the courts will not uphold,
(pp. 136, 138.)
CORPORATIONS, Purchase of the Stock of Another hut in the
Name of a Natural Person. — If the stock of one corporation is pur-
chased by another with a view to prevent competition, the transaction
is not relieved of its unlawful character by the fact that the purchase
is made by and in the name of a natural person. To hold otherwise
would sustain a transaction illegal in its character accomplished by
indirection when it could not be done if the method were direct, (p.
136.)
TRUST — ^Unlawful Combinations Though There is not a Com-
plete Monopoly. — A combination or scheme to prevent competition
between corporations is unlawful, though other persons are engaged
in the same business and a complete monopoly thereof will not re-
sult, if the tendency is in that direction, (p. 136.)
FOREIGN CORPORATIONS— Subjection of to the Policy of
the State. — A corporation coming into the state is subject to all the
rules and regulations provided by its laws, and therefore cannot have
power to purchase the stock of a rival corporation for the purpose
of reducing competition between them, if a domestic corporation has
not such power, (p. 137.)
ONE CORPORATION cannot Become a Stockholder in An-
other Unless such power is given to it by its charter or is necessarily
implied thereunder, especially if the purpose of the purchase is to
control the management of the other corporation, (pp. 137, 138.)
CORPORATIONS — Minority Stockholders, Right to Enjoin
Scheme to Acquire Stock by Rival Corporation to Prevent Competition.
If a corporation, for the purpose of preventing competition between
it and a rival corporation, causes a majority of the stock of the
latter to be purchased for the benefit of the former, the minority
shareholders are entitled to an injunction to prevent the voting of the
stock so purchased, (pp. 139, 141.)
(132)
Dec. 1906.] Dunbar v. American etc. Tel. Co. 133
EQUITY PRACTICE — Cross-bill, When Should be Dismissed. —
If the complainant in a cross-bill is merely a nominal party to the
original bill against whom no relief is prayed, and he will obtain
all the relief to which he is entitled if the prayer of the original
bill is granted, it is proper to dismiss such cross-bill. (p. 144.)
EESCISSION OF CONTRACT of Sale— Duty of Doing Equity.
One who seeks by a bill in equity to rescind a contract of sale for
fraud on the part of the purchaser must, as a condition precedent,
offer to repay the purchase price, (p. 145.)
Suit by Francis W. Dunbar and six other of the minority
stockholders of the Kellogg Switchboard and Supply Com-
pany against the American Telephone and Telegraph Com-
pany, Kellogg Switchboard and Supply Company, M. G.
Kellogg, W. I. De Wolf, and other parties, alleging that
the Kellogg company was a corporation organized in Illinois
for the purpose of manufacturing, selling, hiring, leasing
or otherwise procuring, owning and disposing of electric
telephone and telegraph instruments of all kinds; that the
complainants were a minority of the stockholders of such
corporation ; that the defendant De Wolf was president, the
defendant Bush vice-president, and L. D. Kellogg was the
secretary and treasurer of the corporation, and M. G. Kel-
logg its principal stockholder; that the defendant American
Telephone and Telegraph Company was organized under the
laws of the state of New York, but was doing business in
Illinois and in many other parts of the Union ; that it suc-
ceeded to the business of the American Bell Telephone Com-
pany, and defendant Fish was its president; that it owned
sixty per cent of the stock of the Western Electric Com-
pany, which last-named corporation and the American Bell
Telephone Company formed the Bell telephone monopoly,
and as such had had exclusive control in the United States
of the business of telephone and telegraph apparatus; that
the defendant Fish is also a director of the Western Electric
Company, which was an Illinois corporation engaged in the
manufacture, buying and selling of electric apparatus, and
the defendant Barton was its president and manager, and
dominated by the defendant Fish ; that the telephone switch-
boards, instruments, and other apparatus of the independ-
ent exchanges throughout the United States have been man-
ufactured by several companies, the larger and most im-
portant of which are the Kellogg company and the Strom-
berg-Carlson Company of Chicago; that the business of the
Kellogg company for the large independent exchanges con-
134 American State Repoets, Vol. 115. [Illinois,
siderably exceeded that of the Stromberg-Carlson or any
other company; that in order to stifle competition in trade
and create a monopoly and to exact and maintain usurious
and excessive rates of charges, the American Telephone and
Telegraph Company conceived the illegal purpose of acquir-
ing at least two-thirds of the stock of the Kellogg company,
thereby to elect and maintain a board of directors which
should not act in the interests of the Kellogg company,
but, on the contrary, in the interests of the American com-
pany ; that to accomplish such illegal purpose the American
company intended to vote the stock so purchased to dissolve
the Kellogg company, and in the meantime to conceal from
the public the real facts respecting such company; that
prior to January 4, 1902, the defendant Milo G. Kellogg
owned three thousand three hundred and seven shares of the
Kellogg company, the defendant Buckingham two hundred
and sixty-two shares, the defendant De Wolf two hundred
and two shares ; the defendant Wright thirteen shares ; that
Milo G. Kellogg, being in ill-health, was then absent in Cali-
fornia and had given a general power of attorney to the
defendant De Wolf to sell and dispose of stock; that to
accomplish its illegal purpose the American company caused
defendant Barton to enter into a contract with De Wolf for
the sale of the shares of Kellogg, and that De Wolf, as agent
of Kellogg, Buckingham, and Mrs. Wright, delivered to
Barton shares of the Kellogg company amounting to three
thousand seven hundred and eighty-three shares, by reason
of which the American company claims to own and control
the same, or the voting part thereof. Various other facts
were alleged tending to show the extent to which monopoly
would be created, and that the shares of stock purchased
were paid for by the American company and held in trust
for it ; that defendant Kellogg, having recovered his health
and learned of the sale of the stock, disapproved of it and
sought to repudiate it, but that Barton and Fish insisted
upon retaining sufficient to constitute two-thirds of the stock
of the company.
The bill prayed that a temporary injunction issue, to be
made perpetual on the final hearing, restraining the Ameri-
can company, Barton, and the Western Electric Company
from selling said three thousand seven hundred and eighty-
three shares of the Kellogg company; also enjoining the
Dec. 1906.] DuNBAB v. American etc. Tel. Co. 135
transfers of such shares on the books of the company; and
also enjoining its voting for the purpose of dissolving the
company or of controlling its action, and that the sale of such
stock be set aside.
October 31, 1903, defendant Milo G. Kellogg filed a cross-
bill, the allegations of which, however, were in substantial
accord with those of the original bill. Demurrers to the
bills were interposed for want of equity and sustained.
Appeals were then prosecuted by the complainants in the
original bill and in the cross-bill, resulting in the affirmance
by the appellate court and further appeals to the supreme
court.
Henry S. Bobbins, Charles H. Aldrich, Henry S. McAuley,
John S. Miller and Pliny S. Smith, for the appellants.
A. N. Waterman, Holt, "Wheeler & Sidley, and Tenney,
Coffeen, Harding & Wilkerson, for the appellees.
22 WILKIN, J. The theory of the original bill is, that
the American Telephone and Telegraph Company of New
York (called the American company) purchased a majority
of the stock of the Kellogg Switchboard and Supply Com-
pany of this state (known in the record as the Kellogg com-
pany), for the purpose of suppressing competition and
creating a monopoly in itself of the telephone business. The
ground of the demurrer was that the allegations of the bill
were insufficient to sustain the cause of action, and that
complainants, being minority stockholders in the Kellogg
company, could not legally maintain it.
That the American company could not lawfully make a
contract for the purpose claimed, is not seriously questioned,
but the argument of counsel for appellees is devoted to the
proposition that the traversable allegations of the bill are
not Sufficient to present the theory relied upon, and that
complainants below are not entitled to the relief prayed.
The demurrer, so far as the question thus raised is con-
cerned, is general, and, of course, admits all the material
facts well pleaded in the bill. The bill certainly is not a
model of conciseness in pleading, but is justly subject to the
criticism of being indefinite, uncertain and more or less
evasive. We think, however, that it sufficiently shows,
against a general demurrer, that the American company,
136 American State Reports, Vol. 115. [Illinois,
through defendant Barton and others, became the purchaser
of the shares of stock with the unlawful purpose and inten-
tion of putting the Kellogg company out of business or so
using and controlling it as to prevent rivalry in business
and creating a monopoly, and it called for an answer from
defendants. If such was the purpose and object of the pur-
chase, the decisions of this court are full to the effect that
the law will not lend its aid to accomplish the object. That
is to say, if the American company had purchased a major-
ity of the capital stock of the Kellogg company in its own
name ^^ for the purpose of controlling the latter and there-
by preventing competition between itself and the latter
corporation, the transaction would have been one which
the courts of this state would not uphold: People v. Chicago
Gas Trust Co., 130 111. 268, 17 Am. St. Rep. 319, 22 N. E.
798, 8 L. R. A. 497 ; Distilling etc. Co. v. People, 156 111. 448,
47 Am. St. Rep. 200, 41 N. E. 188 ; Bishop v. American Pre-
servers' Co., 157 111. 284, 48 Am. St. Rep. 317, 41 N. E. 765;
Harding v. American Glucose Co., 182 111. 551, 74 Am. St.
Rep. 189, 55 N. E. 577, 64 L. R. A. 738. Nor can it be seri-
ously contended that a purchase by the company in the
name of others, as agents or trustees, will relieve the trans-
action of its illegality. To hold otherwise would be to
sustain a transaction illegal in its character, accomplished
by indirection, when it could not be done if the methods
were direct: Northern Securities Co. v. United States, 193
U. S. 197, 24 Sup. Ct. Rep. 436, -i-S L. ed. 679, affirming the
decision of the circuit court (120 Fed. 721).
The American company and its subcompany, the Western
Electric Company, must be considered as one in determin-
ing whether the tendency of the purchase alleged in the
bill would be to suppress the competition existing between
the Kellogg company and the "Western Electric Company in
the manufacture and sale of telephone appliances, etc.
Neither is it material that the Kellogg and Western Electric
Companies were not the only parties engaged in manufac-
turing such appliances, for the reason that if such was the
case, while a complete monopoly or a complete restraint
of competition would not necessarily result, the tendency
would be in that direction, which is sufficient to condemn
the transaction as unlawful: People v. Chicago Gas Trust
Co., 130 111. 268, 17 Am. St. Rep. 319, 22 N. E. 798, 8 L. R.
Dec. 1906.] Dunbar v. American etc. Tel. Co. 137
A. 497; More v. Bennett, 140 111. 69, 33 Am. St. Rep. 216,
29 N. E. 888, 15 L. R. A. 361.
The averment of the bill to the effect that it is the purpose
of the American company to suppress competition and
create in itself a monopoly is further aided by the averment
that Barton, through whom the purchase was made, agreed
to pay, as part of the purchase price, so much per share in
cash and the balance by applying thereto the pro rata pro-
ceeds of any or all bills and accounts reasonably due and
^^ owing to the Kellogg company on December 1, 1901, the
same to be settled and paid to said seller as the same are
paid and collected by said company, plainly indicating that
a dissolution of the Kellogg company was contemplated, be-
cause in no other event could the American company ap-
propriate the assets of the Kellogg company to pay a stock-
holder of that company for the stock purchased by the
former company from him; also, that by the contract of
purchase the Kellogg company should be carried on in the
usual manner for the space of one year in order that bills
and accounts receivable could be collected in the usual
course of business, thus showing a purpose to dissolve the
Kellogg company after the expiration of one year.
We have examined the briefs and arguments of counsel
for the defendants, and reached the conclusion that the pur-
pose and tendency of the purchase by the American com-
pany are sufficiently shown by the bill to be to suppress
competition by that company in telephone service to the
public and create in the American company a monopoly of
that business.
That the American company, a foreign corporation com-
ing into the state of Illinois, is subject to all the rules and
regulations provided by the laws of this state cannot be
doubted: Kurd's Stats. 1905, c. 32, p. 501, sec. 26; Stevens
V. Pratt, 101 111. 206; Bishop v. American Preservers' Co.,
157 III. 284, 48 Am. St. Rep. 317, 41 N. E. 765 ; Harding v.
American Glucose Co., 182 111. 551, 74 Am. St. Rep. 189, 55
N. E. 577, 64 L. R. A. 738 ; Coler v. Tacoma Ry. etc. Co., 64
N. J. Eq. 117, 53 Atl. 680. The question here, therefore,
is whether the American company, if it had been organized
in this state, would have had the power to purchase a ma-
jority of the stock of the Kellogg company for the purpose
of controlling the latter, and that question, as we have
138 American State Reports, Vol. 115. [Illinois,
already indicated, has been frequently decided in the nega-
tive by this court. The decisions in other states are to the
same effect: Marble Co. v. Harvey, 92 Tenn. 115, 36 Am.
St. Rep. 71, 20 S. W. 427, 18 L. R. A. 252 ; Nassau Bank v.
Jones, 95 N. Y. 115, 47 Am. Rep. 114. In Pearson v. Con-
cord R. R. Co., 62 N. H. 537, 13 Am. St. Rep. 590, it was said:
"A corporation ^* cannot become a stockholder in another
corporation unless such power is given it by its charter or
is necessarily implied in it, especially if the purchase be
for the purpose of controlling or affecting the management
of the other corporations": Elkins v. Camden etc. R. R. Co.,
36 N. J. Eq. 5; Great Eastern Ry. Co. v. Turner, L. R. 8
Ch. 149. These authorities fully sustain the position thai
the purchase by the American company, either in its own
name or in the names of others, of the majority stock of
the Kellogg company with the purpose and intent of con-
trolling the latter and putting it out of business as a com-
petitor of the American company and its subcompany, the
Western Electric Company, was an attempt to exercise a
power which it did not have. To permit it to do so would
be against the law of this state and its public policy : Hazel-
ton Boiler Co. v. Hazelton Tripod Boiler Co., 142 111. 494,
30 N. E. 399 ; Santa Clara Female Academy v. Sullivan, 116
111. 375, 56 Am. Rep. 776, 6 N. E. 183, Illinois cases above
cited.
The courts below, as we understand their decision, do
not uphold the contract of purchase by the American com-
pany as one made by it in its own name ; nor do we under-
stand counsel for appellees to contend that under the facts
alleged in the bill such a purchase could have been lawfully
made. It is attempted, however, to show that, inasmuch
as the purchase was made in the names of others and the
legal title to the stock vested in them, the strict doctrine
of ultra vires has no application. A court of equity will
look through all devices to discover and afford relief against
the real situation, and we shall hereafter, in considering
another branch of the case, have occasion to cite more at
length the authorities bearing on this question. For the
present it will be sufficient to cite Central R. R. Co. v.
Pennsylvania Co., 31 N. J. Eq. 475, where a bill was filed
by a railroad company to enjoin another from building
tracks across the complaining company's tracks, and it was
Dec. 1906.] Dunbar v. American etc. Tel. Co. 139
alleged that the defendant had, through its nominees and
employes, effected *® the incorporation of another corpora-
tion for the purpose of building said tracks. A writ of
injunction being granted, the court said: "A corporation
cannot in its own name subscribe for stock or be a cor-
poration under the general railroad law; nor can it do so
by a simulated compliance with the provisions of the law
through its agents, as pretended corporators and subscrib-
ers of stock." We have fully considered the reasoning of
the chanceller on this branch of the case which was adopted
by the appellate court, and have reached the conclusion that
it is based upon a distinction without a legal difference.
If, as a matter of fact, the object and purpose of the pur-
chasing company was to acquire such ownership in the Kel-
logg company as would enable it to control the latter, then,
whether it did so by a direct purchase in its own name or
through the intervention of agents or trustees, the want of
power was the same, and the purchase was strictly ultra
vires, no matter what the device may have been.
The remaining important question to be considered is
whether the complainants below, minority stockholders in
the Kellogg company, can maintain this bill. If we are cor-
rect in the view that the object of the American company
was illegal and that its attempt to acquire ownership of the
stock in the Kellogg company was absolutely null and void
as being in excess of its chartered powers, then it would
seem to follow that each and every stockholder in the latter
company would have the right to say that the American
company, assuming to own stock which it did not, and could
not, legally own and vote at any meeting of the Kellogg
company in the management and control of its business,
should be restrained. In other words, every lawful owner
of stock in a corporation has the right to say that others
assuming to vote shares of stock which they do not have the
legal right to vote, shall be restrained. This, we assume,
must be admitted, and such is the logical effect of the de-
cision of this court in Stebbins v. Perry County, 167 HL
567, 47 N. E. 1048.
^ In Marble Co. v. Harvey, 92 Tenn. 115, 36 Am. St.
Rep. 71, 20 S. W. 427, 18 L. R. A. 252, the supreme court
of the state of Tennessee, in passing upon the question
whether shares of stock in a corporation of that state en-
140 American State Reports, Vol. 115. [Illinois,
gaged in a similar business transferred to a trustee chosen
by the purchasing corporation for its use and benefit were
legally transferred, said: "The evidence shows that the de-
clared purpose of complainant in buying in the shares held
by the defendant was to enable it to manage and control
the business of the Tennessee company in the interest of the
Ohio company. There is no pretense that it had any express
power to purchase shares in another company, and it is too
clear to need argument or further citation of authorit}^ that
it had no implied authority to purchase and hold shares,
either in its own name or in that of a trustee, for the pur-
pose of controlling another corporation. ..... The purpose
and intent in granting the charter is, that the corporation
shall carry on its business through its own agents, and not
through the agents of another corporation. The public pol-
icy of this state will not permit the control of one corpora-
tion by another. Especially is this true when a foreign cor-
poration thus undertakes to control and swallow up a domes-
tic company. Such control of one corporation by another
in a like business is unlawful, as tending to monopoly. The
result is, that this purchase of shares for the express object
of controlling and managing another corporation was ultra
vires, and therefore unlawful and void. Being void, it was
of no legal effect, and no rights result from it enforceable
by or through the courts of the state, when such aid is
invoked in furtherance of the unlawful agreement": Nassau
Bank v. Jones, 95 N. Y. 115, 47 Am. Rep. 114; De La Vergne
R. M. Co. V. German Savings Inst., 175 U. S. 40, 20 Sup. Ct.
Rep. 20, 44 L. ed. 65.
Pearson v. Concord R. R. Co., 62 N. H. 537, 13 Am. St.
Rep. 590, was a bill by a stockholder of the Concord Rail-
road Company against the Northern Railroad Company, in
the decision of which case the court used the following lan-
guage: "The court finds that the Northern Railroad Com-
pany is the owner of twelve hundred and ninety ^® shares
of Concord railroad stock purchased in 1873, upon which it
has since voted at the meetings of the Concord railroad. A
corporation cannot become a stockholder in another corpora-
tion unless such power is given it by its charter or neces-
sarily implied in it, especially if the purchase be for the
purpose of controlling or affecting the management of the
other corporation It [the Northern railroad] can no
more make a permanent investment of funds in the stock of
Dec. 1906.] Dunbar v. American etc. Tel. Co. 141
another road than it can engage in a general banking, manu-
facturing or steamboat business. It is neither incidental to
the purposes of its incorporation nor necessary in the exer-
cise of the powers conferred by its charter. If it can pur-
chase any portion of the corporation stock of the Concord
company it may buy up the whole, and thus engage in a
business for which its charter gives it no authority. And
what will hinder a banking corporation from becoming a
manufacturing company, or a manufacturing company from
becoming a railroad common carrier? But the facts in this
case go further. The stock was bought at one hundred and
five dollars or one hundred and six dollars per share (par
value fifty dollars), a price largely in excess of its market
value, and for the purpose of obtaining control of the Con-
cord company and securing more favorable contracts to
'itself."
Many other cases might be cited in support of the position
that all such contracts are ultra vires and void.
Nor do we think it can be said in this case there was a
mere exercise of an excess of power rendering the trans-
action merely voidable and not an absolute nullity. We said
in Barnes v. Suddard, 117 111. 237, 7 N. E. 477, a case in
which there had been a mere excess of power (page 243) :
"Had the corporation been clothed with no power to acquire
real estate in this state, or if the purchase had been prohib-
ited by statute or contrary to the manifest policy of our
laws, a different question would be presented, and the cases
of Carroll v. City of East St. Louis, 67 111. 568, 16 Am. Rep.
632, and Starkweather v. American Bible Soc. 72 111. 50,
22 Am. Rep. 133, might properly be invoked as ^^ authority.
But such is not the case." Consequently it was held that
relief could not be granted at the instance of a private in-
dividual, as was held in Carroll v. City of East St. Louis,
67 111. 568, 16 Am. Rep. 632, and Starkweather v. American
Bible Soc., 72 111. 50, 22 Am. Rep. 133, cases referred to, the
remedy in the Bames-Suddard case (117 111. 237, 7 N. E.
477), being only at the instance of the public authorities.
In the one case a title vests which may be set aside ; in the
other the whole transaction is null and void.
But aside from the question as to whether the contract of
purchase waa ultra vires in the sense that the contract be-
came a nullity, we think that such equitable rights are
142 American State Reports, Vol. 115. [Illinois,
shown in the complainants, though minority stockholders,
as ought to entitle them to maintain this bill. It is alleged
in the bill, and admitted by the demurrer, that in order
to stifle competition in trade and create a monopoly in itself
and its licensee company, and for the purpose of enabling
it to secure and maintain unreasonable and excessive rates
and charges, said American company conceived the illegal
purpose of acquiring at least two-thirds of the stock of said
Kellogg company, and through such ownership to select
and maintain a board of directors which should act in the
real interests of and subservient to the American company
and free that company and its licensee from the competition
of the Kellogg company and independent exchanges; also,
that its ultimate purpose was to injure and finally destroy
the Kellogg company. That such conduct on the part of
the American company was fraudulent as against the stock-
holders of the Kellogg company cannot be denied, and
against which, on the plainest principles of equity, a stock-
holder in the Kellogg company should have the right to re-
lief : Menier v. Hooper Tel. Works, L. R. 9 Ch. 350. And, on
principle, Chicago Hansom Cab Co. v. Yerkes, 141 111. 320,
33 Am. St. Rep. 315, 30 N. E. 667 ; Wheeler v. Pullman Iron
etc. Co., 143 111. 197, 32 N. E. 420, 17 L. R. A. 818; Gamble
V. Queens County Water Co., 123 N. Y. 91, 25 N. E. 201, 9
L. R. A. 527, and Fougeray v. Cord, 50 N. J. Eq. 185, 24
Atl. 499, are in point.
3o In Memphis etc. R. R. Co. v. Woods, 88 Ala. 630, 16
Am. St. Rep. 81, 7 South. 108, 7 L. R. A. 605, the bill was
by stockholders representing a minority of the stock of the
Memphis company, and the case was submitted to the court
below on a demurrer and motion to dismiss the bill and to
dissolve the injunction, which the court overruled and the
company prosecuted an appeal. In the decision of the case
the supreme court held that where a corporation has ac-
quired the majority of the stock of another corporation, its
officers, directors or others acting in its interest may be
enjoined from exercising the voting power that the majority
of the stock confers, so as to govern and control the man-
agement of such other corporation, especially when the two
corporations have the same field of action and operation and
the profits of one may be advanced by lessening those of
the other, and where their interests are conflicting as to
Dec. 1906.] Dunbar v. American etc. Tel. Co. 143
expenditures and division of earnings. In many respects
that ease is similar to the one at bar. In the opinion it is
said: "We come, then, to the naked inquiry, can one cor-
poration acquire a majority of the stock of another cor-
poration, and by the exercise of the voting power the ma-
jority of stock confers, govern and control the management
of such corporation?" And the question was answered in
the negative: See State v. Newman, 51 La. Ann. 833, 72
Am. St. Rep. 476, 25 South. 408.
In Milbank v. New York etc. R. R. Co., 64 How. Pr. 20,
minority stockholders, on behalf of themselves and others,
sought to enjoin another railroad company from voting.
The injunction was granted, the court holding that the pur-
chase was against public policy, and used this language: "In
the case under consideration the New York, Lake Erie and
Western company have acquired, by purchase, the majority
of all the stock issued by the Buffalo, New York and Erie
railroad. K its officers are permitted to vote thereon they
can elect a board of directors of their own choosing. It
would then be for the interests of the New York, Lake Erie
and Western Railroad Company to have the Buffalo, New
York and Erie company managed ^* and controlled in the
interests of tjie former company. This would be liable to
result in injury to these plaintiffs and their fellow-stock-
holders, and if so, they have a right to complain": See,
also, Parson v. Tacoma Smelting etc. Co., 25 Wash. 492, 65
Pac. 765.
In Franklin Bank v. Commercial Bank, 36 Ohio St. 350,
one bank purchased certificates of stock in the other and
sought to have the same transferred upon its books, which
was refused, whereupon the bank claiming to have purchased
the stock brought an action against the other for conversion,
based on refusal to make the transfer, but the court denied
the relief, saying: "There would seem to be little doubt,
either upon principle or authority and independently of ex-
press statutory prohibition of the same, that one corporation
cannot become the owner of any portion of the capital stock
of another corporation unless authority to become such is
clearly conferred by statute Were this not so, one
corporation, by buying up the majority of the shares of
stock of another, could take the entire management of its
business, however foreign such business might be to that
144 American State Repoets, Vol. 115. [Illinois,
which the corporation so purchasing said shares was created
to carry on Its action in refusing the transfer was
but the denial of any right by the plaintiff to be placed
in a position to interfere and participate in the control and
management of its internal affairs. To the claim of the
plaintiff that it was the duty of the defendant to make the
transfer when the same was demanded and leave the state
to impose the penalty of forfeiture on the plaintiff for a
violation of its charter, we do not assent. The cases of
Union Nat. Bank v. Matthews, 98 U. S. 621, 25 L. ed. 188.
and Jones v. Guarantee etc. Co., 101 U. S. 622, 25 L. ed.
1030, and cases therein cited, do not support such proposi-
tion. The principle of those cases is, that where a corpora-
tion is incompetent, by its charter, to take a title to real
estate, a conveyance to it is not void, but voidable only,
and that the sovereign alone can object; that the convey-
ance is valid unless assailed in ^* a direct proceeding insti-
tuted for that purpose. But they neither, by the principle
maintained nor by the reasoning advanced in support of it,
sanction the doctrine that one corporation may buy up the
stock of another and thereby enable itself to interfere with
the internal management of its affairs, especially where the
power to do so is expressly prohibited by its .charter. "
Other authorities, some of which have been already cited,
are to the same effect.
There are other grounds upon which the complainants'
right to maintain this bill may be placed, but we do not feel
called upon now to extend this opinion for the purpose of
pointing them out. Three separate, independent, lengthy
briefs and arguments have been filed on behalf of appel-
lants, which have unnecessarily increased the labor of re-
viewing and deciding the case. We have endeavored only
to point out the substantial grounds upon which we hold the
defendants to the original bill should have been required to
answer the same.
We think the decree of the circuit court sustaining the
demurrer to and dismissing the cross-bill is right and should
be affirmed. No necessity whatever for that bill is shown.
At most, Milo G. Kellogg was a mere nominal party to the
original bill. No relief was prayed against him, and if a
decree granting the prayer of that bill had been rendered he
would have obtained all he was in equity entitled to. More-
Dec. 1906.] DuNBAB v. American etc. Tel. Co. 145
over, as a bill to set aside the contract of sale for the fault
or misconduct on the part of his attorney, De Wolf, he does
not offer to place the purchaser in statu quo.
The decree, in so far as it sustains the demurrer to the
cross-bill, will be sustained, but for the error in sustaining
the demurrer to the original bill, the decree will be reversed
and the cause remanded, with directions to proceed in con-
formity with the views herein expressed.
Decree aflSirmed in part.
^^ Afterward, on consideration of the petition for rehear-
ing in this case, the following additional opinion was filed:
Per CURIAM. The object and purpose of the cross-bill
is to rescind the sale of Kellogg 's shares of stock on the
ground of fraud. In order to entitle him to that relief he
must have shown by his bill that he promptly disaffirmed the
sale upon discovering the alleged fraud and offered to re-
fund the purchase price which he received therefor or give
some sufficient legal excuse for his failure to do so, and in
this respect his cross-bill is fatally defective. The rule in
this state is, that a party who seeks by bill in equity to
rescind a contract of sale for fraud on the part of the pur-
chaser, must, as a condition precedent, offer to repay the
purchase price. In other words, he must, before filing his
bill, offer to restore the purchaser to the same position he
was in before the sale was made. The contract is not void,
but only voidable at the election of the defrauded party:
Rigdon V. Walcott, 141 111. 649, 31 N. E. 158. And it was
there said (page 662) : "The complainant then having failed
to show that prior to the filing of his bill he elected to re-
scind the transaction or agreement complained of, or took"
any of those steps which are legally necessary to effectuate
a rescission, it must be held that, so far as is shown by the
bill, said transaction remains in full force and that the com-
plainant is entitled to no relief based upon the theory of its
rescission." The rule is clearly stated by Judge Gary in
Duncan v. Humphries, 58 111. App. 440, that to lay the
foundation for a bill to rescind a contract, the complainant
must, before the commencement of his suit, offer and be
willing to perform such acts on his part as will restore the
defendant to the position which he occupied before the
transaction: Citing Rigdon v. Walcott, 141 Cal. 649, 31
N. E. 158. It is not sufficient to make the offer in the bill.
Am. St, Eep., Vol. 115—10
146 American State Reports, Vol. 115. [Illinois,
The judgment of the appellate court as to the cross-bill is
right and will be affirmed.
Unlawful Trusts and Monopolies are considered in the note to Hard-
ing V. American Glucose Co., 74 Am. St. Rep. 235.
The Consolidation of Corporations is considered in the note to Morri-
son V. American Snuflf Co., 89 Am. St. liep. 604; and the sale by a
corporation of all its property and assets is considered in the note to
Tanner v. Lindell Ey. Co., 103 Am. St. Rep. 548.
The Bight of One Corporation to Acquire Stock in another is con-
sidered in the note to Denny Hotel Co. v. Schram, 36 Am. St. Rep.
137. See, too, the recent case of McCampbell v. Fountain Head R. R.
Co., Ill Tenn. 55, 102 Am. St. Rep. 731, and authorities cited in the
cross-reference note thereto.
Actions by Stockholders on Behalf of Their Corporations are con-
sidered in Johns v. McLester, 97 Am. St. Rep. 29.
BROWN V. TRUSTEES OF SCHOOLS.
[224 HI. 184, 79 N. E. 579.]
LIMITATION OF ACTIONS Against the State.— Statutes of
limitation do not run against .the state in respect to public rights,
unless it is expressly within the terms of the statute, (p. 147.)
LIMITATION OF ACTIONS— Minor Municipalities.— The rule
that statutes of limitation do not run against the state applies in favor
of minor municipalities created by it as well as to local governmental
bodies in respect to governmental affairs affecting the general public.
The exemption extends to counties, towns and minor municipalities
in all matters respecting strictly public rights as distinguished from
private or local rights, but as to matters involving private rights,
they are subject to the statute of limitations to the same extent as in-
dividuals, (pp. 147, 148.)
LIMITATION OF ACTIONS— School Districts.— Statutes of
limitation run against trustees of school districts with respect to
property held by them in trust for the use of the free public schools
of the district, because the people of the state in general have no in-
terest in common with the inhabitants of the school district in the
schoolhouse site. (pp. 149, 150.)
Outten & Roby, for the appellant.
J. B. Moffett, for the appellees.
^»5 CARTWRIGHT, J. This is an action of ejectment
brought by the appellees, against appellant, in the cir-
cuit court of Macon county, to recover possession of part
of a schoolhouse lot to which appellees held the legal title,
for the use of school district No. 90, in said county. Appel-
-i
Dee. 1906.] Brown v. Trustees of Schools. 147
lant's plea was not guilty and **^ the defense was the stat-
ute of limitations of twenty years. The cause was sub-
mitted to and tried by the court upon an agreed statement
of facts showing adverse possession of the premises for
more than twenty years. Appellant and his predecessors in
title to the adjoining lands had been in the open, exclusive
and adverse possession of that part of the schoolhouse lot
in controversy for more than twenty years, and it had been
inclosed by a fence, and a portion of it had been used for
an orchard and another portion for a garden. The posses-
sioi^of appellant was such as would have barred the action
if the statute of limitations applies to trustees of- schools in
respect to lands held for the use of a school district. Ap-
pellant submitted to the court propositions of law to the
effect that the action would not lie because of the adverse
possession, and that the title and possession of appellees
were subject to the limitation laws of the state. The court
refused to hold the propositions to be the law and found
the defendant guilty, and entered judgment that the ap-
pellees recover the premises.
Statutes of limitation do not run against the state, in
respect to public rights, unless the state is expressly in-
cluded within the terms of the statute. The rule is founded
on the maxim of the common law, Nullum tern pus occurrit
regi. It was supposed that the time and attention of the
sovereign were occupied by the cares of government, and
there could be no negligence or laches on his part. The
same prerogative extends to the state, in its sovereign capac-
ity, as to all governmental matters. As to them no delay
in resorting to the remedy will bar the right; but if the state
becomes a partner with individuals, or engages in business,
it devests itself of its sovereign character and is subject to
the statute : Governor v. Woodworth, 63 III. 254. In such
relations it does not exercise sovereignty, but acts merely
as an individual and cannot claim the exemption. The
rule that statutes of limitation do not run against the state
also extends to minor municipalities created by it as local
governmental **"^ agencies, in respect to governmental af-
fairs affecting the general public. The exemption extends
to counties, cities, towns and minor municipalities in all mat-
ters rcKpectiug strictly public rights as distinguished from
private and local rights, but as to matters involving private
148 American State Reports, Vok 115. [Illinois,
rights they are subject to statutes of limitation to the same
extent as individuals.' Logan County v. City of Lincoln,
81 111. 156; County of Piatt v. Goodell, 97 111. 84; School
Directors v. School Directors, 150 111. 653; People v. Town
of Oran, 121 111. 650, 13 N. E. 726 ; Greenwood v. Town of
Lasalle, 137 111. 225, 26 N. E. 1089 ; 19 Am. & Eng. Ency. of
Law, 2d ed., 181, 191.
The question in this case is whether there is an implied
exemption from the statutes of limitation in favor of trus-
tees of schools with respect to property held for the use of
a particular school district, and that depends upon the mean-
ing of the term "public rights," as used in the decisions.
In one sense, all property held by a municipal corporation
is held for public use, and the public at large, or some por-
tion of the public, have rights or interests in such property.
It may be held for the use of the people of the state gen-
erally, or the use may be limited to the inhabitants of the
local subdivision or municipality, such as the city, village
or school district, and the question whether the statute ap-
plies in the latter class of cases was considered in County
of Piatt v. Goodell, 97 111. 84. That case involved the title
to swamp lands owned by the county, in which the in-
habitants of the county were interested. It was held that
the public right and public use must be in the people of the
state at large, and not in the inhabitants of a particular
local district. It was said that there is a well-founded dis-
tinction between cases where the municipality is seeking to
enforce a right in which the public in general have an in-
terest in common with the people of such municipality, and
cases where the public have no such interest; that the pub-
lic generally had no interest in the tract of land in question
in that case in common with *** the voters and taxpaj'crs
of Piatt county, and that the county for that reason was
subject to the limitation laws.
There are numerous cases where it has been held that
municipalities or minor political subdivisions of the state
are not subject to limitation laws in respect to streets and
public highways (Lee v. Town of Mound Station, 118 111.
304, 8 N. E. 759) ; but streets and highways are not for the
use of the inhabitants of any municipality or locality alone,
but for the free and unobstructed use of all the people in
that state. Such rights are clearly distinguishable from the
Dec. 1906.] Brown v. Trustees of Schools. 119
rights or interests of the inhabitants of a locality in prop-
erty acquired for a mere local use, such as city offices, a
library site or the use of a fire department. Such prop-
erty is held and used for strictly local purposes. In Green-
wood V. Town of Lasalle, 137 111. 225, 26 N. E. 1089, where
it was held that an action by the town to recover taxes
was not barred by any statute of limitation, the taxes were
levied for purposes in which the public generally are di-
rectly interested, such as repairing bridges, roads or cause-
ways, in which the public at large are as much interested
as the people of the township. In the case of Trustees of
Commons v. McClure, 167 111. 23, 47 N. E. 72, it was held
that the statutes of limitations did not run against the state
itself in respect to the commons held in trust for a portion
of the general public, where there was no power, except in
the state, to authorize a diversion of the lands to any use
different from that provided for in the grant; but it was
said that the court did not wish to be understood as hold-
ing that if the inhabitants of the village of Kaskaskia had
been incorporated and endowed by the state with full au-
thority to divide, divert and convey the commons, or any
part thereof, in fee, the statute of limitations would not
run against them as in other cases. It was there held that
the state could not, by mere lapse of time, be barred from
the exercise of its sovereign power in respect to the aliena-
tion of the lands, although the trust was for the benefit of
a portion, only, of the general public, but the court declined
to hold that a municipality ^**^ would be exempt under the
same circumstances. That decision was based on the pre-
rogative of the state as a sovereign.
By section 31 of the act to establish and maintain a sys-
tem of free schools the trustees of schools of a township are
invested with the title, care and custody of all schools and
schoolhouse sites, but the supervision and control of such
schools and schoolhouse sites are vested in the directors of
the particular district. The trustees are required by sec-
tion 32 to sell and convey any schoolhouse site which has
become unnecessary, unsuitable or inadequate for a school,
on petition of a majority of the voters of the district, and
the proceeds of the sale are to be paid over to the township
treasurer for the benefit of the school district: Kurd's
Stats. 1905, p. 1796. The people of the state in general have
150 American State Keports, Vol. 115. [Illinois,
no interest, in common with the inhabitants of a school
district, in the schoolhouse site or the proceeds of it. The
use and the right are confined to the particular local dis-
trict, and under the decision in County of Piatt v. Goodell,
97 111. 84, the statute of limitations was a good defense.
The judgment is reversed and the cause remanded.
WILKIN, J, Dissenting. I do not understand that the
right of action in plaintiffs below is barred by limitation.
They proved a fee simple title in themselves for the use
and benefit of the public. Section 32 of the school law
(Kurd's Stats. 1899, c. 122, p. 1526) provides that the school
business of the township shall be done by three trustees to
be elected by the legal voters of the township, as there-
inafter provided for. Section 33 makes said trustees a
body politic and corporate by the name and style of "Trus-
tees of schools of township No. , range No. ,"
according to the number, and provides that such corporation
shall have perpetual existence, shall have power to sue
and be sued, to plead and be impleaded in all courts and
places where judicial proceedings are had. ^^^ Section 60
authorizes the trustees of schools in each township in the
state to receive any gift, grant, donation or devise made
for the use of any school or schools or library, or other
school purposes, within their jurisdiction, and provides that
"they shall be and are hereby invested, in their corporate
capacity, with the title, care and custody of all schoolhouses
and schoolhouse sites; provided, that the supervision and
control of such schoolhouses and school sites shall be vested
in the board of directors of the district." Section 61 au-
thorizes the trustees, when in the opinion of any board of
directors the schoolhouse site or any buildings have be-
come unnecessary or unsuitable or inconvenient for a school.
on petition of a majority of the voters of the district, to
sell and convey the same in the name of said board, after
giving at least twenty days' notice of such sale by posting
up written or printed notices thereof particularly describ-
ing said property and the terms of sale.
It has always been the doctrine of this court that the
statute of limitations does not run against a municipal cor-
poration in respect to property held for public use. I do not
think it can be said the trustees of schools do not hold prop-
erty the title to which is vested in them for school purposes,
Dec. 1906.] Brown v. Trustees op Schools. 151
for the public use. Such property is held for the benefit of
all the people of the school district. It cannot be sold by
the trustees without the petition of a majority of the vot-
ers in the district. They have no power to dispose of the
fee to such property or convey it away at their own will
and independently of the will of a majority of the voters.
A sale or conveyance by them, otherwise than upon the peti-
tion required by the school law, would be a plain violation
of duty. The public have an interest in the land in com-
mon with the citizens and taxpayers of the district and
township. The laws providing for public schools are passed
in pursuance of the constitutional provision that "the Gen-
eral Assembly shall provide a thorough and efficient sys-
tem of free schools, whereby all children of this state may
receive a good common **** school education": Const. 1870,
art. 8, sec. 1. The public school of each township or dis-
trict is a part of the common school system of the state,
and the interest of the public in it is as broad as the sys-
tem itself. In Logan County v. City of Lincoln, 81 111.
156, this court said: "Our understanding of the law is, that
as respects all public rights, or as respects property held
for public use upon trusts, municipal corporations are not
within the operation of the statute of limitations ; but in re-
gard to contracts or mere private rights the rule is differ-
ent, and such corporations, like private citizens, may plead
or have pleaded against them the statute of limitations":
See. also, :Martel v. City of East St. Louis, 94 111. 67 ; Village
of Lee V. Harris, 206 111. 428, 99 Am. St. Rep. 176, 69 N.
E. 230. Here the school trustees, as a municipalit}', held
this school lot not in a private capacity, nor do they hold
the fee with unlimited power of disposal. The power of
disposal is subject to the will of a majority of the voters
of the school district. In my opinion the trustees cannot,
by mere neglect of duty or laches, deprive the public of its
right to the property. Section 8 of our statute of limita-
tions expressly excepts such property from the operation
of the seven years' limitation.
I think the judgment below should be affirmed.
Adverse Fossession of property of a public character is considered in
the notes to Schneider v. Hutchinson, 76 Am. St. Rep. 479; Northern
Pac. Ry. Co. v. p:iy, 87 Am. St. Rep. 775.
The Maxim "Nullum Tempus Occurrit Regi" is the subject of a note
to Bannock County v. Bell, 101 Am, St. Rep. 144.
152 American State Reports, Vol. 115. [Illinois,
DARST V. SWEARINGEN.
[224 lU. 229, 79 N. E. 635.]
WIIiLS, Property Oiven to Heirs by, Wlien Deemed to be
Personal Property. — A devise of real property to be con%'crtecl into
money and the money to be distributed among the devisees is to be
treated as a devise of money and not as of land, though the devisees
may, by their unanimous concurrence, elect to take land instead of
money, (p. 154.)
WlliliS. Property Olyen to Heirs When Deemed to be Vested
in Them by Eescent — A devise giving the devisee precisely the
same estate and interest in the property as he would have taken
by descent is void, for the reason that title by descent is regarded
as worthier and better than title by purchase, (p. 154.)
WTLLS — Devise to Heirs, When Does not Vest in Them by
Descent. — If a devise is made by the testator's heirs and there is a
difference in kind or quality of the estate or property to be passed
under the devise from that which would descend to them by the
statute, they must be held to take by devise and not by descent, (p.
154.)
EXECXJTION, Interest of the Devisee, When Subject to. — If a
testator devises all his real estate occupied as a homestead to his
wife for life, and within two years after her death to be sold, the
proceeds to be equally divided among his six children, they take no
vested interest in such property on the death of the testator, but only
a right to money when the land shall be sold as directed, and the in-
terest of one of them is not subect to levy and sale under execution,
and such levy and sale are void. (p. 155.)
W. W. Hammond and H. V. Foster, for the appellants.
Lillard & Williams, for the appellee.
231 WILKIN, J. On July 12, 1882, Joseph B. McCorkle
died testate. The fourth clause of his will was as follows:
"I give and bequeath to my wife, Cynthia Ann ]\IcCorkle,
my homestead or home place, with all its appurtenances
thereunto belonging, and all the land described as belonging
to me in sections 18 and 19, Tp. 26, N. R. 1 W. 3d P. M.,
Olio Tp., Woodford county, Illinois, to have and to hold
during her natural lifetime, and within two years after her
death the above-described homestead and lands I will to be
sold and the proceeds to be equally divided between my six
children, viz.: Maria Josephine Poynter, Richard Henry
McCorkle, Orpha Jane Hedrick, Eunice Adele McCorkle,
Missouri (or Zuie) Amanda McCorkle, Cyrus Byron Mc-
Corkle."
The widow and six children named in this clause were
testator's sole heirs at law. The will vv^as admitted to pro-
Dec. 1906.] Darst v. Swearingen. 153
bate by the county court of "Woodford county on August 10,
1882, but the executor named therein failed to qualify. The
widow occupied the homestead until her death, on August
16, 1905.
On June 15, 1900, Orpha Jane Hedrick, a daughter, in
consideration of twelve hundred dollars, assigned to appel-
lee, Ezra F. Swearingen, her estate in all moneys derived
from the sale of the ^^* real estate described in the fourth
clause. On April 4, 1897, J. P. Darst, L. C. Darst and G.
W. Darst, partners doing business as J. P. Darst & Co.,
obtained a judgment in the circuit court of Woodford county
against Orpha J. Hedrick and others. An execution was
issued and levied upon the share of Orpha Jane Hedrick
in the real estate above described and the same was sold
by the sheriff in satisfaction thereof. No redemption was
made from this sale, and on June 26, 1905, the sheriff is-
sued a deed conveying said interest to appellants, J. P.
Darst & Co. On December 8, 1905, appellee, Ezra F. Swear-
ingen, filed his bill in the circuit court of Woodford county
against J. P. Darst & Co., and the six children of Joseph
B. McCorkle, in which he alleged the above facts; also that
no title was vested in Orpha Jane Hedrick at the time of
said judgment, levy and sale; that the time had arrived
when said homestead property should be sold and the pro-
ceeds divided, and that the sheriff's deed was void and a
cloud upon complainant's title. The prayer of the bill was,
that a trustee should be appointed to sell said real estate;
that the sheriff's levy, sale and deed be set aside, and that
the master in chancery be directed to sell the property and
distribute the proceeds, giving to appellee, Swearingen, the
share of Orpha Jane Hedrick. A demurrer to the bill Avas
filed by J. P. Darst & Co., which was overruled, and they
electing to stand by their demurrer, a decree was entered
in accordance with the prayer of the bill. From that de-
cree this appeal is prosecuted.
The only question for our determination is whether
Orpha Jane Hedrick took, under the fourth clause of the
will, real estate or personal property. On behalf of appel-
lants it is claimed that she took real estate subject to levy
and sale by judgment creditors; on the other hand, appellee
contends that it became personal property under the will,
and that the title to the same, as realty, did not vest in her.
154 American State Reports, Vol. 115. [Illinois'.
We have held in a great many cases that a devise of real
estate which by the provisions of a will is to be converted
*^^ into money and the money distibuted among the dev-
isees is to be treated as a devise of money and not of land
and that the devisees may elect to take the land itself in
stead of the money. The character of the devise cannot
however, in such case be changed from money to land witl?
out the concurrence of all of the devisees. This doctrini
was first decided in the early case of Baker v. Copenbarger
15 111. 103, 58 Am. Dec. 600, and has been followed in num
erous subsequent cases, among which are Ebey v. Adams.
135 111. 80, 25 N. E. 1013, 10 L. R. A. 162 ; English v. Cooper.
183 111. 203, 55 N. E. 687, and Starr v. Willoughby, 218 111.
485, 75 N. E. 1029, 2 L. R. A., N. S., 623.
But it is claimed by appellants that there is a distinction
between cases where the direction is to sell and divide the
proceeds among a class of persons other than the testator's
heirs or in different proportions from the statutory inheri-
tance, and cases where the heirs of the testator are benefi-
ciaries in the same proportions they would take by dascent,
and they insist this case falls within the latter class. There
can be no question but the distinction insisted upon exists;
that a devise giving precisely the same estate and interest
in property as the devisee would take by descent if the de-
vise had not been made is void, for the reason that a title
by descent is regarded as a worthier and better title than a
title by purchase: Kelett v. Shepard, 139 111. 433, 28 N. E
751, 34 N. E. 254. But this rule is not applicable where
there is a difference in kind or quality of the estate or prop-
erty to be passed under the devise from that which would
descend under the statute. Where there is a difference in
either the amount or quality of the interest taken the rule
is not applicable. Had Joseph McCorkle died intestate his
widow would have taken homestead and dower in the lands
in question, and the six children would have taken, at the
moment of his death, the intestate lands as real estate, sub-
ject to the widow's dower and homestead. The title would
immediately have vested in them and been subject to levy
and sale on an execution of a judgment creditor. By the
terms of this will the homestead of the widow was merged
in other property without *^'* assignment of homestead and
in lieu of dower. Both the homestead and dower rights of
Dec. 1906.] White v. Horn. 155
the widow were thrown together. Her property, there-
fore, as it descended under the will was entirely different
from what it would have been if she had taken under the
statute. The six children, instead of inheriting the land
subject to the assignment of dower and homestead, as pro-
vided by the statute, took no vested estate at the death
of their father, but only a right to money when the land
should be sold within the two years after the death of the
widow. It will readily be seen, therefore, that there was
a marked difference between the title given under the will
and that which would have been derived under the statute,
and therefore the case does not fall within the rule sought
to be invoked by appellants.
The interest of Orpha Jane Hedrick under her father's
will was a money interest, and not real estate. The levy
and sale were therefore void.
We find no reversible error, and the decree of the circuit
court will be affirmed.
Wills Devising or Bequeathing to an Heir what he is entitled to
unflor the law of succession, in the absence of a will, are considered
in the note to Akers v. Clark, 75 Am. St. Rep. 154.
The Liability of an Heir or Devisee for the debts of his ancestor is
considered in the note to Crawford v. Turner, 112 Am. St. Eep. 1017.
WHITE V. HORN.
[224 111. 238, 79 N. E. 629.]
ESTATES OF DECEDENTS— Limitation of Time Within
Which to Apply for an Order to Pay Debts. — In the absence of a legis-
lative rule upon the subject an application for an order to sell lands
of a decedent to pay his debts must be made within seven years unless
the delay is satisfactorily explained. If the circumstances show
good reason for the delay, a very much longer time will not bar the
proceedings, (p. 158.)
ESTATES OF DECEDENTS — Laches in Executing an Order to
Sell Eeal Estate to Pay Debts. — An order to sell land to pay debts
amounts to no more than a lien which should be enforced within
the time allowe<l for the enforcement of judgment liens. If the
order is not enforced within seven years, the parties may be brought
before the court at any time within twenty years, and, in a proper
case, the order may be revived and enforced; but it should not be
enforced after twenty years where the only excuse for delay is that
the lands were of so little value during such twenty years that they
were worth nothing in the market, but their value had recently been
much enhanced, (pp. 159, 160.)
156 American State Repoets, Vol. 115. [Illinois,
Williams & Williams and Paul F. Grote, for the appel-
lants.
Edward Doocy and William Mumford, for the appellees,
**i CARTWRIGHT, J. Thomas Cochran, at the time of
his death, on June 18, 1876, was the owner of two tracts of
land in Pike county, one containing thirty-two acres and
the other seventy-five and seventy-five hundredths acres.
He left no descendant, and the heirs were his widow, Etha-
linda Cochran, and collateral relatives. The lands were sub-
ject to the dower of the widow, and she took one-half in
fee as heir, subject to the dower. John B. Horn, one of
the appellees, was appointed administrator on August 18,
1876, and claims were allowed against the estate in excess
of the personal assets to the amoimt of three thousand six
hundred dollars. The creditors presented to the court their
petition for a citation against the administrator to compel
him to sell the real estate to pay the debts, and on June 30.
1880, he filed his petition for that purpose. On October 22,
1880, an order of sale was entered, and by virtue of that
order the lands were sold on January 22, 1881, the thirty-
two acre tract bringing one hundred and eighty -seven dol-
lars and fifty cents and the seventy-five and seventy -five
hundredths acre tract seventy-five dollars. A report of the
sale was made, which the county court refused to approve
because of the inadequacy of price. The sale was set aside
and the administrator was ordered to again advertise and
sell the lands. No further attempt to sell the lands was
made and nothing was done by the creditors to compel a
sale until March 22, 1904, when appellants, who are cred-
itors of the estate, presented to the county court their peti-
tion in this case for a citation to the administrator to show
cause why he should not proceed to sell under the original
order. John B. Horn and Ethalinda Cochran, the appel-
lees, demurred to the petition, and their demurrer was over-
ruled and an order was entered directing the appellee Horn
to sell the real estate **^ in pursuance of the original order.
Appellees appealed to the circuit court, where they again
demurred to the petition, and the demurrer was overruled.
Appellee Horn then filed his answer, alleging that the judg-
ments of appellants were barred by limitation and by their
negligence and laches; that the proceedings for the sale
Dec. 1906.] White v. Horn. 157
were long ago abandoned and the ease was off the docket
of the county court, and that appellants had allowed the
widow to expend large sums of money to improve the
land and were estopped to assert any rights antagonistic to
her. The circuit court heard the cause and entered an or-
der requiring the appellee to advertise the lands and pro-
ceed to sell the same under the order entered October 22.
1880. Appellees appealed to the appellate court for the
third district, and that court reversed the order of the cir-
cuit court. From the judgment of the appellate court ap-
pellants have brought the case here by appeal.
The petition for the enforcement of the order of sale
was filed more than twenty-three years after the order was
entered, and alleged as an excuse for the delay that both
tracts were encumbered by dower rights of the widow, and
that the seventy-five and seventy-five hundredths acres
were swamp lands in a drainage district and of little value,
and that the lands have recently become valuable. The
petition further alleged that the widow was in possession
of all said lands from the death of her husband; that on
October 23, 1893, she conveyed the seventy-five and seventy-
five hundredths acre tract to Peter Brown, and thereby her
dower right in that tract was extinguished; that on Janu-
ary 10, 1895, Brown procured a deed from the commission-
ers of the drainage district, who had bought said tract for
levee and other taxes on June 4, 1883 ; that on September 7,
1895, Brown and wife quitclaimed the premises to the
widow, and on July 11, 1902, she also received a deed from
Isaac Strauss and wife, who had bought the tract at a tax
sale on June 13, 1898. One of the petitioners testified that
the lands were of little value prior to the settlement, in
1902, of a bond suit in the United States court against the
drainage district, and before that **^ settlement would not
have sold for enough, subject to the widow's dower, to pay
for the cost of the proceeding. The petition alleged that
the widow had contracted a sale of part of the premises
for three thousand six hundred dollars and had filed a peti-
tion to quiet title as against petitioners.
The principal question presented is whether a petition
to enforce the execution of an order of sale to pay the
debts of an estate will be entertained after the lapse of
twenty-three years from the time it was entered. There is
158 American State Reports, Vol, 115. [Illinois,
no statute limiting the time within which an administrator
shall file a petition for leave to sell land to pay debts nor
within which he shall proceed to execute the order of sale
after it has been entered. The question within what time
the petition shall be filed has often been considered, and a
period has been fixed which was adopted in analogy to
statutes of limitation relating to liens of judgments. In
the absence of a legislative rule fixing a definite period of
limitation it has uniformly been held that the application
must be made within seven years, unless the delay is satis-
factorily explained. If the circumstances show good rea-
son for a delay, a very much longer time will not bar a
proceeding: Rosenthal v, Renick, 44 111. 202; Moore v. Ells-
worth, 51 111. 308; Bursen v. Goodspeed, 60 111. 277; Judd
V. Ross, 146 111. 40, 34 N. E. 631; People v. Lanham, 189
111. 326, 59 N. E. 610; Graham v. Brock, 212 lU. 579, 103
Am. St. Rep. 248, 72 N. E. 825.
Counsel for appellants contend that the rule so estab-
lished does not apply to an order of sale ; that the proceed-
ing is in rem, and a judgment of that kind does not fall
within any statute of limitation, and that the order may be
executed at any time, however remote. While counsel are
correct in saying that there is no statute governing the
time within which the order may be executed, it is equally
true that there is no statute fixing the time within which
the application shall be made, and that practically the
same reasons which induced the establishment of the rule
in one case apply to the other. The law gives to creditors
of an estate a lien on the real estate to be enforced by the
administrator for their benefit; ^*^ but the lien is not per-
petual, and may be lost by gross laches or unreasonable
delay (Vansyckle v. Richardson, 13 HI. 171), and there
seems to be no valid reason why the lien should be per-
petual after it has taken the form of an order of sale. It
is the often-declared policy of the lavv* that titles to real
estate shall be secure, and courts have not hesitated to ap-
ply rules, based on the analogies of statutory law, to pre-
vent insecurity of such titles. In the case of a sheriff's
certificate of sale, although there was no statutory limita-
tion, the court applied a rule, drawn from the analogies of
the law, that the deed must be made within a reasonable
time; that such time was the seven years within which
Dec. 1906.] White v. Horn. 159
the judgment was a lien, adding thereto fifteen months al-
lowed for redemption, and that if the application for a deed
was not made within that time it must be made through
the court, on notice to the parties. The court was inclined
to hold that a period of twenty years should be considered
an insuperable bar to the relief prayed for: Rucker v.
Dooley, 49 111. 377, 99 Am. Dec. 614. The court in that
ease mentions other examples where a limitation had been
adopted without legislation, and reiterates the declaration
of a former opinion: "In short, the policy of our law is
repose and security of titles and estates against dormant
claims. ' '
Where the only effect of an order to sell lands to pay
debts is to subject the lands to sale for vhat purpose, the
order amounts to no more than a lien, and payment of the
claims will relieve the lands from the effect of the order.
The heir, in such a case, may pay the debt and relieve the
lands from the charge : Richie v. Cox, 188 111. 276, 58 N. E.
952. By statute a judgment is a lien upon land for seven
years if execution has been issued within a year, and no
longer. When the judgment has become dormant it may
be revived by scire facias, or an action of debt may be
brought thereon within twenty years after the date of the
judgment, and not afterward. Actions for the recovery of
lands held adversely are barred in seven years under some
circumstances and in ^^'^ other cases in twenty years.
Petitioners seem to have recognized that the order of sale
had become dormant, and could not properly be executed
without bringing the parties interested before the court
and obtaining an order to enforce the decree.
Following the analogies of the law, it would seem that
if an order of sale has not been executed within seven years
from the date of its entry, the parties may be brought be-
fore the court at any time within twenty years, and in a
proper case the order may be revived and enforced; but
we do not think that the order ought to be enforced, in a
case like this, more than twenty years after the original
order was entered. The only excuse for the long delay
which was alleged or proved was, that the lands were worth
nothing in the market until recently, when there has been
a great advance in market value. In the case of People v.
Lanham, 189 III. 326, 59 N. E. 610, where a great delay in
160 American State Reports, Vol. 115. [Illinois,
beginning the proceeding was excused, the lands were sub-
ject to a homestead estate, and could not have been sub-
jected to a sale for the payment of the debts of the estate,
and similar conditions existed in other cases where it was
held that the delay was satisfactorily explained. There
was something in the condition of the title which prevented
a sale, and not a mere question of market values, which
has not been regarded as good ground for delay: Graham
V. Brock, 212 111. 579, 103 Am. St. Rep. 248, 72 N. E. 825.
A steady increase in the market value of farm lands in
this state has taken place since the first settlement of the
country, and a probability of increased market value in
the future would exist in every case. None of the reasons
generally applicable to the commencement of proceedings
which would excuse delay could have any force in excusing
the execution of the order when once made.
The judgment of the appellate court is affirmed.
Estates of Decedents. — As to Laches in Applying for Orders to Sell
the real property of a decedent to pay debts, see the note to Killough
V. Hinton, 26 Am. St. Eep. 22. A delay for more than seven years
after the grant of letters of administration before attempting to
subject the land of an intestate to the payment of his debts will bar
such proceeding, where the only excuse for the delay is that the values
of real estate in the city where the land is situated were declining
during that time: Brogan v. Brogan, 63 Ark. 405, 58 Am. St. £ep.
124.
FISCHER V. BUTZ.
[224 111. 379, 79 N. E. 695.]
PABTITION — Power Conferred Upon Executors or Trustees to
Make, When Exclusive. — If a testator by his will vests in his executors
authority to partition his real property among his heirs and devisees,
a court of equity will not take the execution of the trust out of their
hands unless they have abused it or have for an unreasonable time re-
fused to exercise it. (pp. 163, 164.)
PARTITION — Dismissal of Bill for Because Power to Partition
is Vested in Executors. — A bill filed for the partition of real property
of a testator or decedent will be dismissed where his executors are,
by the will, vested with authority to make partition, and only four
months and a half have elapsed since the death of the testator and
but three and a half months since the admission of the will to probate.
They should be allowed time to ascertain whether and to what extent
the estate is indebted, and to so inform themselves as to intelligently
exercise their discretion, (p. 164.)
Dec. 1906.] Fischer v. Butz. 161
PARTITION, Exercise of Power of by Executors Though There
axe Conflicting Claims of Title. — A claim by a woman that she is the
widow of the testator by virtue of a common-law marriage does not
constitute a sufficient ground for the taking of jurisdiction by a court
of equity of a suit to partition his property commenced by one of his
heirs, where the executors are, by the will, given power to make parti-
tion and have not refused nor unreasonably delayed to exercise
their power, (pp. 164, 165.)
PAETITION. — Jurisdiction of the Court to Make Partition of
the Projwrty of a Decedent, he having vested his executors with power
to partition it, cannot be sustained on the ground that when the
suit for partition was commenced, it could not be known whether the
personal property would be sufficient to pay his debts and legacies.
It will be no hardship to the heirs and devisees if they are compelled
to delay partition until the expiration of the time allowed for filing
claims in the probate court against the estate, (p. 165.)
Rosenthal, Kurz & Hirschl, for the appellant.
Mason & Wyman and Vincent D. Wyman, for the appel-
lees.
3*^0 FARMER, J. This was a suit for the partition of the
real estate owned by Joseph Fischer at the time of his
death. The bill alleges that said Joseph Fischer died tes-
tate December 2, 1904; that he left no widow surviving him,
but left as his children, Mary L. Zuttermeister, Herman H.
Fischer, Oscar Fischer and Arthur Fischer, the last two
named being minors; that George C. Fischer, a son of the
testator, died before the death of .his father, leaving no
childen, but leaving the complainant, Josephine Fischer, his
widow. The will of Joseph Fischer, after directing the
payment of his debts and a bequest of five hundred dollars
to Sophie Butz, gave all the rest, residue and remainder of
his estate, real, personal and mixed, to his children in
equal parts, share and share alike. The will further pro-
vided that if any child died before the death of the tes-
tator, leaving no children but leaving a husband or wife,
such surviving husband or wife should receive one-third of
the share of such deceased child, the other two-thirds to be
divided equally among the testator's surviving children.
Appellant, as surviving wife of George C. Fischer, deceased,
filed a bill for partition, claiming to be the owner of an
undivided one-fifteenth of the real estate owned by the
testator at the time of his death. The will was executed
in March, 1901, and by it the testator appointed his tliree
adult children, Mary L. Zuttermeister, George C. Fischer
Am, St. Bep., Vol. 115—11
162 American State Reports, Vol. 115. [Illinois,
and Herman H. "®* Fischer, or the survivors of them, ex-
ecutors. After naming them as such executors and direct-
ing that they be allowed to qualify without giving bond,
the will reads: "And I hereby give and grant to the said
executors full power and authority to settle my estate in
such manner as to them may seem best ; to compromise
and compound all claims and demands in favor of or
against my estate ; to give full discharges and acquittances ;
to sell, convey, mortgage or partition any part or all of
my estate for the purpose of settlement thereof, and to do
all acts which they may deem necessary or advisable in the
administration of my estate, without any order of court."
The bill made Sophie Butz a defendant, and alleged that
she falsely claimed and pretended to be the widow of
Joseph Fischer, deceased; alleged she was not such widow;
that she had never been married to Joseph Fischer, and
asked that the court decree that she is not the widow of
Joseph Fischer, and has no interest, as widow, in his estate.
Sophie Butz answered complainant's bill and filed a cross-
bill, by which she claimed to be the widow of Joseph
Fischer, deceased, by virtue of a common-law marriage be-
tween them. The executors and devisees of the will filed
an answer admitting the material allegations of the bill,
and averring that by virtue of the authority of the will em-
powering the executors to make partition of the real estate
of the testator without going into court, said executors did,
on seventeenth day of May, 1905, by their deed of partition,
convey and set off to the complainant, as and for her one-
fifteenth share in the real estate of the testator, lot 14 in
the bill described, subject to a trust deed in the nature of
a mortgage to secure a note for the sum of nine hundred
dollars. The answer avers that the said lot, subject to the
encumbrance, was of the value of one-fifteenth part of all
the real estate described in the bill. The cause was re-
ferred to the master to take proof and report his conclu-
sions. After hearing the evidence the master reported that
the executors of the will of Joseph Fischer, deceased, acting
within the powers vested in- them by said will, *** had
partitioned and set off to the complainant, in fee simple, her
full share and interest in the real estate of testator, and
that she had no title or interest in any of the other real
estate she sought to partition and was not entitled to any
Dec. 1906.] Fischer v. Butz. 163
relief prayed in her bill. He also found and reported
against the claim of Sophie Butz made by her cross-bill, and
recommended that both the original and cross-bills be dis-
missed. A decree was entered in accordance with the
recommendations of said report of the master, dismissing
both the original and cross-bills. From that decree com-
plainant in the original bill has prosecuted this appeal. No
appeal was prosecuted by Sophie Butz, and the correctness
of the decree in dismissing her cross-bill is not involved
in this record.
The question to be determined is, whether the power con-
ferred by the will upon the executors to partition the land,
and the partitioning and setting off to appellant by them
of her share of the real estate, precluded her from main-
taining a bill for partition.
The will of Joseph Fischer was admitted to probate on
the seventh day of January, 1905. Appellant filed her bill
for partition April 18, 1905. The decree finds that the
executors prepared a deed May 17, 1905, conveying to ap-
pellant the premises partitioned and set off to her ; that said
deed was acknowledged June 1, 1905, recorded June 2, 1905,
and mailed to appellant August 21, 1905, and that appellant
in due time notified the executors that she refused to accept
the deed.
That the will conferred power upon the executors to par-
tition the real estate of the deceased is not disputed. Ap-
pellant's contention is, that the power in the executors to
make partition is merely authority to do so if they deem
it advisable, and this power is subject to be defeated by a
bill for partition being filed before the power is exercised.
It is also urged that Sophie Butz claimed to be the widow
of testator, and that this clouded the title to his real es-
tate, and that this cloud could only be removed by a court
of equity, and afforded ^**^ additional reasons why appel-
lant's bill was proper and should have been sustained.
"We are of opinion it was the intention of the testator
that the power to partition his lands should be lodged in
his executors at least for a reasonable time after his death.
He is presumed to have known that, in the absence of re-
strictions in his will to the contrary, his devisees, or any
of them, would have had the right to invoke the aid of a
court of chancery for partition, and whether he made the
164 American State Reports, Vol. 115. [Illinois,
duty to partition mandatory upon his executors or not, the
fact that he gave them the power to do so, we think, shows
his intention to have been that they should have had at
least a reasonable time in which to exercise the power. It
was said in Story v. Palmer, 46 N. J. Eq. 1, 18 Atl. 363:
"The bill in this case was filed within a few months of
the death of the testator. The estate is a very large one.
The trustees need time for consideration, and it appears
to me that before the bill was filed sufficient time was not
allowed them to agree as to the execution of the trust.
It is to be expected that trustees, especially where the estate
is large, will have temporary disagreements as to the proper
methods of executing the trust. Reasonable time must be
allowed them to ascertain and consider the elements that
should influence and control their judgment."
The power to partition was a special trust and confi-
dence reposed in his executors by the testator, and a court
of equity will not take the execution of that trust out of
their hands unless they have abused it or refused for an
unreasonable time to execute it themselves. "A court of
equity will examine into the conduct of a trustee in the
execution of his discretionary powers, and will assume con-
trol over the trustee's conduct, and, if need be, will take
upon itself the execution of the trust. But the court will
exercise this prerogative with great caution, and will not
displace the trustee from exercising his functions unless,
upon a consideration of the reasons and grounds upon
which he has acted, ^^^ it appears that he has abused his
trust and that his acts in the premises have not been
within the limits of a sound and honest execution of the
trust": Story v. Palmer, 46 N. J. Eq. 1, 18 Atl. 363. Of
course, a court of equity would take upon itself the execu-
tion of the trust if those charged with it by the will were
fraudulently or unfairly dealing with the property to the
detriment of the beneficial owners: Dickson v. New York
Biscuit Co., 211 111. 468, 71 N. E. 1058 ; Story v. Palmer, 46
N. J. Eq. 1, 18 Atl. 363 ; Perry on Trusts, sees. 510, 511. The
bill in this case was filed four and one-half months after
the death of the testator, and three and one-half months
after the will was admitted to probate. No demand or re-
quest was made upon the executors for partition before it
was filed. Indeed, the exercise of some judgment and rea-
Dec. 1906.] Fischer v. Butz. 165
son able discretion upon the part of the executors would for-
bid a partition and distribution of the real estate at so early
a date after letters testamentary were issued, for it could
not be known then certainly what the indebtedness of the
estate w^as. It surely cannot be that whether the executors
should be permitted to exercise the power and discharge
the trust reposed in them by the testator would depend
upon whether they could make the partition before one
of the devisees could get a bill on file for that purpose. It
is not pretended there was any fraud or unfairness in set-
ting off to appellant her share of the land, or that what
was set off to her was worth less than the value of her
interest in the premises. The decree recites that appellant
offered no evidence on this question, and finds, from the
evidence offered by the executors, that the partition was
a fair and honest one and that the land set off to her was
her full share of the real estate.
We do not think the pretense of Sophie Butz that she
was the widow of Joseph Fischer by virtue of a common-
law marriage w^ith him constituted sufficient grounds for
taking from the executors the powers and duties conferred
upon them by the will. The mere fear that some designing
adventuress might seek to establish some fraudulent claim
**** upon property would not authorize a court of equity,
on appellant's motion, to assume the execution of the
trust. And this is especially true under the facts in this
case as found by the decree. The decree finds that at the
time of the probate of the will, also at the time of the
death of Joseph Fischer, and at a time about six months
prior thereto, there were rumors in the neighborhood where
he lived that he and Sophie Butz were married, and said
claim by Sophie Butz became known to all the children of
Joseph Fischer at the time his will was admitted to pro-
bate. The decree further finds that at all times since the
death of Joseph Fischer his executors and iieir at law Avere
in possession of abundant evidence establishing the fact
that said Sophie Butz was not married to and was not the
widow of Joseph Fischer. Up to the time the bill in this
case was filed by appellant, Sophie Butz had made no move
to establish her claim. She made no resistance to the pro-
ceeding when the will was admitted to probate, proof of
heirship made and letters testamentary granted.
166 American State Reports, Vol. 115. [Illinois,
It is also urged by appellant that partition in equity was
necessary because it could not be known when the bill was
filed whether the personal property would be sufficient to
pay the debts and legacies, and if the partition was made
by the executors, it could not be known whether the lands
were free from liability on account of indebtedness of the
estate. It does not appear that any emergency existed for
partition that required a court of equity to so far take
charge of the administration of the estate as to determine,
in advance of the time allowed by law for determination
in the probate court, whether the personal estate was suffi-
cient to pay the indebtedness, so that the partition might
be made. It would not be the imposition of a hardship on
a tenant in common if partition were delayed until the
expiration of the time allowed by law for filing claims in
the probate court against an estate. It is only then that it
can be ascertained certainly what the liabilities of the
estate are.
386 ^g ^j.Q Qf opinion the filing of the bill by appellant
did not defeat the power conferred upon the executors by
the will, and that the superior court properly dismissed
the bill. Said decree is therefore affirmed.
Partition of the Estates of Decedents in connection with the distribu-
tion thereof is considered in the note to Buckley v. Superior Court,
41 Am. St. Eep. 140.
ALDRICH V. PEOPLE.
[224 111. 622, 79 N. E. 964.]
ItABCENY — Goods Obtained by Trick. — If the owner of goods
alleged to have been stolen parts with both the title and the posses-
sion to the thief, not expecting the goods to be returned to the owner
or to be disposed of according to his directions, neither the taking
nor the conversion amounts to larceny, though the owner was induced
to part with the title and possession through the fraud or mis-
representation of the thief, (p. 168.)
LARCENY. — If the Owner of Goods Parts with the Possession,
but Betains the Title, expecting and intending that the goods shall
be returned to him or disposed of in some particular manner agreed
upon, the subsequent felonious conversion of the property by the
Feb. 1906.] Aldrich v. People. 167
alleged thief relates back and makes the taking and conversion lar-
ceny, (p. 168.)
LAECENY. — Every Larceny Includes a Trespass, (p. 168.)
LABCENY of Property in Possession of Servant. — The fact
that a servant in whose possession property is consents to its taking
will not prevent the act being larceny, he having no authority to
consent, and the wrongdoer being aware of that fact. (p. 169.)
LARCENY. — The Asportation Necessary to Larceny May be
Effected by an innocent human agency as well as by mechanical
agency or by the offender's own hands, (p. 170.)
LAECENY Effected by Shifting the Checks ota Baggage.— If
a larceny is effected by shifting the checks on baggage which is in
the hands of a transportation company, and thereby an agent of such
company is allowed to further the criminal purpose by delivering the
baggage to a person not entitled thereto, who receives and converts
it to his own use, having in his own mind at all times the felonious in-
tent to steal the property, he is guilty of larceny, (p. 171.)
TRIAL — Construction of Instructions. — A charge to the jury
that if they find that the accused or any other witness has willfully
and corruptly testified falsely to any fact material to the issue, they
have the right to entirely disregard his testimony, except in so far
as it is corroborated by other evidence of facts and circumstances
in evidence, is not susceptible of the construction that the jury may
disregard the testimony of the defendant if some other witness has
testified falsely, (pp. 171, 172.)
Prosecution and conviction for larceny. In July, 1905,
Miss Barr checked her trunk at Grand Haven, Michigan,
for Chicago, and took passage on a steamship of the Good-
rich Transportation Company. At Chicago, she gave the
check for her trunk to a transportation company to be
transferred to the Burlington depot and checked to Oak-
land. California. On arriving at Oakland and giving her
check to a transfer company, it brought a trunk to her
which she at once discovered was not hers, although it had
a check attached corresponding to the " one she had re-
ceived in Chicago. The evidence tended to show that after
Miss Barr passed through Chicago, a man appeared at the
baggage-room of the Goodrich Transportation Company
with two trunks, bought a ticket, and checked them to Mil-
waukee. It was subsequently discovered that these trunks
were very light and apparently empty and had had their
locks broken. The defendant presented checks and de-
manded the trunks. One of these was afterward identified
as Mi.ss Barr's, and there was evidence tending to show that
the defendant had secured possession of her trunk by hav-
ing a duplicate of the check that was originally attached
to the trunk delivered her in California.
168 American State Reports, Vol. 115. [Illinois,
Cantwell & Erbstein and Charles P. R. Macauley, for the
plaintiff in error.
W. H. Stead, attorney general, John J. Healey, state's
attorney, John R. Newcomer and Howard 0. Sprogle, for
the people.
«2» VICKERS, J. 1. The court instructed the jury, as
a matter of law, that if one obtains property from the owner
or custodian' thereof by some sort of a trick or device,
for the purpose of stealing and converting the same to his
own use, he will be guilty of larceny. Error is assigned
upon the giving of this instruction. The contention of
plaintiff in error is, that if the property was obtained with
the consent of the transportation company it would not
amount to larceny, even though such consent was obtained
by means of a trick or device and with the intention of
stealing the same.
It is an established rule of the common law relating to
the offense of larceny that if the owner of the goods alleged
to have been stolen parts with both the possession and the
*** title of the goods to the alleged thief, not expecting the
goods to be returned to the owner or to be disposed of in
accordance with his directions, then neither the taking
nor the conversion amounts to larceny; and this is true
even where the owner is induced to part with the title and
possession through the fraud and misrepresentation of the
alleged thief. If, however, the owner merely parts with
the possession and retains the title, expecting and intending
that the goods shall be returned to him or disposed of in
some particular riianner agreed upon, in such case the sub-
sequent felonious conversion of the property by the alleged
thief wnll relate back and make the taking and conversion
a larceny : Welsh v. People, 17 111. 339 ; Stinson v. People,
43 111. 397 ; Murphy v. People, 14 111. 528 ; Johnson v. People,
113 111. 99 ; Quinn v. People, 123 111. 333, 15 N. E. 46 ; Doss
V. People, 158 111. 660, 49 Am. St. Rep. 180, 41 N. E. 1093 ;
Steward v. People, 173 111. 464, 64 Am. St. Rep. 133, 50
N. E. 1056 ; Bergman v. People, 177 111. 244, 52 N. E. 363.
The doctrine illustrated and applied in the above cases
is based on the rule of the common law that every larceny
includes a trespass, and since the alleged thief could not
commit a trespass on property in his possession and re-
Feb. 1906.] Aldrich v. People. 169
specting which the owner had parted with the possession
and title, such property could not be the subject of larceny
by the fraudulent possessor. The above rule does not, in
our opinion, have any application to the case at bar, for the
reason that the Goodrich Transportation Company held the
trunk and its contents merely as bailee of the rightful
owner, of which plaintiff in error must, upon the theory of
the prosecution, be presumed to have had notice, and there-
fore such transportation company had no authority to
consent to the title passing, with the possession, to plaintiff
in error. But even if it could be held that the corporation
could have given such consent by its proper officers, it cer-
tainly cannot be said that the mere act of its servants in
turning over the trunk to plaintiff in error upon the mis-
taken supposition that he was entitled to the possession
thereof, would amount to such a consent as is necessary to
bring the case within the rule contended ^^"^ for by plain-
tiff in error. In IMcClain on Criminal Law (volume 1, sec-
tion 558) it is said: "The fact that the servant in whose
possession the property is consents to its taking will not
prevent the act being larceny, he having no authority to
consent, and the wrongdoer being aware of that fact": State
V. McCartey, 17 Minn. 76 ; People v. Griswold, 64 Mich. 722,
31 N. W. 809 ; State v. Edwards, 36 j\Io. 394. It seems clear,
on principle, that if property is obtained from an infant
or an insane person, who is legally disqualified from giving
consent, with the felonious intent to steal the same, such
consent could not be availed of as a defense to a charge of
larceny. The same principle ought to apply to bailees,
whose interest in the property is known to the alleged thief.
In our opinion the case at bar is not controlled by the
principle contended for bj' the plaintiff in error. The case
comes within the rule laid down in Commonwealth v. Barry,
125 Mass. 390. This case, in all of its essential facts, is like
the case at bar. The charge was for the larceny of a trunk,
and the offense was committed by the shifting of checks, as
is alleged in the case at bar. In disposing of the case the
court said: "It does not appear that the question whether
there was an asportation at or before the changing of the
checks was raised at the trial. An asportation at that pre-
cise time was unimportant. The real question was whether
the defendant then, feloniously and with an intent to steal.
170 American State Reports, Vol. 115. [Illinois,
set in motion an innocent agency by which the trunk and its
contents were to be removed from the possession of the
true owner and into the defendant's possession, and by
means of such agency effected the purpose There is
no occasion that the carrying away be by the hand of the
party accused, for if he procured an innocent agent to take
the property, by means of which he became possessed of it,
he will himself be the principal offender: 3 Chitty on
Criminal Law, 925. It is held to be larcenj^ if a person in-
tending to steal my horse take out a replevin and thereby
have the horse delivered to him by the sheriff, or if one
intending to rifle ®^* my goods get possession from the
sheriff by virtue of a judgment obtained without any the
least color or title, upon false affidavits, etc., in which cases
the making use of legal process is so far from extenuating
that it highly aggravates the offense by the abuse put on
the law in making it serve the purposes of oppression and
injustice": 1 Hawkin's Pleas of the Crown, 333, par. 12;
1 Hale's Pleas of the Crown, 507.
It will thus be seen that an asportation may be effected
by means of innocent human agency as well as mechanical
agency, or by the offender's own hands. One may effect an
asportation of personal property so as to be guilty of lar-
ceny by attaching a gas-pipe to the pipes of the company
and thus draw the gas into his house and consuming it
without its passing through the meter: Clark & Marshall
on Law of Crimes, 446, and cases cited in note; Woods v.
People, 222 111. 293, 113 Am. St. Rep. 415, 78 N. E. 607.
From these cases the law appears to be well settled that
where, with the intent to steal, the wrongdoer employs or
sets in motion any agency, either animate or inanimate,
with the design of effecting a transfer of the possession of
the goods of another to him in order that he may feloni-
ously, convert and steal them, the larceny will be complete,
if, in pursuance of such agency, the goods come into the
hands of the thief and he feloniously converts them to
his own use, and in such case a conviction may be had upon
a common-law indictment charging a felonious taking and
carrying away of such goods. If in the case at bar the
accused shifted the checks on the trunks, by means of which
the servants of the transportation company were innocently
led to further the criminal purpose by delivering the trunk
Feb. 1906.] Aldrich v. People. 171
in question to the accused, who received and converted the
same to his own use. and if there was in the mind of the
plaintiff in error a felonious intent to steal this property
pervading the entire scheme and attending every step of
it, then he is guilty of larceny, and the instruction under
consideration, as applied to such a state of facts, is a cor-
rect statement of the law, and there was no error in giving
it to the jury.
®^ 2. Instruction No. 2 given on behalf of the people
contains the same principle of law as No. 1, and the objec-
tions thereto are disposed of by the foregoing discussion of
the first instruction.
Instruction No. 3 relates to the count in the indictment
charging plaintiff in error with receiving stolen property.
Since the jury acquitted plaintiff in error of this charge we
need not consider the exception to this instruction.
3. Instruction No. 7 given for the people is also excepted
to. That instruction is as follows: "The court instructs
the jury, as a matter of law, that in this state the accused
is permitted to testify in his own behalf; that when he does
so testify he at once becomes the same as any other wit-
ness, and his credibility is to be tested by and subjected
to the same tests as are legally applied to any other wit-
ness; and in determining the degree of credibility that shall
be accorded to his testimony, the jury have a right to take
into consideration the fact that he is interested in the re-
sult of this prosecution, as well as his demeanor and con-
duct upon the witness-stand; and the jury are also to take
into consideration the fact, if such is the fact, that he has
been contradicted by other credible witnesses. And the
court further instructs the jury that if, after considering all
the evidence in this case, they find that the accused or any
other witness has willfully and corruptly testified falsely to
any fact material to the issue in this case, they have the
right to entirely disregard his testimony, excepting in so
far as his testimony is corroborated by other evidence or
facts and circumstances in evidence."
The objection to this instruction, as stated by plaintiff
in error in his brief is, that it is erroneous in informing
the jury that if they found that any witness had committed
perjury they had a right to disregard the testimony of the
defendant. This argument is based on the assumption that
172 American State Reports, Vol. 115. [Illinois.
the pronoun "his," in the third line from the bottom of the
instruction, refers to the defendants only, and not to the
^® defendant "or any other witness." This construction
is as illogical as it is ungrammatical. The language of the
instruction does not mean that the jury should disregard
the defendant's testimony if some other witness had will-
fully and corruptly testified falsely to some material fact
in issue, and we cannot believe that anyone with intelli-
gence enough to serve on a jury would understand the in-
struction as announcing a rule so unreasonable and absurd.
Other objections to the instructions given, as well as the
exceptions to the refusal of the court to give some and to
the modification of other of the instructions of plaintiff in
error, have all received our careful consideration, and we
have reached the conclusion that no error exists for which
the judgment below should be reversed. Accordingly, the
judgment below should be and is affirmed.
For Authorities bearing upon the principal case, see the note to
People V. Miller, 88 Am. St. Eep. 559, on larceny.
CASES
IN THE
SUPREME COUKT
OP
KANSAS.
CLARK V. TORONTO BANK.
[72 Kan. 1, 82 Pac. 582.]
BANKS AND BANKING — Unaccepted Checks as Assignment
of Deposit. — An unaccepted cheek or draft in the usual form does not,
in the absence of exceptional circumstances, amount to an assign-
ment, in law or equity, of any part of the drawer's deposit in bank,
(p. 175.)
S. C. Holmes, for the plaintiff in error.
"W. S. Marlin, for the defendants in error.
» MASON, J. B. B. Clark, a resident of Iowa, sold
some cattle in Woodson county, Kansas, through an agent,
who accepted in payment a check drawn on the Toronto
Bank, in that county. The agent presented the check at
the bank, and upon his request was given in payment a
draft payable to the order of his principal, drawn by the
Toronto Bank upon a Kansas City bank against a fund
then on deposit there to its credit. Shortly afterward
the Toronto Bank was closed by the bank commissioner,
and in due course of time a receiver was appointed. The
draft was presented for payment to the Kansas City bank,
which, having notice of the failure of the issuing bank,
refused for that reason to pay it. Clark, the holder of the
draft, brought an action against the receiver, asserting the
right to recover from him the full amount of the draft
irrespective of the amount the failed bank might be able
to pay its general creditors. He was denied relief and now
prosecutes error.
(173)
174 American State Reports, Vol. 115. [Kansas,
In the petition an attempt was made to give the trans-
action described the color of a special deposit, or a con-
tract for the transferring of a fund in specie from Toronto
to the plaintiff's home in Iowa. As clearly appears from
the statement made, however, the facts will not bear that
construction. The transaction was the ordinary one of the
purchase of a draft for convenience in the remitting of
money, and the giving to it of a different name cannot alter
its essential character. In a stipulation regarding the facts
upon which, together with the plaintiff's evidence, the case
was submitted, it was stated that the plaintiff was at no
time a creditor of the failed bank, but this statement can-
not overcome the effect of the specific facts admitted and
shown, if inconsistent with them. It must be interpreted as
meaning either that the ^ plaintiff was not a creditor of
the bank, except so far as that relation was created by the
facts already recited in detail, or as a mere conclusion of
law, to be disregarded by the court if found to be incor-
rect.
An effort is also, made to build up a right to have the
money paid by plaintiff to the Toronto Bank treated as a
trust fund, upon the theory that it was a deposit unlaw-
fully received by the officers of the bank while it was in-
solvent and while they knew of its insolvency. If the facts
in this case are otherwise sufficient to bring it within the
principle invoked, they fall short in this: It is shown that
the bank was insolvent when the draft was purchased, but
not that the officers were cognizant of the fact; and there
is an entire failure of any showing that the money paid
for the draft ever reached the hands of the receiver or
that the assets in his hands were increased in any way by
the transaction.
The plaintiff's action must, therefore, fail unless it can
be said that the issuance of the draft operated to transfer
to him the equitable title to so much of the money of the
Toronto Bank then on deposit in the Kansas City bank as
it called for, in which case the receiver, who succeeded
only to the rights of the failed bank and was entitled only
to its assets, could have no valid claim upon that portion
of the deposit. This theory has received the support of
a number of courts and is the settled law in several of the
states. It is adopted by Mr. Daniel in his work on Nego-
Oct. 1905.] Clark v. Toronto Bank. 175
tiable Instruments (volume 2, fifth edition, section 1643).
Nevertheless, the great weight of authority is to the effect
that an unaccepted cheek or draft in the usual form does
not, in the absence of exceptional circumstances, amount to
an assignment, in law or equity, of any part of the drawer's
deposit : 5 Cyc. 536 ; 2 Am. & Eng. Ency. of Law, 1064 ; 4
Century Digest, cc. 1247-1250. This rule has frequently
been enforced in controversies between the holder of a
draft and the assignee or receiver of its insolvent drawer:
Fourth Street Bank v. Yardley, 165 * U. S. 634, 17 Sup.
Ct. Rep. 439, 41 L. ed. 855 ; Covert v. Rhodes, 48 Ohio St.
66, 27 N. E. 94, and cases cited ; Attorney General v. Conti-
nental Life Ins. Co., 71 N. Y. 325, 27 Am. Rep. 55 ; Akin v.
Jones, 93 Tenn. 353, 42 Am. St. Rep. 921, 27 S. W. 669, 25
L. R. A. 523; Harrison v. Wright, 100 Ind. 515, 58 Am.
Rep. 805; Guthrie Nat. Bank v. Gill, 6 Okla. 560, 54 Pac.
434; Reviere v. Chambliss, 120 Ga. 714, 48 S. E. 122. It
has the sanction of so great a preponderance of the au-
thorities that we have no hesitation in accepting it.
A uniformity of decision in different jurisdictions upon
matters of commercial usage is especially to be desired,
and the question here presented, being of that character,
affords a strong argument in favor of a solution that shall
be in harmony with the generally prevailing doctrine. It
may be added that since this action arose the rule referred
to has been incorporated in the Kansas statute, being found
in section 196 of the negotiable instruments act (Laws 1905,
e. 310). The general adoption of substantially the same
act, in pursuance of an organized effort to secure uniformity
upon the subject, may finally make the rule of universal
application.
No exceptional circumstances being shown in this case,
it falls within the operation of the principle stated, and
the plaintiff cannot recover. The judgment is affirmed.
All the justices concurring.
Banking — Checks as Assignments. — The Authorities are at variance
on the question whether a check operates as an assignment of the
money for which it is drawn: See Pullen v. Placer County Bank.
138 Cal. 169, 94 Am. St. Rep. 19, and cases cited in the cross-refer-
ence note thereto; Turner v. Hot Springs Nat. Bank, 18 S. Dak.
498, 112 Am. St. Rep. 804; Loan and Sav. Bank v. Tarmers' etc. Bank,
74 8. C. 210, 114 Am. St, Rep. 991.
176 American State Reports, Vol. 115. [Kansas,
INTERSTATE NATIONAL BANK v. RINGO.
[72 Kan. 116, 83 Pac. 119.]
PAYMENT by Check. — The mere delivery and acceptance of
a check is not payment nor evidence of payment, (p. 181.)
PAYMENT. — Credits Made Upon Books of Account can have
no greater effect as evidence of payment than receipts given ac-
knowledging payment, and the latter, when exchanged for checks,
do not show that absolute payment was intended, (p. 182.)
BANKS AND BANKINO— Payment by Check.— If a bank hold-
ing a note for collection delivers it to an indorser on the day of ma-
turity in exchange for such indorser 's check on another bank, and
after inquiring by telephone of the drawee bank about the check,
and being informed, through mistake, that it would be paid, enters
the amount to the credit of the owner of the note, and on the next
day payment of the check, which was at no time good, is refused for
w^ant of funds, and the collecting bank delivers it to the drawer,
and immediately recovers possession of the note, these transactions
do not constitute payment of the note. (p. 182.)
BANKS AND BANKING — Note Held for Collection —Ac-
ceptance of Worthless Check — Liability of Bank. — If a bank, holding
a note for collection, surrenders it to the maker in exchange for his
worthless check upon another bank, and upon the dishonor of such
check regains possession of the note as a subsisting obligation against
all persons in interest, with no actual prejudice to the owner of the
note from the transaction, which takes place after banking hours
of one day and before their opening on the next day, no liability is
created against the collecting bank in favor of the owner of the note,
(pp. 184, 185.)
BANKS AND BANKING— Collections— Provisional Credit.—
If a note or draft is sent by one individual or bank to another bank
to collect, and to remit the proceeds to the sender, the relation of
principal and agent is created, and not that of creditor and debtor,
and having received the note or draft for collection, the collecting
bank does not owe the amount thereof to the sender until collected,
and though it may credit him in its books therefor, such credit may be
treated as provisional, and if the paper is afterward dishonored, it
may cancel the credit, (p. 186.)
BANKS AND BANKING — Collections — Erroneous Credit to
Owner of Note — Liability of Bank. — If a bank holding a note for col-
lection surrenders it to the maker in exchange for his worthless
check on another bank, and upon the dishonor of such check imme-
diately regains possession of the note as a subsisting obligation against
all interested parties, no liability arises against the collecting bank
in favor of the owner of the note from the facts that upon being
orally promised payment by mistake on the part of the bank on which
such check is drawn, it gives such owner credit for the amount, mails
him a statement to that effect, adding that the credit is subject
to collection, and gives him notice of the dishonor of the check
early in the morning of the next day after the credit is extended,
(p. 187.)
Nov. 1905.] Interstate Nat. Bank v. Ringo. 177
C. F. and S. D. Hutchings, MeFadden & Morris and W.
R. Smith, for the plaintiff in error.
S. D. Bishop, A. C. Mitchell, I. N. Watson and E. C. Mes-
ervey, for the defendants in error.
**'' MASON, J. Ringo & Askew, residing in Oklahoma,
gave their note for $10,209.63 to Ladd, Penny & Swazey,
commission merchants, of Kansas City, due without grace
June 14, 1900, secured by a mortgage on cattle, which was
duly filed for record. The payees sold the note to the
Watkins National Bank of Lawrence, which sent it for
collection to the Interstate National Bank at Kansas City
a few days before its maturity. To meet this note the
makers, on June 5, 1900, executed a new note, and a mort-
gage on the same cattle securing it, and sent it to Ladd,
Penny & Swazey with directions to sell it and use the pro-
ceeds to pay the first note. Ladd, Penny & Swazey indorsed
the note to the Union Brokerage Company to find a buyer
for it. The Union Brokerage Company sold the note to the
Boatmen's Bank of St. Louis, which paid for it by giving
the brokerage company credit for the amount. The Union
Brokerage Company paid Ladd, Penny & Swazey for the
note by giving them its check on the Merchants' Bank of
Kansas City. Ladd, Penny & Swazey had at the time issued
cheeks on the Merchants' Bank which exceeded the amount
of their deposit by $11,393.92. To provide for the pay-
ment of these cheeks, upon receiving notice from the bank
that they had been presented and would not be paid un-
less such provision were made, they, on June 13th, depos-
ited the check given them by the Union Brokerage Com-
pany for the Ringo & Askew note, and the checks were
paid by reason of this deposit. The deposit was made in
the Interstate National Bank to the credit of the Merchants'
Bank, in **® accordance with an existing arrangement be-
tween the banks and Ladd, Penny & Swazey.
In the afternoon of June 14th the collector of the Inter-
state National Bank, as was his custom, took the note
which had been sent to it for collection by the "Watkins
bank, carried it to the office of Ladd, Penny & Swazey, and
left it there, going on with other business. Later in the
afternoon he returned to the office and took from a basket,
Am. St. Rep., Vol. 115—12
178 American State Reports, Vol. 115. [Kansas,
where it had been left for him, a check drawn by Ladd,
Penny & Swazey on the Merchants' Bank, payable to the
Interstate bank, for the amount of the note. There was no
conversation on the occasion of either visit. The collector
took the check to the Interstate bank, letting the note and
mortgage remain with Ladd, Penny & Swazey.
Previous to this time (and the arrangement still sub-
sisted) the Merchants' Bank had authorized the Interstate
bank to pay and charge to its account any checks drawn
by Ladd, Penny & Swazey upon the Merchants' Bank that
were stamped "Interstate National Bank" under or across
the words "Merchants' Bank." Where a check drawn by
this firm upon the Merchants' Bank but not bearing the
stamp "Interstate National Bank" was presented at the
latter bank, it was the custom to call up the Merchants'
Bank by telephone, ask instructions, and be governed by
the reply.
The check under consideration bore no such stamp. "When
it was delivered by the collector to the teller of the Inter-
state bank a little after 3 o'clock he called up the INIer-
chants' Bank and inquired if it was good. The officer of
the Merchants' Bank who responded to the inquiry under-
stood that another check was referred to — one for a smaller
amount given by Ladd, Penny & Swazey to a different
payee — and answered that it was good and that his bank
would pay it. Relying upon this assurance the Interstate
bank credited ^^^ the Watkins bank with the amount of
the check and mailed to it a postal card reading as fol-
lows:
"J. D. Robertson, Prest.
"Lee Clark, V.-prest. Wm. C. Henrici, Cash.
"THE INTERSTATE NATIONAL BANK.
"Stock-yards Station, Kansas City, Kan.
"June 14, 1900.
"Yours of received with enclosures as stated.
Due diligence will be observed in the selection of banks or
agents for the collection of all papers out of the city, but
this bank will not be responsible for the failure or negli-
gence of such bankers or agents. All items credited sub-
ject to payment.
- "Credited: Entered for collection:
"No. 16,513. $10,209.63. T7. N. Bank, June 15, 1900."
Nov. 1905.] Interstate Nat. Bank v. Ringo. 179
It also mailed the check to the Merchants' Bank for col-
lection and credit. The Merchants' Bank, about two hours
after the conversation related, discovered its mistake and
attempted to reach the Interstate bank by telephone, but
was unable to do so. At half-past 8 the next morning,
however, it did so, explained the misunderstanding of the
day before, said that Ladd, Penny & Swazey had no funds
to meet the check, and asked in substance to be relieved of
any liability resulting from its former statement. The In-
terstate bank answered in effect that it had surrendered the
note for which the check was given and which it had held
for collection, and that it could not release the Merchants'
Bank, but that it would do what it could to assist it and for
that purpose would talk with the Watkins bank. It ac-
cordingly at once called up that bank by telephone, stated
that the notice of credit of ^ the day before had been sent
by mistake, that a check which had been given for the note
had not been paid, and asked instructions. Later in the
day the "Watkins bank directed the protest of the note, with-
out having been informed, however, of the details of the
transactions of the previous day or of the connection of
the Merchants' Bank with the matter.
The Merchants' Bank, on the morning of the 15th, re-
fused payment of the check and returned it to the *^® Inter-
state bank, which on the same morning, between 9 and 10
o'clock, sent it to Ladd, Penny & Swazey and exchanged it
for the Ringo & Askew note and mortgage. The note was
then formally protested. The Merchants' Bank, during all
of this time, carried a deposit of some $25,000 with the In-
terstate bank. At some time — the exact date does not seem
to be shown and is not important — the Interstate bank
charged the amount of the check against this deposit. On
June 16th the Watkins bank, having learned all the cir-
cumstances of the case, notified the Interstate bank that it
refused to permit the credit given it to be set aside, and
A'ould insist upon the payment of the amount. On June
18th the Interstate bank replied stating that while it had
originally credited the Watkins bank with the amount, and
charged it to the Merchants' Bank, it had now charged it
to the Watkins bank and placed it in the form of a cashier's
check, and was so holding it pending a settlement of the
matter. About a month later the Interstate bank paid the
180 American State Reports, Vol. 115. [Kansas,
money to the Merchants* Bank, upon the execution of a
bond indemnifying it against the claim of the Watkins
bank.
After 3 o'clock in the afternoon on June 14th Ladd,
Penny & Swazey took notes of the face value of $28,000
to the Merchants' Bank and asked it to accept them as col-
lateral security for all overdrafts, notes and bills of ex-
change, and to agree to pay all their checks that had been
written that day. This the bank refused to do, the officers
conducting the negotiations saying that they would have
to take the matter up with the other directors. The col-
lateral offered was left with the bank and was never re-
turned to Ladd, Penny & Swazey.
On the morning of June 15th the Union Brokerage Com-
pany saw the note and mortgage in the office of Ladd,
Penny & Swazey, in their custody and under their control.
Ringo & Askew brought a Suit against all persons inter-
ested asking that their first note be canceled, upon the
theory that it had been paid. Issues were framed *** be-
tween the various parties, findings were made embodying
substantially the facts already stated, from which the court
concluded that the note had been paid, and a judgment
was rendered decreeing the cancellation of the note, order-
ing the Interstate bank to pay its amount to the Watkins
bank, declaring that the note held by the Boatmen's Bank
was a first lien upon the mortgaged cattle, and holding
that the question of the liability of the Merchants' Bank
to the Interstate bank was not raised by the pleadings.
The Interstate bank prosecutes error.
In support of the judgment rendered it is argued that,
inasmuch as the check given by the Union Brokerage Com-
pany to Ladd, Penny & Swazey really belonged to Ringo &
Askew, it could not, under the circumstances of this case,
be diverted from its true ownership, but after its deposit in
the Merchants' Bank constituted a trust fund for the pur-
pose for which it was intended, namely, the payment of
the first Ringo & Askew note. The cases of Cady v. South
Omaha Nat. Bank, 46 Neb. 756, 65 N. W. 906, 49 Neb. 125,
68 N. W. 358, and Davis v. Panhandle Nat. Bank (Tex. Civ.
App.), 29 S. W. 926, are the strongest ones cited to sus-
tain this contention. Whether the doctrine they announce
would apply to the facts here presented need not be de«
i
Nov. 1905.] Interstate Nat. Bank v. Ringo. 181
termined, for this court has already refused to follow them :
Kimmel v. Bean, 68 Kan. 598, 104 Am. St. Rep. 415, 75
Pac. 1118, 64 L. R. A. 785. Upon the authority of that case
and Martin v. Kansas Nat. Bank, 66 Kan. 655, 72 Pac. 218,
it must be held that the proceeds of this check became the
absolute property of the Merchants' Bank, and the situa-
tion *^^ presented is no different from what it would have
been if Ladd, Penny & Swazey had spent the money which
belonged to Ringo & Askew for any other purpose of their
own, instead of using it, as they happened to do, to pro-
vide for the payment of checks issued by them upon the
Merchants' Bank. As was said in the syllabus of Martin
V. Kansas Nat. Bank, 66 Kan. 655, 72 Pac. 818: "A bank
cannot be held to account to the owner of a fimd where
such fund has been deposited by an agent in his own name
and paid out upon his check without knowledge by the
bank of any want of power on the part of the agent."
The two principal questions involved are: 1. Do the cir-
cumstances narrated show a payment of the Ringo & Askew
note so as to discharge the makers from liability upon it?
2. Was the conduct of the Interstate National Bank such
as to establish a liability against it in favor of the Watkins
National Bank?
The inquiry whether the note was paid may perhaps be
simplified by a consideration of the effect of the successive
steps in the transaction. The mere delivery and acceptance
of the check of course did not constitute a pajonent and were
no evidence of a payment : 22 Am. & Eng. Ency. of Law, 569,
par. 13. The surrender of the note (if it is to be considered as
having been surrendered) did not affect the matter one way
or the other: 22 Am. & Eng. Ency. of Law, 572, d. If the
Interstate bank had been the owner of the note, and upon
receiving the check had made entries upon its books as
though a payment had been made, this likewise would have
been immaterial, for such entries would be interpreted in
the event of the nonpayment of the check as evidencing
conditional payment only: Cheltenham Stone etc. Co. v.
Gates Iron Works, 124 111. 623, 16 N. E. 923; Turner v.
Bank of Fox Lake, 3 Keyes (N. Y.), 425. Credits made
upon books of account can have no greater effect in this
connection than receipts given acknowledging payment, and
these, where exchanged *^* for checks, do not sliow that
182 American State Reports, Vol. 115. [Kansas,
absolute payment was intended: 22 Am. & Eng. Ency. of
Law, 572, e. The fact that the Interstate bank held the note
for collection and credited the proceeds to the Watkins bank
does not call for a different rule in interpreting the entry of
such credit. Whatever effect it may have had upon the rela-
tions of the Interstate bank and the Watkins bank, it was as
to the makers of the note merely evidence of a conditional
payment.
If, then, the note was ever paid so as to protect Ringo
& Askew, this condition must have resulted from the trans-
actions between the Interstate bank and the Merchants'
Bank. In this connection it is important to notice that in
the telephone conversation between these banks on June
14th the Merchants' Bank did not authorize the Interstate
bank to pay the check out of the funds of the Merchants'
Bank then on deposit in the Interstate bank. If that au-
thority had been given and acted upon the situation would
have been the same as though the check had been presented*
at the counter of the Merchants' Bank and there accepted
for the credit of the holder. In such a case, according to
the prevailing doctrine, the check would ordinarily have
been deemed paid, whatever might have been the condition
of the account of the drawer, upon the principle that in
such circumstances the bank is bound to know of the state
of its depositor's account, and cannot be relieved from the
effect of any mistake it may make in that regard, and that
the entry of the credit closes the transaction: 2 Morse on
Banks and Banking, 4th ed., sec. 569 ; 2 Daniel on Nego-
tiable Instruments, 5th ed., sees. 1621, 1622; 5 Am. & Eng.
Ency. of Law, 1058. And if the check had been paid, of
course this would have operated to change the conditional
payment of the note into an absolute payment. But what
the ^Merchants' Bank in fact did was merely to say that
the check was good and to promise to pay it. This was
no more than an oral acceptance or certification of the
check, and was not binding by ^^^ reason of section 547 of
the General Statutes of 1901, which reads: "No person with-
in this state shall be charged as an acceptor of a bill of
exchange, unless his acceptance shall be in writing, signed
by himself or his lawful agent."
A bank check is held to be a bill of exchange within the
meaning of this section: Eakin v. Bank, 67 Kan. 338, 72
Nov. 1905.] Interstate Nat. Bank v. Ringo. 183
Pac. 874. It does not appear that the Interstate bank
charged the check to the account of the Merchants' Bank
on the 14th — the day it was given — for on that day it was
mailed to the latter bank for collection and credit. Such
an entry upon the books of the Interstate bank, however,
would have been unimportant, for it would have been made
without authority. The matter is not affected by the con-
sideration that the Interstate bank afterward attempted
to hold the Merchants' Bank liable for the payment of
the check, and accordingly made an entry upon its books
showing a deduction of the amount from the deposit ac-
count of the Merchants' Bank. The assertion by the Inter-
state bank of a claim against the Merchants' Bank which
could not be maintained did not operate by estoppel or
otherwise to prevent its standing upon any legal right it
might have against Ringo & Askew. It follows that the
trial court erred in concluding that the facts found showed
that the Ringo & Askew note had actually been paid. As
the note until paid* was secured by a lien upon the cattle,
it was likewise error to hold that the mortgage accompany-
ing the note held by the Boatmen's Bank was a first lien.
To sustain the trial court in holding the Interstate bank
liable to the Watkins bank the defendants in error invoke
the doctrine that a collecting agent who surrenders the
note of his principal in exchange for the check of the
maker thereby assumes the risk of its payment. The plain-
tiff in error denies the doctrine, and contends that the col-
lecting agent is protected from liability in pursuing such
course by the fact that ^^'^ it is in accordance with a cus-
tom of bankers and business men of which the courts must
take notice. Of this contention it is said in Daniel on
Negotiable Instruments (volume 2, fifth edition, section
1625) : "While it may be, and as a general rule luidoubt-
edly is, the practice of creditors, in mercantile communities,
to teke checks in the collection of debts, and frequently
to surrender other instruments on receiving them, such
a practice, on the part of the principal, falls far short of
a usage which would permit the agent to do likewise":
See, also, 5 Cyc. 505, 506 ; 3 Am. & Eng. Ency. of Law, 804.
Assuming, but not deciding, that ordinarily where a bank
holding a note for collection in surrendering it to the maker
in exchange for his check upon another bank thereby makes
184 American State Reports, Vol. 115, [Kansas,
itself liable to the owner of the note for the amount, would
not this ease be taken out of the rule by the fact that the
Interstate bank regained possession of the note under the
circumstances already stated? In Daniel on Negotiable
Instruments (volume 2, fifth edition, section 1625), it is
said: "In the United States it is quite certain that a banker
or other agent, holding a bill or note for collection, would
act at his peril in delivering it up on receipt of a check
for the amount; and that if the debtor did not pay the
amount in money, and the drawer or indorsers were not
duly notified, they would be discharged, and the loss would
fall upon the collecting agent. If, indeed, on the same
day that the bill or note was due the agent received a
check for the amount and delivered up the bill or note,
but on presentment of the check at the bank, and refusal
of payment that very day, it had been returned, the bill
or note reclaimed and protested, and the drawer or in-
dorsers duly notified, then no right would be forfeited, but
the liability of all preserved. But if the agent neglected
to present the check until the next day, it would then be
too late to preserve recourse against the drawer, if a for-
eign bill, by making protest; and if in the meantime the
bank had failed, the loss would fall upon the agent."
This language makes plain the theory upon which *^^ the
rule referred to is based, which is that the collecting agent
who assumes without authority to pursue a course that
results in releasing a part of the security of the note, thus
rendering it less valuable than it was before, is justly held
to become at once liable to the owner for the full amount,
perhaps irrespective of any question of actual or probable
final loss. There is at least plausible ground for the argu-
ment that until the note is paid its owner is entitled to its
possession and to all the incidental rights attached to it,
and, therefore, an agent who fails to return either the
very thing intrusted to him, or its equivalent in money,
the only thing he is authorized to accept for it, should not
be permitted to haggle about the extent of the resulting
injury, but should be compelled to respond at once to his
principal for the amoimt of the note and to look for his
own reimbursement to whatever rights he has succeeded
in retaining against the maker. But when the note is re-
covered without its vitality or security having been in any
Nov. 1905.] Interstate Nat. Bank v. Ringo. 185
way impaired, no reason is apparent why the agent should
be liable at all, unless to the extent of any actual loss that
might have been occasioned by his act. Therefore, as sug-
gested by Mr. Daniel, a recovery of the note by the collect-
ing agent upon the very day of its surrender to the maker
retrieves any wrong thereby done to the owner. But mani-
festly the only importance of the two acts being done on
the same calendar day arises from the necessity under or-
dinary circumstances of the note being protested on the
day of its presentation in order to hold the indorsers.
In the present case there was no indorsement upon the
note except that of Ladd, Penny & Swazey, who were hard-
ly in a position to assert a right to notice of its dishonor.
Moreover, the note bore upon its face a waiver by the mak-
ers and indorsers of both protest and notice of nonpay-
ment. Therefore, the fact that the Interstate bank did not
recall the note from Ladd, Penny & Swazey on the day
upon which it was delivered ^^"^ to them is not controlling
here. The leaving of the note at the office of Ladd, Penny
& Swazey by the collector was clearly only provisional, as
well after he had obtained the check as before. The Inter-
state bank could not upon any theory be considered as
having surrendered the note until it had made inquiry of
the Merchants' Bank about the check. This was after
banking hours on June 14th. The knowledge that the
check was worthless was imparted to it before the begin-
ning of banking hours on the next day, and it at once acted-
upon the information. So far as the mere lapse of time
was concerned, the interval was more signficant than if
these acts had all been done upon the same day, and no
just cause appears for giving them any different effect
than would have resulted had the Merchants' Bank suc-
ceeded in reaching the Interstate bank by telephone at the
time it attempted to do so on June 14th for the purpose of
correcting the mistake which it then suspected had oc-
curred.
We do not understand that it is claimed, and it certainly
cannot successfully be maintained, that the mere physical
exchange of a note held for collection for a check can at
once fix a liability upon the collecting agent, irrespective
of all considerations of the subsequent conduct of the par-
ties. If after such an exchange the agent, before the maker
186 American State Reports, Vol. 115. [Kansas,
of the note left his presence, should become so far doubt-
ful of the sufficiency of the check as to insist upon and ob-
tain a retransfer of the note, this would clearly reinstate
the precise situation that existed before any surrender of
the note was made. In the present case if, when the Inter-
state bank first called up the Merchants' Bank, it had been
told that the check was worthless and had then reclaimed
the note, probably no contention would have been made
that it had incurred any liability. This is for all practical
purposes just what was done, so far as the mere matter of
time was concerned — for the delay was really insignificant.
We are, therefore, of the opinion that the recaption of the
note was accomplished *** under such circumstances as to
relieve the Interstate bank of liability, unless the matter
is affected by its entry upon its books of a credit to the
Watkins bank, and by its subsequent dealings with that
bank and the Merchants' Bank.
We cannot regard this entry of credit upon the books of
the Interstate bank as any more determinative of its re-
lations with the Watkins bank than of the question of the
payment of the note. In Midland Nat. Bank v. Brightwell,
148 Mo. 358, 71 Am. St. Rep. 608, 49 S. W. 994, it was said :
"When a note or draft is sent by one individual or bank
to another bank for collection and to remit the proceeds
to the sender, the relation of principal and agent is created,
and not that of creditor and debtor Having received
the note or draft for collection it does not owe the amount
thereof to the sender until collected, and though it may
credit in its books therefor, such a credit may be treated
as provisional if the paper is afterward dishonored, and it
may cancel the credit."
"The fact that the depositor's account is credited with
the amount of the items taken for collection does not of
itself operate to transfer the title to the paper; for, by the
custom of bankers, the collection is charged back at once
if not paid": 3 Am. & Eng. Ency. of Law, 817.
The fact that the credit was given only after the check
had been received and an inquiry made about it does not
affect the principle by which the matter is controlled. The
bank might well elect to give credit only for such collec-
tion items as upon investigation it believed reasonably cer-
tain would be paid, and to hold others without credit un-
Nov. 1905.] Interstate Nat. Bank v. Ringo. 187
til actual payment, without, by pursuing such course, bind-
ing itself to be answerable whenever its judgment that
payment would be made should prove mistaken.
The rule, already referred to, that when a bank accepts
a check and credits a depositor with it the transaction is
deemed closed and cannot be reopened for the ^^^ correc-
tion of a mistake is confined to checks drawn upon the
bank which gives the credit, and proceeds upon the prin-
ciple before stated that the bank is conclusively presumed
to know the state of its depositor's accounts. Even with
this limitation the rule has not always been approved: 1
Morse on Banks and Banking, sec. 419 ; 3 Am. & Eng. Ency.
of Law, 817, second paragraph of note 1.
In Steinhart v. National Bank, 94 Cal. 362, 28 Am. St.
Rep. 132, 29 Pae. 717, it was held, although without full
discussion, that a bank to which a note had been sent for
collection and which at the request of the maker, its cus-
tomer, charged the amount to him, marked the note can-
celed, and deposited in the mail addressed to the owner of
the note a draft for the amount, might still, upon discover-
ing that the maker was insolvent, reclaim the draft, rescind
the entry upon its books, return the note to its principal,
and by these means escape liability on its own part, such
transactions not having effected a payment of the note :
See, also, Second Nat. Bank v. Cummings, 89 Tenn. 609,
24 Am. St. Rep. 618, 18 S. W. 115; Second Nat. Bank of
Baltimore v. Western Nat. Bank of Baltimore, 51 Md. 128.
34 Am. Rep. 300.
The postal card sent to the Watkins bank is not more
effective than the credit upon the books of the Interstate
bank. Indeed, it is somewhat significant of the character
of the entire transaction that while this card acknowledged
the receipt of the note, and the entry of credit for the
amount, it also gave express notice that all items were
credited subject to payment.
The attitude of the Interstate bank toward the Mer-
chants' Bank — the attempt to insist upon the payment of
the check — cannot avail the Watkins bank, which was not
entitled to rely upon it and was not misled by it. The
positions that the Interstate bank assumed in its com-
munications with the other two banks may not have been
entirely consistent with each other, *^® but it was not re-
188 American State Reports, Vol. 115. [Kansas,
quired to determine at its peril what its obligation might
be under the law and at once act accordingly. It was
probably in doubt whether it might not be able to hold the
Merchants* Bank accountable upon its oral acceptance of
the check, and as it had funds of that bank in its custody
it prudently decided to retain enough to cover the amount
until its rights should be settled or until it was otherwise
indemnified.
The Watkins bank suffered no prejudice through the
failure of the Interstate bank to learn on the 14th that the
note would not be paid. The notice that it had been given
credit was mailed to it after half-past 3 o 'clock in the after-
noon of that day. Even if this had justified an inference
of the payment of the note, it would have been counter-
acted by the telephone message given before 9 o'clock the
next morning. In any view of the case this was timely
notice of nonpayment, and gave the Watkins bank every
opportunity to which it was entitled to protect its inter-
ests.
We are unable to attach any significance to the circum-
stance that the Union Brokerage Company saw the Ringo
& Askew note uncanceled in the possession of Ladd, Penny
& Swazey on the morning of June 15th. Nor can we be-
lieve that the case is affected in any aspect by the fact
that Ladd, Penny & Swazey deposited certain collateral
with the Merchants' Bank to secure any claims against
them, for it is expressly shown that the bank did not agree
with them to pay the check in question. The case is a
hard one for Ringo & Askew, but their misfortune results
from the misappropriation of their funds by agents of their
own selection. If the transactions between Ladd, Penny
& Swazey and the several banks had resulted in destroying
the vitality of the first note, the purely fortuitous circum-
stance of a mistake occurring in a telephone conversation
to which they were not a party would have enabled Ringo
& Askew to shift their loss to one of the banks. If any
principle of law enabled them to do this they *^* would,
of course, be entitled to the full benefit of their good for-
tune. In the absence of any such legal doctrine there is
no peculiar hardship in permitting the loss to remain where
it originally lodged, nor is any rule of equity or good con-
science thereby violated.
Nov. 1905.] Metropolitan Life Ins. Co. v. Elison. 189
The judgment is reversed and the cause remanded, with
directions to render judgment upon the findings in accord-
ance with the views herein expressed.
All the justices concurring.
Porter, J., not sitting.
Payment. — The Talcing of a Check is not usually considered as a pay-
ment of the debt for which it is taken: National Bank v. Chicago
etc. E. R. Co., 44 Minn. 224, 20 Am. St. Rep. 566; Steinhart v. National
Bank, 94 Cal. 362, 28 Am. St. Rep. 132; Johnson-Brinkman Commis-
sion Co V. Central Bank, 116 Mo. 558, 38 Am. St. Rep. 615; Burrows
V. State, 137 Ind. 474, 45 Am. St. Rep. 210; Watt v. Gans, 114 Ala.
264, 62 Am. St. Rep. 99.
A Bank WhMh Receives a note or draft for collection does not owe
the amount thereof to the sender until collected; and, although it
may enter a credit therefor in its books, the bank may treat such
credit as provisional, and cancel it if the paper is afterward dis-
honored: Midland Nat. Bank v. Brightwell, 148 Mo, 358, 71 Am. St.
Rep. 608. See, also, Steinhart v. National Bank, 94 Cal. 362, 28
Am. St. Rep. 132; Bank v. Cummings, 89 Tenn. 609, 24 Am. St. Rep,
618.
METROPOLITAN LIFE INSURANCE COMPANY v.
ELISON,
[72 Kan. 199, 83 Pac. 410.]
INSURANCE, LITE — Insurable Interest. — An nncle of an in-
sured has no insurable interest in his life by reason of kinship.
(p. 191.)
INSUBANOE, LIFE — Insurable Interest — ^Assignment. — A per-
son cannot take directly, or by assignment, a policy of insurance
on the life of one in whose life he has no insurable interest, (p. 191.)
INSUBANCE, Life — Insiirable Interest — ^Assignment of PoUcy.
An agreement by which part of the insurance provided for in a life
insurance policy is assigned by the insured and the beneficiary to
one having no insurable interest in the life of the insured, upon
consideration that the assignee is to pay all accruing premiums, is
opposed to public policy, and neither such assignee nor beneficiary
can recover on the insurance policy, (p. 193.)
INSUBANCE, LIFE — Insurable Interest — Assignment of
Policy. — A beneficiary of an insured who knowingly and purposely
sells and assigns to another, who has no insurable interest in the life
of the insured, the policy of insurance on the life of the latter, cannot
enforce the policy for his own benefit, (p. 195.)
Action by Lizzie Elison on a policy of insurance issued
on the life of her late husband, Adolph Elison, in which
190 American State Reports, Vol. 115. [Kansas,
she was named as beneficiary. She set up a contract between
herself and her husband and his uncle, Casper Elison, by
which an interest in the policy, to the extent of one thousand
dollars, was assigned to him in consideration that he should
pay the premiums on the policy. The contract was in writing,
signed by the assured, the beneficiary, and Casper Elison. It
recited that the assured had taken out a life insurance policy
in the sum of two thousand dollars on his life, the quarter
yearly premium of which was thirteen dollars and ninety-six
cents, and that it was understood between the parties that
Casper Elison should promptly pay these premiums as they
fell due for the term of twenty years, or during the life of
Adolph Elison, and that at his death, Lizzie Elison should
pay to Casper Elison the sum of one thousand dollars. Lena
Elison, the legal representative of Casper Elison, was made a
defendant, and in a cross-petition alleged that Casper Elison
had paid two premiums on the policy, aggregating twenty-
seven dollars and ninety-two cents, and she claimed a re-
covery of one thousand dollars of the insurance by virtue of
the contract of assignment. The defendant insurance com-
pany demurred to the petition of Lizzie Elison and also to
the cross-petition of Lena Elison on the ground that neither
stated a cause of action against the insurer. The trial court
sustained the demurrer as to the cross-petition, but overruled
it as to the original petition. The defendant insurance com-
pany then answered alleging that, although Adolph Elison,
in response to the answers in the application, had stated that
he was in good health and had never been sick, nor had a
medical attendant, he was then in fact ill from tuberculosis
and had been treated by a physician for that disease. Upon
a trial, the issues were found in favor of Lizzie Elison and
judgment entered against the defendant company, from which
it appealed.
J. H. Austin, for the plaintiff in error.
S. W. Wicker and Fuller & Jackson, for the defendant in
error.
202 JOHNSTON, C. J. The controlling question in the
case is, Can the beneficiary, Lizzie Elison, who joined in the
contract by which the insurance on her husband's life w&.s
assigned to Casper Elison, recover on the policy? In her
petition, and in part as a basis of recovery, she set up the
Nov. 1905.] Metropolitan Life Ins. Co. v. Elison. 191
contract, which appears to have been entered into with Cas-
per Elison twelve days after the policy was issued. The de-
murrer to the petition raised the question whether, under the
facts stated, as well as those admitted by the recitals of the
contract, she had stated a cause of action. The contract is
plain in its provisions and leaves no doubt ^^^ about the
purposes of the parties. Casper Elison agreed to pay the
premiums on the policy for twenty years, or until the death
of Adolph Elison, and in consideration therefor was to re-
ceive one thousand dollars of the insurance money to be paid
by the company. There was some claim that he was only to
be reimbursed to the extent of the payments made, but it is
expressly stated, and again repeated, that he was to receive
one thousand dollars at the death of the insured, or at the
maturity of the policy. He was to have the possession of
the policy, and the precaution was taken to provide that the
draft drawn by the insurance company in favor of Lizzie
Elison should be indorsed and turned over to the assignee.
Casper Elison was an uncle of the insured, and therefore
had no insurable interest in his life by reason of kinship :
Singleton v. St. Louis Mut. Ins. Co., 66 Mo. 63, 27 Am. Rep.
321; Prudential Ins. Co. of America v. Jenkins, 15 Ind.
App. 297, 57 Am. St. Rep. 228, 43 N. E. 1056; Appeal of
Corson, 113 Pa. 438, 57 Am. Rep. 479, 6 Atl. 213; 2 Joyce
on Insurance, sec. 1069. The consideration of the transfer
was not advances made by the uncle, nor was the transfer
made as security for any subsisting indebtedness. It there-
fore appears that Lizzie Elison, the beneficiary of the pol-
icy, undertook to assign and transfer an interest in the pol-
icy to one who had no interest in the life of the insured.
The theory of life insurance is that one who is interested
in the preservation of the life of the insured may safely take
and hold insurance, but that insurance in favor of one who
has no interest in the life of the insured — who would be in-
terested in his early death — is contrary to good morals and
a sound public policy. In the early case of Missouri etc.
Life Ins. Co. v. Sturges, 18 Kan. 93, 26 Am. Rep. 761, it was
held that such in.surance, if sustained, would open the door
to speculation and traffic in human life and invite to enter
the most shocking of all crimes, and that "of all wagering
**** contracts, those concerning the lives of human beings
should receive the strongest, the most emphatic, and the most
192 American State Reports, Vol. 115. [Kansas,
persistent condemnation." The authorities generally unite
in holding that one who has no insurable interest can no
more take an interest in a policy, valid in its inception,
by purchase and assignment than he could by direct issue
from the insurer. In Warnock v. Davis, 104 U, S. 775, 26
L. ed. 924, it was said: "The assignment of a policy to a
party not having an insurable interest is as objectionable
as the taking out of a policy in his name If there be
any sound reason for holding a policy invalid when taken
out by a party who has no interest in the life of the assured,
it is difficult to see why that reason is not as cogent and
operative against a party taking an assignment of a policy
upon the life of a person in which he has no interest."
It has been said: "The evil of wager policies would rather
be aggravated than otherwise by such a rule, because specu-
lators, desiring to indulge in this species of gambling in
human life, could more easily purchase from embarrassed
policy-holders than procure the issue of such policies directly
to themselves upon the lives of strangers. *In either case,'
as observed by a recent author in treating of this subject,
'the holder of such policy is interested in the death, rather
than the life, of the insured' ": Helmetag's Admr. v. Miller,
76 Ala. 183, 52 Am. Rep. 316.
As tending to sustain the view that a person cannot take
directly, or by assignment, a policy of insurance on the life
of one in whose life he has no insurable interest, see Cam-
mack V. Lewis, 82 U. S. 643, 21 L. ed. 244; Gilbert v. Moose's
Admrs., 104 Pa. 74, 49 Am. Rep. 570; Carpenter v. United
States Life Ins. Co., 161 Pa. 9, 41 Am. St. Rep. 880, 28 Atl.
943, 23 L. R. A. 571 ; Alabama Gold Life Ins. Co. v. Mobile
Mutual Ins. Co., 81 Ala. 329, 1 South. 561 ; Whitmore v. Su-
preme Lodge Knights and Ladies of Honor, 100 Mo. 36, 13
S. W. 495; Heusner v. Mutual Life Ins. Co., 47 Mo. App.
336; 206 Thornberg v. Aetna Life Ins. Co., 30 Ind. App.
682, 66 N. E. 922; Bayse v. Adams, 81 Ky. 368; Roller v.
Moore's Admr., 86 Va. 512, 10 S. E. 241, 6 L. R. A. 136;
Wilton V. New York Life Ins. Co., 34 Tex. Civ. App. 156, 78
S. W. 403.
In this case the interest of Casper Elison, who contracted
with the beneficiary to pay all the premiums, would have
been best subserved by the early death of Adolph Elison ;
and, in fact, death did occur in less than five months. It
Nov. 1905.] JMetropolitan Life Ins. Co, v. Elison. 193
was a matter of much concern to him whether he should get
the contingent amount of one thousand dollars for a few
premiums, or whether he should be required to pay them
during the period of twenty years. In this respect it was
more mischievous and vicious in its tendencies than many of
such arrangements, because, if the insured had lived until
the maturity of the policy, the assignee would have been re-
quired to pay even more than he was to receive. In that
event he would have paid eleven hundred and sixteen dol-
lars and eighty cents, saying nothing of interest, for the one
thousand dollars of insurance money which he would re-
ceive; and, while there would have been a profit in the early
death of the insured, his living until the end of the twenty
year period would have occasioned the assignee a substantial
loss. Contracts of this character have been frequently de-
nounced and held bad because they were regarded as wagers,
but this court has declared them to be void on the broader
ground that they are contrary to public policy.
If the transaction is tainted as to the assignee, who has no
insurable interest, how does it stand as to the beneficiary
in the contract of insurance, who participated in the wrong?
If the agreement which furnished an inducement to take
human life and a temptation to commit the most atrocious
of crimes was participated in by the beneficiary voluntarily,
how can she escape the condemnation of the law? She not
only signed the agreement, but it appears that she was to
take an active part in carrying it out, and was to receive
^**® a share of the insurance to be secured through the pay-
ment of premiums by Casper Elison.
We have given much attention to the relation which Lizzie
Elison bore to the transaction, and if we follow the rule of
Life. Ins. Co. v. McCrum, 36 Kan. 146, 59 Am. Rep. 537, 12
Pac. 517, it must be held that the whole transaction was so
tainted with illegality as to bar a recovery by her. There
appears to be no substantial distinction between this case
and the one cited. There the insurance company issued a
paid-up policy to Snyder, payable to his two daughters. He
and the beneficiaries, for a valuable consideration, joined in
an assignment of the policy to Mrs. Parker, who had no in-
surable interest in Snyder's life. After the death of Snyder,
Mrs. Parker, on learning that she could not collect the insur-
ance, transferred the policy back to the beneficiaries, who in
Am. St. Bep., Vol. 115—13
194 American State Reports, Vol. 115. [Kansas,
turn transferred it to MeCrum, and he brought an action
to recover upon the policy. It was held that McCrum stood
in the shoes of the beneficiaries; that the transaction be-
tween the beneficiaries and the assignee was contrary to pub-
lic policy, not to be tolerated by law; and that the policy
was worthless and void, not only as to the assignee but also
in the hands of the beneficiaries. In speaking of the par-
ticipation of the beneficiaries in the tainted transaction it
was remarked: "This policy was placed in her [Mrs. Park-
er's] possession, not only with the written consent of the
beneficiaries, but upon a valuable consideration paid to them
for the same; they therefore aided in creating, in the mind
of Mrs. Parker, a desire for the early death of the insured;
they held out to her the temptation to bring about the event
insured against In making the transfer and assign-
ment, and in receiving the money therefor, the beneficiaries,
Elizabeth and Desylvia Snyder, were participants with Mrs.
Parker in the attempted fraud upon the insurance company;
the whole transaction between the beneficiaries and Mrs.
Parker contravenes public policy, and the law leaves the
parties as it found them": Page 149.
**'' Attention is called to the fact that in the McCrum
case the beneficiaries received a consideration, while noth-
ing was paid by the assignee to the beneficiary in the present
case. Here Lizzie Elison procured Casper Elison to pay
the premiums upon the policy in order to keep it alive, that
she might receive a share of the insurance money. The fact
that the assignee did not pay her money directly for the
transfer did not take the vice out of the transaction nor
make it less hurtful in its tendencies. It none the less, as
was said in the McCrum case, aided in creating in the mind
of the assignee a desire for the early death of the insured,
and held out to him the temptation to bring about the event
against which the insurance was issued. In the McCrum case
the court further remarked: "If the party who attempts to
speculate in human life cannot enforce the policy which he
has purchased on the life of another, in whose life he has
no insurable interest, the beneficiaries who knowingly and
purposely sell and assign to such a person the policy on
the life of another for a valuable consideration ought not
thereafter to be permitted to enforce the same for their own
benefit It is not for the sake of the insurance com-
Nov. 1905.] Metropolitan Life Ins. Co. v. Elison. 195
pany that the transactions between the beneficiaries and Mrs.
Parker are held wrongful, but such rule is founded on gen-
eral principles of public policy forbidding speculative con-
tracts upon human life. In all such cases the courts ought
not to lend their aid to assist parties engaged in the perpe-
tration or attempted perpetration of such wrongful specula-
tions": Pages 150, 151.
The case of Powell v. Dewey, 123 N. C. 103, 68 Am. St.
Rep. 818, 31 S. E. 381, sustains the view taken in the Mc-
Crum case. There Powell took out a policy of insurance on
his own life and assigned the same to the beneficiary named
in the policy, who had no insurable interest. The assignee
paid the premiums which accrued up to the death of the in-
sured. Upon proof of death the insurance company paid
the amount of the policy to the assignee, and the executor of
Powell's estate then brought an action on behalf of the estate
208 against the assignee and the insurance company to re-
cover the insurance money. The court held that the policy
was void because of the transfer to one having no insurable
interest; that no action could be maintained upon it by the
beneficiary against the insurance company, nor could the
plaintiff, who was the representative of the insured, main-
tain an action, because, "looking at it in any view, it has its
foundation on the policy which is void": See, also Hinton v.
Mutual etc. Co., 135 N. C. 314, 102 Am. St. Rep. 545, 47 S.
E. 474, 65 L. R. A. 161.
The McCrum case is deemed to be a controlling authority
in the present one, and the court is not inclined to overrule
or modify that decision. It follows that the judgment must
be reversed and the cause remanded, with directions to sus-
tain the demurrer of the insurance company to the petition
of Lizzie Ellison.
All the justices concurring.
The Assignment of Life Insurance Policies is the subject of a note
to Chamberlain v. Butler, 87 Am. St. Rep. 484. Such an assignment
may be made, according to the better opinion, to a person having
no insurable interest in the life of the assured: Harrison v. North-
western etc. Ins. Co., 78 Vt. 473, 112 Am, St. Rep. 932; Mechanics'
Nat. Bank v. Comins, 72 N. H. 12, 101 Am. St. Rep. 650. See, how-
ever, Hinton v. Mutual Reserve etc. Assn., 135 N. C. 314, 102 Am.
St. Rep. 545, and cases cited in the cross-reference note thereto.
198 American State Bepoets, Vol. 115. [Kansas,
CITY OF SALINA v. BLAKSLEY.
[72 Kan. 230, 83 Pac. 619.]
CONSTITUTIONAL LAW— Right to Bear Arms.— A constitu-
tional provision that people have the right to bear arms for their
defense and security applies only to the right to bear arms as a
member of the state militia, or some other military organization
provided by law, and does not prevent the enactment of a valid law
prohibiting and punishing the carrying of arms or deadly weapons
by private individuals, (p. 198.)
D. Ritchie, for the appellant.
R. A. Lovitt, for the appellee.
^^^ GREENE, J. James Blaksley was convicted in the
police court of the city of Salina, a city of the second class,
of carrying a revolving pistol within the city while under
the influence of intoxicating liquor. He appealed to the
district court, where he was again convicted, and this pro-
ceeding is prosecuted to reverse the judgment of the latter
court. The question presented is the constitutionality of
section 1003 of the General Statutes of 1901, which reads:
"The council may prohibit and punish the carrying of fire-
arms or other deadly weapons, concealed or otherwise, and
may arrest and imprison, fine or set at work all vagrants and
persons found in said city without visible means of support,
or some legitimate business. ' '
Section 4 of the Bill of Rights is as follows: "The people
have the right to bear arms for their defense and security;
but standing armies, in time of peace, are dangerous to lib-
erty, and shall not be tolerated, and the military shall be in
strict subordination to the civil power."
2^* The contention is that this section of the Bill of Rights
is a constitutional inhibition upon the power of the legis-
lature to prohibit the individual from having and carrying
arms, and that section 1003 of the General Statutes of 1901
is an attempt to deprive him of the right guaranteed by the
Bill of Rights, and is, therefore, unconstitutional and void.
The power of the legislature to prohibit or regulate the car-
rying of deadly weapons has been the subject of much dispute
in the courts. The views expressed in the decisions are not
uniform, and the reasonings of the different courts vary. It
has, however, been generally held that the legislatures can
i
Nov. 1905.] City of Salina v. Blaksley. 107
regulate the mode of carrying deadly weapons, provided they
are not such as are ordinarily used in civilized warfare.
To this view there is a notable exception in the early case of
Bliss V. Commonwealth, 2 Litt. (Ky.) 90, 13 Am. Dec. 251,
where it was held, under a constitutional provision similar to
ours, that the act of the legislature prohibiting the carrying
of concealed deadly weapons was void; that the right of the
citizen to own and carry arms was protected by the constitu-
tion and could not be taken away or regulated. While this
decision has frequently been referred to by the courts of
other states, it has never been followed. The same principle
was announced in Re Brickey, 8 Idaho, 597, 101 Am. St. Rep.
215, 70 Pac. 609, but no reference was made to Bliss v. Com-
monwealth, 2 Litt. (Ky.) 90, 13 Am. Dec. 251, nor to any
other authority in support of the decision.
In view of the disagreements in the reasonings of the
different courts by which they reached conflicting conclusions,
we prefer to treat the question as an original one. The pro-
vision in section 4 of the Bill of Rights that "the people
have the right to bear arms for their defense and security"
refers to the people as a collective body. It was the safety
and security of society that were being considered when this
provision was put into our constitution. It is followed imme-
diately by the declaration that standing armies in time *^^ of
peace are dangerous to liberty and should not be tolerated,
and that "the military shall be in strict subordination to
the civil power." It deals exclusively with the military;
individual rights are not considered in this section. The
manner in which the people shall exercise this right of bear-
ing arms for the defense and security of the people is found
in article 8 of the constitution, which authorizes the organiz-
ing, equipping and disciplining of the militia, which shall
be composed of "all able-bodied male citizens between -the
ages of twenty-one and forty-five years." The militia is
essentially the people's army, and their defense and
security in time of peace. There are no other provisions
made for the military protection and seciirity of the people in
time of peace. In the absence of constitutional or legislative
authority no person has the right to assume such duty.
In some of the states where it has been held, under similar
provisions, that the citizen has the right preserved by the con-
stitution to carry such arms as are ordinarily used in civilized
198 American State Reports, Vol. 115. [Kansas,
warfare, it is placed on the ground that it was intended that
the people would thereby become accustomed to handling
and using such arms, so that in case of an emergency they
would be more or less prepared for the duties of a soldier.
The weakness of this argument lies in the fact that in nearly
every state in the Union there are provisions for organizing
and drilling state militia in sufficient numbers to meet any
such emergency.
That the provision in question applies only to the right to
bear arms as a member of the state militia, or some other
military organization provided for by law, is also apparent
from the second amendment to the federal constitution,
which says: "A well-regulated militia being necessary to the
security of a free state, the right of the people to keep and
bear arms shall not be infringed." Here also the right of
the people to keep and bear arms for their security is pre-
served, and the manner of bearing them for such purpose
**^ is clearly indicated to be as a member of a well-regulated
militia, or some other military organization provided for by
law.
Mr. Bishop, in section 793 of the third edition of his work
on Statutory Crimes, treating of this provision, which is
found in almost every state constitution, says: "In reason,
the keeping and bearing of arms has reference only to war,
and possibly also to insurrections wherein the forms of war
are as far as practicable observed."
The case of Commonwealth v. Murphy, 166 Mass. 171, 44
N. B. 138, 32 L. R. A. 606, strongly supports the position we
have taken. In that case the defendant was convicted of
being a member of an independent organization that was
drilling and parading with guns. The guns, however, had
been intentionally made so defective as to be incapable of
being discharged. The prosecution was had under a statute
which provided: "No body of men whatsoever, other than
the regularly organized corps of the militia [and certain
other designated organizations], shall associate themselves
together at any time as a company or organization, for drill
or parade with firearms, or maintain an armory in any city
or town of this commonwealth."
On the trial the defendant invoked the provision of the
Massachusetts Bill of Rights that "the people have a right to
keep and bear arms for the common defense" in support of
Nov. 1905.] City op Salina v. Blakslet. 199
his contention that he had the right to bear arms. The court
said: "This view cannot be supported. The right to keep
and bear arms for the common defense does not include the
right to associate together as a military organization, or to
drill and parade with arms in cities or towns, unless author-
ized so to do by law. This is a matter affecting the public
security, quiet, and good order, and it is within the police
powers of the legislature to regulate the bearing of arms so
as to forbid such unauthorized drills and parades."
The defendant was not a member of an organized ^^* mi-
litia, nor of any other military organization provided for by
law, and was therefore not within the provision of the Bill
of Rights and was not protected by its terms. The judgment
is affirmed.
All the justices concurring.
CONSTITUTIONAL EIGHT TO KEEP AND BEAE AEMS.
I. Effect of United States Constitution, 199.
n. Effect of State Constitutions.
a. Carrying Concealed Weapons, 200.
b. Carrying Deadly Weapons Openly, 202.
c. Miscellaneous, 203.
I. Effect of United States Constitution.
The second amendment to the United States constitution provides
that, "a well-regulated militia being necessary to the security of a
free state, the right of the people to keep and bear arms shall not be
infringed," but this does not give the right to bear arms for a nur-
pose declared unlawful or in an unlawful manner.
Such amendment means no more than that it shall not be "in-
fringed" by Congress, tuid has no other effect than to restrict the
powers of the national government: United States v. Gruikshank, 92
U. 8. 542, 23 L. ed. 588; Presser v. Illinois, 116 U. 8. 252, 6 Sup. Ct.
Rep. 580, 29 L. ed. 615; Spies v. Illinois, 123 U. 8. 131, 8 Sup. Ct.
Eep. 21, 31 L. ed. 80.
As was well said in State v. Smith, 11 La. Ann. 633, 66 Am. Dee.
208: "The state statute against carrying weapons does not contra-
vene the second article of the amendments of the constitution of the
United States. The arms there spoken of are such as are borne by
people in war or at least carried openly This [amendment]
was never intended to prevent the individual states from adopting
■aeh measures of police as might be necessary, in order to protect
the orderly and well-disposed citizens from the treacherous use of
weapons not even designed for any purpose of public defense, and
used most frequently by evil-disposed men who seek to take ad-
200 American State Reports, Vol. 115. [Kansas,
vantage over their antagonists, in the disturbances and breaches
of the peace which they are prone to provoke. There is, therefore,
nothing in the constitution of the United States which requires of
us a rigorous construction of the statute in question."
The seeond article of the amendments to the constitution of the
United States securing to the people the right to keep and bear arms
is a restriction upon the powers of the national government only, and
not upon state legislation: Fife v. State, 31 Ark. 455, 25 Am. Eep.
556; State v. Shelby, 90 Mo. 302, 2 S. W. 468; English v. State, 35
Tex. 473, 14 Am. Rep. 374; State v. Workman, 35 W. Va. 367, 14
S. E. 9, 14 L. B. A. 600. In the case last cited the court, in speaking
of the second article of the amendments of the United States con-
stitution, said that "the keeping and bearing of arms, therefore,
which, at the date of the amendment, was intended to be protected
as a popular right, was not such as the common law condemned,
but was such a keeping and bearing as the public liberty and its
preservation commended as lawful and worthy of protection. So,
also, in regard to the kind of arms referred to in the amendment,
it must be held to refer to the weapons of warfare to be used by the
militia, such as swords, guns, rifles and muskets, arms to be used in
defending the state and civil liberty, and not to pistols, bowie-
knives, brass knuckles, billies and such other weapons as are usually
employed in brawls, street fights, duels and afifrays, and are only
habitually carried by bullies, blackguards and desperadoes, to the
terror of the community and the injury of the state": State v. Work-
man, 35 W. Va. 367, 14 S. E. 9, 14 L. R. A. 600.
II. Effect of State Constitutions.
a. Carrying Concealed Weapons. — The examination as to the con-
stitutionality of state statutes relating to the keeping and bearing
arms must, under the above construction of the second article of the
amendments to the constitution of the United States, be made with
reference to the respective constitutions of those states in which exist-
ing statutes were passed. The constitutions of the several states gen-
erally provide that every person shall have the right to keep and
bear arms in the lawful defense of himself or the state. In some of
them it is added that the Jegislature shall have the right to regulate
the exercise of such right, while in others no limitation is added, and
in either case the power of the state legislatures to make the carry-
ing of concealed weapons a crime is now generally recognized and
conceded by the great weight of authority: State v. Reid, 1 Ala. 612,
35 Am. Dec. 44; Owen v. State, 31 Ala. 387; Davenport v. State, 112
Ala. 49, 20 South. 971; State v. Buzzard, 4 Ark. 18; Fife v. State,
31 Ark. 455, 25 Am. Rep. 556; Haile v. State, 38 Ark. 564, 42 Am.
Bep. 3; Nunn v. State, 1 Ga. 243; Willis v. State, 105 Ga. 633, 32 S. E.
155; State v. Mitchell, 3 Blackf. 229; In re Brickey, 8 Idaho, 507,
Nov. 1905.] City op Salina v. Blaksley. 201
]01 Am. St. Eep. 215, 70 Pac. 609; State v. Smith, 11 La. Ann. 633,
66 Am. Dec. 208; Wilson v. State, 81 Miss. 404, 33 South. 171; State
V. Wilforth, 74 Mo. 528, 41 Am. Eep. 320; State v. Shelby, 90 Mo.
302, 2 S. W. 468; State v. Speller, 86 N. C. 697; State v. Hogan, 63
Ohio St. 202, 81 Am. St. Eep. 626, 58 N. E. 572, 52 L. E. A. 863;
Walburn v. Territory, 9 Okla. 23, 59 Pac. 972; Wright v. Common-
wealth, 77 Pa. 470; Aymette v. State, 2 Humph. 151; Andrews v. State,
3 Heisk. 165, 8 Am. Eep. 8; State v. Wilburn, 7 Baxt. 57, 32 Am. Eep.
551; English v. State, 35 Tex. 473, 14 Am. Eep, 370; State v. Work-
man, 35 W. Va. 367, 14 S. E. 9, 14 L. E. A. 600. In speaking of the
constitutional right to keep and bear arms in the lawful defense of
the state or of the person, the court, in Haile v. State, 38 Ark. 566,
42 Am. Eep. 3, said that "the constitutional provision sprung from
the former tyrannical practice, on the part of governments, of dis-
arming the subjects, so as to render them powerless against oppres-
sion. It is not intended to afford citizens the means of prosecuting
more successfully their private broils in a free government. It would
be a perversion of its object, to make it a protection to the citizen,
in going, with convenience to himself, and after his own fashion,
prepared at all times to inflict death upon his fellow-citizens upon the
occasion of any real or imaginary wrong. The ' common defense ' '
of the citizen does not require that. The consequent terror to timid
citizens, with the counter violence which would be incited amongst
the more fearless, would be worse than the evil intended to be rem-
edied The clause, upon this point, of the Tennessee bill of
rights is similar to ours, except that it expressly reserves to the leg-
islature the power, 'by law to regulate the wearing of arms, with
a view to prevent crime.' We think this reservation a matter of
superabundant caution, inserted to prevent a doubt, and that un-
expressed, it would result from the undefined police powers, inherent
in all governments, and as essential to their existence as any muni-
ments of the bill of rights. Only the legislature must take care that
in regulating it does not destroy nor materially interfere with the
objects of the constitutional provision. A Tennessee law passed un-
der the constitution of 1871 prohibiting the carrying of any army
weapon except openly and in the hand was held constitutional: State
V, Wilburn, 7 Baxt. 57, 32 Am. Eep. 551"; State v. Speller, 86 N. C.
697. A statute prohibiting the carrymg of concealed, dangerous and
deadly weapons upon the person, and an exhibition of the same, is
a reasonable regulation to which the citizen must yield, and is a valid
exercise of the legislative power: State v. Shelby, 90 Mo. 302, 2 S.
W. 4fi«.
In Bliss v. Commonwealth, 2 Litt. 90, 13 Am. Dec. 251, it was de-
cidt«l luat the right of the i-itizen to bear arms in defense of himself
and of the state cannot be taken away or impaired, and that an act
to prevent the carrying of concealed weapons was unconstitutional
202 American State Reports, Vol. 115. [Kansas,
and void. Since that decision, however, the constitution of Kentucky
has been so amended as to give the legislature power to prevent per-
sons from carrying concealed arms: Hopkins v. Commonwealth, 3
Bush, 480; and one may be found guilty in that state of carrying a
concealed deadly weapon though he is simply carrying to the pur-
chaser a pistol sold by another: Cutsinger v. Commonwealth, 7 Bush,
392. And it has also been decided that a citizen may be guilty of a
crime in carrying, within his own home, a deadly weapon concealed
upon his person contrary to a statute prohibiting the carrying of
concealed weapons: Wilson v. State, 81 Miss. 404, 33 South. 171.
b. Carrying Deadly Weapons Openly. — As to the constitutional
right to keep and bear arms openly, there is much conflict in the few
decided cases. In Fife v. State, 31 Ark. 455, 25 Am. Rep. 556, it
was announced that a constitutional provision securing to the citizens
of the state the right to keep and bear arms for their common defense
relates to such arms as are used for the purposes of war, and does
not prevent the legislature from prohibiting the wearing of such
weapons as are not used in civilized warfare, and would not con-
tribute to the common defense. And a statute which prohibits the
carrying of any pistol whatever as a weapon refers to such pistols
as are usually carried in the pocket, and of a size to be concealed about
the person and used in private quarrels, and not such as are within
the provisions of the constitution. "In order to arrive at what is
meant by this clause of the state constitution, we must look at the
nature of the thing itself, the right to keep which is guaranteed. It
is arms; that is, such weapons as are properly designated as such as
the term is understood in the popular language of the country, and
such sui are adapted to the ends indicated above, that is, the effi-
ciency of a citizen as a soldier, when called upon to make good the
defense of a free people, and these arms he may use as a citizen, in
all the usual modes to which they are adapted, and common to the
country. What, then, is he protected in the right to keep and thus
to uset Not everything that may be useful for offense or defense,
but what may properly be included or understood under the title of
'arms' taken in connection with the fact that the citizen is to keep
them as a citizen. Such, then, as are found to make up the usual
arms of the citizen of the country, and the use of which will properly
train and reader him efficient in defense of his own liberty, as well
as of the state.
' ' Under this head, with a knowledge of the habits of our people, and
of the arms in the use of which a soldier should be trained, we hold that
the rifle of all descriptions, the shotgun, the musket and repeater are
such arms, and that, under the constitution, the right to keep such
arms cannot be infringed or forbidden by the legislature. Their use,
however, to be subordinated to such regulations and limitations as
are or may be authorized by the law of the land, passed to subserve
Nov. 1905.] City of Salina v. Blaksley. 203
the general good so as not to infringe the right secured and the
necessary incidents to exercise of such right": Fife v. State, 31 Ark.
455, 25 Am. Eep. 556. The same principles are adopted and the same
rule laid down in Andrews v. State, 3 Heisk. 165, 8 Am. Eep. 8, English
V. State, 35 Tex. 473, 14 Am. Eep. 374, and State v. Workman, 35 W.
Va. 367, 14 S. E. 9, 14 L. E. A. 600. Othfer cases maintain that a law
which merely inhibits the wearing of certain weapons in a concealed
manner is valid, but if it attempts to cut off the exercise of the right
of the citizen to bear "arms" openly, or, under the color of prescrib-
ing the mode, renders the right itself useless, it is in conflict with the
constitution and void: Nunn v. State, 1 Ga. 243; In re Brickey, 8
Idaho, 597, 101 Am. St. Eep. 215, 70 Pac. 609. It has been held, also,
that a city ordinance prohibiting the carrying of a pistol either openly
or concealed is repugnant to the constitution and void: State v.
Eosenthal, 75 Vt. 295, 55 Atl. 610.
In Wilson v. State, 33 Ark. 557, 34 Am. Eep. 52, it was said that:
"But to prohibit the citizen from wearing or carrying a war arm, ex-
cept upon his own premises or when on a journey .... or when act-
ing in the aid of an officer, is an unwarranted restriction upon his con-
stitutional right to keep and bear arms."
A statute prohibiting a citizen from bearing arms, ia this case an
ordinary pocket pistol, openly, is, it has been held, in conflict with
the constitution and void: Nunn v. State, 1 Ga. 243; Stockdale v.
State, 32 Ga. 225.
c. Miscellaneous. — A state statute prohibiting all bodies of men
other than the regularly organized volunteer militia of the state and
the troops of the United States from associating together as military
organizations, or drilling or parading with arms in any city of the
state without license from the governor, is constitutional and valid:
Presser v. Illinois, 116 U. S. 252, 6 Sup. Ct. Bep. 580, 29 L. ed. 615;
Commonwealth v. Murphy, 166 Mass. 171, 44 N. E. 138, 32 L. E. A.
606. A statute to this effect exists in California: Cal. Pen. Code, see.
734.
It may be made a crime by statute to keep and bear arms of any
kind in the presence of a court of justice: Hill v. State, 53 Ga. 472;
and a statute which makes it a crime to keep and sell pistols except
army or navy pistols is constitutional and valid: Dabbs v. State, 39
Ark. 353, 43 Am. Bep. 275; Stats ▼. Burgoyne, 7 Lea, 173, 40 Am.
Bep. 60.
204 American State Reports, Vol. 115. [Kansas,
HUMBARGER v. HUMBARGER.
[72 Kan. 412, 83 Pac. 1095.]
PEOBATE COURTS have Jurisdiction to settle and sign bills of
exceptions, (p. 205.)
APPELLATE PBACTICE— Bill of Exceptions.— If a bill of
exceptions itself recites that certain evidence and rulings are attaclied
to and made a part of such bill, and they are so plainly identified that
no doubt can exist that they were settled by the court as a part of
the bill of exceptions, they may be considered on appeal as such.
(pp. 205, 206.)
APPEAL — Becord on — Date of Proceedings. — If the record on
appeal states that the hearing began on a certain day, and each suc-
cessive step in the proceedings, including the settling and signing of
the bill of exceptions, is introduced by the term "thereupon," with-
out naming any other date, it must be inferred that each step fol-
lowed the other without delay, and that all occurred on the date of
the hearing, (p. 206.)
PEOBATE COURTS — Sununaiy Proceedings to Discover and
Recover Property. — Summary proceedings in probate courts authorized
by statute for the discovery and to compel the delivery of property
of an estate suspected of having been concealed, embezzled or con-
veyed, cannot be employed to enforce the payment of a debt, or lia-
bility for the conversion of the property of the estate, or to try con-
troverted questions of the right to property as between the representa-
tive of the estate and others, (p. 207.)
Z. C. Millikin, for the plaintiffs in error.
D. Ritchie, for the defendant in error.
*^^ JOHNSTON, C. J. This was a summary proceeding
begun in the probate court upon a complaint of John Hum-
barger, an heir at law of Susan Humbarger, deceased, in
which he alleged that his brothers, Henry Humbarger, George
Humbarger and Thurston Humbarger, were concealing
money, property and effects of the estate of Susan Hum-
barger, decea.sed, and asked that they be cited to appear and
answer questions propounded to them by the court touching
.such concealment. A citation was issued and an examination
had, at the end of which the probate court found that there
was no concealment of the assets of the estate by the respond-
ents, and the proceeding was discontinued. In the course of
the hearing the probate court sustained objections to ques-
tions a.sked of Henry Humbarger, and to these rulings excep-
tions were taken. A bill of exceptions was presented to, and
allowed by, the probate court, and this was made the basis
Dec. 1905.] HUMBARGEB V. HUMBABGEB. 205
of a proceeding in error in the district court. That court
reversed the decision of the probate court, and of these rulings
plaintiffs in error complain.
The first contention is that the district court had no juris-
diction to review the rulings of the probate court in the
admission of testimony, because such rulings never became a
part of the record. The ground of this claim is that the
probate court had no power to settle and sign a bill of excep-
tions. Aside from the right of appeal from a decision of the
probate court, express authority is given for the review of its
judgments and final orders by a proceeding in error to the
district court: Code, see. 541; Gen. Stats. 1901, sec. 5018.
It is argued, however, that as the jurisdiction of the probate
court is limited, it has only such authority as is specifically
conferred, and that the right to prosecute a proceeding
in error from that court does not '*^'* imply that it has
authority to settle and sign a bill of exceptions. There ap-
pears to be express legislative authority for the settling and
signing of a bill of exceptions by the probate court. The
statute declares that probate courts are courts of record : Gen.
Stats. 1901, sec. 1974. By another statutory provision courts
of record and the judges thereof at chambers are given au-
thority to settle and sign bills of exceptions, and also to extend
the time for doing so beyond the term: Laws 1901, c. 275,
sec. 1; Gen. Stats. 1901, sec. 4753.
It is next contended that the evidence and rulings were
attached to, rather than embodied in, the bill of exceptions,
and were not so preserved as to make them a part of it. It
is true that a mere reference to papers or proceedings, with-
out embodying them in the bill of exceptions, is not sufficient.
They must be made a part of the bill of exceptions in some
way, and so plainly identified as a part of it that no mistake
can be made as to what is included in the bill. Here it is
recited in the bill that the evidence is "attached hereto, and
made a part of this bill of exceptions." Since the evidence
and rulings are fully identified and specifically made a part
of the bill, they cannot be ignored because of the manner in
which they were incorporated into it, or because of the part
of the bill in which they were placed. It is a better and safer
method to place the proceedings and papers to be preserved
in the body of the bill, preceding the signature of the judge,
and thus avoid any question as to what is incorporated in it.
206 American State Reports, Vol. 115. [Kansas,
The courts give a liberal construction to a bill, and are in-
clined to disregard mere normal defects and irregularities
that do not cloud the record or violate a statutory require-
ment. In this case there can be no misapprehension as to
what the bill contains, nor whether the evidence and rulings
in question were settled by the probate court as a part of the
bill of exceptions.
Although questioned, it sufficiently appears that the bill
was settled in good time. The final hearing began '**'^ on
February 8, 1904, and in the recitals of the subsequent steps,
including the order of the court and the settling and signing
of the bill of exceptions, each is introduced by the word
"thereupon." So used, the word means that one step fol-
lowed another immediately and without delay, and justifies
the conclusion that all occurred on the date of the hearing:
Dewey v. Linscott, 20 Kan. 684 ; Hill v. Wand, 47 Kan. 340,
27 Am. St. Rep. 288, 27 Pac. 988.
The final question raised in the case is. Did the probate
court err in rejecting further evidence and in discontinuing
the proceeding? The asset of the estate involved in the
inquiry was a promissory note given by Henry Humbarger
to his father. The only thing charged in the complaint was
concealment. Without hesitation Henry Humbarger testified
that the note had been given, and he stated the amount for
which it was given, and, further, that it had been fully
paid and the debt discharged. He went further, and stated
that it had been paid partly in money, partly in services, and
partly in board. The complainant tried to push the inquiry
still further as to the payment of the note and as to whether
Henry's liability thereon had been discharged. His liability
on the note could not be determined in that proceeding by
that court. It was a summary proceeding brought under
section 3002 of the General Statutes of 1901. That statute
provides: "Upon complaint made to the probate court by the
executor, administrator, creditor, devisee, legatee, heir, or
other person interested in the estate of any deceased person,
against any person suspected of having concealed, embezzled
or conveyed away any money, goods, chattels, things in action,
or effects of such deceased, the said court shall cite the person
suspected forthwith to appear before it and to be examined
on oath or afiirmation touching the matters of the said com-
plaint."
Dec. 1905.] HUMBARGER V. HUMBARGER. 207
The testimony of the parties examined is to be reduced to
writing and filed in the probate court, and if the court is of
opinion that the accused is guilty of '**® either concealing,
embezzling or conveying away any of the assets of the estate,
it may order and compel the delivery thereof to the executor
or administrator or person entitled to receive the same: Gen.
Stats. 1901, sees. 3002-3006. The purpose of the proceeding
is to make discovery and compel production of the property of
an estate suspected of having been concealed, embezzled, or
conveyed away, but it cannot be employed to enforce the pay-
ment of a debt or liability for the conversion of property of
an estate, or to try controverted questions of the right to
property as between the representative of the estate and oth-
ers. One purpose is to perpetuate evidence against the party
charged, to be used, if necessary, in an action brought for
the recovery of the property in a court of competent juris-
diction. In Moss V. Sandefur, 15 Ark. 381, it was held under
a similar statute that it was intended to compel a discovery
and delivery of the assets of an estate which were secretly
and unlawfully held, but that it did not invest the probate
court with jurisdiction of contested rights and matters of
litigation as to the title of property. A like provision was
before the supreme court of Illinois in Dinsmoor v. Bressler,
164 111. 211, 45 N. E. 1086, where it was said: "The summary
proceeding in the probate court to compel the production and
delivery of property 'is not the proper remedy .... to try
contested rights and title to property between the executor
and others': 2 Woerner's American Law of Administration,
sec. 325, p. 681. *Nor does the power conferred upon probate
courts to subpoena and examine parties alleged to conceal or
withhold property of the estate authorize such courts to try
the title to the property in dispute': 1 Woerner's American
Law of Administration, sec. 151, p. 347 ; Schouler on Execu-
tors and Administrators, sec. 270. If sections 81 and 82
could be used to settle contested rights to property as be-
tween executors and administrators on the one side and third
persons on the other, they would operate as an infringement
upon the constitutional right to trial by jury, as they contain
no provision for a jury trial": See, also. In re Wolford, 10
Kan. App. 283, 62 Pac. '•^^ 731 ; Howell v. Fry, 19 Ohio St.
556; Ex parte Casey, 71 Cal. 269, 12 Pac. 118; Gardner
v. Gillihan, 20 Or. 598, 27 Pac. 220; Gibson v. Cook, 62 Md.
256 J Matter of Beebe, 20 Hun, 462.
208 American State Reports, Vol. 115. [Kansas,
Here the chaise was concealment, and when the testimony
developed that there was no concealment of the note — the
subject of inquiry — the end of the investigation was reached.
No doubt existed that there was a note, and that it belonged
to the estate; and the only question left was whether it had
been paid by Henry Humbarger, or whether he was still
liable for all or part of it. The proceeding was a propef
remedy to compel the delivery of the note itself, if it had
been concealed, but not to enforce its payment, nor to try
the title to the note as between parties claiming to own it.
Courts will not be disposed to hamper such investigations so
long as there remains a question whether effects of the estate
have been concealed, embezzled, or conveyed away, but where,
as in this case, the charge is not sustained, and it appears
that there was no concealment, further inquiry as to the pay-
ment and whether there still existed any liability is useless,
and beyond the scope of the proceeding. The probate court
rightly refused to go into the question of the indebtedness of
the respondent Henry Humbarger, and therefore the judg-
ment of the district court is reversed and the cause remanded
for further proceedings.
All the justices concurring.
SUMMARY PEOCEEDINGS TO DISCOVER OR RECOVER PROP-
ERTY OF ESTATES OF DECEDENTS.
I. Statutory Provisions, 208.
II. Constitutionality of Statutes, 210.
III. Nature of Proceedings, 211.
IV. Scope and Object of Proceeding.
a. Generally, 211.
1). Collection of Debts, 213.
c. Trial of Title, 214.
V. Claim of Property, 214.
VI. Rights of Person Examined, 217.
VII. Persons Interested, 217.
VIII. Proceedings Against Personal Representative, 218.
XI. Petition or Affidavit, 218.
X. Iiimitation of Action, 218.
L Statutory Provisions.
In addition to existing remedies at law and in equity entitling ad-
ministrators and executors to recover the property of an estate, a
summary proceeding in the probate court is provided in many of the
states, enabling them, or an interested person in such estate, to make
Dec. 1905.] HUMBAKGER V. HUMBARGEB, 209
examination and discovery, and in some states to compel the produc-
tion and delivery of property suspected to be concealed, embezzled
or wrongfully withheld. Such statutes famish a more speedy and
much less expensive mode of detecting the existence or location of
the property of the estate than the ordinary remedy of bill of dis-
covery in equity or replevin or other action at law.
These statutes, generally speaking, are almost uniform in their
phraseology and legal effect, and it is not deemed necessary to here
set them out in each particular instance in full. They authorize pro-
bate courts to cite before them for examination any person suspected
by an executor or administrator, or other person interested in the
estate, of having concealed, embezzled, or converted any goods, chat-
tels or money, or having in his or their possession or knowledge of
any evidence of debt or right of the deceased, and compel such per-
son to answer under oath. The proceeding in such case is plenary,
the object being to perpetuate the evidence against the person
charged, to be used upon any action to be brought thereon, and the
testimony, it is usually provided, must be reduced to writing.
Statutes of this tenor exist in the following states: California (Code
Civ. Proc, sec. 1459 et seq.); Idaho (Rev. Stats. 1887, sees. 5432-5434);
Indiana (Annotated Stats. 1894, sec. 2455); Maine (Rev. Stats. 1903,
66, sees. 70-72); Maryland (2 Pub. Gen. Laws 1888, art. 93, sec. 238, p.
1399); Massachusetts (2 Rev. Laws 1902, c. 162, sec. 43); Michigan
(3 Comp. Laws 1897, c. 25, sees. 8-10); Minnesota (Gen. Stats. 1891,
sees. 5712, 5713); Nevada (Prot. Code Stats. 1895, sec. 2572); New
Hampshire (Pub. Stats. 1901, c. 190, sees. 1-4) ; New York (Code Civ.
Proc, sec. 2706 et seq.); Oregon (Gen. Laws, 1887, sec. 1121 et seq.);
Ohio (2 Bates Ann. Stats., 2d ed., sees. 6053-6057) ; Rhode Island (Gen.
Laws 1896, pp. 696, 697); Vermont (Stats. 1904, see, 2470); Washing-
ton (2 Ballinger's Annotated Codes and Statutes, sees. 6212-6214);
"Wisconsin (Ann. Stats. 1889, sees. 5446, 5447). Under such statutes a
like proceeding is authorized against persons to whom the executor or
administrator has intrusted property of the estate, and who wrong-
fully withholds it, and the appearance of such parties and their an-
swers to the interrogatories propounded to them may be enforced hj
attachment and imprisonment.
In other of the states the power of the probate court is, by statute,
made to extend much further, and the person found guilty of con-
cealing, embezzling or wrongfully withholding property belonging to
the estate may be proceeded against by attachment and imprison-
ment. Statutes to this effect exist in Illinois (Rev. Stats. 1891, c. 3,
sees. 80, 81); Maryland (2 Pub. Gen. Laws 1888, art. 93, sec. 238, p.
1391); North Dakota (Code 1895, sec. 6379); South Dakota (2 Ann.
Stats., sees. 7UU5, 7U06); Utah (Rev. Stats. 1898, sees. 3927, 3928);
Wyoming (Rev. Stats. 1887, sees. 2045-2U47).
Am. St. Rep., Vol. 115—14
210 American State Reports, Vol. 115. [Kansas,
n. Constitutionality of Statutes.
Statutes authorizing summary proceedings for the discovery of
property of a decedent wrongfully withheld from his legal representa-
tives, in so far as they authorize an examination of the question of
possession only and not that of title, are undoubtedly constitutional,
and not in conflict with constitutional provisions declaring that no per-
son shall be deprived of life, liberty or property without due process
of law, and that trial by jury in all cases in which it has theretofore
been used shall remain inviolate: Matter of Curry, 25 Hun, 321.
In California it has been decided that a statute providing for pro-
ceedings by an administrator to recover property of the estate of a
decedent alleged to have been concealed or embezzled by the defend-
ant and converted to his own use is remedial, and not penal, in its
nature, though providing redress in the way of imprisonment and
damages under certain contingencies as a means of enforcing the civil
remedy provided for therein, and is not in conflict with constitutional
provisions that no person shall be compelled in a criminal case to be
a witness against himself, and that the right of the people to be se-
cured in their persons, houses, papers, and eEfects against unreasonable
seizures and searches cannot be violated: Levy v. Superior Court, 105
Cal. 600, 38 Pac. 965, 29 L. E. A. 811.
In a summary proceeding before the probate court as authorized by
statute on the complaint of an administrator against a person sus-
pected of embezzling, concealing or conveying away the property or
effects of the estate, the court has no constitutional power to render
judgment against the person so charged, except for such property or
effects as he, on his examination, admits himself guilty of having in
his possession, and to the extent that such statute authorizes a judg-
ment in cases where there is a controversy between the parties, it is
unconstitutional as depriving such person of the right of trial by
jury, and of appeal: Howell v. Fry, 19 Ohio St. 556. In Dinsmoor v.
Bressler, 164 111. 211, 45 N. E. 1086, it was said that if such statu-
tory proceedings "could be used to settle contested rights to prop-
erty as between executors and administrators on the one side and
third persons on the other, they would operate as an infringement
upon the constitutional right to trial by jury, as they contain no pro-
vision for a jury trial." And this language was repeated with ap-
proval in Martin v. Martin, 170 111. 18, 48 N. E. 694. Or if such
statute authorizes the probate court, if it shall appear that any ef-
fects of the deceased are withheld by the person under examination,
to issue a warrant commanding an ofiicer to whom it is directed to
search for and seize such effects and deliver them to the personal
representative of the deceased, unless the person holding such effects
Bhall give security, is unconstitutional and void as depriving a person
Dec. 1905.] HUMBARGEB V. HUMBARGEB. 211
of his property without due process of law: Matter of Beebe, 20 Hun,
462.
III. Nature of Proceeding.
Under statutes concerning the discovery of concealed assets of an
estate, the proceeding partakes of a suit in chancery, and is in the
nature of a bill for discovery and relief, and the evidence heard in
the circuit court on appeal therefrom may be preserved for review
by 'the certificate of the judge in the form of a bill of exceptions:
Martin v. Martin, 170 111. 18, 48 N. E. 694. The statutory proceeding
for the discovery of assets of an estate is in the nature of a bill
in chancery for discovery, and the proceedings should be governed
by the principles of and practice in equity: Adams v. Adams, 81 111.
App. 637. But a statute authorizing the probate court, on an
executor's or administrator's application, to examine a person under
oath concerning property in his possession belonging to the estate,
is not exclusive of the right of the personal representative to maintain
a bill in equity for discovery with respect to such property: Stark-
weather V. Williams, 21 E. I. 55, 41 Atl. 1003.
IV. Scope and Object of Proceeding.
a. Generally. — If an executor, administrator or other person inter-
ested in an estate states upon oath to the probate court that he be-
lieves that some third person has in his possession any goods, chattels,
money or effects, books of account, papers or any evidence of debt
whatever, it is the duty of the court to require such person to appear
before it by citation, and the court may examine him on oath, and
hear the testimony of such executor or administrator or other per-
son interested in the estate and other evidence offered by either
party, but in such case the statute leaves it discretionary with the
court to examine or not to examine the person against whom such
proceedings are had: Mahoney v. People, 98 111. App. 241. The
court is not confined to an examination of, nor need it examine, the
defendant, but either party has the right to introduce any evidence
pertinent to the issue: Wade v. Pritchard, 69 111. 279. The statute
does not confer authority upon the court to try and determine, as an
issue of fact, upon general evidence, the question whether a person,
suspected of so doing, has taken wrongful possession of property or
effects of the estate, but merely to summon and compel the appear
ance of such person, and subject him to an examination under oath,
and in case it appears therefrom that he has property belonging to
the estate, to order and compel the delivery of such property to the ad-
ministrator: Rickman v. Stanton, 32 Iowa, 134. The sole purpose of
a statute, in so far as it provides that if any executor or adminis-
trator or other person interested in the estate of a deceased person
shall complain to the judge of probate that any person is suspected to
have ifi his possession any property belonging to such estate, is to
212 American State Reports, Vol. 115. [Kansas,
enable such judge to cite such suspected person to appear before the
court of probate, and to examine him on oath, upon the matter of
such complaint: Manly v. Babbitt, 99 Mich. 441, 58 N. W. 367.
One of the objects of such statutes is to enable the administrator
to secure information as to property which he is required to inventory
or appraise, although the present situation of the property is such
that it would be impracticable to order its delivery to the adminis-
trator: Matter of O'Brien, 65 App. Div. (N. Y.) 282, 27 N. Y. Supp.
1001.
Such summary proceedings under the statute apply only where
^Mrraons charged with concealing or embezzling the assets of an es-
tate have the goods in actual possession at the time of the com-
mencement of the proceedings. If the property has passed from the
possession of the person so charged, the common-law rights of action
still remain to the executor or administrator, but he is precluded from
further prosecuting the statutory remedy: Dameron's Admr. v.
Dameron, 19 Mo. 317; Howell v. Howell, 37 Mo. 124.
And such proceedings can only be used for and result in the dis-
covery of facts to serve as a basis of ulterior proceedings: O'Dee v.
McCrate, 7 Me. 467; Dodge v. McNeil, 62 N. H. 168; Saddington's
Estate V. Hewitt, 70 Wis. 240, 35 N. W. 552, where it is also decided
that where the statute authorizes merely an examination, it cannot
be changed by rule of court into a proceeding in the nature of an
action to recover the property as to which the examination is had.
And as such ulterior proceedings cannot be had in the probate court
under some of the statutes, that court can do nothing except to take
the examination of the person complained of, and the judge thereof
has no authority to determine the question whether such charge is or
is not sustained: Dodge v. O'Neil, 62 N. H. 168.
Under statutes which authorize an order for the surrender and
delivery of the property sought to be discovered, the only purpose
of the legislature in enacting them is to provide for the examination
of the person claimed to have property belonging to the estate at
the instance of the personal representative of the decedent or of
some person interested in his estate, and to afiford a simple and sum-
mary proceeding whereby such person may obtain an order for the
surrender of the property discovered in the hands or under the con-
trol of some person or persons not lawfully entitled to the possession
thereof, and, whenever it is apparent at any stage of the proceed-
ings taken under such statutes that such a result is in th^ nature of
things unattainable, the proceeding should terminate: Estate of
Knittel, 12 Civ. Proc. (N. Y.) 1.
Such summary proceedings against, and the commitment of any
person having property belonging to any deceased person which he
refuses to disclose or deliver to the administrator, apply only to
money or property remaining in specie and unchanged, and not
Dec. 1905.] HUMBARGER V. HUMBARGEB. 213
to proceeds of collections made by an attorney under employment
to the administrator: Dinsmor v. Bressler, 164 111. 211, 45 N. E.
1086.
A proceeding in the probate court to discover assets begun on the
affidavit of a person interested in the estate of a deceased, in which
a certain other person is charged with having concealed and em-
bezzled certain assets is "a suit pending" within the meaning of a
statute concerning the taking of depositions: Ex parte Gfeller, 178
Mo. 248, 77 S. W. 552; Eckerle v. Wood, 95 Mo. App. 378, 69 S. W.
45.
And on an application by an administrator to the probate court
invoking its authority to require the production by a third person
of any part of the personal estate of his decedent, he must allege
in his application in express or equivalent terms that the same is con-
cealed, in order to give the court jurisdiction. The simple withholding
of property is not "concealment" within the meaning of the statute:
Taylor v. Bruscup, 27 Md. 219.
b. Collection of Debts. — Statutes which authorize summary pro-
ceedings before courts of probate against any person having property
of an estate in his possession and refusing to deliver it up to the
personal representative of the deceased are not intended to apply
to a case of mere indebtedness of such person to the estate, but
only to the case of specific property belonging to such estate, and
wrongfully withheld by such person: Ive's Appeal, 28 Conn. 416.
Such proceedings cannot be maintained to aid in the collection of
debts due the estate, but only for the purpose of obtaining posses-
sion of the identical articles or money belonging to such estate:
Williams v. Conley, 20 111. 643; Matter of Stewart, 77 Hun, 564, 28
N. Y. Supp. 1048. The personal representative of an estate has no
right to examine a debtor of his decedent merely for the purpose of
ascertaining the nature and amount of such debtor's liability to the
estate: Estate of Knittel, 12 Civ. Proc. (N. Y.) 1; Estate of Nay, 6
Dem. Sur. 346; Matter of Carey, 11 App. Div. (N. Y.) 289, 42 N. Y.
Supp. 346. Probate courts have no jurisdiction under such statutes,
by any proceedings, to enforce the payment of a debt due the estate
by commitment as for a contempt: In re Wolford, 10 Kan. App. 283,
62 Pac. 731. In a summary proceeding before a probate court under
authority of a statute on the complaint of an administrator against
a person suspected of embezzling, concealing or conveying away
the property or effects of the estate, the court has no constitutional
power to render judgment against the person so charged, except for
such property and effects as he, on his examination, admits himself
guilty of having in his possession, and to the extent that the
statute professes to authorize a judgment in cases where there is a
controversy between the parties, it is unconstitutional and void:
Howell v. Pry, 19 Ohio St. 556.
214 American State Reports, Vol. 115. [Kansas,
C. Trial of Title. — Probate courts have no jurisdiction, under the
■unimary proceedings provided by statute for the discovery and
recovery of property of a decedent wrongfully withheld from his
legal representatives, to try the title to such property as between
the executor or administrator and others. The question of possession
only, and not that of title, can be examined: Moss v. Sandefur, 15
Ark. 381; In re Wolford, 10 Kan. App. 283, 62 Pac. 731; Gibson v.
Cook, 62 Md. 256; Estate of Curry, 25 Hun, 321; Summerfield v.
Howie, 2 Red. Sur. 149; Gardner v. Gillihan, 20 Or. 598, 27 Pae.
220. In such proceedings neither the probate court nor the circuit
court on appeal can finally determine the title or right to property
between bona fide disputants, as the good faith of the person in
possession of the assets is the sole question to be tried in such pro-
ceeding: Johnson v. Johnson, 82 Mo. App, 350. The court has no
power to order property in the possession of the person examined
and claiming title thereto to be delivered up to the personal repre-
sentative of the deceased, or deposited subject to the order of the
court, and the refusal of such person claiming title to obey such
order is not a contempt: Ex parte Casey, 71 Cal. 269, 12 Pac. 118.
V. Claim of Property.
Where an administrator or executor, seeking to discover property
of his decedent alleged to be concealed or withheld, alleges that the
person to be cited has in his possession or under his control specified
articles of property belonging to the estate, the New York state
statute provides that "in case the person so cited shall interpose
a written answer, duly verified, that he is the owner of such prop-
erty, or is entitled to the possession thereof, by virtue of any lien
thereon, or special property therein, the surrogate shall dismiss the
proceeding as to such property so claimed." Under such provision
of the statute, the assertion by the person cited of his own title
to a portion only of such property, does not bar further inquiry,
and is not ground for a dismissal of the proceedings: Matter of
Peyser, 25 Misc. Rep. (N. Y.) 705, 4 K Y. Supp. 707; Estate of
Elias, 4 Dem. Sur. 139. The person cited must allege that he or she.
is the owner or is entitled to the possession of the specific property
described in the petition by virtue of a lien thereon or special prop-
erty therein, and if such allegation is not made, the motion for
discovery must be granted and the examination must proceed: Estate
of Hastings, 6 Dem. Sur. 423; Estate of Seaver, 1 Dem. Sur. 365.
When the person cited for examination interposes a written answer,
duly verified, alleging that by virtue of a lien on the property of
which a discovery is sought, or special property therein, he is entitled
to the possession thereof and setting forth the nature and circum-
stances of the lien, the surrogate must dismiss the proceeding, and
it is not within his power to pass upon the validity, sufficiency or
Dec. 1905.] HUMBARGER V. HUMBARGER. 215
extent of such lien: Matter of Lynch, 83 Hun, 39, 31 N. Y. Supp. 767.
"When the proper claim of title is interposed, the surrogate is ousted
of jurisdiction and cannot decide the question raised, the parties
being remitted to another tribunal, where a jury trial or other proper
disposition of the issues may be had. Under such circumstances, no
examination is permissible, and if it were allowed no order could
be made for the delivery or disposition of the property based upon
it: Estate of Basch, 24 Civ. Proc. (N. Y.) 264, 33 N. Y. Supp. 424.
If the person cited for examination alleges by proper answer that he
is the owner of the property in question, that is sufficient to secure
a dismissal of the proceeding, without showing hqw he became
such owner, but if he claims to be entitled to the possession of the
property by virtue of a lien thereon or special property therein, he
must allege the facts necessary to sustain such claim: Estate of
Scaver, 1 Dem. Sur. 365. And if such person alleges in his answer
that "he is the owner of all property specifically recited in said
petition, or entitled to the possession thereof," he is not entitled
to a dismissal of the proceeding, as such answer is not an absolute
claim of ownership or of a right of possession by virtue of a lien
thereon, or special property therein, but is merely a naked alternative
claim to the property: Matter of Peyser, 35 App. Div. (N. Y.) 447,
54 N. Y. Supp. 832.
If the person cited for examination has possession of papers,
the delivery of which is sought to be compelled by the adminis-
trator, and claims a lien thereon for services rendered by him as an
attorney at law for the decedent, it is the duty of the surrogate
to dismiss the proceedings: Matter of McGuire, 106 App. Div. (N. Y.)
131, 94 N. Y. Supp. 97.
In Matter of Wing, 41 Hun, 452, it appeared that in obedience
to a citation issued by a surrogate upon the petition of an adminis-
trator, alleging that the respondent had in his possession property,
bonds and notes which belonged to the deceased, and which he ought,
but refused, to deliver to the administrator, the respondent appeared
and answered, reciting that the property in question was placed in
his hands by the deceased under agreement with him that the latter
should hold it for advances made to the deceased which were never
repaid, and that the respondent, as by agreement provided, disposed
of the property in the lifetime of the deceased, and applied the whole
of the proceeds to his reimbursement, and that he had none of the
property in his possession, and it was held that it was the duty of
the surrogate to have dismissed the proceedings.
An answer to a petition for the examination of a person cited
for discovery of the assets of an estate of a decedent, which sets
ap ownership and title of the property by virtue of a bequest to him,
requires a dismissal of the proceeding under the provision of the
above-mentioned New York statute: Matter of McCarthy, 26 Civ.
216 Amekican State Reports, Vol. 115. [Kansas,
Proc. (N. Y.) 397, 47 N. Y. Supp. 1127; Matter of Harriman, 50 Misc.
Eep. (N. Y.) 245, 100 N. Y. Supp. 481. And under the statutes of
other states authorizing summary proceedings for the discovery and
delivery of property of an estate alleged to be concealed or embezzled
by a third person, if there is substantial evidence on such examination
that the deceased made a valid gift of the property sought for, and
that the gift was made in view of death, and that respondent was in
lawful possession of such property prior to the decedent's death,
claiming title thereto in good faith, he is entitled to a dismissal
of the proceeding: Hoehn v. Struttmann, 71 Mo. App. 399. Or if it
appears from the evidence that the administrator's intestate had no
title to the property sought, or that the respondent's appropriation
of it was not fraudulent, but in good faith under a valid claim
of title, the respondent should be acquitted of the embezzlement,
and should not be compelled to surrender the property. Beyond this
the probate court has no jurisdiction to settle the respective rights
of the parties to the property, and if they wish to litigate their
rights to the property they must resort to some other jurisdiction:
Gordon v. Eans, 97 Mo. 587, 4 S. W. 112, 11 S. W. 64, 370.
Under the New York statute an executor or administrator who pre-
sents a petition to the surrogate showing that the property of the
estate which should be included in an inventory or appraisal, and
which is in the possession, under the control or within the knowledge
or information of a person who withholds it from the representative
of the deceased, is entitled to an order permitting him to examine
such person, and this statute applies in favor of an administrator
appointed in the state of the residence of the deceased as against
his temporary administrator appointed to administer that part of
his estate situated in another state: Matter of O'Brien, 65 App. Div.
(N. Y.) 282, 72 N. Y. Supp. 1001, 34 Misc. Eep. (N. Y.) 436, 69 N. Y.
Supp. 1022. And the person sought to be examined cannot defeat the
examination by an answer alleging that he has no property belonging
to the estate in his possession, and that he is the absolute owner
of the property described in the petition, and was such owner before
the decedent's death. The proceeding is intended to enable an
executor or administrator to obtain information in regard to such
property as well as to get possession of it, and, although the case
is one where delivery of possession could not be directed, an examina-
tion of the claimant may, nevertheless, be allowed, and the provision
for terminating the proceeding where a dispute arises as to the
ownership of the property refers to a dispute developed upon the
examination of the claimant, and not a dispute which he creates by
ailegations in an answer to a petition for his examination: Matter
of Gick, 49 Misc. Kep. (N. Y.) 32, 98 N. Y. Supp. 299; Matter of
O'Brien, 34 Misc. Kep. (N. Y.) 436, 69 N. Y. Supp. 1022, 65 App Div.
282, 72 N. Y. Supp. 1001.
Dec. 1905.] HUMBARGER V. HUMBARGEB. 217
VI. Bights of Person Examined.
Under statutory proceedings to compel a person to answer
touching the assets of an estate in his possession, such person is not
entitled to a trial by jury in such proceeding as a matter of right:
Mahoney v. People, 98 111. App. 241. Although the statute some-
times provides for a jury trial in such case: Kev. Stats. 1887, sec.
2045 et seq.
A person charged with withholding the assets of an estate has the
right to be examined under oath, and the court may believe and
act upon his uncontradicted statements, and may permit him to tes-
tify to facts occurring prior to the death of the deceased: Kraher's
Estate V. Launtz, 90 111. App. 496. And in the event of the finding
of the court in his favor after his examination under oath, he is en-
titled to an immediate dismissal of the proceedings without further
examination of himself or other witnesses: Matter of Stuart, 67
Mo. App. 61. He also has the right to introduce any evidence per-
tinent to the issue: Wade v. Pritchard, 69 111. 279. And he is en-
titled to have the assistance of counsel in such a proceeding: Martin
▼. Clapp, 99 Mass. 470.
VH. Person Interested.
Under a statute authorizing the probate court to issue a citation
for the discovery of the assets of an estate upon the affidavit of the
executor, administrator or "other person interested in the estate,"
it has been held in Missouri that if the affidavit alleging conceal-
ment or embezzlement does not affirmatively show that the person
making it has an interest in the estate; it is defective and gives the
court no jurisdiction: Shaw v. Groomer, 60 Mo. 495. But if the
probate court issues a citation at the instance of the moving
party, it necessarily decides that he is "a person interested in the
estate," and such decision cannot be reviewed by writ of prohibi-
tion: Eckerle v. Wood, 95 Mo. App. 378, 69 S. W. 45. The order
of such court issuing a citation on the affidavit of the husband
of the testatrix is a decision by the probate court that such husband
is interested in the estate: Ex parte Gfeller, 178 Mo. 248, 77 S. W.
552.
The husband of a childless testatrix, although the will under
which he acts may specifically declare that he is to have no part of
the estate, has such an interest therein as to authorize the probate
court, upon his affidavit that certain persons are concealing certain
assets, to issue a citation to them for the discovery thereof: Ex parte
Gfeller, 178 Mo. 248, 77 S. W. 552.
If the probate court becomes satisfied from any source that prop-
erty belonging to an intestate's estate is wrongfully in the posses-
sion or under the control of a third person, it may cite him for ex-
amination independently and without any petition from a person in-
218 American State Reports, Vol. 115. [Kansas,
terested in the estate or from the administrator: Hughes v. People, 5
Colo. 436; Mead v. Sommers, 2 Dem. Sur. 296.
Vm. Proceedings Against Personal Eepresentative.
Statutes providing summary proceedings upon the petition or affi-
davit of a person interested in the estate of a decedent for the pur-
pose of discovering assets of such estate alleged to be concealed, em-
bezzled or wrongfully withheld apply as well against executors and
administrators as they do against persons: Case's Appeal, 35 Conn.
115; O'Dee v. McCrate, 7 Me. 467; Stewart v. Glenn, 58 Mo. 481;-
Given 's Case, 34 N. J. Eq. 191. And it has been decided that in
such proceeding against an executor to discover assets of the estate,
the executor is not competent as a witness as to business occurrences
between himself and the testator, his father, out of which the al-
leged withholding of assets arose: Tygard v. Falor, 163 Mo. 234, 63
S. W. 672.
IX. Petition or Affidavit.
In a special statutory proceeding brought by an executor or admin-
istrator to discover property of the decedent withheld from the peti-
tioner the allegations on the part of the latter may be exclusively
upon information and belief, and without disclosing the sources or
grounds thereof, as the only prerequisite to the issuing of the cita-
tion is the satisfaction of the probate court that there are reasonable
grounds for the inquiry: Walsh v. Downs, 3 Dem. Sur. 202. But all
of the executors or administrators must join in the petition, and be
made parties to the proceeding, else the petition and citation must be
dismissed upon motion of the person cited for examination: Matter
of Shingerland, 36 Hun, 575. If, however, such person appears and
goes to trial upon the merits, he thereby waives any defects in the
affidavit or petition by which the proceeding is commenced. Objec-
tion to the affidavit or petition must be urged before submitting to
the jurisdiction of the court: Wade v. Pritchard, 69 111. 279.
An administrator has a right to file an amended affidavit in such pro-
ceeding, and thereafter the proceedings under the original affidavit
will be considered as abandoned, and it will be presumed that the
proceeding was conducted under the amended affidavit, but the whole
record may be examined on appeal to ascertain whether the subse-
quent steps and orders were taken under the amended or under the
original affidavit : Blair v. Sennott, 134 111. 78, 24 N. E. 969.
X. Limitation of Action.
A judge of probate has statutory power to call before him and ex-
amine, under oath, as well the executor or administrator of an estate
when suspected and charged with concealment or embezzlement or
wrongfully withholding the property of the estate, as any other per-
son who is interested with such property by the executor or admin-
Dec. 1905.] Albright v. Bangs. 219
istrator, and so charged, and, while such proceedings can only re-
sult in a discovery of the facts, to serve as a basis of ulterior proceed-
ings, yet the lapse of thirty years since the transaction inquired into
Ib no bar to such examination: O'Dee v. McCrate, 7 Me. 467.
ALBRIGHT v. BANGS.
[72 Kan. 435, 83 Pac. 1030.]
EXECUTORS AND ADMINISTRATORS— Foreign Admlnia-
trator De Bonis Non — Sale of Real Estate by — Validity. — If a non-
resident dies testate in one state owning property in another, and ex-
ecutors named in his will are appointed and qualify as such in the
former state, and letters testamentary are issued afterward to the
same persons in the other state, an administrator de bonis non. who.
is appointed in the former state on account of the death of one
executor and the removal of the other, is not thereby made the suc-
cessor in trust of the executors under their appointment in the other
state, so as to enable the courts of that state to permit him to sell
lands of the estate to pay its debts under an order previously granted
to the executors, without giving a new notice of his application for
such authority. A sale by him without such notice is void, and a
deed under such sale constitutes no defense to an action of ejectment
by the devisees or their successors in interest, (p. 220.)
G. H. Buckman and 0. P. Fuller, for the plaintiffs in er-
ror.
Hackney & Lafferty, for the defendants in error,
"^^^ MASON, J. Soranus L. Bretton died testate in Ill-
inois in 1881. The will was duly probated in the county
court of Rock Island county, Illinois, and the two persons
whom it named as executors were appointed and qualified
as such. These executors then represented to the probate
court of Cowley county, Kansas, that at the time of his
death the testator owned certain real and personal prop-
erty in that county, and asked that the will be there ad-
mitted to probate, and that they be granted letters testa-
mentary that they might proceed in the management of the
part of the estate found in Kansas. An order was made
admitting the will to record upon the strength of its hav-
ing been approved by the Illinois court, and letters testa-
mentary were granted to the executors, who gave the bond
and took the oath required by the Kansas statute and en-
220 American State Reports, Vol. 115. [Kansas,
tered upon the performance of their duties in this state.
In 1883 they filed in the Cowley county probate court a
petition for leave to sell real estate situated in that county
for the payment of debts. Notice of a hearing thereon was
properly given, and an order was made authorizing the ex-
ecutors to sell certain tracts of land for that purpose at
private sale. A number of tracts were accordingly sold,
the sales were confirmed, and deeds were executed. On
June 3, 1886, the court ordered that no more of the real
estate should be sold until a reappraisement should be made
and until the court should direct further proceedings un-
der the order of sale already made.
For more than twelve years nothing further was done to
subject the real estate remaining unsold to the payment of
debts. On August 30, 1898, Burton F. Peek made a show-
ing in the probate court of Cowley county that the Illinois
court having jurisdiction of the Bretton estate had ap-
pointed him administrator de bonis non with the will an-
nexed, on account of one ^^'^ executor's having died and
the other's having refused to act and being disqualified by
nonresidence in Illinois. He asked the Kansas court to
make an order recognizing him as such administrator, with
authority to sell real estate in the manner prescribed by
law. An order was accordingly made recognizing him as
such administrator, confirming his appointment by the
Illinois court, and approving the bond which had been there
given.
This administrator then presented an application to the
Cowley county probate court representing that an indebted-
ness against the estate remained unpaid, reciting that the
order of sale made fifteen years before was still in force,
and asking that appraisers be appointed to appraise enough
real estate to satisfy such debt. Appraisers were named,
appraisements were had, a tract of land was sold, the sale
was confirmed, a deed was ordered and executed, and pur-
chaser went into possession. Thereafter several convey-
ances of the property were made, the last grantees being
Grant Stafford and P. H. Albright. In 1902 an action was
brought by the Bretton devisees against Stafford and Al-
bright for the recovery of the possession of this land, un-
der the claim that the administrator's sale was absolutely
Dec. 1905.] Albright v. Bangs. 221
void and passed no title. They recovered a judgment,
from which the defendants prosecute error.
The administrator, Peek, gave no notice of the hearing
of the petition presented by him for an order authorizing
the sale of real estate, and the sale was obviously void on
this account unless the proceedings taken by him can be
regarded as a continuation of those begun by the executors.
They were manifestly so considered by him, and so treated
by the probate court. The only question that need be de-
termined here is whether the two proceedings were so con-
nected that the jurisdiction to authorize sales of real es-
tate acquired by the probate court in virtue of the notice
given by the executors remained with the court '*^^ so as
to warrant the making of an order, without further notice,
for the administrator to sell lands covered by the original
notice and order.
It is not doubted that an order made upon due notice
for the sale of real estate by an executor or administrator
is sufficient to authorize a sale by his successor in trust (18
Cyc. 726, 758), but the vital inquiry here is whether for this
purpose Peek, the administrator de bonis non, was the
successor of the executors who gave the notice and to whom
the original order of sale was granted. In the investiga-
tion of this question it is necessary to observe carefully
the different steps that were taken and the statutory pro-
visions by which they were respectively authorized. In
this connection it is first to be noted that there are two
separate and distinct methods under our statute by which
real property in this state may be sold to satisfy the debts
of a nonresident testator. One of them is that provided
in sections 7962 to 7965, inclusive, of the General Statutes
of 1901. Under this method, when a will has been duly
proved in another state, upon the production by the execu-
tor or other interested person of an authenticated copy
of the will and probate thereof the probate court of any
county in this state in which there is property upon which
the will may operate may admit it to record: Gen. Stats.
1901, sec. 7963. Section 7965 reads: "After allowing and
admitting to record a will pursuant to the four preceding
sections of this act, the court may grant letters testa-
mentary thereon, or letters of administration with the will
annexed, and may proceed in the settlement of the estate
222 American State Reports, Vol. 115. [Kansas,
that may be found in this state; and the executor taking
out letters, or the administrator with the will annexed, shall
have the same power to sell and convey the real and per-
sonal estate, by virtue of the will or the law, as other execu-
tors or administrators with the will annexed shall or may
have by law."
It will be noticed that the section quoted contemplates
the actual appointment by a Kansas court of '*'*® an execu-
tor or administrator who shall be subject to the control
of that court in all things.
The other method referred to is described in sections
2950 and 2951 of the General Statutes of 1901. Section
2950 reads as follows: "When an executofr or administrator
shall be appointed in any other state, territory or foreign
country on the estate of any person dying out of the state,
and no executor or administrator thereon shall be ap-
pointed in this state, the foreign executor or administrator
may file an authenticated copy of his appointment in the
probate court of any county in which there may be any
real estate of the deceased; after which he may be author-
ized under an order of the court to sell real estate for the
payment of debts or legacies and the charges of admin-
istration, in the same manner and upon the same terms
and conditions as are prescribed in the case of an executor
or administrator appointed in this state, except as herein-
after provided."
Section 1951 provides that if the bond already given by
the foreign executor or administrator be found sufficient,
he shall not be required to give any further security; that
otherwise he must give an undertaking properly to ac-
count for the proceeds of all sales he may make, according
to the laws of the state in which he was appointed. It is
to be noticed that these sections do not contemplate the
appointment of a Kansas executor or administrator or any
appointment in Kansas whatever; they merely relate to the
recognition, for the purpose of effecting the sale of real
estate situated in Kansas, of an appointment made else-
where.
In the present case the executors proceeded under the
first stated of these two methods. They did not ask that
the Kansas court should authorize them to sell real estate
in virtue of their having qualified as executors in Illinois.
Dec. 1905.] Albright v. Bangs. 223
They were appointed as executors for Kansas, amenable to
the Kansas courts and the Kansas laws in all things, and
they gave bond and took their oaths as Kansas executors.
The circumstance that they had already been appointed ex-
ecutors ^^® in Illrnois is a mere incident. It was not essen-
tial to their appointment in Kansas. Indeed, it would ap-
pear that, since the statutes of Illinois and of Kansas alike
forbid the appointment of a nonresident executor, no one
could properly qualify as an executor in both states.
On the other hand, the administrator proceeded under
the second method. He did not seek to be, nor was he, ap-
pointed as a Kansas administrator. He merely asked to
have the appointment that had already been made in Illi-
nois recognized by the Kansas court, so that he might as
an Illinois administrator sell Kansas real estate under the
supervision of a Kansas court.
As appears by section 2950, supra, this could be done only
upon the theory that no executor or administrator had
been appointed in Kansas. Executors had been appointed
in Kansas. One of them died. The other, although re-
moved by the Illinois court because he was not a resident
of Illinois, may have been still qualified to act in Kansas,
80 far as the record discloses. In order for the Cowley
county probate court to have had jurisdiction to permit
the foreign administrator to sell Kansas real estate the
executors already appointed must have been disposed of in
some way. Perhaps to sustain the acts of the court it may
te assumed that the surviving executor had been removed
by the Kansas court as well as by that of Illinois, and that
the situation therefore became the same, so far as related
to sales of real estate by a foreign administrator, as though
no executor or administrator had been appointed in Kansas.
In that view of the matter the administrator de bonis non,
in virtue of his appointment in Illinois, might have been
authorized to sell real estate in Kansas "in the same man-
ner and upon the same terms and conditions as are pre-
scribed in the case of an executor or administrator ap-
pointed in this state." But to procure an order for that
purpose it was essential that he should give notice. He
could not avail himself of the notice given by the executors
*** fifteen years before, for he was not their successor in
this matter — he did not succeed them in the capacity in
224 American State Reports, Vol. 115. [Kansas,
which they had acted in giving the notice and obtaining the
order of sale. He may have been, and doubtless was, the
successor of the executors so far as related to their appoint-
ment and qualification in Illinois, but he was not their
successor in respect to their appointment and qualification
in Kansas. The notice they gave and the order they pro-
cured from the Kansas court were solely in virtue of their
appointment in Kansas, and, although they chanced to be
the same persons to whom letters testamentary had already
been issued in Illinois, it does not follow that the person
appointed to succeed them there acquired the authority to
complete their acts begun in their capacity as Kansas ap-
pointees.
The administrator's deed was therefore void, and consti-
tuted no defense to the action of ejectment brought by the
owners of the land. The judgment is affirmed.
All the justices concurring.
On Administrators Be Bonis Non, see the note to Morrow v. Fidelity
and Deposit Co., 108 Am. St. Eep. 413.
STATE V. MONAHAN.
[72 Kan. 492, 84 Pac. 130.]
CONSTITUTIONAL LAW — Elections — Property Qualifications
of Officers. — A constitutional provision that no property qualification
shall be required for any office of public trust, or for any vote at any
election, applies only to elections and offices provided for in such
constitution, and has no application to elections held in, or officers
chosen for a public corporation created by statute, such as a drain-
age district, whose directors may be required to be freeholders elected
by resident taxpayers, (p. 226.)
CONSTITUTIONAL LAW — Elections — Property Qualifications
of Officers. — The elections held to choose officers of a drainage district
or to pass upon the expediency of proposed improvements designed
for protection against floods are not merely other elections than those
provided for in the constitution; they are of a different character
from any therein referred to, and so far dissimilar in their nature that
it cannot be inferred that they were within the contemplation of the
constitutional convention when the qualifications of electors were
under consideration by that body. (p. 232.)
CONSTITUTIONAL LAW— Property Qualifications of Officers
of Drainage Districts. — A statutory requirement that the directors of
a drainage district shall be freeholders is not in contravention of a
constitutional limitation forbidding a property qualification for any
office of public trust, (p. 233.)
Dee. 1905.] State v. Monahan. 225
C. C. Coleman, attorney general, and J. S. Gibson, county
attorney, for the state.
W. R. Smith, Pratt, Dana & Black and Waggener, Doster
& Orr, of counsel.
S. W. Moore and F. H. Wood, amici curiae.
Keplinger & Trickett, for the defendants.
^®* MASON, J. The Kansas legislature at its last ses-
sion enacted a law (Laws 1905, e. 215) permitting the crea-
tion of public corporations known as drainage districts,
having power to take certain measures for the protection
of property within their boundaries against injury from
the overflow of natural watercourses ; this power to be exer-
cised by a board of directors, chosen by the resident tax-
payers, who are authorized to call elections to vote upon
propositions to issue bonds to meet the cost of any im-
provements undertaken. This action is brought in the
name of the state, upon the relation of the county attorney,
against the persons selected as the first directors of such a
drainage district, which has been organized in Wyandotte
'*®^ county, to oust them from the exercise of the duties
attached by the statute to their office, upon the ground
that the act referred to is wholly void because it conflicts
with the Kansas constitution. The case is submitted on a
demurrer to the petition.
The provisions of the act which are claimed to be in con-
flict with the fundamental law of the state are those pre-
scribing the qualifications of directors and electors of the
district. Section 13 provides: "At all elections and meet-
ings held under the provisions of this act, only persons
twenty-one years of age who are taxpayers and residents of
the district, regardless of sex, shall be entitled to vote."
Substantially the same language is also found in section
9. Section 8 reads: "That all powers granted to drainage
districts incorporated under the provisions of this act shall
be exercised by a board of directors consisting of five per-
sons, who shall be freeholders and actual residents of the
district, who shall hold their offices for three years and
until their successors are elected and qualified, and who
shall be chosen at the time and in the manner hereinafter
specified."
Am. St. Rep., Vol. 115—15
226 American State Reports, Vol. 115. [Kansas,
Section 7 of the Bill of Rights includes this restriction:
"No religious test or property qualification shall be re-
quired for any oflfice of public trust, nor fpr any vote at any
election": Gen. Stats. 1901, sec. 89.
In behalf of the plaintiff it is asserted that the statute,
in requiring directors of the district to be freeholders, and
voters to be taxpayers, attempts to impose a property qual-
ification for an office of public trust, and for a vote at an
election, within the letter and spirit of the constitutional
limitation quoted. The defendants maintain: 1. That the
words "election" and "office," as here used in the consti-
tution, relate only to elections and offices provided for in
that instrument, and have no application to elections held
in, or officers chosen for, a public corporation created by
statute, such as a drainage district ; 2. That, even if '*^^ the
provisions attacked are invalid, they may be disregarded
without impairing the effect of the remainder of the act.
As the court agrees with the defendants in their first con-
tention, it will not be necessary to consider the second.
The question whether it is competent for the legislature
to confine to taxpayers the right of voting at such elec-
tions as are provided by this act must be answered in the
affirmative, upon the authority of Wheeler v. Brady, 15
Kan. 26. In that case this court upheld a statute giving
women the right to participate in the election of school dis-
trict officers, notwithstanding the constitution in granting
the general right of suffrage to male citizens only by neces-
sary implication excluded females from its exercise. The
decision was based upon the principle that the constitu-
tional expressions concerning the privilege of voting were
intended to apply only to those elections provided for by
the constitution itself. In the opinion it was said: "There
is no school district election or meeting provided for in
the constitution; there is no provision as to how school
district officers shall be elected, appointed, or chosen; and
we suppose no one will claim that they are, by the terms
of the constitution, to be elected at either of the elections
provided for in the constitution; hence it would seem that
the legislature would have full and complete power in the
matter; that the legislature might provide for the election
or appointment of school district officers as it should choose,
Dec. 1905.] State v. Monahan. 227
when it should choose, in the manner it should choose, and
by whom it should choose": Page 32.
The soundness of this decision is questioned by counsel
for the plaintiff, who allege that it is out of harmony with
the view prevailing elsewhere. It has, however, been fre-
quently cited with approval in other jurisdictions: See
State V. Comes, 15 Neb. 444, 19 N. W. 682; Plummer v.
Yost, 144 111. 68, 33 N. E. 191, 19 L. R. A. 110; State v.
Dillon, 32 Fla. 545, 14 South. 383, 22 L. R. A. 124; Harris
V. Burr, 32 Or. 348, 52 Pac. 17, ^^^ 39 L. R. A. 768 ; State
V. Board of Elections of City of Columbus, 9 Ohio C. C. 134.
The cases of Matter of Gage, 141 N. Y. 112, 35 N. E. 1094,
25 L. R. A. 781, People v. English, 139 111. 622, 29 N. E.
678, 15 L. R. A. 131, and Coffin v. Election Commrs., 97
Mich. 188, 56 N. W. 567, 21 L. R. A. 662, turned upon differ-
ent aspects of the question, but cited the Kansas case with
approval, and in distinguishing it emphasized the force of
the reasoning by which it was sustained.
While the following cases did not in terms refer to
Wheeler v. Brady, 15 Kan. 26, they involved substantially
the same question and decided it in the same way: Buckner
V. Gordon, 81 Ky. 665 ; Belles v. Burr, 76 Mich, i, 43 N. W.
24; Mayor etc. v. Shattuck, 19 Colo. 104, 41 Am. St. Rep.
208, 34 Pac. 947 ; Hanna v. Young, 84 Md. 179, 57 Am. St.
Rep. 396, 35 Atl. 674, 34 L. R. A. 55 ; Spitzer v. Village of
Fulton, 172 N. Y. 285, 92 Am. St. Rep. 736, 64 N. E. 957 ;
Leflore County v. State, 70 Miss. 769, 12 South. 904.
It is true that there are cases which announce a contrary
doctrine, but they are neither of so large a number nor of
such cogency of reasoning as to shake the authority of the
Kansas decision : See St. Joseph etc. R. R. Co. v. Buchanan
Co. Court, 39 Mo. 485; State v. Constantine, 42 Ohio St.
437, 51 Am. Rep. 833; Black v. Trower, 79 Va. 123; Allison
V. Blake, 57 N. J. L. 6, 29 Atl. 417, 25 L. R. A. 480.
The present case cannot be distinguished from the earlier
one upon the ground that here the limitation invoked is
express, while there it was merely implied, or upon the
ground that here the right of suffrage is restricted, while
there it was enlarged. It is universally held that the enu-
meration in a state constitution of the classes of citizens who
shall be permitted to vote is to be taken as to all matterg
223 American State Reports, Vol. 115. [Kansas,
within the purview of the provision as a complete and final
test of the right to the exercise of that privilege, and that
the legislature ^®** can neither take from nor add to the
qualifications there set out: 15 Cyc. 281, 282, 298; 10 Am.
& Eng. Ency. of Law, 573, 576, 577. The case of Wheeler
V. Brady, 15 Kan. 26, was not decided upon the theory that
the legislature might extend to women the right to vote for
school officers because the constitution did not forbid such
enlargement of the voting privilege there granted. On the
contrary, the court assumed that the constitutional pro-
vision defining qualified electors as male persons of stated
attril)utes operated to bar females from the exercise of the
right there referred to as completely as though there had
been an express prohibition to that effect, and that the
legislature could no more enlarge any right of suffrage con-
ferred by the constitution than it could restrict it. The de-
termination reached was, therefore, necessarily based upon
the doctrine that the constitutional rules concerning the
right to vote have application only to such elections as are
provided for in the constitution itself.
Nor can the present case be withdrawn from the opera-
tion of this doctrine b)'' reason of the broad and unqualified
language of the prohibition relied upon by plaintiff: "No
.... property qualification shall be required .... for
any vote at any election.'* Manifestly it is not necessary
to construe this literally as applying to every election what-
soever. It doubtless would not be contended that the sen-
tence relates to the election of the officers of a private cor-
poration, although that is a matter over which the legisla-
ture exercises some control : Gen. Stats. 1901, sec. 1288.
It would be superfluous to cite instances in which general
language of this character has been given a restricted mean-
ing. A typical example is presented in Pape v. Capitol
Bank, 20 Kan. 440, 27 Am. Rep. 183, where the requirement
that no banking law shall be in force until submitted to a
popular vote is held to apply only to banks of issue: See,
also, Fischer v. Moore, 69 Kan. 191, 76 Pac. 403. A reason-
able interpretation ^"'' of the clause here in question seems
to confine its application to those elections provided for or
referred to in other parts of the constitution. This is in
accordance with the view taken of equivalent expressions
in cases already cited. In Hauna v. Young, 84 Md. 179
Dec. 1905.] State v. Monahan. 229
57 Am. St. Eep. 396, 35 Atl. 674, 34 L. R. A. 55, the section
of the Maryland constitution under consideration was as
follows: "All elections shall be by ballot; and every male
citizen of the United States, of the age of twenty-one years
or upAvard, who has been a resident of the state for one
year, and of the legislative district of Baltimore city, or oJ"
the county in which he may offer to vote, for six months
next preceding the election, shall be entitled to vote in the
ward or election district in which he resides at all elec-
tions hereafter to be held in this state."
Of this section it was said in the opinion: "It is con-
tended on the part of the appellant that this section of the
constitution plainly comprehends and includes within its
express terms all elections, whether state or federal, county
or municipal. Yet there is but one municipality mentioned
in this section of the organic law, and in fact Baltimore City
is the only municipality mentioned eo nomine in any part of
the constitution Whilst the constitution (art. 3, sec.
48) authorizes and empowers the general assembly to create
corporations for municipal purposes, it nowhere prohibits
the legislature from imposing upon the qualified voters re-
siding within the corporate limits of a town any reasonable
restrictions it may deem proper, when seeking the exercise
of the right of elective franchise in the selection of its offi-
cers. In this respect the power of the legislature is unlim-
ited. The argument advanced at the hearing in this court
is to the effect that the act in question is void because the
constitution has conferred the right and prescribed the
qualifications of all electors in this state, [and] the legis-
lature is without authority to change or add to them in
any manner. If the premises of this contention were cor-
rectly stated, the argument and sequence would undoubt-
edly be correct. But. as already observed, the constitu-
tion (art. 3, sec. 48) only in general terms authorizes "**** the
creation of corporations for municipal purposes, and leaves
to the legislature the enactment of such details as it may
deem proper in the management of the concerns of the cor-
poration, or which may be regarded as beneficial in the
government of the same. The constitution of this state pro-
vides for the creation of certain offices, state and county,
which are filled, either by election or by appointment; and
we regard it as an unreasonable inference to suppose that
230 American State Reports, Vol. 115. [Kansas,
municipal elections held within the state (outside the cor-
porate limits of Baltimore City) can be properly termed
elections under the constitution, such as state and county
elections; or that the framers of the constitution ever con-
templated that article 1, section 1, of that instrument was
intended to apply to municipal elections, such as the one
now under consideration, which is the mere creature of
statutory enactment It is only at elections which the
constitution itself requires to be held, or which the legis-
lature under the mandate of the constitution makes pro-
vision for, that persons having the qualifications set forth
in said section 1, article 1, are by the constitution of the
state declared to be qualified electors": Pages 182, 183.
The case of Belles v. Burr, 76 Mich. 1, 43 N. W. 24, in-
volved the construction of a section of the Michigan consti-
tution reading as follows: "In all elections every male
citizen ; every male inhabitant residing in the state on the
twenty-fourth day of June, 1835 ; that every male inhab-
itant residing in the state on the first day of January, 1850,
who has declared his intention to become a citizen of the
United States, pursuant to the laws thereof, six months
preceding an election, or who has resided in the state two
years and six months, and declared his intention as afore-
said; and every civilized male inhabitant of Indian descent,
a native of the United States, and not a member of any
tribe — shall be an elector, and entitled to vote; but no citi-
zen or inhabitant shall be an elector or entitled to vote at
any election unless he shall be above the age of twenty-
one years, and has resided in this state three months, and
in the township or ward in which he offers to vote ten
days, next preceding such election."
"•^^ The court said: "While it must be conceded that no
person can vote for the election of any officer mentioned
in the constitution unless he possesses the qualifications of
an elector prescribed by that instrument, it does not fol-
low that none but such electors can vote for officers which
the legislature has the right to provide for, to carry out
the educational purpose declared in that instrument":
Page 11. .
In Mayor etc. v. Shattuck, 19 Colo. 104, 41 Am. St. Rep.
208, 34 Pac. 937, the court, in interpreting a constitutional
provision that certain persons should be entitled to vote "at
Dec. 1905.] State v. Monahan. 231
all elections," said: "It is manifest that some restriction
must be placed upon the phrase 'all elections,' as used in
section 1, else every person having the qualifications there-
in prescribed might insist upon voting at every election,
private as well as public, and thus interfere with affairs
of others in which he has no interest or concern. In our
opinon the word 'elections,' thus used, does not have its
general or comprehensive signification, including all acts
of voting, choice, or selection, without limitation, but is
used in a more restricted political sense — as elections of
public officers."
In Spitzer v. Village of Fulton, 172 N. Y. 285, 92 Am. St.
Rep. 736, 64 N. E. 957, the court said of a provision of the
constitution giving citizens having certain qualifications the
right to vote "for all officers that now are or hereafter may
be elective by the people, and upon all questions which may
be submitted to the vote of the people": "The contention
of the plaintiffs is that the provisions of chapter 269 eon-
tain a restriction upon the provisions of article 2 as to the
right to vote for elective officers and upon all questions
which may be submitted to the vote of the people, and,
hence, are violative of its provisions. The obvious purpose
of that article was to prescribe the general qualifications
that voters throughout the state were required to possess
to authorize them to vote for public officers or upon public
questions relating to general governmental affairs. But we
are of the opinion that that article was not intended to de-
fine the qualifications of voters upon questions relating to
the financial interests or ****** private affairs of the various
cities or incorporated villages of the state, especially when,
as in this case, it relates to borrowing money or contracting
debts": Page 289.
The Mi.ssissippi legislature enacted a stock law which was
to become effective in each county upon being approved at
a local election, to be participated in by voters having quali-
fications entirely different from those prescribed for elect-
ors by the con.stitution. The statute was attacked upon
the ground that it sought to establish a property qualifica-
tion for voting and to extend the right of suffrage to per-
sons barred from its exercise by the constitution. In Le-
flore County V. State. 70 Miss. 769, 12 South. 904, the court
said: "The provisions of the constitution as to qualified
232 American State Reports, Vol. 115. [Kansas,
electors, and registering electors, and the election ordinance
adopted by the constitutional convention, have been ap-
pealed to as rendering: unconstitutional the provisions of
the code as to a stock law. We reject this view. There is
nothing in the constitution or ordinances at war with the
stock law. The legislature might pass a stock law for one
or all the counties Avithout a vote of the people on the
subject. It might empower each board of supervisors to
declare such law in force, without vote or petition of the
people, and, having plenary power over the subject, was
authorized to prescribe the conditions on which the boards
might act": Page 778.
The electioijs referred to in the act under consideration
were not provided for by the constitution, nor did the con-
stitution impose upon the legislature any duty to make
provision for them. They were not required to be held
by reason of anything contained in the fundamental law of
the state. The drainage district in question is wholly the
creation of the legislature, which had practically unlimited
discretion in the matter. The statute might have made the
office of director appointive instead of elective, and might
have made the issuance of bonds dependent upon the will
of the taxpayers as indicated by petition instead of by
vote. That the '^^^ selection of the officers Avho act for the
corporation is decided by the usual electoral machinery,
but by a restricted electorate, and that the concurrence of
the taxpayers in a bonding proposition is expressed by
means of an election, rather than by some other method, do
not bring the case within the reason or within the true
meaning of the clause of the constitution relied upon by
the plaintiff. The elections held to choose officers of a
drainage district or to pass upon the expediency of pro-
posed improvements designed for protection against floods
are not merely other elections than those provided for in
the constitution; they are of a different character from any
therein referred to, and so far dissimilar in their nature
that it cannot be supposed that they were within the con-
templation of the constitutional convention when the quali-
fications of electors were under consideration by that body.
It practically follows from the views already announced
that the requirement that the directors of the district shall
be freeholders is not in contravention of the constitutional
Jan. 1906.] McAllister v. Fair. 233
limitation forbidding a property qualification for any office
of public trust. The words "office of pubilc trust" are
equivalent to "public office": Ex parte Yale, 24 Cal. 241,
85 Am. Dec. 62; Conley v. State, 46 Neb. 187, 64 N. W.
708. The director of a drainage district is in a sense a pub-
lic officer, but as his office is not one provided for by the
constitution, nor even one of the same general character
as any that are referred to in that instrument, it must be
deemed not to be within the scope of the prohibition. The
reasons for giving to the broad expression "any election"
a restricted meaning apply with almost or quite equal force
to the corresponding one — "any office of public trust."
As the two phrases are used in the same sentence and in
the same connection, it would hardly be reasonable to en-
force the restriction in the one case and not in the other.
The demurrer to the petition is sustained.
All the justices concurring.
A Statute Limiting the Eight of Suffrage as to the business and finan-
cial affairs of villages to the taxpayers of the municipality does not
violate the article of the constitution defining the general qualifica-
tions of the electors of the state: Spitzcr v. Fulton, 172 N. Y. 285,
92 Am. St. Rep. 736. For other authorities on this question, see
Hanna v. Young, 84 Md. 179, 57 Am. St. Eep. 396; Mayor v. Shattuck,
19 Colo. 104, 41 Am. St. Rep. 208.
McAllister v. fair.
[72 Kan. 5.33, 84 Pac. 112.]
DESCENT AND DISTRIBUTION— Inheritance by Murderer.—
If the statute of descents provides in clear and unambiguous terms
♦hat a husband shall inherit from his wife dying intestate, and makes
no exception on account of crime on his part, the courts cannot, upon
considerations of public policy, so interpret the statute as to exclude
from the inheritance one who murders his wife for the purpose of ac-
quiring her property, (p. 285.)
DESCENT AND DISTRIBUTION- Bight of Criminal to In-
herit.— If the statute of descents contains no exception on account
of crime by one entitled to inherit under its terms, the courts can add
none. (p. 239.)
R. W. Turner, for the plaintiffs in error.
W. S. Canan. W. R. Mitchell and S. H. Allen, for the de-
fendants in error.
234 American State Reports, Vol. 115. [Kansas,
**** JOHNSTON, C. J. This was a proceeding begun iu
the probate court to obtain a distribution of the estate
of Kate Brandt. She was killed by her husband on March
14, 1903. for the purpose of obtaining her property, and in
a prosecution for the offense he was convicted of murder
in the first degree and is now imprisoned in the penitentiary
under a death sentence. She had no children, and under
ordinary and normal circumstances her husband would
inherit her estate. She left a personal estate said to be
worth about one thousand dollars, and the husband assigned
and transferred his interest in it to G. A. Bailey, the attor-
ney who defended him against the criminal charge. Her
brothers and sisters, the nearest blood relatives living,
claimed the estate, alleging that the husband's crime dis-
abled him from taking any interest in it. In the probate
court, and also in the district court, to which the case was
appealed, '^^^ it was held that the husband was the only heir
of his deceased wife ; that her estate descended to him ; and
that Bailey was entitled to it under the assignment.
The plaintiffs complain, and insist that a murderer should
not be permitted to inherit the estate of his victim. The
descent and devolution of property is regulated by statute.
Section 2521 of the General Statutes of 1901 provides: "If
the intestate leave no issue, the whole of his estate shall go
to his wife; and if he leave no wife nor issue, the whole of
his estate shall go to his parents." Section 2529 provides:
"All the provisions hereinbefore made in relation to the
widow of a deceased husband shall be applicable to the hus-
band of a deceased wife. Each is entitled to the same
rights or portion in the estate of the other, and like in-
terests shall in the same manner descend to their respective
heirs." Section 2532 provides that "the personal prop-
erty of the deceased not necessary for the payment of debts,
nor otherwise disposed of according to law, shall be dis-
tributed to the same persons and in the same proportions as
though it were real estate." It is conceded that the stat-
ute is general and inclusive in its terms, but it is said to
be inconceivable that the legislature intended to give an
estate to a husband who murdered his wife to obtain it.
It is argued that the letter of a statute should not prevail
over its sense and spirit, and that a literal interpretation
of the statute in question would in effect be giving property
Jan. 1903.] McAlijster v. Fair. 235
as a reward for crime. It is said that the legislature is
presumed to have enacted the statute in question having in
view the maxims of the common law that no man shall take
advantage of his own wrong, or acquire property by his
own crime, or use the law to accomplish his unlawful pur-
poses, and, therefore, that the courts are justified in im-.
puting a different intention to the legislature and excepting
murderers from the operation of the statute.
These considerations would have great weight if ^^^ there
were ambiguity in the statute, or if it were the province
of the court to settle the policy of the state with respect
to the descent of property or as to the character and extent
of punishment which should be inflicted for the commission
of crime. That anyone should be given property as the re-
sult of his crime is abhorrent to the mind of every right-
thinking person, and is a strong reason why the lawmakers,
in fixing the rules of inheritance and prescribing punish-
ment for felonious homicide, should provide that no person
shall inherit property from one whose life he has feloniously
taken. A statute of this character has been enacted in at
least one state: Iowa Code, 1897, sec. 3386; Kuhn v. Kuhn,
125 Iowa, 449, 101 N. W. 151. The horror and repulsion
caused by such an atrocity, however, do not warrant the
court in reading into a plain statutory provision an excep-
tion which the statute itself in no way suggests. If the
statute were of doubtful meaning and open to two con-
structions, there might be room to infer that the legislature
intended the one which would be most reasonable and just
in its application. As will be observed, however, the rule
of inheritance is explicit, and the statute contains no hint
that anyone is to be excluded on account of misconduct or
crime.
In Ayers v. Commissioners of Trego Co., 37 Kan. 240, 15
Pac. 229, the court was asked to read into a statute a mean-
ing which its words did not import, and the re()ly was
made: "We have not the right to change the statute where
it is clear and free from ambiguity, by any judicial inter-
pretation." In the recent case of Atchi.son etc. Ry. Co. v.
Atchison Grain Co., 68 Kan. 585, 75 Pac. 1051, it was held
that the* fraud and misconduct of one party which pre-
vented another from bringing an action did not create an
implied exception to the statute of limitations; that, the
236 American State Repohts, Vol. 115. [Kansas,
legislature having made no exception on that ground, none
could be made by the courts; that it was the duty of the
courts to administer the law regardless of particular cases
of hardship; that the '*^** function of changing a law be-
cause it works unjustly or oppressively belongs to the
legislature, and for a court to ingraft an exception upon
a statute would be judicial legislation.
The argument that a literal interpretation of the statute
would in effect encourage crime and contravene public pol-
icy is no reason why the courts should disregard a plain
statutory provision, nor would it justify them in determin-
ing the policy of the state upon the question. The right
to determine what is the best policy for the people is in
the legislature, and courts cannot assume that they have a
wisdom superior to that of the legislature and proceed to
inject into a statute a clause which, in their opinion, would
be more in consonance with good morals or better accom-
plish justice than the rule declared by the legislature. It
has been said that "the well-considered cases warrant the
pertinent conclusion that when the legislature, not tran-
scending the limits of its power, speaks in clear language
upon a question of policy, it becomes the judicial tribunals
to remain silent": Deem v. Millikin, 6 Ohio C. C. 357.
The statute makes nearness of relationship to the dece-
dent, and not the character or conduct of the heir, the con-
trolling factor as to the right of inheritance. Besides, the
penalties for felonious homicides are definitely prescribed in
another statute, and the loss of the inheritable quality or
the forfeiture of an estate is not among them. If the court
should hold that the loss of heirship and the forfeiture
of an estate were a consequence of Brandt 's crime, it would
have to ignore the legislative rule governing the descent
of property, and would, in effect, impose a punishment for
his crime in addition to that prescribed by the only body
authorized to declare penalties for violations of law. Nor
is it easy to attribute to the legislature an intention to
take from a criminal the right to inherit as a consequence
of his crime, since the constitution provides that no convic-
tion shall work a corruption of blood or ^^^ forfeiture of
estate: Bill of Rights, sec. 12; Gen. Stats. 1901, sec. 94.
The cases relied on by plaintiffs in error as authorities
against the right to inherit are those involving insurance
Jan. 1906.] McAllister v. Fair. 237
policies, wills, and the like: Riggs v. Palmer, 115 N. Y.
506, 12 Am. St. Rep. 819, 22 N. E. 188, 5 L. R. A. 340; Eller-
son V. Westeott, 148 N. Y. 149, 42 N. E. 540; Luudy v
Lundy, 24 Can. S. C. 650; New York Life Ins. Co. v. Arm
strong, 117 U. S. 591, 6 Sup. Ct. Rep. 877, 29 L. ed. 997
Schmidt v. Northern L. Assn., 112 Iowa, 41, 84 Am. St. Rep
323, 83 N. W. 800, 51 L. R. A. 141 ; Box v. Lanier, 112 Tenn
393, 79 S. W. 1042, 64 L. R. A. 458.
There is a manifest difference, however, between private
grants, conveyances and contracts of individuals and a pub-
lic act of the legislature. It might be tliat a person would
not be permitted to avail himself of the benefits of an in-
surance policy the maturity of which had been accelerated
by his felonious act. Many considerations of an equitable
nature might affect the operation or enforcement of a grant
or contract of a private person which would have no appli-
cation or bearing on a statute enacted by the legislature.
So far as the descent of property is concerned, the courts
are practically unanimous in holding that all the power and
responsibility rest with the legislature. They have spoken
with one voice in opposition to the exclusion of an heir
from taking an estate on account of crime, where the
statute in plain terms designates him as one entitled to in-
herit.
In Owens v. Owens, 100 N. C. 240, 6 S. E. 794, the court
had under consideration the question whether a wife who
had been convicted of being accessory to the killing of her
husband was disabled from taking the share of the estate
left by, the deceased which the statute gave to her. It was
said: "We are unable to find any sufficient legal grounds
for denying to the petitioner the relief which she demands;
and it belongs to the law-making power alone ^^** to pre-
scribe additional grounds for the forfeiture of the right,
which the law itself gives, to a surviving wife.
"Forfeitures of property for crime are unknown to our
law, nor does it intercept for such cause the transmission
of an intestate's property to heirs and distributees, nor can
we recognize any such operating principle": Page 242.
In Carpenter's Estate, 170 Pa. 203, 50 Am. St. Rep. 765.
32 Atl. 637, 29 L. R. A. 145, it was held that a son who mur-
dered his father for the purpose of .securing the father's
estate was entitled to take the estate under the intestate
1
233 American State Reports, Vol. 115. [Kansas,
laws, and that his crime did not destroy his right of inheri-
tance. Among other things the court remarked: "The legis-
lature has never imposed any penalty of corruption of blood
or forfeiture of estate for the crime of murder, and there-
fore no such penalty has any legal existence The
intestate law in the plainest words designates the persons
who shall succeed to the estates of deceased intestates. It
is impossble for the courts to designate any different per-
sons to take such estates without violating the law
It is argued, however, that it would be contrary to public
policy to allow a parricide to inherit his father's estate.
"Where is the authority for such a contention? Plow can
such a proposition be maintained when there is a positive
statute which disposes of the whole subject? How can
there be a public policy leading to one conclusion when
there is a positive statute directing a precisely opposite con-
clusion? In other words, when the imperative language of
a statute prescribes that upon the death of a person his
estate shall vest in his children in the absence of a will,
how can any doctrine, or principle, or other thing called
public policy, take away the estate of a child and give it
to some other person? The intestate law casts the estate
upon certain designated persons, and this is absolute and
peremptory, and the estate cannot be diverted from those
persons and given to other persons without violating the
statute. There can be no public policy which contravenes
the positive language of a statute": Page 208.
In Deem v. Millikin, 6 ^^» Ohio C. C. 357, it was held
that "the statute of descents provides in clear terms that
where one dies intestate and seised in fee of lands, they
shall descend and pass to the children of such intestate;
and the courts cannot, upon considerations of policy, so
interpret the statute as to exclude from the inheritance one
who murders such intestate": Syllabus. This decision was
affirmed by the supreme court of Ohio upon the reasons
given by the circuit court: Deem v. Millikin, 53 Ohio St.
668, 44 N. E. 1134.
In Shellenberger v. Ransom, 41 Neb. 631, 59 N. W. 939,
25 L. R. A. 564, the supreme court of Nebraska first held
that one who killed an ancestor could not share in an es-
tate (Shellenberger v. Ransom, 31 Neb. 61, 28 Am. St.
Rep. 500, 47 N. W. 700, 10 L. R. A. 810), but upon a re-
Jan. 1906.] McAllister v. Fair. 239
hearing and a fuller consideration the court changed its
position and declared that where the statute of descents
contains no exception on account of crime the courts can
add none. In determining the question the court, at page
643, quoted approvingly from Bosley v. Mattingly, 53 Ky.
(14 B. Mon.) 89, as follows: "When the law is clear and
explicit, and its provisions are susceptible of but one inter-
pretation, its consequences, if evil, can only be avoided by
a change of the law itself, to be effected by legislative,
and not judicial, action."
In meeting the suggestion that to allow a person to gain
property by intentional homicide is shocking to the senses,
and that the legislature would necessarily have shared in a
feeling of abhorrence against such a rule if they had given
it attention when the act was passed, the court remarked:
"This is no justification to this court for assuming to sup-
ply legislation, the necessity for which has been suggested
by subsequent events, but which did not occur to the minds
of those legislators by whom our statute of descent was
framed. Neither the limitations of the civil law nor the
promptings of humanity can be read into a statute from
which, without question, they are absent, no matter how de-
sirable the result to be attained may be": Page 644.
•^o In the case of Kuhn v. Kuhn, 125 Iowa, 449, 101
N. W. 151, it was contended that public policy forbids a
party from deriving advantage from a criminal act, but
the answer made by the supreme court of Iowa was: "The
public policy of a state is the law of that state as found in
its constitution, its statutory enactments, and its judicial
records: People v. Hawkins, 157 N. Y, 1, 68 Am. St. Rep.
736, 51 N. E. 257, 42 L. R. A. 490. And when such policy
touching a particular subject has been declared by statute,
as in this case, it is limited by such statute, and the courts
have no authority to say that the legislature should have
made it of wider application": Page 453.
In Box v. Lanier, 112 Tenn. 393, 79 S. W. 1042, 64 L. R.
A. 458, which is cited as an authority against the husband's
right to inherit, there was a contest over the proceed.s of
an insurance policy, and, while it was held that the husband
who feloniously killed his wife was incapacitated to take
her choses in action, it was determined upon the rules of
the common law, and not upon a statute of descents. The
240 American State Reports, Vol. 115. [Kansas.
majority of the court recognized that the weight of au-
thority, as well as the better legal reasoning, supported the
view that an unqualified statute casting descent should be
given effect, and in the opinion it was said: "For it may
be true that it would be a stretch of judicial authority to
hold that an unambiguous statute providing a line of devo-
lution of property should be interpreted to mean that this
line was to be broken upon the felonious homicide of the
ancestor or testator by the one next in succession": Page
407.
The court then proceeded to determine that no statute
existed in the state governing the devolution of property in
such cases, and based its judgment on common-law prin-
ciples entirely: See, also, 41 Cent. L. J. 377.
Although a theory cutting a murderer out of any benefits
resulting from his crime appeals to the court's sense of
justice, it cannot be overlooked that the legislature has
the power to declare a rule of descents; it *** has done so
in language that is plain and peremptory, and no rule of
interpretation would justify the court in reading into the
statute an exception or clause disinheriting those guilty of
crime.
The judgment of the district court is affirmed.
All the justices concurring.
The Principal Case has the support of Carpenter's Estate, 170 Pa. 203,
50 Am. St. Kep. 765. However, it is held that a beneficiary in ii
life insurance policy payable to him, his heirs, or legal representatives,
who murders the insured, forfeits his rights under the policy, and
neither he, his assigns, nor his children as heirs can recover thereon
during his lifetime: Schmidt v. Northern Life Assn., 112 Iowa, 41, 84
Am, St. Rep. 323.
CASES
IN THE
COURT OE APPEALS
OF
KENTUCKY.
COSTIGAN V. TRUESDELL.
[119 Ky. 70, 83 S. W. 98.]
JUDICIAL SAIiE. — Mere Inadequacy of Price is not sufficient
to set aside a sale of a decedent's real estate to pay debts, (p. 242.)
JUDICIAL SALE — Setting Aside After Confirmation. — Except
upon the grounds stated in section 518 of tiie Civil Code practice, a
court is without power to set aside a sale of a decedent's real estate
to pay debts after its confirmation, (p. 242.)
JUDICIAL SALE — Parties, — A Sale of a Decedent's real es-
tate to pay debts in an action for the settlement of the estate will
not be set aside because a person who claims to be a creditor, but who
has not established his claim, was not made a party to the proceed-
ings, (p. 243.)
JUDICIAL SALE. — ^Where the Sale of an Equity of Bedemp-
tion is ordered to pay a decedent's debts, the fact that the order of
sale is not executed does not prevent the termination of the statutory
right to redeem, (p. 243,)
JUDICIAL SALE — Bents, — If a Purchaser of a Decedent's
Bealty, sold to pay a mortgage and other indebtedness, takes posses-
sion before the expiration of the time for redemption, he becomes
liable to the owners for the rents. They are not assets of the estate,
but a claim in favor of the husband and heirs of the decedent, (p.
243.)
JUDICIAL SALE — Bight of Possession. — The Owners of a de-
cedent's estate, sold to pay a mortgage and other indebtedness, are
entitled to possession until a receiver is appointed or the period of
exemption expires, (p. 243.)
Louis Reuscher and C. L. Raison, for the appellant.
George "Washington, Ramsey "Washington and Edward
A. Bruton, for the appellant.
^» PAYNTER, J. This action was instituted to settle
the estate of Anna "W. Covington, and there being but little
personal property, it was necessary to sell real estate. A
Am. St. Bep,, Vol. 115—16 (241)
242 American State Reports. Vol. 115. [Kentucky,
building association held a mortgage on the real estate, and
there were some other creditors, including Costigan, who
did not have a lien upon it. The court ordered it sold to
satisfy the debts, and it was sold for that purpose on Feb-
ruary 4, 1903, and it was purchased at the commissioner's
sale by the appellee Truesdell at less than two-thirds of
its appraised value. On February 14, 1903, the sale was
confirmed. The proceeds of the sale only paid the mort-
gage creditor and costs of the suit, leaving the demands
of the other creditors unsatisfied. On ]\Iarch 28, 1903, the
court ordered the equity of redemption sold, but for some
reason not appearing in the record that order was never
executed. In November, 1903, W. G. Wagenlander filed a
petition asking to be made a party to the action, claiming
he had a debt of thirty dollars against the estate secured
by mortgage on the real estate. He seems to have aban-
doned his claim, as he took no further steps to enforce it,
and he is not here complaining, so the questions here for re-
view are not affected by the alleged claim of Wagenlander.
On February 2, 1904, two days before the time for the re-
demption of the land expired, the appellant Costigan filed
what is denominated as an answer and cross-petition, by
which he sought to set aside the sale to Truesdell, claiming
the land had been sold for a grossly inadequate price. Af-
ter the expiration of the time for redemption, ''* Costigan
filed an amended answer and cross-petition, in which he
avers that, if the property is resold, he would pay five hun-
dred and fifty dollars for it.
This court has repeatedly held that a mere inadequacy of
price is not sufficient to set aside a sale. If it had been a
good ground for setting aside the sale, the question was
raised too late, as the sale had been confirmed months be-
fore. Except upon the grounds stated in section 518 of
the Civil Code Prac, the court was without power to set
aside the sale after it had been confirmed: Thompson v,
Brownlie, 25 Ky. Law Rep. 622, 76 S. W. 172 ; Carpenter v.
Strother's Heirs, 16 B. Mon. 289; Yoeum v. Foreman, 14
Bush, 494; Megowan v. Pennebaker, 3 ]\Iet. 501 ; Dawson v.
Litsey, 10 Bush, 408; Kincaid v. Tutt, 83 Ky. 392, 10 Ky.
Law Rep. 1006, 11 S. W. 297; Bean etc. v. Hoffendorfer, 84
Ky. 685, 8 Ky. Law Rep. 739, 2 S. W. 556, 3 S. W. 138. The
fact that Wagenlander was not made a party does not al-
Sept. 1904.] Craetree v. Dawson. 2-13
ter the ease: Thompson v. Brownlie, 25 Ky. Law Rep. 622,
76 S. W. 172. Besides, he did not establish his claim. It
may not have existed in law. After the sale to Truesdell,
the equity of redemption could have been sold, and the
court so ordered. It was not sold, and the failure to ex-
ecute the order could not prevent the termination of the
statutory right to redeem. It only existed for one year
after the sale, and during that time there was not even an
offer to redeem : Bethel v. Smith, 83 Ky. 84. It is averred
in the amended answer that Truesdell took possession of the
property after his purchase, and that the value of the
rents was twelve dollars per month. If he did so before
the expiration of the time for redemption, he is liable to
the owners for the rents. That question cannot be deter-
mined in this action, because the court did not place the
property in the hands of its receiver, and the owners were
'^ entitled to enjoy the use of the property until the court
did so, or until the time for redemption expired. The rents
were not assets of the estate, but a claim in favor of hus-
band and heirs at law of the decedent. The appellant
Costigan slept on his rights, and thus failed to collect his
claim.
The judgment is affirmed.
A Judicial Sale will not be set aside, as a nile, for mere inadequacy of
price alone: George v. Norwood, 77 Ark. 216, 113 Am. St. Rep. 143;
Koch V. West, 118 Iowa, 468, 96 Am. St. Rep. 394; Clark v. Glos, 180
111. 556, 72 Am, St. Rep. 223; Stroup v. Raymond, 183 Pa. 279, 63 Am
St. Rep. 758.
CRABTREE v. DAWSON.
[119 Ky. 148, 83 S. W. 557.]
TORTS— Unintentional Injury. — No one is liable, civilly or
criminally, for an unintentional consequential injury which results
from a lawful act, where neither ntgligtnce nor folly can be imputed
to him; and the burden of jtroving n(gligence or folly, where the act
is lawful, is always upon the plaintiff. In other words, the founda-
tion of the defendant's liability in all such casts is negligence, or the
failure on his part to exercise that degree of care to avt)id making a
mistake which an ordinarily prudent man would exercise under the
same or similar circumstances, (p. 249.)
ASSAULT on Innocent Person Supposed to be an Assailant. —
If a person, while apprehensive of an attack from A, strikes B, wli'^n
he has reasonable gfrounds to believe that B is A, and when he further
244
American State Reports. Vol. 115. [Kentucky,.
believes that it is necessary, in tiie exercise of a reasonable judgment,
to strike A in order to defend himself from a threatened attack by
A, using no more force than is necessary, or appears necessary to him,
for this purpose, then he is e::cused ou the ground of self-defense and
apparent necessity. But it is his duty to exercise the highest degree
of care practicable under the circumstances to ascertain whether the
one whom he is about to strike is in fact the one from whom he ap-
prehends danger; it is not enough that he exercises "due" or "or-
dinary care and diligence." And if he recklessly and wantonly
strikes B, he is liable in exemplary as well as compensatory damages,
(p. 252.)
ASSAULT — Whether Excusable. — An Instruction in an action
for assault and battery is objectionable, if it specifically calls the
attention of the jury in detail to the facts testified to by the defend-
ant, and relied on to excuse his conduct, (p. 253.)
J. D, Atchison and Laurence P. Tanner, for the appellant.
Wilfred Carrico and La Vega Clements, for the appellee.
ISO BURNAM, C. J. This action for assault and battery
instituted by appellant, Roy Crabtree, against the appellee,
John T. Dawson, grew out of the following facts: Appellee
Dawson owns a three-story building on the corner of Main
and Locust streets, in Owensboro, Kentucky. The room on
the first floor is used as a business house. The second floor
is divided by a partition, the room on one side being used
for private entertainments. The third floor is a large hall,
which was rented by appellee for dancing and public enter-
tainments. The following diagram of the second floor will
give a fair understanding of the location of the parties and
place at the time of the assault:
LOCUST 5TPEET
STORE ROOrt
is
of
Hi z •
.Otrf
Ul
Sept. 1904.] Crabtree v. Dawson. 245
A is Dawson at the head of the stairs when he struck
Crabtree. The red mark* is the stairway leading from the
store to the landing of the second floor. B is a door enter-
ing ^^^ the storeroom from the landing, which is about six
feet wide, and which Dawson opened to get the musket with
which he struck appellant. C is a door opening into the
entertainment hall on the second floor. D, D, are two win-
dows looking from the second floor to the third floor. E is
a storeroom on the second floor, and F is the hall on the
second floor. On the night on which this accident occurred,
Dawson had rented the large hall in the third story to Philip
Dorn and Ed Rrney to give what was known as a "pay
dance" for the benefit of the young people of the city. On
the same night the daughter of appellee and a number of
friends were giving a social entertainment in the small hall
on the second floor. While these two entertainments were
in progress, one Noble, while intoxicated, gained admittance
to the hall on the third floor, without having paid the cus-
tomary charge for admittance. Riney, one of the lessees,
approached him, and insisted that he should either pay or
leave the hall. He at first refused, but finally Riney suc-
ceeded in enticing him out of the room into the hall, and
then closing the door, leaving Noble on the outside. He
became disorderly, thereby attracting the attention of Daw-
son, who approached him. Dawson's version of what took
place after this is as follows: "Noble remarked that he
was going back and clean out the whole thing, and I said,
*No, you won't friend.' He replied, 'I am doing no harm.'
I told him he must go downstairs. He said that he would
not. I replied, 'You will,' and took hold of him. He went
down. I may have shoved him a little. He stopped in front
of the door of the hall on the second floor, where he tried
to go in. I pushed him by, and got down to the platform
on the first floor, where he sat down. He then got up and
said, 'If you will come down here, I will fix it with you.'
I replied, 'I don't want to bother with you.' ^'^^ This plat-
form goes into my storeroom. And when I got up to the
head of the steps, somebody remarked, 'He is getting some
bricks.' I stepped into the door and got an old musket.
Just then Crabtree came running rapidly up the steps from
the store below. I believed it was Noble returning to attack
*Tbe red mark is designated with dotted lines in the diagram.
246 American State Reports. Vol. 115. [Kentucky,
me, and called out to him, 'Don't come up here'; but he paid
no attention to me, and, when he got up within striking dis-
tance, supposing it was Noble, I struck him with the butt
of the musket, when I discovered that I had made a mistake
and hit the wrong man." It is also shown that the hall
at this point was somewhat dimly lighted, and that after ap-
pellee discovered his mistake he took appellant to a drug-
store, had his wounds dressed by a physician, and sent him
home in a carriage, and that he went the next day to ex-
press his regret at the occurrence, and offered to pay his doc-
tor's bill, for loss of time, and for a new suit of clothes, the
one worn by appellant having been greatly injured. The
testimony for plaintiff is to the effect that he was only seven-
teen years old; that he was on his way as a guest to the
dance being given in the hall on the third floor; that, whilst
he heard Dawson tell Noble not to come back at the time
he pushed him out of the store, he did not hear anyone call
to him not to come up; that, as a result of the blow, he was
knocked to the bottom of the steps, and sustained serious in-
juries. The jury, on these facts and the instructions given
by the court, returned a verdict for the defendant, and plain-
tiff has appealed.
The main ground for reversal is that the court did not
properly instruct the jury. As the question is a somewhat
novel one, we deem it best at this point to insert the instruc-
tions in full. They are as follows:
"1. The court instructs the jury that if they believe from
the evidence that the defendant on the day of November,
*** 1903, did wrongfully, willfully, recklessly, or unlawfully
assault, beat, bruise, or wound the plaintiff by striking him
violently on the head with the butt of a heavy gun or musket,
thereby inflicting a dangerous wound on his head, from the
effect of which assault and wounding the plaintiff suffered
physical and mental pain and anguish, and was damaged
thereby, they should find for the plaintiff' such a sum of
money as will reasonably compensate for the physical and
mental pain which he sustained as the proximate result of
said assault, not exceeding the sum of five thousand dollars.
"2. The court further instructs the jury that if they
believe from the evidence that the assault of the defendant
on the plaintiff was willful and reckless, and the defendant
did not believe, or have reasonable grounds to believe when
Sept. 1904.] Crabtree v. Dawson. 247
he made said assault, that the person he was assaulting was
Ollie Noble, then they may find any sum as punitive dam-
ages in favor of the plaintiff, provided, however, all damages
they may find for the plaintiff do not exceed in the aggregate
the sum of five thousand dollars.
"3. The court further instructs the jury that if they be-
lieve from the evidence that the striking of the plaintiff by
the defendant as set out in the petition was unintentional,
and they further believe that it was recklessly committed
by the defendant, and that the defendant did not use ordi-
nary care and diligence, considering all the circumstances,
to discover who the person was that he was about to strike
before he struck, then the law is for the plaintiff, and the
jury should find for the plaintiff; and, if they find for the
plaintiff, the measure of their finding should be such sum
as will rea,sonably compensate the plaintiff for the physical
and mental pain which he sustained as the proximate *^^ re-
sult of said striking or assault, not exceeding the sum of all
as mentioned in instruction No. 1.
"4. The court further instructs the jury that if they be-
lieve from the evidence that the defendant believed, and had
reasonable ground to believe, that the person whom he struck
was Ollie Noble, and said Noble had been on the premises
of the defendant immediate!}'' before said assault, and had
been ordered to leave defendant's premises, and had threat-
ened to return and assault the defendant or his guests, and
the defendant believed, and had reasonable grounds to be-
lieve, that when the plaintiff was coming up his stairway
that it was Ollie Noble, and that it was necessary to strike
the plaintiff in order to defend himself and his guests from
the threatened attack upon him and his guests, and the de-
fendant used due care and diligence, considering all the cir-
cumstances and facts surrounding him, and his connection
with said Noble, immediately before said time, and unin-
tentionally struck the plaintiff, mistaking the plaintiff for
the said Noble, then the law is for the defendant, and the
jury should so find.
"5. The court further instructs the jury that if they be-
lieve from the evidence that at the time the defendant as-
saulted the plaintiff" he had just previously thereto had a
difficulty with one Noble, and he had ordered said Noble to
leave the premises, and took him out of his house, and that
248 American State Reports. Vol. 115. [Kentucky,
said Noble threatened to immediately return to the defend-
ant's house, and threatened to assault the defendant, and im-
mediately thereafter he did see the plaintiff coming up the
plaintiff's stairway on his premises, and, after exercising
due care to ascertain whether or not it was Noble, did be-
lieve the plaintiff to be said Noble, and defendant was in
the exercise of reasonable care for his own safety and pro-
tection of his property and guests, and in his own house,
^f"* and was also reasonably careful and exercised due care
to discover whether the person he was about to strike or as-
sault was, or not, the said Noble, and they further believe
that before striking the plaintiff he ordered the plaintiff to
leave defendant's premises, and the plaintiff did not do so,
or offer to leave, and the defendant believed at the time he
struck the person he was about to strike Ollie Noble, that
he was then in danger of great bodily harm or death at the
hands of the said Noble, and that it was necessary to strike
him in order to protect his guests, property, family, or him-
self, from the threatened assault, and he had used no more
force than was reasonably necessary to protect himself, his
guests, or his property, from said assault, then the law is
for the defendant, and the jury should so find, except they
believe from the evidence that the defendant used more force
and violence in striking than was necessary to eject the per-
son from his premises, if he believed it to be Ollie Noble,
or more force and violence than was necessary to protect
his property, his guests, his family, and himself from the
threatened assault of said Ollie Noble.
"6. The court further instructs the jury that if they be-
lieve from the evidence that the striking of the plaintiff by
the defendant was unintentional, and that the defendant was
intending to strike one Ollie Noble, and that the defend-
ant would not have struck the plaintiff, except for the plain-
tiff's own carelessness and negligence in coming up the stair-
way of the defendant, and they further believe that the plain-
tiff's own carelessness and negligence contributed to and
brought about the damages now complained of, then the law
is for the defendant, and the jury should so find.
*'7. 'Due care,' as used in the foregoing instructions, is
that degree of care that a prudent man would exercise under
the same or similar circunLstances.
Sept. 1904.] Crabtree v. Dawson. 249
1B6 «<8 The court further instructs the jury that if they
believe from the evidence that the striking of the plaintiff by
the defendant on the occasion mentioned in instruction No.
1 was willful or reckless, or that the defendant did not ex-
ercise due care in ascertaining whom he was about to strike,
then the jury cannot consider mitigating circumstances, as
against the actual damage that the plaintiff sustained by
such striking, but can only consider the mitigating circum-
stances and the justification, if any, of the defendant, in so
far as it affects the punitive damages sought to be recovered
in this action."
Both the plaintiff and defendant excepted to all the instruc-
tions given by the court, and offered instructions covering
their respective views of the law. Those offered by appel-
lant were based upon the theorj'^ that he was, in any contin-
gency, under the admitted facts of the case, entitled to com-
pensatory damages for the injuries resulting from the as-
sault and battery made upon him by the defendant. On
the other hand, those offered by defendant are based upon
the theory that if he believed, and had reasonable grounds
to believe, at the time he struck plaintiff, that it was Ollie
Noble whom he was striking, and that it appeared to him
to be necessary in order to protect himself or guests from a
threatened assault at the hands of Noble, he was excusable
on the grounds of apparent necessity and self-defense. From
a careful examination of the decisions of this court and
those of other jurisdictions, we feel warranted in asserting
that no one is liable, civilly or criminally, for an uninten-
tional consequential injury which resulted from a lawful act,
where neither negligence nor folly can be imputed to him,
and that the burden of proving negligence or folly, where the
act is lawful, is always upon the plaintiff. In other words,
that the foundation of defendant's liability in all such cases
^^"^ is negligence, or the failure on his part to exercise that
degree of care to avoid making a mistake which an ordinarily
prudent man would exercise under the same or similar cir-
cumstances. A very full discussion of this class of cases
is found in Morris v. Piatt, 32 Conn. 75. As this is the
oldest and best considered case on the subject to which our
Attention has been directed, we quote from it liberally as
follows: "An accident is an event or occurrence which h-ap-
250 American State Reports. Vol. 115. [Kentucky,
pens unexpectedly, from the uncontrollable operations of na-
ture alone, and without human agency, as when a house is
stricken and burned by lightning, or blown down by tempest,
or in an event resulting undesignedly and unexpectedly from
human agency alone, or from the joint operation of both;
and a classification which will embrace all the cases of any
authority may easily be made. In the first class are all
those which are inevitable or absolutely unavoidable, be-
cause affected or influenced by the uncontrollable operations
of nature ; in the second class, those which result from human
agency alone, but were unavoidable under the circumstances;
and in the third class, those which were avoidable, because
the act was not called for by any duty or necessity, and the
injury resulted from the want of that extraordinary care
which the law reasonably required of one doing such lawful
act, or because the accident was the result of actual negli-
gence or folly, and might, with reasonable care adapted to
the exigency have been avoided. Thus, to illustrate: If A
bum his own house, and thereby the house of B, he is liable
to B for the injury; but if the house of A is burned by
lightning, and thereby the house of B is burned, A is not
liable. The accident belongs to the first class, and was strictly
inevitable and absolutely unavoidable. And if A should
kindle a fire in a long unused flue in his own house, which
has become cracked without his knowledge, and the fire
***** should communicate through the crack and bum his
house, and thereby the house of B, the accident would be un-
avoidable, under the circumstances, and belong to the second
class. But if A, when he kindled the fire, had reason to sus-
pect that the flue was cracked, and did not examine it, and
so was guilty of negligence, or knew that it was cracked and
might endanger his house and that of B, and was so guilty
of folly, he would be liable, although the act of kindling the
fire was a lawful one, and he did not expect or intend that the
fire should communicate." The learned writer goes on to
say further: "The foundation of that liability in every case
of accident, where it is the result of human agency, unin-
fluenced by the operations of nature, and the act is lawful,
is really negligence. This is true of collisions between ves-
sels on the water, or horses and vehicles and persons on land.
.... So, when a man in firing at a mark unintentionally
wounds another, the injury is direct, and the form of ac-
Sept. 1904.] Crabtree v. Dawson. 251
tion is trespass; but the ground of liability is negligence in
doing an unnecessary and avoidable, though lawful, act with-
out that extraordinary degree of care which the law demands
in such circumstances, and which would have prevented the
accident."
In Brown v. Kendall, 6 Cush. 292, which was an action
of assault and battery, the defendant accidentally hit the
plaintiff, a bystander, while raising a stick to strike and
part two dogs which were fighting. Chief Justice Shaw,
in his opinion in that case, held that the defendant was not
liable, unless the act was done in the want of the exercise of
due care adapted to the exigencies of the case, and therefore
such want of due care became part of the plaintiff's case,
and the burden of proof was on the plaintiff to establish it.
In Paxton v. Boyer, 67 111. 132, 16 Am. Rep. 615, the ac-
tion was for an assault and battery. It appeared that de-
fendant ^^^ and plaintiff's brother were in a conflict. "When
defendant struck plaintiff with a knife, supposing him to be
the brother, plaintiff had in fact g;ven no provocation. The
jury found for the plaintiff, and assessed his damages. The
court instructed for that plaintiff that it was no defense,
so far as actual damages were concerned, that the defendant
had been violently assaulted by a person other than plaintiff,
or was then being assaulted by such person, or that he may
have honestly believed he was striking the plaintiff's brother
when he struck plaintiff, or that he may have honestly be-
lieved it was necessary for his self-defense to assault the
plaintiff, if the jury found from the evidence that the plain-
tiff was not a party to such assault upon the defendant ; that
such evidence of mistake of fact or good intentions on the
part of the defendant can only be considered by the jury
as a defense against the infliction by the jury of vindictive
damages, and not as a defense against such actual damages
as the evidence showed plaintiff had suffered from such as-
sault, or as naturally resulted from such assault." The in-
structions were disapproved of in the opinion of the supreme
court, the court saying: "If a person, doing a lawful act
in a lawful manner, with all due care and circumspection,
happens to kill another, without any intention of doing so,
he is not liable criminally. How, then, can it be said he
shall be responsible in a civil ca.se, when, in doing a lawful
act with due care, if an injury happens, he shall be deemed
252 American State Reports. Vol. 115. [Kentucky,
in fault, and mulcted in damages? It is said by appellee
the rule is different in civil cases; that the motive, intent
or design of the wrongdoer toward the plaintiff is not the
criterion as to the form of remedy, for when the act occa-
sioning the injury is unlawful, the intent of the wrongdoer
is immaterial, but appellant here is no wrongdoer, as the
160 jyjy have said by their special verdict." The judgment
in the case was reversed.
In 1 Joyce on Damages, page 427, section 367, the author
says: "Though an assault may be unintentional, yet if it
is recklessly committed, the party guilty will be liable in
damages therefor, and the injured party may recover such
damages as are the natural and direct result of the act of
violence, including mental and physical pain and suffering.
But one who in the exercise of his right of self-defense in-
flicts an unintentional injury upon a third party is not
responsible in damages therefor, as where a person was as-
saulted by another, and he struck a third person, mistaking
him for the assailant." Roberson's Criminal Law and Pro-
cedure, in section 542, page 752, lays down the rule as fol-
lows: "This right of self-defense exists although the danger
is not real, but apparent only. A person will not be held
responsible, civilly or criminally, if he acts in self-defense
from a real and honest conviction induced by reasonable evi-
dence, although he may have been mistaken as to the extent
of the actual danger"; citing a number of Kentucky cases in
support of the text.
When we apply the principles of law announced in these
decisions to the case at hand, it follows that if the defendr.nt,
at the time he struck the plaintiff, believed and had reason-
able grounds to believe, that he was OUie Noble, and that
he further believed that it was necessary, in the exercise
of a reasonable judgment, to strike Noble, in order to defend
himself from a threatened attack about to be made upon him
by Noble, and that he used no more force than was neces-
sary, or appeared to him to be necessary, for this purpose,
then he is excused on the ground of self-defense and apparent
necessity. But it was the duty of the defendant to have
exercised the highest degree of care practicable under the
circumstances to have ascertained whether the person whom
'^^ he was about to strike was in fact the one whom he be-
lieved him to be, and from whom he apprehended danger to
Sept. 1904.] Ckabtree v. Dawson. 253
himself. And if he recklessly and wantonly struck plaintiff,
he was entitled, in addition to compensatory damages, to
exemplary damages as well.
Whilst the instructions given in the case by the trial court
are based upon the proper theory, they are in several impor-
tant respects technically erroneous. For instance, in the third
instniction only "ordinary care and diligence" is required
of the defendant in ascertaining whether the person he was
about to strike was in fact the person from whom he antici-
pated injury. This is error. He should have been required
to exercise the highest or utmost care practicable under the
circumstances by which he was surrounded.
In the fourth and fifth instructions the words "due care
and diligence" are used. While the word "due" is defined
to be "that which is owed," or "that which one has a right
to demand or claim," we think it hardly comes up to the
requirements of this case.
Instruction No. 5 is also objectionable, in that it specifi-
cally calls the attention of the jury in detail to the facts
testified to by the defendant, and relied on to excuse his
conduct. This error has been frequently pointed out and
condemned by this court.
The sixth instruction is based upon the plea of contribu-
tory negligence, and is, in our opinion, out of place in this
case. There is not a particle of evidence to show contribu-
tory negligence on the part of the plaintiff. He was at the
place and doing exactly what he had the right to do. The
instruction should, therefore, have been omitted altogether.
For reasons indicated, the judgment is reversed, and cause
remanded for a new trial not inconsistent with this opinion.
Petition for rehearing by appellee overruled.
The Law of Self-defenxe is discussed in the notes to State v. Gordon,
109 Am. St. Rep. 804; State v. Sumner, 74 Am. St. Rep. 717.
Unintentional Homicides are considered in the note to Johnson v.
State, 90 Am. St. Rep. 571.
Negligence is the Failure to do what a reasonable and prudent person
would ordinarily have done under the circumstances, or the doing of
what such a person would not have done under those circumstances.
Thi« definition does not exclude the idea that one may act upon ap-
pearances: McDonald v. International etc. Ry. Co., 86 Tex. 1, 40 Am.
St. Rep. 803; Harker v. Burlington etc. Ry. Co., 88 Iowa, 409, 45 Am.
St. Rep. 242; Brotherton v, Manhattan Beach Imp. Co., 48 Neb. 563,
58 Am. St. Rep. 709; Tully v. Philadelphia etc. R. B. Co., 2 Penne.
(Del.; 537, 82 Am. St. Rep. 425.
254 American State Reports. Vol. 115. [Kentucky,
LUDLOW LmrBER COMPANY v. KUHLING.
[119 Ky. 251, 83 S. W. 634.]
BUHiDINO CONTRACT — ^Acceptance as Waiver. — The owner
of land on wliifh he contracts to have a house erected may recover
damages for defective construction, although he pays the contract
price, takes possession, and does not discover the defect until eight
months thereafter, (p. 2.56.)
Furber & Jackson, for the appellant.
W. A. Byrne, for the appellee.
252 PAYNTER, J. The appellees owned a lot in Ludlow,
and, desiring to have a brick house built upon it, they entered
into a contract with T. Johnson and others, as partners doing
business under the firm name of Ludlow Lumber Company, by
which they, in consideration of two thousand one hundred
dollars, agreed to furnish the material and labor, and erect
the house according to the plans and specifications. It was
completed in October, 1901, when it was turned over to the
appellees under representations by the appellants that it had
been completed according to the contract. The appellees
lived in it until May, 1902, a period of eight months, when
they awoke one morning and found the walls of the house
badly cracked and out of ^^^ plumb ; and it cost them several
hundred dollars to repair the foundation and house. This
action was brought against appellants to recover damages for
the defective construction of the house. The defendants
sought to avoid a recovery by showing that it had been com-
pleted according to the contract, and that the damages
resulted from a cause other than defective construction. The
verdict of the jurj', which was sustained by the court, and
upon which the judgment was rendered, allowed the plaintiffs
three hundred and thirty-eight dollars and ninety-five cents.
There was a conflict in the testimony, but it was the prov-
ince of the jury to reconcile it, and, having done so, this
court must decline to disturb the finding of the jury upon
the question of fact.
The principal reason urged for a reversal is that appel-
lees accepted the house, and moved into and lived in it for
eight months before discovering the alleged defect. Even
if there had been a defect in the construction, and they had
knowledge of it before moving into the house, that " fact
Sept. 1904.] Ludlow Lumbeb Co. v. Kuhlinq. 255
would not prevent them from recovering for the breach of
the contract. The law on this question is well stated in
Morford v. Mastin etc., 6 T. B. :\ron. 609, 17 Am. Dec. 168,
in which the court said : * ' We are unwilling to attach so much
importance to the defendant's receiving the work. How
could he reject it without abandoning his estate on which it
was situated? It was already part of his freehold, and he
received every part as it progressed. The court seems to
have confounded the case of a building on an employer's
premises with such jobs of work and labor as a tailor per-
forms in making his garment, the cabinet-maker his furniture,
or the painter his figures. In these latter cases it is admitted
that much depends on the acceptance of the article made, and
not objecting to it, and rescinding the contract so soon as the
defect is discovered, and that ^^"* for a very good reason ; be-
cause it is necessary to do justice to the mechanic by possess-
ing him of the article out of which to make his money,
instead of keeping both the article and the price. Hence
Starkie (volume 3, page 1769), says: 'Notwithstanding the
universality of the position that performance, when it is the
consideration for the payment of the stipulated price, is a
condition precedent, yet the conduct of the employer in
adopting the contract, when, if he disputed the performance,
he had it in his power to rescind it in toto by placing the
parties in statu quo, affords, as against him, a conclusive pre-
sumption that the work has been properly executed, or, at
all events, excludes the party acquiescing from making the
objection. Instances to this effect have already been cited.
The principle extends to all cases of executory contracts for
works of art to be delivered in a complete state. The party
receiving the work under a specific contract must abide by
it or rescind it in toto.' But it is well known that such return
and such rescinding of a contract is impracticable with
regard to a building erected on an employer's own premises.
He could not object to the work, and leave it on the hands
of the workmen, without conveying away his estate; nor
could the mechanic receive or sell it for his own indemnifi-
cation. Heuee the reception — that is, leaving it on his prem-
ises not demolished — or even living in it, could not, with any
good reason, preclude the employer from making the objection
on the trial, as the in.struction given supposes." The case
of Escott V. White, 10 Bush, 169, is to the same effect. The
256 American State Reports. Vol. 115. [Kentucky,
legal principle announced by these cases was applied by the
court in instructions, and, we think, properly so. However,
counsel for appellant insists that the principle of the Morford
case does not apply, because in that case the defect was dis-
covered before taking possession ^^'^ of the property and
before all of the contract price was paid. The rif?ht to re-
cover in that case was not based upon the fact that the defect
was discovered before the owner took possession of the prop-
erty', and because he protested that it was not completed
according to the contract. If it was a fact that the house
was defectively constructed when appellees paid the contract
price and took possession of the property, a cause of action
existed. They did not forfeit their claim against the appel-
lant for damages, because they did not discover that appellant
had not built the house according to contract. If the law is
that such a discovery must be made in a reasonable time (it
is not necessary here to decide that it must be done), the fail-
ure to make the discovery before eight months is not an
unreasonable time. We are of the opinion that the jury's
verdict fixes a proper amount of compensation for appellees;
therefore they are not entitled to a reversal on the cross-
appeal.
The judgment is affirmed on the original and cross-appeals.
ACCEPTANCE OF WORK AS A WAIVEE OF IMPERFECT PER-
FORMANCE.
I. Contract to Manufacture and Sell an Article of Personalty, 256.
n. Contract to Furnish Machinery, 257.
m. Contract to Erect Structure on Land.
a. Effect of Using or Paying for Building, 257.
b. Doctrine of Substantial Performance, 259.
c. Church Edifices, 261.
d. Public Buildings or Works, 261.
e. Building Materials, 262.
IV. Contract to Construct Drains or Ditches, 262.
V. Contract to Dig Wells, 263.
VI. Effect of Knowledge of Nonperformance, 263.
VII. Effect of Necessity of Using Articles Contracted for, 263.
I. Contract to Manufacture and Sell an Article of Personalty.
An acceptance by the vendee of personal property, after an oppor-
tunity for inspection, in the absence of fraud, generally estops him from
tiiereafter raising any objection as to visible defects, unless there is a
warranty intended to survive acceptance: Day v. Mapes-Keeve Construc-
tion Co., 174 Mass. 412, 54 N. E. 878; Talbot Paving Co. v. Gorman, 103
Sept. 1904.] Ludlow Lumber Co. v. Kuhling. 257
Mich. 403, 61 N. W. 655, 27 L. E. A. 96 ; Eeed v. Eandall, 29 N. Y. 358, 86
Am. Dec. 305; Pierson v. Crooks, 115 N. Y. 539, 12 Am. St. Eep. 831, 22 N.
E. 349; Waeber v, Talbot, 167 N. Y. 48, 82 Am. St. Eep. 712, 60 N. E. 288.
Practically the same rule applies in case of an agreement for the
manufacture and sale of an article of personalty. An acceptance by
the vendee of personal property manufactured under an executory
contract of sale, after a full and fair opportunity for inspection, in
the absence of fraud estops him from thereafter raising any objection
as to visible defects and imperfections, whether discovered or not,
unless the acceptance is accompanied by some warranty of quality
intended to survive acceptance: Studer v. Bleistein, 115 N. Y. 316,
22 N. E. 243, 5 L. E. A. 702.
n. Contract to Furnish Machinery.
A company for which an electric light plant is constructed may
waive its right to rescind for failure entirely to complete the plant,
by accepting and making use of it before its completion: Florence Gas
etc. Co. V. Hanby, 101 Ala. 15, 13 South. 343. But where a contract
is violated by constructing defective machinery on the premises of a
person who has contracted for a first class outfit and appliances, and
he cannot reasonably do otherwise than to accept the situation and
make the best use possible of the outfit, he does not thereby waive
his right to damages: Payne v. Amos Kent Brick etc. Co., 110 La.
750, 34 South. 763. Where one contracts to have a new boiler erected
in his boiler-house, and the one which the contractor puts in is not
of the capacity specified by the contract, use of the boiler after its
construction and connection with the factory for which it is designed
does not establish an acceptance thereof: Manitowoc Steam Boiler
Works V. Manitowoc Glue Co., 120 Wis. 1, 97 N. W. 515.
III. Contract to Erect Structure on Land.
a. Effect of Using or Paying for Building. — If a contract is for
work to be done on movable articles, acceptance is generally a waiver
of any objections to the quality of the work. However, a contract
to do work on real property, such as to erect a building thereon, stands
on a very different basis than do contracts for doing work on a chattel,
for the owner of the premises is necessarily called upon to take pos-
session of the completed building or else be excluded from the full
enjoyment of his estate. Hence it is that the mere fact that the
owner enters into possession and uses a building which has been con-
structed for him does not ordinarily constitute a waiver of a non-
compliance by the contractor with his contract in erecting the build-
ing. The occupancy and enjoyment of the structure by the owner
does not necessarily preclude him from showing that the contractor's
work has been improperly or defectively executed: Mitchell v. Wis-
cotta Land Co., 3 Iowa, 209; Kilboume v. Jennings, 40 Iowa, 473;
Monford v. Martin, 22 Ky. (6 T. B. Mon.) 609, 17 Am. Dec. 168;
Am. St. Eep., VoL 115 — 17
258 American State Reports. Vol. 115. [Kentucky,
Stewart v Fulton, 31 Mo. 59; Yeates v. Ballentine, 56 Mo. 530; Fee-
ney v. Bardsley, 66 N. J. L. 239, 49 Atl. 443; Anderson v. Todd, 8 N.
Dak. 158, 77 N. W. 599; Faulkner v. Cornell, 80 App. Div. 161, 80 N.
Y. Supp. 526; Hartupee v. City of Pittsburgh, 97 Pa. 107.
"Such a contract deals with a subject matter of a peculiar nature.
"When an agreement for the manufacture of a chattel out of materials
furnished by the maker is not performed according to its terms, the
remedy of the party for whom it is made seems perfect. And the re-
jection of the chattel, while completely protecting him, does no in-
justice to the maker, for it leaves in his hands the materials with
which his labor has been united. But when, under a contract for
building, labor and materials of the builder are put into an edifice im-
movably affixed to the lands of another, and the title to which goes
with such lands, the right of rejection, while it may be said theo-
retically to exist, is difficult to enforce in practice without apparent
injustice to one party or the other. If the building be wholly unlike
that contracted for, the owner is put to the delay and expense of
removing it from his land which it encumbers. If, as is more usual,
the building is not so unlike that contracted for as to permit the
owner to feel reasonably justified in removing it, or if he is driven by
necessity to use the shelter of the building, and if by protest and re-
jection he may escape payment, yet if the building add anything to
the value of the land, eventually he or his representatives become
benefited thereby": Bozarth v. Dudley, 44 N. J. L. 304, 43 Am. Eep.
373.
"The owner of the soil is always in possession. The builder has
a right to enter only for the special purpose of performing his con-
tract. Each material as it is placed in the work becomes annexed
to the soil, and thereby the property of the owner. The builder
would have no right to remove the brick or stone or lumber after an-
nexation, even if the employer should unjustifiably refuse to allow
him to proceed with his work. The owner, from the nature and ne-
cessity of the case, takes the benefit of part performance, and, there-
fore, by merely so doing, does not necessarily waive anything con-
tained in the contract. To impute to him a voluntary waiver of con-
ditions precedent from the mere use and occupation of the building
erected, unattended by other circumstances, is unreasonable and
illogical, because he is not in a situation to elect whether he will
or will not accept the benefit of an imperfect performance. To be
enabled to stand upon the contract, he cannot reasonably be required
to tear down and destroy the edifice if he prefers it to remain. As
the erection is his by annexation to the soil, he may suffer it to stand,
and there is no rule of law against his using it without prejudice to
his rights": Smith v. Brady, 17 N. Y. 173, 72 Am. Dec. 442, quoted
with approval in Franklin v. Schultz, 23 Mont. 165, 67 Pac. 1037.
Sept. 1904.] Ludlow Lumber Co. v. Kuhling. ' 259
Where one accepts work done upon a house, by a builder, he does
not thereby waive objections to any latent defects in the work which
are not open to inspection at the time of acceptance: Korf v. Lull,
70 111. 420. And the payment of the contract price and the occu-
pancy of the house by the owner is not such an acceptance of the
work as to estop her from claiming damages for the failure of the
builder to carry out his contract, she having no knowledge of build-
ing, having no notice of defects at the time, being a personal friend
of the builder, and relying entirely upon him to properly construct
the building: Ekstrand v. Earth, 41 Wash. 321, 83 Pac. 305.
Where, after the expiration of the time within which the con-
tractor stipulated to complete the building, the owner enters into
possession of the premises, as it is his right to do, he cannot be held
to have waived all defects of which he knew, or could have known
"by the exercise of ordinary care": Cannon v. Hunt, 116 Ga. 452,
42 S. E. 734.
It will be noted that in the principal case the Kentucky court
holds that the owner of land on which he contracts to have a house
erected may recover damages for defective construction, although
he pays the contract price, takes possession, and does not discover
the defect until eight months thereafter: See, too, Flannery v.
Eohrmayer, 46 Conn. 558, 33 Am. Rep. 36. "The mere occupancy
of the building by the owner, while appropriate, is neither presump-
tive nor conclusive evidence of acceptance. The reason is obvious.
The building belongs to the owner of the land on which it stands.
.... He cannot be appropriately said to take possession of the
building, for he has not been out of possession of that which is thus
affixed to his own land"; Bozarth v. Dudley, 44 N, J. L. 304, 43 Am.
Bep. 373.
Where work has been done on the interior of a building, its con-
tinued use is not necessarily an acceptance, for the law is not so
nnreasonable as to require the owners to abandon the building in
order to reject the work: Fitzgeral v. La Porte, 64 Ark. 34, 40 S.
W. 261.
b. Doctrine of Substantial Performance. — Where a builder fails
to comply with his contract in erecting a building, but the owner
nevertheless accepts and uses it, the builder may, at least if he has
acted in good faith and not departed widely from the terms of the
contract, recover the reasonable value of the work: Bell v. Teague,
85 Ala. 211, 3 South. 861; Schaefer v. Gildea, 3 Colo. 15; Blakeslee
V. Holt, 42 Conn. 226; Estop v. Fenton, 66 111. 467; McClure v.
Secrist, 5 Ind. 31; Becker v. liecker, 9 Ind. 497; White v. Oliver, 36
Me. 92; Eaton v. Gladwell, 121 Mich. 444, 80 N. W. 292; Marsh v.
Bichards, 29 Mo. 99; Dutro v. Walter, 31 Mo. 516; Moffitt v. Glass,
117 N. C. 142, 23 S. E. 104; Goldsmith v. Hand, 26 Ohio St. 101;
260 American State Rkpobts. Vol. 115. [Kentucky,
Harris Connty T. Campbell, 68 Tex. 22, 2 Am. St. Rep. 467, 3 S. W.
243; Jennings v. Wilier (Tex. Civ. App.), 32 S. W. 24; Taylor v.
Williams, 6 Wis. 363; Dermott v. Jones, 69 U. S. (2 Wall.) 1, 17
L. ed. 762.
"Where a special contract is made with the owner to erect a
house or other buildings on his land, and the contractor uninten-
tionally fails to fully perform it by reason of unimportant variations,
while he cannot recover on the contract itself, he may recover under
a count on an account annexed for the value of the labor and ma-
terials, less any deductions necessary to complete the work, but not
to exceed the contract price. It is no bar to his recovery that there
has not been a full performance The foundation for this rule,
whether applied to an action at law or in a petition to enforce a
lien, has been stated to be that the land owner should not be per-
mitted to avail himself of the added value to his property thus fur-
nished, without making just compensation": Burke r. Coyne, 188
Mass. 401, 74 N. E. 942. To the same effect are Fitzgeral v. La
Porte, 64 Ark. 34, 40 S. W. 261; White v. School District, 159 Pa.
201, 28 Atl. 136.
We are not sure that all the authorities recognize so liberal a doc-
trine as that adopted in Massachusetts. In the leading case of
Bozarth v. Dudley, 44 N. J. L. 304, 43 Am. Rep. 373, Justice Magie
declared that "when a contract for erecting a building has not been
80 performed that a recovery can be had upon the common counts
for work and material furnished in the erection, it will be permitted
only when the owner. has accepted the building erected. The view
that assumes acceptance from the mere fact that the edifice adds
value to the land on which it stands, in my judgment unduly re-
strains the force of the contract of the parties, and deprives the
owner of the right to reject an edifice not in substantial conformity
with its terms. If thereby any apparent injustice seems done to
the builder in retaining the materials put upon the property, it is the
result of his own default, to which he must submit."
And in the later case of Elliott v. Caldwell, 43 Minn. 357, 45
N. W. 845, 9 L. R. A. 52, Justice Mitchell aflirms: "The doctrine
of 'substantial compliance' of building contracts docs not apply
where the omissions or departures from the contract are intentional,
and so substantial as to be capable of remedy, and that an allowance
out of the contract price could not give the owner essentially what
he contracted for. To entitle a party to recover for a part perform-
ance or for performance in a different way from that contracted
for, his contract remaining open and unperformed, the circumstances
must be such that a new contract may be implied from the conduct
of the parties to pay a compensation for the partial or substantial
performance. The mere fact that the partial performance is bene-
fieiai to a party is not enough from which to imply a promise
Sept. 1904.] Ludlow Lumbes Co. v. Kuhling. 231
to pay for it. Hence, in the case of a building on land, which the
builder fails to complete, or completes in a manner not substantially
conforming to the contract, the mere fact that it remains on the
land, and the owner enjoys the benefit of it, he having no option
to reject it, is not such an acceptance as will imply a promise to
pay for it, notwithstanding the nonperformance of the special con-
tract."
The case of Anderson v. Todd, 8 N. Dak. 158, 77 N. W. 599, is
also a leading authority on this point. In writing the syllabus
therein, Justice Young states: "To entitle a contractor to recover
upon a building contract which has not been fully complied with
by him, under the doctrine of substantial performance, it must
appear, not only that he endeavored to perform it in good faith,
but also that he has done so, except as to unimportant omissions
or deviations which are the result of mistake or inadvertence, and
were not intentional, and which are susceptible of remedy, so that
the other party will get substantially the building he contracted
for. The mere fact of taking possession of the building does not of
itself amount to an acceptance of the same by the owner as having
been erected according to contract."
c Church Edifices. — The doctrine of allowing compensation for
services rendered and materials furnished under a special contract,
but not in entire conformity with it, provided the deviation from
the contract was not willful and the other party has availed himself
of and been benefited by the labor and materials, has been applied
in the case of the erection of church edifice where the builder by
mistake made the ceiling lower, the windows shorter and narrower,
and the seats of different dimensions than the specifications called
for, but the owners took and retained possession of the builing:
Pincher v. Swedish Evangelical Lutheran Church, 55 Conn. 183, 10
Atl. 264. It has also been adjudged that the nonconformity of pews
to the contract specifications cannot be urged to defeat a lien on the
church edifice, where the trustees have themselves received and put
the pews into the building, for the breach is thereby waived: Harris-
burg Lumber Co, v. "Washburn, 29 Or. 150, 44 Pac. 390. But where
tiling is laid in a cathedral, at a variance with the terms of the con-
tract, the continued use of the building by the owners does not
of itself show an acceptance of the work: Fitzgrral v. La Porte, 64
Ark. 34, 40 S. W. 261.
d. Public Buildings or Works. — If a contractor does work on a
public buiiilirg, the subsequent use and occupancy of the building
by the municipality does not necessarily show an acceptance of the
work which is not performed in accordance with the specification of
the contract: MacKnight Plintic Stone Co. v. Mayor etc. of New York,
43 N. y. Supp. 139, 13 App. Div. 231. More especially is this true.
tvhere possession is taken through necessity, and with the under-
262 American State Reports. Vol. 115. [Kentucky,
standing that it shall not prejudice the rights of the municipality or
be construed as a waiver: MacKnight Flintic Stone Co. v. Mayor
etc. of New York, 52 N. Y. Supp. 747; Long v. Pierce County, 22
Wash. 330, 61 Pac. 142. Where a county makes a part payment of
the amount due for the erection of a courthouse, after the time
specified for its completion, though the building is still incomplete,
and the county also authorizes the circuit court and the clerk of the
court to use the building before its acceptance, this is not a waiver
of the county's claim for liquidated damages under the contract
because the building was not completed on time: Lawrence County
V. Stewart, 72 Ark. 525, 81 S. W. 1059.
The rule that the owner of real property who has employed anoj;her
to erect a structure on his land does not, by taking possession and
appropriating the structure to the uses for which it was built, pre-
clude himself from insisting that the builder has not properly per-
formed his contract, is applied to a contract for the eonstruction
of a drydock for the United States in United States v. Walsh, 115
Fed. 697, 52 C. C. A. 419, where Justice Wallace observes: "The
results cannot be separated from the necessary consequences of
ownership; and as he cannot, without prejudice to himself, reject
them or refuse to retain them, the law does not imply any promise
from his acceptance of them. This being so, it matters not whether
at the time he is or is not aware of the defects. ' '
e. Building Materials. — Where the owner or his representative has
the right and opportunity to inspect and reject the materials before
they go into his building, he will be deemed to have waived the use
of materials which do not come up to the requirements of the speci-
fications, if he permits them to be used when their defects are of
such a nature as to be discoverable on inspection: Lay cock v. Moon,
97 Wis. 59, 72 N. W. 372; Ashland Lime etc. Co. v. Shores, 105 Wis.
122, 81 N. W. 136. However, the mere use of finishing material in
a building, without discovering latent defects therein, is not such
an acceptance as to preclude showing that the material was not fur-
nished according to agreement, on the defects appearing as season-
ing progresses: Utah Lumber Co. v. James, 25 Utah, 434, 71 Pac. 986.
rv. Contract to Construct Drains or Ditches.
Where a person who has contracted to construct a drain does not
complete the work within the time limited therefor, and does not do
all of it in strict accordance with the specifications, but the other
party nevertheless accepts the work and thereby waives these ob-
jections, the contractor may sue on the contract, although the other
party may set up by way of counterclaim the damages sustained
by him: Cummings v. Pence, 1 Ind. App. 317, 27 N. E. 631, And
where the person for whom a ditch is constructed accepts it with
knowledge of the facts, uses it without objection, and subsequently
Sept. 1904.] Ludlow Lumbeb Co. v. Kuhlinq. 263
acknowledges his liability under the contract, he may be deemed
to have waived a requirement that a full head of water should flow
through the ditch for a certain time: Flick v, Hahn's Peak etc. Min.
Co., 16 Colo. App. 485, 66 Pac. 453. The levy of an assessment by a
company on its members to pay for a ditch for which the company
has contracted, does not of itself constitute an acceptance of the
contractor's work: Gilliam v. Brown, 116 Cal. 454, 48 Pac. 486.
V. Contract to Dig Wells.
When one accepts a well as completed according to the contract
for drilling, he will not ordinarily be heard to say in an action for
the contract price that the contract was not performed: Elwood
Natural Gas etc. Co. v. Baker, 13 Ind. App. 576, 41 N. E.' 1063. If
a person has agreed to construct a well, and is not entitled to re-
cover the price on his special contract on account of his failure to
show compliance with its terms on his part, nevertheless if he satis-
fies the jury that the owner has received and used the well without
notifying him of any defect in the work until payment is demanded,
he may recover, as on the common coiir*^«' for work and labor done:
Simpson v. Carolina Cent. R. E. Co., IIC C. 703, 16 S. E. 853.
VI. Effect of Knowledge of Nonperformance.
The acceptance of work which has been defectively done, the
defects being unknown and not discoverable by inspection, does not
amount to a waiver of the imperfect performance. This rule has
been applied to carpenter's work (Trustees of Monroe Female Uni-
versity V. Broadfield, 30 Ga. 1), to work on a wall (Barker v. Nichols,
3 Colo. App. 25, 31 Pac. 1024), and to work on a roof: Dodge v.
Minnesota etc. Roofing Co., 14 Minn. 49. But where work is ac-
cepted with knowledge that it has not been done according to the
contract, or under such circumstances that knowledge of its im-
perfect performance may be imputed, the acceptance will generally
be deemed a waiver of the defective performance: Waters v. Harvey,
3 Houst. (Del.) 441; Robert Mitchell Furniture Co. v. Monarch
(Ky.), 39 S. W. 823; Adams v. Hill, 16 Me. 215. It is generally
conceded, however, that where a contract calls for the erection of a
structure or building on real estate, the owner may take possession
of the structure when completed without being held to have waived
defects in the work for which he has notice: Stewart v. Fulton,
31 Mo. 59; Mohney v. Reed, 40 Mo. App. 99; United States v.
Walsh, 115 Fed. 697, 52 C. C. A. 419. Contracts of this nature
are peculiar in this respect, as is hereinafter pointed out.
Vn. Effect of Necessity of Using Articles Contracted for.
It not infrequently happens that work is accepted with knowledge
that it is not such as has been contracted for, because the ac-
ceptor, under the exigencies of the case, has no alternative. When
264 American State Repoets. Vol. 115. [Kentucky,
work is thus accepted under the pressure of necessity, the general
rule that acceptance is a waiver of imperfect performance may be
modrfied in favor of the acceptor. Thus, it has been held that where
one contracts for stave bolts with which to operate his mill, the
fact that he uses them, when he has relied upon them to keep his
mill in operation and cannot reject them without great injury, does
not preclude him from thereafter showing their bad quality:
Ketchum v. Wells, 19 "Wis. 25. See, too, Andrews v. Eastman, 41
Vt. 134, 98 Am. Dec. 570, where firewood of a quality different from
that contracted for is used through necessity. Where a vendee of
machinery uses it, notwithstanding it is not such as he has con-
tracted for, or has not been furnished within the time agreed upon,
his use thereof being necessary in order to carry on his business,
he does not thereby waive the imperfect performance on the part
of the vendor: Payne v. Amos Kent Brick etc. Co., 110 La. 750,
34 South. 763; Industrial Works v. Mitchell, 114 Mich. 29, 72 N. W.
25. The fact that one walks from necessity over a walk and steps
from his door to the street does not show an acceptance of the con-
tractor's work in constructing them: Gwinnup v. Shies, 161 Ind.
500, 69 N. E. 158.
PREWITT V. SECURITY MUTUAL LIFE INSURANCE
COMPANY.
[119 Ky. 321, 83 S. W. 611, 84 S. W. 527.]
FOREIGN INSURANCE COMPANY— Revocation of License.—
A Statute providing that if a foreign insurance company, without the
consent of the other party to any suit brought by or against it in a
state court, removes the suit to a federal court, the insurance com-
missioner shall forthwith revoke its authority to do business in the
state, does not offend the United States constitution, (p. 271.)
Pirtle, Trabue, Doolan & Cox, for the appellant.
William Marshall Bullitt, for the appellee.
Hazelrigg, Chenault & Ilazelrigg, N. B. Hays, attorney gen-
ial, and R. H. Prewitt, for the commissioner,
*** HOB SON, J. In the first of the above eases the Secur-
ity Mutual Life Insurance Company filed its petition in
equity, alleging that in the year 1900 it began business in
Kentucky, having complied with the requirements of the
statutes of the state applicable to foreign insurance companies,
the plaintiff being a corporation organized under the laws of
Sept. 1904.] Prewitt v. Security Mut. Life Ins. Co. 265
the state of New York; that the commissioner then granted
it permission to transact the business of life insurance in this
state, and it employed a large number of agents, established a
large number of agencies throughout the state, expended large
sums of money in advertising its business, and acquired a
large and profitable business in the state; that in June, 190-i,
it removed to the circuit court of the United States for the
eastern district of Kentucky, without the consent of the other
party, a suit brought against it in one of the circuit courts
of the state ; and that on September 29, 1901, the ^'^ defend-
ant Prewitt, as insurance commissioner, revoked its authority
to do business in the state for the sole reason that it had
removed the suit referred to to the circuit court of the
United States, and refused and still refuses to set aside the
revocation. It prayed an injunction requiring the commis-
sioner to annul the revocation of its license and to continue
its authority to transact the business of life insurance in the
state. The defendant demurred to the petition, his demurrer
was overruled, and he, declining to plead further, a judgment
was entered as prayed in the petition.
In the other cases the petition is very similar, except that
it is there averred that the commissioner has not yet revoked
the plaintiff's license, but that he threatens to do so, and
unless enjoined by the court, will revoke it, to the plaintiff's
irreparable injury, it being a foreign corporation created
under the laws of the state of Connecticut. The defendant
demurred to the petition, his demurrer was sustained, and'the
plaintiff declining to plead further, its petition was dismissed.
Both the appeals raise the same question and will be consid-
ered together.
By section 633 of the Kentucky Statutes of 1903, licenses to
agents of foreign companies must be renewed annually, and
any person acting as the agent of such a company without pro-
curing a license, or after the license has expired, or has been
suspended or revoked, shall be guilty of a misdemeanor and
fined not less than fifty dollars nor more than one hundred
dollars for each offense. By section 634 every foreign insur-
ance company, before transacting any business in this state,
must return to the commissioner a copy of its charter or
organic law, and the commissioner, upon being satisfied that
the company has complied with the laws of the state and is
possessed with the legal reserve, shall furnish to such agents
266 American State Reports. Vol. 115. [Kentucky,
as the company directs ^*® a license to transact business as
agents for the company, under the seal of the insurance de-
partment. By section 657 foreign life insurance companies,
in addition, must file statements annually of their condition
on the 31st of December of the year preceding and certain
evidences of their deposits, securities, etc. By section 694
insurance companies other than life, not incorporated under
the laws of this state, upon complying with the provisions of
the statute, may be authorized by the commissioner to transact
business in the state. By section 761, the fees to be charged
by the commissioner are regulated.
Section 631 of the Kentucky Statutes of 1903 is in these
words: "Before authority is granted to any foreign insurance
company to do business in this state, it must file with the com-
missioner a resolution adopted by its board of directors, con-
senting that service of process upon any agent of such com-
pany in this state, or upon the commissioner of insurance of
this state, in any action brought or pending in this state, shall
be a valid service upon said company; but if process is served
upon the commissioner it shall be his duty to at once send it
by mail, addressed to the company at its principal office ; and
if any company shall, without the consent of the other party
to any suit or proceeding brought by or against it in any
court of this state, remove said suit or proceeding to any
federal court, or shall institute any suit or proceeding against
any citizen of this state in any federal court, it shall be the
duty of the commissioner to forthwith revoke all authority
to such company and its agents to do business in this state,
and to publish such revocation in some newspaper of general
circulation published in the state."
The validity of the latter clause of the section is the only
question to be determined upon the appeal. It is insisted
**'' that it is in conflict with the constitution of the United
States. Three decisions of the United States supreme court
are relied on. In Home Ins. Co. v. Morse, 20 Wall. 445, 22
L. ed. 365, the statute of the state required the foreign in-
surance company to sign an agreement not to remove any of
its cases to the federal courts. The company signed the agree-
ment and afterward filed a petition seeking the removal of a
suit brought against it to the federal court. The state court
refused to remove the case, but on appeal to the United
States supreme court the judgment of the state court was re-
Sept. 1904.] Prewitt v. Security Mut. Life Ins. Co. 267
versed, and it was held that the agreement in advance not to
exercise a right guaranteed by the constitution did not pre-
vent the defendant from removing the case to the federal
court. The opinion was written by Judge Hunt, and goes
no further than the question actually before the court.
The next case relied on is Doyle v. Continental Ins. Co., 94
U. S. 535, 24 L. ed. 148, the opinion being also written by
Judge Hunt. In that case there was a state statute corres-
ponding to section 631 above quoted, and the state officer
under it was about to cancel the license of the insurance com-
pany. The plaintiff made in substance the same allegations
as are made in the case before us, and prayed an injunction
as in these cases. The supreme court, reversing the court be-
low, dismissed the bill. After distinjjuishing the case from
the Morse case (20 Wall. 445, 22 L. ed. 365), the court
said: "The cases of Bank of Augusta v. Earle, 13 Pet.
519, 10 L. ed. 274, Ducat v. Chicago, 10 Wall. 410, 10 L.
ed. 972, Paul v. Virginia, 8 Wall. 168, 19 L. ed. 357, and
Lafayette Ins. Co. v. French, 18 How. 404, 15 L. ed. 451,
establish the principle that a state may impose upon a foreign
corporation, as a condition of coming into or doing business
within its territory, ^^* any terms, conditions and restrictions
it may think proper that are not repugnant to the constitu-
tion or laws of the United States. The point is elaborated
at great length by Chief Justice Taney in the case fh-st named,
and by Mr. Justice Field (Curtis) in the case last named.
The correlative power to revoke or recall a permission is a
necessary consequence of the main power. A mere license
hy a state is always revocable: Rector v. Philadelphia, 24 How.
300, 16 L. ed. 602 ; People v. Roper, 35 N. Y. 629 ; People v.
Commissioners of Texas, 47 N. Y. 501. The power to revoke
can only be restrained, if at all, by an explicit contract upon
good consideration to that effect: Humphrey v. Pegues, 16
Wall. 244, 21 L. ed. 326 ; Tomlinson v. Jessup, 15 Wall. 454,
21 L. ed. 204. License to a foreign corporation to enter
a state does not involve a permanent right to remain, subject
to the laws and constitution of the United States. Full
power and control over its territories, its citizens, and its
business belongs to the state. If the state has the power to
do an act, its intention or the reason by which it is influenced
in doing it cannot be inquired into. Thus the pleading be-
fore us alleges that the permission of the Continental Insur-
268 AMERiavN State Reports. Vol. 115. [Kentucky,
ance Company to transact its business in Wisconsin is about
to be revoked for the reason that it removed the case of
Drake from the state to the federal courts. If the act of an
individual is within the terms of the law, whatever may be
the reason which governs him or whatever may be the result,
it cannot be impeached. The acts of a state are subject to
still less inquiry, either as to the act itself or as to the rea-
son for it. The state of Wisconsin (except so far as its con-
nection with the constitution and laws of the United States
alters its position) is a sovereign state, possessing all the
powers of the most absolute government in the world.
329 rpjjg argument that the revocation in question is made for
an unconstitutional reason cannot be sustained. The sugges-
tion confounds an act with an emotion or a mental proceed-
ing which is not the subject of inquiry in determining the
validity of a statute. An unconstitutional reason or intention
is an impracticable suggestion, which cannot be applied to
the affairs of life. If the act done by the state is legal — is
not in violation of the constitution or laws of the United
states — it is quite out of the power of any court to inquire
what was the intention of those who enacted the law. In
all cases where the legislation of a state has been declared
void, such legislation has been based upon an act or a fact
which was itself illegal." After discussing certain previous
decisions, 'the court added: "It is said that we thus indi-
rectly sanction what we condemn when presented directly, to
wit, that we enable the state of Wisconsin to enforce an
agreement to abstain from the federal courts. This is an
'inexact statement.' The effect of our decision in this is-
spect is that the state may compel the foreign company to ab-
stain from the federal courts or to cease to do business in the
state. It gives the company the option. This is justifiable,
because the complainant has no constitutional right to do
business in that state. That state has authority at any time
to declare that it shall not transact business there. This is
the whole point of the case, and, without reference to the in-
justice, the prejudice, or the wrong that is alleged to exist,
must determine the question. No right of the complainant
under the laws or constitution of the United States, by its
exclusion from the state, is infringed; and this is what the
state now accomplishes. There is nothing, therefore, that
will justify the interference of this court."
Sept. 1904.] Prewitt v. Security Mut. Life Ins. Co. 269
It is conceded by counsel that if this case is still authority,
*^** these actions must fail. But it is insisted that in Barron
V. Bumside, 121 U. S. 186, 7 Sup. Ct. Rep. 931, 30 L. ed. 915,
this case was, in effect, overruled. In Barron v. Burnside
there was a state statute requiring every foreign corporation
to have a license before engaging in business in the state.
The license, by the tei-ms of the statute, was not to be issued
except upon the application of the company by a resolution
of the board of directors or stockholders authorizing it, and
containing a stipulation that the permit should be subject
to each of the provisions of the act, one of which was that
the permit should be void if the corporation removed a case
to the federal courts. Barron was arrested under the stat-
ute for doing business for a foreign corporation without com-
plying with the statute, and obtained a writ of habeas corpus,
which was sustained by the United States supreme court.
The court, after quoting the statute and discussing it at some
length, said: "This proceeding is a unit. The filing of the
articles of incorporation and the provision in regard to ser-
vice of process are to be authorized by the same resolution
which requests the issue of the permit; and this request or
application is to contain the stipulation above mentioned.
These various things are not separable." Then, after soine
further discussion of the statute, the court concludes with
the.se words: "In view of these considerations, the case falls
directly within the decision of this court in Home Ins. Co.
V. Morse, 20 Wall. 445, 22 L. ed. 365." It then proceeds,
after showing what was decided in the Morse case, to discuss
the Doyle case in these words: "The case of Doyle v. Con-
tinental Ins. Co., 94 U. S. 535, 24 L. ed. 148, is relied on by
the defendant in error. In that case this court said that it
had carefully reviewed its decision in Home Ins. Co. ^^* v.
Morse, 20 Wall. 445, 22 L. ed. 365, and was satisfied with it.
In referring to the second conclusion in Home Ins. Co. v.
Morse, 20 Wall. 445, 22 L. ed. 365, above recited, namely, that
the statute of Wisconsin was repugnant to the constitution of
the United States, and was illegal and void, the court said, in
Doyle V. Continental Ins. Co., 94 U. S. 535, 24 L. ed. 148,
that it referred to that portion of the statute which required
a stipulation not to transfer causes to the courts of the United
States. In that case, which aro.se under the statute of Wis-
consin, the foreign insurance company had complied with
the statute, and had filed an agreement not to remove suits
270 American State Reports. Vol. 115. [Kentucky,
into the federal courts, and had received a license to do busi-
ness in the state. Afterward it removed into the federal
court a suit brought against it in a state court of Wisconsin.
The state authorities threatening to revoke the license, the
company filed a bill in the circuit court of the United States,
praying for an injunction to restrain the revoking of the
license. A temporary injunction was granted. The defend-
ant demurred to the bill, the demurrer was overruled, a de-
cree was entered making the injunction perpetual, and the
defendant appealed to this court. This court reversed the
decree and dismissed the bill. The point of the decision seems
to have been that, as the state had granted the license, its
officers would not be restrained by injunction by a court of
the United States from withdrawing it. All that there is
in the case beyond this, and all that is said in the opinion
which appears to be in conflict with the adjudication in Home
Ins. Co. V. Morse, 20 Wall. 445, 22 L. ed. 365, must be re-
garded as not in judgment."
We do not understand this to overrule the Doyle case (94
U. S. 535, 24 L. ed. 1481) ; for certainly, if the state cannot
withdraw the license it has once granted, any court of com-
petent jurisdiction may so decide. If the state statute with-
drawing the license was unconstitutional ^^^ and void, the
supreme court of the United States had the same power to
declare the statute in that case unconstitutional as it had
to declare the statute unconstitutional in Barron v. Burnside,
121 U. S. 186, 7 Sup. Ct. Rep. 931, 30 L. ed. 915. Our stat-
ute is not liable to the objections made to the statute in either
the Morse case (120 Wall. 445, 22 L. ed. 365) or the Barron
case (121 U. S. 186, 7 Sup. Ct. Rep. 931, 30 L. ed. 915). Un-
der our statute the foreign insurance company is at liberty to
remove its caus»i to the federal court whenever it sees proper.
It is required to sign no stipulation or agreement interfering
with that right. The regulation is reasonable that the state,
for the protection of its citizens against unsafe insurance
companies, should require them, before doing business in
the state, to obtain a license from the insurance commissioner,
and to furnish him such evidences of their solvency as will
protect insurers in this state before he is authorized to grant
them a license. The license which the state grants is purely
a matter of grace, and, like any other license, may be revoked
by the licensor at pleasure. The rev9cation of the license
Sept. 1904.] Prewitt v. Security Mut. Life Ins. Co. 271
interferes with no legal right of the licensee; for, when he
takes it, he takes it subject to revocation. He cannot question
the reason of the licensor for revoking the license, as the state
may exclude foreign corporations from doing business in the
state with or without reason. If I have license to cross my
neighbor's lot, and he revokes it because I brought a suit
against his son, I cannot enjoin him from revoking the licerise
on the ground that I had a constitutional right to go to the
courts for relief, and that my exercise of a constitutional
right was no just reason for his revoking the license he had
given me; for he had an absolute right to revoke the license,
and the fact that he did it out of spite, or for a bad reason,
is immaterial. The state, by her statutes above referred to,
in effect, says to the foreign insurance companies: "I will
*^^ license you to do business here on the same plane as do-
mestic corporations, and if you come here you must stand on
no more favorable ground than the domestic insurance com-
panies. If, after you come, you refuse to so stand, I will
withdraw my license." The reason for the statute is not
distrust of the federal courts, but the practical denial of
justice that results, in a sparsely settled state like ours, if
the case must be tried one hundred or two hundred miles from
where the parties and witnesses reside. Domestic insurance
companies enjoy no such immunity, but must try their cases
in the vicinage. The state simply says to the foreign insur-
ance companies: "I will withdraw my license if you insist
on privileges not enjoyed by home companies." If the state,
on the day before these suits were filed, by legislative act had
withdrawn all licenses to foreign insurance companies, recit-
ing in the preamble to the act that it was enacted inasmuch as
the two cases above referred to had been removed to the
United States circuit court, could these plaintiffs have com-
plained? If not, how are they affected by the fact that the
state acts by an executive officer, and not by a special stat-
ute? Certainly they cannot complain that the license of cer-
tain other companies was not revoked.
The case of Commonwealth v. East Tennes.see Coal Co., 97
Ky. 238, 17 Ky. Law Rep. 139, 30 S. W. 608, did not involve
the revocation of a license granted by the state, but was in
effect similar to Barron v. Burnside. above cited, being a
proceeding to impose a fine on the defendant after it removed
a case from the state courts. The naked question presented
272 American State Reports. Vol. 115. [Kentucky,
here is, May the state, without cause, revoke a license it has
once granted? for a bad reason is no worse than none at all.
The distinction is a narrow one, but none the less sound,
unless the whole doctrine that the state may grant or with-
hold ^^^ a license as it sees fit is to be abandoned. It is jug-
gling with words to say that a state may at will prohibit
foreign corporations from doing business in the state (Hooper
V. California, 155 U. S. 648, 15 Sup. Ct. Rep. 207, 39 L. ed.
297), and yet that it may not at will withdraw a license which
it has once granted to such corporations. It seems to us
that the Boyle case rests on sound principles, and that the
Barron case in no wise conflicts with it ; for that case is by the
court expressly put upon the ground that the statute there,
when properly construed, fell within the rule laid down in
the Morse case: 6 Thompson on Corporations, sees. 7466,
7467; 13 Am. & Eng. Ency. of Law, 867; People v. Pavey,
151 111. 101, 37 N. E. 691.
The judgment in the first case is therefore reversed, for
further proceedings consistent herewith.
The judgment in the second case is affirmed.
Chief Justice Bumam and Justice Barker Dissented from the con-
clusion of the majority of the court, Justice Barker writing a dissent-
ing opinion in which he reviewed and relied upon the following au-
thorities: Commonwealth v. East Tennessee Coal Co., 97 Ky. 238,
30 S. W. 608; Commonwealth v. Jellico Coal Co., 97 Ky. 246, 30
S. W. 611; Insurance Co. v. Morse, 87 U. S. (20 Wall.) 445, 22 L. ed.
365; Barron v. Burnside, 121 U, S. 186, 7 Sup. Ct. Eep. 931, 30 L. ed.
915; Doyle v. Continental Ins. Co., 94 U. S. 535, 24 L. ed. 148.
A Foreign Corporation does business within the state, not by right,
but by comity, and the state may, at pleasure, revoke the privilege
granted by it to such corporation: State v. Standard Oil Co., 61 Neb.
28, 87 Am. St. Rep. 449; Woodward v. Mutual Reserve Life Ins. Co.,
178 N. Y. 485, 102 Am. St. Rep. 519; Presbyterian Ministers' Fund
V. Thomas, 126 Wis. 281, 110 Am. St. Eep. 919.
Jan. 1905.] Jones v. Crawford. 273
JONES V. CRAWFORD.
[119 Ky. 554, 84 S. W. 568.]
HOMESTEAD — Loss l)y Marriage of Infant. — Under a statute
providing that the unmarried infant children of a deceased home-
steader shall be entitled to a joint occupancy of the homestead with
his widow until the youngest arrives at full age, a daughter who mar-
ries during minority loses her homestead rights, (pp. 274, 275.)
W. B. Moody and W. O. Jackson, for the appellant.
Turner & Turner, for the appellee.
^^'^ O'RBAR, J. The question presented for decision by
this appeal is whether a homestead right under the statute
which had become vested in an infant daughter of the land
owner is devested by her marriage during her minority. By
statute (Ky. Stats. 1903, sec. 1702) there is exempted to the
debtor with a family, who is a resident of this commonwealth,
land occupied by him, not exceeding one thousand dollars in
value, which cannot be subjected without his consent to sale
for his debts. This right of homestead exemption belongs to
the debtor who is a head of the family, and attaches to such
of his real estate as may have been selected and is occupied
by him for that purpose. Upon the death of such home-
steader, by section 1707 of the Kentucky Statutes of 1903,
it is provided: "The homestead shall be for the use of the
widow so long as she occupies the same, and the unmarried
infant children of the husband shall be entitled to a joint
occupancy with her until '^^^ the youngest child arrives at
full age. But the termination of the widow's occupancy shall
not affect the children." But for section 1707, upon the
death of the homesteader his property would at once pass
to his heirs at law or devisees, subject to the rights of cred-
itors, without any right to the widow or minor children to
occupy it, save as they might take as heirs at law or devisees,
which would give minors no claim superior to or different
from that of major heirs. It is competent for the legislature
to remove from liability for debts such portion of the debtor's
estate as may be needful to sustain his family. It tends to
keep the family together, to keep them from want, and is in
harmony with the public policy to encourage the maintenance
of the instruction of the home. This policy, though varied
in many of its features, is now a universal one in this country.
Am. St. Rep., Vol. 115—18
274 American State Reports. Vol. 115. [Kentucky,
It would be incomplete, and fall short of its wise and humane
purpose, did it not extend to the widow and infant children
of the debtor after his death. Every reason that existed be-
fore upon which it could rest continues with increased force
after the death of the debtor. This right or privilege of home-
stead exemption is a creature of the statute. Its beneficia-
ries can take only what the statute has given them, and upon
the terms named in the act. The heirs at law have no title,
during their ancestor's life, to his property. Upon his death
they take simply what the law gives them, and subject to the
terms imposed by law. There is no inherent natural right of
inheritance. So, when the legislature created the privilege
of homestead exemption in favor of a householder, and con-
tinued it after his death for certain members of his family,
it was competent for the law-making body to select those
members whose interests and whose relation to society were
such as to bring them within the public policy treated of by
the enactment, and who should, for these reasons, be favored
'^'^^ by the statute. It was likewise competent, and perhaps
necessary, to provide in what contingencies the right so con-
ferred might be lost or otherwise terminated. The widow,
by abandonment of the homestead, and the children upon
reaching majority, lose their rights in the homestead as a
homestead. The unity of the family — of the one family —
of the deceased owner is looked to. When the widow aban-
dons the homestead — as by remarrying and removing perma-
nently from it — she is no longer regarded by the law, for the
purposes of the application of the benefits of this statute, as
a member of that family. "When an infant child reaches his
majority, he, too, is no longer a member of the decedent's
remaining "family," within the contemplation of the statute.
If an infant child marries, it thereby becomes a member of
another family — that of his or her own — a new family, the
head of which would be entitled to his or her own homestead
exemption as such head of a family. By marriage the infant
does not bring the spouse into the old family as a member
of it, in law.
Counsel for appellee argue that an infant is incapable of
contracting or of waiving his or her legal rights by conduct;
that, as appellee's right to occupy the homestead in this case
had once attached, her subsequent marriage during her in-
fancy could not waive that right, because she was then under
Jan. 1905.] Carpenter v. Carpenter's Trustee. 275
the disability of infancy. But it must be remembered that
the disability of infancy, as discussed in law, is a status
created by the law, and may be subject to limitations or ex-
ceptions by the lawmakers. The statute under investigation
is an exception by legislation to the general rule of law re-
garding the disability of infants. Under it the infant's act
whereby he is removed from the class who may claim the
benefits of the statute is what was contemplated by the
658 legislature, and was made a condition concurrent to the
enjoyment of the statutory privileges.
The judgment of the circuit court is reversed, and cause
remanded for proceedings not inconsistent herewith.
If a Person has Acquired the Bight to a Homestead exemption by
the occupancy of land with his family, the loss of his family by
death and marriage does not defeat such right: Davis v. Feltman
Co., 112 Ky. 293, 99 Am. St. Eep. 289, and cases cited in the cross-
reference note thereto.
CARPENTER v. CARPENTER'S TRUSTEE.
[119 Ky. 582, 84 S. W. 737.]
WILL — Extrinsic Evidence to Vary Trust. — Where a testator
has directed the share of his son to be paid to a trustee, to be used
for the benefit of the son, but not to be paid into his hands, extrinsic
evidence is not admissible to show that the testator's reason for
creating the trust was the incapacity of the son because of disease,
that since the death of the testator the son has so far recovered his
health as to be able to manage his estate, and that therefore its
possession and control should be given to him. (p. 277.)
C. B. Larimore, H. W. Curie and C. B. Dowling, for the
appellant.
D. A. McCandless, for the appellee.
*^ BARKER, J. This action involves a construction of
the following item of the will of John B. Carpenter, deceased:
"(6) I direct the share of my son, E. A. Carpenter, to be
paid into the hands of a trustee to be appointed by the Hart
county court, to be used for his benefit and to keep him from
want, but that it be not paid into his hands." The will of
the father was admitted to probate, and the appellee, Truax
Sturgeon, appointed trustee by the Hart county court.
Afterward the cestui que trust instituted this action in the
276 American State Reports. Vol. 115. [Kentuclr;',
Hart circuit court against his trustee, setting up in his peti-
tion the foregoing item from his father's will, and alleging
substantially that for three or four years before his father's
death he (plaintiff) had suffered greatly from paralysis, and
was unable to labor for his support, and that his father,
"probably thinking or believing that his mind was impaired
or would become impaired by reason of the paralysis, which
this plaintiff ***"* denies, and which was a wrong conception,
if it was conceived by his father that his [plaintiff's] mind
was impaired or would become impaired by reason of the
severe stroke of paralysis," placed his (plaiutift''s) estate in
trust, as shown in the foregoing item of the will; that since
his father's death his health has so improved as to render him
physically able to prudently manage and control his estate,
which is now withheld from him by his trustee, Truax Stur-
geon; and he prays that the trust be vacated, and the fund
constituting it be turned over to his hands for management,
etc. A general demurrer was interposed to this petition,
which was sustained by the court, and the appellant declin-
ing to plead further, was dismissed.
This action is based upon the opinion of this court in the
case of Webster v. Bush, 19 Ky. Law Rep. 565, 39 S. W. 411,
42 S. W. 1124, which involved the construction of a clause in a
will in all respects similar in principle to that at bar, in which
it was held that where a testator devised an estate in trust for
his daughter, under the supposition that she was of feeble mind,
the court was authorized, upon an allegation that the physical
incapacity had ceased to exist, to try this question, and. if it
was established by the evidence, to discharge the trust. In
that case Judge DuRelle delivered a dissenting opinion, which
contains an admirable exposition of the law, and from which
we adopt the following: "With the wisdom or unwisdom of
the clause above quoted from the will this court has nothing
to do, except in so far as it might shed light on the intention
of the testator if ambiguity existed. There was no ambigu-
ity. The testator had the absolute and unconditional right
to place upon the devise to his daughter the limitations which
he imposed, and no court has a right to assign to him a
motive for these limitations, and, by denying the existence
of a rea.son for that ^^^ motive, create a new will for the tes-
tator. To adjudge that a court, in construing unambiguous
language in a will, may surmise a reason in the testator's
Jan. 1905.] Carpenter v. Carpenter's Trustee. 277
mind for his clearly expressed intent, and then, upon evi-
dence introduced by devisees denying the existence of that
supposititious fact, proceed to set aside the plain expression
of intent, is to nullify the statute of wills. No trust could
then be so carefully guarded as not to be at the mercy of
the imagination of the chancellor. There can be no doubt
that this trust comes within the class which do not vest a
legal estate in the cestui que trust, being a case 'where such
powers or duties were imposed with the estate upon a donee
to uses that it was necessary that he should continue to hold
the legal title in order to perform the duty or execute the
power': Perry on Trusts, sees. 300-305; Kay v. Scates, 37
Pa. 31, 78 Am. Dec. 399, and note. It seems to be equally
well settled that 'where the instrument is free from ambigu-
ity, and there is no imperfection or inaccuracy in its lan-
guage, the testator's intention is to be collected from the
words used by him and parol evidence is not allowable for
the purpose of adding to or explaining or subtracting from
it, or to raise an argument in favor of any particular con-
struction : Phillips on Evidence, 545 ; 8 Bingham, 244 ; Wig-
ram on Ec. Evidence, 65. Extrinsic evidence of intention is
inadmissible for the purpose of supplying a devise or any
other material provision omitted by mistake, or to superadd
any qualification to the terms used, or to evince a mistake
in writing the instrument': Stephen v. Walker, 8 B. Mon.
600. It is not necessary here to inquire whether the evidence
introduced would be sufficient to justify a discharge of the
trust if the will had provided i)\at it was to continue only
until the daughter became competent to manage her estate.
The proposition here stated is that, under the terms of the
will as written, no evidence can be introduced ^^^ to show
what the reason was for the devise to the trustee, and that
that reason never existed or has ceased to exist. To do so
is to superadd a qualification to the terms used, and by parol
to import into the will an intention which is not there ex-
pressed: Bingel v. Volz, 142 111. 214, 34 Am. St. Rep. 64, 31
N. E. 13, 16 L. R. A. 321. It is to show by evidence aliunde
a different intent on the part of the testator in reference to
the devise to Euphemia from that manifested by the language
of the will. The rule was stated by Judge Simpson in Stephen
V. Walker, 8 B Mon. 600: 'The inquiry must be confined to
the meaning of the words used, and hence all extrinsic evi-
278 American State Reports. Vol. 115, [Kentucky,
dence tending to prove, not what the testator has expressed,
but what he intended to express, is inadmissible.' "
The question involved in the case at bar is not to be con-
fused with the principle that a dry or simple trust will be
vacated by the chancellor upon the request of the cestui que
trust. A dry or simple trust is one as to which the trustee
has no duties to perform, and the cestui que trust has the
entire management of the estate. It is a simple separation
of the equitable and legal estates, which can be united at
the option of the cestui que trust: Woolley v. Preston, 82
Ky. 415. Nor is it to be confounded with those trusts which
are created upon a declared condition which has passed away ;
the reason ceasing, the trust also ceasing. Such, for in-
stance, a trust established for the benefit of a married woman,
and she. becomes discovert. In that case the trust will cease
to exist when the declared disability ceases : Thomas v. Hark-
ness, 13 Bush, 23. The case at bar presents an active trust,
where the trustee has the sole management and control of
the estate, * and the question involved is whether evidence
aliunde can be introduced to establish for a testator a motive
for his action when he has expressed ^^"^ none in his will,
and where his language is perfectly plain and unambiguous.
This, we hold, cannot be done, and Webster v. Bush is no
longer to be regarded as authority.
It seems to us a safer rule to leave intact this trust — the
result of loving foresight reaching into the future to shield
the object of its solicitude after the heart which it inspired
has ceased to beat — than to subject it to the vicissitude of
a judicial inquiry based upon the careless opinions of wit-
nesses as to the sufficient restoration of the beneficiary's mind
to warrant the nullification of the will of the donor.
The judgment dismissing the petition is affirmed.
Extrinsic Evidence to Explain Wills is discussed in the note to
Chappell V. Missionary Society, 50 Am. St. Eep. 279. It is well
understood that extrinsic evidence is not admissible to aid the con-
struction of a will, where, from the language alone, when applied
to the facts and circumstances to which it relates, the meaning of the
testator is clear: Thompson v. Betts, 74 Conn. 576, 92 Am. St, Eep.
235. Evidence as to the intention of the testator separate and apart
from that conveyed by the language of the will is not admissible
for the purpose of interpreting the instrument: Clarke v. Clarke,
46 S. C. 230, 57 Am. St. Eep. 675: Bingel v. Voltz, 142 111. 214, 34
Am. St Eep. 64.
Oct. 1900.] Fidelity etc. Co. v. Louisville etc. Co. 279
FIDELITY TRTTST AND SAFETY VAULT COMPANY
V. LOUISVILLE BANKING COMPANY.
[119 Ky. 675, 58 S. W. 712.]
JUDGMENT — Effect of Reversal. — Where the claim of a mort-
gage creditor was adjudged a lien superior to that of attaching cred-
itors upon property assigned for the benefit of creditors, and he,
under order of court, withdrew the funds which the assignees had
paid into court, and distributed them among his creditors, the cred-
itors of the assigned estate, upon the reversal of the judgment which
has been appealed from but not superseded, cannot compel his cred-
itors to refund the money, but must look to him alone, (pp. 283, 28-1.)
John Eoberts, Lane & Burnett, Kohn, Baird & Spindle
and C. B. Seymour, for the appellants.
Humphrey, Burnett & Humphrey, for the appellee.
67T GUFFY, J. In 1890 the Etheridge Manufacturing
Company, a corporation, made an assignment to George
Straeffer, as alleged, for the benefit of all its creditors.
Afterward some, if not all, of these appellees instituted suit
and obtained attachments which were properly levied, and
also attacked the assignment as fraudulent and as made with
the intent to delay and defraud creditors. Said assignee was
also summoned as garnishee. N. N. Etheridge, one of the
stockholders and officers of said corporation, asserted a mort-
gage lien upon the proceeds in the hands of said assignee for
the sum of $6,000, besides interest.
The court below sustained the attachments, and adjudged
the assignment to be fraudulent, and set the same aside ; but
adjudged the mortgage claim of Etheridge to be a superior
lien upon the fund which Straeffer had, under proper orders
of the court, paid into court, said amount being more than
$20,000, and after said judgment the court below allowed by
order said Etheridge, through his attorneys. Lane & Burnett,
to withdraw the money adjudged to him, and within a few
days, if not on the very day said order was made, the money
*^** was 80 withdrawn. These judgments and orders and
withdrawal of the money occurred in December, 1894.
After the rendition of the judgment and the said order and
collection had been made, the creditors of the corporation
prosecuted an appeal to the court of appeals, but these judg-
ments were not superseded. On the 22d of October, 1897,
280 American State Reports. Vol. 115. [Kentucky,
this court reversed the judgment of the lower court in so far
as it allowed Etheridge any lien upon said fund prior or even
equal to the lien of the attaching creditors. After the re-
turn of the cause to the circuit court these appellees obtained
rules against the several appellants, requiring them to pay
back the several sums of money received by them.
It appears from the responses and testimony in this case
that after the withdrawal of said sum, which then amounted
to $6,900, that on the fourteenth day of December, 1894,
Etheridge paid out $2,500 thereof to the Fidelity Trust and
Safety Vault Company on a mortgage debt of $5,500 to Mrs.
E. L. Lane, and afterw^ard paid to said company $540; that
he paid to his attorneys. Lane & Burnett, the sum of $690,
which was their charge against him for services rendered him
in these cases; that he paid to C. G. Hulsewede and C. B.
Seymour, for services that they had rendered him, the sum
of $1,380, and to S. E. Roach, on a mortgage debt, $250, and
city and state taxes, $615.46, and to the Mutual Life Insur-
ance Company, for insurance on his life, $295.32; and some
other sums not necessary to mention.
The substance of the responses of the several appellants
herein show that they received the various sums of money
named therein in payment of debts due them from N. N.
Etheridge; and it is claimed that Etheridge was authorized
to withdraw the fund from the court, and the judgment ad-
judging the same to him was then valid, unreversed and had
never been superseded.
^"^^ The court below adjudged the responses insufficient,
and made the several rules absolute, and from these judg-
ments these several appeals are prosecuted, and, by agreement,
are heard together. It is the contention of appellees that
they had a lien upon the $6,900 in question, and that the
circuit court erroneously adjudged the money to Etheridge,
but they contend that such judgment did not destroy or an-
nul their several liens; and inasmuch as the court of appeals
reversed the judgment, and adjudged that the lien of the
attaching creditors was superior to that of Etheridge, that
the lien in fact and in law existed on the fund all the time;
hence they argue that these appellants having received that
identical money, that they were in law bound to repay the
same under and in accordance with the rules issued as afore-
said. The appellants insist that there was no lien upon the
Oct. 1900.] Fidelity etc. Co. v. Louisville etc. Co. 281
fund; that it was simply a liability upon the part of the
holder to pay the same under proper orders of the court;
and it is further contended that inasmuch as Etheridge, un-
der the judgment of the trial court in the original case, was
adjudged the money and the same paid to him, and by him
to these appellants as aforesaid, that they are under no legal
obligation to refund the same, and that the attaching cred-
itors must look alone to Etheridge. There is no claim by ap-
pellees that any effort was being made, or intention made
known, that the creditors desired or intended to supersede
the original judgment.
We have not been referred to any decision of this court
that expressly decides the question herein presented. It is,
however, a familiar rule of law that a purchaser of land
under a judgment acquired a good title, although the judg-
ment may afterward be reversed. It seems to be conceded
that in cases where a person is garnished that if he pays the
debt owing to the defendant, that the party receiving the
**® money cannot be held to account therefor; but all that
the plaintiff can recover is a judgment against the garnishee.
We do not think the case of Hobson v. Hall, 13 Ky. Law Rep.
109, 14 S. W. 958, sustains the contention of appellees. It
will be seen in that case that the parties who purchased the
attached tobacco had executed a forthcoming bond, which
bound them to have the tobacco, or the value forthcoming
subject to the order of the court, and although the attach-
ment under which the tobacco had been seized was tinally
discharged, yet the plaintiff had been allowed to file addi-
tional grounds of attachment before the bond had been dis-
charged or sureties released, and the latter attachment hav-
ing been sustained, the court adjudged a lien in favor of the
attaching creditor upon the tobacco in question.
If, instead of the $6,900 being in money, there had been a
contest between Etheridge and the other attaching creditors
as to a lien upon personal property, for instance, horses
and cattle, then in the custody of the court's receiver, and
the court had denied any lien to the attaching creditor and
adjudged the property to Etheridge, it would seem that he
could sell it and pass good title thereto at any time while
such judgment was in force.
In Freeman on Executions, volume 3, section 346, it is
said: "Upon the reversal of a judgment, after a sale has
282 American State Reports. Vol. 115. [Kentucky,
been made under execution to a stranger to the suit, the de-
fendant must seek redress from the plaintiff. This redress
was formerly obtained by a scire facias quare restitutionem
non This is still the remedy in some states in cases where
the record does not show that the money realized from the
sale had been paid to the plaintiff. "Where the plaintiff has
received the proceeds of the sale, the defendant may recover
in an action for money had and received. If, however, the
money, after being paid to plaintiff, is by him paid to a third
•** person, it cannot be recovered from such person, though
he was one of the plaintiff's attorneys."
In Rhorer on Judicial Sales, section 576, it is said: "Where
the sale is to a third person and bona fide purchaser, and
has been fully completed by confirmation, conveyance and
pajonent, it will neither be avoided nor will it be set aside
by reason of a subsequent reversal of the decree. This rule
is so generally recognized as to scarcely require authorities
to support it. In the language of the Illinois supreme court,
"if the court has jurisdiction to render the judgment or to
pronounce the decree — that is, if it has jurisdiction over the
parties and the subject matter — then, upon principles of
universal law, acts performed and rights acquired by third
persons, under the authority of the judgment or decree, and
while it remains in force, must be sustained, notwithstanding
a subsequent reversal."
In the case of Langley v. Warner, 3 N. Y. 327, the court,
in considering a case somewhat analogous to the case at bar,
uses the following language: "The case then comes to this:
The money in question, in the regular course of judicial pro-
ceedings, came to the hands of the defendant as the attorney
of Walsh; and on the subsequent settlement between them
the money was passed to the creditor, Walsh, on account of
his indebtedness to the defendant. It was the same thing
in effect as though the defendant had first paid over the
money to Walsh, and the latter had then repaid it to the de-
fendant in satisfaction of his debt. About two months after-
ward the judgment was reversed and restitution was awarded
to the plaintiffs against Walsh. It was very proper that he
should make restitution, for he had in effect received the
money and applied it to the payment of his debt. The plain-
tiffs proceeded to execution against Walsh, in pursuance of
the judgment for restitution; but *** failing in that, they
Oct. 1900.] Fidelity etc. Co. v. Louisville etc. Co. 283
now seek to recover the amount from the defendant. I see
no principle on which the action can be maintained. The
defendant has got none of the plaintiff's money; he has got
nothing but his own. Walsh had a perfect title to the money
when it was collected, just as perfect as it would have been
if no certiorari had been issued. He had a right to do what
he pleased with the money; and he made a very proper use
of it by paying his debt. The plaintiffs have taken up the
strange notion that because they were trying to get the judg-
ment reversed Walsh could not give a good title to the money,
especially if he paid it to one who knew what they were do-
ing. I am not aware of any foundation for such doctrine.
As Walsh had a good title to the money, he could, of course,
give a good title to the defendant, or anyone else. No one
was bound to presume that the judgment of a court of com-
petent jurisdiction was erroneous and would be reversed.
The legal presumption was the other way — that the judg-
ment was right and would be affirmed. But if the judgment
had been known to be erroneous the pendency of the proceed-
ings in error could not affect, in the least degree, the title of
Walsh to the money. Nothing short of a reversal of the judg-
ment could destroy or impair his right."
In Bank of the United States v. Bank of Washington,
6 Pet. 19, 8 L. ed. 305, the supreme court, in discuss-
ing similar questions to that under consideration, said: "But
the answer to the argument is that no notice whatever could
change the rights of the parties so as to make the Bank of
the United States responsible to refund the money. When
the money was paid there was a legal obligation on the part
of the Bank of Washington to pay it; and a legal right on
the part of Triplett and Neale to demand and receive it, or
to enforce payment of it under the execution. And whatever
**** was done under that execution, whilst the judgment was
in full force, was valid and binding on the Bank of Wash-
ington so far as the rights of strangers or third persons are
concerned. The reversal of the judgment cannot have a retro-
spective operation and make void that which was lawful
when done. The reversal of the judgment gives a new right
or cause of action against the parties to the judgment, and
creates a legal obligation on their part to restore what the
other party has lost by reason of the erroneous judgment;
and as between the parties to the judgment there is all the
284 American State Reports. Vol. 115. [Kentucky,
privity necessary to sustain and enforce such right; but as
to strangers, there is no such privity;. and if no legal right
existed when the money was paid to recover it back, no such
right could be created by notice of an intention so to do.
Where money is wrongfully and illegally exacted, it is re-
ceived without any legal right or authority to receive it;
and the law, at the very time of payment, creates the obliga-
tion to refund it. A notice of the intention to recover back
the money does not, even in such cases, create the right to
recover it back; that results from the illegal exaction of it,
and the notice may serve to rebut the inference that it was
a voluntary payment, or made through mistake."
If the contention of appellees that they had a lien upon
the specific $6,900, which lien attached and continued with
the money, it would seem that if these appellants had paid
the money to some other party that appellees would hold
such party responsible, and that any and all persons who
received the money would incur a liability to be required to
refund the same. Surely this cannot be the law. The duty
of Etheridge to refund the money is not disputed. And it
seems to us that these appellees must look alone to Etheridge
for relief or restitution. It results from the foregoing that
the trial court erred in making the several rules absolute.
684 rpj^g judgments appealed from are reversed and cause
remanded, with directions to adjudge the several responses
sufficient and for proceedings consistent herewith.
The Effect of the Beversal of a Judgment on appeal is considered
in the note to Cowdery v. London etc. Bank, 96 Am. St. Rep. 124.
Jan, 1905.] Commonwealth v. Beckett. 285
COMMONWEALTH v. BECKETT.
[119 Ky 817, 84 S. W. 758.]
FALSE Pretenses — ^Use of confederate Money.— Where
one party to a horse trade agrees to pay the other seven anrl one-
half dollars to boot, and accordingly, with intent to defraud, hands
him a ten dollar Confederate bill, saying: "Give me two dollars and
a half; here is a ten dollar bill," whereupon the other receives
the bill, supposing it to be United States currency, and passes two
dollars and a half back as change, the offense of obtaining money
under false pretenses is committed, although the bill may not be
calculated to deceive a person of ordinary prudence and discre-
tion, for the law protects the unwary and even the "foolish." The
bill must be calculated to deceive, according to the capacity of him
to whom it is presented to detect its falsity under the circumstances;
whether or not it is, is a question for the jury. (p. 288.)
FALSE PRETENSES. — If the Facts Recited in an Indictment
for obtaining money under false pretenses show upon their face
that they are capable of defrauding, and it is charged that the de-
fendant by them did intentionally and wickedly defraud the prose-
cuting witness, it is unnecessary specifically to charge that they
were capable of defrauding, (p. 288.)
Ed. Daum, commonwealth attorney, N. B. Hays, attorney
general, and Loraine Mix, for the appellant.
®** O'REAR, J. This appeal involves the suflficiency of
an indictment against appellee, charging him with obtain-
ing money and property under false pretenses: Ky. Stats.
1903, sec. 1208. A demurrer was sustained to the indict-
ment. It is charged that appellee fraudulently, knowingly
and with the wicked intent to deceive and defraud one Will-
• iam C. French, induced the latter to part with two dollars
and fifty cents lawful money of the United States which be-
longed to said French, in exchange in part for a ten dollar
bill of the Confederate States of America. The particulars
of the tran.saction were set forth in the indictment, the sub-
stance of which is that appellee and said French swapped
horses, it being agreed that appellee was to pay French seven
dollars and fifty cents to boot. The horses were exchanged,
***® and appellee handed French a ten dollar Confederate
bill, with the remark: "Give me two dollars and fifty cents;
here is a ten dollar bill." French, believing it was a bill
for ten dollars of lawful money — its appearance being quite
similar to the treasury silver certificates for that sum — gave
appellee the two dollars and fifty cents, and accepted the
286 American State Reports. Vol. 115. [Kentucky,
Confederate bill as good money, without knowledge or sug-
gestion that it was what it was. It is charged that appellee
knew at the time that it was a Confederate bill, and intended
by his words and conduct to deceive French into believing it
was a bill of lawful currency, and did so deceive hira. It is
said that the indictment was held to be bad because there
was no specific statement by appellee that the bill was United
States currency.
The statute is (section 1208) : "If any person by false pre-
tenses, statement or token, with intention to commit a fraud,
obtain from another money, property or other thing which
may be the subject of larceny, .... he shall be confined in
the penitentiary for not less than one nor more than five
years." It seems to be conceded that all the conditions of
the statutes are satisfied except that of the false pretense,
statement, or token. It is the deceit, falsely and fraudu-
lently superinduced by a beneficiary, whereby the latter ob-
tains money or property of value, that is sought to be re-
pressed by the statute. When one intentionally creates a be-
lief as to an existing fact which is false, and with the intent
to defraud another of his property, anl does so, it cannot
matter whether the erroneous belief was induced by words
or acts, or both. The mischief may be done as effectually by
one method as by another. Some words, by their common em-
ployment, may imply other words not spoken. A proposi-
tion to sell an article for ten dollars, without designating the
currency in which the price is to be paid, in this country im-
plies that the seller ®^* is to get lawful money or currency
of the United States of America. When the buyer agrees to.
pay the price, and offers a bill in pajTnent purporting to be
a bill of the currency of the circulating medium of the coun-
try, it is implied that he thereby represents that it is of that
currency, if nothing to the contrary is stated. This amounts
to an assertion or representation by conduct, which may be
as efficacious to convey an idea, or to constitute the basis of
a rea.sonable belief, as though exact and appropriate words
had been used. Words are used to express ideas. Signs
might be used instead. Conduct that conveys necessarily
the same idea, and intended to do so, is but a substitute
for the words or signs expressive of it. We have no doubt
but that the use of a worthless bill, pretending it is valid,
and with the intent to defraud, is a false token under the
statute : State v. Pattilo, 11 N. C. 348 ; State v. Stroll, 1 Rich.
Jan. 1905.] Commonwealth v. Beckett. 287
244; State v. Grooms, 5 Strob. 158. It may be said that
a false representation or token is not within the statute "un-
less calculated to deceive persons of ordinary prudence and
discretion": 2 Wharton on Criminal Law, 2129; Common-
wealth V. Grady, 13 Bush, 285, 26 Am. Rep. 192. This is
true only in a limited sense, for the statute was not designed
to protect only the ordinarily wary and prudent, who, in
spite of their vigilance, might be overreached by the clever
rogue, but must have been aimed at all scoundreldom, who,
by false statements or tokens, succeeded in hoodwinking the
unwary, or even the foolish, into parting with their prop-
erty. The statute has a twofold purpose: 1. To protect the
owner of property against cheats; 2. To punish the cheater.
It cannot be said that the law is partial to "persons of or-
dinary prudence and discretion" in protecting them in their
property, whilst it leaves imprudent and silly persons as law-
ful prey for frauds. On ®** the other hand, in punishing
the wrongdoer, his motive and its results are the main sub-
jects of inquiry. Under this statute the wicked purpose — the
fraud — is equivalent to the same ingredient in theft. So is
the result the same. The distinguishing feature is, in theft
the owner does not intentionally part with the title and pos-
session of his property, while under this statute he does. It
would not do to say that to steal from a careless or impru-
dent person is not punishable, though the statutes against
larceny aim to protect the owner in the possession of his
property, as well as to punish the thief who purloins it.
Under the statute being considered the pretense or token
must be false. Where a token is used, it must be calculated
to deceive, according to the capacity of the person to whom
it is presented to detect its falsity under the circumstances.
A token that might be calculated to deceive a blind man, or
one in the dark, or a child, would not necessarily be a false
token when used upon one who could see, and who has ma-
ture judgment: Peckham v. State (Tex. Cr. App.), 28 S. W.
532. Nor would absurd or irrational pretenses, not ordinarily
calculated to deceive one of the intellectual capacity and dis-
cretion of the person upon whom it may have been practiced,
be sufficient, it seems: Woodbury v. State, 69 Ala. 242, 44
Am. Rep. 515; People v. Crissie, 4 Denio, 525. Or, where
the representation is as to the state of the title to real estate,
a record of which is accessible to the vendee, the representa-
tion, though false, cannot be said to have induced the ac-
288 American State Reports. Vol. 115. [Kentucky,
tion; for, as registration of deeds is provided for the ex-
press purpose of protectinf; purchasers of real estate, to
which they are presumed to have recourse for final informa-
tion concerning facts shown by them, and about the exist-
ence of which there need be no doubt, it cannot be said that
the vendee could have been ^^^ deceived by the oral repre-
sentations respecting the state of the title. This is the rea-
son supporting the decision in Commonwealth v. Grady, 13
Bush. 285, 26 Am. Rep. 192; while in Commonwealth v.
Haughey, 3 ]\Iet. 223, the facts were that Jones, the person
alleged to have been defrauded, really parted with nothing
upon the misrepresentation. Furthermore, it appears that
the misrepresentation was as to quality of a crop of tobacco —
a matter of opinion, not the subject of the statute. Whether
the false token is one calculated to deceive one of the capac-
ity and understanding and in the situation of the prosecut-
ing witness is a question of fact to be found by the jury:
Wagoner v. State, 90 Ind. 504. In People v. Court of Oyer
and Terminer, 83 N. Y. 436, it is laid down distinctly that
the pretenses must be calculated to deceive, leaving that to
be determined by the jury, and, if the pretense was capable
of defrauding, it is sufficient. There may be a state of facts
where it would not be apparent upon their mere recital that
they alone were capable of defrauding, and it may be the
better practice in such cases to aver in the indictment that
they were capable of defrauding, as well as did defraud, the
prosecutor. But where the facts recited show upon their face
that they are capable of defrauding, and it is charged that
the defendant by them did intentionally and wickedly defraud
the prosecuting witness, it seems to us to be useless to spe-
cifically charge that they were capable of defrauding. It
is a matter of common and general knowledge that a Con-
federate ten dollar bill is quite similar in appearance to
treasury silver certificates of that denomination, and that it
is entirely capable to defraud credulous persons by its use
under many circumstances. Whether there were peculiar
circumstances in the case at bar to rebut the probability of
such an effect upon the prosecuting witness is more properly
evidential matter by **^ way of defense. The facts alleged
in the indictment bring the transaction clearly within the
statute, and the demurrer should have been overruled.
Judgment reversed, and cause remanded for further pro-
ceedings not inconsistent herewith.
Jan. 1905.] Cincinnati etc. Ry. Co. v. Marks. 2S9
The Crime of Obtaining Money under False Pretenses is the subject
of a note to Barton v. People, 25 Am. St. Rep. 378. To constitute
this crime, it is necessary that the false pretense should have de-
ceived: Chauncey v. State, 130 Ala. 71, 89 Am. St. Eep. 17. How-
ever, a conspiracy to defraud by false pretenses may exist, although
the means employed are not calculated to deceive persons of ordi-
nary intelligence: People v. Oilman, 121 Mich. 187, 80 Am. St. Eep.
490.
CINCINNATI, NEW ORLEANS AND TEXAS PACIFIC
RAILWAY COMPANY v. :MARRS.
[119 Ky. 954, 85 S. W. 188.]
BAILBOADS — Duty to Dnrnken Trespasser. — Where the
yardmaster and foreman of the switch crew of one railroad com-
pany see a passenger of another railroad company aroused from a
drunken stupor and put off a car on the depot platform at night,
and a few minutes- later find him drunk and asleep between the
tracks in their switchyard, and thereupon arouse him and start
him walking through tue network of tracks and switches toward
the highway, and a short time thereafter he lies down and goes to
sleep on one of the tracks, where he is struck by their switch en-
gine, the railroad company is answerable for his injuries, (pp. 293,
294.)
Thornton & Kerr and John Galvin, for the appellant.
Matt O'Doherty and Hunt &.Hunt, for the appellee.
»»« BARKER, J. William H. Marrs, a resident of Lex-
ington, Kentucky, on a visit to Louisville, became intoxi-
cated, and while in this condition his friends purchased a
ticket for him over the Louisville Southern Railway to his
home, put him on the train, and gave his ticket to the con-
ductor. When the train arrived at the depot in Lexington
he was in the smoker, asleep, with his head and arm hanging
out of the window. One of the brakemen aroused him, and
required him to go from the car to the platform of the sta-
tion. The Louisville Southern Railway uses the depot of the
Cincinnati, New Orleans and Texas Railway Company at
Lexington. Near this depot are the private switchyards of
the latter corporation. These yards are perhaps more than
half a mile ^'^'^ in length, and covered with the network of
tracks and switches; there being, probably, as many as
eighteen or twenty separate tracks. The train on which
Marrs was a passenger arrived at the Lexington depot at
about 10:45 P. M. Within thirty or forty minutes after the
Am. St. Rep., Vol. 115—19
290 American State Reports. Vol. 115. [Kentucky,
drunken passenger left the ear he was found by the yard-
master, Savage, asleep in the switchyard between tracks Nos.
3 and 4. Appellant's switching crew, with their engine, com-
ing along at this time, were stopped by the yardmaster, who
called to some of them to come and assist him in arousing
the sleeping man. This was responded to by James H. Joyce
and John Haney, who left the engine and went to where
Marrs was lying. Joyce shook the sleeping man who looked
up, and, with an oath, said: "Kid, did you expect to find a
man with his head cut off?" To which Joyce replied: "No,
but if you lie around here in this way, you will have your
head cut off. ' ' Whereupon Marrs got upon his feet, * * hitched
up his trousers," and walked off in the direction of the Ver-
sailles pike, cursing, as he went, the men who had disturbed
him. The switching crew then went to their supper (a mid-
night lunch), and, returning in an hour, started with their
engine along one of the tracks in the switchyard for the pur-
pose of getting a car of stock which was to be transferred
from one track to another. The engine was being backed,
with several of the crew in front on the tender, keeping a
lookout for the car of stock which they intended to shift.
While proceeding at the rate of six or seven miles an hour,
the engine ran over Marrs, who had again fallen asleep (this
time on the track), inflicting injuries from which he in a
few days died. To recover damages for the death thus occa-
sioned, this action was instituted by the administratrix of his
estate against both the Louisville Southern Railway and ap-
pellant. A trial ^^^ resulted in peremptory instruction be-
ing awarded in favor of the Louisville Southern Railway, and
a verdict and judgment against appellant for the sum of four
thousand five hundred dollars, of which it now complains.
Was appellant entitled to a peremptory instruction? This
is the substantial question presented in the record.
There was no relation of pa.ssenger and carrier between
Marrs and appellant, and therefore his entrance into the
private switchyard of the corporation made him a trespasser;
and, if those in charge of the switch engine had run it over
him when he was first found in the yard, then, undoubtedly,
appellant would have been entitled to a peremptory instruc-
tion under the evidence as adduced on the trial, because, he
being a trespasser, its employes owed him no duty, except
to refrain, after his peril was discovered, from injuring him,
Jan. 1905.] Cincinnati etc. Ry. Co. v. Marks. 291
if this could be done by the exercise of ordinary diligence.
But having found him drunk and asleep in the yard, could
they arouse him, and start him wandering in the dark, through
the network of switches and tracks, and then say, when they
afterward ran over him, that they owed him no lookout duty
because he was a trespasser? We cannot sanction so cruel
and inhuman a principle. Both Savage, the yardmaster, and
Haney, the foreman of the switching crew, saw Marrs on
the Louisville Southern train when it reached the depot, and
knew that he was a passenger thereon and drunk. "When
they saw him in the switchyard, asleep, and aroused him,
they recognized him as the man they had seen on the train.
They knew he was still intoxicated, and the fact that within
so short a time he was found by them asleep in the switch-
yard was all the evidence that reasonable men required to
know that, owing to his condition, he was unable to take care
of himself, and more than probably was dazed and lost.
Under these circumstances, it was ^'^^ their duty either to
see him safely out of the yard or, in default of this, to exer-
cise at least ordinary care to avoid injuring him in moving
the switch engine about where, under the circumstances, it
was reasonable to anticipate his presence. Haney and Sav-
age, within forty minutes before they found Marrs asleep in
the switchyard, had seen him asleep on the train. They had
seen him aroused from his stupor by the brakeman and put
upon the platform, and when they found him, within so
short a time after being aroused by the brakeman, again in
a stupor in the switchyard, they were bound to know that
his condition was such as to render him incapable of taking
care of himself; and, this being true, as we have before said,
common humanity forbade them simply to arouse him from
where they found him asleep, and start him on another walk,
merely to sink into a torpor in the yard a second time. In-
deed, the action of these men was a positive injury to the de-
cedent, for, as he lay between tracks Nos, 3 and 4, he was
theli, at least, safe from being run over. Wlien they aroused
him from this position, and started him on his walk in the
dark through the yards, they subjected him to the perilous
chance, when again overcome by the liquor, of assuming a
position of greater danger than he was occupying at first.
This chance subsequently became a reality. When the un-
fortunate man was overcome a second time in the yard, he
292 American State Reports. Vol. 115. [Kentucky,
went to sleep on one of the tracks instead of between them.
Under the circumstances, the switching crew should have done
either more or less than they did, so far as the safety of the
deceased was concerned.
We fully concede that Marrs being drunk did not make
him any the less a trespasser when he first went into the yard
of the corporation, and his intoxication added no new duty
from it to him then. But when its servants actually dis-
covered ****** him, trespasser though he was, they owed him
the duty to refrain from injuring him, and this duty was as
comprehensive as the helplessness of his condition demanded
to insure his safety from injury by them. The fact that
his senses were overcome by liquor was demonstrated by
what the servants of the corporation actually knew at the
time they found him in the yard. It was no longer a ques-
tion of surmise, but one of positive knowledge. That he was
not a tramp awaiting an opportunity to steal a ride they
knew from the fact that they had seen him arrive in Lexing-
ton as a passenger on the Louisville Southern train, and we
think we have a right to assume, from all the evidence in
the case concerning Marrs, that his appearance indicated him
to be what he really was — an unfortunate man on a spree.
The servants of the corporation, after finding him in the
yard, could not shut their eyes and close their faculties to
what must have been apparent to the most casual observer,
and say that, under the circumstances surrounding Marrs,
they owed him no duty, and could after that treat him as
a trespasser. They knew he was intoxicated and in the yard,
and, having seen him twice before within an hour in a drunken
stupor, they had no right to assume that when left to him-
self he would not again sink into a torpor, as he had done
twice before.
This case comes within the principle of Fagg's Admr. v.
Louisville etc. R. Co., Ill Ky. 30, 23 Ky. Law Rep. 383, 63
S. W. 580, 54 L. R. A. 919. In that case the employes of
the railroad knew a drunken man had entered a deep cut
through which a train was soon expected. They knew that,
if this train passed while he was in this cut, his life would be
in peril. With this knowledge they permitted the train to
run into the cut without informing those in charge of the
perilous position of the unfortunate man. He was killed,
'*®^ and we held the corporation responsible. The principle
Jan. 1905.] Cincinnati etc. Ry. Co. v. Marks. 293
in that case is identical with that at bar, although the facts
on the surface are somewhat variant. The servants of appel-
lant knew that Marrs was in the yard in a drunken condi-
tion. They had seen him asleep in a stupor. They were
bound to know that the chances were that, as soon as the
stimulus of their presence was removed, he would again suc-
cumb to the benumbing influence of the liquor with which
he was intoxicated. This being true, they owed him one of
two alternative duties — either to see him safely out of the
yard, which common humanity required, or, failing in this,
to watch out for him as the engine was moved about in the
corporation's business. The case of Brown's Admr. v. Louis-
ville etc. R. Co., 103 Ky. 211, 19 Ky. Law Rep. 1873, 44 S.
W. 648, does not support appellant. In that case the servants
of the corporation had no right to suppose, after the drunken
passenger was removed from the train at London, he would
seek the railroad track as a bed. In this case the employes
of appellant knew that Marrs was likely to do this, for they
had just aroused him up from such a position. Nor is the
case of Virginia M. R. R. v. Boswell's Admr., 82 Va. 932,
7 S. E. 383, authority in favor of appellant's claim to a
peremptory instruction. In that case the trackwalker found
the trespasser lying on the railroad track. He accosted him,
whereupon the man aroused up on his elbow, and apparently
assented, when told to get off the track, as a train would pres-
ently be coming along. The corporation's servant did not
know that the trespasser was drunk, or in any other way
physically incapacitated; the court on this point stating:
"There was nothing in the conduct of Boswell which could
lead Harrison to suspect that he was drunk or physically dis-
abled. When accosted by Harrison, °®- and told that he
must get up and get off the track — that a train was coming
presently — he (Boswell) got partly up, leaned on his elbow,
and as.sented to the suggestion in such a manner as to con-
vince Harrison that he understood him; and, under these cir-
cumstances, HarrLson had the right to presume that Boswell
would take such measures to protect himself from danger as
rea.sonable persons would be sure to take under such circum-
stances." In the ease at bar, appellant's servants knew Marrs
was drunk, and the circumstances surrounding him were such
as would lead any reasonably prudent person to believe that
he was incapable of caring for himself. Under these eircum-
294 American State Reports. Vol. 115. [Kentucky.
stances, we think they, after having discovered his perilous
condition, owed him the duty of refraining from injuring him
by exercising the care for his safety which we have indicated.
The trial court correctly overruled appellant's motion for
a peremptory instruction, and the instructions given were
as favorable to the corporation as it merited. Perceiving
no error in the record prejudicial to appellant's substantial
rights, the judgment is affirmed.
Petition for rehearing by appellant overruled.
Drunkenness Never Excuses a person for a failure to exercise the
measure of care and prudence which is due from a sober man under
the same circumstances. Drunkenness does not exempt a person from
responsibility for contributory negligence: Nash v. Southern Ry. Co.,
136 Ala. 177, 96 Am. St. Eep. 19; Bageard v. Consolidated Traction
Co., 64 N. J.'L. 316, 81 Am. St. Eep. 498. Therefore, a railroad com-
pany is not liable for the injury on its tracks of a drunken trespasser,
in the absence of willful or wanton conduct: Nash v. Southern Ry.
Co., 136 Ala. 177, 96 Am. St. Rep. 19. As to the duty of a railroad
company to see that an intoxicated person does not get upon the tracks
and thus expose himself to danger, see Bageard v. Consolidated Trac-
tion Co., 64 N. J. L. 316, 81 Am. St. Eep. 498.
CASES
IN THE
SUPKEME COURT
OP
MAINE.
STATE V. FREDERICKSON.
[101 Me. 37, 63 Atl. 535.]
STATUTES — Construction. — Two chapters of the Eevised
Statutes of a state relating to the same subject, though having no
immediate connection with each other, should be construed together.
Hence one chapter of such statutes enumerating what are to be
deemed intoxicating liquor must be construed in connection with the
words "intoxicating liquor" as used in another chapter of such stat-
utes, (pp. 297, 298.)
INTOXICATING LIQUORS— Construction of Statute.— A stat-
ute enumerating certain liquors, including "cider," when kept and
deposited with intent to sell them for tippling purposes, or as a bever-
age, and declaring them to be intoxicating, was intended to include
and does include "cider," when kept and sold for tippling purposes
or as a beverage, even though such cider may be unfermented and non-
intoxicating in fact. (pp. 299, 300.)
INTOXICATING LIQUOB — Statutory Construction. — ^When it
ap[>ears that a certain liquor comes within the scope of a forbidden
statutory enumeration as intoxicating, that moment its character be-
comes fixed by law, and its nonintoxicating character, as a matter of
fact, becomes entirely immaterial with respect to the application of
the statute, (p. 300.)
INTOXICATING LIQUOIIS— Constitutional Law.— The consti-
tutional right of the state legislature to regulate or prohibit the sale
and keeping of intoxicating liquors, and to declare certain liquors in-
toxicating within the meaning of the law governing intoxifiating
liquors, irrespective of the intoxicating character of such liquors as
a matter of fact is a legal exercise of the police power of the state
and not in contravention of either the state or United States coistitu*
tions. (pp. 302, 303.)
W. C. Eaton, county attorney, for the state.
M. P. Frank, for the defendant.
*• SPEAR, J. This case covers two actions, one involving
a complaint for keeping a tippling-shop, and the other an
indictment for maintaining a common nuisance. Both the
(295)
296 American State Reports, Vol. 115. [Maine,
complaint and the indictment are based upon the same state
of facts, wherein it is admitted that the respondent during
the period covered by the complaint and the indictment was a
citizen of the United States and a licensed victualer, and
kept a restaurant on India street in Portland, in the county
of Cumberland, and was accustomed to keep in his restaurant
cider, with intent to sell the same as a beverage and for
tippling purposes, and that frequently during that period
he there sold cider to be drank on the premises, and the same
was so there sold and drank, but said cider was unfermented
and nonintoxicating in fact.
With respect to the complaint the defendant requested the
instruction that section 40 of chapter 29 of the Revised Stat-
utes did not apply to unfermented, nonintoxicating cider, and
that the having of '*^ such cider on deposit with intent to sell
the same as a beverage and for tippling purposes constituted
no offense. Also, if it should be found that section 40 did
apply to the keeping and sale of such cider, imposing penal-
ties of fine and imprisonment for the violation thereof, its
provisions are contrary to and in violation of section 1, article
1, of the declaration of rights in the constitution of Maine,
and of the fourteenth amendment of the constitution of the
United States, and to that extent are null and void.
With respect to the nuisance indictment, the defendant re-
quested the instruction that if the respondent kept and main-
tained a place used for the sale or keeping for sale, for
tippling purposes or as a beverage, of cider, and where cider
was kept and deposited with intent to sell the same for
tippling purposes or as a beverage, he would not be guilty of
maintaining a nuisance under provisions of sections 1 and 2,
chapter 22 of the Revised Statutes, unless such cider was in
fact intoxicating, and that the keeping and maintaining of
such place used for the sale or keeping for sale or for selling
of unfermented nonintoxicating cider only, would not con-
stitute the crime of keeping and maintaining a nuisance. The
other requested instruction raised the same constitutional ques-
tions involved in the instruction with reference to the com-
plaint.
The two cases can be construed together, inasmuch as if it is
held that the enumeration of intoxicating liquors specified
in section 40 of chapter 29 of the Revised Statutes, does not
apply to the intoxicating liquors referred to in sections 1 and
2, chapter 22 of the Revised Statutes, then that is the end of
Dec. 1905.] State v. Frederickson. 297
the nuisance case and the exceptions must be sustained. If,
on the other hand, it is held that said enumeration does apply,
then the two cases with respect to all the points raised fall
within the same category and involve the simple questions,
whether the keeping and selling of unfermented, nonintoxicat-
ing cider as a beverage and for tippling purposes is inhibited
by chapter 29, and if so inhibited, if said chapter is constitu-
tional.
We will therefore determine, first, whether the enumeration
of intoxicating liquors found in section 40, chapter 29, shall
be held to define the meaning of the words "intoxicating
liquors," as used in sections 1 and 2, chapter 22, relating to
nuisances. To determine "** this proposition, we assume, ar-
guendo, that unfermented, nonintoxicating cider, kept for
sale and sold as a beverage and for tippling purposes comes
within the above enumeration of liquors classed as intoxicat-
ing. The question raised by this exception whether such
cider does, as a matter of law, come within the purview of
section 40 will be discussed later.
The proposition before us has been lately considered, and
we think fully settled, in the recent case of State v. O'Con-
nell, 99 Me. 61, 58 Atl. 59. Like the case at bar, it arose
under an indictment for maintaining a nuisance. The re-
spondent was indicted for selling "uno beer," a malt liquor.
The question involved in the trial and under the exceptions
was not whether this beer was in fact intoxicating, but, re-
gardless of this fact, whether it came within one of the classes
of liquors denominated intoxicating under section 40, chapter
29.
The court by necessary implication squarely held that, al-
though one of the indictments was under chapter 17 of the
Revised Statutes of 1883, now chapter 22, the question of
whether the liquor was to be regarded as intoxicating was
to be determined by reference to chapter 27 of the Revised
Statutes of 1883, now chapter 29. In deciding the character
of the liquor the opinion says: "Revised Statutes of 1883,
chapter 27, section 33, amounts to a prohibition of the sale
of malt liquor." But malt liquor is not mentioned under
chapter 17, yet being classed as intoxicating under chapter
27, it was held to be intoxicating under chapter 17.
But under the established rules of construction the two
sections of the statutes should be con.strued together. Both
sections are part of the same body of revised laws. We see
298 American State Reports, Vol, 115. [Maine,
no good reason why chapters of the same statute should not
be construed with reference to each other as well as sections
of the same chapter. Chief Justice Shaw, in Commonwealth
V. Coding, 3 Met. 130, says : " In construing the Revised Stat-
utes, we are to bear in mind that the whole were enacted at
one and the same time, and constitute one act; and then the
rule applies, that in construing one part of a statute, we are
to resort to every other part to ascertain the true meaning of
the legislature in each particular provision. This rule is
peculiarly applicable to the Revised Statutes, in which, for
the convenience of analysis and classification of subjects, pro-
visions are sometimes widely separated from each '*^ other
in the code, which have so immediate a connection with each
other that it is quite necessary to consider the one, in order
to arrive at the true exposition of the other."
The suggestion in the above quotation that ' * the whole were
passed at one and the same time" was not intended, we ap-
prehend, to in any degree limit the rule of comparing stat-
utes, whenever enacted, in pari materia — a principle well es-
tablished by our own as well as other courts: Gould v. Ban-
gor etc. R. R., 82 Me. 122, 19 Atl. 84; Cotton v. Wiscasset
etc. R. R. Co., 98 Me. 511, 57 Atl. 785; Commonwealth v.
Sylvester, 13 Allen, 247.
Black on Interpretation of Laws, page 6, in discussing this
principle says: "The phrase 'statute in pari materia' is ap-
plicable to private statutes or general laws made at different
times, and in reference to the same subjects So, also,
all the laws of the state, whenever passed, relating to the sub-
ject of the regulation of the liquor traffic, are in pari ma-
teria. ' '
Commonwealth v. Shea, 14 Gray, 386, is a case precisely
analogous in principle to the phase of the case now under
consideration, and declares that "the provisions of Statutes
of 1855, chapter 405, section 1, by which ' all buildings, places
or tenements used for the illegal sale or keeping of intoxicat-
ing liquors are declared to be common nuisances, and are to
be regarded and treated as such,' is to be construed by refer-
ence to the Statutes of 1855, chapter 215, in pari materia,
to which it is necessary to refer in order to ascertain what
intoxicating liquors it is illegal to sell; and the first section
of which declares that 'ale, porter, strong beer, lager beer,
cider and all wines, shall be considered intoxicating liquors
within the meaning of this act. Proof of sales of cider was,
therefore, competent in support of this indictment. ' ' '
Dec. 1905.] State v. Frederickson. 299
State V. Hnghes, 16 R. I. 403, 16 Atl. 911, is a case also
directly in point, and holds that statutes, although enacted
at different times, if they have a common object and are parts
of one system for the punishment of illegal selling and keep-
ing of liquors, are to be construed together: See, also, United
States V. Freeman, 44 U. S. 556, 11 L. ed. 724; Linton's Ap-
peal, 104 Pa. 228 ; United Soc. v. Eagle Bank, 7 Conn. 456 ;
State V. Gerhardt, 145 Ind. 439, 44 N. E. 469, 33 L. R. A. 313.
Our conclusion is that the proposition is well settled both
by the ^^ decisions and by the rules of statutory construc-
tion that the enumeration of liquors declared to be intoxi-
cating, contained in section 40 of chapter/ 29 of the Revised
Statutes, is referred to by, and was intended to include, the
words "intoxicating liquors" as used in section 1 of chapter
22 of the Revised Statutes. It is therefore manifest that if
unfermented and nonintoxicating cider is found to be an in-
toxicating liquor within the definition laid down in section
40, chapter 29, it is also an intoxicating liquor within the
meaning of sections 1 and 2 of chapter 22, and if kept for
sale and sold in violation of said sections, the premises where
80 kept would be subject to indictment as a nuisance.
This brings us to the consideration of the second proposi-
tion, whether the enumeration of liquors declared to be in-
toxicating, contained in section 40 of chapter 29, was intended
to include cider which is kept and deposited with intent to
sell the same for tippling purposes or as a beverage, which is
unfermented and nonintoxicating in fact. If it is found to
be 80 included, then both the complaint and indictment are
sustainable unless it appears that section 40, with respect to
the kind of cider herein specified, is in contravention of the
state or federal constitutions. Section 40 declares that ' ' wine,
ale, porter, strong beer, lager beer or other malt liquors and
cider, when kept and deposited with intent to sell the same
for tippling purposes, or as a beverage, as well as distilled
spirits, are declared intoxicating within the meaning of this
chapter." The liquors above enumerated are declared intox-
icating by law.
In determining whether or not a liquor is to be regarded
as intoxicating under this enumeration it is entirely immate-
rial whether it is intoxicating in fact. As was well said in
State V. O'Connell, 99 Me. 61, 58 Atl. 59: "It is not for the
jury to revise the judgment of the legislature and determine
whether liquor is or is not in fact intoxicating." When it
300 AMERiCiVN State Reports, Vol. 115. [Maine,
appears that a liquor comes within the scope of the forbidden
enumeration, that moment its intoxicating character becomes
fixed by law, and its nonintoxicating character, as a matter
of fact, becomes entirely immaterial with respect to the ap-
plication of the statute: State v. Piche, 98 Me. 348, 56 Atl.
1052; State v. O'Connell, 99 Me. 61, 58 Atl. 59; Common-
wealth V. Bios, 116 Mass. 56; Commonwealth v, Anthes, 12
Gray, 29; Commonwealth v. Brelsford, ^'^ 161 Mass. 61, 36
N. E. 677; Commonwealth v. Snow, 133 Mass. 575; State v.
Intoxicating Liquors, 76 Iowa, 243, 41 N. W. 6, 2 L. R. A.
408 ; State v. Guiness, 16 R. I. 401, 16 Atl. 910.
Does unfermented, nonintoxicating cider fall within the
above rule? Unless we read into the statute enumerating
the kinds of prohibited liquors some adjective modifying the
word "cider" that shall have the effect of differentiating be-
tween intoxicating and nonintoxicating cider, then it is evi-
dent that both cases at bar come, by the express terms of the
statement of facts, within the prohibition of the respective
statutes under which they are brought.
We do not feel authorized to modify the statutes by the in-
terpolation of any such adjective. It is not the province of
the court to legislate. Had the legislature, during all the
years that the prohibitory statutes have been upon the books,
intended that any differentiation should be made with re-
spect to new and old cider, they unquestionably would have
seen that it was effectuated by proper legislation. A mo-
ment's reflection will readily suggest that such legislation
has been withheld advisedly. Unfermented, nonintoxicating
cider by the simple lapse of time becomes intoxicating. There
is a dividing line somewhere in the course of time over which
the same cask of eider, in the process of fermentation, passes
from a nonintoxicating to an intoxicating liquor. But where ?
To locate this line is to nullify the statute. Hence the ab-
sence of legislation. This view is sustained not only by rea-
son but by authority.
State V. Spaulding, 61 Vt. 505, 17 Atl. 844, is precisely in
point. It involved the construction of a statute which pro-
vides that "no person shall sell or furnish cider or unfer-
mented liquor at or in a victualing-house, tavern, grocery-
shop, cellar or other place of public resort." The point
raised in this case is identical with that raised in the cases
before us. The court say: "The only prohibition as to cider
is at the places specified in the sixth paragraph, but not there
Dec. 1905.] State v. Frederickson. 301
or anywhere in the statute is there any word qualifying the
kind of cider prohibited at such places. The term used is
"cider." It is said that the juice of apples is not cider until
it is fermented. This is perhaps technically correct, but not
in popular understanding. The apple juice when it comes
from the cider press is immediately and universally called
"cider" by the people generally. The term should be '*'* con-
strued according to such universal use and understanding.
Presumably no class of men understand better the difference
between sweet and sour or new and old cider than our legis-
lators, because they are mostly farmers who make the cider,
and those who are not living in the cider-producing state
could hardly claim ignorance on so familiar a subject; yet
in their prohibitory enactment they ignore all distinction,
and simply say ' ' cider. ' ' The prohibition is limited to certain
specified places, and such as indicate an intent only to pre-
vent cider selling and drinking at public resorts, not to inter-
fere with the manufacturer who does not make his establish-
ment a public resort for drinking purposes like the saloon.
It is well known, also, that the fermentation of cider, and
the change from sweet to sour, so as to become more or less
alcoholic, greatly varies — sometimes being very rapid, at
other times very slow. It would be practically impossible to
prove whether a particular mug of cider that had been drank
was intoxicating, and to require it would therefore render the
statute nugatory. In view of all these facts, we think it
would be more likely carrying out the legislators' intent to
construe the enactment according to its plain and common
meaning, rather than to interpolate qualifying terms, and
hold that the legislature meant something different from what
it said. We therefore hold that the prohibition as to the
places named is absolute, regardless of the stage of fermenta-
tion or the intoxicating quality of the cider."
Our conclusion is that the enumeration of liquors declared
to be intoxicating and contained in section 40 of chapter 29
of the Revised Statutes, was intended to include, and does. in-
clude, cider when it is kept and deposited with intent to
sell the same for tippling purposes or as a beverage, even
though such cider may be unfermented and nonintoxicating
in fact.
The third question raised by the exceptions is whether sec-
tion 40, with respect to cider that is unfermented and nonin-
toxicating in fact is in violation of section 1 of article 1 of
302 American State Reports, Vol. 115. [Maine,
the constitution of the state of Maine. This involves the con-
sideration of, first, the constitutional right of the legislature
to regulate or prohibit the sale and keeping of intoxicating
liquors ; and second, the constitutional right of the legislature
to declare certain liquors intoxicating within the '*® mean-
ing of the law governing intoxicating liquors, irrespective of
the intoxicating character of such liquors as a matter of fact.
Both of these questions are so universally answered in the
affirmative by the decisions in our own state and those of
other states under similar constitutional provisions that it is
no longer a question for argument or even of doubt: Lunt's
Case, 6 Me. 412 ; Gray v. Kimball, 42 Me. 299 ; State v. Miller,
48 Me. 576; State v. O'Connell, 99 Me. 61, 58 Atl. 59; State
V. Roach, 75 Me. 123. There are also numerous cases in other
states to the same effect.
The affirmative of the second question is equally well es-
tablished: State V. O'Connell, 99 Me. 61, 58 Atl. 59; Common-
wealth V. Anthes, 12 Gray, 29; Commonwealth v. Brelsford,
161 Mass. 61, 36 N. E. 677 ; State v. Guiness, 16 R. I. 401, 16
Atl. 910; State v. Gravelin, 16 R. I. 407, 16 Atl. 914; State
V. Intoxicating Liquors, 76 Iowa, 243, 41 N. W. 6, 2 L. R. A.
408.
We now come to the last proposition raised by the excep-
tions, and that is, whether section 40, with respect to the sale
of cider which is unfermented and nonintoxicating, in fact
is in violation of the fourteenth amendment to the constitu-
tion of the United States. And here two questions must be
considered: First, whether this provision of the federal con-
stitution is violated by a state law regulating or prohibiting
the sale and keeping for sale of intoxicating liquors; and
second, whether it is violated by a state law declaring cer-
tain liquors intoxicating, within the meaning of the law gov-
erning intoxicating liquors, irrespective of the intoxicating
character of such liquors as a matter of fact. The answer to
both these questions is that a state law regulating or prohib-
iting the selling or keeping for sale of intoxicating liquors
is a legal exercise of police power, and is not in contravention
of the fourteenth amendment to the federal constitution.
This has been repeatedly held and can be no longer an open
question : United States v. Ronan, 33 Fed. 117, In re Hoover,
30 Fed. 51; Bartemeyer v. Iowa, 85 U. S. (18 Wall.) 129, 21
L. ed. 929 ; Kidd v. Pearson, 128 U. S. 1, 9 Sup. Ct. Rep.
6, 32 L. ed. 346 ; Boston Beer Co. v. Massachusetts, 97 U. S.
Dec. 1905.] Bibber v. Cakville. 303
25, 24 L. ed. 989 ; Mugler v. Kansas, 123 U. S. 623, 8 Sup.
Ct Rep. 273, 31 L. ed. 205; License Cases, 46 U. S. 504, 12
L. ed. 256 ; Foster v. Kansas, 112 U. S. 201, 5 Sup. Ct. Rep.
8, 97, 28 L. ed. 629; Eilenbecker v. Plymouth County, 134
U. S. 31, 10 Sup. Ct. Rep. 424, 33 L. ed. 801.
Exceptions overruled.
The Legislative Department of the State, in the exercise of the
police power, ia vested with plenary power to regulate or absolutely
prohibit the sale of intoxicating liquors: Hart v. State, 87 Miss. 171,
112 Am. St. Rep. 437, and eases cited in the cross-reference note there-
to; Equitable Loan etc. Co. v. Edwardsville, 143 Ala. 182, 111 Am. St.
Eep. 34; but the principal case goes further and authorizes the legis-
lature to declare beverages to be intoxicating whether or not, as a mat-
ter of fact, they belong to that class. The language employed by the
court justifies the conclusion that the legislature has power to de-
clare pure milk or water to be intoxicating and therefore to prohibit
its use or sale. However well supported by authority this conclu-
sion may be, it is, upon principle, arrant nonsense. The judgment
of the court is, however, defensible, with respect to the liquor there
in question, on the ground that, as it is often intoxicating, the stat-
ute involved must be rendered practically inoperative unless all cider
be deemed to fall within its prohibition.
BIBBER V. CARVILLE.
[101 Me. 59, 63 Atl. 303.]
EQUITY JTJEISDICTION — ^Unilateral Mistake — Cancellation of
Contract. — While a court of equity may decree the rescission of a con-
tract for a mistake which is unilateral, the power should not be ex-
ercised against a person whose conduct has in no way contributed to
or induced the mistake, and who will gain no unconscionable advan-
tage thereby, (p. 305.)
EQUITY JURISDICTION— Belief Against Mistake.— Equity
does not relieve against mistakes which ordinary care would have pre-
vented. Conscience, good faith and reasonable diligence are necessary
to call a court of equity into activity, (p. 305.)
EQUITY JUEISDICTION— Relief Against Mistake.— If a per-
■on has acted in ignorance of facts merely, courts of equity will never
afford relief against mistake when actual knowledge would have been
obtained by the exercise of due diligence and inquiry, (p. 305.)
EQXHTY JURISDICTION— Mistake— CanceUation of Deed.— If
a grantor gives a warranty deed of land which he does not own, under
the mistaken belief that he has title thereto, equity will not cancel
the deed when there is no fraud, faLsehood, misrepresentation or con-
cealment on the part of such grantor, (p. 306.)
F. E. Southard, for the plaintiflP.
R. F. Springer, for the defendant.
304 American State Reports, Vol. 115. [Maine,
®** POWERS, J. Exceptions to a decree sustaining a de-
murrer to the plaintiff's bill and dismissinor the bill with costs.
In substance, the bill alleges that Denham Hall, being the
owner of a lot of land in Bowdoin containing about one hun-
dred acres, mortgaged the same to James M. Hall in 1866,
and to one Bibber in 1870. In 1880 James M. Hall assigned
the mortgage to Bibber, who in 1888 foreclosed the mort-
gage given to him and the foreclosure became absolute. Bib-
ber died in 1897, leaving as his sole heir at law the plaintiff,
who in 1902, conveyed the premises to the defendant by war-
ranty deed. At the time he gave the deed, the plaintiff be-
lieved that he had full title to the premises, but being after-
ward notified by the defendant that such was not the case,
he investigated the matter in the registry of deeds, and found
by the records therein that Bibber and Denham Hall, the
mortgagor, in 1873 conveyed about twenty-five acres of the
premises to one Cox, who, the plaintiff alleges he is informed
and believes, has ever since claimed to be in possession thereof.
Thereupon the plaintiff offered to return the consideration
and asked the defendant to reconvey. The defendant de-
clined to accept the money or reconvey, and brought suit for
covenant broken, which is now pending in court. Plaintiff in
his bill further offers to pay back the consideration received
from the defendant and also such other sum, if any, as jus-
tice and equity may require; and prays that the deed to the
defendant may be canceled and for an injunction against
the prosecution of said suit.
Does the plaintiff present a case for equitable relief? No
fraud, falsehood, misrepresentation or concealment on the
part of the defendant, the grantee, is alleged. There was no
mistake as to the terms ®^ of the deed. It expressed precisely
what the parties intended. There was a mistake on the plain-
tiff's part as to the title, resulting in the not uncommon case
of a man giving a warranty deed of land which he does not
own. Our attention has been called to no case where, under
the circumstances such as are here alleged, a deed has been
canceled on the prayer of the grantor.
"Defects in the title do not entitle the grantor to a re-
scission of the conveyance": 8 Am. & Eng. Ency. of Law, 2d
ed.. 222. We see no reason why the grantee, who acted in
good faith, is not entitled in good conscience to retain the
benefit of the contract which he made. The grantor, who re-
Dec. 1905.] BiBBEK v. Carville. 305
ceived the full price he set upon the property, has no equi-
table right to deprive him of it simply because he was mis-
taken as to his title and is liable upon his covenants. While
a court of equity may decree the rescission of a contract for
a mistake which is unilateral, the power should not be exer-
cised against a party whose conduct has in no way con-
tributed to or induced the mistake, and who will obtain no
unconscionable advantage thereby.
There is another reason why the plaintiff cannot prevail.
Equity assists only the vigilant. It does not relieve against
mistakes which ordinary care would have prevented. Con-
science, good faith and reasonable diligence are necessary^ to
call a court of equity into activity: Bonney v. Stoughton,
122 111. 536, 13 N. E. 833. The plaintiff claimed title as
heir at law of Bibber. The true state of the title appeared
on record. He does not allege that before the conveyance he
ever examined the records to ascertain what title at the time
of his decease Bibber had to the premises. After the convey-
ance he examined the records and found that Hall, the mort-
gagor, and Bibber, the mortgagee, had united in conveying
a part of the premises to Cox, who, the plaintiff says he is
informed and believes, has ever since, for more than thirty
years, claimed to be in possession of the part so conveyed.
The same investigation before he gave his deed would have
revealed to the plaintiff the extent of his title and corrected
his mistake. The bill alleges no reason whatever for the mis-
taken belief which he entertained. We cannot think it rea-
sonable diligence for a man to assume, without examination
of the records, that as heir at law he has a perfect title to
land conveyed to the intestate twenty-seven ®* years before
his decease, and of which it is not claimed he ever had pos-
session. "When a party has acted in ignorance of facts
merely, courts of equity will never afford relief when actual
knowledge would have been obtained by the exercise of due
diligence and inquiry": McDaniels v. Bank, 29 Vt. 230, 70
Am. Dec. 406. To relieve a party under such circumstances
would \ye to encourage culpable negligence : Durkee v. Durkee,
59 Vt. 70, 8 Atl. 490. In that case an examination of the
records in the town clerk's office would have given the com-
plainant the information. To the same effect is Deare v.
Carr, 3 N. J. Eq. 513. In a later case, Graham v. Berry-
man, 19 N. J. Eq. 29, the same court thus states the prin-
Am. St. Rep., Vol. 115—20
306 American State Reports, Vol. 115. [Maine,
ciple: "When a party ought in the exercise of ordinary pru-
dence to have made inquiry, and neglects to ascertain the
facts upon which his contract is based, in cases where it is
not necessary to repose confidence in the other party, or where
it is as much his duty as that of the other party with whom
he deals to know the facts, courts of equity will not relieve
against his own negligence."
In conclusion it is to be noted that this is not a case where
a court of equity is asked to reform a deed which, on account
of mutual mistake, does not represent the intention of the
parties. In this case the court is asked to cancel a deed which
expressed just what the plaintiff intended it should. The mis-
take was unilateral, on the part of the grantor alone, induced
by no fraud, falsehood, misrepresentation or concealment of
the grantee, relating to the grantor's own title, the true state
of which ordinary care and diligence on his part would have
revealed to him. It does not appear that the grantor will
obtain an unconscionable advantage by the deed, or that he
will not be fairly compensated for his liability on his cove-
nants by the purchase money which the grantee paid him.
Under these circumstances eqqity will not interfere to cancel
the deed and deprive the grantee of the benefit of a contract
fairly made.
Exceptions overruled.
Equity Will Grant Belief Against a Mistake of fact only when it is
of such a nature that it could not, with reasonable diligence, have
been avoided at the time. Relief will not be given against the results
of inexcusable negligence: Woodside v. Lippold, 113 Ga. 877, 84 Am.
St. Rep. 267. And the mistake, as a rule, must be mutual, in order to
warrant equitable relief: See the note to Williams v. Hamilton, 65
Am. St. Rep. 490.
A Mistake as to the ownership of a lot of land is a mistake of fact;
and an erroneous view of the legal effect of a deed in a chain of title
is a mistake against which equity will grant relief: See Livingstone
V. Murphy, 187 Mass. 315, 105 Am. St. Rep. 400, and cases cited in
the cross-reference note thereto.
Feb. 1906.] Ivers & Pond Piano Co. v. Allen. 307
IVERS & POND PIANO COMPANY v. ALLEN.
[101 Me. 218, 63 Atl. 735.]
TEOVEE AND CONVERSION — Second Mortgage of Chattels.
If a person first gives a mortgage on chattels to one who does not re-
cord it, and then gives another mortgage on the same chattels to a
person who records it, the giving of the second mortgage is an illegal
and unauthorized exercise of dominion over the chattel, inconsistent
with, and detrimental to, the rights of the first mortgagee and con-
stitutes a conversion of such chattels by the mortgagor without any
manual transfer of the property, (p. 308.)
W. R. Pattangall, for the plaintiff.
H. H. Gray and A, D. McFaul, for the defendant.
220 POWERS, J. Trover for a piano. In July, 1904,
the plaintiff delivered the piano to the defendant, who at
that time executed and delivered to the plaintiff a lease or
agreement in regard to the same, reciting that she had paid
ten dollars for rent until August 7, 1904, and was to pay
eight dollars a month for the use of the same, as long as she
hired the piano, until three hundred dollars and interest on
unpaid balances of that sum was paid, and that, if she ful-
filled her agreements till the payments of rent amounted to
three hundred dollars and interest, the piano should become
her property. This instrument was never recorded. The
defendant paid as agreed up to February, 1905, when the
piano was destroyed by fire. On December 28, 1904, the
defendant mortgaged the piano to one ]\Ieans, who recorded
his mortgage but never took possession of the property. The
presiding justice ordered a nonsuit and the plaintiff excepted.
By agreement of the parties if the nonsuit was incorrectly
ordered, the plaintiff is to have judgment for two hundred and
fifty dollars.
The so-called lease was in sub.stance a conditional sale, not
valid, except between the original parties, without record : Rev.
Stats., c. 114, sec. 5. The plaintift"s mortgage of the piano,
not simply of ^^* her interest in it, conveyed a good title to
Means. Before that mortgage and its record the plaintiff
had the full title to the property, subject to the defendant's
equity of redemption. After that the plaintiff had simply
the right to redeem from the Means mortgage. The fact that
the plaintiff saw fit to trust to the defendant's honor instead
308 American State Reports, Vol. 115. [Elaine,
of recording its lease gave her no right to sell or dispose of
the piano in any way that would injuriously affect its rights.
As against the defendant its claim was valid, and her mort-
gage of the property was an illegal and unauthorized exer-
cise of dominion over it, inconsistent with and detrimental to
the rights of the plaintiff. It requires neither citation nor
argument to show that such an act, carrying with it such
consequences, was a conversion of the property, without any
manual transfer or removal of it. Indeed, we know of no
accepted definition of a conversion which would exclude the
facts of this case. It is sometimes said that a mere paper sale
of a chattel without transfer of possession does not constitute
a conversion. That is true where the rights of the owner to
possession and his legal interest in and title to the chattel
remain unaffected and unimpaired by the sale. Not so here,
where the legal effect of the defendant's unlawful act de-
prived the plaintiff of its property and its right to possession
thereof.
This case is not to be confounded with cases against a mort-
gagor, who has sold only his interest in the mortgaged prop-
erty, as in White v. Phelps, 12 N. H. 382, or with cases against
a vendee of the mortgagor, as in Dean v. Cushman, 95 Me.
454, 85 Am. St. Rep. 425, 50 Atl. 85, 55 L. R. A. 959, who
obtains by his purchase a right of possession against all the
world except the mortgagee.
Exceptions sustained.
Judgment for the plaintiff for two hundred and fifty dol-
lars.
Conversion of Personal Property which will sustain an action of trover
is considered in the note to Boiling v. Kirby, 24 Am. St. Rep. 795. If
a mortgagor of chattels in possession sells and delivers the property,
he is guilty of conversion: Dean v. Cushman, 95 Me. 454, 85 Am. St.
Rep. 425. As to the right of a mortgagee to maintain an action for
conversion, see Johnson v. Wilson, 137 Ala. 468, 97 Am. St. Rep. 52,
and cases cited in the cross-reference note thereto.
March, 1906.] Purlnton v. Pubinton. 309
PURINTON V. PURINTON.
[101 Me. 250, 63 Atl. 925.]
EVIDENCE — Letters Bead to Witness. — If one voluntarily and
without solicitation reads the whole or a portion of a letter to another,
and the person hearing does not undertake to repeat the contents of
such letter, but only what the person purporting to read or state has
said, such statements assume the form of an admission by the person
holding the letter, and testimony of such evidence becomes primary
evidence. This rule applies as against a plaintiff in divorce as to
letters written by her after her marriage to the defendant to a third
person and by him to her, the contents of which have been read to
the witness, (p. 310.)
EVIDENCE — ^Admissions — Best Evidence. — ^If it is sought to
use a written statement as an admission, the "best evidence" rule
does not apply, (p. 311.)
EVIDENCE. — ^Admissions and Statements made by a person are
in all cases admissible in evidence against him, though such state-
ments and admissions may involve what must necessarily be contained
in some writing, deed or record, (p. 311.)
EVIDENCE — Letters Written by Third Person. — A letter in the
handwriting of a third person which appears to be one of many writ-
ten by him to the plaintiff in divorce, and found under a couch in her
room, is admissible against her. (pp. 312, 313.)
APPELLATE PBACTICE. — Exceptions must be overruled un-
less they affirmatively show, without the aid of extrinsic evidence, not
only that the ruling was wrong, but that the person complaining was
aggrieved, so that if the ruling would be justified or would be harm-
less to the complainant upon any possible but not impossible situation
unexplained by the exceptions, the doings below will not be disturbe^l
or condemned, (p. 313.)
S. S. Brown, for the plaintiff.
Thompson & Wheeler, for the defendant.
*** SPEAR, J. This case involves a libel for divorce and
comes up on exceptions to the admission of certain testimony.
The charges in the libel were failure to support and cruel
and abusive treatment. The answer of the libelee was a de-
nial of every allegation laid in the libel as a cause for di-
vorce and every specification offered therein under the alle-
gations; and also a denial of the allegation in the libel that
the libelant had been faithful to her marriage obligations
ever since she became his wife, and charged that, on the con-
trary, during the same time she had offered him extreme and
continuous provocation, and that her conduct during this
time had been such as would have justified all that she charged
310 American State Reports, Vol. 115. [Maine,
•
or could truly allege against him, and that during the same
time her conduct with relation to men other than her husband
had been immodest, improper, scandalous, ^^^ indecent and
criminal. Among the witnesses called by the defendant was
one James Colby, who testified that soon after the marriage
of the parties he carried numerous letters between this libel-
ant and one Frank Bartlett, for whom Mrs. Purinton had
done housework before her marriage with the libelee, and that
the libelant had often read aloud to the witness the con-
tents of letters written by said Bartlett to her and by her to
him, and the defendant's counsel asked the witness to give
in testimony such portions of the letters so read or stated to
him by the libelant as he could remember. No effort had
been made by the libelee to procure the letters and no notice
had been given by the libelant to produce any such letters
as she might have in her possession. The libelant's counsel
objected to such inquiry, but the court allowed the wititess
to testify as to what was read or stated in them by the libel-
ant. This ruling presents the first ground of exception.
The libelant claims that the letters themselves, if any such
letters ever exi.sted, were the best evidence of the contents
of the letters, and that no secondary proof of their contents
should be received until it was shown that the libelee had
made all reasonable effort to obtain the letters. In other
words, that the evidence offered to prove the contents of these
letters, or any part of them, fell within the usual rule relat-
ing to the proof of the contents of written instruments. But
we hardly think this position is tenable.
The case shows and the libelee contends that this evidence
was not offered to prove the contents of the letters, but the
statements or admissions of the libelant herself as to some
of the statements contained in these letters. Proof of her
voluntary admissions against her own interest would clearly
be admissible by the testimony of any competent witness who
might have heard such admissions. We are unable to see why
the source of her admissions, whether made by her as volun-
tary statements of her own, purporting to be quotations from
memory or to be read from some writing, should modify the
general rule with respect to their proof. When one volun-
tarily and without solicitation reads the whole or a portion
of a letter or writing to another, the party hearing does not
undertake to repeat ^'^ the contents of the original writing,
but only what the person purporting to read or state has said.
March, 1906.] Purixton v. Purinton. 313
This is entirely different from an attempt on the part of a
witness, who, having read a letter himself, undertakes to
testify to its contents, when the letter, of course, is the best
evidence. But when a party voluntarily assumes to state
what is in a letter, or to read a portion of a letter, to another,
then such statement assumes the form of an admission by the
party holding the letter, and testimony of such admission be-
comes primary evidence under the general rule with refer-
ence to proof of admissions.
The testimony of Colby does not assume to give the legal
effect of the letters, but shows to the extent of his recollec-
tion what was said by the libelant to have beea their terms
and import.
The libelee's legal position is fortified by authority as well
as reason. 16 Cyclopedia, page 944, lays down this rule :
"When it is sought to use a written statement as an admis-
sion, the 'best evidence rule,' so called, does not apply; and
a copy of a letter, for example, is competent when identified,
without accounting for the original."
In Kelly v. IMcKenna, 18 Mich. 381, it was held that the
copy of a letter which the writer of the original had admitted
in its leading points to be a correct copy was as to these
points converted into admissions by him and became original
evidence. The court said: "It was of no consequence that
the paper was a copy of the letter he had written. When he
made its contents identical with his declaration, the paper
became an original for the purpose of showing his declaration
to Bruce." So in the case at bar, the testimony of Colby
became primary for the purpose of showing the declarations
of the libelant which purported to be identical with the let-
ters from which she was quoting.
In Smith v. Palmer, 6 Cush. 513, the court say: "The ad-
missions of a party stand on distinct grounds. The admis-
sions of a party are not open to the same objection which
belongs to parol evidence from other sources. A party 's own
statements and admi.ssions are in all cases admi.ssible in evi-
dence against him, though such statements and admissions
may involve what must necessarily be contained in some writ-
ing, deed or record. Thus, the statement of a party that
certain lands had been conveyed might be admittecj,
*** though the conveyance must be by deed or record. The
general principle as to the production of written evidence as
the best evidence does not apply to the admissions of parties ;
312 American State Reports, Vol, 115. [Maine,
as what a party admits against himself may reasonably be
taken to be true."
In 1 Greenleaf on Evidence, sections 96 and 97, this rule
is laid down: "It appears that the prevailing doctrine in
England and this country is that a verbal admission of the
contents of a writing by a pari;y himself will supersede the
necessity of giving notice to produce it; in other words, that
"said admissions being made against the party's own inter-
est can be used as primary evidence of the contents of a writ-
ing against him." In note A of section 96, above cited, it
is said that while the rule as stated is denied in Ireland and
New York, it is " the prevalent opinion in the United States. ' '
In Blacki'ngton v. Rockland, 66 Me. 332, involving the
proof of a notice to a town for injuries received upon a de-
fective highway, in which the objection was raised that the
records of the city were not competent evidence to show that
a bill for damages had been presented without the produc-
tion of the bill itself, our court held: "It has been decided
that oral admissions of a party are admissible evidence of
facts, though the facts are established by some writing. The
records here would in effect be equivalent to the oral admis-
sion of an individual party or more than that." In this
opinion the court also adopts the English decision in Slatterie
V. Pooley, 6 Mees. & W. 664, which is referred to by Green-
leaf in note A, supra, as the leading English case on this
point.
In Loomis v. Wadhams, 8 Drake, 557, the court adopts the
following quotations from Mr. Justice Parke : ' * What a party
says is evidence against himself as an admission, whether it
relates to the contents of a written paper or to anything else. ' '
In Clarke v. Warwick Cycle Mfg. Co., 174 Mass. 434, 54
N. E. 887, Chief Justice Holmes says: "It is to be remembered
with reference to this and other exceptions that admissions
are evidence against a party making them although they re-
late to the contents of a written paper or to a corporate vote ' ' :
See, also, Wolverton v. State, 16 Ohio, 173, 47 Am. Dec. 373 ;
Edgar v. Richardson, ^ws 33 Ohio St. 581, 31 Am. Rep. 571;
Edwards v. Tracy, 62 Pa. 374 ; Taylor v. Peck, 21 Gratt. 11.
The second exception involves the admission of a letter
written by Bartlett, found by the libelee behind a couch in
a room vacated by the wife when she left her husband.
The exceptions do not show whether this letter was opened
when found, or written before or after the marriage of the
March, 1906.] Purinton v. Purinton. 313
libelant with the libelee, nor upon what grounds the judge
found in the affirmative upon both of these points. But it is
a well-settled rule of law that in the trial of a ease it
is to be presumed that things were rightly and regulariy
done except so far as the exceptions make it otherwise appear.
Exceptions must be overruled unless they affirmatively
show, without aid from extrinsic evidence, not only that the
ruling was wrong, but that the party complaining was ag-
grieved, so that if the ruling would be justified, or would be
harmless to the complainant upon any possible but not im-
probable situation unexplained by the exceptions, the doings
below will not be disturbed or condemned. Among the latest
authorities upon this proposition are Toole v. Bearce, 91 Me.
209, 39 Atl. 558 ; Hill v. Reynolds, 93 Me. 25, 74 Am. St. Rep.
329, 44 Atl. 135; Smith v. Smith, 93 Me. 253, 44 Atl. 905;
Look V. Norton, 94 Me. 547, 48 Atl. 117 ; Atkinson v. Ome-
ville, 96 Me. 311, 52 Atl. 796 ; Copeland v. Hewett, 96 Me.
525, 53 Atl. 36.
Under these principles of law it must be held that the letter
was in all respects properly admitted except those specifically
stated in the exceptions, and, therefore, must be assumed that
the evidence satisfied the court that the letter was written
after the marriage and either found open or without any
envelope.
"When this letter was offered, it had already appeared in
the case by legitimate evidence that Mrs. Purinton had been
carrying on a clandestine correspondence with Bartlett, em-
ploying a private carrier; that many letters had passed be-
tween them. Then the letter found by the libelee was offered
as one of the letters contained in the correspondence in which
Mrs. Purinton had been an active participant.
The exceptions do not deny the passage of these letters be-
tween the libelant and Bartlett except the last one, simply
alleging that ^'^^ "Mrs. Purinton denies all such pretended
reading of said letters by her to said Colby, and denies any
such letters as the defendant exhibits." The libelee presented
only the letter which is the subject of the second exception.
The only real question under this exception is whether
under all the accompanying circumstances the finding of this
letter will warrant the inference that it was received by the
libelant notwithstanding her denial of having received it.
In view of the fact that the letter was in the handwriting
of Bartlett, and appeared to be one of many which was writ-
314 American State Reports, Vol. 115, ^ [Maine,
ten to her by him, and was found under a couch in the room
from which the libelant moved when she left her husband,
the conclusion seems irresistible that she received the letter.
How otherwise could such a letter, admitted to be in the hand-
writing of Bartlett, have found its way into her room? If
the letter had been forged or not in the handwriting of Bart-
lett, with whom the evidence tends to show she had sustained
a course of improper correspondence, it could not be ad-
mitted ; but there is no pretense that it was forged or that it
was in a handwriting other than Bartlett's, or that there wat
any collusion with Bartlett by which it was placed there
but a simple denial on her part that she ever received it. It
that letter was not placed in that room through her hands,
we are at a complete loss to know how it got there. The only
reasonable explanation is that she received it and accidentally
dropped it behind the couch or on the floor, and in that way
left it to be found by her husband.
Exceptions overruled.
The Admissibility in Evidence of the Admissions of parties to a
divorce is cousidered in the note to Richardson v. Richardson, 30 Am.
Dec. 544. The admissions of a party to a divorce suit are generally re-
garded as competent evidence against him: Burke v. Burko, 44 Kan.
307, 21 Am. St. Rep. 283; Gardner v. Gardner, 104 Tenn. 410, 78 Am.
St. Rep. 924. See, however, Toole v. Toole, 112 N. C. 152, 34 Am.
St. Bep. 479.
HAYES v. RICH.
[101 Me. 314, 64 Atl. 659.]
JUDGMENTS — Assignment. — Where a judgment must be
deemed a chose in action upon which an action may be maintained
by an assignee in his own name, an assignment of judgment in writ-
ing, although not under seal, is sufficient, (pp. 316, 317.)
EXECUTORS AND ADMINISTRATORS— Speculation wltti
Funds of Estate. — So great a breach of trust is it for the personal
representative of a decedent to engage in business with the funds of
the estate, that the law charges him with all the losses thereby in-
curred, without, on the other hand, allowing him to receive the bene-
fit of any profits that he may make, the rule being that the persons
beneficially interested in the estate may either hold the representative
liable for the amount so used with interest, or, at their election, take
all the profits which the representative has made. (pp. 318, 319.)
EXECUTORS AND ADMINISTRATORS— Speculation with
Funds of Estate. — It is the duty of an executor or administrator to
March, 1906.] Hayes v. Rich. 315
settle the estate, pay the debts, and distribute the surplus, and not
to speculate in demands against creditors. If the latter transaction
is indulged in, all loss must fall upon such personal representative,
(p. 319.)
EXECUTORS AND ADMINISTEATOES— Speculation with
Funds of Estate — Eecovery in Representative Capacity. — It is the
duty of an administrator to collect a good note in favor of the estate
in cash, and not to invest it in a worthless judgment at twenty cents
on the dollar, and if he assumes the responsibility of employing the
funds of the estate for such purpose, he must be deemed to have done
so in his individual capacity. If an administrator thus changes the
nature of the debt originally due the intestate by contract made with
himself, he must sue for the new debt in his own name, and not in
his representative capacity, (p. 320.)
EXECUTORS AND ADMINISTRATORS— Speculation with
Funds of Estate — Right to Rescover in Representative Capacity. — If
an administrator speculates with the funds of the estate and changes
the nature of the debt originally due the intestate by a contract made
with himself, his assumption that he can maintain an action thereon
>»nd recover judgment in his representative capacity is incompatible
with the right of the defendant to testify as a witness in his own
behalf respecting matters that happened before the death of the in-
testate, (p. 320.)
JUDGMENTS — Assignment — Witnesses. — In an action on a
judgment brought by an original judgment creditor or by his assignee in
his individual capacity, the defendant therein is a competent witness
as to all matters material to the issue; and any transaction or pro-
ceeding which would effectually render him incompetent in such action
will not be tolerated or approved, (p. 321.)
G. W. Heselton and Heath & Andrews, for the plaintiff.
Williamson & Burleigh, for the defendant.
»i» WHITEHOUSE, J. The first of these eases is an
action of debt on a judgment for seven hundred and eight
dollars and sixty-five cents recovered in 1899 by Albert A.
Robbins against the defendant. Rich. It is alleged in the
declaration that February 10, 1900, Robbins, for a valuable
consideration, assigned this judgment "to Alvah R. Hayes,
then the administrator de bonis of the Dingley Brothers es-
tate." In support of this allegation the following instru-
ment signed by Robbins was offered in evidence: "For a
valuable consideration, in a note of one hundred and fifty
dollars payable to F. B. Dingley, admr., d. b. n. Dingley
Bros.' estate, dated P^eb. 1, 1899, to me this day surrendered
by A. R. Hayes, admr., d. b. n. of same estate, I assign and
transfer to said estate the within judirment debt with full
power in my name but without expense to me to collect the
same."
316 American State Reports, Vol. 115. [Maine,
The plea was the general issue with a brief statement deny-
ing that there was any assignment of the judgment to the
plaintiff in his capacity as administrator as set forth in the
declaration.
It was accordingly contended in behalf of the defendant,
first, that the instrument in question was ineffectual as an as-
signment and inadmissible as evidence because not under seal ;
second, that under our statutes an assignee of a judgment
could not maintain an action in his own name, and third,
that in any event the instrument could not operate as an as-
signment of a judgment to Hayes in his capacity as adminis-
trator of Dingley Brothers, but only as an assignment to
Hayes in his individual capa.^ity, and hence fails to support
the plaintiff's declaration.
These objections were severally overruled pro forma by
the presdding judge, the assignment received as evidence,
and judgment ordered for the plaiijtiff for eight hundred and
eighty-eight dollars and ninety-five cents. The case comes
to this court on exceptions to this ruling.
^*® The first and second propositions afppear to have been
decided against the defendant's contention. In Dunn v.
Snell, 15 Mass. 481, the court say: "The objection to the as-
signment as offered to be proved by the witnesses is that it
was not by deed, and the objection rests upon the general
principle which was assumed by the counsel that an assign-
ment of a specialty must be by an instrument of as solemn
a nature as the instrument itself which is to be assigned.
Considering a judgment as a specialty, it is obvious that,
upon this general principle, it could never be assigned; be-
cause there is no instrument in pais of so high a nature as
the record of a judgment in court It is not doubted
that this debt, upon which the judgment was rendered, might
have been assigned by writing without seal The judg-
ment is only evidence of the debt, and if the execution is de-
livered over, with intent to transfer the debt, upon a fair
bargain upon a valuable consideration, there is no reason why
the transaction should not be as binding Upon the parties as
the parol assignment of a debt before it is reduced to judg-
ment. And, in this case, the execution was in fact delivered
to the use of the assignee, so that the judgment creditor could
not have obtained another execution upon that judgment."
In Prescott v. Hull, 17 Johns. 284, the court said: "I do
March, 1906.] Hayes v. Rich. 317
not consider the want of a seal essential. The mere delivery
of a chose in action upon good and valid consideration would
be sufficient even were it a specialty": See, also. Wood v.
Decoster, 66 Me. 542; Ware v. Bucksport etc. R. R. Co., 69
Me. 97.
In the two last-named cases it was also decided that under
section 146, chapter 84 of the Revised Statutes (originally
chapter 235, laws of 1874), a judgment must be deemed a
chose in action upon which an action might be maintained
by the assignee in his own name.
In considering the peculiar terms of the instrument in ques-
tion and its operation as an assignment with reference to the
defendant's third contention, it is allowable to observe the
situation of the parties at that time and the obvious purpose
of this assignment.
In October, 1904, the defendant. Rich, obtained a verdict
of two thousand and ninety-three dollars and twenty-five
cents against the plaintiff, Hayes, in his capacity as admin-
istrator de bonis non on the estate of Dingley Brothers. The
action which ^^^ finally resulted in this verdict was com-
menced April 9, 1900, and was based on a note originally for
three thousand dollars bearing date December 29, 1894, given
by Dingley Brothers to Rich. The motion for a new trial in
this case was overruled by the law court, and the case went
to judgment in October, 1905.
It is true that the plaintiff, Hayes, obtained the assign-
ment of the Robbins judgment two months before the actual
commencement of the original suit of Rich v. Hayes, last de-
scribed, but it has been seen that the note on which this ac-
tion was brought was dated December 29, 1894. It may rea-
sonably be inferred from all the circumstances disclosed by
the evidence to which we are permitted to refer that both
Hayes and Fred B. Dingley, his predecessor in the adminis-
tration of the estate in question, had reason to apprehend
that a suit would be brought by Rich on his note against
Dingley Brothers, and having an opportunity to purchase
the Robbins judgment at less than twenty cents on the dol-
lar, Hayes appears to have consummated the arrangement
alleged to have been made by Fred B. Dingley, and obtained
an assignment of the judgment in the obvious hope of being
allowed to offset the full amount of it against any judgment
that might be recovered by Rich on his three thousand dollar
318 American State Reports, Vol, 115. [Maine,
note. But a judgment against Rich standing in the name
of Robbins as plaintiff could not be offset against a judg-
ment obtained by Rich against Hayes in his capacity as ad-
ministrator d. b. n. of the estate of Dingley Brothers, and the
suit at bar was manifestly brought for the purpose of ob-
taining a judgment in the name of Hayes, the assignee, in
his capacity as administrator, in the expectation that in this
form the Robbins judgment could be offset pro tanto against
the larger judgment of Rich against Hayes, administrator.
Accordingly, on the rendition of the judgment for two thou-
sand and ninety-three dollars in favor of Rich, a motion to
offset the Robbins judgment was promptly made.
It is the opinion of the court, however, that in the case at
bar the plaintiff is not entitled to a judgment in his right
and capacity as administrator. In the first place, it does not
explicitly or satisfactorily appear that the one hundred and
fifty dollar note invested by Hayes in the purchase of the
Robbins judgment in fact represented any part of the assets
of the estate of Dingley Brothers. It is described in the as-
signment, ^^* it is true, as * * payable to F. B. Dingley, Admr.
d. b. n. Dingley Brothers' estate," but there is no evidence
from any witness having personal knowledge of the matter
that it was given for any debt due the firm of Dingley
Brothers in their lifetime.
But if it be assumed that the Robbins judgment was
purchased by Hayes with funds belonging to the estate of
Dingley Brothers, still, in a broader view of the question,
insuperable objections present themselves arising from consid-
erations of sound public policy, and the rights of a party in
the situation of Rich as defendant in a suit in the Robbins
judgment, which must prevent the plaintiff Hayes from recov-
ering a new judgment in his name and capacity as adminis-
trator on the estate of Dingley Brothers. It is the recognized
function of an administrator to settle the estate, reduce the
assets to cash as far as necessary and practicable, pay the
debts and legacies and unfler the order of court distribute the
residue among those entitled to it under the intestate laws of
the state. "So great a breach of trust is it for the repre-
sentative to engage in business with the funds of the estate
that the law charges him with all the losses thereby incurred,
without, on the other hand, allowing him to receive the bene-
fit of any profits that he may make, the rule being that the
March, 1906.] Hayes v. Rich. 319
persons beneficially interested in the estate may either hold
the representative liable for the amount so used with interest,
or at their election take all the profits which the representative
has made by such unauthorized use of the funds of the es-
tate": 18 Cye. 241, 242, and cases cited.
In Mead v. Merritt, 2 Paige, 402, the facts were analogous
to those at bar. In a suit by the defendant Peck against the
plaintiff, as executor of the will of one Sherwood, the plaintiff
alleged that he had purchased a note against Peck and asked
to have it set off against the latter upon Sherwood's estate.
It was further alleged, it is true, that Peck's claim had been
assigned to the defendant IMerritt for the purpose of defeat-
ing the plaintiff's claim to setoff, and the question of jurisdic-
tion was also involved. But in the opinion Chancellor Kent
says: "Independent of this question of jurisdiction, it is
evident that the complainant has no right to the equitable
interposition of this court. The note of Peck, which he
**^ purchased since the death of Sherwood, and now holds in
his own right, could not, at law, be set off against Peck's
demand upon the estate of the testator. And it would be
inconsistent with the principles of sound policy to permit an
executor to buy up claims against creditors of an estate, for
the purpose of obtaining a setoff in equity": 2 Paige, 405.
So in Dudley v. Griswold, 2 Bradf. 24, the court say: "It
is the duty of an executor or administrator to settle the estate.
pay the debts and distribute the surplus, and not to speculate
in demands against creditors."
The distinction between the duty and authority of an ad-
ministrator, and the functions of a trustee or receiver, is so
well established and a matter of such common knowledge as
to render unnecessary the citation of authorities or any ex-
tended discussion of the subject. It has been recognized
from time immemorial as the characteristic duty of an admin-
istrator to settle the estate of his intestate with reference to
the situation of the as.sets at the time of the death of the
decedent, and not attempt, by trade or speculation, to adjust
the affairs of the estate upon an entirely different basis, which
might seriously affect the (piestion of distribution and in some
instances render the estate insolvent : See the numemus cases
upon the question of setoff in Rich v. Hayes, 101 Me. 324,
post, p. 321, 64 Atl. 656. In the case at bar it appears that
at the time Hayes purchased the Robbins judgment, Rich was
320 American State Reports, Vol. 115. [Maine,
hopelessly insolvent, and had no available property with which
to satisfy any judgment, except the note in suit in Rich v.
Hayes, 101 Me. 324, post, p. 321, 64 Atl. 656 ; while, on the other
hand, there is no evidence that Robbins was not entirely
solvent and able to pay the note for one hundred and fifty
dollars which the plaintiff held against him. It was the obvi-
ous duty of the plaintiff, if acting for the interest of the
estate which he represented, to collect this note in cash, and
not invest it in a worthless judgment at twenty cents on the
dollar. If he assumed the responsibility of employing the
funds of the estate for such a purpose, he should be deemed
to have done so in his individual capacity ; and if an adminis-
trator thus changes the nature of the debt originally due the
intestate by a contract made with himself, he must sue for the
new debt in his own name, and not in his representative
»23 capacity: Helm v. Van Vleet, 1 Blackf. (Ind.) 342, 12
Am. Dec. 248; Bond v. Corbett, 2 Minn. 209; Burdyne v.
Maekey, 7 Mo. 374.
Again, the assumption that the plaintiff can maintain this
action and recover judgment in his capacity as administrator
is incompatible with the right of the defendant to testify as
a witness in his own behalf respecting matters that happened
before the death of the plaintiff's intestate. In an action
on a judgment brought by the original judgment creditor or
by an assignee in his individual capacity, the defendant would
be a competent witness as to all matters material to the issue.
It would be the privilege of the defendant Rich, for instance,
to give personal testimony that before the death of the Dingley
Brothers he had paid the Robbins judgment in full, but under
the provisions of section 112 of chapter 84 of the Revised
Statutes, the fact that the plaintiff brings the action as the
representative of a deceased party precludes the defendant
from giving any such evidence in his own behalf, although
Robbins, the judgment creditor, would be a competent witness
for the plaintiff. Under the operation of such a rule any
person could effectually close the mouth of his adversary as a
witness by assigning his claim to an administrator of some
estate.
But it has been seen that the ruling of the presiding judge
to which exceptions were taken fails to specify whether the
judgment was ordered in favor of the plaintiff in his indi-
vidual or representative capacity. But it is not alleged in
March, 1906.] Rich v. Hayes. 321
the declaration that the cause of action accrued to the estate
which he represented, but for aught that appears it may have
been one accruing to him in his own right. The words
describing him as administrator of the estate may therefore
be stricken out as merely descriptio personae, and he may be
allowed to take judgment in his individual capacity : Bragdon
V. Harmon, 69 Me. 29; Fleming v. Courtenay, 95 Me. 128,
49 Atl. 611, 98 Me. 401, 99 Am. St. Rep. 414, 57 Atl. 592.
Inasmuch, therefore, as the plaintiff is entitled to judgment
in his individual capacity, the entry in the first case must
be, exceptions overruled.
324 rpj^g second case, Hayes v. Rich, is also an action of debt
on a judgment. It appears that Rich commenced an action
again.st Hayes, administrator, and became nonsuit. Judg-
ment for costs was accordingly rendered in favor of Hayes for
three hundred and seventy-eight dollars and ninety-seven
cents. This judgment properly belonged to Hayes in his
own right, and in this action on that judgment he is entitled
to recover in his individual name and capacity: Buswell v.
Eaton, 76 ^le. 392 ; Titonic Nat. Bank v. Turner, 96 Me. 380,
52 Atl. 793.
In this case, therefore, the entry must also be, exceptions
overruled.
For Authorities bearing upon the principal case, see Rich v. Hayes,
101 Me. 324, post, p. 321. The setting off of one judgment against
another is the subject of a note to Coonan v. Loewenthal, 109 Am. St.
Bep. 137.
RICH V. HAYES.
flOl Me. 324, 64 Atl. 656.]
EXECUTORS AND ADMINISTEATORS— Setoff In Favor of.—
An administrator cannot offset against a judgment rendered upon a
liability of the decedent another judgment on a claim with which the
decedent had no connection in his lifetime, purchased by such admin-
istrator with the funds of the estate for that purpose, after the death
of the intestate, (p. 325.)
EXECUTORS AND ADMINISTRATORS— Setoff in Favor of .—
If an executor or administrator sues for a deb< created to him since
the death of the decedent, the defendant in such suit cannot set off a
debt due to him from the decedent, and the same rule applies against
the personal representative when he is the defendant, (p. 325.)
Am. St. Rep., Vol. 115—21
322 American State Reports, Vol. 115. [Maine,
SETOFF Against Estates of Deceased Persons. — Demands on
which causes of action arise subsequently to decedent's death are not
proper subjects of setoff against demands or causes of action arising
in decedent's lifetime, (p. 326.)
SETOFF Against Estates of Decedents. — Claims against an es-
tate purchased after his death cannot be set off in an action against
the purchaser thereof for a debt due the decedent, nor even on a debt
created after the death of the decedent, (p. 326.)
Williamson & Burleigh, for the plaintiff.
G. W. Heselton and Heath & Andrews, for the defendant.
«*« WHITEHOUSE, J. The question involved in this case
arises upon the motion of the defendant to set off against the
judgment recovered by the plaintiff in this case two judg-
ments recovered by the defendant against the plaintiff. The
case comes to this court on report.
In October, 1904, the plaintiff obtained a verdict of two
thousand and ninety-three dollars and twenty-five cents
against the defendant in his capacity as administrator de
bonis non on the estate of Dingley Brothers. The action
which terminated in this result was commenced April 9, 1900,
on a note given by the plaintiff to Dingley Brothers in 1894
for three thousand dollars. A motion to set aside the verdict
was overruled by the law court, and the case went to judgment
in October, 1905.
Thereupon a motion was made to offset against this judg-
ment, pro tanto, the judgment which might be rendered in
favor of the defendant Hayes in two cases then pending in
his name as administrator against the plaintiff Rich. The
first of these cases was an action of debt on a judgment for
seven hundred and eight dollars and sixty-five cents, recov-
ered in 1899 by Albert Robbins against the defendant Rich.
It is alleged in the declaration that February 10, 1900, Rob-
bins, for a valuable consideration, assigned this judgment "to
Alvah R. Hayes, then the administrator de bonis of the Ding-
ley Brothers estate." In support of this allegation the fol-
lowing instrument signed by Robbins was offered in evidence :
"For a valuable consideration, in a note of one hundred and
fifty dollars payable to F. B. Dingley, admr. d. b. n. Dingley
Bros.' estate, dated Feb. 1, 1899, to me this day surrendered
by A. R. Hayes, admr. d. b. n. of same estate, I assign and
transfer to said estate the within judgment debt with full
power in my name but without expense to me to collect the
same."
March, 1906.] Rich v. Hayes. 323
It is contended in behalf of the defendant that if the action
is maintainable at all the plaintiff is not entitled to recover
in his representative capacity as administrator of the estate
of Dingley Brothers, but only in his individual capacity.
This question came before the court in Hayes v. Rich, 101 Me.
314, ante, p. 314, 64 Atl. 659, and upon the reasons and
authorities there adduced it was held that the plaintiff
^^"^ was entitled to recover only in his individual capacity
and judgment was entered accordingly.
The second case, Hayes v. Rich, was also an action of debt
on a judgment. It appears that Rich commenced an action
against Hayes, administrator, and became nonsuit. Judg-
ment for costs was accordingly rendered in favor of Hayes for
three hundred and seventy-eight dollars and ninety-seven
cents. It was held by the court that this judgment properly
belonged to Hayes in his own right, and that in this case also
he was only entitled to recover in his individual name and
capacity : Hayes v. Rich, 101 Me. 314, ante, p. 314, 64 Atl. 659.
It is provided by section 77 of chapter 84 of the Revised
Statutes as follows : * * In actions against executors, administra-
tors, trustees or others in a representative capacity, they may
set off such demands as those whom they represent might have
set off in actions against them; but no demands, due to or
from them in their own right, can be set off in such actions. ' '
Ina.smuch as it has been shown by the court in Hayes v.
Rich, 101 Me. 314, ante, p. 314, 64 Atl. 659, that the two judg-
ments there rendered in favor of Hayes properly belonged to
him in his own right, and as the new judgments have accord-
ingly been awarded to him in his individual capacity, it
follows that by the express terms of the statute above quoted
these judgments could not have been set off against Rich's
note in suit before judgment. Neither could the executions
on these judgments be set off under the provisions of section
27 of chapter 86 of the Revised Statutes, since the creditor in
one is not debtor in the other "in the same capacity and
trust." Indeed, the right to set off judgments in this state
is not derived from any express statutory regulations, but
depends upon the general jurisdiction and power of the courts
over suitors at common law ; but if the right to set off, in the
manner proposed, assigned claims that are not negotiable, was
recognized as existing at common law, it is r<^markable that
the legislature should prohibit its exercise before judgment,
when the setoff could be made with at least equal convenience.
324 American State Reports, Vol. 115. [Maine,
It is no less significant that the provision for offsetting execu-
tions should be limited to cases where "the creditor in one
is debtor in the other in the same capacity and trust"; for
ordinarily the right of the court to set off judgments **® can
only be exercised when the executions could be set off under
the statute: New Haven Copper Co. v. Brown, 46 Me. 418.
In this case it should be observed that the "assigned claim"
was a negotiable promissory note.
In Ames v. Bates, 119 Mass. 397, the facts were strikingly
similar to those at bar, and although/ the decision of the case
turned upon another point, the following observations of the
court are worthy of consideration: "If Ames had continued
to be the owner of the judgment recovered in his name, it
might '(veil be questioned whether Bates should be permitted
to set off against it the judgment recovered by him in the
name of Freeman and another when he could not have set off
the claims upon which the judgments were founded. The
reason why a party is not permitted by the statute to set off
such claims may fairly be presumed to be, that it is not just
that one should be encouraged, instead of paying his own
debt, to seek out claims against his creditor in order thus
to change the position of parties pendente lite, and this reason
is equally applicable to judgments which may afterward be
obtained upon such claims."
In the case at bar, it is true, the assigned judgment was
not purchased pendente lite, but about two monjths before
the commencement of the original suit of Rich v. Hayes. It
is manifest, however, from the history of these transactions
disclosed by the evidence that both Hayes and his predecessor
in the administration of the estate apprehended the suit by
Rich on his three thousand dollar note, and having an oppor-
tunity to purchase the Robbins judgment at less than twenty
cents on the dollar, obtained the assignment of it for the
express purpose of claiming a setoff, pro tanto, against the
note in suit or any judgment that Rich might recover upon it.
It is undoubtedly true that the principle of mutuality is
implied in the use of the word "setoff," and that it is not
necessarily confined to a nominal mutuality indicated by the
record, but in some cases may be a real mutuality of the
indebtedness of the parties at the time of the commencement
of the suit : Collins v. Campbell, 97 Me. 23, 94 Am. St. Rep.
458, 53 Atl. 837, and cases cited.
March, 1906.] Rich v. Hayes. 325
But if it be conceded in the case at bar that the Robbins
judgment was purchased by Hayes with funds belonging to
the estate of Dingley ^-® Brothers, and that the assignment,
although in terms made "to the estate" and not to any person,
was procured for the purpose of vesting the title thereto in
Hayes as the legal representative of the estate, and making
it a part of the assets of the estate, still in a broader
view of the precise question here presented, irrespec-
tive of the provisions of the statute, there appear to be con-
vincing reasons and an overwhelming weight of authority in
support of the plaintiff's contention that an administrator
cannot offset against a judgment rendered upon a liability of
the decedent another judgment on a claim with which the
decedent had no connection in his lifetime purchased by the
administrator with the funds of the estate for that purpose
after the death of his intestate. Some of these reasons are
stated and authorities cited in Hayes v. Rich, 101 Me. 314,
ante, p. 314, 64 Atl. 659. The question involved in the two
cases are so blended or intimately connected, that the con-
siderations controlling the decision of the one will be found
in most respects equally important in the other.
It is a self-evident proposition, in the first place, that Hayes
can certainly have no greater right to offset a judgment
against Rich, purchased by him from a stranget" after the
death of Dingley Brothers, than he would to offset a judgment
obtained by him, for instance, on an account for goods of the
estate sold by him to Rich ; and since the essence of the doc-
trine of setoff is its mutuality, it is equally axiomatic that if
Rich could not offset against the Robbins judgment a debt
due him from the estate, neither can Hayes set off a debt due
him as admini.strator against a claim due Rich from the
estate. It would obviously be immaterial whether the motion
for a setoff was made by Rich or Hayes. In Dale v. Cooke, 4
Johns. 11, Chancellor Kent, speaking for the court, says:
"It is an established rule in courts of law that if executors
sue for a debt created to them since the testator's death,
defendant cannot set off a debt due to him from the testator.
I see no reason why the same rule should not prevail in
equity. If the defendant could not set off in such a case,
neither could the executor, if he was the defendant, for the
rule must be mutual": See, also, Dudley v. Griswold, 2
Bradf. (N. Y.) 24: Mead v. Merritt, 2 Paige, 402; Root v.
Taylor, 20 Johns. 137,
326 American State Reports, Vol. 115. [Maine,
^*® Indeed, this seems to be substantially a uniform rule in
this country. In Dayhuff v. Dayhuff' s Admr., 27 Ind. 158,
the defendant sought to set off a claim due him against the
administrator's claim against him for goods of the estate sold
him; and although there was evidence that the administrator
agreed to allow the setoff as an inducement to the defendant
to purchase the goods, the court declared it to be a settled
rule that in a suit by an administrator for a debt due the
estate of the decedent originating after the death of the intes-
tate the defendant cannot set off a debt due him from the
intestate before his decease. In this case the suit was by the
plaintiff in his representative capacity, but this fact was held
to be immaterial. The case was expressly affirmed in Harte
V. Houchin, 50 Ind. 327; Minor v. Minor's Admr., 8 Gratt.
1; Cook V. Lovell, 11 Iowa, 81; Aiken v. Bridgman, 37 Vt.
249 ; Wisdom v. Becker, 52 111. 342 ; Lee v. Russell, 18 Ky.
Law Rep. 951, 38 S. W. 874 ; Grew v. Burditt, 9 Pick. 265 ;
Lamberton v. Freeman, 16 N. H. 547; 25 Am. & Eng. Ency.
of Law & Pr., 2d ed., 534, and cases cited.
In 18 Cyclopedia of Law and Procedure, 896 et seq., the
rule upon this question is thus formulated: "Demands on
which causes of action arise subsequent to decedent's death
are not proper subjects of setoff against demands or causes
of action arising in decedent's lifetime, because there is no
mutuality of indebtedness between the parties."
On page 899 of the same volume is the following rule:
"Claims against an estate purchased after decedent's death
cannot be set off in an action against the purchaser thereof
for a debt due the decedent, nor even a debt created after
the death of a decedent."
Both of these propositions are supported by numerous
citations of authorities, basing the rule for the most part
upon considerations of sound public policy, which re-
quire the estate to be settled as of the time of the decease
of the intestate and forbid any alteration in the course of the
distribution of the assets': See, also. Irons v. Irons, 5 R. I.
264; Union Nat. Bank v. Hicks, 67 Wis. 189, 30 N. W. 234;
Bizzell V. Stone, 12 Ark. 378. In the last-named case the
same rule was held to be settled both at law and in equity,
and whether the estate be solvent or insolvent.
In like manner it appears to have been uniformly held by
the ^* courts of England, that if an administrator brings
March, 1906.] Rich v. Hayes. 327
an action upon a debt created against the defendant after the
death of the intestate or upon which the cause of action arose
after that event, the defendant cannot set off a debt on which
there was a cause of action in the lifetime of the intestate' :
Shipman v. Thompson, Will. 103 ; Tegetmyer v. Lumley, Will.
264; Watts V. Rees, 9 Ex. 696, 11 Ex. 410; Lambard v.
Elder, 17 Beav, 542.
As stated by the court in Hayes v. Rich, 101 Me. 314, ante,
p. 314, 64 Atl. 659: "It appears that at the time Hayes pur-
chased the Robbins judgment, Rich was hopelessly insolvent
and had no available property with which to satisfy any
judgment, except the note in suit in Rich v. Hayes, while, on
the other hand, there is no evidence that Robbins was not
entirely solvent and able to pay the note for one hundred and
fifty dollars which the plaintiff held against him. It was the
obvious duty of the plaintiff, if acting for the interest of the
estate which he represented, to collect this note in cash, and
not invest it in a worthless judgment at twenty cents on the
dollar."
Inasmuch as the attorneys for Rich have a common-law lien
upon the judgment which they have against Hayes personally
for their costs of suit, it is not claimed that either of the judg-
ments in Hayes v. Rich can be offset against that ; and upon
the reasons and authorities above presented it is the opinion
of the court that Hayes is not entitled to have either of his
judgments offset against the judgment for two thousand and
ninety-three dollars in favor of Rich. Judgment must accord-
ingly be entered in favor of Rich for both damages and costs
without the setoff claimed.
Motion denied.
The Setting Off of One Judgment against another is the subject of a
note to Coonan v. Loewenthal, 109 Am. St. Kep. 137. See, also, Hayes
▼. Eich, 101 Me. 314, ante, p. 314.
328 American State Reports, Vol. 115. [Maine,
JONES V. JONES.
[101 Me. 447, 64 Atl. 815.]
APPELLATE PRACTICE— Bills of Exceptions— TTh at Must
State. — An excepting party, if he would obtain any benefit from his
exceptions, must set forth enough in the bill of exceptions to enable
the court to determine that the points raised are material and that
the rulings excepted to are both erroneous and prejudicial. It is
not enough that the court can find these characteristics by studying
the report of the evidence in support of the motion for a new trial
when it accompanies the bill of exceptions, unless it is made part
thereof, (p. 329.)
BILLS AND NOTES — Delivery. — A note does not become a
liability until delivery, (p. 331. "l
BILLS AND NOTES — Delivery to Agent — Death of Maker. —
If the maker of a note places it in the hands of a third person merely
for delivery to the payee, such third person is the agent of the maker,
and not of the payee, and if the maker dies before delivery by the
agent, his authority is thereby revoked and a subsequent delivery by
him is ineflfectual to create a liability, (p. 331.)
BILLS AND NOTES — Delivery on Happening of Contingency —
Burden of Proof. — If a note is left with a third person to be delivered
to the payee upon the happening of a contingency, the first delivery
is complete and irrevocable, but the burden of proving such delivery
is upon the person setting it up. (p. 332.)
PARTNERSHIP — Loan to Member of Firm — ^Recovery as
Money had and Received. — If a third person, by mortgage or other-
wise, procures money and furnishes it to a person for the use of a
partnership of which he is a member, he, as a member of such firm,
becomes bound in equity and good conscience to repay such debt and
such loan may be recovered as for money had and received, unless all
or some part of it is barred by limitation and as to the part not so
barred recovery may be had. (p. 333.)
L. C. Steams, T. D. Bailey and J. F. Gould, for the plain-
tiff.
P. H. Gillin and JMartin Cook, for the defendants.
"*'^** SAVAGE, J. Action to recover on three promissory;
notes, one dated February 17, 1896, for fifteen hundred dol-
lars; one dated April 14, 1900, for five hundred dollars; and
one dated February 8, 1901, for five hundred dollars, all pur-
porting to be signed on the face by Silas D. Jones & Sons,
and on the back by Silas D. Jones, individually, and payable
to the plaintiff. There is also a count for money had and
received. The action is against the estate of Silas D. Jones,
of whose will the defendants are the executrices. The defend-
ants deny the execution of the notes, and particularly that
July, 1903.] Jones v. Jones. 829
the individual signature of Silas D. Jones is genuine; they
pleaded the statute of limitations as to the fifteen hundred
dollar note; they claim that the notes never became effective
for want of delivery during the lifetime of Silas D. Jones and
they assert that the plaintiff, having come into possession of
the notes after the death of Silas D. Jones, voluntarily forgave
the indebtedness, surrendered the notes to the executrices
and consented to their destruction, in consideration of the
promise of Sarah C. Jones that she would not thereafter
change the provisions of her will in favor of the plaintiff's
husband, who was the son of Sarah C. Jones.
Nevertheless, the jury returned a verdict for the plaintiff
for the full amount claimed. And the case now comes before
us on the defendants' motion and exceptions. Of the many
exceptions, only one — that relating to the delivery of the
notes — is open to consideration. INIany times the court has
reiterated the rule that an excepting party, if he would
obtain any benefit from his exceptions, must set forth enough
in the bill of exceptions to enable the court to determine that
the points raised are material and that the rulings excepted
to are both erroneous and prejudicial. The bill of exceptions
must show what the issue was, and how the excepting party
was aggrieved. Error must appear aflirmatively: Dennen v.
Haskell, 45 Me. 430 ; ITovey v. Hobson, 55 Me. 256 ; Merrill v.
Merrill, 67 Me. 70; Fairfield v. Old Town, 73 Me. 573; John-
son V. Day, 78 Me. 224, 3 Atl. 637 ; Nutter v. Taylor, 78 Me.
424, 6 Atl. 835 ; Smith v. Smith, 93 Me. 253, 44 Atl. 905, and
many other cases. The bill of exceptions in this case, except
in one instance to be considered later, is '*'** barren of state-
ments to show that the matters complained of were material,
or erroneous or harmful. It is not enough that the court can
find all of these characteristics by studying the report of the
evidence in support of the motion for a new trial, when it
accompanies a bill of exceptions. The bill must be strong
enough to stand alone. The court, in considering the excep-
tions, cannot travel outside of the bill itself. In this respect
the court cannot consider the report of the evidence nor the
charge of the presiding justice, unless they are made a part
of the bill of exceptions. They are not so made in this case.
It will not be necessary to consider all of the questions
argued by counsel. If we assume that the signature of
Silas D. Jones upon the notes was genuine, and that the sur-
330 American State Reports, Vol. 115. [Maine,
render of the notes by the plaintiff was procured by falsehood
and fraud, as she now claims, there is still an insuperable
difficulty in sustaining the verdict. There was sufficient evi-
dence to warrant the jury in finding that Silas D. Jones
negotiated loans at a savings bank on the days and for the
respective amounts for which the notes in suit were given;
that the first loan was obtained upon the note of Storer W.
Jones, plaintiff's husband, and the second and third loans
upon the notes of the plaintiff and her husband, all secured
by the plaintiff's mortgages of her own real estate; that the
first two loans were procured for the use of the firm of Silas
Jones & Sons, of which Silas D. Jones was a member, and the
third for the use of Silas D. Jones' Sons, after Silas D. Jones
had retired from the original firm; and that Storer W. Jones
was a member of both firms. Upon the assumptions above
stated, the jury might properly find, also, that the notes in
suit were, intended by the makers to be collateral security
for the liability of the plaintiff incurred by giving her notes
and mortgages. This is what the plaintiff claims. We think,
too, that a verdict based upon the inference that the notes
were given as a direct liability in consideration of money
procured by the plaintiff for the firm could not in that
respect have been disturbed. In such case it would have
been expected that the plaintiff was to pay the bank loans,
and the signers of the notes in suit to pay them to the plain-
tiff.
^•^^ But the defendants contend that, whatever may have
been the inception of these notes, they were not delivered to
the plaintiff in the lifetime of Silas D. Jones; that so far as
the individual liability of Silas D. Jones was concerned, they
were left by him in the hands of Storer W. Jones, who, as a
member of the firm, was also one of the makers, to be deliv-
ered to the plaintiff; that Storer was the agent for that pur-
pose of Silas, and that Storer 's authority to make delivery
was revoked by the death of Silas, before delivery. It is
not in dispute that Silas D. Jones died August 9, 1903, and
that the notes were not delivered into the posses-sion of the
plaintiff until the following September. And it is admitted
that the plaintiff was in entire ignorance of the existence of
the notes until a week or two before the death of Silas, when
she says she first learned of it from her husband. And it
does not appear that there had ever been any agreement or
July, 1906.] Jones v. Jones. 231
understanding on her part that notes should be given to her
on account of the bank loans.
It is of course well settled that a promissory note does not
become a liability until delivery. It is likewise true that
when the maker places the note in the hands of a third person
merely for delivery to the payee, such third person is the
agent of the maker, and not of the payee. And if the maker
dies before delivery by the agent, the agent's authority is
thereby revoked, and a subsequent delivery by him is ineffect-
ual to create a liability. The plaintiff does not dispute the
principles thus stated, but she attempts to meet and parry
them by another well-established doctrine, and that is, that
when a deed or other instrument, whose validity depends
upon delivery, is left with a third person to be delivered ta
the grantee, or in case of a note, the payee, on the happening
of a contingency, the first delivery is complete, and irrevocable
by death or otherwise: See Hanunon v. Hunt, Fed. Cas. No.
6003, 4 Ban. & A. 411. Sometimes this doctrine is explained
by saying that the depositary, in such case, holds in trust for
the payee until the happening of the contingency, and that
a delivery to the trustee is upon general principles as
effectual as a delivery to the cestui would be. The contention
of the plaintiff is that the notes were made "as collateral
security for the mortgages placed by her upon her property
for the benefit of the firm," and that the delivery ^'^ of the
notes to the payee "was to be conditioned upon the happening
of a contingency," which contingency was the failure of the
makers of the notes "to take care of the mortgages placed
for their benefit by the plaintiff upon the property." And
assuming this contention to be supported by proof, and show-
ing the contingency had happened, her counsel argue upon
the principle of law above stated, that the authority of Storer
"W. Jones to deliver the notes was not revoked by the death
of Silas D. Jones, and that upon such delivery after his
death, the notas became liabilities of his estate ; and, further,
that although the fifteen hundred dollar note was then upon
its face more than six years overdue, yet it was not barred by
the statute of limitations, because that statute did not begin
to run until the note first became a liability, namely, at deliv-
ery to the plaintiff.
If, in face of the apparent want of delivery in the lifetime
of Silas, the plaintiff would obtain the benefit of the rule
332 American State Reports, Vol. 115. [Maine,
she relies upon, it is incumbent upon her to show that when
Silas D. Jones left the notes in the hands of Storer for deliv-
ery to her, that delivery was intended to be conditional upon
the happening of a contingency. Unfortunately for her the-
ory we are unable to find the proof which sustains her burden.
The only contingency suggested was the failure of the makers
of these notes to take care of the bank loans, and pay the
interest when due. But why does the plaintiff say that the
depositary held these notes to be delivered only upon the
happening of this particular contingency? Apparently be-
cause this one fits her case. There is no evidence that Silas
D. Jones left these notes in the hands of his son to be deliv-
ered only upon the happening of any contingency. "We know
nothing of his particular intention or purpose, or directions
further than that it may be inferred that he intended the
notes to be delivered. We know nothing whatever about
these notes until they are found in the possession of Storer,
shortly before the death of Silas. We can only conjecture,
and conjecture is not proof: McTaggart v. Maine etc. R. R.
Co., 100 Me. 223, 60 Atl. 1027. If we might conjecture, we
should say that if the notes were intended as security for the
liability the plaintiff had incurred, it would be more reasona-
ble to think that the security was intended to become effective
from the time her liability attached, than upon the happening
■**** of some future contingency. The plaintiff was liable all
the time. Why should she not have been secured all the
time? We do not think any legitimate inference can be
drawn from the record that the delivery of these notes was to
be conditioned upon the happening of a contingency. And
therefore the plaintiff must fail as to this contention.
But the plaintiff claims further that there was a construc-
tive delivery of the notes before the death of the maker. She
says her husband informed her that he had these notes in his
possession a short time before his father's death. We do not
need to discuss the effect of a constructive delivery to create
a liability upon the notes, for we are unable to persuade our-
selves that the mere fact that her husband told her that such
notes were in existence, and nothing more, can be regarded as
a constructive delivery of them to her.
We conclude, therefore, that the plaintiff was not entitled
to retain a verdict based upon the notes. We turn now to
the count for money had and received. If the plaintiff, by
July, 1906.] Jones v. Jones. 333
mortgage or otherwise, procured money and furnished it to
Silas D. Jones for the use of a firm of which he was a member,
and there is evidence that she did, then he as a member of the
firm became bound in equity and good conscience either to
pay her or pay her debt. If he did not do the one, he ought to
do the other. And we think she might recover for money
had and received.
But there are difficulties here, also. In the first place, the
claim for the fifteen hundred dollars arose when the firm
became indebted to her to that amount in 1896, and that
claim became barred by the statute of limitations, even before
the death of Mr. Jones. In the next place, the evidence in
the case, such as it is, raises the inference, we think, that the
third loan was procured for, and received bj^ the firm of
Silas D. Jones' Sons, and not for the firm of Silas D. Jones &
Sons, Silas D, Jones having gone out of the firm several
months before the loan was procured. The verdict tor
the full amount of the loans and interest was excessive,
therefore, even if based upon the count for money had and
received.
And in the absence of special findings by the jury, the last
difficulty is that we have no means of knowing whether they
founded '*^'* their verdict upon the notes, in whi-^h case it
was wholly wrong, or upon the count for money had and
received, in which case it might be only excessive. From the
amount of the verdict we incline to think that it was based
upon the notes themselves. Under the instruction of the
court, upon the undisputed evidence, the jury might well
find a perfected and valid delivery of all the notes.
Although the motion to set aside the verdict must be sus-
tained, it is expedient to examine the defendants' one excep-
tion that is open to consideration. The jury were instructed
to the effect that if the notes had been delivered as completed
instruments by Silas D. Jones to Storer (one of the members
of the firm) to deliver to his wife, "that delivery might be
perfected, even after the death of Silas." While such an
instruction, as we have seen, might be correct under some
circumstances, and a delivery to an agent for future delivery
to the payee upon the happening of a contingency might be
effective, yet we think, as applied to the evidence in this case,
the rule given without limitation or qualification must be
deemed to be exceptionable error.
Motion and exceptions sustained.
334 American State Reports, Vol. 115. [Maine,
A Negotiable Instrument has no legal inception or valid existence
as such, as a rule, until delivered in accordance with the purpose
and intention of the parties: Purviance v. Jones, 120 Ind. 162, 16 Am.
St. Bep. 319; McCormick etc'Machine Co. v. Faulkner, 7 S. Dak. 363,
58 Am. St. Rep. 839. As to the effect of putting negotiable paper in
circulation in violation of instructions or conditions, see the note to
Bedell t. Herring, 11 Am. St. Bep. 314.
MAY V. PENNELL.
[101 Me. 516, 64 Atl. 885.]
SUICIDE — Attempt to Commit. — In the absence of an express
statute an attempt to commit suicide is not an indictable offense,
(p. 339.)
W. H. Connellan, for the plaintiff.
516 WHITEHOUSE, J. The petitioner was indicted in
the superior court for Cumberland county for the alleged
crime of attempting to commit suicide, and upon conviction
was sentenced at the May term, 1906, to imprisonment at labor
in the county jail for the term of eleven months. Thereupon
he presented to a single justice his petition ^^"^ for a writ of
habeas corpus, to obtain a release from imprisonment on the
ground that the act charged in the indictment is not a crime
in this state, and that the sentence inflicted upon him was
not warranted by law. The justice overruled this contention
pro forma, and refused to discharge the petitioner. The case
comes to the law court on exceptions to this ruling.
By the early common law of England suicide was ranked
among infamous crimes and held to be a "species of felony."
It was punished by a forfeiture to the king of the goods and
chattels of the felo de se, and an ignominious burial in the
highway with a stake driven through his body: 4 Blackstone's
Commentaries, 189. But aside from the mental suffering
which might thus be inflicted upon innocent surviving rela-
tives of the suicide by a desecration of his body, it was not in
the power of human tribunals to impose any other punishment
than the forfeiture of his estate; and "since forfeitures for
crime are not practiced in our states," says Mr. Bishop,
"suicide is not practically an offense with us": Bishop on
Criminal Law, 1, sec. 512, 2, sec. 1187. No case has been
Aug. 1906.] May v. Pennell. 335
brought to the attention of the court in which it has been held
in any of the United States that suicide is a punishable
offense. Although it may be deemed ethically reprehensible
and inconsistent with the public welfare, it has never been
declared by the legislature or held by the court of this state,
to be such a public wrong as will subject the doer to legal
punishment. Section 1 of chapter 136 of the Revised Statutes
declares that "when no punishment is provided by statute,
a person convicted of an offense shall be imprisoned for less
than one year or fined not exceeding five hundred dollars."
But even if suicide is deemed to be criminal as malum in se,
neither of the penalties specified in this statute can be inflicted
upon one whose life is ended.
Nor is there any statute in this state which constitutes an
attempt to commit suicide a substantive offense or makes it
subject to Tegal punishment. Section 9 of chapter 132 of the
Revised Statutes provides as follows: "Whoever attempts
to commit an offense, and does anything toward it, but fails,
or is interrupted, or is prevented in its execution, where no
punishment is expressly provided for such attempt, shall, if
the offense thus attempted is punishable with imprisonment
for life, be **** imprisoned for not less than one, nor more
than ten years; and in all other cases he shall receive the
same kind of punishment that might have been inflicted if
the offense attempted had been committed, but not exceeding
one-half thereof." But here again it is obvious that cases of
suicide were not within the contemplation of the legislature
in the enactment of this statute. As no penalty of any kind
is attached to suicide if actually committed, there could be
no punishment whatever by force of this statute for an
attempt to commit it.
In the absence of any statute in this state expressly making
an attempt to commit suicide a punishable offense, it is there-
fore difficult to discover any satisfactory ground upon which
the sentence in this case can rest : for it would appear to be a
palpable .solecism in the law to declare that a mere attempt
to commit an act which is not penal is itself punishable.
It is suggested, however, that inasmuch as suicide was a
"species of felony" by the common law of England, and an
attempt to commit suicide was there held to be a misdemeanor,
it became incorporated in the common law of Massachusetts
as a substantive offense, and in this state is subject to the
336 American State Reports, Vol. 115. [Maine,
provisions of section 1 of chapter 136 of the Revised Statutes
above quoted, declaring that "when no punishment is pro-
vided by statute, a person convicted of an offense shall be
imprisoned less than one year, or fined, etc. ' '
The only English cases that have been cited in any of the
text-books or cyclopedias as authority for the doctrine that
an attempt to commit suicide was a misdemeanor by the com-
mon law of England are Regina v. Doody, 6 Cox C. C. 463,
and Regina v. Burgess, 9 Cox C. C. 247. The former case is
simply the report of a nisi prius ruling at a trial, in which
the prisoner was not defended by counsel. In the latter case
the defendant pleaded guilty, and the question reserved for
the court of criminal appeals was primarily one of jurisdic-
tion. It was contended in behalf of the defendant that an
attempt to commit suicide was an attempt to commit murder
within the meaning of chapter 100 of 24 and 25 Victoria, and
hence was not within the jurisdiction of the county assizes;
but the court held that though suicide was deemed a felony
in England, it was not murder within the meaning of the act
named, and that the attempt to commit '^'^ suicide was a mis-
demeanor and within the jurisdiction of that court; but sen-
tence was respited.
"An attempt," says Mr. Bishop, "is an intent to do a par-
ticular thing which the law, either common or statutory, has
declared to be a crime, coupled with an act toward the doing
of it": 1 Bishop on Criminal Law, sec. 728: while a substan-
tive offense is one depending on itself alone and not on
another offense to be first established by the conviction of the
person who directly committed it": 1 Bishop on Criminal
Law, sec. 696. It is not claimed that the attempt to commit
suicide was ever made a substantive offense by any act of the
British parliament, and there is no suggestion in the brief
oral utterances of the judges in the English cases above cited
that the misdemeanor of which the defendant was in each
instance there convicted was other than the ordinary attempt
to commit a punishable felony ; it is not suggested that it was
a substantive offense by the law of England. If the accom-
plished act of suicide had not been a punishable crime, the
attempt to commit the act could not have been held to be a
punishable misdemeanor. For it has been seen that an at-
tempt involves an "intent to do a particular thing which the
law declares to be a crime," and the word "crime" or
Aug. 1906.] May v. Pennell. 337
** offense," as ordinarily used in legislative enactments hy
text-writers on criminal law and in the practical administra-
tion of it by the courts, uniformly signifies a public wrong
which subjects the perpetrator to legal punishment : Standard
Dictionary; 1 Bishop on Criminal Law, 32. In accordance
with this view is the statement of Mr. Bishop, as above
sho\^^l, that suicide is "not practically an offense with us."
But an attempt to commit an act which is not "practically a
crime" is not itself "practically criminal," because nut
punishable. In JNIassachusetts forfeitures were abolished
by the "Body of Liberties" of 1641, the statute providing for
an ignominious burial of the suicide fell into disuse at the
close of that century and the colony act of 1660 was repealed
in 1823. Thus the common law of England upon this subject
was modified in Massachusetts, and suicide ceased to be a pun-
ishable offense. The groundwork for the English doctrine
that an attempt to commit it was a misdemeanor was thus
removed. If it was a misdemeanor by the common law of
England, it ceased to be such under the law of ^^^ Massa-
chusetts and has never been recognized as a part of the com-
mon law of Maine. "Reason is the soul of the law," says
Lord Coke, "and when the reason changes the law also
changes": 7 Coke, 7. Although there have been attempts
to commit suicide in great numbers in the history of both
Massachusetts and Maine, in no instance which this court
has been able to discover has there been a conviction of such
an attempt before any cpurt prior to the case at bar.
In Commonwealth v. Dennis, 105 Mass. 162, it was dis-
tinctly held that "an attempt to commit suicide was not an
indictable offense in that commonwealth"; but the decision
re.«5ts upon the construction of their statutes, which, however,
are in substance and effect precisely like our own. In the
opinion the court say: "In this commonwealth the whole
matter of punishments for all attempts to commit an offense
prohibited by law, where no express provision is otherwise
made, ha.s been subject to revision by statute." After stating
the provision of the statute in terms like section 9, chapter
132 of our statutes above quoted, the court add : * ' The attempt
to commit suicide is thus left without punishment, because the
act itself could never be punished by any of the modes stated.
By a well-established rule of the construction of statutes, the
common law is held to be repealed by implication, when the
Am. St. Rep., Vol. 115—22
338 American State Reports, Vol. 115. [Maine,
whole subject has been revised by the legislature: Common-
wealth V. Cooley, 10 Pick. 37; Commonwealth v. Marshall, 11
Pick. 350, 22 Am. Dec. 377; Lakin v. Lakin, 2 Allen, 45.
This rule requires us to look to the statute alone for the
punishment, if any, aflSxed to the act here indicted. If it
is not there made punishable, it is enough, whatever the
reason which induced its omission. The end of punishment is
the prevention of crime, and it may have been thought at least
impolitic to punish an attempt to do that which is itself dis-
punishable, when the direct effect of the penalty must be to
increase the secrecy and eflficiency of the means employed to
accomplish the end proposed."
It is true that in Commonwealth v. Mink, 123 Mass. 422,
25 Am. Rep. 109, it was held that suicide must still be
deemed criminal as malum in se, and although an attempt to
commit suicide is not punishable, yet a person who, in at-
tempting to commit it accidentally kills another who is trying
to ^^^ prevent its accomplishment is guilty of manslaughter.
But Chief Justice Gray, trho drew the opinion in the latter
case, appears to have concurred in the former, and expressly
states in his opinion that * ' the conclusion reached in Common-
wealth V. Mink, 123 Mass. 422. 25 Am. Rep. 109, is not af-
fected by the fact that the legislature having in the general re-
vision of the statutes measured the degree of punishment pre-
scribed for attempts to commit offenses by the punishment
prescribed for such offense if actually committed, has inten-
tionally or inadvertently left the attempt to commit suicide
without punishment, because the completed act would not be
punished in any manner"; citing the former case of Common-
wealth V. Dennis, 105 Mass. 162.
The question arose under the Penal Code of Hawaii in
1868, upon a demurrer to an indictment for an attempt to
commit suicide, and the demurrer was sustained and the
indictment quashed. In the opinion of the court published
in 2 American Law Review, 794, Chief Justice Allen says in
conclusion: "The wisdom of legislative power has never
deemed it wise to make a provision to apply to the act charged
against the defendant, and we are of opinion that we should
be slow to give an entirely new construction to the code
concerning murder, and to impose a punishment never con-
templated, and of the wisdom of which the framers of the
law have not yet expressed a favorable opinion We
Sept. 1906.] Brown v. Smith. 339
find no statute of any country nor any provision of tlie com-
mon law which will sustain this indictment."
By section 178 of the Penal Code of New York, however,
enacted in 1881, "Every person guilty of attempting suicide
is guilty of felony, punishable by imprisonment in a state
prison not exceeding two years or by fine not exceeding one
thousand dollars, although no forfeiture is imposed in the case
of the "successful perpetrator." These sections of the New
York code are incorporated in the codes of North and South
Dakota. But these provisions appear to have fallen into
utter disuse; for we have been unable to find any reported
convictions for this offense in either state since the adoption
of this code. And although there have doubtless been
innumerable attempts to commit suicide in the United States,
no instance has been discovered in which there has been a con-
viction for this offense on '^^^ either statutory or common-
law grounds, prior to that in the case at bar.
It is accordingly the opinion of the court that an attempt
to commit suicide is not an indictable offense in this state,
and that entry should be, exceptions sustained.
Prisoner discharged.
Suicide is not generally regarded as a crime, although some authori-
ties seem to regard an attempt to commit suicide as a public offense:
Darrow v. Family Fund Society, 116 N. Y. 537, 15 Am. St. Rep. 430;
Eoyal Circle v. Achterrath, 204 111. 549, 98 Am. St. Eep. 224; Burnett
V. People, 204 111. 208, 98 Am, St. Kep. 206.
BROWN V. S:\IITH.
flOl Me. 545, 64 Atl. 915.]
EXECUTORS AND ADMINISTRATORS— Limitation of Power.
The power and autliority of an administrator or executor over the
estate of the deceased is confined to the sovereignty by virtue of
whose laws he is appointed, (p. 340.)
EXECUTORS AND ADMINISTRATORS— Foreign Decedents—
Ancillaxy Administration. — If assets of a foreign decedent are found
within the state, ancillary administration must be obtained therein
for the protection of resident creditors, before the courts of Buch
•tate will enforce the recovery of debts due the foreign decedent, (p.
842.)
340 American State Reports, Vol. 115. [Maine,
ADMINISTRATORS — Foreign — Assignment of Mortgage. — An
administrator in one state cannot, by virtue of letters granted in an-
other state, assign a mortgage of land situated in the first-named
state, so as to enable the assignee to enforce payment thereof, (p.
342.)
F. W. Brown, Jr., and W. H. McLellan, for the plaintiff.
R. F.- Dunton and W. P. Thompson, for the defendant.
646 POWERS, J. Writ of error to recover certain lands
in Thorndike. The case comes here on report.
To make out title plaintiff introduced (1) a duly recorded
mortgagre of the demanded premises from Albert D. Bumps, of
Thorndike, Maine, to George Tyler, of Boston, Massachusetts,
dated" May 28, 1887, given to secure a certain execution and
judgment recovered by said Tyler against said Bumps in this
court in said Waldo county; (2) copies of records of the
probate court of Middlesex county, Massachusetts, showing
that December 10, 1889, Isabella J. Tyler of Waltham, in the
county of Middlesex, was duly appointed administratrix
^^"^ of the estate of George Tyler, late of said Waltham,
deceased; (3) assignment from said administratrix to the
plaintiff of said mortgage, duly recorded and dated November
21, 1904. This makes a prima facie case, if an administratrix
appointed in another state has power to assign a mortgage
given to her intestate upon real estate in this state.
It is a well-settled principle of the common law that the
power and authority of an administrator or executor over the
estate of the deceased is confined to the sovereignty by virtue
of whose laws he is appointed. In recognition of this principle
provision is made by our statutes for the granting of ancillary
administration on the estate of nonresidents, who die leaving
estate to be administered in this state, or whose estate is after-
ward found therein : Rev. Stats., c. 65, sec. 7, c. 66, sees. 14-16. •
One reason at least upon which this rule is founded is to
prevent the effects or credits of the deceased found in any
state which may be needed to satisfy debts due to the citizens
of that state from being withdrawn from its jurisdiction.
That no such necessity in fact exists can never be known
with certainty in any given case unless administration is
granted, and an opportunity thereby afforded to creditors
to present their claims : Mansfield v. McFarland, 202 Pa. 173,
51 Atl. 763. It is said in Steams v. Bumham, 5 Me. 261, 17
Am. Dec. 228, that the principles of justice and policy upon
Sept. 1906.] Brown v. Smith. 341
which similar statutes to those above cited were found "would
seem to lead our courts of law to that course of proceedings
which would harmonize with those principles and have a mani-
fest tendency to produce the same beneficial results." In
that case it was accordingly held that an executor appointed
under the laws of another state cannot indorse a promissory
note payable to his testator by a citizen of this state, so as to
give the indorsee a right of action here in his own name.
The debt due from Bumps, who at the time of the recovery
of the judgment and ever since has been a resident of this
state, constituted no part of the goods, effects, rights and
credits of the intestate in IMassachusetts, which alone the
administratrix was authorized and empowered to administer.
The debt follows the creditor while living; after his death it
follows the debtor : Saunders v. Weston, ^*® 74 Me. 85. The
situs of the debt being in Maine, the administratrix, deriving
her authority solely from the laws of Massachusetts, had no
control over it.
There is even stronger reason for holding that she had no
control over the mortgage. A mortgage and its assignment
are conveyances of land in fee which must be recorded. It
is desirable that title to real estate should so far as possible
appear of record. The party having a right to redeem ought
to be able, by an examination of the records in the registry of
deeds and the probate courts of this state, to ascertain who
is entitled to receive payment and give a discharge of the
mortgage, without being compelled at his peril to incur the
expense of searching the records of other states and countries.
"Without doing this the defendant in the present case could not
know until the evidence was produced at the trial that the
plaintiff's assignee had ever been appointed administratrix
of the deceased in the place of his domicile. The courts of
^ra.s.sachu.setts in a case which has been frequently cited and
followed in that state have decided the precise point here
presented against the plaintiff's contention : Cutter v. Dav-
enport, 1 Pick. 81, 11 Am. Dec. 149. The question is a new
one in this state; but the trend of our decisions has been to
restrict the power of a foreign administrator to the jurisdic-
tion of his appointment: Stevens v. Gaylord, 11 Ma.ss. 256;
Stearns v. Burnham. 5 Me. 261, 17 Am. Dec. 228; Smith v.
Guild, 34 Me. 443; Oilman v. Oilman. 54 Me. 453; Smith v.
Howard, 86 Mc. 203, 41 Am." St. Rep. 537, 29 Atl. 1008; Green
V. Alden, 92 Me. 177, 42 Atl. 358.
342 American State Reports, Vol. 115. [Maine,
It may fairly be regarded as the settled policy of this state
that, when assets of a foreign decedent are found here, ancil-
lary administration must be obtained here for the protection
of resident creditors, before our courts will enforce the recov-
ery of debts due the foreign decedent. Otherwise the assets
could be converted into money, taken outside the state, dis-
tributed under the jurisdiction of foreign courts, and our
citizens compelled to go into other jurisdictions to collect
their just dues. Such is the general rule: Note to Shinn's
Estate, 45 Am. St. Rep. 667 ; Maas v. German Sav. Bank, 176
N. Y. 377, 98 Am. St. Rep. 689, 68 N. E. 658.
Inasmuch, therefore, as ample provision is made by our
statutes for the granting of ancillary administration in this
state, a course '^^ which seems to be in accord with our
legislative policy and judicial decisions, and may in any case
be necessary for the protection of our citizens who are
creditors of the estate, in view also of the fact that it is
desirable so far as possible that title to real estate should
somewhere appear of record in this state, we hold, in accord-
ance with Cutter v. Davenport above cited, that an adminis-
trator cannot, by virtue of letters granted in another state,
assign a mortgage of land situated in this state, so as to en-
able the assignee to enforce payment thereof: Dial v. Gary,
14 S. C. 573, 37 Am. Rep. 737; 18 Cyc. 1231; Reynolds v.
McMullen, 55 Mich. 568, 54 Am. Rep. 386, 22 N. W. 41. The
right of a foreign administrator to receive a voluntary pay-
ment and give a discharge of a debt so paid is not involved
in this case.
Judgment for the defendant.
Letters of Administration have do extraterritorial operation, and do
not, as a matter of right, confer authority upon the administrator to
maintain a suit in another state: Grayson v. Robertson, 122 Ala. 330,
82 Am. St. Rep. 80; Maas v. German Sav. Bank, 176 N. Y. 377, 98
Am, St. Rep. 689. Perhaps, however, his assignee may maintain such
a suit (note to Shinn's Estate, 45 Am. St. Rep. 673), except where the
assignment is of a mortgage on real estate: Dial v. Gary, 14 S. C. 573,
37 Am. St. Rep. 737; Reynolds v. McMullen, 55 Mich. 568, 54 Am. Rep.
386.
CASES
IN THE
COURT OF APPEALS
OP
MARYLAND.
WOOD REAPING AND MOWING MACHINE COMPANY
V. ASCHER.
[103 Md. 133, 62 Atl. 1023.]
GUARANTY OF PAYMENT of Promissory Note, Efifect of.—
The guaranty of the payment of a promissory note is absolute, and it
is not necessary, if the note is not paid at maturity, for the payee
to show that he has exhausted his remeaies against the maker or that
the latter is insolvent, (p. 345.)
Hope H. Barroll and James P. Gorter, for the appellant.
No appearance for the appellee.
i»» SCHMUCKER, J. The appellant corporation sued
the appellee in the circuit court for Kent county, upon his.
written guaranty of the payment of the promissory note of
C. R. Atkinson. The defendant pleaded the general issue.
At the trial of the case, before the court without a jury, the
plaintiff's prayer was rejected and the defendant's prayer,
asserting the want of legally sufficient evidence to entitle
the plaintiff to recover, was granted. A verdict and judg-
ment were entered for the defendant and the plaintiff ap-
pealed.
The note was in the following form:
"$100. Chestertown, September 1, 1901.
"On or before the first day of September, 1902, I, ,
of Chestertown Post Office, Kent County, Md., for value re-
ceived promise to pay to the order of The Walter A. Wood
Mowing and Reaping Machine Co. one hundred dollars. Pay-
able at Chestertown National Bank, Md., *^'* with interest
at legal per cent per annum from September 1, 1901, until
paid. C. R. ATKINSON."
(343)
344 American State Reports, Vol. 115. [Maryland,
On the back of this note was written the following guar-
anty:
* ' For value received I hereby guarantee the payment of the
within note. Demand for payment, protest and notice of pro-
test waived. MARCUS J. ASCHER."
The signatures to the note and the guaranty were admitted,
and there was evidence tending to show that the note had
been given by its maker in part payment for a mowing ma-
chine sold to him by Ascher as the plaintiff's agent.
The only bill of exceptions in the record is to the rulings
of the circuit court upon the prayers. The plaintiff offered
one prayer which asked the court to rule as matter of law
that if it appeared from the evidence that the note in question
was executed by Atkinson and the guaranty thereon was ex-
ecuted by Ascher and the note was then passed to the plain-,
tiff in part payment for the machine, and that no portion of
the note was ever paid, then the verdict must be for the plain-
tiff for the amount of the note and interest, less any credits
thereon to which Atkinson appeared to be entitled.
This prayer the court rejected and granted the one of the
defendant, asserting that there was no legally sufificient evi-
dence to entitle the plaintiff to recover.
We have not the benefit of any expression by the learned
judge below of the views which led to his action upon these
prayers, nor do we find in the record any sufficient support
for that action.
No brief was filed in this court on behalf of the appellee,
and the case was submitted to us by both parties without ar-
gument. It is stated, however, in the brief filed by the appel-
lant that the judge who heard the case was of the opinion
that the guaranty sued on was a conditional one, and that
therefore the plaintiff's case was defective, because it had
offered no evidence tending to show either the exhaustion by
it of its remedies against the maker of the note before suing
the guarantor or the insolvency of the maker. If such was
the view of the case entertained by the judge of the circuit
court, he fell into an error.
*^ The guaranty is in terms predicated upon no contin-
gency, nor is it merely one of the collectibility of the note.
It is a distinct and unequivocal guaranty of the payment of
that obligation. Such a guaranty is uniformly treated by
the leading text-books as an absolute one: 2 Randolph on
Feb. 1906.] Wood etc. Mowing Machine Co. v. Ascher. 315
Commercial Paper, 2d ed., c. 26, par. 850; Daniel on Nego-
tiable Instruments, 5th ed., p. 799; 1 Brandt on Suretyship
and Guaranty, sec. 220; Stearns on Suretyship, sec. 61; 14
Am. & Eng. Ency. of Law, p. 1142, where it is said upon the
authority of many cases that "the most usual form of abso-
lute guaranty is that of payment." In Townsend v. Cowles,
31 Ala. 428, the court held the words "I guarantee the pay-
ment of the within" indorsed on a promissory note and
signed by the defendant to constitute an absolute engagement
to pay the debt when due on default of the maker, and per-
mitted the holder of the note to recover from the guarantor
without proof of having attempted to recover of the maker.
In Hungerford v. O'Brien, 37 Minn. 306, 34 N. W. 161, it was
held that the indorsement on a note of the words "For value
I hereby guaranty the payment of the within note to Cassie
Hungerford or bearer" constituted an absolute guaranty.
The court in that case said : ' ' The nature of the obligation of
the guarantor is affected by the character of the principal
contract to which the guaranty relates. The note expresses
the absolute obligation of the maker to pay the sum named
at the specified date of maturity or before. The guaranty
of the payment of the within note imported an undertaking,
without condition, that, in the event of the note not being
paid according to its terms — that is, at maturity — the guar-
antor should be responsible. The nonpayment of the note at
maturity made absolute the liability of the guarantor, and
an action might at once have been maintained against him
without notice or demand. Such was the effect of the un-
qualified guaranty of the payment of an obligation which was
in itself absolute and perfect and certain as respects the sum
to be paid and the time when payment should be made, all
of which was known to the guarantor, and appears upon the
face of the contract. The liability of the guarantor thus be-
coming *^** absolute by nonpayment of the note, the neglect
of the holder to pursue such remedies as he mitrht have against
the maker (the guarantor not having required him to act)
would not discharge the already fixed and absolute obliga-
tion of the guarantor, nor would neglect to notify the guar-
antor of the nonpayment have such effect."
The same doctrine has been asserted or recognized by this
court in Heyman v. Dooley. 77 ^Id. 162, 26 Atl. 117, 20 L.
R. A. 257, Emerson v. Aultman. 69 Md. 125, 14 Atl. 671.
and Mitchell v. MeCleary, 42 Md. 374.
346 American State Eeports, Vol. 115. [Maryland,
The judgment appealed from must be reversed and the
case remanded for a new trial.
Contracts of Guaranty are discussed at length in the note to Pear-
sell Mfg. Co. V. Jeffreys, 105 Am. St. Eep. 502. If one makes an ab-
solute guaranty of the payment of a promissory note, in an action
thereon, presentation of the note to the maker when due, request to
pay, and notice to the guarantor of dishonor need not be alleged, nor
is the guarantee under any legal obligation to first resort to the
maker of the note or to any securities held for payment: Fegley v.
Jennings, 44 Fla. 203, 103 Am, St. Rep. 142,
MARYLAND TELEPHONE AND TELEGRAPH COM-
PANY V. SIMON SONS COMPANY.
[103 Md. 136, 63 Atl. 314.]
SPECIFIC PERFORMANCE— Injunction, Bill for, When
Equivalent to a Suit for. — A bill enjoining a telephone company from
charging a higher rate for its telephones than is specified in a con-
tract is equivalent to a bill for the specific performance of such con-
tract, and the suit must be determined by the application of the same
principles, (p. 349.)
TELEPHONES — Construction of Contract and Ordinance for
the Furnishing of. — A contract and a municipal ordinance for the
supplying of telephones means such as will furnish the most effective
service then in use. (p. 351.)
AN INJUNCTION Should be Denied When Its Enforcement
will Render a Service Corporation Insolvent and unable to proceed
with its business. Therefore, a bill against a telephone corporation
to compel it to furnish telephones and telephonic service at the rate
specified in a contract and in a municipal ordinance should be dis-
missed and the complainants left to their remedy at law, if it is not
possible to furnish the service at the rate specified and to do so will
make the company insolvent and unable to perform its obligation to
the public, (p. 353.)
Edgar H. Gans and William L. Marbury, for the appel-
lant.
William S. Bryan, Jr., J. Walter Lord, John Stonewall, J.
Healy and Leon E. Greenbaum, for the appellees.
138 PAGE, J, This is an appeal from a decree of the lower
court restraining the appellant from exacting or requiring
of the appellees a greater rate of rental than $48 per annum
for business telephones and service connections on a one
party, double copper wire metallic circuit, central energy
Feb. 1906.] Maryland etc. Tel. Co. v. Simon Sons Co. 347
system, with unlimited calls, and declaring that such leases
are illegal and void, so far as they provide for rates in ex-
cess of the said sum of $48 per annum ; and further restrain-
ing the appellant from refusing to continue the said service
so long as the appellees tender and pay therefor a rental
at the rate of $48 per annum.
Many of the legal questions affecting the cause have been
heard and decided in a former appeal reported in 99 Md. 142,
which arose upon demurrer to the appellees' bill. We refer
to the proceedings in that case for a fuller statement of the
averments of the bill, and also for the several questions that
must be taken as settled here. The cause having been re-
manded to the lower court for further proceedings, the appel-
lant answered the bill, and testimony was taken by each party,
and the decree was rendered from which this appeal is taken.
In its answer the appellant admits that it has charged for
telephone service at the rates stated in the bill, but' denies
these rates are in excess of the amount it is entitled to charge ;
that ordinance No. 110 was enacted as stated in the bill,
and was accepted by the appellant: that it has established
a large and effective telephone system in Baltimore City to
over seven thou.sand subscribers; but it denies that the cen-
tral energy system had been supplied prior to or at the time
of the enactment of ordinance No. 110, but, it is averred,
an inferior system known as the trunking system was then
in general use by the company. It denies that it has charged
higher rates for telephone service, such -as it is now supplying,
It avers that the said rates are reasonable, and that since
the time of the enactment of the ordinance referred to, "or-
dinary" telephone equipment did not include a metallic cir-
cuit nor the central energy feature. That at that time there
were only five hundred in the city, and the central energy
system was unknown, and therefore *** these were not then
contemplated, and it was not intended that the appellant
should be prohibited from making special contracts at special
rates for special or improved equipment. It admits that
when it first began operations in Baltimore City it supplied
a metallic circuit, not because it was under legal obligation
to do so, according to the terms of the ordinance, but "for
purely business rea.sons," made to compete with its powerful
rival, the Chesapeake and Potomac Telephone Company. It
avers that this wa.s continued long after it was financially
profitable to do so. That as the number of telephones in-
348 American State Reports, Vol. 115. [Maryland,
creased the cost per telephone also increased, and it. finally
became impossible to supply the best service at the rates men-
tioned in the ordinance. That it therefore became and was
necessary to adopt a scale of charges, regulated to some ex-
tent by the number of calls per day required by the sub-
scriber. That the rates charged are reasonable, the highest
being seventy-two dollars per annum and the lowest sixty
dollars, etc.
The testimony taken by both parties shows the contracts
entered into between the appellant and the appellees, the kind
of service rendered by the former, the cost of supplying it
per 'phone, the several kinds of equipment needed, and the
financial status of the appellant, and the conditions existing
at the time of the passage of the ordinance.
The court, in the case reported in 99th Md., overruled
the demurrer to the bill filed by the telephone company, and
in its opinion decided as follows:
1. That there was nothing in the previous legislation of
1892, chapter 387, or in the act of 1894, chapter 207, to pre-
vent the appellant from making the contract, which the ap-
pellant made, to furnish the citizens of Baltimore with tele-
phone service at the rates specified in ordinance No. 110.
2. That the kind and description of equipment and service
that was to be supplied must be sought for, not in the law
theretofore existing, but in the contracts that were made.
3. That the "most natural and reasonable construction
to be given or meaning to be imputed to word 'telephone' as
used in the ordinance" is the "telephone with all improve-
ments, *^® equipments and appliances essential in its opera-
tion to make it most effective in use"; and if any other con-
struction is to be applied, it can be only after it is made to
appear from all the "circumstances and conditions surround-
ing the parties to the contract at the time of the making of
the contract that such was the intention,"
4. That the design of the ordinance was to promote the
public welfare, and to that extent was more than "a mere
contract." That the ordinance was within the authority and
power of the mayor and city council, and that the appellant
at the time had the right to refuse to accept its terms, but it
cannot now object that the regulation of rates therein con-
tained is not a reasonable one.
5. And finally, that the ordinance imposed upon the appel-
lant "a duty to the general public which the members thereof
Feb. 1906.] Maryland etc. Tel. Co. v. Simon Sons Co. 349
have a right to enforce against it in conditions which will
show that is violating such duty."
It is contended upon the part of the appellant that the
legal effect of the bill is practically to bring about the en-
forcement of the contract contained in the ordinance, and
that therefore the principles regulating the specific enforce-
ment of contracts must govern. The appellees claim to have
the right to require the telephone company to furnish tele-
phone service at $48 per annum, because of its contract with
the city, as embodied in the ordinance No. 110. The plain
purpose of this bill is to secure the telephone service, at the
rates prescribed, and it is sought to reach this end by an in-
junction, forbidding and restraining the appellant from in-
terfering with the 'phones, and also from charging or exact-
ing more than forty-eight dollars per annum. Should such
an injunction issue, it is clear there would be accomplished
everything a decree for the specific execution could effect.
It would prevent the removal of the 'phones, and require the
continuance of the service at a rate not exceeding $48 per
annum, and this being so, the bill must be taken as one for
the enforcement of the contract; and therefore all the prin-
ciples which apply to the case of a bill for specific perform-
ance must be applicable here. This court *** in Gurley v.
IIite?hue, 5 Gill, 217, said: "All the principles which apply
to the case of a bill for specific performance apply with equal
force to the ca.se of a bill for perpetual injunction, when
that injunction accomplishes all the objects which could be
accompli.shed by a successful prosecution of a formal bill for
specific execution." This doctrine so stated has substantial
support in many cases in this state as well as elsewhere : Can-
ton Co. V. Northern C. R. R. Co., 21 Md. 383.
In Strang v. Richmond etc. R. R. Co., 101 Fed. 511, 41
C. C. A. 474, where the complainant sought to use the process
of the court to compel by indirection the specific perform-
ance of a contract to build a railroad, after citing the last-
mentioned case, the court said : "We are clearly of the opinion
that it [the bill] does not show such a contract as a court
of equity can enforce by decree, and failing in that, it fol-
lows that an injunction which was intended to aid the gen-
eral relief sought by the bill was improperly granted." The
same general principle was recognized in the case of Ryan
v. McLane, 91 Md. 175, 80 Am. St. Rep. 438, 46 Atl. 340^ 50
L. R. A. 501, where this court held that a contract which has
350 American State Reports, Vol. 115. [Maryland,
for its main object the placing of a great corporation in the
control of the complainant and his undisclosed associates,
will not be specifically enforced, as being against public pol-
icy. It is settled that the "specific execution of contracts by
courts of equity is not a matter of absolute right in the party
applying, but of sound discretion in the court, to be exercised
upon consideration of all the circumstances of each particu-
lar case. The court will be controlled, of course, in the ex-
ercise of its discretion by the established doctrines and settled
principles upon the subject ; but it does not follow, as matter
of course, that because the legal obligation under the con-
tract may be perfect, therefore the equitable power of the
court will be exercised to compel or affect specific execution ' ' :
Semmes v. Worthington, 38 Md. 298.
So in the case of Curran v. Holyoke Water Power Co.,
116 Mass. 90, where the bill w^as to enforce specific perform-
ance of an agreement of purchase of a parcel of land, by a
party who had paid the purchase money and entered into
*'*^ possession, the court held that his right rested in the dis-
cretion of the court, to be exercised upon equitable considera-
tions in view of all the circumstances; it was noted that the
rights of other parties who have in good faith purchased
lots, erected buildings, have intervened: ''and although
these rights are subsequent in point of time, and there-
fore subordinate to those of the plaintiff, yet they furnish
equitable consideration to be regarded in adjudicating the
rights between the parties to this suit." There is a broad
distinction between the case of a plaintiff seeking a specific
performance in equity and the case of a defendant. In Mc-
Cutcheon v. Raleigh (Ky.), 76 S. W. 51, the court said : "If to
enforce specifically an agreement would do one party great in-
jury, and the other comparatively little good, so that the result
would be more spiteful than just, the chancellor will not re-
quire its execution": See, also, St. Regis Paper Co. v. Santa
Clara Lumber Co., 67 N. Y. 149, 55 App. Div. 225. The for-
mer is not of absolute right in the party, but of sound discre-
tion in the court ; and it will not be granted, but the party will
be left to his remedy at law, when the performance has become
impossible, or the decree would be inequitable under all the
circumstances of the case: 2 Story's Equity Jurisprudence,
sees. 750, 759; Pomeroy's Equity Jurisprudence, p. 2164,
sec. 1405, note 2; Fry on Specific Performance, sec. 251,
note a.
Feb. 1906.] MaryiiANd etc. Tel. Co. v. Simon Sons Co. 351
The complaint of the appellees is, that the appellant refuses
to furnish the appellees with telephone service at the rates
mentioned in ordinance No. 110, and now proposes to remove
the 'phones from their places of business unless they agree
to pay therefor a higher rate. And their contention is, that
the appellant has no power under the ordinance to make such
higher charges for any kind of service. On the other side,
it is insisted that inasmuch as the ordinance does not describe
the equipment to be furnished, for which the charge is to be
made, and the words used are indefinite, the facts existing
at the time of the passage of the ordinance show that the
word "telephone" was intended to include only such tele-
phones as were operated upon the grounded circuit service —
and not the metallic ^*^ service, and the ordinance should
be so construed. But the proof shows much uncertainty upon
this point. At the time the ordinance was passed both the
metallic and grounded circuits were in general use. The
Chesapeake and Potomac Telephone Company, in 1896, was
the only company doing business in Baltimore City. It had
then about two thousand seven hundred subscribers, of which
two thousand were the grounded circuits and seven hundred
were metallic. There w^as some conflict in the testimony as
to the efficiency of these respective methods — and there is
also testimony tending to show that that company had begun
the execution of a purpose of gradually converting its sys-
tem to the metallic; and also that the grounded system was
growing more or less obsolescent, although it was regarded
as effective within a limited radius. By letters and adver-
tisements written to individuals and generally distributed,
the appellant publicly and widely proclaimed that it was
about to enter into competition with the "present local com-
pany." It offered greatly reduced rates; and in one of
these public notices it stated that the equipment would in-
clude "every telephone on copper wire metallic circuit and
equipped with a long di.stance transmitter; business tele-
phone, $48; residence, $36." There is no evidence which
shows specifically that the "telephone" referred to in the
ordinance was to be one ba.sed upon any particular system,
but the declarations of the appellant and the preamble of
the ordinance showed that it had in contemplation a ser-
vice equal in every respect to that furnished by its rival,
the Chesapeake and Potomac Telephone Company. In the
view we take of the case it is not necessary to decide the
352 American State Reports, Vol. 115. [Maryland,
matter more definitely than this court has already done in
the decision in 99 Md., that the telephone mentioned in the
ordinance must be understood to mean such as would fur-
nish the most effective service then in use.
Aside from this question, however, there are other consid-
erations which must control this case.
There is proof that the appellant has now between seven
and eight thousand subscribers, of whom there are only
eighteen parties to this proceeding or who are now seeking
relief of any ^'^ kind from the appellant. There are about
eight hundred who are passive, and the residue have entered
into the new contracts at $72 per annum.
It seems to be conceded that it is a law applicable to the
telephone service that the cost per 'phone increases in rapid
ratio as the number of telephones increases. The appellant
beginning business upon the passage of the ordinance in 1896,
with about eleven hundred, finds it impossible to furnish the
service at the same cost with seven thousand five hundred sub-
scribers, as it then did. So that while cost per telephone to
the appellant in 1901 up to 1902 was $34 per telephone, in
1902 it was $39.74, or a loss of $2 per telephone; and in the
next year there was a deficiency of nearly $9 per telephone.
Mr. Webb testifies that during that year under the old rates
the deficiency would amount to over $70,000, "so that at $48
and $36 a year under actual operation demonstrated by
actual experience, it means $72,000 a year less than cost."
This would mean only one thing, and that is, that the appel-
lant could not find it possible to continue the service, but
would speedily pass into the hands of receivers. The coun-
sel for the appellees, while not resisting this conclusion, at-
tempts to meet it by arguing that the service could still be
supplied by deducting the alleged deficiency from the interest
on the bonds. These consist of a first issue of $1,000,000,
and a second of $1,155,000, bearing interest at five per cent,
issued to provide the means for constructing the plant. All
of the proceeds thereof, besides other large sums, were de-
voted exclusively to that purpose, and the expenditure was
rendered necessary to furnish the equipment necessary to
meet the demand of the public. The bonds were put on the
market and sold to purchasers. It is not contended they were
improvidently issued, or that the money derived therefrom
was extravagantly or even unwisely expended for any other
purposes than to obtain the means of constructing plant and
Feb. 1906.] Maryland etc. Tel. Co. v. Simon Sons Co. 353
conducting its business in such a manner as to enable it to,
compete with the other company doing business in Baltimore
City. So that the proposition asked for by the complain-
ant is that the court shall issue its injunction restraining
^^® the appellant from charging more than the rates provided
by its contract as expressed in the ordinance, by which great
losses will be incurred by many innocent persons, and the
public will be deprived of the benefits of competition in the
business of furnishing telephone service, for the benefit of and
on the application of eighteen persons. By granting this in-
junction each of the appellees will be nominally benefited in
small amounts; but in fact the appellant may be forced into
the hands of receivers, so that the service cannot be rendered
at all, and the decree would eventually be of no service to
them, while disaster would be brought on the corporation,
and large and irreparable losses entailed upon the holders of
the bonds; and thereby the very purposes for which the or-
dinance No. 110 was enacted probably entirely' defeated.
Under these circumstances it is manifestly the duty of the
court to deny the injunctions prayed for, and leave the appel-
lees to such remedies as they may have at law.
Decree reversed, with costs to the appellant.
The Granting of an Injunction is not a matter of strict right in
the parties, but it is a matter resting in the sound discretion of the
court: Macon etc. R. R. Co. v. Gibson, 85 Ga. 1, 21 Am. St. Rep. 135;
Piatt V. Waterburj-, 72 Conn. 5.31, 77 Am. St. Rep. 335; Gray v. Mayor
etc., 60 N. J. Eq. 385, 83 Am. St. Rep. 642. An injunction will therefore
not be granted, as a rule, when it would be productive of great hard-
ship or oppression or great public or private mischief: Fisk v. Hart-
ford, 70 Conn. 720, 66 Am. St. Rep. 147; Gray v. Mayor etc., 60 N. J.
Eq. 385, 83 Am. St. Rep. 642; Crescent Min. Co. v. Silver King Min.
Co., 17 Utah, 444, 70 Am. St. Rep. 810; Jones v. Concord etc. R. R.
Co., 67 N. H. 234, 68 Am. St. Rep. 650.
The Awarding of SpScific Performance by a court of equity is a
matter, not of absolute right, but of sound discretion: Boldt v. Early,
33 Ind. App. 434, 104 Am. St. Rep. 255. It may be withheld where
the results would be inequitable or unjust: Winne v. Winne, 166 N.
Y. 263, 82 Am. St. Rep. 647; Ryan v. McLane, 91 Md. 175, 80 Am. St.
Rep. 438; Maguire v. Heraty, 163 Pa. 381, 43 Am. St. Rep. 800.
Am. St. Rep., Vol. 115—23
354 American State Reports, Vol. 115. [Maryland,
mLSKE V. STEINER MANTEL COMPANY.
[103 Md. 235, 63 Atl. 471.]
CONTBACTS, Confitmctlon of. — In Construing a Contract
Courts Should Place Themselves in the Same Situation as the Parties
were who made the contract, so as thereby to judge of the meaning of
the words and a correct application of the language to the things
described, (p. 357.)
CONTEACT for the Construction of a Building, When not to
be Construed in Connection with a Bond Given by the Contractor. —
If a contract is entered into for the construction of a building
within a time and on the conditions therein specified, and the con-
tractor gives a bond with a surety for the performance of the contract,
within such time and upon such conditions, the covenants and con-
ditions of the bond are not to be read into the contract, and taken
not only as narrowing and limiting the obligations of the person con-
tracting for the erecting of the building, but also as imposing new
and additional duties upon him. (pp. 357-359.)
CONTRACT for the Construction of a Building — Bond Declar-
ing that Neither the Principal nor the. Surety Therein Shall be Liable
for Damages Resulting from the Act of God. — If a building contract
provides that the building shall be constructed within a time speci-
fied and according to certain plans and specifications, and that the
builder will execute a bond for the faithful performance of his
duties in erecting the building, and such bond, when executed and
accepted, provides that neither the principal nor the surety shall
be liable for damages resulting from the act of God, the bond does
not vary or alter the meaning of the contract so as to make the
owner answerable for the contract price, or for a portion thereof,
when the building as partly constructed is destroyed as the result
of a storm, (pp. 357-359.)
BUILDING CONTRACT— Eight to Recover on Partial Per-
formance.— If a building contract is entered into, but provides for the
payment of specified amounts as the work progresses, an action may
be brought for the payment of any such installment when it be-
comes due by the terms of the contract, (p. 359.)
BUILDING CONTEACT. — Notwithstanding the Destruction
of a Partially Constructed Building by a Storm, the owner is under
obligation to permit the builder to perform hie contract by rebuilding
the structure, (p. 359.)
PLEADING, Duplicity in. — If one who has contracted to erect
a building for another has two causes of action against the latter,
one for a definite sum of money due for work done, and the other
for preventing the plaintiff from going on and completing his con-
tract, and states both causes in a single count in his declaration, it
is bad for duplicity, (p. 361.)
APPEAL AND EEEOE — Eemanding Cause for Trial on the
Merits Though the Judgment Appealed from was not Erroneous. —
If a judgment is entered in the trial court for the defendant because
of defects in the plaintiff's pleading, where it is infected with
duplicity, the appellate court may, in Maryland, in its discretion, re-
mand the cause for trial on the merits, (p. 362.)
March, 1906.] Milske v. Steineb Mantel Co. 355
William S. Bansemer, Marbury & Gosnell and Charles P.
Coady, for the appellant,
William S. Bryan, Jr., and John H. Richardson, for the
appellee.
*"** BURKE, J. This is an action of covenant based upon
a sealed agreement *^^ between the parties to the suit dated
June 1, 1903. The suit was originally instituted in the cir-
cuit court for Baltimore county, but was subsequently re-
moved to the court of common pleas. By leave of the court
the plaintiff, on the 19th of June, 1905, filed an amended
declaration which contained three counts, each of which pur-
ported to assign breaches of the agreement committed by the
defendant. The defendant demurred to each count of the
declaration. The court sustained the demurrers, with leave
to the plaintiff to amend, which he declined to do, and there-
upon the court entered judgment on the demurrers in favor
of the defendant. From this judgment the plaintiff appealed.
The record, therefore, presents this one question: Was the
court's ruling upon the demurrers correct?
The circumstances which gave rise to the suit are as fol-
lows: The defendant corporation contemplated the erection
of a brick factory and storehouse to be located in Baltimore
county, and to that end had plans and specifications for
the construction of the work prepared. The contract was
awarded to the plaintiff on the 1st of June, 1003, and he ob-
ligated himself to complete the* work in forty-seven working
days. During the course of the erection and construction
of the building, and when the same had been almost com-
pleted, it was blown down on the 12th of July, 1903, by a
storm of unusual violence and severity which swept over the
section of the county in which the building was located. It
was made a condition precedent to the awarding of the con-
tract to the plaintiff that he should enter into a bond to
the defendant, in conjunction with a surety company satis-
factory to the defendant, as surety, conditioned for the faith-
ful performance of the contract. There was also stipulation
in the contract that as the work advanced to certain stages
of completion the plaintiff should be paid certain specified
sums. When the storm of the 12th of July, 1903, demolished
the building, an installment of fifteen hundred dollars due
the plaintiff under said provision of the contract was un-
paid.
i
356 American State Reports, Vol. 115. [Maryland,
The proposition for which the plaintiff contends is that
^■*'^ under the contract between himself and the defendant
all losses or damages which resulted to the building from the
storm of July 12, 1903, which the narratio describes as an
"act of God," must be borne by the defendant, and that he,
the plaintiff, has a right under the contract to recover all
such losses and damages to said work as he may be able to
show he sustained by reason of the storm. The first and
third counts are based solely upon this contention. The
second count presents a different question, and will be con-
sidered later. The first count seeks to recover an unpaid in-
stallment of fifteen hundred dollars, and also the value of
the materials used in the construction of the building, which
it alleges were retained and used by the defendant. The
third count alleges that "the defendant was bound to suffer
and stand good for the loss from an 'act of God,' and the
plaintiff was relieved from any loss so incurred, and that the
defendant was under an obligation to bring the building to
the stage of completion to which it had progressed at the
time it was destroyed." Under this count the plaintiff seeks
to recover profits on the contract, the unpaid installment of
fifteen hundred dollars, and the value of the materials used
in the work.
The theory upon which the plaintiff seeks to maintain these
counts is that the bond and building contract are to be taken
together as constituting the agreement by which the rights
and duties of the respective parties to the suit must be deter-
mined, and that inasmuch as by the third condition contained
in the bond given by the plaintiff' and the American Surety
Company it is provided: "That the principal shall not, nor
shall the surety be liable for any damage resulting from an
act of God," it is argued that thereby the obligations as-
serted in the first and third counts were imposed upon the
defendant, and that upon this conception of the character
and meaning of the contract the pleader has introduced ver-
batim into each count of the narratio the agreement and
bond. It, therefore, appears that the question presented in-
volves an inquiry as to what was the contract entered into
between the parties and what were the rights and obligations
arising thereunder.
*^® It is needless to quote authorities to show that in the
construction of a contract the intention of the parties as it
appears from the whole agreement must be ascertained and
;March, 1906.] Milske v. Steineb Mantel Co. 357
given its full effect. The rule of construction was stated,
with great clearness, in Nash v. Towne, 5 Wall. 689, 18 L.
ed. 527, as follows : ' * Courts, in the construction of contracts,
look to the language employed, the subject matter, and the
surrounding circumstances. They are never shut out from
the same light which the parties enjoyed when the contract
was executed, and, in that view, they are entitled to place
themselves in the same situation as the parties who made the
contract, so as to view the circumstances as they viewed
them, and so to judge of the meaning of the words and of the
correct application of the language to the things described."
When the contract for the construction of the factory and
the storehouse is looked at in the light of these principles, the
contention of the plaintiff that the covenants and conditions
of the bond which the plaintiff was required to give for the
faithful performance of his duties are to be read into the con-
tract, and to be taken, not only as narrowing and limiting his
obligations under his agreement with the defendant, but as
imposing new and additional duties upon the defendant, can-
not for a moment be entertained. The plaintiff undertook
to do a certain, definite thing, to wit, the erection and com-
pletion of a factory and storehouse according to the plans
and specifications furnished by the defendant. These plans
and specifications constituted a part of the contract. He was
to do all the work and furnish all the materials to be used in
and about the erection of the building, and was to do the
work in a good and thorough workmanlike manner. He fur-
ther obligated himself to have the building completed and
ready for the business for which the same was to be erected
in a specified number of days. Upon the performance by
the plaintiff of all the covenants on his part to be performed,
the defendant agreed to pay to the plaintiff the sum of
eight thousand seven hundred and ninety-four dollars and
fifty cents in the following installments, viz. : five hundred
dollars when the building is completed to the first floor, and
the fir.st floor joists are laid; one thousand dollars to ^■*'^ be
paid when the building is completed to the second floor, and
the second floor joists are laid ; one thousand dollars to be
paid when the building is completed to the third floor and
the third floor joists are laid ; fifteen hundred dollars to be
paid when the building i.s completed to the roof and the roof
is placed upon the same-, five hundred dollars to be paid when
the flooring on the fir.st floor is laid and trimmed out; five
358 Americ-vn State Reports, Vol. 115. [Maryland,
hundred • dollars to be paid when the flooring on the second
and third floors each is laid and trimmed out. The bal-
ance of three thousand two hundred and ninety-four dollars
and fifty cents to be paid when the building is completed
in accordance with said plans and specifications, and same
delivered to said party of the second part free of all claims
by the party of the first part or any party claiming through
him. There is also a stipulation that on the signing of the
contract the plaintiff should execute a bond in the sura of
four thousand dollars with some responsible bonding comp'any
satisfactory to the defendant, "conditioned for the faithful
performance of his duties in the erection of said building."
These are the main and substantial provisions of the con-
tract. It is an absolute and unconditional contract on the
part of the plaintiff. There are no conditions or contingen-
cies incorporated or provided for therein by which he might
be excused from performance, or might be relieved from
loss or damage, or whereby the loss occasioned by the storm
mentioned in the declaration might be imposed upon the
defendant. The bond was given, not to vary or change in
any particular the obligations of the plaintiff under the con-
tract, but to secure the faithful performance by him of all
the duties assumed by him thereunder. Its object was to
protect the defendant from loss or damage which might re-
sult from nonperformance by the plaintiff, and cannot be
construed to add to or change any of the terms of the con-
tract, or to be taken as a part thereof. When the purpose
of the contract, its subject matter, and the surrounding cir-
cumstances at the time are considered, it would seem to be
perfectly clear that the bond is an entirely independent and
collateral contract given to protect the defendant against any
default or miscarriage of the plaintiff under the contract.
The original obligation to construct the building ^* had been
undertaken by the plaintiff, and the bond must be treated
as a contract of guaranty or suretyship for the faithful dis-
charge of his duties under his agreement with the defendant.
That the original and distinct obligation of the plaintiff ex-
isted, and that the bond was a mere collateral agreement
founded upon it, appears clear from the language employed
and from a consideration of the surrounding circumstances.
The bond may, therefore, be dismissed from the case, and
should not have been introduced into the declaration.
March, 1906.] Milske v. Steiner Mantel Co. 359
With the bond out of the case, it must be admitted that
the plaintiff cannot recover for the loss which the storm occa-
sioned, for by all the authorities, in the absence of special
provisions in the contract providing for such a contingency,
the loss must fall upon the plaintiff. In both counts the
contract is treated as a subsisting, binding obligation.
Neither alleges performance by the plaintiff, nor does either
disclose any legal excuse for his failure to perform the con-
tract. The theory upon which both counts rest is that the
failure of the defendant to pay the losses which the plaintiff
sustained by the storm constitutes a breach of the contract
from which a right of action accrued to the plaintiff. This
contention, as we have said, is based upon a fallacious con-
struction of the contract, and as both counts are framed upon
that construction, both are bad.
They are bad for a further reason which will be stated when
the second count is considered, which we will now examine.
The contract sued on is an entire and not a divisible con-
tract. The thing with which it deals is the building and con-
struction, in a certain specified manner, of a factory and
warehouse. But it contains certain stipulations by which
the defendant obligated itself to pay to the plaintiff certain
specified and definite sums of money at stated periods as the
work progressed. When the building had reached the stage
of completion designated in the contract, the obligation of
the defendant to pay the sums specified therein became fixed
and absolute. But it is argued that because the contract
is an entire contract, no suit can be brought thereon until
the plaintiff has fully performed his agreement. Whatever
may be the **® rule in other jurisdictions, the mere fact that
the contract is entire does not preclude the plaintiff from en-
forcing the payment of the unpaid installments due and pay-
able thereunder. In Broumel v. Rayner, 68 Md. 47, 11 Atl.
833, this court said: "In Taylor v. Laird, 1 Hurl. & N. 266,
Pollock, C. B., determined that when there is a contract for
an entire service, but the parties stipulated that payments
for such service shall be made periodically in fixed sums, a
failure to make any one of these payments may become the
foundation for a suit. Thus it is manifest that many suits
may grow out of one contract This principle has been recog-
nized in all of the states."
360 American State Reports, Vol. 115. [Maryland,
Notwithstanding the destruction of the building by the
storm, the defendant was under an obligation to permit the
plaintiff to perform his contract by rebuilding the structure.
In Black v. Woodrow & Richardson, 39 Md. 194, Judge Al-
vey said: "It not infrequently occurs that contracts on their
face and by their express terms appear to be obligatory on
one party only, but in such cases, if it be manifest that it was
the intention of the parties, and the consideration upon which
one party assumed an express obligation, that there should
be a corresponding and correlative obligation on the other
party, such corresponding and correlative obligation will be
implied. Thus, if the act to be done by the party binding
himself can only be done upon a corresponding act being
done or allowed by the other party, an obligation by the latter
to do or allow to be done the act or things necessary for the
completion of the contract will be necessarily implied:
Churchward v. The Queen, 6 Best & S. 807. And among the
instances given of such implied obligation is the case where
A covenants or contracts with B to buy an estate of the lat-
ter, at a given price; there, although the contract may be
silent as to any obligation on the part of B to sell, the law
implies a corresponding covenant or contract by him to sell
and convey the estate: Pordage v. Cole, 1 Saund. 319. In-
deed, no better instance of the proper application of the
principle could be furnished than the present case. The ap-
pellees agreed with the appellant to build for the latter a
house on ^^^ his land for a certain price, part to be paid
while the house was in course of erection, but the larger
part of the price was not to be paid until the house was com-
pleted; although the appellant could not be compelled to
have the house built against his consent, yet, notwithstand-
ing the contract is silent as to the appellant's promise that
he would suffer the house to be built, the agreement with
the appellees for the building of the house clearly implies
that he would allow that to be done without which it would
be impossible for the appellees to do what they had agreed to
do. To allow or suffer the house to be built was the corre-
sponding or correlative obligation of the appellant, implied
by the law to the obligation of the appellees to build the
housCj as expressed by the contract; and for any breach of
this implied promise or obligation by the appellant, he was
equally liable as upon an express promise."
1
March, 1906.] Milske v. Steiner JIantel Co. 361
It is, therefore, clear that if, before the building had been
destroyed by the storm, a definite sum of money was due to
the plaintiff under the stipulation of the contract for work
done, and which the defendant refused to pay, and if, after
the occurrence of the storm, the plaintiff was ready and will-
ing to rebuild said factory and warehouse according to the
terms of the contract, and was prevented by the defendant
from so doing, two distinct breaches of the contract were
thereby committed by the defendant, for both, either of which
a right of action accrued to the plaintiff. For both of said
alleged breaches the plaintiff seeks to recover in this suit.
But he has combined the two distinct causes of action in one
count of his declaration. He seeks to recover for the failure
to pay the installments due, and also to recover damages for
the refusal of the defendant to permit him to perform the
contract. This vice is found in all the counts. The whole
declaration is a flagrant example of duplicity in pleading:
Chitty on Pleading, 225; 1 Poe on Pleading, sees. 733-737.
This defect in pleading may now be taken advantage of by a
general demurrer: Steams v. State, 81 Md. 341, 32 Atl. 282;
State V. McNay, 100 Md. 622, 60 Atl. 273.
281 -^g therefore find no error in the action of the court
below in sustaining the demurrers to each count of the dec-
laration, and in entering the judgment for the defendant
upon the refusal of the plaintiff to amend the declaration.
But if the facts set out in the record be true, the plaintiff
has substantial grounds of action against the defendant, and
it would be a reproach to the administration of justice if he
were denied the right to have his case heard upon its merits
merely because of errors in the pleading or mistake of judg-
ment in the pleader in not making the proper amendments.
In order to avoid such injustice, it is provided by article 5,
section 22 of Code of 1904, as follows: "In all cases where
judgment shall be reversed or affirmed by the court of ap-
peals, and it shall appear to the court that a new trial ought
to be had, such new trial shall be awarded, and a certified
copy of the opinion and judgment of the court of appeals
shall be transmitted forthwith to the court from which the
appeal is taken, to the end that said cause may be again tried
as if it had never been tried ; and no writ of procedendo,
with transcript of record, shall be transmitted, as heretofore
practiced."
362 American State Reports, Vol. 115. [Maryland,
It was said in Creager v. Hooper, 83 Md. 490, 35 Atl. 159,
that under the above-quoted section "this court is vested with
discretionary power, when in its judgment the ends of jus-
tice will be promoted, to remand a case to the lower court
for trial upon its merits. This is manifestly a case for the
exercise of its discretion. The merits of the controversy have
never been passed upon by the court, nor has the case ev^r
been in the condition that they could be passed upon, and
not to remand it would be neither more nor less than a denial
of justice." The case of State v. Baltimore etc. R. R. Co.,
77 Md. 489, 26 Atl. 865, presented a situation very similar
to the one under consideration. In that case the plain-
tiff had filed an amended declaration to which the defend-
ant demurred. The court sustained the demurrer and en-
tered judgment for the defendant. The plaintiff appealed.
This court held the pleading insufficient, and aflEirmed the
judgment, but remanded the case for trial upon its merits.
Judge Bryan, who delivered ^'*^ the opinion of the court,
said: "We think it just, under the circumstances, to remand
the case, in order that the declaration may be amended and
the case be brought to trial on its merits, although we shall
affirm the judgment." The circumstances of this ease, in
our opinion, warrant the exercise of the discretionary power
vested in this court under the act.
Judgment affirmed and cause remanded for a new trial,
the appellant to pay the costs.
The Effect of the Destruction of a Building in course of construction
before its completion on the rights and liabilities of the contractor
and the owner is considered in the note to Huyett & Smith Co. v.
Chicago Edison Co., 59 Am. St. Eep. 285. A contractor is released
from his undertaking to repair an old building and construct an
annex thereto, where, after the work is practically finished and
eighty per cent of the contract price received, the structure is so
damaged by fire from lightning that completion is impossible without
first restoring the old building; and this, although the contractor
should have completed his contract before the fire, and although the
contractee offers to restore the old building: Krause v. Board of
School Trustees, 162 Ind. 278, 102 Am. St. Rep. 203. See, in this
connection, Butterfield v. Byron, 153 Mass. 517, 25 Am. St. Rep.
654.
March, '06.] Baltimore etc. Ky. Co. v. Klafp & Co. 363
BALTIMORE, CHESAPEAKE AND ATLANTIC RAIL-
WAY COIVIPANY V. KLAFF & CO.
[103 Md. 357, 63 Atl. 360.]
REPLEVIN for Property in Custody of the Law. — Replevin
can be sustained for property under levy under attachment, though
the writ issue in an action against a person other than the owner
of such property, (pp. 366, 367.)
Ralph Robinson and Bond & Duffy, for the appellant.
Myer Rosenbush, for the appellee.
ssT" SCHMUCKER, J. This appeal presents the single
question whether the owner of personal property can main-
tain a replevin for it after it has been levied on by the sheriff
under an attachment, against a third person, which is still
pending. The question arises under the following circum-
stances :
The appellee, as plaintiff below, instituted the present re-
plevin suit in the Baltimore City court to recover posses-
sion of certain chattels which were on board the appellant's
steamer, "Pocomoke," at her wharf in Baltimore City. The
chattels were taken from the boat by the sheriff under the
replevin and delivered to the plaintiff. The appellant ap-
peared to the action and pleaded non cepit, property in a
third person, and that the goods when replevied were in pos-
session of the sheriff of Dorchester county, who had seized
them under a pending attachment.
*** The case was tried before the court without a jury.
There was evidence at the trial tending to show the following
facts: The goods in controversy were shipped on March 17,
1905, per the steamer ' ' Pocomoke ' ' by one Orinoff from Cam-
bridge to Baltimore, consigned to the appellee. As the boat
was leaving her wharf at Cambridge the sheriff of Dorches-
ter county came on board and levied on the goods under an
attachment by way of execution on a judgment rendered by
a justioe of the peace of that county against Orinoff. The
goods were attached as per schedule and the writ was also
laid in the hands of the captain of the boat as garnishee.
The sheriff allowed the goods to remain on board the boat
and went along with them to Baltimore City. On the arrival
of the boat at Baltimore the goods were taken by the sheriff
364 American State Reports, Vol. 115. [Maryland,
of that city under the writ of replevin in the present case.
There was also evidence tending to prove the value of the
goods and that they had never been the property of Orinoff
but were owned by the appellee.
At the close of the evidence the appellee, as plaintiff, and
the appellant, as defendant, each offered one prayer. The
I^aintiff's prayer asked the court to declare, as matter of
law, that if it found from the evidence that, at the time of
the issuing of the writ of replevin in this case, the plaintiff
was entitled to the possession and the right of possession of
the goods seized under the writ, he was entitled to a verdict
for the goods replevied, together with such damages as the
court should find that he had sustained by reason of their
detention. The court granted that prayer.
The defendant's prayer, which was rejected, asserted the
proposition that as the evidence showed that the goods re-
plevied had prior to the replevy been attached anu scheduled
by the sheriff of Dorchester county while the defendant's
boat was lying at Cambridge and the attachment had been
laid in the hands of the captain of the boat and he had been
returned as garnishee and the schedule of the goods had been
returned in the case in which the attachment had been issued,
the verdict must be for the defendant.
*^* The ruling of the court on these two prayers presents
the question whether the goods in question, being in custodia
legis by virtue of their attachment, were liable to be replevied
under the writ issued in this case.
The appellee does not deny the accuracy of the general
proposition of law that property in custodia legis cannot be
replevied, but he contends that cases like the present, where
the property of the plaintiff has been attached under a writ
mnning against a third party, constitute a reccgnized ex-
ception to the proposition. In support of his contention he
relies upon Clark v. Skinner, 20 Johns. (N. Y.) 465, and a
number of more recent cases in the courts of last resort of
many states, and also upon the statement made on page 500
of volume 24 of American and English Encyclopedia of Law,
second edition, that "by the great weight of authority, how-
ever, which in some jurisdictions is recognized by statute,
it is held that where in process running against the property
of one person the property of another is taken, the latter may
maintain replevin therefor, even though the property was in
March, '06.] Baltimore etc. Ry. Co. v. Klafp & Co. 365
possession of the attachment or execution debtor or a third
person at the time of its seizure."
We have examined many of the cases appearing on the
appellee's brief and of those cited in the Encyclopedia in
support of the statement there made. Those cases undoubt-
edly show that in many, if not the majority, of the American
states the exception contended for by the appellee is now
recognized and upheld, but our predecessors in this court
have been clear and emphatic in maintaining the opposite
\iew.
In Cromwell v. Owings, 7 Har. & J. 55, this court, although
recognizing the fact that in this state the action of replevin
has nearly taken the place of trespass and trover, and is the
usual and almost universal remedy resorted to for the recov-
ery of goods in the possession of another, whether tortiously
taken or not, held that it will not lie for goods which are
in custodia legis by reason of having been taken in execu-
tion under legal process, even though that process was against
a stranger who was not the owner of the goods. The court
in their opinion ^®^ admit that "the application of the rule
'that goods taken in execution cannot be replevied' to the
case of a stranger whose property has been taken on an exe-
cution against another person may sometimes be attended with
individual inconvenience," but they insist upon its applica-
tion, saying that "it is not the officer that the law protects
in doing wrong, but the possession only of the chattels in
order to effect its own ends, the purpose for which the exe-
cution issued," and to prevent a contempt of the jurisdic-
tion of the court issuing the execution.
This court in the opinion in that case refer to the cases of
Thompson v. Button, 14 Johns. 84, and Clark v. Skinner, 20
Johns. 465, 11 Am. Dec. 302, but decline to follow their
reasoning or adopt their conclusions. The court then say in
concluding their opinion: "But the question whether the
goods of a stranger taken out of his pos.session on an execu-
tion against another person can be replevied out of the hands
of the officer, having also been discussed, and being a ques-
tion in which the public is materially concerned, and there-
fore proper to be settled, we avail ourselves of this occasion
to exprass our opinion upon the subject. In Thompson v.
Button and Clark v. Skinner it is held that in such case a re-
plevin will lie.
366 American State Reports, Vol. 115. [Maryland,
"But we cannot perceive any suflBcient ground for the dis-
tinction. In either case the taking of the property of a
stranger is wrongful as to him, and as much so in one case as
in the other, and if replevin will lie by a stranger whose
property is taken in execution out of his possession, on the
principle that it is wrongfully taken, it would seem to fol-
low that the same writ will equally lie for an equally wrong-
ful taking of the property of a stranger out of the posses-
sion of a defendant. But it does not depend upon the ques-
tion whether the property was wrongfully taken or not, which
can only be determined at the trial, but whether it was in
the custody of the law or not, and that once established, the
possession cannot be disturbed, but the party injured is left
to seek his remedy by an action of trespass or trover, or to
wait until the goods are sold and then regain his possession
by a writ of replevin against the purchaser in whose hands
they cease to be ^** in the custody of the law. Upon that
principle we think that in no case whatsoever will replevin
lie against an officer for goods taken in execution under law-
ful process; and so is the case of Ilsley v. Stubbs, 5 Mass.
280. If it were otherwise, it would always be in the power
of a defendant to evade the law and defeat the ends of jus-
tice, by placing his property in the hands of a friend and
causing it, when taken in execution, to be replevied from the
hands of the officer by such friend; and thus the mischief
would be just as great as to permit a defendant to replevy
property taken in execution out of his own possession."
In Ginsberg v. Pohl, 35 Md. 505, a case in which the goods
had been seized under an attachment which was still pending,
the opinion in Cromwell v. Owings was referred to with ap-
proval and its conclusions adopted and relied on, and the cases
of Thompson v. Button, 14 Johns. 84, and Clark v. Skinner, 20
Johns. 465, 11 Am. Dec. 302, were referred to as having been
disapproved of by this court. Cromwell v. Owings, 7 Har,
& J. 55, has been cited with approval in more recent cases, the
last being Fidelity & Deposit Co. v. Singer, 94 Md. 124, 50
Atl. 518, upon other aspects of the action of replevin, but none
of the conclusions to which we have referred have been
doubted or called in question.
Mr. Poe, in the admirable discussion of the question when
replevin will and when it will not lie appearing in section 252
in his work on Pleading, also holds it to be the well-established
June, 1906.] Mobgart v. Smousb. 367
doctrine in this state that the action will not lie for goods in
the custody of the law, even though they may have been taken
on an execution against a stranger.
The judgment appealed from must be reversed and the
cause remanded.
Judgment reversed with costs and case remanded for new
trial.
Seplevin Against Officers is considered in the note to Carpenter v.
Innes, 25 Am. St. Rep. 256. The general question of when replevin
is maintainable is the subject of a note to Sinnott v. Feiock, 80 Am.
St. Bep. 741.
MORGART V. SMOUSE.
[103 Md. 463, 63 Atl. 1070.]
STATUTE OF FEADDS. — The Transfer of an Equitable In-
terest in Land is as much within the statute of frauds as the transfer
of the legal interest, (p. 370.)
STATUTE OF FEAUDS — Pleading. — One who has filed a gen-
eral issue plea and thus denied the existence of a contract sued upon
is entitled to rely on the statute of frauds, (p. 370.)
STATUTE OF FRAUDS — Agreement to Purchase Lands as
Partners or <m Joint Account. — An agreement between two persons
that they will purchase lands and develop and sell them on joint
account, and share equally in the profits and losses of the venture,
is not within the statute of frauds, but constitutes them partners to
the extent of the undertaking, governed by it. (p. 370.)
PARTNERSHIP, Essentials of. — The essentials requisite to con-
stitute the relation of partners are a community of interest between
the parties for the purpose of profit, (p. 371.)
PARTNERSHIP Between the Parties is a Matter of Intention
to be proved by their express agreement or inferred from their acts.
(p. 371.)
PARTNERSHIP in Lands, When Exists. — An agreement by
two or more persons to buy land and sell it and share the profits
or profits and losses constitutes them partners for that venture, and
entitles either of them to an accounting in equity for his share
of the joint transaction, (p. 371.)
STATUTE OF FRAUDS — Partnership in Lands.— An Oral
Agreement is Suf&cient to constitute a partnership to deal in lands,
(p. 372.)
PARTNERSHIP in Lands, Action at Law for a Share of the
Profits of. — if two persons have entered into a partnership to buy
and sell land, an action at law cannot be maintained by one of them
against the other for a share of the profits of ^he venture, there not
appearing to have been any settlement of accounts between them.
(p. 372.)
368 American State Reports, Vol. 115. [Maryland,
Ferdinand Williams and De Warren H. Reynolds, for the
appellant.
Thomas J. Peddicord and D. James Blaekiston, for the
appellee.
-•^^ SCHMUCKER, J. The appellee sued the appellant
in the circuit court for Allegany county to recover what he
claimed to be his share of the profits realized from the pur-
chase and sale of certain real estate. The declaration con-
tained only the common counts in assumpsit, but it was ac-
companied by a bill of particulars in the form of an account
charging the defendant with one-half of specified profits al-
leged to have been received by him on three several trans-
actions. The count relied on in argument by the plaintiff
was the one for money had and received for his use.
The appellant, as defendant, pleaded two general issue
pleas, and also payment and limitations, whereupon the
plaintiff joined issue on all of the pleas except that of limita-
tions, to which he replied a new promise. To that replication
the plaintiff rejoined that he had been kept in ignorance of
his cause of action by the defendant's fraud until within
less than three years before the bringing of the suit.
The case was tried before the court without a jury and the.
verdict and judgment were against the defendant, who took
this appeal. There is but one bill of exceptions in the record
and that is to the court's ruling on the prayers.
The plaintiff, to support his case, offered evidence tending
to prove the making of a verbal contract between him and
the defendant for the purchase, development and sale for
their joint account of two parcels of land, the one containing
five thousand '***^ acres, known as the Cunningham tract and
the other, containing thirteen hundred acres, known as the
Maynadier tract.
To establish the contract in reference to the Cunningham
tract the plaintiff himself went upon the stand as a witness,
and after saying that he had frequent interviews with Mr.
Hamill, the owner of the lands, beginning in 1896, he testified
as follows: "I met Mr. Hamill a number of times afterward,
and in conversations about this land I finally got a price from
him on the land, as he represented three-fourths owners of
the property at the time, and he told me he would sell me
the land on time payments at five dollars per acre." Then,
after saying that he had made arrangements to borrow the
June, 1906,] Morqart v. Smouse. 369
money to buy the land when Morgart, the defendant, came
frequently to see him in June or July, 1898, and offered to
go into the deal with him, he described the making of the
contract with Morgart as follows: "We were talking over
this property and I told him about having arranged for the
money to buy the one tract; he said to me that it would be
foolish to go into a deal of that kind, and if I would allow
him to go in this deal he would furnish whatever money it
took and that he would take one-half of the profits whatever
we made out of it, and it would relieve me of borrowing this
money, and I arranged not to take this money." In reply to
the question, "Just state what Mr. Morgart offered to do,"
the plaintiff testified, "Mr. Morgart 's offer was that he would
furnish all the money required to run this deal to a finish,
and do all the work connected with it, and would do that in
consideration of half the profits to be made out of it, and, on
the other hand, if we lost in it I was to put up my half of
what was lost"; and further testified that he accepted Mor-
gart's proposition.
The plaintiff and Morgart, a short time thereafter, went
together to see Mr. Hamill, who declined to give them at that
time a written option on the land, as he had given the refusal
of it to other parties for thirty days. After the expiration of
the thirty days Morgart went again to see Mr. Hamill, and
when he returned he told the plaintiff that Hamill had given
him a written option for the land, and had charged him a
hundred "*** doUars for it, but the plaintiff never saw this
alleged writtai option, nor, if it existed, was it put in evi-
dence in the case.
In reference to the Maynadier tract, the plaintiff testified,
fixing the date as sometime in November, 1898: "Mr. Mor-
gart acted on my instructions to him for to buy the Maynadier
land ; it was understood it was to go in the same deal. I ex-
plained to him it was the natural outlet to get the timber away
from the Cunningham lands, and, after going on the Cun-
ningham land, he saw that himself My arrangement
[with Morgart] was that I was to share in the whole deal,
and that it was to apply to the Maynadier as well as the
Cunningham."
The defendant Morgart stoutly denied the truth of this tes-
timony of the plaintiff, but there is other evidence in the rec-
ord tending to corroborate it, from which the court might have
found it to be true. We will, for the purposes of this opinion.
Am. St. Rep., Vol. 115—24
370 American State Reports, Vol. 115. [Maryland,
give the plaintiff the benefit of his own version of the contract
on which he bases his right to recover.
Neither the Cunningrham nor the Maynadier tract of land
was conveyed by its owners to either of the parties to this
suit, but there is evidence in the record tending to show that
both tracts were conveyed in 1899 to purchasers procured by
Morgart, and were afterward sold at an advance by those
purchasers, and that ^lorgart received a portion of the profits
thus realized, and refused to divide the amount so received
by him with the plaintiff.
The plaintiff's alleged contract with Morgart must be re-
garded as having been intended to be either a verbal assign-
ment by the former to the latter of a one-half interest in an
equitable estate in the lands mentioned in the evidence , or an
agreement between the two parties for the future purchase,
development and sale of those lands, and an equal division of
the profits or losses to result from the venture. Treated as
an assignment of an equitable interest in the lands, it was
void under the fourth section of the statute of frauds, for it is
well settled that a transfer of an equitable interest in lands
is as much within the operation of the statute as a transfer of
a ^o'' legal interest: Polk v. Reynolds, 31 Md. 106; 29 Am.
& Eng. Ency. of Law, 2d ed., 888, and cases there cited.
The defendant, having filed the general issue pleas, and
thus denied the existence of the contract sued on, was entitled
to invoke and rely upon the statute of frauds, as he did on his
brief and in argument, without having set it up by plea:
Hamilton v. Thirston, 93 Md. 213, 48 Atl. 709; Semmes v,
Worthington, 38 Md. 298.
Furthermore, the plaintiff, when he made the contract with
Morgart, possessed, so far as the evidence in the record goes,
no valid title either legal or equitable to the lands, as he had
nothing more than a verbal promise from their owner to sell
them to him at a certain price: Green v. Drummond, 31 Md.
71, 1 Am. Rep. 14. Nor can the plaintiff escape from the toild
of the statute upon the ground contended for by him, that the
contract had been fully executed when he brought his sutt,
because, whatever may be said of the effect of the conveyances
appearing in the record from the owners of the lands to var-
ious purchasers and from the latter to their vendees, such
conveyances were not an execution of the verbal contract of
Hamill to sell the lands to the plaintiff nor of the latter 's
verbal contract to transfer a half interest in them to Morgart.
June, 1906.] Morgart v. Smouse. 371
If, on the other hand, we treat the contract between the
plaintiff and Morgart as an agreement made by them to pur-
chase, develop and sell the lands for their joint account, and
share equally the profits and losses of the venture, the statute
of frauds was not applicable to it, but it constituted them co-
partners quoad the undertaking covered by it. The requi-
sites of a copartnership have been stated by the text-books
and cases in various forms of expression, which substantially
agree that the essential requisite to constitute the relation is
a community of interest between the parties for the purpose of
profit. Ordinarily, the profits are expected to arise from the
purchase and sale of some form of property, but they may be
produced by the skill and industry of the partners, as in the
case of professional firms or those for the organization or pro-
motion of various enterprises : Parsons on Partnership, sees.
■*** 58-61 ; Lindley on Partnership, 10-13 ; Rowland v. Long,
45 Md. 439; Heise v. Barth, 40 Md. 259; 22 Am. & Eng.
Ency. of Law, 2d ed., p. 27,
As between parties, partnership is a matter of intention
to be proved bj'' their express agreement or inferred from
their acts and conduct. If they intend to and do enter into
such a contract as in the eye of the law constitutes a partner-
ship, they thereby become partners, whether they are desig-
nated as such or not in the contract. The late Judge Robin-
son, in speaking for this court in Thillman v. Benton, 82 Md.
64, 33 Atl. 485, after reviewing the authorities bearing upon
this subject and commenting upon the earlier decisions of
this court in Rowland v. Long, 45 Md. 439, arrived at the
following conclusion as to the present state of the law: "We
take it then to be well settled that a partnership is a contract
of some kind involving mutual consent of the parties, and
when such a contract is entered into between two or more per-
sons for the purpose of carrying on a trade or business with
the right to participate in the profits of such trade or busi-
ness, then such a contract constitutes a partnership, unless
there be other facts and circum-stanees which show that some
other relation existed."
It has been repeatedly held in other jurisdictions that an
agreement by two or more persons to buy land and sell it, and
share either the profits or the profits and the losses, constitutes
them partners for that venture, and entitles either of them to
an accounting in equity from the others of the joint transac-
tions: Van Houton v. Copeland, 180 111. 74, 54 N. E. 169;
372 American State Reports, Vol. 115. [Maryland,
Speyer v. Desjardins, 144 111. 641, 36 Am. St. Rep. 473, 32
N. E. 283 ; Tyler v. Waddingham, 58 Conn. 375, 20 Atl. 335, 8
L. R. A. 657 ; Richards v. Grinnell, 63 Iowa, 44, 50 Am. Rep.
727, 18 N. W. 668; Hill v. Sheibley, 68 Ga. 556; Parsons on
Contracts, 4th ed., sec. 67. A verbal agreement is sufficient to
constitute a partnership to deal in lands, the statute of frauds
not being applicable to such contract : Parsons on Partnership,
4th ed., sec. 6 ; Lindley on Partnership, 88, 89 ; Van Houten v.
Copeland, 180 lU. 74, 54 N. E. 169; Speyer v. Desjardins,
144 111. 641, 36 Am. St. Rep. 473, 32 N. E. 283 ; Richards v.
Grinnell, 63 Iowa, 44, 50 Am. Rep. 727, 18 N. W. 668 ; Bruns
V. Spalding, 90 Md. 349, 45 Atl. 194; 29 Am. & Eng. Ency.
of Law, 2d ed., 897.
Such being the law controlling the relations of the parties
*^ to this appeal in respect to the subject matter of the
present suit, the appellee was not entitled to recover in an
action at law against the appellant for a share of profits of
their joint venture in the Cunningham and Maynadier tract?
of land, there not appearing to have been any settlement or
account stated between them.
Under these circumstances the learned judge below should
not have granted the plaintiffs' thira prayer, which declared,
as matter of law, that if the court, sitting as a jury, found the
facts therein stated, the plaintiff was entitled to a verdict in
his favor. On the contrary, he should have granted the de-
fendant's first prayer, which asked him to declare, as matter
of law, that under the pleadings in the case there was no
evidence legally sufficient to entitle the plaintiff to recover,
and the verdict must be for the defendant. In the view which
we have taken of the case, we deem it unnecessary to notice
in detail the other prayers which asked for rulings upon
segregated portions of the facts of the case.
For the error of the court below in granting the plaintiff's
third prayer and rejecting the defendant's first prayer, the
judgment appealed from must be reversed, without a new
trial.
Judgment reversed, with costs, without a new trial.
While a Contract by Two Persons to Purchase real estate for their
joint benefit is within the statute of frauds, it seems that an agree-
ment to create a partnership for the purpose of buying and selling
lands for profit is not an agreement for the sale of lands, and is
not within the statute. See the note to McCoy v. McCoy, 102 Am.
St. Bep. 239.
June, 1906.] ScniRM v. Wiejman. 373
SCHIRM V. WIEMAN.
[103 Md. 541, 63 Atl. 1056.]
CONTEACT — Agreement to Pay for the Eetam of Stolen Prop-
erty.— An agreement to pay for the return of stolen property, or a
check given to procure such return, is neither illegal, immoral nor
against public policy, and may be enforced where it does not inter-
fere with the public interest and duty, respecting the apprehension
and conviction of the criminal, (p. 378.)
J. Cookman Boyd, for the appellant.
Alonzo L. Miles, German H. H. Emory and John T. Mor-
ris, for the appellee.
*** PAGE, J. This suit was instituted to recover upon a
check given to the appellant by the appellee, under the cir-
cumstances which '^^^ will afterward be stated. The case was
tried without the intervention of a jury, and but one excep-
tion was taken, and that was to the action of the court upon
the prayers asked for by the respective parties. The court,
by its granted instruction, decided there was no sufificient
evidence to entitle the appellant to recover. The judgment
being against him, the appellant has appealed.
The following facts appear from the record : In July, 1904,
the appellant and the appellee, together with two other per-
sons, all members of the Order of Elks, occupied the same
room in a hotel in the city of Cincinnati, on the occasion of a
convention of the members of that order. During the night
the watch of the appellee was lost, under circumstances which
led to the belief that it had been stolen. Notice was given by
the appellee of his loss, and extensive searches therefor were
instituted by officers and detectives throughout the hotel and
elsewhere, without, however, obtaining any clue as to the
manner of its mysterious di.sappearance. The appellee ob-
tained no information about his watch until the 7th of Decem-
ber, 1904. About that time the appellant had an interview
with a Mr. Lyons, since deceased, a detective in the city of
Baltimore. After pledging him not to reveal what he was about
to tell him, Lyons told the appellant that the appellee could re-
cover his watch, ' ' but would have to i)ay for it " ; that * ' parties
outside the state had communicated with him, and told him
they would accept three hundred and fifty dollars for it."
Neither at that time nor subsequently was the appellant in-
374 American State Reports, Vol. 115. [Maryland,
formed who these persons were, and he never knew more of
the matter that was communicated to him by the detective
Lyons. It was shown that on that occasion Lyons employed
the appellant "to communicate this information to Mr. Wie-
man, and if Mr. Wieman was satisfied to accept the proposi-
tion, to turn over the money to Lyons and get the watch and
return it to Wieman." The appellant also stated in evidence
and there is nothing to contradict or in any respect impeach
it, that he knew of the loss of the watch and believed it had
been stolen; but he had no knowledge as to that fact or the
manner of its loss, other than '^^^ that which Wieman him-
self communicated to him. The appellant communicated this
conversation to the appellee. At first the latter refused to
pay anything; but, after several weeks, he agreed to give three
hundred dollars if the watch could be returned to him in good
condition. The appellant so informed Lyons, and the sum
was then agreed to. The appellant testifies, without being
contradicted, that the state of his knowledge at that time
was that "Mr. Wieman agreed to pay the money; that the
watch was at that time outside the state, and that it was
sent for at his [Wieman 's] request, through him, and that
Lyons would not have sent to New York for the watch ex-
cept Mr. Wieman had authorized me to tell him to have it
sent for, and that he [Wieman] would pay the three hundred
dollars for it."
It was under these circumstances that the appellee and ap-
pellant met on the 4th of April to carry out the understandinij
between them as to the return of the watch. Wieman 's ac-
count of the conversation is substantially as follows: Schirm
asked Wieman, "Have you got the money?" "Wieman re-
plied he had a check"; that he paid everything by check, and
besides, he said, "Suppose he gave a check and that fellow
should pocket the money, and keep the watch too, he would
have no redress," and "How do I know the watch is not all
battered up?" He, Wieman, then suggested to call in Hen-
negen & Bates, and let them examine the watch. Schirm ob-
jected to this. Wieman then proceeds: "There is no shenan-
igan about this. I was to say this and when I did make that
remark I felt a little guilty, because there was some scheme
arranged beforehand to have a deputy sheriff there, and to
seize it, 'but I told him there was no shenanigan about it.' I
wanted the watch at any price." He, Schirm, said, "Well,
June, 1906.] Schirm v. Wieman. 375
I will tell you what I will do, I will go to your bank and cash
that check. I will first go to the other party and show them
I have got the check." In reference to the last statement,
the testimony of the appellant is, that he (Schirm) said, "I
will go over to the Fidelity and Deposit Company and get
it cashed, because I will have to deliver the cash for it."
Upon this conversation the appellee delivered the check on
the Drovers' and Mechanics' '^'* National Bank to the ap-
pellant, who indorsed it and had it cashed at the Fidelity and
Deposit Company after it was indorsed by Schirm. With the
proceeds Schirm obtained the watch and delivered it to the
appellee. The payment of it was the same day stopped hy
Wieman, and the appellant afterward was compelled to make
it good, and has not since been reimbursed.
It is contended that under these circumstances there can be
no recovery, because the consideration of the check was the ad-
vancement of money to be used for an illegal purpose — that
is, for securing the return by a thief of property alleged to
have been stolen. It undoubtedly is a correct principle that
one who furnishes funds to another whom he knows, or has
every reason to believe, intends to devote them to the per-
petration of crime, and that they were procured for that
purpose, will not be allowed to maintain an action on his
contract. He cannot do so, for the reason that, as was said
by Judge Story in his Conflict of Laws, section 253, "no one
can hesitate to say that such a man voluntarily aids in the
perpetration of the fraud, and, morally speaking, is almost,
if not quite, as guilty as the principal offender": Hanauer
V. Doane, 79 U. S. 342, 20 L. ed.'439. But is that the case
with which we are now dealing? Was it intended by any of
the parties to perpetrate a crime with the proceeds of a
check? The purpose, as shown, was to employ it in an
arrangement having for its object the return of the watch,
by the supposed thief, to its real owner. Unless this object
was for some sufficient reason fraudulent, or legally wrong,
or contrary to public policy, the act of the appellant in
advancing or otherwi.se procuring the money on the appellee's
check cannot be ^so tainted as to preclude the recovery by
the appellant of the amount paid him on that account. And
this legal conclusion would be equally sound, even though in
the transaction in which he advanced his own money or credit
for the use of the appellee, the appellant was acting as the
376 American State Reports, Vol. 115. [Maryland,
agent of the detectire, or even of the thief, inasmuch as it
was on the credit of the appellee that he acted, unless by so
doing he participated in some wrong act.
•*** It seems to be dear that unless it can be maintained
that it was illegal or morally wrong, or contrary to public
policy, for the appellee to pay money to the detective or to
anyone else, for the purpose of recovering his own property,
the legal right of the appellant to recover from Wieman in
this case cannot be questioned. Now, was it illegal or morally
wrong, or contrary to public policy, for Wieman to pay more
money to secure the recovery of his own property which pre-
sumably had been stolen? The solution of this question de-
pends upon the nature of the act and its effect upon the
public interest. Every case of larceny may be considered
from two points of view: first, with respect to th? interest of
the general public in the matter, and then as to the interests
of the real owner of the lost property. As to the first, it
seems to be clear that the public has no property interest, and
indeed no other interest, except such as grows out of its duty
to protect property and enforce its laws in the interest of the
public. For these reasons, it is of public interest and in ac-
cordance with public policy that the laws for the protection
of property shall be effective, in order that the offenders may
be promptly apprehended and convicted. Therefore, all pro-
posed agreements made with the thief or with anyone, by
which the apprehension of the criminal, his trial or conviction
may be prevented or obstructed, are contrary to public policy,
and absolutely void. With respect to the personal property
interests of the real owner, the public has no particular con-
cern. There can be no reason assigned why the owner of
stolen property cannot pursue his own interest as he deems
proper, so long as there is no interference with the proper en-
forcement of the laws in the pursuit, apprehension and con-
viction of the criminal. The owner may properly take no
step nor make contracts or arrangements that in any respect
will interfere with the performance of these things. He may
sue the thief or others in the possession of the stolen prop-
erty in replevin or by any other appropriate proceeding, and
it seems to be without reason to deny him the right to negotiate
for the return of any of the property he could sue for, pro-
vided he agrees to nothing that ^"^*^ has the object or effect of
obstructing, impeding or preventing the apprehension or con-
viction of the criminal. Upon a contract containing such
June, 1906.] Schibm v. Wieman. 377
features, having such a purpose or effect, there can be no re-
covery; it is contrary to public policy and void; and, it may
be added, that if anyone advances money for such a purpose,
participates in the illegal purpose, and his contract for that
purpose is tainted, contrary to the public interest and is void.
There seems to be a wide concurrence in the general prin-
ciple that a contract for the return of stolen property to the
true owner is not void, as being contrary to public policy, so
long as it does not interfere, or tend to interfere, with the
public interest and duty respecting the apprehension or con-
viction of the criminal. It was stated by the supreme court
of the United States in Pope Mfg. Co. v. GormuUy, 144 U. S.
224, 12 Sup. Ct. Rep. 632, 36 L. ed. 414, that "ordinarily
the law leaves to parties the right to make such contracts as
they please, demanding, however, that they shall not require
either party to do an illegal thing, and that they shall not
be against public policy or in restraint of trade."
In Burnett v. Weber, 125 N. Y. 22, a suit to foreclose a
mortgage, given to secure to the plaintiff pa%Tnent for goods
stolen, the defense set up was that it was given to compound
a felony; the court held that it was necessary "to show that
there was some agreement or promise on the part of the
mortgagee to forbear prosecution for the crime, or to suppress
evidence that would tend to prove it." So in Ford v. Cratty,
52 111. 313, an attorney who retained and refused to pay over
money of his client, was shown a warrant for embezzlement,
and told that unless he paid or secured the claim the prosecu-
tion would be pushed to a conclusion. It was held not to be
regarded as having been given to compound a felony. The
same view is maintained in Brittin v. Chegary, 20 N. J. L.
625; Deere v. Wolff, 65 Iowa, 32. 21 N. W. 168.
In Ward v. Lloyd, 7 Scott (N. R.), 499, 46 Eng. Com. L.
785, it was moved to set aside a warrant on the ground that
it was founded upon an illegal consideration, namely, an
agreement to abstain from prosecuting the defendant for em-
bezzlement. The court held, ^^'^ per Tindal, C. J., that "this
is not a case of security given to induce an uninterested party
to withhold a charge of a criminal nature; there is a just debt
due from the defendant to the plaintiff"; and Maule, J., said:
"The plaintiff demanded what he had a perfect right to de-
mand, viz., the money due him; and the defendant did what
he was bound to do, namely, give a security for money he was
bound to pay": Portner v. Kirschner, 169 Pa. 472, 47 Am. St
378 American State Reports, Vol. 115. [Maryland,
Rep. 925, 32 Atl. 442 ; Cass County Bank v. Bricker, 34 Neb.
516, 33 Am. St. Rep. 649, 52 N. W. 575. Many other cases
of similar import could be cited. A large number of these
will be found referred to in the sixth volume of American and
English Encyclopedia of Law, page 410, and note 6, to the
effect that it is perfectly lawful for the parties to compromise
the civil liability arising from the commission of an offense,
and if this be the sole purpose, it is valid.
In this case there is no evidence that the appellee agreed to
compound the felony or intended to do so. In fact the proof
isr not clear that it was the thief who had the possession of the
watch. Rlany circumstances might have then existed which
would show that the person for whom the detective was acting
came into its possession without having been guilty of a crime.
But without laying much stress upon this, the evidence makes
it clear that the purpose of the appellee was solely to regain
his property, and in his efforts to do so carefully refrained
from making any terms other than upon the paj'ment of the
money he was to receive his property. In Brittin v. Che-
gary, 20 N. J. L. 625, the court said of a transaction similar
in some respects to this, that it was "merely getting his own
money. ' '
We hold that Wieman, in paying the money and receiving
the property, did not violate any rule of law, and therefore
the act of Schirm in having the check cashed upon his in-
dorsement, does not now preclude him from recovering from
Wieman the amount which in consequence thereof he has "had
to pay.
It follows that the plaintiff's first prayer should have been
granted and the first of the defendant rejected. The other
prayers were properly refused.
Judgment reversed, with costs to the appellant, and new
trial awarded.
It w Neither Unlawful nor Against Public Policy for au embezzler
to voluntarily give a bond with sureties for the return of the money
which he has wrongfully taken: Portner v. Kirschner, 168 Pa. 472,
47 Am. St. Rep. 925; Miller v. Minor Lumber Co., 98 Mich. 163,
39 Am. St. Rep. 524. And the owner of goods stolen or wrongfully
taken has a right to receive compensation for the injury sustained,
and may take a note signed with sureties therefor. In such a case,
unless there is an agreement not to prosecute or to suppress evidence
of the crime, the defense of compounding a felony is not available
against the note: Cass County Bank v. Bricker, 34 Neb. 516, 33 Am.
St. Rep. 649.
June, 1906.] Doan v. Asceksion Parish. 379
DOAN V. ASCENSION PARISH.
[103 Md. 662, 64 Atl. 314.]
CORPOEATIONS, Devises to. — The Misnomer of a Corporation
will not defeat a devise or bequest to it if its identity is otherwise
sufficiently established, (p. 381.)
TEUST, When not Created. — The legal owner of property is
prima facie entitled to its beneficial enjoyment, and to convert him
into a trustee, there must be a sufficient indication of the inten-
tion of the parties that he is to hold for the benefit of others, (p.
382.)
A TBUST cannot Exist when the same person possesses both
the legal title and the right to the beneficial enjoyment, (p. 382.)
TEUST, When not Created by Devise to the Vestry of a Church.
A devise to the vestry of Ascension Church to be used for such
church purposes as the rector of the church may direct, accompanied
by a statement that it is the purpose and desire of the testator that
the property shall be under the control of the rector of the churcu
and be used for such work as he may deem best for the interest
of the church, does not create a trust, for the reason that the devise
gives both the legal title and the beneficial interest in the property
to the vestry of the church, to be used for its corporate purposes.
The power given to the rector is a naked collateral power, repugnant
to the fee devised to the vestry, and therefore void. (p. 386.)
James A. C. Bond, Stevenson A. Williams and F. Neal
Parke, for the appellant.
John Milton Reifsnider and Guy W. Steele, for the ap-
pellee.
*^ PEARCE, J. This is an appeal from a judgment of
the circuit court for Carroll county in an action of ejectment
brought by Lucretia E. Doan, George L. Van Bibber and
others, against "The ®**^ Vestry of the Parish of the Ascen-
sion of Carroll County," a body corporate of the state of
^larj'land, and "The Order of the Holy Cross of Westminster.
Maryland," also a body corporate of the state of ]Maryland, to
recover thirteen undivided eighteenths of a parcel of land
lying in Westminster, in Carroll county, Maryland, and fully
described in the declaration. The case was tried below with-
out a jury on an agreed statement of facts, providing that if
the court should be of opinion that the plaintiffs were entitled
to recover, then the court should enter judgment accordingly
with one cent damages and costs; but if the court should be
of opinion that the plaintiffs were not entitled to recover,
880 American State Reports, Vol. 115. [Maryland,
then jadgment should be entered for the defendants, with
costs, reserving the right of appeal to either party.
It appears from the statement of facts: 1. That Lucretia E.
Van Bibber, being seised in fee of the parcel of land describ-
ed in the declaration under a valid conveyance thereof,
erected certain buildings thereon, and on September 25, 1892,
conveyed said land and buildings to the defendant, "The
Order of the Holy Cross of Westminster, Maryland, ' ' so long
as it should use said land and buildings for the corporate -pur-
poses mentioned in its certificate of incorporation, with a
proviso that if it should cease to use the same for such cor-
porate purposes, then the title thereto should revert to, and
vest in, the said Lucretia E. Van Bibber, her heirs and as-
signs. 2. That the said "The Order of the Holy Cross of
Westminster, Maryland," without ever obtaining the sanc-
tion of the legislature of Marj-land to said conveyance, en-
tered into possession of said land and buildings upon the ex-
ecution and delivery of said conveyance, and continued to use
the same for its corporate purposes until April 24, 1905, when
it finally abandoned the user thereof for its corporate pur-
poses. 3. That the said Lucretia E. Van Bibber died Febru-
ary 8, 1896, leaving a last will and testament duly executed
and admitted to probate by the orphans' court of Carroll
county, whereby, amongst other things, she devised as follows :
"T\Tiereas, I have heretofore, by deed dated September 25,
1892, granted ****^ and conveyed a parcel of land containing
one acre, one rood and four perches of land more or less to
'The Order of the Holy Cross of Westminster, Maryland' (a
body corporate of the state of Maryland), subject to the fol-
lowing condition: 'That in the event said Order of the Holy
Cross should at any time hereafter abandon said premises for
the uses in its certificate of incorporation mentioned, then in
that event said land and premises, with the buildings and im-
provements thereon, shall revert to me, my heirs and assigns,'
as appears by said deed — and desiring to provide for the dis-
posal of said property in the event of the abandonment and
the reversion of the same, as in said deed set forth, I give and
devise said land in said deed described and thereby conveyed,
to the Vestry of Ascension Church, Ascension Parish, in West-
minster, Carroll county, Maryland, to be used for such church
purposes as the rector of said church shall or may direct, it
being my purpose and desire that the said land and buildings
thereon shall be under the control of the rector of tlie Aseen-
June, 1906.] Doan v. Ascension Parish. 381
sion Church, and shall be used for such work as he may deem
for the best interest of Ascension Church"; 4. That upon the
abandonment of said land and buildings as aforesaid, the
said Order of the Holy Cross of Westminster, Maryland, sur-
rendered and delivered the actual possession of said land and
buildings to "The Vestry of the Parish of the Ascension of
Carroll County," one of the defendants, which accepted said
delivery and possession, and entered upon said lands and
buildings, and now holds the same, and has ever since rented
the same by the direction and with the consent of the rector
of said church, the money derived therefrom being used for
the purposes of the Ascension Church, it now and always
being the only church within the territorial limits of said par-
ish, there being but one Ascension Church, and but one Ascen-
sion Parish in Carroll county, embracing the town of West-
minster. 5. That since the institution of this suit, at the
first session of the legislature after the abandonment of said
premises by the said Order of the Holy Cross, the legislature
gave its sanction and consent to the devise now in question in
the will of said Lucretia E. Van Bibber. And 6, That if said
®^ devise is not valid and effective, then the plaintiffs are
entitled to thirteen undivided eighteenths of said land and
premises.
It will be seen that the corporate name and title of "The
Vestry of the Parish of the Ascension of Carroll County" is
not correctly given in Miss Van Bibber's will, it being there
called "The Vestry of Ascension Church, Ascension Parish,
in Westminster, in Carroll county, Maryland. " It is too well
settled, however, to admit of question that the misnomer of a
corporation will not defeat a devise or bequest to it, if its
identity is otherwise sufficiently certain. As was said in
Woman's Foreign Miss. Soc. v. Mitchell, 93 Md. 199, 48 Atl.
737, 53 L. R. A. 711: "When it is clear who was intended to
take, the accidental miscalling of the beneficiary's name will
not invalidate the gift." And again in Reilly v. Union
Protestant Infirmary, 87 Md. 668, 40 Atl. 894, it was said:
"The name is simply descriptive of the legatee. The name is
no more the legatee than is the name of an individual the in-
dividual himself." It is too obvious for argument, upon ref-
erence to the agreed statement of facts, that the beneficiary
was intended to be "The Vestry of the Parish of the Ascen-
sion of Carroll County," and we understand that this is prac-
tically conceded by the appellant.
382 American State Reports, Vol. 115. [Maryland,
Neither is it denied that Miss Van Bibber had the power
and right to devise this property, and the sole question pre-
sented is, whether under a proper construction of the lan-
guage, the devise is valid or void.
The plaintiff asserts that this devise creates a trust in its
subject matter, and that the trust thus created is void, be-
cause its objects are not ascertained, and also because, even
if ascertained, it is a perpetuity; while the defendants eon-
tend that the devise is of a fee simple estate, to the Vestry of
the Parish of the Ascension, and not a trust, and that the
only construction of the subsequent clause relating to the
control of the said land and buildings by the rector of the
parish is that it is an attempt to ingraft upon the fee a naked
collateral power to cut down the fee, to which the law will
not permit effect to be given.
Mr. Hill, in his work on Trustees, fourth American edition,
star page ^^^ 44, says : * ' Before the relation of trustee can be
constituted, there must necessarily exist: 1. A subject matter
for a proper trust ; 2. A person competent to create a trust ;
3. One capable of holding property as trustee ; and 4. A per-
son for whose benefit the trust property is held, who is known
by the somewhat barbarous appellation of cestui que trust. ' '
In the case at bar the land and buildings devised are proper
subject matter for a trust; the devisor is competent to create
a trust, and the devisee is capable of taking and holding prop-
erty as a trustee ; but there must still be found within the
terms of the devise a cestui que trust. On page 55 IVIr. Hill
says: "The legal owner' of property is prima facie entitled to
its beneficial enjoyment, and in order to convert him into a
trustee, there must be a sufficient indication of the intention
of the parties that he should hold the estate for the benefit of
others." To effect this conversion there must be "a proper
declaration of the trust, for it is not the legal conveyance or
transfer of the property, but the declaration of the trust, that
operates in the creation of the trustee": Hill on Trustees, 4th
Am. ed., 64.
It is apparent, therefore, that wherever a trust is alleged to
be created by any instrument or instruments, there must be a
separation of the legal estate from the beneficial enjoyment,
and that a trust cannot exist where the same person po-ssesses
both. As expressed by Mr. Lewin in his work on Trusts,
volume 1, page 14, first American edition: "A trust is u
confidence reposed in some other than the cestui que trust,
June, 1906.] Doan v. Ascension Pabish. 383
for which the cestui que trust has no remedy but by sub-
poena in chancery; .... for as a man cannot sue a sub-
poena against himself, he cannot be said to hold upon trust
for himself. If the legal and equitable interests happen to
meet in the same person, the equitable is forever merged in
the legal." INIr. Lewin is equally explicit as to the necessity
of a proper declaration of trust, saying on page 83: "It is
essential to the creation of a trust that there should be the
intention of creating a trust, and therefore, if, upon a con-
sideration of all the circumstances, the court is of the opinion
that the settler did not mean to create a trust, the court will
not impute a trust where none in fact was contemplated."
**'' In Bennett v. Humane Impartial Soc, 91 Md. 10, 45
Atl. 888, this court said: "Whilst no set form of words is
required to create a trust, if there be an intention to create
one, still there must be a manifestation on the face of the
will of such an intention before a trust will be declared. The
particular circumstances which denote such an intention are
necessarily variant ; but it may be generally affirmed that
where there is a gift to one for the use of another, or whert3
the legatee or devisee is clearly designed to have no beneficial
interest in the property given to him, a trust for the benefit
of some one was intended to be created, and this conclusion
would result either from the words used, or from the legal
effect of the instrument itself. In the one case there would
be an express declaration of a trust, in the other there would
be a trust by construction, but in both it is essential that
there should be an intention to create a trust, or none will
arise. ' '
It is obvious that there is in this will no express declaration
of any trust, and if any can be declared to exist, it must rest
upon implication derived from the language of the will, and
it is contended by the plaintiffs that the words following the
devise to the vestry, viz., "to be used for such church pur-
poses as the rector of said church shall or may direct, it being
my purpose and desire that the said land and buildings
thereon shall be under the control of the rector of the Ascen-
sion Church, and shall be used for such church work as he
may deem for the be.st interest of Ascension Church," creates
a trust for indefinite purposes or beneficiaries. Let us see,
then, what is meant by the "church purposes" and "church
work" which is here referred to. If there were anything in
this will to justify the conclusion that Miss Van Bibber meant
384 American State Reports, Vol. 115. [Maryland,
thereby general or diocesan missions, or any of the charitable
or religious objects which the Christian church at large is
concerned in, there might be ground for holding that the
Vestry of the Parish of the Ascension of Carroll County^ was
not designed to take the beneficial interest in the property
devised to it, and was only designed to be the administrator
of its benefits to these indefinite beneficiaries, but this inten-
tion must **** be deduced from some rational and substantial
analysis of the will, and not from abstract speculation merely.
If the contention of the plaintiffs is to prevail, they will de-
feat the intention of the testatrix that they should in no event
have this particular property, and as was said in Bennett v.
Humane Impartial Soc, 91 Md. 10, 45 Atl. 888: "Courts are
not, or ought not to be, astute in searching for a construction
which nullifies a will if there are other equally reasonable
interpretations which uphold it."
In Phillimore's Ecclesiastical Law, volume 2, page 1755,
the word "church" is said to be derived from the two Greek
words "kurion oikos," the "house of the lord," and this
plainly appears in the scotch word "kirk." Its primary
meaning as given in the Century Dictionary is, "an edifice
or place of assemblage for Christian worship." Several
secondary meanings are there given, conforming to different
contexts in which the word is used, among which are the
following: "An organized body of Christians belonging to
the same city, diocese or province, as the church at Corinth
or the Syrian church"; and "a body of Christians worship-
ping in a particular church edifice or constituting one congre-
gation."
It is in this latter sense that the word is used in the code,
article 23, section 206, which provides for incorporating re-
ligious societies or congregations generally, and which author-
izes them to take and hold property and "to use, lease, mort-
gage or sell and convey the same in such manner as they
shall judge most conducive to the interest of their respective
churches, societies or congregations."
It is used in the same sense in the act of 1798, chapter 24,
which provides specially for the incorporation of vestries for
each of the parishes of the Protestant Episcopal Church in
this state. In section 29 of that act it is declared that "no
vestry shall sell, alien or transfer any of their estates or
property belonging to their church or churches without the
June, 1906.] Doan v. Ascension Parish. 385
consent of at least five of their body (of which number the
rector shall always be one), together with the consent of both
the church wardens ' ' ; and in section 9 of the same act it is
provided that the ®**® vestry of each parish, for the time
being, shall have an estate in fee simple in all lands, and
other property belonging to them, and "shall manage and
direct all such property as they may think most advantageous
to the interest of the parishioners."
In the case of Weld v. May, 9 Cush. 181, the word
"church," it was contended, meant an indefinite aggregation
of persons, but the court said, "as commonly used in our law,
it is synonymous with 'parish' .... and designates an in-
corporated society." The references above made to code,
article 23, and the act of 1798, chapter 24, are sufficient to
show that as the word is used in the law of Marjdand, it is
synonymous with the corporate entity holding the title to its
property. The devise in this will is to "the Vestry of As-
cension Church, Ascension Parish, in "Westminster, Carroll
County, Maryland," and when she added, "to be used for
such church work or church purposes as the rector of said
church may deem for the best interests of Ascension Church, ' '
it is, we think, obvious, in the light of what we have said
as to the meaning of the word "church," that she meant
"parish" purposes and "parish" work — that is, the purposes
and work of the Vestry of the Parish of the Ascension of
Carroll County, or, for the corporate work and purposes of
the vestry of that parish. This purpose would be sufficiently
clear if the last clause in the devise had been omitted, but it
is distinctly asserted and emphasized in that clause where
the "church work" previously mentioned is declared to be
such as the rector should deem best, not for the interest of
the church at large, but of Ascension Church.
In Domestic and Foreign Miss. Soc. of the Protestant
Episcopal Church of the United States of America v. Gaither,
62 Fed. 422, there was a bequest of five thousand dollars to
the society above named with a request and desire that it be
applied to domestic missions. Judge Morris said: "This
society has for its immediate object two purposes — one domes-
tic, the other foreign, missions. It would seem, therefore,
that money given to the corporation as this was is not to be
held by it upon any trust, but is to be expended by it in the
missionary work which it carries on in the United States.
Am. St. Bep., Vol. 115—25
386 American State Reports, Vol. 115. [Maryland,
.... This is not a case ^^ in which there is a trust, or
trustee and cestui que trust. It is a direct expenditure by
the corporation for the very purpose for which it was created.
It is, therefore, not within the ruling in Church Extension
Soc. V. Smith, 56 Md. 362, and is stronger than Eutaw Place
Bap. Church v. Shively, 67 Md. 493, 1 Am. St. Rep. 412, 10
Atl. 233, in which the court sustained the validity of the be-
quest as being one for the corporate use of the donee."
So, in Look's Case, 7 N. Y. Supp. 298, a bequest to the
American Bible Society, to be used for the promulgation of
the Holy Bible, was held to be a gift limited to the very use
for which the donee was incorporated, and not a trust for an
indefinite beneficiary.
Holding, as we do, that the purposes and uses for which
she desired this property to be used were the corporate pur-
poses of the donee, it is immaterial that she wished the rector
to determine for which of these corporate uses it should be
employed, or whether this was determined by the rector or
by the vestry. Inasmuch as the whole beneficial interest in
the property is given to the Vestry of the Parish of the
Ascension, the true reading of the will is, that the estate given
is not an estate given in trust, but one devised to the corpora-
tion for its general and corporate purposes: Bennett v. Hu-
mane Imp. Soc, 91 Md. 10, 45 Atl. 888; Woman's Foreign
Miss. Soc. V. Mitchell, 93 Md. 199, 48 Atl. 737, 53 L. R. A.
711. The legal estate and beneficial interest, being thus
vested in the defendant, the estate it takes is an absolute fee
simple. The rector has neither estate nor interest in the sub-
ject of the devise, and the power which the testatrix desired
to be exercised by him of designating the particular corporate
uses to which it should be applied was not to be exercised for
his own benefit or that of another, but for that of the vestry
alone. It is therefore a naked collateral power, repugnant
to the fee devised to the vestry, and for that reason void.
As was said in Smith v. Clark, 10 Md. 186, "No interest in
terms is attempted to be reserved or carved out of the land
for any other person, the enjoyment of the whole estate being
the benefit intended by the testator there to be conferred
upon the devisee," but he attempted to do that which the
law will ®'^* not permit him to do, namely, to prescribe the
mode by which this benefit or property, during all time, was
to be enjoyed by the devisee, .... which would be wholly
June, 1906.] Doan v. Ascension Parish. 3S7
inconsistent with a fee simple interest, as well as public
policy. ' '
For the reasons assigned the judgment will be affirmed.
Judgment affirmed, with costs to the appellees above and
below.
To Constitute an Express Trust, there must be either an explicit
declaration of trust, or circumstances which show beyond a reason-
able doubt that a trust was intended to be created: Beaver v.
Beaver, 117 N. Y. 421, 15 Am. St. Rep. 531. See, too, Estate of
Smith, 144 Pa. 428, 27 Am. St. Eep. 641; Eandall v. Randall, 135
111. 398, 25 Am. St. Rep. 373.
To the Constitution of Every Express Trust there must be a trustee,
an estate to vest in him, and a beneficiary. If property is devised
to persons, to hold in trust for their own benefit, no trust is created,
but they take both the legal and the equitable estate; for these two
estates cannot be separately maintained in the same persons: Greene
V. Greene, 125 N. Y, 506, 21 Am. St. Rep. 743.
The Misnomer in a Will of a Legatee or devisee is not material,
if the will phows who was intended; and extrinsic evidence is ad-
missible, in case of ambiguity or obscurity, to show who was meant:
See the note to Chappell v. Missionary Society, 50 Am, St. Rep.
287.
CASES
IN THE
SUPREME COURT
OF
MICHIGAN.
ROLFE V. LAKE SHORE AND MICHIGAN SOUTHERN
RAILWAY COMPANY.
[144 Mich. 169, 107 N. W, 899.]
CABBIEBS, Connecting, Presumption as to the One on Whose
Line Damage Occurred. — Where goods are transported by successive
carriers, and an action is brought to recover against the terminal
carrier for damage to the goods, it is not enough to show that they
were delivered to the initial carrier in good condition, but the plain-
tiflf must further prove that they remained in such condition when
received by the defendant. There is no presumption that the dam-
age was suffered on its road rather than on that of the initial car-
rier, (p. 389.)
Action to recover for injuries to personal property. Judg-
ment for the plaintiff, and the defendant appealed.
Weaver, Morgan & Priddy, for the appellant.
Bird & Sampson, for the appellee.
!''» MONTGOMERY, J. The plaintiff's consignor deliv-
ered to the Chicago, Burlington and Quincey Railway, at Den-
ver, for shipment to plaintiff at Adrian, Michigan, an automo-
bile of the value of sixteen hundred dollars, in good condi-
tion. The ear was shi.pped by the Chicago, Burlington and
Quincey Railway in B. & A. car No. 11,601. It was ac-
cepted by defendant in the same car in Chicago, and was for-
warded in that car to Adrian. On opening the car at Adrian
it was found that the automobile had never been braced in the
car, and that its motion back and forth on the floor of the car
had been guarded against in no other way than by nailing
across the car in front of the front wheels and back of the
rear wheels a two by four strip ; that the automobile had been
jolted over these strips, so that any jolting of the car would
cause the vehicle to run back and forth on the car floor; that
(388)
May, 1906.] Rolfe v. Lake Shore etc. Ry. Co. 389
this had resulted in serious damage. The plaintiff recovered
for the entire damage, and defendant brings error.
The questions discussed were saved by appropriate excep-
tions, and proper assignments of error were duly filed. The
important question is whether a case was made meeting the
requirements laid down in the two cases of Marquette etc. R
Co. V. Langton, 32 Mich. 251, and Marquette etc. R. Co. v.
Kirkwood, 45 :\rich. 51, 40 Am. Rep. 461, 7 N. W. 760. These
two cases establish the rule for this state that where goods are
transported by successive carriers, and an action brought
again.st the terminal carrier for damage to the goods, it is not
enough to show that the goods were delivered to the initial
carrier in good condition, but it is incumbent upon the plain-
tiff to show that they were in good order when received by the
defendant. We feel ^''^ bound to adhere to this rule, which
has prevailed in this state for more than thirty years.
The plaintiff's counsel does not ask us to depart from the
rule of these cases, but insists that he has brought his case
within it. The plaintiff's brief assumes that the machine was
reloaded by defendant at Chicago. Of this we discover no
evidence whatever. On the contrary, the inference is entirely
the other way, as the machine came through from Denver to
Adrian in the same car. Can it be assumed that the damages
to this car were caused by defendant, rather than the initial
rciad? Certainly, there is no proof of the fact. There is no
testimony tending to show that this car was subjected to any
unusual jolting by defendant while under its control. If the
inference be that the automobile was jolted from its insecure
position by the ordinary action of a freight train, it should
be noted that the car was transported by the initial road a
much greater distance than the defendant hauled it, and was
subject to the same vicissitudes. The inference is therefore
as strong, if not stronger, that the damage was caused by the
initial carrier as that it was caused by defendant. It must be
held that the proofs failed to fix the responsibility upon de-
fendant.
Judgment reversed, and new trial ordered.
McAlvay, Grant, Blair and Ostrander, JJ., concurred.
The Liability of an Initial Carrier for the torta and negligence of
connecting lines is discussed in the note to Pennsylvania Co. v. Lof-
tis, 106 Am. St. Rep. 604; and the burden of proof as between con-
necting carriers to show who is at fault for a loss or injury is dis-
cussed in the note to Beede v. Wisconsin Cent. Ky. Co., 101 Am. St,
if
390 American State Reports, Vol. 115. [Michigan,
Eep. 392. It has recently been held, and probably in accordance
with the better opinion and weight of authority, that when an initial
carrier receives freight in good order, the law presumes that each
successive carrier between the first and the last receives it in good
order; and that this presumption, working through to the last car-
rier, who delivers it in bad order, leaves the responsibility with him,
unless he can show that the damage occurred prior to his receiving
the freight: St. Louis etc. By. Co. v. Coolridge, 73 Ark. 112, 108 Am.
St. £ep. 2L
DETROIT SOUTHERN RAILROAD COMPANY v. MAL-
COMSON.
[144 Mich. 172, 107 N. W. 915.]
SALE OF PEOPEETY F. O. B. Cars, Title to, When Does not
Pass to the Purchaser. — Under an agreement for the sale and pur-
chase of all the coal f. o. b. cars which the purchaser may require
during a specified j'ear for the use of an illuminating company, mine
weights to govern all settlements, no title passes to the purchaser
until the coal is delivered on such cars, and he hence cannot recover
for the unlawful confiscation of the coal before it arrives at the
railroad tracks. Nor is this result affected by the sending of postal
cards by the seller to the purchaser announcing the shipment of the
coal. (p. 393.)
Assumpsit for freight charges. The defendant interposed
a counterclaim for coal confiscated by the plaintiff. The trial
court directed a verdict for the plaintiff, and the defendant
brought error.
Anderson & Rackham, for the appellant.
Dickinson, Stevenson, Cullen, Warren & Butzel, for the ap-
pellee.
*'^* BLAIR, J. Plaintiff sued defendant for the freight
upon certain cars of coal shipped to defendant over plain-
tiff's railroad by the Superior Coal Company, of Wellston,
Ohio, under a contract containing the following clauses:
1T3 <<
CONTRACT WITH DEALERS.
**Made at Detroit, this 1st day of July, 1901, between the
Superior Coal Co., Wellston, O., the first party, and A. Y.
Malcomson, of Detroit, Mich., the second party.
* ' Said first party agrees to furnish all the coal that may be
required by said second party, for the use of The Edison
Illuminating Co., of Detroit (with whom the said second party
has annual contract), for steam or manufacturing purposes,
May, '06.] Detroit Southern R. R, Co. v. Malcomson. 391
until the 30th day of June, 1902, at the following prices, f. o.
b. Mich. Cent. R. R., viz. :
"From July 1st, 1901, until June 30th, 1902.
"Mine run, per ton, $2.05 per net
"The said second party agrees to purchase from said first
party all the mine run coal they may require for the purpose
aforesaid, until said 30th day of June, 1902, and to pay for
same on or before the 25th day of each month for all coal
shipped during the previous month. Mine weights to govern
settlements. ' '
Defendant having given notice of setoff, based, among other
things, upon the confiscation by plaintiff of numerous cars
of coal shipped under said contract, before they arrived at
the jMichigan Central Railroad tracks, waived the benefit of
his plea of the general issue, admitted the plaintiff's claim,
and assumed the affirmative of the issue upon his notice of
setoff. The court held that defendant's contract provided for
a delivery of the coal on the Michigan Central tracks at
Detroit, and that the coal having been confiscated before it
was so delivered, he had no title thereto, and could not re-
cover for its loss. In accordance with this view of the con-
tract, a verdict was directed for plaintiff.
Defendant contends that the court erred in his construction
of the contract; that while the letters, f. o. b., usually import
delivery at the point designated, it is apparent that, in the
contract in question, delivery of the coal to the plaintiff rail-
road company was intended by the parties to be a delivery to
the defendant, and it is said: "There are two features in this
contract strongly indicating this intention: 1. 'Mine weights
to govern settlement.* This language means that defendant
had to ^^^ pay the Superior Coal Company for this coal on
the basis of the weights of the coal at the mines where it was
delivered on cars for transportation to defendant 2.
The contract provides: 'Said second party agrees to purchase
from said first party all mine run coal .... and to pay for
same on or before the twenty-fifth day of each month for all
coal shipped during the previous month.'
"The words, 'for all coal shipped during previous month'
are also significant, we contend, in that they plainly show
when the parties to the contract themselves regarded the re-
sponsibility of the Superior Coal Company for the coal
shipped under it at an end, and that shipment and delivery
392 American State Reports, Vol. 115. [Michigan,
by the Superior Coal Company to defendant were concurrent
and not separate acts."
It is also contended that the letters, f. o. b., are used "to
qualify, fix and determine a certain essential feature of the
contract, viz., the price. The language, 'prices f. o. b.' was
not used unadvisedly by the parties to the contract. These
words are not synonymous with 'delivery f. o. b.' nor with
*f. o. b. ' standing by itself. In interpreting the language,
therefore, it should be given that interpretation which the
parties themselves sought to put upon it, viz. : The basis of
price of the coal, and not the interpretation which plaintiff's
counsel and the court below sought to arbitrarily place upon
it, viz. : The place of delivery of the coal. Particularly is
this so when an entire reading of other portions of the con-
tract, as we have seen, clearly show that a contrary intention
as to place of delivery between the parties existed. The lan-
guage related and was intended by the parties to it to relate
entirely to prices, and not to indicate the place where title
to the coal passed. It is equivalent to the following: 'At the
following prices less freight to Michigan Central R. R. ' ";
citing A. J. Neimeyer Lumber Co. v. Burlington etc. R. R.
Co., 54 Neb. 327, 74 N. W. 670, 40 L. R. A. 534.
The contract is clear and unambiguous and was properly
construed by the court. The words, ' ' free on board, ' ' in such
contracts have acquired a settled judicial meaning: Vogt v.
Schienebeck, 122 Wis. 491, 106 Am. St. Rep. 989, 100 N. W.
820, 67 L. R. A. 756.
There is nothing in the clauses referred to by defendant's
counsel or elsewhere in the contract which militates ^'^'^ against
the usual meaning of the words ; nor was there any evidence
outside of the contract to warrant a different construction.
The opinion of Commissioner Ragan in the Nebraska case,
cited supra, supports defendant's contention that the letters,
f. o. b., relate to the price merely, but none of the other mem-
bers of the court concurred with him upon this point, and
Norval, J., dissented in an able opinion supported by the cita-
tion of numerous authorities. Plarrison, C. J., Sullivan, J.,
and Irvine and Ryan, CC, concurred "in the conclusion
reached by Commissioner Ragan, on the ground that, conced-
ing, for the purposes of this case, that the use of the ex-
pression 'Prices f. o. b. Omaha' might of itself afford a pre-
sumption that the delivery was to be made at Omaha, and that
title should there pass, the other evidential facts were suf-
May, '06.] Deteoit Southern R. R. Co. v. Malcomson. 393
ficient to ground an inference that title should pass at the
place of shipment, and the question being one of fact, the
finding is sustained by the evidence."
As above stated, there are no such evidential facts in this
ease requiring a submission of the question to the jury. Alt-
house V. McMillan, 132 :\rich. 145, 92 N. W. 941, is not in con-
flict with this conclusion. In that case "the correspondence
contemplated, and there actually was in this case, in accord-
ance therewith, a bill of lading procured, which, with the in-
voice attached, was immediately transmitted to the purchaser.
This transfer of the bill of lading passed the title to the prop-
erty in controversy," citing cases.
In the case at bar there was no bill of lading transmitted to
defendant. It is claimed that the postal cards sent to de-
fendant, of which the following is an example, were equivalent
to a bill of lading, viz. :
"Mine weights govern settlements. All bills due tenth of
each month.
"Jackson, Ohio, 10/28, 1901.
"A. Y. M.
* ' In our office we ship this day on your account :
iTe Initial. Car No. Ton. Grade. Route. 186.
0.8. 4324 34.50 Lp. Dt. 5
6534 32.50 " " 6
6753 31.00 " " 7
5160 31.50 It ft 8
5083 32.00 *« «« 9
"Mine No. 3.
"Remarks: Weights to follow.
"Yours truly,
"SUPERIOR COAL COMPANY."
Stamped: "Received Oct. 30, 1901. Ansd. ."
These postal cards were in nowise inconsistent with the con-
Btniction we have placed upon the contract, and, being con-
strued in harmony with it, were mere notices to the defend-
ant that the coal company, in accordance with the contract,
had shipped the coal for delivery to him free on board the
cars at Detroit.
Tlie judgment is affirmed.
Carpenter, C. J., and McAlvay, Grant and Montgomery,
J J., concurred.
394 American State Reports, Vol. 115. [Michigan,
The Term "F. 0. B. Cars" has a definite moaning in the law of
sales. A sale f. o. b. oars means that the subject of the sale is to
be placed on cars for shipment without any expense or act on the
part of the buyer, and that as soon as so placed the title is to pass
absolutely to the buyer, and the property be wholly at his risk, in
the absence of any circumstances indicating a retention of such con-
trol by thvj seller as security for the purchase money, by preserving
the right of stoppage in transitu: Vogt v. Schiencbeck, 122 Wis. 491,
106 Am. St. Rep. 989; Capehart v. Furman F. L Co., 103 Ala. 671,
49 Am. St. Rep. 00.
WILCKE V. DUROSS.
[144 Mich. 243, 107 N. W. 907.]
JUDGMENT, Relief in Equity Against. — If the process is not
served on the defendant, equity has jurisdiction to relieve from tbi;
judgment entered against him. (p. 39.5.)
JUDGMENT, Relief Against in Equity — Amount Involved. —
Though a judgment against the defendant is for less than one hun-
dred dollars, yet if under it property is levied upon of much greater
value than that sum, equity is not prevented from granting relief
on the ground that one hundred dollars is not involved, (p. 395.)
CERTIORARI is not the Proper Remedy for Relief Against a
Judgment on the Ground that Process was not Served on the defend-
ant, if the return will not disclose the facts as to the want of such
service, (p. 396.)
RELIEF Against a Judgment for Want of Service of Process,
Though the Defendant E^ew of the Void Service When Made and
Failed to Take Any Measures to Prevent the Entry of Judgment
Thereunder. — If, in an action, process is served on the defendant's
daughter of the same name as herself, and the defendant is at once
informed of such service, but does not appear and make any objec-
tion, and permits the case to proceed to judgment and a transcript
of the judgment to be taken out and levied on her property, whereupon
she brings suit in equity for relief, such relief must be granted, but
the court has a discretion to refuse to award her costs, (p. 396.)
Suit to set aside a judgment and execution on the ground
that the process was not served on the complainant. The trial
court dismissed the bill, and the complainant appealed,
Emil W. Snyder, for the complainant.
Haug & Yerkes, for the defendants.
^* MONTGOMERY, J. The defendants Duross and
"Weber instituted a suit in justice's court to recover of com-
plainant a demand of sixty-five dollars and forty-seven cents.
A return of a constable showed service upon complainant
May, 1906.] Wilcke v. Duross. 395
Duross and Weber proceeded to take judgment for their claim
and costs, and later took a transcript to the circuit court,
caused execution to be issued and placed in the hands of de-
fendant Dickson, as sheriff, who levied the same upon prop-
erty, of complainant of the value of two thousand dollars or
more. Complainant thereupon served notice on Duross and
Weber, and also upon the sheriff, stating that the judgment
was void for the want of personal service upon her.
Complainant soon after filed this bill setting up the above
facts, and also that she had a just and meritorious ^^^ de-
fense to the claim of Duross and Weber as she was advised by
counsel. She prayed that the judgment be set aside and for
general relief. An issue was made upon the question of ser-
vice, and the answer also contained a demurrer clause.
The circuit judge in his opinion found the facts as follows :
"Through error on the part of the constable, the summons
of the said cause was served upon the daughter of the said
complainant, a person by the same name as the complainant.
The complainant was informed by her daughter of the service
upon her of the said summons on the evening of the service
thereof. It appears that the complainant consulted with an
attorney, and was advised to pay no attention to the said
suit. Complainant was kept advised of the progress of the
suit by the attorney; knew of its pendency, and knew that
judgment had been entered against her, and took no steps
whatever to protect her rights or guard her interests. Some-
time during the fall of 1904 levy was made upon her real
estate in the city of Detroit, and she thereupon filed this
bill"; but refused relief on the authority of Finn v. Adams,
138 Mich. 258, 101 N. W. 533.
The circuit judge, in applying that case, proceeded upon the
understanding that the judgment there involved was void.
This is a mistake. That judgment was admittedly good at
law, and it was sought to set up equitable grounds of attack.
In this case no jurisdiction was obtained to render judgment
as against complainant. That a remedy exists in equity to re-
lieve against such a judgment in a proper case cannot b«
doubted : 2 Freeman on Judgments, 4th ed., sec. 495.
The objection that one hundred dollars is not involved is
answered by the fact that one purpose of the bill is to relieve
property of much greater value from a cloud: Matteson v.
Matteson, 132 Mich. 516, 93 N. W. 1079.
396 American State Reports, Vol, 115. [Michigan,
Certiorari would not have been an appropriate remedy, as
no return would have disclosed the true facts: O'Connor v.
White, 124 Mich. 22, 82 N. W. 664.
*^® The complainant was entitled to relief. The testimony-
shows, however, that complainant knew of the service on her
daughter on the day it was made, that an attorney was con-
sulted on her behalf at once, and that instead of appearing
and making objection she permitted the case to proceed to
judgment, and permitted the transcript to be sued out, and
permitted the levy to be made before taking any proceedings.
While we cannot say that she by her inaction conferred juris-
diction upon the justice, we do hold that when one voluntarily
chooses a remedy which is designed or the necessary effect of
which is to impose large costs upon his adversary, when a
simple, inexpensive remedy is open, the court will, in the exer-
cise of its discretion as to costs, take into account the op-
pressive conduct of the complainant.
The decree will be entered for complainant, but without
costs of the lower court, and for actual disbursements only
in this court, exclusive of a solicitor's fee.
McAlvay, Grant, Blair and Moore, JJ., concurred.
Belief in Equity, Other than by Appellate Proceedings, Against
Judgments, decrees, and other judicial determinations is considered in
the note to Little Rock etc. Ry. Co. v. Wells, 54 Am. St. Rep. 218.
An action in equity to set aside a judgment at law, although not
collateral is an indirect attack, as distinguished from a direct attack
by appeal: Le Mesnager v. Variel, 144 Cal. 463, 103 Am. St. Rep. 91.
It has been held that to obtain relief in equity against a judgment
on the ground that process was not served on the defendant, he must
show that he did not have actual notice of the proceeding before
the judgment was entered and that he had a .meritorious defense:
Preston v. Kindrick, 94 Va. 760, 64 Am. St. Rep. 777. For subsequent
cases on the falsity of the return of process as a ground for relief
in equity from judgments, see McClung v. McWhorter, 47 W. Va.
150, 81 Am. St. Rep. 785; Dowell v. Goodwin, 22 R. I. 287, 84 Am.
St. Rep. 842; Smoot v. Judd, 161 Mo. 673, 84 Am. St. Rep. 738.
May, 1906.J Beotherton v. Gilchrist. 397
BROTHERTON v. GILCHRIST.
[144 Mich. 274, 107 N. W. 890.]
PARTNERSHIP — Agreement for Joint Adventure and a Shar-
ing of the Profits, When does not Create. — An agreement between B.,
T., and G., that they will engage in raising sugar beets, that T. is
to manage the enterprise and receive therefor a stated sum, that B.
is to contribute his counsel and advice, that G. is to advance the
capital, that the profits shall be equally divided among the three,
that G. shall receive no return of his advances until all the other
obligations are met, and in case there is not enough to meet these,
B. and T. will each be responsible for one-third of the deficiency,
does not make G. a partner, and an action cannot be sustained against
him as such where it was clearly understood that neither of hte others
had any authority to make contracts which would bind G., nor the
authority to make contracts to bind them, and that his libility should
be limited to his advances, (p. 399.)
PARTNERSHIP, When Created and Whon not.— Though thero
is a partnership whenever there is a community of property, of inter-
est, and of profits, there is no partnership if any of these elements is
missing, (p. 399.)
William H. Aitken, for the defendant Sanilac Sugar Re-
fining Company.
C. F. Gates, for the defendant Trowbridge.
George P. Codd and Thomas A. E, Weadcock, for the de-
fendant Gilchrist.
^""^ CARPENTER, C. J. This is a suit in equity for a
partnership accounting. The business of the partnership was
that of raising sugar beets in the county of Huron in the year
1902. Complainant, defendant Trowbridge, and defendant
Gilchrist each was interested in this business. Complainant
and Trowbridge were partners in said business, and the im-
portant question in the case is whether Gilchrist was also a
partner. The trial court decided that he was not, and en-
tered a decree in accordance with that decision. From that
decree defendants Trowbridge and the Sanilac Sugar Refining
Company (a creditor of the partnership) appeal.
They maintain that the trial court erred in deciding that
Gilchrist was not a partner. The circumstance that the Sugar
Refining Company stands in the relation of a creditor to tlie
partnership is unimportant. For it is not claimed that the
credit owned by that company was so extended as to make
Gilchrist liable therefor unless he was in fact a partner. We
898 American State Reports, Vol. 115. [Michigan,
have, then, to consider only this question, viz. : Was Gilchrist
actually a partner? The only witnesses sworn in the case
were defendant Trowbridge and one Andrew Wilson, In de-
termining the case we have to consider only their testimony
and certain letters, some of which were written by Trow-
bridge and some by Gilchrist. This testimony clearly proves
that Brotherton, Trowbridge and Gilchrist entered into a joint
venture to raise sugar beets; that Trowbridge was to manage
the enterprise and receive therefor the sum of one hundred
and fifty dollars per month ; that Brotherton was to contribute
his counsel and advice; that Gilchrist was to advance capital
to the amount of ten thousand dollars; that the enterprise
was to be ^''^ carried on under the name of Brotherton and
Trowbridge; that Gilchrist's connection with the venture
should not be disclosed ; and that the profits should be divided
equally among the three interested parties. It also appears
from a letter written by defendant Trowbridge to his code-
fendant the Sugar Refining Company that Gilchrist should
"receive no return of his advances until all other obligations
are met. In case there is not enough left to meet these ad-
vances by the silent partner, Mr. Brotherton and I each agree
to be responsible for one-third of the deficit." • Gilchrist did
in fact advance twenty-two thousand six hundred and fifty
dollars. The venture proved unsuccessful and he has lost this
entire amount, unless he can collect a part of it from his
associates. Though he lAade various suggestions to Trow-
bridge, Gilchrist took no active part in the business manage-
ment of the venture. He did, however, on one occasion give
directions or suggestions ** about plowing where Brotherton
and Trowbridge were raising beets," and on another occasion
directed or suggested that certain employes be discharged.
The law governing this case is stated in the leading case
of Beecher v. Bush, 45 Mich. 188, 40 Am. Rep. 465, 7 N. W.
785, as follows: "Except when one allows the public or indi-
vidual dealers to be deceived by the appearances of partner-
ship when none exists, he is never to be charged as a partner
unless by contract and with intent he has formed a relation in
which the elements of partnership are to be found. And
what are these ? At the very least the following : Community
of interest in some lawful commerce or business, for the con-
duct of which the parties are mutually principals of and
agents for each other, with general powers within the scope of
May, 1906.] Brotherton v. Gilchrist. 399
the business, which powers, however, by agreement between
the parties themselves, may be restricted at option, to the ex-
tent even of making one the sole agent of the others and of
the business": See, also, Canton Bridge Co. v. City of Eaton
Rapids, 107 Mich. 613, 65 N. W. 761; Dutcher v. Buck, 96
Mich. 160, 55 N. W. 676, 20 L. R. A. 776. Under this rule
parties interested in a joint venture are not partners unless
one of them has (to ^'^'^ quote other language from the opin-
ion in Beecher v. Bush, 45 Mich. 188, 40 Am. Rep. 465, 7
N. W. 785) "clothed the other with an agency to act on his
behalf in this business." Tested by this rule there was no
partnership. For it is clearly established by the correspond-
ence in this record that neither Brotherton nor Trowbridge
had authority to make contracts which would bind Gilchrist.
It was clearly understood that the liability of Gilchrist should
be limited to his advances. Neither had Gilchrist authority
to make contracts which would bind Brotherton and Trow-
bridge. It is true Trowbridge testifies that Gilchrist referred
to himself as "a silent partner," and Wilson gives similar
testimony. This, if we had no other testimony, might be
convincing, but, under the circumstances, we think that it is
merely an instance of the use of inexact words to describe a
relation which was not that of a partner. It is also true that
after the partnership business was ended, Gilchrist at one time
announced to Trowbridge his purpose of paying all outstand-
ing accounts. This announcement was accompanied by no ad-
mission of liability, and did not enlarge his obligation.
Nor is this case within the principles of Dutcher v. Buck,
96 Mich. 160, 55 N. W. 676. The most that can be claimed
for that case is that it decides that a partnership exists if there
is "community of property, community of interest and com-
munity of profits." That decision is not applicable if a single
one of these elements is lacking. It does not apply if there
is not community of property : See Canton Bridge Co. v. City
of Eaton Rapids, 107 Mich. 613, 65 N. W. 761. In the case
at bar all the evidence in the record bearing on the question
of community of property in the beet crop is this statement
(in a letter written by defendant Trowbridge to his code-
fendant, the Sugar Refining Company) "the silent partner
(meaning defendant Gilchrist) has no claim whatsoever upon
the crop." We are bound to say, therefore, that there was
no community of property, and that the decision of Dutcher
400 American State Reports, Vol. 115. [Michigan,
V. Buck, 96 Mich. 160, 55 N. W. 676, 20 L. R. A. 776, is in-
applicable.
In my judgment, the trial court correctly decided that
^'^^ defendant Gilchrist was not a partner of complainant and
of defendant Trowbridge, and the decree appealed from
should be affirmed.
McAlvay and Ostrander, JJ., concurred.
Blair and Moore, JJ., concurred in the result.
WHAT CONSTITUTES A PARTNERSHIP.
I. General Definitions Given of Partnership, 401.
n. Distinction Between Partnership and Joint Tenancy and Co-
tenancy, 407.
III. Distinction Between Partnerships and Joint Adventures, 407.
IV. Distinction Between a Partnership and a Joint Stock Company,
407.
V. Purposes for Which a Partnership may be Formed.
a. Necessity for Object of the Partnership to be for Pecuniary
Gain, 408.
b. Effect Where Formed for a Single Transaction or Venture,
408.
c. Effect Where Formed to Buy or Speculate in Land, 409.
d. Effect of Illegal Purpose of Partnership, 409.
VI. Between Whom a Partnership may be Formed.
a. In General, 410.
b. Betv een Several Partnerships, 410.
c. Between Several Corporations or a Corporation and an In-
dividual, 411.
d. Between Husband and Wife, 411.
VII. Necessity for a Consideration as Between the Alleged Partners,
412.
ViU. Necessity for Intent on Part of the Alleged Partners to Form
a Partnership, 412.
IX. Necessity for a Mutual Agency to Exist Among the Parties, 413.
X. Status of de Facto Corporations as Partnerships, 419.
XE. Status of the Promoters or Subscribers to the Stock of a Cor-
poration Prior to Its Incorporation, 419.
XII. Status of Parties Pretending to Conduct a Corporation, 420.
XIII. Community of Interest in Property or in the Profits from the
Management of Property or from Some Enterprise, as Con-
stituting the Parties a Partnership.
a. Necessity for Commimity of Interest in the Property of
the Alleged Partnership.
1. In General, 420.
2. Effect Where One Party Furnishes Land or Personal
Property and the Other Services or Skill, 424.
S. Effect Where Owners of Separate Businesses Pool
Their Property Interests or Proceeds Ratably or
Otherwise, 426.
4. Status of Subpartners with Respect to the Main Part-
nership, 430.
May, 1906.] Brotherton v. Gilchrist. 401
b. Necessity for Participation in Both Profits and Losses, 431.
c. Effect Where the Sharing of Losses is Limited as to Some
of the Parties, 435.
d. Effect Where a Party Shares Loss or Expenses Only, 436.
e. Effect Where Parties Share the Gross Receipts of a
Business, 436.
f. Effect Where Parties Share Crops, Cattle and Their In-
crease Instead of Money, 437.
g. Effect Where Share of Profits is Allowed as Compensation
for Services in Whole or in Part, 439,
h. Effect Where Share of Profits is Allowed in Eepajonent of
Capital Advanced, 441.
1. Effect Where Share of Profits is Allowed as Interest on
Loans or Advances, 441.
J. Effect Where Share of Profits is Allowed as Bent, 442.
XTV. Partnership by Estoppel, 442.
1. General Definitions Given of Partnership.
Though the courts have from time to time formulated general
definitions of a partnership, still it is often found that such defini-
tions are inadequate in some cases. The difficulty arises in making a
definition which will be equally applicable to controversies arising
between parties who are alleged to be partners and controversies
between alleged partners and creditors of the partnership. It may
often happen that parties who are not partners, inter se may still
be partners with respect to creditors by reason of having by their
acts authorized the creditors to consider and rely upon them as
partners.
Chancellor Kent in his Commentaries defines a. partnership as "a
contract of two or more competent persons to place their money,
effects, labor and skill, or some or all of them, in lawful commerce
or business, and to divide the profit and bear the loss in certain
proportions": 3 Kent's Commentaries, 23. And it has been said
that where persons associate themselves together to carry on a joint
business for their common benefit, to which each contribute either
property or services, and the profits arising therefrom are to be shared
between them, it constitutes a partnership: McMurtrle v. Guiler, 183
Mass. 451, 67 N. E. 358. And likewise a combination of property,
labor and skill in an enterprise or business as principal for joint
profit has been declared to be a partnership as between the parties:
McDonald v. Campbell, 96 Minn. 87, 104 N. W. 760; Spaulding v.
Stubbings, 86 Wis. 255, 39 Am. St. Rep. 888, 56 N. W. 469. So, also,
' it has been declared that a partnership is a voluntary contract be-
tween two or more persons who place their money, effects, labor and
skill, or some or all of them, into lawful commerce or business, with
the understanding that there shall be a community of profits between
them: Carter v. McClure, 98 Tenn. 109, 60 Am. St. Rep. 842, 38 S.
W. 585, 36 L. R. A. 282.
In Goldsmith v. Eichold, 94 Ala. 116, 33 Am. St. Rep. 97, 10 South.
80, the court, in discussing the essential characteristics, said: "Part-
Am. St. Rep., Vol. 115—26
402 American State Reports, Vol. 115. [Michigan,
nership is not necessarily an entire merger of the individual, his
labor, energy, or estate in the firm. The extent of the merger is
determined by the agreement entered into, and the purpose the part-
ners have in view. Anything left out of the partnership agreement
and its views, whether it be money, property, labor or skill, pertains
to the individual in as absolute right as if there had been no con-
tract of partnership. The merger of the individual into the firm or
company extends to and includes everything embraced, expressly or
impliedly, in the terms of the agreement, and to that extent changes
the character of his ownership. The individual parts with the sep-
arate right and power to manage, direct, and control that of which,
before that time, he had been supreme arbiter. His dominion was
an integer. It becomes a fraction. He surrenders to the partner-
ship an interest in his property, labor, skill, energy, one or more, as
the agreement may bind him by express or implied stipulations, in
consideration of a corresponding surrender, to like extent and for like
purposes, by his copartners. The agreement consummated, each
partner becomes seised and rightfully possessed of the same interest
in and power over whatever has been contributed to the firm by
his copartners as he retains in that contributed by himself. This,
and no more.
"These properties of partnership render it eminently a relation of
trust. All its effects are held in trust, and each partner is, in one
sense, a trustee: a trustee for the newly created entity, the partner-
ship, and for each member of the firm, who thus becomes a bene-
ficiary under the trust. He is more: he is a trustee, and a cestui que
trust. A trustee, so far as his own duties bind him; a cestui que
trust, so far as duties rest on his copartners. And it is sometimes
said that each partner is both a principal and an agent; a principal
to the extent he represents his own interests, but an agent only so
far as he represents his copartners.
"The first duty devolved by this trust on each of the partners
is to apply the partnership effects to the payment of the debts of
the partnership, and not to pervert them to individual uses or wants,
without the consent of the copartners. Any attempt to so pervert
them, whether by private arrangement or under judicial proceedings,
can be intercepted by the nonconseuting partners. This, on the plain
principle that, being beneficiaries under the trust, they have a clear
right to prevent its breach.
"The trust goes further. After discharging all the partnership -
liabilities, the residuum is still held in trust for partition or dis-
tribution among the several partners, according to their several in-
terests; and the same rights and remedies exist to preserve, protect,
and secure the proper administration of the trust fund to this end
as are given in enforcing the payment of debts. ' '
But a mere participation in the profits and loss of an enterprise
does not necessarily constitute a partnership among the participat-
May, 1906.] Brotherton v. Gilchrist. 403
JDg parties. The relation of partnership inter se is a question of in-
tention on the part of the alleged partners, and this intention is to
be determined from all the circumstances of the case: McDonald v.
Matney, 82 Mo. 358.
The tests by which it is determined that a partnership exists be-
tween the parties has long been a matter upon which the courts have
differed. The doctrine of the earlier English cases seems to have
been disapproved by the later cases. These divergent views are
shown in the discussion on this branch of the subject, found in
Webster v. Clark, 34 Fla. 637, 43 Am. St. Eep. 217, 16 South. 601,
27 L. E. A. 126. The court in that case observed: "As to partner-
ship liability, it was formerly broadly laid down that everyone who
shared in the profits of a trade or business ought also to bear his
share of the losses, for the reason that, by taking a part of the prof-
its, he takes a part of the fund of the business, upon which the
creditors had a right to rely for payment. This was the rule an-
nounced in the case of Waugh v. Carver, 2 H. Black. 235. In the
application of this rule the courts began to add qualifications, and
to make distinctions that were not of easy application. It was
said, in some cases, that a sharing in the profits, in order to render
one liable as partner, must be a participation therein as principal,
and the test applied in other cases was that the party entitled to
a part of profits was a partner, if he had a lien thereon as against
the private creditors of the other members of the firm. The ques-
tion was very much discussed in England in the case of Cox v.
Hickman, 8 H. L. Cas. 268, and it seems to be generally conceded
that this case modified materially the rule formerly announced on
the subject. It is said of this case that it brought back the English
law to the true rule. The facts, in brief, were, that two merchants
became embarrassed and assigned their partnership property to
trustees, with direction and authority for them to carry on the busi-
ness in a new name, and pay the net profits ratably among the cred-
itors of the assignors, and, after the creditors were paid, the residue
to go to the assignors. The creditors joined in the deed of assign-
ment, and a majority of them had authority to make rules for the
conduct of the business, or to end it if they saw proper. Debts were
contracted by the trustees in conducting the business under this
management, and it was held that the creditors were not liable as
partners for the debts. Several opinions were rendered in the case,
and those of the majority do not seem to rest upon the same grounds.
It has been considered that the decision put the liability of one
partner for the acts of his copartner upon the doctrine of the lia-
bility of a principal for the acts of his agents, the test of liability
being in the fact that one has authorized the managers of the busi-
ness to carry it on for him, and that, while the right to participate
in the profits was cogent, it was not conclusive, evidence that the
business was carried on iu part for the person receiving a part of the
404 American State Reports, Vol. 115, [Michigan,
profits. There is found in the books a great deal of discussion on
the subject of partnership liability. The following authorities, among
the many, contain a thorough review of the decisions on the old
rule as it is called, and the modifications thereof: Eastman v. Clark,
53 N. H. 276, 16 Am. Rep. 192; Parchen v. Anderson, 5 Mont. 438, 51
Am. Rep. 65, 5 Pac. 588; Boston etc. Smelting Co. v. Smith, 13 R.
I. 27, 43 Am. Rep. 3; Culley v. Edwards, 44 Ark. 423, 51 Am. Rep.
614; Denny v, Cabot, 6 Met. 82; Meehan v. Valentine, 145 U. S.
611, 12 Sup. Ct. Rep. 972, 36 L. ed. 835; Beecher v. Bush, 45 Mich.
188, 40 Am. Rep. 465, 7 N. W. 785. This court in the case of Dubos
V. Hoover, 25 Fla. 720, 6 South. 788, quoted with approval the def-
inition of a partnership given by Judge Story, viz.: 'Partnership,
often called copartnership, is usually defined to be a voluntary con-
tract between two or more competent persons to place their money,
effects, labor and skill, or some or all of them, in lawful commerce
or business, with the understanding that there shall be a communion
of the profits thereof between them': Story on Partnership, 6th ed.,
sec. 2. It seems that when Judge Story wrote his book on Part-
nership he conceived the liability of one sought to be charged as a
partner to rest upon the law of principal and agent, and his view
is quoted with approval in one of the opinions delivered in the case
of Cox V. Hickman, 8 H. L. Cas. 268.
"A reference to agency as a test of partnership has not, it seems,
proven a correct guide in many cases, as agency results from part-
nership, rather than partnership from agency. It is said in Meehan
V. Valentine, 145 U. S. 611, 12 Sup. Ct. Rep. 972, 36 L. ed. 835:
'Such a test seems to give a synonym, rather than a definition, an-
other name for the conclusion, rather than a statement of the pre-
mises from which the conclusion is to be drawn. To say that a per-
son is liable as a partner who stands in the relation of principal
to those by whom the business is actually carried on adds nothing
by way of precision, for the very idea of partnership includes the
relation of principal and agent.' In this case it is said: 'The requi-
sites of a partnership are that the parties must have joined together
to carry on a trade or adventure for their common benefit, each con-
tributing property or services, and having a community of interest
in the profits. ' Judge Cooley says for the court, in Beecher v. Bush,
45 Mich. 188, 40 Am. Rep. 465, 7 N. W. 185: 'That in so far as the
notion ever took hold of the judicial mind that the question of part-
nership or no partnership was to be settled by arbitrary tests, it was
erroneous and mischievous, and the proper corrective has been ap-
plied. Except when one allows the public or individual dealers to
be deceived by the appearances of partnership when none exists, he
is never to be charged as a partner unless by contract and with in-
tent he has formed a relation in which the elements of a partner-
ship are to be formed.' The same view is announced in the recent
May, 1906.] Beotherton v. Gilchrist. 405
English case of Mollwo v. Court of Wards, 1.. R. 4 P. C, App. Cas.
419. And in section 49 of his work on Partnership, Judge Story says:
'In short, the true rule, ex aequo et bono, would seem to be, that
the agreement and intention of the parties themselves should govern
in all the cases. If they intended a partnership in the capital stock
or in the profits, or in both, then that the same rule should apply
in favor of third persons, even if the agreement was unknown to
them. And, on the other hand, if no such partnership were intended
between the parties, then that there should be none as to third per-
sons, unless where the parties had held themselves out as partners
to the public, or their conduct operated as a fraud or deceit upon
third persons.' "
The definition of a partnership given by Justice Story in his work
on Partnership, and which is quoted by the court in the extract
from the case above, has been substantially adopted in the follow-
ing cases: Stone v. Boone, 24 Kan. 337; Post v. Kimberly, 9 Johns.
470; Niagara County v. People, 7 Hill, 504; Harvey v. Childs, 28 Ohio
St. 321, 22 Am. Rep. 387; In re Gibb's Estate, 157 Pa. 59, 27 Atl.
383, 22 L. R. A. 276; Galveston etc. R. Co. v. Davis, 4 Tex. Civ. App.
468, 23 S. W. 301; Berthold v. Goldsmith, 24 How. 536, 16 L. ed.
762; Hunt v. Oliver, 118 U. S. 210, 6 Sup. Ct. Rep. 103, 30 L. ed.
128.
In Meehan v. Valentine, 145 U. S. 611, 12 Sup. Ct. Rep. 972, 36 L.
ed. 835, the court, after an exhaustive discussion of English decisions,
both prior and subsequent to the leading case of Cox v. Hickman,
8 H. L. Cas. 268, observed: "In the present state of the law upon
this subject, it may perhaps be doubted whether any more precise
general rule can be laid down than, as indicated at the beginning
of this opinion, that those persons are partners who contribute either
property or money to carry on a joint business for their common
benefit, and who own and share the profits thereof in certain pro-
portions. If they do this, the incidents or consequences follow that
the acts of one in conducting the partnership business are the acts
of all; that each is agent for the firm and for the other partners;
that each receives part of the profits as profits, and takes part of
the fund to which the creditors of the partnership have a right to
look for the payment of their debts; that all are liable as partners
upon contracts made by any of them with third persons within the
scope of the partnership business; and that even an express stipu-
lation between them that one shall not be so liable, though good be-
tween themselves, is ineffectual as against third persons. And par-
ticipating in profits is presumptive, but not conclusive, evidence of
partnership.
"In what«ver form the rule is expressed, it is universally held
that an agent or servant, whose compensation is measured by a cer-
tain proportion of the profits of the partnership business, is not
406 American State Reports, Vol. 115. [MTichigan,
thereby made a partner, in any sense. So an agreement that the
lesswr of a hotel shall receive a certain portion of the profits thereof
by way of rent does not make him a partner with the lessee: Perrine
V. Hankinson, 11 N. J. L. 181; Holmes v. Old Colony R. Corp., 5 Gray,
58; Beecher v. Bush, 45 Mich. 188, 40 Am. Eep. 465, 7 N. W. 785.
And it is now equally well settled that the receiving of part of the
profits of a commercial partnership, in lieu of or in addition to in-
terest, by way of compensation for a loan of money, has of itself
no greater eflfect: Wilson v. Edmonds, 130 U. S. 472, 9 Sup. Ct. Kep.
563, 32 L. ed. 1025; Richardson v. Hughitt, 76 K Y. 55, 32 Am. Rep.
267; Curry v. Fowler, 87 N. Y. 33, 41 Am. Rep. 343; Cassidy v.
Hall, 97 N. Y. 159; Smith v. Knight, 71 HI. 148, 22 Am. Rep. 94;
Williams v. Soulter, 7 Iowa, 435; Boston & C. Smelting Co. v. Smith.
13 R. I. 27, 43 Am. Rep. 3; Mollwo v. Court of Wards, L. R. 4 P. C.
419, and Badeley v. Consolidated Bank, 38 Ch. Div. 238, above cited."
A partnership has recently been defined as a relation subsisting
between persons who have combined their property, labor and skill
in an enterprise or business, as principals, for the purpose of joint
profit: Williamson & Co. v. Nigh, 58 W. Va. 629, 53 S. E. 124. We
believe that there is great force in the observation of Lord Wensley-
dale in Cox v. Hickman, 8 H. L. Cas. 268, to the efifect that "the
law as to partnership is undoubtedly a branch of the law of prin-
cipal and agent; and it would tend to simplify and make more easy
of solution the questions which arise on this subject if this true
principle were more constantly kept in view."
If we were to venture a definition of a partnership, we would say
that a partnership exists where two or more persons, each of whom
acting as principal for himself and agent for his associates, combine
their property, labor or skill in a lawful enterprise or business as
principals for the purpose of joint profit.
A partnership is created only by a contract, express or implied:
Dunham v. Loverock, 158 Pa. 197, 38 Am. St. Rep. 838, 27 Atl. 990.
"A partnership is not like a corporation, from which certain con-
sequences necessarily follow. As to the parties to it the contract of
partnership is like any other and the powers conferred, duties en-
joined, and liabilities imposed are to be deduced from its terms.
This idea was expressed by Mr. Justice Lindley in Walker v. Hirch,
27 Ch. Div. 460. He said: 'Persons who share profits and losses
are, in my opinion, properly called partners; but that is a mere ques-
tion of words; their precise rights in any particular case must de-
pend upon the real nature of the agreement into which they have
entered' ": Coward v. Clanton, 122 Cal. 451, 55 Pac. 147.
It is not necessary that the parties adopt a firm name: Johnson v.
Carter, 120 Iowa, 355, 94 N. W. 850, Nor is it necessary that the
agreement of partnership be for any definite term: Fruin v. Chotzia-
noff, 79 Conn. 65, 63 Atl. 782. What will constitute a partnership
is a question of law, but whether the facts which constitute the part-
May, 1906.] Brotherton v. Gilchrist. 407
nership do exist is a question for the jury: Deputy v. Harris, 1 Marv.
(Del.) 100, 40 Atl. 714; Jones v. Purnell (Del.), 62 Atl. 149; Eider
V. Hammell, 63 Kan. 733, 66 Pac. 1026.
n. Distinction Between Partnership and Joint Tenancy and Co-
tenancy.
Although partnerships and cotenancies have many points of simi-
larity, the main difference between them lays in the termination of
the relation and the methods by which a partner and a cotenant may
dispose of his individual interest. Partnerships differ from joint
tenancies in that there is no right of survivorship between the part-
ners: Cowles V. Garrett's Admrs., 30 Ala. 341; Bradley v. Harkness,
26 Cal. 69; La Societe Francaise etc. v. Weidmann, 97 Cal. 507, 32
Pac. 538; Sims v. Dame, 113 Ind. 127, 15 K E. 217; Goell v. Morse,
126 Mass. 480; Putnam v. Wise, 1 Hill, 234, 37 Am. Dec. 309; Far-
rand V. Gleason, 56 Vt. 633; Hungerford v. Gushing, 8 Wis. 332.
m. Distinction Between Partnerships and Joint Adventures.
A joint adventure is generally regarded as of a similar nature to
that of a partnership and governed by the same rules applicable to
partnerships: Slater v. Clark, 68 111. App. 433; Doane v. Adams, 15
La. Ann. 350; Chester v. Dickerson, 54 N. Y. 1, 13 Am. Eep. 550;
Marston v. Gould, 69 N. Y. 220; Ross v. Willett, 76 Hun, 211, 27 N. .
Y. Supp. 785. A joint adventure generally relates to a single trans-
action: Pickercll v. Fisk, 11 La. Ann. 277; Alderton v. Williams,
139 Mich. 296, 102 N. W. 753; Knapp v. Hanley, 108 Mo. App. 353,
83 8. W. 1005; Felbel v. Kahn, 29 App. Div. 270, 51 N. Y. Supp. 435.
The usual test of partnership as between the parties in a joint ad-
venture is the intent to become partners: Fewell v. American Surety
Co., 80 Miss. 782, 92 Am. St. Rep. 625, 28 South. 755.
IV. Distinction Between a Partnership and a Joint Stock Company.
At common law, joint stock companies are regarded as partner-
ships and are governed by the same general rules applicable to part-
nerships, but the status of joint stock companies is often regulated
by statutory provisions: Montgomery v. Elliott, 6 Ala. 701; Smith v
Fagan, 17 Cal. 178; McConnell v. Denver, 35 Cal. 365, 95 Am. Dec
107; Pettis v. Atkins, 60 111. 454; Pipe v. Bateman, 1 Iowa, 369
Frost V. Walker, 60 Me. 468; Phillips v. Blatchford, 137 Mass. 510
Bicker v. American Loan etc. Co., 140 Mass. 346, 5 N. E. 284; But
terfield v. Beardsley, 28 Mich. 412; Willson v. Owen, 30 Mich. 474
Boisgerard v. Wall, Smedes & M. Ch. 404; Atkins v. Hunt, 14 N. H. 205
Wells v. Gates, 18 Barb. 554; Skinner v. Dayton, 19 Johns. 513, 1(?
Am. Dec. 286; McFadden v. Leeka, 48 Ohio St. 513, 28 N. E. 874
Hedge's Appeal, 63 Pa. 273; Shamburg v. Abbott, 112 Pa. 6, 4 Atl
518; Walker v. Wait, 50 Vt. 668; Hardy v. Norfolk Mfg. Co., 80 Va. 404
Kimmins v. Wilson, 8 W. Va. 584; Werner v. Leisen, 31 Wis. ICa
408 American State Reports, Vol. 115. [Michigan,
A distinction, however, exists between a joint stock company and
an ordinary partnership, in that the death of a member does not
ordinarily dissolve the joint stock company where it does have that
effect in an ordinary partnership. And in a joint stock company
there is no delectus personae as in the ordinary partnership: Ma-
chinists' Nat. Bank v. Dean, 124 Mass. 81; McNeish v. Hulless Oat
Co., 57 Vt. 316; Baird's Case, L. R. 5 Ch. App. 725.
V. Purposes for Which a Partnership may be Formed.
a. Necessity for Object of the Partnership to be for Pecuniary
Gain. — "The fundamental idea of a partnership inter sese is that
it is formed for the purpose of trade or gain in business, and that
each has the right to participate in the profits": Missouri Bottlers'
Assn. v. Fennerty, 81 Mo. App. 525. Hence organizations, the ob-
jects of which are social, literary, scientific or political advancement,
and not pecuniary gain, are not regarded as partnerships: Lewis v.
Tilton, 64 Iowa, 220, 52 Am, Rep. 436, 19 N. W. 911; Burt v. Lathrop,
52 Mich. 106, 17 N. W. 716; McMahon v. Ranke, 47 N. Y. 67; Lafond
V. Deems, 81 N. Y. 507; Ostrom v. Greene, 161 N. Y. 353, 55 N. E. 919;
Ash V. Guie, 97 Pa. 493, 39 Am. Rep. 818; Winona Lumber Co, v.
Church, 6 S. Dak. 498, 62 N. W. 107. But voluntary associations for
mutual relief in sickness or distress by means of funds raised by
initiation fees, dues and the like, are regarded as partnerships:
•Gorman v. Russell, 14 Cal. 531; Babb v. Reed, 5 Rawle, 158, 28 Am..
Dec. 650; Beaumont v. Meredith, 3 Ves. & B. 180; Pierce v. Piper,
17 Ves. 15.
But an organization for religious and social purposes, the members
putting their property in common and living as one family, and
having no business for common benefit and profit, is not a partner-
ship: Teed v. Parsons, 202 111, 455, 66 N. E, 1044. Likewise an ar-
rangement between several persons to keep house together in order
to diminish expenses, one party to pay the rent and meat bills, an-
other to pay all other bills, constitutes no partnership: Austin v.
Thomson, 45 N. H. 113. A mere agreement to hold land in common
constitutes no partnership: Iluckabee v. Nelson, 54 Ala. 12; Gilmore
V. Black, 11 Me. 485; Treiber v. Lanahan, 23 Md. 116; Sikes v. Work,
6 Gray, 433; Ballou v. Spencer, 4 Cow. 163; White v. Fitzgerald, 19
Wis. 480.
b. Effect Where Formed for a Single Transaction or Venture. — A
partnership may exist for a single transaction, venture or undertak-
ing: Harris v. Umsted (Ark.), 96 S. W. 146; Bates v. Babcoek, 95
Cal. 479, 29 Am. St. Rep. 133, 30 Pac. 605, 16 L. R, A. 745; Robin-
son V. Compher, 13 Colo. App. 343, 57 Pac. 754; Plunkett v. Dillon,
4 Houst. 338; Winstanley v. Gleyre, 146 111. 27, 34 N. E. 628; Jones
V. Davies, 60 Kan. 309, 72 Am. St. Rep. 354, 56 Pac, 484; Cochran
T. Anderson County Nat. Bank, 83 Ky. 36; Ripley v. Colby, 23 N.
May, 1906.] Brotherton v. Gilchrist. 409
H. 438; Clark v. Eumsey, 59 App. Div. 435, 69 N. Y. Supp. 102;
Demarest v. Koch, 129 N. Y. 218, 29 N. E. 296; Hulett v. Fairbanks,
40 Ohio St. 233; Yeoman v. Lasley, 40 Ohio St. 190; Flower v. Barne-
kofif, 20 Or. 132, 25 Pac. 370, 11 L. E. A. 149; Pierson v, Steinmyer,
4 Rich. 309; Spencer v. Jones, 92 Tex. 516, 71 Am. St. Rep. 870, 50
S. W. 118; Williams & Co. v. Nigh, 58 W. Va. 639, 53 S. E. 124.
c. Effect Where Fonned to Buy or Speculate in Land. — A partner-
ship may be formed for the purpose of buying, dealing or speculat-
ing in lands: Bates v. Babcock, 95 Cal. 479, 29 Am. St. Rep. 133, 30
Pac. 605, 16 L, R. A. 745; Winstanley v. Gleyre, 146 111. 27, 34 N. E.
628; Holmes v. McCray, 51 Ind. 358, 19 Am. Rep. 735; Richards v.
Grinnell, 63 Iowa, 44, 50 Am. Rep. 727, 18 N. W. 668; Simpson v.
Tenney, 41 Kan. 561, 21 Pac. 634; Jones v. Davies, 60 Kan. 309, 72
Am. St. Rep. 354, 56 Pac. 484; Dudley v. Littlefield, 21 Me. 418;
Winslow V. Young, 94 Me. 145, 47 Atl. 149; Morgart v. Smouse, 103
Md. 463, 63 Atl. 1070; Corey v. Cadwell, 86 Mich. 570, 49 N. W. 611;
Menage v. Burke, 43 Minn. 211, 19 Am. St. Rep. 235, 45 N. W. 155;
Hunter v. Whitehead, 42 Mo. 524; Chester v. Dickerson, 54 N. Y.
1, 13 Am. Rep. 550; Williams v. Gillies, 75 N. Y. 197; Mitchell v.
Tonkin, 109 App. Div. 165, 95 N. Y. Supp. 669; Ludlow v. Cooper,
4 Ohio St. 1; Hulett v. Fairbanks, 40 Ohio St. 233; Kelley v. Bourne,
15 Or. 476, 16 Pac. 40; Flower v. Barnekofif, 20 Or. 132, 25 Pac. 370,
11 L. R. A. 149; Spencer v. Jones, 92 Tex. 516, 71 Am. St. Rep. 870,
50 S. W. 118. An agreement to co-operate in the sale of land on
which one of the parties holds an option and to share profits con-
stitutes a partnership: Frazer v. Linton, 183 Pa. 186, 38 Atl. 589.
A partnership to deal in real estate may be formed by parol agree-
ment: Speyer v. Desjardins, 144 111. 641, 36 Am. St. Rep. 473, 32 N.
E. 283; Fountain v. Menard, 53 Minn. 443, 39 Am. St. Rep. 617, 55 N.
W. 601.
d. Effect of Illegal Purpose of Partnership. — Where the object of
the partnership is the prosecution of an illegal business or one which
is contrary to public policy, the partnership agreement is void:
Powell V. Maguire, 43 Cal. 11; Craft v. McConoughy, 79 111. 346, 22
Am. Rep. 171; Tenney v. Foote, 95 111. 99; Hunter v. Pfeiffer, 108
Ind. 197, 9 N. E. 124; Spaulding v. Nathan, 21 Ind. App. 122, 51
N. E. 742; Anderson's Admr. v. Whetlock, 2 Bush, 398, 92 Am. Dec.
489; Stewart v. Mcintosh, 4 Har. & J. 233; Spies v. Rosenstock,
87 Md. 14, 39 Atl. 268; Sampson v. Shaw, 101 Mass. 145, 3 Am.
Bep. 327; Dunham v. Presby, 120 Mass. 285; McGunn v. Hanlin,
29 Mich. 476; Durant v. Phenes, 26 Minn. 362, 4 N. W. 610; Shriver
V. McCloud, 20 Neb. 474, 30 N. W. 534; Gaston v. Drake, 14 Nev.
175, 33 Am. Rep. 548; Tucker v. Adams, 63 N. H. 361; Watson v.
Murray, 23 N. J. Eq. 257; Kelly v. Devlin, 58 How. Pr. 487; Warner
v. Griswold, 8 Wend. 665; Woodwortb v. Bennett, 43 N. Y. 273, 3
Am. Rep. 706; King v. Winants, 71 N. C. 469, 17 Am. Rep. 11; Dudley
410 American State Reports, Vol. 115. [Michigan,
V. Littlfc, 2 Ohio, 504, 15 Am. Dec. 575; Davis v. Gelhaus, 44 Ohio St.
69, 4 N. E. 593; Central Ohio Salt Co. v. Guthrie, 35 Ohio St. 666;
Jackson v. Akron Brick Assn., 53 Ohio St. 303, 53 Am. St. Eep. 638, 41
N. E. 257, 35 L. B. A. 287; Morris Run Coal Co. v. Barclay Coal Co.,
68 Pa. 173, 8 Am. Eep. 159; Wiggins v. Bisso, 92 Tex. 219, 71 Am.
St. Rep. 837, 47 S. W. 637; Watson v. Fletcher, 7 Gratt. 1; Fairbank
V. Newton, 50 Wis. 628. The illegality of the purpose of the part-
nership must, however, plainly appear: Delamour v. Roger, 7 La.
Ann. 152; Williams v. Connor, 14 S. C. 621; Whitcher v. Morey,
39 Vt. 459; Fairbank V. Leary, 40 Wis. 637; Thwaites v. Coulthwaite,
[1896] 1 Ch. 496.
Where a partnership is sought to be formed for several purposes,
and only one of the purposes of the partnership is illegal, the
partnership will be sustained if the illegal object can be clearly sepa-
rated from the legal objects of the partnership: Northrup v. Phillips,
99 111. 449; Anderson v. Powell, 44 Iowa, 20; Dunham v. Presby,
120 Mass. 285; Willson v. Owen, 30 Mich. 474; Todd v. Raflferty's
Admrs., 30 N. J. Eq. 254; Lane v. Thomas, 37 Tex. 157; Whitcher
V. Morey, 39 Vt. 459. So, also, where, in order to conduct a certain
business, it is necessary that the person conducting the business
be legally qualified to do so. A partnership between persons legally
qualified and one who is not so qualified is not illegal where the
business is to be conducted by the legally qualified persons: Harland
V. Lilienthal, 53 N. Y. 438.
VI. Between Whom a Partnership may be Formed.
a. In General. — A partnership may exist between tenants !in
common of lands in conducting business on the land without affect-
ing the legal status of the land: Holton v. Guinn, 76 Fed. 96.
An infant may enter into a partnership agreement: Mehlhop v.
Rae, 90 Iowa, 30, 51 N. W. 650; Vinsen v. Lockard, 7 Bush, 458;
Bush V. Linthicum, 59 Md. 344; Dana v. Stearns, 3 Cush. 372;
Osborn v. Farr, 42 Mich. 134, 3 N. W. 299; Goodnow v. Empire
Lumber Co., 31 Minn. 468, 47 Am. Rep. 798, 18 N. W. 283; Kerr
V. Bell, 44 Mo. 120; Gay v. Johnson, 32 N. H. 167; Continental
Nat. Bank v. Strauss, 137 N. Y. 148, 32 N. E. 1066; Bixler v.
Kresge, 169 Pa. 405, 47 Am. St. Rep. 920, 32 Atl. 414; Miller
V. Sims, 2 Hill, 479; Penn v. Whitehead, 17 Gratt. 503, 94 Am. Dec.
478.
b. Between Several Partnerships. — One partnership firm may
enter into partnership with another partnership firm: Mayrant v.
Marston, 67 Ala. 453; Bullock v. Hubbard, 23 Cal. 495, 83 Am. Dec.
130; Butler v. American Toy Co., 46 Conn. 136; Willson v. Morse,
117 Iowa, 581, 91 N. W. 823; Meador v. Hughes, 14 Bush, 652;
Simonton v. McLain, 37 La. Ann. 663; Gage v. Rollins, 10 Met. 348;
Gulick V. Gulick, 14 N. J. L. 578; Willey v. Renner, 8 N. Hex.
May, 1906.] Brotherton t;. Gilchrist. 411
641, 45 Pac, 1132; Commercial Bank v. Miller, 96 Va. 357, 31 S. E.
812; In re Hamilton, 1 Fed. 800.
c. Between Several Corporations or a Corporation and an In-
dividaaL — The weight of authority is against the existence of an
implied power on the part of a corporation to enter into a partner'
ship agreement with another corporation or an individual. This
power is generally deemed on the ground of public policy, since
in a partnership the corporation would be bound by the acts of
persons who are not its duly appointed and authorized agents and
officers: Central R. & B. Co. v. Smith, 76 Ala. 572, 52 Am. Eep.
353; Gunn v. Central R. E., 74 Ga. 509; Ledginger v. Central Line
Steamers, 75 Ga. 567; Marine Bank v. Ogden, 29 111. 248; Mestier &
Co. V. Chevalier P. Co., 108 La. Ann. 562, 32 South. 520; Conkling v.
Washington University, 2 Md. Ch. 497; Commonwealth v. Smith, 10
Allen, 448, 87 Am, Dec. 672; Hanson v. Paige, 3 Gray, 239; Wittenden
Mills V. Upton, 10 Gray, 582, 71 Am. Dec. 681; French v. Donohue, 29
Minn. Ill, 12 N. W. 354; Aurora Bank v. Oliver, 62 Mo. App. 390; Van
Keuren v. Trenton L. & M. Mfg. Co., 13 N. J. Eq. 302; New York etc.
Canal Co. v. Fulton Bank, 7 Wend. 412; Bissell v. Michigan etc. R. Co.,
22 N. Y. 258; People v. North River etc. Co., 121 N. Y. 582, 18
Am. St. Rep. 843, 24 N. E. 834, 9 L. R. A. 33; State v. Standard
Oil Co., 49 Ohio St. 137, 34 Am. St. Rep. 541, 30 N. E. 279, 15 L.
R. A. 145; Geurnick v. Alcott, 66 Ohio St. 94, 63 N. E. 714;
Mallory v. Hanauer Oil Works, 86 Tenn. 598, 88 S. W. 396; Lamoille
V. R. Co. V. Bixby, 55 Vt. 235; Thomas v. West Jersey R. Co.,
101 U. S. 71, 25 L. ed. 950. But the courts often enforce partnership
liability upon corporations under the same circumstances under
which such a liability would be enforced upon an individual, even
though the individual was not a partner as between the other mem-
bers of the alleged partnership: Butler v. American Toy Co., 46
Conn. 136; Dalton City Co. v. Dalton Mfg. Co., 33 Ga. 243; Cleve-
land Paper Co. v. Courier Co., 67 Mich. 152, 34 N. W. 156; French
V. Donohue, 29 Minn. Ill, 12 N. W. 354; Cameron v. Ford etc.
Bank (Tex.), 34 S. W. 178; Johnson v. Weed etc. Co., 103 Wis.
291, 79 N. W. 236.
d. Between Husband and Wife. — At the common law a married
woman, being incapable of entering into a contract, was naturally
incapable of becoming a member of a partnership: Brown v. Jewctt,
18 N. H. 230; Carey v. Burress, 20 W. Va. 571, 43 Am. Rep.
790. But under the prevailing statutes removing the common-
law disabilities of married women, she may enter into agree-
ments of copartnership: Abbott v. Jackson, 43 Ark. 212; Conant
V. National State Bank, 121 Ind. 323, 22 N. E. 250; Dupuy
V. Sheak, 57 Iowa, 361, 10 N. W. 731; Plumer v. Lord, 5 Allen, 460;
Vail V. Winterstein, 94 Mich. 230, 34 Am. St. Rep. 334, 53 N. W.
932, 18 L. R. A. 575; Merritt v. Day, 38 N. J. L. 32, 20 Am. Rep.
412 American State Reports, Vol. 115. [Michigan,
362; Zimmerman v. Erhard, 8 Daly, 311; Little v. Hazlett, 197 Pa.
591, 47 Atl. 855. But it has frequently been held under statutes
of that general character that the wife cannot enter into a part-
nership with her husband: Gilkerson-Sloss Commission Co. v,
Salinger, 56 Ark. 294, 35 Am. Eep. 105, 19 8. W. 747, 16 L. R. A.
526; Mayer, v. Soyster, 30 Md. 402; Bowker v. Bradford, 140 Mass.
521, 5 N. E. 480; Artman v. Ferguson, 73 Mich. 146, 16 Am. St. Rep.
572, 40 N. W. 907, 2 L. R. A. 343; Payne v. Thompson, 44 Ohio
St. 192, 5 N. E. 654; Board of Trade v. Hay den, 4 Wash. 263, 31
Am. St. Rep. 919, 32 Pac. 224, 16 L. R. A. ^530; Fuller v. McHenry,
83 Wis. 573, 53 N. W. 896, 18 L. R. A. 512. But in some jurisdic-
tions, it has been held that she may enter into partnership with
her husband: Dressel v. Lonsdale, 46 111. App. 454; Louisville etc.
Co. V. Alexander (Ky.), 27 S. W. 981; Zimmerman v. Erhard, 83
N. T. 74, 38 Am. Rep. 396; Suan v. Caflfe, 122 N. Y. 308, 25 N. E.
488, 9 L. R. A. 593.
Vn. Necessity for a Consideration as Between the Alleged Partners.
In order to make an agreement for a partnership valid, there
must be a valid consideration existing as between the partners.
This consideration may, however, be founded on either the mutual
promises of the respective parties or their contributions of either
property, labor or skill toward the common enterprise: Alabama
Fertilizer Co. v. Reynolds, 79 Ala. 497; Trayes v. Johns, 11 Colo. App.
219, 52 Pac. 1113; Mitchell v. O'Neale, 4 Nev. 504; Coleman v. Eyre, 45
N. Y. 38; Emery v. Wilson, 79 N. Y. 78; Breslin v. Brown, 24
Ohio St. 565, 15 Am. Rep. 627; Belcher v. Conner, 1 S. C. 88;
Kimmins v. Wilson, 8 W. Va. 584; Holgate v. Downer, 8 Wyo.
334, 57 Pac. 918; McKinnon v. McKinnon, 56 Fed. 409, 5 C. C. A.
530.
VIII. Necessity for Intent on Part of the Alleged Partners to Form
a Partnership.
A partnership as between the parties is always created by a volun-
tary agreement of the parties and not by operation of law alone:
Causler v. Wharton, 62 Ala. 358; Haycock v. Williams, 54 Ark.
384, 16 S. W. 3; Morgan v. Farrell, 58 Conn. 413, 18 Am. St. Rep.
282, 20 Atl. 614; Bushnell v. Consolidated Ice M. Co., 138 111.
67, 27 N. E. 596; Miller v. Hughes, 1 A. K. Marsh. 181, 10 Am.
Dec. 719; Halliday v. Bridewell, 36 La. Ann. 238; Ingals v. Fer-
guson, 59 Mo. App. 299; Groves v. Tallman, 8 Nev. 181; Wilson's
Exrs. V. Cobb's Exrs., 28 N. J. Eq. 177; Dawson v. Pogue, 18 Or.
94, 22 Pac. 637, 6 L. R. A. 176; Gibb's Estate, 157 Pa. 59, 27 Atl.
383, 22 L. R. A. 276; Cock v. Evans' Heirs, 9 Yerg. 287; Setzer
v. Beale, 19 W. Va. 274; Holgate v. Downer, 8 Wyo. 334, 57 Pac.
918. There must be an agreement, either express or implied:
Savannah etc. Co. v. Sabel (Ala.), 40 South. 88; Providence Mach.
May, 1906.] Brotherton v. Gilchrist. 413
Co. V. Browning, 72 S. C. 424, 52 S. E. 117. And of course the
agreement need not be in writing: Simmons v. Ingram, 78 Mo.
App. 603.
The relation of partnership as between the parties being one of
contract, it has always been the rule that, as between the parties, the
intent of the parties to create a partnership relation as between
themselves is essential to constitute the parties partners: Couch v.
Woodruff, 63 Ala. 466; CuUey v. Edwards, 44 Ark. 423, 51 Am.
Bep. 614; Huggins v. Huggins, 117 Ga. 151, 43 S. E. 759; Niehoff
V. Dudley, 40 111. 406; National Surety Co. v. T. B. Townsend etc. Co.,
]76 111. 156, 52 N. E. 938; Noyes v. Toottle, 2 Ind. Ter. 144,
48 S. W. 1031; Macy v. Combs, 15 Ind. 469, 77 Am. Dec. 103;
Ruddick v. Otis, 33 Iowa, 402; Halliday v. Bridewell, 36 La. Ann.
238; Leonard v. Sparks, 109 La. 543, 33 South. 594; Heise v. Barth,
40 Md. 259; Cannon v. Brush Electric Co., 96 Md. 446, 94 Am.
St. Rep. 584, 54 Atl. 121; Gunnison v. Langley, 3 Allen, 337;
Beecher v. Bush, 45 Mich. 188, 40 Am. Rep. 465, 7 N. W. 785;
Runnels v. Moffat, 73 Mich. 188, 41 N. W. 224; Hazell v. Clark,
89 Mo. App. 78; Hunter v. Conrad, 18 Mont. 177, 44 Pac. 523; Pills-
bury V. Pillsbury, 20 N. H. 90; Sheridan v. Medara, 10 N. J. Eq.
469, 64 Am. Dec. 464; Osbrey v. Reimer, 51 N. Y. 630; Central City
Sav. Bank v. Walker, 66 N. Y. 431; Willis v. Crawford, 38 Or.
522, 63 Pac. 985, 64 Pac. 866, 53 L. R. A. 904; Walker v. Tupper,
152 Pa. 1, 25 Atl. 172; Krall v. Forney, 182 Pa. 6, 37 Atl. 846;
Ferguson v. Gooch, 94 Va. 1, 26 S. E. 397, 40 L. R. A. 234; Earle
V. Art Library Pub. Co., 95 Fed. 544; Shea v. Nilima, 133 Fed.
209, 66 C. C. A. 203; Fechteler v. Palm, 133 Fed. 462, 66 C. C. A.
336.
Previous to the decision of Cox v. Hickman, 8 H. L. Cas. 268,
the leading case on the subject, which announced the rule that
the parties to an alleged partnership are not liable as partners
to third persons unless they are in fact partners as between them-
selves or have held themselves out as partners, it was frequently
held by the American courts that as to third persons it was im-
material whether the alleged partners really intended to sustain
the partnership relation toward each other if they shared the profits:
Marine Bank v. Ogden, 29 111. 248; Brigham v. Clark, 100 Mass.
430; Cleveland Paper Co. v. Courier Co., 67 Mich. 152, 34 N. W.
556; Lea v. Guice, 13 Smedes & M. 656; Bromley v. Elliott, 38
N. H. 287, 75 Am. Dec. 182; Van Kuren v. Trenton Locomotive etc.
Co., 13 N. J. Eq. 302; Manhattan Brass etc. Mfg. Co. v. Sears, 45
N. Y. 797, 6 Am. Rep. 177; Leggett v. Hyde, 58 N. Y. 272, 17 Am.
Rep. 244.
But the weight of the more modern authorities in the United
States is to the effect that the existence of a partnership relation
depends upon the intent of the parties to sustain the relation of
414 American State Reports, Vol. 115. [Michigan,
partners toward eacli other with respect to a community of interest
in both the property and profits of the common business or venture
of the several parties, except, of course, in the case of a holding
out of a person as a partner, which is really a case of estoppel:
Tayloe v. Bush, 75 Ala. 432; Wheeler v. Farmer, 38 Cal. 203;
Mason v. Sieglitz, 22 Colo. 320, 44 Pac. 528; Webster v. Clark,
34 Fla. 637, 43 Am. St. Eep. 217, 16 South. 601, 27 L. R. A. 126;
National Surety Co. v. T. B. Townsend etc. Co., 176 111. 156, 52
N. E. 938; Bradley v. Ely, 24 Ind. App. 2, 79 Am. St. Rep. 251,
56 N. E. 44; Watson v. Lovelace, 49 Iowa, 558; Baughman v. Port-
man (Ky.), 14 S. W. 342; Thillman v. Benton, 82 Md. 64, 33 Atl.
485; Butcher v. Buck, 96 Mich. 160, 55 S. W. 676, 20 L. R. A. 776;
Bidwell v. Madison, 10 Minn, 13; Harris v. Threefoot (Wis.), 12
South. 335; Bissell v. Warde, 129 Mo. 439, 31 S. W. 920; Mackie
V. Mott, 146 Mo, 230, 47 S. W. 897; Horton v. New Pass Gold
etc. Co., 21 Nev. 184, 27 Pac. 376, 1018; Eastman v. Clark, 53 N. H.
276, 16 Am. Rep. 192; Jernee v. Simonson, 58 N. J. Eq. 282, 43
Atl. 370; Wild v. Davenport, 48 N. J. L. 129, 57 Am. Rep. 552,
7 Atl. 295; Curry v. Fowler, 87 N. Y. 33, 41 Am. Rep. 343; Harvey
V. Childs, 28 Ohio St, 319, 22 Am. Rep. 387; Klosterman v. Hayes,
17 Or. 325, 20 Pac. 426; Waverly Nat. Bank v. Hall, 150 Pa. 466,
30 Am. St. Rep. 823, 24 Atl. 665; Boston etc. Smelting Co. v. Smith,
13 R. I. 27, 43 Am. Rep. 3; Whitworth v. Patterson, 6 Lea, 119; Rio
Grande Cattle Co. v. Burns, 82 Tex. 50, 17 S. W. 1043; Smith v.
Hollister, 32 Vt. 695; Robinson v. Allen, 85 Va. 721, 8 S. E. 835;
Z. C. Miles Co. v. Gordon, 8 Wash. 442, 36 Pac. 265, Setzer v. Beale,
19 W. Va. 274; Piano Mfg. Co. v. Frawley, 68 Wis. 577, 32 N. W. 768.
The intent, howev(;r, the existence of which is deemed essential,
is an intent to do those things which constitute a partnership.
Hence, if such an intent exists, the parties will be partners not-
withstanding that they intended to avoid the liability attaching
to partners or even expressly stipulated in their agreement that they
were not to become partners. It is the substance, and not the
name, of the arrangement or contract between them which deter-
mines their legal relation toward each other: Bestor v. Barker, 106
Ala. 250, 17 South. 389; Chapman v. Hughes, 104 Cal. 302, 37- Pac.
1048, 38 Pac. 109; Mason v. Sieglitz, 22 Colo. 320, 44 Pac. 588;
Parker v. Canfield, 37 Conn. 250, 9 Am. Rep, 317; Webster v. Clark,
34 Fla. 637, 43 Am. St. Rep. 217, 16 South. 601, 27 L. R, A. 126;
Pursley v. Ramsey, 31 Ga. 403; Fouguer v. Chicago First Nat, Bank,
141 111. 124, 30 N. E. 442; Griflfen v. Cooper, 50 111. App. 257;
Hart v. Hiatt, 2 Ind. Ter. 245, 48 S. W. 1038; Cooley v. Broad,
29 La, Ann. 345, 29 Am. Rep. 732; Halleday v. Bridewell, 36 La.
Ann. 238; Thillman v. Benton, 82 Md. 64, 33 Atl. 485; Gunnison
V, Langley, 3 Allen," 337; Beecher v. Bush, 45 Mich. 188, 40 Am.
Eep. 465, 7 N. W. 785; Vaiden v. Hawkins (Miss.), 6 South. 227;
May, 1906.] Brotherton v. Gilchrist. 415
Mulhall V. Cheatham, 1 Mo. App. 476; Van Kuren v. Trenton Loco-
motive etc. Mfg. Co., 13 N. J. Eq. 302; Sheridan v. Medara, 10
N. J. Eq. 469, 64 Am. Dec. 464; Mumford v. Nieoll, 20 Johns. 611;
Leggett V. Hyde, 58 N. Y. 272, 17 Am. Eep. 744; Manhattan Brass
etc. Co. V. Sears, 45 N. Y. 797, 6 Am. Eep, 177; Magovern v: Eobert-
son, 116 N. Y. 61, 22 N. E. 398, 5 L. E. A. 589; Klosterman v.
Hayes, 17 Or. 325, 20 Pac. 426; Eighter v. Farrell, 134 Pa. 482, 19
Atl. 687, 19 Atl. 687; Boston etc. Smelting Co. v. Smith, 13 E. I.
27, 43 Am, Eep. 3; Burnley v. Eice, 18 Tex. 481; Duryea v. Whit-
comb, 31 Vt. 395; Eosenfield v. Haight, 53 "Wis. 260, 40 Am. Eep.
770, 10 N. W. 378.
But, on the other hand, if the terms of the contract existing be-
tween the parties do not constitute a partnership, none will be de-
clared, even though the parties have intended one, or even
called the arrangement one: Oliver v. Gray, 4 Ark. 425; Sailors v.
Nixon-Jones Printing Co., 20 HI. App. 509; Dwinel v. Stone, 30 Me.
384; Eose v. Buscher, 80 Md. 225, 30 Atl. 637; Eyder v. Wilcox,
103 Mass. 24; McDonald v. Matney, 82 Mo. 358; Van Kuren v.
Trenton Locomotive etc. Co., 13 N. J. Eq. 302; Burnett v. Snyder,
76 N. Y. 344. In construing a contract which is claimed to consti-
tute a partnership agreement, every doubt must be resolved in favor
of the intent of the parties: Beecher v. Bush, 45 Mich. 188, 40
Am. Eep. 465, 7 N. W. 785. In other words, the question whether
a contract is one of partnership or not is determined by the same
rules applicable to other contracts. The intention of the parties,
when it is ascertainable, will have a controlling force when it is
consistent with the language of the contract, even though the lan-
guage be doubtful: Hendricks v. Gunn, 35 Ga. 234; Horton v. New
Pass, etc, Co., 21 Nev. 184, 27 Pac. 376, 1018; Atkins v. Hunt,
14 N. H. 205; Osbrey v. Eeimer, 49 Barb. 265. The court in Fairly
V. Nash, 70 Miss. 193, 12 South. 149, saying: "But the question is
one of intention, and a contract of partnership will no more be
created by the courts against the will of a party than will those
of any other character. One may not make a contract of partner-
ship, and, calling it an agency, have it treated as such by the courts,
for when the facts are known the law fixes the legal consequences
which flow from them. Neither may one secure the benefits of the
relation of a partner, and by contract secure immunity from its
liabilities as against creditors. But when the contract is sus-
ceptible of the construction put upon it by the parties at the time
it was made, such construction will be accepted by the courts as
the true one."
IX. Necessity for a Mutual Agency to Exist Among the Parties,
In the leading case on the subject of what constitutes a partner-
ship (Cox v. Hickman, 8 H. L. Cas. 268), Lord Cranworth, in de-
livering his opinion, observed: "The liability of one partner for
416 American State Reports, Vol. 115. [Michigan,
the acts of his copartner is in truth the liability of a principal
for the acts of his agent. Where two or more persons are engaged
as partners in an ordinary trade, each of them has an implied au-
thority from the others to bind all by contracts entered into ac-
cording to the usual course of business in that trade. Every partner
in trade is, for the ordinary purposes of the trade, the agent of
his copartners, and all are, therefore, liable for the ordinary trade
contracts of the others. Partners may stipulate among themselves
that some one of them only shall enter into particular contracts,
or into any contracts, or that as to certain of their contracts none
shall be liable except those by whom they are actually made; but
with such private arrangements third persons, dealing with the firm
without notice, have no concern. The public have a right to as-
sume that every partner has authority from his copartner to bind the
whole firm in contracts made according to the ordinary usages of
trade. This principle applies not only to persons acting openly and
avowedly as partners, but to others who, though not so acting,
are, by secret or private agreement, partners with those who appear
ostensibly to the world as the persons carrying on the business."
And Lord Wensleydale, in delivering his opinion in this same
case, very pertinently observed: "The law as to partnership is un-
doubtedly a branch of the law of principal and agent; and it would
tend to simplify and make more easy of solution the questions
which arise on this subject, if this true principle were more con-
stantly kept in view. Mr. Justice Story lays it down in the first
section of his work on Partnership. He says: 'Every partner is an
agent of the partnership, and his rights, powers, duties and obli-
gations are in many respects governed by the same rules and prin-
ciples as those of an agent; a partner virtually embraces the char-
acter of both a principal and agent.' "
But in the later case of Pooley v. Driver, 5 Ch. Div. 458, which
is also one of the leading cases upon the subject, the master of the
rolls in adverting to Cox v. Hickman, 8 H. L. Cas. 268, said: "Then
Lord Cranworth goes on to speak of agency, and I am almost sorry
that the word 'agency' has been introduced into this judgment,
because of course everybody knows that partnership is a sort of
agency, but a very peculiar one. You cannot grasp the notion of
agency, properly speaking, unless you grasp the notion of the ex-
istence of the firm as a separate entity from the existence of the
partners; a notion which was well grasped by the old Roman
lawyers, and which was partly understood in the courts of equity
before it was part of the whole law of the land as it is now. But
when you get that idea clearly, you will see at once what sort of
agency it is. It is the one person acting on behalf of the firm.
He does not act as agent, in the ordinary sense of the word, for
the others so as to bind the others, he acts on behalf of the firm of
May, 1906.] Brotherton v. Gilchrist. 417
which they are members; and as he binds the firm and acts on the
part of the firm, he is properly treated as the agent of the firm.
If you cannot grasp the notion of a separate entity for the firm,
then you are reduced to this, that inasmuch as he acts partly for
himself and partly for the others, to the extent that he acts for the
others, he must be an agent, and in that way you get him to be
an agent for the other partners, but only in that way, because you
insist upon ignoring the existence of the firm as a separate entity.
That being so, you do not help yourself in the slightest degree in
arriving at a conclusion by stating that he must be an agent for
the others. It is only stating in other words that he must be a part-
ner, inasmuch as every partnership involves this kind of agency;
or, if you state that he is agent for the others, you state that he is
a partner."
In Morgan v. Farrel, 58 Conn. 413, 18 Am. St. Eep. 282, 20 Atl.
614, the court, Mr. Chief Justice Andrews delivering the opinion,
said: "An exhaustive definition of partnership is not easy. So far
as the facts in the case present the question of partnership, it is
sufficiently accurate to say that there is a partnership between two
or more persons whenever such a relation exists between them
that each is as to all the others, in respect to some business, both
principal and agent. If such a relation exists, they are partners,
otherwise not. They are partners in that business in respect to
which there is this relation; and as to any other business, they
are not partners. Partnership is but a name for this reciprocal re
lation: Story on Partnership, sec. 1; Lord Wensleydale in Cox v,
Hickman, 8 H. L. Cas. 268; BuUen v. Sharp, L. E. 1 C. P. :
Holme V. Hammond, L. E. 7 Ex. 218; Harvey v. Childs, 28 Ohio St
319, 22 Am. Rep. 387; Eastman v. Clark, 53 N. H. 276, 16 Am. Eep
192; Collyer on Partnership, sees. 139, 412; Stillman v. Harvey, 47
Conn. 26."
Likewise, in the principal case, it was held that parties inter-
ested in a joint venture are not partners unless one of them has
clothed the others with an agency to act in bis behalf in their
business: Brotherton v. Gilchrist, 144 Mich. 274, ante, p. 397, 107
N. W. 890.
The element of agency of one alleged partner for the others in and
about the business in question is sometimes regarded as the most
conclusive evidence of the existence of a partnership: Jernee v.
Simonson, 58 N. J. Eq. 282, 43 Atl. 370. This idea has, however,
been repudiated by the United States supreme court, the court ob-
■erving: "Such a test seems to give a synonym rather than a defini-
tion; another name for the conclusion rather than a statement of
the premises from which the conclusion is to be drawn. To say
that a person is liable as a partner who stands in the relation
of principal to those by whom the business ia actually carried on,
Am. St. Rep., Vol. 115—27
418 American State Reports, Vol. 115. [Michigan,
adds nothing by way of precision, for the very idea of partnership
includes the relation of principal and agent": Meehan v. Valen-
tine, 145 U. S. 611, 12 Sup. Ct. Rep. 972, 36 L. ed. 835.
Still the force of mutual agency as a test of the parties bearing
toward each the relation of partners has been recognized in many
cases: Culley v. Edwards, 44 Ark. 423, 51 Am. Rep. 614; Lee v.
Cravens, 9 Colo. App. 272, 48 Pac. 159; Smith v. Knight, 71 111. 148,
22 Am. Rep. 94; Hallet v. Desbau, 14 La. Ann. 535; Butcher v.
Buck, 96 Mich. 160, 55 N. W. 676, 20 L. R. A. 776; Parchen v.
Anderson, 5 Mont. 438, 51 Am. Rep. 65, 5 Pac. 588; Gibson v. Smith,
31 Neb. 354, 47 N. W. 1052; Eastman v. Clark, 53 N. H. 276;
Halenback v. Rogers, 57 N. J. Eq. 199, 40 Atl. 576; National Union
Bank v. Landon, 66 Barb. 189; Harvey v. Childs, 28 Ohio St. 319,
22 Am. Rep. 387; Hart v. Kelley, 83 Pa. 286; Boston etc. Smelting
Co. v. Smith, 13 R. L 27, 43 Am. Rep. 3; Robinson v. Allen, 85
Va. 721, 8 S. E. 835.
We believe that the views expressed by Mr. Justice Day in Har-
vey v. Childs, 28 Ohio St. 319, 22 Am. Rep. 387, on this subject are
correct. He observed: "Although a partnership may be said to
rest upon the idea of a communion of profits, nevertheless the
foundation of the liability of one partner for the acts of another
is the relation they sustain to each other as being principal and
agent. That relation, it would seem, then, constitutes the true test
of a partnership liability, and rests upon the just foundation that
the joint liability was incurred on the express or implied authority
of the party sought to be charged.
"But if the relation of principal and agent be regarded as the
true test of a partnership and consequent joint liability, the ques-
tion still remains. What shall be deemed sufficient evidence of that
relation, or to raise the implication of authority to incur the lia-
bility in question!
"To this end numerous tests have been supposed to exist; but the
best considered and least objectionable is that of a community of
interest in the profits of a business or transaction as a principal
or proprietor: Parsons on Partnership, 71, and note; Collier on Part-
nership, sees. 25, 44. See, also. Story on Partnership, sees. 36, 38,
60; Berthold v. Goldsmith, 24 How. 536, 17 L. ed. 762.
"But this test is valuable as a rule chiefly because it evinces a
relation between the parties where each may reasonably be presumed
to act for himself and as agent for the others, and to that extent
establishes the fact that the liability was incurred on the authority
of all so participating in the profits. Participation in the profits
of a business, however, cannot be regarded as a rule so universal
and unrelenting as to be unjustly applied to a case where a debt is
incurred by one who cannot be said to be acting in the particular
transaction as the agent or on behalf of the party sought to be
May, 1906,] Brotherton v. Gilchrist. 419
charged. Therefore, on principle, the true test of a partnership,
at last, is left to be that of the relation of the parties as principal
and agent, to be proved by any competent evidence; for when they
sustained that relation, a joint liability may be said to have been
incurred by the authority or on behalf of each of the parties so
related. ' '
X. Status of de Facto Corporations as Faxtnerships.
The subject of what constitutes a de facto corporation was treated
in the monographic note attached to People v. Montecito Water Co.,
33 Am. St. Eep. 176. The general rule is that where several persons
who are doing business as a corporation are a de facto corporation,
they cannot be held liable as members of a copartnership, but where
they have assumed to act as corporation under such circumstances
that they do not constitute either a corporation de facto or de jure,
they may be held liable personally, and, as a general rule, be re-
garded as partners: Monographic note to Cannon v. Brush Electric
Co., 94 Am. St. Rep. 594, 595; monographic note to People v.
Montecito Water Co., 33 Am. St. Eep. 176; note to Eutherford v.
Hill, 29 Am. St. Rep. 600.
XI. Status of the Fromoters or Subscribers to the Stock of a Cor-
poration Frior to Its Incorjwration.
Though the decisions with respect to the question whether the
promoters of a corporation are partners prior to the incorporation
of the company are not apparently harmonious, a close examination
of such decisions will show that the mere fact that persons associate
themselves to promote or organize a corporation does not make such
persons partners. It is true that they may, by reason of an express
or implied agency on the part of all toward each, authorize transac-
tions for which they will be liable as partners. But ordinarily, the
promoters of a corporation are not partners for the reason that there
is no agreement to enter into such a relation, and for the further
reason that there is no agreement among them to share the profits,
the agreement in that respect being that the corporation to be
organized is to become entitled to the profits: Hershey v, TuUy,
8 Colo. App. 110, 44 Pac. 854; Arnold v. Conklin, 96 111. App, 373;
McLennan v. Hopkins, 2 Kan. App. 260, 41 Pac. 1061; McLennan
V. Anspaugh, 2 Kan. App. 269, 41 Pac. 1063; Sproot v. Porter, 9
Mass. 300; Dole v. Wooldredge, 135 Mass. 140; Johnson v. Corser,
34 Minn. 355, 25 N. W, 799; Eoberts Mfg. Co. v. Schlick, 62 Minn.
332, 64 N. W. 826; West Point Foundry Assn. v. Brown, 3 Edw. Ch.
284; Mosier v. Parry, 60 Ohio St. 388, 54 N. E. 364; McFall v, Mc-
Keesport & Y, Ice Co., 123 Pa. 259, 16 Atl. 478. In the recent case
of Mt. Carmel Tel. Co. v. Mt. Carmel etc. Tel. Co, (Ky.), 84 S. W.
515, it was held that subscribers to the stock of a proposed corpora-
tion were partners in the proposed business before the incorporation.
423 American State Reports, Vol. 115. [Michigan,
The holding of the court in Hudson v. Spaulding, 6 N. Y. Supp. 877,
was to a contrary effect.
XII. Status of Parties Pretending to Conduct a Corporation.
"Parties assuming to act in a corporate capacity without legal
organization as a corporate body are liable as partners to those with
whom they contract": Fuller v. Eowe, 57 N. Y. 23; Worthington v.
Griesser, 77 App. Div. 203, 79 N. Y. Supp. 52. And where there never
were any real subscriptions to the capital stock or any payments
thereon, or any intention on the part of the alleged incorporators to
do 80, all of which were required by the statute, it will be held
that the corporation, so called, was but a name under which the
parties conducted a commercial business: Provident B. & T. Co. v.
Saxon, 116 La. 408, 40 South. 778. And, likewise, where the mem-
bers of a corporation voluntarily change or alter the corporate name
selected, without recourse to such formal proceedings as are pre-
scribed by law, they will be regarded as having abandoned the
old corporation, and will be held liable as partners in the new concern
as to parties who deal with them or give them credit: Cincinnati
Cooperage Co. v. Bate, 96 Ky. 356, 49 Am. St. Eep. 300, 26 S. W.
538.
XIII. Community of Interest in Property or in the Profits from the
Management of Property or from Some Enterprise, as Con-
stituting the Parties a Partnership.
a. Necessity for Conununity of Interest in the Property of the Al-
leged Partnership.
1. In General. — In order for a person to be a partner in an enter-
prise or business, it must appear that he has a right of control in
connection with his alleged partners over the property of the part-
nership in addition to a share in the profits: Autrey v. Frieze, 59
Ala. 587; Bond v. May (Ind. App.), 78 N. E. 260; Dwinel v. Stone,
30 Me. 384; Braley v. Goddard, 49 Me. 115; Winslow v. Young, 94
Me. 145, 47 Atl. 149; Beatty v. Clarkson, 110 Mo. App. 1, 83 S. W.
1033; Jernee v. Simonson, 58 N. J. Eq. 282, 43 Atl. 370; McCabe
V. Sinclair, 66 N. J. Eq. 24, 58 Atl. 412; Wormser v. Lindauer, 9
N. Mex. 23, 49 Pac. 896; Ludowieg v, Talcott, 47 Misc. Rep. 77,
93 N. Y. Supp. 621; Farmers' Ins. Co. v. Rosa, 29 Ohio St. 429; Clark
V. Smith, 52 Vt. 529; Buckingham v. First Nat. Bank, 131 Fed. 192,
65 C. C. A. 498.
The view that one must have a right to control the business in
order to be a partner was stated with great clearness by Presiding
Judge Corson in Grigsby v. Day, 9 S. Dak. 585, 70 N. W. 881. He
said: "A participation of one in the profits of the business without
having an interest in or right to control the business does not make
him a partner. Something more is essential. He must have an in-
terest in the business with a right to control, and thus have the
May, 1906.] Brotherton v. Gilchrist. 421
right to profits as a result of the capital and industry in which all
concerned are interested, and not as a measure of compensation
merely: Conklin v. Barton, 43 Barb. 435; Butcher v. Buck, 96 Mich.
160, 55 N. W. 676, 20 L. E. A, 776; Beecher v. Bush, 45 Mich. 188,
40 Am. Eep. 465, 7 N. W. 785. In the latter case the supreme court
of Michigan, speaking by Mr. Justice Cooley, says: 'Except when
one allows the public or individual dealers to be deceived by the
appearance of a partnership when none exists, he is never to be
charged as a partner unless by contract and with intent he has
formed a relation in which the elements of a partnership are to be
found. And what are these? At the very least the following:
Community of interest in some lawful commerce or business, for
the conduct of which the parties are mutually principals of and
agents for each other, with general powers within the scope of the
business, which powers, however, by agreement between the parties
themselves, may be restricted at option, to the extent even of making
one the sole agent of the others and of the business. The plaintiff
and defendant were not mutually principals or agents of each other.
The plaintiff could make no contract for the purchase or sale of
any land that would bind the defendant. He could look up farm
lands that were for sale, and recommend their purchase to the
defendant, but the defendant might or might not conclude to pur-
chase; the same with regard to the sales. The title was in the
defendant, and he could dispose of the lands purchased as he might
think proper. The conclusion seems to be irresistible that the plain-
tiff was in no true sense of that term a partner, but was merely
an agent of defendant, with very limited powers; and his share
in the profits of the sales, if there were any, was merely as compen-
sation for purchasing the lands for the defendant, and in looking
after and paying taxes, renting them, etc. Having no interest in or
control over the lands or money with which they were purchased,
and no authority to bind the defendant in any matter pertaining
thereto, he was not a partner as between themselves."
In other words, participation in the profits and losses of a business
does not constitute a partnership, but there must be such community
of interest as enables each party to make contracts, manage the
business, an'd dispose of the whole property: Broadley v. Ely, 24 Ind.
App. 2, 79 Am, St. Rep. 251, 56 N. E. 44. This idea of community
of interest in the business really means that each partner must be
a principal in the business conducted by the partnership: H. B.
Claflin Co. v. Gross, 112 Fed. 386, 50 C. C. A. 300.
Thus an agreement for each person to furnish one-half of the
money necessary to buy certain bonds, collect the bonds and be part-
ners in respect to the venture was held to constitute a partnership
regardless of the fact that one of the parties failed to furnish his
share of the money, where it was shown that the other party allowed
422 American State Reports, Vol. 115. [Michigan,
him to assist in the collection of the bonds and the proceeds were
deposited to the joint credit of both of the parties: Leonard v. Boyd
(Ky.), 71 S. W. 508. Likewise, an agreement between three persons
to carry out a contract for public work, under which agreement two
of the parties agreed to furnish the money necessary to complete the
work, and the profits were to be divided among the three, amounts
to a partnership: Miller v. O 'Boyle, 89 Fed. 140. And where sev-
eral parties agreed that one of their number should fake a contract
to construct a light, one of them to furnish the iron work and the other
the concrete and other portions, but the profits or losses to be equally
divided, it was held a partnership: United States v. Guerber, 124
Fed. 823. And where a person who had a contract to grade a portion
of a railroad made a contract with another by which that person was
to furnish a certain number of mules as against a less number fur-
nished by the first party, who in addition was to furnish his own ser-
vices, the net profits of the business to be divided between the par-
ties, it constituted a partnership as to third persons, even though
the parties had agreed that one of the parties was not to be re-
sponsible for the debts that might be contracted: Brandon v. Con-
ner, 117 Ga. 759, 45 S. E. 371, 63 L. E. A. 260. But a partnership
is not created between several creditors of a contractor by a writ-
ten agreement looking to the carrying out of a contract for their
benefit: Fewell v. American Surety Co., 80 Miss. 782, 92 Am. St,
Kep. 625, 28 South. 755.
Where one party furnishes money to buy cattle and horses, the
other party to care for them and their increase, all losses to be
borne equally and the proceeds to be equally divided after repaying
the money advanced by the one party, the arrangement constitutes a
partnership: Mudd v. Bates, 73 111. App. 576; Stratton v. O'Connor
(Tex. Civ. App.), 34 S. W. 158.
Where a number of persons sign an agreement to drill for gas,
all to share the profits in proportion to the amounts subscribed
by them, it has been held to constitute a partnership inter se: Clark
v. Rumsey, 52 N. Y. Supp. 417. But an agreement on the part of the
holder of options on land, by which he empowers another to accept
the options and sell the lands and divide the profits with such party,
constitutes no partnership: Clark v. Emery, 58 W. Va. 637, 52 S. E.
770, 5 L. R. A., N. S., 503.
But the mere fact that several persons are joint owners of prop-
erty which may produce profit does not constitute them partners:
Abernathy v. Smith, 57 Ala. 359; Oliver v. Gray, 4 Ark. 425; Harris
v. Umsted, 79 Ark. 499, 96 S. W. 146; Iliff v. Brazill, 27 Iowa, 131,
99 Am. Dec. 645; Labit v. Francioni, 25 La. Ann. 488; Chapman
V. Eames, 67 Me. 452; Thurston v. Horton, 16 Gray, 274; Vaiden
V. Hawkins (Miss.), 6 South. 227; Hedges v. Wear, 28 Mo. App. 575;
March v. Newark etc. Mach. Co., 57 N. J. L. 36, 29 Atl. 481; Holmes
May, 1906.] Brotherton v. Gilchrist. 423
V. United Ins. Co., 2 Johns. Cas. 329; Peltier v. Sewall, 3 Wend.
269; Irvine v. Forbes, 11 Barb. 587; Hopkins v. Forsythe, 14 Pa. 34,
53 Am. Dec. 513; Taylor v. Fried, 161 Pa. 53, 28 Atl. 493.
Tenants . in common engaged in the improvement or development
of the common property are presumed, in the absence of proof of a
contract of partnership, to hold the same relation to each during such
improvement or development as before it began. They may, of
course, form a partnership for developing the common property if
they so agree. A mere agreement between cotenants to drill oil-
wells on the common property, each to pay one-half of the expense
of producing and pumping the oil, to run into pipe-lines serving the
district and there credited one-half to each of them, does' not con-
stitute a partnership between them: Butler Sav. Bank v. Osborne,
159 Pa. 10, 39 Am. St. Rep. 665, 28 Atl. 163.
In Dunham v. Lovelock, 158 Pa. 197, 38 Am. St. Rep. 838, 27
Atl. 990, the court, in a similar case, said: "It is elementary law
that a partnership is created only by a contract, express or im-
plied. The burden of showing its existence is on him who alleges
it, and this burden the court below rightly held had not been
lifted by the plaintiff. To be sure there was undivided possession
of the lease, but unity of possession is one of the distinguishing
characteristics of a tenancy in common. There was contribution to
the cost of operating the well or wells, but this could be compelled
between tenants in common by bill or by account render. There was
division of the product, but this was in accordance with the rights
of the cotenants. Each had a right to share in the product in pro-
portion to his interest in the estate. It may be said that there
was a resulting division of profits, since, if the product exceeded the
cost of production, there was a profit to each part owner; but if so
it was shown by the settlement of his individual accounts only, and
grew out of the fact that he received from his share of the product
more than it cost him to secure it.
"So it may be said there was a contribution of losses, since each
tenant sustained a loss when the value of his share of the product
fell below its cost to him, but this was the individual loss of each,
with whom no one else had any concern, and to which no one was
bound to contribute. There is, therefore, no circumstance relating to
the business done upon, or the development of, the lease not fairly
and naturally referable to the relations of the parties sustained to
each other as tenants in common. There is no agreement shown
that tenants in common might not properly make with each other
for the development of the property in which each held a separate
title, but an undivided possession. Between persons so situated a
partnership does not result by implication of law. It must be
created by an agreement."
424 American State Reports, Vol. 115. [Michigan,
Hence, the fact that a lease of certain lots and the buildings
thereon was purchased by two brothers under an agreement to share
the cost and all subsequent loss or profits is not suflBcient to estab-
lish a partnership between them: McPhillips v. Fitzgerald, 76 App.
Div. 15, 78 N. Y. Supp. 631, affirmed in 177 N. Y. 543, 69 N. E. 1126.
2. Effect Where One Party Furnishes Land or Personal Property
and the Other Services or Skill. — It is often very difficult to ascertain
whether the person furnishing only skill or services toward a busi-
ness enterprise in which the other person furnishes the property with
which to conduct the business, does so as a principal or as an em-
ploy6. Bvit where several persons enter into a trade arrangement,
whereby they have a community of interest in the property used
in the business and also in the profits arising therefrom, they are
generally regarded as partners: "Webster v. Clark, 34 Fla. 637, 43
Am. St. Rep. 217, 16 South. 601, 27 L. E. A. 126; Lockwood v. Doane,
107 111. 235; Ryder v. Wilcox, 103 Mass. 24; Southern Fertilizer Co.
V. Reames, 105 N. C. 283, 11 S. E. 467; Jones v. McMichael, 12
Rich. 176; Cothran v. Marmaduke, 6Q Tex. 370; Dow v. Dempsey, 21
Wash. 86, 57 Pac. 355.
Thus, where one party advanced a certain portion of the cost of
erecting a house upon lands held by the other under a lease, the
lessee agreeing to assign a half interest in the lease of the first
party, and the subsequent costs of the enterprise were to be shared
equally as also were the rents, the court held that the parties
were partners: Laffan v. Naglee, 9 Cal. 662, 70 Am. Dec. 678. But
a mere agreement whereby one of the parties buys lands at his
own expense and has control over them, while the other party merely
negotiates sales of the lands under his direction, is no partnership
even though they divide the proceeds above the cost price and ex-
pense of Belling the lands: Coward v. Clanton, 122 Cal. 451, 55 Pac.
147.
Where a party agrees with the owners of a large business house
to conduct a drug department, in which the latter is "to furnish
the capital," the department to be charged interest thereon, and
the former "to manage the purchases and sales," the department
being charged with rent and the other expenses of conducting it, but
the net profits or the losses to be divided among the parties in cer-
tain proportions, the parties are partners: Leber v. Dietz, 22 Misc.
Rep. 524, 49 N. Y. Supp. 1002. An agreement between a landlord
and his tenant, that the landlord was to receive a certain proportion
of the proceeds of grain and hogs raised by the tenant does not make
them partners, since the landlord has no interest in the grain or
hogs but only in the proceeds: Randall v. Ditch, 123 Iowa, 582, 99
N. W. 190. An agreement whereby one of the parties was to fur-
nish the capital while the other was to plant and raise oysters,
sending them to the first party to be sold by him, the net profits
May, 1906.] Brotherton v. Gilchrist. 425
to be divided, amounts to a partnership: Euckman v. Decker, 23
N. J. Eq. 283. But a mere arrangement that plaintiff was to culti-
vate defendant's farm, each to pay half the expenses and divide the
profits, does not make them partners: Donnell v. Harshe, 67 Mo. 170.
An agreement whereby one furnishes the money to buy cattle, an-
other furnishes his services in buying and shipping, the profits and
losses to be shared equally, has been held to constitute a partner-
ship: Atchison etc. Ey. Co. v. Hucklebridge, 62 Kan. 506, 64 Pac.
58; Lengle v. Smith, 48 Mo. 276. An agreement between the owner
of land and another by which the land owner furnished money to
purchase cattle to be placed on the land, the cattle to be cared for
by the latter, but the amount of money so furnished to be repaid
with interest from the proceeds of the stock when sold, and the
profits and losses to be equally divided, constitutes a partnership:
Bank of Overton v. Thompson, 118 Fed. 798, 56 C. C. A. 554. Like-
wise, where two parties purchase pork on joint account in their
joint names, but one of the parties is to furnish all money necessary
in excess of advances obtainable on the pork but is to be repaid
with interest for such advances, the balance to be divided among
the parties, the transaction is a partnership inter se: Miller v.
Price, 20 Wis. 117. Similar transactions respecting the purchase of
corn and tobacco were held to constitute the parties to be partners:
Pierce v. Shippee, 90 111. 371; Clarke v. Ware, 8 Ky. Law Eep. 438.
And where the owner of a hotel contributed the hotel with its
furnishings, while the other party, who was to manage the business,
was to pay for the water, ice, electric lights and minor repairs, the
profits of the enterprise to be divided between the parties, it was held
to be a partnership; Mason v. Gibson, 73 N. H. 190, 60 Atl. 96. But
in a somewhat similar case it was held to constitute no partnership
where the person who conducted the hotel was alone responsible for
the losses: May v. International L. & Trust Co., 92 Fed. 445, 34 C.
C. A. 448. And where one party furnishes a mill and the other the
employes to operate it, the profits to be divided, it constitutes a part-
nership, since the capital stock of the partnership consists of both
the mill and the employes necessary to operate it: Sankey v. Colum-
bus Iron Works, 44 Ga. 228; Wood v. Beath, 23 Wis. 254; Willey v.
Eenner, 8 N. Mex. 641, 45 Pac. 1132.
But an agreement that the owner should furnish "the mills, the
wagons, the mules and the hands," while the other should give the
business bis personal attention and have one-half of the profits for
his personal services, does not make the parties partners in the oper-
ation of the sawmill: Thornton v. McDonald, 108 Ga. 3, 33 S. E. 680.
Likewise, where one person owns and operates a sawmill at his own
expense, and another person at his own expense furnishes the mill
with logs to be converted into lumber, each of the parties to have
one-half of the lumber, the parties are not partners: Hodges v. Eogers,
426 American State Reports, Vol. 115. [Michigan,
]15 Ga. 951, 42 S. E. 251. Neither are the parties to be considere'l part-
ners in a similar transaction in regard to timber which was converted
into cross-ties, even though the profits from the sale of the eross-tiea
were to be divided, since the mill owner had no title to the cross-
ties, althoiigh he may have had a common interest in the profits:
Padgett V. Ford, 117 Ga. 508, 43 S. E. 1002. But an agreement
between a timber broker and a timber inspector that the inspector
should receive forty per cent of the profits arising from timber spec-
ulations and bear forty per cent of the losses is a contract of part-
nership: Stafford v. Sibley, 113 Ala. 447, 21 South. 459. Likewise
where four parties agreed to engage in the purchase of timber lands
or standing timber from time to time, one of the parties to furnish
the necessary money, one to superintend any logging decided upon,
another to keep the accounts and make the sales, and the other
to investigate and report on desirable timber lands, the money
advanced to be repaid with interest, and the profits or losses
to be shared as each transaction was finished, the agreement con-
stitutes a partnership: Smith v. Putnam, 107 Wis. 155, 82 N. W. 1077,
83 N. W. 288. But where one furnishes timber to the owner of a
sawmill under an agreement to give the sawmill owner either one-
half of the lumber resulting therefrom or a stipulated price per
hundred feet for such one-half, the transaction does not constitute
a partnership: Thornton v. George, 108 Ga. 9, 33 S. E. 633.
3. Effect Where Owners of Separate Businesses Pool Their Prop-
erty, Interests or Proceeds Ratably or Otherwise. — Mere running ar-
rangements such as exist where companies owning connecting lines of
railroads or other means of conducting the business of a carrier, give
through bills of lading or passenger transportations and divide the
proceeds in proportion to the freight earned by each or the amount
of business conducted, or other familiar methods of division, do not
constitute partnership agreements: Ellsworth v. Tartt, 26 Ala. 733,
62 Am. Dec. 749; Hot Springs R. Co. v. Trippe, 42 Ark. 465, 48
Am. Rep. 65; Irvin v. Nashville etc. R. Co., 92 111. 103, 34 Am. Rep,
116; Atchison etc. R. Co. v. Roach, 35 Kan. 740, 57 Am. Rep. 199,
12 Pac. 93; Darling v. Boston etc. R. Co., 11 Allen, 295; Hartan v.
Easte... R. Co., 114 Miss. 44; Aigen v. Boston etc. R. Co., 132 Mass.
423; Watkins v. Terre Haute etc. R. Co., 8 Mo. App. 570; Pattison
V. Blanchard, 5 N, Y. 186; Briggs v. Vanderbilt, 19 Barb. 222; Mo-
hawk etc. R, Co. V. Niles, 3 Hill, 162; Nashville etc. R. Co. v. Spray-
berry, 9 Heisk. 852; St. Louis Ins. Co. v. St. Louis etc. R. Co., 104
U. S. 146, 26 L. ed. 679. And where a refrigerator company makes
no contracts for shipment, but merely furnishes refrigerated and
iced cars to railroad companies upon their order, the mere fact that
it sends a man to superintend the loading of such cars, where it has
no joint manager and does not conduct its business by joint agents,
does not make it and the railroad company partners: American Re-
May, 1906.] Brotherton v. Gilchrist. 427
frigerator Transit Co. v. Chandler (Tex. Civ. App.), 93 S. "W. 243.
Likewise where two boat owners agreed that if at the end of the
season the earnings of one boat, after deducting expenses, exceeded
that of the other, after deducting expenses they would divide the
excess, but neither of the parties had any control in the management
of the boat of the other, the arrangement does not constitute them
partners: Fay v. Davidson, 13 Minn. 523. It would be otherwise,
though, if they had agreed to divide the profits of the boats at the
end of the season: Connolly v. Davidson, 15 Minn. 519, 2 Am. Eep.
154; Fleming v. Fay, 109 Fed. 952, 48 C. C. A. 748. The distinction
is that where the earnings are put into a common fund, that the as-
sociated persons become partners. Thus where several owners of
tugboats formed an association, selecting a manager who handled
and managed all of the vessels, collected the earnings, paid all ex-
penses and distributed the profits in proportion to the agreed value
of the vessels operated, the arrangement constitutes a partnership.
And where a stage route was divided into sections, and the fares,
less tolls, were to be divided in proportion to the length of each sec-
tion, the persons who operated the stages running over each section
of the route are partners notwithstanding that each operator pro-
vided his own stages, horses and drivers, because the fares consti-
tuted a common fund: Champion v. Bostwick, 18 Wend. 175, 31 Am.
Dec. 376.
Where the persons who sent milk to a cheese factory, which was
established by them, received in return, at their option, cheese or
the proceeds of its sale, in proportion to the amount of milk furnished
by each of them, they are not regarded as partners: Hawley v. Keeler,
62 Barb. 231; Butterfield v. Lathrop, 71 Pa. 225; Sargent v. Downey,
45 Wis. 498. But where seven persons agree to deliver milk at a
factory owned by three of their number, jointly hire a cheese-maker,
pay the owners of the factory for the use of the factory, pay all
the expenses of conducting the business, and then divide the net
proceeds of the cheese manufactured in proportion to the amount of
milk furnished by the respective parties, the arrangement constitutes
a partnership: Sullivan v. Sullivan, 122 Wis. 326, 99 N. W. 1022.
And where cranberry growers organize an association for the sale
of their berries, conduct the business through their association, and
divide the profits in proportion to the amount of berries furnished
by the various members, it is held to constitute a partnership:
Briere v. Taylor, 126 Wis. 347, 105 N. W. 807. But a contract be-
tween two cotton compressing companies, whereby they agree to
divide the profits of their business under the following conditions,
namely, after first allowing each company to enjoy without division
all the benefits from the compressing of the first fifty thousand bales
of cotton, and after that to deduct forty cents per bale for the ex-
penses of labor and handling, is not a partnership inter se: Mayrant
428 American State Reports, Vol. 115. [Michigan,
V. Marston, 67 Ala. 453. The court in the case just cited observed:
"The agreement ouf of which the present controversy grew does
not constitute the two firms partners inter sese. Neither firm is to
share in any expenses or losses incurred or sustained by the other.
To constitute a partnership between themselves, parties must stipu-
late for a community of risks, as well as a partition of gains: Smith's
Exr. V. Garth, 32 Ala. 368; Meaher v. Cox, 37 Ala. 201. Under the
contract in this case, neither contracting party is bound to contribute
anything to the expenses or losses of the other. Neither was bound
to aid the other in the performance of any work their several patrons
might intrust to them. They only agreed to divide equally the prof-
its of their several establishments, after setting apart to each the
profits of compressing an agreed number of bales of cotton, to cover
tLe expense of the season 's work, and forty cents a bale for all cotton
each might compress above that agreed number, to cover expense of
handling. So clearly did the parties contemplate keeping their busi-
ness separate, that they inserted this clause in their agreement: 'The
business of our respective firms to be conducted entirely separate
in all respects.' Good faith, and the implications of this contract,
required that each firm should exert itself for the promotion of the
general interest — that neither should obstruct or embarrass the other
in the conduct of its business; but neither was bound to render to
the other any active assistance in the performance of any contract,
or to supply any machinery for this purpose."
An agreement between two cattle buyers that in order "to avoid
conflict and rivalry between them in the cattle trade in that neigh-
borhood" they would divide the profits and losses in respect to all
cattle bought in the same neighborhood and shipped by either, does
not constitute a partnership: Clifton v. Howard, 89 Mo. 192, 18 Am.
Kep. 97, 1 S. W. 26.
Perhaps one of the most interesting pooling agreements or as-
sociations for the maintenance of a uniform scale of prices and equal
distribution of work in the business so associated, the status of which
as a partnership was called in question, is to be found in Potter v.
Morris etc. Dredging Co., 59 N. J. Eq. 422, 46 Atl. 537. In that case
a number of persons and companies engaged in dredging organized
a voluntary association known as the Dredge Owners' Association of
New York Harbor. The question in the case was whether the com-
plainant was entitled to an accounting by reason of the death of one
of the members and the bankruptcy of another. The essential facts
are shown in the quotation from the case which we shall extract from
the case. In discussing the question the court said: "Is the associa-
tion a partnership? On April 20, 1894, a number of persons, firms
and corporations engaged in the business of dredgers formed an as-
sociation with the above name and adopted a constitution, by-laws
and rules. Article 2 of the constitution specifies that 'its object
May, 1906.] Brotherton v. Gilchrist. 429
shall be to designate and maintain a uniform scale of prices for
dredging in that [New York] harbor and vicinity, and to equitably
distribute work.' With a view to this object, it is provided that the
association shall elect annually a president, a vice-president, a treas-
urer and an adjuster, and that weekly meetings shall be held. The
powers of the association are chiefly concentrated in the 'adjuster.'
Rule 2 provides, in substance, that members must not bid on work,
and must not make contracts without the express authority of this
last-mentioned officer. If the case is urgent, they may, indeed, name
a 'spot price,' not less than the existing schedule price fixed by
the association, but they must at once report to the adjuster, who
may award the work to another member. Rule 3 provides 'that each
member shall be entitled to a certain percentage of the work done,
which percentage is to be figured on the basis of day's work.'
By rule 5 the adjuster is directed to equalize the account of members,
and to balance the same in his books. The objects of the associa-
tion are, therefore, threefold: First, to fix prices; second, to prevent
genuine competition in bidding among the members; third, to as-
sign to each member his prope/ share or proportions of the aggregate
of the contracts which may be entered into severally by the members,
without, however, compelling any member to do any work which
he may not have contracted to do, or which he may not desire to do.
The basis of the apportionment is 'day's work,' which means days
actually worked by the machines of the several contractors, the
capacity of the machines being, roughly speaking, gauged by their
power. The scheme, as I understand it (and I speak only from the
bill and the schedules attached thereto), is to allow the several con-
tractors who are members to bid for such work as they please, and
to take the profits of it; but with this limitation: The members must
bid according to the rules of the association, and, if he is getting more
than his fair share of all the work done, the adjuster may refuse
his assent to the award of any particular contract to him, or may,
if he has named a 'spot price,' award the work to another member.
No attempt is made in the constitution, by-laws or rules to create a
common plant or a central control of the work undertaken, or to au-
thorize bids by the association as such. Each member retains his own
plant, hires his own men to operate it, and, the contract having been
awarded to him with the approval of the adjuster, takes the profits
and bears losses which result from its execution. Neither the as-
sociation nor any officer of it has, after the award, the least authority
to interfere. If the job is a profitable one, the association derives
no benefit from it; if a losing one, no loss. Such an arrangement does
not appear to me to come within any definition of partnership to
be found in the text-books or in the adjudged cases. A partnership,
says Mr Justice Depue in Wild v. Davenport, 48 N. J. L. 130, 57 Am.
Bep. 552, 7 Atl. 295, is usually defined to be 'a voluntary contract
430 American State Eeports, Vol. 115. [Michigan,
between competent persons to place their money, effects, labor, and
skill, or some or all of them, in lawful commerce or business, upon
the understanding that there shall be a communion of the profits
thereof between them.* In the case at bar there is no attempt to
unite either the property, labor, or skill of the several members, and
there is absolutely no communion of profits. Community of capital
may not be essential (Pooley v. Driver, 5 Ch. Div. 458), but com-
munity of interest in profits is: 1 Lindlcy on Partnership, 7. Here
there is no such community. The business of the members is dredging
and each member dredges on his own account, and takes to himself
alone, as I have said, such profit as he derives from the contracts
that he is permitted to make. The association itself has no plant,
does no work, and makes no profits. Its sole province is to main-
tain prices and to designate the members to whom the work shall go.
Members may be assessed for the expenses of the association. There
is a vague provision for 'extra assessment' in article 3 of the con-
stitution, and it is said in rule 5 that in equalizing the account of
members the adjuster 'may either apportion any work to members
in arrears, or charge those in excess such sum in money as he may
determine to be due those in arrears.' What this last provision
means it is difficult to say. The expression 'members in arrears' is
averred to mean members who have done less than their proportionate
amount of work. The appropriate relief to be afforded to them is
to assign them more if they desire it. How any sum of money can
be due those in arrears does not appear. No rule for ascertaining
it is to be found. So far as the bill shows, its ascertainment is im-
possible except by the arbitrary fiat of the adjuster. Should the
adjuster attempt to name a sum as 'due' (and no such attempt is
alleged), it is plain that his determination would not be an appor-
tionment of profits according* to any rule of the association, but rather
a penalty exacted by him because of his own default in not properly
regulating the award of contracts among the members on the basis
of day's work. I am, therefore, of opinion that the association is
not a partnership, and that it cannot be wound up on that theory."
In this general connection see, also, subdivision XIII, e.
4. Status of Subpartners with Respect to the Main Partnership. —
The fact that one is a subpartner — that is, a person who has an agree-
ment with a member of a partnership to share with such member
his proportion of the partnership — does not make him a member
of the partnership: Morrison v. Dickey, 122 Ga. 353, 50 S. E. 175,
69 L. R. A. 87; Meyer v. Krohn, 114 111. 574, 2 N. E. 495; Reynolds
v. Hicks, 19 Ind. 113; Boimare v. St. Geme, 113 La. 898, 37 South.
869; Fitch v. Harrington, 13 Gray, 468, 74 Am. Dec. 641; Reilly v.
Reilly, 14 Mo. App. 62; Murray v. Bogert, 14 Johns. 318, 7 Am. Dec.
466; Burnett v. Snyder, 81 N. Y. 550, 37 Am. Rep. 527; Nirdlinger
V. Bernheimer, 133 N. Y. 45, 30 X. E. 561; Newland v. Tate, 3 Ired.
May, 1906.] Brotherton v. Gilchrist. 431
Eq. 226; Setzer v. Beale, 19 W. Va. 274; Eiedeburg v. Schmidt, 71
Wis. 644, 38 N. W. 336.
b. Necessity for Participation in Both Profits and Losses — The
status of persons associated together in some business with respect
to the profits or losses of that business, is an important question in
determining whether they are partners or not. The rule with respect
to the necessity for a person to have a community of interest in the
profits of the business is differently stated by different courts. We
believe that the importance of the rule respecting the necessity of a
person to have a community of interest in the profits as a test of
partnership is really founded upon the notion that such a community
of interest is the highest form of evidence that the person so en-
titled is a principal in the business which produces the profits. The
conflicting cases on the subject of what constitutes a community of
interest in the profits do not indicate anything more than that it is
always a difficult thing to prove whether one is a principal or agent
in any transaction.
Perhaps the more generally approved statement of the rule in
respect to the necessity of common ownership of the profits is that per-
sons are partners where it is their intention to carry on a business
and share the profits as common owners or joint proprietors of the
business: McCrary v. Slaughter, 58 Ala. 230; McGill v. Dowdle, 33
Ark. 311; Wheeler v. Farmer, 38 Gal. 203; Hodgson v. Fowler, 24
Colo. 278, 50 Pac. 1034; Norwalk v. Ireland, 68 Conn. 1, 35 Atl. 804;
Ellison V. Stuart, 2 Penne. 179, 43 Atl. 836; Webster v. Clark, 34
Fla. 637, 43 Am. St. Rep. 217, 16 South. 601, 27 L. R. A. 126; Stubbs
V. Fleming, 92 Ga. 354, 17 S. E. 935; State Nat. Bank v. Butler, 149
111. 575, 36 N. E. 1000; Bradley v. Ely, 24 Ind. App. 2, 79 Am. St.
Eep. 251, 56 N. E. 44; Price v. Alexander, 2 G. Greene, 427, 52 Am.
Dec. 526; Heard v. Wilder, 81 Iowa, 421, 46 N. W. 1075; Jones v.
Davies, 60 Kan. 309, 72 Am. St. Eep. 354, 56 Pac. 484; Tanner v.
Hughes (Ky.), 50 S. W. 1099; Woodward v. Cowing, 41 Me. 9, 66
Am. Dec. 211; Staples v. Sprague, 75 Me. 458; Thillman v. Benton,
82 Md. 64, 33 Atl. 485; Dwight v. Brewster, 1 Pick. 50, 11 Am. Dec.
133; Dutcher v. Buck, 96 Mich. 160, 55 N. W. 676, 20 L. E. A. 776;
Bohrer v. Drake, 33 Minn. 408, 23 N. W. 840; Herbert v. Callahan,
35 Mo. App. 498; Morrison v. Bennett, 20 Mont. 560, 52 Pac. 553, 40
L. E. A. 158; Gates v. Johnson, 56 Neb. 808, 77 N. W. 407; Eastman
V. Clark, 53 N. H. 276, 16 Am. Rep. 192; Robbins v. McKnight, 5
N. J. Eq. 642, 45 Am. Dec. 406; Willey v. Renncr, 8 N. Mcx. 641, 45
Pac. 1132; McGovern v. Robertson, 116 N. Y. 61, 22 N. E. 398, 5
L. E. A. 799; Southern Fertilizer Co. v. Reams, 105 N. C. 283, 11
8. E. 467; Braithwaite v. Aiken, 1 N. Dak. 475, 48 N. W. 361; Flower
V. Barnekoff, 20 Or, 132, 25 Pac. 370, 11 L. E. A. 149; W^alker v.
Tuppcr, 152 Pa. 1, 25 Atl. 172; Jones v. McMichael, 12 Eich. 176;
Spencer v. Jones (Tex. Civ. App.), 47 S. W. 29; Owen v. Oviatt, 4
432 American State Reports, Vol. 115. [Michigan,
Utah, 95, 6 Pac. 527; Cook v. Carpenter, 34 Vt. 121, 80 Am. Dec.
670; Commercial Bank v. Miller, 96 Va. 357, 31 S. E. 812; Chapline
V. Conant, 3 W. Va. 507, 100 Am. Dec. 766; Lathrop v. Knapp, 27
Wis. 214; Meehan v. Valentine, 145 U. S, 611, 12 Sup. Ct. Eep. 972,
36 L. ed. 835.
Or, stated in other words, where the right of a party to share the
profits of a business is not based on his common ownership of such
profits, but merely as a personal debt due from his associates in the
business, such party is not a partner in the business: Ellsworth v.
Tartt, 26 Ala. 733, 62 Am. Dec. 749; Vanderhurst v. De Witt, 95
Cal. 57, 30 Pac. 94, 20 L. E. A. 595; Mason v. Sieglitz, 22 Colo. 320,
44 Pac. 588; Allen v. Hudson, 78 111. App. 376; Hallet v, Desban,
14 La. Ann. 529; Thillman v. Benton, 82 Md. 64, 33 Atl. 485; Marsh
V. Mueller, 96 Mich. 488, 56 N. W. 71; Fay v. Davidson, 13 Minn.
523; Bruen v. Kansas City etc. Assn., 40 Mo. App. 425; Mason v.
Hackett, 4 Nev. 420; Bobbins v. McKnight, 5 N. J. Eq. 645, 45 Am.
Dec. 406; Wormser v, Lindauer, 9 N. Mex. 23, 49 Pac. 896; Walker
V. Tupper, 152 Pa. 1, 25 Atl. 172; Stevens v. Gainesville Nat. Bank,
62 Tex. 499; Fish v. Thompson, 68 Vt. 273, 35 Atl, 174; Bowyer v.
Anderson, 2 Leigh, 550; Sodiker v. Applegate, 24 W. Va. 411, 49 Am.
Eep. 252; Cooper v. Tappan, 9 Wis. 361.
A contract of partnership is, however, like any other contract.
Consequently the powers conferred, duties enjoined and liabilities
imposed must be deduced from its terms: Coward v. Clanton, 122 Cal.
451, 55 Pac. 147. Mr. Justice Lindley in Walker v. Hirch, 27 Ch.
Div. 460, in speaking on the subject, observed: "Persons who share
profits and losses are, in my opinion, properly called partners; but
that is a mere question of words; their precise rights in any particular
case must depend upon the real nature of the agreement into which
they have entered."
This community of interest in the profits must, of course, be
mutual. By this mutuality is meant that each party has a specific
interest as principal, and this interest in the profits must be in the
profits as profits, and not merely for a stipulated portion of the prof-
its as compensation for services toward the enterprise: Bradley v.
Ely, 24 Ind. App. 2, 79 Am. St. Eep. 251, 56 N. E. 44. The exact
proportion that each party is to have of the profits need not be
shown: McMurtrie v. Guiler, 183 Mass. 451, 67 N. E. 358. But in
order for one to be a partner, he must have a property in or con-
trol over or specific lien on the undivided profits in preference to
other creditors: Clark v. Emery, 58 W. Va. 637, 52 S. E. 770, 5 L.
E. A., N. S., 503.
Participation in the profits is not conclusive evidence of part-
nership, but it is evidence of a partnership, and, in the absence of
contradictory evidence, will control: Faeily v. Nash, 70 Miss. 193,
12 South. 149. "While it may be one of the tests, it may be con-
May, 1906.] Brotherton v. Gilchrist. 433
trolled by other considerations": Beard v. Kowland, 71 Kan. 873,
81 Pac. 188. But participation in the profits of a business raises a
presumption of the existence of a partnership: Tamblyn v. Scott, 111
Mo. App. 46, 85 S. W. 918. What is a partnership is a question for
the court, but whether one exists is a question of fact for the jury:
Jones V. Purnell (Del.), 62 Atl. 149.
In the recent case of Hartford Fire Ins. Co. v. McClain (Ky.), 85
S. W, 699, the court said: "Partnership is a status dependent upon
contract between two or more persons. Its distinguishing essential
elements are the contract or agreement to become partners and the
sharing of profits or losses proportionally. Its members may con-
tribute money, property, or labor, or any of them; but, unless there
is an express agreement to share profits (and impliedly, if not ex-
pressly, to bear losses) in a given proportion among the parties to
the agreement, it is not a partnership, whatever other rights the
parties have."
It is generally stated that one of the tests of a partnership is that
there must be a community of interest in the losses of the business
or enterprise in addition to a community of interest in the profits
thereof: Howze v. Patterson, 53 Ala. 205, 25 Am. Rep. 607; Gold-
smith V. Eichold, 94 Ala. 116, 33 Am. St. Rep. 97, 10 South. 80; Lee
V. Cravens, 9 Colo. App. 272, 48 Pac. 139; Jones v. Purnell (Del.),
62 Atl. 149; Wilcox v. Dodge, 12 111. App. 517; Bradley v. Ely, 24
Ind. App. 2, 79 Am. St. Rep. 251, 56 N. E. 44; Aullman v. Fuller, 53
Iowa, 60, 4 N. W. 809; Winter v. Pipher, 96 Iowa, 17, 64 N. W. 663;
Jones V. Davies, 60 Kan. 309, 72 Am. St. Rep. 354, 50 Pac. 484;
Sharpe v. McCreery (Ky.), 47 S. W. 1075; Smith v. Walker, 51 Mich.
456, 22 N. W. 267, 24 N. W. 830, 26 N. W. 783; Bohrer v. Drake,
33 Minn. 408, 23 N. W. 840; Priest v. Chouteau, 12 Mo. App. 252;
Belknap v. Wendell, 21 N. H. 175; Cornell v. Pedron, 60 N, J. Eq.
251, 47 Atl. 56; Vanderburgh v, Hull, 20 Wend. 70; Jones v. Call,
93 N. C. 170; Wheeler v. Lack, 37 Or. 238, 61 Pac. 849; Chapman v.
Lipscomb, 18 S. C. 222; Mallory v. Hanaur Oil Works, 86 Tenn. 598,
8 S. W. 396; Brigham v. Dana, 29 Vt. 1.
An agreement to share the losses may, however, be implied from
the existence of a community of interest in the profits: Ilillman v.
Eoney, 78 111. App. 412; Johnson v. Carter, 120 Iowa, 355, 94 N. W.
850; Torbert v. Jeffrey, 161 Mo. 645, 61 S. W. 823; Gates v. John-
son, 56 Neb. 808, 77 N. W. 407. The court in Johnson v. Carter,
120 Iowa, 355, 94 N. W. 850, in discussing this subject set forth what
is perhaps the prevailing rule on the subject. It said: "Of course,
the mere sharing of profits will not be construed as establishing
the partnership relation: Ruddick v. Otis, 33 Iowa, 402. But it is
an important circumstance to be taken in consideration. The ob-
ligation to share losses is an essential element to its existence:
Winter v. Pipher, 96 Iowa, 17, 64 N. W. 663. But enterprises aro
Am. St. Rep., Vol. 115—28
434 American State Reports, Vol. 115. [Michigan,
not usually undertaken with a view of loss, and the mere fapt that
provision therefor is not expressly made does not preclude the in-
ference that each partner is to bear his portion of the burdens as
well as reap his share of the benefits of the venture. 'An agreement
to share profits, nothing being said about losses, amounts prima facie
to an agreement to share losses also, for it i^ but fair that the chance
of gain and of loss should be taken by the same persons, and it
is natural to suppose that it was their intention, if they have said
nothing to the contrary; and accordingly it has been held that, unless
an intention to the contrary can be shown, persons engaged in any
business or venture, and sharing the profits to be derived from it,
are partners as regards the business or venture': 1 Lindley on Part-
nership, Ewell, 30. This principle was recognized in Richards v.
Grinnell, 63 Iowa, 44, 50 Am. Rep. 727, 18 N. W. 668, where the
court, speaking through Rothrock, J., said:
"It is not necessary, in order to constitute a partnership, that there
be an express agreement that each party shall bear a share of any
losses, which may occur in the business. This may be inferred from
other provisions of the contract, the nature of the business, and tha
relation of the parties to the business to be transacted.' In the de-
cisions of this court denying the existence of a partnership because
of there being no obligations to share the losses, the agreements
have been such as to exclude any such inference. Thus in Portex v.
Curtis, 96 Iowa, 539, 65 N. W. 824, Winter v. Pipher, 96 Iowa, 17,
64 N. W. 663, Holbrook v. Oberne, 56 Iowa, 324, 9 N. W. 291, Krause
V. Meyer, 32 Iowa, 566, McBride v. Ricketts, 98 Iowa, 539, 67 N. W.
410, and Reed v. Murphy, 2 G. Greene, 574, the contracts were those
of employment at a percentage of the profits or this with salary
added. There was no community of interest save the contingent
share of profits in payment of services rendered. Ruddick v. Otis,
33 Iowa, 402, involved merely an advance to a firm for the purchase
of wool with a stipulation that one-third of the profits realized should
be paid for its use. In Williams v. Soutter, 7 Iowa, 435, Drew ad-
vanced money to the firm of Soutter & Way to be used in the busi-
ness for one year, on condition that it be then returned with thirty
per cent interest, or, at his option, one-third of the profits after
deducting expenses. In Clark v. Barnes, 72 Iowa, 563, 34 N. W. 419,
Seig & Williams furnished Barnes & Co. money and stock to man-
ufacture wagons, upon an agreement to repay, with one-half the
profits. In the last two cases the nature of the contracts precluded
the notion that the parties advancing money were to share the losses,
and gave them no control or direct interest in the business. From
these authorities may be deduced, as established in this state, the
following" principles: 1. That the agreement only to share profits
will not constitute partnership, though evidence of existence of that
relation; 2. The sharing of losses is essential in a partnership though
May, 1906,] Brotherton v. Gilchrist. 435
the nndertaking to do so may be inferred from an agreement to
divide profits, unless precluded by the terms thereof; 3. That pay-
ment for services, or for the use of money or property to be used in
the business, may consist of a share of profits, without making of
the loaner or employe a partner. The absence of any participation
in or control of the business is generally mentioned as indicating
that a party is not a partner, and, of course, the converse must
follow. Indeed, it will be found in most of the cases where the re-
lationship is declared to exist inter se, the party held has enjoyed a
direct, rather than merely a contingent, interest in the enterprise.
The use of the term 'partnership' is not essential, and the adoption
of a firm name may be dispensed with. The facts of no two cases
are exactly alike. The only crucial test seems to be the intention
of the parties. If it appears to have been their purpose to enter into
the relation of partners, all subterfuges of either, resorted to in
order to evade liability for possible losses, while securing certainty
of the advantages to be derived from the relation, must be dis-
regarded. ' '
And where the venture or business involves the loss of time and
labor given to the project by both of the parties, and the loss of
traveling and incidental expenses by one of the parties, which he
was to offset against the ideas and data of the other party, it is
held that the sharing of the contingent profits in contemplation
amounts prima facie to an agreement to share losses: Leeds v. Town-
send, 89 111, App. 646. Likewise a partnership results from an agree-
ment to share the net profits: Torbert v. Jeffrey, 161 Mo. 6-45, 61
S. W. 823; Tunblyn v. Scott, 111 Mo. App. 46, 85 S. W. 918.
If the theory that each partner is the agent of the other partners
in the prosecution of the common business is correct, it would natur-
ally follow that each would be liable for his proportion of the losses
where the evidence shows that such an agency exists with respect
to the common business notwithstanding that no express agreement
was had in relation thereto.
The questions as to the effect of a party receiving a share of the
gross receipts or a share of the profits as compensation for services, rent
or interest in loans or advances, are really the probative effect of those
circumstances to prove or disprove that the party has or has not an
interest in the profits as a principal, and not merely as a personal
claim against the proprietors of the business or enterprise.
c. Effect Where the Sharing of Losses is Limited as to Some of
the Parties. — In the principal case it was held where two persons
comprising a partnership enter into an agreement with a third person
for participation in the business with the understanding that his
liability was to be limited by his advances, and that two original
partners should make no contracts binding him, there was no partner-
ship relation between them as to third persons: Brotherton v. Gil-
436 American State Reports, Vol. 115. [Michigan,
Christ, 144 Mich. 274, ante, p. 397, 107 N. W. 890. Likewise it has
been held that an agreement to the effect that a party putting in a
certain amount of money in the venture would, if it turned out
successful, receive one-third of the profits, and, if unsuccessful, his
share of the losses was to be measured by the amount put in, did
not constitute the parties to be partners: Gille Hardware etc. Co. v.
McCleverty, 89 Mo. App. 154; Orvis v. Curtis, 12 Misc. Eep. 434, 33
N. Y. Supp. 589.
But there is authority to the effect that as between themselves
partners may agree that some of their number shall be guaranteed
against loss: Pollard v. Stanton, 7 Ala. 761; Bobbins v. Laswell, 27
111. 365; Consolidated Bank v. State, 5 La. Ann. 44; Rowland v.
Long, 45 Md. 439; Walden v. Sherburne, 15 Johns. 409; Geddes v.
Wallace, 2 Bligh, 270.
d. Effect "Where a Party Shares Loss or Expenses Only. — An ar-
rangement between several parties whereby one is excluded from
participating in the profits of the enterprise but is to be charged
with the losses, if any, is not regarded as a partnership: Alabama
Fertilzer Co. v. Reynolds, 79 Ala. 497; Bailey v. Clark, 6 Pick. 372;
Lowry v. Brooks, 2 McCord, 421. An agreement between persona
having similar causes of action against a village, that each shall
bear equally the costs of an action which has been commenced against
the village as a test case, does not make the persons so contributing
partners toward each other: Carter v. Carter, 28 111. App. 340.
e. Effect Where Parties Share the Gross Receipts of a Business. —
Gross returns necessarily include net profits. Hence if the sharer
in net profits takes from the creditors the fund upon which they rely
for payment, so also does the sharer in gross returns: Eastman v.
Clark, 53 N. H. 276, 16 Am. Rep. 192. The important test in de-
termining whether the sharer in the gross receipts is a partner or
not is to ascertain whether he has a right to be heard in the con-
trol or disposition of the affairs of the business. Thus where one
party owned a sawmill and the other agreed to furnish him logs
free of cost except payment for cutting the stocks, and upon sale
of the lumber the proceeds were to be divided after deduction of
the expenses of hauling the lumber to the cars, freight and expenses
of sale, it was held to constitute no partnership inter se: Nelms
V. McGraw, 93 Ala. 245, 9 South. 719. And where a person works
for one owning a mill for one-half of the gross earnings, he is no
partner: Ambler v. Bradley, 6 Vt. 119. An agreement on the part
of one to sail and manage a sloop to be used for freighting, bear all
expenses connected therewith, and keep the vessel in repair, does
not constitute him a partner with the owner, even though he was
to pay him one-half of the gross receipts: Tobias v. Blin, 21 Vt. 514.
Likewise pooling arrangements with respect to fares or freights
earned by several carriers are not regarded as partnership: Wiggins
May, 1906.] Brotherton v. Gilchrist. 437
Perry Co. v. Chicago etc. E. Co., 128 Mo. 224, 27 S. W. 568, 30 S. W.
430; Pattison v. Blanchard, 5 N. Y. 186. But an agreement that each
of two persons shall furnish a horse, one of the persons to do all the
work, the other to pay all expenses, the two, however, to divide
the earnings equally, constitutes a partnership: Gilbank v. Stephen-
son, 31 Wis. 592. In this general connection see, also, the following
subdivision and XIII, a, 3.
f. Effect Where Parties Share Crops, Cattle and Their Increase
Instead of Money. — As a general rule, persons who cultivate land
for the owner or rent it on shares for a share of the crops raised
are not partners with the owner of the land: Courts v. Happle, 49
Ala. 254; Taylor v. Bush, 75 Ala. 432; Christian v. Crocker, 25 Ark.
327, 99 Am. Dec. 223; Holloway v. Brinkley, 42 Ga. 226; Blue v.
Leathers, 15 111. 31; Front v. Hardin, 56 Ind. 161, 26 Am. Eep. 18;
Rose V. Busher, 80 Md. 225, 30 Atl. 637; McLaurin v. McColl, 3
Strob. 21; State v. Saunders, 52 S. C. 580, 30 S. E. 616; Mann v.
Taylor, 5 Heisk. 267; Albee v. Fairbanks, 10 Vt. 314. In Shrum v.
Simpson, 155 Ind. 160, 57 N. E. 708, 49 L. E. A. 792, the court in
speaking on this subject said: "There are obvious reasons for hold-
ing that farm contracts or agricultural agreements, by which the
owner of lands contracts with another that such lands shall be oc-
cupied and cultivated by the latter, each party furnishing a certain
proportion of the seed, implements and stock, and that the products
shall be divided at the end of a given term, or sold, and the pro-
ceeds divided, shall not be construed as creating a partnership be-
tween the parties. Such agreements are common in this country,
are usually very informal in their character, often resting in parol as
in the present case. In the absence of stipulations or evidence
clearly manifesting a contrary purpose, it will not be presumed that
the parties to such an agreement intend to assume the important and
intricate responsibilities of partners, or to incur the inconveniences
and dangers frequently incident to that relation. The parties to
such agreements seldom contemplate more than a tenancy of the
land, with provision for compensation to the landlord from the
fidelity, labor, and skill of the teuant. There is no community of
interest in the land, which is the principal thing in the agreement,
and a division and several ownership of the crops and other products
are usually provided for. While the custom of renting farm lands
Upon shares is general, the courts have seldom hold that such agree-
ments create partnerships between the owner of the land and the
tenant. A large majority of the cases construe them as creating
tenancies only: Chase v. Barrett, 4 Paige, 148; Quackenbush v.
Sawyer, 54 Cal. 439; Chapman v. Eames, 67 Me. 452; Warner v.
\bbey, 112 Mass. 355; Dixon v. Niccolls, 39 111. 372, 89 Am. Dec. 312;
Alwood v. Rucknian, 21 111. 200; Putnam v. Wise, 1 Hill, 234, 37
Am. Dec. 309. The agreement in question relates exclusively to the
438 American State Reports, Vol. 115. [Michigan,
dealings of the parties with each other, and not with third persons.
It distinctly separates their rights in the use and occupation of the
land and in the ownership of its products. Such products and live-
stock were to be divided in specie, except that, where a division of
the livestock could not be agfreed upon, it was to be sold, and the
amount received therefor divided. No debts were to be contracted
by either party for which the other would be liable. Under this
agreement the authority of the appellee to make sales of the live-
stock was that of an agent, and not that of a partner. Upon a
fair construction of the agreement, it is evident that the appellee
was the tenant and agent of the decedent, and in no sense a part-
ner."
But the joint cultivation of land under an agreement to divide
the profits is regarded as a partnership: Allen v. Davis, 13 Ark.
28; Urquhart v. Powell, 54 Ga. 29; Plummer v. Trost, 81 Mo. 425;
Reynolds v. Pool, 84 N. C, 37, 37 Am. Rep. 607; Brown's Exr. v.
Higginbotham, 5 Leigh, 583, 27 Am. Dec. 618.
The cropping contract in Cedarberg v. Guernsey, 12 S. Dak. 77,
80 N. W. 159, was perhaps as comprehensive a contract as generally
prevails in such arrangements. In that case the owner of a farm
contracted with one Swan Person to cultivate his farm for five
years. Person was to furnish at his own expense all help, tools,
teams and farming machinery, and to pay one-half the taxes. The
title and possession of all crops and all stock placed or produced on
the farm, except the horses of Person, were to be and remain in the
owner of the land until sold and the proceeds divided. All stock
furnished by the owner was to be appraised, and on the termina-
tion of the contract he was to be allowed to select stock of an
equal value, but the balance of the stock was to be sold and divided.
The owner of the land was to have a lien on the crops and increase
of the livestock for all advances made by him for feed, seed, etc.,
and all sales of produce had to be accounted for and sold only under
the direction of the owner of the land. The contract could be ter-
minated by thirty days' notice prior to the Ist of October of any
year. The court, in holding the contract not one of partnership,
said: "It is true that the term 'division of profits' is used in one
or two instances in the contract, but the term seems to be there
used in the sense of division of proceeds after certain deductions
are made. In the case at bar, Guernsey [the owner of the land] and
Person were not agents of each other. Guernsey had no right, under
the contract, to employ laborers on the farm. Neither could Person
employ laborers upon the farm at the expense of Guernsey, as he
had contracted to furnish all necessary labor at his own expense.
Person had no right, as we have seen, to dispose of the products
of the farm, except under the direction of Guernsey. Guernsey
had a special lien upon all the interests of Person in the farm for
May, 1906.] Brotherton v. Gilchrist. 439
any advances he might make for feed, seed, etc. In short, the
contract was a purely cropping one and not a partnership con-
tract: Bowers v. Graves & Vinton Co., 8 S. Dak. 385, 66 N. W. 931.
All cropping contracts have, to a certain extent, the elements of di-
vision of profits, but such contracts are rarely held to be part-
nership contracts. They lack two of the essential elements of a part-
nership, namely, that the parties are mutually principals of and
agents for each other, and that the business is carried on on
joint account: Grigsby v. Day, 9 S. Dak. 585, 70 N. W. 881. The
intention, also, of the parties must, to a great extent, control in de-
termining whether their contract is one of partnership or not. It
is quite clear in this case that it was not the intent of either of the
parties to enter into a partnership contract. Certainly Guernsey,
the owner of the land, and a nonresident of this state, could not
have intended to enter into a partnership with Person under which
he would be bound for all contracts entered into by Person relative
to the farm. The respondent contends — and this was evidently the
theory of the learned county court — that, under the contract in
this case, Guernsey and Person were to conduct their operations
at their joint and equal expense, and the net proceeds should be
divided between them; but such, in our view, was not the nature
of the contract. As will have been noticed. Person was to furnish
feed and seed for the first year at his own expense, and all the
labor during the term of the contract. It is true that Guernsey
was to advance the feed for the first year, but he did so only as a
loan to Person, and Person agreed to repay the same out of his
portion of the crop at the end of the first year. The appraisement
of the stock provided for was not for the purpose of making the
•stock partnership assets, but to enable Guernsey to withdraw stock
of the same value at the end of the term or when the contract
should be terminated."
And where persons agree with the owner of cattle to herd his
cattle for a certain period, and then return the original number
and divide the increase,' or pay an agreed valuation upon the
original number in the herd and divide the excess in valuation,
the arrangement is not a partnership: Robinson v. Haas, 40 Cal.
474; Concannon v. Rose, 9 Kan. App. 791, 59 Pac. 729; Ashby v.
Shaw, 82 Mo. 76; Beck with v. Talbot, 95 U. S. 289, 24 L. ed. 296.
g. Effect Where Share of Profits is Allowed as Compensation
for Services in Whole or in Part.— The mere fact that a person is to
receive a share of the profits of a business or venture as compensa-
tion for his services in the business or enterprise does not make him
a partner therein: Moore v. Smith, 19 Ala. 774; Zuber v. Roberts
(Ala.), 40 South. 319; Olmstead v. Hill, 2 Ark. 346; Gardcnhire v.
Smith, 39 Ark. 280; Dawson Nat. Bank v. Ward, 120 Ga. 861,
48 8. E. 313; Mayfield v. Turner, 180 111. 332, 54 N. E. 418; Smythe's
440 American State Reports, Vol. 115. [Michigan,
Estate V. Evan.s, 209 Til. 376, 70 N. E. 906; Price v. Alexander, 2 Q.
Greene, 427, 52 Am. Dec. 526; Johnson v. Carter, 120 Iowa, 355,' 94
N. W. 850; Fuqua v, Massie, 95 Ky. 387, 25 S. W. 875; Cline v.
Caldwell, 4 La. 137; McWilliama v. Elder, 52 La. 995, 27 South.
352; Holden v. French, 68 Me. 241; Sangston v. Hack, 52 Md. 173;
Blanchard v. Coolidge, 22 Pick. 151; Harris v. Thriefoot (Miss.), 12
South. 335; Aetna Ins. Co. v. Bank of Wilcox, 48 Neb. 544, 67
N. W. 449; Agnew v. Montgomery (Neb.), 99 N. W. 820; Whitney
V. Gretna State Bank, 50 Neb, 438, 69 N. W. 933; Atherton v.
Tilton, 44 N. H. 452; Hargrave v. Conroy, 19 N. J. Eq. 281; Lewis
V. Greider, 49 Barb. 606; Grafel v. Hodges, 112 N. Y. 419, 20 N. E.
542; Smith v. Dunn, 44 Misc. Rep. 288, 89 N, Y. Supp. 881; Lance
V. Butler, 135 N. C. 419, 47 S. E. 488; Ryder v. Jacobs, 182 Pa. 624,
38 Atl. 471; Potter v. Moses, 1 R. I. 430; State v. Hunt, 25 R. I. 69,
54 Atl. 737; Mann v. Taylor, 5 Heisk. 267; Southworth v. Thompson,
10 Heisk. 10; Heidenheimer's Exrs. v. Walthew, 2 Tex. Civ. 501, 21
8. W. 981; Altgelt v. Alamo Nat. Bank, 98 Tex. 252, 83 S. W. 6;
Morgan v. Stearns, 41 Vt. 398; Wilkinson v. Jett, 7 Leigh, 115, 30
Am. Dec. 493; Sodiker v. Applegate, 24 W. Va. 411, 49 Am. Rep.
252; La Flex v. Burss, 77 Wis. 538, 46 N. W. 801; Sohns v. Sloteman,
85 Wis. 113, 55 N. W. 158; Hambly v. Bancroft, 83 Fed. 444; Gentry
V. Singleton, 128 Fed. 679, 63 C. C. A. 231.
And, likewise, where a person receives compensation for his ser-
vices partly in money and partly in a share of the profits, the fact
of receiving a portion of his salary in profits does not make the
party a partner: Porter v. Curtis, 96 Iowa, 539, 65 N. W. 824;
St. Victor V. Danbert, 9 La. 314, 29 Am. Dec. 447; Stockman v.
Michell, 109 Mich. 348, 67 N. W. 336; Morrow v. Murphy, 120 Mich.
204, 79 N. W. 193, 80 N. W. 255; Breman Sav. Bank v. Branch-
Crookes Saw Co., 104 Mo. 425, 16 S. W. 209; Glove v. Dawson, 106
Mo. App. 107, 80 S. W. 55; Nutting v. Colt, 7 N, J. Eq. 539; Cornell
V. Redrow, 60 N. J. Eq. 251, 47 Atl. 56; Miller v. Bartlet, 15 Serg.
& R. 137.
The same rules are applicable even as against third persons,
where there has been no holding out by the employe as a partner:
Hodges V. Dawes, 6 Ala. 215; Loomis v. Marshall, 12 Conn. 69,
30 Am. Dec. 596; Burton v. Goodspeed, 69 111. 237; Macy v. Combs,
15 Ind. 469, 77 Am. Dec. 103; Shepard v. Pratt, 16 Kan. 209;
Chaflfraix v. Lafitte, 30 La. Ann. 631; Bradley v. White, 10 Met.
303, 43 Am. Dec. 435; Hall v. Edson, 40 Mich. 651; Wiggins v,
Graham, 51 Mo. 17; Voorhees v. Jones, 29 N. J. L. 270; Fitch v. Hall,
25 Barb. 13; Edwards v. Tracy, 62 Pa. 374; Polk v. Buchanan, 5
Sneed, 721; Goode v. McCartney, 10 Tex. 193; Bowman v. Bailey,
10 Vt, 170.
It is, however, difficult to ascertain whether the interest of one
obtaining a part of the profits in lieu of salary is in fact an em-
May, 1906.] Brotherton v. Gilchrist. 441
ploy^, or whether the transaction is a device to evade the responsi-
bility of a partner, and the decisions in such cases are quite numerous
and conflicting. Each case must be decided with a view to the par-
ticular circumstances in the case.
h. Effect Where Shaxe of Profits is Allowed in Repayment of
Capital Advanced. — "Where one party- contributes the capital and
the other the labor, skill or experience for carrying on a joint
enterprise, such a combination constitutes a partnership, unless some-
thing appears to indicate the absence of a joint ownership of the
business and profits: 17 Am. & Eng. Ency. of Law, pp. 842, 843.
Such absence of joint ownership is indicated when from the whole
contract it appears that the party contributing his services is to
receive a share of the profits merely as compensation for his
services, as illustrated in some of the cases cited. But it does
not appear from the fact that one part of the business is to be con-
ducted by one of the parties and the other part by the other party,
nor by the fact that the capital is to be returned to the partner
putting it in before the profits are shared. These are but the
ordinary incidents of a partnership": Torbert v. Jeffrey, 161 Mo.
645, 61 S. W. 823.
i. Effect Where Share of Profits is Allowed as Interest on Loans
or Advances. — The fact that one who loans money to a person in
business or about to engage in business is to receive a share of
the profits of the business as interest on his loan or advance does
Dot make him a partner of the other transaction in a bona fide loan
and not a mere device to avoid the liability of a partner: Smith's
Exr. V. Garth, 32 Ala. 368; Culley v. Edwards, 44 Ark. 423, 51
Am. Rep. 614; Haycock v. Williams, 54 Ark. 384, 16 S. W. 3;
Evans v. De Lay, 81 Cal. 103, 22 Pac. 408; Cadenasso v. Antonelle,
127 Cal. 382, 59 Pac. 765; Butler v. Hinckley, 17 Colo. 523, 30
Pac. 250; Loomis v. Marshall, 12 Conn. 79, 30 Am. Dec. 596;
Plunkett V. Dillon, 4 Del. Ch. 198; Ellison v. Stuart, 2 Penne. 179,
43 Atl. 836; Dubos v. Jones, 34 Fla. 539, 16 South. 392; Buekner
▼. Lee, 8 Ga. 285; Smith v. Knight, 71 III. 148, 22 Am. Eep. 94;
Clark v. Barnes, 72 Iowa, 563, 34 N. W. 419; Johnson v. Carter, 120
Iowa, 355, 94 N. W. 850; Tate v. Crooks, 64 Kan. 887, 68 Pac.
74; Greend v. Kummel, 41 La. Ann. 65, 5 South. 555; Thiihnan v.
Benton, 82 Md. 64, 33 Atl. 485; Gallop v. Newman, 7 Pick. 282;
Haskins v. Warren, 115 Mass. 514; Hazell v. Clark, 89 Mo. App.
78; Ryan v. Riddle, 109 Mo. App. 115, 82 S. W. 1117; Hunter v.
Conrad, 18 Mont. 177, 44 Pac. 523; Waggoner v. Crcighton etc.
Bank, 43 Neb. 84, 61 N. W. 112; Eastman v. Clark, 53 N. H. 276,
16 Am. Rep. 192; Sheridan v. Medara, 10 N. J. Eq. 477, 64 Am,
Dec. 464; Clayton v. Davett (N. J. Eq.), 38 Atl. 308; Jornee v. Simon-
son, 58 N. J. Eq. 282, 43 Atl. 370; Hackott v. Stanley, 115 N. Y.
625, 22 N, E. 745; Richardson v. Ilughitt, 76 N. Y. 55, 32 Am. Rep.
442 American State Reports, Vol. 115, [Michigan,
267; Wisotzkey v. Niagara Fire Ins. Co., 112 App. Div. 599, 98 N. Y.
Supp. 760; Waverly Nat. Bank v. Hall, 150 Pa. 466, 30 Am. St. Rep.
823, 24 Atl. 665; Boston etc. Smelting Co. v. Smith, 13 R. L 427,
43 Am. Rep. 3; Polk v. Buchanan, 5 Sneed, 721. A contra rule,
however, obtains in Texas; Cothran v. Marmaduke, 60 Tex. 370;
Dilley v. Abright, 19 Tex. Civ. 487, 48 S. W. 548; Fouke v. Brengle
(Tex. Civ. App.), 51 S. W. 519. In Pennsylvania there is a statute
to the effect that such loans do not make the lender a partner:
Jordan v. Patrick, 207 Pa. 245, 56 Atl. 538.
J. Effect Where Share of Profits is Allowed as Bent. — The mere
fact that one receives a portion of the profits of a business as rent
for premises used in the business does not make him a partner
in the business: McDonnell v. Battle House Co., 67 Ala. 90, 42 Am.
Rep. 99; PuUiam v. Schimpf, 100 Ala. 362, 14 South. 488; Romero
v. Dalton, 2 Ariz. 210, 11 Pac. 863; Quackenbush v. Sawyer, 54 Cal.
439; Nof singer v. Goldman, 122 Cal. 609, 55 Pac. 429; Morgan v.
Farrell, 58 Conn. 413, 18 Am. St. Rep. 282, 20 Atl. 614; Webster v.
Clark, 34 Fla. 637, 43 Am. St. Rep. 217, 16 South. 601, 27 L. R. A.
126; Gurr v. Martin, 73 Ga. 528; Parker v. Fergus, 43 111. 437; Keiser
v. State, 58 Ind. 379; Bradley v. Ely, 24 Ind. App. 2, 79 Am. St.
Rep. 251, 56 N. E. 44; Reed v. Murphy, 2 G. Greene, 574; Fuqua v.
Massie, 95 Ky. 387, 25 S. W. 875; Bridges v, Sprague, 57 Me. 543,
99 Am. Dec. 788; Chapman v. Fames, 67 Me. 452; La Mont v.
Fullum, 133 Mass. 583; Beecher v. Bush, 45 Mich. 188, 40 Am. Rep.
465, 7 N. W. 785; Thayer v. Augustine, 55 Mich. 187, 54 Am. Rep.
361, 20 N. W. 898; A. N. Kellogg Newspaper Co. v. Farrell, 88
Mo. 594; Garrett v. Republican Pub. Co., 61 Neb. 541, 85 N. W. 537;
Austin V. Neill, 62 N. J. L. 462, 41 Atl. 834; Wormser v. Lindauer,
9 N. Mcx. 23, 49 Pac. 896; Heimstreet v. Howland, 5 Denio, 68; John-
son V. Miller, 16 Ohio, 431; Hanthorn v. Quinn, 42 Or, 1, 69 Pac.
817; Pierson v. Steinmyer, 4 Rich. 309; England v. England, 60 Tenn.
108; Tobias v. Blin, 21 Vt. 544; Robinson v. Allen, 85 Va. 726, 8
S. E. 835; Z. C. Miles Co. v. Gordon, 8 Wash. 442, 36 Pac. 265.
XIV. Partnership by Estoppel.
In order that persons be liable as partners to third persons, it
is not necessary that they be strictly partners inter se: Dougherty
V. Heckard, 189 111. 239, 59 N. E. 569. One may estop himself from
denying his liability as a partner where such a relation does not
exist in fact by holding himself out as such or by negligently per-
mitting another person to do so: Jowers v. Phelps, 33 Ark. 465;
Ellison V. Stuart, 2 Penne. (Del.) 179, 43 Atl. 836; Barnett Line of
Steamers v. Blackman, 53 Ga. 98; Reynolds v. Radke, 112 111. App.
575; Strecker v. Conn, 90 Ind, 469; Sherrod v, Langdon, 21 Iowa,
518; Rider v, Hammell, 63 Kan. 733, 66 Pac. 1026; Green v. Taylor,
98 Ky. 330, 56 Am. St. Rep, 375, 32 S. W. 945; Griefif v, Boudous-
May, 1906.] Leahy v. Wayne Circuit Judge. 443
quie, 18 La. Ann. 631, 89 Am. Dec. 698; Rice v. Barrett, 116 Mass.
312; Bissell v. Warde, 129 Mo. 439, 31 S. W. 928; Sargent v. Collins,
3 Nev. 260; Vibbard v. Roderick, 51 Barb. 616; Shafer v. Ran-
dolph, 99 Pa. 250; Grabenheimer v. Rindskoflf, 64 Tex. 49; Cottrill
V. Vanduzen, 22 Vt. 51L
LEAHY V. WAYNE CIRCUIT JUDGE.
[144 Mich. 304, 107 N. W. 1060.]
JUDGMENT BY DEFAULT, What is not. — A judgment en-
tered after the defendant has answered, upon an issue of fact, though
there is no appearance by him at the trial and no evidence offered
on his part, is not a judgment by default. A judgment by default is
ane where the previous default of the defendant renders unnecessary
any evidence on the part of the plaintiff, (p. 445.)
Mandamus to compel the court to vacate an order denying;
a motion to correct journal entry. The writ was denied, and
the applicant appealed.
Nichols & Durfee and James G. McHenry, for the relators.
James Swan, for the respondent.
»>* MONTGOMERY, J. The relators were defendants in
an action of ejectment instituted in the Wayne circuit court.
The plaintiff was Julia B. Warren. On the fifth day of Feb-
ruary, 1905, the default of defendants in the action (rela-
tors) was entered. On the 25th of February, 1905, this de-
fault was, on motion of defendants, set aside on condition
that a plea be entered forthwith, and the cause stand for trial
at plaintiff's election. The case was thereupon a.ssi^ed to
Judge Rohnert's division for trial and regularly reached on
said twenty-fifth day of February. A jury was impaneled,
and testimony taken on behalf of the plaintiff. A verdict was
rendered for the plaintiff. No one appeared before Judge
Rohnert on defendants' behalf. Four days later judgment
was entered on the verdict. The form of journal entry of the
proceedings of the 25th of February •****'^ was that employed
in ordinary trials, and shows that l)oth parties were in court
by their respective attorneys. On March 1, 1905, defendants
entered a motion reading as follows: "Now come said defend-
ants pursuant to the statute, and having paid the clerk of said
444 American State Reports, Vol. 115. [Michigan,
court all the costs and damages recovered by said plaintiff
by the judgment rendered in said cause on the twenty-fifth
day of February, A. D. 1905, make application for an order
vacating said judgment and granting a new trial of said
cause. ' '
The motion was promptly granted. Another trial was had
resulting in verdict and judgment for the plaintiff. There-
upon the defendants (relators) moved the court to correct
the journal entry of February 25, 1905, so as to make the same
show that defendants did not appear on the trial. This mo-
tion was denied, and the relators ask for mandamus directing
the correction of the journal entry.
As the first judgment is no longer in force, it is obvious that
it would be an idle proceeding to change its form unless the
defendants' rights would appear to be greater if the fact of
their nonappearance was shown. This was evidently the view
of the circuit judge, and he was also of the opinion that the
recital in the journal entry did no harm to defendants. It is
not claimed by defendants that the judgment was not prop-
erly taken ; that is to say, there is no showing that plaintiff
proceeded irregularly ; but the contention is that if the record
were made to show that defendants did not appear the judg-
ment would in legal effect be a judgment by default. It is
further insisted that as a result of this the defendants would
be entitled to treat the judgment entered on the trial of the
case after the vacation of the judgment of March 1st as the
first judgment in the case and subject to vacation on motion
on terms under section 10,981 of 3 Compiled Laws. At least
we gather that this is the ultimate end aimed at, although in
relators' brief their position is stated as follows: ^**" "The
verdict rendered in said cause on February 25, 1905, and the
judgment rendered thereon having been taken by default, rela-
tors are entitled to have the record therein corrected to cor-
respond with the facts so as to enable them to make applica-
tion to have said judgment set aside under the section of the
statute providing for the vacating of default judgments":
3 Comp. Laws, sec. 10,982.
This section provides that a judgment in ejectment ren-
dered bj' default shall be conclusive after three years; but
tliat within five years after the rendering of such judgment
on application of defendant, his heirs, executors, adminis-
trators or assigns, the court may vacate such judgment and
May, 1906.] Leahy v. Wayne Circuit Judge. 445
grant a new trial if such court is satisfied that justice will be
thereby promoted and the rights of the parties more satis-
factorily ascertained and established.
It is manifest that defendants did not, by their motion of
March 1, 1905, proceed under this section, as no showing was
made or attempted that justice would be promoted by a new
trial of the cause. On the contrary, with full knowledge of
the facts, defendants saw fit to apply for a new trial, assum-
ing that they were entitled to it as a matter of right which
they only were if section 10,981 controlled. Having elected
to so treat this judgment, it would be an extraordinary pro-
ceeding to vacate the order vacating the judgment to enable
defendants to attribute to the judgment a different character,
and move to set it aside on a new and different showing, and
this after the order vacating the judgment had been acted
upon, and a new trial had. It is probably not deemed essen-
tial by defendants' counsel that a new order of vacation
should be made. It is doubtless conceived that if the judg-
ment of February 25th is made to take the form of a judg-
ment by default, it would result that the motion for a new
trial would be treated as made under section 10,982, and not
under section 10,981. We do not think this would follow.
The defendants have, by their action in making their motion
and taking a new trial thereunder, elected as definitely as it
were possible to do to treat this judgment as a judgment
^^"^ on trial. We are of the opinion that in so treating this
judgment they made no mistake. An issue of fact was joined
between the parties, the case was regularly set and called for
trial. We do not understand that a judgment by default,
properly speaking, is entered in such circumstances. It is
incumbent upon the plaintiff in such a case to make proof of
his title. Such was the practice pursued in this case. Judg-
ment was not pronounced upon defendants' default, but upon
the case made by plaintiff's proofs. The term "default" has
often been loosely used. In its strict sense, however, a judg-
ment by default is rendered when the previous default of de-
fendant has obviated the necessity of proof. A construction
of section 10,982, which would admit of a defendant absent-
ing himself from the trial and by so doing extend his time
for moving for a new trial two years beyond the limit fixed
by section 10,981, on the plea that a judgment in such case
is a judgment by default, should not be adopted unless de-
446 American State Reports, Vol. 115. [Michigan,
manded by the language employed. We do not think it is
required. In Anderson's Law Dictionary'-, title "Default,"
it is said: "When a defendant omits to plead within the time
allowed for that purpose or fails to appear at the trial he
'makes default' and the judgment entered in the former case
is a judgment by default." The same statement is found in
Burrill.
It is true, as contended by relators' counsel, that a default
may occur after appearance. The default may consist in
failing to plead. But judgment by default cannot be taken
after issue joined.
In Strine v. Kaufman, 12 Neb. 423, 11 N. W. 867, a statute
which gave the right to a defendant to have a judgment ren-
dered against him in his absence set aside on certain terms
was construed. It was held, first, that absence meant the same
thing as default, and, second, that a defendant who had ap-
peared and answered was not in default within the meaning
of the statute. It will be seen that the case goes much further
than we do in holding that judgment by default ^*** means
a judgment on default for want of appearance or plea.
The supreme court of Kansas, in Covart v. Haskins, 39 Kan.
571, 18 Pac. 522, decline to accept the reasoning by which
the Nebraska court reaches the conclusion that absence means
the same thing as a failure to appear at any time, but also
holds that default signifies that there has not been an appear-
ance (answer) at any stage: See, also. Page v. Sutton, 29
Ark. 304; Carlon's Admr. v. Ruffner, 12 W. Va. 297. Cases
which rest upon the peculiar phraseology of statutes differing
essentially from ours cannot control. The relators have lojt
no substantial right by the action of the circuit judge.
The writ is denied.
Carpenter, C. J., and Ostrander, Hooker and Moore, JJ.,
concurred.
A Judgment hy Default can be taken only when it appears that the
defendant has been duly served with summons, and has failed to an-
swer the complaint: "White v. Johnson, 27 Or. 282, 50 Am. St. Bep.
726.
June, 1906.] Finch v. Haynes. 447
FINCH V. HAYNES.
[144 Mich. 352, 107 N. W. 910.]
CONVEYANCE, Construction of. — A conveyance granting land
to two parties and the survivor of them, and to their heirs and as-
signs, does not make the grantees joint tenants of the fee, but does
make them joint tenants for life, with a remainder to the survivor in
fee, and a conversance by one of the grantees does not convert the
estate into a tenancy in common, or have any effect against the
other grantee after the death of the one executing the conveyance.
(p. 449.)
Willis Baldwin and John J. Kiley, for the complainant.
Clark, Jones & Bryant, for the defendant.
^'^^ McALVAY, J. Complainant and Nellie Haynes, her
sister, on July 6, 1899, acquired title to lot 62 in the village of
Dundee, in Monroe county, from Joseph S. Dickerson and
wife, the material provisions of which were as follows :
^'^ ' ' This indenture, made the 6th day of July in the year
of our Lord one thousand eight hundred and ninety-nine,
between Joseph S. Dickerson and Ella T. Dickerson, his wife,
both of the village of Dundee, county of Monroe, and State
of Michigan, of the first part, and Nellie Haynes, of the same
place, and Cora Finch, of the city of Lansing, Ingham county,
and State of Michigan, and the survivor of them, of the sec-
ond part,
*'\\'itnesseth, That the said party of the first part, for and
in consideration of the sum of one dollar, love, and affection
and other considerations to them in hand paid by the said
parties of the second part, the receipt whereof is hereby con-
fessed and acknowledged, do by these presents, grant, bargain,
sell, remise, release, and forever quitclaim unto said parties
of the second part and the survivor of them, and to their heirs
and assigns, forever, all that certain piece or parcel of land,
situated in the village of Dundee in Monroe county, and State
of Michigan, known and described as follows: ....
"Together with all and singular the hereditaments and ap-
purtenances thereunto belonging or in anywise appertaining.
To have and to hold the same premises as above described to
the parties of the second part and the survivor of them, and
to their heirs and assigns, to the sole and only proper use,
benefit, and behoof of the parties of the second part, and the
survivor of them, and their heirs and assigns, forever."
448 American State Keports, Vol, 115. [Michigan,
On April 9, 1904, Nellie Haynes quitclaimed to defendant,
her husband, all her right, title, and interest in said prem-
ises, described as an undivided one-half. She died May 16,
1905. Durins: her lifetime defendant acted as agent of these
two sisters in renting this property and collecting the rents
for them. After the death of his wife, defendant placed his
quitclaim deed on record May 22, 1905, and thereafter claimed
to be a tenant in common with complainant in said premises,
owning an undivided one-half thereof, and entitled to one-half
of the rents.
Complainant filed her bill in the circuit court for Monroe
county, in chancery, setting forth the above facts, claiming as
survivor to be sole and absolute owner in fee ^''*'* of said
premises, and praying that she be decreed to be such owner,
that the cloud of said deed upon her title be removed, and
for an accounting with defendant for rents received by him.
Defendant demurred to this bill of complaint for the following
reasons: That by conveyance to complainant and Nellie
Haynes, the latter received title to an undivided one-half of
the premises and a lawful right to convey the same; that by
the deed to him he took title to such undivided one-half in-
terest, and was entitled to possession and rents and profits
thereof. The demurrer was overruled and defendant's coun-
sel having stated upon the argument that in such case they
did not desire to answer the bill of complaint, a decree was en-
tered for complainant granting the relief prayed.
Defendant asks this court to reverse this decree for the rea-
sons set forth in the demurrer. The case must be determined
upon the construction of the deed from Dickerson and wife
to complainant and her sister. The intent of the grantor, as
clearly expressed in the deed, was to convey a moiety to each
of these parties for life, with remainder to the survivor in fee.
This is expressed in the premises, in the granting clause, and
in the habendum. By a conveyance of her interest, could
either of the grantees in this deed create a tenancy in com-
mon, so as to cut off the contingent remainder? The case of
Midgley v. Walker, 101 Mich. 583, 45 Am. St. Rep. 431, 60
N. W. 296, is urged as authority that this might be done.
That was a case where the interest of one of two joint tenants
under a deed, where the right of survivorship was expressly
granted, was purchased under an execution sale upon judg-
ment against him, and this court held that such interest was
June, 1906.] Finch v. Haynes. 449
subject to levy and sale. The decision goes no further than
that. No greater estate can be alienated, either by the act of
a party or by operation of law, than such party has in the
real estate. In Midgley v. Walker, 101 Mich. 583, 45 Am. St.
Kep. 431, 60 X. W. 296, this court quotes with approval
1 Washburn on Real Property, sixth edition, section 862 :
"No charge, therefore, like a rent, or a right of way, or a
judgment, created by one cotenant, can bind the estate in
^^^ the hands of the survivor, unless the charge be created
by the one who becomes such survivor, or the creator of the
charge releases his estate to a cotenant, who, as releasee, ac-
cepts, with that part of the estate, the charge inhering therein
bv his own act. ' '
In the case at bar neither grantee could convej'' her interest
in the estate so as to cut off the remainder. The deed which
we are construing conveys to the grantees, "to them and the
survivor of them, and to their heirs and assigns forever."
The use of the words "their heirs" does not obscure the plain
intent of the grantor. The fact that the plural is often used
where the singular was intended is recognized. If the deed
under consideration had, as defendant contends, made the
grantees therein named joint tenants of the fee, either of
those grantees could, by conveyance in her lifetime, have de-
prived the other of the right of survivorship : 1 Washburn on
Real Property, 6th ed., sec. 864 ; 17 Am. & Eng. Ency. of Law,
2d ed., 650. But that deed did not make the grantees joint
tenants of the fee,
"Deeds and devises are often made to two or more, and to
the survivor of them and his heirs, the effect of which is to
make them joint tenants for life with a contingent remainder
in fee to the one who survives": 1 Washburn on Real Prop-
erty, 6th ed., sec. 866.
In such cases — and this is such a case — it is settled (see
Schulz V, Brohl, 116 Mich. 603, 74 N. W, 1012; Ewing's Heirs
V. Savary, 3 Bibb (Ky.), 235), that no joint tenant can, by his
conveyance or otherwise, affect the right of survivorship.
The decree of the circuit court is affirmed, with costs.
Carpenter, C. J., and Blair, Ostrander and !Moore, JJ., con-
curred.
To a Joint Tenancy it is essential that the tenants have one and the
lame estate, created by one and the same conveyance, of interests
Am. St. Rep., Vol. 115—29
450 American State Reports, Vol. 115. [Michigan,
eommencing at one and the same time, and held by one and the same
undivided possession: Case v. Owen, 139 Ind. 22, 47 Am. St. Rep. 253.
See, also, Equitable Loan etc, Co. v. Waring, 117 Ga. 599, 97 Am. St.
Kep. 177; Johnson v. Johnson, 173 Mo. 91, 96 Am. St. Hep. 486.
PETROSKI V. MINZGOHR.
[144 Mich. 356, 108 N. W. 77.] '
VENDOB AND PUBCHASEB, Trust Against the Latter In
Favor of the Former. — If one in the possession of real property con-
tracts to sell to another all the timber he may remove therefrom
before a date specified, and he enters under such contract and com-
mences cutting the timber, he stands in the position of a vendee of
land, and cannot disavow the vendor's title nor acquire title in hos-
tility thereto, and if he purchases a paramount outstanding title, he
acquires it in trust for his vendor, and will be compelled to convey
it on the payment of the amount expended in its acquisition, (p.
451.)
C. F. Button, for the complainant.
Joseph F. Hambitzer, for the appellant.
»«« GRANT, J. In December, 1891, one Edward Phelps
purchased from the United States the west half of the west
half of section 15, town 51 north, range 34 west. He received
a patent, but never recorded it. He immediately cut off and
sold the valuable pine timber, abandoned the land, left the
state, and went to Minnesota. He paid no taxes. A pur-
chaser of the land at a tax sale wrote to Mr. Phelps, who re-
plied that he did not want the land. Complainant purchased
this tax title, and also another tax title, and paid the subse-
quent taxes. She, through her husband, entered upon the
land, upon which there was a small house, and cut ties and
timber therefrom. On April 14, 1902, she executed ^^"^ to
the defendant, under her hand and seal, a bill of sale of all
the tamarack and cedar timber he might remove from said
land before the first day of July following at one dollar and
fifty cents per one thousand feet. He entered upon the land
and commenced cutting the timber. He knew that complainant
had and relied upon a tax title. He ascertained the residence
of Mr. Phelps in Minnesota, went to see him, and procured
from him a deed for the sum of fifty dollars. He also ob-
tained from him an assignment of all rights to recover for
June, 1906.] Petroski v. Minzgohb. 451
timber which had previously been cut by her from the land.
He testified that he got the title for the purpose of protecting
himself in cutting the timber under his contract with com-
plainant. He subsequently obtained the advice of his attor-
ney, repudiated his contract with complainant, notified other
parties not to pay her for timber bought from her, and
claimed title to the land. The bill of complaint is based upon
the theory that the defendant is a trustee of complainant, and
prays for an accounting of the timber cut by him, and that he
be decreed to transfer all his rights in said land and timber
to her. The case was heard upon pleading and proofs, and
decree entered for the complainant, upon payment by her to
him of one hundred and eighteen dollars and fifty cents, the
amount of his expenses in procuring the deed from Phelps.
Complainant was in the possession of the land at the time
she made the contract with defendant. He went into pos-
session under her. He remained in possession under her un-
til he had secretly acquired the original title. The bill of
sale by complainant to him contained a covenant of war-
ranty and an agreement to defend the sale made thereby. He
had an irrevocable license for the term specified in the con-
tract. She could not eject him in a suit at law, or restrain
him from cutting and removing the timber by a ^'^^ suit in
equity. He had purchased standing timber and possession of
the land. They stood in the position of vendor and vendee of
land. He had recognized her title and was not in a position
to disavow it or to obtain for his own benefit a title hostile
to it. By his conduct he held the land in trust for her, and
equity will compel him to transfer it to her : Galloway v.
Finley, 12 Pet. (U. S.) 264, 9 L. ed. 1079; Kirkpatriek v. Mil-
ler, 50 Miss. 521 ; Stephens v. Black, 77 Pa. 138 ; Peay v. Capps,
27 Ark. 160; Cromwell v. Craft, 47 Miss. 44; Mitchell v.
Chisholm, 57 Minn. 148, 58 N. W. 873. See, also, Thredgill
V. Pintard, 12 How. (U. S.) 24, 13 L. ed. 877.
"The vendor and vendee [of land] stand in the relation of
landlord and tenant; the vendee cannot disavow the vendor's
title": Galloway v. Finley, 12 Pet. (U. S.) 264, 9 L. ed. 1079.
"After doing homage to his vendor's title by purchase and
entry under it, the vendee will not be tolerated to repudiate
his allegiance to it, and transfer it to another title acquired
whilst thus in possession. If such after-acquired title should
be paramount, the vendee shall be esteemed as holding it in
452 American State Reports, Vol. 115. [Michigan,
trust for his vendor, as having provided it to support and
maintain his possession, and his right under his original
vendor.
"Whilst a court of equity holds the vendee to entire good
faith to his vendor, and will not allow him to get in an out-
standing title or encumbrance, and set it up in opposition to
his vendor, yet it will lend its aid to reimburse all reatonable
advances expended to fortify the title. At the same time it
will rebuke every attempt by the purchaser to betray or in-
validate the title": Kirkpatrick v. Miller, 50 Miss. 521.
"A vendee under articles may set up an oustanding title
not in himself, but when he buys such title, he is trustee of
his vendor, and is entitled only to what he paid to perfect
the title": Stephens v. Black, 77 Pa. 138.
"A vendee in possession under a contract of sale cannot
retain possession and avoid payment of the balance of the
purchase money on the ground that the vendor cannot make
as good a title as agreed. Before he can avail himself of
such defense he must offer to rescind the contract ' ' : Peay v.
Capps, 27 Ark. 160.
' ' A vendee, continuing to hold the possession of land ^^^ to
which his vendor admitted him, cannot acquire an adverse
title and set it up against his vendor": Cromwell v. Craft, 47
Miss. 44.
"While a vendee remains in possession he is estopped from
denying the plaintiff's title, whether it is good or bad":
Mitchell v. Chisholm, 57 Wmn. 148, 58 N. W. 873.
Decree is affirmed, with costs.
Blair, Montgomery, Ostrander and Hooker, JJ., concurred.
A Vendee Who Enters into Possessioii of Lands under an executorf
'•ontract of sale cannot deny the vendor's title nor acquire a title iu
hostility thereto: Fowler v. Cravens, 3 J. J. Marsh. 428, 20 Am.
Dec. 153; Greeno v. Munson, 9 Vt. 37, 31 Am. Dec. 605; Seadbury v.
Stewart, 22 Ala. 207, 58 Am. Dec. 254; Champlin y. Dotson, 13 Smedes
& M. 553, 53 Am. Dec. 102. For exceptions to this general rule, see
Smith v. Babcock, 36 N. Y. 167, 93 Am. Dec. 498; Greene v. Couse,
127 N. Y. 386, 24 Am. St. Eep. 458.
June, 1906.] Allen v. Thorn apple Electric Co. 453
ALLEN V. THORNAPPLE ELECTRIC COMPANY.
[144 Mich. 370, 108 N. W. 89.]
WATEES — Biparian Eights. — An owner of land is entitled to
have the water enter and leave his premises in the natural and ordin-
ary way and at all times. This rule applies to high as well as to low
water, (pp. 4.55, 456.)
WATEES — Dams Backing up on Lands of Biparian Proprietor
in Times of Freshets. — A lower riparian proprietor has no right to
maintain a dam which will back water upon the upper riparian pro-
prietor's lands in time of freshets or prevent its flowing therefrom
to his injury, though at ordinary stages of water such dam will not
occasion any injury, (pp. 456, 457.)
WATEES, Dams, Eemedy for Maintenance of to the Injury of
the Upper Proprietor. — If a dam has been maintained in a stream to
the injury of an upper riparian proprietor in times of freshet, he is
entitled to a judgment reducing the height of the dam so that it will
not inflict such an injury and awarding him compensation for the
damages previously suffered, (pp. 457, 458.)
Action against the defendant company. Decree for the
complainants, and the defendant appealed.
Hartley E. Hendricks, Milton F. Jordon and Thomas Sul-
livan, for the complainants.
Colgrove & Potter, for the defendants.
^"^^ HOOKER, J. The complainants are owners of sixty-
seven acres of land, most of which is bounded on the east by
the Thornapple river. The stream is tortuous, having banks
upon complainants' premises approximating a mile long. It
is shown that there is considerable bottom land adjacent to the
river, in all about twenty-three acres. The defendant pur-
chased a dam site at La Barge, six miles below the complain-
ants' farm (where there had previously been a dam seven feet
high), and some rights of fiowage, which are said to permit
the raising of the dam to eighteen feet from low-water mark
at a point three hundred feet below the new dam. The de-
fendant admits that it built a new dam fifteen and fifty-nine
hundredths feet high above low-water mark at La Barge, so
constructing it that by the use of slash boards, it could be
raised to eighteen feet. It does not appear that it acquired
any rights of fiowage upon the complainants' land, and it is
claimed on its behalf that before building its dam, it caused
levels to be taken which, as reported by its surveyor, showed
that a dam twenty feet high would "pond the water" as far
454 American State Reports, Vol. 115. [Michigan,
up as the Stauffer bridge, which was two miles down the
stream below the north "line of complainants' land. The bill
was filed to restrain the maintenance of the dam, and inci-
dentally to recover damages for injury to complainants' land.
There is no proof that the dam is higher than low-water
mark at the north line of the complainants' land, but the
^"^^ bill alleges that, in times of freshet, the dam so obstructs
the flow of the stream that the low lands are submerged and
injured by water and ice. The learned circuit court judge
who heard the cause found that this allegation was true, and
rendered a decree accordingly, and the defendant appealed.
The defendant contends that it has a right of flowage, which
permits a dam twenty feet high, and that the complainants
cannot complain so long as it does not raise the water at
their premises at its ordinary stage. A map was put in evi-
dence, by the defendant, which shows levels from the point
called datum, three hundred feet below the dam, to various
points upon the complainants' premises. From this we are
able to determine that the lowest point of the land is seven-
teen and forty hundredths feet above datum, other measure-
ments are eighteen and thirty hundredths, eighteen and fifty
hundredths, eighteen and sixty hundredths, eighteen and
seventy hundredths, and they run as high as twenty-three and
thirty hundredths feet. There are two levels which show
twenty-four and twenty hundredths and twenty-four and
thirty hundredths, but the most of them are below twenty-one
feet, and many below nineteen feet. It is complainants' claim
that, when the freshets come, all of the water in the pond be-
low the level of the dam is dead water, and an obstacle to the
flow of water coming down from above, and that the conse-
quence is a much greater rise at their premises than would
occur if there was no impediment to the flow of water along
the bed of the stream, and that as a consequence their land
is not only overflowed but is saturated with water, which
it would not otherwise be. The circuit judge has so found,
and we are of the opinion that the proof warrants the finding.
The defendant admits that the dam proper is fifteen and
fifty-nine hundredths feet high, and its manager stated that
it was sixteen feet high. If by this is meant sixteen feet high
above datum it is one thing, but if sixteen feet above the bed
at the point where the dam is located, it may be quite another,
for datum is necessarily some and perhaps considerably lower
June, 1906.] Allen v. Thornapple Electric Co. 455
than low water at the dam. It is admitted that, with the
flashboards in place, it would pond the water back to the
bridge, a distance below complainants' north line, at an or-
dinary stage of water, by which we understand is meant or-
dinarily low ^"^^ water. The evidence on the part of the
complainants tends to show some two or three feet more of
water at the bridge or ford in times of ordinary' low water,
and when we consider the volume of the stream, which is
naturally a rapid one, and which, under existing conditions,
enters at the bridge, on a level of six miles, whereas in its
natural state there was a fall of eighteen feet between that
point and the dam site, it is self-evident that the velocity of
the current must be lessened, and that the swifter current
iabove must deliver the water more rapidly than it can be de-
livered at the dam, and the inevitable result must be a rise of
the water above. How far up the stream such rise will be
apparent must depend upon the distance necessary to in-
crease the depth of the pond sufficient to establish an equilib-
rium between the volume of the stream above and the over-
flow at the dam. Whatever this rise is upon complainants'
land, if any, in ordinary low water, it is an invasion of their
rights, and could be recovered for if it has damaged them, if
their bill had made claim for such damage.
But the cause for suit alleged is that they are damaged in
times of freshets, their claim being that the ponding of the
water affects their premises at all times, but especially when
the stream is swollen, and that the defendant is at such times
liable for the consequences of its ponding the water. To this
the defendant replies that it is not responsible for the con-
sequences of freshets, and its counsel cite the case of Richards
V. Peter, 70 Mich. 286, 38 N. W. 278, to the proposition that
it has the right to back the water to complainants' north line,
and that so long as it does no more, there is no liability,
whatever consequences may ensue. If a proper interpretation
of the case of Richards v. Peter, 70 Mich. 286, 38 N. W. 378,
warrants defendant's claim, it stands practically alone and
unsupported. On principle we must say that the owner of
land is entitled to have the water enter and leave his prem-
ises in the natural and ordinary way at all times, and this
rule applies to ordinary low water and ordinary high water.
Subject to this the owners, above '^'^ and below, may use
the water for their own purposes. But the lower proprietor
466 American State Reports, Vol. 115. [Michigan,
may not raise the bed of the stream below to a level for six
miles, where previously there was a fall of eighteen feet, either
by filling with earth or a dead wall of water, thereby causing
the accumulation of a head above to the injury of his neigh-
bor, even if such effect is slight or imperceptible except in
seasons of rain. He must act with reference to all ordinary
stages of water and all seasons, and the exception relates only
to those extraordinary and abnormal conditions and floods
which, if known before, at least occur only on rare occasions.
Such was the limitation placed upon a similar case in Penn-
sylvania, that of Monongahela Nav. Co. v. Coon, 6 Pa. 379, 47
Am. Dec. 474, and the later case of IMcCoy v. Danley, 20 Pa.
85, 57 Am. Dec. 680. See, also, Michigan Paper Co. v. Kala-
mazoo Valley Electric Co., 141 Mich. 48, 104 N. W. 387.
We must assume that it was such freahets that the court
had in view in Richards v. Peter, 70 Mich. 286, 38 N. W. 278,
and that it did not intend to hold that a lower proprietor was
entitled to take away the opportunity for the discharge of
water from an upper proprietor, so that every increase in the
volume of the stream would necessarily flood, to a greater or
less extent, the lands of his adjacent upstream neighbor: See
Whitney v. Wheeler Cotton Mills, 151 Mass. 396, 24 N. E.
774, 7 L. R. A. 613, note ; Barnard v. Shirley, 151 Ind. 160,
47 N. E. 671, 41 L. R. A. 747, note; Avery v. Vermont
Electric Co., 75 Vt. 235, 98 Am. St. Rep. 818, 51 Atl. 179,
59 L. R. A. 817, note. We do not discuss at length the
many cases, cited in these notes, which sustain the rule that
a dam owner will be liable if, in the ordinary times of high
water, the overflow passes his neighbor's line: See Dorman v.
Ames, 12 Minn. 451 ; Ames v. JNIanufacturing Co., 27 Minn.
245, 6 N. W. 787. For late cases, consult 4 Current Law, p.
1826, and note.
The defendant's counsel call attention to certain evidence
showing that, by extensive dredging and draining in adjoin-
ing counties, the volume of water in Thornapple river has
been materially increased. IIow far we would be justified
in taking judicial notice of the fact that much, ^'^ if not all,
of this work was after the year 1903, when this suit was
commenced, we need not determine. It is enough to say that
it is not shown that it was not after that time that this increase
began. We are convinced that the complainants' land has
been injured by the defendant's dam. If, as the complain-
June, 1906.] Allen v. Thornapple Electric Co. 457
ants claim, the flashboards were in place at the time, we would
think that their removal in times of high water would do
much to lessen the damage, possibly it could prevent any.
If, however, the flashboards were off, as the defendant's tes-
timony tends to show, it is manifest that adequate wasteweirs,
or gates, to relieve the flood were not provided. Before the
decree was rendered, the dam went out. We construe the
decree to mean that the court found that the complainants
had sustained damages to the amount of one hundred and
fifty dollars, and that if the defendant should elect to rebuild
its dam to a less height, so that it would not thereafter affect
the stream at complainant's premises, that sum, with costs,
should be the limit of their recovery, but if defendant should
elect to rebuild its dam to the former height, they should
recover the sum of one thousand dollars, and that the defend-
ant should thereafter have the right to flow such lands by such
dam. The decree has not in terms provided for an injunction
against the maintenance of the dam. It has, however, placed
a condition upon its erection, viz., the payment of one thou-
sand dollars to the complainants. This was doubtless upon
the theory that complainants, having sought relief in equity,
should do equity, and accept reasonable compensation for past
and future damages, instead of requiring a disproportionate
sacrifice by the defendant, through the crippling of its water
power and business.
We are of the opinion, however, that the damages al-
lowed are excessive The evidence does not show that the
land is rendered useless. It will have a material value for
farming purposes much of the time, and we think six hun-
dred and ninety dollars ample compensation for all past and
prospective damage to said land from the dam in ques-
tion. To us it seems obvious that the maintenance of the
dam at fifteen and fifty-nine hundredths feet in '"^"^^ height
has been and will continue injurious to the complainants, and
that its effect has been to raise the water in times of freshet
upon their land at least two feet. It is not improbable that
it -raised the water more than that. We are of the opinion,
therefore, that the height of the dam should be reduced to
fourteen feet above datum, hereinbefore referred to, and that
complainants recover one hundred and fifty dollars damages,
unle.ss defendant shall pay, or tender to the complainants or
their solicitor, the sum of six hundred and ninety dollars,
458 American State Reports, Vol. 115. [Michigan,
within ninety days after notice of this decree, which sum,
if paid, shall be in full payment for the right to flow the said
bottom lauds of said complainants, heretofore and hereafter,
by a dam of the height heretofore maintained by the defend-
ant. The case of Blake v. Cornwell, 65 Mich. 467, 32 N. W.
803, warrants such a decree.
The decree will be modified in accordance with the opinion,
the defendant to recover costs of this court.
Grant, Blair, Montgomery and Ostrander, JJ., concurred.
While a Person may Erect a Dam in a stream for certain useful
purposes, he must calculate the effect at ordinary times and also at
periods of high water, and should so construct it that ordinary and
expected floods will not cause an overflow to the damage of upper
owners, for he will be liable for all damages caused thereby; See the
note to Mizell v. McGowau, 85 Am. St. Eep. 711.
WYANDOTTE BREWING COMPANY v. HARTFORD
FIRE INSURANCE COMPANY.
[144 Mich. 440, 108 N. W. 393.]
INSUBANCE Against Fire, When Void Because the Insured
Property is upon Leased Ground. — If a policy contains a condition
stating that it is void if the subject of insurance is a building on
ground not owned by the assured in fee simple, no recovery can be
had thereon for the loss of a building on leased premises, where the
application for insurance was oral, and no representation was made
and no question asked respecting the title, and the insurer had no no-
tice thereof, though the policy issued was not read by the assured
prior to the fire, and he had no knowledge of the condition, (pp.
462, 465.)
INSUBANCE Against Fire — Evidence. — The burden of proving
that the insurer had knowledge that the building insured was upon
leased premises must be assumed by the assured where the policy's
conditions make it void if the subject insured is upon premises on
which the assured has not title in fee simple, (p. 465.)
Maybury, Lucking, Emmons & Helfman, for the appellant.
Charles H. Marr, and Dickinson, Stevenson, Cullen, War-
ren & Butzel, for the appellee.
*^^ McALVAY, J. Suit was brought by plaintiff upon a
fire insurance policy of the Michigan standard form for the
sum of six hundred dollars, issued by defendant to plaintiff
July, '06.] Wyandotte etc. Co. v. Hartford Ins. Co. 459
November 29, 1902, for one year, and covered the ice-houses
of plaintiff on Detroit river in Wyandotte, Michigan. The
application for insurance was verbal. The lots upon which
the buildings stood were not owned by plaintiff, but were occu-
pied by it as lessee. The land belonged to the Marx estate
when the policy was issued, and was subsequently ^^^ parti-
tioned. Nothing was said by either party at the time the pol-
icy issued relative to the title or interest of plaintiff in and to
the land upon which the property was located. Marx, presi-
dent of defendant company, accepted the policy without read-
ing or examining it, placed it in his safe and retained it, and
claimed he never knew its contents. Upon the partition pro-
ceedings Nicholas Marx and John Marx each acquired title
to one of these lots. They were brothers of Frank Marx, pres-
ident of plaintiff company, who purchased John's lot. He
was unable to agree with Nicholas as to the rent, which was
to be thereafter paid by plaintiff, for the ground on which
one of the ice-houses stood. Nicholas Marx ordered the ice-
house removed from his lot. Plaintiff agreed to do this by
December 1, 1903. The fire which destroyed the ice-houses
occurred November 17, 1903. After the fire there was at-
tached to the policy the following rider: "It is hereby under-
stood and agreed that the interest of the Wyandotte Brewing
Co. covered in policy number 20,919 is assigned to Frank
Marx .... and is his property exclusively."
The same statement was made in the proofs of the loss.
The declaration in the case alleged relative to the foregoing
assignment that this "indorsement attached to said policy
of insurance was attached by defendant's agent under a mis-
taken idea of the facts in the case, and said indorsement was
not authorized by the plaintiff or its officers until after said
firfie had occurred."
Defendant denied plaintiff's right to recover, upon the fol-
lowing grounds:
1. Because the building insured was upon "ground not
owned by the insured in fee simple," and no written "agree-
ment" thereof was indorsed on the policy as required by the
terms thereof,
2. Because title to the ground on which the insured build-
ings stood changed after issuance of the policy and no written
"agreement" of the change was indorsed on the policy, as
required by the terms thereof.
460 American State Reports, Vol. 115. [Jtlichigan,
3. Because the policy had been assigned before suit to
**^ Frank Marx; a bill in equity is necessary to correct the
claimed mistake before liability of defendant to plaintiff be-
comes fixed.
4. No proofs of loss were furnished within the time required
by the policy.
At the close of the case each party moved the court for an
instructed verdict, which was denied. It appearing that the
questions involved were questions of law, by stipulation the
jury were excused, and the parties agreed that the case be
submitted on briefs to the court to be determined by him, and
a verdict entered, as if the jury were present. The court
directed a verdict in favor of plaintiff, and judgment was
entered for the amount of the policy and interest.
The principal error relied upon by defendant as a reason
for reversing this judgment is that the court erred in not
holding that the policy was void, for the reason that the build-
ing insured was "on ground not owned by the insured in fee
simple, and no written agreement thereof was indorsed on the
policy as required by its terms." The policy sued upon was
the regular Michigan standard policy, and the clause relied
upon by defendant reads: "This entire policy, unless other-
wise provided by agreement indorsed hereon, or added here-
to, shall be void .... if the subject of insurance be a build-
ing on ground not owned by the insured in fee simple."
It is an admitted fact in this case that plaintiff never owned
the ground upon which the buildings were located. The
buildings, as the proofs show, were owned by plaintiff, and
were located on leased ground. At the time the insurance
was placed, nothing at all was said by either party as to the
title to the ground. No questions were asked by defendant's
agent, and no representations made by plaintiff. There was
no written application. As far as the record shows, defend-
ant or its agent had no knowledge of the condition of the title
to the ground. The court, in his decision, held that the case
at bar was controlled by the cases of Hall v. Niagara Fire
Ins. Co., 93 Mich. '»^ 184, 32 Am. St. Rep. 497, 53 N. W.
727. 18 L. R. A. 135, and Hoose v. Preseott Ins. Co.. 84 Mich.
309, 47 N. W. 587, 11 L. R. A. 340. The contention of de-
fendant is that the case is distinguishable from these cases;
that the application was verbal ; that the policy was issued
July, '06.] Wyandotte etc. Co. v. Hartford Ins. Co. 461
by defendant and accepted by plaintiff without objection, and
that he is bound by the terms of his contract ; citing ^Vierengo
V. American Ins. Co., 98 Mich. 621, 57 N. W. 833.
The cases above mentioned and other cases before this court
have discussed this clause of the Michigan standard policy
referred to. The question in the Wierengo case (98 Mich.
621, 57 N. W. 833) appears to be the same question involved
in this suit. The insurance in that case was secured upon
a verbal application. No terms of the contract were men-
tioned except the amount. Upon the receipt of the policy
neither the insured nor her agent read it, and did not read
it until after the fire. The policy was the Michigan standard
policy for one thousand dollars, containing the same clause as
to title to land and mortgages on personalty as in this case.
It covered a stock of merchandise upon which, at the time,
there was a chattel mortgage for over twelve hundred dol-
lars. Neither defendant nor its agent had any knowledge
of this mortgage at the time the policy issued. Justice Grant,
speaking for the court, said: "In this case, where there was no
written application nor any teri^xS of the policy agreed upon
by parol except the amount, the insured must be charged with
knowledge that the policy he receives contains the contract,
binding upon him as well as the insurer. He must know that
the policy, which is the contract, contains the usual terms of
such instruments. He may not lay it aside without reading,
and when he seeks to recover upon it, and finds that, under its
plain provisions, he cannot recover, say: 'I did not read it.
The insurer did not tell me what it contained. I did not know
that it was necessary to tell him about the title and condition
of my property, and therefore I am not bound by its terms. '
Had Mr. Pearson or his principal read the contract — which
he could have done in a few moments — they would at once
have known these plain and important conditions, which the
defendant had the clear right to insert, and to make a condi-
tion of its validity. '*'*'* Certainly the insured must be held
to some degree of diligence in obtaining knowledge of the con-
tracts to which they are parties. Ignorance will not relieve
a party from his contract obligations. The law only relieves
him therefrom in cases of fraud, mistake, waiver, or estoppel.
An insurer is not required by the law to inquire into the con-
dition of the title to tlie property insured, or to inform the in-
462 American State Reports, Vol. 115. [Michigan,
sured of all the conditions and terms of the policy to be issued,
or to read it to him, or inform him of its contents. When
received and accepted without objection, he must be bound
by its terms unless these terms are waived by the insurer.
This is the law of contracts, and there is no reason or au-
thority for holding that an insurance contract is an excep-
tion thereto."
We think this is decisive of the question before us, and
unless the cases relied upon by the court, and other cases
cited by counsel for plaintiff, overrule it, we consider the
question as to the construction of the part of the contract
under consideration settled in this state. The fact that in
this case the question is as to the title to the ground upon
which the insured buildings were situated, and in the case
just cited was as to a chattel mortgage on personal property
makes no difference. Each requirement is of equal binding
force as a part of the same stipulation in the contract. The
only distinction being as to the class of property to which each
applies. The following authorities are in accord with the
opinion above quoted : Security Ins. Co. v. Mette, 27 111. App.
324; Phenix Ins. Co. v. Searles, 100 Ga. 97, 27 S. E. 779;
Dumas v. Insurance Co., 12 App. Cas. (D. C.) 245, 40 L. R.
A. 358.
A review of the cases claimed by plaintiff as contrary to
or overruling the Wierengo case (98 Mich. 621, 57 N. W. 833),
will, we think, disclose that such is not the fact. In Hoose v,
Prescott Ins. Co:, 84 Mich. 309, 47 N. W. 587, 11 L. R. A. 340,
opinion by Champlin, C. J., defendant, among other reasons,
denied plaintiff's right to recover, because she was not sole
and unconditional owner of the property and did not own the
ground, upon which the insured building stood, in fee sim-
ple, in violation of the conditions of the policy. The policy
covered the '^'^^ building, stock of groceries, and so forth, and
store furniture and fixtures contained in the building. The
policy as to the real estate interest reads : * * Insure Mrs. Mar-
garet Hoose to the amount of ... . one thousand dollars on
the two-story frame building occupied as a grocery store and
dwelling situated on the northwest corner of Milwaukee and
Beaubien Sts., Detroit, Mich., .... against all such imme-
diate loss or damage sustained by the assured as may occur
by fire to the property above specified, but not exceeding the
interest of the assured in the property. ' *
July, '06.] Wyandotte etc. Co. v. Hartford Ins. Co. 463
At the time the insurance was written, she held under a
land contract and there was a mortgage on the premises.
The application was verbal, and it was claimed, and the jury
found specially, that defendant's, agent had been told, and
knew at the time the policy issued, the condition of the title.
This court held that such verbal statements became a part
of the contract, and the finding of the jury was conclusive
upon defendant that it had knowledge of the condition of the
title. In construing the clause in the policy relative to the
title to the ground on which the building stood, which is the
same as in the policy in the suit at bar, the court says: "In
construing this portion of the policy the whole must be taken
together. Now, the object sought to be accomplished by the
person applying for insurance was to obtain indemnity against
loss by fire of her interest in the building. If the insurance
company which made out this policy, upon the verbal applica-
tion to its agent, had desired to know what interest it was
insuring it should have stated it in that part of the policy
pertaining to the risk."
And further: "Construing this portion of the policy with
the testimony in the case, and with the fact that the com-
pany issued the policy to Mrs. Hoose without stating' in the
policy what her interest was, but insuring the building
against loss by fire to an amount not exceeding the interest
of the assured in the property, we think it must be held that
the defendant understood the condition of the title and in-
tended to insure whatever interest Mrs. Hoose had which
■"* was insurable, not exceeding the amount named in the
policy. ' '
The court also held that the requirements of the policy as
to indorsements of changes of title referred only to such
changes as arose after its delivery and acceptance.
In Hall V. Niagara Fire Ins. Co., 93 Mich. 184, 32 Am.
St. Rep. 497, 53 N. W. 727 (opinion by McGrath, J.), the
suit was brought by an assignee of the policy. This assign-
ment was made by the consent of the company and defend-
ant's agent was told that the insured has assigned his inter-
est in the policy to plaintiff. The court held that the defend-
ant, by consenting to the assignment, had made a contract
with plaintiff, and was estopped from defending against the
assignee on account of prior breaches unknown to either
party; that the information it received at the time of the as-
464 American State Reports, Vol. 115. [Michigan,
signment was sufficient to put it upon inquiry. It also held
that the assignor had an insurable interest. In this case the
application was verbal. No statement as to the condition
of the title was asked for pr given. In its reference to the
Hoose case (84 Mich. 309, 47 N. W. 587, 11 L. R. A. 340),
the court was in error as to its statement that the facts were
precisely the same. In the Hoose case (84 Mich. 309, 47
N. W. 587, 11 L. R. A. 340), as above already stated, de-
fendant company was informed of the exact condition of
title when the insurance was written. This case, however,
was not determined and decided upon that question, as al-
ready appears.
In Guest v. New Hampshire F. Ins. Co., 66 Mich. 98, 33
N. W. 31, opinion by Campbell, C. J., the application was
verbal, and the insured stated he held under a land con-
tract. The policy read: "Lot held by virtue of a land con-
tract."
In Gristock v. Royal Ins. Co., 87 Mich. 428, 49 N. W. 634,
opinion by Grant, J., the application was not in writing and
defendant's agent was informed of a mortgage.
In Miotke v. Milwaukee M. Ins. Co., 113 Mich. 166, 71 N.
W. 463, opinion by Hooker, J., insured was a foreigner un-
able to write and speak English. He stated that he held
the land on which the house was. situated on contract. The
contract was, in fact, to himself and wife jointly.
*^'' The most recent case before this court, bearing upon
the question under consideration, is Brunswick-Balke-Collen-
der Co. v. Assurance Co., 143 Mich. 29, 105 N. W. 76, opin-
ion by Blair, J. Plaintiff was the owner of certain saloon
furniture and fixtures, billiard and pool tables, of which it
had made a conditional sale retaining title in the property,
and also upon which it had taken a chattel mortgage to se-
cure the title notes. The application was verbal and the
record does not show that any specific representations were
made as to title. The court said: "In the case at bar the
plaintiff had an insurable interest. It had the legal title
and was the owner of the property insured subject to the
rights of Rawson Bros, to acquire its title by performance of
its contract of sale. The only actual description of their
interest in the property contained in the policy was the lan-
guage 'eleven hundred dollars on their saloon furniture and
fixtures, etc.' This was a true description, and defendant
July, '06.] Wyandotte etc. Co. v. Hartford Ins. Co. 465
cannot complain because of its own negligence in failing to
require a more specific description."
The cases cited in the opinion have already been discussed.
The case decides that the description of the property in the
policy was not untrue; that the owner of the legal title of
personal property need not disclose the fact that he had
agreed to sell such insured property upon conditions reserv-
ing title. This is supported by authority. A conditional
sale in the law of fire insurance is not an alienation : 3 Joyce
on Insurance, sec. 2284, and cases cited. Earlier Michigan
cases cited by" plaintiff to the point that the insured need not
disclose the state of title to the property insured are not in
point, for the reason that the insurance contracts did not
so require, or the facts showed waiver or estoppel. In the
cases discussed, where the opinion of this court has not been
given, enough of the facts of each case has been stated to
show some knowledge as to title, or waiver on the part of
the insurer. This court has never in terms overruled the
case of Wierengo v. American Ins. Co., 98 Mich. 621, 57 N.
W. 833, and it is evident such has not been the intention.
Some members of the court who concurred **® in that case
have sat in all the cases hereinabove considered, except the
Guest case, (66 Mich. 98, 33 N. W. 31), and in no instance
has the decision in that case been referred to or questioned,
for the undoubted reason that these cases were distinguished
by them.
In this case, at the time that the policy issued, plaintiff
was not the owner of the land in fee simple. The burden
of the proof to show knowledge in the defendant of this fact
was upon the plaintiff. This it failed to do. The defend-
ant had no such knowledge; therefore the policy was void.
The court should have directed a verdict for defendant. We
find no other errors in this case.
Judgment is reversed, and a new trial ordered.
Grant, Ostrander, Hooker and Moore, JJ., concurred.
Although a Policy of Insurance declares that it shall be void if the
interest of the insured is other than the unconditional or sole owner-
ship, such condition, it would seem, is waived if there is no written
application made for a policy and no questions concerning the title
are asked: Dooley v. Hanover Fire Ins. Co., 10 Wash. 155, 58 Am.
St. Rep. 26. If an insured has an insurable interest in the property,
and in good faith applies for insurance thereon, and makes no actual
micrepresentation or concealment of bis interest therein, and the in-
Am. St. Rep., Vol. 115—30
466 American State Reports, Vol. 115. [Michigan,
surance company refrains from making inquiry concerning his interest,
issues a policy to him. and accepts and retains his premium, it must
be presumed to have knowledge of the condition of his title, and to
insure the property with such knowledge: National Fire Ins. Co. v.
Three States Lumber Co., 217 111. 115, 108 Am. St. Eep. 239.
GREENIVIAN v. 0 'RILEY.
[144 Mich. 534, 108 N. \V. 421.]
SEDUCTION, Averment of Plaintiff's Chastity, What Amounts
to. — If, in an action for the seduction of the plaintiff, the complaint
avers that she was seduced by the defendant, this is equivalent to
an averment of her previous chastity, (p. 467.)
SEDUCTION, Promise, Deceit, Artifice and Influence Suffi-
cient to Sustain Action for. — If a man states to a girl seventeen
years of age that he likes her the best of any girl he ever knew,
that she will never be sorry and never regret it, and that she can
always live with him and be happy, he may be held liable for her
seduction under a statute creating liability for seduction under
such "promise, artifice or influence as will overcome the scruples
of a chaste woman. " (p. 467.)
SEDUCTION — Chastity, Want of. Evidence of. When Admis-
sible.— ^Under the General Issue, the plaintiff's want of chastity is
admissible in actions of seduction without giving any notice of
intention to offer such evidence, and this remains true though
the trial court has adopted a rule declaring that an affirmative
defense must be clearly set forth in the notice added to the defend-
ant's plea. (p. 468.)
SEDUCTION — ^Presumption of Chastity. — In an action for
seduction, previous chastity is presumed, (p. 468.)
SEDUCTION, Woman Allowed to Maintain an Action for. —
Under a statute declaring that it shall not be necessary in an action
for seduction to allege or prove any loss of service in consequence
thereof, but if the female be a minor when seduced, action may be
by her father, mother, or guardian, and if of full age, the action
may be by the father or any other relative who shall be authorized
by her to bring the same, there is given a right of action which may
be enforced by her in her own name. (p. 469.)
SEDUCTION, Necessity of Chastity to Support Action for.—
Under a statute giving to a woman the right to sue for her seduction,
it is fatal to the action that she was not a chaste woman at the
time of the alleged seduction, (pp. 469, 470.)
EVIDENCE, Hearsay, When Inadmissible. — In an action for
seduction, the plaintiff should not be permitted to testify that she
had been told that the defendant had stated in his store that she
was a mother, that he could prove it, and that he was not the cause,
such evidence is hearsay, (p. 470.)
SEDUCTION is Correctly Defined to be the act of per-
suading or inducing a woman of previous chaste character to depart
from the path of virtue by the use of any species of arts, persua-
Jul)% 1906.] Greenman v. O 'Riley. 467
sions, or wiles, which are calculated to have, and do have, that
effect, and resulting in her ultimately submitting her person to
sexual embraces of the person accused, (p. 471.)
APPEAL AND EBBOR — Waiver of Exception by Failure to
Argue. — Where the brief of the appellant merely calls the attention
of the appellate court to the refusal of the trial court to give certain
requested charges, such court will assume that it is not expected to
give attention to such requests, (p. 471.)
F. A. Kulp and Stewart & Jacobs, for the appellant.
Walter S. Powers, for the appellee.
•^ss CARPENTER, C. J. Plaintiff brought this suit to
obtain damages for seduction. She secured a verdict and
judgment in the lower court. Defendant seeks a reversal of
that judgment upon several grounds.
1. He contends that the court erred in denying his motion,
made at the conclusion of plaintiff's case, to strike out all
the testimony upon the ground that the declaration did not
aver the plaintiff's chastitj''. The declaration did aver that
defendant seduced the plaintiff. This, as will hereafter ap-
pear in this opinion, was an averment that she was there-
by drawn from the path of virtue. The declaration then
did in effect aver chastity and sufficiently averred it. The
trial court did not therefore err in overruling this motion.
2. Defendant contends that the trial court erred in over-
ruling his motion to strike out plaintiff's testimony on the
ground that she failed to show such "promises, deceits,
artifices, or influence that would overcome the scruples of a
chaste woman." Plaintiff, who was a girl only seventeen
years of age, testified: "He told me .... he liked me the
best of any girl he ever knew. He told me he was worth be-
tween twenty thousand dollars and thirty thousand dollars.
He did not say it right out — say that he would marry me, or
anything like that. He always said I never would be sorry,
and would never regret it, and he said I always could live
with him and be happy. That is the way he worded it."
This testimony was sufficient to warrant the jury in de-
ciding that defendant made such promises, deceits, artifices,
*** or influence as would overcome the scruples of a chaste
woman : See Hallock v. Kinney, 91 Mich. 57, 30 Am. St. Rep.
462, 51 N. W. 706.
3. The trial court prevented defendant from proving by
the cross-exami nation of plaintiff, and by the introduction
468 American State Reports, Vol. 115. [Michigan,
of other testimony, that plaintiff lacked chastity at the time
of the alleo:ed seduction, upon the ground that with his plea
he had given no notice of his intention to offer such testi-
mony. This testimony was admissible under the plea of the
general issue, unless made inadmissible thereunder by sub-
division b of circuit court rule 7. That subdivision reads:
"An affirmative defense, such as payment, release, satisfac-
tion, discharge, license, fraud or failure of consideration in
whole or in part, and any defense which by other affirmative
matter seeks to avoid the legal effect of or defeat the cause
of action set forth in plaintiff's declaration, must be plainly
set forth in a notice added to the defendant 's plea. ' '
Plaintiff's lack of chastity is not an affirmative defense,
under the foregoing rule, unless it was "affirmative matter
[which] seeks to avoid the legal effect of or defeat the cause
of action set forth in plaintiff' 's declaration."
It is contended by plaintiff that testimony tending to prove
plaintiff's lack of chastity was "affirmative matter," under
the language above quoted, because the presumption of
chastity made it the duty of defendant to introduce such testi-
mony. It is true there is a presumption of plaintiff's chastity :
People V. Brewer, 27 Mich. 134, This presumption trans-
ferred from plaintiff to defendant the duty of first intro-
ducing testimony touching the issue of chastity, but it by no
means follows that in introducing that testimony the latter
was making an affirmative defense, within the meaning of
circuit court rule 7. If it is true that plaintiff's declaration
avers by implication that she was chaste at the time of the
alleged seduction, and that she cannot recover if she was
not — and I shall hereafter endeavor to prove that this is
true — her suit necessarily puts her chastity in issue. The pre-
sumption of chastity ^^"^ under consideration merely takes
the place of evidence of chastity. It does not remove the is-
sue of chastity from the case. Defendant, when offering
testimony to disprove chastity, is merely denying an essential
fact asserted by plaintiff, and is not making an affirmative
defense. Though the presumption of chastity compels the
defendant, instead of the plaintiff, to first introduce testi-
mony on the issue of chastity, the latter, when introducing
it, is not bringing into the case "affirmative matter to avoid
the legal effect of or defeat the cause of action set forth in
plaintiff"s declaration," within the meaning of circuit court
July, 1906.] GREENM.VN V. O 'Riley. 469
rule 7. He is merely offering testimony which tends to prove
that plaintiff did not have, and never had, "the cause of ac-
tion set forth in her declaration. ' '
The foregoing contention that, in introducing testimony
tending to prove that plaintiff lacked chastity at the time of
the alleged seduction, defendant is not making an affirmative
defense, rests upon the assumption that plaintiff had no cause
of action, unless she was chaste at the time of the alleged
seduction. It is therefore essential that I prove that this as-
sumption is well founded. At common law the seduction of
a female gave her no right of action. Her right of action
is statutory. It is given in this state by section 10,418 of 3
Compiled Laws, which reads: "It shall not be necessary in
any action on the case for seduction hereafter to be brought
to allege in the declaration, or to prove on the trial, any
loss of service in consequence of such seduction ; but if the
female seduced be a minor at the time of the seduction, the
action may be brought by her father, mother, or guardian;
and if such female be of full age, the action may be brought
by her father, or any other relative who shall be authorized
by her to bring the same. ' '
We have held that this statute gives to the woman seduced
a right of action which she may enforce in her own name:
Watson V. WatsQn, 49 Mich. 540, 14 N. W. 489; Ryan v.
Fralick, 50 Mich. 483, 15 N. W. 561. This right of action
is described ^^* in the statute as an "action on the case for
seduction." The question arises. What is meant by seduc-
tion for which the female has a right of action ? This court
has been called upon several times to define seduction in en-
forcing section 11,694 of 3 Compiled Laws, which makes it
a crime "to seduce and debaiuch any unmarried woman," and
we have uniformly held that the offense was not committed
unless the woman seduced was chaste at the time of her se-
duction (see People v. Clark, 33 Mich. 112; People v. De
•Pore, 64 Mich. 693, 8 Am. St. Rep. 863, 31 N. W. 585; Peo-
ple v. Gibbs, 70 Mich. 425, 38 N. W. 257; People v. Smith,
132 Mich. 58, 92 N. W. 776), saying at the same time that,
"although the female may have previously left the path of
virtue, .... yet, if she has repented of that act and re-
formed, she may again be seduced": People v. Clark, 33 Mich.
112. On the other hand, in a suit brought by a parent for
the seduction of his child, this court said that the child's
470 American State Reports, Vol. 115. [Michigan,
lack of chastity "would have weight in mitigation of dam-
ages, but would not be a complete answer to the action":
Stondt V. Shepherd, 73 Mich. 588, 41 N. W. 696. It should
be borne in mind, however, that in this latter case we were
not called upon to define seduction. When a parent brings
suit to recover compensation from one who has debauched
his child, proof of seduction is not essential to the right
of recovery. In those cases the plaintiff is entitled to re-
cover if the illicit intercourse has resulted in legal injury:
See Akerley v. Haines, 2 Caines (N. Y.), 292; McAulay v.
Birkhead, 35 N. C. 28, 55 Am. Dec. 427; Bigelow on Torts,
4th ed., p. 167.
Can we say the word "seduction" has two distinct legal
definitions in this state? Can we say it has one meaning
when a woman brings suit for damages under the statute
last above quoted, and another and different meaning when
her seducer is prosecuted under the criminal statute? To
answer this question in the affirmative would, in my judg-
ment, be illogical and productive of unnecessary confusion.
Seduction, as a statutory cause of action, is to be defined pre-
cisely as it has been defined in construing the criminal stat-
ute. Plaintiff was not seduced, ^^^ therefore, if she was not
chaste — remembering (see People v. Clark, 33 Mich. 112)
that her chastity, though once lost, may be regained by re-
pentance and reformation — at the time of he'r seduction. The
trial court, as will hereafter appear, defined seduction in ac-
cordance with these views, but he erred in excluding the testi-
mony under consideration which tended to prove that plain-
tiff was not chaste at the time of her seduction.
4. Plaintiff testified that she had been told by third per-
sons that defendant stated in his store "that I was a mother.
He said that he could prove that he was not the cause, though. ' '
This testimony was admitted against the objection of de-
fendant that the same was incompetent, irrelevant and im-
material and hearsay. It was clearly hearsay, and should,
not have been admitted.
5. The trial court defined seduction to be: "The act of
persuading or inducing a woman of previous chaste charac-
ter to depart from the path of virtue by the use of any
species of arts, persuasions or wiles, which are calculated to
have, and do have, that effect, and resulting in her ultimately
July, 1906.] Greenman v. O 'Riley. 471
submitting her person to the sexual embraces of the person
accused. ' '
Defendant complains of this definition. It was correct:
See People v. Gibbs, 70 Mich. 425, 38 N. W. 257 ; People v.
Smith, 132 Mich. 58, 92 N. W. 776.
Other complaints are made in defendant's brief. Some of
these complaints are answered by elementary principles of
law, and they need no discussion. Some of these complaints
relate to discretionary rulings of the trial judge, and there
was no abuse of that discretion. Some of these complaints
are based upon no exception, and they relate to rulings
which we cannot review without exceptions. In support of
other complaints the brief contains no argument. We il-
lustrate these last complaints by quoting from defendant's
brief: "Exceptions 52 to 61, inclusive, relate to the refusal of
the court to give defendant's request to charge, and we call
the court's attention to such requests: Record, pp. '^^ 108-
112. Exception 63 relates to such portions of the court's
charge as are found in defendant's bill of exceptions: Rec-
ord, pp. 138, 139."
We assume that it was not expected that we should con-
sider such complaints.
For the errors pointed out, the judgment is reversed, and
a new trial granted.
McAlvay, Grant, Blair and Moore, JJ., concurred.
Civil Actions for Seduction are discussed in the notes to Weaver v.
Bachert, 44 Ain. Dec. 162; Bradshaw v. Jones, 76 Am, St. Eep.
659. At the common law it seems that a woman could not recover
damages for her own seduction. The rule is otherwise now, however,
in many of the states: See the notes to Weaver v. Bachert, 44 Am.
Dec. 165; Bradshaw v, Jones, 76 Am. St. Rep. 666. In Rhode Island,
evidence of seduction is not admissible in aggravation of damages
in an action for breach of promise to marry: Wrynn v. Downey,
27 E. L 454, 114 Am. St. Eep. 63.
w
CASES
IN THE
SUPKEME COURT
OP
MISSOURI.
RICHARDSON v. BUSCH.
[198 Mo. 174, 95 S. W. 894.]
CONVERSION — Title — Collateral Attack. — If an administra-
tor sues for damages for the wrongful conversion of certificates of
stock belonging to the deceased, the issue is the title of the cer-
tificates and not the authority of the administrator to take charge
of the estate of the deceased who died in another state, and the
question whether the administrator's authority can be attacked
in a collateral proceeding is not in the case. (p. 473.)
CONVERSION — Pleadings — Admissions. — If an administra-
tor's petition in general terms charges conversions, and, in addi-
tion charges specifically how such conversion was made, namely, that
defendant had in his possession certificates of stock in a foreign
corporation and delivered them to decedent's administrator in the
state where the decedent died, there is nothing in the petition from
which it can be inferred that the certificates were lost to the estate,
and a demurrer to the petition does not admit a state of facts on which
the defendant would be liable for a conversion, (p. 474.)
EXECUTORS AND ADMINISTRATORS— Stock in Foreign
Corporation — Place of Ownership. — If the owner of corporate stock dies
in the state where the corporation is organized, leaving the cer-
tificates in another state, a public administrator taking charge of
his estate situated in the latter state has no right to claim such
certificates of stock which are only evidence of the ownership of
the stock, (p. 475.)
EXECUTORS AND ADMINISTRATORS— Stock in Foreign Cor-
poration— Place of Ownership and Administration. — If the owner of cor-
porate stock dies in the state where the corporation is organized, leav-
ing the certificates of such stock in another state, the stock itself
belongs to the administrator appointed in the state where the owner
thereof dies, and the courts of the state where the certificates of
stock are situated have no power to seize the stock at the instance
of an administrator appointed there, as the stock itself is beyond the
process of such courts, which have no power to apply such certifi-
cates to the payment of the decedent's debts in that state nor to
distribute them among the kin of such decedent, (p. 477.)
Rassieur, Schnurmacher & Rassieur, for the appellant.
Finkelnburg, Nagle & Kirby, for the respondent.
(472)
June, 1906.] Richardson v. Busch. 473
*^ VALLIANT, J. The petition states that the plaintiff
is the public administrator in the city of St. Louis, and that
in that right he has taken charge of the estate of John C.
De La Vergne, deceased, who at the time of his death was
a resident of the state of New York; that De La Vergne in
his lifetime, being the owner of five hundred shares of stock
in a New York corporation, called the De La Vergne Re-
frigerating Machine Company, evidenced by two certificates
for two hundred and fifty shares each, delivered those certi-
ficates to the defendant Busch to indemnify him against his
liability on a bond for twenty-four thousand dollars which
he had signed as surety for the De La Vergne corporation
at the request of De La Vergne in an attachment suit in the
city of St. Louis against the corporation; that while the at-
tachment suit was pending De La Vergne died in New
York, and plaintiff, in his official capacity as public admin-
istrator, immediately took charge of the De La Vergne es-
tate in Missouri; that thereafter the attachment suit was dis-
missed and Busch 's liability on the bond ceased; that there-
upon the plaintiff demanded of Busch the certificates of
stock, but Busch refused to deliver the same **** * ' and wrong-
fully converted the said certificates and shares of stock to his
own use," to the plaintiff's damage in the sum of fifty thou-
sand dollars, for which sum he asks judgment. The court
sustained a demurrer to the petition, and the plaintiff de-
clining to plead further, judgment for defendant was en-
tered, and plaintiff appealed.
1. The first point made in the brief of appellant is that his
authority as public administrator to take charge of the es-
tate of the deceased De La Vergne cannot be questioned in
a collateral proceeding. That is a correct statement of the
law, but that rule of law is not involved in this case. The
defendant is not in this case denying the authority of the
plaintiff to sue for and recover anything that the deceased
De La Vergne left in the way of an estate in Mis.souri, but he
is denying that the stock in the New York corporation of
which he holds the certificates were ever in Missouri, and,
therefore, he says that it does not belong to the ^Missouri ad-
ministrator. It is a question of title to the thing sued for,
not the official character of the plaintiff.
2. It is also -said that the petition charges a conversion of
the stock, and, it is argued, the legal effect of that act was to
474 American State Reports, Vol. 115. [Missouri,
change the character of the asset from stock in the corpora-
tion to a right of action for the tort, and that right of ac-
tion exists where the wrongdoer is found.
It is true the petition charges in general words a conversion
of the stock, but in addition to the general charge it specifies
how the act of conversion was done, and from the specific
averments we find that the only thing the defendant ever
had in his possession was the certificate of the stock, and
what the plaintiff construes to be conversion consists alone in
the refusal of the defendant to deliver to him the certificate
when demanded. There is nothing stated in the petition
from which the inference can be drawn that the defendant
ever made any such use of the certificate as that the ^®* stock
itself was lost to the estate. If the averments in the petition
relied on to constitute a conversion really have that legal
effect, then the conversion would be complete, even though
the fact were that the defendant had delivered the certifi-
cate to the New York administrator, and that fact would be
no defense to this action. Unless, therefore, we are prepared
to hold that, even though the defendant gave the certificate
to the New York administrator (and that fact in the oral
argument was admitted), still he was guilty of conversion
of the stock, we cannot hold that the demurrer to this peti-
tion admits a state of facts on which the defendant would be
liable as for conversion.
3. The real question in this case is, Was this stock in Mis-
souri when De La Vergne died? The certificate was here
and in the hands of the defendant, and that is the only fact
on which the plaintiff relies to sustain his claim. The cor-
poration was in New York.
To the learning and industry of counsel on both sides of
this case we are indebted for an array of all the principal
authorities supporting their respective contentions. We will
not attempt a review of the authorities discussed, but will be
content with citing some of them, referring the inquirer to
the briefs themselves, which will be reported, for further
light.
To the general proposition that the certificate is not the
stock, but the mere evidence of the ownership of the stock,
there is no denial : Cook on Corporations, sec. 485 ; Thomp-
son on Corporations, sec. 2438 ; Armour Bros. B. Co. v. St. Louis
Nat. Bank, 113 Mo. 12, 35 Am. St. Rep. 691, 20 S. W. 690;
June, 1906.] Richardson v. Busch. 475
Caffeiy v. Choctaw Coal Min. Co., 95 Mo. App. 174, 68 S.
W. 1094; Jellenik v. Huron Copper Co., 177 U. S. 1, 20
Sup. Ct. Rep. 559, 44 L. ed. 647.
In Armour Bros. B. Co. v. St. Louis Nat. Bank, 113 Mo.
12, 35 Am. St. Rep. 691, 20 S. W. 690, above cited, this court
laid down the principle which practically settles the law of
this case. In that case the bank held in St. Louis, as custodian
for the owner, certificates of stock in a Texas corporation;
in a suit by attachment against **^ the owner a writ of gar-
nishment was served on the bank aimed to attach the stock ;
the court held that the stock was not attached. The court
rested its decision on two propositions: 1. That our statute
prescribing the mode of serving writs of attachment and gar-
nishment to reach stock in a corporation was intended only
to reach stock in a domestic corporation, and no method
was prescribed for reaching stock in a foreign corporation ;
2. That the stock itself was not within the state although
the certificate was here. In discussing the second proposi-
tion the court, after quoting from some decisions, said: "But
be that right what it may, certificates of stock are not the
stock itself — they are but evidence of the stock ; and the
stock itself cannot be attached by a levy of attachment on the
certificate. As was well said by the supreme court of Pennsyl-
vania: 'Stock cannot be attached by attaching the certifi-
cate any more than lands situated in another state can be at-
tached by an attachnfent in Pennsylvania served on the title
deeds to such land' ": Christmas v. Biddle, 13 Pa. 223. In
that case a man in Mississippi had sent to a bank in Phila-
delphia for sale certificates of stock in a Mississippi corpora-
tion ; in an attachment suit against the owner an attempt was
made to levy on that stock by seizing those certificates, and
the court held that it could not be done, using the language
above quoted.
Our process cannot reach beyond our state boundaries, and,
as suggested in the quotation from the Pennsylvania court,
if our General Assembly should pass an act essaying to au-
thorize the levy of execution on land in another state by
seizing the title deeds that happened to be within our border^,
the act would be unavailing. If the real thing that is sought
to be taken hold of by the process is not in ^lissouri, it is
beyond our reach, and for that reason doubtless our legisla-
ture has never attempted to prescribe a mode for levying an
476 American State Reports, Vol. 115. [Missouri,
attachment on stock in a foreign corporation. *®^ The court,
in Armour v. Bank, above mentioned, was, therefore, not
content to rest the decision alone on the fact that there was
no statute directing a method of attaching stock in a foreign
corporation, but it declared the fundamental doctrine that
the res was not within our borders.
In Jellenik v. Huron Copper Co., 177 U. S. 1, 20 Sup. Ct.
Rep. 559, 44 L. ed. 647, there was the converse of the case
before us; that suit was brought in the United States cir-
cuit court for the western district of Michigan ; the subject
matter of the suit was stock in a ^Michigan corporation, the
owners of the stock and holders of the certificates lived in
Massachusetts, and it was contended that since they were
not within the western district of Michigan, and were per-
sonally beyond the reach of process, the court had no juris-
diction of the case; but it was held that the stock was in
Michigan and the court could there lay its hands on the thing
in controversy, and having done so, it acquired jurisdiction
and could bring the owners in by publication. In its opin-
ion the United States supreme court said: "The certificates
are only evidence of the ownership of the shares, and the
interest represented by the shares is held by the company for
the benefit of the true owner. As the habitation or domicile
of the company is, and must be, in the state that created
it, the property represented by its certificates of stock may
be deemed to be held by the company within the state whose
creature it is, whenever it is sought by suit to determine who
is its real owner. ' '
If the property is not here so that it can be reached by the
process of a court of general jurisdiction, how can it be
taken hold of by a court of limited or special jurisdiction ?
In Re Estate of Ames, 52 Mo. 290, the administratrix had
inventoried the debts due the estate not only in Missouri,
but in Mississippi also, and had, under an order of the pro-
bate court of St. Louis county, sold the whole list. It was
held that the sale was void in so far ^^^ as it attempted to
cover the debts outside of Missouri. The court said: "The
question here, however, is a question of jurisdiction over such
assets after the death of the surviving partner. In such case
fiction gives way to truth, and the real situs can, and must
be, inquired into." For further authorities on this point
we refer to the brief of counsel for respondent.
June, 1903.] Kichardson v. Busch. 477
In our statutes on the subject of the administration of es-
tates of deceased persons there is nothing to indicate a pur-
pose to reach beyond our limits or to authorize an administra-
tion founded on fictitious assets.
Section 292 of our laws of administration declares it to
be the duty of the public administrator "to take into his
charge and custody the estates of all deceased persons ....
in the following cases: .... fourth, when money, property,
papers or other estate are left in a situation exposed to loss
or damage, and no other person administers on the same,"
etc. The word ' ' papers, ' ' used in that clause, refers to papers
which constitute the assets or a part of the assets of the es-
tate; in other words, papers in which there is a property
value. The language is "papers or other estate." It was
not the intention of the lawmakers to authorize the public
administrator to take charge of anything that was not in the
nature of property or assets. If the deceased left nothing
in this state that could be applied to the payment of debts
or to distribution among his next of kin, there is nothing
here to administer.
It is alleged in the petition that debts to a large amount
have been established and allowed against the estate in the
probate court here, but that fact is of no influence at all.
The public administrator would have as much right to take
charge of property or assets here if there were no debts as
he would if there were debts; the interests of the distributees
are as important as those of the creditors. The plaintiff has
added nothing to his case by stating in his petition that debts
have been proven against the estate. His right to adminis-
ter ***" depends, not on what is to be done with the property
at the end of the administration, but on the fact that there
was property or assets in this state belonging to the deceased
at the time of his death.
A certificate that a certain person owns so many shares of
stock in a corporation is but evidence of that fact; it is not
the shares of stock. The thing of value is the stock; the
thing that De La Vergne in his lifetime owned was the stock,
and if that was in New York at the time of his death, it can-
not be made the basis of an administration in this state, even
if our statute essayed to make it so.
If a chattel mortgage is executed on personal property
which is in Kew York, the presence of the paper writing in
478 American State Reports, Vci>. 115, [^Missouri,
this state does not constructively bring the property within
our jurisdiction. In such case, if one holds the mortfjage
here he may thereby acquire an interest in the property, but
to realize the interest he must go into the state where the
property is.
If a cargo of grain is shipped from St. Louis to New York,
the bill of lading may be retained here and may be sold for
value, but the thing sold is not the bill of lading, but the
cargo of grain which it represents, and if that should be de-
stroyed, the only thing that is of property value is destroyed,
though the bill of lading is safe, and if the holder of the
bill of lading is entitled to recover of anyone for the destruc-
tion, it is for the destruction of the grain. But if the bill
of lading should be destroyed, the owner loses no property;
he is only deprived of the best or most convenient evidence
of his title.
The chattel mortgage may be hypothecated and so may the
bill of lading, but the delivery of such a collateral is only a
symbolical delivery of the property which it calls for; so also
it is with a warehouse receipt.
In the case at bar, suppose while this certificate of stock
was in the hands of the defendant it had been **® destroyed
by an accidental fire, and that that was the condition when
the pledgor died, then where was the property? Could a
Missouri administrator have acquired any right to administer
on the stock which was then in New York? Stock in a cor-
poration is the right of the owner to share in the profits of
the operation of the corporation or in the proceeds of its
property. That right may exist in one who has subscribed
and paid for the stock although no certificate has been issued
to him. The situs of the interest is the situs of the corpora-
tion.
The fact that certificates of stock are handled in every-day
commerce and treated as the stock itself does not alter the
fact that it is merely the representative of the stock and the
evidence of ownership.
There may possibly be a value in the certificate itself apart
from the value of the stock which it represents, on the same
theory that there may be a value in the title papers to other
kinds of property apart from the value of the property it-
self to which they relate. But that value is only estimated
in the light of the convenience of such papers as evidexice.
June, 1906.] Richardson v. Busch. 479
If a party wrongfully obtains or retains possession of such
papers, the owner of the property might have his action to
recover their possession or damages for their detention, but
such damages, if recovered, are no part of the value of the
property to which the title papers relate. And no one could
maintain such a suit except the owner of the property. Own-
ership of the title papers is incident only to ownership in
the property.
If this were a suit to recover for the loss or destruction of
the certificate — that is, the title paper to this stock — brought
by the owner of the stock, a different question would arise.
As we understand the theory of the plaintiff's case, he is
seeking to recover, not the mere value of the paper as evi-
dence, but the value of the stock itself; his position is that
the certificate is the stock, but in that he is mistaken; the
stock is in New York, and belongs to **'' the administrator
there. Right to the possession of the title paper is incident
to the ownership of the property.
In the brief for the Missouri- administrator in this case it
is said that "the contention of the New York administrator,
if followed to its logical conclusion, would lead to strange
results," because if, when the Missouri administrator calls
on Mr. Busch to deliver to him the certificate, he could law-
fully refuse to do so on the ground that it belonged to the
New York administrator as an incident to the ownership of
the stock, and if, when the New York administrator made a
like demand he should again refuse, there would be no way
of compelling him to surrender it, because a New York ad-
ministrator could not maintain a suit in Missouri.
Whether if the defendant had refused to deliver the certifi-
cate to the New York administrator, the latter could have
maintained a suit here to recovpr the same we are not called
upon to say in this case. We frequently hear it said that
a foreign administrator, as such, cannot maintain a suit in
the courts of this state. That is true as a general rule, and
is true as applied to the facts of the cases in which that ex-
pression is found in our books; but the language used is not
entirely accurate, and does not express exactly what we mean
in the ordinary use of it; what we really mean to say is
that an administrator appointed in another state does not,
by virtue of his appointment, acquire title to personal prop-
erty which the intestate left at his death in this state. lie
480 American State Reports, Vol. 115. [^lissouri,
cannot maintain a suit here for such property for the simple
reason that he has no title to the. property, not because the
doors of our courts are closed against him, for the doors of
our courts are open to everyone to sue and recover in this
state for anything that belongs to him that is here wrong-
fully detained by another.
Judge Story has said : "And here it may be necessary to at-
tend to a distinction important in its nature ^*® and conse-
quences. If a foreign administrator has, in virtue of his ad-
ministration, reduced the personal property of the deceased,
there situated, into his own possession, so that he has acquired
the legal title thereto according to the laws of that country, if
that property should afterward be found in another country,
or be carried away and converted there against his will, he
may maintain a suit for it there in his own name and right
personally, without taking out new letters of administration;
for he is, to all intents and purposes, the legal owner there-
of, although he is so in character of trustee for other per-
sons": Story on Conflict of Laws, 8th ed., sec. 516.
A man owns a farm just across our line in Kansas, on
which he has a herd of cattle; he dies and an administrator
is appointed and qualified in Kansas, and takes possession
of the estate; the legal title to the herd of cattle vests in the
Kansas administrator, but some one leaves the gate open
and the cattle stray across the line into Missouri, and some
one here takes possession of them — does the act of the cattle
in straying across the line extinguish the title of the Kansas
administrator, or are the doors of our courts closed against
him if he seeks to recover his own? That question is not
in this case, nor is the New York administrator here suing
Mr, Busch for the possession of the certificates, so we need
not say what we would do if the New York administrator
had been compelled to sue here for possession of these certifi-
cates.
Our conclusion is, that the stock was never in Missouri;
therefore, the Missouri administrator never acquired any title
to it. The judgment is affirmed.
All concur, except Lanun, J,, who dissents.
Stock Certificates are said to be mere evidences of the ownership of
shares: Cartwright v. Dickinson, 88 Tenn. 476, 17 Am. St. Eep. 910.
July, 1906.] Matlock v. Williamsville etc. Ry, Co. 481
For Purposes of Administration, the situs of a certificate of stock
belonging to the decedent is in the state where the corporation was
organized and has its principal place of business: Grayson v. Kobert-
son, 122 Ala. 330, 82 Am. St. Eep. 80; Murphy v. Crause, 135 Cal.
14, 87 Anu St. Eep. 90.
MATLOCK V. WILLIAMSVILLE, GREENVILLE AND
ST. LOUIS RAILWAY COMPANY.
[198 Mo. 495, 95 S. W. 849.]
NEGLIQENCE — Death of Minor Child — Emancipation. — The
right of a parent to recover for the negligent killing of his minor
son in no way depends upon the fact of the emancipation of the
son prior to his entering into defendant's employment. The right
to recover does not depend upon the services which the deceased
could have rendered to his father, (p. 483.)
NEGLIGENCE —Death of Minor Child — ^Misrepresentation of
Age — Eight of Parent to Eecover. — If a minor child is negligently
killed by his employer, the fact that he misrepresented himself to be
of age in order to obtain the employment, and that his employer
accepted him, relying upon his representations, does not bar a suit
by the minor's parent to recover the damages provided by statute
for the negligent killing of a minor child, (p. 484.)
NEGLIGENCE — Injury to Minor Child Employ 6 — Misrepre-
sentation as to Age. — Although a minor child applying for employ-
ment misrepresents himself to be of age, and such representation
is believed and relied upon by his employer, such facts do not bar
the minor from recovering for injury negligently inflicted upou
him by his employer, (p. 484.)
NEGLIGENCE — Injury to Minor Child Employfii — Misrepre-
sentation of Age — Estoppel to Recover. — Although a minor child ap-
plying for employment misrepresents himself to be of age, and such
representation is believed and relied upon by his employer, other-
wise he would not have been given employment, these facts do
not bar by estoppel in pais the right of either the minor employ^
or of his parent to recover for injury inflicted through negligence upon
such minor by his employer. The action is one of tort, and does not
arise out of a violation of contractual relations, (pp. 484, 485.)
0. L. Munger and C. M. Hay, for the appellant.
Gamble, Petherbridge & Taylor, for the respondent.
'•»« GANTT, J. This is an action brought by Jason L.
Matlock against the defendant railway company for damages
to the amount of five thousand dollars, under section 2864
of the Revised Statutes of 1899, for the killing of plaintiff's
minor son.
Am. St. Eep., VoL 115—31
482 American State Reports, Vol. 115. [Missouri,
^"^ The deceased was at the time of his death eighteen
years and eight months old, and unmarried. The plaintiff
is his sole surviving parent. The defendant is a railroad
company owning and operating a line of railroad in Wayne
county, Missouri. Deceased at the time of his death, and for
two weeks prior thereto, was in the employ of the defend-
ant company as a brakeman on a log train running out to
the woods from Greenville. While at his post of duty on
said train on the twenty-fourth day of April, 1901, he was
killed, and this action is instituted for the damages arising
to his father from his death.
There was evidence tending to show that the death of the
son of plaintiff was the result of negligence and unskillful-
ness of the defendant's conductor in charge of the train,
but it is unnecessary to set forth the evidence on this point,
for the reason that the only point alleged by plaintiff on
this appeal is the alleged error of the court in giving the fol-
lowing instruction: "The court instructs the jury that if you
believe from the evidence that the son of plaintiff fraudu-
lently represented himself to be twenty-one years of age in
order to secure employment as a brakeman on defendant's
railroad, and further find from the evidence that prior to
his employment on the railroad, plaintiff had permitted him
to be employed by the lumber company at Greenville, and had
permitted him to receive his wages for such work without
objection, and if you further find the defendant's superin-
tendent believed the statement and representation of said
son of plaintiff that he was of age, and further find that plain-
tiff learned of such before the death of his son and made no
objection to said employment by defendant railroad com-
pany, then in that event the plaintiff is not entitled to re-
cover. ' '
There was evidence tending to prove that the deceased Jason
Matlock did represent himself to be *^^ twenty-one years
of age for the purpose of securing employment from the de-
fendant railroad, and that this representation was believed
by the defendant's superintendent. There was also evidence
that, prior to his employment by the defendant, the deceased
worked for the Holliday-Klotz Land and Lumber Company,
and received a greater part of his wages therefor without
any objection on the part of his father, the plaintiff herein.
July, 1906.] Matlock v. Williamsatille etc. Ry. Co. 483
There was evidence also that the plaintiff learned of his son's
employment as brakeman about four or five days before the
latter 's death, and in the interim made no objection to the
same.
This action is predicated on section 2864 of the Revised
Statutes of 1899, which provides that : * * Whenever any per-
son shall die from any injury resulting from or occasioned
by the negligence, unskillfulness or criminal intent of any
officer, agent, servant or employe whilst running, conducting
or managing any locomotive, car or train of cars, .... the
corporation, individual or individuals in whose employ any
such officer, agent, servant .... or employe shall be at the
time such injury is committed, or who owns any such locomo-
tive .... at the time any injury is received resulting from or
occasioned by any .... unskillfulness, negligence or crim-
inal intent above declared, shall forfeit and pay for every
person so dying the sum of five thousand dollars, which may
be sued for and recovered, .... if such deceased be a minor
and unmarried, .... by the father and mother, who may
join in the suit, .... or if either of them be dead, then by
the survivor."
1. It is obvious that by this instruction the court directed
the jury to pass upon issues entirely separate from the ques-
tion of negligence charged in the petition, and made it pos-
sible for the jury to reach a verdict against the plaintiff
without taking into consideration any other testimony than
that bearing directly upon the questions of misrepresentation
as to his age by the '**** deceased or his emancipation by the
plaintiff. If the jury believed that the plaintiff had in legal
effect emancipated his son, and that the deceased had falsely
represented himself to the defendant superintendent to be
twenty-one years old for the purpose of securing employ-
ment, then the plaintiff could not recover, whatever the jury
might have found as to the defendant's conduct toward the
deceased. The issue of negligence was practically eliminated
from the case. That this instruction, in so far as it was
predicated upon the emancipation of plaintiff's son by the
plaintiff as a defense to this action, was erroneous, was set-
tled by this court in Philpott v. Missouri Pac. Ry. Co., 85
Mo. 164. The right to recover is not made to depend upon
services which the deceased could have rendered to his father.
484 American State Reports, Vol. 115. [Missouri,
As said by Judge Black in the Philpott case, the statute, as
well as being compensatory, is also of a penal and police na-
ture: King V. Missouri Pac. Ry. Co., 98 Mo., 235, 11 S. W. 563.
Did the misrepresentation that the plaintiff's son was
twenty-one years old bar the father's action? The established
rule in this state is that the act under which this suit is
brought was designed to transmit a right of action which but
for the section would have ceased to exist or would have died
with the person ; that is, when a person dies from one of the
acts defined in the statute which would have entitled such
person to sue had he lived, such cause of action may be main-
tained by certain representatives of the deceased notwith-
standing the death of the party receiving the injury: Proctor
V. Hannibal & St. J. R. Co., 64 Mo. 112. The right to bring
an action of this sort is founded upon the relation of parent
and child, and not that of master and servant. It is the right
of the father in this case to recover damages which his son
might have recovered had he survived the injury: Hennessy
V. Bavarian Brewing Co., 145 Mo. 104, 68 Am. St. Rep. 554,
46 S. W. 966, 41 L. R. A. 385. The large question, then, in-
volved in this proposition is, Would the plaintiff's son have
been barred from recovery had ^^*^ he survived the accident ;
in other words, will the fact that a minor applicant for em-
ployment untruthfully represents himself to be of age in or-
der to secure employment and such representation is believed
by his employer, bar him from recovering from any and all
injuries which his employer negligently may inflict upon him?
Will the employer be hej^rd in a court of justice to say that
his negligence only injured the boy when he thought he was
injuring a man? It may be conceded, for the sake of argu-
ment, that the boy, owing to his representation that he is a man,
is only entitled to a man's protection and not to the higher
duty which his employer would owe to a minor, but surely it
cannot be said that the boy, despite his misrepresentation, is
not entitled to some protection. Upon what principle can it
be said that if the master, on account of his negligence, would
be liable to his servant if he was a man, he should entirely
escape all liability because his servant was only a boy, and
had represented himself to be a man? If the defendant had
no right negligently to kill a man, certainly it had no right
to kill a boy by the same negligence because it believed him
to be a man. But the contention is that if the plaintiff's son
July, 1906.] Matlock v. Williamsville etc. Ry. Co. 485
had been an adult, the statute would give no right to the
plaintiff, his father, to recover, and owing to the misrepresen-
tation, the plaintiff is estopped from asserting that his son
was a minor. Bluntly stated, then, this contention would
amount to this: if the defendant had known that plaintiff's
son was a minor, it would not have employed him, because it
could not then have negligently killed him without being lia-
ble over to his parent.
The exemption claimed rests only on a plea of estoppel.
To constitute an estoppel in pais there must be, first, a repre-
sentation inconsistent with the evidence proposed to be given
or the claim off'ered to be set up ; second, action by the other
party upon such statement; third, an injury to the party
acting upon the representation ^'^^ by allowing the represen-
tation to be disproved. All that the misrepresentation of the
deceased led defendant to do was to employ him as a servant.
It is not asserted that the boy in any way did not faithfully
perform his contractual duties. No breach of his contract
is involved in this case. It is an action of tort. At common
law, * ' even the fact that the other party was induced to enter
into the contract by the infant's misrepresentation that he
was of age would not estop the infant from afterward re-
pudiating it, though he might be liable in tort for his fraud":
16 Am. & Eng. Ency. of Law, 2d ed., 291, 292. Conceding
that defendant would not have employed plaintiff's son if he
had not misrepresented his age, and that it acted upon his
representation and employed him and put him to work as an
adult, still this will not meet the contention of defendant or
justify the instruction, because defendant can only assert that,
relying upon the minor's misrepresentation, it proceeded to
do some act which was lawful for it to do, not that it pro-
ceeded negligently to kill the boy, as it would have no right to
kill a man servant negligently. Moreover, this is the father's
action, and he did nothing to estop him.
We are of opinion that the instruction was bad on both
propositions — that of emancipation and of misrepresentation.
Neither affords defendant any exemption for the negligence
alleged if it was guilty of it. It follows that the giving of this
instruction was an error for which the judgment must be and
is reversed.
The defendant's brief is devoted almost wholly, if not en-
tirely so, to the insufficiency of the plaintiff's abstract. We
486 American State Reports, Vol. 115. [Missouri,
ruled on those matters orally. "We repeat that the only ob-
jection made by defendant to the abstract in the first instance
was the failure to index it. Plaintiff supplied that before
the motion was heard and that motion was overruled. Plain-
tiff, then, of his own motion supplied other defects. The sub-
sequent assaults on the abstract were wholly out of time, and
we '^''^ see no reason for changing our rulings on the suffi-
ciency of the abstract, though we in no manner approve of the
style of it.
Judgment reversed and cause remanded.
Burgess, P. J., and Fox, J., concur.
The Emancipation of Infants is the subject of a recent note to Vance
V. Calhoun, 113 Am. St. Eep. 113.
The Effect of an Infant Misrepresenting his Age on his right to
avoid his contract on the ground of infancy is considered in the note
to Craig v. Van Bebber, 18 Am. St. Eep. 633.
One Who Employs a Minor, knowing him to be such, in a dangerous
business, without the father's consent, becomes liable to compensate
the father for any loss of the son's services during minority, which
may result from an injury suffered in that business; and no ques-
tion of contributory negligence, or as to whether the injury resulted
from the negligence of the minor's fellow-servants, can arise in such
case: Texas etc. By. Co. v. Brick, 83 Tex. 526, 29 Am. St. Eep.
675.
KLAUBER V. SCHLOSS.
[198 Mo. 502, 95 S. W. 930.]
FEAUDULENT CONVEYANCES— Solvency of Vendor.— If
a transfer of property is made with intent to hinder or delay creditors,
it is fraudulent as to them, whether or not the vendor is insolvent
at the time of the transfer, (p. 493.)
FEAUDULENT CONVEYANCES— Fraudulent Vendee.— If a
deed of trust is given to secure a pretended debt, to the knowledge of
the vendee, he, by accepting the provisions of the deed, becomes a
party to the fraud, (p. 493.)
FEAUDULENT CONVEYANCES— Considerati<m.— If a deed
of trust is made with actual intent to hinder, delay or defraud
creditors, and the cestui que trust knows of the purpose for which
the transfer is made and is a party thereto, the deed is void
as to such creditors of the vendor, regardless of the consideration
for such deed, whether adequate or inadequate, (p. 493.)
FEAUD — Presumption — Proof. — While fraud is never presumed
and must be proved, it is not necessary that it be proved by direct
evidence, and it may be shown by sufficient facts and circumstance*
connected with and surrounding the transaction, (p. 493.)
July, 1906.] Klaubeb v. Schloss. 487
FRAUDULENT CONVEYANCES — Fictitious Consideration. —
If part of the consideration for a conveyance of property is fraudulent
or fictitious, the entire transaction is fraudulent as against creditors,
and will be set Aside, (p. 494.)
C. F, Schneider, for the appellants.
L. W. Grant and P. B. Kennedy, for the respondent.
»«» BURGESS, P. J. On the twenty-fourth day of Decem-
ber, 1902, there was filed in the office of the clerk of the circuit
court of the city of St. Louis a petition by plaintiff, which,
leaving off the formal parts, is as follows :
"Plaintiff for cause of action states that heretofore, to wit,
on or about the ninth day of November, 1899, he signed and
executed as surety for Stephen Schloss, defendant, a certain
appeal bond in an appeal from a judgment rendered against
said Stephen Schloss by Frederick A. Cline, a justice of the
peace in and for the ninth district of the city of St. Louis,
Missouri; that by reason of said contract of suretyship plain-
tiff was compelled to pay, and did pay, said judgment and
costs, all amounting to $227, for which said amount he recov-
ered judgment against the said Stephen Schloss, on or about
the tenth day of May, 1902, in the justice court in and for
the fifth justice district of the city of St. Louis, Missouri,
before James T. Spaulding, justice.
"Plaintiff further states that heretofore, to wit, on or
about the twenty-seventh day of January, 1896, defendant
**® Schloss was the owner in fee simple of the following de-
scribed real estate, situated in the city of St. Louis, Missouri,
to wit : A lot of ground in block 38, beginning at the intersec-
tion of the north line of Valentine street with the west line of
a public alley running north and south through said block;
thence north along the west line of said alley 86 feet; thence
west and parallel with Valentine street 42 feet 6 inches to the
east line of a private alley, thence south along the east line
of said private alley 86 feet to the north line of Valentine
street; thence east along the north line of Valentine street 42
feet 6 inches to place of beginning, together with all build-
ings, appurtenances, etc.
"That on or about the said twenty-seventh day of January,
1896, the said Stephen Schloss conveyed said property as
hereinbefore described to defendant August Gehner, in trust,
to secure an indebtedness of $1,300, to one Frank Hiemenz;
488 American State Reports, Vol. 115. [Missouri,
that thereafter, to wit, on or about the sixteenth day of July,
1901, said Stephen Sehloss executed a second deed of trust to
the Missouri Trust Company, to secure an alleged indebtedness
of $5,000 to defendant Veronicka Braske.
"Plaintiff further states that on or about the eighteenth
day of September, 1902, defendant August Gehner, acting
under and by virtue of said first deed of trust, sold the said
property at public sale and said property was bid in by de.
fendant Veronicka Braske for the sum of $3,800; that said
Veronicka Braske has failed and refused, and still refuses, to
complete said sale by paying the full sum of $3,800 to said
August Gehner, unless she can get credit for the amount of
the surplus of said $3,800 over and above so much as may be
required to pay off the indebtedness of $1,300 on said first
deed of trust, together with such costs and interest as may
have accrued, on her second deed of trust.
"Plaintiff further alleges that said second deed of trust
on said property hereinbefore described, executed to secure
an alleged indebtedness to defendant '*^'' Veronicka Braske,
was fraudulent and without consideration and given by de-
fendant Sehloss for the purpose of avoiding liability on said
judgments of Justice Cline and the appeal bond executed
therein, and for the purpose of defrauding the plaintiff in
that said case, to wit, the Drayage Transfer Company, and
defeat the payment of said judgment by him, and for the
further purpose of defrauding this plaintiff by compelling
him to pay the said judgment of Justice Cline against said
Sehloss.
"Plaintiff further states that both defendant Sehloss and
Veronicka Braske are insolvent; that he is without remedy at
law, and except by the interposition of a court of equity he
must remain totally remediless in the premises and his said-
judgment must remain wholly unpaid.
"Wherefore, plaintiff prays for a decree directing that in
the event that defendant Veronicka Braske completes said
sale and pays said Gehner said sum of $3,800, said Gehner
be required, after paying such amount as may be required to
discharge the indebtedness of said first deed of trust and
expenses of the sale, to pay into court so much of the surplus
as may be necessary to pay plaintiff's judgment and costs, as
well as the costs of this suit, or, should said Veronicka Braske
fail to complete said sale and pay said sum of $3,800 to trustee
July, 1906.] Klauber v. Schloss. 489
An^st Geljner, then plaintiff prays for a decree declaring
said second deed of trust inoperative and void as fraudulent
and without consideration, and for an order that said prop-
erty be sold by order of this court, subject to the first deed of
trust and the proceeds of said sale, or so much thereof as
may be necessary to be applied to the payment of plaintiff's
said judgment and costs, as well as the costs of this suit, and
such other and further relief as the court may deem meet
and just in the premises and the circumstances of the case
may require."
508 gy jjjig amended separate answer defendant Schloss de-
nied generally the allegations of plaintiff's said petition.
The answer of defendant August Gehner is as follows :
"That on or about the twenty-seventh day of January, 1896,
the property mentioned, referred to and described in the peti-
tion, was conveyed to him, as trustee, to secure an indebt-
edness of $1,300 to one Frank Hiemenz, and duly recorded in
the office of the recorder of deeds for the city of St. Louis,
Missouri.
"Further answering, this defendant denies each and every
other allegation in said petition contained."
Defendant Veronicka Braske answered, admitting that on
the twenty-seventh day of January, 1896, the property in
question was conveyed to her codefendant, August Gehner, in
trust, to secure an indebtedness of $1,300 to one Frank Hie-
menz ; that thereafter, to wit, on or about the sixteenth day of
July, 1901, said property was conveyed to the Missouri Trust
Company as trustee, to secure to her the sum of $5,000, as
per negotiable promissory note in said deed of trust men-
tioned and described. This answer charges that both said
deed of trust and. the indebtedness secured thereby remain
due and unpaid, and are a lien on said property. It then de-
nies all other allegations in the petition.
Upon the hearing of the cause the court made a finding of
facts and rendered the following judgment and decree:
"Now upon this nineteenth day of May, A. D. 1903, this
cause having come on for hearing on the pleadings and proofs
adduced, parties plaintiff and defendant appearing, and the
court having been duly advised in the premises, and having
duly considered the same, doth find the issues joined in favor
of the plaintiff; and the court doth further find that de-
fendant Stephen Schloss is indebted to plaintiff on his said
i
490 American State Reports, Vol. 115. [Missouri,
judgment as alleged in his bill in the sum of $227.20, and
'^**® costs in said case accrued amounting in all to $269.40,
none of which has been paid, and the court doth further find
that said deed of trust executed and recorded by defendant
Stephen Schloss, on or about the sixteenth day of July, 1901,
to secure a pretended indebtedness of $5,000 to defendant
Veronicka Braske was fraudulent and void as against this
plaintiff.
"Whereupon, it is by the court ordered, adjudged and de-
creed that the said deed of trust executed aforesaid be set aside
and for naught held, and the same is hereby declared nuga-
tory and of no effect, and it is further ordered, adjudged and
decreed that in the event that the defendant Veronicka Braske
fully perform the contract of purchase of said property here-
tofore made with defendant August Gehner, trustee, by pay-
ing the full amount of the purchase price to said defendant
Gehner within ten days from the date of the entry of this
decree, said Gehner, after satisfying the indebtedness secured
by the first deed of trust, together with the costs incident
thereto, is hereby directed and ordered to apply the surplus
remaining in his hands, first, to the payment of plaintiff's
said judgment and costs, together with the costs of this suit,
and the remainder of said purchase price, if any there be,
to be disposed of by said defendant Gehner as the parties in
interest may direct.
**It is further adjudged, ordered and decreed that in the
event said defendant Veronicka Braske fails to fully perform
the said contract of purchase made with said defendant Au-
gust Gehner, within ten days from the entry of this decree,
then said purchase by Veronicka Braske be and hereby is de-
clared abandoned, forfeited and nugatory, and the sheriff of
the city of St. Louis is hereby ordered and directed to sell
said property at the courthouse door, in the city of St. Louis,
after giving twenty days' notice in some newspaper published
in said city, said property to be sold subject to the first deed
of trust, executed to defendant Gehner; ***** and the said
sheriff of the city of St. Louis is further ordered and directed
to apply the proceeds of said sale to the payment of plaintiff's
said judgment and costs, together with the costs of this suit
and dispose of the residue of said proceeds as the parties in
interest may direct."
July, 1906.] Klaubee v. Schloss. 491
In due time defendants filed motions for a new trial and in
arrest, and both being overruled, they appeal.
The salient facts as disclosed by the record are substantially
as follows:
Sometime in November, 1899, defendant Stephen Schloss
was involved in a lawsuit with the Draj'-age Transfer Com-
pany, which suit was tried before a justice of the peace, who
rendered judgment against Schloss. He appealed from the
judgment, and Klauber, the plaintiff herein, at the request
of Schloss, became his surety on the appeal bond required by
the justice; but after the appeal was perfected Schloss aban-
doned the case, the consequence being that Klauber was com-
pelled to make the best settlement he could with the said
Drayage Transfer Company. Klauber sued Schloss for the
amount paid out by him in the settlement of said suit, and
Schloss filed a counterclaim for a certain sum growing out
of former business transactions between them, but Klauber
recovered judgment against Schloss for $227 and costs, upon
which judgment execution was issued and returned nulla
bona.
On July 16, 1901, Schloss executed to defendant Veronicka
Braske a deed of trust on certain property on Valentine street,
St. Louis, to secure an alleged indebtedness of $5,000, and
this suit is for the purpose of attacking and having declared
as fraudulent, as against plaintiff, said deed of trust.
It also appears from the evidence that there was a prior
deed of trust for $1,300 on said property, and that the prop-
erty was worth approximately $3,500 or $4,000. The testi-
mony of defendant Braske was very **^ vague and indefinite
with respect to what Schloss owed her. In fact, she could
not fix any amount, saying that she gave Schloss, at different
times, $50, $75, $25, and $100 ; total, $250. She still said she
gave him "over $900," but that she made no memorandum of
it and kept no record, but relied upon the deed of trust as
security. Testifying further, she said that the understand-
ing was that she was to get the property ultimately, and would
not be required to account to Schloss for any sum; that she
kept no account whatever, could not tell what amounts had
been loaned, and that if it came to a settlement between them,
she would have no record of what was due her. It appears
further in the evidence that Schloss had been using this prop-
492 American State Reports, Vol. 115. [Missouri,
erty so as to secure credit on an apparent asset, and when he
wished to avoid liability he transferred or mortgaged it. In
1882 he conveyed the property to his wife, and they subse-
quently executed a deed of trust thereon to defendant Gehner.
His wife having died, he then executed a deed of trust on
the property to secure the $5,000 indebtedness alleged to be'
due defendant Braske.
It also appears that Schloss at divers times stated that the
property was his, and that he could get it back at any time;
that the deed of trust was only a matter of form, and that
he had executed it to keep the man Henzler (president of
the drayage company) from getting anything from him ; that
the note was signed to keep people from running after him,
but that the property was his own. Defendant Schloss was
in the scrap-iron business at No. 117 Valentine street, and he
and defendant Braske lived at that place, and, according to
Braske's story, she kept the store for him, and he was to pay
her $10 per week. She testified that she had $1,500, which
she had received from the old country; that she had sold a
store in Chicago and got about $1,200 ; but when closely exam-
ined, she could not tell how much she had given Schloss ; and
it appears, also, that she ^^^ ran the business, and when she
sold anything from the store she kept the money, and when he
sold anything he kept the money, and they put it together
at the end of the day, and she would take it to her room up-
stairs.
The evidence of defendant Schloss bore principally upon his
alleged claim against Klauber through a dispute in the sale
of some iron. The evidence of witness Jacob was to the effect
that Schloss had said a number of times that the property was
his; that he simply put it in the name of defendant Braske
to keep the drayage company and other parties from running
after him; that he could get the property back whenever he
wanted it, and that he promised a number of times to begin
paying Klauber the money he owed him. Witness Klauber
testified to much the same thing, and witness Girardi corrob-
orated both of them relative to this statement of Schloss.
It is claimed by defendant that the petition does not state
a cause of action, in that it does not allege that defendant
Schloss, at the time the deed of trust was given to defendant
Braske, was insolvent, nor that Braske procured said deed of
trust by fraud on her part. It was ruled by this court in
July, 1906.] Klaubeb v. Schloss. 493
Rupe V. Alkire, 77 Mo. 641, that if a sale of property be made
with the intent either to hinder or delay creditors, it is
fraudulent as to them, whether the vendor be solvent at the
time of such sale or not. With respect to the other contention,
it is only necessary to call attention to the allegations of the
petition, which substantially allege that the deed of trust exe-
cuted for the benefit of defendant Braske was executed for
the purpose and with the intent to defraud the creditors of
Schloss.
The court found that the deed of trust given by Schloss
was given to secure a pretended indebtedness of $5,000 to
defendant Braske, and was fraudulent and void as against the
plaintiff. There was evidence which justified that finding.
The debt being pretended and not bona fide, she, of course,
knew it, and by accepting ^*^ the provisions of the deed, she
became a party to the fraud. In passing upon this ques-
tion, it will be noted that Schloss and Braske lived in the same
building, and practically operated the store together, the pro-
ceeds of each day's sales being taken charge of by her. Ac-
cording to her own testimony, she never received a dollar
from Schloss on account of salary or her alleged loan. Under
the facts disclosed by the evidence, there can be no conclusion
other than that the deed of trust under consideration was
made with the actual intent on the part of Schloss to hinder,
delay or defraud his creditors, and especially this plaintiff,
and that Braske knew all about the transaction, and was a
party thereto. Such being the case, the deed is void as to
said creditors, and it makes no difference what the considera-
tion really was, or whether it was adequate or not.
While fraud is never to be presumed, it is not necessary
that it be proved by direct testimony, but may be shown by
facts and circumstances, if sufficient; and the facts and cir-
cumstances connected with and surrounding the transaction
may be inquired into and taken into consideration by the
court in passing upon the question as to whether the transac-
tion was in fact fraudulent.
At the time the deed of trust was executed defendant
Braske had worked for Schloss six or seven months, at $10 per
week, the wages thus earned amounting to about $280, while
the deed of trust was given to secure a pijetended indebted-
ness of $5,000. But conceding that Schloss owed her $280
for labor, as well as the various sums which she claims in her
494 American State Reports, Vol. 115. [Missouri,
evidence to have loaned him at different times, and of which
she kept no memorandum, the whole falls far short of $5,000.
Her story with respect to Schloss' indebtedness to her, the
manner in which it accrued, and the amounts and times,
seems so improbable that it is not entitled to much consid-
eration. Moreover, it is clear from the evidence that '**'* at
least part of the claim attempted to be secured by the deed of
trust under consideration was fictitious, as Schloss' indebted-
ness to Braske at no time approximated $5,000, and it is well
settled that if a part of the consideration for a conveyance of
property is fraudulent or fictitious, the entire transaction is
fraudulent as against creditors, and will be vitiated: State v.
Hope, 102 Mo. 410, 14 S. W. 985 ; National Tube Works Co. v.
Ring etc. Machine Co., 118 Mo. 365, 22 S. W. 947 ; Boland v.
Ross, 120 Mo. 208, 25 S. W. 524 ; Gleitz v. Schuster, 168 Mo.
298, 90 Am. St. Rep. 461, 67 S. W. 561 ; First Nat. Bank v.
Fry, 168 Mo. 492, 68 S. W. 348 ; Imhoff v. McArthur, 146 Mo.
371, 48 S. W. 456; Bates County Bank v. Gailey, 177 Mo.
181, 75 S. W. 646.
Finding no reversible error in the record, the judgment is
affirmed.
All concur.
When a Person Purchases Property from a Debtor in failing circum-
stances, three things must usually concur to protect his title: 1. He
must buy without notice of the fraudulent intent on the part of
the vendor; 2. He must be a purchaser for a valuable consideration;
and 3. He must pay the purchase money without knowledge of the
fraud: See the note to State v. Mason, 34 Am. St. Eep. 395.
If a Deed is in Fraud of a Judgment Creditor of the grantor, and
both he and the grantee participate in the fraud, the grantee, as
against the judgment creditor, is not entitled to protection to the
extent of the consideration paid for the property: Biggins v. Lambert,
213 111. 625, 104 Am. St. Rep. 238, And if children who receive
a conveyance from their father for an alleged debt are conscious
that a portion of the debt is fictitious, they are chargeable with
the fraudulent purpose of their father, and the whole transaction
is void as to creditors: Gleitz v. Schuster, 168 Mo. 298, 90 Am. St.
Rep. 461.
Oct. 1906.] 0 'Connor v. St. Louis Transit Co. 495
O'CONNOR V. ST. LOUIS TRANSIT CO]\IPANY.
[198 Mo. 622, 97 S. W. 150.]
CONSTITUTIONAL LAW— Subject and Title of Statutes.— If
all the provisions of a statute fairly relate to the same subject, have a
natural connection with it, and are the incidents or means of ac-
complishing it, the subject is then single, and, if sufficiently expressed
in the title, the statute is valid, (p. 498.)
CONSTITUTIONAL LAW— Subject and Title of Stetutes.—
A statute entitled, "An act to prevent frauds between attorneys,
clients, and defendants; making agreements between attorney and
client a lien upon the cause of action," and providing for an at-
torney's lien upon his client's cause of action, stating the nature
and character of the contract authorized to be entered into between
attorney and client and made the basis of the lien, providing for
notice and other incidents for making such lien effective, and that
defendant who ignores such notice and lien and settles with the
client without the attorney's consent shall be liable to such attorney
for his interest in the litigation according to the contract, contains
no provisions which do not clearly relate to the same subject, have a
natural connection with it, are the incidents or means of accomplish-
ing it, clearly germane to subject expressed in the title, and such
statute is constitutional and valid, (p. 499.)
CONSTITUTIONAL LAW— Title of Statutes.— A statute can-
not be declared unconstitutional for the reason that it fails to clearly
express the subject by its title, unless it clearly violates that com-
mand of the constitution, and the mere generality of the title will
not vitiate the statute unless such title is of such nature as to com-
pel a conviction that it was designed to mislead aa to the subject
dealt with. (p. 503.)
CONSTITUTIONAL LAW — Special Laws — Class Legislation. —
A statute undertaking to cover a certain class of persons engaged in a
particular profession, as attorneys at law, but which does not under-
take to select any particular person in that class, and applies to all
alike who fall within such class, is not unconstitutional as special or
class legislation, (p. 504.)
CONSTITUTIONAL LA W— Attorney s ' Liens— Eight to Con-
tract.— Statute simply creating a lien upon causes of action in favor
of attorneys at law, and requiring defendants in actions, after due
notice of such lien, to respect it, is not unconstitutional as restricting
or destroying the defendant's right to contract, (p. 505.)
ATTORNEYS' LIENS— Action to Enforce.— A statute creat-
ing a lien upon causes of action in favor of attorneys at law, and
requiring defendants in such actions after due notice of such lien,
to respect it, does not deprive a defendant of the right to settle
his suit, but it does require him, in making such settlement, to take
into consideration the existence of such lien, and if he ignores it
and settles the suit without the consent of the attorney, he is
liable in a separate action at law brought by such attorney, for
the amount of such lien. (p. 506.)
APPELLATE PRACTICE— Exceptions — Finding of Facts. —
If the bill of exceptions on an appeal, or abstract of record in lieu
thereof, discloses no objections or exceptions to the failure of the
trial court to make a finding of facts, the trial court was not in error
in failure to make such finding, especially when it is admitted hy
th« appellant that there was no dispute about the facts, (p. 508.)
496 American State Reports, Vol. 115. [Missouri,
G. W. Easley and Boyle & Priest, for the appellant.
J. B. Dempsey, for the respondent.
®*® FOX, J. This cause is brought to this court by appeal
from a judgment of the circuit court of St. Louis in favor
of the plaintiff and against the defendant for forty-one dol-
lars and sixty-six cents.
This action was commenced before a justice of the peace
of the city of St. Louis. The statement, filed by plaintiff be-
fore the justice, alleged that he was an attorney and coun-
selor at law; that defendant was a corporation, operating a
street railway, and that on or about the thirtieth day of June,
1902, one Emma French sustained injuries to her person
while alighting from one of defendant's cars, which she al-
leged to be due to the negligence of defendant's servants in
charge of said car, whereby she became the "possessor of a
subsisting claim and cause of action for ten thousand dollars
damages." That thereafter, on the eighth day of August,
1902, said Emma French entered into a written contract with
this plaintiff, employing and instructing him to enter and
prosecute an action in her favor for said ten thousand dollars
damages against defendant, and that Mrs. French agreed that
plaintiff should receive for his services for entering and prose-
cuting said action one-third of all of any sum of money that
should be recovered in said suit, or by or through any com-
promise of said suit, without regard to the time at which
said compromise should be made. That on the ninth day of
August, 1902, plaintiff entered an action at law in favor of
said. Mrs. French on her alleged cause of action. That there-
after, on the third day of November, 1902, plaintiff served
notice in writing of said contract of employment by Mrs.
French, and that said action had been instituted in the circuit
®^* court of St. Louis, Missouri, also showing the proportion
of the recovery that plaintiff was to receive, either by suit
or compromise of the same; and further alleged that, on the
twenty-fifth day of November, 1902, Mrs. French and the de-
fendant herein, without the knowledge or consent of this
plaintiff', compromised said action, and the said claim on
which said action was based for the sum of one hundred and
twenty-five dollars, which sum was paid to Mrs. French by the
defendant, and said Emma French then and there entered
Oct. 1906.] O'Connor v. St. Louis Transit Co. 497
into a stipulation for the dismissal of said cause at her costs,
which said stipulation defendant filed in said court, and the
prosecution of said cause was dismissed, wherebj'^ plaintiff has
been deprived of his fee; the insolvency of Emma French is
alleged and judgment is prayed under the act of February
25, 1901. A suit was brought for the recovery of the sum of
forty-one dollars and sixty-six cents. The trial before the
justice resulted in a judgment for forty-one dollars and sixty-
six cents in favor of the plaintiff, from which judgment the
defendant appealed by filing an affidavit and bond within the
time required, and the cause was tried de novo in the circuit
court on May 5, 1903.
There is no necessity for reproducing the evidence intro-
duced at the trial of this cause in the circuit court, for appel-
lant admits in its brief that the evidence preserved in the bill
of exceptions substantially sustains the averments of the
plaintiff's statement of this case, and there are no disputed
facts in the case.
Upon the submission of the cause to the court there was a
finding and judgment for the plaintiff in the sum of forty-
one dollars and sixty-six cents. Motions for new trial and in
arrest of judgment were timely filed and were by the court
overruled. From this judgment defendant prosecuted its
appeal to this court, and the record is now before us for con-
sideration.
®*^ It is apparent from the record in this cause that the
trial court made the order granting the appeal to this court,
for the reason that defendant challenges the constitutionality
of the act upon which this proceeding is predicated. The con-
tentions of appellant upon this constitutional question may
thus be briefly stated:
1. That the act of February 25, 1901, upon which this ac-
tion is based, is unconstitutional and void because in contra-
vention of article 4, section 28, of the constitution of Missouri,
which substantially provides that no act shall contain more
than one subject, which shall be clearly expressed in the title.
2. It is insisted that said act of February 25, 1901, is con-
trary to, and violative of, the provisions of article 2, section
30 of the constitution of this state, which provides that no
person shall be deprived of life, liberty or property without
due process of law.
Am. St. Rep., Vol. 11&— 32
498 American State Reports, Vol. 115. [Missouri,
3. It is urged that this act is unconstitutional and void for
the reason that it is in contravention of article 2, section 20
of the constitution of Missouri, which substantially provides
that "no private property can be taken for private use, with
or without compensation, unless by the consent of the owner,
except for private ways of necessity, and except for drains
and ditches across the lands of others for agricultural and
sanitary purposes, in such manner as may be prescribed by
law; and that whenever an attempt is made to take private
property for a use alleged to be public, the question whether
the contemplated use be really public shall be a judicial ques-
tion, and as such judicially determined, without regard to any
legislative assertion that the use is public."
4. It is contended by appellant that the act of February 25,
1901, is unconstitutional and void for the reason that it
contravenes the provisions of section 1 ®^* of the fourteenth
amendment of the constitution of the United States.
This act of February 25, 1901, the constitutionality of
which is challenged by appellant, was senate bill No. 9, head-
notes, * ' Attorneys at Law : Lien Upon Cause of Action, ' ' fol-
lowed by the following title: "An act to prevent frauds be-
tween attorneys, clients and defendants; making agreements
between attorney and client a lien upon the cause of action."
There is no subject that has more frequently had the atten-
tion of this court than the one in which acts of the General
Assembly have been challenged for failure to conform its
legislation to requirements of section 28, article 4 of the con-
stitution of this state, which substantially provides that no
bill shall contain more than one subject, which shall be clearly
expressed in its title. We deem it unnecessary, however, to
review the numerous cases upon this subject, but shall be con-
tent with a brief reference to the rules to be deduced from
the adjudications as to the objects and purposes sought by
the framers of the constitution in the enactment of such con-
stitutional provisions.
It has been repeatedly stated by this court that the objects
and purposes of this constitutional provision were to prevent
incongruous, disconnected matters, which had no relation to
each other, from being joined in one bill; however, it has
always been recognized that all matters that are germane to
the principal subject and have a natural connection with it,
might properly be incorporated in the same bill. In Ewing
Oct. 1906.] O'Connor v. St. Louis Transit Co. 499
V. Hoblitzelle, 85 Mo. 64, it was ruled: "Where all the pro-
visions of a statute fairly relate to the same subject, have a
natural connection with it, are the incidents or means of ac-
complishing it, then the subject is single, .... and if it is
sufficiently expressed in the title, the statute is valid." This
rule was approved by Judge Black, in State ex rel. Attorney
General v. MiUer, 100 Mo. 439, 13 S. W. 677, «34 siting j^
support of such approval, St. Louis v. Tiefel, 42 Mo. 578,
State V. Mathews, 44 Mo. 523, -State v. Miller, 45 Mo. 495,
Hannibal v. County of Marion, 69 Mo. 571, and State v. Mead,
71 Mo. 268, as substantially announcing the same rule as ap-
proved in Ewing v. Hoblitzelle, 85 Mo. 64. To the same effect
is State v. Bronson, 115 Mo. 271, 21 S. W. 1125, where it was
ruled that this section of the constitution should be reason-
ably and liberally construed and applied, due regard being
had to its object and purpose. It was again announced in
that case that if all the provisions of the bill have a natural
relation and connection, then the subject was single, and this,
too, though the bill contains many provisions. In Lynch v.
Murphy, 119 Mp. 163, 24 S. W. 774, the rule announced in the
foregoing cases was approved and followed.
It is insisted by appellant that this act embraces more than
one subject, and is therefore violative of the constitutional
provisions now being discussed. We are unable to give our
assent to this contention. It is clear that the subject of this
act was the making of agreements between attorney and client
a lien upon the cause of action, and the purpose of it was
to prevent frauds between attorneys, clients and defendants.
The contention upon this proposition is thus stated in the
brief by learned counsel for appellant:
"The attorney's lien act embraces four separate and dis-
tinct subjects, to wit:
"1. The subject of giving an attorney a lien upon his
client's cause of action or counterclaim, which lien attaches
to a verdict, report, decision or judgment in his client's favor.
"2. The object of making it 'lawful for an attorney at law,
either before suit or action is brought, or after suit or action
is brought, to contract with his client for legal services ren-
dered or to be rendered by him for a ^^'^ certain portion or
percentage of the proceeds of any settlement of his client's
claim or cause of action.'
500 American State Reports, Vol. 115, [Missouri,
"3. The subject or object of making notice in writing to the
opposite party that such legalized contract has been made,
which notice creates a lien upon the claim or cause of action
and upon the proceeds of any settlement thereof.
"4, The subject of making defendant liable for in any
manner settling any claim or suit after notice is served, with-
out written consent of the attorney."
To fully appreciate this proposition it is well to know what
are the provisions of the act to which the contentions of
appellant are directed. It provides:
' ' Section 1. The compensation of an attorney or counselor
for his services is governed by agreement, express or implied,
which is not restrained by law. From the commencement of
an action or the services of an answer containing a counter-
claim, the attorney who appears for a party has a lien upon
his client's cause of action or counterclaim, which attaches
to a verdict, report, decision or judgment in his client's favor,
and the proceeds thereof in whosesoever hands they may
come; and cannot be (effected) [affected] by any settlement
between the parties before or after judgment.
"Sec. 2. In all suits in equity and in all actions or pro-
posed actions at law, whether arising ex contractu or ex
delicto, it shall be lawful for an attorney at law either before
suit or action is brought, or after suit or action is brought,
to contract with his client for legal services rendered or to be
rendered him for a certain portion or percentage of the pro-
ceeds of any settlement of his client's claim or cause of action,
either before the institution of suit or action, or at any stage
after the institution of suit or action, and upon notice in
■writing by the attorney who has made such agreement with
his client, served upon the defendant or defendants, *^^ or
proposed defendant or defendants, that he has such an agree-
ment with his client, stating therein the interest he has in
such claim or cause of action, then said agreement shall oper-
ate from the date of the service (s) of said notice as a lien
upon the claim or cause of action, and upon the proceeds of
any settlement thereof for such attorney 's portion or percent-
age thereof, which the client may have against the defendant
or defendants, or proposed defendant or defendants, and can-
not be affected by any settlement between the parties either
before suit or action is brought, or before or after judgment
therein, and any defendant or defendants, or proposed de-
Oct. 1906.] O'Connor v. St. Louis Transit Co. 501
fendant or defendants, who shall, after notice served as herein
provided, in any manner, settle any claim, suit, cause of ac-
tion, or action at law with such attorney's client, before or
after litigation instituted thereon, without first procuring the
written consent of such attorney, shall be liable to such at-
torney for such attorney's lien as aforesaid upon the proceeds
of such settlement, as per the contract existing as herein-
above provided, between such attorney and his client": Laws
1901, p. 46.
A careful analysis of the foregoing provisions makes it man-
ifest that the matters therein contained have a legitimate con-
nection and relation to each other, and are clearly germane
to the subject expressed in the title, of making agreements
between attorney and client a lien upon the cause of action.
The first section provides for the attorney's lien upon his
client's cause of action or counterclaim. That section is
clearly in harmony with the subject as expressed in the title.
Section 2 provides the nature and character of the contract
which the attorney is authorized to enter into with his client
in all suits in equity and in all actions o ' proposed actions at
law, whether arising ex contractu or ex delicto. This is clearly
germane to the subject as expressed in the title, for the rea-
son that ^^'' it deals with the agreement between the attor-
ney and the client, which is to be made a lien upon the cause
of action. Then follows the provision which must be treated
as the incidents and means of accomplishing the purpose of
the legislation — that is, the giving of the defendant notice
of the agreement between the attorney and client, stating
therein the interest the attorney has in such claim or cause
of action, with the view that the defendant might regulate
his dealing with the plaintiflF, so far as adjusting or settling
that cause of action, accordingly. Then follows the particu-
lar provision upon which the cause of action in the case at bar
was predicated, that if any defendant or defendants, or pro-
posed defendant or defendants, shall, after notice served as
herein provided, in any manner settle any claim, suit, cause
of action or action at law, with such attorney's client, before
or after litigation instituted therein, without first procuring
the written consent of such attorney, he or they shall be liable
to such attorney for such attorney 's lien as is provided by this
act
502 American State Reports, Vol. 115. [Missouri,
We think it is clear that all of the provisions of this act
clearly relate to the same subject, have a natural connection
with it, are the incidents or means of accomplishing it, and
without the provision requiring defendants, after due service
of notice, in lawsuits or contemplated lawsuits, from respect-
ing the agreements between attorneys and clients, this legis-
lation in behalf of the lawyers of this state would be of little
avail in protecting them in respect to their lien upon the
cause of action, as contemplated by this act.
It is also insisted that the title to this act does not suffi-
ciently clearly express the subject as to meet the require-
ments of the constitutional provisions. In discussing this
provision of the constitution applicable to this subject, this
court, in State v. Ranson, 73 Mo. 78, said that "the adjudi-
cated cases, as well *^* as the elementary writers, all concur
that it was to prevent the vicious practice of conjoining, in
the same bill, incongruous matters, and subjects having no
legitimate connection or relation to each other, and in no way
germane to the subject expressed in its title; that its object
was to prevent surprise or fraud upon members of the legis-
lature, rather than embarrass legislation by making laws un-
necessarily restrictive: Cooley on Constitutional Limitations,
174 ; St. Louis V. Tiefel, 42 Mo. 578. Some of the adjudicated
cases have construed this provision with some strictness, but
in the majority of them the rule is otherwise. In the case
of State V. Miller, 45 Mo. 495, this court uses this language:
' The courts, in all the states where a like or similar provision
exists, have given it a very liberal interpretation, and have
endeavored to construe it so as not to limit or cripple legisla-
tive enactments any further than what was necessary by the
absolute requirements of the law.' Justice Cooley, in his
work on Constitutional Limitations, page 178, says: 'There
has been a general disposition to construe the constitutional
provisions liberally, rather than embarrass legislation by a
construction whose strictness is unnecessary to the accom-
plishment of the beneficial purpose for which it was adopted. '
The supreme court of Louisiana, in commenting on argument
of counsel, which demanded a strict construction of a consti-
tutional clause like this, uses this language : ' We think the ar-
gument invokes an interpretation of the constitutional clause
too rigorous and technical. If, in applying it, we should fol-
low the rules of a nice and fastidious verbal criticism, we
#
Oct. 1906.] O'Connor v. St. Louis Te\nsit Co. 503
should often frustrate the action of the legislature without
fulfilling the intention of the framers of the constitution':
Succession of Lanzetti, 9 La. Ann. 329."
This court very clearly pointed out the rule which should
be applied in the determination of the sufficiency ®^® of the
expression of the subject in the title of the bill in State v.
County Court, 128 Mo. 427, 30 S. W. 103, 31 S. W. 23; it
was ruled that the mere generality of the title will not vitiate
an act of the General Assembly unless the title is of such a
nature as to compel a conviction that it was designed to mis-
lead as to the subject dealt with. It is clearly the province
of the law-making power to decide upon the title of an act,
and at least some deference must be paid to their decision,
and an act should not be declared unconstitutional for the
reason that it fails to clearly express the subject by its title,
unless it clearly violates that command of the constitution :
Dogge V. State, 17 Neb. 140, 22 N. W. 348.
Applying the rule announced in the foregoing cases to this
proposition, we are of the opinion that the subject of the act
was sufficiently expressed in its title, and that the provisions
of it are germane to the principal subject, and have a natural
connection with it, and we discover nothing, either in the title
or in the provisions of the act, which were calculated to sur-
prise or operate a fraud upon any of the members of the law-
making power.
Nor is this act open to the charge of contravening other
provisions of the constitution indicated by appellants in its
brief. It is clearly not class legislation, as insisted by learned
counsel for appellant, on the ground that it simply applies
to attorneys at law. The distinction between general and
special laws has been very clearly drawn by numerous cases
in this state. The rule upon this subject as announced by the
supreme court of Pennsylvania in Wheeler v. Philadelphia,
77 Pa. 338, has repeatedly met the approval of this court.
It is there held "that a statute which relates to persons or
things as a class is a general law, while a statute which re-
lates to particular persons or things of a class is special."
And it was said by this court in State v. Tolle, *** 71 Mo.
645, that the classification spoken of by the supreme court of
Pennsylvania does not depend upon numbers: McAunich v.
Mississippi etc. Ry. Co., 20 Iowa, 338, and State v. Parsons,
40 N. J. L. 1. This distinction was followed and approved
504 American State Reports, Vol. 115. [Missouri,
in State v. Washburn, 167 Mo. 680, 90 Am. St. Rep. 430, 67
S. W. 592 ; Hamman v. Central Coal & Coke Co., 156 Mo. 232,
56 S. W. 1091; Lynch v. Murphy, 119 Mo. 163, 24 S. W.
774 ; State v. Herrmann, 75 Mo. 340 ; State v. Miller, 100 Mo.
439, 13 S. W. 677 ; Ex parte Lucas, 160 Mo. 218, 61 S. W.
218 ; Ex parte Loving, 178 Mo. 194, 77 S. W. 508.
This act undertakes to cover a certain class of persons en-
gaged in a particular profession. It does not undertake to
select any particular person in that class, but applies to all
alike who fall within the class of attorneys at law.
The history of legislation in this state demonstrates that
the law-making power found it essential, for the purposes of
legislation, to divide both persons and business in separate
classes, and it is now no longer an open question in the
courts of this state that legislation applicable to a particular
class is not violative of the constitutional provision which
prohibits the enactment of special laws. That lawyers in this
state belong to a particular class we think there can be no dis-
pute, and we can see no reason, even though they be only
lawyers, why legislation which deals in a general way with
the affairs of that class, should be held unconstitutional. We
have legislation in this state respecting other classes of per-
sons, such as fellow-servants, mechanics, landlords, bankers,
insurance laws and other legislation which have reference to
only one line of trade or class of persons ; yet, wherever these
laws have been in judgment before the courts of this state,
they have been held constitutional and valid : Henry & Coats-
worth Co. V. Evans, 97 Mo. 47, 10 S. W. 868, 3 L. R. A. 332;
Hennig v. Staed, 138 Mo. 430, 40 S. W. 95.
The object and purpose of this act, the validity of *** which
is challenged by appellant, was to provide a lien in favor of
attorneys at law upon the cause of action, and we have re-
peatedly recognized the justness, as well as the constitutional-
ity, of the lien provided for the mechanic and the landlord on
crops made by his tenant, and we are unwilling to say that
a lien provided for the legal profession should be ignored and
held unconstitutional. While the business of these classes
may be essentially different, we are unable to assign any legal
valid reason why a distinction should be made against the
legal profession. This act in no way deprives the defendant
or anyone else of his rights without due process of law, and
in view of the full discussion of that subject and the settled
Oct. 1906.] O'Connor v. St. Louis Transit Co. 505
rules that have been made construing that part of the fed-
eral constitution, we deem it unnecessary to further discuss
that proposition: Davidson v. New Orleans, 96 U. S. 97, 24
L. ed. 616 ; Sheppard v. Steele, 43 N. Y. 52, 3 Am. Rep. 660 ;
State V. Addington, 77 Mo. 110 ; Dent v. West Virginia, 129
U. S. 114, 9 Sup. Ct. Rep. 231, 32 L. ed. 623 ; Missouri Pac.
By. Co. V. Humes, 115 U. S. 512, 6 Sup. Ct. Rep. 110, 29 L.
ed. 463; Missouri Pac. Ry. Co. v. Maekey, 127 U. S. 205, 8
Sup. Ct. Rep. 1161, 32 L. ed. 107.
It is insisted by appellant that this act restricts or destroys
the defendant's right to contract. We are unable to give our
assent to this insistence. The provisions of this act simply
create a lien upon the cause of action in favor of the attorney
at law, and requires the defendant, after due notice, which
creates such lien in dealing with the party as to such cause of
action, that such lien shall be respected. If we are dealing
with the owner of a horse, and have notice that there is a valid
subsisting lien upon the horse, we would not contend for a
moment that such lien could be ignored. So it is in respect
to other property — in dealing with the owner of it, if we have
notice of the existence of a lien, such lien cannot be ignored.
Is there any difference, if a defendant has notice of the exist-
ence of a ®'*^ lien of an attorney upon a cause of action and
the instances above cited? We think not. This law does not
deprive a defendant of any of his rights. When the lien is
created, in dealing with the plaintiff in respect to such cause
of action he must act accordingly. It does not deprive him
of the right to make a settlement, but in making such settle-
ment it simply requires that he shall take into consideration
the fact that the attorney at law has a lien upon the cause
of action, and if such lien is ignored, he will be required to
account to him in an action at law for the amount of such lien.
This act is vigorously assailed by learned counsel for ap-
pellant on the ground that it tends to lead to the commis-
sion of unprofessional acts on the part of attorneys. This
may be true in some instances, but the profession of law,
when practiced upon a high plane, is an honorable one, and
by no means should an act of the General Assembly, presum-
ably enacted for the benelit of the honorable practicing law-
yers of the state, be declared invalid for the rea.son that
instances may arise by reason of the law which enable some
of the less reputable attorneys to do acts which are not com-
506 American State Reports, Vol. 115. [Missouri,
mendable along professional lines. In our opinion this law
is constitutional and valid.
This brings us to the consideration of the only remaining
proposition urged by counsel for appellant; that is, that
plaintiff was not entitled to recover under the facts in this
case.
It is first insisted by appellant that this action is for the
enforcement of the lien, and that the justice of the peace
had no jurisdiction. It will be observed that this action is
not strictly to enforce the lien provided by the statute, but is
to recover the amount of such lien by reason of the failure
of the defendant to recognize the lien in its settlement with
the plaintiff. This cause of action is expressly provided for
by the terms of the statute. This same proposition was in-
volved in Yonge «*» v. St. Louis T. Co., 109 Mo. App. 235, 84
S. W. 184. Goode, J., speaking for the court in that case,
thus very clearly and correctly stated the law applicable to
it. He said: "The second proposition which the defendant
invokes is that Yonge should have sought to proceed with
the case of Mrs. Hagan against the Transit and United Rail-
ways Companies, notwithstanding the settlement ; should have
interposed against the dismissal of that suit, and carried it
forward to a judgment for the amount of his demand. The
statute in hand says in plain words that a defendant who
settles with an attorney under the circumstances given shall
be liable to the attorney for that percentage of the proceeds
which his contract with his client entitles him to receive. An
express statutory liability of a legal character was thereby
created, and as no particular or exclusive remedy was pro-
vided for its enforcement, it is enforceable by the usual com-
mon-law remedy; that is, by an action at law correspond-
ing to trespass on the case : Sedgwick on Statutory and Con-
stitutional Law, 2d ed., p. 74 et seq., and the cases cited in
the footnotes. The construction contended for by the defend-
ants is clearly inadmissible in view of the provisions that if
a settlement occurs before an action is begun on the claim,
the defendant is nevertheless liable. Of course, in such an
instance, the attorney cannot go on with the prosecution of
a suit in the name of his client, because there will be no suit
pending for him to carry forward. In that contingency, un-
questionably, an independent action can be instituted in his
own name; and we discern nothing in the language of the
Oct. 1906.] O'Connor V.St. Louis Transit Co. 507
statute which discriminates that contingency from one like
the present, for the purpose of compelling the adoption of
different procedures in two cases. So far as the enforcement
of this lien is concerned, it strikes us as resembling the statu-
tory lien on crops, which a landlord may make effective by
suing one who purchases the crops on demised premises from
the tenant *** with knowledge of the landlord's lien."^ Re-
ferring to the purposes of the provisions of this act, the court
during the course of the opinion stated that "they indicate
a purpose on the part of the legislature to prevent a defend-
ant, actual or potential, in an action sounding either in con-
tract or tort, from settling with the claimant so as to cut out
the claimant'^ attorney from a contingent compensation to
which the attorney is entitled under a contract. We see no
reason why Yonge was not within the protection of this stat-
ute. He had a contract with Mrs. Hagan which stated defi-
nitely what percentage of any sum collected under it, with or
without suit, should be his. The defendants had notice of
that contract and settled with Mrs. Hagan in disregard of it.
According to the plain language of the statute, they could
only make a settlement with her which would be binding on
Yonge and exonerate them from liability to him by first ob-
taining his written consent. The statute says, in effect, that
if a settlement was made without his written consent, as it
was, the companies are liable to him for his portion of the
proceeds. ' '
In Young v. Renshaw, 102 Mo. App. 173, 76 S. W. 701, the
St. Louis court of appeals very clearly pointed out the nature
and character of the cause of action under the provisions of
this statute. Bland, J., speaking for the court in that case,
said: "Under the provision of the first section of the act, the
lien of an attorney attaches when the suit is commenced or
service of an answer containing a counterclaim is made. If
the attorney and client enter into a contract that the former
shall receive as compensation for his services a percentage
of the amount recovered or realized, and the attorney serves
a written notice on the defendant or proposed defendant of
the agreement between him.self and client, the lien attaches to
the matter or cause of action from the date of the service of
such notice, although no suit *"° has l)een commenced, and
if the claim is settled by the client with the defendant or pro-
posed defendant, in disregard of the attorney's rights, after
608 American State Reports, Vol. 115. [Missouri,
the defendant has been served with such notice, he will be
individually liable to the attorney, as per his contract with
his client."
The cause of action set forth in the statement before the
justice of the peace brought it clearly within the provisions
of the statute, and the amount sued for was within the juris-
diction of the justice, and the justice had jurisdiction to try
and determine the cause.
We deem it unnecessary to pursue this subject further.
The cases of Young v. Renshaw, 102 Mo. A pp. 173, 76 S. W.
701, and Yonge v. St. Louis T. Co., 109 Mo. App. 235, 84
S. W. 184, by the St. Louis court of appeals, correctly an-
nounce the law as applicable to the lien of an attorney under
the act upon which this proceeding is predicated, and they
fully meet the approval of this court.
There is no merit in the insistence of appellant that the
court erred in its refusal to make a finding of the facts in
this cause. In the first place, the bill of exceptions, as shown
in the abstract of record, discloses that there were no objec-
tions or exceptions preserved to the refusal of this request.
Secondly, it is expressly admitted by counsel for appellant in
their brief that there was no dispute about the facts; that
the proof in this cause establishes the allegations as contained
in the statement of the cause of action before the justice of
the peace; that being true, there was no necessity for a find-
ing of the facts. Under the plain admission of counsel at the
close of the evidence in this case, there was nothing left ex-
cept a question of law.
We shall not prolong this opinion to discuss the numerous
instructions requested by the defendant and refused by the
court. They have had our most careful consideration. There
were nineteen instructions requested ®^® in this cause;
clearly, more than there was any necessity for — a practice
which has repeatedly met the disapproval of this court. They
were all refused with the exception of one, and, in our opinion,
properly so.
We have indicated our views upon the propositions pre-
sented by the record in this cause, which results in the con-
clusion that the judgment of the trial court should be affirmed,
and it is so ordered.
All concur.
Oct. 1906.] 0 'Connor V. St. Louis Transit Co. 509
Class Legislation is not Unconstitutional, provided the class is
composed of individuals possessing in common some disability, at-
tribute, or qualification, or in some condition marking them as
proper objects for legislation: Horwich v. Walker-Gordon Laboratory
Co., 205 111. 497, 98 Am. St. Hep. 254; Deyoe v. Superior Court, 140
Cal. 476, 98 Am. St. Rep. 73.
A Flaintif may Dismiss His suit at pleasure, as a rule, without the
intervention of his attorney: Tompkins v. Railroad, 110 Tenn. 157,
100 Am. St. Rep. 795; Boogren v. St. Paul etc. Ry. Co., 97 Minn.
51, 114 Am. St. Rep. 691; note to Cameron v. Boeger, 93 Am, St.
Eep. 175.
m
CASES
IN THE
SUPREME COURT
OP
MONTANA.
STATE V. DISTRICT COURT OF TWELFTH JUDICIAL
DISTRICT.
[34 Mont. 96, 85 Pac. 866L]
FOREIGN WILL — Contest of Application to Probate. — ^While
the statutes of Montana do not in express terms provide for the con-
test of an application to the courts of that state for the probate of
a foreign will, they do so impliedly, for section 2351 of the Code of
Civil Procedure, which has to do with the subject, provides for
a hearing of such application and for notice thereof, (p. 512.)
FOBEIGN WILL — Contest of Application to Probate. — While
no particular grounds of contesting an application for the probate
of a foreign will are expressly designated by the Montana statutes,
section 2352 of the Code of Civil Procedure does enumerate the
findings which the trial court must make before admitting such will
to probate, and these may be accepted as questions with respect
to which issues may be raised, and therefore the grounds for such
.contest, (p. 512.)
PROBATE OF WILL. — A Judgment in a Frobate Proceeding
is a judgment in rem; that is, it determines the status of the sub-
ject matter. Therefore, the judgment of a court admitting a will
to probate fixes the status of the instrument as a will, and becomes
at once conclusive upon the world of all the facts necessary to the
establishment of a will, among which are, that at the time the
will was executed the testator was of sound and disposing mind, and
was not acting under duress, fraud, or undue influence, (p. 515.)
FOBEIGN WILL.— To Entitle a Foreign WiU to Probate
here, it must appear that it was duly proved, allowed and admitted
to probate in the court of the sister state; that It was executed ac-
cording to the law of the place in which it was made or in which
the testator was at the time domiciled, or in conformity to the laws
of this state; and that the record is authenticated as required by
section 905 of the United States Revised Statutes, (p. 516.)
FOBEIGN WILL — Conclusiveness of Probate. — A will executed
in California by a testator there residing, and subsequently ad-
mitted to probate in that state, may not, when afterward admitted
to ancillary probate in Montana, where the testator left real and
(510)
March, 1906.] State v. District Court. 511
personal property, be contested on the ground that the testator
was not of sound and disposing mind, or acted under duress, fraud,
or undue influence, the Montana statutes providing that when sucb
foreign will is admitted to probate in this state it shall "have
the same force and effect as a will first admitted to probate in this
state." (pp. 513, 517, 518.)
F. E. Stranahan, for the appellant.
George H. Stanton and J. A. McDonough, for the respond-
ents.
*'' HOLLO WAY, J. Prior to his death, which occurred at
San Francisco, on March 7, 1904, G. F. Deletraz made and
published two wills, ®** the first of which for convenience will
be designated the "Mossholder will," and the last the "Ruef
will. ' ' Such proceedings were had in the superior court of San
Francisco that the Ruef will was duly admitted to probate,
and letters testamentary issued to the person named as execu-
tor in that will. The decedent had real and personal prop-
erty in Chouteau county, Montana, and in May, 1904, after
the will had been admitted to probate in California, a copy
of such will and the probate thereof, duly authenticated, were
produced by the executor with a petition for letters, and filed
in the district court of Chouteau county, where such pro-
ceedings were had that thereafter, on December 30, 1904. it
appearing to that court from the record that said will had
been proved, allowed and admitted to probate in the state of
California, and that it was executed according to the laAvs
of California, a decree was duly given and made admitting
such will to probate.
Thereafter, on February 2, 1905, certain devisees, and the
executor named in the INIossholder will, filed in the district
court of Chouteau county what purported to be a contest in
writing of the Ruef will, which writing sets forth as the
ground of contest that, at the time of making the Ruef will,
the testator, Deletraz, did not have mental capacity to
make a will and was acting under fraud, misrepresentation
and undue influence of certain other persons, and prays that
the order admitting the Ruef will to probate be annulled; that
the letters issued thereon be revoked ; that the Mossholder will
be admitted to probate; and that letters testamentary issue
to the executor named in that will. To this contest the rela-
tor, the executor named in the Ruef will, demurred on the
ground that the district court of Chouteau county has not
612 American State Reports, Vol. 115. [Mont.
jurisdiction to hear such contest, and that the so-called con-
test in writing does not state facts sufficient to constitute any
ground of contest. This demurrer was overruled, and, the
district court being about to proceed to hear such alleged con-
test, an application was made to this court for a writ of pro-
hibition restraining the district court of Chouteau county and
the Honorable Jere B. Leslie, judge of said court, for the pur-
pose of hearing all the proceedings in connection ** with this
matter, the resident judge being disqualified, from further
proceeding with said alleged contest. An alternative writ
was issued, and upon the return the matter was submitted
upon a motion to quash the alternative writ and dismiss the
proceedings.
The question which arises, and which was submitted for de-
termination is : May a foreign will, after it has been admitted
to probate in this state, be contested in the courts of this state
upon the ground that the testator at the time of making such
will was not of sound and disposing mind, or was acting un-
der duress, fraud or undue influence?
A "foreign will," in the sense that the term is used through-
out this opinion, is a will executed in another state by a testa-
tor residing there, admitted to probate in such sister state
after the death of the testator, and subsequently offered
for ancillary probate in this state, as was the case with the
will now under consideration.
While our code does not in express terms provide for the
contest of an application to the courts of this state for the
probate of a foreign will, it does so impliedly ; for section 2351
of the Code of Civil Procedure, which has to do with the
subject, provides for a hearing of such application, and that
notice of such hearing shall be given. If objections could not
be made at such hearing, then there would be no reason for
requiring a hearing or notice thereof, and the mere fact that
a hearing is required to be had, and proper notice of such
hearing given, implies that some kind of objections may be
interposed. The only specifications of grounds of contest of
a domestic will are to be found in section 2340 of the Code of
Civil Procedure, and they are not designated as such, but as
the issues which may be raised and which the court is re-
quired to try and determine.
So, likewise, while no particular grounds of contesting an
application for the probate of a foreign will are expressly des-
March, 1906.] State v. District Court. 513
ignated, section 2352 of the Code of Civil Procedure does
enumerate the findings which the trial court must make before
admitting such will to probate, and these may be accepted as
questions with respect to which issues may be raised, and
therefore ^*^ the grounds of such contest. But these ques-
tions arise upon the hearing of the application for probate,
and are to be tried by the record itself, and have not any
reference to proceedings after the will has been admitted
to probate here.
As these proceedings are purely statutory, and the statute
makes no specific provision for the contest of a foreign will
after probate, we might dispose of this proceeding by saying
that the provisions of section 2352 above are exclusive, except
as to the question of jurisdiction of the court of the sister
state over the subject matter, and likewise the question of the
jurisdiction of the INIontana court, which might be raised in-
dependently of statute.
But attention is directed to one portion of section 2352,
above, which provides that, when such foreign will is admitted
to probate in this state, it shall "have the same force and effect
as a will first admitted to probate in this state," and the
argument is made that, as the probate of a domestic will or
the validity of such will is subject to contest within one
year after such probate, and as the foreign will when admitted
has the same force and effect as the domestic will, therefore
the probate of the foreign will in the courts of this state and
the validity of such will are likewise subject to contest within
a like period.
"When the proper record of the probate of the will in the
court of a sister state having jurisdiction is presented in a
district court of this state likewise having jurisdiction of the
subject matter, the question arises, "What force and effect shall
be given by the courts of this state to such record?
Section 1, article 4 of the constitution of the United States
provides: "Full faith and credit shall be given in each state
to the public acts, records and judicial proceedings of every
other state. And the Congress may, by general laws, pre-
scribe the manner in which such acts, records and proceedings
shall be proved, and the effect thereof." Pursuant to this
direction, section 905 of the United States Revised Statutes
(U. S. Comp. Stats. 1901, p. 677) was enacted, which, after
providing for the manner of authenticating such records,
Am. St. Rep., Vol. 115—33
514 Amebican State Reports, Vol. 115. [Mont.
reads: "And the said records and judicial proceedings, so
authenticated, shall have ^®* such faith and credit given to
them in every court within the United States as they have by
law or usage in the courts of the state from which they are
taken."
Section 3201 of our Code of Civil Procedure also provides:
"The effect of a judicial record of a sister state is the same
in this state as in the state where it was made, except that it
can only be enforced here by an action or special proceeding,
and except, also, that the authority of a guardian or com-
mittee, or of an executor or administrator, does not extend
beyond the jurisdiction of the government under which he was
invested with his authority."
Section 1908 of the California Code of Civil Procedure,
which is pleaded in the petition for the writ of prohibition, is
as follows: "The effect of a judgment or final order in an
action or special proceeding before a court or judge of this
state, or of the United States, having jurisdiction to pronounce
the judgment or order, is as follows: (1) In case of a judg-
ment or order against a specific thing, or in respect to the
probate of a will, or the administration of the estate of a
decedent, or in respect to the personal, political or legal con-
dition or relation of a particular person, the judgment or or-
der is conclusive upon the title to the thing, the will, or ad-
ministration, or the condition or relation of the person."
The decree of the superior court of California, then, must be
deemed conclusive upon the court in Chouteau county, of
every matter with respect to which it is conclusive in Califor-
nia. Section 1908 above is not very definite. A judgment in
respect to the probate of a will is conclusive upon the will.
Conclusive of what? In State v. McGlynn, 20 Cal. 233, 81
Am. Dec. 118, the supreme court of California, in considering
an attack made upon the decree admitting the Broderick will
to probate, after reviewing the authorities at length, says:
"This review of the cases decided in England and in the
United States establishes that it is a perfectly settled doctrine
that the decision of the court to which the proof of wills is
confided, whether of real or personal estate, is conclusive upon
the question of the validity or invalidity of the will." The
reference here to real ^**^ estate, of course, applies to real
estate within the jurisdiction of that court.
March, 1906.] State v. District Court. 515
It is generally conceded that a judgment in a probate pro-
ceeding is a judgment in rem ; that is, it determines the status
of the subject matter. Therefore, the judgment of the Cali-
fornia court admitting the will to probate there fixed the
status of the instrument as a will, and became at once con-
clusive upon all the world of all the facts necessary to the
establishment of a will, among which are that, at the time the
will was executed, the testator was of sound and disposing
mind and was not acting under duress, fraud, menace or un-
due influence : 16 Ency. of PI. & Pr. 1073 ; note to Bowen v.
Johnson, 73 Am. Dec. 53 (5 R. I. 112), w^here the authorities
are cited. See, also, the leading case of Crippen v. Dexter,
13 Gray (Mass.), 330.
The decree of a court of this state first admitting a will to
probate does establish such instrument as a will. It is true
that such decree is not necessarily final. It may be reviewed
on appeal, and is subject to attack within one year in a proper
proceeding instituted for that purpose. But, until set aside
by a proper proceeding, such decree is conclusive of aU facts
necessary to the validity of the will. If the foreign will,
after being admitted to probate, is subject to a like attack,
it follows necessarily that it must, when such attack is made,
be proved as a domestic will. But this was never contem-
plated, and if it was, the mere fact that such foreign will
may be required to be proved, as if probate thereof had never
been had, would nullify the provision of section 905 of the
United States Revised Statutes above, and render meaning-
less the sentence quoted from section 2352, above. These
views are reinforced by the provisions of section 2360 of the
Code of Civil Procedure, which provides that, in order to
contest the probate of a will after such will has been ad-
mitted to probate, an interested party must file a petition in
writing setting forth the grounds of contest, and this peti-
tion must be tiled in the court in which the will was proved.
But a foreign will admitted to probate here is not proved in
the court of this state. Section 2350 of the Code of Civil
Procedure provides: "All wills daily proved and *** allowed
in any other of the United States, or in any foreign country
or state, may be allowed and recorded iu the district court
of any county in which the testator shall have left any es-
tate."
516 American State Reports, Vol. 115. [Mont.
In order to entitle a foreign will to probate here, it must
first appear that it was duly proved, allowed and admitted to
probate in the court of the sister state; that it was executed
according to the law of the place in which it was made or in
which the testator was at the time domiciled, or in conform-
ity to the laws of this state; and that the record is authen-
ticated as required by section 905 of the United States Revised
Statutes, above. Of course, it must also appear that there
is property within the jurisdiction of the Montana court sub-
ject to administration, and that the court of the sister state
likewise had jurisdiction of the subject matter. But, when
these facts do appear, "it [the foreign will] must be admitted
to probate .... and letters testamentary or of administra-
tion issued thereon ' ' : Sec. 2352, above.
But it may be said, conceding all this, the decree of the
California court can only be conclusive of matters with re-
spect to which that court had jurisdiction, and that this is the
meaning which has been given uniformly to the constitutional
provision quoted above ; that the California court did not have
jurisdiction of real estate situated in Montana, and therefore
the decree of the California court admitting the Ruef will to
probate only establishes that instrument as a will, in so far
as it affects personal property, upon the principle "of inter-
national law originated by the necessities of commercial in-
tercourse, founded on the fiction that movable property,
wherever situate, is in the actual possession of the owner at
his domicile, and universally accepted by comity with all the
force of domestic law, that the personal property of every
man is subject to the law of his domicile" (Irwin's Appeal,
33 Conn. 128) ; that the devolution of title to real estate in
this state is to be determined by the laws of this state; and
that the full faith and credit clause of the United States con-
stitution, above, does not operate to the prejudice of this right.
Assuming this to be true, and that the ^*** general rule is
that, in the absence of statute, the probate of a foreign will
devising real estate situated in this state does not establish
the validity of such will in this state, upon the familiar prin-
ciple that the lex rei sitae governs as to the formalities
necessary to the transfer of real estate, whether testamentary
or inter vivos, still this state may by statute give to a foreign
will, which devises real estate located in this state, the same
effect as is given to a will devising personal property only,
March, 1906.] Sta-je v. District Court. 517
or a will executed in conformity with the laws of this state ;
and, if such statute is enacted, the probate of such foreign
will in the courts of this state under that statute is conclusive
as to the validity of the will to pass title to the land so
devised: 23 Am. & Eng. Ency. of Law, 2d ed., 143.
Section 1731 of our Civil Code provides: "A will of real
or personal property, or both, or a revocation thereof made out
of this state by a person not having his domicile in this state,
is as valid when executed according to the law of the place
in which the same was made, or in which the testator was at
the time domiciled, as if it were made in this state, and ac-
cording to the provisions of this chapter." Provisions sim-
ilar to this section, and to that portion of section 2352 quoted
above, have frequently been construed.
The case of Ives v. Salisbury's Heirs, 56 Vt. 565, presents
the precise question argued here, and the decision is upon sim-
ilar statutory provisions. It is held that the questions of the
testamentary capacity of the testator and his freedom from
undue influence are foreclosed by the decision of the court of
the sister state where the will was first admitted to probate.
Under statutes almost, if not quite, identical with our sec-
tions 2350, 2351 and 2352 of the Code of Civil Procedure, and
section 1731, Civil Code, above, the supreme court of Minne-
sota says that the ancillary probate is mostly a mere matter
of form, and holds that these statutes make the judtrment of
a sister state, admitting the will to probate, conclusive as to
the validity of the will, and that the proceedings to probate
it in Minnesota are much in the nature of a suit upon a for-
eign judgment: Babcock v. Collins, 60 Minn. 73, 51 Am. St.
Rep. 503, 61 N. *»» W. 1020 ; Lyon v. Ogden, 85 Ue. 374, 27
Atl. 258 ; Page on Wills, sec. 30 ; Green v. Aldeu, 92 Me. 177,
42 Atl. 358; Crippen v. Dexter, 13 Gray (Mass.), 330;
Irwin 's Appeal, 33 Conn. 128 ; Hayes v. Lienlokken, 48 Wis.
509, 4 N. W. 584.
Reference is made to section 1838 of our Civil Code, which
reads as follows: "Except as otherwise provided, the validity
and interpretation of wills are governed, when relating to real
estate within this state, by the law of this state; when relating
to personal property, by the law of the testator's domicile."
This section must be read in connection with section 1731,
above, and without doubt, refers to particular devises which
are prohibited by the laws of Montana, and, probably, to con-
518 American State Reports, Vol. 115. [Mont.
ditions such as are enumerated in sections 1729, 1744, 1751,
and 1752 of the Civil Code, and probably to other like ques-
tions which are not in controversy in this proceeding.
From these considerations it follows that, by giving full
force and effect to the decree of the California couvt admit-
ting the Ruef will to probate, and adjudging that such will
was executed according to the law of California where it was
executed, such will, when admitted to ancillary probate in
Chouteau county, operates to transfer all property, real and
personal, of the testator, to the same extent that a will drawn
in Montana, in conformity to the laws of Montana, and duly
probated here in the first instance, would transfer it. Sec-
tion 1731, above, then, makes applicable the provisions of sec-
tion 1, article 4 of the constitution above, and section 905 of
the United States Revised Statutes, to the decree of the Cali-
fornia court admitting the Ruef will to probate, even though
that will devises real estate situated in Montana, and that de-
cree is conclusive upon the court in Chouteau county to the
same extent respecting the Ruef will as if it transferred per-
sonal property only.
We think that the questions of the testamentary capacity
of the testator and his freedom from duress, fraud, misrepre-
sentation or undue influence, when executing the Ruef will,
are foreclosed by the decree of the California court, and that
***® the district court of Chouteau county is without jurisdic-
tion to inquire into them.
The motion to quash the alternative writ and dismiss the
proceedings is overruled. It is ordered that the peremptory
writ of prohibition issue according to the prayer of the peti-
tion.
Writ issued.
Mr. Chief Justice Brantly and Mr. Justice Milbum concur.
CONCLUSIVENESS OF FOEEIGN FBOBATE OF WIIiL.
The probate of a will in one state or country is conclusive
as to the title of personal property in another state or country:
Newcomb v. Newcomb, 108 Ky. 582, 57 S. W. 2; Martin v. Stovall,
103 Tenn. 1, 52 S. W. 296, 48 L. R. A. 130. But the probate of a
■will of real property in one state is of no force in establishing the
validity of the will as to real property in another state, unless the
statutes of the latter state so permit. It can obtain such force and
effect only by virtue of some law of the state in which the realty is
situated: See the note to Estate of Clark, 113 Am. St. Bep. 215;
March, 1906.] State v. District Court. 519
Snecd v. Ewing, 5 J. J. Marsh. 460, 22 Am. Dec. 41; Kieth v. John-
son, 97 Mo. 223, 10 S. W. 597; McCormick v. Sullivan, 10 Wheat.
(U. S.) 192, 6 L. ed. 300; Eobertson v. Pickrell, 109 U. S. 608, 3
Sup. Ct. Eep. 407, 27 L. ed. 1049.
"The incidents of real estate, its disposition, and right of succession,
depend upon the lex rei sitae. The validity of bequests of personal
property depends upon the law of the testator's domicile, and the
validity of devises of real property upon the law of the state where
the lands lie. Hence a will executed according to the testator's
domicile will pass personal property wherever situate; but, with
respect to devises of land, the will must be executed according to
the prescribed formalities of the state in which the land is situated.
The courts of one state are without jurisdiction over the title to
lands in another state; and the clause of the federal constitution
which requires full faith and credit to be given in each state to the
records and judicial proceedings of every other state applies to the
records and proceedings of courts only so far as they have juris-
diction. Hence the probate of a will in one state, though conclusive
as to title to personalty, if probate be oiade at the domicile of the
testator, is of no force in establishing the suflBeiency or validity
of a devise of land in another state. It can obtain such force only
in virtue of some law of the state in which the lands are situated":
Nelson v. Potter, 50 N. J. L. 324, 15 Atl. 375.
"The probate of a will," to quote from Clayson v. Clayson, 24
Or. 542, 34 Pac. 358, "does not establish its validity as a will
devising real property in another state, unless the laws of the
latter state permit it. It is essential, therefore, in order that a
foreign will be effective to convey real estate situated in Oregon,
that it not only be executed in the manner prescribed by the law of
the state, but also that it be proved in the foreign jurisdiction in
the manner required by such law."
Undoubtedly the legislature is competent to modify the rules of the
eommon law on this question, and in many states the legislatures have
done 80. Thus, to quote from the supreme court of Minnesota,
"our statute clearly recognizes as valid and indisputable a foreign
will thus duly probated at the foreign domicile, and the proceedings
by which it is probated in this state are mostly a matter of form":
Babcock v. Collins, 60 Minn. 73, 51 Am. St. Rep. 503, 61 N. W.
1020.
The statutes of Montana and North Dakota provide: "A will
of real or personal property, or both, or a revocation thereof, made
oot of this state by a person not having his domicile in this state,
is as valid when executed according to the law of the place in which
the same was made, or in which the testator was at the time domiciled,
as if it were made in this state, and according to the provisions of this
chapter": Mont. Civ. Code, sec. 1731; N. Dak. Rev. Codes, sec. 5097.
And in making provision for the probate of foreign wills, the statutes
520 American State Reports, Vol. 115. [Mont.
of these states declare: "If, on the rehearing, it appears upon the face
of the record that the will has been proved, allowed and admitted to
probate in any other of the United States, or in any foreign country,
and that it was executed according to the law of the place in which
the same was made, or in which the testator was at the time domi-
ciled, or in conformity with the laws of this state, it must be ad-
mitted to probate and have the same force and effect as a will first
admitted to probate in this state, and letters testamentary or of
administration issued thereon": Mont. Code Civ. Proc, sec. 2352.
North Dakota Revised Codes section 8037, is substantially the sanie.
Under these statutes, the supreme court of Montana holds in the
principal case, ante, page 510 that a will which has been admitted
to probate in California, and subsequently admitted to probate in
Montana in a county there where the testator left real estate, can-
not be contested in the latter court on the ground of want of testa-
mentary capacity, undue influence, fraud, and the like, these questions
being foreclosed by the decision of the California court when the
will was there first admitted to probate.
The decision of the Montana court is supported by Crippen v. Dex-
ter, 79 Mass. (13 Gray) 330; Ives v. Salisbury's Heirs, 56 Vt. 565,
In the latter case the testatrix, although her domicile was in Vermont,
made her will and died in Indiana. The will was probated in
the courts of Indiana, they having jurisdiction, inasmuch as she
left property and debts in that state. In holding that the will could
not thereafter be attacked in Vermont by proving testamentary
incapacity and undue influence, the court said: "Section 2057, R. L.
provides: 'A will made out of the state, which might be proved
and allowed by the laws of the state or country in which it was
made, may be proved, allowed and recorded in this state, and shall
then have the same effect, as if executed according to the law of
this state.' Hence this will, if executed according to the laws
of Indianaj may be proved, and have full effect give"n to it upon
both the real and personal estate of the testatrix in this state,
whether the will were proved originally in the probate court of the
domicile in this state, or by duly authenticated copies of the record
of its proof in Indiana, the courts of that state having, as is
found and conceded, jurisdiction to take proof of its due execution
according to the laws of that state, and to j^i'obate it. As personal
property generally in probate proceedings has no situs of its own,
but takes the situs of its owner, a will valid to convey the personal
property of the estate where it is made is generally operative to
convey such personal estate wherever in fact it may at the time
happen to be. To convey real estate, the will must be executed
with the formalities required by the law of the place where the real
estate is located. As we have seen, the law of this state gives the
same effect to a will duly executed abroad, in accordance with the
laws of another state as that country gives to it. On these views.
March, 1906.] State v. District Court. 521
the only question open to the contestants, when the will with duly
authcnti''ated copies showing its probate in the proper court in
Indiana was produced, was in regard to the jurisdiction of such court
to make probate of the will. Such jurisdiction being found and
conceded, the county court correctly held that the contestants were
estopped from averring and proving want of testamentary capacity
or undue influence."
In Lyon v. Ogdcn, 85 Me. 374, 27 Atl. 258, the question presented
is, to use the language of the court, "whether real property situated
in this state can be effectually disposed of by a will having but
two subscribing witnesses. The answer depends upon where the
will is made. If made in this state, it will not. Our law requires
at least three subscribing witnesses. But if made in another state
or country, where but two subscribing witnesses are required, or
if first proved and allowed in another state or country according
to the laws thereof, and then legally allowed and recorded in this
state, as it may, it will."
The Wisconsin statute in providing for the proof and recording
in that state of the foreign probate of a will, declares: "If, on the
hearing, it shall appear to the court that the order or decree admitting
such will to probate was made by a court of competent jurisdiction,
.... the will shall have the same force and effect as if it had
been originally proved and allowed in the same court." Under this
statute the supreme court of Wisconsin has recently affirmed that
where a testatrix died at her home in Nebraska, leaving property in
that state and also in Wisconsin, and her will is originally probated
in Nebraska by a court of competent jurisdiction and in accordance
with the procedure of that state, such probate is conclusive in Wis-
consin, on the hearing there for its proof and recording, although
certain minors were not represented, in the original proceedings, by
guardian ad litem or otherwise. In reversing the judgment of the
circuit court, the supreme court of Wisconsin said: "The mistake
was made, it seems, by looking to the essentials of a valid original
probate of a will in this state, instead of such essentials in Nebraska.
The language of the statute is not to the effect that if it appears
that tlie former probate was according to the laws of this state the will
■hall be admitted in the secondary proceedings with like effect as
if they were primary. To the contrary it says: 'If, on the hearing,
it shall appear to the court that the order or decree admitting such
will to probate was made by a court of competent jurisdiction, ....
the will shall have the same force and effect as if it hud been orig-
inally proved and allowed in the same court' ": In re Gartsen's
Will, 127 Wis. 602, 106 N. W. 1096.
The law of Massachusetts "gives the same force and effect to a
foreign as to a domestic will, if made in conformity with the laws of
the state or country where it was executed, and which might be
proved and allowed according to the laws of such state or country."
522 American State Reports, Vol. 115. [Mont.
Accordingly, a decree of a probate court of Connecticut, admitting a
will to probate within its jurisdiction, is conclusive evidence, if duly
authenticated, of the validity of the will, upon an application to
prove it in Massachusetts, where the decedent left real estatp, al-
though no notice of the offer of the will for probate in the Con-
necticut court was given, the law of that state requiring no such
notice: Crippen v. Dexter, 79 Mass. (13 Gray) 330.
STATE V. DISTRICT COURT OF FIFTH JUDICIAL
DISTRICT.
[34 Mont. 112, 85 Pac. 872.]
JUSTICE'S COURT. — The Filing of a Notice of Appeal from
a justice of the peace to the district court under section 1760 of the
Code of Civil Procedure must precede, or be contemporaneous with,
the service thereof on the adverse party or his attorney, otherwise
the district court does acquire jurisdiction, (p. 52.5.)
JUSTICE'S COURT. — A Party Wishing to Appeal from a
justice of the peace must pursue the statutory method strictly, and
a failure to do so does not devest the justice's court of its jurisdic-
tion, (p. 528.)
Clark & Duncan, for the appellant.
John B. Clayberg and S. V. Stewart, for the respondents,
ii-* HOLLOWAY, J. In August, 1905, an action was com-
menced in the justice of the peace court of Union township,
Madison county, by Amos C. Hall et al. against J. H. Owen
et al. By agreement the venue was changed to Hot Springs
township, where the cause was tried, a verdict returned in
favor of the plaintiffs, and judgment entered on the verdict
on November 28, 1905. On December 1st a notice of appeal
was served on counsel for plaintiffs, and on December 4th
this notice was filed in the justice of the peace court. The
transcript of the justice's docket and the papers in the case
were lodged with the clerk of the district court, and on Janu-
ary 2, 1906, plaintiffs moved to dismiss the appeal on several
grounds, among which were, that the pretended appeal had
not been perfected as required by law, and that a notice of
appeal had not been filed and served upon the plaintiffs or
their counsel as required by law. This motion was overruled,
and the district court being about to proceed to try the cause.
March, 1906.] State v. District Court. 523
an application was made to this court for a writ of prohibition
to restrain the district court and the judge thereof from fur-
ther proceeding. An alternative writ was issued, and on
return an answer was filed. Upon the hearing it was con-
ceded that the petition and answer correctly state the facts.
The only question for determination is, Did the district
court acquire jurisdiction of the case ^f Hall et al. v. Owen
et al. ? Section 1760 of the Code of Civil Procedure provides
for appeals from the justice of the peace court to the dis-
trict court, and, respecting the manner of effecting such ap-
peals, prescribes: "The appeal is taken by filing a notice of
appeal with the justice or judge, and serving a copy on the
adverse party or his attorney." These appeals are purely
matters of statutory regulation (State v. Whaley, 16 Mont.
574, 41 Pac. 852, and cases cited), and it becomes important,
then, to know whether the order in which the notice of appeal
is filed and served is of consequence. The statute provides
that such notice must ^^^ be filed and served. In this in-
stance the notice was served on one day and not filed until
three days later.
The question is not a new one. It has been before this
court and before the supreme courts of California, Nevada,
Colorado, Idaho, and "Washington. An early California stat-
ute provided: "Art. 1071, sec. 337. The appeal shall be made
by filing with the clerk of the court, with whom the judgment
or order appealed from is entered, a notice stating the appeal
from the same, or some specific part thereof, and serving a
copy of the notice upon the adverse party or his attorney ' ' :
Wood's California Digest, 1850-58, p. 210. Construing this
statute in Hastings v. Halleck, 10 Cal. 31, the supreme court
of that state held that the filing of the notice of appeal must
precede or be contemporaneous with the service, and if the
service preceded the filing, the notice was of no effect and did
not perfect the appeal. This was followed in Buffendeau v.
Edmondson, 24 Cal. 94, Warner v. Holman, 24 Cal. 228, Moul-
ton V. Ellmaker, 30 Cal. 527, Boston v. Haynes, 31 Cal. 107.
Foy V. Domec, 33 Cal. 317, and in Lynch v. Dunn, 34 Cal.
518.
The statute of Nevada in force in 1873 was identical with
the California statute above: Nev. Comp. Laws, 1873, tit. 9,
c. 1, sec. 331. In Lyon County v. Washoe County, 8 Nev.
177, in construing this statute, the supreme court of Nevada
524 American State Reports, Vol. 115. [Mont.
said: "It is well settled that to render an appeal effectual
the filing of the notice of appeal must precede or be con-
temporaneous with the service of the copy; otherwise that
which purports to be a copy fails as such for want of an
original to support it. It is ordered that the appeal be dis-
missed." This decision has since been affirmed in Johnson
V. Badger M. & M. Co.,. 12 Nev. 261, and in Rees Gold etc. Min.
Co. V. Rye Patch Con. etc. Min. Co., 15 Nev. 341, and in
Brooks V. Nevada Nickel Syndicate, 24 Nev. 264, 52 Pac. 575,
decided in 1898.
The Colorado statute in force in 1879 is as follows: "Sec.
339. The appeal shall be made by filing with the clerk of the
court in which the judgment or order appealed froln is en-
tered, a notice stating the appeal from the same, or some spe-
cific part thereof, and executing an undertaking as hereinafter
prescribed, *** and serving a copy of the notice upon the ad-
verse party or his attorney": Colo. Code Civ. Proc, tit. 9,
c. 35, p. 125. With these provisions in force, the supreme
court of Colorado in Alvord v. McGauhy, 4 Colo. 97, held that
unless the filing of the notice of appeal precedes or is con-
temporaneous with the service thereof, it is ineffectual for any
purpose and the appeal is not perfected. This was followed
and approved in Daniels v. Daniels, 9 Colo. 133, 10 Pac. 657,
construing a statute then in force in all material respects the
same as the one considered in Alvord v. McGauhy, 4 Colo. 97.
The Idaho statute in force in 1875 was also identical with
the California statute above: Idaho Laws 1864, tit. 9, c. 1,
p. 141. This statute was considered in Slocum v. Slocum, 1
Idaho, 589, and the supreme court of Idaho said: "By this
statute it becomes necessary as a part of the notice that it
should be filed, and consequently it must precede or be con-
temporaneous with the service of a copy on the adverse party.
This has been decided in California under a statute similar
to ours, and in adopting its statute we adopt the construction
which has been given to it by the courts of that state. Before
the court can take jurisdiction of an appeal the filing of the
notice and the service of a copy thereof as prescribed by the
statute must be had, and before the notice is filed, it pos-
sesses none of the elements of a notice, and consequently there
can be no copy of it."
The code of Washington providing for appeals from a jus-
tice of the peace court to the superior court, in force in 1897,
March, 1906.] State v. District Court. ' 525
among other things provided: "Sec. 1631. Such appeal shall
be taken by filing a notice of appeal with the justice and
serving a copy on the adverse party or his attorney": Hill's
Annotated Statutes and Codes of Washington, Code Civ.
Proc, p. 612. This section was considered in State v. Su-
perior Court, 17 Wash. 54, 48 Pac. 733, where it is held that
the filing of the notice must precede the service, otherwise
the superior court does not acquire jurisdiction. A similar
provision respecting the filing and service of a statement was
considered in Erickson v. Erickson, 11^ Wash. 76, 39 Pac.
241, and the same condition reached.
^^"^ In 1876 we had in this state the following provision re-
specting appeals to this court from the district courts: "Sec.
370. The appeal shall be made by filing with the clerk of
the court in which the judgment or order appealed from is
entered, a notice stating the appeal from the same, or some
specific part thereof, and serving a copy of the notice upon
the adverse party or his attorney": Codified Statutes of
Montana, 7th Sess., 1871-72, tit. 9, c. 1, p. 107. This i=tat-
ute is identical with the California, Nevada and Idaho stat-
utes above, and in all material respects the same as the Wash-
ington and Colorado statutes quoted. In Courtright v. Per-
kins, 2 Mont. 404, this court said: "The statutes of Cali-
fornia and Nevada regulating appeals are the same as those
of this territory. The courts of these states hold that the
filing of the notice of appeal must precede or be contem-
poraneous with the service of the copy thereof to render an
appeal effectual. The failure of the appellants to comply
with the civil practice act in this proceeding is an error which
affects the jurisdiction of this court Appeal dis-
missed. ' '
Put it may be said that the statutes considered in the cases
cited above, except the Wa.shington case, relate to appeals from
courts of record, while the statute now under consideration
relates toappeals from a justice of the peace court, and that a
different construction should be given to it. The district court
evidently proceeded upon this theory, following the decisions
of the supreme courts of California and Idaho. After the
California cases above were decided, the supreme 'court of
California in Coker v. Superior Court, 58 Cal. 177, in con-
sidering sections 974 and 978 of the California Code of Civil
Procedure, which correspond with .sections 1760 and 1763 of
526 ' American State Reports, Vol. 115. [Mont.
our Code of Civil Procedure, without giving any reason for
its conclusion and without referring to its former decisions
above, announced the doctrine that in order to effectuate an
appeal from a justice of the peace court, three things are
necessary, namely: "The filing of a notice of appeal with
the justice, the service of a copy of the notice upon the ad-
verse party, and the filing of a written undertaking
The mere order in which they are done ^** within that time
is not material." This decision was followed in Hall v.
Superior Court, 68 Cal. 24, 8 Pac. 509 ; 71 Cal. 550, 12 Pac.
672. That the decision in the Coker case was wholly illogical
is demonstrated when the legitimate result of such holding is
reached, as was done in Dutertre v. Superior Court, 84 Cal.
535, 24 Pac. 284. In that case the undertaking on appeal
was filed eleven days before the notice of appeal was served,
and eleven days before the adverse party had any intimation
that an appeal would be taken, and notwithstanding the Cali-
fornia Code, section 978 above, specifically confers upon such
adverse party the right to except to the sufficiency of the
sureties within five days after the filing of the undertaking,
as does our section 1763 above, the court held, following the
Coker case (58 Cal. 177), above, that the appeal was never-
theless perfected, a conclusion which can have but one re-
sult, namely, the annulment of the provision permitting the
adverse party to except to the sufficiency of the sureties, for
that right is only in existence for five days after the under-
taking is filed; and yet a court has the same authority for
saying that the undertaking on appeal may be filed before
the filing or service of the notice, as it has for saying that
the notice may be served before it is filed. Either conclu-
sion is directly opposed to the express language or the evi-
dent meaning of the statute.
In Reynolds v. Corbus, 7 Idaho, 481, 63 Pac. 884, the same
doctrine is announced as in the Coker case (58 Cal. 177).
We think the result reached in the Dutertre case. (84 Cal.
535, 24 Pac. 284), above is nothing short of judicial legisla-
tion, or, what is the same thing, a construction by a court
of plain language to mean what it does not say. There is
not any reason apparent which will give to the same lan-
guage one meaning when it applies to the district court prac-
tice, and a contrary meaning when applied to the justice of
the peace court practice. Assuming that the words, "the
March, 1906.] State v. District Court. 527
order of service is immaterial," were intended to mean that it
is immaterial whether the notice is first filed or served, it is
worthy of consideration to note that it required an act of the
legislature to add those words to section 370 of the district
court practice act of 1871-72, and this court cannot under-
take to amend section 1760 above **® in the like particular,
and nothing short of an appropriate amendment would justify
the conclusion for which respondents are contending. That
legislation is needed is apparent, but this court ought not to
effect it by construction which does violence to the language
employed.
The history of our statute regulating appeals is of interest.
By an act approved January 12, 1872, a civil practice act
was adopted which contained section 370 quoted above, w^hich
applied to appeals to the supreme court. It also contained
section 411, which applied to appeals from the probate court,
and section 742, which applied to appeals from the justice of
the peace court. These sections were all of like import. By
an act approved February 16, 1877, a year after the decision
in Courtright v. Berkins, 2 Mont. 404, was rendered, sections
370 and 411 of the practice act of 1872 were repealed, and
new sections adopted in lieu thereof. Section 409, enacted
in lieu of 370, above, was of like import, but to it was added
the clause "the order of service is immaterial," etc. This
act re-enacted section 411 above in terms, as section 437, and
did not assume to change in any manner section 742 of the
practice act of 1872. These sections of the act of 1887, and
section 742 above, were carried into the revision of 1879,
first division, as sections 409, 437 and 802, respectively; and
into the Compiled Statutes of 1887, as sections 422, 450 and
822, first division. The section respecting appeals from the
probate court became nugatory upon the adoption of the
constitution. The sections respecting appeals from the dis-
trict court and from the justice of the peace court were car-
ried into the Code of Civil Procedure of 1895, as sections
1724 and 1760, respectively.
It is to be observed that since 1877 there has not been any
material change in any of these sections referred to; that
while the section respecting the method to be pursued in ap-
pealing from the district to the supreme court was amended
in 1877, the sections referring to appeals from the justice of
the peace to the district court has continued in force without
528 American State Reports, Vol. 115. [Mont.
any substantial alteration for more than thirty years, and
has been re-enacted over and over again without modifica-
tion and with the full ^*® knowledge which the legislatures
had of the construction given a similar statute as early as
1876. We must presume, therefore, that in amending the
district court practice act and repeatedly re-enacting the jus-
tice of the peace practice act without alteration, the legis-
lature intended that the construction given in Courtright v.
Berkins, 2 Mont. 404, should apply to the practice act regu-
lating appeals from a justice of the peace court; and as it
is the province of this court to determine the intention of
the legislature, if possible, and apply the law as thus ascer-
tained, we are not warranted now in departing from the
former holding of this court and from the rule announced by
other courts in construing like statutory provisions. Neither
do we think that the provisions of sections 778 and 3453 of
the Code of Civil Procedure have any application to the ques-
tion presented in this proceeding.
We are satisfied that the provisions of section 1760 above
were intended to be, and are in fact, mandatory, and that a
party wishing to appeal from a justice of the peace court
must pursue the statutory method strictly, and a failure to
do so does not devest the justice of the peace court of its
jurisdiction : 2 Ency. of PI. & Pr. 16 ; Green v. Castello. 35
Mo. App. 127 ; Sholty v. Mclntyre, 136 111. 33, 26 N. E. 655.
As disclosed by the record before us, the district court of
Madison county was without jurisdiction to try the case of
Hall et al. v. Owen et al., and a peremptory writ of prohibi-
tion should issue in conformity with the prayer of the peti-
tion. The writ is directed to issue accordingly.
Writ issued.
Mr. Chief Justice Brantly and Mr. Justice Milbum con-
cur.
Rehearing denied June 16, 1906.
The Decision in the Principal Case seems reasonable on priticipl*^*
and, as the cases therein cited indicate, it is supported by the weigut
of authority.
March, 1906.] Tanner v. Bowen. 529
TANNER V. BOWEN.
[34 Mont. 121, 85 Pac. 876.]
TOET — Release of One of Two Wrongdoers. — If A lets his
horse to B, who is a livery-stable keeper, and B hires the animal to
C, whose alleged negligence causes its death, whereupon A demands
a settlement from both B and C, and B., acknowledging his liabil-
ity, pays A the value of the horse and takes an assignment of A's
supposed cause of action against C , B cannot maintain an action
against C for the tort, since A, having been paid and satisfied by B.
has no cause of action which he himself could assert against C, and
therefore his assignee can have none. (p. 531.)
E. L. Bishop, for the appellant.
123 HOLLOWAY, J. The facts disclosed by the record
are that John H. Devlin was the owner of a certain horse and
let it to the plaintiff Tanner, who was a livery-stable keeper
at Conrad, Teton county, for use in his livery business. The
defendant Bowen hired a team and buggy from Tanner on
December 1, 1904, to drive to Chouteau, and the Devlin horse
and another were furnished to him by Tanner. Bowen made
the trip with the team to Chouteau, and on the following
morning it was ascertained that the Devlin horse had died.
Devlin asserted a claim for the value of the horse against
both Tanner and Bowen and demanded a settlement for the
.iame from each. Upon the trial it was made to appear that
Tanner admitted Devlin's claim, acknowledged his own lia-
bility, paid to Devlin the value of the horse in satisfaction of
Devlin's claim, took an assignment of Devlin's cause of action
a.s against Bowen, and as such assignee brought this action to
recover from Bowen the value of the horse, alleging in his
complaint that the death of the horse was caiLsed by negli-
gence on the part of Bowen. The answer denies any negli-
gence on Bowen 's part. A verdict was returned in favor of
the plaintiff, a judgment entered thereon, and from the judg-
ment and an order denying him a new trial, the defendant
appealed.
The only error assigned in the brief of appellant is that the
court erred in refusing to instruct the jury to return a ver-
dict for the defendant as requested by him. In discussing
this alleged error, counsel for appellant makes three distinct
contentions, only one of which it will l)e neees.sary to consider.
It is said that plaintiff Tanner, having paid to Devlin the
Am, St. Kep., Vol. 115-34
530 American State Reports, Vol. 115. [Mont.
amount of Devlin's claim in satisfaction of the same, thereby-
discharged Bowen from liability. As to whether Tanner was
in fact liable might be a question, but this liability was ad-
mitted. The payment by Tanner to Devlin and the attempted
assignment '^'* of Devlin's cause of action operated as a
complete satisfaction of Devlin's claim and a release of Tan-
ner from any further liability. In Leddy v. Barney, 139
Mass. 394, 2 N. E. 107, it is said: "The validity and effect
of a release of a cause of action do not depend upon the
validity of the cause of action. If the claim 's made against
one and released, all who may be liable are discharged, whether
the one released was liable or not." The principle underlying
this decision is that if, when the release was given, Devlin was
asserting against Tanner a liability for the same act for which
Tanner now asserts the liability of Bowen, the two causes of
action are the same and the release of one discharges the
other. The decision above is referred to with approval, and
the doctrine there announced is again asserted, in ]\Tiller v.
Beck, 108 Iowa, 575, 79 N. W. 344, and numerous other cases
are cited in support of the conclusion reached: 1 Cyc. 317.
If Devlin, instead of merely presenting his demand against
Tanner and Bowen separately, had sued each, as he might have
done, and had recovered a judgment against each, and if Tan-
ner had then paid the judgment against himself and had
taken an assignment from Devlin of the judgment against
Bowen, the situation would not have been different from that
which is presented by this record, and under those circum-
stances it is quite clear that the judgment against Bowen could
not have been enforced.
A case directly in point is Gross v. Pennsylvania etc. R. Co.,
47 N. Y. St. Rep. 374, 20 N. Y. Supp. 28. The plaintiff recov-
ered separate judgments against the Pennsylvania etc. Rail-
road Company and the Central New England etc. Railroad
Company for an injury caused by the negligent acts of those
companies. The New England company paid the judgment
against it and took an assignment of the judgment against the
Pennsylvania company. The Pennsylvania company then
moved the court to cancel the judgment against it. In re-
versing the trial court for refusing this motion, the supreme
court of New York said : "It is claimed by the assignee of the
judgment that, as between it and the defendant (the Penn-
^Ivania company), it was the ^^'^ negligence of the latter
March, 1906.] Tanner v. Bowen. 531
that caused the injury, .... and that hence it is not pre-
cluded from recovering indemnity or contribution from its
cotort-feasor. This may be, but has no effect on this appli-
cation. On this motion the Central New England etc. Com-
pany has but the same rights as its assignor, the plaintiff.
As the plaintiff could not collect anything from the defendant
after satisfaction by the other company, his assigns cannot."
Section 571 of the Code of Civil Procedure provides: "In
the case of an assignment of a thing in action, the action by
the assignee is without prejudice to any setoff or other defense
existing at the time of, or before, notice of the assignment,"
etc. If, then, when Devlin assigned his pretended cause of
action against Bowen to Tanner, he (Devlin) had been paid
by Tanner for all damages sustained by him, under the cir-
cumstances of this case the defense of payment or satisfaction
could have been interposed by Bowen, and when these facts
were developed upon the trial, the defendant's request for an
instruction for a verdict in his favor should have been granted.
Devlin, having been paid and satisfied by Tanner, did not
have any cause of action against Bowen which he could as.sert
in court himself, and, of course, if he could not assert it, his
assignee could not.
The judgment and order are reversed, and the cause re-
manded for further proceedings.
Reversed and remanded.
Mr. Chief Justice Brantly concurs.
Mr. Justice Milbum, not having heard the argument, takes
no part in the foregoing decision.
For Authorities bearing upon the decision in the principal case, see
the notes to Louisville etc. Mail Co. v. Barnes, 111 Am. St. Rep.
281; Abb v. Northern Pac. Ry. Co., 92 Am. St. Rep. 872.
532 American State Reports, Vol. 115. []\Iont.
KNIGHTS OF MACCABEES v. SACKETT.
[34 Mont. 357, 86 Pac. 423.]
BENEFIT SOCIETY — Change of Beneficiaries. — Waiver of
Irregularities. — A waiver by a mutual benefit association of a non-
compliance with its by-laws by a member in clianging his benefic-
iaries must, to be effective, occur during his lifetime; but if such
Doncompliance is so waived, the former beneficiary cannot, after the
death of the insured, take advantage thereof, (p. 534.)
BENEFIT SOCIETY — Right to Change Beneficiaries. — A mem-
ber of a mutual benefit association may change his beneficiaries; but,
as a rule, to which there are exceptions, he must proceed in accord-
ance with the regulations contained in the policy and by-laws, and
any material deviation therefrom will invalidate the transfer,
(p. 534.)
BENEFIT SOCIETY — Change of Beneficiaries — Where not
Effected. — If the by-laws of a benefit association provide that a
change of beneficiaries takes effect upon a delivery to the local
record-keeper of a written request for a change, and a member de-
posits his application for a change in the mail, the change is not
effected if he dies before the delivery of the mail to the record-
keeper. By making the mail his agent, he assumes the risk of such
a failure of or delay in the delivery of his request as will prevent its
becoming effectual, (p. 536.)
BENEFIT SOCIETY — Change of Beneficiaries — When not
Effected. — Where the by-laws of a benefit association provide that a
change of beneficiaries takes effect upon a delivery to the local
record-keeper of a written request for a change, and a member de-
posits such a request in the mail, which does not reach the post-
office to which it is destined until after his death, though it is actu-
ally delivered on the day of such death only a few hours after its
occurrence, the contemplated change does not affect the rights of the
original beneficiary, (p. 537.)
O. F. Goddard, for the appellant.
W. M. Johnston, for the respondent.
s«i HOLLOWAY, J. Floyd L. Sackett was a member of
the order of the Knights of the Maccabees of the World, hav-
ing his membership in the local tent at Park City, Montana.
He carried insurance on his life in the association to the
amount of one thousand dollars, his wife, Fannie Sackett, be-
ing named in the certificate of insurance as beneficiary. For
some time prior to May, 1905, Floyd L. and Fannie Sackett
had not lived together. The former made his home at ^**^
Yule, North Dakota. The latter lived at Park City, Montana.
Prior to May, 1905, Floyd L. Sackett wrote a letter to his
mother at Park City, requesting her to call on the local record-
keeper of the tent of which Floyd L. Sackett was a member,
June, 1906.] Knights op Maccabees v. Sackett. 533
and ask him to change the beneficiary in his certificate of in-
surance from Fannie Sackett to Clarence M. Sackett and wife.
This request was accompanied by the required fee of fifty
cents. The request was made of the local record-keeper by
the mother of the insured, but she was thereupon informed
that under the by-laws of the order the wife of Clarence M.
Sackett could not be named as a beneficiary, and the record-
keeper then filled out a proper application for change of
beneficiary upon a blank form furnished by the association
and mailed the same to Floyd L. Sackett, to be by him duly
executed. This he did on May 8, 1905, and in the certificate
he named his brother, Clarence M. Sackett, as sole beneficiary^
and deposited this application in the postoffice at Yule, North
Dakota, properly addressed to the local record-keeper at Park
City. The letter containing this application was carried to
Sentinel Butte, the nearest railroad point, in the usual course
of business, and was taken by the westbound Northern Pa-
cific train No. 3 on May 9th, This train passed through
Park City in the early morning of May 10th; but train No.
3 in the course of its business did not leave mail at Park City,
but carried the mail for that point on west until it met train
No. 2, eastbound, when the mail for Park City was trans-
ferred to train No. 2 and by that train left Park City. The
letter containing this application was therefore not delivered
at Park City until May 10th at about 3 P. M., and was re-
ceived by the local record-keeper immediately thereafter. In
the meantime, however, Floyd L. Sackett on May 10th re-
ceived a fatal wound and died at 9 :45 A. M, of that day.
Not knowing of Floyd L. Sackett 's death, the local record-
keeper forwarded the application with the fee to the supreme
tent at Point Huron, Michigan, where on May 17th a new
certificate was issued, in which Clarence M. Sackett was named
as beneficiary. This new ^**^ certificate was received at Park
City on May 21st and was delivered to Clarence M. Sackett.
After the death of Floyd L. Sackett both Fannie and Clar-
ence M. Sackett made claim to the insurance money, and, in
order to be relieved from annoyance, the governing body of
the association commenced this action, setting forth these
facts and asking that the claimants be brought into court and
made to litigate their respective claims. The money was pai<l
into court, the plaintiff association relieved from further lia-
bility, and the contending claimants then agreed upon the
534. American State Reports, Vol. 115. [Mont.
facts substantially as herein set forth. Upon this agreed
.statement of facts the court found the issues in favor of Fan-
nie Sackett, and judgment in her favor was entered, from
which Clarence M. Sackett appealed.
The contentions of appellant are succinctly set forth in his
brief as follows: "Upon the foregoing statement of facts we
assert the following propositions: 1. The deceased had a
right to change the beneficiary in his certificate of insurance
by complying with the by-laws of the association ; 2. If he
failed to comply with all of the by-laws of the association re-
garding such change, and the association waived such re-
quirements not complied with, the association alone hav-
ing the right to insist upon a full compliance with its by-
laws, the respondent cannot take advantage of such failure;
3. The deceased did all he could before his death to make
the change of beneficiary from his wife to his brother (the
appellant.) The association, by voluntary interpleading;
and paying the money into court, has waived noncompliance
with its by-laws, and the court will consider that done which
ought to be done."
1, The first contention may be conceded. It is too well set-
tled to be open to argument.
2. As a legal proposition, the second contention is not stated
accurately. It should be to the effect that, if the insured failed
to comply with all of the by-laws of the association regarding
such change, and the association during his lifetime waived
such requirements not complied with, the association alone
having the right to insist upon a full compliance with its by-
laws, the former ^^^ beneficiary could not take advantage of
such failure. As thus stated there cannot be any question of
the correctness of this contention, and as we understand him,
counsel for respondent does not controvert the same.
That any waiver by the association must occur during the
lifetime of the insured is too well settled in reason and by the
authorities to require extended notice. The association con-
tracts that it will at the death of the insured pay to the person
named as beneficiary the amount of the policy. It is a con-
tract between the association and the insured for the benefit
of a third person, and the only interest of the beneficiary is
in expectancy, until the death of the insured vests in the bene-
ficiary the right to claim the amount of the benefit, and im-
mediately upon the happening of that contingency a right of
action in favor of the beneficiary arises which the courts will
enforce. This being so, the reason for the rule that after the
June, 1906.] Knights op Maccabees v. Sackett. 535
death of the insured the association cannot waive anything to
the prejudice of the beneficiary is perfectly apparent; and
that this is the rule is beyond question : 1 Bacou on Bene-
fit Societies and Life Insurance, sec. 308 ; Fink v. Fink, 171
N. Y. 616, 64 N. E. 506; McLaughlin v. McLaughlin, 104 Cal.
171, 43 Am. St. Rep. 83, 37 Pac. 865 ; Wendt v. Iowa LegiOn
of Honor, 72 Iowa, 682, 34 N. W. 470 ; 3 Am. & Eng. Ency.
of Law, 2d ed., 998. By paying the money into court the
association waived, so far as it could do so, the failure of the
insured to comply strictly with the by-laws of the order; but
such waiver could not impair rights which became vested upon
the death of the insured.
3. With respect to mutual benefit insurance, it is well set-
tled that the insured may at will change the beneficiary. It is
a general rule that in making such change the insured must
proceed in accordance with the regulations contained in the
policy and by-laws of the association, and any material de-
viation from the course thus marked out will invalidate the
transfer; but to this rule certain exceptions have been noted.
In a leading case upon this subject these exceptions are an-
nounced as follows:
3G5 <«2 jf ^jjg society has waived a strict compliance with
its own rules, and in pursuance of a request of the insured to
change his beneficiary, has issued a new certificate to him, the
original beneficiary will not be heard to complain that the
course indicated by the regulations was not pursued.
"2. If it be beyond the power of the insured to comply
literally with the regulations, a court of equity will treat the
change as having been legally made.
"3. If the insured has pursued the course pointed out by
the laws of the association, and has done all in his power to
change the beneficiary; but, before the new certificate is
actually i.ssued, he dies, a court of equity will decree that to
be done which ought to be done, and act as though the certi-
ficate had been issued": Supreme Conclave Royal Adeiphia
V. Cappella (C. C), 41 Fed. 1.
Neither the first nor the second of these exceptions is relied
upon here. The last contention of appellant, however, is that
Floyd L. Sackett had brought himself within the third ex-
ception above, and a court of equity ought to decree the change
of beneficiary from Fannie to Clarence M. Sackett to have
taken place prior to the death of Floyd L. Sackett. We are
536 American State Reports, Vol. 115. []\Iont.
called upon to say, then, whether, under the facts agreed
upon, Floyd L. Sackett had done all that he could do prior
to his death to effect the change of beneficiary.
The by-laws of this association provide the method to be
pursued by the insured in order to make this change. They
also provide that the change shall take effect upon delivery to
the local record-keeper of the old certificate, or, in case of its
loss, proof of such loss, with a written request for such change,
designating the new beneficiary. In this instance the old cer-
tificate was not lost, but it must be conceded that the associa-
tion could waive failure to deliver it. The first application
for a change made by Floyd L. Sackett did not comply with
the by-laws of the association in a number of respects, and
particularly in that it sought to make the wife of Clarence
M. Sackett a beneficiary, whereas by the by-laws of the order
she could ^®^ not be such; and the association not only did
not waive these defects, but refused to make the change.
However, the local record-keeper sent to Floyd L. Sackett
an application for change, to be executed by the insured, in
which he should name some qualified person as beneficiary.
It does not appear that there was an obligation resting on the
local record-keeper to do this, 'and it was apparently a gratu-
itous act on his part. This blank application was received by
Floyd L. Sackett and duly executed by him. He then at-
tempted to deliver it to the local record-keeper as he was re-
quired to do. He chose the United States mail as the agent
to make the delivery for him. He might have taken it
himself, or .sent it by messenger personally. But in any
event he had to assume the risk that the agent employed would
fail to deliver the request at all, as in case of destruction of
the mail en route, or the death of the messenger, or that de-
livery would not be made until a date so late as to be of no
effect. No importance whatever is to be attached to the fact
that he selected the mail as the agent to make this delivery
for him. It was nevertheless his agent : Peabody v. Satterlee,
166 N. Y. 174, 59 N. E. 818, 52 L. R. A. 956; :\rcCorkle v.
Texas Ben. Assn., 71 Tex. 149, 8 S. W. 516. In this instance
the agent which he chose delivered his request in the ordinary
course of business ; but before delivery was made, the insured
died.
At the time of the death of the insured his request for such
change had not been delivered ; and the case is not made differ-
June, 1906.] Knights of Maccabees v. Sackett. 537
ent by the fact that it was actually delivered on the day of
his death and only about six hours after that event occurred.
If delivery one hour after his death would work the change
of beneficiary, then delivery a week or a month after death
would be equally effective. But such is not the law. The
interest of the beneficiary attaches instantly upon the death
of the insured, and the question whether a change has been
effected must be determined as of that particular instant of
time. In this instance there was simply a failure on the part
of the agent employed by the insured to make the delivery
to the local record-keeper before the death of the insured.
367 ^vith reference to that particular point of time the fail-'
ure was just as complete as it would have been had the lettef
containing the request been lost long before the train carry-
ing it reached Park City. Had the letter been delivered
into the postoffice at Park City prior to the death of the in-
sured, and there merely awaited the call of the local record-
keeper for his mail, a case akin to those wherein equity has
applied the rule that that will be deemed done which ought
to have been done might have been presented, and the trans-
fer made to date from the time when it would have become
effective had the local record-keeper promptly called for his
mail. Instances of the character of the case just supposed
are to be found in the reported cases. Jory v. Supreme Coun-
cil, 105 Cal. 20, 45 Am. St. Rep. 17, 38 Pac. 524, 26 L. R. A.
733 , Luhrs v. Luhrs, 123 N. Y. 367, 20 Am. St. Rep. 754, 25
N. E. 388, 9 L. R. A. 534, Hall v. Allen, 75 :\Iiss. 175, 65 Am.
St. Rep. 601, 22 South. 4, Sanborn v. Black, 67 N. 11. 537,
35 Atl. 942 , Hancock Mut. L. I. Co. v. White, 20 R. I. 457, 40
Atl, 5, and Supreme Conclave Royal Adelphia v. Cappella
(C. C), 41 Fed. 1, are all cases of this character; but every
one is easily distinguishable from the case now under con-
sideration.
When Floyd L. Sackett died he had not delivered to the lo-
cal record-keeper his request for a change. He had intended
to do so, but the agency selected by him failed to deliver the re-
quest until alter his death. The failure of his agent was his
failure. When he died, the title of Fannie Sackett to this
money became ab.solute, and the receipt of the request by the
local keeper subsequently to the death of Floyd L. Sackett
did not affect her right; for the association had become her
debtor for the full amount of the insurance. The case of
538 American State Reports, Vol. 115. [Mont.
Fink V. Fink, 171 N. Y. 616, 64 N. E. 506, is well considered,
is directly in point here, and, in our opinion, correctly states
the rule as we have announced it.
The judgment of the district court is affirmed.
Mr. Chief Justice Brantly and Mr. Justice Milbum concur.
The Beneficiaries Named in a Mutual Benefit Society does not ordin-
arily acquire a vested interest in the mortuary fund during the life-
time of the member and he may change his beneficiaries in the man-
ner prescribed by the rules and regulations of the society. Upon the
death of the member the beneficiary's rights become vested: Peter-
son V. Gibson, 191 111. 365, 85 Am. St. Rep. 263; Independent Foresters
'▼. Keliher, 36 Or. 501, 78 Am. St. Rep. 785; Courtois v. Grand Lodge
af A. O. U. W., 135 Cal. 552, 87 Am. St. Rep. 137.
In Making a Change of Beneficiaries, a member of a benefit society
must, as a general rule, comply with the rules and regulations pre-
scribed by the society: See the note to Lake v. Minnesota etc. Assn.,
52 Am. St. Rep. 561.
McCAULEY V. JONES.
[34 Mont. 375, 86 Pae. 422.]
MORTGAGE FORECLOSURE— Delay in Making Sherifif's
Deed. — Where the purchaser at a foreclosure sale goes into possession
at the expiration of the one year allowed for redemption, a deed exe-
cuted on his application therefor nearly four years afterward by the
sJieriff, as successor of the sheriff making the sale, is valid notwith-
standing the delay, no offer to redeem having been made. (p. 539.)
EJECTMENT — Title Acquired Pendente Lite. — The recovery
of the plaintiff in ejectment may be defeated by the defendant show-
ing title in himself acquired after the commencement of the action,
(p. 539.)
MORTGAGE FORECLOSURE — ^Deed by Sheriff 's Successor. —
Under section 1237 of the Code of Civil Procedure, which makes it
the duty of the sheriff who conducts a foreclosure sale, or if he id
no longer in ofiice, then his successor, to make a deed to the purchaser,
any sheriff succeeding the one who makes the deed is the "successor"
of such officer, (pp. 539, 540.)
Maury & HogevoU, for the appellant.
C. F. Kelley, for the respondent.
»''« TkllLBURN, J. Appeal from the judgment. The
plaintiff sued the defendant in ejectment. The complaint is
an ordinary one in ejectment. From the answer and repli-
cation it appears that the plaintiff was at one time the owner
of certain real estate, and on September 21, 1895, made a
June, 1906.] McCaulet v. Jones. 539
mortgage to Henry Knippenberg to secure a loan. The
mortgage and notes were assigned to William D. Clark and
upon default, the sheriff of the county, on the twenty- fourth
day of March, 1900, sold the property at sheriff's sale under
the mortgage to Clark, the sheriff being one Regan. On
March 25, 1901, ^"^"^ the previous day being Sunday, sheriff
Regan executed and delivered to Clark a deed for the prop-
erty described, the usual certificate of sale having been made,
delivered and properly filed at the time of the sale. On Janu-
ary 19, 1905, a new deed was made by the then sheriff, John
J. Quinn, to Clark. At the time of the delivery of the first
sheriff's deed Clark went into possession of the property and
afterward conveyed to respondent. The district court of
Silver Bow county. Honorable George M. Bourquin, judge,
gave judgment in favor of the defendant.
Seven questions are raised in the brief of the appellant.
The only one necessary to be considered is whether or not the
Quinn deed conveyed title to the grantee therein. If the .
Regan deed was void on account of having been made on ^Mon-
day after the Sunday which was the last day of the year of
redemption, then we should consider the case as if no deed
had been made at all on the ]\Ionday. The year of redemp-
tion is for the benefit of the debtor in the mortgage suit. The
purchaser went into possession after the expiration of the
year of redemption. It does not appear that at any time be-
fore the second deed was executed there was any offer to re-
deem, even if such an offer could have availed the mortgagor
after the expiration of the period of redemption. The law
does not require the purchaser at a mortgage foreclosure sale
to apply for the deed immediately upon the expiration of the
year.
The defendant in this case applied for the second deed from
the sheriff within a reasonable time, and in our opinion the
deed was valid: 17 Cyc. 1743. A recovery by plaintiff in
ejectment may be defeated by defendant showing title in him-
self, and this is so althoutrh he acquire the same subsequent to
the commencement of the action : 15 Cyc. 62. This action
was commenced on September 12, 1904, and the second deed
from the sheriff was made and delivered pendente lite. Un-
der section 1237 of the Code of Civil Procedure it is the duty
of the sheriff who made the sale, if he still be in oiTice, but if
not, then of his successor, to •*''* nuike the deed. Any sheriff
540 American State Reports, Vol. 115. [Mont.
succeeding the sheriff who made the first deed was the suc-
cessor of such oHicer.
We find no error in the decision of the court below.
Affinned.
Mr. Chief Justice Brantly and Mr. Justice Holloway con-
cur.
In Ejectment the Defendant may by proper pica show a title ac-
ruirpd by him after the commencement of the suit: Pollard v. Haurick,
74 Ala. 334; Roper v. McPadden, 48 Cal. 346; Robinson v. Parker,
U Miss. (3 Smedea & M.) 114, 41 Am. Dec. 614.
STATE V. DISTRICT COURT OF TENTH JUDICIAL
DISTRICT.
[34 Mont. 535, 88 Pac. 44.]
EMINENT DOMAIN — Selection of Eoute Along Eiver. — In its
exercise of the right of eminent domain, a railroad company has the
right to select the particular route which it deems most advanta-
geous; and, having selected a route with which a river interferes, it
has the power to secure land necessary for its use in constructing and
maintaining the road on that route in such a manner as to afford
security for life and property, (p. 544.)
EMINENT DOMAIN — Change of Eiver Channel. — The chang-
ing of the channel of a river, which otherwise would have to be
crossed by a railroad in order to follow the route selected, when
necessary to make the road secure for life and property, is part of
the "construction" of the road itself. Hence the land necessary to
make such change may be condemned, (pp. 545, 546.)
Fred H. Hathhom and Harry A. Groves, for the appellant.
M. S. Gunn, for the respondent.
^^T HOLLOWAY, J. The Chicago, Milwaukee and St.
Paul Railway Company of Montana, having surveyed a route
for a line of railroad and '^'^^ a telegraph line from a point
on the eastern boundary line of Montana, in Custer county,
through the state to a point on the western boundary line, in
Ravalli county, which route passes through the ranch of the
Bloomington Land and Livestock Company, in Meagher
county, and, having failed to agree with the land company
upon the damages to be paid for the land sought by the rail-
way company, commenced proceedings in condemnation in
the district court.
Dec, 1906.] State v. District Court. 541
The railway company seeks to secure a strip of land one
hundred feet in width for a right of way, certain strips
twenty-five feet in width in addition thereto for cuts and fills,
and also a strip of two hundred feet in width for the purpose
of changing the channel of the Musselshell river. A complaiiit
was filed by the railway company setting forth the facts rela-
tive to its use for the lands sought to be acquired. The de-
fendant land company appeared and filed a demurrer, which
was overruled, and, after a hearing had before the judge of
the court, an order was made appointing appraisers to de-
termine the compensation to be paid by the railway company
on account of the taking of the several pieces or parcels of
land sought. Thereafter the commissioners made a report as
required by law, and the railway company paid into court for
the land company the amounts so fixed by the commissioners
as compensation. Thereupon the land company applied to
this court for a writ of supervisory control to annul the order
overruling the demurrer of the land company, and also the
order of the judge appointing commissioners. An order to
show cause was issued, and, upon the return, the matter was
submitted to this court upon the petition filed herein, and a
demurrer thereto interposed on behalf of the district court
and the judge thereof.
The question submitted for determination is. Did the rail-
way company seek to acquire land which it is not entitled to
acquire by the exercise of the right of eminent domain ? The
subjoined map or diagram shows the situation presented by
this application.
Big w^tnfir.r
IH ZOC/,./^Cu..,Uf Ch...^
•^^ That the railway company could acquire, by condem-
nation, the laud sought for a right of way one hundred feet
1
542 American State Reports, Vol. 115. ' [Mont.
in width is not controverted. "We are now asked to determine
whether it may also invoke the aid of the power of eminent
domain to acquire land in addition to the right of way for
cuts and embankments, and for the purpose of changing the
channel of the Musselshell river. This question must be de-
termined from the provisions of our Civil Code and Code of
Civil Procedure, the portions of which directly applicable are
as follows:
Civil Code, section 526: "No corporation shall acquire or
hold any more real property than may be reasonably neces-
sary for the transaction of its business, or the construction of
its works, except as otherwise specially provided. A corpora-
tion may acquire real property as provided in the Code of
Civil Procedure, title 7, part 3."
Section 890: "Any railroad corporation shall be author-
ized to locate, construct, maintain and operate a railroad with
a single or double track, with such sidetracks, turnouts, ma-
chine-shops, offices and depots as may be necessary between
any points it may select within the places named in the
articles of incorporation as termini of such road," etc.
Section 894: "Every railroad corporation has power: 1.
To cause such examination and surveys to be made as may be
necessary to the selection of the most advantageous route for
the railroad ; and for such purposes their officers, agents, and
employees **'**^ may enter upon the lands or waters of any
person, subject to liability for all damages which they do
thereto.
"2. To receive, hold, take, and convey, by deed or other-
wise, as a natural person, such voluntary grants and dona-
tions of real estate and other property which may be made
to it to aid and encourage the construction, maintenance and
accommodation of such railroad.
"3. To purchase,. or by voluntary grants or donations to
receive, enter, take possession of, hold and use all such real
estate and other property as may be absolutely necessary for
the construction and maintenance of such railroad, and for all
stations, depots and other purposes necessary to successfully
work and conduct the business of the road.
"4. To lay out its road, not exceeding in width one hundred
feet on each side of its center line, unless a greater width be
required for the purpose of excavation or embankment, and to
construct and maintain the same, with a single or double
Dec. 1906.] State v. District Court, 543
track, and with such appeudages and adjuncts as may be nec-
essary for the convenient use of the same.
"5. To construct their [its] road across, along, or upon any
stream of water, watercourse, roadstead, bay, navigable stream,
street, avenue, or highway, or across any railway, canal, ditch
or flume, which the route of its road intersects, crosses or runs
along, in such manner as to afford security for life and prop-
erty; but the corporation shall restore the stream or water-
course, road, street, avenue, highway, railroad, canal, ditch or
flume thus intersected to its former state of usefulness, as near
as may be, or so that the railroad shall not unnecessarily im-
pair its usefulness or injure its franchise. 6
* * 7. To purchase lands, timber, stone, gravel, or other mate-
rials, to be used in the construction and maintenance of its
road and all necessary appendages and adjuncts, or acquire
them in the manner provided in title 7, part 3, Code of Civil
Procedure, for the condemnation of lands ; and to change the
line of its road, in whole or in part, whenever a majority of
the directors so determine, as is provided hereinafter; but no
such '*'** change must vary the general route of such road, as
contemplated in its articles of incorporation. 8
"9. To erect and maintain all necessary and convenient
buildings, stations, depots, fixtures, and machinery for the ac-
commodation and use of their passengers, freight and busi-
ness. ' '
Section 901 : " It shall be lawful for such corporation, when-
ever it may be necessary in the construction of its road to cross
any road or stream of water, to divert the same from its
present location or bed; but such corporation shall, without
unnecessary delay, place such road or stream in such condition
as not to impair its former usefulness."
Section 2211 of the Code of Civil Procedure, as amended by
act of March 7, 1899 (Session Laws 1899, p. 135) : "Subject
to the provisions of this title, the right of eminent domain
may be exercised in behalf of the following uses, .... rail-
roads .... telegraph lines."
In order to reach a conclusion we have considered these pro-
visions as all parts of one statute, and that, too, without regard
to the division into sections and subsections. Resort to the
authorities is of little assistance. We must determine what
these statutes mean, and to that end we have arrived at what
we believe was the legislative intent, so far as applicable to the
544 American State Reports, Vol. 115. [Mont.
question before us, and that intent is fairly stated by treating
all the sections above as one statute, and paraphrasing it as fol-
lows:
Every railroad corporation has power: 1. To select the route
which it deems most advantageous; 2. To receive donations of
real estate in aid of the construction and maintenance of the
road ; 3. To purchase or receive by donation real estate neces-
sary for the construction and maintenance of the road; 4.
To secure such real estate as is necessary for sidetracks, for
turnouts, for machine-shops, for offices, for depots, for sta-
tions, for the convenient buildings, fixtures, and machinery for
its business, and for other adjuncts and appendages of like
character; *^^ 5. To secure land, timber, stone, gravel, and
other material to be used in the construction and maintenance
of the road ; 6. To build its road along, upon, or across any
stream and to divert any stream from its present bed when-
ever in the construction of its road it is necessary to cross
such stream.
These are the grants to the company. The limitations upon
the powers granted and the exactions imposed upon the com-
pany are: 1. Its right of way shall be limited to two hun-
dred feet in width, treating the right of way independently
of the grant for cuts and embankments; 2. The amount of
real estate which it may hold for any or all of the other ob-
jects or purposes named shall be limited to the necessities
of the road ; 3. The road shall be so constructed as to afford
security to life and property; 4. Whenever a stream is in-
terfered with, the company shall restore the same to its former
state of usefulness, as near as may be, or so as not unneces-
sarily to impair its former usefulness.
When this company selected its route along and across the
Musselshell river, it did not lie in the mouth of this petitioner
to say that another route could have been chosen : 1 Current
Law, 1009; 3 Current Law, 1193; Dallas v. Hallock, 44 Or.
246, 75 Pac. 204; 2 Lewis on Eminent Domain, 2d ed., 891.
The company had the right to select the particular route which
it deemed most advantageous, and, having selected such a
route, with which the Musselshell river interfered, it has power
to secure land necessary for its use in con.structing and main-
taining the road on such route in such manner as to afford
security for life and property.
We think counsel for relator are in error in assuming that
subdivision 4 of section 894 limits the power of the railway
Bee. 1906.] State v. District Court. 545
company to condemn land or other property for railroad pur-
poses generally. The power is granted the railway company
to secure land sufficient to construct and operate its road,
•^^^ with all necessary sidetracks, turnouts, machine-shops,
offices, depots, and such other adjuncts and appendages as are
necessary, and two limitations only are placed upon this
grant of power: 1. The right of way shall not exceed a strip
of land two hundred feet in width, except where a greater
width is required for excavations and embankments; and 2.
The land for excavations, embankments, sidetracks, turnouts,
shops, etc., shall not exceed in extent the amount necessary
for such uses or purposes.
Whether the grant contained in subdivision 7 is the same as
that in subdivision 3, or whether the grant in subdivision 3 re-
fers to lands upon which the road and its appendages and ad-
juncts rest, while subdivision 7 refers to lands the very soil
and substance of which are to be used in the construction of
the road and its maintenance, need not be considered, for we
are of the opinion that any land necessary for the construction
and maintenance of the road and its adjuncts and appendages
may be acquired under subdivision 3 by purchase or by volun-
tary grant or donation, or may be acquired by condemnation
proceedings under section 526, and the only limitations upon
the amount of the land thus to be acquired are those jiist
stated above.
Now, when it is remembered that the railway company was
authorized to select the particular route which it selected, and
was authorized to construct its road along the Musselshell river
and change the channel of that river when the same would
otherwise be crossed by the railroad, in our opinion the chang-
ing of the channel, when necessary to make the road secure
for life and property, is as much a part of the construction
of the road itself within the meaning of this statute, as the
boring of tunnels, the construction of bridges, the excava-
tion of cuts or the making of fills or embankments where neces-
sary. Any other construction leads to the absurdity that au-
thority to change the channel of the river is conferred, but the
power to make the change is withheld, and such a construc-
tion of a statute '^^ is never to be indulged unless absolutely
necessary from the very language employed in the statute.
Having arrived at the conclusion that the changing of the
channel of this river is, in contemplation of the statute, a part
of the construction of the road itself, it follows, as a matter
Am. St. Kep., Vol. 115—35
546 American State Reports, Vol. 115. [Mont.
of course, from subdivision 7 of section 894, or section 526,
when read with subdivision 3, above, that authority to secure
land necessary to make such change is conferred, and such
land may be secured by condemnation proceedings. "While
we have not found any authorities directly in point the follow-
ing illustrate to some extent the views we entertain : 1 Lewis
on Eminent Domain, sec, 256 ; In re New York etc. R. R. Co.,
33 Hun, 148; Bigelow v. Draper, 6 N. Dak. 152, 69 N. W.
570 ; State v. St. Paul etc. Ry. Co., 35 Minn. 131, 59 Am. Rep.
313, 28 N. W. 3.
As there does not appear to us to have been any error com-
mitted by the district court or the judge thereof, the petition
filed in this court does not state any facts upon which relief
may be granted. The demurrer to the petition is sustained,
and the proceedings are dismissed.
Mr. Chief Justice Brantly and Mr. Justice Milbum concur.
A Bailroad or Telegraph Covipany has a discretion in selecting its
route and in determining what land it is necessary to condemn in
the exercise of its power of eminent domain: Union Pac. R. R. Co. v.
Colorado etc. Tel. Co., 30 Colo. 133, 97 Am. St. Rep. 106; Wheeling
etc. R. R. Co. V. Toledo Ry. Co., 72 Ohio St. 368, 106 Am. St. Rep. 622,
and cases cited in the cross-reference note thereto.
YELLOWSTONE PARK RAILROAD COMPANY v.
BRIDGER COAL COMPANY.
[34 Mont. 545, 87 Pac. 963.]
ElVIINENT DOMAIN — Necessity of Defendant Pleading. — In
eminent domain proceedings the defendant should appear by demurrer
or answer. If he fails to do so, he has no standing in court for any
purpose nor right to be heard in the subsequent proceedings, (p.
551.)
EMINENT DOMAIN — Effect of Defendant not Pleadlng.-^The
only effect of a failure by the defendant to appear by demurrer or
answer in eminent domain proceedings is to shut him out from par-
ticipating in the proceedings. The court must, nevertheless, determine
whether the use for which the property is sought to be appropriated
is a public use, limit the amount taken to the necessities of the case,
and ascertain the damages under the procedure and in accordance
with the standard provided therefor in sections 2220, 2221, and 2224
of the Code of Civil Procedure, (p. 551.)
EMINENT DOMAIN— Failure to Take Default.— If the plain-
tiff in eminent domain proceedings does not default upon the failure
of the defendant to plead, but permits the case to proceed to the
making of the order of condemnation as if issues were properly made,
Dec. '06.] Yellowstone Park R. R. v. Bridger C. Co. 547
and makes no objection until final hearing in the district court, it
■will be presumed that the issues were made and properly determined,
(p. 551.)
EMINENT DOMAIN — Pleading Damages.— The defendant in
eminent domain proceedings is not required to set up his claim for
damages, whether general or special, in his pleadings in any form, in
order to give the plaintiff notice of their character and amount so
that he may be prepared to meet him. (p. 552.)
EMINENT DOMAIN — Measure of Damages. — In determining
the amount which the defendants are entitled to recover in eminent
domain proceedings, the court is bound to take into consideration
every element of value which would be taken into consideration if
the plaintiff were negotiating a sale with the plaintiff as a willing
purchaser and the defendants were willing sellers, (p. 552.)
EMINENT DOMAIN — Pleading Damages to Land not Taken. —
The defendant in eminent domain proceedings is not required spe-
cially to plead damages to portions of his land not actually traversed
by the railroad of the plaintiff and not described in the petition.
(p. 553.)
EMINENT DOMAIN — ^Damages to Land not Taken. — Where
the land of the defendant in eminent domain proceedings is in a
compact body, it is clearly within the purview of the couit's duty to
ascertain what damages have accrued, not only as to the part de-
scribed in the complaint, but also as to the whole of the body, only a
part of which is taken. Such damages are not special in the proper
meaning of that term. (p. 553.)
EMINENT DOMAIN — Measure of Damages — Evidence of
Offers to Buy. — Evidence in behalf of the plaintiff railroad company
in eminent domain proceedings, of offers to purchase lands in the
vicinity of the defendant's property indicating an enhancement in
values from the building of the road, are inadmissible, when made
by persons not parties to nor witnesses in the proceedings, (p. 553.)
APPEAL. — Counsel for the Appellant Cannot Complain in the
supreme court of a ruling concerning the admissibility of evidence
made by the district court, when he assumes a position in the supreme
court exactly the reverse of that which he assumed in the district
court, (p. 556.)
EMINENT DOMAIN — Disturbing Verdict on Appeal. — The
evidence in eminent domain proceedings may be sufficient to sustain
the verdict, although the statements of witnesses are conflicting and
unsatisfactory on material points, (p. 557.)
EMINENT DOMAIN — Appeal — Excessive Verdict. — The find-
ings of the jury as to the amount of damages sustained by the de-
fendant by the construction of a railroad through his land will not
be disturlicd on appeal because excessive, unless so obviously and
palpably out of pro[)ortion to the injury as to be in oxcoss of what
IS meant by the expression "just compensation" as used in the con-
stitution, (p. 558.)
W. M. Johnston, for the appellant
*** BRANTLY, C. J. Proceeding under the statute (Code
Civ. Proc, pt. 3, tit. 7, sec. 2216 et se(i.), to condemn lands
owned by defendants by separate rights, for the use of plain-
tiff as a right of way. The lauds are all used for agricultural
548 Ameeican State Reports, Vol. 115. [Mont.
and stock-raising purposes. Those owned by defendant Han-
son and wife consist of one hundred and sixty acres in
a square body. Two forty-acre subdivisions are cut in two,
diagonally, by the line of road from northeast to southwest.
The area taken covers three and fifty-eight hundredths acres.
The defendant Kuecking has one hundred and fifty-one and
one-half acres in a compact body nearly square. The right
of way runs through it in the same direction, cutting diagon-
ally three forty-acre subdivisions, taking an area of three
and six-tenths acres. The defendants Clark own three hun-
dred and five acres in one compact body. The right of way
runs into this tract from the north near the middle of one
forty-acre subdivision and passes through it on a cur\'e to
the southwest to a point near the line of the western tier of
forties on the south line of this forty, and thence due south,
cutting two other forty's from north to south, and takes an
area of six and three hundred and forty-five thousandths acres.
The defendants Dew and wife own one hundred and sixty
acres in a parallelogram extending north and south. The
right of way runs through them from northeast to southwest
on a wide curve, cutting three of the forty-acre subdivisions
and taking five and forty-seven hundredths acres. All of
these lands lie adjoining in the order named, along Clark's
Fork river in Carbon county. Considerable areas of all of
them are cultivable and produce grain and alfalfa hay. On
the Clark lands is an orchard of thirty acres. The line of
road over most of the way **^^ through them is upon areas
usually cultivated. The Clarks are also engaged in sheep
raising and use their place as a home ranch. The Hanson
and Kuecking lands are almost all cultivated. All of the de-
fendants have water rights, and the taking of the right of
way disturbs in a greater or less measure the ditches of the
respective owners, and will entail additional labor and ex-
pense in changing them as well as the secondary ditches and
laterals.
All of the defendants appeared in obedience to the summons
issued, except the Bridger Coal Company — as to which, be-
cause of an adjustment made by it with plaintiff before the
hearing in the district court, the proceeding was dismissed —
but filed no answers or other pleadings. The hearing was
had and the order of condemnation was made as if issue had
been joined by defendants. The commissioners appointed in
pu-suance of the statute to assess the damages (Code Civ.
Dec. '06,] Yellowstone Park R. R. v. Bridger C. Co. 549
Proc, sec. 2220) did so after a hearing and examination of
the lands, and made their report. The plaintiff, being dis-
satisfied with the award, appealed to the district court. ( Code
Civ. Proc, sec. 2224.) Thereafter, upon a trial, a jury re-
turned a verdict awarding damages as follows : To defendants
Hason, for land taken $214.80, and incidental damages, $725 ;
to Kuecking, for land taken, $216, incidental damages, $725 ;
to Clark and wife, for land taken, $285.52, incidental dam-
ages, $1,500; and to Dew and wife, for land taken, $328.20,
incidental damages, $1,295. The jury found that there were
no benefits to any of the lands. From the judgment entered
upon the verdict and from an order denying a new trial,
plaintiff has appealed.
1. At the beginning of the trial, the defendants having as-
sumed the burden of proof, the plaintiff objected to the intro-
duction of any evidence by them "for the reason that no an-
swer, counterclaim or any kind of a claim in damages has been
filed in this action." The objection was overruled and plain-
tiff assigns error.
It is the rule in many of the states that the defendant in
condemnation proceedings is not required to make formal ap-
pearance '^'^^ either by answer or otherwise. The complaint
is treated as denied, and the hearing proceeds as if formal is-
sue had been made. This is the rule in Minnesota, Illinois,
North Carolina, Iowa, and Arkansas: Sheldon v. Minnesota
etc. Ry. Co., 29 Minn. 318, 13 N. W. 134; Smith v. Chicago
etc. Ry. Co., 105 111. 511; Carolina etc. R. R. Co. v. Love,
81 N. C. 434 ; Corbin v. Wisconsin etc. Ry. Co., 66 Iowa, 289,
23 N. W. 662 ; Bentonville R. R. v. Stroud, 45 Ark. 278. It
was formerly the rule in Colorado (Denver etc. R. R. Co. v.
Griffith, 17 Colo. 598, 31 Pac. 171), but it seems that the rule
has been changed by a later statute: Whitehead v. City of
Denver, 13 Colo. App. 134, 56 Pac. 913.
The procedure in such cases is regulated by the statutes
of the particular states, and decisions made under them are
generally of little aid in the interpretation of our own stat-
ute. In such proceedings the court acquires jurisdiction of
the subject matter and the parties by the filing of the com-
plaint in conformity with the requirements of section 2217,
and the issuance and service of summons as directed by sec-
tion 2218. The latter section provides: "The clerk must is-
sue a summons which must contain the names of the parties,
a description of the lands proposed to be taken, a statement
550 American State Reports, Vol, 115. [Mont
of the public use for which it* is sought, and a notice to the
defendants to appear before the court or judge, at a time
and place therein specified, and show cause why the property
described should not be condemned as prayed for in the
complaint. Such summons must, in other particulars, be in
form of a summons in a civil action, and must be served in
like manner upon each defendant named therein at least ten
days previous to the time designated in such notice, for the
hearing, and no copy of the complaint need be served. But
the failure to make such service upon a defendant does not
affect the right to proceed against any or all other of the de-
fendants, upon whom service of summons had been made."
^^* Sections 2219 and 2231 provide :
"Sec. 2219. All persons named in the complaint, in oc-
cupation of, or claiming an interest in, any of the property
described in the complaint, or in the damages, for the taking
thereof, though not named, may appear, answer or demur,
each in respect to his own property or interest. ' '
"Sec. 2231. Except as otherwise provided in this title, the
provisions of part 2 of this code are applicable to and con-
stitute the rules of practice in the proceedings mentioned in
this title."
While sections 2218 and 2219, supra, do not require, but per-
mit, an answer to be filed, yet, since section 2231 declares that
the provisions of part 2 of the Code of Civil Procedure shall,
except where otherwise provided, be applicable and constitute
the rules of practice in the proceedings mentioned in this
title, it must follow that an appearance, either by demurrer
or answer, must be made by the defendants in order to giv3
them any standing in court for any purpose ; for section 632,
part 2, declares what the summons must contain, in addi-
tion to what is required by section 2218, supra. Among other
things^ it must contain a notice that, if the defendant fails
to appear or answer, judgment will be taken against him by
default for the relief demanded in the complaint. Section
1020 declares that judgment may be had if the defendant
fails to answer: (1) In actions arising on a contract, by the
clerk upon entry of default; (2) upon a hearing, by the court
after the entry of default by the clerk; and (3) in a case
where service of summons has been had by publication, upon
a hearing by the court after proof of the required publica-
tion. Construing these provisions together, it is apparent
that the defendant is required to appear and make his de-
Dec. '06.] Yellowstone Park R. R. v. Bridger C. Co. 551
fense as in ordinary actions. And, if he fails to appear and
save default by one of the modes provided, he has no right
to be heard in the subsequent proceedings. This is so not-
withstanding the provision of section 2221, which requires the
commissioners appointed to assess the damages, to hear the
allegations and evidence of all persons interested. '^^'^ The
latter provision evidently contemplates cases where the par-
ties defendant are not in default, for, if they must, notwith-
standing their default, be heard by the commissioners, they
may appeal (section 2224) and still have a jury trial as to
the amount of damages — a situation which, in view of the
provisions applicable to ordinary actions, would be absurd.
But this conclusion does not involve the idea that the court
is not bound to proceed in conformity with the other require-
ments of this title in the performance of its duties. The only
effect of a default is to shut out the defendants from partic-
ipating in the proceedings. The court must, nevertheless,
determine whether the use for which the property is sought
to be appropriated is a public use, limit the amount taken
to the necessities of the case, and ascertain the damages un-
der the procedure and in accordance with the standard pro-
vided therefor in sections 2220, 2221 and 2224.
But, while this is true, the plaintiff in this case may not now
be heard to say that he has been prejudiced by the ruling com-
plained of. It failed to take default against the defendants.
They were permitted to appear at the hearing when the order
of condemnation was made, plaintiff's counsel thinking, doubt-
less, that they were not required to file any pleading. No
fault was found with any of the proceedings until the opening
of the trial on appeal. Upon inspection of section 2217,
supra, it will be seen what issues may be made and tried upon
the pleadings. The case having proceeded to the making of
the order of condemnation without objection, as if issues had
properly been made, it must be presumed that they were made,
and, since there is no complaint of any error in regard to
them, it must be presumed that they were properly deter-
mined.
But counsel says that the defendants' claims for damages
should have been set up in their answers by way of counter-
claim, thus giving plaintiff notice of their character and
amount, so that it conld be prepared to meet them. The an-
swer to this contention is that there is no pmvision in the
title touching condemnation proceedings, requiring defend-
552 American State Reports, Vol. 115. [Mont.
ants to set up their "^^^ claims for damages in their pleadings
in any j^orm. And when we examine the provisions of part
2 relating to the forms of pleadinirs and declaring what may
be set up as counterclaims, we find that they clearly exclude
damages awarded in such cases. The counterclaim permitted
by section 691 must tend in some way to diminish or defeat
the plaintiff's recovery, and must be one of a designated
class of causes of action against the plaintiff, or, in a proper
case, against the person whom he represents, and in favor of
the defendant or of one or more defendants between whom
and plaintiff a separate judgment may be had in the action.
It must also be matured and exist at the time the action is
brought.
When this proceeding was commenced, the defendants had
no cause of action against the plaintiff, and a recovery of the
damages to which they are entitled tends in no way to defeat
plaintiff's right to have the land condemned for a roadbed,
whatever may be the amount of recovery. Indeed, the pur-
pose of the whole proceeding is to enforce the sale of a por-
tion of defendants' lands to plaintiff, to ascertain the dam-
ages— the purchase price — and to compel payment of them.
And, since the statute does not require, either expressly or
by implication, that the defendants must plead their damages
or present any other issues than those which go to the truth
of the petition itself, they may not be required to do so, no
matter whether the damages are general or special, and, in
determining the amount which they are entitled to recover,
the court is bound to take into consideration every element
of value which would be taken into consideration if the plain-
tiff M^ere negotiating a sale with the defendants as a willing
purchaser and the defendants were willing sellers : Mississippi
etc. Boom Co. v. Patterson, 98 U. S. 403, 25 L. ed. 206;
Webster v. Kansas City etc. Ry. Co., 116 Mo. 114, 22 S. W.
474; Denver etc. R. R. Co. v. Griffith, 17 Colo. 598, 31 Pac.
171. In other words, it must ascertain the market value of
the lands after the right of way is talien.
2. Objection was made to certain evidence tending to show
damage to portions of defendants' lands not actually traversed
^^"^ by the railroad and not described in the petition. It is
said now that the claims for damages in this behalf should
have been specially pleaded, and plaintiff cites several Illinois
cases in support of his contention ; among them, Stetson v.
Chicago etc. R. Co., 75 111. 74; Chicago etc. R. Co. v. Hop-
Dec. '06.] Yellowstone Park R. R. v. Bridger C. Co. 553
kins, 90 111. 316; Johnson v. Freeport etc. Ry. Co., Ill 111.
413. It will be seen on examination of these cases, however,
that the Illinois statute permits the defendant in such cases
to file a cross-petition in order to set forth more fully and ac-
curately his claim. But our statute contains no such pro-
vision. Besides, as we have seen, the lands of the different
defendants in this case are all compact bodies, and it is clearly
within the purview of the court's duty to ascertain what dam-
ages have accrued, not only as to the part described in the
complaint, but also to the whole of the body, a part of which
only is taken. Such damages are not special in the proper
meaning of that term: North Pac. R. Co. v. Reynolds, 50
Cal. 90; Sheldon v. Minnesota etc. R. Co., 29 Minn. 318, 13
N. W. 134; Sherwood v. St. Paul etc. R. Co., 21 Minn. 122;
Fayetteville etc. Ry. Co. v. Hunt, 51 Ark. 330, 11 S. W.
418. The plaintiff should not, after describing only so much
of the entire tract as suits its convenience, be heard to say
that the detriment to the part not described is special, and
must be pleaded by the defendants in order to make it in-
cumbent upon the commissioners or the court to consider de-
fendants' claims.
3. The plaintiff, for the purpose of showing that all the
lands along Clark's Fork river had been enhanced in value by
the building of the road, tendered evidence to prove that
offers had been made by various persons to the owners of se-
lected parcels of land in the vicinity of the lands of defend-
ants of one hundred dollars per acre. All these offers but
one, which will be hereafter noticed, arose out of negotiations
between persons none of whom are parties to this proceed-
ing or were witnesses on the trial. The evidence having been
excluded, counsel for plaintiff insists that the ruling was er-
roneous. There is no merit in this contention. The offer was
an attempt to get ^^** before the jury hearsay declarations
of third parties as to value not supported by oath, without the
right of cross-examination by the defendants. The right
mode of proving value is to take the sworn opinions of those
who are shown to be competent to give opinions on the sub-
ject, and let them be cross-examined as to the foundation of
their opinions, their means of knowledge and the motives
prompting them. Furthermore, the value of such evidence
depends upon the determination of so many collateral issues
that it cannot be relied on with safety. With reference to
it the supreme court of New York has well said: "Its value
554 American State Reports, Vol. 115. [Mont.
depends upon too many circumstances. If evidence of offers
is to be received, it will be important to know whether the
offer was made in good faith, by a man of good judgment, ac-
quainted with the value of the article and of sufficient ability
to pay ; also whether the offer was cash, for credit, in exchange,
and whether made with reference to the market value of the
article, or to supply a particular need or to gratify a fancy.
Private offers can be multiplied to any extent for the pur-
poses of a cause, and the bad faith in which they were made
would be difficult to prove. The reception of evidence of
private offers to sell or purchase stands upon an entirely dif-
ferent footing from evidence of actual sales between indi-
viduals or by public auction, and also upon a different foot-
ing from bids made at auction sales: Young v. Atwood, 5
Hun, 234. The reception of this class of evidence would
multiply the issues upon questions of damages to an extent
not to be tolerated by courts aiming to practically administer
justice between litigants": Keller v. Paine, 34 Hun, 167.
In nine v. Manhattan Ry. Co., 132 N. Y. 477, 30 N. E. 985,
15 L. R. A. 591, the inquiry was : What was the market value
of the premises in controversy prior to the building of the
defendant's railroad? On the trial in the lower court evi-
dence of offers made to the owner had been received. The
appellate court held this error, on the ground that it was ob-
je?3tionable as hearsay, and on the further ground stated by
the supreme court in Keller v. Paine, 34 Hun, 167. On both
the grounds we think the ^'^^ evidence was properly excluded.
The rule stated in these cases has been followed quite gen-
erally by the courts, whether the particular offer was made
to third persons for other lands in the vicinity or to a party
for the lands in question, either by third persons or the con-
demning party: Chicago etc. R. Co. v. Muller, 45 Kan. 85,
25 Pac. 210; Winnisimmet Co. v. Grueby, 111 Mass. 543;
Davis V. Charles River Branch R. Co., 11 Cush. (Mass.) 506;
Selma etc. Ry. Co. v. Keith, 53 Ga. 178; Parke v. City of
Seattle, 8 Wash. 78, 35 Pac. 594; Lehmicke v. St. Paul etc.
R. Co., 19 Minn. 464 (Gil. 406) ; Concord R. Co. v. Greely,
23 N. H. 237; Watson v. Milwaukee etc. Ry. Co., 57 Wis.
332, 15 N. W. 468 ; 2 Lewis on Eminent Domain, 446.
The other offer referred to above was made to defendant
Clark himself of forty dollars per acre of all the land owned
by himself and wife, which Clark signified his willingness to
accept. This evidence was admitted without objection. Un-
Dec. '06.] Yellowstone Park R. R. v. Bridger C. Co. 555
der the circumstances plaintiff cannot complain, for, whether
right or wrong, the ruling of the court was in its favor.
4. In assignments 8, 10, 11, 12, 13 and 14 error is alleged
in that the court permitted different witnesses to give their
opinions as to the damage sustained by the defendants to lands
not taken, after deducting all benefits. The argument is that,
since the statute (Code Civ. Proc, sees. 2221, 2224) requires
the commissioners in the first instance to assess the damages
and benefits separately, the witnesses should have been re-
quired to state the damages and benefits separately, and, since
this was not done, the evidence confused rather than aided
the jury.
There is much conflict in the decisions of the courts as to
whether a witness should be allowed to state his opinion as to
the amount of damages or benefits accruing to the defendant
in condemnation proceedings. The cases are collected in the
footnotes to section 476 of Mr. Lewis' work on Eminent Do-
main. The conflict of opinion, however, seems more apparent
than real, for in all the states the opinions of witnesses must
be resorted to to determine (1) the value of the land taken;
(2) the detriment, if any, to the portion not taken, or, in other
words, the value of '^**® that not taken; and (3) the bene-
fits, if any, to the portion not taken. If the witnesses state
the items separately, it requires only an arithmetical calcula-
tion to reach a determination of the net result. Does it really
matter whether this is done by the witnesses or by the jury?
When the witness has stated the facts upon which his opin-
ion is based — thus furnishing the jury the means of judging
of its trustworthiness — the mental process necessary to arrive
at the net result may as well be that of the witness as of
the jury. In effect, the expression of opinion as to the items
of value is an expression of opinion as to the net result.
After commenting on the diversity of opinion on this sub-
ject, Mr. Lewis says: "The law is supposed to discourage all
indirect and circuitous methods. Why a witness should not
be allowed to state at once and directly his opinion of the
amount of damages or benefits in answer to a single question,
instead of stating it indirectly in answer to two questions,
we are unable to perceive. The distinction attempted to be
maintained between the two methods is without any substan-
tial ditlerence and must eventually be abandoned"; 2 Lewis
on Eminent Domain, see. 436.
556 American State Reports, Vol. 115. [I\Iont.
In this case the witnesses were questioned fully as to the
bases of their opinions. The jury, under the instructions of
the court, assessed the damages as required by the statute,
finding the items well within the extreme limits of the testi-
mony. Even if, therefore, it be conceded that the questions
were not technically correct in form, we do not see how any
prejudice was suft'ered.
5. On redirect examination the following question was asked
one of the defendants' witnesses: "1 will ask you if Mr.
Dew 's land has' increased in value to any greater extent than
any other lands of similar character and quality of his in
the Clark's Fork valley since the building of the railroad?"
An objection that this was immaterial testimony and was not
proper re-examination was overruled, whereupon the witness
answered that it had not. While this ruling is assigned as
error, the argument in the brief is devoted to the question
Avhether or not an increase in the market price of defend-
ants' lands, generally or specially, by °**^ reason of the build-
ing of the road should not be set off against any damages
accruing to the portion not taken, counsel arguing that the
isetoff should be allowed. Whether the question presented by
counsel should be resolved in favor of plaintiff we need not
now decide. If the setoff should be allowed, the evidence
was material, for, if the plaintiff had a right to a setoff on ac-
count of the alleged enhancement of value, the defendants had
the right to show that there was none. The argument of
counsel tends to support the view that it was material. Evi-
dently the court thought that it was, fo-r the instructions
submitted to the jury were formulated on the theory that
credit should be allowed for such benefits. In any event,
counsel has assumed a position in this court which does not
entitle him to complain, because it is exactly the reverse of
the position which he assumed in the district court.
6. Complaint is made that the instructions were not suf-
ficiently specific in laying down the rule to be pursued by the
jury in assessing the damages. Considering the charge as a
whole it was as fair as the plaintiff could ask. That the jury
were not misled is clear from the fact that they followed the
rule laid down in the statute, finding separately upon the
different items of damages and benefits as is therein pre-
scribed. While paragraph 21, of which particular mention
is made, might have been stated with more clearness, it fol-
lows the statute in substance and is correct.
Dec. '06.] Yellowstone Park R. R. v. Bridger C. Co. 557
Criticism is made of paragraph 24 of the charge, because
the court therein told the jury that they must not consider
the award theretofore made by the commissioners, but should
confine themselves exclusively to the testimony of the wit-
nesses examined at the hearing. This was clearly correct,
for the reason that the award was not introduced in evidence.
The only reference to it was made during the cross-examina-
tion of two of the • commissioners who were sworn as wit-
nesses at the trial. Being asked as to the amounts lixed by
them in their award, they stated amounts which agreed with
those fixed by them at the trial. The trial was de novo as
to the damages. The award of the commissioners ^**^ could
not be competent for any purpose, except to impeach the
statements of those commissioners who were sworn as wit-
nesses, in case their opinions expressed at the trial differed
from their findings. The caution contained in this paragraph
was perhaps not necessary, but it is not erroneous.
7. It is said that the evidence is not sufficient to sustain the
verdict. It would be a bootless task to take up and analyze
the evidence and undertake to reconcile the statements of the
various witnesses. Most of them were practical farmers and
business men who knew the lands in controversy, and, while
their statements are conflicting and unsatisfactory upon ma-
terial points, we cannot say that the evidence all together
does not give substantial support to the findings of the jury.
That this court must, under these circumstances, accept them
as final is too well settled to permit further discussion.
8. Finally, it is said that the award of the jury for damages
to the lands not taken is excessive, as is apparent from the
fact that the evidence conclusively shows that the lands of
all the defendants have been increased in value by the build-
ing of the road, because it not only furnishes easier access
to market, but also, for the same reason, it makes them avail-
able for other products for which until the road was built
there was no market. This matter was agitated at the trial,
and there was a sharp conflict in the opinions of the wit-
nesses as to what effect upon the value of the lands along the
line of road and in the community generally the building of
the road has had. The question was fairly submitted to the
jury. They found that there were no benefits. Their find-
ings were re-examined by the court upon the motion for a
new trial. While the verdict is, in case of each defendant,
for a larger sum than the amount awarded by the counnis-
558 American State Reports, Vol. 115. [Mont.
sioners, the jury might have found a larger amount and still
kept well below the highest estimate of any witness. The
fact that they found that there were no benefits, though some
of the witnesses were of a contrary opinion, does not of it-
self conclusively show that they were controlled by sentiments
of passion and prejudice. It merely shows that they re-
garded the ^^^ opinions of the defendant's witnesses as more
trustworthy than those of plaintiff.
It may be conceded that the building of the road has im-
proved market facilities for all the defendants. Yet this
does not necessarily compel the conclusion that the market
value of their lands has been appreciably enhanced, even
though it should be accepted as the correct doctrine that such
enhancement of value may be offset against the damages.
The real inquiry is "whether the verdict is fair and reason-
able, and in the exercise of sound discretion, under all the
circumstances of the case, and it will be so presumed, unless
the verdict is so excessive or outrageous with reference to
those circumstances as to demonstrate that the jury have
acted against the rules of law, or have suffered their passions,
their prejudices, or their perverse disregard of justice to mis-
lead them": 13 Cyc. 122.
Upon the evidence before us we cannot say that the find-
ings of the jury in the particulars referred to are so obviously
and palpably out of proportion to the injury done the de-
fendants as to be in excess of what is meant by the expression
"just compensation" as used in the constitution.
The plaintiff has, we think, had a fair trial, and the judg-
ment and order must be affirmed.
Mr^ Justice Milbum and Mr. Justice Holloway concur.
The Defendant in Condemnation Proceedings, according to the practice
in some jurisdictions, is not required to make formal appearance by
answer: Bentouvilie K. K. Co. v. Stroud, 45 Ark. 278; Henry v. Cen-
tralia etc. E. K. Co., 121 111. 264, 12 N. E. 744; Sheldon v. Minne-
apolis etc. Ry. Co., 29 Minn. 318, 13 N. W. 134; Denver etc. R. R. Co.
V. Griffith, 17 Colo. 598, 31 Pac. 171; Carolina Cent. Ey. Co. v. Love,
81 N. C. 434.
CASES
IN THE
SUPREME COURT
OP
NEBEASKA.
' CLANCY V. BARKER.
[71 Neb. 83, 98 N. W. 440, 103 N. W. 446.]
INNKEEPERS — Duties. — By the implied contract between
a hotel-keeper and his guest, the former undertakes more than
merely to furnish the latter with suitable food and lodging. There
is a further implied undertaking on his part that the guest shall
be treated with due consideration for his safety and comfort, (p.
562.)
DTNKEEPEBS — Duties. — The Duties of a hotel-keeper to his
guests are similar to the common-law obligation of a common car-
rier to his passengers, (pp. 562, 563.)
INNKEEPERS — Trespass by Servant. — A trespass committed
upon a guest in a hotel by a servant of the proprietor is a breach
of the implied undertaking of the latter to care for the comfort and
safety of the guest, rendering such proprietor or manager liable in
damages, whether such servant was at the time of the trespass
actively engaged in the discharge of his duties or not. (p. 564.)
EVIDENCE — Admissions — Ees Gestae. — It is not within the
scope of the authority of manager of a hotel to bind his employer
by admissions concerning a trespass committed by a servant of the
hotel, when such admissions are made the day after the commission
of the trespass. They are not admissible as part of the res gestae.
(p. 565.)
MASTEB AND SERVANT — Tort of Servant. — A master is
not liable for the torts of his servant, unless they are connected with
his duties or within the scope of his employment, (p. 566.)
INNKEEPERS — Assault by Servant. — An innkeeper must pro-
tect his guests while in the hotel from the assaults of a servant em-
ployed therein, whether actually engaged in his duties at the time
or not, and in case of injury from such assault, the hotel-keeper
must respond in damages, (pp. 566, 567.)
J. 0. Yeiser, for the plaintiff in error.
W. A. Redick and W. J, Connell. for the defendants in er-
ror.
(559)
560 American State Reports, Vol. 115. [Nebraska,
®* ALBERT, C. The plaintiff in his petition filed in the
district court alleges, in effect, that the defendants were the
proprietors and operated a hotel in the city of Omaha; that
on the twelfth day of January, 1902, he entered such hotel
with his wife and infant son for a temporary sojourn therein,
whereupon he and the said members of his family were re-
ceived as guests in said hotel by the defendants; that after-
ward, and while they were thus guests in said hotel, the
plaintiff's infant son entered a room of the hotel to speak
or play with a porter or servant of the defendants, who, at
the time, was in said room. Then follow these allegations :
"That the said porter and servant of defendants in said
hotel, in said capacity at said time, violated all obligations
of hospitality and patience due from said defendants, through
said servants, to said infant guest, and the defendants
thereby violated their agreement, duty and obligation of
law with, and to, the plaintiff by the following conduct, to
wit: The said porter, in attempting to have said infant son
of plaintiff leave said room and corridor, where defend-
ants did not want him, as instructed, and retire to his
mother's room, and to have said infant cease his childish
play and pretended annoyance, carelessly, imprudenth^
rashly, unnecessarily, negligently and foolishly picked up a
revolver and pointing it at said infant, said: 'If you handle
anything, this is what I will do to ^'^ you,' or similar words
calculated to frighten the said infant out of his natural and
childish playfulness and prevent his touching any of de-
fendants' property, or being about said room or the halls;
that the said infant threw up his hands when thus frightened
and assaulted, and, by some means unknown to this plaintiff,
the said pistol was carelessly and negligently discharged by
the said defendants' servant as aforesaid."
The petition contains the usual allegations as to damages.
The defendants by their answers admit that the defend-
ant administrator and corporation were the proprietors of
the hotel and were operating it as alleged in the petition;
that the plaintiff, his wife and infant son were received into
said hotel as guests, at the date alleged in the petition, and
that, while the plaintiff and the said members of his family
were thus guests at the hotel, the son was seriously injured.
But they specifically deny that the person described in the
petition as their porter or servant was in their employ at
the time the injury occurred, and that he was on duty, or
Feb. 1904.] Clancy v. Barker. 561
in the performance of any duty, as porter or servant of the
defendants at such time. They also specifically deny that the
defendant, George E. Barker, was one of the proprietors of
the hotel, or in any way interested in the same, or the opera-
tion thereof, save as president of the defendant corporation.
The evidence adduced by the plaintiff sufficiently shows
that the plaintiff, his wife and infant son became guests at
the hotel, intending to remain but a short time; that about
three days after they were received in the hotel, and while
they were guests therein, a servant of the proprietors of the
hotel, who had waited upon the plaintiff and the members
of his family during their stay at the hotel, was playing a
harmonica in a room which was not one of those assigned to
the plaintiff or any member of his family; that the plain-
tiff's son, attracted by the music, entered the room, the door
of which was open; that thereupon the servant who had
been playing the *® harmonica took up a revolver and pointed
it at the boy, saying, "See here young fellow, if you touch
anything, this is what you get." The revolver, by some
means, was then discharged, the ball striking the boy, de-
stroying one of his eyes and inflicting upon him other serious
injuries. While there is no direct evidence that the person
who inflicted the injuries was in the employ of the proprie-
tors of the hotel, the evidence shows that he waited on the
guests, carried water to their rooms and rendered such other
services as are usually rendered by servants of a certain
class about a hotel, and is amply sufficient to warrant a find-
ing that he was the servant of the proprietors, and, for the
purposes of this case, would have made him such, perhaps,
in the absence of a contract of employment. There is no
evidence tending to connect the defendant George E. Barker
with the operation of the hotel.
At the close of plaintiff's case the court directed a verdict
for the defendants, and from a judgment rendered on such
verdict the plaintiff brings the record here for review.
The defendants insist that the plaintiff having failed to
allege that the servant willfully or maliciously inflicted the
injury, it was incumbent on him to show that the injuries
were the result of negligence on the part of the servant in
the performance of some duty for which he was employed, or
in the discharge of some duty which the defendants owed
the plaintiff. We think they overlook the theory upon which
this action was brought and prosecuted. The plaintiff by
Am. St. Kep., Vol. 115—36
5^ American State Reports, Vol. 115. [Nebraska,
his petition and evidence obviously intended to commit him-
self unreservedly to the theory that his cause of action is ex
contractu. A contract is alleged in the petition, the wrong-
ful acts of the servant, which resulted in injury to the boy
are alleged, not for the purpose of stating a cause of action
ex delicto, but for the purpose of showing a breach of con-
tract and consequent damages.
This brings us at once to the question whether the act of
the servant, resulting in the injuries complained of, con-
stitutes ^"^ a breach of the implied contract between the plain-
tiff and the proprietors of the hotel for the entertainment
of the former and his family. By the implied contract be-
tween a hotel-keeper and his guest, the former undertakes
more than merely to furnish the latter with suitable food
and lodging. There is implied on his part the further un-
dertaking that the guest shall be treated with due considera-
tion for his safety and comfort: Rommel v. Schambacher,
120 Pa. 579, 6 Am. St. Rep. 732, 11 Atl. 779; Jencks v.
Coleman, 2 Sum. 221, Fed. Cas. No. 7258. In Common-
wealth V. Power, 7 Met. (Mass.) 569, 41 Am. Dec. 465, Shaw,
C. J., said: "An owner of a steamboat or railroad in this
respect is in a condition somewhat similar to that of an inn-
keeper, whose premises are open to all guests. Yet he is not
only empowered, but he is bound, so to regulate his house,
as well with regard to the peace and comfort of his guests,
who there seek repose, as to the peace and quiet of the
vicinity, as to repress and prohibit all disorderly conduct
therein; and of course, he has a right, and is bound, to ex-
clude from his premises all disorderly persons, and all per-
sons not conforming to regulations necessary and proper to
secure such quiet and good order. ' '
The foregoing language is quoted with approval in Bass v.
Chicago etc. R. Co., 36 Wis. 450, 17 Am. Rep. 495. Sub-
stantially the same language is employed by the court in Dick-
son V. Waldron, 135 Ind. 507, 41 Am. St. Rep. 440, 34 N. E.
506, 24 L. R. A. 483, 488. See, also, Norcross v. Norcross, 53
Me. 163 ; Pinkerton v. Woodward, 33 Cal. 557, 91 Am. Dec.
657; Russell v. Fagan, 7 Houst. (Del.) 389; Pullman Palace
Car Co. V. Lowe, 28 Neb. 239. The foregoing also show that
the duties of a hotel-keeper to his guests are regarded as simi-
lar to the common-law obligation of a common carrier to his
passengers. As regards the duty of a common carrier to his
Feb. 1904.] Clancy v. Barker. 568
passengers, in Dwindle v. New York etc. R. R. Co., 120 N.
Y. 117, 17 Am. St. Rep. 611 , 24 N. E. 319 , 8 L. R. A. 224, the
court said: "As we have seen, the defendant owed the plain-
tiff the duty to transport him to New York, and, during its
performance, to care for his comfort and safety. The duty
of protecting the personal safety of the passenger and pro-
moting, ®* by every reasonable means, the accomplishment
of his journey is continuous, and embraces other attentions
and services than the occasional service required in giving the
passenger a seat or some temporary accommodation. Hence,
whatever is done by the carrier or its servants which inter-
feres with or injures the health or strength of the traveler, or
prevents the accomplishment of his journey in the most rea-
sonable and speedy manner, is a violation of the carrier's con-
tract, and he must be held responsible for it. ' '
To the same effect are the following: Pittsburg etc. R. Co.
V. Hinds, 53 Pa. 512, 91 Am. Dec. 224; Goddard v. Grand
Trunk R. Co., 57 Me. 202, 2 Am. Rep. 39; Chamberlain v.
Chandler, 3 Mason, 242, Fed. Cas. No. 2575; Pendleton v.
Kinsley, 3 Cliff. 416, Fed. Cas. No. 10,922 ; Bryant v. Rich,
106 Mass. 180,8 Am. Rep. 311; Chicago etc. R. Co. v.
Flexman, 103 111. 546, 42 Am. Rep. 33; Southern Kan-
sas R. Co. V. Rice, 38 Kan. 308 , 5 Am. St. Rep. 766, 16 Pac.
817. An examination of the foregoing eases will show, we
think, that the reasoning applies with equal force to a hotel-
keeper as regards his duties to his guests. Those duties
spring from the implied terms of his contract and a failure
to discharge them, and while it may in some instances
amount to a tort, it amounts in every instance to a breach
of contract.
If, then, the defendants were under a contractual obligation
that the plaintiff and his family should be treated with due
consideration for their comfort and safety, the act of the ser-
vant, resulting in the injuries complained of, obviously
amounts to a breach of contract. That the wrongful act was
committed by a servant is wholly immaterial. The rule which
requires that a guest at a hotel be treated with due considera-
tion for his comfort and safety would be of little value if
limited to the proprietor himself. As a rule, he does not
come in contact with the guests. His undertaking is not that
he personally shall treat them with due consideration, but
that they shall be so treated while inmates of the hotel as
564 American State Reports, Vol. 115. [Nebraska,
guests ; and if they be not thus treated there is a breach of the
implied contract, whether the lack of such treatment is the re-
sult *® of some act or omission of the proprietor himself or
of his servant or servants.
Neither do we deem it material whether the servant, at the
time of the injury, was actively engaged in the discharge of
his duty as servant or not. He was a servant of the proprie-
tor and an inmate of the hotel ; his duty as to the treatment
to be accorded the guests of the hotel was a continuing one,
and rested upon him wherever, within the hotel, he was
brought in contact with them. To hold otherwise would be to
say that a guest would have no redress for any manner of
indignity received at a hotel, so long as it was inflicted by a
servant not actively engaged in the discharge of some duty.
The following from Dwindle v. New York etc. R. R. Co., 120
N. Y. 117, 17 Am. St. Rep. 611, 24 N. E. 319, 8 L. R. A. 224,
is peculiarly applicable to this point :
"The idea that the servant of a carrier of persons may,
in the intervals between rendering personal services to the
passenger for his accommodation, assault the person of the
passenger, destroy his consciousness, and disable him from
further pursuit of his journey, is not consistent with the duty
that the carrier owes to the passenger, and is little less than
monstrous. While this general duty rested upon the defend-
ant to protect the person of the passenger during the entire
performance of the contract, it signifies but little or nothing
whether the servant had or had not completed the temporary
or particular service he was performing or had completed the
performance of it, when the blow was struck. The blow was
given by a servant of the defendant while the defendant was
performing its contract to carry safely and to protect the per-
son of the plaintiff, and was a violation of such contract."
It is equally immaterial to this case, we think, whether the
shooting was accidental or willful. The servant in pointing
a loaded gun at the boy committed a trespass, and as a result
of such trespass inflicted serious and permanent injuries on
the child. His acts, therefore, constituted a breach of the im-
plied undertaking of his employers to treat the plaintiff and
his family with due consideration for ®^ their safety and
comfort, for which breach his employers are liable in dam-
ages.
We are aware that there are cases holding contrary to the
foregoing conclusion, but they do not seem to us to be based
Feb. 1904.] Clancy v. Barker. 5G5
on sound reasons, nor upon just considerations of public pol
icy, and are contrary to the weight and trend of modern
authority.
The plaintiff offered to prove by one of his witnesses that
the day following the accident one Mr. Bowman, the man-
ager of the hotel, told the witness "that he had told the boys
[referring to the porters and bellboys of the hotel] time and
again to keep the kid [meaning the plaintiff's son] out of the
elevator, halls and rooms of the hotel, and to keep him in his
mother's room." The offer was rejected, and the plaintiff
contends that the ruling of the court in that behalf is er-
roneous. We do not think so. It was not within the scope
of the authority of the manager to bind his employer by the
admission or declaration sought to be proved, and it was too
remote in point of time and too detached from the injury to
be admissible as a part of the res gestae : Gale Sulky Harrow
Co. V. Laughlin, 31 Neb. 103, 47 N. W. 638 ; Commercial Nat.
Bank v. Brill, 37 Neb. 626, 56 N. W. 382 ; Collins v. State, 46
Neb. 37, 64 N. W. 432 ; City of Friend v. Burleigh, 53 Neb.
674, 74 N. W. 50.
As to the defendant George E. Barker, as we have seen,
there is no evidence which would warrant a verdict against
him. Hence, so far as he is concerned, the judgment of the
district court is right, but as to the other defendants, it is
recommended that the judgment be reversed and the cause
remanded for further proceedings according to law.
Barnes and Glanville, CC, concur.
By the COURT. For the reasons stated in the foregoing
opinion, the judgment of the district court, as to the defend-
ant George E. Barker, is affirmed and, as to the other defend-
ants, the judgment is reversed and the cause remanded for
further proceedings according to law.
Judgment accordingly.
ON REHEARING.
•* SEDGWICK, J. Since the filing of the former opinion
in this case (ante, p. 559), the question principally discussed
therein, and arising out of the same transaction, has been de-
cided by the United States court of appeals for this circuit:
Clancy v. Barker, 131 Fed. 161, 66 C. C. A. 469, 69 L. R. A.
653. The opinion of that court prepared by Judge Sanborn
■trongly states the reasons which led the majority of the court
566 American State Reports, Vol. 115, [Nebraska,
to the conclusion that the hotel company ought not to be
held liable. In a dissenting opinion, Judge Thayer upholds
the views expressed in the former opinion of this court.
1. The first ground urged by counsel for holding the de-
fendant liable we think is satisfactorily discussed in the ma-
jority opinion of that court. This relates to the doctrine of
respondeat superior derived from the relation of master and
servant. If there had been evidence showing that it was the
duty of the employes of the hotel to prevent children from
entering and playing in rooms which were not assigned to
them, it might, perhaps, be contended that the boy Lacy was
acting within the scope of his employment when the accident
occurred. The evidence offered as tending to show that he
was so acting was properly excluded, as shown in the former
opinion, and it does not appear that there was any other evi-
dence in the record upon this point.
®* 2. Whether the relation that exists between a keeper of
a hotel and his guests makes the former liable for any mis-
conduct of his employes, by which his guests are injured while
they are in the hotel and are in his care, is a more difficult
question. It is admitted that common carriers under such
circumstances are liable. It is said that the reason for this
is that the passenger places himself in the care of the employes
of the carrier, and is continually in their care, so that what-
ever they do while the passenger is being transported is within
the scope of their employment. The hotel-keeper is also
bound to bestow reasonable care for the safety and comfort
of his guests. He is not an insurer of his guests; but neither
is the carrier an insurer of his passengers. The carrier, of
course, is bound to use extraordinary care or, as is sometimes
said, the utmost care for the safety of his passengers. The
business engaged in is a dangerous one, and the care should
be in proportion to the danger that exists. In this respect
there is a difference between the two situations, but both per-
form public duties, and are bound to serve any individual
who requires their service and suitably applies for it. The
hotel-keeper offers accommodations for strangers who are not
acquainted with his employes and who have no voice in their
selection. He undertakes to provide them with suitable ac-
commodations and with at least a certain degree of care for
their comfort and safety. He has some control over their
persojis and conduct. He must not allow such conduct on
their part as will interfere with the reasonable hospitality
Feb. 1904.] Clancy v. Barker. 567
which he owes to other guests. It may be that the carrier has
greater control over the persons and conduct of passengers,
but this idea seems to be exaggerated in some of the opinions.
In what sense does the porter of a sleeping-car have charge
of the occupants of the car and have control of their conduct
and behavior? Surely, if it is different in degree from the
control that the hotel-keeper has over his guests, it is not much
different in kind. The hotel-keeper is under obligation to
protect his guests from danger when it is reasonably within
his power to do so; ®* and is under obligation to select such
employes as will look after the safety and comfort of his
guests, and will not commit acts of violence against them so
far as is reasonably within his power. It would seem that to
relieve him from liability for injuries done to his guests by
his employe, upon the sole ground that the employe was not
then in the active discharge of some specific duty in connee-
tion with his employment, and hold the carrier responsible
under similar conditions, is making a fine distinction. The
liability of a common carrier under such circumstances is a
doctrine of modern growth. There does not appear to be rea-
son for establishing such doctrine that would not equally ap-
ply under modem conditions to the relations between an inn-
keeper and his guests.
Notwithstanding the great respect due to the court which
has reached a contrary conclusion in Clancy v. Barker, 131
Fed. 161 , 66 C. C. A. 469, 69 L. R. A. 653, we conclude that
our former decision ought to be adhered to.
Former judgment adhered to.
Mr. Justice Barnes Dissented and expressed the opinion that the
defendants should not be held liable for the injury complained of.
He maintained that the liability of an innkeeper is unlike that of
a common carrier, in that the former is not an insurer of the
safety of persons of his guests against injuries inflicted by his ser-
vants when they are not engaged in the discharge of their duties
as employes; that the true rule to be applied in the principal case
ii that of the common law, namely, that an innkeeper is not an in-
sorer of the safety of his guest against injury, and that bis ob-
ligation is limited to the exercise of reasonable care for the safety,
comfort, and entertainment of such guest, and that an innkeeper is
not liable for an assault and battery committed on a guest by one
of bis servants, especially when the assault is not within the line
of the servant's duty, and is not advised or countenanced by the
master. In support of this view, Judge Barnes cited the following
568 American State Reports, Vol. 115. [Nebraska,
cases: Rahmel v. Lehndorflf, 142 Cal. 681, 100 Am. St Rep. 154, 76
Pac. 659, 65 L. R. A. 88; Curtis v. Dinneen, 4 Dak. 245, 30 N. W.
148; SheflFer v. Willoughby, 163 111. 518, 54 Am. St. Rep. 483, 34 L.
B. A. 464, 45 N. E. 253, 34 L. B. A. 464; Gilbert v. Hoffman, 66
Iowa, 205, 55 Am. Rep. 263, 23 N. W. 632; Sneed v. Moorhead, 70
Miss. 690, 13 South. 235; Stanley v. Bircher's Ext., 78 Mo. 245; Over-
street V. Moser, 88 Mo. App. 72; Stott v. Churchill, 15 Misc. Rep.
80, 36 N. Y. Supp. 476; Weeks v. McNulty, 101 Tenn. 495, 70 Am.
St. Bep. 693, 48 S. W. 809, 43 L. R. A. 185.
For 'Recent Authorities on the Liability of Innkeepers for assaults
upon their guests, see Rahmel v. Lehndorff, 142 Cal. 681, 100 Am.
St. Rep. 154, and cases cited in the cross-reference note thereto;
Anderson v. Diaz, 77 Ark. 606, 113 Am. St. Rep. 180.
BROWN V. BROWN.
[71 Neb. 200, 98 N. W. 718.]
WILLS — Omitted Child — ^Evidence — Burden of Proof. — Under
a statute providing that "when any testator shall omit to provide
in his will for any of his children, or for the issue of any deceased
child, and it shall appear that such omission was not intentional,
but was made by mistake or accident, such child, or the issue of such
child, shall have the same share in the estate of the testator as if
he had died intestate," parol evidence is admissible to show whether
such omission was unintentional, and the burden is on the preter-
mitted child to establish such fact. (p. 572.)
TEIAL — New Parties. — Although a statute provides for in-
tervention before trial only, yet the court has power to bring other
parties before it, even after trial, when satisfied that their presence
as parties is necessary to a proper determination of the case. (p.
575.)
PRACTICE — Harmless Error. — Error in overruling a demur-
rer is harmless if the pleading assailed is thereafter amended, and
the case submitted and determined on the amended pleadings, (p.
577.)
TBIAL. — Amendment of Petition After Trial may be per-
mitted and the case reopened for the trial of the issues tendered by
such amendment when necessary to a proper determination of the
case. (p. 577.)
WILLS, PEOBATE OF — Conclusiveness as to Mental Capac-
ity.— The decree of the proper court admitting a will to probate is
conclusive on all parties as to its due execution and as to all ques-
tions affecting the competency of the testator to make a will. (p.
578.)
Hainer & Smith, for the plaintiffs in error.
J. H. Edmondson, M. F. Stanley and 0. A. Abbott, for the
defendants.
Feb. 1904.] Brown v. Brown. 569
201 ALBERT, C. On the eighteenth day of February,
1901, an instrument purporting to be the last will and testa-"
ment of Henry S. Brown, deceased, was admitted to probate
in the county court of Hamilton county. The testator was
the father of thirteen children, ten of whom survive him.
Three of his sons, George A., Hamilton, J., and Albert, H., died
before the execution of the will. The first left four children,
namely, Carrie, Nellie, Ethel and George; the second left
three, Jennie, Ettie and Charles; the third left two, Qeorge
and Mabel. The will, after making provision for the payment
of the debts of the testator and for the support of the surviv-
ing widow, contains the following provisions :
'■"I give and bequeath one hundred dollars ($100) each to
the following, my grandchildren, to wit, Carrie Brown, Nellie
Brown, Ethel Brown and George Brown, and being children
of my deceased son, George W. Brown ; and to Jennie Bro^vn
and Ettie Brown, being children of my deceased son, Hamil-
ton J. Brown; and being in the aggregate to my said six
grandchildren the sum of six hundred dollars ($600)
After the payment of all my just debts, and the payment of
said legacies to my said wife and grandchildren, and the set-
ting off to my said wife of said real estate hereinbefore spe-
cifically mentioned, I give, bequeath and devise all the rest,
residue and reminder of my estate, both real and personal, of
whatsoever it may consist and wheresoever situated, to such of
the children of my own body begotten as shall survive me.
Such surviving children to share the said residue of my estate
share and share alike."
After the final report of the administrator with the will an-
nexed had been filed, and before a hearing thereon, George
and Mabel Brown, children of the decea.sed son, Albert H.
Brown, by their next friend, filed a petition in the county
court alleging, among other things, that "neither they nor
their deceased father were mentioned ^^^ by name in said
will," but "that they were included in the general designa-
tion of 'children of my own body begotten.' " The prayer is
as follows: "Wherefore your petitioners pray that the court
construe and declare the true meaning and intent of said tes-
tator, and that yoiir petitioners may be adjudged and decreed
to be included under the words 'children of my own body be-
gotten' and entitled to an undivided one-eleventh (1/11) part
of the estate of said Henry S. Brown, decea.sed, as residuary
devisees, subject to the other provisions in said will contained.
i
570 American State Reports, Vol. 115. [Nebraska,
and, in the event the court should determine that your peti-
•tioners were not included, or intended to be included, under
the words, * children of my own body begotten, * that they may
be adjudged and decreed to be entitled to an undivided one-
thirteenth (1/13) part of the entire estate of the said Henry
S. Brown, deceased, subject only to the dower and homestead
rights of the widow of the testator, Angelina Brown. ' '
The court found against the petitioners, and dismissed their
petition; an appeal was taken to the district court. In the
meantime, on the eighth day of January, 1902, five children
of the testator commenced a suit in the district court against
the other five for a partition of the real estate of which the tes-
tator died seised, which proceeded to a final decree confirming
the respective shares of the parties to that suit to such real
estate. There were other parties to the suit, but it is unneces-
sary to mention them. A sale had been ordered, and notice
thereof published. On March 22, 1902, and about two hours
before the time fixed for the partition sale, George and Mabel
Brown, children of the deceased son, Albert H. Brown, and
petitioners in the proceeding brought in the county court for
a construction of the will, filed a petition of intervention in
the petition suit, which, save in some minor details not neces-
sary to notice at this time, was substantially the same as that
filed by them in the proceeding for a construction of the will.
The plaintiffs and defendants ^**^ in the partition suit joined
in a motion to strike the petition of intervention from the files,
for the reason that the application for intervention was too
late, which motion was overruled. The plaintiffs and defend-
ants then joined in a demurrer to the petition of intervention,
which was also overruled. The plaintiffs and defendants then
filed an answer to the petition of intervention, in which, after
making a general denial, they set out the proceedings had for
the probate of the will, insisting that, as no proceedings had
been had or instituted to reverse, vacate or modify the decree
admitting the will to probate, the questions raised by the peti-
tion of intervention were res judicata. The interveners filed
a reply which amounts to a general denial. In the meantime
the referees had made a sale of the lands, and on the eighth
day of May, 1902, on the motion of all the parties, including
the interveners, the sale was confirmed, and the referees were
ordered to distribute the proceeds, except the sum of two
thousand dollars, which they were directed to hold to await
Feb. 1904.] Brown v. Brown. 571
the final decision of the court on the matters in litigation be-
tween the interveners and the other parties to the suit. After- '
ward four of the plaintiffs, children of the testator, in open
court withdrew all opposition to a decree in favor of the in-
terveners, and asked the court to direct the payment to the
interveners out of the amount retained in the hands of the
referees, of such portion thereof as should be deducted pro-
portionately from the shares of the plaintiffs joining in such
request, and the court entered an order in accordance with
their request. Afterward the appeal from the county court
in the proceeding to construe the will and the suit between
the interveners and the other parties to the partition suit hav-
ing been consolidated, the issues in both were tried on the same
evidence. The court held against the interveners on their
contention as to the construction of the will, but held fur-
ther that they had been unintentionally omitted from the
will by accident or mistake, and were therefore entitled to a
share of the estate by virtue of the provisions of section 149,
chapter 204 23 of the Compiled Statutes (Annotated Stat-
utes, 5014), relating to the omission of children or the issue
of any deceased child from a will. Thereupon the inter-
veners, over the objections of their opponents, were given
leave to amend their petition of intervention in such a way as
to make the allegation, "neither they nor their deceased
father were mentioned by name in said will," read, "neither
they nor their deceased father were mentioned by name in
said will, but these petitioners were omitted therefrom by
mistake or accident, unless they were included in the general
designation of 'children of my own body begotten.' " It is un-
necessary to go into details as to what followed the amend-
ment. Eventually the parties were permitted to introduce
evidence on the issues tendered by such amendment, and the
court found in favor of the interveners, and entered a de-
cree directing that the proportionate share should be paid
from the proceeds of the sale retained by the referees. The
defendants bring the record here for review on error.
An examination of section 149, supra, will dispose of some
of the questions raised in this case; it is as follows: "When
any testator shall omit to provide in his will for any of his
children, or for the issue of any deceased child, and it shall
appear that such omission was not intentional, but was made
by mistake or accident, such child or the issue of such child
S78 American State Repoets, Vol. 115. [Nebraska,
shall have the same share in the estate of the testator as if he
had died intestate, to be assigned as provided in the preced-
ing section."
One question arising under this section is, whether parol
evidence is admissible to show whether the omission was in-
tentional. The decisions of other courts, based on statutes
of a similar character, are in conflict. Wilson v. Fosket, 6
Met. (Mass.) 400, is a leading case in the affirmative. This
ease is reported and annotated in 39 Am. Dec. 736. To the
same effect are the following : Lorieux v. Keller, 5 Iowa, 196,
68 Am. Dec. 696 ; Stebbins v. Stebbins, 94 Mich. 304, 34 Am.
St. Rep. 345, 54 N. W. 159; Moon v. Estate of Evans, 69
Wis. 667, 35 N. W. 20. In the last case, the doctrine ap-
pears to ^^'^ have been applied without question. Such evi-
dence is held inadmissible in the following cases: Estate of
Garraud, 35 Cal. 336; In re Estate of Stevens, 83 Cal. 322,
17 Am. St. Rep. 252, 23 Pac. 379; Bradley v. Bradley, 24
Mo. 311 ; Pounds v. Dale, 48 Mo. 270 ; Chace v. Chace, 6 R.
I. 407, 78 Am. Dec. 446. It is not easy to reconcile the doc-
trine of either line of authorities with the rule which re-
quires the courts to give effect to the intentions of the testator
because, in either case, a finding that the omission of a child
or grandchild from the will was unintentional, is equivalent
to a finding that the will does not reflect the intentions of
the testator. When such fact is once established, what his
intentions actually were becomes a matter of conjecture, be-
cause, had he made provision in the will for the pretermitted
child, such provision of necessity would have resulted in a
modification of the provisions made for the objects of his
bounty. Just how he would have modified the other bequests
or devises to make provision for such child can rarely, if
ever, be ascertained with certainty. However that may be,
we are disposed to follow the cases holding that parol evidence
is admissible to show whether the omission was intentional.
In addition to the reasons given in cases supporting that doc-
trine, we find an additional reason in the language of our
section 149, and the section immediately preceding it. Sec-
tion 148 provides: "When any child shall be bom after the
making of his parent ""s will, and no provision shall be made
therein for him, such child shall have the same share in the
estate of the testator as if he had died intestate, .... unless
it shall be apparent from the will that it was the intention
Feb. 1904,] Bkown v. Brown. 573
of the testator that no provision should be made for such
child."
The foregoing provision shows that the lawmakers worded
the section under consideration advisedly, and with a view to
express their meaning fully and clearly. If they saw the
importance of limiting the evidence of the intentions of the
tftstator in regard to posthumous children to the will itself,
it is not at all likely that in the next section they would have
left it a matter of speculation, ^^^ whether such proof should
be limited to the instrument itself, or might be supplied by
parol. We are satisfied that whether the omission was in-
tentional or unintentional is a question of fact, which may be
established by parol testimony.
Another question which has arisen under statutes similar
to ours is whether the burden of proof is upon the preter-
mitted child or grandchild to show that he was unintentionally
omitted from the will, or whether it is upon those claiming
that his omission was intentional. The Massachusetts stat-
ute, for present purposes, may be said to be substantially the
same as our section 149, save that, instead of the clause, "and
it shall appear that such omission was not intentional, but
was made by mistake or accident," the Massachusetts stat-
ute reads, "unless it shall appear that such omission was in-
tentional and not occasioned by mistake or accident," In
Ramsdill v. Wentworth, 106 Mass, 320, it was held that the
clear inference from the use of the words, ' * unless it appears, ' '
etc., is that the burden of proof is on those claiming that the
omission of the child from the will was intentional. The dif-
ference between the Massachusetts statute and our own is
important on the question of the burden of proof. There,
the child or grandchild omitted from the will receives a dis-
tributive share, unless it appear that the omission was in-
tentional, and not occasioned by mistake or accident; here,
he receives such share, if it appear that his omission from the
will was not intentional, but was made by mistake or acci-
dent. It seems to us that, under our statute, the inference
that the burden of proof is on the pretermitted child is as
clear from the words, "and it shall appear that such omission
was not intentional, but was made by mistake or accident,"
as that drawn by the court in Ramsdill v, Wentworth, 106
Mass. 320, from the words, "unless it appears," etc. Un-
der section 149, a child omitted from the will mu.st show two
574 American State Reports, Vol. 115. [Nebraska,
things: First, that he was omitted therefrom; second, that
such omission was not intentional. It is only when he has
shown both of those facts that he ^^"^ is entitled to a share
of the estate. The omission to provide for the child in the
will, though unintentional, furnishes no ground for. object-
ing to the probate of the will, but the remedy is after pro-
bate and by construction : Doane v. Lake, 32 Me. 268, 52 Am.
Dec, 654 ; Schneider v. Koester, 54 Mo. 500 ; Pearson v. Pear-
son, 46 Cal. 609. Hence, to hold that the burden of proof
is on the parties claiming the omission was intentional would
be to hold, in effect, that, after the will has been admitted
to probate as the solemn declaration of the testator's inten-
tions as to the disposition of his property and those whom he
had selected as proper objects of his bounty, it fails, prima
facie, to express such intentions. It may be said that it is
to be presumed that a testator would not intentionally fail
to provide for a child or grandchild. If there is the slightest
presumption of that kind, it is far weaker than the presump-
tion that one, competent to make a will and to understand its
contents, would forget or overlook one of his children or
grandchildren. To fail to make provision for a child or
grandchild in a will is a common occurrence; to forget or
overlook them, under ordinary circumstances, is rare. In
our opinion, the burden of proof was upon the interveners
to show that their omission from the will was unintentional,
and the result of accident or mistake. In reaching this
conclusion, we have not overlooked Stebbins v. Stebbins,
94 Mich. 304, 34 Am. St. Rep. 345, 54 N. W. 159. The
decision in that case is based on a statute worded like our
own. The majority opinion merely holds that the evidence
was sufficient to warrant the submission of the question
whether the omission was intentional to the jury, and does
not discuss the question of the burden of proof. In an able
dissenting opinion, by Montgomery, J., concurred in by Mc-
Grath, C. J., that question is discussed at length, and the
conclusion reached that the burden was on the party claim-
ing that the omission was unintentional. On the facts stated,
the majority opinion is not necessarily in conflict with the
conclusion reached by the minority on that question. Hence,
the dissenting opinion may be regarded as authorit}'^ for the
construction *®® we have placed on the section under con-
sideration, and, so far as our research has extended, is the
Feb. 1904.] Brown v. Brown. 575
only attempt at a judicial interpretation of the language
of that section.
Some of the questions presented by the record require
more specific attention, and we shall now proceed to con-
sider them. It is contended that the court erred in permit-
ting intervention after a decree for a partition of the lands
had been entered. This contention is based on section 50a
of the code, which provides that "any person who has or
claims an interest in the matter in litigation, .... may be-
come a party to an action between any other persons, ....
either before or after issue has been joined in the action, and
before the trial commences." But, however that section
may affect the right of a party to intervene, we are satisfied
that it was not intended, and should not be permitted, to re-
quire a court to pursue an erroneous theory to a worthless
decree, nor to curtail in any degree its power to do complete
justice, so long as it retains jurisdiction of the cause and the
parties: See section 46 of the code. The present case will
illustrate our meaning. It is a suit in equity in which the
children of the testator claim title in fee to the lands to the
exclusion of all other persons. Proceeding on the theory
that they were the exclusive owners in fee, the court entered
a decree and directed a sale. It was then brought to the at-
tention of the court that the interveners claimed an undi-
vided interest in the estate. That such claim was brought
to the attention of the court by their petition of inter-
vention is wholly immaterial, so long as the court was satis-
fied that there might be some basis for the claim. Will it be
claimed that the court was bound to disregard such claim,
because it was not brought to its attention before decree, and
to proceed to a sale of a doubtful title ? To those who had
actual knowledge of the interveners' claims, such claims,
undetermined, would be more than likely to prevent a sale;
a sale to one not having such notice would amount to a judi-
cial fraud. The court still retained jurisdiction of **^ the
cause and the parties, and it seems to us it was not only its
right, but its duty, to hear and determine the claims of the
interveners, although not presented until after decree. It
is true the sale was made under the decree as it stood when
the petition in intervention was filed, but that appears to
have been with the consent of the interveners who joined in
the motion to confirm, and who asked only a share of the pro-
576 Amekican State Reports, Vol. 115. [Nebraska,
ceeds. Although our attention has been called to no case
directly in point, we are all of the opinion that, under the
peculiar facts disclosed by the record, it was not error to per-
mit the interveners to come into the case after decree.
It is argued at some length that the court erred in over-
ruling the demurrer to the petition of intervention. As such
petition stood when the demurrer was overruled, it was based
on the theory that the interveners, who it will be remembered
are grandchildren of the testator, were included within the
term "children" in the residuary clause of the will. That
theory, to our minds, is untenable. It is a familiar rule of
construction that, ordinarily, words should be taken in the
sense in which they are commonly used. It is a matter of
common knowledge that, in ordinary conversation and the
affairs of life, the word "child" is commonly used to desig-
nate a son or daughter, a male or female descendant of the
first degree. Such is Webster's definition of the term, and
such is its primary signification according to all standard
lexicons. It is safe to say that, standing alone, it is never
understood to mean grandchildren. Bouvier says: "The
term 'children' does not, ordinarily and properly speaking,
include grandchildren or issue generally; yet sometimes that
meaning is affixed to it in cases of necessity." In Re Estate
of Chapoton, 104 Mich. 11, 53 Am. St. Rep. 454, 61 N. W.
892, the court, referring to the language of Bouvier said:
"We shall find this statement of Bouvier confirmed in many
cases involving wills, although cases are not rare where the
term 'children' has been held coextensive with 'issue' or
'descendants.' Such holdings are not put upon the **®
aio ground that the word 'children' has a technical or pecu-
liar meaning in the law, but because such meaning is necessary
to give effect to the instrument, or because of an evident in-
tent upon the part of a testator. It is in deference to the
rule that the intent is to be sought after and given effect in
the construction of wills, which may be done to the extent
of holding illegitimate children to be included in the term,
'children,' though the law ordinarily excludes them. See
Bouvier 's Dictionary, title 'Child,' subd. 3; In re Curry's
Estate, 39 Cal. 529; 4 Kent's Commentaries, 345. In Reeves
V. Brymer, 4 Ves. (Eng.) 692, cited by counsel, the court
said that 'children' may mean 'grandchildren,' where there
can be no other construction, but not otherwise : Pride v.
Fooks, 3 De Gex & J. *252."
Feb. 1904.] Brown v. Brown. 577
It is obvious from the portions of the will heretofore set
out that no strained or unusual meaning of the word "chil-
dren" is required to give effect to the instrument, or to
carry out the intention of the testator. It is clear, therefore,
that the interveners were not included in the residuary
clause of the will, and that their original petition of inter-
vention, based on the theory that they were thus included,
failed to state a cause of action. But as the court found
against that theory, and it was afterward abandoned by the
amendment to the petition of intervention, the overruling of
the demurrer was error without prejudice.
It is next contended that the court erred in permitting the
amendment to the petition to the effect that the interveners
had been omitted from the will by accident or mistake. The
amendment was made after the case had been tried, and
after the defendants had interposed proper and timely ob-
jections to the petition of intervention, and to the introduc-
tion of evidence which would tend to support the issue ten-
dered by the amendment. It is clear, therefore, that the
amendment was not warranted as an amendment to conform
to the proof, because it is a familiar rule that an amendment
of that character is permissible only ^** where the evidence
tending to sustain the amendment has been received without
objection. But, after the amendment was made, the case was
opened, and the parties were permitted to introduce evidence.
and were given a hearing on the issue tendered by the amend-
ment. What has been heretofore said on the question of the
right of the interveners to <;ome into the case after decree is
applicable here. If the evidence taken before the amend-
ment was offered was of such a character as to satisfy the
court that it would be unable to convey a clear title by a sale
of the lands, without a further investigation of the claims of
the interveners, it was eminently proper to permit the amend-
ment, and give all of the parties an opportunity for further
investigation and hearing. Such a course, it seems to us,
was in the interest of all parties to the suit, and one of which
none should be heard to complain, especially when the in-
terest of minors is involved.
Another contention of the defendants is that the finding
of the district court, that the omi.ssion of the interveners from
the will was unintentional, is not sustained by sufficient
evidence. The testator was seventy-six years old. The evi-
dence, on the one hand, tends to show that his memory was
Am. St. Rep., Vol. 115—37
678 American State Reports, Vol, 115. [Nebraska,
greatly impaired; on the other, that it was unusually reten-
tive for a man of his years. There is little evidence bearing
directly on what his intentions were with respect to the inter-
veners at the time the will was made. On the part of the
interveners, it was shown that, after the will was made, the
testator repeatedly stated that he had made provision therein
for all his grandchildren; that he had given them one hun-
dred dollars each, except one who was an imbecile, to whom
he stated he gave nothing because of his mental condition.
That particular grandchild is not a party to this suit, and
is not of the same parents as the interveners. On the part
of the defendants, it was shown that, at the time the will
was made, the attention of the testator was specifically called
to the omission of the three grandchildren from the will, but
notwithstanding that fact, he executed it without any altera-
tion and showed by his words **^ and conduct that he was
fully aware of the omission, and that it was intentional ; that,
after the will was made, he talked over the contents with a wit-
ness in the suit, and, in such conversation, the omission was
pointed out to him, and he was asked why he had not pro-
vided for the other grandchildren, and he gave his reasons
for the omission. The evidence further shows that there was
some trouble between the testator and the interveners or
some member of their family, the exact nature of which is
not clearly disclosed. There is also evidence tending to show
that the failure of the testator to recognize acquaintances on
the street was due, rather to his defective eyesight, than to
any impairment of memory.
By the pleadings on file in this suit, both 'the interveners
and the defendants are committed to the theory that the
will was duly admitted to probate. The decree of the county
court admitting the will to probate is conclusive on all
parties as to its due execution, and all questions affecting the
competency of the testator to make a will : 2 Black on Judg-
ments, 2d ed., sec. 635. Hence, it stands as one of the es-
tablished facts in this case that the testator, at the time the
will was made, was not lacking in testamentary capacity.
In other words, it is conclusively established by the probate
of the will that, at the time it was made, the testator pos-
sessed sufficient mind to understand, without prompting,
the business about which he was engaged, the kind and ex-
tent of- the property to be willed, the persons who were the
natural objects of his bounty, and the manner in which he
Feb. 1904.] Brown v. Brown. 579
desired the disposition to take effect, because that is all in-
eluded in the findings on which the decree admitting the will
to probate is based: Schouler on Wills, 3d ed., sec. 68. lu
view of the fact that the will had been admitted to probate,
and the testamentary capacity of the testator thereby set at
rest, we think the evidence is insufficient to sustain a find-
ing that the omission of the interveners was unintentional.
As stated in a former part of this opinion, the burden of
proof was on the interveners. The testimony adduced by
them ^^^ is not wholly inconsistent with the theory that the
omission was intentional. On the other hand, the testimony
adduced by the defendants, at least a portion of it, is of
such a character that it must either be rejected, or the omis-
sion held to have been intentional. None of the witnesses
are discredited; on the contrary, it would seem that each
gave the facts as he understood them. Hence, there is no
ground for rejecting the testimony showing affirmatively that
the testator knew of the omission, and that it was intentional.
An examination of the entire evidence satisfies us that the
finding of the district court is erroneous.
It is recommended that the decree of the district court be
reversed and the cause remanded for further proceedings
according to law.
Glanville, C, concurs.
Fawcett, C, not sitting.
By the COURT. For the reasons stated in the foregoing
opinion, the judgment of the district court is reversed and
the cause remanded for further proceedings according to law.
PBETEBMITTED HEIB&
I. Object of Statute, 580.
n. Bights and Bemedies of Omitted Child.
a. Are Unaffected by the Will, 580.
b. Takes Title by Descent, 581.
m. Intention to Omit Child.
a. When Inferable, 582.
b. Necessity for Legacy, 581.
IV. After-bom Children, 585.
V. Posthumous Children, 586.
VI. Adopted and Illegitimate Children, 587.
VIL Parol or Extrinsic Evidence to Show Intent.
a. General Bule as to Admissibility of, 588.
b. Presumption and Burden of Proof, 590.
580 American State Reports, Vol. 115. [Nebraska,
I. Object of statute.
The object of a statute providing that a testator shall be deemed
to have died intestate as to children not named or provided for in
the will is to produce intestacy only when the child is unknown
or forgotten and thus unintentionally omitted: Woods v. Drake, 135
Mo. 393, 37 S. W. 109. The intent of such a statute is not to pre-
vent children from being disinherited, but to require that the in-
tention to disinherit them should clearly appear: Boman v. Boman,
47 Fed. 849. The object of the statute in regard to pretermitted
heirs is not to compel the testator to make provision for any child,
but solely to protect the children against forgetful omission or
oversight, and the failure to allude to them in the will is evidence
that they were omitted through forgetfulness of their existence, but
when they are present to the mind of the testator, the statute af-
fords no proection if provision is not made for them, and the fact
that they are mentioned by the testator in his will is generally
conclusive evidence that they were present to his mind, and takes
them out of the provisions of such statutes: Estate of Callaghan,
119 Cal. 571, 51 Pac. 860, 39 L. E. A. 689. A statute providing for
pretermitted children is not intended to produce equality, or to di-
minish the power of the testator, and any provision in the will which
affords evidence that the child has not been forgotten is sufficient
to prevent the application of the statute, and devising the child
a vested remainder carrying with it a vested right to property
answers its demands: Allison v. Allison, 101 Va. 537, 44 S. E. 904,
63 L. E. A. 920.
II. Bights and Bemedies of Omitted Child.
a. Are Unaffected by the Will. — The right of a pretermitted child,
born in the testator's lifetime, accrues on the testator's death:
Shelby's Exrs. v. Shelby, 6 Dana, 60; Schneider v. Koester, 54 Mo.
500. The pretermitted child succeeds immediately by operation of
law to the same portion of the testator's real property as if no will
had been made, and as to such portion the testator is regarded as
dying intestate, and the succession is directed by law and not by
the will, and, as a necessary consequence, it would follow that every
provision in the will, directly or indirectly, attempting to dispose
of such portion of the estate, except for the discharge of the de-
cedent's debts, or other charges accruing in due course of admin-
istration, is inoperative against such child: Smith v. Olmstead, 88
Cal. 582, 22 Am. St. Eep. 336, 26 Pae. 521, 12 L. E. A. 46. A child
and heir at law of a testator for whom his father has, by mistake,
failed to provide by wiU, but who, being of full age, has appeared
in proceedings resulting in a judgment establishing the will, cannot
recover an intestate's portion of the land thereby devised: New-
man v. Waterman, 63 Wis. 612, 53 Am. Eep. 310, 23 N. W. 696.
But this is clearly a mistaken conclusion, for if a child,
Feb. 1904.] Brown v. Brown. 581
born after the execution of the will and during the lifetime
of the testator is not named or referred to therein, he cannot contest
the will, on the ground that he is omitted from it, as his rights are
independent of it: Mclntire v. McTntire, 64 N. H. 609, 15 Atl. 218.
If a testator fails to mention or provide for one of his children in
his will, the will is not invalid, and a suit to set it aside is not the
proper remedy, but the testator dies intestate as to such child who
may resort to the proper remedj' to recover the share of the prop-
erty saved to him by the statute: Schneider v. Koester, 54 Mo. 500;
Matter of Gall, 5 Dem. Sur. 374; George v. Robb, 4 Ind. Ter. 61, 64
S, W. 615. One remedy of such child is to move the court to pro-
ceed with the administration of the estate, and as part of such ad-
ministration to set over to such child his share of the estate as
though the executor had died intestate: In re Barker's Estate, 5
Wash. 390, 31 Pac. 976. Or an action may be commenced by a child
born after the making of a will, if not provided for or mentioned
therein, to enforce its right to its portion of the estate against lega-
tees, notwithstanding the estate has not yet been distributed: Bunce
V. Bunce, 20 Civ. Proc. Rep. 332, 14 N. Y. Supp. 659. Such preter-
mitted heirs may also maintain ejectment for their inheritance:
McCracken v. McCracken, 67 Mo. 590; Smith v. Robertson, 89 N.
Y. 555. If there is a surviving wife and children of deceased who
are devisees in the will, and the testator makes no provision therein
for another child, such pretermitted child may maintain ejectment
for his intestate share of the realty of which the testator died
seised, if there is no pending administration: Peareon v. Pearson,
46 Cal. 609. Or a child omitted in the will of his father may bring
ejectment to recover his portion of the real estate, or he may bring
a suit by petition for partition: Gage v. Gage, 29 N. H. 533; and
children not mentioned in an ancestor's will, and as to whom he died
intestate, may come in as defendants, and set up their rights in
partition proceedings commenced by devisees under the will: Thomas
V. Black, 113 Mo. 66, 20 S. W. 657. In such cases the will is not
void, but those having possession of the estate will be required
to contribute their proportionate part of the distributive share of
the omitted child: Branton v. Branton, 23 Ark. 569; Trotter v. Trotter,
31 Ark. 145.
b. Takes Title by Descent. — In many states of the American
Union, by express statutory provision, if a testator fails to name
or make provision for his child, and in some cases the issue of such
child, if the parent be dead, in his will without showing in some
way that such omission was intentional, the pretermitted child takes
the same share in the estate, and holds by the same title, as though
the testator had died intestate. Under such statutes if the testator
fails to make provision for a child in his will without showing that
it was intentional, the pretermitted child takes the same share in
582 American State Reports, Vol. 115. [Nebraska,
the estate, and holds by the same title, as though the testator had
died intestate, and if the testator leaves a surviving wife and other
children, who are devisees, the pretermitted child takes title by
descent, and becomes a tenant in common with the devisees: Pear-
son V. Pearson, 46 Cal. 609; In re Grider, 81 Cal. 571, 22 Pac. 908. If
any child, or issue of a child, is not named or referred to, and is
not a legatee or devisee in the will of a person deceased, he is en-
titled to the same portion of the estate as if the deceased died intes-
tate: Bloom v. Strauss, 70 Ark. 483, 69 S. W. 548, 72 S. W. 563; Har-
gadine v. Pulte, 27 Mo, 423; Bradley v. Bradley, 24 Mo. 311; Gage
V. Gage, 29 N. H. 533.
m. Intention to Omit Child.
a. When Inferable. — A child or its issue omitted from the tes-
tator's will takes no share of his estate where it is made to appear
that the omission of a devise in the will was intentional or was not
occasioned by mistake: Merrill v. Hayden, 86 Me. 133, 29 Atl. 949;
Bamsdill v. Wentworth, 101 Mass. 125. But there is no general
rule for determining what is a sufficient indication of an intention
to omit, and such intention, or want of intention, may be shown
in various ways. Sometimes a very slight reference to the omitted
child is deemed sufficient to show the intent to omit: Khoton v.
Blevin, 99 Cal. 645, 34 Pac. 513; Miller's Appeal, 113 Pa. 459, 6
Atl. 715; while, on the other hand, it has been decided that although
a will may refer to children expressly, such reference may not be
sufficient to exclude such children from the benefit of the statute:
Lurie v. Eadnilzer, 166 111. 609, 57 Am. St. Eep. 157, 46 N. E. 1116;
Estate of Stebbins, 94 Mich. 304, 34 Am. St. Eep. 345, 54 N. W. 159,
The fact that a testator mentions in his will one closely related
by blood or intimately associated in family relations with an omitted
heir does not overcome the presumption that he was unintentionally
omitted, nor show as matter of construction that he was in the mind
of the testator and intentionally omitted: In re Salmon, 107 Cal.
614, 48 Am, St. Eep. 164, 40 Pac. 1030; and in order to prevent an
heir not provided for in the will from taking his distributive share,
it must be shown that the testator remembered him, and although
he need not be directly named in the will, it must contain provi-
sions or language that point directly to him, and it cannot be in-
ferred, because the testator provided for the payment of debts due
two of his children, that he intended to disinherit the remainder of
them: Pounds v. Dale, 48 Mo. 270. If a testator has been twice
married and leaves surviving him children by both wives, and a will
by which he devises his entire estate to his second wife for life
with remainder to her children begotten by him, with no other
mention of his children, it cannot be presumed that the testator
intentionally omitted his children by his first wife, and they are
entitled to share in his estate after the termination of the life es-
Feb. 1904.] Bbown v. Brown. 583
tate: Thomas r. Black, 113 Mo. 66, 20 S. W. 657. Or if a testator
devises his estate to his wife for life and leaves small bequests to
such children as were living at the date of his will, with no mention
of his grandchildren, issue of a deceased son, and no disposition
of the property after the termination of the life estate, no intent
can be inferred from the will to disinherit any of those who are
entitled to take after the termination of the life estate, and there-
fore the children of his deceased son are entitled to recover a share
of his estate: Hoffner v. Wynkoop, 97 Pa. 130. If it is shown that
a testator, who devised all of his estate to his wife and her heirs,
understood that he had provided for his children by giving to his
wife only a life estate in his property, this is sufficient to show that
his omission to provide in his will for his children was not inten-
tional, and was caused by accident and mistake, and they are there-
fore entitled to the same share of his estate as if he had died intes-
tate: Ramsdill v. Wentworth, 101 Mass. 125. Contrary to the rule
of the above cases it has been decided that if a testator devises his
whole estate to his wife for life, with remainder to his children,
naming them, this will show an intent to exclude from the provi-
sions of his will the testator's grandchild, issue of a child who died
before the execution of the will: McMichael v. Pye, 75 Ga. 189; and
if a testator leaves, seven grandchildren and in his will mentions
two of them only and their parent, it must be presumed that the
other five grandchildren were intentionally omitted, and not omitted
through forgetfulness: Merrill v. Sanborn, 2 N. H. 499. If a testator
devises his estate to his wife and provides in his will that her
rights thereunder shall not be affected by the birth of any child
born to him before or after his decease, he shows an intentional
omission of his children from the provisions of his will, and a child
born to him before his decease cannot maintain an action to re-
cover a share of his estate: Prentiss v. Prentiss, 11 Allen, 47. If
at the date of a testatrix's will she has one child living and is
expecting the birth of another, which is born two weeks thereafter,
provisions in the will that in case she died leaving no child, she
bequeathed a certain legacy to her mother, and that if one or more
children born to her should be living at her death, she bequeathed
the income of such legacy only to her mother, the fund to go to
her husband and heirs, sufficiently refers to her children to show
an intent to omit them from the provisions of the will, and pre-
cludes them from sharing in the estate: Smith v. Smith, 72 N. H.
168, 54 Atl. 1014. If a testator remembers and mentions his daughter
in his will, it cannot be presumed that he forgot to mention such
daughter's child, whom he had adopted so as to entitle such child
to an heir's share in his estate: Fugate v. Allen, 119 Mo. App. 183,
95 8. W. 980.
If the omission of a child from his father's will is intentional,
although the testator would not have entertained auch an intention
but for a mistake as to the legal effect of matters outside the will,
584 AMERiCAtf State Reports, Vol. 115. [Nebraska,
the child is not entitled to a proportionate share of the estate: Hur-
ley V. O 'Sullivan, 137 Mass. 86.
b. Necessity for Legacy. — Where a testator in his will makes
such an allusion to a child as to show that he had not forgotten
to consider such child in the distribution of his estate, it will be
sufficient to exclude such child from a distributive share in the es-
tate of the testator, and it is not necessary that the child should
have a legacy in the will: Terry v. Foster, 1 Mass. 146, 2 Am. Dec.
6; Church v. Crocker, 3 Mass. 17. Thus if a testator devises estate
to his grandchildren, "children of my daughter S.," but gives no
legacy to such daughter, she is not entitled to a portion of the tes-
tator's estate in the same manner as if he had died intestate: Wild
V. Brewer, 2 Mass. 570. If a testator, among his descendants,, leaves
sundry children of a deceased daughter, and in his will he mentions
her husband as his son in law, and gives a legacy to one of such
children, it must be presumed that he had not forgotten the other
grandchildren, and that they are therefore not entitled to a portion
of his estate: Wilder v. Goss, 14 Mass. 357. If a child is expressly
named in the will, though no legacy is left him, he is not entitled
to the benefit of the statute, as the testator does not die intestate
as to him: Beck v. Metz, 25 Mo. 70. If a testator expressly excludes
his children from any legacy under his will, he thereby excludes the
issue of a deceased child: Rhoton v. Blevin, 99 Cal. 645, 34 Pac. 513.
When a will bequeathed ten dollars to the testator's daughter, it was
decided to be not a case of an unintentional omission to provide
for such child: Case v. Young, 3 Minn. 209; and it was also decided
in Woods v. Drake, 135 Mo. 393, 37 S. W. 109, that specific bequests,
by name, to the minor children of the testator's adopted daughter,
with whom they live, is a sufficient naming of, or providing for, the
daughter to prevent the operation of a statute declaring that a tes-
tator shall be deemed to have died intestate, as to children not
named or provided for in the will. On the contrary, it has been
decided under an exactly similar statute that a clause in a will
devising "to each of my heirs at law the sum of one dollar" will
not take the will out of the operation of such statute: Boman v.
Boman, 49 Fed. 329, 1 C. C. A, 274. And that a clause in a will by
which the testator bequeaths to his son the family Bible, if he de-
sires it, and if not, providing that it may be put into the hands of
a granddaughter, naming her, and a clause directing the division
of his books and clothing among his brothers and their families,
but giving such granddaughter the privilege of selecting from
them, if it is her wish, cannot be said, as matter of law, to make
provision for her within the meaning of such statute, so as to conclude
her from claiming that this testator unintentionally or by mistake
or accident omitted to provide for her in his will: Estate of Stebbins,
94 Mich. 304, 34 Am. St. Rep. 345, 54 N. W. 159; but how a testator,
while referring in his will to one of his heirs by name and making a
provision under which some benefit may accrue to her, can be held
Feb. 1904.] Brown v. Brown. 585
to have overlooked or forgotten, or not to have intentionally omitted
her from everything except this benefit so provided, we cannot con-
ceive.
rV. After-bom Children,
Statutes which provide in effect that if a testator shall omit to
provide in his will for any of his children, or for the issue of a de-
ceased child, they shall take the same share of his estate that they
would be entitled to if he died intestate, unless they have been
provided for in his lifetime, or unless it appears that the omission
was intentional, and not occasioned by accident or mistake, apply to
children born in the testator's lifetime, but after the making of the
will: Bancroft v. Ives, 69 Mass. (3 Gray) 36; Minot, Petitioner,
164 Mass. 38, 41 N. E. 63. And if a child is born to a testator
during his lifetime, after making his will, making no provisitf^n for
him, such child will share in the estate the same as if his father had
died intestate, unless it appears from the will that the omission was
intentional: Ward v. Ward, 120 111. Ill, 11 N. E. 336; Woodard
V. Spiller, X Dana, 180, 25 Am. Dec. 139; Shelby's Exrs. v. Shelby,
6 Dana, 60; Shelby's Exrs. v. Shelby's Devisees, 1 6. Mon. 266; Car-
penter V. Snow, 117 Mich. 489, 72 Am. St. Rep. 576, 76 N. W. 78,
41 L. R. A. 820. The fact that the testator lived many years after
omitted children were born without making any express provision
for them has no effect to deprive them of the benefit of the stat-
ute: Bresee v. Stiles, 22 Wis. 120. Although a testator's intention
to disinherit an after-born child need not be expressly stated in the
will, yet it must in some way be indicated thereby, and the fact
that the testator knew at the time of its execution that a child was
likely to be born to him for whom he made no provision will not
deprive such child of its rights under the provisions of the stat-
ute: Lurie v. Radnitzer, 166 111. 609, 57 Am. St. Rep. 157, 46 N.
E. 1116.
But the facts that a testatrix, who by will dated nine months
after her marriage devised all her estate to her husband, and had
by an antenuptial agreement reserved to her sole use certain real
estate, and the right to dispose of it by will, and that she had a
child born about a month after the will was made, will justify a
finding that her omission to provide for such child was intentional
and nob caused by accident or mistake: Peters v. Siders, 126 Mass.
135, 30 Am. Rep. 671. And there is no omission to provide for a
child by will if the testator, after a bequest to his wife, whom he
knew to be pregnant at the time of making the will, gave the whole
of the rest of his property to a trustee to pay the whole income to
the wife during life, and the reversion to those who at the time of
her death v.ould be his heirs at law: Minot, Petitioner, 164 Mass.
38, 41 N. E. 63. A devise by a testator to his wife of all of his
property with the clause, "and her rights under this provision
shall not be affected or changed by the birth of any child of miue,
if any shall be born to me before or after my decease," manifests an
586 American State Reports, Vol. 115. [Nebraska,
intention not to provide for a child born after the execution of the
will: Prentiss v. Prentiss, 14 Minn. 18. A testator may totally dis-
inherit his after-born children if such intent appears from his will,
or he may limit his bounty to them to anything, no matter how
insignificant it may be, and make its enjoyment depend upon any
contingency, however remote. Thus if a testatrix, by her will, de-
vises all of her estate to her husband, in case he should survive her,
otherwise to any child or children she might leave, and she after-
ward dies leaving surviving her her husband and three children,
born after the execution of the will, she shows a clear intent there-
in and thereby to disinherit her after-born children, in case of her
husband surviving her: Osborn v. Jefferson Nat. Bank, 116 HI. 130,
4 N. E. 791. So a will disposing of the testator's entire estate to
his wife absolutely, with power to sell and convey it as fully, amply,
and completely as could the testator in his lifetime, shows an in-
tention to disinherit a child born two months after making the
will, where the testator had two other children living when the
will was executed, for whom he made no provision: Harwke v. Chi-
cago etc. E. E. Co., 165 lU. 561, 46 N. E. 240.
V. 'Posthumous Children.
In many states if a child is born after the death of the testator,
and is not mentioned or provided for in the will, such child is, by
statute, entitled to the same share it would have received if its
father died intestate, and we apprehend that the same rule pre-
vails everywhere in the absence of statutory provision. In such
case no inference can be drawn from the fact that the posthumous
chUd is not mentioned or provided for in the will that the testsftor
intentionally omitted it: In re Buchanan's Estate, 8 Cal. 507; Shel-
by's Exrs. V. Shelby, 6 Dana, 60; Shelby's Exrs. v. Shelby's Devisees,
1 B. Mon. 266; Eyre v. Storer, 37 N. H. 114; Wilson v. Fritts, 32 N.
J. Eq. 59; Sanford v. Sanford, 5 Lans. 486, 61 Barb. 293; Northrop
V. Marquam, 16 Or. 173, 18 Pac. 449; Willard's Estate, 68 Pa. 327;
Burns v. Allen, 93 Tenn. 149, 23 S. W. Ill; Ensley v, Ensley, 105
Tenn. 107, 58 S. W. 288; Arraistead v. Dangerfield, 3 Munf. 20, 5
Am. Dec. 501; Chicago etc. E. E. Co. v. Wasserman, 22 Fed. 872.
Unless a posthumous child is provided for in the will of his parent,
the conclusive presumption is that he was not excepted, and the
law declares that he shall take the same share of his father's es-
tate as if such father had died intestate: Waterman v. Hawkins,
63 Me. 156. And declarations of the testator before and after mak-
ing his will are not admissible to show that an omission to provide
therein for a posthumous child was intended as a disinheritanc** of
such child: Burns v. Allen, 93 Tenn. 149, 23 S. W. 111. Although
a testator makes provision in his will for his "surviving children,''*
a child born to him after his death will take as though he died in-
testate when it does not expressly appear from the will that the
Feb. 1904.] Beown v. Brown. 5S7
testator had in mind when making it the birth of such posthumous
child: Bowen v, Hoxie, 137 Mass. 527. A posthumous child, un-
provided for and pretermitted by the will of his parent, is entitled
to a share of his estate, although such child is a daughter, and it
appears from the will that the testator intended to give all of his
estate to his sons: Armistead v. Dangerfield, 3 Munf. 20, 5 Am. Dec.
501.
Although it has been decided that a posthumous child cannot be
disinherited like a chUd born before the testator's death, or the
issue of a deceased child when it appears that the omission to re-
fer to him in the will was intentional: Waterman v. Hawkins, 63
Me. 156; yet the better rule undoubtedly is that a posthumous child
may be expressly excluded by the terms of the will, and if it ap-
pears therefrom that the testator intended to exclude all of his chil-
dren as a class from the provisions of his will and to make his
wife the sole object of his bounty, a posthumous child will be in-
cluded in this expressed intention: Leonard v. Enochs, 92 Ky. 186,
17 8. W. 437.
The right of a posthumous child to take the share of the testa-
tor's estate as if he had died intestate accrues at the time of the
birth of such child: Shelby's Exrs. v. Shelby, 6 Dana, 60; and the
heirs mentioned in the will must severally contribute such portions
of their real estate and personal property derived under the will as
will make the share of such pretermitted posthumous child equal
to what it would have been had his father, the testator, died in-
testate: Shelby's Exrs. v. Shelby's Devisees, 1 B. Mon. 266; Wilson
V. Fritts, 32 N. J. Eq. 59.
VL Adopted and Illegitimate Children.
The rights of pretermitted adopted children, that is, if they are
legally adopted, are equivalent to the rights of those born in wed-
lock. Hence if a testator dies leaving a will in which no refer-
ence is made to his adopted child, it must be deemed that such
omission was unintentional and such child is entitled to an heir's
share in the testator's estate: Fugate v. Allen, 119 Mo. App. 183,
95 8. W. 980; Van Brocklin v. Wood, 38 Wash. 384, 80 Pac, 530;
Sandon v. Sandon, 123 Wis. 603, 101 N. W. 1089.
As to whether illegitimate children unintentionally omitted to be
provided for in the will of their mother are entitled to share in the
estate left by her upon her decease as if she had died intestate is a
doubtful question, as it has been decided that such offspring is not
a "child" within the meaning of the statute providing for preter-
mitted children: Kent v. Barker, 2 Gray, 535. While a directly
opposite position was taken and holding made in Estate of Wardell,
57 CaL 484.
588 American State Reports, Vol. 115. [Nebraska,
Vn. Parol or Extrinsic Evidence to Show Intent.
s. General Rule as to Admissibility of. — As to whether, under stat-
utes in efifcc't providing that if a testator omits to provide in his
will for any of his children, the omitted child shall take the same
share of the testator's estate as if he had died intestate, unless
the child has been provided for by the testator in his lifetime, or
the omission was intentional, parol evidence is admissible to show
such omission to have been intentional or not, is a question upon
which there is a great conflict of authority, and the cases are so
equally divided that no established rule can be laid down. The
trend of modern authority is, however, to maintain that such evi-
dence is admissible. In Iowa, Massachusetts, Michigan, Bhode
Island and Utah, this rule is firmly established. Thus in these
jurisdictions, the question of whether such omission was intentional
is one of fact which may be shown by parol evidence: Woodvine v.
Dean (Mass.), 79 N. E. 882; and when an heir has been omitted
from the will of his ancestor, the question whether or not the omis-
sion to provide for such heir was intentional or unintentional, or
due to accident or mistake, is one of fact, which the pretermitted
heir has a right to have submitted to a jury: Estate of Stebbins,
94 Mich. 304, 34 Am. St. Eep. 345, 54 N. W. 159; Carpenter v. Snow,
117 Mich. 489, 72 Am. St. Rep. 576, 76 N. W. 78, 41 L. R. A. 820.
Where this rule prevails, omission to provide for an heir in a will
may be shown to be unintentional, either by the terms of the will
or by extrinsic parol evidence, and the relation of the testator to
the objects of his bounty and to the omitted heir, as well as his
intelligence, his mental and physical condition, and the circum-
stances connected with the making of the will, are all proper mat-
ters for the consideration of the jury: Ramsdill v. Wentworth, 101
Mass. 125; Estate of Stebbins, 94 Mich. 304, 34 Am, St. Rep. 345,
54 N. W. 159. But the evidence must be very clear that the omis-
sion was the result of accident or mistake, and the right of a child
omitted from the will to share in the estate can rest on no other
basis: Moon v. PJstate of Evans, 69 Wis. 667, 35 N. W. 20.
Parol evidence is admissible also to show that the omission of a
child of the testator from his will was intentional. Thus if the stat-
ute declares that, when a testator omits to provide in his will for
any of his children, such child must have the same share of the
estate of the testator as if he had died intestate, unless it appears
that such omission was intentional, and he does fail to provide in his
will for one of his children, the presumption under such statute
is, that the omission was not intentional, but such presumption
may be rebutted by extrinsic evidence, whether of declarations of
the testator or collateral facts showing the intention of the testator
to have been that which the language of the will expresses: In re
Atwood, 14 Utah, 1, 60 Am, St. Rep. 878, 45 Pac. 1036. An inten-
Feb. 1904.] Brown v. Brown. 589
tional omission of a child or the issue of a deceased child from the
testator's will need not appear from the will itself, but may be
shown by extraneous parol evidence: In re O'Connor, 21 R. I. 465,
79 Am. St. Rep. 814, 44 Atl. 591; Coulam v. Doull, 4 Utah, 269, 9
Pac. 568; affirmed 133 U. S. 216, 10 Sup. Ct. Rep. 253, 33 L. ed. 596.
Extrinsic evidence, either written or parol, as well as the declara-
tions of the testator at the time of executing the will, or made be-
fore or after, are admissible, under the rule under consideration, to
show that children not mentioned in the will have already been
provided for, and that such omission was intentional, and not the
result of accident or mistake: Lorieux v. Keller, 5 Iowa, 196, 68 Am.
Dec. 696; Converse v. Wales, 86 Mass. (4 Allen) 512. Parol evi-
dence, that the testator intentionally omitted a grandchild from his
will is admissible, it has been maintained, to exclude the claim of
such grandchild to a share of the estate: Wilson v. Fosket, 6 Met.
400, 39 Am. Dec. 736. And oral evidence that a testatrix, who de-
vised all of her estate to her husband, was a woman of great in-
telligence and capacity, that she was very fond of her children,
who were of tender age and never separated from her, that she had
great aflfection for and perfect confidence in her husband, and that
he was very devoted to her, is admissible, and will justify a find-
ing that her omission to provide in her will for her children was
intentional, and not caused by accident or mistake, although no
declaration of the intention of the testatrix appears: Buckley v. Ger-
ard, 123 Mass. 8.
On the other hand, it is maintained with equal vigor in Califor-
nia, Illinois, Missouri and Washington, that, under such statutes
as we are considering, parol evidence is not admissible to show an
intentional or unintentional omission by a testator of his child from
his will, and that such intent must appear from the face of the
will itself. The rule in California is that parol evidence is inad-
missible for the purpose of determining whether the omission from
a will of a child entitled, in the event of intestacy, to take a share
of the estate, was intentional on the part of the testator. This
can be determined only from the face of the will: Estate of Gar-
raud, 35 Cal. 336; In re Salmon, 107 Cal. 614, 48 Am. St. Rep. 164,
40 Pac. 1030; Estate of Callaghan, 119 Cal. 571, 51 Pac. 860, 39 L.
R. A. 689. And a declaration of intent on the part of a testator
to disinherit a child whose name is omitted from his will is not
admissible. Such intent must appear from the face of the will:
Estate of Stevens, 83 Cal. 322, 17 Am. St. Rep. 252, 23 Pac. 379;
Sandon v, Sandon, 123 Wis. 603, 101 N. W. 1089. In Illinois the
doctrine prevails that the declarations of a testator made at the
time of erasing a clause in his will which made provision for his
child are not admissible to prove his intention to disinherit such
Child: Lurie ▼. Radnitzer, 166 111. 609, 57 Am. St. Rep. 157, 46 N. E.
690 American State Reports, Vol, 115. [Nebraska,
1116. In Missouri, the intent of a testator to omit his heir from his
will must in some way appear from the face of the will itself, and
parol evidence of any nature including the declarations of the tes-
tator at the time of making the will, that he intended to omit his
children therefrom, are not admissible: Bradley v. Bradley, 24 Mo.
311; McCourtney v. Mathes, 47 Mo. 533; Pounds v. Dale, 48 Mo.
270. And if the children of the testator are neither expressly named
in the will, nor so alluded to as to show affirmatively that they were
in his mind when making it, the presumption is conclusive that
they were forgotten: Wetherall v. Harris, 51 Mo. 65.
In the state of Washington the rule prevails that extrinsic evi-
dence is not admissible to show that the provision of a will devis-
ing all of the testator's property to his wife, "and to her heirs
forever," was intended by the testator as such a provision for his
children as will take the will out of the operation of a statute
providing that a testator shall be deemed to die intestate as to such
child or children, or in case of their death, descendants of such
child or children not named or provided for in his will: Bower v.
Bower, 5 Wash. 225, 31 Pac. 598. Or if a wife dies leaving a will
giving her entire estate to her surviving husband, and making no
mention of their children, oral testimony is not admissible to show
that she intended to omit them: Morrison v. Morrison, 25 Wash. 466,
65 Pac. 779. Nor is extrinsic evidence admissible • to show that the
testator had made provision for omitted children, otherwise than
by his will: Hill v. Hill, 7 Wash. 409, 35 Pac. 360.
b. Presumption and Burden of Proof. — If a testator fails to pro-
vide in his will for one or more of his children, the presumption of
law is that such omission was not intentional: Tucker v. City of
Boston, 35 Mass. (18 Pick.) 162; Wetherall v. Harris, 51 Mo. 65;
Merrill v. Sanborn, 2 N. H. 499; Thomas v. Black, 113 Mo. 66,
20 S. W. 657; Marsh v. Loring, 6 Wall. 337, 18 L. ed. 802, affirm-
ing 2 Cliff. 469. Such presumption is, however, always rebut-
table, and in some jurisdictions this may be done by parol evidence:
In re AUwood, 14 Utah, 1, 60 Am. St. Kep. 878, 45 Pac. 1036; while
in others it can be rebutted only by its being made to appear from
the face of the will that the child or children were remembered
by the testator at the time of the execution of the will: Thomas v.
Black, 113 Mo. 66, 20 S. W. 657.
It has been decided, contrary to the rule laid down in the prin-
cipal case, that when a child omitted from his father's will claims
his share of the estate, the burden of proof is on those who oppose
the claim to show that the omission was intentional: Eamsdill v.
Wentworth, 106 Mass. 320.
March, 1904.] Ford v. State. 591
FORD V. STATE.
[71 Neb. 246, 98 N. W. 807.]
MANSIiAUGHTEB — ^Accidental Killing. — Pointing a Loaded
Revolver at a person who does not know whether it is loaded or not
is an assault, and if the person pointing the weapon pulls the
trigger and discharges it, thus kDling the person assaulted, the
former is guilty of manslaughter, although he had no desire or
intent to injure the person kUled, and the shot was accidental, (pp.
592, 593.)
MANSLAUQHTEB — ^Bequest for Instructions. — An accused
on trial for murder is entitled to have his theory of the defense sub-
mitted to the jury, but if under his own theory he is guilty of man-
slaughter, and is convicted of that crime only, his rights are not
prejudiced by a failure to present his theory of the defense by
specific instructions, (p. 594.)
MANSLAUGHTEB — Accidental Killing — Excessive Sen-
tence.— If a person points a pistol at another in sport, having some
reason to think that it is not loaded, and subsequently pulls the
trigger, causing the pistol to be discharged, and resulting in the
killing of the person pointed at, the person holding the pistol is
guilty of manslaughter, although the killing is purely accidental, but
under such circumstances a sentence of seven years in state's prison
is excessive and should be reduced to four years, (p. 596.)
A. G. Fisher and J. M. Tucker, for the plaintiff in error.
F. A. Front, attorney general, and N. Brown, for the de-
fendant in error.
^'^ BARNES, J. The state prosecuted Soney Ford in the
district court for Cherry county for killing one Allen Roth-
childs. The information charged him with murder in the
first degree, and the jury found him guilty of manslaughter.
The trial judge sentenced him to imprisonment in the peni-
tentiary for the period of seven years. To reverse this sen-
tence he brings error, and will be called the plaintiff.
1. It is contended that the evidence does not sustain the
verdict, and the special reason given for this contention is
that it was not shown that the killing was done while the
plaintiff was in the commission of an unlawful act. The
facts, as shown by the record, are substantially as follows:
The plaintiff is a colored man, who had been a soldier in the
regular army and was discharged while his command was
at Fort Niobrara, near the village of Valentine, in Cherry
county, Nebraska. After his discharge he was employed in
driving a team, with which he carried passengers to and fro
592 American State Reports, Vol. 115. [Nebraska,
between the village of Valentine and the Fort. On the even-
ing of December 24, 1902, at about 9 o'clock, the plaintiff
started from Valentine to the Fort with four or five pas-
sengers, and on the way they concluded to stop at what is
commonly known as the "ITog Ranch," a vile resort for men
and women, situated near the Post. When they arrived at
this resort, they tied the team and went into that part of the
ranch called the dance-hall. They found several persons
there, both men and women, all colored; and after warming
themselves at the stove the plaintiff danced a couple of times ;
after the dance was over he went up to the platform that the
piano stood on, and where Rothchilds sat, having the pistol
with *"** which the shooting was done in his hand. He
flourished it around, and the deceased said to him, "You
should mind how you handle a gun around here; you have
got your finger on the trigger"; and the plaintiff said, "I
know I have, but I want to show you how it works." The
pistol was pointed directly at Rothchilds' face, and was, at
that instant, discharged; deceased fell from the piano stool
where he was sitting, and the plaintiff ran up and tried to
help him up; threw the revolver on the floor, and said to the
bystanders, "Don't hurt me, I didn't mean to shoot him."
There was no evidence showing, or tending to show, any
ill-feeling between Rothchilds and the plaintiff, and no mo-
tive was shown for the killing. Of course there is some dis-
pute in the testimony over minor particulars, but the fore-
going fairly states the situation, and what occurred at the
time the fatal shot was fired. It is evident from the record
and the verdict that the jury acquitted the plaintiff of mur-
der in the first degree and murder in the second degree, find-
ing that there was no premeditation or deliberation, and that
the shooting was done without malice ; but did find that the
killing was done unintentionally while the plaintiff was in
the commission of an unlawful act. We think that the evi-
dence fully sustains this verdict. The pointing of the re-
volver at the deceased and the pulling of the trigger, under
the circumstances, was an unlawful act.
The pointing of a loaded revolver at another, if within
range, is an assault, and the same is true if it is not loaded,
if the person aimed at is not aware of the fact: Maxwell's
Criminal Procedure, 2d ed., 81; Beach v. Hancock, 27 N. H.
223, 59 Am. Dec. 373. As already indicated, to point a gun
March, 1904.] Ford v. State. 593
or pistol at a person who does not know but that it is loaded,
and has no reason to believe that it is not, is an assault: 1
McClain's Criminal Law, sec. 233; State v. Shepard, 10
Iowa, 126: State v. Triplett, 52 Kan. 678, 35 Pae. 815. In
the case of State v. Shepard, the defendant was indicted for
an assault with a gun with intent to commit murder, but was
^® convicted of an assault only. At the close of the testi-
mony the defendant requested the court to instruct the jury:
"First, that they must find that the gun with which the al-
leged assault was committed, was loaded and in a condition
to be fired off, or the presentation of it was no assault; sec-
ond, that if they found the gun was not loaded, they would
find the defendant not guilty; third, that if they did not find
an intent to kill, they should find the defendant not guilty."
The refusal to give these instructions was assigned as error.
The court said: "We do not think the court erred. Mr.
Greenleaf (volume 1, section 59) states that the presenting
a gun or pistol at a person is an assault. But he adds, that
'whether it be an assault to present a gun or pistol, not
loaded, but doing it in a manner to terrify the person aimed
at, is a point upon which learned judges have differed in
opinion.' .... After viewing the question in its various
lights, we are inclined to hold with those who regard it as an
assault, where the person aimed at does not know but that
the gun is loaded, or has no reason to believe that it is not."
In State v. Triplett, 52 Kan. 678, 35 Pae. 815, it was held:
**A person may be guilty of an assault upon another with a
pistol without firing it at all, and if he does fire it, without
intending at the moment of firing to hit the person upon
whom he is charged with committing the offense, when the
attitude or action of a party is threatening toward another,
and the effect is to terrify, the offense of assault is complete.
.... The state interferes with and punishes evil conduct
whenever, among other rea.sons, it tends to public disturb-
ance or breaches of the peace, creates disquiet in the com-
munity, or inflicts on the individual a wrong entitling him
to governmental protection."
The testimony discloses that when the plaintiff pointed
the revolver at Rothchilds he put him in fear. The remark
made by the decea.sed shows that he feared injury, therefore
the assault, even without the firing of the pistol, was com-
plete. And so it may be said with absolute certainty
*•• that at the time the fatal shot was fired, although it was
Am. at. Rep., Vol. 115— 3H
594 American State Reports, Vol. 115. [Nebraska.
done unintentionally, the plaintiff was in the commission of an
unlawful act,
2. It is further contended that the court erred in refus-
ing to give the jury the following instruction requested by
the plaintiff.
* ' You are instructed by the court, that, if you are not con-
vinced beyond a reasonable doubt by the evidence that the
defendant discharged the pistol intentionally, and knew or
had reason to believe it was then loaded, but, on the con-
trary, the evidence undisputed tends to the belief that it was
accidental, and not done with any intent or desire to injure
Rothchilds, you should acquit the defendant."
This instruction is so faulty that the court was justified in
refusing to give it. As we have seen, the evidence was
amply sufficient to convict the plaintiff of the crime of man-
slaughter, and the mere fact that the shooting was accidental,
and not done with intent or desire to injure the deceased,
did not entitle the plaintiff to an acquittal. At the time the
fatal shot was fired, although the plaintiff had no intention
or desire to injure the deceased, and although the shot was
accidental, yet he was in the commission of an unlawful act,
and the result of the shooting, together with this fact, clearly
rendered him guilty of the crime of manslaughter. We
hold, therefore, that the court did not err in refusing to give
this instruction.
3. It is also contended that the plaintiff was entitled to
have his theory of the case submitted to the jury. It is a
sufficient answer to this contention to say that, by the plain-
tiff's own theory, coupled with the undisputed facts, he was
guilty of the crime of manslaughter, and, the jury having
found him not guilty of a greater offense, the failure of the
court to give any other or more specific instruction relating
to his theory in no manner prejudiced his rights.
4. Lastly, it is contended that the court erred in refusing
to consider plaintiff's supplemental motion for a new trial,
filed on the ninth day of February, 1904. The particular
**** grounds of this motion are alleged to be newly discovered
evidence material for the defendant, which could not, with
reasonable diligence, have been discovered and produced at
the trial, or within three days after the verdict was rendered ;
and such alleged newly discovered evidence is presented with
the motion in the form of an affidavit. This affidavit is
March, 1904.] Ford v. State. 595
made by one Arthur N. Compton, one of the surgeons who
attended the deceased from the day he was shot to the time
of his death. The substance of the affidavit is that the doc-
tor, during a professional visit to the deceased, asked him
how the shooting occurred, and what caused it, and that the
deceased answered as follows: "Ford did not intend to
shoot me, it was an accident," or words to that effect. Even
if this evidence were true, and should be so accepted by the
jury, still the plaintiff, under the circumstances, would be
guilty of the crime of manslaughter. Again, the evidence
was merely cumulative, and its effect would only strengthen
the other evidence given on the trial, and which tended to
show that the shooting was accidental. Indeed, the jury
must have found that the shooting was unintentional, other-
wise it would have found the defendant guilty of either mur-
der in the first or second degree. Again, the affidavit and
motion have not been preserved and brought here in the
form of a bill of exceptions, and therefore we must refuse to
consider it. For these reasons, we cannot say that the trial
court erred in refusing to consider the supplemental motion
and grant a new trial thereon.
A careful examination of the evidence convinces us that
the jury arrived at a correct verdict. It is apparent that
the plaintiff was not actuated by any motive of hatred or re-
venge in his actions toward the deceased. It rather appears
that he was having a good time just before the shooting oc-
curred; that he had danced a couple of times with the wo-
men; that he had given an exhibition of what is called the
"Buck and Wing" dance, and in fact was cutting quite a
wide swath, to use a common expression ; that while show-
ing off, so to speak, he drew the pistol, which he had
*'* some reason to suppose was not loaded, and with his finger
on the trigger pointed it at Rothchilds; deceased was fright-
ened, and told him to look out how he handled the pistol
around there, that he had his finger on the trigger, and the
plaintiff replied that he knew it, and he wanted to show him
how it worked ; that he pulled the trigger with the pistol
pointed directly at tlie face of his victim, and the shot which
followed was as much a surprise to the plaintiff as to anyone.
In this view of the case he was technically guilty of the crime
of manslaughter, and while he ought to receive a reasonable
amount of punishment for his criminal carelessness, and his
uncalled for and unlawful act, yet it is our opinion that the
696 American State Reports, Vol, 115. [Nebraska,
sentence imposed by the trial court is too severe. The fact
that plaintiff has been convicted of a crime does not au-
thorize the courts to deprive him of those rights which the
law still recognizes, nor treat him as having no rights. Our
constitution provides: "Excessive bail shall not be required;
nor excessive fines imposed; nor cruel and unusual punish-
ments inflicted." We think that a sentence of seven years
in the penitentiary, under all the circumstances, may fairly
be said to be a cruel punishment, and under the power given
us by section 509a of the Code of Criminal Procedure we will
reduce the sentence three years. The judgment of the trial
court is reduced to imprisonment for four years, and, as thus
modified, is affirmed.
Judgment accordingly.
Holcomb, C. J., concurs.
Sedgwick, J., absent and not sitting.
Where One Points a Gun or Pistol at another in a reckless or neg-
ligent manner or in sport or play, without any intention to take life
or do bodily harm, and it is accidentally or unintentionally dis-
charged, killing him, the offense is manslaughter: See the note to
Johnson v. State, 90 Am. St. Eep. 581.
DICKSON V. STEWART.
[71 Neb. 424, 98 N. W. 1085.]
CONTRACTS. — Want of Mutuality is No Detense, even in an
action for specific performance of a contract, when the party not
bound thereby has performed all of the conditions of the contract
and brought himself clearly within its terms, (p. 600.)
STATUTE OF FRAUDS — Trusts. — One who, under an agree-
ment, purchases land at a foreclosure sale for the benefit of the
owner of the equity of redemption and at an inadequate price, can-
not set up the statute of frauds against the person for whom he
purchased, as the law will hold him to be a trustee ex maleficio. (p.
601.)
FRAUD — Statute of Frauds. — A court of equity will never
permit a person to shield himself behind the statute of frauds in
order to perpetrate a fraud, (p. 602.)
MORTGAGES — Foreclosure — Redemption — Limitation. — The
right to foreclose a mortgage, and the right to redeem therefrom, are
reciprocal, and an action may be brought to redeem at any time
before the statutory bar is complete, (p. 603.)
March, 1904.] Dickson v. Stewabt. 597
DEED AS MORTGAGE — Evidence to Show. — If a person ac-
quires the legal title by purchase at a sheriff's sale of land under exe-
cution, in pursuance of_a parol agreement with the judgment debtor
to hold the title thus obtained as a security for a loan of money
paid to relieve the land from the judgment lien, and that he will
reconvey when the money is refunded, the case is not distinguishable
from any other where the deed, though absolute in terms, is designed
simply as security for a loan, and parol evidence is admissible to
show the nature of the transaction, (p. 603.)
INTEREST — Application of. — Interest on a judgment or debt
due is computed up to the time of the first payment, and the payment
so made is first applied to discharge the interest, and afterward, if
there be a surplus, it is applied to sink the principal, and so toties
quoties, taking care that the principal thus reduced shall not at any
time be suffered to accumulate by the accruing interest, (pp. 604,
605.)
J. L. Epperson & Sons, for the plaintiffs in error.
G. H. Hastings and L. B. Stiner, for the defendant in error.
425 FAWCETT, C. On the twenty-ninth day of March,
1893, defendant in error, hereinafter styled plaintiff, was the
owner and in possession of a farm of one hundred and sixty
acres of land in Clay county. A mortgage which he had
given some years prior thereto had been foreclosed, and. on
the day named, the farm was about to be sold by the sheriff
under the decree of foreclosure in that case. Plaintiff al-
leges that, just before the opening of the sale, he called upon
plaintiff' in error, hereinafter styled defendant, and entered
into an agreement with defendant, whereby it was agreed
and understood between them that defendant should bid in
the land for plaintiff, pay for the same and take the title
thereto in his own ^^* name as security for the money so
paid, and convey the same to plaintiff at any time that plain-
tiff should demand such conveyance, upon payment to him
by plaintiff of any balance that might then be due and un-
paid. That defendant, in accordance with this agreement,
bid in the land for nineteen hundred and sixty dollars.
That it was further agreed that defendant should place a
mortgage on the land for sixteen hundred dollars, and a
second mortgage for one hundred and twenty dollars. That,
as additional security for his advances, defendant was to
have the rents, issues and profits of the premises until he
should be fully reimbursed; that when so reimbursed de-
fendant and his wife were to make the plaintiff' a good
and sufficient deed to said premises, free and clear of
all encumbrances excepting the two mortgages above de-
598 American State Reports, Vol. 115. [Nebraska,
scribed. That it was further agreed that the rents and prof-
its arising from the premises should be applied: First, to
the payment of taxes; second, to the payment of interest on
said two mortgages ; and, third, to the payment of the moneys
advanced by defendant. That defendant has taken all of
the rents and used the same, and refuses to render any ac-
count thereof, and refuses to convey said land to plaintiff,
notwithstanding the fact that plaintiff stands ready and
willing to make an accounting with defendant, and to pay
any sum that may be due defendant. That plaintiff has
many times during the past two years demanded a deed and
accounting, which have been wholly refused. Wherefore,
he prays that an accounting may be had ; that defendant may
be decreed to hold the title to said premises as trustee for
plaintiff; that defendants be decreed to convey said premises
to plaintiff in accordance with the terms of the agreement;
that on failure to so convey, the decree stand as such con-
veyance; and for such other, further and additional relief as
in equity and good conscience plaintiff ought to have. For
answer defendants demur generally to the fourth paragraph
of plaintiff's petition; deny all of the other allegations
therein, and then allege that the defendants, nor either of
them, nor any person authorized by them, or either of them,
ever made or signed any memorandum ^^'' or note thereof,
or any contract in writing for the sale of said land, or in
any manner relating thereto, or for the transfer, granting,
assignment or surrender of any interest therein to the plain-
tiff or to any other person; that neither of the defendants
nor any person authorized by them, or either of them, ever
made oj* signed any note or memorandum in writing agree-
ing to make a conveyance or transfer of said land, or any
interest therein to the plaintiff or any other person, and said
alleged agreement was not, by its terms, to be performed
within one j^ear from the making thereof. Wherefore, they
pray that plaintiff's petition be dismissed. Plaintiff's reply
was a general denial.
The court below found generally for plaintiff, that the
title to the land in question Was taken by defendant as se-
curity for money advanced by him, with the express under-
standing that the same was to be reconveyed to plaintiff on
the payment of the amount due, and that there is still ^due
defendant from plaintiff three hundred and ninety-nine dol-
lars and seventeen cents, which is a lien on the premises in
March, 1904.] Dickson v. Stewart. 599
controversy; and, after stating the amount by items, the
court adjudged that defendant have a lien upon the premises
in controversy for the said sum of three hundred and ninety-
nine dollars and seventeen cents ; that plaintiff pay said sum
into court for the use of defendant, and that the defendants
make to the plaintiff a good and sufficient deed to the prem-
ises within thirty days from the date of the decree, and, in
the event of their failure so to do, that the decree should in
all things operate, and be taken and construed as such deed
of conveyance, and that plaintiff pay the costs of the action.
Counsel on both sides devote a great deal of space in their
briefs to the discussion of express, constructive and result-
ing trusts — a very interesting field of discussion, and one in
which the writer would gladly accompany them if time
would permit; but, as the only question to be determined in
this case is the correctness of the holding of the district
court that the deed in question was a mortgage, we feel con-
strained to confine this opinion to a discussion of that ques-
tion alone.
•*** There is no conflict in the evidence as to the making
of the contract. Plaintiff testifies that on the day the sheriff
was going to sell the property, and just prior to the opening
of the sale, he called upon the defendant and said: "Now,
Frank, I did a favor for you once and I want you to help me
now. I want you to buy this place for me, and when I get
the money I will redeem it. So Dickson bought the property.
.... Dickson was to buy the place for me, and when I got
the money I was to give it to him; then he was to deed it
back to me." The defendant himself testifies: "Well, at
the time that this land was for sale, Mr. Stewart came to my
office, and he told me that he wanted to buy this land at the
sheriff's sale, but that he didn't have any money, or not
enough money, to buy it ; and that the sheriff said he would
not take him, and that he advised him to come and get me to
buy the land for him, and then Stewart said to me that he
wanted me to go up and buy the land for him, as Davis, the
sheriff, would take me, and that he, Stewart, wanted some
one to buy the land that he could depend on." The court
asked defendant the following questions:
' ' Q. Now, was it your understanding, at the time that you
* bought this farm, that you were to buy it and hold it until
Mr. Stewart could redeem it and pav you back the amount
that you had paid out? Was that your understanding and
600 American State Reports, Vol. 115. [Nebraska,
intention? A. Yes, sir, I was to buy it, to buy land for
him.
"Q. And hold it until he paid you back? A. Yes,
sir.
"(By General Hastin<rs.)
* ' Q. You were to hold the land until it was redeemed, for
your security? A. Well, I think so, but I didn't think that
it would run ten years."
In the light of this testimony we do not see how the
trial court could have done otherwise than to find that the
deed from the sheriff to the defendant, although absolute in
its terms, w^as in fact a mortgage from the plaintiff ^^® to
the defendant as security for the money advanced by de-
fendant.
Defendant contends that the rule so frequently announced
by this and other courts that a deed, though absolute upon its
face, if intended as security, will be held to be a mortgage,
does not apply in a case where the maker of the deed is a
third party. In other words, 'that to have entitled plaintiff
to rely upon this rule, he must himself have been the grantor
in the deed, when, as a matter of fact, the grantor was the
sheriff. We do not think the contention is sound. While
the sheriff is the nominal grantor in the deed, yet, the in-
terest which he conveyed thereby was the interest of the
plaintiff. The plaintiff at that time was the owner of the
fee and in possession of the premises, and the deed by the
sheriff conveyed that ownership and right of possession to
the defendant, so that, in effect, it was a deed from the plain-
tiff to defendant. It is further contended by defendant that
the contract w^as void because the relation of creditor and
debtor was not created by the contract; that, if plaintiff
failed to repay the money to defendant, defendant would
have had no action against him for the recovery of the
money. In other words, that the contract was void for want
of mutuality. We are unable to agree with this contention,
for two reasons: First, the relation of debtor and creditor
was created. Under the same evidence which we have quoted
from the record, defendant could at any time, after a rea-
sonable time had elapsed, have demanded payment from the
plaintiff, and, in the event of plaintiff's failure to pay,
could have proceeded to foreclose his deed as a mortgage,
with all the rights of any ordinary mortgagee. Second, this
court has held in Bigler v. Baker, 40 Neb. 325, 58 N. W.
March, 1904.] Dickson v. Stewart. 601
1026, 24 L. R. A. 255, that "want of mutuality is no de-
fense, even in an action for specific performance, where the
party not bound thereby has performed all of the conditions
of the contract, and brought himself clearly within its
terms." In this case plaintiff had complied with his part of
the contract. After entering into this agreement with de-
fendant, he made no effort ^^® to obtain the money else-
where to redeem the property from defendant's bid, but al-
lowed the sale to defendant for nineteen hundred
and sixty dollars, of property which the undisputed evidence
shows to have been worth from three thousand two hundred
dollars to three -thousand five hundred dollars, to be con-
firmed, and a deed to be issued to defendant thereunder, and
immediately delivered possession of the premises to defend-
ant, relying upon the fact, as stated by defendant in his
testimony, that defendant was a man "that he could depend
on." Plaintiff had "performed all of the conditions im-
posed upon him, and brought himself clearly within the terms
of the agreement." Hence, under the decision of this court
in Bigler v. Baker, 40 Neb. 328, 58 N. W. 1026, 24 L. R. A.
255, if a want of mutuality had existed in this case, it would
not be a valid objection to plaintiff's right to recover. While
we concede that there is some conflict in the authorities upon
this point, that conflict was considered by this court in
Bigler v. Baker, and the rule above announced adopted as
the true rule.
The next contention of defendant is that section 3, chap-
ter 32 of the Compiled Statutes (Annotated Statutes, 5952),
is a complete barrier to plaintiff's right to recover. De-
fendant must also fail in this contention. If defendant
did in fact bid in the land for plaintiff under the agree-
ment set out, he held in trust for him, and had no other in-
terest in it than that of a mortgagee to secure the repay-
ment of the purcha.se money and other advances made by
him. But if he had no intention of keeping his part of the
agreement, and did not in fact intend to hold the property
in trust for plaintiff, he was guilty of a fraud which the
court will relieve against. The court has power to relieve
against such fraud, and the means to be employed is to con-
vert the person who has gained an advantage by means of
his fraudulent act into a trustee for those who have been
injured thereby: Ryan v. Do.\. ;U N. V. 307, 90 Am, Dec.
696. Defendant relies upon section 3, chapter 32, Compiled
602 American State Reports, Vol. 115. [Nebraska,
Statutes, but he overlooks section 6 of the same chapter
(Annotated Statutes, 5955), which reads as follows: "Noth-
ing in this chapter contained shall be construed "*** to
abridge the powers of the court of chancery to compel the
specific performance of agreements in cases of part per-
formance." And he also overlooks another very important
proposition: That a court of equity will never permit a
party to shield himself behind a statute of frauds in order
to perpetrate a fraud. In the case of Sanford v. Norris,
4 Abb. App. (N. Y.) 144, the court say: "The circumstances
attending his purchase are not obscured in the least by any
doubts, either as regards the facts or their moral bearing;
nor is any excuse or apology offered for his violated faith;
and the simple question presented to this court is, whether
the fruits of his perfidy are secured to him by a law having
for its object the prevention of frauds. It stands indis-
putably proved that the defendant obtained this title on the
pretense that he was purchasing for Mrs. Sandford, as a
friendly act to her, and under agreement with her that he
would take and hold the title for her benefit. Having thus
obtained the title himself, he claims and insists that he is
under no legal obligation to carry out the arrangement, be-
cause it is not evidenced by a writing, and that he may vio-
late the trust and confidence reposed in him with impunity.
But the law will not give its aid in support of a wrong and
fraud so flagrant. If the question could ever have been
considered open for discussion, it must now be deemed set-
tled by the recent decision of this court in Ryan v. Dox,
34 N. Y. 307, 90 Am. Dec. 696, wherein the equitable prin-
ciple is recognized as the established law of this state, that
'equity will at all times lend its aid to defeat a fraud, not-
withstanding the statute of frauds. ' ' '
The case of Ryan v. Dox, 34 N. Y. 307, 90 Am. Dec. 696,
considers this proposition at great length and quotes from
a large number of cases, both in this country and England,
all to the effect that a court of equity will never permit the
statute of frauds to be used as a shield for the perpetration
of a fraud.
Another contention of defendant is that, if plaintiff had
a right of redemption, it should have been exercised within
■^^^ a reasonable time; that so long a time has elapsed since
the making of the agreement that plaintiff ought not now
to be permitted to exercise the right of redemption. That
March, 1904.] Dickson v. Stewart. 603
matter has also been settled adversely to defendant by this
court in Morrow v. Jones, 41 Neb. 867, 60 N. W. 369, in
which it is held that the right to foreclose and the right to
redeem are reciprocal, and that an action to redeem may be
brought at any time before the statutory bar of ten years
is complete: Citing Seawright v. Parmer (Ala.), 7 South.
201; Green v. Capps, 142 111. 286, 31 N. E. 597; Kogers
V. Benton, 39 Minn. 39, 12 Am. St. Rep. 613, 38 N. W. 765,
and cases there cited. It follows, therefore, that plaintiff
was not precluded from maintaining this action by lapse of
time.
Defendant relies with great confidence on Walter v.
Klock, 55 111. 362, but even if the supreme court of Illinois
had not subsequently passed upon the same matters in-
volved in that case, it would easily be distinguishable from
the case at bar. As a matter of fact, the supreme court of
Illinois, in Reigard v. McNeil, 38 111. 400, has held: "It
has been held repeatedly that deeds, in form absolute, may
be shown to be mortgages in fact. Courts are not estopped
from looking into the facts and circumstances of such a
deed, to ascertain whether it was not intended as a mere se-
curity for the loan of money. And parol evidence is admis-
sible to show the transaction to be of that character. And
where a party acquires the legal title by purchase at a sheriff's
sale of land under execution, in pursuance of a parol agree-
ment with a judgment debtor that he is to hold the title
thus obtained as a security for a loan of the money paid to
relieve the land from the judgment lien, and that he will
reconvey when the money is refunded, the case is not dis-
tinguishable from any other where the deed, though abso-
lute in terms, was designed simply as security for a loan."
And in Walter v. Klock, 55 111. 362, that court say that
the case they were then considering had no application to
the facts in the case of Reigard v. McNeil, 38 111. 400. And,
later, in Klock v. Walter, 70 111. 416, the court say: '^^^ ««At
the September term, 1870, this case was before this court,
and is reported in 55 111. 362 The evidence estab-
lishes beyond doubt that the whole transaction was for the
benefit of complainant, and that she was to refund the money,
with interest. It operated as a loan to her, and, under the
terms of the arrangement, the purchase at the sale, by Mc-
Cullom, operated as a mortgage. He was simply to hold
the land until complainant could sell it, and pay the money,
604 American State Reports, Vol. 115, [Nebraska,
with interesit. By the arrangement he took the legal title,
but in equity a trust resulted to her": Citing Reigard v.
McNeil, 38 111. 400, and Smith v. Doyle, 46 III. 451, each
being a case where a sheriff's deed was held on parol proof
to be a mortgage. It will thus appear that the supreme court
of Illinois, instead of favoring defendant's contention, is
clearly in line with our holding in this case.
Defendant assigns five errors in the court's computation,
all of which we have carefully considered. The court
charged defendant with thirty dollars for rent of pasture for
the year 1894. This was error, as no rent was paid for the
pasture that year. Defendant is charged with one hundred
and forty-six dollars and seventy-one cents and interest, for
sand in 1897. This is not quite correct. The total amount
is one hundred and forty-six dollars and thirty cents, and
interest should only be charged on one hundred and forty
dollars and twenty cents from December 12, 1902. The court
charged defendant with four hundred bushels of corn in
1893, eighty dollars. The amount was only three hundred
bushels, sixty dollars, an error of twenty dollars. The court
charged defendant with corn rental in 1896, thirty dollars.
The evidence shows, and the parties agree, that there was
a total failure of the crop for 1896, so that no rent was re-
ceived for that year. We observe also that the court charged
dclendant with only ninety dollars for six hundred bushels
of corn in 1895, instead of one hundred and twenty dollars,
an error of thirty dollars the other way. The decree should
be amended so as to correct these errors. Defendant also
claims that the court erred in charging defendant with five
hundred bushels of corn for 1902, claiming that fi.ve hundred
bushels was the total crop and not the rent portion there-
of; but by reference to question 12, record, page 97, it will
be found that the five hundred bushels of corn referred to
was **'*^ the rent portion of the crop; hence the finding of
the court on that point is correct.
The court followed an erroneous rule in computing inter-
est on the debits and credits. The rule is well established
that "interest on a judgment or debt due is computed up
to the time of the first payment, and the payment so made is
first applied to discharge the interest, and afterward, if there
be a surplus, such surplus is applied to sink the principal,
and so toties quoties — taking care that the principal thus
reduced shall not at any time be suffered to accumulate by
April, 1904.] Moores v. State. 605
the accruing interest": Mills v. Saunders, 4 Neb. 190; Davis
V. Neligh, 7 Neb. 78. This method the court did not adopt.
The decree fails to do complete justice to the defendant
in another particular, namely: Before plaintiff would be en-
titled to a deed from defendant for the lands in controversy,
he should not only pay the amount found due under the
accounting of the court, as corrected by this opinion, but he
should also relieve defendant from his liability on the six-
teen hundred dollar note and mortgage.
The case should be reversed and remanded to the district
court, with directions to make another computation in har-
mony herewith, and to modify the decree so as to require
plaintiff to pay the corrected amount and relieve defend-
ant of his liability on the sixteen hundred dollar note and
mortgage, within a reasonable time to be fixed by the court;
and that, upon such being done, defendant be required to
reconvey ; and we so reconunend.
Albert and Glanville, CC, concur.
By the COURT. For the reasons stated in tlie foregoing
opinion, the decree of the district court is reversed and the
cause remanded, with directions to that court to correct its
computation and modify its decree to conform to the views
expressed in said opinion.
Judgment accordingly.
One Who Verbally Agrees with the owner of land, prior to a judi-
cial sale thereof, to purchase the property and hold it for his benefit,
to be redeemed on equitable terms, will oftentimes be decreed to
hold the property in trust for the execution drfendant, and the plea
of the statute of frauds will be unavailing: See the note to McCoy
y. McCoy, 102 Am. St. Eep. 236.
MOORES v. STATE.
[71 Xeh. .'522, 99 X. W. 249.]
MANDAMUS — Discretion of Court. — An application for a writ
of mandamus is addrcsstd to the sound judicial ^scretion of the
court, and the circumstances of each case must be considered in
determining whether the writ shall issue. After it has issued, how-
ever, it is only in a clear case of abuse of discretion that the granting
of the writ will be reversed on apj)eal. (p. (510.)
MANDAMUS Against Oflacers to Suppress Gambling. — If pr )s-
ecutions liavo failed to dose a gambling iimist' run in open violation
of law, the existence of the remedy by comjilaint and arrest of the
606 American State Reports, Vol. 115. [Nebraska,
oflfendcrs does not prevent the issue of a writ of mandamus to compel
the mayor and chief of police to perform their duty, and exercise
their summary powers to prevent such violation of the laws. (p.
610.)
MANDAMUS — Motives of Relator. — The fact that one of the
relators, suing out a writ of mamlamus to compel the closing of a
gambling-house openly run in violation of law, admits that his motive
in seeking to close such house is the belief that a certain person who
is actively assisting in its operation is interested in its profits, is not »
ground for reversing the judgment granting the issuance of the writ. B'
(p. 612.) ■
MANDAMUS to Close Poolroom. — The keeping of a poolroom
in open violation of law is such act as may be prevented by a writ of
mandamus directed against municipal officers whose duty it is to
close such room. (p. 613.)
W. J. Connell, for the plaintiffs in error.
L. I. Abbott and I. J. Dunn, for the defendant in error.
^^^ HASTINGS, C. This is an error case brought to re-
verse the granting of a peremptory writ of mandamus by the
Douglas county district court. The action was brought by
I. J. Dunn and L. I. Abbott not only against Frank E. INloores,
mayor, and John J. Donahue, chief of police in the city of
Omaha, who are plaintiffs in error, but also against the mem-
bers of the board of fire and police commissioners and P.
J. Mostyn, acting chief of police. A demurrer on behalf of
the board to the petition was sustained. The acting chief
of police, Mostyn, had ceased to exercise such functions be-
fore the hearing and was dismissed. A peremptory writ was
awarded against the chief of police, commanding him to
forthwith arrest, or cause to be arrested, all persons found
violating the laws of the state or the ordinances of the city
relating to gambling, or operating or maintaining ^^^ a gam-
bling-room for the purpose of unlawful gaming at No. 1313
Douglas street, known as "The Diamond Pool Room," and
directing him to at once take action to detect all persons there
engaged in such violation of the laws of the state and of the
city ordinances. A peremptory writ was also awarded against
the mayor, commanding him to cause this to be done by the
chief of police, and to order the chief of police, and, through
him, the officers of the police department to detect and ar-
rest all persons engaged in the violation of the laws of the
state at the place designated. The costs of the action were
taxed against the respondents, Moores and Donahue.
April, 1904.] Moores v. State. 607
The mayor and chief of police filed a motion for a new
trial, on the grounds that the decision was not sustained by
the evidence and was contrary to law ; that the findings that
relator, Abbott, was acting in good faith and that there was
no conspiracy between the relators were contrary to the evi-
dence and not sustained by it ; that the peremptory writ does
not conform to the alternative one; that the writ requires
acts in excess of respondent's duties; that upon the finding
that Dunn was not acting in good faith the action should
have been dismissed; that under the findings of law made by
the court the action should have been dismissed, and that the
judgment for costs was unlawful and unjust. From the over-
ruling of this motion the respondents, Moores and Donahue,
having filed a supersedeas bond, bring error.
The sole action which the mayor and chief of police are
required by the peremptory writ to take is to proceed to
use the powers and resources of the police department of the
city of Omaha to suppress open violations of the statutes of
Nebraska, and of the ordinances of the city of Omaha, in
the matter of gambling and conducting a room for the pur-
pose of unlawful gaming at No. 1313 Douglas street in that
city. The trial court thought that, under the evidence pro-
duced in this case, the mayor and chief of police should be
required to do this. They say not, and they give four rea-
sons why this court should reverse ^^'^ the action of the dis-
trict court and vacate the judgment: 1. That the wrong com-
plained of is not of so grave a character as to warrant in-
terference by mandamus, and to so interfere would be for
the court to assume the administrative functions of the munic-
ipal government; 2. Other adequate and appropriate reme-
dies exist; 3. It is not the duty of the mayor or chief of po-
lice to do the things required; 4. The action was not instituted
or prosecuted by the relators in good faith."
The facts seem to be, that at No. 1313 Douglas street, in
the city of Omaha, in the back part of a room, whose ivont
is occupied by what is known as the "Diamond Saloon," un-
der license for the sale of intoxicating liquors, and is used
for that purpose, is openly and publicly carried on what ii
called a "poolroom." The dates of races in different parts
of the country and the names of horses entered are i)osted
upon a blackboard and, opposite the name of the horse, is
posted the odds against his winning in that particular race;
608 American State Reports, Vol. 115. [Nebraska.
any customer who desires to bet upon any horse pays in his
money and receives a ticket entitling him, in the event of that
horse's winning, to the odds posted opposite the horse's name
on the board.
The trial court found that the business of selling pools on
horseraces had been carried on there since some time in
January, 1903, up to the trial of the action, which was fin-
ished November 30, 1903. The selling and buying of pools
on horseracing was found to be betting on the same; the
fixtures used in this poolroom, a blackboard and a telegraph
instrument, chairs, counters, drawers, books, pencils, tickets,
pen, ink and sheets on which memoranda are kept of tickets
and pools sold, were found not to be gambling devices with-
in the meaning of the statute. Both the mayor and chief of
police were found to have had notice before the bringing of
this action that such poolroom was conducted at the place
designated, but not actual knowledge of the fact.
The court found, as matters of law, that selling pools
upon horseracing is gambling within the meaning of the
'^^^ Nebraska statute ; that the keeping and maintaining of a
room, where the public is invited to come for such purpose,
constitute the offense of keeping a room for gambling pur-
poses within the statutes of Nebraska. It found that it is
the duty of the mayor of the city of Omaha to see that the
criminal laws of the state and the city ordinances are en-
forced ; that it is his duty, through the chief of police and the
police force of the city, to ascertain, where he has reason to
suppose such to be the facts, whether or not the laws are
being violated, and, if such is the case, he should see that a
proper information is filed, and that the persons violating
the laws are arrested by the police and prosecuted; and that,
in case the chief of police or the police force neglect such
duty, it is the mayor's province to order them to do it; that
it is the duty of the chief of police of his own volition, if
he has cause to believe that the criminal laws are being vio-
lated, to make an investigation, and arrest persons found
breaking the law, and hold them until a complaint is filed and
a warrant issued, and to use all lawful means to bring such
parties to trial; that, when a complaint is filed, and a war-
rant issued, it is his duty to arrest the person charged in the
complaint, and investigate and ascertain, as far as he can,
whether the offense has been committed j after so doing, he
April, 1904.] Moores v. State. 609
should submit his proofs to the officer having charge of the
prosecution.
Upon these findings the peremptory writ of mandamus
against the mayor and chief of police was allowed, and
the costs of the action adjudged against them; and, to
obtain a reversal of such order, they now urge, as above
stated, that there is nothing to warrant the court's interfer-
ing with the administrative functions of the municipal gov-
ernment; that other and better remedies exist; that the
mayor and chief of police are under no duty to perform the
acts required, and that relators are not acting in good faith.
A moving picture was drawn at the argument of the con-
dition of matters in the city of Omaha, if this court were to
interfere by mandamus to control the action of the city's
police officers in reference to every trifling offense '^^'^ against
state laws or city ordinances which may take place there.
It seems sufficient to say that the upholding of the manda-
mus issued by the district court in this case does not commit
this court to such a position. This objection merely raises
an appeal to the sound discretion of the trial court, and not
a bar to the action. No claim is made, or can be made, that
these officers have a discretion which the courts may not
interfere with, as to whether or not they shall discharge their
duties under the law. It is quite true, as stated in People
V. Listman, 40 Misc. Rep. 372, 82 N. Y. Supp. 263: "The
existence, therefore, of the numerous methods described
above by which the relator can obtain his object without ap-
plication to the supreme court is, in itself, no sufficient an-
swer to such an application. But after all the writ of man-
damus is an extraordinary remedy, and whether it shall or
shall not be granted in a specified case rests largely in the
sound discretion of the court. There is no doubt that there
are circumstances where such a power may be wisely exer-
cised. It might well be that cases might arise where the neg-
lect of the municipal officer is so flagrant, where the wrong
is of so grave a character and where the public interests in-
volved are so important that the court will not hesitate to
resort to this remedy. But it should be used with caution.
Ordinarily, it is far better that the usual course should be
pursued. ' '
The case last cited is reprinted in full in the respondents'
brief. In it the New York supreme court, at a special term
Am. St. Rep., Vol. 115—39
610 American State Reports, Vol. 115. [Nebraska,
in Onondaga county, refused a mandamus against a commis-
sioner of public safety of the city of Syracuse, requiring him
to enforce general laws prohibiting labor on Sunday, and
public dramatic performances on that day. On a complaint
made to the commissioner of the character of the perform-
ances, he caused two officers to attend one of the perform-
ances, which were styled by those conducting them "Sacred
Concerts"; on the report of the two officers, the matter was
presented to the police justice of the city of Syracuse, who
refused to issue a '^^^ warrant, on the ground that the con-
certs were not a violation of law. The commissioner de-
clined to do anything further. An application was made for
a mandamus to compel him to attend personally, or cause his
officers to attend, the concerts, and to arrest, or cause to be
arrested, without a warrant, the persons holding them, if
they were found to be an ofTense against the laws of the city.
The supreme court in that case adjudges it better that the
performances be proceeded against in the ordinary manner
because, if the police judge refused to issue a warrant, re-
course might be had to any one of the several other magis-
trates, and the police judge, if necessary, removed.
The case of Alger v. Seaver, 138 Mass. 331, is also cited
as refusing a mandamus against a municipal officer. The
court say: "As applications for the writ of mandamus are
addressed to the sound judicial discretion of the court, the
circumstances of each case must be considered in determin-
ing whether the writ shall issue. ' '
The circumstances of this present case have been con-
sidered, and the district court, in its discretion, decided that
as against the mayor and chief of police the writ shall issue.
There certainly does not seem to have been any such abuse
of discretion as to call for a reversal of the cause merely be-
cause of it. If the duty rested upon the officers to do the
things required of them and they were failing in that duty,
and the relators are entitled to insist upon its performance,
unless there is other clear and adequate remedy, the order al-
lowing the writ should be affirmed.
The second objection is, that there is a clear, adequate
and more appropriate remedy existing. To this it seems
sufficient to say that the evidence indicates that a number
of complaints — one witness for respondents says "eight or
ten" — of the violation of law by the conducting of this pool-
room have been filed; that arrests have been made, followed
April, 1904.] Moores v. State. 611
by the prompt release upon bail of the parties charged, and
an immediate resumption of the poolroom's ^^^ business. If
the continuance of that poolroom is an open, public viola-
tion of the law, the citizens of Omaha, who maintain the
police to patrol its streets and prevent such violation, are
entitled to have that force used in promptly suppressing
such an element of disorder, especially after it appears that
ordinary prosecutions do not deter the parties. As Lord
Mansfield said of the writ of mandamus: "It was intro-
duced to prevent disorder from a failure of justice, and de-
fect of police": Rex v. Barker, 3 Burr. (Eng.) 1266, 1268.
The third objection is, that it is not the duty of the mayor
and chief of police to do the acts required. Section 71, chap-
ter 12a of the Compiled Statutes, provides as to the mayor
of cities of metropolitan class: "The mayor shall be the
chief executive officer and conservator of the peace through-
out the city, and shall have power, by and with the concur-
rence of the board of fire and police commissioners, to ap-
point any number of special policemen which he may deem
necessary to preserve the peace of the city, and to dismiss
the same at pleasure." Section 73 makes it his duty to see
that the provisions of the law and the city ordinances are
enforced. Section 171 of the same chapter provides as to
the chief of police: "The chief of police shall be the prin-
cipal ministerial officer of the corporation; he shall, by him-
self or by deputy, execute all writs and process issued by the
police judge; he, or one of his deputies, shall attend on
the sitting of the police court and preserve order therein;
and his jurisdiction and that of his deputies in the service of
process in all criminal cases, and in cases of the violation
of city ordinances shall be coextensive with the county."
Section 172: "He shall be subject to the orders of the mayor
in the suppression of riots and tumultuous disturbances and
breaches of the peace; he may pursue and arrest any person
fleeing from justice in any part of the state." Section 173:
"He shall have, in the discharge of his proper dutias, like
powers and be subject to like responsibilities, as sheriffs in
similar cases." Among the duties of the sheriff as defined
in section '^^ 119, article 1, chapter 18 of the Compiled
Statutes, are: "The sheriff and his deputies are conservators
of the peace, and to keep the same, to prevent crime, to ar-
rest any person liable thereto, or to execute process of law,
may call any person to their aid; and, when necessary, the
612 American State Reports, Vol. 115. [Nebraska,
sheriff may summon the power of the county." And section
283 of the Criminal Code provides: "Every sheriff, deputy
sheriff, constable, marshal, or deputy marshal, watchman, or
police officer shall arrest and detain any person found violat-
ing any law of this state, or any legal ordinance of any city
or incorporated village, until a legal warrant can be ob-
tained."
It seems clear that it is the duty of both the chief of po-
lice and the mayor to interfere for the prevention of the
public violation of the laws, and that seems to be all which
is required of the officers by this mandamus; they are to see
that the police officers under their charge investigate the al-
leged open violation of the law at a given place, and arrest
such parties as are found in the act of violating it, and are
to take measures for their prosecution. If it be granted, as
the trial court found, that an open and public violation of
the law is going on there, it would seem that it is clearly
within the prescribed duties of these officers to take such steps.
The fourth objection raised is, that the action was not in-
stituted or prosecuted by the relators in good faith. This
rests upon the trial court's finding that one of the relators,
I. J. Dunn, was influenced in his action more' by the desire
to "affect" one Thomas Dennison than by a desire to en-
force the laws of this state. It was, however, found that, so
far as the other relator was concerned, the proceedings were
in entire good faith. The soundness of this conclusion is
not disputed. The relator, Dunn, owned to having taken, as
assistant county attorney, various steps toward the prosecu-
tion of Dennison on various actions, and declared that a
large share of his desire to suppress the poolroom was from
his belief that Dennison shared in its profits. This, no doubt,
together with a mass **^* of evidence as to Dunn's action as
assistant county attorney, the relevancy of which is not per-
ceived, was the basis of the finding, which was in the follow-
ing terms: "The court further finds, as a matter of fact,
that the relator, I. J. Dunn, is not acting in good faith in
bringing and prosecuting this action, in this, that he brings
and prosecutes this action primarily for the purpose of af-
fecting one Thomas Dennison, and his desire for enforcing
the law is a secondary consideration." The court, however,
found that the action was not brought nor prosecuted in pur-
suance of any wrongful conspiracy or combination. The
action of the relators seems to have been at the request of a
April, 1904.] Moores v. State. 613
number of prominent and respectable citizens of the city, and
there seems no reason, in the fact that Mr. Dunn was
actuated by a conviction that Dennison had an interest in
the poolroom and a desire to drive him out of that business,
to dismiss the proceedings. It appears from the evidence of
Dennison himself that he has no such interest at the pres-
ent time, and he declares that such action as he has taken in
regard to the poolroom was solely on account of friendship
for its proprietor, Chucovich. There seems no reason to re-
verse the action of the district court because of Mr. Dunn's
appearance as one of the relators.
The real turning point in the case seems to be the ques-
tion, whether or not the keeping of a poolroom, such as the
evidence discloses, is a violation of the law, the prevention
of which the courts will enforce by a writ of mandamus.
The officers seem to have regarded it, in the words of police
commissioner Broatch, as "no more a violation of law than
is the grain bucket-shop." There seems to have been some-
thing like an understanding that the city authorities would
not, of their own volition, interfere with its operation, if
they were conducted without disorderly accompaniments. No
attempt, however, is made at the present hearing to defend
the lawfulness of this business. No complaint is made as to
the correctness of the district judge's findings, that pool-
selling is gambling, and that the maintaining of a place where
the public are invited to **^^ come and buy pools upon races
is the maintaining of a gaming-house, under the laws of this
state.
All laws for the suppression of vice are subject to evasion.
Doubtless gambling is a vice and so distinguishable from
crime. Like all other vices, the most that can be done toward
its suppression is to prevent its open and public indulgence
to the demoralization of society. So long as the laws of the
state of Nebraska make the public maintaining of gambling
places unlawful, so long it would seem to be the right of
citizens, who believe that openly and publicly advertising
them and their business is dangerous and demoralizing to the
community, to insist that public officers, selected for that pur-
pose, should carry into execution the laws dealing with such
places. It seems sufficiently to appear, in the present case,
that ordinary remedies had been tried and found powerless
to answer the purpose of the statute in question, the closing
up of an open and public gaming-house.
614 American State Reports, Vol. 115. [Nebraska.
It is recommended that the judgment of the trial court
be affirmed.
Ames and Oldham, CO., concur.
By the COURT. For the reasons stated in the foregoing
opinion, the judgment of the district court is affirmed.
The Question When Mandamus is a proper remedy against public
officcrs'is considered at length in the note to State v. Garner, 98 Am.
St. £ep. 863.
McCONNELL v. McKILLIP.
[71 Neb. 712, 99 N. W. 505.]
CONSTITUTIONAL LAW— Police Power— Public Nuisances.—
In the exercise of the police power, the legislature has au-
thority to declare property which may be used only for an unlawful
purpose to be a public nuisance and authorize it to be abated sum-
marily, but if property which is innocent in its ordinary and proper
use has been used for an unlawful purpose, it is beyond the power
of the legislature to order its summary forfeiture to the state as a
penalty or punishment for such unlawful use without giving its
owner an opportunity for a hearing, and a statute thus providing is
unconstitutional as depriving such person of his property without
due process of law. (p. 622.)
CONSTITUTIONAL LAW— Game Laws.— A statute authoriz-
ing game wardens to seize and forfeit to the state all guns in actual
use by persons hunting in violation of the game law, without giving
them a hearing, is unconstitutional as depriving such persons of their
property without due process of law. (p. 622.)
E. N. Prout, attorney general, N. Brown, W. B. Rose, antl
C. E. Spear, for the plaintiff in error.
H. C. Vail, for the defendant in error.
712 LETTON, C. On the third day of August, 1902, P.
E. McKillip, D. B. McMahon and W. E. Harvey were en-
gaged in hunting prairie chickens in Boone county, in vio-
lation of the game law of 1901, using three shotguns. The
deputy game warden, Harry L. McConnell, seized the three
shotguns, while they were so engaged in hunting prairie
chickens. P. E. McKillip was the owner of the guns, which
were valued at the sum of seventy-five dollars. McKillip
brought an action of replevin against the defendant, deputy
April, 1904.] McConnell v. McKillip. . 615
game warden, for their possession. The case was tried to the
district court upon an agreed statement of facts substantially
as above stated. The court found for the plaintiffs and ren-
dered judgment accordingly. The defendant ''^^ brings
error to this court. The game warden claims the right to
hold the guns under authority of section 3, article 3, chapter
31 of the Compiled Statutes (Annotated Statutes, 3272),
which is as follows: "All guns, ammunition, dogs, blinds and
decoys, and any and all fishing tackle, in actual use by any
person or persons while hunting or fishing in this state with-
out license or permit, when such license or permit is required
by this act, shall be forfeited to the state; and it is made
the duty of the commissioner and every officer charged with
the enforcement of this act to seize, sell or dispose of the
same in the manner provided for the sale or disposition of
property on execution, and to pay over the proceeds there-
of to the county treasurer for the use of the school fund. ' '
He contends that the statute authorizing game wardens to
seize and forfeit to the state all guns in actual use by per-
sons hunting in violation of the game law is a valid exer-
cise of the police power of the state, while the defendant in
error contends that the aforesaid statutory provision violates
the provisions of the fourteenth amendment to the constitu-
tion of the United States which declares : ' ' Nor shall any state
deprive any person of life, liberty, or property, without due
process of law; nor deny to any person within its juris-
diction the equal protection of the laws," and of section 3,
article 1 of the constitution of the state of Nebraska, which
provides: "No person shall be deprived of life, liberty or
property, without due process of law."
The protection of wild animals suited for the purpose of
food from indiscriminate slaughter by hunters has been the
object of legislation from the most ancient times. The theory
upon which the law-making power assumes to act is, that
all wild game belongs to the state in its sovereign capacity as
a trustee for the whole of the public, and that, consequently,
the state may, as a proper exercise of its police power, adopt
such rules and regulations with reference to its preserva-
tion, and such penalties with reference '^** to a violation of
such regulations, as are necessary to accomplish the end de-
sired— the preservation to the people of the state of the pleas-
ure, sport and profit derived from tlu; hunting, pursuit and
capture of the wild animals living therein.
616 American State Reports, Vol. 115. [Nebraska,
In this case the defendant in error, McKillip, admits that
it is within the power of the state, in the just exercise of
its police powers, to prohibit the killing of fish and game at
certain seasons of the year, but denies that it has the right
to take his property from him and confiscate it to the state
without giving him his day in court. He contends that the
police power in regard to the confiscation of guns, dogs,
blinds, decoys and fishing tackle is upon exactly the same
footing as the police power in regard to the regulation of the
sale of intoxicating liquors, and that since, before liquors
which have been seized are destroyed, there must be a judical
determination by a court as to whether the owner was en-
gaged in unlawfully selling or keeping for sale intoxicating
liquors, so there must be as to his property. He further con-
tends that, since the statute contains no provisions for de-
tennining whether the property was liable to condemnation
for the criminal acts of those who had it in their possession,
and since it merely authorized the game warden to seize
the property without warrant or process, to condemn it with-
out proof, and to sell it as upon execution, it deprives the de-
fendant of the property rights which are guaranteed to him
by the constitution.
The laws of the state of New York declare that any net
or other means or device for taking fish found in the waters
of the state, in violation of the laws for the protection of
fish, is a public nuisance, and authorize game constables to
destroy such nets. Certain nets were seized and destroyed,
and an action being brought against the officers for their
value under these provisions, the court of appeals of the stat»
of New York held that the declaration by the legislature that
the nets or other devices found in the waters of the state
are a public nuisance, is a valid '^^'^ exercise of the legisla-
tive power; and that the further provision requiring the de-
struction of such nets, such destruction being an incident of
the power of abatement of the nuisance, and not a forfeiture
inflicted as a penalty upon the owner, is not in violation of
the constitutional prohibition of taking property without due
process of law; but further held that that part of the act
authorizing the destruction of nets found upon the shore was
unconstitutional, since nets not found in the waters are not
a nuisance per se: Lawton v. Steele, 119 N. Y. 226, 16 Am.
St. Rep. 813, 23 N. E. 878, 7 L. R. A. 134. A writ of error
being sued out to the supreme court of the United Statea
April, 1904.] McConnell v. McKillip. 617
from this judgment, that court affirmed the judgment of the
supreme court of New York, and say, Mr. Justice Brown
delivering the opinion: "The main and only real difficulty
connected with the act in question is in its declaration that
any net, etc., maintained in violation of any law for the pro-
tection of fisheries, is to be treated as a public nuisance, ' and
may be abated and summarily destroyed by any person, and
it shall be the duty of each and every protector aforesaid
and every game constable to seize, remove and forthwith
destroy the same.' The legislature, however, undoubtedly
possessed the power not only to prohibit fishing by nets in
these waters, but to make it a criminal offense, and to take
such measures as were reasonable and necessary to prevent
such offenses in the future. It certainly could not do this
more effectually than by destroying the means of the of-
fense In this case there can be no doubt of the right
of the legislature to authorize judicial proceedings to be
taken for the condemnation of the nets in question, and their
sale or destruction by process of law. Congress has assumed
this power in a large number of cases, by authorizing the
condemnation of property which has been made use of for
the purpose of defrauding the revenue. Examples of this are
vessels illegally registered or owned^ or employed in smug-
gling or other illegal traffic ; distilleries or breweries illegally
carried on or operated, and buildings standing upon or near
the "^^^ boundary line between the United States and another
country, and used as depots for smuggling goods. In all
these cases, however, the forfeiture was decreed by judicial
proceeding. But where the property is of little value, and
its use for the illegal purpose is clear, the legislature may de-
clare it to be a nuisance, and subject to summary abatement.
Instances of this are the power to kill diseased cattle; to
pull down houses in the paths of conflagrations; the destruc-
tion of decayed fruit or fish or unwholesome meats, or in-
fected clothing, obscene books or pictures, or instruments
which can only be used for illegal purposes. AVhile the leg-
islature has no right arbitrarily to declare that to be a nuis-
ance which is clearly not so, a good deal must be left to its
discretion in that regard, and if the object to be accomplished
is conducive to the public interests, it may exercise a large
liberty of choice in the means employed : Newark etc. R. Co.
V. Hunt, 50 N. J. L. 308, 12 Atl. 697; Blazier v. Miller, 10
Hun, 435; Mouse's Case, 12 Rep. (7 Coke) 63; Stone v.
618 American State Reports, Vol. 115. [Nebraska,
Mayor, 25 Wend. 157; American Print "Works v. Lawrence,
21 N. J. L. 248, 23 N. J. L. 590, 57 Am. Dec. 420"; Law-
ton V. Steele, 152 U. S. 133, 14 Sup. Ct. Rep. 490, 38 L. ed.
385.
The state of Wisconsin has an act substantially the same
as that of New York, providing for the protection of fish
and authorizing the destruction of nets, declaring the same
to be public nuisances. In the case of Bittenhaus v. John-
ston, 92 Wis. 558, 66 N. W. 805, 32 L. R. A. 380, the validity
of this provision came before the supreme court of Wis-
consin. The court say it has been repeatedly said, neither
the fourteenth amendment, nor any other amendment to the
constitution of the United States " 'was designed to inter-
fere with the power of a state, sometimes termed its "police
power, ' ' to prescribe regulations to promote the health, peace,
morals, education and good order of the people, and to legis-
late so as to increase the industries of the state, develop its
resources, and add to its wealth and prosperity': Barbier
V. Connolly, 113 U. S. 27, 28 L. ed. 923 ; ]\Iugler v. Kansas,
123 U. S. 623, 8 Sup. Ct. Rep. 273, 31 L. ed. 205; In re
Kemmler, 136 U. S. 436, 10 Sup. Ct. Rep. 430, 34 L. ed. 519."
The court "^^"^ further say: "The plaintiff, having voluntarily
put the nets to an unlawful use which made them public
nuisance under the statute, is in no position to recover dam-
ages from the defendants for having, as public officials,
obeyed the law in abating the nuisance by seizing and de-
stroying the nets. Of course, the plaintiff had his right of
action to determine whether the nets were or were not in
such unlawful use. We must hold that the plaintiff has not
been deprived of his property without due process of law."
No case has been brought to our attention in which a court
has construed a statute which provides for the seizure, for-
feiture to the state and sale of property of the kind involved
in this case, which has been used in violation of the game
laws. As a rule, the statutes have declared nets and like
devices, which can only be used in violation of law, to be
public nuisances, and provided for their abatement by their
destruction by public officers.
The distinction between nets, which under the laws of the
states providing for their destruction can only be used for an
unlawful purpose, and firearms which under the laws of this
and other states may be used for many other purposes, in-
nocent and lawful in their nature, is clearly apparent, and
April, 1904.] IMcConnell v. McKillip. 619
has been recognized by our legislature in the act under con-
sideration.
In section 1, article 3 of this act, the legislature of this state
has provided: "Every net, seine, trap, explosive, poisonous
or stupefying substance or device used or intended for use
in taking or killing game or fish in violation of this act, is
hereby declared to be a public nuisance and may be abated
and summarily destroyed by any person, and it shall be the
duty of every such oflficer authorized to enforce this act to
seize and summarily d&stroy the same, and no prosecution
or suit shall be maintained for such destruction ; provided,
that nothing in this division shall be construed .... as au-
thorizing the seizure or destruction of firearms, except as
hereinafter provided."
'''** The provisions of this section as to nets and like de-
vices are substantially the same as those contained in the
game laws of New York and Wisconsin, heretofore referred
to, and with the conclusions of these courts with reference
to laws of like nature, w^e have no fault to find. But there
is a broad distinction between this section and section 3 un-
der which the plaintiff in error justifies.
The legislature has not declared a gun to be a public
nuisance and has not ordered its destruction as an abate-
ment of the same. The seizure of the property provided for
by this section is evidently intended, not only to put it out
of the power of the offending person to carry on the destruc-
tion of game by depriving him of the implement of destruc-
tion, but also to operate as a penalty or punishment for an
unlawful act committed by him. It is of the nature of a
common-law forfeiture of goods upon conviction of a crime.
In leck V. Anderson, 57 Cal. 251, 40 Am. Rep. 115, it ap-
peared that the plaintiff had rented certain boats and nets
to a Chinese fisherman ; that the property was used in vio-
lation of a statute of the state which provided that all nets,
.seines, fishing tackle, boats and other implements used in
catching or taking fish in violation of the provisions of this
chapter shall be forfeited, or may be seized by a peace officer
of the county or his assistant, and may be by him d&stroyed
or sold at public ai^ction, upon notice posted in the county
for five days. The court held that .so much of the statute as
authorized the property to be sold without judicial proceed-
ings was unconstitutional and void. It will be noticed that
boats were included, which were susceptible of a lawful use.
620 American State Reports, Vol. 115. [Nebraska,
Varden v. Mount, 78 Ky. 86, 39 Am. Rep. 208, was an ac-
tion in conversion to recover the value of certain hof^s. The
town ordinance provided that it was the duty of the town
marshal to take up hogs running at large upon thestreets, to
advertise them for three days, and to offer them at public
sale to the highest bidder, and, after paying the expenses
thereof, to pay over to the rightful owner the balance, if
''^^ any. The court held the right to forfeit "should not
be extended beyond impounding the hogs. When that is
done, the necessity for summary and precipitate action
ceases, and judicial proceedings looking to forfeiture may
then properly begin," and that the ordinance was unconsti-
tutional.
Lowry v. Rainwater, 70 Mo. 152, 35 Am. Rep. 420, was an
action to recover the value of a dining-table. The defendant
pleaded that he was a member of the board of police commis-
sioners of the city of St. Louis, and that under the statute it
was his duty, when he had knowledge that there was a pro-
hibited gaming-table kept or used in the city of St. Louis, to
issue a warrant directing some officer of the police force to
seize and bring before him such gaming-table, and made it
his duty to cause the same to be publicly destroyed by burn-
ing or otherwise. These provisions were held unconstitu-
tional and void.
In Lawton v. Steele, 119 N. Y. 26, 16 Am. St. Rep. 813.
23 N. E. 878, 7 L. R. A. 134, the supreme court of New
York was of the opinion that it was only because the nets
found in the water were a public nuisance that they might
be destroyed, and that if the destruction of the nets was in-
tended as a penalty it was unconstitutional, and also that nets
not actually found in the water could not be seized. "But,"
say the court, "the legislature cannot go further. It can-
not decree the destruction or forfeiture of property used so
as to constitute a nuisance as a punishment of the wrong,
nor even, we think, to prevent a future illegal use of the
property, it not being a nuisance per se, and appoint officers
to execute its mandate. The plain reason is that due pro-
cess of law requires a hearing and trial before punishment,
or before forfeiture of property can be adjudged for the
owner's misconduct. Such legislation would be a plain
usurpation by the legislature of judicial powers, and under
guise of exercising the power of summary abatement of nuis-
ances, the legislature cannot take into its own hands the en-
April, 1904.] McConnell v. McKillip. 621
forcement of the criminal or quasi criminal law: See opin-
ion of Shaw, C. J., in Fisher v. McGirr, 1 Gray, 1, 61 Am.
Dec. 381, and "» in Brown v. Perkins, 12 Gray, 89."
When the same case reached the supreme court of the United
States, while the majority of the court held that the law in
question was a valid exercise of the police power, Chief Jus-
tice Fuller, with whom concurred Mr. Justice Field and Mr.
Justice Brown, filed a dissenting opinion, in which he says:
"The police power rests upon necessity and the right of self-
protection, but private property cannot be arbitrarily in-
vaded under the mere guise of police regulation, nor for-
feited for the alleged violation of law by its owner, nor de-
stroyed by way of penalty inflicted upon him, without op-
portunity to be heard": Lawton v. Steele, 152 U. S. 133,14
Sup. Ct. Rep. 499, 38 L. ed. 385.
In Sentell v. New Orleans etc. R. Co., 166 U. S. 698, 17 Sup.
Ct. Rep. 693, 41 L. ed. 1169, it is said by Justice Brown:
"But in determining what is due process of law we are bound
to consider the nature of the property, the necessity for its sac-
rifice, and the extent to which it has heretofore been regarded
as within the police power. So far as property is inoffensive
or harmless, it can only be condemned or destroyed by legal
proceedings, with due notice to the owner; but so far as it is
dangerous to the safety or health of the community, due pro-
cess of law may authorize its summary destruction."
In Colon V. Lisk, 153 N. Y. 188, 60 Am. St. Rep. 609 , 47 N.
E. 268, a later case than Lawton v. Steele, 119 N. Y. 226, 23
N. E. 878, 7 L. R. A. 134, a statute, providing that every
vessel unlawfully used in interfering with oysters planted in
the waters of the state may be seized by the game protectors,
and upon six days' notice a justice might take evidence and,
if found to be so engaged, the vessel should be ordered sold
and the proceeds paid to the commissioners of fisheries, game
and forestry, was held unconstitutional, the court saying:
"It is to be observed, in passing, that the use for which ves-
sels and fixtures may be forfeited under this act does not
constitute a nuisance, either at common law, or under this or
any other statute. Nor is the property itself a nuisance.
Hence, it is obvious that the validity of this act cannot be
maintained upon the "^^^ ground that either the act or the
property is a public nuisance, and, consequently, that the
legislature had the power to authorize its abatement."
622 American State Reports, Vol. 115. [Nebraska,
In Chicago etc. R. Co. v. State, 47 Neb. 549, 53 Am. St.
Rep. 557, 66 N. W. 624, 41 L. R. A. 481, this court held:
"The legislature cannot, under the guise of a police regula-
tion, arbitrarily invade private property or personal rights,"
but it must appear to the court, when such regulation is
called in question, that there is a "clear and real connection
between the assumed purpose of the law and its actual pro-
visions."
There is a clear and marked distinction between that spe-
cies of property which can only be used for an illegal pur-
pose, and which, therefore, may be declared a nuisance and
summarily abated, and that which is innocent in its ordinary
and proper use, and which only becomes illegal when used
for an unlawful purpose. We know of no principle of law
which justifies the seizure of property, innocent in itself, its
forfeiture and the transfer of the right of property in the
same from one person to another as a punishment for crime,
without the right of a hearing upon the guilt or innocence of
the person charged, before the forfeiture takes effect. If
the property seized by a game-keeper or warden were a pub-
lic nuisance, such as provided for in section 1, he had the
right, under the duties of his office at common law, to abate
the same without judicial process or proceeding, and the
great weight of authority is to the effect that such common-
law rights have not been abrogated or set aside by the pro-
visions of the constitution ; but if the property is of such a
nature that, though innocent in itself and susceptible of a
beneficial use, it has been perverted to an unlawful use, and
is subject to forfeiture to the state as a penalty, no person
has a right to deprive the owner of his property, summarily,
without affording opportunity for a hearing and without due
process of law. The usual course of proceedings in such case
has been either, as in admiralty and revenue proceedings, to
seize the property, libel the same in a court of competent
jurisdiction, and have it condemned '^^^ by that court, or, as
in criminal matters, to arrest the offender and to provide that
upon his conviction the forfeiture of the property to which
the offender's guilt has been imputed, and to which the pen-
alty attaches, should take place. These have been the methods
of procedure for centuries. No other has be^n pointed out
to us in the brief of the plaintiff in error. AV\ are therefore
constrained to the opinion that, in so far as the section under
consideration provides for the seizure, forfeiture and trans-
April, 1904.] McCoxnell v. McKillip, 623
fer of title to property without a hearing upon the guilt or
innocence of its owner, it violates the constitutional pro-
visions. Whether or not a forfeiture can be provided for
as a punishment for crime under our constitution is a ques-
tion not raised or decided in this case.
We recommend that the judgment of the district court be
affirmed.
Duffie and Kirkpatrick, CO., concur.
By the COURT. For the reasons stated in the foregoing
opinion, the judgment of the district court is affirmed.
A Statute Declaring any net or any other means or device for catching
fiah in violation of the law for their protection to be a public nuisance,
and making it the duty of certain public oflScers to destroy such nets
and devices, is constitutional: State v. French, 71 Ohio St. 186, 104
Am. St. Bep. 770, and see the cases cited La the cross-reference note
thereto.
CASES
IN THB
COUfiT OF ERROES AND APPEALS
OF
NEW JERSEY.
LLOYD V. HULICK
[69 N. J. Eq. 784, 63 Atl. 616.]
DEEDS — Reformation of for Fraud. — If a grantor agrees in
writing to convey certain lands free from encumbrances, and the
grantee, after accepting the deed, discovers that there have been
fraudulently inserted therein certain restricting covenants in viola-
tion of the terms of the agreement for the deed, with a provision that
such covenants should be construed as running with the land, and
that upon a violation of either of them the premises should revert
to the grantor or his heirs, the grantee is entitled to have the deed
reformed by expunging such covenants from it, although they might
have been discovered by an examination of the deed before its
acceptance, (p. 625.)
T. P. Fay, for the appellants.
Parker & Van Gelder, for the respondents.
''8* GUMMERE, C. J. The complainants by their bill
seek the reformation of a conveyance of lands made to them
by the defendants Peter Hulick, ''*'* Carrie M. Flock and
J. W. Flock, her husband. The allegations of the bill are
that the defendant Hulick entered into a contract in writing
with the complainants, by the terms of which he agreed to
convey to them, for a consideration of four thousand dollars,
certain lands and premises, which he then owned, in the city
of Long Branch, by a deed warranting the lands to be free
and clear of all encumbrances; that after making this agree-
ment, Hulick conveyed the lands and premises to his
daughter, the defendant Carrie M. Flock, who accepted the
conveyance with full knowledge of the existence of the agree-
ment between her father and the complainants and of its
provisions; that at the time of making the agreement, and in
compliance with one of its terms, the complainants paid to
(624)
March, 1906.] Lloyd v. Hulick. 625
Hulick the sum of two hundred dollars in cash on account of
the purchase money ; that upon the day fixed for the delivery
of the deed they paid to Hulick the further sum of eight hun-
dred dollars in cash, and executed and delivered to him a
purchase money mortgage upon the premises for three thou-
sand dollars; that those payments were made in strict con-
formity to the provisions for the payment of the considera-
tion money set forth in the agreement; that upon receiving
the payment of the eight hundred dollars and the purchase
money mortgage, Hulick, together with his daughter, Mrs.
Flock, and the latter 's husband, executed and delivered to
the complainants a deed of conveyance for the property,
which they accepted, supposing that it conformed in every
particular to the provisions of the prior written agree-
ment ; that an examination of the deed discloses that there is
inserted in it a covenant restricting the complainants from
dividing the land into lots less in size than one hundred
by two hundred feet, or from erecting a house upon said
premises costing less than five thousand dollars; also a cove-
nant restricting the complainants from selling any portion
of the premises to any person of African descent, and in
addition, a provision that each of these covenants is to be
construed as running with the land, and that upon a viola-
tion of either of them by the complainants the premises
shall revert to the grantors or their heirs. The bill then
alleges that these provisions were inserted in the deed by
the defendants for the purpose of evading the performance
of the agreement '^^^ according to its terms and to prevent
the complainants from obtaining the full benefit thereof.
The relief sought is the expunging from the deed of all these
restrictive covenants. A demurrer was interposed by the
defendants upon the ground that the bill did not disclose a
case which entitled the complainants to relief. Upon hearing
an order was entered overruling the demurrer, from that order
this appeal is taken.
The facts recited in the bill present a case which entitles
the complainants to relief. Upon payment of the considera-
tion provided by the agreement they were entitled to have
delivered to them by the defendants a conveyance which
should conform to the terms of that agreement. The inten-
tional in.sertion in the deed by the defendants of the restric-
tive covenants set forth in the bill was in fraud of that right.
Am. St. Rep., Vol. 115 — 40
626 American State Reports, Vol. 115. [New Jersey,
Its delivery by the defendants to the complainants without a
disclosure of the fact that it contained these covenants was
equivalent, it seems to me, to a declaration on their part that
the deed was drawn in conformity to the provisions of the
contract. It is true that the complainants might readily
have discovered, by an examination of the deed before accept-
ing it, that it was not what they had bargained for, and it
may be conceded that prudence upon their part required a
scrutiny of the deed before its acceptance by them. But I am
not able to perceive that their failure to discover the fraud
disentitles them to relief. In the transaction of business,
men ordinarily deal with one another in the belief that each
is honest. If the opposite belief prevailed in such dealings
attempted frauds would rarely be successfully carried into
execution and courts would seldom be called upon to grant
relief against them. Failure to discover an intended fraud
before it has been actually perpetrated must necessarily
exist in every case where the courts are appealed to to relieve
the wronged party from its effects, and the fact that the exer-
cise of a greater degree of prudence on the part of him who
has been defrauded would have prevented the fraud from
being successfully carried through affords no ground fcj* re-
fusing relief.
The effect of the restrictive covenants contained in the deed
is beyond question to reduce materially the value of the
granted ''^'^ premises in the hands of the complainants, and
upon the facts stated in the bill they are entitled to have the
deed reformed by expunging them from it.
The order overruling the demurrer should be affirmed.
When Fraud is Practiced in drawing and executing an instrument
80 that it does not speak the real terms of the contract which the
parties have agreed upon, this may constitute ground for a reforma-
tion of the instrument in equity at the suit of the party who is
deceived and prejudiced in his rights: See the note to Williams v.
Hamilton, 65 Am. St. Rep. 497.
The Failure to Bead a Contract Before Signing it does not affect
its validity, as a rule, if the person signing is able to read and write,
and there is no fraud or misrepresentation: Chicago etc. Ry. Co. v.
Hamler, 215 111. 525, 106 Am. St. Rep. 187. But if false representa-
tions are made of such a character as reasonably to excuse one from
reading a proposed contract, ^nd he is thereby induced to sign it
without knowledge of its contents, he may rescind it by acting sea-
sonably: Standard Mfg. Co. v. Slot, 121 Wis. 14, 105 Am. St. Rep.
1016, and see the cases cited in the cross-reference note thereto.
March. 1906,] Bogart v. Stevens. 627
BOGART V. STEVENS.
[69 N. J. Eq. 800, 63 Atl. 246.]
MORTOAOES — Assignment. — A mortgage delivered to a
third person without consideration, in order that he may procure
money thereon for the mortgagor, is valid in the hands of such third
person's assignee, for the money paid therefor by the latter, although
the former fails to pay over the money to the mortgagor, (pp. 627,
628.)
S. W. Beldon, for the complainant.
W. J. INIiller and H. O. Hance, for the defendants.
so® DIXON, J. The object of the bill in this case is to
foreclose a mortgage dated October 31, 1902, given by ^lary
G. Stevens and Will A. Stevens, her husband, to Jesse Price
and his wife, purporting to convey real estate belonging to
Mrs. Stevens, in order to secure a bond of the same date made
by Mr. and "Sirs. Stevens, conditioned for the payment of
three thousand dollars, to Mr. and ]\Irs. Price, on October
31, 1903. On October 27, 1903, the bond and mortgage were
duly assigned by ^Ir. and Mrs. Price to the complainant.
The defense interposed is that the bond and mortgage were
given for the purpose of raising three thousand dollars in
cash, which was to be paid to Mrs. Stevens, and which she
was then to loan to the president of the Snow-Church Surety
Company on his giving to her ample security for repayment,
and that she had never I'eceived any part of the sum men-
tioned.
*'oi The learned vice-chancellor to whom the cause was
presented in the court below accepted this defense as sub-
stantially proved, but he also found that, in an arrange-
ment made January 15, 1903, Mrs. Stevens had ratified the
mortgage as security for an advance of eight hundred dollars
made to the Snow-Church Surety Company on the strength
of the mortgage, and thus it had become enforceable against
her estate for that sum. Then, applying the doctrine that
the assignee of a mortgage holds it subject to the defenses
that could be made against the assignor, he advised a decree
in favor of the complainant for eight hundred dollars only.
From this decree the complainant appeals. In thus limit-
ing the claim of the complainant the learned vice-chancellor
overlooked, we think, the due effect of two important facts.
t
628 American Stai-e Reports, Vol, 115. [New Jersey,
. As before stated, the nominal mortgagees were Mr. and Mrs.
Price. The defendants, in their answer to the bill, allege
that the bond and mortgage were delivered to Mr. and Mrs.
Price by Mr. Stevens upon the promise that Mr. Price would
obtain the sum mentioned in those instruments and turn it
over to Mr. Stevens in cash, and Mrs. Stevens, while testify-
ing as a witness in the cause, on being asked why the names
of Mr. and Mrs. Price were used, replied that she did not
know as to Mrs. Price, but that Mr. Price was thus included
because he was to obtain the money for her. Hence it is evi-
dent that Mr. Price was authorized by both Mr. and Mrs.
Stevens to assign the bond and mortgage for cash.
On receiving the assignment the complainant paid to Mr.
Price three thousand dollars in cash, and thus the latter car-
ried out the very purpose for which the instruments had
been executed in the form adopted. Consequently, even if
we assume that the mortgage, before assignment to the com-
plainant, was invalid as a security or was valid for eight
hundred dollars only, it became valid on such assignment
for the full amount then paid by him. As was said by this
court in Sweeney v. Williams, 36 N. J, Eq. 627: "Although
the contract, as between the parties, was wholly without con-
sideration, yet, if made for assignment and if assigned for a
consideration, the latter became the consideration of the orig-
inal contract."
^^^ The obligation of Mr. Price, if any existed, to account
to Mr. and Mrs. Stevens for the money received, was a mat-
ter in which the complainant had no concern. They had
clothed Mr. Price with the semblance of absolute ownership
of the mortgage and had given him authority as owner to
assign it for cash, and consequently a payment made to him
by an assignee, who was unaware of the duties of the agent,
had the same force as if the payment had been made to the
principals : Story on Agency, c. 16, sees. 429, 430.
The decree appealed from should be reversed, and a decree
entered in accordance with this opinion.
For Authorities bearing upon the principal case, see Tompkins v.
Triplett, 110 Ky. 824, 96 Am, St. Rep. 472; Harrison Nat. Bank v.
Austin, 65 Neb. 632, 101 Am. St. Eep. 639; Morgan v. Neal, 7 Idaho,
629, 97 Am. St. Eep. 264.
July, 1906.] CoGAN V. Conover JVIfg. Co. 620
COGAN V. CONOVER MANUFACTURING CO^MPANY.
[69 N. J. Eq. 809, 64 Atl, 973.]
ASSIGNMENTS — Accounts not Yet Due. — An absolute as-
signment of an account not yet due does not constitute a mere cov-
enant to pay out of the fund, even if the assignor therein agrees to
act as agent of the assignee in collecting the money, (p. 631.)
ASSIGNMENTS — ^Money not Yet Due. — An equitable assign-
ment of money to be earned operates upon the fund as soon as it is
earned, (p. 632.)
ASSIGNMENTS of Accounts not Yet Due. — If a manufac-
turer assigns as collateral security for his debt the first payment
on a contract for two implements to be made by him, and one of the
implements is substantially completed and delivered to the purchaser
prior to the appointment of a receiver for the manufacturer, and the
price is subsequently paid to such receiver, the assignee is entitled to
such fund so far as necessary to pay the debt secured, (p. 632.)
ASSIGNMENTS — Notice to Debtor. — As between the assignor
ami assignee and those standing in the shoes of the assignor, notice
of the assignment to the debtor or holder of the fund is not neces-
sary, (p. 633.)
CONVEYANCES — Withholding from Record — Fraud. — The
retention of personal property and the withholding of conveyances
from record do not make the transfer void as to general creditors in
the absence of fraud, (p. 634.)
Collins & Corbin, for the appellant.
J. M. Lane, for the respondent.
«^o SWAYZE, J. The Greenville Banking and Trust
Company claims a right to have certain debts due it from
the Conover Manufacturing Company paid in full by the re-
ceiver out of moneys in his hands, upon which it claims a lien
by reason of assignments from the insolvent corporation.
This claim was rejected by the receiver, and his decision was
aflBrmed by the vice-chancellor.
The determination of the case depends upon the construc-
tion of two documents signed by the Conover company,
which read as follows:
"January 5th, 1904.
"In accordance with a resolution pas.sed by the board of
directors at a meeting held this date :
"We hereby assign to the Greenville Banking and Trust
Company as collateral security the sum of thirty-seven hun-
dred and eighty ($3,780) dollars out of an order from the
Public Service Corporation of New Jersey.
630 American State Reports, Vol. 115. [New Jersey,
"We agree to act as agent of said Greenville Banking and
Trust Company in collecting this money, and agree to turn
it over to them immediately on receipt of same in such sums
as it may be received.
"This $3,780 is the balance remaining of our final payment
of $6,300, after deducting $2,520 which has already been as-
signed to said Greenville Banking and Trust Company."
"Jersey City, N. J., April 26th, 1904.
"We hereby assign and transfer to the Greenville Banking
and Trust Company the first payment of eighty-two hundred
and fifty ($8,250) on contract with the Public Service Cor-
poration of New Jersey, amounting to sixteen thousand five
hundred ($16,500), and we authorize the Public Service Cor-
poration of New Jersey to make above payment, when due,
direct to the Greenville Banking and Trust Company."
®** It is not questioned that the execution of these papers
was duly authorized by the board of directors of the Con-
over company.
The questions which arise under the two papers are some-
what different, and I deal with them separately, in the order
of their dates.
Prior to January 5, 1904, the company had contracts with
the Public Service Corporation amounting to $25,200, and
had assigned to the trust company as security $10,000 of the
amount. On January 5, 1904, $18,900 of the total had been
paid by the Public Service Corporation, of which the trust
company had received its due proportion, $7,500. There
was still due or to grow due from the Public Service Cor-
poration $6,300, of which the trust company's proportion was
$2,500. The intent of the paper of January 5th was to
cover the balance of the money to grow due, as clearly ap-
pears from the recital in the last paragraph. There was an
error in assuming that $2,250 was payable to the trust com-
pany under • the earlier assignment. The real amount was
only $2,500, and the actual balance remaining of the final
payment w^as $3,800, instead of $3,780, but the intent is so
clear that we think the paper is to be construed as including
the whole balance.
The first objection made to the claim of the trust company
is that the paper does not amount to an assignment, but is a
mere covenant to pay out of the proceeds of the contract with
the Public Service Corporation. We do not question the dis-
July, 1906.] CoGAN V. Conover Mfg. Co. 631
tinction between the rights acquired under a mere covenant to
pay and under an assignment. In our judgment the paper
now in question amounts to an assignment. There is an "ac-
tual appropriation which confers a present right on the as-
signee, although the circumstances may not admit of its imme-
diate exercise": 2 Lead. Cas. Eq. 1644. The language of the
paper is that of an absolute assignment, and the fact that the
Conover company also agrees to act as agent in collecting the
money does not militate against the plain construction of the
preceding paragraph. The Conover company does not there-
by retain authority over the fund. Whatever it may do is
to be done not in its own right, **^ but as agent, and the
very fact that it agrees to act as agent precludes the construc-
tion that the fund is to remain its own, or subject to its con-
trol except as agent.
The fact that the money was not yet due affords no argu-
ment against our construction. Such is the ordinary case of
an equitable assignment. The very fact that the money is
not due so that the assignment is not effective in a court of
law is sometimes relied on to give jurisdiction to the court
of equity: Bower v. Hadden Blue Stone Co., 30 N. J. Eq.
171, affirmed by this court on the vice-chancellor's opinion;
Lyon V. Bower, 30 N. J. Eq. 340.
It is argued that the only effect of the assignment was to
secure a loan of $3,780, made two days after its date, and that
as that loan was afterward paid, the right of the trust com-
pany to the amount assigned was at an end. We do not so
read the assignment. The language is general and the debt
secured is not specified. The new loan probably was the in-
ducement to the Conover company to make the assignment,
but it was not extraordinary for them to agree with the trust
company that the fund should be held as security generally.
We think they did so agree.
There is in the hands of the receiver $2,100, the proceeds of
this account. The debts from the Conover company to the
trust company which were in existence on January 5, 1904,
exceed that amount. The trust company is entitled to the
fund.
The only authority for the assignment of April 26, 1904, is
a resolution of the board of directors, which authorized a
loan of $5,470 from the trust company and an assignment of
such contract or contracts of the company as might be neces-
sary to further secure the loan. It is now urged by the trust
American State Reports, Vol. 115, [New Jersey,
company that the president of the Conover company had
power by virtue of his office to assign this fund generally as
security for the indebtedness. The evidence does not justify
this conclusion. The parties relied upon the resolution of
the board as the authority tor the assignment, and that
limited the power to securing the loan of $5,470.
®** The resolution authorized an assignment of the contract
and not in terms of the money to be earned, but we agree
with the vice-chancellor that the evident intent of the reso-
lution was to authorize an assignment of the fund, and that
was actually done in terms by the paper of April 26th. This
was an equitable assignment of money to be earned, and
operated upon the fund as soon as it was earned: Bower v.
Hadden Blue Stone Co., 30 N. J. Eq. 171; affirmed, Lyon
V. Bower, 30 N. J. Eq. 340 ; Bank of Harlem v. Bayonne, 48
N. J. Eq. 246, 21 Atl. 478 ; affirmed, Pisborough v. Pisborough,
48 N. J. Eq. 646, 25 Atl. 20 ; Terney v. Wilson, 45 N. J. L.
282.
Whether the fund was earned by the Conover company
was one of the disputed questions, and was decided by the
vice-chancellor adversely to the claim of the trust company.
The solution of the question depends on the facts of the case.
The contract was for two condensers for a price of $16,500,
payable one-half cash on bill of lading or when condensers
were ready to ship, thirty per cent in thirty days thereafter,
and the final payment on erection and test, not later than
ninety days from the'time the condensers were ready for ship-
ment. One condenser was completed and, with the exception
of certain attachments, delivered prior to the appointment of
the receiver. The other was completed by the receiver at a
cost of $3,000. Both were paid for by the Public Service
Corporation.
It is necessary to decide upon the respective rights of the
receiver and the assignee where the work contracted for has
not been completed at the time the receiver is appointed and
where no debt exists to which the assignment can attach un-
til work has been done by the receiver.
In the present case one condenser had already been com-
pleted and delivered to the purchaser, which recognized its
liability by subsequently paying therefor in full. To the ex-
tent of the value of the one condenser the money was earned
by the Conover company. It was at the time of the appoint-
ment of the receiver an account receivable. Even if the con-
July, 1906.] CoGAN V. Conover Mfg. Co. 633
tract was an entire contract for two condensers, the delivery
to and acceptance by the Public Service Corporation made
that corporation liable for the price. The amount paid after-
ward for this condenser, which was the **"* first delivered,
may fairly be regarded as the first payment on the contract,
within the meaning of the assignment of April 26th.
It is now argued that the assignment was not effective be-
cause notice was not given to the Public Service Corporation.
As between the assignor and assignee and those standing in
the shoes of the assignor, notice to the debtor or holder of
the fund is not necessary. The English cases to that effect
are Beavan v. Lord Oxford, 6 De Gex, M. & G. 507, where
Watts V. Porter, 3 El. & B. 743, is disapproved; Pickering v.
Ilfracombe Railway Co., L. R. 3 C. P. 235; Crow v. Reeves,
L. R. 3 C. P. 264; Scott v. Lord Hastings, 4 Kay & J. 633.
Cases in which notice to the debtor or holder of the fund be-
comes important are cases where the question is one of prior-
ity between different assignees, as in Loveridge v. Cooper,
3 Russ. 30, and Dearie v. Hall, 3 Russ. 1, and cases arising
under the English bankruptcy acts, Ryall v. Rowles, 2 Lead.
Cas. Eq. 1533.
The object of notice is discussed by Vice-Chancellor Pitney,
in Board of Education v. Duparquet, 50 N. J. Eq. 234, 24
Atl. 922, and his view was approved by this court in Miller
v. Stockton, 64 N. J. L. (Vroom), 614, 46 Atl. 619, where Jus-
tice Lippincott distinctly said that notice was not an essen-
tial part of the assignment.
The controversy in this case is between the receiver of the
assignor on one side and the assignee on the other. The re-
ceiver represents the creditors, but the creditors as such have
no lien upon the fund. Their position is not as favorable as
that of the judgment creditor and the attaching creditor in
the English cases above cited.
One of the reasons urged for postponing the claim of the
tru.st company to the claim of the general creditors is that
the failure to notify the Public Service Corporation gave the
Conover company a delusive appearance of credit, like the
retention of the possession of personal chattels and the with-
holding from record of a conveyance. There is no proof
that any creditor was actually misled, and it is by no means
certain that a notice to the Public Service Corporation prior
to the time when the debt came ^^^ into existence, on the eve
634 American State Reports, Vol. 115. [New Jersey,
of the appointment of the receiver, would have been effective.
The retention of possession of personal property and the with-
holding of conveyances from record do not necessarily make
the transfer void as to general creditors. That result is
reached only in cases of fraud: Pancoast v. Miller, 29 N. J.
L. 250, 24 Atl. 928 ; Flemington Nat. Bank v. Jones, 50 N. J.
Eq. 244 ; affirmed, Dixon v. Bently, 50 N. J. Eq. 486, 27 Atl.
636.
There is no evidence of fraud in the present case.
It is also argued that the assignments are invalid because
the company was insolvent at the time, but the proofs fail to
disclose a condition of insolvency. The case is much stronger
than Regina Music Box Co. v. Otto, 65 N. J. Eq. 582, 56 Atl.
715, which has since been affirmed by this court.
We think the assignment of April 26, 1904, entitled the
trust company to be paid the amount of the note for $5,470,
dated April 20, 1904, out of the money paid the receiver by
the Public Service Corporation.
The result is that the decree must be reversed and the rec-
ord remitted to the court of chancery for further proceedings
in conformity to this opinion.
The Assignment of Demands Yet to Become Due is considered in
the notes to Field v. Mayor, 57 Am. Dec. 440; Lowery v. Steward, 82
Am. Dec. 349; Harris County v. Campbell, 2 Am. St. Kep. 474.
An order to pay to a person therein named the whole of a particular
fund yet to become due upon the performance of an existing con-
tract operates, not only as between the drawer and payee, but also
as to the drawee, as an equitable assignment of the fund to the
payee: Walton v. Horkan, 112 Ga. 814, 81 Am. St. Eep. 77.
The Question Whether Subsequent Assignees of Accounts and claims
can obtain precedence by first giving notice is considered in the note
to Graham Paper Co. v. Pembroke, 71 Am. St. Rep. 31.
July, 1905.] Moore v. Dubnan. 635
MOORE V. DURNAN.
[69 N. J. Eq. 828, 65 Atl. 463.]
EQUITY JURISDICTION — Lost Checks. — A court of equity
has jurisdiction to entertain a suit for the recovery of the amount
due upon a lost check, not negotiable for lack of indorsement, (p.
635.)
M. P. Devlin, for the appellant.
W, J. Backes, for the respondent.
»28 Per CURIAM. The bill in this case was filed to com-
pel the appellant, Durnan, and the Broad Street National
Bank, of Trenton, to pay to I\Ioore, the respondent, the
amount of a lost check, drawn by Durnan, to his own order,
upon the bank, and delivered by him to the agent of Moore,
without indorsement, as a part of the purchase money for
premises agreed to be purchased by Durnan from Moore, and
which agreement Durnan subsequently refused to perform.
The liability of the bank was rested upon the fact that be-
fore the delivery of the check to the agent of Moore, the
bank had certified it "good when properly indorsed." The
decree under review adjudges that "the said Charles B. Dur-
nan and the said The Broad Street National Bank of Tren-
ton do pay to the said complainant the sum," etc. This ad-
judication carries with it, by necessary inference, the con-
clusion that a certification by a bank that a check, drawn to
the order of the *^ maker, is good when properly indorsed
by him, renders the bank jointly liable, with the drawer, to
an assignee of the check, although the instrument has not
been indorsed by the maker. As Durnan is the only appel-
lant, the correctness of the conclusion of the vice-chancellor
on the question of the liability of the bank is not before us
for our consideration.
We concur in his conclusion that a court of equity has juris-
diction to entertain a suit for the recovery of the amount due
upon a lost check, which is not negotiable for lack of in-
dorsement, and establishing the liability of Durnan upon the
note in suit.
The decree appealed from will be affirmed.
Actiotis on Lost Instruments are discussed in the note to Matthews
▼. Matthews, 94 Am. St. Kep. 464.
CASES
IN THE
SUPKEME COURT
OF
NORTH CAROLINA.
NORTH CAROLINA CORPORATION COMMISSION v.
ATLANTIC COAST LINE RAILROAD COMPANY.
[137 N. C. 1, 49 8. E. 191.]
BAILBOADS — Regulation of by State Commission. — The state
corporation commission, in the exercise of the police power of the
state, has power and authority to require two railroad companies to
make connection at a certain station at a certain time. (pp. 649, 650.)
JUDGMENTS — Power of Supreme Court to Enter. — When the
supreme court reverses or affirms the judgment of the court below,
it may, in its discretion, enter final judgment therein or direct it to
be so entered in the court below, (p. 652.)
R. D. Gilmer, attorney general, Busbee & Busbee, E. A.
Woodard and Argo & Shaffer, for the plaintiff.
J. Davis and Pon & Fuller, for the defendant.
2 CLARK, C. J. It appears from the record that for
some ten years prior to October 11, 1903, the passenger traffic
from a large portion of eastern North Carolina to Raleigh
and the adjacent central part of the state was made by the
defendant Atlantic Coast Line Railroad Company connecting
with the Southern Railway at Selma at 2:50 P. M. daily.
For a year or two prior to that day the connection became
very irregular, to the great inconvenience of the traveling pub-
lic, passengers frequently being compelled to lie over at Selma
till 11 o'clock at night, and then forced to take a mixed train
with uncomfortable accommodations to go westward. The
Southern Railway finding its time between Goldsboro and
Greensboro, thirty-eight miles per hour, dangerous on account
of the condition of its track, had also lately changed its
(636)
't
Dec. '04.] N. C. Corp. Com. v. Atlantic Coast L. R. Co. 637
schedule to leave Goldsboro thirty minutes earlier. The mat-
ter being called to the attention of the corporation commis-
sion, it attempted to remedy the evil. After much corres-
pondence with the officials of both roads the commission, on
December 8, 1903, made the following order:
"Whereas, the convenience of the traveling public requires
that close connection be made between the passenger trains on
the Atlantic Coast Line Railroad and the Southern Railway
at Selma daily in the afternoon of each day; and whereas, it
appears that such close connection is practicable, it is ordered
that the Atlantic Coast Line Railroad arrange its schedule
BO that the train will arrive at Selma at 2 :25 P. M. each day
instead of 2 :50 P. M., as the schedule now stands. It is
further ordered that if the Atlantic Coast Line trains have
passengers en route for the Southern Railway and are de-
layed, notice shall be given to the Southern Railway, and that
the Southern Railway shall wait fifteen ^ minutes for such
delayed trains upon receipt of such notice. This order shall
take effect December 20, 1903.
* ' By order of the Commission :
"FRANKLLN McNEILL, Chairman.
"H. C.BROWN, Clerk."
This order quickened the arrival time of the Atlantic Coast
line train at Selma twenty-five minutes, but as it required the
Southern to wait at that point fifteen minutes for delayed
trains, it more than divided the time between the roads, ex-
acting only ten minutes advance of time on the part of the
defendant to procure this convenience to the traveling public.
On December 18, 1903, on the application of counsel for the
defendant, the order was suspended and both companies were
notified to appear before the corporation commission at Ral-
eigh on January 12, 1904, that "the matter of the connection
at Selma of the Atlantic Coast line going south with that of
the Southern Railway going west in the afternoon" might be
heard, and asking both companies to have representatives
present. The defendant appeared by its superintendent and
its general counsel, and the other company was also repre-
sented. After hearing both sides, "tlie situation being thor-
oughly discussed," the commission took the matter under ad-
visement. On January 1, 1904, the commission rendered
a full finding of the facts, concluding with this judgment:
638 American State Reports, Vol. 115. [N. Carolina,
"And it is therefore ordered that the Atlantic Coast Line
Railroad Company furnish transportation for passengers from
Rocky ]\rount to Selma after 12:50 and by and before 2:25
P. M. each day. It is further ordered that the Southern Rail-
way hold its train, No. 135, at Selma fifteen minutes, if for
any reason the Atlantic Coast Line train connecting at that
point is delayed." It was further ordered that the order
should take effect January 26, 1904. To this judgment the
Southern Railway Company did not except. The Atlantic
* Coast line filed five exceptions : 1. That it was not practica-
ble to make the connection at Selma by extending the run of
either its Plymouth or its Springhope train to Selma ; 2. That
it would be unprofitable and a loss for it to make the connec-
tion by putting on an additional train from Rocky Mount to
Selma; 3. The commission has no power to require it to put
on extra trains ; 4. That it is not practicable to make the con-
nection without putting on an extra train, which the commis-
sion has no power to do; 5. That the order is unreasonable
because passengers from Rocky Mount can make connection
at Goldsboro at 6:50 A. M. or at Selma by night train over
the Southern, or they could go up to Weldon and go over the
Seaboard Railroad. A letter in the record from the trans-
portation department of the defendant company, dated Jan-
uary 23, 1904, states that prior to the breaking of connection
at Selma the defendant's 2:50 P. M. train transported on an
average of twelve passengers daily for the Southern at Selma,
while since the average was only two. This shows three
thousand six hundred and fifty passengers annually incon-
venienced by the failure to connect at that point. There is
evidence elsewhere in the record that it was a very much
larger number. On February 2, 1904, the exceptions were
heard by the commission upon the testimony of witnesses of-
fered by the defendant, and other evidence. Upon all the
evidence and after argument by counsel for the defendant,
the commission, February 13, 1904, made a fuller finding of
fact, in the course of which it is recited, inter alia, that by
the connection at Selma at 2 :50 P. M. between the Atlantic
Coast line train No. 39 (southbound) and the Southern train
No. 135 (westbound), "the greater portion of the section
of the country reached by the said branch roads was for years
furnished the nearest and cheapest route of travel to Ral-
eigh and other Southern Railway points. The greater por-
Dec. '04.] N. C. Corp. Com. v. Atlantic Coast L. R. Co. 639
tion of the travel between the Atlantic Coast line territory
and the Southern Railway points was by this route. •* It
is admitted in the correspondence of the Atlantic Coast line
in this matter that this was a most important connection,
being the principal outlet for passengers en route from
eastern Carolina territory to Raleigh and other Southern
Railway points. There seems to have been no complaint
about the failure of these railroad companies to keep this
schedule and make this connection until about the year 1900.
The Atlantic Coast line informs the commission that 'this
matter has been a frequent source of correspondence between
this company and the Southern Railway Company since
1900, and that during this time frequent complaints have
been made to this company by the Southern Railway Com-
pany of its failure to make schedule time at Selma. ' ' '
The commission found, giving its reasons, that passengers
ought neither to be required to go a much longer distance
around by Weldon nor to make connection at unreasonable
hours at Goldsboro (6:50 A. M.), nor take a night train (11
P. M.) connection at Selma, when a few minutes quickened
time would maintain the connection which had been made at
Selma in the early afternoon for more than ten years. The
commission also found that the defendant could make the
connection, if it chose, by extending the run of its Spring-
hope train which, coming down nineteen miles from that
place, reached Rocky Mount at 12 :10, where it lay over until
4 P. M. before returning to Springhope, during which four
hours it could easily be run forty-one miles and back, mak-
ing this connection. It thus concludes its judgment:
"There is within the territory served by these branch lines
approximately four hundred thousand inhabitants. The re-
port of the Atlantic Coa.st line to this commission for the
fiscal year ending June 30, 1903, shows net earnings from
operation in North Carolina amounting to $1,943,116.63, and
that there was a surplus of $1,293,983.54 after paying inter-
est on its debts and five per cent dividends on its stock, both
common " and preferred, from the net earnings of the com-
pany's entire line. On a mileage basis, this will show that
there was a surplus of net earnings in North Carolina for that
year of approximately $324,493. The comnii.ssion is of the
opinion that the facilities given heretofore by the Atlantic
640 American State Reports, Vol. 115. [N. Carolina,
Coast line to the traveling public should not be lessened ; that
the connection furnished passengers from the Washington
branch, the Norfolk and Carolina branch, the Plymouth
branch and the Nashville branch with No. 135 Southern Rail-
way passenger train at Selma, and also for all points between
Rocky Mount and Selma for nearly ten years should be re-
stored; that if this cannot be done by the Atlantic Coast line
train No. 39 as formerly, on account of this train being
heavier, containing usually one or more express cars, and in
all usually ten or more cars, and on account of increase in
business between Richmond and Selma, which necessitates
longer stops, then other facilities should be furnished by the
Atlantic Coast Line Company; that this connection, which
was the principal outlet for passengers from eastern Carolina
to Selma and other Southern Railway points for the last ten
years, instead of being abandoned should be made permanent
and certain, and that this result be accomplished by carrying
out the order heretofore made in this court. It is ordered,
therefore, that the exceptions be and they are hereby over-
ruled. FRANKLIN McNEILL,
"Chairman."
From this order, thus repeated the third time, and after the
fullest investigation, occupying several months, the defendant
appealed to the superior court. In that court the following
issues were submitted, the corporation commission excepting:
**1. Is it practicable for train No. 39 of the Atlantic Coast
line, due to arrive at Selma at 2 :50 P. M., to make connec-
tion "^ at Selma with train No. 135, westbound, of the South-
ern Railway, due to leave Selma at 2 :25 P. M. ?
"2. Is it practicable to make said connection by extending
the run of the Plymouth train daily from Plymouth to Selma
and return, and if so what would be the additional expense ?
"3. Is it practicable to make said connection by the use of
the Springhope train, and if so what would be the additional
expense ?
"4. In order to make such connection, would the defendant
company have to run an additional train on its main line from
Rocky Mount to Selma ? ' '
The court directed the jury to answer the first three issues
**No," and the fourth issue **Yes," and the corporation com-
Dec. '04.] N. C. Corp. Com. v. Atlantic Coast L. R. Co. 641
mi.s^^ion excepted. The following issues the jury were per-
mitted to answer, to which they responded as follows :
"5. Is it practicable for said train to run the schedule pre-
scribed in the plaintiff's order, having due regard to the num-
ber of trains and number of stops on the defendant's main
line from Rocky Mount to Selma ? 'Yes.'
"6. What would be the daily cost of operating such train
from Rocky Mount to Selma and return? 'Forty dollars.'
**7. What would be the probable daily receipts from such
train? 'Twenty-five dollars.*
"8. Is it reasonable and proper that for the convenience of
the traveling public the defendant company should be re-
quired to make such connection ? ' Yes. ' ' '
Upon the verdict the corporation commission moved for
judgment, but the court rendered judgment for the defend-
ant, giving as a reason that the Code of 1883, section 1957
(9), gave to railroad companies the right to regulate "the
time and manner in which property and passengers shall be
transported," and that it had been unable to find where this
had been repealed; that he was of opinion that the statute
had not conferred any power upon the corporation commis-
sion ® to order any connection to be made between the trains
on connecting railroads, and hence he refrained from pass-
ing upon the defendant's further contention that the General
Assembly had no constitutional right to grant such power.
The corporation commission appealed, assigning several
grounds of error which will appear in the opinion.
For more than ten years the people of a large part of the
eastern portion of the state, having occasion to come to the
capital or to the adjacent central section, have found their
most direct and convenient route to be via Selma, at which
point by its schedule the southbound train No. 39 of the de-
fendant Atlantic Coast line, delivered its passengers at 2:50
P. M. daily in time to connect with the Southern Railway
westbound train No. 135 from Goldsboro to Greensboro. On
October 3, 1903, the Southern notified the corporation com-
mis.sion that owing to the condition of its track it was dan-
gerous to maintain its speed — thirty-eight miles per hour —
on its train No. 135, and proposed to leave Goldsboro thirty
minutes sooner, which would cause its arrival a few minutes
earlier at Selma. This the commission found to be proper
Am. St. Kep., Vol. 115 — il
642 American State Reports, "Vol. 115. [N. Carolina,
and reasonable. It was brought to the attention of the com-
mission by proper complaint made, that for many months the
Atlantic Coast line had failed to make this afternoon con-
nection regularly at Selma at its schedule time to the great
inconvenience of the traveling public, and it was asked to
order the afternoon connection to be resumed and observed.
After much correspondence with the officials of both roads
the commission, on December 8, 1903, ordered that the after-
noon connection should ® be made, and to that end directed
that the defendant should quicken its schedule so as to ar-
rive at Selma at 2 :25 instead of 2 :50 P. M. as before, an
advance of twenty-five minutes, but as the same order required
the Southern train to wait fifteen minutes whenever the At-
lantic Coast line was delayed for any cause, the order prac-
tically required the defendant to arrive ten minutes earlier.
Objection being taken, the order was suspended and both com-
panies were sununoned before the corporation commission,
and after investigation and argument on January 16, 1904,
the order was renewed. The Southern thereupon acquiesced
in the order. The defendant alone filed exceptions, upon
which testimony and argument were heard and the commis-
sion renewed its order in the same terms, February 13, 1904,
On appeal by the defendant to the superior court, there were
sundry issues submitted over the exception of the corporation
commission. But as the order of the commission appealed
from simply directed the connection to be made as in former
years, prescribing no details of the method (which was left
to the judgment of the defendant itself) save an acceleration
of twenty-five minutes, .subject to a delay of the Southern
train of fifteen minutes, when the defendant's train should be
late, we think the matter could have been and was fully dis-
posed of by affirmative response of the jury to the eighth
issue — "Is it reasonable and proper that for convenience of
the traveling public the defendant company should, be re-
quired to make such connection?" — taken together with the
findings upon the sixth and seventh issues, that even if an
additional train should have to be put on between Rocky
Mount and Selma, the loss to the defendant would be fifteen
dollars per day (which might be overcome by the increased
travel induced by certainty of connection), and the official
returns made by the defendant to the commission June 30,
1903, as required by law and which are in the evidence, that
Dec. '04.] N. C. Corp. Com. v. Atlantic Coast L. R. Co. 643
the net earnings of the defendant from its operations *** in
North Carolina amounted for the year ending June 30, 1903,
to $1,903,116.63, with a surplus of nearly $1,300,000 after
paying interest on its debts and five per cent dividends on
its stock, both common and preferred, from the net earnings
of the entire line. It is surely sufficiently large, as it stands,
to justify the affirmation of the order of the corporation com-
mission that this great inconvenience to the public should be
avoided, even at a cost to the defendant of fifteen dollars
per day, when the net earnings of the defendant from all its
operations in this state approximate $2,000,000 annually, and
the net surplus of the defendant's whole system, after pay-
ment of interest on its debts and dividends on its stock
(whether M-atered or not), amounts to near $1,300,000 an-
nually. And upon such verdict the judge below should have
entered judgment affirming the order of the corporation
commission, and we should reverse his judgment and enter
such judgment here, provided (1) the legislature has con-
ferred such authority upon the commission, (2) and the legis-
lature was not restrained by any provision of the state or
federal constitutions from granting such authority. Mr.
Davis, the able and accomplished counsel of the defendant,
states this clearly in his brief: "The defendant's conten-
tions in brief are as follows: 1. That the corporation com-
mission had no power or authority to make the order in ques-
tion in this cause; 2. That the order is in violation of the
constitution of the United States and the state of North
Carolina; 3. That the order is unreasonable and unjust."
His third contention is settled by the verdict and finding as
above stated. As to the first proposition, we think the Gen-
eral Assembly clearly intended to confer, and did confer, the
power upon the commission to order connection made by
any two railroads when the public convenience required it,
and the order was just and reasonable. This is not an arbi-
trary power, for, as in this case, such order is subject to review
** by a judge and jury on an appeal to the superior court,
whence a further appeal lies to this court.
Section 1 of the corporation comniis.sion act (Acts 1899, c.
164), in enumerating the qualifications, the duties and powers
of the commission, provides that "they shall have such general
control and supervision of all railroad .... companies or
corporations and of all other companies or corporations en-
644 American State Reports, Vol. 115. [N. Carolina,
gaged in the carrying of freight or passengers .... neces-
sary to carry into effect the provisions of this act." Sec-
tion 21 of the act provides that : "All common carriers subject
to the provisions of this act shall, according to their powers,
afford all reasonable, proper and equal facilities for the inter-
change of traffic between their respective lines, and for the for-
warding and delivering of passengers and freight to and from
their several lines and those connecting therewith, ....
and connecting lines shall be required to make as close con-
nection as practicable for the convenience of the traveling
public." This provision is positive, clear and mandatory.
Common carriers are (1) to afford all reasonable, proper and
equal facilities for the interchange of traffic and forwarding
freight and passengers. This would include both the place
and time of delivery and forwarding of passengers and
freight. The terms of the law are genieral, and cannot be in-
terpreted to mean alone the place at which passengers and
freight are to be delivered; it does not mean simply facility
for delivery which might be confined to the place, but also re-
quires facility for forwarding which includes time as well,
and prohibits such management as would produce delay in
forwarding passengers. This requires close connection in
point of time with connecting lines. (2) In the second place,
common carriers are "to make as close connection as practica-
ble for the convenience of the traveling public." The defend-
ant insists that this last requirement means simply a physical
connection, that is, a track connection. It is contended that
'^ the demands of the law would be met by a simple joining
of the railroad iron of one railroad to that of another, regard-
less of the time of the delivery of passengers at the junction,
arid of their finding the means of "traveling" on or continu-
ing their journey, and of the delays arid inconveniences re-
sulting from a failure to make connection of trains. The
statement of this proposition, even if the acts were ambiguous,
contains its own refutation. But the language is plain and
unequivocal, and, as Mr. Argo, of counsel for the commission,
well says, "The requirement is that 'connecting lines shall
make as close connection as practicable for the convenience of
the traveling public' This means that those railroads that
have or pretend to have a physical connection, a connection of
tracks, shall also have as close a connection of trains as practi-
cable, in order to secure the convenience of the ' traveling pub-
Dec. '04.] N. C. Corp. Com. v. Atlantic Coast L. R. Co. G45
lie' It is well known that the principal inconvenience at-
tendant upon traveling arises from delays resulting from fail-
ure of trains to connect according to time schedules. It
would contribute little to the convenience of the traveler to be
dumped out upon a track making a 'physical connection' and
be compelled to wait for hours, frequently without food or
shelter and in the night, for a train upon which he might pro-
ceed on his way. The connection required is one of trains as
well as of tracks. The public cannot travel upon a track
alone, nor upon a train without a track ; both are required to
furnish facilities for traveling at all, and a close connection
of both to secure the convenience of the traveling public."
It is true that section 1957 (9) of the Code of 1883, origi-
nally enacted in 1871-72, gave to railroad companies them-
selves the right to "regulate the time and manner in which
passengers and property shall be transported," but by the
act of 1891, chapter 320, creating a railroad commission, the
state made a radical change in its attitude toward railroads.
** It asserted its power to supervise and regulate their con-
duct, forbade discrimination and issuance of free passes, con-
ferred upon the railroad commission the power to regulate and
to fix their charges for freight and passengers, to prohibit re-
bates, to make joint through rates, to make personal visitation
of all railroad offices and places of business, to examine their
officers, agents and employes under oath, to require all con-
tracts and agreements between railroads, as to their business
in this state, to be submitted for approval, to require annual
reports from the railroads, to require the railroads to make
repairs to their tracks and additions to or changes of their
stations, forbade the abandonment of any station without the
permission of the commission, to require (if the commission
saw fit) separate accommodations for the races at the stations
and in the cars, and "that connecting lines shall be required
to make as close connection as practicable for the convenience
of the traveling public," and nrany other matters which be-
fore that had been left to the railroads thenmelves. This act
was passed after the fullest discussion for years before the
people of tlie state." It expressed their deliberate conviction
that the time had arrived when the state, in the public inter-
est, should supervise and control the charges and the conduct
of common carriers, including express companies, telegraphs,
telephones and steamboats. Similar legislation had preceded
s.
646 American State Reports, Vol. 115. [N. Carolina,
our act in England, in the federal Congress and in many of
our sister states. Similar legislation has now been adopted
in most of the states. The act of 1891 modified the Code, sec-
tion 1957 (9), certainly to the extent that the right formerly
conferred on railroad companies of fixing the time of running
their trains was made subject to the power of the commission
to require connections to be made wherever public con-
venience should require this to be done, and the order was
reasonable and just^ That act (1891, c. 320) had a repealing
clause as to all previous legislation in conflict with it. The
present *"* act of 1899 renewed the general provisions of the
railroad commission law, with some extension of its powers
and changes, but re-enacting verbatim the provision requiring
connections to be made," and giving the corporation commis-
sion "general control and supervision of all railroads," with
all powers ' ' necessary to carry out the provisions of this act. ' '
In this case the excuse of the defendant for its often miss-
ing connection at Selma since 1900 is that train No. 39 was a
through train, and that its increase in business made it more
difficult to get to Selma in time. It may be natural that the
officers of the company, looking to profits, should prefer the
through business to the neglect of the convenience of the peo-
ple of North Carolina, and should be reluctant to avoid the
delay caused by heavy through business by putting fifteen
dollars per day of its profits into affording the required con-
venience by an additional train, if necessary. But it is pre-
cisely because just and proper regard for public convenience
did not always coincide with the largest profit to the corpora-
tion that the state had to enact a statute giving to the corpora-
tion commission the power to regulate their rates, require suit-
able connections to be made, and a general supervision of their
conduct. An act of thp legislature or order of the commis-
sion reducing the defendant's charges for freight and passen-
gers many hundreds of thousands of dollars would be valid if
it Left enough profit, over running expenses, "with economi-
cal salaries and management (of which the court will judLte)
to pay interest on its bona fide debt and some profit to stock-
holders": Chicago Ry. Co. v. Wellman, 143 U. S. 339, 12 Sup.
Ct. Rep. 400 , 36 L. ed. 176. It follows that this order, even
if it cost the defendant fifteen dollars per day, is in the power
of the commission, if it serves public convenience.
Dec. '04.] N. C. Corp. Com. v. Atlantic Coast L. R. Co. 647
The other point as to the constitutional power of the legis-
lature to so enact is also well settled. The general power of
the legislature to provide reasonable rules and regulations,
*** directly or through a commission, has been held by us in
Atlantic Exp. Co. v. Wilmington etc. R. R. Co., Ill N. C. 463.
32 Am. St. Rep. 805, 16 S. E. 393 , 18 L. R. A. 393 ; in Cor-
poration Commission v. Seaboard Air Line System, 127 N.
C. 283, 37 S. E. 266, 288, and cases there cited. Among the
federal decisions this was asserted in Munn v, Illinois, 94 U. S.
113, 24 L. ed. 77, and has been reiterated in numerous cases
since, collected in 9 Rose's Notes, pp. 21-55. The doctrine is
thus stated in People v. Budd, 117 N. Y. 1, 22 N. E. 670, 682, 15
Am. St. Rep. 460, 5 L. R. A. 559: "Common carriers exercise
a sort of public office and have duties to perform in which the
public is interested: New Jersey S. Nav. Co. v. Merchants'
Bank, 6 How. 344 , 12 L. ed. 465. Their business is therefore
affected with a public interest within the meaning of the doc-
trine which Lord Hale has so forcibly stated. But we need
go no further. Enough has already been said to show that
when private property is devoted to a public use it is subject
to public regulation."
This has been repeated over and over again in all the courts.
Citation of authorities would be a work of supererogation.
If the public can regulate the charges of a conmion carrier,
so that only it is not deprived of all profits, as is held in Chi-
cago etc. Ry. Co. v. Wellman, 143 U. S. 339, 12 Sup. Ct. Rep.
400, 36 L. ed. 176, and Dow v. Beidelman, 125 U. S.
680,8 Sup. Ct. Rep. 1028, 31 L. ed. 481; it can certainly re-
quire a connection for the accommodation of thousands of our
people even if, at the utmost, it requires a loss of fifteen dol-
lars a day out of a railroad company making $2,000,000 net
earnings annually out of its operation in this state.
It is not necessary that the particular service required shall
be profiitable if the total eariiing.s in this state show a profit.
It is precisely because some particular service, which the pub-
lic comfort or convenience may require, is not profitable
that the company declines to render it. It prefers to work
the soft spots, the best paying ore only, and it is precisely for
that reason that the commission is vested with the power to
require those things to be done, if reasonable and just (not
I!
I
648 American State Reports, Vol. 115. [N, Carolina,
necessarily *® profitable), as to which there is the protection
of an appeal to the superior court and a further review here.
In St. Louis etc. R. R. Co. v. Gill, 156 U. S. 649, 15 Sup. Ct.
Rep. 484, 39 L: ed. 567, the court, affirming the supreme
court of Arkansas in same case (54 Ark. 101, 15 S. W. 18 , 11
L. R. A. 452), says that the common carrier cannot "attack as
unjust a regulation which fixes a rate at which some part
would be unremunerative To the extent that the
question of injustice is to be determined by the effects of the
act upon the earnings of the company, the earnings of the en-
tire line must be estimated." In Minneapolis etc. R. R. Co.
V. Iklinnesota, 186 U. S. 257 , 22 Sup. Ct. Rep. 900 , 46 L. ed.
1151, the court says that if upon the whole operations in haul-
ing coal the road makes a profit, the requirement as to a fair
profit upon investment is satisfied, notwithstanding under
the order of the commission there would be a loss in hauling
at the rate fixed in carload lots. In Minneapolis etc. R. R.
Co. V. Minnesota, 186 U. S. 257, 22 Sup. Ct. Rep. 900, 46
L. ed. 1151, the court say: "We do not think it beyond the
power of the state commission to reduce the freight upon a
particular article, provided the companies are able to earn
fair profit upon their entire basiness, and the burden is
upon them to impeach the action of the commission in this
particular." In People v. St. Louis etc. Ry., 176 111. 512,
52 N. E. 292, 35 L. R. A. 656, the supreme court of Illinois
laid down the same doctrine thus: "The sufficiency of the
earnings of a railroad to justify the expenses of running
a separate passenger train over a certain branch line con-
stituting part of the entire system is not to be determined
by considering the profits of that branch alone, but of the
whole business of the various parts of the roads operated
with the branch as one continual line." In Railroad &
S. S. Co. V. Railroad Commission of La., 109 La. 247, 33
South. 214, the supreme court of that state, through Nich-
ols, C. J., in defining the powers possessed by the railroad
commission, says: "They extend to matters concerning pub-
lie comfort and convenience, and in the consideration of mat-
ters of comfort and convenience the number of persons who
may be concerned or interested in some particular matter at
some ^"^ particular point enter as important factors in de-
termining what is to be done. The commission cannot ignore
the comfort and convenience of numbers of citizens on a line
Dec. '04.] N. C. Corp. Com. v. Atlantic Coast L. E. Co. 649
of travel or conveyance to base their action exclusively upon
a consideration of the amount of dollars and cents which may
be involved In the present issue it cannot be claimed
that the Southern Pacific road, either in the operation of its
line as a whole or that part of it which falls within the limits
of Louisiana, has not been and is not remunerative; nor can
it be said that the Morgan Railroad Company is not a paying
corporation We do not think the point is made that
after the business of the railroad corporation had made it
faijrly remunerative, the commission is without general au-
thority to direct that a portion of the 'surplus' profits (if that
expression can be used) should be applied to the promotion
of the comfort and convenience of the people along the line of
road. When such a point in the business of the road is
reached, the rights of the 'general public' come clearly in
view. ' '
In United States v. Trans-]\Iissouri Freight Assn., 166 U.
S. 290, 17 Sup. Ct. Rep. 540 , 41 L. ed. 1007, the court says :
"It must also be remembered that railways are corporations
organized for public purposes, have been granted valuable
franchises and privileges (and among such the right to take
private property of citizens is not the least), and that they
all primarily owe duties to the public of a higher nature even
than that of earning large dividends for their shareholders."
In Gladson v. Minnesota, 166 U. S. 427, 17 Sup. Ct. Rep. 627 ,
41 L. ed. 1064, the court says: "The state which created the
Qorporation may make all needful regulations of a police char-
acter for the government of the company while operating its
road within the jurisdiction; it nuiy prescribe the location
and the plan of construction of the road and the rate of speed
nt which the trains shall run, and the places at which they
shall stop, and may make any other reasonable regulations
for their management in order to ^** secure the object of its
incur} loration and the safety, good order, convenience and
comfort of its passengere and of the public." In Wisconsin
etc. R. Co. V. Jaeobson, 179 U. S. 2S7, 21 Sup. Ct. Rep. 115,
45 L. ed. 194, the court says: "That railroads from the very
outset have been regarded as public highways, and the right
and duty of the government to regulate, in a reasonable an<i
proper manner, the conduct and business of a railroad cor-
poration have been founded upon that fact. Constituting
public highways of a most important character, the functions
650 American State Reports, Vol. 115. [N. Carolina,
of proper regulation by the government spring from the fact
that in relation to all highways the duty of regulation is gov-
ernmental in its nature. At the present day there is no
denial of these propositions. The companies hold a public
franchise and governmental supervision is therefore valid.
They are organized for the public interests and to subserve
primarily the public good and convenience."
It is needless to multiply authorities. As the United States
supreme court says in the last cited case, the defendant was
granted incorporation by the state "to subserve primarily
the public good and convenience." If all those things re-
quired for the public convenience or comfort were profitable
per se to the company, a corporation commission would not be
necessary to compel the adoption and operation of such better-
ments. In Spring Valley Water Works v. Schottler, 110 U. S.
347, 4 Sup. Ct. Rep. 48, 28 L. ed. 173, it was held that the
legislature may regulate gas and water and other like com-
panies, and requires them to furnish their customers at prices
to be fixed by the municipal authorities of the locality, and in
New York etc. R. R. Co. v. Town of Bristol, 151 U. S. 556,
14 Sup. Ct. Rep. 437, 38 L. ed. 269, that the legislature could
require, even as to railroads already built, the removal of
grade crossings at railroad expense. Certainly, then, the
police power extends to authorizing the state corporation com-
mission to require two railroad companies to make connection.
The corporation commission, after three several investigations,
has found that this connection would subserve that *® end.
The jury, after an overwhelming array of evidence which we
have not deemed it necessary to recapitulate or cite, has so
found. The statute clearly gives the power, and the au-
thorities are beyond question that the legislature could confer
it. Requiring two railroads to make connection is the exer-
cise of a far less power than making rates or compelling the
erection of union depots at such junctions.
While we must reverse the decision below and affirm the
judgment of the corporation commission, in view of the nov-
elty and importance of this class of litigation, it is well to take
notice of some of the exceptions taken by the commission.
Dee. Ul.j N. C. Corp. Com. v. Atlantic Coast L. R. Co. 651
It was error to direct a verdict upon the first four issues.
Upon the first issue, whether it was practicable to make con-
nection by train No. 39, and the second issue, whether it was
practicable to make connection by extending the run of the
Plymouth train to Selma, there was a conflict of evidence, and
the issues were of fact, and (if material) should have been
submitted to the jury. IMore especially was this true since
the order of the commission was presumed to be valid and the
burden was on the defendant to show otherwise. ^^ Minne-
apolis etc. R. R. Co. V. Minnesota, 186 U. S. 257, 22 Sup. Ct.
Rep. 900, 46 L. ed. 1151, On the third issue, as to the practi-
cability of running the Springhope train to Selma in the four
hours that it lies over at Rocky Mount, the evidence was un-
contradicted that this could be done, and there was even evi-
dence from two reputable witnesses which proved (if be-
lieved by the jury) that the costs of the extra run would be
only ten dollars, showing a profit of fifteen dollars daily.
The excuse that the engine was used for shifting at Rocky
Mount, or that, being a wood-burner, a small stand for wood
would need to be built at Selma — the other engines being
coal-burners — did not deserve to be considered against the in-
convenience to thousands of the public caused by failure to
make this connection. It follows that it was error to instruct
the jury in response to the fourth issue to find that the con-
nection could only be made by an additional train from
Rocky Blount to Selma.
652 American State Reports, Vol. 115. [N. Carolina,
The first seven issues were irrelevant and immaterial. The
motion of the plaintiff for judjjment upon the verdict should
have been granted. The eighth issue, "Is it reasonable and
proper that for the convenience of the traveling public the de-
fendant company should be required to make such connec-
tion?" was answered "Yes." This was the only material
issue, and upon that finding alone the judgment should be
entered here. This view is strengthened by the "inspection
of the whole record," which shows that the findings upon the
sixth and seventh issues are that if the connection were made
by the most expensive of the four methods named, the loss was
only fifteen dollars per day, and the report of the defendant
to the corporation commission, which is in the record, that
its annual net earnings in this state were nearly two millions
of dollars. This shows the correctness of the finding upon the
eighth issue as to the reasonableness of the order, even in the
most adverse view.
The court has the power to enter final judgment here,
** and on proper occasions has done so: Code, sec. 957;
Alspaugh V. Winstead, 79 N. C. 526; Griffin v. Asheville
Light Co., Ill N. C. 434, 16 S. E. 423; Cook v. American
Exch. Bank, 130 N. C. 183, 41 S. E. 67. Final judgment
has been entered here, not infrequently, by order and with-
out opinion as a matter of course. In Bernhardt v. Brown,
118 N. C. 700, 24 S. E. 527, 36 L. R. A. 402, it is said: "If
this court reverses or affirms the judgment below, it may in
its discretion enter a final judgment here or direct it to be
so entered below. By preference, and as a matter of con-
venience, the latter course is, unless in very exceptional cases,
the course pursued, especially since the act of 1887, chapter
192." In Caldwell v. Wilson, 121 N. C. 423, 28 S. E. 363,
which resembles this case in being a matter of public inter-
est and not a judgment for money, it was held "the judgment
must therefore be affirmed, but in view of the public inter-
ests involved, we deem it proper not to remand the case but
to enter final judgment in this court," which was done — oust-
ing the defendant from the office and seating the relator.
Among many other cases in which final judgments were en-
tered here is White v. Auditor, 126 N. C. 570, 36 S. E. 132,
and similar cases, in none of which the dissents were upon
the power of this court to enter final judgment here. The
Code, section 957, provides as to this court: "In every case
the court may render such sentence, judgment and decree as
Dec. '04.] N. C. Corp. Com. v. Atl.vxtic Coast L. R. Co. 653
on inspection of the whole record it shall appear to them
ought in law to be rendered thereon." Rule 49 of this court
provides for "a judgment docket of this court," with ref-
erences to entries as to different causes of action in which
recovery is adjudged, and rules 50 and 51 for the issuance
of executions from this court on its judgments.
In this matter there has already been a year's delay. The
inconvenience to the public continues each day. The act of
the legislature for that reason expedites the hearing of these
causes by giving them precedence of all other civil cases.
Judgment will therefore be entered here reversing the judg-
ment ^^ of the superior court, and affirming in all respects
and declaring valid the order of the corporation commission
made in this case, February 13, 1904. That order simply
directed the defendant to make the connection daily at Selma
at the time mentioned therein, without specifying whether this
should be done by quickening the speed of train No. 39 or by
extending the run of the Springhope or the Plymouth train,
or by putting on an extra train from Rocky Mount to Selma,
and our judgment leaves to the defendant the same liberty of
choice as to the mode in which it shall put into effect the order
of the commission. Owing to the possible necessity of mak-
ing preparations to comply with this judgment, there will be
a cessat executio till February 10, 1905, entered on the
judgment docket of this court, and until that date no man-
date shall issue to the defendant upon this judgment.
The judgment of the superior court is reversed.
DOUGLAS, J., Concurring. I fully concur in the opinion
of the court ; but there is a question omitted therefrom which,
though perhaps not e.s.sential to the present decision of the
court, may become of the greatest importance in view of the
federal question raised, or attempted to be raised, by the de-
fendant. I think there was error in excluding, upon the ob-
jection of the defendant, answers to the following questions
asked by the plaintiff, to wit:
"Q. !Mr. Borden, what is the stock of the Atlantic Coast
line worth to-day 1 ' '
"Q. AVhat was the stock of the Wilmington and Weldon
Railroad Company worth twenty years ago?"
"Q. Is not the present value of the original stock of the
"Wilmington and Weldon Railroad Company, which consti-
tuted the ha.sis of the present stock of the Atlantic Coast
Line, to-day worth $1,900 or $2,000 in the market?"
654 American State Reports, Vol. 115. [N. Carolina,
"Q. What dividends are now being received by the holders
of the ** original stock of the Wilmington and Weldon Rail-
road Company?" Record, p. 294.
The questions sufficiently disclose the scope of the pro-
posed inquiry, but would doubtless have been followed by
other questions eliciting in greater detail the desired informa-
tion. In its second exception to the order of the commission,
the defendant claims the protection of the constitution of the
United States in the following words: "The company, there-
fore, excepts to the order of the commission in so far as it is
construed as requiring it to run an additional train from
Rocky Mount to Selma between the hours above named, be-
cause to do so would be requiring the company to perform ser-
vices without compensation to it for the same, and thereby
taking its property without due process of law, and in viola-
tion of the constitution of this state, and in violation of the
constitution of the United States": Record, p. 32. In its
brief the defendant also says: "Neither the commission nor
the legislature has the power to require the defendant to run
an additional train at a loss. The jury finds that to operate
this train will impose a daily loss of fifteen dollars upon the
defendant, and to compel the defendant to operate this train
at a loss would be taking its property without compensation
and in violation of the constitution of this state and of the
constitution of the United States."
In this view of the case the excluded testimony might be-
come of the utmost importance. AVe cannot presume that the
corporation commission intends "to take the property of the
defendant without due process of law" or to require unneces-
sary services without compensation in some form or another;
but we cannot admit that the defendant can ignore the just
demands of the public by creating for its own profit and con-
venience a condition of affairs that makes one train unprofita-
ble by throwing all the remunerative business on trains that
do not make connection. The order of the commission does
*^ not require the defendant to run an additional train, but
simply to make connection. It does not necessarily require
any additional, unusual or special services, but simply the
performance of its essential duties in such a manner as will
meet the reasonable convenience of the public. This the de-
fendant can do by making a through train arrive at Selma a
few minutes earlier; but if it prefers to ignore the rights of
those living along its line, whose lands it has taken through
Dec. '04.] N. C. Corp.. Com. v. Atlantic Coast L. R. Co. 655
the exercise of the right of eminent domain, in order to cater
to its through travel, it cannot justly complain if its public
duties require the running of an extra train. The mere fact
that through passengers from the North to Florida have the
choice of three or more routes, varying but little in time and
comfort, is no excuse for an unjust discrimination against
that part of the traveling public who are dependent upon local
lines. This idea was evidently in the mind of this court,
when, speaking by Rodman, J., in Branch v. Wilmington &
W. R. R. Co., 77 N. C. 347, upon the necessity for the imposi-
tion of penalties, it says on page 350: "The legislature con-
sidered the common-law liability as insufficient to compel the
performance of the public duty. It must have thought that
the interest of local shippers, for whose interest principally
the road was built, and against whom the company had a com-
plete monopoly, were being sacrified by wanton delays of
carriage in order that the company might obtain the carriage
from points where there were competing lines by land or wa-
ter— as from Wilmington to Augusta." The fact that the
defendant in that case was the parent of the present defend-
ant may lend additional significance to the words of the court.
In this view the profits of the road, both for the present
and the immediate past, would become material. Suppose
the witness had answered that no dividend had been paid for
years, and that the company was unable to earn anj'thing
beyond bare expenses, whereby the stock was almost un-
marketable, ^^ would it not have been competent as tending to
prove the defendant's contention that it is unrea.sonable to de-
mand of it any additional service? On the contrary, suppose
the witness had testified as follows: That on one share of the
par value of one hundred dollars in the Wilmington and
Weldon Railroad Company, the following stock dividends or
bonuses had been i.ssued in addition to large annual divi-
dends; that in 1887 the said railroad company had issued
upon this one share of stock as a bonus a certificate of in-
debtedness in the sum of one hundred dollars bearing seven
per cent interest ; that in 1900 there were issued, in lieu of this
one share of stock, two shares of one hundred dollars each of
preferred stock in the Atlantic Coast Line Company and two
shares of one hundred dollars each of common stock in the
Atlantic Coast Line Company; that in 1807 there was also
issued to the holder of the one origiiial share of stock
four shares of the Atlantic Coast Line Company of Connecti-
656 American State Reports, Vol. 115. [N. Carolina,
CUV of one hundred dollars each, and in 1900 a certificate of
indelDtedness of the Atlantic Coast Line Company of Connec-
ticut for four hundred dollars; that all of said stock and cer-
tificates of indehtedness were much above par value and re-
ceiving handsome dividends; that recently a dividend of
twenty-five per cent had been declared, and that the one orig-
inal share in the Wilmington and Weldon Railroad Company
had thus developed into thirteen shares of stock and certifi-
cates of indebtedness of the par value of $1,300 but of the real
value of about $2,500. Suppose it had been further shown
that a little over thirty years ago the state's half interest in
the Wilmington and Weldon Railroad Company had been
bought for thirty-five dollars a share. Suppose, further, that
it was shown that a large part of the alleged indebtedness of
the company were certificates of indebtedness issued to the
stockholders without any consideration whatever other than
the mere capitalization of profits; ^® would not this evidence
have been competent to prove that the order of the corpora-
tion commission requiring the defendant to quicken its regu-
lar train twenty-five minutes in order to make connection at
Selma was not unreasonable, and not "taking its property
without due process of law and in violation of the constitu-
tion of the United States?" Would not such evidence also
tend to prove that it would not be unreasonable to require
the defendant to make such connection even if it did require
an extra train at a loss of fifteen dollars per day, if other
trains running on the same line of road and by the same places
more than made up the difference ?
These are hypothetical answers on both sides. Where the
truth may be was peculiarly within the knowledge of the de-
fendant upon whose objection it was excluded. It cannot be
contended that such an fnvestigation would be an impertinent
inquisition into private affairs, as property taken for a public
purpose under the power of eminent domain is indelibly im-
pressed with a public use. This has been too often decided
by the supreme court of the United States to be any longer
an open question. Two cases will be sufficient for my pur-
pose. In Chicago etc. Ry. Co. v. Wellman, 143 U. S. 339,
12 Sup. Ct. Rep. 400, 36 L. ed. 176, the court says, on page
345 : " A single suggestion in this direction : It is agreed that
the defendant's operating expenses for 1888 were $2,404,-
516.54. Of what do these operating expenses consist? Are
Dec. '04.] N. C. Corp. Com. v. Atlantic Coast L. R. Co. 657
they made up partially of extravagant salaries, fifty to
one hundred thousand dollars to the president, and in like
proportion to subordinate officers? Surely, before the courts
are called upon to adjudge an act of the legislature fixing the
maximum passenger rates for railroad companies to be un-
constitutional, on the ground that its enforcement would pre-
vent the stockholders from receiving any dividends on their
investments, or the bondholders any interest on their loans,
they should be fully advised as to what is done with *'' the
receipts and earnings of the company; for if so advised it
might clearly appear that a prudent and honest management
would within the rates prescribed secure to the bondholders
their interests, ' and to the stockholders reasonable dividends.
While the protection of vested rights of property is a supreme
duty of the courts, it has not come to this that the legislative
power rests subservient to the discretion of any railroad cor-
poration which may, by exorbitant and unreasonable salaries,
or in some other improper way, transfer its earnings into
what it is pleased to call 'operating expenses.' "
The corporation commission act (Laws 1899, c. 164), in
section 2 provides as follows: "Provided, that in fixing any
maximum rates or charges or tariff of rates or charges for any
common carrier, person or corporation subject to the provi-
sions of this act, the said commission shall take into considera-
tion if proved or may require proof of the fair value of the
property of such carrier, person or corporation used for the
public in the consideration of such rate or charge, or the fair
value of the service rendered as in determining the fair value
of the property so being used for the convenience of the pub-
lic. It shall furthermore consider the original cost of the
construction thereof and the amount expended in permanent
improvements thereon, and the present compared with the
original cost of construction of all its property within the
state of North Carolina; the probable earning capacity of
such property under the particular rates proposed and the
sum required to meet the operating expenses of such carrier,
person or corporation, and all other facts that will enable
them to determine what are reasonable and just rates, charges
and tariffs."
The case of Cotting v. Godard, 183 U. S. 79, 22 Sup. Ct.
Rep. 30, 46 L. ed. 92, is cited by the defendant , but does not
seem to stistain its contentions. In tlie opinion in that case
Am. St. Rep., Vol. 115 — 42
658 American State Reports, Vol. 115. [N. Carolina,
appears the following clear distinction between those cor-
porations which, like railroad *** and telegraph companies,
are created for a public purpose, and endowed with certain
governmental powers, such as that of eminent domaiil, and
those corporations which are only incidentally devoted to pub-
lic use, receiving no governmental powers and not impressed
with any permanent public purpose. The court says, on
page 93: "Now, in the light of these decisions and facts, it is
insisted that the same rule as to the limit of judicial inter-
ference must apply in cases in which a public service is dis-
tinctly intended and rendered and in those in which without
any intent of public service the owners have placed their
property in such a position that the public has an interest in
its use. Obviously, there is a difference in the conditions of
these cases. In the one the owner has intentionally devoted
his property to the discharge of a public service. In the other
he has placed his property in such a position that, willingly
or unwillingly, the public has acquired an interest in its use.
In the one he deliberately undertakes to do that which is a
proper work for the state. In the other, in pursuit of merely
a private gain, he has placed his property in such a position
that the public has become interested in its use. In the one
it may be said that he voluntarily accepts all the conditions
of public service which attach to like service performed by
the state itself. In the other, that he submits to only those
necessary interferences and regulations which the public in-
terests require. In the one he expresses his willingness to do
the work of the state, aware that the state in the discharge
of its public duties is not guided solely by a question of profit.
It may rightfully determine that the particular service is of
such importance to the public that it may be conducted at a
pecuniary loss, having in view a large general interest. At
any rate, it does not perform its services with the single idea
of profit. Its thought is the general public welfare. If in
such a case an individual is willing ^^ to undertake the work
of the state, may it not be urged that he in a measure sub-
jects himself to the same rules of action, and if the body which
expresses the judgment of the state believes that the particu-
lar services should be rendered without profit he is not at
liberty to complain? While we have said again and again
that one volunteering to do such services cannot be compelled
to expose his property to confiscation, that he cannot be com-
Dec. '04.] N. C. Corp. Com. v. Atlantic Coast L. R. Co. G.'O
pelled to submit its use to such rates as do not pay the ex-
penses of the work, and therefore create a constantly increas-
ing debt which ultimately works its appropriation, still h
there not force in the suggestion that as the state may do the
work without profit, if he voluntarily undertakes to act for
the state he must submit to a like determination as to the
paramount interests of the public? Again, wherever a
purely public use is contemplated the state may, and generally
does, bestow upon the party intending such use some of its
governmental powers. It grants the right of eminent domain
by which property can be taken, and taken not at the price
fixed by the owner, but at the market value. It thus enables
him to exercise the powers of the state, and exercising those
powers and doing the work of the state, is it wholly unfair
to rule that he must submit to the same conditions which the
state may place upon its own exercise of the same powers and
the doing of the same work? It is unnecessary in this case
to determine this question. We simply notice the arguraent«
which are claimed to justify a difference in the rule as to prop-
erty devoted to public uses from that in respect to property
used solely for purposes of private gain, and which only by
virtue of the conditions of its use becomes such as the pub-
lic have an interest in. In reference to this latter class of
cases, which is alone the subject of the present inquiry, it
must be noticed that the individual is not doing the work of
the state. He is not using his property in the discharge
** of a purely public service. He acquires from the state
none of its governmental powei*s. His business in all matters
of purchase and sale is subject to the ordinary conditions of
the market and the freedom of contract."
The Principal Case was carried by writ of error to the supreme
court of the United Stiitts and there affirmed (Athmtic Coast Line
K. R. Co. V. North Carolina Corporation Coniuiissiou (U. S.), 27 Sup.
Ct. Rep. 58.5), in the following opinion delivere<l by Mr. Justice White:
"Did the order of the North Carolina corporation couiniis^ion, the
enforcement of which was directed by tho court below, invade con-
stitutional rights of the Atlantic ('oast Lino Railroad Company, here-
after spoken of as the coast line? is the qucstiuu which arises ou this
record for decision. .V sketch showing the situation of the railway
tracks at and relating to the place with which the controversy is
concerned was annexed by the court below to its opinion, and that
■ketch is reproduced to aid in clearness of statenw nt.
660
American State Reports, Vol. 115. [N. Carolina,
9J^
"For years prior to October, 1903, the coast line operated daily an
interstate train from Richmond, Virginia, through North Carolina to
Florida. This train, known as No. 39, moved over the main track
from Richmond to Wilson, North Carolina, thence by the track
designated as the cut-off via Selma and Fayetteville to Florida. The
train (No. 39) was scheduled to reach Selma at 2:50 in the afternoon
and to leave at 2:55. The Southern Railway owned or controlled a
road in North Carolina which crossed the coast line main track at
Goldsboro and the cut-off track at Selma. On this road there was
Dec. '04.] N. C. Corp. Com. v. Atlantic Coast L. R. Co. 6G1
operated daily a train from Goldsboro via Ealeigh to Greensboro,
North Carolina, at which point connection was made with the main
track of the Southern road. This Southern train, known as No. 135,
left Goldsboro at 2:05 in the afternoon and Selma at 3 o'clock. Thus
at Selma it connected with No. 39 of the coast line. The coast line
also operated in North Carolina the branch lines shown on the sketch,
which radiated easterly, and served a considerable area of territory.
These branches connected with the main track at Rocky Mount, a
station forty-two miles nearer Richmond than Selma. At Rocky
Mount there also was a connection with a coast line road running
from Pinner's Point, near Norfolk, Virginia. Over this road also the
coast line operated a train, which left Pinner's Point in the morning
and connected with the coast line train No. 39 at Rocky Mount. The
departure of the train in question from Pinner's Point was so ar-
ranged as to enable boats timed to arrive at Norfolk during the night
or early morning to make, by ferry to Pinner's Point, a morning
connection with the train. On the 3d of October, 1903, the Southern
railway notified the North Carolina corporation commission of a con-
templated change of schedule on its line from Goldsboro via Raleigh
to Greensboro. By the change, which was to go into effect on the
11th of October, Southern train No. 135, instead of leaving Goldsboro
at 2:05, would leave at 1:35 in the afternoon, and would leave Selma
at 2:25 instead of 3. As a result, the connection at Selma between
the coast line train No. 39 and the Southern train would be broken.
The North Carolina corporation commission, by letter, on the 6th of
October, called the attention of the general manager of the coast line
to the contemplated change of time by the Southern, and requested
that line to advance the time of No. 39 to enable that train to reach
Selma at 2:25, thus continuing the connection with the Southern.
On the 12th of October, the superintendent of transportation of the
coast line answered. He stated that the schedule of train No. 39
from Richmond to Selma was already so fast that it was very diffi-
cult to make the connection at Selma, and that it would be impossible
to advance the time of arrival at Selma as requested. It was besides
represented that to do so would require a breaking of the connection
made with the Norfolk train at Rocky Mount, and would disarrange
the running time of the train south of Selma, and disturb connections
which that train made with other roads south of that point. How-
ever, it was pointed out that as train No. 39 did not originate at
Richmond, but was a through train, made up at New York, carried
from thence to Washington by the Pennsylvania, and from Washing-
ton to Richmond by the Richmond, Fredericksburg and Potomac, that
negotiations would be put on foot with those roads with an endeavor
to secure an acceleration of the time of the departure of the train
from New York and Washington, so as thereby to enable an earlier
departure from Richmond. On the 11th of October the change of
time became operative and the connection at Selma waa broken.
662 American State Reports, Vol. 115. [N. Carolina,
"A complaint having been lodged with the corporation commission
because of the inconvenience to the public thereby occasioned, both
the Southern and coast line were notified that a hearing would be had
concerning the subject on the 29th. On that day the railways,
through their officials, appeared. The Southern represented that its
change in time was because it was absolutely dangerous to operate
its train at the speed required by the previous schedule, and, indeed,
that the lengthened schedule was yet faster than desired. The coast
line reiterated the impossibility of changing the schedule of train
No. 39 from Bichmond to Selma unless there was a change between
New York and Eichmond. It stated that there was to be a meeting
in Washington on November 6th of the representatives of various
roads in the south, and that it hoped, as the result of that meeting,
to so arrange that No. 39 would be scheduled for delivery at Bich-
mond at an earlier hour, thus enabling its time to Selma to be ad-
vanced. The commission continued the subject for further considera-
tion. On November 9th the superintendent of the coast line advised
the corporation commission that at the meeting in Washington it
had been impossible to obtain an earlier departure of the train from
New York and Washington, but that the Pennsylvania still had
the matter under consideration. Finally, in answer to urgent re-
quests from the commission, by a letter of November 13th, and tele-
gram of November 14th, the coast line informed the corporation com-
mission that it regretted it could make no change in its schedule of
train No. 39 because the Pennsylvania railroad had definitely ex-
pressed its inability to make any change in the hour of departure
of the train from New York, as to do so would be incompatible with
the duties which the Pennsylvania railroad owed to the public, to
other roads, and to its contracts concerning the transportation of the
mail and express matter. Thereupon the corporation commission
entered the following order:
" 'Whereas, the convenience of the traveling public requires that
close connection be made between the passenger trains on the Atlan-
tic Coast Line Bailroad and the Southern Eailway at Selma daily
in the afternoon of each day;
" 'And whereas, it appears that such close connection is practica-
ble:
" 'It is ordered that the Atlantic Coast Line Bailroad arrange its
schedule so that the train will arrive at Selma at 2:25 P. M. each
day instead of 2:50 P. M., as the schedule now stands.
" 'It is further ordered that if the Atlantic Coast Line trains
have passengers en route for the Southern railway, and are delayed,
notice shall be given to the Southern railway, and that the Southern
railway shall wait fifteen minutes for such delayed trains upon re-
ceipt of such notice.
** 'This order shall take effect December 20, 1903.'
Dec. '04.] N. C. Corp. Com. v. Atlantic Coast L. R. Co. 663
"The Southern, on receipt of the order, expressed its intention to
comply. The coast line addressed to the commission a letter pro-
testing against the order, and requesting its withdrawal, and asking
for a further hearing. The letter making this request reviewed the
previous correspondence. It pointed out that the connection at Selma
had been a very old one and that its breaking was solely caused by
the act of the Southern in changing the time of its train. It de-
clared that the coast line at once, on hearing of the intention of the
Southern to make the change, urgently requested that road not to do
so. On this subject the letter said: 'On October 6th, I further
advised the Southern railway that if their train was scheduled to
leave Selma at 2:25 P. M. this would break the connection with our
No. 39, and stated to them that the connection was a most important
one, being the principal outlet for passengers en route from eastern
Carolina to Ealeigh and other points on their line, and that we hoped
that they could see their way clear not to disturb the connection,
as it was impossible for us to get No. 39 to Selma at an earlier hour
than the present schedule, owing to the inability of northern con-
nections to deliver the train to us at Richmond any sooner.'
"Proceeding to point out the failure of the negotiations with the
Pennsylvania, and recapitulating the previous statements concerning
the rapidity of the schedule of No. 39 between Richmond and Selma,
the exacting nature of its work and connections, the absolute impossi-
bility of making it faster was insisted upon. Indeed, there was
annexed to the letter a report of the time of No. 39 at Selma for a
period of nearly five months, showing that the train had rarely
made its connection at Selma.
"The commission, after a hearing afforded officials of the coa.st
line, suspended its prior order and fixed a day for a rehearing of
the whole subject, both roads being notified to that effect. Upon
the new hearing the matter was taken under advisement. On Janu-
ary 16th the commission stated the facts and its conclusions deduced
therefrom. As to the operation of the two trains, their connection
at Selma, the importance of this connection to the public, and the
breaking of the connection by the change of schedule, the facts found
were identical with those above previously recited. In addition it
was found that the coast line train No. 39 from Richmond to Selma
was not only a through train, but also operated as a local train
between Richmond and Selma, making all local stops, and daily
handling, in consequence, one or two extra express cars. It was
found in accordance with the official time sheets of the running of
the train that it had arrived at Selma on schedule time only twice
between August 1, 1903, and January 11, 1904. Considering the
branch lines as marked on the sketch, and the trains operated thereon
and connecting with the main track at Rocky Mount, it was found:
"a. That a train was operated from Plymouth to Rocky Mount,
664 American State Reports, Vol. 115. [N. Carolina,
which left in the morning at 7:30 and arrived at Kocky Mount at
10:35, where it remained until 3:55 in the afternoon, when it returned
to Plymouth.
"b. That the road also operated a train from Spring Hope on the
westerly side of the main track to Rocky Mount, leaving Spring Hope
at 11:20 in the morning, arriving at Rocky Mount at 12:10 in the
afternoon, and leaving there at 4, arriving at Spring Hope at 4:45.
The commission concluded as follows:
" 'Assuming that the statements made by the Atlantic Coast Line
Railroad Company are true — that it was, for the past five months,
impossible for them to bring No. 39 to Selma by schedule time, to wit,
2:50 P. M. more than twice, and that this train was more than ten
minutes late every day except twenty-four — we must conclude that it
is impracticable to require them to make a faster schedule and place
this train at Selma at 2:25 P. M, instead of 2:50 P. M.; and therefore
this much of the former order is revoked and annulled; but the com-
mission is of the opinion that it is practicable, and that the conve-
nience of the traveling public requires, that the Atlantic Coast Line
Railroad Company furnish transportation for passengers from Rocky
Mount to Selma after 12:50 P. M. and by or before 2:25 P. M. each
day; that this can be done by extending the run of the Plymouth
train to Selma instead of having it lie over at Rocky Mount as now,
or by extending the run of the Spring Hope train to Selma instead
of having it lie over at Rocky Mount as now. The distance from
Plymouth to Rocky Mount is sixty-nine miles, and from Spring Hope
to Rocky Mount is nineteen miles, and from Rocky Mount to Selma
forty-two miles; or by providing a separate train for the service.
** 'And it is therefore ordered that the Atlantic Coast Line Rail-
road Company furnish transportation for passengers from Rocky
Mount to Selma after 12:50 P. M. and by or before 2:25 P. M. each
day.
" *It is further ordered that the Southern railway hold its train
No. 135 at Selma fifteen minutes if, for any reason, the Atlantic
coast line train connecting at that point is delayed.
** 'It is further ordered that this order take effect on and after
the 26th day of January, 1904.'
"Before the date fixed for the taking effect of this order the coast
line filed five grounds of exception to its validity and prayed an-
other hearing. The " first asserted the impossibility of making the
connection from Rocky Mount to Selma between the hours fixed
by the commission by an extension of the run of either of the branch
trains referred to in the order which the commission had rendered.
The reasons principally relied upon to sustain the first exception were
the inadequate character of the motive power of the branch road
trains for operation on the main track, the speed at which the
train would be obliged to travel, and the congested condition of the
business on the main track during the hours when the train from
Dec. '04.] N. C. Corp. Com. v. Atlantic Coast L. R. Co. 665
either of the branch roads would be obliged to use the main track
for the purpose of making the connection. The second exception
denied the possibility of making the connection by a special train
from Rocky Mount to Selma within the time indicated, and be-
sides asserted that such a train could not be operated without
an actual loss. The power of the commission to compel the
performance of 'services without compensation to the company'
was denied, and it was alleged that a taking of property without
due process of law, in violation of the state constitution and the
fourteenth amendment to the constitution of the United States would
result from enforcing the order. The third exception denied the
power of the commission, under the state law, to order the com-
pany to put on an extra train between Eocky Mount and Selma, and
the fourth in effect reiterated the same ground. The fifth exception
challenged the validity of the order as unreasonable, unjust, and
arbitrary, and beyond the power of the commission to render, because
ample and sufficient accommodations for passengers desiring to con-
nect at Selma with the Southern road were afforded by the coast
line, entirely irrespective of the connection which had formerly
existed between train No. 39 of the coast line and train No. 135
of the Southern. The trains thus relied upon as showing a wholly
adequate service for the purposes stated were eight in number, and,
as enumerated in the exception, are stated in the footnote.*
•"1. The train from Rocky Mount, southbound in the earlv
morning, makes a close connection at Goldsboro at 6:.50 o'clock with
theSouthern for Raleigh and all points west.
"2. The trains from Norfolk and Richmond make close connec-
tion at Goldsboro and Selma with the night train on the Southern
for Raleigh and all points west.
".3. The train from Weldon to Kinston makes close connection at
Kinston with the Atlantic and North Carolina train fo' Goldsboro,
which train in turn makes close connection with the Southern at
Goldsboro -at 9:40 P. M. for Raleigh and all points west.
"4. The train No. 39, from Washington, to Jacksonville, is due
at Selma at 2:50 P. M., and the accommodation train No. 183. on the
Southern, from Selma to Raleigh and all points west, is scheduled to
leave Selma at 3:25 P. M.
"5. Train No. , from Jacksonville to Washington, is due to
arrive at Selma at 2:10 o'clock, and makes close connection tliere
with the Southern, which leaves Selma at 2:25 P. M. for Raleigh
and all points west.
"6. Two trains leave Wilmington for the north, the first at 9:30 A.
M., No. 48, and the other. No. 42, at fi:."0 P. M. Both of these
trains make close connections at Goldsboro with the Southern trains
for Raleigh and all points west.
"7. No. 34, leaving Smithfield at 7:00 A. M., makes close connec-
tion at Solma with the Southern going west for Raleigh and all
points beyond, and the same train makes close connection at Woldon
with the Seaboard train for Raleigh, and for Seaboard points south
and west.
* "S. No. 102 leaves Goldsboro for Norfolk at 7:30 A. M., and
makes close connection at llohgood with No. 58, the train from Kins-
ton to Weldon, and there with the Seaboard for Raleigh and points
west. ' '
#■ f
666 American State Reports, Vol. 115. [N. Carolina,
"After a new hearing, at which further testimony was taken, the
corporation commission in substance adhered to its former view and
reiterated its previous ruling. In its findings of fact it pointed out
the importance of the connection at Selma, the admissions to that
eflfect made by the railroad and the fact that that connection afforded
the principal means of travel between the eastern and western parts
of the state. The grounds relied upon in the exception to show that
an extension of the run of either of the local trains from Rocky
Mount to Selma, as previously ordered, was impracticable, were re-
viewed and found to be without foundation. The trains which it was
alleged afforded adequate means for connection between the western
and eastern part of the state, irrespective of the connection formerly
existing at Selma by train No. 39, were analyzed, and as a matter
of fact the service afforded by these trains was held to be wholly
inadequate. Thus, for example, whilst it was found that the first
train relied upon — the one from Rocky Mount to Goklsboro, arriving
there at 6:50 in the morning — made a connection with a Southern
railway train moving from Selma via Raleigh to Greensboro, it was
pointed out that it was inadequate because the train had no con-
nection at its point of departure. Rocky Mount, with any incoming
train over the large area covered by the branch roads, which area,
it was stated, embraced a population of four hundred thousand peo-
ple. Hence it was found that, to use that train, any person in the
territory covered by the branch roads would be obliged to leave home
the day before and pass the night at Rocky Mount. The fourth
train relied upon, that is, a connection made by coast line No. 39 at
Selma under the new schedule with a later train over the Southern
road for Raleigh, was found to be but a connection with a Southern
freight train, having no passenger-car, but only a caboose. The
trains under the second, third, and sixth headings connecting at
Goklsboro or Selma in the afternoon and night, were found to make
a connection only with a slow train over the Southern road, doing a
mixed passenger and freight business, and which made no adequate
connection beyond Raleigh to the west. The objection to suggested
route No. 8, that is, via Weldon, and thence by the Seaboard Air
Line to Raleigh and points further west, was decided to be that it
was a longer route, more costly, and uncertain as to connections. The
remaining suggested routes were in effect disposed of upon similar
considerations to those above adverted to.
"Considering the operation of an extra train from Rocky Mount
to Selma or the extension of the run of one of the branch trains as
directed in the previous order, and the objection that a loss would be
entailed in the operating expenses for such train or trains, the com-
mission treated that fact as immaterial, because it found as a matter
of fact that the total receipts of the coast line in North Carolina,
taken from business in that state, were sufficiently remunerative,
Dec. '04.] N. C. Corp. Com. v. Atlantic Coast L. R. Co. 667
and therefore that even if the train was operated at a loss, as that
loss would not reduce the total earnings below what was an adequate
remuneration for the whole business, the order would not take the
property of the road without due process of law. Summing up its
conclusions, the commission said:
" 'The commission is of the opinion that the facilities given
heretofore by the Atlantic Coast Line Company to the traveling
public should not be lessened; that the connection furnished passen-
gers from the Washington branch, the Norfolk and Carolina branch,
the Plymouth branch, and the Nashville branch with No. 135, South-
ern railway passenger train at Selma, and also for all points between
Eocky Mount and Selma for nearly ten years, should be restored; that
if this cannot be done by the Atlantic coast line train No. 39, as for-
merly, on account of this train being heavier, containing usually one
or more extra express cars, and in all usually ten or more cars, and on
account of increase in business between Eichmond and Selma, which
necessitates longer stops, then other facilities should be furnished
by the Atlantic Coast Line Company; that this connection, which
was the principal outlet for passengers from eastern Carolina to
Selma and other Southern railway points for the last ten years,
instead of being abandoned should be made permanent and certain;
and that this result be accomplished by carrying out the order here-
tofore made in this court. It is ordered, therefore, that the excep-
tions be, and they are hereby, overruled.'
"The coast line, as authorized by statute, appealed to the superior
court of Wake county, city of Ealeigh, and the case was there tried
de novo before a court and jury. The jury, under the instructions
of the court, considered and responded to the eight questions, which
follow:
*' '1. Is it practicable for train No. 39 of the Atlantic coast line
railroad, due to arrive at Selma at 2:50 P. M., to make connection
at Selma with train No. 135, westbound, of the Southern railway,
due to leave Selma at 2:25 P. M.f Answer. No.
" '2. Is it practicable to make said connection by extending the
run of the Plymouth train daily from Plymouth to Selma and return,
and, if so, what would be the additional expense? Answer. No.
" '3. Is it practicable to make said connection by the use of the
Spring Hope train, and, if so, what would be the additional expense?
Answer. No.
" '4. In order to make such connection would defendant company
have to run an additional train on its main line from Kocky Mount
to Selma t Answer. Yes.
" '5. Is it practicable for said train to safely run the schedule pre-
scribed in plaintiff's order, having due regard to the number of
trains and number of stops, on defendant 's main line from Eocky
Mount to SelmaT Answer. Yes.
" '6. What would be the daily cost of operating such train from
Rocky Mount to Selma and return t Answer. Forty dollars.
668 American State Reports, Vol. 115. [N. Carolina,
** *7. What would be the probable daily receipts from such train?
Answer. Twenty-five dollars.
" '8. Is it reasonable and proper that, for convenience of the
traveling public, the defendant company should be required to make
such connection t Answer. Yes.'
"The answers to the first four questions were the result of per-
emptory instructions by the court, and the responses to the last
four were deduced by the jury from the testimony submitted to
its consideration.
"The court granted the prayer of the Atlantic coast line to that
effect, and rendered judgment on the verdict in its favor. The
corporation commission was held to be without power 'to interfere
with the right of railway companies to regulate for themselves the
time and manner in which passengers and property should be trans-
ported,' provided only such companies complied with the existing
statutory direction 'to run one passenger train at least each way
over its line every week day.' On appeal the supreme court of North
Carolina reversed the judgment. The facts found by the corporation
commission were reiterated and it was held that error had been com-
mitted by the court below in instructing the jury to give a negative
response to the first three propositions. Indeed, it was declared that
the only essential proposition submitted to the jury was the eighth,
which required it to be determined whether the connection at Selma
was necessary for the public convenience. Treating the facts found
by the commission as sustaining the conclusion reached by that body,
it was decided that the commission had power to make the order,
and that the exercise of the authority was not repugnant either to
the constitution of the United States or of the state. Notwithstand-
ing the finding of facts made concerning the means by which the
connection at Selma was to be performed, the court construed the
order of the commission as not having been solely based
upon the means of performance referred to in the findings,
and as embracing not only a choice of the methods referred to
therein, but any other which the coast line might choose to adopt,
provided only it accomplished the purpose of the order. But whilst
thus, from one point of view, treating the order of the commission so
as to render it unnecessary to pass upon the particular methods
for making the connection at Selma referred to in the findings, the
court yet reviewed the means of performance therein stated. In
doing so it was decided that although to execute the order of the
commission it might be imperative for the coast line to operate at
a pecuniary loss a new train from Rocky Mount to Selma, or the
extension, with like result, of the movement of one or the other of
the branch trains from Eocky Mount to Selma, no violation of any
right of the coast line protected by the constitution of the United
States or of the state would arise. This was based upon the find-
ing by the court that the average net earning of the railroad from its
Dec. '04.] N. C. Corp. Com. v. Atlantic Coast L. R. Co. 669
business in North Carolina was of such a character that an ade-
quate remuneration would remain after allowing for any possible
loss which might arise from operating either of the trains in ques-
tion: 137 N. C. 14, 49 S. E. 191.
"All the assignments of error challenge the correctness of the
decision below on the ground of its repugnancy to the due process
or equal protection clauses of the fourteenth amendment. The ele-
mentary proposition that railroads, from the public nature of the
business by them carried on and the interest which the public have
in their operation, are subject, as to their state business, to state
regulation, which may be exerted either directly by the legislative
authority or by administrative bodies endowed with power to that
end, iff not and could not be successfully questioned, in view of the
long line of authorities sustaining that doctrine: Chicago B. & Q. R.
Co. v. Iowa (Chicago, B. & Q. E. Co. v. Cutts), 94 U. S. 155, 24 L. ed.
94; Peik v. Chicago & N. W. R. Co., 94 U. S. 164, 24 L. -ed. 97; Chi-
cago, M. & St. P. R. Co. V. Ackley, 94 U. S. 179, 24 L. ed. 99; Winona
& St. P. R. Co. v. Blake, 94 U. S. 180, 24 L. ed. 99; Stone v. Wiscon-
sin, 94 U. S. 181, 24 L. ed. 102; Ruggles v. Illinois, 108 U. S. 526,
2 Sup. Ct. Rep. 832, 27 L. ed. 812; Illinois C. R. Co. v. Illinois, 108 U.
S. 541, 2 Sup. Ct. Rep. 839, 27 L. ed. 818; Stone v. Farmers' Loan &
T, Co., 116 U. S. 307, 6 Sup. Ct. Rep. 334, 388, 1191, 29 L. ed. 636;
Stone v. Illinois C. R. Co., 116 U. S. 347, 6 Sup. Ct. Rep. 348, 29 L. ed.
650; Stone v. New Orleans & N. E. R. Co., 116 U. S. 352, 6 Sup. Ct.
Rep. 349, 29 L. ed. 651; Dow v. Beidelman, 125 U. S. 680. 1 Inter.
Com. Rep. 56, 8 Sup. Ct. Rep. 1928, 31 L. ed. 841; Chnrlotte, C. &
A. R. Co. v. Gibbes, 142 U. S. 386, 12 Sup. Ct. Rep. 255, 35 L. ed.
1051; Chicago & G. T. R. Co. v. Wellman, 143 U. S. 339, 12 Sup. Ct.
Rep. 400, 36 L. ed. 176; Pearsall v. Great Northern R. Co., 161 U.
8. 646, 16 Sup. Ct. Rep. 705, 40 L. ed. 838; Louisville & N. R. Co. v.
Kentucky, 161 U. 8. 677, 16 Sup. Ct. Rep. 714, 40 L. ed. 849; Wiscon-
sin, M. & P. R. Co. V. Jacobson, 179 U. S. 287, 21 Sup. Ct. Rep. 115,
45 L. ed. 194; Minneapolis & St. L. R. Co. v. Minnesota, 186 U. S. 257,
22 Sup. Ct. Rep. 900, 46 L. ed. 1151; Minneapolis & St. L. R. Co. v.
Minnesota, 193 U. S. 53, 24 Sup. Ct. Rep. 396, 48 L. ed. 614; Chicago,
B. & Q. R. Co. V. Illinois, 200 U. 8. 561, 605, 26 Sup. Ct. Rep. 341, 50
L. ed. 596; Atlantic Coast Line R. Co. v. Florida, 203 U. 8. 2.56, 27
Sap. Ct. Rep. 108; Seaboard Air Line R. Co. v. Florida, 203 U. 8.
261, 27 Sup. Ct. Rep. 109. Accepting this general rule, the assign-
ments of error rest upon the hypothesis that the order which the
court below enforced was so arbitrary and unreasonable in its char-
acter as to transcend the limits of regulation, and to be in effect
a denial of due process of law, or a deprivation of the equal protec-
tion of the laws.
"As the public power to regulate railways and the private right
of ownership of such pro|)crty coexist and do not the one destroy
the other, it has been settled that the right of ownership of railway
670 American State Reports, Vol. 115. [N. Carolina,
property, like other property rights, finds protection in constitutional
guaranties, and, therefore, wherever the power of regulation is ex-
erted in such an arbitrary and unreasonable way as to cause it to be
in effect not a regulation, but an infringement upon the right of
ownership, such an exertion of power is void because repugnant to
the due process and equal protection clauses of the fourteenth amend-
ment: Stone V. Farmers' Loan & T. Co., 116 U. S. 307, 6 Sup. Ct.
Rep. 334, 388, 1191, 29 L. ed. 636; Chicago, M. & St. P. R. Co. v.
Minnesota, 134 U. S. 418, 3 Inter. Com. Rep. 209, 10 Sup. Ct. Rep,
462, 33 L. ed. 970; Chicago & G. T. R. Co. v. Wellman, 143 U. S. 339,
12 Sup. Ct. Rep. 400, 36 L. ed, 176; Reagan v. Farmers' Loan & T.
Co., 154 U. S. 362, 399, 4 Inter. Com. Rep. 560, 14 Sup. Ct. Rep. 1047,
38 L. ed. 1014; St. Louis & S. F. R. Co. v. Gill, 156 U. S. 649, 15 Sup.
Ct. Rep. 484, 39 L. ed. 567; Chicago, B. & Q. R. Co. v. Chicago, 166
IT. S. 226, 17 Sup. Ct. Rep. 581, 41 L. ed. 979; Smyth v. Ames, 169
IT. S. 466, 18 Sup. Ct. Rep. 418, 42 L. ed. 819; Chicago, M. & St. P,
R. Co. V. Tompkins, 176 U. S. 167, 20 Sup. Ct. Rep. 336, 44 L. ed. 417;
Minneapolis & St. L. R. Co. v. Minnesota, 186 U. S. 257, 22 Sup. Ct.
Rep. 900, 46 L. ed. 1151; Chicago, B. & Q. R. Co. v. Illinois, 200 U,
S. 561, 26 Sup. Ct, Rep, 341, 50 L. ed. 596. The result, therefore, is
that the proposition relied upon is well founded if it be that the
order which the court below enforced was of the arbitrary and
unreasonable character asserted.
"In coming to consider the question just stated, it must be
borne in mind that a court may not, under the guise of protecting
private property, extend its authority to a subject of regulation not
within its competency, but is confined to ascertaining whether the
particular assertion of the legislative power to regulate has been
exercised to so unwarranted a degree as, in substance and effect, to
exceed regulation, and to be equivalent to a taking of property with-
out due process of law, or a denial of the equal protection of the
laws. We shall not, in analyzing the case, undertake to review in
their order the ten propositions of error found in the record and
reproduced in the briefs of counsel, as each proposition, although
numbered separately, but reiterates grounds of error to be found in
the others. In other words, the various grounds of error are so
interblended in the several propositions as to render it impossible
to treat one as distinct from the other. All the grounds, however,
which the propositions assert as establishing the arbitrary and un-
reasonable character of the order complained of may be embraced
under four general headings, which we proceed to dispose of.
"1, That the order was arbitrary and unreasonable, because beyond
the scope of the authority delegated to the corporation commission by
th€ state law.
"As this proposition involves no federal questions, and is concluded
by the judgment entered below, we put the subject out of view. And,
although not cognate to the proposition, to clear the way for the con-
Dec. '04.] N. C. Corp. Com. v. Atlantic Coast L. R. Co. 671
sideration of the substantial issues, we also put aside the suggestion
made in argument, that, as the Southern railway, by its change of
schedule, originally rendered the connection at Selma impossible, there-
fore that road should have been compelled to restore the connection
by a modification of the schedule or schedules of the trains by it oper-
ated. We put this suggestion aside because it does not seem to have
been seriously urged in the court below, and besides is so directly re-
futed by the findings that we think it requires no further notice.
"2. The order was arbitrary and unreasonable, because, when prop-
erly considered, it imposed upon the coast line a duty foreign to its
obligation to furnish adequate facilities for those traveling upon its
road.
"This rests upon the assumption that, as the order was based not
Jipon the neglect of the coast line to afford facilities for travel over its
own road, but because of the failure to furnish facilities to those
traveling on the coast line who desTred also to connect with and travel
on the Southern road, therefore the order was in no just sense a regula-
tion of the business of the coast line. This reduces itself to the con-
tention that, although the governmental power to regulate exists in
the interest of the public, yet it does not extend to securing to the
public reasonable facilities for making connection between different
carriers. But the proposition destroys itself, since at one and the
same time it admits the plenary power to regulate, and yet virtually
denies the efficiency of that authority. That power, as we have seen,
takes its origin from the quasi public nature of the business in which
the carrier is engaged, and embraces that business in its entirety;
which, of course, includes the duty to require carriers to make reason-
able connections with other roads, so as to promote the convenience of
the traveling public. In considering the facts found below as to the
connection in question — that is, the population contained in the large
territory whose convenience was subserved by the connection, and the
admission of the railroad as to the importance of the connection — we
conclude that the order in question, considered from the point of view
of the requirements of the public interest, was one coming clearly within
the scope of the power to enforce just and reasonable regulations.
"3. That the facilities a/forded the public by the railroad were of
$uch a character as to demonstrate that the extra burden which would
result from the compliance with the order was wholly arbitrary and un-
reasonable.
"That rests upon the assumption that as there were several exist-
ing daily connections between trains of the coast line .and those of the
Southern at Selma, which might be availed of by those desiring to travel
from eastern to western North Carolina and beyond, and as, besides,
the proof established that another connection operating the same re-
sult was afforded by way of Weldon and the Seaboard Air Line to
Baleigh and thence farther west, therefore it was both arbitrary and
unreasonable to superadd an unnecessary connection. Conceding, as
672 American State Reports, Vol. 115, [N. Carolina,
must be done, that the nature and extent of the existing facilities fur-
nished by a carrier for the public convenience are essential to be con-
sidered in determining whether an order directing an increase of such
facilities is just and reasonable, and that the deficiency of facilities
must clearly appear, to justify an order directing the furnishing of
new and additional facilities, we think the proposition here relied on
to be without merit. Its error arises from assuming that adequate
facilities were afforded at Selma or via Weldon and the Seaboard
without reference to the order complained of. In view of the facts as
to the connections at Selma and the Weldon route, found by the com-
mission and reiterated by the court, wh'ch we have previously stated,
and which we accept, we cannot escape drawing for ourselves the con-
clusion deduced both by the commission and the court below that the
connections relied on were wholly inadequate for the public conve-
nience, and, therefore, a state of things existed justifying the order.
"4. That, however otherwise just and reasonable tlie order may have
been, it is inherently unjust and unreasonable because of the nature of
the burden which it necessarily imposes.
"This proposition is based on the hypothesis that the order, by neces-
sary intendment, directed the coast line to operate an add'tional train,
although such train could not be operated without a daily pecun'ary
loss. The premise upon which this proposition rests would seem to
be irrelevant, since the court below, in one aspect of its opinion, treated
the order of the commission as not requiring the operation of an ex-
tra train from Rocky Mount to Selma. Yet, as the facts found by the
commission and which were affirmed by the court would indicate that it
was considered that the operation of such train was the most direct
and efficient means for making the ordered connection, and as the
court considered and passed upon the duty of the railroad to comply
with the order, even if to do so it became necessary to operate the extra
train at a loss, we think the proposition relied upon is open and must
be decided. The contention is that the fact that some loss would re-
sult from the requirement that the extra train be operated, in and of
itself, conclusively establishes the unreasonableness of the order, and
demonstrates that to give it effect would constitute a taking of prop-
erty without due process of law, in violation of the fourteenth amend-
ment. Conclusive support for this contention, it is insisted, is afforded
by the doctrine upheld in Smyth v. Ames, 169 U. S. 466, 18 Sup. Ct.
Rep. 418, 42 L. ed. 819, and the cases which preceded that decision.
The cases relied upon, however, only involved whether a general scheme
of maximum rates imposed by state authority prevented the railroads
from earning a reasonable compensation, taking into view all proper con-
siderations as to the value of the property and the cost of operation,
and, if so, whether the enforcement of rates so unreasonably low would
be unjust and unreasonable, and, therefore, be confiscation — that is,
a taking of property without due process of law, in violation of the
constitution of the United States. The principle upon which the cases
Dec. '04.] N. C. Corp. Com. v. Atlantic Coast L. R, Co. 673
in question proceeded was thus summed up by Mr. Justice Harlan,
delivering the opinion of the court in Smyth v. Ames, 169 U. S. 466,
18 Sup. Ct. Rep. 418, 42 L. ed. 819: 'A state enactment, or regulatiors
made under the authority of a state enactment, establishing rates for
the transportation of persons or property by railroad that wiM not
admit of the carrier earning such compensation as, under all the cir-
cumstances, is just to it and to the public, would deprive such carrier
of its property without due process of law, and deny to it the equal
I)rotect)on of the laws, and would, therefore, be repugnant to the four-
teenth amendment of the constitution of the United States.'
"But this case does not involve the enforcement by a state of a
general scheme of maximum rates, but only whether an exercise of state
authority to compel a carrier to perform a particular and specified
duty is so inherently unjust and unreasonable as to amount to the depri-
i«^ation of property without due process of law or a denial of the
equal protection of the laws. In a case involving the validity of an
oivler enforcing a scheme of maximum rates, of course the finding that
the enforcement of such scheme will not produce an adequate return
for the operation of the railroad, in and of itself demonstrates the un-
reasonableness of the order. Such, however, is not the case when the
question is as to the validity of an order to do a particular act, the do-
ing of which does not involve the question of the profitableness of the
operation of the railroad as an entirety. The difference between the
two cases is illustrated in St. Louis & S. P. R. Co. v. Gill, 156 U. S.
649, 1.5 Sup. Ct. Rep. 484, 39 L. ed. .567, and Minneapolis & St. L. E.
Co. v. Minnesota, 186 U. S. 257, 22 Sup. Ct. Rep. 900, 46 L. ed. 1151,
But even if the rule applicable to an entire rate scheme were to be
here applied, as the findings made below as to the net earnings con-
strain us to conclude that adequate remuneration would result from the
general operation of the rates in force, even allowing for any loss
occasioned by the running of the extra train in question, it follows
that the order would not be unreasonable, feven if tested by the doctrine
announced in Smyth v. Ames and kindred cases.
"It is insisted that, although the case be not controlled by the doc-
trine of Smyth v. Ames, nevertheless the arbitrary and unreasonable
character of the order results from the fact that to execute it would
require the operation of a train at a loss, even if the result of the loss
so occasioned would not have the effect of reducing the aggregate net
earnings below a reasonable profit. The power to fix rates, it is urged,
in the nature of things, is restricted to providing for a reasonable and
just rate, and not to compelling the performance of a service for such
a rate as would moan the sustaining of an actual loss in doing a par-
ticular service. To hold to the contrary, it is argued, wouhl be to ad-
mit that a regulation might extend to directing the rendering of a
service gratuitously or the performance of first one service and then
another and still another, at a loss, which could be continued in favor
of selected interests until the point was reached where, by compliance
Am. St. Rep., Vol. 115 — i3
674 American State Reports, Vol. 115. [N. Carolina,
with the last of such multiplied orders, the sum total of the revenues
of a railroad would be reduced below the point of producing a reason-
able and adequate return. But these extreme suggestions have no re-
lation to the case in hand. Let it be conceded that if a scheme of
maximum rates was imposed by state authority, as a whole adequately
remunerative, and yet that some of such rates were so unequal as to
exceed the flexible limit of judgment which belongs to the power to
fix rates, that is, transcended the limits of just classification, and
amounted to the creation of favored class or classes whom the carrier
was compelled to serve at a loss, to the detriment of other class or
classes upon whom the burden of such loss would fall, that such legis-
lation would be so inherently unreasonable as to constitute a viola-
tion of the due process and equal protection clauses of the fourteenth
amendment. Let it also be conceded that a like repugnancy to the
constitution of the United States would arise from an order made in
the exercise of the power to fix a rate when the result of the enforce-
ment of such order would be to compel a carrier to serve, for a wholly
inadequate compensation, a class or classes selected for legislative favor,
even if, considering rates as a whole, a reasonable return from the
operation of its road might be received by the carrier. Neither of these
concessions, however, can control the case in hand, since it does not
directly involve any question whatever of the power to fix rates and the
constitutional limitations controlling the exercise of that power, but is
concerned solely with an order directing a carrier to furnish a facility
which it is a part of its general duty to furnish for the public con-
venience. The distinction between an order relating to such a sub-
ject and an order fixing rates coming within either of the hypotheses
which we have 8j;ated is apparent. This is so because, as the primal
duty of a carrier is to furnish adequate facilities to the public, that
duty may well be compelled, although, by doing so, as an incident
some pecuniary loss from rendering such service may result. It fol-
lows, therefore, that the mere incurring of a loss from the performance
of such a duty does not, in and of itself, necessarily give rise to the
conclusion of unreasonableness, as would be the ease where the whole
scheme of rates was unreasonable, under the doctrine of Smyth v.
Ames, or under the concessions made in the two propositions we have
stated. Of course, the fact that the furnishing of a necessary facility
ordered may occasion an incidental pecuniary loss is an important
criterion to be taken into view in determining the reasonableness of
the order, but it is not the only one. As the duty to furnish necessary
facilities is coterminous with the powers of the corporation, the obliga-
tion to discharge that duty must be considered in connection with the
nature and productiveness of the corponkte business as a whole, the
character of the services required, and the public need for its perform-
ance. A similar contention to the one we are considering was adversely
passed upon in Wisconsin, M. & P. E. Co. v. Jacobson, 179 U. S. 287, 21
Sup. Ct. Rep. 115, 45 L, ed. 194. That case involved the enforcement
April, 1906.] Bynum v. Wicker. 675
of an order of a state railroail commission directing a railroad company
to acquire the necessary land and make a track connection for the pur-
pose of affording facilities for the interchange of business with an-
other road. The court, after holding that the order was not so unjust
and unreasonable as to be repugnant to the constitution of the United
States, disposed of the contention that the order was void because com-
pliance with it would necessitate the incurring of expense, by saying
(179 U. S. 302, 21 Sup. Ct. Eep. 120, 45 L. ed. 201): 'Although to
carry out the judgment may require the exercise by the plaintiff in
error of the power of eminent domain, and will also result in some,
comparatively speaking, small expense, yet neither fact furnishes an
answer to the application of defendant in error: Worcester v. Norwich
& W, B. Co., 109 Mass. 103 ; People v. Dutchess & C. R. Co., 58 N. Y.
152; People v. Boston & A. R. Co., 70 N. Y. 569; People v. New York,
L. E. & W. R. Co., 104 N. Y. 58, 58 Am. Eep. 484; 9 N. E. 856.'
"AflRrmed."
BYNUM V. WICKER.
[141 N. C. 95, 53 S. E. 478.]
TENANCY BY ENTIEETIES— Conveyance by Husband
Alone. — Although a husband may, by deed in which his wife does
not join, convey an estate by entireties, and thus entitle the grantee
to hold during the grantor's life, such deed does not give the gran-
tee a right to cut timber on the land conveyed, (p. 676.)
TENANCY BY ENTIBETIES — Conveyance by Husband
Alone — Estoppel. — If a husband, by deed in which his wife does not
join, conveys an estate held by them by entireties, both he and she
are estopped during their joint lives from interfering with the
possession of the land thus granted and conveyed, (p. 676.)
U. L. Spence, for the plaintiff.
Seawell & Mclver, for the defendant.
•* CLARK, C. J. Edward Fields and wife were tenants
by entirety of the tract in question. Edward Fields, without
the joinder of his wife, mortgaged the land to John R. Lane.
The land was sold under the power of sale in the mortgage
and the plaintiff holds by mesne conveyance from the pur-
chaser at such sale. This is a proceeding for an injunction
•• against the defendants, who are the agents of Edward
Fields and his wife, to prevent their cutting the timber on
said land.
676 American State Reports, Vol. 115. [N. Carolina,
This estate by entirety is an anomaly, and it is perhaps an
oversight that the legislature has not changed it into a co-
tenancy, as has been done in so many states. This not hav-
ing been done, it still possesses here the same properties and
incidents as at common law: Long v. Barnes, 87 N. C. 329;
West V. Aberdeen etc. R. R., 140 N. C. 620, 53 S. E. 477.
At common law "the fruits accruing during their joint lives
would belong to the husband" (Simonton v. Cornelius, 98
N. C. 433, 4 S. E. 38), hence the husband could mortgage or
convey it during the term of their joint lives; that is, the right
to receive the rents and profits; but neither could encumber
it or convey it so as to destroy the right of the other, if
survivor, to receive the land itself unimpaired. "He cannot
alien or encumber it, if it be a freehold estate, so as to pre-
vent the wife or her heirs, after his death, from enjoying it,
discharged from his debts and engagements": 2 Kent's Com-
mentaries, 133 ; Bruce v. Nicholson, 109 N. C. 202, 26 Am. St.
Rep. 562, 13 S. E. 790.
It is clear, therefore, that the timber being a part of the
freehold, the plaintiff would have no right to cut the timber,
claiming under a conveyance from the husband alone. The
husband having conveyed his interest is estopped from inter-
fering with the possession of the premises during the joint
lives of himself and wife, and of course so is the wife.
Whether, if he should be survivor, his deed is valid as a con-
veyance of his interest by survivorship is a point as to which
the authorities are conflicting, but we are not now called
upon to decide that point, as it is not before us.
In refusing an injunction to the hearing there was error.
Tenancies by the Entirety are discussed in the note to Hardenberg
V. Hardenberg, 18 Am. Dec. 377. By the common law such a ten-
ancy is created when the "grantees in a deed are husband and wife,
unless a contrary intent is manifest. This rule, however, has been
abrogated in many states: See Wilson v. Frost, 186 Mo. 311, 105
Am. St. Eep. 619; McLaughlin v. Rice, 18.5 Mass. 212, 102 Am. St.
Rep. 339; Boland v. McKowen, 189 Mass. 563, 109 Am. St. Rep. 663.
The husband has the right to use an estate by entireties during
coverture, but he cannot alienate it: Phelps v. Simons, 159 Mass.
415, 38 Am. St. Rep. 430. Therefore the wife has no right to a share
of the crops growing on the land: Morrill v. Morrill, 138 Mich. 112,
110 Am. St. Rep. 306; and his transfer of personalty held by entire-
ties vests in the transferee an estate for the life of the husband,
but cannot deprive the wife of her right of survivorship: Phelps V.
Simons, 159 Mass. 415, 38 Am. St. Bep. 430.
April, '06.] Blackwell v. Mutual Reserve etc. Assn. 677
BLACKWELL v. MUTUAL RESERVE FUND LIFE AS-
SOCIATION.
[141 N. C. 117, 53 S. E. 833.]
INSURANCE — Foreign Insurance Companies — Assets. — Assess-
ments to become clue a foreign life insurance company from policy-
holders residing within the state are not, when due, debts or choses
in action which such company can enforce therein, (p. 678.)
BECEIVEBS — Foreign Insurance Companies — Assets. — A re-
ceiver will not be appointed for a foreign insurance company when
it has no assets or property within the state, other than assessments
to become due against its policy holders therein, (pp. 679, 680.)
INSURANCE — Receivers. — If a contract of insurance expressly
provides that a certain percentage of the assessments thereon shall
be set apart for the purpose therein set forth, the court cannot,
through a receiver, compel the payment of an assessment to be ap-
propriated to the payment of plaintiff's claim in violation of the
terms of the contract and the rights of policy-holders, (p. 680.)
INSURANCE — Foreign Companies — Void Contracts of Insur-
ance.— A provision in an insurance policy that "this contract shall
be governed by, subject to, and construed only according to the
laws of the state of New York, the place of this contract being ex-
pressly agreed to be the home office of said association in the city
of New York," is void so far as its enforcement in the courts of an-
other is concerned, (p. 680.)
Guthrie & Guthrie, for the plaintiff.
Winston & Bryant and Hinsdale & Son, for the defendant.
^^^ CONNOR, J. Plaintiff sued to recover amount of
premiums paid defendant company, two thousand three hun-
dred and fourteen dollars, on account of assessments upon a
policy of twenty-five thousand dollars, which he allejres was
wrongfully and in violation of terms of the contract can-
celed by defendant. He remitted the excess over two thou-
sand dollars. After setting forth the facts upon which his
alleged cau.se of action is based, he alleges '*** that defend-
ant having, in compliance with tlie laws of this state, ap-
pointed an agent upon whom services of process could be
served, fraudulently and for the purpose of preventing suits
being brought in the courts of tl»e state, attempted to cancel
its power of attorney. That plaintiff's policy was issued while
said power of attorney was in force iiiul while defendant wsis
engaged in soliciting business and issuing policies in this state.
That defendant has now in force a large niunber of policies
issued to citizens and residents of this state and that it is
collecting assessments or premiums on said policies. That
678 American State Reports, Vol. 115. [N. Carolina,
for the purpose and with intent to defraud its North Caro-
lina policy-holders, defendant is taking from the state and
the jurisdiction of the courts its assets and property. That
the insurance commissioner of this state has prepared and
published a statement showing that the affairs of defendant
company are badly managed, that judgments against it for
large amounts are unpaid and outstanding. That from said
publication and other sources set out in his affidavits plain-
tiff believes that defendant company is insolvent or in im-
minent danger of insolvency. For the reasons and upon the
grounds thus set forth plaintiff asks that a receiver be ap-
pointed by the court to take into his possession a sufficient
amount of the property and assets of defendant in this state
to satisfy and discharge his claim, etc. An order was duly
issued directing defendant to show cause before the judge
presiding in the ninth judicial district why a receiver should
not be appointed as prayed, etc.
The defendant company on the return of said order filed
an answer, and affidavits in support thereof, denying the ma-
terial allegations contained in plaintiff's complaint and affi-
davits. Defendant also denied that it owned any property or
assets in this state, and averred that no person residing in
this state was indebted to it. That the payment of the
assessments made upon policy-holders was voluntary, and that
by the express terms of the policy, a copy of which is set out,
**® the holder assumes no personal liability for the payment
of said assessments. That by the terms of said policy failure
to pay the assessment works a forfeiture thereof, but im-
poses no other liability upon or against the holder. That
said assessments are due and payable at the home office of
defendant company in New York. It denies that it is in-
solvent or in imminent danger of becoming so, setting forth
a statement of its assets and liabilities. It avers that it can-
celed the power of attorney to its agent without any other
purpose than to cease doing business in the state arid with-
out any intent or purpose to defraud its creditors or policy-
holders. His honor, upon hearing the answer and affidavits,
declined to appoint a receiver. Plaintiff appealed.
In view of the admitted facts in regard to the property
rights, or rather absence of such rights, within the jurisdiction
of the courts of this state, we are relieved from the necessity
of discussing the affidavits in regard to the management and
solvency of the defendant company. Assuming that, upon the
April, '06.] Blackwell v. Mutual Reserve etc. Assn. 679
facts stated in the complaint, in the light of the decisions of
this court in which the same defendant was a party, plaintiff
has a valid cause of action, and assuming that defendant is
in danger of becoming insolvent, we find ourselves confronted
with the difficulty in granting the motion for a receiver by
the fact that the company has no assets within this state
which could be taken into possession of such receiver. The
only rights suggested by plaintiff in this connection are as-
sessments to become due hereafter from policy-holders resid-
ing in this state. These assessments will not be, when due,
debts or choses in action which the defendant could enforce.
"The levjdng of an assessment does not make a member a
*** debtor to the association, authorizing it to bring suit in
the event of his neglect or refusal to pay; the only effect of
the default is to relieve the association of its obligation to the
member": Cooley on Insurance Briefs, 1013; New York Ins.
Co. V. Stathan, 93 U. S. 24, 23 L. ed. 789 ; 2 IVIay on Insur-
ance, 3d ed., 341. The law, supported by authority, is thus
stated in Bacon on Benefit Societies, section 357: "In a con-
tract of life insurance there is generally no absolute under-
taking of the insured to pay the premiums or assessments,
and consequently no personal liability therefor. The pay-
ment of the premium or assessment is only a condition pre-
cedent of the liability of the company; the insured does not
promise to pay the premiums, and the company only prom-
ises to pay if it has received the agreed consideration. There-
fore the insured may pay or not as he pleases; he has the
perfect right to do either, and need give no excuse for his
choice. If he does not pay, the contract is ended." While
the court would be prompt to protect by any process within
its power the rights of a citizen against a foreign corpora-
tion and hold any property within its jurisdiction to meet
the demand when established by judgment, it will not do a
vain thing and send its officer to chase unsubstantial possi-
bilities. The only effect of the appointment of a receiver in
this case would be to embarrass and probably injure other
policy-holders, without any resultant benefit to plaintiff. If
the receiver demanded payment of an assessment and it was
refused, he could not enforce its payment — he having no other
right against the policy-holder than the defendant company
has. If he should seek to enjoin payment to the company,
he would be met with the ohstiicle that if the courts of this
state enjoined such payment, tlie policy would be avoided for
680 American State Repobts, Vol, 115. [N. Carolina,
nonpayment of assessment. If so declared avoided by the
company, this court would have no power to protect the pol-
icy-holder by mandamus or otherwise. "Without pursuing the
discussion further, it is manifest that no possible benefit could
accrue to the plaintiff, and *** much annoyance and injury
to innocent persons. "The liability of the members of the
mutual insurance companies upon their premium notes is not
increased by reason of the insolvency of the corporation and
the appointment of a receiver, since the receiver is merely
substituted in place of the directors of the company and vested
with their rights and powers and nothing more": Aid. on
Rec, sec. 372. The power of receiver to enforce assess-
ments made upon unpaid stock is based upon the fact that
the delinquent stockholder owes a debt to the company for
which it could maintain an action ; whereas for an assess-
ment upon an insurance policy, as we have seen, no action
could be maintained by the company. Again, it seems to be
established by the authorities cited in the well-considered
brief of defendant's counsel that such assessments as are
levied under the provisions of the policies issued by defend-
ant company are when paid impressed with a trust for the
benefit of the other policy-holders. The contract of insur-
ance expressly provides that a certain percentage of the as-
sessments shall be set apart for the purposes set forth there-
in. We could not, through a receiver, compel the payment
of an assessment to be appropriated to plaintiff's claim in vio-
lation of the terms of the contract and the rights of other
policy-holders. The plaintiff' has no lien or specific claim to
any portion of the assets of the company. This plaintiff, to-
gether with thousand's of others, has entered into a contract
of insurance with a corporation having no capital or assets
within reach of the courts of his state, and with but little, if
any, substantial guaranties of compliance with its contract.
By a very remarkable provision, which if read should have
put plaintiff upon notice, the contract declares that, "This
contract shall be governed by, subject to and construed only
according to the laws of the state of New York, the place of
this contract being expressly agreed to be the home office of
said association in the city of New York," is void so far as
the courts ^^^ of this state are concerned: Rev., see. 4806..
It seems from his account of the dealings between the com-
pany and himself that he has expended a considerable
amount of good money with a poor prospect of realizing any
April, '06.] Blackwell v. Mutual Reserve etc. Assn. 681
very substantial returns. The courts of this state in the
trial of his cause will adjudge his rights, but it seems that, as
others have been compelled to do, he must pursue his remedy
to reach assets of the defendant in the courts of New York.
"We do not entertain any doubt of the power of the courts of
this state, either by attachment or, in proper cases, the ap-
pointment of a receiver, to seize and retain any property of a
foreign corporation in this state and apply it to the payment
of debts due our citizens. The exercise of this power does not
involve winding up the affairs of the corporation. It is only
for the purpose of securing the fruits of the recovery. The
question is fully discussed by Mr. Justice Walker in Ilols-
houser v. Gold Hill Copper Co., 138 N. C. 248, 50 S. E. 650,
70 L. R. A. 183. We have examined the case of Mutual R.
F. L. Assn. V. Phelps, 190 U. S. 147, 23 Sup. Ct. Rep. 707, 47
L. ed. 987, cited by plaintiff. The only question decided upon
that appeal related to service of process and procedure. It is
true that the court of Kentucky appointed a receiver after
judgment in an action against this defendant. Whether
there was property other than assessments to become due does
not appear.
For the reasons set out, his honor's judgment must be
affirmed.
The Question of When it is Proper to Appoint a Receiver for a cor-
poration is discussed at length in the notes to Cameron v. Grove-
land Improvement Co., 72 Am. St. Eep. 29; Cortelyeu v. Hathaway,
64 Am. Dec. 482.
682 American State Reports, Vol. 115. [N. Carolina,
DOBBINS V. DOBBINS.
[141 N. C. 210, 53 N. E. 870.]
WITNESSES — Credibility of Question for Jury, — ^If there it
a disputed fact depending for its proof upon the testimony of wit-
nesses, the credibility of the witnesses is always an open question
for the jury, and this is so though the testimony may be all one side
and all tend one way, and in this event the judge may charge the
jury if they find the facts to be as testified by the witnesses, to
answer the issue in a certain way, but not, upon the evidence, so
to answer it, as by such charge he passes upon the credibility of
the witnesses, (pp. 683, 684.)
COTENANCY — ^Adverse Possession. — Tenants in common hold
their estates by several and distinct titles, but by unity of posses-
sion, and an entry by one inures to the benefit of all, not only as
concerns themselves, but also as to strangers, (p. 685.)
COTENANCY — Ouster — Adverse Possession. — There may be
an entry or possession of one cotenant amounting to an actual ouster
so as to enable his cotenant to bring ejectment against him, but it
must be by some clear, positive and unequivocal act equivalent to
an open denial of his right and the putting him out of the seisin,
and such an actual ouster followed by possession for the requisite
time will bar the cotenant 's entry, (p. 685.)
COTENANCY. — Ouster is a disseisin by one cotenant of hig
cotenant, the taking of possession by one and holding it against
the other by an act or series of acts which indicate a decisive in-
tent and purpose to occupy the premises exclusively and in denial
of the rights of all others, (p. 686.)
COXENANCY — Ouster — Adverse Possession. — An exclusive,
quiet, and peaceable possession by a tenant in common and those
under whom he claims for more than twenty years raises a legal
presumption of an actual ouster of the other cotenant 's possession,
not at the end of the period, but at its beginning, and that the
subsequent possession was adverse to the cotenants who were out
of possession, which defeats their right to partition or to bring an
action in ejectment, (pp. 688, 689.)
COTENANCY — Ouster — ^Adverse Possession. — Disability of a
Cotenant during the period of more than twenty years, when the
possession is quietly and exclusively held by his cotenant, and those
under whom he claims, cannot be permitted to rebut the presump-
tion of law as to an ouster of the former, when the possession com-
menced in the lifetime of their ancestor from whom they claim,
and who was at the time under no disability, (p. 689.)
Armfield & Turner and J. B. Armfield, for the plaintiffs.
Furehes, Coble & Nicholson, for the defendants.
*** "WALKER, J. Proceeding for partition of land, which
was transferred from the clerk, upon the issue of sole seisin
raised by the pleadings. The land, which consisted of two
April, 1906.] Dobbins v. Dobbins. 683
tracts, the "Home" and "Holman" tracts, was originally
owned by Milas Dobbins, who died in 1863, leaving two sons,
Alfred and Augustus Dobbins. Alfred died September 25,
1878, leaving three children by his first marriage, George,
Fannie and John, and two by his second marriage, David (one
of the plaintiffs) , born January 22, 1875, and Una May, born
April 12,1878, and married to R. E. Stafford April 9, 1901.
She died in August, 1905, leaving a child, R. E. Stafford, Jr.,
then three or four years old, who is the other plaintiff. Au-
gustus Dobbins, the other son of Milas Dobbins, took pos-
session of the land when his father died, and has remained
in possession until his death in 1901, when his widow, the
defendant, Sarah Dobbins, continued in possession of the
Home tract to the bringing of this suit, and of the Holman
tract until September 3, 1903, .her husband having devised
all of the land to her by his will, which was duly admitted
to probate" and introduced in evidence. On September 3,
1903, she conveyed the Holman tract to the defendant,
George B. Nicholson, trustee, for the use and benefit of the
other defendants, B. F. Long, D. M. Furches and A. L. Coble.
The trustee took possesion on that day and has held it ever
since. The court admitted the evidence of the probate of a
paper writing purporting to be the will of Milas Dobbins,
the appointment of the adminstrator with the will annexed
and his qualification. *** The will was not put in evidence,
nor did the nature of its contents in any way appear. Plain-
tiff objected to this testimony.
At the conclusion of the testimony "the court instructed
the jury that, upon the evidence, the plaintiffs were not en-
titled to recover and they should answer the issue *no. ' "
Plaintiffs excepted. There was a verdict and judgment ac-
cordingly and plaintiffs appealed.
When the plaintiffs had rested, there was no evidence of any
possession of the lands by the defendants. The only testi-
mony in regard to it came from the defendants' witnesses,
and the court could not properly give a peremptory instruc-
tion to find for the defendants, when the burden of proof had
shifted to them by the plaintiff's proof of title in ^lilas Dob-
bins and the descent from him to the plaintiffs and his other
heirs mentioned in the case. When there is a disputed fact
, depending for it^i proof upon the testimony of witnesses, the
684 American State Reports, Vol. 115. [N. Carolina,
credibility of the witnesses is always an open question for the
jury, and this is so, though the testimony may be all on one
side and all tend one way. In the latter case, the judge may
charge the jury if they find the facts to be as testified by the
witnesses to answer the issue in a certain way but not, upon
the evidence, so to answer it, as by such a charge he passes
upon the credibility of the witnesses. We disapproved a sirai-
•lar instruction at this term in Smith v. Cashie etc. Lumber Co.,
140 N. C. 375, 53 N. E. 233, 5 L. R. A., N. S., 439, and such an
instruction has been condemned in many previous decisions
besides being expressly forbidden by statute. "No judge, in
giving a charge to the petit jury, either in a civil or a crim-
inal action, shall give an opinion whether a fact is fully or
sufficiently proven, such matter being the true office and prov-
ince *** of the jury; but he shall state in a plain and cor-
rect manner the evidence given in the case, and declare and
explain the law arising thereon": Code, sec. 413; Revisal,
sec. 535. We should be compelled to order a new trial for this
error, if it did not clearly appear that the exception to this
instruction was not based upon this ground, but was intended
to raise the question whether the bare possession of the de-
fendants (nothing else being proved) was in law sufficient to
bar the plaintiff's right of entiy, and to put the case upon its
real merits. There is no reference made in the brief of the
plaintiffs' counsel to any error in the charge other than the
one relating to the character of the defendants' possession and
its legal sufficiency to defeat the plaintiffs' recovery. In this
case, the error in the form of the instruction was not perhaps
very material, and seems to have been so regarded by the
plaintiffs' counsel, as there was no serious controversy as to
the facts, and a new trial on that ground would be of little
or no avail. Before leaving this part of the case, we will
remark that the case on appeal was not prepared or revised
by the presiding judge, who is always careful and painstaking,
and we infer that the charge as given was in proper form and
that it was worded by counsel, as it is now, inadvertently, the
purpose being to present the real question involved without
paying much, if any, heed to matters of form. We will there-
fore consider the case, as counsel have done in their briefs, as
presenting the single question whether the defendants' proof
was sufficient in itself to toll the plaintiffs' entry and defeat
their action.
April, 1906.] Dobbins v. Dobbins. 685
This question has been before this court so often that it
ought not now to be difficult of solution. We undertook at
the last term, as our predecessors had frequently done before,
to state the principle of law by which such cases are governed,
gome misunderstanding has arisen by failing to distinguish
between the doctrine of adverse possession as applied to the
relation of tenants in common, and as applied in ^** ordin-
ary cases, where there is no such relation, and consequently
no privity or fealty as between the parties. The distinction
between an actual and a presumed ouster has, perhaps, not
been sufficiently taken into account. We will endeavor again
to "run and mark the line," and to restate the principle of ad-
verse possession as applicable to tenants in common. Such
tenants hold their estates by several and distinct titles, but
by unity of possession, because none of them can know his own
severalty, or, as Littleton puts it, no one of them can tell
which part is his own and, for this reason, they occupy
promiscuously, the only unity being that of possession: 2
BIk. 192. An entry or possession by one of the tenants inures
to the benefit of his cotenants, not only as concerns themselves,
but also as to strangers: Locklear v. Bullard, 133 N. C. 260,
45 S. E. 580; Carothers v. Dunning's Lessee, 3 Serg. & R. 373.
There may be an entry or possession of one tenant in
common which may amount to an actual ouster, so as to en-
able his cotenant to bring ejectment against him, but it must
be by some clear, positive and unequivocal act equivalent to
an open denial of his right and to putting him out of the
seisin. It is needless to do more than to state the simple
proposition that such an actual ouster followed by possession
for the requisite time will bar the cotenant's entry. But the
law goes further, and the rule has been well settled for many
years in this state, as it had been before in England, that when
one tenant in common has been in undisturbed possession and
use of the land for twenty years, in an ejectment brought
against him by his cotenant, the jury will be directed to pre-
sume an actual ouster when the possession was first taken
and consequently to find a verdict for the defendant. Ouster,
or dispossession, says Blackstone, is a wrong or injury that
carries with it the assertion of possession, for thereby the
wrongdoer gets into actual occupation of the land or heredita-
ment, and obliges him that hath a right to seek his legal rem-
edy in order to gain possession of ^^'^ the freehold and dam-
It
686 American State Reports, Vol. 115. [N. Carolina,
ages for the injury sustained. It is effected by one of the
following methods: 1. Abatement; 2. Intrusion; 3. Disseisin;
4. Discontinuance; 5. Deforcement. The first two consist in
a wrongful entry when the possession is vacant — an ouster of
a freehold in law. The third, disseisin, is a wrongful putting
out of him that is seised of the freehold — an attack upon him
who is in the actual possession and turning him out — an
ouster from a freehold in deed. The fourth, discontinuance,
occurs when the feoffee of tenant in tail holds beyond the life
of the feoffor, under a feoffment for a greater estate than
the latter can convey, his possession thus retained being con-
sidered as an injury to the heir in tail, whose ancient legal
estate is thereby destroyed, or at least suspended or for a while
discontinued. The fifth and last, deforcement, signifies the
holding of any lands or tenements to which another person
hath a right, and includes all the others and any other species
of wrong whatsoever, whereby he who has a right to the free-
hold is kept out of possession, but is contradistinguished from
them in that it is only a detainer of the freehold from him
who has the right of property, but never had any possession
under that right: 3 Blackstone's Commentaries, 167 et seq.
A species of deforcement is when the ancestor dies seised of
an estate in fee simple, which descends to two of his heirs as
parceners, and one of them enters before the other, and will
not suffer the coparcener to enter and enjoy her moiety: 3
Blk. 174 ; Fitzherbert Nat. Brev. 197. We have thus reviewed
this subject to show the nature of an ouster, and in order that
we may understand clearly what it is the law means when it
is said to presume an ouster. It is a disseisin by one tenant
of his cotenant, the taking by one of the possession and hold-
ing it against him by an act or series of acts which indicate a
decisive intent and purpose to occupy the premises to the ex-
elusion and in denial of the right of the other. This is what
the law presumes, whether it be in ^*** exact accordance with
the real facts or not. It is a presumption the law raises to
protect titles, and answers in the place of proof of an actual
ouster and a supervening adverse possession. The presump-
tion includes everything necessary to be proved when the title
can be ripened only by actual adverse possession as defined by
this court, and is a most reasonable inference of the law and
justified under the circumstances, first, because men do not
ordinarily sleep on their rights for so long a period, and, sec-
April, 1906.] Dobbins v. Dobbins. 687
ond, because a strong presumption arises that actual proof of
the original ouster has become lost by lapse of time. The
period of time requisite to raise the presumption which an-
ciently was required to be of much greater length than now,
has by this court been fixed at twenty years in analogy to the
statute of limitations barring titles. The rule which has long
obtained with us was well stated by Nash, J., for the court, in
Black V. Lindsay, 44 N. C. 467: "The possession of one ten-
ant in common is in law the possession of all his cotenants,
because they claim by one common right. When, however,
that possession has been continued for a great number of
years, without any claim from another who has a right, and
is under no disability to assert it, it will be considered evi-
dence of title to such sole possession ; and where it has so con-
tinued for twenty years, the law raises a presumption that it
is rightful, and will protect it. This it will do, as well from
public policy, to prevent stale demands, as to protect posses-
sors from the loss of evidence from lapse of time. Possession,
then, for twenty years under the above circumstances will
amount to a disseisin or ouster of the cotenant, and furnishes
a legal presumption of the fact necessary to uphold an exclu-
sive possession — as that the possession was adverse in its com-
mencement, and tolls the entry of the tenant not in posses-
sion." There was no more proof in that case than in the one
now before us. But in Thomas v. Garvan, 15 N. C. 223, 25
Am. Dec. 708, the facts were practically identical with those
we have here, and the same ^^"^ rule was applied. Judge Gas-
ton, for the court, saying: "The sole enjoyment of property
for a great number of years, without claim from another, hav-
ing right and under no disability to assert it, becomes evi-
dence of a title to such sole enjoyment ; and this not because
it clearly proves the acquisition of such right, but because
from the antiquity of the transaction, clear proof cannot well
be obtained to ascertain the truth, and public policy forbids
a possessor to be disturbed by stale claims when the testimony
to meet them cannot easily be had. Where the law prescribes
no specific bar from length of time, twenty years have been
regarded in this country as con.stituting the period for a legal
presumption of such facts as will sanction the po.sse.ssion and
protect the pos.sessor. We think the judge who tried this
cause was correct in charging the jury that the twenty-one
years' exclusive po.ssession of the defendant, and her de-
688 American State Reports, Vol. 115. [N. Carolina,
ceased husband, since the petitioner became discovert, did
raise the legal presumption of an ouster," and barred the
plaintiff's recovery. This was followed by Cloud v. Webb,
15 N. C. 290, 25 Am. Dec. 711, which clearly shows the nature
and extent of the presumption : * * The possession of one ten-
ant in common is in law the possession of all the tenants in
common. One may, however, disseise or oust the others, and
from the time of such ouster the possession of him who keeps
out the rest is not their possession, but is adverse to their
claims of possession. The sole silent occupation by one of the
entire property, without an account to or claim by the others,
is not in law an ouster, nor furnishes evidence from which an
ouster can be inferred, unless it has been continued for that
length of time, which furnishes a legal presumption of the
facts necessary to uphold an exclusive possession. ' ' This case
was in turn followed by Linker v. Benson, 67 N. C. 150 ; Cov-
ington V. Stewart, 77 N. C. 148 ; Neely v. Neely, 79 N. C. 478;
Caldwell v. Neely, 81 N. C. 114; Page v. Branch, 97 N. C. 97,
2 Am. St. Rep. 281, 1 S. W. 625 ; Bullin v. Hancock, 138 N.
C. 198, 50 S. E. 291 ; Whitaker v. Jenkins, 138 N. ^^s C. 476,
51 S. E. 104. The same doctrine was applied in Fisher v.
Prosser, 1 Cowp. 217, decided by the king's bench in which
Lord ]Mansfield presided as chief justice. It was said by Jus-
tice Aston in that case: "Now in this case, there has been a
sole and quiet possession for forty years, by one tenant in
common only, without any demand or claim for an account
by the other, and without any payment to him during that
time. What is adverse possession or ouster, if the uninter-
rupted receipt of the rents and profits without account for
near forty years is not?" And by Justice Willes: "This
case must be determined upon its own circumstances. The
possession is a possession of sixteen years above the twenty
years prescribed by the statute of limitations, without any
claim, demand or interruption whatsoever; and therefore,
after a peaceable possession for such a length of time, I think
it would be dangerous now to admit a claim to defeat such
possession."
The proof in this case showed an exclusive, quiet and peace-
able possession by the defendants and those under whom they
claim for more than twenty years, indeed for more than forty
years, and the law presumes that there was an actual ouster,
not at the end of that period, but at the beginning, and that
April, 1906.] Dobbins v. Dobbins. 689
the subsequent possession was adverse to the cotenants who
were out of possession. This converted the estate in common,
as between the former cotenants, into one in severalty, in the
defendants, and defeated plaintiffs' right to partition or to
an ejectment.
The disability of some of the parties, during the period
when the possession was held by the defendants and those un-
der whom they claim, cannot be permitted to rebut the pre-
sumption of the law as to the ouster, for the possession com-
menced in the lifetime of their ancestor, from whom they
claim and who was at the time under no disability: Seawell
V. Bunch, 51 N, C. 195. That was a case in which a deed was
presumed to have been made after twenty years' possession.
Pearson, C. J., said: "Presumptions of the kind we are con-
sidering ^*® are made on the ground of public policy, in or-
der to discourage litigation of stale demands and to quiet the
possession of estates, and this policy would be in a great degree
obstructed, if, after the presumption had commenced to arise,
it was allowed to be stopped by some intervening circum-
stance other than an assertion of the right. "Where the one
party is exposed to an action at the commencement, and the
other neglects to pursue his remedy, a subsequent disability
cannot be allowed to prevent the principle from being car-
ried out, for otherwise in a large proportion of cases, it would
fail to take effect, and the policy of the law would be defeated
Our conclusion, both from analogy and from the 'reason of
the thing,' is, that when the presumption has commenced, it
is not stopped by a subsequent disability." The two cases
are analogous: See, also, Justice Ashhurst's opinion in Fisher
V, Prosser, 1 Cowp. 219, 220. The ruling in Seawell v. Bunch
is sustained by many cases, but we will only cite a few of
them : Mebane v. Patrick, 46 N. C. 23 ; Pearce v. House. 4 N.
C. 722 ; Chancey v. Powell, 103 N. C. 159, 9 S. E. 298 ; Fred-
erick v. Williams, 103 N. C. 189,9 S. E. 298; Andrews v.
Mulford, 2 N. C. 311 ; Anonymous, 2 N. C. 416 ; Copeland v.
Collins, 122 N. C. 619, 30 S. E. 315. The rule as to the effect
of twenty years' possession was adopted in analogy to the
statute of limitations, and when that statute begins to run
against the ancestor, it is not suspended by any disability of
the heirs at the time of descent: Wood on Limitations, 11;
Frederick v. Williams, 103 N. C. 189, 9 S. E. 298.
Am. St. Rep., Vol. 115 — 44
690 American State Reports, Vol. 115. [N. Carolina,
The view we have taken of the case makes it unnecessary to
consider the question presented by counsel in their argument
as to what is ordinarily necessary to render a possession suffi-
ciently adverse to bar a right if continued for the requisite
time, and as to whether any change in this respect has been
wrought by the Code, section 146, Revisal, 386. Too many
cases have been decided by the court since that section was
enacted as law, in which the" rule we have stated as to a
*^® presumed ouster has been recognized and applied, for us
to hold at this time that the rule has been changed by it, at
least where the conviction or ouster took place prior to 1868:
Bryan v. Spivey, 109 N. C. 57, 13 S. E. 766. In that case the
ouster was in the same year as in this case, 1863 : See, also,
Monk V. Wilmington, 137 N. C. 322, 49 S. E. 345, and Ruffin
V. Overby, 88 N. C. 369. What is the true construction of
section 146 of the Code (now Revisal, 386) with reference to
causes of action founded upon an ouster, which occurred since
the date of its adoption, is left open for future consideration,
when the matter is directly presented.
The court correctly charged the jury as to the effect of the
facts proved in this case upon the plaintiffs' right to recover.
No error.
Adverse Possession of the common property by one cotenant against
the others is considered in the recent note to Joyce v. Dyer, 109
Am. St. Bep. 609.
May, 1906.] Burnett v. Lyman. 691
BURNETT V. LYIMAN.
[141 N. C. 500, 54 S. E. 412.]
EJECTMENT — Transfers Pendente Lite. — If, after the insti-
tution of an action in ejectment, the plaintiff conveys the land by
deed in fee simple, and the grantee is not made a party, to the
suit, the defendant is, upon his motion, entitled to a judgment of
nonsuit, (p. 692.)
EJECTMENT — Real Parties in Interest. — The rule that in an
action of ejectment the plaintiff must have the right to the posses-
sion not only at the time of the institution of the suit, but at the
time of trial also, is not altered by a statute providing that the
action shall not abate by death or transfer of interest, as this stat-
ute must be construed in connection with another statute prov'iding
that every action must be prosecuted in the name of the real party
in interest, and that when a complete determination of the con-
troversy cannot be had without the presence of other parties, the
court must cause them to be brought in. (p. 692.)
EJECTMENT — Transfers Pendente Lite. — In an action of
ejectment the grantee of the land pendente lite may not only be
substituted as party plaintiff, but if the original plaintiffs remain
in the case, such grantee having become a party in interest, he is
necessary to a complete determination of the action, and it is the
duty of the court to have him brought in and made a party, (p.
692.)
F. Carter, for the plaintiffe.
Tucker & Murphy, for the defendants.
^* CLARK, C. J. This is an action of ejectment begrun
by "W. B. Burnett and W. E. Burnett. After it had been
pending for some time the plaintiffs conveyed the land by
deed in fee simple to one Rawls, who before the trial conveyed
to Mattie C. Moore, a married woman. Neither Rawls nor
Mrs. Moore were made parties. Upon the above facts appear-
ing in evidence, the defendants moved for judgment of non-
suit. The court refused the motion and directed the jury, if
they believed the evidence, to find the issues in favor of the
plaintiffs.
In Arrington v. Arrington, 114 N. C. 116, 19 S. E. 278,
Burwell, J., says: "In an action to recover land, the rule is
that the plaintiff must have the right to the possession not
only at the institution of the suit, but at tlie time of trial
also," quoting 7 La wson R. & R., section 3708, which lays this
down as the universal rule, save, he says, one ca.se in Vermont,
which Judge Burwell further shows was not in truth any ex-
ception. Arrington v. Arrington, is cited to sustain this
692 American State Reports, Vol. 115. [N. Carolina,
proposition : Morehead v. Hall, 132 N. C. 122, 43 S. E. 542.
To same effect is 15 Cyc. 29, and cases there cited.
The defendants admit that this proposition was unquestion-
ably true under the former practice, but contend that this is
changed by Revisal, section 415, which provides that: "No
action shall abate by the death, marriage or other disability
of a party, or by a transfer of any interest therein, if the
cause of action survive or continue In case of any
other transfer of interest, the action shall be continued in the
name of the original party, or the court may allow the per-
son to whom the transfer is made to be substituted in the
action." Aside from the fact that this section, enacted in
1868, was in *''*** force when the above-cited cases were de-
cided, it must be noted that the general principle of the re-
formed procedure is that "Every action must be prosecuted
in the name of the real party in interest" (Revisal, 400), and
that the above-quoted section 415 does not refer to the parties
who may maintain an action, but to "abatement of actions,"
and must be construed in connection with section 400, and
with the following provision in section 414: "When a com-
plete determination of the controversy cannot be had without
the presence of other parties, the court must cause them to be
brought in." Certainly a complete determination cannot be
had when the true owner of the land is not a party to the
action.
Construing sections 400, 414 and 415 of the Revisal to-
gether and recalling that the last relates to the "abatement
of actions" only, it would seem that the provision therein
that the action may be continued in the name of the original
plaintiff means simply that the abatement does not act auto-
matically upon the transfer of the interest, and that if the
action is continued without objection, the judgment shall not
be void, but, none the less, the judge should cause those in
interest (section 400) to be "brought in" (section 414), and
upon objection made, as in Arrington v. Arrington, 114 N.
C. 116, 19 S. E. 278, and in this case, it was error not to re-
quire them to be made parties; else sections 400 and 414
would be useless. The bargainee of the land pendente lite
may not only be substituted as party plaintiff (Talbert v.
Becton, 111 N. C. 543, 16 S. E. 322), but if the original plain-
tiffs remain in the case, such bargainee, having become the
"party in interest" (section 400), is necessary to a complete
May, 1906.] Burnett v. LYMiUsr. 693
determination of the action, and it is the duty of the judge,
certainly if objection is made, to have him "brought in"
(section 414). In Davis v. Higgins, 91 N. C. 382, relifed on
by the defendants, there was no objection for failure to make
the bargainee a party, but the court held that if the assign-
ment had been brought to the attention of the court, it should
ex mero motu have dismissed ^^^ the action, unless a prose-
cution bond had been filed by the bargainee.
That section 415 does not have the effect of permitting the
original plaintiff in ejectment to recover, after conveying
his interest, without either joining his grantee as a party or
substituting him as a party, is clear from the language of
section 415 that "no action shall abate by the death, marriage
or other disability of a party, or by the transfer of any in-
terest therein. ' ' Certainly upon the death of a party, though
the action does not abate, judgment cannot be had without
making his personal representative a party. So when there
IS a conveyance by the plaintiff, his bargainee must either be
"brought in" (section 414) as an additional party or "sub-
stituted"— being necessary to the determination of the action
— ^because he is now the party in interest. ( Sec. 400. )
If this were not so, the judgment would solemnly record
an untruth, "that the plaintiff is the owner and entitled to
the possession" of the property. There might be cases where
the defendant could urge an equity against the grantee, and
from this he should not be cut off. Also, the defendant has
the right to have the bargainee "brought in" that he may be
liable for the costs, if unsuccessful. The action "does not
abate" by death or transfer, but in both cases other parties
must be made, and in case of a transfer, though the action
may be continued in the name of the original party, the true
party in interest, the bargainee, must be "brought in" if ob-
jection is made.
It was error in the court to instruct the jury that "if they
believed the evidence to find that the plaintiffs were the
owners and entitled to the po.ssession. " If they believed the
evidence, the jury were compelled to find just the opposite.
and that the plaintiffs were not the owners, and were not en-
titled to possession, because it was shown that they had
parted with all the rights they had possessed.
Error.
694 American State Reports, Vol. 115. [N. Carolina,
If, Pending an Action in Ejectment against several defendants hold-
ing distinct parcels of property, the plaintiff sells to one of them,
such vendee may continue the suit as plaintiff against the other de-
fendants. But it must be the same suit, and for the property claimed
by the first plaintiff, and not for that and other property claimed
by the last plaintiff, and united by an amended complaint to that
originally sued for: Bullion Min. Co. v. Croesus Gold etc. Min. Co.,
2 Nev. 168, 90 Am. Dec. 52C.
To Sustain Ejectment, the Plaintif must, except as against a mere
trespasser, have title at the commencement of the action. A title
subsequently accruing will not authorize a recovery: Green v. Jor-
dan, 83 Ala. 220, 3 Am. St. Rep. 711. But a recovery by the plain-
tiff in ejectment may be defeated by the defendant showing title in
himself acquired after the commencement of the action: McCauley
.V. Jones, 34 Mont. 375, ante, p. 538.
WINKLER V. KILLIAN.
[141 N. C. 575, 54 N. E. 540.]
PARENT AND CHTLD — Services Rendered by Adult Clilld —
Compensation. — If an adult child removes from the home of his
parent, marries, and afterward renders personal services to his parent
which are voluntarily accepted, a promise on the part of the parent
to pay therefor will be implied, (pp. 697, 698.)
PARENT AND CHILD — Services by Adult Child — Compensa-
tion.— In the absence of fraud or gross neglect, an adult child's
claim for personal services rendered his parent after arriving at ma-
iority should be reduced by the amount actually received by such
child in the use and management of the parent's property, and not
bv what he should have received by more diligent management, (p.
699.)
E. B. Cline and S. J. Ervin, for the plaintiff.
Avery & Avery and M. H. Yount, for the defendant.
'^'^^ HOKE, J. There was allegation and also evidence on
the part of plaintiff tending to show that Susan Winkler,
late a resident of the county of Burke, died intestate in said
county about the twenty-sixth day of March, 1903, and that
on the sixth day of August, 1903, defendant was duly qualified
as her administrator.
2. That the defendant's intestate was the widow of Abram
Winkler, who died in the county of Burke about twelve or
thirteen years ago, leaving at his death said widow, then liv-
ing at the home place, and three sons and four daughters liv-
ing at the time, all of whom had married and moved away
many years before the death of either parent.
May, 1906.] Winkler v. Killl\n. 695
3. That after the death of said Abram Winkler it be-
came necessary for the defendant's intestate to have a con-
stant attendant both day and night, as she was an exceed-
ingly large and fleshy woman of advanced age, afflicted with
dropsy and other diseases, and it was necessary for some
one to provide her sufficient supply of food each day, and to
see that it was suitably prepared.
4. That from about the 20th of June, 1892, to the twenty-
sixth day of ]\Iarch, 1903, the plaintiff had the sole responsi-
bility and entire expense of taking care of her and giving
her food, fuel, etc., and provided her all proper attention
and service by his own labor, that of his wife, his three minor
sons and help employed by him, both day and night, and
with properly prepared food furnished three times and up-
ward from his own house; that this labor and the amount
of food so consumed was at all times much greater than
would be required for an ordinary person, but especially
during the last five or six years of the life of the defendant's
intestate, while she was childish and greatly afflicted with
^"^"^ dropsy, she was a constant care to the plaintiff, requiring
persons to attend to and work with her almost constantly,
day and night, and he was compelled to keep large fires go-
ing constantly, both day and night, both winter and sum-
mer, consuming an immense quantity of wood, said service,
care and attention, and amounts paid physicians, burial
expenses, etc., being of the value of four thousand five hun-
dred and fifteen dollars and fifteen cents.
5. That in order to be better able to render the services
hereinbefore mentioned, the plaintiff moved from the place
he was living at the time of his father's death to a point
nearer his mother, but did not at any time raside in the
house with her nor she with him ; that he at one time started
a new house for her, with her approval, close to his own for
greater convenience, and got up the frame, but she changed
her mind, not wishing to leave the old home, and he tore
down the frame and erected another house nearer to her for
the occupancy of Mrs. Wood and her children, who for
about six years was the constant attendant of the defendant
intestate under employment by the plaintiff.
6. That during all the years aforasaid none of the other
sons or daughters of the defendant's intestate ever con-
tributed anything to her support, nor did any of them ever
come to see her except one daughter on a few occasions.
696 American State Reports, Vol. 115. [N. Carolina,
Plaintiff in his own behalf testified as follows: "I am
plaintiff in this action. Have been married about thirty
years. I built a house on my father's land and moved to
myself three or four months after I was married. I have
lived by myself ever since. I afterward bought the land on
which I built. I moved to the place I now live a few months
after my father's death."
Plaintiff then proposed to prove by his own testimony
that "soon after the death of his father, in 1891. the children
met together, and that the plaintiff told the others that if
they or any of them would take the old lady and take care
of her '*'''* he would give them all his interest in her estate;
but that if he took care of her he should expect to be well
paid. That the others declined to take care of her." At
the close of the evidence the court said to counsel that he
would charge the jury that upon the testimony, if believed,
the plaintiff could not recover at all and in deference to this
intimation of the court, plaintiff excepted, submitted to a
nonsuit and appealed.
It is ordinarily true that where services are rendered by
one person for another, which are knowingly and voluntarily
accepted, without more, the law presumes that such services
are given and received in expectation of being paid for, and
will imply a promise to pay what they are reasonably worth.
This is a rebuttable presumption, for there is no reason why
a man cannot give another a day 's work as well as any other
gift, if the work is done and accepted without expectation
of pay. It is equally well established that when a child re-
sides with a parent as a member of the family or with one
who stands to the child in loco parentis, services rendered
under such circumstances by the child for the parent are,
without more, presumed to be gratuitous, and no promise
will be implied and no recovery can be had without proof of
an express and valid promise to pay, or facts from which
a valid promise to pay can be reasonably inferred. This last
position is usually considered as an exception to the general
rule, and in this and most other jurisdictions obtains both
as to adult and minor children. Wherever the same has
been applied, however, to claims by adult children so far as
we can discover, it has been made to depend not alone on the
fact of kinship in blood, but also on the fact that the adult
child ^''^ has continued to reside with the parent as a mem-
May, 1906.] Winkler v. Killian. 697
ber of the family. This additional fact of membership in
the same family has been present in all the cases on this sub-
ject that we have noted in this state, from the case of Will-
iams V. Barnes, 14 N. C. 348, down to that of Stallings v.
Ellis, 136 N. C. 69, and frequently finds expression in these
decisions as the controlling fact on which they rest.
Thus in Williams v. Barnes, 14 N. C. 348, Ruffin, J., de-
livering the opinion of the court, said: "It cannot be pos-
sible that the head of a harmonious household must drive
each member off as he shall arrive at age or be bound to pay
him wages or for occasional services unless he shows that it
was agreed that he should not pay. ' ' In Dodson v. McAdams,
96 N. C. 149, 60 Am. Rep. 408, 2 S. E. 453, Merrimon, J.,
for the court, said: "It seems to be settled law, certainly in
this state, that if a grandfather receives a grandchild or
grandchildren into his family, and treats them as members
thereof — as his own children — he and they are in loco
parentis et liberorum, and hence, if the grandchild in such
case shall do labor for his grandfather, as a son or daughter
does ordinarily as a member of the family of his or her
father, in that case, in the absence of any agreement to the
contrary, no presumption of a promise on the part of the
grandfather to pay the grandchild for his labor arises; the
presumption is to the contrary. The grandchild, as to his
labor or services rendered in such case, is on the same foot-
ing as a son or daughter. And this is so after the grand-
child attains his majority, if the same family relation con-
tinues. This rule is founded in large measure upon the sup-
position that the father clothes, feed.s, educates and sup-
ports the child, and that the latter labors and does appro-
priate service for the father and his family in return for
such fatherly care and domestic comfort and advantage.
The family relation and the nature of the service rebut the
ordinary presumption that arises when labor is done for a
party at his request, express or implied, of a promise on his
part to pay for it."
«*«» In Young v. Herman, 97 N. C. 280, 1 S. E. 792, it is
held: 1. "When a child after arrival at full age continues
to reside with and serve the parent, the presumption is that
the service is gratuitous; 2. But this presumption may be re-
butted by proof of facts and circumstances which show that
such was not the intention of the parties, and raise a prom-
698 American State Reports, Vol. 115. [N. Carolina,
ise by the parent to pay as much as the labor of the child is
reasonably worth." Again, in Callahan v. Wood, 118 N. C.
752, 24 S. E. 542, Faircloth, C. J., for the court, said: "We
do not put our decision entirely on the kinship relation, but
also on the one family relation established and maintained
by the parties." In Hicks v. Barnes, 132 N. C. 146, 43 S.
E. 604, the fact that the parties lived as members of the
same family was brought out and dwelt upon as the control-
ling feature of the case. The one family relationship is so
clearly made the ratio decidendi in claims of this character
that the principle extends to many other cases of kinship be-
sides that of parent and child, including persons who are no
blood kin, but stand in this relation to each other, and ap-
plies also where the parent resides with his child as a mem-
ber of the child's family and household. This was held in
Stallings v. Ellis, 136 N. C. 69, 48 S. E. 548, and the facts
stated and the entire opinion show that the decision was
made to depend on the relationship between the parties as
members of one and the same household and family.
Counsel have not cited, nor have we been able to find, any
case in this state where an adult child making a claim for
services had removed from the home and family of the par-
ent, had married and assumed the care and responsibility
of a family of his own for and during the time the services
were rendered. Courts of the highest authority in other
jurisdictions, however, have dealt with the matter and have
held that in such cases the general rule obtains that where
such services are rendered and voluntarily accepted, a prom-
ise to pay therefor will be implied. Thus in Parker's Heirs
V. «»i Parker's Admr., 33 Ala. 459, it is held that "whatevei
may be the claims of filial duty and affection as between an
aged and infirm father and his grown son, there is no principle
of law which requires the son, living separate and apart from
the father, to perform services for the latter without com-
pensation, where the father is in comfortable circumstances;
consequently, to support the son's claim for compensation
for such services, proof of an express contract is not neces-
sary." And in Steel v. Steel, 12 Pa. 64, Rodgers, J., for the
court, said: "Had this been a claim for services rendered
without request by a son while residing in the same house
with the father and as a member of his family, this action
could not be maintained. But, if we believe the evidence,
May, 1906.] Winkler v. Killian. 699
the services were performed at the request of the father by a
son who lived at a distance from him on a different property,
and with a family of his own to support": See, also, Bell
V. IMoon, 79 Va. 341; Smith v. Birdsall, 106 111. App. 264;
Markey v. Brewster, 10 Hun, 16; same ease approved 70 N.
Y. 607. There are other decisions of like import and they
fully sustain the doctrine as stated generally in 21 American
and English Encyclopedia of Law, second edition, 1061: "The
general rule deduced from the authorities is that where a
child, after arriving at majority, continues to reside as a
member of the family with the parent or with on£ who stands
in the relation of a parent, or where a parent resides in the
family of a child, the presumption is that no payment is ex-
pected for services rendered or support furnished by one to
the other. This presumption is not conclusive, but may be
overcome by proof. ' ' And further on page 1063 : ' ' Where
a child lives separate and apart from a parent, has left the
father, married and set up life for himself, the presumption
that the service or support is gratuitous does not obtain."
The text-writers are to same effect: Abbott's Trial Evidence,
2d ed., 443; Page on Contracts, sees. 778-782. On the
(evidence admitted by the court the plaintiff was entitled to
the charge that if the '^^^^ same was believed the law would
imply a promise on the part of the intestate to pay what the
services were reasonably worth, the amount to be determined
by a jury or referee, as the court in its legal discretion may
determine. In taking the account or determining the amount
by a jury, the plaintiff's claim for personal service should be
reduced by the amount received by him in the use and man-
agement of the intestate's property. In the absence of fraud
or gross neglect, the plaintiff would be only chargeable for
what he actually received from this source, and not what he
could have received by more diligent and careful manage-
ment. There is error and a new trial is awarded.
Where a Child Works for fTis Parents after becoming of age, it
has been held that the law implies no contract on the part of the
latter to pay for the services: I'oorman v. Kilgore, 26 Pa. 365, 67
Am. Dec. 425. See, further, Ellis v. Cary, 74 Wis. 176, 17 Am. St.
Rep. 125; Dodson v. McAdams, 96 N. C. 149, 60 Am. Bep. 408; note
to Vance v. Calhoun, 113 Am. St. Rep. 121.
700 American State Reports, Vol. 115. [N. Carolina,
STATE V. WHEELER.
[141 N. C. 773, 53 S. E. 358.]
CONSTITUTIONAL IiAW — ^Working Boads — Double Taxation.
A statute providing for the working on public highways or roads by
labor is not unconstitutional as double taxation, (p. 701.)
CONSTITUTIONAL LAW — ^Double Taxation. — No constitu-
tional prohibition exists against double taxation, (p. 701.)
CONSTITUTIONAL LAW— Taxation.— The fourteenth amend-
ment to the constitution of the United States does not require equal-
ity in levying taxation by a state; that matter is governed entirely
by the provisions of the state constitution, (p. 702.)
HIGHWAYS, Work on — Poll Tax. — A statutory requirement
that male citizens shall work on the public roads is not a poll or
capitation tax. (p. 702.)
TAXATION. — Time is not Money nor is labor property in the
sense that they can be liable for a property tax. (p. 702.)
HIGHWAYS, Work on — Taxation. — Conscription of labor to
work the public roads is not a tax, but the exaction of a public
duty. (p. 703.)
R. D. Gilmer, attorney general, and H. E. Norris, for the
state.
R. H. Battle and S. G. Ryan, for the defendant.
'"''* CLARK, C. J. The defendant appeals from a con-
viction and sentence for failing to work the public roads of
Wake county, as required by chapter 667 of the laws of
1905, amendatory of chapter 551 of the laws of 1903, The
appeal rests upon the alleged unconstitutionality of the stat-
ute. The defendant contends:
1. Time is money. Labor is a man's property and there-
fore to exact his labor and time to work the roads is to levy
a tax on property and such is unconstitutional unless ad
valorem.
2. That if working the road is a poll tax, the act is un-
constitutional because it exacts this labor only of "able-
bodied male persons between the ages of twenty-one and
forty-five," and excepts "residents in incorporated cities
and towns and such as are by law exempted or excused,"
whereas the poll tax (Const., art. 5, sec. 1) is to be laid on
"every male inhabitant between the ages of twenty-one and
fifty."
3. That the requirement to work the roads is not placed
upon those living in incorporated towns and cities, and there-
March, 1906.] State v. Wheeler. 701
fore there is a denial of the equal protection of the laws re-
quired by the fourteenth amendment to the constitution of
the United States.
4. That inasmuch as the roads are now worked partly by
taxation, supplemented by labor exacted by the statute, and
the latter is a property tax (a man's labor being his prop-
erty), therefore this is double taxation.
These points have been repeatedly passed upon adversely
to the contentions of the defendant: State v. Sharp, 125 N.
C. 628, 74 Am. St. Kep. 663, 34 S. E. 264, which has been
cited and approved in State v. Covington, 125 N. C. 641, 34
S. E. 272 ; State v. Carter, 129 N. C. 560, 40 S. E. 11 ; Brooks
V. Tripp, 135 N. C. 159, 47 S. E. 401 ; State v. Holloman, 139
^"^^ N. C. 642, 52 S. E. 408. But counsel ask us to recon-
sider them, and we have given the matter full deliberation.
For near two hundred and fifty years the roads of this
state were worked solely by the conscription of labor. It
may have been inequitable, but it was never thought by any-
one to be unconstitutional, nor has the idea been advanced
heretofore that to work the roads by labor was to work them
by taxation. The validity of working the roads by labor is
sustained in State v. Halifax, 15 N. C. 345, and has been
recognized in countless trials for failure to work the roads.
Under this statute. Wake county works its roads partly by
labor supplemented by funds raised by taxation and other
funds and the work of its convicts. If the exaction of the
labor of residents of the locality is, as counsel contend, a tax
upon property, then we simply have a higher tax, but not
double taxation. The tax does not seem to be more than
enough to keep the roads in good order, but if it should so
prove, the people themselves, acting through their elected
representatives in the General Assembly, and the board of
county commissioners, will reduce it. The tendency of the
times is to require better roads, which necessarily demands
higher taxes for road purposes, which is more than offset, it
is claimed, by the benefits derived from better roads. But
that is a matter of legislation and administration. The
courts cannot meddle with it. Nor is there any constitu-
tional prohibition against double taxation : Commissioners v.
Blackwell Durham Tobacco Co., 116 N. C. 441, 21 S. E. 423;
Cooley's Constitutional Limitations, 7th ed., 738, and cases
there cited. It exists in many instances that will readily oc-
cur to anyone, as the taxation of mortgages and indebtedness
702 American State Reports, Vol. 115. [N. Carolina,
in the hands of a creditor, and taxation at the same time of
mortgaged property, and of the real and personal property of
a debtor, without reduction by reason of the mortgage or other
indebtedness; the taxation of the tangible property of a cor-
poration and also of its capital stock and of its franchises
and also of the certificates of "'''^^ shares in the hands of the
shareholders: Sturges v. Carter, 114 U. S. 511, 5 Sup, Ct
Rep. 1014, 29 L. ed. 240; Commissioners v. Blackwell Dur-
ham Tobacco Co., 116 N. C. 441, 21 S. E. 423. There are
many other instances, but this is a matter of legislation. Cer-
tainly this is not double taxation any more than taxing the
dweller in town to keep up his streets (all of which falls upon
him), and also laying a tax on his property to aid in working
the roads.
Nor does the fourteenth amendment require equality in
levying taxation by the state, if this exaction of labor be
taxation. How a state shall levy its taxation is a matter
solely for its legislature, subject to such restrictions as the
state constitution throws around legislative action. If, on the
other hand, working the roads by labor is a police regulation
or a public duty, certainly it is not a matter of federal super-
vision. Besides, as the dwellers in the towns keep up their
streets at a greater expense than the value of the statutory
labor put on the roads, there is no discrimination of which
the defendant can complain, especially as the tax money ex-
pended on the roads to supplement the statutory labor is
levied on town property as well as upon that in the country.
The requirement to work the roads is not a poll or capita-
tion tax, which is a sum of money required to be paid by
"every male inhabitant over twenty-one and under fifty
years of age," which ** shall be applied to the purposes of
education and the support of the poor": Const, art. 5, sees.
1, 2. Certainly "four days' work on the public roads" in
one's own township are not capable of being applied to edu-
cation, or the poor or anything else except to the roads.
This brings us to the first ground urged. To say that "time
is money" is a metaphor. It expresses merely the fact that
time is of value, and that the use of a man's muscle, or of his
skill, or of his mentality will usually procure money in ex-
change. But time is not money, nor is labor property, in
any other sense than that it is usually of some value and
'^'''^ its proceeds belong to the individual or to the parent or
]\farch, 1906.] State v. Wheeler. 703
guardian if he is a minor, or to the state, if he is a convict.
But it is not property in the sense that it can be liable to a
property tax.
As already pointed out in State v. Sharp, 125 N. C. 628,
74 Am. St. Rep. 663, 34 S. E. 264, the conscription of labor
to work the public roads is not a tax at all (Cooley's Consti-
tutional Limitations, 737; Pleasant v. Kost, 29 111. 490).
but the exaction of a public duty like service upon a jury,
grand jury, coroner's inquest, special venire, as a witness,
military service and the like, which men are required to ren-
der either wholly without compensation, or (usually) with
inadequate pay, as the sovereign may require: Guilford v.
Commissioners, 120 N. C. 23, 27 S. E. 94; State v. Hicks, 124
N. C. 829, 32 S. E. 927. Originally none of these received any
pay whatever (State v. Massey, 104 N. C. 877, 10 S. E. 608),
the duration of military service only having a time limit.
And to this day witnesses, above two to each material fact,
receive no pay (Revisal, sec. 1300), and witnesses for the los-
ing party receive none unless he is solvent, and talesmen
summoned upon a special venire, unless chosen on the trial
panel, receive (except in a few counties) no pay; which was
true till recently of witnesses summoned before the grand
jury in all cases where "not a true bill" is returned; and
witnesses for the state in criminal cases where the convicted
are insolvent receive only half pay. Even when a witness
or a juror receives a prescribed per diem, in most cases it is
less, in many cases far less, than what his time was worth or
he could have earned. If the state can take his services for
less than their value, it is because it has a right to recjuire
them as a public duty, and hence it can, as of old, require
them to be rendered without any compensation at all. Who
will say that ten dollars per month is compensation for the
time of a citizen sent to the front in time of war, or to put
down riots, and for the hardships, and the exposure to
weather, to disease, to danger and to death ? If the state can
exact such services it can exact labor to "^"^^ improve its pub-
lic roads for the public benefit. The worker on the roads
ijets back some benefits therefrom. It was a crude and not
very accurate calculation or balancing of benefits, but was a
necessity perhaps in former times when currency was scarce
and difficult to be obtained even by taxation. It is still a
matter resting in the legislative discretion. Justices of the
704 American State Reports, Vol. 115. [N. Carolina,
peace and some other officials formerly discharged the pub-
lic duties required of them without compensation.
In the progress of time we have gradually commenced pay-
ment, to a limited extent, for most public services exacted as
a public duty. Justices of the peace receive fees. Some
witnesses and jurors are paid, usually less than the value of
their time, but many witnesses, and special veniremen u>sually
still go unpaid, and compulsory military service is paid only
what the legislature sees fit. The public duty of the resi-
dents of any locality to work upon its roads has been re-
duced in Wake county by this statute to four days per an-
num, and such service is supplemented by the work of the
force of county convicts, by a tax of twelve and one-half
cents upon the one hundred dollars' worth of property in the
cities as well as in the country to hire labor and purchase
labor-saving machinery, by the appropriation of four-tenths
of the net proceeds of the dispensary in Raleigh, and further
by a special tax which any township shall see fit to vote for
the benefit of the roads therein, and the four days' labor re-
quired can be commuted by the payment of two dollars and
fifty cents with which the county will hire labor instead.
This is a very great advance upon the still recent custom,
which has been in force for more than two centuries, of
working the roads entirely and solely by labor called out in
the discharge of the public duty of the inhabitants of each
locality to keep the highways in order. Whenever in the
judgment of the people of Wake county the four days'
labor, per annum, still exacted should be reduced, or entirely
abolished, "^"^^ they can send representatives to the General
Assembly who can doubtless procure such changes as the peo-
ple may wish in the manner of working the public roads. As
we said at last term, in State v. HoUoman, 139 N. C. 642, 52
S. E. 408: "It is for the legislative department to prescribe
by what methods the roads shall be worked and kept in repair
— whether by labor, by taxation on property, or by funds
raised from license taxes, or by a mixture of two or more of
those methods — and this may vary in different counties and
localities to meet the wishes of the people of each, and can be
changed by subsequent legislatures."
And there, after the fullest consideration, we again leave
the matter. If the system of working the public roads in
any locality is not satisfactory to the majority of its people,
May, 1906.] State v. Lilliston. 705
relief or change of method must be sought from the law-mak-
ing department.
No error.
Brown and "Walker, JJ., concur in result.
The Constitutionality of Statutes requiring persons to work on the
public roads is considered in tlie note to State v. Sharp, 74 Am. St.
Rep. 667.
STATE V. LILLISTON.
[141 N. C. 857, 54 S. E. 427.]
HOMICIDE — Beckless Shooting. — If two men engage in shoot-
ing at each other in a crowded waiting-room, and a bystander is
killed, both are guilty, of murder, one as principal and the other
as aiding and abetting, (p. 706.)
HOMICIDE — Beckless Act. — Malice is implied when an act,
dangerous to others, is done so recklessly and wantonly as to evince
depravity of mind and disregard for human life, and if the death of
any person is caused by such an act, it is murder, (p. 706.)
TBIAL — Instructions. — An excerpt from a charge to the jury
must be construed with the context and in connection with the whole
charge, (p. 707.)
HOMICIDE — Sudden Assault — Self-defense. — If a person on
trial for murder sets up the defense that he was suddenly assaulted
it is not error to charge the jury that "self-defense exists where one
is suddenly assaulted, and in defense of his person, where an im-
mediate and great bodily harm would be the apparent consequence
of waiting for the assistance of the law, and there is no other prob-
able means of escape, he kills his assailant." (p. 708.)
NEW TBIAIi — Criminal Cases. — A motion for a new trial in
a criminal case on the ground of newly discovered evidence will not
be granted, especially where the evidence is merely cumulative or
where it has been withheld by the moving party, (p. 710.)
R. D. Gilmer, attorney general, for the state.
Argo & Shafter and J. N. Holding, for the defendant.
®*® CLARK, C. J. It was in evidence that the prisoner
Lilliston and one Clark were two "fakirs" who had been at-
tending the Raleigh Fair, and on Thursday and Friday
nights, they with others were at a house of ill-fame, engaged
in gambling and drinking, and that a difficulty sprung up
there on Friday night between these men over charges of
cheating. On Saturday, October 21st, they went to the rail-
.\m. St. Rep., Vol. 115 — 15
706 American State Reports, Vol. 115. [N. Carolina,
road station in Raleigh to take the train to leave the city, and
there in the crowded reception-room they engaged in shoot-
ing at each other — the next room, separated only by a glass
partition, being occupied by ladies and children. It is ad-
mitted by the prisoner that Clark fired two shots and then
ran out of the east door and that Lilliston fired five shots.
And these two men, who showed this contemptuous defiance
of law and of the lives of so many peaceable people who were
entitled to the protection of the law in their lives and per-
sons, escaped unharmed, while one bystander was killed, an-
other seriously wounded, and others narrowly escaped. If
they fought willingly in such a place, the reckless disregard
of ^^^ law amounts to malice, and if any bystander was
killed both were guilty of murder — one as principal and the
other as aiding and abetting. The homicide occurred in a
crowded waiting-room. The doctrine is well settled that
"malice is implied when an act dangerous to others is done
so recklessly or wantonly as to evince depravity of mind and
disregard of human life, and if the death of any person is
caused by such act, it is murder. The most frequent instance
of this species of murder is where death is caused by the reck-
less discharge of firearms under such circumstances that some
one would probably be injured, and even where the discharge
was accidental, resulting from handling the weapon in a
threatening manner it was held murder": 21 Am. & Eng.
Ency. of Law, 2d ed., 153, and cases cited in the notes.
The jury have acquitted Clark; and Lilliston, convicted of
murder in the second degree, presents in substance three
grounds of alleged error in the conduct of the trial by the
learned and impartial judge. He contends that the judge
should have told the jury that there was no evidence against
him either of murder in the second degree or manslaughter.
It is admitted that Clark stood toward the southeast and fired
northwestwardly two shots, one of which struck above the
ticket office. Mr. Horton testified that he dropped behind
the radiator and was struck on the buttock (which was ex-
posed) by Clark's second bullet, which entered, he says, from
the side Clark was on, and which could not have come from
the direction where Lilliston was at that time. Of the five
shots fired by Lilliston, the location of four found embedded
in the building are admitted. The state contends that Lillis-
ton's other ball was the one found in the body of Smith, the
May, 1906.] State v. Liu.iston. 707
deceased. There was evidence, if the jury believed it, that
Lilliston dodged behind Smith, and that in the excitement,
Lilliston, the lodgment of whose other balls showed that he
was firing wildly, shot Smith. The prisoner contended that
this was not true, also that it was Lilliston 's ***** ball that
struck Horton, and further that a man named Arnold shot
Smith. Only seven balls were traced, including those lodged
in 'the bodies of Smith and Horton. All these matters were
purely issues of fact for the jury and not for the court.
The court, in the words of the prisoner 's prayer, charged the
jury that "the defendant Lilliston contends that there is evi-
dence before the jury that Arnold, one of the state's "wit-
nesses, shot and killed Smith in the north aisle of the waiting-
room near the ticket office. The court charges the jury that if
you have a reasonable doubt as to whether Arnold killed
Smith or as to whether Lilliston killed Smith, it will be your
duty to acquit Lilliston." The prisoner admitted that Smith
was not killed by Clark. The bullet did not come from that
side. He offered evidence tending to show that he fired in
self-defense only, and there was evidence to the contrary,
both that he began the difficulty, that he engaged in it will-
ingly and continued firing while the other man was running.
These questions of fact were ably presented to the jury by
counsel of great skill and long experience. There was evi-
dence, as the judge properly held, to submit the case to the
jury, and their finding is not reviewable by us. Had the
judge who tried this cause and heard the witnesses, and
could judge from their bearing as to the weight to be given
their evidence, felt any doubt of the correctness of the ver-
dict, it was in his power and it would have been his pleasure
to set it aside. He refused to do so.
The prisoner also excepts to the following excerpt from his
honor's charge: "Another principle of law is where in an
indictinent for murder the state has satisfied the jury be-
yond a reasonable doubt that the prisoner .slew the decea.sed
intentionally with a deadly weapon, nothing else appearing,
the law presumes that the defendant is guilty of murder in
the second degree, and the burden of proof shifts to the de-
fendant to satisfy the jury, not beyond a rea.sonable doubt,
but to simply '^"* satisfy them, that he was excusable or
that the crime is for a lesser offense, to wit, manslaughter,
which is, as I told you, the unlawful and felonious killing of
708 American State Reports, Vol. 115. [N. Carolina,
a human being with malice aforethought — that is to say, that
the defendant is called on to satisfy the jury of the existence
of such facts and circumstances as will rebut the presumption
of malice raised by the use of a deadly weapon, and reduce
the grade of the offense from murder in the second degree to
manslaughter, or to go further and satisfy the jury of the
existence of such facts and circumstances as will justify the
killing on the plea of self-defense — that is, that the prisoner
had reasonable apprehension, and did apprehend, that it was
necessary for him to shoot in order to protect his own life or
save himself from great bodily harm." This charge is to be
construed with the context, and reading it in connection with
the whole charge we do not find any reversible error: State
V. Tilley, 25 N. C. 424; State v. Boon, 82 N. C. 637; State v.
Holman, 104 N. C. 861, 10 S. E. 758 ; State v. Gentry, 125
N. C. 733, 34 S. E. 706.
The prisoner further excepts to the following paragraph
of the charge: ** Self-defense exists where one is suddenly as-
saulted and in the defense of his person, where an immediate
and great bodily harm would be the apparent consequence of
waiting for the assistance of the law, and there is no other
probable means of escape, he kills the assailant." This para-
graph is quoted from 1 Wharton on Criminal Law, ninth edi-
tion, section 306. We see no ground for criticism of the word
"apparent." It is favorable to the defendant. Had it been
omitted and the word "actual" had been used, the prisoner
would have excepted. Nor do the words "and there is no
other probable means of escape" improperly restrict the
right of self-defense upon the circumstances of this case.
The judge did not restrict self-defense to cases of sudden as-
sault, but the prisoner contended that this was a sudden as-
sault, and the judge charged that in such cases the right of
self-defense exists if there is apparent danger from "waiting
®**2 for the assistance of the law and there is no other prob-
able means of escape." In State v. Kennedy, 91 N. C. 572, it
is said: "There may be eases, though they are rare and of
dangerous application, where a man in personal conflict may
kill his assailant without retreating to the wall." This is
cited and approved in State v. Gentry, 125 N. C. 733, 34 S.
E. 706. The doctrine of State v. Blevins, 138 N. C. 668, 50
S. E. 763, and State v. Hough, 138 N. C. 663, 50 S. E. 709, is
not in point here. Those cases hold that where a man is mur-
May, 1906.] State v. Lilliston. 709
derously assaulted, without fault on his part, he is not re-
quired to retreat to the wall, but may stand his c:round and
kill to save his own life; but to confer such right it must ap-
pear that the assault upon him was sudden, fierce and con-
tinuous. But here, this was not true, for Clark fired only
twice and then ran, and the prisoner testified that he fired
himself five times, commencing when Clark was near the
radiator in the center of the large room, and that he fired the
last as Clark went out the east door. This evidence of Lillis-
ton tends to show that Clark was not firing, but running, try-
ing to escape. There was much other evidence to the same
purport. In such state of facts the law is thus laid down in
State V. HiU, 20 N. C. 629, 34 Am. Dec. 396: "Even if the
prisoner had not begun the affray, but had been assaulted in
the first instance, and then a combat had ensued, he could
not excuse himself as for a killing in self-defense, unless he
quitted the combat before a mortal blow was given, if the
fierceness of his adversary permitted, and retreated as far
as he might with safety, and had then killed his adversary
of necessity to save his own life."
Here, though, "the fierceness of the adversary" abated
immediately after the second shot (when he fled) ; the pris-
oner testified that he shot five times, some, if not all, of
which shots were fired while Clark was getting from the
radiator to the door, and as he went out of the door. It is
worse than if he had killed the fleeing man, for he not only
shot unnecessarily, not for his own protection, but in a
crowded **"^ waiting-room where his balls were much more
liable to hit than if he had only one man before him. , His
honor told the jury that "where two people are engaged in
an unlawful act, such as an affray in a public place, shoot-
ing at each other willingly — that is, fighting willingly, and
not forced to fight in self-defense — and one kills a bystander,
it is murder in the second degree or manslaughter, according
as it is accomplished with or without malice." If Lilliston
had killed Clark, the jury would have been justified, upon
Lilliston 's own evidence taken alone, in finding him guilty
in that there was no necessity to do so to protect himself.
He fired wildly, as he testifies himself, and the brief of his
counsel says: "The evidence shows that four of the five balls
Lilliston fired are located in the walls and seats of the wait-
ing-room." Lilliston 's fifth and last ball, his counsel con-
1
710 American State Reports, Vol. 115. [N. Carolina,
tends, was the one that struck Horton. Horton says that
it was the second ball that was fired and that it struck him
coming from Clark's direction. The disputed question was
left to the jury, as was also the prayer as to Smith hav-
ing been shot by Arnold, and the jury said that beyond all
reasonable doubt in the minds of the twelve, Lilliston's
ball was the one that killed Smith. It is useless to recapitu-
late the voluminous and somewhat conflicting evidence.
The case was fairly and impartially tried and we find no
reversible error.
The prisoner filed a motion in this court for a new trial
for newly discovered evidence, which he avers would prove
that Arnold fired the fatal shot. This motion has never
been allowed in this court in a criminal case. But had it
been made in a civil action, in which it is sometimes, though
rarely, allowed, this motion would be disallowed, both be-
cause it would be merely cumulative of the evidence which
was offered and which was submitted to the jury with a
prayer thereon as requested by the prisoner, and for the
stronger reason, that the state filed, before the argument
here, the affidavit of O. L. Parham, jailer of Wake county,
®®* that Lilliston "was in possession of the evidence of Mrs.
Willie Richardson before his trial, because he (Parham)
had heard him (Lilliston) talking about it with others in
jail." He did not offer that evidence at the trial. The
court, even in a civil case, would not seriously consider a
motion for a new trial upon evidence which was withheld
from the jury by the party moving.
It. has uniformly been held that motions "for new trial
for newly discovered evidence" and "rehearings" cannot be
entertained in this court in criminal actions.
In State v. Jones, 69 N. C. 16, Reade, J., held that this
court had no power to rehear in a criminal action, saying:
"In equity cases and in civil actions, the practice has been
common, but, in criminal cases, never to our knowledge."
In State v. Starnes, 94 N. C. 973, where a motion for a
new trial for newly discovered evidence was made in a crim-
inal action, it was denied. Smith, C. J., saying: "No such
proposition in reference to criminal prosecutions has ever
been made or entertained, so far as our investigations have
gone, in this court. The absence of a precedent (for we can-
not but suppose such applications would have been made on
May, 1906.] State v. Lilliston. 711
behalf of convicted offenders if it had been supposed that a
power to grant them resided in this appellate court) is
strong confirmatory evidence of what the law was under-
stood to be by the profession. We are clearly of the opinion
that no such discretionary power as that invoked is con-
ferred upon this court. In appeals from judgments ren-
dered in indictments, our jurisdiction is exercised in review-
ing and correcting errors in law committed in the trial of
the cause, and to this alone : State v. Jones, 69 N. C. 16."
In State v. Starnes, 97 N. C. 423, 2 S. E. 447 , Smith, C.
J., again says: "The motion, as far as our own and the re-
searches of counsel disclose, is without precedent in the ad-
ministration of the criminal law on appeals to this court,
and is so fundamentally repugnant to the functions of a re-
viewing court, ***^ whose office is to examine and determine
assigned errors appearing in the record, that we did not
look into the affidavits offered in support of the motion, nor
hesitate in denying it. ' *
In State v. Rowe, 98 N. C. 629, 4 S. E. 506, Davis, J., says :
"Upon careful consideration, we must adhere to the prin-
ciple that in criminal actions the appellate jurisdiction of
this court is limited to a review and correction of errors of
law committed in the trial below: State v. Jones, 69 N. C.
16; State v. Starnes, 94 N. C. 973." The cases cited show
that the court adhered to its previous rulings on grounds
broad enough to apply both to motions for "new trials for
newly discovered evidence" and for "rehearings. " The
court then proceeded to point out that there was no ground
for the innovation which was sought, since the governor
could look into the entire merits of the case and render any
relief justice should demand.
In State v. Edwards, 126 N. C. 1051, 35 S. E. 540, the
court dismissed the motion as a well-settled matter, merely
saying that "such motions are not entertained in criminal
cases, as has been often held." In State v. Couneill, 129 N.
C. 511, 39 S. E. 814, the matter was fully considered, and
the court held that this court could not grant either re-
hearings or new trials for newly discovered evidence in
criminal actions. In State v. Register, 133 N. C. 746, 46 S.
E. 21, it is again said that "the prisoner also moved this
court for a new trial for newly discovered testimony, but
such motions can only be made in civil actions. Our prece-
712 American State Reports, Vol. 115. [N. Carolina,
dents are uniform that this court has no jurisdiction to
entertain such motion in criminal actions."
So the point is settled if the uniform practice of this
court and its repeated and uniform decisions to the same
effect can settle anything. But it is contended that all these
decisions and the uniform practice are erroneous and should
now be reversed. Counsel cite the statutes. In Laws of
1815, chapter 895, the power was first conferred to grant
new trials in criminal cases (and the prisoner's brief admits
®*^ that it was then restricted to the superior court judges)
as follows: "The judges of the superior courts of law are
hereby empowered and authorized, upon application of the
defendant, to grant new trials in criminal eases when the
defendant or defendants are found guilty, in the same man-
ner and under the same rules, regulations and restrictions
as in civil cases, any law, usage or custom to the contrary
notwithstanding. ' '
In 1805 the title of the court of conference had been
changed to "supreme court," and in 1810 the supreme court
had been authorized to elect a chief justice, though it was
not constituted as at present till the act of 1818, which went
into effect January 1, 1819. In 1854, chapter 35, section 35,
of the Revised Code, the words "courts of law" were substi-
tuted for "superior court judges," the object being, as
stated in prisoner's brief, to limit the authority to the judge
when sitting in a court of law instead of a court of equity.
The prisoner rests his argument to overrule the uniform
decisions and settled practice of this court upon the follow-
ing section 3272 of the Revisal, which reads, "The courts
may grant new trials in criminal cases when the defendant
is found guilty under the same rules and regulations as in
civil cases." This clearly refers to the time "when he is
found guilty," and when that section is turned to, it will be
found further that it is under subhead "Trials, Superior
Court," under which are grouped all the provisions peculiar
to trials in that court, to wit, sections 3262 to 3273, inclusive,
and the note of the commissioners to said section 327 shows
that it was chapter 895, laws of 1815, and Revised Code,
chapter 35, section 35, above quoted, which the prisoner's
brief admitted applied only to the superior court, and was
brought forward as Code (1883), section 1202, which was
in force when the above decisions were made, and is now
again brought forward in the Revisal, section 3272.
May, 1906.] State v. Lh^liston. 713
The constitution, article 4, section 8, is conclusive:
867 <"pjjg supreme court shall have jurisdiction to review,
upon appeal, any decision of the courts below, upon any mat-
ter of law or legal inference, and the jurisdiction of said court
over 'issues of fact' or 'questions of fact' shall be the same
as exercised by it before the adoption of the constitution of
1868." The power the court is now asked to exercise is not
a matter of law or legal inference, even if it could be deemed
"issues of fact" or "questions of fact"; such power was not
exercised prior to the adoption of the constitution of 1868,
as we have seen. Indeed, even when the court below
granted or refused a new trial for other cause than error of
law, as for newly discovered evidence, this court had no
jurisdiction to consider it: Holmes v. Godwin, 69 N. C. 467.
Motions for new trials for newly discovered evidence were
equitable in their nature and did not extend to criminal
actions until the aforesaid act of 1815, chapter 895, now Re-
visal, 3272, which extended the power only to the superior
court.
But even if the constitution and the precedents did not
forbid it, and it were an open question, this court ought not
to grant new trials for newly discovered evidence in crim-
inal actions for several reasons: First, there is no necessity
for it (the sole ground on which they are allowed in civil
actions), for the governor is vested with power to investigate
the facts more fully than we could, and to do what justice
shall require. There is no complaint that the executive has
not been sufficiently liberal in its exercise. Again, it is the
well-known complaint of our governors that, in matters of
this kind, insistence and pressure have been often too great.
This court has no time for such applications and no disposi-
tion to seek or invite them. The constitution has wisely
restricted our power in criminal cases to reviewing on ap-
peal "decisions of the courts below in matters of law or legal
inference."
And lastly, the odds against the state in a trial for a capi-
tal ***** offense are already sufficiently great. The prisoner
has twenty-three peremptory challenges against four for the
state; the prisoner can be found guilty only by a unanimous
verdict, beyond the reasonable doubt, of twelve men ; but if
one juror entertains such a doubt, there can be no convic-
tion. In England to this day the defendant cannot appeal
714 American State Reports, Vol. 115, [N, Carolina,
in a criminal case, but . here, though the defendant can ap-
peal, the state cannot, however erroneous the rulings of the
judge (though formerly the state could appeal here from a
verdict of not guilty and still can do so in Connecticut and
some other states). There are, too, many fine distinctions
and technicalities which are urged on an appeal, and still
other advantages in favor of one charged by a grand jury
with killing his fellowman and disadvantages to the state,
besides the unlimited right of appeal to the governor and the
absence of any restriction upon his power of commutation,
reprieve or pardon. Even if the court possessed the power,
it should not add another serious disadvantage to those un-
der which the state is already placed, when endeavoring to
enforce the guaranty of safety of life and limb to its citi-
zens, by seeking the conviction of those who have done mur-
der. These disadvantages are far greater now than is neces-
sary to make sure the acquittal of the innocent. The
"bloodiest" possible administration of the law is that which
permits murder, by making conviction of the guilty more
difficult.
"Mercy murders, pardoning those who kill."
In refusing to entertain such motions in criminal cases,
we are adhering to the uniform practice and rulings of the
court from the first day of its existence down to the present.
We are refusing to make an innovation. The object of pun-
ishment for murder is not to reform the offender, but, by
the certainty of infliction and its unpleasant nature, to deter
others from the like offenses. The number of homicides in
North Carolina, as recorded in the United States census and
the annual reports of the attorney general of this state, is
®^* much larger annually, in proportion to population, than
in most of the other states. The object to be sought in the
administration of the law is to diminish the number. This
cannot be done by adding to the disadvantages now imposed
upon the state, in such trials, beyond what has been done in
the past. If punishment deters from crime (which is its ob-
ject), then that homicides are more frequent here than in
most states shows a lack of efficient enfocement of the lav
in such cases. It is not for the courts to add additional diffi-
culties to its enforcement.
No error.
May, 1906.] State v. Lilliston. 715
Justices Connor and Walker Dissented on the ground that error
was committed by the trial court in defining to the jury the right
of self-defense, as set out in the main opinion supra. In this con-
nection Mr. Justice Connor said:
"Without undertaking to discuss the question at length, I find
the law as approved by this court laid down by Mr. Justice Bynum,
in State v. Dixon, 75 N. C. 275: 'The general rule is, "that one may
oppose another attempting the perpetration of a felony, if need be,
to the taking of a felon's life"; as in the case of a person attacked
by another, intending to murder him, who thereupon kills his as-
sailant. He is justified: 2 Bishop's Criminal Law, sec. 632. A dis-
tinction which seems reasonable and is supported by authority is
taken between assaults with felonious intent and assaults without
felonious intent. In the latter the person assaulted may not stand
his ground and kill his adversary, if there is any way of escape open
to him, though he is allowed to repel force by force, and give blow
for blow. In this class of cases, where there is no deadly purpose,
the doctrine of the books applies, that one cannot justify the killing
of the other, though apparently in self-defense, unless he first "re-
treat to the wall." In the former class, where the attack is made
with murderous intent, the person attacked is under no obligation
to flee; he may stand his ground and kill his adversary if need be:
2 Bishop's Criminal Law, sec. 6333, and cases there cited. And so
Mr. East states the law to be: "A man may repel force by force,
in defense of his person, habitation or property, against one who
manifestly intends or endeavors by violence or surprise to commit
a known felony, such as murder, rape, burglary, robbery and the
like upon either." In these cases he is not obliged to retreat, but
may pursue his adversary until he has secured himself from all
danger; and if he kill him in so doing, it is called justifiable self-
defense. '
"This I consider to be the correct statement of the law as fre-
quently approved in this court: State v. Matthews, 78 N. C. 523;
State v. Castle, 133 N. C. 769, 46 S. E. 1; State v. Clark, 134 N. C.
698, 47 S. E. 36; State v. Hough, 138 N. C. 663, 50 S. E. 709; Whar-
ton's Criminal Law, 9th ed., sees. 306, 487."
The Law of Self-defense is discussed at length in the notes to Stat«
▼. Gordon, 109 Am. St. Rep. 804; State v. Sumner, 74 Am. St. Bep.
717.
Unintentional Homicides in the commission of unlawful acts are con-
sidered in the note to Johnson v. State, 90 Am. St. Rep. 571-583. At
page 577 of this note will be found authorities on the criminal lia-
bility of parties to a fight, when they unintentionally kill a third
person; and at pages 581-5S3 will be found authorities on homicides
resultL&|r from the reckless use of firearms.
716 American State Reports, Vol. 115. [N. Carolina,
SAWYER V. NORFOLK AND SOUTHERN RAILROAD.
[142 N. C. 1, 54 S. E. 793.]
SLANBEB BY CORPOEATION. — Corporations may become
civilly liable for slander, (pp. 717, 718.)
CORPORATIONS — Liability for Torts. — Private corporations
are liable for their torts committed under such circumstances as
would attach liability to private persons. That the conduct com-
plained of necessarily involved malice or was beyond the scope of
corporate authority, constitutes no defense, (p. 718.)
SLANDER BY CORPORATION— Act by Servant^Test of
Liability. — The liability of a corporation for slander or other ma-
licious tort committed by its servant depends entirely on the rela-
tionship of master and servant, and the test of responsibility is
whether the slander or tort was committed by authority of the master
expressly conferred or fairly implied from the nature of the em-
ployment or the duties incident to it, and when the act is not clearly
within the scope of the servant's employment or incident to his
duties, but there is evidence tending to establish that fact, the ques-
tion may be referred to the jury to determine whether the tortious
act was authorized, (pp. 719, 720.)
SLANDER BY CORPORATION— Act of Superintendent.— If
a person goes to the oflfice of the superintendent of a corporation to
get employment, and such superintendent, after telling him that the
corporation will not employ him, proceeds to insult and defame him,
the corporation is not liable for the slander, as such act is not within
the scope of the employment of its superintendent, (pp. 720, 721.)
The alleged slander appears from the testimony of the
plaintiff Sawyer, who, prior to 1904, had worked for the de-
fendant company for several years helping to load truck at
one of its sidetracks. He testified as follows :
"Up to 1904 there had been no complaint about my work.
In this month I went to Norfolk and went in to see W. "W.
King in his office. His office was in the general office of the
defendant company. The general office is a large building,
sixty by one hundred feet, on the second floor. There was a
large room cut up into different sections by railings from
three to four feet high, and W. W. King's section was to
the left as you enter. While in his room I could see many
people at work in the several sections ; some twenty or thirty
were in sight of me, and five or six near enough to hear what
was said — these within eight or ten feet of me. I went in
Mr. King's office to see him on business, viz., to see if the
company wanted to employ me to attend to the loading and
shipping of the truck at Belcross station during the truck-
ing season, as they had done in the previous years. I asked
Sept. 1906.] Sawyer v. Norfolk etc. R. R, 717
him, when he came in, if he wanted to employ me to attend
to the loading and shipping of truck at Belcross as he had
done heretofore. He said: 'No. I don't want any such
man as you are. ' That I had robbed the company and was
doing so every chance I got. 'And as to the shortage on
potatoes you claim, they were never grown, marked, loaded,
or put in the cars. If they had been, they would have been
in there when the car got to New York. I do not intend to
pay for them. And as to the stock that has been killed by
the company, I have paid for them all.' I then told him
that I had not received the pay, if he had paid it; that it
must be in the hands of some employe or in his possession.
I had never received it. He spoke the whole conversation
in such an abrupt and insulting manner that of course I was
mad. I then went out of the office into the office of the audi-
tor, Mr. Glazier, which was the adjoining section. I had not
at that time been paid for the stock.
"I had not worked for them nor had any connection with
them since August, 1903, the close of the trucking season.
"Mr. W. W. King was the superintendent in charge of the
work — shipping truck. I had never robbed the company in
any way. I looked after the whole of the shipping at Bel-
cross on the sidetrack at my farm. I saw the truck was
properly loaded, marked, and counted, and reported to the
agent for billing purposes. Each piece was properly
counted, loaded and reported to the agent of the defend-
ant company."
At the close of plaintiff's testimony, defendant's motion
for a nonsuit was granted and plaintiff appealed.
Aydlett & Ehringhaus, for the plaintiff.
Pruden & Pruden and Shepherd & Shepherd, for the
defendant.
■• HOKE, J. There is some authority for the position
that corporations cannot in any case be held civilly liable
for slander. And it has also been held, and is so stated in
several of the text-books, that they are only so responsible
when it affirmatively appears that they expressly author-
ized the very words which form the basis of the charge.
The first position does not rest on any very satisfactory
reason and has been generally rejected ; and the second,
we think, can only be received with much qualification.
718 American State Reports, Vol, 115. [N. Carolina,
It is now well established that private corporations un-
der certain circumstances will be held liable for torts, both
negligent •* and malicious, on the part of their servants,
agents and employes. The doctrine is stated in Jaggard on
Torts, page 167, section 58, as follows: "Private corpora-
tions are liable for their torts committed under such cir-
cumstances as would attach liability to natural persons.
That the conduct complained of necessarily involved malice
or was beyond the scope of corporate authority, consti-
tutes no defense to their liability"; and this statement is in
accord with well-considered decisions in this and other
jurisdictions: Hussey v. Norfolk S. R. R. Co., 98 N. C. 34,
2 Am. St. Rep. 312, 3 S. E. 923 ; Jackson v. American T. &
Tel. Co., 139 N. C. 347, 51 S. E. 1015, 70 L. R. A. 738 ; Phila-
delphia etc. R. R. Co. V. Quigley, 62 U. S. 202, 16 L. ed. 73;
National Bank v. Graham, 100 U. S. 699, 25 L. ed. 750 , Pal-
meri v. R. R. Co., 133 N. Y. 261, 28 Am. St. Rep. 632, 30 N.
E. 1001, 16 L. R. A. 136.
According to the varying facts of different cases, the
question of fixing responsibility on corporations by reason
of the tortious acts of their servants and agents is sometimes
made to depend exclusively on their relationship as agents
or employes of the company, and sometimes the facts pre-
sent an additional element and involve some independent
duty which the corporation may owe directly to third per-
sons, the injured or complaining party. This distinction
will be found suggested and approved in 1 Jaggard on
Torts, page 257, section 85:
''Course of Employment: Another conception of the mas-
ter's liability rests on the proposition that in certain cases
the liability arises, not from relationship of the master and
servant exclusively, but also from the duty owed to plain-
tiff by defendant in the particular case in issue. In deal-
ing with cases in which the question of the liability of the
master for the tort of his servant is raised, reference should
be had not alone to the relationship of the master and ser-
vant, but also to the relationship between the master and
the third person complaining of injury. It would seem
that the scope of authority test considers too exclusively,
the form of relationship, and overlooks the latter. In
fact, one's right infringed by the wrong of another may
be in personam or in the nature ® of the right in personam.
as where a passenger complains of the torts of a carrier's
i
Sept. 1906.] Sawyer v. Norfolk etc. R. R. 719
servants, or a customer of the torts of a proprietor's ser-
vant."
And Hale on Torts, at page 147, gives the same distinc-
tion. It will be noted that the instances given by both of
these authors, under the second class, are where the con-
duct complained of on the part of the employe in the course
of his employment was. in breach of some duty which the
employer owed directly to the passenger in the one case and
the customer in the other. They had been invited upon
the premises, and were there by invitation and under cir-
cumstances which gave them the right to considerate and
courteous treatment; and, in the case of the carrier, this
obligation was further enforced and could be made to rest
on the duty arising to the public by reason of its quasi pub-
lic character, growing out of its chartered privileges, as in
Daniel v. Petersburg R. Co., 117 N. C. 592, 23 S. E. 327, 4
L. R. A., N. S., 485.
In the case at bar, however, there is no responsibility at-
taching by reason of the breach of any special duty owed to
the plaintiff by reason of his placing or by reason of the
special circumstances of the case. The plaintiff was not a
passenger, nor was he in the office by any invitation of the
company, general or special. On the contrary, he had gone
to the office to see King, the superintendent, of his own mo-
tion and for his own advantage — the men were at arm's-
length considering a business proposition affecting the
plaintiff' 's interest.
The case, then, is one where responsibility must attach,
if at all, simply and exclusively by reason of the relation-
ship which King bore to the company and the power given
him to select and employ the plaintiff as one of the com-
pany's agents. In cases of this character the responsibil-
ity of a corporation for slander or other malicious torts, by
its agents and employes in the course of their employment,
depends in its last analysis on whether the acts complained
of were authorized "^ or ratified by the company. The test
of responsibility established by the better considered author-
ities being, "whether the injury was committed by the
authority of the master, expressly conferred or fairly in-
cident to it." When such authority is express, the matter'
is usually free from difficulty; but the authority may be
implied, and on a given state of facts admitted or es-
720 American State Reports, Vol. 115. [N. Carolina,
tablished, frequently is conclusively implied, and responsi-
bility imputed as a matter of law.
In other cases, where the act is not clearly within the
scope of the servant's employment or incident to his duties,
but there is evidence tending to establish that fact, the ques-
tion may be properly referred to a jury to determine
whether the tortious act was authorized.
And, again, the absence of authority may be so clear
that it becomes the duty of the judge to determine the mat-
ter, as he did in this instance.
In Wood on Master and Servant may be found a very ex-
tensive and satisfactory discussion of this question. In
section 279, page 535, the author says: "The question usu-
ally presented is whether, as a matter of fact or of law, the
injury was received under such circumstances that, under
the employment, the master can be said to have authorized
the act ; for if he did not, either in fact or in law, he cannot
be made chargeable for its consequences, because, not hav-
ing been done under authority from him, express or im-
plied, it can in no sense be said to be his act, and the maxim
previously referred to does not apply. The test of liabil-
ity in all cases depends upon the question whether the in-
jury was committed by the authority of the master, ex-
pressly conferred or fairly implied from the nature of the
employment and the duties incident to it."
And, again, the same author, in section 307, says: "The
simple test is whether they were acts within the scope of
his employment ; not whether they were done while ® prose-
cuting the master's business, but whether they were done
by the servant in furtherance thereof, and were such as
may fairly be said to have been authorized by him. By
'authorized' is not meant authority expressly conferred,
but whether the act was such as was incident to the per-
formance of the duties intrusted to him by the master, even
though in opposition to his express and positive orders."
Applying these principles to the facts before us, we are
of opinion that the ruling of the judge below was clearly
correct. As stated, the plaintiff was voluntarily in the
office of King (the superintendent) to look after business
in his own interest, and the company owed him no inde-
pendent duty. Granting that King had power to select
and employ the plaintiff as agent of the company, when he
told the plaintiff that the company did not wish to employ
Sept. 1906.] Sawyer v. Norfolk etc. R. R. 721
him he had filled the measure of his duty; and when King
went further, whether from bad temper or malice or from
righteous indignation, and proceeded to insult and defame
the plaintiff, he was entirely beyond any authority given
him either expressly or which could be fairly implied from
the nature of his employment or the duties incident to it;
and for such conduct, therefore, King, as an individual,
and not the company, is responsible.
The general principles here applied will be found very
fully and clearly discussed in two recent opinions by this
court delivered by Mr. Justice Walker: Daniel v. Atlantic
C. L. R. R., 136 N. C. 517, 48 S. E. 816, 67 L. R. A. 455, and
Jackson v. American T. & Tel. Co., 139 N. C. 347, 51 S. E.
1015, 70 L. R. A. 738. And our disposition of this case is
sustained by well-considered decisions of the federal court
in Text-book Co. v. Heartt, 136 Fed. 129, and Washington
Gas Light Co. v. Lansden, 172 U. S. 534, 19 Sup. Ct. Rep.
296, 43 L. ed. 543.
There is nothing in Hussey v. Norfolk S. R. R. Co., 98 N.
C. 34, 2 Am. St. Rep. 312, 3 S. E. 923, that in any way mili-
tates against our present decision. That was a case in
which the complaint charged that defendant company had
maliciously slandered the plaintiff. There was a demurrer,
® which admitted that the defendant had uttered the words,
and the decision simply held, as we have here, that a corpora-
tion could under given circumstances be held responsible for
the malicious torts of its agents. The question of when or
under what circumstances the acts of the agent will be im-
puted to the company was in no way involved.
There was no error in directing a nonsuit, and the
judgment below ig affirmed.
LIABILITY OF COBPOBATIONS FOB LIBEL AND SLANDER.
L General Liability, 721.
II. Liability for Act of Agent, 723.
III. Criminal Liability, 724.
rv. Measure of Damages, 725.
V. Liability for Slander, 726.
I. Oeneral Liability.
The rule is firmly established that a corporation agjfregate may
be liable in a civil action for damaRes for publishing a malicious
libel, althof.gh necessarily the actionable act mu^t be done hy its
Am. St. Rep., Vol. 115 — 18
722 American State Reports, Vol. 115, [N. Carolina,
servant or agent: Maynard v. Fireman's Fund Ins. Co., 34 Cal. 48,
91 Am. Dec. 672; Maynard v. Fireman's Fund Ins. Co., 47 Cal. 207;
Howe Machine Co. v. Souder, 58 Ga. 64; Vinas v. Merchants' Mut.
Ins. Co., 27 La. Ann. 367; Aldrich v. Press Printing Co., 9 Minn. 133,
86 Am. Dec. 84; Peterson v. Western Union Tel. Co., 75 Minn. 368,
74 Am. St. Rep. 502, 77 N. W. 985, 43 L. R. A. 581; Bacon v. Michi-
gan Cent. R. R. Co., 55 Mich. 224, 54 Am. Rep. 372, 21 N. W. 324;
McDermott v. Evening Journal Assn., 43 N. J. L. 488, 39 Am. Rep.
606; Evening Journal Assn. v. McDermott, 44 N. J. L. 430, 43 Am.
Rep. 392; Pfister v. Sentinel Co., 108 Wis. 572, 84 N. W. 887; Phila-
delphia etc. R. R. Co. V. Quigley, 21 How. 202, 16 L. ed. 73.
A corporation may make and be held liable for making a libelous
publication, and in doing so it must act through an agent, for it can-
not act otherwise; and if there is proof that an agent, within the
scope of his authority, caused the publication to be made, or act-
ing within the scope of his authority ratified it after it was made,
the corporation is liable: Howe Machine Co. v. Souder, 58 Ga. 64.
This rule applies with especial force to corporations organized
for the very purpose of publishing newspapers and books: Detroit
Daily Post Co. v. Mc Arthur, 16 Mich. 447; Aldrich v. Press Print-
ing Co., 9 Minn. 133, 86 Am. Dec. 84; Hewitt v. Pioneer Press Co.,
23 Minn. 178, 23 Am. Rep. 680; Johnson v. St. Louis Dispatch Co.,
2 Mo. App. 565, 65 Mo. 539, 27 Am. Rep. 293; McDermott v. Even-
ing Journal, 43 N. J. L. 488, 39 Am. Rep. 606; Hoboken Printing etc.
Co. V. Kahn, 59 N. J. L. 218, 59 Am. St. Rep. 585, 35 Atl. 1053.
But the officers, stockholders or members of a publishing corpora-
tion are not liable for a libelous publication simply because of of-
ficial position or membership, but if they in any way aided, assisted
or advised its publication or circulation, or their duties as officers
or agents were of such a character as to charge them with the per-
formance of functions concerning the publication and circulation of
the paper, such duties being of such nature that the law implies
that they knew, or ought to have known, of the publication, they
are liable and cannot defend on the ground merely that they did
not know about the libel until after it was published: Pfister v.
Sentinel Co., 108 Wis. 572, 84 N". W. 889. And if a libel is published
by a newspaper corporation, the president thereof is not individually
liable therefor because of his official capacity either as president or
stockholder, in the absence of his personal participation in such
publication: Folwell v. Miller, 145 Fed. 495.
The rule that corporations may become civilly liable in damages
for libel is by no means confined to publishing corporations, how-
ever, and a railroad company may be mulcted in damages for a
malicious libel published by its agents, acting in its behalf and in
the course of its business and of their employment: Bacon v. Michi-
gan Cent. R. R. Co., 55 Mich. 224, 54 Am. Rep. 372, 21 N. W. 324;
Philadelphia etc. R. R. Co. v. Quigley, 21 How. 202, 16 L. ed. 73; and
Sept. 1906.] Sawyer v. Norfolk etc. R. R. 723
a telegraph corporation may be liable for a libel, even in punitive
damages, in transmitting over its line to different stations libelous
matter concerning a person: Peterson v. "Western Union Tel. Co., 75
Minn. 368, 74 Am. St. Eep. 502, 77 N, W. 985, 43 L. ed. 581. But
a railroad company is not liable for a libel of an employ^ published
by its general superintendent without authority from the corpora-
tion, nor is the superintendent himself responsible, when there is
no evidence submitted that the libelous article was dictated or even
inspired by him: Henry v. Pittsburgh etc. E. E. Co., 139 Pa. 289, 21
Atl. 157.
To constitute libel by a corporation, there must be malice, actual
or implied, on its part, the malice being actual when the publication
is made through motives of ill-will and with intent to injure or de-
fame, and is implied or presumed in law when the article published
is libelous per se: Taylor v. Hearst, 107 Cal. 262, 40 Pac. 392.
n. Liability for Act of Agent.
A corporation may make a libelous publication, and in doing so it
must act through an agent, for it cannot act otherwise: Howe Ma-
chine Co. V. Souder, 58 Ga. 64. But where an action against a cor-
poration is predicated upon libelous matter contained in a letter
written by its agent, a judgment against the corporation will not
be sustained where there is no evidence from which a jury could
properly infer express or implied authority on the part of the au-
thor of the letter to act as the agent of the corporation or to make
any communication in its behalf: Southern Express Co. v. Fitzner,
59 Miss. 581, 42 Am. Eep. 379. In other words, a corporation is not
liable for a libel by its agent, not in the course of his duty, nor au-
thorized nor approved by the corporation: Southern Express Co. v.
I^tzner, 59 Miss. 581, 42 Am. Eep. 379. But if there is proof that
"Xa agent of a corporation, within the scope of his authority, caused
Vit publication to be made, or, acting within the scope of his author-
Uy, ratified after it was made, the corporation is liable therefor: Howe
Machine Co. v. Souder, 58 Ga. 64. For libel committed by the agent
of a corporation in the course of its business and of his employment,
the corporation is liable in the same way and to the same extent that
an individual would be liable under similar circumstances: Philadel-
phia etc. E. E. Co. v. Quigley, 21 How. 202, 16 L. ed. 73. And a cor-
poration is responsible in damages for the publication of a libel, which
is shown to have been made by its authority, or to have been ratified
by it, or to have been made by a servant or agent in the course of the
business in which he was employed: Fogg v. Boston etc. E. E. Corp.,
148 Mass. 513, 12 Am. St. Eep. 583, 20 N. E. 109. So a corporation
is liable in damages for a libel, the publication of which was sanc-
tioned by its manager in a matter which concerned the business of
the company: Pattison v. Gulf Bag Co., 116 La. 963, 114 Am. St.
Bep. 570, 41 South. 224. Or a corporation engaged in publishing a
724 American State Reports, Vol, 115. [N. Carolina,
newspaper is answerable to a person libeled therein, to the same ex-
tent that an individual would be in making such a publication, when
the evidence plainly justifies an inference that the libelous article
was received, edited, and published by some agent of the company,
employed for that purpose: Hoboken etc. Pub. Co. v. Kahn, 59 N.
J. L, 218, 59 Am. St. Rep. 585, 35 Atl. 1053. But the editor in
chief of a newspaper owned and operated by a corporation of which
such editor in chief is president is not, individually, civilly liable
for the publication of a libel by his subordinate, of which such
editor in chief had no knowledge, and which was published during
his absence from the office: Folwell v. Miller, 145 Fed. 495; Nevin
V. Spieckemann (Pa.), 4 Atl. 497. On the other hand, it has also
been decided that the managing editor of a newspaper owned by a
corporation and published by it is equally liable with the proprietor
and publisher for the publication of a libelous article, whether he
knew of the publication or not: Smith v. Utley, 92 Wis. 133, 65 N.
W. 744, 35 L. R. A. 620. And it has also been decided that the
officers, stockholders, or members of a publishing corporation are
not liable for a libelous publication simply because of their official
position or membership, but if they in any way aided, assisted, or
advised its publication or circulation, or their duties as officers or
agents were of such a character as to charge them with the per-
formance of functions concerning the publication and circulation of
the paper, such duties being of such nature that the law implies that,
as such agents, they either knew, or ought to have known, of the
publication, they are liable, and cannot defend on the ground merely
that they did not know about the libel until after it was published:
Pfister V. Sentinel Co., 108 Wis. 572, 84 N. W. 889.
If, in a suit for libel against a newspaper corporation, it appears
that information of the falsity of the statements contained in the
article was brought home to the reporter writing the article for the
defendant corporation before the article was published, the corpora-
tion is liable, and the jury may award exemplary damages: Hatt v.
Evening News Assn., 94 Mich. 114, 53 N. W. 952.
If the agent of a telegraph company, acting within the scope of
his authority, maliciously transmits a libelous message to another
agent of the same company for delivery to a third person, the tele-
graph company is liable in punitive damages: Peterson v. Western
Union Tel. Co., 75 Minn. 368, 74 Am. St. Rep. 502, 77 N. W. 985,
43 L. ed. 581.
m. Crimical Liability.
In some jurisdictions a corporation is indictable for a libel pub-
lished maliciously by it: State v. Atchison, 3 La. 729, 31 Am. Rep.
663; Wabash P. & P. Co. v. Crumrine, 123 Ind. 89, 21 N. E. 904.
And where the corporation is subject to a criminal prosecution for
publishing the libel, no exemplary damages can be assessed against
Sept. 1906.] Sawyeb v. Norfolk etc. R. R. 725
it in a civil action based thereon: Wabash P. & P. €o. v. Crumrine,
123 Ind. 89, 21 N. E. 904.
IV. Measure of Damages.
A corporation may become civilly responsible for libel in dam-
ages, actual or exemplary, according to the circumstances of the
case: Childers v. San Jose etc. Co., 105 Cal. 284, 45 Am. St. Eep. 40,
38 Pac. 903; Missouri Pacific Ey. Co. v, Eichmond, 73 Tex. 568, 15
Am. St. Eep. 794, 11 S. W. 555, 4 L. E. A. 280. And exemplary dam-
ages may be awarded against a corporation when it is shown that it
has published a libel with express malice, through gross negligence,
or where the article published is libelous per se; Childers v. San
Jose Mercury etc. Co., 105 Cal. 284, 45 Am. St. Eep. 40, 38 Pac. 903;
Taylor v. Hearst, 107 Cal. 262, 40 Pac. 392; Hewitt v. Pioneer Press
Co., 23 Minn. 178, 23 Am. Eep. 680; Peterson v. Western Union
Tel. Co., 75 Minn. 368, 74 Am. St. Eep. 502, 77 N. W. 985, 43 L. ed.
581; Missouri etc. Ey. Co. v. Eichmond, 73 Tex. 568, 15 Am. St. Eep.
794, 11 S. W. 555, 4 L. E. A. 280; Morning Journal Assn. v. Eutherford,
51 Fed. 513, 2 C. C. A. 354, 16 L. E. A. 803; Smith v. Sun etc. Assn.,
55 Fed. 240, 5 C. C. A. 91; Cooper v. Sun etc. Assn., 57 Fed. 566.
The malice of the editor of a newspaper corporation in composing
and publishing a libelous article is the malice of the corporation,
which is liable therefor in exemplary damages: Allen v. News Pub.
Co., 81 Wis. 120, 50 N. W. 1093.
In an action against a corporation for libel, a jury is authorized
to give such exemplary damages as the circumstances require, if the
evidence shows that the publication was the result of that reck-
less indifference to the rights of others and through gross negligence:
Morning Journal Assn. v. Eutherford, 51 Fed. 513, 2 C. C. A. 354, 16
L. E. A. 803; Cooper v. Sun etc. Assn., 57 Fed. 566. Exemplary dam-
ages may be recovered in such cases, when malice on the part of
the defendant corporation is shown as a fact, either actually or by
presumption, or inference of fact from the libelous character of
the publication: Childers v. San Jose Mercury etc. Co., 105 Cal. 284,
45 Am. St. Eep. 40, 38 Pac. 903; Taylor v. Hearst, 107 Cal. 262, 40
Pac. 392. If a corporation engaged in publishing a newspaper libels
a person therein with express or implied malice, and upon retraction
being demanded, publishes a second article which may be construed
as a covert and evasive reiteration of the original charge, damages
of an exemplary or punitive character may be allowed: Hoboken P.
& P. Co. v. Kahn, 59 N. J. L. 218, 59 Am. St. Eep. 585, 35 Atl. 1053.
If in a suit for libel it appears that information of the falsity
of the statements contained in the article was brought home to the
reporter of the defendant newspaper corporation before the article
was published, the jury may properly award exemplary damages
ugainst the corporation: Hatt t. Evening News Assn., 94 Mich. 114,
726 American State Reports, Vol. 115. [N. Carolina,
53 N. W. 952. The employment of competent reporters and editors,
the supervision by proper persons of all that is to be inserted for
publication in a newspaper, and the establishment and habitual en-
forcement of such rules as would probably exclude improper items,
should exempt the corporation from any aggravation of damages
on account of the express malice of such agents, for any libel pub-
lished without the privity or approval of the corporation, but if it
appears that it was wanting in reasonable care to prevent abuses,
then it is liable for exemplary damages for its own misconduct: De-
troit Daily Post Co. v. McArthur, 16 Mich. 446. If a publishing
company prints an out of town dispatch, which is rendered libelous
by an error in transmission, punitory damages will be justified on
the ground that it was a wanton disregard of the rights of others
not to have the dispatch repeated to insure accuracy, although that
would have involved extra expense and loss of time: Press Pub.
Co. V. McDonald, 63 Fed. 238, 11 C. C. A. 155, 26 L. B. A. 53. On
the other hand, if there is no evidence that the corporation published
the libel maliciously or wantonly or through gross negligence, ex-
emplary or punitive damages cannot be recovered: Missouri Pac. B.
E. Co. V. Richmond, 73 Tex. 568, 15 Am. St. Rep. 794, 11 S. W. 555,
4 L. E. A. 280; Philadelphia etc. E. R. C«. v. Quigley, 21 How. 202,
16 L. ed. 73. Neither are punitive damages recoverable in a libel
suit against a corporation when the jury decides that all the actual
damages sustained are merely nominal: Stacy v. Portland Pub. Co.,
68 Me. 279. In a suit for libel against a newspaper corporation, in
charging plaintiff with larceny, no exemplary damages can be as-
sessed in Indiana, as under the statute in that state the defendant
is subject to a criminal prosecution for such libel. In deciding this
point the court said that "it has been a long and well-established
rule in this state that for wrongs, the commission of which subject
the wrongdoer to both criminal prosecution and civil action, ex-
emplary damages cannot be assessed: Wabash P. & P. Co. v. Crum-
rine, 123 Ind. 89, 21 N. E. 904.
V. Liability for Slander.
Although there are very few cases on the subject, the liability of
a corporation for a slander uttered by its agent seems to stand on
a different footing in some respects from its liability for a libel
published by him. As to the slander, the law deems it to arise from
the personal malice of the agent rather than from an act performed
in the course of his employment or in the interest of the corporation,
and exonerates the corporation unless it authorized, ratified or ap-
proved the slander uttered by its agent: Redditt v. Singer Mfg. Co.,
124 N. C. 100, 32 S. E. 392; Hudnell v. Eureka Lumber Co., 133 N.
C. 169, 45 S. E. 532. Thus if a corporation authorizes its state agent
to make a settlement with its subagent, it is not liable to the latter
for slanderous statements made by the former pending the settlement,
Sept. 1906.] Thompson v. Silverthorne. 727
if the corporation neither expressly nor impliedly authorized the
statements, nor ratified them: Redditt v. Singer Mfg. Co., 124 N. C.
100, 32 S. E. 392. One corporation may be held civilly liable in
damages for slandering the business of another corporation carrying
on the same business, when it expressly authorizes such slander, and
expressly employs a person to repeat such slander to and among the
plaintiff's customers: Buffalo etc. Oil Co. v. Standard Oil Co., 42
Hun, 157.
THOMPSON V. SILVERTHORNE.
[142 N. C. 12, 54 S. E. 782.]
COTENANCY — Action to Recover Possession. — A cotenant or
joint owner of personal property cannot maintain an action against
, the other tenant or owner to recover the exclusive possession thereof,
except when the property is destroyed, carried beyond the limits of
the state, or when, being of a perishable nature, such disposition of
it is to be made as to prevent the other from recovering it, and it
is not sufficient that defendant forcibly took the property from his
cotenant 's possession, (pp. 727, 728.)
PAETITION OF PERSONALTY— Injunction— Beceiver.— If,
pending a proceeding for the partition of personalty, the defendant
threatens the destruction or removal of the property, he may be
enjoined or a receiver may be appointed, (p. 728.)
W. C. Rodman, for the plaintiff.
Small & MacLean, for the defendant.
** CONNOR, J. Plaintiff sued for possession of certain
logs described in his complaint. After the testimony was
in, counsel stated to the court that he would contend that
he had by his testimony proven that the person under whom
plaintiff claimed and defendant were tenants in common of
the land from which the logs were, cut and also tenants in
common of the logs in controversy; that defendant took
them by force from his possession. His honor intimated
that if plaintiff established such state of facts he would in-
struct the jury that he was not entitled to recover; where-
upon plaintiff excepted, and submitted to a judgment of
nonsuit and appealed. The sole question presented upon
the appeal is whether his honor was correct in the instruc-
tion which he proposed to give the jury. Plaintiff con-
cedes the well-established principle that one tenant in com-
mon, or joint owner of personal property, cannot maintain
728 American State Reports, Vol. 115. [N. Carolina,
an action against the other tenant or owner to recover the
exclusive possession of the property: Grim v. "Wicker, 80
N. C. 343 ; Strauss v. Crawford, 89 N. C. 149. He calls at-
tention to the exceptions to the general rule, and contends
that he brings himself within one of them, for that defend-
ant forcibly took the logs from his possession, and he is en-
titled to be restored to his original status. Mr. Justice
Ashe, in Grim v. Wicker, 80 N. C. 343, thus states the ex-
ceptions to *'* the general principle: "The only exceptions
to this principle are when the property is destroyed, carried
beyond the limits of the state, or when, being of a perish-
able nature, such disposition of it is made as to prevent
the other from recovering it"; citing Lucas v. Wasson, 14
N. C. 398, 24 Am. Dec. 266, in which it is said: "It is not
sufficient ta show that defendant took forcible possession
of the chattel and carried it away." The principle was
applied in Shearin v. Riggsbee, 97 N. C. 216, 1 S. E. 770.
We do not think the language used by the court in that
case conflicts with the authorities cited. The right of the
plaintiff upon the facts relied upon was to have partition.
If, pending the proceeding for that purpose, the defendant
threatened the destruction or removal of the property, the
court would, upon application, have enjoined him, or, if
necessary, appointed a receiver. We concur with the rul-
ing of his honor.
The judgment of the nonsuit must be affirmed.
A Cotenant out of possession of personal property has no remedy
at law against his cotenant in possession unless the latter 's dealing
with the property amounts to a conversion: Robinson v. Dickey, 143
Ind. 205, 52 Am. St. Rep. 417. As to the liability of one cotenant
to the other for a conversion of timber, see Sullivan v. Sherry, 111
Wis. 476, 87 Am. St. Rep. 890; Leader v. Plante, 95 Me. 343, 85 Am.
St. £ep. 418; Wing v. Milliken, 91 Me. 387, 64 Am. St. Rep. 238.
Sept. 1906.] Lane v. Fidelity Mut. Life Ins. Co. 729
LANE V. FIDELITY MUTUAL LIFE INSURANCE COM-
PANY.
[142 N. C. 55, 54 N. E. 854.]
INSURANCE, LIFE. — Forfeiture of Policy — ^Reinstatement. —
If an insured person has forfeited his policy of life insurance by
the nonpayment of dues, and has then complied with a provision in
the policy that "delinquent members may be reinstated if approved
by the medical director and president by giving reasonable assur-
ance that they are in good health," but the officers of the insurance
company decline to approve his application, he is not entitled to re-
cover damages for the cancellation of his policy and refusal to re-
instate him, in the absence of any showing that the action of such
officers was fraudulent or arbitrary, (pp. 729, 730.)
INSURANCE, LIFE — Forfeiture of Policy — Reinstatement. —
A provision in a policy of life insurance that delinquent members
may be reinstated if approved by the medical director and presi-
dent, by giving reasonable assurance that they are in continued
good health, is valid and reasonable, and the required approval is
not merely a ministerial act, but involves the exercise of judgment
and discretion, (p. 730.)
W. D. Mclver and 0. H. Guion, for the plaintiff.
Hinsdale & Son and W. W. Clark, for the defendant.
'*'' WALKER, J. It is conceded that the plaintiff, un-
der the terms of the contract of insurance, ^^ had forfeited
his policy and consequently his membership by the non-
payment of his annual dues. He had no right to be re-
stored to his former relation without the consent of the de-
fendant, and then only upon the terms and conditions pre-
scribed by it. There is a provision in this policy by which
the plaintiff could be reinstated as a member and policy-
holder, but the condition precedent was imposed that his
application for reinstatement shall first be approved by the
president and medical director of the company, and that
that he shall give reasonable assurance that he is still in
good health.
It seems clear to us that the approval required in the case
is something more than a mere ministerial act and involves
the exercise ot judgment and discretion: State v. Smith,
57 Pac. 449. The word "approve" is "to regard or pro-
nounce as good; think or judge well of; admit the pro-»
priety or excellence of; be pleased with; commend": Web-
ster's International Dictionary; 1 Words and Phrases, Jud.
Del, 475. In the absence, certainly, of any showing that
730 American State Reports, Vol. 115. [N. Carolina,
the approval of the officers has been fraudulently withheld
and that their denial of the application is purely arbitrary,
we do not see why their refusal to reinstate the plaintiff is
not fatal to his right of recovery in this action. We are not
called upon in this case to say under what circumstances, if
any, we would decide that the action of the officers desig-
nated to pass upon the application of a delinquent member
could be investigated, with a view to ascertain whether they
have exercised their judgment properly or have unreason-
ably deprived him of any right to which he is entitled un-
der the terms of his contract and the by-laws of the com-
pany. Where there is no suggestion of fraud or other legal
wrong, there can be no valid reason why the applicant
should be permitted to attack the soundness of their judg-
ment or the justness of their conclusion. We must hold it
to be right, and unassailable in any such manner, because
the parties have solemnly agreed that *** the matter shall
be decided in that way, and we have no power to change
their contract; and, besides, the power lodged with those
officers is consistent with the purposes of the organization,
and its exercise is necessary for the protection of the rights
of other members and is not otherwise at all inconsistent
with reason and justice. A provision for approval by offi-
cers most likely to know the facts is one which would natu-
rally be suggested to those engaged in the prudent manage-
ment of the affairs of the association as essential to con-
serve the interests of ail parties concerned. The validity
of such a clause in policies of this kind has been sustained
by numerous authorities, and there are none, we believe,
to the contrary: 2 Joyce on Invsurance sec. 1276; 2 Bacon
on Benefit Societies, sec. 385c ; Butler v. Grand Lodge, 146
Cal. 172, 79 Pac. 861; Saerwin v. Jamon, 65 N. Y. Supp.
501; Coniff V. Jamour, 65 N. Y. Supp. 317; Brun v. Supreme
Council, 15 Colo. App. 538, 63 Pac. 796 ; McLaughlin v. Su-
preme Council, 184 Mass. 298, 68 N. E. 344.
As the policy had been forfeited and plaintiff's connec-
tion with the defendant had been severed by his own de-
fault, he had no right to be readmitted to membership, but
his reinstatement was then dependent upon the mere favor
of the company, which could be extended to him subject
to such terms as it deemed necessary for its protection.
The very question was decided in Harrington v. Keystone
Mut. Ben. Assn., 190 Pa. 77, 42 Atl. 523, in which it appeared
Sept. 1906.] Lane v. Fidelity Mut. Life Ins, Co. 731
that the executive committee was "empowered" to reinstate
a delinquent member. The court there said: "Conceding,
for the purpose of argument, that her application was in
time, and that she complied or was ready and willing to
fully comply with all the terms and conditions of the by-
laws above quoted, it does not follow that the committee
was bound to reinstate her to membership in the association.
While the by-laws empowered them to grant her request,
they were not bound nor could they be compelled to do so.
It neither clothed her with any legal or equitable right, nor
did it impose any duty or obligation ^^ on the association
that would enable her, as a delinquent member, to maintain
this action."
While it may not be necessary for us to go to the extent
the court did in that case, we yet think our case is stronger
than that one so far as the discretionary nature of the
power is concerned. In the case of Lovick v. Providence
Life Assn., 110 N. C. 93, 14 S. E. 506 (cited and relied on
by the plaintiff's counsel), the policy provided that the de-
linquent should have the "opportunity for reinstatement
on similar conditions," the context showing clearly that
the term "similar conditions" had reference to the pay-
ment of past-due premiums, assessments, and other in-
debtedness. By opportunity we mean "fit or convenient
time ; suitable occasion ; time or place favorable for exe-
cuting the purpose or doing the thing in question": Web-
ster's International Dictionary. It was, therefore, properly
held in Lovick 's case (110 N. C. 93, 14 S. E. 506), that if
the plaintiff seasonably tendered the back dues, he was en-
titled to reinstatement, and, being thus entitled, he could
recover the premiums paid, if the company refused to re-
instate him. There was nothing in the policy then being
construed which required the approval of the company or
any of its officers as a condition precedent to the rein-
statement or the exercise of any discretion or judgment.
The court charged in this case that if the plaintiff applied
for reinstatement and was refused after he had furnished
proof of his good health, the first issue should be answered
"Yes." In this there was error. The instruction excludes
altogether from the consideration of the jury the question
of approval by the president and medical director, and
makes the recovery depend entirely upon the applieation
and proof of good health, contrary to the very terms of the
732 American State Reports, Vol. 115. [N. Carolina,
policy, and without any reference to the other valid pro-
visions of the by-laws. This of itself entitles the defendant
to a new trial. But as there was no evidence to warrant a
verdict for the plaintiff, the court should have granted the
defendant's motion to nonsuit, and dismissed the action,
and there was ®* error in refusing to do so. It is not neces-
sary now to discuss the interesting question presented by
the defendant's exception in regard to the statute of limi-
tations, in view of the decision we have already made, that
there has been no revival of the policy.
Error.
"For Authorities upon the right of an insured person to reinstatement
after a suspension or forfeiture of his policy, and the effect of such
reinstatement, see the note to Lake v. Minnesota etc. Assn., 52 Am.
St. Eep. 577; Pacific Mut. Life Ins. Co. v. Galbraith, 115 Tenn. 471,
112 Am. St. £ep. 862.
IVES v. ATLANTIC AND NORTH CAROLINA RAIL-
ROAD COMPANY.
[142 N. C. 131, 55 S. E. 74.]
STATXTTE OF FEAUDS. — Growing Trees are a part of the
realty, and a contract to sell or convey them, or any interest in or
concerning them, must be reduced to writing, (p. 735.)
STATUTE OF FRAUDS — Contract for Cordwood. — A contract
to cut and convert trees growing on land belonging to a railroad
company into cordwood, and for the delivery thereof on the railroad
right of way, does not contemplate the transfer of any title to or in-
terest in growing trees as they stand upon the land, and is therefore
not within the statute of frauds, (p. 735.)
STATUTE OF FRAUDS — Contract to Cut and Deliver Grow-
ing Trees. — A contract by the owner of land to cut growing timber
therefrom, and when severed from the freehold to deliver it to an-
other for a stipulated price, is not within the statute of frauds, (p.
736.)
TRIAL — Challenges to Jurors. — A party to an action cannot
make a valid exception to the ruling of the court sustaining the
other party's objection to a juror where the first party has not ex-
hausted his peremptory challenges, and it appears that the jury
chosen to try the case constituted a panel entirely acceptable to both
parties, (pp. 737, 738.)
EVIDENCE — Breach of Contract. — In an action to recover for
breach of contract, evidence that one of the parties borrowed money
to enable him to fulfill his contract is admissible upon the issue as
to his ability and readiness to perform his part of the agreement,
(p. 738.)
Sept. 1906.] Ives v. Atlantic etc. R. R. CJo. 733
EVIDENCE — Breach of Contract — Act of Agent.— In an ac-
tion to recover for breach of contract, evidence of what defendant's
agent especially deputed to make and execute such contract said
and did in that particular transaction is admissible, (p. 738.)
TRIAL — Instmctions. — A party desiring more definite instruc-
tions must make a special request for them. (p. 739.)
D. L. Ward and W. W. Clark, for the plaintiff.
W. C. Munroe, P. M. Pearsall, A. D. Ward and 0. H.
Guion, for the defendant.
*** WALKER, J. The action was brought to recover
damages for breach of an oral contract between the parties
by which the plaintiff *^^ agreed to cut for the defendant
and deliver along its right of way fifteen thousand cords of
wood, three thousand cords of which were to be cut from
the plaintiff's land and the balance from the land of the de-
fendant. For the three thousand cords the defendant
agreed to pay two dollars per cord and for the remainder
one dollar and seventy-five cents per cord; the defendant, as
to the latter, being allowed a deduction on the price of
twenty-five cents per cord for what is called "stumpage,"
that is, for the trees furnished by it or cut on its land.
Plaintiff cut five thousand and ninety cords, for which he
was paid, and he cut and was ready to deliver five thousand
one hundred and eighty-four cords, and has cut and de-
livered seven hundred and forty-eight cords, for which he
was not paid, making ten thousand nine hundred and eighty-
six cords, and leaving uncut four thousand and fourteen
cords. There were eleven hundred and forty of the five
thousand and ninety cords which were not delivered on
the right of way, because it was already full of other wood
and there was no room for it. This was hauled by plain-
tiff to his tramway and was ready for delivery, when de-
fendant directed that it should be inspected and paid for.
Six hundred cords of it were afterward delivered on the
right of way. The plaintiff alleged that he had been pre-
vented from complying fully with his part of the contract
by the wrongful acts of the defendant, although he was at
all times ready, able and willing to do so; and there was
evidence tending to support the allegation. There was evi-
dence tending to show that the plaintiff had not complied
in all respects with the contract on his part. It was also
in evidence that there had been no breach of the contract
by the defendant, until after the road was leased, the former
734 American State Reports, Vol. 115. [N. Carolina,
president of the defendant company stating that he would
have carried out the contract fully had he been continued
in office. The defendant pleaded a counterclaim consisting
of eleven hundred and ninety-three dollars paid to the plain-
tiff for the eleven hundred and forty cords of wood cut from
its land, which it alleged had not been delivered on the right
of way and which had become worthless, and two hundred
and eighty-five dollars for stumpage and four hundred and
thirteen dollars and forty cents for quarters erected for the
plaintiff's hands at his request, making in all two thousand
six hundred and ninety-one dollars and forty cents ; and there
was some evidence to sustain the demand.
**^ The plaintiff objected to a juror, N. H. Russell, upon
the ground that he was now in the employ of the lessee of
the defendant and had formerly been in its employ, the said
lessee being responsible under its contract with the defend-
ant for any recovery against the defendant. The objec-
tion was sustained, and the defendant excepted. The plain-
tiff was permitted to prove by one J. A. Meadows, over the
defendant's objection, that he had advanced thirteen thou-
sand dollars to the plaintiff to enable him to carry out
this contract, and that the defendant still owed him seven
thousand three hundred dollars on the debt. This evi-
dence was introduced solely for the purpose of showing that
the plaintiff was ready and able to perform his part of the
contract. Many other exceptions were taken by the de-
fendant to the rulings and to the charge of the court, but
it is not necessary to make any special reference to them
here, as they are noticed in the opinion. The issues, with
the answers thereto, were as follows:
"1. Did the defendant contract with the plaintiff as al-
leged in the complaint? A. Yes.
"2. Did defendant fail .to perform said contract on its
part, as alleged in the complaint? A. Yes.
"3. What sum, if any, is the plaintiff entitled to recover
of defendant on account of said alleged breach? A.
$8,106.90.
"4. Did the plaintiff carry out and perform said contract
on his part? A. Yes.
"5. What sum, if any, is the defendant entitled to recover
of the plaintiff on account of his failure to perform his con-
tract, as alleged by defendant? A. Nothing."
Sept. 1906.] Ives v. Atlantic etc. R. R. Co. 735
Judgment was entered upon the verdict, and the defend-
ant appealed.
*3* It may now be taken as settled that growing trees are
a part of the realty, and a contract to sell or convey them or
any interest in or concerning them must be reduced to writ-
ing. They are fructus naturales, and being rooted in the
soil are by nature as much annexed to the freehold as any
permanent fixture can be: Scorell v. Boxall, 1 Younge &
J. 396; Carrington v. Roots, 2 Mees. & W. 254; Rodwell v.
Phillips, 9 Mees. & W. 501 ; Evans v. Roberts, 5 Barn. & C.
829. The course of judicial decision in England upon this
subject, from the time of the dictum of Treby, C. J., in
Anonymous, 1 Ld. Raym. 182, to the latest period, will be
found well stated in Reed on the Statute of Frauds, sections
707, 711. We have adopted the rule as given in the cases
above cited, and a contract for the sale of standing timber
has always been considered by us as within the meaning and
intent of the statute: Brittain v. McKay, 23 N. C. 265;
Mizell V. Burnett, 49 N. C. 249, 69 Am. Dec. 744; ]\roring
V. Ward, 50 N. C. 272; Flynt v. Conrad, 61 N. C. 190, 93
Am. Dec. 588; Green v. North Carolina R. R. Co., 35 Am.
Dec. 738, 73 N. C. 524; MizzeU v. Ruffin, 118 N. C. 69, 23
S. E. 927. The question was directly presented and decided
in Drake v. Howell, 133 N. C. 162, 45 S. E. 139, and Hawk-
ins V. Goldsboro Lumber Co., 139 N. C. 160, 51 S. E. 852.
But the contract of the parties to this action was not one
for the sale of standing trees, but, in the one case, for the
sale and delivery of cordwood, and, in the other, for the
conversion of trees growing on the defendant's land into
cordwood and the delivery of the same on the defendant's
right of way. It was not contemplated by the parties that
there should be a transfer of any title to or interest in the
trees as they stood upon the land; and this is es.sential to
bring the agreement within the purview of the statute: 29
Am. & Eng. Ency. of Law, 2d ed., 880.
In Washburn v. Burrows, 1 W. H. & G. (Exch.) 115,
Rolfe, B., for the court, said that where the vendor, wlio is
the owner of the soil, sells what is growing on the hmd.
whether natural produce (prima vestura), such as timber,
'*' grass, herbage or apples, or the annual fruits of in-
dustry (fructus industriales), as corn, pulse, or the like,
736 American State Reports, Vol. 115. [N. Carolina,
on the terms that he (the vendor) is to cut or sever them
from the land and then deliver them to the purchaser, the
latter acquires thereby no interest in the soil, "which in
such case is only in the nature of a warehouse for what is
to come to him merely as a personal chattel."
It was ruled in the leading case of Smith v. Surman, 9
Barn. & C, 561, that where the owner of land agreed with
another to cut timber from his own land and deliver the
trees, when cut down or severed from the freehold, to the
latter for a stipulated price, the statute did not apply; and
the particular agreement, in that case, being construed to
have the said effect in law, was therefore held not to be
within the statute. And the converse of the proposition is
equally true, that where one contracts with another to cut
timber from his land and deliver it to him when cut or sev-
ered, the statute has no application. It has been so ex-
pressly decided: Killmore v. Howlett, 48 N. Y. 569; Forbes
v. Hamilton, 2 Tyler, 356; Scales v. Wiley, 68 Vt. 39, 33
Atl. 771; Green v. Armstrong, 1 Denio, 550; Boyce v,
Washburn, 4 Hun, 792; 2 Reed on Statute of Frauds, sec.
711, The courts properly said in the cases cited that to
give the statute the construction contended for would be
to destroy the right of recovery of almost every laborer
at harvesting or mowing, which generally and almost uni-
versally rests on a parol contract, and, further, that it
would make a writing indispensable to the validity of a
contract by the owner of a peat-bed or a sand-bank to de-
liver even a load from it; and, we may add, it would
jeopardize the rights of every woodman who for hire fella
trees in the forest. The construction is utterly inad-
missible.
It has been said in some cases, following a dictum of
Littledale, J., in Smith v. Surman, 9 Bam. & C, 561, that if
the trees are sold by the vendor, who is the owner of the land
upon which they *^® are standing, to the vendee, with a stipu-
lation that they must be cut and removed at once, or within
a reasonable time, the trees will be regarded as chattels,
and the contract will therefore not be within the statute;
and this because of the shortness of the time given for cut-
ting and removing them: Marshall v. Green, L. R. 1 C.
P. D. 35. This distinction is scholastic, if not arbitrary.
It partakes more of formalism than it does of sound logic
Sept. 1906.] Ives v. Atlantic etc. R. R. Co. 737
and cogent argument. "We would not cite this class of
decisions in support of our ruling in this case, as we can-
not assent to the reasoning and conclusion of the courts in
them. "While they may seem to be in point, they really
are not, as there the trees themselves, as standing timber,
were sold to the vendee. Here they were not. The ques-
tion as to whether the statute applies should not be de-
termined by the mere accident that time is given to sever
the trees or other growth, but by the nature of the thing,
as being or not being a part of the freehold. This is the
better reason and ground for decision, and it was so con-
sidered by Lord Ellenborough in Crosby v. "Wadsworth,
6 East, 602, wherein the court held an agreement, that the
plaintiff should enter the defendants' land and cut and carry
away a crop of grass, to be for an interest in land, because
"conferring an exclusive right to the vesture of the soil during
a limited time"; and to the same effect is Scorell v. Boxall, 1
Younge & J. 396, and Killmore v. Howlett, 48 N. Y. 569,
already cited by us, and numerous other cases decided by
courts of high authority: 28 Am. & Eng. Ency of Law, 2d
ed., 540, and note 6; 29 Am. & Eng. Ency. of Law, 889,
and note 5, w^here the authorities are collected. At any
rate, the cases which hold that as the time fixed for cutting
and removal shows whether or not it was intended that the
trees or other growth should receive further nutrition from
the soil, it should control in the decision of the question,
are at variance with the reason assigned by this court for
its ruling that contracts for the sale of standing trees are
within the statute. "What is the law, in this respect,
^^"^ with regard to the fruits of industry (fructus indus-
triales), is not now before us: Flynt v. Conrad, 61 N. C. 190,
93 Am. Dec. 588. Our opinion is therefore against what ap-
pears to be the main contention of the defendant, that
the contract is void because it was not in writing; for this
is a contract not for the sale of treas, but merely for the
cutting of them into cordwood. It is simply a contract
for employment and not for any interest in the article
upon which the labor is to be bestowed. This is the practi-
cal view and accords with the intention of the parties.
The defendant is not in a position to except to the rul-
ing of the court sustaining the objection to the juror. It
had not exhausted its peremptory challenges, and, so far as
Am. St. Rep., Vol. 115—47
738 American State Reports, Vol. 115. [N. Carolina,
appears, the jury chosen to try the case constituted a panel
entirely acceptable to both parties. The purposes of jus-
tice and ends of the law are equally attained when a fair
and impartial trial has been secured to the complaining
party. The right of challenge confers not a right to select,
but a right only to reject. This is so in theory and it
should be so in practice: State v. Gooch, 94 N. C. 987;
State V. Hensley, 94 N. C. 1021; State v. Jones, 97 N. C.
469, 1 S. E. 680; State v. Freeman, 100 N. C. 429, 5 S. E.
921; State v. Pritchett, 106 N. C. 667, 11 S. E. 357; State
V. Brogden, 111 N. C. 656, 16 S. E. 170; State v. McDowell,
123 N. C. 764, 31 S. E. 839. If an unobjectionable jury
was secured, how does it concern the defendant that a juror
was improperly rejected, if such was the case, which we
need not decide? The question in the form here presented
was decided against the defendant's contention in State v.
Arthur, 13 N. C. 217.
The testimony of the witness J. A. Meadows was compe-
tent and also relevant to the issues being tried. The fact
that he loaned the plaintiff money to enable him to fulfill
his contract was surely some evidence bearing upon the
issue as to the plaintiff's ability and readiness to perform
his part of the agreement. Some of this money he had
already used and a balance of seven thousand three hun-
dred dollars still remained with which he expected to *^*
complete the work. We are at a loss to know why this testi-
mony was not relevant. The fact, if it be one, that its
effect would be to make Meadows the real plaintiff, is not
any legal objection to it.
The defendant objected to evidence of the conversation be-
tween plaintiff, Bryan and Carlyle, as to the delivery of the
eleven hundred and forty cords, in which Bryan agreed that
he need not deliver it on the right of way and ordered that
it should be paid for as it then stood. This is not the
declaration, after the fact, of an agent, but merely the re-
lation of what Bryan, as chief executive officer of the de-
fendant— that is, its president, and, too, its agent, specially
deputed to make the contract and to see to its proper exe-
cution— had said and done in the course of his employ-
ment. It was a part of the very transaction involved in
this dispute, and a statement made by Bryan while acting
for the defendant, and dum fervet opus. Smith v. North
Sept. 1906.] Ives v. Atlantic etc. R. R. Co. 739
Carolina R. R. Co., 68 N. C. 107, and the other l^ce cases
do not therefore apply.
The defendant's counsel further contend that as the
plaintiff had delivered only six hundred of the eleven hun-
dred and forty cords on the right of way, leaving five hun-
dred and forty undelivered, and as he had delivered only
one other lot of seven hundred and forty-eight cords (ex-
clusive of the five thousand and ninety cords), making
thirteen hundred and forty-eight cords so delivered, and as
the defendant paid for eleven hundred and forty cords, the
plaintiff is entitled to recover only the difference, or the
value of two hundred and forty-eight cords. The court
charged the jury fully with reference to this matter, and
told them that the value of the two hundred and forty-eight
cords was the measure of the plaintiff's recovery, "if they
should find the facts to be according to the defendant's con-
tention. ' '
The court, we think, went to the extreme limit in favor of
the defendant. The defendant's prayer excluded entirely
from the consideration of the jury the evidence introduced
by the plaintiff to show that the defendant had waived a
delivery on the right of way and that it had in several
respects deliberately *^® broken the contract. The jury
have found as a fact from the evidence that there was no
valid reason for refusing to receive the entire lot of wood
and providing a proper place for its storage.
We were told on the argument, and it is so stated in one
of the briefs, though it does not appear in the record, that
after the lease was made the defendant no longer needed
the wood, as the engines were changed from wood to coal
burners. This, if it be true, was of course no excuse for
the breach, nor does it clearly appear that there was any
other good reason for refusing to receive the wood or for
breaking the contract in any other respect, the former
president of the defendant company having testified that
the wood would have been accepted and paid for and the
contract carried out if he had continued in office, and the
jury having adopted the plaintiff's version of the facts.
We refer to these matters to show that in submitting the
case to the jury, the court has given the defendant the
benefit of every po.ssible contention in respect to them, and
this is true with reference to all questions involved.
740 American State Reports, Vol. 115. [N. Carolina,
The ^ther exceptions of the defendant are numerous,
but they are not of such a nature as to require any ex-
tended discussion of them. They relate, in one form or
another, to the refusal of the court to give more explicit
instructions and to explain the relative rights and obliga-
tions of the parties under the contract. It has been so re-
peatedly held by this court, that if a party desires more
definite instructions he must make a special request for
them, that the citation of authority to support the rule is
hardly required: Simmons v. Davenport, 140 N. C. 407,
53 S. E. 225. But it must not be inferred that we think
the criticism of the charge is warranted, for we are not of
that opinion. The instructions were clear and compre-
hensive, embracing every possible phase of the case which
was material and should have been submitted to the jury.
140 ^g (Jq qqI; doubt that the jury, which the parties ap-
pear to have regarded as fair and intelligent, got a per-
fect understanding of the facts and the law as explained
by his honor.
We have discussed the exceptions chiefly relied on in the
argument before us. The others are, we think, without
merit. The case has been fairly and correctly tried and
the defendant must abide by the result.
No error.
Contracts for the Sale of standing timber are generally regarded as
within the statute of frauds, since the trees are regarded as a part
of the realty: Antrion Iron Works v. Anderson, 140 Mich. 702, 112
Am. St. Rep. 434; Hodson v. Kennett, 73 N. H. 225, 111 Am. St. Eep.
607; Alabama Mineral Land Co. v. Jackson, 121 Ala. 172, 77 Am.
St. Eep. 46; Hirth v. Graham, 50 Ohio St. 57, 47 Am. St. Rep. 641.
It seems, however, that contracts for the sale of growing wood or
timber, to be presently cut and removed from the land by the pur-
chaser, are not construed to convey any interest in the land, but as
executory agreements for the sale of timber after its severance from
the soil and conversion into personalty, with a license to enter upon
the land for the purpose of cutting and removing the timber. There-
fore, such contracts are said not to be within the statute of frauds:
See Emerson v. Shores, 95 Me. 237, 85 Am. St. Eep. 404, and cases
cited in the cross-reference note thereto.
Oct. 1906.J Peery v. Hackney. 741
PERRY V. HACKNEY.
[142 N. C. 368, 55 S. E. 289.]
DEEDS— Effect of Alteration. — If a deed conveying land to
a certain person is properly acknowledged, and subsequently the name
of the grantee is stricken out and that of his wife inserted, without
the knowledge or consent of the grantor, and the deed is then re-
corded, it is not, in its altered form, binding on the grantor, and does
not transfer any title to the original grantee's wife. (p. 742.)
EJECTMENT — Pro Forma Party — Recovery on Equitable
Title. — In an action of ejectment by a wife to which her husband
is made a party only pro forma, with no allegation of any title in
him, he is not entitled to recover on proof that he holds the equi-
table title, (p. 743.)
WILLS — Devises — Rule in Shelley's Case. — If a testator de-
vises to his devisee "the use, benefit and profit" of his land during
her natural life and to the lawful heirs of her body after her death,
this is sufficient to pass an estate in the land, and the rule of "Shel-
ley's Case" applies, (p. 744.)
"Womack, Hayes & Bynum, for the plaintiff.
n. A. London & Son, for the defendant.
'-^^ WALKER, J. The feme plaintiff sued to recover
a tract of land, and her husband was joined with her pro
forma, there being no allegation in the complaint of his
title or right of possession. The sole allegation was that
the wife owned the land and was entitled to the possession
thereof, and the prayer was that she be declared to be the
owner and that she recover the possession. It is presumed,
of course, that the case was tried upon the only issue raised
by the pleadings, the issue upon which it actually was tried
not being set out in the record. It was admitted that
Stepheness Chambless owned the land, and that he died
leaving a will by which he devised it in the following terms:
"I will and bequeath unto Nancy Richardson the use and
benefit and profit of all my estate, real, personal and mixed,
of every species and description whatever during her natu-
ral life, and to the lawful heirs of her body after her
death." Nancy was his granddaughter. She died about
six years ago, leaving her surviving three children, John,
Hannah and Sarah. Hannah conveyed the land to J. W.
Perry, one of the plaintiffs, by deed dated Au}j;ust 7, 1878,
and sufficient in form to pa.ss the entire estate in the prem-
ises. This deed was acknowledged by the grantor, and
742 American State Reports, Vol. 115. [N. Carolina,
afterward the name of J. W. Perry, the original grantee,
was stricken out and that of his wife, M. E. Perry, in-
serted without the consent or knowledge of the grantor,
and, in this form, it was registered. There was testi-
mony as to the possession of the property, which need not
be stated, as in the view taken of the case it has become
immaterial. There was evidence that Nancy Richardson con-
veyed the land to Elizabeth Hackney, mother of the defend-
ant. The plaintiff introduced the will of Stepheness Cham-
bless and the deed of Hannah J. Richardson in evidence.
The court held that the deed did not convey any title to the
feme plaintiff and, on motion, dismissed ^''^ the action, under
the statute. The plaintiff excepted and appealed.
The first question raised is the sufficiency of the deed of
Hannah Jane Richardson to pass title to the feme plaintiff.
The deed was originally made to John W. Perry, his name
was erased and that of his wife inserted in its place, and, as
thus altered, it was registered. The deed, therefore, which
was made to John W. Perry, has never been registered, and
the deed which was registered was not the one made by
Hannah Jane Richardson. A deed presupposes a contract,
and, indeed, is itself an executed contract, passing the equi-
table title after delivery and before registration, the lat-
ter taking the place of livery of seisin to the grantee, and
after registration the seisin or legal estate also passes: Davis
V. Inscoe, 84 N. C. 396; Hare v. Jernigan, 76 N. C. 471;
Respass v. Jones, 102 N. C. 5, 8 S. E. 770. The deed be-
fore registration may be redelivered or surrendered, as the
cases we have already cited show, and a deed made by th.3
grantor to a new grantee, at the request of the first grantee,
if there is no fraud or other vice in the transaction. But
that is not our case. A contract requires the assent of two
minds to one and the same thing, and so, as to a deed,
says Blackstone, for it is essential to its validity that there
should be parties able and willing to contract and be con-
tracted with for the purposes intended by the deed and a
thing or subject matter to be contracted for, all of which
must be expressed by the parties in their deed. It therefore
follows that there must be a grantor, a grantee and a thing
granted, and in every lease, a lessor, a lessee and a thing
demised : 2 Blk. 295-297. Consent, which is the vital element
of every contract, is wanting here. Hannah J. Richardson
Oct. 1906.] Pekby v. Hackney. 743
•'^^ never agreed to be bound by a conveyance to the person
whose name was inserted in the deed after its execution by
her. She had an undoubted right to determine, by the
exercise of her contractual right of selection, to whom she
would convey the land. There is another reason why the
deed to the feme is not good. A deed must always be consum-
mated by delivery, which is the final act of execution, and
this delivery must be either actually or constructively
made by the grantor to the grantee. There has been no
delivery by the grantor to Mrs. Perry. The only contract, so
far as she is concerned, if there was any at all, was between
her husband and herself, and the only delivery by him to
her, and that even was not the delivery of a deed, in the
sense of the law, but of a paper writing having no legal effi-
cacy as an instrument passing title. We, therefore, hold
that the deed to J. W. Perry, when altered by the insertion
of his wife's name, was not binding on the grantor, and did
not transfer any title to her: Jones v. Respass, 102 N. C.
5, 8 S. E. 770; Hollis v. Harris, 96 Ala. 288, 11 South. 377;
Hill V. Nesbit, 58 Ga. 586. The deed was afterward restored
to its original form by the reinsertion of the name of J. W.
Perry, It may be that he could have recovered on his
equitable title, if this was his suit, and he had properly
pleaded and relied on his title: Murray v. Blackedge, 71 N.
C. 492 ; Condry v. Cheshire, 88 N. C. 375 ; Farmer v. Daniel,
82 N. C. 152. But it is in fact his wife's suit, to which he is
made a party only pro forma, and there is no allegation in the
complaint to which proof of his equitable interest can ap-
ply. It is familiar learning that there must be allegation as
well as proof, and they must correspond. There was no re-
quest for an amendment, if one could have been allowed
under the circumstances, which we do not decide.
This disposes of the appeal and affirms the judgment, but
the counsel have asked us to pass upon the other question as
to the construction of the will of Stepheness Charabless, in
"^* order to prevent further litigation. As we have a de-
cided opinion upon that matter, we will do so, for it may
enable the parties to adjust their differences.
The appellant contends that only a life estate was given
to Nancy Richardson by the will, as the land was not de-
vised, but merely its "use, benefit and profit." and for this
reason the rule in Shelley's Case does not apply. We think
744 American State Reports, Vol. 115. [N. Carolina,
the words are sufficient to pass the estate in the land and
that the rule does apply. The words "all my rents" were
held sufficient to pass real estate; for it was said to be ac-
cording to the common phrase and usual manner of some
men, who name their lands by their rents: 3 Gr. Cruise,
2d ed., p. 229 (7 Cruise, 176). So a devise of the "rents,
issues and income" of lands was held to pass the land itself:
Anderson v. Greble, 1 Ashm. 136. A person having let sev-
eral houses and lands for years, rendering several rents, de-
vised as follows: "As concerning the disposition of all my
lands and tenements, I bequeath the rents of D. to my wife
for life, remainder over in tail." The question being
whether, by this devise, the reversions passed with the rents
of the lands, it was resolved that they did, as that was clearly
the intention, and the will should be construed according to
the intent to be gathered from its words: Kerry v. Der-
rick, Cro. Jac. 104; Allan v. Backhouse, 2 Ves. & B. 74. A
devise of the income of land was held to be in effect a devise
of the land (Reed v. Reed, 9 Mass. 372) ; so a devise of the
"rents, profits and residue" of the testator's estate received
a like construction : Den v. Drew, 14 N. J. L. 68. In Parker
v. Plummer, Cro. Eliz. 190, a devise in the following words:
"I will that my wife shall have half the issues and profits of
the land during her life," the question being whether she
had any interest in the premises or was only entitled to have
an account of rents. It was determined that she had an es-
tate, "for to have the issues and profits and the land were
all one, ' ' and the same was held with respect to a devise of a
"moiety ^'^ of the rents, issues and profits of my estate,"
the words being equivalent to a devise of the estate in fee:
Stewart v. Garnett, 3 Sim. 398. See, also, Beekman v. Hud-
son, 20 Wend. 53; Cook v. Gerrard, 1 Saund. 186c; Whi1>
tome V. Lamb, 12 ]\Iees. & W. 813 ; Mannox v. Greener, L. R.
14 Eq. 456. The language of this will is much stronger to
show an intention to devise the land itself than was that used
in any of the cases cited. It appears that he gave to the heirs
of her body precisely the same interest that he gave to the
life tenant. If he intended that they should have the cor-
pus, why should not the mother also have it, by the same
construction of his words? The law searches for the inten-
tion of the testator and executes it when discovered, without
any special regard to the particular manner of expressing
Oct. 1906.] Perry v. Hackney. 745
it, testators generally being inops consilii. In this case,
there is no reference to the corpus, either in the first or sec-
ond limitation, but each, as to the subject of the devise, is
couched in the same terms. No trustee is appointed to hold
the les^al title, and it cannot be supposed that the testator
intended the legal title to remain in his heirs forever for
the "use, benefit and profit" of those named in the will.
Those words are appropriate in law, as the authorities show,
to create a beneficial interest in the land, and show clearly
an intention to do so. There is no apparent reason for keep-
ing the legal and beneficial interest apart, and we must pre-
sume that they were intended to go together to the object of
the testator's bounty. But if the testator ever withheld the
legal estate and it descended to his heirs, he used words fit,
and sufficient in law, to raise a use in favor of his grand-
daughter, Nancy Richardson. "Why did not the statute exe-
cute the use by drawing the legal title to it and thus unite
the two estates, so as to form what is called in Fleta the only
perfect title (Fit juris et seisnae conjunctio) ? 2 Blk. 311.
Not only does the very language of the will, when con-
sidered in its ordinary sense, clearly indicate a purpose to
give ^"^^ both the legal and beneficial interest to the devisee,
but the inference thus drawn from it is in accordance with
the interpretation of the law. "In the construction of wills,
adjudged cases may very properly be argued from, if they
establish general rules of construction, to find out the in-
tention of the testator, which intention ought to prevail if
agreeal)le to the rules of law": Goodlittle v. Whitby, 1 Burr.
233. We think those rules, as well as the proper understand-
ing of the words used, justify our construction of the will.
The law carries into effect the intention of the testator, if
sufficiently expressed, however defective the language may
be. This is one of the rules of construction. The case of
Floyd v. Thompson, 20 N. C. 616 (4 Dev. & B. 478), seems
to be directly in point, as the language is substantially
identical with that of the devise in qu&stion. There the
property was limited to the use and benefit "of the legatees
for life, and then to 'descend' to the heirs of their body,"
and the words were held to denote that the heirs took in
succession from and not merely after the first taker.
Ruffin, C. J., added: "If the subject here had been land.
the daughter, first taker, would undoubtedly have the fee.
746 American State Reports, Vol. 115. [N. Carolina,
and we think less than the entire property in the slaves
will not satisfy the words." To the same effect are Don-
nell V. Mateer's Exrs., 40 N. C. 7; Worrell v. Vinson, 50 N.
C. 91 ; King V. Utley, 85 N. C. 59 ; Ham v. Ham, 21 N. C.
598. In the ease last cited the subject is fully discussed and
the authorities collated by Daniel, J. The conclusion is,
therefore, irresistible, that the testator used the words "use,
benefit and profit" as synonymous with the land itself: 3
Gr. Cruise, 229; 2 Underbill on Wills, sec. 692.
Having settled this point, it is not difficult to decide that
the rule in Shelley's Case applies to the limitation. It is
within the very words of the rule, for where the ancestor,
by any gift or conveyance, takes an estate of freehold, and
in the same gift or conveyance an estate is limited, either
mediately ^'^'^ or immediately to his heirs, in fee or in tail,
always, in such case "the heirs" are words of limitation of
the estate, and not words of purchase ; and superadded words
of limitation, not varying the course of descent, do not pre-
vent the application of the rule: Shelley's Case, 1 Coke,
104. The rule applies only where the same persons will
take the same estate, whether they take by descent or pur-
chase, in which case they are considered to take by descent:
Ward V. Jones, 40 N. C. 400; Howell v. Knight, 100 N. C.
254, 6 S. E. 721. They who take in remainder, must take
in the quality of heirs according to the course of descent es-
tablished by law. The rule is one of law, and not merely
one of construction for the purpose of ascertaining the in-
tention, and when the words of the limitation bring the case
within the rule, it applies, regardless of the intent, or, if
expressed differently, the intention is presumed to be in
accordance with that which the law implies from the use of
words having a fixed and definite meaning: Leathers v.
Gray, 101 N. C. 162, 9 Am. St. Rep. 30, 7 S. E. 657; Wool
V. Fleetwood, 136 N. C. 460, 48 S. E. 785, 67 L. R. A. 444;
Tyson v. Sinclair, 138 N. C. 23, 50 S. E. 450; Pitchford v.
Limer, 139 N. C. 13, 51 S. E. 789. Under the devise in this
will, the limitation over carries the estate to the same par-
ties, whether they take by descent or by purchase, and the
words "heirs of the body" are therefore words of limitation,
and Bot words of purchase, as those so designated are pre-
sumed to take by descent in the quality of heirs: May v.
Lewis, 132 N. C. 115, 43 S. E. 550; Mills v. Thorne, 95 N.
Nov. 1906.] Levin v. Gladstein. 747
C. 362. It follows that Nancy Richardson acquired a fee
simple under the devise. If she conveyed to Mrs. Hackney,
her daughter, Hannah J. Richardson, got nothing by descent,
and her deed to J. W. Perry consequently passed nothing to
him. She had nothing to grant. But if she had not parted
with her title and died intestate, her three children took
from her by descent, as tenants in common. We do not
know what are the facts, as they were not found, the case
having been taken from the jury. There is no error in the
ruling of the court.
No error.
As to the Effect of Altering a Deed by a substitution of grantees
after delivery, see Abbott v. Abbott, 189 111. 488, 82 Am. St. Rep.
470; note to Burgess v. Blake, 86 Am. St. Eep. 88. A deed, so far
as it has operated as a conveyance, is usually not avoided by altera-
tion: Bacon v. Hooker, 177 Mass. 335, 83 Am. St. Rep. 279; Gulf
Bed Cedar Lumber Co. v. O'Neal, 131 Ala, 117, 90 Am. St. Rep. 22.
LEVIN v. GLADSTEIN.
[142 N. C. 482, 55 S. E. 371.]
JUDGMENT or ANOTHEB STATE — Fraud as Defense —
Equitable Defense. — Although a judgment when sued upon in another
state cannot be impeached or attacked for fraud by any plea known
to the common-law system of pleading, it is equally clear that upon
sufficient allegation and proof defendant is entitled, in a court of
equity, to enjoin the plainti£F from suing upon or enforcing his judg-
ment, (p. 751.)
JUDGMENTS OF ANOTHEB STATE will be given the same
faith and credit which is given domestic judgments, (p. 754.)
JUDGMENTS OF OTHEB STATES —Fraud as Defense— Jus-
tice's Jurisdiction. — In an action upon a judgment of a sister state
the defendant may interpose the defense in the justice's court, that
the judgment was obtained by fraud practiced upon him. (pp. 757,
758.)
Biggs & Reade, for the plaintiff.
Winston & Bryant, for the defendant.
"•** CONNOR, J. This was a suit upon a judgment ob-
tained in the superior court of Baltimore City, Maryland.
Personal service was had upon defendant while in Balti-
more. Action was instituted **** upon said judgment before
748 American State Reports, Vol. 115. [N. Carolina,
a justice of the peace of Durham county, and from a judg-
ment therein, defendant appealed to the superior court.
At the beginning of the trial in the superior court coun-
sel for defendant stated he admitted the regularity of the
judgment sued upon and withdrew all pleas and defenses to
said action, save and except that the judgment upon which
the action was brought was procured by a fraud practiced
by plaintiffs upon the defendant, and that he insisted upon
that plea alone. Thereupon the plaintiffs moved for judg-
ment for that the judgment rendered by the court of Mary-
land was not open to attack in this action for fraud. Mo-
tion overruled, and plaintiffs excepted.
His honor held that the burden of proof was upon the
defendant, and he proceeded to introduce testimony. Mr.
Gladstein testified that he was the defendant in the case;
that he knew Philip Levin and Simon Levin, and had bought
goods of them. That some time prior to his going to
Baltimore he bought a bill of goods of plaintiffs, but had
shipped some of them back to Baltimore because they were
not up to the sample. That plaintiffs had refused to take
the goods out of the depot in Baltimore. That upon his
visit to Baltimore summons was served upon him in the
action brought there by plaintiffs; but after said summons
was served upon him, and before the return day, he saw
one of the plaintiffs and had an interview with him at the
store of L. Singer & Son, during which interview plain-
tiffs agreed with him to withdraw said suit and return
the goods to him at Durham, provided he would, upon their
receipt, pay the plaintiffs a sum of money which they
agreed upon, to wit, one hundred and thirty-three dollars,
and freight and storage not to exceed three dollars. That
relying upon this agreement he returned to Durham and
made no defense to the action. Plaintiffs never returned
the goods to him at Durham. That the first time he knew
of the judgment was when called upon by attorneys for
plaintiffs to pay said judgment.
4»4 Inhere was testimony contradicting defendant. After
hearing testimony from both parties, the court submitted
the following issue to the jury: "Was the alleged judgment
rendered for one hundred and forty-three dollars, bearing
date April 27, 1904, in the superior court of Baltimore
City, in favor of Philip Levin and Simon Levin, copartners,
Nov. 1906.] Levin v. Gladstein. 749
trading as P. Levin & Co., against M. Gladstein, obtained by
Ihe fraud of plaintiffs?" To which the jury responded
"Yes." Judgment was thereupon rendered that the plain-
tiffs take nothing by their action, and that the defendant
go without day, etc. Plaintiffs excepted and appealed.
Two questions are presented upon the plaintiff's appeal:
1. Can the defendant, in the manner proposed herein, re-
sist a recovery upon the judgment rendered against him by
the Maryland court? 2. If so, has the justice of the peace
jurisdiction to hear and determine such defense? The plain-
tiffs, relying upon the provision of the constitution of the
United States, article 4, section 1, that "Full faith and
credit shall be given in each state to the public acts, records
and judicial proceedings of every other state," earnestly
contend that the defense is not open to the courts of this
state. That the remedy for the fraud in procuring the
judgment, if any, must be sought in the courts of ]\Iaryland.
The well-considered brief of plaintiffs' counsel thus states
the question involved in the appeal: "The case presents
the question of the right of a defendant to avail himself of
the plea of fraud as a defense to an action in one state based
upon a judgment obtained in a sister state."
When a judgment rendered by the court of one state be-
comes the cause of action in the court of another state,
**** and the transcript made in such state, duly certified, as
prescribed by the act of Congress, is produced, it imports
verity and can be attacked for only one purpose: The de-
fendant may deny that the court had jurisdiction of his per-
son or of the subject matter, and for this purpose may attack
the recitals in the record: Bailey on Jurisdiction, sees. 198,
199. Jurisdiction will be presumed until the contrary is
shown. If not denied, or when established after denial, de-
fendant cannot interpose the plea of nil debit. This was
held in Mills v. Duryee, 7 Cranch, 481, 3 L. ed. 411, and lias
been uniformly followed by both state and federal courts:
2 Am. Lead. Cas. 538.
In Christmas v. Russell, 72 U. S. 290, 18 L. ed. 475, Mr.
Ju.stice Clifford said: "Substance of the second objection of
the pr&sent defendant to the fourth plea is that, inasmuch
as the judgment is conclusive between the parties, in the
state where it was rendered, it is equally so in every other
750 American State Reports, Vol. 115, [N, Carolina,
court in the United States, and consequently that the plea
of fraud in procuring the judgment is not a legal answer
to the declaration. Principal question in the case of Mills
V, Duryee, 7 Cranch, 481, 3 Ld. ed. 411, was whether nil debit
was a good plea to an action founded on a judgment of an-
other state. Much consideration was given to the case, and
the decision was that the record of a state court, duly au-
thenticated under the act of Congress, must have in every
other court of the United States such faith and credit as it
had in the state court from whence it was taken, and that
nil debit was not a good plea to such an action." The
learned justice proceeds to say: "Domestic judgment, under
the rules of the common law, could not be collaterally im-
peached or called in question if rendered in a court of com-
petent jurisdiction. It could only be done directly by writ
of error, petition for new trial, or by bill in chancery. ' '
It will be found, upon careful examination of Hanley v.
Donoghue, 116 U. S. 1, 6 Sup. Ct. Rep. 242, 29 L. ed. 535, 59
Md. 239, 43 Am. Rep. 554, that the question under considera-
tion here was not involved. It is true that, ^^'^ in the dis-
cussion, Mr. Justice Gray uses the language cited by counsel,
which excludes the right of the defendant to impeach the
judgment "for fraud in obtaining it." So, in Cole v, Cun-
ningham, 133 U. S. 107, 10 Sup. Ct. Rep. 269, 33 L. ed. 538,
Chief Justice Fuller, after quoting the language of the con-
stitution, says: "This does not prevent an inquiry into the ju-
risdiction of the court, in which judgment is rendered, to
pronounce the judgment, nor into the right of the state to
exercise authority over the parties or the subject matter, nor
whether the judgment is founded in and impeachable for a
manifest fraud. The constitution did not mean to confer any
new power on the states, but simply to regulate the effect of
their acknowledged jurisdiction over persons and things with-
in their admitted territory." The learned chief justice re-
lies upon the same line of cases cited by Judge Gray. Neither
of them was discussing the question here presented, nor was
it presented by the record in those cases.
The case of Dobson v. Pearce, 12 N. Y. 156, 62 Am. Dec.
152, was cited in Cole v. Cunningham, 133 U. S. 107, 10 Sup.
Ct. Rep. 269, 33 L, ed. 538, and, as we shall see later, was
approved. In Maxwell v. Stewart, 89 U. S. 77, 22 L. ed.
564, the court simply reiterated the doctrine announced in
Nov. 1906.] Levin v. Gladstein. 751
Mills V. Duryee, 7 Cranch, 481, 3 L. ed. 411, that the plea
of nil debit could not be interposed in an action upon a judg-
ment : Bissell V. Briggs, 9 Mass. 462, 6 Am. Dec. 188 ; Bailey
on Jurisdiction, 191, 192. This court in Miller v. Leach, 95
N. C. 229, by Ashe, J., said that the judgment of a sister
state was put by the constitution upon the same footing as
domestic judgments, precluding all inquiry into the merits of
the subject matter, "but leaving the questions of jurisdiction,
fraud in the procurement, and whether the parties were prop-
erly before the court, open to objection," citing Mills v.
Duryee, 7 Cranch, 481, 3 L, ed. 411. See also, Coleman v.
Howell, 131 N. C. 125, 42 S. E. 455. It is elementary learn-
ing that this plea was not proper in actions founded upon a
specialty or a record: Shipman's Common Law Pleading,
196. But if plaintiff, in an action on a record, instead of de-
murring to the plea, ^^'^ accepts it and joins issue, the de-
fendant is at liberty to prove any and every special matter
of defense which might be proved under the same plea in
debt. For the plaintiff, by accepting the plea, founds his
demand solely upon the defendant being indebted, and thus
waives the estoppel, or conclusive evidence of the fact, etc. :
Overman v. Clemmons, 19 N. C. 185; Gould's Pleading, 287.
Hence, we find that in all of the cases in which the plea of
nil debit was entered, the defendant demurred, and the de-
cision was on the demurrer, which was uniformly sustained:
Mills V. Duryee, 7 Cranch, 481, 3 L. ed. 411; Maxwell v.
Stewart, 89 U. S. 77, 22 L. ed. 564; Benton v. Burt^ot, 25
Pa. 240; Carter v. Wilson, 18 N. C. 362; Knight v. Wall, 19
N. C. 125. In Allison v. Chapman, 19 Fed. 488, Nixon, J.,
says: "The subject is fully discussed, .... and the conclu-
sion is reached that the allegation, in a plea, that a judgment
was procured through fraud, is not a good common-law de-
fense to a suit brought upon it in the same or a sister state."
This conclusion is fully supported by all of the authorities.
and in this we concur with the learned counsel for the plain-
tiff. Notwithstanding the well-settled rule that the judg-
ment when sued upon in another state cannot be impeached or
attacked for fraud by any plea known to the common-kiw
system of pleading, it is equally clear that upon sufHeient al- »
legation and proof defendant is entitled, in a court of equity,
to enjoin the plaintiff from suing upon or enforcing his judg-
ment.
752 American State Reports, Vol. 115. [N. Carolina,
Pearee v. Olney, 20 Conn. 544, was * * a bill in chancery
praying for an injunction against the further prosecution of
an action at law." Defendant sued plaintiff in the superior
court of New York City and obtained service upon him.
Plaintiff saw and made an arrangement with defendant's
attorney by which it was agreed that no further action would
be taken in the case until plaintiff should receive further
notice from him. Relying upon said agreement, plaintiff did
not employ any counsel and did not appear before said court,
*®® believing that said suit was to be no further prosecuted
against him. Defendant, in violation of said agreement, pro-
cured judgment against plaintiff. Defendant, some time
thereafter brought suit in the court having jurisdiction in
Connecticut, and at the time of filing the bill said suit was
pending in said court. Defendant relied upon the constitu-
tional provision, insisting that to enjoin him from prose-
cuting his action on the judgment would be to deny "full
faith and credit to the judicial proceeding" in New York.
The court said: "It is insisted that under the constitution
of the United States .... it is not competent for the court
to impeach the judgment of the superior court of New York;
it being shown that the court had jurisdiction of the cause,
by the regular service of process on the defendant in that
suit. And cases are cited to sustain this position. This doc-
trine is correct enough, no doubt, properly understood and
applied; but it has no application here. There is no attempt
to impeach the validity of the New York judgment. In
granting an injunction against proceedings at law, whether
in a foreign or domestic court, there is no difference; the
court of equity does not presume to direct or control the
court of law; but it considers the equities between the parties
and restrains him from prosecuting an action. ' ' A perpetual
injunction was granted. The case had a further history.
The defendant in the equity suit and plaintiff in the judg-
ment assigned the judgment to one Dobson, who brought
suit on it in the superior court of New York against Pearee,
the defendant in the judgment. Defendant set up by way
of defense the record of the equity suit in Connecticut and
the injunction granted therein. Dobson sought to avoid the
injunction. The cause was ably argued and carefully consid-
ered by the court. It was said: "So fraud and imposition
invalidate a judgment as they do aU acts ; and it is not without
Nov. 1906.] Levin v. Gladstein. 753
semblance of authority that it has been suggested that, at
law, the fraud may be alleged whenever the party seeks to
489 avail himself of the results of his own fraudulent conduct
by setting up the judgment, fruits of his fraud. But whether
this is so or not, it is unquestionable that a court of chancery
has power to grant relief against judgments when obtained
by fraud." The court proceeded to say that under the judi-
ciary system in New York, permitting equitable defenses to
be set up in the answer, whether the fraud could have been
pleaded or not in an action at law, it could be set up as an
equitable defense to defeat a recovery upon a fraudulent
judgment. The court held that the injunction granted in
Connecticut established the fraud, and that plaintiffs could
not recover. As we have seen, this case was cited with ap-
proval in Cole v. Cunningham, 133 U. S. 107, 10 Sup. Ct. Rep.
269. 33 L. ed. 538. It is cited with approval by the chancellor
in Davis v. Headley, 22 N. J. Eq. 115, in which it is said:
"That the courts of equity will set aside judgments of their
own and other states for fraud practiced in procuring them.
.... It will not lend its aid to enforce a judgment obtained
by fraud, when the fraud is shown. Complainant must come
with clean hands in the matter on which relief is sought."
The doctrine is well stated in Payne v. O'Shea, 84 Mo. 129
(cited in Black on Judgments, sec. 919) : "A proceeding in
the nature of a bill in equity will lie to enjoin and avoid a
domestic judgment obtained through fraud, and like reme-
dies exist and may be resorted to against judgments obtained
in other states, when sued on in this state. The fraud, how-
ever, for which a judgment will be enjoined must be in the
procurement of the judgment." Nor does the constitutional
provision stand in the way of such proceeding. Usually, the
power of a court of equity to interfere in the enforcement of
judgments obtained by fraud Is invoked to restrain the plain-
tiff, in such judgments, from issuing or enforcing execution.
The theory was, as we have seen, that the court of equity
did not call into question the integrity of the judgment, but
by its decree operated in personam upon the plaintiff, en-
forcing the decree '*®® by punishing for contempt disobedience
to it. But when the judgment, as in Pearce v. Olncy, 20
Conn. 544, was made the cause of action at hiw. eiiuity en-
joined the plaintiff, shown to be guilty of the fraud, from
Am. St. Repw, Vol. 115 — 48
754 American State Reports, Vol. 115. [N. Carolina,
prosecuting the action. Our equity reports contain many il-
lustrations of the practice : Hadley v. Roundtree, 59 N. C. 107.
The underlying principle is that the judgment of a sister
state will be given the same faith and credit which is given
domestic judgments. It is contended, however, and with
force, that the "faith and credit" to be given such judgment
is measured by the law of the state in which it is rendered.
We find upon examining the decisions made by the Maryland
court that in that state a court of equity will enjoin the
enforcement of a judgment obtained by fraud. We had no
doubt that such was the law in that state. In Little v. Price,
1 Md. Ch. 182, the chancellor says: "The object of an in-
junction to stay proceedings at law, either before or after
judgment, is to prevent the partj'^ against whom it issues from
availing himself of an unfair advantage resulting from ac-
cident, mistake, fraud or otherwise, and which would, there-
fore, be against conscience. In such cases the court will in-
terfere and restrain him from using the advantage which he
has improperly gained": Citing Story's Equity, sec. 885 et
seq. In Wagner v. Shank, 59 Md. 313, it appears that wheu
the complainants were summoned in the original actions,
they employed counsel to defend them. The counsel saw
plaintiff in the actions, and he concluded to dismiss the cases
and executed an agreement to do so. Counsel notified his
clients of the agreement and "they supposed the matter was
finally disposed of and gave themselves no further concern
about it." The plaintiff, without notice to counsel or par-
ties, had the magistrate to enter judgments in eleven
hundred and ninety-six cases, amounting to one hundred
and twenty-seven thousand eight hundred and thirty-six dol-
lars, and two thousand three hundred and eighty-six dollars
cost. Miller, J., after reciting the facts, says: "These facts
alone make a plain case for relief '*^* in equity As
to the jurisdiction of a court of equity to pass decrees ap-
pealed from, we entertain no doubt. There are prayers in
most of these bills, not only that these judgments may be
perpetually enjoined, but that they may be canceled." After
citing authorities sustaining the right of complainant to have
the relief prayed, he concludes: "And these decisions are
founded on the true principles of equity jurisprudence, which
is not merely remedial, but is also preventive of injustice."
Concluding a very able opinion, he says : ' ' The strong arm of
a court of equity has protected the complainants, and the de-
Nov. 1906.] Levin v. Gladstein. 755
crees in their favor will be affirmed." It is thus apparent
that the judgment obtained by the fraud of plaintiffs, as
found by the jury, would be open to attack in the courts of
Maryland upon the universally accepted principles of equity
jurisprudence invoked in the courts of this state, and in giv-
ing the defendant relief we are giving the judgment the same
"faith and credit" which it has in that state. Mr. Bailey,
in his work on Jurisdiction, 202, 203, notes the language of
Judge Gray in Christmas v. Russell, 72 U. S. 290, 18 L. ed.
475, and Chief Justice Fuller in Cole v. Cunningham, ] 33 U.
S. 107, 10 Sup. Ct. Rep. 269, 33 L. ed. 538, saying: "How-
ever it should be conceded that whatever may have been the
rule in the court prior to the decision in Cole v. Cunnigham,
133 U. S. 107, 10 Sup. Ct. Rep. 269, 33 L. ed. 538, that the
rule there stated must be taken as the present doctrine of
that court. ' ' He notes the diversity in the several states, say-
ing that in Maryland the court has not followed the rule in
Cunningham's case, 133 U. S. 107, 10 Sup. Ct. Rep. 269, 33
L. ed. 538, citing Hambleton v. Glenn, 72 Md. 351, 20 Atl. 121.
In that case the question was whether in that state the judg-
ment rendered in Virginia could be collaterally attacked for
fraud. That is not the question here, but whether in Mary-
land the judgment of its own courts could be enjoined in
equity for fraud; and, as we have seen, it may be. We are
not seeking to know what the courts of Maryland would per-
mit to be done if a North Carolina judgment was sued upon
there, but what they will permit to be done when one of their
own judgments is sued upon and attacked for fraud.
402 rpjjg plaintiff says, however this may be, the defendant
can have this relief only in Maryland; that he must go into
that state and attack the judgment or enjoin the phiintiff.
Mr. Freeman says: "If the judgment was procured under cir-
cumstances requiring its enforcement to be enjoined in equity,
the question will arise whether these circumstances may be
interposed as a defense to an action on the judgment in an-
other state. Notwithstanding expressions to the contrary,
we apprehend that in bringing an action in another state, the
judgment creditor must submit to the law of the forum, and
must meet the charge of fraud in its procurement, when pre-
sented in any form in which fraud might be urged in an
action on a domestic judgment. If, in the state in which
the action is pending, fraud can be pleaded to an action on a
756 American State Reports, Vol. 115. [N. Carolina,
domestic judgment, it is equally available and equally eflB-
cient in actions on judgments of other states It is true
that two of the decisions of the supreme court of the United
States contain the general statement that the plea of fraud
is not available as an answer to an action on a judgment (cit-
ing Christmas v. Russell, 72 U. S. 290, 18 L.ed. 475, and Max-
well V. Stewart, 89 U. S. 77, 22 L. ed. 564). We apprehend,
however, that these decisions are inapplicable in those states
in which the distinction between law and equity is attempted
to be abolished, and equitable as well as legal defenses are,
when properly pleaded, admissible in actions at law ' ' : Free-
man on Judgments, sec. 576. If those states, in which equi-
table remedies were administered only by courts of equity,
enjoined proceeding at law upon a judgment obtained by
fraud, why should not, in those courts administering legal
and equitable rights and remedies in one court, and one form
of action, the defendant be permitted to set up his equitable
defense to the action on the judgment? The question is an-
swered by the case of Gray v. Richmond Bicycle Co , 167 N.
Y. 348, 82 Am. St. Rep. 720, 60 N. E. 663. The action was
brought on a note which the court held was merged into a
judgment rendered in Indiana. It was alleged that the judg-
ment was procured '*®^ by fraud. Vann, J., said that it was
admitted that "even a foreign judgment may be successfully
assailed for fraud in its procurement It was not nec-
essary to go into the state of Indiana to obtain relief from the
judgment through its courts, for, as we have held, a court
from one state may, when it has jurisdiction of the parties,
determine the qiiestion whether a judgment between them,
rendered in another state, was obtained by fraud, and, if so.
may enjoin the enforcement of it, although its subject matter
is situated in such other state. The assertion of the foreign
judgment as a bar in this action was an attempt to enforce it
indirectly, and it was the duty of the trial court to send
the case to the jury with the instruction that if they found
the judgment was procured by fraud, it could not be asserted
as a bar in this state" : Davis v. Cornue, 151 N. Y. 172, 45 N.
E. 449. The same rule is laid down by Black. In some of
the states, when the formal distinction between law and
equity is abrogated, the law allows equitable defenses to be
set up in an action at law. Hence, in those states, when
the suit is brought upon a domestic judgment, the defendant
Nov. 1906.] Levin v. Gladstein. 757
is allowed to plead any circumstances of fraud which would
have justified a court of equity in interfering in his behalf.
Now, when the same judgment is made the basis of an action
of another state, he ought to be allowed the same latitude of
defense. For if it were otherwise, the foyeign court would
be required to give greater faith and credit to the judgment
than it is entitled to at home, which the constitution does not
require: Black on Judgments, sec. 918. That the defense
made by defendant may, under our code, be set up by way
of answer, is well settled. The cases in point are collected in
Clark's Code, third edition, page 238.
The remaining question is whether the defense is available
to defendant in a justice's court. It is said that the remedy
of defendant being an injunction against proceeding with the
action, resort must be had to the superior court having
'***'* equitable jurisdiction. The question is not free from dif-
ficulty. It would seem, however, that in view of the frequent
decisions of this court that while a justice's court has no
jurisdiction to administer or enforce an equitable cause of
action, a defendant may interpose an equitable defense in
that court, his honor correctly submitted the issue raised by
the defense. In Lutz v. Thompson, 87 N. C. 334, the de-
fendants sought to prevent a recovery upon a bond by show-
ing that it had been executed in accordance with certain
agreements, and that by reason thereof it would be inequita-
ble to enforce one part of it and leave the other part unful-
filled. The objection was made that this defense, being equi-
table in its character, could not be interposed in a justice's
court. Ruffin, J., said: "Whenever such a court has juris-
diction of the principal matter of an action, as on a bond, for
instance, it must necessarily have jurisdiction of every inci-
dental question necessary to its proper determination. And
though it cannot affirmatively administer an equity, it may
so far recognize it as to admit it to be set up as a defense."
In McAdoo v. Callum, 86 N. C. 419, originating in a jus-
tice's court for the purpose of ousting defendants, tenants of
the plaintiff, the defendants set up by way of defense a con-
tract for a renewal of the lease, etc. To the ol)jection that
the justice had no jurisdiction to hear such defense, Smith,
C. J., said: "While this provision is not itself a renewal so as
to vest an estate in the defendants for the successive term, it
gave them an equity, which, while it cannot be specifically
1
758 American State Reports, Vol. 115. [N. Carolina,
enforced in the court of a justice, will be recognized as a
defense to a proceeding for the ejectment of the defendants":
Hurst V. Everett, 91 N. C. 399. We can see no good reason
why the defendant may not set up, by way of defense, the
facts which show, that the judgment, plaintiff's cause of
action, was obtained by fraud practiced upon him: Bell v.
Howerton, 111 N. C. 69, 15 S. E. 891; Holden v. Warren, 118
N. C. 326, 24 S. E. 770 ; Vance v. Vance, 118 N. C. 864, 24
S. E. 768. These and other cases in ^^^ our reports illustrate
the rule of practice, that equitable defenses may be set up in
the court of a justice of the peace.
In Earp v. Minton, 138 N. C. 202, 50 S. E. 624, the suit was
not upon a judgment, but the judgment, in an action be-
tween the plaintiff and another party, one Cranor, was of-
fered in evidence to sustain plaintiff's title. The judgment
when so offered could not be attacked collaterally, as shown
both upon reason and the authorities cited. In our case, the
defendant, if in the superior court, would have pleaded the
fraud in bar of plaintiff's recovery, just as if the suit had
been upon a bond under seal obtained by fraud. We can see
no good reason why he may not, for the same purpose, set it
up in the justice's court. It would be incompatible with our
conception of remedial justice under the code system, to re-
quire the defendant to submit to a judgment and be compelled
to resort to another court to enjoin its enforcement. This is
one of the inconveniences of the old system which was
abolished by the constitution and the adoption of the code
practice. We but follow the line marked by Ruffin, J. , when
he announced the general principle in Lutz v, Thompson, 87
N. C. 334. .
We find no error in the ruling of his honor in regard to
the burden of proof or probative force of the testimony re-
quired to establish the defense.
We have examined the authorities cited by plaintiffs' coun-
sel, and, while there is, to say the least, some apparent con-l
flict, we are of the opinion that the conclusion reached by uS|
is in accordance with the weight of authority and those best
sustained by reason.
There is no error.
Judgments of Courts of Other States are considered in the note to
Montgomery v. Consolidated etc. Co., 103 Am. St. Kep. 304. Want
of .iurisdiction may be shown by extrinsic evidence, even against
Oct. 1906.] State v. R^ra. 759
"the recital of a judgment record of a sister state: Ingram v. Ingram,
143 Ala. 129, 111 Am. St. Rep. 31, and cases cited in the cross-
reference note thereto. But a plea of fraud is not admissible in ac-
tions, on judgments of sister states, when there was jurisdiction of the
person and subject matter, unless it can be set up in the court of the
state rendering the judgment: Ambler v. Whipple, 139 111. 311, 32
Am. St. Rep. 202; Forrest v. Fey, 109 Am. St, Rep. 249.
STATE V. RING.
[142 N. C. 596, 55 S. E. 194.]
SEDUCTION Under Promise of Marriage — Suflaciency of Evi-
dence.— In a criminal prosecution for seduction under promise of
marriage, it is not necessary to show that the defendant directly
and expressly promised the prosecutrix to marry her if she would
submit to his embraces, and it is sufficient if the jury, under the evi-
dence, can fairly infer that the seduction was accomplished by reason
of the promise, giving to the defendant the benefit of any reasonable
doubt, (pp. 759, 760.)
SEDUCTION Under Promise of Marriage is Accomplished
when the prosecutrix trusted to the defendant 's promise that he
would never forsake her and to his promise of marriage when she
yielded to his embraces to her ruin; the fact that the promise
to marry existed long before the seduction can make no difference
if he afterward took advantage of it to effect his purpose, (p. 761.)
R. D. Gilmer, attorney general, and W. Clark, Jr., for the
state.
D. J. Lewis and J. B. Schulken, for the defendant.
"*• WALKER, J. The defendant's counsel, in their brief,
contend that there was no evidence in the ca.se that the prose-
cutrix was seduced under a promise of marriage. The grava-
men of this offense is seduction, induced by the promise which
the defendant has failed to keep. There are other essential
elements, but this is the principal one, and if there was no
evidence of it, the defendant should have been acquitted.
We think that there was not only some, but abundant, evi-
dence to warrant the verdict of the jury. It is not nece-ssary
to a conviction under this law that the state should sliow that
the defendant directly and expres.sly promised the prosecu-
trix to marry her if she would submit to his embraces. It is
quite sufficient if the jury from the evidence can fairly infer
that the seduction was accomplished by reason of the prom-
760 American State Reports, Vol. 115. [N, Carolina,
ise, giving to the defendant the benefit of any reasonable,
doubt.
But in this case the defendant admits in one of his letters
to the prosecutrix that she had trusted in his honor, and that
he was deeply sensible of the great wrong that he had done
her, and that she had sacrificed her virtue at his solicitation
when they were engaged to be married. "While under a
promise of marriage to her, he told her that he would not
believe that she loved him if she did not comply with his
request, and she yielded to prove her love for him. Just
before she did so he promised never to forsake her, and
boldly and shamelessly asserted that he did not ask her con-
sent as a favor, but as something to which he was of right
entitled by reason of their engagement. Is it possible for
evidence to be stronger for the purpose of showing a seduction
accomplished by a promise of marriage? The mere fact that
the promise existed long before the seduction can make no
difference, if he afterward took advantage of it in order to
effect his nefarious purpose. His conduct, in such a case,
would be the more reprehensible as showing a studied and
deliberate purpose, first to engage her affections and then by
taking advantage of her weak and confiding nature and the
^*^ trustfulness he had inspired by his perfidy to insidiously
ensnare her with his wicked and faithless promises of love
and constancy. Such base conduct is the legal equivalent of
an express promise to marry if she would submit to his
lecherous solicitations, provided the jury found, as they did,
that it had the effect of alluring her from the path of virtue.
If he made his promise to her in good faith, why did he not
keep it when he found that he had ruined her and when she
most needed the protection of his name? It being admitted
that he made the promise, his gross betrayal of her was
surely a fact to be considered by the jury in determining his
guilt. It is against the wily arts of the seducer that the law
would protect the innocent woman, and he can effect his pur-
pose just as well by first gaining the confidence and affection
of his intended victim and then inducing her to surrender
her chastity and finally debauching her by means of persistent
appeals to her supposed sense of duty and obligation to him
as her lover.
The evidence in the case forces the conviction upon us that
this unfortunate woman trusted to his pledge that he would
Oct. 1906.] State v. Rma 761
never forsake her, and to his promise of marriage, when in
an evil moment she permitted him to accomplish her ruin.
The defendant's counsel relied on State v. Ferguson, 107
N. C. 841, 12 S. E. 574, and quotes this passage from the opin-
ion of the court by Justice Davis : * * If she willingly surren-
ders her chastity, prompted by her own lustful passions, or
any other motive than that produced by a promise of mar-
riage, she is in pari delicto, and there is no crime committed
under the statute." That is very true. But the principle
there stated does not fit the facts of this case. If the evi-
dence is trustworthy, there is hardly anything in it to indi-
cate that she sacrificed her chastity in order to gratify her
own lascivious desires. At least, the jury could well have
found that she did not do so, but, on the contrary, that in the
trustful and abiding belief that the defendant would not be-
tray her, but fulfill his promise of marriage, she yielded at
last to his urgent appeals. ^^^ The case is rather to be gov-
erned by another principle stated in that case: "The pur-
pose of this statute is to protect innocent and virtuous
women against wicked and designing men, who know that
one of the most potent of all seductive arts is to win love
and confidence by promising love and marriage," in return.
The case of State v. Horton, 100 N. C. 443, 6 Am. St. Rep.
613, 6 S. E. 238, is authority for the position that the state
is not required to show that the defendant, in so many words,
promised to marry the woman if she would agree to submit
to carnal intercourse with him, or, in other words, to show
the causal relation between the promise of marriage and the
seduction by any set form of words; but it is sufficient if
the evidence is such as to convince the jury to the exclitsion
of all reasonable doubt that the woman was influenced by the
promise and the man intended that she should be, or so pur-
posely acted as to produce the impression on her mind that
he would keep his promise if she would comply with his re-
quest. The jury are to draw their own deduction from the
testimony, provided there is even inferentially any evidence
of a purpose to violate the statute. Besides all this, what
the defendant said in his letters is, of course, evidence against
him as to what his purpose or intention was and as to what
he actually said and did. "I am deeply sensible of the great
wrong that I have done. Don't be deceived, and be sure that
you know your friends. Have as little to say about it as
762 American State Reports, Vol, 115. [N. Carolina.
possible. You have trusted to my honor in the past. While
this is a very unfortunate affair, it is no worse than others
have done." These expressions, taken from the evidence,
are much stronger in their tendency to establish the guilt of
the defendant, or his vicious purpose throughout his intimate
association with the prosecutrix, than were the words used
by the defendant in his conversation with the woman's
father, which were held to be sufficient to sustain the verdict
in the Horton case (100 N. C. 443, 6 Am. St. Rep. 613, 6 S.
E. 238).
"We can see no error in the ruling of the court.
Seduction is discussed at length in the note to Bradshaw v. Jones,
76 Am. St. Rep. 659. The necessity of a promise to marry, and the
suflSciency thereof, in order that seduction may constitute a crime,
are considered at page 672 of this note, and also in the note to
State v. Carton, 87 Am. Dec. 408.
CASES
IN THE
SUPREME COURT
OP
TENNESSEE.
INSURANCE CO. OF TENNESSEE v. WALLER.
[116 Tenn. 1, 95 S. W. 11.]
TBUST IN PAROL. — A valid express trust involving real es-
tate, enforceable in equity, can be created by parol, (p. 766.)
TBUST, When Created. — If a conveyance is executed, accom-
panied by a parol agreement that the grantee will hold the prop-
erty for the use of the grantor and convey the title as he may di-
rect, no consideration being paid for the conveyance to him, a valid
parol trust is thereby created in favor of the grantor, enforceable
in equity, though his object in making the conveyance and executing
the agreement was to hinder, delay and defraud his creditors, (p.
766.)
STATUTE or FBAUDS, Parol Agreement When not Within. —
A preliminary parol agreement made at the execution and delivery
of a conveyance of real property that the vendee will hold it in
trust for a certain person is not within the statute of frauds, (p. 767.)
CONVEYANCE, Failure to Name a Grantee Therein. — The
fact that the name of the grantor does not appear in a conveyance is
not a fatal defect, if, from the whole instrument, it sufficiently ap-
pears to be his contract and deed and clearly expresses his intention
to convey the property, and the omission of the pronoun "I" there-
from is evidently a clerical error which is supplied by the context
and subsequent recitals of the deed. (p. 767.)
TBUSTEE, Married Woman as. — By the common law, a mar-
ried woman had the capacity to take and hold lands as trustee and
to execute the powers and duties of the trust, including that of con-
veying the trust property by deed without the concurrence and
joinder of her husband, (pp. 7()9, 773.)
A CONVEYANCE by a Married Woman Without the Signature
of Her Husband is valid if she holds the property as n trustee and
the conveyance is to carry out the trust, (pp. 769, 773.)
TRUST, — A Married Woman may be a Trustee for Her Hus-
band and may execute the tru.st l)y conveying the proiicrty to liini
by a conveyance in wliich he docs not .join. (pp. 771, 773.)
CONVEYANCE In Fraud of Creditors, Effect of Reconveyance
to the Grantor. — If projxrty is conveyed for the purpose of defraud-
ing creditors, and the grantee ngrofs by [larol to hold it for the
(763)
764 American State Reports, Vol. 115. • [Tenn.
use of the grantor and to convey it as he may direct, though the
trust may not be enforced, yet if the grantee respects it and makes a
reconveyance as agreed upon, the legal and equitable titles become re-
united, and the previous fraud will not bar the grantor from recover-
ing upon any contract relating to such property for trespass upon it
or upon a contract of insurance effected thereon by him. (p. 773.)
J. W. Bonner and C. C. Mooney, for Insurance Company.
J. S. Pilcher, for WaUer.
* SHIELDS, J. This action was brought by R. W. Wal-
ler, in the circuit court of Davidson county, to recover upon
a policy of fire insurance issued to him October 8, 1901, for
one thousand dollars, upon certain property situated in the
city of Nashville. The policy contains a stipulation that it
shall be void "if the interest of the insured be other than
unconditional sole owner of it; or if the subject of the in-
surance be a building on ground not owned by the insured
in fee simple." The defendant pleaded the general issue of
not guilty, and special pleas, averring that the plaintiff was
not the unconditional and sole OAvner of the property, and
that he was not siesed in fee of the ground upon which the
buildings destroyed were situated. The issues joined were
submitted to a jury, and there was verdict and judgment in
favor of the plaintiff. Waller. The insurance company brings
the case to this court, and assigns as error, among other
things, that there is no evidence to sustain the verdict. This
contention is based upon the assumption that there is no
evidence in the record to show that the plaintiff, at the time
that the property was insured and destroyed, was the uncon-
ditional and sole owner of it, and none that he ^ owned in
fee simple the ground upon which the buildings insured and
destroyed stood.
The facts in relation to the title of the property insured
and destroyed, and the ground upon which it stood, are these :
R. W, Waller, the plaintiff, owning the lots in question in
fee simple, on March 13, 1894, for the purpose of hindering,
delaying and defrauding his creditors, conveyed them by
deed, with full covenants of warranty, for a recited consid-
eration of three thousand dollars, to his kinsman, W. H.
Hyde, with a contemporaneous parol agreement and under-
standing that the latter should hold them for his use, and
convey the title as he should direct. Mo consideration was in
fact paid.
Dec. 1905.] Insurance Co. of Tennessee v. Waller. 765
W. H. Hyde, being about to marry, and Waller fearing
some complication, procured him to convey the property
by deed, absolute upon its face, with full covenants of war-
ranty, to Mrs. Madora Waller, wife of R. W. Waller, for a
recited consideration of three thousand five hundred dollars in
hand paid, she agreeing at the time to hold it in all respects as
it was held by Hyde. No consideration was paid by Mrs.
Waller.
Afterward, December 7, 1898, Mrs. Madora Waller, for a
recited consideration of five dollars, but in fact without any
other than her agreement to hold the property for the use
of her husband and convey it as he should direct, undertook
to reconvey it to him by an instrument in these words:
"For and in consideration of the sum of $5.00, and other
good and sufficient consideration, have bargained * and sold
by these present do transfer and convey unto the R. W.
Waller, his heirs and assigns, a certain tract or parcel of
land in Davidson county. State of Tennessee, as follows : Lots
Nos. 3 and 4 in John Lunsden's 3rd addition, as per plan in
book 57, page 106, of the R. 0. D. C. Said lots front 150
feet on the south side of Mill street, and run back between
parallel lines 135 feet to an alley. To have and to hold the
said tract or parcel of land, with the appurtenances, estate,
title, and interest thereto belonging, to the said R. W. Wal-
ler, his heirs and assigns forever. And I do covenant with
the said R. W. Waller that I am lawfully seized and pos-
sessed of said lands in fee simple, have a good right to con-
vey it, and the same is unincumbered. And I do further
covenant and bind myself, my heirs and representatives, to
forever warrant and defend the title to said lands against
the lawful claims of all persons whomsoever.
"Witness my hand, this 14th day of September, 1898.
"(Signed) MADORA WALLER."
An acknowledgment and privy examination appear to this
deed in these words:
"State of Tennessee,
Davidson County.
"Personally appeared before me, W. F. Da\ns, a notary
public in and for said county and State, the within named
bargainor, Mrs. Madora Waller, with whom I am porsonally
acquainted, and who acknowledged that she executed the
766 American State Reports, Vol. 115. [Tenn.
within instrument for the purposes therein contained. And
Mrs. Madora Waller, wife of the said R. W. Waller, having
personally appeared before me privately and apart from her
husband, the '^ said Mrs. Madora Waller acknowledged the
execution of said deed to have been done by her freely, volun-
tarily, and understandingly, without compulsion or restraint
from her said husband, and for the purpose therein expressed.
"Witness my hand and official seal at Nashville, Tennessee,
this 7th day of December, 1898.
"W. F. DAVIS,
"Notary Public."
The contention of R. W. Waller, upon these facts, is that
a parol trust was created in his favor by the agreement
of W. H. Hyde and Mrs. ]\Iadora Waller, respectively, when
the conveyances were made to them, to hold the property for
him and subject to his direction, valid and enforceable, and
that the instrument above set out, executed and acknowledged
by Mrs. Waller was a valid execution of the trust and re-
vested him with the absolute and unconditional fee simple
title to the property ; that if the instrument executed by Mrs.
Waller was for any reason inefficient to revest the title of
the property in him, then she held it in trust for him, and in
equity could be compelled to convey it to him, and that such
equitable title filled the requirements of the policy as to own-
ership and title.
While that of the insurance company is that the parol
trust created in favor of R. W. Waller is within the stat-
ute of frauds and perjuries, and void ; that if it were valid
it is unexecuted, the deed signed by Mrs. Waller being
void, because her name does not appear in the body and
operative part of it, and her husband did not join in its exe-
cution ; and unenforceable because made for the purpose
® of defrauding the creditors of R. W, Waller, and conse-
quently there is a total failure to prove a title of any kind.
We are of the opinion that a valid express trust, involving
real estate, enforceable in equity, can be created by parol,
and that, other questions out of the way, such a trust was
created by the agreements made by W. H. Hyde and Mrs.
Madora Waller, at the time the property in question was con-
veyed to them respectively, that they held it in trust for R.
W. Waller, to be conveyed^ upon his request as he should
direct
Dec. 1905.] Insurance Co. of Tennessee v. Waller. 767
It is now well-settled law in Tennessee that a contemporane-
ous parol agreement, made at the time of the execution and
delivery of a conveyance of real estate, absolute upon its
face, that the vendee will hold the property conveyed in trust
for a certain person, is not within the statute of frauds, and
aside from the rights of creditors of the original vendor and
innocent purchasers from the vendee vests in the beneficiary
of the trust a valid equitable title to the property conveyed,
which a court of equity will enforce. We need only refer
to the recent cases in which the reasons for the rule are fully
and clearly stated. They are: Thompson v. Thompson (Tenn.
Ch.), 54 S. W: 145; Renshaw v. First Nat. Bank, 63 S. W.
194; Woodfin v. Marks, 104 Tenn. 512, 58 S. W. 227; iMee v.
Mee, 113 Tenn. 453, 106 Am. St. Rep. 865, 82 S. W. 830.
It being settled that Mrs. Madora Waller, under the con-
veyance made to her by W. H. Hyde, and the contemporane-
ous agreement made with him and her husband, ® R. W.
Waller, held the land in trust for her said husband, R. W.
Waller, the next question for determination is whether or
not this trust was executed, as contended by the defendant
in error, so as to vest the sole and unconditional fee simple
title to the property in him. This depends on the sufficiency
of the deed executed and delivered by Mrs. Waller to her hus-
band. It is attacked on two grounds. It is said it is void
and ineffective as a conveyance, because her name does not
appear in the operative part of it. This omission in this
case, is not a fatal defect. It sufficiently appears from the
whole instrument that it is the contract and deed of Mrs.
Madora Waller, and clearly expresses her intention to convey
the property described in fee to R. W. Waller. It is sub-
stantially in the form prescribed by the Code, section 2013,
Shannon's edition, 3680, for forms of conveyances of real
estate. The only apparent defect in it is, that in the second
line, after the expression of the consideration, the pronoun
"I" is omitted, but this is evidently a clerical error and is
supplied by the context and subsequent recitals and parts of
the deed. This pronoun appears in the covenants, and the
signature of Mrs. Waller at the bottom of the deed, showing
that it was her intention to contract and convey in all things
a.s set forth in the instrument thus signed and executed by
her. The deed is executed by her alone, and the contract con-
tained in it should not be attributed to any other person.
768 American State Reports, Vol, 115. [Tenn.
The case of Kelton v. Brown (Tenn. Ch.), 39 S. W. 541,
is much in point. The conveying parts and covenants of the
deed in question in that case were in these words : * ' For and
in *® consideration of the sum of two hundred dollars, cash
in hand paid, I have this day bargained and sold, and do
hereby transfer and convey unto W. J. Kelton, his heirs and
assigns, forever, a certain lot," etc., describing the property;
and, "Now, we do covenant with the said W. J. Kelton that
we are lawfully seised of said property and have a good right
to convey it, and that the same is unencumbered. We further
covenant that we will forever warrant and defend the title to
said house and lot against the lawful claims of all persons
whomsoever." The court held that the use of the personal
pronoun "I," in the first part of the conveyance, instead of
"we," was a patent inadvertence, and that the use of the
plural "we," in the covenants followed by the execution of
the instrument by the wife along with the husband was suffi-
cient to show the purpose of the parties and the intention
of the wife to join in the conveyance of the property.
This is not in conflict with the case of Berrigan v. Fleming,
2 Lea, 271. In that case there was nothing whatever in any
part of the deed indicating the intention of the wife to join
in it. It was wholly the deed of the husband. There was no
reference to the wife in the body of the deed, and her name
only appeared as a signature to it, and in the privy examina-
tion. The deed in question is solely the deed of Mrs. Waller.
No other name appears in it or to it, and every intendment is
that it is her contract and deed.
The other objection to the deed is that R. W. Waller did
not join his wife in its execution. It is insisted that ** a
married woman cannot convey real estate, other than her
separate estate, without the joinder of her husband, and that,
for the nonjoinder of the husband in this case, his conveyance
is void and is ineffectual to vest title in the property insured
to the conveyee.
The rule invoked is the law applicable to conveyances made
by married women of lands held by them in their own right
and as a general estate. By the common law married
women could only convey their lands by fine and common
recovery. They first were authorized to convey by deed, with
privy examination jointly with their husbands, by an act
passed by North Carolina in 1715, which came to us with
other statutes of that colony and state, and, after several
Dee. 1905.] Insurance Co. op Tennessee v. Waller. 769
amendments by our general assembly, was carried into our
code, section 2076, and is now the law in this state.
The power of married women to convey their general
estate in land by deed is vested in them by this statute
only when their husbands join in the execution of the deed,
or, in other words, their incapacity to convey real estate so
held by them is removed, so as to enable them to convey
by joint deed of the husband and wife, with proper privy ex-
amination of the latter, and otherwise it remains as at common
law, and in order to effect a valid conveyance of the title of
a married woman to her general estate, the statute must be
strictly pursued. This is all that is held in the cases cited
and relied upon by counsel for plaintiff in error to sustain
his contention that the deed of ^Irs. "Waller to her husband is
void, because *^ she alone executed it, the chief of which are:
Cope v. Meeks, 3 Head, 387; Gillespie v. Worford, 2 Cold.
632; Mosely v. Partee, 5 Heisk. 26; Giffin v. Giffin (Tenn.
Ch.), 37 S. W. 710; Ellis v. Pearson, 104 Tenn. 591, 58 S. W.
318.
This rule and these cases, however, have no bearing on the
case at bar. Mrs. Waller did not hold and convey the prop-
erty insured in her own right, but as trustee for her hus-
band. By the common law married women had the capacity
and the power to take and hold lands as trustee and to execute
the duties and powers of the trust, including that of convey-
ing the trust property by deed, without the concurrence and
joinder of their husbands in all things as could a feme sole.
The reasons upon which the common-law rule withholding
from a married woman the power to convey her general estate
was founded, and for the provisions of the statute requiring
the concurrence of her husband in her conveyance, which
are that the husband may be present to protect his wife
from imposition, and his marital rights in the property
conveyed, and to prevent domestic disturbances, do not
apply to cases where she is acting as trustee, for as a
rule a trustee has no beneficial interest in the trust, and
there is therefore no interest for the husband to protect;
but we do not mean to hold that a married woman can-
not now accept and execute a trust in which she is interested.
The authorities fully support these conclusions.
Mr. Bishop in his work on Married Women, volume 1, sec-
tion 700, says: "Since the wife has the capacity to receive
an estate, real or personal, she may receive it as ** trustee for
Am. St. Rep., Vol. 115 — 19
770 American State Reports, Vol. 115. [Tenn.
use of the third person"; citing Gridley v. Winant, 23 IIow,
500, 16 L. ed. 411; Springer v. Berry, 47 Me. 330; Sawyer's
Appeal, 16 N. H. 459; 2 Kent's Commentaries, 151; Barneby
V. Griffin, 3 Ves. 266.
He further says, volume 2, sections 115-118: "We saw in
the first volume that a wife may be a trustee even where
she is under all the incapacities of the law. A fortiori, she
may be under the statutes which free her more or less from
the disabilities of coverture, and confer on her the power to
hold property like a feme sole to her own use. As a hus-
band may, and often does, hold property, the true owner
of which is his wife, and the wife sometimes holds property,
the true owner of which is her husband, this doctrine of
resulting trust finds a not infrequent exemplification in the
marriage relation. And it is in essence and principle pre-
cisely the same between husband and wife as between any
other persons."
Mr. Perry in his work on Trusts, volume 1, section 48,
says: "Married women may become trustees by deed, gift,
bequest, appointment, or by operation of law. If an estate
comes to a married woman in any way charged with a trust,
her coverture cannot be pleaded in bar of the trust; and a
court of equity will enforce its execution; and when the
legal title to lands in trust was cast by descent upon a married
woman, and the law required that a deed executed by her
should be acknowledged as executed voluntarily, and she re-
fused so to acknowledge it, the court compelled her by decree.
But specific performance will not be enforced by feme
covert trustee *"* for sale upon her contract as trustee to
convey. There is no less judgment and discretion in the
w^oman after marriage than before. Sir John Trevor thought
she rather improved by her husband's teaching. The reasons
of her disabilities are founded upon her own interests, or her
husband's or both; or rather upon the broader policy of the
law which, for the purpose of domestic peace and happiness,
merges the proprietary interests of the wife during coverture
in her husband, and will not permit her to hold interest
separate from and independent of, and possibly antagonistic
to, him. But the policy of the law has. however, been
very much modified by legislation in later years. But where
such interests are not concerned, she possesses the same legal
capacity as if she were sui juris. Thus, she may execute any
Dec. 1905.] Insurance Co. op Tennessee v. Waller. 771
kind of power, whether simply collateral, appendant, or in
gross ; and it is immaterial whether it is given her while sole
or married.
"In equity the absolute interest in the trust fund is
vested in the cestui que trust. The trustee is a mere instru-
ment, and any power or authority in the trustee must have
the character of a power simply collateral ; therefore, there is
nothing, as respects legal capacity, to prevent married women
from administering a discretionary trust. But she cannot
create a trust in her absolute property, except by joining her
husband in conveying it, or in executing a declaration of
trust."
In section 50 the author points out certain inconveniences
** which may arise in the execution of a trust by a married
woman, on account of her inability to execute bonds and do
certain other things, and then (section 51) says: "Subject to
these inconveniences, a married woman can always be a
trustee; and she may even be a trustee for her hxisband, as
well as her husband for her, and courts will find means to
enforce the trusts."
In Moore v. Cottingham, 90 Ind. 239, the wife in the exe-
cution of a parol trust in favor of her husband, conveyed
the property for his use, without his joinder, and the convey-
ance was held valid. In that case it is said: "Had she been
the beneficial owner of the land the deed would have been
worthless, as a married woman has no power to convey her
lands, unless the husband joins in the conveyance. This
rule, however, does not apply to lands held by her as trustee,
but by express terms of the statute applies to lands of the
wife, that is, those of which she is the beneficial owner. As
to those held by her as trustee, she is under no legal disability,
but possesses the same capacity as though slie were a feme
sole. This mast be the rule, as it is well settled that a married
woman may be a tru.stee, even for her husband, and she may
be compelled to execute her trusts This nnist in the
very nature of things be so, especially in view of the fact that
the hu.sband was himself the cestui (jue trust. If, then, the
wife could have been re(|uired to convey the land in execution
of the trusts, it nuist follow that her conveyance of it volun-
tarily made, amounts to a comjilcte execution of the same.
The husband *" could not have been re(iuired to unite in the
deed, and therefore the deed of the wife was sufiicient. It
772 American State Reports, Vol. 115. [Tenn.
therefore appears to us that the trust, found by the court to
exist, may be proved to show that the deed made was in exe-
cution of such trust, and that it was sufficient for such pur-
pose. ' '
In Harden v. Darwin, 66 Ala. 55, a well-considered case,
it is said: "The first principle is well settled, without conflict
among the authorities, that a married woman could, at common
law, act as trustee, not being incapacitated to do so by the
fact of coverture : 1 Bishop on Married Women, 700 ; 2 Bishop
on Married Women, 115 ; 1 Perry on Trusts, 48, 49 ; Hill on
Trustees, 48 ; Lewin on Trusts and Trustees, 34, 35. And the
principle is, in a measure, strengthened by the policy of mod-
ern legislation, which has established a system of 'mar-
ried women's laws,' encouraging the tenure of feme covert
of separate estates in their own name and for their own bene-
fit, and conferring on them the right to sue and be sued
alone in certain cases, and authorizing them to devise or
bequeath such property as if they were feme sole: Const.
1875, art. X, 6, 7 ; Code 1876, 2704-2713, 2892.
"The wife's power as trustee, over such property as she
may hold in trust seems also to be well settled. Chancellor
Kent says: 'She may transfer a trust estate, by lease and
release, as a feme sole': 2 Kent's Commentaries, 151. It is
added in Bishop on Married Women, 700, that 'she may exe-
cute a power of attorney to convey such an estate, and a con-
veyance under it will be good. She ^"^ may, likewise, bring
suits as trustee, which has been allowed where her husband
joined as plaintiff with her.'
"In Gridley v. Wynant, 23 How. (U. S.) 500, 16 L. ed.
411, it was said by Campbell, J. : * There is no incapacity in a
married woman to become a trustee, and to exercise the legal
judgment and discretion belonging to that character. A
trustee, in equity, is regarded in the light of an instrument,
or agent, for the cestui que trust, and the authority confided
to him is in the nature of a power. It has long been settled
that a married woman may execute a power, without the
co-operation of her husband. ' And it has never been doubted,
we may add, that she may act as agent, either for her husband
or a stranger, and that coverture takes from her no capacity
in this respect: 1 Bishop on Married Women, 701; Lang v.
Waters' Admr., 47 Ala. 624. And where there is an agree-
ment, express or implied, on the wife's part, to convey to the
Dec. 1905.] Insukance Co. of Tennessee v. Waller. 773
husband on request by him, there is a clear resulting trust ;
2 Story's Equity Jurisprudence, 12th ed., 1201-C, note 1;
2 Bishop on Married Women, 124; Cotton v. Wood, 25 Iowa,
43; also Cairns v. Coolburn, 104 Mass. 274; Whitten v.
Whitten, 3 Cush. 191; Fox v. Doherty, 30 Iowa, 334."
There is no statute in Tennessee changing the common law
on this subject. Those of North Carolina and Tennessee, to
which we have referred, were not intended to restrict the
capacity and powers of married women, but to enlarge them,
and they apply only to conveyances of lands held by femes
covert in their own right.
** A married woman in Tennessee, when not restricted
by the muniments of title under which she holds, may also
convey lands held by her as a separate estate without the
joinder of her husband; Barnum v. Le Master, 110 Tenn.
638, 75 S. W. 1045, 69 L. R. A. 353 ; Vick v. Gower, 92 Tenn.
391, 21 S. W. 677; Dewey v. Goodman, 107 Tenn. 244, 64
S. W. 45. This, however, does not affect this case.
We are therefore of the opinion that in this state a married
woman may accept, hold and execute a trust relating to real
estate, and that she has the power, in the execution of the
trust, to convey real estate without the concurrence of her
husband or his joinder in the conveyance made by her; and
that this rule extends to trusts in which the husband of the
trustee is the beneficiary, and to conveyances made in its
execution directly to him.
It is also contended by the plaintiff in error that, since
the defendant in error concedes the parol trust created in
his favor to have been tainted with fraud, it is void,
and this court will not enforce it. This would be a very
serious question, and we think a fatal one, to the case
of the defendant in error but for the fact that the trust
has been executed by the convej^ance made to him by Mrs.
Waller, and there is now no effort in this ca.se to enforce it.
The defendant in error now has both the legal and equitable
title to the property in question, and the previous fraud will
not bar him from a recover}' upon a contract in relation to it,
or for trespass committed '" upon it: Butlar v. Butlar, 67
N. J. Eq. 136, 56 Atl. 722; Bolton v. Pittney, 46 N. J.
Eq. 610, 22 Atl. 56.
It results, therefore, that there is evidence in the record
tending to show, and we think sufTicient for that purpose,
774 American State Reports, Vol. 115. [Tenn.
that the defendunt in error was the sole and absolute owner
of the houses insured and destroyed, and that he was seised
in fee of the lots upon which they were erected, as covenanted
in the policy, and therefore this assignment of error must be
overruled.
Other assignments of error were disposed of in an oral
opinion. Judgment affirmed.
THE CREATION OF TRUSTS IN LAND BY PABOL.
I. Nature, Kinds, and Validity in General, 774.
II. Simple Trusts.
a. The General Rule.
1. Necessity of Writing in General, 776.
2. What Constitutes Trust in Land Within Rule, 779.
3. Manifestation of Oral Trust in Writing, 780.
4. Part Performance of Trust, 782.
5. Execution of Trust, 783.
b. The Exceptional Rule.
1. Creation Contemporaneously with Transfer of Land, 784.
2. Creation Independently of Transfer of Land, 786.
m. Constructive Trusts.
a. In General, 786.
b. Actual Fraud, 787.
c. Constructive Fraud.
1. Natiure and Scope in General, 791.
2. In Domestic Relations.
A. Husband and Wife, 7,92.
B. Parent and Child, 793.
C. Guardian and Ward, 794.
D. Brothers or Sisters, 794.
8. Between Priest and Parishioner, 795.
4. Between Attorney and Client, 795.
5. Between Principal and Agent, 795.
6. Between Partners, 795.
7. Between Cotenants or Joint Tenants, 796.
8. Between Debtors and Creditors, 796.
9. In Miscellaneous Relations, 798.
I. Nature, Kinds and Validity in GeneraL
By an express trust in land is meant one that is created by express
agreement of the parties: Learned v. Tritch, 6 Colo. 433; Oberlender
V. Butcher, 67 Neb. 410, 93 N. W, 764.
In England, before the adoption of the statute of frauds in 1676,
express trusts in land possessed the same force and validity when
created by parol, or, in other words, orally, as when created in writing.
By that act, however, in order that an express trust in land might
be enforceable, it was made requisite that it be manifested in writ-
ing. Only trusts by implication of law and resulting trusts were ex-
cepted from this requirement.
This statute, in connection with quite similar exceptions, has been
adopted in most of the states of the Union, and in some of them the
Dec. 1905.] Insurance Co. of Tennessee v. Waller. 775
further requirement has been added that express trusts in land must
not only be manifested, but must also be created, in writing: See
Learned v. Tritch, 6 Colo. 433.
The class of trusts excepted from the requirement of writing has
been variously named in various jurisdictions as trusts by implica-
tion of law, trusts by operation of law, implied trusts, constructive
trusts, resulting trusts, or trusts arising or resulting by operation of
law. In the light of judicial discussion of these terms it may now
be said that the phrases "trusts by implication of law," "trusts by
operation of law," "implied trusts," and "trusts arising or resulting
by operation of law" are all synonymous, and embrace all trusts
where a transaction of equitable cognizance is inseparably connected
with the creation of the trust. The terms "constructive trusts" and
"resulting trusts," on the other hand, signify the two kinds of implied
trusts. (The question of terminology is somewhat discussed in Wood
v. Rabe, 96 N. Y. 414, 48 Am. Eep. 640, and by Brown, P. J., in
Hutchinson v. Hutchinson, 84 Hun, 482, 32 N. Y. Supp. 390.)
A resulting trust is one which results from the conduct and rela-
tion of the parties to a transfer of land, independently of any agree-
ment whatsoever between them: Learned v. Tritch, 6 Colo. 433. It
is a pure creation of equity to promote what is conceived by the law
to be good faith between the parties, and exists only in the absence
of an agreement between them in relation to its subject matter:
Stevenson v. Crapnell, 114 111. 19, 28 N. E. 379; Godschalk v. Fulmer,
176 HI. 64, 51 N. E. 852; Benson v. Dempster, 183 111. 297, 55 N. E.
651; Hillman v. Allen, 145 Mo. 638, 47 S. W. 509; Pollard v. Mc-
Kenney, 69 Neb. 74, 96 N. W. 679, 101 N. W. 9; Jamison v. Miller,
27 N. J. Eq. 586; Wiser v. Allen, 92 Pa. 317. Thus where land is
deeded to one person by absolute deed while another pays the con-
sideration therefor, in the absence of any agreement between the
parties, the law raises a resulting trust in the land, so that the ap-
parent grantee holds the title as trustee for the person who paid
the consideration: Champlin v. Champlin, 136 111. 309, 29 Am. St.
Rep. 323, 26 N. E. 526.
A constructive trust, on the other hand, is merely an express trust
wherein some transaction of equitable cognizance is inseparably con-
nected with the creation of the trust, bo that a court of equity has
jurisdiction to administer relief to the parties on the whole trans-
action, including the express agreement between them, notwithstand-
ing that agreement is oral and would not be cognoscible in a court
of justice in the absence of the equitable elements Connected with
it. A constructive trust can never arise in the absence of an ex-
press agreement of trust between those concerned in the transfer
of the legal titles of land, but is always superim|)oscd upon and
could not exist without an express oral trust, which in turn would
be unenforceable without the constructive trust. A i)erson who hoMs
776 American State Reports, Vol. 115. [Tenn.
land subject to a constructive trust is often termed in the decisions
a trustee ex maleficio. (See the third division of this article for a
full discussion of constructive trusts.)
It is appropriate, therefore, to divide all express oral trusts in
land into two classes: Constructive trusts, and those in which no
transaction of equitable cognizance is involved, which may properly
be called simple trusts. Eesulting trusts are not, however, in any
view, express trusts. Indeed, a resulting trust does not arise where
there is an express agreement of trust between the parties, although
such agreement is invalid. (See cases cited on page 775.)
In the absence of a statute of frauds prohibiting oral trusts in
land, the distinction between simple and constructive trusts is mostly
immaterial, for in such case, except as affected by the necessity of
consideration to support simple trusts, the validity and effect of
simple and constructive trusts is substantially the same; but in juris-
dictions where simple trusts are required to conform to the require-
ments of a statute of frauds, from the operation of which con-
structive trusts are excepted, a wide divergence becomes manifest be-
tween the validity and effect of simple and constructive trusts.
Conceding that the statute of frauds is a wise and salutary enact-
ment, there is fair ground for the distinction which it recognizes
between simple and constructive oral trusts. If the rule requiring
at least a written memorandum, in case of dealings with land, was
to have any efficiency at all, it is manifest that a mere careless in-
difference to or negligent disregard of its requirements, as is shown
in an attempt to create a simple verbal trust, must be interdicted.
Where, however, there is some equitable excuse for neglect of the
requirements of the statute, as where, for instance, that neglect wa«
induced by inadvertence, mistake, imposition, or fraud, either of
which has always been a ground for equitable interposition, a con-
structive trust arises, and courts of equity are. ever ready to inter-
vene, the statute law permitting.
n. Simple Trusts,
a. The General Bule.
1. Necessity of Writing in General. — In most states a simple trust
in land, to be enforceable, must be in writing: Oden v. Lockwood,
136 Ala. 514, 33 South. 895; Salyers v. Smith, 67 Ark. 526, 55 S. W,
936; Von Trotha v. Bamberger, 15 Colo. 1, 24 Pac. 883; Hayden v.
Denslow, 27 Conn. 335; Walker v. Brown, 104 Ga. 357, 30 S. E. 867;
Potter V. Clapp, 203 111. 592, 96 Am. St. Rep. 322, 68 N. E. 81;
Brown v. White, 32 Ind. App. 100, 67 N. E. 273; Gregory v. Bowlsby,
115 Iowa, 327, 88 N. W. 822; Wright v. King, Har. Ch. 12; Cameron
V. Nelson, 57 Neb. 381, 77 N. W. 771; Elder v. Webber (Neb.), 92
N. W. 126; Eaton v. Eaton, 35 N. J. L. 290; Sturtevant v. Sturtevant,
Dec. 1905.] Insurance Co. of Tennessee v. Waller. 777
20 N. Y. 39, 75 Am. Dec. 371; Wheeler v. Eeynolds, 66 N. Y. 227.
In some of these states the language of this rule in substance is that
such trust must be manifested or proved by some writing signed by
some party enabled to create the trust: Learned v. Tritch, 6 Colo.
433; Home v. Ingrahara, 125 111. 198, 16 N. E. 868; Moore v. Horsley,
156 111. 36, 40 N. E. 323; Mohn v. Mohn, 112 Ind. 285, 13 K E. 859;
McClain v. McClain, 57 Iowa, 167, 10 N. W. 333; Andrew v. Concan-
non, 76 Iowa, 251, 41 N. W. 8; Brown v. Barngrover, 82 Iowa, 204, 47
N. W. 1082; Dunn v. Zwilling, 94 Iowa, 233, 62 N. W. 746; Hoon v.
Hoon, 126 Iowa, 391, 102 N. W. 105; Heddleston v. Stoner, 128 Iowa,
525, 105 N. W. 56; Ingham v. Byrnell, 31 Kan. 333, 2 Pac. 804;
Dorsey v. Clarke, 4 Har. & J. 551; McElderry v. Shipley, 2 Md. 25,
56 Am, Dec. 703; Wolf v. Corby, 30 Md. 356; Northampton Bank v.
Whiting, 12 Mass. 104; Green v. Cates, 73 Mo. 115; Kogers v. Kamey,
137 Mo. 598, 39 S. W. 66; Hillman v. Allen, 145 Mo. 638, 47 S. W.
509; Smith v. Howell, 11 N. J. Eq. 349; Aller v. Crouter, 64 N. J.
Eq. 381, 54 Atl. 426; Jackson v. Moore, 6 Cow. 706; Jeremiah v.
Pitcher, 20 Misc. Kep. 513, 45 N. Y. Supp. 758; Dilts v. Stewart (Pa.),
1 Atl. 587; Pinney v. Fellows, 15 Vt. 525; but in other states the more
stringent language is used that such trust must be created or de-
clared in writing signed by such party: Patton v. Beecher, 62 Ala.
579; White v, Farley, 81 Ala. 563, 8 South. 215; Brackin v. Newman,
121 Ala. 311, 26 South. 3; Brison v. Brison, 75 Cal. 525, 7 Am. St.
Rep. 189, 17 Pac. 689; Barr v. O'Donnell, 76 Cal. 469, 9 Am. St. Rep.
242, 18 Pac. 429; Doran v. Doran, 99 Cal. 311, 33 Pac. 929; Smith
V. Peacock, 114 Ga. 691, 88 Am. St. Rep. 53, 40 S. E. 757; Eaton v.
Barnes, 121 Ga. 548, 49 S. E. 593; Ellis v. Hill, 162 111. 557, 44 N.
E. 858; Monson v. Hutchin, 194 111. 431, 62 N. E. 788; Peterson v.
Boswell, 137 Ind. 211, 36 N. E. 845; Patterson v. Mills, 69 Iowa,
755, 28 N. W. 53; Moran v. Somes, 154 Mass. 200, 28 N. E. 152; Shaf-
ter V. Huntington, 53 Mich. 310, 19 N. W. 11; Thompson v. Marley,
102 Mich. 476, 60 N. W. 976; Randall v. Constans, 33 Minn. 329, 23
N. W. 530; Hansen v. Berthelson, 19 Neb. 433, 27 N. W. 423; Pollard
V. McKenney, 69 Neb. 742, 96 N. W. 679, 101 N. W. 9; Ryan v. Dox,
34 N. Y. 307, 90 Am, Dec. 696; Wood v. Rabe, 96 N. Y. 414, 48 Am.
Bep. 640; Fleming v. Donahue, 5 Ohio, 255. It would seem, however,
that both expressions of the rule have been interpreted by the courts
as a statement of a rule of evidence preventing the proof of a
simple trust by parol rather than as one of substantive law wholly
invalidating it, and no clear difference in the application of the statu-
tory rule, based on this difference of language, can be discerned.
There nevertheless are some decisions wherein the courts have de-
clared that where such trusts are not duly manifested in writing
they are void (Moore v. Campbell, 102 Ala. 445, 14 South. 780;
Champlin v. Champlin, 136 111. 309, 29 Am. St. Rep. 323, 26 N. E.
526; Johnston v. Johnston, m IIL 385, 27 N. E. 930; Monson v.
778 American State Reports, Vol. 115. [Tenn.
Hutchin, 194 111. 431, 62 N. E. 788; Hain v. Robinson, 72 Iowa, 735,
32 N. W. 417; Rogers v. Richards, 67 Kan. 706, 74 Pac. 255; Dorsey
V. Clarke, 4 liar. & J. 551; Wolf v. Corby, 30 Md. 356; Renz v. Stoll,
94 Mich. 377, 34 Am. St. Rep. 358, 54 N. W. 276; Luse v. Reed> 63
Minn. 5, 65 N. W. 91; In re Ryan's Estate,. 92 Minn. 506, 100 N. W.
380; CoflFery v. Sullivan (N. J. Eq.), 49 Atl. 520; Salter v. Bird, 103
Pa. 436), in equity as well as at law (Wheeler v. Reynolds, 66 N.
Y. 227), and this language is also found in some of the statutes; but
in the decisions this language has usually been used merely in repe-
tition of the statutory language or else in cases where it was imma-
terial whether the oral trust was void or merely unenforceable, and
in the statutes its force is generally modified by the context. In
McCormick Harvesting Machine Co. v. Griffin, 116 Iowa, 397, 90 N.
W. 84, however, it is said with strict accuracy that an oral trust in
land is not void, but merely unenforceable by reason of the inability
of the cestui que trust to prove it. For oral evidence is not admis-
sible for that purpose, but only documentary: Maroney v. Maroney,
97 Iowa, 711, 66 N. W. 911; Luckhart v. Luckhart, 120 Iowa, 248,
94 N. W. 461; Hillman v. Allen, 145 Mo. 638, 47 S. W. 509; Graves
V, Graves, 29 N. H. 129; Farrington v. Barr, 36 N. H. 86; Moore v.
Moore, 38 N. H. 382; McVay v. McVay, 43 N. J. Eq. 47, 10 Atl.
178; Aller v. Crouter, 64 N. J. Eq. 381, 54 Atl. 426; Rathbun v. Rath-
bun, 6 Barb. 98; Jeremiah v. Pitcher, 20 Misc. Rep. 513, 45 N. Y.
Supp. 758.
It follows from this rule requiring documentary evidence of a trust
in land that an absolute deed of land cannot be changed by oral
testimony into a deed of trust: Jones v. Van Doren, 18 Fed. 619;
Skahen v. Irving, 206 111. 597, 69 N. E. 510; Rogers v. Ramey, 137
Mo. 598, 39 S. W. 66. Thus an oral agreement by the grantee of
land to hold it in trust for the grantor or to reconvey it to him
upon the happening of a certain event is not enforceable: Patton v.
Beecher, 62 Ala. 579; Barr v. O'Donnell, 76 Cal. 469, 9 Am. St. Rep.
242, 18 Pac. 429; Feeney v. Howard, 79 Cal. 525, 12 Am. St. Rep.
162, 21 Pac. 984, 4 L. R. A. 826; Bohm v. Bohm, 9 Colo. 100, 10 Pac.
790; Lawson v. Lawson, 117 111. 98, 7 N. E. 84; Biggins v. Biggins,
133 111. 211, 24 N. E. 516; Campbell v. Brown, 129 Mass. 23; Hillman
V. Allen, 145 Mo. 638, 47 S. W. 509; O'Brien v. Gashin, 20 Neb.
347, 30 N. W. 274; Dailey v. Kinsler, 31 Neb. 340, 47 N. W. 1045;
Thomas v. Churchill, 48 Neb. 266, 67 N. W. 182; Veeder v. McKinley-
Lanning Loan & Trust Co., 61 Neb. 892, 86 N. W. 982; Doying v.
Chesebrough (N. J. Eq.), 36 Atl. 893; Pusey v. Gardner, 21 W. Va,
469; Fairchild v. Rasdall, 9 Wis. 379. This is equally true, although
the grant was made without consideration: Gregory v. Bowlsby, 115
Iowa, 327, 88 N. W. 822; Gee v. Thraikill, 45 Kan. 173, 25 Pac. 588;
Farrington v. Barr, 36 N. H. 86. Thus an oral promise by the gran-
tee to will certain other property to the grantor (Manning v. Pippen,
Dec. 1905.] Insurance Co. of Tennessee v. Waller, 779
86 Ala. 357, 11 Am. St. Kep. 346, 5 South. 572), or to support the
grantor for life (Salyers v. Smith, 67 Ark. 526, 55 S. W. 936), or to
hold the deed as an escrow (Stevenson v. Crapnell, 114 111. 19, 28
N. E. 379), or to permit the grantor to repurchase it at a given
price (Harper v. Harper, 5 Bush, 176), or to reconvey to the gran-
tor in case of failure to pay the purchase price (Gallagher v. Mars,
50 Cal. 23), is not enforceable. Moreover, where the grantee is
violation of the trust sold the land and appropriated the proceeds
the grantor cannot maintain an action to recover the proceeds: MohL
V. Mohn, 112 Ind. 285, 13 N. E. 859. And where a grantor of lanfi
claims that the grantee obtained the grant by fraud, and such gran-
tee had in turn granted it to a third person on an oral trust to hold
for herself, and the first grantor brought an action to compel a re-
conveyance of the land wherein a default judgment was obtained
against the latter grantee, even if it appeared on a trial subsequent
to the entry of the default that the first grantee did not obtain th«.
deed by fraud, she is not entitled to relief against the first grantor,
the trust by which the land was held for her being oral and thb
default against the latter grantee not having been set aside: Dailey
V. Kinsler, 31 Neb. 340, 47 N. W. 1045.
Similarly, where the grantor of land by absolute deed conveys
it to the grantee under a verbal trust on his part to hold the land
in trust for a third person, the trust is unenforceable: Lantry v.
Lantry, 51 111. 451, 2 Am. Rep. 310; Prouty v. Moss, 111 111. App.
536; Green v. Gates, 73 Mo. 115.
Again, an oral agreement by a grantee of land to take and hold
for another land, the purchase price of which was paid for by the
other, is within the statute of frauds: Coleman v, Bowles' Admr.
(Ky.), 56 S. W. 651.
Likewise a declaration by a person on his deathbed that he desired
that one-half of certain land should be the property of a certain per-
son does not, he having made no will, create a trust in the land as
against his heir: Campbell v. Brown, 129 Mass. 23.
And where land subject to an oral trust passed by mesne convey-
ances to a certain grantee, who, dying, the property passed to her
heirs, the trustor cannot enforce the trust as against her heirs: Law-
son V. Lawson, 117 111. 98, 7 N. E. 84.
Finally, in Farrand v. Beshoar, 9 Colo. 291, 12 Pac. 196, the court
held that where a simple trust in land rests in parol, a di-cree sus-
taining the trust cannot be sustained.
2. What Constitutes Trust in Land Within Rule. — In some states
the rule requiring a trust to be manifested in writing is directed
not alone at trusts concerning lands, but also at trusts in any man-
ner relating to lands: Shafter v. Huntington, 53 Mirh. 310, 19 N.
W. 11; Randall v. Constans, .33 Minn. 3J9, 2:\ N. \V. r)30; I'ollnrd v.
McKenney, 68 Neb. 742, 96 N. W. 079, 101 \. W. 9; Ryan v. Dox, 34
780 American State Reports, Vol. 115. [Tenn.
N. Y. 307, 90 Am. Dee. 696. It is therefore held that where by a
will certain land was devised to a devisee under an oral trust that
the devisee would give five hundred dollars to a certain beneficiary,
the fact that the executor of the estate was required by the will to
sell and convert into money all the estate before distribution does
not validate the trust as one relating to moneys: Moore v. Campbell,
102 Ala. 445, 14 South. 780. And where a grantor conveys land to
another for a part present consideration and on the agreement that
the grantee shall hold one-half of the land in trust for the grantor,
and upon the sale of the land pay the grantor one-half the net avails
thereof, an action to recover from the grantee one-half thereof can-
not be maintained: Cameron v. Nelson, 57 Neb. 381, 77 N. W. 771.
In Betchel v. Ammon, 199 Pa. 81, 48 Atl. 873, however, the court
holds that an oral trust to sell lands and account for the proceeds,
where the lands have been sold and the proceeds are in the hands of
the trustee, is not within the statute of frauds. And in New York,
where the statute of frauds has the broad language mentioned in the
preceding paragraph, the court held that where land is conveyed
under an oral trust to hold for a certain cestui que trust, and the
grantee conveys all the land to purchasers and receives the purchase
money and pays over all except the last portion of it to the cestui
que trust, but refuses to pay over such residue, the cestui que trust
may maintain an action to recover it and the statute of frauds is
no defense therein, the trust having been performed so far as it
concerned realty. "If the defendant should say that he now can
keep the money because he once could keep the land, still the plaintiflf
can say with better justice that he is not entitled to the money be-
cause it was originally his, and though he voluntarily suspended his
right to it for a season, he did so without lawful consideration and
in confidence that when it could be restored to him it would be.
That time has come, and there is no obstacle to its restoration":
Bork V. Martin, 132 N. Y. 280, 28 Am. St. Rep. 570, 30 N. E. 584.
Again, the fact that a chose in action was secured by a mortgage
on land does not render a trust in the chose in action subject to the
provisions of the statute of frauds relating to trusts in land: Patter-
son V. Mills, 69 Iowa, 755, 28 N. W. 53.
3. Manifestation of Oral Trust in Writing. — It is not requisite
that the writing whereby a simple trust in land is manifested be
made contemporaneously with the creation of the trust, but it may
be established by a writing signed by the alleged trustee and setting
forth the trust made at any time, whether long thereafter or in
anticipation and contemplation thereof: Jackson v. Moore, 6 Cow.
706; Rathbun v. Rathbun, 6 Barb. 98; Hutchinson v. Hutchinson, 84
Hun, 482, 32 N. Y. Supp. 390; McVay v. McVay, 43 N. J. Eq. 47, 10
Atl. 178; Aller v. Crouter, 64 N. J. Eq. 381, 54 Atl. 426. Thus where
the grantee of land took the same on a verbal trust to convey a por-
Dec. 1905.] Insi/eance Co. of Tennessee v. Waller, 781
tion thereof to the value of five hundred dollars to her daughter
upon her arrival at the age of twenty, and five years afterward put
this verbal agreement in writing, there is a valid enforceable trust in
her daughter's favor: Pendleton v. Patrick (Ky.), 57 S. W. 464. So
where the grantee of land under an oral trust put the same in writ-
ing in strict accordance with the oral declaration a long time after
the title to the land had vested in him, the trust is valid against a
creditor of the trustee: lauch v. De Socarras, 56 N. J. Eq. 538, 39
Atl. 370.
This written evidence of the trust "may be found and deduced
from one or more writings if they bear a relation to each other and
import a trust. The writing need not be of a formal character, but a
trust may be imported and proved by letters, deeds, and other writ-
ings signed by the party to be charged": Aller v. Crouter, 64 N. J.
Eq. 381, 54 Atl. 426. It may thus be deduced from a writing made
ten years after the creation of the trust, which writing the trustee
had signed merely by writing his initials in the body: Smith r.
Howell, 11 N. J. Eq. 349.
Moreover, "while parol evidence of an express trust is to be re-
jected, yet, when an instrument is claimed to be an acknowledg-
ment and proof of such a trust, the circumstances under which it
was made may be used to elucidate its construction": Aller v. Crou-
ter, 64 N. J. Eq. 381, 54 Atl. 426.
Depositions and Pleadings as Manifestation of Trust. — In some de-
cisions it is held that a simple oral trust is suflBciently manifested in
writing by a deposition signed by the alleged trustee and clearly set-
ting out the terms of the trust: Mclntire v. Skinner, 4 G. Greene, 89;
Pinney v. Fellows, 15 Vt. 525. Moreover, an answer in chancery ad-
mitting the trust, although not responsive to the bill in the cause,
sufficiently manifests the trust to satisfy the statute of frauds: Jami-
son V. Miller, 27 N. J. Eq. 586. And where a verified petition to en-
force an oral trust in land sets up the trust and the verified answer
avers that defendant has no reason to doubt the averments of the
petition, and is signed by the defendant in the verification, the trust
is suflBciently manifested in writing: McVay v. McVay, 43 N. J. Eq.
47, 10 Atl. 178.
In Davis v. Stambaugh, 163 111. 557, 45 N. E. 170, however, the
court held that where a defendant in a suit to enforce a simple oral
trust in lands claimed the benefit of the statute of frauds by his
answer, neither an admission of the existence and character of the
trust contained in his deposition, nor a similar admission in his
answer, is sufficient to satisfy the requirements of the statute, for
the reason that "a party who insists upon his statutory right aii<l
does not submit to waive it cannot be let,'ally bound by a (leclar.ntii>n
or creation of trust which the statute declares to be utterly void and
of no effect."
782 American State Reports, Vol. 115. [Tenn.
4. Part Performance of Trust. — "Acts of part performance, such
as will furnish a foundation for enforcing a verbal contract respect-
ing land otherwise void under the statute of frauds, must be such
as are done in pursuance, or according to the terms, of the contract,
and which in some manner affect or change the relation of the par-
ties so that they would be defrauded if the contract were not en-
forced Actual possession in furtherance of the terms of the
contract, especially when accompanied by the making of permanent
and valuable improvements upon the premises, may be made the
foundation for a decree of specific performance; but mere possession
will not be deemed a part performance sufficient to justify such re-
lief when it may be fairly referable to some other cause than the
execution of the contract": Von Trotha v. Bamberger, 15 Colo. 1,
24 Pac. 883. "Acts to be deemed a part performance of a parol
agreement, so as to estop a party from insisting upon the statute of
frauds, should be so clear, certain, and definite in their object and
design as to refer exclusively to a complete and perfect agreement
of which they are a part execution And they must be a part
performance of the precise agreement set up": Kathbun v. Eathbun,
6 Barb. 98. So where a party purchases land under a verbal agree-
ment to hold the same in trust for another, and the latter on the
faith of the agreement thereupon advances a part of the purchase
money and comes from another state and takes possession of the prem-
ises, there is such part performance and execution of the trust as
takes it out of the statute of frauds: Oberlerder v. Butcher, 67 Neb.
410, 93 N. W. 764. This same principle is also applicable where the
cestui que trust of land takes possession or remains in possession
thereof pursuant to a verbal agreement made at the time of the crea-
tion of an oral trust therein: Spies v. Price, 91 Ala. 166, 8 South.
405; Simonton v. Godsey, 174 111. 28, 51 N. E. 75; Dorsey v. Clarke,
4 Har. & J. 551. Where, however, the trustee charges the cestui que
trust in possession with rent, entering the same in his books, the
effect of the possession as part performance is annulled: Dorsey v.
Clarke, 4 Har. & J. 551. And where after title to land is taken in
the name of another the cestui que trust merely remains in posses-
sion without any agreement that such possession was in pursuance
of the verbal trust, the case is within the statute of frauds: Went-
worth v. Wentworth, 2 Minn. 277 (Gil. 238), 72 Am. Dec. 97. Simi-
larly, where the cestui que trust goes into possession pursuant to the
terms of a subsequent verbal agreement, independent of the agree-
ment of trust, he cannot defend his right to continue possession
thereof on the ground of the oral trust existing in his favor: Von
Trotha v. Bamberger, 15 Colo. 1, 24 Pac. 883.
Finally, a verbal promise by the owner of land, not founded on a
valuable consideration, to convey certain land to one who was in
possession thereof by his permission, cannot be enforced against him
or his heirs: Tolleson v. Blackstock, 95 Ala. 510, 11 South. 284.
Dec. 1905.] Insurance Co, of Tennessee v. Waller. 783
5. Execution of Trust. — "The statute of frauds is an insuperable
bar to an action to enforce a parol contract within its provisions,
but it does not make the transaction illegal, and parties are at liberty
to act under such contracts if they see proper": Eaton v. Eaton, 35
N. J. L. 290. It was enacted, not that parties might avoid trusts
that were executed, but rather to enable them, in case of an attempt
to enforce such trusts while they remained executory, to insist on
certain modes of proof in order to establish them: Hays v. Regar, 102
Ind. 524, 1 N. E. 386. Thus a person who holds land subject to a
simple oral- trust has a right to recognize his moral obligation and
convey the land to such person as his grantor intended, and on the
conditions the latter thought fit to impose, and when such convey-
ance is made the trust is executed, and it becomes immaterial whether
or not its performance could have been compelled: Bobbins v. Rob-
bins, 89 N. Y. 251. So where lands that were in fact the separate
property of a wife, but stood in the names of herself and husband,
and they joined in a deed of the lands to a third person under a
verbal trust on his part to reconvey to the wife individually, such
trust is not void, but only voidable, and if the property was in fact
reconveyed before any equities attached to it in the hands of the
third person, the reconveyance would put an unimpeachable title in
the wife: Gallagher v. Northrup, 215 111. 563, 74 N. E. 711, Cart-
wright and Hand, JJ., dissenting, reversing 114 111. App. 368. And
where a party receives a conveyance of lands from his brother on
the oral understanding that in case of the brother's death he would
convey to his daughters, which conveyance, the brother having died,
he makes, such conveyance would be regarded as made in perform-
ance of such agreement, and would be upheld as not affected by the
statute of frauds: Collins v. Collins, 98 Md. 473, 103 Am. St. Rep.
408, 57 Atl. 597.
The trust, when executed, is also valid against third parties as
well as between the parties. It does not lie in the mouth of a
third party in whose favor no estoppel is shown to exist to say that
the contract creating the trust was void and conferred no riirhts:
McCormick Harvesting Machine Co. v. Griffin, 116 Iowa, 397, 90 N.
W. 84. So where a widow who held land under an oral trust for her
children conveyed to each his respective share, a second husband is
not entitled to claim dower in such land: King v. BushuoU, 121 111.
656, 13 N. E. 245. And where such trust is executed, it is valid
against a judgment creditor of the trustee: Hays v. Kegar, 102 Ind.
524, 1 N. E. 38(5.
The validity of a simple oral trust, when fully ex(<'uted, is also
affirmed in many other cases: Polk v. Boggs, 122 Cal. 114, 54 Pac.
536; Church v. Sterling, 16 Conn. 388; llayden v. Denslow, 27 Conn.
335; Stringer v. Montgomery. Ill Ind. 4S9. 12 N. E. 474; Barber v.
Milner, 43 Mich. 248. '> N. W. 92; Bi.rk v. Martin. 132 N. V. 2S0, 28
Am. St. Kep. 570, 30 N. E. oS4. And in support of a conveyance
784 A.MERICAN State Reports, Vol. 115. [Tenn.
made pnranant to such oral trust in land, the parol agreement creat
ing may be proven: Brown v. White, 32 Ind. App, 100, 67 N. E, 271
b. The Exceptional Bule.
1. Creation Contemporaneously with Transfer of Land. — In a fev
states there is no statutory provision requiring a trust in lands to
be manifested in writing, and an express simple trust may be created
by an oral declaration of trust made contemporaneously with, or in
contemplation and anticipation of, the transfer of the legal title to
land by absolute deed: Cohn v. Chapman, 62 N. C. 92, 93 Am. Dec.
600; Pittman v. Pittman, 107 K C. 159, 12 S. E. 61, 11 L. R. A. 456;
Dover v. Rhea, 108 N. C. 88, 13 S. E. 614; Cobb v. Edwards, 117 N.
C. 244, 23 S. E. 241; Owens v. Williams, 130 N. C. 165, 41 S. E. 93;
Sykes v. Boone, 132 N. C. 199, 95 Am. St. Rep. 619, 43 S. E. 645;
Haywood v. Ensley, 8 Humph. 460; Thompson v. Thompson (Tenn.
Ch.), 54 S. W. 145; Woodfin v. Marks, 104 Tenn. 512, 58 S. W. 227;
Renshaw v. First National Bank (Tenn.), 63 S. W. 194; James v.
Pulrod, 5 Tex. 512, 55 Am. Dec. 743; Mead v. Randolph, 8 Tex. 191;
Bailey v. Harris, 19 Tex. 108; Leaky v. Gunfer, 25 Tex. 400; Gardner
V. Russell, 70 Tex. 453, 7 8. W. 781. Compare Mathews v. Massey,
4 Baxt. 450. So where a person, being in default in the payment of
the installments of the purchase price of certain land, accepted the
offer of a third person to pay the amount due and hold the land for
him, and assigned to him his contract of purchase of the land but
continued in possession of it, he may compel the transferee of the
land to execute the trust: Cloninger v. Summit, 55 N. C. 513. See,
also, Cohn v. Chapman, 62 N. C. 92, 93 Am. Dec. 600. Where, in con-
sideration of receiving a power of sale from the mortgagor of land,
the mortgagee agreed to buy the same in at the sale thereof under
the power and to convey a certain portion thereof to a trustee for
the mortgagor's wife, but afterward, after his purchase of the land,
refused to make such conveyance to the wife, equity will enforce
the agreement: Blount v. Carroway, 67 N. C. 396. Where a person
sold land under an oral agreement that the grantee would transfer
the land to another for a certain consideration on the grantor's re-
quest, such trust is enforceable: Sykes v. Boone, 132 N. C. 199, 95 Am.
St. Rep. 619, 43 S. E. 645. A parol contract under which two or more
persons buy land for their joint benefit, but take the title in the
name of one, may be enforced against the holder of the legal title:
Gardner v. Rundell, 70 Tex. 453, 7 S. W. 781. Moreover, where the
intending purchaser of land at judicial sale agreed previously and in
contemplation of the sale, or at the time of bidding, that he would
hold the land subject to redemption by another person (Cobb v. Ed-
wards, 117 N. C. 244, 23 S. E. 241), or held out to other intending
bidders at the sale that he was purchasing for some certain person
by reason whereof they were deterred from bidding against him
(Haywood v. Ensley, 8 Humph. 460; Woodfin v. Marks, 104 Tenn.
512, 58 S. W. 227), the cestui que trust may enforce the oral trust.
Dec. 1905.] Insurance Co. of Tennessee v. Waller, 785
In Tennessee, however, it is held that it is not competent to set
up a parol trust in opposition to the provisions of a deed. Indeed,
if the deed upon its face and by its terms is absolute and conveys to
the grantee a fee simple estate without more, the trust character
can be shown by oral evidence, because this would not, in the con-
templation of the law, in any way contradict the terms of the deed,
but would only complete it. But if the deed contains provisions
which expressly or by clear implication give the grantee a power or
discretion to defeat the trust, or are inconsistent with it, then the
trust does not exist in such shape as to be mandatory upon the gran-
tee. Thus if the deed by its express terms gives the grantee the
right to dispose of the land in such way as she may see fit, and for
such purpose as she may deem best, a parol trust to convey the prop^
erty to certain persons cannot be shown: Mee v. Mee, 113 Tenn. 453,
106 Am. St. Eep. 865, 82 S. W. 830.
The full validity of parol trusts in land of the type just described
was also formerly recognized in several other states, but they have
since been done away with by the extension of the statutes of frauds
in those states: Patton v. Beeeher, 62 Ala. 579; Church v. Sterling,
16 Conn. 388; Fleming v. Donahue, 5 Ohio, 255; Kisler v. Kisler, 2
Watts, 323, 27 Am. Dec. 308; Murphy v. Hubert, 7 Pa. 420.
Necessity of Consideration. — A consideration is not necessary to sup-
port a simple oral trust in lands, made at the time of, or in con-
templation and anticipation of, the transfer of the legal title: Sykes
V. Boone, 132 N. C. 199, 95 Am. St. Eep. 619, 43 S. E. 645. See, also,
Gardner v. Rundell, 70 Tex. 453, 7 8. W. 781.
Effect of Particular Matter on Validity of Trust. — The fact that the
cestui que trust under such an oral trust, as a condition precedent
to his right to receive a conveyance of the land, was required not
only to reimburse the purchaser of the legal title for his advances
in purchasing it, but was also to pay a certain debt he owed the
purchaser's wife, does not invalidate the trust: Owens v. Williams,
130 N. C. 165, 41 S. E. 93.
Amount and Kind of Evidence Necessary to Sustain Trust. — In order
that a court may give effect to an alleged oral trust in land, the
evidence ofTered to sustain it must be clear and convincing: Hamil-
ton V. Buchanan, 112 N. C. 463, 17 S. E. 159; Cobb v. Edwards, 117
N. C. 244, 23 S. E, 241; Renshaw v. First National Bank (Tenn.), 63
8. W. 194. Moreover, in North Carolina at least, the subsequent
declarations of the alleged trustee in support of the trust are not
by themselves alone sufficient evidence to sustain a judgment en-
forcing the trust; but while they are admissible in evidence for
that purpose, there must be evidence of other facts and circumstances
inconsistent with the idea that there was an absolute piirdiaso by
the alleged trustee: Taylor v. Taylor, 54 N. C. 240; Pittmau v. Pitt-
Am. St. Hep., Vol. 115—50
786 American State Reports, Vol. 115. [Tenn.
man, 107 N. C. 159, 12 S. E. 61, 11 L. E. A. 456; Cobb v. Edwards,
117 N. C. 244, 23 S. E. 241.
2. Creation Independently of Transfer of Land. — A trust in land
cannot, however, be created by parol independently of a transfer of
the legal title to the land, although for a valuable consideration, for
such transaction is in effect only the sale of an interest in land by
parol, and transgresses the provision of the statute of frauds requir-
ing such a sale to be evidenced in writing: Frey v. Ramsour, 66 N.
C. 466; Blount v. Carroway, 67 N. C. 396; Dover v. Rhea, 108 N. C. 88,
13 S. E. 614; Hamilton v. Buchanan, 112 N. C. 463, 17 S. E. 159;
Cobb V. Edwards, 117 N. C. 244, 23 S. E. 241; Kelly v. McNeill, 118
N. C. 349, 24 S. E. 738. Thus a parol agreement made by the pur-
chaser of land, after the purchase was consummated, to hold the land
in trust for others, is unenforceable: Hamilton v. Buchanan, 112 N.
C. 463, 17 S. E. 159; Kelly v. McNeill, 118 N. C. 349, 24 S. E. 738.
And where the legal estate in lands is not conveyed, a trust cannot
be raised by a parol declaration, even though founded on a valuable
consideration and followed by actual occupancy and the erection of
valuable improvements: Cobb v. Edwards, 117 N. C. 244, 23 S. E.
241.
m. Constructive Trusts.
a. In General. — As stated in the first division of this article, con-
structive trusts are not subject to the statutory provisions requiring
an express trust to be manifested in writing, but are in almost all,
if not all, jurisdictions expressly excepted from that requirement:
Patton V. Beecher, 62 Ala. 579; White v. Farley, 81 Ala. 563, 8 South.
215; Brison v. Brison, 75 Cal. 525, 7 Am. St. Rep. 189, 17 Pac. 689;
Hayne v. Herman, 97 Cal. 259, 32 Pac, 171; Wittenbrock v. Cass, 110
Cal. 1, 42 Pac. 300; Church v. Sterling, 16 Conn. 388, 401; Godschalk v.
Fulmer, 176 111. 64, 51 N. E. 852; Peterson v. Boswell, 137 Ind. 211,
36 N. E. 845; Patterson v. Mills, 69 Iowa, 755, 28 N. W. 53; Dorsey
V. Clarke, 4 Har. & J. 551; Moran v. Somes, 154 Mass. 200, 28 N. E.
152; Shafter v. Huntington, 53 Mich. 310, 19 N. W. 11; Randall v.
Constans, 33 Minn. 329, 23 N. W. 530; Pollard v. McKenney, 69 Neb.
742, 96 N. W. 679, 101 N. W. 9; Graves v. Graves, 29 N. H. 129, 141;
Farrington v. Barr, 36 N. H. 86; Moore v. Moore, 38 N. H. 382;
Ryan v. Dox, 34 N. Y. 307, 90 Am. Dec. 696; Wood v. Rabe, 96 N.
Y. 414, 48 Am. Rep. 640; Salter v. Bird, 103 Pa. 436.
Nature and Kinds of Constmctive Trusts. — While it has been declared
that a constructive trust will arise whenever by any mistake an instru-
ment of conveyance of land is made absolute instead of expressing
the trust intended (Fairchild v. Rasdall, 9 Wis. 379), yet the ordinary
ground of equitable interposition to enforce an oral trust in land is
fraud, actual or constructive, and whenever actual or constructive
fraud is inseparably connected with the creation of such a trust, a
court of equity will take cognizance of the matter and grant appropri-
Dec. 1905.] Insurance Co. of Tennessee v. Waller. 787
ate relief against the trustee: Brison v. Brison, 75 Cal. 525, 7 Am.
St. Rep. 189, 17 Pac. 689; Hayne v. Hermann, 97 Cal. 259, 32 Pac.
171; Wright v. Moody, 116 Ind. 175, 18 N. E. 608; Randall v. Con-
Btans, 33 Minn. 329, 23 N. W. 530; Pollard v. McKenney, 69 Neb. 742,
96 N. W. 679, 101 N. W. 9; Fairchild v. Rasdall, 9 Wis. 379. In
such case, however, the court does not act upon the oral agreement as
the primary thing, but the fraud gives it its jurisdiction, and the
oral agreement is cognizable by it as an element in the fraudulent
transaction: Randall v. Constans, 33 Minn. 329, 23 N. W. 530; Perkins
V. Cheairs, 2 Baxt. 194, In Parker v. Catron, 27 Ky. Law Rep. 536,
85 S. W. 740, the court says that constructive trusts are held not
within the statute of frauds because they rest in the end on the doc-
trine of estoppel, and the operation of an estoppel is never affected
by the statute of frauds.
Necessity of Actual Transfer of Land. — As in case of simple trusts
in states where they are recognized, so constructive trusts arise only
upon the actual transfer of land and not upon an executory contract
to hold land in trust: Perkins v. Cheairs, 2 Baxt. 194.
Necessity of Clear Case. — In order that a constructive trust may be
established, the fraud or mistake involved in it must be shown by
clear and convincing proof. Loose, indefinite, and unsatisfactory evi-
dence is never sufficient: Laughlin v. Mitchell, 14 Fed. 382; Brock
V. Brock, 90 Ala. 86, 8 South. 11, 9 L. R. A. 287; Von Trotha v. Bam-
berger, 15 Colo. 1, 24 Pac. 883; Lantry v. Lantry, 51 111. 451, 2 Am.
Rep. 310; Wilson v, McDowell, 78 111. 514; Hammond's Admx. v. Cad-
wallader, 29 Mo. 16.
b. Actual Fraud. — In order that a trust in land may arise by
reason of actual fraud, the title must be obtained by the alleged
trustee by false and fraudulent promises to hold and use the same
for designated uses, and must subsequently be converted to other
purposes or claimed by the grantee as his own. Mere subsequent
Iraud is not sufficient. There must be fraud in the original transac-
tion of such a character as to constitute a fraudulent coVitrivance for
the purpose of acquiring the legal title, and the title must have been
obtained through the fraudulent contrivance: Patton v. Beecher, 62
Ala. 579; Moseley v. Moselcy, 86 Ala. 289, 5 South. 732; Spies v. Price,
91 Ala. 166, 8 South. 405; Bohra v. Bohm, 9 Colo. 100, 10 Pac. 790;
Walter v. Klock, 55 111. 362; Biggins v. Biggins, 133 111. 211, 24 N.
E. 516; Rogers v. Richards, 67 Kan. 706, 74 Pac. 255; Luce v. Reed,
63 Minn. 5, 65 N. W. 91; Wheeler v. Reynolds, 66 N. Y. 227; Salter
V. Bird, 103 Pa. 436; Braden v. Workman (Pa.), 1 Atl. 655; Perkins
V. Cheairs, 2 Baxt. 194.
Thus the mere failure or refusal of an alleged trustee to comply
with the terms of an oral trust is not such fraud as will authorize
a court of equity to enforce the trust: Patton v. Bcechrr, 62 Ala. 579;
Moseley v. Moseley, 86 Ala. 289, 5 South. 732; Brock v. Brock, 90 Ala.
788 American State Reports, Vol, 115. [Tenn.
8«, 8 South. 11, 9 L. B. A. 287; Brison v. Brison, 75 Cal. 585, 7 Am.
St. Eep. 189, 17 Pac. 698; Bohm v. Bohm, 9 Colo. 100, 10 Pac. 790;
Perry v. McHenry, 13 111. 227; Eogers v. Simmons, 55 111. 76; Walter
V. Klock, 55 111. 362; Scott v. Harris, 113 111. 447; Davis v. Stam-
baugh, 163 HI. 557, 45 N. E. 170; Dunn v. Zwilling, 94 Iowa, 233,
62 N. W. 746; Gregory v. Bowlsby, 115 Iowa, 327, 88 N. W. 822;
Heddleston v. Stoner, 128 Iowa, 525, 105 N. W, 56; Randall v. Con-
stans, 33 Minn. 329, 23 N. W. 530; In re Ryan's Estate, 92 Minn. 506,
100 N. W. 380; Hammond's Admx. v. Cadwallader, 29 Mo. 166;
Wheeler v. Reynolds, 66 N. Y. 227; Perkins v. Cheairs, 2 Baxt. 194;
Fairchild v. Rasdall, 9 Wis. 379. Nor does the denial by the trustee
of the existence of such trust amount to such fraud: Scott v. Harris,
113 111. 44f ; Davis v. Stambaugh, 163 111. 557, 45 N. E. 170; Gregory
V, Bowlsby, 115 Iowa, 327, 88 N. W. 822. For "when the original
transaction is free from the taint of fraud or imposition, when the
written contract expresses all the parties intended it should, when the
parol agreement which is sought to be enforced is intentionally
excluded from it, it is difBcult to conceive of any ground upon which
the imputation of fraud can rest, because of its subsequent violation
or repudiation, that would not form a basis for a similar imputation,
whenever any promise or contract is broken It is an annihila-
tion of the statute [of frauds] to withdraw a case from its operation,
because of such violation or repudiation of an agreement or trust
it declares shall not be made or proved by parol. There can be no
fraud if the trust does not exist, and proof of its existence by parol
is that which the statute forbids. In any and every case in which
the court is called to enforce a trust there must be a repudiation of it,
or an inability from accident to perform it. If the repudiation is a
fraud which justifies interference in opposition to the words and
spirit of the statute, the sphere of operation of the statute is prac-
tically limited to breaches from accident and no reason can be as-
signed for the limitation": Patton v. Beecher, 62 Ala. 579. "If the
refusal to comply with a parol agreement constitutes such fraud as
to take a case out of the statute, then no case is within it. For a
party has only to allege that a person contracting by parol fraudu-
lently refuses to comply with the terms of his parol agreement, which
he must do in every case, or there would be no necessity for resorting
to a court of equity to enforce it, and a case is made to which the
statute does not apply": Perry v. McHenry, 13 111. 227. See, also,
Brock V. Brock, 90 Ala. 86, 8 South. 11, 9 L. B. A. 287; Bohm v. Bohm,
9 Colo. 100, 10 Pac. 790; Fairchild v. Rasdall, 9 Wis. 379.
Likewise the breach of the mere oral promise of a purchaser of
land to buy the same or to hold the title therefor in trust for another,
though made at the time of or in contemplation of the transfer of
the title to him, does not constitute such fraud as to invest a court
of equity with jurisdiction to enforce the trust, where the purchaser
Dec. 1905.] Insurance Co. op Tennessee v. Waller. 789
buys in his own name and with his own means: Robbins v. Kimball,
55 Ark. 414, 29 Am. St. Rep. 45, 18 S. W. 457; Grayson v. Bowlin, 70
Ark. 145, 66 S. W. 658; Stephenson v. Thompson, 13 111. 186; Perry
V. McHenry, 13 111. 227; Wilson v. McDowell, 78 HI. 514; McDearmon
V. Burnham, 158 111. 55, 41 N. E. 1094; Fowke v. Slaughter, 3 A. K.
Marsh. 56, 13 Am. Dec. 133; Miazza v. Yerger, 53 Miss. 135; Ham-
mond's Admx. V. Cadwallader, 29 Mo. 166; Henderson v. Hudson, 1
Munf. 510. And the same rule is generally applicable where the
purchase is made at judicial sale (White v. Farley, 81 Ala. 563, 8
South. 215 (foreclosure sale); Minot v. Mitchell, 30 Ind. 228, 95
Am. Dec. 685 (sheriff's sale, where it did not appear that bidders were
deterred by the promise); Walter v. Klock, 55 111. 362 (Breese, Scott
and Sheldon, JJ., dissenting) ; Thorp v. Bradley, 75 Iowa, 50, 39 N.
W. 177 (foreclosure sale); Graves v. Dugan, 6 Dana, 331 (execution
sale, where the cestui que trust had actually paid the trustee the consid-
eration on payment of which the trust was conditioned) ; Bourke v.
Callahan, 160 Mass. 195, 35 N. E. 460 (foreclosure sale); Cobb v.
Cook, 49 Mich, 11, 12 N. W. 891 (execution sale); Walker v. Hill's
Exrs., 22 N. J. Eq. 513, affirming 21 N. J. Eq. 19 (execu-
tion sale) ; Sherrill v. Crosby, 14 Johns. 358 (execution sale) ; Bander
V. Snyder, 5 Barb. 63 (foreclosure sale) ; Lathrop v. Hoyt, 7 Barb. 59
(foreclosure sale); Wheeler v. Reynolds, 66 N. Y. 227 (foreclosure
sale); Haines v. O'Connor, 10 Watts, 313, 36 Am. Dec. 180; Fox v.
Heffner, 1 Watts & S. 372; Appeal of McCall (Pa.), 11 Atl. 206;
Salsbury v. Black, 119 Pa. 200, 4 Am. St. Rep. 631, 13 Atl.
67), or at a tax sale (Hain v. Robinson, 72 Iowa 735, 32
N. W. 417), or at a sale under a power contained in a mortgage
(Rose V. Fall River Five Cents Sav. Bank, 165 Mass. 273, 43 N. E. 93),
or in a trust deed in the nature of a mortgage (Mansur v. Willard,
57 Mo. 347), or generally at public auction (Farnham v. Clements, 51
Me. 426).
Where, however, the purchaser of land at public auction, by reason
of his oral promise to buy the same or to hold the title ther(?for for
the use of some person whose interest in the property is about to be
sold, is enabled to obtain the land at a price greatly below its
market value, it is a fraud for him to attempt to hold it in violation
of said promise, and he may be held as a trustee ex maleficio of the
land for the benefit of the cestui que trust: Woodruff v. Jabine (Ark.),
15 S. W, 830; Ryan v. Dox, 34 N. Y. 307, 90 Am. D.c. 696, Hunt, J.,
dissenting, reversing 25 Barb. 440. Contra, Luniborn v. Watson, 6
Har. & J. 252, 14 Am. Dec. 275, where the docision seemed to be
based somewhat on the form of the pleadings: Miltcnberger v. Morri-
son, 39 Mo. 71. Compare, also, Sherrill v. Crosby, 14 Johns. 358,
where a bystander at a sale bought the land on the suggestion of the
officer conducting it, who intimated that he would like some one to
790 American State Reports, Vol. 115. [Tenn.
buy it for the benefit of the execution debtor, but where the by-
stander made no promise to hold for the benfit of the judgment
debtor. Moreover, in some decisions, it is further held that the
mere repudiation of such agreement after the cestui que trust has
relied upon it and refrained from taking part in the sale and from
redeeming the land from the sale if redemption is allowable, is such
fraud as to warrant equitable relief therefrom^ Wright v. Gay, 101
HI. 233; Moorman v. Wood, 117 Ind. 144, 19 N. E. 739; Parker v.
Catron, 27 Ky. Law, Kep. 536, 85 S. W. 740; Soggins v. Heard, 31
Miss. 426; Rose v. Bates, 12 Mo. 30; Leahey v. Witte, 123 Mo. 207,
27 S. W. 402, Brace and Gantt, JJ., dissenting; Wolford v. Herrington,
74 Pa. 311, 15 Am. Rep. 548, Agnew and Williams, JJ., dissenting.
Contra, Donohoe v. Mariposa Land & Min. Co., 66 Cal. 317, 5 Pac. 495.
In Walker v. Hill 's Exrs., 22 N. J. Eq. 513, affirming 21 N. J. Eq. 191,
the court states the reason for the rule itself in the following language :
"It is the precedent contract with the defendant in execution for a
reconveyance and the fraudulent conduct of the purchaser in con-
nection with the sale which have enabled him to acquire the debtor's
property at an unconscionable advantage, that the court seizes hold
of as a ground of equitable relief." "The jurisdiction over trans-
actions of this nature rests on the ground of fraud and oppression
on the part of the purchaser, by means of which he has obtained the
property of the debtor at an inadequate price, under the assurance of
a contract to reconvey to him or to hold the same subject to future
redemption." The reason for the extension of the rule is said, in
Soggins V. Heard, 31 Miss. 426, to be that the execution debtor "on
the faith of such an agreement may have ceased his efforts to raise
the money for the purpose of paying off the execution and thus
preventing a sale of the property. It will not do to say that the
party promising was moved merely by friendly or benevolent consid-
erations, and may, therefore, at his option, decline a compliance with
his agreement. Such considerations constitute the foundation of
almost every trust, and the trustee should be held to account as nearly
as possible in the same spirit in which he originally contracted."
Again, where at the time a grantee of land took the legal title he
orally promised to hold the same on certain trusts, but then and there
had no intention of performing the trusts but made them with intent
to get and hold the legal title to his own use, a constructive trust
arises and he becomes a trustee ex maleficio: Brison v. Brison, 75 Cal.
525, 7 Am. St. Rep. 189, 17 Pac. 689; Acker v. Priest, 92 Iowa, 610,
61 N. W. 235; Gregory v. Bowlsby, 115 Iowa, 327, 88 N. W. 822. See,
also, Manning v. Pippen, 86 Ala. 357, 11 Am. St. Rep. 46, 5 South.
572. Similarly, where one actively procures a transfer of land to
himself on an oral promise to hold for another, and afterward repudi-
ates the trust, a constructive trust arises on the ground that the trans-
feree had an active fraudulent agency and by false promises diverted
Dec. 1905.] Insurance Co. of Tennessee v. Waller. 791
to himself the conveyance of the land: Lantry v. Lantry, 51 111. 451,
2 Am. Eep. 310; Davis v. Stambaugh, 163 HI. 557, 45 N. E. 170;
Godschalk v. Fulmer, 176 HI. 64, 51 N. E. 852. Contra, Walker v.
Locke, 5 Cush. 90. Likewise, a person who takes the legal title to
land in himself subject to an oral trust and to the further contem-
poraneous oral agreement that he would put the trust in writing, but
who afterward repudiated the trust and agreement, becomes a trustee
of the land ex maleficio: Hall v. Linn, 8 Colo. 264, 5 Pac. 641, where
the grantee was a creditor of the grantor, and received the grant for
the benefit of creditors; Wolford v. Herrington, 74 Pa. 311, 15 Am.
Eep. 548, Agnew and Williams, JJ., dissenting. Contra, Von Trotha v.
Bamberber, 15 Colo. 1, 24 Pac. 883, holding that the mere breach of
the promise to put the oral trust in writing did not by itself amount
to fraud, though it was of weight, in connection with other facts and
circumstances, as an element in fraud.
Furthermore, where the absolute character of a deed of land was
not known to or designated by the person paying the consideration
therefor, and another was named therein as grantee, it will be pre-
sumed that the deed was so written by fraud or mistake and without
intent to violate the statute of frauds, and oral evidence will be ad-
missible to show such facts to raise a trust in behalf of the person
paying the consideration: Siemon v. Schurck, 29 N. Y. 598, affirming
Sieman v. Austin, 33 Barb. 9. In Allen v. Arkenburgh, 2 App. Div.
452, 37 N. Y. Supp. 1032, affirmed without opinion 158 N. Y. 697,
53 N. E. 1122, the court, however, said: "It is not enough that one
person has relied upon the promise of another with rcgiird to the
purchase of a piece of property. The party seeking relief in such
case must go further, and show a change of position on his part, due
to such reliance. He must, in fact, prove the elements of an estoppel
in pais."
c. Constructive Fraud.
1. Nature and Scope in General. — Where confidential relations pre-
vail between the parties to an oral trust and the trust is violated,
the law presumes that the influence of the confidence upon the mind
of the person who confided was undue, and a case of constructive
trust arises, not, however, on the ground of actual fraud, but be-
cause of the facility for practicing it: Hayne v. Hermann, 97
Cal. 259, 32 Pac. 171; Blount v. Carroway, 67 N. C. 396. See, also,
Allen V. Jackson, 122 111. 567, 13 N. E. 840; Moore v, Horsley, 156
HI. 36, 40 N. E. 323. In Pollard v. McKenney, 69 Neb. 742, 96 N.
W. 679, 101 N. W. 9, the court says: "If a party obtains the legal
title to property by virtue of a confidential relation, under such
circumstances that he ought not, according to the rules of equity
and good conscience as administered in chancery, to hold and enjoy
the benefits, out of such circumstances or relations a court of equity
will raise a trust by construction, and fasten it upon the conscionco
792 American State Reports, Vol. 115. [Tenn.
of the offending party, and convert him into a trustee of the legal
title." So where a person occupying a fiduciary relation to the
owner of real estate takes advantage of the confidence reposed in
him by virute of such relation to acquire an absolute conveyance
thereof without consideration, through a verbal agreement which
he promises to reduce to writing, as, for example, that the land con-
veyed to him is to be held in trust for some legitimate purpose, a
refusal under such circumstances to reduce the verbal agreement to
writing, or to reconvey the land to the real owner, is such an abuse
of confidence as to vest a court of equity with jurisdiction to
inquire thoroughly into the entire transaction, and to set aside
the conveyance or administer other proper relief: Bohm v. Bohm, 9
Colo. 100, 10 Pac. 790.
Moreover, the statute of frauds "does not cover the cases where
equity has always implied a trust from the proved relations and acts
of the parties, often accompanied by their oral declarations and agree-
ments as material facts, in order to prevent frauds": McCahill v.
McCahill, 11 Misc. Eep. 258, 32 N. Y. Supp. 836. Thus the rule that
the breach of an oral agreement to hold lands in trust for another is not
of itself alone such a fraud as to take the case out of the statute of
frauds, applies in its full force only where the parties sustain no
trust or confidential relations to each other, or where they are simply
contracting parties in the ordinary sense: Allen v. Arkenburgh, 2
App. Div. 452, 37 N. Y. Supp. 1032, affirmed without opinion. 158
N. Y. 697, 53 N. E. 1122.
2. Domestic Belations.
A. Husband and Wife. — In California the relation of husband and
wife is a confidential relation, and when this confidence is violated by
the refusal of one spouse to execute an oral trust on which land was
transferred to him or her, as a trust to reconvey the land to the
other spouse on request (Brison v. Brison, 75 Cal. 525, 7 Am. St. Rep.
189, 17 Pac. 689), -or to hold the land for the joint use of the
two spouses (Barbour v. Flick, 126 Cal. 628, 59 Pac. 122), or to so hold
it during their joint lives and afterward to hold one-half thereof for
the use of their daughter (Hayne v. Hermann, 97 Cal. 259, 32 Pac.
171), a constructive trust arises which a court of equity will enforce
and to establish which parol evidence is admissible. So in Thomp-
son's Lessee v. White, 1 Dall. 424, 1 Am. Dec. 252, 1 L. ed. 206,
where a wife, desiring her husband to have the use of her separate
lands during his life, conveyed them to a third party who recon-
veyed them to herself and husband as joint tenants under a parol
promise on the part of the husband by will or other means to settle
the lands on her sisters and children, but the husband died after
the wife without having made such settlement, the court enforced
such oral trust in behalf of the beneficiaries thereof against the heirs
of the husband and a grantee of them with notice. In Brison v.
Dec. 1905.] Insurance Co. of Tennessee v. Waller. 793
Brison, 75 Cal. 525, 7 Am. St. Rep. 189, 17 Pac. 689, the court said:
"If the relief cannot be granted in this case, we do not see how it
could be granted if an attorney should, by his parol promise, induce
his client to put the property in his name for some temporary pur-
pose, and then refuse to reconvey on the ground of the absence of
a written acknowledgment; and so of principal and agent, parent
and child, trustee and cestui que trust, etc."
In other states, however, where the title to land is put in the name
of a wife on a verbal trust to hold the whole or a part thereof for
her husband, the courts have overlooked the principle on which
the foregoing cases are decided and have refused to enforce the
trust: Murray v. Murray, 153 Ind. 14, 53 N. E. 946; Andrew v.
Andrew, 114 Iowa, 524, 87 N. W. 494; Fitzgerald v. Fitzgerald, 168
Mass. 488, 47 N. E. 431; Gibson v. Foote, 40 Miss. 788. Similarly,
where a party conveyed land to his son in law on an oral trust to
hold for his wife, the grantor's daughter, the courts refused to en-
force the trust: Acker v. Priest, 92 Iowa, 610, 61 N. W. 235; Dilts v.
Stewart (Pa.), 1 Atl. 587. And where a husband conveys land to
his wife under a parol agreement that she should hold for the benefit
of their children, the trust is invalid and cannot be enforced: Moran
V. Somes, 154 Mass. 200, 28 N. E. 152.
B. Parent and Child. — In some decisions it is intimated that an
oral trust is enforceable as between parent and child on the ground
of constructive fraud: Brison v. Brison, 75 Cal. 525, 7 Am. St. Rep.
189, 17 Pac. 689; Bohm v. Bohm, 9 Colo. 100, 10 Pac. 790. This
has also been directly held. Thus where a son, to enable his mother
to act as a redemptioner of certain land of his which had been sold
on execution, permitted her to take a judgment against him by con-
fession for certain moneys which she had advanced to him, and she
thereupon redeemed the land on an oral agreement to transfer it
to her son upon payment of the amount advanced by and owing to
her, which transaction the son entered into on the advice of his
mother's attorney, his former guardian, a court will compod the
mother to fulfill the trust: Wood v. Rabc, 96 N. Y. 414, 48 Am. Rep.
640. Where a mother conveyed the family homestead to one son
without consideration on a verbal trust tiiat he would hold it for
himself and the other children of his mothor, and pay the taxes and
interest on the mortgage, receiving in return the rentals accruing on
the homestead and free board and lodging, and where all parties
acquiesced in and fulfilled the arrangenicnt until more than a year
after the death of the mother, when the grantee repudiatrd it, the
other heirs may compel a conveyance by him to them of tiirir n-spec-
tive shares: (ioMsniith v. Goldsmith, 145 N. Y. 313. 31t N. K. 1067.
In other decisions, however, tlie courts have faili-d to recognize
the existence of fonstrmtive trusts in similar casos. Ho where a
woman buys a lot and builds u risidencc thereon under an oral
794 American State Reports, Vol. 115. [Tenn.
agreement with her son that he shall enter into possession with his
family and live with her on the premises and have the title thereto
after her death, provided he would pay taxes and insurance and keep
the house in good repair and furnish her with all necessary care,
board and lodging during life, which he does, no trust arises in his
favor: Wittenbrock v. Cass, 110 Cal. 1, 42 Pac. 300. Where a person
at the time of buying land made an oral declaration that he pur-
chased it for his son, and his son was in exclusive possession during
his lifetime, and after his son's death reaffirmed the trust orally in
favor of his son's children who were not, however, in possession,
the children cannot enforce the trust as against the devisees of the
purchaser: Sherley v. Sherley, 97 Ky. 512, 31 S. W. 275. Also, Smith
V. Williams, 89 Ga. 9, 32 Am. St, Rep. 67, 15 S. E. 130. Where land
is conveyed without consideration to a man under a verbal trust to
hold for his children, in an action to enforce the trust parol evidence
thereof cannot be received to establish it: Shafter v. Huntington, 53
Mich. 310, 19 N. W. 11. Where land was conveyed to a father and
mother without consideration under an oral trust that the remainder
in one-third should be conveyed to a certain son of theirs, reserving
a life estate to themselves, but in violation of the trust the spousea
conveyed the whole land to certain other persons without considera-
tion, a court of equity will not enforce the trust: Wright v. Moody,
116 Ind. 175, 18 N. E. 608. A verbal agreement between two sisters
at the time of purchasing a homestead that they would hold it for
the use of their mother during her life, created no enforceable trust:
Wormald 's Guardian v. Heinze, 28 Ky. Law Eep. 1022, 90 S. W. 1064.
Where a son conveyed land to his father by absolute deed and imme-
diately afterward orally declared a trust therein in favor of one of
his brothers to whom he was largely indebted, no trust was created
therein which could be enforced against the grantee's heirs, nor would
the fact that the trust was declared at the instance of certain of the
heirs bind such lieirs: Bartlett v. Bartlett, 14 Gray, 277.
C. Guardian and Ward. — While it is said in some decisions that
constructive fraud is assumed in case of dealings between guardian
and ward, warranting the interposition of a court of equity (McClel-
lan v. Grant, 83 App. Div. 599, 82 N. Y. Supp. 208, affirmed without
opinion 181 N. Y. 581, 74 N. E. 1119; Blount v. Carroway, 67 N. C.
396. Compare, also, Kisler v. Kisler, 2 Watts, 323, 27 Am. Dec. 308),
yet in Eogers v. Simmons, 55 111. 76, where a person represented to
the owner of certain lands that he desired to purchase them as guard-
ian for certain minors, and the owner accordingly sold them to him
at a reduced price, the court held that a trust could not be en-
forced in the minor's favor.
D. Brothers or Sisters. — "The relationship existing between
brothers is not in itself a confidential relation to which the equitable
doctrine of constructive trusts is applicable": Hamilton t. Buchanan,
Dec. 1905.] Insurance Co. of Tennessee v. Waller. 795
112 N. C. 463, 17 S. E. 159. Thus oral trusts existing between broth-
ers or sisters are held not to be enforceable: Hasshagen v. Hasshagen,
80 Cal. 514, 22 Pac. 294; Doran v. Doran, 99 Cal. 311, 33 Pac. 929;
Stevenson v. Crapnell, 114 111. 19, 28 N. E. 379; Peterson v. Boswell,
137 Ind. 211, 36 N. E. 845; McQain v. McClain, 57 Iowa, 167, 10 N.
W. 333; Loomis v. Loomis, 60 Barb. 22.
3. Between Priest and Parishioner. — Where a woman conveyed land
to her spiritual adviser subject to the verbal trust that if her absent
son should turn up he would convey the land to the son, the son may
compel the execution of the trust: McClellan v. Grant, 83 App. Dlv.
599, 82 N. Y. Supp. 208, affirmed without opinion 181 N. Y. 581, 74
N. E. 1119.
4. Between Attorney and Client. — It seems that there is such con-
fidence existing between an attorney and his client, that the refusal
of an attorney to execute an oral trust in lands affords ground for
relief against him as a trustee ex maleficio on the ground of con-
structive fraud: McClellan v. Grant, 83 App. Div. 599, 82 N. Y. 208,
affirmed without opinion 181 N. Y. 581, 74 N. E. 1119; Blount v. Car-
roway, 67 N. C. 396. So where an attorney bought in land at an
insolvent sale under a verbal agreement with his clients to buy for
their use and with money furnished by them, the cestui que trust may
enforce the trust as against the attorney: Broder v. Conklin, 77 Cal.
330, 19 Pac. 513. Where a grantor gave orders to his attorneys to
make a deed of certain land to his wife, and after he left their
office they made the deed to a certain third person instead, adding in
explanation that they did so to avoid any suspicion of the deed's
being made to defraud creditors, oral evidence is admissible to show
that the grantee held the land in trust for the grantor's wife to whom
he had intended to grant it: Fischbeck v. Gross, 112 111. 208.
5. Between Principal and Agent. — Where a man employs an agent
by parol to buy land, who buys it accordingly, and no part of the
consideration is paid by the principal and title is taken in the agent,
and there is no written agreement between the parties, the principal
cannot compel the agent to convey the estate to him: Dorsey v. Clarke,
4 Har. & J. 551. A contrary intimation, however, is found in Briaon
V. Brison, 75 Cal. 525, 7 Am. St. Rep. 189, 17 Pac. 689.
6. Between Partners. — A parol agreement for a partnership in
real estate as such cannot be shown to create a trust in land held by
one of the partners under an absolute deed for the benefit of the
other partners; and the fact that the parties making the agreement
were at the time engaged in a mercantile partnership, does not take
it out of the statute of frauds: Bird v. Morrison, 12 Wis. 138. So
where one partner conveys land to his copartner with a covenant of
warranty, parol evidence is not admissible to rebut the prexumption
that the estate is held by the grantee for bis own use: Boger« ▼.
Barney, 137 Mo. 598, 39 8. W. 68.
796 American State Reports, Vol, 115. [Tenn.
7. Between Cotenants or Joint Tenants. — Where tenants in com-
mon convey to each other certain portions of the common lands, and
to one of them was conveyed a larger portion than to the other under
a parol trust that the former would hold the excess of the part
transferred to him over his proper share in trust for the other, such
trust is unenforceable: Barr v. O'Donnell, 76 Cal. 469, 9 Am. St. Rep.
242, 18 Pac. 429. Similarly where one joint tenant conveys land to
his joint tenant with a covenant of warranty, parol evidence is not
admissible to rebut the presumption that the estate is held by the
grantee for his own use: Rogers v. Ramey, 137 Mo. 598, 39 S. W. 66.
Furthermore, where one who has been a cotenant of lands which had
been sold on foreclosure purchased them from the purchaser at fore-
closure under a verbal trust to hold them in trust for his former
cotenants as well as for himself, the trust is unenforceable: Watson
V. Watson, 198 Pa. 234, 47 Atl. 1096,
In New York, however, in Allen v. Arkenburgh, 2 App. Div. 452,
37 N. Y. Supp. 1032, affirmed without opinion 158 N. Y. 697, 53 N. E.
1122, the court holds that the statute of frauds "does not apply
where there is a trust or confidential relation with regard to the
property itself, where there is a community of interest between the
owners, and where the promise of one relates to the vested interests
of all," and that therefore where in a suit in partition the land
involved was ordered sold and it appeared to the cotenants that their
interests would be prejudiced by a sale at the time ordered, and one of
them offered to and did bid in the property for the benefit of the
whole and coupled this offer with the suggestion that the remainder
do not bid against him, which suggestion was heeded at the sale, he
holds the title in trust for the other cotenants and they may enforce
the trust against him.
' 8, Between Debtors and Creditors. — In most states parol evidence
is always admissible to show that an absolute deed of land was
taken merely as security for the performance of an obligation, and
is in fact a mortgage: Patton v. Beecher, 62 Ala. 579; Spies v. Price,
91 Ala. 166, 8 South. 405; Ruckman v. Alwood, 71 111. 155; Wright
V. Gay, 101 111. 233; Campbell v. Dearborn, 109 Mass. 130, 12 Am. Rep.
671; Barber v. Milner, 43 Mich. 248, 5 N. W. 92; Morrow v. Jones,
41 Neb. 867, 60 N. W. 369; Hodges v. Tennessee Marine & F, Ins. Co.,
8 N. Y. 416; Sturtevant v. Sturtevant, 20 N. Y. 39, 75 Am. Dec. 371;
Bork V. Martin, 132 N. Y. 280, 28 Am. St. Rep. 570, 39 N. E. 584;
Appeal of Sweetzer, 71 Pa. 264. So where an absolute deed of lands
is made to grantees to indemnify them against any loss by reason
of a contract of suretyship on which they were sureties, it is a
mortgage, and parol evidence is admissible to show that fact and that
the liability to indemnify against which the mortgage was given has
been discharged without damage to the mortgagees: Moore v. Wade,
8 Kan. 380. Where a person acquires the legal title to the land of
another through legal proceedings — first by writ of summons and
Dec. 1905.] Insurance Co. op Tennessee v. Waller. 797
attachment, and then by writ of entry — pursuant to an understand-
ing that he would hold the property as security for what should upon
final settlement appear to be due him, parol evidence is admissible
to show such understanding and that he therefore held as mort-
gagee: Potter V. Kimball, 186 Mass. 120, 71 N. E. 308.
Parol evidence is also admissible to show that an absolute transfer
of land from one person was in fact intended as a mortgage of land
by and in behalf of another person. Thus a sheriff's deed to a pur-
chaser at a sheriff's sale of lands may be shown to be a mortgage
by parol: Eeigard v. McNeill, 38 111. 400. And where a person, pur-
•uant to an oral agreement in that behalf, advanced the money requi-
site to make the first payment for land and took the title in his own
name, but made such payment jointly for himself and another and
took the title as security, thus in effect loaning one-half of the
money paid to such other person and paying it to the vendor as the
other's money, a trust in the land arose in favor of the other
person: Towle v. Wadsworth, 147 111. 80, 30 N. E. 602, 35 N. E. 73.
And where the purchaser of land on credit, being afraid that he
would be unable to pay his notes given when due, procured another
person to pay the residue of the price and take the title to the
land in trust, to reconvey upon payment of the moneys advanced
with interest, the latter may be compelled to reconvey as agreed:
Jones V. McDougal, 32 Miss. 179. But where a person promises
another to purchase certain land for him at foreclosure sale and to
hold the title in trust for him and actually does so, but afterward
refuses to reconvey, the mere fact that the purchaser agreed to buy
for the other person will not convert the advances he made of his
own money into a loan, and thereby indirectly create a trust: Bourke
V. Callanan, 160 Mass. 195, 35 N. E. 460, Allen and Knowlton, JJ,, dis-
senting.
The courts have on many occasions discussed the rationale of the
rule admitting parol evidence to show that an absolute deed is a
mortgage. While it has sometimes been declared that this rule is a
mere arbitrary exception to the statutes of frauds founded on long
established usage, yet by the better opinion it is founded on the
idea that the violation by the mortgagee of the oral agreement pur-
suant to which he holds the property is a constructive fraud, giving
rise to a constructive trust. Thus in Patton v. Beechcr, 62 Ala. 579,
the court says: "The relation of debtor and creditor affords th«
latter so many opportunities of taking advantage of the necessities
of the former, that transactions between them are narrowly watched.
.... Once a mortgage, always a mortgage, is the maxim, and how-
ever broad is the power of contracting or of disposing, restraints
upon the equity of redemption, though deliberately imposed, are not
tolerated. The principle cannot be violated by i)utting the convey-
ance in the form of an absolute deed. If thi- criditor accepts the
deed on no other consideration and for no other purpose than as a
798 American State Reports, Vol. 115. [Tenn.
necurity for a debt, a case of fraud and trust is made out, which re-
quires the interference of a court to give effect to the equity of
redemption if it is denied." And in Campbell v. Dearborn, 109 Mass.
130, 12 Am, Rep. 671, the court, although with less clearness, follows
the same line of reasoning.
In a few states parol evidence is not admissible to show that an
absolute deed was given for security only and is in fact a mortgage
(Thomas v. McCormack, 9 Dana, 108; McElderry v. Shipley, 2 Md. 25,
56 Am. Dec. 703), whether the deed was given directly from the
alleged mortgagors to the alleged mortgagee (Wolf v. Corby, 30 Md.
S56), or was given by some third person to the alleged mortgagee
pursuant to an oral agreement between the alleged mortgagee and
the alleged mortgagor (Benge v. Benge (Ky.), 23 S. W. 668). This
rule is based on the ground that neither public interest nor the
established principles of equity jurisprudence will allow a court of
justice to admit parol evidence to show that an absolute deed was
intended as a mortgage: Thomas v. McCormack, 9 Dana, 108.
9. In Miscellaneous Belations. — In conclusion a few instances may
be mentioned where a constructive fraud has been declared, and one
where it has been denied, which do not come within any of the par-
ticular classes of confidential relations before discussed, but where
the relation of confidence seems to have been a matter of fact
rather than an assumption of law.
Where a woman conveyed land to another by absolute deed with-
out consideration, on the parol promise of the latter to reconvey after
her impending marriage was accomplished, and this conveyance was
urged by her betrothed husband and the person to whom she conveyed
it in order to avoid the operation of the law protecting a woman's
separate property owned by her at the time of her marriage, and
where she resided with and was on terms of intimate confidence with
such grantee, upon refusal to perform the trust, the marriage having
been solemnized a court of equity will enforce the trust: Catalani v.
Catalani, 124 Ind. 54, 19 Am. St. Eep. 73, 24 N. E. 375. So where a
creditor of married people voluntarily assumed a confidential relation
toward them and represented that to protect their homestead against
their other creditors they should mortgage it to him and he would
cause it to be sold and bought in for their benefit, and they, relying
upon his representations, allowed it to be so mortgaged and sold and
bought by the creditor, whereupon he repudiated his promise to hold
it for their benefit, a trust by construction arises in the grantors'
favor: Gruhn v. Richardson, 128 111. 178, 21 N. E. 18.
But where an administrator bought at execution sale land belonging
to the decedent under a verbal promise to hold for the heirs and
apply the rent and profits to the liquidation of the amount advanced
by him, the heirs are not entitled to any relief by virtue of the
promise: Maroney v. Maroney, 97 Iowa, 711, 66 N. W. 911.
April, 190G.] Rutherfobd v. Rutherford. 799
RUTHERFORD v. RUTHERFORD.
[116 Tenn. 383, 92 S. W. 1112.]
PARTITION. — Eemaindermen cannot Compel Partition or a
Sale for Partition where their rights are purely contingent and it
is not possible to say who are the ultimate owners of the remainder,
(p. 801.)
DEVISE to Two and Their Heirs, Construction of. — If prop-
erty is devised to two nieces of the testator, to have the use and
benefit of property, half to each for and during their natural lives,
and then to their respective heirs, to have their own half, and if
either of the heirs dies without children, her share to go to the
survivor or the surviving children, the children of neither has any
vested interest in the property. If one should die without children,
her share will go to the surviving niece. If the other should die leaving
children, her interest will go to her children. If one should die
without children after the death of the other who had died leaving
children, the share of the one dying without children would go to the
•urviving children of the other, (p. 801.)
PARTITION. — Life Tenants may Have a Partition or a Sale
for Partition, though it is not possible at the time to know in whom
the estate in remainder will ultimately vest. (pp. 801, 802.)
PARTITION BY SALE Will not be Decreed where there are
contingent remainders, unless it is made to appear that it will be
for the benefit not only of the life tenant but of the whole estate.
(p. 803.)
PARTITION by Sale may be Decreed not only where partition
in kind cannot be made, but also where the land is so situated that
partition by sale is manifestly for the advantage of the parties,
(p, 803.)
PARTITION BY SALE May be Decreed where the land is
so situated with respect to two lines of railway that it is to the
advantage of the parties to sell it in small parcels for factory pur-
poses, and this though there are contingent estates, (p. 803.)
PARTITION Between Life Tenants and Contingent Remainder-
men.— Where there are life tenants and contingent remaindermen, parti-
tion by sale may be made by having the value of the estates for life
ascertained by appraisement and paid over to the life tenants, and the
balance of the proceeds paid into court and invested in ptrinanent
securities for the benefit of such persons as ultimately become entitled
to the estate in possession when the contingency on which it turns
shall be ascertained by the happening of the event, (p. 804.)
PARTITION — Reimbursement of Moneys Paid for Lessee's In-
terest.— If it becomes proper to partition property by sale, and such
sale cannot be effected without first inducing persons having lease-
hold interests to surrender their leases, moneys paid to secure such
surrender may be directed to be reimbursed out of the aggregate fund,
(pp. 804, 80.").)
PARTITION — Expenses of Real Estate Agents in Negotiating
Bales. — If real property is directed to be partitioned by sale, and real
estate agents are employed to procure purchasers, the commissions of
■uch agents should not be directed to be paid out of the aggregate
fund, but must be taken care of by those employing them, (p. 805.)
800 American State Reports, Vol. 115. [Tenn.
Edginton & Edginton, for the complainants.
George H. Gillham, for the defendants.
*®' NEIL, J. In the year 1897 one Frederick Volmer
made and published his last will and testament, which con-
tained the following provisions :
"I give, devise, and bequeath all the residue of my prop-
erty, real and personal and mixed, to my nieces, Lula D.
Rutherford, wife of J. R. Rutherford, and Josephine Hampe,
to their sole and separate use free from the debts, contracts,
control, or marital rights of the said J. R. Rutherford, or of
any of said husband either of said nieces shall have hereafter;
said nieces to have the use and benefit of said property, half
to each, for and during their natural lives and then to their
respective heirs to have their own half.
"What I mean to say is that if either of these nieces shall
die without children, the share of the one so dying shall go
to the survivor or the surviving children."
The two nieces mentioned in the will are the complainants
in the present bill. Mrs. Rutherford has several children,
all minors. Josephine Hampe, after date of the will, inter-
married with Frank 0 'Conner. She has no children.
i\Ir. Volmer left several tracts and lots of land which
passed under the will; none of these, however, need be
specially referred to herein except the tract of sixty-three
acres lying near the city of Memphis.
Prior to the present proceeding a bill was filed by J.
W. Winkler, as guardian of the children of Mrs. Ruther-
ford, ^^^ against the said children and Mrs. Rutherford and
Mrs. O 'Conner, for certain purposes which need not be
specially mentioned here. The result of that litigation, so far
as concerns the present controversy, was that the children
or the estate represented by them acquired free of the life
estate five acres undivided, or as it is otherwise expressed in
the decree of that case, five sixty-thirds of the sixty-three acres.
That proceeding is not before us; we have only its results.
The original bill in the present case was filed by the
two life tenants against the children of Mrs. Rutherford
and their guardian, G. W. Winkler, to have the sixty-three
acres sold for partition or division of proceeds.
The chancellor, after hearing evidence, accepted and con-
firmed an offer of twelve hundred dollars per acre for seven
and one-half acres of the sixty-three acres, but in his decree
April, 1906.] Kutherford v. Rutherford. 801
of confirmation reserved the question as to whether the sale
should be treated as one under the law of partition or as a
sale purely for reinvestment.
Subsequently an amended bill was filed by complainants
in a double aspect treating the proceeding both as one insti-
tuted to effect a partition by means of sale and as seeking
to make a sale for reinvestment. Under this bill the chancellor
confirmed the sale to A. B. Nickey & Sons, the persons w^ho
had made the offer above mentioned, as a sale made for re-
investment. He held that the estate was such that the statutes
concerning partition and sale for partition did not apply.
*'*'' Complainants made application to have their life
estate valued and paid out to them. This was declined by
the chancellor. From this decree the first special appeal was
prayed by complainants; subsequently another special appeal
was prayed, and is now before us, but at present we shall
consider only the one which we have specifically mentioned.
The question suggested turns on the point as to whether
the interests were such that they could be made the subject
of a sale for partition.
Of course there could be no partition or sale for parti-
tion among the remaindermen, because their rights are purely
contingent. The children of Mrs. Rutherford have no vested
interest in the property. It is impossible to say at this date
who will be the ultimate owners of the remainder. Tliis
cannot be determined until the death of both Mrs. Rutherford
and Mrs. O 'Conner. If Mrs. O 'Conner should die without
children, leaving her sister ^Mrs. Rutherford sur\'iving her,
we think, under a true construction of the will, Mrs. O 'Con-
ner's half interest would go to ^Nfrs. Rutherford. If Mrs.
Rutherford should die without children her interest would
go to Mrs. O'Connor. If either should die leaving children,
the interest of that one would go to her children. If one
should die without children after the death of the other, who
had died leaving children, the share of the one so dying
without children would go to the surviving children of tlie
other. Of course it would be impo.s.sible to "'*** partition or
make sale for partition among interests so uncertain as to the
person who shall ultimately take: Land Co. v. Hill, 87 Tcnn.
589, 11 S. W. 797.
But this does not prevent the life tenants from having a
partition or a sale for partition. Our statutes ui)()n the sub-
ject contemplate the existence of contingent estates which
Am. St. Rep., Vol. 115—31
802 American State Reports, Vol. 115. [Tenn.
cannot be made the subject of partition or of sale for division,
and provide for the enforcement of the rights of others, not-
withstanding the existence of such contingent estates. The
sections of the code upon the subject of partition in kind
and of sale for partition are in pari materia, and must be
construed together.
In section 5042 of Shannon's Code, it is provided that
any person entitled to a partition of premises under the
preceding sections shall be equally entitled to have the
premises sold for division, if they are so situated that parti-
tion cannot be made, or if they are of such a description
that it would be manifestly for the advantage of the parties
that they should be sold instead of partitioned.
In section 5010 the right of partition is given, along with
other persons, to the holders of life estates.
In section 5020, it is provided in respect of the petition as
follows: "In case any one or more of such parties or the
share or quantity of interest of any of the parties be un-
known to the petitioner, or be uncertain or contingent, or
the ownership of the inheritance shall depend upon an execu-
tory **® devise, or the remainder shall be a contingent re-
mainder, so that such parties cannot be named, the facts
shall be set forth in such petition. ' '
In section 5040 it is enacted that the partition is con-
clusive "on all parties named in the proceedings who have
at the time any interest in the premises divided, as owners
in fee or as tenants for years or as entitled to the reversion,
remainder or inheritance of such premises after the termina-
tion of any particular estate therein; or who, by any con-
tingency in any will, conveyance or otherwise, may be or may
become entitled to any beneficial interest in the premises;
or who shall have any interest in any individual share of the
premises, as tenants for years, for life, by the curtesy, or in
dower. ' '
In section 5070, referring to the subject mentioned in sec-
tion 5020, it is said under the article headed: "Disposition of
proceeds of sale, ' ' that : * ' Where any of the persons are absent
from the state, are without legal representatives in this state,
or are not known or named in the proceedings, the court will
direct the shares of such parties to be invested in permanent
securities at interest, for the benefit of such parties, until
claimed by them or their legal representatives.'*
April, 1906.] Rutherford v. Rutherford. 803
It is held in Freeman v. Freeman, 9 Heisk. 301, that the
existence of such contingent interests will not prevent a sale
for division of proceeds. It was held in that case that the
persons in being in whom the contingent remainder would
become a vested estate, if the life estate should fall in during
the pendency of the proceedings, ^®* would represent the
ultimate contingent remaindermen under the theory of
virtual representation: See, also, Parker v. Peters, 2 Tenn.
Ch. 636 ; Ridley v. Halliday, 106 Tenn. 607, 82 Am. St. Rep.
902, 61 S. W. 1025, 53 L. R. A. 477.
No injury could be sustained by the contingent remainder-
men, by a sale for division, because there could be no sale
unless it should be made to appear that it would be for the
benefit not only of the life tenants, but of the whole estate:
Reeves v. Reeves, 11 Heisk. 669 ; Wilson v. Bogle, 95 Tenn.
290, 49 Am. St. Rep. 929, 32 S. W. 386.
It is also to be observed that a sale for partition may be
made not only where the land is of such a description that
it cannot be partitioned in kind, but also where the land is
80 situated that it would be manifestly for the advantage of
the parties that it should be sold instead of partitioned. In
view of this principle it was held in Wilson v. Bogle, 95
Tenn. 290, 49 Am. St. Rep. 929, 32 S. W. 386, that a tract of
one thousand acres should be sold for division of proceeds
rather than partitioned among four persons, because it was
suitable only for mining, and the water and the timber were
so located upon the land with respect to each other that it
would be best that one person should own the whole tract.
So in the present case, it was shown in the court below that
the land was so situated in respect of its location, near two
lines of railway as that it would be most advantageous to the
parties that it should be sold in small parcels for factory pur-
poses. It ^®* was shown, in substance, that if it should be
partitioned it could not be used to advantage. It was also
shown that there was, when the proceedings were instituted,
an active demand for this cla.ss of property for factory pur-
poses, and that this demand will probably continue for a time,
and should be taken advantage of.
From what has been said it is apparent that a sale for
partition can be very properly made under such a state of
facts as shown in this record, notwithstanding the existence
of a contingent estate. The sale under such circumstances
804 American State Reports, Vol, 115. [Tenn.
would be really for the purpose of enabling the life tenants
to obtain partition and enjoyment of their estate and for the
reinvestment of such portion of the proceeds as should be-
long to the contingent estate.
It is provided in section 5056 of Shannon's Code that the
life estate may be valued and paid over to the life tenant.
We are of opinion, therefore, that the sale for division of pro-
ceeds was proper in the present case, and that the cause
should be remanded to the chancery court of Shelby county
to the end that the share of the two life tenants may be
valued and paid out of them, and that the residue of the
fund, that belonging to the contingent estate, should be
kept in court and invested in permanent securities for the
benefit of such person or persons as may ultimately become
entitled to that estate in possession when the contingency
on which it turns shall be ascertained by the happening of
the event. We are of opinion that future sales in this case
should be treated in the same way,
^^^ The other special appeal referred to is based upon the
following facts : The seven and one-half acres was rented as
a part of thirty-three and one-half acres. In order to induce
the three persons who had the land rented, John Robilio,
Casone Francisco, and Brusi Guiseppa, to surrender their
lease on the land, the life tenants were compelled to make
an allowance of one hundred and eighty dollars on the total
rents and to pay five hundred dollars in cash. They ask re-
imbursement for this sum out of the aggregate fund. The
sale of the seven and one-half acres at twelve hun-
dred dollars per atre was worked up by two real estate agents
in Memphis, I. F, Peters and 11, C. Williamson Land Invest-
ment Company, Each of these persons claim two hundred
and twenty-five dollars, or an aggregate of four hundred and
fifty dollars, being five per cent on the purchase price, as
compensation for their services, as such real estate agents.
The complainants and the guardian ad litem consent that
these two amounts should be allowed. The chancellor, how-
ever, disallowed them.
The sale was a very advantageous one. It could not have
been made if the tenants had refused to surrender their lease.
An effort was made to procure a surrender of the lease from
them for a less sum, but this could not be effected. The
alternative was then presented of paying the sum demanded
April, 1906.] Samuelson v. State. 805
or of allowing the sale to fall through. "We think there could
be no doubt of the wisdom of the parties in consenting to
make the payment. We think it equally clear that this
should be allowed out of the aggregate fund.
"We are of opinion, however, that the claim of the two
^^^ real estate agents should not be allowed out of the fund.
That expense must be taken care of by those who employed
the agents referred to.
The result is that the chancellor's decree will be modified
and reversed so as to conform to the above opinion, and the
cause will be remanded for further proceedings.
The cost of the appeal will be paid out of the aggregate
fund.
Partition may he by Sale and a division of the proceeds in a proper
case: Oilman v. Boden, 136 Mich. 125, 112 Am. St. Rep. 356; Croston
V. Male, 56 W. Va. 205, 107 Am. St. Rep. 918, and cases cited in the
cross-reference note thereto. Indeed, partition by sale is a matter
of right when the conditions prescribed by statute to authorize a
sale are found to exist: Wilson v. Bogle, 95 Tenn. 290, 49 Am. St.
Rep. 929.
Partition may be Had at the Instance of a Life Tenant of common
property, and the court in decreeing it may make such orders as are
necessary to preserve to the remaindermen their share of the estate
at the termination of the particular estate: Fitts v. Craddock, 144 Ala.
437, 113 Am. St. Rep. 53, and note on the partition of estates held in
reversion or remainder.
The Effect of the Judgment in Partition, including its effect on the
holders of contingent interests, is discussed in the note to Carter v.
White, 101 Am. St. Rep. 864.
SAMUELSON v. STATE.
[116 Tenn. 470, 95 S. W. 1012.]
CO"N^STITUTIONAL LAW — Statutes, Title of, When Embraces
but One Subject. — The title, "An act to prohibit traflic in nontrans-
ferable signature tickets issued by common carriers, and to require
common carriers to redeem unused or partly used tickets, and to pro-
vide punishment for the violation of this act," does not embrace
more than one subject, nor cover incongruous legislation, (pp. 810,
811.)
CONSTITUTIONAL LAW — Statutes, Title of. When Embraces
but One Subject. — In the title, "An act to prohibit the sale of tickets
806 American State Reports, Vol. 115. [Tenn.
issued bj common carriers save through their authorized agents, and
require common carriers to redeem tickets issued by them when
wholly, or partly used," two subjects are not expressed, but rather
two branches, naturally and intimately allied, of the same subject,
(pp. 810, 811.)
CONSTITUTIONAIi LAW — Statute, Construction of.— If, ia
an act to prohibit the sale of tickets of common carriers except by
their authorized agents, one of the sections speaks of a ticket or
other evidence of the passenger's right to travel, it is evident that
this latter phrase is used simply as the equivalent of ticket, (p. 811.)
CONSTITUTIONAL LAW — Carriers, Statutes Relating to Non-
transferable Tickets Only. — A statute prohibiting traffic on nontrans-
ferable signature tickets issued by common carriers and sold below
the standard rates, and making such traffic a misdemeanor, is not
unconstitutional on the ground that it delegates to carriers authority
to create a penal offense or not, as they may choose to issue or not to
issue tickets of that class, (p. 814.)
CONSTITUTIONAL LAW — Carriers, Eestricting Sale of Tick-
ets to Agents of. — A state, in the exercise of its police power, may,
by regulations, require carriers to sell their own tickets, either
directly or through their agents, and may prohibit all other persons
from making such sales, (p. 816.)
CONSTITUTIONAL LAW— Carriers— Property Eights of Orig-
inal Purchasers of Tickets. — A statute prohibiting traffic in nontrans-
ferable signature passenger tickets issued and sold below a standard
schedule rate is not invalid for depriving persons of property rights
without due process of law. (p. 817.)
INTERSTATE COMMERCE— Statute Prohibiting Traffic in
Passenger Tickets. — A statute prohibiting traffic in nontransferable
passenger tickets issued for less than the standard price, though ap-
plicable to tickets for transfer from one state to another, is not in-
valid as interfering with interstate commerce. It does not regulate
nor cast any burden on commerce, but is merely a police regulation,
(p. 818.)
CARRIERS, Regulation of. When not Invalid for Vagueness.—
A statute prohibiting traffic in passenger tickets sold and issued for
less than standard schedule rates is not void for vagueness, (p. 819.)
STATUTE, Construction of. — The grammatical sense of the
■words employed in a statute is usually to be adopted, but if theK
is ambiguity, or room for more than one interpretation, the rules of
grammar may be disregarded, if strict adherence to them will give
rise to a repugnance or absurdity or defeat the purpose of the legis-
lature, (p. 821.)
STATUTES, Construction in Favor of Constitutionality of.—
If a statute admits of two constructions under one of which it must
be pronounced unconstitutional and void, and the other constitutional
and valid, the latter will be adopted, (p. 822.)
CARRIERS, Statutes Restricting Right to Sell Tickets of.— A
statute making it unlawful for any person other than an authorized
agent of a common carrier to sell or otherwise deal in nontransfer-
able signature passenger tickets issued below the standard schedule
rate is not invalid as prohibiting such sales by everyone except
such agents, while permitting them to sell. The statute is not sus-
ceptible of a construction permitting sales by such agents other than
the original sale by them in behalf of their employers, (p. 822.)
April, 1906.] Samuelson v. State. 807
Lehman, Gates & Lehman and Moritz Rosenthal, for
Samuelson.
Attorney General Gates, Charles N. Burch, A. W. Biggs,
F. T. Edmondson and M. R. Paterson, for the state.
"*'* BEARD, C. J. The plaintiff in error was convicted
in the criminal court of Shelby county, of a violation of
chapter 410, page 873, of. the Session Acts of 1905. It is
agreed that the facts proven brought the offense charged
within the provisions of the act, and the only question made
on the record is as to its constitutionality. It is in these
words :
"Chapter 410. Senate Bill No. 492.
"An act to prohibit traffic in nontransferable signature
tickets issued by common carriers, and to require com-
mon carriers to redeem unused or partly used tickets,
and to provide punishment for the violation of this act.
"Section 1. Be it enacted by the general assembly of the
State of Tennessee, that it shall be unlawful for any person,
other than the authorized agent of the common carrier issuing
the same, to sell, or otherwise deal in or offer to sell, any
railroad, railway, steamship, or steamboat passenger ticket
which shows that it was issued and sold below the standard
schedule rate under contract ^'^^ with the original purchaser
entered upon such ticket and signed by the original purchaser,
to the effect that such ticket is nontransferable and void in
the hands of any person other than the original purchaser
thereof: Provided, however, that nothing in this act shall be
construed as depriving the original purchaser of a transfer-
able ticket of a right to sell same to a person who will in good
faith personally use it in the prosecution of a journey.
"Sec. 2. Be it further enacted, that it shall be the duty of
every common carrier that shall have sold any ticket or
other evidence of the purchaser's right to travel on its line
(or any line of which it form a part), to, if the whole of such
ticket be unased, redeem the same, paying the original pur-
chaser thereof the actual amount for which said ticket was
sold; or, if any part of such ticket be unused, to redeem such
unused part, paying the original purchaser thereof at a rate
which shall be equal to the difference between the price paid
for the whole ticket and the price of a ticket between the
808 American State Reports, Vol. 115, [Tenn.
points for which said ticket was actually used; provided,
such purchaser shall present such unused or partly used
ticket for redemption within six (6) months after the date
of its issuance, to the officer or agent who shall be authorized
or designated by such common carrier to redeem unused or
partly used tickets, and the said officer shall, within fifteen
(15) days after the receipt of said ticket, redeem the same
as hereinbefore provided for. Such redemption ^'"'^ shall
be made without cost of exchange or other expense to the
purchaser of the ticket.
"Sec. 3. Be it further enacted, that any person or cor-
poration violating any of the provisions of this act shall be
guilty of a misdemeanor, and shall, upon conviction thereof,
be punished by fine in the sum of not less than fifty ($50)
dollars, nor more than one hundred ($100) dollars.
"Sec. 4. Be it further enacted, that this act take effect
from and after its passage, the public welfare requiring it.
"Passed April 13, 1905.
"E. RICE,
"Speaker of the Senate.
"W. K. ABERNATHY,
** Speaker of the House of Representatives.
''Approved April 14, 1905: "JOHN I. COX,
"JOHN I. COX,
"Governor."
The first objection made by the plaintiff in error is that
this statute violates so much of section 17 of article 2 of our
state constitution as provides: "No bill shall become a law
which embraces more than one subject, that subject to be ex-
pressed in the title."
The purpose of this provision is well understood by the
profession. Log-rolling among legislators, followed often
by incongruous statutes, grew to be a flagrant evil. Under
that system it was altogether possible, by adroit manage-
ment, for a vicious section to be concealed in a multitude of
sound provisions, under an innocent, meaningless ■*'^** cap-
tion, and thus become enacted into law without attracting the
attention of a large part of the members of the legislature,
or of the public. It was to root out this evil practice, through
which such baneful results might be accomplished, that this
constitutional provision was adopted.
April, 190G.] Samuelson v. State. 809
The leading case in this state, and the one in which the
clause was examined and proper limitations imposed upon
it, is that of Cannon v. Mathes, 8 Ileisk. 504. Later cases
have been but an application of the principle therein an-
nounced. The statute in question in that case was entitled
"An act to fix the state tax on property," and it contained a
section providing for a tax on "privileges." The insistence
was that, inasmuch as "privileges" were not "property,"
there was such incongruity in the act as made it obnoxious
to this constitutional requirement.
In meeting the argument on which this insistence rested,
after quoting with approval from the text of Judge Cooley,
in his work on Constitutional Limitations, that "the gen-
erality of a title is no objection to it so long as it is not made
a cover to legislation incongruous in itself, and which by no
fair intendment can be considered as having a necessary or
proper connection," the opinion proceeded to make clear
that the act embraced but one subject, that of raising of
state revenue by taxation on property and privileges, and this
subject was expressed in the title. In concluding, the court,
rejecting the narrowness of interpretation, which would
*''^ seriously hamper legislation, deduced from the authorities
this general rule: "Any provision of the act directly or in-
directly relating to the subject expressed in the title, and hav-
ing a natural connection therewith and not foreign thereto,
should be held embraced in it."
The rule announced by Chief Justice Nicholson in that
case has been later applied by this court on many occasions.
In Frazier v. East Tennessee etc. Ry. Co., 88 Tenn. 138, 12
S. W. 537, it was held that the title, "An act to amend the
law in relation to the consolidation of railways," naturally
embraced a provision that "no railroad company shall have
power under this act or any of the laws of this state to
give or create any mortgage .... which shall be valid and
binding against judgments and decrees and executions there-
from, for timuers furnished and work and labor done on, or
for damages done to persons and property in the operation
of its railroad in this state."
In Ryan v. Louisville etc. Terminal Co., 102 Tenn. Ill,
50 S. W. 774, 45 L. R. A. 303, a statute which, under the
title of "An act to amend an act entitled 'An act to pro-
810 American State Reports, Yol. 115. [Tenn.
vide for an organization of railroad terminal corporations,
and to define the powers, duties and liabilities thereof," *
enacted, inter alia, that a railroad company contracting for
use of the facilities of a terminal company shall have power
to own stock and bonds of such terminal company and to
guarantee its bonds and other contracts, was held not to be
violative of the constitution as grouping foreign or incon-
gruous matter under the title.
■**<* Among the many cases which have recognized the es-
sential wisdom of the liberal rule of construction, as an-
nounced in Cannon v. Mathes, 8 Heisk. 504, and have ap-
plied it to the saving of different statutes, attacked on like
ground with the present, are Luehrman v. Taxing Dist., 2
Lea, 425; State v. Fickle, 3 Lea, 79; Ex parte Griffin, 88
Tenn. 547, 13 S. W. 75; Cole Mfg. Co. v. Falls, 90 Tenn. 469,
16 S. W. 1045 ; State v. Yardley, 95 Tenn. 546, 32 S. W. 481,
34 L. R. A. 656.
Coming now, in the light of these cases, to the act in ques-
tion, does it, either in title or body, cover incongruous legis-
lation? Its evident purpose is to regulate the issuance, sale
and redemption of tickets sold by common carriers as evi-
dences of the rights of purchasers to pass over the routes of
travel covered by the tickets. For reasons satisfactory to
itself, the legislature, in the matter of regulation, saw proper
to prohibit the dealing in nontransferable signature tickets,
issued and sold by the common carrier to original purchasers
below the standard schedule rate, by any other person than
the authorized agent of the carrier. Assuming, for the mo-
ment, that this legislation is within the police power of the
state, then it seems to us there is no necessary incongruity
between it and a provision requiring the carrier to redeem all
tickets sold by him where they have been wholly or in part
unused. To the contrary, we think there is a natural con-
nection between the two. In the statute, the legislature in
effect says to the common carrier: We concede that it is a
wise and proper thing to ^*** protect you, and indirectly the
public by absolutely breaking up this system of general or
indiscriminate dealing in tickets which have been sold to
original purchasers at reduced rates, and upon signed agree-
ments that they were not transferable; but this relief is
given upon the condition that you promptly redeem all
April, 1906.] Samuelson v. State. 811
tickets sold by you which are unused in whole or in part.
We see no reason why such legislation should be held void,
when the statute in question in the Frazier case (88 Tenn.
138, 12 S. W. 537), in the Ryan case (102 Tenn. Ill, 50
S. W. 744, 45 L. R. A. 303), and other cases referred to, have
been maintained as a constitutional exercise of legislative
power.
If the caption had been "An act to regulate the sale and
redemption of tickets by common carriers, ' ' we think it would
hardly be insisted that the redemption of tickets was so
foreign to their sale that both could not be embraced in the
same act. Or, if the act had been entitled, ' * An act to prohibit
all traffic in tickets issued by common carriers, save through
their authorized agents, and to require common carriers to
redeem all tickets issued by them, when wholly or in part
unused," could it be maintained that an act framed in ac-
cordance with this caption was violative of the clause of the
constitution we are now considering? We think not. If
not, it is because neither caption nor body of the act would
embrace two subjects, but rather two branches, naturally
and intimately allied, of the same subject.
Neither is this contention of the plaintiff in error
strengthened, nor the argument contra weakened, by the
*®^ coupling with the word "ticket" of the phrase "or other
evidence of the purchaser's right to travel on its line" in the
second section of the act. Even without the aid of the rule
of ejusdem generis it is clear the phrase, while ampler, is
used simply as the equivalent of "ticket" — of something
purchased which gives the holder the right of travel, and is
therefore within the authority of Cannon v. Mathes, 8 Heisk.
504. In addition, a reading of section 2 discloses that, not-
withstanding the use of this phrase and its association, yet,
when redemption is provided for, it is only the "ticket"
which is included. In either view we are satisfied the pro-
vision for redemption is within the title of the act.
This being entirely clear to us, we are unable to see why
the present act is not constitutional, so far as this objection
is concerned. It is true that the inhibition extends only to
nontransferable signature tickets, while tlie duty of redemp-
tion is laid on the carrier as to all tickets which are wholly
or in part unused; but we cannot see how the narrowness of
the inhibitory clause will make two subjectii alien to one an-
812 American State Reports, Vol. 115. [Tenn.
other of that which would be otherwise germane and entirely
congruous; nor do we believe so anomalous a result follows.
Many cases which, it is assumed, present a different view
of this constitutional clause, have been pressed upon us in
the very learned briefs of the several counsel of the plaintiff
in error. Among those are Murphy v. State, 9 Lea, 373,
State V. MeCann, 4 Lea, 1, Bank v. Divine G. Co., 97 Tenn.
603, 37 S. W. 390, Saunders v. Savage, ^^^ iqs Tenn. 340.
67 S. W. 471 , Ragio v. State, 86 Tenn. 272, 6 S. W. 401 ; and
State V. Hayes, 116 Tenn. 40, 93 S. W. 98.
No question is made, nor is any doubt entertained by us,
of the soundness of the conclusions reached by the court in
the several cases. All of these, however, we think, are clearly
to be distinguished from those upon the authority of which
we place our holding in the present case. State v. Gerst,
supra, involved a statute with the most restricted caption,
embracing, however, provisions extending far beyond the
limits of the caption, and having no natural connection with
it. So it was in the other cases referred to by plaintiff in
error; each was decided upon the distinctive features of the
act there in question. After all it is to be remembered, as
was said in Frazier v. East Tennessee Ry. Co., 88 Tenn. 138,
12 S. W. 537: ''The subjects of legislation are infinite. The
determination as to whether the several provisions of an act
are congruous and germane becomes largely a question of
fact. Particular decisions cannot often be controlling in
determination of subsequent cases arising out of this consti-
tutional provision." We repeat here the language used in
Ryan v. Louisville etc. Terminal Co., 102 Tenn. Ill, 50 S.
W. 744, 45 L. R. A. 303: "As each case is presented, the
courts are bound to examine the act in question as a whole,
and applying to it the sound rule of construction announced
in Cannon v. Mathes, 8 Heisk. 504, and their 'own knowledge
of affairs' (Frazier v. East Tennessee Ry. Cp., 88 Tenn. 138.
12 S. W. 537), determine whether its provisions are congru-
ous or not."
■*** Again, it is contended that the act is unconstitutional
because it is assumed it delegates to the common carrier the
power to suspend or put in force its provisions at pleasure.
We take it that this contention involves the idea that the
statute in effect delegates to the common carrier legislative
authority to create, or not, a penal offense by the issuance or
April, 1906.] Samuelson v. State. 813
nonissuance of nontransferable tickets to the original pur-
chaser below the standard rate schedule. This objection is
necessarily addressed to that part of our constitution which
vests the legislative power of the state in the general as-
sembly.
Is this contention sound? Does the statute delegate the
power to the common carrier, at his pleasure, to create a
penal offense? Upon its face, and as it came from the hands
of the legislature, it seems to be complete legislation. It de-
fines the offense and fixes the penalty. It is true it is not
self-executing, nor does it come into active operation until the
condition arises contemplated by its terms. The common car-
rier is not bound to issue a nontransferable signature ticket,
nor is any person obligated to purchase such ticket. But
when the carrier does issue this ticket, and a signature pur-
chaser is found for it, then a contract relation has been
created, out of the violation of which an offense against the
statute results. It is to be observed, however, that it is
neither in the issuance nor original purchase that the pen-
alty is incurred. Both these are innocent acts. It is only
after these things have been done, after the control of the
common ^**^ carrier over the ticket has temporarily ended,
that the penalty is incurred, if incurred at all.
This is by no means the only law on our books which,
seemingly perfect when passed, becomes effectual to punish,
when through agencies not in existence at its passage and al-
together voluntary in their subsequent actions is aroused to
activity. Take the case of the four-mile law, which makes
it unlawful to sell liquor within four miles of a school liouse.
public or private, whether school be in session or not. This
legislation was directed, not only to conditions then in
existence, but to similar conditions which might arise tliere-
after. So it was possible for a person to make unlawful
the sale of liquor by estal)lishing a school within four miles
of a place where one was then and had been before engaged
in its lawful sale. Yet we have not heard it insisted that
this option to make unlawful what was before lawful in-
validated this wise and wholesome statute, in that it was a
delegation of legislative authority to the one exercising this
option.
As another illustration of the same species of legislation,
we have the statute regulating conditional sales of personal
814 American State Reports, Vol. 115. [Tenn.
property (Acts 1899, cc. 12, 15, pp. 19, 24), by which it is
made a misdemeanor for a purchaser to dispose of the prop-
erty bought by him until it is paid for, provided the seller
has retained the title in a written or printed contract of
sale, but it is not misdemeanor if the title has been retained
in parol. If the argument of the counsel for plaintiff in
error is correct, ■*®* then it would be impossible to sustain
this act, yet we have not known of its constitutionality being
called in question.
We think the argument on which this contention rests un-
sound. The carrier, by the terms of the statute, is neither
delegated the power to make the law, nor the offense. The
law was made, and the offense was defined, by the legislature.
The mere fact that it is within the power of parties of their
own volition to create a condition from which a penalty
might arise or be incurred did not affect the statute. The
true distinction, said the supreme court of Ohio, in Cincin-
nati etc. R. Co. V. Clinton Co., 1 Ohio St. 77, "is between the
delegation of power to make a law, which necessarily in-
volves a discretion as to what it shall be, and conferring
authority or discretion as to its execution to be exercised
under and in pursuance of the law. The first cannot be done ;
to the latter no valid objection can be made." So, in
Locke's Appeal, 72 Pa. 491, 13 Am. Rep. 716, it is said:
"The legislature cannot delegate its power to make a law,
but it can make a law to delegate a power to determine some
fact, or state of things, upon which the law makes, or intends
to make, its own action depend. To deny this would be to
stop the wheels of government."
This phase of the question underwent examination and the
conclusion of the court with regard to it was supported by a
full citation of authorities in State v. Thompson, 160 Mo.
333, 83 Am. St. Rep. 468, 60 S. W. 1077, 54 L. R. A. 950.
*^'' The statute in question was one regulating book-making
and pool-selling in the state of Missouri, and it forbade the
doing of either of these things without license, but provided
that any one of good character might apply to the state
auditor for a license to sell pools, make books, etc., who,
after being satisfied of the good character of the applicant
and good repute of the racecourse, etc., upon which the ap-
plicant desired to do business, might issue a license author-
izing to do these things. The insistence there was that this
April, 1906.] Samuelson v. State. 815
statute was unconstitutional, in that it delegated legislative
power to a state officer. This view, however, was rejected by
the court, which held that it was rather a delegation of de-
termining power, and as such within the competency of the
legislature. In support of its conclusion, many cases were
referred to, among these being State v. Barringer, 110 N. C.
525, 14 S. E. 781; Commonwealth v. Abrahams, 156 Mass.
57, 30 N. E. 79 ; Commonwealth v. Davis, 140 Mass. 485, 4 N.
E. 577; In re Nightingale, 11 Pick. (Mass.) 168; Commis-
sioners V. Covey, 74 Md. 262, 22 Atl. 266 ; In re Flaherty, 105
Cal. 558, 38 Pac. 981, 27 L. R. A. 529. To these may be added
the case of Debardelaben v. State, 99 Tenn. 649, 42 S. W. 684.
To sustain his contention the plaintiff in error, through
counsel, refers to Jannin v. State, 42 Tex. Cr. Rep., 631, 96 Am.
St. Rep. 821, 51 S. W. 1126, 62 S. W. 419, and Allardt v.
People, 197 111. 501, 64 N. E. 533. We have examined these
cases, and, while they give '*** strong support to this con-
tention, we are not satisfied to follow them, believing that
the weight of authority and — with great respect for the
learned courts deciding them — of correct reasoning is
against them.
It is further said that the statute is vicious class legisla-
tion in violation of section 8, article 11, of the state consti-
tution, in that it suspends a general law for the benefit of
the common carrier. This objection may be considered in con-
nection with the question whether the legislation is a proper
exercise of police power by the state. In a very extensive
and valuable note by Mr. Freeman to the case of Jannin
V. State, 42 Tex. Cr. Rep. 631, 96 Am. St. Rep. 821, 51 S. W.
1126, 62 S. W. 419, there will be found a discussion of these
questions and a full citation of the cases. With regard to
this last question Mr. Freeman says that, whenever it has
"been presented to the courts for decision, it has been al-
most uniformly decided that it is a reasonable and proper
exercise of the state police power by the legislature when
seeking to put an end to frauds in the sale of pa.s.sage
tickets to require carriers, who are usually created by legis-
lation, to sell their own tickets, either directly or through
duly authorized agents The courts generally hold that
the legislature, in the constitutional exercise of police power,
has a right to say to the common carrier, so as to bind him:
'You must select and duly eoiumissiou the agents who are to
816 American State Reports, Vol. 115. [Tenn.
sell your passage tickets, and no one else shall engage in that
business.' And it has a right to say to all other persons:
480 <Ybu shall not, without incurring a penalty, engage in
buying and selling passage tickets unless authorized so to
do. ' This is the effect of the decisions in the following cases :
Burdick v. People, 149 111. 600, 41 Am. St. Rep. 329, 36 N.
E. 948, 24 L. R. A. 152 ; Fry v. State, 63 Ind. 552, 30 Am.
Rep. 238 ; State v. Corbett, 57 Minn. 345, 59 N. W. 317, 24
L. R. A. 498 ; State v. Bernheim, 19 Mont. 512, 49 Pac. 441 ;
Commonwealth v. Wilson, 14 Phila. (Pa.) 348; Common-
wealth V. Keary, 198 Pa. 500, 48 Atl. 472." In State v.
Corbett, 57 Minn. 345, 59 N. W. 317, 24 L. R. A. 498, the
court said : That ' * the transportation of passengers is a proper
subject for police regulation by the state is unquestioned, and,
if a business itself is a subject of police regulation, then so
are its incidents and accessories. That the matter of the is-
sue and transfer of tickets as evidence of the contracts of
carriers is an incident and accessory of the business needs no
argument. And where a business is a proper subject of a
police power, the legislature may in the exercise of that
power adopt any measures not in conflict with the provision
of the constitution that he sees fit, provided only they are
such as have some relation to and some tendency to accomplish
the desired end." And why is not such regulation properly
exercised under the police power? In the case of Ex parte
Tuttle, 91 Cal. 589, 27 Pac. 933, it is said: ''Any practice or
business, the tendency of which, as shown by experience, is
to weaken or corrupt the morals of those who follow it, ... .
is a legitimate subject for regulation or prohibition by the
'*®** state." That the sale as well as the purchase of non-
transferable passage tickets is a fraud upon the carrier and
the public, the tendency of which is the demoralization of
rates, has been settled by the general consensus of opinion
among the courts. This being so, an answer is furnished to
the other branch of the contention, to wit, that the act is un-
constitutional, because class legislation. For, if repressing
the traffic is a proper exercise of police power, then the objec-
tion does not lie that it is arbitrary or class legislation. And
such is the view of all the courts, save those of New York, and,
as we understand, the judgments of those courts are rested
upon statutes which, as construed by them, distinguish them
April, 1906.] Samuelson v. Statb. 817
from our act of 1905, and similar acts construed by the vari-
ous courts to whose opinions we have referred.
Again, it is contended that the effect of this statute is to
deprive a party of a property right without due process of
law. The courts generally, if not entirely, agree in holding,
as to the character of a passage ticket, with the dissenting
judges, Bartlett and Martin, in People v. Warden of City
Prison, 157 N. Y. 116, 68 Am. St. Rep. 763, 51 N. E. 1006, 43
L. R. A. 264, that it is not property, nor is it to be treated
as property in its general sense, but as a simple token of the
purchaser's right to be transported on the railroad between
the points named on the ticket, and when it has served its
purpose to be delivered to the carrier issuing it. This was
the view taken in O'Rourke v. Street Ry. Co., 103 Tenn.
124, 76 Am. St. Rep. 639, 52 S. W. 872, 46* L. R. A. 615. So
it is the courts have held that the sale of *^^ such tickets by
persons other than the carrier or his agents, as a business is
not an employment in which they have an unqualified right
to engage. If it be true that the ticket is a mere incident to
the business of the carrier in transporting his passengers,
possessing none of the ordinary elements of property, then it
follows that without the consent of the carrier, dealing in these
tickets cannot form the basis of a legitimate independent
business. As is said by Mr. Freeman in the note referred to :
"Third persons have no constitutional right to interfere with
the relations between the carrier and the passenger by the
purchase and sale, without its consent, of tickets issued by the
former. Hence statutes which confine the purchase or sale of
such tickets to the carrier, or his authorized agent, can in no
way deprive a third person of his property without due
process of law, nor deny to him the equal protection of the
law." The same authorities which are cited by Mr. Freeman
in his discussion of the question of the exerci.se of police power
and class legislation involved in such acts are cited by him to
the proposition above, with the addition of E.\ parte Lorenzen,
128 Cal. 431, 79 Am. St. Rep. 47, 61 Pac. 6S, 50 L. R. A. 55.
The state of New York stands alone in maintaining a contrary
rule.
It is also insisted that, inasmuch as the ticket, for dealing
in which the indictment in this ca.se wh.s found, was one is-
sued for passage from Tennessee into another state, the effect
Am. St. Eep., Vol. 115—52
818 American State Reports, Vol, 115. [Tenn.
of the application of the statute to this case was an unwar-
ranted interference with interstate *^^ commerce. In State
V. Corbett, 57 Minn. 345, 59 N. W. 317, 24 L. R. A. 498, this
objection is answered in this wise: **The law is not a revenue
law, and is not designed to and does not regulate interstate
commerce at all. It is a mere police regulation of the sale
and transfer of tickets, designed to protect the public from
frauds, and its interference, if any, with interstate commerce,
is purely incidental and accidental." Again, in Fry v. State,
63 Ind. 552, 30 Am. Rep. 238, the court said: "It cannot be
said, we think, that the statute of this state, above quoted,
in any manner impedes, obstructs, or casts any burden upon
the free course of commerce, is so far as interstate passenger
travel is concerned. The statute imposes certain prescribed
duties upon common carriers of passengers and their agents;
but the discharge of these duties does not and cannot, as it
seems to us, obstruct, or change, or cast any burden upon the
commerce of the country or interstate passenger travel."
We think this view is eminently sound, and certainly it is
abundantly supported by authority.
Again, it is contended the statute must fall because of
vagueness, and therein is a fatal omission in fixing a 'stand-
ard schedule rate" in reference to which nontransferable
signature tickets are sold. The argument is that one jury
might find one rate to be the standard schedule rate, while
another might find another rate. If this be true, then the
statute must fall, for the authorities all seem to hold that,
where the statute in question is so indeterminate as to leave
juries with their varying opinions to settle the standard, the
statute will ^^^ not be enforced. In Louisville etc. R. R. Co.
V. Commonwealth, 99 Ky. 132, 59 Am. St. Rep. 457, 35 S.
W. 129, 33 L. R. A. 209, a statute providing that, if any rail-
road corporation shall charge or collect more than a just and
reasonable rate of toll for the transportation of passengers or
freight, it shall be guilty of extortion, and fixing a penalty
therefor, was held void for uncertainty, in that it failed to
prescribe a standard as to what is just and reasonable by
which the carrier could regulate its conduct. In Cook v.
State (Ind. App.), 59 N. E. 489, it was held that a statute
which made it an offense to haul over turnpikes and gravel
roads, in specified weather, loads of more than two thousand
pounds in narrow-tired wagons, or of more than two thousand
April, 1906.] Samuelson v. State. 819
five hundred pounds in broad-tired wagons, was void for un-
certainty, because it failed to provide a standard by which
broad or narrow tires might be determined. In line with
these cases are Matthews v. Murphy, 23 Ky. Law Eep. 750, 63
S. W. 785, 54 L. R. A. 415 , Ex parte McNulty, 77 Cal. 164,
11 Am. St. Rep. 257, 19 Pac. 237 , Ex parte Jackson, 45 Ark.
158, and other cases relied on by plaintiff in error.
But is the expression "standard schedule rate" vague and
uncertain, so as to fall under the condemnation of these cases ?
"We think not. So far as interstate commerce travel is con-
eerned, section 6 of the interstate commerce act provides for
it by requiring every common carrier, subject to the provi-
sions of the act, to print and keep open to public inspection
schedules showing the rates, fares, and charges for the trans-
portation of passengers '*®'* and property which any such
common carrier has established, and which are in force at the
time on its route. This section also provides that these
printed schedules shall plainly state the places upon its rail-
road between which property and passengers will be carried,
and these schedules are to be plainly printed in large type
copies for the use of the public, and shall be posted in two
conspicuous places in every depot, station, or ofifiee of the com-
mon carrier where passengers or freight are received for
transportation. There is a similar provision as to joint rates
over one or more connecting roads. In addition, the act pro-
vides that "every common carrier subject to the provisions
of this act, shall file with the commission .... copies of its
schedule of rates, fares and charges which have been estab-
lished and published in compliance with the requirements"
of the act, and shall notify the commission of all changes
made in the same. When these rates, fares and charges have
been established by the common carrier, the act provides: "It
shall be unlawful for such carrier to charge, demand, collect
or receive from any person or persons a greater or less com-
pensation for the transportation of pa.s.sengers or property
.... than is specified in such published schedules of rates,
fares, and charges as may at the time be in force."
After thus providing for the establishing and publication of
rates, etc., and against all manner of discrimination in refer-
ence thereto, the last section of the act is as follows: "Noth-
ing in this act shall prevent .... '*"'* the issuance of mile-
age, excursion or commutation passenger tickets."
820 American State Reports, Vol. 115. [Tenn.
So we think there is no uncertaint}'^ in fact in the matter
of interstate travel as to what is, at any particular time, the
standard schedule rate for the sale of passenger tickets, and
when chapter 410 speaks of tickets being sold below that
rate it refers to the standard established and made public
under this act of Congress.
Nor is there any more uncertainty as to intrapassenger
rates. So far as railroads are concerned, these^are provided
for in chapter 10, page 121, of our Session Acts of 1897.
By section 22 of that act it is made the duty of all persons
'or corporations who shall own or operate a railroad in this
state, within thirty days after the passage of the act, to
furnish to the railroad commission created by the act its
tariff of charges of every kind for examination and correc-
tion, and when corrected the commission was required to ap-
pend a certificate of approval to this tariff of charges, and
it was then made the duty of the railroad company, or its
operators, to post at each of its depots in conspicuous places
the rates, schedules, and tariffs for transportation of pas-
sengers and of freight.
But it is earnestly argued, though not made the subject of
an assignment of error, that, whatever may have been the
purpose of the draftsman of this act, yet its effect is to make
it unlawful in every one, save the authorized agents of com-
mon carriers, to be engaged as ticket brokers, and possible to
continue the ticket broker's '^^^ business as a lawful avoca-
tion when carried on by these agents. To put the objection,
which it is assumed to be fatal to the act, in the words of
counsel: "It makes it unlawful for any persons, including the
original purchaser, to sell, etc., tickets of a certain charac-
ter, and punishes a violation of the act by a heavy fine, while
it permits the authorized agent of the common carrier issu-
ing the tickets to violate the act at will." It is very clear
from the language used that the sale of or dealing in rail-
way and other tickets by the authorized agent of the com-
mon carrier issuing the same, which is made innocent by the
act, though punishable when done by any other person, is
not the original sale, but is a resale of the ticket after it has
left the hands of the railway company and has passed into
the hands of the original purchaser for a subsequent pur-
chaser. This is beyond question, for the language, in de-
April, 1906.] Samuelson v. State. 821
scribing the ticket whose sale is prohibited, is: "As which
shows that it was issued and sold below the standard schedule
rate under contract with original purchaser entered upon
such ticket and signed by the original purchaser."
As will be seen, this construction is reached largely from
the use of the phrase "issued and sold" in the past tense.
In other words, the construction insisted upon is arrived at
by adhering to the true grammatical effect of those words,
making them have reference to a past transaction.
This, however, is to single out a single phrase and give it
such controlling force as to warp the entire act, when ^^"^ in
the argument of counsel it is admitted that "there can, of
course, be no doubt that the purpose of this act is to destroy
the business of ticket brokers." We know of no sound canon
of construction which would warrant this. While it is true
that, in arriving at the meaning of the legislature, primarily,
the grammatical sense of the words used is to be adopted, yet
if there is any ambiguity, or if there is room for more than
one interpretation, the rules of grammar will be disregarded
where a too strict adherence to them would raise a repug-
nance or absurdity, or would defeat the purpose of the legis-
lature: Garby v. Harris, 7 Ex. 591; Metropolitan B. Wks.
V. Steed, L. R. 8 Q. B. D. 445 ; George v. Board of Educa-
tion, 33 Ga. 344; State v. Heman, 70 Mo. 441. Many cases
might be cited in which the future tense has been read as
including the present and the past, where that was neces-
sary to carry out the meaning of the legislature. Thus an
enabling act relating to married women who "shall come into
the state" may apply to one who came into the state be-
fore the passage of the law : Maysville & L. L. R. Co. v. Iler-
rick, 13 Bush (Ky.), 122. Where an act provided that certain
land "shall be allotted for and given to" an individual
named, it was held that the words passed an immediate in-
terest: Rutherford v. Green, 2 Wheat. (U. S.) 196, 4 L. ed.
218. In Babcock v. Goodrich, 47 Cal. 488, the phrase "cur-
rent expenses of the year" was made to read, "expenses of
the current year"; it being evident that the latter form of
words more correctly '*"'* expres.sed the legislative intent.
These cases are but a recognition of an old and well-estab-
lished rule of the common law, applicable to all written in-
■truments, that "verba intentioni, uon e contra, debent in-
822 American State Reports, Vol. 115. [Tenn.
servire"; that is to say, words ought to be more subservient
to the intent, and not the intent to the words: Black on In-
terpretation of Laws, sec. 34.
It will be found that this court has had occasion frequently
to apply this rule of construction. One phase of the rule
has been used for the purpose of saving statutes, the consti-
tutionality of which was called in question. In such cases
it has been held that where a statute will admit of two con-
structions, one that would make the statute void on account
of conflict with the constitution, and another that would ren-
der it valid, the latter will be adopted, even though the
former at first view be the more natural interpretation of the
language used: Cole Mfg. Co. v. Falls, 90 Tenn. 466, 16 S.
W. 1045; State v. Schlitz Brewing Co., 104 Tenn. 715, 78
Am. St. Rep. 941, 59 S. W. 1033.
We agree with the counsel that there is no doubt that the
legislature intended by this act to destroy the business of
ticket brokers, and to so construe it as to make it possible for
common carriers, or their authorized agents, to engage in
this business, would do violence to this intention. We do not
think that there is any rule which demands a construction
leading to this result. To the contrary, we are satisfied, giv-
ing the terms used a natural construction, that the act means,
in the words of the ^^'^ counsel for the state, "that common
carriers and their authorized agents can sell to an original
purchaser a contract signature ticket, and that the common
carrier, through its agent, can repurchase by redemption such
ticket so originally sold, and that the extent to which it au-
thorizes common carriers and their agents to traffic in non-
transferable signature tickets is in the original sale and in
the redemption."
We are satisfied, after considering the many objections
urged to this act, that no one of them is well taken. We
think it is in no respect violative of the state or federal con-
stitutions. It follows, therefore, that the judgment of the
lower court is affirmed.
The Constitutional Bequirements as to the Title of Statutes are con-
sidered at length in the notes to Crookston v. County Commissionera,
79 Am. St. Rep. 456; Bobel v. People, 64 Am. St. Eep. 70; Lewis v.
Dunne, 86 Am. St Rep. 267.
The Power of a State to Control the Sale of Passenger Tickets is the
subject of a note to Janniu v. State, 96 Am. St. Rep. 828.
April, '06,] Thompson v. Fidelity Mut. Life Ins. Co. 823
THOMPSON V. FIDELITY IMUTUAL LIFE INSURANCE
COiMPANY.
[116 Tenn. 557, 92 S. W. 1098.]
INSURANCE, LIFE — Course of Dealing Justifying Belief
that the Insurer will not Insist upon a Forfeiture for Nonpayment of
Premium. — The fact that out of thirty-six premiums paid seven were
accepted after due, two of which were accepted after the assured
presented a certificate of continued good health, two were forwarded
by mail on the day they were due, and of the other three, one being
paid one day overdue, another two days overdue, and the remaining
one being mailed one day overdue, but not received until four days
later, does not justify the insured in believing that the insurer will
not insist on a forfeiture of the policy if subsequent premiums are
not paid as they fall due. (pp. 825, 826.)
INSURANCE, LIFE.— Mere Indulgence in the Payment of
Premiums does not' constitute a waiver of a condition of forfeiture
for the failure to pay premiums when due. (p. 826.)
INSURANCE, LIFE. — To Warrant a Recovery Where a Pre-
mium is not Paid When Due, it is necessary to prove (1) the course
of dealing between the insured and the insurer in reference to the
acceptance of overdue payments amounting to a custom or habit; (2)
that by reason of this course of dealing, the insured was justified in
believing that the insurer would not insist on a forfeiture for fail-
ing to pay subsequent premiums; (3) that the assured believed he
could postpone the payment of premiums without risking a forfeit-
ure; and (4) that he acted on this belief, and therefore, did not pay
the premium at its maturity, (p. 827.)
INSURANCE, LIFE— Tender of Premiums After Death of the
Assured. — The permission to pay a premium after due during the life
and good health of the assured is not equivalent to paying a pre-
mium after his death or loss of health, (pp. 827, 828.)
INSURANCE, LIFE.— The Illness of the Assured is No Excuse
for not Paying His Premium when it falls due. (p. 828.)
INSURANCE, LIFE.— The Failure to Pay a Premium when
due works a forfeiture, whether the condition requiring such a pay-
ment be regarded as precedent or subsequent, (p. 830.)
INSURANCE, LIFE — Incontestable Clause Does not Apply to
Nonpayment of Premiums. — A policy providing that after three
years, if the payments required shall have been made when duo, it
shall be incontestable, means incontestable for causes other than
nonpayment of premiums, and an insured failing to pay a (juarterly
premium after such three years is not entitled to recover, (p. 831.)
Turley & Turley, for Thompson.
R. Lee Battels, for Insurance Company.
66© "WILKES, J. This is a suit to collect a life insurance
policy. The bill upon its face shows that the insured died in
default of payment of the last premium. The comphiinant
824 American State Reports, Vol. 115. [Tenn.
seeks to recover upon two theories, one that there was a
course of dealing between the insui«ed and the company,
by which the insured was allowed to pay his premiums after
they became due, and in consequence of this course of dealing
complainant was led to believe that he might make such
payments within thirty days after they became due.
The last payment which was allowed to go by default was
due December 30, 1904. The insured was then absent from
his home at Memphis, and in his last sickness ; but of this the
company had no notice.
The company mailed notice in due time and in the usual
way of the maturity of this premium, but it was never re-
ceived by Thompson or his wife, or any one else for him,
so far as the record shows.
The policy provides as follows:
**The Fidelity Mutual Life Association .... in considera-
tion of the application for this policy, which is made a part
hereof .... and the payment to said association of seven
and eighty-three one-hundredths dollars ($7.83) upon the
thirtieth days of the months of March, June, September, and
December in every year, for a period of twenty years from
March 30, 1896, and thereafter in the event of the continu-
ance of this contract, '*** the payment of renewal premiums
on the date aforesaid .... does hereby receive William Y,
'Thompson, of Memphis, Tennessee, as a member of said asso-
ciation, and issues this policy of insurance and hereby prom-
ises to pay the sum of twenty-five hundred dollars to the
administrators, executors or assigns of said member within
ninety days after proof of death, .... less the balance of
the dues for the current year of the death of the insured,
and any indebtedness of the member to said association,
subject, however, to all the requirements hereafter stated, and
the conditions herein indorsed, which are hereby referred to
and made a material part of this contract.
"(2) Provided, any moneys required to be paid under
this policy, during the continuance of this contract, must be
actually paid when due to said association; .... otherwise,
this policy shall be ipso facto null and void, and all moneys
paid thereon shall be forfeited to the said association."
The policy was issued on the 30th of March, 1896, and
delivered to the insured on April 3, 1896, at which time he
paid the initial premium. The insured died on the 14th of
January, 1905, in default in the payment of the premium due
I
I
April, '06.] Thompson v. Fidelity Mut. Life Ins. Co. 825
December 30, 1904. On a day between January 20 and 23,
1905, a tender of the premium due December 30, 1904, was
made to the Nashville office of the defendant. At that time
the company was not aware that Thompson had died, and that
fact was not communicated '^^ to it at the time of tender.
The agent in charge at the Nashville office advised the party
making the tender that it could not be accepted because it was
overdue, unless accompanied by a certificate of good health.
At the time the policy was issued the insurer had an office
in Memphis, but during the summer of 1900 this office was
abolished, and the insured was instructed to pay his premiums
by mail to the Nashville office. The subsequent premiums
were paid to the Nashville office.
There were thirty-six premiums due upon the policy be-
tween the date of its issuance and the death of the insured.
Of these, seven were accepted after they were due. Of these
seven, two were accepted only when the insured had executed
a certificate of good health. Of the five remaining premiums,
two were forwarded by mail to the Nashville office on the
day they became due, thus leaving only three premiums that
were paid and accepted after due, unconditionally. Of these
three premiums one was paid one day overdue, one two
days overdue, and one sent by mail to the home office one day
after due, and received five days after due.
The evidence shows that the certificates of health exe-
cuted by Thompson and the revival contracts recited that
the policy had become forfeited for nonpayment of premiums
at maturity, and there was an express agreement on the part
of the insured that he was to pay his future premiums
promptly. The correspondence '^^ that passed between the
cashier of the Nashville office and the insured in reference to
the premium due December 30, 1900, shows that it was neces-
sary, in order to protect Thompson's insurance, that the
cashier should pay his premiums on the due date, out of her
own funds. The subsequent correspondence between the
cashier of the same officer and Thompson, in reference to the
premium due June 30, 1901, made known to Thompson that
his policy had been forfeited because his premium was not
paid promptly, and that before he could be reinstated it was
necessary for him to execute a health certificate.
We cannot, in view of the evidence in regard to the pay-
ment of premiums which we find in the record, conclude
that there was an habitual course of dealing between the
826 American State Reports, Vol. 115, [Tenn.
parties which would justify the insured in bellieving that the
company would not insist upon a forfeiture of the policy if
he failed to pay his premiums when they fell due, so as to
bring the case within the operation of the rule laid down in
Hartford Ins. Co. v. Hyde, 101 Tenn. 396, 48 S. W. 968 ; New
York Life Ins. Co. v. Eggleston, 96 U. S. 572, 24 L. ed. 841.
The doctrine is there laid down that any agreement, declara-
tion or course of dealing on the part of an insurance company
which leads the insured honestly to believe that by conformity
thereto a forfeiture of his policy will not be incurred, fol-
lowed by due conformity on his part, will estop the company
from insisting *®* upon a forfeiture, though it may be
claimed under the express letter of the contract.
As was said by the court in case of Equitable Life Assur.
Soc. V. McElroy, 83 Fed. 631, 28 C. C. A. 365: "The course of
dealing between the insured and the insurer must be such as
to justify the insured in believing that the company will not
insist upon a forfeiture of the contract for his failure to pay
his future premiums when due ; that the insured does believe
this and that he acts on this belief. Otherwise, there is no
estoppel on the part of the insurer to insist upon prompt
payment and forfeiture for failure to pay ad diem."
The rule is laid down by Mr. Bacon, Mr. Joyce and other
text-writers that the * ' course of dealing ' ' between the insured
and the insurer as to accepting overdue premiums must
amount to a custom or habit in order to estop the insurer from
insisting on forfeiture for the failure to pay a subsequent
premium ad diem; and that not only must it be shown that
the premiums were habitually received after they were due,
but that the insurer intended to waive the prompt payment of
future premiums, or that the assured, as a reasonable man,
was led to believe by its action, that the insurer had waived
the condition of forfeiture: 2 Bacon, sec. 431; 2 Joyce, sec.
1368; Vance, p. 353; Crossman v. Massachusetts B, Assn.,
143 Mass. 435, 9 N. E. 753.
That mere indulgencies in the payment of premiums do
not constitute a waiver of the condition of forfeiture for fail-
ure to pay premiums when due: Thompson v. ^^^ Knicker-
bocker L." Ins. Co., 104 U. S. 252, 26 L, ed. 765 ; Easley v.
V alley .Uut. Life Assn., 91 Va. 169, 21 S. E. 235.
In the case of Thompson v. Knickerbocker L. Ins. Co., 104
U. S. 252, 26 L. ed. 765, the claim made was similar to the
April, '06.] Thompson v. Fidelity Mut. Life Ins. Co. 827
contention made in this case. Justice Bradley said: "If the
permission to pay a premium or premiums after maturity was
a matter of indulgence on the part of the company, it cannot
be justly construed as a permanent waiver of the clause of
forfeiture, or implying an agreement to continue the same
indulgence for time to come. As long as the insured con-
tinued in good health it is not surprising and should not be
drawn to the compaiiy's prejudice, that it was willing to
accept the premium after maturity, and waive the forfeiture
which might have been insisted upon. This was for the mu-
tual benefit of themselves and the insured at the time, and
in each instance in which it happened, it had respect only
to that particular instance without involving any waiver in
reference to future payments. The insured had no right,
without some agreement to that effect, to rest on such
voluntary indulgence shown on one occasion or a number of
occasions, as a ground for claiming it on all occasions. If
it were otherwise, an insurance company could never waive a
forfeiture on occasion of a particular lapse without endanger-
ing its right to enforce it on occasion of a subsequent lapse."
Under the above authorities, before complainant can
recover in this case, she must show: ****** (1) That the course
of dealing between the insurer and the insured, in reference
to the acceptance of overdue premiums, amounted to a custom
or a habit. (2) That by reason of this course of dealing, the
insured was justified in believing that the company would not
insist upon a forfeiture for his failure to pay his subsequent
premiums ad diem. (3) That the insured did actually be-
lieve that he could postpone the payment of his future i>remi-
ums after maturity without the risk of a forfeiture. (4) That
the insured acted upon this belief in this instance, and that
by reason thereof, did not pay the premium due December 30,
1904, at its maturity.
But this rule does not in any event apply, unless the
payment is made and accepted during the life of the insured,
80 that we consider this course of dealing as really unimpor-
tant.
A permission to pay a premium after date during the life
and good health of the insured is not equivalent to a permis-
sion to pay after his death. It is well .settled that a course of
dealing between the parties under which the insurer accepted
overdue premiums when the insured was in good health,
828 American State Reports, Vol. 115. [Tenn.
will not give his representative or himself the right to pay
or tender his premiums after maturity, and he is in a bad
state of health, or had died : 2 Bacon, see. 431 ; Grossman v.
Massachusetts B. Assn., 143 Mass. 435, 9 N. E. 753 ; Hartford
etc. Ins. Co. v. Unsell, 144 U. S. 439, 12 Sup. Ct. Rep. 671,
36 L. ed. 496; National M. B. Assn. v. Miller, 85 Ky. 88, 2
S. W. 900.
667 The reason of this is, there has been an increase in the
risk or hazard. An insurer might be willing to accept an
overdue premium and reinstate an insured when his condition
of health is the same as when the policy was originally
issued, but it cannot be argued from this that he should
be required to reinsure or reinstate the same person when he
was or is in extremis. The course of dealing, if any, was to
accept the overdue premiums from a live man, not a dead
one.
At the time the tender was made in this case Thompson
was dead.
As bearing somewhat upon this feature of the case, it had
been held that illness of the insured is no excuse for his not
paying his premium when due. The law and his contract
require him to make provision for meeting his premiums when
due, and if he fails to do this, he cannot be heard to complain
by saying that he was physically unable to attend to his
business; Thompson v. Knickerbocker L. Ins. Co., 104 U. S.
252, 26 L. ed. 765 ; Klein v. New York L. Ins. Co., 104 U.
S. 88, 26 L. ed. 662 ; Carpenter v. Centennial Mut. Life Assn.,
68 Iowa, 453, 56 Am. Rep. 855, 27 N. W. 456.
In the case of Want v. Blunt, 12 East, 183, the contract
provided that upon payment of premiums on a certain day,
or within fifteen days thereafter, that upon the death of the
insured the company would pay to his widow the amount
named in the policy. The insured died in default of the pay-
ment of his premium, but it was tendered the company within
fifteen days ^^ after his death. The court held that the pay-
ment was not made in time; that the condition in the policy
permitting the insured to pay within fifteen days after the
due date of the premium meant, should pay "within fifteen
days after due date, during the life of the insured."
Said the court: "This contra,ct of insurance must be con-
strued according to the meaning of the parties expressed in
the deed The risk insured against is W. 's death. The
duration of the insurance is so long as he continues to make
April, '06.] Thompson v. Fidelity Mut. Life Ins. Co. 829
his payments, but the insurance is not to be void if paid
within fifteen days after due. The question to be determined
is whether at the death of the insured the policy had expired.
The insurance is for a quarter of a year, and so on, from
quarter to quarter, contingent upon the payment of premiums
in advance. The death of the insured happened after one
of the quarters had ended and when a new one had begun,
but no payment of premium had been made as a consideration
for the insurance for the new quarter. As the protection
offered was only up to the beginning of a new quarter, its
continuance thereof being dependent upon the payment of
another quarter's premium, there was no insurance upon his
life at the time of his death, hence the death happened during
a period not covered by the policy. The payment of a
premium for another quarter was equivalent to making a new
assurance, though under a former policy. The frame '**"' of
this policy shows that the premium must be paid during the
life of the assured."
This case was followed by Pritchard v. Merchants' Ins.
Soc, 3 Com. B. 622. Said Justice Willes: "The provision
for revival upon the good health of the insured assumes that
the subject upon which the insurance is to attach is a living
person ; otherwise the stipulation would be absurd. The very
foundation of a life policy is that it is a contract for the
payment of a certain sum upon the future death of a person
then in being, in consideration of the present payment of
the premium. The renewals or revivals of the contract, like
the original, are clearly only for future assurance on a living
person. ' '
In the policy in the present case, it is provided that the
insurance shall not be binding unless delivered during the
lifetime of the insured; the provision in the certificate of
health and revival contract that the insured should be in good
health also contemplated his being alive at the time.
In Carlson v. Supreme Council, 115 Cal. 466, 47 Pac. 375,
35 L. R. A. 643, the by-laws of the benefit association provided
that if the insured died in default of assessments or dues,
his beneficiaries would have no rights under the contract.
There was a further provision in the by-laws that if unpaid
dues and assessments were paid within sixty days, the as-
sured would be reinstated. After default, but before the
expiration of the sixty days thereafter, the insured died, and
his beneficiaries *''® tendered the amount of his unpaid as-
830 American State Reports, Vol. 115. [Tenn.
sessments and dues. The tender was refused and suit
brought upon the beneficiary's certificate. The court held
that before the policy wa.s revived, and while the assured was
in default, there was no insurance, and that the insured took
the risk of losing his insurance if he died without having paid
his premiums; that the meaning of the contract giving the
assured sixty days after the date of his assessment to pay was
that he must pay within that time and during his life. Said
the court: "The contract of insurance becomes complete at
the death of the insured. The liability or nonliability be-
comes fixed by that event. The right to recover depends upon
the conditions existing at the moment of the insured's death."
To the same effect is Miller v. Union Cent. Ins. Co., 110
111. 102.
"Payment after death creates no contract. There is no
consideration for the insurance": Bliss on Insurance, sec. 316.
"There can be no valid insurance of the life of a dead
man": Bliss on Insurance, sec. 355.
Complainant claims that the condition of the policy re-
quiring payment of premium ad diem, or on failure the
policy to become forfeited, was a condition subsequent, and
no forfeiture could be claimed without some affirmative act
on the part of the insurer. It is immaterial whether the con-
dition of precedent or subsequent failure to pay when due
in itself worked a forfeiture. ^"^^ The parties have so agreed,
and the courts will enforce the agreement : Ressler v. Fidelity
M. L. Ins. Co., 110 Tenn. 411, 75 S. W. 735 ; Iowa Life Ins. Co.
V. Lewis, 187 U. S. 335, 23 Sup. Ct. Rep. 126, 47 L. ed. 204.
So, where the annual premium is payable in installments,
a failure to pay any installment works a forfeiture : Klein v.
New York Life Ins. Co., 104 U. S. 88, 26 L. ed. 662.
Time is of the essence of the contract, and even though the
condition be construed as a condition subsequent, failure to
pay when due forfeits the contract: New York Life ins. Co.
V. Statham, 93 U. S. 24, 23 L. ed. 789.
The policy provides that after three years, if the payments
required shall have been made when due, the policy shall be
incontestable. This only means that it shall be incontestable
for causes other than the nonpayment of premiums, but
does not in any wise relieve the insured from the payment of
his premiums, but, on the contrary, expressly stipulates that
they shall be kept up and paid when due, during the twenty
years' life of the policy.
April, '06.] Thompson v. Fidelity Mux. Life Ins. Co. 831
An amended bill was filed under which it was, in substance,
contended that under the terms of the policy when properly
construed, no forfeiture would accompany nonpayment of
any premium at maturity.
The contract of insurance provides that if the premiums
payable on the 30th of March, June, September, and Decem-
ber of every year, are paid when due, the insurer will pay to
the representative of the insured the '"'^ face value of the
policy "less the balance of the dues for the current year of
the death of the insured, and any indebtedness of the member
to said association, subject, however, to all the requirements
hereinafter stated," etc.
This provision is followed by a provision for forfeiture
upon the failure of the insured to pay, when due, any moneys
required to be paid under the policy.
The contention is based upon a construction of the terms
of the policy ; and it is insisted that under them the company
had absolute right to collect all of the payments due on the
policy within any current year from its anniversary, notwith-
standing the assured might die during the year and before
some of the installments fell due, and having this right it was
bound to give to the insured a corresponding right to insur-
ance for the whole of the current year.
This amended bill was demurred to and the demurrer sus-
tained; and this is assigned as error.
We think this contention cannot be maintained, as made
by complainant in her amended bill.
The contract rightfully construed is that upon the death
of the insured, while the policy is in an existing contract, i. e.,
when the premiums are regularly paid when due, the insurer
shall have the right to deduct any accruing paj-ment for the
current year not then due. In other words, the right to de-
duct from the face of the policy the installments not due
attaches only where the insured regularly meets his payments
at maturity, ^''^ and dies before all of the payments for the
current year become due.
In case of a default of any moneys due under the contract,
it ipso facto becomes null and void.
But it is said that the contract of insurance is a contract
for annual insurance, and that right of the insured and
insurer must be determined from the btatus of the parties at
an anniversary of the policy.
832 American State Reports, Vol. 115. [Tenu.
Concede that it is an annual insurance, still, it is an
annual insurance with the payments to be made quarterly.
It is expressly provided that a failure to make any payment
when due will work a forfeiture ; hence the annual insurance is
subject to the voluntary default of the insured.
The privilege of paying the annual premium in quarterly
installments was evidently for the convenience of the insured.
Ordinarily, these premiums are payable as a whole in advance
for the term of one year. The failure to pay the whole of
the premium in such a case works a forfeiture in the event
that it is so provided. In this instance the result is the same,
upon the failure of the insured to meet his quarterly pay-
ments when due. At the end of any quarter there is no
obligation imposed upon the insured to pay the next succeed-
ing quarter; his failure to pay works a forfeiture of his con-
tract, but the company cannot compel him to pay the remain-
ing installments. In the event of the death of the insured,
before the end of the first quarter, or any succeeding quarter,
if he has paid his premiums when due, '^'^^ his representatives
are entitled to collect his insurance. In the absence of any
provision permitting the company to deduct from the face
value the remaining installments for the year, the insured
would receive the face value of the policy, having paid one-
fourth, two-fourths, etc., as the case may be, of the annual
premium. In order to avoid this, the company said to the
insured, "You pay your premium in installments; if you
meet those installments regularly when due and die before all
of the installments have become due, we will pay the face
value of the policy," ''less any unpaid portion of the yearly
payments." In other words, the company reserves the right
to deduct the dues for the current year accruing but not due.
Thus, in the event of a loss, while the contract is in force, to
preserve to itself the right to collect the unpaid portion of the
annual premium. In the case of a default in the payment of
any installment when due, the policy is no longer an existing
contract, and the insurer has no right to collect the remaining
installments.
As was said by the court in the case of McConnell v.
Provident S. L. Assur. Soc, 92 Fed. 769, 34 C. C. A. 663,
where the court was called upon to construe a provision
similar to the one in question: "It is an annual policy on
which the premium is payable by quarterly installments,
April, '06.] Thompson v. FroELiTY Mut. Life Ins. Co. 833
leaving the insured at liberty to drop it at any quarter, and
imposing no liability on the part of the company, unless the
quarterly payment is made, when due. If, however, the
insured died at the end of the first quarter **'"' of the current
year, the insurance company receives only one-quarter of the
annual premium instead of the whole. It has insured the
deceased for a year, subject to his voluntary' default. He has
died and the policy is earned. He should pay the whole
year's premium therefor, but has only paid one-quarter's
premium. To meet this injustice, the proviso was introduced
that if the insured should happen to die before the whole of
said quarterly payments should have become due, then the
company will be entitled to deduct the premiums for all sub-
sequent quarters of that current year from the amount of the
policy. That proviso is not meant to apply to the case of a
defaulted payment, but only to a case where the payments are
regularly made as they become due, and where all the install-
ments have not become due 'on the death of the insured. In
this case, there was a failure to pay a quarterly installment on
the day fixed. As a consequence the policy became forfeited."
The above case was based upon the authority of Insurance
Co. V. Sheridan, 8 H. L. Cas. 745. In that ca.se, the policy
contained a provision that the annual premium for the whole
term was thirty-three pounds sterling, payable by quarterly
installments. If the insured should die, having paid his
premiums when due, the policy would be payable for the sum
insured. "But if the insured died before the whole of the
quarterly payments shall have become payable for the year,
the directors may deduct from the sum insured the whole of
the premium for that year."
"® The insured died after the third installment became
due, but before it was paid.
The hou.se of lords, through Lord Campbell, held the con-
tract to be an insurance from quarter to quarter, but that
the payment of the quarterly installments was a condition
precedent to the right to continue the policy as an existing
contract. Lord Cramworth, while agreeing with Lord Camp-
bell as to the result reached, was of the opinion that the insur-
ance was an annual insurance with the payments due quar-
terly, and the failure to pay any installment when due worked
a forfeiture of the contract. Said Cramworth: "The provi.so
(referring to the clau.se giving the insurer the right to
Am. St. Rep., Vol. 115—53
834 American State Reports, Vol. 115. [Tenn.
deduct unpaid portions of premiums) is not meant to apply
to the cause of a default in payment when due' but to a case
where the regular payments had been made as they became
due, but where all had not become due."
The case of Howard v. Continental Life Ins. Co., 48 Cal,
229, is also in point. There the policy provided for the pay-
ment of an annual premium in advance, or if the insured saw
fit twice yearly or thrice yearly in advance. Further, that if
the insured should die, to pay the face value after deducting
any balance of the year's premium. There was a provision
for forfeiture for failure to pay when due any moneys re-
quired to be paid under the policy. The insured elected to
pay his premium thrice yearly, paying one-third upon the
delivery of the policy. He died after the second installment
became due and ^"^"^ remained unpaid. In a suit upon the
policy, in which the claim was made that the provision giving
the insurer the right "to deduct the balance of the dues for
the current year" extended to .the insured credit for the
payment of his other installments until the last installment
fell due, the court held: "First, the payment of the install-
ment did not extend to the insured credit for the other in-
stallments until the end of the year, but that they should
have been paid when due." Further, "less the balance for
dues for the current year" did not have the effect of ex-
tending such credit, but that the meaning of those words
was that the company could deduct any installment not due
at the death of the insured, not only that the company was
compelled to pay the face of the policy and deduct therefrom
an overdue installment. The court said: "We agree that
it was intended in case of the death of the insured before
one or more installments became due that the company should
deduct from the amount insured the balance of the current
year's premium. But we do not think as a consequence of
this right, reserved by the insurer, the insured was relieved
of the necessity of paying any installment when it was agreed
it should be paid. The company was authorized to deduct
any installment not due at death; but was not compelled to
pay the sum insured, with the right to deduct an install-
ment overdue when death occurred."
Thus construing the several clauses, effect is given '^'^^ to
all stipulations of the contract ; but to sustain the view of re-
spondent, it would be necessary to ignore the portion of the
April, '06,] Thompson v. FroELiTY Mut. Life Ins. Co. 835
policy which fixes the thrice yeariy payments, and making
the policy read that the payments be made one-third at the
beginning of the year. Primarily, the whole of the annual
premium was payable in advance. The consideration for the
policy was the payment of the whole premium; if not paid,
the policy to lapse. But the option was given the insured
to pay thrice yearly in advance. In the first case, there was
no obligation to pay the sum insured unless the thrice yearly
payments were made when due.
As said by the court in Werner v. Metropolitan L. Ins. Co.,
11 Daly (N. Y.), 176, complainant loses sight of the manner
in which the payments are to be made, that is, upon the
days named in the policy. Certainly the quarterly payments
were due on the days named; the provision for forfeiture
provides that any moneys, required to be paid under the pol-
icy, must be actually paid when due, otherwise the policy
becomes void. Confessedly, there was a payment due on the
policy December 30, 1904, but no payment made. The in-
sured died fifteen days in default, and no tender until after
his death. Under the plain terms of the policy it had ceased
to be an existing contract.
The fallacy in the contention of counsel for complainant
lies in his claim that the insured was entitled to one year's
insurance from March, 1904 (anniversary of policy), abso-
lutely. Whereas, the contract is that ^"^^ he is entitled to
such insurance only upon the condition that he pays his pre-
miums when due.
Mr. Joyce says: "If the stipulation is that the annual pre-
mium shall be paid quarterly in advance upon specified days,
or the policy shall be forfeited, the party will be held strictly
to the performance of such a condition, and the contract be-
comes terminated by a nonpayment as stipulated. And this
is so even though other portions of the contract refer to
'annual insurance' or 'yearly premium,* And though the
policy provides that if all of the quarterly payments have
not been made when the insured dies, the company may de-
duct the whole unpaid balance of that year's premium from
the amount of the policy": Vol. 2, sec. 1108.
This is a hard case, but by no means an unusual one,
where a party has failed to comply with the refpiirerneiits
of his policy, and death coming unexpectedly, he has lost all
benefits under it by its plain provisions.
836 American State Reports, Vol, 115. [Tenn.
Complainant insisted upon a jury trial in the court be-
low, but did not make demand for same according to the
rule of the court. Moreover, there does not appear to be
any disputed question of fact material to the decision of
the case involved in it.
It is said that complainant is entitled to recover the penalty
prescribed by acts of 1901, page 248, chapter 141.
Inasmuch as complainant, in our view of the case, is not
entitled to recover the insurance, it follows, as a matter of
course, she cannot recover any penalty for withholding it.
The decree of the court below is affirmed, with costs.
The Failure of an Insured to Pay the Premiums in accordance with
the terms of the policy of insurance ordinarily works a forfeiture of
his rights thereunder: Pacific Mut. Life Ins. Co. v. Galbraith, 115
Tenn. 471, 112 Am. St. Rep. 862; Pitts v. Hartford etc. Ins. Co., 66
Conn. 376, 50 Am. St. Eep. 96. However, if an insurance company, by
its habits and course of business, creates in the mind of the policy-
holder a belief that payment of premiums may be delayed until de-
manded, or otherwise waives the right to demand a forfeiture, this
is binding on the company, notwithstanding the policy expressly stipu-
lates that it shall be void on nonpayment of premiums when due:
Home P. Co. v. Avery, 85 Ala. 348, 7 Am. St. Rep. 54. An insur-
ance company, having received assessments after they were over-
due, and when the policy might have been forfeited for nonpay-
ment, can insist upon a forfeiture only after having given the insured
personal notice that thereafter punctual payment will be required:
Stylow V. Wisconsin Odd FeUows' M. L. Ins, Co., 69 Wis. 224, 2 Am,
St. Eep. 738.
STATE v. BRADLEY.
[116 Tenn. 711, 94 S. W. 665.]
CEIMINAL LAW — Forgery by Typewriting. — Forgery may be
committed by the use of a typewriting machine by which both the
body of the instrument and the purported signature are written,
(p. 837.)
Attorney General Gates, for the state.
Steele & Steele, for Bradley.
''^^ BEARD, G. J. The indictment in this case was rested
on a very inartificial paper, the body and signature of which
were typewritten and in the following words, to wit: "April
13, 1905. Mr, Robert Woods, please let John Bradley have
A.
April, 1906.] State v. Bradley. 837
that suit and I will see that it is paid for the 17th of this
month. $8.00. [Signed] Mr. A. D. House, Agent, own
hand print."
''^^ The indictment alleged that the defendant in error
"unlawfully, fraudulently and feloniously did, by and with
a typewriter, make, forge, and utter" this order on Robert
"Woods for a suit of clothes in the name of A. D. House to
the "prejudice of the rights of said House." Upon motion
the indictment was quashed, and the state has brought the
case here and complains of error in this action of the court
below.
Mr. Wharton, in his work on Criminal Law (volume 1,
section 605), says: "That aside from writing by pen and
ink, forgery may be committed by printing, by pencil writ-
ing, by the use of another's seal, by pasting one name on a
note over another name, by photographic process, and by en-
graving or preparing materials for engraving." This text
of the author is abundantly supported by authority. We
have no doubt of the soundness of the rule there announced.
It follows that the trial judge, in quashing the indictment,
erred. His judgment is therefore reversed, and the case
is remanded for trial.
On What Constitutes Forgery, see the note to Arnold v. Cost, 22 Am.
Dec. 306. Forgery is the fraudulent making of Bome writing to the
prejudice of another's right: Franklin Fire Ins. Co. v. Bradford, 201
Pa, 32, 88 Am. St. Rep. 770. Or it consists in causing a writing
to appear of some legal efficiency which in truth it docs not possess:
State V. Leonard, 171 Mo. 622, 94 Am. St. Rep. 798. The chief essen-
tials of the crime are: 1. A writing in such form as to be apparently
of some legal efficacy; 2. An evil intent; and 3. The fal»e making of
such writing: State v. Gryder, 44 La. Ann. 9(32, 32 Am. St. Rep. 358;
People V. Bendit, 111 Cal. 274, 52 Am. St. Rep. 186.
CASES
EN TBX
SUPEEME COURT OF APPEALS
or
VIRGINIA.
FRENCH V. VRADENBURG.
[105 Va. 16, 52 S. E. 695.]
WILLS — ^Eights of Devisee — Subsequent Encumbrance. — A dev-
isee of real estate, encumbered by the testator subsequently to the
execution of the will, has a right to have the encumbrance discharged
out of the personal estate of the testator, where the will directs the
payment of all of his debts from any ready money or other personal
property that he may have at the time of his death, (p. 839.)
EXECUTORS AND ADMINISTEATORS— Order of Payment
of Debts. — The different funds or subjects of property constituting
the estate of a deceased testator must be applied to the payment of
debts in the following order: 1. The personal estate at large, not
exempted by the terms of the will or necessary implication; 2. Real
estate or an interest therein expressly set apart by the will for the
payment of debts; 3. Eeal estate descended to the heir; 4. Eeal or per-
sonal property expressly charged with the payment of debts, and
subject to such charge, specifically devised or bequeathed; 5. Gen-
eral pecuniary legacies; 6. Specific legacies; 7. Eeal estate devised by
the will. (pp. 839, 840.)
W. W. Old & Son, for the appellant.
C. B. Gamett and J. B. Sears, for the appellees.
*'' WHITTLE, J. The essential question presented by this
record for decision involves the right of a devisee of real es-
tate, encumbered by the testator subsequently to the execu-
tion of his will, to disappoint legatees, pecuniary and specific,
by having the encumbrance discharged out of the personal es-
tate, where the will directs the payment of all the debts
of the testator and funeral expenses from any ready money
or other personal property that he may have at the time of
his death.
(838)
Feb. 1906.] French v. Vradenburq. 839
From an adverse decree, in a suit by the executors to con-
strue the will and administer the estate, the devisee appealed.
The doctrine touching the order of liability of the assets of
a testator's estate for the payment of debts has, in its vari-
ous aspects, proved a fruitful source of discussion ; and in
the argument of the present case our attention has been drawn
to numerous decisions of the courts, both in England and the
United States, bearing upon the question. But whatever may
be the weight of authority elsewhere, we are of opinion that
the case comes within the influence and control of a line of
precedents in this state so well established and universally
followed in determining the order of liability of the assets
of the estate of a testator as to have attained the dignity of
canons of construction and the sanctity of rules of property.
Since the opinion of Judge Lee, in Elliott v. Carter, 9
Gratt. 541, which was delivered more than half a century
ago, wills *® have been written and astates administered on
the faith of that decision throughout the commonwealth ; and
if it, and the decisions of this court which have followed it,
are to be overruled, it should be done by act of the legisla-
ture, and not by the courts. That course was pursued in
England by Lock King's Act, 17 & 18 Victoria, chapter 113,
amended by 30 & 31 Victoria, chapter 69, page 706, which
in effect declares that when a testator shall die seised of
mortgaged property, and shall not by his will or deed have
signified a contrary or other intention, lands devised subject
to a mortgage or other equitable charge, including a vendor's
lien, are primarily chargeable therewith, and such devisee is
not entitled to have the mortgage debt discharged or satisfied
out of the personal estate.
In Elliott V. Carter, 9 Gratt. 541, it was held that, in the
absence of an express charge, the personal estate constitutes
the natural primary fund for the payment of debts. But
where, as in that case, both pei-sonal property and real prop-
erty were e(iually and expressly charged, they stand on the
same footing, and each contributes ratably to the discharge
of the common burden. The learned judge, in the course
of his opinion, formulates the following rule, determining
the order in which the different funds or subjects of property
constituting the estate of a deceaseil testator shall he applied
to the pajTuent of debts: 1. The persoiuil estate at large, not
exempted by the terms of the will or necessary implication; 2.
840 American State Reports, Vol. 115. [Virginia,
Real estate, or an interest therein, expressly set apart by the
will for the payment of the debts; 3. Real estate descended to
the heir; 4. Real or personal property expressly charged with
payment of debts, and then, subject to such charge, spe-
cifically devised or bequeathed; 5. General pecuniary lega-
cies ; *® 6. Specific legacies ; and 7. Real estate devised by the
will.
The main case has been since followed and cited in numerous
decisions of this court: Crouch v. Davis* Exr., 23 Gratt. 62;
Murphy's Admr. v. Carter, 23 Gratt. 477 ; Cockerville v. Dale,
33 Gratt. 45, 49; Edmunds' Admr. v. Scott, 78 Va. 720; Allen
V. Patton, 83 Va. 255, 2 S. E. 143; New's Exr. v. Bass. 92 Va.
383, 23 S. E. 747; Todd v. McFall, 96 Va. 754, 32 S. E. 472;
Frasier v. Littleton's Exr., 100 Va. 9, 40 S. E. 180.
The precise question decided in Todd v. McFall, 96 Va. 754,
32 S. E. 472, was that a pecuniary legatee, whose legacy had
been diminished by the discharge of a vendor's lien resting
upon real estate at the time of the testator's death, was not
entitled to be subrogated to the right of the vendor against
such real estate in the possession of a specific devisee. Re-
plying to the contention that, as the legacies were expressly
made a charge on the personal property and it was consumed
in the payment of debts, Mrs. IMcFall was entitled to be paid
her legacy out of the real estate, and especially to the ex-
tent that the personal property was applied to the relief
of the vendor's lien, the court said: "The answer to this posi-
tion is that the will not having charged the real estate with
the payment of the debts, nor made any other provision for
their payment, the law makes the personal property the pri-
mary fund for their satisfaction ; and if the testator was mis-
taken as to the value of his personal property, and it has
proved inadequate to pay both debts and legacies the latter
must abate to the extent of the disappointment, and cannot
be reimbursed out of the land for the loss. A legatee has no
right to call upon the devisee to contribute to the payment
of the legacy unless the real estate be charged with its
payment, not even when the personal property has been ap-
plied in exoneration of the land from a mortgage debt or ven-
dor's lien, if the debt was contracted and ^® the mortgage
or lien on the land was created by the testator himself."
Elliott V. Carter, 9 Gratt. 541, is relied ou, among other
authorities, to sustain the proposition.
Feb. 1906.] French v. Vbadenburg. 841
In Frasier v. Littleton, 100 Va. 9, 40 S. E. 108, the court
held that where there were several specific devises of real
estate, not charged by the will with the payment of debts,
one of which the testator in his lifetime, after the will was
written, encumbered by mortgage, on a deficiency of personal
assets to pay the mortgage, the devisee took the devise cum
onere, and was not entitled to call upon other devisees to
contribute to the payment of the mortgage. The decision
rests upon the familiar and w^ell-settled principle that secur-
ities will never be marshaled to the injury of persons over
whom the party invoking the doctrine has no superior equity :
Lee v. Swepson, 76 Va. 173; Peery's Admr. v. Elliott, 101
Va. 709, 44 S. E. 919 ; 3 Minor's Institutes, 612; 2 Jarman on
Wills, 6th ed., Bigelow, 581.
The incidental remark of the judge who wrote the opinion
in that case, that real estate enciunbered by subsequent, mort-
gage fell in the fourth class of Judge Lee's enumeration, was
inexact and merely by the way. It in no wise affected the
result, which, as we have seen, rested upon the principle
that the equitable doctrine of marshaling does not obtain
among devisees of real estate under the facts of that case,
and was not intended as a departure from or modification of
the rule in Elliott v. Carter, 9 Gratt. 541.
The reason for the rule established by Lock King's Act,
and cognate authorities, which allows the legatee who has
been disappointed of his legacy by the application of the
personal property to disencumber real property specifically
devised, to stand in the place of the encumbrancer, is to
give effect to the will of the testator as a whole, which it is
said can only be done by requiring the devisee to take cum
onere. But it would seem ^* that under the facts of this
case, to uphold the contention of the appellees would violate
the principle which they invoke to sustain it; for in this in-
stance, as we have seen, there is an express charge upon the
personal estate for the payment of debts, subject to which
charge the legacies were given.
It follows from these views that the decree of the circuit
court, in so far as it exonerates the personal property from
the payment of the liabilities set forth in the seventh para-
graph of the decree, and charges that indebtedness primarily
upon the real estate therein described, and directs the pay-
ment of pecuniary legacies and the delivery of specific lega-
842 American State Reports, Vol. 115. [Virginia,
cies bequeathed by the will to the respective legatees, is erro-
neous, and must to that extent be reversed and annulled, and
the cause remanded for further proceedings to be had therein
not in conflict with this opinion.
A Devise of Land Subject to a Mortgage made by the testator im-
ports an intention that the debt be satisfied out of the general per-
sonal assets: Bulkley v. Seymour, 74 Conn. 459, 92 Am. St. Rep.
229; Hunt, Petitioner, 19 R. I. 139, 61 Am. St. Bep. 743. If a spe-
cific devise is made of real property which is subject to a mortgage,
the devisee, in the absence of an expression of a contrary intent on
the part of the testator, is entitled to have such property exonerated
from the mortgage, even though the personal estate is insufficient
to pay the general legacies: Brown y. Baron, 162 Mass. 56^ 44 Am.
St. Eep. 331,
TOWNSEND V. NORFOLK RAILWAY AND LIGHT
COMPANY.
[105 Va. 22, 52 S. E. 970.]
STREET RAILWAYS — Public Service Corporations — ^Duties. —
An electric street railway company is a public service corporation,
and as such it has duties both of a public and private nature. It
must perform its public duties, but in the performance of its duties
not of a public nature which are incidental to those of a public char-
acter, it stands upon the footing of a private corporation, and with
respect to the duties of the first class, in doing that which under the
law it is required to do, it cannot be considered as doing an unlaw-
ful act, and if a lawful act is done without negligence, any injury
which it occasions is damnum absque injuria, (p. 847.)
STREET RAILWAYS — Site for Power-house. — While an elec-
tric street railway cannot be operated without a power-house, yet
the selection of a site therefor, and the generation of power, are
mere incidents to the operation of the road and mere private busi-
ness with which the public has no concern, and in such business the
company stands on the same footing as a mere individual, with no
special privileges, (pp. 850, 851.)
STREET RAILWAYS — Location of Power-house — Nuisance. —
A grant of power to an electric street-car company to construct and
operate its road in a city gives no authority to locate its power-
house where it will be a nuisance, nor to so locate it as, by its use,
to unreasonably interfere with and disturb the peaceable and com-
fortable enjoyment of others in their property; and if injury is in-
flicted upon others by such location and operation of a power-house,
the company must respond in damages, (p. 852.)
NUISANCE— Legislative Authority. — To escape liability for
a nuisance created incidentally to an act, the performance of which
is authorized by statute, it must appear that the particular act com-
plained of, and immunity from its consequences, were within the
Jan. 1906.J Townsend v. Norfolk Ry. etc. Co. 843
contemplation of the legislature at the time of enacting the statute,
(pp. 856, 857.)
NUISANCE— Legislative Authority.— While the legislature
may authorize acts which would otherwise be a nuisance when they
affect or relate to matters in which the public have an interest, the
statutory authority which affords immunity for such acts must be ex-
press, or a clear and unquestionable implication from powers expressly
granted, and it must appear that the legislature contemplated the
doing of the very act which occasioned the injury, (pp. 860, 861.)
T. Taylor and T. A. Williams, for the plaintiffs in error,
W. H. Venable and White, Tunstall & Thorn, for the de-
fendant in error.
^^ KEITH, P. The plaintiflFs in error brought an action
of trespass against the Norfolk Railway and Light Company,
and their declaration states: That they were seised and pos-
sessed, as joint owners, of a certain lot of land, with the build-
ings and improvements thereon, situated on the west side of
Cumberland street, in the city of Norfolk, Virginia; that the
Norfolk Railway and Light Company, a corporation organ-
ized under the laws of the state of Virginia, owned a certain
lot in the city of Norfolk, fronting on Cove street; that the
defendant had erected on this lot a power-house, equipped
with large and heavy machinery, consi.sting of boilers, engines,
dynamos, condensers and generators, for the purpose of gen-
erating electric power, and as a part of its equipment of said
power-house had erected in connection with its buildings
three or more metal stacks; that it was the duty of the de-
fendant so to maintain and operate its power-house and plant
as not to injure or interfere with the comfort, use and enjoy-
ment by the plaintiffs of their property; but disregarding its
duty in this behalf, on the first day of August, 1902, and on
divers other days prior thereto and continuously up to the
present time, the defendant did so wrongfully and unjustly
operate and conduct its plant, or power-house, that large
columns of smoke, dust, cinders, sparks and soot had been
emitted from the stacks of the defendant, and thrown, pro-
pelled, and hurled against, upon and through the houses of
the plaintiffs on the property aforesaid, thereby preventing
its proper and useful enjoyment by the plaintiffs; that their
property had been made untenantable, and that its rental
and salable value had been dei)rec'iated ; that the houses of
the plaintiffs upon their property, as aforc-^.iid. had been and
were being greatly shaken and daniat,'«'d, in such a manner as
844 American State Reports, Vol. 115. [Virginia.
to cause the same to become and be uncomfortable, dangerous,
and uninhabitable; that by reason of the premises the prop-
erty of the plaintiffs had deteriorated in value, both *' as
income-producing and as marketable property; and, further,
that the defendant, by allowing the electric current from the
wires and conduits, or on return circuit, to escape from its
wires, or returning by ground circuit, to run over and through
the pipes of metal placed to carry water and gas to the house
of plaintiffs, has caused the metal pipes, thus acting as con-
ductors of electricity, to be eaten up and destroyed; and
that although the defendant has been often requested by the
plaintiffs to refrain and desist from the wrongful and unjust
operation and management of its said plant, or power-house,
in the several ways hereinbefore described, yet it has refused
to desist from the said wrongful and unjust operation and
management of its plant, as aforesaid, to the damage of the
plaintiffs two thousand dollars.
To this declaration the defendant filed a special plea, in
which it sets out that, before the time of the committing of
the alleged grievances in the declaration mentioned, the Gen-
eral Assembly of Virginia had passed an act to incorporate
the Virginia Electric Company, by which it was provided that
it should have power to construct, lease, purchase or acquire
by consolidation with any other company or companies, and
operate and maintain in the city of Norfolk, suitable works,
machinery, or plants, for the manufacture of electricity, and
for th*e sale and distribution of the same; that it should have
power to sell and distribute the same for public or private
illumination, for heating and for power, and for any other
purposes which the same might be used for; that it should
have power to do such acts and things, and conduct such en-
terprises as might be convenient in connection with or inci-
dental to the enjoyment of the powers thereinbefore con-
ferred; and that it might, with the consent of the proper au-
thorities of the city of Norfolk, use the streets and roads
thereof for laying its mains, pipes, wires, and erecting its
poles; that by an act of the legislature, entitled "An act to
incorporate ^® the Old Dominion Electrical Development and
Power Company," it was provided that the said Old Do-
minion Electrical Development and Power Company should
have power to erect, maintain and operate plants in this state
for the generation of electricity and the supply of electric
Jan. 1906.] Townsend v. Norfolk Ry. etc. Co. 845
current for its own use and for sale to persons, natural or
artificial, desiring to use the same for heat, light or power,
or any and all uses to which the electric current might then
or at any time thereafter be applicable, and might manufac-
ture, use and sell, distribute and furnish the same for said
purposes, and all electrical supplies of all kinds, to all and
any persons and corporations, upon such terms as might be
agreed upon by and between the contracting parties; that
by the seventh section of the act last above mentioned it was
provided that the board of directors of the Old Dominion
Electrical Development and Power Company should have the
power to change the name of that company and to adopt such
other name as they might deem proper upon the fulfillment
of certain specified conditions; that in pursuance of said
power the board of directors changed the name of the Old
Dominion Electrical Development and Power Company, so
that it became and was the Norfolk and Ocean View Railway
Company ; that said last-mentioned company, by virtue of the
powers granted to it by its acts of incorporation, acquired
the works, property, rights, privileges and franchises of the
Virginia Electric Company; and that said Norfolk and Ocean
View Railway Company thereby became and was entitled,
empowered and authorized to do and perform any, all and
singular, the acts referred to in the act of incorporation of the
Virginia Electric Company, as well as any, all and singular
the acts requisite, necessary or proper in connection with the
powers, privileges and rights of the said company in the mat-
ter of carrying on the business of the said company. The
plea further avers that on the second day ^"^ of November,
1899, by an agreement entitled "Agreement of consolidation
of the Norfolk Street Railroad Company and the Norfolk
and Ocean View Railway Company under the name of the
Norfolk Railway and Light Company," the said Norfolk Rail-
way and Light Company became and was passessed, and still
is possessed, of any, and all and singular, the rights, fran-
chises, privileges, powers, works, properties, and all other in-
terests of any sort whatever of the said constituent compan-
ies, the Norfolk Street Railroad Company and the Norfolk and
Ocean View Railway Company, and especially and particu-
larly the particular powers, privileges and rights hereinbe-
fore more fully specified as to the operation and maintfUHnoe
of the plants of the said companies; that under the said con-
846 American State Reports, Vol. 115. [Virginia,
solidation agreement the defendant became and was possessed,
and still is possessed, of the said plant, power-house and
manufactory, which is the same plant, power-house and manu-
factory as are complained of in the declaration of the plain-
tiffs; that not only has it obtained legislative sanction and
authority for the operation of the said plant, power-house and
manufactory, machinery and boilers, but that furthermore,
at divers times, the defendant has obtained permission and
authority from the councils of the city of Norfolk to install
the said machinery and boilers in its power-house and manu-
factory; and further avers that, pursuant to the legislative
and municipal authority had and obtained, as aforesaid, it
has ever since operated, and still continues to operate, its
said plant in a proper, careful, reasonable, and suitable man-
ner ; that it is necessary to the proper carrying on of def end-
ant 's business to operate and maintain the said power-house,
manufactory and plant in the manner in which it has been,
and is being, operated; and that it has done no damage and
occasioned no discomfort that is not the natural, proximate,
inevitable and necessary result of such proper, careful, rea-
sonable *® and suitable operation, without this, that the said
defendant is guilty of the said supposed grievances, or any
of them, in manner and form as the said plaintiffs hath above
thereof complained, and of this it puts itself upon the coun-
try.
The plaintiffs demurred to this special plea, and that de-
murrer was overruled by the court. And the plaintiffs not
withdrawing, nor desiring to withdraw, their demurrer, the
court gave judgment in favor of the defendant.
Section 153 of the constitution declares that the term "pub-
lic service corporation" shall include *'all transportation and
transmission companies, all gas, electric light, heat and power
companies, and all persons authorized to exercise the right of
eminent domain, or to use or occupy any street, alley or
public highway, whether along, over, or under the same, in a
manner not permitted to the general public."
Under the terms of this definition it is apparent the Nor-
folk Railway and Light Company is to be deemed a public
service corporation.
It will be observed that the declaration nowhere states that
the injury of which the plaintiffs complain was caused by
any negligent act upon the part of the defendant. The con-
tention of plaintiffs is that in the operation of its plant the
Jan. 1906.] Townsend v. Norfolk Ry. etc. Co. 847
defendant wrongfully caused smoke, dust, cinders, sparks
and soot from its chimney-stacks to be thrown and propelled
upon and through the houses of the plaintiffs; that by the
operation of its heavy machinery it caused the houses of the
plaintiffs to be greatly shaken and damaged; and that by per-
mitting the electric current from its wires and conduits, or
on return circuit to escape from its wires, or returning by
ground circuit, to run over and through the pipes placed to
carry water and gas to the houses of plaintiffs, the pipes
had been eaten up and destroyed; and ^"* the useful and
proper enjoyment of the property been impaired; it had been
rendered untenantable and its value diminished.
The defendant replies that it has operated, and continues
to operate, its plant in a proper, careful, reasonable and suit-
able manner, in pursuance of legislative and municipal au-
thority conferred upon it.
The question, therefore, for us to consider, is, whether or
not the court erred in overruling the demurrer to this plea.
The declaration sets forth a nuisance; the defendant jus-
tifies what it has done by pleading legislative authority for
its acts.
A public service corporation is to be considered in two as-
pects. It has duties which it owes to the public, and which
it must perform; it has other duties not of a public nature,
which are incidental to those of a public character, in the per-
formance of which it stands upon the footing of a private
corporation. With respect to the duties of the first class,
it may be said that in doing that which under the law it may
be required to do, it cannot be considered as doing an unlaw-
ful act; and if a lawful act be done without negligence, any
injury which it occasions is damnum absque injuria.
This aspect of the case was before this court in Fisher v.
Seaboard Air Line Ry. Co., 102 Va. 363, 46 S. E. 381, where
it was said that a railroad company acting under authority
of law, whose road is constructed and operated with judg-
ment and caution, and without negligence, is not liable to
an adjacent land owner for damages resulting from noises,
jarring and shaking of buildings, dust and smoke incident
to the running of trains; for no action lies for the loss or
inconvenience resulting from doing an authon/L-d act in an
authorized way. To the autlu.nti(.-s relied on in support of
this case many others may be added
848 American State Reports, Vol. 115. [Virginia,
»o Beseman v. Pennsylvania R. R. Co., 50 N. J. L. 234, 13
Atl. 164, from the supreme court of New Jersey, is strikingly
in point. That was a suit for damages done to the houses
and lands of plaintiff bj'^ the running of defendant's trains,
to which the defendant replied that it acted under franchises
derived from the public grant, and that it had built its road
and run its trains, carrying merchandise and freight, near
to the lands of the plaintiff, doing the plaintiff no more dam-
age than that which necessarily resulted from the transac-
tion of such acts and business; and that for such incidental
and unavoidable damage it was not responsible. The plain-
tiff contended that with respect to private property a rail-
road is per se a nuisance whenever it throws a detriment, such
as would be actionable at common law, on such property.
Upon this the court said: "That this proposition, on which
the plaintiff's case rests, is a most momentous one is at once
apparent. If it should be sustained, an illimitable field of
litigation would be opened. If a railroad, by the necessary
concomitants of its use, is an actionable nuisance with re-
spect to the plaintiff's property, so it must be as to all other
property in its vicinity. It is not only those who are greatly
damnified by the illegal act of another to whom the law gives
redress, but its vindication extends to every person who is
damnified at all ; unless, indeed, the loss sustained be so small
as to be unnoticeable by force of the maxim de minimis non
curat lex. The noises and other disturbances necessarily at-
tendant on the operation of these vast instruments of com-
merce are wide-spreading, impairing in a sensible degree some
of the usual conditions upon which depend the full enjoy-
ment of property in their neighborhood ; and consequently, if
these companies are to be regarded purely as private corpora-
tions, it inevitably results that they must be responsible to
each person whose possessions are thus molested. Such a
doctrine would make ^^ these companies, touching such land
owners, general tort-feasors. Their tracks run for miles
through the cities of the state, and every land owner on each
side of the track would be entitled to his action; and so, in
the less populated districts, each proprietor of lands adja-
cent to the road would have a similar right; and thus the
litigants would be 'numbered by thousands. It is question-
able whether the running of railroads would be practicable
if subjected to such a responsibility. Nor is this susceptibil-
Jan. 1906.] Townsend v. Norfolk Ry. etc. Co. 849
ity to be sued on all sides the only, or even the worst, con-
sequence of the theory in question; for, if these rights of
action exist, it follows, necessarily, that each of the persons
in whom they are vested can prevent the continuance of the
wrong out of which such rights of action arise. If this plain-
tiff should recover two or three verdicts against the defend-
ant because of the damage that is inseparable from the run-
ning of its trains, there is plainly no ground on which the
chancellor court refuse to enjoin a continuance of the nui-
sance. Nor does there appear to be any relief from such a
consequence; the aggrieved land owner would be the master
of the situation ; for there is no law by force of which the
company could take his land in invitum, or compel him to
have his damages assessed once for all. In short, the plain-
tiff's claim involves the assertion that he can put a stop to
the business of the defendant at the point in question." In
concluding his opinion, the learned judge says: "I find no
embarrassment in disposing of the present subject, for I
have put railroads in the category of public agents, and have
regarded them as possessed of all the immunities, in the par-
ticular in question, belonging to such an office."
That railroad corporations — public service corporations —
are in many aspects to be regarded as quasi public corpora-
tions, can no longer be doubted. Upon that theory their
duties are measured and their rights determined; and the con-
trol which the ^^ state asserts, the exercise of which is be-
coming more and more necessary with the growth and de-
velopment of our transportation system, of which railroads
eon.stitute so essential a part, rests upon the public character
of such corporations. A railroad, in the operation of its
trains in the transportation of freight and passengers, is in
the exercise of a public duty, and should be permitted to ap-
ply the same principles of construction when it pleads, for
its protection, the powers conferred upon it by the legislature,
as are urged when the obligations imposed by the same char-
ter are insisted upon in the effort to compel such corporations
faithfully to perform the duties which they have assumed
with respect to the public.
It would be easy to multiply authorities along this line.
Indeed, Baltimore & P. R. Co. v. Filth liapti.st Church, 108
U. S. 317, 2 Sup. Ct. Rep. 719, 27 L. eti. 7;{9. upon which plain-
tiffs in error justly rely in another aspect of this ca.se, uses
Am. St. Rep., Vol. 115—54
850 American State Reports, Vol. 115. [Virginia,
the following language: "Undoubtedly a railway over the
public highways of the district, including the streets of the
city of Washington, may be authorized by Congress, and if
when used with reasonable care it produces only that inci-
dental inconvenience which unavoidably follows the additional
occupation of the streets by its cars with the noises and dis-
turbances necessarily attending their use, no one can com-
plain that he is incommoded. Whatever consequential an-
noyance may necessarily follow from the running of cars
on the road with reasonable care is damnum absque injuria.
The private inconvenience in such case must be suffered for
the public accommodation."
We shall not press this view of the case further, for coun-
sel for plaintiffs in error state in their brief that they do not
"seriously contest" the doctrine enunciated by this court in
Fisher v. Seaboard Air Line Ry. Co., 102 Va. 363, 46 S. E. 381.
^ But was the defendant in error acting in its public
capacity when it committed the grievances complained oft
Every allegation in the declaration is directed against the in-
juries inflicted by the operation of the power-house of the
defendant. It is true that an electric railway cannot be oper-
ated without a power-house ; it is true that an engine-house is
a necessary adjunct to a steam railway ; but they are incidents
to the operation of the road, with which the public has no
concern.
Pollock on Torts, at page 158 of the second edition of his
work, says: "A railway company is authorized to acquire land
within specified limits, and on any part of that land to erect
workshops. This does not justify the company, as against
a particular householder, in building workshops so situated
(though within the authorized limits) that the smoke from
them is a nuisance to him in the occupation of his house."
In Re Rhode Island R. Co., 23 R. I. 457, 48 Atl. 591, 52
L. R. A. 879, it is said: "The common carrier serves both the
public and itself. It has its public and private functions.
The public part is the exercise of its franchise for the accom-
modation of the public ; the private part is its incidental busi-
ness, with which the public is not concerned and which the
company manages for its own interest. The company carries
passengers over its road as a public duty, but the generation
of the power to propel cars is the private business of the
company. Whatever is necessary to the exercise of the fran-
Jan. 1906.] Townsend v. Norfolk Ry. etc. Co. 851
chise is for the benefit of the public, but that which pertains
simply to means of supply is a private business of the com-
pany."
To the same effect is Louisville etc. Terminal Co. v. Jacobs,
109 Tenn. 727, 72 S. W. 954, 61 L. R. A. 188, where it is said :
"But over and beyond this, we think a corporation in select-
ing a place for its roundhouse acted in a private capacity,
** and is responsible for the injurious consequences which
may result from its use. ' '
In Beseman v. Pennsylvania R. R. Co., 50 N. J. L. 235, 13
Atl. 164, the court said: "A railroad company in selecting a
place for repair-shops and engine-house acted altogether in
its private capacity. Such location was a matter of indiffer-
ence to the public; and consequently with respect to such an
act the corporation stood on the footing of an individual,
and was entitled to no superior immunities,"
In Baltimore & Potomac R. Co. v. Fifth Bapt. Church, 108
U. S. 317, 2 Sup. Ct. Rep. 719, 27 L. ed. 739, the Baptist
Church claimed that its services were habitually interrupted
and disturbed by the hammering noises made in the work-
shops of the company, the rumbling of its engines passing
in and out of them, and the blowing off of steam ; that these
noises were at times so great as to prevent members of the
congregation, sitting in parts of the church farthest from the
shops, from hearing what was said; that the act of blowing
off steam occupied from five to fifteen minutes, and frequently
compelled the pastor of the church to suspend his remarks.
The main reliance of the railroad company to defeat the ac-
tion was the authority conferred upon it by the act of Con-
gress of February 5, 1867, to exercise the same powers, rights
and privileges in the construction of a road in the District of
Columbia, the line of which was afterward designated, which
it could exercise under its charter in the construction of a
road in Maryland, with some exceptions, not material here.
By its charter it was empowered to make and con.struct all
works whatever which might be necessary and expedient in
order to the proper completion and maintenance of the road.
In its opinion the court says: "It is no answer to the action
of the plaintiff that the railroad company was authorized by
act of Congr&ss to bring its track within the limits of the city
of Washington, and to con.struct such works as were neces-
sary and expedient for the completion ** and maintenance
852 American State Reports, Vol, 115. [Virginia,
of its road, and that the engine-house and repair-shop in ques-
tion were thus necessary and expedient; that they are skill-
fully constructed ; that the chimneys of the engine-house are
higher than required by the building regulations of the city,
and that as little smoke and noise are caused as the nature
of the business in them will permit. In the first place, the
authority of the company to construct such works as it might
deem necessary and expedient for the completion and mainte-
nance of its road did not authorize it to place them wherever it
might think proper in the city, without reference to the prop-
erty and rights of others Whatever the extent of the
authority conferred, it was accompanied with this implied
qualification, that the works should not be so placed as by
their use to unreasonably interfere with and disturb the peace-
ful and comfortable enjoyment of others in their property.
Grants of privileges or powers to corporate bodies, like those
in question, confer no license to use them in disregard of the
private rights of others, and with immunity for their invar
sion."
In Ridge v. Pennyslvania R. R. Co., 58 N. J, Eq. 172, 43
Atl, 275, the Beseman case (50 N. J. L. 235, 13 Atl. 164),
and Baltimore C. P. R. R. Co. v. Fifth Bapt. Church, 108 U.
S. 317, 2 Sup. Ct, Rep, 719. 27 L. ed, 739, are considered, and
the court says: "In the latter case it was denied by the
supreme court of the United States that the railroad had
been invested with the privilege of building an engine-house
or repair-shop next to a church in the city of Washington,
The court held that the grant of power did not authorize the
company to place such structure wherever it might think
proper in the city without reference to the property or rights
of others. The doctrine of that case was approved in the
opinion of Beseman v. Pennsylvania R. R, Co., 50 N. J. L,
235, 13 Atl. 164, upon the ground that in selecting the place
for repair-shops the railroad company acted altogether in a
private capacity. Such location, it was said, was a matter of
in.'ifference to the public, and consequently, with ^® respect
to such act, the corporation stood upon the footing of an
individual, and was entitled to no superior immunities. What
was meant was that while the public was concerned that a
railroad company should have all the appliances, including
repair-shops, to make its public service effective, it was imma-
terial to the public where such appliances were placed, so
long as the service was efficient. All that concerns the public
Jan. 1906.] Townsend v. Norfolk Ry. etc. Co. 853
is to have an efficient service in the way of transportation of
persons and freight. The company is shielded from responsi-
bility for incidental damages resulting from acts which are
necessary to bring about such service. In the federal decision
it was admitted that the company, by virtue of its franchise,
had the right to build repair-shops and engine-houses, but,
having the liberty to choose different sites for its structures,
it was bound to select one where they would not inflict an
injury upon the property of others."
In Rapier v. London Tramways Co., [1893] L. R. 2 Ch. D.
588, the syllabus of the opinion delivered by Lindley, L. J., is
as follows: "The defendants were a tramway company, who
were empowered by their act to lay down and construct two
lines of tramway according to deposited plans, together with
the works and conveniences connected therewith. The act
gave no compulsory powers for taking lands, and made no
special mention of building stables. The defendants con-
structed the lines, and built some large blocks of stables near
the plaintiff's house for the horses employed in drawing the
cars. The plaintiff complained of the smell caused by the
stables, and brought an action for an injunction to restrain the
defendants from using the stables so as to cause a nuisance.
Held (affirming the decision of Kekewich, J.), that although
horses were necessary for the working of the tramways, the
company was not justified by their statutory powers in using
^"^ the stables so as to be a nuisance to their neighbors, and
that it was no sufficient defense to say that they had taken all
reasonable care to prevent it."
Other aspects of this case were discussed before us, upon
which we have not deemed it necessary to touch ; and without
intimating any opinion upon them, except in so far as has
been herein expressed, we shall content ourselves for the
present with saying that we are of opinion that the circuit
court should have sustained the demurrer to the special plea.
Upon a Petition to Rehear, February 23, 1906.
KEITH, P. In the opinion delivered by the court when the
judgment sought to be reviewed by this petition for reheariiij?
was pronounced, it is said :
"The declaration sets forth a nuisance; the defendant justi-
fies what it has done by pleading legislative authority for its
acts.
854 American State Reports, Vol. 115. [Virginia,
"A public service corporation is to be considered in two
aspects. It has duties which it owes to the public, and which
it must perform; it has other duties not of a public nature,
which are incidental to those of a public character, in .the
performance of which it stands upon the footing of a private
corporation. With respect to the duties of the first class, it
may be said that in doing that which under the law it may be
required to do, it cannot be considered as doing an unlawful
act; and if a lawful act be done without negligence, any in-
jury which it occasions is damnum absque injuria."
This position is earnestly assailed in the petition for a re-
hearing, where it is broadly asserted that no such distinction
*® between the public and private functions of a corporation
exists, and that all is lawful which the legislature authorizes
to be done, although the authority conferred be not impera-
tive, but merely permissive.
It may be that in the distribution of the duties of a public
service corporation into those of a public and those of a private
nature, the classification was inaccurate and unscientific,
though it has the sanction of courts of the highest respecta-
bility. By other courts the same conclusion is reached by a
consideration of the language used by the legislature in the
act of incorporation, and by its construction determining
whether or not the law-making power intended to permit an
act to be done, or to require its performance; to confer a priv-
ilege, or to impose a duty.
In the case of Fisher v. Seaboard Air Line Ry. Co., 102
Va. 363, 46 S. E. 381, the position of this court is well stated
in the syllabus: "A railroad company, acting undqj* authority
of law, whose road is constructed and operated with judgment
and caution, and without negligence, is not liable to an adja-
cent land owner for damage resulting from the noises, jarring
and shaking of buildings, dust and smoke, incident to the run-
ning of trains. No action lies for the loss or inconvenience
resulting from doing an authorized act in an unauthorized
way. ' ' This is to be understood, of course, in the light of the
facts presented in that record, where damages were claimed
for the noises, jarring and shaking of buildings, dust and
smoke incident to the running of trains. We were of opinion
that in the absence of negligence, no damages could be recov-
ered for the reason that the road was obliged to run its trains,
which could not be done, whatever the degree of caution
exercised, without the inconvenience and injuries enumerated.
Jan. 1906.] Townsend v. Norfolk Ry. etc. Co. 855
^® In Makely v. Southern Ry. Co., complaint was made
of the operation of trains of the defendant company, and of
a power-house maintained by it for the purpose of lighting
the various buildings in its yards. There was a bill praying
an injunction filed in the circuit court of Alexandria, which
the learned judge of that court refused, but without preju-
dice to the right of plaintiff to seek her remedy at law. There
was no question made as to the solvency of the railway com-
pany, or its ability to respond in any damages which might
be adjudged against it. We concurred with the judge of the
circuit court in the opinion that, at least in the preliminary
stages of the case, before the right had been established at
law, it would be improper to enjoin the defendant company.
And just here it may be proper to state that while upon a
petition for a writ of error or appeal, this court is required
to grant the writ prayed for unless the decision called in
question be plainly right, we should not overrule the decision
of the lower court and grant an injunction which it has re-
fused, unless the error in refusing it be manifest.
We have mentioned the Fisher case (102 Va. 363, 46 S.
E, 381), and the Makely case, not with any view to vindicat-
ing our consistency, but because we felt that it Avould be well
to clear up any doubt that might exist as to the attitude of
this court with respect to those decisions.
Coming back to the petition for rehearing, we find the posi-
tion of the petitioner thus stated: "The application of this
doctrine of 'private capacity* is wholly inconsistent with the
principles enunciated in the Fisher case (102 Va. 363, 46
S. E. 381). We think that the fact that the doctrine is
wholly erroneous can easily be demonstrated by stating it in
the form of a syllogism, thus :
"The injuries done to property without negligence by a
public service corporation, for which it will be held liable,
are those done by it in its private capacity.
■*• "All injuries done to property without negligence by a
public service corporation are done by it in its private capac-
ity (i. e, by the means and methods employed).
"Therefore, a public service corporation is liable for all
injuries to property done by it without negligence.
"The conclusion is manifestly incorrect, and at lea.st one
of the premises must therefore be erroneous. The second
856 American State Reports, Vol. 115. [Virginia,
premise we think we have demonstrated to be correctly
stated — that is, that injuries to property are the result of the
means and methods employed, and not of the public service
performed. The error lies, therefore, in the first premise.
"The vice in this premise, and the simple answer to the
various illustrations which we have given above, is dem-
onstrated by a statement of the true principle, which is that
a public service corporation, acting without negligence, is not
liable for injuries which are the necessary consequences of
the performance of its authorized functions. And we need
go no further in search for authority for this position than
the Fisher case (102 Va. 363, 46 S. E. 381), itself, where the
court, quoting from Pollock on Torts, said: *It is settled
that no action can be maintained for loss or inconvenience
which is the necessary consequence of an authorized thing be-
ing done in an authorized manner. ' ' '
We must again advert to the principle that all opinions
are to be considered in the light of the facts to which they
apply, for the transition from an authorized to an unauthor-
ized act — from that which is lawful to that which is unlaw-
ful— is oftentimes by easy and almost imperceptible grada-
tions, so that in the enunciation of a principle the eye must
always be kept upon the precise facts upon which it is to
operate.
Almost all the questions upon which the law is doubtful or
obscure arise at the vanishing point between contradictory
and irreconcilable principles, and mark the effort "to de-
duce harmony "** from the reciprocal struggle of discordant
powers. ' ' — Burke.
Law is not an exact science. It has no invariable stand-
ard by which rights may be measured. It does not submit
to inflexible rules of logic, nor can it, in its application to the
varied affairs of men, always clothe itself in the form of a
syllogism; and while we might hesitate to go to the full
length of the view expressed by the great moralist we have
just quoted, it is to a large extent true that "every human
benefit and enjoyment, every virtue and every prudent act,
is founded on compromise and barter."
We should not, therefore, have been disposed to abandon
our position, even though it had failed when subjected to the
syllogistic test; but we are not prepared to admit that the
test has been correctly applied. We do not admit the truth
Jan. 1906.] Townsend v. Norfolk Ry. etc. Co. 857
of the minor premise — we do not admit that all injuries done
to property without negligence, by public service corpora-
tions, are done by them in their private capacity.
All injuries done to property, without negligence, by a
public service corporation for which it will be held liable, it
may, perhaps, be conceded are done by it in its private capac-
ity; but there are injuries done by it in its public capacity
for which it will not be held liable, and in that distinction is
to be found the very gist of this controversy.
Nor can we concur in the answer which the petitioner sug-
gests to the illustrations which it had given. We cannot ad-
mit that a public service corporation, acting without negli-
gence, is, under all circumstances, irresponsible for injuries
which are the necessary consequence of the performance of
its authorized functions. There must be something more
than authority to do the act complained of. It must be an
act which the corporation is required to perform — a duty it
owes and which has been *^ imposed upon it by the legis-
lative act granting the charter by which it exists — or at
least it must appear that the particular act complained of
and immunity from its consequences were within the con-
templation of the legislature. It is true that in Pollock on
Torts, quoted in the Fisher case (102 Va. 363, 46 S. E. 3S1),
it is said that "no action can be maintained for loss or incon-
venience which is the necessary consequence of an authorized
thing being done in an authorized manner"; but Pollock
also says, in his second edition, at page 158: "A railway com-
pany is authorized to acquire land within specified limits,
and on any part of that land to erect workshops. This does
not justify the company, as against a particular householder,
in building workshops so situated (though within the author-
ized limits) that the smoke from them is a nuisance to him
in the occupation of his house. ' ' The two statements by the
same author are apparently opposed to each other, and yet
may be in entire harmony as applied to varying conditions
of facts.
In Managers of the Metropolitan A.sylum Dist. v. Hill,
[1880-81] 6 Alpp. Cas. 193, the metrojwlitan poor act. au-
thorizing the formation of districts and district a.sylinns for
the care and cure of sick and iiiMrin pdor, created corpora-
tions for that purpose, and gave authority to thr poor law
board to issue directions to these corporations, enabled thcni
858 American State Reports, Vol. 115. [Virginia,
to purchase lands and erect buildings for the purposes of the
act, and made the rates of parishes and unions liable for the
outlay thus incurred. But it does not by direct and impera-
tive provisions, order these things to be done, so that if, in
doing them, a nuisance is created to the injury of the health
or property of persons resident in the neighborhood of the
place where the land is purchased or the buildings erected,
it does not afford to these acts a statutory protection. And,
therefore, where such nuisance was found as a fact, it was
held that the district board ^^ could not set up the statute,
nor the orders of the poor law board under it, as an answer
to an action, or to prevent an injunction issuing to restrain
the board from continuing the nuisance; and in continuing
his opinion Lord Blackburn states this principle: "On those
who seek to establish that the legislature intended to take
away the private rights of individuals, lies the burden of
showing that such an intention appears by express words or
necessary implication." And per Lord Watson it was said:
"Where the terms of a statute are not imperative, but per-
missive, the fair inference is that the legislature intended
that the discretion, as to the use of the general powers there-
by conferred should be exercised in strict conformity with
private rights. ' ' '
That case finely illustrates the effect of a statute merely
permissive in its terms.
In London etc. Ry. Co. v. Truman, L. R. 11 App. Cas. 45,
a railway company was authorized, among other things, to
carry cattle, and to purchase by agreement, in addition to
the lands which they were empowered to purchase cora-
pulsorily, any lands not exceeding in the whole fifty acres,
in such places as should be deemed eligible, for the purpose
of providing additional stations, yards, and other conveniences
for receiving, loading, or keeping any cattle, goods, or things
conveyed or intended to be conveyed by the railway, or for
making convenient roads or ways thereto, or for any other
purposes connected with the undertaking which the com-
pany should judge requisite. The company were also em-
powered to sell such additional lands and to purchase in lieu
thereof other lands which they should deem more eligible
for the aforesaid purposes, and so on from time to time. The
act contained no provision for compensation in respect of
lands so purchased by agreement. Under this power the com-
Jan. 1906.] Townsend v. Norfolk Ry. etc. Co. 859
pany, some years after ** the expiration of the compulsory
powers, bought land adjoining one of their stations and
used it as a yard or dock for their cattle traffic. To the oc-
cupiers of houses near the station the noise of the cattle and
drovers was a nuisance which, but for the act, would have
been actionable. There was no negligence in the mode in
which the company conducted the business. Held, that the
purpose for which the land was acquired being expressly au-
thorized by the act, and being incidental and necessary to
the authorized use of the railway for the cattle traffic, the
company were authorized to do what they did, and were not
bound to choose a site more convenient to other persons ; and
that the adjoining occupiers were not entitled to an injunc-
tion to restrain the company, distinguishing between the case
of Metropolitan Asylum Dist. v. Hill, just cited. Among
those who delivered opinions in this case was Lord Blackburn,
from whom we have just quoted, who says, in part: "I do
not think there can be any doubt that if on the true con-
struction of a statute it appears to be the intention of the
legislature that powers should be exercised, the proper exer-
cise of which may occasion a nuisance to the owners of neigh-
boring land, and that this should be free from liability to an
action for damages, or an injunction to prevent the con-
tinued proper exercise of these powers, effect must be given
to the intention of the legislature," again resting the case
upon a proper construction of the act of incorporation. In
this case the house of lords reversed the decisions of the
court of appeal, and of North, J., which is to be found in
25 Ch. D. 426. It undertakes to distinguish, while it does
not overrule. Metropolitan Asylum Dist. v. Hill, 6 App. Cas.
193 , and seems to rest upon the express terms of the act of
parliament under consideration. It is at most merely per-
suasive authority, and if it decides that a merely permissive
authority from the legislature confers complete immunity
*** from acts which constitute a nuisance, if not negligently
performed, it would be irreconcilable with other English
cases of high authority — indeed of equal authority with it-
self— with the decisions of the supreme court of the United
States, and with those of state courts, to which we shall
presently advert.
In Cogswell v. New York R. R. Co., 103 N. Y. 10, 57 Am.
Eep. 701, 8 N. E. 537, the syllabus is as follows: "Whether
860 American State Reports, Vol. 115, [Virginia,
the legislature can authorize a railroad corporation to main-
tain an engine-house, under circumstances which, if main-
tained by an individual, would, by the common law, consti-
tute a nuisance to private property without providing com-
pensation, quaere^
"But if this should be conceded, nevertheless the statu-
tory sanction which will justify an injury by a railroad cor-
poration to private property without making compensation
therefor, and without the consent of the owner, must be ex-
press or given by clear and unquestionable implication from
the powers expressly conferred, so that it can fairly be said
that the legislature contemplated the doing of the very act
which occasioned the injury; it may not be presumed from
a general grant of authority.
''Where the terms of d. statute giving authority to such a
corporation are not imperative, but permissive, this does not
confer license to commit a nuisance, although what is con-
templated by the statute cannot be done without."
In Bohan v. Port Jervis Gaslight Co., 122 N. Y. 18, 25 N.
E. 246, 9 L. R. A. 711, it is said that "although the acts com-
plained of are inseparably connected with the carrying on of
the business itself, and the resulting damages a necessary
consequence, if those acts constitute a nuisance per se, it is
not necessary to show negligence in order to sustain a re-
covery.
46 "Every person is bound to make a reasonable use of
his property, having respect for his neighbor's right; a use
which produces destructive vapors and noxious smells, re-
sulting in material injury to the property and the comfort
of those dwelling in the neighborhood, is not reasonable, and
is a nuisance per se.
"As a general rule, corporations authorized by statute to
carry on a business, although it may be of a quasi public
character, are under the same obligations to make a rea-
sonable use of their property and to respect the rights of
others as are citizens.
"While the legislature may authorize acts, which would
otherwise be a nuisance, when they affect or relate to mat-
ters in which the public have an interest or over which
they have control, the statutory authority which affords im-
munity for such acts must be express, or a clear and un-
questionable implication from powers expressly conferred,
Jan. 1906 ] Townsend v. Norfolk Ry. etc. Co. 861
and it must appear that the legislature contemplated the
doing of the very act which occasioned the injury."
This whole subject is considered, by the supreme court of
the United States in Baltimore etc. R. Co. v. Fifth Bapt.
Church, 108 U. S. 317, 2 Sup. Ct. Rep. 719, 27 L. ed. 739,
which was decided in 1883, and has met with general ap-
proval. The Baltimore and Potomac Railroad Company
was authorized by act of Congress to lay its track within the
limits of the city of Washington, and to construct other
works necessary and expedient to the proper completion and
maintenance of its road. It erected an engine-house and
machine-shop on a parcel of land immediately adjoining
the church, and used them in such a way as to disturb, on
Sundays and other days, the congregation assembled in the
church, to interfere with religious exercises therein, break
up its Sunday schools, and destroy the value of the building
as a place of public worship. Suit was brought against the
railroad company to recover damages, and among "^"^ other
defenses the company relied upon statutory authority;
and its counsel undertook to maintain that "no action will
lie and no recovery can be had for doing that which the
law authorizes the party to do, and that cannot be adjudged
a nuisance and be held unlawful which the law declares to
be lawful." Answering that contention, Mr. Justice Field
says: "The authority of the company to construct such
works as it might deem necessary and expedient for the com-
pletion and maintenance of its road did not authorize it to
place them wherever it might think proper in the city, with-
out reference to the property and rights of others. As well
might it be contended that the act permitted it to place thera
immediately in front of the President's hrouse or of the
Capitol, or in the most densely populated locality. Indeed,
the corporation does not aasert a right to place its works
upon property it may flcquire anywhere in the city. What-
ever the extent of the authority conferred, it was accom-
panied with this implied qualification, that the works should
not be so placed as by their use to unreasonably interfere
with and disturb the peaceful and comfortai)le enjoyment
of others in their property. (Jrants of privileges or powers
to corporate bodies, like those in question, confer no license
to use them in disregard of the private rights of others, and
with immunity for their invasion. The great principle of
862 American State Reports, Vol. 115. [Virginia,
the common law, which is equally the teaching of Christian
morality, so to use one's property as not to injure others,
forbids any other application or use of the rights and powers
conferred.
"Undoubtedly, a railway over the public highways of the
District, including the streets of the city of Washington,
may be authorized by Congress, and if, when used with rea-
sonable care, it produces only that incidental inconvenience
which unavoidably follows the additional occupation of the
streets by its cars with the noises and disturbances neces-
sarily attending their *® use, no one can complain that he
is incommoded. Whatever consequential annoyance may
necessarily follow from the running of cars on the road with
reasonable care is damnum absque injuria. The private in-
convenience in such case must be suffered for the public ac-
commodation. * *
It is said in the petition that the latter part of this quota-
tion is a dictunL We hardly think so; but even if it were,
it is the dictum of a judge whose great ability entitles his
every utterance to the highest respect, and is sanctioned by
the concurrence of the entire court. We may safely con-
sider that opinion as expressing the fixed views of the su-
preme court of the United States upon the questions dis-
cussed.
The legislative authority relied upon in this case (Acts
1897-98, pp. 495, 1020, respectively) is as follows:
At section 2, page 496, occurs the following language:
"The said company shall have power to construct, lease, pur-
chase or acquire by consolidation with any other company or
companies, and operate and maintain in the city or county
of Norfolk, or both, and in any other city, town or village in
the said county, suitable works, machinery and plants for
the manufacture of electricity, and for the sale and distri-
bution of the same; and it shall have power to sell and dis-
tribute the same for public and private illumination, for
heating, for power and for any other purposes which the
same may be used for, and it shall have power to do such
acts and things, and conduct such enterprises as are con-
venient in connection with or incidental to the enjoyment
of the powers hereinabove conferred, and may, with the con-
sent of the proper authorities of the city of Norfolk, and of
such other city, or town, or county as are named above, use
Jan. 1906.] Townsend v. Norfolk Ry. etc. Co. 863
the streets and roads thereof for laying its mains, pipes and
wires and erecting its poles."
And at section 3, page 1020, it is declared that "The said
company is authorized to promote, establish and maintain
the business ^® of a general railway and electrical company.
To erect, maintain and operate plants in this state for the
generation of electricity and the supply of electric cur-
rent for its own use and for sale to persons, natural or
artificial," etc.
In these quotations is found the sole authority of the de-
fendant, to permit or to require, to excuse or to justify it
in the performance of the acts complained of in this suit.
The case is, therefore, plainly to be classed with Baltimore
etc. R. Co. V. Fifth Bapt. Church, 108 U. S. 317, 2 Sup. Ct.
Rep. 719, 27 L. ed. 739, and other cases which we have cited,
in which the effect of legislative authority has been dis-
cussed. It will be seen that the language is not imperative,
but permissive, and that it does not confer statutory sanction
for the commission of a nuisance in any way whatever, and
most assuredly cannot be said to confer it in express terms,
"or by clear and unquestionable implication from the powers
given," so that it cannot be fairly said that "the legislature
contemplated the doing of the very act which occasioned the
injury, and immunity is not to be presumed from a general
grant of authority."
But it is said that the decision in this ease, if permitted to
stand, will "practically debar the use of many of the most
important and developing features of our modern growth."
It would be a source of regret if, in the administration of
justice by the establishment and enforcement of sound prin-
ciples, the prosperity of our people should be hindered or
checked, but it would be not only a source of regret, but of
reproach, if material prosperity were stimulated and en-
couraged by a refusal to give to every citizen a remetly for
wrongs he may sustain, even though inflicted by forces
which constitute factors in our material development and
growth. Courts have no policies, and cannot permit conse-
quences to influence their judgments further than to serve
as warnings and incentives to thorough *® investigation and
careful consideration of the causes submitted to them,
Those duties being faithfully performed, courts may await
the result with patience, if not always with confidence, and
864 American State Reports, Vol. 115. [Virginia,
say with the great Lord Mansfield, "Fiat justitia, . ruat
eoelum. "
Reversed.
Rehearing denied.
The Question of What Constitutes a Puhlic Nuisance is discusaed at
length in the note to Acme Fertilizer Co. v. State, 107 Am. St. Eep.
195.
TIDEWATER QUARRY COMPANY v. SCOTT.
[105 Va. 160, 52 S. E. 835.]
CONVERSION — Remedies. — An owner may maintain an action
of tort to recover damages for the conversion of his property, or he
may treat the conversion as a sale and bring indebitatus assumpsit
for its value, (pp. 865, 866.)
SETOFF. — Damages Readily ascertainable by calculation or
computation may be set off against a liquidated demand, (p. 866.)
SETOFF — What Constitutes. — It is not necessary, to constitute
a valid setoff, that a price should be agreed upon for an article sold
and delivered, (p. 866.)
SETOFF, When Allowed. — If indebitatus assumpsit can be
maintajned for the value of property converted, such value may be
allowed as a setoff, (p. 867.)
SETOFF — Liquidated Demand. — In an action at law for a liqui-
dated demand, the defendant may set off the value of goods belong-
ing to him which the plaintiff has tortiously converted to his own
use. (p. 867.)
BILL OF PARTICULARS — Sufficiency. — A statement of par-
ticulars is sufficient if it fairly and plainly gives notice to the adverse
party of a cause of action or defense not sufficiently described in the
notice, declaration or other pleading, (pp. 867, 868.)
R. R. Hicks, for the plaintiff in error.
E. R. Baird, for the defendant in error.
*** HARRISON, J. Two questions are raised by this
record: 1. Can a defendant in an action at law set off
against a liquidated demand the value of goods belonging to
the defendant, which have been converted by the plaintiff
to his own use ? And 2. If the value of such goods can be set
off, are the items of offset so described in the statement of de-
fense as to entitle the defendant to prove them?
March, 1906.] Tidewater Quarry Co. v. Scott. 865
The plaintiff Scott brought an action of assumpsit against
the defendant quarry company to recover a sum alleged to
be due on a note, and a balance due on open account.
The defendant filed a plea of nonassumpsit and a notice of
setoff. The items of the account of offsets that are called in
question were stated by the defendant in his account filed as
follows :
450 tons of crushed stone, sold to Charles E.
Scott, at fifty cents per ton $225 00
300 tons of crushed stone, sold to same, at
fifteen cents per ton 45 00
There barrels of grease and oil, sold to same . 60 00
Seven cases of dynamite sold to same 49 00
One carload of coal, sold to same 200 00
Upon the trial the defendant, to sustain these items of off-
set, introduced a witness to show that the goods mentioned
*** were upon the premises of the defendant company at
the time the plaintiff took possession thereof under a lease;
that the goods were worth in the aggregate five hundred and
seventy-nine dollars; and that the plaintiff had taken pos-
session of them, and converted them to his own use. The
plaintiff objected to the introduction of this evidence upon
the ground that it tended to establish a claim for damages
that could not be set off in this suit, and upon the further
ground that it related to matters not sufficiently described in
the statement of defense.
We are of opinion that it was error to sustain the objec-
tion on either of the grounds mentioned.
Section 3298 of the Virginia Code of 1904 provides that
**In a suit for any debt, the defendant may, at the trial
prove and have allowed against such debt any payment or
setoff which is so described in his plea, or in an account filed
therewith, as to give the plaintiff notice of its nature, but not
otherwise. ' '
This court has held that this statute should be liberally
construed, with a view to the fiirthcrunce of its obvious pol-
icy, which is to prevent a multiplicity of suit.s, and as far as
conveniently can be done to effectuate in one action complete
justice between the parties: Ali<'n v. Hart, 18 Gratt. 722.
For the conversion of its property by the plaintiff, an
action of tort to recover (himages could have been brought
Am. St. Rep., Vol. 11.'5— 55
866 American State Reports, Vol. 115. [Virginia,
by the defendant. This mode of redress, however, the de-
fendant had the right to waive, and to bring indebitatus
assumpsit for the value of the goods. The law will imply a
contract to pay for property belonging to the defendant
which has been taken possession of by the plaintiff and con-
verted to his own use.
The plaintiff insists that the items of setoff which are
sought to be established by the defendant constitute an un-
liquidated demand, which cannot be set off in an action at
law against a liquidated demand.
*^* It is well settled that uncertain, unliquidated damages
cannot be set off to a demand certain. But what are certain,
unliquidated damages?
In Butt V. Collins, 13 Wend. (N. Y.) 139, 156-157, it is
said: "They are such as rest in opinion only, and must be
ascertained by a jury, their verdict being regulated by the
peculiar circumstances of each particular case; they are
damages which cannot be ascertained by computation or cal-
culation— as, for instance, damages for not using a farm in
a workmanlike manner; for not building a house in a good
and sufficient manner; on a warranty in the sale^of a horse;
for not skillfully amputating a limb ; for carelessly upsetting
a stage, by which a bone is broken; for not making repairs
to a dwelling-house; for unskillfuUy working the raw ma-
terials into a fabric; and other cases of like character, where
the amount to be settled rests in the discretion, judgment or
opinion of the jury : Hewlet v. Strickland, 1 Cowp. 56 ; Free-
man V. Hyatt, 1 W. Black. 394; Weigall v. Waters, 6 Term
Rep. 488; Livingston v. Livingston, 4 Johns Ch. (N, Y.)
287, 8 Am. Dec. 562; Hepburn v. Hoag, 6 Cow. (N. Y.) 613.
In these and like cases there is no data given for computa-
tion ; nor can the damages be ascertained by any mode of cal-
culation. It is otherwise as to the amount due on a note, or
on a merchant's account, or for work, labor and services, or
for a yard, a piece or a bale of flannel ; the damages in such
cases can be readily ascertained by calculation": Barbour on
Setoff, 82.
In Waterman on Setoff, section 286, it is said: "It is not
necessary, in order to constitute a valid setoff, that a price
should be agreed upon for an article sold and delivered.
Therefore, a demand for the value of corn delivered may be
set off, though the price of the com had not been agreed on.
March, 1906.] Tidewater Quarry Co. v. Scott. 867
The fact that the price had not been agreed on did not make
it a case *®^ of unliquidated damages, within the sense in
which these terms have been used in expounding the English
statutes. The defendants' demand was for money, the value
of the com. For its recovery indebitatus assumpsit could be
maintained, and this furnishes a test in favor of its allow-
ances as a setoff": Smith v. Huie, 14 Ala. 201; Gunn's
Admr. v. Todd, 21 Mo. 303, 64 Am. Dec. 231; Norden v.
Jones, 33 Wis. 600, 14 Am. Rep. 782; Raysdale v. Buford's
Exrs., 3 Haj-w. (Tenn.) 192; Hill v. Perrott, 3 Taunt. 274;
Allen V. United States, 17 Wall. 207, 21 L. ed. 533 ; 5 Robin-
son's Pratice, 964, 965; Wait on Actions and Defenses, 482-
484 ; 2 Sedgwick on Damages, 368.
In the light of these authorities the defendant had the right
to waive its action for damages against the plaintiff for his
tortious act in converting the property of the defendant to
his own use, and to bring indebitatus assumpsit for the value
of the goods appropriated and, therefore, had the right to
offset the plaintiff's demand with the value of such goods.
Setoffs are to be encouraged ; they lessen the amount of litiga-
tion by preventing circuity of action. There is no reason or
propriety in driving these parties to cross-actions and to com-
pel the claims to be settled in two suits, when full and equal
justice can be awarded to each of them in one suit.
We are further of opinion that the contention that the de-
fendant's demand is not stated with sufficient clearness in its
statement of defense cannot be sustained. The defendant,
as it had a right to do, chose to treat the plaintiff as a pur-
chaser of the property he had converted to his use and to sue
for its value. Each item is described with particularity as
property sold to the plaintiff, and the form and substance of
this statement of defense could not fail to furnish the plain-
tiff with adequate notice of the defense that would be made
on the trial.
^*** The object of the statute (section 3249 of the Code)
was simply to give the plaintiff more particular information
of the ground of defen.se than is generally disclosed by a
plea, so as to enable the parties to prepare more intelligently
for the trial, and to prevent surprises which may and often
do result in injustice. But such statement does not consti-
tute the issue to be tried, and it was not intonded that the
particulars of the claim, or the ground of defense, should be
868 American State Reports, Vol. 115, [Virginia,
set forth with the formality or precision of a declaration or
plea, but only in such manner, however informal, as would
fairly and plainly give notice to the adverse party of its
character when the same was not so described in the notice,
declai-ation or other pleading : Columbia Ace. Assn. v. Rockey,
93 Va. 678, 25 S. E. 1009.
For these reasons the judgment complained of must be re-
versed, and the case remanded for a new trial in conformity
with the views expressed in this opinion.
Setof as a Matter of Bight did not exist at the common law, but
is a creature of statute, which cannot, it has been held, be construed
to meet cases not specially included in its terms: Drennen v. Gilmore,
132 Ala. 246, 90 Am. St. Rep. 902; Bradley v. Smith, 98 Mich. 449,
39 Am. St. Rep. 565. Statutes authorizing counterclaims should be
construed liberally: First Nat. Bank v. Parker, 28 Wash. 234, 92
Am. St. Rep. 828; McHard v. Williams, 8 S. Dak. 381, 59 Am. St.
Eep. 766.
Unliquidated Damages are not a Subject of Setoff: Smith v. Wash-
ington G. Co., 31 Md. 12, 100 Am. Dec. 49; Rice v. Sanders, 152 Mass.
108, 23 Am. St. Rep. 804. However, the value of a note received for
collection and converted is a subject of setoff, and is not unliqui-
dated damages: Gunn v. Todd, 21 Mo. 303, 64 Am. Dec. 23L
NEWPORT NEWS AND OLD POINT RAILWAY AND
ELECTRIC COMPANY v. CLARK.
[105 Va. 205, 52 S. E. 1010.]
NEGLIGENCE — Obstructing Sidewalk. — If a street railway
company, as a warning to the public, stretches a rope across the side-
walk in plain view while it is repairing its poles placed inside the
curbing, and a child between nine and ten years of age runs against
such rope, sustaining fatal injury, the company is not guilty of
negligence per se, and there can be no recovery against it, since the
accident is one that could not reasonably have been expected, (pp.
869, 870.)
S. G. Cumming, for the plaintiff in error.
O. D. Batchelor and W. H. Power, for the defendant in
error.
20C WHITTLE, J. The circumstances leading up to the
accident which terminated in the death of plaintiff in error's
intestate are as follows:
March, 1906.] Newport News etc. Ry. Co. v. Cl.vrk. 860
In compliance with the requirement of the municipal au-
thorities, the plaintiff in error had removed its poles inside
the curb line of the sidewalk along Malloiy street, in the town
of Phoebus. Subsequently, on the morning of the accident,
while the company's linemen were engaged in repairing and
stringing wires on the poles, by its order, a rope three-fourths
of an inch in diameter was stretched across the sidewalk, one
end of which was attached to the blind hinge of a building
and the other to one of the company's poles about four feet
above the surface of the pavement. The object in erecting
this barrier was to warn pedestrians not to pass under the
poles on which the men were at work, and thus to protect them
from molten lead used in repairing wires, and from tools car-
ried up on the poles by the linemen, which were liable to fall
upon and injure persons passing along the sidewalk beneath.
Between 8 and 9 o'clock in the morning, shortly after the
rope had been adjusted, plaintiff's intestate, a girl between
nine and ten years of age, while running with a companion
on her way to school, came in contact with the rope, which
passed under her chin, and she was thrown backward upon
the pavement, sustaining injuries from which she died two
days after the accident.
The jury found a verdict for the plaintiff, upon which the
judgment under review was rendered.
From this outline of the salieftt facts of the case it is obvi-
ous that the plaintiff has failed to establish actionable negli-
gence on the part of the defendant. Though it involved a
temporary obstruction of the sidewalk at the time of the acci-
dent, the company was engaged in lawful business; indeed it
was discharging ^^"^ a duty imposed upon it by the town au-
thorities. The work was attended with some danger to those
who might pass along and use the sidewalk at that point, and
the law devolved upon the company the duty of exercising
ordinary care for their protection : Elliott on Roads and
Streets, 2d ed., sec. 717; Smith's Modern Law of Municipal
Corporations, sec. 1310g; Nolan v. King, 97 N. Y. 565, 49
Am. Rep. 561.
The instrumentality (a three-(iuarter rope) employed for
the purpose of warning the public was not per se a dangerous
appliance. It was manifest to the ordinary observer and, in
the light of experience, the accident which befell the child
could not reasonably have been anticipated. The uncontra-
870 American State Reports, Vol, 115. [Virginia,
dieted evidence and collective experience of all the witnesses
who testified on the subject is that they had never known or
heard of such an accident before.
In the case of Sjogren v. Hall, 53 Mich. 274, 278, 18 N. W.
812, Judge Cooley observes: "The fact that it [the accident]
was avoidable does not prove that there was fault in not antici-
pating and providing against it If a farm laborer falls
from the hay mow, the fall does not demonstrate that the
farmer was culpable for not railing the mow in. A man
stumbling in a blacksmith-shop might have his hand or even
his head thrown under the trip-hammer, but it would not
follow that there had been any neglect of duty on the part of
the blacksmith in leaving the hammer exposed. So far as
as there is a duty resting upon the proprietor in any of these
cases, it is a duty to guard against probable dangers; and it
does not go to the extent of requiring him to render accidental
injury impossible If the fact that prevention was possi-
ble is to render the employer liable, then he may as well be
made an insurer of the safety of those in his service in express
terms, for to all intents and purposes he would in law be
insurer, whether nominally so or not."
^®® It plainly appears that the instruction of the court and
verdict of the jury were founded upon a misapprehension of
the evidence of a single expert witness, who testified that in
addition to stretching a rope across the sidewalk, it was custo-
mary to station a guard there also to warn the public. But
the warning contemplated by the witness was manifestly
against the danger of walking under the poles where the men
were at work and being struck and injured by falling sub-
stances, and not the remote contingency of injury from contact
with a rope plainly visibly to anyone using ordinary care for
his own safety.
In view of the lack of evidence to sustain the verdict in any
aspect of the case, it is not deemed necessary to notice the
remaining assignments of error.
The judgment must be reversed, and the case remanded for
a new trial.
Negligence is the Absence of Care under the circumstances: Kinter
V. Pennsylvania E. B. Co., 204 Pa. 497, 93 Am. St. Kep. 795; Morris
V. Brown, 111 N. Y. 318, 7 Am. St. Rep. 751. It is a failure to ex-
ercise such reasonable care as would be exercised by a person of or-
dinary prudence under the circumstances: Tully v. Philadelphia etc.
E. R. Co., 2 Penne. (Del.) 537, 82 Am. St. Rep. 425; Brotherton v.
March, 1906.] Walker v. Potomac etc. R. R. Co. 871
Manhattan Beach Imp. Co., 48 Neb. 563, 58 Am. St. Rep. 709; Harker
V. Burlington etc. Ry. Co., 88 Iowa, 409, 45 Am. St. Rep. 242. It is
no more than the failure to observe, for the protection of another per-
son, that degree of care, precaution and vigilance which the circum-
stances demand, whereby such other person is injured: Barrett v. South-
ern Pac. Co., 9 Cal. 296, 25 Am. St. Rep. 186. Negligence is a relative
term: Kelly v. Michigan Cent. R. R. Co., 65 Mich. 186, 8 Am. St. Rep.
876; Hayes v. Gainesville etc. Ry. Co., 70 Tex. 602, 8 Am. St. Rep.
624. It will not be imputed to one who takes all the care wjiich
prudent circumspection suggests to avoid an in.iurv: Sullivan v. Vicks-
burg etc. R. R. Co., 39 La. Ann, 800, 4 Am, St. Rep. 239.
WALKER V. POTOMAC, FREDERICKSBURG AND
PIEDMONT RAILROAD COMPANY.
[105 Va. 226, 53 S. E. 113.]
RAILROADS — Turntables. — A railroad company is not liable
for an injury inflicted on a trespassing infant of tender years by
an unlocked and uninclosed turntable on its premises in an open and
unoccupied field some distance from the public highway, (p. 872.)
TRESPASSERS — Liability for Injury to. — A land owner does
not owe to a trespasser, whether adult or infant, the duty of hav-
ing his land in a safe condition for such trespasser to enter upon. He
assumes the risks of the condition of the land, and ordinarily has
no remedy for harm happening to him. (pp. 872, 873.)
TRESPASSERS — Duty to. — A land owner owes no duty to a
trespasser, adult or infant, except that he must not wantonly or in-
tentionally injure him or expose him to danger, (p. 873.)
RAILROADS — Turntables. — The fact that an unfastened rail-
road turntable located on unoccupied land belonging to the railroad
company is attractive to trespassing infants does not render the com-
pany liable for injury to th«m while playing with such turntable,
nor does the maxim "Sic utere tuo ut alienum non laedas" apply in
such case. (p. 877.)
TURNTABLE CASES. — Doctrine of turntable cases disap-
proved and rejected, (p. 877.)
Morton & Shackelford and Meredith & Cocke, for the plain-
tiflP.
St. George, R. Fitzhugh and J. G. Williams, for the de-
fendant in error.
**^ BUCHANAN, J. This action was instituted by the
plaintiff in error against the defendant cnnipany to recov«'r
damages for the death of the intestate, caused by the alleged
negligence of the defendant.
872 American State Reports, Vol. 115. [Virginia,
The evidence shows that the defendant has a turntable on
its own premises near Orange courthouse, located about two
hundred and twenty feet from its station or depot; about
three hundred and sixty feet from the public road which
runs from the depot to the village of Orange courthouse ; close
by a mill-road, which is not public; fifty or sixty feet from
what is known as the horse-show grounds ; about three hundred
and forty feet from any inhabited house ; and in an open and
unoccupied field; that boys were in the habit of playing ball
on the horse-show grounds, between which and the railway
land there was no fence; that boys frequently rode on the
turntable, and had once been seen riding on it by the depot
agent ; that some years before the accident two boys had been
injured in playing with the turntable, which was of the or-
dinary kind in use, and was neither locked nor fastened;
that on the Sunday evening of the accident the plaintiff's
intestate, who was a little over twelve years of age, with two
other boys of about the same age, was pushing the turntable
around the track preparing to jump on it, and as he did so
one of his feet was caught between the rails and mashed,
causing lockjaw, from the effects of which he died.
Upon the trial of the cause there was a verdict and judg-
ment in favor of the defendant. To that judgment this writ
of error was awarded.
The only question involved in this writ of error is whether
or not, under the facts of the case, which are not disputed, the
defendant was guilty of negligence in leaving the turntable in
the place where it was, on its own premises, unfenced and un-
fastened.
*^® The general rule is that a land owner does not owe to
a trespasser (and the same is true of a bare licensee) the duty
of having his land in a safe condition for a trespasser to enter
upon. The latter has ordinarily no remedy for harm hap-
pening to him from the nature of the property upon which he
intrudes, and he takes upon himself the risks of the condition
of the land, and to recover for an injury happening to him
be must show that it was wantonly inflicted, or that the owner
or occupant being present could have prevented the injury by
the exercise of ordinary care after discovering the danger:
Norfolk etc. Ry. Co. v. Wood, 99 Va. 156, 37 S. E. 846 ; Hor-
tenstein v. Virginia-Carolina Ry. Co., 102 Va. 914, 47 S. E.
996; Williamson v. Southern Ry. Co., 104 Va. 146, 51 S. E.
March, 1906.] • Walker v. Potomac etc. R. R. Co. 873
195, 70 L. R. A. 1007 ; Bishop on Noncontract Law, sec. 845 ;
Cooley on Torts, 2d ed., 791-794.
It is not denied, as we understand the counsel for the plain-
tiff, that such is the common-law doctrine as to adult tres-
passers and bare licensees; but his contention is that, under
certain circumstances, such as are disclosed by this record,
it is not the rule as applied to children. To sustain that con-
tention he relies upon the case of Sioux City R. Co. v. Stout,
17 Wall. 657, 21 L. ed. 745, and the cases which follow it.
While these cases, which are known as "The Turntable
Cases," fully sustain the plaintiff's contention, there is a
remarkable conflict of authority upon the subject. The doc-
trine announced in the Stout case (17 Wall. 657, 21 L. ed.
745), has been discussed in numerous cases by the appellate
courts of many of the states of this country, with the result
that there are many authorities sustaining the doctrine in its
broadest sense; while many utterly repudiate it, and others
give it a qualified recognition and practically limit it to rail-
road turntable cases. A question or problem which has given
rise to such a wide divergence of opinion is not of easy solu-
tion.
^*® As this is the first case involving this precise question
which has ever come to this court, so far as the reported
decisions show, we are at liberty to follow that line of de-
cisions which, in our judgment, is more nearly in accord with
settled principles of law and is sustained by the better reason.
In order for the plaintiff to recover in this case it must ap-
pear that the defendant company owed his intestate some
duty which it had failed to discharge; for where there is no
duty there can be no negligence: Norfolk etc. Ry. Co. v. Wood,
99 Va. 156, 37 S. E. 846; Hortenstein v. Virginia-Carolina
Ry. Co., 102 Va. 914, 47 S. E. 996 ; Carson Lime Co v. Ruther-
ford, 102 Va. 244, 46 S. E. 304.
As before stated, the common law imposes no duty upon a
land owner to use care to keep his premises in such condition
that trespassers and bare licensees going thereon may not be
injured. This is unquestionably the rule as to adults, and
the weight of authority, as it seems to us, shows that it is the
rule as to children.
The ca.ses cited in the case of Sioux City R. Co. v. Stout,
17 Wall. 657. 21 L. ed. 745, to sustain the opposite view, do
not, as it seems to us, do so. Those cases come within other
874 American State Reports, Vol. 115. [Virginia,
rules, or within well-defined exceptions to the general rule
that a land owner owes no duty to a trespasser, adult or
infant, except that he must not wantonly or intentionally in-
jure him or expose him to danger. This is clearly shown, we
think, by the supreme judicial court of Massachusetts, in the
ease of Daniels v. New York etc. R. Co., 154 Mass. 349, 26
Am. St. Rep. 253, 28 N. E. 283, 13 L. R. A. 248, and by
Judge Peckham (now of the supreme court of the United
States), in delivering the opinion of the court of appeals of
New York, in Walsh v. Fitchburg etc. R. Co., 145 N. Y. 301,
45 Am. St. Rep. 615, 39 N. E. 1068, 27 L. R. A. 724.
The conclusion reached in those cases is fully sustained by
^^** the following cases (and many more might be cited),
which are all ** Turntable Cases," or cases in which the doc-
trine of those cases was involved: Frost v. Eastern R. Co.,
64 N. H. 220, 10 Am. Rep. 396, 9 Atl. 790 ; Delaware etc. Ry.
Co. V. Reich, 61 N. J. L. 635, 68 Am. St. Rep. 727, 40 Atl. 682,
41 L. R. A. 837; Uttermohlen v. Boggs Run etc. Co., 50 W.
Va. 457, 88 Am. St. Rep. 884, 40 S. E. 410, 55 L. R. A. 911;
Ryan v. Tower, 128 Mich. 463, 92 Am. St. Rep. 481, 87 N. W.
644, 55 L. R. A. 310 ; Paolino v. McKendall, 24 R. I. 432, 96
Am. St. Rep. 736, 53 Atl. 268, 60 L. R. A. 133 ; Dobbins v.
Missouri etc. Ry. Co., 91 Tex. 60, 66 Am. St. Rep. 856, 41 S. W.
62, 38 L. R. A. 573; Savannah etc. Ry. Co. v. Beavers, 113
Ga. 398, 39 S. E. 82, 54 L. R. A. 314.
The same conclusion was reached by this court in Clark v.
City of Richmond, 83 Va. 355, 5 Am. St. Rep. 281, 5 S. E.
369. The city had made an excavation upon the land of
another, into which a child of six years fell and was injured.
In denying the child the right to recover in that case it was
said that where the excavation is so near the highway that a
traveler, by making a false step, or being affected by sudden
giddiness, might be thrown into the excavation and injured,
there would be a liability. "But if, in order to reach the
place of danger, the party injured must become a trespasser
upon the premises of another, the case will be different, for
in such a case there is no breach of duty from which the
liability to respond in damages can result."
But in some of the "Turntable Cases" the right to recover
is maintained upon the doctrine of constructive invitation —
that is, that if a person is allured, or tempted by some act of
a railroad company to enter upon its lands, he is not a tres-
March, 1906.] Walker v. Potomac etc. R. R. Co. 875
passer ; and it is held that leaving a turntable unfastened or
unguarded, under circumstances similar to those disclosed by
this record is such an act.
*^* One of the cases cited and relied on to sustain this con-
tention is the case of Bird v. Holbrook, 4 Bing. 628. The de-
fendant in that case, for the protection of his property, some
of which had been stolen, set a spring-gun, without notice,
in a walled garden some distance from his house. The plain-
tiff, who climbed over the wall in pursuit of a stray fowl,
having been injured, it was held that the land owner was
liable. The express object in setting the spring-gun was to
inflict injury — to do an intentional wrong.
Another case relied on is that of Townsend v. Wathen, 9
East, 277. That was a case where a land owner had set
traps on his premises near the highway, and baited them with
decaying meat, so that its scent would extend not only to the
highway, but beyond to the private premises of the plaintiff,
whose dogs, scenting the meat, came upon the defendant's
premises and were caught in a trap and thereby killed. It
was held in that case that a man had no right to set traps
of a dangerous description in a situation to invite, and for
the very purpose of inviting, his neighbor's dogs, as it would
compel them by their instinct to come into his traps. The act
of the defendant in that ca.se was not in the prosecution of
his legitimate business, but as the court said, was a mere mali-
cious attempt, successful in its result, to entice his neighbor's
animals upon his premises.
The gravamen of both these actions was the wrongful in-
tention of the defendants. To liken the case of a railroad
company erecting a turntable on its own premises for its own
necessary purposes in the regular conduct of its business,
with no desire or intention to injure anyone, to the ca.se of a
land owner setting spring-guns or traps on his land for the
express purpose of doing an unlawful or malicious injury, is,
as it seems to us, to lose sight of the difference between negli-
gence and intentional wrongdoing: Walsh v. Fitchbiirg etc.
R. Co., 145 N. Y. 301, 45 Am. St. Rep. 615, 39 N. E. 1068. 27
L. R. A. 724; Dobbins v. Missouri '^'^^^ etc. Ry. Co., 91 Tex.
60, 66 Am. St. Rep. 856, 41 S. W. 62, 38 L. R. A. 573.
"The viciousness of the reasoning," said the court of ap-
peals of New Jersey, in the case of Delaware etc R. Co. v.
Reich, 61 N. J. L. 635, 68 Am. St. Rep. 727, 40 Atl. 682, 41
876 American State Reports, Vol. 115. [Virginia,
L. R. A. 837, in discussing this question, "which fixes liability
upon the land owner because the child is attracted lies in the
assumption that what operates as a temptation to a person of
immature mind is, in effect, an invitation. Such an assump-
tion is not warranted. As said by Mr. Justice Holmes (now
a member of the supreme court of the United States), in Hol-
brook V. Aldrich, 168 Mass. 15, 60 Am. St. Rep. 364, 46 N. E.
115, 36 L. R. A. 493: 'Temptation is not always invitation.
As the common law is understood by the most competent au-
thorities, it does not excuse a trespass because there is a temp-
tation to commit it' — or hold parties bound to contemplate
infraction of property rights because the temptation to un-
trained minds to infringe them might have been foreseen,"
No land owner supposes for a moment that by growing fruit
trees near the highway, or where boys are accustomed to play,
however much they may be tempted to climb the trees and take
his fruit, he is extending to them an invitation to do so, or
that they would be any the less trespassers if they did go into
his orchard because of the temptation. No one believes that a
land owner, as a matter of fact, whether a railroad company
or a private individual, who makes changes on his own land
in the course of a beneficial user, which changes are reasonable
and lawful, but which are attractive to children and may ex-
pose them to danger if they should jdeld to the attraction, is
by that act alone inviting them upon his premises.
This doctrine of constructive invitation is not sustained,
as it seems to us, by the English cases cited to sustain it, and
has been utterly rejected by the highest courts of New Hamp-
shire, ^^^ Massachusetts, New York, New Jersey, Rhode
Island, Michigan and West Virginia. In several other states
it is limited in its operation to turntable cases ; See Frost v.
Eastern etc. Ry. Co., 64 N. H. 220, 10 Am. St. Rep. 396, 9
Atl. 790 ; Daniels v. New York etc. R. Co., 154 Mass. 349, 26
Am. St. Rep. 253, 28 N. E. 283, 13 L. R. A. 218 ; Walsh v.
Fitchburg etc. R. Co., 145 N. Y. 301, 45 Am. St. Rep. 615,
39 N. E. 1068, 27 L. R. A. 724; Delaware etc. Ry. Co. v.
Reich, 61 N. J. L. 635, 68 Am. St. Rep. 727, 40 Atl. 682, 41 L.
R. A. 837 ; Uttermohlen v. Boggs Run etc. Co., 50 W. Va. 457,
88 Am. St. Rep. 884, 40 S. E. 410, 55 L. R. A. 911 ; Ryan v.
Tower, 128 Mich. 463, 92 Am. St. Rep. 481, 87 N. W. 644, 55
L. R. A. 310 ; Paolino v. McKendall, 24 R. I. 432, 96 Am. St.
Rep. 736, 53 Atl. 268, 60 L. R. A. 133 ; Dobbins v. Missouri
March, 1906.] Walker v. Potomac etc. R. R. Co. 877
etc. Ry. Co., 91 Tex. 60, 66 Am. St. Rep. 856, 41 S. W. 62,
38 L. R. A. 573; Savannah etc. Ry. Co. v. Beavers, 113 Ga
398, 39 S. E. 82, 54 L. R. A. 314.
The maxim, "Sic utere tuo ut alienum non laedas," has been
quoted in some of the "Turntable Cases," and relied on as
affording a decisive reason, or ground, for establishing a duty
upon the railway company, and as per se justifying a recov-
ery against it. There may be more, but there is one con-
elusive answer to the argument based on that maxim, and that
is, that it refers only to acts of the land owner, the effects of
which extend beyond the limits of his property.
In Deane V. Clayton, 7 Taunt. 489, Gibbes, J., said: "I
know it is a rule of law that I must occupy my own so as to do
no harm to others, but it is their legal rights only that I am
bound not to disturb; subject to this qualification I may
occupy or use my own as I please. It is the rights of others,
and not their security against the consequences of (their)
wrongs that I am bound to regard."
In Knight v. Albert, 6 Pa. 472, 47 Am. Dec. 478, where an
effort was made to apply the maxim to sustain an action by
the owner of cattle which had trespassed upon the lands of
another and had been injured by reason of the unsafe con-
dition of the property. Chief • Justice Gibson said: "A man
must use his property so as not to incommode his neighbor;
but the maxim extends only to neighbors who do not, unin-
vited, interfere with it or enter upon it If it were not
so, a proprietor ^^* could not sink a well, or a saw pit, dig a
ditch or mill-race, or open a stone quarry or a man-hole on his
land, except at the risk of being made responsible for con.se-
quential damage from it which would be a most unrea.sonable
requirement": Ryan v.Towar, 128 Mich. 463, 92 Am. St. Rep.
481, 87 N. W. 644, 55 L. R. A. 310. See article by Judge
Smith on Land Owners' Liability to Children, etc., 11 Harvard
Law Review, 349-373, 434, 448, in which there is a valuable
discus-sion of that whole subject.
Upon neither of the grounds relied on do we think that the
common law makes it the duty of a land owner to have his
premi.ses in a safe condition for the uninvited entry of adults
or children, nor to take affirmative measures to keep them off
of his premises or to protect them after entry ; and this view is
strengthened by the fact that so many of the courts which
have adopted the doctrine of the "Turntable Cases" restrict
878 American State Reports, Vol. 115. [Virginia,
it as far as possible to turntables, and refuse to follow it to
its natural and logical consequences. For if it be a rule of
the common law that a land owner, who, in the reasonable and
lawful use of his property, makes changes thereon which have
the double effect of attracting young children to the land and
at the same time exposing them to serious danger, is guilty of
negligence unless he exercises reasonable care for their safety,
either in keeping them off the land, or in protecting them after
their entry thereon, the rule would apply not only to railroad
companies and their turntables, but to all land owners who in
the use of their land maintain upon it dangerous machinery,
or conditions which present a like attractiveness and tempta-
tion to children. The common law applies alike to all land
owners under like conditions, and it would be an anomaly to
hold that a doctrine or rule of the common law, which had its
origin before there were either railroads or turntables, applies
only to railroad companies in the use of their lands, upon
which they have dangerous ^^® machinery. While the
courts should and do extend the application of the common law
to the new conditions of advancing civilization, they may not
create a new principle or abrogate a known one. If new
conditions cannot be properly met by the application of exist-
ing laws, the supplying of the needed laws is the province of
the legislature, and not of the judicial department of the gov-
ernment: Connelly v. Western Tel. Co., 100 Va. 5, 93 Am. St.
Rep. 919, 40 S. E. 618, 56 L. R. A. 663. The legislature can
change the common law as far as may be necessary to regulate
the use of turntables and other dangerous appliances, and
leave untouched the common-law rights of the ordinary landed
proprietor.
The court of appeals of New Jersey, in refusing to follow
the doctrine of the "Turntable Cases," said that the doctrine
would require a similar rule to be applied to all owners and
occupiers of land in respect to any structure, machinery, or
implement maintained by them, which presented a like at-
tractiveness and furnished a like temptation to children. "He
who erects a tower capable of being climbed, and maintains
thereon a windmill to pump water; .... he who leaves
his mowing machine, or dangerous agricultural implement, in
his fields ; he who maintains a pond in which boys may swim in
summer, and on which they may skate in winter — would seem
to be amenable to this rule of duty. Climbing, playing at work,
March, 1906.] Walkeb v. Potomac etc. R. R. Co. 879
swimming and skating, are attractions almost irresistible to
children, and every land owner or occupier may well believe
that such attractions will lead young children into danger.
Many other cases of like character might be imagined. In all
of them the 'Turntable Cases,' if correct, would charge the
owner .... with the duty of taking care to preserve young
children thus tempted on his farm from harm. The fact
that the doctrine extends to such a variety of cases, and to
cases in respect to which the idea *^® of such a duty is novel
and startling, causes strong suspicions of the correctness of
the doctrine, and leads us to question it " : Delaware etc. R. Co.
V. Reich, 61 N. J. L. 635, 68 Am. St. Rep. 727, 40 Atl. 682,
41 L. R. A. 837 ; Turess v. New York etc. R. Co., 61 N. J. L.
314, 40 Atl. 614 ; Uttermohlen v. Boggs Run etc. Co., 50 W.
Va. 457, 88 Am. St. Rep. 884, 40 S. E. 410, 55 L. R. A. 911.
The supreme court of Minnesota, which was one of the first
to give its adherence to the turntable doctrine (Keffe v. Mil-
waukee etc. Ry. Co., 21 Minn. 207, 18 Am. Rep. 393), in the
subsequent case of Stendal v. Boyd, 73 Minn. 53, 72 Am. St.
Rep. 597, 75 N. W. 735, 42 L. R. A. 288, through its Chief
Justice, said: "The doctrine of the 'Turntable Cases' is an ex-
ception to the rules of nonliability of a land owner for acci-
dents from visible causes to trespassers on his premises, and if
the exception is to be extended to this case (a dangerous exca-
vation filled with water on a city lot, in which a little boy
had been drowned), then the rule of nonliability as to tres-
passers must be abrogated as to children, and every owner of
property must at his peril make his premises child-proof. ' '
We will conclude this opinion with the following extract
from the very able opinion of Judge Denman, speaking for the
supreme court of Texas (another of the states which had fol-
lowed the turntable doctrine), in the case of Dobbins v. Mis-
souri etc. Ry. Co., 91 Tex. 60, 66 Am. St. Rep. 856, 41 S. W.
62, 38 L. R. A. 573, as expressing our views : "The difficulty,"
he said, "about those cases (Turntable Cases) is, that they
either impose upon owners of property a duty not before
imposed by law, or they leave to a jur>' to find legal negligence
in cases where there is no legal duty to exerci.se care. In
those cases the courts yielding to the hardships of individual
instances where owners have been guilty of moral, though
not legal, wrongs, in permitting attractive and dangerous turn-
tables and waterholes to remain unguarded on their prerui.ses
880 American State Reports, Vol. 115. [Virginia,
in populous cities, to the destruction of little children, have
passed beyond the safe and ancient ^^"^ landmarks of the
common law, and assumed legislative functions, imposing, a
duty where none before existed. As a police measure the
law-making power may, and doubtless should, without unduly
interfering with or burdening private ownership of land, com-
pel the inclosure of pools, etc., situated on private property
in such close proximity to thickly settled places as to be
unusually attractive and dangerous, and impose criminal or
civil liability, or both, for failure to comply with the require-
ments of such law. When such a duty is imposed the courts
may properly enforce it or allow damages for its breach, but
not before."
We are of opinion that there is no error in the judgment
complained of, and that it should be affirmed.
Tfte Liability of a Bailroad Company for Injuries sustained bj
children from its turntables which it has left unfastened and un-
guarded is discussed in the note to Barnes v. Shreveport City K. E.
Co., 49 Am. St. Eep. 417. Some authorities maintain that a railroad
company which maintains an unguarded turntable upon its own land
near a public street is not liable to a child of tender years who
comes upon the land without invitation and is injured while playing
on or about the turntable: Delaware etc. R. E. Co. v. Eeich, 61 N. J.
L. 635, 68 Am. St. Eep. 727.
WATKINS V. ROBERTSON.
[105 Va. 269, 54 S. E. 33.]
OPTIONS UNDEB SEAL — Consideration — ^Presumption.— An
option under seal for the sale of shares of stock in a corporation is
in the nature of a continuing offer to sell, and is conclusively pre-
sumed to be made upon a suthcient consideration, (p. 88S.)
OPTIONS UNDEB SEAIi — Specific Performance— Damages.—
An option under seal for the sale of shares of stock in a corpora-
tion, after the agreement is delivered to the offeree, cannot be revoked
during the time stipulated for, and if exercised by the acceptance
of the offer, within the time limited, the agreement will be spe-
cifically enforced, or damages may be recovered for the breach, not-
withstanding an attempted revocation, (p. 890.)
OPTIONS Under Seal — Consideration — Estoppel to Deny. — The
recital of the payment of a consideration in an option under seal for
the sale of shares of stock in a corporation cannot be contradicted
nor its sufficiency questioned so as to defeat the operation of the
option according to the purpose designated in the contract creating
it, in the absence of fraud, illegality or mistake. This rule applies
with great force where the right of a third person to enforce the
contract and option is involved, (p. 892.)
June, 1906.] Watkins v. Robertson. 881
Coke & Pickrell, F. A. Christian and A. B. Guigon, for the
appellant.
Meredith & Cocke, for the appellees.
*''» CARD WELL, J. This litigation grows out of the fol-
lowing agreement:
"Memorandum of agreement made this 26th day of October,
1904, by and between W. S. Robertson, of the first part,
and S. S. Elam, of the second part.
"The said W. S. Robertson, party of the first part, in con-
sideration of one dollar to them in hand paid by said S. S.
Elam, party of the second part, at and before the execution
of this contract, the receipt of which is hereby acknowledged,
do hereby covenant, contract and agree to sell to the said S. S.
Elam, party of the second part, or his assigns, 496 shares of
the capital stock of the Watkins-Cottrell Company, at and for
the price of $137.50 per share, and to deliver the same to
said second party on payment or tender by said second party
to said first party of the purchase money therefor at the said
rate of $137.50 per share ; and it is agreed between the parties
hereto that the said party of the second part shall have the
right to make the said tender or payment of the said purchase
money to said first party and thereupon to demand the deliv-
ery of the said capital stock until December 1, 1904.
"Witness our hands and seals the day and year first above
written
W. S. ROBERTSON. (Seal).
S. S. ELAM. (Seal)."
*''* On the 21st of November, 1904, Elam, in writing and
for value received, assigned the above "option and agree-
ment" to Oliver J. Sands, or his a.s.signs, and on the same day
and in the same words Sands made a similar a.ssigninent of
the agreement to Charles IL Watkins, or his assigns.
On the same date of the agreement Robertson executed and
delivered to Elam the following paper:
"Oct. 26, 1904.
**Mr. S. S. Elam, Richmond, Va.
"Dear Sir.— Referring to the option given you to-day on
my 496 shares of stock in the Watkins-Coltrell Company, at
$137.50 per share, until December 1, 1904, I beg to advise that
if the said option is exercised by you or your assigns I will
Am. St. Rep., Vol. 115—56
882 American State Reports, Vol. 115. [Virginia,
allow you a rebate of $3,180.38 on the price named in said
option.
Yours very truly,
*'W. S. ROBERTSON."
This latter afrreement was by Elam, on the 21st of Novem-
ber, 1904, for value received, also assigned to Oliver J. Sands,
or his assigns.
The plaintiff, Charles H. Watkins, filed his original and
amended bills in this cause for the purpose of enforcing the
specific performance of the contract of October 26, 1904, for
the sale of the four hundred and ninety-six shares of stock
referred to therein ; he claimed to have purchased the stock
through Oliver J. Sands on November 21, 1904, in accordance
with the terms and provisions of the contract; that on the
day and year last mentioned the said Sands did in fact pur-
chase said option contract from Elam, paying him therefor the
sum of three thousand one hundred and eighty dollars and
thirty-eight cents, and ^^^ took an assignment thereof from
him; that Sands, acting in the matter for the plaintiff, ap-
proached the defendant, W. S. Robertson, on the day and
year last stated and notified Robertson that he. Sands, desired
to exercise said option contract by the purchase of the four
hundred and ninety-six shares of stock at the price named in
the contract, to wit, one hundred and thirty-seven dollars and
fifty cents per share, and then and there offered to pay Robert-
son the full purchase price thereof, but Robertson refused to
receive the same, stating that he had already sold the stock to
another party; that upon this refusal of Robertson, Sands
assigned said option contract to the plaintiff, of which assign-
ment Robertson was at once notified ; and that Robertson was
also then notified that the plaintiff was ready, able and willing
to pay for the stock the full price agreed upon in the option
contract, and warned to make no assignment or transfer of
the stock to other than the plaintiff. An injunction was
prayed for and granted, restraining Robertson, his agents,
etc., from selling, assigning or delivering the said shares of
stock of the Watkins- Cottrell Company in the bill mentioned,
or any part thereof, or in any way parting from the possession
of the stock, or the certificates representing the same, until the
further order of the court.
The plaintiff being sick at the time his original bill was
filed, and unable to confer with counsel, he tendered and was
June, 1906.] Watkins v. Eobertson. 883
permitted to file an amended bill. The amended bill adopts
the allegations of the original bill, and, in addition thereto,
sets out more in detail the negotiations and dealings had be-
tween the plaintiff and Elam concerning the purchase of the
stock, which plaintiff claims to have made on November 21,
190i, and charges that if the contract of October 26, 1904,
should be construed to be an option contract merely, the same
was valid and binding upon Robertson vd irrevocable by
him, it being supported by a valuable consideration, and
given under the ^'^^ seal of Robertson ; but if not to be con-
strued to be an option contract merely, it is a bilateral con-
tract, valid and binding upon both parties thereto, whereby
Elam, in consideration of a covenant on the part of Robertson
to sell him and his assigns the four hundred and ninety-six
shares of the capital stock of the Watkins-Cottrell Company at
the price therein named, bound himself unconditionally, on
or before the first day of December, 1904, to take said stock
and pay to Robertson the price agreed upon in said contract
therefor, viz., one hundred and thirty-seven dollars and fifty
cents per share, less the deduction of three thousand, one hun-
dred and eighty dollars and thirty-eight cents from the pur-
chase price, as provided in the agreement made by Robertson
in a letter to Elam contemporaneous with the contract and
attached thereto as a part thereof. It is further charged that
the sale claimed to have been made by Robertson of the stock
in question to a party other than the plaintiff was made long
after Elam had agreed to sell the stock to the plaintiff, and
that Robertson had in fact never made the sale he claimed to
have made to one W. D. Stuart, president of the Richmond
Hardware Company, but that Stuart, a rival in the business
of the Watkins-Cottrell Company, merely claimed the sale was
made to him. Stuart was, along with Robertson, made a party
defendant to the amended bill, which prayed for a specific
performance of the contract of October 26, 1904, in accordance
with the sale made thereunder by Elam to the plaintiff.
It is proper, perhaps, to state that in the bills filed by the
plaintiff* he charges that by reason of his relianoe upon the
validity of the contract between Robert s(>n and Elam and an
understanding had between himself and Elam, the plaintiff
found it necessary to take a trip north at great cost, trouble
and expense to make his financial arrangements for paying for
the stock, and on or about the 21st of November, 1904, returned
884 American State Reports, Vol. 115. [Virginia,
to the city of Richmond ready and prepared to demand
^'^^ the delivery of the stock and pay the purchase price
agreed upon therefor, and that this cost, trouble and expense
would not have been incurred but for his reliance upon the
validity of the contract held by Elam with Robertson and the
agreement between the plaintiff and Elam that the plaintiff
should have until the twenty-first day of November, 1904, to
consummate his purchase of the stock in question; and that
the agreement between the plaintiff and Elam to the effect
that the plaintiff should have until the 21st of Novem-
ber, 1904, to conclude his purchase of the stock was by a posi-
tive contract entered into and made between Elam and the
plaintiff on November 14, 1904.
Robertson answered the amended bill by adopting his
answer to the original bill, and also denying that any positive
contract had been made between Elam and Watkins on
November 14th, or that "Watkins had, at his own expense,
taken a trip north to raise the means of buying the stock,
but went there to attend a meeting of the National Hardware
Association at the expense of the Watkins-Cottrell Company.
Stuart adopted the answer of Robertson as his own ; and upon
the pleadings in the cause, the exhibits therewith and an
affidavit made and filed by Robertson, the lower court, by
its decree, reciting that the case would be rendered doubtful
by the conflicting evidence of the parties, and by the consent
of both plaintiff and defendant, and in pursuance of the
statute in such case made and provided, adjudged, ordered
and decreed that an issue be made up and tried by a jury
at the bar of the court on the twenty-third day of February,
1905, to ascertain whether the alleged purchase of the four
hundred and ninety-six shares of the capital stock of the
Watkins-Cottrell Company, as claimed in the bills of com-
plaint to have been made by the plaintiff, Charles H. Watkins,
was and is valid and binding upon the defendant, W. S. Rob-
ertson.
^"^^ Upon the trial of this issue it was found by the jury
that the alleged purchase of the four hundred and ninety-six
shares of stock in question, as claimed in the bills of complaint
to have been made by the plaintiff, Watkins, was not binding
upon the defendant, Robertson. Upon the coming in of this
verdict, the plaintiff moved the court to set it aside because
contrary to the law and the evidence, and again moved the
court for leave to file an amended and supplemental bill. The
June, 1906.] Watkins v. Robertson. 885
court, by its decree of Marcli 11, 1905, overruled the motion
for leave to plaintiff to file an amended and supplemental
bill, because the pleadings already filed sufficiently raised all
the questions proposed to be raised by the amended and
supplemental bill, and all such questions were presented to
the court in the instructions asked for by the complainant
on the trial of the issue, and wei'e then, after arg:ument, de-
cided against the complainant; and also overruled plaintiff's
motion to set aside the verdict of the jury, and dissolved the
injunction theretofore awarded in the cause. From this
decree the case is before us for review upon an appeal allowed
to the plaintiff in the court below.
At the trial of the issue before the jury the plaintiff (appel-
lant here) took a number of exceptions to the rulings of the
court. From the first of these exceptions it appears that after
appellant had rested his case, the appellees introduced them-
selves and one R. E. V. Farrar as witnesses, who were
asked sundry questions and made sundry answers thereto, to
each of which appellant excepted, and the ruling of the court
in permitting these questions to be asked and answers thereto
made is assigned as error.
The objection here made to the evidence is on the ground
that it elicited from the witnesses hearsay testimony, in that
the questions sought to, and the answers did, bring out
certain statements made by Stuart to Robertson in the ab-
sence of both ^''^ Watkins and Elam. It is sufficient, under
the circumstances, for us to say that this evidence was im-
proper, and we shall not consider it at length, for the reason
that the instructions given by the court, as we shall presently
see, took the case from the jury.
The next assignment of error is founded upon appellant's
second bill of exceptions, which is to the ruling of the court
in giving instructions "A," "B," and "C," at the request
of appellees.
The theory of Robertson's defense was that the agreement
made between him and Elam, which has been above set out,
authorized Elam to sell for him (Robertson) the stock in
question to one Springer, only, at the price of one hundred
and thirty-seven dollars and fifty cents per share, but not to
anyone else, and that no consideration was given for this
agreement, which he calls an option, and therefore it was not
valid and binding upon him (Robertson).
886 American State Reports, Vol. 115. [Virginia,
It will be observed that the agreement, or option, in question
makes no mention whatever of Springer's name, and while
there was some testimony^ given and improperly admitted to
the effect that there was talk between Robertson and Elara
concerning the sale of the stock to one Springer, the limita-
tion upon the contract or option as claimed by Robertson has
no foundation in fact and could not have been ingrafted upon
that agreement except by mutual consent of both parties.
I\Iuch has been said, also, in the argument as to Robertson's
unfriendliness toward appellant, and that by reason thereof
he set about to defeat the sale of the stock by Elam to appel-
lant as soon as he ascertained that it had been made or was
contemplated, and that the sale claimed to have been made by
Robertson to Stuart was for the purpose of defeating a sale
of the stock to appellant, the sale to Stuart being at the same
price per share of stock as the sale to appellant. But these
matters can have no bearing upon the question to be decided
here. The ^'^'^ issue in the case is sharply drawn otit by the
instructions given and refused by the lower court.
As claimed by counsel for appellant, the court, by instnic-
tions "A," "B" and "C," practically took the case from the
jury and left them no room to bring in a verdict other than
they did. "A" told the jury that the papers introduced in
evidence (that is, the contract and the letter from Robertson
to Elam appended thereto) together constituted an option, and
that said option was a unilateral or one-sided contract; that
is, set forth certain obligations assumed by the defendant,
Robertson, but contained none assumed by or binding upon
Elam. **C" made the verdict depend in part upon the dis-
puted questions of fact, whether Robertson subsequently sold
the stock to Stuart, and whether Elam assented to that sale;
while "B," on the other hand, practically directed a verdict
for the defendants, as the facts upon which that instruction
is predicated were not disputed by the plaintiff ; that is, that
the one dollar mentioned in the contract was not actually paid
by Elam to Robertson, and that Watkins did not notify Rob-
ertson of his purchase of the stock on November 14, 1904,
before the attempted withdrawal of the option by Robertson
on November 21, 1904.
As opposed to the theory of the case submitted to the jury
by these instructions, appellant asked for, among others, three
instructions, Nos. 1, 2 and 3, which the court refused. The
June, 1906.] Watkins v. Robertson. 887
first is general in its terms, covering the ground specifically
mentioned in Nos. 2 and 3, which latter instructions set forth
the grounds appearing on the face of the contract between
Elam and Robertson, upon which, the court should, as a
matter of law, have told the jury that the paper was an
irrevocable option.
If the paper in question is to be regarded as it was regarded
by the court below as merely an option given without a con-
sideration— ^'^^ that is, an offer to sell — it might have been
withdrawn by Robertson before acceptance by Elam, or an
assignee of his, by notice to Elam or such assignee; but if
given for a valuable consideration it could not have been
withdrawn by Robertson before the time specified therein ex-
pired: Cummins v. Beavers, 103 Va. 230, 106 Am. St. Rep
881, 48 S. E. 891.
In the case cited the contract or option was treated as though
the consideration named therein was actually paid on the day
the option was written, and, therefore, the case has but little
bearing upon the consideration of the question presented here.
Whether the contract here is to be treated as a contract
made for a valuable consideration depends, first, upon what
force and effect is to be given a contract under seal over a like
contract not under seal; and, second, whether the recital in
the contract that a valuable consideration had been paid by
Elam and received by Robertson estops the latter in a court
of equity to set up, as a defense to a suit for the specific per-
formance of the contract, that no consideration was in fact
paid therefor.
It is earnestly contended (1) that the paper shown by
Elam to, and relied upon by, appellant, was a valid option,
supported by the necessary valuable consideration, as evi-
denced by the solemn representation on its face, and rt*-
mained in force from the date of the paper, October 26, 1904,
to December 1st, following, irrevocable by Robertson : and (2)
that Robertson is estopped to deny the recital in tlie i)aper
that he had received a valuable consideration for its execution,
and especially will not be permitted to make this denial to the
prejudice of an innocent third party, namely, appellant.
There is much conflict among the authorities as to whether
courts of equity will decree specific performance of an execu-
tory contract or covenant because it is under seal, where it is
not also supported by an actual valuable consideration, an<l
888 American State Reports, Vol. 115. [Virginia,
many of *^ them take the negative view; but, undoubtedly,
this is to be ascribed to the fact that the ancient rule of tht;
common law that a seal conclusively imports a consideration
has been repealed or modified by statute in most of the states,
and text-writers, in citing cases, fail in many instances to
make allowance for this fact.
Upon this subject it is said in section 70 of 1 Pomeroy's
Equity: "In most of the states all distinction between sealed
and unsealed instruments is abolished, except so far as the
statute of limitations operates to bar a right of action; in
others, the only effect of the seal upon executory contracts is
to raise a prima facie presumption of a consideration, while
it is still required on a conveyance of land; in a very few,
the common-law rule is retained, which makes the seal con-
clusive evidence of a consideration."
In Virginia we have no statute abolishing or modifying the
common-law rule as to the effect to be given to the seal upon
executory contracts.
"In a contract under seal, a valuable consideration is pre-
sumed from the solemnity of the instrument, as a matter of
public policy and for the sake of peace, and presumed conclu-
sively, no proof to the contrary being admitted either at law
or in equity so far as the parties themselves are concerned":
3 Minor's Institutes, pt. 2, 139.
We have a number of decisions holding that parol evidence
is admissible to show what was the real consideration for a
conveyance made of property, where the conveyance was at-
tacked for fraud; but they have no application here and do
not impair the force of the statement which we have just
quoted from Minor's Institutes to the effect that no proof is to
be admitted, either at law or in equity, to overcome the pre-
sumption from the solemnity of the contract under seal that
the consideration ^**** named was actually paid as between
the parties to the contract.
The case of Willard v. Tayloe, 8 Wall. (U. S.) 557, 19 L.
ed. 501, was a suit in equity for the specific performance of a
contract for the sale of certain real estate, and the opinion
by Mr. Justice Field says : * ' The covenant in the lease giving
the right or option to purchase the premises was in the
nature of a continuing offer to sell. It was a proposition ex-
tending through the period of ten years, and being under seal
must be regarded as made upon a sufficient consideration and,
June, 1906.] Watkins v. Robertson. 889
therefore, one from which the defendant was not at liberty to
recede. When accepted by the complainant, by his notice to
the defendant, a contract of sale between the parties was com-
pleted. This contract is plain and certain in its terms, and
in its nature and in the circumstances attending its execution
appears to be free from objection When a contract is
of this character it is the usual practice of courts of equity to
enforce its specific execution upon the application of the party
who has complied with its stipulations on his part, or has
seasonably and in good faith offered, and continues ready to
comply with them." The opinion further says that it is
recognized that this is not invariably the practice, and that
this form of relief is not a matter of absolute right to either
party, but is a matter resting in the discretion of the court,
to be exercised upon a consideration of all the circumstances
of each particular case.
In O'Brien v. Boland, 166 Mass. 481, 44 N. E. 602, the
contract specifically enforced was an offer of A to sell houses
to B within a certain period, the contract being under seal, and
it was held that the contract was an irrevocable covenant con-
ditioned upon acceptance within the time named. There it
was attempted to withdraw the offer before it had been ac-
cepted, and four days afterward the plaintiff wrote to the
defendant ^* that he had purchased in accordance with
the offer. The court viewing the contract as an irrevocable
covenant conditioned upon acceptance within the time named,
because it was under seal, and notice of the acceptance of the
offer having been given before the expiration of the time
limit, compelled specific performance of the contract. In that
case, as in the case at bar, the contention was made that be-
cause the defendant could not have compelled the plaintiff
to buy before his acceptance of the offer there was a want of
mutuality which should defeat the bill. But the court held
that the offer being under seal, it was an irrevocable covenant,
conditioned upon acceptance within ten day.s, and the written
acceptance within that time made it a mutnal contract which
the plaintiff could enforce: See, also, Lawson on Contracts. 20.
In Guyer v. Warren, 175 111. 328, 51 N. E. 580, the contract
or option was in all respects similar to the contract here
under consideration, except there the offer was to sell land,
while here it is to sell shares of stock of tlie Watkins-CottrcU
Company; and the suit was for specific perfonnance of the
890 American State Reports, Vol. 115. [Virginia,
contract in a court of equity. In the opinion in that case it is
said: "Such contracts are perfectly valid and it is now well
settled that a court ef equity may decree a specific perform-
ance of them : Watts v. KeUar, 56 Fed. 1, 5 C. C. A. 394. The
covenant in the present contract, giving an option to purchase,
was in the nature of a continuing offer to sell. It was made
under seal, and hence must be regarded as having been made
upon a sufficient consideration. When the offer to sell was
accepted by the appellant by his notice to the appellees, the
contract of sale between the parties was completed, and the
appellees were not at liberty to recede from it."
In Clark on Contracts, Ilornbrook series, second edition,
page 23, it is said, upon a number of authorities cited:
"Where, however, ^^^ an offer under seal in the form of an
option is delivered to the offeree, the doctrine that it cannot
be revoked applies, and if the option is exercised by accept-
ance of the offer within the time limited, the agreement will
be specifically enforced, or damages may be recovered for
its breach": O'Brien v. Boland, 166 Mass. 481, 44 N. E. 602;
Mansfield v. Hodgdon, 147 Mass. 304, 17 N. E. 544 ; Mathews
Slate Co. V. New Empire Slate Co., 122 Fed. 972 ; Fuller v.
Artman, 69 Hun, 546, 24 N. Y. Supp. 13; Willard v. Tayloe,
8 Wall. 557, 19 L. ed. 501 ; Smith v. Smith, 36 Ga. 184, 91 Am.
Dec. 761 ; Donnelly v. Parker, 5 W. Va. 301 ; Weaver v. Burr,
31 W. Va. 736, 8 S. E. 743, 3 L. R. A. 94.
As opposed to the views taken in the authorities to which we
have referred, counsel for appellees rely on, among others, the
cases of Graybill v. Brugh, 89 Va. 895, 37 Am. St. Rep. 894,
17 S. E. 558, 21 L. R. A. 133, and Cummins v. Beavers, 103
Va. 230, 106 Am. St. Rep. 881, 48 S. E. 891. As already re-
marked, the last-named case did not turn upon the question
here under consideration. The first case was decided on the
ground that the option contract in question was one-sided
and lacking in mutuality, and, therefore, could not be en-
forced in a court of equity; but in the later cases of Central
Land Co. v. Johnston, 95 Va. 223, 28 S. E. 175, and Cummins
V. Beavers, 103 Va. 230, 106 Am. St. Rep. 881, 48 S. E. 891,
the decision in Graybill v. Brugh, 89 Va. 895, 37 Am. St
Rep. 894 , 17 S. E. 558, 21 L. R. A. 133, was practically over-
ruled. Other authorities, text-writers and decided cases seem
to sustain the view contended for by appellees and taken by
the court below, but as the authorities we have cited as sup-
June, 1906.] Watkins v. Robertson. 891
porting the view contended for by appellant are founded upon
what appears to us to be the sounder and safer principles and
are more in accord with the few decisions by this court bear-
ing upon the question involved, we conclude that they should
be followed.
In 9 Cyclopedia, at pages 287, 288, it is said: "3. (b) Op-
tions Under Seal. — The common-law rule that where an offer
is made under ^*^ seal it cannot be revoked applies to op-
tions given under seal. The seal renders a consideration un-
necessary, and if the option is exercised by acceptance of the
offer within the time limited, the agreement wiU be specifi-
cally enforced, or damages may be recovered for its breach,
notwithstanding an attempted revocation."
In support of this text numerous authorities are cited, and
those we have been able to examine clearly sustain the view
taken. The same author, in a note on page 288, cites a few
cases to show that some of the courts do not attach so much
sanctity to a seal, and allow evidence to be produced to show
there was no consideration for the offer. Among the cases
there cited is Graybill v. Brugh, 89 Va. 895, 37 Am. St. Rep.
894, 17 S. E. 558, 21 L. R. A. 133.
In referring to these cases, in 6 Pomeroy's Equity, note to
section 773, it is said that they must be considered as wrong
in principle, overlooking the fact that it is a contract and
not an offer, the enforcement of which is sought. With refer-
ence to Graybill v. Brugh it is said that the case "should rest
upon another ground — intervening equitable right of a third
party — if it is to be supported." In discussing "Unilateral
Contracts — Options," at section 773, the author says: "Courts
of equity often speak of enforcing an option as if such en-
forcement were an apparent exception to the rule of mutual-
ity. In fact, mutuality has nothing to do ordinarily with
contracts of option. The option is only a binding offer. The
promisor has parted with the right to withdraw his offer.
There is nothing to enforce in e(iuity before the exercise of
the option, as the promisee has already obtained his right —
to have the offer kept open. Tpon the exercise of the option,
i. e., the acceptance of the offer— and the tiling of the bill
by the promisee would be one way of exercising it— the option
ceases as an option and equity h. s an ordinary bilateral con-
tract to deal with. Thus it is usually said ^''' that an option
to renew a lease is enforceable at the will of the lessee having
892 American State Reports, Vol. 115. [Virginia,
the option. In fact the lessee must first exercise his option,
and then he has a binding contract for the renewal, and not
an option. It can make no difference that defendant has
tried to withdraw the option. He bound himself not to do
so. This view is further supported by the enforcement of an
exercised option which was under seal and without actual
consideration. The offer being under seal cannot be with-
drawn. Upon its acceptance, the court cannot be concerned
with the lack of consideration (w^hich is a good defense to
specific performance in equity), for it is the contract and not
the option that is being enforced."
The adding of the words in brackets takes nothing from the
force of the paragraph, because the author is there speaking
of offers other than those under seal, which he says cannot,
for the reason that they are under seal, be withdrawn.
Coming, then, to the consideration of the second proposi-
tion, that Robertson is estopped to deny that the offer made
in the paper executed by him and Elam was for a valuable
consideration, having recited therein the payment of one
dollar: The English authorities maintain that the recital of a
valuable consideration in a deed is conclusive. In the United
States it seems to be open to question or explanation for many
purposes, but for two it is not: First, the recited considera-
tion can never be questioned or contradicted for the purpose
of showing that the deed was not founded on a valuable con-
sideration, and so defeat it; nor, second, for the purpose of
raising a resulting trust in the grantor. What is meant is
that a party making a deed or offer to sell, in writing, cannot
himself deny the recital in the paper he executed for the pur-
pose of invalidating his contract or conveyance, or to raise
a resulting trust in himself. The recital cannot be disproved,
but must be treated as conclusive ^^^ for the purpose of giv-
ing effect to the operative words of the conveyance or offer:
McCrea v. Purmort, 16 Wend. 460, 30 Am. Dec. 103; Devlin
on Deeds, sec. 834.
While, as between the parties to a deed of conveyance, or
even an executory contract, the recital of the receipt of the
consideration would not preclude a recovery of the purchase
money due, in the one case, or the real amount of the con-
sideration in the other, the recital of the payment of a con-
sideration cannot be contradicted so as to defeat the opera-
tion of the conveyance according to the purpose therein desig-
June, 1906.] Watkins v. Robertson, 893
nated, unless it be on the ground of fraud or illegality. So
the obligor in a bond which expressly acknowledges a con-
sideration is estopped to deny the consideration for the pur-
pose of avoiding the bond in the absence of any fraud or mis-
take : 24 Am. & Eng. Ency. of Law, 64.
The case of Lawrence v. McCalmont, 2 How. (U. S.) 426,
11 L. ed. 326, held that the principle applied to executory con-
tracts not under seal ; and to the same effect is Silver v. Kent,
105 Fed. 840.
The case of Guard v. Bradley, 7 Ind. 600, was a suit for
the specific performance of a bond, and the opinion says:
"The appellants insist that the bond was without considera-
tion, and that, being merely voluntary, a court of equity will
not enforce it. "We have no doubt upon the point that a
court of equity will not enforce the specific execution of a
contract merely voluntary and without consideration, at the
instance of a volunteer (citing authorities). But are the
obligors in the bond in an attitude to claim the benefit of
that rule? We think they are not. This bond or agreement
under seal states that the consideration of it is the convey-
ance made to the obligors by Ezra Guard. By this recital
they are estopped, and cannot say it was without considera-
tion: Trimble v. State, 4 Blackf. (Ind.) 435; May v. John-
son, 3 Ind. 449."
2s« The case of Fuller v. Artman, 69 Hun, 546 , 24 N. Y.
Supp. 13, was a suit of an assignee to enforce specific perfonn-
anee of an option under seal, and is, therefore, a case in
point. On its face it was recited that the option was in
consideration "of one dollar and other valuable considera-
tion, the receipt whereof is hereby acknowledged," though
nothing had in fact passed. The opinion says: "The evi-
dence (i. e., that no valuable consideration had actually
passed) was no doubt properly excluded. If admitted, it
would have done violence to some elementary principle of the
law of evidence bearing upon the credit and validity belong-
ing to instruments in writing and under .seal. The prini'iples
referred to may, perhaps, be embodied in a rule to the etTect
that while the mere presumption of a consideration which
arises from the use of seals in the execution of the iiLstru-
ment is subject to rebuttal (Code Civ. I'roc, see. 840), the
expression of a consideration in sufh instrunwnt is not sub-
ject to contradiction for the purpose or with the elTect of in-
894 American State Repobts, Vol. 115. [Virginia,
validating the instrument : Murdock v. Gilchrist, 52 N. Y. 242 ;
Rockwell V. Brown, 54 N. Y. 210. The recital of a considera-
tion in a deed is conclusive as to the fact that there was a con-
sideration for the deed : Grout v. Townsend, 2 Denio, 336 ;
Murdock v. Gilchrist, 52 N. Y. 242. The consideration actu-
ally paid or promised may be shown to have been other than
that recited in the instrument, or the fact of payment of the
consideration agreed upon may be contradicted in an action
for its recovery, but the existence of a sufficient considera-
tion when expressed in an instrument under seal is not sub-
ject to dispute."
As it seems to us, the rule would apply with greater force
where the right of a third party to enforce the contract is in-
volved.
Specific performance was decreed in Matthews Slate Co. v.
New Empire Slate Co., upon precisely these grounds.
28T 'pjjg principle is applied uniformly to insurance cases
where the policy contains a formal acknowledgment of the
receipt of the premium upon the ground that this acknowl-
edgment should prevent the insurer from averring and show-
ing nonpayment of the premium for the purpose of denying
that the contract ever had any legal existence. Says the
opinion in Basch v. Humboldt etc. Ins. Co., 35 N. J. L. 429:
"What does this receipt, in its connection with the delivery
of the instrument, import, if it does not mean that the pay-
ment of the premium is conclusively admitted to the extent
that such payment is necessary to give vitality to the con-
tract? Unless this be its meaning, it serves no legal office,
for it does not mean that the money has been actually re-
ceived This policy of insurance purports to have an
effect immediate on delivery, founded on a paid-up considera-
tion; it does not seem competent for the promisor to prove
that the acknowledgment is not true, and that the contract
never had any existence The usual legal rule is that
a receipt is only prima facie evidence of payment, and may
be explained; but this rule does not apply when the question
involved is not only as to the fact of payment, but as to the
existence of rights springing out of the contract. With a
view of defeating such rights the party giving the receipt
cannot contradict it. An acknowledgment of an act done,
contained in a written contract, and which act is requisite to
put it in force, is as conclusive against the party making it
June, 1906.] Watkins v. Robertson. 895
as is any other part of the contract; it cannot be contra-
dicted or varied by parol."
In a similar case, Kendrick v. Life Ins. Co., 124 N. C. 315,
70 Am. St. Rep. 592, 32 S. E. 728, the court says: "The au-
thorities are numerous and quite uniform that the acknowl-
edgment in the policy of the receipt of the premium estops
the company to contest the policy on the ground of nonpay-
ment of 2** the premium. In so far as it is a mere receipt
for money, it is only prima facie, like other receipts, and will
not prevent an action to recover the money, if not in truth
paid; but in so far as it is a part of the contract of insur-
ance, it cannot be contradicted by parol to invalidate the con-
tract, in the absence of fraud in procuring the delivery of
the policy." In support of the principle declared a long list
of authorities are cited.
It seems to us clear, both upon reason and authority, that
in this case Robertson should not be permitted to deny, cer-
tainly as to Watkins, who, in his dealing with El am. undoubt-
edly relied upon the positive representation on the face of the
contract in question, that he (Robertson) had received the
consideration necessary to its validity and binding force. As
Ve view this case, it would be a denial of justice and a per-
nicious sanction of unfair dealing to hold that Robertson,
who had, by his contract in writing, under seal, executed and
delivered to Elam, reciting that it was made and executed for
a valuable consideration received, bound himself not to with-
draw his offer therein made to sell to Elam or his assigns the
four hundred and ninety-six shares of the capital stock of
the Watkins-Cottrell Company until December 1, 1904, could,
after Watkins had been shown the contract, and, relying upon
its binding force and effect upon Robertson, before the time
limit therein named had expired, accepted the offer and of-
fered to pay the purchase price for the stock, defeat the very
object and purpose of the contract by merely showing that the
recital in the contract of the receipt of a valuable considera-
tion was untrue. Contracts or options of this character have,
at this day, become in common use in the business world, and
dealings had in reliance upon them would become very un-
certain, risky and undesirable if such a contract, as a nuittcr
of law, may be converted into a snare aiul a delusion by per-
mitting the party making it to witlidraw from or ''***" lirenk
it before it expires by its own turniii, as though the contract
896 American State Reports, Vol. 115. [Virginia.
were not under seal and did not contain a recital that a val-
uable consideration had been paid therefor. Safety and fair
dealing in transactions of this character require that such con-
tracts be regarded as sacred and as binding upon the parties
intended to be bound thereby as other contracts which can
only be defeated, impeached or avoided for fraud or illegality.
We are of opinion, therefore, that the court below should
have refused appellees' instructions "A," "B" and "C" and
given appellant's instructions Nos. 1, 2 and 3.
The refusal of the court to give certain instructions asked
by appellant, predicated upon the agency of Elam for the
sale of Robertson's stock in question, and submitting that
question of fact to the jury, is assigned as error; but in the
view we have taken of the case it is unnecessary to consider
this assignment. Nor do we consider it expedient to express
an opinion as to the weight of the evidence certified in the
record, as the case, because of misdirection of the jury and
the admission of improper evidence, has to be remanded for
a new trial of the issue out of chancery, should the court
deem it proper to submit again the issue to a jury.
The decree appealed from is reversed and annulled and the
cause remanded to be further proceeded with, in accordance
with the views expressed in this opinion.
An Option to Purchase Land, given without consideration may be
withdrawn at any time before acceptance, but an option founded upon
a proper consideration cannot be withdrawn before the time specified
therein has expired: Cummins v. Beavers, 103 Va. 230, 106 Am. St.
Rep. 881, and cases cited in the cross-reference note thereto; Frank
V. Stratford-Handcock, 13 Wyo. 37, 110 Am. St. Eep. 963.
Parol Evidence is Admissible to prove the real consideration of a
deed: St. Louis etc. R. E. Co. v. Crandell, 75 Ark. 89, 112 Am. St.
Rep. 42; Breitenwischer v. Clough, 111 Mich. 6, 66 'Am. St. Rep. 372;
Moflfatt V. Bulson, 96 Cal. 106, 31 Am. St. Rep. 192. It is not compe-
tent, however, to contradict the acknowledgment of the consideration
in order to affect the validity of the deed in creating or passing a
title to the estate granted: Kendrick v. Life Insurance Co., 124 N. C.
315, 70 N. C. 592.
CASES
IN THE
SUPREME COURT
OF
WEST VIRGINIA.
HARVEY V. RYAN.
[59 W. Va. 134, 53 S. E. 7.]
INJUNCTION. — The Collection of Purchase Money on land
maj be enjoined when the vendee is in possession under a deed with
covenants of general warranty, and the title is questioned by suit
prosecuted or threatened, or is clearly shown to be defective, (p.
900.)
INJUNCTION. — The Collection of Purchase Money due the
vendor of land may be enjoined, when the vendee has entered into
possession under a deed with covenants of general warranty, and a
stranger has asserted title to and recovered the property in an ac-
t\on of ejectment which was pending at the time of the purchase,
(p. 907.)
TVyatt & Graham, for the appellant.
Simms & Enslow, for the appellees.
^»* SANDERS, J. On the twenty-first day of June, 1883.
M. B. Ryan, by deed with ^^^ covenants of general warranty
of title, conveyed to Robert T. Harvey a certain lot in the
city of Huntington, in consideration of which Harvey ex-
ecuted his bond for four hundred and fifty dollars, payable
to Ryan. Ryan's grantor was one Andrew Griffith, who
bought the lot of the Central Land Company.
Harvey placed a dwelling upon this lot shortly after his
purchase, and on the twenty-third day of December, 1885.
John B. Laidley, claimant of the lot, instituted, in the cir-
cuit court of Cabell county, an action of ejectment for the
recovery thereof, against Harvey's tenant, and, by an order
of court, Harvey was substituted as defendant in the action.
Am. St. Eep., Vol. 115—57 (897)
898 American State Reports, Vol. 115. [W. Virginia,
After the institution of the action of ejectment, Griffith,
as assignee of Ryan, brought an action of assumpsit in the
circuit court of Cabell county on the note executed by Har-
vey to Ryan, whereupon Harvey filed his bill, setting up the
facts of the purchase, the execution of the note, the pendency
of the action of ejectment, and further alleging that some
time in the year 1882, John B. Laidley instituted an action
of ejectment against the Central Land Company to recover
possession of a certain tract of land in the city of Hunting-
ton, within which tract was included the whole of the lot in
question, and that in said action the supreme court of this
state decided that the acknowledgment of the grantor, in the
deed to the Central Land Company, was defective, and that
in all probability Laidley would be adjudged the lawful owner
of the lot in question. The bill, after alleging that Ryan and
Griffith were nonresidents and insolvent, prayed that an in-
junction might be awarded, restraining the prosecution of
the action of assumpsit until the matter respecting the title
to the lot was adjudicated, which injunction was granted.
The action of ejectment brought by Laidley against Har-
vey was determined in September, 1900, it being ascertained
by the final judgment entered therein that the plaintiff had
an estate in fee simple in the lot, and that the value thereof,
without improvements, was four hundred and fifty dollars,
and the value of the improvements made thereon by Harvey
was one thousand dollars. Laidley elected to relinquish his
estate in the lot to Harvey, at the value ascertained.
The parties to this suit having all departed this life,
*^^ the same was revived in the name of and against the
personal representatives of such respective deceased parties.
On the twenty-third day of July, 1904, the executor of R.
T. Harvey, deceased, filed an amended and supplemental bill,
which, after adopting the allegations of the original bill, and
stating the result of the determination of the action of eject-
ment, alleged that Ryan and Griffith, though often requested,
had failed and refused to protect Plarvey's title to the lot,
and especially the improvements thereon, and that Harvey
was compelled to and did pay the judgment, interest and costs,
which exceeded any sum which might be due on the pur-
chase money note; that Harvey paid such purchase money,
interest and costs through his attorney, Z. T. Vinson, who
procured an assignment of the judgment from Laidley to
Jan. 1906.] Harvey v. Ryan. 899
himself; that after the death of Harvey, without the knowl-
edge of his executor, the lot was advertised for sale under
the order of sale entered in the action of ejectment, and sold,
and purchased by Rufus Switzer, to whom Vinson had trans-
ferred the assignment from Laidley; that the Central Land
Company, through its attorneys, had promised to save harm-
less all of its grantees in the property claimed by Laidley,
but the company failing to do so, as to this lot, the ex-
ecutor of Harvey, at the March term, 1904, of the circuit
court, procured an order to be entered, showing that the
judgment and costs in the action of ejectment had been
paid, and the sale was thereupon set aside, and the action
dismissed. The amended and supplemental bill averred that
Ryan and Griffith were both nonresidents, and died, insol-
vent, in the state of Ohio, and prayed that the injunction
awarded R. T. Harvey be made perpetual, that the action of
assumpsit be ordered dismissed, the bond canceled and sur-
rendered, and for general relief.
The administrator of Griffith and Ryan appeared and de-
murred to the original and amended and supplemental bills.
and moved to dissolve the injunction and dismiss the suit,
which motions the court sustained, and entered an order to
that effect. From this order the executor has appealed.
The single question presented by the bill is, whether or
not equity has jurisdiction to grant the relief sought, or
^^"^ whether the plaintiff should be relegated to his remedy
at law. To determine this question it will be necessary to
know when equity will enjoin the collection of purchase
money due the vendor, when the contract has been fully
executed by a conveyance to the vendee, with covenants of
general warranty of title. When we have determined this
question, the facts will be found to be of easy application.
The authorities in the different states are clearly at vari-
ance as to when a court of equity will intervene and grant
such relief. "It is exceedingly difficult, if not impassible,
by any process of generalization, to deduce from the decided
cases principles of general application which shall serve as
rules for the guidance of courts and practitioners": High
on Instructions, sec. 382. While such conflict exists, yet it
is the well-established, if not the universal, rule, that a court
of equity will grant such relief in cases of fraud or mutual
mistake, or where the covenantor is insolvent, or a nonresi-
900 American State Reports, Vol. 115. [W. Virginia,
dent, or where to permit the collection of the purchase money
will result in irreparable injury to the vendee.
In this state, and in Virginia, injunctions have been
granted against proceedings to collect purchase money, when
there is a complete failure of title, though the vendee is in
the undisturbed possession of the property, and the vendor
is neither insolvent nor a nonresident, and though no suit
by the real owner against the vendee has been prosecuted or
threatened. Maupin on Marketable Land Titles, 795, says:
"The doctrine that the covenantee may retain the purchase
money without suit prosecuted or threatened by the real
owner, and with a solvent covenantor to make good the
damages when a substantial breach of the covenants has
occurred, has received little, if any, recognition without the
states of Virginia and West Virginia, where it prevails. It
is there rested upon the ground that the covenantee has
no adequate remedy at law, there being no right of action on
the covenant affirmatively or negatively by way of recoup-
ment or equitable setoff, until eviction. Hence it appears
that in those states there may be a condition of the title
which would justify an injunction against the collection of
the purchase money, and yet would not support the defense
of recoupment or setoff at law." The doctrine is now well
*^® settled both in this state and in Virginia, by a long line
of well-considered decisions, beginning early in the jurispru-
dence of tjie state of Virginia and followed in this state,
that the collection of the purchase money will be enjoined
when the vendee is in possession under deed with covenants
of general warranty of title, and when the title is questioned
by suit prosecuted or threatened, or where the title is clearly
shown to be defective, but this doctrine has been extended
further in these states than in any other jurisdiction. It is
said by Judge Green in Ealston v. jNIiller, 3 Rand. 44, 15 Am.
Dec. 704: "This court has, in favor of a purchaser, gone far
beyond anything which has been sanctioned by the courts of
chancery in England or elsewhere, in enjoining the payment
of the purchase money after the purchaser has taken posses-
sion under a conveyance, especially with general warranty.
Yet, it has never gone so far as to interfere unless the title
was questioned by a suit, either prosecuted or threatened, or
unless the purchaser could show clearly that the title was
defective." And this was quoted with approval by Judge
Jan. 1906.] Haevey v. Ryan. 901
Green, of this state, in Wamsley v. Stalnaker, 24 W. Va. 214,
and continuing, he said: "This is the view which, according
to my understanding of the case, has been followed in Vir-
ginia and "West Virginia, when the vendee was protected by
a warranty of title and had not been evicted."
The case of Wamsley v. Stalnaker, is a leading case, giving
a review of several of the Virginia decisions upon this sub-
ject, which proceed upon the theory that the purchaser should
not be required to pay the purchase money where he is in
great danger of losing the property. He is not required to
take the hazard of the future insolvency of his vendor. No
right of action would exist in favor of the vendee until a
breach of the covenant, and it being a covenant of general
warranty of title, the breach would not occur until actual
or constructive eviction. In discussing the question, Judge
Green says that Judge Tucker, in Roger v. Kane's Admr., 5
Leigh, 606, questions the right to the remedy where there is
a covenant of good title, because such a covenant would be
broken the instant it is entered into, if the title should be
defective. And Judge Green also says: "Judge Tucker bases
this right of a court of equity to enjoin the purchase money,
though there is a general warranty deed held by the pur-
chaser, *^* if the title is clearly shown to be defective, partly
on the ground that on the general warranty the vendee could
not sue at law till he was evicted, and seemed to regard it as
doubtful whether such relief in equity would be given, if in
the deed there were other covenants, which could be sued
upon at law before eviction, as, for instance, a covenant for
good title; but this point was not decided nor do I know of
its decision in any case in Virginia or in West Virginia. It
would seem, therefore, that the extension of the right of a
court of equity to enjoin the collection of the purchase money
by the vendor because of defect of title, however clear,
might perhaps be confined to the case when there was no
other covenant but the covenant of warranty, and might not
be recognized when there were also covenants, on which the
vendee could sue at any time at law, such as covenants of
good title."
But in reviewing what Judge Tucker said in Roger v.
Kane's Admr., 5 Leigh, 606, we find that he used this lan-
guage: "The jurisdiction thus confessedly exercised by the
courts of equity with us results from what may be called the
902 American State Reports, Vol. 115. [W, Virginia,
preventive justice of those tribunals. It arrests the com-
pulsory payment of the purchase money when the purchaser
can show that there is either a certainty, or a strong proba-
bility, that he must lose that for which he is paying his money.
It gives him the relief, too, though his demand may be in
the nature of unliquidated damages, because he has no other
means of ascertaining them. Thus, if the purchaser can show
that he has received a deed with general warranty, and that
the title is bad, yet if he has not been evicted, he cannot main-
tain covenant at law, and ascertain his damages before that
tribunal, in order then to set them off against the demand.
If, indeed, there are covenants of good title, etc., it may be
otherwise ; and so it may often happen that an action may be
brought where there are such covenants of good title, etc., upon
which the validity of the title may be tested, and the dam-
ages of the party ascertained. Whether in these cases re-
lief could be given in equity, it is not necessary here to say. ' '
It will be observed that Judge Tucker says it is not nec-
essary to decide this question; and, from his language, it
would seem to be susceptible of the construction given by
Judge Green, if this were all Judge Tucker said on the sub-
ject, *'*** but continuing, he said : * ' But where there is only a
covenant of warranty, this cannot be done ; and hence, I con-
ceive, the party would be entitled to the assistance of a court
of equity, where he is full-handed with proof that his title is
defective, although he has not yet been evicted. ' '
This would seem to indicate that he thought after eviction
there would be stronger grounds for equity jurisdiction.
And then, in Beale v. Seiveley, 8 Leigh, 658, Judge Tucker
says: "With us it cannot be denied that the practice has been
more lax. But even with us relief is only given to a pur-
chaser who had obtained his deed, where there had been an
actual eviction, or where a suit is depending or threatened,
or where the vendee, placing himself in the attitude of the
superior claimant, can show a clear outstanding title or en-
cumbrance."
But even if that decision, in dealing with this question, did
place it partly upon the ground that there is no breach of the
covenant of general warranty until eviction, and, therefore,
no right of action accrues to the vendee, still there is an ad-
ditional reason why this remedy should be extended — that is,
the remedy of the vendee at law is not adequate and com-
Jan. 1906.] Harvey v. Ryan. 903
plete. If the purchaser should be required to pay the pur-
chase monej^, and the suit, prosecuted or threatened, should
result in a total loss to him of the property, it would then
be necessary for him to bring an action for breach of the
covenant, while in the meantime the covenantor might have
become insolvent. And this would also be true as to a vendee
who had been evicted by reason of a superior title before the
purchase money had been collected, because, while a right of
action for damages would exist to the vendee, upon the cove-
nant, yet the defense would not be available to him in an ac-
tion brought against him upon a writing obligatory given
for the purchase money. The writing being under seal, it
imports consideration, and a defense of failure of considera-
tion or want of consideration cannot be interposed to a writ-
ing under seal, at common law. Neither could the damages
resulting from a breach of the covenant of warranty be re-
lied on as a common-law counterclaim in the nature of re-
coupment, since the writing sued on is under seal. The
supreme court of Virginia, in Columbia Accident Assn. v.
Rockey, 93 Va. 678, 25 S. E. 1009, says: "But while a de-
fendant, under *'** the plea of nonassumpsit, might give evi-
dence of matter by way of recoupment, or in diminution of
the damages claimed by the plaintiff, even to the entire de-
feat of his action, yet it was not competent for the defend-
ant to recover in that suit any damages he may have shown
in excess of the damages of the plaintiff. If he wished to
recover such excess, he could only do so in an independent
action against the plaintiff: 4 Minor's Institutes, pt. 1, 793,
798. Nor was it competent at common law, as against seal
contracts, to prove a failure in the consideration of the con-
tract, or fraud in its procurement, or breach of warranty of
title or soundness of personal property, but the defendant
was driven, as when proposed to recover against the plain-
tiff any excess of damages, to his independent action at law
to recover the damages he had sustained : 4 Minor's Institutes,
pt. 1, 792; Taylor v. King, 6 Munf. 358, 8 Am. Dec. 746:
Burtners v. Kern, 24 Gratt. 42; and Hayes v. Virginia M.
P. Assn., 76 Va. 225. The object of the act of 1831 was to
remedy these defects, and to enable a defendant both to make
such defenses to a suit at law on specialties and also to re-
cover against the plaintiff any excess of damages he may
have sustained, in order to settle in one suit all the rights of
904 American State Reports, Vol. 115, [W. Virginia,
the parties arising under the contract, and to prevent circuity
of action and a multiplicity of suits. Its object was to en-
large the right of the defense, and not to impair any previ-
ous right, or to take away such defenses where the law pre-
viously permitted them to be made. ' '
And in Kinzie v. Riely's Exrs., 100 Va. 709, 42 S. E. 872,
it is held that damages for breach of warranty could not be
claimed at common law by way of recoupment, against a
sealed instrument: Sterling Organ Co. v. House, 25 W. Va.
64; Williamson v. Cline, 40 W. Va. 194, 20 S. E. 917; Wat-
kins V. Hopkins' Exr., 13 Gratt. 743. It will therefore be
seen that although there is a breach of the covenant of war-
ranty in the deed from Ryan to Harvey, yet he cannot set
this up as a defense in the action brought against him upon
the purchase money bond, but must rely upon his separate
action for damages for a breach of the covenant, and not be-
ing able to make this defense to the action of assumpsit, a
court of equity will not require him to pay the money to the
vendor, and compel him to resort to his action upon the cove-
nant and take the hazard of his vendor's insolvency. We
fail to see the reason for such ^** course. The title to the
land has been adjudicated to be in Laidley, and Harvey has
been ousted. The property for which the purchase money
bond was given has been totally lost to him, and there is no
reason why a court of equity should not enjoin its collec-
tion. His legal remedy is wholly inadequate. He may pay
the money and then sue at law upon the covenant to recover
it back, but this could not be a complete and adequate rem-
edy. The vendor, in the meantime, may have become totally
insolvent. This risk the vendee will not be compelled to ac-
cept, but equity will extend its aid and prevent the collec-
tion of the purchase money.
What we have said as to the defenses to a sealed instru-
ment applies to the common-law doctrine, for, under our stat-
ute (Code, sec. 5, c. 126), a defendant may plead failure of
consideration, fraud in the procurement of the contract, or
breach of warranty of title, but this is only concurrent with
the equitable remedy, and by section 6 of the same chapter
it is provided that such defense need not be interposed at
law, and if not so interposed, it can be availed of in equity.
By this statute it was not intended that the equitable rem-
edy be taken away, but, on the other hand, it is expressly
Jan. 1906.] Harvey v. Ryan. 905
reserved. It was only intended to permit such defense to be
made at law, at the election of the defendant. Therefore,
if equity, before the enactment of this statute, had jurisdic-
tion, it still has jurisdiction, notwithstanding a remedy by
defense at law is given by statute : Knott v. Seamands, 25 W.
Va. 99 ; Bias v. Vickers, 27 W. Va. 456 ; Jarrett v. Goodnow,
39 W. Va. 602, 20 S. E. 575, 32 L. R. A. 321 ; Kenzie v. Reily 's
Exrs., 100 Ya. 709, 42 S. E. 872.
"While some cases have been referred to, to support the
views herein expressed, yet, to demonstrate more conclusively
that the rule is firmly fixed and has been followed in this
state since the question was first presented, it may be well to
review other cases on this subject. In Womenlsdorf v. O 'Con-
ner, 53 W. Va. 314, 44 S. E. 191, it was held that where land
was conveyed by deed with general warrant}^ and the ven-
dee lost the land, that equitj'^ will enjoin the collection of the
purchase money. Judge Brannon, in delivering the opinion
of the court in this case, on page 316, says: "Counsel for
0 'Conner would impress upon us the law of actions upon a
covenant of warranty; would treat this as if it were a suit
by Womenlsdorf to recover back money paid upon the land
under a breach of *^^ warranty. It is not such a suit. It
is a suit to enable Womenlsdorf to keep in his hands purchase
money for his indemnity; I should rather say, not for his
indemnity, should he lose the land, but to be relieved from
paying money for land already irrevocably lost to him."
And in Bennett v. Pierce, 50 W. Va. 604, 40 S. E. 395, the
same doctrine is announced, citing with approval Wamsley
V. Stalnaker, 24 W. Va. 214. And in the case of Kinsports
V. Rawson, 29 W. Va. 487, 2 S. E. 85, we have: "Equity will
enjoin the collection of purchase money on land on the ground
of defect of title after the vendee has taken possession under
conveyance from the vendor with general warranty, if the
title is questioned by a suit, either prosecuted or threatened,
or if the purchaser can show clearly that the title is de-
fective. " It is said in this case to show that the title is ques-
tioned by a suit, either prosecuted or threatened, that the bill,
on its face must allege the ground on which the threatened
suit is based, which must be such as will put a reasonable
man in just apprehension of a loss of his land ; that the mere
fact that some one has asserted claim to the land is insuffi-
cient to justify a court of equity in restraining the collection
906 American State Keports, Vol. 115. [W. Virginia,
of the purchase money. And in Ileavner v. Morgan, 30 W,
Va. 335, 8 Am. St. Rep. 55, 4 S. E. 406, it was held tha^.
equity will not require a vendee, who has purchased land and
taken a deed with covenants of general warranty, to pay the
purchase money, when a part of the land sold is claimed by
others and the title is defective, but that if the purchaser
can show clearly that the title is defective, equity will not
require him to pay the purchase money until such defect is
removed, or a proper abatement decreed, and citing with ap-
proval: Yancey v. Lewis, 4 H. & M. 390; Ralston v. Miller,
3 Rand. 44, 15 Am. Dec. 704; Koger v. Kane's Admr., 5
Leigh, 606; Clarke v. Hardgrove, 7 Gratt. 399; Lovell v.
Chilton, 2 W. Va. 410; Wamsley v. Stalnaker, 24 W. Va. 214;
and Kinports v. Rawson. Also, see the following authori-
ties: Renick v. Renick, 5 W. Va. 285; Thompson's Admr. v.
Catlett, 24 W. Va. 524; McClaugherty v. Croft, 43 W. Va.
270, 27 S. E. 246; Morgan v. Glendy, 92 Va. 86, 22 S. E.
854 ; Gay v. Hancock, 1 Rand. 72 ; Beale v. Seiveley, 8 Leigh,
658; Grantland v. Wight, 5 Munf. 295; Richards v. Mercer,
1 Leigh, 125.
It is argued by counsel that there is no averment of irrep-
arable injury, that while it is averred that Ryan, the imme-
diate grantor of Harvey, is insolvent, yet it is not averred
*^^ that the Central Land Company, Harvey's remote gran-
tor, is insolvent. The allegation of insolvency has never been
one of the requisites for extending relief of this character, and
even if it were so, it is averred in the bill that Ryan, the
immediate grantor, is a nonresident, having died, in the state
of Ohio, insolvent, and the vendee would not be required to
pay the purchase monej' and then resort to his action against
a remote vendor. While it is true the Central Land Com-
pany conveyed with covenants of general warranty of title,
which covenant runs with the land, and of which the ven-
dee could avail himself, yet equity will not permit the collec-
tion of the purchase money from him, and compel him to re-
sort to this remedy; and not only that, but the remote
grantor would only be liable upon his covenant for the amount
of the purchase money paid him, which might, in many in-
stances, be wholly inadequate, even if such remedy should
be resorted to. While it is true in this case the considera-
tion paid to the Central Land Company is the same as that
Jan. 1906.] Harvey v. Ryan, 907
paid by Harvey, yet this cannot alter the ease, because the
rule must be one of general application, and not one which
may be applicable to some cases, and not to others.
We deduce from the authorities that it is clear from the
allegations of the bill that equity has jurisdiction to enjoin
the collection of the purchase money. The original bill shows
that the action of ejectment was instituted for the recovery
of the land conveyed to Harvey for which the bond was ex-
ecuted. The amended and supplemental bill shows that the
suit was prosecuted to a final termination, which resulted in
a judgment in favor of Laidley. Harvey, having made im-
provements upon the property, the question of the value of
the improvements, and the value of the lot, without improve-
ments, was submitted to the jury, and the lot, having been
found to be of the value of four hundred and fifty dollars,
and the value of the improvements one thousand dollars,
Laidley elected to relinquish his title to the lot, and accept
its value, and the lot was ordered sold unless the amount at
which it was valued was paid by Harvey. Subsequently the
lot was sold, but the sale was not confirmed, and Harvej'"
satisfied the judgment. This being so, a court of equity will
not require the paj^ment of the purchase money by Harvey,
and force him to his action upon ^^'^ the covenant contained
in his deed from Ryan, even if he were solvent, but the fact
of his insolvency is an additional reason for equitable inter-
ference.
It is claimed that at the time Harvey purchased the lot
the ejectment suit was pending, and that this is an additional
reason why a court of equity should not entertain him. The
deed to Harvey is with covenants of general warranty of
title, and although the action of ejectment was pending, yet
this will not prevent him from enjoining the collection of
the purchase money.
Care should be taken, however, to distinguish the case here
from that class of cases in which injunctions to prevent a
sale under a deed of trust, whether executed to secure de-
ferred payments of purchase money or to secure general
indebtedness, have been freely granted in this state and in
Virginia, upon the allegation that there is a cloud upon the
title to the land about to be sold. In such cases, the injunc-
tion is granted until the cloud on the title is removed. This
908 American State Reports, Vol. 115. [W. Virginia,
is done in the interest of all parties, that there may be no
sacrifice of the property, and that the title of the purchaser
may be assured.
For the reasons given, we reverse the decree of the circuit
court, dissolving the injunction and dismissing the bill, and
remand the cause.
A Purchaser of Land who is in undisputed possession, and has re-
ceived a conveyance of the same with warranty, cannot ordinarily
have relief in equity against the payment of the purchase money,
on the ground of a defect in the title: Abbott v, Allen, 2 Johns. Ch,
519, 7 Am. Dee. 554; Coleman v. Eowe, 5 How. 560, 37 Am. Dec. 164;
Vick V. Percy, 7 Smedes & M. 256, 45 Am. Dec. 303. An injunction
to prevent the collection of the purchase money will not be granted
where the purchaser's title is neither threatened by suit nor clearly
shown to be defective: Ralston v. Miller, 3 Rand. 44, 15 Am. Dec.
704. But relief in equity will be given a purchaser against his obli-
gation to pay, if it appears that he holds under a conveyance with
covenants of warranty, that he has been evicted by title paramount,
and that his grantor is insolvent: Cullum v. Branch Bank, 4 Ala. 21,
37 Am. Dec. 725. A court of equity may restrain the grantor from
collecting the whole amount due for purchase money, if the cove-
nants have been actually broken and he it insolvent: Woodruff v.
Bunee, 9 Paige, 443, 38 Am. Dec. 559.
AMMONS V. TOOTHMAN.
[59 W. Va. 165, 53 S. E. 13.]
DEEDS — Exceptions and Beservatioiis. — An exception keeps a
deed from passing the thing excepted; a reservation reserves some-
thing out of the thing granted, (p. 912.)
DEEDS — Exception of Oil-well— Deepening of Well. — If a deed
conveys oil in land "except a well now producing oil," and that
well, ceasing to be productive, is deepened by the lessee to a different
sand rock, the oil produced from such rock is within the exception
of the deed. (p. 914.)
George C. Baker, for the appellant.
Moreland & Glasscock and Charles Powell, for the appel-
lees.
i«» BRANNON, J. William R. Shuman and wife owning
a tract of land made a lease of it for the production of oil and
gas, which lease *®® came by assignment to the South Penn
Oil Company. The lease provided for payment to Shuman
Jan. 1906.] Ammons v. Toothman. 909
of one-eighth of the oil as royalty. Shuman sold half of this
eighth of the oil and died owning the other half of the eighth.
Under this lease the South Penn Company drilled two wells
on the land, one unproductive, the other productive out of
what is called the Big Indian sand. This well was nineteen
hundred feet deep, and produced oil in paying quantity.
This well was called Well No. 1. On the death of William
Shuman and Minerva Shuman, his wife, said half of said
eighth oil royalty payable to them under said lease went to
three heirs, one of them being Charlotte Toothman. The said
tract of land was divided between the three heirs, Charlotte
Toothman getting for her share a tract of fifty-seven acres
and a fraction; but the oil was not. divided, but left in com-
mon for the three heirs, the three heirs owning the said half
of one-eighth royalty in common. The said producing well
was on Charlotte Toothman 's separate tract, though the oil
therefrom belonged to all three heirs. Charlotte Toothman
and her husband made a deed, December 6, 1897, to Corbly
Ammons and Isaac Ammons, conveying the said tract of
fifty-seven acres in fee, and also conveying one-half of the
oil and gas owned by Charlotte Toothman in the entire lands
which had been owned by her father and mother, William
R. and Minerva Shuman, "except the well that is now pro-
ducing oil on said land." The language of the deed as to
this is as follows: "The second partys is to have one-half of
the oil and gas that may hereafter be produced under the
land that belonged to Minerva Shuman and William R. Shu-
man, and the first party reserves the one-half of said oil and
gas. This deed means I/2 half of the first party interest in
said oil & gas, except the well that is now producing oil, on
said land."
At the time the deed was made said Well No. 1 was pro-
ducing oil from the Big Indian sand in paying quantity, but
later it ceased to produce oil in paying quantity, and the
lessee, the South Penn Company, drilled said well from
one thousand to eleven hundred feet deeper, down to a lower
and different sand rock stratum from the Big Indian, aban-
doning the latter sand rock. The deeper sand rock or stratum
being known as the Fifth sand rock, not known to be an
oil-producing stratum at the date of the deed, as no wells
in that section ^^"^ of the country had then been drilled to
that sand or stratum. Said well on reaching that deeper
910 American State Reports, Vol. 115. [W. Virginia,
stratum found oil in paying quantity. The South Penn Oil
Ck)mpany produced oil from this lower stratum and recog-
nized Charlotte Toothman as owning her full share in the
oil produced from said lower stratum, and delivered it to her
credit to the Eureka Pipe Line Company for transportation,
and did not recognize Ammons as having any interest in the
oil from that well. Isaac Ammons having sold his interest
to Corbly Ammons, the latter brought a suit in equity in
Monongalia county against Charlotte Toothman and said two
companies for discovery and account for the oil produced from
said Fifth sand through Well No. 1, and to have a decree
against those liable therefor, and to have a decree declaring
him entitled to half the share of oil of Charlotte Toothman
produced, or to be produced, through said well from said
Fifth sand, the bill thus claiming that the deed from Tooth-
man to Ammons reserves only the Toothman share produced
from the Big Indian sand and excepted no oil in the lower
sand, but that Ammons was entitled to half of that oil. The
court sustained a demurrer to the bill as to this claim of Am-
mons, and he appealed.
The question is, Does that deed convey to Ammons the
half of Mrs. Toothman 's share of oil coming from the lower
sand rock, or does it except the oil produced from that rock
through said well, and exclude Ammons from any interest in
that oil? The main argument for the position that the deed
confers half of Toothman 's interest in the oil from the lower
sand rock is, that when the well ceased to produce oil it was
an abandoned well, it became a dry hole, and that Toothman 's
estate in it ceased, and she no longer had any estate in it.
For this position the case of Steelsmith v. Gartlan, 45 W.
Va. 27, 29 S. E. 978, 44 L. R. A. 107, is relied upon, because
of its holding **The completion of a nonproductive well,
though at great expense, vests no title in the lessee." That
case refers to the lease. It means that if, under the usual
oil lease, a nonproductive well is drilled and abandoned, no
estate vests in the lessee. That is not the question or test
here. No one can claim that under such lease, if the lessee
go on in further exploration, his right is lost. He may go on
in a reasonable time. But that is not the question here, be-
cause when that well ^^* produced oil in paying quantity
from the upper sand, an estate vested in the South Penn Com-
pany and remained vested in it. The bill admits that that
Jan. 1906.] Ammons v. Toothman. 911
well produced oil in paying quantity. Therefore, an actual
estate vested in the lessee, and though that well ceased to pro-
duce oil from the upper sand, the lessee had an estate still
under which it had right to go on lower with the well, and
did so. The lessee's right was not lost or abandoned, and
neither was Mrs. Toothman 's right gone. The lessee chose to
retain its estate and well by sinking that well deeper, and its
right continued and so did the right of Mrs. Toothman. Her
right depended on the right of the South Penn Oil Company,
followed it, and was measured by it. As long as that Well
No. 1 was a well for the lessee, it was also a well for Mrs.
Toothman. That weU was not abandoned by the company.
But the argument is, not that the lease failed, but that the
company abandoned the upper sand; it did not abandon the
lease or lose its estate under the lease, but the claim is, that
the company abandoned that well so far as the upper sand
was concerned. In other words, it claimed that it abandoned
that well. This is a very refined argument — very technical.
It is argued that when sunk to a lower sand, a quick change
was wrought in that well and it became a new well — another
and different well from what it had been. This is a very
refined and technical argument. It is not a new well, not a
different well, in any sense; it is only a deeper well. The
nineteen hundred feet which had been bored remained still
a part of that well, its greater part. The hole was the same
hole in the ground ; its identity was not gone. The mouth of
the well from which the oil issued was the same. The oil
from the lower sand came through that nineteen hundred feet
and issued from the mouth of the well, from the Fifth sand,
just as it had from the Big Indian sand. The nineteen hun-
dred foot depth and the mouth of the well were used and
utilized in the production of the oil from the lower sand.
What if the oil came from the lower sand? It came through
the nineteen hundred feet, and issued from the old orifice.
I cannot see that the identity of the well was lost. A well
remains the same well though continued down into the earth
deeper. To say that Toothman was tied down by the excep-
tion in the deed to oil coming from the Big Indian sand is
unreasonable. Where is the language ^*^ in the deed that
does this? The sinking of the well lower was an eventual-
ity or a contingency not unlikely to occur, and we may say
might be regarded as probable. Oil wells are often sunk
912 American State Reports, Vol. 115. [W. Virginia,
deeper. The claim is that Mrs. Toothman in that exception
in her deed had her mind only on oil produced from the upper
sand, and intended to except only that. Where are the words
to speak that intent ? The exception is of that well, meaning
all oil produced through it, and Ammons was excluded from
ownership in that well. The plain intent was to exclude him
from any interest in oil produced from that well, come from
where it might in the future. Mrs. Toothman may fairly be
said to have intended to retain her interest in all oil coming
through that well so long as the lessee should operate it by
producing oil through it, in whatever manner the lessee might
operate that well. There was the lessee actually operating
the well at the date of the deed, and to whatever depth the
lessee might sink that well, to that depth also the exception
in the deed must go. Did the parties mean anything else?
In the first place, here is a broad exception of that well, ex-
cluding Ammons from oil produced in it. It is an exception,
not merely a reservation. Strictly speaking, an exception
keeps the deed from passing the thing excepted; a reservation
reserves something out of the thing granted. Mrs. Toothman
never granted oil in, or to come through, that well. That ex-
ception means that the deed was not intended to confer on
Ammons any right at all as to that well or its product. I
say there is that broad language. Such are the words of the
deed speaking the intent under all circumstances. But sup-
pose we seek probable intent outside the words. Suppose Mrs.
Toothman had been told that the deed would except only the
oil from the upper sand. Do you think she would have
agreed to it? Suppose she had been told that if the lessee
should bore lower and get a rich stream of oil from a rich
sand rock, she would have no interest in it. Think you she
would have agreed to it? Did either side mean it? And yet
great stress is laid in argument upon a supposed intent to
limit the exception to the Big Indian sand, and to make the
deed pass to Ammons from the Fifth sand. I say the infer-
ence is very strong against any such intent. If we grope
about for intent outside the words of the deed, it is much
more reasonable to say that Mrs. ^'^^ Toothman intended to
retain all her oil in that well, come from what depth it might,
than to limit herself to one sand rock and give to Ammons
all oil below it. The deed does not mention any sand rock.
To say that it refers to only one is going outside the deed and
Jan. 1906.] Ammons v. Toothman. 913
making the deed do what its words do not do. I would em-
phasize the fact as important that when that deed was made
the well was in actual operation producing oil, with a vested
estate in the lessee to continue that well to a lower depth,
and as Mrs. Toothman excepted that well her right was co-
equal with that of the lessee and followed the lessee's right
as long as it existed. It was not a new well to the lessee,
neither was it a new well as between Mrs. Toothman and
Ammons. A lease in 1831 was made to mine coal in lands.
Under it two seams were opened and mined. In 1834 a will
gave the widow of the lessor "rents, issues and yearly pro-
ceeds for life" in the lands. In 1856, the lease being nearly
expired and the coal in the two seams which had been worked
becoming exhausted, a new lease was made, and under it the
mine was sunk to another seam of coal, the Brockwell seam,
at a depth of one hundred and eighteen fathoms below the
seam which had been opened. That seam was utterly un-
known until 1846. The qu&stion was, Did the widow have
right, as life tenant', in that lower seam of coal under the rule
that a life tenant can work to exhaustion on a coal mine
opened when the life estate vests? It was claimed, as in this
case, that this difFerent seam of coal far below the upper ones
was a new mine, not one opened at the date of the commence-
ment of the life estate. The widow was held entitled to the
rents of the lower vein, because the deeper excavation was
only a continuance of the old mine. The opinion says: "I
am clear that this is the old mine, Clavering v. Clavering,
2 P. Wms. 338 (a), did not confine the right to one seam.
If there be one shaft by which you can work five seams, and
which are all let, but only one is worked at first, I am of
opinion that when the lease begins to work the other seams
it cannot be said to be opening a new mine. I have no doubt
that it is substantially and practically the old mine. I agree
that if a man has opened a shaft for winning coal, and he
finds in another part of his estate mines of lead or ironstone,
which could not be got by means of the old shaft or opening,
this would be opening a new mine; but here the lessees were
at *^* liberty to open other shafts, and to work all coal and
ironstone, and I think that this is only a repetition of the
working of the old mine": Spencer v, Scurr, 31 Beav., 334
Just so in this case. Here the South Penn had bored to a
certain stratum or seam at the date of this exception. It
Am. St. Eep,, Vol. 115— oS
914 American State Reports, Vol, 115, [W, Virginia,
went on down to another stratum and the rights of Mrs,
Toothman went with the South Penn's rights into the lower
oil stratum. Mrs. Toothman intended to keep to herself all
of her share of the oil produced in that well then being worked
by the lessee, and neither of the parties contemplated that
her right should stop at the Big Indian sand. No such idea
was in their heads. The deed does not do so.
I cite Crouch v. Puryear, 1 Rand. 258, 10 Am. Dec. 528,
not as conclusive, but as leaning in favor of the position
above taken. The syllabus says the life tenant may sink new
shafts into the same veins of coal, and that he may go through
a seam already opened, and dig into a seam that lies under
the first. The seams were separated by slate. How thick
does the slate have to be to make it another vein ? Certainly
the case goes that far. But the answer set up right under
the life tenant "to sink new shafts and pursue the coal in
every direction and to every extent they may think proper
to obtain the coal." The answer claimed that all the coal
in the land was part of the same mine. The attorneys argued
that the word "mine" "included the whole mass or vein of
coal contained within the land. ' ' The court simply dissolved
the injunction specifying no reason. So, we may say the
court took this view. The syllabus was not prepared by the
court. If there be a shaft into a vein of coal, and the life
tenant exhaust it, must he do without coal when by extending
his shaft to a lower vein he can get it? The words "the
well now producing oil" are not descriptive of the oil; they
do not merely mean the oil now being produced ; they do not
describe the oil to be produced from any particular sand;
but they were used to describe and identify the well. They
were intended to excluded Ammons from a particular well.
Decree affirmed.
The Term "Exception," as Used in a Deed means some part of the
estate not granted, while the term "reservation" means something
taken back from the thing granted: Pritchard v, Lewis, 125 Wis. 604,
110 Am. St. Kep. 873. The two words, however, are sometimes used
interchangeably. Thus a provision. in the descriptive clause in a deed
that "the grantor reserves the ownership of the well on or near the
east line of the lot hereby conveyed," constitutes an exception from
the premises conveyed: Elsea v. Adkins, 164 Ind. 580, 108 Am. St.
Bep. 320.
April, 1906.]. State v. Dorb. 915
STATE V. DORR.
[59 W. Va. 188, 53 S. E. 120.]
EECOGNIZANCE. — Oyer is Demandable of a record and recog-
nizance, (pp. 916, 917.)
RECOGNIZANCE — How Entered into. — A recognizance is an
obligation entered into by the prisoner and his recognizors appearing
before the court or justice and acknowledging themselves to be in-
debted to the state in a certain sum, upon a certain condition, which
is entered and becomes a part of the record, (p. 917.)
EECOGNIZANCE — Manner of Taking Forfeiture. — A recog-
nizance conditioned that one accused of crime shall appear before
the circuit court on the first day of a specified term, and not depart
thence without leave of court, can be forfeited only by calling him
on the recognizance sometime during the term, and entering his de-
fault of record if he fails to appear, (p. 920.)
RECOGNIZANCE — Time of Taking Forfeiture. — If the term
of court at which one accused of crime is recognized to appear ad-
journs without his default being entered, the recognizance cannot
thereafter be forfeited, and the recognizors are released from liabil-
ity, (p. 921.)
C. W, May, attorney general, for the state.
Hall Bros., for the defendants in error.
»8» SANDERS, J. William Kesler, being charged with a
felony, had his preliminary hearing before Vincent Ilamrick,
a justice of Webster county, on the twenty-third day of Au-
gust, 1904, which resulted in the prisoner being committed
to jail to await the action of the grand jury. On the first
day of September next thereafter, a recognizance in the pen-
alty of five hundred dollars was executed by Kesler, with
the defendants, C. P. Dorr and P. M. McElwain, as his sure-
ties, conditioned for the appearance of the prisoner before
the judge of the circuit court of said county on the first day
of the next term thereafter, and not to depart without leave
of court, and to answer the action of the grand jury upon
such charge. At the term of court at which the prisoner was
recognized to appear, which was on the eleventh day of No-
vember, 1904, an indictment was found and returned against
Kesler upon the charge for which he was examined and com-
mitted, by the jiustice. At the next term of court there-
after, which wa.s on the eleventh day of January, 1905,
Kesler was called upon his recognizance, and he not ap-
pearing, his default was entered, and a scire facias awarded
916 American State Reports, Vol. 115. [W. Virginia,
against the defendants, C. P. Dorr and P. M. McElwain, his
sureties, requiring them to appear before the court on the
first day of the next term, to show cause why judgment should
not be entered against them upon the recognizance. The
scire facias being issued and returned, the defendants ap-
peared and craved oyer of the recognizance and record, which
it was claimed showed the forfeiture thereof, and of the in-
dictment, and record showing its findings, and thereupon de-
murred to the scire facias, which demurrer was sustained, and
the action dismissed, to which judgment the state applied for
and obtained a writ of error.
There are several reasons advanced by the defendant in
error to support the action of the court in sustaining the
*^* demurrer and dismissing the action, one of which is that
the bond was given for the appearance of Kesler at the next
term of the circuit court thereafter, which was held in No-
vember, 1904, and at that term he was not called upon his
recognizance, and his default entered of record, and not hav-
ing been so called, the fact that he was called at the succeed-
ing term, held in January, 1905, and his default entered,
could not operate to forfeit the recognizance. In disposing
of this question, it will be necessary to know what the circuit
court, in passing upon the demurrer, should have considered,
as it does not appear from the scire facias when the default
of Kesler was entered, and the writ awarded. "While it is
not assigned as error in the petition, yet in the argument,
upon behalf of the plaintiff in error, it is insisted that the
defendants in error could not claim oyer of the record show-
ing the forfeiture of the recognizance, and the indictment
and the record showing its finding, but that in determining
the sufficiency of the scire facias upon demurrer, the writ
itself, together with the recognizance, after oyer claimed,
could only be looked to. Chitty's Pleading, 441, says: "Oyer
is not demandable of a record; nor of a recognizance." And
in Andrews' Stephens' Pleading, 160, it is also said: "Oyer
was formerly demandable, not only of deeds, but of records
alleged in pleading, and of the original writ also ; but by the
present practice it is not now granted either of a record or
an original writ." And 2 Saunders' Pleading and Evidence,
839, says: "Oyer is not demandable of a writ, nor of a rec-
ord."
But whatever question there may be elsewhere as to this
mode of procedure, it seems to be the law in this state and
April, 1906.] State v. Dorr. 917
in Virginia that oyer is demandable of a record and recog-
nizance. In State v. McCown, 24 W. Va. 625, oyer was
claimed of the record upon which the scire facias was founded,
which was granted and the demurrer overruled. Judge
Green, in delivering the opinion of the court, said: "The
record on which the scire facias was awarded is a part there-
of, as oyer was claimed by the defendant." And in Wood
V. Commonwealth, 4 Rand. 329, it is said: "A party may
plead nul tiel record, and if, upon inspection by the court,
the record is not such as is described in the pleadings, he
will have judgment; or he may claim oyer of the record,
*** which makes the record a part of the pleadings in that
ease (18 Vin. Abr. 184, pi. 20, 21), and when it is spread
upon the record by oyer, if the party admits that the record of
which oyer is given him is the true record, and relies that it
does not support the pleadings or scire facias, it seems to me
that he should not deny that there is such a record, by plea ;
but that he ought to demur, upon the ground that it varies
from the pleadings or scire facias." And, also, in the case
of Hutsonpiller's Admr. v. Stover's Admr., 12 Gratt. 579,
a scire facias was brought to revive a judgment, and de-
fendant pleaded payment, and objection was made by the
defendant that the court improperly permitted the judgment
sought to be revived to go in evidence, because it appeared
that the judgment was against Hutsonpiller alone, while the
scire facias set out a judgment against him and Paulser
Huber, jointly, and the court, by Lee, J., after saying that it
was diflBcult to determine whether the office judgment was
set aside as to both defendants or Hutsonpiller alone, says:
"But the question of variance does not in fact arise in this
case. To raise it, the party should have pleaded nul tiel
record, which would have put the plaintiff in the scire facias
to the production of a record such as was alleged ; or he should
have craved oyer of the record, and demurred"; citing Wood
V. Commonwealth, 4 Rand. 329. Commonwealth v. Pulks, 94
"Va. 585, 27 S. E. 498, is where a recognizance was taken by
the circuit court, which was subsequently declared forfeited
and a scire facias awarded thereon, and upon its return the
recognizors appeared and craved oyer of the recognizance,
and demurred to the scire facias. A recognizance taken
either by a justice or by the circuit court is a matter of rec-
ord, and we think, under the authorities cited, oyer is demand-
able of it
918 American State Reports, Vol. 115. [W. Virginia,
We have throughout this opinion referred to the writing
in question as a recognizance, but while we have so referred
to it, it is because it has been proceeded upon by scire facias.
It is not in the common-law form of a recognizance, but is a
bond with conditions, signed by the parties and approved by
the justice of the peace. It does not even appear that the
parties signed in the presence of the justice, or acknowledged
it before him. A recognizance is where the prisoner and his
recognizors appear before the court or justice and acknowl-
edge *®^ themselves to be indebted to the state in a certain
sum, upon a certain condition, which is entered upon the rec-
ord, and thereby becomes a part of it. While the writing
may not be in the form of a recognizance, yet, under our
statute, if it possesses the essentials of a recognizance, it can-
not be quashed simply for informality. Code, chapter 156,
section 20 : * * No recognizance shall be quashed, or in any man-
ner affected or impaired by reason of any informality therein,
if it sufficiently appear therefrom what was intended there-
by." And then it is provided in section 10, chapter 162, of
the Code that no action or judgment or recognizance shall be
defeated or arrested by reason of any defect therein, if it
appear to have been taken by the court or officer authorized to
take it, and be substantially sufficient. But while these sec-
tions thus provide, yet it must be remembered that they
speak of a recognizance, and it would seem that it should, at
least, have the essentials to constitute it such. A recog-
nizance certainly, whether it assumes the form of a bond or
the usual form of a recognizance, should be acknowledged
before the court or officer taking it. "A recognizance is an
obligation of record, entered into before some court or magis-
trate duly authorized to take it, with condition to do some
particular act. In criminal cases the usual condition is for
the accused to appear and stand trial. A bail bond is an
obligation under seal given by the accused with one or more
sureties, and made payable to the proper officer, with condi-
tion to be void upon performance by the accused of such acts
as he may legally be required to perform. A recognizance
differs from a bail bond merely in the nature of the obliga-
tion created. The former is an acknowledgment of record
of an existing debt; the latter, which is attested by the sig-
nature and seal of the obligor, creates a new obligation": 3
Am. & Eng. Ency. of Law, 6S6, 687. But the question as to
April, 1906.] State v. Dorr. 919
whether or not the bond sought to be recovered upon here
should be treated as a recognizance upon which a scire facias
could be awarded is not raised by counsel, and we deem it
unnecessary to decide this question, because, even putting it
upon the ground that it is a recognizance, under our statute,
regardless of its informality, still the action of the circuit
court in sustaining the demurrer will have to be upheld for
another reason.
Code, chapter 156, section 16, provides that where a justice
*®^ considers that there is sufficient cause for charging one
with an offense, that the commitment shall be for trial, and
the recognizance be for the appearance in the circuit court
on some day of the term then being held, or on the first day
of the next term thereof, and under section 3 of chapter 162
of the code, it is provided that the bond shall be conditioned
for the appearance of the accused before the court, judge or
justice before whom the proceeding on such charge will be,
at such time as may be prescribed by the court or officer
taking it, to answer for the offense with which such person is
charged, and shall not depart thence without leave of the
court, judge or justice. The recognizance in this case is con-
ditioned: "Now, if the said William Kesler shall appear be-
fore the judge of the circuit court of Webster county on the
first day of the next term thereof, and not depart thence
without leave of the court, and shall answer the said action
of the grand jury, then this obligation be void, else of force."
It is claimed by the defendant in error that the recognizance
required the appearance of Kesler at the November, 1904,
term of the circuit court, and it became the duty of the court
at that term to call the prisoner upon his recognizance, and
if he failed to appear, to enter his default upon the record,
and declare the recognizance forfeited, and unless this was
done, it operated to discharge the recognizors. It appears, as
we have observed, that at the November term, 1901, no order
was entered showing that Kesler was called upon his recog-
nizance, and that he failing to appear, his default entered of
record and his recognizance declared forfeited, but that at
the succeeding term, January, 1905, he was called upon his
recognizance, and failing to appear, it was declared forfeited,
and a scire facias awarded thereon. In determining this
question, it will be necessary to consider that part of section
7, chapter 162, Code, which says: "When a person, under
920 American State Reports, Vol. 115. [W. Virginia,
recognizance in a criminal case, either as a party or witness,
fails to perform the condition thereof, if it be to appear be-
fore a court, his default shall be recorded therein. ' ' In State
V. Lambert, 44 W. Va. 308, 28 S. E. 930, it was held to be
necessary to call the accused upon his recognizance, and to
enter his default of record, in order to charge the recognizors,
and that the record is the only evidence as to whether or not
this has been done. But the question as to when the accused
should be *®^ called upon his recognizance and his default
entered of record has not been decided in this state, but, from
the very terms of the recognizance, it would seem that this
should be done at the term of court at which he is recognized
to appear. In this case, the undertaking of the recognizors
was that the accused should appear on the first day of the
next term of court thereafter, and not depart thence without
leave. Did he appear, and did he depart without leave?
There is nothing upon the record which answers this question.
If he did not appear, and his case was not disposed of, he
should have been required to enter into a new recognizance.
Who knows but what the party was present in court every
day of the term to answer to any indictment returned against
him. He was not called to answer, and the court adjourned
without his having been called. Now, can it be said that this
provision of the recognizance, which says he shall not depart
thence without leave of court, means that the recognizors
stipulate that they should be bound not only that he would
appear on the first day of the term and during the remainder
of that term, but that they should be bound for his appear-
ance from term to term to respond to the indictment, until
it was finally disposed of. This certainly cannot be the mean-
ing of this provision, because the condition is that the accused
shall appear on the first day and not depart thence without
leave of court — that is, not depart the court at that term
without leave. And when the court adjourned, without the
prisoner having been called upon his recognizance, it would
seem that he was given leave to depart. In State v. Mackey,
55 Mo. 51, it was held that where, pursuant to the terms of
a recognizance, a prisoner presented himself at the term of
court therein named, and remained in court during the term,
ready to obey its order, and no measures were taken to com-
mit him or otherwise secure his appearance at any subsequent
term, on adjournment the bond would be discharged, and
April, 1906.] State v. Dorr. 921
could not be forfeited by the failure of the prisoner to pre-
sent himself at a subsequent t6rm. It may be said that in
the case at bar the prisoner did not present himself. There
is nothing to show that he did; neither is there anything to
show that he did not do so. We may presume that he did,
inasmuch as he was not declared to be in default. An indict-
ment was returned against him at that *®^ term, but he was
not called to answer it. This was the time that the defend-
ants in error obligated themselves that he should appear and
answer. They did not agree to be bound for his appearance
at a subsequent term. The state is the moving party. It is
the duty of the state to call for the prisoner to answer the
charge if any should be preferred against him. The prisoner
has a bond to appear there at that time, and he is supposed to
be there, and when his presence is desired, he should be called
upon to appear, and if not called and his default entered at
that term, his bond cannot be forfeited at a subsequent term :
See, also. State v, IMoore, 57 Mo. App. 662. "If a recognizor
fail to appear at the term to which he is recognized, and for-
feit is not then taken, it cannot be taken at a subsequent term.
The recognizance in such case is inoperative, and the bail
discharged." The recognizance in this case was conditioned
for the appearance of the accused on the first day of the next
term of the circuit court of his county, to answer the state of
an indictment for forgery, and abide the order of the court,
and not to depart therefrom without leave thereof. This re-
cognizance is equally as broad in its terms as the one we are
considering, and there the court held that default must be
entered at the term to which the defendant was recognized
to appear. To the same effect, see McGuire v. State, 124
Ind. 536, 23 N. E. 85, 25 N. E. 11. And, also, in the case of
Swank v. State, 3 Ohio St. 429, it is held: **A recognizance in
a criminal case conditioned 'that the prisoner appear at the
next term and thereafter, from day to day, and abide the
judgment of the court, and not depart the court without
leave,' binds the surety for the appearance of the prisoner
during the first term of the court only, and if the court ad-
journs without making any order, the sureties are exonerated
from their recognizance," and, speaking in this case, the
court said: "Before the expiration of the terra, it is the duty
of the state to have the prisoner called, require a new recog-
nizance for his appearance at the next term thereafter, and
922 American State Reports, Vol. 115. [W. Virginia,
on failure of the prisoner to enter into the new recognizance,
he should be committed to jail." In the case of Keefhaver
V. Commonwealth, 2 Penr. & "W. 241, Chief Justice Gibson
says: "Recognizances, being for the appearance at the next,
and not at any succeeding term, are to be discharged at the
end of the *®® term by committing the prisoners, delivering
them on bail, or setting them at large. But to avoid the
trouble of renewing the security, it is sometimes the practice,
when the bail consent, to forfeit the recognizance and respite
it until the next term; and this answers the purpose per-
fectly well." In the case of People v. Derby, 1 Park. Cr.
Rep. 392, it was held: "A recognizance, conditioned for the
appearance of M. at the next court of sessions, to be held
in the courthouse at the city of H., to be tried by a jury on
two indictments for forgery, is to be construed as requiring
the appearance of M. at the next court of sessions to be held
in the city of H. and not at the next court of sessions to be
held at which a jury shall be summoned. And where such a
recognizance was taken in January, 1851, and, at a court
of sessions, held in June following, M. was defaulted and his
recognizance declared forfeited and ordered to be prosecuted,
and in an action on the recognizance, it appeared that a reg-
ular term of the court of sessions had been held at that place
in March of the same year, though no jury had been sum-
moned to attend at such ^March term, it was held that no
breach of the condition of the recognizance had been shown,
and judgment was given for the defendant." In People v
Hainer, 1 Denio, 454, it is said: "Where, in a declaration on
a recognizance entered into by a party and his sureties for
the appearance of the former at the next general sessions, to
answer, etc., and to obey the order of the court and not de-
part without leave, etc., the plaintiffs averred that at the
then next term of the sessions, the recognizance was respited
and continued until and to a succeeding term, and assigned
for a breach, that at such succeeding term the defendant
made default in appearing, held, that no sufficient breach of
the condition was shown, and that the declaration was in-
sufficient. * '
In Goodwin v. Governor, 1 Stew. & P, 465, it is held that
where a party has been recognized to appear at a particular
term to answer for a breach of the peace, and the state takes
no steps toward a forfeiture of the recognizance (no indict-
ment or presentment being preferred or continuance had),
April, 1906.] State v. Dorb. 923
such failure operates as a discontinuance, and discharges the
accused. And, also, in State v. Murdock, 59 Neb. 521, 81
N. W. 447, it is held: **A recognizance in a bastardy pro-
ceeding, ^^"^ conditioned that the accused 'shall be and ap-
pear before the district court on the first day of the next
term thereof, and appear thereat from day to day to abide
the order of the court,' is limited to the term at which it
exacts the appearance. A continuance of the cause to a
subsequent term of court is not within the contract of the
recognizance, and, if made, a nonappearance of accused at
the term to which the continuance carries the cause is not
a breach of such recoganizance. " The supreme court of
Georgia holds: "Before bail in a criminal case can be made
liable, the record must show that the principal was called
and did not appear": Park v. State, 4 Ga. 329.
In view of the conclusion we have reached, it is not neces-
sary to refer to the other grounds assigned in support of the
demurrer.
There being no error in the judgment complained of, it is
afl&rmed.
A Recognizance is an Ohliqation entered into before a court of recorii
or a magistrate, with a condition to do some particular act, as to
keep the peace or appear and answer to a criminal accusation. A
recognizance differs from a bail bond merely in the nature of the
obligation created. The former is an acknowledgment of record of
an existing debt; the latter, which is attested by the signature and
seal of the obligor, creates a new obligation: People v. Barrett, 202
ni. 287, 95 Am. St. Rep. 230.
A Becognizance Conditioned that the Accused Shall Appear and an-
swer the accusation and abide the order of the court, given under a
statute declaring that if the accused shall fail to appear at the term
of the court to which he is recognized, his recognizance shall be for-
feited, the forfeiture may be made at any time during the term, and
after as well as before a verdict against him: Neininger v. State, 50
Ohio St. 394, 40 Am. St. Bep. 674.
924 American State Reports, Vol. 115. [W. Virginia,
RUFFNER BROTHERS v. DUTCHESS INSURANCE
COMPANY.
[59 W. Va. 432, .53 S. E. 943.]
FIRE INSUBANCE — Construction of Iron-safe Clause. — Tn de-
termining what constitutes such an inventory as is contemplated by
an iron-safe clause in a policy of insurance, all parts of such clause
should be construed together, (p. 926.)
FIBE INSURANCE — Iron-safe Clause. — The Inventory of a
stock of merchandise, required by an iron-safe clause in a policy
of insurance, is a list of all the articles in the stock, so itemized as
to show the kinds and numbers or quantity thereof, with their values,
(p. 926.)
FIRE INSURANCE — Iron-safe Clause. — What is an Inventory
of a stock of merchandise, within the meaning of that term as used
in the iron-safe clause of a policy of insurance, is to be determined
in view of the peculiar circumstances of each case. Where a store
is opened with an entirely new stock of goods at or about the date
of the issuance of the policy, the invoices, giving the quantities of
the goods, with their cost prices, may, if preserved for that purpose,
constitute an inventory, (pp. 925, 927.)
FIRE INSURANCE — Cancellation of Policy as a Waiver of
Forfeiture. — A violation of a clause in a fire insurance policy against
increase of hazard is not waived by the insurer canceling the policy
by letter at about the date of a fire, on the ground of such violation,
(p. 928.)
APPEAL — Judgment by Appellate Court. — The supreme court,
on reversing a judgment for the plaintiff, and setting aside the ver-
dict for the insufficiency of the evidence and the refusal of the trial
court to direct a verdict for the defendant, will not remand the case
for a new trial, but will render judgment for the defendant, if in-
justice will not thereby be done. (p. 930.)
Chilton, MacCorkle & Chilton and Murray Briggs, for the
plaintiff in error.
Mollohan, MeClintic & Mathews, for the defendants in er-
ror.
433 POFFENBARGER, J. The Dutchess Insurance Com-
pany complains of a judgment for the sum of six hundred
and forty-nine dollars and twelve cents, rendered against it
by the circuit court of Kanawha county, on the twenty-
seventh day of ^March, 1905, in favor of Ruffner Brothers,
assignees of A. Haws and his son, H. H. Haws, who were do-
ing business as The Haws Company.
The policy of insurance, under which the loss sustained
by The Haws Company occurred, had covered a frame store
building, a stock of general merchandise kept therein, and
April, 1906.] Ruffner Bros. v. Dutchess Ins. Co. 925
'*^'* the store and office furniture and fixtures. The stock of
goods so insured was entirely new at the time of the issuance
of the policy. After the policy had been in force a short
time, an addition to the building in which the store was kept
was made for the accommodation of a steam gristmill, and
the mill installed therein and operated to an extent not clearly
indicated, before the fire occurred. In the meantime. Haws
had attempted to obtain insurance on the mill from the agents
from whom he had secured the policy on the store. They
had declined it, and he had vainly tried to obtain it from an-
other agency. Some da^'s before the fire occurred a member
of the firm of Lohmeyer and Goshorn, the agents, had in-
formed him they would give him no insurance on the mill
but they would carry his store at a six per cent rate, which
was an increase of four per cent over that of the policy he
then had.
The defenses relied upon by the defendant were two in
number: 1. Noncompliance with that part of the iron-safe
clause which required an inventory to be made within thirty
days from the issuance of the policy, unless one had been
taken within twelve calendar months prior to the date of its
issue; and 2. Violation of that clause of the policy which
declared it would become void if the hazard should be in-
creased by any means within the control or knowledge of the
insured, unless permitted or waived by an indorsement on the
policy or attached thereto.
As constituting substantial compliance with the require-
ment of an inventory, the plaintiff relied upon his invoices
or bills. He reasonably contended that, it being a new store,
the first lot of goods having been placed in it but a few days
before the issuance of the policy, these bills constituted a
complete list, by items, with the values annexed, of all the
goods that had been put into the store. At the date on
which the first lot was taken into the store and put upon the
shelves, the invoices therefor made up as complete and ac-
curate a list of the goods as if they had been relisted into a
book. All goods subse(|uently put in, for which bills were
likewise received and kept, were additions to the stock. The
purpase and objcn-t of an invoice is not very clearly defined in
insurance law. I\I()st of the courts in dealing with it simply
refer to the legal definition of the term inventory. This falls
***'^ far sliort of indicating what it is intended for, the fune-
926 American State Reports, Vol. 115. [W, Virginia,
tion it performs between the parties. It seems to me per-
fectly plain that the requirement is intended to secure, in the
interest of the insurance company, and possibly both parties,
a basis, or starting point, upon which to found an estimate of
the value of the stock in case of a loss. It, of itself, indicates
nothing except the quantum and value of the stock at the
time of the taking thereof. It does not indicate what they
amounted to at any previous or subsequent date, nor the
average stock. Having an inventory at a given date, however,
and the invoices for goods subsequently put in, the determina-
tion of the aggregate value of all the goods in the store at
the date of the inventory and those subsequently put in, is a
mere matter of addition. All insurance policies on mer-
chandise require the production of the invoices as well as the
inventory. Another requirement which goes with the in-
ventory and the bills, as an ally, in working out the estimate,
is the book in which the account of sales is kept. After as-
certaining from the inventory and the bills for the goods sub-
sequently put in the aggregate as above stated, the quantities
and values of the goods sold out of the store are deducted,
and thus a fair and reasonable indication, as to the quantities
and value of the goods at the date of the fire is obtained.
The three clauses of the iron-safe provision require the in-
ventory and keeping of the books and their protection by
means of the iron safe. In determining what they mean,
what more reasonable view could be taken than that they
must be all construed together? Some courts exclude the in-
voices and deny to them the force and effect of an inventory,
upon the fanciful ground that they are no index to the value
of the goods. What better evidence of the value of the
goods could there possibly be than the bills showing what
they had cost ? They show the value as agreed upon between
the owner of the store and a disinterested third party, while
an inventory would show the value according to an estimate
put upon them by an interested party, knowing that an in-
ventory was made for the purpose of forming the basis of a
claim against the insurance company. I am utterly unable
to see any force in that contention. Of course the invoices
would not constitute an inventory in the case of a store
which has been running for a considerable time. They would
'*^® not afford any basis upon which to begin the estimate.
but in the case of a new store starting simultaneously with the
April, 1906. J Ruffner Bros. v. Dutchess Ins. Co. 927
issuance of the policy, or practically so, the first bill consti-
tutes as good a basis for the beginning of the estimate as an
inventory could possibly afford. It has been suggested in
one or two instances that if the bills were pinned together
and some indorsement made upon them, indicating an inten-
tion to treat them as an inventory, they might, on the theory
of substantial compliance, be deemed to constitute an in-
ventory. In other words, they constitute an inventory if they
are indorsed "inventory"; otherwise they do not. This, to
my mind, puts more merit into the name of the thing than
it is entitled to. It sacrifices substance to mere form and
technicality. What is an inventory is to be determined in
view of the peculiar circumstances of the case. What would
substantially comply with the requirement in one case would
not in another in which the circumstances are wholly dif-
ferent. For these reasons, we are unwilling to follow South-
ern Ins. Co. V. Knight, 111 Ga. 622, 78 Am. St. Rep. 216, 36
S. E. 821, 52 L. R. A. 70, Fire Assn. v. Materson, 25 Tex.
Civ. App. 518, 61 S. W. 962, and the Mississippi case in
which the proposition advanced by the attorneys for the
plaintiff in error arose, and we hold that the evidence is suf-
ficient to sustain the finding of the jury in favor of the plain-
tiff on the first issue.
The violation of the clause against increase of hazard is
admitted, but it is insisted that there was a waiver on the
part of the defendant. The claim of waiver is predicated
upon the knowledge which the agent of the defendant com-
pany had, at the time of the issuance of the policy, of the
intention of the insured to build the addition to the store
house and install a gristmill in it, and of the actual consum-
mation of this design before the fire occurred, and upon a
letter written by them to the insured, dated the day of the
fire, but received on the day after that occurrence. The
store was destroyed about 10 o'clock on the night of Decem-
ber 23d, and the letter was postmarked 1 :30 A. M., Decem-
ber 24th. It reads as follows :
"A. Haws Esq., City:
"Dear Sir — We again call your attention to policy No.
3379 Dutchess Insurance Company covering on your build-
ing, stock and fixtures, which has not yet been returned to
us for cancellation. We desire now to '*^'^ notify you that
the policy is canceled on account of the gristmill exposure
928 American State Reports, Vol. 115. [W. Virginia,
and of no effect, if you will return it the return premium
will be paid to you. The policy referred to is in the name
of 'The Haws Co.'
"Yours very truly,
"(Signed) LOHMEYER & GOSHORN."
The claim of waiver is stated in two ways. One is that
cancellation of the policy necessarily implies that the party
canceling it deemed it to be, at the date of cancellation, in
full force and effect, otherwise there would be a contradic-
tion in terms and an inconsistency in conduct. To cancel
means to make void, to annul, to destroy, and it is said that
that which has no existence or is not valid or of any effect,
cannot be annulled, made void or destroyed. The view that
a breach of a condition or warranty in an insurance policy
does not make it absolutely void, but only voidable, would
be a sufficient answer to this contention. Many cases hold
that such is the effect: German Ins. Co. v. Heiduk, 30 Neb.
288, 27 Am. St. Rep. 402, 46 N. W. 481. To the same effect
are the decisions in Illinois, Missouri, Michigan and Iowa.
If not absolutely void, but only voidable, there would be no
inconsistency in the act of cancellation by which it would be
utterly destroyed. Moreover, no such implication is rec-
ognized by the courts. Deeds, contracts and other instru-
ments are frequently canceled by courts of equity on the
express ground that they are void, for some reason shown,
by way of removing cloud from title, or preventing some use
of the instrument which might be injurious to the plaintiff.
Formerly it was held that a court of equity would not cancel
a deed or other instrument which was void on its face, but
the weight of authority now seems to be that such instru-
ments will be canceled. Appeals are entertained by this and
other courts from void judgments and decrees, notwithstand-
ing the apparent implication raised by entertaining them
that there is a judgment or decree. In order to put the ques-
tion beyond doubt and dispose of it upon nontechnical
grounds, it may be said there is no contradiction or incon-
sistency in the act of cancellation, and that it does not raise
any implication of the continued life of the policy. It is
an absolute right conferred upon the insurer by the terms of
the policy independently of any cause. It might be exer-
cised at any time, with or without cause. Therefore, a can-
cellation does not imply even '*^** that there was any cause
April, 1906.] Ruffneb Bros. v. Dutchess Ins. Co. 929
of forfeiture, much less the additional fact that such cause
was waived. The two things are in no sense connected or
interdependent. A cause of forfeiture may be asserted, al-
though no cancellation was ever made or attempted. If
there had been no cancellation in this case, the defense could
have been set up as fully and unreservedly as it has been.
Even if it be admitted that the increase of hazard rendered
the policy absolutely void, neither the fact nor the right to
rely upon it as a defense had any connection whatever with
the right of cancellation; and if we say it rendered it void,
the insurer might consistently exercise the right of cancella-
tion in order to preclude the setting up of any claim under
the policy, although void. In testing this question it is
proper to look beyond the facts of the particular case and see
how the theory advanced would operate under other condi-
tions. Take a case in. which the insurer knows nothing of
the cause of forfeiture at the time of the cancellation. Could
it reasonably be said to have waived that of which it had
had no knowledge? The argument advanced here would
produce a waiver in that case.
The other theory of waiver is that the letter, although not
physically attached to the policy, may be deemed in law to
be added thereto, and to constitute a waiver in writing by
the agents. That they had authority to execute such a
waiver, or to grant permission to do that which would in-
crease the hazard, provided they did it by an indorsement
upon the policy or a writing annexed to it, is not denied or
questioned. Whether, if a waiver, it might be regarded as
annexed to the policy, it is not necessary to say; for this
paper does not, in express terms, waive the breach of the con-
dition, nor, viewed in the light of the facts and circum-
stances, can it be construed to be a waiver. Its terms import
the exact contrary of a waiver. The reference in it to the
mill, as the reason for cancellation, plainly negatives intent
to assume the additional risk. The letter expres.ses dissatis-
faction with the conduct of the insured. On account there-
of, he is notified that the policy is canceled. There is not a
word in the letter which expresses waiver or any intention to
waive. There is no reference to liability or a claim of lia-
bility on the policy. As to whether the company is liable, or
whether it will forego any right to defend on the ground of
violation '*^**. of warranty or condition, the letter is abso-
Am. St. Bep., Vol. 115—59
930 American State Reports, Vol. 115. [W. Virginia,
lutely silent. No reference whatever is made to the respec-
tive rights of the parties under it. Moreover, it bears on
its face an implication that there had been a previous de-
mand for the return of the policy. It begins by saying,
"We again call your attention to policy No. 3379," etc. In
point of fact, there may not have been any such demand, but
whether true or false, it reflects intent on the part of the
writers, and tends to negative any intention to waive the vio-
lation of conditions. In point of fact, the insured had been
plainly informed that the companj' would not carry his build-
ing and store at the price for which it had issued the policy,
and that, in order to obtain a continuation of the protection
afforded him by the policy, he would have to pay a premium
three times as large. ' Having given him this notice, the
agents might very reasonably have expected him to return
the policy and make a new contract. For these reasons, our
conclusion is that the letter does not constitute a waiver, and
that as the jury predicated its verdict upon the theory of a
waiver, as shown by answers to special interrogatories, the
court should have set aside the verdict.
The trial court further erred in refusing to exclude the
evidence and to instruct the jury to render a verdict for the
defendant, for the evidence establishes fully and clearly a
violation of the warranty against increase of hazard. The
plaintiff admitted the construction of the addition to the
store room, the installation therein of a gristmill, the opera-
tion thereof and a material increase of hazard. These mo-
tions having been overruled, the case went to the jury under
instructions, given at the request of both parties. Of the
twelve asked for by the defendant, four were given and eight
refused, and it excepted. It excepted further to the action
of the court in giving one of plaintiff's instructions. In
view of the judgment to be rendered here, refusing a new
trial, it is unnecessary to examine the instructions.
The reasons which, in the opinion of the majority of the
court, justify the rendition of judgment for the defendant
here and impel them to refuse to remand the case, with lib-
erty for a new trial, are set forth in the opinion of Judge
Brannon in Maupin v. Scottish etc. Ins. Co., 53 W. Va. 557,
45 S. E. 1003, and by Judge Sanders in Anderson v. Tug
River Coal Co., 59 W. Va. 301, 53 S. E. 713, decided ^^^o at
this term. As I wholly dissented in the Maupin case (53 W.
April, 1906.] Euffner Bros. v. Dutchess Ins. Co. 931
Va. 557, 45 S. E, 1003), I expressed no opinion concerning
the propriety of rendering judgment for the defendant.
Now, however, having carefully examined the authorities,
analyzed them as best I can, and reached the conclusion that
this action on the part of the appellate court is a violation of
well-settled legal principles, as well as a radical departure
from the previous practice of this court, I feel called upon to
dissent from it and register my protest against it.
In those states in which this practice prevails, no distinc-
tion is made between cases in which the sufficiency of evi-
dence to sustain the verdict is tested by a motion to exclude,
made at the close of the plaintiff's evidence, a motion to di-
rect a verdict at the conclusion of the whole evidence, and a
motion to set aside the verdict after the rendition thereof.
They apply it generally, simply saying that as they can
clearly see that no better case can be made, or that it does
not affirmatively appear that it can be done, they, therefore,
refuse to remand. Such is the rule in Illinois, Georgia,
Maryland, Michigan, Iowa, Washington and ^Missouri : Sen-
ger v. Town of Harvard, 147 111. 304, 35 N. E. 137 ; Siddall
V. Jansen, 143 111. 537, 32 N. E. 384; Neer v. Illinois C. R.
R. Co., 138 111. 29, 27 N. E. 705 ; Brink v. Morton, 2 Iowa, 411 ;
Herring v. Hock, 1 Mich, 501; Muddy v. Harper, 1 Md. 110,
54 Am. Dec. 644; Gault v. Owing, 6 Gill, 191; Stockton v.
Frey, 4 Gill, 406, 45 Am. Dec. 138; Dayton t. Fargo, 45
Mich. 153, 7 N. W. 758 ; Rutledge v. Missouri Pac. Ry. Co.,
123 Mo. 121, 24 S. W. 1053, 27 S. W. 327; Carroll v.'lnter-
state Transit Co., 107 Mo. 653; Bernard v. Reeves, 6 Wash.
424, 33 Pac. 873.
In all the above-named states, except Washington, the
practice seems to be settled. * In that state, however, a later
decision (Edmunds v. Black, 13 Wash. 490, 43 Pac. 330)
enunciates a contrary doctrine, holding that there must be
a remand to the lower court when the evidence is insufficient
to sustain a verdict. In that case, there was no evidence
whatever to sustain it. In the case of Beruhard v. Reeves,
6 Wash. 424, 33 Pac. 873, above cited, the matter seems not to
have been discussed, but in the latter case it was, and, upon
a careful review of the authorities, the court deliberately de-
cided the question. In Arkansas the statute gives to the
appellate court the broad power of rendering such judg-
ments as justice may require. Even under that, the court
932 American State Repokts, Vol. 115. [W. Virginia,
took the review that it was unjust, and, therefore, violative
of law, to refuse to remand a case upon reversing a ■*"** judg-
ment for insufficiency of evidence, since, for aught the court
knows, a better case can be made on a new trial : Pennington
V. Underwood, 56 Ark. 53, 19 S. W. 108. In some other
states it has been held that, although the court has the power
to refuse a new trial, it will only do so when it clearly ap-
pears that the plaintiff cannot better his case. This is the
law in Wisconsin, but that court remands, when the verdict
is unsupported by any evidence whatever, because it will not
assume that the plaintiff cannot furnish the evidence to sus-
tain his declaration: Wright v. Rindskoph, 43 Wis. 344.
Such is the rule in Texas also: Willoughly v. Townsend, 93
Tex. 80, 53 S. W. 581 ; Boettcher v. Prude, 32 Tex. 472.
The best exposition of the rule in Pennsylvania is found in
Little Schuylkill R. R. Co., v. Norton, 24 Pa. 465, 64 Am. Dec.
672, in which the court said: "The plaintiff's declaration
contained a good cause of action, and in such cases where we
reverse, we always award a venire de novo, both because he
may, on a second trial, find evidence to support his narratio,
and because it is necessary to enable the defendant to re-
cover his costs if the plaintiff fail to make out his case in
evidence." Some other Pennsylvania cases are cited by the
text-writers as being in conflict with this, but they will be
found upon examination not to be. One of these is Miller v.
Ralston, 1 ^erg. & R. 309. The action was brought before
the debt was due, and the court refused a new trial because
it appeared that there was no cause of action nor even a pre-
tense of one. Another is Griffith v. Eshelman, 4 Watts, 51.
There it appeared from the plaintiff's declaration that he
had no cause of action. His declaration was incurably bad.
It was not a case of insufficiency of evidence nor one in which
the evidence could be considered at all.
One case is cited from New Jersey, Hinchman v. Clark, 1
N. J. L. 340, but it stood upon a special verdict, the facts
all ascertained. One is cited from Kentucky, Broaddus' Dev-
isees V. Broaddus' Heirs, 10 Bush, 299, in which the court
say they will remand except where there is no evidence to
sustain the verdict. By what process of reasoning this con-
clusion was reached is not in any way indicated. Nothing
is said about it in the opinion.
April, 1906.] Ruffner Bros. v. Dutchess Ins. Co. 933
In South Carolina the sufficiency of the evidence is tested
on the defendant's motion to nonsuit the plaintiff. In
-"2 Townes v. Augusta, 46 S. C. 15, 23 S. E. 984, the su-
preme court of that state, upon mature consideration, an-
nounced the rule as follows: "If the nonsuit was improperly
refused, and the nature of the plaintiff's demand was such
that no recovery could be lawfully had, this court will
grant the motion, and dismiss the plaintiff's complaint. If,
however, it was merely a case of insufficiency of proofs ad-
duced at the trial to support the cause of action, in itself of
a proper and legal nature, this court will not dismiss the com-
plaint upon appeal, but order a new trial, to afford the plain-
tiff an opportunity to make better proofs." I understand
the distinction here stated to be the same as the one made
by the Pennsylvania and New York courts, namely, if the
declaration sets forth matter which does not, and cannot, con-
stitute a good cause of action, final judgment of dismissal
will be rendered by the appellate court, but if the declaration
be good or curable by amendment, the case will be remanded.
The procedure in New York is under a statute which au-
thorizes the appellate court to reverse or affirm, wholly or
in part, or to modify, the judgment appealed from, and to
grant a new trial, if necessary or proper, and to grant to
either party the judgment which the facts warrant. Under
an authority so broad and discretionary as that, the New
York court of last resort has solemnly declared over and
over that the appellate court cannot properly render final
judgment for the appellant, unless the facts are conceded
or undisputed, or are established by official record or found
by the trial court, or it appears that no possible state of
proof applicable to the issues will entitle the respondent to
judgment: Benedict v. Arnoux, 354 N. Y. 715, 49 N. E. 326;
Edmoston v. McLoud, 16 N. Y. 543; Ilendrickson v. City of
New York, 160 N. Y. 144, 54 N. E. 680 ; New v. Village of
New Rochelle, 158 N. Y. 41, 52 N. E. 647.
Certain decisions of the supreme court of the United
States are sometimes cited for the proposition that, on re-
versing a judgment for insufficiency of evidence, on a mo>
tion to set aside, or refu.sal of a direction to the jury tft
find for the defendant, it will enter final judgment. This
is a misapprehension. Those cases do not assert such a
934 American State Reports, Vol. 115. [W. Virginia,
proposition. In all of them the parties waived trial by jury
and submitted the matters in difference to the court. That
is equivalent to a demurrer to the evidence. By agreement
of the parties, *^^ the case is withdrawn from the ,iury.
Both parties voluntarily relinquish the right to a jury trial:
Allen V. St. Louis Nat. Bank, 120 U. S. 20, 7 Sup. Ct. Rep.
460, 30 L. ed. 573 ; Cleveland Rolling Mill v. Rhodes, 121 U.
S. 255, 7 Sup. Ct. Rep. 882, 30 L. ed. 920 ; Fort Scott v. Hick-
man, 112 U. S. 150, 5 Sup. Ct. Rep. 56, 28 L. ed. 636, cited in
the Maupin case (53 W. Va. 557, 45 S. E. 1003). In all
these cases it is expressly stated that the trial by jury was
waived and the case submitted to the court by a formal written
stipulation. When the trial is by a jury and the verdict set
aside for want of sufficient evidence, the practice in the su-
preme court of the United States is shown by the decision in
Baltimore etc. P. R. R. Co. v. Jones, 95 IT. S. 439, 24 L. ed.
506. The court held that the evidence disclosed a clear and
undisputable case of contributory negligence on the part of
the plaintiff. The defendant had failed to ask the court to
direct a verdict, but had asked an instruction directing the
jury to find for the defendant, if they should find that the
plaintiff knew the box-car was the proper place for him and
that his position on the pilot of the engine was a dangerous
one. The court concluded its opinion as follows: "The
plaintiff was not entitled to recover. It follows that the
court erred in refusing the instruction asked upon this sub-
ject. If the company had prayed the court to direct the
jury to return a verdict for the defendant, it would have
been the duty of the court to give such instruction, and error
to refuse." Instead of rendering judgment for the defend-
ant, however, the case was remanded with directions to issue
a venire de novo. How much stronger case could be pre-
sented than that? There was an affirmative showing by the
plaintiff's own evidence of a fact that effectually barred re-
covery.
In Pleasants v. Fant, 22 Wall. 116, 22 L. ed. 780, the court
gives a full exposition of the principles upon which the mo-
tion to exclude evidence rests. In the concluding part of
the opinion, Mr. Justice Miller said: "It is the province of
the court, either before or after the verdict, to decide whether
the plaintiff has given evidence sufficient to support or justify
a verdict in his favor. Not whether on all the evidence the
April, 1906.] Ruffner Bros. v. Dutchess Ins. Co. 935
preponderating weight is in his favor — that is the business
of the jury — but conceding to all the evidence offered the
greatest probative force which, according to the law of evi-
dence, it is fairly entitled to, is it sufficient to justify a ver-
dict? If it does not, then it is the duty of the court after
a verdict to set it aside and grant a new trial." He then
shows the absurdity of requiring the *'^ submission of the
evidence to the jury under such circumstances and says : * * In
such case the party can submit to a nonsuit and try his case
again if he can strengthen it, except where the local law for-
bids a nonsuit at that stage of the trial, or if he has done
his best he must abide the judgment of the court, subject to
a right of review, whether he has made such a case as ought
to be submitted to the jury; such a case as a jury might
justifiably find for him a verdict." It is to be observed here
that that court says that when a motion to direct a verdict
is made, the plaintiff has a right to take a nonsuit. He is
not bound to let his case be withdrawn from the jury in that
way. He may get out of court, for the time being, for the
purpose of bettering his case on another trial.
This court, in Knight v. Cooper, 36 W. Va. 232, 14 S. E.
999, announced the two principles declared by the supreme
court of the United States. There was a case of insufficiency
of the evidence, one in which the court might have directed
a verdict, had it been requested, and this court reversed the
judgment, set aside the verdict and remanded the case, sug-
gesting that the trial court, on the same evidence, in another
trial, might direct a verdict "first giving the plaintiff an op-
portunity to suffer a nonsuit if he desired." When an ap-
pellate court, on reversing a judgment and setting aside a
verdict for insufficiency of the evidence, whether there has
been a motion to exclude at the conclusion of plaintiff's evi-
dence, a motion to direct a verdict upon all the evidence, or
a motion to set aside the verdict, renders judgment for the
defendant, it denies to the plaintiff the opportunity to take a
nonsuit. In the case of motions to exclude and direct, he is
not given an opportunity to better his case in view of the
final action by the court, for the reason that he is under no
duty to ask for a nonsuit in the trial court, because the court
refuses and overrules the motion. His situation is the same
as a plaintiff when his declaration or bill is deniurrod to. As
long as the court rules with him, holding his pleadings suffi-
936 American State Reports, Vol. 115. [W. Virginia,
cient, there is a presumption of correctness, upon which he
may rely, and he is under no duty to. ask leave to amend. It
is only when tlie court says the pleading is insufficient that
the party is put under a duty to ask leave to amend. So
where the sufficiency of his evidence is challenged by a mo-
tion '**'* to exclude or direct a verdict, as long as the court
rules in his favor, he may well suppose that his evidence is
suflBcient, and is excused from making application to the court
for leave to strengthen it. For the court afterward to turn
around and render a judgment against him, without giving
the opportunity to better his condition, which he could have
had in the court below, and of which that court could not
have deprived him, is to take him by surprise and do him a
rank injustice. Besides, for aught the court can know, ex-
cept by way of guess, it may grievously injure him. The
supreme court of Vermont, in reversing a judgment in which
such a motion was made and ought to have been sustained,
said: "While we hold that it was the duty of the court to
have entertained the defendant's motion to direct a verdict
and enter judgment in its favor ; and while generally it is the
duty of this court to enter such judgment as the trial court
should have done, yet, if the trial court had sustained the
defendant's motion, the plaintiff might have desired, and
been permitted to introduce further evidence, and she may
desire to do so on another trial, hence the cause is remanded
for a new trial": Latremouille v. Bennington etc. Ry. Co.,
63 Vt. 336, 22 Atl. 656. To see how the plaintiff, in such
case, may protect himself by exercising his right to take a
nonsuit, it is only necessary to bear in mind that the court,
in acting upon such a motion, performs two functions. It
first determined whether there is sufficient evidence to take
the case to the jury. This is a preliminary step. If the court
be of opinion that it is not sufficient, then follows the order
of exclusion or direction of the verdict. Upon the announce-
ment by the court that, in its opinion, the evidence is insuffi-
cient, the plaintiff has an opportunity, before the verdict is
rendered under the direction of the court, to take a nonsuit
and thereby prevent his case from being taken from the jury
by the court in its then condition. He thereby saves to him-
self his constitutional right of a trial by jury. This prin-
ciple puts it beyond the power of the defendant and the court
to take his case from the jury in that way. Whether that
April, 1906.] Ruffner Bros. v. Dutchess Ins. Co. 937
right is a valuable one to him in a particular ease, it is not
for the court to say, until the defendant has put himself in
a position to authorize such action. Though a court may
clearly see that no harm, in a practical sense, will result from
forcing a defendant to ^'*^ trial on a bad declaration, it can
never overrule a demurrer for that reason. He cannot be
deprived, for reasons of mere expediency, of his right to re-
quire a good declaration or bill before pleading or answering.
The law deems that right to be a valuable and sacred one,
whether it be so in the particular case or not, and does not
permit any court to assert the contrary. Nor can a court
properly deprive a litigant of any other legal right, because,
forsooth, the judge cannot see how he is injured thereby.
By rendering final judgment in such cases as this, the plain-
tiff is deprived of his opportunity' to better his case. It di-
rectly and expressly refuses that which the trial court would
have been bound to allow him had it concluded the evidence
was insufficient. The rendition of a judgment by the appel-
late court, in such a state of the case, works another injury
in a legal sense, by putting the parties on an unequal foot-
ing. It enables the defendant to have three chances, one be-
fore the court and two before the jury, while the plaintiff has
but one, a chance before the court. It allows the defendant
to make a demurrer to the evidence against the plaintiff for
his own benefit, without subjecting himself to the operation
of a demurrer. Upon the court's refusing his motion, he has
a chance of a verdict in his favor. If he fails to get that, he
comes up to the appellate court, on the issue of law, and has
final judgment. If the verdict be for the defendant, how-
ever, and the plaintiff is compelled to come to this court to
get rid of it, upon reversing the judgment and setting aside
the verdict, he cannot have a final judgment against the de-
fendant, but must go back and give the defendant another
chance before the jury. Upon what principle an appellat'e
court can justify such a discrimination between parties, I am
unable to see. It is to be remembered in this connection, too,
that the subject matter of this discrimination is the constitu-
tional right of a jury trial. It is more than a mere matter
of form or technicality, even if it could be set aside and
ignored as a matter of form. While the courts and text-
writers say a motion to exclude or direct a verdict is equiva-
lent to a demurrer to evidence, they do not mean that it is
938 American State Reports, Vol. 115. [W. Virginia,
in all respects equivalent thereto, but only that in determin-
ing whether it shall be sustained or overruled, the principles
governing a demurrer shall apply. Where the parties join in
a demurrer, the case is taken from ^'' the jury absolutely
as to both parties. Neither has any right to go back to the
jury, unless there has been error in admitting or excluding
evidence. The whole matter is submitted to the court for final
determination. What was said above about the inability of
the defendant and the court to take from the plaintiff his
right to a trial by jury was qualified by the phrase "in that
way," namely, by a motion to exclude or direct a verdict.
I am not to be understood as intimating that the plaintiff
cannot be compelled to join in a demurrer. When he is com-
pelled to do so, however, the other party is also compelled to
withdraw his case from the jury, so that both parties stand
on an equal footing, forever separated from the jury, and
their case wholly in the hands of the court.
Very few of those courts, in which the practice of render-
ing judgment on a reversal obtains, if indeed any, have given
this subject careful and mature consideration. They have
dismissed it with a few words, usually with the remark that
it is not perceived how the plaintiff can make a better case,
or that it does not appear that he can do so, wherefore the
granting of a new trial will be useless. I have observed that
in one or two instances it has been said that it ought to be
done in order to put an end to the litigation ; but this reason
falls under the condemnation of the great weight of author-
ity. Even the courts that have given it have said in the
same breath they would grant a new trial, if they could see
that the plaintiff could make a good case, while others have
said they would grant it in all instances in which it does not
affirmatively appear that the plaintiff could not by any pos-
sibility make a good case. All the reasons assigned by all
the courts that indulge in that practice may be included in
that idea of utility or expediency, which utterly ignores legal
principles, and, if extended, would lead to the abolition of
all forms of action. It would only be necessary to have a
judge and a jury, and all pleadings might be dispensed with.
The trial of an equity suit on a declaration in debt would be
perfectly justifiable. The suggestion that, as the plaintiff
has had one trial, he has no legal right to another, is one ad-
vanced for the first time, so far as I am able to see, in Mau-
April, 1906.] Kuffner Bros. v. Dutchess Ins. Co. 939
pin V. Scottish etc. Ins. Co., 53 W. Va. 551, 45 S. E. 1003.
I think he has, unless the defendant has taken the proper
step to deprive him of it by a demurrer *"** to the evidence.
Even in that case, it is likely the plaintiff may avoid the ef-
fort to bind him, by taking a nonsuit. While he must join
in the demurrer or dismiss his action, I do not see that the
court can compel him to further prosecute, or elect for him
which alternative shall be taken. The statute forbids the tak-
ing of a nonsuit after the jury has retired from the bar, but
limits the right no further, and I know of no authority in the
court to add to it. The right may be of no practical value
to him, but it is a legal right of which a court cannot deprive
him, except by trampling the law under foot.
Maupin v. Scottish etc. Ins. Co., 53 W. Va. 557, 45 S. E.
1003, is the first decision by this court in which the rule here
enforced was ever applied. No precedent for it will be found
in any of the Virginia decisions prior to the division of the
state. Even a fatal variance between the declaration and the
proof was not ground for any such action, though it is in
some other states. In Calvert v. Bowdoin, 4 Call, 217, the
court laid down this proposition: "If the evidence differs
from the statement in the declaration, a judgment of nonsuit
will be given by the court of error; and the cause will not be
sent back to the court below with a direction to call the plain-
tiff, or to instruct the jury that the evidence does not support
the declaration," Instead of rendering a judgment for the
defendant against the plaintiff, and making the matter res
judicata, the court merely dismissed the action. This is in
accord with the rule declared by the South Carolina court
and by the Pennsylvania court as above shown.
For these reasons, I am opposed to the departure made in
the Maupin case (53 W. Va. 557, 45 S. E. 1003), and in the
case of Harvey Coal & C. Co. v. Dillon, 59 W. Va. 605, 53 S.
E. 928, 6 L. R. A., N. S., 628, and would remand this case in-
stead of rendering judgment for the defendant. If the de-
fendant desired the case to be taken from the jury, it should
have demurred to the evidence and deprived itself of any
right to go to the jury, while taking that right from the plain-
tiff.
BRANNON, J. I concur in the judgment, but I doubt
point 2 of the syllabus.
940 American State Reports, Vol. 115. [W. Virginia,
Conditions in Policies of Insurance requiring the insured to keep
an inventory of the goods insured have usually' been accorded a rea-
sonable interpretation so as not to work a forfeiture if substantially
complied -with: Western Aspur. Co. v. McGlathery, 115 Ala. 213, 67
Am. St. Eep. 26. See, also, Everett-Ridlcv-Ragan Co. v. Traders'
Ins. Co., 121 Ga, 228, 104 Am.^ St. Rep. 99. It has been decided,
however, that invoices of goods purchased, covering every article
embraced within a stock of merchandise on a given day, is not an
inventory of such stock within the meaning of an iron-safe clause
which requires the insured to take a complete itemized inventory of
stock on hand at least once in each calendar year: Southern Fire Ins.
Co. V. Knight, 111 Ga. 622, 78 Am. St. Kep. 216.
TROUGH V. TROUGH.
[59 W. Va. 464, 53 S. E. 630.]
DIVORCE — General Demurrer, When Properly Overruled. —
Where a bill for divorce has two grounds or matters of relief in that
it charges adultery calling for an absolute divorce, and desertion
calling merely for a decree of separation, a general demurrer which
does not separate these charges is properly overruled, although the
bill may be bad because it does not name the particeps criminis in
adultery, nor give time, place and circumstance, (pp. 940, 941.)
DIVORCE — Denial of Right to Defend Suit. — In an action for
a divorce the court has no power, because the defendant has failed
to pay suit money and temporary alimony required of him, to strike
out and disregard depositions filed by him in defense of the suit,
and grant a final decree of divorce against him. (p. 946.)
DIVORCE. — Confessions of Adultery made in the country are
not admissible in evidence in a suit for a divorce for that offense,
(p. 948.)
Hall Bros., for the appellant.
Hines & Kelly, for the appellee.
^«« BRANNON. J. This is a snit by Virginia B. Trough
versus Richard L. Trough for a divorce. The bill contains a
charge of adultery and also desertion, though the desertion
is not for a period to call for an absolute divorce from the bond
of matrimony. The special prayer of the bill is for absolute
divorce, which was granted, and the defendant appealed.
Demurrer. There is much argumentation upon a demur-
rer to the bill, based on the claim that the bill does not name
the woman with whom the defendant committed adultery, nor
does it give time, place and circum.stance, and thus wants le-
gal certainty. We do not say whether or not a bill for di-
April, 1906.] Trough v. Trough. 941
vorce for this offense should contain the name of the parti-
ceps criminis or other matter of alleged defect of the bill, be-
cause the demurrer is general, and there are two grounds of
divorce contained in the bill, one calling for full divorce a
vinculo matrimonii, the other a partial divorce, divorce of
separation, a mensa et thoro. The demurrer does not sepa-
rate these two causes of suit. It does not aim at the charges
of adultery, and being general, it was properly overruled.
We again say that where a bill contains two or more matters
of suit, one good, one bad, the demurrer must be separate.
This has always been law: Miller v. Hare, 43 W. Va. 647,
28 S. E. 722, 39 L. R. A. 491 ; 4«« Gay v. Skeen. 36 W. Va.
582, 15 S. E. 64. The bill contains a prayer for divorce
absolute and for general relief, and a divorce of mere
separation could be granted under the latter prayer: Vance
Shoe Co. V. Haught, 41 W. Va. 275, 23 S. E. 553. There-
fore, the demurrer was properly disregarded. Here a ques-
tion arose in my mind. The decree being for absolute di-
vorce for adultery, based thus on that part of the bill said to
be defective, can that decree be sustained? Whilst proper
to overrule the demurrer, because some relief may be granted,
would a decree standing on the bad part of the bill be good
on appeal, in view of the rule put in several cases, that where
a bill contains some matter proper for relief, and some not
good for relief, a general demurrer is not good, and should
not be overruled, as it should be aimed especially at the .bad
matter; but where the court gives relief justifiable only on
the bad matter, it is reversible error? Turner v. Stuart, 51
W. Va. 493, 41 S. E. 924. But that says bad ''matter,"
meaning the very substance of the facts on which the bill
predicates the relief sought, bad matter not calling for any
relief by law, not mere defective statement of matter which
does call for relief. . In this case the bill charges adultery,
the alleged defect being in not naming a particeps and giv-
ing time, place and circumstance — a mere defect of specifi-
cation. That takes the case out of the rule just referred to.
We find no error in disregarding the demurrer. It was not
acted on expressly, likely owing to inadvertence; but we
must regard it as overruled.
An order was made requiring the defendant to pay fifty
dollars for counsel fees and fifteen dollars per month for sup-
port of the plaintiff and two children, and he failing to pay,
942 American State Reports, Vol. 115. [W. Virginia,
the court decreed that "none of the depositions taken by de-
fendant be read or considered on the hearing of this ease,"
and granted a decree of absolute divorce, giving the plaintiff
custody of the three children, commanding defendant to sur-
render to the plaintiff the custody and control of a daughter
who was with her father, enjoining forever the defendant
from interfering with the plaintiff in the care, custody and
control of the children, decreeing that the plaintiff hold a
tract of land and personal property consisting of household
goods, cows, hogs, chickens and other property claimed by
the plaintiff in her bill, and decreeing costs against defend-
ant. The defendant filed an answer denying all the allega-
tions of the charges involved '*®'^ in the divorce, claiming
the land and personal property. The defendant took nu-
merous depositions. Had the court power to thus refuse the
defendant the right of defense? For refusal of defense it
was, since what avail the answer without proof under it!
The case involved the dearest rights of the defendant, wife,
marriage rights, children, property, personal character —
rights of person and property. What had the payment of
this money as temporary alimony to do with the merits of
the controversy touching those all-important and inestimable
rights? Nothing, This action of the court is based on the
idea that the defendant in failing to obey the order for pay-
ment was in contempt, and that the courts have power to
punish contempt, and to enforce their orders, necessarily so,
and that they can refuse to allow a plaintiff to prosecute a
suit for such disobedience, or refuse a party attacked to de-
fend. There is authority for this proposition. 14 Cyclo-
pedia, 795, says that refusal of defense is rarely resorted to,
but may be. 1 Encyclopedia of Pleading and Practice, 436,
says a method to enforce payment "frequently resorted to"
is dismissing the plaintiff's bill, or refusing to proceed with
the trial, or striking the answer of the defendant from the files
and proceeding with the case ex parte. These statements are
guarded and hesitating. The reason of the matter, the
weight of authority, are decidedly against the power to re-
fuse one a defense when attacked. The late work. Nelson
on Divorce, in section 861, says: "An order for temporary
alimony may be enforced by execution, sequestration or by
proceedings in contempt. But during the suit the court has
the power to enforce its orders by declaring the husband in
April, 1906.] Trough v. Trough. 943
contempt and refusing to proceed with the cause until its
order is complied with. In some instances the courts have
dismissed his petition for a failure to complj' with its orders.
It is error to refuse a matter of right, such as a change of
venue, until the temporary alimony is paid. It is doubtful
if the court should refuse to enter a decree of divorce until
the temporary alimony is paid. But in some instances this
practice has been approved. In many instances the hus-
band's answer has been stricken out for his disobedience ■ of
the orders of the court. But this is now considered against
public policy; for it prevents that full investigation into the
merits of the controversy which is necessary to protect the
interest of the state." ^®® The last expression of Nelson is
borne out by Wass v. Wass, 41 W. Va. 126, 23'S. E. 527, hold-
ing that the state is an implied party to divorce suits, and
the court must take care that divorces are not granted con-
trary to law and without good cause. Bishop on IMarriage,
Divorce and Separation, section 1095, says: "Taking away
privileges in the cause is sometimes employed for enforc-
ing pajTnent. For example, in justifying circumstances, the
court may strike out the defendant's answer, or dismiss the
plaintiff's complaint, or refuse to proceed with the trial, un-
less or until its alimony order is obeyed. Possibly some of
the cases under these heads have gone too far. The inter-
ests of the public, while not prejudiced by what delays the
cause or ends it without a trial, will not permit a hearing
with the channels of evidence obstructed. Therefore public
policy forbids that a husband's refusal to pay temporary
alimony should deprive him of the right to defend the suit."
This is so because all law says that public policy looks with
aversion on divorces. This principle that the public interest
is involved so far that it is deemed a quasi party is fully sup-
ported by a note in 30 Am. Dec. 545, and Bishop on Mar-
riage, Divorce and Separation, section 480. Now, you sup-
press a defense to a divorce suit, and dissolve a marriage on
the application of one party, and refuse a defense, and you
overturn this public policy. No more effective process to
further this result can be conceived. For myself, though
not involved in the case, I question the right to dismiss a
plaintiff's suit for such contempt, under the nalure and
structure of our government in America, and ('specially un-
der our Bill of Kightb in our couslitutiou, article 3, section
944 American State Reports, Vol. 115. [W. Virginia
17: "The courts of this state shall be open, and every person,
for an injury done to him, in his person, property or repu-
tation, shall have remedy by due course of law; and justice
shall be administered without sale, denial or delay." And
does not this accord the right to defend when attacked "in
person, property or reputation"? But let us, on this grave
question, look at further authority. In Hovey v. Elliott,
167 U. S. 409, 17 Sup. Ct. Rep. 841, 42 L. ed. 215, is a long,
learned opinion for a unanimous court reviewing the law
under English and American cases for more than a century
touching the power of courts to punish contempt of a party
in failing to pay money under an order of court, arriving
at the conclusion that a court cannot for this cause strike
out ^^ an answer and take the bill for confessed; that it
has not the power to summon a party to defend, and having
obtained jurisdiction over him "refuse to allow the party
to answer or strike his answer from the files, suppress the
testimony in his favor, and condemn him without considera-
tion thereof and without a hearing, on the theory that he has
been guilty of contempt." The court held the decree void.
In Windsor v. McVeigh, 93 U. S. 274, 23 L. ed. 914, where
an answer had been stricken out to a libel of confiscation be-
cause the owner of the property was a Confederate, the
court said, referring to JMcVeigh v. United States, 11 Wall.
259, 20 L. ed. 80, referring to an order striking out an answer
said: " 'The order in effect denied the respondent a hear-
ing. It is alleged he was in the position of an alien enemy,
and could have no locus standi in that form. If assailed
there, he could defend there. The liability and right are in-
separable. A different result would be a blot upon our jur-
isprudence and civilization. We cannot hesitate or doubt
on the subject. It would be contrary to the first principles
of the social compact and of the right administration of
justice.' The principle stated in this terse language lies at
the foundation of all well-ordered systems of jurisprudence.
Wherever one is assailed in his person or property, there
he may defend, for the liability and the right are insepar-
able. This is a principle of natural justice, recognized as
such by the common intelligence and conseience of all na-
tions. A sentence of a court pronounced against a party
without hearing him, or giving him an opportunity to be
April, 1906.] Trough v. Trough. 945
heard, is not a judicial determination of his rights, and is
not entitled to respect in any other tribunal.
"That there must be notice to a party of some kind, actual
or constructive, to a valid judgment affecting his rights, is
admitted. Until notice is given, the court has no jurisdic-
tion in any case to proceed to judgment, whatever its au-
thority may be, by the law of its organization, over the
subject matter. But notice is only for the purpose of afford-
ing the party an opportunitj^ of being heard upon the claim
or the charges made; it is a summons to him to appear and
speak, if he has anything to say, why the judgment sought
should not be rendered. A denial to a party of the benefit
of a notice would be in effect to deny that he is entitled to
notice at all, and the sham and deceptive proceeding had bet-
ter be- ^''^ omitted altogether. It would be like saying to a
party, 'Appear, and you shall be heard'; and, when he has
appeared, saying, 'Your appearance shall not be recognized,
and you shall not be heard. ' In the present case, the district
court not only in effect said this, but immediately added a
decree of condemnation, reciting that the default of all per-
sons had been duly entered. It is difficult to speak of a de-
cree thus rendered with moderation ; it was in fact a mere
arbitrary edict, clothed in the form of a judicial sentence.
"The law is and always has been, that wherever notice or
citation is required, the party cited has the right to appear
and be heard; and when the latter is denied, the former is
ineffectual for any purpose. The denial to a party in such
a case of the right to appear is in legal effect the recall of
the citation to him." In Underwood v. McVeigh, 23 Graft.
409, of a decree given after an answer was stricken out, the
court said: "It lies at the very foundation of justice, that
every person who is to be affected by an adjudication should
have the opportunity of being heard in defense, both in re-
pelling the allegation of fact, and upon the matter of law;
and no sentence of the court is entitled to the least respect
in any other court, or elsewhere, when it has been pronounced
ex parte and without the opportunity of defense. An ex-
amination of both sides of the question, and delil)eration be-
tween the claims and allegations of the contending parties,
have been deemed essentially necessary to the proper ad-
ministration of justice by all nations, and in every stage of
Am. St. Kep., Vol. 115— tiO
946 American State Reports, Vol. 115. [W. Virginia,
social existence." In the four cases just cited the decrees
were held void as not judicial sentences. The party had no
day in court. It is not due process of law under state and
federal constitutions. It is condemnation without notice.
The party's case has been put out of court. No matter the
character of his defense, no matter that he be in contempt,
lasting final decree against him, involving in this case his
most important rights in life, cannot be entered. It is void
for want of due process. It violates that definition of due
process of law given by Daniel Webster approved without
dissent everywhere. ' ' By the law of the land is most clearly
intended the general law, which hears before it condemns;
which proceeds upon inquiry and renders judgment only
after trial." Such action denies equal protection of the law.
The law imposes '*'^^ no such heavy penalty for contempt.
The right of defense is given to one man and denied to an-
other for no cause involved in the merits. If there is any
plain right as to judicial procedure, I assert that it is a right
to defend where attacked in person, character or property.
We recognize in both opinions in Hebb v. County Court,
48 W. Va. 279, 37 S. E. 676, 49 W. Va. 733, that whilst
a court might refuse affirmative action, in favor of one in
contempt, it could not deny one attacked the right to defend.
This distinction between plaintiff and defendant will be
found in the opinion in Hovey v. Elliot, 167 U. S. 409, 17
Sup. Ct. Rep. 841, 42 L. ed. 215. To support the partic-
ular position that a defense cannot be denied to one failing
to pay temporary alimony because in contempt, I cite Foley
V. Foley, 120 Cal. 33, 65 Am. St. Rep. 147, 52 Pac. 122, hold-
ing that an answer cannot be stricken out, but the contempt
may be punished otherwise; Gordon v. Gordon, 141 111. 160,
33 Am. St. Rep. 294, 30 N. E. 446, 21 L. R. A. 387 ; Johnson
V. Superior Court, 63 Cal. 578, holding that one in such con-
tempt cannot be denied process for witnesses; Bailey v.
Bailey, 69 Iowa, 77, 28 N. W. 443, holding that it would be
against public policy to deny a defense for such contempt;
Cason V. Cason, 15 Ga. 405; McMakin v. McMakin, 68 i\Io.
App. 57, holding that contempt "does not authorize the
striking of answer or refusal to admit evidence for him";
Allen V. Allen, 72 Iowa, 502, 34 N. W. 303, where the court
said : " It will not do to hold that the marriage relation may
be dissolved on the ground of defendant's inability to pay
April, 1906.] Trough v. Trough. 947
a sum for alimony, or because of his recusancy ' ' ; Dwelly v.
Dwelly, 46 Me. 377; Newhouse v. Newhouse, 14 Or. 290, 12
Pac. 422. Century Digest, volume 17, section 738, will show
few cases to sustain such action. Outside New York scarcely
any. Its leading case. Walker v. Walker, 82 N. Y. 260.
seems hesitating, and rests on the old arbitrary practice of
English chancery. But it is not sound English law as the
supreme court holds in Hovey v. Elliot, 167 U. S. 409, 17
Sup. Ct. Eep. 841, 42 L. ed. 215, and as shown in Gordon v.
Gordon, 141 111. 163, 33 Am. St. Rep. 294, 30 N. E. 446, 21
L. R. A. 387, citing Haldine v. Eckford, L. R. 7 Eq. 425,
where the English court said: "Though the contempt of the
defendants had been of the most flagrant kind, yet as what
they asked was for the purpose of defending themselves,
he had no jurisdiction to refuse the order." Other English
cases are there cited. The Illinois court says the New York
case is not looked upon with favor or followed. Some cases
cited to the reverse do not support that reverse. Casteel v.
Casteel, 38 '*" Ark. 477, holds that the plaintiff's suit may
be dismissed for refusal to pay wife's counsel fees. Winter
V. Superior Court, 70 Cal. 295, 11 Pac. 633, did not refuse de-
fense, but refused to hear the case on the contemner's motion,
refused a favor asked by him. Waters v. Waters. 49 Mo.
385, only holds that a plaintiff's suit may be dismissed for
failure to pay a wife money to carry on her defense. Clark
V. Clark, 117 N. Y. 622, 22 N. E. 1127, does not touch the
matter.
Another consideration not without force is that we have a
jtatute pre.scribing how contempts shall be punished. It
was pa.ssed in 1830 to restrain arbitrary action by courts:
Code of 1899, c. 147. I think it contemplates only fine and
imprisonment. It curbs or lessens the common-law power of
courts: State v. Hansford, 43 W. Va. 773, 28 S. E. 791.
Just as it was held to be the sole mode of punishment in
Galland v. Galland, 44 Cal. 475, 13 Am. Rep. 167.
But it is argued in answer to the point just discussed, that
the striking out of the evidence is immaterial, as if all the
evidence be considered the same decree would have been
made. How do we know what the circuit court would have
thought? The evidence was voluminous and flatly contra-
dictory in material respects — contradictory as to the crimi-
nal conduct and as to desertion and other matters. Now,
948 American State Reports, Vol. 115. [W. Virginia,
first, a decree without a hearing of both sides is not judicial
decision. The case has never been passed on by the circuit
court. The party had right to have the judgment of the
circuit court on his evidence and cause before this court can
consider the weight of the evidence. Had the decree on evi-
dence on both sides been for the defendant, we could not re-
verse, unless this court would think it clearly wrong, because
he would have the advantage of that decision, and occupy a
different position from that which he now occupies. We
cannot, in the first instance, be asked to pass on the evi-
dence. This is an appeal court, and is not called on to act
until the circuit court has done so. There must be a hear-
ing of the whole case. There has not been. "The supreme
court will not consider questions not yet acted on by the cir-
cuit court": Kesler v. Lapham, 46 W. Va. 293, 33 S. E. 289;
Armstrong v. Town of Grafton, 23 W. Va. 50. This case, as
made up on both sides, has never been decided by the circuit
court. But second, the decree is void under the high au-
thorities above given. Can it be, with reason, '*''^ said that
where the whole of a defendant's case has been struck out,
consisting of a volume of material evidence, that this court
should perform the function of a court of original juris-
diction, treat the case as if heard on the whole evidence in the
court below and review it on the evidence on both sides?
When it is just as though the party was not before the court,
and was decreed against "without a day in court." Shall
we not rather say the case has not been heard — the decree is
not binding on the defendant, and remand the case that it
may be heard on the evidence. On that evidence we indicate
no opinion.
Considerable evidence of admissions in the country by the
defendant of criminal conduct was given, which is assailed
as incompetent. Can these admissions be considered? As.
it is deemed by law in the interest of society that marriage
should not be dissolved on insufficient grounds, and cannot be
dissolved by consent of parties, the common law held such ad-
missions not effectual to sustain a ground for divorce, cer-
tainly not alone: 30 Am. Dec. 544; Bishop on Marriage,
Divorce and Separation, sees. 707, 730. The lowest grade of
evidence in weight: Nelson on Divorce, sec. 781. "While
not alone sufficient to warrant a decree, it is admissible in
connection with other evidence, unless a statute forbids": 14.
April, 1906.] Trough v. Trough. 949
Cyc. 682. Does our statute law, Code of 1899, chapter 64,
section 8, ban such evidence wholly? We think so. The
legislature intended to render it incompetent. "Such suit
shall be instituted and conducted as other suits in equity, ex-
cept that the bill shall not be taken for confessed, and whether
the defendant answer or not, the cause shall be heard inde-
pendently of the admissions of either party, in the plead-
ings or otherwise." Now, this prohibits the bill from being
taken for true on default of the defendant to appear, thus
making it different from other suits, and in accordance with
the rule in divorce cases requires proof of the grounds of di-
vorce. Next, it forbids a decree though the wrongful act be
admitted solemnly in the answer. It must be proven. Now,
if an admission or confession in an answer is of no avail, why
shall we say that one made in the country is ? Can a decree be
had thus by indirection when it cannot by an answer of con-
fession? Plain intent and policy would thus be violated.
The letter of the law is that the case shall be decided "inde-
pendently '*'^'* of the admissions of either party in the plead-
ings or otherwise." What does this broad word "otherwise"
mean? We must give it some effect, as it is sedately added.
After saying default, silence shall not avail, but proof must
be made ; after saying, with special reference to admissions in
the answer, that they shall count nothing, this word is added
to say that no admission in the country, outside the pleading,
shall count. One case in Virginia on this statute seems to
hold otherwise : Bailey v. Bailey, 21 Gratt. 43. I have never
been able to see with certainty what it means. Does it mean
to say that admissions in letters only are competent? Cralle
V. Cralle, 79 Va. 182, only goes to the effect that admissions
may be used to defeat a divorce. Latham v. Latham, 30
Gratt. 307, only says that defendant is entitled to a denial in
his answer — that the act never designed to eliminate that
pleading so far as to refuse the benefit of its denial. Hamp-
ton V. Hampton, 87 Va. 148, 12 S. E. 340, overrules Bailey v.
Bailey, 21 Gratt. 43, by holding under the statute that "evi-
dence that the defendant admitted the charge (of adultery)
and a letter from her purporting to admit it, are inadmis-
sible." If this if-, not the purpose of this plain statute, what
is it? Sometimes it operates to defeat justice; but it has a
policy which the law has always licld as to the marriage state.
If wrong, the remedy is with the U-gisluture, Under another
950 American State Reports, Vol. 115. [W. Virginia,
construction a party may obtain a divorce by his or her ad-
mission, or greatly aid by it in doing so. It would open the
door to collusion between the parties; it would enable one
party more easily to divorce himself.
The decree of the eighth day of December, 1903, is re-
versed and the case remanded for further proceedings.
POWER OF COURTS TO STRIKE OUT ANSWERS SUFFICIENT
IN FORM AND SUBSTANCE TO PRESENT VALID DE-
FENSES.
I. In General — Due Process of Law, 950.
n. In Case of Person in Position of Alien Enemy, 950.
m. In Case of Person in Contempt of Court.
a. In General, 952.
b. In Divorce Suits, 954.
I. In General — Due Process of Law.
The authority of a court, if such exists, to strike out answers suffi-
cient in form and in substance, raises the question of what consti-
tutes due process of law. Due process of law means a course of
legal proceeding according to rules and principles under an estab-
lished system of jurisprudence for the protection and enforcement
of private rights, requiring a court of competent jurisdiction to pass
upon the subject matter of the proceedings and a trial or proceed-
ing in which the rights of the parties, after notice and opportunity
to be heard, shall be duly adjudicated: Carr v. Brown, 20 R. I. 215,
78 Am. St. Rep. 855, 38 Atl. 9, 38 L. R. A. 294. It means that no-
tice or summons by which a party is tendered his day in court, with
the right to frame an issue and be heard before a judgment can
be rendered or execution issued which shall take away his liberty
or property: Kouse v. Donovan, 104 Mich. 234, 53 Am. St. Rep. 457,
62 N. VV. 359, 27 L. E. A. 577. It requires an orderly proceeding,
adapted to the nature of the case, in which the citizen has an oppor-
tunity to be heard, and to defend, enforce, and protect his rights,
A hearing, or an opportunity to be heard, prior to judgment, is ab-
solutely essential: State v. Billings, 55 Minn. 467, 43 Am. St. Rep.
525, 57 N. W. 206.
II. In Case of Person in Position of Alien Enemy.
The constitutional guaranty that no person shall be deprived of
life, liberty, or property without due process of law was, in several
decisions rendered in the years following the war of the Rebellion,
found applicable to persons serving in the Confederate army. It
was therefore held that when proceedings were instituted against
them in the federal courts for the forfeiture of their property under
the act of Congress providing therefor, they were entitled to appear
April, 1906.] Trough v. Trough. 951
in person or by attorney, answer to the charges, and make a de-
fense: Buford V. Speed, 74 Ky. (11 Bush) 338; McVeigh v. United
States, 11 Wall. 259, 20 L. ed. 80. In the Kentucky case, the appel-
lant, who was in Confederate »rmy, was regarded as an alien enemy;
and in the United States case it was urged that the respondent
was an alien enemy, as a ground for striking his answer in the dis-
trict court from the files. Said Justice Swayne: "It is alleged that
he was in the position of an alien enemy, and hence could have no
locus standi in that forum. If assailed there, he could defend there.
The liability and the right are inseparable. A different result would
be a blot upon our jurisprudence and civilization. We cannot hesi-
tate or doubt on the subject. It would be contrary to the first prin-
ciples of the social compact, and of the right administration of
justice."
The authority of a court to condemn the estate of a Confederate
without giving him an opportunity to be heard and to defend was
again denied by the supreme court of the United States in Wind-
sor V. McVeigh, 93 U. S. 274, 23 L. ed. 914, where Justice Field,
referring to the above words of Justice Swayne, said: "The principle
stated in this terse language lies at the foundation of all well-ordered
systems of jurisprudence. Wherever one is assailed in his person
or his property, there he may defend, for the liability and the right
are inseparable. This is a principle of natural justice, recognized
as such by the common intelligence and conscience o^. all nations.
A sentence of a court pronounced against a party without hearing
him, or giving him an opportunity to be heard, is not a judicial de-
termination of his rights, and is not entitled to any respect in any
tribunal. That there must be notice to a party of some kind, actual
or constructive, to a valid judgment affecting his rights, is admitted.
Until notice is given, the court has no jurisdiction in any case to
proceed to judgment But notice is only for the purpose of
affording the party an opportunity of being heard upon the claim
or the charges made; it is a summons to him to appear and speak,
if he has anything to say, why the judgment sought should not be
rendered. A denial to a party of the benefit of notice would be in
effect to deny that he is entitled to notice at all, and the sham
and deceptive proceedings had better be omitted altogether. It
would be like saying to a party: 'Appear, and you shall be heard';
and, when he has ai)peared, saying: 'Your appearance shall not be
recognized, and you shall not be heard.' In the present case the
district court not only in effect said this, but immediately added a
decree of condemnation reciting that the default of all persons had
been duly entered. It is difficult to speak of a decree thus rendered
with moderation; it was, in fact, a mere arbitrary edict, clothed in
the form of a judicial sentence."
952 American State Reports, Vol, 115. ["W. Virginia,
m. In Case of Persons in Contempt of Court.
a. In GeneraL — ^For contempts committed in its presence a court
may impose punishment summarily. In such cases the punishment
usually immediately follows the comn^ission of the offense, without
the necessity of any preliminary process, evidence, or hearing, for
the acts constituting the contempt having been committed in the
presence of the court, they are actually and judicially known to it
without any inquiry or investigation. This is only the exercise of
a power necessarily inherent in every judicial tribunal in order to
the administration of justice, the preservation of the dignity of the
court, and the enforcement of decorum and good order. Summary
proceedings in cases of this kind have been pursued by courts from
tigie out of mind, and doubtless constitute due process of law. But
if a contempt has not been committed in the presence of the court,
or within its view, then the person accused of the offense is entitled,
before being punished therefor, to notice of the matters charged
against him and of the time and place of hearing the same. He
cannot be condemned before he is heard or given an opportunity to
be heard. The reason for the distinction between two classes of
cases is obvious. In the first case the court sees and knows of the
acts which constitute the contempt, and needs no testimony fo es-
tablish their existence as facts. While in the second case testimony
must be given to inform the court; and, this being so, due process
of law demands that the testimony be heard publicly, in open court,
and by both sides to the controversy, after due notice to the accused
of what is alleged against him, so that he may have an opportun-
ity to meet and explain it: Wyatt v. People, 17 Colo. 252, 28 Pac.
961; Welch v. Barber, 52 Conn. 147, 52 Am. Rep. 567; Palmer v.
Palmer, 28 Fla. 295, 9 South. 657; State v. District Court, 124 Iowa,
187, 99 N. W. 712; In re Noonan, 47 Kan. 771, 28 Pac. 1104; Wheeler
etc. Mfg. Co. v. Boyce, 36 Kan. 350, 59 Am. Rep. 571, 13 Pac. 609;
State V. Anders, 64 Kan, 742, 68 Pac. 668; State v. Ives, 60 Minn.
478, 62 N. W. 831; State v. Willis, 61 Minn. 120, 63 N. W, 169;
Holt's Case, 55 N. J. L. 384, 27 Atl. 909; Smith v. Speed, 11 Okla.
95, 66 Pac. 511, 55 L. R. A. 402; State v. Gibson, 33 W. Va. 97, 10
S. E. 58; Ex parte Terry, 128 U. S. 289, 9 Sup. Ct. Rep. 77, 32 L. ed.
405; Ex parte Savin, 131 U. S. 267, 9 Sup. Ct. Rep. 699, 33 L. ed.
150; Ex parte Strieker, 109 Fed. 145.
The contention has been made, and successfully in some courts,
that a court has the power to refuse a party in contempt the right
to defend in the principal case on its merits. The weight of author-
ity is to the effect, however, that a party cannot be deprived of
an opportunity to appear, defend, and appeal from any proceeding
against him because he is in contempt therein: Foley v. Foley, 120
Cal. 33, 65 Am. St. Rep. 147, 52 Pac. 122; Younger v. Superior Court,
136 Cal. 682, 69 Pac. 485; People v. Horton, 46 111. App. 434; Glover
April, 1906.] Trough v. Trough. 953
▼. American etc. Ins. Co., 130 Mo. 173, 32 S. W. 302; Hebb v. Tucker
County Court, 48 W. Va. 279, 37 S. E. *676; Haldane v, Eckford, L. R.
7 Eq. 425. The denial of the right of the party to defend because
in contempt has generally been exercised, or attempted to be exer-
cised, by striking his demurrer or answer from the files.
The leading case on this question, wherein are reviewed the earlier
American and English decisions, is Hovey v. Elliott, 167 U. S. 409,
17 Sup. Ct. Rep. 841, 42 L. ed. 215. The question there presented
and answered was, to quote from the opinion: "Whether a court
possessing plenary power to punish for contempt, unlimited by stat-
ute, has the right to summon a defendant to answer, and then after
obtaining jurisdiction by the summons, refuse to allow the party
summoned to answer or strike his answer from the files, suppress
the testimony in his favor, and condemn him without a considera-
tion thereof and without a hearing, on the theory that he has been
guilty of a contempt of court. The mere statement of this proposi-
tion would seem, in reason and conscience, to render imperative a
negative answer. The fundamental conception of a court of justice
is condemnation only after hearing. To say that courts have in-
herent power to deny all right to defend an action and to render
decrees without any hearing is, in the very nature of things, to con-
vert the court exercising such an authority into an instrument of
wrong and oppression, and hence to strip it of that attribute of jus-
tice upon which the exercise of judicial power necessarily depends.
.... It is a rule as old as the law, and never more to be respected
than now, that no one shall be personally bound until he has had
his day in court, by which is meant, until he has been duly cited
to appear, and has been afforded an opportunity to be heard. Judg-
ment without such citation and opportunity wants all the attributes
of a judicial determination; it is judicial usurpation and oppression,
and can never be upheld where justice is justly administered." And
speaking of the assertion that courts of chancery in England have
possessed and exercised such power from the earliest times, the court
furthermore said: "Certain it is that in all the reported decisions
of the chancery courts of England no single case can be found where
a court of chancery ever ordered an answer to be stricken from the
files and denied to a party defendant all right of hearing because of
a supposed contempt. And the American adjudications, whilst there
are two cases, one in New York and the other in Arkansas, asserting
the existence of such power, an analysis of these cases and the author-
ities upon which they rely will conclusively show the erroneous
character of the conclusions reached."
The provision in section 1991 of the California Code of Civil Pro-
cedure, authorizing a court to strike out the answer of a defendant
who fails to attend when required to give his deposition, has boon de-
clared unconstitutional, as tending unduly to rfstrict the right to
defend an action: Summcrville v. Kelliher, 144 Cal. 155, 77 Pac. 889.
954 American State Reports, Vol. 115. [W, Virginia.
b. In Divorce Suits. — The authority of a court to strike from the
files the pleadings of a defendant on the ground that he is in con-
tempt in disobeying the orders of the court in the pending actions,
has been contended for most frequently, perhaps, in suits for di-
vorce. There seems to be no doubt that where a husband institutes
an action for a divorce, and the court makes an order directing him
to pay temporary alimony and suit money to enable the defendant
to make her defense, his neglect or refusal to obey the order will
warrant the court in refusing to proceed further with the case until
the payment is made as directed: Mangels v. Mangels, 6 Mo. App.
481; State v. St. Louis Court, 99 Mo. 216, 12 S. W. 661; Reed v.
Eced, 70 Neb. 779, 98 N. W. 73; Newhouse v. Newhouse, 14 Or. 290,
12 Pac. 422; Scott v. Scott, 9 8. Dak. 125, 68 N. W. 194; Wright v.
Wright, 6 Tex. 29.
Some courts have intimated, and some have actually held, that
where a wife brings an action for a divorce, and the defendant de-
clines or neglects to obey an order of the court to pay temporary
alimony and counsel fees to enable her to prosecute her suit, the
court has authority, at least in extreme cases, to strike out his an-
swer, and proceed with the action as though no answer had been
filed: Casteel v. Casteel, 38 Ark. 477; Peel v. Peel, 50 Iowa, 521;
McClung V. McClung, 40 Mich. 493; Walker v. Walker, 82 N. Y.
260; Quigley v. Quigley, 45 Hun, 23; Brisbane v. Brisbane, 67 How.
Pr. 184; Knott v. Knott, 6 App. Div. 589, 39 N. Y. Supp. 804. This
rule has been applied where the defendant, refusing to comply with
the order to pay alimony, has absented himself from the state, so
that he cannot otherwise be punished, except by striking out his an-
swer: Zimmerman v. Zimmerman, 7 Mont. 114, 14 Pac. 665; Bennett
V. Bennett, 15 Okla. 286, 81 Pac. 632, 70 L. R. A. 864.
A majority of the authorities, however, maintain that, as a rule,
a court has no power, when the defendant in a divorce action is in
contempt in disobeying an order to pay alimony, to strike out his
answer, or otherwise prevent him from interposing a defense on the
merits; for such a course not only deprives the defendant of his day
in court, but it ignores the public interest in the preservation of the
marriage relation: See the principal case, ante, p. 940; Foley v. Foley,
120 Cal. 33, 65 Am. St. Rep. 147, 52 Pac. 122; Cason v. Cason, 15
Ga. 405; Gordon v. Gordon, 141 HI. 160, 33 Am. St. Rep. 294, 30 N.
E. 446, 21 L. R. A. 387; Bastes v. Bastes, 79 Ind. 363; Bailey v.
Bailey, 69 Iowa, 77, 28 N. W. 443; Allen v, Allen, 72 Iowa, 502, 34
N. W. 303; Dwelly v, Dwelly, 46 Me. 377; McMakin v. McMakin,
68 Mo. App. 57; Larson v. Larson, 9 S. Dak. 1, 67 X. W. 842; Bachelor
V. Bachelor, 30 Wash. 639, 71 Pac. 193; Ward v. Ward, 70 Vt. 430,
41 Atl. 435.
CASES
IN THE
SUPREME COURT
OP
WISCONSIN.
JACKIVTAN V. EAU CLAIRE NATIONAL BANK.
[125 Wis. 465, 104 N. W. 98.]
BANKRUPTCY — Conversion of Mortgaged Property — Demand.
In an action to recover mortgaged property transferred in fraud
of the bankruptcy act, when such property has been converted before
the commencement of the action and its proceeds applied to the
mortgage indebtedness due the defendant, no demand for its return
is necessary, (p. 957.)
BANKEUPTCY — Eecovery of Unlawful Preferences — Filing of
Claims. — If a trustee brings an action to recover unlawful preferences
made by the bankrupt in fraud of the bankruptcy act, it is not neces-
sary for him to allege in his complaint that any creditor has filed
a claim in the bankruptcy proceeding, or any fact showing that it
was necessary to recover the alleged preference, (p. 957.)
BANKEUPTCY — Illegal Preferences. — In an action by a trus-
tee in bankruptcy to recover the proceeds of property alleged to
have been transferred in fraud of the bankruptcy act, the question
as to whether there was one or more classes of creditors, and in what
manner the property sought to be recovered would be administered,
does not vary the legal rights of the trustee to recover the property.
(p. 960.)
BANKEUPTCY — Jurisdiction of State Courts. — State courts
have jurisdiction to litigate questions arising between a trustee in
bankruptcy and any adverse claimant concerning transfers of prop-
erty claimed to have been made in fraud of the national bankruptcy
act. (p. 961.)
BANKEUPTCY — ^Unlawful Preferences — Conversion — Trover.
If a transfer of property in fraud of the national bankruptcy act
consists in carving out an interest in the projierty and transfirrini;
it by means of a chattel mortgage, and the bankrupt then sells thi-
mortgaged property to a third person subject to the mortgage, such
third person then valuing the mortgage interest and delivering it
to the mortgagee in notes wliich are subsequently paid, such notes
are not projierty obtaineil by the mortgagee, but instruments by
means of which the mortgage interest is transferred to him in the
form of money, and such transactions constitute a wrongful conver-
sion of the property to the extent of such mortgage interest for the
recovery of the proceeds of whioh trover will lie at the suit of the
trustee in bankruptcy, (pp. 9<):?. 9f)4.)
(955)
956 American State Reports, Vol. 115, [Wisconsin,
BANKETTPTCY — Unlawful Preference — Notice of Insolvency.
If a chattel mortgage is claimed to have been given to create a pref-
erence in fraud of the provisions of the national bankruptcy act, the
question of the knowledge of the mortgagee of the mortgagor's insol-
vency at the time of the execution of the mortgage is one of fact,
and such mortgagee is chargeable with notice of all facts which a
reasonable inquiry in view of the circumstances with respect to the
mortgagor's financial condition, or which were brought home to him,
might fairly be expected to disclose, (p. 965.)
BANKRUPTCY — ^Unlawful Preferences— Notice of Insol-
vency.— If a creditor receives security for the payment of his claim,
with knowledge, or reasonable means of knowledge, of the insolvency
of the debtor at the time, and that is followed within four months
by the commencement of proceedings in bankruptcy against or on
the part of the debtor, the intention of such security being to give
the favored creditor a preference, and yet have the same standing as
other creditors for the balance of his claim, as he would have if the
transaction were valid, the effect thereof is to give such creditor an
undue advantage and preference within the meaning of the national
bankrupt act. (p. 965.)
BANKRUPTCY — Conflicting Actions. — If a trustee in bank-
ruptcy brings an action to recover from a guilty agent the value of
property wrongfully converted by the debtor, this is not a bar to an
action by such trustee to recover the value of the same property
from the guilty principal, when both actions are commenced on tho
theory that such property was converted in fraud of the bankruptcy
act. (p. 966.)
BANKRUPTCY — ^Unlawful Preferences — Recovery. — A trustee
in bankruptcy acting for creditors in an action to recover unlawful
preferences made by the debtor is not entitled to recover money
paid him by mistake, and by him paid over to the person holding
such preferences, when such money is no part of the bankrupt's
assets, (p. 968.)
BANKRUPTCY — Unlawful Preferences — Lien Claims. — In an
action brought by a trustee in bankruptcy to recover the value of
property of the debtor wrongfully converted in fraud of the bank-
ruptcy act, he is not entitled to recover money realized by the person
holding such property in the enforcement of lien claims thereon.
Such money is a mere realization by such person of his interests in
the property paramount to the rights of the trustee, and not in
violation of the bankrupt act governing unlawful preferences, (p.
968.)
Action by a trustee in bankruptcy to recover the value of
property transferred by chattel mortgage, as a preference in
violation of the national bankrupt act. The facts fully ap-
pear from the opinion of Mr. Justice McKenna, delivered by
the supreme court of the United- States in affirming the prin-
cipal case and hereafter appended.
Bundy & Wilcox, for the plaintilBf.
- Wickman & Farr, for the defendant.
Oct, 1905.] Jackman v. Eau Claire Nat. Bank. 957
"♦TB KERWIN, J. On defendant's appeal several errors
are assigned, which, so far as deemed necessary, will be con-
sidered in their order.*
1. It is claimed that the court erred in overruling defend-
ant's demurrer to plaintiff's complaint, because no demand
was alleged, and, further, that the complaint does not suffi-
ciently allege the necessity of bringing the action. Had the
property covered by the chattel mortgages been in the posses-
sion of or under the control of defendant at the time action
was brought by the trustee, so that it could have been surren-
dered upon demand, it would be necessary to consider and de-
cide this question. There is very respectable authority to the
effect that no demand is necessary before action by a trustee
to recover property transferred in fraud of the bankrupt act,
upon the theory that, the whole transaction resulting in a
preference being unlawful, no demand is necessary: Gold-
berg v. Harlan, 33 Ind. App. 465, 67 N. E. 707 ; Loveland
on Bankruptcy, 609; Bull v. Houghton, 65 Cal. 422, 4 Pac.
529. But in the case before us it appears from the allegations
of the complaint that the mortgaged property had been con-
verted before the commencement of the action and the pro-
ceeds applied upon the mortgaged indebtedness of the de-
fendant. The defendant, by such conversion, put it out of its
power to restore the property, and under such circumstances
no demand was necessary : Dunham v. Converse, 28 Wis. 306 ;
Crarapton v. Valido M. Co., 60 Vt. 291, 15 Atl. 153, 1 L. R. A.
120 ; Shuman v. Fleckenstein, 4 Saw. 174, No. 12,826.
Counsel for defendant further claims that the complaint is
defective in not alleging that any creditor had filed a claim
in the bankruptcy proceeding, or any fact showing that it was
necessary to recover the alleged preference, and i\Iueller v.
'*^« Bruss, 112 Wis. 406, 88 N. W. 229, is cited in support of
this contention. It is sufficient answer to this proposition to
say that such case deals only with the provision of the bank-
rupt act concerning the capacity of the trustee to avoid trans-
fers of property in fraud of creditors, which, in the absence
of the bankruptcy proceedings, such creditors might them-
selves avoid. This action deals with an entirely different
matter, under that part of the bankruptcy act relating to un-
lawful preferences, where it is provided that: "If a bank-
rupt shall have given a preference within four months before
the filing of a petition and before the adjudication, and the
958 American State Reports, Vol, 115. [Wisconsin,
person receiving it, or to be benefited thereby, or his agent;
acting therein, shall have had reasonable cause to believe that
it was intended thereby to give a preference, it shall be void-
able by the trustee and he may recover the property or its
value from such person": Bank. Act July 1, 1898, c. 541.
subd. b, sec. 60, 30 Stats, at Large, 562 (U. S. Comp. Stats.
1901, p. 3445).
No condition precedent to the right of the trustee to re-
cover such property is found in the statute, as will be seen,
and obviously courts cannot legitimately ingraft any upon it.
2. Concerning the second assignment of error but little
need be said. The president of defendant was called fbr ex-
amination as an adverse party by plaintiff. Objection was
made by plaintiff to defendant's right to cross-examine this
witness, as he was called by plaintiff for cross-examination
as an adverse party, and the objection sustained. We fail to
see how defendant was prejudiced by this ruling. It could
have called and examined the witness, and he, being president
of the bank, doubtless was not an unwilling or hostile witness.
Therefore no reversible error was committed by the ruling.
3. Error is assigned upon the alleged ambiguity in and in-
sufficiency of questions 4 and 5 of the special verdict, which
deal with the subject as to whether the Waters-Clark Lumber
Company, in acquiring title to the property in question, acted
for the bank with the understanding that a portion of the pro-
ceeds ^'"'^ of such property would be accounted for to defend-
ant. Much that is said by counsel for plaintiff on this branch
of the case is quite immaterial in view of the conclusion we
have reached that the legal wrong for which defendant is
liable goes back to the time the chattel mortgage was executed,
and goes no further than the interest in the logs and lumber
which in the form of money finally came to its possession.
The only direct interest, as it appears from the uncontroverted
evidence, was represented by the chattel mortgages, certain
lien claims acquired by purchase, and a small amount addi-
tional that will be referred to specifically hereafter, and which
was, as appears, substantially charged to it in the accounting
by which the total interest in the property for which defend-
ant was liable was arrived at. We can hardly agree with the
treatment by the learned circuit judge in his opinion of the
verdict as to the questions under discussion. He expressed
the view that such questions and the answers thereto do not
find that the lumber company acted as agent for defendant in
Oct. 1905.] Jackman v. Eau Claire Nat. Bank. 959
taking the title to the lumber. We find in the learned judge 's
opinion: "It is not found that the lumber company was the
agent of the defendant. If that were so, then it would result
that the defendant really received the property. The jury
has found that the lumber company took title pursuant to an
agreement between Young and the bank by which the lumber
company was to account to the bank for a portion of the
proceeds. The bank received the notes, and not the logs and
lumber. ' '
This part of the opinion of the learned circuit judge can
hardly be reconciled with the language to which it refers,
since it in effect sets the verdict aside as to the two questions
and substitutes in place thereof, as a fact shown to exist by
the undi.sputed evidence, that the lumber company, without
any other relation to the bank than an understanding with it
that its interest in the logs and lumber should be recognized
and satisfied out of the proceeds of such property, purchased
^"^^ the same. When the jury decided that the lumber com-
pany took title to the property acting for the defendant and
for its benefit, they pretty clearly decided that the latter was a
principal and the former a mere agent in the matter. How-
ever, the evidence seems to clearly establish that the lumber
company purchased the property from Young in the regular
course of business, without any understanding with the defend-
ant other than that its interest in the property as mortgagee
and claimant under numerous statutory labor liens should be
recognized and the equivalent thereof in money delivered to
it out of the proceeds. It were better if the court had en-
tirely omitted the two questions criticised, because the matters
covered by them were not in controversy on the evidence, and
had framed one appropriate to the ca.se and directed the
proper answer, or left the matter to the jury, or found the
facts independently. Having taken the answers and come to
the conclusion indicated by that part of the opinion quoted,
the better way certainly would have been to set the answers
aside, rather than to bend the (lucstions into a form which
would harmonize with the supposed truth of the matter.
We may say in passing that the idea which the court voiced
in the opinion that defendant did not receive any logs or lum-
ber, but received notes, so far as it suggests that defendant did
not receive the property, or any of it, for which the recovery
was sought, is hardly consistent with the reiulition of the
judgment which followed, since the very purpose of the action
960 American State Reports, Vol. 115. [Wisconsin,
was to recover the value of property, logs and lumber, not
notes, wrongfully converted by defendant to its own use. If
the reasoning of the learned court were sound, the suggestion
made by counsel for the defendant that the action was brought
on one theory and went to judgment on another would not be
wholly without merit. The fact is, as it seems, that th6 de-
fendant did in legal effect receive into its possession and con-
vert to its use the property in question to the extent of the
chattel mortgage interest. The foregoing '^^ renders it un-
necessary to discuss further questions 4 and 5, or to consider
complaints made as to instructions given in respect thereto.
4. Error is assigned on the instruction to the effect that all
the creditors belonged to one class. Whether that is right or
wrong does not seem to in any way concern the case. This
action, as we have indicated, is simply one in trover to re-
cover the value of property which, as is alleged, was in fraud
of the bankrupt act, wrongfully converted by defendant to its
own use. Whether there was one or more classes of creditors,
and in what manner the property sought to be recovered
would, if the suit were successful, be administered, did not
vary in the slightest degree the legal rights of the plaintiff.
If the property was obtained by the defendant in fraud of
the bankrupt act, plaintiff was entitled to recover the same,
and this is the only question involved.
5. Error is assigned because of the refusal to direct a ver-
dict for defendant and in denying defendant's motion to cor-
rect the special verdict and for judgment in favor of defend-
ant. A vigorous argument is made by counsel for defendant
against the right of the trustee to mantain this action in the
state court, relying mainly upon two Wisconsin cases: Brig-
ham V. Claflin, 31 Wis. 607, 11 Am. Rep. 623; Bromley v.
Goodrich, 40 Wis. 131, 22 Am. Rep. 685. These cases were
decided under the bankrupt act of 1867, which was quite
different from the law under which the present case was
brought; and it appears that one of the reasons given for
denying the right of the state court to take jurisdiction was
that the federal courts had exclusive jurisdiction in such cases,
and that conflicts of interest might arise. Under the bankrupt
act of 1898 the supreme court of the United States, in Bardes
V. Ilawarden Bank, 178 U. S. 524, 20 Sup. Ct. Rep. 1000, 44
L. ed. 1175, held that the United States courts had no juris-
diction over suits similar to the one before us unless by
consent of the proposed defendant; and that in the absence
Oct. 1905.] Jackman v. Eau Claire Nat, Bank. 961
of express prohibition the state courts lose none of their juris-
diction ^*® to litigate questions arising between the trustee in
bankruptcy and any adverse claimant concerning transfers of
property claimed to be made in fraud of the bankrupt act.
That even jurisdiction conferred upon the United States
courts does not devest the state courts of jurisdiction in such
cases: Bardes v. Ilawarden Bank, 178 U. S. 524, 20 Sup.
Ct. Rep. 1000, 44 L. ed. 1175. Under the above decision at the
time this action was commenced the United States courts had
no jurisdiction of the action, and unless it could be brought
in the state court the plaintiff was without a remedy and the
provisions of the bankrupt act practically nullified. It is
therefore ver>' clear that by the bankrupt act of 1898 the gen-
eral jurisdiction of the state courts in independent actions
between the trustee and adverse claimants was in no manner
abridged, and this doctrine is recognized in subdivision b,
section 23, Bankruptcy Act of 1898 (30 Stats, at Large, 552
[U. S. Comp. Stats. 1901, p. 3431]), which provides that
"suits by the trustee shall only be brought or prosecuted in
the courts where the bankrupt, whose estate is being admin-
istered by such trustee, might have brought or prosecuted
them if proceedings in bankruptcy had not been instituted,
unless by consent of the proposed defendant." This subdi-
vision was amended in 1903 (Act Feb. 5, 1903, c. 487, sec. 8,
32 Stats, at Large, 798 [U. S. Comp. Stats. Supp. 1903, p.
413]) by adding: "except suits for the recovery of property
under section sixty, subdivision b, and section sixty-seven,
subdivision e. " So when this suit was brought it could not
be maintained in the federal court without the consent of
the defendant : Bardes v. Hawarden Bank, 178 U. S. 524, 20
Sup. Ct. Rep. 1000, 44 L. ed. 1175 ; Perkins v. McCauley, 98
Fed. 286. The bankrupt act of 1898 neither expressly nor
by necessary implication having excluded the state court or
given exclusive jurisdiction to the federal courts in suits by
tru.stees to recover property transferred in fraud of the bank-
rupt act, the ordinary jurisdiction of the state court under
the constitution and laws continued to exist: French v. R. P.
Smith & Sons, 81 .Minn. 341, 84 N. W. -*«» 44; Chism v. Citi-
zens' Bank, 77 Miss. 599, 27 South. 637; Bardes v. Hawarden
Bank, 178 U. S. 524, 20 Sup. Ct. Rep. 1000, 44 L. ed. 1175.
And this doctrine is in harmony with the general theory in
favor of concurrent jurisdiction under the constitution and
laws. No rea.son exists why a contestant with a bankrupt
Am. St. Rep., Vol. 115— €1
962 American State Reports, Vol. 115, [Wisconsin,
in such case should lose any of his rights by the bankruptcy
of his adversary, and for obvious reasons it might be prefera-
ble for him to litigate in the state courts. Hence the pro-
vision of subdivision b, section 23, of the Bankruptcy Act of
1898, to the effect that suits by a trustee shall only be brought
in the courts where the bankrupt might have brought and
prosecuted them if proceedings in bankruptcy had not been
instituted, unless by the consent of the proposed defendant:
Clafiin v. Houseman, 93 U. S. 130, 23 L. ed. 833. It is well
settled that, unless exclusive jurisdiction be given to the fed-
eral court, state courts have concurrent jurisdiction, subject
to review by the supreme court of the United States, except
in cases where by the constitution itself the power is given
exclusively to the federal courts or prohibited to the state
courts: Martin v. Hunter, 1 Wheat. 304, 4 L. ed. 97; Hous-
ton V. ]\Ioore, 5 Wheat. 1, 5 L. ed. 19; Claflin v. House-
man, 93 U. S. 130, 23 L. ed. 833. It is clear, therefore,
as a general proposition, that at the time this action was
commenced state courts had jurisdiction of such contro-
versies. But it is claimed on the part of the defendant
that the action cannot be maintained without overruling
Brigham v. Claflin, 31 Wis. 607, 11 Am. Rep. 623, and
Bromley v. Goodrich, 40 Wis. 131, 22 Am. Rep. 685. It will
be observed, however, that these cases were decided under
the bankrupt act of 1867, and it was held under this act that
the federal and state courts had concurrent jurisdiction, and
hence the bankruptcy statute was not nullified by refusal
on the part of the state courts to take jurisdiction. Besides,
these Wisconsin decisions were put upon the ground that the
action being penal, and arising under the federal statute
providing a fec^oral forum for redress, state courts should not
interfere to eiu>-rce a penalty under a federal statute. And
further, that conflicts might arise between the state ^^^ and
federal courts, and this being so, and the statute a penal
one, and the United States courts having jurisdiction, grave
consequences were anticipated in the assumption of jurisdic-
tion by the state courts. In Brigham v. Claflin, 31 Wis. 607,
11 Am. Rep. 623, at page 613, this court says: "In the first
place, it must be obvious that the assertion of a state juris-
diction in such causes will greatly tend to protract and mul-
tiply suits in respect to the bankrupt's estate, and will inevi-
tably be a most fruitful sourse of conflict and collision between
Oct. 1905.] Jackman v. Eau Claire Nat. Bank. 963
the state and federal tribunals. The object and policy of the
bankrupt law manifestly are to collect and distribute the
property of the bankrupt among his creditors as promptly as
practicable; and these ends can be much more readily accom-
plished by the United States courts — which have plenary jur-
isdiction in these matters — than by tribunals acting by differ-
ent modes, and deriving their powers from other sources."
No such consequences could result from the bariknipt act
of 1898. On the contrary, the contention of counsel for de-
fendant would put the trustee in the anomalous position of
being unable to administer his trust because no court was
open to him. The bankrupt act of 1898 clearly contemplates
that suits similar to the one before us may be brought in state
courts, and cannot in the United States courts. This court
has declined to follow the doctrine of Brigham v. Claflin, 31
Wis. 607, 11 Am. Rep. 623, and has, in effect, held that actions
like the instant case may be maintained in the state courts:
Binder v. McDonald, 106 Wis. 332, 82 N. W. 156; Mueller
V. Bruss, 112 Wis. 406, 88 N. W. 229. State courts, there-
fore, should take jurisdiction, and the action was properly
brought: Claflin v. Houseman, 93 U. S. 130, 23 L. ed. 833;
Mueller v. Bruss, 112 Wis. 406, 88 N. W. 229; Bardes v.
Hawarden Bank, 178 U. S. 524, 20 Sup. Ct. Eep. 1000, 44 L.
ed. 1175; Lyon v. Clark, 124 Mich. 100, 82 N. W. 1058, 83
N. W. 694; French v. R. P. Smith & Sons Co., 81 Minn. 341,
84 N. W. 44 ; Perkins v. McCauley, 98 Fed. 286 ; Huntington
V. Attrill, 146 U. S. 657, 13 Sup. Ct. Rep. 224, 36 L. ed. 1123 ;
Whitman v. Oxford ^^^ ^at. Bank, 176 U. S. 559, 20 Sup. Ct.
Rep. 477, 44 L. ed. 587; Chism v. Citizens' Bank, 77 Miss. 599,
27 South. 637.
It is further claimed by counsel for defendant that the
property for the value of which this suit was brought had
never been sold or received by the defendant, and therefore
the action cannot be maintained ; that the defendant received
notes, not property. It was established on the trial, without
any room for reasonable controversy, that what the bank got
was its mortgage interest, obtained in fraud of the bankrupt
act, and its interest by reason of certain lien claims, and a
small amount in addition, as we have before indicated. The
notes were but mere instruments by moans of which its inter-
est in the property was transferred to its possession in the
form of money. To all intents and purposes it received the
964 American State Reports, Vol. 115. [Wisconsin,
logs and lumber to the extent of its interests therein as effect-
ually as any chattel mortgagee obtains his interest in the
subject covered thereby when a purchaser thereof subject to
the mortgage values the mortgage interest and delivers it to
the mortgagee in money. The act of carving out an interest
in the property and transferring it by means of the mortgage,
and the enforcement thereof in fraud of the bankrupt act,
was, to all intents and purposes, a wrongful conversion of the
property to that extent. The complaint was in trover, which
was proper under the circumstances: The difficulty at several
points in this case is in the fact before mentioned, that the
mere instrument by means of which an interest in the prop-
erty was transferred to defendant has been treated as the
property defendant obtained.
It is further claimed by defendant that there is no evidence
sufficient to support the finding that defendant had reasona-
ble cause to believe that Young intended by the sale to enable
the bank to obtain a greater percentage of its debt than other
creditors of the same class would be able to obtain, and we
are earnestly asked by counsel to carefully consider the evi-
dence upon this subject. Quite a lengthy argument is
^®'* made by counsel to the effect that the enforcement of the
mortgage indebtedness would not enable defendant to obtain
a greater percentage of its debt than any other creditor of the
same class; hence there was no preference. There is abun-
dance of evidence to the effect that Young was insolvent at
the time of execution of the mortgages, and that the agents
of defendant, when the mortgages were executed, has reason-
able cause to believe that Young intended to give defendant
a preference. It would serve no useful purpose to go into
a lengthy discussion of the evidence upon this proposition.
Young was hopelessly insolvent when the mortgages were ex-
ecuted. He in effect told the officers of the bank, when re-
quested to make the mortgages, that he did not have sufficient
property to pay all his creditors. He did all his banking
business with defendant. He was not a man of large means
or large business interests. Defendant had examined into
his affairs, and knew, or ought to have known, his financial
condition. His indebtedness to the bank during a period ot
about two years prior to the execution of the mortgages had
increased from $2,000 to $27,000, while during the same
time there is evidence to the effect that his assets decreased.
Oct. 1905.] Jackman v. Eau Cl^^ire Nat. Bank. 965
The officers of the bank were urging payment for a year before
the mortgages were given, claiming the loan was too large.
It appears that a day or so after Young's mill burned an
officer of the bank requested him to execute chattel mort-
gages, and presented them to him prepared; that he refused,
saying it would not be fair to do that and leave all the rest
of his creditors, as he did not have enough to pay all he
owed; and the officer of defendant said he ought lot to go
back on the bank, that it had used him well, and he ought to
give it a mortgage. At this time he refused to execute the
mortgages, but did about a week later. Young testified that
he intended to give defendant a preference. It is true he
made statements to the bank showing his assets much larger
than they really were, but, in view of the large indebtedness
'^^^ to the bank and its familiarity with his business, together
with the fact that he was meeting practically all his obliga-
tions with fresh promises to pay, and constantly increasing
his indebtedness, the defendant must be charged with knowl-
edge of his insolvency at the time of the execution of the
mortgages. But it is useless to pursue the investigation. It
is sufficient to say that we are convinced from a careful ex-
amination of the evidence that it supports the verdict, and
upon well-established principles such finding cannot be dis-
turbed. Whether defendant had reasonable cause to believe
that Young was insolvent within the meaning of the bank-
rupt act was a question of fact, and it was chargeable with
notice of such fact as reasonable inquiry in view of the cir-
cumstances with respect to the debtor's condition, which were
brought home to it, might fairly be expected to disclose. So
the facts and circumstances in this case were sufficient to war-
rant the jury in finding that the mortgages were executed
with intent of giving defendant a preference: In re Eggert,
102 Fed. 735. 43 C. C. A. 1; Hackney v. Raymond Bros.
Clarke Co., 68 Neb. 624, 94 N. W. 822, 99 N. W. 675 ; Giddings
V. Dodd, 1 Dill. 116.
It is claimed, however, by counsel for defendant that, un-
less the enforcement of the mortgages would operate to give
defendant a greater percentage of its debt than other credi-
tors of the same class would receive, the mortgages did not
amount to a conveyance of property — or, in other words, a
preference — within the meaning of the bankrupt act. We do
not 80 undersUind the law. The federal statute renders void
966 American State Reports, Vol. 115. [Wisconsin,
any preference given under the circumstances specified
therein, and, as we have seen, gives the trustee in bankruptcy
the right to recover any property, or its value, conveyed in
violation of such act. Manifestly, if a creditor receives secur-
ity for the payment of his claim, and that is followed within
four months by the commencement of proceedings in bank-
ruptcy against or on the part of the debtor, the intention of
■*** such security being to give the favored creditor a prefer-
ence (he having knowledge or reasonable means of knowledge
thereof), and yet have the same standing as other creditors
for the balance of his claim, as he would have if the transac-
tion were valid, the effect would necessarily be to give such
creditor an undue advantage — a preference, within the mean-
ing of the bankrupt act. That is too clear to admit of rea-
sonable controversy: Toof v. Martin, 13 Wall. 40, 20 L. ed.
481.
The further point is made that prior to the commencement
of this action plaintiff ratified the sale by Young to the
Waters-Clark Lumber Company, which, by this action, it is
sought to avoid, in that July 7, 1902, he began an action
against such company on the theory that there was such a
sale; that the property was of the value of $35,000; that the
company agreed to pay certain liens on the property, and that,
after taking account thereof, there was a balance due Young;
that the action was grounded on implied contract, and pre-
cluded subsequent action sounding in tort to recover the sub-
ject of the sale. True, one cannot pursue inconsistent reme-
dies to obtain redress for a single wrong. He cannot bring
replevin or trover upon the theory that the property involved
is his, and subsequently sue upon contract as if the title to
the property had passed from him or beyond his reach : Ful-
ler-Warren Co. V. Harter, 110 Wis. 80, 84 Am. St. Rep. 867,
85 N. W. 698, 53 L. R. A. 603 ; Smeesters v. Schroeder, 123
Wis. 116, 101 N. W. 363; Rowell v. Smith, 123 Wis. 510, 102
N. W. 1. But we fail to see how this doctrine applies here.
Counsel for defendant seems to have misconceived the char-
acter of the action commenced by the plaintiff against the
Waters-Clark Lumber Company. As we read the complaint,
a copy of which is found in the record, the cause of action
set forth therein is similar to* the one here. It is in trover
to recover the value of property wrongfully converted. The
lumber company is there charged with having, as agent for
the defendant here, in fraud of the bankrupt law, obtained
Oct. 1905.] Jackman v. Eau Claike Nat. Bank. 967.
possession of the property '*^'' in question by purchasing the
same of Young. This action charges the same thing. While
before the effort was to recover the value of the property of a
guilty agent, here the purpose was to recover the value of the
property of the guilty principal. Both actions were com-
menced upon the theory that the property in question was, in
fraud of the bankrupt law, converted by the lumber company
and the defendant, the former acting as agent of the latter.
6. It is further assigned as error that the judgment is ex-
cessive. The court fixed the amount by taking the aggregate
of the two notes and the $700 paid for nonlien time checks
held by the bank, aggregating $6,660.99, and deducting there-
from $406, amount of nonlien time checks taken by defend-
ant between February 20th and IMarch 29th, leaving the bal-
ance of $6,254.99, for which amount, with interest and costs,
judgment was rendered. Counsel for defendant concedes that
the $406 should not have been deducted, but contends that,
because there was included, in one of the notes making up the
aggregate of $6,660.99, $413 overpajTuent on the purchase
price of the logs by the Waters-Clark Lumber Company, the
difference between the $413 and $406 makes the judgment to
that extent excessive in the sum of $7. But there is evidence
that the amount of this so-called overpayment on purchase
price was in fact only $377.05. It is quite clear from the
record that the $406 should not have been deducted from the
$700, amount of nonlien time checks held by defendant Feb-
ruary 20, 1902, but should have been deducted from $1,106,
the amount of nonlien time checks held by defendant March
29, 1902. The amount of the overpayment on purchase price
of logs, however, should have been deducted, and hence the
errors do not substantially affect the judgment. It is claimed
by counsel for plaintiff that, even though the lumber com-
pany paid $413, or any amount, more than the purchase
price of the logs by mistake or otherwise, and that the amount
was included in the judgment, it cannot be considered. This
position ****** is not tenable. If an amount was included in tlie
judgment which should not have been, sufficient substantially
to offset the $406 which was improperly deducted from the
judgment, substantial justice was done between the parties in
that regard and the judgment should not be disturbed. The
trustee acting for the creditors was not entitled to judgment
for any amount paid by mistake by the lumber company to
Young and turned over by Young to the defendant. It was
968 American State Reports, Vol. 115. [Wisconsin,
no part of Young's assets, and therefore did not become any
part of the trust property.
Some other points presented in the brief of counsel for de-
fendant do not strike us as being sufficiently significant to
warrant consideration in this opinion, though it should be
said that all points presented by counsel have, as it is be-
lieved, been fully considered by the court. The amount of
the judgment, as we view the matter, is substantially the
equivalent of the property which defendant secured by its
mortgages. That is all the property, as appears from the
record, which it obtained in fraud of the bankrupt act.
Motions for judgment on the verdict were made in plain-
tiff's behalf, the amounts claimed ranging from upward of
$24,000 down to $6,660.99. On his appeal he complains of
the denial of such motions and seeks to obtain an increase in
the judgment awarded. What has been said seems to effect-
ually dispose of all questions presented in that regard. The
money paid to defendant on the lien claims was for actual
interests in the property paramount to the rights of the plain-
tiff. We use the term "lien claims" in preference to the
term "lienable claims." Under our statute, as construed by
this court, such claims are actual interests in the property to
which they relate, subject to be defeated by failure to perform
certain conditions subsequent made by statute necessary to
the preservation and enforcement of the lien. The term
"lienable claim" suggests mere right to obtain an interest in
specific property instead of an interest in praesenti therein.
489 rpjjg latter is in the character of a laborer's lien on logs
and lumber under our statute. His interest in the property
he acquired by performance of the labor : Smith v. Shell Lake
L. Co., 68 Wis. 89, 31 N. W. 694 ; Viles v. Green, 91 Wis. 217,
64 N. W. 856. Manifestly a mere realization in money by
defendant of its interest in property, which was perfectly
valid, was not a violation of the bankrupt act as to unlawful
preferences. The only interest, as we have seen, in the prop-
erty in question, which was acquired by the defendant in vio-
lation of such act, was the mortgage interest, and that inter-
est in money value was embodied in the judgment.
By the COURT. The judgment is affirmed on both ap-
peals.
Oct. 1905.] Jackman v. Eau Claire Nat. Bank. 969
The Principal Cas'? was carried by writ of error to the supreme
court of the United States and there aflBrmed under the title, Eau
Claire Nat. Bank v. Jackman, 204 U. S. 522, 27 Sup. Ct. Eep. 391, 51
L. ed. 000, in an opinion delivered by Mr. Justice McKenna as follows:
"This action was brought by defendant in error, hereafter called
the trustee, in the circuit court of Eau Claire county, state of Wis-
>son8in, against the plaintiff in error, hereafter called the bank, under
lection 60b of the bankrupt act of 1898 (30 Stats, at Large, 562,
s. 541; U. S. Comp. Stats. 1901, p. 3445), to recover the value of
property which, it is alleged, was transferred by the bankrupt to the
bank, for the purpose of giving the latter a preference over other
creditors. Judgment was recovered by the trustee, which, on appeal,
was affirmed by the supreme court of the state: 125 Wis. 465, 104 N.
W. 98. Thereupon this writ of error was sued out.
"The complaint of the trustee alleges that on the 7th of June, 1902,
John H. Young duly filed his petition in bankruptcy in the United
States district court for the western district of Wisconsin, pursuant
to the act of Congress, and was on said day duly declared a bankrupt.
Subsequently defendant in error was duly elected and appointed by
the creditors of the bankrupt as trustee in bankruptcy, and duly
qualified as such trustee.
"The plaintiff in error is and was, at all the times mentioned in
the complaint, a national bank. Young, during the four months imme-
diately preceding the filing of his petition, was the owner and in
possession of certain lumber, shingles, and lath, located at Cadott,
Chippewa county, Wisconsin, and certain logs in or near the Yellow
river and Chippewa river in Chippewa county, which were reasonably
worth the sum of $35,000. The value of all other property owned by
him did not exceed the sum of $500.
"On the 10th of February, 1902, Young was wholly insolvent, and
owed debts which largely exceeded the value of his property, which
fact was well known to him and the bank. The aggregate amount of
his indebtedness exceeded the sum of $40,000, and the value of his
property was substantially $35,000. He was indebted to the bank
in the sum of $27,000 for moneys borrowed from time to time for a
period of about two years previous to that time. On said day Young
executed to the bank a chattel mortgage on 2,100,000 feet of saw-
logs, to secure the sum of $15,900, then owing from him to the bank,
and also executed a chattel mortgage, transferring 1,000,000 feet of
lumber, about 600,000 shingles, and about 200,000 lath, to secure the
sum of $11,100, owing by him to the bank. This indebtedness existed
long prior to said mortgages, and the property transferred consti-
tuted substantially all of the property then owned by Young not
exempt from execution, which facts were well known by him and the
bank. The effect of the foreclosure of the mortgages would be to
enable the bank to obtain a much larger percentage of its debt than
970 American State Reports, Vol. 115. [Wisconsin,
would the other creditors of Young in the same class as the bank.
The mortgages were given by Young and taken by the bank for the
sole purpose of hindering and delaying the other creditors, and were
executed and received for that purpose, and the bank, at the time of
their execution, had reasonable cause to believe that they were given
with the intention to give it a preference over other creditors.
"The Waters-Clark Lumber Company is a corporation of the state
of Minnesota, and D. S. Clark is the president thereof and also a
director in the bank, and W. K. Coffin is the cashier of the latter.
On or about the 10th of March, 1902, Coffin, acting for the bank,
requested Young to transfer to the lumber company, for the benefit
of the bank, all of the property embraced in the mortgages, together
with certain other property. Pursuant to such request Young did,
on or about the 10th of March, 1902, transfer, by absolute bills of
sale, to the lumber company, all of the property described in the
mortgages, and other sawlogs owned by him. The property trans-
ferred was reasonably worth the sum of $35,000. Immediately on
the execution of the bills of sale the lumber company, acting pur-
suant to the directions by and in behalf of the bank, took possession
of the property transferred, and thereafter sold the same and
applied the proceeds to the payment of the indebtedness secured by
the mortgages. At the time the bills of sale were made the lumber
company and the bank thought the property transferred constituted
all of the available assets of Young, and that the result of such
transfer and the appropriation of the proceeds thereof would result
in the other creditors of Young losing all of his indebtedness to them.
The lumber company, acting as vendee of said property, was in real-
ity acting as trustee for the bank, and made such pretended purchase
with the understanding and agreement with the bank and Young
that it would account to the bank for the proceeds of the property
transferred to the amount of his indebtedness, and that any sums
realized in excess of his indebtedness should be paid to Young. The
bills of sale were not executed in compliance with the statutes of
the state. Except as to the agreement to pay said indebtedness, no
consideration was paid by the lumber company for the property, and,
at the time of the transfer of the property, nothing was paid to
Young therefor. By reason of said transactions the bank, within
four months, appropriated to the payment of its claims substantially
all of the property of Young, which at said time was and has been
ever since worth $35,000. There is no other property in the possession
of the trustee, belonging to Young, out of which his other creditors
can be paid.
"The bank demurred to the complaint on the following grounds:
The court had no jurisdiction of the subject of the action; the
trustee had no legal capacity to sue, in that the complaint did not
allege that authority or permission was given him to bring suit; defect
Oct. 1905.] Jackman v. Eau Claire Nat. Bank. 971
of parties, in that Young and the lumber company were not made
parties; and that the complaint did not state a cause of action. The
demurrer was overruled, and the bank, availing itself of the permis-
sion granted, filed an answer, in which it admitted its corporate
character and that of the lumber company, and the execution of the
mortgages and the bills of sale, and that the instruments were not
executed in the manner provided by the statutes of the state. It
denied all the other allegations of the complaint, and alleged that a
portion of the proceeds of the sale of the property was paid to the
bank to discharge valid and existing liens which it held against the
property. And it alleged that the mortgages were given for a good
and valuable consideration, and that neither of them nor the payments
to the bank were made or received for the purpose of giving the
bank a preference over other creditors of Young 'contrary to the
provisions of the bankruptcy laws, ' and 'that, prior to the commence-
ment of this action, the plaintiff commenced an action in this court
against said Waters-Clark Lumber Company to recover from said
Waters-Clark Lumber Company the purchase price of logs and other
material sold by said Young to said Waters-Clark Lumber Company,
and thereby elected to treat and consider said contract between said
Young and said Waters-Clark Lumber Company as legal and valid,
and elected to look to and hold the said Waters-Clark Lumber Com-
pany, instead of this defendant, as liable to said trustee for all sums
of money which the said plaintiff may be entitled to recover on
account of the transactions mentioned in plaintiff's complaint.'
"Questions were submitted to the jury covering the issues in the
case, except the value of the property, which, by stipulation of par-
ties, was reserved for the court. The jury, in response to the ques-
tions, found that at all the days mentioned in the complaint the
property transferred ?it a fair valuation was insufficient to pay
Young's debts; that the lumber company, acting for the bank and
pursuant to the arrangement between it and the bank, took the
legal title to the lumber and logs for the benefit of the bank under
an agreement with it and Young to account to the bank for a portion
of the proceeds; that it was the intention of Young, by the execution
of the mortgages and thq transfer of the property to give the bank
a preference, and that the bank and officers and agents had reasona-
ble cause to believe that Young intended to give it such preference
and to enable it to obtain a greater percentage of its indebtedness
than any other of his creditors of the same class would be able to
obtain.
"The court found that the lumber which was included in the
bank 's mortgage was worth $3,4r)2.S5, and that a note for that
sum and value was given by the lumber company to Young and by
him traiiHferrod to the bank; that the Cadott logs, includid iu the
mortgage and sold by Young to the lumber company, were worth
972 American State Reports, Vol. 115. [Wisconsin,
$10,077.84; that the up-river logs not included in the mortgage, but
sold to the lumber company by Young, were worth $11,055.84, and
that a note which was given as the net proceeds of the sale of both
quantities of logs over and above certain labor liens was worth
$2,508.14. This note was given by the lumber company to Young and
transferred by him to the bank. The trustee contended in the trial
court that he was entitled to recover for the entire value of the
logs and lumber, and that no credit should be allowed the bank for
the sums paid by it to discharge certain liens on the property for
labor claims and unpaid purchase money. The court rejected the
contentions and gave judgment for the trustee in the sum of $6,254.99.
In this sum was included the value of the notes.
"The assignments of error are that the supreme court erred in
the following particulars: (1) In determining that the complaint
stated a cause of action. (2) In determining that the bank was
liable for the value of the logs and lumber to the extent of the chattel
mortgage interest of the bank therein. (3) In determining that
the bank was liable for having received a preference contrary to
sections 60a and 60b of the bankrupt act of July 1, 1898, as 'a portion
of its chattel mortgage interest in said logs, the sum of $1,335.62 as
the proceeds of the sale of the portion of said logs known as the "up-
river logs," on which logs said defendant never held any chattel
mortgage, and which logs were never transferred to said defendant.'
(4) In determining that the bank was liable for the value and
moneys it received as a preference, although the trustee had not
elected to avoid such preference by bringing suit to recover the same,
and had not elected to avoid such preference in any manner. (5) And
in holding that, in determining a question of preference, it was im-
material, under the bankrupt act, whether the bank and the other
creditors were of the same class, and in refusing to reverse the
judgment because of the error of the circuit court in charging the
jury that all of the creditors were of the same class. (6) In its
construction of the bankrupt act in the following particulars: (a) In
holding that a transfer made within four months of the bank-
ruptcy proceedings, which enabled a creditor to obtain any portion
of his debt, constituted a preference, (b) "That, although the effect
of the transfer in question did not operate to give the bank a greater
percentage of its debts than other creditors of the same class, such
transfer constituted a preference, (c) In determining, by such rules
of construction of the bankrupt act, that the evidence was sufficient
to establish that the bank had reasonable cause to believe that a
preference was intended. (7) (8) (9) In holding that the bank was
liable for the full value of the preference received in an amount in
excess of what was necessary to pay all the other creditors of the
bankrupt, and claims of fictitious creditors and claims of creditors
who had themselves received preference, and in not limiting the recov-
Oct. 1905.] Jackman v. Eau Claire Nat. Bank. 973
ery to such sum as would be sufficient to pay the claims of creditors
whose claims were provable. (10) (11) In affirming the judgment
against the bank, and not rendering judgment for it.
"A motion is made to dismiss on the ground that the record pre-
sents nothing but questions of fact. It is contended that neither in
the pleadings of the bank nor in any way was any right, privilege,
or immunity under a federal statute specifically set up or claimed in
the state courts. The only questions presented by the pleadings, it is
urged, were, Did the bankrupt give the bank a preference, and did
the bank accept it with reasonable grounds to believe that a prefer-
ence was intended? The supreme court, however, considered the
pleadings to have broader meaning, and answered some of the con-
tentions of the bank by the construction it gave to the bankrupt act.
The case, therefore, comes within the ruling in Nutt v. Knut, 200 U.
8. 13, 26 Sup. Ct. Eep. 216, 50 L. ed. 358. It was there said: 'A party
who insists that a judgment cannot be rendered against him consist-
ently with the statutes of the United States may be fairlyheld, within
the meaning of section 709 (U. S. Comp. Stats. 1901, p. 575), to assert
a right and immunity under such statutes, although the statutes may
not give the party himself a personal or affirmative right that could
be enforced by direct suit against his adversary': See, also. Rector v.
City Deposit Bank Co., 200 U. S. 405, 26 Sup. Ct. Hep. 289, 50 L. ed.
527,
"On the merits of the case we start with the facts established
against the bank, that the property of Young at the time he exe-
cuted the chattel mortgages and when he executed the deed to the
lumber company, at a fair valuation, was insufficient to pay his
debts, and that, by the execution of those instruments, and the
transfer of his property effected thereby, he intended to give the
bank a preference over his other creditors, and that the bank had
reasonable cause to believe that he intended thereby to give it a
preference, and to enable it to obtain a greater percentage of its debt
than any other creditor of Young of the same class. These, then, are
the prominent facts, and seemingly justified the judgment. Against
this result what does the bank urget It urges, first, that there is
included in the judgment the sum of $1,335.62, the net proceeds of
the sale of certain logs, called the 'up-river logs,' which, it is con-
tended, were not covered by either of the mortgages, and that the
supreme court, in its opinion, apparently supposed that those logs
were covered by the mortgages, and erred in giving judgment therefor.
This is a misunderstanding of the opinion. While the court did not
explicitly distinguish between the mortgages and the deed to the
lumber company, we think it is clear that the court regarded the
deed, and what was to be done under it, as the consummation of the
'legal wrong,' to use the language of the court, which went back to
the time of the mortgages. In other words, that the up-river logs
974 American State Reports, Vol. 115. [Wisconsin,
as well as the other property were conveyed to the lumber company
for the purpose of giving a preference to the bank.
"The bank also attempts to urge against this conclusion the differ-
ent views expressed by the trial court and the supreme court upon
the finding of the jury as to the relation in which the lumber company
stood to the bank. The jury found, in answer to questions 4 and 5,
that the lumber company, acting for the bank, took the legal title
for the benefit of the latter under an agreement with Young and the
bank to account to it for a portion of the proceeds. The trial court
said that this was not a finding 'that the lumber company was the
agent of the bank.' The supreme court thought -that the jury 'pretty
clearly decided' that the bank was a principal and the lumber com-
pany 'a mere agent' in the matter. It is true the supreme court
immediately added: 'However, the evidence seems to clearly establish
that the lumber company purchased the property from Young in the
regular course of business, without any understanding with the de-
fendant, other than that its interest in the property as mortgagee and
claimant under numerous statutory labor liens should be recognized,
and the equivalent thereof in money delivered to it out ol luc pro-
ceeds': Jackman v. Eau Claire N. B., 125 Wis. 478, 115 Am. St. Rep.
955, 104 N. W. 102. And this was deemed suflScient to accomplish
the preference which Young intended to give the bank. The court
passed over, as not important, the distinction between the notes given
by the lumber company to Young as the purchase price of the lum-
ber.
"These minor matters out of the way, we come to the more im-
portant contentions of the bank. These contentions are expressed
in the form of questions, the first of which is: 'Can a trustee in bank-
ruptcy, under the provisions of the bankruptcy act, lawfully maintain
a suit to recover the value of a voidable preference without first
electing to avoid such preference by notice to the creditor receiving
such preference, and by demand for its return?'
"It is urged by the bank that it cannot, and to sustain this con-
tention, that a preference is not void but voidable. And voidable
solely at the election of the trustee, who must indicate a purpose to
do so. The argument is that, a preference being voidable, the creditor
receiving it is not in default until he fail to or refuse to surrender it
on demand. Prior to that time his possession is rightful and lawful,
and he is not guilty of any wrong, tort, or conversion. And the
demand, it is further urged, must be made before suit, for it seems
also to be contended that the creditor must be given an opportunity
to exercise the election given him by subdivision g of section 57 of
the bankrupt act to surrender the preference and prove his claim.
We say, 'seems to be contended,' because we are not clear that counsel
for the bank claims that the rights of a creditor under 57g depend
upon the action of the trustee. Counsel say: 'The barikrupt act,
therefore, contemplates that the trustee shall exercise his election aa
Oct. 1905.] Jackman v. Eau Claire Nat. Bank. 975
to whether or not he shall avoid a preference, and it also contem-
plates that the creditor receiving such alleged preference must exer-
cise an election as to what course he shall take. Until the trustee
exercises his election, no cause of action accrues. The creditor is not
called upon to elect what course he shall take until the trustee has
acted. It therefore follows that the trustee should exercise his
election and make his demand before commencing suit.'
"And this, it is argued, is more than a mere question of state prac-
tice, and involves the question whether the property consisting of
the alleged preference is any part of the trust estate. If it be in-
tended by this to assert that the action of the creditor under 57g is
to wait upon or depends upon the action of the trustee under section
60, we do not assent, and nothing can be deduced, therefore, from
the supposed relation of those sections as to the necessity of a demand
before suit. We do not see how such a demand can even be an
element in the consideration of the creditor, whether he will surrender
the preference and prove his debt. The right of surrender exists
as well after suit as before suit: Keppel v. Tiffin Sav. Bank, 197 U. S.
356, 25 Sup. Ct. Rep. 443, 49 L. ed. 790.
"Independently of such considerations, whether the election by a
trustee to avoid a preference should be exercised by a demand before
suit, or can be exercised by the suit itself might be difficult
to determine if it were necessary on the record: 1 Chitty's
Pleading, 176, and cases cited; Shuman v. Fleckenstein, 4 Saw.
174, Fed. Cas. No. 12,826; Brooke v. McCracken, Fed. Cas. No.
1932; Wright v. Skinner, 136 Fed. 694; Goldberg v. Harlan, 33 Ind.
App. 465, 67 N. E. 707. But we do not think it is open to the bank
to urge the first. The bank, it is true, demurred to the complaint
and urged as a ground of demurrer the absence of an allegation
of a demand. But the bank did not stand on the demurrer. It
answered, and not only traversed the allegations of the plaintiflf, but
set up an independent defense, and showed that a demand would
have been un:ivailing, and a demand is not necessary where
it is to be presumed that it would have been unavailing:
Davenport v. Ladd, 38 Minn. 545, 38 N. W. 622; Bogle v. Gordon,
39 Kan. 31, 17 Pac. 857. Besides, it appears that a demand was made
before suit. In determining from what date interest should be given
the trial court said: 'There is evidence of a demand, but I think
only a short time elapsed until action was commenced, so that it will
make little difference whether interest is coniputed from the time
of the demand or the commencement of the action.'
"The trial court instructed the .iury substantially, in the words of
subdivision a of section 60 of the bankrupt act, as to when a debtor
should be deemed to have given a preference, and, in explanation of
the intention of the debtor, said to 'intend to jirelVr woulil be to
make a transfer for the purpose of enabling the bank to obtain a
976 American State Reports, Vol. 115. [Wisconsin,
greater percentage of its debt than any other debtors of the same
class.' And, defining this class of creditors, said further: 'So far
as creditors' rights are involved in this action, they are all of the
same class, by which is meant they would receive the same percentage
of their claims. Claims for taxes or wages within certain times, so
as to be preferred, would be of a different class. But claims of
general creditors, like those approved in the Young bankruptcy pro-
ceedings, are all of the same class. ' The bank excepted, and assigned
as error the charge that all of the creditors were of the same class.
Disposing of the assignment the supreme court said: 'Whether that is
right or wrong does not seem to in any way concern the case. This
action, as we have indicated, is simply one in trover to recover the
value of property which, as is alleged, was, in fraud of the bankrupt
act, wrongfully converted by defendant to its own use. Whether
there was one or more classes of creditors, and in what manner the
property sought to be recovered would, if the suit were successful, be
administered, did not vary in the slightest degree the legal rights of
the plaintiff. If the property was obtained by the defendent in
fraud of the bankrupt act, plaintiff was entitled to recover the same,
and this is the only question involved.'
"The bank contests this view, and contends that, if accepted, 'it
would be impossible to ascertain whether or not the preference had
been received without first determining the question of whether the
enforcement of the transfer would enable the bank to recover a
greater percentage of its debt than other creditors of the same class. '
But there is a question of fact to be considered. It was a question •
of fact what claims were proved against the estate. At the trial the
learned judge who presided described them in his instructions as
claims of general creditors. In his memorandum opinion he said that,
from his minutes and the statements of the evidence in the briefs of
counsel, he was inclined to believe that the point was not well taken
that the evidence did not show that the effect of the enforcement of
the transfer would be to enable the bank to obtain a greater per-
centage of its debt than other creditors of the samie class. The bank,
in its brief in this court, says: 'Certain other claims were filed and
allowed in the bankruptcy proceedings as preferred claims. These
were probably claims for wages after the time of the transfers in
question.' In the list of claims referred to some only are marked
preferred. But, granting that they all were, they were represented
by the trustee.
"The other questions propounded by the bank are based on the
sixth assignment of error. We will not examine the arguments of
counsel for the bank in detail. Their fundamental contention is that
the transfers to the bank were not invalid as a preference if their
enforcement would not operate to give the bank a greater percentage
of its debt than other creditors of the same class would receive.
Jan. 1906.] Hay v. City of Bar.vboo. 977
And such, it is further contended, was not the result, and it is inti-
mated that claims of possible and fictitious creditors were in effect
considered. But this contention encounters the facts found by the
juiy and the trial court. We have already seen what, in the opinion
of the trial court, the evidence established as to the effect of the
transfers, and the jury found that Young was insolvent at the time
they were made, and that the purpose of their execution was to give
the bank a preference and to enable it to obtain a greater percentage
of its debt than other creditors of Young of the same class. These
findings were not disturbed by the supreme court, and we must
accept them as stating the facts established by the evidence, although
counsel seem to invoke an examination by us of the record against
them. Taking them as true, they show a case of preference and
grounds to set it aside. The bank also contends, in effect, that in
such suit the validity of all other claims against the bankrupt can
be litigated, and whether they have received voidable preferences and
have not been required to surrender them. The broad effect of the
contention repels it as unsound. To yield to it would transfer the
administration of a bankrupt's estate from the United States district
court to the state court.
"Judgment affirmed."
HAY V. CITY OF BARABOO.
[127 Wis. 1, 105 N. W. 654.]
DEFECTIVE STREETS— Liability of Lot Owners.— The pol-
icy of the legislature has been so long and firmly eutrene'lied in our
system, to make municipalities liable primarily and directly to
sufferers from the failure to keep the public ways in a reasonably
safe condition for public travel, that nothing short of some unmis-
takable repeal of the statute on the subject can reasonably be deemed
to have been intended to have that effect, (p. 983.)
DEFECTIVE SIDEWALKS— Liability of Lot Owners.— Where
a city charter makes it the duty of lot owners to keep the adjiicent
sidewalks iu repair, and provides that persons injured through any
defect in b sidewalk arising out of the wrong or negligeni-c of any
person other than the city shall exhaust their legal remedies to
enforce the private liability before holding the city liable therefor,
the liability referred to is that which results from active wrongdoing,
and rests upon common-law principles, independently of statutory
enactments, (p. 984.)
DEFECTIVE SIDEWALKS— Liability of Lot Owner.— A city
charter provision making it the duty of the owners or occupants
of premises in front of which sidewalks are lofatod to keep such
walks in repair or pay the expenses incurred by the municipality
in doing so, does not impliedly make sue'li owiuts or ot^eupants liabie
to travelers for injuries occasioned by the walks being out of repair,
(p. 986.)
Am. St. Rep., Vol. 115—62
978 American State Reports, Vol. 115. [Wisconsin,
CITY CHASTER. — The Necessary Effect of Adopting a part of
the general charter by a city existing under a special charter is to
place such city, pro tanto, under the general law as the same may be
from time to time changed, (p. 990.)
STATUTES. — Implied Repeals of Statutes are never favored.
Every rule of construction is to be applied without efficiently har-
monizing provisions seemingly in conflict, before holding that there
is any irreconcilable inconsistency between them. (p. 990.)
DEFECTIVE SIDEWALKS— Giving Notice to City of In-
Jury. — A notice required by statute to be given the city in case of
injury to a person by reason of a want of repair of a sidewalk is a
prerequisite to a right to compensation for the injury, (p. 990.)
DEFECTIVE SIDEWALK — Change in Procedure for Enforcing
Liability. — A charter provision prohibiting the enforcement of a right
of action for a personal injury suffered from a sidewalk being out
of repair, except by presentation of the claim to the city council,
and, in case of adverse action, appeal to the district court, is per-
missible under the rule that an ordinary remedy may be taken away
if a new one is given in place thereof, (p. 991.)
DEFECTIVE SIDEWALK— Giving Notice to City of In-
jury.— A charter provision that no action shall be maintained against
the city to enforce any tortious liability, unless a notice, signed by
the person injured, of the wrong and the circumstances thereof and
the damage claimed, shall be presented to the council within ninety
days after the injury, is a statute of limitations which extinguishes
the right of action upon the expiration of the time specified, (p. 991.)
APPEAL AND EBEOB — Reversal of Judgment. — In case of
a motion for the direction of a verdict at the close of the evidence
being denied and a verdict being rendered for the adverse party,
and its being held upon appeal that the motion should have been
granted, and for reasons necessarily precluding the losing party from
securing any different result by another trial than the one that
would have necessarily followed a correct decision of the motion in
the first instance, this court may cause the litigation to be termin-
ated in the court below without a new trial, to that end remanding
the cause with directions to grant the motion previously denied,
and to render judgment accordingly, (pp. 992, 993.)
John M. Kelley and F. R. Bentley, for the appellant.
Daniel M. Grady, for the respondent.
■* MARSHALL, J. Action to recover compensation for
personal injuries alleged to have been sustained by reason of
an insufficient sidewalk in the defendant city.
Omitting formal matters, the circumstances relied upon
for a cause of action, as alleged, were these : October 22,
1902, about 7 o'clock P. M., plaintiff, while traveling along
the sidewalk on the westerly side of Grove street in the de-
fendant city, in the exercise of ordinary care, at a point spe-
cifically mentioned, fell and was greatly injured by reason
of the insufficiency and want of repair of such walk. The
Jan. 1906.] Hay v. City of B-vraboo. 979
insiiflSciency of the walk consisted of a hole therein produced
by the removal of one of the decking-boards about eight
inches wide and four feet long. Without fault on her part,
plaintiff stepped into such hole and was there^by thrown
down and her right leg between the knee and ankle injured,
her body and her right arm bruised, and she was otherwise
severely injured, to her damage in the sum of five thousand
dollars. The defendant, through its officers having charge of
such matters, knew of such defective condition for several
months prior to the injury. October 31, 1902, plaintiff caused
written notice of the injury to be personally served on the
mayor and clerk of the city, stating the time and place of the
injury, the ^ insufficiency and want of repair causing the
same, and that she claimed satisfaction for her injury. Jan-
uary 28, 1903, plaintiff caused a written notice of her claim
to be served personally on the mayor and clerk of the defend-
ant, and to be filed with the city clerk, stating the time and
place of the injury and describing the insufficiency which
caused it, and the amount of damages sustained. March 26,
1903, her claim was duly rejected by the city, and two days
thereafter notice of such rejection was served upon plaintiff.
April 14th thereafter plaintiff duly appealed to the circuit
court from such disallowance, giving notice and filing a bond
as required by law in such cases. The damages claimed were
for five thousand dollars.
The defendant answered, putting in issue the allegations to
the effect that section 1339 of the Statutes of 1898, respeating
the service of written notice of the injury was complied with,
and alleging as follows: No statement in writing was pre-
sented to the common council in accordance with section 26,
subchapter 12, chapter 21 of the Laws of 1882 ; sections 6-8,
subchapter 5, chapter 21 of the Laws of 1882, regulating the
subject of disallowance of such claims by the defendant, and
appeals therefrom, were not complied with, particuhirly in
that the bond therein required was not given ; the time for
presenting the alleged claim under section 26 aforesaid ex-
pired January 20, 1903. Plaintiff having failed to comply
with the requirements of defendant's charter referred to,
no claim on the i)art of the plaintiff was ever perfected
against the city for the alleged injury. Sections 28, 29,
subchapter 12, of the aforesaid law imposed upon the owner
or occupant of property abutting on a street the duty of keep-
980 American State Reports, Vol. 115. [Wisconsin,
I'ng the sidewalk in repair. The premises in front of which
the injury is allej2:ed to have occurred were occupied by a
tenant of the owner. It was his duty to keep the sidewalk in
a safe condition. The remedies against him and his land-
lord have not been exhausted. The alleged injuries were
caused by plaintiff's want of ordinary care. She knew of
the condition * of the walk, but proceeded thereon regardless
of the existence of the defects therein.
At the commencement of the trial there was a demurrer to
the complaint ore tenus, based on the theory that whereas the
city adopted sections 925 — 58 to 925 — 60, of the Statutes of
1898, a part of the general city charter law, the effect thereof
was to substitute the adopted portion of the general charter
in place of section 8, subchapter 12 of the city charter still in
force, and that such provision governed the subject of enforc-
ing such a claim against the city; that the charter was
amended by the adoption of the general charter provision, as
aforesaid, in March, 1898, before the statutes of 1898 went
into effect.
At the close of plaintiff's case there was a motion made for
the direction of a verdict, which was denied. At the close
of all the evidence there was a motion made for a verdict in
favor of the defendant, which was denied. The cause was
submitted to the jury upon the evidence under instructions,
resulting in a verdict in plaintiff's favor for five hundred
dollars. Proper motions were made and exceptions taken to
preserve for review questions treated in the opinion. Judg-
ment was rendered in plaintiff's favor upon the verdict, and
defendant appealed.
Appellant's charter at section 29, subchapter 12, chapter
21, of the laws of 1882, provides that "the duty of always
keeping the sidewalks .... on or adjacent to the lots and
premises of any person, in safe condition and good repair, is
hereby expressly enjoined and imposed upon all owners or
occupants of said lots and premises," and the preceding sec-
tion provides that "in case of injury or damage by reason of
'' insufficient, defective or dangerous condition of [a] ....
sidewalk .... produced or caused by the wrong, neglect of
duty, default or negligence of any person or corporation, such
person or corporation shall be primarily liable for all dam-
ages for such injury, in suit for the recovery thereof by the
person sustaining such damages, and the city shall not be lia-
Jan. 1906.] Hay v. City of Baraboo. 981
ble therefor until all legal remedies shall have been exhausted
to collect such damages from such person or corporation."
The evidence tended to show that the injury complained of
was caused by the defective condition of a sidewalk in front
of occupied premises, and that no effort was made by re-
spondent prior to the commencement of this action, or at any
time, to recover her damages of such occupant or the owner
of such premises. The complaint, as indicated by the state-
ment, was barren of all allegations in respect to liability of
such owner or occupant.
Counsel for appellant insist that under the circumstances
stated the trial court should have sustained the demurrer to
evidence, and, failing in that, should have granted the motion
for a verdict at the close of respondent's evidence in chief,
and failing in that should have granted the motion for a ver-
dict at the close of all the evidence. That is grounded on
Amos V. Fond du Lac, 46 Wis. 695, 1 N. W. 346 ; Hiner v.
Fond du Lac, 71 Wis. 74, 36 N. W. 632 ; Henker v. Fond du
Lac, 71 Wis. 616, 31 N. W. 187; Devine v. Fond du Lac. 113
Wis. 61, 88 N. W. 913; Gordon v. Sullivan, 116 Wis. 543,
93 N. W. 457, On the other hand, counsel for respondent
argue that the provisions of the charter referred to are
entirely unlike those in the charter of the city of Fond du
Lac; that they are in all essential particulars like those in
the charter of the city of Green Bay, and in that of the city
of Janesville, which have been held to permit of enforcing
the city liability in a case like this without reference to any
liability of the owner or occupant of the premises in front of
which the injury occurred: Toutloff v. Green Bay, 91 Wis.
« 490, 65 N. W. 168 ; Selleck v. Tallman, 93 Wis. 246, 67 N.
W. 36.
In the Green Bay charter the only provisions bearing on
the subject here were : First, one giving the city full author-
ity to control and repair the sidewalks: Laws 1882, c. 169,
subc. 4, subd. 40, sec. 3, Second, one whereby the expense
of keeping sidewalks in repair was made chargeable to abut-
ting lots, and the duty of keeping the sidewalks in a safe con-
dition and good repair was enjoined upon the owners or
occupants of lots: Sec. 5, subc. 6. Third, one making it the
duty of the street superintendent to inspect the walks from
time to time as needed, and properly repair all defects not
requiring an outlay exceeding five dollars in any one instance,
982 American State Reports, Vol. 115, [Wisconsin,
and in other circumstances to make the repairs in case of
the owner of the lot neglecting to make them within twenty-
four hours after being notified so to do, the expense in any
case being chargeable against the lot: Sec. 7, subc. 6. The
court reached the conclusion that the liability of the lot
owner was to the city only, and merely to repair the walk
when ordered to do so or to pay the expenses thereof. There
was no expression in the charter anywhere, in terms or in
effect, that he should be liable primarily or otherwise directly
to a traveler injured by a want of repair of the walk.
In the Janesville charter considered in Selleck v. Tallman,
93 Wis. 246, 67 N. W. 36, there were provisions, in effect, as
it was said, the same as in the Green Bay charter. The city
was given absolute control over the streets, with power to
improve the same for public use, but as to the making of
sidewalks only at the expense of the owners of abutting
lots : Laws 1882, c. 221, sec. 1, subc. 7, subd. 4, sec. 23. The
duty, in case of the construction of a sidewalk, of making it
reasonably safe and suitable for public travel and keeping it
in such condition was imposed on the city by section 1339
of the Statutes of 1898, unaffected by charter provision,
since there was nothing therein creating such duty nor any
inconsistent with the general * law: Kittridge v. Milwaukee,
26 Wis. 46 ; Harper v. Milwaukee, 30 Wis. 365 ; Ripon v. Bit-
tel, 30 Wis. 614; Hincks v. Milwaukee, 46 Wis. 559, 32 Am.
Rep. 735, 1 N. W. 230; Huston v. Fort Atkinson, 56 Wis.
350, 14 N. W. 444. Those cases show clearly that it has not,
since the inception of our system of statutory liability of
municipalities for reasonably safe condition for public use
of streets and sidewalks been supposed to be necessary to [
search a city charter in any case to discover whether such
liability was imposed thereby or not. Charter provisions
in respect to the matter have been examined only to discover
whether the general law on the subject in any particular was
modified or repealed.
On the subject of liability of lot owners for damages as
regards sidewalks, section 19, subchapter 12, chapter 221,
aforesaid provided, if not repealed, as follows: "Whenever
any injury shall happen to persons or property in said city
by reason of any defect in any street, sidewalk, alley or public
ground, or from any other cause for which the said city would
be liable, and such defect or other cause of such injury shall
Jan. 1908.] Hay v. City of Baeaboo. 983
arise from or be produced by the wrong, default or negli-
gence of any person or corporation other than said city, such
person or corporation, so guilty of such wrong, default or
negligence, shall be primarily liable for all damages for such
injury, and the said city shall not be liable therefor until
after all legal remedies shall have been exhausted to collect
such damages from such person or corporation."
By section 3, chapter 102 of the laws of 1889, amending
subdivision 4, section 23, aforesaid, there was imposed on
lot owners the duty of repairing sidewalks in front of their
premises more specifically than before, this language being
used: "It shall be the duty of the owner or owners of each
lot or parcel of land abutting -upon any street within the city
to ... . keep in repair, at his or their own expense, a
standard sidewalk in front of said lot or parcel of land,
and if no standard sidewalk shall have been fixed for said
street, or that part thereof, *** where the land of such owner
or owners is situated, then such a good and sufficient side-
walk as shall be approved by the street commissioner. When-
ever the owner or owners of any lot or parcel of land abut-
ting upon any street shall fail or neglect to ... . keep such
sidewalk in good and proper repair," the same may be done
by the city at his expense, the manner of doing the same and
enforcing the liability for such expense being particularly
pointed out. Taking all of the provisions of the charter to-
gether, it was said in Selleck v. Tallman, 93 Wis. 246, 67 N.
W. 36, that they left the city absolutely' liable under the gen-
eral statute for reasonable safety of its sidewalks, and made
lot owners absolutely liable to the city to execute its duty to
repair such walks, or reimburse it for the expenses thereof.
As reasoned in Toutloff v. Green Bay, 91 Wis. 490, 65 N. W.
168, it was held that the policy of the legislature had been
so long and firmly entrenched in our system to make munic-
ipalities liable primarily and directly to sufferers from the
failure to keep the public ways in a reasonably .safe condi-
tion for public travel that nothing short of some unmistak-
able repeal of the statute on the subject could reasonably be
deemed to have been intended for that effect.
Taking the amended provisions of the law of 1889 with
section 19, subchapter 12, of the Janesville charter, which
we have quoted, by them.solves, they .seemed to exempt the
city from any primary liability for injuries caused by de-
984 American State Reports, Vol. 115. [Wisconsin,
fective sidewalks, but when to reach that conclusion it was
necessary to hold that section 1339 of the statutes of 1898,
was repealed, as regards giving injured persons any direct
remedy against the city, the rule came into operation that
statutes should not be deemed to have been repealed by im-
plication, if by any reasonable construction that result is
avoidable : Mason v. Ashland, 98 Wis. 540, 74 N. W. 357.
The fact that section 19, subchapter 12, of the Janesville
charter aforesaid existed before there was any provision there-
of imposing a duty on lot owners to repair sidewalks, and
that it ^* was not associated in the amended charter with
the provisions in relation to the repair of streets and side-
wallcs, the latter being in subchapter 7 relating to streets and
highways, and the former in subchapter 12 relating to mis-
cellaneous provisions, rather repelled the idea that the gen-
eral law on the subject of statutory municipal liability was
intended to be to any extent superseded. Such idea was
further repelled by the settled policy of protecting travelers
from the consequences of defective public ways by the re-
sponsibility of the public corporation controlling the same,
and that to give in addition the liability of abutting lot
owners and compel that to be exhausted before resorting to
municipal liability, instead of giving additional protection
to the traveling public, impaired the protection theretofore
existing : Toutlotf v. Green Bay, 91 Wis. 490, 65 N. W. 168.
Such idea was further repelled by the fact that, while the
duty of lot owners to repair sidewalks was of no substantial
benefit to the public over that secured to them under the gen-
eral statutes, it was of great benefit to the municipality, in
that all the expense of making the repairs was entirely shifted
from it to the lot owner. Looking at the words of section
19, subchapter 12 — which are precisely the same as section
28, subchapter 12, of appellant's charter, making the liabil-
ity as between the injured person and the owner of the lot
abutting on the street where the injury occurred primary,
"whenever any injury shall happen .... by reason of any
defect .... for which the city would be liable, and such
defect or other cause of such injury shall arise from or be
produced by the wrong, default or negligence of any per-
son or corporation other than said city, such person or cor-
poration .... shall be primarily liable" — it seemed rea-
sonable in deciding the Selleck case (93 Wis. 246, 67 N. W.
36), to conclude that they referred not to statutory liability,
Jan. 1906.] Hay v. City of Bababoo. 985
but to liability for the results of active wrongdoing, such as
would render the municipality liable independently of the
statute — those liabilities which rest upon a city the same as on
an individual upon ** common-law principles : such as are re-
ferred to in Hincks v. Milwaukee, 46 Wis. 559, 1 N. W. 230 ;
Hughes V. Fond du Lac, 73 Wis. 380, 41 N. W. 407, and simi-
lar case^. In that the court followed numerous decisions
where the same or similar language was construed.
In the first case cited the language under consideration was
this: "Whenever any injury shall happen to persons or prop-
erty in the said city of Milwaukee, by reason of any defect
or encumbrance on any .... sidewalk .... or from any
other cause for which the said city would be liable, and such
defect, .... or other cause of such injury shall arise from
or be produced by the wrong, default or negligence of any
person or corporation, such person or corporation so guilty of
such wrong, default or negligence shall be primarily liable
for all damages for such injury; and the city shall not be
liable therefor until after all legal remedies shall have been
exhausted to collect such damages from such person or cor-
poration. ' '
That language in the Milwaukee charter is probably the
parent of the similar provision in appellant's and in many
other charters in this state. It was incorporated into the
charter of the city of Sheboygan, and thus construed in Ray-
mond V. Sheboygan, 70 Wis. 318, 35 N. W. 540: "The very
obvious intent and meaning of this provision is to require
the injured party first to exhaust all legal remedies to col-
lect his damages from the wrongdoer or person causing the
defect .... before the liability of the city shall be enforced.
.... It was intended to relieve 'the city, as far as possible
with justice to the injured party, from liability for injuries
occasioned by obstructions unlawfully placed in its streets by
persons for whose acts it was not directly responsible, and
that whenever the person injured can, by use of the remedies
furnished him by the law, recover his damages of the party
primarily in fault, therefore primarily liable,' he must do so
before resorting to his remedy against the city."
Much confusion exists in failing to differentiate between
those circumstances where the liability of the city was wholly
*^ statutory and the only one to be resorted to, and the cir-
cumstances where the city was liaiile by statute and upon
common-law principles as well, or upon the latter only, and
986 American State Reports, Vol. 115. [Wisconsin,
there was also liability upon common-law principles of a
private person, giving the injured party, in the absence of
any statutory regulation, an absolute choice of remedies or
the right to enforce both liabilities in one action. As to the
latter such charter provisions as those we have under con-
sideration do not create a right or give a remedy for its en-
forcement. They merely regulate the same, providing that
the one primarily to bkme shall be primarily called to ac-
count.
The method of approach adopted when this question was
first presented here for adjudication was to claim that since
the city charter imposed upon lot owners the duty to repair,
the principle should apply that where the law imposes a spe-
cific duty upon one person for the benefit of another an ac-
tion will lie in favor of that other against that one, in case of
there being damage by failure of such person in the per-
formance of such duty. But the premises upon which the rule
was invoked were found wanting, in that the duty to repair
was not imposed on the lot owner for the benefit of travelers,
but in the aid of the execution by the city of its duty created
by general law or its charter, or both.
Turning to the cases upon which counsel for appellant rely,
we can readily see why the construction adopted as to char-
ter provisions, such as those in question, could not apply to
the charter of the city of Fond du Lac. In the latter the leg-
islature in unmistakable language not only imposed upon lot
owners the duty to repair sidewalks in front of their premises
for the benefit of travelers, but ex industria construed its
enactment. Reading the language of sections 1, 2, subchap-
ter 18, chapter 152 of the laws of 1883 — the Fond du Lac
charter — together we have this, in case of injury or damage
happening to an.yone by reason of insufficiency of a side-
walk : "Every owner of any lot, part of lot, or parcel of land,
in said city .... in front of, or adjoining, which there shall
*^ have been or shall hereafter be placed .... any walk,
or sidewalk, .... shall at all times keep and maintain said
walk or sidewalk, .... in a safe, convenient and effective
condition, for the use of any person or persons desirous to
walk thereon; and any person who may have been or shall
hereafter be injured by reason of the unsafe or defective
condition of such walk, or sidewalk, shall have the right to
maintain an action .... against such owner .... for all
damages or injury of every nature, resulting to such per-
Jan. 1906.] Hay v. City of Baraboo. 987
son .... by reason of the neglect of such owner It
is hereby declared to be the true meaning and intent of this
act, .... that the said city of Fond du Lac shall not, in
any case, be liable to any person or persons, for damages re-
sulting from the defective, unsafe or dangerous condition of
any walk or sidewalk, .... and the only cause of action to
which the said city of Fond du Lac shall be liable, or which
shall be maintained in any court against said city, in connec-
tion with, or relation to damages resulting from failure to
keep the walks or sidewalks in said city, in a safe, .... con-
dition, shall be by reason of the failure of any person or per-
sons to collect a judgment recovered against such owner, or
owners, .... for any such damages, resulting from such in-
juries, as hereinbefore stated."
Thus it will be seen that the legislature unmistakably cre-
ated a private liability where one did not previously exist,
and made it the sole resort of the injured party, until such
time as it should be established that, without liability of the
city also, he would be remediless. The charter gave him an
absolutely new right and provided for its enforcement, special
care being taken to indicate that the purpose of the enact-
ment was to displace the general law on the subject of munic-
ipal liability, so far as inconsistent therewith.
The foregoing analysis would seem to demonstrate that
there is no similarity whatever between appellant's charter
and the charter of the city of Fond du Lac ; and that the for-
mer is in all essential particulars similar to the charter of
the city of Janesville, as it existed at the time of the deci-
sion in Selleck v. Tallman, 93 Wis. 246, 67 N. W. 36. It fol-
lows that, subject to the provisions of law requisite to per-
fect, and the provisions for the ^'^ enforcement of it, the lia-
bility in this case was primarily and exclusively against the
city.
It is a verity in the case that appellant adopted parts of
the general charter law, as stated in the answer, prior to the
happening of the injury. Before such adoption the charter
system for the enforcement of all liabilities of the city of a
contractual nature, with some slight exceptions was embodied
in sections 5-8, subchapter 5. chapter 21 of the laws of 1882.
They provided : First, for the allowance by the conmion coun-
cil of such a claim only upon its presentation to such council
properly itemized and verified by the owner or some person
in his behalf. Second, in ca.se of disallowance of the claim,
988 American State Reports, Vol. 115. [Wisconsin,
for further prosecution of the matter only by appeal to the
circuit court from such disallowance. Third, for the entry
of the appeal, upon the papers being duly transmitted to
the clerk of the circuit court, and trial of the matter as in
ease of an action appealed from justice court. Fourth, that
action on any claim against the city, with certain exceptions
not referring to such liabilities as the one involved here, other
than as indicated, was prohibited ; and the determination of
the council was made conclusive and a perpetual bar to any
proceedings to recover thereon, in the absence of an appeal
being taken within the time and in the manner pointed out,
save only a remedy by action commenced in the ordinary
way was preserved in case of a refusal by the council to act
in the matter upon the claim being properly presented there-
for. The ordinary method of enforcing liabilities of a tor-
tious character was left unaffected by the charter, but the
right to the ordinary remedy was limited by section 26, sub-
chapter 12, of the charter in these words: **No action in tort
shall lie or be maintained against the city of Baraboo, unless
a statement in writing, signed by the person injured or claim-
ing to be injured, of the wrong and circumstances thereof,
and amount of damages claimed, shall be presented to the
common council within ninety days after the occurring or
happening of the tort alleged."
^^ The allegations of the complaint as to nonperformance
of the condition mentioned were established by the evidence.
Counsel for appellant insisted upon the trial, and still insists,
that such nonperformance extinguished whatever right re-
spondent had against the city, the same as the operation of
any full limitation period set by law for the enforcement of
any right by a judicial remedy extinguishes such right. Re-
spondent's counsel contends that said section 26 was repealed
by the adoption of the general charter system for the enforce-
ment of municipal liabilities. If the former are right; a
verdict of no cause of action should have been directed in
appellant's favor.
It is not claimed that there was any repeal of the limita-
tion clause of the special charter other than by implication.
The adoption proceedings expressly made those parts of the
general charter law relating to the enforcement of municipal
liabilities as they existed in March, 1898, a part of the spe-
cial charter, in lieu of the system therein for the enforcement
of all claims of a contractual nature: Sees. 6-8, subchapter 5,
Jan. 1906.] Hay v. City of Baraboo. 989
before referred to. The general charter system was then em-
bodied in section 58, chapter 326 of the laws of 1889, as
amended by section 27, chapter 312 of the laws of 1893, and
sections 59 and 60 of said chapter 326. In its entirety it
provided as the only means for enforcing any claim or de-
mand of any kind or character against a city, presentation
thereof to the common council for allowance, and in case of
adverse action, or failure to pass upon the matter at all within
sixty days after such presentation, an appeal to the cir-
cuit court within the time and in the manner specified. Ex-
press or constructive disallowance of the claim, and failure
to invoke efficiently such appeal remedy, rendered such disal-
lowance final and conclusive and a bar to any action in any
court in respect thereto.
It is suggested that those parts of the general charter law,
adopted as stated, were changed by the revision of 1898, and
that section 58 of the general charter was subsequently
changed ^"^ by chapter 127 of the laws of 1899. We do not
deem it necessary to discuss that matter. The parts adopted
were at the time of adoption to the effect we have indicated.
Notwithstanding any changes which subsequently occurred,
they were the same in every essential particular at the time
of the occurrence complained of as when adopted. They are
included in sections 925 — 58 to 925 — 60 of the statutes of 1 898,
as amended by chapter 127 of the laws of 1899. That the
change in the special charter entirely superseded that part
thereof contained in said sections 6-8, subchapter 5, as to
the enforcement of claims of a contractual character, and
also the ordinary remedy for the enforcement of actions of a
tortious character, there can be no reasonable doubt: Sheel
V. Appleton, 49 Wis. 125, 5 N. W. 27; Mason v. Ashland, 98
Wis. 540, 65 N. W. 168; Watson v. Appleton, 62 Wis. 267,
22 N. W. 475 ; Koch v. Ashland, 83 Wis. 361, 53 N. W. 674 ;
Telford V. Ashland, 100 Wis. 238, 75 N. W. 1006; Gutta
Pereha & R. Mfg. Co. v. Ashland, 100 Wis. 232, 75 N. W.
1007; Seegar v. Ashland, 101 Wis. 515, 77 N. W. 880; Morgan
V. Rhinelander, 105 WLs. 138, 81 N. W. 132. The language
of section 58 of the general charter, as it stood at the time of
the happening of the injury, was substantially the same as
that considered in the cited cases, and required every claim
or demand of ever>' character whatsoever to be enforced, if
at all, by presentation thoreof to the eoniinon council for
allowance. The effect of the adoption of such section as an
990 American State Reports, Vol. 115. [Wisconsin,
amendment to the special charter was to make all subsequent
changes in such section modifications of the special charter
accordingly. The necessary effect of adopting a part of the
general charter by a city existing under a special charter
is to place such city pro tanto under the general law as the
same may be from time to time changed. That precise point
has not heretofore been decided, but the same seems to be
too clear for reasonable controversy.
We are unable to discover in the argument of counsel for
respondent, or otherwise, any efficient answer to the conten-
tion *® of counsel for appellant that the limitation clause
of appellant's charter, as to the prosecution of actions of
this sort, as it existed prior to the adoption of the general
charter provisions, was not changed thereby.
As before suggested, there was no express repeal, except
of sections 6-8, subchapter 5, before referred to. Implied
repeals are never favored. Every rule of construction is to
be applied without efficiently harmonizing provisions seem-
ingly in conflict, before holding that there is any irreconcil-
able inconsistency between them: Mason v. Ashland, 98 Wis.
540, 65 N. W. 168. It does not seem that we need to go
that far in this case because there is no apparent conflict to
be dealt with, as we read the charter provisions. Section 26,
subchapter 12, of appellant's charter relates wholly to a sub-
ject entirely foreign to sections 58-60 of the general charter
law, as they existed at the time of the injury in question.
The former is a limitation upon the use of judicial remedies
for the enforcement of a right — a statute of limitations pure
and simple. The latter is a substitute for the ordinary
method of invoking judicial remedies for the enforcement of
rights. The ordinary remedy is taken away and a new one
is given in place thereof, which is permissible. It is no more
inconsistent with the limitation feature than with section
1339 of the statutes of 1898, as regards the existence of a
right of the sort here involved. The three together make
this complete system. The right to hold the city liable upon
its statutory obligation to keep its sidewalks reasonably safe
for public travel, in case of an injury to person or property
by a breach of such obligation, is conditioned upon compli-
ance with said section 1339, as regards, within fifteen days
after the happening of the event causing the injury, giving
notice in writing signed by the party, his agent or attorney,
to the mayor or city clerk, stating the place where the dam-
Jan. 1906.] Hay v. City of B.vkaboo. 991
ages occurred and describing generally the insufficiency, or
want of repair, which occasioned it, and that satisfaction
therefor is claimed of the city. The remedy for vindicating
the right, when it shall ^® have been established in the man-
ner aforesaid, is governed by the general charter provisions
adopted as before indicated. The condition of the right to
use such remedy is in section 26, subchapter 12 of the charter
prohibiting the same, "unless a statement in writing, signed
by the person injured or claiming to be injured, of the wrong
and circumstances thereof, and amount of damages claimed,
shall be presented to the common council within ninety days
after the occurring or happening of the tort alleged." As
respondent failed to comply with that condition her right
to damages, though perfected by complying with section 1339
of the statutes of 1898, ceased to exist before she commenced
her action, so to speak, in the only way open to her in any
event, by presenting her claim to the common council for
allowance under section 58 of the general law. There is no
manner of escape from this. One law is a condition of the
existence of a right, another gives a new remedy for the
enforcement of the right in place of the old one, and another
operates upon the remedy and may extinguish it. That said
section 26 was intended as a limitation upon the right to a
remedy is very clear. That it must be given the same force
as is accorded to other limitation acts, so far as it goes, is
just as clear. Any law creating a condition of the enforce-
ment of a right to be performed within a fixed time is a stat-
ute of limitations with all that the term signifies. That is
elementary. It has been applied in many cases, notably in
Relyea v. Tomahawk P. & P. Co., 102 Wis. 301, 72 Am. St.
Rep. 878, 78 N. W. 412.
It follows that the motion for a direction of a verdict in de-
fendant's favor at the close of the evidence should have been
granted. Further proceedings, under the circum.stances, in
the court below, other than such as may be necessary for the
dismissal of the action, with costs in favor of the defendant,
would be useless. As stated in Muench v. Ileinemann, 119
Wis. 441, 96 N. W. 800, in the language of Mr. Justice Wins-
low, "the substance of the requirement" as to proceedings in
the trial court for judgment for one party, when taking the
*** verdict at its face the judgment should and does go the
other way, to entitle such party upon prevailing on appeal
to a direction from this to the lower court to render judg-
992 American State Reports, Vol. 115. [Wisconsin,
ment in his favor, "is that the appellant shall move for judg-
ment after the verdict is in, so that the trial court may have
an opportunity to pass on the question." The real philoso-
phy of that, it seems, is that when one obtains judgment in
the trial court, though upon the pleadings and the evidence
the right of the matter is conclusively with his adversary,
such court must be so challenged in respect thereto by the
latter to at least afford it ample opportunity to considerately
pass upon the matter in order to enable the one aggrieved
to obtain a direction for judgment upon his successfully ap-
pealing to this court. No reason is perceived why that is
not as fully satisfied when a motion is made in the trial court
for a verdict upon the pleadings and evidence, as where one
is made thereon for a judgment regardless of the verdict.
In practical effect, the point the court is called upon to de-
cide in one case is the same as in the other. The opportun-
ity to decide the matter considerately is the same whether
the motion is made before or after verdict.
IMuench v. Heinemann, 119 Wis. 441, 96 N. W. 800, re-
sponding to the spirit of the code, and it is believed its letter
as well, distinctly repudiated the old practice that only the
plaintiff can successfully invoke the trial court for judgment
notwithstanding the verdict. It changed the practice there-
tofore somewhat intrenched here, rendering necessary a mo-
tion in such court for such changes in a verdict rendered con-
trary to facts conclusively established, necessary to make it
harmonize with such facts, and on its face support a judg-
ment, in order to warrant this court, upon the party aggrieved
by a judgment upon the erroneous verdict prevailing upon
appeal, in directing the entry of sych a judgment as will end
the litigation. It held that a motion after verdict was suffi-
cient to enable the court to pass upon the matter, which sat-
isfied all reasonable requirements, leaving the erroneous ver-
dict, or any verdict, as without ^* necessary significance. It
brushed away, so tp speak, all mere forms, whether of the
ancient or modern practice, because the basic reasons there-
for are only to be found, as was said, "in fine-spun distinc-
tions, more fanciful than convincing," and anchored firmly
to the substance of things rather than to mere shadows and
useless forms. It would seem that the advanced position so
taken logically warrants us in holding, if it does not require
us to do so. that upon a recovery here, the prevailing party
having in the court below made a motion for the disposition
I, an. 1903.] Hay v. City of B^vraboo. 993
of the cause in his favor by the direction of a verdict, thus
affording such court full opportunity to pass upon the very
matter presented here, the cause may be remanded for the
judgment which would necessarily have resulted from the
granting of such motion, when it conclusively appears that
in no event could a new trial otherwise result. That would
be strictly within the letter of section 3071 of the statutes
of 1898, providing that upon a reversal here a cause may
be remanded for a new trial "if proper and necessary,"
and strictly in harmony with the fact that our system is gov-
erned by the code, and the practice not inconsistent there-
with, which this court, under its inherent and statutory power,
sees fit to establish.
By the COURT, The judgment is reversed, and the cause
remanded, with directions to enter judgment dismissing the
action, with costs in favor of defendant.
A motion for a rehearing was denied January 30, 1906.
LIABILITY OF PROPERTY OWNERS TO PERSONS INJURED BY
NONREPAIR or STREETS.
I. At the Common Law.
a. The General Rule. 993.
b. In Case Owner Himself Causes Defect, 994.
n. Under Legislative Ei:actments.
a. Constitutionality of Statutes, 994.
1). Interpretation and Effect of Statutes, 995.
c. Necessity of Notifying Owner to Make Repairs, 996,
L- At the Common Law.
a. The General Rule. — The common law casts no duty upon the
owner of property abutting upon a public street to maintain the street
or sidewalk in a good state of repair. In the absence of any legisla-
tive enactment he is not liable for an injury due to a defect in the street
or sidewalk in front of his premises unless he himself has caused the
defect: Eustace v. Jahns, 38 Cal. 3; Martinovich v. Wooley, 128 Cal.
141, 60 Pac. 760; Lynch v. Hubbard, 101 Mich. 43, 59 N. W. 443; Baus-
tian V. Young, 152 Mo. 317, 75 Am. St. Rep. 462, 53 S. W. 921; Beck v.
Ferd Heim B. Co., 167 Mo. 195, 66 S. W. 928; City of Rochester v.
Campbell, 123 N. Y, 405, 20 Am. St. Rep. 760, 25 N. E. 937, 10 L. R. A.
393; Village of Fulton v. Tucker, 3 Hun, 529; Krtbs v. Heitman, 104
App. Div. 173, 93 N. Y. Supp. 542; Sneeson v. Kupfor, 21 B. I. 560,
45 Atl. 579; note to Browning v. City of Springfield, 63 Am. Dec.
355. To quote from the recent case of Mullios v. Si»gel-Cooper Co.,
183 N. Y. 129, 75 N. E. 1112: "The principles of law applicable to
the obligation of abutting owners on city streets to keep the side-
walk in a safe condition for poiIcHtrians are well settled. The abut*
Am. St. Rep., Vol. 115—63
994 American State Reports, Vol. 115. [Wisconsin,
ting owner is not bound to keep the sidewalk in repair, unless by
virtue of the requirements of the statute, and is not responsible to
travelers for defects therein not caused by himself."
b. In Case Owner Himself Causes Defect. — The immnnity of a
lot owner from liability from defects in streets does not extend to
those cases where the defects are occasioned by his own acts. If he
creates a defective or dangerous condition in the street or sidewalk,
perhaps in his use thereof to his individual advantage or in the
enjoyment of his adjoining property, his conduct becomes unlawful
on common-law principles, and he is answerable for injuries occa-
sioned to third persons: Davis v. Eich, 180 Mass. 235, 62 N. E. 375;
Canfield v. Chicago etc. Ry. Co., 78 Mich. 356, 44 N. W. 385; Land-
rue V. Loud, 38 Minn. 538, 38 N. W. 699; Mayor etc. of New York
V. Dimick, 20 Abb. N. C. 15, affirmed in 49 Hun, 241, 2 N. Y. Supp.
46; Mullins v. Seigel-Cooper Co., 95 App. Div. 234, 88 N. Y. Supp.
737; Tremblay v. Harmony Mills, 171 N. Y. 598, 64 N. E. 501; Brown
V. White, 202 Pa. 297, 51 Atl. 962, 58 L. R. A. 321; City of San
Antonio v. Talerico, 98 Tex. 151, 81 S. W. 518.
Thus, a property owner who maintains a trapdoor, manhole, coal-
hole, or other opening in the sidewalk, must see that the same is
kept in a condition which will not imperil the lives or limbs of
pedestrians. If he fails to do so, he is answerable for the conse-
quences: Barry v. Terkildsen, 72 Cal. 254, 1 Am. St. Rep. 55, 13 Pac.
357; Calder v. Smalley, 66 Iowa, 219, 55 Am. Rep. 270, 23 N. W.
638; McDonald v. Logi, 143 111. 487, 32 N. E. 423; Stevenson v. Joy,
152 Mass. 45, 25 N. E. 78; City of Wabasha v, Southworth, 54 Minn.
79, 55 N. W. 818; Ray v. Jones & Adams Co., 92 Minn. 101, 99 N.
W. 782; Benjamin v. Metropolitan St. Ry. Co., 133 Mo. 274, 34 S. W.
590; Perrigo v. St. Louis, 185 Mo. 274, 84 .S. W. 30; O'Malley v.
Gerth, 67 N. J. L. 610, 52 Atl. 563; Matthews v. De Grof, 13 App.
Div. 356, 43 N. Y. Supp. 237; Berger v. Content, 47 Misc. Rep. 390,
94 N. Y. Supp. 12; Dickson v. HoUister, 123 Pa. 421, 10 Am. St. Rep.
533, 16 Atl. 484.
And if he makes an excavation in the street or sidewalk, and neg-
lects to restore the way to a safe condition, or leaves it without
guards or barriers, he must respond in damages to one who suffers
injuries therefrom: Covington etc. Mfg. Co. v. Drexilius, 27 Ky. Law
Rep. 903, 87 S. W. 266; Stuart v. Havens, 17 Neb. 211, 22 N. W.
419; Smith v. Ryan, 130 N. Y. 653, 29 N. E. 1033; City of Dayton
V. Taylor's Admr., 62 Ohio St. 11, 56 N. E. 480; Homan v. Stanley,
66 Pa. 464, 5 Am. Rep. 389; Borchers v. Galvin (Tex. Civ. App.),
37 S. W. 178.
II. Under Legislative Enactments.
a. Constitutionality of Statutes. — It is competent for the legis-
lature to impose upon adjacent lot owners the duty of keeping the
Jan. 1906.] Hay v. City of Bakaboo. 995
sidewalks in front of their property in repair, and to make them
liable for injuries occasioned by reason of the defective condition
of such sidewalks: City of Lincoln v. Janesch, 63 Neb. 707, 93 Am.
St. Eep. 478, 89 N. W. 280, '56 L. E. A. 762; McKibben v. Amory,
89 Wis. 607, 62 N. W. 416. It has been thought, however, that a
city charter providing that the owners of lands abutting on streets
shall construct and maintain sidewalks, and that they shall be liable
to all persons injured by their failure to keep them in repair and
safe for travelers, is, as to the latter provision, unconstitutional so
far as it imposes a liability to others than the city: Noonan v. Still-
water, 33 Minn. 198, 53 Am. Eep. 23, 22 N. W. 444.
b. Interpretation and Effect of Statutes. — Although abutting
owners have in some instances been held primarily liable for in-
juries caused by the defective condition of sidewalks, by virtue of
their promise to repair them or by reason of their duty so to do as
declared by ordinance (Dutton v. Lansdowne Borough, 198 Pa. 563,
82 Am. St. Eep. 814, 48 Atl. 494, 53 L. E. A. 469; New Castle v.
Kurtz, 210 Pa. 183, 105 Am. St. Eep. 798, 59 Atl. 989, 69 L. E. A.
488; Devine v. Fond du Lac, 113 Wis. 61, 88 N. W. 913), the courts
have generally shown a disposition to place a strict construction on
legislative enactments looking toward any change in the common-
law duty of property owners to keep sidewalks in repair: See the
principal case, ante, p. 977. It has been decided that a charter pro-
vision that if a lot owner neglects to construct or repair a sidewalk,
as ordered by the common council, and the city is compelled to pay
damages for an injury to a person on account of such neglect, the
lot owner shall be liable to the city for the amount so paid, does
not authorize the injured person to bring a suit against the property
owner: Lynch v. Hubbard, 101 Mich. 43, 5 N. W. 443.
A city charter provision making it the duty of the owners or
occupants of premises in front of which sidewalks are located to
keep such walks in repair or pay the expenses incurred by the
municipality in doing so, does not impliedly make such owners or
occupants liable to travelers for injuries occasioned by the walks
being out of repair: See the principal case, ante, p. 977; City of
Keokuk v. Ind. District of Keokuk, 53 Iowa, 352, 36 Am. Eep. 226, 3
N. W. 503; Betz v. Limingi, 46 La. Ann. 1113, 49 Am. St. Eep. 344,
15 South. 385; Eupp v. Burgess, 70 N, J. L. 7, 56 Atl. 166; City of
Eochester v. Campbell, 123 N. Y. 405, 20 Am. St. Eep. 760, 25 N. E.
937, 10 L. E. A. 393; Law v. Kingsley, 82 Hun, 76, 31 N. Y. Supp,
88; Wilhelm v. Defiance, 58 Ohio St. 56, 65 Am. St. Eep. 745, 50 N,
E. 18, 40 L. E. A. 294; Cooper v. Village of Waterloo, 88 Wis, 433,
60 N. W. 714; Fife v. City of Oshkosh, 89 Wis. 540, 62 N. W. 541;
Sommers v. Marshfield, 90 Wis. 59, 62 N. W. 937; Toutlafif v. Green
Bay, 91 Wis. 490, 65 N. W. 168. The purpose of such charter pro-
visions is not to protect individuals who make use of the sidewalks
996 American State Reports, Vol. 115. [Wisconsi:?,
and to furnish them indemnity for injuries which they may sustain,
but rather to furnish the municipality, by a proper distribution of
burdens, the means of discharging its duties.
In addition to the above provision, 'some city charters also pro-
vide that in case of an injury to person or property by reason
of any defect in a sidewalk for which the city would be liable,
arising from or produced by the wrong, default, or negligence of
any person other than the city, the guilty person shall be primarily
liable therefor; and it has been decided that under such a char-
ter a lot owner is not liable to a passer-by for an injury caused
by a mere failure to keep the sidewalk in repair, the charter pro-
vision having reference only to injuries caused by active negli-
gence of the lot owner in obstructing the walks or otherwise
rendering them unsafe, which acts create a common-law liability:
Selleck v. Talhnan, 93 Wis. 246, 67 N. W. 36. This doctrine is ap-
proved in the principal case, where the court said: "The policy of
the legislature has been so long and firmly entrenched in our system
to make municipalities liable primarily and directly to suffercrd
from the failure to keep public ways in a reasonably safe condition
for public travel, that nothing short of some unmistakable repeal of
the statute on the subject could reasonably be deemed to have been
intended for that effect."
c. Necessity of Notifying Owner to Make Bepairs. — A statute con-
ferring upon city authorities complete jurisdiction and control over
streets and sidewalks, requiring adjacent owners or occupiers of lots
to build and repair sidewalks in compliance with notice from the
city authorities, and making such owners or occupiers liable for all
damages resulting from defective sidewalks, does not impose upon
them an absolute duty to repair upon their own motion, but only
the duty to repair after notice from the city authorities: City of
Lincoln v. Janesch, 63 Neb. 707, 93 Am. St. Eep. 478, 89 N. W. 280,
56 L. R. A. 762. To the same effect, see Martinovich v. Wooley, 128
Cal. 141, 60 Pac. 760; Lynch v. Hubbard, 101 Mich. 43, 59 N. W. 443.
Jan. 1906.] Caby v. Preferred Accident Ins. Co. 997
GARY V. PREFERRED ACCIDENT INSURANCE COM-
PANY.
[127 Wis. 67, 106 N. W. 1055.]
PROXIMATE CAUSE. — Responsible Causation, as applied in
the law, is not dependent on time, distance, or a mere succession of
events. If an injury is inflicted by an event, and it is found that
it has set in motion all the succeeding agencies sharing in the result,
then such event, as the efficient producing cause of the injury, is
held to be the proximate cause of the injury, (pp. 1001, 1002.)
ACCIDENT INSURANCE— Proximate Cause of Death.— A
death results "proximately and solely from accidental cause," within
the meaning of these words as used in an accident insurance policy,
where the assured accidentally fell, sustained an abrasion of the skin
through wjiich bacteria entered, causing blood poisoning, from which
he died. (p. 1002.)
ACCIDENT INSURANCE — Blood Poisoning. — An accident pol-
icy exempting from liability and injury "resulting from any poison or
infection, or from anything accidentally or otherwise taken, adminis-
tered, absorbed, or inhaled," does not exempt the insurer from lia-
bility where the assured accidentally falls, sustaining an abrasion of
the skin, through which bacteria enter, causing blood poisoning, from
which he dies. (pp. 1002, 1003.)
ACCIDENT INSURANCE— Bodily Inflrmity.— An exemption
in an accident policy from liability for death "resulting either di-
rectly or indirectly, wholly or in part, from bodily infirmity or dis-
ease of any kind," does not exempt the insurer where the infirmity
or disease results from an accident, as when the insured accidentally
falls, sustains an abrasion of the skin, and blood poisoning follows,
which results in death, (p. 1003.)
Van Dyke & Van Dyke and J. H. Roemer, for the appellant.
J. G. Donnelly and Timlin & Glieksnian, for the respond-
ent.
«« SIEBECKER, J. This is an appeal from a judgment
rendered upon a special verdict in favor of plaiutitl" for
$11,694.64 and costs in an action upon a policy of accident
insurance. The defendant insured Eugene Cary against the
effects of bodily injury caused solely by external, violent and
accidental means, and undertook to pay the insured the sum
of $25 per week for not exceeding fifty-two weeks for a total
disability for that period. Different amounts were to be
paid in the event of the loss of hands or eyes, etc., or in
case of permanent disability; and if death resulted from such
an injury within ninety days from the date of the injury
the company agreed to pay the beneficiary under the policy
998 American State Reports, Vol. 115. [Wisconsin,
the sum of $5,000. There were special provisions regarding
injuries received on railroad trains and other trains and a
number of exemptions from liability. The exemptions mate-
rial of consideration on this appeal are given hereafter. On
Wednesday, June 3, 1903, Eugene Gary, the insured, acci-
dentally fell while on his way to the bathroom in his house,
and sustained an abrasion of the skin on his right leg, just
above the ankle. The accident occurred in going down a
flight of three steps in the hallway between his bedroom and
the bathroom. Immediately after the accident his wife
dressed the wound, which was a little bloody, with some white
cloth. This dressing was renewed daily for a week, except
on Sunday, and on one occasion she applied vaseline to it.
On Friday she noticed that the wound had changed some-
what in its appearance. It had become red in color; On the
second Wednesday, one week after the accident and two days
before his death, a physician first saw the wound, and he
found that Mr. Gary was suffering from blood poisoning.
Two days later, which was nine days after the accident, Mr.
Gary died. On July 2, 1903, plaintiff gave notice of the
claim, alleging that Mr. Gary, in "descending the steps lead-
ing to the bathroom, slipped and fell, injuring his right leg.
Inflammation set in, owing to infection of the wound, which
resulted in his death on June 12, ^ 1903. ' ' On August 15,
1903, a post-mortem examination was made by physicians
representing both the plaintiff and the defendant, and sub-
sequently parts of the body were microscopically examined.
Upon the trial of the action all the medical experts agreed
that Mr. Gary died from the disease of septemia or blood
poisoning, resulting from the introduction of bacteria into
his body through this wound. Plaintiff avers that death re-
sulted solely and proximately from the accidental fall, which
produced the abrasion of the skin on the leg of the deceased.
Defendant denies that death so resulted, and asserts that
death resulted from causes under which the policy exempts
it from liability, and claims that death resulted either from
poison or infection or something accidentally or otherwise
taken or absorbed, or that death resulted directly or indi-
rectly, wholly or in part, from causes or conditions of bodily
infirmity or disease. The provisions of the policy under
which these exemptions are claimed are as follows:
" (1) This insurance does not cover .... any case of dis-
ability or death whatever, except where the claimant shall
-^^
Jan. 1906.] Gary v. Preferred Accident Ins. Co. 999
furnish to the company direct and positive proof that such
disability or death resulted proximately and solely from
accidental causes; (2) nor injury, fatal or nonfatal, result-
ing from any poison or infection, or from anything acci-
dentally or otherwise taken, administered, absorbed, or in-
haled; (3) nor death .... nor disability resulting either
directly or indirectly, wholly or in part, from any of the
following acts, causes, or conditions: .... Bodily infirmity
or disease of any kind."
The cause was submitted to a jury, which by special verdict
found the following facts:
* ' ( 1 ) Did Eugene Gary, by a fall in or near his bathroom,
sustain an injury to his right leg on June 3, 1903, causing an
abrasion of the skin on said leg? Answer. Yes.
"(2) If you answer the first question 'Yes,' then answer
this question : Did the bacteria causing septemia, or blood
poisoning, enter into the system of Eugene Gary, through such
abrasion of the skin? A. Yes.
"(3) Did Eugene Gary at the time of his ''<* death have
a varicose ulcer on the upper part of the lower third of his
right leg? A. No.
"(4) If you answer the question 'Yes,' then answer this
question : Did the bacteria causing septemia, or blood poison-
ing, enter into the system of Eugene Gary through such vari-
cose ulcer? A. [No Answer.]
" (5) Did the death of Eugene Gary result proximately and
solely from bodily injury caused by external, violent and
accidental means? A. Yes.
"(6) Was there any such diseased condition of either the
kidneys, the liver, or the veins of the right leg of Eugene
Gary as contributed to cause his death? A. No.
"(7) Was the immediate cause of the death of Eugene
Gary infection from bacteria, producing the septemia afore-
said? A. Yes.
" (8) If the court should be of the opinion that the plain-
tiff is entitled to recover, at what sum do you assess her dam-
ages? A. (By the court by consent of counsel.) $11,269.64;
one year and five months' interest, six per cent, $425.00 —
$11,694.64."
The court refused to direct a verdict for defendant and
also denied a motion for a new trial. This is an appeal from
a judgment entered in favor of plaintiff upon the special
verdict.
1000 American State Reports, Vol, 115. [Wisconsin,
The defendant insured Eugene Gary for the term pre-
scribed in the policy ** against the effects of bodily injury
caused solely by external, violent and accidental means,"
in the sums and upon the conditions specified, and among
other things agreed that, "if death shall result from such
injury within ninety (90) days from the date thereof, the
said company will pay the sum of $5,000" to the benefi-
ciaries designated in the policy. There is no controversy
but that Mr. Gary sustained an injury to his right leg, which
"^^ caused an abrasion of the skin, that bacteria, causing sep-
temia, or blood poisoning, entered his system through such
abrasion, and that his death resulted therefrom; but there is
a wide divergence between the claims of the parties as to
what was the proximate cause of Mr. Gary's death under the
established facts in the case. One provision of the contract is :
"This insurance does not cover .... any case of disability
or death whatever, except where the claimant shall furnish to
the company direct and positive proof that such disability
or death resulted proximately and solely from accidental
causes." The jury found specifically that Mr. Gary's death
resulted "proximately and solely from bodily injury caused
solely by external, violent and accidental means. ' ' This find-
ing is assailed upon the ground that it is impeached by the un-
disputed facts established by the evidence and the findings in
the special verdict. These findings are, in effect, that bac-
teria, causing septemia or blood poisoning, entered Mr. Gary 's
system through the abrasion of the skin caused by Mr. Gary's
accidental fall, and that his death was immediately caused
by the septemia produced from the infection by such bacteria.
This contention involves the inquiry as to what is meant un-
der the law &f insurance by the proximate cause as applied
and used by the parties to the contract. The term "proxi-
mate cause" as here employed must be understood to have
been used by the parties to the contract in its common and
accepted meaning, as adopted and approved in the law under
like conditions and circumstances. While attempts to de-
fine it are numerous and the phraseology employed in these
attempts differs in the use of terms, they all aim to express
a certain and definite meaning, which has been observed and
applied on many occasions in the decisions of this court. The
proximate relation of cause and effect, establishing legal re-
sponsibility, implies that the result produced had its incep-
tion in some responsible agency. The difficulty lies in as-
Jan. 1906.] Caey v. Preferred Accident Ins. Co. 1001
certaining the agency to which the result is legally attribu-
table. As ''^ stated by this court, the proximate cause "is
not necessarily the immediate, near, or nearest cause, but the
one that acts first, whether immediate to the injury, or such
injury be reached by setting other causes in motion, each in
order being started naturally by the one that precedes it, and
altogether constituting a complete chain or succession of
events, so united to each other by a close causal connection
as to form a natural whole, reaching from the first or pro-
ducing cause to the final result": Deiseurieter v. Kraus-
Merkel M. Co., 97 Wis. 279, 288, 72 N. W. 735. To deter-
mine it we must ascertain the cause which from its incep-
tion acts in a continuous sequence and produces the injury
as a natural and probable result. It cannot be ascertained
by any specific and direct test, but must be determined as any
ultimate fact is inferred from evidentiary facts. If differ-
ent agencies share in producing a result, it then becomes
necessary to determine which is the responsible and efficient
cause from which the injury proceeds, by tracing it to the
active agency fror.i whose inception the injury naturally
follows, either directly or through other causes set in action
by it : Deiseurieter v. Kraus-:Merkel M. Co., 97 Wis. 279, 288,
72 N. W. 735; ]\Iilwaukee & St. P. R. Co. v. Kellogg, 94 U. S.
469 ; 3 Joyce on Insurance, c. 60 ; 1 Cyc. 273.
The facts upon which the jury based their finding of the
special verdict that Mr. Cary's death resulted proximately
and solely from bodily injury caused solely by external, vio-
lent and accidental means are, in effect, that he accidentally
fell and sustained an abrasion of the skin on his right leg,
which wound appeared somewhat red and inflamed on the
second day; that on the eighth day a physician first saw the
wound and then found Mr. Cary to be sulfering from blood
poisoning; and that two days thereafter he died. The evi-
dence also shows that the abrasion of the skin furnished the
portal of entrance through which bacterial infection entered
Mr. Cary's system and caused the septemia which was the
immediate cause of his death. It is urged that unless the
"^^ evidence establishes the fact that the bacterial infection
occurred at the time of the bodily injury by the fall, it can-
not be foui;d that his death was proximately and solely caused
by the accident. As above stated, responsible causation, as
applied in the law, is not dependent on time, distance, or a
mere succession of events. If an injury is inflicted by an
1002 American State Reports, Vol. 115. [Wisconsin,
event, and it is found that it has set in motion all the suc-
ceeding agencies sharing in the result, then such event, as the
eflficient producing cause of the injury, is held to be the proxi-
mate cause of the injury. Under such circumstances the
causal connection in the chain of events is shown by the de-
pendence of each event for its action on the one preceding it,
which thus form a continuous whole, with a proximate rela-
tionship established between the event which acted first
through those naturally succeeding and the point of. injury.
Apply this test to the facts before us, and it is shown that no
such bacterial infection would in all probability have occurred
had there been no abrasion of the skin. This leads to the
inevitable inference that the bacterial infection and the re-
sultant septemia were in the natural course of events de-
pendent upon and set in motion by the abrasion of the skin
caused by the fall. The entry of bacteria into the system can-
not be considered as an independent cause and as having in-
tervened between the accidental fall and the death because
of the fact that it was conditioned on the existence of the
abrasion of the skin and was wholly incidental to and set
in motion by it, thus making it one of the events in the chain
of causation. We are satisfied that the jury were well war-
ranted in their conclusion that Mr. Gary's death resulted
proximately and solely from his accidental falling on the
floor.
The policy exempted the defendant from any liability for
any injury "resulting from any poison or infection, or from
anything accidentally or otherwise taken, administered, ab-
sorbed, or inhaled." Exemption from liability is claimed
'^^ under this provision, under the jury's finding that "the
immediate cause of the death of Eugene Gary [was] infec-
tion from bacteria producing the septemia." This provision
of the policy exempts defendant from liability in case Mr.
Gary's death was caused by poison or infection. Nothing
further need be said to refute the idea that bacterial infec-
tion proximately caused his death under the terms of the
policy. This provision of the policy is an exemption from
liability only where the resultant injury was proximately
caused in the manner specified in the provision. We have
shown that the infection which produced the septemia, which
the jury found was the "immediate cause" of death, can-
not be held to be its proximate cause, and therefore it does
not come within the terms of this exemption. Since the
Jan. 1906.] Gary v. Preferred Accident Ins. Co. 1003
verdict negatives any claim that death was produced by poison
or from anything "accidentally or otherwise taken, adminis-
tered, absorbed, or inhaled," we need not further consider
this exception. In so far as there was a conflict in the evi-
dence on this question it has been resolved in plaintiff's favor
by the jury.
Another exemption agreed upon by the parties is that de-
fendant should not be liable for death "resulting, either di-
rectly or indirectly, wholly or in part, from .... bodily in-
firmity or disease of any kind." The facts as found exclude
the idea that Mr. Gary was afflicted with any bodily infirmity
or disease other than septemia induced by bacterial infec-
tion entering through the abrasion of the skin. The exemp-
tion manifestly cannot apply to this bodily infirmity or dis-
ease, the result of the accident ; for, if it were treated as with-
in the exemption, then it would be difficult to conceive of lia-
bility under any circumstances under insurance against effects
of bodily injury caused solely by external, violent and acci-
dental means. In the very nature of things injury result-
ing from such an accident must be accompanied by some
bodily infirmity in the general sense, and probably by dis-
ease in some form and degree, which in some measure con-
tribute to "^^ the resulting disability or death. The utter-
ance of the court in the recent case of White v. Standard etc.
Ace. Ins. Go. (Minn.), 103 N. W. 735, speaking on this sub-
ject, aptly states the rule applicable to this condition of the
policy: "If, however, the injury be the cause of the infirm-
ity or disease — if the disease results and springs from the
injury — the company is liable, though both co-operate in
causing death. The distinction made in this particular is
found in that class of cases where the infirmity or disease
existed in the insured at the time of injury, and, on the other
hand, that class of cases where the disease was caused and
brought about by the injury. And even in cases where the
insured is afflicted at the time of the accident with some
bodily disease, if the accidental injury be of such a nature
as to cause death solely and independently of the disease,
liability exists."
The facts of this case justify the conclusion that Mr. Gary's
death resulted from the injur}' he accidentally received, and
defendant is liable within the intent and meaning of the pro-
vision of the policy: 1 Cyc. 261; Hall v. American M. Ace.
Assn., 86 Wis. 518, 57 N. W. 366; Freeman v. Mercantile
1004 American State Reports, Vol. 115. [Wisconsin,
Mut. Ace. Assn., 156 Mass. 351, 30 N. E. 1013 ; Manuf actur-
era' Ace. Ind. Co. v. Dorgan, 58 Fed. 945, 7 C. C. A. 581;
Western Com. Trav. Assn. v. Smith, 85 Fed. 401, 29 C. C.
A. 223; United States Mut. Ace. Assn. v. Barry, 131 U. S.
100, 9 Sup. Ct. Rep. 755, The court properly awarded judg-
ment on the special verdict.
By the COURT. Judgment affirmed.
A Policy of Insurance against death by external violence and acci-
dental means covers the case of one who accidentally cuts his finger
by the breaking of a bottle from which wound blood poisoning en-
sues, and death results: Central Accident Ins. Co. v. Rembe, 220
111. 151, 110 Am. St. Rep. 235. See, too, Jones v. Casualty Co., 140
N. C. 262, 111 Am. St. Rep. 843.
An Accidental Policy Insuring loss of business time resulting from
bodily injuries eflfcctcd through external, violent and accidental
means, covers loss of business time from disease, if the disease ia
caused proximately by a bodily injury occasioned through external,
violent and accidental means: Aetna Life Ins. Co. v. Fitzgerald, 165
Ind. 317, 112 Am. St. Rep. 232.
SUFFEL V. McCartney national bank.
[127 Wis. 208, 106 N. W. 837.]
BANKRUPTCY — Preferential Pajnnent, What not. — When a
creditor receives payment without reasonable cause to believe his
debtor insolvent, or that he intended to give a preference, although
the facts in the possession of the creditor are such as would naturally
produce in the mind of a reasonably intelligent man a doubt or raise
a suspicion of solvency, and such as would put a reasonably prudent
man upon inquiry, the payment is not preferental. (p. 1007.)
BANKRUPTCY— Preferential Payment — Belief of Creditor. —
To have reasonable cause to believe that a trader or merchant is
unable to pay his debts as they become due in the ordinary course
of business is a very different thing from having reasonable cause
to believe that the aggregate amount of the debtor's available prop-
erty and assets is insufficient in amount, at a fair valuation, to pay
his debts, (p. 1009.)
BANKRUPTCY — Preferential Pajrmcnt — Question of Fact. —
Whether a creditor in receiving a payment had reasonable ground
to believe that a preference was intended is a question of fact
determinable by the jury or trial court, (pp. 1009, 1010.)
John A. Kittel and Samuel H. Cady, for the appellant.
C. W. Lomas, for the respondent.
Jan. 1906.] Suffel v. McCartney Nat. Bank. 1005
2o» CASSODAY, J. May 7, 1902, Charles F. Dickinson
was adjudged a bankrupt, and the plaintiff was thereupon
appointed trustee of his estate and qualified as such. July
3, 1902, the plaintiff, as such trustee, commenced this action
to recover $1,350 alleged to have been paid to the defendant
by Dickinson April 5, 1902, as a fraudulent preference. The
defendant answered by way of admissions, denials and coun-
ter allegations, among others to the effect that up to the
time of such bankruptcy proceedings. May 7, 1902, the de-
fendant and all its officers believed said Dickinson to be sol-
vent and able to pay all his debts, and had no reason to be-
lieve otherwise, and that such payment by Dickinson to the
defendant was received by this defendant in good faith and
in the ordinary course of business and without any intention
of securing a preference over his other creditors. A trial
by jury having been waived and trial had, the court at the
close thereof found as matters of fact: (1) That at the time
Dickinson paid to the defendant the sums alleged in the
complaint and admitted in the answer he was insolvent; (2)
that the amount so paid by the defendant was a greater per-
centage on Dickinson's indebtedness than his estate will pay
to other creditors, and was a preference; (3) that the cashier
of the defendant bank, who transacted its business in regard
to said debt and payment, did not, at the time of the pay-
ment, believe Dickinson to be insolvent, and none of the of-
ficers of the defendant bank then believed him insolvent; (4)
that neither the cashier of the bank nor any of its officers,
at the time said payment was made, had reasonable cause to
believe Dickinson insolvent nor that it was intended by said
pa\Tnent to give preference to the defendant; (5) that the
facts known to the cashier of the defendant bank, at the
time of said payment, were such as would naturally pmduce
in the mind of a reasonably intelligent man a doubt or sus-
picion of Dickinson's solvency, and were such as would put
a reasonably prudent man upon in(|uiry, if the bankrupt law
required the same diligence of creditors concerning ^'^ pref-
erential payments that is required of grantees in cases of
fraudulent conveyances. And as conclusions of law the court
found that the plaintiff is not entitled to recover in this ac-
tion, and that the defendant is entitled to judgment dismiss-
ing the complaint upon its merits, and for costs. From the
judgment entered in favor of tlx* (IcfVridant in accordance
with such findings, and for costs, the plaintilT appeals.
1006 American State Reports, Vol. 115. [Wisconsin,
In reaching the conclusions mentioned in the foregoing
statement the trial judge, in a lengthy and carefully prepared
opinion, reviewed the evidence as to Dickinson's dealings
with the bank during the three years immediately preceding
such payment, and all facts tending to show what knowledge
the cashier of the defendant, and its other officers, had ac-
quired during those three years as to Dickinson's financial
circumstances. It does not appear that Dickinson did busi-
ness with any other bank during the three years mentioned.
It appears from such summary, among other things, that
Dickinson's business was selling musical instruments on long
time, payable in installments, secured by leases on the instru-
ments sold; and that such business required a considerable
capital in proportion to the volume of business, and so he
obtained loans from the bank, giving such leases as collateral.
As early as in 1899, the cashier of the bank was induced by
Dickinson to believe that his father in law, who was a man
of means and had done considerable for his two sons, had
also advanced, as a gift to Dickinson's wife, $1,700. Janu-
ary 1, 1900, Dickinson submitted to the bank a statement
showing his assets to be $8,003.86 and liabilities $2,791; and
in January, 1901, he referred to the same statement as still
showing his financial condition. In May, 1901, Dickinson
borrowed from the bank $1,200, giving notes therefor with
his father in law as joint maker; and he then told the cashier
^** that he wanted that amount to pay off all his indebted-
ness aside from what he owed the bank. The notes were not
paid at maturity, but, as they were considered perfectly good,
they were allowed to remain. January 1. 1902, Dickinson
gave the bank an inventory of his stock, and a statement of
his liabilities as being $2,000 aside from what he owed the
bank. In the latter part of that month his entire stock of
goods was destroyed by fire, and a few days later his house-
hold effects were destroyed by fire, but he held policies of
insurance upon his stock of goods to the amount of $4,750,
of which $3,250 was in companies represented by the defend-
ant's cashier as agent, and $1,000 on his household effects,
of which $500 was in a company then represented by the de-
fendant's cashier, and the bank then held leases, as collateral,
to the amount of $900, and, from what Dickinson told him,
the cashier supposed he had quite an amount of other leases.
About that time the cashier learned that he owed other in-
debtedness to the amount of at least $2,000, and that about
Jan. 1906.] Sufpel v. McCartney Nat. Bank. 1007
March 29, 1902, some small claims were being pressed for
payment, and some of his checks were unpaid for want of
funds. Sometime between the fires and March 29, 1902,
the cashier inquired of Dickinson whether he intended to re-
sume business and was told by Dickinson that he had about
arranged with his creditors to pay them fifty per cent of the
amount due them at once, and that they would give him
time to pay the balance. About March 29, 1902, the fire
losses were adjusted and paid. The bank's claim against
Dickinson was secured by notes on which his father in law
was joint maker and regarded as perfectly good. Neverthe-
less the cashier asked Dickinson to take up the notes with
the insurance money, but did not insist on such payment.
Dickinson, however, offered to make payment, and so the
same was paid April 5, 1902, as stated.
Such is a general outline of the evidence upon which the
court, among other things, found, in effect, that at the time
of making such payment neither the defendant's cashier nor
any ^^^ of its officers believed Dickinson to be insolvent, nor
had they or any of them, at that time, reasonable cause to
believe him to be insolvent, nor that it was intended by said
payment to give preference to the defendant. Such findings
seem to have covered the issues in the case, and determined
the same in favor of the defendant. But the court went fur-
ther and found, in effect, that the facts known to the cashier,
at the time of such payment, were such as would naturally
produce in the mind of a reasonably intelligent man a doubt
or suspicion of Dickinson 's solvency, and were such as would
put a reasonably prudent man upon inquiry, if the bank-
rupt law required the same diligence of creditors concern-
ing preferential payments that is required of grantees in
cases of fraudulent conveyances. The obvious meaning of
this language, when construed in connection with the other
findings mentioned, is that the court held, as a matter of law,
that the present bankrupt act does not require the same dili-
gence of creditors concerning preferential payments that is
required of grantees in cases of fraudulent conveyances; and
hence, that the facts known to the cashier at the time of re-
ceiving the payment, though sufficient to produce in his mind
a doubt or suspicion of Dickinson's solvency, yet that they
were insufficient to prove that the cashier had at the time
reasonable cause to believe that l)ickin.son was then insolvent,
or that in making such payment he intended to give a pref-
1008 American State Reports, Vol. 115. [Wisconsin,
erence to the defendant. This is in harmony with the con-
clusion of the lengthy opinion of the trial judge, where he
said, in effect, that the point to be decided was somewhat
difficult, but a considerable reflection had led him to the con-
clusion that the knowledge of facts and circumstances pos-
sessed by the cashier was well calculated to produce a doubt
or raise a suspicion in the mind of an ordinarily intelligent
man as to Dickinson's solvency, but not such as was calcu-
lated to produce a belief of it; and as that was essential to
the plaintiff's cause of action, he could not recover. Such
findings of fact seem to be sustained by the evidence.
^*^ Are the conclusions of the trial court in accordance
with the law applicable to the case? It was held by the su-
preme court of the United States under the bankrupt act of
1867: "In order to invalidate, as a fraudulent preference
within the meaning of the bankrupt act, a security taken for
a debt, the creditor must have had such a knowledge of facts
as to induce a reasonable belief of his debtor's insolvency":
Grant v. First Nat. Bank, 97 U. S. 80, 24 L. ed. 971.
Mr. Justice Bradley, speaking for the whole court, there
said: "Hence the act, very wisely, as we think, instead of
making a payment or a security void for a mere suspicion of
the debtor's insolvency, requires, for that purpose, , that his
creditor should have some reasonable cause to believe him
insolvent. He must have a knowledge of some fact or facts
calculated to produce such a belief in the mind of an ordin-
arily intelligent man."
That case and that language were expressly sanctioned in
Barbour v. Priest, 103 U. S. 293, 26 L. ed. 478. The same is
true of a still later case where it was held : "A creditor dealing
with a debtor whom he may suspect to be in failing circumstan-
ces, but of which he has no sufficient evidence, may receive pay-
ment or take security without necessarily violating the bank-
rupt law. When such creditor is unwilling to trust the
debtor further, or feels anxious about his claim, the obtaining
additional security or the receiving payment of the debt is
not prohibited, if the belief which the act requires is want-
ing": Stucky V. Masonic Sav. Bank, 108 U. S. 74, 2 Sup.
Ct. Rep. 219, 27 L. ed. 640.
In considering the adjudications under the bankrupt act of
March 2, 1867 (14 U. S. Stats, at Large, 517, c. 176), it should
be observed that the words "insolvent" and "insolvency"
Jan. 1906.] Suffel v. McCaetney Nat. Bank. 1009
contained in sections 35 and 39 of that act (14 U. S. Stats, at
Large, 534, 536) had a very different meaning than they have
under the present bankrupt act. Thus it was held early under
the bankrupt act of 1867: "By insolvency, as used in the
bankrupt act when applied to traders and merchants, is
meant inability of a party to pay ^^^ his debts, as they be-
come due, in the ordinary course of business" : Toof v. Martin,
13 Wall. 40, 20 L. ed. 481 ; Wager v. HaU, 16 W^all. 584, 21
L. ed. 504.
The present bankrupt act declares: "(15) A person shall
be deemed insolvent whenever the aggregate of his property,
exclusive of any property which he may have conveyed, trans-
ferred, concealed, or removed, or permitted to be concealed or
removed, with intent to defraud, hinder or delay his creditors,
shall not, at a fair valuation, be sufficient in amount to pay his
debts" : Act July 1, 1898, c. 541 ; 30 U. S. Stats, at Large, 544,
sec. 1 (15) ; 2 Supp. U. S. Rev. Stats. (U. S. Comp. Stats. 1901,
p. 3419).
To have reasonable cause to believe that a trader or mer-
chant is unable to pay his debts as they become due in the or-
dinary course of business is a very different thing than to
have reasonable cause to believe that the aggregate amount of
the debtor's available property and assets is insufficient in
amount, at a fair valuation, to pay his debts. This distinc-
tion is pointed out by Federal Judge Lowell of Massachu-
setts in a very recent case, where it was held: "Grounds for
reasonable belief in the present inability of a debtor to pay
his debts in the course of business are not necessarily grounds
for believing that he is in.solvent within the definition of in-
solvency contained in" the present bankrupt act "so as to
require the creditor to surrender payments received as pref-
erences": In re Pettingill & Co., 135 Fed. 218.
It is there said by the court: "Grounds for reasonable
belief in a present inability to pay debts in the course of busi-
ness are not necessarily grounds for believing that a man's
property at a fair valuation is not sufficient to pay his debts."
In construing the clau.se of the bankrupt act here in ques-
tion (30 U. S. Stats, at Large, 562, sec. 60b [U. S. Comp.
Stats. 1901, p. 3445]), it has been held by the circuit court of
appeals of this circuit, in an opinion by Judge Jenkins:
^** "In determining whether taking of security by a cred-
itor constitutes an illegal preference .... the creditor is not
Am. St. Rep., Vol. 1J5— 04
1010 American State Reports, Vol. 115. [Wisconsin,
to be charged with knowledge of his debtor's financial condi-
tion from mere nonpayment of his debt, or from circumstances
which give rise to mere suspicion in his mind of possible
insolvency. On the other hand, it is not essential that the
creditor should have actual knowledge of, or belief in, his
debtor's insolvency, but it is sufficient if he has reasonable
cause to believe him insolvent. If facts and circumstances
with respect to the debtor's financial condition are brought
home to him such as would put an ordinarily prudent man
upon inquiry, the creditor is chargeable with knowledge of
the fact which such inquiry should reasonably be expected
to disclose": In re Eggert, 98 Fed. 843, 102 Fed. 735, 43 C.
C. A. 1.
That case was cited with approval by this court in the re-
cent case of Jackman v. Eau Claire Nat. Bank, 125 Wis. 465,
485, 104 N. W. 98. As held in that case and the Eggert case
(98 Fed. 843, 102 Fed. 735, 43 C. C. A. 1), the question
whether in receiving the payment the defendant's cashier had
reasonable cause to believe that a preference was intended
was a question of fact determinable by the jury or trial court:
Kaufman v. Treadway, 195 U. S. 271, 25 Sup. Ct. Rep. 33,
49 L. ed. 190. We find no error in the record.
By the COURT. The judgment of the circuit court is
affirmed.
For Recent Authorities bearing upon the decision in the principal
case, see Thompson v. Fairbanks, 75 Vt. 361, 104 Am. St. Eep. 899.
BOWE v. GAGE.
[127 Wis. 245, 106 N. W. 1074.]
BBOKEB — When Earns Commission. — If the owner of land
agrees to pay a broker a percentage of the price for which the prop-
erty shall be sold to any purchaser produced by him, the broker
earns his commission if he produces a customer to whom the prin-
cipal in fact sells, (p. 1013.)
BROKER — Fraudulent Settlement by Principal. — If the owner
of land agrees to pay a broker a percentage of the selling price for
which the property shall be sold to any purchaser produced by him,
and subsequently the principal represents that he has decided to
keep the land, and induces the broker to accept a small sura in full
for his services, whereupon the principal himself sells to a customer
previously introduced by the broker, the broker, when he sues for his
Jan. 1906.] Bowe v. Gage. 1011
commission, is entitled to retain the amount paid, subject only to an
equity in favor of the principal that, if the broker shows himself
entitled to recover by reason of a performance of his contract, such
payment shall be applied thereon. If this application is offered by
the complaint, and made by the judgment, this is in practical effect
a return of the money, (p. 1014.)
REPUDIATION OF SETTLEMENT.— The Whole Doctrine of
Befund upon repudiation of a contract of settlement is not technical,
but equitable, and requires merely that the practical rights of the
other party shall not thereby be prejudiced; that he shall be no
worse off than if he had never made the contract of settlement.
Under this principle, application of money paid on a void settlement
to an actual existing debt due from the payor entirely satisfies all
requirements, (p. 1014.)
FEAUD — Sufficiency of Evidence. — An instruction as to the
quantum and character of evidence necessary to warrant a finding
of fraud inducing a settlement, merely cautioning the jury that tliey
are to find fraud only if they are * * satisfied by a preponderance of
the evidence" that it occurred, in the face of a request for a fur-
ther instruction that, notwithstanding a mere preponderance of evi-
dence, the finding of fraud is not to be made unless the jury are sat-
isfied by evidence that is clear, satisfactory and convincing, is erro-
neous, for it is only upon evidence that is clear and satisfactory that
an affirmative finding of fraud can properly be made. (pp. 1014,
1015.)
TEIAIj — ^Beading Law Books to Jury. — The practice of coun-
sel to request and of trial judges to read to juries passages from
opinions is unwise, and usually improper if it goes beyond a mere
statement of a rule of law. (p. 1015.)
BROKER — Instruction in Action for Commission. — In an ac.
tion by a real estate broker to recover his commission, an instruction
that "where a sale is effected through the efforts of a real tstatM
agent or through information derived from him so that he may b<»
said to be the procuring cause, his services are regarded in law as
highly meritorious and beneficial, and the law leans to that construc-
tion which will best secure the payment of his commission rather
than the contrary," is erroneous, as suggesting that real estate agents
are more meritorious or entitled to more favor than people in other
walks of life. (pp. 1015, 1016.)
DECEIT. — In an Action for Deceit the Sole Question is whether
the misrepresentations in fact deceived the party involved and mate-
rially affected his conduct. There is no issue whether or not the
misrepresentations were sufficient to influence the conduct of a per-
son of ordinary intelligence. The effectiveness of deceit is to be
tested by its actual influence on the person deceived, not by its prob-
able weight with another, (p. 1016.)
Doyle & Hardgrove, for the appellants.
Duffy & McCrory, for the respondents.
*^^ DODGE, J. The defendants, being interested in a
farm in Fond du Lac county, entered into an agreement with
the plaintiffs, real estate agents, to the effect, as found by the
jury, that, if plaintiffs should effect a sale or procure a pur-
1012 American State Reports, Vol, 115. [Wisconsin,
chaser at a price acceptable to the defendants, the latter
would pay plaintiffs a two per cent commission on the price
obtained. Eighteen thousand dollars was stated as the
price which defendants desired or demanded. Plaintiffs
made various exertions to make sale, reported several
offers which were unsatisfactory, and at length, about
January 28, 1903, obtained and communicated offer from
one Ferber of seventeen thousand dollars, which was re-
jected by defendants as inadequate, and negotiations by
plaintiffs continued. On February 20, 1903, defendant Gage
came to plaintiffs and stated to them that he had bought the
farm from the otlier co-owners and that they felt like paying
the plaintiffs something, although they had not earned their
commission according to contract. Plaintiffs responded that
they were still hopeful of effecting a sale to Ferber at a satis-
factory price; whereupon Gage, as found by the jury, re-
peated to ^'^^ plaintiffs that he had decided and intended to
keep the farm as a home for himself and not to sell it; that
it was no longer in the market; whereupon the plaintiffs said
that, if he had so decided, they would forego any claim to
continue efforts and find and effect a sale, and accepted his
offer to pay them twenty-five dollars for what they had done,
and gave a receipt in full for all their services in that connec-
tion. At the moment of such negotiation defendant Gage had
not determined or decided to withdraw said farm from the
market or to keep it, but was on his way to see the same man
Ferber with the then present intent to sell to him if a satisfac-
tory price could be obtained. The following day he did effect
such sale for seventeen thousand three hundred and fifty-six
dollars, upon learning which the plaintiffs demanded payment
of their commission of two per cent on that amount, less the
twenty-five dollars received by them, which they credited
thereon; that being refused, they brought this action to re-
cover that amount. A special verdict was found, substan-
tially to the foregoing effect, whereupon judgment was en-
tered in favor of the plaintiffs for three hundred and sixty-
five dollars and thirty-eight cents and costs, from which
defendants appeal.
1. The sufficiency of the complaint to state a cause of
action is assailed. Appellants' argument upon this subject,
as also upon sufficiency of the proofs, is pervaded by an
assumptiou that the agreement was to pay conmiission only in
Jan. 1906.] Bowe v. Gage. 1013
case plaintiffs found a customer ready and willing to pay
eighteen thousand dollars. Such assumption is not suppoi-ted
by the complaint and is negatived by the verdict. The one
alleges, and the latter finds, a contract to pay plaintiffs for
their services in endeavoring to effect sale two per cent of
the price for which the farm should be sold to any customer
produced by them. This is substantially the contract dealt
with in Stewart v. ^^^ IMather, 32 Wis. 344, where it was held
that the broker earns his commissions if he produces a pur-
chaser to whom the principal in fact sells: "Willey v. Ruther-
ford, 108 Wis. 35, 84 N. W. 14; Terry v. Reynolds, 111 Wis.
122, 86 N. W. 557 ; Everett Co. v. Cumberland Glass Mfg. Co.,
112 Wis. 544, 88 N. W. 597. We may also say in this con-
nection that we find evidence tending to prove the making of
such contract, as also the production of the purchaser to whom
the sale was made; hence there was no ground for nonsuit or
direction of verdict on that theory, as also contended by ap-
pellants.
Appellants also urge in support alike of demurrer ore tenus
and motions for nonsuit and direction of verdict, that the ac-
cord and satisfaction is not impeached, first, because no mis-
representations of any existing facts are alleged or proved,
and, second, because no return of the twenty-five dollars paid
on said settlement was ever made or tendered. In discussing
the first ground appellants seek to treat Gage's declarations
to plaintiffs that he had decided to keep the farm and not to
sell it as a mere promise now sought to be added to the writ-
ten agreement then made. This is a misconception. It was
the statement of an existing fact, albeit depending on defend-
ants' mental state. If they had in fact withdrawn the prop-
erty from sale, as they had right to do, all prospect for earning
commission as result of the work plaintiffs had already done
was at an end, and the latter would naturally be induced to
accept anything they could obtain and release defendants
from the mere moral obligation resting upon them. The
complaint alleges and the verdict finds representation of such
an existing mental determination. By undisputed evidence it
is shown that it did not exist, but, on the contrarj', Gage then
had the present intention to proceed at once to effort.s to sell
to the very customer brought to his notice by plaintiffs. Wo
cannot doubt that false re|)resentation of an existing material
fact was alleged and supported by some evidence.
1014 American State Reports, Vol, 115. [Wisconsin,
Upon the question whether the conceded failure to either
**^® return or tender back the twenty-five dollars paid pre-
cluded plaintiffs from denying the validity of the settle-
ment on the ground of fraud, the decisions of this court leave
little doubt, especially when set up by way of defense : Leslie
V. Keepers, 68 Wis. 123, 31 N. W. 486; Davis & Rankin Bldg.
& Mfg. Co. V. Riverside B. & C. Co., 84 Wis. 262, 54 N. W.
506 ; Friend Bros. C. Co. v. Hulbert, 98 Wis. 183, 73 N. W.
784; Gay v. D. M. Osborne & Co., 102 Wis. 641, 78 N. W.
1079 ; Bostwick v. Mut. Life Ins. Co., 116 Wis. 392, 89 N. W.
538, 92 N. W. 246; Fosha v. O'Donnell, 120 Wis. 336, 97 N.
W. 924. The settlement was, in any event, valid and binding
upon defendants, so that plaintiffs were entitled to retain
the money, subject only to an equity in favor of defendants
that, if plaintiffs showed themselves entitled to payment ac-
cording to the terms of the contract of employment by reason
of completed performance thereof, such payment should be
applied thereon since it has been paid as compensation for
part of the same services. Such application was offered by
the complaint and made by the judgment. This was in prac-
tical effect a return of the money to the defendants, for it
was applied, to their benefit, upon a debt which the jury has
found that they owed. This entirely satisfied the rule of the
above decisions holding that the whole doctrine of refund
upon repudiation of a contract of settlement is not technical,
but equitable, and requires merely that the practical rights
of the other party shall not thereby be prejudiced; that he
shall be no worse off than if he had never made the contract
of settlement. Under this principle, application of money
paid on a void settlement to an actual existing debt due from
the payor entirely satisfies all requirements.
2. Error is assigned upon the rule of law adopted by the
court and communicated to the jury as to the quantum and
character of evidence necessary to warrant a finding of fraud,
inducing the settlement and receipt. The charge merely cau-
tioned the jury that they were to find such fraud only if they
251 were "satisfied by a preponderance of the evidence" that
it occurred ; and this, too, in face of a request for further in-
struction that, notwithstanding a mere preponderance of evi-
dence, the finding of fraud should not be made unless the
jury were satisfied by evidence that is clear, satisfactory, and
convincing. It is well settled that certain facts, including
fraud, mistake, and the like, are not to be found as readily as
I
Jan. 1906.] Bowe v. Gage. 1015
the affirmative of ordinary issues not involving turpitude, or
the repudiation of deliberate and formal writings, and while
the doctrine earlier declared, that the evidence must establish
such facts beyond reasonable doubt, has been abandoned, it
is held that only upon evidence that is clear and satisfactory
can an affirmative finding of fraud properly be made. A
court, in submitting the issue of fraud to a jury, does not
perform its duty without instruction marking this distinction :
Parker v. Hull, 71 Wis. 368, 5 Am. St. Rep. 224, 37 N. W. 351 ;
F. Dohmen Co. v. Niagara F. Ins. Co., 96 Wis. 38, 71 N. W.
69 ; Shaw V. Gilbert, 111 Wis. 165, 86 N. W. 188 ; Klipstein v.
Raschein, 117 Wis. 248, 94 N. W. 63 ; Richmond v. Smith, 117
Wis. 190, 94 N. W. 35 ; Harrigan v. Gilchrist, 121 Wis. 127,
99 N. W. 909. The instruction given would correctly enough
have defined the jury's duty upon an ordinary issue of fact
(Anderson v. Chicago B. Co., 127 Wis. 273, 106 N. W. 1077) ;
but it was incomplete as a guide in passing upon fraud, and
the failure to add the proper qualification when requested so
to do must be held error.
3. Error is assigned upon an instruction upon the question
relating to the terms of the employment: "I will instruct you
further in connection with this question that where a sale is
effected through the efforts of a real estate agent or through
information derived from him so that he may be said to be
the procuring cause, his services are regarded in law as highly
meritorious and beneficial and the law leans to that construc-
tion which will best secure the payment of his commission
rather than the contrary."
252 rpjjjg -j^ ^ quotation of a somewhat rhetorical and argu-
mentative statement by Dixon, C. J., of not alone a rule of
law, but reasons therefor, in Stewart v. Mather, 32 Wis. 344,
350. It is an apt illustration of a tendency in counsel to re-
quest, and in trial judges to read to juries, passages from
opinions which it is hoped will convey a favorable impression.
The practice is unwise and usually improper if it goes be-
yond a mere statement of a rule of law. The duty of the
trial court is performed when he communicates the rule which
should guide the jury without stating the refusons which sup-
port it, or quoting comments approving or derogatory to those
who obey or infringe. It was improper to suggest to the jury
in this case that real e.state agents are more meritorious or en-
titled to any more favor than people in other walks of life.
Yet such must be the effect of the instruction now under crit-
1016 American State Reports, Vol. 115. [Wisconsin,
icism. For no other reason was it suggested to the trial
court. At most, it was proper to inform the jury that if the
contract, as they found it to have been expressed between the
parties, was ambiguous, they should favor a construction
which would justify an affirmative answer to the second ques-
tion of the special verdict, namely, whether the agreement was
to pay commission upon procurement of a customer at an
acceptable price. Even that would not be proper unless the
construction of the contract was open to the jury by reason of
ambiguity in language or conflict of evidence as to extrinsic
facts tending to elucidate the meaning of the parties: Vilas
V. Bundy, 106 Wis. 168, 81 N. W. 812. Where the jury had
only to decide whether one set of words or another were in
fact used, neither being ambiguous, such an instruction as
this would be highly misleading. No rule of law confers
higher credibility on a real estate agent, as such, than upon
others.
Error is assigned upon refusal to submit in the special ver-
dict three questions requested. The first and second were
properly refused, because of entire absence of conflict in the
evidence upon their subjects. The third inquired whether
*^* the misrepresentations were sufficient to influence the
conduct of a person of ordinary intelligence. There is no
such issue in an action for deceit. The sole question is
whether the misrepresentations in fact deceived the party in-
volved and materially affected his conduct. Effectiveness of
deceit is to be tested by its actual influence on the person
deceived, not by its probable weight with another: Barndt
V. Frederick, 78 Wis. 1, 47 N. W. 6, 11 L. R. A. 199; Kaiser
V. Nummerdor, 120 Wis. 234, 97 N. W. 932.
Some errors are assigned, but we cannot discover that dis-
cussion of them can be useful upon the retrial.
By the COURT. Judgment reversed, and cause remanded
for new trial.
A Broker is not entitled to any compensation, no matter how much
time he has devoted to finding a customer, provided a customer i»\
not found: Cadigan v. Crabtree, 179 Mass. 474, 88 Am. St. Rep.
397, and see the cases cited in the cross-reference note thereto. How-
ever, if he introduces a buyer to whom a sale is made, he earns his
commission although the principal himself consummates the sale: See
the notes to Kclley v. Baker, 26 Am. St. Rep. 547; Ward v. Cobb,
12 Am. St. Rep. 690; Walker v. Osgood, 93 Am. Dec. 176. But see
Cadigan v. Crabtree, 186 Mass. 7, 104 Am. St. Rep. 543.
Jan. 1906.] Marling v. Nommensen. 1017
MARLING V. NO]\I]\IENSEN.
[127 Wis. 363, 106 N. W. 8-44.]
BILLS AND NOTES — Payment to Unauthorized Person. — The
maker of a negotiable promissory note can satisfy it only by pay-
ment to the owner at the time or to such owner's authorized agent.
If the recipient of the money is not actually authorized, the payment
is ineflfectual, unless induced by unambiguous direction from the
owner or justified by actual possession of the note. This rule applies
generally to all negotiable paper, independently of the existence of
any mortgage or other security, (p. 1019.)
RECORDS. — A Statute Declaring Void Any Unrecorded Con-
veyance as against a subsequent purchaser whose conveyance shall
first be duly recorded does not exclude all other adverse effect than
that which it denounces against one who neglects to place his convey-
ance on record, (p, 1020.)
ESTOPPEL IN PAIS.— The General Doctrine is that he who
acts inconsistently with the truth under such circumstances that,
as a reasonable person, he ought to anticipate that another is likely
to change his position in reliance on such conduct, will be estopped
to assert the truth to the injury of such other, (p. 1021.)
RECORDS — Effect of Omission to Record Instrument. — Since
the adoption of the system of public registry of conveyances, the
custom of prompt registration has been so nearly universal that omis-
sions may well be considered neglect of those precautions customarily
taken to assert a grantee's rights in the land, and people generally
have become accustomed to believe that all rights will so appear and
to act confidently on that assumption; hence such conduct is to be
expected by one holding an unrecorded conveyance, (pp. 1021, 1022.)
RECORD — Omission to Record Assignment of Mortgage. — If
the assignee of a mortgage fails to record the assignment, knowing
that the mortgaged land was held by a real estate dealer with con-
sequent likelihood of sale, he thereby negligently places it in the
power of the mortgagee to deceive or mislead a purchaser, wlio, by
law and custom, would have the right to rely on the record. With-
holding the assignment from record is a persistent declaration to all
persons dealing merely with the title to the realty that the mort-
gagee owns the debt. (p. 1022.)
RECORD — Failure to Record Assignment of Mortgage. — If the
assignee of a mortgage, knowing the property is in the hands of a
real estate dealer and therefore likely to be sold, withholds the as-
signment from record, he is estopped to assert the mortgage as
again'it a vendee of the land who {uirohases in good faith and in reli-
ance on his attorneys' examination of the abstract showing only the
mortgage, the discharge of which by the mortgagee is at the same
time delivered, with the assurance that the note would be surren-
dered in a few days. (pp. 1022, 1023.)
Lenicheck, Fairchild & Boescl, for the appellant.
Turner, Hunter, Tease & Turner, for the resi)on(lent.
1018 American State Reports, Vol. 115. [Wisconsin,
, 365 DODGE, J. On November 3, 1897, the defendant Mil-
waukee Realty Company executed its negotiable note and a
mortgage securing the same upon certain premises in Milwau-
kee to Henry Herman. Said note was guaranteed by the de-
fendants Agnew and Maynard. On December 10, 1897, Her-
man duly transferred said note and mortgage to the plaintiff,
delivering the same to her with a written assignment, which
she thereafter always retained, but did not record the assign-
ment until April 17, 1903. On July 5, 1902, the Milwaukee
Realty Company agreed on a sale of said property to the
appellant. She paid ten dollars down, and received a receipt
in the following words:
"July 5/02.
"Received of B. Nommensen Ten Dollars to apply on pu^
chase of No. 180 Chambers St. (40x60 ft.) Total purchase
price of said premises being $2950. net. There being on said
premises a mortgage of $1800, which said Nommensen or his
assigns agrees to assume as part of the purchase price of
said premises. The balance of said purchase price shall be
paid as follows: $240. July 7/02, $320. July 8/02 & $580.
August 30/02 or the said Nommensen may pay all of the bal-
ance of said purchase price, viz. $2940. on or before ^**® Sept.
lst/02. Land contract and abstract of title will be furnished
at any time on demand, all deferred payments to bear interest
at the rate of 6% per annum.
"A. D. AGNEW."
Appellant notified the realty company of her election to
pay the whole purchase price and receive a clear title to the
premises, and on September 12, 1902, paid the balance then
remaining, together with interest, amounting to two thousand
four hundred and two dollars. Her attorney, who accompan-
ied her, examined the abstract, and discovered the mortgage
in question running to Henry Herman, and the realty com-
pany, acting by Agnew, delivered Herman's release. The
attorney asked for the note and mortgage and was told that
Herman would send them to Agnew within a few days, where-
upon appellant could call for them. On such assurance title
was accepted in reliance on the abstract and the release, a
warranty deed being made by the realty company to appellant.
Such release of mortgage and the deed were recorded, re-
spectively, May 8, 1903, and July 6, 1903. The release was
obtained by Agnew from Henry Herman by payment to him
Jan. 1906.] Marling v. Nommensen. 1019
of the amount of the mortgage by the Milwaukee Realty Com-
pany. He informed Agnew that he did not then have in his
possession said note and mortgage, but promised to obtain
them within a few days. In the spring of 1903 Herman
absconded, a defaulter. Appellant has been in possession of
the premises by the collection of rents ever since the purchase
in July, 1902. None of the defendants had any knowledge of
the transfer of the mortgage to plaintiff, nor had plaintiff any
knowledge of the purchase of the premises by appellant or of
the payment of the mortgage to Herman. She had never
given Herman any authority to collect it. Plaintiff com-
menced this action to foreclose said mori;gage, demanding de-
ficiency judgment against defendants Milwaukee Realty Com-
pany, ^laynard and Agnew. Appellant set up the discharge,
both as a defense and as a counterclaim, with prayer for
quieting her title against plaintiff. Upon ^^"^ findings sub-
stantially in accordance with the facts above stated, judgment
was entered in accordance with the prayer of the complaint,
from which the defendant Nommensen appeals.
Appellant contends for reversal upon two theories: First,
that the debt secured by plaintiff's mortgage is paid and the
mortgage, therefore, discharged; and, secondly, on the ground
that she is estopped to set up such mortgage against appellant,
even if the debt be not paid. The first ground is fully nega-
tived by our former decisions. The maker of a negotiable
promissory note can satisfy it only by payment to the owner at
the time or to such owner's authorized agent. If the recipient
of the money is not actually authorized, the payment is ineffect-
ual, unless induced by unambiguous direction from the owner
or justified by actual possession of the note. This rule applies
generally to all negotiable paper independentl}' of the existence
of any mortgage or other security : 3 Randolph on Commercial
Paper, sees. 1444, 1450; Bartel v. Brown, 104 Wis. 493, 80
N. W. 801; Kohl V. Beach, 107 Wis. 409, 81 Am. St. Rep. 849,
83 N. W. 657, 50 L. R. A. 600; Louizeaux v. Fremder, 123
Wis. 193, 101 N. W. 423; Biggerstaff v. Marston, 161 Mas-s
101, 36 N. E. 785 ; Murphy v. Barnard, 102 Mass. 72, 44 Am,
St. Rep. 340, 38 N. E. 29; Bromley v. Lathrop. 105 Mich.
492, 63 N. W. 510; Church Assn. v. Walton, 114 .Mich. 677. 72
N. W. 998; llollinshead v. Stuart & Co., 8 N. Dak. 35, 77 N.
W. 89. 42 L. R. A. 659; Manhiittan Co. v. Reynolds, 2 Hill,
140; Mitchell v. Bri.stol, 10 Wend. 492; Williams v. Jack.son,
1020 American State Reports, Vol. 115. [Wisconsin,
107 U. S. 478, 2 Sup. Ct Rep. 814, 27 L. ed. 529. Certain
cases cited to support effectiveness of payment to original
mortgagee as against unknown assignee do not deal at all
with negotiable instruments, and, therefore, ^*^ are without
applicability : Van Keuren v. Corkins, 66 N. Y. 77 ; Barnes v.
Long Island R. E. etc. Co., 88 App. Div. 83, 84 N. Y. Supp.
951. Some contention is made that appellant assumed the
debt, and that the payment to Herman must be deemed to
have been made by her, thus subjecting her to the principle
above stated. We are clear, however, that the premise to this
reasoning is incorrect. The clear meaning of the receipt
given at the time of .bargaining for the premises was that ap-
pellant might, at her election, buy the premises subject to
the mortgage, in that case assuming the debt, or might buy
clear of the mortgage upon payment of the entire sale price
to the realty company. Beyond dispute she elected to do the
latter and, therefore, never became liable for the debt as be-
tween herself and her grantor. We do not understand the
finding that said written receipt contained words of assump-
tion to mean that appellant agreed to assume. If that be
the meaning, it would be contrary to the undisputed evidence.
Turning, then, to the second ground of defense, we must
first overrule some contention in appellant's favor based on
section 2241 of the Statutes of 1898, declaring void any unre-
corded conveyance as against a subsequent purchaser "whose
conveyance shall first be duly recorded," for the reason that
appellant's conveyance, whether the release from Herman or
the warranty deed from the Milwaukee Realty Company was
not recorded until after plaintiff's assignment: Fallass v.
Pierce, 30 Wis. 443; Potter v. Stransky, 48 Wis. 235, 4 N.
W. 95 ; Girardin v. Lampe, 58 Wis. 267, 16 N. W. 614 ; Butler
V. Bank of Mazeppa, 94 Wis. 351, 68 N. W. 998 ; Friend v.
Yahr, 126 Wis. 291, 110 Am. St. Rep. 924, 104 N. W. 997, 1
L. R. A., N. S., 1891. The real question to be considered is
whether the statute above mentioned excludes all other ad-
verse effect than that which it denounces against one who
neglects to place his conveyance on record. It must be con-
fessed that the final opinion in Fallass v. Pjerce, 30 Wis. 443,
seems to proceed very much on that assumption, and some facts
which might in that case have been urged as aroiLsing estoppel
*®* in pais were passed over, and the earlier conveyance sus-
tained notwithstanding. Nevertheless the subject was not
Jan. 1906.] Marling v. Nommensen. 1021
discussed, and the case is rather suggestive than decisive.
In Potter v. Stransky, 48 Wis. 235, 4 N. W. 95, while the
earlier unrecorded conveyance was sustained because the
later one was not recorded, as an independent ground, the
court dwelt with some industry on the presence of facts which
excluded reliance by the second purchaser upon the absence
of any record of prior conveyance; and in Butler v. Bank
of Mazeppa, 94 Wis. 351, 68 N. W. 998, there is intimation
that a negligent purchaser might be affected by an estoppel
outside the terms of the statute. Girardin v. Lampe, 58 Wis.
267, 16 N. W. 614, and Friend v. Yahr, 126 Wis. 291, 110 Am.
St. Rep. 924, 104 N. W. 997, 1 L. R. A., N. S., 891, both pre-
sented situations falling within the terms of the statute, the
later conveyances being recorded before the earlier ones.
A moment's reflection must convince one that a prior pur-
chaser may, by failure to record his conveyance, certainly in
connection with other facts and circumstances, become es-
topped to rely on it against one whom he has led to believe
and act upon its nonexistence, although he should afterward
get his conveyance on record before the later one. Certainly,
if the assignee stood by and declared his nonownership to
one about to buy or pay a mortgage to the original mortgagee,
he would be estopped afterward to assert his assignment.
The question, therefore, is whether such acts of either omis-
sion or commission are here presented as bring plaintiff with-
in the general doctrine of estoppel. That general doctrine
is that he who acts inconsistently with the truth under such
circumstances that, as a reasonable person, he ought to an-
ticipate that another is likely to change his position in re-
liance on such conduct, will be estopped to assert tlie truth
to the injury of such other: Two Rivers Mfg. Co. v. Day,
102 Wis. 328, 78 N. W. 440 ; Frels v. Little Black F. M. Ins.
Co., 120 Wis. 590, 98 N. W. 522. The question presented,
then, is whether plaintiff's act in not recording her assign-
ment could have been anticipated by her as likely to induce
^'^** belief in others that Herman still owned it and lead
them to act accordingly. Since the adoption of the system
of public registry of conveyances, the custom of prompt regis-
tration has been so nearly universal that omissions may well
be considered neglect of those i)recautions customarily taken
to assert a grantee's rights in the land, and people generally
have become accustomed to believe tliat all rights will so
1022 American State Reports, Vol. 115. ["Wisconsin,
appear and to act confidently on that assumption; hence
. such conduct is to be expected by one holding an unrecorded
conveyance. The land in question was held by a dealer in
real estate, so that the likelihood of its sale was apparent to
plaintiff. She must realize that, in event of sale, the rec-
ord advertised Herman as the person to whom a purchaser
must apply, either to clear the title from the lien of the
mortgage or for information as to the validity or amount of
that lien, and, therefore, negligently placed it in Herman's
power to deceive or mislead a purchaser, who, both by law
and by custom, would have the right to rely on the record.
Her withholding her assignment from record was a persist-
ent declaration to all persons dealing merely with the title
to realty that Herman owned the mortgage. Of course, as
to one dealing with the debt evidenced by a negotiable note,
the actual possession by her of such instrument changed the
situation ; but that has no application to appellant.
The efficacy of a discharge by the record holder of a mort-
gage in favor of one dealing with the land in reliance thereon
is a subject of some conflict of authority, as stated in Whipple
V. Fowler, 41 Neb. 675, 60 N. W. 15, where cases on both
sides are cited, and the rule favoring such efficacy is adopted,
in which view the following decisions concur: Swartz's Exrs.
v. Leist, 13 Ohio St. 419; Cram v. Cotrell, 48 Neb. 646, 58
Am. St. Rep. 714, 67 N. W. 452; Bullock v. Pock, 57 Neb.
781, 78 N. W. 261 ; Ogle v. Turpin, 102 111. 148 ; Havighorst
V. Bowen, 214 111. 90, 73 N. E. 402; Williams v. Jackson,
107 U. S. 478, 2 Sup. Ct. Rep. 814, 27 L. ed. 529. In the
recent case of Friend v. ^ti Yahr, 126 Wis. 291, 110 Am.
St. Rep. 942, 104 N. W. 997, 1 L. R. A., N. S., 891, while
the decision might have rested upon the statute, absolutely
avoiding the unrecorded assignment of the mortgage, the
subject of estoppel was discussed, and the concurrence of
this court with the line of decisions above cited was declared.
We still adhere to that view, and feel convinced that plain-
tiff is estopped to deny H^erman's continued ownership and
authority to discharge this mortgage as against a purchaser
of the property in good faith relying upon the public rec-
ords. We can find nothing to impugn appellant's good faith.
She paid the full price for the land in reliance upon her
attorney's examination of an abstract from the records show-
ing only a mortgage to Herman, his discharge of which was
Jan. 1906.] Hubeb v. Maetin. 1023
delivered at the same time. The consistency of just such
acts with entire good faith is fully declared in Friend v.
Yahr, 126 Wis. 291, 110 Am. St. Rep. 942, 104 N. W. 997, 1
L, R. A., N. S., 891, as also the immateriality of the fact
that the note and mortgage were not exhibited to her. We
must therefore conclude that appellant holds the land in
question discharged from the lien of plaintiff's mortgage.
By the COURT. Judgment reversed, and cause remanded,
with directions to enter judgment in accordance with the
prayers of appellant's counterclaim, as to her, and for fur-
ther proceedings according to law.
If the Assignee of a Mortgage does not record the assignment, • he
may be estopped to assert the mortgage as against persons without
notice of the assignment: Connecticut Ins. Co. v. Talbot, 113 Ind.
373, 3 Am. St. Rep. 655. The record of a mortgage affords construc-
tive notice only of its existence and ownership thereof by the mort-
gagee named therein, not of the assignment of such mortgage to an-
other: Friend v. Yahr, 126 Wis. 291, 110 Am. St. Rep. 924. A release
by a mortgagee after assigning the note secured by the mortgage is
valid in favor of one who had no notice of the assignment, although
both the note and mortgage are in the hands of the assignee: Swasey
V. Emerson, 168 Mass. 118, 60 Am. St. Rep. 368. See, too, Huitink
V, Thompson, 95 Minn. 392, 111 Am. St. Rep. 476. But the record of
the assignment of a mortgage imparts notice to all persons dealing
with the assignor; and hence payment thereafter made to him does
not ordinarily discharge the mortgage: Cornish v. Wolverton, 32 Mont.
598, 108 Am. St. £ep. 598.
HUBER V. MARTIN.
[127 Wis. 412, 105 N. W. 1031, 1135.]
MUTUAL INSURANCE — Termination of Membership.— Under
the Charter of a Mutual Insurance company providing, in effect, that
one can become a member only by taking out a policy of insurance
and that the membership can survive only to the end of the policy
period upon which it is based, no one can rightly be treated as a
member for any purpose at any time unless he then holds an unex-
pired policy of insurance, (p. 1033.)
MUTUAL INSURANCE — Commencement of Membership. — If
the charter of a mutual insurance company contains no provision
on the subject, membership commences only with the taking out of
a policy, and lasts only for the policy period, (pp. 1033, 1034.)
MUTUAL INSURANCE — Status of Members. — As regards
rights and remedies, the policy-holders in a mutual insurance com-
pany are stockholders therein the same as owners of stock in a
stock corporation, there being no charter provision to the contrary,
(p. 1036.)
I
*
1024 American State Reports, Vol. 115. [Wisconsin,
MUTUAL INSURANCE— Interests of Members.— The interrsta
of policy holders in a mutual insurance company are twofold; they
are both insurers and insured. In respect to the former, they are
bound to share in the losses and entitled to share in the profits of
the business on the basis of a partnership, except so far as the
charter or policy contract provides otherwise, (pp. 1036, 1037.)
MUTUAL INSURANCE— Title to Property.— The title to the
property of a mutual insurance corporation is in the company, but
the equitable interests therein are vested in the members the same
as in case of a stock corporation. While the corporation owns the
property, the members own the corporation, (pp. 1034, 1035.)
MUTUAL INSURANCE — Creation and Distribution of Sur-
plus. — It is competent for a mutual insurance corporation, there being
no limitation in its charter to the contrary, to make rates for insur-
ance with a view of probably creating a surplus and of subsequently
distributing the same to members so far as experience shall show that
the same is not needed in the, business, (p. 1035.)
MUTUAL INSURANCE— Distribution of Surplus.- In case of
a distribution of the surplus of a mutual insurance company or of
its other assets, there being no charter provision to the contrary, ex-
isting policy-holders and such only are the legitimate distributees.
In the aggregate, they are entitled to the whole, (p. 1036.)
MUTUAL INSURANCE— Property Rights of Members.- The
Legislature may Alter or amend the charter of a corporation, but
cannot legitimately appropriate its property without the consent of
all its members, either to its own use or that of a private party,
though such party be a successor corporation, in the absence of
some authorization to the contrary in the charter originally, (p.
1038.)
MUTUAL INSURANCE — Property Rights of Members. — For
all except corporate purposes, the property of a mutual insurance
company, the same as that of any other corporation, belongs to its
members, whether they are stockholders in the technical sense or in
the broader one which includes policy-holders in such company, (p.
1037.)
MUTUAL INSURANCE — Constitutional Rights of Members.—
The property of a mutual insurance company and the equitable prop-
erty rights of its members are within the guaranties of the state con-
stitution as regards the inhibition against laws impairing the obliga-
tion of contracts, and the inhibition of the national constitution as
regards the equal protection of the laws and deprivation of property
without due process of law. (p. 1042.)
MUTUAL INSURANCE— Distribution of Assets.— A law en-
acted during the life of a mutual insurance company providing for
the distribution of its assets or a bestowal thereof upon another
without consent of all of its members, no authority in that regard
being contained in the charter of such company, offends against the
constitutional limitations referred to. (p. 1042.)
MUTUAL INSURANCE — Suits by Members. — Any member of
a mutual insurance company, suing for himself and others similarly
interested, may invoke equity jurisdiction to redress or prevent any
wrong injuriously affecting the property rights of the corporation,
when its officers will not move appropriately to that end. (p. 1045.)
CORPORATIONS — Effect of Termination. — The supposed com
mon-law rule, that upon the termination of a corporation its debts be-
come extinguished, its realty reverts to the grantors and its personal
Jan. 1906.] Hubeb v. Martin. 1025
property goes to the sovereign, if it ever existed in fact, is wholly
obsolete, except as to purely public corporations, (p. 1038.)
CONSTITUTIONAL LAW— Statute Void in Part.— In case of
a scheme of legislation for a particular purpose, created by the en-
actment of a law specially referring to the subject, and to other laws
required for a complete plan, if the special enactment is the inducing
provision and is unconstitutional, the whole is inefficient. The mat-
ter is governed by the rule, that where a part of a law is unconstitu-
tional and was the inducement to the rest, which by itself would not
have been enacted, the whole is void. (p. 1047.)
COKPORATION DE FACTO.— An Unconstitutional Act of the
Legislature is not a sufficient basis for a corporation de facto. That
can exist only in case of a law under which it might have been cre-
ated de jure. (p. 1047.)
CORPORATION. — The Law That Corporate Existence cannot
be Inquired Into, except by judicial proceedings in the name of the
state, does not apply to a pretended but not even a de facto corpora-
tion, (p. 1047.)
MUTUAL INSURANCE — ^Reorganization on Stock Plan. — In
case of success, in form, of an attempt to reorganize a mutual insur-
ance company on the stock plan under a law, in terms, authorizing
it, and the insurance business formerly carried on by the old com-
pany being continued ostensibly by the new creation, using the
former's assets and goodwill, if the attempt is fruitless because of
the enabling act being void such continued business is to be regarded
as really that of the old corporations; as belonging to it. (p. 1048.)
[Syllabus by Marshall, J.]
Lewis & Koach and Quarles, Spence & Quarles, for the
appellants.
Sawyer & Sawyer and S. S. Barney, for the respondents.
'**'* MARSHALL, J. Appeal from an order sustaining
demurrers to the complaint. The facts relied upon for a
cause of action were these: The defendant Germantown Far-
mers' Mutual Insurance Company is a corporation created
and existing under chapter 278 of the laws of Wisconsin
for the year 1854, and the defendant Germantown Insur-
ance Company is a corporation existing under chapter 89
of the statutes of 1898, and chapter 229 of the laws of Wis-
consin for the year 1903. The individual defendants are
the officers and directors of the two corporations. Plaintiflf
is a policy-holder of the first-named company, holding policy
No. 67,198, dated August 1, 1901, and expiring by its terms
August 1, 1906, and by the law of 1854 mentioned he be-
came a member thereof. Such company has, or did have
before they were dissipated, as hereafter stated, assets in
excess of .t21 1,375.76, which are really the property of its
members. September 28, 1903, the individual defendants
Am. St. Rep., Vol. 115—65
1026 American State Reports, Vol. 115, [Wisconsin,
and others wrongfully conspired together and organized the
Germantown Insurance Company, to the end that it might
acquire the assets of the Germantown Farmers* Mutual In-
surance Company for the use and benefit of the former and
the members of such conspiracy without the consent of the
policy-holder members of the old organization, and the pur-
pose of such conspiracy was accomplished, so far as creating
the new organization and putting its members in possession
of such property. Such new organization has paid a small
part of the assets wrongfully acquired to members of the old
company. Nearly all the stock of the new organization has
been taken by the officers, and directors of the old company,
they thereby wrongfully acquiring to themselves the large
property aforesaid, which belonged to the old organization
and its members, leaving said members no security for pay-
ment of their policies, except that assumed by the new or-
ganization. Plaintiff has been denied access to the books of
*^^ the new organization, on which account he is unable to
state precisely the amount of unlawful gains which it secured
by the wrongful acts aforesaid. This action is prosecuted
on behalf of plaintiff and all others similarly situated for
the benefit of the Germantown Farmers' Mutual Insurance
Company, such company being made a defendant because
its officers are the persons guilty of the mischief complained
of, and insist that the new organization has absorbed the
old one, leaving the latter incapacitated to maintain any
action.
Upon such facts plaintiff prayed for an accounting by the
Germantown Insurance Company and the individual defend-
ants as to all their doings in the premises, and for restraint
upon them as to appropriating the goodwill of the German-
town Farmers' Mutual Insurance Company, or disposing of
or injuring its assets, and for a receiver to take over the as-
sets involved in the administration, and for general relief.
Separate demurrers were interposed to the complaint, first,
for want of jurisdiction over the defendants or the subject
of the action; second, for want of legal capacity to sue, in
that plaintiff has no legal right to call in question the power
of the defendant corporations or their officers to do any of
the things mentioned in the complaint, and has no interest
in the subject matter of the action ; third, for misjoinder of
causes of action ; fourth, for insufficiency. The demurrers
were sustained and plaintiff appealed.
Jan. 1906.] Hubeb v. Martin. 1027
*^^ Counsel for the respective parties, as we view the com-
plaint, in effect, take issue 'as to their rights on this state of
facts : A purely mutual company was organized under a
charter providing that policy-holders only should be mem-
bers thereof. It conducted its business for some fifty years.
In that time it accumulated a surplus of over $200,000. At
the time of the commencement of the action and during the
reorganization acts hereafter mentioned, plaintiff was a mem-
ber of the company. The entire membership at the time of
such proceedings constituted but a small proportion of those
who had joined the company from the beginning. The legis-
lature, after the surplus was substantially as indicated, en-
acted a law in terms authorizing such a company to be turned
into a stock corporation at the option of two-thirds of its
existing policy-holders representing not less than one-half
of its outstanding insurance. It did not recognize such
policy-holders as having any greater several interests in the
corporate property, or rights to participate in the taking of
stock in the reorganized company, than past policy-holders,
or treat them as being the owners of the corporate property
and business, or having any interest therein worthy of be-
ing sought after in the reorganization proceedings, or as a
result thereof, or policy-holders, past and present, as having,
in the aggregate, rights in such property equivalent to but
a small proportion of the whole thereof, or of a character
reasonably probable to be realized upon. The scheme in its
entirety was such that its execution in any case would prob-
ably or necessarily result in bestowing the net assets over
liabilities of the company upon the new organization, and
indirectly upon the promoters thereof as a mere gratuity.
The officers of the Germantown Farmers' '*^ Mutual In-
surance Company became the promoters of the Germantown
Insurance Company, as a reorganization of the former, for
the purpose of enabling the new creation to acquire directly,
and themselves to acquire indirectly, without consideration,
the surplus assets of the old company. They fully executed
such purpose as regards acquiring actual possession of such
property and using the same as that of the new company.
The plaintiff and others similarly situated did not consent
thereto.
Counsel for respondents by their attitude in printed and
oral arguments accepted the situation staled, affinning that
the conduct complained of is justifiable on principle aud au-
1028 American State Eeports, Vol. 115. [Wisconsin,
thority, that it is neither a wrong to appellant or to anyone
else, of sufficient dignity at least to be a subject for judicial
redress at his suit or that of any other party; that it is not
even one of those wrongs from the standpoint of good morals,
laying one liable to the condemnation of his fellow-men;
and that, if it Avere otherwise as an original proposition, it is
not a wrong under the circumstances by force of legislative
authorization within its legitimate field. Counsel for appel-
lant as confidently assert the negative, maintaining that the
acts of the legislature involved, and to which respondents
point for their justification, is a clear usurpation — is within
the condemnation of the letter and spirit of the constitution,
state and national, and of elementary and judicial authority
as well.
The very statement of the position which must be main-
tained in order to defeat the complaint as insufficient to show
any wrongdoing as regards the appellant of which he can be
judicially heard to complain in the manner attempted, or at
all, at first sight, we must confess, so shocks the moral sense
that one is inclined to enter upon a study of the subject with
the impression that no substantial basis can be found for it
in the law. As a rule, one can rightly acquire property only
by gift inter partes or operation of law, or by finding or le-
gitimate ^^^ reduction to possession of things belonging to
the people in the sovereign capacity, or by estoppel or by
adverse possession, or by creating it by one's own energy,
or that in connection with his private capital, or such and the
capital of others legitimately secured, or by purchase. To
obtain property in any other way one must needs pass be-
yond the boundary line between right and wrong, measured
by legal standards. It is quite probable that there have been
many excursions beyond that line, and many more beyond
the line dividing right from wrong, tested by purely moral
standards, in the administration of insurance trusts of dif-
ferent sorts — some of the kind involved here and some having
the stock feature of ownership — the officers, or those con-
nected with them, with their connivance or consent, or both,
in various ways depleting the trust fund or using it for
their private enrichment as never contemplated by the policy-
holders, or the organic acts of the corporate creation. Such
occurrences, whether viewed in their moral or legal aspects,
as regards facility for transferring trust property to the pri-
vate use of its chosen guardians, pale before the possible
Jan. 1906.] Hubeb v. ^Lirtin. 1029
happenings, if the stated case must be stamped with judicial
approval. In that contingency nothing stands in the way
but the uncertain will of the legislature, of the officers of our
great mutual life insurance company, if they should be so
inclined, so manipulating things as in time to reduce to their
private ownership the great wealth constituting its surplus
fund, and reducing to like ownership the goodwill of the in-
surance business itself, which has been built up by wise
management and the patronage of the people through a
period of more than half a century. The very thought that
such a result would be possible if the law is as contended for
by respondents' counsel suggests the existence of such seri-
ous infirmity in our constitutional guaranties as regards prop-
erty rights that one could not well conclude that they exist,
except in the face of some unmistakable demonstration.
'*^*^ To give added emphasis to what has been said we will
turn to chapter 229 of the laws of 1903, under which re-
spondents justify, showing that the result of executing the
law in the case in question would produce all the dire re-
sults to the parties in interest above suggested.
The company was organized in 1854. It had done busi-
ness for forty-eight years at the time of the acts complained
of. At the end of such period, as appears by the last public
record, the amount of unexpired risks was $2,922,889. The
amount paid for carrying such risks was $42,331.32. The
length of the policy periods was about as follows: One-fonrth
one year, one-half two years, and one-fourth five years. The
total amount of premium assessments paid into the company's
treasury from its organization was $896,558.64. Assuming
that the average rate for carrying risks for the entire i^eriod
of the company's existence was substantially the same as for
the last five years thereof the total amount of risks from the
beginning was approximately $63,334,000, indicating that
at the tiiiie of the attempted reorganization the number of
policy-holders and the amount of risks then in force was to
the total number of persons who became members of the com-
pany from the start, and the total amount of risks carried
during the entire period, as one to twenty-two. The re-
organization act provided as follows:
"Sec. 1. Any nnitual fire insurance corporation, organ-
ized under any law of this state," circumstanced as the one
in question, "may. with the consent in writing of two-thirds
(%) of the members of such corporation representing not
1030 American State Reports, Vol. 115. [Wisconsin,
less than one-half of its outstanding insurance, become a
stock corporation, by proceeding in accordance with the pro-
visions of the statutes of this state regulating the organiza-
tion of stock fire insurance corporations.
"Sec. 2. Every member of such corporation on the date
of said annual or special meeting shall be entitled to prior-
ity in subscribing to the capital stock of such corporation,
for one month after the opening of the books of subscription,
and in the proportion that the amount of cash premium paid
in by "**' such member bears to the total amount of risks
in force on the date of said annual or special meeting; pro-
vided, that if any one of the past or present members shall
not subscribe for stock, then the said corporation shall, upon
application, within ninety (90) days return to him his equi-
table proportion of the surplus of the company, to be com-
puted by an actuary to be employed by the corporation for
that purpose.
"Sec. 3. No part of the assets of such mutual fire insur-
ance corporation shall be divided among the members there-
of, but shall, after such reincorporation, become the prop-
erty of such stock corporation, to be expended by it for the
ordinary disbursements of the company, in carrying on its
business, including the payment of losses incurred upon its
policies; and all property of such mutual fire insurance cor-
poration shall be transferred to such stock corporation, or-
ganized as aforesaid, in the manner provided by law."
It will be observed that one month only was allowed after
the opening of the books for subscriptions for stock in the
new corporation for members of the old company to become
subscribers. That contemplated that all persons who had be-
come members of the company during the forty-eight years
of its existence, and who were living, and the personal repre-
sentatives or the heirs wherever they might be, of those who
were dead, should exercise the right afforded by the act to
take stock in the corporation within the thirty days named.
No provision, however, was made for any notice to the possi-
ble beneficiaries of the opening of such books, nor as to the
amount of capital stock of the new corporation. All that was
left to the custodians of the property and business of the old
concern, who presumably were to be, and who in fact became,
the promoters of the new organization. The complaint does
not state what amount of stock was finally determined upon
for the new organization. It could not have been less than
Jan. 1906.] Hubeb v. Martin. 1031
$100,000, for that is the minimum fixed by the statute. It
is safe to assume, probably, that it was fixed at that sum. So
it appears by computation that every one of the existing
policy-holders was afforded the opportunity, if he should de-
sire '*^* and discovered his rights in time, to take stock to
the amount, approximately, of fifty cents for each $1,000 of
insurance carried. The rate would be substantially the
same as applied to all persons who became policy-holders
from the beginning. If all the existing policy-holders im-
proved the very uncertain and wholly valueless opportunity
to take stock, it would exhaust about $1,500 thereof. If all
those possessing membership rights at any time during the
existence of the company improved the opportunity afforded
by the act to take stock, it would exhaust about $31,667 there-
of, or somewhat less than one-third. Thus it will be seen
that the promoters of the enterprise and, in contemplation
of law, the members of the legislature in passing the act
must have proposed from the start the appropriation for the
use of such promoters of all the assets of the old company,
alleged in the complaint to amount to some $250,000, and
$211,375.76 in excess of all liabilities, actual and contingent,
since the amount above secured to each policy-holder was
too trifling to be called for.
The act treated, as before indicated, everyone as having a
membership right who at any time held a policy in the cor-
poration and entitled to the same consideration as any other
member. Provision was made, in form, to enable each one
having any such right to claim a part of the surplus, in ease
of his failing to take advantage of the valueless opportunity
indicated, to take stock, but such provision was likewise value-
less as will be seen. As a condition of any past or present
member obtaining any part of the surplus he was required
to be vigilant and make application therefor, and then to
take such sum for his appropriate share as the company's
actuary might deem equitable. Obviously, if the legislative
basis for subscription rights of members were taken as the
equitable standard for measuring rights to the surplus, the
amount coming to each member would not be worth the
trouble required to obtain it. It must be presumed that the
legislature '*^'^ intended to preserve to thase tlesiring to be-
come members of the new organization their equitable rights
in that regard according to its views in respect thereto. In
that light no reason is perceived why, if the company's aetu-
1032 American State Reports, Vol, 115. [Wisconsin,
ary saw fit to use such standard, it would not be justified,
if the act of the legislature is valid. In any event, since
past as well as present members are required to be consid-
ered, only about one twenty-second, or $9,545, of the surplus
could be awarded to present members, if the entire surplus
were to be considered as a fund for distribution among mem-
bers, past and present. That would afford about thirty-one
cents per $1,000 of risk carried by' the company. Thus, it
will be seen, it would be a reflection upon everyone concerned
in passing the act in question and executing it, to entertain
the idea that they seriously thought the result of adminis-
tering it to the company in question would be otherwise than
a bestowal upon the new corporation of the legal title, and
upon the managing agents of the old company — the custo-
dians of its property — who would naturally, and did actu-
ally, become the organizers of such corporation, the equi-
table ownership of all property and business of the old
company as a mere gratuity.
If what has been said needs re-enforcement section 3 of
the act furnishes it. That is sufficiently significant to bear
repeating at this point: "No part of the assets of such mu-
tual fire insurance corporation shall be divided among the
members thereof, but shall, after such reincorporation, be-
come the property of such stock corporation, to be expended
by it for the ordinary disbursements of the company in car-
rying on its business, including the payments of losses in-
curred upon its policies."
How could all the property of the old organization be-
come that of the new one, "to be expended by it for its ordi-
nary expenses," no part being divided among the members
of the old organization, and yet such members obtain their
equal proportion under the second section of the act? The
only ^2® conclusion reachable, it seems, is that the author
of the legislation did not give any thought to the subject
of the second section as to its requiring any efficient distribu-
tion of the surplus. It could not be distributed as property
of the old organization and at the same time be covered into
the treasury of the new one for its ordinary disbursements
in payment of its debts, expenses, and policies. So it is
plain, not only from the spirit but the letter of the act, that
the purpose thereof was to make a gift of the property of
the old organization to the new one, the same being regarded
as disposable at the will of the legislature.
K
Jan. 1906.] Huber v. IVIartin. 1033
In respect to the peculiar features before referred to there
is no similar law anywhere, so far as we are able to discover.
Counsel for respondent place great reliance on Grobe v. Erie
Co. Mut. Ins. Co., 24 Misc. Rep. 462, 53 N. Y. Supp. 628,
affirmed, 39 App. Div. 183, 57 N. Y. Supp. 290, which will
be discussed at some length hereafter. As suggested by-
counsel for appellant, the law there, quite unlike the one be-
fore us, dealt with existing members of the old organization
as, in the aggregate, the equitable owners of its assets and en-
titled to become the owners of all of the stock of the new cor-
poration. The total amount paid into the corporate treasury
was deemed to stand for all the stock in the new organiza-
tion. Each policy-holder \vas secured the right to take such
proportion of the entire stock as the amount paid by him on
unexpired insurance bore to the aggregate of all sums so
paid by existing members: N. Y. Laws, 1896, c. 850. We
venture to say that, except in the one instance before us, no
law has been enacted for converting a mutual insurance com-
pany, or other nonstock organization, into a stock company,
not recognizing the members of the old company as its owners
and entitled to be recognized as such in the organization of
the new one.
Proceeding logically, the next question to be taken up is
this: Who were the members of the Germantown Farmers'
'*^^ INIutual Insurance Company at the time of the attempted
reorganization? The law of its creation answers that most
distinctly, if effect is to be given to the plain letter thereof.
Section 3, chapter 278 of the Laws of 1854 provides that
"every person who shall at any time become interested in
said company by insuring therein, and also his heirs, execu-
tors, administrators and assigns, continuing to be insured
therein .... shall be deemed and taken to be members
thereof for and during the terms specified in their respective
policies, and no longer." With language so plain it seems
useless to spend time endeavoring by construction to read
some idea out of it not found in its letter. Words which
are plain, both in themselves and when applied to the sub-
ject with which they deal, in that they lead to no absurd
consequence, must be taken according to their ordinary im-
port, nothing being added thereto or taken therefrom: State
V. Ryan, 99 Wis. 123, 74 N. W. 544: Gill)ert v. Dutruit. 91
Wis. 661, 65 N. W. 511. The quoted langiinge was changed
somewhat by the amendatory act of 1878 : Laws 1878, c. 306.
1034 American State Reports, Vol, 115. [Wiscjonsin.
The law as changed retained all the significant words of the
original act or used equivalents so as to make the dominant
features more prominent. The act is in harmony with ele-
mentary principles. If it were not for the emphatic declara-
tion the result would be the same in the absence of some pro-
vision of the charter to the contrary. It is thus laid down
by text-writers, based on authority: "Membership dates in
each case from the time when the insurance is effected," and
"membership in the mutual insurance company cea.ses upon
the termination of the policy": 21 Am. & Eng. Ency. of
Law, 2d ed., 264-266.
From the foregoing it is evident that whatever private in-
terests there were in the assets of the Farmers' company
over and above sufficient to satisfy its liabilities were the
property of persons holding unexpired policies therein, and
that part of the legislation under which respondents seek to
'*** justify the attempt to dispose of the corporate property
without their consent must stand the same test as any legis-
lative attempt to take property of one person and give it
to another, or to impair contractual rights. We are not un-
mindful of the authorities called to our attention, which will
be as fully as need be referred to hereafter, for support for
the doctrine that there is something peculiar respecting the
ownership of property of a mutual insurance company ren-
dering it a subject of legislative disposal, or distribution by
equity jurisdiction on the basis of recognizing all contribu-
tors to the fund, regardless of whether they are actual mem-
bers of the company at the time thereof or not. We are un-
able to see any logical foundation in reason or in good law
for any such doctrine.
Where is the ownership of the net assets of a mutual insur-
ance company located? That the legal title is in the cor-
poration goes without saying. The rule in that regard must
be the same in case of one corporation as another. Why is
not the equitable right — the real beneficiary interest — inde-
pendently of the corporate use, vested in the members of the
corporation in one case the same as in the other? It would
seem that, after the corporate purposes are exhausted, the
property of every business corporation belongs to its mem-
bers, is self-evident. It is no answer to the proposition to
say, no member has "any aliquot part of the corporate as-
sets subject to identification, conservation and recovery,"
for that is true as to any corporation. It is likewise no an-
Jan. 1906.] Huber v. Martin. 1035
swer to say, it is no part of the business of a purely mutual
insurance company to distribute its profits among the mem-
bers, unless that is provided for by the contract or the or-
ganic act. Unless prohibited from doing so, such a corpora-
tion, in the event of its accumulating a needless surplus, may
distribute the same to its members (Mygatt v. New York P.
Ins. Co., 21 N. Y. 52), and may make such distribution at
such times and to such extent as the governing authority
may determine: ^^* Equitable Life Assur. Soc. v. Host, 124
Wis. 657, 102 N. W. 579. Indeed, no reason is perceived why
such an insurance company may not make rates with a view
to the probable accumulation of a surplus and the distribu-
tion of so much thereof, from time to time, as may appear
from experience not to be needed. Moreover, it may be that
such distribution would be due to members and enforceable
in case of the surplus being unreasonably large, as there is
reason to believe it was in this case. "Why was the company
carrying a surplus equal to over six per cent upon the face
of its policies and more than five timas the amount paid into
the corporate treasury on account thereof? Assuming the
management was honest, does it not look as if the rates were
made with a view to the probable accumulation of a surplus
and probable dividends to members therefrom? The logic
of counsel's argument at this point seems to fail entirely.
However, the question at issue is not what right a member
of a corporation of the sort under consideration, while it is a
going concern, has in its net assets, but what right has he
when it ceases to do business, when its property must neces-
sarily pass out of its hands, though his interest in the latter
situation would appear to be more appreciable in case of a
surplus accumulated in contemplation of a distribution there-
of to members than otherwise. Obviously, if he has au
equity in the surplus, whenever it is no longer needed in any
reasonable view for the corporate business, the right to real-
ize thereon must exist.
The authorities supporting the last foregoing are not nu-
merous. One would not expect them to be on a matter which
80 appeals to one's common sense as necessarily right upon
fundamental principles. However, harmonious (juotations
from text and judicial authorities could be given at great
length. To illustrate: "The principle which lies at the
foundation of mutual insurance, and gives it its name, is
mutuality; in other word.s, the intervention of each person
1036 American State Reports, Vol. 115. [Wisconsin.
*** insured in the management of the affairs of the company,
and the participation of each member in the profits and losses
of the business, in proportion to his interest": 2 ]\Iay on In-
surance, 4th ed., sec. 548. "Each person insured becomes a
member of the body corporate, clothed with the rights and
subject to the liabilities of a stockholder": 2 May on Insur-
ance, 4th ed., sec. 548 ; 21 Am. & Eng. Ency. of Law, 2d ed.,
267; Korn v. Mutual Assur. Soc, 6 Cranch, 192, 3 L. ed.
195. "Although the members of a mutual company are not
usually denominated stockholders, and are not stockholders
in the usual sense of the word, yet they are in point of fact
stockholders": 2 May on Insurance, 4th ed., sec. 549. "The
property of the corporation belongs to its members": Opinion
of district judge in Temperance Mut. Ben. Assn. v. Home
Friendly Soc, 187 Pa. 38, 40 Atl. 1100. "There is nothing
to prevent a mutual company from carrying on its opera-
tions with a view to profits and dividends": Mygatt v. New
York P. Ins. Co., 21 N. Y. 52. In Eiddell v. Harmony Fire
Co., 8 Phila. 310, the distribution of the assets, not surplus,
of a mutual organization was enjoined at the suit of a mem-
ber on the ground that such distribution was improper, ex-
cept on surrender of the charter or dissolution of the cor-
poration. The case proceeds upon the ground that the prop-
erty of a nonstock corporation, not public, needed for its
business belongs to the members, but not recoverable, of
course, in possession, so long as the corporation is a going
concern. The title to the property in any corporation — the
substantial beneficial ownership — is in its members: 1 Clark
& Marshall on Private Corporations, 23.
Titcomb v. Kennebunk Mut. F. Ins. Co., 79 Me. 315, 9
Atl. 732, relied upon by counsel for the respondents, is in
harmony with the foregoing, notwithstanding some discus-
sion, which will be referred to hereafter. The case went
upon the ground that there were no existing policy-holders.
The last policy had expired. It was absolutely without mem-
bership.
In Carlton v. Southern Mut. Ins. Co., 72 Ga. 371, it was
'*^^ held, generally, that a member in a mutual insurance
nonstock company, in the absence of charter regulations, is
entitled to participate in any lawful distribution of its sur-
plus on the basis of a partnership agreement. It was said,
quoting from the syllabus: "A mutual insurance company is
based on the idea that each of the assured becomes one of the
Jan. 1906.] Hubeb v. Martin. 1037
insurers, thereby becoming interested in the profits and liable
for the losses. Without a charter, such an organization would
be governed by the general law of partnership."
In the case in hand the distributees -were held to include all
stockholders, and that the word "stockholders" under the
terms of the charter included every person who had contrib-
uted to the fund on hand, whether holding any unexpired
insurance or not. That conclusion was reached based on
language peculiar to the charter. It has no application what-
ever to such a charter as the one in question on that point.
It does not seem best to spend further time on the branch
of the case last treated. We hold that there is no difference
between business corporations as regards ownership of prop-
erty. In the general sense, every member of a mutual cor-
poration is a stockholder and is the equal of any member
similarly situated, or any member of any corporation having
an equal interest, proportionally, as to holding the benefi-
ciary title to the corporate assets. For corporate purposes
only the corporate entity owns the property, otherwise it be-
longs to the members. No principle of law is more firmly
founded in reason, aud none more important to be kept in
bold relief by courts so as to challenge the attention of those
who have to do with corporate affairs, especially corporations
dealing with the subject of insurance. The oHficers of such a
concern have no greater authority over its assets, as regards
appropriating the same to their private use, than those in
other corporations. Neither does legislative i)ower legiti-
mately exteud to interfering with property rights more in
'*^"* one case than in the other. F'alse notions of this inat-
ter, which may be, perhaps, attributed in part to courts, htus
led to the erroneous idea that the members of a mutual in-
surance company have no rights save those expressed on the
face of their policies; that otherwise they have no interest in
the corporate assets which the courts will protect. That is a
very erroneous and very dangerous dcx'trine. Nothing will
be more productive of gooil administration of such conei'ms
as the one under discussion than to have it detinitely pro-
claimed by the courts, as we do now. that, while the corpor-
ate property bi'lon«i:s to the corporation for corporate pur-
po.ses, the corporation itself hrlonu's to the meiiiln'i"s lliereof,
and that any such member, howi'vcr small his interest, may
knock successfully at the judicial doors to ])iev(nt the use of
1038 American State Reports, Vol. 115. [Wisconsin,
the corporate assets in any other way than in strict harmony
with what has been said. If such were not the case, wrongs
of a serious nature would quite likely go without redress and
rights without protection.
But it is said that under the reserved power in the consti-
tution what the legislature may create, as regards corporate
organizations, it may alter or destroy, and that as it may pro-
vide for the dissolution of a corporation it may also provide
for the disposition of its assets. Regardless of the legislative
control suggested, the law-making body has no authority to
appropriate private property to the use of the state, except
under the taxing or police power, or power of eminent do-
main, or to a private party. There can be no confiscation of
corporate any more than of individual property.
"Corporations are persons within the meaning of the con-
stitutional provisions forbidding the deprivation of property
without due process of law as well as a denial of the equal
protection of the laws": Covington etc. R. Co. v, Sanford,
164 U. S. 578, 17 Sup. Ct. Rep. 198, 41 L. ed. 560 ; Pembina
Con. S. M. & M. Co. v. Pennsylvania, 125 U. S. 181, 8 Sup.
Ct. Rep. 737, 31 L. ed. 650 ; Santa Clara Co. v. Southern Pac.
R. Co., 118 U. S. 394, 6 Sup. Ct. Rep. 1132, 30 L. ed. 118.
435 y^Q aj.g cited to the supposed ancient rule of the com-
mon law that upon the termination of a corporation its real
estate reverts to the grantor and its personalty to the sover-
eign and that its debts become extinguished. Some bearing
is claimed for that. While it has some distinguished support
in modern times (2 Kent's Commentaries *307), it long since
became obsolete, if it ever was the law, except as regards pub-
lic corporations. It was distinctly repudiated by this court
in Lindemann v. Rusk, 125 Wis. 210, 104 N. W. 119. The
authorities supporting such repudiation are substantially
without conflict: Late Corporation (Mormon Church) v.
United States, 136 U. S. 1, 10 Sup. Ct. Rep. 792, 34 L. ed.
481; 3 Purdy's Beach on Private Corporations, sec. 1327:
2 Cook on Corporations, 5th ed., sec. 641; 2 Morawetz on
Private Corporations, 2d ed., sec. 1032; 5 Thompson on
Corporations, sec. 6746. American courts have, except in
a very few instances, never recognized the doctrine, and
quite recently it was held by the court of queen's bench in
bankruptcy that it never had any place in the common law of
England. In Re Higginson & Dean, [1899] 1 Q. B. 325, 79
Jan. 1906.] Huber v. Martin. 1039
L. T. 673, Wright, J., said that no instance was recorded in
the books where such doctrine was ever applied by any
English court and referred to an American decision, Bank of
Vincennes v. State, 1 Blackf. 267, 12 Am. Dec. 234, where the
contrary was held, as having been reasoned on a false basis.
We may safely close this branch of the case by saying that,
aside from dicta here and there, in the whole not worthy of
serious consideration, there is no legitimate support any-
where for the rule that the property of a business corporation
upon its termination and the pajTnent of its debts goes
otherwise than to its members, if it has members to take. It
is quite remarkable that the ancient rule should, for well-nigh
two centuries, have been confidently asserted from time to
time by judges and text-writers as the law, including writers
of such eminence as Bacon, Kyd, and Kent, have first been
repudiated quite unanimously in America, and then be de-
clared in the supposed place of its origin to ^^® never have
been a part of the common law. Here, the language of Jus-
tice Bradley, in Late Corporation (Mormon Church) v.
United States, 136 U. S. 1, 17, 10 Sup. Ct. Rep. 792, 34 L. ed.
481, confining the application of the supposed ancient rule to
public corporations has been universally adopted.
We should not pass wholly from this subject without re-
ferring to the fact that so learned a writer as Judge Elliott
in his valuable work on Private Corporations, at section 606,
adds to the corporations specified by Justice Bradley, to
which the supposed ancient rule now applies, mutual insur-
ance companies, referring to Titcomb v. Kennebunk ^lut. P
Ins. Co., 79 Me. 315, 9 Atl. 732, and Cummins v. Ilollis, 108
Ga. 402, 33 S. E. 919. The Titcomb ca.se (79 Me. 315, 9 Atl.
732) is also referred to in 2 Clark & Marshall on Private Cor-
porations, at section 328, but without approval so far as bear-
ing on the question in hand. It is uuiortuuate that so care-
ful a writer as Judge Elliott should have lent his distin-
guished approval to the cases cited by adopting the construc-
tion thereof which he incorporated into his text. An
examination of Cummins v. lloilis, 108 Ga. 402, 33 S. E.
919, shows that it went distinctly upon the ground that the
corporation was public. It was based on the decision in
Mason v. Atlantic Fire Co., 70 Ga. ti04, 48 Am. K^'p. 585,
which involved also a puhlic corporation. By inii)licjilion
the ilollis case (,106 Ga. 402, 33 tj. E. 'J 19;, held that in case
1040 American State Reports, Vol. 115. [Wisconsin,
of the dissolution of any corporation not public the net
property would go to its members, using this language: "On
the dissolution of a corporation of this character, its assets
are appropriated in other ways than by a division among
its members." In harmony therewith the same court said in
Dade C. Co. v. Penitentiary Co., 119 Ga. 824, 47 S. E. 338:
"The mere fact that a corporation has no capital stock does
not necessarily deprive its members of their proportionate
rights in the corporate property."
True, in Titcomb v. Kennebunk Mut. F. Ins. Co., 79 Me.
315, 9 Atl. 732, the supposed ancient rule of the common law
was quoted with approval. That fact as it appears, has been
a disturbing element ^^'^ in the preparation of text-books and
in the decisions of some courts, but the fact remains that it
was not applied to the case in hand. It was held, as before
indicated, that the property escheated to the state becaase all
the policies had expired and, therefore, the corporation was
without membership. The idea was there met that in a dis-
tribution of a surplus by a corporation all persons who have
ever been members of the company should be recognized, and
it was said that such a rule for the distribution of corporate
assets is entirely impracticable, as we have heretofore said.
This language was used : ' ' To distribute among them a small
amount of assets, and to determine what each former policy-
holder's share ought in equity to be, would be attended with
difficulties and an amount of labor which the end would not
justify."
It should be noted that in Smith v. Hunterdon Co. Mut.
F. Ins. Co., 41 N. J. Eq. 473, 4 Atl. 652, the rule of distribu'
tion condeinned in the Maine case was adopted by a process
of reasoning not deemed to be logical. It ignored the obvious
fact that the members of a corporation, and the members only,
own the corporation, and that it is not permitted to any
court upon its own notions of equity to take any part of the
corporate property and distribute it to those not members.
If the rule were applicable in any event, it could not be to a
corporation whase charter expressly provides, as in this case,
that only persons holding unexi)ired risks shall be deemed
members. The New Jersey court was evidently persuaded to
the course adopted by Carlton v. Southern Mut. Ins. Co., 72
Ga. 371, failing to observe that it turned upon a construction
of language in the charter which the court felt bound to hold
Jan. 1906.] Hubeb v. Martin. 1041
was used to make everyone who contrfbuted to the corporate
surplus a member, or stockholder, as was said, for the pur-
poses of any distribution of such surplus.
No hardship can result to members of a mutual insurance
company from their relation wnth the organization being con-
sidered as above stated. Every policy-holder knows, or ought
*^ to know, that he will remain a member so long as he re-
mains a policy-holder and no longer. He knows, or ought to
know, that as soon as his membership relation is established
he becomes possessed of an equitable interest in the assets of
the company consisting of all accumulations prior to his time,
and such as may be added thereto during his membership,
but which cannot be realized on in possession in the absence
of a necessary distribution of the surplus on account of the
company going out of business, or in some proper way. lie
knows, or ought to know, that it is entirely optional with him
whether to preserve his interest in the company and thereby
protect his contingent rights, or to allow them to lapse by
ceasing to be a member. lie also knows, or ought to know,
that in case of his interest so lapsing it will inure to the bene-
fit of those associated with him who choose to retain their
memberships and those who come after him, the doors of the
company swinging freely to let in new members and to let
old ones out according to choice, those at any moment of time
being then and then only the owners of the company to all
intents and purposes the same as members of any other cor-
poration.
To summarize at this point : The members of the German-
town Farmers' Mutual Insurance Company at the time of the
proceedings under chapter 229 of the laws of 1903 to super-
sede it by a new corporation, denominated the Germantown
Insurance Company, were the persons then having unex-
pired policies in the former. For all except corporate pur-
poses they were the beneficial owners of its assets. In ca.se
of its being wound np the net a.s.s('ts constituted a fund for
di.stribution between the members according to their respec-
tive contributions to the company's treasury. In case of any
distribution of its surplus, other than following a dis-solution,
they were entitled to so participate. The surplus in excess of
the reasonable needs of the corporation was a j>roper subject
for distribution at any time. The right of the corporation to
hold '*^** its property in harmony with that situation, and the
Am. yt. Kcp., Vol. 115— 0($
1042 American State Reports, Vol. 115. [Wisconsin,
rights of the inembers»to have the same so held and admin-
istered, were property interests resting on contractual obli-
gations and so within the guaranty of the state constitution
as regards the passage of laws impairing the obligations of
contract,- section 12, article 1, of the constitution of Wis-
consin, and that of the national constitution as regards the
deprivation of property ^dthout due process of law, or deny-
ing to persons the equal protection of the laws: U. S.
Const., 14th Amend. Due process of law does not ex-
tend to the taking of private property or the violation
of private rights for private ends. The act of the legis-
lature in question, in terms or in effect, authorizes the ap-
propriation of the property of one private corporation and
the equitable interests therein of the members thereof to the
use of another private corporation and of its members in vio-
lation of the corporate charter rights of the former corpora-
tion, and in defiance of the wishes of such of its members
as do not choose to consent thereto. The proposition affirmed
by counsel for respondents, stated at the outset in the opin-
ion, must, therefore, be answered in the negative. The act
of the legislature, laws of 1903, chapter 229, is unconstitu-
tional and void and furnishes no justification for the acts
complained of. To that extent the complaint states a good
cause of action and should have been sustained.
All cases and the authorities, generally, so far as we can
discover, not excepting the one to be presently specially men-
tioned, upon which counsel for respondents mainly rely, are
in substantial harmony as regards members of a corporation
of the sort under discussion being the owners of the corporate
property, subject to the corporate purposes, in the absence of
some charter provision to the contrary, as we have held. If
there was want of harmony as to who are to be deemed mem-
bers of a corporation of the kind in hand, in the absence of
a charter provision on the subject, it would not be material in
this case since the charter here expressly provides that only
"^*^ the holders of unexpired policies can be deemed to be
members.
We have thought best to proceed to this point without re-
ferring to the decision most confidently relied upon by coun-
sel for respondents — Grobe v. Erie Co. ]\Iut. Ins. Co., 24 Misc.
Rep. 462, 53 N. Y. Supp. 628, affirmed, 39 App. Div. 183. 57
N. Y. Supp. 290, or the one on which with equal confidence
Jan. 1906.] Huber v. Martin. 1043
counsel for appellant rely — Schwarzwaelder v. German Mut.
F. Ins. Co., 59 N. J. Eq. 589, 44 Atl. 769, because the former,
when rightly understood on the main point — that as to the
validity of legislation providing for the transfer of the prop-
erty of one corporation to another and the substitution of the
latter for the former without the consent of all of the mem-
bers of the old corporation — is entirely inapplicable to the
case before ils from the attitude of respondents, and is in
harmony with the case relied upon by appellant, as we shall
see, and both bear on the question yet to be treated of,
whether if the appellant has a ground of complaint he in-
voked the proper remedy.
Before proceeding to the next point we will state briefly
our view of the above-cited New York case on the main ques-
tion. The court there met this situation : The insurance
company sought to be superseded was formed in 1874 under
a general law. There was a reorganization law then in force
substantially like the one here, except that it treated all pol-
icy-holders of any mutual company sought to be superseded,
at the time of the reorganization proceedings, owners of the
company as regards the right to take the entire stock in the
new corporation. In short, it contemplated the substitution
of one corporation for another without any change of mem-
bership, except at the option of the members of tlie old cor-
poration. "When the subject of dispute was organized there
was a system of laws on ^he statute books, originating as
early as 1853 and continued to and inclusive of the reor-
ganization proceedings, authorizing any mutual insurance
company by ^^* consent of two-thirds of its members to
reorganize on the stock plan. The law in that regard, as the
court held, became, by implication, at the creation of the
charter of the corporation sought to be superseded a part of
such charter. The court said that every person who partic-
ipated in the reorganization knew of the faet. or ought to
have known of it, and that by joining the company he im-
pliedly agreed to submit to a reorganization of it at any time
in the future whenever the re(iuisite two-thirds of it.s mem-
bers so desired and the legal reciuirements in the matter were
complied with. The result was that the reorganization was
sustained solely on the ground that the reorganization pro-
ceedings were in harmony with the charttT of the coritora-
tiou sought to be superseded. That, as it will be observed, is
1044 American State Reports, Vol. 115. [Wisconsin,
in perfect harmony with the decisions as regrards laws author-
izing the turning of voluntary organization into corporate
entities. We have just held (Spiritual etc. Temple v. Vin-
cent, 127 Wis. 93, 105 N. W. 1026) that such reorganization
law as to corporations antedating its passage cannot disturb
their property rights. That is in harmony with authorities
generally: Schiller Commandery v. Jaonnichen, 116 Mich.
129, 74 N. W. 458. The difficulty with the position of coun-
sel for respondents, as regards the New York case, is this:
There was a reorganization act preceding the corporate charter
and was in effect a part of it, while here the reorganization
act came after the charter, and, therefore, if given effect, is a
modification of it interfering with vested property rights.
The vital part is not the change of the charter but the con-
fiscation, so to speak, of the corporate property. Inferen-
tially the New York court held that in the circumstances we
have here the reorganization law could not be sustained.
Turning to the New Jersey case, upon which counsel for
appellant rely, the situation before the court was precisely
like that here. There was no provision, express or implied,
in the charter of the corporation sought to be superseded
authorizing '*^^ a reorganization without the consent of all
its members, or at all. The reorganization act, the same as
here, came subsequent to the corporate charter. The cor-
poration was formed in 1893. The plaintiff became a mem-
ber thereof in 1898. The reorganization act was pa.ssed in
1899. The court held that such act, as regards authorizing a
new corporation to supersede the old one contrary to the
wishes of any member of the old one, was unconstitutional.
Thus it will be seen that both cases are in harmony. Both
condemn the act in question.
On the subject of whether plaintiff has a cause of action
in equity the point is made, in addition to those heretofore
discussed, that the complaint, in effect, admits the incorpora-
tion of the stock company; that therefore it became vested
with the property of the old organization, and, there being
no allegation that the new company is not ready, willing, and
able to pay all the liabilities of the old company, the latter
could not maintain this action, therefore plaintiff cannot.
The complaint, as we understand it, makes no admission that
the new company is vested with the title to the assets of the
Germantown Farmers' Mutual Insurance Company. It ad-
Jan. 1906.] Hubeb v. Martin. 1013
mits that it has manual possession thereof, but eharses that
the legal title and right of possession is in the mutual com-
pany. It further alleges that the officers of the latter are so
concerned in the commission of the wrong that there is no
reasonable ground to expect that they will efficiently assert
its rights. That makes a clear case for the plaintiff, since he
is pecuniarily interested in the protection of the old com-
pany's rights, to invoke equity to enforce its cause of action.
Whether the right of the mutual company is legal or equitable
makes no difference as regards the rights of the appellant
to invoke equity. That field of judicial activity only is open
to him. One of the most common and important subjects of
equity jurisdiction is the protection of equitable rights formed
on legal or equitable rights of corporations, public or private,
■*^^ when thase who should resort to judicial remedies to con-
serve the same will not do so : Land L. & L. Co. v. Mclntyre,
100 Wis. 245. 69 Am. St. Rep. 925, 75 N. W. 964; Kircher v.
Pederson, 117 Wis. 68, 93 N. W. 813; Balch v. Beach, 119
Wis. 77, 95 N. W. 132.
The doctrine of the New York court, cited to our attention
from Grobe v. Erie Co. Mut. Ins. Co., 39 App. Div. 183, 57
N. Y. Supp. 290, that "the unascertained interest of a mere
member of a corporation is not of sufficient significance to
challenge attention of a court of equity to protect it. To
permit corporations to be managed by suits in equity, insti-
tuted in the interests of persons holding such indefinite
rights, would produce intolerable confusion and end sub-
stantially in the destruction of such enterprises," has no
place here. We had occasion to examine it at some length in
Land L. & L. Co. v. Mclntyre, 100 Wis. 245, 69 Am. St. Rep.
925, 75 N, W. 964. It is entirely inconsistent, as it seems,
with the real functions of equity jurisdiction. The idea that
a member of a corporation pecuniarly interested in the vindi-
cation or prevention of some wrong to it, which it has not ca-
pacity to do for itself because of the attitude of unfaithful
officers, cannot in behalf of himself and others similarly in-
terested apply successfully at the door of equity because his
interest as a single member is small, is unworthy to be enter-
tained. It has not found and cannot find any favor here.
There is no such reproach upon our judicial system. The
jurisdictions are exceptional where the rule is not recognized
and broadly applied that where a cause of action exists in
1046- American State Reports, Vol. 115. [Wisconsin.
favor of a corporation and its governing body refuses to en-
force it, any member thereof may do so, suing in equity in
behalf of himself and others. The direct injury to the cor-
poration is the primary end, in such action, to be remedied.
It may be very large and the interest of the active instru-
ment in conserving it may be very small. The former is the
significant end, the latter is sufficient for the case so long as
it is appreciable as a property interest: 4 Thompson on
Corporations, '**'* sec. 4479. In Schwarzwaelder v. German
Mut. F. Ins. Co., 59 N. J. Eq. 589, 44 Atl. 769, under such
conditions as we have here, equity jurisdiction at the suit of
a single policy-holder enjoined the reorganization proceed-
ings upon the ground that the threatened injury to him was
irreparable. The court held that the reorganization could not
proceed against the protest of a single member, and that as
neither the common law nor statute offered any adequate legal
remedy for such a deprivation of property the matter was
within one of the well-recognized heads of equity juris-
prudence.
The point is made that the complaint alleges that the Ger-
mantown Insurance Company is a corporation organized un-
der the provisions of chapter 89 of the statutes of 1898, and
charter 229 of the laws of 1903, and that such being the case
it must necessarily, as a de facto corporation at least, be the
owner of the assets of the old corporation and beyond the
reach of any but direct proceedings at the suit of the state
to inquire into its right in the matter. True, the complaint so
alleges, but the allegation must be construed in the light of the
whole pleading. It can mean no more than that everything
was done, which it was competent to do under the laws re-
ferred to, to make the Germantown Insurance Company a
corporation. The whole gravamen of the pleading is that
the law of 1903 offends against the constitution and therefore
everything done under it is void. The complaint states:
"The individual defendants with divers other persons com-
bined and confederated for the unlawful purpose" of de-
priving the Germantown Farmers' Mutual Insurance Com-
pany of its property, "and therefore caused to be organized
the above-named defendant, Germantown Insurance Com-
pany, and thereafter undertook to reincorporate said Ger-
mantown Farmers' Mutual Insurance Company into a stock
corporation under the name of the Germantown Insurance
I
Jan. 1906.] Hubee v. Martin. . 1047
Company, and undertook" to transfer the property of the old
company to the Germantown Insurance '*'*^ Company, and
through the acts of such individual defendants the latter
company converted the property of the old corporation to
its own use. While it speaks of the new creation as a cor-
poration it pleads the underlying fact — the fact that the pro-
ceedings to incorporate it are such only as the reorganization
act, in terms, authorized. "Whatever there is in the complaint,
suggesting in terms that the legal effect of such acts was to
create even a de facto corporation, is contrary; to the whole
spirit and obvious intent of the pleading and in any event
cannot control contrary to the law governing the matter. The
law of 1903 being unconstitutional, as we hold it to be, and
being the inducing feature of the legislative scheme under
which the reorganization occurred, the whole must fall to-
gether; that is, the general statute as regards the corporation
of mutual insurance companies must be deemed to have been
incorporated in the act of 1903 for a complete scheme of
reincorporation of mutual insurance companies. Clearly the
legislature would not have used the general law for the in-
corporation of insurance companies as a means of turning
existing mutual into stock companies as it did without the
enabling act of 1903. That law must be deemed the induc-
ing provision and so the whole scheme falls under constitu-
tional limitations: Slauson v. Racine, 13 Wis. 398; State v.
Dousman, 28 Wis. 541 ; State v. Sauk Co., 62 Wis. 376, 22 N.
W. 572; Gilbert-Arnold L. Co. v. City of Superior, 91 Wis.
353, 64 N. W. 999.
The foregoing results in the respondent company having
no basis for corporate existence but the unconstitutional law,
which is not sufficient to support even a de facto corporation.
The latter can e.xist only where there is a valid law under
which the corporation might have been created de jure. It
is in the latter situation that the existence of a corporation
can only be inquired into by a direct action in the name of
the .state: Evenson v. Ellingson, 67 Wis. 634, 646, 31 N. W.
*•*" 342; In re Incorporation of North Milwankoe, 93 Wi.s.
616, 67 N. W. 1033, 33 L. K. A. 638; Gilkey v. How, 105 Wis.
41, 81 N. W. 120, 49 L. R. A. 483; Winneconne v. Wirine-
conne, 111 Wi.s. 10, Sii X. W. 589; Methodist E. U. Church v.
Pickett, 19 N. Y. 482; Vauucinuu v. Young, 02 N. J. L. 403,
20 Atl. 53.
1048 American State Reports, Vol. 115. [Wisconsin,
It is proper and perhaps best to observe, in passing, that
upon the facts alleged the title to the business and assets for-
merly possessed by the Germantown Farmers' Mutual In-
surance Company is still in such company entirely unim-
paired by the reorganization law and the acts which occurred
under it. The business conducted by its pretended successor,
the Germantown Insurance Company, must be regarded as a
mere continuation of its business with all that such situation
means.
If it were a fact in the case before us that the Germantown
Insurance Company was a valid corporation, it would make
no difference with plaintiff's cause of action if the fact re-
mained that it had obtained wrongful possession of the assets
of the Farmers' Company and the officers of the latter
would not take the proper steps to remedy the mischief. This
is not an action necessarily depending on whether the wrong-
doer was a valid corporation or not. It is not an action to in-
quire into corporate existence. It is one to recover into the
possession of the Germantown Farmers' Mutual Insurance
Company its property in specie, or the equivalent thereof,
which has been, as is alleged, wrongfully taken from it. That
might be accomplished whether the new company was or was
not a corporation de jure or de facto. It is only a mere in-
cident of the action that it is held to be neither.
Some other questions of minor importance are discussed in
the briefs of counsel. They are included, it is thought, in
those heretofore treated, or are rendered immaterial by what
has been said. The discussion of the ground of demurrer that
the complaint is insufficient to state a cause of "action, to
which this opinion has been mainly directed, really covers
^^'' the charge of want of jurisdiction and want of capacity
to sue. The cause of action of the Farmers' Company is
grounded on the wrongful conduct of the individual defend-
ants, which was made fruitful by means of the unconstitu-
tional law under which the new company was organized, in
that it resulted in depriving the Farmers' Company of its
property. The cause of action of appellant, standing for
himself and others, is grounded on his pecuniary interest in
the enforcement of the rights of his company. His right is
equitable, and his remedy necessarily so. On that account,
and since there is no legal remedy for him, the indirect in-
jury is of sufficient and substantial character to be a proper
Jan. 1906.] Huber v. M.^JlTIN. 1049
subject for redress. The jurisdiction of the subject matter
is grounded on the necessary uses of equity, and the insuffi-
cient basis for the corporate existence of the new organiza-
tion, if that were a necessary fact. Plaintiff's legal capacity
to sue is based on the foregoing situation and the fact that
without such capacity the wrong complained of would go un-
redressed, the attitude of those who only could directly act
for the Farmers' company being hostile to such action. The
challenge to the jurisdiction of the person and to improper
joinder of causes of action appears not to be pressed here,
and to be so obviously without merit as not to require more
than this passing mention.
"We apprehend that we have sufficiently covered the whole
subject presented for consideration as to render it useless to
proceed further.
By the COURT. The order appealed from is reversed.
Respondents moved for a rehearing.
Lewis & Roach, attorneys, and Quarles, Spence & Qnarles,
of counsel, for the appellant.
Sawyer & Sawyer and G. A. Kuechenmeister, for the re-
spondents.
^^^ The following opinion was filed March 20, 1906:
MARSHALL, J. All points suggested to secure a modifi-
cation of the former decision have received due attention.
The argument in favor of the motion in that regard is suffi-
ciently headed "Explanatory." Why counsel regarded an
explanation of their position necessary is not perceived.
Counsel are always presumed here to present in good faith
the cause of their client as they find it. They are not sup-
posed, in any case, to be otherwise concerned. It was not
thought here, prior to the explanation, that the situation was
difficult in this instance than commonly. Any case after
presentation here must necessarily be disposed of as it seems
to deserve. If it is a bad one, such disposition is liable to
indicate that character with more or less clearness, yet with-
out any refiection whatever on counsel for merely having per-
formed professional duties, giving the best reasons occurring
to them, after a diligent study of the sul)ject, and referring
to authorities within their reach, by them supposed to apply,
1050 American State Reports, Vol. 115. [Wisconsin,
to aid the court. "We may well credit counsel for respondents
with having distinguished themselves in that regard. They
probably called to our attention, and in a helpful manner,
every feature of the law of 1903 affecting favorably its
validity. With like probability they invoked every legal
principle bearing upon the matter, citing an array of author-
ity for examination, evincing the most commendable in-
dustry. The case of respondents did not suffer for want of
any aid counsel could have afforded the court.
What is said in the discussion in support of a decision is
directed wholly to the case as it appears. That is treated in
a wholly impersonal way. It may reflect on the party re-
sponsible for the situation, but not on the attorney who
merely performs his professional duty. It does not seem,
here, that any explanation whatever was required from coun-
sel who so ably presented the case at the bar, or the other dis-
tinguished **^ counsel who was absent, both of whom are held
in the highest regard.
What was formerly said as to that part of the decision
holding that the so-called reorganized company is not even a
de facto corporation was grounded upon v^ry familiar prin-
ciples. The result was inevitable. It cannot be changed.
If it were true that the decision in that regard will result in
the hardships suggested, as to leaving a large number of policy
contracts in a state of uncertain validity, and a large amount
of securities, taken in the name of the new organization, with
an uncertain status, it would not change the law. If one un-
lawfully takes the money of another and loans it to a third
person presumed to know the facts, it is hardly a good answer
to a claim for restoration that the vindication of the right of
such other will embarrass the wrongdoer and those who have
dealt with him, on account of the former having confused his
money with that of such other and loaned the two in combi-
nation to the third person.
It is thought that the former opinion renders it plain that
the business of the so-called new corporation was in effect a
mere continuance of that of the Farmers' company under a
somewhat new name. The so-called new policy-holders, and
the so-called old policy-holders whose contracts have not ex-
pired, are policy-holders with equal standing in the German-
town Farmers' Mutual Insurance Company. The last offi-
cers elected of such company are still its officers, and will nee-
Jan. 1906.] Hubeb v. Martin. 1051
essarily continue to be such until their successors shall have
been duly elected and qualified according to the charter.
Whatever titles there are outstanding as to tangible or intangi-
ble things, belonging to the Farmers' company are held merely
in trust therefor by the collection of individuals who have as-
sumed another name. The whole beneficial interest in such
property is in the Farmers' company. It has a right to be
immediately clothed with the legal title thereto, so far as it
is not passessed thereof, and to that extent the trustees of the
*^^ same are fully competent, without delay, to make the
proper conveyance. Facing the situation just as it is, with-
out thought of how to avoid the effect, it is not perceived why
there is any physical or legal difficulty in promptly restoring
the former situation, preserving reasonably the equities of
the promoters of the new enterprise growing out of their
money having been paid into the common fund for so-called
stock.
We note what counsel say as to persons holding policies
issued in the name of the so-called new company not having
participated in, and so perhaps not being bound by, the ad-
judication that such company is not a corporation in any
sense and may hold it to be otherwise on the doctrine of es-
toppel. We are not unmindful of the rule in that regard and
that in some circumstances it extends beyond corporations
de facto and includes such cases as that of a collection of per-
sons falsely assuming to be a corporation, when there is no
semblance of corporate existence: Citizens' Bank v. Jones,
117 Wis. 446, 94 N. W. 329; Clausen v. Head, 110 Wis. 405,
85 N. W. 1028. It does not apply, however, where the parties
knew, or ought to have known, the true situation, for then
the essential element, the reasonable belief in the corporate
existence and reasonable reliance thereon, does not exist.
Here all parties must be presumed, conclusively, to have
known that the ostensible corporation was not a corporation at
all, but was a mere usurping repre.sentative of the Farmers'
company.
So it will be found by looking at the matter rightly that
the supposed dilHiculties in the way of a restoration of the
rightful condition of things as to the Fanners' company, are
but specters— merely coiitoniplatc*!. they may grow; ap-
proached with one purpose, they will men'ly recede; ap-
proached with a firm deternii nation to accept the inevitable
1052 American State Reports, Vol. 115, [Wisconsin,
situation, they will disappear as the dew before the morning
sun.
By the COURT. The motion is denied.
The Effect of the Transfer or sale of all the property or assets of a
corporation is discussed in the note to Tanner v. Lindoll Ry. Co., 103
Am. St. Rep. 548-572; and the effect of the consolidation of corpora-
tions is considered in the note to Morrison v. American Snuff Co.,
89 Am. St. Rep. 604, 656.
Actions by Stockholders on behalf of the corporation are discussed
in the note to Johns v. McLester, 97 Am. St. Rep. 29-52.
JACOBSON V. BENTZLER.
[127 Wis. 566, 107 N. W. 7.]
PAYMENT. — The Acceptance of a Check is in the nature of
a conditional payment, which becomes complete when the amount
due on it is actually paid. Such payment relates back to the time
of the delivery of the check, (p. 1054.)
SUNDAY CONTRACT — Subsequent Completion of Transaction.
Where an agreement for the loan of money is made on Sunday, in-
cluding the signing of the contract, and the delivery of a check for
the amount of the loan, the transaction is not relieved from the con-
demnation of the Sunday law by the fact that the check is not paid
and the contract not acknowledged nor recorded until a later day.
(p. 1054.)
SUNDAY CONTRACT— Loan of Money— Ratification.— The
loaning of money is within the meaning of a statute prohibiting the
doing of business on the first day of the week, and a contract there-
for is void and not susceptible of ratification, (p. 1054.)
SUNDAY CONTRACT — Manner of Reaching Invalidity. — In
an action to enforce a loan made on Sunday, the fact that the de-
fendant in his answer did not assert the invalidity of the contract
does not preclude him from insisting that the agreement cannot be
enforced, (p. 1054.)
SUNDAY CONTRACT. — ^Upon the Grounds of Public Policy,
all the parties to a Sunday contract are deemed equally guilty, and
are denied the usual remedies of the law for its enforcement, (p.
3054.)
J. A. Eggen, for the appellant.
McElroy, Eschweiler & Wetzler, for the respondent.
^^'^ SIEBECKER, J. Plaintiff alleges that he loaned and
advanced defendant the sum of one thousand dollars and
that defendant agreed to repay the sum on demand. He
Jan. 1906.] Jacobson v. Bentzler, 1053
claims that demand has been made and that no part of the
sum has been paid. Defendant denies that a loan was ever
made, and alleges that he conveyed certain real estate to the
plaintiff in consideration of the one thousand dollars. He
further alleges that the deed was executed and delivered upon
an express agreement in writing that upon repayment of the
sum, and provided he had paid the taxes levied on the prop-
erty, he might demand a reconveyance, but that in case of
failure to pay such taxes then the contract was to be null and
void. He alleges that he has not paid the taxes and that the
right to demand a reconveyance no longer exists, and he as-
serts that plaintiff has not offered to reconvey. The evidence
on the trial shows that all the transactions involved took
place on Sunday, including the delivery of the check for one
thousand dollars, the signing and delivery of the written
agreement, and the delivery of the deed. The only act not
positively shown to have taken place on Sunday refers to the
acknowledgment and the recording of the deed, and this is
left in uncertainty by the statements of the plaintiff. At the
conclusion of plaintiff's evidence defendant's motion for a
nonsuit ^^^ was granted by the court. A motion for a new
trial was denied, and judgment for costs was rendered for
defendant. This is an appeal from such judgment.
The evidence of the plaintiff shows that the transactions
on which relief is sought took place between the parties on
Sunday. It is undisputed that plaintiff on this day delivered
to and that defendant received from him a check for one
thousand dollars; that the written agreements expressing the
conditions of the loan were executed and delivered on Snn-
day; and that the deed, which had been signed by the grantor,
was handed to plaintiff on the same day. The only part of
the transaction which occurred thereafter was that the defend-
ant had the deed acknowledged and left for record, with direc-
tions to the register of deeds to mail it to the plaintiff. The
time of payment of the check and the acknowledgment and
recording of the deed are relied on jus showing that the alleged
loan was not made on Sunday: Firstly, upon the ground that
the alleged loan to defendant was not made until the check
had been paid at the bank; and, secondly, it is claimed that
the loan was not made iintil the deed was acknowledged, re-
corded, and transmitted by mail to plaintiff, and that these
acts were es.sential to the delivery of the deed and were neces-
1054 American State Reports, Vol. 115, [Wisconsin,
sary steps to give legal efficacy to the transaction. As to the
first point it seems clear that acceptance of a check on a bank
is in the nature of a conditional pa^^raent, which becomes com-
I)lete when accepted and when the amount due on it is ac-
tually paid, and that such payment relates back to the time of
its delivery: 22 Am. & Eng. Ency. of Law, 2d ed., 569; 2
Daniel on Negotiable Instruments, 5th ed., sec. 1623. Under
the circumstances shown, the fact that defendant received the
money on the check after Sunday does not relieve the trans-
action from '^^^ the operation of the Sunday law. The same
is true with respect to the acknowledgment, the recording,
and the transmi.ssion of the deed. These were mere incidents
to the transaction which constituted the making of the loan.
The alleged obligation for the repayment of the money loaned
arises out of what took place on Sunday.
Plaintiff is not relieved from difficulty by the claim that
the acts done after Sunday were in the nature of a ratification
of that which preceded, for it has been held that the loaning
of money on Sunday is within the meaning of the statute pro-
hibiting the doing of business on the first day of the week.
This makes the contract void and not susceptible of ratifica-
tion: Troewert v. Decker, 51 Wis. 46, 37 Am. Rep. 808, 8 N.
W. 26 ; Brown v. Gates, 120 Wis. 349, 97 N. W. 221, 98 N.
W. 205, and cases cited; Vinz v. Beatty, 61 Wis. 645, 21 N.
W. 787; Sherry v. Madler, 123 Wis. 621, 101 N. W. 1095.
The fact that defendant in his answer did not assert the in-
validity of the contract upon the grounds now advanced does
not preclude him from insisting that the agreement oannot be
enforced. Upon the ground of public policy, all the parties
to such an agreement are deemed equally guilty and are de-
nied the usual remedies of the law for its enforcement : Pear-
son V. Kelly, 122 Wis. 660, 100 N. W. 1064.
The judgment dismissing the action was properly awarded.
By the COURT. Judgment affirmed.
Sunday Contracts and their ratification are discussed in the note to
Henry Christian B. & L. Assn. v. Walton, 59 Am. St. Eep. 641-644.
In North Carolina a contract to convey land entered into on Sunday
is valid: Rodman v. Robinson, 134 N. C. 503, 101 Am. St. Rep. 877.
In Maryland contracts made on Sunday, if executory, cannot be en-
forced. If they are executed, however, they cannot be avoided:
Rickards v. Rickards, 98 .Md. 136, 103 Am. St. Rep. 393. In Michi-
gan a Sunday contract cannot be ratified: Acme Elec. etc. Co. v.
Van Derbeck, 127 Mich. 341, 89 Am. St. Rep. 341.
Jan. '06.] Abrams v. United States Fidelity etc. Co. 1055
The Acceptance of a Check or Note is not generally regarded as
payment of a precedent debt: Delaware County Ins. Co. v. Hnser,
199 Pa. 17, 85 Am. St. Rep. 763; Burrows v. State, 137 Ind. 474, 45
Am. St. Kep. 210; note to Meyer v. Green, 69 Am. St. Kep. 340.
ABRAMS V. UNITED STATES FIDELITY AND GUAR-
ANTY COMPANY.
[127 Wis. 579, 106 N. W. 1091.]
GUARDIAN— Duty to Invest Ward's Funds. — It is the duty
of a guardian, on receiving the funds of his ward, to invest so much
of them as is not required for immediate and necessary use, as soon
as he can do so with reasonable diligence, (p. 1058.)
GUARDIAN — Employment of Attorney to Collect and Invest
Funds. — A guardian may employ attorneys or agents to reduce the
estate of his ward to possession and to protect it, but when once
in his hands his personal duty to dispose of and manage it begins,
which cannot be delegated. Therefore, if a guardian employs an at-
torney to collect the estate, and the funds collected are represented
by checks or drafts payable to the guardian, he is accountable there-
for where he indorses and hands them back to the attorney for in-
vestment, and the latter defaults, (p. 1059.)
GUARDIAN— Interest of Ward's Funds. — The time from
which a guardian should be charged with interest on the funds of
his ward, lost through his negligence in investing them, is a matter
resting in the sound 'discretion of the trial court in view of all the
facts, (pp. 1059, 1060.)
GUARDIAN — Allowance for Support of Ward. — Wliere a guard-
ian has voluntarily stood in loco parentis to his wards, and has
never intended to charge them for lodging or services, neither the
guardian nor his surety is entitled to any credit therefor, (p. 10«)0.)
GUXRDIAN. — In an Accounting by a Guardian, annual rests
should V>e made, the amounts expended for the precfding year de-
ducted, and interest computed on the balance up to the mxt annual
rest. (p. 1060.)
GUARDIAN— Costs. — In an Action by a guardian to compel
his predecessor to account, it is proper to allow costs against a surety
who appears in and defends the action, (p. 1060.)
Thompson, Thompson & Pinkerton, for the appellant.
Carl D. Jackson, for the respondent.
B«o WINSLOW. J. This is a proceeding to settle the final
account of Sarah Perry as the },'\i;ir(lian of the estate of cer-
tain minors. The appellant was a sun'ty upon the guardian's
bond, and was ^**^ made a party to the proceeding's in the
county court, and appealed from the order of that court set-
1056 American State Reports, Vol. 115. [Wisconsin,
tling the guardian's account to the circuit court, where the
matter was again tried and the account settled, and from that
judgment the surety appeals to this court. There was lit-
tle substantial dispute as to the facts. It appeared that Her-
bert D. Avery and his wife, Ida, resided in Colorado, where
Ida died December 4, 1899, leaving four small children,
Bessie, Perry, Alois and Marie, the minors in question, and
about December 20, 1899, Sarah Perry, a sister of the de-
ceased, went to Colorado and brought the children to her
home in Winnebago county, in this state, to live with her, un-
der an arrangement with the father that the father was to
pay what he could for their keeping; that the father after-
ward sent on various sums for this purpose, amounting to
$330 in all; that the father was killed in a railroad acci-
dent on the Colorado and Southern Railway October 18, 1900,
leaving the four children as his only heirs at law ; that Sarah
Perry was appointed guardian of the persons and estate of
the minors by the county court of Winnebago county Decem-
ber 4, 1900, and gave a guardian 's bond in the sum of $8,000,
with the appellant as surety; that the guardian at once em-
ployed one Herbert L. Sweet, then an attorney of good stand-
ing in Oshkosh, as her attorney; that at the time of Avery's
death he had two policies of life insurance, one in the In-
dependent Order of Foresters, of $3,000, and one in the
Ancient Order of United Workmen, of $2,000, both being in
favor of his heirs ; that he also left some property jn Colorado,
which was afterward administered upon, the net amount
realized being $482.98 ; that there was also an unsettled claim
against the railroad company for the death of said Herbert;
that the mother, Ida, left forty acres of land in Winnebago
county, title to which passed to the minors ; that Miss Perry,
as guardian, put the various claims into Sweet's hands for
collection, and that under authority from the county court
of Winnebago county a settlement '^^^ was arranged by
Sweet with the railroad company of the death claim on the
basis of the payment of $1,250. Miss Perry, as guardian,
signed a receipt and release for this claim, and Sweet sent
the same to the railroad company, and a check for $1,250 was
returned to Sweet. There was no direct evidence as to
whether this check was payable to the guardian or to Sweet.
The court found, however, that it was payable to Miss Perry
and was indorsed by her and turned over to Sweet. The
Jan. '06.] Abrams v. United States Fidelity etc. Co. 1057
claim against the Independent Order of Foresters was also
collected by Sweet, the draft being sent to him, payable to
the order of Miss Perry, who indorsed the draft and signed
the receipt and returned both draft and receipt to Sweet.
The guardian testified, and the court found, that she left
these drafts in the hands of Mr. Sweet for investment, and
that the same course was pursued with the sum of $482.98
collected from the administration of Avery's estate in Colo-
rado. It appeared without dispute that Sweet immediately
deposited the drafts in each case to his own credit in the
bank. The sum of $2,000 from the Ancient Order of United
Workmen was paid to Miss Perry in cash, and she kept
$1,000 thereof, and took the other $1,000 to Sweet and left
it with him to invest. Sweet returned to Miss Perry $200
out of the $1,250 received from the railroad company, but
did not return any other sums. He claimed that he had in-
vested the money in real estate mortgages, and to deceive Miss
Perry made some payments to her of sums which he claimed
to have received as interest on the investment, but he never
turjied over to her any securities, and in fact used the moneys
himself as soon as he received them, and left the city in
the spring or summer of 1902, leaving many thousand dollars
of liabilities, including his liability to the guardian. INIiss
Perry made no effort at any time by suit to obtain the moneys
or the securities from Sweet. She made no charge at any time
against the infants for care, lodging, or food, but kept ac-
curate account of the moneys expended for clothing, school
^^'"^ books, and other incidentals. She testified that she never
intended to charge them for care or lodging, and the court
found that she stood in the relation of parent to them. In the
account, as settled by the circuit court, the guardian was
charged with the sums received from the insurance companies,
the railroad company, and from the estate in .Colorado, with
interest on such sums at six per cent, commencing two months
from the receipt thereof upon part of the sums, and three
months upon the remainder. She was also charged with the
payments made to her by Sweet as interest, and with $108
received from the forty acre farm as rent. She was credited
with the sums which she paid for taxes and repairs upon the
real estate, also, with the sums paid for clothing and inci-
dentals paid for the minors, and with the preniiunus paid for
her bond. She was allowed $50 as a reasonable amount for
Am. St. Rep., Vol. 115—67
1058 American State Reports, Vol. 115. [Wisconsin,
legal services, and $1,450 for food furnished to the minors
from December 20, 1899, to February 20, 1904, less $330 re-
ceived from the father. She resigned as guardian of the es-
tate of the minors February 20, 1904, and the respondent
Abrams was appointed to that trust, and this accounting was
thereafter had.
The guardian was a trustee of the funds of her wards.
It was her duty, on receiving such funds, to keep them for
her wards, and to invest so much of them as was not required
for immediate and necessary use, as soon as she could do so
with reasonable diligence. She could employ an attorney to
collect them, and, if she exercised reasonable care and pru-
dence in the choice of an attorney, doubtless she would be
protected froni losses occurring by the fraud or negligence
of the attorney in the course of his duty as collecting agent;
but when she had received the funds by draft or in cash
**** the functions of the attorney for collection ended, and if
she then placed the fund in his hands to invest he became
simply an agent to whom she had attempted to delegate her
duties as trustee. Mr. Lewin, in his work on Trusts (volume
1, page 252), says: "Trustees who take on themselves the
management of property for the benefit of others have no
right to shift their duty on other persons; and if they do so
they remain subject to the responsibility'' toward their cestuis
que trustent for whom they have undertaken the duty. If a
trustee, therefore, confide the application of the trust fund
to the care of another, whether a stranger, or his own attor-
ney or solicitor, or even cotrustee or coexecutor, he will be
held personally responsible for any loss that may result,"
This principle is firmly established. It does not mean that
a trustee may not employ a broker or attorney to do those
things which in the ordinary course of business such agents
would be employed to do, but simply that he cannot delegate
to others the doing of those things which he is in duty bound
to do himself. The collection of claims against others in-
volving actions at law or negotiations for settlement may well
be intrusted to an attorney. The guardian has not under-
taken to act as an attorney, but the care and investment of
the funds which reach his hands is one of the very things
which the guardian has agreed to attend to, and if he dele-
gates this duty to another, whether he be an attorney or a lay-
Jan. '06.] Abrams v. United States Fidelity etc. Co. 1059
man, he makes such other his personal agent and is responsible
for his acts. A guardian's duty, by the terms of his appoint-
ment, is "to dispose of and manage" his ward's estate accord-
ing to law, and such is the tenor of his bond. He may employ
attorneys or agents according to the usual course of business
to reduce the estate to possession and to protect it, but when
once in his hands his personal duty to dispose of and manage
it begins, and this duty is not to be delegated.
These considerations really dispose of the most serious
question raised by the appellant in this case, namely, the
'^**^ question whether the guardian should be charged with the
sums received from the railroad company, the Order of For-
esters, and the administrator of Avery's estate in Colorado.
The claim is that these sums never, in fact, came to the hands
of the guardian, but were squandered by the attorney in the
process of collection. The court found, upon sufficient evi-
dence, that these amounts were represented by bank drafts or
cheeks payable to the order of the guardian, which came to the
guardian through the attorney, and that the guardian in-
dorsed them and handed them back to the attorney, to be in-
vested by him for her as guardian. It must be held that,
when the draft came to her hands, she came into possession of
so much of her ward's estate. Her personal duty to manage
that estate then began. It is claimed that interest should not
have been charged upon the funds which came to the guard-
ian's hands prior to the expiration of six months from the time
of their receipt. This is a matter resting in the sound dis-
cretion of the trial court in view of all the facts. The court
allowed about two months upon a part of the funds, and three
months upon the balance, during which time no interest was
charged. The fact being that the giuirdian absolutely neg-
lected her duties and made no attempt to invest the funds, we
cannot say that there was any abuse of discretion : In re
Thurston, 57 Wis. 104, 15 N. W. 12G. Interest was charged on
the sum of $482.98, received from the estate of Herbert D.
Avery, from April 1, 11)01, and it is claimed that the testi-
mony shows that this amount was not actually received until
November, 1901. There wjus certainly testimony to this ef-
fect, but by the stipulation of facts in the case it was ex-
pressly stipulated that the sum wjis received about February
1, 1901, and that no testimony should be received in contlict
1060 American State Reports, Vol. 115. [Wisconsin,
with the stipulation. As no application was made to the
trial court by the appellant to be relieved from the stipula-
tion, it must be held to control.
It is contended that the court should have allowed the
580 guardian a reasonable sum for lodging of the children and
for her personal services in their care. The fact was that she
voluntarily stood in loco parentis to these children and never
intended to charge them anything for lodging or services.
Under these circumstances neither the guardian nor the surety
has any right to such credit: Hutson v. Jenson, 110 "Wis. 26,
85 N. W. 689. The court allowed the guardian interest on
her disbursements at six per cent per annum from a period
midway between the time of her appointment and the time of
her resignation. This was not the proper plan of accounting.
Annual rests should have been made, and the amounts ex-
pended for the preceding year deducted, and interest com-
puted on the balance up to the next annual rest ; but, as the re-
sult of the method adopted by the court is more favorable to
the appellant, there was no prejudicial error: In re Thurs-
ton, 57 Wis. 104, 15 N. W. 126. The allowance of costs in
the circuit court is complained of, but no reason is perceived
why such action was not strictly right.
By the COURT. Judgment affirmed.
The Power and Duty of Guardians in the matter of invpsting their
ward's funds are considered in the note to Schmidt v. Shaver, 89
Am. St. Eep. 292.
IN RE GERTSEN'S WILL.
[127 Wis. 602, 106 N. W. 1096.]
FOREIGN WILL. — When a Will has Been Eegularly Probated
in tlie state of the domicile of the testator by a court of competent
jurisdiction, a court of another state wherein the deceased left prop-
erty cannot refuse the will probate, because some of the essentials
of a valid original probate in the latter state are wanting, if the
statutes of that state declare that "the will shall have the same force
and effect as if it had been originally proved and allowed in the
same court." (pp. 1061, 1062.)
WILL CONTEST — ^Attorneys' Tees. — Under the statute of
Wisconsin providing that "any court of record, in contests arising
therein, upon application for the probate of any will, in its discre-
tion, may allow to the contestant, if successful in the circuit court;;
Jan. 1906.] In re Gertsen's Will. 1061
a reasonable attorney's fee out of said estate for services in such
contest in said circuit court," the first court mentioned refers to the
one having primary jurisdiction of the probate of wills — the count/
court — as having authority to allow attorney fees. (p. 1062.)
Bushnell, Moses & Watkins, for the appellant.
George B. Clementson, for the respondent.
«»3 MARSHALL, J. Emer Gertsen died testate at her
home in Cheyenne county, Nebraska, leaving property there
and in Grant county, Wisconsin. She left a husband, who
was her sole beneficiary, and two grandchildren, Albert and
Charles Edwards, who were interested in her estate contin-
gent upon the validity of the will. They were never resi-
dents of Nebraska. Proceedings were duly and successfully
had in the home state to admit the will to probate, construc-
tive notice only being given to absent interested parties. The
minors were not represented by guardian ad litem or other-
wise. In due time said beneficiary applied for- probate of
the will in Grant county under section 3790 of the Statutes
of 1898. All proceedings required thereby, essential to the
jurisdiction of the court, were had, including appointment
of a guardian ad litem for such minors. On the hearing an
exemplified copy of the will and the record admitting it to
probate as aforesaid were produced to the court. The applica-
tion was denied. On appeal to the circuit court the judg-
ment of the county court was affirmed, upon the sole ground
that no guardian ad litem was appointed to represent the
minors in the former proceeding. Judgment was entered ac-
cordingly, and that seventy-five dollars be paid the contest-
ant's attorneys out of the Emer Gertsen estate.
****^ The judgment cannot be affirmed without a judicial re-
peal of section 3790 of the statutes of 1898. That statute is
plain; it is constitutional; it is mandatory. All its provisions
up to the decision of the court complained of were fully com-
plied with. Then, whereas the statute says "the will shall
liave the same force and effect as if it had been originally
proved and allowed in the same court," the learned court said
otherwise, and such is the effect of the judgment before us.
The mistake was made, it seems, by looking to the essentials
of a valid original pr(>l)ate of a will in this state, instead of
such essentials in Nebraska. The language of the statute is
not to the effect that if it appears that the former probate was
10G2 American State Reports, Vol. 115. [Wisconsin,
according to the laws of this state the will shall be admitted
in the secondary proceeding with like effect as if they were
primary : to the contrary it says : " If on the hearing it shall
appear to the court that the order or decree admitting such
will to probate was made by a court of competent jurisdic-
tion, .... the will shall have the same force and effect as
if it had been originally proved and allowed in the same
court. ' '
There is no controversy but what the foreign probate was
made by a court of competent jurisdiction. The exemplified
copy of the proceedings in that regard is regular in every re-
spect and that is not disputed.
We are unable to see any warrant for the award of seventy-
five dollars to the contestant for attorney's fees, and the di-
rection for its payment out of the estate of Emer Gertsen. Re-
spondent's counsel points to chapter 397 of the laws of 1901, to
sustain that part of the judgment. It seems the learned court
gathered an erroneous idea therefrom. It says: "Any court
of record, in contests arising therein, upon application for
the probate of any will, in its discretion, may .... allow to
the contestant if successful in the circuit court a reasonable
attorney's fee out of said estate for services in such con-
test in said circuit court. ' '
605 T}jg flj.^^ court mentioned refers unmistakably to the one
having primary jurisdiction of the probate of wills. It is the
■court wherein the contest arises, the one of first instance — the
<!ounty court — that is given authority to allow the attorney's
fees and direct the payment thereof out of the estate.
By the COURT. The judgment appealed from is reversed,
and the cause remanded, with directions to reverse the judg-
ment or order of the county court, and to render judgment
admitting the will to probate, with costs in favor of the pro-
ponent, and to remand the matter to the county court with di-
rections to proceed therein according to law.
The Probate of Foreign Wills is considered in the recent notes t^
Estate of Clark, 113 Am. St. Eep. 211; State v. District Court, 34
Mont. 96, ante, p. 518.
Jan. 1906,] Disconto Gesellschaft v. Umdreit. 10u3
DISCONTO GESELLSCHAFT v. miBREIT.
[127 Wis. 651, 106 N. W. 821.]
ALIENS — Right to Maintain Action. — All foreigners, sui juris,
who are not specially disabled by the law of the place where the suit
is brought may there maintain suits to vindicate their rights and
redress their wrongs, (p. 10C6.)
ALIENS — Eight to Maintain Action — If a suit between two
nonresident aliens upon a foreign cause of action can be maintained
here, not as a matter of right, but only on principles of comity, then
auxiliary actions or equitable proceedings in the nature of attach-
ment and execution fall under the same rule, notwithstanding the
fact that residents of the state may be parties to the auxiliary actions
as stakeholders or claimants of the impounded property, (p. 1067.)
ALIENS — Bight to Maintain Action. — An action by one non-
resident alien against another one, to redress a wrong committed
without the state, is not maintainable here as a matter of right, but
only upon principles of comity, (p. 1068.)
COMITY — Its Definition and Principles. — Comity is defined as
courtesy, a disposition to accommodate. By the rules of comity be-
tween nations, the courts of one state will voluntarily enforce the
laws of a friendly state or nation when, by such enforcement, they
will not violate their own public policy or laws or injuriously affect the
interests of their own state or of their own citizens, (p. 1070.)
ALIEN — Eight to Maintain Action to Prejudice of Eesident
Creditors. — Comity does not allow a foreigner to seize and carry
away property within the jurisdiction of our courts when a resident
creditor stands also at the bar with his judgment and provisional
lien, and thus force such resident creditor to go to a foreign country
to collect his debt. It makes no difference that his claim may have
accrued after that of the foreign creditor; the question is not deter-
mined by priority in point of time, but by the situation at the time
when the court is called upon to decide which creditor shall receive
its aid. (p. 1074.)
ALIEN — Agent of Foreign Trustee in Bankruptcy. — To allow
an alien, here nominally in his character as a crcilitor, but really hh
the mere agent of a foreign trustee in bankruptcy, to impound prop-
erty by process of garnishment, is to set at naught the policy of our
own law to the effect tlmt a foreign trustee or receiver in involun-
tary bankruptcy proceedings obtains no title to the debtor's prop-
erty within this state, (p. 107").)
ALIEN — Bight to Maintain Action to Prejudice of Bcsidenv
Creditors. — A nonresident alien may not sue another alien in the
courts of this state for a tort committed in a foreign country, ana
oy means of garnishment or other provisional remedy impound prop-
erty of the defendant in this state, when one of our own citizens iit
a creditor of the defendant and has taken subsequent legal proceeu-
ings to impound such property for the payment of his claim, (p.
1075.)
GABNISHMENT. — No Lien on a Fund represented only by u
negotiable instrument is obtained by an attempted garnishmcDt. (p.
1075.)
1064 American State Reports, Vol. 115. [Wisconsin,
____, •
JURISDICTION. — In an Action Against a Nonresident, where
there is only substituted service of process, thp court acquires nu
jurisdiction for mere purposes of personal adjudication, but only tu
enter a judgment with reference to or to be enforced upon propert>
■within the state, or a judgment concerning the status of one of our
own citizens, (p. 1076.)
August C. Umbreit, in propria persona, Joseph B. Doe and
Hoyt, Doe, Umbreit & Olwell, for the appellant.
Winkler, Flanders, Smith, Bottum & Fawsett, for the re-
spondent.
««^ WINSLOW, J. The two actions above named, the
first by way of garnishment and the second by way of credi-
tor's bill to reach nonleviable assets, were consolidated for
the purposes of trial, and from a judgment in favor of the
plaintiff in each action the defendant Umbreit appeals. The
facts in the cases were not in dispute, and were substantially
as follows: The plaintiff is a banking corporation of the
German empire, having its principal banking-house at Berlin.
Gerhard Terlinden, the defendant in the main action, was
and is a subject of the German empire. In July, 1901, Ter-
linden absconded from Germany to this country, and was ar-
rested at Milwaukee, August 16, 1901, as a fugitive from jus-
tice in extradition proceedings, which proceedings afterward
resulted in his being extradited to Germany. In May, 1901,
Terlinden had committed torts in Germany, by which the
plaintiff bank had sustained damages amounting to nearly
$100,000, and on August 17, 1901, the plaintiff commenced
an action by personal service of a summons upon Terlinden
in the Milwaukee circuit court to recover its damages for
said torts, and at the same time garnished the First National
Bank and the Marine National Bank of said city. The
First National Bank answered, admitting the previous de-
posit by Terlinden of two sums aggregating $6,420. The
Marine National Bank answered, admitting the previous de-
posit by him of $5,000, for which it had issued to him a
negotiable certificate of deposit in the usual form, which had
not been returned. February 19, 1904, the plaintiff recovered
judgment in the main action against Terlinden for $94,105.11.
The appellant. Umbreit is, and was at all times named, a
citizen and resident of Wisconsin, and rendered services for
Terlinden beginning August 16, 1901, and ending February
Jan. 1906.] Disconto Gesellschaft v. Umbreit. 1065
1, 1903, and, on March ^'^ 21, 1904, commenced an action
against Terlinden to recover for such services, in which ac-
tion he obtained service by publication only. At the time of
the commencement of such action he also garnished the de-
fendants First National Bank and Marine National Bank.
Umbreit obtained judgment against Terlinden in his main
action by default on June 11, 1904, for $7,500 damages;
thereupon he intervened in the plaintiff's garnishee action
against the First National Bank, and claimed that his lien by
garnishment was superior to that of the plaintiff. April 1,
1904, the plaintiff brought an action in equity in the nature
of a creditors' bill against Terlinden, the Marine National
Bank, John C. Ames, and Umbreit, the object of the action
being to aid its lien by garnishment against the Marine Bank,
and it demanded judgment that the $5,000 certificate of de-
posit, which was in the possession of the defendant Ames,
not indorsed, be subjected to the lien of its judgment against
Terlinden, and that the claims of Umbreit and the other d'e-
fendants be cut off. In this action a temporary injunction,
preventing the transfer or payment of the certificate of de-
posit, was issued and served upon the defendants. The de-
fendant Ames surrendered the certificate into court and dis-
claimed title thereto; the defendant Umbreit answered, set-
ting up his own judgment and garnishment, and claiming
that his lien thereby was superior to that of the plaintiff. On
or about July 27, 1901, proceedings in bankruptcy were in-
stituted in Germany against Terlinden, and one Hecking was
appointed trustee of the estate. On or about August 20. 1901.
the plaintiff presented its claim to said trustee in bankruptcy,
being the same claim upon which the main action was brought.
The main action was commenced with the approval of the
trustee, Hecking, and after its commencement the phiintiff
agreed with Hecking that all moneys he should recover in the
action should form part of the estate in bankruptcy and be
handed over to trustee Hecking. *"*** It aj)pears that the
German bankruptcy act contains the following provision (sec.
14) : "Pending the bankruptcy proceeding neither the a^wets
nor any other property of the bankrupt are subject to attach-
ment or execution in favor of individual creditors."
The garnishment action against the First National Bank
and the bill in equity against the Marine National Bank were
1066 American State Reports, Vol. 115. [Wisconsin,
thereupon consolidated and tried together, and the court, upon
the above facts, awarded the money in both banks to the plain-
tiff.
^''' The general question here presented is whether a non-
resident and alien creditor may sue a nonresident and alien
debtor in the courts of this state upon a cause ^^^ of action
accruing in a foreign country, and may by means of gar-
nishment or other provisional remedy impound property of
the debtor within the state, and obtain judgment permitting it
to apply such property upon the debt when one of our own
citizens is shown also to be a creditor of the alien debtor and
to have taken subsequent legal proceedings to impound the
property for the payment of his claim. The general rule that
all foreigners sui juris who are not specially disabled by
the law of the place where the suit is brought may there main-
tain suits to vindicate their rights and redress their wrongs is
undoubted: Story on Conflict of Laws, 8th ed., sec. 565; 2
Cyc. 107, 108, art. "Aliens." Resident alien friends are
said to have practically the same rights and privileges, so far
as the protection by law of their persons, liberty, reputation,
and property rights is concerned, as citizens; and to protect
these rights they must possess the legal remedies necessary for
their due vindication. Alien friends, whether resident or
nonresident, also have, in the absence of disabling statutes at
least, the right to take, hold, enjoy and dispose of property,
real and personal, and to make contracts with residents, and
so must have the right to invoke legal remedies to maintain
these rights. In both cases the remedies are commensurate
with the rights to be protected.
The plaintiff, however, is within neither of these principles.
It is a nonresident; it has no property of any kind within
the state; it has made no contract within the state or with
any resident of the state. It has brought action against an-
other nonresident alien, temporarily within the state, to re-
dress a wrong committed without the state, and it asks the
courts of this state not only to give it judgment for that
wrong, but also to lend the aid of its process to impound prop-
erty within the state and satisfy such judgment therefrom to
the prejudice of one of the state's own citizens who has a
claim against the same debtor. It is true that the cause of
action is transitory and the parties both within the jurisdic-
tion ®*® of the court, and so the court has jurisdiction, and
Jan. 1906.] Disconto Gesellschaft v. Umbreit. 1067
may doubtless rightly entertain the cause; but is the court
compelled to do so, because of an inherent right which the
alien has to demand the action of the court; or does it do so
upon the principles of comity, with the right to refuse relief
when such relief prejudices the interests of resident citizens?
This is the initial question in the case, and the one upon which,
as it seems to us, it must turn. In considering this question
there should be no confusion of ideas as to the exact situation
and relation of the various actions and proceedings. It must
be kept in mind that the original action is between two non-
resident aliens upon a foreign cause of action ; the appeals in
the present cases are from judgment in two auxiliary actions
brought in aid of the main action, to impound property, which
actions are, in effect, 6nly proceedings to secure payment of
the judgment in the main action by equitable execution upon
nonleviable property. Had the property sought to be reached
been tangible and leviable in its nature, writs of attachment
and execution issued in the main action would have accom-
plished the same purpose. It is manifest, therefore, that if
the main action cannot be maintained as matter of right, but
only (if at all) on the principles of comity, the auxiliary ac-
tions or equitable proceedings in the nature of attachment
and execution must fall under the same rule which applies
to the main action out of which they spring, notwitlistauding
the fact that residents of the state may be parties to the aux-
iliary actions as stakeholders or claimants of the impounded
property. That the main action is not an action maintain-
able as a matter of right, but only upon the principles of com-
ity, seems unquestionable.
This court has held that a resident of another state may
sue another nonresident upon transitory cause of action aris-
ing outside of this state, in our courts, as a matter of strict
right: Eingartner v. Illinois S. Co., 94 Wis. 70, 59 Am. St.
Rep. 859, 68 N. W. 664, 34 L. R. A. 503. This ruling was,
however, based solely upon ****** that provision of the consti-
tution of the United States which declares that "the citizens
of each state shall be entitled to all the privileges and im-
munities of citizens in the several .states": United States Con-
stitution, art. 4, sec. 2. It will be noticed that the present
chief justice, though concurring in the result, disagreed with
the court in that case upon this question, and took the posi-
tion that the action could not be maintained, as matter of
1068 American State Reports, Vol. 115. [Wisconsin,
right, even under the constitutional provision named, but only
upon the principles of comity. It is very manifest that, had
the case been one between alien nonresidents, to whom the
constitutional provision does not apply, the court would have
taken the same view. It is not intended, however, to base
the decision of this case upon a mere inference of this nature,
nor is it necessary. The principle that an action between
nonresident aliens upon a cause of action arising in a foreign
country is entertained or not in the courts of this country as
the principles of comity may dictate is very well supported.
It is said by Mr. Wheaton in his Elements of International
Law (eighth edition, edited by R. H. Dana), part 2, section
140 : " It is the duty as well as the right of every nation to ad-
minister justice to its own citizens; but there is no uniform
and constant practice of nations as to taking cognizance of
controversies between foreigners. It may be assumed or de-
clined at the discretion of each state, guided by such motives
as may influence its judicial policy. ' *
Mr. Webster, in his argument in the case of Bank of United
States V. Primrose, 13 Pet. 519, 10 L. ed. 274, defined the
doctrine of comity as follows: "It is, in general terms, that
there are, between nations at peace with one another, rights,
both national and individual, resulting from the comity or
courtesy due from one friendly nation to another. Among
these is the right to sue in their courts, respectively": 6
Webster's Works, 117.
The principle is impliedly recognized in Mason v. Ship
Blaireau, 2 Cranch, 240, 2 L. ed. 266. This was a libel for
salvage upon a French vessel which had been damaged in a
collision on the high seas and brought into an American port
by a crew put ^^^ on her by an English vessel. All the par-
ties were foreigners, and a question as to the jurisdiction of
the court was raised, and thus treated by Chief Justice Mar-
shall (page 264) : "These doubts [i. e., doubts as to the ju-
risdiction] seem rather founded on the idea that upon the
principles of general policy this court ought not to take
cognizance of a case arising entirely between foreigners, than
from any positive incapacity to do so. On weighing the con-
siderations drawn from public convenience, those in favor of
the jurisdiction appear much to overbalance those against it,
and it is the opinion of this court that whatever doubts may
Jan. 1906.] Disconto Gesellschaft v. Umbreit. 1069
exists in a case where the jurisdiction is objected to, there
ought to be none where the parties assent to it. ' '
It is very manifest that the case was entertained and de-
cided not because the alien parties had a right to demand it,
but because considerations of public convenience seemed in
that case to require it. Had considerations of public policy,
convenience, or the protection of the interests of our own
citizens been upon the other side of the question, it seems
evident that the court would have refused to exercise its ju-
risdiction. This is really the principle of comity. It is a
question of discretion in the exercise of power, not a question
of the existence of the power itself, for that is admitted.
In an early case in New York it was said that while our
courts may take cognizance of torts committed on the high
seas on board a foreign vessel where both parties are foreign-
ers, still "it must, on principles of policy, often rest in the
sound discretion of the court to afford jurisdiction or not ac-
cording to the circumstances of the case. To say that it can
be claimed in all cases, as matter of right, would introduce a
principle which might oftentimes be attended with manifest
disadvantage and serious injury to our citizens abroad as
well as to foreigners here": Gardner v. Thomas, 14 Johns.
134, 7 Am. Dec. 445. This doctrine was approved in John-
son V. Dalton, 1 Cow. 543, 13 Am. Dec. 564; Dewitt v. Bu-
chanan, 54 Barb. 31; Olzen v. Schierenberg, 3 Daly, 100;
and the doctrine was also held in that ""^ state to apply to
actions between nonresident citizens of other states (Bur-
dick V. Freeman, 120 N. Y. 420, 24 N. E. 949), which, as
we have seen, is contrary to the rule in this state as declared
in the' Eingartnev case, (94 Wis. 70, 58 Am. St. Rep. 859. 68
N. W. 664, 34 L. R. A. 503). The same rule as to foreigners
is held in Michigan (Great Western R. Co. v. Miller, 19 Mich.
305), where it was said that "where the parties are not
residents of the United States and the trespass was committed
abroad, the right of action in our courts can only be claimed
as a matter of comity, and they are not compellable to pro-
ceed in such cjisos": See, also, 7 Am. Law Kev. 417, art.
"Suits Between Aliens." The doctrine is reasonable; in
fact, any other doctrine would seem to be an anomaly. The
laws of a state are enacted primarily for the regulation, bene-
fit, and protection of [>ersons, rights, and property within its
jurisdiction. To hold that two foreignei-s ntay import, bodily,
1070 American State Reports, Vol. 115. [Wisconsin,
a cause of action, and insist, as a matter of right, that tax-
payers, citizens and residents shall await the lagging steps
of justice in the ante-room while the court hears and decides
the foreign controversy, seems, on the face of it, to be un-
reasonable, if not absurd.
Holding, therefore, that the main action in the present case,
with its equitable auxiliary proceedings to impound nonlevi-
able property, is to be maintained in the courts of this state
(if at all) upon the ground of comity rather than upon the
ground of right, we are to inquire what the general princi-
ples of comity are, and what circumstances in the present
case are to be considered in deciding whether the courts of
this state should extend their aid to the plaintiff. Comity is
defined as: "Courtesy; a disposition to accommodate." By
the rules of comity between nations, the courts of one state
will voluntarily enforce the laws of a friendly state or nation
when, by such enforcement, they will not violate their own
public policy or laws or injuriously affect the interests of
their own state or of their own citizens. While this court has
not had occasion to consider the application of the principles
®^^ of comity to an action between nonresident aliens upon
a cause of action accruing abroad, like the present, it has
passed upon cases involving other phases of the question,
and has clearly recognized the principle and its limitations.
Thus, in Mowry v. Crocker, 6 Wis. 326, this court held that
a voluntary assignment of property for the benefit of cred-
itors made in another state passes the title to personal prop-
erty of the assignor within this state, and will be given full
effect by the courts of this state ; and this ruling was followed
in Cook V. Van Horn, 81 Wis. 291, 50 N. W. 893, and' recog-
nized in Segnitz v. Garden City B. & T. Co., 107 Wis. 171,
81 Am. St. Rep. 830, 83 N. W. 327, 50 L. R. A. 327, as weU
as in Gilman v. Ketcham, 84 Wis. 60, 36 Am. St. Rep. 899,
54 N. W. 395, 23 L. R. A. 52. But in McClure v. Campbell,
71 Wis. 350, 5 Am. St. Rep. 220, 37 N. W. 343, it was held
that an assignment of property made in another state pur-
suant to a law which amounts to a state bankrupt law has
no extraterritorial effect, and will not be given effect by the
courts of this state as to property within this state, and this
doctrine has been subsequently approvingly cited in Filkins
V. Nunnemacher, 81 Wis. 91, 51 N. W. 79, Wells, Fargo &
Co. V. Walsh, 87 Wis. 67, 57 N. W. 969 , Hughes v. Hunner,
91 Wis. 116, 64 N. W. 887, and Segnitz v. Garden City B.
Jan. 1906.] Disconto Gesellschaft v. Umbreit. 1071
& T. Co., 107 Wis. 171, 81 Am. St. Rep. 830, 83 N. W. 327,
50 L. R. A. 327. The vital distinction between the two prin-
ciples is that in the first case the title to the property passes
by act of the owner, which is effective as to personal property
wherever situate, while in the second case the assignment is
either actually or practically made by decree of the court
or operation of law in proceedings in invitum, and hence it
has no effect outside of the jurisdiction of the court : See, also.
Smith V. Chicago etc. R. Co., 23 Wis. 267. It is well to note,
however, that even in the first line of cases, where effect is
given to the assignment in this ^tate, the ruling is distinctly
based upon the principle of interstate comity, though the
principle was not discussed at any length in any of the cases.
In Oilman v. Ketcham, 84 Wis. 60, 36 Am. St. Rep. 899,
54 N. W. 395, 23 L. R. A. 52, the ««^ subject received atten-
tion in an opinion written by the late Mr. Justice Pinney,
which is valuable and instructive. In this case it appeared
that a New York manufacturing corporation had commenced
proceedings in the courts of that state for its own voluntary
dissolution, and had been adjudged insolvent and dissolved,
and all its property, effects, and credits tran.sferred to the
defendant Ketcham, as receiver; that in course of the pro-
ceedings an order had been made enjoining all creditors of
the corporation from commencing or prasecuting any actions
against the corporation to collect their debts, which order
had been served upon Gilman, who resided in New York;
that the New York statute under which the proceedings were
brought did not contemplate or provide for a discharge of
the debtor, but simply for division of its property among its
creditors and stockholders ; that, after the injunctional order
aforesaid had been made and served, Gilman commenced ac-
tion in this state against the corporation, and garnished one
of its debtors in this state, who brought the money into court,
and Ketcham was thereupon interpleaded and made claim to
the fund, by reason of the facts above stated. In this case
it was held that the effect of the voluntary dissolution pro-
ceedings in New York was to place all of the corporate prop-
erty and assets in custodia legis, to be collected and applied
by the receiver; that there was nothing in the procfctling
or the statutes of New York in contravention with the law or
public policy of this state, and that to give effect to such pro-
ceedings would not prejudice the riu'hts of any citi/en of this
state. On these grounds the claim of the receiver was recog-
1072 American State Reports, Vol. 115, [Wisconsin,
nized and upheld upon the principles of comity, as ajrainst
the plaintiff who was seeking the aid of the courts of this
state in violation of the law, and evading the process of his
own state. In discussing the question it was said: "Our
own citizens, in a proper case, would no doubt be protected
against the effect of such extraterritorial act and ®*"* adju-
dication, if injurious to their interests or in conflict with
the laws and public policy of Wisconsin, and effect would not
be given to it at the expense of injustice to our own citizens,"
This was not a chance remark, but a careful statement of
the principle of comity as applied to the case before the
court, and was thoroughly supported by citations of and quo-
tations from the authorities, which need not be repeated here.
This case has since been cited with approval in Hughes v. Hun-
ner, 91 Wis. 116, 64 N. W. 887 ; Parker v, Stoughton M. Co.,
91 Wis. 174, 51 Am. St. Rep. 881, 64 N. W. 751 ; Wyman v.
Kimberly-Clark Co., 93 Wis. 554, 67 N. W, 932; Finney v.
Guy, 106 Wis. 256, 82 N. W, 595, 49 L. R. A. 486; and by
the present chief justice in his concurring opinion in Ein-
gartner v. Illinois S. Co., 94 Wis. 70, 59 Am. St. Rep. 859, 68
N, W. 664, 34 L. R. A. 503, where he also says :
"Actions like the one at bar [which was an action by one
nonresident against another for a tort committed in Illinois]
are generally governed by the principles of interstate com-
ity,"
In Finney v. Guy, 106 Wis. 256, 82 N, W. 595, 49 L. R.
A. 486, it is said in the opinion of Mr. Justice Marshall:
"This court recognizes fully the importance of interstate
comity and uniformly freely gives effect to it as regards the
laws of sister states when it will not seriously violate the
policy of our own laws or the rights of our own citizens.
. , . . A liberal course in the enforcement of the laws of
other states in proper cases should be the rule, but the para-
mount duty of our judicial system is to safeguard our own
state policy and prevent injustice to our own people within
reasonable limits": 106 Wis, 276, 82 N. W. 602.
Upon these principles, then, we are to determine whether
the plaintiff should be allowed by the courts of this state to
take the moneys which it has impounded, and in determining
this question a brief reference to the facts at this point will
be helpful, Terlinden committed a tort (the nature of which
does not appear) against the plaintiff in Germany in May,
1901, and fled to this country, bringing the money in ques-
Jan. 1906.] Disconto Gesellschaft v. Umbreit. 1073
tion and depositing it in bank. It appears to have been
««^ his own money ; at least there is nothing before us to show
to the contrary. The intervener, Umbreit, began to render
services to Terlinden (the nature of which does not appear)
on August 16, 1901, and continued to render services until
February 1, 1903, when his bill amounted to $7,500, which
has not been paid. The plaintiff commenced suit against
Terlinden to recover damages for said tort August 17, 1901,
and obtained judgment for more than $94,000 February
19, 1904, more than $85,000 thereof being still unpaid. At
the time of commencing suit it garnished the banks. Um-
breit brought action against Terlinden in March, 1904, and
garnished the banks, obtained service by publication, and was
given judgment by default in his main action for $7,500
June 11, 1904. Terlinden was thrown into involuntary bank-
ruptcy in Germany, July 27, 1901, and the plaintiff has
taken part in the proceedings. The German law prohibits
the creditor of a bankrupt from seizing the bankrupt's prop-
erty by attachment or execution pending the bankruptcy pro-
ceedings. The plaintiff, after the commencement of its ac-
tion, agreed with the trustee in bankruptcy that it would
hand over all moneys it might recover in the action to the
trustee to go into the general estate.
It may be admitted that there is nothing contrary to our
laws or public policy in the prosecution of an action by a for-
eigner against another to recover damages for a tort com-
mitted abroad, provided that the legal business of citizens is
not materially interfered with thereby. The policy of our
laws is to give every man a certain and efficient remedy in
the courts for the wrongs which he may suffer. It may be ad-
mitted, also, that by the more prosecution of the action to
judgment in the present case no interest of the pultlic nor
of any of our citizens was prejudiced. Hut the plaintiff
was not content simply to prosecute his action to judgment.
At the inception of his action he asked and obtained the help
of the court to seize and hold property of the defendant with-
in ****^ the jurisdiction of the court to answer the demands
of its expected judgment. At this very time Terlinden was
indebted to Mr. Umbreit, a citizen of our own state, in some
amount, and evidently upon a contract for continuous service.
There is nothing in the recortl to imjM'ach the bona fides of
that debt or service. Before the plaintiff obtained any judg-
ment on its claim, Intbreit's claim had become large; action
Am. St. Kep., Vol. 115—08
1074 American State Reports, Vol. 115. [Wisconsin,
was begun upon it in March, 1904, the same property im-
pounded by garnishment, and in June, 1904, judgment was
obtained. Thereupon Umbreit intervened in the plaintiff's
garnishment action, and thus the foreigner and the citizen
were brought face to face, each demanding the aid of the
court in subjecting the funds in bank to the payment of its
claim in preference to the other. If the foreigner was en-
titled to niaintain his action and prosecute all the statutory
auxiliary remedies as matter of right, his present claim would
have to be sustained, because he obtained the prior lien by
garnishment (so far, at least, as the funds in the First
National Bank are concerned) ; but being only entitled to ask
the help of the court on the ground of comity he must, neces-
sarily, only take such help as the rules of comity will give.
It is confidently believed that no court in such case ever
has allowed or should allow the foreigner to seize and carry
away property within the jurisdiction when a resident cred-
itor stands also at the bar with his judgment and his pro-
visional lien, and thus force such resident creditor to go to
a foreign country to collect his debt. If such action be not
prejudicial to the rights and interests of our own citizens,
it is difficult to see what action would be prejudicial. Nor
does it make any difference that the home creditor's claim
may have accrued after that of the foreign creditor ; the ques-
tion is not to be determined by priority in point of time any
more than by priority of garnishment, but by the situation at
the time when the court is called upon to finally decide which
creditor shall receive its aid. So, if the case were devoid of
any other facts, comity would require that the interests of the
***"* home creditor be protected. But there are other facts
which have a material bearing. The foreign creditor is here
nominally in his character as a creditor, but really as the
mere agent of the foreign trustee in bankruptcy, who could
not himself come here and assert any right to the property.
The creditor has agreed to hand over to the trustee for gen-
eral distribution all that he may recover in this action. Thus
it is proposed by the aid of our courts to set at naught the
policy of our own law to the effect that a foreign trustee or
receiver in involuntary bankruptcy proceedings obtains no
title to the debtor's property within this state. This is cer-
tainly imposing upon good nature, and comity is, after all,
simply good nature. So we reach the conclusion that so far
as the case against the First National Bank is concerned, the
Jan. 1906.] Disconto Gesellschaft v. Umbreit. 1075
judgment is erroneous and should have been in favor of the
intervener.
As to the equitable action in aid of the garnishment against
the Marine National Bank, while the general principles of
comity already discussed are equally applicable, there are
some further considerations. In this case neither party ob-
tained any lien on the fund by reason of the attempted gar-
nishments, because it was represented only by a negotiable
instrument which the bank had issued to Terlinden : Stats.
1898, sec. 2769, subd. 1. The equitable action was, there-
fore, brought by the plaintiff, to which Umbreit was made a
party, in order to reach the indebtedness represented by the
negotiable instrument and subject it to any judgment Avhieh
might be obtained in the main action. At the time this ac-
tion was brought Umbreit had brought his action against Ter-
linden, obtained service by publication only, and had at-
tempted to garnish the Marine National Bank, but had ob-
tained no judgment. In the complaint in the equitable ac-
tion the plaintiff alleged that Umbreit claimed a lien on the
instrument by reason of his subsequent garnishment of the
bank, but alleged that such garnishment was without validity
and without jurisdiction, and therefore prayed that Um-
breit's ®®® lien be cut off. Umbreit answered, claiming an
indebtedness of Terlinden to him of $7,500 as aforesaid, and
setting up the commencement of his action therefor and his
garnishment of the Marine Bank. The court found that Um-
breit commenced his action and obtained service by publica-
tion only; that he obtained his judgment by default for the
full amount claimed, but made no findings as to the merits
of Umbreit's claim. The court also found that Umbreit. at
the commencement of his suit, served garnishee process on
the Marine National Bank, but concluded that, as the only
liability of the Marine Bank arose by reason of the issuance
of a negotiable instrument to Terlinden, no lien thereon or on
the liability of the bank was secured by either plaintiff s or
defendant's garnishment proceedings.
There is no bill of exceptions in tlie ca.se, and hence the
findings of fact are solely to be considered, and by them we
are only informed that Umbreit obtained judgment by de-
fault upon substituted service of the summons, and the (lues-
tion has occurred to lus (though not suggested in the briefs)
whether such a judgment constitutes any proof that Jiny .sum
was owing from Terlinden to Umbreit; in other words, is the
1076 American State Reports, Vol. 115. [Wisconsin,
judjrment itself proof of personal liability, especially when
the parties are litigating their rights before a court of equity?
The validity and justice of the plaintiff's judgment in the
main action cannot be questioned, because it was rendered
after personal service of the summons and is unappealed
from, but the defendant, Umbreit, has no such judgment and
is not found, as matter of fact, to have had any claim against
Terlinden, except his judgment obtained by default on sub-
stituted service. When he comes into a court of equity and
makes his affirmative claim for priority of right in property
which the plaintiff had in form equitably impounded and
upon which he (Umbreit) had no actual lien, must there not
be a finding that he actually had a just claim in order to
justify the court in protecting him? Is his judgment any
®''® proof of his claim against Terlinden, except as to prop-
erty garnished or attached? The principle is familiar and
well settled that in an action against a nonresident, where
there is only substituted service of the summons, the court
acquires no jurisdiction for mere purposes of personal adju-
dication, but only to enter a judgment with reference to or
to be enforced upon property within the state or a judgment
concerning the status of one of our own citizens: Moyer v.
Koontz, 103 Wis. 22, 74 Am. St. Rep. 837, 79 N. W. 50;
Pennoyer v. Neff, 95 U. S. 714, 24 L. ed. 565. The judgment
in such action will, of course, be effective so far as it affects
or may be enforced against the property of the defendant
which has actually been seized by attachment or garnishment.
It has also been held by this court, contrary to the rulings
in some jurisdictions, that it is not essential that the prop-
erty within the state be seized by writ of attachment, but
that, if the facts required by the statute to authorize the
order for publication appeared by proper affidavit, the court
would acquire jurisdiction to render a judgment good at
least against the property described in the moving papers,
providing it had not been removed from the state or sold to
an innocent purchaser before the rendition of the judgment:
Jarvis v. Barrett, 14 Wis. 591 ; Gallun v. Weil, 116 Wis. 236,
92 N. W. 1091. But it was further held, prior to the pas-
sage of chapter 29 of the laws of 1868 (Tay. Stats., c. 124,
sees. 13-15), that the property within the state must be spe-
cifically described in the moving affidavit upon which the
order of publication is based or the court will acquire no
jurisdiction: Winner v. Fitzgerald, 19 Wis. 393. The prop-
Jan. 1906.] Disconto Gesellschapt v. Umbreit. 1077
erty so described need not be property which can be attached,
but may be such property which can only be reached by cred-
itors' bill, such as debts owing by a resident to a nonresident,
and it is now sufficient if it be described in the complaint:
Bragg V. Gaynor, 85 Wis. 468, 55 N. W. 919, 21 L. R. A. 161.
The act of 1868, above named, as codified by subdivision 1,
section 2639 of the Eevised Statutes of 1878, added a new
class of cases in which service by publication was authorized,
namely, cases where *'* the cause of action arose in this state
and the court has jurisdiction of the subject of the action.
In Witt V. Meyer, 69 Wis. 595, 35 N. W. 25, this court ex-
pressed a grave doubt whether, in such case, the court would
obtain any jurisdiction either of person or property unless it
also appeared by the affidavit that the defendant had prop-
erty in this state which was described; citing, in addition to
Jarvis v. Barrett, 14 Wis. 591 , Rape v. Heaton, 9 Wis. 328,
76 Am. Dee. 269, and Jones v. Spencer, 15 Wis. 582. Just
previous to this decision it had been held, in Smith v.
Grady, 68 Wis. 215, 31 N. W. 477, that a foreign personal
judgment founded alone upon service of process outside of
the jurisdiction, there being no property within that juris-
diction, was absolutely void; citing Jarvis v. Barrett, 14
Wis. 591. In view of the doctrine announced by the su-
preme court of the United States in Pennoyer v. Neff, 95 U.
S. 714, 24 L. ed. 565, which is a leading case on this sub-
ject, and which was cited with approval by this court in
Moyer v. Koontz, 103 Wis. 22, 74 Am. St. Rep. 837, 79 N.
W. 50, we think it must be considered as settled that the
doubt expressed in Witt v. Meyer, 69 Wis. 595, 35 N. W. 25,
was well founded, and that such judgments, except those
affecting the status of a citizen, can go no further than to
be effective as to property within the state at the time of
the commencement of the action, which property must be de-
scribed in the moving papers. Now, it does not appear in
the findings in the present case that the debt from the Marine
Bank to Terlinden was named or described in the papers
upon which the order of publication was based. It is true
that it appears that judgment was entered in the action, and
it may be claimed that the presumption of regularity in the
proceedings of a court of general jurisdiction should be in-
dulged in. The difficulty with this claim is that it ajipears
that ]\Ir. Unibrcit did have a v.did garnishnicni of thr funds
in the First National Bank, which he acquired at the time he
1078 American State Reports, Vol. 115. [Wisconsin,
commenced his suit, and this would fully justify the court in
entering the formal judgment in the main action, so the office
of any presumption seems very doubtful at best.
We conclude that in the case of the creditors' bill against
•^* the Marine Bank the mere finding that a judgment was ob-
tained by Umbreit by default upon substituted service is in-
sufficient to authorize this court to hold that any jurisdiction
was obtained of the debt due from the bank, because it does
not appear affirmatively that in that action this property was
described in the affidavit or complaint on which the order of
publication was based. In view of the fact that this point
seems to have been overlooked in the trial of the case, judg-
ment will not be directed here, nor, on the other hand, will a
new trial of the case be ordered. The Marine Bank case
will be sent back with directions to allow the defendant Um-
breit to introduce proof showing that the debt due from the
Marine Bank was properly described in the affidavit or com-
plaint upon which the order for publication was based, in
which event his judgment will be given perference over the
plaintiff's claim to the full amount thereof; in case, however,
such was not the fact, he should be allowed to introduce ex-
trinsic evidence of the amount justly and equitably due him,
and the plaintiff should be allowed to meet such claim by evi-
dence to the contrary, and the amount found by the court to
be justly due Mr. Umbreit over and above what he may ac-
tually realize from the judgment in the garnishment action
should be given preference, after which the plaintiff's claim
should be allowed.
By the COURT. The judgments in both actions are re-
versed, with costs. The garnishment action is remanded,
with directions to render judgment for the defendant, Um-
breit, that he recover the sum garnished, with costs. The
equitable action is remanded to take further proof, and for
judgment in accordance with the opinion.
Cassoday, C. J., Dissented, and said: "I briefly state the grounds
of my dissent in this case. It seems to be well established that
one alien may sue another alien in the state courts upon contract
made abroad or for a tort committed in a foreign country, if the
defendant is transiently in the state and service is had upon him as
in the case at bar: 2 Am. & Eng. Ency. of Law, 2d ed., 66, 67; 2 Cyc.
105-107. This seems to be conceded. Such right to maintain suits in
the state courts, however, is of little or no value unless the plaintiff in
Jan. 1906.] Disconto Gesellschaft v. Umbreit. 1079
such action is entitled to the remedies .given to domestic creditors.
And so, 'by comity and the laws of the states, resident aliens have
the right to the same remedies in courts as citizens, £^nd no court
will deny those rights without positive legislation taking them away';
and this rule applies to all personal actions: 2 Cyc. 107, 108. Of
course the lex fori governs in all matters relating to the remedy and
the course of procedure: 22 Am. & Eng. Ency. of Law, 2d ed., 1383.
" 'The right to proceed by process of attachment has been limited
by the statutes of some of the states to a citizen of the state or to
a citizen of some other of the United States. As a rule, however,
at the present time this right is not ordinarily affected by the question
of citizenship, and it is generally immaterial that the attaching cred-
itor is a nonresident': 4 Cyc. 406.
" 'Where the statutory grounds for the issuance of the writ of
garnishment exist, the proceedings may be instituted against all
persons, both individual and corporate, and irrespective of whether
they are residents or nonresidents, unless, of course, they enjoy some
special immunity from suit. The statut'es authorizing the issuance of
writs of garnishment are, as a rule, very broad in regard to the
persons who may take advantage of the process, and generally provide
for its issuance on the application of any person ; and the word * ' per-
son, "as so used, has been held to include all individuals, nonresidents as
well' as residents, corporations, and sovereignties ' : 14 Am. & Eng. Ency.
of Law, 2d ed., 752.
" 'Since, as a general rule, the garnishing creditor acquires no
greater right in the property or credits in the hands of the garnishee
than that possessed by the defendant at the time of the service of the
writ of garnishment, a prior valid sale or assignment or lien or en-
cumbrance thereon will take precedence over a subsequent garnish-
ment. On the other hand, as the garnishing creditor succeeds to all
the rights and interests of the defendant at the service of the writ,
the rights of the garnishing creditor are not aflFected by any alienation
by the defendant or encumbrance created or arising subsequently to
the service of the writ': 14 Am. & Eng. Ency. of Law, 2d ed., 867.
"The same is true as to attachments: 4 Cyc. 632. Our statutes
give the right of garnishment in broad terms, and extend to actions
'to recover damages founded upon contract, express or implied,' and
extend to cases where 'the defendant fraudulently contracted the debt
or incurred the obligation reHi)octing which the action is brought'
and to cases where the 'defendant is a foreign corporation' or a
nonresident: Stats. 1898, sees. 2731, 2753. This court has repeatedly
held that proceedings by garnishment or creditors' bill to reach non-
leviable assets ai'e, in effect, an equitable levy from the time of
service of process: La Crosse Nat. Hank v. Wilson, 74 Wis. 391, 43
N. W. 153; Bragg v. Oaynor, 85 Wis. 468, 21 L. B. A. 161, 55 N. W,
919. It follows from what has been said that the plaintiflf was prop-
erly allowed to maintain this action against Terlindon for the tort
1080 American State Reports, Vol. 115. [Wisconsin,
committed by him in Germany in May, 1901, and since personal
service was had upon him in Milwaukee August 17, 1901, and the First
National Bank of Milwaukee garnished on that day, the funds in the
bank were subject to garnishment, and the plaintifif by such garnish-
ment obtained an equitable lien upon the funds deposited in the bank
August 14, 1901.
"The fact that the plaintiff obtained judgment against Terlinden
February 19, 1904, for a large amount, and that judgment never
having been appealed from, would seem to conclusively establish the
right of the plaintiff to maintain this action against Tenderlin. The
plaintiff having the right to maintain this action aganst Tenderlin,
then, unless there is some law to the contrary, or the plaintiff is pre-
cluded by the bankruptcy proceedings in Germany, it would seem that
be also had the right to maintain garnishment proceedings against the
bank. The plaintiff here is acting in harmony and co-operating with
the German trustee and the German consul at Chicago for the benefit
of all the creditors of Terlinden and not in violation of the clause
of the German bankrupt act quoted in the opinion filed. The whole
purpose of that provision, as I understand, was to prevent one cred-
itor by such attachment or execution from obtaining a preference
over other creditors in the courts of Germany. Here, in defiance of
comity, it is invoked to give an American creditor preference over
all German creditors, and on a claim which had no existence w;hen
the bankruptcy proceedings were instituted, but accrued afterward.
Besides, that provision, as I understand, relates wholly to the remedy
for proceedings in Germany. The remedies here given by our courts
are, as I understand, given and regulated entirely by our statutes, and
not by the statutes of Germany. The provision quoted does not go
to the right of action but to the remedy merely. Terlinden is here
adjudged to have fraudulently obtained from the plaintiff the money
here sought to be reached by garnishment. The right of action has
been adjudged to be in the plaintiff. According to the judgment Ten-
derlin had no defense. There is no attempt on the part of the plain-
tiff to obtain a preference over other creditors of Tenderlin. On
the contrary, and as the appellant claims, the plaintiff was acting in
harmony with the trustee and for the benefit of all the creditors.
Should the appellant's claim which accrued subsequently to the bank-
ruptcy proceedings be allowed, it would to that extent defeat the
bankruptcy proceedings and give a preference to an American creditor
over all German creditors. It is true that the rule of comity does not
hold courts down to strict legal or treaty obligations. But it requires
states or nations to give effect to foreign laws and judicial proceed-
ings, not so much — in the language of Mr. Justice Story — as 'a
matter of comity or courtesy as a matter of paramount moral duty':
Story on Conflict of Laws, 32. It is not only a friendly courtesy
but a mutual courtesy, which requires the courts of the one state or
country to do what the courts of the other states or country would
Jan. 1906.] Disconto Gesellsch.vft v. Umbr::it. lOSl
be expected to do under similar circumstances. Here the domestic
creditor is allowed to supersede and set aside an equitable lien obtained
long before the claim of the domestic creditor accrued, and upon
the sole ground that the garnishing creditor is an alien. Should a
Wisconsin citizen embezzle the funds of another Wisconsin citizen
and then abscond to Germany, and the Wisconsin creditor pursue
him to that country and obtain personal service upon him b}' proceed-
ings in the courts of that country, and then attach or garnish the
funds so embezzled, it would hardly be expected that a German court
would allow the lawyer whose claim accrued after such attachment or
garnishment, in resisting the same, to supersede such attachment or
garnishment and obtain the funds so embezzled for his remuneration
in performing such service. If it did we would hardly recognize it
as an act of comity or courtesy to an American citizen or American
law, much less 'as a matter of paramount moral duty.'
"In my opinion the judgment should be affirmed in this case and
modified in the other, according to the rights of the parties under the
creditors' bill."
"WINSLOW, J. Upon motion for rehearing in these cases our
attention was called to article 1 of the treaty concluded between the
United States and the kingdom of Prussia in 1828, which reads as
follows: 'There shall be between the territories of the high contract-
ing parties a reciprocal liberty of commerce and navigation. The in-
habitants of their respective states shall mutually have liberty to
enter the ports, places and rivers of the territories of each party
wherever foreign commerce is permitted. They shall be at libety to
sojourn and reside in all parts whatsoever of said territories, in order
to attend to their affairs; and they shall enjoy, to that efToct, the
same security and protection as natives of the country wherein they
reside, on condition of their submitting to the laws and ordinances
there prevailing. '
"Attention is also called to a provision in the treaty of 1790 be-
tween the same parties as follows: 'Each party shall endeavor by all tie
means in their power to protect and defen.l all vessels and ntlier etT.ets
belonging to the citizens or subjects of the other, which shall be within
the extent of their jurisdiction by sea or by land.'
"We have been unable to sec that either of these treaty provisions
has any bearing on the questions in controversy here.
"By the COURT. Motion denied."
The Jurusdirtion of Courts ovrr Ahmi, is oon-Mered \n the notes to
Molyneux v. Seymour, 76 Am. Dec. (W..-,; Tr. inbl:.y v. Aetna Life Ins.
Co.. 94 Am. St. Hep. o.'i2. The i.roseeu'i.ui <.f trnnHitory aetnuiH in
a foreign countrv is discussed in the note to Eiugurtuer v. Illinois
ttteel Co., 59 Am. St. Kep. 809.
INDEX TO THE NOTES.
Acceptance, latent defects not waived by, 259.
of building constructed under contract, generally does not waive
defects, 257.
of building, where contract has been substantially performed,
259.
of building material, when results from opportunity to inspect,
262.
of church edifice, when waives defects in, 261.
of drains, wells and ditches, when waives defects in, 262, 263.
of machinery, when waives defects in, 257.
of property manufactured, when precludes urging visible de-
fects, 256.
of property purchased, when precludes urging visible defects,
256.
of public building or work as a waiver of defects in, 261, 262.
use of article as evidence of, 263.
using or paying for a building, when does not amount to, 257-
259.
without knowledge of defects, 263.
Answer, contempt of court does not justify refusal of right to make,
952.
right of defendant to present and file, 950, 951.
striking out for refusal to attend and give deposition, 953.
striking out not justified because of contempt of court, 953.
striking out in suits for divorce for refusal to pay alimony,
954.
Arms, concealed weapons, statutes against carrying are not uncon-
stitutional, 199, 200.
constitutionality of statutes prohibiting the carrying of, 201.
courts of justice, bearing of in may be prohibited, 203.
interpretation of constitutional provision guaranteeing the right
to bear, 199, 200.
kinds of the carrying of which may not be prohibited, 202, 203.
epenly carrying of deadly, whether may be made criminal, 201,
202.
regulation of the right to keep and carry, 200.
right to bear does not include right to bear for an unlawful
purpose, 199.
Attorney and Client, constructive trust in favor of the latter against
the former, 795.
(1083)
1084 Index to the Notes.
Constitutional Law, answers, striking out of, when not permissible,
950-954.
Contempt of Court does not warrant refusal of right to answer and
defend, 953.
Corporations, libel by agent of, when liable for and when not, 721,
723.
libel by, criminal liability for, 724.
libel by, damages exemplary, when should be exonerated from,
726.
libel by, damages for, measure of, 725, 726.
"■ libel by, editors' or officers' liability for, 724.
libel by, exemplary damages for, 724, 725,
libel by, liability of in punitive damages for, 723.
libel by, officer of, when not personally liable for, 722.
libel, evidence necessary to support action for, 723.
libel, liability for, 721.
libel, malice necessary to support action against for, 723.
Definition of constructive trust in land, 774.
of due process of law, 950.
of express trust in land, 774.
of resulting trust in land, 775.
of partnership, 401-407.
Due Process of Law, alien enemies, when entitled to, 950, 951.
as to persons in contempt of court, 952.
definition of, 950.
right to defend is essential to, 951.
Divorce, alimony, refusal to pay, striking out answer because of,
954.
Estates of Decedents, assets, discovery of, proceedings for, 211.
assets, discovery of, scope and object of proceedings for, 211.
assets, summary proceedings for discovery of, 212.
evidence admissible in examinations to discover property of,
217.
jury trial in examinations to discover, 216.
property, affidavit or petition in proceedings for the discovery
of, 218.
property, citation to persons possessing, concealing or em-
bezzling, 217.
property, controverted claim to, when not considered in the
United States, 210.
property, discovery of, statute authorizing proceedings in pro-
bate for, 239.
property, examination of person making claim to, 214.
property, examination to discover, 216.
property, information concerning, proceedings to obtain, 216.
property, against person embezzling, 210.
Index to the Notes. 1085
Estates of I?cce<^ents, property, limitation upon the time within which
proceedings for the discovery of may be prosecuted, 218.
property, personal representatives are subject to proceedings for
the discovery of, 218.
property, persons who may compel inquiry concerning, 217,
218.
property, proceedings against persons who have concealed or
withheld, 209, 210.
property, proceedings for discovery of, when sustainable, 210.
property, summary proceedings to discover, 210.
property, true title to, 213, 214.
summary proceedings for collection of debts, 213.
summary proceedings for discovery of property of, 212, 213.
Execution Sale, purchaser at, when may be deemed to hold in trust,
789, 790.
Guardian and Ward, constructive trust against the one in favor of
the other, 794.
Husband and Wife, constructive trust against the one in favor of the
other, 792.
Libel, liability of corporations for, 721-726.
Parent and Child, constructive trust against the one in favor of the
other, 793.
Partnership, agency as a test of, 404, 406.
agent whose compensation is measured by profits is not a part-
ner, 405.
as to third persons, when created, 413.
between corporations, or between a corporation and an in-
dividual, 411.
between husband and wife, 411, 412.
between partnerships, 410.
community of interest as test of, 420.
consideration to support agreement to form a, 412.
corporations, persons assuming to act as, whether constitute a,
420.
corporations, promoters of, whether constitute a, 419.
creameries and cheese factories, persons furnishing milk to, 427.
creation of must be by contract, 406, 412.
cropping contracts which do not create, 438.
cultivating lands and sharing profits with landlord, 425.
de facto, liability of members of, 419.
definition of, 401-407.
difference between and a cotenancy, 407.
diflEerence between and a joint stock company, 407.
1086 Index to the Notes.
Partnership, estoppel, creation of by, 442.
failure of person to furnish his share of the capital does not pre-
vent his being a member of, 422.
for a single transaction, 408.
for an illegal purpose, is not sustainable, 409.
for purposes some of which are legal and others illegal, 401.
gross receipts, effect of an agreement to share in, 436.
how may be created, 412.
intent to create, when essential, 413-415.
intent to form, what amounts to, 414.
intent to form, when does not create, 415.
I landlord and tenant, agreements between which do not create,
437.
liability of members of, stipulations limiting, 416.
losses, agreement to share, when implied, 433-435.
losses, effect of agreement limiting to some of the members,
435.
married woman, when may become a member of, 411.
merger of the individual into, 402.
organizations for religious or social purposes are not, 408.
participation in profits and losses does not necessarily create,
402, 403.
persons who may form, 410.
pooling independent business and properties, 426-430.
profits, allowance of share of as a compensation for services,
439-441.
profits, allowance of share of as interest on loans and advances,
441.
profits, allowance of share of in repayment of capital advanced,
441.
profits, allowance of share of rent, 442.
profits and losses, necessity for participation in both, 431-435.
profits, community of interest in as an element of, 432.
profits, participation in is not a conclusive test of, 432.
t profits, sharing of as a test of, 407.
J . properties of, 402.
purposes for which may be formed, 408.
' right of control as an element of membership in, 420
• • risks, community of, as a test of, 428.
j sharing in crops, increase of livestock, etc., 437-439.
subpartners, status of with respect to the main partnership,
430.
tenants in common as, 407, 423.
tests to determine existence of, 403.
where one person furnishes the capital and another services or
skill, 424.
Index to the Notes. 1087
Priest and Parishioner, constructive trust against the one in favor of
the other, 795.
Principal and Agent, constructive trust in favor of the former
against the latter, 795.
Slander, liability of corporations for, 726, 727.
Streets, public, constitutionality of statute imposing liability on prop-
erty owners, 994, 995.
public, defects, liability of person creating, 994.
public, excavations in, liability of property owner for, 994.
public, notice to abutting owner to make repairs, 996.
public, property owner is liable for defects caused by himself,
994.
public, property owner is not liable at common law to repair,
993.
public, statutes imposing duty to keep in repair do not make
property owner personally liable for injuries, 995.
public, statutes imposing liability on property owners, interpre-
tation and effect of, 995.
public, trap-doors, manholes, etc., liability for injuries due to,
994.
Snrety, creditor does not owe the duty to, to exercise active vigi-
lance, 86.
creditor, failure of to present claim against estate of deceased
debtor, 86.
creditor, failure of to present claim against estate of the debtor
in bankruptcy, 88.
creditor, failure of to sue administrator of deceased debtor,
86, 87.
creditor is not bound to sue on the principal debt, 85.
creditor need not sue insolvent debtor, 93.
creditor, notice or request to, to sue debtor, form of,, 94.
creditor, request that he sue debtor, effect of, 89, 90.
forbearance of creditor to sue debtor, 88-93.
notice of default of debtor is not necessary to liability of, 84.
passive conduct of creditor does not release, 80. ,
release of by creditor's failure to apply funds of dtbtnr in
his possession, 96.
release of by creditor's failure to exercise care and diligence
respicting collateral securities, 100.
release of by creditor's lien becoming lost by operation of
law, 101, 102.
release of by creditor's losing a lien by negligence, 101.
release of by creditor's making payments to debtor wkiek
he could have withheld, 95.
release of by creditor's refusal to sue debtor, 93.
release of by creditor's surrendering securities, 95.
1088 Index to the Notes.
Surety, release of where creditor is a bank, by its failure to apply
deposits, 98, 99.
right of action of against the principal, when accrues, 87.
suit by to compel creditor to sue debtor, 89.
Trusts, confidential relations as tending to create, 791.
constructive and simple compared, 776.
constructive defined, 775.
constructive depends on an express agreement, 775.
constructive, evidence sufficient to establish, 787.
constructive, fraud on account of which will be declared, 787,
788.
constructive, grounds for declaring, 786.
constructive in favor of brother against sister or vice versa, 794.
constructive in favor of client against attorney, 795.
constructive in favor of one cotenant against another, 796.
constructive in favor of debtor against creditor or vice versa,
796, 797.
constructive in favor of husband against wife or vice versa,
792.
constructive in favor of one partner against another, 795.
constructive in favor of parent against child or vice versa,
793.
constructive in favor of parishioner against priest, 795.
constructive in favor of principal against agent, 795.
constructive in favor of ward against guardian, 795.
constructive, miscellaneous relations giving rise to, 797, 798.
constructive, nature and kinds of, 786.
constructive need not be in writing, 786.
constructive, oral promise, breach of which will not support a,
789.
constructive, purchaser of land at public auction, when holds
subject to, 789.
constructive, transfer of land essential to, 787.
created contemporaneously with the transfer of land, 784, 785.
execution sale, purchaser of land at, when holds subject to, 789,
790.
exempted from requirement that creation of be by writing, 775.
express in land, defined, 774.
express in land, statutes requiring creation of to be by writing,
774, 775.
fraud, constructive, to create, 791.
in favor of a husband or wife against the other, 792.
oral, cannot be proved, 778, 779.
oral, consideration to support, 785.
oral, conveyance executed in pursuance of becomes unimpeach-
able, 783.
Index to the Notes. 10S9
Trusts, oral, creation of independently of transfer of land, 786.
oral, effect of possession under, 782.
oral, evidence to change absolute deed into a, 778, 779.
oral, evidence to establish, 785.
oral, executed are valid, 783.
oral procured by promise made with intention not to perform,
791.
oral, states recognizing, 785, 786.
oral, the parties may respect, 783.
oral, to sell lands and account for the proceeds, 780.
part performance, acts of sufficient to require enforcement of,
782.
promises made with intention not to perform, 790.
resulting defined, 775.
statute of frauds respecting creation of creates a rule of evi-
dence only, 777.
writing, absence of, whether makes void, 777, 778.
writing, language of statutes requiring for creation of, 777.
writing, states not requiring creation of by, 784.
writing to create, depositions may constitute, 781.
writing to create, may consist of several writings, 781.
writing to create, need not be contemporaneous, 780.
writing to create, pleadings may constitute, 781.
writing, wh'fen essential to creation of, 776.
Wills, contest of by pretermitted child, 580, 581.
foreign, conclusiveness of probate of, 518-522.
foreign, grounds of resisting probate of, 520.
foreign, probate of may be made conclusive, 519.
foreign, probate of, statutes construed as making conclusive,
519, 520.
foreign, validity of when not executed in conformity to the
laws of the state, 520, 521.
posthumous child, effect of upon, 58G.
posthumous child, omission of from will, when deemed inten-
tional, 586, 587.
posthumous child, omission of from will, when dfcnicd unin-
tentional. 586,
posthumous child, title and right of, at what time accrues, 587.
pretermitted adopted child, effect of will upon, 587.
pretermitted child horn aftrr the making of the will, but in the
testator's lifftime, 585.
pretermitted child born after the making of the will, remedies
of, 581.
pretermitted child, burden of proof as to whether omission of
from will was intentional, 590.
pretermitted child, contest of the will by, 580, 581.
Am. St. Rep., Vol. 115— (59
1090 Index to the Notes.
Wills, pretermitted child, contribution which may eoforce, 581.
pretermitted child, declarations of testator to show whether
omission of was intentional, 589.
pretermitted child, ejectment by, 581.
pretermitted child, evidence, parol, whether admissible to show
whether omission of was intentional, 589.
pretermitted child, evidence to show whether omission of was
intentional, states restricting it to the will, 589, 590.
pretermitted child, intention to omit, when inferable, 582.
pretermitted child, omitted from will owing to mistake as to
legal matters outside of the will, 583.
pretermitted child, presumption of intention to omit, evidence
to rebut, 590.
pretermitted child, presumption that omission of from will was
intentional, 590.
pretermitted child, provision for in will, what deemed to be a,
585, 586.
pretermitted child, references in will which do not overcome
presumption that omission was unintentional, 582, 583.
pretermitted child, references in will which show omission to
have been intentional, 584.
pretermitted child takes title by descent, 581.
pretermitted child, when estopped by the probate of the will,
580.
pretermitted children, intent of statute respecting, 580.
pretermitted children, object of statute respecting, 580.
pretermitted children, rights and remedies of, 580, 581.
pretermitted children, when not affected by a will, 580.
pretermitted children, who were in the mind of testator, 580.
pretermitted grandchild, intention to omit, when inferable from
the will, 583.
pretermitted issue of deceased child, 584.
probate of does not establish their validity in another state,
519.
probate of in one country as to real property is not conclusive
in another, 518, 519.
probate of in one country, when conclusive in another, 518.
INDEX.
Note.
Acceptance, latent defects not waived by, 259.
of building constructed under contract, generally does not waive
defects, 257.
of building, where contract has been substantially performed,
of building material, when results from opportunity to inspect,
262.
of church edifice, when waives defects in, 261.
of drains, wells and ditches, when waives defects in, 262, 263.
of machinery, when waives defects in, 257.
of property manufactured, when precludes urging visible de-
fects, 256.
of property purchased, when precludes urging visible defects,
256.
of public building or work as a waiver of defects in, 261, 262.
use of article as evidence of. 263.
using or paying for a building, when does not amount to, 257-
259.
without knowledge of defects, 263.
ADVERSE POSSESSION.
See Limitation of Actions, 6-8; Tenancy in Common, 2-6.
AGENCY.
Bee Principal and Agent.
AlilENS.
1. ALIENS — Bight to Maintain Action. — AU foreigners sui juris
who are not specially disabled by the law of the place where the suit
is brought may there maintain suits to vindicate their rights and
redress their wrcigs. (Wis.) Disconto Gesellschaft v. Umbrcit, 1063.
2. ALIENS — Bii'ht to Maintain Action. — If a suit between two
nonresident aliens upon a foreign cause of action can be maintained
here, not as a matter of right, but only on principles of comity, then
auxiliary actions or equitable proceedings in the nature of attach-
ment and execution fall under the same rule, notwithstanding the
fact that residents of the state may be parties to the auxiliary actions
as stakeholders or claimants of the impounded property. (Wis.) Dis-
conto Gesellschaft a . Umbreit, 1063.
3. ALIENS — Bight to Maintain Action. — An action by one non-
resident alien against another one, to redress a wrong committed
without the state, is not maintainable here as a matter of right, but
only upon principles of comity. (Wis.) Disconto Gesellschaft v.
Umbreit, 1063.
4. ALIEN — Right to Maintain Action to Prejudice of Besident
Creditors. — Comity does not allow a foreigner to seize and carry
away property within the jurisdiction of our courts when a resident
(1091)
1092 Index.
creditor stands nlso at the bar with his judgment and provisional
lien, and thus force such resident creditor to go to a foreign country
to collect his debt. It makes no difference that his claim may have
accrued after that of the foreign creditor; the question is not deter-
mined by priority in point of time, but by the situation at the time
when the court is called upon to decide which creditor shall receive
its aid. (Wis.) Disconto Gesellschaft v. Umbreit, 1063.
5. ALIEN — ^Agent of Foreign Trustee in Bankruptcy. — To allow
an alien, here nominally in his character as a croflitor, but really as
the mere agent of a foreign trustee in bankruptcy, to impound prop-
erty by process of garnishment, is to set at naught the policy of our
own law to the effect that a foreign trustee or receiver in involun-
tary bankruptcy proceedings obtains no title to the debtor's prop-
erty within this state. (Wis.) Disconto Gesellschaft v. Umbreit,
1063.
6. ALIEN — Bight to Maintain Action to Prejudice of Besident
Creditors. — A nonresident alien may not sue another alien in the
courts of this f>tate for a tort committed in a foreign country, and
by means of garnishment or other provisional remedy impound prop-
erty of the defandant in this state, when one of our own citizens is
a creditor of the defendant and has taken subsequent legal proceed-
ings to impound such property for the payment of his claim. (Wis.)
Disconto Gesellschaft v. Umbreit, 1063.
ALTEBATION OF DEED.
See Deeds, 6.
Note.
Answer, contempt of court does not justify refusal of right to make,
952.
right of defendant to present and file, 9.50, 951.
striking out for refusal to attend and give deposition, 953.
striking out not justified because of contempt of court, 953.
striking out in suits for divorce for refusal to pay alimony,
954.
APPEAL AND EBBOB.
In General.
1. APPEAL. — Counsel for the Appellant cannot Complain in the
supreme court of a ruling concerning the admissibility of evidence
made by the district court, when he assumes a position in the supreme
court exactly the reverse of that which he assumed in the district
court. (Mont.) Yellowstone Park E. R, Co. v. Bridger Coal Co., 546,
2. APPEAL — Presumption. — If the record shows that a paper was
placed in evidence, it must be presumed on appeal that its contents
were made known to the jury on the trial. (Ark.) Arkansas etc. By.
Co. v. Dickinson, 54.
3. APPEAL — Bccord on — Date of Proceedings. — If the record on
appeal states that the hearing began on a certain day, and each suc-
cessive step in the proceedings, including the settling and signing of
the bill of exceptions, is introduced by the term "thereupon," with-
out naming any other date, it must be inferred that each step fol-
lowed the other without delay, and that all occurred on the date of
the hearing. (Knn.) Humbarger v. Humbarger, 204.
4. PBACTICE — Harmless Error. — Error in overruling a demur-
rer is harmless if the pleading assailed is thereafter amended, and
t
Index. 1093
the case submitted and determined on the amended pleadings. (Neb.)
Brown v. Brown, 568.
Exceptions.
5. APPEAL AND ERROR— Waiver of Exception by Failure to
Argue. — Where the brief of the appellant merely calls the attention
of the appellate court to the refusal of the trial court to give certain
requested charges, such court will assume that it is not expected to
give attention to such requests. (Mich.) Greenman v. O 'Riley, 466.
6. APPELLATE PRACTICE, — Exceptions must be overruled un-
less they affirmatively show, without the aid of extrinsic evidence, not
only that the ruling was wrong, but that the person complaining was
aggrieved, so that if the ruling would be justified or would be harm-
less to the complainant upon any possible but not impossible situation
unexplained by the exceptions, the doings below will not be disturbed
or condemned. (Me.) Purinton v. Purinton, 309.
7. APPELLATE PRACTICE— Exceptions— Finding of Facts.—
If the bill of exceptions on an appeal, or abstract of record in lieu
thereof, discloses no objections or exceptions to the failure of the
trial court to make a finding of facts, the trial court was not in error
in failure to make such finding, especially when it is admitted by
the appellant that there was no dispute about the facts. (Mo.)
O'Connor v. St. Louis Transit Co., 495.
Bill of Exceptions.
8. APPELLATE PRACTICE— BiU of Exceptions— What Must
State. — An excepting party, if he would obtain any benefit from his
exceptions, must set forth enough in the bill of exceptions to enable
the court to determine that the points raised are material and that
the rulings excepted to are both erroneous and prejudicial. It is
not enough that the court can find these characteristics by studying
the report of the evidence in support of the motion for a new trial
when it accompanies the bill of exceptions, unless it is made part
thereof. (Me.) .Jones v. Jones, 328.
9. APPELLATE PRACTICE— Bill of Exceptions.— If a bill of
exceptions itself recites that certain evidence and rulings are attached
to and made a part of such bill, and they are so plainly id( ntified that
no doubt can exist that they were settled by the court as part of
the bill of exceptions, they may be considered on appeal as such.
(Kan.) Humbarger v. Humbarger, 204.
Judgment and Beversal.
10. APPEAL — Judgment by Appellate Court. — The supreme court,
on reversing a judgment for the plaintiff, and setting aside the ver-
dict for the insufficitncy of the evidence and the refusal of the trial
court to direct a verdict for the detVndant, will not remand the case
for a new trial, but will render judgment for the defendant, if in-
justice will not thereby be done. (W, Va.) Kuffner v. Dutchess Ins.
Co., 924.
11. APPEAL AND ERROR — Reversal of Judgment. — In case of
a motion for the direction of a verdict at the close of the evidence
being denied and a verdict being ren<lered for the advers party,
and its bing held upon appeal that the motion should have been
granted, and for reasons necessarily precluding the losing party from
securing any different result by another trial than the one that
would have necessarily followed a correct decision of the motion in
1094 Index.
the first instance, this court may cause the litigation to be termin-
ated in the court below without a new trial, to that end remanding
the cause with directions to grant the motion previously denied,
and to render judgment accordingly. (Wis.) Hay v. City of Bara-
boo, 977.
12. APPEAL AND EBBOR — Bemandlng Cause for Trial on the
Merits Though the Judgment Appealed from was not Erroneous. —
If a judgment is entered in the trial court for the defendant because
of defects in the plaintiff's pleading, where it is infected with
duplicity, the appellate court may, in Maryland, in its discretion, re-
mand the cause for trial on the merits. (Md.) Milske v. Steiner
Mantel Co., 354.
See Justice's Court, 1, 2.
Note.
Arms, concealed weapons, statutes against carrying are not uncon-
stitutional, 199, 200.
constitutionality of statutes prohibiting the carrying of, 201.
courts of justice, bearing of in may be prohibited, 203.
interpretation of constitutional provision guaranteeing the right
to bear, 199, 200.
kinds of the carrying of which may not be prohibited, 202, 203.
openly carrying of deadly, whether may be made criminal, 201,
202.
regulation of the right to keep and carry, 200.
right to bear does not include right to bear for an unlawful
purpose, 199.
ASSAULT.
1. ASSAULT on Innocent Person Supposed to be an Assailant. —
If a person, while apprehensive of an attack from A, strikes B, when
he has reasonable grounds to believe that B is A, and when he further
believes that it is necessary, in the exercise of a reasonable judgment,
to strike A in order to defend himself from a threatened attack by
A, using no more force than is necessary, or appears necessary to him,
for this purpose, then he is excused on the ground of self-defense and
apparent necessity. But it is his duty to exercise the highest degree
of care practicable under the circumstances to ascertain whether the
one whom he is about to strike is in fact the one from whom he ap-
prehends danger; it is not enough that he exercises "due" or "or-
dinary care and diligence." And if he recklessly and wantonly
strikes B, he is liable in exemplary as well as compensatory damages.
(Ky.) Crabtree v. Dawson, 243.
2. ASSAULT — Whether Excusable. — An Instruction in an action
for assault and battery is objectionable, if it specifically calls the
attention of the jury in detail to the facts testified to by the defend-
ant, and relied on to excuse his conduct. (Ky.) Crabtree v. Daw-
son, 243.
ASSIGNMENTS.
1. ASSIGNMENTS — Accounts not Yet Due. — An absolute as-
signment of an account not yet due does not constitute a mere cov-
enant to pay out of the fund, even if the assignor therein agrees to
act as agent of the assignee in collecting the money. (N. J. Eq.)
Cogan V. Conover Mfg. Co., 629.
2. ASSIGNMENTS — Money not Yet Due. — An equitable assign-
ment of money to be earned operates upon the fund as soon as it is
earned. (N. J. Eq.) Cogan v. Conover Mfg. Co., 629.
Index. 1095
3. ASSIGNMENTS of Accounts not Yet Due.— If a manufac-
turer assigns as collateral security for his debt the first payment
on a contract for two implements to be made by him, and one of the
implements is substantially completed and delivered to the purchaser
prior to the appointment of a receiver for the manufacturer, and the
•price is subsequently paid to such receiver, the assignee is entitled to
such fund so far as necessary to pay the debt secured. (N. J. Eq.)
Cogan V. Conover Mfg. Co., 629.
4. ASSIGNMENTS— Notice to Debtor.— As between the assignor
and assignee and those standing in the shoes of the assignor, notice
of the assignment to the debtor or holder of the fund is not neces-
sary. (N. J. Eq.) Cogan v. Conover Mfg. Co., 629.
ATTACHMENT.
1. JURISDICTION.— In Attachment Cases the Levy Takes the
Place of the Service. Where there has been no step taken to acquire
jurisdiction of the defendant's person, and he has not submitted him-
self to the jurisdiction of the court, it is without jurisdiction to
render judgment, unless there has been a legal seizure of property
owned by him within the jurisdiction of the court, and then only
after a legal return of such seizure has been duly entered. (Ga.)
Albright-Pryor v. Pacific Selling Co., 108.
2. ATTACHMENT — Amendment of Entry of Levy. — If an at-
tachment is levied on personal property, the entry of such levy is
amendable, but the amendment does not relate back so as to render
a judgment previously entered valid. (Ga.) Albright-Pryor Co. v.
Pacific Selling Co., 108.
3. ATTACHMENT — Jurisdiction to Enter Judgment in Most be
Acquired Before the Eetum Term. — The subsequent issuing and re-
turn of summons in garnishment cannot give validity to a judgment
if there had been no seizure of the property of the defendant before
the return term, and jurisdiction had not been otherwise acquired.
(Ga.) Albright-Pryor Co. v. Pacific Selling Co., 108.
4. A JUDGMENT or Attachment Against a Nonresident When
the Betum of the Levy Does not Show to Which of the Defendants
the Property Belongs is without jurisdiction and void. (Ga.) Al-
bright-Pryor Co. v. Pacific Selling Co., 108.
5. ATTACHMENT, Levy of Must Show on Whose Property It is.
It is essential to the validity of an attachment against a nonresident
that the entry of the levy show that the property was levied on as
the property of the defendant in the attachment, and when there are
two or more defendants, the entry must show to which of them
such property belonged. (Ga.) Albright-Pryor Co. v. Pacific Selling
Co., 108.
See Garnishment.
ATTORNEY AND CLIENT.
1. ATTORNEYS' LIENS — Action to Enforce.— A statute creat-
ing a lien upon causes of action in favor of attorneys at law, and
requiring defendants in such actions after due notice of such lien,
to respect it, does not deprive a defendant of the right to settle
his suit, but it does require him, in making such settlement, to tako
into consideration the existence of such lien, and if he ignores it
and settles the suit without the consent of the attorney, be is
liable in a separate action at law brought by such attorney, for
1096 Index.
the amount of such lien. (Mo.) O'Connor v. St. Louis Transit Co.,
495.
2. CONSTITUTIONAL LAW— Attorneys' Liens— Right to Con-
tract.— Statute simply creatiug a lien upon causes of action in favor
of attorneys at law, and requiring defendants in actions, after due
notice of such lien, to respect it, is not unconstitutional as restricting-
or destroying the defendant's right to contract. (Mo.) O'Connor
V. St. Louis Transit Co., 495.
Note.
Attorney and Client, constructive trust in favor of the latter against
the former. 795.
BAIL.
See Becognizance.
BANKRUPTCY.
1. BANKRUPTCY — Preferential Payment, What not. — When a
creditor receives payment without reasonable cause to believe his
debtor insolvent, or that he intended to give a preference, although
the facts in the possession of the creditor are such as would naturally
produce in the mind of a reasonably intelligent man a doubt or raise
a suspicion of solvency, and such as would put a reasonably prudent
man upon inquiry, the payment is not preferential. (Wis.) Suflfel
V. McCartney National Bank, 1004.
2. BANKRUPTCY— Preferential Pajonent— Belief of Creditor.—
To have reasonable cause to believe that a trader or merchant is
unable to pay his debts as they become due in the ordinary course
of business is a very different thing from having reasonable cause
to believe that the aggregate amount of the debtor's available prop-
erty and assets is insufficient in amount, at a fair valuation, to pay
his debts. (Wis.) Suffel v. McCartney National Bank, 1004.
3. BANKRUPTCY — Preferential Payment — Question of Fact. —
Whether a creditor in receiving a payment had reasonable ground
to believe that a preference was intended is a question of fact
determinable by the jury or trial court. (Wis.) Suffel v. McCartney
National Bank, 1004.
4. BANKRUPTCY — Conversion of Mortgaged Property — Demand.
In an action to recover mortgaged property transferred in fraud
of the bankruptcy act, when such property has been converted before
the commencement of the action and its proceeds applied to the
mortgage indebtedness due the defendant, no demand for its return
is necessary. (Wis.) Jackman v. Eau Claire National Bank, 955.
5. BANKRUPTCY — Recovery of Unlawful Preferences — Filing of
Claims. — If a trustee brings an action to recover unlawful preferences
made by the bankrupt in fraud of the bankruptcy act, it is not neces-
sary for him to allege in his complaint that any creditor has filed
a claim in the bankruptcy proceeding, or any fact showing that it
was necessary to recover the alleged preference. (Wis.) Jackman
v. Eau Claire National Bank, 955.
6. BANKRUPTCY — Illegal Preferences. — In an action by a trus-
tee in bankruptcy to recover the proceeds of property alleged to
have been transferred in fraud of the bankruptcy act, the question
as to whether there was one or more classes of creditors, and in what
manner the property sought to be recovered would be administered,
Index. 1097
does not vary the legal rights of the trustee to recover the property.
(Wis.) Jaekinan v. Eau Claire National Bank, 955.
7. BANKRUPTCY— Jurisdiction of State Courts.— State courts
have jurisdiction to litigate questions arising between a trustee in
bankruptcy and any adverse claimant concerning transfers of prop-
erty claimed to have been made in fraud of the national bankruptcy
act. (Wis.) .Jackman v. Eau Claire National Bank, 955.
8. 'bankruptcy — Unlawful Preferences — Conversion — Trover. —
If a transfer of property in fraud of the national bankruptcy act
consists in carving out an interest in the property and transferring
it by means of a chattel mortgage, and the bankrupt then sells the
mortgaged property to a third person subject to the mortgage, such
third person then valuing the mortgage interest and delivering it
to the mortgagee in notes which are subsequently paid, such notes
are not property obtained by the mortgagee, but instruments by
mean^ of which the mortgage interest is transferred to him in the
form of money, and such transactions constitute a wrongful conver-
sion of the property to the extent of such mortgage interest for the
recovery of the proceeds of which trover will lie at the suit of the
trustee in bankruptcy. (Wis.) Jackman v. Eau Claire National
Bank, 955.
9. BANKRUPTCY — ^Unlawful Preference — Notice of Insolvency.
If a chattel mortgage is claimed to have been given to create a pref-
erence in fraud of the provisions of the national bankruptcy act, the
question of the knowledge of the mortgagee of the mortgagor's insol-
vency at the time of the execution of the mortgage is one of fact,
and such mortgagee is chargeable with notice of all facts which a
reasonable inquiry in view of the circumstances with respect to the
mortgagor's financial condition, or which were brought home to him,
might fairly be expected to disclose. (Wis.) Jackman v. Eau Claire
National Bank, 95i^.
10. BANKRUPTCY — Unlawful Preferences — Notice of Insol-
vency.— If a creditor receives security for the payment of his claim,
with knowledge, or reasonable means of knowledge, of the insolvency
of the debtor at the time, and that is followed within fonr months
by the commencement of proceedings in bankruptcy against or on
the part of the debtor, the intention of such security being to give
the favored creditor a preference, and yot have the same standing as
other creditors for the balance of his claim, as he would have if the
transaction were valid, the effect thereof is to give such crctlitor an
undue advantage and preference within the meaning of tlie national
bankrupt act. (Wis.) Jackman v. Eau Claire National Hank, 9.").'>.
11. BANKRUPTCY — Conflicting Actions. — If a trustee in bank-
ruptcy brings an action to recover from a guilty agent the value of
property wrongfully converted by the debtor, this is? not a bar to an
action by such trustee to recover the value of the same property
from the guilty princii)al, when both actions are commenced on the
theory that such property was converted in fraud of the bankruptcy
act. (Wis.) Jackman v. Eau Claire National Bank, 953.
12. BANKRUPTCY — Unlawful Preferences — Recovery. — A trusteo
in bankruptcy acting for creditors in an action to recover unlawful
preferences made by the debtor is not entitled to recover money
paid him by mistake, and by him paid over to the person holding
such preferences, when such money is no part of the bankrupt's
assets. (Wis.) .rackman v. Eau Claire National Hank, 955.
13. BANKRUPTCY — Unlawful Preferences — Lien Claims.— In an
action brought by a trustee in bankruptcy to recover the value of
1098 Index.
property of the debtor wrongfully converted in fraud of the bank-
ruptcy act, he is not entitled to recover money realized by the person
holding such property in the enforcement of lien claims thereon.
Such money is a mere realization by such person of his interests in
the property paramount to the rights of the trustee, and not in
violation of the bankrupt act governing unlawful preferences. (Wis.)
Jackman ▼. Eau Claire National Bank, 955.
See Aliens, 5.
BANKS AND BANKINO.
»
1. BANES AND BANKING — Unaccepted Checks as Assignment
of Deposit. — An unaccepted check or draft in the usual form does not,
in the absence of exceptional circumstances, amount to an assign-
ment, in law or equity, of any part of the drawer's deposit in bank.
(Kan.) Clark v. Toronto Bank, 173.
2. BANKS. — The Belation Between a Bank and Its Depositors is
that of Debtor and Creditor. The money deposited becomes the ab-
solute property of the bank, and as it is merely the debtor of the
depositor, it has no lien on his deposit for the purpose of securing
a debt due to it from him, though it may have the right to set off
the one against the other. (Ga.) Davenport v. State Banking Co.,
68.
3. A BANK Does not Owe to the Stirety of an Indebtedness in Its
Favor the Duty of exercising its right to set off a sum due from it to
the depositor against the indebtedness of such depositor to it which
the obligation of surety has created. (Ga.) Davenport v. State
Banking Co., 68.
4. BANKING — Surety, Duty of Bank to Apply Deposit to the
Satisfaction of Indebtedness Secured by. — If a bank holds the note
of one of its depositors with a surety, it owes no duty to the surety
to apply to the satisfaction of such note a sum due by it to the
depositor on his general deposit account, and hence such surety re-
mains liable notwithstanding he demands that such application be
made, and the bank refuses to make it. (Ga.) Davenport v. State
Banking Co., 68.
5. BANKS AND BANKING — Payment by Check.— If a bank hold-
ing a note for collection delivers it to an indorser on the day of ma-
turity in exchange for such indorser 's check on another bank, and
after inquiring by telephone of the drawee bank about the check,
and being informed, through mistake, that it would be paid, enters
the amount to the credit of the owner of the note, and on the next
day payment of the check, which was at no time good, is refused for
want of funds, and the collecting bank delivers it to the drawer,
and immediately recovers possession of the note, these transactions
do not constitute payment of the note. (Kan.) Interstate National
Bank v. Eingo, 176.
6. BANKS AND BANKING— Note Held for Collection— Ac-
ceptance of Worthless Check — Liability of Bank. — If a bank, holding
a note for collection, surrenders it to the maker in exchange for his
worthless check upon another bank, and upon the dishonor of sucb
check regains possession of the note as a subsisting obligation against
all persons in interest, with no actual prejudice to the owner of the
note from the transaction, which takes place after banking hours
of one day and before their opening on the next day, no liability is
created against the collecting bank in favor of the owner of the note.
(Kan.) Interstate National Bank v. Bingo, 176.
Index. 1099
7. BANKS AND BANKING— Collections— Provisional Credit.—
If a note or draft is sent by one individual or bank to another bank
to collect, and to remit the proceeds to the sender, the relation of
principal and agent is created, and not that of creditor and debtor,
and having received the note or draft for collection, the collecting
bank does not owe the amount thereof to the sender until collected,
and though it may credit him in its books therefor, such credit may be
treated as provisional, and if the paper is afterward dishonored, it
may cancel the credit. (Kan.) Interstate National Bank v. Eingo,
176.
8. BANKS AND BANKING — Collections — Erroneous Credit to
Owner of Note — Liability of Bank. — If a bank holding a note for col-
lection surrenders it to the maker in exchange for his worthless
check on another bank, and upon the dishonor of such check imme-
diately regains possession of the note as a subsisting obligation against
all interested parties, no liability arises against the collecting bank
in favor of the owner of the note from the facts that upon being
orally promised payment by mistake on the part of the bank on which
such check is drawn, it gives such owner credit for the amount, mails
him a statement to that effect, adding that the credit is subject
to collection, and gives him notice of the dishonor of the check
early in the morning of the next day after the credit is extended.
(Kan.) Interstate National Bank v. Eingo, 176.
BATHHOUSE-KEEPEE.
BATHHOUSES and Bathing Establishments, Liability of
Keepers of. — The proprietor of a bathing establishment who receives
from his patrons a sum demanded for the privilege of the bath and
assumes the custody of their wearing apparel while they are bathing,
is a voluntary custodian for profit, and bound to exercise due care
to guard against the loss of theft by others having access to his
establishment by his permission. He is a bailee for hire and bound
to exercise ordinary care, and liable for his failure to do so. (Ga.)
Walpert v. Bohun, 114.
BENEFIT ASSOCIATIONS.
1. BENEFIT SOCIETY — Change of Beneficiaries — Waiver of
Irregularities A waiver by a mutual benefit association of a non-
compliance with its by-laws by a member in changing his benefi-
ciaries must, to be effective, occur during his lifetime; but if such
death of the insured, take advantage thereof. (Mont.) Knights of
Maccabees v. Sackett, 532.
2. BENEFIT SOCIETY — Right to Change Beneficiaries.— A mem-
ber of a mutual benefit association may change his beneficiaries; but,
as a rule, to which there are exceptions, he must proceed in accord-
ance with the regulations contained in the policy and by-laws, and
any material deviation therofrom will invalidate the transfer.
(Mont.) Knights of Maccabees v. Sackett, 532.
3. BENEFIT SOCIETY — Change of Beneficiaries — Where not
Effected. — If the bylaws of a benefit association provide that a
change of beneficiaries takes effect upon a delivery to the local
record-keeper of a written request for a change, and a member de-
posits his application for a change in the mail, the change is not
effected if he dies before the d.livery of the mail to the record-
keeper. By making the mail his agent, he asaumes the risk of Buch
1100 Index.
a failure of or delay in the delivery of his request as will prevent its
becoming ofTcotual. (Mont.) Knights of Maccabees v. Sackett, 532.
4. BENEFIT SOCIETY — Change of Beneficiaries — When not
Effected. — Wliere the by-laws of a benefit association provide that a
change of beneficiaries takes efl"cct upon a delivery to the local
record-keeper of a written request for a change, and a member de-
posits such a request in the mail, which does not reach the post-
office to which it is destined until after his death, though it is actu-
ally delivered on the day of such death only a few hours after its
occurrence, the contemplated change does not affect the rights of the
original beneficiary. (Mont.) Knights of. Maccabees v. tSackett, 532.
BILL OF EXCEPTIONS.
See Appeal and Error, 8, 9.
BILL OF PARTICULAES.
See Pleading, 4.
BILLS AND NOTES.
Delivery.
1. BILLS AND NOTES — Delivery. — A note does not become a
liability until delivery. (Me.) Jones v. Jones, 328.
2. BILLS AND NOTES — Delivery to Agent — Death of Maker.—
If the maker of a note places it in the hands of a third person merely
for delivery to the payee, such third person is the agent of the maker,
and not of the payee, and if the maker dies before delivery by the
agent, his authority is thereby revoked and a subsequent delivery by
him is ineffectura to create a liability. (Me.) Jones v. Jones, 328.
3. BILLS AND NOTES — Delivery on Happening of Contingency —
Burden of Proof. — If a note is left with a third person to be delivered
to the payee upon the happening of a contingency, the first delivery
is complete and irrevocable, but the burden of proving such delivery
is upon the person setting it up. (Me.) Jones v. Jones, 328.
Payment.
4. BILLS AND NOTES — Payment to Unauthorized Person. — The
maker of a negotiable promissory note can satisfy it only by pay-
ment to the owner at the time or to such owner's authorized agent.
If the recipient of the money is not actually authorized, the payment
is ineffectual, unless induced by unambiguous direction from the
owner or justified by actual possession of the note. This rule applies
generally to all negotiable paper, independently of the existence of
any mortgage or other security. (Wis.) Marling v. Nommensen,
1017.
BONDS.
8ee Constitutional Law, 5.
BROKERS.
1. BROKER — When Earns Commission. — If the owner of land
agrees to pay a broker a percentage of the price for which the prop-
erty shall be sold to any purchaser produced by him, the broker
earns his commission if he produces a customer to whom the prin-
cipal in fact sells. (Wis.) Bo we v. Gage, 1010.
Index. 1101
2. BROKER — Instmction in Action for ComTDission. — Tii an ac-
tion by a real estate broker to recover his commission, an instruction
that "where a sale is effected through the efforts of a real estat»'
agent or through information derived from him so that he may bo
said to be the procuring cause, his services are regarded in law as
highly meritorious and beneficial, and the law leans to that construc-
tion which will best secure the payment of his commission rather
than the contrary," is erroneous, as suggesting that real estate agents
are more meritorious or entitled to more favor than people in other
walks of life. (Wis.) Bowe v. Gage. 1010.
3. BROKER — ^Fraudulent Settlement by Principal. — If the owner
of land agrees to pay a broker a percentage of the selling price for
which the property shall be sold to any purchaser produced by him.
and subsequently the principal represents that he has decided to
keep the land, and induces the broker to accept a small sum in full
for his services, whereupon the principal himself sells to a customer
previously introduced by the broker, the broker, when he sues for his
commission, is entitled to retain the amount paid, subject only to an
equity in favor of the principal that, if the broker shows himself
entitled to recover by reason of a performance of his contract, such
payment shall be applied thereon. If this application is offered by
the complaint, and made by the judgment, this is in practical effect
a return of the money. (Wis.) Bowe v. Gage, 1010.
BUILDING CONTRACT.
See -Contracts, 3-8.
CANCELLATION OF INSTRUMENTS.
EQUITY JURISDICTION — Mistake — Cancellation of Deed.— If
a grantor gives a warranty deed of land which ho does not own, un<lor
the mistaken belief that he has title thereto, equity will not cancel
the deed when there is no fraud, falsehood, misrepresentation or con-
cealment on the part of such grantor. (Me.) Bibber v. Carville, 303.
CARRIERS.
Connecting Carriers.
1. CARRIERS, Connecting, Presumption as to the One on Whose
Line Damage Occurred. — Whoro goods ar.> transporte.l hy sui-cis^ivo
carriers, and an action is brought to recover againHt the termiiinl
carrier for damage to the goods, it is not enough to show that they
were delivered to the initial carrier in good cotxlition, hut the plain-
tiff must further prove that they remained in such condition when
received by the defendant. There is no prrsumption that the dam-
age was suffered on its road rather than on fliat of the initial car-
rier. (Mich.) Rolfe v. Lake Shore etc. Ry. Co., 389.
Statutory Fefjxilafion of Sale of Passcnr]rr Tirlct.i.
2. CONSTITUTIONAL LAW -Carriers, Statutes Relating to Non-
transferable Tickets Only.— A statute j.r..liil>iting traflic on nontrans-
ferable signature tickets issued by common oarri.rH and sold below
the standaril rates, and making such traflic a misdi'nirnnor, is not
unconstitutional on the ground that it d.-l. gates to carrifrs authority
to create a penal offense or not. as they may fhoose to isHue or not to
issue tickets of that class. (T.nn.) Samu.ison v. State, H05.
1102 Index.
3. CONSTITUTIONAL LAW— Carriers, Bestricting Sale of Tick-
ets to Agents of. — A state, in the exercise of its police power, may,
by regulations, require carriers to sell their own tickets, either
directly or through their agents, and may prohibit all other persons
from making such sales. (Tenn.) Samuelson v. State, 805.
4. CONSTITUTIONAL LAW— Carriers— Property Eights of Orig-
inal Purchasers of Tickets. — A statute prohibiting traffic in nontrans-
ferable signature passenger tickets issued and sold below a standard
schedule rate is not invalid for depriving persons of property rights
without due process of law. (Tenn.) Samuelson v. State, 805.
5. CAEBIEBS, Begulation of, When not Invalid for Vagueness. —
A statute prohibiting traffic in passenger tickets sold and issued for
less than standard schedule rates is not void for vagueness. (Tenn.)
Samuelson v. State, 805.
6. CABBIEBS, Statutes Bestricting Bight to Sell Tickets of. — A
statute making it unlawful for any person other than an authorized
agent of a common carrier to sell or otherwise deal in nontransfer-
able signature passenger tickets issued below the standard schedule
rate is not invalid as prohibiting such sales by everyone except
such agents, while permitting them to sell. The statute is not sus-
ceptible of a construction permitting sales by such agents other than
the original sale by them in behalf of their employers. (Tenn.)
Samuelson y. State, 805.
CEBTIOBABI.
CEBTIOBAEI is not the Proper Bemedy for Belief Against a
Judgment on the Ground that Process was not Served on the defend-
ant, if the return will not disclose the facts as to the want of such
service. (Mich.) Wilcke v. Duross, 394.
COMITY.
COMITY — Its Definition and Principles. — Comity is defined as
courtesy, a disposition to accommodate. By the rules of comity be-
tween nations, the courts of one state will voluntarily enforce the
laws of a friendly state or nation when, by such enforcement, they
•will not violate their own public policy or laws or injuriously affect the
interests of their own state or of their own citizens. (Wis.) Dis-
conto Gesellschaft v. Umbreit, 1063.
COMMEBCE.
INTEBSTATE COMMEBCE— Statute Prohibiting Traffic In
Passenger Tickets. — A statute prohibiting traffic in nontransferable
passenger tickets issued for less than the standard price, though ap-
plicable to tickets for transfer from one state to another, is not in-
valid as interfering with interstate commerce. It does not regulate
nor cast any burden on commerce, but is merely a police regulation.
(Tenn.) Samuelson v. State, 805.
COMMISSIONS.
See Brokers.
CONSTITUTIONAL LAW.
1. CONSTITUTIONAL LAW— Statute Void in Part.— In case of
a scheme of legislation for a particular purpose, created by the en-
Index. 1103
actment of a law specially referring to the subject, and to other laws
required for a complete plan, if the special enactment is the inducing
provision and is unconstitutional, the whole is inefficient. The mat-
ter is governed by the rule, that where a part of a law is unconstitu-
tional and was the inducement to the rest, which by itself would not
have been enacted, the whole is void. (Wis.) Huber v. Martin, 1023.
2. CONSTITJTIONAL LAW — Special Laws — Class Legislation. —
A statute undertaking to cover a certain class of persons engaged in a
particular profession, as attorneys at law, but which does not under-
take to select any particular person in that class, and applies to all
alike who fall within such class, is not unconstitutional as special or
class legislation. (Mo.) O'Connor v. St. Louis Transit Co., 495.
3. CONSTITUTIONAL LAW — Police Power — Public Nuisances. —
In * the exercise of the police power, the legislature has au-
thority to declare property which may be used only for an unlawful
purpose to be a public nuisance and authorize it to be abated sum-
marily, but if property which is innocent in its ordinary and proper
use has been used for an unlawful purpose, it is beyond the power
of the legislature to order its summary forfeiture to the state as a
penalty or punishment for such unlawful use without giving its
owner an opportunity for a hearing, and a statute thus providing is
unconstitutional as depriving such person of his property without
due process of law. (Neb.) McConnell v. McKillip, 614.
4. CONSTITUTIONAL LAW — Impairment of Obligation of Con-
tracts.— A statute which deprives a holder of state bonds of the
right to use his bond in payment of the purchase price of a certain
class of public lands is not unconstitutional as impairing the obli-
gation of a contract, if such statute provides for the payment by the
state of the bond in money upon due presentation. (Ark.) Tipton
V. Smythe, 44.
5. CONSTITUTIONAL LAW — ^Dne Process of Law. — A statute
providing for the calling in and payment of state bonds, and au-
thorizing the state treasurer to pay valid bonds only, and thereby
imposing upon him the duty of ascertaining the validity of all bonds
presented for payment, is not unconstitutional as depriving a bond-
holder of his property without due process of law, as an appeal
to the courts is always open to him from the adverse decision of
the state treasurer. (Ark.) Tipton v. Smythe, 44.
See Attorney and Client, 2; Carriers, 2-6; Game Laws; Elections;
Limitation of Actions, 1-4; Officers; Statutes; Taxation; Weapons.
Note.
Constitutional Law, answers, striking out of, when not permissible,
950-954.
Contempt of Court does not warrant refusal of right to answer and
defend, 953.
CONTRACTS.
Validity.
1 CONTRACT— Agreement to Pay for the Return of Stolen Prop-
erty.—An agreement to pay for the rt-turn of Htolen property or a
check given to procure such return, is neither illegal, immoral nor
against public policy, and may be enforced where it does not inter-
fere with the public interest and duty, respecting the apprehension
and conviction of the criminal. (Md.) Schirm v. Wieman, 3<3.
1104 Index.
2. Contracts. — Want of Mutuality is No Defense, even in an
action for specific performance of a contract, wlien the party not
bound thereby has performed all of the conditions of the contract
and brought himself clearly within its terms. (Neb.) Dickson v.
Stewart, 596.
Building Contract.
3. CONTRACTS, Construction of. — In Construing a Contract
Courts Should Place Themselves in the Same Situation as the Parties
were who made the contract, so as thereby to judge of the meaning of
the words and a correct application of the language to the things
described. (Md.) Milske v. Steiner Mantel Co., 354.
4. CONTRACT for the Construction of a Building, When not to
be Construed in Connection with a Bond Given by the Contractor. —
If a contract is entered into for the construction of a building
within a time and on the conditions therein specified, and the con-
tractor gives a bond with a surety for the performance of the contract,
within such time and upon such conditions, the covenants and con-
ditions of the bond are not to be read into the contract, and taken
not only as narrowing and limiting the obligations of the person con-
tracting for the erecting of the building, but also as imposing new
and additional duties upon him. (Md.) Milske v. Steiner Mantel
Co., 354.
5. CONTRACT for the Construction of a Building — Bond Declar-
ing that Neither the Principal nor the Surety Therein Shall be Liable
for Damages Resulting from the Act of God. — If a building contract
provides that the building shall be constructed within a time speci-
fied and according to certain plans and specifications, and that the
builder will execute a bond for the faithful performance of his
duties in erecting the building, and such bond, when executed and
accepted, provides that neither the principal nor the surety 'shall
be liable for damages resulting from the act of God, the bond does
not vary or alter the meaning of the contract so as to make the
owner answerable for the contract price, or for a portion thereof,
when the building as partly constructed is destroyed as the result
of a storm. (Md.) Milske v. Steiner Mantel Co., 354.
6. BUILDING CONTRACT— Right to Recover on Partial Per-
formance.— If a building contract is entered into, but provides for the
payment of specified amounts as the work progresses, an action may
be brought for the payment of any such installment when it be-
comes due by the terms of the contract. (Md.) Milske v. Steiner
Mantel Co., 354.
7. BUILDING CONTRACT. — Notwithstanding the Destruction
of a Partially Constructed Building by a Storm, the owner is under
obligation to permit the builder to perform his contract by rebuilding
the structure. (Md.) Milske v. Steiner Mantel Co., 354.
8. BUILDING CONTRACT — Acceptance as Waiver. — The owner
of land on which he contracts to have a house erected may recover
damages for defective construction, although he pays the contract
price, takes possession, and does not discover the defect until eight
months thereafter. (Ky.) Ludlow Lumber Co. v. Kuhling, 254.
Breach of Contract — Evidence.
9. EVIDENCE — ^Breach of Contract. — In an action to recover for
breach of contract, evidence that one of the parties borrowed money
to enable him to fulfill his contract is admissible upon the issue as
Index. 1105
to his ability and readiness to perform his part of the agreement,
(N. C.) Ives V. Atlantic etc. E. R. Co., 732.
10. EVIDENCE— Breach of Contract— Act of Agent.— In an ac-
tion to recover for breach of contract, evidence of what defendant's
agent especially deputed to make and execute such contract said
and did in that particular transaction is admissible. CN. C.) Ives
V. Atlantic etc. R. E. Co., 732.
Bepudiation of Settlement — Doctrine of Refund.
11. REPUDIATION OF SETTLEMENT.— The Whole Doctrine of
Refund upon repudiation of a contract of settlement is not technical,
but equitable, and requires merely that the practical rights of the
other party shall not thereby be prejudiced; that he shall be no
worse oflf than if he had never made the contract of settlement.
Under this principle, application of money paid on a void settlement
to an actual existing debt due from the payor entirely satisfies all
requirements. (Wis.) Bowe v. Gage, 1010.
See Sunday Contracts.
CONVERSION.
See Trover.
CORPORATIONS.
Existence and Termination — De Facto Corporation.
1. CORPORATIONS — Effect of Termination. — The supposed com-
mon-law rule, that upon the termination of a corporation its debts be
come extinguished, its realty reverts to the grantors and its personal
property goes to the sovereign, if it ever existed in fact, is wholly
obsolete, except as to purely public corporations. (Wis.) Hubcr v.
Martin, 1023.
2. CORPORATION. — The Law That Corporate Existence cannot
be Inquired Into, except by judicial proceedings in the name of the
state, does not apply to a pretended but not even a de facto corpora-
tion. (Wis.) Huber v. Martin, 1023.
3. CORPORATION DE FACTO.— An Unconstitutional Act of the
Legislature is not a sufficient basis for a corporation de facto. That
can exist only in case of a law under which it might have been cre-
ated de jure. (Wis.) Huber v. Martin, 1023.
Expiration and Beneual of Charter.
4. CORPORATIONS. — After the Charter of a Corporation has
Expired It is Without Authority to take any procrcdinj^s of a cor-
porate nature for the purpose of expelling a member of the late
corporation, and thus depriving him of property rights. (Qa.)
United Brothers v. Williams, C4.
5. CORPORATIONS. — On the Expiration of the Charter of a
Corporation Its Property is Held In Trust for its members. (Oa.)
United Brothers v. Williams, 64.
6. CORPORATIONS. — On the Renewal of a Corporate Charter
Which has Theretofore Expired, all the property of the old corpora-
tion then in the hands of its ollicers and numbers is carried into the
new corporation as created by the renewal of the charter. (Qa.)
United Brothers v. Williams, ()4.
7. CORPORATIONS— Rights of the Members of the Old Corpora-
tion on the Renewal of Its Charter. — On the renewal of the charter
Am. 8t. Rep., Vol. 115—70
1106 Index.
of an expired corporation, each person interested in the assets of the
corporation as a member at the date the old charter expired becomes
a member of the corporation created by the renewal, and the corpora-
tion as renewed is bound to admit into membership every person
interested in the property of the old corporation as it existed at
the date of the expiration of the charter. (Ga.) United Brothers
V. Williams, 64.
Expulsion of Members.
8. CORPORATIONS. — Mandamus is a Proper Remedy for One
"Who has Been Unlawfully Deprived of His Privilege as a Member
of the Corporation. (Ga.) United Brothers v. Williams, 64.
9. CORPORATIONS.— The Expulsion of a Member of a Corpora-
tion Because He has Testified Against It in an action to which it was
a party is wholly unauthorized where there is no claim that he tes-
tified falsely, and if the corporate charter expires and a new one
is obtained he cannot be denied membership on account of such
testifying. (Ga.) United Brothers v. Williams, 64.
Purchase of Stock in Rival Company.
10. CORPORATION — Purchase of Stock of a Rival to Prevent
Competition. — If one corporation purchases a majority of the stock
of another for the purpose of controlling the latter and preventing
competition, the transaction is one which the courts will not uphold.
(111.) Dunbar •«'. American Telephone etc. Co., 132.
11. CORPORATIONS, Purchase of the Stock of Another but in the
Name of a Natural Person. — If the stock of one corporation is pur-
chased by another with a view to prevent competition, the transaction
is not relieved of its unlawful character by the fact that the purchase
is made by and in the name of a natural person. To hold otherwise
would sustain a transaction illegal in its character accomplished by
indirection when it could not be done if the method were direct.
(111.) Dunbar v. American Telephone etc. Co., 132.
12. ONE CORPORATION cannot Become a Stockholder in An-
other Unless such power is given to it by its charter or is necessarily
implied thereunder, especially if the purpose of the purchase is to
control the management of the other corporation. (111.) Dunbar v.
American Telephone etc. Co., 132.
13. CORPORATIONS — Minority Stockholders, Right to Enjoin
Scheme to Acquire Stock by Rival Corporation to Prevent Competition.
If a corporation, for the purpose of preventing competition between
it and a rival corporation, causes a majority of the stock of the
latter to be purchased for the benefit of the former, the minority
shareholders are entitled to an injunction to prevent the voting of the
stock so purchased. (HI.) Dunbar v. American Telephone etc. Co.,
132.
Option for Sale of Stoclc.
14. OPTIONS UNDER SEAL — Consideration — Presumption. — An
option 'under seal for the sale of shares of stock in a corporation is
in the nature of a continuing offer to sell, and is conclusively pre-
sumed to be m.ade upon a sufficient consideration. (Va.) Watkins v.
Robertson, 880.
15. OPTIONS UNDER SEAL — Specific Performance — Damages. —
An option under seal for the sale of shares of stock in a corpora-
tion, after the agreement is delivered to the offeree, cannot be revoked
during the time stipulated for, and if exercised by the acceptance
I
Index. 1107
of the offer, within the time limited, the agreement will be spe-
cifically enforced, or damages may be recovered for the breach, not-
withstanding an attempted revocation. (Va.) Watkins v. Robert-
son, 880.
16. OPTIONS Under Seal — Consideration — Estoppel to Deny. — The
recital of the payment of a consideration in an option under seal for
the sale of shares of stock in a corporation cannot be contradicted
nor its sufficiency questioned so as to defeat the operation of the
option according to the purpose designated in the contract creating
it, in the absence of fraud, illegality or mistake. This rule applies
with great force where the right of a third person to enforce the
contract and option is involved. (Va.) Watkins v. Robertson, 880.
Licibility for Torts.
17. CORPORATIONS — Liability for Torts. — Private corporations
are liable for their torts committed under such circumstances as
would attach liability to private persons. That the conduct com-
plained of necessarily involved malice or was beyond the scope of
corporate authority, constitutes no defense. (N. C.) Sawyer v. Nor-
folk etc. R. R., 716.
Foreign Companies.
18. FOREIGN COEPOEATIONS— Subjection of to the Policy of
the State. — A corporation coming into the state is subject to all the
rules and regulations provided by its laws, and therefore cannot have
power to purchase the stock of a rival corporation for the purpose
of reducing competition between them, if a domestic corporation has
not such power. (HI.) Dunbar v. American Telephone etc. Co., 132.
See Label and Slander.
Note,
Corporations, libel by agent of, when liable for and when not, 721,
723.
libel by, criminal liability for, 724.
libel by, damages exemplary, when should be exonerated from,
726.
libel by, damages for, measure of, 725, 726.
libel by, editors' or officers' liability for, 724.
libel by, exemplary damages for, 724. 725.
libel by, liability of in punitive damages for, 723.
libel by, officer of, when not pcrsoually liable for, 722.
libel, evidence necessary to support action for, 723.
libel, liability for, 721.
libel, malice necessary to support action against for, 723.
COTENANCY.
See Tenancy in Common.
COURTS.
Jurisdiction.
1. JURISDICTION. — In an Action Against a Nonresident, where
there is only substitutrd service of proct'ss, the court acquires no
jurisdiction for m< re purpoHcs of |K-r8(»niil adjudication, but only to
enter a jiulgment with nfrn-nce to or to be inforced upon property
within the state, or a jiKlgnu tit concerning' the Htntus of one of our
own citizens. (Wis.) Discouto Cm Htllschaft v. Unibreit, 1UC3.
1108 Index.
2. JUDGMENTS — Jurisdiction. — A petition or complaint must
be filed in the court whose action is sought, or the subject matter must
be otherwise presented for its consideration in some mode sanctioned
l\v law, in order to confer jurisdiction upon the court to render judg-
ment. (Ark.) Swing v. St. Louis Refrigerator etc. Co., 38.
Probate Courts.
3. PROBATE COURTS have Jurisdiction to settle and sign bills of
exceptions. (Kan.) Humbarger v. Hunibarger, 204.
4. PROBATE COURTS — Sumnjary Proceedings to Discover and
Recover Property. — Summary proceedings in probate courts authoriztd
by statute for the discovery and to compel the delivery of property
of an estate suspected of having been concealed, embezzled or con-
veyed, cannot be employed to enforce the payment of a debt, or lia-
bility for the conversion of the property of the estate, or to try con-
troverted questions of the right to property as between the representa-
tive of the estate and others. (Kan.) Humbarger v. Humbarger,
COVENANTS.
COVENANTS— Breach— Right of Action.— If land subject to
a mortgage is conveyed with warranty of title and against encum-
brances, the covenantee's right of action for breach of the covenant
accrues on his paying the judgment recovered by the mortgagee's
receiver for the purpose of saving the land from sale. (Ark.) Scog-
gin V. Hudgins, 60.
DAMAGES.
1. DAMAGES for Wounded Feelings are not Punitive but Com-
pensatory, and the estate of a decedent may be liable for such dam-
ages. (Ga.) Morris v. Duncan, 105.
2. PUNITIVE DAMAGES Against the Estate of a Decedent can-
not be Awarded, because, on account of his death, the object in
awarding such damages must fail. (Ga.) Morris v. Duncan, 105.
See Death.
DEATH.
1. NEGLIGENCE — Death of Minor Child — Emancipation. — The
right of a parent to recover for the negligent killing of his minor
son in no way depends upon the fact of the emancipation of the
son prior to his entering into defendant's employment. The right
to recover does not depend upon the services which the deceased
could have rendered to his father. (Mo.) Matlock v. Williamsville
etc. Ry. Co., 481.
2. NEGLIGENCE — ^Death of Minor Child — Misrepresentation of
Age — Right of Parent to Recover. — If a minor child is negligently
killed by his employer, the fact that he misrepresented himself to be
of age in order to obtain the employment, and that his employer
accepted him, relying upon his representations, does not bar a suit
Tny the minor's parent to recover the damages provided by statute
for the negligent killing of a minor child. (Mo.) Matlock v. Will-
iamsville etc. Ey. Co., 481.
DEEDS.
1. DEEDS — Voidable in Part. — A contract of conveyance, if
voidable in part, is voidable as to all, as there can be no apportion-
ment thereof. (Ark.) Keeder v. Meredith, 22.
Index. 1109
2. CONVEYANCE, Failure to Name a Grantee Therein. — The
fact that the name of the grantor does not appear in a conveyance is
not a fatal defect, if, from the whole instrument, it sufficiently ap-
pears to be his contract and deed and clearly expresses his intention
to convey the property, and the omission of the pronoun "I" there-
from is evidently a clerical error which is supplied by the context
and subsequent recitals of the deed. (Tenn.) Insurance Co. of Ten-
nessee V. Waller, 763.
3. CONVEYANCE, Construction of. — A conveyance granting land
to two parties and the survivor of them, and to their heirs and as-
signs, does not make the grantees joint tenants of the fee, but does
make them joint tenants for life, with a remainder to the survivor in
fee, and a conveyance by one of the grantees does not convert the
estate into a tenancy in common, or have any effect against the
other grantee after the death of the one executing the conveyance.
(Mich.) Finch v. Haynes, 447.
4. DEEDS — Exceptions and Reservations. — An exception keeps a
deed from passing the thing excepted; a reservation reserves some-
thing out of the thing granted. (W. Va.) Ammons v. Toothman, 908.
5. DEEDS — ^Exception of Oil-well — ^Deepening of Well. — If a deed
conveys oil in land "except a well now producing oil," and that
well, ceasing to be productive, is deepened by the lessee to a different
sand rock, the oil produced from such rock is within the exception
of the deed. (W. Va.) Ammons v. Toothman, 908.
6. DEEDS — Effect of Alteration. — If a deed conveying land to
a certain person is properly acknowledged, and subsequently the name
of the grantee is stricken out and that of his wife inserted, without
the knowledge or consent of the grantor, and the deed is then re-
corded, it is not, in its altered form, binding on the grantor, and does
not transfer any title to the original grantee's wife. (N. C.) Perry
V. Hackney, 741.
See Husband and Wife, 1,
Note.
Definition of constructive trust in land, 774.
of due process of law, 950.
of express trust in land, 774.
of resulting trust in land, 775.
of partnership, 401-407.
DESCENT AND DISTRIBUTION.
1. DESCENT AND DISTRIBUTION — Inheritance by Morderer. —
If the statute of descents provides in clear and unambiguous terms
that a husband shall inherit from his wife dying intestate, and makes
no exception on account of crime on his part, the courts cannot, upon
considerations of public policy, so interpret the statute as to exclude
from the inheritance one who murders his wife for the purpose of ac-
quiring her property. (Kan.) McAllister v. Fair, 233.
2. DESCENT AND DISTRIBUTION— Right of Criminal to In-
herit.— If the statute of dfscciita contains no exception on account
of crime by one entitled to inherit under its terms, the courts can add
none. (Kan.) McAllister v. Fair, 233.
DIVORCE.
1. DIVORCE — Moral Turpitude Voluntary Manslaughter. — Under
a statute giving aa a ground for divorce the conviction of either
1110 Index.
party of an offense involving moral turpitude, and under which he
or she is sentenced to the penitentiary for a term of two years or
longer, a wife becomes entitled to a divorce on her husband being
convicted of voluntary manslaughter and sentenced to the penitenti-
ary for a term of more than two years. (Ga.) Holloway v. Hollo-
way, 102.
2. DIVORCE FOR CRIME— Pardon, Effect of.— If a husband is
convicted and sentenced for a crime entitling his wife to a divorce,
his subsequent pardon by the governor does not destroy her right
to such divorce. (Ga.) Holloway v. Holloway, 102.
3. DIVORCE — General Demurrer, When Properly Overruled. —
Where a bill for divorce has two grounds or matters of relief in that
it charges adultery calling for an absolute divorce, and desertion
calling merely for a decree of separation, a general demurrer which
does not separate these charges is properly overruled, although the
bill m.'iy be bad because it does not name the particeps criminis in
adultery, nor give time, place and circumstance. (W. Va.) Trough
V. Trough, 940.
4. DIVORCE — Denial of Right to Defend Suit. — In an action for
a divorce the court has no power, because the defendant has failed
to pay suit money and temporary alimony required of him, to strike
out and disregard depositions filed by him in defense of the suit,
and grant a final decree of divorce against him. (W. Va.) Trough
V. Trough, 940.
5. DIVORCE. — Confessions of Adultery made in the country are
not admissible in evidence in a suit for a divorce for that offense.
(W. Va.) Trough v. Trough, 940.
Note.
Divorce, alimony, refusal to pay, striking out answer because of,
954.
Due Process of Law, alien enemies, when entitled to, 950, 951.
as to persons in contempt of court, 952.
definition of, 950.
right to defend is essential to, 951.
EJECTMENT.
1. EJECTMENT — Title Acquired Pendente Lite. — The recovery
of the plaintiff in ejectment may be defeated by the defendant show-
ing title in himself acquired after the commencement of the action.
(Mont.) McCauley v. Jones, 538.
2. EJECTMENT — Pro Forma Party — Recovery on Equitable Title.
In an action of ejectment by a wife to which her husband is made
a party only pro forma, with no allegation of any title in him, he
is not entitled to recover on proof that he holds the equitable title.
(N. C.) Perry v. Hackney, 741.
3. EJECTMENT — Transfers Pendente Lite. — ^If, after the insti-
tution of an action in ejectment, the plaintiff conveys the land by
deed in fee simple, and the grantee is not made a party, to the
suit, the defendant is, upon his motion, entitled to a judgment of
nonsuit. (N. C.) Burnett v. Lyman, 691.
4. EJECTMENT — Real Parties in Interest. — The rule that in an
action of ejectment the plaintiff must have the right to the posses-
sion not only at the time of the institution of the suit, but at the
time of trial also, is not altered by a statute providing that the
Index. 11 H
action shall not abate by death or transfer of interest, as this stat-
ute must be construed in connection with another statute providing
that every action must be prosecuted in the name of the real party
in interest, and that when a complete determination of the con-
troversy cannot be had without the presence of other parties, the
court must cause them to be brought in. (N. C.) Burnett v. Lyman,
691.
5. EJECTMENT — Transfers Pendente Lite. — In an action of
ejectment the grantee of the land pendente lite may not only be
substituted as party plaintiff, but if the original plaintiffs remain
in the case, such grantee having become a party in interest, he is
necessary to a complete determination of the action, and it is the
duty of the court to have him brought in and made a party. (N. C.)
Burnett v. Lyman, 691.
ELECTIONS.
1. CONSTITUTIONAL LAW— Elections— Property Qualifications
of Officers. — A constitutional provision that no property qualification
shall be required for any office of public trust, or for any vote at any
election, applies only to elections and offices provided for in such
constitution, and has no application to elections held in, or officers
chosen for a public corporation created by statute, such as a drain-
age district, whose directors may be required to be freeholders elected
by resident taxpayers. (Kan.) State v. Monahan, 224.
2. CONSTITUTIONAL LAW— Elections — Property Qualifications
of Officers. — The elections held to choose officers of a drainage district
or to pass upon the expediency of proposed improvements designed
for protection against floods are not merely other elections than those
provided for in the constitution; they are of a different character
from any therein referred to, and so far dissimilar in their nature that
it cannot be inferred that they were within the contemplation of the
constitutional convention when the qualifications of electors were
under consideration by that body. (Kan.) State v. Monahan, 224.
EMINENT DOMAIN.
Selection of Route Along River.
1. EMINENT DOMAIN — Selection of Route Along River. — Tn its
exercise of the right of eminent domain, a railroad company has the
right to select the particular route which it deems most a<lvanta-
g(ous; and, having selected a route with which a river interferes, it
has the power to secure land necessary for its use in constructing and
maintaining the road on that route in such a manner as to afford
security for life and property. (Mont.) State v. District Court, 540.
2. EMINENT DOMAIN— Change of River Channel.— The chang-
ing of the channel of a river, which otherwise would have to be
crossed by a railroad in order to follow the route soloctid, when
necessary to make the road secure for life and property, is part of
the "construction" of the road itself. Hence the land necessary to
make such change may be condemned. (Mont.) State v. District
Court, 540.
Defendant's Pleadings.
3. EMINENT DOMAIN— Necessity of Defendant Pleading.— In
eminent domain proceedings the <lefendant should apptar by demurrer
or answer. If he fails to do so. he has nu standing in court for any
purpose nor night to bo h.ard in fh.- Hubs.ciuent proceedings. (Mont.)
Yellowstone Park R. K. Co. v. Bri.lgur Coal Co., 546.
1112 Index.
4. EMINENT DOMAIN— Effect of Defendant not Pleading. — The
only effect of a failure by the defendant to appear by demurrer or
answer in eminent domain proceedings is to shut him out from par-
ticipating in the proceedings. The court must, nevertheless, determine
whether the use for which the property is sought to be appropriated
is a public use, limit the amount taken to the necessities of the case,
and ascertain the damages under the procedure and in accordance
with the standard provided therefor in sections 2220, 2221, and 2224
of the Code of Civil Procedure. (Mont.) Yellowstone Park K. R.
Co. V. Bridger Coal Co., 546.
5. EMINENT DOMAIN— Failure to Take Default.— If the plain-
tiff in eminent domain proceedings does not default upon the failure
of the defendant to plead, but permits the case to proceed to the
making of the order of condemnation as if issues were properly made,
and makes no objection until final hearing in the district court, it
will be presumed that the issues were made and properly determined.
(Mont.) Yellowstone Park E. R. Co. v. Bridger Coal Co., 546.
6. EMINENT DOMAIN — ^Pleading Damages. — The defendant in
eminent domain proceedings is not required to set up his cjaim for
damages, whether general or special, in his pleadings in any form, in
order to give the plaintiff notice of their character and amount so
that he may be prepared to meet him. (Mont.) Yellowstone Park
E. R. Co. V. Bridger Coal Co., 546.
7. EMINENT DOMAIN — Pleading Damages to Land not Taken. —
The defendant in eminent domain proceedings is not required spe-
cially to plead damages to portions of his land not actually traversed
by the railroad of the plaintiff and not described in the petition.
(Mont.) Yellowstone Park R. R. Co. v. Bridger Coal Co., 546.
IDamages.
8. EMINENT DOMAIN — Measure of Damages. — In determining
the amount which the defendants are entitled to recover in eminent
domain proceedings, the court is bound to take into consideration
every element of value which would be taken into consideration if
the plaintiff were negotiating a sale with the plaintiff as a willing
purchaser and the defendants were willing sellers. (Mont.) Yellow-
stone Park R. R. Co. v. Bridger Coal Co., 546.
9. EMINENT DOMAIN — ^Damages to Land not Taken. — Where
the land of the defendant in eminent domain proceedings is in a
compact body, it is clearly within the purview of the couit's duty to
ascertain what damages have accrued, not only as to the part de-
scribed in the complaint, but also as to the whole of the body, only a
part of which is taken. Such damages are not special in the proper
meaning of that term. (Mont.) Yellowstone Park R. R. Co. v.
Bridger Coal Co., 546.
10. EMINENT DOMAIN — ^Measure of Damages — Evidence of
Offers to Buy. — Evidence in behalf of the plaintiff railroad company
in eminent domain proceedings, of offers to purchase lands in the
vicinity of the defendant's property indicating an enhancement in
values' from the building of the road, are inadmissible, when made
by persons not parties to nor witnesses in the proceedings. (Mont.)
Yellowstone Park R. R. Co. v. Bridger Coal Co., 546.
11. EMINENT DOMAIN — Disturbing Verdict on Appeal. — The
evidence in eminent domain proceedings may be sufficient to sustain
the verdict, although the statements of witnesses are conflicting and
unsatisfactory on material points. (Mont.) Yellowstone Park E. R.
Co. V. Bridger Coal Co., 546.
Index. 1113
12. EMINENT DOMAIN— Appeal— Excessive Verdict— The find-
ings of the jury as to the amount of damages sustained by the de-
fendant by the construction of a railroad through his land will not
be disturbed on appeal because excessive, unless so obviously and
palpably out of proportion to the injury as to be in excess of what
ia meant by the expression "just compensation" as used in the con-
stitution. (Mont.) Yellowstone Park E. B. Co. v. Bridger Coal Co.,
546.
EMPLOYEB'S LIABILITY.
See Master and Servant.
ENTIBETIES.
See Husband and Wife, 2, 8.
EQUITY,
Practice in Equity.
1. EQUITY JUBISDICTION— Effect of Prayer.— The statement
of facts in a complaint in equity, and not the prayer for relief, con-
stitutes the cause of action, which confers jurisdiction. (Ark.)
Eugg v. Lemley, 17.
2. EQUITY PBACTICE — Cross-bill, When Should be Dismissed.—
If the complainant in a cross-bill is merely a nominal party to the
original bill against whom no relief is prayed, and he will obtain
all the relief to which he is entitled if the prayer of the original
bill is granted, it is proper to dismiss such cross-bill. (111.) Dunbar
V. American Telephone etc. Co., 132.
Belief Against Mistake.
3. EQUITY JUBISDICTION — ^Unilateral Mistake — Cancellation of
Contract. — While a court of equity may decree the rescission of a con-
tract for a mistake which is unilateral, the power should not be ex-
ercised against a person whose conduct has in no way contributed to
or induced the mistake, and who will gain no unconscionable advan-
tage thereby. (Me.) Bibber v. Carville, 303.
4. EQUITY JUBISDICTION— BeUef Against Mistake.— Equity
does not relieve against mistakes which ordinary care would have pre-
vented. Conscience, good faith and reasonable diligence are necessary
to call a court of equity into activity. (Me.) Bibber v. Carville, 303.
6. EQUITY JUBISDICTION— Belief Against Mistake,— If a per-
son has acted in ignorance of facts merely, courts of equity will never
aflford relief against mistake when actual knowledge would have been
obtained by the exercise of due diligence and inquiry. (Me.) Bib-
ber V. Carville, 303.
See Cancellation of Instruments.
ESTATES OF DECEDENTS.
See Executors and Administrators; Wills.
Note.
Estates of Decedents, assets, discovery of, proceedings for, 211.
assets, discovery of, scope and ol)jcct of proceedings for, 211.
assets, suniiiiiiry proceedings for discovery of, 212.
evidence admissible in examinations to discover property of,
217.
1114 IlTOBX.
Estates of Decedents, jury trial in examinations to discover, 216.
property, affidavit or petition in proceedings for the discovery
of, 218.
property, citation to persons possessing, concealing or em-
bezzling, 217.
property, controverted claim to, when not considered in the
United States, 210.
' property, discovery of, statute authorizing proceedings in pro-
bate for, 239.
property, examination of person making claim to, 214.
property, examination to discover, 216.
property, information concerning, proceedings to obtain, 216.
property, against person embezzling, 210.
property, limitation upon the time within which proceedings
for the discovery of may be prosecuted, 218.
property, personal representatives are subject to proceedings for
the discovery of, 218.
property, persons who may compel inquiry concerning, 217,
218.
property, proceedings against persons who have concealed or
withheld, 209, 210.
property, proceedings for discovery of, when sustainable, 210.
property, summary proceedings to discover, 210.
property, true title to, 213, 214.
summary proceedings for collection of debts, 213.
summary proceedings for discovery of property of, 212, 213.
ESTOPPEL.
ESTOPPEL IN PAIS. — The General Doctrine is that he who
acts inconsistently with the truth under such circumstances that,
as a reasonable person, he ought to anticipate that another is likely
to change his position in reliance on such conduct, will be estopped
to assert the truth to the injury of such other. (Wis.) Marling v.
Nommensen, 1017.
EVIDENCE.
In General.
1. EVIDENCE — ^Letters Written by Third Person. — A letter in the
handwriting of a third person which appears to be one of many writ-
ten by him to the plaintiff in divorce, and found under a couch in her
room, is admissible against her. (Me.) Purinton v. Purinton, 309.
2. EVIDENCE — Letters Read to Witness. — If one voluntarily and
without solicitation reads the whole or a portion of a letter to another,
and the person hearing does not undertake to repeat the contents of
such letter, but only what the person purporting to read or state has
said, such statements assume the form of an admission by the person
holding the letter, and testimony of such evidence becomes primary
evidence. This rule applies as against a plaintiff in divorce as to
letters written by her after her marriage to the defendant to a third
person and by him to her, the contents of which have been read to
the witness. (Me.) Purinton v. Purinton, 309.
3. EVIDENCE — Admissions — Best Evidence. — If it is sought to
use a written statement as an admission, the "best evidence" rule
does not apply. (Me.) Purinton v. Purinton, 309.
4. EVIDENCE. — Admissions and Statements made by a person are
in all cases admissible in evidence against him, though such state-
I
Index. 1115
ments and admissions may involve what must necessarily be contained
in some writing, deed or record. (Me.) Purinton v. Purinton, 309.
5. EVIDENCi:, Hearsay, When Inadmissible. — In an action for
seduction, the plaintiff should not be permitted to testify that she
had been told that the defendant had stated in his store that she
was a mother, that he could prove it, and that he was not the cause,
such evidence is hearsay. (Mich.) Greenman v. O'Eiley, 466.
Bes Gestae.
6. EVIDENCE — Ees Gestae. — If a railroad brakeman is mortally
injured while in the discharge of his duty and lives only a short time
thereafter, a statement by him as to how he received the injury is
admissible in evidence as part of the res gestae. (Ark.) Marshall
V. St. Louis etc. Ey. Co., 27.
7. EVIDENCE — ^Admissions — Res Gestae. — It is not within the
scope of the authority of manager of a hotel to bind his employer
by admissions concerning a trespass committed by a servant of the
hotel, when such admissions are made the day after the commission
of the trespass. They are not admissible as part of the res gestae.
(Neb.) Clancy v. Barker, 559.
See Contracts, 9, 10.
EXECUTIONS.
1. EXECUTION, Interest of the Devisee, When Subject to. — If a
testator devises all his real estate occupied as a homestead to his
wife for life, and within two years after her death to be sold, the
proceeds to be equally divided among his six children, they take no
vested interest in such property on the death of the testator, but only
a right to money when the land shall be sold as directed, and the in-
terest of one of them is not subect to levy and sale under execution,
and such levy and sale are void. (111.) Darst v. Swearingen, 152.
2. EXECUTION SAItE of Property Conveyed to Secure Indebted-
ness.— If one makes a promissory note and executes a conveyance
to secure its payment, and an execution against his grantee is levied
on the property, the grantor remaining in possession, the purchaser
under such execution takes only the rights of such grantee. (Ga.)
Bridger v. Exchange Bank, 118.
3. EXECUTION, Burden of Proof in an Attack Upon. — One who
alleges that a levy is void for excessiveness carries the burden of
sustaining his contention. (Ga.) Bridger v. Exchange Bank, 118.
4. EXECUTION. — ^A Levy is not Necessarily Excessive because
the value of the land is considerably more than the amount of the
execution. (Ga.) Bridger v. Exchange Bank. 118.
5. EXECUTION— Excessiveness of Levy, When a Question for the
Jury.— If the property levied upon and sold under execution was
worth considerably more than the amount due, and it was reasonably
capable of subdivision, and fronted fifty five feet on one street
and ran back two hundred feet to an alley, giving an outlet to an-
other street, and there were houses fronting ou both the street
and the alley, separately numbered and separately renteil, it is a
question for the jury whether the levy was excessive and whether
the property should have been divided for the purpose of sale. (Ga.)
Bridger v. Exchange Bank, 118.
Note.
Execution Sale, purchaser at, when may be deemed to hold in trust,
789, 790.
1116 Index.
EXECUTOES AND ADMINISTRATORS.
Power and Duties.
1. EXECUTORS AND ADMINISTRATORS— Limitation of Power.
The power and authority of an administrator or executor over the
estate of the deceased is confined to the sovereignty by virtue of
whose laws he is appointed. (Me.) Brown v. Smith, 339.
2. EXECUTORS AND ADMINISTRATORS.— An Administrator
is a Trustee for all who are interested in the estate which he has in
charge. (Ark.) Eeeder v. Meredith, 22.
3. EXECUTORS AND ADMINISTRATORS — Stock in Foreign
Corporation — Place of Ownership. — If the owner of corporate stock dies
in the state where the corporation is organized, leaving the cer-
tificates in another state, a public administrator taking charge of
his estate situated in the latter state has no right to claim such
certificates of stock which are only evidence of the owuership of
the stock. (Mo.) Richardson v. Busch, 472.
4. EXECUTORS AND ADMINiSTKATORS— Stock in Foreign Cor-
poration— ^Place of Owneraliip and Administration. — If the owner of cor-
porate stock dies in the state where the corporation is organized, leav-
ing the certificates of such stock in another state, the stock itself
belongs to the administrator appointed in the state where the owner
thereof dies, and the courts of the state where the certificates of
stock are situated ^ave no power to seize the stock at the instance
of an administrator appointed there, as the stock itself is beyond the
process of such courts, which have no power to apply such certifi-
cates to the payment of the decedent's debts in that state nor to
distribute them among the kin of such decedent. (Mo.) Richardson
V. Busch, 472.
Purchase by Executor.
5. EXECUTORS AND ADMINISTRATORS— Purchase by — Im-
provements.— An administrator who purchases the lands of the estate
in bad faith is not entitled to any compensation for improvements
placed thereon. (Ark.) Reeder v. Meredith, 22.
6. EXECUTORS AND ADMINISTRATORS— Purchase by— Re-
turn of Consideration Received. — If an administrator purchases the
interest of an heir in the estate in bad faith, and is sued by him to
enforce a trust as to part of the property, the heir need not return
the consideration received, if the administrator has realized from part
of the property more than he paid for all of it. (Ark.) Eeeder v.
Meredith, 22.
7. EXECUTORS AND ADMINISTRATORS— Purchase by— Ac-
counting.— If an administrator purchases the interest of an heir in
the estate and is sued by him to enforce a trust as to part of the
property purchased, he is not entitled, in such suit, to an accounting
by the administrator of his profits on the part of the interest of such
heir not involved in the suit. (Ark.) Reeder v. Meredith, 22.
Speculation with Funds of Estate.
8. EXECUTORS AND ADMINISTRATORS — Speculation with
Funds of Estate. — So great a breach of trust is it for the personal
representative of a decedent to engage in business with the funds of
the estate, that the law charges him with all the losses thereby in-
curred, without, on the other hand, allowing him to receive the bene-
fit of any profits that he may make, the rule being that the persons
beneficially interested in the estate may either hold the representative
Index. 1117
liable for the amount so used with interest, or, at their election, tako
all the profits which the representative has made. (Me.) Haves v.
Eich, 314. ^
9. EXECUTOES AND ADMINISTRATORS— Speculation with
Funds of Estate, — It is the duty of an executor or administrator to
settle the estate, pay the debts, and distribute the surplus, and not
to speculate in demands against creditors. If the latter transaction
is indulged in, all loss must fall upon such personal representative.
(Me.) Hayes v. Eich, 314.
10. EXECUTORS AND ADMINISTRATORS— Speculation with
Funds of Estate — Recovery in Representative Capacity. — It is the
duty of an administrator to collect a good note in favor of the estate
in cash, and not to invest it in a worthless judgment at twenty cents
on the dollar, and if he assumes the responsibility of employing the
funds of the estate for such purpose, he must be deemed to have done
so in his individual capacity. If an administrator thus changes the
nature of the debt originally due the intestate by contract made with
himself, he must sue for the new debt in his own name, and not in
his representative capacity. (Me.) Hayes v. Rich, 314.
11. EXECUTORS AND ADMINISTRATORS— Speculation with
Funds of Estate — Right to Recover in Representative Capacity, — If
an administrator speculates with the funds of the estate and changes
the nature of the debt originally due the intestate by a contract made
with himself, his assumption that he can maintain an action thereon
and recover judgment in his representative capacity is incompatible
with the right of the defendant to testify as a witness in his own
behalf respecting matters that happened before the death of the in-
testate. (Me.) Hayes v. Eich, 314.
Trover and Conversion^
12. CONVERSION — Title — Collateral Attack.— If an administra-
tor sues for damages for the wrongful conversion of cirtificates of
stock belonging to the deceased, the issue is the title of the cer-
tificates and not the authority of the administrator to take charge
of the estate of the deceased who died in another state, and the
question whether the administrator's authority can be attacked
in a collateral proceeding is not in the case. (Mo.) Eichardson v.
Busch, 472.
13. CONVERSION — Pleadings — Admissions. — If an administra-
tor's petition in general terms charges conversions, and. in addi-
tion charges specifically how such conversion was made, namely, that
defendant had in his possession certificates of stock in a foreign
corporation and delivered them to decedent's administrator in the
state where the decedent died, there is nothing in the petition from
which it can be inferred that the certificates were lost to the estate,
and a demurrer to the petition does not admit a state of facts on which
the defendant would be liable for a conversion. (Mo.) Eichardson
V. Busch, 472.
Debts of Decedent— Sale of Eeal ICatate.
14. EXECUTORS AND ADMINISTRATORS — Order of Payment
of Debts. — The different fuiHJs or subjects of property constituting
the estate of a deceased testator must be applied to tlie payment of
debts in the following or<ier: 1. The personal estate at large, not
exenii)ted by the terms of the will or ne«essary implication; 2. Real
estate or an interest therein exjiressly set apart by the will for the
payment of debts; 3. Eeal estate descended to the heir; 4. Eeal or per-
1118 Index.
sonal property expressly charged with the payment of debts, and
subject to such charge, specifically devised or bequeathed; 5. Gen-
eral pecuniary legacies; 6. Specific legacies; 7. Real estate devised by
the will. (Va.) French v. Vradenburg, 838.
15. ESTATES OF DECEDENTS— Limitation of Time Within
Which to Apply for an Order to Pay Debts.— In the absence of a legis-
lative rule upon the subject an application for an order to sell lands
of a decedent to pay his debts must be made within seven years unless
the delay is satisfactorily explained. If the circumstances show
good reason for the delay, a very much longer time will not bar the
proceedings. (III.) White v. Horn, 155.
16. ESTATES OF DECEDENTS — ^Laches in Executing an Order to
Sell Eeal Estate to Pay Debts. — An order to sell land to pay debts
amounts to no more than a lien which should be enforced within
the time allowed for the enforcement of judgment liens. If the
order is not enforced within seven years, the parties may be brought
before the court at any time within twenty years, and, in a proper
case, the order may be revived and enforced; but it should not be
enforced after twenty years where the only excuse for delay is that
the lands were of so little value during such twenty years that they
were worth nothing in the market, but their value had recently been
much enhanced. (111.) White v, Horn, 155.
17. EXECUTOES AND ADMINISTRATORS— Liability of Dece-
dent's Lands for Debt. — Land of a decedent, while held by his heirs,
may, in equity, be subjected to sale for the payment of his debts
accruing after the time allowed for the probate of claims has ex-
pired. (Ark.) Scoggin v. Hudgins, 60.
18. EXECUTORS AND ADMINISTRATORS— LiabUity of Dece-
dent's Lands for Debts — Innocent Purchasers. — Interests or estates in
lands of a decedent in the hands of innocent purchasers for value,
and acquired from the heirs before the commencement of a suit to
charge them with the payment of the decedent's debts, cannot be
subjected thereto either in law or equity. (Ark.) Scoggin v. Hud-
gins, 60.
Setoff in Favor of Executor.
19. EXECUTORS AND ADMINISTRATORS— Setoff in Favor of.
An administrator cannot offset against a judgment rendered upon a
liabilitj' of the decedent another judgment on a claim with which the
decedent had no connection in his lifetime, purchased by such admin-
istrator with the funds of the estate for that purpose, after the death
of the intestate. (Me.) Rich v. Hayes, 321.
20. EXECUTORS AND ADMINISTRATORS— Setoff in Favor of.
If an executor or administrator sues for a debt created to him since
the death of the decedent, the defendant in such suit cannot set off a
debt due to him from the decedent, and the same rule applies against
the personal representative when he is the defendant. (Me.) Rich
V. Hayes, 321.
Foreign and Ancillary Administration.
21. EXECUTORS AND ADMINISTRATORS— Foreign Adminis-
trator De Bonis Non — Sale of Real Estate by — Validity. — If a non-
resident dies testate in one state owning property in another, and ex-
ecutors named in his will are appointed and qualify as such in the
former state, and letters testamentary are issued afterward to the
same persons in the other state, an administrator de bonis non, who
is appointed in the former state on account of the death of »a«
Index. 1119
executor and the removal of the other, is not thereby made the suc-
cessor in trust of the executors under their appointment in the other
Btate, so as to enable the courts of that state to permit him to sell
lands of the estate to pay its debts under an order previously granted
to the executors, without giving a new notice of his application for
such authority. A sale by him without such notice is void, and a
deed under such sale constitutes no defense to an action of ejectment
by the devisees or their successors in interest. (Kan.) Albright v.
Bangs, 219.
22. EXECITTORS AND ADMINISTRATOES— Foreign Decedents-
Ancillary Administration. — If assets of a foreign decedent are found
within the state, ancillary administration must be obtained therein
for the protection of resident creditors, before the courts of such
state will enforce the recovery of debts due the foreign decedent.
(Me.) Brown v. Smith, 339.
23. ADMINISTBATOBS — Foreign — ^Assignment of Mortgage. — An
administrator in one state cannot, by virtue of letters granted in an-
other state, assign a mortgage of land situated in the first-named
state, so as to enable the assignee to enforce payment thereof.
(Me.) Brown v. Smith, 339.
See Homesteads, 2: Partition, 10-13; Setoff, 5, 6.
FALSE PBETENSES.
1. FALSE PRETENSES — Use of Confederate Money. — Where
one party to a horse trade agrees to pay the other seven and one-
half dollars to boot, and accordingly, with intent to defraud, hands
him a ten dollar Confederate bill, saying: "Give me two dollars and
a half; here is a ten dollar bill," whereupon the other receives
the bill, supposing it to be United States currency, and passes two
dollars and a half back as change, the offense pf obtaining money
under false pretenses is committed, although the bill may not be
calculated to deceive a person of ordinary prudence and discre-
tion, for the law protects the unwary and even the "foolish." The
bill must be calculated to deceive, according to the capacity of him
to whom it is presented to detect its falsity under the circumstances;
whether or not it is, is a question for the jury. (Ky.) Common-
wealth V. Beckett, 285.
2. FALSE PRETENSES. — If the Facts Recited in an Indictment
for obtaining money under false pretenses show ujton their face
that they are capable of defrauding, and it is charged that the de-
fendant by them did intentionally and wickedly defraud the prose-
cuting witness, it is unnecessary specifically to charge that they
were capable of defrauding. (Ky.) Commonwealth v. Beckett, 285.
FORGERY.
CRIMINAL LAW— Forgery by Typewriting.- Forgery may be
committed by the use of a typewriting ma<liin«' by whirh both the
body of the instrument and the purported signature are written.
(Tenn.) State v. Bradley, 836.
FRAUD.
1. FRAUD Presumption — Proof. — While fraud in never prennmed
and must be proved, it is not n.cfssary that it ho proved by direct
evidence, and it may be shown by Buflicient facU and circumatance*
1120 Index.
connected with and surrounding the transaction. (Mo.) Klauber v.
Schloss, 486.
2. FRAUD — Sufficiency of Evidence. — An instruction as to the
quantum and character of evidence necessary to warrant a finding
of fraud inducing a settlement, merely cautioning the jury that they
are to find fraud only if they are "satisfied by a preponderance of
the evidence" that it occurred, in the face of a request for a fur-
ther instruction that, notwithstanding a mere preponderance of evi-
dence, the finding of fraud is not to be made unless the jury are sat-
isfied by evidence that is clear, satisfactory and convincing, is erro-
neous, for it is only upon evidence that is clear and satisfactory that
an affirmative finding of fraud can properly be made. (Wis.) Bowe
V. Gage, 1010.
3. DECEIT. — ^In an Action for Deceit the Sole Question is whether
the misrepresentations in fact deceived the party involved and mate-
rially affected his conduct. There is no issue whether or not the
misrepresentations were sufficient to influence the conduct of a per-
son of ordinary intelligence. The effectiveness of deceit is to be
tested by its actual influence on the person deceived, not by its prob-
able weight with another. (Wis.) Bowe v. Gage, 1010.
FRAUDS, STATUTE OF.
1. FRAUD — Statute of Frauds. — A court of equity will never
permit a person to shield himself behind the statute of frauds in
order to perpetrate a fraud. (Neb.) Dickson v. Stewart, 596.
2. STATUTE OF FRAUDS — Pleading. — One who has filed a gen-
eral issue plea and thus denied the existence of a contract sued upon
is entitled to rely on the statute of frauds. (Md.) Mogart v. Smouse,
367.
3. STATUTE OF FRAUDS — Trusts. — One who, under an agree-
ment, purchases land at a foreclosure sale for the benefit of the
owner of the equity of redemption and at an inadequate price, can-
not set up the statute of frauds against the person for whom he
purchased, as the law will hold him to be a trustee ex maleficio.
(Neb.) Dickson v. Stewart, 596.
4. STATUTE OF FRAUDS, Parol Agreement When not Within. —
A preliminary parol agreement made at the execution and delivery
of a conveyance of real property that the vendee will hold it in
trust for a certain person is not within the statute of frauds. (Tenn.)
Insurance Co. of Tennessee v. Waller, 763.
5. STATUTE OF FRAUDS. — Growing Trees are a part of the
realty, and a contract to sell or convey them, or any interest in or
concerning them, must be reduced to writing. (N. C.) Ives v. At-
lantic etc. R. R. Co., 732.
6. STATUTE OF FRAUDS — Contract for Cordwood. — A contract
to cut and convert trees growing on land belonging to a railroad
company into cordwood, and for the delivery thereof on the railroad
right of way, does not contemplate the transfer of any title to or in-
terest in growing trees as they stand upon the land, and is therefore
not within the statute of frauds. (N. C.) Ives v. Atlantic etc. R.
R. Co., 732.
7. STATUTE OF FRAUDS — Contract to Cut and Deliver Grow-
ing Trees. — A contract by the owner of land to cut growing timber
therefrom, and when severed from the freehold to deliver it to an-
other for a stipulated price, is not within the statute of frauds. (N.
C.) Ives V. Atlantic etc. R. E. Co., 732.
Index. 1121
8. ST-ATUTE OF FBAUDS.— The Transfer of an Equitable In-
terest in Land is as much within the statute of frauds as the transfer
of the legal interest. (Md.) Morgart v. Smouse, 367.
9. STATUTE OF FRAUDS — Partnership in Lands.— An Oral
Agreement is Siifficient to constitute a partnership to deal in lands.
(Md.) Mogart v. Smouse, 367.
10. STATUTE OF FRAUDS — ^Agreement to Purchase Lands as
Partners or on Joint Account. — An agreement between two persons
that they will purchase lands and develop and sell them on joint
account, and share equally in the profits and losses of the venture,
is not within the statute of frauds, but constitutes them partners to
the extent of the undertaking governed by it. (Md.) Mogart v.
Smouse, 367.
FRAUDULENT CONVEYANCES.
1. FRAUDULENT CONVEYANCES — Solvency of Vendor.— If
a transfer of property is made with intent to hinder or delay creditor*".
it is fraudulent as to them, whether or not the vendor is insolvent
at the time of the transfer. (Mo.) Klauber v. Schloss, 486.
2. FRAUDULENT CONVEYANCES— Fraudulent Vendee.— If a
fleed of trust is given to secure a pretended debt, to the knowledge of
the vendee, he, by accepting the provisions of the deed, becomes a
party to the fraud. (Mo.) Klauber v. Schloss, 486.
3. FRAUDULENT CONVEYANCES — Consideration. — If a deed
of trust is made with actual intent to hinder, delay or defraud
creditors, and the cestui que trust knows of the purpose for which
the transfer is made and is a party tjjereto, the deed is void
as to such creditors of the vendor, regardless of the consideration
for such deed, whether adequate or inadequate. (Mo.) Klauber v.
Schloss, 486.
4. FRAUDULENT CONVEYANCES— Fictitious Consideration.—
If part of the consideration for a conveyance of property is fraudulent
or fictitious, the entire transaction is fraudulent as against creditors,
and will be set aside. (Mo.) Klauber v. Schloss, 486.
5. CONVEYANCE in Fraud of Creditors, Effect of Reconveyance
to the Grantor. — If property is conveyed for the purpose of defraud-
ing creditors, and the grantee agrees by parol to hold it for the
use of the grantor and to convey it as he may direct, though the
trust may not be enforced, yet if the grantee resjtects it and makes a
reconveyance as agreed upon, the legal and equitable titles become re-
united, and the previous fraud will not bar the grantor from recover-
ing upon any contract relating to such property for trespass upon it
or upon a contract of insurance effected thereon by him. (Tenn.)
Insurance Co. of Tennessee v. Waller, 763.
6. CONVEYANCES — Withholding from Record— Fraud.— The re-
tention of personal property and the withholding of c-onveyances
from record do not make the transfer void as to general creditors in
the absence of fraud. (N. J. Eq.) Cogan v, Conover Mfg. Co., 629.
GAME LAWS.
CONSTITUTIONAL LAW — Game Laws. — A statute authoriz-
ing game wardens to seize and forfeit to the state all gnns in actual
use by persons hunting in violation of the game law, without giving
them a hearing, is unconstitutional as depriving such persons of their
property without due process of law. (Neb.) McConnell V. Mc-
KiUip, 614.
Am. St. Rep., Vol 115—71
1122 Index.
garnishment.
1. OARNISHMENT.— No Lien on a Fund represented only by a
negotiable instrument is obtained by an attempted garnishment.
(Wis.) Disconto Gesellschaft v. Umbreit, 1063.
2. A JUDGMENT or a Garnishment Against a Nonresident is
Unauthorized and Void if, at the time it was rendered, the garnishee
had not answered, and there was nothing before the court from
which it could i)e determined whether any property of either of the
defendants had been seized. (Ga.) Albright-Pryor Co. v. Pacific
SeUing Co., 108.
GUARANTY.
GUARANTY OF PAYMENT of Promissory Note, Effect of.—
The guaranty of the payment of a promissory note is absolute, and it
is not necessary, if the note is not paid at maturity, for the payee
to show that he has exhausted his remedies against the maker or that
the latter is insolvent. (Md.) Wood Reaping etc. Co. v. Ascher,
343.
GUARDIAN AND WARD.
1. GUARDIAN — Duty to Invest Ward's Funds. — It is the duty
of a guardian, on receiving the funds of his ward, to invest so much
of them as is not required for immediate and necessary use, as soon
as he can do so with reasonable diligence. (Wis.) Abrams v.
United States Fidelity etc. Co., 1055.
2. GUARDIAN — Employment of Attorney to Collect and Invest
Funds. — A guardian may employ attorneys or agents to reduce the
estate of his ward to possession and to protect it, but when once
in his hands his personal duty to dispose of and manage it begins,
which cannot be delegated. Therefore, if a guardian employs an at-
torney to collect the estate, and the funds collected are represented
by checks or drafts payable to the guardian, he is accountable there-
for where he indorses and hands them back to the attorney for in-
vestment, and the latter defaults. (Wis.) Abrams v. United States
Fidelity etc. Co., 1055.
3. GUARDIAN — Interest of Ward's Funds. — The time from which
a guardian should be charged with interest on the funds of his ward,
lost through his negligence in investing them, is a matter resting in
the sound discretion of the trial court in view of all the facts.
(Wis.) Abrams v. United States Fidelity etc. Co., 1055.
4. GUARDIAN — Allowance for Support of Ward. — Where a guard-
ian has voluntarily stood in loco parentis to his wards, and has
never intended to charge them for lodging or services, neither the
guardian nor his surety is entitled to any credit therefor. (Wis.)
Abrams v. United States Fidelity etc. Co., 1055.
5. GUARDIAN. — In an Accounting by a Guardian annual rests
should be made, the amounts expended for the preceding year de-
ducted, and interest computed on the balance up to the next annual
rest. (Wis.) Abrams v. United States Fidelity etc. Co., 1055.
6. GUARDIAN — Costs. — In an Action by a guardian to compel
his predecessor to account, it is proper to allow costs against a surety
who appears in and defends the action. (Wis.) Abrams v. United
States Fidelity etc. Co., 1055.
Note.
Guardian and Ward, constructive trust against the one in favor of
the other, 794.
Index. 1123
highways.
1. HIGHWAYS, Work on— PoU Tax.— A statutory requirement
that male citizens shall work on the public roads is not a poll or
capitation tax. (N. C.) State v. Wheeler, 700.
2. HIGHWAYS, Work on — Taxation. — Conscription of labor to
work the public roads is not a tax, but the exaction of a public
duty. (N. C.) State v. Wheeler, 700.
HOMESTEADS.
1. HOMESTEAD— Loss by Marriage of Infant.— Under a statute
providing that the unmarried infant children of a deceased home-
steader shall be entitled to a joint occupancy of the homestead with
his widow until the youngest arrives at full age, a daughter who mar-
ries during minority loses her homestead rights. (Ky.) Jones v.
Crawford, 273.
2. HOMESTEADS OF DECEDENTS— Claims of Creditors— Lien.
If a claim for a breach of covenant of warranty in a deed against a
decedent does not accrue until after the close of the administration
of his estate, the covenantee is entitled, on recovering judgment, to
have it declared a lien on the decedent's homestead, to be sold only
after the homestead has expired, although a constitutional provision
declares that a homestead shall not be subject to the lien of any
judgment or decree, or to sale under execution or other process
thereon. (Ark.) Scoggin v. Hudgins, 60.
HOMICIDE.
BecJcless or Accidental Killing.
1. HOMICIDE — Beckless Shooting — If two men engage in shoot-
ing at each other in a crowded waiting-room, and a bystander is
killed, both are guilty of murder, one as principal and the other
as aiding and abetting. (N. C.) State v. Lilliston, 705,
2. HOMICIDE — Reckless Act. — Malice is implied when an act,
dangerous to others, is done so recklessly and wantonly as to evince
depravity of mind and disregard for human life, and if the death of
any person is caused by such an act, it is murder. (N. C.) State v.
Lilliston, 705.
3. MANSLAUGHTER— Accidental Killing.— Pointing a Loaded
Revolver at a person who docs not know wlietluT it is loaded or not
is an assault, and if the person pointing the woapon pulls the
trigger and discharges it, thus killing the person assaulted, the
former is guilty of manslaughter, although he had no desire or
intent to injure the person killed, and the shot was accidental. (Neb.)
Ford V. State, 591.
4. MANSLAUGHTER — Accidental Killing — Excessive Sentence.
If a person points a pistol at anothi-r in sport, having some rca.son
to think that it is not loaded, and subscciucntly pulln the trigger,
causing the pistol to be discharged, an<l rosulting in the killing of
the person pointed at, the person holding the pistol is guilty of
manslaughter, although the killing is purely accidi ntui, but under
such circumstances a sentence of seven years in state's prison is ex-
cessive and should be reduced to four years. (Neb.) Ford v. State,
59L
5. MANSLAUGHTER — Request for Instructions. — An accused
on trial for murder is entitled to have bi« theory of the defense tub-
1124 Index.
mitted to the jury, but if under his own theory he is guilty of man-
slaughtor. and is convicted of that crime only, his rights are not
prejudiced by a failure to present his theory of the defense by
specific instructions. (Neb.) Ford v. State, 591.
Self-defense.
6. HOMICIDE — Sudden Assault — Self-defense. — If a person on
trial for murder sets up the defense that he was suddenly assaulted
it is not error to charge the jury that " self-defense exists where one
is suddenly assaulted, and in defense of his person, where an im-
mediate and great bodily harm would be the apparent consequence
of waiting for the assistance of the law, and there is no other prob-
able means of escape, he kills his assailant." (N. C.) State v. Lil-
liston, 705.
HUSBAND AND WIFE.
Conveyance iy Wife.
1. A CONVEYANCE by a Married Woman Without the Signature
of Her Husbaud is valid if she holds the property as a triistee and
the conveyance is to carry out the trust. (Tenn.) Insurance Co. of
Tennessee v. Waller, 763.
TenaTicy by Entireties.
2. TENANCY BY ENTIRETIES — Conveyance by Husband Alone.
Although a husband may, by deed in which his wife does not join,
convey an estate by entireties, and thus entitle the grantee to hold
during the grantor's life, such deed does not give the grantee a
right to cut timber on the land conveyed. (N. C.) Bynum v.
Wicker, 675.
3. TENANCY BY ENTIRETIES— Conveyance by Husband Alone
— Estoppel. — If a husband, by deed in which his wife does not
join, conveys an estate held by them by entireties, both he and she
are estopped during their joint lives from interfering with the
possession of the land thus granted and conveyed. (N. C.) Bynum
V. Wicker, 675.
Note.
Husband and Wife, constructive trust against the one in favor of the
other, 792.
INJUNCTIONS.
1. INJUNCTION. — The Collection of Purchase Money on land
may be enjoined when the vendee is in possession under a deed with
covenants of general warranty, and the title is questioned by suit
prosecuted or threatened, or is clearly shown to be defective. (W.
Va.) llarvey v. Ryan, 897.
2. INJUNCTION. — The Collection of Purchase Money due the
vendor of land may be enjoined, when the vendee has entered into
possession under a deed with covenants of general warranty, and a
stranger has asserted title to and recovered the property in an ac-
tion of ejectment which was pending at the time of the purchase.
(W. Va.) Harvey v. Eyan, 897.
See Telephones.
INNKEEPERS.
1. INNKEEPER, Liability of When He Also Maintains a Bath-
bouse. — If one keeps an inn, and, separately therefrom, a bathhouse,
Index. 1125
■where persons bathing in the sea change their garments and leave
their clothes, he is not liable as an innkeeper for property stolen from
the bathhouse. (Ga.) Walpert v. Bohan, 114.
2. INNKEEPERS — Duties.— By the implied contract between
a hotel-keeper and his guest, the former undertakes more than
merely to furnish the latter with suitable food and lodging. There
is a further implied undertaking on his part that the guest shall
be treated with due consideration for his saiety and comfort. (Neb.)
Clancy v. Barker, 559.
3. INNKEEPERS— Duties.— The Duties of a hotel-keeper to his
guests are similar to the common-law oblijration of a common car-
rier to his passengers. (Neb.) Clancy v. Barker, 559.
4. INNKEEPERS — Trespass by Servant. — A trespass committed
upon a guest in a hotel by a servant of the proprietor is a breach
of the implied undertaking of the latter to care for the comfort and
safety of the guest, rendering such proprietor or manager liable in
damages, ■whether such servant was at the time of the trespass
actively engaged in the discharge of his duties or not. (Neb.)
Clancy v. Barker, 559.
5. INNKEEPERS — ^Assault by Servant. — An innkeeper must pro-
tect his guests while in the hotel from the assaults of a hirvnut em-
ployed therein, whether actually engaged in his duties at the time
or not, and in case of injury from such assnult, the hotel-keeper
must respond in damages. (Neb.) Clancy v. Barker, 559.
INSTRUCTIONS.
See Trial.
INSURANCE.
Premiums.
1. INSURANCE, LIPE— Course of Dealing Justifying Belief
that the Insurer will not Insist upon a Forfeiture for Nonpayment of
Premium. — The fact that out of thirty-six pniiiiunis paid sevon wcio
accepted after due, two of which were acecptrd after the as-?iir<<l
presented a certificate of continued good health, two were forwarded
by mail on the day they were due, and of the other three, one b« iug
paid one day overdue, another two days overdue, and the remainiiiii
one being mailed one day overdue, but not reeeiv<d until four dnys
later, docs not justify the insured in believing that the insunr will
not insist on a forfeiture of the policy if subsequent premiums aro
not paid as they fall due. (Tenn.) Thompson v. Fidelity Mutual
Life Ins. Co., 823.
2. INSURANCE, LIFE— Mere Indulf:euce In the Payment of
Premiums does not constitute a waivtr ot' a comlition of fcrtciture
for the failure to pay pr» niiunm wlieu due. (Tcun.) Thouipsou v.
Fidelity Mutual Life Ins. Co., HLM.
3. INSURANCE, LITE— To Warrant a Recovery Where a Pre-
mium is not Paid When Due, it is Ilt.■(^^sary to i>ruvc (1) the cours.-
of dealing between the insured and the iii-HUnr in reference to the
acceptance of overdue payments amounting to a custom or habit; (2)
that by reason of this course of dialing, the injured was justified in
believing that the insurer wouM not insist on a forfeiture for fail-
ing to jiay subsequent prnniums; (.1) that the assured beliived he
could postpone the payment of j>reniiujns without risking a forfeit-
ure; and (4) that he a'eted ou this belief, and therefore, did not pay
1126 Index.
the premium at its maturity. (Tenn.) Thompson v. Fidelity Mutual
Life Ins. Co., 823.
4. INSURANCE, LIFE — Tender of Premiiuns After Death of the
Assured. — The permission to pay a premium after due during the life
and good health of the assured is not equivalent to paying a pre-
mium after his death or loss of health. (Tenn.) Thompson v.
Fidelity Mutual Life Ins. Co., 823.
5. INSUEANCE, LIFE.— The Illness of the Assured is No Excuse
for not Paying His Premium when it falls due. (Tenn.) Thompson
V. Fidelity Mutual Life Ins. Co., 823.
6. INSURANCE, LITE.— The Failure to Pay a Premium when
due works a forfeiture, whether the condition requiring such a pay-
ment be regarded as precedent or subsequent. (Tenn.) Thompson
V. Fidelity Mutual Life Ins. Co., 823.
7. INSUEANCE, LIFE — Incontestable Clause Does not Apply to
Nonpayment of Premiums. — A policy providing that after three
years, if the paj'ments required shall have been made when due, it
shall be incontestable, means incontestable for causes other than
nonpayment of premiums, and an insured failing to pay a quarterly
premium after such three years is not entitled to recover. (Tenn.)
Thompson v. Fidelity Mutual Life Ins. Co., 823.
Forfeiture and Reinstatement.
8. INSUEANCE, LIFE — Forfeiture of Policy — Reinstatement. —
If an insured person has forfeited his policy of life insurance by
the nonpayment of dues, and has then complied with a provision in
the policy that "delinquent members may be reinstated if approved
by the medical director and president by giving reasonable assur-
ance that they are in good health," but the officers of the insurance
company decline to approve his application, he is not entitled to re-
cover damages for the cancellation of his policy and refusal to re-
instate him, in the absence of any showing that the action of such
officers was fraudulent or arbitrary. (N. C.) Lane v. Fidelity Mu-
tual Life Ins. Co., 729.
9. INSURANCE, LIFE — Forfeiture of Policy — ^Reinstatement. —
A provision in a policy of life insurance that delinquent members
may be reinstated if approved by the medical director and presi-
dent, by giving reasonable assurance that they are in continued
good health, is valid and reasonable, and the required approval is
not merely a ministerial act, but involves the exercise of judgment
and discretion. (N. C.) Lane v. Fidelity Mutual Life Ins. Co., 729.
10. FIRE INSURANCE — Cancellation of a Policy as a Waiver of
Forfeiture. — A violation of a clause in a fire insurance policy against
increase of hazard is not waived by the insurer canceling the policy
by letter at about the date of a fire, on the ground of suci violation.
(W. Va.) Euffner Brothers v. Dutchess Ins. Co., 924.
Fire Insurance.
11. INSURANCE Against Fire, When Void Because the Insured
Property is upon Leased Ground. — If a policy contains a condition
stating that it is void if the subject of insurance is a building on
ground not owned by the assured in fee simple, no recovery can be
had thereon for the loss of a building on leased premises, where the
application for insurance was oral, and no representation was made
and no question asked respecting the title, and the insurer had no no-
tice thereof, though the policy issued was not read by the assured
prior to the fire, and he had no knowledge of the condition. (Mich.)
Wyandotte Brewing Co. v. Hartford Fire Ins. Co., 458.
Index. 1127
12. INSURANCE Against Fire — Evidence. — The burden of proving
that the insurer had knowledge that the building insured was upon
leased premises must be assumed by the assured where the policy's
conditions make it void if the subject insured is upon premises on
which the assured has not title in fee simp'e. (Mich.) Wyandotte
Brewing Co. v. Hartford Fire Ins. Co., 458.
13. FIRE INSURANCE — Construction of Iron-safe Clause. — In de-
termining what constitutes such an inventory as is contemplated by
an iron-safe clause in a policy of insurance, all parts of such clause
should be construed together. (W. Va.) Euffner Brothers v. Dutch-
ess Ins. Co., 924.
14. FIRE INSURANCE — Iron-safe Clause. — ^The Inventory of a
stock of merchandise, required by an iron-safe clause in a policy
of insurance, is a list of all the articles in the stock, so itemized aa
to show the kinds and numbers or quantity thereof, with their values.
(W. Va.) Euffner v. Dutchess Ins. Co., 924.
15. FIRE INSURANCE — Iron-safe Clause. — What is an Inventory
of a stock of merchandise, within the meaning of that terra as used
in the iron-safe clause of a policy of insurance, is to be determined
in view of the peculiar circumstances of each case. Where a store
is opened with an entirely new stock of goods at or about the date
of the issuance of the policy, the invoices, giving the quantities of
the goods, with their cost prices, may, if preserved for that purpose,
constitute an inventory. (W. Va.) Ruffner v. Dutchess Ins. Co., 924,
Life Insurance.
16. INSURANCE, LIFE — Insurable Interest. — An uncle of an in-
sured has no insurable interest in his life by reason of kinship.
(Kan.) Metropolitan Life Ins. Co. v. Elison, 189.
17. INSURANCE, LIFE — Insurable Interest — Assignment. — A per-
son cannot take directly, or by assignment, a policy of insurance
on the life of one in whose life he has no insurable interest. (Kan.)
Metropolitan Life Ins. Co. v. Elison, 189.
18. INSURANCE, LIFE. — Insurable Interest — Assignment of
Policy. — An agreement by which part of the insurance provided for in
a life insurance policy is assigned by the insured and the beneficiary
to one having no insurable interest in the life of the insured, upon
consideration that the assignee is to pay all accruing premiums, is
opposed to public policy, and neither such assignee nor beneficiary
can recover on the insurance policy. (Kan.) Metropolitan Life Ins.
Co. V. Elison, 189.
19. INSURANCE, LIFE — Insurable Interest — Assignment of
Policy. — A beneficiary of an insured who knowingly and purposely
sells and assigns to another, who has no insurable interest in the life
of the insured, the policy of insurance on the life of the latter, cannot
enforce the policy for his own benefit. (Kan.) Metropolitan Life
Ins, Co. V. Elison, 189,
Accident Insurance.
20. ACCIDENT INSURANCE— Proximate Cause of Death.— A
death results "proximately and solely from accidental cause," within
the meaning of these words as used in an accident insurance policy,
where the assured accidentally fell, sustained an abrasion ot the skin
through which bacteria entered, causing blood poisoning, from which
he died. (Wis.) Cary v. Preferred Accident Ins. Co., 997.
21. ACCIDENT INSURANCE— Blood Poisoning.— .\n mcidrnt pol-
icy exempting from liability and injury "resulting from any poison or
1128 Index.
infpction, or from anything accidentally or otherwise taken, adminis-
tered, absorbed, or inhaled," does not exempt the insurer from lia-
bility where the assured accidentally falls, sustaining an abrasion of
the skin, through which bacteria enter, causing blood poisoning, from
■which he dies. (Wis.) Gary v. Preferred Accident Ins. Co., 997.
22. ACCIDENT INSURANCE— Bodily Infirmity.— A n exemption
in an accident policy from liability for death "resulting either di-
rectly or indirectly, wholly or in part, from bodily infirmity or dis-
ease of any kind," does not exempt the insurer where the infirmity
or disease results from an accident, as when the insured acoidentally
falls, sustains an abrasion of the skin, and blood poisoning follows,
which results in death. (Wis.) Gary v. Preferred Accident Ins. Co.,
997.
Mutual Insurance Companies.
See Benefit Associations.
23. MUTUAL INSURANCE — Termination of Membership. — ^Under
the Charter of a Mutual Insurance company providing, in effect, that
one can become a member only by taking out a policy of insurance
and that the membership can survive only to the end of the policy
period upon which it is based, no one can rightly be treated as a
member for any purpose at any time unless he then holds an unex-
pired policy of insurance. (Wis.) Iluber v. Martin, 1023.
24. MUTUAL INSURANCE — Commencement of Membership. — If
the charter of a mutual insurance company contains no provision
on the subject, membership commences only with the taking out of
a policy, and lasts only for the policy period. (Wis.) Huber v.
Martin, 1023.
25. MUTUAL INSURANCE — Status of Members. — As regards
rights and remedies, the policy-holders in a mutual insurance com-
pany are stockholders therein the same as owners of stock in a
stock corporation, there being no charter provision to the contrary-
(Wis.) Huber v. Martin, 1023.
26. MUTUAL INSURANCE — Interests of Members. — The interests
of policy holders in a mutual insurance company are twofold: they
are both insurers and insured. In respect to the former, they are
bound to share in the losses and entitled to share in the profits of
the business on the basis of a partnership, except so far as the
charter or policy contract provides otherwise. (Wis.) Huber v.
Martin, 1023.
27. MUTUAL INSURANCE— Title to Property.— The title to the
property of a mutual insurance corporation is in the company, but
the equitable interests therein are vested in the members the same
as in case of a stock corporation. While the corporation owns the
property, the members own the corporation. (Wis.) Huber v. Mar-
tin, 1023.
28. MUTUAL INSURANCE — Creation and Distribution of Sur-
plus.— It is competent for a mutual insurance corporation, there being
no limitation in its charter to the contrary, to make rates for insur-
ance with a view of probably creating a surplus and of subsequently
distributing the same to members so far as experience shall show that
the same is not needed in the business. (Wis.) Huber v. Martin,
1023.
29. MUTUAL INSURANCE— Distribution of Surplus.— In case of
a distribution of the surplus of a mutual insurance company or of
its other assets, ther« being no charter provision to the contrary, ez-
Index. 1129
iating poliey-holdera and such only are the legitimate distributees.
In the aggregate, they are entitled to the whole. (Wis.) Hubtr v
Martin, 1023.
30. MUTUAL INSURANCE— Property Eights of Members.— The
Legislature may Alter or amend the charter of a corporation, but
cannot legitimately appropriate its property without the consent of
all its members, either to its own use or that of a private party,
though Biich party be a successor corporation, in the absence of
some authorization to the contrary in the charter origiually. (Wis.)
Huber v. Martin, 1023.
31. MUTUAL INSUEANCE— Property Eights of Members.— For
all except corporate purposes, the property of a mutual insurance
company, the same as that of any other corporation, belongs to its
members, whether they are stockholders in the technical sense or in
the broader one which includes policy-holders in such company.
(Wis.) Huber v. Martin, 1023.
32. MUTUAL INSUEANCE — Constitutional Eights of Members.—
The property of a mutual insurance company and the equitable prop-
erty rights of its members are within the guaranties of the state con-
stitution as regards the inhibition against laws impairing the obliga-
tion of contracts, and the inhibition of the national constitution as
regards the equal protection of the laws and deprivation of property
without due process of law. (Wis.) Huber v. Martin, 1023.
33. MUTUAL INSUEANCE— Distribution of Assets.— A law en-
acted during the life of a mutual insurance company providing for
the distribution of its assets or a bestowal thereof upon another
without consent of all of its members, no authority in that regard
being contained in the charter of such company, offends against the
constitutional limitations referred to. (Wis.) Huber v. Martin,
1023.
34. MUTUAL INSUEANCE— Suits by Members. — Any member of
a mutual insurance company, suing for himself and others similarly
interested, may invoke equity jurisdiction to redress or prevent any
wrong injuriously affecting the property rights of the corporation,
when its officers will not move appropriately to that end. (Wis.)
Huber v. Martin, 1023.
35. MUTUAL INSUEANCE — Eeorganization on Stock Plan.— In
case of success, in form, of an attempt to reorganize a mutual insur-
ance company on the stock plan under a law, in terms, authorizing
it, and the insurance business formerly carried on by the old com-
pany being continued ostensibly by the new creation, using the
former's assets and goodwill, if the attempt is fruitless because of
the enabling act being void such continued business is to be regarded
are really that of the old corporations; as belonging to it. (Wis.)
Huber v. Martin, 1023.
Foreign Insurance Companies.
See Hcceivrrs, 1, 2.
86.— FOEEIGN INSUEANCE COMPANY— Eevocatlon of License.
A Statute providing that if a foreign insurance company, without the
consent of the other party to any suit brought by or against it in a
state court, removes the suit to a federal court, the insurance com-
missioner shall forthwith revoke its authority to do business in the
state, does not offend the United States constitution. (Ky.)
Prewitt V. Security Mutual Life Ins. Co., 264.
1130 Index.
37. INSUEANCE — Foreign Insiirance Companies — Assets. — Assess-
ments to become clue a foreign life insurance company from policy-
holders residing within the state are not, when due, debts or choses
in action which such company can enforce therein. (N. C.) Black-
well V. Mutual Reserve etc. Assn., 677.
38. INSniLA.NC£ — Foreign Companies — Void Contracts of Insur-
ance.— A provision in an insurance policy that "this contract shall
be governed by, subject to, and construed only according to the
laws of the state of New York, the place of this contract being ex-
pressly agreed to be the home office of said association in the city
of New York, ' ' is void so far as its enforcement in the courts of an-
other is concerned. (N. C.) Blackwell v. Mutual Eeserve etc. Assn.,
677.
INTEREST.
INTEREST — Application of. — Interest on a judgment or debt
doe is computed up to the time of the first payment, and the payment
so made is first applied to discharge the interest, and afterward, if
there be a surplus, it is applied to sink the principal, and so toties
quoties, taking care that the principal thus reduced shall not at any
time he suffered to accumulate by the accruing interest. (Neb.)
Dickson v. Stewart, 596.
INTERSTATE COMMERCE.
See Commerce.
INTOXICATINa LIQUORS.
1. INTOXICATING LIQUORS — Construction of Statute. — A stat-
ute enumerating certain liquors, including "cider," when kept and
deposited with intent to sell them for tippling purposes, or as a bever-
age, and declaring them to be intoxicating, was intended to include
and does include "cider," when kept and sold for tippling purposes
or as a beverage, even though such cider may be unfermented and non-
intoxicating in fact. (Me.) State v. Frederickson, 295.
2. INTOXICATING LIQUOR — Statutory Construction. — When it
appears that a certain liquor comes within the scope of a forbidden
statutory enumeration as intoxicating, that moment its character be-
comes fixed by law, and its nonintoxicating character, as a matter of
fact, becomes entirely immaterial with respect to the application of
the statute. (Me.) State v. Frederickson, 295.
3. INTOXICATING LIQUORS — Constitutional Law.— The consti-
tutional right of the state legislature to regulate or prohibit the sale
and keeping of intoxicating liquors, and to declare certain liquors in-
toxicating within the meaning of the law governing intoxicating
liquors, irrespective of the intoxicating character of such liquors as
a matter of fact is a legal exercise of the police power of the state
and not in contravention of either the state or United States constitu-
tions. (Me.) State v. Frederickson, 295.
JUDGMENTS
Reversal or Entry on Appeal.
1. JUDGMENTS — Power of Supreme Court to Enter. — When the
supreme court reverses or affirms the judgment of the court below,
it may, in its discretion, enter final judgment therein or direct it to
Index. 1131
be 80 entered in the court below. (N. C.) North Carolina Corp
Com. V. Atlantic Coast Line E. E. Co., 636.
2. JUDGMENT— Effect of Eeversal.— Where the claim of a mort-
gage creditor was adjudged a lien superior to that of attaching cred-
itors upon property assigned for the benefit of creditors, and he,
under order of court, withdrew the funds which the assignees had
paid into court, and distributed them among his creditors, the cred-
itors of the assigned estate, upon the reversal of the judgment which
has been appealed from but not superseded, cannot compel his cred-
itors to refund the money, but must look to him alone. (Ky.)
Fidelity Trust etc. Co. v, Louisville Banking Co., 279.
Entry Nunc Pro Tunc.
3. JUDGMENTS— Entry Nunc Pro Tunc— Parol evidence of an
order omitted from the record, if satisfactory, is suflScient to au-
thorize a nunc pro tunc order or judgment. (Ark.) Liddell v.
Bodenheimer, 42.
4. JUDGMENTS— Entry Nunc Pro Tunc— A court has no au-
thority to set aside or modify its judgment after the expiration of
the term at which it was rendered, on application for a nunc pro
tunc order. (Ark.) Liddell v. Bodenheimer, 42.
Default Judgment.
5. JUDGMENT BY DEFAUIiT, What is not. — A judgment en-
tered after the defendant has answered, upon an issue of fact, though
there is no appearance by him at the trial and no evidence oflFered
on his part, is not a judgment by default. A judgment by default is
one where the previous default of the defendant renders unnecessary
any evidence on the part of the plaintiflF. (Mich.) Leahy v. Wayne
Circuit Judge, 443.
6. STATUTES, Construction of Must be Prospective.— .\ statute
authorizing a court to open defaults does not apply to judgments by
default already existing. (Ga.) Morris v. Duncan, lOo.
7. JUDGMENTS — Entry Nunc Pro Tunc — Limitations. — An ap-
plication for a nunc pro tunc order cannot be barred by limitation.
(Ark.) Liddell v. Bodenheimer, 42.
Belief from Judgment.
8. JUDGMENT, Belief in Equity Against. — If the process is not
served on the <lefendant, equity has jurisdiction to relieve from tho
judgment entered against him. (Mich.) Wilcke v. Duros.s, 394.
9. JUDGMENT, Belief Against in Equity — Amount Involved. —
Though a judgment against the defendant is for loss than one hun-
dred dollars, yet if under it property is levied upon of much greater
value than that sum, equity is not prevented from granting relief
on the ground that one hundred dollars is not involved. (Mich.)
Wilcke V. Duross, 394.
10. BELIEF Against a Judgment for Want of Service of Process,
Though the Defendant Knew of the Void Service When Made and
Failed to Take Any Measures to Prevent the Entry of Judgment
Thereunder. — If, in an action. j>r(><'os8 is served on the dcfominnt '■
daughter of the same name as horsflf, and the defendant is at once
informed of such service, but <lofs not appear and nmkn any objec-
tion, and permits the case to proceed to jmlgment and a transcript
of the judgment to be taken out and levied on her property, whereupon
she brings suit in equity for relief, such relief must be granted, but
the court has a discretion tu refuse to award her coats. (Micb.j
Wilcke V. Duross, 394.
1132 Index.
Assignment of Judgment.
11. JUDGMENTS — Assignment. — Where a judgment must be
deemed a chose in action upon which an action may be maintained
by an assignee in his own name, an assignment of judgment in writ-
ing, although not under seal, is sufficient. (Me.) Hayes v. Rich, 314.
12. JUDGMENTS — Assignment — Witnesses. — In an action on a
judgment brought by an original judgment creditor or by his assignee in
his individual capacity, the defendant therein is a competent witness
as to all matters material to the issue; and any transaction or pro-
ceeding which would effectually render him incompetent in such action
will not be tolerated or approved. (Me.) Hayes v. Bich, 314.
Foreign Judgments.
13. JUDGMENTS, FOREIGN — ^Proof Of, to Confer Jurisdiction. —
One claiming authority to sue as trustee under a foreign judgment,
must, to maintain his suit, when the defendant denies the jurisdic-
tion of the foreign court to appoint the plaintiff a trustee, not only
produce the judgment appointing him, but also prove such pleadings
and proceedings as empowered the court to render the judgment.
(Ark.) Swing v. St. Louis Eefrigerator etc. Co., 38.
14. JUDGMENT OF ANOTHER STATE— Fraud as Defense-
Equitable Defense. — Although a judgment when sued upon in another
state cannot be impeached or attacked for fraud by any plea known
to the common-law system of pleading, it is equally clear that upon
sufficient allegation and proof defendant is entitled, in a court of
equity, to enjoin the plaintiff from suing upon or enforcing his judg-
ment. (N, C.) Levin v. Gladstein, 747.
15. JUDGMENTS OF ANOTHER STATE will be given the same
faith and credit which is given domestic judgments. (N. C.) Levin
V. Gladstein, 747,
16. JUDGMENTS OF OTHER STATES— Fraud as Defense — Jus-
tice's Jurisdiction. — In an action upon a judgment of a sister state
the defendant may interpose the defense in the justice's court, that
the judgment was obtained by fraud practiced upon him, (N. C.)
Levin v. Gladstein, 747.
JUDICIAL SALES,
1. JUDICIAL SALE. — Mere Inadequacy of Price is not sufficient
to set aside a sale of decedent's real estate to pay debts. (Ky.)
Costigan v. Truesdell, 241.
2. JUDICIAL SALE — Setting Aside After Confirmation. — Except
upon the grounds stated in section 518 of the Civil Code practice, a
court is without power to set aside a sale of a decedent's real estate
to pay debts after its confirmation. (Ky.) Costigan v, "'ruesdell,
241.
3. JUDICIAL SALE— Parties. — ^A Sale of a Decedent's real es-
tate to pay debts in an action for the settlement of the estate will
not be set aside because a person who claims to be a creditor, but who
has not established his claim, was not made a party to the proceed-
ings. (Ky.) Costigan v. Truesdell, 241.
4. JUDICIAL SALE. — ^Where the Sale of an Equity of Redemp-
tion is ordered to pay a decedent's debts, the fact that the order of
sale is not executed does not prevent the termination of the statutory
right to redeem, (Ky.) Costigan v. Truesdell, 241.
5. JUDICIAL SALE — Rents. — If a Purchaser of a Decedent's
Realty, sold to pay a mortgage and other indebtedness, takes posses-
Index. 1133
Bion before the expiration of the time for redemption, he becomes
liable to the owners for the rents. They are not assets of the estate,
but a claim in favor of the husband and heirs of the decedent. (Ky.)
Costigan v. Truesdell, 241.
6. JUDICIAL SALE — Eight of Possession. — The Owners of a de-
cedent's estate, sold to pay a mortgage and other indobtednrss. are
entitled to possession until a receiver is appointed or the period of
exemption expires, (Ky.) Costigan v. Truesdell, 241.
JUEISDICTION.
See Courts; Process.
JURY.
TBIAL — Challenges to Jurors. — A party to an action cannot
make a valid exception to the ruling of the court sustaining the
other party's objection to a juror where the first party has not ex-
hausted his peremptory challenges, and it appears that the jury
chosen to try the ease constituted a panel entirely acceptable to both
parties, (N. C.) Ives v, Atlantic etc. R. R. Co., 732.
JUSTICE'S COURT.
1. JUSTICE'S COURT. — The Filing of a Notidls of Appeal from
a justice of the peace to the district court under section 17G0 of the
Code of Civil Procedure must precede, or be contemi)oraueou8 with,
the service thereof on the adverse party or his attorney, otherwise
the district court does not acquire jurisdiction. (Mont.) State v.
District Court, 522.
2. JUSTICE'S COURT. — A Party Wishing to Appeal from a
justice of the peace must pursue the statutory method strictly, and
a failure to do so does not devest the justice's court of its jurisdic-
tion. (Mont.) State v. District Court, 522.
Note.
Libel, liability of corporations for, 721-726.
LIMITATION OF ACTIONS.
Constitutional Law.
1. CONSTITUTIONAL LAW— Statute of Limitations. — A statnte
merely prescribing a j)eriod of limitations within wiiioh outstanding
l>ust due state bonds may be pr*-siiited for ])ayin.-nt and rrdeinption.
is not unconstitutional, either as depriving the hondhol.ler of his
property without due process of law, or as impairing the obligation of
his contract. (.Ark.) Tipton v. Wniythe. 44.
2. CONSTITUTIONAL LAW— Statute of Limitation.^.— Thr 1. gi«-
lature may prescribe a period of limitafinn witliin whifh riglits may
be asserted, even though no limitation existed when the right ac-rued,
or may shorten tlie i>eriod of limitation which existed whi n the right
accrued, provided the added limitation is reasonable and affords
ample opi>ortunity for the ass« rtion of existing riglits. (Ark.)
Tipton v. Smythe, 44.
3. CONSTITUTIONAL LAW- Limitation of Actions. -!n defer-
mining whether a statute of limitations alTords a reasonable time
1 134 Index.
for the assertion of rights existing at the time of its passage, the
court must consider the circumstances under which it is to apply
(Ark.) Tipton v. Smythe, 44.
4. CONSTITUTIONAL LAW— Statute of Limitations— Notice.— A
statute providing for the calling in and payment of certain past due
state bonds after six months' public notice before the day fixed
for expiration of the time for presenting the bonds for payment,
is not unconstitutional as imposing unreasonably short terras as to
length of time or adequacy of the notice, either as to resident or
nonresident bondholders. (Ark.) Tipton v. Smythe, 44.
5. CONSTITUTIONAL LAW— Statute of Limitations.— A statute
providing that certain past due state bonds shall be called in and
paid upon, six months' public notice, and that unless presented within
such time the right of presentation and payment shall be barred,
is not unconstitutional, as depriving a bondholder, whether resident
or nonresident, of his property without due process of law, nor does
it impair the obligation of his contract. (Ark.) Tipton v. Smythe,
44.
Burden of Proof.
5. LIMITATION OF ACTIONS— Burden of Proof.— If the statute
of limitations is set up as a defense, the burden is upon the plaintiff
to prove that his action was brought within the time prescribed by
such statute. (Ayk.) Swing v. St. Louis Refrigerator etc. Co., 38.
State and Municipalities.
6. LIMITATION OF ACTIONS Against the State.— Statutes of
limitation do not run against the state in respect to public rights,
unless it is expressly within the terms of the statute. (111.) Brown
V. Trustees of Schools, 146.
7. LIMITATION OF ACTIONS— Minor Municipalities.— The rule
that statutes of limitation do not run against the state applies in favor
of minor municipalities created by it as well as to local governmental
bodies in respect to governmental affairs affecting the general public.
The exemption extends to counties, towns and minor municipalities
in all matters respecting strictly public rights as distinguished from
private or local rights, but as to matters involving private rights,
they are subject to the statute of limitations to the same extent as in-
dividuals. (111.) Brown v. Trustees of Schools, 146.
8. LIMITATION OF ACTIONS— School Districts.— Statutes of
limitation run against trustees of school districts with respect to
property held by them in trust for the use of the free public schools
of the district, because the people of the state in general have no in-
terest in common with the inhabitants of the school district in the
Bchoolhouse site. (111.) Brown v. Trustees of Schools, 146.
See Judgments, 7; Mortgages, 7.
LARCENY.
1. LARCENY — Goods Obtained by Trick. — If the owner of goods
alleged to have been stolen parts with both the title and the posses-
sion to the thief, not expecting the goods to be returned to the owner
or to be disposed of according to his directions, neither the taking
nor the conversion amounts to larceny, though the owner was induced
to part with the title and possession through the fraud or mis-
representation of the thief. (lU.) Aldrich v. People, 166.
Index. II35
2. LAECENT.— If the Owner of Goods Parts with the Possession,
but Ketains the Title, expecting and intending that the goods shall
be returned to him or disposed of in some particular manner agreed
upon, the subsequent felonious conversion of the property by the
alleged thief relates back and makes the taking and conversion lar-
ceny. (111.) Aldrich v. People, 166.
3. IiABCENT. — Every Larceny Includes a Trespass. (111.) Al-
drich V. People, 166.
4. IiAECENY of Property in Possession of Servant.— The fact
that a servant in whose possession property is consents to its taking
will not prevent the act being larceny, he having no authority to
consent, and the wrongdoer being aware of that fact. (111.) Al-
drich V. People, 166.
5. LAECENY. — The Asportation Necessary to Larceny may be
Effected by an innocent human agency as well as by mechanical
agency or by the offender's own hand. (111.) Aldrich v. People,
166.
6. LAECENY Effected by Shifting the Checks on Baggage.— If
a larceny is effected by shifting the checks on baggage which is in
the hands of a transportation company, and thereby an agent of such
company is allowed to further the criminal purpose by delivering the
baggage to a person not entitled thereto, who receives and converts
it to his own use, having in his own mind at all times the felonious in-
tent to steal the property, he is guilty of larceny. (111.) Aldrich
V. People, 166.
LIBEL AND SLANDEB.
1. SLANDEB BY COEPOEATION. — Corporations may become
civilly liable for slander. (N. C.) Sawyer v. Norfolk etc. R. R.,
716.
2. SLANDEB BY COEPOEATION- Act of Servant— Test of
Liability. — The liability of a corporation for slander or other ma-
licious tort committed by its servant depends entirely on the rela-
tionship of master and servant, and the test of responsibility is
whether the slander or tort was committed by authority of the master
expressly conferred or fairly implied from the nature of the em-
ployment or the duties incident to it, and when the act is not clearly
within the scope of the servant's employment or incident to hia
duties, but there is evidence tending to establish that fact, the ques-
tion may be referred to the jury to determine whether the tortious
act was authorized. (N. C.) Sawyer v. Norfolk etc. R. K., 716.
3. SLANDEB BY COEPOEATION- Act of Superintendent.— If
a person goes to the office of the superintendent of a corjioration to
get employment, and such superintendent, after telling him that the
corporation will not employ him, proceeds to insult and defame him,
the corporation is not liable for the slander, as such art is not within
the scope of the employment of its superintendent. (N. C.) Sawyer
V. Norfolk etc. E. R., 716.
LIS PENDENS.
1. LIS PENDENS Affects not Only a Purchaser from One of the
Parties to the suit, but also those who hold under him. (Ga.)
Bridger v. Exchange Bank, IIS
2. LIS PENDENS Applies to Purchasers from the Plaintiff as
well as to purchasers from the defendant, ((ia.) Bridger v. Ex-
change Bank, 118.
1136
Index.
3. LIS PENDENS Applies to a Judgment Creditor whose rights
as an encumbrancer are acquired during the existence of the lis
pendens; and also to the purchaser of the property at a judicial
sale had in execution of the judgment in favor of a person whose
interests in the property to be sold are affected by the lis pendens,
(Ga.) Bridger v. Exchange Bank, 118.
4. LIS PENDENS Begins in Georgia from the filing and docket-
ing of the petition, if followed by the issuance and service of process
and due prosecution. (Ga.) Bridger v. Exchange Bank, 118.
5. LIS PENDENS — Cross-complaint. — Kelative to an afBrmative
cross-action or cross-complaint, the defendant occupies the position of
a plaintiff, and a lis pendens as to the cross-complaint operates
against a purchaser from the plaintiff only from the time it is filed.
(Ga.) Bridger v. Exchange Bank, 118.
6. LIS PENDENS— Laches.— Either the plaintiff or the defendant
may lose the benefit of the pendency of lis pendens by failure on his
part to prosecute- with due diligence. (Ga.) Bridger v. Exchange
Bank, 118.
LOST INSTRUMENTS.
EQUITY JURISDICTION — Lost Checks. — A court of equity
has jurisdiction to entertain a suit for the recovery of the amount
due upon a lost check, not negotiable for lack of indorsement. (N.
J. Eq.) Moore v. Durnan, 635.
MANDAMUS.
1. MANDAMUS — Discretion of Court. — An application for a writ
of mandamus is addressed to the sound judicial discretion of the
court, and the circumstances of each case must be considered in
determining whether the writ shall issue. After it has issued, how-
ever, it is only in a clear case of abuse of discretion that the granting
of the writ will be reversed on appeal. (Neb.) Moores v. State,
605.
2. MANDAMUS Against Officers to Suppress Gambling. — ^If pros-
ecutions have failed to close a gambling-house run in open violation
of law, the existence of the remedy by complaint and arrest of the
offenders does not prevent the issue of a writ of mandamus to compel
the mayor and chief of police to perform their duty, and exercise
their summary powers to prevent such violation of the laws. (Neb.)
Moores v. State, 605.
3. MANDAMUS — Motives of Relator. — The fact that one of the
relators, suing out a writ of mandamus to compel the closing of a
gambling-house openly run in violation of law, admits that his motive
in seeking to close such house is the belief that a certain person who
is actively assisting in its operation is interested in its profits, is not
ground for reversing the judgment granting the issuance of the writ.
(Neb.) Moores v. State, 605,
4. MANDAMUS to Close Poolroom. — The keeping of a poolroom
in open violation of law is such act as may be prevented by a writ of
mandamus directed against municipal officers whose duty it is to
close such roono. (Neb.) Moores v. State, 605.
See Corporations, 8.
Index. 1137
mastee and seevant.
Liability of Employer to Employe.
1. EAILEOADS — Duty and Liability as to Disabled Cars.— A rail-
road company is bound only to exercise due care, through its vice-
principals, and through a proper system of timely inspection, to dis-
cover disabled cars and notify its trainmen of such condition. When
this is done, the risk of handling the cars and carrying them to the
shop becomes one of the risks ordinarily incident to the employment
assumed with such trainmen. (Ark.) Marshall v. St. Louis etc. Ey.
Co., 27.
2. EAILEOADS — Disabled Cars — ^Sisks Assumed by Trainmen. —
If a car is reported to a railroad brakeman as being out of order or
disabled, or is known to him to be in such condition, the burden of
ascertaining the defect and source of danger is cast upon and is as-
sumed by him. (Ark.) Marshall v. St. Louis etc. Ry. Co., 27.
3. EAILEOADS — Disabled Cars — Duty to Employe — Assumption
of Eisks. — Although a railway employe is engaged in the hazardous
work of handling disabled cars, he does not assume risks created by
the negligence of the railroad company in not exercising due care to
protect him. (Ark.) Marshall v. St. Louis etc. Ry. Co., 27.
4. EAILEOADS — Disabled Cars — Assumption of Eisk. — A railroad
brakeman engaged in coupling a disabled car to be taken to a repair
shop, with notice of its condition, assumes the risk of handling it.
(Ark.) Marshall v. St. Louis etc. Ry. Co., 27.
5. EAILEOADS — Disabled Cars — Assumption of Eisks. — A rail-
road employe whose duty it is to handle disabled cars, knowing that
a certain car is disabled, assumes as one of the ordinary risks of his
employment any injury resulting from the disabled condition of such
car in the absence of negligence on the part of the railroad com-
pany. (Ark.) Marshall v. St. Louis etc. Ry. Co., 27.
IS
Liability of Employer for Tort of EmployL
6. MASTEE AND SEEVANT— Tort of Servant.— A master -
not liable for the torts of his servant, unless they are connected with
his duties or within the scope of his employment. (iNcb.) Clancy
y. Barker, 559.
MISTAKE.
See Equity, 3-5.
MONOPOLIES.
TEUST— Unlawful Combinations Though There Is not a Com-
plete Monopoly.— A combination or schi nie to prevent competition
between corporations is unlawful, though other persons arc engaged
in the same business and a complete monopoly thor.of will not re-
sult, if the tendency is in that direction. (HI.) Dunbar v. American
Telephone etc. Co., 132.
See Corporations, 13.
MOETQAQES.
Deed a» "Mortgage.
1 DEED AS MOETGAOE— Evidence to Show.— If a penon ac-
quires the l.gal title bv purchase at a sluriffV mile of land unaer exe-
cution, in pursuance of a parol agreement with the judgment debtor
Am. St. Rep., Vol. 115—72
1138 Index.
to hold the title thus obtained as a security for a loan of money
paid to relieve the land from the judgment lien, and that he will
reconvey when the money is refunded, the case is not distinguishable
from any other where the deed, though absolute in terms, is designed
simply as security for a loan, and parol evidence is admissible to
show the nature of the transaction. (Neb.) Dickson v. Stewart,
696.
Assignment and Registration Thereof.
2. MORTGAGES— Assignment. — A mortgage delivered to a third
person without consideration, in order that he may procure money
thereon for the mortgagor, is valid in the hands of such third person 's
assignee, for the money paid therefor by the latter, although the
former fails to pay over the money to the mortgagor. (N. J. Eq.)
Bogart V. Stevens, 627.
3. RECORD — Omission to Record Assignment of Mortgage. — If
the assignee of a mortgage fails to record the assignment, knowing
that the mortgaged land was held by a real estate dealer with con-
sequent likelihood of sale, he thereby negligently places it in the
power of the mortgagee to deceive or mislead a purchaser, who, by
law and custom, would have the right to rely on the record. With-
holding the assignment from record is a persistent declaration to all
persons dealing merely with the title to the realty that the mort-
gagee owns the debt. (Wis.) Marling v. Nommensen, 1017.
4. RECORD — Failure to Record Assignment of Mortgage. — If the
assignee of a mortgage, knowing the property is in the hands of a
real estate dealer and therefore likely to be sold, withholds the as-
signment from record, he is estopped to assert the mortgage as
against a vendee of the land who purchases in good faith and in reli-
ance on his attorneys' examination of the abstract showing only the
mortgage, the discharge of which by the mortgagee is at the same
time delivered, with the assurance that the note would be surren-
dered in a few days. (Wis.) Marling v. Nommensen, 1017.
Foreclosure and Redemption.
5. MORTGAGE FORECLOSURE— Delay in Making Sheriff's
Deed. — Where the purchaser at a foreclosure sale goes into possession
at the expiration of the one year allowed for redemption, a deed exe-
cuted on his application therefor nearly four years afterward by the
sheriflf, as successor of the sheriff making the sale, is valid notwith-
standing the delay, no offer to redeem having been made. (Mont.)
McCauley v. Jones, 538.
6. MORTGAGE FORECLOSURE — Deed by Sheriff's Successor. —
Under section 12.37 of tho Code of Civil Procedure, which makes it
the duty of the sheriff whi^ conducts a foreclosure sale, or if he is
no longer in office, then his successor, to make a deed to the purchaser,
any sheriff succeeding the one who makes the deed is the "successor"
of such officer. (Mont.) McCauley v. Jones, 538.
7. MORTGAGES — Foreclosure — Redemption — Limitation. — The
right to foreclose a mortgage, and the right to redeem therefrom, are
reciprocal, and an action may be brought to redeem at any time
before the statutory bar is complete. (Neb.) Dickson v. Stewart,
596.
MUNICIPAL CORPORATIONS.
City Charter.
1. CITY CHARTER. — The Necessary Effect of Adopting a part of
the general charter by a city existing under a special charter is to
I
Index. 1130
place such city, pro tanto, nnder the general law as the same may be
from time to time changed. (Wis.) Hay v. City of Baraboo, 977.
Defective Streets and Sidewalks.
2. DEFECTIVE STEEETS— Liability of Lot Owners.— The pol-
icy of the legislature has been so long and firmly entrenehed in our
system, to make municipalities liable primarily and directly to
sufferers from the failure to keep the public ways in a reasonably
safe condition for public travel, that nothing short of some unmis-
takable repeal of the statute on the subject can reasonably be deemed
to have been intended to have that effect. (Wis.) Hay v. City of
Baraboo, 977.
3. DEFECTIVE SIDEWALKS — Liability of Lot Owners.— Whore
a city charter makes it the duty of lot owners to keep the adjacent
sidewalks in repair, and provides that persons injured through any
defect in a sidewalk arising out of the wrong or negligence of any
person other than the city shall exhaust their legal remedies to
enforce the private liability before holding the city liable therefor,
the liability referred to is that which results from active wrongdoing,
and rests upon common-law principles, independently of statutory
enactments. (Wis.) Hay v. City of Baraboo, 977.
4. DEFECTIVE SIDEWALKS — Liability of Lot Owner.— A city
charter provision making it the duty of the owners or occupants
of premises in front of which sidewalks are located to keep such
walks in repair or pay the expenses incurred by the municipality
in doing so, does not impliedly make such owners or occupants liable
to travelers for injuries occasioned by the walks being out of repair.
(Wis.) Hay v. City of Baraboo, 977.
5. DEFECTIVE SIDEWALKS— Giving Notice to City at In-
jury.— A notice required by statute to be given the city in case of
injury to a person by reason of a want of repair of a sidewalk is a
prerequisite to a right to compensation for the injury. (Wis.) Hay
V. City of Baraboo, 977.
6. DEFECTIVE SIDEWALK — Change In Procedure for Enforcing
Liability. — A charter provision prohibiting the enforcement of a right
of action for a personal injury suffered from a sidewalk being out
of repair, except by presentation of the claim to the city council,
and, in case of adverse action, appeal to the district court, is per-
missible under the rule that an ordinary remedy may be taken away
if a -ew one is given in place thereof, (Wis.) Hay v. City of
Baraboo, 977.
7. DEFECTIVE SIDEWALK— Giving Notice to City of In-
jury.— A charter provision that no action shall be maintained agninst
the city to enforce any tortious liability, unless a notice, signed by
the person injured, of the wrong and the circumstances thereof and
the damage claimed, shall be presented to the council witliin ninety
days after the injury, is a statute of limitations wliich extinguishes
the right of action upon the expiration of the time specified. (Wis.)
Hay V. City of Baraboo, 977.
NEGLIGENCE.
1. PROXIMATE CAUSE. — Besponslble Causation, as applied in
the law, is not dependent on time, distance, or a mere succession of
events. If an injury is inflicted by an event, and it is found that
it has set in motion all the succeeding agencies shnrinir in the result,
then such event, as the efiicient producing cause of the injury, ia
1140 Index.
held to be the proximate cause of the injury. (Wis.) Gary v. Pre-
ferred Accident Ins. Co., 997.
2. NEGLIGENCE— Obstructing Sidewalk.— If a street railway
company, as a warning to the public, stretches a rope across the side-
walk in plain view while it is repairing its poles placed inside the
curbing, and a child between nine and ten years of age runs against
such rope, sustaining fatal injury, the company is not guilty of
negligence per se, and there can be no recovery against it, since the
accident is one that could not reasonably have been expected.
(Va.) Newport News etc. Ey. Co. v. Clark, 868.
3. TEESPASSEBS — Liability for Injury to. — A land owner does
not owe to a trespasser, whether adult or infant, the duty of hav-
ing his land in a safe condition for such trespasser to enter upon. He
assumes the risks of the condition of the land, and ordinarily has
no remedy for harm happening to him. (Va.) Walker v. Potomac
etc. R. R. Co., 871.
4. TBESPASSERS — Duty to.— A land owner owes no duty to a
trespasser, adult or infant, except that he must not wantonly or in-
tentionally injure him or expose him to danger. (Va.) Walker
V. Potomac etc, R, R. Co., 871.
See Death.
NEGOTIABLE INSTRUMENTS.
See Bills and Notes.
NEW TBIAL.
, NEW TBIAL — Criminal Cases. — A motion for a new trial in
a criminal case on the ground of newly discovered evidence will not
be granted, especially where the evidence is merely cumulative or
where it has been withheld by the moving party. (N. C.) State v.
Lilliston, 705.
NOTICE.
1. NOTICE. — Possession of Land is Notice of whatever right or
title the occupant has. (Ga.) Bridger v. Exchange Bank, 118.
2. NOTICE. — The Continued Possession of the Grantor After the
Execution of a Conveyance gives the world notice of his rights, as
where his conveyance was in effect given as security for indebtedness
and he took a bond for a reconveyance on its payment. (Ga.)
Bridger v. Exchange Bank. 118.
NUISANCE.
1. NUISANCE — Legislative Authority. — To escape liability for
a nuisance created incidentally to an act, the performance of which
is authorized by statute, it must appear that the particular act com-
plained of, and immunity from its consequences, were within the
contemplation of the legislature at the time of enacting the statute.
(Va.) Townsend v. Norfolk Ry. etc. Co., 842.
2. NUISANCE — Legislative Authority. — While the legislature
may authorize acts which would otherwise be a nuisance when they
affect or relate to matters in which the public have an interest, the
statutory authority which affords immunity for such acts must be ex-
press, or a clear and unquestionable implication from powers expressly
granted, and it must appear that the legislature contemplated the
Index. 1141
doing of the very act which occasioned the injury. (Va ) Townscnd
V. Norfolk Railway etc. Co., 842.
See Constitutional Law, 3; Street Railways.
OFFICERS.
CONSTITUTIONAI. I^A.W— Property Qualifications of Officers
of Drainage Districts. — A statutory requirement that the directors of
a drainage district shall be freeholders is not in contravention of a
constitutional limitation forbidding a property qualification for any
olfice of public trust. (Kan.) State v. Monahan, 224.
OPTION TO SELL STOCK.
See Corporations, 14-16.
PARENT AND CHILD.
Services ty Adult Child.
1. PARENT AND CHILD — Services Rendered by Adult Child —
Compensation. — If an adult child removes from the home of his
parent, marries, and afterward renders personal services to his parent
which are voluntarily accepted, a promise on the part of the parent
to pay therefor will be implied. (N. C.) Winkler v. Killian, 694.
2. PARENT AND CHILD— Services by Adult Child— Compensa-
tion.— In the absence of fraud or gross neglect, an adult child 's
claim for personal services rendered his parent after arriving at ma-
jority should be reduced by the amount actually received by such
child in the use and management of the parent's property, and not
by what he should have received by more diligent management.
(N. C.) Winkler v. Killian, 694.
Injury to Child.
3. NEGLIGENCE— Injcry to Minor Child Employfi^Misrepre-
sentation as to Age. — Although a minor child applying for employ-
ment misrepresents himself to be of age, and such representation
is believed and relied upon by his employer, such facts do not bar
the minor from recovering for injury negligently inflicted upou
him by his employer. (Mo.) Matlock v. Williamsville etc. By. Co.,
481.
4. NEGLIGENCE — Injury to Minor Child Employ6 — Misrepre-
sentation of Age — Estoppel to Recover. — Although a minor child ap-
plying for employment misrepresents himself to be of age, and such
representation is believed and relied upon by his employer, other-
wise he would not have been given employment, these facts do
not bar by estoppel in pais the right of either the minor employ6
or of his parent to recover for injury inflicted through negligence upon
such minor by his employer. The action is one of tort, and does not
arise out of a violation of contractual relations. (Mo.) Matlock
▼. Williamsville etc. Ry. Co., 481.
See Death.
Note.
Parent and Child, constructive trust against the one in favor of the
other, 793.
PARTIES.
TRIAL — New Parties. — Aitlmugh a statute provides for in-
tervention before trial only, yet the court haji puwcr to bring other
11-12 Index.
parties before it, even after trial, when satisfied that their presence
as parties is necessary to a proper determination of the case. (Neb.)
Brown v. Brown, 568.
PARTITION.
In General. •
1. PARTITION— Expenses of Real Estate Agents in Negotiating
Sales. — If real property is directed to be partitioned by sale, and real
estate agents are employed to procure purchasers, the commissions of
such agents should not be directed to be paid out of the aggregate
fund, but must be taken care of by those employing them. (Tenn.)
Eutherford v. Rutherford, 799.
2. PARTITION OF PERSONALTY— Injunction— Receiver.— If,
pending a proceeding for the partition of personalty, the defendant
threatens the destruction or removal of the property, he may be
enjoined or a receiver may be appointed. (N. C.) Thompson v. Sil-
verthorne, 727.
Leaseholds.
3. PARTITION — Reimbursement of Moneys Paid for Lessee's In-
terest.— If it becomes proper to partition property by sale, and such
sale cannot be effected without first inducing persons having lease-
hold interests to surrender their leases, moneys paid to secure such
surrender may be directed to be reimbursed out of the aggregate fund.
(Tenn.) Eutherford v. Eutherford, 799.
Bemainders and Life Estates.
4. PARTITION. — Remaindermen cannot Compel Partition or a
Sale for Partition where their rights are purely contingent and it
is not possible to say who are the ultimate owners of the remainder.
(Tenn.) Eutherford v. Eutherford, 799.
5. PARTITION. — Life Tenants may Have a Partition or a Salo
for Partition, though it is not possible at the time to know in whom
the estate in remainder will ultimately vest. (Tenn.) Eutherford v.
Rutherford, 799.
6. PARTITION BY SALE Will not be Decreed whiere there are
contingent remainders, unless it is made to appear that it will be
for the benefit not only of the life tenant but of the whole estate.
(Tenn.) Eutherford v. Eutherford, 799.
7. PARTITION Between Life Tenants and Contingent Remainder-
men.— Where there are life tenants and contingent remaindermen, parti-
tion by sale may be made by having the value of the estates for life
ascertained by appraisement and paid over to the life tenants, and the
balance of the proceeds paid into court and invested in permanent
securities for the benefit of such persons as ultimately become entitled
to the estate in possession when the contingency on which it turns
shall be ascertained by the happening of the event. (Tenn.) Euther-
ford V. Euth(*rford, 799.
Sale and Division of Proceeds.
8. PARTITION by Sale may be Dacreed noi only wL<!re partition
in kind cannot be made, but also where the land is so situated that
partition by sale is manifestly for the advantage of the parties.
(Tenn.) Eutherford v. Eutherford, 799.
9. PARTITION BY SALE May be Decreed where the land is
80 situated with respect to two lines of railway that it is to the
Index. II43
advantage of the parties to sell it in small parcels for factory pur-
poses, and this though there are contingent estates. (Tenn ) Ruth-
erford V. Rutherford, 799. '
Estates of Decedents — Power of Executor or Trustee.
10. PARTITION— Power Conferred upon Executors or Trustees to
Make, When Exclusive.— If a testator by his will vests in his executors
authority to partition his real property among his heirs and devisees,
a court of equity will not take the execution of the trust out of their
hands unless they have abused it or have for an unreasonable time re-
fused to exercise it. (111.) Fischer v. Butz, 160.
11. PARTITION- Dismissal of BiU for Because Power to Partition
is Vested in Executors.- A bill filed for the partition of real property
of a testator or decedent will be dismissed where his executors are,
by the will, vested with authority to make partition, and only four
months and a half have elapsed since the death of the testator and
but three and a half months since the admission of the will to probate.
They should be allowed time to ascertain whether and to what extent
the estate is indebted, and to so inform themselves as to intelligently
exercise their discretion. (111.) Fischer v. Butz, 160.
12. PARTITION, Exercise of Power of, by Executors Though
There are Conflicting Claims of Title. — A claim by a woman that she
is the widow of a testator by virtue of a common-law marriage does
not constitute a sufficient ground for the taking of jurisdiction by a
court of equity of a suit to partition his property commenced by one
of his heirs, where the executors are, by the will, given power to
make partition and have not refused nor unreasonably delayed to ex-
ercise their power. (111.) Fischer v. Butz, 160.
13. PARTITION.— Jurisdiction of the Court to Make Partition of
the Property of a Decedent, he having vested his executors with power
to partition it, cannot be sustained on the ground that when the
suit for partition was commenced, it could not be known whether tho
personal property would be sufficient to pay his debts and legacies.
It will be no hardship to the heirs and devisees if they are compelled
to delay partition until the expiration of the time allowed for filing
claims in the probate court against the estate. (111.) Fischer v.
Butz, 160.
PARTNERSHIP.
1. PARTNERSHIP — Agreement for Joint Adventure and a Shar-
ing of the Profits, When does not Create. — .\n agreement between B.,
T., and G., that they will engage in raising sugar beets, that T. is
to manage the enterprise and receive therefor a stated sum, that B.
is to contribute his counsel and advice, that (f. is to a<lvance the
capital, that the profits shall be equally divided among the three,
that G. shall receive no return of his advances until all the other
obligations are met, and in case there is not enough to ine«'t thrne,
B. and T. will each be reHponsible for one-third of the dt-ficii-ncy,
does not make G. a partner, .'iiid an jn-tion cannot be MiiHt.-iincd againHt
him as such where it was clearly iiiidcrstood that neitlxT of the othi-r;*
had any authority to inakf contracts which would bind G., nor the
authority to make contracts to bind them, and that his liability Rhould
be limited to his aTlvances. (Mich.) Hrotherton v. (lilchrist, 397.
2. PARTNERSHIP, When Created and When not.— Though there
is a partnership win-never there is a conununity of property, of inter-
est, and of profits, there is no partnershij) if any of thoic elomentA is
missing. (Mich.) Brotherton v. Gilchrist, 397.
1144
Index.
3. PARTNERSHIP, Essentials of. — The essentials requisite to con-
stitute the relation of partners are a community of interest between
the parties for the purpose of profit. (Mil.) Mogart v. Smouse, 367.
4. PARTNERSHIP Between the Parties is a Matter of Intention
to be proved by their express agreement or inferred from their acts.
(Md.) Mogart v. Smouse, 367.
5. PARTNERSHIP in Lands, When Exists. — An agreement by
two or more persons to buy land and sell it and share the profits
or profits and losses constitutes them partners for that venture, and
entitles either of them to an accounting in equity for his share
of the joint transaction. (Md.) Mogart v. Smouse, 367.
6. PARTNERSHIP in Lands, Action at Law for a Share of the
Profits of. — If two persons have entered into a partnership to buy
and sell land, an action at law cannot be maintained by one of them
against the other for a share of the profits of the venture, there not
appearing to have been any settlement of accounts between them.
(Md.) Mogart v. Smouse, 367.
7. PARTNERSHIP — Loan to Member of Firm — Recovery as
Money had and Received. — If a third person, by mortgage or other-
wise, procures money and furnishes it to a person for the use of a
partnership of which he is a member, he, as a member of such firm,
becomes bound in equity and good conscience to repay such debt and
such loan may be recovered as for money had and received, unless all
or some part of it is barred by limitation and as to the part not bo
barred recovery may be had. (Me.) Jones v. Jones, 328.
See Frauds, Statute of, 9, 10.
Note.
Partnership, agency as a test of, 404, 406.
agent whose compensation is measured by profits is not a part-
ner, 405.
as to third persons, when created, 413.
between corporations, or between a corporation and an in-
dividual, 411.
between husband and wife, 411, 412.
between partnerships, 410.
community of interest as test of, 420.
consideration to support agreement to form a, 412.
corporations, persons assuming to act as, whether constitute a,
420.
corporations, promoters of, whether constitute a, 419.
creameries and cheese factories, persons furnishing milk to, 427.
creation of must be by contract, 406, 412.
cropping contracts which do not create, 438.
cultivating lands and sharing profits with landlord, 425.
de facto, liability of members of, 419.
definition of, 401-407.
I difiference between and a cotenancy, 407.
' difiference between and a joint stock company, 407.
estoppel, creation of by, 442.
failure of person to furnish his share of the capital does not pre-
vent his being a member of, 422.
for a single transaction, 408.
for an illegal purpose, is not sustainable, 409.
for purposes some of which are legal and others illegal, 401.
gross receipts, efifect of an agreement to share in, 436.
how may be created, 412.
Index. II45
Partnership, intent to create, when essential, 413-415.
intent to form, what amounts to, 414.
intent to form, when does not create, 415.
landlord and tenant, agreements between which do not create.
437.
liability of members of, stipulations limiting, 416.
losses, agreement to share, when implied, 433-435.
losses, effect of agreement limiting to some of the members,
435.
married woman, when may become a member of, 411.
merger of the individual into, 402.
organizations for religious or social purposes are not, 408.
participation* in profits and losses does not necessarily create,
402, 403.
persons who may form, 410.
pooling independent business and properties, 426-430.
profits, allowance of share of as a compensation for services,
439-441.
profits, allowance of share of as interest on loans and advances,
441.
profits, allowance of share of in repayment of capital advanced,
441.
profits, allowance of share of rent, 442.
profits and losses, necessity for participation in both, 431-435.
profits, community of interest in as an element of, 432.
profits, participation in is not a conclusive test of, 432.
profits, sharing of as a test of, 407.
properties of, 402.
purposes for which may be formed, 408.
right of control as an element of membership in, 420.
risks, community of, as a test of, 428.
sharing in crops, increase of livestock, etc., 437-439.
Bubpartners, status of with respect to the main partnership,
430.
tenants in common as, 407, 423.
tests to determine existence of, 403.
where one person furnishes the capital and another services or
skill, 424.
PARTY WAULS.
1. PAETY-WAIiLS — Charge on Land. — An agreement by an ad-
jacent lot owner to pay part of the cost of a party-wall when he
commences to use it creates a charge in the nature uf an equitable
lien upon his part of the lot on which the wall is erected, which is
enforceable in equity. (Ark.) Kugg v. Lemley, 17.
2. PABTY-WALLS — Covenant Eunning With Land. — An agree-
ment of an adjoining owner to pay for the use of a party-wall ia a
covenant running with the land, and the right to recover the sum
agreed upon passes to the grantee of the original builder under his
deed. (Ark.) Kugg v. Lemley, 17.
PAYMENT.
1. PAYMENT. — The Acceptance of a Check is in the nature of
a conditional payment, which becomes complete when the amount
due on it is actually paid. Such payment relates baek to the time
of the delivery of the check. (Wis.) Jacobson v. Bentzler, 1052.
1146 Index.
2. PAYMENT by Check, — The mere delivery and acceptance of
a check is not payment nor evidence of payment. (Kan.) Interstate
National Bank v. Ringo, 176.
3. PAYMENT. — Credits Made Upon Books of Account can have
no greater eflfect as evidence of payment than receipts given ac-
knowledging payment, and the latter, when exchanged for checks,
do not show that absolute payment was intended. (Kan.) Interstate
National Bank v. Bingo, 176.
PLEADING.
1. TRIAL. — ^Amendment of Petition After Trial may be per-
mitted and the case reopened for the trial of the issues tendered by
such amendment when necessary to a proper determination of the
case. (Neb.) Brown v. Brown, 568.
2. PRACTICE. — An Amendment may be Made to a Motion to Set
Aside a Judgment in which other grounds are added to the motion.
(Ga.) Albright-Pryor Co. v. Pacific Selling Co., 108,
3. PLEADING, Duplicity in. — If one who has contracted to erect
a building for another has two causes of action against the latter,
one for a definite sum of money due for work done, and the other
for preventing the plaintiff from going on and completing his con-
tract, and states both causes in a single count in his declaration, it
is bad for duplicity. (Md.) Milske v. Steiner Mantel Co., 364.
4. BILL OF PARTICULARS — Sufficiency. — A statement of par-
ticulars is sufficient if it fairly and plainly gives notice to the adverse
party of a cause of action or defense not sufficiently described in the
notice, declaration of other pleading. (Va.) Tidewater Quarry Co.
V. Scott, 864.
POLL TAX.
See Highways.
POOLROOM.
See Mandamus, 4.
PRETERMITTED CHILD.
See Wills, 9.
Note.
Priest and Parishioner, constructive trust against the one in favor of
the other, 795.
PRINCIPAL AND AGENT.
1. AGENCY — ^Undisclosed Principal — Setoff. — If an undisclosed
principal sues on a contract made by his agent in his own name with
some person who had no knowledge of the agency but supposed that
the agent dealt for himself, such suit is subject to any defense or
setoff acquired by a third person against the agent before he had
notice of the principal's rights, and this rule applies not only to the
sale of goods, but as well to other contracts where the agent is au-
thorized to collect money for his undisclosed principal. (Ark.)
Frazier v. Poindexter, 33.
Index. II47
2. AGENCY— Knowledge of Un;?.isclosed PrinclT)al— Setoff —Tf a
person who deals with an agent, acting iu his own name, knows, or
has reason to believe, that he is dealing with an agent, though he
does not know who the principal is, he cannot plead against such
principal a defense or setoff which he has against the agent (Ark )
Frazier v. Poindexter, 33. o v •/
3. AGENCY— Setoff.— If an agent accepts notes for collection
under an agreement that he will pay the money, when collected, over
a third person, he has no right to use it as a setoff on a deniaml due
him from his principal, disclosed or undisclosed. (Ark.) Frazier v
Poindexter, 33.
See Brokers.
Note.
Principal and Agent, constructive trust in favor of the former
against the latter, 795.
PROBATE COURTS.
See Courts, 3, 4.
PROCESS.
JURISDICTION, Necessity of Return Stipporting.— To au-
thorize judgment against a person who has not appeared or answered
or otherwise submitted himself to the jurisdiction of the court, there
must be not only service upon such defendant, but a legal return of
service. (Ga.) Albright-Pryor Co. v. Pacific Selling Co., 108.
RAILROADS.
1. RAHiROADS — Regulation of by State Commission, — ^The state
corporation commission, in the exercise of the police power of the
state, has power and authority to require two railroad companies to
make connection at a certain station at a certain time. (N. C.)
North Carolina Corp. Com. v. Atlantic Coast Line R. R. Co., 036.
2. RAILROADS — Duty to Dninken Trespasser. — Where the
yardmaster and foreman of the switch crew of one railroad com-
pany see a passenger of another railroad company aroused from a
drunken stujtor and put off a car on the depot platform at niglit,
and a few minutes later find him drunk and asleep between the
tracks in their switchyard, and thereupon arouse him and start
him walking through tLe network of tracks and switches toward
the highway, and a short time thereafter he lies down and gors to
sleep on one of the tracks, where he is struck by their switch en-
gine, the railroad company is answerable for his injuries. (Ky.)
Cincinnati etc. By. Co. v. Marrs, 28.
3. RAILROADS — Turntables. — A railroad company is not liable
for an injury inflicted on a trespassing infant of tender years by
an unlocked and uninclosed turntable on its priniises in an open and
unoccupied field some distance from the public higliway. (Va.)
Walker v. Potomac etc. R. K. Co., 871.
4. RAILROADS — Turntables. — The fact that an unfastened rail-
road turntable located on unoccupied laml belonging to the railroad
company is attractive to tresi.assiiig infants dues not render the com-
pany liable for injury to them wuile playing with such turntable,
1148 Index.
nor does the maxim "Sic ntere tuo ut alienum non laedas" apply in
such case. (Va.) "Walker v. Potomac etc, R. R. Co., 871.
5. TURNTABLE CASES.— Doctrine of turntable cases disap-
proved and rejected. (Va.) Walker v. Potomac etc. R. R. Co., 871.
See Carriers; Eminent Domain ; Master and Servant; Rewards; Street
Railways.
EECEIVEES.
1. RECEIVERS — Foreign Insurance Companies — Assets. — A re-
ceiver will not be appointed for a foreign insurance company when
it has no assets or property within the state, other than assessments
to become due against its policy-holders therein. (N. C.) Black-
well V. Mutual Reserve etc. Assn., 677.
2. INSURANCE — ^Receivers. — If a contract of insurance expressly
provides that a certain percentage of the assessments thereon shall
be set apart for the purpose therein set forth, the court cannot,
through a receiver, compel the payment of an assessment to be ap-
propriated to the payment of plaintiff's claim in violation of the
terms of the contract and the rights of policy-holders. (N. C.)
Blackwell v. Mutual Reserve etc. Assn., 677.
RECOGNIZANCE.
1. RECOQNIZANCE. — Oyer is Demandable of a record and recog-
nizance. (W. Va.) State v. Dorr, 915.
2. RECOGNIZANCE — How Entered into. — A recognizance is an
obligation entered into by the prisoner and his recognizors appearing
before the court or justice and acknowledging themselves to be in-
debted to the state in a certain sum, upon a certain condition, which
is entered and becomes a part of the record. (W. Va.) State v.
Dorr, 915.
3. RECOGNIZANCE — Manner of Taking Forfeiture. — A recog-
nizance conditioned that one accused of crime shall appear before
the circuit court on the first day of a specified term, and not depart
thence without leave of court, can be forfeited only by calling him
on the recognizance sometime during the term, and entering his de-
fault of record if he fails to appear. (W. Va.) State v. Dorr, 915.
4. RECOGNIZANCE — Time of Taking Forfeiture. — If the term
of court at which one accused of crime is recognized to appear ad-
journs without his default being entered, the recognizance cannot
thereafter be forfeited, and the recognizors are released from liabil-
ity. (W. Va.) State v. Dorr, 915.
RECORDS.
1. RECORDS — Effect of Omission to Record Instrument. — Since
the adoption of the system of public registry of conveyances, the
custom of prompt registration has been so nearly universal that omis-
sions may well be considered neglect of those precautions customarily
taken to assert a grantee's rights in the land, and people generally
have become accustomed to believe that all rights will so appear and
to act confidently on that assumption; hence such conduct is to be
expected by one holding an unrecorded conveyance. (Wis.) Marling
V. Nommensen, 1017.
Index. 1149
2. BECOBDS. — A Statute Declaring Void any Unrecorded Con-
veyance as against a subsequent purchaser whose conveyance shall
first be duly recorded does not exclude all other adverse efifect than
that which it denounces against one who neglects to place his convey-
ance on record. (Wis.) Marling v. Nommensen, 1017.
See Mortgages, 2-4.
REFORMATION OF INSTRUMENTS.
DEEDS — Reformation of for Fraud. — If a grantor agrees in
writing to convey certain lands free from encumbrances, and th*
grantee, after accepting the deed, discovers that there have been
fraudulently inserted therein certain restricting covenants in viola-
tion of the terms of the agreement for the deed, with a provision that
such covenants should be construed as running with the land, and
that upon a violation of either of them the premises should revert
to the grantor or his heirs, the grantee is entitled to have the deed
reformed by expunging such covenants from it, although they might
have been discovered by an examination of the deed before its
acceptance. (N. J. Eq.) Lloyd v. Hulick, 62-i.
RELEASE.
See Torts, 2.
REPLEVIN.
REPLEVIN for Property in Custody of the Law. — Replevin
can be sustained for property under levy under attachment, though
the writ issue in an action against a person other than the owner
of such property. (Md.) Baltimore etc. Ky. Co. v. Klaff & Co., 363.
RESCISSION.
See Contracts, IL
BES GESTAE.
See Evidence, 6, 7.
REVERSAL OF JUDGMENT.
See Judgments, 2.
REWARDS.
1. RAILROADS — Power to Offer Rewards. — A railroad company
has implied power to offer a genoral rtwjinl for the arrest and con-
viction of any person found mnlifiously placing obstructions upon ita
tracks, changing switches or doing any act for the purjKise of causing
derailments or the wreck of trains. (Ark.) Arkansas etc. Ky. Co.
V. Dickinson, 54.
2. RAILROADS — Power of General Manager to Offer Reward. —
The general manager of a raiIroa<l com|>Hriy has authority to offer
a general reward for the arrest and conviction of any person found
maliciously obstructing its tracks, (Ark.) Arkansas etc. By. Co. T.
Dickinson, 54.
1150 Index.
3. BAIXiHOADS — Offer of Reward by General Manager — Notice. —
Evidence that a person who offered a reward for the arrest and con-
viction of any person found maliciously obstructing the railroad
track had acted for three years as the general superintendent of a
railroad company, that notices offering such reward were posted at
every station of such company, and must have been seen by its presi-
dent, that such notices were furnished to such manager by the vice-
president of the company, and that the act of such manager in offer-
ing the reward was never repudiated by the company, is sufficient
to sustain a finding that the other officers of the railroad company
were cognizant of and ratified the act of offering such reward.
(Ark.) Arkansas etc. Ey. Co. v. Dickinson, 54.
4. REWARDS — Conviction as Evidence. — If a railroad company
offers a reward for the arrest and conviction of any person found
maliciously placing obstructions on its track, the record of the con-
viction of a person for such offense is admissible, and prima facie
evidence of his guilt in an action to recover the reward. (Ark.)
Arkansas etc. Ey. Co, v. Dickinson, 54,
SALES.
1. SALE OF PROPERTY F. O. B. Cars, Title to, When Does not
Pass to the Purchaser. — Under an agreement for the sale and pur-
chase of all the coal f. o. b. cars which the purchaser may require
during a specified year for the use of an illuminating company, mine
weights to govern all settlements, no title passes to the purchaser
until the coal is delivered on such cars, and he hence cannot recover
for the unlawful confiscation of the coal before it arrives at the
railroad tracks. Nor is this result affected by the sending of postal
cards by the seller to the purchaser announcing the shipment of the
coal, (Mich.) Detroit Southern E. R, Co. v. Malcomson, 390.
2. RESCISSION OF CONTRACT of Sale— Duty of Doing Equity.
One who seeks by a bill in equity to rescind a contract of sale for
fraud on the part of the purchaser must, as a condition precedent,
offer to repay the purchase price, (111.) Dunbar v. American Tele-
phone etc. Co., 132.
SCHOOL DISTRICT.
See Limitation of Actions, 8.
SEDUCTION.
1. SEDUCTION Under Promise of Marriage. — SuflBlciency of Evi-
dence.— In a criminal prosecution for seduction under promise of
marriage, it is not necessary to show that the defendant directly
and expressly promised the prosecutrix to marry her if she would
submit to his embraces, and it is sufficient if the jury, under the evi-
dence, can fairly infer that the seduction was accomplished by reason
of the promise, giving to the defendant the benefit of any reasonable
doubt. (N. C.) State v. Eing, 759.
2, SEDUCTION Under Promise of Marriage is Accomplished
when the prosecutrix trusted to the defendant's promise that he
would never forsake her and to his promise of marriage when she
yielded to his embraces to her ruin; the fact that the promise
to marry existed long before the seduction can make no difference
if he afterward took advantage of it to effect his purpose, (N. C.)
State V, Ring, 759.
Index. 1151
S. SEDUCTION, Averment of Plaintiffs Chastity, What Amounts
to. — If, in an action for the seduction of the plaintiff, the complaint
avers that she was seduced by the defendant, this is equivalent to
an averment of her previous chastity. (Mich.) Greenman v
O 'Riley, 406.
4. SEDUCTION, Promise, Deceit, Artifice, and Influence SvtSL-
cient to Sustain Action for. — If a man states to a girl seventeen
years of age that he likes her the best of any girl he ever knew,
that she will never be sorry and never regret it, and that she can
always live with him and be happy, he may be held liable for her
seduction under a statute creating liability for seduction under
such -'promise, artifice or influence as will overcome the scruples
of a chaste woman," (Mich.) Greenman v. O 'Riley, 406.
5. SEDUCTION— Chastity, Want of. Evidence of. When Admis-
sible^— Under the General Issue, the plaintiff's want of chastity is
admissible in actions of seduction without giving any notice of
intention to offer such evidence, and this remains true though
the trial court has adopted a rule declaring that an aflSrmative
defense must be clearly set forth in the notice added to the defend-
ant's plea. (Mich.) Greenman v. O 'Riley, 4G6.
6. SEDUCTION — Presumption of Chastity. — In an action for
seduction previous chastity is presumed. (Mich.) Greenman v.
O 'Riley, 466.
7. SEDUCTION, Woman Allowed to Maintain an Action for. —
Under a statute declaring that it shall not be necessary in an action
for seduction to allege or prove any loss of service in consequence
thereof, but if the female be a minor when seduced, action may be
by her father, mother, or guardian, and if of full age, the action
may be by the father or any other relative who shall be authorized
by her to bring the same, there is given a right of action whicii may
be enforced by her in her own name. (Mich.) Greenman v. O 'Riley,
466.
8. SEDUCTION, Necessity of Chastity to Support Action for. —
Under a statute giving to a woman the right to sue for her seduction,
it is fatal to the action that she was not a chaste woman at the
time of the alleged seduction. (Mich.) Greenman v. O'lJilev, 466.
9. SEDUCTION Is Correctly Defined to be the act of per-
suading or inducing a woman of previous chaste cliaracter to d( |)art
from the path of virtue by the use of any species of arts, porsua
sions, or wiles, which are calculated to have, and do have, that
effect, and resulting in her ultimately submitting her por!st)n to
sexual embraces of the person accused. (Mich.) Greenmun v.
O 'Riley, 4CG.
SELF-DEFENSE.
See Assault, 1; Homicide, 6.
SETOFF.
In General.
1. SETOFF. — Damages Eeadily ascertainable to by calcul.ntion or
computation may be set off against a liquidatid demand. (V'a.)
Tidewater (Quarry Co. v. Scott, 864.
2. SETOFF — What Constitutes. — It is not nocessary to constitute
a valid setoff, that a price should be agreed ujwn for an article sold
and delivered. (Va.) Tidewater (Quarry Co. t. Scott, 864.
1152 Index.
8. SETOFF — When Allowed. — If indebitatus assumpsit can be
maintained for the value of property converted, such value may be
allowed as a setoff. (Va.) Tidewater Quarry Co. v. Scott, 864.
4. SETOFF — ^Liquidated Demand. — In an action at law for a liqui-
dated demand, the defendant may set off the value of goods belong-
ing to him which the plaintiff has tortiously converted to his own
use. (Va.) Tidewater Quarry Co. v. Scott, 864.
Against Estate of Decedent.
5. SETOFF Against Estates of Deceased Persons. — Demands on
which causes of action arise subsequently to decedent's death are not
proper subjects of setoff against demands or causes of action arising
in decedent's lifetime. (Me.) Eich v. Hayes, 322.
6. SETOFF Against Estate of Decedents. — Claims against an es-
tate purchased after his death cannot be set off in an action against
the purchaser thereof for a debt due the decedent, nor even on a debt
created after the death of the decedent. (Me.) Rich v. Hayes, 322.
See Executors and Administrators, 19, 20.
SHELLEY'S CASE.
See Wills, 8.
SLANDEB.
See Libel and Slander.
Note.
Slander, liability of corporations for, 726, 727.
SPECIFIC PERFOEMANCE.
SPECIFIC PERFORMANCE— Injunction, Bill for, When
Equivalent to a Suit for. — A bill enjoining a telephone company from
charging a higher rate for its telephones than is specified in a con-
tract is equivalent to a bill for the specific performance of such con-
tract, and the suit must be determined by the application of the same
principles. (Md.) Maryland Telephone etc. Co. v. Simons Sons Co.,
346.
See Contracts, 2.
STATE.
See Limitation of Actions, 6-8.
STATUTE OF FRAUDS.
See Frauds, Statute of.
STATUTE OF LIMITATIONS.
See Limitation of Actions.
STATUTES,
Title and Subject of Act.
1. CONSTITUTIONAL LAW— Subject and Title of Statutes.— If
all the provisions of a statute fairly relate to the same subject, have a
Index. II53
natural connection with it, and are the incidents or means of ac-
complishing it, the subject is then single, and, if suflSciently expressed
in the title, the statute is valid. (Mo.) O'Connor v. St. Louis
Transit Co., 495.
2. CONSTITUTIONAL LAW— Subject and Title of SUtutes.—
A statute entitled, "An act to prevent frauds between attorneys,
clients, and defendants; making agreements between attorney and
client a lien upon the cause of action," and providing for an at-
torney's lien upon his client's cause of action, stating the nature
and character of the contract authorized to be entered into between
attorney and client and made the basis of the lien, providing for
notice and other incidents for making such lien effective, and that
defendant who ignores such notice and lien and settles with the
client without the attorney's consent shall be liable to such attorney
for his interest in the litigation according to the contract, contains
no provisions which do not clearly relate to the same subject, have a
natural connection with it, are the incidents or means of accomplish-
ing it, clearly germane to subject expressed in the title, and such
statute is constitutional and valid. (Mo.) O'Connor v. St. Louis
Transit Co., 495.
3. CONSTITUTIONAL LAW— Title of Statutes.— A statute can-
not be declared unconstitutional for the reason that it fails to clearly
express the subject by its title, unless it clearly violates that com-
mand of the constitution, and the mere generality of the title will
not vitiate the statute unless such title is of such nature as to com-
pel a conviction that it was designed to mislead as to the subject
dealt with. (Mo.) O'Connor v. St. Louis Transit Co., 495.
4. CONSTITUTIONAL LAW —Statutes, Title of, When Embraces
but One Subject. — The title, "An act to prohibit traffic in nontrans-
ferable signature tickets issued by common carriers, and to require
common carriers to redeem unused or partly used tickets, and to pro-
vide punishment for the violation of this act," does not embrace
more than one subject, nor cover incongruous legislation. (Tenn.)
Samuelson v. State, 805.
5. CONSTITUTIONAL LAW— Statutes, Title of, When Embraces
but One Subject. — In the title, "An act to prohibit the sale of tickets
issued by common carriers save through their authorized agents, and
require common carriers to redeem tickets issued by them when
wholly, or partly used," two subjects are not expressed, but rather
two branches, naturally and intimately allied, of the same subject.
(Tenn.) Samuelson v. State, 805.
Construction.
6. STATUTES — Construction. — Two cliaptcrs of the Revised
Statutes of a state relating to the same subj.ot, though liaving no
immediate connection with each other, shoul.! b<< const m.-d fogcthcr.
Hence one chapter of such statutes emimerating what aro to be
deemed intoxicating liquor must be construed in lonn.ction with the
words "intoxicating liquor" as used in another chapter of such itat-
utes. (Me.) State v. Frederick.son, 295,
7. CONSTITUTIONAL LAW — Statute, Construction of.— If. in
an act to i)rohibit the sale of tirkcts of common carriers .xropt by
their authorized agents, one of the soctions uponkH of a ticket or
other evidence of the passengi-r's right to travel, it in evident that
this latter phrase is used simply as the equivalent of ticket. (Tenn.)
Samuelson v. State, 805.
Am. St. Rep., Vol. 115—73
1154 Index.
8. STATUTE, Construction of. — The grammatical sense of the
words employed in a statute is usually to be adopted, but if there
is ambiguity, or room for more than one interpretation, the rules of
grammar may be disregarded, if strict adherence to them will give
rise to a repugnance or absurdity or defeat the purpose of the legis-
lature. (Tenn.) Samuelson v. State, 805.
9. STATUTE, Construction in Favor of Constitutionality of. —
If a statute admits of two constructions under one of which it must
be pronounced unconstitutional and void, and the other constitutional
and valid, the latter will be adopted. (Tenn.) Samuelson v. State,
805.
Implied "Repeal.
10. STATUTES. — Implied Repeals of Statutes are never favored
Every rule of construction is to be applied without efficiently har-
monizing provisions seemingly in conflict, before holding that there
is any irreconcilable inconsistency between them. (Wis.) Hay v.
City of Baraboo, 977.
STREET RAILWAYS.
1. STREET RAILWAYS — Public Service Corporations — Duties. —
An electric street railway company is a public service corporation,
and as such it has duties both of a public and private nature. It
must perform its public duties, but in the performance of its duties
not of a public nature which are incidental to those of a public char-
acter, it stands upon the footing of a private corporation, and with
respect to the duties of the first class, in doing that which under the
law it is required to do, it cannot be considered as doing an unlaw-
ful act, and if a lawful act is done without negligence, any injury
which it occasions is damnum absque injuria. (Va.) Townsend v.
Norfolk Eailway etc. Co., 842.
2. STREET RAILWAYS — Site for Power-house. — While an elec-
tric street railway cannot be operated without a power-house, yet
the selection of a site therefor, and the generation of power, are
mere incidents to the operation of the road and mere private busi-
ness with which the public has no concern, and in such business the
company stands on the same footing as a mere individual, with no
special privileges. (Va.) Townsend v. Norfolk Railway etc. Co.,
842.
8. STREET RAILWAYS — Location of Power-house— Nuisance. —
A grant of power to an electric street-car company to construct and
operate its road in a city gives no authority to locate its power-
house where it will be a nuisance, nor to so locate it as, by its use,
to unreasonably interfere with and disturb the peaceable and com-
fortable enjoyment of others in their property; and if injury is in-
flicted upon others by such location and operation of a power-house,
the company must respond in damages. (Va.) Townsend v. Norfolk
Railway etc. Co., 842.
Note.
Streets, public, constitutionality of statute imposing liability on prop-
erty owners, 994, 995.
public, defects, liability of person creating, 994.
public, excavations in, liability of property owner for, 994.
public, notice to abutting owner to make repairs, 996.
public, property owner is liable for defects caused by himself,
994.
public, property owner is not liable at common law to repair,
993.
Index. II55
streets, public, statutes imposing duty to keep in repair do not make
property owner personally liable for injuries. 995.
public, statutes imposing liability on property owners, interpre-
tation and effect of, 995.
public, trap-doors, manholes, etc., liability for injuries due to.
994. '
SUCCESSION.
See Descent and Distribution.
SUICIDE.
SUICIDE — Attempt to Commit. — In the absence of an express
statute an attempt to commit suicide is not an indictable offense.
(Me.) May v. Pennell, 334.
SUNDAY CONTRACTS.
1. SUNDAY CONTRACT — Subsequent Completion of Transaction.
Where an agreement for the loan of money is made on Sunday, in-
cluding the signing of the contract, and the delivery of a check for
the amount of the loan, the transaction is not relieved from the con-
demnation of the Sunday law by the fact that the check is not paid
and the contract not acknowledged nor recorded until a later day.
(Wis.) Jacobson v. Bentzler, 1052.
2. SUNDAY CONTRACT— Loan of Money— Ratification.— The
loaning of money is within the meaning of a statute prohibiting the
doing of business on the first day of the week, and a contract there-
for is void and not susceptible of ratification. (Wis.) Jacobson t.
Bentzler, 1052.
3. SUNDAY CONTRACT — Manner of Reaching Invalidity. — In
an action to enforce a loan made on Sunday, the fact that the de-
fendant in his answer did not assert the invalidity of the contract
does not preclude him from insisting that the agreement cannot be
enforced. (Wis.) Jacobson v. Bentzler, 10r)2.
4. SUNDAY CONTRACT. — ^Upon the Grounds of Public Policy,
all the parties to a Sunday contract are deemed equally guilty, and
are denied the usual remedies of the law for its enforcement.
(Wis.) Jacobson v. Bentzler, 1052.
Note.
Surety, creditor does not owe the duty to, to exercise active vigi-
lance, 86.
creditor, failure of to present claim against estate of deceased
debtor, «6.
creditor, failure of to present claim against estate of the debtor
in bankruptcy, 88.
creditor, failure of to sue administrator of deceased debtor,
86, 87.
creditor is not bound to sue on the principal debt, 85.
creditor need not sue insolvent debtor, {K\.
creditor, notice or request to, to suo (lcl)tor, form of, 94.
creditor, request that he sue debtor, eff. ct of, 89, 90.
forbearance of creditor to sue debtor. 88 93.
notice of default of debtor is not iieeeHHiiry to liability of, Si.
passive conduct of creditor does not rtleuac, 80.
1156 Index.
Surety, release of by creditor's failure to apply funds of debtor in
bis possession, 96.
release of by creditor's failure to exercise care and diligence
respecting collateral securities, 100.
release of by creditor's lien becoming lost by operation of
law, 101, 102.
release of by creditor's losing a lien by negligence, 101.
release of by creditor's making payments to debtor which
he could have withheld, 95.
release of by creditor's refusal to sue debtor, 93.
release of by creditor's surrendering securities, 95.
release of where creditor is a bank, by its failure to apply de-
posits, 98, 99.
right of action of against the principal, when accrues, 87.
suit by to compel creditor to sue debtor, 89.
TAXATION.
1. CONSTITUTIONAL LAW— Working Roads— Double Taxation.
A statute providing for the working on public highways or roads by
labor is not unconstitutional as double taxation. (N. C.) State v.
Wheeler, 700.
2. CONSTITUTIONAL LAW — Double Taxation. — ^No constitu-
tional prohibition exists against double taxation. (N. C.) State v.
Wheeler, 700.
8. CONSTITUTIONAL LAW — Taxation. — The fourteenth amend-
ment to the constitution of the United States does not require equal-
ity in levying taxation by a state; that matter is governed entirely
by the provisions of the state constitution. (N. C.) State v.
Wheeler, 700.
4. TAXATION. — Time is not Money nor is labor property in the
sense that they can be liable for a property tax. (N. C.) State v.
Wheeler, 700.
See Highways.
TELEPHONES.
1. TELEPHONES — Construction of Contract and Ordinance for
the Furnishing of. — A contract and a municipal ordinance for the
supplying of telephones means such as will furnish the most effective
service then in use. (Md.) Maryland Telephone etc. Co. v. Simon
Sons Co., 346.
2. AN INJUNCTION Should be Denied When Its Enforcement
will Eender a Service Corporation Insolvent and unable to proceed
with its business. Therefore, a bill against a telephone corporation
to compel it to furnish telephones and telephonic service at the rate
specified in a contract and in a municipal ordinance should be dis-
missed and the complainants left to their remedy at law, if it is not
possible to furnish the service at the rate specified and to do so will
make the company insolvent and unable to perform its obligation to
the public. (Md.) Maryland Telephone etc. Co. v. Simon Sons Co.,
346.
TENANCY IN COMMON.
Action for Possession.
1. COTENANCY — Action to Recover Possession. — A cotenant or
joint owner of personal property cannot maintain an action against
Index. II57
the other tenant or owner to recover the exclusive possession thereof,
except when the property is destroyed, carried beyond the limits of
the state, or when, being of a perishable nature, such disposition of
it is to be made as to prevent the other from recovering it, and it
is not sufficient that defendant forcibly took the property from his
cotenant's possession, (N. C.) Thompson v. Silverthorne, 727.
Ouster and Adverse Possession.
2. COTENANCY— Adverse Possession.— Tenants in common hold
their estates by several and distinct titles, but by unity of posses-
sion, and an entry by one inures to the benefit of all, "not oniv as
concerns themselves, but also as to strangers. (N. C.) Dobbins v.
Dobbins, 682.
3. COTENANCY— Ouster— Adverse Possession.— There may be
an entry or possession of one cotenant amounting to an actual ouster
so as to enable his cotenant to bring ejectment against him, but it
must be by some clear, positive and unequivocal act equivalent to
an open denial of his right and the putting him out of the seisin,
and such an actual ouster followed by possession for the requisite
time will bar the cotenant's entry. (N. C.) Dobbins v. Dobbins, 682.
4. COTENANCY. — Ouster is a disseisin by one cotenant of his
cotenant, the taking of possession by one and holding it against
the other by an act or series of acts which indicate a decisive in-
tent and purpose to occupy the premises exclusively and in denial
of the rights of all others. (N. C.) Dobbins v. Dobbins, 682.
5. COTENANCY — Ouster — Adverse Possession. — An exclusive,
quiet, and peaceable possession by a tenant in common and those
under whom he claims for more than twenty years raises a legal
presumption of an actual ouster of the other cotenant 's possession,
not at th* end of the period, but at its beginning, and that the
subsequent possession was adverse to the cotenants who wrrc out
of possession, which defeats their right to partition or to bring an
action in ejectment. (N. C.) Dobbins v. Dobbins, 682.
6. COTENANCY — Ouster — Adverse Possession.— Disability of a
Cotenant during the period of more than twenty years, when the
possession is quietly and exclusively held by his cotenant, and those
under whom he claims, cannot be permitted to rebut the prtsump-
tion of law as to an ouster of the former, when the posstssion com-
menced in the lifetime of their ancestor from whom they claim,
and who was at the time under no disability. (N. C.) Dobbins ▼.
Dobbins, 682.
See Partition.
TITLE OF STATUTE.
See Statutes.
TORTS.
1. TORTS — Unintentional Injury. — No one \n liable, civilly or
criminally, for an unintentional ronsoijumt ial injury which nmiit*
from a lawful act, where neither negligence nor folly can he imputed
to him; and the bunlen of proving negligence or folly, where the act
is lawful, is always ujwn the plaintiff. In other words, the foun<la-
tion of the defendant's liability in all such cases is negligence, or the
failure on his part to exercise that degree of care to avoid making m
1158 Index.
mistake which an ordinarily prudent man would exercise under the
same or similar circumstances. (Ky.) Crabtree v. Dawson, 243.
2. TORT — ^Release of One of Two Wrongdoers. — If A. lets his
horse to B, who is a livery-stable keeper, and B hires the animal to
C, whose alleged negligence causes its death, whereupon A demands
a settlement from both B and C, and B., acknowledging his liabil-
ity, pays A the value of the horse and takes an assignment of A's
supposed cause of action against C , B cannot maintain an action
against C for the tort, since A, having been paid and satisfied by B.
has no cause of action which he himself could assert against C, and
therefore his assignee can have none. (Mont.) Tanner v. Bowen,
529.
TRESPASSERS.
See Negligence, 3, 4; Railroads, 2.
TRIAL.
Beading Law BooTcs to Xury.
1. TRIAL^Reading Law Books to Jury. — The practice of coun-
sel to request and of trial judges to read to juries passages from
opinions is unwise, and usually improper if it goes beyond a mere
statement of a rule of law. (Wis.) Bowe v. Gage, 1010.
Instructions.
2. TRIAL — ^Instructions. — ^A party desiring more definite instruc-
tions must make a special request for them. (N. C.) Ives v. At-
lantic etc. E. E. Co. 732.
3. TRIAL — Construction of Instructions. — A charge to the jury
that if they find that the accused or any other witness has willfully
and corruptly testified falsely to any fact material to the issue, they
have the right to entirely disregard his testimony, except in so far
as it is corroborated by other evidence of facts and circumstanced
in evidence, is not susceptible of the construction that the jury may
disregard the testimony of the defendant if some other witness has
testified falsely. (III.) Aldrich v. People, 166.
4. TRIAL — Instructions. — -An excerpt from a charge to the jury
must be construed with the context and in connection with the whole
charge. (N. C.) State v. Lilliston, 705.
Beopening Cause.
5. PRACTICE. — Whether a Court Will Reopen a Cause for the
introduction of further evidence after both parties have announced
the evidence closed, and while the motion for the direction of the
verdict is being argued, rests in the discretion of the court. (Ga.)
Bridger v. Exchange Bank, 118.
6. PRACTICE — Partial Reopening of a Cause. — The Court may
Permit the Reopening of a Cause to allow evidence to^ be offered on
a particular point without being compelled to reopen it for the gen-
eral introduction of evidence. (Ga.) Bridger v. Exchange Bank,
118.
TROVER AND CONVERSION.
1. TROVER AND CONVERSION— Second Mortgage of Chattels.
If a person first gives a mortgage on chattels to one who does not re-
«ord it, and then gives another mortgage on the same chattels to a
Index. II59
person who records it, the giving 6f the second mortgage is an illegal
and unauthorized exercise of dominion over the chattel, inconsisttnt
with, and detrimental to, the rights of the first mortgagee and con-
stitutes a conversion of such chattels by the mortgagor without any
manual transfer of the property. (Me.) Ivers & Pond Piano Co. v.
Allen, 307.
2. CONVERSION — Remedies. — An owner may maintain an action
of tort to recover damages for the conversion of his property, or he
may treat the conversion as a sale and bring indebitatus asouuipsit
for its value. (Va.) Tidewater Quarry Co. v. Scott, 864,
See Executors and Administrators, 12, 13.
TRUSTS.
Creation of Tnist.
1. TRUST IN PAROL. — A valid express trust involving real es-
tate, enforceable in equity, can be created by parol. (Ttnn.) In-
surance Co. of Tennessee v. Waller, 763.
2. TRUST, When Created. — If a conveyance is executed, accom-
panied by a parol agreement that the grantee will hold the prop-
erty for the use of the grantor and convey the title as he may di-
rect, no consideration being paid for the conveyance to him, a valid
parol trust is thereby created in favor of the grantor, enforceable
in equity, though his object in making the conveyance and executing
the agreement was to hinder, delay and defraud his creditors.
(Tenn.) Insurance Co. of Tennessee v. "Waller, 763.
3. TRUST, When not Created. — The legal owner of property is
prima facie entitled to its beneficial enjoyment, and to convert him
into a trustee, there must be a sufficient indication of the inten-
tion of the parties that he is to hold for the benefit of others.
(Md.) Doan v. Ascension Parish, 379.
4. A TRUST cannot Exist when the same person possesses both
the legal title and the right to the beneficial enjoyment. (Md.)
Doan v. Ascension Parish, 379.
5. TRUST, When not Created by Devise to the Vestry of a Church.
A devise to the vestry of Ascension Church to be used fi)r such
church purposes as the rector of the church may direct, accompanied
by a statement that it is the purpose and desire of the testator that
the property shall be under the control of the rector of the churcb
and be used for such work as he may deem best for the intrrest
of the church, does not create a trust, for the reason that the devise
gives both the legal title and the beneficial interest in the property
to the vestry of the church, to be used for its coriKirate puriK»»e».
The power given to the rector is a naked collateral power, repujjnant
to the fees devested to the vestry, and therefore void. (Md.) Doan
V. Ascension Pariah, 379.
Note.
Trusts, confidential relations as tending _to create, 791.
constructive and simple compared, 776.
constructive defined, 775.
constructive dei)end8 on an express ngreemont^ "."i.
constructive, evidence sufficient to oMt.-ililisli. 7S7. . » -
constructive, fraud on account of which will be declared, <87,
788.
constructive, grounds for declaring, 780.
1160 Index.
Trnsts, constructive in favor of brother against sister or vice versa,
794.
constructive in favor of client against attorney, 795.
constructive in favor of one cotenant against another, 796.
constructive in favor of debtor against creditor or vice versa,
796, 797.
constructive in favor of husband against wife or vice versa,
792.
constructive in favor of one partner against another, 795.
constructive in favor of parent against child or vice versa,
793.
constructive in favor of parishioner against priest, 795.
constructive in favor of principal against agent, 795.
constructive in favor of ward against guardian, 795.
constructive, miscellaneous relations giving rise to, 797, 798.
constructive, nature and kinds of, 786.
constructive need not be in writing, 786.
constructive, oral promise, breach of which will not support a,
789.
constructive, purchaser of land at public auction, when holds
subject to, 789.
constructive, transfer of land essential to, 787.
created contemporaneously with the transfer of land, 784, 785.
execution sale, purchaser of land at, when holds subject to, 789,
790.
exempted from requirement that creation of be by writing, 775.
express in land, defined, 774.
express in land, statutes requiring creation of to be by writing,
774, 775.
fraud, constructive, to create, 791.
in favor of a husband or wife against the other, 792.
oral, cannot be proved, 778, 779.
oral, consideration to support, 785.
oral, conveyance executed in pursuance of becomes unimpeach-
able, 783.
oral, creation of independently of transfer of land, 786.
oral, effect of possession under, 782.
oral, evidence to change absolute deed into a, 778, 779.
oral, evidence to establish, 785.
oral, executed are valid, 783.
oral procured by promise made with intention not to perform,
791.
oral, states recognizing, 785, 786.
oral, the parties may respect, 783.
oral, to sell lands and account for the proceeds, 780.
part performance, acts of sufficient to require enforcement of,
782.
promises made with intention not to perform, 790.
resulting defined, 775.
statute of frauds respecting creation of creates a rule of evi-
dence only, 777.
writing, absence of, whether makes void, 777, 778.
writing, language of statutes requiring for creation of, 777.
writing, states not requiring creation of by, 784.
writing to create, depositions may constitute, 781.
writing to create, may consist of several writings, 781,
writing to create, need not be contemporaneous, 780.
writing to create, pleadings may constitute, 781.
writing, when essential to creation of, 776.
Index. 1151
Married Woman as Trustee.
6. TEUSTEE, Married Woman, as.— By the common law, a mar-
ried woman had the capacity to take and hold lands as triistre and
to execute the powers and duties of the trust, including that of con-
veying the trust property by deed without the concurrence and
joinder of her husband. (Tenn.) Insurance Co. of Tennessee v.
Waller, 763.
7. TRUST. — A Married Woman may be a Trustee for Her Hus-
band and may execute the trust by conveying the property to him
by a conveyance in which he does not join. (Tenn.) Insurance Co.
of Tennessee v. Waller, 763.
Purchase by Trustee.
8. TRUSTEES — Purchase by.— Although, as a general rule, a
trustee cannot buy from the beneficiary, yet an exception exists when
there is a distinct and clear contract executed after a jealous and
scrupulous examination of all the circumstances and proof that the
beneficiary intended the trustee to buy, and there is a fair considera-
tion, no fraud, no concealment, and no advantage taken by the trustee
of information acquired by him in his character as such. (Ark.)
Eeeder v. Meredith, 22.
9. TRUSTEES — Purchase by — Burden of Proof. — A trustee who
purchases property from his beneficiary has the burden of proof to
show the utmost good faith in the transaction. (Ark.) Reeder v.
Meredith, 22.
VENDOR AND VENDEE.
VENDOR ANTD PURCHASER, Trust Against the Latter in
Favor of the Former. — If one in the possession of real property con-
tracts to sell to another all the timber he may remove therefrom
before a date specified, and he enters under such contract an<l com-
mences cutting the timber, he stands in the position of a vendeo of
land, and cannot disavow the vendor's title nor acquire title in hos
tility thereto, and if he purchases a paramount outstanding title, he
acquires it in trust for his vendor, and will be compelled to convi-y
it on the payment of the amount expended in its acquisition. (Mich.)
Petroski v. Minzgohr, 450.
See Injunction.
WATERS AND WATERCOURSES.
1. WATERS — Riparian Rights. — An owner of land \n entitled to
have the water enter and leave his premises in the natural and ordin-
ary way and at all times. This rule applies to high as well as to low
water. (Mich.) Allen v. Thornapple Klectric Company. 4r>.1.
2. WATERS — Dams Backing up on Lands of Riparian Proprietor
in Times of Freshets. — A lower riparian proprietor has no ri^hf to
maintain a dam which will bark water upon the upper riparian pro-
prietor's lands in time of fnshets or prevent its flowing thm-from
to his injurv. though at ordinarv stages of water surh dam will not
occasion any injury. (Mich.) Allen v. Thornapi-lo Klorfnc Co.. 1.V1.
3. WATERS, Dams, Remedy for Maintenance of to the Injury of
the Upper Proprietor.— If a d.im has l-.m maintain. •.! in a wtr.-am to
the injurv of an upper riparian i.ropri.tor in times of fr.'shet. h.- in
entitled to a ju.lgment reducing the height of the dam »o that it will
1162 Index,
not inflict such an injury and awarding him compensation for the
damages previously suflfered. (Mich.) Allen v. Thornapple Electric
Co., 453.
WEAPONS.
CONSTITUTIONAL LAW— Eight to Bear Arms.— A constitu-
tional provision that people have the right to bear arms for their
defense and security applies only to the right to bear arms as a
member of the state militia, or some other military organization
provided by law, and does not prevent the enactment of a valid law
prohibiting and punishing the carrying of arms or deadly weapons
by private individuals. (Kan.) City of Salina v. Blaksley, 196.
WILLS.
In General.
1. CORPOEATIONS, Devises to. — The Misnomer of a Corporation
will not defeat a devise or bequest to it if its identity is otherwise
sufficiently established. (Md.) Doan v. Ascension Parish, 379.
2. WILL — Extrinsic Evidence to Vary Trust. — Where a testator
has directed the share of his son to be paid to a trustee, to be used
for the benefit of the son, but not to be paid into his hands, extrinsic
evidence is not admissible to show that the testator's reason for
creating the trust was the incapacity of the son because of disease,
that since the death of the testator the son has so far recovered his
health as to be able to manage his estate, and that therefore its
possession and control should be given to him. (Ky.) Carpenter v.
Carpenter's Trustee, 275.
3. WILLS, Property Given to Heirs by. When Deemed to be
Personal Property. — A devise of real property to be converted into
money and the money to be distributed among the devisees is to be
treated as a devise of money and not as of land, though the devisees
may, by their unanimous concurrence, elect to take land instead of
money. (111.) Darst v. Swearingen, 152.
4. WILLS, Property Given to Heirs When Deemed to be Vested
in Them by Descent — A devise giving the devisee precisely the
same estate and interest in the property as he would have taken
by descent is void, for the reason that title by descent is regarded
as worthier and better than title by purchase. (111.) Darst v. Swear-
ingen, 152.
5. WILLS — ^Devise to Heirs, When Does not Vest in Them by
Descent. — If a devise is made by the testator's heirs and there is a
difference in kind or quality of the estate or property to be passed
under the devise from that which would descend to them by the
statute, they must be held to take by devise and not by descent.
(111.) Darst V. Swearingen, 152.
6. WILLS — Bights of Devisee — Subsequent Encumbrance. — A dev-
isee of real estate, encumbered by the testator subsequently to the
execution of the will, has a right to have the encumbrance discharged
out of the personal estate of the testator, where the will directs the
payment of all of his debts from any ready money or other personal
property that he may have at the time of his death. (Va.) French
V. Vradenburg, 838.
7. DEVISE to Two and Their Heirs, Construction of. — If prop-
erty is devised to two nieces of the testator, to have the use and
Index. 1163
benefit of property, half to each for and during tteir natural lives,
and then to their respective heirs, to have their own half, and if
either of the heirs dies without children, her share to go to the
survivor or the surviving children, the children of neither has any
vested interest in the property. If one should die without children,
her share will go to the surviving niece. If the other should die leaving
children, her interest will go to her children. If one should die
without children after the death of the other who had died leaving
children, the share of the one dying without children would go to the
surviving children of the other. (Tenn.) Rutherford v. Rutherford,
799.
8. WILLS — Devises — Rule in Shelley's Case. — If a testator de-
vises to his devisee "the use, benefit and profit" of his land during
her natural life and to the lawful heirs of her body after her death,
this is sufficient to pass an estate in the land, and the rule of "Shel-
ley's Case" applies. (N. C.) Perry v. Hackney, 741.
Pretermitted Child.
9. WILLS — Omitted Child — Evidence — Burden of Proof. — Under
a statute providing that "when any testator shall omit to provide
in his will for any of his children, or for the issue of any deceased
child, and it shall appear that such omission was not intentional,
but was made by mistake or accident, such child, or the issue of such
child, shall have the same share in the estate of the testator as if
he had died intestate," parol evidence is admissible to show whether
such omission was unintentional, and the burden is on the preter-
mitted child to establish such fact. (Neb.) Brown v. Brown, 568.
Probate and Contests.
10. WILLS, PROBATE OF — Conclusiveness as to Mental Capac-
ity.— The decree of the proper court admitting a will to probate is
conclusive on all parties as to its due execution and as to all ques-
tions affecting the competency of the testator to make a will. (Neb.)
Brown v. Brown, 568.
11. WILL CONTEST — Attorneys' Fees. — Under the statute of
Wisconsin providing that "any court of record, in contests arising
therein, upon application for the probate of any will, in its discre-
tion, may allow to the contestant, if successful in the circuit court;
a reasonable attorney's fee out of said estate for services in such,
contest in said circuit court," the first court mentioned refers to the
one having primary jurisdiction of the probate of wills — the county
court — as having authority to allow attorney fees. (Wis.) In re
Gertsen's Will, 1060.
Foreign Wills.
12. FOREIGN WILL. — When a Will has Been Regularly Probated
in the state of the domicile of the testator by a court of competent
jurisdiction, a court of another state wherein the deceased left prop-
erty cannot refuse the will probate, because some of the essentials
of a valid original probate in the latter state are wanting, if the
statutes of that state declare that "the will shall have the same force
and effect as if it had been originally proved and allowed in the
same court." (Wis.) In re Gertsen's Will, 1060.
13. FOREIGN WILL — Contest of Application to Probate.— While
the statutes of Montana do not in express toriiia providi- for tho con-
test of an application tb the courts of that state for the probate of
a foreign will, they do so impliedly, for section 2351 of the Code of
1164 Index.
Civil Procedure, whicli has to do with the subject, provides for
a hearing of such application and for notice thereof. (Mont.) State
V. District Court, 510.
14. FOREIGN WHiIi — Contest of Application to Probate. — While
no particular grounds of contesting an application for the probate
of a foreign will are expressly designated by the Montana statutes,
section 2352 of the Code of Civil Procedure does enumerate the
findings which the trial court must make before admitting such will
to probate, and these may be accepted as questions with respect
to which issues may be raised, and therefore the grounds for such
contest. (Mont.) State v. District Court, 510,
15. PROBATE OF WILL. — A Judgment in a Probate Proceeding
is a judgment in rem; that is, it determines the status of the sub-
ject matter. Therefore, the judgment of a court admitting a will
to probate fixes the status of the instrument as a will, and becomes
at once conclusive upon the world of all the facts necessary to the
establishment of a will, among which are, that at the time the
will was executed the testator was of sound and disposing mind, and
was not acting under duress, fraud, or undue influence. (Mont.)
State V. District Court, 510.
16. FOREIGN WILL.— To Entitle a Foreign Will to Probate
here, it must appear that it was duly proved, allowed and admitted
to probate in the court of the sister state; that it was executed ac-
cording to the law of the place in which it was made or in which
the testator was at the time domiciled, or in conformity to the laws
of this state; and that the record Is authenticated as required by
section 905 of the United States Eevised Statutes. (Mont.) State
V. District Court, 510.
17. FOREIGN WILL — Conclusiveness of Probate. — A will executed
in California by a testator there residing, and subsequently ad-
mitted to probate in that state, may not, when afterward admitted
to ancillary probate in Montana, where the testator left real and
personal property, be contested on the ground that the testator
was not of sound and disposing mind, or acted under duress, fraud,
or undue influence, the Montana statutes providing that when such
foreign will is admitted to probate in this state it shall "have
the same force and eifect as a will first admitted to probate in thia
state." (Mont.) State 'v. District Court, 510.
Note.
Wills, contest of by pretermitted child, 580, 581.
foreign, conclusiveness of probate of, 518-522.
foreign, grounds of resisting probate of, 520.
foreign, probate of may be made conclusive, 519.
foreign, probate of, statutes construed as making conclusive,
519, 520.
foreign, validity of when not executed in conformity to the
laws of the state, 520, 521.
posthumous child, effect of upon, 586,
posthumous child, omission of from will, when deemed inten-
tional, 586, 587.
posthumous child, omission of from will, when deemed unin-
tentional. 586,
posthumous child, title and right of, at what time accrues, 587.
pretermitted adopted child, effect of will upon, 587.
pretermitted child born after the making of the will, but in the
testator's lifetime, 585.
Index. 1165
Wills, pretermitted child born after the making of the will, remedies
of, 581.
pretermitted child, burden of proof as to whether omission of
from will was intentional, 590.
pretermitted child, contest of the will by, 580, 581.
pretermitted child, contribution which may enforce, 581.
pretermitted child, declarations of testator to show whether
omission of was intentional, 589.
pretermitted child, ejectment by, 581.
pretermitted child, evidence, parol, whether admissible to show
whether omission of was intentional, 589.
pretermitted child, evidence to show whether omission of was
intentional, states restricting it to the will, 589, 590.
pretermitted child, intention to omit, when inferable, 582.
pretermitted child, omitted from will owing to mistake as to
legal matters outside of the will, 583.
pretermitted child, presumption of intention to omit, evidence
to rebut, 590.
pretermitted child, presumption that omission of from will was
intentional, 590.
pretermitted child, provision for in will, what deemed to be a,
585, 586.
pretermitted child, references in will which do not overcome
presumption that omission was unintentional, 582, 583.
pretermitted child, references in will which show omission to
have been intentional, 584.
pretermitted child takes title by descent, 581.
pretermitted child, when estopped by the probate of the will,
580.
pretermitted children, intent of statute respecting, 580.
pretermitted children, object of statute respecting, 580.
pretermitted children, rights and remedies of, 580, 581.
pretermitted children, when not affected by a will, 580.
pretermitted children, who were in the mind of testator, 580.
pretermitted grandchild, intention to omit, when inferable from
the will, 583.
pretermittod issue of deceased child, 584.
probate of does not establish their validity in another state,
519.
probate of in one country as to real property is not conclusive
in another, 518, 519.
probate of in one country, when conclusive in another, 518.
WITNESSES.
WITNESSES — Credibility of Question for Jury. — If there is
a disputed fact depending for its proof upon the testimony of wit-
nesses, the credibility of the witnesses is always an open question
for the jury, and this is so though the testimony may be all one side
and all tend one way, and in this event the judge may charge the
jury if they find the facts to be as testified by the witnesses, to
answer the issue in a certain way, but not, upon the evidence, so
to answer it, as by such charge he passes upon the credibility of
the witnesses. (N. C.) Dobbins v. Dobbins, 682.
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