This volume was donated to LLMC
to enrich its on-line offerings and
for purposes of long-term préservation by
Northwestern University School of Law
National Reporter System. United States Séries.
THE
FEDERAL REPORTER.
VOLUME 129
CASES ARGUED AND UETERMINED
IN THE
CIRCUIT COURTS OF APPEALS AND CIRCUIT
AND DISTRICT COURTS OF THE
UNITED STATES.
PERMANENT EDITION,
JUKE— JULY, 1904.
ST. PAUL:
WEST PUBLISHING CO.
1904.
COPYEIGHT, 1904>
BT
WEST PUBLISHING COMPANY.
FEDERAL REPORTER, VOLUME 129.
JUDGES
OF THE
UNITED STATES CIRCUIT COURTS OF APPEALS AND THE
CIRCUIT AND DISTRICT COURTS.
FIRST CIRCUIT.
Hon. OLIVER WENDELL HOLKBS, Circuit Justice Washington, D. C.
Hon. LE BARON B. COLT, Circuit Judge Bristol, R. 1.
Hon. WILLIAM L. PUTNAM, Circuit Judge ...Portland, M8.
Hon. CLARENCE HALB, District Judge, Maine Portland, Me.
Hon. EDGAR ALDRICH, District Judge, New Hampsliire Llttletcn, N. H.
Hon. FRANCIS C. LOWELL, District Judge, Massacliusetts Boston, Mass.
Hon. ARTHUR L. BROWN, District Judge, Rliode Island Providence, R. I.
SECOND CIRCUIT.
Hon. RUPUS W. PECKHAM, Circuit Justice Washington, D. C.
Hon. WILLIAM J. WALLACE, Circuit Judge Aibany, N. Y.
Hon. B. HENRY LACOMBB, Circuit Judge New York, N. Y.
Hon. WILLIAM K. TOWNSEND, Circuit Judga New Haven, Conn.
Hon. ALFRED C. COXE, Circuit Judge Utica, N. Y.
Hon. GEORGE C. HOLT, District Judge, S. D. New Yorli New York,' N. Y.
Hon. JAMES P. PLATT, District Judge, Connecticut Harttord, Conn.
Hon. GEORGE W. RAY, District Judge, N. D. New York Norwlch, N. Y.
Hon. GEORGE B. ADAMS, District Judge, S. D. New York New York, N. Y.
Hon. EDWARD B. THOMAS, District Judge, E. D. New York.... 29 Liberty St.. New York.
Hon. HOYT H. WHEELER. District Judge, Vermont Brattleboro, Vt.
HOB. JOHN R. HAZEL, District Judge, W. D. New York Buffalo, N. T.
THIRD CIRCUIT.
Hon. HENRY B. BROWN, Circuit Justice Washington, D, a
Hon. MARCUS W. ACHESON, Circuit Judge Pittsburgh, Pa.
Hon. GEORGE M. DALLAS, Circuit Judge Phlladelphla, Pa.
Hon. GEORGE GRAY, Circuit Judge Wilmlngton, Del.
Hon, EDWARD G. BRADFORD. District Judge, Delaware Wilmlngton, Del.
Hon. ANDREW KIRKPATRICK, District Judge, New Jersey» Newark, N. J.
Hon. WILUAM M. LANNINQ, District Judge. New Jersey» Trenton, N. J.
> Died May 3, 1904.
' Appolnted May 3, 1904, to succeed Klrkpatrick, District Judge.
129 F. (v)
Vi , 129 FEDERAL IlErOIlXKK.
Hon. JOHN B. McPHBRSON, District Juflse, B. D, PennsylïanSa Philadclpliia, Pa.
Hou. J. B. HOUjAND, District Juflge, H. D. Pennsylvania • Philadelphia, Pa.
Hon. ROBERT WODROW ARCHBALD, District Judge, M. D. Pennsylvanla..Soraiiton, Pa.
Hon. JOSEPH BUFFINGTON, District Judge, W. D. Pennsylvanla Plttsburgh, Pa.
FOURTH CIRCUIT.
Hon. MELVILLB W. FULLER, Circuit Justice Washington, D. 0.
Hon. NATHAN GOFF, Circuit Judge Clarksburg, W. Va.
Hon. CHARLES H. SIMONTON, Circuit Judge» Charleston, S. C.
Hon. JETER C. PRITCHARD. Circuit Judge».... , S. C.
Hon. THOMAS J. MORRIS, District Judge, Maryland Baltimore, Md.
Hon. THOMAS R. PURNELL, District Judge, B. D. North Carolina Raleigh, N. C.
Hon. JAMES E. BOYD, District Judge, W. D. North Carolina Greensboro, N. C.
Hon. ■WILLIAM H. BRAWLEY, District Judge, E. and W. D. South Car. .Charleston, S. 0.
Hon. EDMUND WADDILL, Jr., District Judge, E. D. Virginia Richmond, Va.
Hon. HENRY CLAY McDOWELL, District Judge, W. D. Virginia Lynchburg, Va.
Hon. JOHN J. JACKSON, District Judge, N. D. West Virginia Parkersburg, W. Va.
Hon. BENJAMIN F. KELLER, District Judge, S. D. West Virginia Branwell, W. Va.
FIFTH CIRCUIT.
Hon. EDWARD D. WHITE, Circuit Justice Washington, D. 0.
Hon. DON A. PARDEE, Circuit Judge Atlanta, Ga.
Hon. A. P. McCORMICK, Circuit Judge Dallas, Tex.
Hon. DAVID D. SHBLBY, Circuit Judge Huntsvlile, Ala.
Hon. THOMAS GOODB JONES, District Judge, I*. and N. D. Aiabama...Montgoniery, Ala.
Hon. HARRY T. TOULMIN, District Judge, S. D. Aiabama Mobile, Ala.
Hon. CHARLES SWAYNB, District Judge, N. D. Fiorida Pensacola, Fia.
Hon. JAMES W. LOCKE, District Judge, S. D. Fiorida Jacksonville, Fia.
Hon. WILLIAM T. NBWMAN. District Judge, N. D. Georgia Atlanta, Ga.
Hon. EMORY SPEER, District Judge, S. D. Georgia Maçon, Ga.
Hon. CHARLES PARLANGE, District Judge, E. D. Louisiana New Orléans, La.
Hon. ALECK BOARMAN, District Judge, W. D. Louisiana Shreveport, La.
Hon. HENRY C. NILÉS, District Judge, Ni and S. D. Mississippi Kosclusko, Misa.
Hon. DAVID E. BRYANT, District Judge, B. D. Texas Sherman, Tex.
Hon. EDWARD R. MEEK, District Judge, N. D. Texas Ft. Worth, Tex.
Hon. THOMAS S. MAXEY, District Judge. W. D. Texas ....Austln, Tex.
Hon. WALLER T. BURNS, District Judge, S. D. Texas Houston, Tex.
SIXTH CIRCUIT.
Hon. JOHN M. HARLAN, Circuit Justice Washington, D. a
Hon. HBNRY F. SBVERENS, Circuit Judge Kalamazoo, Mich.
Hon. HORACE H. LURTON, Circuit Judge Nàshville, Tenn.
Hon. JOHN K. RICHARDS, Circuit Judge Ironton, Ohio.
Hon, ANDREW M. J. COCHRAN, District Judge, E. D. Kentucky Covington, Ky.
Hon. WALTER EVANS, District Judge, W. D. Kentucky Louisviile, Ky.
Hon. HENRY H. SWAN, District Judge, B. D. Michigan Détroit, Mich.
Hon. GEORGE P. WANTY, District Judge, W. D. Michigan Grand Rapids, Mich.
Hon. AUGUSTXJS J. RICKS, District Judge, N. D. Ohio Cleveland, Ohio.
Hon. FRANCIS J. WING, District Judge, N. D. Ohio Cleveland, Ohio.
Hon. ALBERT C. THOMPSON, District Judge, S. D. Ohio Cincinnati, Ohio.
Hon. CHARLES D. CLARK, District Judge, E. and M. D. Tennessee Ohattanooga, Tenn.
Hon. ELI S. HAMMOND, District Judge, W. D. Tennessee Memphia, Tenn.
• Appolnted in accordance wlth an act ol Congress provlding for an additional District
Judge for thls District.
• Died Aprii 25, 1904.
• Appointed to succeed Simonton, Circuit Judgo.
JUDQE3 OB' THE COURTS. Vil
SEVENTH CIRCUIT.
Hon. WILLIAM R. DAT, Circuit Justice , 'Washington, D. C.
Hon. JAMES G. JENKINS, Circuit Judge Mllwaukee, Wls.
Hon. PETER S. GROSSGUP, Circuit Judge Chicago, lU.
Hon. FRANCIS E. BAKER, Circuit Judge Indianapolls, Ind.
Hon. CHRISTIAN C. KOHLSAAT, District Judge, N. D. Illinois Chicago, III.
Hon. ALBERT B. ANDERSON, District Judge, Indiana Indianapolls, Ind.
Hon. J. OTIS HUMPHREY, District Judge, S. D. Illinois Springfleld, 111.
Hon. WILLIAM H. SEAMAN, District Judge, B. D. Wisconstn Sheboygan, Wls.
Hon. EOMANZO BUNN, District Judge, W. D. Wisoonsin Madison, Wls.
EIGHTH CIRCUIT.
Hon. DAVID J. BREWBR, Circuit Justice Washington, D. C.
Hon. WALTBR H. SANBORN, Circuit Judge St Paul, Mlnn.
Hon. AMOS M. THAYER, Circuit Judge St. Louis, Mo.
Hon. WILLIS VAN DEVANTER, Circuit Judge Cheyenne, Wyo,
Hon. WILLIAM C. HOOK, Circuit Judge Leavenworth, Kan
Hon. JACOB TRIEBBR, District Judge, E. D. Arkans.is Little Rock, Ark.
Hon. JOHN H. ROGBRS, District Judge, W. D. Arkansas Ft. Smith, Ark.
Hon. MOSES HALLETT, District Judge, Colorado Denver, Colo.
Hon. SMITH McPHERSON, District Judge, S. D. lowa Red Oak, lowa.
Hon. HENRY THOMAS REBD, District Judge, N. D. lowa Cresco, lowa,
Hon. JOHN C. POLLOCK, District Judge, Kansas Topeka, Kan.
Hon. WM. LOCHREN, District Judge, Minnesota Minneapolis, Minn.
Hon. PAGE MORRIS, District Judge, Minnesota Duluth, Mlnn.
Hon. ELMER B. ADAMS, District Judge, E. D. Missouri St. Louis, Mo.
Hou. JOHN F. PHILIPS, District Judge, W. D. Missouri Kansas City, Mo.
Hon. W. H. MUNGBR, District Judge, Nebraska Omaha, Neb.
Hon. CHARLES F. AMIDON, District Judge, North Dakota Fargo, N. D.
Hon. JOHN B. CARLAND, District Judge, South Dakota Sioux Falls, S. D.
Hon. JOHN A. MARSHALL, District Judge, Utah Sait Lake City, Utah.
Hon. JOHN A. RINBR, District Judge, Wyomlng Cheyenne, Wyo.
NINTH CIRCUIT.
Hon. JOSEPH McKBNNA, Circuit Justice Washington, D. C.
Hon. WM. W. MORROW, Circuit Judge San Francisco, Cal.
Hon. WILLIAM B. GILBERT, Circuit Judge Portiand, Or.
Hon. EESKINB M. ROSS, Circuit Judge Los Angeles, Cal.
Hon. JOHN J. DE HAVEN, District Judge, N. D. Calilornia San Francisco, Cal.
Hon. OLIN WBLLBORN, District Judge, S. D. Calitornia Los Angeles, Cal.
Hon. V/ILLIAM H. HUNT, District Judge, Montana» , Mont.
Hon. CORNELIUS H. HANFORD, District Judge, Washington Seattle, Wash.
Hon. THOMAS P. HAWLEY, District Judge, Nevada Carson City, Ney.
Hon. CHARLES B. BBLLINGER, District Judge, Oregon Portiand, Or.
Hon. JAMES H. BEATTY, District Judge, Idaho Boise City, Idaho.
• Appointed April 19, 1904, to succeed Knowles, District Judge.
CASES REPORTED.
Page
Abner, Finley v. (C. C. A.) 734
Adiims Exp. Oo., Jones v. (0. C.) 618
Adler, In re (D. C.) 502
/Etna Ins. Co., Lewis v. (O. C. A.) 100t>
Alden Speare's Sons Co. v. Hubiuger (C.
G. A.) 538
Alexis V. United States (0. O. A.) 60
Allen, The ïïditli L. (C. O. A.) 209
Allendorf, In re (D. C.) 981
Allen-West Commission Co. v. Grumbles
(C. C. A.) 287
American Bridge Co. v. Peden (C. O. A.). .1004
American Car & Foundry Co., Morton
Trust Co. V. (O. C. A.) 91C
iVmerican Cent Life Ins. Co., Riggs v. (C.
G. A.) 207
American Chocolaté Machinery Co. v.
Helmstetter (C. C.) 919
American Cotton Co., Rembert Roller Oom-
press Co. V. (0. C. A._) 355
American Sales Book Co. v. Carter-Orume
Co. (C. 0. A.) 1004
American Sheet Steel Co., Cecil v. (C. C.
A.) 542
American Spirits Mfg. Co. v. Easton (C. C.
A.) 1004
American S. S. Co. v. American Steel
Barge Co. (C. 0. A.) 65
American Steel Barge Co., American S. S.
Co. V. (C. C. A.)... 65
American Surety Ce, Campbell & Zell Co.
V. (C. O.) 491
American Tin Plate Co., Chambers v. (C.
C. A.) 561
Animarinm Co., Mahler v. (C. C. A.) 897
Anson M. Bangs, The (0. C. A.) 103
.Vnthony v. Burrow (0. 0.) 783
Vrrighi, Denver & R. G. R. Oo. v. (C. C. A.) 347
.\tchison, T. & S. F. R. Co., Empire State
Cattle Co. V. (C. C.) 480
Atchison, T. & S. F. R. Co., Minnesota &
D. Cattle Co. v. (0. C.) 480
Atchison, T. & S. F. R. Co., Sawyer v.
(C. C. A.) 100
Atlantic Coast Line R. Co., Wilson v. (C.
C.) 774
Bacon, Lake Steam Shipping Co. v. (D. C.) 819
Bailey, Hibberd t. (0. O. A.) 575
Balliet v. United States (C. C. A.) 689
Baltimore & O. R. Ce, Robinson v. (C. C.
A.) 753
Banga, The Anson M. (0. C. A.) 103
Barber v. National Carbon Co. (C. C. A.) 370
Beckett, Dugan v. (C. C. Ai) 56
Belknap, In re (D. C.) '. 646
Bilby, Carey v., two cases (C. C. A.) 2Û3
Bilfinger, Georgia Pine Turpentine Co. v.
(C. C.) 131
129 F.
(ix)
Page
Bird V. Terry (0. C.) 472
Bird, Terry v. (C. C. A.) 592
Black Hills & N. W. R. Co. v. Tacoma
Mill Co. (C. C. A.) 312
Bogen & Trummel v. Protter (C. C. A.).. 533
Boston Herald Co., O'Connell v. (C. C.)... 839
Brake v. Callison (G. O. A.) 201
Brake, Callison v. (C. C. A.) 190
Breiner, In re (D. C.) 155
Brennan v. United States (C. G.) 837
Brill V. Peokham Mfg. Co. (O. C.) 139
Bristol V. United States (C. C. A.) 87
Brought V. Cherokee Nation (C. 0. A.) 192
Brown, Lanyon Zinc Co. v. (C. 0. A.) . . . 912
Brown, Western Tie & Timber Co. v. (C.
O A "ï 728
Bry ce V. Soùftern 'b. ' Co! ' ("6." C.) '. '. '. '. '. '. '. 966
Buchanan & Co., Perkins Electric Switch
Mfg. Co. V. (C. 0.) 134
Buckingham, The (D. C.) 975
Buck Mfg. Ce, Paulus v. (G. G. A.) 594
Bullock Electric & Mfg. Co. v. Westing-
house Electric & Mfg. Co. (G. G. A.) 105
Bunker UiU & Sullivan Mining & Concen-
trating Co., Empire State-ldaho Mining
& Developing Co. v., two cases (C. 0. A.). .1005
Burrow, Anthony v. (C. O.) 783
Busk Tunnel R. Co., Daly v. (G. C. A.). .. 513
Butte & B. Consol. Min. Co., Heinze v.
(C. C. A.) 274
Butte & B. Gonsol. Min. Co., Heinze v.
(C. C. A.) 337
Callison v. Brake (C. C. A.) 196
Callison, Brake v. (O. C. A,) 201
Camdeu Interstate B. Co. v. Catlettsburg
(C. C.) 421
Camdeu Ironworks, Midvale Steel Co. v.
(C. C.) 246
Camp V. Peacock, Hunt & West Go. (0.
C. A.) 1005
Campbell & Zell Co. v. American Surety
Co. (C. C.) 491
Canadian Pac. R. Co., Elliott v. (G. G.).. 163
Capital City, The (D. C.) 402
Carey v. Bilby, two cases (C. 0. A.) 203
Carter-Grume Co., American Sales Book
Co. V. (0. C. A.) 1004
Cary Bros. & Hannon v. Morrison (C. C.
A.) 177
Catlettsburg, Camden Interstate R. Co. v.
(C. C.) 421
Gecil V. American Sheet Steel Co. (C. C.
A.) 542
G. E. Riley & Co. v. Milieu Cotton Mills
(G. G.) 141
Chambers v. American Tin Plate Co. (0.
C. A.) 561
Chase, Hoadley y. (0. 0. A.) 1005
129 FEDERAL REPORTER.
Cherokee Nation, Brought v. (C. C. A.)... 192
Oherokee Nation, Hargrove v. (C. C. A.) . . 186
Ohesapeake & D. Canal Co., Giing v. (0.
0.) 996
Clieung Him Nim t. United States (C. C.
A.) 5S5
Chew Hing v. United States (C. C. A.).. 585
Ohicaso Lumber & Timber Ce, Wilson v.
(C. C.) 636
Chicago, M. & St. P. R. Co. v. Voelker
(C. C. A.) 522
Chin Chew Fong v. United States (C. C.
j^\ ^ ^ 585
Chisho'lm,'The' Màry'F.'(D; 0.')'.'.".'."'.*.'.". 814
Christensen Engineering Co. v. Westing-
house Air Brake Co. (O. O. A.) 96
Cliristie-Street Commission Co. v. United
States (C. C.) 506
Chubb, Norwicli & N. Y. Transp. Co. v.
(C. O. A.) 1006
Circuit Court of United States, Southern
Uist. of lowa, United States v. (0. O. A.) 897
City of Mobile t. Sullivan Timber Co.
(C. C. A.) 298
Clark V. KansVV City,' Ft.'s. &'m.' R.'Co.
(C.C. A.) 341
Clark V. Pidcock (0. C. A.) 745
Clark, Lewis v. (0. C. A.) 570
Clark, United States v. (C. 0.) 241
Collier, Lopez v. (C. C. A.) 104
Comptograph Co. v. Meclianical Account-
ant Co. (C. C.) 394
Cougdon, In re (D. C.) 478
Oonnors, Mason v. (0. O.) 831
Oottrell & Son v. Smokeless Fuel Co. (C.
C.) 174
Courier-Citizen Co., O'Conuell v. (C. C.) . . 839
Covington. First Nat. Bank v. (C. C.) 792
Crawford v. Eidman (C. C). 092
Cunningham, United States v. (D. 0.) 833
Daly V. Busk Tunnel E. Co. (C. C. A.) . . 513
Dann, In re (D. C.) 495
Dauntless, The (C. C. A.) 715
Davis V. Kansas & T. Coal Co. (C. C.)... 149
Denver & R. G. R. Co. v. Arrighi (C. C.
A.) 347
Desmond, Peyton v. (C. C. A.) 1
Deutschland, The (D. C.) 904
Diamond Drill & Machine Co., Kelley v.
(C. C. A.) :... 756
Diamond Match Co. v. Union Match Co.
(0. C.) 602
Dickinson v. Sannders (O. C. A.) 16
Dowagiae Mfg. Co. v. Minnesota Moline
Plow Co. (C. C. A.) 1005
Downing, United States v. (C. C. A.) 90
Dugan V. Beckett (O. O. A.) 56
Dumper No. 8, The (C. C. A.) 98
Dunn V. Gans (O. C. A.) 7-50
Eastern Commission & Importing Co., In
re (D. O.) 847
Baston, American Spirits Mfg. Co. v. (C.
0. A.) 1004
Edith L. Allen, The (0. C. A.) 209
fî. H. Godshalk Co. v. Sterling (C. C. A.) 580
Eidraan, Crawford v. (0. G.) 992
Elliott V. Canadian Pac. R. Co. (O. 0.) . . . 163
BUis & Co., Priée & Hart v. (C. C.) 482
Paga
Empire State Cattle Co. y. Atchison, T. &
S. F. R. Co. (C. C.) 480
Empire State-Idaho Mining & Deveioping
Co. V. Bunker Hill & Sullivan Mining &
Concentrating Co., two cases (C. G. A.) . . 1005
Bnsley Co., Kessler & Co. v. (C. C.) 397
Everleth, In re (D. C.) 620
Express, The (D. C.) 655
Fairmont Mills, Johnston v. (O. O. A.).... 74
Feingold, McNulty v. (D. C.) 1001
B'elt «& Tarrant Mfg. Co. v. Mechanical Ac-
countant Co. (C. C.)... 386
Ferry v. Wariug Hat Mfg. Co. (C. C.) 389
Fidelity Mut. Life Ins. Co., Riggs v. (C. C.
A.) 207
Finley v. Abner (C. C. A.) 734
Fireman's Fund 1ns. Co. of San Francisco,
Norwich & N. Y. Transp. Co. v. (C.
O. A.) 1006
First Nat. Bank v. Covington (C. C.) 792
First Nat. Bank v. Simpson (C. C. A.)... 257
Pirth Co. V. Millen Cotton Mills (C. C.) . . . 141
Flagg Mfg. Co., In re (C. C. A.) 588
B'ortune Gold Min. Oo., Résurrection Gold
Min. Co. V. (C. C. A.) 668
Preedley, Wilson v. (O. O.) 835
Frost & Adams v. Saltonstall (O. C.) 481
Furber, The J âmes T. (D. C.) 808
Gans, Dunn v. (C. C. A.) 750
Geiser, In re (D. C.) 237
General Electric Co., Gill v. (C. C. A.). ... 349
General Electric Co., Star Brass Works t.
(C. C. A.) 102
General Gaslight Co. v. Matchless Mfg. Oo.
(C. C.) 137
Georgia Pine Turpentine Co. v. Bilfinger
(C. C.) 131
Gilbert, In re (C. C. A.) 212
Gill V. General Electric Co. (C. C. A.).... 349
Gilson V. Mutual Reserve Fund Life Ass'n
(O. C.) 1003
Girard Glazed Kid Co., In re (D. 0.) 841
Godshalk Co. v. Sterling (O. C. A.) 580
Goldman, In re (C. C. A.) 212
Gordon Suppîy & Mfg. Co., In re (I). C.) 622
Graham v. Planters' Compress Co. (D. C.) 253
Grand Circle, Women of Woodcraft, Kelly
v. (O. O.) 830
Greene, Merritt & Ohapman Derrick &
Wrecking Go. v. (C. C.) 969
Gring v. Chcsapeake & D. Canal Co. (C.
C.) 996
Grumbles, Allen-West Commission Co. v.
(C. C. A.) 287
Haie & Kilburn Mfg. Co. v. Oneonta, C. &
R. S. R. Co. (C. C.) 598
Haie & Kilburn Mfg. Go., Lehigh Valley
Traction Go. v. (C. C. A.) 1005
Hallwood Cash Register Co., National
Cash Register Co. v. (C. C. A.) 114
Hall & Wimberly, Lamar v. (C. C. A.). .. 79
Hargrove v. Cherokee Nation (C. C. A.) . . 186
Hartford Life Ins. -Co., Riggs v. (C. C. A.) 207
Head, Phillips v. (C. C. A.) 1007
Heide v. Wallace & Co. (C. C.) 649
Heinze v. Butte & B. Consol. Min. Co. (C.
C. A.) 274
CASES RBPOETED.
XI
Page
Heinze t. Butte & B. Consol. Min. Co. (C.
0. A.) 337
Helmstetter, American Chocolaté Machin-
ery Oo. V. (0. 0.) 919
Hempstead v. Thomas (C. C. A.) 907
Hempstead, Thomas v. (C. C. A.) 1007
Hennessy v. Tacoma Smelting & Refining
Co. (C. 0. A.) 40
Hennessy Bros. & Evans Co. v. Memphis
Nat. Bank (C. C. A.) 557
Hercules, The (D. C.) 945
Hibberd v. Bailey (C. C. A.) 575
Hibberd v. McGill (C. C. A.) 590
Hoadley v. Chase (0. C. A.) 1005
Hobbs, Tower v. (C. C. A.) 918
Horan v. Hughes (D. 0.) 248
Horan v. Hughes (C. C. A.) 1005
Hosmer v. Wyoming Ry. & Iron Co. (O.
C. A.) 883
Houghton, Ex parte (C. C.) 239
Hubinger, Alden Speare's Sons Co. v. (0.
C. A.) 538
Hughes, Horan v. (D. C.) 248
Hughes, Horan v. (C. C. A.) 1005
Humes, O'Shaugnessy v. (0. C.) 953
Huntzicker v. Illinois Cent. R. Co. (C. C.
A.) 548
Idlewild, The (D. C.) 846
Illinois Cent. R. Co., Huntzicker v. (0. C.
A.) 548
Insurance Co. of North America, Norwich
& N. Y. Transp. Co. v. (0. C. A.) 1006
International Nav. Co. v. Sea Ins. Co. (C.
C. A.) 13
International Silver Co., Palato v. (0. C.).. 652
James T. Furber, The (D. C.) 808
Johnston v. Fairmont Mills (C. 0. A.).... 74
Johnston, Terry v. (C. C. A.) 354
Joues V. Adams Exp. Co. (C. C.) 618
Kalamazoo Corset Co. v. Simon (C. C.) . . . 144
Kalamazoo Corset Co. v. Simon (0. 0. A.). 1005
Kansas City, Ft S. & M. R. Co., Clark v.
(C. C. A.) 341
Kansas City. P. & G. R. Co., State Trust
Co. V. (C. C.) 455
Kansas & T. Coal Co., Davis v. (0. O.)... 149
Kelley v. Diamond Drill & Machine Co.
(C. C. A.) 756
Kelly V. Grand Circle, Women of Wood-
craft (0. C.) 830
Kemp V. McBride (C. C.) 382
Kennedy, Leighton v. (C. C. A.) 737
Kent, Union Transp. Co. v. (0. C. A.) 715
Kerr, Phénix Ins. Co. of Brooklyn, N. Y.
V. (C. O. A.) 723
Kessler & Co. v. Ensley Co. (C. C.) 397
Lake, United States v. (D. C.) 499
Lake Jackson Sugar Co., In re (D. C.) . . . 640
Lake Steam Shipping Co. v. Bacon (D. 0.) 819
Lamar v. Hall & Wimberly (C. C. A.) 79
Land Title & Trust Co. v. McCoach (0.
Q j^\ ^ g^-|^
Lanyon Zinc Co.'v.' Brown'(C.'6.' A.) ','.'.'. ', '. 912
Larsen v. S. P. Shotter Co. (C. C.) 945
Leeds Woolen Mills, In re (D. C.) 922
Lee Yue v. United States (O. C. A.).. 585
Page
Lehigh Valley Traction Co. t. Haie & Kil-
burn Mfg. Co. (C. C. A.) 1005
Lehigh Valley Transp. Co. v. Minnesota S.
S. Co. (C. C. A.) 22
Leighton v. Kennedy (0. C. A.) 737
Le Marchel, Tegarden v. (C. C.) 487
Lewis, In re (D. C.) 147
Lewis V. .astna Ins. Co. (C. C. A.) 1006
Lewis v. Clark (C. C. A.) 570
Lewis, United Stetes v. (C. C.) 823
Lincoln, In re (D. C.) 247
Lopez V. Collier (C. C. A.) 104
Lyndhurst, The (D. C.) 843
McBride, Kemp v. (C. C.) 382
McCabe, United States v. (C. C. A.) 708
McCarthy v. Westfield Plate Co. (C. O.
A.) 128
MeCoach, Land Title & Trust Co. v. (O.
C. A.) 901
McCoach, Philadelphia TYust, Safe De-
posit & Ins. Co. V. (C. C. A.) 906
McCracken & McLeod, In re (D. C.) 621
McFarland v. State Sav. Bank (C. C.).. 244
McGill, Hibberd v. (C. C. A.) 590
McGrath, In re (D. C.) 237
McNulty V. Feingold (D. C.) 1001
Mahler v. Animarium Co. (G. C. A.) 897
Mary F. Chisholm, The (D. C.) 814
Mason v. Connors (C. C.) 831
Mason, United States v. (C. C. A.) 742
Matchless Mfg. Co., General Gaslight Co.
V. (C. C.) ,. 137
Mechanical Accountant Co., Comptograph
Co. V. (G. C.) 894
Mechanical Accountant Co., Felt & Tar-
rant Mfg. Co. v. (C. C.) 386
Memphis Nat. Bank, Hennessy Bros. &
Evans Co. v. (C. C. A.) 557
Merritt & Chapman Derrick & Wrecking
Co. V. Greene (O. C.) 969
Midvale Steel Co. t. Camden Ironworks
(C. C.) 246
Miles, In re (C. C. A.) 1006
Milgraum & Ost, In re (D. C.) 827
Milieu Cotten Mills, C. E. Riley & Co. v.
(C. CO 141
Milieu Cotton Mills, Southern Cotton Mills
& Commission Oo. v. (C. C.) 141
Millen Cotton Mills, William Firth Co. v.
(C. O.) 141
Minnesota Moline Plow Co., Dowagiac
Mfg. Co. V. (0. C. A.) 1005
Minnesota S. S. Co. v. Lehigh Valley
Transp. Co. (O. C. A.) 22
Minnesota & D. Cattle Co. v. Atchison, T.
& S. P. K. Co. (C. C.) 480
Missouri Drug Co. v. Wyman (C. C.) . . . . 623
Missouri Pac. R. Co. v. Western Assur.
Co. (C. C.) 610
M. M. Buck Mfg. Co., Paulus v. (O. C, A.) 594
Moore, United States v. (D. C.) 159
Moore, United States v. (0. C.) 630
Morrison v. O'Brion (0. O. A.) 893
Morrison, Cary Bros. & Hannon v. (O. C.
A.) 177
Morse v. St. Paul Fire & Marine Ins. Co.
(C. 0.) 233
Morton Trust Co. v. American Car &
Foundry Co. (0. C. A.) 916
Xil
129 FEDEEaL, EïïPOETEU.
Page
Murphy, Social Regîster Ass'n t. (0. G.).. 148
Mutual Life Ins. Oo. of New York, West-
inghouse Electric & Mfg. Co. v. (0. G.) . . 213
Mutual Reserve Fund Life Ass'n, Gilson v.
(G. C.) 1003
Xatchez, ïhornton v. (C. C. A.) 84
National Garbon Ce, Barber v. (G. C. A.) 370
National Gash Kegister Co. v. Hallwood ,
Cash Register Go. (G. C. A.) 114
National Cash Register Go. v. New Go-
lumbus Watch Co. (G. G. A.) 114
National Meter Go. v. Neptune îileter Go.
(G. C. A.) 124
National Surety Go. v. United States (C.
C. A.) 70
Neptune Meter Go., National Mcter Co. v.
(C. C. A.) 124
New Brunswick, The (C. G. A.).- 893
New Oolumbus Watch Go., National Cash
Register Go. v. (G. C. A.) 114
New England, ïhe (0. G. A.) 1006
Newman, In re (C. C. A.) 1006
New Orléans & N. B. R. Go., Rutledge v.
(C. C. A.) 94
New York. Shortland Bros. Co. v. (D. C.) 973
Northern Pac. R. Go., Weidenfeld v. (G.
G. A.) 305
Northwestern Nat. Life Ins. Co., Riggs
V. (C. C. A.) 207
Norwich & N. Y. Transp. Co. v. Chubb
fC. C. A.) 1006
Norwjch & N. Y. Transp. Co. v. Fireman's
Fund Ins. Co. of San Francisco (G. C.
A.) 1006
Worwich & N. Y. Transp. Oo. v. Insurance
Co. of North America (G. C. A.) 1006
Norwich & N. Y. Transp. Co. v. Security
Ins. Co. of New Haven (C. C. A.) 10O6
O Brion, Morrison v. (C. G. A.) 893
O'Connell v. Boston Herald Co. (C. 0.). . 830
O'Connell v. Courier-Citizen Co. (C. 0.).. 839
O'Hara v. United States (C. C. A.) 551
Ohio Brass Co., Thomson-Houston Electric
Co. V. (C. G.) 378
One Black Horse, United States t. (D. C.) 167
O'Neill, United States v. (G. G. A.) 909
Oiieonta. C. & R. S. R. Co., Haie & Kil-
burn Mfg. Oo. v. (G. C.) 598
Oriental American Co., United States v.
(G. G.) 249
O'Shaugnessy v. Humes (C. G.)..... 933
Pacifie Transport Co., Steamship Bucking-
ham Oo. V. (D. 0.) 975
Palato T. International Silver Co. (C. G.) 652
Pancoast, In re (D. 0.) 643
Parsons, The Thomas M. (D. C.) 972
Paul, Paul Steam System Co. v. (C. G.).. 757
Paul Steam System Go. v. Paul (0. 0.). .. 757
Paulus V. M. M. Baek Mfg. Co. (C. C. AJ 594
Peacock, Hunt & West Go., Camp v. (G.
C. A.) 1005
Pease, In re (D. C.) 446
Peckham Mfg. Co., Brill v. (O. O.) 139
Peden, American Bridge Co. v. (G. 0. A.). .1004
Pennsylvania Go., Western Union Tel. Co.
V. (C. O. A.) 849
Pépin Tp. t. Sage (G. C. A.) 657
Page
Perkins JBÎlectric Switch Mfg. Co. v. Buch-
anan & Go. (C. G.) 134
Peyton v. Desmcud (G. C. A.) 1
Phénix Ins. Go. of Brooklyn, N. Y., v.
Kerr (G. C. A.) 723
Philadelphia Trust, Safe Deposit & Ins. Co.
V. McCoach (G. C. A.) 906
Phillips V. Head (C. C. A.) 1007
Pidcock, Clark v. (C. G. A.) 745
Fine Forest, The (C. 0. A.) 700
Pitt, Rodgers v. (0. G.) 9;a
Pittsburg Goal Co., Robinson v. (G. C. A.) 324
Planters Oompress Go., Graham v. U->.
0.) • • '<^-3"
Powers, Ex parte (D. C.) 983
Price & Ilart T. T. .1. Ellis & Co. (C. G.). . 482
Frotter, Bogen & Trummel v. (G. C. A.) . . 533
Quigley, Walmsley v. (C. C. A.) 583
Qnincy, Toliman v. (C. C.) 974
Radford v. United States (C. O. A.) 49
Reiuhart, In re (D. 0.) 510
Rembert Roller Compress Co. v. American
Cotton Go. (0. C. A.) 353
Résurrection Gold Min. Go. v. Fortune
Gold Min. Go. (C. G. A.) ,668
Riggs V. American Cent. Life 1ns. Go.
(C. C. A.) 207
RiggB V. Fidelity Mut. Life Ins. Go.
(C. G. A.) 207
Riggs V. Hartford Life Ins. Go. (C. G. A.) 207
Riggs V. Northwestern Nat. Life Ins. Go.
(0. C. A.) 207
Riggs V. Union Life Ins. Go. of Indiana
(G. C. A.) 207
Riley & Co. v. Milieu Cotton Mills (C.
C.) 141
River Spinning Co., SauTageau v. (G. G.) . . 901
Robinson v. Baltimore & O. R. Go. (G.
G A) 753
Roliinson V." Pittsburg CoaV Co. " (6." G.' A.) 324
Robinson v. Whitcomb (C. G. A.) 873
Rodgers v. Pitt (C. C.) 932
Russell V. Russel! (C. G.) 434
Rutledge v. New Orléans & N. E. R. Co. (C.
G. A.) 94
Sage, Pépin Tp. v. (0. 0. A.) 657
St. Paul Fire & Marine Ins. Go., Morse v.
(O. G.) 23n
Saltonstall, Prost & Adams v. (G. C.) 481
Sampson & Murdock Co. v. Seaver-Rad-
ford Co. (C. C.) 761
Samuel H. Gottrell & Son v. Smokeless
Fuel Go. (0. G.) 174
Saunders, Dickinson v. (G. C. A.) 16
Sauvageau v. River Spinning Co. (C. G.).. 961
Sawyer v. Atchison, T. & S. F. R. Go. (C.
G. A.) 100
Scharer, Weeks v. (O. C. A.) 333
Schophofen, Van Ingen v. (G. G. A.) 352
Schriver, Western Union Tel. Co. v. (C.
G. A.) 344
Scott V. Stockholders' Oil Go. (C. C.) 615
Sea Ins. Go., International Nav. Co. v.
(0. C. A.) 13
Seaver-Radford Go., Sampson & Murdock
Go. V. (a c.) 761
CASES EBPOKTED.
Xlll
Page
Security Ins. Co. of New Haven, Norwich
fe N. Y. Transp, Co. v. (G. 0. A.) 1000
Shalius V. TJnited States (G. 0.) 843
Shoe & Leather Reporter, In re (G. C. A.) 588
Shortland Bros. Go. v. Kew York (D. 0.). . 973
Shotter Co., Larsen v. (C. G.) 945
Simon, Kalamazoo Corset Co. v. (C. 0.).. 144
Simon, Kalamazoo Corset Co. v. (0. 0.
A.) 1005
Simpson v. First Nat. Bank (C. C. A.) 257
Siins V. Union Assur. Soc. (G. G.) 804
Smokeless Fuel Co., Samuel H. Cottrell &
Son V. (G. 0.) 174
Social Register Afis'n v. Murphy (C. C.) . . 148
Southern Cotton Mills & Commia^ion Co. v.
V. Millen Cotton Mills (C. C.) 141
Southern Pac. Co., ïavlor v. (C. G. A.). ..1007
Southern K. Co., P.ryce v. (C. C.) 9fl(î
Southwark, The (D. C.) 171
Speare's Sous Co. v. Hubinger (G. G. A.) 538
a P. Shotter Co., Larsen v. (C. C.) 945
Stanley Instrument Co., Westinghouse
Electric & Mfg. Co. v. (C. G.) 140
Star Brass Works v. General Flectric Co.
(G. C. A.-) 102
State Sav. Bank, McFarland v. (C. C.) 244
State Trust Co. t. Kansas City, P. & G.
II. Co. (C. C.) 455
Steamship Buckingham Co. v. Pacific
Transport Co. (D. C.) 975
Sterling, E. II. Godshalk Co. v. (C. C. A.).. 580
Stockholders' OU Go., Scott v. (C. C.) 615
Stone V. Whitridge, White & Co. (C. C.
A.) 33
Sullivan Timber Co., City of Mobile v. (C.
0. A.) 298
Surprise, The (C. C. A.) 87,3
Swan V. Western Union Tel. Co. (C. C. A.) 318
Tacoma Mill Co., Black Hills & N. W. R.
Co. V. (G. C. A.) 312
Tacoma Smelting & Refining Co., Henues-
sy V. (C. 0. A.) 40
Taylor v. Southern Pac. Co. fC. C. A.) 1007
Tegardeo v. Le Marchel (G. G.) 487
TeJry T. Bird (C. C. A.) 592
Terry v. Johnston (C. O. A.) 354
Terry, Bird v. (C. G.) 472
Thomas v. Hempstead (C. C. A.) 10O7
Thomas v. Wanamaker (G. C. A.) 92
Thomas, Hempstead v. (C. C. A.) 907
Thomas M. Parsons. The (D. C.) 972
Thomson-Houston Electric Co. T. Ohio
Brass Co. (C. C.) 378
Thornton v. Natchez (0. C. A.) 84
ïhree Packages of Distilled Spirits v. Unit-
ed States (G. C. A.) 329
T. J. EUis & Co., l'rice & Hart v. (O. C.) . . 482
ToUman v. Quincy (0. C.) 974
Tonopah Min. Co. of Nevada, Tonopah &
S. L. Min. Co. v. (C. C. A.) 1007
Tonopah & S. L. Min. Co. v. Tonopah Min.
Co. of Nevada (0. C. A.) 1007
Tower v. Hobbs (C. O. A.) 918
Trader, The (D. C.) 462
Triton. The rC. C. A.) 698
Tsoi Yii V. United States (C. 0. A.) 585
Union Assur. Soc, Sims v. (0. C.) 804
Page
Union Life Ins. Co. of Indiana, Riggs v.
(C. C. A.) 207
Union Match Co., Diamond Match Co. v.
(C. C.) 602
Union Transp. Co. v. Kent (0. 0. A.) 715
United States v. Circuit Court of United
States, Southern Dist. of lowa (C. 0. A.) 897
United States v. Clark (C. 0.) 241
United States v. Ouuninghara (D. C.) 833
United States v. Downing (C. O. A.) 90
United States v. Lake (D. C.) 499
United States v. Lewis (0. C.) 823
United States v. MeCabe (G. C. A.) 708
United States v. Masou (C. G. A.) 742
United States v. Moore (D. C.) 159
United States v. Moore (C. C.) 630
United States v. One Black Horse (D. C.) . . 167
United States v. O'Neill (G. G. A.) 909
United States v. Oriental American Oo.
(C. C.) 249
United States, Alexis v. (C. G. A.) 60
United States, Balliet v. (C. C. A.) 689
United States, Brennan v. (C. C.) 837
United States, Bristol v. (C. C. A.) 87
United States, Cheung Him Nim v. (G. C.
A.) 585
United States, Chew Hing y. (C. G. A.). .. 585
United States, Chin Chew Fong v. (C. G.
A.) 585
United States, Christie-Street Commission
Co. V. (O. C.) 506
United States, Lee Yue v. (C. C. A.) 585
United States, National Surety Co. v. (G.
C. A.) 70
United States, O'Hara v. (C. C. A.) 551
United States, Kadford v. (0. 0. A.) 49
United States, Shalius v. (G. G.) 845
United States, Three Packages of Distilled
Spirits V. (G. C. A.) 329
United States, Tsoi Yii v. (C. C. A.) 585
United States, Watts v. (D. C.) 222
United States, Yee Yuen v. (C. C. A.) 585
Van Ingen v. Schophofen (C. C. A.) 352
Voelker, Chicago, M. & St. P. R. Co. v. (C.
C. A.) 622
Wagner Electric Mfg. Co., Westinghouse
Electric & Mfg. Co. v. (C. C.) 604
Wallaee & Co., Heide v. (C. C.) 649
Walmsley v. Quigley (C. C. A.) 583
Wanamaker, Thomas v. (C. C. A.) 92
Waring Hat Mfg. Co., Ferry v. (C. C.).. 389
Washburn, York v. (C. C. A.) 564
Watts V, United States (D. C.) 222
Weeks v. Scharer (G. C. A.) 333
Weidenfeld v. Northern Pac. R. Co. (C.
C. A.) 305
Western Assur. Co., Missouri Pac. R. Co.
V. (C. C.) 610
Western Tie & Timber Co. v. Brown (C.
C. A.) 728
Western Union Tel. Co. v. Pennsylvania
Co. (G. O. A.) 849
Western Union Tel. Co. v. Schriver (C. C.
A.) 344
Western Union Tel. Co., Swan v. (C. O.
A.) 318
Westfield Plate Co., McCarthy v. (0. C.
A.) 128
XXT
129 FBDEBAL BBFORTEB.
Page
Westinghouse Aîr Brake Co., Ohristensen
Engineering Co. v. (0. O. A.)
Westinghouse Electric & Mfg. Co. t. Mu-
tual Life Ins. Co. of New York (C. C,).,
Westinghouse Electric & Mfg. Co. v. Stan-
ley Instrument Co. (O. C.) 140
Westinghouse Electric & Mfg. Co. v. Wag-
ner Electric Mfg, Co. (C. C.)
Westinghouse Electric & Mfg. Co., Bul
lock Electric & Mfg. Co. v. (C. 0. A.)..
Whitcomb, liobinson v. (0. C. A.)
Whitridge, White & Co., Stone v. (0. 0.
A.) 83
96
213
604
103
873
Pag»
William Firth Co. v. Millen Cotton Mills
(C. C.) 141
Wilson V. Atlaui»- Coast Line K. Oo. (0.
G.) 774
Wilson V. Chicago Lumber & Timber Co.
(C. C.) 636
Wilson V. B^eedley (O. C.) S35
Wyman, Missouri Drug Co. v. (C. C.) 623
Wyoming Ry. & Iron Ce, Hosmer v. (C.
O. A.) 883
Yee Yuen v. United States (C. 0. A.),... 585
York V. Washburn (C. C. A.) 564
t
CASES
AEGXJED AND DETERMINED
IK TBB
UNITED STATES CIRCUIT COURTS OF APPEALS AND THE
CIRCUIT AND DISTRICT COURTS.
PEYTON et al. V. DESMOND.
(Carcult Court of Appeals, Eighth Circuit February 16, 1904)
No. 1,878.
1. VENtTE— ACTIOH TO Eecovee fob Teespass to Beàl Bstate— LOCAt OB
Teansitoet, Accoeding to Law of State Where Brought.
Whether an action to recover pecuniary damages for trespass to real
estate is real and local, or Is Personal and transltory, Is essentlally a
matter o£ state pollcy or local law, and must be determlned by the
View taken of the nature of the action in the state in which It Is brought.
2. Same— Minnesota.
In Minnesota an action to recover pecuniary damages for trespass to
real estate in another state Is vlewed, not as relatlng to the real estate.
but only as affording a Personal remedy, and transltory.
3. Same— Pleadino — Action to Recoveb foe Ctjttinq and Removal of Tim-
BEE— When Teansitoet.
Where the facts stated and the relief demanded show that the grava-
men of the action is the conversion of lumber manufactured out of trees
wrongfuUy eut and removed from plaintiff's land by défendant, and that
the purpose of the action is to recover the value of the lumber, and not
damages for any dépréciation In the value of the land, the action is transi-
tory, although the trespass to the land Is stated as lllustrating the charac-
ter of the conversion, and as bearing upon plaintIfC's right to recover the
value of the manufactured lumber.
4. Same.
The glvlng of an instruction in such an action, at the request of the de-
fendant, that the measure of damages recoverable was the value of the
logs as they stood in the trees, could not change the nature of the action,
whether or not It stated the correct measure of damages ; nor can it be
Invoked by défendant to defeat the jurisdiction of the court.
5. Public Lands— Peocbedings to Acquise Title— Jueisdiction of Land
Department.
The jurisdiction of the Land Department over public lands continues
so long as the légal tltle remains in the United States, and the décisions
and rulings of that department in proceedings to acqulre title to such
lands, prxor to the act which passes the légal title from the government,
are interlocutory, and are as mueh open to review or reversai by the
129 F.— 1
2 129 FEDERAL REPORTER.
Land Department, while the légal tltle remains In the United States, as
are the interlocutory decrees of a court open to review upon the final
heariug.
6. Same— Final Act of Land Department— Tebmination of Jurisdiction.
The issuance of a patent, or such other act as passes the légal title
from the government, is the final act, and the expression and entry of
the final judgment, of the offleers of the Land Department, and marks
the termlnation of the jurlsdiction of thèse officers.
7. Same— Notice of Peoceedings in Land Depaetment.
The power of the Land Department to review its prior rulings, and to
cancel existing entries, while the légal title remains in the United States,
Is not unlimited or arbitrary, and can be exereised only af ter notice to
parties in interest and due opportunity for a full hearing.
8. Same— CoNVETANCB BY Entetman Pbiob to Patent— Rights Aoquired.
One who purchases from an entryman, on the faith of a final reeeipt
or patent certiflcate, before the issuance of a patent, takes only the equity
of his vendor, subject to the authority of the Land Department to cancel
the entry, while the légal title remains in the United States, if it is found
that the entry is based upon an error of law or a clear misapprehension
of the facts, which, if not corrected, will lead to the transfer of the
government's title to one not entitled to it.
9. Same— Décision of Land Department as to Mattees of Faot Conclusive
IN COLLATEEAL PeOCEEDING.
The Land Department being a spécial tribunal to which Congress bas
confided the administration of the public land laws, the final judgment
of that department as to matters of fact properly determinable by it is
conclusive, when brought to notice in a collatéral proceeding.
10. Same— Effect of State Stattjte.
A State statute, purporting to regulate the effect of final receipts issued
by the Land Department of the United States, cannot restrict the au-
thority of the offleers of that department in the disposition of the public
lands, or withhold from the grantees of the United States any of the
incidents of the transfer of the government title.
11. Same — Application of Docteine of Relation.
The doctrine of relation is applicable to public land transactions, and,
wbere necessary to give efCect to the intent of the statute or to eut ofC
Intervening claimants, the patent is deemed to relate back to the initia-
tory act.
12. Same— Homestead Patentée— Right to Recovee fob Timbee Cut afteb
Initiation of Claim and befoee Issuance of Patent.
A patent issued under the homestead laws relates back to the initia-
tion of the claim, and gives the patentée the right to recover the value
of timber wrongfully eut and removed from the land after the initiation
of his claim, as established by the patent proceedlngs, and prior to the
issuance of the patent.
In Error to the Circuit Court of the United States for the District of
Minnesota.
This action was brought in thé Circuit Court of the United States for
the District of Minnesota, Fifth Division, December 29, 1898, by George E.
Desmond, a citizen of Wisconsin, against Hamilton M. Peyton and Levi A.
Barber, citizens of Minnesota, and résidents of the Fifth Division of the
Minnesota District. The complaint alleged that the plaintiff made homestead
settlement in 1890 upon a stated quarter section of public land in Wisconsin,
containing merchantable pine timber aggregating 3,600,000 feet, board meas-
ure ; that continuously thereafter he resided upon and occupied the land, and
obtained a United States patent therefor May 16, 1898, by full and regular
compliance with the homestead law ; that in the winter of 1893 and 1894,
If 11. See Public Lands, vol. 41, Cent. Dig. § 315.
PETTON V. DESMOND. 8
whlle he was In possession of the land under his homestead clalm, the défend-
ants "wrongfuUy and unlawfully and forcibly entered upon" the land, and eut
therefrom ail the pine timber ; that they thereafter carried off and removed
ail of this timber, and sawed the same Into lumber, and thereafter, and before
the Issuance of the patent to plalntlfif, sold and dlsposed of the lumber ; tbat
the acts of the défendants were done and performed wlth full knowledge of
the rights of the plalntiflC to the timber, and agalnst bis protest; that the
value of the timber prlor to the cutting of the trees was $4 per thousand feet,
board measure, and after being sawed into lumber was $12 per thousand feet,
board measure. Judgment was prayed for $43,200, the value of the lumber,
wlth Interest. The case was soon bronght to issue, but a trial was not had
until October, 1902, when a verdict was returned for plaintlff in the sum of
$9,425, with interest, for which judgment was given agalnst défendants. No
objection was made to the jurisdiction until immediately preceding the trial,
when défendants moved that the action be dismlssed for the reason, as then
asserted by them, that It was one for trespass to realty in Wisconsin, and
was therefore local, and not withln the jurisdiction of the court below. The
action upon thls motion was as follows :
"Mr. O'Brien [for plaintlff] : * • * This action Is brought to recover
the value of the timber eut and carried away from the land. It Is not, under
the statutes of Minnesota, nor under the practice of tbis state, an action of
trespass. It is an action in trover, pure and simple ; and the measure of dam-
ages hère is the value of the timber when eut from thé land, and not the injury
to the land. The resulting injury to the land in this case is not alleged as a
matter of damage, nor would the court permit testimony to be Introduced to
show it. It Is really an action of trover, because the damages sought to be
recovered is the value of the property when severed from the land. * * *
"Mr. Hayden [for défendants] : I will concède that they could bave made
a transltory action out of this matter, by using the same facts, if they had
seen flt to bring their action in trover Instead of In trespass.
"The Court: I think I understand your position fuUy. It Is not a mat-
ter of words, but it is a matter of the substantive facts, constituting the plain-
tiff's right to recover. He seeks to recover in this case — the complaint leaves
no doubt that he so seeks to recover — the value of the timber at the latest
stage when it can be traced into your hands, to wlt, the value of the lumber.
He does not seek to recover damages for the depleted value of the land, whlch
is the essential feature of a suit in trespass. The motion is denied."
Other rulings at the trial were to the efCect that the title obtained by plain-
tlff, by his compliance with the homestead law, and by the issuance to him
of the patent for the land, related back so as to enable him to maintain this
action.
The évidence showed that plaintlff and one Benjamin F. Judd settled upon
the land prior to the passage of the land grant forfeiture act of September
29, 1890, c. 1040, § 2, 26 Stat 496 [U. S. Comp. St. 1901, p. 1599], under which
the land was restored to the public domain ; that each claimed to bave settled
with a View to obtaining title under the homestead laws of the United States t
that each claimed to be the prior settler, and each presented in due time at
the local iand office an application to make homestead entry, but the applica-
tion of Judd, being presented flrst, was allowed by the local land offlcers, and
that of the plaintlff rejected ; that a contest, based upon plaintiff's claim of
prior settlement, was then commenced in the local land office by plaintlfiC
agalnst Judd's entry, the proceedings in which resulted in a décision by the
Secretary of the Interior agalnst the plaintlff, January 7, 1893; that Judd
on July 17, 1893, eommuted his homestead entry, and obtained a patent cer-
tlficate, but no patent was ever issued to him; that plaintlff on October 9,
1893, or possibly when Judd submitted final proof upon his entry, instituted
in the local land office further contest proceedings agalnst Judd's entry, which
resulted in a décision by the Secretary of the Interior May 23, 1896 (Desmond
V. Judd, 22 Land Dec. Dep. Int. 619), declaring that Judd had not tn good falth
maintained his résidence on the land as required by the homestead law, and
dlrectlng the cancellatlon of his entry ; that, following this décision, plaintiffl
made final homestead entry of the land, under the statute requiring flve years'
résidence, and under that entry obtained a United States patent May 16, 1898 ;
é 129 FEDERAL REPORTER.
that In the meantîme, on October 11, 1893, the lands were conveyed by Judd
to défendants; that défendants had knowledge of, and participated in, the
cpntest proeeedings In the Land Department which resulted In the cancella-
tion of Judd's entry; and that the cutting and conversion of ihe timber by
défendants occurred in the winter of 1893 and 1894, while the contest pro-
eeedings last named were pending.
Arthur H. Crassweller (Frank Crassweller, on the brief), for plain-
tiffs in error.
C. D. O'Brien (Thos. D. O'Brien and P. H. Seymour, on the brief),
for défendant in error.
Before SANBORN, THAYER. and VAN DEVAInITER, Circuit
Judges.
VAN DEVANTER, Circuit Judge, after stating the case as above,
dehvered the opinion of the court.
By the common law of England, an action for the recovery of dam-
ages for in jury to land is local, and can be brought only where the land
is situated. This is the law in most of the states of the Union, i
Chitty, PI. 281 1 Shipman, Com. L. PI. (2d Ed.) 201, 383; Cooley on
Torts, 471; Livingston v. Jefïerson, 15 Fed. Cas. 660, No. 8,411;
McKenna v. Fisk, i How. 241, 11 L. Ed. 117; Ellenwood v. Marietta
Chair Co., 158 U. S. 105, 15 Sup. Ct. 771, 39 L. Ed. 913. The opéra-
tion of this common-law rule has been much restricted by législation in
England (British South Africa Co. v. Companhia de Mocambique
[1893] App. Cas. 602) and in some of the states (15 Fed. Cas. 665,
note; Genin v. Grier, 10 Ohio, 209, 214). There are other states in
which the rule never prevailed. Holmes v. Barclay, 4 La. Ann. 63.
The matter is essentially one of state policy or local law. As was said
by Mr. Justice Gray in Huntington v. Attrill, 146 U. S. 657, 669, 13
Sup. Ct. 224, 36 L. Ed. II 23 :
"Whether actions to recover pecuniary damages for trespasses to real estate
♦ * * are purely local, or may be brought abroad, dépends upon the ques-
tion whether they are viewed as relating to the real estate, or only as afford-
ing a Personal remedy. * • ♦ And whether an action for trespass to land
in one state can be brought in another state dépends on the view which the
latter state takes of the nature of the action."
In Minnesota an action for pecuniary damages for trespass to real
estate in another state is viewed, not as. relating to the real estate, but
only as affording a personal remedy. It is there deemed to be transitory
in nature, and not local. In Little v. Chicago, etc., Railway Co., 65
Minn. 48, 67 N. W. 846, 33 L. R. A. 423, 60 Am. St. Rep. 421, the
Suprême Court of that state, in sustaining the jurisdiction of the courts
of the state over an action brought to recover damages for injuries to
real estate situated in Wisconsin, said :
"The réparation Is purely personal, and for damages. Such an action la
purely personal, and in no sensé real."
By the existing judiciary act (Act Aug. 13, 1888, c. 866, § i, 25
Stat. 433 [U. S. Comp. St. 1901, p. 508]) it is declared:
"That the Circuit Courts of the United States shall hâve original cognl-
zance, concurrent with the courts of the several states, of ail sults of a civil
nature, at common law or in equity, where the matter in dispute exceeds, ex-
clusive of interest and costs, the sum or value of two thousand dollars and
PETTON V. DESMONO. 5
* * ♦ in which there shall be a eontroversy between cltizens of différent
States, * * * bnt wliere the jurlsdiction is founded only on the fact that
the action is between citizens of différent states, suit shall be brought only
in the district of the résidence of either the plaintiff or the défendant.
* • *"
This action présents a eontroversy between citizens of différent states,
and was brought in the district and division of the résidence of the
défendants. It is of a civil nature, is a common-law action, and the
matter in dispute exceeds, exclusive of interest and costs, the sum or
value of $2,000. Being also an action which is cognizable in the courts
of the State, as before shown, it is equally within the concurrent
cognizance of the Circuit Court of the United' States, within that state.
It was said by Mr. Justice Field in Gaines v. Fuentes, 92 U. S. 10, 18,
20, 23 L. Ed. 524, in referring to the jurisdiction of the fédéral courts
of suits at common law or in equity in which there is a eontroversy
between citizens of différent states:
"The Constitution imposes no limitation upon the class of cases involving
controversies between citizens of différent states to which the judicial power
of the United States may be extended, and Congress may therefore lawfully
provide for bringing, at the option of either of the parties, ali such controver-
sies within the jurisdiction of the fédéral judiciary. * • • There are no
separate equity courts in Louisiana, and suits for spécial relief of the nature
hère sought are not there designated suits in equity. But they are none the
less essentially such suits; and if, by the law obtaining in the state, cus-
tomary or statutory, they can be maintained in a state court, whatever désig-
nation that court may bear, we think they may be maintained by original
process in a fédéral court, where the parties are, on the one side, citizens of
Louisiana, and, on the other, citizens of other states."
Even if the action be regarded as one for thç recovery of damages
for injury to land, we think it was cognizable in the circuit court.
But we believe this is an action for the recovery of damages for the
conversion of personal property — one more in the nature of trespass
de bonis asportatis or trover than of trespass quare clausum fregit — and
that it is transitory, and not local, under the common-law distinction.
By the laws of Minnesota (sections 5131, 5228-5231, Gen. St. 1894), the
forms of actions existing at common law are abolished, and the fîrst
pleading or complaint by the plaintiff is required to contain a plain
and concise statement of the facts constituting his cause of action, and
a demand for the relief to which he supposes himself entitled. The
facts stated and the relief demanded, rather than the form of statement,
détermine the nature of the action. The facts hère stated and the relief
demanded show that the gravamen of the action is the conversion of the
lumber manufactured out of the trees, and that the purpose of the action
is to recover the value of the lumber. There is no direct statement of a
dépréciation in the value of the land by reason of the trespass, and there
is no attempt to dwell upon the injury to the land by stating that the re-
maining trees or undergrowth were injured, that roads were con-
structed through the land, or that the soil was disturbed in hauling
away the pine timber, or was incumbered with the limbs and tops of
the trees removed. This, and the fullness and particularity with
which the complaint states the manufacture of the severed trees
into lumber and their conversion, shows that the conversion is deemed
the principal thing, and that the trespass is stated only as illustrating
6 129 FEDERAL KEPOETER.
the character of tlie conversion, and as bearing upon plaintiff's right
to recover the value of the manufactured himber, which, as alleged, is
identical with the amount for which judgment is demanded. The fact
that the défendants did not question the nature of the action until at the
trial, almost four years after the action was commenced, and that then
the plaintifï promptly and decisively declared it to be one to recover
the value of the timber when severed from the land, and not damages
for any resulting injury to the land, requires that any doubt or uncer-
tainty as to the nature of the action arising from the fuUness of state-
ment in the complaint be resolved in favor of the jurisdiction ; the
case being one where, upon the facts stated, the plaintiff, in commencing
his action, could hâve made the trespass to the land the gravamen
thereof, or, waiving that, could haye relied upon the conversion. When
the timber was severed from the land it became personal property, but
the title to it was not changed. It remained the property of the owner
of the land, as before the severance, and he could hâve followed and
reclaimed his property into whatever jurisdiction it might hâve been
taken, or he could hâve maintained an action in the nature of trespass de
bonis asportatis for damages for its unlawful asportation, or he could
hâve maintained an action in the nature of trover for damages for its
conversion. United States v. Cook, 19 Wall. 501, 22 L,. Ed. 210; Schu-
lenberg v. Harriman, 21 Wall. 44, 64, 22 L,. Ed. 551 ; United States v.
Steenerson, i C. C. A. 552, 50 Fed. 504; McGonigle v. Atchison, 33
Kan. 726, 7 Pac. 550; Nelson v. Burt, 15 Mass. 204; Riley v. Boston
Water Power Ce, 11 Cush. 11 ; Farrant v. Thompson, 5 B. & Aid. 826 ;
Richardson v. York, 14 Me. 216; Moody v. Whitney, 34 Me. 563;
Whidden v. Seelye, 40 Me. 247, 255, 63 Am. Dec. 661; Bulkley v.
Dolbeare, 7 Conn. 232; Wadleigh v. Janvrin, 41 N. H. 503, 520, y y
Am. Dec. 780; Greeley v. Stillson, 27 Mich. 153; Tyson v. McGuineas,
25 Wis. 656, 659; Mooers v. Wait, 3 Wend. 104, 20 Am. Dec. 667;
Wright V. Guier, 9 Watts, 172, 36 Am. Dec. 108; Harlan v, Harlan,
15 Pa. 507, 53 Am. Dec. 612; Forsyth v. Wells, 41 Pa. 291, 80 Am.
Dec. 617. The rule for determining the character of the action is well
stated in 2 Waterman on Trespass, § 1102 :
"Although, as standing trees are part of the Inherltanee, and the severing
them from It Is deemed an Injury to the freehold, for which trespass quare
clausum fregit is the appropriate remedy, yet the party may waive that ground
of recovery, and daim the value of timber only thus severed and carried away.
In the one case the entering and breaking of the close Is the gist of the action ;
in the other, the taking and carrying away of the property. In the latter case
the action Is transitory, and not local."
This case is unlike Ellenwood v. Marietta Chair Co., 158 U. S. 105,
15 Sup. Ct. 771, 39 E. Ed. 913, relied upon by the plaintiffs in error,
because there the allégations of the pétition made a continuing trespass
upon the land, covering a period of more than 10 years, the principal
thing, and the conversion of the timber only incidental. The case of
Stone V. United States, 167 U. S. 178, 182, 17 Sup. Ct. 778, 42 L. Ed.
127, is more in point. There the pétition stated the ownership of the
lands by the plaintifif, and that the défendant "unlawfuUy, wrongfully,
and willfully eut from the said lands 77,441 trees." It then stated
with much particularity that the défendant thereafter manufactured the
trees into lumber and railroad ties and converted thèse to his own use,
PETTON T. DESMOND. 7
and, after stating the value of the trees when standing upon the land,
and the value of the manufactured products at the time of the conver-
sion, demanded judgment for the latter. After distinguishing the case
of Ellenwood v. Marietta Chair Co., Mr. Justice Harlan, speaking for
the court, said:
"In the présent case the pétition, It Is true, avers that the United States
was the owner of the lands from which the trees were eut, but the gravamen
of the action was the conversion of the lumber and the railroad ties manu-
factured out of such trees, and a judgment vras asked, not for the trespass,
but for the value of the Personal property so eonverted by the défendant The
description in the pétition of the lands and the averment of ownership in the
United States were intended to show the right of the government to claim the
value of the Personal property manufactured from the trees illegally taken
from its lands. Although the government's [defendant's] déniai of the [gov-
ernment's] ownership of the land made it necessary for it to prove its owner-
ship, the action, in its es^ential features, related to Personal property, was of
a transitory nature, and could be brought in any jurisdiction in which the
défendant could be found and served with process."
That case is so nearly identical with the présent one that the dé-
cision of the Suprême Court therein controls the détermination of the
question now under considération, and requires that this action be held
to be transitory and within the jurisdiction of the Circuit Court.
It is said that "the court charged the jury that the measure of dam-
ages was not the value of the logs taken, but their value as it ap-
peared in the tree," and because of this we are asked to déclare this
action local. This instruction was given at the request of the de-
fendants. If it properly states the rule for measuring the damages to
be awarded in an action for the conversion of personal property under
the circumstances shown at the trial (Wooden Ware Co. v. United
States, 105 U. S. 432, 27 L. Ed. 230; Forsyth v. Wells, 41 Pa. 291, 80
Am. Dec. 617; Gentry v. United States, 41 C. C. A. 185, loi Fed. 51 ;
United States v. Homestake Mining Co., 54 C. C, A. 303, 117 Fed. 481),
it is in harmony with the court's jurisdiction of the case ; and, if it states
the rule more favorable to the défendants than they were entitled to
ask, its only efïect has been to diminish the damages which otherwise
would hâve been awarded to the plaintif! — a matter which cannot be
invoked by the défendants to defeat the jurisdiction or otherwise. It
was correctly ruled at the beginning of the trial, and again at its close,
that the action was one for the conversion of personal property and not
for trespass to land.
Does plaintiff's title under the patent issued May 16, 1898, upon his
homestead entry, relate back to a time anterior to the cutting of the
timber by the défendants in the winter of 1893 and 1894, and entitle
him to maintain this action? The solution of this question dépends
upon the effect to be given in this action to the proceedings in the Land
Department of the United States upon the adverse claims of the plaintiff
and Judd. The land covered by the patent issued to the plaintiff,
while formerly within a land grant made in aid of the construction of
a railroad, was restored to the public domain under the act of September
29, 1890, c. 1040, § 2, 26 Stat. 496 [U. S. Comp. St. 1901, p. 1599], with
a direction that actual settlers in good faith at the date of the act should
hâve a préférence right of entry, and should "be regarded as such actual
settlers from the date of actual settlement or occupation." Proceedings
8 129 FEDERAL REPORTER.
to acquire the tîtle to this land, instituted and condticted in the Land
Department, with due notice to the parties in interest, and with oppor-
tunity for full hearing, resulted in the issuance of a patent conveying
the government's title to the plaintiff. During the pendency of thèse
proceedings, while the légal title was yet in the United States, and
with notice of plaintiff's claim, the défendants purchased the land from
Judd, eut and removed therefrom the timber, and sold the lumber into
which it was sawed by them. In doing this, the défendants relied upon
a ruling of the land officers which declared Judd's claim to be the su-
perior one, and under which he had submitted proof of compliance with
the homestead law, and had obtained a certificate declaring that he was
entitled to a patent. But this ruling and the issuance of this certificate
were not in themselves final acts, and, no patent being issued thereon,
they never became final. The rulings and acts of the officers of the
Land Department of the United States, made and donc in the course of
proceedings to obtain the title to public land before the issuance of a
patent, are interlocutory ; and, "until the matter is closed by final
action, the proceedings of an officer of a department are as much open
to review or reversai by himself or his successor as are the interlocutory
decrees of a court open to review upon the final hearing." New Or-
léans V. Paine, 147 U. S. 261, 266, 13 Sup. Ct. 303, 37 L. Ed. 162. The
issuance of a patent, or such other act as passes the légal title from the
government, is the final act, and is the expression and entry of the final
judgment of the officers of the L,and Department; and this is the act
that marks thc'termination of the jurisdiction of thèse officers and the
beginning of the jurisdiction of the courts. Moore v. Robbins, 96 U. S.
530, 533, 24 L. Ed. 848 ; United States v. Schurz, 102 U. S. 378, 396,
401, 402, 26 L,. Ed. 167; Smelting Co. v. Kemp, 104 U. S. 636, 640, 26
L. Éd. 875 ; Michigan Land & Lumber Co. v. Rust, 168 U. S. 589, 592,
18 Sup. Ct. 208, 42 L. Ed. 591 ; Brown v. Hitchcock, 173 U. S. 473, 19
Sup. Ct. 485, 43 L. Ed. 772; Bockfinger v. Poster, 190 U. S. 116, 23
Sup. Ct. 836, 47 L. Ed. 975. "The true rule, drawn from an examina-
tion of ail of the authorities, is that the jurisdiction of the Land Depart-
ment ceases where the jurisdiction of the courts commences, viz., vv'hen
the légal title passes, and that there is no hiatus between the termination
of the one and the beginning of the other. Under this rule the land
will always be within a jurisdiction which can administer the lav/, and
protect.both public and private rights" involved in proceedings for the
acquisition of its title. Parcher v. Gillen, 26 Land Dec. 34, 42. So long
as the légal title remains in the United States, the land laws are in pro-
cess of administration. Michigan Land & Lumber Co. v. Rust, supra ;
Beley v, Naphtaly, 169 U. S. 353, 364. 18 Sup. Ct. 354, 42 L. Ed. 775 ;
Brown v. Hitchcock, supra. And the extent, character, and validity
of rights claimed under those laws, and of entries made thereunder, are
subject to inquiry, examination, and détermination in the Land Depart-
ment. See authorities supra, and Orchard v. Alexander, 157 U. S.
372, 15 Sup. Ct. 635, 39 L. Ed. j^iT^ Hawley v. Diller, 178 U. S. 476,
488, 490, 20 Sup. Ct 986, 44 L. Ed. II 57; Cosmos Co. v. Gray Eagle
Oil Co., 190 U. S. 301, 309, 23 Sup. Ct. 692, 47 L. Ed. 1064. That
this is necessarily so is shown in the following statement of Mr. Secre-
tary Lamar (5 Land Dec. Dep. Int. 494), which received the approval
PETTON V. DESMOND. a
of the Suprême Court în Knight v. United States L'an'd Association, 142
U. S. 161, 178, 12 Sup. Ct. 258, 35 L. Ed. 974:
"For example, If, when a patent Is about to Issue, the secretary should dls-
cover a fatal defect in the proceedings, or that, by reason of some newly as-
certained fact, the patent, if issued, would hâve to be annulled, and that It
would be his duty to ask the Attorney General to Institute proceedings for its
annulment, It would hardly be seriously contended that the secretary might
not interfère and prevent the exécution of the patent He could not be obligea
to sit quietly and allow a proceeding to be eonsutumated, which It would be
immediately his duty to ask the Attorney General to take measures to annul."
But the power of the Land Department to review its prior rulings
and to cancel existing entries is not unlimited or arbitrary (Cornélius
V. Kessel, 128 U. S. 456, 9 Sup. Ct. 122, 32 L. Ed. 482), and can be exer-
cised only after notice to parties in interest and due opportunity for a
full hearing (Brown v. Hitchcock, 173 U. S. 478, 19 Sup. Ct. 485. 43
L. Ed. 772 ; Guaranty Savings Bank v. Bladow, 176 U. S. 448, 453, 20
Sup. Ct. 425, 44 L. Ed. 540; Hawley v. Diller, 178 U. S. 489, 20 Sup.
Ct. 986, 44 E. Ed. 1157; Thayer v. Spratt, 189 U. S. 346, 351, 23 Sup.
Ct. 576, 47 L. Ed. 845). One who purchases of an entryman before the
issuance of a patent obtains no greater right or estate than is possessed
by the entryman, and acquires at the most a right or équitable estate,
which is subject to examination in the Land Department while the title
remains in the government. In the absence of a statute providing
otherwise, he is chargeable with knowledge of the state of the title which
he buys, holds it subject to any equities which could be asserted against
it in the hands of the vendor, and takes the risk of losing it if it is
subsequently shown that the entry is based upon an error of law or a
clear misapprehension of the facts, which, if not corrected, will lead to
the transfer of the government's title to one not entitled to it. Hawley
V. Diller, 178 U. S. 485-488, 20 Sup. Ct. 986, 44 E. Ed. 1157; Guar-
anty Savings Bank v. Bladow, 176 U. S. 454, 20 Sup. Ct. 425, 44 L. Ed.
540; Thayer v. Spratt, 189 U. S. 352, 23 Sup. Ct. 576, 47 L. Ed. 845.
The Land Department being a spécial tribunal to which Congress has
confided the administration and exécution of the laws for the disposition
of the public lands, the final judgment of the officers of that depart-
ment as to matters of fact properly determinable by them is conclusive,
when brought to notice in a collatéral proceeding, such as this is, and
is unassailable, except by a direct proceeding for its correction or annul-
ment. Johnson v. Towsley, 13 Wall. 72, 20 L. Ed. 485 ; Shepley v.
Cowan, 91 U. S. 330, 340, 23 L. Ed. 424 ; Quinby v. Conlan, 104 U. S.
420, 26 L. Ed. 800 ; Steel v. Smelting Co., 106 U. S. 447, i Sup. Ct.
389, 27 E. Ed. 226; Moss V. Dowman, 176 U. S. 413, 20 Sup. Ct. 429,
44 L. Ed. 526; Calhoun, etc., Co. v. Ajax, etc., Co., 182 U. S. 499, 510,
21 Sup. Ct. 885, 45 E. Ed. 1200; De Cambra v. Rogers, 189 U. S. 119,
23 Sup. Ct. 519, 47 L. Ed. 734; Gertgens v. O'Connor, 191 U. S. 237,
24 Sup. Ct. 95, 48 E. Ed. 164 ; James v. Germania Iron Co., 46 C. C.
A. 476, 107 Fed. 597; Uinta Tunnel, etc., Co. v. Creede, etc., Co., 57
C. C. A. 200, 119 Fed. 164. As was said by Mr. Justice Field in
Smelting Co. v. Kemp, 104 U. S. 636, 640, 26 L. Ed. 875 :
"The exécution and record of the patent are the final acta of the officers
of the government for the transfer of its title, and, as they can be lawfully
performed only after certain steps hâve been taken, that instrument, duly
10 129 FEDERAL EEPORTER.
signed, countersigned, and sealed, not merely opérâtes to pass the title, but
is in the nature of an officiai déclaration by that brancb of the government
to which the aliénation of the public lands, under the law, is intrusted, that
ail the requirements preliminary to its issue hâve been complied with. The
presumptions thus attending it are not open to rebuttal in an action at law."
By the application of thèse established rules to the facts of this case, it
is seen that the proceedings in the Land Department, which terminated
with the issuance of the patent to the plaintifï, were within the jurisdic-
tion of that department, and by them it is conclusively determined, sq
far as this action is concerned, that the plaintiff, by full compliance
with the requirements of the homestead law, entitled himself to the pat-
ent; that he lawfully settled upon the land, and lawfully maintained
his résidence thereon for a continuons period of at least five years be-
fore the patent was issued, thèse being conditions précèdent to obtain-
ing a patent under the statutes (section 2291, Rev. St., Act May 14, 1880,
c. 89, § 3, 21 Stat. 140, 141, U. S. Comp. St. 1901, pp. 1390, 1393) under
which this patent was issued ; that Judd never entitled himself to a pat-
ent ; and that his entry was properly canceled, because wrongfully ob-
tained. The défendants obtained no right to the land or to the timber
by their purchase from Judd. His entry and his conveyance to the de-
fendants hâve no bearing whatever upon this action, save as they indi-
cate whether the défendants appropriated the timber under such an
honest belief in a légal right so to do as affects or limits the damages
which otherwise would be recoverable from them.
After the plaintiff, in the course of asserting a claim adverse to
Judd, had secured the cancellation of the latter's entry and the re-
jection of the defendant's claim thereunder, it was entirely compétent
for the land ofïicers to give full effect to plaintiff's résidence upon the
iand during the existence of that entry, if such résidence was actual,
and was begun and maintained in good faith, with a view to obtaining
title under the homestead law. Counsel for the défendants call atten-
tion to a statute of Wisconsin (section 4165, Rev. St. 1898) purporting
to give certain probative force to a final receipt or patent certificate is-
sued under the land laws of the United States, and argue from this
that the plaintiff was a mère trespasser during the existence of Judd's
entry, and that his résidence upon the land during that time could not
be made the basis of any right, légal or équitable. There are two suf-
ficient answers to this contention. One is that, before the plaintiff's
résidence during that period was made the basis of issuing a patent
to him, the receipt or certificate issued to Judd had been canceled by
compétent authority because it was wrongfully obtained, and by that
cancellation had been deprived of ail probative force. Guaranty Sav-
ings Bank v. Bladow ; Thayer v. Spratt, supra. The other is that a
State cannot by its législation restrict or affect the authority of the of-
ficers of the Land Department in the disposition of the public lands of
the United States, or withhold from the grantees of the United States
any of the incidents of the transfer of the government's title. Bagnell
v. Broderick, 13 Pet. 436, 450, 10 L. Ed. 235 ; Wilcox v. McConnel,
13 Pet. 498, 516, 10 L. Ed. 264; Irvine v. Marshall, 20 How. 558, 564,
15 L. Ed. 994; Gibson v. Chouteau, 13 Wall. 92, 99, 20 L,. Ed. 534;
Langdon v. Sherwood, 124 U. S. 74, 84, 8 Sup. Ct. 429, 31 L. Ed. 344;
Paige v. Peters, 70 Wis. 182, 35 N. W. 329, 5 Am. St. Rep. 156.
PETTON V, DESMOND, 11
From what has been said, it is clear that tlie défendants are liab.te to
the plaintiff or to the United States for the conversion of the timber,
and that their only lawful concern is that they be made to respond only
to the rightful claimant. Their liability is as certain as if the cutting
had been a willful trespass; and the measnre of the damages for the
conversion is the same, whether the right of recovery is in the plaintiff
or in the United States. We therefore return to the question whether
the plaintiff's title under the patent relates back to a time anterior
to the cutting of the timber, and entitles him to recover for its conver-
sion. It will be observed that the question is not whether the doctrine
of relation can be invoked to create a liability where otherwise there is
none, or to defeat or impair an intervening right or equity of an inno-
cent third person, or can be invoked by one whose default and lâches
will make its application operate unjustly upon another (Evans v. Du-
rango Land & Coal Co., 25 C. C. A. 531, 537, 80 Fed. 433, 438), or by
a stranger to the title (Gibson v. Chouteau, 13 Wall. 92, ici, 20 L. Ed.
534), or can be invoked to avoid a liability otherwise existing (United
States V. Bail [C. C] 31 Fed. 667; United States v. Freyberg [C. C]
32 Fed. 195; United States v. Norris [C. C] 41 Fed. 424; Teller v.
United States, 54 C. C. A. 349, 117 Fed. 577), or to make lawful an act
which was criminal when donc (Teller v. United States, 51 C. C. A.
230, 113 Fed. 273; Teller v. United States, 54 C. C. A. 349, 352, 117
Fed. 577, 580). Nor is the question whether a homestead claimant
may, in advance of perfecting his claim into a full légal or équitable
title, maintain an action against another for the value of timber severed
from the land, which the homestead claimant could not hâve lawfully
severed for purposes of sale. Shiver v. United States, 159 U. S. 491,
16 Sup. Ct. 54, 40 E. Ed. 231. Thèse several matters, whether deter-
mined or undetermined by existing décisions, are apart from the matter
now under considération, save as the principles controlling it may be
applicable to them. While the doctrine of relation is of équitable
origin, it has a well-recognized application to proceedings at law. By
it "is meant that principle by which an act done at one time is consid-
ered, by a fiction of law, to hâve been done at some antécédent period.
It is usually applied where several proceedings are essential to complète
a particular transaction, such as a conveyance or deed. The last pro-
ceeding which consummates the conveyance is held, for certain pur-
poses, to take effect by relation as of the day when the first proceeding
was had." Gibson v. Chouteau, 13 Wall. 92, 100, 20 E. Ed. 534. Its
purpose is to promote Justice and to give effect to the lawful intention of
the parties. Its most fréquent application is to conveyances of real
property or interests therein in pursuance of an antécédent contract,
when, to give effect to the intention of the parties, or to protect pur-
chasers from the vendee pending the fulfillment of the contract, the title
is considered as having vested in the grantee not merely from the date
of the actual conveyance, but from the time when the contract was
made. The doctrine is also applied to public land transactions, when, to
give effect to the intent of the statute or to eut off intervening claim-
ants, the patent is deemed to relate back to the initiatory act. Ross v.
Barland, i Pet. 655, 664, 7 E. Ed. 302 ; Eandes v. Brant, ro How. 348,
372, 13 E. Ed. 449; Lessee of French v. Spencer, 21 How. 228, 240, 16
12 129 FEDERAL EEPOKTER.
L. Ed. 97; Beard v. Federy, 3 Wall. 478, 491, 18 L. Ed. 88; Grisar
V. McDowell, 6 Wall. 363, 380, 18 L. Ed. 863 ; Stark v. Starr, 6 Wall.
402, 418, 18 h. Ed. 925; Lynch v. Bernai, 9 Wall. 315, 325, 19 L. Ed.
714; Shepley v. Cowan, 91 U. S. 330, 337, 340, 23 L. Ed. 424; Weeks
V. Bridgman, 159 U. S. 541, 546, 16 Sup. Ct. y2, 40 L. Ed. 253 ; United
States V. Loughrey, 172 U. S. 206, 218, 219, 225-231, 19 Sup. Ct. 153,
43 L. Ed. 420. Thus it was said in Shepley v. Cowan :
"The party who takes the Initlatory step In such cases, If followed up to
patent, is deemed to hâve acqulred the better right, as agalnst otliera, to the
premises. The patent which Is afterwards issued relates back to the date
of the initlatory aet, and cuts off ail intervening claimants. Thus the patent
upon a State sélection takes effect as of the time when the sélection is made
and reported to the land office, and the patent upon a pre-emption settlement
takes effect from the time of the settlement, as disclosed in the declaratory
statement or proofs of the settler to the register of the local land office."
Other applications of the doctrine will be found in Cothrin v. Faber,
68 Cal. 39, 4 Pac. 940, 8 Pac. 599; Jackson v. Bull, i Johns. Cas. 81 ;
Id., 2 Caines, Cas. 301 ; Jackson v. Ramsay, 3 Cow. 75, 15 Am. Dec.
242; Heath v. Ross, 12 Johns. 146; St. Onge v. Day, 11 Colo. 368,
18 Pac. 278 ; Musser v. McRae, 44 Minn. 343, 46 N. W. 673. It con-
clusively appears, as before shown, that the timber was severed from
the land after the initiation and during the maintenance of the plain-
tifï's homestead claim; in other words, while he had a conditional or
inchoate right to the land, which was capable of perfection through
compliance with the homestead law, and which in due course ripened
into a full légal and équitable title before the commencement of this
action. This conditional or inchoate right included an exclusive right
to the possession so long as the plaintiff should comply in good faith
with the requirements of the law controlling homestead claims, and in-
cluded a further right to eam and receive the title. This right to the
possession and to earn and receive the title extended to everything
which was part of the land — timber as well as soil. The severance of
the timber from the soil was a violation or infraction of the plaintifï's
right to the possession, and of his right to earn and receive the title.
It was an injury to both. It may be that the conditional or inchoate
right of a homestead claimant is subject to a power in Congress to
terminate it in whole or in part — as to the land or only as to the timber
— at any time before it is perfected into a vested équitable estate by full
compliance with the requirements of the law, but it is not terminable
or subject to impairment by third persons. Unquestionably, in the ab-
sence of the exercise of such a power by Congress — and its exercise hère
is not claimed — the plaintifif was entitled, upon perfecting his home-
stead claim, to receive a conveyance of the land in the condition in which
it was when his claim was initiated. The défendants made that im-
possible. When the patent was issued, the timber was gone. In its
stead there existed a right of action for its conversion. Does not the
promotion of justice — the due protection of the plaintiff's rights — re-
quire that his patent be held to relate to the date of his initlatory act,
and thereby to invest him with that which now takes the place of the
timber? We think it does. The terms of the statute are such that the
présence of valuable timber on pubHc land does not exclude it from
homestead settlement or entry. It is therefore probable and reasonable
INTEENATIOXAL NAT. CO. V. SEA INS. 00. 13
that tîie plaintiff, in selecting thîs tract from among others, was îti-
fluenced by the value given to it by its timber. It was the intention of
the government, by the homestead law, and was the intention of the
plaintiff, in accepting the provisions of that law, that, upon his compli-
ance with its requirements, he should be entitled to the land, with what-
ever advantages were incident to its natural condition and character,
whether due to the fertility of its soil, or to its growth of timber. But
for the act of the défendants, that intention would hâve been effectuated,
and the timber would hâve passed to the plaintiff by the patent, as did
the soil from which the timber was severed. It does not comport with
the spirit of the homestead law to say that, after the initiation and
partial perfection of a homestead claim, some third person may rob
the land of a substantial part of that which gives it value, and that, on
full compliance with the law by the homestead claimant, the government
may convey to him that which is left of the land, and may recover
from the wrongdoer, and retain to its own use, the value of that which
has been unlawfully taken from the land through no fault or wrongfui
act of the homestead claimant. The law does not contemplate anything
so unreasonable. The principles underlying and supporting the doc-
trine of relation are such that it may be as readily invoked to remedy or
correct a loss such as is hère disclosed, occurring while the claim was
being perfected, as to prevent the loss of the entire right or title through
an intervening claim. The plaintiff's title under the patent relates
back to a time prior to the severance and conversion of the timber by
the défendants, which was after the initiation of his claim, and entitles
him to maintain this action.
The judgment is affirmed.
INTERNATIONAL NAV. CO. v. SEA INS. CO., Limited.
(Circuit Court of Appeals, Second Circuit. Marcli 8, 1904)
No. 113.
1. Marine Insurance— Salvagb Expenses— Law Governing Appoetionmbnt.
An English valued policy on a stiip eontained ttie provision: "General
average salvage, and spécial charges as per foreign custom, payable ac-
eording to foreign statements, • • • or per rules of port of discharge,
♦ * * at the option of assured." Held, that under such provision the
law of New York, the port of discharge, governed as to the amount payable
by the insurer on account of salvage arising from stranding, there ad-
justed, and the insured was entitled to recover on the policy, in accordance
with the law of the port, a sum which bears the same ratio to the entire
salvage he was compelled to pay as the amount of the policy bears to the
policy value of the ship, although the award was made on a higher valua-
tion, and not, as by the law of England, only such part of said sum as
bears the same ratio to the whole as the policy valuation bears to the
valuation on which the adjustment was made.
Appeal from the District Court of the United States for the Eastem
District of New York.
This cause comes hère on appeal from a decree of the District Court,
Eastern District of New York, in favor of the libelant, owner of the
steamer St. Paul, claiming loss under a poHcy of marine insurance.
The opinion of the District Court is found in 124 Fed. 93.
14 129 FEDERAL EEPOETBR.
Wilhelmus Mynderse, for appellant.
Henry G. Ward, for appellee.
Before LACOMBE, TOWNSEND, and COXE, Circuit Judges.
PER CURIAM. The St. Paul, on a voyage from Southampton,
stranded on the New Jersey coast, and salvage services were rendered
to vessel and cargo, as the resuit of which the vessel reached New
York, having sustained physical damage involving serions repairs.
The salvors took légal proceedings against vessel and cargo, and an
award was made separately against each. The St. Paul (D. C.) 82
Fed. 104, aiïirmed by this court 86 Fed. 340, 30 C. C. A. 70. The
award against the vessel (exclusive of the share to be borne by the
freight) was $129,914.57. A statement was made up by Johnson &
Higgins, average adjusters, in which the salvage award against the
steamer was claimed as a particular average, being added to the cost
of repairs to the ship caused by stranding; the total amount being
$248,377.28. This statement was presented to the underwriters on the
St. Paul, both in this country and in England. Some of the American
underwriters refused payment of the claim under the said statement.
Suit was brought in the District Court, Southern District of New
York, and libelant l'ecovered. International Navigation Co. v. Atlantic
Mutual Ins. Co. (D. C.) 100 Fed. 304. That décision was affirmed by
this court. 108 Fed. 987, 48 C. C. A. 181.
The respondent hère is a British corporation, and issued the policy
of Insurance in I,ondon. The vessel was valued in ail her policies at
£275,000, and she was insured for the whole of that amount ; the re-
spondent underwriting £4,500. The salvage award was made on the
basis of actual value in her salved condition, $2,000,000 (£410,256) ;
and her value in sound condition was $2,100,000 (£441,025). The libel-
ant claimed to recover ^Vstbo of the $248,377.28. The insurers con-
tend that their liability for the salvage award is restricted to *''/2tbo
of ^'^"""AiioaB thereof. The conceded amount was paid, and this suit
was brought to recover the différence. The question in dispute is
whether, under a valued policy, where salvage has been awarded on
a higher valuation, the insured can recover ratably from the several
underwriters the salvage he has had to pay, or only such part of it
as is in the same proportion to the whole salvage paid as the total policy
valuation is to the valuation on which salvage was awarded.
No question seems to be raised as to the amount to be paid for re-
pairs to the vessel. It will be perceived that the question presented is
a single one, and the concessions of the respective parties hâve greatly
simplified it. The respondent's method of calculation is in accord with
English law. The libelant's is in accord with American law. For
brevity of statement, the one may be called "nominal proportion"; the
other, "actual proportion."
The policy is a British contract, and is to be interpreted accordingly.
It is, however, "compétent to an underwriter on an English policy to
stipulate, if he think fit, that such policy shall be construed and applied,
in whole or in part, according to the law of any foreign state, as if
it had been made in and by a subject of the foreign state." Gréer v.
INTERNATIONAL NAV. CO, V. SEA INS. CO. 15
Poole, 5 Q. B. D. 272. The policy of the défendant contaîns tlie fol-
lowing provision :
"General average, salvage and spécial charges as per foreign custom, pay-
able aecording to foreign statements or per York-Antwerp rules, or York-Ant-
werp rules of 1S90, or per niles of port of discliarge, if in accordance with
contract of affreightment at the option of assured."
Precisely Ihis form of words is not found in anv of the cases cited
upon the briefs, but it seems to us reasonably easy of interprétation.
As was stated before, without some such clause, the assured on a
valued policy was liable to pay in some foreign port gênerai average
charges at one rate, and when lie came to his underwriter for indemnity
would be paid at a différent rate, receiving less than he had paid, and
not securing complète indemnity. The same rule applied to claims
for salvage loss as to claims for gênerai average loss. Steamship
Balmoral Company v. Marten, L. R. App. Cases (1902) 511. Naturally
the assured sought to. correct this by some spécial provision which the
underwriter might be willing to assent to. A provision quite f re-
quently adopted was, "General average aecording to foreign custom;"
also, "General average as per foreign statement." Such provisions
hâve been considered by British courts, and in each instance it was
held that the underwriter could not dispute thé adjustment as to the
propriety of particular items, or as to correctnèss of thé apportion-
ment, and was bound by the décision of the foreign average stater, or
by the custom of the foreign port, both as to fact and law on the sub-
ject of gênerai average. Mavro v. Océan Ins. Co., L. R. 9 C. P. 595 ;
The Mary Thomas, Prob. Div. (1894) 123; Harris v. Scaramanga, i
Asp. Mar. Cas. 344 ; De Hart v. Compania Anonima, 9 Asp. Mar. Cas.
345, affiirmed 8 Commercial Cases, 314. The lâst citation contains the
following: .
"The gênerai efifect of the mémorandum [to pay gênerai average as per for-
eign statement, if so made up] is to make the underwriters liable as to gên-
erai average for whatever the owners of the goods might be called upon to
pay on that account by the foreign statement of adjustment • * * If an
adjustment has to be effected in a foreign port, it is obviously convenient that
there should be a provision that in such a case the underwriter should stand
in the shoes of those primarily liable upon it."
In none of the cases cited was the proposition raised, as it is hère,
that, although the assured inight hâve paid gênerai average charges
on actual valuation, his claim for such loss should nevertheless be re-
adjusted by scaling it down to a "nominal proportion." It would cer-
tainly seem that the manifest object of the clause would be defeated
by so narrow an interprétation. "General average as per foreign cus-
tom" would be a déclaration not wholly lived up to, if foreign custom
made the assured pay on one basis, but the mémorandum clause allowed
him to collect only on another. No authority, British or other, is cited
which is persuasive to so narrow an interprétation of a clause obviously
intended to relieve the assured from the risk of meeting disaster with-
out being compelled himself to meet the added risk of the geographical
location of his ship when the loss was incurred and the port of safety
was reached. Indeed, it would seem that the avoidance of this geo-
graphical risk was the genesis of the clause.
16 129 FEDERAL KEPOEÏEK.
The phraseology of the clause in the policy now under considération
is broader than in the cases cited, for it submits to "foreign custom,"
whether there be an adjustment or not, "salvage and spécial charges."
We concur entirely with the District Judge in the conclusion that un-
der that clause the settlement ôf salvage losses under the policy must
be in conformity to the law of the country in which the assured pays
them.
The decree is affirmed, with interest and costs.
DICKINSON et al. v. SAUNDERS et al.
(Circuit Court of Appeals, First Circuit, April 13, 1904.)
No. 516.
1, FOEEIGN CORPOKATION— DeCBBE APPOINTING RecEIVERS CoNSTRUED.
A decree appolnting recelvers for a foreign corporation, and directing
that they continue to operate the property until otherwise directed, and
from the mbneys coming into thelr hands pay ail sums due to employés
and ail expenses of carrying on the business, eonstrued, under the cir-
cumstances, as requiring the receivers to pay from the proceeds of the
corporation's property ail claims for wages earned prior to their appoint-
ment, as well as wages earned thereafter.
2. Same—Peioeitt— Wages or Employés.
Where a fédéral court could hâve acqulred jurisdlction to appoint re-
ceivers for a foreign corporation only by consent of the parties, and no ob-
jection was made by any party to such appointment, or to a decree re-
quiring the receivers to pay from the proceeds of the corporation's prop-
erty ail sums due employés, together with ail the expenses of carrying
on the business, the receivers could not thereafter, under the circum-
stances of this case, refuse to pay in full claims for wages earned by
employés of the corporation prior to the receivers' appointment, none of
which exceeded $300 in amount, in préférence to other unsecured claims.
Appeal from the Circuit Court of the United States for the Dis-
trict of Massachusetts.
Guy Cunningham, for appellants.
Henry T. Lummus (Charles N. Barney, with hini on the brîef), for
appellees.
Before PUTNAM, Circuit Judge, and ALDRICH and BROWN.
District Judges.
PUTNAM, Circuit Judge. This appeal arose out of a bill in equity
filed in the Circuit Court for the District of Massachusetts on the 7th
day of August, 1902, by the Boston & Gloucester Steamboat Company
and others against the Cape Ann Granité Company, incorporated under
the law5 of Maine, but said to hâve a usual place of business at
Gloucester, in Massachusetts. The bill alleged that the Cape A""
Granité Company in March, 1894, executed a mortgage of its fran-
chises and ail its property to secure an issue of bonds, and that ail
the complainants were holders of portions thereof, either absolutely
or as collatéral security, and also of certain shares of capital stock-
DICKIXSON V. SATJXDERS. IT
that the mortgage was in default; that the défendant corporation
had an amount of property of varions kinds, and was largely in-
debted; that its property had been attached by various creditors;
that the corporation was wholly insolvent, and that it was likely that
a race of diligence wonld ensue between its différent creditors, ail
of which would resuit in a multiplicity of suits, and in dismember-
ment and sale of its property by piecemeal and at a sacrifice ; that
its Personal property, consisting principally of machinery and equip-
ment, was of great value as attached to and part of its plant, but of
little value when separated therefrom, and that the value of ail its
property consisted largely in its continued working opération as a
unit; and that it was necessary, for the protection of its bondholders
and creditors and for the préservation of its assets, that ail its prop-
erty within the jurisdiction of the court be taken into its judicial
custody by the appointment of a receiver. Thereupon the bill prayed
that the rights of the parties in interest might be ascertained and
protected; that the court would administer the entire property of
the corporation, and for such purposes would marshal its assets
and enforce the various rights, liens, and equities ; and that a re-
ceiver be appointed to take possession of ail the assets, with au-
thority to manage and préserve the same till the same should be
sold and the proceeds distributed.
Thus the bill looked not merely to a foreclosure of the mortgage
in which the complainants were interested, but to a winding up and
distribution of the assets of the corporation, and the conséquent
intervening control and management of its affairs, with the view of
making its assets of most available value. Thereupon, the same day
the bill was filed, the appellants were appointed interlocutory re-
ceivers as prayed by the bill, and were authorized to retain posses-
sion of ail the properties until sold, and to operate and continue
the business until otherwise directed, and from the moneys coming
into their hands to pay ail sums due to employés and ail expenses
of carrying on the business. No objection to thèse proceedings
seems to hâve been taken from any quarter, so that we hâve no
occasion to consider any question except that which is now ex-
pressly before us.
Subsequently to fîling the bill, on May i6, 1903, certain petition-
ers intervened, setting forth that they were "workmen and serv-
ants" employed by the défendant corporation during April, May,
June, July, and August, 1902; that they had clainis against it for
the various amounts stated in the schedule attached to the pétition,
as wages earned during the months specified for labor necessary to
its business from day to day; that the claims were contractée as
a part of current expenses in the ordinary course; that the receiv-
ers had sold and converted into cash a large amount of personal
property which was not covered by the mortgage in question; that
they had applied none of the same to the payment of the claims of
the petitioners, and had refused to do so ; and that it was likely that
the property and money remaining in their hands, if distributed
among ail the unsecured creditors, would be insufficient to pay in
fuU. Thereupon they prayed that their claims might be allowed as
129 F.— 2
18 129 FEDERAL REPORTER.
preferred, and hâve priority over ail other unsecured claims, and
that, so far as the petitioners were entitled to priority, the receivers
might be ordered to pay them.
The receivers put in an answer to this pétition, and objected to
the granting thereof. There is nothing in the record showing a di-
version of assets as alleged. With that exception, the case rests
on the substance of the pétition as we hâve given it. The court de-
creed that the debts of the petitioners should be allowed as pre-
ferred, and that the receivers should pay the same. From this de-
cree the receivers seasonably appealed.
It does not appear that the assets of the défendant corporation
hâve ever been disposed of under the form of a decree of distribu-
tion, but it is admitted that some of the property not covered by
the mortgage has been sold by the receivers and converted into
cash, which at the time of the filing of the intervening pétition was
in their hands. It also appears that thus the receivers hâve in their
hands a sum, not bound by the mortgage, sufficient to pay the pe-
titioners in full, but that such payments, if made, would leave almost
nothing for the other unsecured creditors. The claims allowed by
the court cover a period of something more than four months prior
to the appointment of the receivers, and the total of some of them
was in excess of $ioo, but none in excess of $300. The learned
judge of the Circuit Court filed no opinion, so that the grounds on
which he made his decree are not before us.
The record présents no equity in behalf of the intervening peti-
tioners, other than that they were workmen. The défense rests on
the ground that their claims diiifer in no way from any of the unse-
cured liabilities to which they ask to be preferred. The proposi-
tion is also made that the défendant is not a quasi public corpora-
tion, the continued opération of which is of gênerai interest. The
receivers maintain that the décisions of the Suprême Court allowing
priorities relate to corporations which owe duties to the public, on
which account, in ôrder that there may not be a cessation of the
performance thereof, they say spécial concessions hâve been made.
There hâve been numerous voluminous opinions of the Suprême
Court with référence to priorities involved in the administration of
the property of quasi public corporations like railroads, which it
would be laborious and unnecessary to digest and classify. A late
gênerai statement of them will be found in Southern Railway Com-
pany V. Carnegie Steel Company, 176 U. S. 257, 20 Sup. Ct. 347, 44
L,. Ed. 458. It is true that, so far as such corporations are con-
cerned, the court has said that, inasmuch as they owe duties to the pub-
lic, their mortgagees acquiring security thereon do it with the implied
équitable undertaking on their part that no summary action by them
shall interfère with the performance of such duties. Therefore it has
been said that if mortgagees, instead of rel3'ing upon their strictly
légal rights and légal remédies, see fit to go into equity, they must con-
sent to équitable terms in référence thereto. In the same way the
court has recognized another equity in behalf of indebtedness created
from hand to mouth in favor of laborers, mechanics, and dealers sup-
plying material for day to day opération, to the effect that, if mortga-
DICKINSON V. SAUNDEES. 19
gees, after a raiiroad corporation becomes insolvent, accept payment
of interest, and allow to be applied thereto moneys which ought to
hâve been used in disbursing the cost of the opération of the property,
another equity arises, by virtue of which what has thus been- taken
from the immédiate hand to mouth creditors shall be restored to them.
But the equity which is claimed hère is of an éntirely différent char-
acter. It is simply a question between différent classes of unsecured
creditors ; that is, between those who, on the one hand, are understood
to give crédit, and those who, on the other, furnish labor with no inten-
tion of crédit, but with the expectation of immediately being paid from
day to day eut of the accruing earnings of the property. Therefore
the questions arise whether there is such an equity, and, if yes, what
is its extent ? This equity, if it exists at ail, is, of course, appHcable to
ail classes of employers whose property cornes into the hands of chan-
cery for administration.
Some courts recognize this equity. Perhaps it never lias been put
better than in Jones v. Arena Publishing Company, 171 Mass. 22, 50
N. E. 15. The opinion in behalf of the majority of the court said at
pages 27 and 28, 171 Mass., and page 16, 50 N. E., as follows :
"The questions whether taxes and debts due to workmen for labor are en-
titled to priority may be considered together. The relief sought is merely the
gettlng in and the distribution of what are linown in equity as 'légal assets.'
In the course of the administration of assets, courts of equity follow the same
rules in regard to légal assets which are adopted by courts of law, and give
the same priority to the différent classes of creditors which is enjoyed at law :
thus maintaining a practlcal exposition of the maslm, '.a^quitas sequitur
legem.'
"It would be a plain injustice if a gênerai créditer, by resorting to equity
for the administration of his debtor's goods, merely for the reason that by the
aid of equity the amount to be divided would be larger, could gain a further
advantage by reducing to the level of common creditors workmen whose wages
would hâve priority if the assets were left to be administered at law, or could
thus place his own debts upon an equality with taxes which would hâve been
paid in full had not equity Interfered. The défendant corporation was sub-
jected to our insolvency ï&w by force of St. 1890, c. 321 ; and, if equity had not
corne in to conserve and distribute its légal assets, the wages of its workmen
and the taxes due from it would bave priority in the distribution of its assets
by the usual agencies of common law. Those agencies could not keep its busi-
ness going at the time when the bill was filed. For this reason only, the
creditors, merely to increase the amount of the fund, asked equity to inter-
fère in behalf of ail creditors alike. It would be unjust if that interférence
should be at the sole cost of the workmen and of the public, through depriving
claims for labor and taxes of the priority of payment which they would hâve
had if equity had not intervened."
At the time the decree appealed from was made there was an ex-
isting statute in Massachusetts, now found in Rev. Laws 1902, c. 150,
§ 29, as follows :
"The following claims shall, in the settlement of estâtes by receivers, be en-
titled to priority in the order named :
• ••****••
"Second. Wages to an amount of not more than one hundred dollars due to
an operative, clerk or servant for labor, either performed within one year last
preceding the appointment of the receiver or for the payment for which a suit,
which was commenced within one year after the performance of the labor, is
pending or was terminated within one year after said appointment."
20 129 FEDERAL REPORTEE
The bankruptcy act of July i, 1898, c. 541, § 64b, 30 Stat. 563 [U.
S. Comp. St. 1901, p. 3447], provides priority for wages due to work-
men, clerks, or servants, earned within three months before the date
of the" commencement of proceedings in bankruptcy, not to exceed
$300 to any claimant. Turning, therefore, either to the local statute,
or to what, for the fédéral courts, is the higher authority, a priority in
favor of creditors of the class of the interveners in this case is de-
clared as a rule of administration, not only for quasi public corpora-
tions, but for ail corporations, and in the fédéral statute for corpo-
rations and individuals. Although the statute of the state of Massa-
chusetts could not, of course, control proceedings in the fédéral courts,
and undoubtedly had no direct relation to receivers appointed by those
courts, and although it may be possible for the appellants to claim
that this particular corporation was not within the classes of corpora-
tions subject to proceedings under the bankruptcy statutes, yet each
législative System déclares a policy which a chancellor, in hunting
about for sorne analogy to guide the équitable administration of
his office, might lay hold of under some circumstances. While not
strictly bound by either, he might be justified, if his duty required
it, in taking into considération each or both in disposing of a question
like that before us.
Judicial discrétion, it is true, is subject to rules, and not arbitrary.
It must, of course, be governed by reasonable considérations, and is so
far from involving pure discrétion that it may be reviewed on appeal.
The présent case, however, is peculiar in such substantial respects that
it does not require that we should sharply détermine the questions sug-
gested ; and it affords little opportunity for our revising the action of
the Circuit Court, unless clearly unreasonable. The défendant cor-
poration having its habitat in Maine, the Circuit Court for the District
of Massachusetts had, according to vi^ell-settled rùles, no jurisdiction
over a bill of the character in question, unless by consent; and that
it took jurisdiction implies that it was by the consent, and, indeed, it
may be said at the request, of ail the parties to the proceeding. No one
intervened to object thereto. The statutes of the state of Maine, where
this corporation was created, provide précise and peculiar methods for
winding it up and distributing its assets, which neither contemplate nor
authorize a proceeding of the kind instituted in the Circuit Court.
Neither do the statutes of Massachusetts provide for proceedings of
this character with référence to foreign corporjitions. Neither was the
case framed to come within the eighth section of the act of March 3,
1875 (18 Stat. 472, c. 137), providing specially for the administration
of real or personal property within the district. The extent to which
the authorities hâve given fédéral courts jurisdiction in their own right
with référence to winding up corporations or marshaling their assets
is in instances where the state statutes provide for their dissolution,
and for équitable proceedings for that purpose, which, of course, may
be adopted by the fédéral courts, as in Terry v. Commercial Bank of
Alabama, 93 U. S. 454, 23 L. Ed. 620, and in Mellen v. MoHne Malléable
Iron Works, 131 U. S. 352, 9 Sup. Ct. 781, 33 L. Ed. 178, or in in-
stances of ordinary creditors' bills after judgment and exécution re-
turned nulla bona, like Central Trust Company v. McGeorge, 151 U.
DICKIN80N V. SAUNDEES. ^a
S. 12g, 14 Sup. Ct. 286, 38 L. Ed. 98, or in instances when called on
to collect and dispose of the assets of dissolved corporations, domes-
tic or foreign. The case, therefore, against the Cape Ann Granité
Company, as made in the Circuit Court, was purely of the parties' own
sélection, as well as was the tribunal itself.
But in this case the distinctive feature is that the decree appointing
the receivers contained the following direction which we hâve already
stated, namely: "From the moneys coming into their hands to pay
ail sums due to employés and ail expenses of carrying on said busi-
ness." That the expression "sums due to employés" means the very
sums in controversy hère, follows logically from the fact that ail wages
due them, accruing after the appointment of the receivers, were covered
by the words "ail the expenses of carrying on said business." There-
fore the expression "ail sums due to employés" means sums due at
the time of the décrétai order appointing the receivers, and which ac-
crued before it. It has for a long time been customary, where parties
apply for interlocutory receivers of a going concern, for the court to
insert some provision of this character in the décrétai order appointing
them. Sometimes this is done at the motion of the court or of one
of the adversary parties. Under such circumstances, some of the ob-
servations in Kneeland v. American Loan & Trust Company, 136 U.
S. 89, 10 Sup. Ct. 950, 34 L. Ed. 379, apply, so that, even though the
order appointing interlocutory receivers désignâtes certain rights of
priority, this will not justify an unreasonable exercise of judicial power
in référence thereto.
The présent record, however, shows that the décrétai order appoint-
ing the receivers was summarily entered on the same day with the
filing of the bill against the défendant corporation; and inasmuch as,
for the reasons we hâve already stated, the proceedings under the bill
must hâve been by the consent of ail concerned, it is a reasonable in-
terprétation of the record that the décrétai order, and ail the terms
thereof, were simultaneously assented to by ail concerned. Under
those circumstances, the observations in Kneeland v. American Loan
& Trust Company hâve no pertinency, unless there was a clear mistake
or clear injustice, or unless it appeared that new parties, having an
interest not represented before the court when it took jurisdiction and
appointed the receivers, had subsequently intervened. Nothing of ei-
ther kind appears hère. So far as the record shows, the parties to it
are the same who came into the court originally and voluntarily agreed
to ail that occurred. The proceeding was therefore purely voluntary
on ail sides. The complainànts in the original bill in the Circuit Court
must be assumed to hâve understood the probability that, unless a pro-
vision Hke that which we hâve cited was inserted in the decree, the
corporation might be held to be within the statutes of bankruptcy, and
proceeded against accordingly, in which event substantially the same
priorities would hâve been acquired as are now sought to be enforced.
We must therefore hold that it is in harmony with the reason of the
case, and with the probable intention of the parties, that the provision
which we hâve cited from the interlocutory order appointing the re-
ceivers, with référence to "sums due to employés," is to be construed
as we construe it. As we hâve already said, we must hold that this ex-
22 129 FEDERAL KEPORTEK.
pression was voluntarily assented to. It follows that, as parties to the
original proceeding hâve got whatever advantages they could out of it,
they must accept the consequential burdens.
It is not essential that the bankruptcy statutes were not strictiy ap-
plicable to this défendant corporation, if such were the fact. It is
sufficient that there was a probability that they were. The same is
true as to the fact that the time limit in those statutes for preferred
wages is three months, while the limit in the case at bar appears to hâve
been four. No amount allowed any employé by the order appealed
from was equal to the maximum permitted by the statutes, so that,
merely on account of the departure as to length of time, it cannot be
said that the policy declared by Congress is inapt or was not sufficiently
regarded. Taking this analogy in connection with the peculiar cir-
cumstances of this proceeding to which we hâve referred, including
the provision which we hâve cited from the décrétai order appoiuting
the receivers, and the circumstances under which it was assented to, it
is impossible for an appellate tribunal to find that there was anything
unjust in the requirement of the Circuit Court that that provision
should be literally and fully complied with.
Therefore, without definitely deciding that the rules with référence
to receivers of corporations of a quasi public character can be properly
extended to other employers, we are required by the peculiar circum-
stances of the case before us to afSrm the decree of the Circuit Court.
In this we reach, under substantially the same circumstances, the same
conclusion as was arrived at by the Circuit Court of Appeals for the
Fifth Circuit, with référence to a corporation organized for mère pri-
vate gain, in Reinhart v. Augusta Min. & Inv. Co., 94 Fed. 901, 36 C.
C. A. 541.
The decree of the Circuit Court is aifirmed, and each party will pay
its costs on appeal.
MINNESOTA S. S. CO. v. LEHIGH VALLEY TRANSPORTATION CO. et al.
LEHIGH VALLEY TRANSPORTATION CO. v. MINNESOTA S. S. CO. et al.
(Circuit Court of Appeals, Sixtti Circuit. March 22, 1904.)
Nos. 1,229, 1,230.
1. Collision— SuDDEN Sheeking of Vessel— Bueden of Peoof.
A vessel whicli suddenly sheers from her proper course In ordlnary
weather, in a fairly ample space for navigation, and under no apparent
stress of circumstances occurring without lier fault, and, in conséquence
of such sheering, comes Into collision with another vessel, is presumptively
in fault for the collision, and has the burden of exonerating herself.
2. Same— Steam Vessels Meeting— Pboceeding Abbeast in Ohannel.
The steamer Mariposa, with the barge Martha in tow on a line 600
feet long, both heavily laden with iron ore, was coming down the dredged
channel through Lake St. Clair in the evening at a speed of about 7 miles ;
the channel being 800 feet wide. When near the south end of the eut,
signais for passing port to port were exchanged between the Mariposa
and the steamers Troy and Wllbur, which were coming up lightly laden,
and were then just below the bend at the entrance to the channel, and
about three-fourths of a mile away. The two steamers came on abreast
the Troy on the starboard side, and the Wilbur about 40 feet away, at a
MINNESOTA S. S. CO. V. LEHIGH VALLET TRANSPORTATION CO. 23
speed of 13 miles or more, and passed the Mariposa safely, but about that
time the Wilbur took a sudden sheer to port, and struck and sunk the
Martha. The weight of testimony tended to show that when the signais
were exchanged the Mariposa was about on the range llne in the mlddle
of the channel ; that she then ported, and, on seelng that the two meeting
steamers were abreast, ported again, the Martha followlng each tlme, and
that at the tlme of collision they were each about 150 feet to the westward
of the center of the channel ; also that the Wilbur passed the Mariposa
at a distance of about 50 feet, and was at no tlme east of the range llne.
She called to the Troy to stand off and give more room, which being re-
fused, she slackened speed just before meeting the Mariposa, which
brought her stern withln the suction at the stem of the Troy, and caused
the sheer. Held, that nelther the Mariposa nor the Martha was in fault,
It appearing that the latter ported again on seeing the Wilbur sheer, but
could not then get out of the way, but that the collision was due to the
fault of the Wilbur and the Troy, for coming up abreast, as they did, so
near the center of the channel ; the Troy also belng in fault for unneces-
sarily crowdlng the Wilbur toward the meeting vessels.
3. Admibalty — Trial — Exclusion oï Evidence.
In the trial of an admiralty cause, where the testimony Is taken before
the court, ail testimony ofEered, although objected to, should be admitted,
subject to the objection for the beneflt of the appellate court, unless so
utterly irrelevant or immaterlal that there can be no question of its in-
admisslbility.
Appeal from the District Court of the United States for the Eastern
District of Michigan.
Thèse are appeals from a decree of the district court. In admiralty, render-
ed in a cause of collision between the steamer B. P. Wilbur and the barge
Martha on the evening of October 26, ISOO, near the lower end of Lake St.
Clair, and in a channel or eut extendîng from a point not far above the place
where the waters of the lake pass down into the Détroit river, upward through
the shoal water of the lake for several miles. The channel is straight, is 20
feet deep, and of the width of 800 feet. The Pèche Island Range, running
through its center, makes a course about two points to the lèft of the last
course below on which vessels come up out of the Détroit river. The western
side of the channel Is marked by white llghts a mile and a half or more
apart. On the eastern slde are red lights opposite to the others, and, of
course, the same distance apart.
The steamer Mariposa, with the Martha in tow, on a Une 600 feet long,
both laden with iron ore, was coming down the channel on her way to Lake
Erie ports. The Wilbur was going up, lightly laden, and was moving along-
side the steamer Troy, also going up, lightly laden; the Wilbur béing on the
port side of the ïroy. Signais were exchanged between the Mariposa and the
Wilbur and the ïroy in due season, while the two latter Were below the eut,
and nearly three-quarters of a mile distant from the Mariposa, slgnlfying an
agreement to pass on the port hand. The Mariposa was moving at a speed
of about 7 miles an hour, and the up-bound steamers at a spèed of 13 miles,
or a little more. The Wilbur and the Troy passed the Mariposa at a safe
distance and without trouble, but at that tlme the Wilbur took a sudden sheer
to port, and, striklng the Martha on the bluff of her bow, broke Into that ves-
sel for a distance of 20 feet, and beyond her collision bulkhead. The bow of
the Martha immedlately fiUed with water and sank to the bottom. The after
part of the vessel floated for a brlef time, and then went down. The damage
from the collision to the Martha amounted to $43,000 and over, and the Wilbur
sustained damage to the amount of over $15,000. The collision occurred about
half past 9 o'olock, a half mile above the lights at the lower end of the eut.
The night was somewhat dark, though the weather was clear. and calm.
There is a current in the eut of about a mile an hour. The Mariposa was 380
feet long. Her breadth of beam was 45 feet, and her draught 17 feet. The
Martha's length was 352 feet, her breadth was 44 feet, and her draught 17 feet
and 6 inches. The Wilbur was 290 feet long, 40 feet beain, and 14% feet
24 129 FEDERAL KEPOEÏEK.
draught The Troy was 402 feet long, 45 feet beara, and had a draughl of
14 feet. More particular détails of many of the principal facts are stated In
the opinion, whlch foUows.
The owner of the Martha, the Minnesota Steamship Company, llbeled the
Wilbur and the Troy for her damage ; alleging that the misconduct of the
lâtter contributed to the sheer of the AVllbur, whereby the mischlef was done.
The Lehlgh Valley Transportation Company, claimants of the Wilbur, an-
swered for that vessel, denylng ail fault, and, by cross-llbel and pétition,
charged the Troy, the Mariposa, and the Martha wlth responsibility for tlie
damages suffered by the Wilbur. The Western ïi'ansit Company, claimants
of the Troy, answered, denying ail fault, and by pétition brought In ail the
other vessels; charging them with various faults, and praylng that they be
eharged with the damages ensuing In exonération of the Troy. Answers to
the cross-libel and pétitions having been flled, and testimony taken, the par-
ties were heard thereon. By the decree the Wilbur and the Mariposa were
condemned, and each decreed to pày one-half of the whole damage. The
Troy and the Martha were exonerated. The Minnesota Steamship Company
and the Lehlgh Valley Transportation Company bave severally appealed.
Hermon A. Kelley (Hoyt, Dustin & Kelley, of counsel), for appel-
lant Minnesota S. S. Co.
John C. Shaw (Martin Carey and Shaw, Warren, Cady & Oakes, of
counsel), for appellant Lehigh Valley Transportation Co.
Harvey D. Goulder (S. H. Holding and F. S. Masten, of counsel), for
appellee Western Transit Co.
Before LURTON, SEVERENS, and RICHARDS, Circuit Judges.
SEVERENS, Circuit Judge, having made the preceding statement,
delivered the opinion of the court.
The outline of the controversy, as above shown, indicates that \ve
should fîrst consider the case of the Wilbur, whose sudden departure
from her course was the immédiate cause of the disaster. Having re-
gard to the gênerai facts aiready stated, without more, a presumption
of fault on the part of that vessel arises, which she takes the burden of
dispelling. She is bound to explain how it was that, in ordinary
weather, in a fairly ample space for navigation, and being under no
stress of circumstances occurring without her fault, she should hâve
been suffered to go off on so dangerous a course. The Olympia, 6i Fed.
I20, 9 C. C. A. 393 ; The F. W. Wheeler, 78 Fed. 824, 24 C. C. A. 353 ;
The Mitchell Transportation Co. v. Green, 120 Fed. 49, 60, 56 C. C. A.
455; Davidson v. American Steel Barge Co., 120 Fed. 250, 56 C. C. A.
86; The Australia, 120 Fed. 220, 222, 224, 56 C. C. A. 568.
She has endeavored to explain, by charging that her sheer was pro-
duced by the improper conduct of the Troy and the Mariposa, in that
those vessels wrongfully and unlawfully maintained a course so close to
her, on either hand, that she could not control her own movements,
and was powerless to avoid the disaster to which those vessels impelled
her. But her answer gives color for a belief which is abundantly con-
fîrmed by the testimony that the Wilbur and Troy had been coming
up the river ever since they left Détroit, eight miles below, at a rapid
gait abreast of each other, "neck and neck," as one of the ofïicers of the
Troy expresses it in his testimony, apparently struggling for precedence.
It appears that, when the vessels arrived at Détroit, the Wilbur was
ahead, but that she stopped or slackened speed there momentarily, to
pick up the mailboat, and the Troy got by her, or nearly by her, before
MINNESOTA S. S. CO. V, LEHIGH VALLEY TRANSPORTATION CO. 25
she got under full speed again. At ail events, shë drew up alongside
of the Troy, and the vessels maintained that position, at varying dis-
tances apart, going up the river at a pace se rapid as to attract the atten-
tion and remark of those they passed, and exciting appréhension of
danger to other craft which they met or passed. The court below was
complaisant enough toaccept the statement of the ofïïcers of the Wilbur
and the Troy that they were not racing. But it matters little by what
expression their conduct is characterized. We are convinced that the
purpose of those on each of the steamers was that the other should
not be allowed to get ahead of her, and that they were more intent on
that purpose than to observe the habits of prudent navigation of their
ships. The officers of the Wilbur say that she came around for the
entrance of the eut only a few feet — 30 to 50 — from the lower white
light on the west aide, and the Troy was about the same or a little
further distance oft" on the starboard hand of the Wilbur. We are not
prepared to say that, if thèse vessels had been proceeding separately,
their speed was improper ; and there is no reason to suppose in the prés-
ent instance that, if the vessels had corne up singly, the disaster would
hâve occurred. But they had no sufficient reason for supposing that
those coming down would know that they were coming up in that form,
and would make préparation to give them a wide berth. The danger
of su'dden sheers from passing other vessels, especially when going at
great speed, is well understood ; and the danger is increased when two
vessels are moving in the same direction, close to each other, but at
varying speed, so that the stern of the one is liable to fall into the
trough behind the otrer. The resuit in this instance is one of which
there was risk. A prudent navigator would hâve taken account of it.
A giddy one, intent on a contest of speed, might not. The captain of
the Wilbur testifies that he was conscious of the risk ; that he did not
like to hâve the Troy so near him; that he felt uncomfortable ; that
he checked twice to permit the Troy to go ahead before they entered
the channel, but that she did not, and came up into the eut not more
than 100 feet away from the Wilbur. But he also says that there would
hâve been no difficulty in checking the Wilbur to the extent necessary
in order to follow the Troy, and it is manifest this was so.
When the captain of the Wilbur testifies, as he does, that his sensé of
the danger he was in became so great after the two steamers rounded
to, and were about to meet the down-bound vessels, that he checked
his own vessel, and that she immediately began to sheer, and he was
unable thereafter to stop her until the collision happened, the immé-
diate cause of the disaster becomes clear. The Troy was considerably
larger than the Wilbur. The stems of the vessels were opposite. The
stem of the Troy was 100 feet in advance of that of the Wilbur, and
the two vessels were on parallel lines, and about 40 feet apart. When
the Wilbur checked, her stern was sucked into the wake of the Troy
by the inflowing waters at the stern of the latter; and this influence,
combined with the impact of the water displaced by the bow of the
Troy upon the forward starboard side of the Wilbur, and the high
speed at which the vessels were moving, would naturally effect the
uncontrollable sheer which the captain of the Wilbur says his vessel
experienced. As the speed of the vessels was still nearly alike, thèse
26 129 FEDERAL REPORTER.
influences were not momentary, but were sustained for a time. It is
contended on the part of the Wilbur and the Troy that the Mariposa
produced, or at least contributed to produce, the sheer of the Wilbur.
But that vessel, by the account of the Wilbur herself, was nearly twice
as far away from her as the Troy. Besides, she was a meeting vessel,
and in such case her influence was only momentary; and, her speed
being moderate, the suction at her stem could net hâve been great—
not greater than would be frequently experienced in ordinary naviga-
tion.
The influences which operated hère, and which are so constantly ob-
served by intelligent seamen, were discussed and in great measure ex-
plained by this court in the case of The Alexander Folsom, 52 Fed. 403,
3 C. C. A. 165. And in severar cases since we hâve had occasion to
observe their décisive eflfect in contributing to disastrous collisions.
The Ohio, 91 Fed. 547, 33 C. C. A. 667; The Fontana, 119 Fed. 853,
56 C. C. A. 365 ; The Australia, 120 Fed. 220, 56 C. C. A. 568.
When the steamers came around into the channel, they knew what
the position of the Mariposa and her tow was. If there was danger,
they could see it. They were three-quarters of a mile ofï. But they at
no time gave any signal to the Mariposa of apprehended danger. For
reasons which we shall state hereafter, we are convinced that the Mari-
posa and the Martha were for some distance, before they met the up-
bound steamers, on the western side of the middle of the fairway or
dredged channel. It is certain, and it is the one thing about which there
is no dispute, that the Wilbur and the Troy were advancing abreast
and very close to each other — not more than 40 feet apart. Those on
the Wilbur called to the Troy to stand ofï and give the Wilbur more
room, or to check her speed. This request was met by an obstinate
refusai. The Troy justifies herself by the allégation that she was
already well over to the eastern side of the channel, and could not pru-
dently give more room. Moreover, the captain of the Troy testifies
that there was ample distance between the Troy and the Mariposa
and her tow to allow the Wilbur free passage by, with proper manage-
ment. And hère we stop to notice the attitude of the Troy and her
testimony in making her défense. Her oiïîcers are responsible for the
story that, at the time the Wilbur sheered off, the Troy was about 40
to 50 feet from the eastern side of the channel; that the Wilbur was
abreast of her (that is, their sterns were opposite each other) ; that
the Mariposa was on a course 250 feet westward of the Troy. This
would bring the Mariposa considerably east of midchannel. We think
this testimony savors of a self-serving purpose, and, in respect to the
Troy's position in the channel, it is so opposed to the weight of the
testimony, and the probabilities arising from facts which we feel quite
sure of, that we are constrained to regard it as unreliable. We refuse
to believe that the Troy was where she says she was, and are convinced
that the complaint of the Wilbur that during the critical period the
Troy wrongfully crowded her too far over to the westward is well
founded. As will be shown later on, sufiicient reasons appear for be-
lieving that the collision occurred quite to the westward of the middle
of the channel, and at a place where the Wilbur had no right to be ;
and, further, that she bas not excused herself for being there. We
MINNESOTA S. 8. CO. V. LEHIGH VALLET TRANSPORTATION OO. 27
think the Wilbur was at fault in not taking counsel of her fear, and in
going up alongside of the Troy at the speed they were moving— a men-
ace to meeting vessels. We do not say that of itself her checking her
speed in extremis was an actionable fault. But she voluntarily placed
herself in a position where she was liable to be in extremity. She can-
not, therefore, plead the péril she came into as an excuse. The Aus-
tralia, supra ; 7 Cyc. 309.
From the necessity of the case, we hâve been obliged, in discussing
the conduct of the Wilbur, to deal with the conduct of the Troy also.
We think she shared in the fault of the Wilbur in going up the
channel in the relation with her that she held, and at the speed they
maintained, and that she imnecessarily crowded the Wilbur into tbo
close proximity with the course of the Mariposa and the Martha —
whether from perversity or recklessness, we do not say — and refused
to give room, when she had ample opportunity for doing so without
danger to herself, when she knew of the straits the Wilbur was in.
Her fault was even greater than the Wilbur when the final catastrophe
was brought on.
When we say the Troy crowded the Wilbur into toc close proximity
with the Mariposa and the Martha, we hâve in mind the speed of the
Troy and the Wilbur, and their relation to each other.
Counsel for both the Wilbur and the Troy hâve given considérable
space in their briefs to the question as to which of those two vessels
was to be regarded as the one overtaking the other, with a view to
claiming for their respective vessels the privilège given by rule 22 (Act
Feb. 8, 1895, c. 64, 28 Stat. 649 [U. S. Comp. St. 1901, p. 2891]), to the
one overtaken. The claim of the Troy is that she passed the Wilbur
while the latter was under check at Détroit, and thus gained the favored
position. For the Wilbur it is claimed that the Troy came up only to
a position where she lapped the Wilbur, and did not deprive the Wilbur
of the leading position. We do not feel called upon to décide this ques-
tion. A disagreement over such a matter furnished no apology for en-
gaging in a reckless contest in navigable waters, and putting others
who were exercising their lawful rights therein to hazard and ultimate
loss ; nor did it give either the right to obstinately persist in a course
which would bring the other into péril.
It remains to consider what judgment ought to be pronounced in re-
gard to the Mariposa and the Martha. If the testimony of the officers
of thèse vessels is to be believed, there is no reasonable ground for
thinking that either of them was at fault. - From that it would appear
that, in coming down through the eut, they first met the Majestic, a
steamer going up, and, turning to starboard, passed her by the port
hand. Thereupon they swerved back toward the range line, when, the
signais for passing the steamers below having been given and answered,
they again tumed out to starboard, and proceeded on that course until
they saw the vessels coming up abreast of each other, when the Mari-
posa ported again; the Martha following her. The steamers passed
the Mariposa safely, the Wilbur being rather close and already begin-
ning to sheer. Nothing could then be donc. Only the fraction of a
minute elapsed after the Wilbur passed the Mariposa before the crash
came. Meantime the Martha, seeing the Wilbur coming, had vainly
28 129 FEDERAL RErOKïKK.
portée! again. The stem of tlie Wilbur stove in lier port bow, and pene-
trated to the collision bulkhead. The distance from her bottom to the
bed of the channel was only aj-^ feet, and she sank on her fore foot
immediately. The after part swung around somewhat to port, filled,
and went down. The captain of the Martha did not pay attention to
the range, but kept his vessel properly headed on his steamer. No
fault can be found if he did as he says. For the Wilbur it is urged
that he ought to hâve seen the sheer of the vessel earlier, and hâve
taken measures to get out of the way. But the combined speed of the
meeting vessels was 20 miles an hour. When the Wilbur was first per-
ceptibly sheering ofï, she was probably not much, if any, more than
1,000 feet from the Martha. They would come together in from one-
half to three-quarters of a minute. We do not think it would bave
been possible for the Martha to hâve escaped. Besides, the péril was
extrême from the time the sheer became décisive ; .and we should think
the indulgence due to his situation would excuse the master of the Mar-
tha, even if he did not do ail that he might hâve done, or did not do it
as quickly as he would but for the excitement of the moment. The
Ohio, 91 Fed. 547, 33 C. C. A. 667; The Bywell Castle, 4 Prob.
Div. 219; The Elizabeth Jones, 112 U. S. 514, 5 Sup. Ct. 468, 28 L.
Ed. 812; The Maggie Smith, 123 U. S. 349, 8 Sup. Ct. 159, 31 L. Ed.
175-
The testimony of those navigating the Mariposa was given by those
who were charged with that spécial duty, and they gi^'e the course,
which they run with particular référence to the range lights which they
say they ail the while observed. It is a standard rule, approved by
many décisions, that "more weight is to be given to witnesses who
testify as to the movements of their own vessel than to witnesses on
other moving vessels or onlookers." 7 Cyc. 397, tit. "Collisions," where
numerous cases are cited. There is other testimony, however, to which
we are referred, tending to a différent conclusion in référence to some
of the questions involved — mainly, however, to the question on which
side of the channel the collision occurred. This testimony comes from
those not on the Mariposa or the Martha, and who, from lack of obser-
vation or the opportunity of observation, testify from estimâtes made
from their recollection of the situation. There is nothing based on
certain data which conflicts with the testimony of the officers of the
Mariposa. Moreover, the testimony of thèse latter, as respects the
point nov/ in question, is corroborated by the position in which the
Martha was found by the wreckers, and this is shown beyond doubt to
hâve been athwart the channel; her head lying 175 feet west of mid-
channel, and her stern extending just over it. This was her position
when she went down. When it is remembered that she was heavily
laden, and the blow of the Wilbur was a violent and crushing one, we
do not think it probable that she was carried by the shock very far out
of her course. Both her captain and the watch testify that the bow
of the Martha dropped instantly, and did not swing after the collision.
Thèse indications point to the conclusion that the fore end of the Mar-
tha sank quickly to the bottom, and that her stern was turned around
to port on the pivot of her fore foot by the pressure of the current while
her stern was sinking. If this conclusion is correct, the fair inference
MINNESOTA S. S. CO. V. LEHIGH VALLEY TRANSPORTATION CO. 29
is that the place where the vessels came together was as much as 150
feet to the westward of midchannel. The course taken by the Wilbur
on turning around the lower Hght on her port side to go up the eut
also tends to confirm the testimony from the Mariposa. As we gather
from the testimony of those concerned with the navigation of the
Wilbur, she passed about 40 feet distant, and then steadied to a bearing
on the second red Hght on the eastern side of the channel, 134 miles
distant. As the collision happened only one-third of that distance up,
it seems more than doubtful whether the Wilbur could hâve crossed
the range line in the middle of the channel when she sheered off to the
westward. If that be so, the whole departure of her sheer was in the
western half of the channel, and locates the Mariposa and the Martha
about where they say they were. And in the cross-libel of the Wilbur
she avers that, as they were meeting the Mariposa, the Troy, "instead
of checking or directing her course to starboard in accordance with
the announced intention, kept her speed and held near the center of
the eut." As the Wilbur was on the port side of the Troy, and 40 feet
away, and her own width was 40 feet, and she passed the Mariposa 50
feet distant, the Mariposa having a breadth of beam of 40 feet, it would
follow that the Mariposa's course was 150 feet to the westward of
midchannel.
It is contended for the Wilbur that the Mariposa should hâve known
that the Wilbur and the Troy were coming up abreast, and that they
would need more ample room than she gave them. We think that she
gave them ample room, whether she knew they were coming abreast
or not. But we think, also, that there is no just ground for contending
that while the steamers were below the eut the Mariposa should be ex-
pected to know that the steamers were coming abreast. The lights
of other vessels were there. The Troy and the Wilbur had separated
somewhat at that time, and there was nothing in the indication of their
lights from which alone their position could be seen, which should
warn the vessels above of any such intention. After they made the
turn and began to corne up, they could, we should suppose, be seen, and
probably were, for the Mariposa ported again. AU the while the latter
vessel was entitled to suppose that, passing signais having been given
and understood, the steamers would turn out when it should become
necessary; and this expectation might justly last until it became évi-
dent they were not doing their duty. When this did become évident,
the Mariposa could hâve done nothing to mend the situation. At the
speed the steamers were going up, it was scarcely two minutes from
the time they came around the lower Hght until they were passing the
Mariposa. If the Troy had ported, as she should, there probably
would hâve been no trouble. And as it was, it is very doubtful whether
there would hâve been any collision if the master of the Wilbur had
not incautiously checked his vessel, and thus subjected her to the in-
fluence by which she was turned off. Neither the Wilbur nor the
Troy is privileged to charge it as the fault of the Mariposa that she
relied on them to do their duty, so long as they did not clearly show
that they did not intend to do it.
We observe that in a number of instances the district court, upon
objection, excluded testimony tendered at the hearing (which was had
30 129 FEDERAL REPORTER.
in open court) upon various grounds which were assigned by the court.
In several of thèse instances we think the testimony tendered and re-
jected was material and compétent. But it happens in this case we
are able to form definite conclusions without the aid of that which
was rejecteâ, and that which was rejected was in support of thèse con-
clusions. We think, however, we should call attention to the error
and inconvenience of this practice. If the court of first instance was
empowered to make the ultimate judgment, there might be little or no
objection to the course pursued. But as its détermination is subject
to appeal, and the appellate court might hâve a différent opinion in
regard to the competency and materiality of the rejected testimony,
the difficulty becomes obvions. In such circumstances it might be-
come necessary to undo ail that had been donc subséquent to the taking
of the testimony and go over the ground again, and thus involve much
cost and delay. The proper course is to receive the testimony ten-
dered, subject to the objection, unless, indeed, it be so utterly irrelevant
or immaterial that there could not possibly be any doubt about it. The
power of the court to punish with the costs the bringing in of flagrantly
indirect and useless testimony should ordinarily be a sufficient déterrent.
We think the district court was right in holding the Wilbur and dis-
charging the Martha, but we cannot approve its decree in discharging
the Troy and holding the Mariposa. We are very clear that the Wil-
bur and the Troy were the parties who should be held responsible
for the disaster, and should be condemned to pay the damages. Upon
the conclusions already stated, and the reasons given therefor, we think
the Wilbur and the Troy should satisfy the damages of the former by
equal contribution; the lien of the Wilbur to be subordinate to that
of the owners of the Martha for her damage.
The decree of the district court, so far as concerns the responsibility
of the Wilbur and the Martha, is affirmed as herein modified by the
judgment against the Troy, with costs of both courts. So far as it
concerns the responsibility of the Mariposa and the Troy, it is re-
versed, with directions to enter a decree charging the Wilbur and the
Troy with the damages of the Martha and interest, and with the costs
of both courts, to be collected one-half from the stipulators for each,
with the proviso that, if such moiety cannot be collected from each,
recourse may be had upon the other to the extent of its stipulation
above the sum of such other's moiety of damage decreed against her,
and charging the Troy, in favor of the Wilbur, with one-half the dam-
ages of the latter, with interest thereon; each of those parties to pay
its own costs hère and in the court below, the lien of the Wilbur to be
subject to that in favor of the Martha upon the Troy for her damage,
interest and costs, as herein decreed.
Following will be found the opinion of the court below :
SWAN, District Judge (orally). The three steamers which figure In thla
case are ail charged with fault— the Wilbur, the ïroy, and the Mariposa. So
far as the Troy Is concerned— for I -will commence at the easiest end of the
case— the situation is this: I flnd, as I stated during the argument, that the
Troy passed the Wilbur when nearly abreast of Woodward avenue; that the
AVilbur there renounced her priority of right, and made herself the overtaliing
vessel. I think that is thé fair weight of the testimony. There is on this
MINNESOTA S. S. OO. V. LEHIQH VALLET TKANSPORÏATION CO. 31
point the usual conflict of évidence that attends admlralty cases, and would
attend any case, whatever the subject-matter, where the witnesses must speak
as to matters that are not plalnly visible, not Uluminated by daylight— the
matters occurring in the dark; but I think that the Troy Was thenceforth con-
tinuously ahead— at some times further ahead than others. If we throw ont
ail the Interested testimony in the case, it fairly appears In the testimony of
the mail carriers— the two witnesses from the mailboat; whose names hâve
escaped me— that the Troy bad fairly cleared the Wllbur while the latter was
waitlng for the mail. That being the case, the Wilbur was to her an over-
taking vessel. That continued to be the relation between them, and gave to
thelr navigation the appearance of belng engagea in a contest of speed. Both
masters deny that their course up the river had any such character, and I
must accept their déniai, and believe they were going up there at their or-
dinary gait— 12 or 13 miles an hour, though I think the man that was ahead
was very glad to keep his position, and the man behind would hâve been glad
to hâve exchanged with him. They proceeded upon the usual course, both of
them belng compétent mariners, and I believe both mean to tell the truth—
they proceeded upon the course whlch each regarded as safe. There was noth-
ing to Intimate danger to them, nothing to induce appréhension. They ran
at a speed of 12 or 13 miles an hour, keeping safely away from each other
and from other vessels, and navigating without incident until they had en-
tered the mouth of the eut or dredged channel of Lake St Clair, when they
exchanged signais with the steamer Mariposa, which had the schooner Martha
in tow, bound down. The Mariposa at that time was about midchannel, and
I do not think changed that position. I think she came down with the usual
Inclination of a vessel having the ranges and being on the ranges to adhère
to them. I won't use the term commonly applled to that navigation which
monopolizes the ranges, because It is habitually done by most masters, often
from timidity inspired by the slze and draft of the vessels— a morbid fear of
possibly grounding if on either hand of midchannel. The signais between the
Mariposa, the Troy, and the B. P. Wilbur were seasonably exchanged. The
mutual relations of the Troy and of the Wilbur continued safe as they went
up the eut until just before they came abreast of the Mariposa. That is the
testimony of Capt. Gillies. It is the testimony of Capt. Fuller. Neither of
them saw any appearance of danger in the situation, and both approved its
safety until Just before the collision. Now, each vessel, tliere is no doubt,
had a right to go up there just as fast as she could, provided she exercised
that right with due regard to the interest and safety of others; and the vessel
that was ahead had a right to keep ahead, if she could, providing, as I say,
she exercised that right reasonably. Therefore the Troy is not censurable for
keeping ahead, as she was safely away from the Mariposa and Martha. Nor
is the Wilbur to be condemned for getting along as fast as she could, but, as
she was the overtaking vessel, she was bound to exercise that right with much
greater clrcumspection, so as not to approach too closely to the Troy, or bring
herself within the opération of the latter's suction; and, if she did so, she
must abide the conséquences. She put herself voluntarily in that position.
She could not lawfully attempt to pass the Troy without the latter's consent,
for which she did not ask. According to the testimony, they were at a safe
distance from each other, and there was no sign on the part of either beat that
it was affected by the proximity of the other until they were getting nearly
abreast of the Mariposa. Then it was seen by the master of the Wilbur that
his vessel was dropping ofC to port and towards the course of the Mariposa.
It then became his instant duty to eheck or drop behind the Troy. ïhis he
failed to do, but, in his efforts to avoid the Mariposa, drew in so closely to the
Troy as to get within her suction, when, of course, and as was to be expected,
the Wilbur sheered to port, and held her sheer until she struck the Mariposa's
consort, the Martha. No fault can be imputed to the Troy. I think she was
navigating properly, and I do not think Capt. Fuller's testimony — any reading
of it — will condemn Capt. Gillies' conduct there. Capt. Fuller, as was pointed
out in the argument, did not question that the Troy was as far east as she could
go, and his judgment upon her course Is confirmed by Mr. Montgomery, the
lookout of the Wilbur. The witnesses on the Wilbur agrée that the distance
between the vessels was 75 or 100 feet, until they had proceeded up the eut
32 129 FEDERAL KEPORTEU.
some distance, and pronounced that distance safe. Whén It was reduced to 30
or 40 feet or less by the approach of the Wilbur to the Troy, that was the
voluntary act of the Wilbur, which the Troy eonld net prevent, and for the
conséquences of which she cannot be condemned. The Troy's witnesses testify
that the steamers were much further apart comlng up the eut, and when the
Wilbur took her sheer; but as the duty of keeplng clear was, by the White
Law Rule 22, and pilot rule 6, wholly upon the Wilbur, and the Troy, clearly
complied with those rules, tte latter is faultless. The Troy neither attempted
to cross the bow or crowd upon the course of the Wilbur, which took ail the
risks of her own course, and cannot ask the Troy to share its conséquences
with her.
No one who erer tried an admiralty case ever found that the witnesses
on moving vessels, speaking of distances in the nighttime and of moving ves-
sels, ever got within any reliable distance of anything. The Troy, I think, was
safely over to the eastward, and when Capt. Gillies, of the Troy, was callcd
upon by the master of the Wilbur to give him more room, he answered back:
"I cannot I am as far over as I can go." The Wllbur's master then said:
"Why don't you check, then?" Capt. Gillies replied: "Why don't you check
yourselfî" or something of that kind. Capt. FuUer responded: "I hâve
checked." Now, as I hâve said, Capt. FuUer voluutarlly put himself in that
situation. The checking of the Troy would net bave helped the Wilbur at
that time. Perhaps Capt. FuUer thought there was room enough between the
Troy and the Mariposa, and rightly thought so, had it not been that he un-
guardedly brought his steamer within the Troy's suction. That was the spring-
bead of thls disaster. I think that at that time the Troy was nearer the dis-
tance stated by Capt Gillies from the east bank than the witnesses for the
Wilbur hâve put it, and I do so for thèse reasons: (1) Gillies was in a bet-
ter position to estimate that distance than the master of the Wilbur, who ad-
mits that he could not. (2) According to the master of the Mariposa, he
thought that the Wilbur was 75 feet away from him. Add to this estimate
the Wilbur's beam, about 40 feet and the distance between the Wilbur and the
Troy, 35 to 40 feet, and the beam of the Ttoy, 45 feet, would put the Troy
ont about 150 or lt55 feet from the Mariposa, upon the judgment of the wit-
nesses on the part of the Mariposa and the Wilbur alone. The welght of the
testimony satlsfies me that the Troy was fuUy 250 feet away, at least, from
the Mariposa, for a nearer position is irreconcilable with admitted facts. (3)
The misfortune in the case was the unfortunate move by the Wilbur, which
caused her to sheer ofC. She went ofC very rapldly, and when she struck the
Martha she did not expend ail her energy In that blow. The proofs are clear
that she struck the Martha, swung around simultaneously with the blow,
which was delivered at a speed of 12 or 13 miles an hour, recoiled, and swung
right across stream. The Troy passed her when she had recoiled across tlie
channel. One of the witnesses says he could hâve jumped aboard the Troy
from the Wilbur. Another says there was a distance of 40 feet there. I don't
care which it is. It would show that tlie Troy was considerably further to
the eastward when the Wilbur moved ont from the Martha simultaneously
with the impact than the hurried views of the witnesses on the moving Mari-
posa and the Wilbur estimated. The Wilbur is 290 feet long between per-
pendiculars, and probably 310 or 315 feet over ail. If 250 feet of her length
was across or nearly across the channel — if the Troy cleared her 10 feet when
the Wilbur's bow lay on the Martha, or 40 feet, as the Troy's witnesses state —
the Troy was about 300 feet to eastward of midchannel at the collision.
She perhaps could hâve gone a little further to eastward, but that her master
could not know. His judgment erred on the side of the safety of his own
vessel, and cannot be Impeached because the event showed he might hâve gone
further. The Star of Hope, 9 Wall. 230, 19 L. Ed. 638 ; The City of Antwerp
and The Friederick, L. R. 2 P. C. 25. Especially is this true in the sudden
emergency created by the Wilbur's too close approach. It Is incumbent upon
the Wilbur to show that she was brought into contact with the Martha
through no fault of her own. She is prima facie the wrongdoer. I don't thlnlc
she bas met that burdea. She oecupies the same position in thls case as did
the Santiago in the case preceding. Through misfortune or fault or the facts
of the case, she is unable to meet that burden, and should be condemned.
STONE V. WHITRIDGE, WHITE <fe CO. 33
The last question is one of more difficulty, and that is as to the Marlposa
and the Martha. The mlsfortune fell upon the Martha. I thlnk that the
weight of the testlmony shows that certalnly the Martha was not further west
than the range Une at the tlme she was struck. She was about the center of
the ehannel, and perhaps a Utile to the eastward of It I think that her chan-
gea position and headlng were produced by the energy of the blow wlth wbich
the WUbur hit her, whlch slued her around at that point The Marlposa was
responslble for her position, and ought to share the conséquences of the col-
lision. The two vessels whlch are to be condemned hère are the Wilbur, as the
first wrongdoer, and the Marlposa, as the second. The Troy is dlsmlssed from
the action, wlth costs.
Mr. Shaw: What does your honor do wlth the Martha?
The Court: The Martha was helpless. I thlnk the damages sbould be dl-
vided between the Marlposa and the Wilbur — the Wilbur belng chiefly in fault ;
but the Marlposa Is blameworthy for not bavlng taken tlmely and sufflcient
action to avoid the up-comlng vessels and allow them room. There would
hâve been no accident had It not been for the sheer of the Wilbur and her
unfortunate navigation, and there probably would not hâve been any acci-
dent if the Marlposa had put her consort in the right place. The Marlposa
did not follow her own signal, and, although she announced that she was
directing her course to starboard, she did not, and therefore I thlnk the dam-
ages sbould be divided between the Wilbur and the Marlposa.
WhUe the navigation of steam vessels at hlgh speed when approachlng othet
vessels, or under conditions portending possible danger, cannot be too strongly
reprobated, and not infrequently Is ground of condemnatlon of both, when
one only infllcts the injury, yet in this case the active and proximate Instru-
ment of wrong was the Wilbur, whlch voluntarlly took upon herself the haz-
ard of the known danger of too close proximity to the Troy, which. In the
judgment of her master, was runnlng as close to the there unmarked easterly
boundary of the ehannel as was prudent — a judgment whlch Is not even now
questioned by the master of the Wilbur.
The master of the Troy had a right to navlgate his vessel in the beUef that
the Wilbur would be properly and prudently navigated, and would not attempt
to pass the Troy wlthout the latter's consent, and, of course, that she would
not draw tnto dangerous proximity. This fault the Wilbur recklessly com-
mltted at a tlme when no préventive measure could bave been taken by the
Troy, and the Wilbur therefore bas no right to caU upon the Troy for con-
tribution.
STONE, Collecter, v. WHITRIDGE, WHITE & CO.
(Circuit Court of Appeals. Fourth Circuit Mareh 14, 1904.)
No. 518.
1, OUSTOMS DtTTIES— FOEEIOR COINS— FLUCTUATION IN VALUE.
Section 25, Tarife Act Aug. 28, 1894, c. 349, 28 Stat 552, prescrlbea
that the value of forelgn coins shall be estimated in money of the
United States on the basis of the pure métal found therein, as estimated
by the director of the mint and proclalmed by the Secretary of the Treas-
ury, subject to the provlso "that the Secretary of the Treasury may order
the liquidation of any entry at a diflferent value whenever satlsfactory
évidence shall be produced to hlm showing that the value in United
States currency of the forelgn money specified in the invoIce was at the
date of certification at least ten per centum more or less than the value
proclaimed durlng the quarter in which the consular certification occur-
red." Held, that the fluctuation to which this provlso bas référence is
that of the metallie value, and not of the exchange or commercial value.
2. Same — Liquidation bt Obdeb op Secretabt of thic Tbeasuby — Review —
JUBISDICTION OF BOABD OF GENEBAL ApPBAISEBS.
Where, assuming to act under section 25, Tarlfit Act Aug. 28, 1894, c. 349,
28 Stat. 552, , authorizing the Secretary of the Treasury to order the
reliquidation of any entry on the basis of a value différent from that
129 F.— 3
34 129 FEDERAL EEPORTER.
estimated by the director of the mint when satlsfled that there has been
a fluctuation of at least 10 per cent, from the proclaimed value of the
currency specifled In the involce, the secretary directs a collector of cus-
toms to rellquidate on the basls of the exchange or commercial value of
a certain forelgn coin, and not of the metallic value, held, that he goes
beyond hls authority, and that the action of the collector pursuant to such
direction may be reviewed by the Board of General Appraisera and the
courts, under sections 14 and 15, Customs Administrative Act June 10,
1890, c. 407, 26 Stat. 137, 138 [D. S. Comp. St. 1901, p. 1933].
3. SAME— BOAED OF GENERAL APPEAISERS— RELATIONS WITH TEEASUET DEPAET-
MENT.
The Board of General Appraisers, aeting wlthin Its jurisdiction, Is an
Independent tribunal, empowered by law (sections 13, 14, Customs Admin-
istrative Act June 10, 1890, c. 407, 26 Stat. 186, 137 [U. S. Comp. St. 1901,
pp. 1932, 1933]) to pass upon certain controversies between the government
and the importer, and in this respect is not subordinate to the Treasury
Department
Appeal from the Circuit Court of the United States for the District
of Maryland.
This appeal was brought by William F. Stone, collector of c'ustoms
at the port of Baltimore, from an aiïirmance of a décision of the Board
of General Appraisers (In re Whitridge, G. A. 51 lo — ^T. D. 23,632),
which reversed the collector's assessment of duty on certain mer-
chandise imported by Whitridge, White & Co.
John C. Rose, U. S. Atty. (Morris A. Soper, Asst. U. S. Atty., on the
briefs), for appellant.
Albert Comstock and William R. Sears, for appellees.
Before SIMONTON, Circuit Judge, and BOYD and KELLER,
District Judges.
BOYD, District Judge. The facts in this case are substantially as
follows: Stone, the appellant, is collector of customs for the district
and port of Baltimore, Md. In June, 1900, Whitridge, White & Co.,
the appellees, imported from India into the port of Baltimore a cargo
of gunny bagging. The gunnies were purchased by the importers
at Calcutta, and were invoiced in rupees, which is a silver coin of
India. The Barrowmore, in which the gunnies were brought into
this country, arrived in Baltimore on the i8th of June, 1900, and the
goods were entered for consumption on that day. On the iith of
July, 1900, the collector at Baltimore liquida ted the duty on the said
goods by converting into United States gold dollars the rupees of the
invoices at the rate of 32 cents for each rupee. To this liquidation the
importers entered a protest in writing on the i6th day of July, 1900,
and on the 29th of May, iQor, the collector, aeting under instructions
from the Secretary of the Treasury, reliquidated the duty on said goods
by converting into United States gold dollars the rupees of the invoices
at the rate of 20.7 cents for each rupee. That thereafter, on the X2th
day of June, 1901, the collector again reliquidated the invoices, and
placed the value of the rupee at 32 cents. This last action of the
collector was in response to instructions from the Secretary of the
Treasury, relative to thèse invoices, as follows:
"In this regard I hâve to Inform you that satisfactory évidence has been
produced, to the Secretary of the Treasury, showing that the value, in Dnlted
STONB V. WHITEIDGB, WHITE & CO. 35
States currency, of the foreign money of the involces, namely, the rupee of
India, was 32 cents at the date oï certification, which Is ten per cent, more
than the value proclalmed during the quarter in which the consular certifica-
tion occurred. In view of the fact stated, you are hereby directed to reliqui-
date the entries hereinbefore mentioned, on the basis of this latter value, under
the authority conferred upon the Secretary of the Treasury, by the proviso to
section 25 of the act of August 28th, 1894."
To this reliquidation the appellees duly filed a protest in writing with
the collector at Baltimore. The goods imported are dutiable at five-
eighths of a cent a pound upon the weight as taken in the reliquidation
of June 12, igoî, and in addition thereto at the rate of 15 per cent,
of their dutiable value. It is admitted that the metallic value of the
rupee on April 19, 1900, the date on which the invoices in this case
were certified, was substantially 20.7 cents, and at no time between the
ist of April, 1900, and the ist of July, 1900, did the metallic value of
the rupee even approximate 32 cents. It is further admitted that the
reliquidation made by the collector on the I2th of June, 1901, to which
the importers objected, and which is the basis of this proceeding, in
which the Indian rupee was valued at 32 cents, was the exchange value
of the rupee at the date of the certification of the invoices, as shown and
attested by the certificate of the United States consul gênerai at Cal-
cutta. On the ist of April, 1900, acting under the authority of law,
the director of the mint had estimated the metallic value of an Indian
rupee to be 20.7 cents, and this valuation was duly proclaimed by the
Secretary of the Treasury. The action of the Secretary of fhe Treas-
ury in directing a reliquidation of the invoices upon which the présent
controversy arises was based upon an opinion of the secretary that,
after the estimate of the director of the mint, and the proclamation
thereon, the value of the Indian rupee during the quarter had varied
as much as 10 per cent. ; that its value had appreciated this much,
or more, and that the invoices of the gunnies imported by the appellees
should be reliquidated for duty at the exchange or commercial value
of the Indian rupee, which was certified by the consul, and not at the
metallic value, which had been estimated by the director of the mint.
As before stated, against the reliquidation of June 12, 1901, made by
the collector of Baltimore under the instructions of the Treasury De-
partment, the appellees protested, and this protest, with the facts in the
case, was submitted by the collector to the Board of General Appraisers
at New York. This board rendered a décision adverse to the collector,
declaring, in efïect, that the metallic, and not the commercial, value
of the Indian rupee at the time of the invoices was the true basis of
liquidation. From this décision the case was brought by pétition on
behalf of the collector to the Circuit Court for the District of Mary-
land. The Circuit Court affirmed the décision of the Board of Gen-
eral Appraisers, and the collector appealed to this court.
The appellant lays down two propositions, namely, that the liquida-
tion of June 12, 1901, was the décision of the Secretary of the Treas-
ury, and was final, and that the Board of General Appraisers had no
jurisdiction to review it. The question hère is, therefore, can thèse
positions, or either of them, be maintained? We think not. The Cus-
toms Administrative Act of June 10, 1890, c. 407, § 14, 26 Stat. 137
[U. S. Comp. St. 1901, p. 1933], plainly provides that, when the col-
36 129 FEDERAL KEPOETER.
lector of customs has liquidated invoices for duty the owner or im-
porter may, after such liquidation, give notice in writing to the collector
of his objections thereto, and, if the merchandise is entered for con-
sumption, shall pay the full amount of the duties and charges ascer-
tained to be due thereon; and upon such notice and payment the
collector shall transmit the invoice, and ail the papers and exhibits con-
nected therewith, to the Board of three General Appraisers, which shall
be on duty at the port of New York, etc., which board shall examine
and décide the case thus submitted, and their décision, or that of a
majority of them, shall be final and conclusive upon ail persons inter-
ested therein. * * * Section 15 of said act provides for an appeal
from the décision of the Board of General Appraisers to the Circuit
Court of the United States on behalf of either party.
The appellant contends that the action submitted to the Board of
General Appraisers was not that of the collector of customs at Balti-
more, but was a décision of the Secretary of the Treasury, made in the
discharge of the duties imposed upon him by law, and that the Board
of General Appraisers has no authority in law to review him. It is
insisted on the part of the appellant that Congress could not hâve in-
tended to submit the décision of the Secretary of the Treasury, upon
matters in which the statute imposes upon him the responsibility of
deciding, to review, and possibly reversai, by subordinate divisions of
his own department. We cannot agrée that in exercising the powers
of review vested in the Board of General Appraisers by law the board
is a subordinate division of the Treasury Department. On the other
hand, the members of the Board of General Appraisers are appointed
by the Président, by and with the advice and consent of the Senate, and,
acting within its jurisdiction, the board is an independent tribunal,
empowered by law to pass upon certain controversies between the gov-
ernment and the importer, and in this respect the board is no more
subordinate to the Treasury Department than is any other court. As
bearing upon this view, we may refer to the fact that by section 15
of the administrative customs act it is provided, among other things,
that, if the Secretary of the Treasury is dissatisfied with the action of
the board, his only relief is by appeal to the Circuit Court of the United
States. It may be well at this juncture to give the full text of section
25 of the act of Congress of August 28, 1894, c. 349, 28 Stat. 552, upon
the construction of which the questions involved in this case dépend.
That section reads as follows:
"That the value of forelgn coin, as expressed in tlie money of aceount of the
United States, shall be that of the pure métal of such coin of standard value,
and the values of the standard coins in circulation of the various nations of
the world, shall be estlmated quartérly by the director of the mint, and be
proclaimed by the Secretary of the Treasury immedlately after the passage
of this act, and thereafter quartérly on the first day of January, April, .luly
and October, in each year, and the values so proclaimed shall be followed in
estimating the value of ail foreign merchandise exported to the United States
during the quarter for which the value is proclaimed, and the date of the con-
sular certification of any invoice shall, for the purposes of this section, be con-
sidered the date of exportation : provided, that the Secretary of the Treasury
may order the liquidation of any entry at a différent value whenever satisfac-
tory évidence shall be produced to him showing that the value In United States
curreney of the foreign money speclfled in the invoice was, at the date of cer-
STONE V. WHITRIDGE, WHITE & CO. 37
tlfleation, at least ten per eentum more or less than the value proclaimed dur-
ing the quarter in whleli the consular certification occurred."
In disposing of the questions presented, and especially that in which
jt is insisted by the appellant that the reHquidation of June 12, 1901,
was a décision of the Secretary of the Treasury, and therefore final,
withotit power in the Board of General Appraisers or the courts to
review it, it is perhaps as well to consider the reasons which must hâve
led to the enactment of the law which we hâve just quoted, and by this
method we may arrive at the true ineaning of the législation. We find
that for many years in the administration of o^r tariff laws great difïi-
culties had been encountered in so adjusting the value of goods pur-
chased in foreign countries and invoiced in foreign money as to be
altogether fair, in every instance, to the government and to the im-
porter. Especially was this true of importations of goods which had
been purchased in countries where silver coin was the standard money.
This condition gave rise to disagreements between the government and
the importers, and often the aid of the courts was invoked to relieve the
situation. The Congress, no doubt appreciating existing conditions,
undertook to set the matter at rest by the act of March 3, 1873, c. 268,
17 Stat. 602, by which it was enacted :
"ïliat the value of foreign coin as expressed in the money of account of the
United States shall be that of the pure métal of such coin of standard value,
and the values of the standard coins in circulation of the various nations of
the world shall be estlmated annually by the director of the mint, and be pro-
claimed on the flrst day of January by the Secretary of the Treasury."
This act was plain, and there could be no doubtful construction of
its terms. It provided that the metallic value of foreign coin should be
estimated annually by the director of the mint, and proclaimed on the
ist day of January by the Secretary of the Treasury. When so esti-
mated and proclaimed, the value of foreign coin for the purposes of
liquidation of invoices of imported goods was settled, and had the
force of a statute, which controlled the action of the collectors and
other officers of the customs in determining import duties, and it was
in view of this statute that the décisions in Hadden v. Merritt, 115 U.
S. 25, 5 Sup. Ct. 1169, 29 L. Ed. 333, and The United States v. Kling-
enberg, 153 U. S. 93, 14 Sup. Ct. 790, 38 L. Ed. 647, were made, as
was also the décision in Cramer v. Arthur, 102 U. S. 612, 26 L. Ed.
259, that the valuations of foreign standard coins made by the director
of the mint and proclaimed by the Secretary of the Treasury were con-
clusive and binding both on collectors of customs and on importers,
and that évidence to show that such valuations were inaccurate was not
receivable. In the latter case the principle declared in Collector v.
Richards, 23 Wall. 246, 23 E. Ed. 95, was cited and reaffirmed. Thèse
several décisions are upon the ground that the director of the mint,
in basing his estimate upon the metallic value of foreign coin, had acted
within the scope of the authority conferred upon him by the statute,
and, having so acted, his finding of fact became the law as fully as if
his estimate had been incorporated in the statute itself.
Section 25 of the act of August 28, 1894, excepting the proviso, was
a substantial re-enactment of the law of 1873, the only change being
that the director of the mint should make his estimâtes of the value
88 129 FEDERAL REPORTER.
of foreign coin quarterly, instead of annually, as provided in tlie
previous law. And then cornes the proviso:
"That the Secretary of the Treasury may order the liquidation of any entry
at a différent value, whenever satisfactory évidence shall be produced to him,
showlng that the value In United States currency of the foreign money specl-
fled in the invoIce was, at the date of the certiflcation, at least ten per centum
more or less than the value proclalmed during the quarter in whlch the con-
snlar certiflcation occurred."
That fréquent fluctuations in the metallic value of foreign coins led
to the act of 1894 would seem to be indisputable. The law as it stood
since 1873 empowered the director of the mint to make his estimate of
the metallic value of foreign coin on the ist day of January in each
year, but Congress saw the necessity of having this estimate made
quarterly, instead of annually, but still adhered to thé metallic value
as the basis of the estimate. Then where can we fiiid a reason to
conclude that it was the intention of Congress to make a departure
from the metallic principle which permeated its législation, and confer
upon the Secretary of the Treasury an exclusive power to arbitrarily
adopt another basis? Is it not more in accord with the language of
the statute, the purposes for which it was enacted, the conditions it
was intended to meet, and fair construction, to hold that the proviso
was inserted in the act simply to authorize the Secretary of the Treas-
ury, in case there should be a variation in the metallic value of the
foreign coin after the director of the mint had made his estimate
at the first of the quarter, and before, by the terms of the law, he could
make another estimate at the beginning of the next quarter, to order
liquidations when it was made satisfactorily to appear to him that such
variations in the metallic value to the extent of 10 per centum had
taken place? If such is not the law, then under the proviso to section
25 the Secretary of the Treasury is absolutely unrestrained. He is
neither limited by the metallic value nor by the exchange value of the
foreign coin, but he may, at his option, prescribe any value for foreign
coin, and direct its use by officers of the customs in the invoicing of
foreign goods for duty ; and, following out the contention of the ap-
pellant in this case, the importer would hâve no remedy whatever, either
through the Board of General Appraisers, or the courts. Certainly
Congress did not intend to confer such unbridled power upon the head
of an executive department.
This question is admirably discussed in two very learned opinions
recently delivered, the one in the Circuit Court of the United States
for the District of Massachusetts, in the case of The U. S. v, Beebe,
117 Fed. 670, and the other in the same case in the Circuit Court of
Appeals for the First Circuit, 123 Fed. 762, 58 C. C. A. 563. It is not
necessary for us to go further than to cite the opinions in thèse two
cases, which we think déclare the law as it is, and proceed upon a line of
reasoning which leads irresistibly to the conclusion that, when the Sec-
retary of the Treasury undertook to order a reliquidation of the foreign
invoices for duty upon a basis other than the metallic value of the for-
eign coin in which such invoices were certified, he went beyond his
authority, and his act had no légal effect.
We then come to the considération of the question as to whether
the décision of the Secretary of the Treasury and the subséquent ac-
8T0NE V. WHITRIDGE, WHITB & CO. 39
tion of the collector of customs thereunder can be reviewed by the
Board of General Appraisers and by the courts. We cannot put this
question more forcibly than by quoting from the comprehensive opinion
of Judge Coït in the Beebe Case, 117 Fed. 670, the following language :
"Can the secretary choose any standard of value for the foreign coin he
pleases — as, for example, the exchange value — and wlU sueh action be final
although It Is outside of the authorlty and jurisdictlon conferred upon him
by the proviso? Can the secretary first adopt an Illégal standard of value,
and then make an order or flndlng based upon such Illégal standard which
cannot be impeached? If the doctrine of concluslveness goes to this estent,
then the Importer is no longer governed by the laws which Congress enacts,
but by the secretary's interprétation of them; and the resuit might be that
under the form of reliquidation the pure métal rule of value in the assess-
ment of duties, which has prevalied slnee the origln of the government, maj
to a large extent be nullifled."
It is conceded that, if the ascertained metallic value of the silver
rupee of India, either that made by the director of the mint at tht'
first of the quarter and proclaimed by the secretary, or a metallic
value deterrained by the secretary under the proviso of section 25,
had been adopted by the collector, in making the reliquidation of in-
voices of the appellees' goods on the I2th of June, 1901, under the dé-
cisions before cited, such action by the collector would hâve been con-
clusive. But the collector did not do this. On the other hand, acting
under instructions from the Secretary of the Treasury, he adopted as
a basis of liquidation the commercial value of the rupee, as certified
by the American consul at Calcutta, at the date of the invoices. The
instruction was the act of the secretary, but the liquidation ascertaining
the dutiable value of the goods and determining the amount of duty
to be paid by the importer was the act of the collector. "The action of
a collector in declining to accept the proclaimed value of a foreign
standard coin and in adopting another standard, thereby increasing the
amount of duty on imported merchandise, does not relate to a disputed
appraisement, but to the amount of duties; and under Customs Ad-
ministrative Act June 10, 1890, §§ 14, 15, is reviewable on the protest
of the importer by the Board of General Appraisers and the Circuit
Court." U. S. v. J. Allston Newhall & Co. (C. C.) 91 Fed. 525. In
the présent case the collector ignored the metallic value of the rupee —
20.7 cents — which had been proclaimed for the quarter in which the
importation of the goods was made, and adopted the exchange value
of 32 cents, which appeared from the certificate of the consul, and
thus increased the amount of duty upon the importation. The princi-
ple declared in the Newhall Case, which we hold to be the law, applies
hère, and, in our opinion, the Board of General Appraisers and the Cir-
cuit Court of the United States had jurisdiction.
As bearing upon this point, and in entire accord with the position we
take, we quote again from the learned opinion of the Circuit Court of
Appeals for the First Circuit in the case of The United States v. Beebe
& Sons, 123 Fed. 76S, 58 C. C. A. 562, in which Judge Putnam, in de-
livering the opinion of the court, says:
"The United States ralses a question of the jurisdiction of the Board of
General Appraisers. On that point we need add but very llttle to what was
said in the Circuit Court The act of June 10, 1890, c. 407, 26 Stat 131, Is the
40 129 FEDERAL EEPORTEXl.
law whlch establlshed this tribunal. The United States rests on tlie words
'décision of the collecter,' found in section 14, and they claim that in the case
at bar the 'décision' was not that of the collecter of Boston, but of the Secre-
tary of the Treasury. This is a narrow construction of the expression, because
the ultimate tribunal which reliquidated was not the secretary, but the col-
lecter; so that at common law mandamus would lie only against the latter,
and not against the former. This position, moreover, begs the question, be-
cause, If the action of the secretary was unlawful — as we hold it was — the
collecter could rest nothing done by him en that action, and whatever he did
was his own."
The judgment of the Circuit Court is affirmed.
HENNESST et al. v. TACOMA SMELTING & REFINING CO. et ai.
(Circuit Court of Appeals, Ninth Circuit March 9, 1904.)
No. 961.
1. Res Judicata— Deceee Holding Judgment an Estoppel— Effect of Re-
VERSAL or Judgment Pending Appeal.
A decree based in whele or in part en a plea of res judicata will be re-
versed on appeal where pending such appeal the judgment held to eonsti-
tute an estoppel has been reversed, the fact of such reversai being one
of which the appellate court may take judicial notice.
2. FEDERAL Courts— Pendency or Prior Suit in State Court— Comity.
In a suit by mlnority stockhelders, the Suprême Court of a state de-
cided that a lease of its property by a corporation to a new corporation,
which had acquired a majority of Its stock, was ultra vires and void, and
enjoined the old company frem recognizing auy vote cast by the lessee
as a stockholder, on the ground that, under the laws of the state, it had
no Power to hold such stock. Thereùpon it transferred its stock to in-
dlvlduals, by whese vote it was determlned that the old corporation should
dissolve and sell its property. The mlnority stockhelders then commenced
a second suit in a state court to enjoin such action, for the removal of
the trustées, the appolntment of a receiver, and the caneellation of the
stock transferred by the new company ; alleging that it was still, in fact,
the owner thereof, and that the proposed action was in its interest, to
enable it to ebtaln the property. Such suit having been dlsmlssed by the
court, the complainants commenced a second suit in a fédéral court, iu-
volving to some estent the same issues. Subsequently the judgment of
the state court dismissing the suit therein was reversed on appeal by the
Suprême Court of the state, and the cause remanded for trial. Held
that, under the circumstances, the fédéral court should await the final
action of the state courts, which had first obtalned jurisdictien, before
proeeeding with the hearing of the case before it
Appeal from the Circuit Court of the United States for the Western
Division of the District of Washington.
On December 6, 1898, the Tacoma Smelting & Refining Company, a cor-
portation owning and operating a smelter near Tacoma, in the state of Wash-
ington, made a lease of its entire smelting plant and ail its property for a
term of 10 years to the Tacoma Smelting Company, a corporation created for
the purpose of taking the lease. The first company will in this opinion
be designated the "old company," and the second company the "new com-
pany." The resolution to exécute the lease was approved by the majority
of the stockhelders of the old company, but was opposed by a mlnority repre-
1F 2. Conflict of jurisdictien between state and fédéral courts, see note to
Louisville Trust Ce. v. City of Cincinnati, 22 C; O. A. 350.
HENNESSr V. TACOMA SMELTING & REFINING CO. 41
senting from 12 to 15 per cent, of the stock, who flled a written protest
against tlae same. Shortly after Its exécution the mlnority stockholders re-
quested the trustées of the old company to take légal proceedings to cancel
the lease on the ground that it was ultra vires and void. The request was
denied. Thereafter the mlnority stockholders commenced an action In the
superlor court of the state of Washington for Pierce county, sulng as stock-
holders and in behalf of their corporation, to set aside the lease. In that
action it was flnally determined by the Suprême Cîourt of Washington that
the lease was ultra vires of the old corporation and void, on the ground
that, at the meeting at which the resolution was adopted authorizing the lease,
the majority of the stock of the old company was held and voted hy the
new company, the statutes of the state glviug to no corporation created under
Its laws the power to hold stock in another corporation; also on the ground
that the articles of the old company contalned no expressions of the power of
that company to exécute a lease of its property. The judgment of the court
onjoined the old company from recognizing any vote cast by the new com-
pany, or by any one in its behalf. This décision was rendered July 12,
1901. The new company at that tlme held 5,G09 shares of the stock of the
old company, out of a total of 6,7T6 shares. On July 20th the certiflcates
of the shares held by the new company were by the trustées of the old com-
pany canceled, and new certlflcatea were issued to F. W. Bradiey, William
Alvord, Henry Bratnober, and W. K. Rust, who were al) stockholders of the
new company. On December 21, 1901, thèse persons asslgned ail of said
shares to Chester Thorne. Thorne took the same with full notice of the
judgment in the said action. After the décision W. R. Eust, then vice prési-
dent of the new company, and at the same time secretary of the old com-
pany, bought 255 shares of the stock of the old company, and on January
20, 1902, he transferred 20 shares thereof to 20 persons; giving 1 share to
each, and 235 shares to W. G. Hellar. On March 7, 1902, Hellar transfer-
red 8 of the shares held by him to 8 persons. This distribution of shares
was avowedly made for the purpose of securing a two-thirds majority in
number of hoiders of shares in the old company, as well as two-thirds of
the stock. The purpose was to effeet a dissolution of the old company, and
a sale of its property. It was at this point in the course of events that
the mlnority stockholders, being the same persons who are the appellants
in the case which is now before us, commenced a suit in the superlor court
of the state of Washington for Pierce county (Case No. 19,209) against the
two corporations and the trustées of the old company, Browne, Oakes, Rust,
Clark, Daily, Craig, and Heilig, alleging in their complaint, in brief, that,
notwithstanding the décision of the Suprême Court of the state of Wash-
ington above alluded to, the new company still retained the possession of the
leased property ; that the trustées of the old company were merely its tools,
and that as long as they remalned in office no action would be taken to
recover the property from the new company ; that the stock held by Thorne
still belonged to the new company; and that the transfer to him was a
sham— and praying for relief as foilows: That the trustées of the old com-
pany, Browne, Rust, Clark, Oakes, Daily, Craig, and Heilig, be restrained
from acting as officers or trustées of that corporation, and that they be re-
moved from office; that the new company and the aforesaid trustées of the
old company be enjoined from tearing down or removing from the smelting
plant or buildings of the old company any machinery then in the buildings,
and from interfering with any of the old company's property; that a receiver
be appointed to take charge of and manage the said property; that Thorne
be enjoined from transferring his stock, and that the stock so held by him
be declared void; that the old company and its offlcers be restrained from
allowing him to vote the same; that an accountlng be had with the new
company, and said trustées so named, of ail their doings with said property,
and that they he required to restore ail of the same to the old company;
and that the new company account for its profits made while in possession
thereof. In that suit a temporary restralning order was issued, and there-
after, on motions to extend the order pendlng the suit and to appoint a re-
ceiver, the court, on March 6, 1902, denied both motions and dismissed
the suit for want of equity In the bill of complaint. TTie plaintifCs promptiy
42 129 FEDERAL REPORTEE.
filed thelr motion to vacate thé Judgment, on the ground of irregularity in
entering tlie same. The motion was tal^en under advisement, and was not
decided until after the entry of the final decree in the court below in the
présent suit.
In the meantlme, on March 7, 1902, a meeting of the stoclcholders of the
old Company was held, at which It was ordered by the holders of more than
two-thirda of the stock that the corporation be dissolved, and its property
sold and assets distributed. On March 19, 1902, the new company com-
menced an action in the superior court of Pierce county, state of Washington,
against the old company, to recover judgment for §141,640.28, upon an al-
leged accoimt stated on the adjustment of ail matters in dispute between
the two companies. Subsequently one of the minority stockholders, by leave
of the court, intervened in that action, eontesting the validity of the elalm,
and the right of the plaintlfC therein to recover upon said alleged account
stated. That action was still pending at the date of the entry of the de-
cree which is appealed from in the présent case. On Aprll 25, 1903, on the
motion of the plaintif!: in that action, that cause was dismlssed. On March
26, 1902, the stockholders who had been the plaintiffs in the action in the
superior court of the state commeneed the présent suit in the United States
Circuit Coiu-t for the District of "Washington against the old company and
its then directors, Browne, Oakes, Mottet, Albertson, Hellar, Thorne, and
It'ogg. The new company was not made a party to the suit. The bill con-
tained maiiy of the allégations that had been embodied in the bill of cam-
plajnt in case No. 19,209 in the superior court, and it alleged that the
trustées named were unfit persons to carry on the proceedings of winding
up the corporation ; that they were the créatures of the new company, pledged
to seeure it the smelting plant, and allow its claim for improvements made
thereon, to which, the bill alleged, it was not entitled. It was alleged
that the new company had been in the possession of the smelting plant and
property of the old company under said void lease a little more than three
years, and had realized large profits therefrom; that the old company had
allowed a claim In the sum of $141,640.28 in favor of the new company; that
the allowance of that claim and the proceedings looking to a sale of prop-
erties were part of a scheme to avoid the efCect of the judgment of the
superior court in which it had been declared that the lease was void, and
to enable the new company to acquire the property of the old company. It
prayed that the trustées named be restrained from acting as such otfîcers
of the old company or on behalf of its creditors and stockholders, and from
selling or charging with a lien any of its property, and from carrying out
the sale proposed to be made; that a receiver be appointed of its property;
and that a liquidation of the aft'airs of the corporation be had through him.
On September 3, 1902, the appellants filed a supplemental bill, alleging that
on August 7, 3902, the board of trustées of the old company held a meeting
at which tliey considered two bids which they had received for the smelting
plant and property — one a cash bid for $250,000, the other a bid of $230,000
made by the new company; that they had accepted the latter, and had di-
rected that a contract of sale be executod in accordance therewith; that in
the contract of sale so executed it was recited that the new company liad a
valid claim against the old company for $141,640.28; that the new company
agreed to procure asslgnments from the holders of not less than 5,931 shares
of the stock of the old company of ail dividends that may at any time be
declared thereon; and that the new company was to make payment for the
said purchase by receipting its bill for ^141,640.28, by receipting for divi-
dends on said 5,931 shares of stock, and by paylng the sum of $31,799.72 In
cash, provided that, if it should be found that it had paid too much in cash,
the balance should be refunded; and, if It had paid too little, it should pay
whatever further sums should from time to time be deemed necessary by the
old company.
ïhe appellees answered, and, among other défenses, pleaded that the de-
cree of the superior court of the state of Washington in case No. 19,209
was a judicial détermination of ail matters and issues stated in appellants'
bill. At the commencement of the suit the appellants moved for the appoint-
ment of a receiver, and for a temporary injunction enjoining the appellees
HENNESST V. TACOMA SMELTING 4 EEFINING CO. 43
from goîng forward with the proposed sale. Thèse applications were taken
under advisement by the court. On July 22, 1902, the trustées of the old
Company having eaused a new notice of sale to be given, the appellants flied
their motion for an injunction to enjoin them from making the sale, and from
charging wIth any claim the smeltlng plant and properties of the old Com-
pany. The motion was denied upon the appellees' giving a bond to the ap-
pellants In the sum of $43,000.
Testimony was taken upon the issues, and on November 26, 1902, a final
decree was entered dismissing the appellants' bill, the court ruling that the
decree of the superlor court in case No. 19,209 was concluslve and binding
upon the parties in the présent suit as to ail questions whiçh were or might
hâve been litigated lu that case; that that décision not having, in terms or
in légal effect, annihllated any of the stock of the old company, nor denied
the right of the new company to transter the stock which it held, nor pre-
cluded Its vendees fjom voting that stock, but having judiclally determined
that ïhorne acquired a majority of the stock of the old company lawfully, the
issues in the présent case were therefore narrowed and limlted by the plea
of res judlcata to the question whether the appellants were entltled to any
relief In equity by reason of the facts and transactions since March (J, 1902,
the date of that decree. The court confined its considération to the relief
sought concerning the élection of the new board of trustées of the old com-
pany, the attempted settlement of accounts betweeu the old company and the
new, the initiation of proceedings to dissolve the old company, and the sale
of its property, and the application for the appointment of a recel ver. As to
ail thèse matters the court was of the opinion that the appellants were en-
tltled to no relief. Concerning the allowanee of the claim of the new com-
pany for $141,640.28, the court made no finding or spécial adjudication in the
decree, but in the course of the opinion remarked: "AU questions as to the
lawfulness and righteousness or unrighteousness of the settlement referred
to are or may be the subject of litigation In an action at law pending in the
superlor court, in which the new company is plalntiff, and is asking for a
judgment for the amount of the balance so agreed to. The fact that the same
controversy Is involved in a pending lawsuit between the same parties in
another court of concurrent jurisdiction does not oust this court of jurisdic-
tion, and, although it may uselessly add something to the burdens of the
court, the parties hâve a right to a hearing and décision." Thèse remarks
were made with référence to the action at law in the superlor court of Pierce
county, State of Washington, brought by the new company against the old
to obtaln judgment upon an account stated for $141,640.28. The court in the
opinion proceeded thereupon to discuss that claim, and, wlthout entering Into
the items of the account, expressed the opinion that the adjustment which
was made was nelther unfalr nor unlawful. The court further sald: "I
hâve considered the propriety of retaining the case for final liquidation after
the action stlll pending in the superlor court [the action on the account stated]
shall hâve been terminated, but to do so will delay an appeal for an indefinite
time; and, in my judgment, it is expédient for the parties to hâve a final
decree entered, which may be appealed from at once."
T. L. Stiles, E. L,. Parsons, A. N. Fitch, and James M. Harris, for
appellants.
Charles S. Fogg and W. H. Bogie, for appellees.
Before GILBERT, ROSS, and MORROW, Circuit Judges.
GILBERT, Circuit Judge, after stating the case as above, delivered
the opinion of the court.
One of the assignments of error is that the court held that the judg-
ment of the State court in case No. 19,209 operated as a bar or as an
adjudication of any of the matters involved in the présent case. We
need not enter into a considération of the disputed questions involved
on this assignment, further than to advert to the fact that, subséquent
44 129 FEDERAL REPORTER.
to the final decree rendered by the court below, tlie judgment so relied
upon as an estoppel was reversed by the Suprême Court of the state of
Washington, pn November 26, 1902, the date of the entry of the final
decree which is hère appealed from, the suit in the state court was
pending therein on the motion of the plaintiffs for an order to vacate
the judgment on the ground of irregularity in entering the same. On
January 2, 1903, that order was denied. The plaintifïs therein, desiring
to appeal from the order, and having been denied by the trial court a
statement of facts necessary for the prosecution of their appeal, applied
to the Suprême Court of the state of Washington for a mandamus to
the judge of the superior court, requiring him to sign the desired state-
ment. On July 2, 1903, that application was allowed. State ex rel.
Hennessy v. Huston, 72 Pac. 1015. The Suprême Court, in rendering
its judgment, disapproved the ruling of the superior court that there
was no equity in the complaint, and held, upon the facts alleged in the
pétition for the writ, that the judgment had been irregularly entered.
The court issued the writ, and thereafter the desired statement was
made, and the appeal was presented to the Suprême Court. On De-
cember 10, 1903, the décision of that court was rendered thereon.
Hennessy v. Tacoma S. & R. Co., 74 Pac. 584. It was held that the
judgment of the superior court had been prematurely entered, and it
was adjudged that the judgment be reversed, and the cause remanded
to the superior court, with instructions to proceed with the trial on the
issues joined. It has been held that the effect of a reversai of a judg-
ment completely destroys its efficacy as an estoppel, and that an ij^pel-
late court may take judicial notice on the appeal of such a reversai oc-
curring after the date of the décision appealed from. Butler v. Eaton,
141 U. S. 240, II Sup. Ct. 985, 35 L,. Ed. 713. In that case the Suprême
Court had before it for review on writ of error the judgment of the
Circuit Court for the District of Massachusetts, in which it had been
adjudged that a certain prior judgment of the Suprême Judicial Court
of Massachusetts constituted an estoppel as to a portion of the amount
sued for. After the date of the judgment of the Circuit Court the
décision of the Suprême Judicial Court of Massachusetts was, upon
writ of error from the Suprême Court of the United States, reversed.
The latter court, in deciding the case of Butler v. Eaton, took judicial
notice of that reversai, and said that, when the judgment so relied upon
as an estoppel "was given in évidence in this case, it was effective for
the purpose of a défense, but its effectiveness in that regard is now
entirely annulled. * * * It is apparent from an inspection of the
record that the whole foundation of that part of the judgment which is
in favor of the défendant is, to our judicial knowledge, without any
validity, force, or efïect, and ought never to hâve existed. Why, then,
should not we reverse the judgment, which we know of record has
become erroneous, and save the parties the delay and expense of taking
ulterior proceedings in the court below to effect the same object?" The
court therefore reversed the judgment of the Circuit Court, and re-
manded the cause, with directions to enter judgment for the plaintiff
in error for the whole amount sued for in the action. On the authority
of that case, we entertain no doubt that the decree of the lower court
in the présent case must be reversed.
HENNESST V. TACOMA SMELTING 4 BEFINING 00. 43
Only one other assignment of error need be referred to. That is
that the court erred in holding that the claim of the new company
against the old in the sum of $141,640.28 was a valid and lawful claim.
The détermination of the validity of that claim, and ail questions con-
cerning the allowance or disallowance of crédits for the value of the
betterments or improvements placed upon the property by the new
company, and the items thereof, if allowed, are involved in the issues
presented in case No. 19,209 pending in the state court. As that court
had obtained jurisdiction of thèse issues before the présent suit was
begun, and the cause is there pending for final détermination, ail ques-
tions involved in that suit should, we think, be left for the adjudication
of that court, unaffected by any views that hâve been expressed in the
opinion in the court below. The bill in the présent suit prayed for no
relief concerning the allowance or disallowance of the claim for im-
provements, or any of the items thereof, except that it prayed that the
appellees be enjoined from charging or suflfering to be charged with
any claim, lien, or demand any of the properties of the old company.
This evidently had référence to the allégations in the bill that the pur-
pose of the original parties to the action on the account stated was to
suffer a judgment to be taken therein which should become a lien on
the property of the old company. But the case made upon the bill in
the Circuit Court involves issues and seeks relief in addition to those
which are pleaded in the case in the state court. It may be that the
latter court will, in its final decree, afford such relief and so efFectually
dispose of ail the matters in controversy as to leave no necessity for
further action in the case in the Circuit Court.
We think that, under the circumstances, the decree of the Circuit
Court should be reversed, and the cause remanded, with instructions to
await the final disposition of the cause in the state court. Such will be
the order of the court.
The following is the mémorandum décision of the Circuit Court :
HANFORD, District Judge. It is the opinion of the court that the final de-
cree of the superior court In case No. 19,209 Is equally as conclusive and bindlng
upon the parties as to ail questions which were or might hâve been Iltigated in
that case as the décision of the Suprême Court in the case which was prosecut-
ed by Mr. Parsons in behalf of the mlnority stockholders. That décision did
not in terms, nor in légal eflfect, annihilate any of the stock of the Taeoma
Smelting & Kefining Company, nor deny the right of the Taeoma Smelting Com-
pany (the new company) to transfer the stock which it held, nor preclude
its vendees from voting that stock and participating in the business of the
old company; and the decree in case No. 10,209 is a judiclal détermination
by a court of compétent jurisdiction that Mr. Thorne acquired a majority
of the stoclî of the old company lawfully. That decree has not been attacked
for fraud, and this court has no power to set it aside. ïlierefore the Issues
In this case are narrowed and limited by the plea of res adjudicata to the
question whether the complainants are entitled to any relief In equity by
reason of the facts and transactions since the date of that decree, viz., March
6, 1902. Thèse transactions include the élection of a new board of trustées,
the attempted settlement of aceounts between the old smelting company and
the new one, the initiation of proceedings to dissolve the old corporation,
and the sale of Its property.
The élection of a new board of trustées is not of Itself ground for any com-
plaint whatever. MInority stockholders are certainly entitled to be protected
In ail their légal and équitable righta, but it is equally true that the major-
46 129 FEDEEAL EEPORTER.
Ity have the riglit to prevail in the eholce of trustées who are cliarged v.nth
responslbllity for managing the business of a corporation. Tlie trustées
elected at the meeting of March 7th are ail legally qualifled, and each of tliem
Is a business man of good réputation. Whilst it is true that they were pre-
dlsposed to be frîendly towards the pollcy of the majority stockholders, and
opposed to the confiscation of the investments made in betterments of the
smelting plant, on the other hand the évidence does not Justify the denuncia-
tlon of thèse gentlemen as conspirators to defraud the complainants.
After a patient examination of the pleadlngs and évidence in this case,
and considération of the arguments and the autborities cited on both sides,
and a great deal of délibération, I am not strongly impressed with the appeal
which the complainants are making to a court of equity. The Company in
whlch they are stockholders, as a bxisiness enterprise, was not a success ;
and, after contending agaiust adverse conditions for years, it reached a point
•where it had to give up the struggle, and make a sale of its plant under
conditions which meant a sacrifice, or else make some such arrangement,
as it did make. The promoters of the new organization did not attempt
to "freeze out" the minority stockholders. They secured the capital re-
qr.ired to improve the plant, and expended it in the hope of avoiding a com-
plète wreck of the old company; and, after the lease had been adjudged to
be invalid, they offered to share with them, on a fair basis in proportion to
their holdings, ail the advantages of a proposed reorganization of both com-
panies. The minority stockholders refused to do anytblng to help estricate
the old company from its predicament, or to accept any terms ofCered them,
and have ever slnce shown a disposition to make themselves obnoxious, so
as to compel their associâtes to buy their stock at $100 per share, although
when it vras originally issued the company only recel ved $50 per share, and
it has never been worth in the market more than was originally paid for it.
On the 7th of March, 1902, when the new board of trustées were elected,
the company had no friends, and its minority stockholders were actively
hostile. There was no money in the treasury with which to carry on a busi-
ness which, to be successful, requires a large amount of ready cash. It
was obvious, therefore, that a sale of the plant and dissolution of the corpora-
tion was necessary. This being so, the complainants had a right to apply
to a court of compétent jurlsdictlon for the appointment of a receiver, to
gather up and dispose of the assets, pay debts, and distribute whatever
should remain among the stockholders, and this court might have lawfully
taken the property into its custody, through a receiver, for the purposes
mentioned; but there is a practical as well as a légal side to this case, and
a court of equity is required to exercise a Sound discrétion in dealing with
property of litigants. To illustrate, the value of the property and the price
obtainable for it would necessarily be alïected by the continued opération
or shutting down of the smelter, because the actual opération of the smelter
could not b€ stopped and started again without the loss of a large sum of
money, and the interruption of its business would necessarily depreciate its
value. Taking thèse matters into considération, and also considering that
the new trustées were men of good réputation and flnancial responslbllity,
the court considered that it could not choose a receiver who "would do bet-
ter for the litigants in protecting their interests, in carrylng on the business
and disposing of it, than the new board of trustées. The décision of the
court denying the application for the appointment of a receiver, made at the
beginning of the lltigation, commends itseif to my mind now, after the final
hearing, as being for the best interests of ail.
The smelter plant has been sold under the direction of the board of trus-
tées. In their argument upon the final hearing, the solicitors for the com-
plainants disputed the adequacy of the price obtained, but no showing has
been made of a probability that upon a resale of the property by a eom-
missioner or agent of this court, under any conditions which might be
prescribed, a better price can be obtained. Therefore it is my conclusion
that the complainants have not made out a case entitling them to have the
court interfère, by the appointment of a receiver or otherwise, with the
disposition of the smeltiug plant, and the court caunot prevent eonsum-
mation of the dissolution proceedings which have been inaugurated by the
holders of the requiaite amount of stock.
HENNESST V. TACOMA SMELTING & EEFINING CO. 47
Only one subject of controversy remains to be considered, and that is the
adjustment of the claims of the two companies against each other, in which
the new board of trustées admitted and allowed a balance in favor of the
new Company of $141,000. Ail questions as to the lawfulness and righteous-
ness or unrighteousness of the settlement referred to are or may be the sub-
ject of litigation in an action at law pending in the superlor court, In which
the new company is plaintifC, and is asking for a judgment for the amount of
the balance so agreed to. The fact that the same controversy is involved in
a pending lawsuit between the same parties in another court of concurrent
jurisdlction does not oust this court of jurisdiction, and, although It may use-
lessly add something to the burdens of the court, the parties hâve a right to
a hearing and décision. And upon that question it is my opinion that not-
withstanding the rule that an Intruder upon real estate, or a tenant unlawfuUy
holding over after the termination of bis tenancy, cannot compel the owner
of the premises to pay the value of improvements made without bis consent,
the Suprême Court of the United States bas recognized the palpable Injustice
of allowing a corporation which is a party to an ultra vires contraet to seize
and retain, without paying for it, valuable property transferred or created
upon the faith of the contraet In the case of Central Transportation Com-
pany V. Pullman's Car Company, 139 U. S. 60, 11 Sup. Ct. 488, 35 L. Ed. 55,
I flnd the foUowing déclaration of the law by the Suprême Court: "A con-
traet ultra vires being unlawful and void, not because it is In itself Immoral,
but because the corporation, by the law of Its création, Is incapable of making
it, the courts, while refusing to maintain any action upon the unlawful con-
traet, hâve always striven to do justice between the parties, so far as could
be done consistently with adhérence to law, by permitting property or money
parted with on the f aith of the unlawful contraet to be recovered back, or com-
pensation to be made for It. In such case, however, the action is not main-
tained upon the unlawful contraet, nor according to its terms; but on an Im-
plied contraet of the défendant to return, or, failing to do that, to make com-
pensation for, property or money which it bas no right to retain. To main-
tain such an action is not to aflirm, but to disatiirm, the unlawful contraet."
That was an action to recover rent upon the covenants of a lease. A judg-
ment of nonsuit was granted on the ground that the lease was ultra vires, and
the Suprême Court aflirmed the judgment. Before the décision of the Suprême
Court holding the lease to be ultra vires had been rendered, the Pullman Com-
pany, which was the lessee, filed a bill In equity for an injunction to restrain
the lessor from bringing other actions to collect rent, and In that suit the lessor
filed a cross-bill asking for a judgment in its favor for the value of the property
which It had delivered pursuant to the lease ; also for the value of certain con-
tracts and patent rights assigned, and for compensation for the ruin of its busi-
ness. The Suprême Court sustained the cross-bill, but held that "in no way,
and through no channels, directly or Indirectly, wIU the courts allow an action
to be maintalned for the recovery of property delivered under an illégal con-
traet, where, In order to maintain such recovery, It is necessary to bave re-
course to that contraet. The right of recovery must rest upon a disafiirmance
of the contraet, and it is permitted only because of the désire of courts to do
justice as far as it Is possible to the party who bas made payment or delivered
property under a void agreement, and which. In justice, be ought to recover."
For the reasons stated in the above quotation, the judgment of the court below,
which was in favor of the lessor, upon Its cross-bill, for over $4,000,000, was
reversed ; the Suprême Court holding that the recovery should be restricted to
the actual value of the physical property which the lessee had absorbed. With
respect to this branch of the case the court said : "We eonclude that the cross-
defendant is not liable for the contracts and patents transferred, nor for the
possible damage the Central Company may bave sustained, as above stated. It
is liable for the value of the cars, furniture, etc., transferred. It is a libéral
estimate of the value of this property to say that it amounted in 18^ to as
mueh as it did In 1870, yet we are disposed to deal in as libéral a manner with
the cross-complainant as we fairly may, while not violating any settled prin-
ciple of law. In order to give to it such measure of relief as the circumstances
of the case seem to justify. We therefore take the value of the property in
the cars, etc., in 1885 at the sum of $710,816.50, To that, we thiuk, should be
48 129 FEDERAL REPORTER.
added the $17,000 cash received from the Central Company, making a total
of $727,846.50, and interest from January 1, 1885, for which the eross-def endant
is liable, together with eosts." PuUman's Car Company v. Transportation Oo.,
171 U. S. 138, 161, 18 Sup. Ot. 808, 817, 43 L. Ed. 108. Upon the prlnciples
of that décision, the Tacoma Smelting & Reflning Company had no valld claim
to recover from its lessee the profits of the smelting business while the plant
■was being operated by the latter Company, nor to recover anything except
property which it parted with on the faith of the contract, or the value of any
part thereof which could not be restored, and I hold that the rights of the
parties were reciprocal; that Is to say, the right of the lessor to recover its
property, or compensation for it, is not stronger in equity than the right of
the lessee to hâve compensation for the Investments which it made in better-
ments on the falth of tlie ultra vires contract. In the eyes of the law the two
corporations were equally in fault, and a court of equity will not permit
either to appropriate and retain property of the other unconscionably. It is
true that the minority stoekholders who protested against the lease are entitled
to spécial considération, and their rights are not exactly the same as the rights
of their company. But even they hâve no standing in a court of equity to
unjustly insist upon profiting by a forfeiture. Equity does not favor for-
feitures. The value of their interests involved is to be measured by the value
of their stock, as it would be unaffected by the ultra vires contract, and they
hâve no just claim for anything more.
This court would not uphold the trustées of a corporation In giving away its
property or In creating flctitious debts, whereby the assets might be dis-
sipated; but, in View of the décisions of the Suprême Court of the United
States referred to, the trustées of the Tacoma Smelting & Refining Company
were not obligea to yield to the demands of the minority stoekholders to re-
pudiate ail liability to pay for permanent and unmovable additions to the
smelting plant which were necessary to the successful opération thereof. The
adjustment which was made is, in my opinion, neither unfair nor unlawful.
I say it is not unfair, because the promoters will get back less than they put
in, déductions were made of estimated dépréciation in value of the improve-
ments by use thereof, and a set-off for rent was allowed, and the complainants
hâve not suffered by it in the diminution in value of their stock. They will
not reçoive as large a dividend as they would if the court would lend itselt
to aid in the confiscation of property created by others, but the amount of
their dividend will not be less than the probable value of their stock in 1898
or now, If the ultra vires contract had not been made, unless the amount shall
be further diminished by reason of expensive litigation for which they only
can be held to be responsible.
I hâve considered the propriety of retaining the case for final liquidation
after the action stlll pending in the superior court shall hâve been terminated,
but to do so will delay an appeal for an indefinite time, and, in my judgment,
it is expédient for the parties to hâve a final decree entered, which may be
appealed from at once.
By reason of an intimation from the court at the time of denying the ap-
plication for appointment of a receiver, the sale of the smelting plant was post-
poned, and the terms of the sale were modified. For this reason, I hold that
the eosts should be divided.
Let a decree be entered dismissing the case on the merits, and awarding to
the défendants one-balf of their taxable eosts.
EADFOED V. TJNITED STATES. 49
EADFORD V. UNITED STATES.
(Circuit CJourt of Appeals, Second Circuit March 8, 1904.)
No. 55.
L FEDERAL CoUBTS—ApPEAL—ReCOKD— REDUCTION.
On an appeal to the Circuit Court of Appeals, where there Is no question
raised as to the credibility of any wltness, or as to the weight of his tes-
timony, and it is not important that the court should know just how the
testlmony was given, the testimony should not be printed in question and
answer In the appeal record, but should be presented in narrative form.
2. Cbiminal Law — INDICTMENT— Motion to Quash— Evidence befobe Grand
JUEY.
The déniai of a motion to quash an indictment. on the ground that It
was based on Incompétent évidence of essentlal facts before the grand jury
is a matter of discrétion, and is not a proper subject of exception.
3. SAME— AlTIDAVITS.
The affidavit In support of a motion to quash an indictment on the
ground that It was founded on incompétent testimony was to the eflfect
that no other or différent évidence than that given by déponent, which
was objected to, was produced, or taken before the grand jury, pertaining
to the question in issue, and that déponent was présent "in and about the
grand jury during the entire session thereof," was InsufBcient to show
that no other testimony was introduced.
4. Same— JuBOES— Oedeb ôf Challenge— Objections— Waivee.
Where, in a crimlnal prosecution in the fédéral courts, there was a dis-
pute between counsel, while the jury was being impaneled, as to the order
in which their respective peremptory challenges should be used, but nei-
ther counsel called the court's attention to it, and the United States at-
torney reserved one of his challenges until after talesmen had been drawn,
it was not error to permit the government's attorney to exercise such chal-
lenge after defendant's challenges had been exhausted.
5. State Statutes— Application.
Code Cr. Proc. N. Y. § 385, providing the order in which jurors drawn
for the trial of criminal cases shall be challenged, is not blnding on the
fédéral courts sittlng in that state for the trial of criminal cases.
6. Same— CoHSPiEACT— Evidence— Objections.
Where, in a prosecution for eonspiracy, the court held that certain évi-
dence Introduced was admissible as against one of the conspirators only,
and called the government attorney's attention expllcitly to the fact that
It was Inadmissible as against the others, the admission of such évidence
was not subject to exception on the part of the other défendants.
7. Same.
In a prosecution for eonspiracy to defraud the United States by the ex-
écution of straw bail, the introduction of affidavlts of justification could
not be objected to under Rev. St. § 860 [U. S. Comp. St. 1901, p. 661], pro-
hiblting the introduction of évidence obtained from a party or wltness
by means of a judicial proceeding, by any of the conspirators except those
who made the afiidavlts.
8. Saue — Eléments or Offense— Loss.
In a prosecution for eonspiracy to defraud the United States by the ex-
écution of straw bail, it was not necessary that the government should
prove that the accused did not appear on the day requlred, since the gov-
ernment was defrauded when the accused weré released on the strengfh
of a recognlzance, apparently good, but worthless in fact.
If 5. See Courts, vol. 13, Cent. Dig. § 908.
129 F.— 4
50 129 FEDERAL REPORTER.
In Error to the District Court of the United States for the West-
ern District of New York.
Thls cause cornes hère upon a writ of error to revlew a judgment of the
District Court, Western District of New Xorlî, convicting plaintifC in error
of a violation of section 6440, Rev. St. U. S. [U. S. Comp. St. 1901, p. 3676],
which reads as follows : "5440. If two or more persons conspire either to com-
mit any offense agaiust the United States, or to defraud the United States In
any manner or for any purpose, and one or more of such persons do any act
to efiCect the object of the consplracy, ail the parties to such conspiracy shall
be liable to a penalty of not less than one thousand dollars and not more than
ten thousand dollars, and to Imprisonment not more than two years." The
two indictments, which were duly Consolidated by order of the court and tried
together, charged four persons — Radford, Parrish, McLaren, and James — wlth
entering into an unlawful agreement and combination and conspiring together
to defraud the United States. The détails of the conspiracy were as follows :
Two Ohlnamen — Moy Dong Gin and Aye Yub — were under arrest charged with
having unlawfully entered the United States, and were each held for trial
before a United States commlssioner. It was charged that the défendants
agreed together that adjournments should be aslîed for and application made
to admit to bail, and that upon the fixing of the bail Parrish and James should
ofCer themselves as sureties. Ail four of them knew that the proposed sureties
were not worth anything above just debts and liabilities, and therefore, in
order to enable them ostensibly to justify by specifying and describing prop-
erty as their own, it was agreed that Radford should convey to James and
McLaren should convey to Parrish certain pièces of real estate speciflcally
set forth in the indictment, which property was so conveyed for no other pur-
pose than to be referred to in the sureties' justification. It was further char-
ged that the properties so conveyed were not worth any sum above the amount
of the incumbrances thereon, that this was well known to ail of the accused,
and that the whole scheme was one to defraud the United States by securing
the release of the Chinamen upon recognizances apparently good, but in reality
worthless, so that upon the failure of the Chinamen to appear for trial the
government would be defrauded of the amount of the recognizances. The acts
charged to hâve been donc in furtherance of the conspiracy were the eonvey-
ance by Radford to James of three lots on St. Lawrence avenue, BufCalo, aud
three lots on Stone street, Tonawanda, and by McLaren to Parrish of a lot
on Crowley avenue, BufCalo ; aiso the giving of recognizances by James and
Parrish, with afiidavits of justification referrlng to the pièces of property so
conveyed. The bail was accepted by the commissioners, and the Chinamen
released. The latter failed to appear for trial, and the recognizances were
duly estreated. The four accused persons were tried together. The jury
found Radford and Parrish guilty, and acquitted McLaren and James.
C. A. Dolson, for plaintiff in error.
Chas. H. Brown, for défendant in error.
Before LACOMBE, TOWNSEND, and COXE, Circuit Judges.
LACOMBE, Circuit Judge (after stating the facts as above). Be-
fore entering upon a discussion of the points raised by assignment
of errors and hère argued, we must call attention to the character
of the record presented to this court. It consists of 580 printed
pages and a supplément of 96 pages in typewriting containing ex-
hibits. The appeal is by Radford only, and there was no motion to
direct acquittai as to him, or, indeed, as to any of the others. In
view of the issues involved, the testimony is most voluminous, and
it has been presented to us without the slightest efïort to assist the
court by concentrating its attention to the parts material to the as-
signments of error. Apparently it was thought that the only labor
required of counsel was to fasten together the stenographer's min-
EADFOED V. UNITED STATES. 51
utes arid the exhibits, and hâve them certified by the clerk of the
District Court. In a note at the end of this opinion will be fouud
a fair illustration of the resuit of such practice. Had this weari-
some succession of question and answer been presented in narrative
form, it is altogether probable that the record would hâve shrunk
to a quarter, at least, of its présent size, and this court hâve been
spared the labor of winnowing wheat from chafï. Of course, thcre
are many occasions when it is quite important to know just how
the testimony was given, what hésitation there may hâve been on
the part of a witness, what contradictions, how much of his answer
was suggested by a question, so that there may be proper apprécia-
tion of the weight to be given to his testimony. But on this appeal
there is no question raised as to the credibility of any witness or
as to the weight of his testimony. Concededly, at the close of the
case, ail such questions were to be left to the jury, and they were
so left. Counsel should appreciate that, although their first duty is
to their client to see to it that everything material to that client's
case, however trivial, is laid before the reviewing court, they also,
as members of the bar practicing before that court, owe it a duty.
We need not expatiate further on this point. It is thought — as it
is hoped — that those who read the footnote and thèse criticisms will
hereafter be more careful to discharge their full duty as counseiors
of this court.
Of the 25 errors assigned a few only hâve been presented in ar-
gument. Thèse only need be discussed hère. It is assigned as er-
ror that the court denied a motion to quash the indictments, which
was based on the proposition that the grand jury acted upon incom-
pétent évidence of the essential facts on which the charge was predi-
cated, it appearing that a clerk in the office of the county clerk of
Erie county (whose office is in Buflfalo) attended before the grand
jury in Lockport, and testified that upon a search of the records
made by him he found certain deeds, mortgages, and judgments on
file. It would be a sufficient answer to this assignment to call at-
tention to the well-settled rule that such a motion is ordinarily ad-
dressed to the discrétion of the trial court. The reason for enter-
taining motions to quash on grounds such as that above indicated
is well set out in U. S. v. Farrington (D. C.) 5 Fed. 343 :
"No person should be subjected to the expense, vexation, and contumely of
a trial for a criminal oiïense unless the charge has been investigated, and a
reasonable foundation laid (or an indictment or Information."
After conviction this reason no longer exists, because an intelli-
gent and impartial jury of his peers, after a careful investigation,
at which he has been represented by counsel, with full power to
cross-examine, to introduce évidence, to tell his own story if he so
choose, and to plead his cause, has reached the conclusion not only
that there was a reasonable foundation for the charge, but that the
charge was true. "The motion to quash was clearly determinable
as a matter of discrétion. It was preliminary in its character, and
the déniai of the motion could not fînally décide any right of the
défendant. The rule laid down by the elementary writers is that a
motion to quash is directed to the sound discrétion of the court.
52 129 FEDERAL REPORTER.
and, if refused, is not a proper subject oî exception." U. S- v.
Rosenberg, 7 Wall. 580, 19 L. Ed. 263. But, if this were not so,
the motion to quash would be held to be wholly without merit. By
reason of the circumstance that the one affidavit on which it was
made was among the typewritten exhibits, it did not corne to our
attention on the argument, and for the future guidance of counsel
in other causes it should now be referred to. The clerk from the
county clerk's office, after setting forth what he testified to as to
the records he had found on file, avers that no record or document
from that office was taken to the grand jury, and that none were
exhibited to him when he gave his testimony. The remaining por-
tion of his affidavit is as foUows :
"That no other or différent testimony or évidence [than his own] was pro-
dueed or taken before said grand jury pertaining to the deeds, mortgages, or
judgments appearing in the name of or against the said Ernest L. Parrish.
as déponent verily belleves ; and the reason for his belief is that déponent
was the only person from the said Erie county clerk's office before said grand
jury ; that déponent was présent in and about the grand jury during the entire
session of the said grand jury at the city of Lockport, as aforesaid ; that dé-
ponent saw no books, records, or documents from said Erie county clerk's
office befoi'e said grand jury at Lockport."
The expression, "présent in the grand jury during the entire ses-
sion," is of dubious meaning, but, if it stood alone, it might be con-
strued as averring that he was in the grand jury room from the
beginning to the end of every one of their meetings when this case
was considered. But the affiant manifestly makes no such claim.
He swears only that he "was présent in and about the grand jury."
How a person who is "about" a grand jury thereby becomes quali-
fied to State everything which that body did and did not do is not
apparent. How does he know that the grand jury did not hâve be-
fore them duly authenticated copies of every deed, mortgage, and
judgment to which he testified? How does he know what other
évidence they may hâve had of the transactions on which the charge
was based? The belief of a person "présent about a grand jury"
is unimportant, and his assertion as to what took place in the grand
jury room (except when he happened to be in it) is devoid of ail
weight. A motion to quash the indictments on such an affidavit as
the one found among the exhibits was preposterous, and the effort
to review the ruling of the trial judge thereon is frivolous.
Error is assigned in that the court permitted the United States
attorney to excuse a particular juryman against objection. The rec-
ord is not quite clear as to what occurred. It appears that after ex-
aminations on the voir dire, and the exercise of ail défendants' per-
emptory challenges, there were less than 12 men in the box, and the
panel was exhausted. Talesmen were summoned and examined, the
box was filled, and défendants' counsel announced that they were
content with the jury. There is nothing to show that the govern-
ment had made a like announcement. Thereupon the United States
attorney proceeded to ask some questions of one of the jurymen.
Whether or not he was one of those who entered the box after de-
fendants had exhausted their challenges does not appear. Objec-
tion was made that the prosecuting officer was "bound to exhaust
KADFORD V. UNITED STATES. 53
his objections before the défendant takes up the objections." There
seems to hâve been some dispute between counsel while the jury
were being impaneled as to the order in which their respective per-
emptory challenges should be used, but neither of them called the
court's attention to it. Upon hearing the objection above quoted,
the court remarked that, if counsel had asked for a ruling, it would
hâve made one; but that, not having done so, the challenge to the
juror would be allowed. We see no error in this. Counsel appar-
ently relies on section 385 of the New York Code of Criminal Pro-
cédure, which provides that "chp.llenges to an individual juror must
be taken first by the people and then by the défendant." Appar-
ently this statute contemplâtes that when the box is filled with 12
men, who hâve successfully passed examination on the voir dire,
they shall be taken up one by one in regular order, and as to each
one so taken up the prosecutpr first shall be required to state wheth-
er he challenges or not, and, if lie do not challenge that juror, then
the défendant shall be required to state whether or not he challenges
him. If either challenge, and the vacant seat be filled by another
juror, then the same order of propounding challenges to him should
be observed; and the challenging should proceed in like order till
the number of peremptory challenges allowed are exhausted, or both
sides are on record as having specifically declined to challenge every
one of the twelve in the box. This seems to be an excellent method
of presenting the challenges, and would no doubt tend in practice
to expedite the sélection of a jury by cutting off some of the finessing
with which that opération is so often obstructed. But, though it
may quite appropriately be followed in the fédéral courts, the state
statute does not lay down the rule for those tribunals in criminal
trials (Logan v. U. S., 144 U. S. 263, 12 Sup. Ct. 617, 36 L. Ed. 429),
and there is no error assignable if the trial judge fails to conform
to state practice. As has been already indicated, there was no error
in the disposition of the case at bar. Certainly upon no reasonable
theory could either sida hâve been compelled to exhaust its chal-
lenges until there were 12 men in the box to sélect from ; and, if
either side chose to exhaust its allpwance without first making some
request of the court as to regulating the order of challenge, it can-
not complain if the other side has more prudently reserved one or
more of its challenges to meet the sélections from a new panel of
talesmen, of whose names no one was advised until after the trial
had begun, and as to whose antécédents, therefore, there has been
no opportunity for inquiry.
It is next assigned as error that the court admitted in évidence
"the deeds to the Virginia property." The défendant Parrish, in
his affidavit of justification, stated that, in addition to the Crowley
avenue property, he owned 542 acres of land in Virginia, free and
clear of incumbrances. It was sought to be proved that this land
had been conveyed to him by Radford, and that title had been di-
vested by certain tax sales. Objection was made to the tax deeds
because it was not shown that the preliminary steps to a tax sale
had been taken. It will be unnecessary to examine any of thèse
objections. The record shows that the government called a deputy
54 129 FEDERAL REPORTER.
clerk of the Virginia court, and asked him some question about the
title. Thereupon objection was taken, and the court ruled that the
évidence would be received on the question of intent against Rad-
ford and Parrish. Before the question was answered, a further ob-
jection was raised that the witness was incompétent, and he was
withdrawn, the United States attorney stating that he would show
the State of afïairs otherwise, and he ofïered a deed. Before the
deed was received, défendants' counsel said: "If the court please,
you announced this évidence would be received as to Radford. I
think your honor should receive it as to Parrish only." To which
the court replied, "Yes, I will recall that. Correct my ruling in that
regard;" and thereupon three deeds covering the Virginia property
were received, the court again stating, as the third was présentée!,
that the évidence was received as tending to show that Parrish had
no title in the property, and as to characterizing his intent and guilty
knowledge. And as the last of the Virginia deeds — the fourth one —
was marked in évidence the court said : "Of course, you under-
stand, Mr. District Attorney, that this proof is ofïered solely as
against Mr. Parrish, and not as against any of the other alleged
conspirators," to which the District Attorney replied that he cer-
tainly so understood it. Under thèse circumstances the plaintifif in
error Radford cannot complain of the admission of this évidence.
If, when the case went to the jury, he had any appréhension that the
jury might forget that the évidence was received only against Par-
rish, he should hâve asked to hâve them further instructed to dis-
regard it as against himself. This he did not do.
Exception was reserved to the admission in évidence of the afii-
davits of justification — i. e., ownership of property — which défend-
ants Parrish and James submitted with the recognizances they signed
on the ground that such afHdavits were "évidence obtained from a
party or witness by means of a judicial proceeding," and as such
within the provisions of section 860, Rev. St. U. S. [U. S. Comp. St.
1901, p. 661]. Such voluntary afifidavits are apparently not within
the section, but, if they were, the only persons who could invoke
its provisions were those who had made the affidavits — Parrish and
James. The plaintifï in error Radford could not properly object to
their introduction against him.
The sole remaining assignment of error which has been argued is
to a refusai to charge the following proposition :
"It Is absolutely necessary to establish under this indictment that the dé-
fendants agreed that the Chinamen should not appear upon the adjourned
day, because, if they did appear, no loss could occur upon the bond, and it
would be an agreement, by the resuit of which the United States could not
possibly hâve a loss. It must therefore be affirmatively proven as one of the
essential éléments of the crime charged that the défendants, and each of them,
knew beforehand, and when they made the agreement, that thèse Chinese
would not appear upon the adjourned day. A loss must oceur, or at least there
must be an agreement that could be effectuated."
The exception to the refusai so to charge was unsound. The
United States were defrauded when the release of the Chinamen
was obtained on the strength of a recognizance, apparently good,
but in reality worthless. It was not necessary to go further, and
EADFOED 7. UNITED STATES, 55
show that the défendants conspired to remove the Chinamen from
the jurisdiction of the commissioner. The jury, from the proof, was
entirely warranted in finding that it was the expectation of the con-
spirators that the persons who were left foot-loose when the bail
bonds were accepted would avail themselves of the opportunity to
decamp. The gist of the offense under section 5440 is the conspiracy
to defraud, coupled with a single overt act. Whether or not the
conspiracy is successful is wholly immaterial.
The judgment is affirmed.
NOTE.
Excerpts from Record.
Cross-examînatlon of a wltness for the prosecution, who had testlfled that
he had bought a pièce of property In Tonawanda, for the considération of some
watches given to the vendor: "Q. Was it more than one watch? A. I be-
lieve so, yes. Q. Are you sure? A. No. Q. Sllver watch, was it? A. No.
Q. Sure? A. Yes. Q. It must hâve been brass, then? A. No. Q. What?
A. Not necessarily. Q. Copper one? A. No. Q. Do you know what the watch
was worth? A. I couldn't tell you now. Q. Will you swear it was worth
$10? A. Yes. Q. 512? A. Yes. Q. $15. A. Yes. Q. $20? A. Yes. Q. How
much? A. I couldn't tell you the exact amonnt, as I sald. Q. Could you tell
me wlthin $10? A. I don't think so. Q. Could you tell me within $20? A.
Probably not. * * * Q. Hâve you ever acted as straw man for anybody?
A. Never. Q. Isn't that part of your business? A. Part of my business? Q.
Generally? A. Indeed, not. Q. Don't laugh at It Just answer my question.
A. Indeed not. Q. Do you know Samuel H. Cowles? A. I do not. Q. Did
you ever see him? A. Not to my knowledge. Q. Do you know Harry Cowles?
A. Harry Cowles? I do not. Q. Do you know Walter Cowles? A. I know
W. C. Cowles. Q. Well, Walter C. Cowles, do you know him? A. Yes, sir.
Q. Did you take the proi)erty as straw man for Walter? A. I did not. Q.
As his agent? A. I did not. Q. Did you hâve any interest In the property
— real interest? A. I did. Q. Ever hâve? A. I did. * * * Q. What is
your business now? A. Gem expert. Q. What? A. Gem expert. Q. Work-
ing for any spécial firm, or generally on your own hook? A. Work for a flrm
in New York City. Q. What firm? A. J. Dreiser & Son. Q. What is the
name? A. J. Dreiser & Son. Q. What is the address? A. 292 5th avenue.
Q. How long hâve you been at work for them? A. 5 years and a half. Q.
As gem expert? A. I bave. Q. For that length of time? A. For that length
of time. Q. Where do you live in New York? A. 31 W. 82d street Q. Mar-
ried man? A. Yes. Q. How long hâve you lived there? A. About a year.
Q. Where did you live before that? A. 1254 Lexington avenue. Q. Keep
bouse there? A. Yes. Q. How long did you live there? A. About 8 months.
Q. Where did you live before that? A. 201 W. 106th street. Q. Did you
keep bouse there? A. Yes, sir. Q. How long did you live there? A. A year.
Q. Where did you live before that? A. I don't believe I can give you the
number. Q. Well, give me the street. A. 25th street. Q. How long did you
live there? A. I should say about a year. Q. Can you be any more definlte
than that? A. No. Q. Where did you live before that? A. Several différent
places where we boarded. Didn't keep house before that Q. Well, you bave
been in New York only slnce '97. How many places hâve you boarded at since
you hâve been there, before you commenced to keep house? A. Perhaps three.
Q. Or more? A. I don't think so. Q. How long did you stay in each place?
A. I couldn't tell you exactly ; several months, perhaps. Q. And perhaps
not? A. Longer in some; shorter in others. • * * Q. Did you ever pay
any taxes on the property? A. Never did. Q. Did you ever reçoive any rents
from anybody? A. Never did. Q. What? A. I never did. Q. That was in
1890? A. That was in 1890. Q. You remained hère until 1897? A. 1897.
Q. Never paid a dollar taxes? A. Never did. Q. Never paid a penny interest?
A. Never did. Q. Never received a penny rent? A. Never did. Q. Never at-
tempted to pay any part of the mortgageî A. Never did. Q. Never assumed
."G 129 FEDERAL EEl'ORTER.
possession of the property? A. Except as It stood In my name. Q. We!l,
you never assumed possession? You never went there and took possession?
A. I never went there and toolî possession, no. Q. No. ïou never had any-
body there in possession for you, so far as you linow? A. No. Q. ïou a
uian of weaith at that time? A. No. Q. Quite limited circumstances, were
you not? A. Comparatively so."
In the examlnation of this wltness alone there are niany more pages of sim-
ilar évidence wlthout objection to a single question or motion to strilie ont a
single ansvyer. And the testimony of the other wituesses is presented iu the
same slovenly manner.
Excerpt No. 2.
The question to the wltness, a searcher in the county elerk's office, asked if
he found a certain deed on record. There Is a wliole ))rinted page of elaborate
objections, but at the end of the discussion the objections are overruled, and
no exception taken, the wltness answerlng in the négative. Thls Is a sample
of many other pages where multltudlnous objections, whlch challenge atten-
tion and analysis, are needlessly presented, since no exception is reserved.
DUGAN V. BBCKBTT.
(Circuit Court of Appeals, Flfth Circuit March 8, 1904.)
No. 1,241.
1. Chattel Moetgaqes— Validity— Feaud— Fedebal Courts— State Law—
EtiLE of Décision.
In determinlng whether a chattel mortgage executed by a bankrupt
was fraudulent on lt« face, the fédéral courts foUow the décisions of the
courts of last resort of the state In whlch the controversy arose, the law
on the subject being regarded as a rule of property.
2. Same — MoRTaAGOB's Possession — Effect.
Where a chattel mortgage on a bankrupt's stock of goods authorized
the mortgagor to continue In possession and sell the goods, but required
that he should deposlt to the mortgagee's bank account each day the re-
ceipts for sales over the amount of the running expansés of the store, to
be applied on the debt, and that, If he failed so to do, the trustée named
in the mortgage ghould at once take possession and sell the stock at pub-
lic auctlon, such mortgage was not fraudulent on its face.
Appeal from the District Court of the United States for the Northern
District of Mississippi.
On February 26, 1901, Joe A. Cohen executed and dellvered the follovriug
mortgage :
"In considération of the sum of one dollar, I convey and warrant to J. C.
Baptist, as trustée, the following property now situated in the storehouse now
occupied by J. A. Cohen in the Olty of West Point, Clay County, Mississippi,
to-wlt :
"Ail the stock of goods, wares and merchandise now In sald storehouse, to-
gether wlth ail showcases, counters, flxtures and Iron safe. Also ail goods,
wares and merchandise to be hereafter acquired and placed in sald storehouse,
on ail of whlch thls incumbrance shall Immedlately attach, together with ail
notes, securitles, accounts and bank [book] debts now made and due him in
the course of his business or hereafter to be made or acquired by hlm in the
course of said business.
1 1. State laws as rules of décision In fédéral courts, see notes to Griffin v.
Overman Wheel Co., 9 C. C. A. 548 ; Wllson v. Perrin, 11 C. C. A- 71 ; HUl
V. Hite, 29 C. C. A. 553.
K 2. See Chattel Mortgages, vol. 9, Cent. Dlg. § 410.
DTJGAN V, BECKETT. 57
"In trtist, to sceure R. C. Beckett a promlssory note from me to hlm for the
snm of twenty-three hundred and twenty-flve ($2,325.00) dollars, of this day
and date, due and payable on the Ist day of November, 1901, bearlng Interest
at the rate of 8% from date.
"Now the considération of thIs deed of trust la that the sald R. C. Beckett
has paid on hls indorsement for said J. A. Cohen and for advancements thls
day made to said J. A. Cohen to pay hls debts, and for money also this day
advanced to sald J. A. Cohen, to enable hlm to make cash purchases in a re-
plenlshment of his sald stock of goods now on hand, so as to enable hlm to
sell the same to the best advantage. And the agreement being that the said
J. A. Cohen is to deposlt the net proeeeds from sald business, over and above
running expenses thereof, each day, to the crédit of R. C. Beckett in the Bank
of West Point, Miss., until sald indebtedness Is fully paid off and satlsfled, and
It being furtber agreed that ail the purchases hereafter made by the said J.
A. Cohen are to be for cash from the said fund so advanced, and also, that in
the event of any other purchases being made, or any other purchases being
made on crédit, that th* seller shal) first be notifled, in wrltlng, of the exist-
ence of this trust dsed,
"Now, therefors, if th« said J. A. Cohen shall falthfully comply with ail the
provisions of tWa tnipt, and pay said amount at or before maturity, then thls
trust is to be vclâ-
"But if said J. A. Ohe» shall violate any of the provisions of thls deed,
or shall not hav» the saœe fulïy paid off snd dlscharged at the maturity there-
of, together witii «11 Interest, then, In either event, the said trustée at the
request of sald R. C. Beckett ©r his assigns or légal représentatives, shall im-
medlately take charge of ail of said property mentioned and included in thia
trust deed, and la the true intent and meaning thereof, and shall proceed to
sell the same at public outcry to the hlghest bidder for cash, In front of the
Courthouse door of paid county, after giving ten days' notice of the time,
place and t^rtns of sala by wrltten or printed notices put up in at least three
public places in said county, and otit of the proeeeds shall flrst pay ail the
costs and charges lacident t» the exécution of this trust ; and shall then pay
whatever balanos la âne t« said R. C. Beckett, until the same is fully paid off
and satisfied, and the balance shall be paid to said J. A. Cohen or whoever
may at the time be legally entitled thereto.
"The said J. C. Baptist accepts the provisions of this trust If the said J.
C. Baptist shoulct die, or remove from the state, county or town, or should
become unable or unwilling or fail or refuse to exécute this trust, then said
R. O. Beckett, or his assigns or légal représentatives, may appoint another
trustée, who shall hâve and exercise the same powers and dutles, and thls
power to appoint a substituted trustée shall exist as often and so long as any
vacancy from any of the above causes shall occur or exist.
"Witness our signatures thls Feby. 26, 1901.
"[Signed] Joe A. Cohen.
"I accept thls trust J. C. Baptist, Trustea.
"R. C. Beckett"
The mortgagie was duly acknowledged by the parties to it on the day of lt«
date, and was duly flled and recorded in the proper office on the same day.
On a pétition flled in the lower court December 2, 1901, Joe A. Cohen was ad-
judicated an involuntary bankrupt and Henry Dugan was appointed his trus-
tée in bankruptcy. Cohen having made default in the payment of the mort-
gage to secure the debt to Beckett, F. G. Barry, who had been substituted as
trustée In the mortgage, took possession of the mortgaged goods. Barry, as
such trustée under the mortgage, sold the goods under an agreement between
ail the parties In Interest that he would deposlt the proeeeds of the sale in
bank, and that they should be turned over, without déduction, to the trustée
in bankruptcy, subject to the rights of R. C. Beckett and others. On January
29, 1902, R. G. Beckett flled his pétition in the bankruptcy court claiming un-
der the mortgage the proeeeds of the sale of the goods. On February 24, 1902,
Henry Dugan, trustée in bankruptcy, answered Beckett's pétition, alleging that
the mortgage was vold as to creditors because Oohen was allowed to remain
In possession of the merchandise and to continue to sell the same. Beckett'»
pétition was referred to the référée, and ou a hearing before hlm be found
58 129 FEDEEAL REPORTER.
and reported to the court that the mortgage was not vold on Its face, and that
It was not Invalid as matter of fact. And he therenpon ordered that the pro-
ceeds of the sale of the goods to the amount of $2,177.85, with interest thereon,
be pald to R. 0. Beckett by the trustée In bankruptcy out of money in his
hands derived from the sale of the property described in the mortgage. The
referee's report was confirmed by decree of the district court, and thereupon
Henry Dugan, trustée In bankruptcy, appealed to this court, and assigns that
the court below erred In the decree rendered.
T. W. Brame (Ivy & Ivy and Brame & Barnes, on the brief), for ap-
pellant.
R. C. Beckett, pro se.
Before FARDEE, McCORMICK, and SHELBY, Circuit Judges.
SHEIyBY, Circuit Judge, after stating the case as above, delivered
the opinion of the court.
The appellant's contention is that the mortgage to secure the debt to
Beckett is void under the common law and the statutes of Mississippi.
If that is true, althougli it was executed more than four months before
the adjudication in bankruptcy, it could not be enforced as a valid lien
on the bankrupt's estate against the creditors of the bankrupt. The
appellant contends (i) that the mortgage is void for actual fraud, and
(2) that it is void on its face. There is nothing in the record to sustain
the first contention. The évidence shows without conflict that Beckett
only sought to secure the payment of a just debt. If it be conceded that
Cohen's conduct was fraudulent after the exécution of the mortgage,
there is no proof whatever that Beckett, or the trustée named in the
mortgage, was connected with it, or even had any knowledge of it.
Such fraudulent conduct on the part of the grantor, if it be proved,
would not afïect the rights of Beckett under the mortgage. Baldwin
V. Little, 64 Miss. 126, 8 South. 168; Emerson v. Senter, 118 U. S. 3,
6 Sup. Ct. 981, 30 L. Ed. 49. The question to be decided is whether,
as matter of law, the mortgage on its face is valid or invalid. More
than 20 years ago a learned writer on mortgages said that whether a
mortgage of the stock of goods of a trader, which permits the mort-
gagor to sell the mortgaged property in the usual course of trade, is
necessarily fraudulent, is one of the disputed questions of our juris-
prudence. Jones, Chat. Mort. 379. The same conflict of authority
on the question continues, the courts of last resort in the several states
differing greatly in their conclusions. 6 Cyc. I104. In deciding the
question the fédéral courts follow the décisions of the courts of last re-
sort of the State in which the controversy arose, the law on the subject
being regarded as a rule of property. Such a mortgage was by the
Suprême Court held void in Indiana (Robinson v. Elliott, 22 Wall.
513, 22 L. Ed. 758), but it would "not ht held, as a matter of law, to
be absolutely void or fraudulent as to other creditors" in Michigan
(People's Savings Bank v. Bâtes, 120 U. S. 556, 561, 7 Sup. Ct. 679,
30 L. Ed. 754) ; and such a mortgage is valid in lowa (Etheridge v.
Sperry, 139 U. S. 266, 11 Sup. Ct. 565, 35 L. Ed. 171). In the latter
case, after deciding the question as one of local law, the court observed
that : "If this were an open question, we could not be blind to the fact
that the tendency of this commercial âge is towards increased facilities
in the transfer of property, and to uphold such transfers so far as they
DUGAN V. BECKETT, 59
are made in good faith." There are well-considered authorities that
sustain the position that it is not fraud per se for the mortgagor of
chattels to retain a power of sale, and that the rétention of such power
is only a circumstance to be considered by the court or jury, as the case
niay be, in determining the question of fraud in fact. Jones on Chat.
Mortgages (3d Ed.) 379 ; 6 Cyc. 1104. The mortgage before the court,
the vaUdity of which is in question, is not simply a mortgage on a stock
of goods which permits the mortgagor in the usual course of trade to
sell the mortgaged property, but it contains other provisions which must
be considered in connection with this retained power of sale. It per-
mits Cohen, the mortgagor, to retain possession of the merchandise
and to continue his business, and as to the disposition of the money,
the proceeds of sales, it is provided : "And the agreement being that
the said J. A. Cohen is to deposit the net proceeds from said business,
over and above running expenses thereof, each day, to the crédit of
R. C. Beckett in the Bank of West Point, Miss., until said indebtedness,
is fully paid off and satisfied." It is provided, also, that if the mort-
gagor "shall violate any of the provisions of this deed" the trustée, at
the request of the beneficiary, shall immediately take charge of the prop-
erty and foreclose the mortgage. In Robinson v. Elliott, supra, in
which, following the local law, a mortgage was held void, the mort-
gagor having retained the power of sale in the usual course of business,
the court was careful to say :
"We are not prepared to say that a mortgage under the Indlana statute
vvould not be sustained which allows a stock of goods to be retained by the
mortgagor, and sold by him at retail for the express purpose of applying the
proceeds to the payment of the mortgage debt. Indeed, it would seem that
such an arrangement, if honestly earrled ont, would be for the mutual advan-
tage of the mortgagee and the unpreferred creditors."
And in Etheridge v. Sperry, supra, Mr. Justice Brewer, speaking for
the Suprême Court, said:
"In neither of those cases [referrîng to Means v. Dowd, 128 U. S. 273, 9 Sup.
Ot. 65, 32 L. Ed. 429, and Robinson v. Elliott, supra] is it affirmed that a
chattel mortgage on a stock of goods is necessarily invalidated by the fact that
either in the mortgage or by paroi agreement between the parties the mort-
gagor is to retaln possession, with the right to sell the goods at retail. On
the contrary, it is elearly recognized in them that such an instrument is valid,
nofwithstanding thèse stipulations, if it appears that the sales were to be
for the benefit of the mortgagee."
Under the rule indicated by thèse cases, the mortgage in question
hère' elearly should not be held invalid on its face, unless we are required
to do 80 by the laws of Mississippi. By statute in Mississippi every
conveyance of goods or chattels, by writing or otherwise, contrived of
fraud or collusion with the intent or purpose to hinder, delay, or de-
fraud creditors, is void as against creditors of the grantor. Rev. Code
1892, § 4226. But such conveyance is not void as to subséquent credit-
ors unless made with the intent to defraud them. Id. § 4228. In Har-
man v. Hoskins, 56 Miss. 142, the court held that a mortgage given by
a merchant on his stock of goods, which authorized him to remain in
possession and continue business under the direction of a named trustée,
was upon its face fraudulent and void. An examination of the case
shows that it is not out of harmony with the cases that we hâve already
60 129 FEDERAL REPORTER.
cited. The mortgage evidently on its face showed that it did not serve
as a genuine security. The mortgagor was left in possession of the
stock of goods, with the power to sell the same, and to make purchases
to replenish his stock in the usual course of business. It did not pro-
vide that a dollar of the money for which he sold the goods should be
applied to the payment of the debt apparentlysecured by the mortgage.
The court, in declaring the mortgage void on its face, laid stress on the
fact that "nothing is said about cash sales or money thus derived."
In Joseph v. Levi, 58 Miss. 843, 846, the court held that a like mortgage
vk'as void on its face as to creditors, although it provided for monthly
accounts to be rendered to the trustée, and for payment to him of the
money received, to be applied, however, to payment of the current ex-
penses of the business and in making purchases to replenish the stock.
It will be noted that it made no provision for the application of tlie
proceeds of the sale of the ^oods in payment of the debt secured. The
court said :
"As the money was not to be applied to the discharge of the debt secured
by the terms of the deed of trust, and was to be liept in the business, the in-
strument is not distinguished from those which hâve been held to be incurably
viclous and void."
In each of thèse cases it seems clearly implied that, if provision
had been made in the mortgage for an application of the proceeds of
the sale of the goods to the payment of the debts secured, they would not
hâve been held void on their face. The fact that the mortgage permits
the mortgagor to hold the pToperty and deal with it does not make the
mortgage void. The rule, as announced in Mississippi, is that "it
is only where the conveyance so unmistakably reserves the right to the
mortgagor to deal with the property mortgaged as his own that ail
évidence to the contrary should be excluded as contradicting the writing
that a court can déclare the deed fraudulent in law." Britton v. Cris-
well, 63 Miss. 394, 401. The provision in the mortgage in question
hère requiring the proceeds of the sale of the goods to be applied to the
payment of the debt secured by the mortgage makes it unlike the
mortgages which the Suprême Court of Mississippi holds to be neces-
.sarily invalid. The court is of the opinion that the mortgage, on its
face, is not invalid.
The decree of the District Court is affirmed.
ALEXIS V. UNITED STATES,
(Circuit Court of Appeals, Flfth Circuit. April 5, 1904)
No. 1,134.
Laecent fkom THE MAILS— Indictment—Stamped Package.
In a prosecution under Rev. St. U. S. § 5467 [U. S. Comp. St. 1901, p.
3691], for larceny from the mails, an Indictment charging that the stolen
package had been placed in the mail, and came into defendant's possession
in his capacity as a mail clerk, was sufScient to authorize the admission
of évidence that the package had been stamped, aud the manner of such
stamping.
ALEXIS V. trXITED STATES. 61
2. Same— Names of Pebsons— Idem Sonans.
Where an Indlctment charged défendant with extracting from the mails,
embezzling, and stealing the contents of a package addressed to "L. Krow-
der," évidence that the pacljage was addressed to "L. Krower" did not
constitute a variance, such names being idem sonans.
3. Same— Teiai/— Reopening Case.
Where there was nothing in defendant's affidavit accompanying his ap-
plication to hâve the case reopened, and to be permitted to introduce
further évidence after the testimony had been closed, either as to the
nature of the évidence sought to be added, as to the witnesses by whom it
was expeeted to be given, or the reason why it had not been offered sooner,
to require the granting of the application, It was not an abuse of the
court's discrétion to deny the same.
4. Same— Requests to Charge.
Where, in so far as requests to charge were correct, they were given
by the court, either in modifications thereto or in the gênerai charge, and
each of them contained matter that was either erroueous, or not pertinent
to the proof, the requests were properly denied.
5. Same— Insteuctions— Witnesses— Credibility op Accused.
Where the court charged that défendant had a perfect right to testify,
and, having done so, his testimony should be treated like that of any other
witness, and that it was for the jury to flnd whether or not he had told
the truth, it was not error to add that, in eonsidering defendant's testi-
mony, which, if true, entitled him to an acquittai, the jury should consider
the very grave interest which he had at stake in the case.
8. Same— Reasonable Dotjbt.
Where the court properly charged the law relatin§ to reasonable doubt,
and declared that défendant was presumed to be innocent, and that such
presumption obtained until the governmeut convinced the jury beyond a
reasonable doubt that he was guilty, it was not error to add that, if a
doubt arose which was an unreasonable doubt, the jury should pay no at-
tention thereto.
7. Same— Omitted Instructions.
The omission of the court to give instructions that were not requested
by défendant was not ground for reversai.
8. Same — New TbiaI/— Présence op Défendant.
A défendant In a criminal case bas no right to be personally présent at
the hearing of a motion in his behalf for a new trial, and his absence at
such hearing wIU not invalidate a sentence subsequently passed on him.
In Error to the Circuit Court of tlie United States for the Eastern
District of Louisiana.
W. W. Howe, U. S. Atty.
W. O. Hart, for défendant.
Before FARDEE, McCORMICK, and SHELBY, Circuit Judges.
McCORMICK, Circuit Judge. The indictment in this case con-
tains two counts, each based on the last paragraph of section 5467 of
the United States Revised Statutes [U. S. Comp. St. 1901, p. 3691],
which is substantially as follows:
"Any such person (that Is, any such post office employé) who shall steal
any of the things aforesald (that is, the contents out of any letter, packet,
bag or mail of letters) which shall hâve come into his possession, either in
the regular course of his officiai duties, or in any other manner whatever,
and provided the same shall not hâve been delivered to the party to whom
it Is directed, shall be punishable by Imprisonment at hard labor," etc.
% 8. See Criminal Law, vol. 15, Cent. Dig. § 2412.
62 129 FEDERAL KEPORTEU.
The charging part of each of thèse counts was, substantially, that on
the i6th day of February, 1900, at the city of New Orléans, the de-
fendant, being then and there employed in a department of the postal
service of the United States, to wit, as a clerk in the post office at the
city of New Orléans, did unlawfuUy, willfully, and feloniously steal,
take, and carry away (certain articles named), ail being the property
of one F. M. Hamilton, and the (articles named) were then and there
stolen and taken as aforesaid by the said George D. Alexis from and
out of a certain package then lately "put into tlae mail" of the United
States at the post office in said city of New Orléans, and which then
and there had come into his possession in his capacity as such clerk, as
aforesaid, and by virtue of his said office and employment; and the
said package was directed in the ténor following, that is to say, "John
W. Francis, care of W. R. Irby & Co., New Orléans, La.," and had not
been delivered to the party to whom the same was directed, contrary
to the form of the statute, etc. In the second count the articles named
were différent, the ownership laid the same, and the count in other
respects the same, except that it allèges that the said package was
directed in the ténor following; that is to say, "Léonard Krowder,
New Orléans, La." There was a gênerai verdict of guilty on both
counts, and the accused was sentenced to imprisonment at hard labor
for a term of one year and one day. This sentence does not exceed
the punishment that might hâve been imposed on either one of the
counts of this indictment.
The first, third, and fifth errors assigned relate to the admission of
évidence in référence to the fact of the package having been stamped,
the manner in which it was stamped, and the absence of an allégation
in the count as to its having been stamped at ail. Thèse assignments
are not well taken, because it was not necessary to allège that the
package was stamped. Neither the language of the provision of the
statute under which the indictments were found nor the reason of the
statute requires any such allégation. The indictment having charged
that the package then lately put into the mail had come into his pos-
session in his capacity as such clerk was sufficient averment on that
point to admit the évidence over defendant's objection taken when the
évidence was ofîered. United States v. Hall (D. C.) 76 Fed. 568.
The second assignment is not well taken. It is in thèse words :
"Because the court erred in allowlng L. S. Woods, a wltness on behalf of
the United States, to testify on December 20, 1901, regarding the contents of
the package said to hâve been addressed to h. Krower, when the indictments
charge défendant with abstracting, embezzling, and stealing the contents
of a package addressed to L. Krowder."
The tenth assignment présents the same question.
"A name need not be correctly spelled in an indictment, if substan-
tially the same sound is preserved. The following are cases in which
the variance between the names as alleged and as proven was at least
as great as in the présent, and in which it was held that the variance
was not material: Bubb and Bopp [Myer v. Fegaly], 39 Pa. 429 [80
Am. Dec. 534]; Heckman and Haclcman [Bergmann's Appeal], 88
Pa. 120; Hutson and Hudson [Cato v. Hutson], 7 Mo. 147; Shafïer
and Shafer [Rowe v. Palmer], 29 Kan. 337; WooUey and Wolley
AI.EXIS T. TJNITED STATES. 63
[Power V. Woolley], 21 Ark. 462; Penryn and Pennyrîne [ElHott v.
Knott], 14 Md. 121 [74 Am, Dec. 519]." Faust v. United States, 163
U. S. 452, 16 Sup. Ct. II 12, 41 L. Ed. 224.
The fourth assignment of error is directed to the action of the court
in not reopening the case for further évidence after the testimony had
been closed. There was nothing in the affidavit accompanying the ap-
plication either as to the nature of the évidence sought to be added
to what had already been received, or as to the witnesses by whom it
was expected to be given, or as to reason why they had not been of-
fered sooner, to require the reopening of the taking of proof. The
motion was addressed to the discrétion of the trial judge, and his dis-
crétion was properly exercised.
The sixth, seventh, and ninth assignments of error are based on the
refusai of the judge to give certain requested charges. So far as
thèse requests were correct, they were given by the judge, either in cer-
tain modifications thereof that he made and gave, or in his gênerai
charge, and for this reason, and also because each of them contained
matter that was either not sound or not pertinent to the proof, they
were rightly refused.
The eighth error assigned is substantially embraced in the seventh.
The eleventh error assigned is because the court erred in the gênerai
charge in giving this part thereof to the jury, to wit:
"Therefore I say to you, In considering the testimony o( the défendant,
which, if true, entitles him to acquittai, you are to consider the very grave
interest that he has at stake in this case."
This is only the closing Une of the judge's charge on this subject.
This is the context :
"When a défendant in a case of this kind takes the stand (which he has a
perfect right to do), he Is subjected to ail the obligations of a witness, and
his testimony is to be treated like the testimony of any other witness ; that
is to say, it will be for you to say, remembering the matter of his testimony,
and the manner in which he gave it, his cross-examination, and everythlng
else in the case, whether or not he told the truth. Then, again, It is for you
to remember — you hâve a perfect right to do so, and it is your duty to do so
— the very grave interest the défendant has in this case. Now, that does not
mean, and you must not understand me to say that It means, that whenever
a man is accused of a crime, and takes the stand in behalf of himself, he
will naturally commit perjury ; but, of course, as he places himself as a wit-
ness, he stands like any other witness. But his interest, or bias, or anything
else that may afCect his testimony, is a matter which, of course, the jury is
bound to take into considération. Therefore I say to you, in considering the
testimony of the défendant, which, if true, entitles him to an acquittai, you
are to consider the very grave interest which he has at stake in this case."
This charge is not erroneous. Reagan v. United States, 157 U. S.
301-311, 15 Sup. Ct. 610, 39 L. Ed. 709.
The twelfth error assigned is:
"Because the court erred in the gênerai charge by giving this part thereof
to the jury, to wit: 'Of course, if a doubt arising in your mind is an unrea-
sonable doubt, you should pay no attention to that doubt' "
The judge had, in the language used by the defendant's counsel in
one of his requests, given the jury the following:
"The case of the United States against the défendant must be made out
completely to your satisfaction, and beyond ail reasonable doubt"
64 129 FEDERAL EBPOUTEE.
Afterwards, in the gênerai charge, he instructed tlie jury tlius :
"In a case of this kind you cannot flnd the défendant gullty, unless yon are
satisfied of his guilt beyond a reasonable doubt. You must remember that
in a crlmlnal case the amount of proof that is required on the part of the
government Is différent from the amount of proof that is required of the suc-
cessful party in a civil suit. In a civil suit the verdict goes in favor of the
party who has the prépondérance of proof. That means the party who has
more proof than the other slde. But in a criminal case you start out wlth
the presumptlon that the man brought to the bar of the court is an Innocent
man, and the jury slt in their seats, and await the time. If It ever cornes,
when the government convinces them beyond a reasonable doubt that the man
is guilty. Whenever that condition of things is produced In your minds, then
it is your bounden duty to find the défendant guilty, regardless of what the
conséquences may be ; and if you are satisfied beyond a reasonable doubt that
the défendant is guilty, then you bave no right to withhold that verdict sim-
ply because of some question of sentiment on your part, or some question of
mercy, or some question of préjudice. • * * While I hâve said to you
that you must be convinced beyond a reasonable doubt, do not make the mis-
take to believe that you must be satisfied beyond ail possible doubt, because
that Is not the law, and It would not be reasonable, either, that you must
be satisfied beyond every possible doubt. There is nothing certain except in
the domain of mathematlcs. I do not know what could be proven beyond
ail possible doubt Ail that you are called upon to do is to détermine whetli-
er or not this défendant has been proven to you to be guilty in such a way
that there is no reasonable doubt arising in your minds. Of course, if the
doubt arising In your minds is an unreasonable doubt, you should pay no
attention to that doubt. But if, as reasonable men, considering a matter of
grave importance, you should corne to the conclusion that a certain amount
of proof establishes that conclusion In such a manner that you hâve no rea-
sonable doubt about it, then that is the condition of mind In which you must
be before you flnd this man guilty ; but you are not required to go beyond
that and be convinced beyond every possible doubt"
The thirteenth assignment of error is:
"Because the court errcd In not specially charging the jury as to their du-
ties under each count of the indictment and that they might acquit as to one
and convict as to the other."
It is no ground for reversai that the court omitted to give instruc-
tions that were not requested by the défendant. Isaacs v. United
States, 159 U. S. 487, 16 Sup. Ct. 51, 40 L. Ed. 229.
The fourteenth assignment of error présents an action of the trial
judge which is not reviewable in this court.
The fifteenth assignaient of error — that the court erred in overruling
the motion in arrest of judgment — is disposed of by the action we hâve
taken on the previous assignments. The grounds of that motion were
the same as the suggestions of error we hâve already considered.
The sixteenth and last error assigned is :
"The court erred in hearing and deciding the application made for a new
trial when défendant was not présent in court."
"A défendant in a criminal case has no right to be personally présent
at a hearing of a motion in his behalf for a new trial, and his absence
will not invalidate a sentence subsequently passed upon him." This is
the syllabus to the case of Commonwealth v. John S. Castello, 121
Mass. 371, 23 Am. Rep. 277. Judge Gray, who delivered the opinion
in that case, uses this language :
"The rule that the défendant has a right to be présent at every step of tha
proceedings against him in behalf of the commonwealth, from arraignment
AMERICAN 8. S. CO. V. AMERICAN STEEL BARGE OO. 65
to sentence, does not apply to a motion for new trial, whleh Is not a necessary
step in those proceedings, and is not made by the commonweaith, but by the
défendant himself, and is addressed to the discrétion of the court, and is not
followed by any new judgment agalnst hlm."
Montgomery v. United States, 162 U. S. 410, 16 Sup. Ct. 797, 40 L.
Ed. 1020; Coffin V. United States, 162 U. S. 664, 16 Sup. Ct. 943, 40
L. Ed. 1109; Sparf and Hansen v. United States, 156 U. S. 51, 15 Sup.
Ct. 273, 39 L. Ed. 343 — are referred to in support of the gênerai views
advanced in the foregoing opinion.
Having noticed the numerous grounds of error assigned, we lind
them ail without merit, and the judgment is therefore alïirmed.
AMERICAN S. S. CO. v. AMERICAN STEBL BARGE CO. et aL
(Circuit Court of Appeals, Slxth arcuit. April 2, 1904.)
No. 1,251.
1. Collision— CoNTBiBUTOEY Fault— Bueden and Measuee of Peoof.
Where the fault of one vessel is palpable and adéquate to account for a
collision, she cannot impugn the management of another vessel, except on
clear proof of contributory fault.
2. Same— Steamee Passing between Meeting Tows.
The Crescent City, a large lake steamer, laden with iron ore, when com-
ing down the St. Clair river, at night, overtook and attempted to pass
the steamer Trevor, with two barges in tow tandem, each on a Une 750
feet long, just as they were passing round the Southeast Bend. At the
same time the Maricopa, with the large barge Manila in tow, both in
water ballast, was passing up. The meeting vessels were within sight
of each other's lights when the Crescent City started to pass the overtaken
tow, and soon thereafter passing signais were exehanged, and in pursuance
thereof the descending steamer and tow kept toward the western side of
the ehannel, while the Maricopa and tow were as close as possible to the
eastern bank. As the Maricopa was rounding the bend she was passed
by the Crescent City, which then took a straight course, maklng toward
the Canadian or eastern shore, and kept It without checking her speed
of about 12 miles by the land until she collided with the Manila, then
sheered off, and struck the towline behind the Trevor, throwing her across
the ehannel, where she was struck by the first tow before she could get
eut of the way. There was a distance of about 200 feet between the
ascending and descending tows. The Trevor was going at a speed of
9V2 miles by the land, and the Maricopa of 8 miles. There was a
wind from the southeast, which tended to dirlft the Manila toward
the ceater of the ehannel. Ueld, that the Crescent City was clearly in
fault, both because of her excessive speed while trying to pass between
the two tows at such a place, and for the course she took after passing
the Maricopa, dlrected toward the course of the Manila; that neither of
the other vessels was in fault, the speed of the Maricopa apparently being
necessary to prevent the Manila from drifting, and it appearing that the
latter was foUowing her steamer, and did ail that was possible to avoid
the collision.
Cross-Appeals from the District Court of the United States for
the Eastern District of Michigan.
Goulder, Holding & Masten, for appellant.
Hermon A. Kelley (Hoyt, Dustin & Kelley, of counsel), for appellce
American Steel Barge Co.
129 F.— 5
66 129 FEDERAL EEPOETER.
John C. Shaw (Charles B. Warren, William B. Cady, and Herbert
K. Oakes, of counsel), for appellee Minnesota S. S. Co.
Before LURTON, SEVERENS, and RICHARDS, Circuit Judges.
RICHARDS, Circuit Judge. The séries of collisions out of which
this case arose took place on the St. Clair river between 8 and 9 o'clock
the night of August 9, 1899. The night was dark, but clear. A wind
was blowing across the channel from about S. S. E., probably strong
enough to drift a slow-going tow. Six vessels were involved. The
whaleback steamer John B. Trevor, with the barges 131 and 118 in
tow, ail loaded with ore, was bound down, followed by the steamer
Crescent City, also loaded with ore, while the steamer Maricopa, with
the barge Manila in tow, both in water ballast, was bound up. The
Trevor was 308 feet long, the "131" was 292 feet, and the "118" was 285
feet. The tow lines were each about 750 feet long. The Trevor and
her barges each drew about 18 feet, and were making about •jYi
miles an hour through the water. The Crescent City was 426 feet
long, drew about 18 feet, and was making about 10 miles through the
water, or 12 miles by the land. The Maricopa was about 428 feet long,
and the Manila about 450 feet long ; the towline between being about
800 feet long. The Maricopa drew about 15 feet aft and l or 2 feet
forward, the Manila drew about 7 feet aft and 6 feet forward, and their
speed was about 10 miles an hour through the water, or about 8 by
the land. The scène of the collisions was what is known as the "South-
east Bend," beginning about 2j4 miles above the upper end of the St.
Clair Flats Ship Canal. The river hère winds through the low marsh-
land known as the "St. Clair Flats." There is nothing on the Canadian
side to obstruct the view. So a vessel entering the upper end of the
bend commands the entire bend and river to the ship canal. The
navigable channel varies in width, being about 900 feet at the points
of collision, but less above, and is very crooked; a descending vessel
turning from a course about northwest to a course almost southwest,
while an ascending vessel swings from a course about northeast to a
course nearly southeast. When the Crescent City reached the bend,
coming down, she was fast overtaking the Trevor and her tow. The
Maricopa and Manila were then approaching or entering the bend, com-
ing up, and their lights were in plain view over the flats on the
Canadian side. The Crescent City gave a two-blast signal, which was
answered, and proceeded, without checking her speed, to pass the
Trevor tow to port. While the Crescent City was thus overtaking
and passing the Trevor tow in the bend, the Trevor, and later the
Crescent City, exchanged one-blast signais with the Maricopa, thus
agreeing to pass port to port, which required the Crescent City to
direct her course between the Trevor tow and the Maricopa tow. The
Crescent City met and passed the Maricopa safely. The distance be-
tween the Maricopa and the Trevor tow at that time was at least 200
feet, and between the Crescent City and the Maricopa between 50 and
75 feet. The Maricopa was on a curved course, gradually swinging,
under a port wheel, around the bend. The Manila was following her.
About this time the Crescent City adopted a southwesterly course, bear-
AMERICAN 8. S. 00. V. AMERICAN STEEL BARGE CO. 67
ing towards the Canadian shore, which is described by her captain.
This course was straight, and she kept it without checking her speed
until she collided with the Manila; the port bow of the Crescent
City coming in contact with the port quarter of the Manila. The dis-
tance between the Manila and the Trevor at this time was about 200
feet. From this collision the Crescent City sheered sharply to star-
board, and brought up in the bight of the towline between the Trevor
and the "131," barely missing the stern of the Trevor. The Trevor
was thrown broadside the channel, heading for the Canadian shore.
She backed, and, as the towline dropped below the stem of the Crescent
City, eut it. The Crescent City then went ahead and under a star-
board helm, straightened up, and passed on down. The Trevor imme-
diately started her engines, but, before she could get out of the way,
the "131," coming down at a speed of about 6 miles, struck her on the
port side aft, staving a large hole, and making it necessary to beach her
on the Canadian bank. The court below condemned the Crescent City,
the Maricopa, and the Manila — the first two because of their speed, and
the last because of her position; taking the view that the stern of
the Manila was wrongfully in the course of the Crescent City, but that,
if the Crescent City and the Maricopa had checked down after signal-
ing to pass, there would hâve been time, after discovering the danger
ahead, to avoid the collision. The Trevor and her barges were held
blameless. From the decree based on this finding, the parties hâve ap-
pealed.
1. The négligence of the Crescent City was palpable and persistent.
It began with her speed, was aggravated by her course, and rendered
inexcusable by her persistence in both, despite a threatened collision.
When she reached the upper end of the bend, she had a clear view of
the canal. She could see not only the Trevor tow in the bend ahead,
going down, but the Maricopa tow below it, coming up. She should
hâve considered the danger of trying to pass thèse tows in that crooked
channel, without checking her speed. But she wanted to pass the
Trevor tow before it should reach the canal, so as not to be delayed
there, and for this reason kept her speed, and hurried headlong between
the descending and ascending tows. As was said in The Syracuse, 9
Wall. 672, 676, 19 L. Ed. 783 : "She had no right thus to hurl her-
self like a projectile into the midst of the vessels before her, taking the
hazard of the conséquences." So much the learned judge below found,
and we concur in this conclusion.
2. But the fault did not end with the speed, for the Crescent City,
before she was out of the bend or had passed the Maricopa, adopted a
straight course, which converged toward the Canadian side, up which
the Maricopa and Manila were then working on a curved course.
The Crescent City had not yet passed the "131." The straight course
taken constituted a short eut across what remained of the bend, inevit-
ably carrying the Crescent City close to the course of the Maricopa
tow. Such a course, under the circumstances, was inexcusable, yet
it is clear it was taken. The captain of the Crescent City says that
when they met the Maricopa his boat was going steady on a straight
course. "There is a little curve there, but we were going straight
then." This course was not changed until he struck the Manila. He
68 129 FEDERAL EEPORTER.
marked this course upon the map, and the point of collision was where
the line approached the Canadian side. The second mate stated they
were working toward the Canadian shore while passing the Maricopa.
The captain of the "131" said the Crescent City was heading a point or
a point and a half further toward the Canadian bank than he was.
The captain of the Maricopa testified that, when the Crescent City
passed him, she appeared to be heading not quite a point on to the
Canadian side. The second mate stated that, when the Crescent City
passed the Maricopa, she was drawing in ail the time on their course.
Ail this makes it plain that the Crescent City took a course which car-
ried her over toward the Canadian shore. At this time there was a
space, variously estimated at between 200 and 300 feet, left for her be-
tween the descending and ascending tows. Ail the vessels were in
the bend. The Trevor and her tow were on the American side of
the range, near the middle of the channel. The Maricopa, with the
Manila 800 feet behind, was gradually swinging around the bend, hug-
ging the Canadian bank. She was without cargo, and so was her
tow. The Manila was a very large barge — 450 feet long — and was
drawing only 6 feet forward and 7 feet aft. She exposed a broad sur-
face to the wind, and the wind was blowing across the channel from
the Canadian side. Under thèse circumstances, in order to prevent the
Manila drifting to leeward, it may hâve been advisable not only to tow
her at a good speed, but to some extent to hold her in to the wind.
Such being the situation, it was the plain duty of the Crescent City to
divide the space between the two tows and follow a winding course,
keeping her distance from the ascending tow until she had cleared it.
Instead of doing this, in reckless disregard of the existing conditions,
the Crescent City laid her course a point or a point and a half more
toward the Canadian side than the course of either the descending
or ascending tows, and, with strange persistence, held it until she
struck the Manila.
3. The captain of the Crescent City admitted that when abreast the
stern of the Maricopa he discerned the Manila, and realized she was
across his course. At that time a distance of some 1,200 feet separated
the Crescent City and the aft quarter of the Manila. The captain was
asked whether he tried to change his course or check his speed, and an-
swered that he did not. He was asked, "Why not?" and gave three
différent excuses: First, that he did not hâve time; second, that he
did not think it was necessary ; and, third, that he did not hâve room.
None of thèse excuses are satisfactory. In our opinion, there was
time and opportunity both to check and to port. If this had been donc,
we cannot but believe the Crescent City would hâve cleared the Manila.
Twenty feet to starboard would hâve taken her by. There was ample
space between the Manila and the Trevor to hâve made this maneuver.
The captain stated there was at least 200 feet. Why nothing was donc,
we can hardly conjecture.
4. We corne now to consider the conduct of the Manila and the
Maricopa. The lower court condemned both — the former on account
of her position, the latter on account of her speed. For the reasons
we hâve given, the fault of the Crescent City is palpable. Both her
speed and her course were reckless and inexcusable. The doctrine of
AMERICAN S. S. CO. V, AMERICAN STEEL BARGE CO. G9
The City of New York, 147 U. S. 72, 85, 13 Sup. Ct. 211, 37 L. Ed. 84.
followed by this court in The Australia, 120 Fed. 220, 224, 56 C. C. A.
568, is therefore applicable. The fault of the Crescent City being adé-
quate to account for the collision, she may not impugn the manage-
ment of either the Manila or the Maricopa without clear proof of con-
tributing faults on their part. As was said by the Suprême Court in
the case of The Victory, 168 U. S. 410, 423, 18 Sup. Ct. 149, 155, 42
L. Ed. 519, quoted by this court in the case of the steamer Philip
Minch, 128 Fed. 578:
"As between thèse vessels, the fault of the Victor belng obvious and Inex-
cusable, the évidence to establish fault on the part of the Plymothian must
be clear and convlncing in order to make a case for apportionment"
Now, the charge against the Manila (sustained by the lower court)
is that she got into the path of the Crescent City by failing to follow
her steamer, and that against the Maricopa is that she towed the
Manila too fast to permit her to get out of the way of the Crescent
City. But if the Crescent City had no right to take the course she did,
then the Manila did not get into her path. It was not the path of
the Crescent City, but that of the Manila, which was infringed. If the
Crescent City had divided the space between the two tows, she would
not hâve been against the Manila when the Manila was 200 feet from
the Trevor. The Crescent City made no complaint of the course of
the Maricopa, and the proof fails to show that the Manila was not fol-
lowing the Maricopa as closely as prudent navigation permitted. In
rounding the bend with the wind ofï the Canadian shore, she may hâve
tailed some — it may hâve been advisable to hold her up some. But this
should hâve been foreseen and allowed for by the Crescent City.
The apparent swing of the Manila's stem into the stream was doubtless
the resuit partly of her proper navigation in rounding the bend with a
wind abeam, and partly of the wrongful course of the Crescent City.
If the Crescent City had been pursuing a course midway between
the two tows, and parallel with theirs, the stern of the Manila would
not hâve seemed to swing out into the stream. It is conceded that,
when the Crescent City was discovered bearing down upon the Manila,
every précaution was taken on the latter. Her helm was gradually
ported until hard aport, and, when the Crescent City reached her bow,
was put hard astarboard. As to the speed of the Maricopa: This
steamer was proceeding at about 10 miles an hour through the water,
or 8 by the land. The signal of the Crescent City compelled her to
take the Canadian side, from which the wind was blowing. It was
necessary not only to keep close to that side, but to keep her tow there ;
that is, to keep going at a speed which would prevent the tow from
drifting. Her master testified that he considered it imprudent to check
down, for fear the Manila would sag to leeward. Under the rule, the
proof must satisfy us that the master of the Maricopa was clearly
wrong in not checking down. It does not. Both as to the Manila and
the Maricopa, the évidence fails to meet the rule which we hâve
quoted. In neither case is it so clear and convincing as to establish the
fault charged. We are not satisfied that the Manila was where she
had no right to be, nor are we convinced that the Maricopa was tow-
ing the Manila at too great a speed.
70 129 FEDBEAL EEPOETER.
5. The second collision — that between the Trevor and tlie "131" —
can be disposed of in a few words. The Crescent City, being at fault
iti the collision with the Manila, must be held responsible for the
collision with the tovvline between the Trevor and the "131." The sole
question is whether the Trevor or the "131" neglected to do anything
that could hâve been done to avert or avoid the collision which took
place when the Crescent City got out from between them and passed
on down. We are not satisfied that anything effective could hâve
been done. The vessels were then in extremis. There was no time for
either the Trevor to acquire headway, or the "131" to respond to a
port helm. They were so close together and the time so limited that
the accident was inévitable.
The decree of the court below is reversed, and the case remanded,
with directions to assess the damages and costs against the Crescent
City.
NATIONAL SURETY CO. V. UNITED STATES.
(Circuit Court of Appeals, Eighth Circuit Marcli 21, 1904.)
No. 1,936.
1. Bond of Lettee Caeeiee— Liabii,itt of Sukœty— Collecting Lettees to be
Registeeed.
Tlie bond of a letter carrier and of his surety for the faithful diseliarge
of tlie dutles and trusts imposed upon the former as a letter carrier,
"either by the postal laws of the United States or the rules and régulations
of the Post-Office Department of the United States," binds the surety for
the faithful discharge by his principal of the duty of collecting letters and
packages to be reglstered which was imposed upon the letter carrier by an
order of the Post-Offlce Department during the term of the bond.
2. SAMB — CONSTETJCTION— ACCOKDING TO LaWS AND REGULATIONS.
The parties to a bond for the faithful discharge of the duties of an
office according to laws and régulations, which the obligée has the right
and power to change at any time, necessarily contemplate and Intend to
guaranty thereby the discharge of the duties of the office Imposed upon
the principal by the subséquent législation or régulation of the obligée
during the term of the bond, which are within the scope of the office, and
are germane to, and naturally comiected with, its duties when the bond
Is made. They do not warrant or Intend to guaranty the discharge of
duties beyond the scope of the office, disconnected with ita business or
foreign to its duties at the time of the exécution of the bond.
3. Samb— DuTï OF Collecting Lbttees to be Registeeed Gbemane to Foemeb
Duties.
The duty of collecting letters and packages to be reglstered Imposed
upon letter carriers by the order of the Postmaster General of December
5, 1899, is within the scope of the office of a letter carrier, and germane to
previous duties pertalning to it.
4. Same— United States mat Recovee of Sukety foe Theft by Peincipal—
Bailee fob Hike.
The United States may maintain an action against the surety on the
bond of a letter carrier who has stolen letters to be reglstered for the value
T 1. Liabillties of sureties for acts of offlcers under color of office, see note
to Chandier v. Rutherford, 43 C. C. A. 222.
If 4. See Bailment, vol. 6, Cent DIg. §§ 98-100, 136.
NATIONAL SUEETT CO. V. UNITED STATES. 71
of the contents of the stolen letters, where the contents of no single letter
exceeded $10 in value, although the owners of the letters hâve made no
claim against the government for indemnity, and nothing bas been pald
to them.
A bailee for hire of services may maintain an action of trespass, trover,
or conversion for the disturbance of bis possession by a wrongdoer, and
may recover the vaine of the property as damages.
(Syllabus by the Court)
In Error to the District Court of the United States for the District
of Nebraska.
Ralph W. Breckenridge (Charles J. Greene and James C. Kinsler, on
the brief), for plaintiiï in error.
W. S. Summers and S. R. Rush, for the United States.
Before SANBORN, THAYER, and HOOK, Circuit Judges.
SANBQRN, Circuit Judge. On April i, 1899, 79 letter carriers at
the city of Omaha in the state of Nebraska, as principals, and the Na-
tional Surety Company, as their surety, gave a bond to the United
States in the sum of $79,000, conditioned that if each of the principals
"shall faithfully perform ail the duties and trusts imposed upon him
as such letter carrier either by the postal laws of the United States or
the rules and régulations of the post -office department of the United
States and shall faithfully account for and pay over to the postmaster
at Omaha, Nebr., ail moneys which shall corne into his hands as such
letter carrier, and shall, upon the termination of his office, return to
the proper officer ail property of every kind and description which
shall be in his possession as such letter carrier," then the obligation
should be void, but otherwise of force. At the time this bond was
executed thèse letter carriers were forbidden to collect or receive let-
ters or packages to be registered, but it was a part of their duties to
deliver registered mail, and to collect and deliver other letters and
packages. Postal Laws & Régulations 1893, § 1049. In December,
1899, the Postmaster General made an order to the effect that letter .
carriers in the residential districts of certain cities, one of which was
Omaha, should collect certain letters to be registered. Order No. 762,
Dec. 5, 1899; Postal Laws and Régulations 1902, § 805. Under this
order, John Eich, one of the principals in the bond, collected three let-
ters to be registered, which contained, respectively, $6, $3.50, and
$1.50, and rifled them of their contents. The United States has made
no restitution of any of this money to either of the senders or addressees
of the letters. It has, however, brought this action against the surety
Company to recover the $11 which the letters contained, and a judg-
ment for that amount has been entered in its favor, pursuant to a per-
emptory instruction to the jury that the plaintiff was entitled to their
verdict.
The peremptory instruction of the court, and the judgment which
followed it, are challenged in this court upon two grounds: (i) That
the imposition of the duty of collecting letters and packages to be
registered, upon the principal, Eich, after the bond in suit was given,
72 129 FEDERAL EEPORTBK.
added to the duties of the office of the letter carrier a new duty and a
new responsibility, for which the surety was net liable upon its bond;
and (2) that the United States is entitled to no recovery in any event,
because it has neither incurred any liability, nor sufifered any loss, by
the theft of the money by the principal in the bond.
The agreement of a surety must be strictly construed. His respon-
sibility may not be extended by implication beyond the terms of his
bond. An additional liability, which his contract does not clearly show
to hâve been within the reasonable contemplation and intention of the
parties to it wlien it was made, cannot be imposed upon him by the
subséquent action of the obligée or of the principal in the bond. Miller
V. Stewart, 9 Wheat. 680, 701, 6 L. Ed. 189; U. S. v. Singer, 82 U. S.
III, 122, 21 L. Ed. 49.
But the contract of a surety, like ail other contracts, must hâve a
reasonable construction — an interprétation, which, while it carefuUy
restricts his responsibility to that which he agreed to undertake, does
not fail to hold him to that liability which, by the plain terms of the
agreement, he contracted to assume. The surety in the case in hand
agreed with the United States to be liable for the faithful discharge
by its principal, Eich, of ail the duties and trusts imposed upon him
as a letter carrier either by the postal laws of the United States, or by
the rules and régulations of the Post-Office Department of the nation.
When this bond was executed the United States had the right and
power, by act of Congress, and the Postmaster General had the right,
by rule or order, to increase, diminish, or modify the duties of the
principal in this bond, as a letter carrier, at any time they saw fit ; and
ail the parties to this contract were aware of this fact. The proposi-
tion has become too well settled to admit of discussion that an obliga-
tion of a surety for the faithful discharge of the duties of an office
according to the laws and régulations which prescribe those duties,
made to one who has the right and power to change such laws and
régulations at any time, is, in its true interprétation and meanîng, a
contract for the faithful discharge of the duties of the office according
'to the laws and régulations, not only as they are at the time when the
bond is made, but also as they shall subsequently become during the
term of the bond, provided only that subséquent législation or régula-
tion adds no new duty or responsibility which is not germane to the
duties or within the scope of the office at the time of the making of
the bond. AU duties prescribed by subséquent législation or régula-
tion which are of the same kind as those previously pertaining to the
office, which are within its scope and which naturally belong to its busi-
ness, are within the reasonable contemplation and évident intention of
the parties to such a contract, because they know the necessity and
probability of changes in the duties of the office, and the bond binds
principal and surety alike for their faithful discharge. U. S. v. Singer,
82 U. S. III, 122, 21 E. Ed. 49; U. S. v. Powell, 81 U. S. 493, 500,
20 L. Ed. 726; U. S. v. Gaussen, 25 Fed. Cas. 1267, 1269, No. 15,192;
Postmaster General v. Munger, 19 Fed. Cas. 1099, 1103, No. 11,309;
Boody v. U. S., 3 Fed. Cas. 860, 864, No. 1,636; White v. Fox, 22
Me. 341, 347; U. S. v. McCartney (C. C.) i Fed. 104, 106, m ; Chad-
wick V, U. S. (C. C.) 3 Fed. 750, 755 ; King v. Nichols, 16 Ohio St.
NATIONAL SmRETT 00. V. UNITED STATES. 73
82; U. s. V. Cheeseman, 25 Fed. Cas. 414, No. 14,790; Murfree on
Officiai Bonds, §§ 711, 712, 713.
When this bond was executed the collection and distribution of let-
ters and packages which were not registered, and which might never-
theless coiitain money or other articles of value, and the distribution
of registered letters and packages, were some of the duties of the prin-
cipal as a letter carrier. The collection of letters and packages to
be registered was a duty of the same kind as the duty of the distribu-
tion of registered letters and packages. It was a duty within the
scope of and naturally connected with the business of the office. Hence
the liability of the surety for its discharge falls within the true inter-
prétation of its obligation to answer for the faithful discharge of the
duties of its principal according to the laws and régulations which pre-
scribe them.
The second objection to the judgment is that the United States has
neither incurred any liability nor sufifered any loss by the theft of the
contents of the letters, and hence it cannot maintain an action for dam-
ages on account of it. In support of this contention, attention is called
to the fact that section 3926 of the Revised Statutes [U. S. Comp. St.
1901, p. 2685]' provides that the Postmaster General shall make rules
under which the owners of first-class registered matter shall be indem-
nified by the United States for losses thereof through the mails, to
amounts not exceeding $10 for any one registered pièce; that such
rules hâve been prescribed ; that thèse rules require that claims for
indemnity shall be made within one year from the dates of the losses
(Postal Laws & Régulations 1902, § 900) ; that there is no averment or
proof that any claim for indemnity for the loss of any of the moneys
hère in question has ever been made ; and that the government admits
that it has never paid anything to any one on account of it. The right
of the nation, however, to a recovery in this action, is not necessarily
limited by the acts or omissions of the owners of the stolen money since
the theft. It dépends upon the facts and circumstances when the mon-
ey was stolen. When this was donc, the money was in the custody^
the possession — of the United States under its contract with those who
had intrusted the letters to its care to safely carry and deliver them to
their addressees for the valuable considération which it had received
by virtue of the stamps upon the letters which had been purchased from
it. The contract between the United States and the owners of the
letters was a bailment of the class known as "locatio operis mercium
vehendarum." It was a carrier — a bailee of the letters and their con-
tents for hire of labor or services. From this carrier or bailee Eich
took and converted the letters and their contents to his own use. But
a bailee may maintain an action of trespass, of trover, or of conver-
sion against a wrongdoer for his disturbance of his possession of the
property. The Beaconsfield, 158 U. S. 303, 307, 15 Sup. Ct. 860, 39
L. Ed. 993 ; The New York (D. C.) 93 Fed. 495, 499 ; Shaw v. Kaler,
106 Mass. 448; Eaton v. Lynde, 15 Mass. 242; Burdict v. Murray, 3
Vt. 302, 21 Am. Dec. 588. The United States, therefore, was not
without sufficient interest in the subject-matter to enable it to recover
of Eich, the letter carrier, the entire value of the property he took, as
its damages for the conversion of the money. But Eich converted the
74 129 FEDERAL REPORTER.
letters and theîr contents when he was in the act of performing his
duty of coUecting and delivering them to the postmaster at Omaha,
and when he and the surety company were under an agreement with
the plaintiff that they would pay ail damages, not exceeding $i,ooo,
which resulted to it from Eich's failure to discharge his duties faith-
fully, and to account and pay over to the postmaster ail moneys which
should come into his hands as a letter carrier. Since the government
was entitled to recover the value of the letters as its damages for their
conversion, this value was also the measure of the damages it sus-
tained under the bond, and a cause of action against the obligors in
the bond to recover thèse damages arose as soon as the theft of the
letters was completed. As soon as the conversion was effected, the
United States had a complète right of action against the obligors upon
the bond for the value of the property taken by the principal, and each
of the respective owners of the letters had an indefeasible claim against
the government for the value of the contents of his letter. The right
of action of the United States, however, was not conditioned, created,
released, or affected by the fact that the owners of the letters presented
or failed to présent their claims for indemnity to the government, and
this fact constituted no défense to this action.
The judgment below must accordingly be affirmed, and it is so or-
dered.
JOHNSTON V. FAIRMONT MILLS et al.
(Circuit Court of Appeals, Fourth Circuit February 2, 1904.)
No. 478.
1. Sales— CoNTBACT Made throuqh Broker— Reqtjieement of Confiemation
BY Principal.
Wliere there was an establislied custom in tlie cotton trade for botli
buyer and seller to conflrm to each other in writing a sale made by a
broker, an offer by a broker to sell cotton for future delivery to a cotton
mill, accepted by the mill company "subject to confirmation" by the seller
named in the offer, did not create a contract, and the acceptance was sub-
ject to withdrawal at any t'ime before such confirmation.
2. S AME— Acceptance of Offeb.
A proposai to accept an offer for the purehase of cotton on terms varylng
materially from those offered is a rejection of the offer, and does not create
a contract binding the purchaser.
3. Same— Waiveb of Confiematigh.
Where an offer by a broker to sell cotton for future delivery was ac-
cepted subject to confirmation by his principal, as customary in the trade,
and before confirmation the seller became insolvent, a demand for security
by the intending purchaser was not a waiver of the requirement of con-
firmation.
In Error to the Circuit Court of the United States for the District of
South Carolina.
For opinion below, see Ii6 Fed. 537.
ïhis is a writ of error to a judgment of the Circuit Court of the United
States for the District of South Carolina rendered on the 4th day of Augiist,
Il 2. See Sales, vol. 43, Cent. Dig. § 47.
JOHN8TON V. FAIBMONT mUiS. 75
1902, dtsmlsstng at the cost of the plaintlff a certain action at law Instltuted
In said court against the défendants. The facts may be brlefly stated as fol-
lows : The appellant instltuted this action for the recovery against the Fair-
mont Mills, a corporation of the state of South Carolina, and L. Guy Harris,
as receiver of said corporation, damages for the breach of two alleged contracts
entered into between the said Fairmont Mills and himself on or about the lOth
and 15th days of Octoher, 1900, under whlch the plaintlff contracted to sell and
deliver to the Fairmont Mills 500 baies of cotton, 100 of said baies to be deliv-
ered during each of the months of February, March, April, May, and June,
1901, to be paid for as follows: For the cotton delivered in February, March,
and April, 1901, 10% cents per pound ; for the remainder, lOi^ cents per pound.
That after the mailing of said contracts cotton deelined rapidly, and on or
about Oetober 28, 1900, the Fairmont Mills uotifled the plaintlff that it can-
celed the contracts, and would not accept, receive, or pay for the cotton. That
the plaintlff was always ready to carry out the contract on hls part, and was
prevented from so doing by the action of the défendant. That, owiiig to the
décline in the price of cotton, plaintlff was prevented from placlng the cotton
at the price agreed upon, and, as a conséquence, was damaged in the sum of
$4,687.50. The défendants deny the existence of the contracts, and, while con-
ceding that there were negotiations through one C. P. Mathews, a cotton broker,
looking to such contracts, they inslst that the broker dld not submit to the two
parties the same terms, and never reached an agreement as to the terms, and
the contracts were never consummated. Défendants further assert that, while
negotiations were pending, plaintlff became insolvent, 'rt'hereupon they warned
hlm, unless be furnished a proper guaranty that he could perf orni the contract
on his part, if eompleted, by uoon of the 27th of Oetober, 1900, they would not
conclude the same ; that the plaintlff failed to do this, and the défendant mills
notifled him that the deal was off, and sought cotton elsewhere.
A jury trial being walved, pursuant to the act of Oongress, the case was sub-
mitted to the judge of the court below, who, after stating the facts to be :
"The transaction occurred through the agency of C. P. Mathews. Mr.
Mathews Is a cotton broker reslding in Spartanburg, South Carolina, doing
business in the Carolinas, chlefly with cotton mills. On lOth Oetober, 1900, Mr.
Harris, président of the Fairmont Mills, made an offer to hlm, as such broker,
to buy cotton, 100 baies for each of the months of February, March, and April,
at 10% cents. He communicated the offer by telegram to the plaintlff, at Me-
ridlan, Mississippi, and received by telegram, the same day, authority to accept
the offer of 300 baies at 10%, shipments named. He communicated by téléphone
to Mr. Harris the receipt of this authority, and on the next day (llth Oetober)
wrote Mr. Harris as follows :
" 'I beg to confirm sale to you of 300 B-C to you at 10% landed Moore's So.
Ca., for a/c of A. S. Johnston, Meridlan, Mississippi. The cotton to be half
each, st. and good mid., to be shipped 100 B-0 each in February, March and
April ; wts. guaranteed wlthin three pounds. Please conflrm sale and oblige,
" 'Yours truly, 0. P. Mathews.'
"It does not appear, except by this letter, that Mr. Harris knew who woald
furnlsh the cotton. On receipt of this letter, Mr. Harris replies :
" 'I hâve your letter of this date [llth Oetober] conflrming sale to us of
300 B-C, landed at Moore's, So. Ca. The cotton to be half each st. and good
mid., and 100 baies delivered each month of February, March and April next,
wts. guaranteed wlthin three pounds, and hereby accept offer of same subject
to A. S. Johnston's confirmation.
" 'Yours truly, W. I., Harris, Près.'
"On the 15th Oetober, 1900, Mr. Harris made another offer to C. P. Mathews
for the purchase of 200 baies of cotton at 10%, deliverable 100 baies each in
months of May and June, 1901. This was communicated also to A. S. Johnston,
at Meridlan, Miss., by wire, and Johnston, by wire, answered, 'Conflrm sale
100 baies, each May and June, st. mid. to good mid., 10%.' On its receipt,
Mathews notifled Harris, and on the next day he wrote a letter identical in
terms, except as to number of baies and the price, with his former letter. To
this Harris replies, uslng the same terms as his reply to the former letter,
varying only as to the number of baies and the price, and ending, as in his
76 129 FBDEEAL REPORTER.
former letter, 'sold to us by A. S. Johnston, Meridian, Miss., and snbject to hls
confirmation.' The usage of the mllls is always to require confirmation by the
principal of contracts made througli thé brolier, and this confirmation is mad«
to the purchaser direct — sent either by mail or through the broker. In the
présent instance, Mathews requested .lohnston to conflrm direct to Harris. Af ter
the 15th, and between that day and the 25th, of October, unpieasant rumors
were in circulation as to the solvency of Johnston. Whereupon Mr. Harris, on
25th October, demanded from Mathews security for the performance of thèse
contracts by Johnston. Mathews wired this demand to Johnston, who replied,
referring to C. W. Roblnson and Tohn Kenyon. Mathews telegraphed to thèse
gentlemen to confirm this, but got no reply. On 27th October, Mathews not fur-
ilishing the security demanded, Harris canceled the contracts. On the 29th
October, IftOO, Mathews inclosed to Harris letter of Johnston confirming the
contract of lOth October, except that the place of delivery was stated to be
Spartanburg, S. C, instead of Moore's, as stated by Mathews. On or about
Ist November, 1900, Johnston went to Spartanburg, and, in company with
Mr. Bozeman, his attorney, and Mr. Gaine, of Mississippi, offered Mr. Gaine
as his surety for delivery of the cotton as per contracts. Mr. Harris made no
objection to the character and sufiiciency of the security, but refused to aeeept
it, as the contracts were canceled. Mr. Mathews says that in this transaction
he acted merely as agent of each party in making the sale, and assumed no re-
sponslbillty."
— Announced his flndings thereon, and conclusions of law, as follows :
"Findings of ITact.
"(1) The plaintiff is a citizen and résident of the state of Mississippi, and the
défendant corporation, the Fairmont Mills, and L. Guy Harris, recelver, are
citizens and résidents of the state of South Carolina.
"(2) C. P. Mathews is a cotton broker at Spartanburg, South Carolina, doing
business in the Carolinas.
"(3) On lOth October, 1900, negotiations were entered into between W. J.
Harris, président of Fairmont Mills, and C. P. Mathews, for the purchase of
three hundred baies of cotton, strict to good middling, at 10% cents per pound,
dellverable 100 baies each in the months of February, March and April, 1901,
at Moore's, S. C. And on 15th October, 1900, other negotiations were entered
into between the same parties for the purchase of 200 baies of cotton at 10%
cents per pound, dellverable 100 baies each in the months of May and June,
1901, at Moore's, S. C.
"(4) Thèse negotiations culminated In a written offer on the part of Mathews,
acting for A. S. Johnston, the plaintiff, for the delivery of the above-mentioned
baies of cotton at the priées and terms and place specifled, one-half of each
delivery to be good, and one-half strict middling, wIth the terms added ; weighta
guarantied not to lose more than three pounds per baie.
"(5) Pending thèse negotiations, telegrams had been passed between Mathews
and johnston, in which the outlines of the proposition were stated. The offer
o£ Mathews gave the offer in détail, and for the flrst time.
"(6) The detailed offer of Mathews was accepted by Harris, subject to con-
firmation by Johnston. This is the usage of the trade In Spartanburg by the
mllls in purchasing cotton for future delivery.
"(7) The confirmation by Johnston not having been received, on 27th October,
1900, Mr. Harris, président of Fairmont Mills, canceled the transaction.
"Conclusions of Law.
"The contract between plaintiff and défendant, never having been completed,
was not binding, and the verdict must be for the défendant"
C. P. Sanders and S. J. Simpson, for plaintiff in error.
William M. Jones (Nicholls & Jones, on the brief), for défendants
in error.
Before GOFF, Circuit Judge, and WADDII,!, and McDOWEI.1.,
District Judges.
JOHNSTON V. FAIKMONT MILLS. 77
WADDILL, District Judge (after stating the facts as above). There
are a number of assignments of error in this case, but they ail relate,
in one form or another, to three questions involved: First, whether
or net valid contracts were ever entered into between the parties, as
set up in the pleadings; second, whether or not, under the circum-
stances of this case, the défendant the Fairmont Mills was justified in
imposing upon the plaintifï the requirement of a guaranty of his ability
to carry out the alleged contracts, his insolvency being admitted ; and,
third, what was the efifect of this requirement, as bearing upon the
question of the existence of the prior contracts ?
This case turns upon the question of fact as to whether the alleged
contracts were in fact entered into between the plaintiff and the de-
fendant the Fairmont Mills. Upon that point the learned judge of the
lower court decided that they had not, and, after a most careful review
of the entire évidence, with the light of the arguments of able counsel
thereon, we hâve reached the same conclusion.
That the minds of parties must meet, and give mutual assent to ail
of the essential and material features of a contract, îs elementary. It
cannot be said that such was the case hère. The transaction was con-
ducted between the parties through C. P. Mathews, a broker, and he
clearly did not hâve the right, under the facts of this case, to bind either
party without their assent; and certainly he had no such authority to
speak for the défendant the Fairmont Mills. The évidence conclusive-
ly shows that the custom in the trade was for both buyer and seller to
each confirm to the other the broker's action in writing. This is
testified to by the broker himself, who says :
"When Mr. Harris submitted the offer, I submitted the offer to Mr. Johnston.
I had no authority until I got authority from Mr. Johnston to confirm the con-
tract. * * * It was always customary for the mill to confirm to the buyer,
and the buyer to the mill. I was acting only as intermediary, and each sido
wanted the contracts confîrmed. « » * There was probably something in
the offer that Mr. Johnston would confirm the sale by letter. It was under-
stood that Mr. Harris was to receive written confirmation from Mr. Johnston."
While sundry letters and telegrams passed between Mathews and
Johnston, and some between Mathews and Harris, the président of
the mill, still it is entirely clear from the whole correspondence that
Harris was to receive written confirmation of the sale from Johnston.
Mathews' reply to the telegram from Johnston to him confirming the
sales of February, March, and April, concludes, "Please confirm con-
tract to W. I. Harris, président, Spartanburg, South Carolina;" and
Harris' letter of the iith of October acknowledging the receipt of the
letter from Mathews, relative to confirming the sale concludes,
"Weights guaranteed within three pounds, and hereby accept ofifer of
same subject to A. S. Johnston's confirmation." The subséquent let-
ters written by Johnston direct to Harris, président, but received after
the cancellation of the contract by Harris, likewise show that Johnston
was to hâve given a written confirmation. In addition to this, the
correspondence between Mathews and Johnston also shows that this
confirmation was to hâve been given, and on the day before the can-
, cellation of the contract, October 26, 1900, Mathews wrote :
"If you had only conflrmed .thèse sales promptly, there would hâve been no
trouble. A lawyer told one of the mills that the only ground he had for getting
78 129 FEDERAL REPORTER.
out, would be that you had falled to conflrm the sale. Bven now I hâve never
been able to get the sales properly confirnied by you. I returned the confirma-
tions to you on the 17th for correction ; since then I bave not had a Une from
you."
And on the 27th of October, the day on which the notice was given
that the contracts would be canceled if no guaranty was given, Mathews
wrote Johnston:
"I wlll say, however, that ail the sales bave been confirmed to me regularly,
and only awaited your confirmation to the mllls for them to confirm. I do not
consider you hâve treated me fairly in the matter."
Johnston thus clearly failed to confirm, in writing, the contracts to
Harris. But this is not the only particular wherein the transaction
was not consummated. Their minds never met upon other material
and essential portions of the undertaking. They agrée as to the quan-
tity of the cotton and the price, but in other essentials entirely differ.
Harris understood that the cotton was to be delivered at Moore's,
S. C. Johnston's confirmation, in so far as it désignâtes a place at ail,
is at Spartanburg; and it is not entirely clear that he obligated him-
self to do more than ship the cotton from the place of sale, Meridian,
Miss., within the time named. Harris prescribed that the cotton was
to be half each strict and good middling, and emphasized in his second
letter by stipulating for strict to good middling cotton, one-half each
grade. Johnston agreed only that the cotton should be strict good
middling, and not one-half each grade. Harris required the delivery
of loo baies each for the months of February, March, April, May, and
June ; weights to be guarantied within three pounds. Johnston gave
no undertaking as to weight, and, as above stated, had in view mani-
festly shipments, rather than deliveries — at least, his telegrams and
letters are liable to this interprétation — which might hâve resulted dis-
astrously to Harris, but showed clearly that in this, as in other par-
ticulars, there was an utter failure of the minds of the parties to meet
on thèse essential features of the undertaking. To bind Harris on his
offers, it was necessary that the same should be accepted in the identi-
cal terms in which they were made; otherwise his ofïers imposed no
obligation upon him ; and a proposai to accept, or an acceptance on
terms varying from those offered, is a rejection of the offer.
In Minneapolis Ry. Co. v. Columbus Rolling Mills, 119 U. S. 149.
7 Sup. Ct. 168, 30 L. Ed. 376, it is said :
"As no eontract is complète wlthout the mutual assent of the parties, an
offer to sell imposes no obligation untll it is accepted accordlng to its terms.
So long as the offer bas been neither accepted nor rejected, the negotiatlon re-
mains open, and imposes 110 obligation upon either party. The one may décline
to accept, or the other may withdraw his offer, and either rejection or with-
drawal leaves the matter as if no offer had ever been made. A proposai to ac-
cept, or an acceptance upon terms varying from those offered, Is a rejection of
the offer, and puts an end to the negotiation, unless the party who made the
original offer renews it or assents to the modification suggested. The other
party, having once rejected the offer, cannot afterwards revive it by tendering
an acceptance of It."
In I Chitty on Contracts (11 Am. Ed.) it is said at page 15 :
"Where an agreement is sought to be established by means of letters, such
letters will not constitute an agreement, unless the answer be a sin-nle ac-
ceptance of the proposai, without the introduction of any new teriu. And
LAMAR V. HALL & WIMBEELT. 79
again : "If the original offer leave anythlng to be settled by future arrange-
ment, It Is merely a proposai to enter Into an agreement. • • * The agree-
ment Is not complète untll there Is upon the face of the eorrespondence a clear
accession on both sides to one and the same set of terms."
In I Parson on Contracts (6th Ed.) p. 476, it is said :
"The assent must comprehend the whole of the proposition, It must be exactly
eqnal to its estent and provisions, and it must not qualify them by any new
matter."
Applying thèse principles to the facts in this case, it is manifest that
no valid contracts were entered into between the parties, unless it be
that Harris' requirement of a guaranty on or before the z/th of Oc-
tober should be treated as a confirmation of the incomplète contracts
theretofore existing. This action of Harris clearly should hâve no
such effect, since it is apparent from the entire évidence that he was
acting in good faith in what he did. He made the offers as early as
the loth and I5th of October, which were never accepted, and pending
this condition of affairs it developed that Johnston had failed in busi-
ness — his insolvency being admitted, as of the 20th day of October,
1900 ; and he had the right to withdraw the offer, or otherwise ter-
minale the transaction, which he did not do in undue haste, but insisted
that a proper guarantee of the ability of Johnston to perform the con-
tracts on his part should be given him, designating a day beyond which
he would not wait. Johnston promised to give this guaranty, and en-
deavored to do so; but, as is apparent from the eorrespondence be-
tween himself and Mathews, he was unable to furnish the guaranty, and
Harris, on the day indicated, declared the transaction at an end. Sev-
eral days after this date, Johnston was enabled to furnish the guaranty ;
but Harris then declined to reopen the negotiations, and the transac-
tion thus ended. Harris was under no obligation to conclude his
offers, the same never having been accepted; and hence, when there
was a failure to comply with the condition that he generously made, he
was legally and morally relieved from any liability to Johnston by rea-
son of the transactions in question.
From what has been said, it follows that the action of the lower
court should be affirmed.
LAMAR et al. v. HALL & WIMBERLT et al.
(Circuit Court of Appeals, Fifth Circuit March 1, 1904)
No. 1,274.
Teust Fund—Peotection— Compensation.
One jolntly Interested wIth others In trust funds, who In good faIth
maintains for himself and others Interested llke hIm necessary Utigation
to secure or protect them, Is entltled to reimbursement out of the funds
protected or secured. The principle on which such allowànce Is based
is that the plaintlfC represented the others for whom he sued. But a
sollcitor cannot make another person his debtor by renderinç services in
his behalf wlthout his express or implled assent.
COEPOBATIONS — DISSOLUTION — EECEIVER9 — ^TeUST FUNDS— ATTOENET'B FEES
—Allowànce.
Sults having been brought by lien eredltors against a corporation, and
a receiver having been appolnted, petltioners, as attorneys for a mlnorits.
80 129 FEDERAL REPORTER.
stockholder, flied a blll on hls behalf, and on behalf of ail others slml-
larly sltnated who should corne in and beconie parties and share In the
expense of the proceedings, alleging that the former suits had been brought
in bad faith, etc. The blll contained a prayer for the appointment of a
receiver to operate the property, pay the debts, and thereafter to turn
over to the stockholders the property remalning. A co-receiver was ap-
pointed on sueh pétition, the suits Consolidated, and after trial, in which
the allégations of fraud of the minority stockholder's bill were not proved,
the court ordered a sale of the property for the payment of debts. A
sale was had, and, on petitioners' application, was set aside for inade-
quacy of price, and another sale ordered, and an upset price flxed, which
was $40,000 higher than the ainount bid at the previous sale, and the
property was subsequently sold to the lien creditors for such sum, which
was insufficient to pay the liens. Held, that the petitioners were not en-
titled to attorney's fées, payable ont of the proceeds of such sale.
Appeal from the Circuit Court of the United States for the Southern
District of Georgia.
Wm. K. Miller, for appellants.
Marion Erwin, John I. Hall, and Olin J. Wimberly, for appellees.
Before FARDEE, McCORMICK, and SHELBY, Circuit Judges.
SHELBY, Circuit Judge. Hall & Wimberly and Erwin & Calla-
way, attorneys and solicitors, filed a pétition in the court below pray-
ing that fées for services rendered by them be fixed and allowed, and
paid out of a trust fund which was in court for distribution. The pé-
tition was referred to a spécial master, who made a report adverse to
it; but, on exceptions filed by the petitioners, the report of the spé-
cial master was disapproved by the court, the exceptions sustained,
and a decree entered allowing the petitioners $1,500 as compensation
for their services as solicitors, and directing that the same be paid
by the receiver out of the trust funds in court. William Firth
Co. V. Millen Cotton Mills, 129 Fed. 141. This appeal was taken
from that decree, and it is assigned that the court erred in sustaining
the exceptions to the master's report, because the solicitors named vi^ere
not entitled to hâve their fées paid out of the trust fund in court.
In order to understand the question to be decided, it is necessary to
make a statement of the facts :
Three bills in equity were filed in the court below:
(i) William Firth Company et al. v. Millen Cotton Mills. This was
a suit brought January 6, 1902, by creditors having liens upon the
property of the Millen Cotton Mills, a corporation. The bill described
the debts and liens, and prayed for their enforcement by a sale of
the property of the défendant corporation, and a distribution of the
assets among the lien creditors. There was a prayer, also, for the
appointment of a receiver of the property of the défendant. The cir-
cuit court on January 6, 1902, appointed John R. L. Smith receiver,
who took possession of the property of the défendant corporation.
(2) C. E. Riley & Co. et al. v. Millen Cotton Mills et al. In this
suit, brought April 11, 1902, it was asserted that the complainants had
furnished machinery to the défendant corporation, and the complain-
ants claimed liens therefor, and sought to enforce them. It was al-
leged that the court was already in possession of the défendant corpo-
LAMAR V. HALL & WIMBERLT. SI
ration's property, and that the complainants' liens were superior to the
mortgage debts; that défendant corporation was insolvent; and that
the stockholders had no interest in the property of the défendant cor-
poration "until they pay or cause to be paid ofï its debts."
(3) Southern Cotton Mills & Commission Co. v. Milieu Cotton Mills
et al. The bill beginning this suit was filed on January 23, 1902, after
a receiver had been appointed under the first bill, and after he had
taken possession of the property of the défendant corporation. In this
suit the complainant's solicitors were Hall & Wimberly and Erwin &
Callaway, the petitioners in the court below, whose compensation is
involved in the présent appeal. The complainant in this suit, a mi-
nority stockholder in the Millen Cotton Mills, allèges that the first suit
was —
"A part and parcel of a fraudaient and wrongful scheme, purpose, and con-
spiracy on the part of the défendants herein uaoïed to wreck the said Millen
Cotton Mills, and cause its properties to be sold and purehased for the ben-
eflt of the majorlty stockholders of the Millen Cotton Mllls, to the utter de-
struction of the rights and interest and property of the minorlty stockholders
therein."
The third paragraph of the bill is as follows :
"Your orator, the Southern Cotton Mills & Commission Company, is a mi-
nority stockholder in said Millen Cotton Mills, and brings this bill against
the said Millen Cotton Mills and its ofGcers, directors, and majority stock-
holders, and the other défendants named, colludlng and confederating with
them ; and your orator brings this as a stockholders' bill, for the beneflt of
itself and ail other stockholders similarly situa ted who may corne In and be
made parties hereto, and share the expense and costs of this proceeding."
The détails of the wrongful scheme are stated, but it is unnecessary
to repeat them. It is alleged that the mill properly operated could
reduce and in time pay its indebtedness, and that in that way the
property could be saved to the stockholders. In brief, the purpose
of the bill was to prevent the sale of the Millen Cotton Mills, on the
ground that the suit brought by the William Firth Company and oth-
ers was a fraudulent scheme between the complainants in that suit
and the majority stockholders of the défendant corporation, and to
provide for the payment of its debts by operating the mills. The
prayer was for the appointment of a receiver or receivers, and that
the court "may, through its receiver, hold said property until said
property can be turned over to the stockholders who are not partici-
pants or guilty of any of the fraudulent acts or wrongs hereinbefore
complained of."
This bill was presented to a judge of the court below on January
21, 1902, and an order was made appointing Tracy I. Hickman and
John R. L. Smith temporary receivers to take charge of ail the prop-
erty and assets of the Millen Cotton Mills, and its books and papers,
"and continue the possession now exercised by John R. L,. Smith as
temporary receiver." It was further ordered that the receivers in-
vestigate the condition of the property, and report to the court the
practicability of operating and paying off the debts, in accordance with
the "declared purpose of the bill." The défendants named in the sev-
eral bills filed their several answers. On April 12, 1902, it was ordered
129 F.— 6
82 129 FEDERAL REPORTER.
that "the said several cases [referring- to the three chancery suits]
be Consolidated and tried as one cause," and that the temporary re-
ceivers be made permanent receivers. On June 7, 1902, an order was
made in the cases directing the sale of the property of the Millen Cot-
ton Mills. It provided that the successful bidder should deposit a
certified check for $10,000 on account of his bid. The property was
purchased for $50,000 Isy Joseph R. Lamar, trustée for the lien credit-
ors. He made the deposit of $10,000 required by the order. The
sale having been reported to the circuit court, the Southern Cotton
Mills & Commission Company, represented by Hall & Wimberly and
Erwin & Callaway, filed objections to the confirmation of the sale.
Thèse objections were sustained, the circuit court refusing to confirm
the sale. The circuit court directed the commissioners, who were there-
tofore ordered to sell the property, to advertise for bids, and to en-
deavor to procure a bid for it at "an upset price" of $90,000. Under
this order Joseph R. Lamar, trustée for thé lienholders, increased his
bid to $90,000, and at that price the sale was confirmed. Lamar, as
trustée, having deposited $10,000 in court under the order, paid the
remainder of the purchase money ($80,000) by crediting the amount
on estabHshed liens against the property. After paying costs and other
allowances out of the money deposited in court, and applying the bal-
ance of the purchase money to the lien creditors, there was due to
them and unpaid $7,888.76. Under the or-der of the circuit court,
$2,000 of the $10,000 deposited in court was retained in the hands of
the commissioners to await the décision of the court on the solicitors'
pétition for fées.
The single question to be decided is whether or not the solicitor's
fées due to Hall & Wimberly and Erwin & Callaway for services
which we hâve described are a proper charge on the trust fund in court.
We wish to say in the beginning that we do not doubt the distin-
guished attorneys who hâve made the daim on the trust fund for fées
hâve done so in good faith and under full conviction ôf the rightful-
ness of their claim, that the record shows they hâve rendered services
for which they should be compensated, that the amount claimed by
them and allowed by the circuit court is not unreasonable, and that
we would not hesitate to allow the sum to be charged on the trust fund,
if, under established équitable principles, it were a proper charge on
that fund.
It may be stated as a gênerai and unquestioned principle that each
client should compensate his own solicitor, and that an attorney can-
not make another person his debtor by voluntarily rendering services
in his behalf without his express or implied assent. The cases which
allow compensation to attorneys out of a trust fund are not in con-
flict with this principle, but are founded upon it, for they dépend on
the principle of agency; the actual plaintifï being the représentative
of the beneficiary of the trust. The application of this principle is of
everyday occurrence in the courts. Executors, administrators, guard-
ians, receivers, and other trustées, being the agents and légal repré-
sentatives of the beneficiary or beneficiaries of the trust, are allowed
crédit for necessary and reasonable charges, including attorney's
LAMAR T. HALL & WIMBEELT. 83
fees, incurred by them in the protection and administration of the
trust fund. The same principle is extended to other cases. One joint-
ly interested with others in trust property, who in good faith main-
tains for himself, and others interested Hke him, the necessary litiga-
tion to save it from waste and to secure its proper application, is
entitled to the reimbursement of his costs, as between soliciter and
client, out of the fund to be administered. Trustées v. Greenough,
105 U. S. 527, 26 L. Ed. 1157; Central Railroad v. Pettus, 113 U. S.
116, 5 Sup. Ct. 387, 28 L. Ed. 915. In such cases the counsel who is
employed by certain creditors or other benefîciaries of the trust, and
who sues for them and others situated as they are, in a sensé represents
ail of them ; those suing having assumed to retain him for ail. There
is usually an express promise by the parties plaintifï to pay their so-
liciter, and, if not, a promise to pay him is implied by the performance
and the acceptance of the solicitor's services. It seems equally clear
that the creditors or other benefîciaries of the trust who corne into
court and accept a part of the proceeds of the property recovered or
preserved by the litigation are bound by an implied promise to pay out
of the proceeds of the trust fund received by them their proportion-
ate part of the rfeasonable compensation allowed the solicitor who
successfully conducted the litigation. The underlying principle upon
which those who do not appear as plaintifïs are charged with a pro-
portionate part of the solicitor's fees, or upon which such fees are
charged on the fund, is that the plaintifïs represented the others for
whom they also sued (Farmers', etc.. Trust Co. v. Green, 79 Fed.
222, 24 C. C. A. 506; Hand v. Railroad, 21 S. C. 162); and this
agency, and the ratification of the course taken, are usually shown by
the appearance in court of the other creditors or benefîciaries, and
their claiming to share in the results of the suit.
The solicitors whose claim for fees is before the court represented
minority stockholders in the défendant corporation. Before they filed
the bill for the minority stockholders, lien creditors of the corporation
had brought suit to enforce their liens and to hâve a receiver appoint-
ed, and the court's receiver already had possession of the corporation's
property. The minority stockholders did not, therefore, by their bill,
bring the property into court. The purpose of the bill was antagonis-
tic to the lien creditors, and to the majority stockholders controlling
the Millen Cotton Mills. In fact, both were charged with a fraudulent
ocheme to sacrifice the property. This charge was not sustained, and
we are justifîed in saying that it was unfounded. The property was
sold pursuant to the prayer of the creditors' bills, and contrary to the
prayer of the minority stockholder's bill. Thèse facts seem conclusive
against petitioners' claim on the trust fund. Hobbs v. McEean, 117
U. S. 567, 6 Sup. Ct. 870, 29 L. Ed. 940. It is true that, by the opposi-
tion of the minority stockholder to the confirmation of the first sale, the
bid was increased from $50,000 to $90,000. But at both sales it was
purchased by the trustée for the lienholders, and at both sales it failed
to bring enough to pay the lien debts. It made no différence whether
the property sold for $50,000 or $90,000. It was paid for in either case
by a crédit on debts which were worthless, so far as any balance was
Si 120 FKDERAL RErOUTIOll.
concerned which was left.unpaid after the application of the amount
of the bid as a crédit. The interposition of the minorit)' stockholder
was of no benefit to the lien creditors. On the contrary, it was to their
détriment more than $2,000, the amount of the increased costs of the
litigation. The appelants should not be required to pay out of the
fund for services which diminished the fund. Buckwalter v. Whipple,
115 Ga. 484, 41 S. E. lOio. But if the interposition of the minority
stockholder had been of incidental advantage to the lien creditors, it
would not make its attorney's fées a proper charge upon the trust fund.
Farmers', etc., Trust Co. v. Green, supra. There is no implied prom-
ise to pay an attorney whom one has not employed, because of inci-
dental bénefîts derived from his services. Grimball v. Cruse, 70 Ala.
534, 544; Roselius V. Delechaise, 5 La. Ann. 481.
But it is urged that after the cases were "consolidated" the solicitors
for the minority stockholders aided in obtaining the orders to sell
the property and in the administration of the fund. We think that is
immaterial. In Hubbard v. Camperdown Mills, 25 S. C. 496, i S. E.
5, the défendant corporation's property was sold pursuant to the prayer
of the minority stockholders' bill ; but, the property being insufficient
to pay the debts, the court held that the fées of the solicitors for the
minority stockholders were not a proper charge on the trust fund. In
the case at bar the minority stockholders failed to sustain their bill.
And it was a bill opposing the sale of the property and charging fraud.
It imposed on the lien creditors the expense of answering it. We are
unable to see that it recovered, increased, or protected the trust fund,
or that it benefited the lien creditors of the corporation, or that the
minority stockholder, the complainant in the bill, for whom the peti-
tioners appeared as solicitors, represented in any way the interest of the
lien creditors.
The court is of opinion that the claim of the petitioners, the appellees,
is not within the principle which authorizes compensation for their
services to be made a charge upon the trust fund in court. The decree
of the circuit court, therefore, must be reversed, and the cause re-
manded, with instructions to dismiss the pétition and proceed in con-
formity to the opinion of this court.
THORNTON et ux. v. MAYOR, ETC., OF CITY OF NATCHEZ.
(Circuit Court of Appeals, Fifth Circuit. April 5, 1904.)
No. 1,253.
Deeds— Use of Property— Condition Subséquent.
A deed, for a considération alleged to hâve been nominal, conveying land
to a city to be used as a burying ground, and forever kept, used, and In-
closed in a décent and substantial manner, and for no other use or purpose
wbatsoever, In which the grantors made no record of any Intention on their
part that the land should ever under any eircumstances revert to them or
their représentatives, should not be construed as requiring the land to be
maintained as a public burying place literally lu perpetuity, without re-
gard to the welfare of subséquent générations ; and hence such provision
was not a condition subséquent, the breach of which would terminate the
title of the grantees.
THOENTON V. MAYOR, ETC., OF CITT OF NATCHEZ. 85
2. Same— Bill— Demtjereb.
Where the members of a flrm conveyed land to a clty, to be used as a
public burying ground forever, a bill by the légal représentatives of the
members of such flrm to recover the land on the ground that its use had
been illegally changed, which failed to show that plalntlfCs were entitled
to the reversion, or that they had any interest or right In the further
carrying out of the purpose of the grant, was demurrable.
S. Same— Lâches.
Lands sued for had been conveyed by plaintiffs' decedenta In 1817 to a
City for cemetery purposes, and for no other use whatsoever. In 1890 the
City took up the remains of the bodies previously buried thereln, and de-
posited them In a mound In a remote portion of the land, marked with a
plain stone, and thereafter Improved and used the land conveyed as a pub-
lic park. Held, that slnce the Personal représentatives of the grantees,
by the exercise of reasonable diligence, could hâve had knovs^ledge of such
change of use shortly after It occurred, and before 1901, when suit was
brought to recover the land, they were barred by lâches from malntalnlng
the same.
Appeal from the Circuit Court of the United States for the Southern
District of Mississippi.
On July 25, 1902, M. E. Thornton and bis wife, averring themselves to be the
sole surviving légal représentatives of William Butherford and of William
Rutherford and John P. McNeel, who in the year 1817 composed the commercial
firm of William Rutherford & Co., filed their bill in the lower court, in which,
inter alla, they alleged that Rutherford and McNeel in the year 1817, for the
nominal considération of $500, conveyed to the président and selectmen of the
clty of Natchez, and to their successors, forever, certain lots In the city of
Natchez, whicli were then the property of said commercial flrm, to hâve and
to hold the same "for the uses and purposes of a burying place and so to be
forever kept, used and enclosed In a décent and substantial manner and to and
for no other use or purpose whatsoever" ; that the. land contlnued to be used
for the purposes to which it was dedicated by the grantors until about the year
1890, wheu the board of mayor and aldermen of the clty of Natchez, without
the knowledge or consent of complainants, who then resided in North Carolina,
and without notice to them, contrivlng and intending to defeat the said trust,
and to couvert the land to another and a différent purpose, but at the same
time to deceive the complainants, and to préserve the semblance of the trust,
while defeating the intent of the grantors without an actual, apparent ré-
pudiation of the trust, eaused the remains of the deceased persons interred
in said land, with the tombstones, cofflns, and ail other évidences of the use
of the land as a burying ground, to be dug up and removed, and the land to be
graded down and leveled and converted into a public park, for the purposes
of diversion and récréation, for the use of the city of Natchez, and ceased alto-
gether to use the land for the purpose of a burying ground, but that, for the
purpose of deceiving complainants, or others who might hâve notlfled them,
said city authorities eaused an excavation to be dug in a remote part of the
land, and the remains of some of the deceased persons formerly buried in
said land to be placed therein, and a small mound of earth to be placed thereon,
with a plain slab of stone, and then contended and still contend that in so
doing they are executing the trust in conformity to the terms of the grant ;
that, by reason of the fraud so attempted to be practiced on them, complainants
had no notice of the breach of trust and of the fact that the lands had ceased
to be used for the purpose of a burying place, and had been converted to
another and entirely différent use, until the year 1901 ; that by the misuser
and nonuser of the land, which Is of the value of $10,000, the same has re-
verted to the complainants. The prayer is that the land be decreed to hâve re-
verted to the complainants, and that the défendants pay rents and revenues
at the rate of $1,000 per annum from January 1, 1890, or, In the alternative,
that défendants be perpetually enjolned from further user of the land for any
other différent purpose than that of a burying place. A demurrer was Inter-
posed on a number of grounds, among which are the following : Want of equity
86 129 FEDERAL' BEPOBTEB.
In the Mil. Want of Jurisdictlon In the court, because the suit Is an action of
ejectment ; and, 1( It be a bill to remove clouds f rom tltle, it cannot be maln-
tained, because complalnants are not, and the défendants are, in possession.
That complalnants do not show that they hâve acquired or hold the interest
of McNeel In the land. That by the terms of the deed, as shown in the bill,
the fee passed absolutely and uncondltionally to the city of Natchez, and that
no provision was made in the deed by which the grantors, their helrs or légal
représentatives, could be reinvested with the title. That complalnants are
barred by their lâches. That the suit is barred by the 10-year statute of limi-
tations. That the bill does not show that complalnants' cause of action was
fraudulently concealed. That the bill shows that défendants exerclsed such
public ownership over the land as to render it impossible that complalnants,
had they exerclsed reasonable diligence, would not hâve known of their rights
more than 10 years before the filing of this suit. That complalnants' alleged
want of knowledge will not excuse them from the bar of the statute of limita-
tions. The demurrer was sustained, the bill was dismissed, and the complain-
anfs hâve appealed.
Wade R. Young, for appellants.
McWillie & Thompson, for appellees.
Before McCORMICK and SHELBY, Circuit Judges, and PAR-
LANGE, District Judge.
PARLANGE, District Judge. We are satisfied, after full considéra-
tion of the matter, that the grant was not made on condition subséquent.
Such a condition is not favored in law. 4 Kent's Com. marg. p. 129.
Even when a provision is stated in terms to be a condition, a court
will détermine for itself, not from the statement alone, but from
the whole deed or grant, whether a condition was really intended. In
this case no condition was stated in terms. A considération of $500
was paid the grantors, and the grant was not made purely and ex-
clusively from motives of charity or benevolence. No provision what-
ever was made for re-entry by or reversion to the grantors or their
heirs or légal repesentatives. The land was maintained as a public
burying place for nearly three-quarters of a century. There is noth-
ing averred in the bill from which we could gather that the grantors
intended that the land should be maintained as a public burying place
literally in perpetuity, and without regard to the necessities and welfare
of ail the générations which were to folio w. In the absence of any
déclaration of such an intention, and of anything in the grant from
which it could be reasonably inferred, we are to conclude that the
grantors meant that the land should be used for the purposes for
which they desired it to be used, as long as it was right and proper to
do so, in view of the nature of the grant and of its purposes.
But, in any event, it is beyond question that the grantors made no
record of any intention on their part, either expressed or intimated,
that the land should ever under any circumstances revert to them or to
their représentatives. The appellants hâve not stated a case entitling
them to the reversion. They hâve not even shown that they hâve an
interest or a right in the further carrying out of the purposes of the
grant.
The matter in hand was carefully considered in the able opinion in
Rawson v. Inhabitants of School District No. 5 in Uxbridge, 89 Mass.
135, 83 Am. Dec. 670. Also sec Greene v. O'Connor (R. I.) 25 Atl.
BBISTOL r. TJBTTBD STATES. 87
693, 19 L. R. A. 262 (see notes); Sohier v. Trinîty Churcli, 109 Mass.
1-19 ; Episcopal City Mission v. Appleton et al., 117 Mass. 326 ; Barker
et al. V. Barrows, 138 Mass. 578 ; Stanley v. Coït, 6 Wall. 119, 18 L.
Ed. 502.
We are furthermore fully satisfied, after considération of the statutes
of limitations of Mississippi, that the appellants hâve by their lâches
debarred themselves from prosecuting this action. The conversion of
a public burying ground into a public park, and the other acts which the
appellants averred in support of the fraud and concealment alleged by
them, could not but hâve been open, public, and notorious. Conceal-
ment of those acts would hâve been impossible. The bill, it îs true,
avers that the appellants had neither notice nor knowledge. But such
an allégation, in a matter like the one in hand, is a mère conclusion
of the pleader, not binding on demurrer, unless facts are stated from
which the court can détermine for itself whether the conclusion was cor-
rectly drawn. See Wood v. Carpenter, ici U. S. 135-140, 25 L. Ed.
807.
The acts complained of took place in the year 1890. Either the ap-
pellants knew of those acts prior to the year 1901, or else they could
hâve had the knowledge by exercising reasonable diligence. The ap-
pellants, having allowed such a lapse of time to occur before bringing
their action, cannot be heard to complain at this late hour. In view
of the statutes of limitations of Mississippi, we do not understand that
the appellants' counsel contends that the appellants were entitled to
actual notice. But see Elder v. McClaskey et al., 70 Fed. 529, 17 C. C.
A. 251.
There are other matters averred in the demurrer which hâve much
force. But we deem it sufificient to rest our affirmance of the decree
appealed from on the two grounds stated.
The decree of the lower court is affirmed.
BRISTOL V. UNITED STATES,
(Circuit Court of Appeals, Seventh Circuit April 12, 1901.)
L Paupees— Pbosecution of Suits— Common Law.
St. 11 Hen. VII, c 12, providlng tliat every poor person having a cause
of action against another shall hâve writs, according to the nature of his
cause, without payment of fées, and asslgnment of counsel by the court,
who shall act for him without reward, had référence only to a plaintiff
prosecuting a civil action, and dld not apply to crimlnal appeals.
2. Same— Fedeeal Statutes— Ceiminai. Cases— Writs or Eerob.
Act Cong. July 20, 1892, 27 Stat. 252, c. 209 [U. S. Comp. St 1901, p. 706],
providlng that any citizen entitled to commence any action or suit in any
court of the United States may commence and prosecute to conclusion any
such suit or action vylthout being required to prepay fées or costs, or give
seeurity therefor, before or after bringing suit or action, does not entitle
a défendant In a crimlnal case to prosecute a wrlt of error out of the
Uïilted States Circuit Court of Appeals in forma pau£)eris. such wrlt con-
stltuting a continuation of the original litlgatlon, and not a commence-
ment of a new action.
In Error to the District Court of the United States for the Northern
District of Illinois.
88 329 FEDERAL RBPOETER.
J. J. McCIelIan, for plaintiflf in error.
S. H. Bethea, U. S. Dist. Atty,
Before JENKINS, GROSSCUP, and BAKER, Circuit Judges.
JENKINS, Circuit Judge. The plaintiff in error, having been con-
victed in the court below upon an indictment charging the use of the
post-office department for a fraudulent purpose, and thereupon sen-
tenced to a term of imprisonment, bas sued out a writ of error from
tbis court, and now moves tbe court, upon a conceded showing of
poverty, for leave to prosecute sucb writ of error in forma pauperis.
At the common law no plaintiff bas the right to sue in forma pauperis.
Any such right must rest upon statute. By ii Hen. VII, c. 12, every
poor person having a cause of action against another could bave writs
according to tbe nature of his cause without payment of fées, and
àssignment of counsel by tbe court, who sbould act for him without
reward. Tbis statute came to us as part of the common-Iaw existing
at tbe time of tbe Révolution. It is followed as well by the fédéral
as tbe State courts, unless tbe matter is otberwise regulated by the
Congress of tbe United States or by the Législature of tbe respective
States. It is clear that tbis statute had référence only to a plaintif!
prosecuting a cause of action. It comprehended only civil actions,
there being at tbe time of its adoption, and for five centuries tbereafter,
no review in England of a criminal action. If, then, tbis application
can be sustained, it must be by force of some statute of tbe United
States. Section 691, Rev. St., provides for review, by appeal or writ
of error, of civil actions. Tbis provision was adopted in 1789. i Stat.
84, c. 20, § 22. No review of a criminal cause, except upon a certifi-
cate of division of opinion among tbe judges of the Circuit Court (2
Stat. 159, Rev. St. §§ 651, 697), was allowed until the act of February
6, 1889, 25 Stat. 656 [U. S. Comp. St. 1901, p. 569], and tben only
in cases of conviction of a capital crime. United States v. Sanges,
144 U. S. 310, 321, 12 Sup. Ct. 609, 36 L. Ed. 445. Tbe first act allow-
ing generally a review in criminal cases is that of Marcb 3, 1891, 26
Stat. 826, c. 517 [U. S. Comp. St. 1901, p. 549]. Prior to that time
provision had been made in aid of poor persons indicted for an offense.
Tbe court was authorized to issue subpœnas for bis witnesses, who
were to be paid by the government (Act 24th Sept. 1789, i Stat. 91,
Rev. St. U. S. § 878 [U. S. Comp. St. 1901, p. 668]), and tbe court,
by virtue of its inhérent power, could appoint counsel to défend tbe
poor prisoner. Tbe act of July 20, 1892, 27 Stat. 252, c. 209 [U. S.
Comp. St. 1901, p. 706], provides that any citizen "entitled to com-
mence any action or suit in any court of tbe United States, may com-
mence and prosecute to conclusion any sucb suit or action without be-
ing required to prepay fées or costs or give security tberefor before
or after bringing suit or action," and upon filing a statement under oatb
that because of his poverty he is unable so to do, and his belief that
be is entitled to the redress sought, and setting fortb briefly tbe na-
ture of bis alleged cause of action. There exists a divergence of opin-
ion in the fédéral courts wbether tbis act embraces an appea). or writ
of error in civil causes. First Circuit: Volk v. B. F. Sturdevant, 99
BRISTOL V. UNITED STATES. SO
Fed. 532, 39 C. C. A. 646; Sixth Circuit, Reed v. Pennsylvania Com-
pany, III Fed. 714, 49 C. C. A. 572, upholding that contention, and
The Presto, 93 Fed. 532, 35 C. C. A. 534, denying it. The first two
cases hold that proceedings on appeal or writ of error are within the
spirit of the statute, and are not excluded by the letter, the act au-
thorizing a poor person to "commence and prosecute to conclusion his
cause of action." The last case limits the act to the proceeding in
the court of original jurisdiction. Ail of the cases to which we hâve
been referred or which we hâve been able to find which construe the
act are civil causes, where the plaintiff mak«s the application claiming
to hâve a meritorious cause of action to enforce. We hâve searched
in vain for any fédéral décision construing this act with référence to
its application to criminal cases. It is clearly the design to permit a
poor person who is "entitled to commence any action or suit" to "com-
mence and prosecute to conclusion" upon a showing of poverty, and
his belief that he is entitled to the redress sought, and setting forth the
nature of his alleged cause of action. Can such an act be appHed to a
défendant in a criminal prosecution? This act does not give him a
right to défend as a poor person in the court of original jurisdiction.
He obtains that right from prior law. The statute, then, has no référ-
ence to criminal cases in the court of original jurisdiction, for the ac-
tion is not commenced or prosecuted by the défendant, and does not
involve a cause of action existing in him. If the statute be applicable,
it can only be applied upon the suing out of a writ of error to review a
conviction. Is such a writ of error the "commencement of an action
or suit" within the meaning of the act, or is it not rather the continua-
tion of the old suit in which he is défendant, and to obtain a new trial
therein? The office of a writ of error, said Chief Justice Marshall, is
simply to bring the record into court, and to submit the judgment of
the inferior tribunal to re-examination. A writ of err^r has been
called an original writ, because it issued out of a reviewing court and
was directed to the trial court ; but it acts upon the record rather than
upon the parties, removing the record into the supervising tribunal.
The Suprême Court déclares it to be "rather a continuation of the
original litigation than the commencement of a new action." Nations
v. Johnson, 24 How. 195, 205, 16 L. Ed. 628; In re Chetwood, 165
U. S. 443, 461, 17 Sup. Ct. 385, 41 L. Ed. 782. We do not think
that it can properly be said that a writ of error is a suit or action with-
in the statute so far as respects a writ of error in a criminal case.
Were it not for the words "prosecute to conclusion," we doubt if any
court would hold that the act applied to an appeal or writ of error in a
civil cause. The applicant by the statute must déclare the nature of
his cause of action. Surely an erroneous ruling by the trial court can-
not be held to furnish a "cause of action," as that phrase is commonly
understood. The statute by that term, in our judgment, refers to a
légal demand by one against another, not to the rulings of a trial court.
Under a somewhat similar statute of the state of New York, its Su-
prême Court, speaking through Judge Cowen, held that the provisions
of the statute do not extend to writs of error. Moore v. Cooley, 2
Hill, 412. The law is generous, giving to a poor défendant in a crim-
inal cause full right of défense, producing in court his witnesses, giv-
90 129 FEDERAL REPORTER.
ing him the services of experienced counsel, and that without expense
to him. It provides for him a full and fair trial before an impartial
court and jury. If the Congress designed to give him the opportunity
of a review of that trial at the further expense of the government, it
should hâve expressed such design in unambiguous terms,
The motion is denied.
ONITBD STATES V. DOWNING et al.
(Circuit Court of Appeals, Second Circuit February 25, 1904.)
No. 70.
1. Cttstoms Duties— Classification— Cakbons foe Electeic Lightino—
Earthy oe Minéral Substances.
Sticks of carbon Intended and adapted to be used in electric liglitlng,
but requtplng to be eut Into sborter lengths and to bave tbe ends shaped
before they are sulted for such use, are dutiable under the provision In
paragraph 97, Tarife Act July 24, 1897, c. 11, Schedule A, 30 Stat. 156
[TJ. S. Comp. St. 1901, p. 1633], for "articles and wares composed wholly
or in chief value of * ♦ ♦ carbon, not speclally provided for, * * *
if not decorated," and not under paragraph 98 of said act, 30 Stat 156
[U. S. Comp, St 1901, p. 1633], as "carbons for electric lighting."
Appeal from the Circuit Court of the United States for the South-
ern District of New York.
This is an appeal by the United States from a reversai (120 Fed.
1014) of a décision of the Board of General Appraisers (G. A. 5,020,
T. D. 23,353), which affirmed the assessment of duty by the Collector
of Cust'oms at the port of New York on merchandise imported by
R. F. Downing & Co.
D. Frank Lloyd, for appellant.
Albert Cornstock, for appellees.
Before WALLACE, LACOMBE, and TOWNSEND, Circuit
Judges
WALEACE, Circuit Judge. The question in this case is whether
the importations in controversy were dutiable as "carbons for elec-
tric lights," under Tarifï Act July 24, 1897, c. 11, § i, Schedule A, par.
98, 30 Stat. 156 [U. S. Comp. St. 1901, p. 1633], or as "carbon, not
specially provided for" under paragraph 97 of that act. They were
sticks of carbon intended and adapted to be used in electric light-
ing, but not yet completed for such use when imported. They were
of différent lengths, but required to be eut into shorter lengths, and
to hâve the ends pointed or ground, before they could be adapted
to use in electric hghting. Paragraph 97 reads as follows :
"97. Articles or wares composed wholly or In chlef value of earthy or min-
erai substances or carbon not actually provided for in this act if not deco-
rated in any manner, thirty-flve per centum ad valorem ; if decorated, forty-
flve per centum ad valorem."
The Board of General Appraisers were of opinion that the im-
portations were dutiable under paragraph 98 by similitude, because
they were not enumerated in paragraph 97. The question was de-
UNITED STATES V. DOWNING. 91
cided by this court in United States v. Reisinger, 94 Fed. 1002, 36
C. C. A. 626, a case where the importations were precisely like those
now in controversy, and the question arose under the same two par-
agraphs of the tariiï act. We held that, because it was necessary
to bestow further labor on them in order to fit them for use in elec-
tric hghting, they were not included in paragraph 98. We said :
"Inasmuch as they are not speciflcally provlded îov in paragraph 98, they
corne within the gênerai phraseology of paragraph 97, belng articles or wares
composed wholly of carbon. This paragraph, it should be noted, Is changea
from a similar one in Act Aug. 27, 1894, c. 349, § 1, par. 86, 28 Stat 513, Sched-
ule B, which was recently considered by us in United States v. Reisinger, 91
Fed. 112, 33 C. C. A. 395, by the insertion of the word 'carbon.' "
In the Reisinger Case, previously decided, the court considered
the question whether carlaon points for arc Hghts were dutiable un-
der paragraph 86 of the act of 1894, which reads as follows:
"Ail articles composed of earthen or minerai substances, Including lava tips
for burners, not specially provided for in this act, if decorated in any man-
ner, forty per centum ad valorem; if not decorated thirty per centum ad
valorem."
In its opinion the court held that carbon points were not enumer-
ated in this section, because the broad and gênerai phrase "articles
composed of earthen or minerai substances" should be restricted to
articles susceptible of décoration, or, more accurately expressed, to
articles of a class which sometimes are decorated and sometimes
are not. The court deemed this construction the correct one, be-
cause of the collocation of paragraph 86 with other paragraphs of
the schedule, and because otherwise Congress would not hâve
deemed it necessary to provide specially for "lava tips," as they would
be included in the gênerai phrase. The majority of the Board of
General Appraisers in the présent case seem to hâve been misled
by this décision, and to hâve overlooked the distinction between the
old provision and the new, created by inserting "or carbon," and to
which we adverted in the later Reisinger Case. The earlier déci-
sion was, in effect, that, reading paragraph 97 as though the words
"or carbon" had been omitted, it would not cover the importations
in controversy. The later décision was that, reading it as it stands,
with the words "or carbon" inserted, it covers the importations be-
cause they are articles made wholly of carbon, not decorated. There
is no inconsistency in the two décisions, as is clearly shown in the
opinion of Mr. Appraiser Somerville, dissenting from the décision of
his colleagues.
The décision of the court below reversing the décision of the Board
of General Appraisers is affirmed.
92 320 FEDERAL ItBl'OIlTER.
THOMAS, Collector of Customs, v. WANAMAKER.
(Carcult Court of Appeals, Thlrd Circuit. February 17, 1904.)
No. 33.
1. CtrsTOMs Dtjties— Classification— Dress Goods— Embeoidebed Woolen
Articles— Wearing Appakel.
Held, that so-caUed wool "dress robes" or "dress patterns," consistlng
of woœen's dress goods of wool, embroldered witb silk, Imported in single
patterns in separate lengtbs and pièces, eacb pattern comprising the ma-
terial for the body and trimming of a dress, are "dress goods," and are
dutiable under the provision in paragraph 369, TarlfC Act July 24, 1897,
c. 11, § 1, Schedule K, 30 Stat. 184 [U. S. Comp. St. 1901, p. 1667], for
"women's * * * dress goods * * * composed wholly or In part
of wool," which Is limited by tlie expression "uot specially provided for
in this act," and not under paragraph 371 of said act, c. 11, § 1, Schedule
K, 30 Stat. 185 [U. S. Comp. St. 1901, p. 1667], which provides, witbout
such limitation, for "articles embroidered. * * * rnade of wool," nor
under paragraph 370 of said act, c. 11, § 1, Schedule K, 30 Stat. 184 [U.
S. Comp. St. 1901, p. 1C67], relating to "articles of wearing apparel of
every description; • * * manufactured * * * in part, * • *
composed wholly or In part of wool."
Appeal from the Circuit Court of tlie United States for the Eastern
District of Pennsylvania.
For opinion below, see 123 Fed. 193.
This appeal was brought by C. Wesley Thomas, Collector of Cus-
toms at the port of Philadelphia, from an affirmance (123 Fed. 193),
by the Circuit Court of two décisions of the Board of General Apprais-
ers covering importations by John Wanamaker, and reversing the as-
sessment of duty.
Following is one of the opinions filed by the board, which fully cov-
ers the issues in the case :
De Vries, General Appraiser. This merehandise consists of wool robes or
dress patterns. It was assessed for duty at the rate of 50 cents per pound
and 60 per cent, ad valorem, under the provisions of paragraph 371. Tariff
Act July 24, 1897, c. 11, § 1, Schedule K, 30 Stat. 185 [U. S. Comp. St. 1901,
p. 1607], as "embrolderies" or "articles embroidered by hand or machinery,
• • * made of wool, or of which wool is a component material." The pro-
test claims as follows: "We claim that said goods should hâve been assessed
at 44 cents per pound and 55 per cent, ad valorem under paragraph 308, 369,
or 366, 30 Stat. pp. 184, 185 (U. S. Comp. St. 1901, pp. 1660, 1067) ; or at 11
cents per square yard and 55 per cent, ad valorem under paragraph 369;
or that the appraiser should hâve segregated the values of the plain dress
goods and the embroidered pièces, and classifled the plain pièces of the dress
goods at 44 cents per pound and 55 per cent., or at 11 cents per square yard
and 55 per cent, ad valorem, under the provisions of above paragraphs ; and
should bave classifled the embroidered pièces at the rate of 50 cents per pound
and 60 per cent, ad valorem under paragraph 371, or at 60 per cent, ad valorem
under paragraphs 390 and 339, 30 Stat. pp. 187, 181 (U. S. Comp. St. 1901, pp.
1670, 1662), or 44 cents per pound and. 55 per cent, ad valorem under para-
graphs 368, 369, or 366." The protest was submitted without the introduc-
tion of any évidence in support thereof, and no appearance was made in be-
half of the importera. The return of the collector recites, among other things :
"I beg to State that the merehandise in question consists of women's dress
goods in single patterns, each pattern comprising material for the body of the
dress and material for trimming the same. In separate lengtbs or pièces. Ail
of said material, both for the foundatlon or trimming, is embroidered in silk ;
and the claim that only a portion of the material is embroidered, and should
THOMAS V. WANAMAKER. 93
be so assessed, Is wlthout foundatlon." In default of contradictory évidence
the presumption of correctness attending the retum of the collector prevails.
We assume for the purpose of décision, therefore, that that return is true.
The Important fact vvhich it introduçes into this record as true is that the
whole of the merchandise covered by this protest was embroidered, and that
with silk. In the case of In re Crowley, 55 Fed. 283, 5 C. 0. A. 109, merchan-
dise exactly simllar to this was the subject of décision. The paragraph Inter-
preted by that décision was 398 of the tarife act of 1890 (Act Oct. 1, 1890, a
1244, § 1, Schedule K, 26 Stat. 597). The gist of the décision was that woolen
dress patterns embroidered with silk or silk and métal are not dutiable as
woolen "embroideries," but were dutiable as woolen "dress goods," under para-
graph 395 of said act (26 Stat. 597). Paragraph 371 of the tarifC act of 1897
(Act July 24, 1897, c. 11, i 1, Schedule K, 30 Stat. 185 [U. S. Comp. St. 1901. p.
1667]), is the one corresponding to paragraph 398 of the tarifiC act of 1890. The
former was enacted sinee the décision cited was rendered, and difCers in im-
portant particulars from said paragraph 398. Said paragraph 398, so far as
pertinent, reads : "398. On webbings • * • and embroideries * * * made
of wool * * * or of whlch wool is the component material, the duty shall
be * • *." Said paragraph 371 reads as foUows : "371. Webbings, « * *
embroideries and articles embroidered by hand or machinery, * * * made
of wool or of which wool is a component material, * » » fifty cents per
pound and sixty per centum ad valorem." It will be noted that Congress, in
the act of 1897, bas added the words. "and articles embroidered by hand or
machine." While it may be true that under the text of paragraph 398, the
subject of said décision, there may be no escape from the conclusion that only
woolen embroideries, or embroideries made in part of wool, are meant, and
while It may be equally true that that meanlng attaches to the word "em-
broideries" as used in paragraph 371, the addition of the words, "and arti-
cles embroidered by hand or machinery," therein, présents the question wheth-
er or not this language is intended to embrace a larger class of merchandise,
to wit, woolen articles embroidered by whatsoever material the embroidery
may be composed of, as well as woolen embroideries. Whatever our conclu-
sion might be on that point, we think this case is concluded by the fact that
the protestant invokes the application of paragraph 369 of the act of July
24, 1897, c. 11, § 1, Schedule K, 30 Stat. 184 [U. S. Comp. St. 1901, p. 1667],
as covering the merchandise in questiou. The language of that paragraph, in
so far as pertinent, Is : "369. On women's and chlldren's dress goods * * *
and goods of similar description or character * » * composed whoUy or
in part of wool, and not speeially provided for In this act, the duty shall be,"
etc., "according to welght, value," etc., thereby asserting the claim that the
merchandise is properly described as "women's and children's dress goods"
and dutiable as such under said paragraph. In G. A. 4890 (T. D. 22,893) a
precisely similar question arose. The issue there was whether or not cer-
tain articles of wearing apparel were dutiable under said paragraph 371 as
"articles embroidered by hand or machinery," or paragraph 370 of the tariff
act of 1897, as "articles of wearing apparel of every description." This board
held that the said provisions of said paragi-aph 370 were more spécifie than
the said provisions of paragraph 371. In conformity with the board's décision
In that case, we hold that the provisions of paragraph 369, relating to "wom-
en's and children's dress goods," which are descriptive of the merchandise the
subject of this protest, are more spécifie than the provisions of paragraph 371
assessing duty upon "articles embroidered by hand or machinery." The con-
joint provisions of the proviso to paragraph 339 and paragraph 390 of said act
are a part of protestant's claim. Thèse provisions, however, when read to-
gether, prescribe merely a minimum rate of duty upon such merchandise, which
is much less in this case than that prescrlbed by paragraph 369, found appli-
cable. The protest, therefore, claiming the merchandise properly dutiable
under paragraph 369, according to the value and the weight thereof, is sus-
talned. In ail other respects the protest is overruled, and the décision of the
collector afflrmed. Reliquidation will follow.
In support of the collector's appeal from the circuit court it was
argued (i) that the merchandise is not known commercially as "dress
9^ 129 FEDERAL EEPORTEB.
goods," but as "dress robes," and is therefore not încluded within the
enumeration of the former in said paragraph 369 ; (2) that it is dutiable
under said paragraph 370 as "wearing apparel * * * made up
* * * in part"; and (3) that, conceding the merchandise to be
dress goods, within the meaning of paragraph 369, it is specially pro-
vided for in said paragraph 371 as "articles embroidered," and is there-
by removed from the former paragraph, which contains the quaHfying
expression "not specially provided for," and which in this respect differs
from paragraph 371, which contains no such limitation.
James B. Holland and Wm. M. Stewart, for appellant.
Frank P. Prichard and Thomas S. Gates, for appellee.
Before ACHESON, DAI.LAS, and GRAY, Circuit Judges.
DALLAS, Circuit Judge. Nothing need be added to the opinion of
the Board of Appraisers. We think it adequately supports the décision
made by the board, and the decree of the Circuit Court sustaining that
décision is therefore affirmed.
RUTLEDGE v. NEW ORLEANS & N. E. R. CO.
(Circuit Court of Appeals, Fifth Circuit AprU 5, 1904.)
No. 1,317.
1. CAEEIERS— iNJUBIES TO PASSENGEBS— TiME TO ALIGHT.
Where a train stopped for a passenger to aliglit, and when he was in
the act of doing so, and wltliout allowing a reasonable time for that pur-
pose, it was suddenly started with a jerk, whereby he was thrown from
the car and injured, he was entltled to recover therefor.
2. SAME— CONTBIBUTOKY NEGLIGENCE— EVIDENCE.
In an action for injuries to a passenger while attemptlng to allght, there
belng conflict in the évidence on the issue as to hls alleged contrlbutory
négligence In stepping off the train wbile it was movlng, it présents a
question for the jury.
Pardee, Circuit Judge, dlssentlng.
In Error to the Circuit Court of the United States for the Southern
District of Mississippi.
This action was brought In the state court by William Rutledge, a citizen
of Mississippi, against the New Orléans & Northeastern Railroad Company,
a Louisiana corporation, and was, on pétition of the défendant company, re-
moved to the court below. PlaintlfC clalmed $25,000 damages, alleging that he
was a passenger on one of the defendant's trains, having pald hls fare from
Hattlesburg, Miss., to Elllsvllle, Miss., and that the train was scheduled to
stop at Elllsvllle for passengers to get off, and that It dld stop, or coma prac-
tlcally to a stop* and that plalntlff was alighting from the train, but that, while
he was In the act of alighting, the train, by the négligence and carelessness of
the défendant, through its servants, was suddenly jerked and moved forward,
whereby the plalntlff was thrown down and under the train, and so Injured
as to deprlve hlm of an arm and a leg, and cause him much suffering. De-
fendant pleaded "Not guilty," and, for further plea, alleged that the In-
juries complained of were brought about by the plalntiff's own négligence.
There Is no conflict in the évidence that the plalntlff was Injured to the extent
H 1. See Carriers, vol. 9, Cent. Dig. § 122&
EXJTLEDGE V. NEW ORLEANS A N. E. R. CO. 95
of losing his arm. When the car flrst stopped at the station, the plalntlff falled
to get off. There Is confllct In the évidence as to whether hls fallure to alight
was caused by the press of other passengers gettlng Into the train, and the
crowd that was getting off, or whether he unnecessarily delayed alighting.
The train left the station wlthout hls alighting, and the pivotai question in the
case Is whether he got off the train while it was moving so as to make his act
dangerous to hlm, or whether the cars were stopped for the purpose of lettlng
him off, and started again with a sudden jerk at the Instant that he attempted
to alight On that subject he testlfied as follows : "Q. And by the time you
had passed through coach and got to platform, the train had started? A. Xes ;
the train had started, and I couldn't get off. I wouldn't get off before the
train stopped. Q. You wouldn't get off till the train stopped again? A. No, sir.
Then the flagman or some one told me, 'Old man, get off,' and I told hlm I
wouldn't get off till the train stopped ; and I thought It had stopped, and went
to step off, and did step, but they gave a sudden jerk, and I fell. Q. Jerked
what? The train? A. Yes, sir; just as I went to step off, they moved or
jerked the train, and I fell down. * * * Q. And when It came to a stop
again, you stepped off, and the train gave a jerk, and you fellî A. The train
came to a stop, and as it came to a stop I stepped off, and, as I was stepping
off, the train gave a sudden jerk, whlch threw me down." The plalntlff was
corroborated by J. E. Sharbrough, who also got off the train at Ellisville. He
testlfied that, "when we had gotten out and taken a few steps, the train started
— pulled out— and then the train came to a llttle stop." Several other witnesses
testlfied that the train did not stop a second time, and that the plalntlff got off
while the train was moving. The trial court instructed the jury to return a
verdict for the défendant, and it Is assigned that the court erred In direeting
the verdict
A. J. McLaurin, for plaintiff in error,
Harry H. Hall, John W. Fewell, and Thomas G. Fewell, for défend-
ant in error.
Before FARDEE, McCORMICK, and SHELBY, Circuit Judges.
SHELBY, Circuit Judge, after stating the case as above, delivered
the opinion of the court.
If the plaintifï jumped or stepped ofï the train while it was moving at
such a rate as to make his act obviously dangerous, he was unques-
tionably guilty of contributory négligence, and would not be entitled
to recover. 2 Wood on Railroads (Minor's Ed. 1894) § 305 ; Watkins
V. Birmingham, etc., Company, 120 Ala. 147, 24 South. 392, 43 L,. R.
A. 297. But if it be true that the train was stopped to let him get off,
and when he was in the act of getting off, and without being allowed
a reasonable time for that purpose, it was suddenly started again with
a jerk, whereby he was injured, he would be entitled to recover. Bar-
tholomew v. New York Central Railroad Company, 102 N. Y. 716,
7 N. E. 623 ; Jeffersonville Railroad Company v. Hendricks Adm'r, 26
Ind. 228-233. We are of the opinion that the évidence in the record
shows that the question of contributory négligence should hâve been
submitted to the jury. Nelson v. New Orléans, etc., Railroad, 100
Fed. 731, 40 C. C. A. 673, and cases there cited; Mexican Central Rail-
road V. Townsend, 114 Fed. 737, 52 C. C. A. 369.
The judgment is reversed, and the cause remanded for a new trial.
FARDEE, Circuit Judge, dissents.
96 129 FEDERAL KEPOllTEU.
CHRISTENSBN ENGINEERING CO. v. WESïINGHOUSB AIR
BRAKE CO.
(Circuit Court of Appeals, Second Circuit February 13, 1904.)
No. 64.
1. CONTEMPT— PEOCEEDINGS FCB VIOLATION OF InTERLOCUTOBT INJTJNCTION—
Rbview.
Under the rule laid down by the Suprême Court In the case of In re
Debs, 158 U. S. 564, 15 Sup. Ot. 900, 39 L. Ed. 1092, an order in an equity
suit adjudgîng the défendant gullty of contempt for vlolating an inter-
locutory injunctlon restraining infringement of a patent cannot be re-
vlewed by the Circuit Court ot Appeals, except upon an appeal from the
final decree in the cause.
In Error to the Circuit Court of the United States for the South-
ern District of New York.
See 123 Fed. 632 ; 126 Fed. 764.
Wm. A. Jenner, for plaintiff in error.
Frédéric H. Betts, for défendant in error.
Before WALLACE, TOWNSEND, and COXE, Circuit Judges.
WAIvIvACE, Circuit Judge. This is a writ of error to review an
order of the court below adjudging the défendant in an equity suit
brought to restrain the infringement of a patent guihy of contempt
for violating an interlocutory injunction restraining such infringe-
ment.
This court has decided that such an order cannot be re-examined
hère, unless upon an appeal from a final decree in the cause. If it
can be reviewed in the court in which it was made at the final hear-
ing of the cause, it is not a "final décision," within the meaning of
section 6 of the act conferring jurisdiction upon this court. We
reviewed such an order in Gould v. Sessions, 67 Fed. 163, 14 C. C.
A. 366, but that case was decided before the décision of the Su-
prême Court in Re Debs, 158 U. S. 564, 573, 15 Sup. Ct. 900, 39 L.
Ed. 1092. After the décision in Re Debs, the question arose again
in Nassau Electric R. Co. v. Sprague Electric Co., 95 Fed. 415, 37
C. C. A. 146, and we dismissed the writ of error with this observa-
tion : "Upon the authority of the Debs Case, we are constrained
to hold that the order cannot be reviewed, except upon an appeal
from the final decree in the cause." In Cary Manufacturing Com-
pany V. Acme Company, 108 Fed. 873, 48 C. C. A. 118, we reviewed
on writ of error an order imposing a fine upon the défendant in an
equity suit for the violation of an injunction. The injunction, how-
ever, was not interlocutory, but was granted by the final decree.
This circumstance was not referred to in the opinion, but explains
the apparent confîict between the décision and that in Nassau Elec-
tric R. Co. V. Sprague Electric Co. The order was final, in the sensé
that it was a judgment in a criminal case, which was independent
of and separate from the original suit, and which could not be re-
viewed on an appeal from the final decree in that suit. Ex parte
Kearney, 7 Wheat. 38, 5 E. Ed. 391 ; New Orléans v. Steamship
CHRISTENSEN ENGINEERING CO. V. WESTINGHOUSE A. B. CO. 97
Co., 20 Wall. 387, 392, 22 L. Ed. 354. In Butler v. Fayerweather,
91 Fed. 458, 33 C. C. A. 625, 63 U. S. App. 120, the question wheth-
er an order like the présent could be reviewed by this court was not
involved. The order reviewed there was made in a cause to which
the plaintiff in error was not a party, and committed him for his re-
fusai to answer certain questions propounded to him as a witness ;
and the décision was placed upon the ground that in such a case the
aggrieved party "has no opportunity to be heard when the cause is
before the court at final hearing, and as to him the proceeding is
finally determined when the order is made."
Whether the présent order can be re-examined at the final hearing
of the cause, at which time ail previous interlocutory orders are open
for review, is a question which we are not now called upon to dé-
cide. Unless it can, there can, of course, be no review by an appeal
from the final decree. In Worden v. Searls, 121 U. S. 14, 7 Sup.
Ct. 814, 30 L. Ed. 853 — an equity cause to restrain the infringement
of a patent — ^two orders fining the défendant for contempt for the
violation of a preliminary injunction were reviewed and reversed up-
on an appeal from the final decree. In that case, however, the court
regarded the orders as only nominally proceedings in contempt.
The hardship of compelling a party to wait until he can appeal
from a final decree to obtain a review, especially in cases in which
the défendant has been committed and is suffering imprisonment, is
manifest, and we should be glad to be able to see our way clear to
départ from our former décision. That décision, however, was con-
strained by the décision in the Debs Case, and the Debs Case is an
authority which cannot be disregarded. This was an equity cause in
which some of the défendants were adjudged guilty of contempt for
the violation of a preliminary injunction and sentenced to imprison-
ment. Having been committed to jail, they applied to the Suprême
Court for a writ of error, and also for one of habeas corpus. The
court denied the writ of error, and it is stated by the reporter that it
was denied "upon the ground that the order of the Circuit Court
was not a final judgment or decree." When the apphcation was
made, the act establishing Circuit Courts of Appeals (Act March 3,
1891, c. 517, § 5, 26 Stat. 827 [U. S. Comp. St. 1901, p. 549]) author-
ized the Suprême Court to review by writ of error convictions in
cases of infamous crime; and if the déniai had been placed upon
the ground that the case was not one of a conviction for an in-
famous crime, and therefore was reviewable only upon a certificate
of division of opinion, there would hâve been no conflict between
the décision and that in New Orléans v. Steamship Co., 2 Wall. 387,
22 L. Ed. 354, in which the court held that contempt of court is a
criminal offense, and the imposition of a fine is a judgment in a crim-
inal case. We are not at liberty to assume that the Suprême Court
overlooked its former décision in New Orléans v. Steamship Ce,
or that its reporter incorrectly reported the later décision.
The writ of error is dismissed.
129 F.— 7
98 12» FEDERAL RBPORTEB.
THE DUMPER NO. 8.
(Circuit Court of Appeals, Second Circuit. January 25, 1904.)
No. 54.
1. Salvage— Natubb of Service bt Mastkr and Crew— Eitect of Towage
conxeact bt owner.
A contract by an owner of tugs to tow dumpers f rom their dumps in the
clty to sea and return Imposed no obligation on the master and crew of
one of the tugs to go to the rescue of a dumper which had been abandoned
by another tug, and had drlf ted out to sea ; and where they did so, and
at considérable péril to themselves reseued her, and brought her safely
to port, the service was voluntary, and they are entitled to compensation
as salvors.
2. Same— Amount of Awaed.
A salvage award of $1,175 to the master and crew of a tug, consisting
of nine men, for the rescue of a dumper worth $8,000 to $10,000, which
had become derellct, and drifted 25 miles out to sea in a gale, and would
probably hâve been a total loss, heU not excessive, where the service was
entirely successful, and was performed at considérable personal rlslî.
Appeal from the District Court of the United States for the Eastern
District of New York.
This cause cornes hère upon appeal by claimants from a decree of
the District Court for the Eastern District of New York awarding libel-
ants salvage to the amount of $1,175.
Le Roy S. Gove, for appellant.
Peter S. Carter, for appellee.
Before LACOMBE, TOWNSEND, and COXE, Circuit Judges.
TOWNSEND, Circuit Judge. At about half past 10 o'clock on
the morning of February 8, 1902, the master of the steam tug De Witt
C. Ivins, having been notified by its owner, Michael Moran, that two
of claimant's dumpers, which had been in tow of one of Moran's steam
tugs, were adrift, and in danger, started to rescue them. On arriving
at Sandy Hook he learned that they had last been seen about 1 1 o'clock.
After proceeding in an east southeast course for some 25 miles he
found the two dumpers abandoned by their tug, with no one on board,
and drifting out to sea. The wind was blowing northwest, 50 or 60
miles an hour, there was a heavy sea on, and it was freezing weather.
Dumper No. 8, the one saved by libelants, was covered with ice four
inches thick ail over her bow and sides. The mate of the Ivins volun-
teered to go aboard said dumper, provided the tug could be put along
side of her. The proposed undertaking involved risk to the tug of col-
lision with the dumper, and risk of drowning to any one attempting to
board the dumper. The risk was assumed, the undertaking was suc-
cessfully accomplished, involving damage to the tug to the amount of
$200, and the dumper was made fast and towed back to New York,
reaching there the following morning at 7 o'clock. Another tug, the
Ellis, also belonging to Moran, went down to look for the dumpers, and
1[ 2. Salvage awards in fédéral courts, see note to The Lamingtou, 30 C. C.
A. 280.
THE DtTMPER NO. 8. 99
found the other one, but her master testified that he was unable to get
any one aboard of her, on account of the danger involved in rough sea
and other conditions as stated above. The Ivins was worth $30,000;
the dumper some $7,000 to $10,000. The owner of the Ivins having
released the dumper and her owners from any claim of said tug for
salvage, the court awarded salvage to the libelants as follows : To the
captain of the vessel, $300; the mate, $200; the two deck hands, $100
each; the two engineers, $100 each; the two firemen, $100 c ch; the
steward, $75 — a total of$i,i75.
There is no question as to the existence of two of the éléments neces-
sary to constitute a valid salvage claim, namely, a marine péril and suc-
cess. The claimants rest their appeal on the contention that thèse serv-
ices were not voluntary, but were included under the contract between
the claimants and Moran. This contract provided that Moran should
tow the dumpers from the différent dumps around New York and
Brooklyn to sea, and return them to the différent dumps, or to the foot
of Court Street if they needed repairs, for a stated price. Counsel for
claimants insists that thèse libelants were not volunteers because they
were only occupied in the usual service for which they were employed
and paid. There is nothing in the contract to support this contention.
It was a mère contract of towage. The évidence fails to show any
obligation resting on Moran, or on the crews of bis tugs, to undertake
to save a dumper when derelict. When the Ivins reached the dumper,
under conditions already shown, the sole question was one of a vol-
untary service on the part of the master and crew. They were under
no obligation to risk their lives and the safety of the tug in an attempt
to rescue the dumper. The mate volunteered, the master acquiesced,
and ail voluntarily participated in the danger incident to the marine
péril. The rule invoked by counsel for claimants that a master and
crew thus employed are not volunteers is generally confined to those
aboard the ship in péril. 3 Parsons, Contracts, 317, and cases noted.
There it is generally held that the services must be considered as ren-
dered under contract, because it would be unwise to tempt the sailors
to let the ship incur périls, and afterwards aliow them compensation
in the nature of a reward for success in averting such périls. The
Clara and Clarita, 23 Wall. 1-16, 23 L. Ed. 146. Mr. Justice CHfford
says:
"A salvor Is deflned to be a person who, without any particular relation to
the ship in distress, profîers useful service, and glves it as a volunteer ad-
venturer, without any pre-existing contract that connected him wlth the duty
of employlng himself for the préservation of the vessel." Page 16.
The test as to whether services are voluntarily rendered is whether
such services are rendered by those who are under no légal obligation
to render them. Hughes, Admiralty, 129.
In The Connemara, 108 U. S. 352, 2 Sup. Ct. 754, 27 L. Ed. 75 1, a
tug was employed to tow a ship, and both came to anchor at night.
A lire broke out in the night, and the ofScers and crew of the tug
âssisted in extinguishing the fiâmes, and were âwarded salvage there-
for. The Suprême Court held that the contract of the towboat and of
her crew was to tow the ship, and that for such other services as res-
cued the ship from an unforeseen and extraordinary péril the owner,
lOO 120 FEDERAL REPORTER.
ofFicers, and crew of the tug boat were entitled to salvage. We :on-
clude that the services rendered were the proper subject of a salvage
award.
It is further contended that the avi'ard is excessive. Whether the
amount was determined upon a valuation of the dumper at $8,000 or
$10,000 is immaterial. The évidence shows that the other dumper
was never found ; that this one was derelict, and drifting out to sea,
and would probably hâve been a total loss except for the efforts of
thèse salvors. We think the award was reasonable.
The decree of the District Court is affirmed, with interest and costs.
SAWTER T. ATCHISON, T. & S. F. R. CO. et al.
(Circuit Court o£ Appeals, Second Circuit. February 25, 1904.)
No. 29.
1. RAILKOADS — PEOPIKTY— TeANSFEK— BONDHOLDERS — EQUITT — ReMEDT AT
Law.
Where tlie property of a rallroad company was acquired by another
railroad company under foreclosure proceedings which were void as against
a holder of bonds guarantied by tlie mortgagor company, such bondholder
was not entitled to sue the purchasing company in equity to apply the
assets so transferred to the payment of his bonds, until he had exhaustod
bis légal remédies against the mortgagor.
2. Sameï— Recoveby of Bonds — Actions— Joindeb.
Where a holder of bonds guarantied by a railroad company deposited
them with a trust company for spécifie uses, and thereafter such company
wrongfully refused to deliver the bonds on demand, the owner could not
join an action to reeover them with a suit against another corporation,
which had acquired the assets of the guarantor company under void fore-
closure proceedings, to apply such assets in payment of the bonds ; such
company being in no way responsible for the trust company's withhold-
ing of the bonds.
3. Same— Damages— Pkoof.
Where railroad bonds were deposited for spécifie uses with a trust
company, whlch afterwards wrongfully refused to return the same on
demand, the fact that, because the bonds were not dealt In on the ex-
changes, and were obligations of a corporation which had become prac-
tically defunet, it was rendered difficult to establish their value, did not
justify plaintiff in resorting to a court of equity to reeover the same.
Appeal from the Circuit Court of the United States for the South-
ern District of New York.
For opinion below, see 1 19 Fed. 252.
John Ford, for appellant.
Alfred Opdyke, for appellee Atchison, T. & S. F. R. Co.
A. H. Van Brunt, for appellee Central Trust Co.
Before WALLACE and COXE, Circuit Judges.
WALLACE, Circuit Judge. _ The material facts set forth in the
very voluminous bill of complaint in this cause, and the prayers for
relief, are concisely and adequately summarized in the opinion of the
court below, and any recapitulation is unnecessary. The propositions
SAWYER V. ATCHI80N, T. & S. F. R. CO. 101
of law which control the case are so plain as to require no amplification
or citation of authority.
An analysis of the bill shows that the complainant is a creditor of
the Atchison, Topeka & Santa Fé Railroad Company, by reason of the
guaranty by that company of the payment of 20 negotiable bonds
made by the Colorado Midland Railroad Company, the guaranty being
indorsed upon the bonds; that thèse bonds are in the possession of
the Central Trust Company, having been placed there by the complain-
ant for certain spécifie uses, and the trust company wrongfully re-
tains them and refuses to return them to complainant; and that the
Colorado Midland Railroad Company and the Atchison, Topeka &
Santé Fé Railroad Company hâve denuded themselves of ail their
property, and the same has been acquired by the Atchison, Topeka &
Santa Fé Railway Company by proceedings which, as against the
complainant, were a nullity.
After recovering a judgment against the railroad company, and
upon the return of his exécution unsatisfied, the complainant will be
in a position to pursue the property in the hands of the Atchison,
Topeka & Santa Fé Railway Company, which was formerly the prop-
erty of the railroad company ; but it has no équitable cause of action
against the railway company until thèse remédies hâve been exhausted.
His cause of action is purely a légal one as against the défendants
the trust company and the railroad company, and he has as yet no
équitable cause of action against the défendant the railway company.
His remedy against the trust company is by an action at law in trover
or replevin, and his remedy against the railroad company is by an ac-
tion at law upon the guaranty. No action can be maintained against
the trust company and the railroad company jointly, because the
latter has taken no part in the conversion of the complainant's bonds,
and the former is not a party to the guaranty. The fact that it may
be difficult to prove the value of his bonds or of the guaranty in an
action against the trust company does not supply a reason for resort-
ing to a court of equity to recover of the trust company. It is always
difficult to establish the value of the obligations of an extensive corpora-
tion which has become practically defunct, because they are not dealt
in on the exchanges ; but it can be established, and not infrequently is,
in actions where the question is in controversy.
The court below properly held that the demurrers of the trust com-
pany and the railway company upon the grounds of want of equity
and multifariousness were well taken, and the decree is
Affirmed, with costs.
102 129 FEDEEAL HEl^ORTER.
STAR BRASS WORKS v. GENERAL ELECTRIC CO.
(Circuit Court o( Appeals, Sixtli Circuit April 2, 1904)
No. 1,317.
1. Appeal— Inteklocxjtoet Decbee. Granting Injukction— Advancement of
Cause.
A decree on the merits, flndlng Infringement of a patent, awarding a
permanent injunction, and directing a référence to ascertain damages
and profits, is an interlocutory decree granting an injunction, appealable
under section 7 of tlie act creating the Circuit Courts of Appeals (Act
March 3, 1891, c. 517, 26 Stat. 828), as amended by Act June 6, 1900, c.
803, 31 Stat. 660 [U. S. Comp. St. 1901, p. 550], and the appeal Is entitled
to precedence, as provided in said section, and to be advanced on the cal-
endar for hearing, subject, however, to the rules of the court as to the
filing of briefs, unless for reasons of exigency shown a spécial order is
made for an earlier hearingi
On Motion to Advance Cause.
See 109 Fed. 950.
Fred L. Chappell, for appellant.
Betts, Betts, Sheffield & Betts and Joseph Wilby, for appellee.
Before LURTON, SEVERENS, and RICHARDS, Circuit Judges.
LURTON, Circuit Judge. This is an appeal from a decree upon the
merits, finding infringement, awarding a permanent injunction, and
directing a référence to ascertain damages and profits. It cornes on
now to be heard upon the motion of the appellant to advance the cause
under section 7 of the Court of Appeals act (Act March 3, 1891, c. 517,
26 Stat. 828) as amended June 6, 1900 (31 Stat. 660, c. 803 [U. S. Comp.
St. 1901, p. 550]). That section, as amended, reads as follows:
"Sec. 7. That where, upon a hearing in equity in a District Court or in a
Circuit Court, or by a judge thereof in vacation, an injunction shall be grant-
ed or continued or a receiver appointed, by an interlocutory order or decree,
in a cause in which an appeal from a final decree may be taken uiider the
provisions of this act to the Circuit Court of Appeals, an appeal may be taken
from such interlocutory order or decree granting or continulng such Injunc-
tion or appolntlng such receiver to the Circuit Court of Appeals : Provided,
that the appeal must be taken vrlthin thirty days from the entry of such order
or decree, and it shall take precedence In the appellate court ; and the proceed-
ings in other respects in the court below shall not be stayed, unless othervrise
ordered by that court, or by the appellate court or a judge thereof, during the
pendency of such appeal : Provided further, That the court below may in Its
discrétion require as a condition of the appeal an additional bond."
Although the injunction order appealed from is not a preliminary
injunction intended to opéra te only imtil a hearing upon the merits,
it vvas nevertheless an "interlocutory decree," inasmuch as the decree
was not final in an appealable sensé. This appeal was taken within
30 days. The cause is therefore one which is entitled to take "pre-
cedence" upon the calendar of this court. But this does not mean that
1[1. Review of interlocutory decr^'es granting or continulng injunctions in
patent cases by Circuit Court of Appeals, see notes to Consolidated Piedmont
Cable Co. v. Pacific Cable Ry. Co., 3 C. C. A. 572 ; Southern Pac. Co. v. Earl,
27 C. C. A. 189 ; New York, N. H. & H. R. Co. v. Sayles, 32 C. C. A. 484.
THE ANSON M. BANGS. 103
the ruies of the court with référence to the filing of briefs are to be
ignored. Precedence is given by advancing the cause upon the calen-
dar over other cases not advanced, so that it may be called when ripe
for hearing under the rules, or earher if counsel shall choose to expedite
the préparation of the cause, or upon a spécial order made by the court
for spécial reasons of exigency made to appear.
The motion to give this cause precedence is allowed,' and it will be
set down for hearing as soon as the briefs are due under the rules,
or so soon as the record shall be printed and the briefs filed, if counsel
shall by diligence file same before due.
THE ANSON M. BANGS.
(Circuit Court of Appeals, Second Circuit March 2, 1904.)
No. 125.
1. Collision— Steam Tug and Schoonee.
A tug held solely in fault for a collision with a sehooner on a crosslng
course for persisting in her course, on the theory that the sehooner would
not run out her tack whieh she was privileged to do, with the duty rest-
ing on the tug to keep out of her way.
2. Same— Damages— Evidence.
Hearsay testimony introduced on a hearing before a commissioner to
détermine the damages caused by collision must be treated as of no pro-
bative force, although not objected to until the flling of exceptions to the
commissioner's report, and wUl not warrant a flnding not supported by
other évidence.
Appeal from the District Court of the United States for the Eastern
District of New York.
Le Roy S. Gove, for appellant.
Chas. C. Burlingham, for appellee.
Before WALLACE and COXE, Circuit Judges.
WAELACE, Circuit Judge. The concise opinion of Judge Thom-
as in the court hélow covers the facts and the law of the case as
regards the responsibility of the tug for the collision so adéquate-.
ly that little further need be said. We hâve carefully examined the
record and concur in his conclusions. It will not be useful to dis-
cuss the évidence. The primary fault which led to the collision
was the persistency of the tug in keeping her course along the
westward side of the channel upon the theory that the sehooner
would not run out her starboard tack, when a slight change of her
course to port at the time she made a slight change of her course
to starboard would hâve carried her astern Of the sehooner. The
sehooner was privileged to run out her tack, and it was her duty in
doing so not to change her course unless required by the exigencies
contemplated by the twenty-fourth rule of navigation, and it was obli-
gatory upon the tug as a steam vessel to keep out of the schooner's
H 2. See Admiralty, vol. 1, Cent. Dig. § 618.
104 129 FEDEEAL REPORTEE.
way. Although the schooner held her course for a short time after it
was apparent that she would strike the tug's hawser or scow unless the
tug made a décisive change of course, that conduct is not to be deemed
a fault It was her duty to hold her course until it was plain that
the tug could not so maneuver as to avert the péril. The absence of
a lookout on the schooner, or one who was attending to his duty, did
not contribute in the least to the coUision, as the collision took place
in thé daylight, and the master of the schooner, who was in charge of
her navigation, was himself keeping a lookout, was otherwise unoccu-
pied, and observed the tug vigilantly for the half or quarter of an hour
which intervened before the risk of collision and actual collision.
We must assume, from the assignments of error and argument at
the bar, that the appellants seriously care to contest the award of dam-
ages. Eliminating the hearsay testimony which was introduced by the
libelants before the commissioner, the amount of the loss was not suf-
ficiently established, and, although no objection was taken to this testi-
mony until exceptions were filed to the report of the commissioner, it
must be treated as of no probative force.
The decree will be reversed, without costs in this court, and with in-
structions to the District Court to ascertain the amount of damages,
and decree for the libelants, with costs of that court.
LOPEZ V. COLLIER.
(Olrcuît Court of Appeals, Fifth Circuit April 5, 1904.)
No. 1,331.
1. Appeal — FiNDiNGS OF Teial Cotjbt— Conflicting Evidence— Eeview.
A flnding of fact by the trial court based on conflicting évidence wlll
not be reversed on appeal where it is not clearly erroneous.
Appeal from the District Court of the United States for the Southern
District of Florida.
J. M. Phipps and George G. Brooks, for appellant.
G. Bowne Patterson and Joseph Paxton Blair, for appellee.
Before PARDEE, McCORMICK, and SHELBY, Circuit Judges.
PER CURIAM. This is a suit for a balance due for work doue
upon a naphtha launch belonging to Lopez, défendant in the court be-
low, and appellant hère, and for materials furnished in the course of
the work. The total alleged cost of the material, work, etc., was $1,693.
Payments on account and crédits amounted to $803. The balance
claimed was $889.61. The défendant claims that it was agreed and
understood that the work was not to cost more than $1,000; that it was
not good work; that the payments made, added to the amounts paid
eut, subséquent to the return of the boat by Collier, to hâve work donc
which should bave been done by Collier, leave nothing due to libelant.
There was a decree in favor of the libelant for $604.67, from which this
appeal is taken.
BULLOCK ELEC. <fe MFG. CO. V. WESTINGHOUSE ELEC. & MFG. CO. 10")
The case présents simple questions of fact. The évidence is con-
flicting. Several witnesses testified for libelant, and proved up his
case. They were contradicted by several witnesses produced by défend-
ant to prove up his case. The testimony was ail taken in présence of
the trial judge, who thus had an opportunity to see the witnesses and
observe their demeanor while testifying ; and, on the évidence, we are
not able to say that he reached an erroneous conclusion.
The decree appealed from is afHrmed.
BULLOCK ELECTRIC & MFG. 00. v. WESTINGHOUSB ELEC-
TRIC & MFG. CO.
(Circuit Court of Appeals, Sixth Circuit March 8, 1904.)
No. 1,242.
1. CoNTEMPT— Violation ofInjunction— Nature of Peoceedings to Ptjnish.
The willful violation of an injunction by a party to the cause is a con-
tempt of court, which constitutes a criminal misdemeanor, and the pro-
ceeding to punlsh therefor is in Its nature a criminal proeeeding, entirely
indépendant and distinct from the suit In whlch the injunction decree
was entered, and a judgment of conviction therein Is revlewable by writ
of error, and not by appeal.
2. SaME— REVIEW— JUEISDICTION OF CiBCUIT COUET OF APPEALS.
A judgment of a Circuit Court imposing a fine on a party for contempt
for the violation of an Injunction is a judgment in a criminal case, and
If unconditlonal and absolute, so that nothing remains but to exécute it,
Is final and revlewable by the Circuit Court of Appeals on a writ of error.
3. CONTRIBUTOET INFRINGEMBNT.
The making and selling of a single élément of a patented combinatlon,
wlth the purpose and expectation that such élément should be sent to
a foreign country and be there used in combinatlon with other éléments,
or in the practice of a method covered by the patent, is not contributory
infrlngement, Inasmuch as there was no Intent that the élément should
be put to an infrlnging use; the protection of the patent not exfendlng
beyond the limlts of the United States.
4. Patents— Injunction against Infkingement— Acts Constittiting In-
fringement.
A preliminary injunction was granted restrainlng the défendant In an
infrlngement suit from "the making, using, or selling of any apparatus
embodying the Inventions recited or specifled" in the clalms of three pat-
ents. The first two covered combinatlons of mechanical éléments, one
élément in each being a motor which operated by the method of the third
patent, çpvering such method alone. Pending the suit défendant made
and shlpped to a customer in Canada the motor of the patent, with the
expectation and intent that it would be there used in the devices of the
combinatlon clalms of the first two patents and in the practice of the
method of the third patent. Held, that défendant was not chargeable
with infrlngement nor guilty of a violation of the injunction, slnce (1) the
making or selling of a single élément of a combinatlon Is not an infrlnge-
ment of a patent covering the combinatlon, but not the éléments sepa-
rately ; (2) the making or selling of a machine adapted to practice the
method of the third patent was not an Infrlngement of such patent ; and
(3) the use of the patented combinatlons, or the practice of the patented
method, in Canada, was not an Infrlngement of the United States patents,
and consequently défendant was not chargeable wlth contributory in-
frlngement
106 129 FEDERAL REPORTEE.
In Error to the Circuit Court of the United States for the Southern
District of Ohio.
The Westlnghousé Electric & Manufàcturlng Company fllea an original Mil
agalnst the Bullock Electric & Manufàcturlng Company to restrain the In-
fringement of certain letters patent granted to NIkola Tesla, belng patents
Nos. 381,968, 382,279, and 382,280. Upon the pleadlngs and upon certain affl-
davlts the court below, upon motion and notice, granted an injunction pendente
lite, restraining the défendant, its offlcers, agents, and servants, "from in-
frlnging upon claims 1 and 3 of patent 381,968, clalms 1, 2, and 3 of patent
382.279, and the clalm of patent 382,280, or any of them." The Injunction as
actually issued and served commanded the défendants to "deslst from making,
uslng, or selling àny apparatus embodying the inventions recited or specifled
In claims 1 and 3 of patent 381,968, claims 1, 2, and 3 of patent 382,279, and
the claim of patent 382,280, or any of them, or in any manner infringing upon
the rights of the complainant thereûndér." Subséquent to the service of this
injunction the défendant made and shipped a certain motor to Canada to be
there used as an élément in the combinatlons covered by the claims involved
of patents Nos. 381,968 and 382,279, and in the method claim of patent No.
382.280. Upon a motion supported by affldavits, and upon the admission of
couasel representing the défendant that the motor complalned of had been
made and shipped to Canada to be there used in the devices of the patent, and
that it was installed and so used, the court adjùdged that the claims of the
patents involved had been thereby infringed and the preliminary injunction
violated, and that the défendants were in contempt, and ordered to pay a fine
of $500. A bill of exceptions was allowed, and this writ of error sued out to
reverse this judgment
Arthur Stem, George Heidman, and Clarence E. Mehlhope, for plain-
tiff in error.
Frédéric H. Betts, Thomas B. Kerr, and C. Hammond Avery, for
défendant in error.
Before LURTON, SEVERENS, and RICHARDS, Circuit Judges.
LURTON, Circuit Judge, after making the foregoing statement of
the case, delivered the opinion of the court.
I. The willful violation of an injunction by a party to the cause
is a contempt of court constituting a spécifie criminal offense. Ex parte
Kearney, 7 Wheat. 38, 42, 5 L. Ed. 391 ; Crosby Case, 3 Wilson, 188;
Nevir Orléans v. Steamship Co., 20 Wall. 387, 392, 22 L. Ed. 354;
Hayes v. Fischer, 102 U. S. 121, 26 h- Ed. 95; 4 Ency. PI. & Pr. 766
et seq.
It is immaterial to consider the distinction sometimes noticed be-
tween criminal and civil contempts, inasmuch as both kinds involve the
vindication of the authority of the court, whether the remedy inci-
deiitally inure to the benefit of a party or not. Cyclo. Law & Proc. 6
et seq.
The proceeding to punish for a contempt is in its nature a criminal
proceeding, whether the resuit be partially remediable or not, and the
same rules prevail which govern in the trial of indictments, the de-
fendant being entitled to the benefit of any reasonable doubt. Ac-
cumulator Co. v. Consolidated Electric Co. (C. C.) 53 Fed. 793 ; In re
Acker (C. C.) 66 Fed. 291 ; Harwell v. State, 10 Lea, 544; 4 Ency. PI.
& Pr. 768 et seq. ; U. S. v. José (C. C.) 63 Fed. 951.
Although the contempt consist in the violation of an injunction
granted by a court of equity, the proceeding for its punishment "is
a new and distinct proceeding, and is quite independent of the equities
BULLOCK ELEC. & MFG. CO. V. WESTmaHOTTSE ELEC. & MFG. CO. 107
of the case on which the decree is founded," and "an appeal is not an
appropriate remedy for obtaining a review." City of Frankfort v.
Deposit Bank of Frankfort (decided at February session of this court)
127 Fed. 812 ; New Orléans v. Steamship Ce, 20 Wall. 387, 392, 22
L. Ed. 354 ; In re Chetwood, 165 U. S. 443, 17 Sup. Ct. 385, 41 L. Ed.
782.
Is it reviewable by a writ of error ? A contempt proceeding is classi-
fied as a misdemeanor and not as a felony. In re Acker (C. C.) 66 Fed.
291. Misdemeanors are reviewable by this court upon writ of error
by virtue of the broad appellate powers conferred by the act of March
3, 1891, c. 517, 26 Stat. 826 [U. S. Comp. St. 1901, p. 547], estabhshing
Circuit Courts of Appeal, and defining and regulating the appellate
powers of United States courts. If, therefore, the imposition of the
fine complained of "was a judgment in a criminal case" as it is de-
fined to be in New Orléans v. Steamship Co., 20 Wall. 387, 392, 22
L. Ed. 354, it was a judgment in a misdemeanor case; for contempts
are universally classified as misdemeanors, and not félonies. In re
Acker (C. C.) 66 Fed. 291. If a judgment in a misdemeanor case,
it is reviewable upon writ of error by this court. This conclusion was
reached by the Circuit Court of Appeals for the Second Circuit in
Gould V. Sessions, 67 Fed. 163, 14 C. C. A. 366. But in Nassau Elec-
tric R. Co. V. Sprague Electric Co., 95 Fed. 415, 37 C. C. A. 146, and
Christensen Engineering Co. v. Westinghouse Air-Brake Company
(decided Feb. 15, 1904) 129 Fed. 96, writs of error were dismissed
upon the authority of In re E)ebs, 158 U. S. 564, 573, 15 Sup. Ct.
900, 39 E. Ed. 1092.
In the statement of the Debs Case, at page 573, 158 U. S., and page
903, 15 Sup. Ct., 39 L. Ed. 1092, it is stated that the défendants in that
case had "applied to this court for a writ of error, and also one of
habeas corpus. The former was denied, on the ground that the order
of the Circuit Court was not a final judgment or decree." The only re-
port of the décision on the writ of error is found in 159 U. S. 251, 15
Sup. Ct. 1039, where the statement is, "Pétition denied."
The Suprême Court had no jurisdiction in respect of writs of error
in misdemeanor cases, and the writ of error upon this ground was
necessarily denied. The reporter's statement that it was denied be-
cause the order "was not a final judgment or decree" is doubtless an
error. Certainly we do not feel justified in departing from the well-
settled doctrine, so often enunciated in former cases, in respect of the
distinctness of a judgment imposing a fine for a contempt from the case
in which the disobeyed order was made, upon so slender an authority.
If the judgment, as in this case, was in fact unconditional and- absolute,
so that nothing remained but to exécute it, it was in every sensé a final
judgment.
The claim that a défendant in such circumstances must await the
final resuit of the cause in which the injunction was granted before he
can have the judgment inflicting fine or imprisonment reviewed upon
the theory that the judgment is not final is absolutely unsupportable.
If it be an independent and distinct proceeding from the residue of
the case, it will be no more final after that case has reached a final de-
cree than when the fine was imposed. To say that he may pay his fine
108 120 FEDERAL REPORTER.
or endure his imprisonment and review the legality of the matter at
some indefinite time in the future is to deny, in effect, the right of
review at ail. The motion to dismiss the writ is denied.
Was the défendant, on the conceded facts of the case, guilty of con-
terhpt as matter of law? Upon this writ of error no question as to
whether the injunction was rightly or wrongly, providently or im-
providently, issued can arise. The court confessedly had jurisdiction
of the parties and of the subject-matter, and the bill of exceptions re-
cites that the temporary injunction was issued upon bilI, answer, ex-
hibit, affidayits, "and upon the agreement of the défendant."
Neither is the resuit to turn upon any question of conflicting fact,
for it is not the province of a reviewing tribunal to weigh the facts
upon a writ of error.
The claims which défendant was enjoined from infringing were
the first and third of patent No. 381,968, granted to Nikola Tesla,
May I, 1888, and read as follows:
(1) "Tbe combination, with a motor containing separate or independent cir-
cuits on the armature or field magnat, or both, of an alternating current gen-
erator containing Induced circuits eonnected independently to corresponding
circuits in the motor, whereby a rotation of the generator produces a pro-
gressive shifting of the pôles of the motor, as herein described."
(8) "The combination with a motor having an annular or rlng-shaped fleld
magnat and a cyllndrical or équivalent armature, and independent eoils on the
field magnet or armature, or both, of an alternating current generator hav-
ing correspondingly independent coils and circuits including the generator coils
and corresponding motor coils, in such manner that the rotation of the gene-
rator causes a progressive shifting of the pôles of the motor in the manner
set forth."
The first, second, and third claims of patent No. 382,279, granted
May i, 1888, to Nikola Tesla, and are in thèse words:
(1) "The combination, with a motor containing independent induclng or en-
ergizing circuits and closed induced circuits, of an alternating current gene-
rator having indiiCed or generating circuits, corresponding to and eonnected
with the energizing circuits of the motor, as set forth."
(2) "An electro-magnet motor having its field magnets wound with indé-
pendant coils and its armature with independent closed coils, in combination
with a source of alternating currents eonnected to the fleld coils, in combina-
tion with a source of alternating currents eonnected to the field coils and capa-
ble of progressively shifting the pôles of the flold magnet, as set forth.
(3) "A motor construeted with an annular field magnat wound with inde-
pendent coils and a cyllndrical or disk armature wound with closed colis, in
combination with a source of alternating currents eonnected with the fleld
magnet coils, and actlng to progressively shift or rotate the pôles of the field
as herein sat forth."
And the single claim of patent No. 382,280, granted May i, 1888,
to the sanie patentée, which reads as follows :
"The method herein described of electrically transmltting power, which con-
sists in producing a continuously progressive shifting of the polaritles oC
either or both éléments (the armature or field magnet or magnets) of a motor
by developing alternating. currents In independent circuits, including the mag-
netizing eoils of either or both éléments, as herein set forth."
Confessedly the five claims of the first two patents are combination
claims. The single claim of the third patent is not a mechanical
claim, but a claim for a method of electrically transmitting power. A
BULLOCK ELEC. & MFG. CO. V. WESTINGHOTJSE ELEC. & MFG. CO. 109
inotor constructed according to the spécifications of the patent is one
of the éléments in each of the combination claims, and the évidence
tended to show that such a motor must operate by the method of the
third patent.
The plaintifï in error was adjudged to be in contempt because,
pending the injnnction, it made and shipped to a customer in Canada
the motor of the patent, with the expectation and intent that it would
be there used in the devices of the combination claims and in the
practice of the method of transmitting electrical power protected by
the cîaim of the method patent. Was this, as matter of law, a con-
tempt of the authority of the court?
The injunction forbid "the. making, using, or selling of any ap-
paratus embodying the inventions recited or specified" in the claims
of the three patents heretofore set out. The monopoly of a patent
extends to the making or selling, as well as the using, of the patented
device within the United States. Adams v. Burks, 17 Wall. 453, 456,
21 L. Ed. 700; Heaton-Peninsular Button Fastener Co. v. Eurêka
Specialty Co., 77 Fed. 288, 291, 25 C. C. A. 267, 35 L. R. A. 728;
Dorsey Rake Co. v. Bradley M. Co., 12 Blatchf. 202, Fed. Cas. No.
4,015-
While it is true that the monopoly of the plaintiff's patents did not
extend beyond the limita of the United States, yet it would be no
défense to say tlu.t the patented article had been made in the United
States only for the purpose of being sold and used in a country to
which the protection of the laws of the United States did not extend.
The patentée is entitled to monopolize the making of his device in
the United States as well as a monopoly of there selling or using it.
Dorsey Harvester Co. v. Bradley Co., 12 Blatchf. 202, Fed. Cas. No.
4,015; Ketchum Harvester Co. v. Johnson Co. (C. C.) 8 Fed. 586;
Adrian Platt Co. v. McCormack Co. (C. C.) 55 Fed. 288. Gould v.
Sessions, 67 Fed. 163, 14 C. C. A. 366, is not in conflict, for in that
case the only question concerned the alleged violation of an injunc-
tion against the future making, selling, or using of the patented article.
The articles sold in supposed violation of the temporary injunction
had been made before the injunction was granted, and pending the
injunction were shipped to Canada and there sold. There had been,
iherefore, no violation of the injunction, because there had been no
making or selling or using of the patented device after the allowance
of the injunction, within the limits of the United States. But it is
elementary that neither the making, selling, nor using of one élément
of a combination is infringement. Prouty v. Ruggles, 16 Pet. 336,
10 L. Ed. 985; The Corn Planter Patent, 23 Wall. 181, 224, 23 L.
Ed. 161; Rowell v. Lindsay, 113 U. S. 97, ici, 5 Sup. Ct. 507, 28
h. Ed. 906. In the corn planter patent Mr. Justice Bradley said:
"Where a patentée, after describlng a machine, claims as his invention a
certain combination of éléments, or a certain device, or part of the machine,
this is an implied déclaration as eonclnsive, so far as that patent Is concerned,
as if it vs'ere expressed that the spécifie combination or thing clalmed Is the
only part which the patentée regards as new. True, he or some other person
may hâve a distinct patent for the portions not covered by this ; but that vrill
speak for Itself. So far as the patent in question is concerned, the remaining
parts are old or common and public."
110 129 FEDERAL EBPOKTER.
In Rowell v. Lindsay, Mr. Justice Wood said :
"The patent of the plaintiffs is for a combinatlon only. None of the separate
éléments of wliich tiie patent is composée! are clairaed as the invention of the
patentée; therefore none of them, standing alone, are ineluded in the mo-
nopoly of the patent."
_It mtist follow, therefore, that, uniess there be something to take
this case out of the gênerai ruie, the making or selUng or using of a
single élément of a combination patent does not per se constitute an
infringement of a combination claim. Neither can it be said, in a
légal sensé, that any one élément of a combination patent is an "ap-
paratus embodying the invention," within the meaning of the injunc-
tion which the défendant is supposed to hâve disobeyed.
It may be true, as claimed, that the Tesla motor constitutes the
real essence of the three Tesla inventions covered by the claims of
the patents in suit. Tesla, however, neglected to claim the motor
as a separable device. He deliberately elected to claim it only as he
claimed the other éléments of his combination claims, and thereby
abandoned any claim to its novelty or to a monopoly of its use, ex-
cept as a part of one or other of his combination claims. The method
claim is not for any apparatus at ail. The mère fact that the Bullock
Company made and sold such a motor does not per se constitute an
infringement of such a method claim. We are not now dealing with
the question of contributory infringement for that will be considered
later. What we décide is that the mère fact that one has made and
sold an apparatus adapted to be used in following the methods of
Tesla's method claim does not constitute infringement. He is not
entitled to extend that claim so as to include apparatus adapted to its
practice. A licensee thereunder may practice the method with any
motor adapted to such method, and we see no reason, if the motor
itself is not patented, why such a licensee might not supply himself
with a motor adapted to so operate from any manufacturer.
But the Circuit Court found that after the granting of the injunc-
tion pendente lite the défendant company made and shipped to one
John McDougal, of the Caledonia Iron Works, Montréal, Canada, a
motor made according to the description of the Tesla patents in suit,
and that this was done with the intent and expectation that the motor
would be there installed and used in the devices of the patents in suit.
Judge Thompson held upon thèse facts that the défendants "had not
only infringed the plaintiff's patents by contributing to the device set
up in Canada, but directly infringed the claim of patent No. 382,280."
But did the défendants infringe either of the combination claims,
or disobey the injunction of the court, by making and sending to Cana-
da a single élément of those claims with the intention and for the pur-
pose of being there used in one or other of the combinations of the
patent. The monopoly of the patents did not extend to Canada. The
patented devices were open to be there made or sold or used because
the monopoly of the patent is limited to the United States and its terri-
tories. Uniess, therefore, the making and selling of a single élément
of a patented device, within the limits of the United States, with the
intention that it shall be sent without the United States, and there used
in association with the other éléments of the combination, constitutes
BTTLLOCK ELEC, * MFG. OO. V. WE8TINGHOU8E ELEO. <t MFG. CO. 111
infringement, the défendants did not disobey the order of the court.
But unless the making and sale of the single élément was with the in-
tention and purpose of aiding and abetting another to infringe there
would be no contributory infringement under the well-settled law upon
that subject.
No better définition of contributory infringement can be found than
that given by Judge Taft when speaking for this court in Thomson-
Houston Electric Co. v. Ohio Brass Works, 80 Fed. 712, 721, 26 C. C.
A. 107, where that learned judge said:
"It Is well settled that when one makes and sells one élément of a comblna-
tlon covered by a patent wlth the Intention and for the purpose of bringing
about Its use in such a comblnation he Is gullty of contributory infringement,
and is equally llable to the patentée wlth hlm who in fact organlzes the com-
plète comblnation. ♦ • * An Infringement of a patent is a tort analogoua
to trespass or trespass on the case. From the earllest tlmes, ail who take part
in a trespass, whether by actual participation thereln, or by aiding and abet-
ting it, bave been held to be jolntly and severally llable for the injury inflicted.
There must be some concert of action between him who does the injury and
hlm who is chargea with aiding and abetting, before the latter can be hefd
liable. When that is présent, however, the joint llability of both the principal
and accomplice bas been invarlably enforced."
The intent and purpose that the élément made and sold shall be
used in a way that shall infringe the comblnation in which it is an
élément constitutes the necessary concert of action between him who
furnished the single part and he who actually does the injury by the
assembling and using of ail the parts in such a way as to be an infringe-
ment. This principle runs through ail the cases upon contributory
infringment. Heaton-Peninsular Button Fastener Co. v. Eurêka
Specialty Co., yy Fed. 288, 297, 25 C. C. A. 267, 35 L. R. A. 728;
Saxe V. Hammond, Fed. Cas. No. 12,411; Wallace v. Holmes, 9
Blatchf. 65, Fed. Cas. No. 17,100; Thomson-Houston Co. v. Kelsey
Electric Co., 75 Fed. 1005, 22 C. C. A. i ; German-American Filter
Co. V. Loew Filter Co. (C. C.) 103 Fed. 303, afïirmed 107 Fed. 949, 47
C. C. A. 94.
In Snyder v. Bunnell (C. C.) 29 Fed. 47, Judge Coxe gave his em-
phatic approval to the principle laid down by Judge Shipley in Saxe
V. Hammond, cited above, where it was said that "the mère manufac-
ture of a separate élément of a patented combination, unless such manu-
facture be proved to hâve been conducted for the purpose and with
the intent of aiding infringment, is not in and of itself infringement."
That the single élément was made and sold was with the intent and
purpose of aiding another in infringing must appear, or the necessary
concert of action will be missing. This may be shown presumptively,
as it is when the article is incapable of any other use than an infringing
one. If, on the other hand, it be adapted to other uses "the intention
to assist in infringement must be otherwise shown affirmatively."
Thomson-Houston Co. v. Ohio Brass Works, 80 Fed. 712, 723, 26
C. C. A. 107. Thèse principles we think détermine this case.
The finding that the intent and purpose in making and selling this
motor was that it should be used in the patented devices in Canada
is a finding against any infringing purpose. It would not be an in-
fringement to put the motor to the use intended, because that use was
beyond the protection of the patent. The défense is as complète as
112 329 FEDERAL REPORTER.
if the intent had been to furnish the motor to one havîng a license to
make, sell, and use. In neither case would there be an intent to assist
in an infringement, and without such intent the plaintifï in error was
not infringing the patents or disobeying the order of the court.
What we hâve said appHes as well to the method patent as to the com-
bination claims. There must be shown an intent to assist another in an
infringing use of the patented method. There being no intent to pro-
vide means by which another might unlawfully use the Tesla method,
there is no contributory infringement.
The judgment, for thèse reasons, must be reversed, with directions
to discharge the rule to show cause.
Following will be found the opinion of the court below (THOIMP-
SON, District Judge) :
This suit was brought to enjoln défendant of letters patent Nos. 381,968,
382,279, and 382,280 and for an accounting, etc. On the 2d day of August.
1902, an Injunction was issued pendente lite restralning the défendant, ils ofli-
cers, etc., "from maklng, using, or selling any apparatus embodying the inven-
tions reclted or specifled in claims 1 and 3 of patent No, 381,968, claims 1, 2,
and 3 of patent No. 382,279, and claims of patent No. 882,280, or any of them, or
in any manner infringing upon the rights of the complainant thereunder."
Afterwards, to fill an order previously given by John McDoug-al, of Montréal,
Canada, the défendant made, at its works, in the United States, near Cincin-
nati, in the state of Ohio, and on the 27th day of April, 1903, shipped to Johu
McDougal, at Montréal, Canada, a 500 horse power induction motor, 13 feet
in diameter, with 44 pôles and operated from a "60 cycle, 2,200 volt, 3 phase
circuit," the factory cost of which was $11,265.20.
This défendant admits that his motor was made and shipped to McDougal
for the express purpose of being used in the device of the patents in suit, and
that it was so used, but insists that the plaintifï's patents were not Infringed
thereby, because the making of the device took place in Canada. This claim
is based on the assumption that there can be no making of a combination de-
vice, within the meaning of the patent laws, until ail its parts are assembled
and joined together, in aecordance with the teachings of the letters patent, and
as the assembling of the parts and the completion of the device in question
took place in Canada, where the patent laws of the United States are inop-
erative, the patents of the plaintifC are not infringed. If this be true, the
défendant, in évasion of the patent laws of the United States, may make ail
the parts of the device in the United States, ship them to Canada, and there
assemble them and sell the device to its customers in disregard of the plain-
tiff's rights — may thus appropriate the plaintifC's invention to its owu use
without making compensation therefor.
But is this trueî In issuinff the patents in suit the government of the United
States granted to the plaintifC "the exclusive right to make, use, and vend
the invention or dlscovery throughout the United States and the territories
thereof," and any making, use, or sale thereof within the terrltory of the
United States, agalnst the will of the plaintifC, Is an infringement of its mo-
nopoly, and a violation of the patent laws of the United States. Neither the
défendant nor McDougal were licensees of the plaintifC, but, on the contrary,
joined in appropriating the plaintiff's invention to their own use without the
plaintifC's consent and agalnst Its will., What the défendant did was done
in the United States for the express purpose of enabling McDougal to com-
plète the appropriation In Canada, not as the licensee of the plaintifC, but agalnst
the plaintiff's çfill, and was an infringement of the plaintiff's patents, and the
wrong is not lessened by the fact that McDougal is not amenable to the laws
which the défendant has violated. In making the motor the défendant not
only infringed the plaintiff's patents by contributing to the device set up in
Canada, but directly infringed the claim of letters patent No. 382,280, which
prrovides that "the method herein described of electrically transmittlng power.
BULIOCK ELEO. <fe MFQ, CO. V. WESTINGHOUSE ELEO. & MTG. CO. 113
whlch conslsts In producing a contlnnonsly progressive shJftlng of the polarl-
tles of either or both éléments (the armature or fleW magnet or magnets) of
a motor by developlng alternatlng currents In Indépendant circuits, Including
the magnetizlng colis of either or both éléments, as herein set forth."
The cases of Hobble v. Jennlson, 149 U. S. 355, 13 Sup. Ct. 879, 37 L. Ed. 766,
and Gould v. Sessions, 67 Fed. 163, 14 C. C. A. 366, clted by the defendant's
counsel, do not support défendant" s claim. In Hobble v. Jennlson the assignée
of the patent for Mlchigan sold the patented articles In Mlchlgan, knowing
that the purchaser Intended to use them in Oonnecticut As assignée of the
patent for Mlchigan, he had the exclusive right to make, use, and vend the
patented articles in Mlchlgan wlthout référence to where they mlght after-
wards be used. The assignment contalned no provision forbiddîng him to sell
the patented articles to persons who mlght or would use them in other States.
In Gould V. Sessions, Judge Shipman says: "The record, vchich conslsts
of the affidavlts, wlthout a flnding of facts, shows that, after the injunctlon
order had been served upon the plaintlfifs in error, they shlpped to Canada a
quantlty of the infrlnging articles, whlch had been made before the injunctlon,
wlthout previously offerlng them for sale, or notifying any one of their wish
to sell. The goods were followed by one of the défendants, who sold them to
a trunk dealer in Montréal, who had been a customer of Sessions', and had
been in the habit of buylng the nonlnfrlnging articles. Upon thls naked state
of facts, we are of opinion that there was no violation of the injunctlon order.
The sale was made In Canada, of trunk catches then in Canada, to a Canadian
trunk manufacturer, to be there placed upon trunks in the ordinary course of
business, and, so far as is known, no one of the articles was thereafter used
in the United States." In that case the infrlnging articles were made before
the injunctlon was issued, and were afterwards shlpped to Canada, and sold
and used there. They were not sold or used in the United States, and were
not made in the United States after the injunctlon order was issued. Judge
Shipman further said: "Inasmuch as the articles were made before the in-
junctlon, the manufacturer was not in contempt of the court's order, and, as
no preliminary arrangements for the sale were made in the United States,
the sale did not corne withln the prohibition. It Is probable that the Circuit
Court had misgivings in regard to the good faith of the affiants, but, as there
is no contradiction of their statements, we regard the question as one of law,
upon a State of facts not in substantlal controversy."
Hère there is an intimation that if there had been a preliminary arrange-
ment made In the United States for the sale of the infrlnging articles in Can-
ada the sale would bave come withln the prohibition of the injunctlon. In
the case at bar there is évidence whlch would perhaps justify the court In
finding that the sale of the motor was made In the United States. The order
for the motor was received by the défendant through Its agent In Canada, but
the contract was not made untll the order was accepted by the défendant.
Upon the évidence presented by the affidavlts and Ôie admissions of the
défendant, through Its counsel, the court flnds that the défendant made the
motor in violation of the order of Injunctlon, thereby commlttlng a contempt
of court, for whlch it should be punlshed.
It is urged in mltigation of the penalty to be Imposed that the défendant
acted under the advlce of counsel and believed that It mlght lawfully make
the motor. The défendant, however, made the motor in dellberate disregard
of the plaintiff's rights. The défendant knew that it was to be used in the
device of the patents in suit, and made It expressly for that purpose. The
défendant may bave believed that it was acting outslde of the scope of the
order of Injunctlon, but did not hesitate to vlolate the rights of the défendant
The court cannot permit litigants to construe orders of injunctlon to suit
their own convenience and Interest. If they be In doubt as to what Is required
of them, they must come to the court for instruction or for such modifications
or amendments of the order as will make their duty plain. Wrlts of Injunc-
tlon are issued to meet emergencles and to prevent irréparable Injury, and
thèse purposes may be defeated if the courts permit them to be trifled with
or dlsobeyed. It must be understood that the court will require prompt and
impliclt obédience to such orders. A fine of $500 will be imposed upon th«
défendant, which must be paid withln 10 days.
129 F.— 8
114 129 FEDERAL REPORTEE.
NATIONAL CASH EEGISTER CO. v. NEW COLUMBUS WATCH CO. et al.
SAME V. HALLWOOD CASH EEGISTER CO. et al.
(Circuit Court of Appeals, Sjxth Circuit. March 22, 1904.)
Nos. 1,220, 1,221.
1. Patents— Assignment—Insteuments Entitled to Registeation.
An instrument which does net purport to convey any présent Interest
In an existing patent, or one for which an application is pending, is not
an "assignment, grant, or conveyance," wlthln the meaning oï Rev. St.
U. S. § 4898 [U. S. Comp. St. 1901, p. 3387], and Its registratlon does not
opéra te as constructive notice to an assignée of a patent subsequently
applied for, and granted to the person executing the same.
2. Same— Notice to Assignée of Equitable Rights of Thikd Persons.
Where the attorney for an inventer, having been requested by com-
plainant to aseertain whether his client would sell a pending application
for a patent, bought such application himself, without dlscloslng the fact
tbat he was acting for any one else, and then resold and assigned the
same to complainant for more than double the priée he paid, complainant
was not affected by his knowledge that others had an équitable interest
therein.
3. Same— BoNA Fide Purchase without Notice.
Evidence of a fraudulent purpose, or conduct amounting to moral
turpitude, Is not necessary to deprive a purchaser of a légal title of the
advantage of his position. If he is shown to hâve been aware of such
facts as to put a reasonably prudent man upon inquiry, he is chargeable
with ail the facts which would hâve been developed if inquiry had been
prosecuted with reasonable diligence.
4. Same — Facts to Put Assignée on Inquiry.
Complainant purchased and took an assignment of an application for
a patent which had been pending in the Patent Office for some four years.
Six months before the filing of such application, complainant had been
in negotiation with the appllcant and two other persons for the purchase
of prier patents for inventions made by him relating to the same kind of
rnachines, and issued to the three, and was then informed of an agree-
ment between them by which, so long as it continued in force, the other
two persons furnished the capital necessary to perfect and patent ail in-
ventions made by the inventor relating to such subject-matter, and were
to hâve an equal interest in the patents therefor. In fact, the applica-
tion bought by complainant' covered an invention made under such agree-
ment, and the two persons who furnished the capital were each the équi-
table owners of a thlrd Interest therein. Held, that the facts were such
as to put complainant on inquiry, and to charge it with notice of ail that
might hâve been learned by such inquiry prosecuted with reasonable dili-
gence, and that it dld not acquiré a title to the patent subsequently issued
which would support a suit for its infringement.
Appeal from the Circuit Court of the United States for the South-
ern j5istrict of Ohio.
' Edward Réctor, Frank P. Davis, and J. B. Hayward, for appellant.
Paul A. Staley and Border Bowman, for appellees.
Before LURTON, SEVERENS, and RICHARDS, Circuit
Judges.'
LURTON, Circuit Judge. Thèse bills were brought to restrain
infringement' of patent No. 599,625, issued to the complainant, as
assignée of Harry M. Neer, for improvements in cash registers.
NATIONAL CASH EEGISXEE COi V. NEW COLUMBTJ8 WATCH CO. 115
The défendants separately pleaded that the complainant was not the
owner of the entire and complète interest in said patent, and that
Thos. Reynolds and Oliver W. Kelly were each the owners of an
undivided one-third interest in the inventions covered by said patent.
Issue was taken upon the said plea, and the cases heard together
upon the pleadings and évidence by District Judge Thompson, who
sustained the pleas and directed the bills to be dismissed.
The invention involved was completed in July, 1893, and an ap-
plication for a patent made by the inventer in September, 1893. In
July, 1897, Neer assigned his pending application to W. H. Chamber-
lain, and the latter assigned to the complainant, which prosecuted
the application and obtained a patent in February, 1898. When
Neer made this invention, and when his appHcation was filed, he
was associated with Thos. Reynolds and O. M. Kelly under a con-
tract by which the parties were to develop and finally manufacture
cash registers and adding machines. Neer was a man of marked
mechanical ability and inventive genius, but was without money or
crédit. Kelly and Reynolds obligated themselves to pay ail expenses
of prosecuting his inventions, including cost of patents, etc., and to
allow him $10 per week for his individual maintenance. Neer agreed,
upon thèse considérations, to assign to Kelly a one-third interest
in every invention he should make while this contract lasted, and to
Reynolds a like interest. This arrangement seems to hâve orig-
inated as far back as 1890, and prior to 1893 at least three patents
had been taken out by Neer for improvements in cash registers ;
the patents issuing to Neer and to Kelly and Reynolds, assignées,
of one-third each. To better secure his interest in ail future im-
provements Reynolds took from Neer, under date of July 22, 1893,
a document in thèse words :
"July 22, 1893.
"Received of Thos. Reynolds $30.00, In considération of which I assign to
hlm a one-third interest in ail my improvements and inventions in CJash Reg-
isters or Adding Machines which I hâve been working on and yet uncomplete.
Those completed, those for which application hâve been made for Pat. or I
contemplate making application for Patent upon. In short, it is understood
and agreed that he must be given a % interest in ail such patents conceived
by me. Harry Neer.
"Witness, W. M. Wise.
"Recorded Aug. 2, 1893."
This was recorded in the Patent Office August 2, 1893. The
money thus receipted for was on account of expenses incurred by
Neer in the invention hère involved.
Neither Reynolds nor Kelly had parted with their équitable in-
terest in this invention when Neer assigned the application in July,
1897, and we agrée with the court below in its finding that Kelly
and Reynolds were each the équitable owners of an undivided inter-
est in said invention when Neer assigned in 1897, and when the
patent issued to his assignées in 1898. The controversy turns wholly
upon the question as to whether the complainant Company was a
bona fîde purchaser, without knowledge or notice of this équitable
interest of Kelly and Reynolds. This so-called assignment by Neer
to Reynolds of July 22, 1893, is undoubtedly valid between the par-
116 129 FEDERAL EBPOKTBE.
ties, as an assignaient of a one-thîrd înterest in any future inven-
tions made by Neer. But it was not an assignment of any existing
patent or pending application, for Neer had long before assigned a
one-third interest in each of his inventions to Reynolds, and the
patents had been issued according to the assignment. Neer having
by his prior recorded assignments, which did not include improve-
ments, conveyed to Reynolds the one undivided third in ail existing
patents, and there being no application pending for any patent, there
was nothing upon which this document could operate which en-
titled it to registration as an assignment, grant, or conveyance, un-
der section 4898, Rev. St. U. S. [U. S. Comp. St. 1901, p. 3387] ;
Robinson on Patents, §§ 411, 769, 785; Wright v. Randel, 8 Fed.
591; Carpenter v. Dexter, 8 Wall. 513, 532, 19 L. Ed. 426; Lynch
V. Murphy, 161 U. S. 247, 16 Sup. Ct. 523, 40 L. Ed. 688.
That an assignment of a patent, together with any future improve-
ments thereon, is recordable and operative as a notice to subséquent
assignées of patents for improvements, may be conceded. Littlefield
V. Perry, 21 Wall. 205, 22 L. Ed. 577; Aspinwall Co. v. Gill et al.
(C. C.) 32 Fed. 697. But none of thèse former assignments included
improvements, so that no question of the effect of such an instru-
ment upon later assignées £xists. What we décide is that an in-
strument which was not intended to convey any présent interest in
any existing patent is not an "assignment, grant, or conveyance,"
within the meaning of the statute, and that its registration did not,
therefore, operate as constructive notice to the complainant Com-
pany.
Neither do we think the complainants are charged with notice
through the knowledge of Chamberlain. Chamberlain was Neer's
attorney, and had charge of his application. He was asked to find
out whether Neer would sell, and at what price. He bought the
application from his client for himself, not disclosing to his cHent
that he was buying for complainant, and then assigned the appli-
cation to complainant at more than double the price he had paid.
In the whole transaction he was acting in his own interest, and in
such circumstances there is no presumption that he would disclose
his information to his ostensible principal. Thomson-Houston Co.
V. Capitol Electric Co. (C. C.) 56 Fed. 849; Fine Mountain Co. v.
Bailey, 94 Fed. 258, 36 C. C. A. 229.
That the complainant did not hâve technical notice of the équi-
table interest of Kelly and Reynolds in this invention may also be
conceded. The real contention is that it had information of facts
which put the company upon inquiry, and that they are therefore
chargeable with knowledge of ail the facts which inquiry would hâve
disclosed. Cordova v. Hood, 17 Wall. 8, 21 L. Ed. 587; Jonathan
Mills Co. v. Whitehurst, 72 Fed. 496, 19 C. C. A. 130. At the date
of the acquisition of this invention by the National Cash Register
Company, it had not culminated in a patent. The right to a patent
was pending upon a mère application. This application was filed
September 9, 1893, and complainants are undoubtedly chargeable
with knowledge of the contents of the file bearing upon that appli-
cation. Mr. Frank J. Patterson, the gênerai manager of the com-
NATIONAL CASH REGISTER CO. V. NEW OOLUMBUS WATOH CO. 117
pany, and its vice président, actively represented his corporation,
and, upon an examination of the application, personally directed its
purchase. Some steps to this end had been taken by Mr. Rector,
the gênerai counsel of the company at Chicago, and the opinion of
local counsel at Dayton was subsequently taken as to the daims,
and the value of the invention to the complainant ; but neither of
thèse gentlemen had, or in the course of their connection with the
matter acquired, any knowledge of facts which would in any degree
afïect their client. Nor is either of them in the sHghtest degree
chargeable with any négligence or bad faith to their cHent or any
one interested in the matter.
Mr. Patterson was the responsible head of his corporation in
respect to ail such matters, and was the corporation in ail that he
said and did about the matter. The resuit must turn upon his
knowledge of facts, and the sufSciency of the facts known to him
when he brought this application to cast upon him the duty of
inquiry. In February and March of 1893 an efifort was made to
sell to the complainant patents No. 476,295, of June 7, 1892, 490,304,
January 24, 1893, and No. 491,020, of January 31, 1893, issued to
Neer and to Kelly and Reynolds, assignées of Neer, for one-third
each. Mr. Patterson was first approached and the negotiation
opened in behalf of Neer by Mr. A. W. Cochran, a relative of Neer's.
Patterson was then distinctly informed that Neer and Kelly and
Reynolds were associated together for the purpose of devising an
improved cash register, and also adding machines ; that Neer was
the inventor, and Kelly and Reynolds the capitalists ; that Neer
was under an engagement to assign to them an undivided one-third
interest, each, in ail of his inventions while in their einployment.
Cochran was greatly interested in securing for Neer a more favor-
able employment than he had with Kelly and Reynolds, and testifies
as foUows :
"I told them my cousin was a poor Inventor, and that Kelly and Reynolds
had plenty of money, and he was not liable to get his share of his inventions.
Mr. Patterson asked me why I did not bring the machine. I told him the
machines were at my house (the two cash registers, one in the metallic case,
the other in the wooden case, now before us), but that, if he would come to
Chicago, Harry would show him the machines. I also told hiln that Harry
would sell with the consent of Kelly and Reynolds, and would come with them
on a salary, and they could get the beneflt of ail his future inventions, of
which he bad several now in contemiplation. Mr. Patterson said 'Yes,' he
could see that Harry would not get as much ont of It as he would if he had
the money to put in it himself, but, of course, Kelly and Reynolds should
hâve the beneflts as long as they were furnishing the capital. Q. Did you
say anythlng at that time as to whether Harry Neer could go with the Na-
tional Company, and give them the beneiît of his future improvements or in-
ventions, without the company buying the machine ; and, if so, state what
you rcmember about tliis? A. I told the Pattersons that Harry could not leave
Kelly and Reynolds, without thèse machines were sold flrst, and that then
he would be free to come with them and give them the beneflts of his future
improvements. Q. Was anythlng said to the Pattersons about Neer's eon-
tract with Kelly and Reynolds as to inventions that he would make or im-
provements that he would get up In cash registers? A. Certainly. I aiready
explained to the Pattersons that so long as he was with Kelly and Reynold.s
they would get the full beneflt of his inventions, and I wanted them to buy
this machine in order to get the beneflts of very valuable improvements
118 129 FBDBBAIi BBPOBTBB.
which he already had In mînd. I wanted to get them ont of the way com-
pletely, as we had to get them out of the way before we coxild do anything
with the Pattersons. Q. Who do you mean by 'them,' vvhen you say you
wanted to get them eut of the way? A. Kelly and Reynolds, because Harry
was to them under contract, and could not leave until thèse machines were
sold, and the Kelly and Iteynolds business was cleaned up."
As a resuit of this interview, Mr. Frank J. Patterson went to
Chicago to see the model of the machine madç under thèse three
patents. Under date of March 8, 1893, he wrote to A. W. Cochran,
declining to buy, and saying that Neer's machine infringed tlie patents
of the Company, though he did not then point out wherein. Shortly
thereafter, and during the same month, the complainant company
invited a further conférence. For this purpose, Mr. Samuel Coch-
ran, the father of A. W. Cochran, and an uncle of Neer's, together
with Neer himself and O. W. Kelly, went to Dayton, and to the
shops of the complainant company, and there exhibited and operated
the Neer machine. This negotiation extended through parts of
three days. Mr. Cochran's principal purpose seems to hâve been
to secure for Neer an engagement as inventor, and he testifies that
he told Patterson that he was anxious to get Neer away from Kelly
and Reynolds, who were paying him only $10 per week. He had
drawn up a proposed contract between Neer and the complainant,
by which the complainant was to hâve the exclusive right to ail of
Neer's improvements and future inventions. This contract, he says,
was exhibited to and read by Patterson, and aiso certain contracts
between Neer, Kelly, and Reynolds in respect to the formation of a
company to make machines. The witness testifies that he told Pat-
terson that Reynolds and Kelly were to hâve ail the benefits of
Harry M. Neer's future inventions and improvements in the cash
register business, and "that the benefits that I had put in their con-
tract [referring to proposed contract for services of Neer] was the
same that was in the contract between Kelly, Reynolds, and Neer."
This contract was only proposed in the event the cash register com-
pany bought the Neer patents, for Patterson was told that any em-
ployment of Neer was dépendent upon the .sale of the patents owned
by the Neer Company. This witness also says that he told Mr.
Patterson that Neer had quite a number of improvements in cash
registers, "but that I did not want to let Kelly and Reynolds koow
of those improvements, because I" knew they would not raise his
.salary sufïïciently for him to spend his time and remain with them."
He also says that Neer showed Mr. Patterson certain "small dia-
grams, drawn on paper, of improvements, and a way by which he
could get around some of the difficult questions that was raised in
regard to opening the drawers and raising the tablets."
The sale of the patents and the employment of Neer were coupled
together by Mr. Cochran, who demanded for Neer $600 per month,
and a contract for five years. Representing, as he ostensibly did,
ail of the owners of the patents, he manifested a willingness to sacri-
fice the Neer Company, in the price of its patents, in order to secure
greater advantages for his nephew in the matter of wages, ând lie
confesses to using arguments of this character.
NATIONAL CASH REGISTEB OO. V. NEW COLUMBXTS WATOH 00. 119
Witliout going further into the détails of the conférence and nego-
tiations for the sale of the earlier Neer patents, it is enough to say
that, upon the great weight of the évidence, Patterson was during
those negotiations fully made aware of the relations between Neer
and Kelly and Reynolds, and of their interest in ail future improve-
ments Neer might make in cash registers, so long as that association
should continue. The negotiations came to nothing, Mr. Patterson
claiming that the Neer automatic drawer and indicator infringed two
patents owned by his company.
The évidence estabhshes that, after this failure to sell, Neer at
once went to work upon an improved cash register which should
obviate the infringements in respect to the drawer and indicating
tablets pointed out or claimed by Patterson, and soon produced a
model of the machine hère involved. This model was sent to Mr.
W. H. Chamberlain, a patent lawyer at Chicago, in July, 1893, for
the purpose of preparing spécifications and claims, and an applica-
tion for a patent was filed September 15, 1893. Ail of the expenses
incident to this new machine were borne by Kelly and Reynolds.
This application hung in the Patent Office, and in 1895 an inter-
férence was declared with a pending application owned by the com-
plainant in respect to certain claims common to both, in which the
complainant company won out. This interférence necessarily called
attention to this new invention. As before stated, this application
hung along until July, 1897, when, upon the suggestion of Mr.
Rector, the complainant's gênerai patent solicitor, who had repre-
sented complainant in the Erlach interférence mentioned above, Mr.
Patterson examined Neer's new application, and bought it for his
company, without making any inquiry as to whether Kelly and
Reynolds had any interest therein or not. The invention which was
involved in the Neer application did not in express terms assume
to be an improvement upon his earlier patents. In fact, however,
it was an improvement by which Neer had attempted to obviate the
infringement claimed by Patterson in respect to the automatic drawer
and tablet. The character of the improvement was in itself adapted
to recall the information he had received when Neer's earlier ma-
chine was ofïered to him. In addition to this, Mr. Rector, in his
letter suggesting the purchase of this application, called attention
to the Neer earlier patents, and suggested that, if "we take the Neer
application, we had better take the entire lot."
Mr. Patterson does say that he cannot recall his having read any
papers in connection with the effort made in 1893 to sell his com-
pany the three existing Neer patents. He does, however, admit a
recollection of so much which occurred in that negotiation that it is
difficult to believe that he had forgotten the relation of Neer to
Kelly and Reynolds. He admits that he recalls the fact that the
younger Cochran first came to open the way, that the elder Cochran
and Neer then came, and that finally he saw the elder Cochran and
Kelly and Neer on the third visit to his factory. Reynolds, it is
conceded, had no part in the negotiations which then occurred,
though Cochran says he explained to Mr. Patterson the reasons for
his absence. Asked by his counsel to explain what occurred on the
120 , 129 FEDERAL KJÎPORTER.
occasion of the vîsit of Neer, Kelly, and tlie elder Cochran at the
time the machine was exhibited, he says:
"Thèse gentlemen came to vlsit the factory iipon an invitation from me to
exhibit their machine, and, as I understood the situation, Mr. Cochran was
the promotor of the Neer Company. Mr. Neer, the inventer of the machine,
came to apparently offset any remarlïs virhich might be made, calculated to
keep Mr. Kelly from Investing any money In their company; and, as Mr.
Kelly was flnancially able to carry eut any commercial enterprise into which
he might engage, I endeavored to convince him that this machine t)f Neer's
could not be made cheap enough or simple enough to ever become a successful
cash register. I dld not pay any attention to Mr. Neer or to Mr.Cochran,
as I knew they would not pay any attention to anything I might say deroga-
tory to their enterprise or machine. From subséquent events, Mr. Kelly de-
elined to go into the enterprise at ail. The cash register company was appar-
ently abandoned- Mr. Cochran was very anxious to sell the Neer devlce and
secure for Neer a good position, but, not being successful, he returned to Chi-
cago, and I hâve heard nothing from hlm slnce. The détails of ail of thèse
conversations, it Is not necessary to relate, even If I could remember them.
Suffice it to say that thèse same kind of interviews are constantly held wlth
promoters and inventors of cash registering déviées, and for that reason, after
the interview was over, I do not often retaln more than a casual memory of
the circumstances."
While he does say that he has no recollection of ever examining
any contràcts, or of their contents, or of hearing the name of Reyn-
olds mentioned, he does not in terms deny that he was then in-
formed in respect of the engagement between Neer and his asso-
ciâtes, and of the interest of the latter in his subséquent improve-
ments. Neither is it claimed by counsel that he had forgotten what
occurred during the 1893 negotiations. Indeed, the very able and
frank soliciter for complainant resents the suggestion that he dé-
fends upon the ground that Mr. Patterson had forgotten in 1897 the
facts vk'hich he knew in 1893 in respect of Neer's relations to Kelly
and Reynolds. The contention, on the contrary, presented by the
briefs, is, first, that complainant had no definite information at any
time "that Kelly and Reynolds had or were to hâve any interest in
Neer's future inventions, and that, whatever the character of the
information possessed in 1893, the subséquent events known to it
were such as, in the absence of knowledge of facts now disclosed by
the record, but which were unknown to complainant, to create a
reasonable presumption, upon which complainant was justified iii
acting, that four years later, at the time it purchased, in 1897, Neer
was the sole and exclusive owner thereof."
We can see no ground for regarding the information possessed
by Mr. Patterson as either vague or indefinite in respect of the in-
terest of Kelly and Reynolds in any further improvements which
Neer should patent in respect to cash register machines. The prin-
cipal object of the negotiations, so far as they were conducted by
the two Cochrans, was to secure for Neer with the cash register
company a better contract than he then had with Kelly and Reyn-
olds; and, if those witnesses are to be believed, they informed Pat-
terson fully as to the interest of Kelly and Reynolds in his future
inventions so long as his existing relations should last. Now, what
were the "subséquent events" known to Patterson, when he bought,
which are rehed upon to create a presumption upon which he was
NATIONAL CASH EEGISTER OO. V. NEW COLtTMBUS WATCH OO. 121
justified in assuming that the application was the "sole and exclu-
sive property of Neer"? They are substantially as foUows: (i)
That tliis application had been on file four years without any as-
signment to Kelly and Reynolds being filed in the office, whereas
such an assignment of his earlier patents had been filed either with
the application or shortly thereafter; (2) that the contract between
ISieer and associâtes was terminable at will or upon 10 days' notice,
and the interest of Kelly and Reynolds was only in such improve-
ments as should be made while those relations lasted; (3) that in
fact this partnership was terminated soon after the Dayton nego-
tiations, and that Neer engaged in a différent line of inventions ; (4)
that in April, 1894, a patent issued to Neer and Cochran upon an
application filed in April, 1893; (5) that Neer represented that he
had made no assignment, and so covenanted in his assignment to
Chamberlain.
It is to be borne in mind, in giving due weight to the circuni-
stances mentioned, that Patterson is chargeable with the knowledge
that the application he was buying had been filed within about six
months of the close of his negotiations for the purchase of the earlier
Neer machine. The question he had to ask himself in 1897 was not
whether the arrangement between Neer and his associâtes had con-
tinued up to that time, but whether it had not continued up to the
time of an application for an improvement made, which had been
filed within six months of the close of his former negotiations. Now,
he did not know, and could not know, for the fact was otherwise,
that Neer had ceased to work with and for Kelly and Reynolds whcn
this application was filed. Neer finished the model for his improved
machine in July, 1893, with their means, and placed it in the hands
of an attorney to obtain a patent; the application being filed Sep-
tember 15, 1893. Some time about the time of this application, Neer
and associâtes did dissolve, and he took work with the father of O.
W. Kelly, and took up a new line of inventions. But the actual fact
that the relations of thèse three men had terminated even in 1897
was not even then known to Patterson. Ail that he knew 'about the
abandonment of the cash register business consists in the fact that
he had heard nothing more about it, and had been told by a Mr.
Mast, some two or three years after the negotiations of 1893, "that
he [Mast] was of opinion that Mr. Kelly saw no outcome in the
cash register, and had decided not to go into the field." This, of
course, referred to the scheme of getting up a factory to make the
Neer machines, which was a part of the purpose of the Neer Com-
pany made known to Patterson in 1893. But counsel frankly do
not claim that he knew in 1897 that the Neer Company had broken
up, and modestly only insist that Patterson had a right "to assume
that it had been abandoned" — a correct assumption if the question
was as to its continuance up to 1897, but an incorrect one if it be
an assumption that the relation did not exist when the invention in
question was made. The assumption that Patterson knew that in
1894 a patent had issued to Neer and Cochran upon an application
made within a month after the close of the 1893 negotiations is un-
authorized. The fact is true. But it does not appear that Patterson
122 129 FEDERAL REPOKTEB.
knew ît when he bought the later application. It was in fact a pat-
ent in wliich Kelly and Reynolds were interested, but it was taken
out to Cochran and Neer because Cochran was domînating Neer,
and wished it done to secure him in some advance he had made
about it. As he was the agent for ail the parties, he held it in trust,
and so reCOgnized himself as a trustée. That patent was not in the
line of the title of any of the complainants' patents, and hence there
is no constructive notice about its issuance. If Patterson did not
himself know that such a patent had issued to Neer and Cochran,
it could not mislead him, and could hâve eut no figure whatever in
leading him to présume the relation of the parties ended when the
application in question was filed in September of 1893. That he
knew the contract between Neer and Kelly and Reynolds was to
endure only so long as the parties wished, must be conceded. But
why he should assume that an application for a patent, made so soon
after he had declined to buy the first Neer machine, and which was
to him manifestly intended to escape the charge of infringement
which he had brought against the first Neer machine, should be
the sole property of Neer, is not explained. Reasonably the pre-
sumption, under the facts known to him, was that such an improve-
ment would be for the benefit of the partnership; and, in the ab-
sence of very clear évidence otherwise, he should bave so assumed.
The représentation by Neer that he had made no assignment, and
bis covenant to that efïect, is of no importance whatever. He did
not even represent that no one had any équitable interest in his in-
vention, and said nothing and was asked nothing about the disso-
lution of his partnership with Kelly and Reynolds. In view of the
facts known to Patterson, the natural inquiry would hâve been, not,
"Hâve you made any assignment?" but, "Are you equitably under
any obligation to do so by reason of your contract with them? When
did your agreement to give them an interest in your inventions con\e
to an end?" But if he had caused thèse questions to be put to
him, he would hâve acted with great négligence if he had failed to
inquire of' Kelly and Reynolds as to their claim of interest in this
particular invention. The assumption that they had no interest in
this invention, in view of the facts with which Patterson is charge-
able with knowing, rests at last upon the fact that this application
had been pending four years, and that no assignment had been re-
corded of which he was obliged to take constructive notice. In
actual fact, an assignment, under date of July 22, 1893, had been
spread upon the registry of the Patent Office, by which he had as-
signed to Reynolds a one-third interest in ail of his improvements
and inventions in cash registers which he had been working on, and
for which he contemplated filing applications. This assignment did
not operate as a constructive notice, because it was not such a grant
or conveyance as was entitled to registration. Lynch v. Murphy,
161 U. S. 247, 16 Sup. Ct. 523, 40 L. Ed. 688; Carpenter v. Dexte'r,
8 Wall. 513, 532, 19 h. Ed. 426; Prentice v. Duluth Storage Co.,
58 Fed. 437, 7 C. C. A. 293, 302; Robinson on Patents, § 785;
Wright V. Randel (C. C.) 8 Fed. 591. Neither did it request the
commissioner to issue any particular patent to an assignée, and the
NATIONAL CASH REGISTEB CO. V. NEW COLtTMBTJS WATOH 00. 123
commissioner therefore properly ignored it when he came to issue
this patent. Rev. St. § 4895; Robinson on Patents, §§ 411, 769,
785; Wright V. Randel (C. C.) 8 Fed. 591. Neither is it shown
that Patterson or any of the agents or attorneys of the complainant
corporation had any actual knowledge of this document. But on
the other hand, it is not shown that any search of the record was
ever made to see if any assignment had been recorded. Such an
actual search would undoubtedly hâve disclosed this assignment.
There was therefore no actual misleading by the failure of the record
to disclose any assignment, for the proper place for such an as-
signment would hâve been upon the registry, and not in the file.
Rev. St. U. S. § 4895.
The court below, after an exhaustive examination of ail the facts
and circumstances of the case, reached the conclusion that the facts
known to the complainant company at the time of its purchase were
such as to put it upon inquiry. The facts which the complainant
must be taken to hâve known pointed plainly to the probable exist-
ence of a right or title in conflict with that which they were about
to buy. It became complainant's duty, therefore, to make inquiry
as to the existence and extent of this probable outstanding équitable,
but prior, right ; and an inquiry of Neer only was not a reasonable
compliance with this duty. The failure to make reasonable inquiry
under such circumstances convicts complainant of a degree of nég-
ligence inconsistent with the claim to be a bona fide purchaser with ■
out notice. The knowledge which its représentative in this trans-
action had did not consist of vague rumors as to the possible rights
of another. It was knowledge that tended strongly to show that
Kelly and Reynolds were interested in the invention he was about
to buy, and was not materially weakened by any subséquent facts
known to him at the time he was called upon to act. It may be
that Mr. Patterson did not hâve at the time any purpose to de-
liberately shut his eyes to the facts which inquiry might disclose,
for that would amount to mala fides or fraud, and we do not attribute
any evil purpose to him. The price he was asked to pay was a
small one for a great concern, such as that he represented. When
asked about the extent of his examination of the application before
buying, he said :
"I may or may not hâve examined the file wrapper, and cannot state posi-
tively upon this point. If the case was an important one, I should probably
hâve an opinion submitted, or read it over luyself. In this case I am under
the impression that, the amount involved being so small, that I told Mr. Ma-
caulcy lie might buy the patent if the amount did not exceed $200. That is
about ail I remember about it."
Under such circumstances, he may well say, as he does, that he
at the time had no knowledge that any one beside Mr. Neer owned
or claimed any interest in the invention. But he did hâve informa-
tion which made it his duty to inquire whether others did not havc
an interest in this inchoate property, and this he doubtless would
hâve donc but for the comparative insignificance of the matter, which
induced a very négligent method of action, which justly deprives his
corporation of its claim to be a bona fide purchaser without notice.
Evidi^nce of a fraudulent purpose or conduct amounting to moral
124 129 FEDERAL REPORTER.
turpitude îs not necessary to deprive a purchaser of a légal title of
(he advantàges of his position.
The English cases for a time seemed to tend tovvard a rule re-
quiring évidence indicating a deliberate shutting of the eyes to avoid
light, and amounting to what some of the judges styled fraud. 2
Pom. Eq. § 606, and notes, and cases there cited. But the latest
announcement seems to repudiate this extrême view. Oliver v. Hin-
ton, 2 L. R. Ch. D. 1889, 264. The test of the American courts has
not been so extrême. The inquiry has generally been vi'hether the
facts known were such as to put a reasonably prudent man upon his
guard, and whether an inquiry has been prosecuted, with reasonable
diligence. 2 Pom. Eq. § 606, and notes. The latest announcement
of the Suprême Court of the United States is that found in Stanley
v. Schwalby, 162 U. S. 255, 276, 16 Sup. Ct. 754, 763, 40 L,. Ed. 960,
where Justice Gray said :
"But In order to charge a purchaser with notice of a prlor unreeorded con-
veyance, he or his agent must eitlier hâve linowledge of the eonveyance, or at
least of such circuœstances as would, by the exercise of ordinary diligence
and judgment, lead to that knowledge; and vague rumor or suspicion Is not
a sufficlent foundatlon upon which to charge a purchaser with knowledge of
a title in a thlrd person."
The decree of the court below must be affirmed.
NATIONAL METBR CO. v. NEPTUNE METER CO. et al.
(Circuit Court of Appeals, Third Circuit February 22, 1904.)
No. 14
1. Patents— Noveltt—Water Metees.
The Nash patents, No. 527,534 and No. 527.537, for Improvements In
disk water meters, are vold for lack of novelty, and also because the
claims of the former are so broad as to cover praetlcally everything In
the prior art.
Appeal from the Circuit Court of the United States for the District
of New Jersey.
For opinion below, see 122 Fed. 82.
J. Edgar Bull and Edmund Wetmore, for appellant.
Alfred W. Kiddle and William A. Redding, for appellees.
Before ACHESON, DALLAS, and GRAY, Circuit Judges.
ACHESON, Circuit Judge. This bill was brought to restraîn in-
fringement of two letters patent, No. 527,534 and No. 527,537, for im-
provements in disk water meters, granted on October 16, 1894, to the
National Meter Company (complainant-appellant), as assignée of Lew-
is Hallock Nash. At the date of the making of the improvements in
question, water meters of the disk type were old and in successfui use.
The structure described and shown in and by each of thèse patents, in
shape, size, constituent parts, arrangement, and mode of opération,
was old. The form and function of each of the constituent parts of
the described structure are identical with those which had long been
in common use prior to the all'eged inventions. Moreover, ail the ma-
NATIONAL METEK CO. V. NEPTUNE METEK CO. 125
terials specifically mentioned in thèse patents had previously been em-
ployed in various combinations in the manufacture of water meters.
The learned judge below, in the course of his opinion, after particular
référence to certain prior patents, justifiably said :
"It will thus be seen that metals and nonmetallic substances of the eharae-
ter speclfled, for one or the other of the différent parts of a nutating meter,
hâve been freely suggested and employed by other prior inventors, until there
is hardly a combination of them which could be devised that would be in any
respect new."
Patent No. 527,534 is much the broader of the two patents in suit,
patent No. 527,537 being merely for one species or a particular form
of the alleged invention of the other patent. The following explana-
tory paragraph of the spécification of No. 527,534 sets forth alleged
advantages possessed by the described structure :
"The disks of nutating pistons heretofore made hâve been comparatively
fragile and Ilable to break. By making the disk of métal I altogether avoid
diffieulty. However, if both piston and case were made entirely of métal, the
friction and wear oecurrlng would make the structure of little or no value
as a practical water meter. As the principal friction surfaces are at the bail
of the piston and its seat In the case, by making thèse parts of différent ma-
terials — for instance, one of métal and the other of nonmetallic material — the
friction and wear become very slight. ïhus the maximum strength and the
minimtim friction and wear are obtained, and a durable and efficient meter
is made. Such a piston can be used in any suitable case. If the piston, as
I prefer to make it, hâve a disk of métal and a bail of nonmetallic material,
it may be used in a case composed of auy material or materials, for but little
friction and wear will be developed in the hall bearing, even if the seat in
the case be of the same or similar nonmetallic material^-as, for example, if
both be made of hard rubber. When the walls of the case as well as the disk
of the piston are made of métal, while the seat and bail are either both of
nonmetallic material, or one is of nonmetallic material and the other is of
métal, the wear on the opposing metallic surfaces, particularly between the
spherical walls of the case and the rim of the piston, will, other things being
equal, be faster than at the other parts, and hence the weight of the pistou
will always be supported on the bail bearing, where friction is least, and fric-
tion contact between the edge of the piston and the spherical walls of the case
avoided."
The spécification contains the further statement:
"In the claims I employ the words 'coefficient of abrasion' to Indicate the
rapidity with which wear will take place between opposing surfaces."
The widest claims of this patent and the ones particularly relied on
by the complainant are the first and second claims, and those only we
deem it necessary to quote. They are as follows :
"(1) In a water meter, a nutating piston, composed of bail and disk, com-
bined with a case provided with seats for the piston bail, the disk of the pis-
ton and the spherical walls of the case being composed of substances having
a larger coefficient of abrasion than the substances composing the bail of the
piston and its seats in the case.
"(2) In a water meter, the disk of a nutating piston and the opposing case
walls, made of similar materials, comblned with the bail of sald piston and
the bail bearings in the case, made of dissimllar materials."
The spécification of patent No. 527,537 repeats the statement that :
"As the principal friction surfaces are at the bail of the piston and its seat
la the case, by making the bail of métal and its seat in the case of a nonme-
tallic material the friction and wear become very slight"
126 129 FEDERAL EBPORTEB.
The single daim of this patent reads thus :
"In a water meter, the combination of a piston composed of a bail and disk,
both made of métal, with a case made of métal and a seat for the bail made
of nonmetallic materlal."
The charge of infringement made against the défendants below (the
appellees) is based upon their manufacture and sale of two shghtly
différent types of disk water meters, the structures of both of which,
in form, constituent parts, and method of action, are conformable to
this art as practiced before the aheged inventions of the patents in
suit. One of the meters complained of is constructed with an all-metal
case having all-metal' seats for the bail of the piston, and a métal disk
having a rubber bail for its journal. The other meter complained of
is made under the Thomson patent, No. 568,642, of September 29,
1896, and has for the lower bearing of the metâl bail of the piston a
skeleton of métal provided with concentric blocks of graphite mounted
in recesses in the métal socket. The alleged infringement lies in the
combined use of the materials mentioned. Do thèse constructions, or
either of them, violate any excltisive rights vested in the complainant
by virtue of the patents in suit? The conclusion of the Circuit Court
was adverse to the complainant's pretensions, and we think rightly so.
According to the explicit statement of both the patents in suit, the
principal place of friction is at the bail of the piston and its seat in
the case. Upon this assumption the patents rest. It is the basis of
the alleged invention. The problem was to secure the minimum of
friction and wear betvveen the bail of the piston and its seat. That
being obtained, the invention is realized. The spécification of No.
527,534 States that by making the bail of the piston and its seat in
the case "'of différent materials — for instance, one of métal and the
other of nonmetallic material — the friction and wear become very
fchght" ; and "thus the maximum strength and the minimum friction
and wear are obtained, and a durable and efficient meter is made."
What the patents unmistakably prescribe is an antifriction bearing for
the bail. But that was an old and common expédient in water-meter
construction. This is abundantly shown by the évidence. The spéci-
fications hère do not disclose any new means for reducing friction be-
tween the bail of the piston and its seat in the case. It was a well-
knovvn fact that friction and wear between a journal and its bearing
can be feduced by making thèse parts of dissimilar materials. This
principle was of common application in machine construction before
the date of the alleged inventions. The nonmetallic materials spe-
cifically mentioned in the complainant's patents are lignum vitse, hard
rubber, and vulcanized fiber. Now, the use of lignum vitje for pre-
cisely the same purpose is described in Nash's patent. No. 379,805, of
1888; and the use of hard rubber for a piston bail working in a me-
tallic seat is described in thé same patent, and also in the Davies
patent. No. 384,024, of 1888, and the British patent to Davies, No.
I3>S7I> of 1886. The prior Nash patent above mentioned discloses
a water meter almost identical with the structure of the patents in suit
composed of an ah-metal case with an all-metal piston, or of a hard
riibber case with a hard rubber piston; the bail of the piston, whether
of métal or hard rubber, having for its lower bearing or seat a plug o£
NATIONAL METEB CO. 7. NEFTDKB METEB 00. 127l
lignum vitae. Upbn a fair review of earlier patents, the judge below
made the clearly warrantable déduction that the very combination of
materials suggested in the complainant's patent is to be found in the
prior art, not as a matter of accident or undesigned, but definitely and
distinctly indicated and provided for.
The brief of the appellant puts forward the proposition that "the
gist of the patents in suit résides in the discovery that the piston can
be made to maintain automatically the necessary clearance at its rim
by putting there materials which wear away or abrade faster than
the materials forming the bail and its socket," and it is said that the
invention consists in the "paradoxical expédient" of increasing friction
and abrasion between the edge of the piston and the chamber walls.
It is difficult, if not impossible, by searching, to find out anything in
the spécifications tending to support thïs ingénions theory. As we
hâve already seen, the inventor states that the principal friction sur-
faces are at the bail of the piston and its seat in the case, and that, by
making thèse parts of différent materials, the friction and wear be-
come very slight. "Thus," the spécification goes on to say, "the
maximum strength and the minimum friction and wear are obtained
and a durable and eiïicient meter is made," and it is added that "such
a piston can be used in any suitable case." It is true that further on
in the spécification occurs the rather obscure statement that:
"Wlien the walls of the case, as well as the disk of the piston, are made
of métal, whlle the seat and bail are either both of nonmetallic material, or
one is of nonmetallic material and the other is of métal, the wear on the op-
posing metallic surfaces, particularly between the spherlcal walls of the case
and the rim of the piston will, other things being equal, be faster than at the
other parts, and hence the weight of the piston will always be supported on
the bail bearing, where friction is least, and friction contact between the edge
of the piston and the spherical walls of the case be avoided."
If, however, friction contact between the edge or rim of the disk
of the piston and the walls of the case be avoided, there can be no
automatic clearance by abrasion. There may be friction without abra-
sion, but there cannot be abrasion without physical contact. This is
a self-evident proposition. Even the appel'lant's expert assents to this.
But furthermore we are convinced by the proofs that the theory of
automatic maintenance of adéquate clearance between the rim of the
disk of the piston and the walls of the case by abrasion is incapable
of practical realization. We think that the patents themselves are
opposed to such theory. As we read the spécifications, the main thing
to be donc is to minimize the friction and wear between the bail of
the piston and its seat, to the end that the piston shall "always be sup-
ported on the bail bearing," and "friction contact between the edge of
the piston and the spherical walls of the case be avoided." Aside,
however, from the patents, the clear weight of évidence is against the
realization, in practice, of the appellant's theory of opération. Mr.
Thomson, an engineer and a manufacturer of water meters, out of
his large expérience testifies thus :
"I do not belleve, nor hâve I ever seen In practice, nor hâve I ever seen a
practical démonstration in which, once the periphery of the disk is brought
into contact wlth the spherical wall of the casing, it will then automatically
128 129 FEDERAL REPORTER.
produce 'an adéquate clearance.' * *■ * No such resuit would he obtaln-
able in practlce."
It îs very significant that the complainant deliberately abandoned the
construction shown and described in its patent No. 527,537, In its
catalogue of 1900 it is said :
"A third plan Is to use an all-metal disk, whlch is a comblnation long ago
abandoned as being thorougbly unsatisfactory, both as to durabllity and close
registration."
Moreover, it appears that the complainant had adopted and exclu-
sively employs in its manufacture of disk water meters a construction
in which the meter has an all-metal case, with all-metal sockets, and
a piston composed of a hard rubber bail and disk, the disk being re-
enforced with métal embedded in and completely covered by the rub-
ber, and shaped at its periphery into the form of a knife-edge com-
posed wholly of rubber. Obviously, this construction is designed to
diminish friction and wear betwéen the rim of the piston and the
chamber waîl, not to increase friction and abrasion at that place. It
wiil be noted that, in this construction, reliance is put upon the me-
chanical conformation of the periphery of the disk. This construc-
tion of disk water meters is made under a later patent, No. 527,539,
granted to the complainant as assignée of Nash.
The claims of the patents in suit hâve an extraordinary sweep. They
take in the whole range of substances or materials fit for water-meter
construction whether heretofore used or not. They also embrace an
uniimited number of combinations. The compl'ainant's expert ex-
pressed the opinion that, "where the construction is such that the wear
between the bail and its seat is less or more retarded than between
the periphery of the disk and the inside wall casing, the alleged inven-
tion would be realized." He also expressed the opinion that a water
meter of the knife-edge form of disk, made under patent No. 527,539,
falls within the claims of the principal patent in suit, No. 527,534.
If thèse views, which the appellant urges, be sound, and the défend-
ants' water meters also are covered by those claims, it is safe to say
that no practicabl'e disk water meter can be made which could escape
this monopoly, for an antifriction bearing at the bail of the piston
is necessary to successful working- — a fact which has always been recog-
nized in this art.
We are of opinion that the learned judge below was entirely right
in dismissing the complainant's bill, and the decree of the circuit court
is affàrmed.
McCARTHT v. WESTFIELD PLATE CO.
(Circuit Court of Appeals, Second Circuit. February 25, 1904.)
No. 127.
Patents—Infringement— Casket Handles.
The McCarthy patent, No. 478,168, for Improvements In casket handles,
claim 1, construed, and held not infrlnged by the device of the Klein
patent, No. 559,898, in which the improvement, whlle having the sanie
gênerai purpose of strengthening the handle, does so by means which op-
erate on a différent principle.
m'cabtht V. westfield plate co. 129
Appeal from the Circuit Court of the United States for the District
of Connecticut.
For opinion below, see 124 Fed. 897.
Howard P. Denison, for appellant.
Harold Binney, for appellee.
Before WALLACE, LACOMBE, and TOWNSEND, Circuit
Judges.
WALLACE, Circuit Judge. We agrée with the conclusions of
the court below that the "defendant's coffin handles, made conformably
with letters patent No. 559,898 (granted to Klein, assignor, May 12,
1896), do not infringe the complainant's patent; and this being so, it
will not serve any usefui purpose to consider whether the claim in
controversy is void for want of patentable novelty, or void because
the alleged invention had in ail essentials been previously patented by
the complainant.
The patent in suit is for an improvement in folding-down handles,
more particularly burial casket handles, which consists in providing an
auxiliary support to the handie by means of a relief-bar connected
with the handle-bar. In a prior patent to the complainant (No. 469,-
975' granted March i, 1892) a cognate improvement was described and
claimed, the gênerai nature of which was stated to consist "in provid-
ing the handie with an auxiliary support or brace which will remove a
part of the strain from the hinge-pins by which the handie arms are
connected to the body-plates, and which, in case said pins break, will
constitute the main support of the casket." The présent patent covers
a modification of the auxiliary support of the prior patent, and, with-
out any other référence to the prior art, that patent itself imposes a
limitation upon the construction of the présent patent which restricts
the application of the doctrine of équivalents.
In the folding-down handie in common use previous to either of the
McCarthy patents the handie was carried by an arm attached to the
body-plate of the casket by a hinge-pin pivoted in the ears of the
body-plate. Thèse ears projected from the sides of a recess in the
body-plate formed to receive and afïord a bearing to the end of the
arm. The end of the arm was provided with a shoulder extending
rearwardly beyond the hinge-pin, which when the arm was raised en-
gaged with the top of a wall at the rear of the recess so as to limit the
ttpward movement of the handie. The spécification of the patent in
suit describes the old folding-down handie with an additional recess
in the body-plate consisting of an elongated slot through its outer face.
It also describes a supplemental arm, called a relief-bar, which is se-
cured rigidly or pivotally to the main arm near the handie, and extends
beneath the main arm to and through the slot in the body-plate, where
it engages with the inner face of the body-plate. To effect this en-
gagement, it is provided with a head larger than the width of the slot.
This bar is arranged and constructed so as to move with the main
arm, but to hâve independent bearing connections with the body-plate.
In opération when the handie is moved downwardly the bar will slide
iinder the body-plate, and when the handie is raised the bar is drawn
129 F.— 9
130 129 FEDERAL REPORTER.
out through the slot until its head engages with the inner face of the
body-plate. By this engagement the bar relieves the strain on the
hinge-pin, and if the hinge-pin breaks receives the whole strain and
supports the casket. Thus the folding-down handle of the patent is
the old device with an additional handle-arm movably attached to the
body-plate by a slot and head engagement ; the main arm and its hinge
attachment to the body-plate are the main arm and attachment of the
old device, and do their work precisely as they did in j;he old device ;
and the bar or new arm, and its attachment, do their work precisely
as they would if the bar was rigidly or pivotally fastened to the hândle
instead of the main arm and there were no main arm.
The claim is as follows :
"The eombination, with the handle, the arm carrying it, and the body-plate
to which sald arm is hinged, of a relief-bar eonnected to saîd arm and passlng
through a slot In said plate, and provided on its inner end with a head."
The only novelty in tlie eombination of the claim résides in the pe-
culiar organization of the relief-bar and the body-plate, and except in
this respect it is the same eombination described in the earlier patent
to complainant. In the earlier McCarthy patent one form of the aux-
iHary support consists »of an additional arm at one end pivotally eon-
nected with the handle-arm and at the other end provided with a
T-shaped head which slides in a T-shaped groove in the body-plate.
In this construction the supplemental arm moves with the main arm,
and when the handle is raised to the extent permitted by the hinge
connection of the main arm it engages in the end of the groove, and
thus relieves the strain on the hinge-pin, and receives the whole strain
in case the hinge-pin breaks.
The defendant's handle contains the parts employed in the old fold-
ing-down handle, and as therein combined, together with parts which
re-enforce and strengthen the handle-arm and its bearings at the hinge-
joint; but it does not contain the relief-bar of the claim, nor the slotted
body-plate of the claim. Its handle-arm is strengthened throughout
its entire length by a pièce of sheet steel incorporated within the arm
which at the body-plate end has a projection which extends beyond the
pivot and rests upon one of the walls in the recess when the handle is
raised. In ail the parts except those that were employed in the old
folding-down handle the defendant's handle difïers so greatly in dé-
tails of construction from the complainant's handle that it is difficult
to compare them; but the most accentuated différences are those of
principle. It contains no parts which relieve the strain upon the hinge-
pin when the handle is raised, or which provide a support for the casket
in the event of the breaking of the hinge-pin. Both McCarthy and
Klein by their several endeavors hâve sought to improve upon the old
folding-down handle, McCarthy endeavoring to do so by what is prop-
erly a secondary arm with independent body-plate connections, and
Klein by strengthening the old arm and its hinge connections. As was
said in the opinion of the court below by Judge Platt:
"The former départs in one direction, and the latter in another. The pat-
ent in suit is the outcome of a struggle to relieve the hinge-pin. The Klein
patent is the outcome of a struggle to so strengthen the handle as to overcome
the natural strain at the vital point."
The decree is affirmed, with costs.
QEOEGIA FINE TOKPENTINE 00. V. BILFINGEE. 181
GEORGIA FINE TURPBNTINE CO. V. BILFINGEE et aL
(Circuit Court, W. D. North Carolina. March 14, 1904)
1. PatiîI^ts— Suit foe Infkingement— Right op Complainant to Dismiss.
Complainant, in a suit for infrlngement of a patent, who obtained a pre-
llminary injunction, will not be permltted to dismiss without préjudice
after ail the proof s hâve been taken, which show that the charge of Infrlnge-
ment was wholly unfounded. In such case the défendant is entitled to
a decree adjudicating the questions at Issue on the merits.
2. SAME— INFBINGEMENT — APPAEATUS AND PKOCESS FOE WOOD DiSTILI-ATION.
The Bilflnger patents. No. 658,888, for a wood-distilling apparatus, and
No. 674,491, for a process of distilling wood for the manufacture of char-
coal and the savlng of by-products, to be carried on by the use of such
apparatus, construed, and field not infrlnged.
In Equity. Suit for infringement of letters patent No. 658,888 for
a wood-distilling apparatus, and No. 674,491 for a process of distilling
wood for making charcoal and saving the by-products, granted to Cari
W. Bilfinger on a division of the same application. On final hearing.
Dickerson, Brown, Reagener & Binney and R. D. Douglas, for com-
plainant.
Schreiter & Mathews, W. P. Bynum, Jr., W. C. Douglass, and Henry
Schreiter, for défendants.
BOYD, District Judge. This is a suit in equity, by the Georgia
Pine Turpentine Company v. the Naval Stores Supply Co. and Cari
W. Bilfinger, for infringement of letters patent No. 658,888 and No.
674,491, granted to the défendant Bilfinger for an improved apparatus
and process for manufacture of charcoal and saving of by-products,
which said letters patent, the same having been granted in the years
1900 and 1902, were thereafter, with ail rights and privilèges there-
under, as alleged in the bill, duly sold, assigned, and transferred to the
complainant, who, at the commencement of this suit, was the sole owner
thereof. The further allégation in the bill is that, after complainant
became the owner of said patents, the défendant Bilfinger organized
the Naval Stores Supply Company, and in conjunction with the said
Company, and in violation of plaintifï's rights, was unlawfully using
the same. Each of the défendants filed a separate answer, denying an
infringement of the patent owned by plaintiflf, and averring the right
to hâve and use the apparatus and process connected with their business.
The pleadings hâve been completed, both parties hâve taken proofs,
and the case has been set down for final hearing upon the pleadings
and the proofs. ,
At the final hearing complainant moved to hâve its bill dismissed,
without préjudice, upon payment of défendants' costs. This motion
must be denied. It is well settled by authorities that complainant can-
not dismiss his bill at will after ail proofs are taken and the case is set
for final hearing. Such motion is addressed to the sound discrétion
of the court, but will not be granted in a case where "such proceedings
hâve been taken as entitle the défendant to a decree." Chicago, etc.,
ï 1. See Patents, vol. 38, Cent. Dig. § 551.
132 129 FEDERAL EEPORTER.
R. Co. V. Rolling Mill Co., 109 U. S. 702, 3 Sup. Ct. 594, 27 L. Ed.
1081. In other cases it is held that such motion will not be granted
where the adverse party would be prejudiced or put to a disadvantage.
Johnson v. Bailey (C. C.) 59 Fed. 670, Callahan v. Hicks (C. C.) 90
Fed. 539, and the cases cited there. In this case no reason ï% stated
why complainant desires to dismiss its bill, except as it appears from
the proceedings that complainant reahzes the complète failure to make
ont a case against the défendants, though its proofs cover every fea-
ture of défendants' apparatus and the process carried on therein, show-
ing that complainant's counsel and expert witness hâve diligently and
skillfully exploited every path to that end. On the other side, défend-
ants establish by their proofs, aflfirmatively, that the apparatus they
use and the process they carry on in their plants at Biscoe and Aber-
deen are fundamentally différent from those set forth in the patents
in suit. Would it, then, be just and équitable hère to grant com-
plainant's motion now, after défendants hâve been subjected to the
trouble and expense of defending the suit and bearing the detrimental
conséquences of the litigation until it could be submitted for final dé-
cision? Would it be just and équitable to nullify their efforts and ex-
pense incurred in producing the proofs showing that the charge of in-
fringement made against them was and is wholly unfounded ?
Défendants are charged in the bill with infringement of letters pat-
ent ; they were served with the process of the court, required to appear,
answer, and to produce proofs in support of their answer. Whether
complainant commenced this action on misinformation or from error
of judgment, or for other reasons, the institution of the suit, the charge
of infringement, the publicity given by the complainant to the pendency
of the same, to the injunctive orders of the court, and to the proceed-
ings in this case throughout the entire territory where défendants'
business extends, must hâve had a detrimental effect on défendants'
business. This effect is of such nature as would not be removed if
the bill of complainant herein be merely voluntarily dismissed by
an order on such motion as complainant now proposes. Such damage
to défendants' réputation and business standing can only be removed
by a judgment of the court deciding the controversy on the merits.
The bill of complainant should not be dismissed, as complainant
now proposes, also because of the pendency of similar suits in other
districts, involving the same apparatus, the same process, as in the
case at bar, and based on thèse same patents. The pendency of at
least one other suit of this kind (in the Western District of Georgia)
is shown by the proofs in the case at bar, the fact having been
brought out by the cross-examination of défendants' witness Bilfinger
by complainant's counsel. This other suit was commenced after de-
fendants answered hère, and no proofs bave yet been taken. If this
suit hère should now be merely dismissed by an order on request of
complainant, the same issue will be required to be litigated in the other
case. This procédure may be repeated by complainant as often as it
may succeed in inducing the courts to dismiss its bills before judg-
ment, and withbut préjudice after the proofs are taken and the case
set down for final hearing. Such proceeding would certainly be vexa-
tious to the utmost, and work irréparable in jury to défendants' inter-
GEORGIA PINE TTJBPENTINE CO. V. BILFINGEB. 133
ests. For thèse reasons, complainant's motion is denied, and the case
will be considered and decided by the court on the proofs, and a judg-
uient entered therein.
The first of the two letters patent, No. 658,888, is for improvements
in wood distilHng apparatus; and the second. No. 674,491, is for a
process of distilling wood for the manufacture of charcoal, and sav-
iîig of by-products, to be carried on in the apparatus set forth in the
fust patent. The second letters patent were granted on a subdivi-
hional appHcation of the first. Originally only one patent was apphed
for — for the apparatus and the process ; thereafter, the subject-matter
of the process was embodied in a subdivisional application, under
which the second patent (No. 674,491) issued. In the spécification of
the process patent, the inventer says (page i, line 34) as follows:
"The objects of my improved process are, first, to décompose wood into (1)
sollds, (2) volatile and (3) nonvolatile liquids, and (4) gases ; second, to sepa-
rate thèse ingrédients from each other ; and, third, to prevent décomposition
of any of the ingrédients in the process of decomposing the raw material."
The several products shall also be recovered separated from each
other; the solid ingrédient as charcoal; the volatile and nonvolatile
liquids as wood turpentine, oils, and tar; the gas as illuminating gas.
Thus we may say that in thèse particular respects the process of the
patent difïers from other processes for distilling wood, and the appa-
ratus for carrying on this process is particularly designed for it.
This is the apparatus of the Bilfinger patent No. 658,888, and it is
with respect to this apparatus that the inventor says, at the outset of
the spécification of his process patent:
"The apparatus necessary for the carrying on of the process Is more fully
deseribed in my United States letters patent No. 658,888, granted October 2,
1900," etc.
This statement bas an important bearing on thç issue of infringe-
ment involved in the case at bar. It shows that the inventor realized
that the process cannot be carried on in any other apparatus except
the particular apparatus that he specifically sets forth in the other
patent as an intégral part of his invention. Défendants' exhibit "Bil-
finger Plans of Défendants' Plants at Biscoe and Aberdeen," and as
explained in the testimony of the défendant Bilfinger, shows clearly,
on comparison with the drawings and descriptions of the Bilfinger
patent No. 658,888, that the apparatus employed in défendants' plants
at Biscoe and Aberdeen do not contain a solitary feature of that which
is set forth in the patent as the improvement or invention designed
for the purpose of carrying on the process, the subject-matter of the
other Bilfinger patent, No. 674,491. The évidence shows that without
thèse spécifie means — the sectional flues, dampers, outlets, and valves
— the process cannot be carried on, or such results obtained as set
forth in the patent. Défendants' plants comprise apparatus distinct
from the ordinary wood-distilling plants in several respects, but every
one of the spécifie features is also wholly différent from what is dis-
closed in the Bilfinger patent No. 658,888, and thèse improvements,
embodied in défendants' plants, are the subject-matter of another
patent (défendants' exhibit, "Bilfinger & Hallock 1903 Patent"). They
131 129 FEDERAL RBFOBTEB.
serve for the carrying on of a process wholly différent from tKe pro-
cess specified in the Bilfinger patent No. 674,491, and producing wholly
différent results. The fact that the improvements embodied in the
apparatus of défendants' plants at Biscoe and Aberdeen are covered
by a subséquent patent is prima facie proof that défendants' plants
are patentably différent from the apparatus set forth in the patent
in suit. That they are différent also in every material or substantial
respect was proved by the testimony for the défendants, and by the
letters patent introduced in évidence at the close of défendants' proofs.
Neither the proofs that the improvements embodied in the apparatus
of défendants' plants at Biscoe and Aberdeen are the subject-matter
of this patent, nor the proof made by the testimony of défendant Bil-
finger that thèse apparatuses are differently constructed for a différent
process, and that, in fact, a vi^holly différent process is carried on in
défendants' plants at Biscoe and Aberdeen, was contradicted or rebut-
ted in any manner. It must therefore be accepted as established by
the proofs :
(i) That défendants' plants are not constructed according to the Bil-
finger patent No. 658,888, in suit herein ; and,
(2) That no such process as set forth and claimed in the Bilfinger
patent No. 674,491, in suit herein, is carried on in the plants of the
défendants.
A decree will be entered for défendants, dismissing the bill of com-
plaint herein, with costs.
PERKINS ELECTRIC SWITCH MFG. CO. y. BUCHANAN & CO.
(Circuit Court, B. D. Pennsylvanla. March 24, 1904.)
No. 51.
1, Patents— INFEINGEMENT— Incandescent Lamp Sookets.
The Perklns patent, No. 626,927, for an Incandescent lamp Bocket, was
not anticipated, and, while the parts were old, covers a new combinatlon
of utility, and discloses patentable Invention. Clalms 3, 4, and 9 also held
Infringed.
2. SAME— COMBINATION AND AOGBEOATIOH DlSTIROtTISHED.
Eléments of the patent considered, and held to constltute, not a mère
aggregation of separate éléments, but a composite construction. In whlch
the several parts co-operate to produce a common and combined resuit,
whlch the law accepta and sustains.
In Equity. Suit for infringement of letters patent No. 626,927, for
an incandescent lamp socket, granted to Charles G. Perkins June 13,
1899. On final hearing.
Howson & Howson, for plaintiffs.
Marcellus Bailey and Curtis B. Johnson, for défendants.
ARCHBALD, District Judge.^ The issues in this case are few, and
comprised within a narrow compass. While infringement is denied in
the answer, it was not seriously disputed at the argument, and could
1 Speclallj asslgned.
PEEKINS ELECTEIC SWITCH MFG. CO. V. BUCHANAN & OO. 135
not successfully be on the proofs. The socket manufacturée! by the
défendants, in its gênerai structure, is closely patterned after that of
the complainants, and, whatever may be the incidental improvements,
infringes upon it, for which, of course, the patent held by the défend-
ants covering thèse improvements affords no excuse. Neither, in view
of this, can they very well question its utility, having copied it. If it
had no advantage over other existing structures, why not follow them
instead?
The novelty of the invention is contested, but the références cited
against it are few, and, however they may limit, do not otherwise seri-
ously afjfect, it. The patent held by the complainants was issued to
Charles G. Perkins June 13, 1899, and is for an incandescent electric
lamp socket. The claims relied upon in this suit are as follows :
"(3) In combination in a lamp socket, a cap, a sbell, two blocks of Insulating
material, wlth recesses arrangea, to form two insulating-chambers, a plate
wlth a binding-screw located in one of the chambers, and having its ends se-
cured to the respective blocks, a plate with a binding-screw located in the
other of the chambers, and having its ends secured to the respective blocks, and
grooves in the edges of the upper block for the passage of the circuit-wires of
[to] the respective blnding-screws, substantially as specified.
"(4) In combination in a lamp socket, a shell, two blocks of insulating ma-
terial with recesses arrangea to form Insulated chambers, a plate with a bind-
ing-screw located in one of the chambers, a plate with a binding-screw located
in the other of the chambers, and a switch-block located in one of the cham-
bers, and adapted to make contact with the end of the plate in the same cham-
ber, substantially as specified."
"(9) In combination in a lamp-socket, a cap, a shell, two blocks of insulating
material located within the shell, insulated chambers formed by recesses in
the insulation, and plates bearing outwardly-extending binding-screws located
in the recesses, and having their ends seeured by screws to the respective in-
sulating-blocks, substantially as specified."
But four références are produced from the prior act, and of thèse
the Snow and the Hubbell patents may be classed together. Both, in
addition to a cap and shell, are made up of two blocks, or more prop-
erly disks, of insulating material, secured together by métal plates on
either side, to which the circuit wires — introduced in the Hubbell
through grooves on the edge of the upper block — ^are attached by out-
wardly extending binding-screws. So far there is a correspondence
with the plaintiffs' device, but there it stops. Between the blocks or
disks is a large, single, open chamber, in which the key or switch
mechanism is set, and across which there is an uninterrupted course
for the electric current in case a short circuit happens in any way to
be induced, while in the Perkins the two blocks are brought close to-
gether, and separate contact chambers, insulated from each other,
carved out of them, to obviate the danger which the others invite. Ad-
mittedly, this dififerentiates the two constructions, and does so with ef-
fect. The Wirt socket has little relevancy. It consists of a single
block — for strength — ^between which and the screw extension for the
lamp base a large, open chamber is left, to accommodate the switch
mechanism, the same as in the others mentioned, with the additional
danger that the bearded ends of the circuit wires may get in contact
with the métal of the screw extension below, there being nothing in
between to prevent. The Pass and Seymour — the only one remaining
136 129 FBDBBAL REPORTEE.
to be noticed — is porcelain throughout. It is made up of two main
parts — a base and a body — so assembled and fastened together as to
leave an arcing chamber between them, in which, side by side, tlie two
legs of the electric circuits end, separated by a projecting wall or cur-
tain. It must be confessed that, in the séparation in this way of the
two contact plates, the device approaches somewhat closely to the one
in suit. The idea, to a certain extent, may be said to be there; but
there is a différence, amounting to a distinction, in developing it. In
the Pass and Seymour the ends of the circuit wires are left in close
proximity in the same chamber, with nothing but a low and narrow
rib of porcelain intercepting them, which there is constant danger that
the frayed strands may bridge over and short-circuit. But in the Per-
kins this is doubly prevented — fîrst, by locating the contact plates at
diametrically opposite sides of the blocks; and, second, by giving to
each a separate recess or chamber therein. It is true that the wall
between the chambers is slight, and that the imperfect contact of the
upper and lower blocks leaves à small air space, which divides it ; and
in a badly fitted socket, like that produced by Mr. Mcintire, this may
be so great as to do away in great part with the benefit to be derived
from this construction. But in the ordinary and proper form, made
in accordance with the patent, the two-chamber feature has an im-
portant and distinctive function, which is not anticipated by anything
to be found in the Pass and Seymour, any more than in the rest of the
preceding art.
The patentability of the device, however, is questioned. The in-
ventor, it is said, took a two-block socket, which was old (Hubbell),
united the blocks with métal contact plates or standards on opposite
sides, also old (Wirt), and then insulated the plates by an intermediate
wall of porcelain— an expédient not only common, but expressly em-
ployed in the prior art (Pass and Seymour). But the merits of the
invention, and the inventive skill involved, are not to* be written down
in any such way. The problem of providing an electric lamp socket
which should be at the same time mechanically strong and easily han-
dled, electrically safe, and commercially cheap, was by no means easy
and obvious, as the many attempts at it, which hâve produced more
than 300 patents in the last 20 years, abundantly show. An entire
porcelain socket, such as the Pass and Seymour, has certain electrical
advantages, but is bulky, liable to break when exposed to rough usage,
and not readily connected up or handled. The use of métal, on the
other hand, in cap, shell, and screw extension, while conducing to light-
ness and durability as well as strength and cheapness, detracts from it
electrically. ïn the device in suit there is apparently a more complète
solution of thèse difïiculties than in anything which had preceded it,
and, even though accomplished by the use of known expédients, the
combination being a novel one, and the bénéficiai resuit obtained a sub-
stantial gain to the art, it must be regarded as involving the exercise
of invention, such as the law was designed to protect. If not, then
not only is this wanting in the other devices which hâve been put in évi-
dence, which stand on no higher plane, but there would seem to be
nothing further left that was patentable along existing lines in this
branch of the electric art ; and improvements therein must be relegated
GENERAL GASLIGHT CO. V. MATCHLBS8 MFG. (XX 137
to the unstimulated skill of the common artisan, rather than the genîus
of the inventer — a conclusion which we should be slow to reach.
It is further urged that the éléments drawn together in the patent
amount to a mère aggregation, but this loses sight of that which is
involved. The object of the invention is the production of an electric
lamp socket — an important commercial appliance, which, to meet the
demands upon it, must hâve certain characteristics and qualities. It is
necessarily made up of différent parts, designed for différent purposes,
some of which contribute one thing, and some another. The cap, the
shell, the upper and lower blocks, the insulating chambers, are nothing,
apart and in themselves; but together they unité to form a complète
socket, to be taken and used as a whole. This is not an aggregation of
separate éléments, each acting or standing by itself, but a composite
construction in which the several parts co-operate to produce a common
and combined resuit, which the law accepts and sustains.
Let a decree be drawn in the usual form in favor of the plaintiffs, and
referring the case to a master to take an account, with costs.
GENERAL GASLIGHT CO. v. MATCHLBSS MFG. CO.
(Circuit Court, S. D. New York. February 26, 1904.)
1. Patents — Invention — Designs.
Origlnality and the exercise of the inventive faculty are as essential
to give validity to a patent for a design as for a mechanical Invention.
2. S AME.
Whenever ingenuity Is displayed in producing a new design which im-
parts to the eye a pleasing impression, even though It be the resuit of
unltlng old forms and parts, such production is patentable.
-3. Same—Infringement— Design ïob Lamp.
The Humphrey design patent, No. 35,481, for a cluster gas lamp, shows
a novel design and discloses Inventioa Also held Infrlnged.
4. S AME.
Where it appears that, by uniting old éléments perceivable In other
lamp designs, a new lamp of difCerent contour and construction Is pro-
duced, and where the coUocated éléments also Impart an ornamental and
graeeful appearance, not possessed by prlor lamp designs, the conception
is beyond what an ordlnarily skilled workman Is able to achieve.
In Equity. Suit for infringement of letters patent No. 35,481, for
a design for a gas lamp, granted December 24, 1901, to Alfred H.
Humphrey. On final herring.
Dallas Boudeman, W. P. Preble, Jr., and Charles W. Culver, for
complainant.
Edward C. Davidson, for défendant.
HAZEL, District Judge. This is a bill for an alleged infringement
of design patent No. 35,481, dated December 24, 1901, issued to Alfred
H. Humphrey, and by him assigned to the complainant corporation.
The spécifications state that the invention relates to a design for gas
IT J. See Patents, vol. 38, Cent. Dig. § 33.
138 129 FEDERAL REPORTEE.
lamps known as "cluster lights." The défenses chiefly relied upon are
want of novelty and noninfringement. It is not seriously controverted
that the design embodies features familiarly known, nearly ail of
which may in some form be found in pre-existing lamps. The proofs
do not disclose the prior use of an ornamental lamp similar in design
to that described in the spécifications. On the contrary, the évidence
establishes that no lamp having the shape, configuration, or ornamenta-
tion of the lamp design in suit was previously known to the trade. The
design patent in question is not for an ornament, pure and simple. The
shape and configuration of the lamp also permit its classification as a
useful article of manufacture. According to section 4929 of the Re-
vised Statutes [U. S. Comp. St. 1901, p. 3398], the design must be a
new and original invention produced by the industry, genius, efïort,
and expense of the inventor. Whether the design possesses the char-
acteristics of originality and newness must largely, if not altogether,
be determined by the visual impressions resulting from its appearance.
Matthews & Willard Mfg. Co. v. American Lamp & Brass Co. (C. C.)
103 Fed. 634 ; Pelouze Scale & Mfg. Co. v. American Cutlery Co., 102
Fed. 916, 43 C. C. A. 52 ; Smith v. Stewart (C. C.) 55 Fed. 481 ; Unter-
meyer v. Freund (C. C.) 37 Fed. 342. The shape and configuration
of the lamp, in its entirety ; the collocation of its mechanical features ;
the arrangement of the cluster lights and mantels; the contour and
proportions of the bulbous globe ; the two métal bands, with their twist-
ed, plaited, and filigree ornamentation — contribute to the création of a
symmetrical form and pleasing appearance. The défendant contends
that the prior art discloses substantially similar designs. It is also
asserted that any additional éléments or substituted features constituting
complainant's patent accomplish an artistic resuit due solely to an
assembling of parts obvious to any skilled designer, and not entitled
to the dignity of invention. This contention is entitled to careful con-
sidération. It is quite well settled, upon the authority of Smith v.
Whitman Saddle Co., 148 U. S. 674, 13 Sup. Ct. 768, 37 L. Ed. 606,
that the law which applies to a mechanical patent does not differ mate-
rially from that applicable to design patents. Hence originality and
the exercise of the inventive faculty must be présent in both instances.
The mère adaptation of that which was old and familiarly known to
new purposes is not invention, nor would the mère aggregation of
known parts of other substantially similar designs to produce that un-
der considération constitute patentability. Perry v. Starrett, 3 B. &
A. 485; Simpson v. Davis (C. C.) 12 Fed. 144, 20 Blatchf. 413;
Gorham Co. v. White, 14 Wall. 511, 20 L. Ed. 731. It is quite true
that the record shows many lamps of ornamental and graceful ap-
pearance, which were known prior to the conception of the design
lamp in suit. Furthermore the collocation of différent parts of such
designs is frequently used to enhance their appearance and salability.
The caprice of. fashion constantly demands something novel in the
art under considération. However that may be, the principle, as
applied to design patents, is unassailable, that whenever ingpnuity is
displayed in producing something new, which imparts to the eye a pleas-
ing impression, even though it be the resuit of uniting old forms and
BBILL T. FECKHAM MTQ. OO. 189
parts, such production is a meritorious invention and entîtled to pro-
tection. The évidence establishes beyond doubt that the lamp under
considération met with immédiate favor from the public on account of
its artistic construction. It appears from the évidence of the patentée
that his object was to design a lamp peculiarly appropriate for a gas
arc lamp of ornate appearance, which would resemble an electric lamp.
He began his design in August, 1900, completing the same in October
of that year. No other similar lamp, which when lighted appeared like
an electric light, was then known. A number of witnesses familiar
with gas lighting and the sale of gas lamps testified that there were no
lamps on the market resembling the Humphrey design, which insures
the illumination of large areas, while its ornate appearance and novel
shape quickly achieved popularity. I hâve looked in vain through the
illustrated catalogues submitted in évidence for lamps like that in suit.
The prior art does not disclose a lamp in its entirety (and that must be
the test of anticipation) which justifies declaring void the Humphrey
patent, and thus negativing the presumption of patentability secured to
the inventor by the issuance of the patent. Every part used in the
Humphrey design is trimmed and united in its construction with the
sole object of forming a symmetrical and harmonious whole. This
object was achieved as a resuit of effort, study, and skill, and it is
therefore entitled to the dignity of invention.
The question of inf ringement : The defendant's lamp is apparently
identical with that of complainant. There are a few minor différences
in détail, but such différences are thought to be immaterial. Gorham
Mfg. Co. V. Watson (C. C.) 74 Fed. 418; Whittall v. Lowell Mfg. Co.
(C. C.) 79 Fed. 787; Sagendorph v. Hughes (C. C.) 95 Fed. 478; Hut-
ter V. Broome (C. C.) 114 Fed. 655. The configuration, shape, and out-
line are the same, and only the closest inspection will disclose the sHght
différence of construction pointed out by the défendant at the argu-
ment.
Let a decree be entered for an injunction and accounting as prayed
for in the complaint, with costs.
BRILL et al. V. PEOKHAM MFG. CO.
(Circuit Court, S. D. New York. January 11, 1904.)
1. Patents— Peeliminaky Injunction against Infeingement— Effect op
Pbior Décision.
Where a patent bas been lield valid and infringed by a court of another
circuit after a coiitested liearing, It is the practice to grant a preliminary
injunction on sucli décision uniess new évidence is produced which is of
such charaeter that it may fairly be supposed that it would hâve changed
the décision If it had been before the court in the prior suit
2. Same— Street Cad Teuok.
A preliminary injunction granted against infringement of the Brill
patents, No. 627,898 and No. 627,900, for a truclî for street cars, on a
prior décision involving practically the same issues.
1 1. See Patents, vol. 38, Cent. Dig. § 488.
1*0 129 FBDBEAL EEPORTEB.
^" Equity- Suit for infringement of letters patent No. 627,898 and
No. 627,900, for a truck for electric street cars, granted to George M.
Brill June 27, 1899. On motion for preliminary injunction.
Edmund Wetmore, Francis Rawle, and Joseph L,. Levy, for com-
plainants.
Chas. H. Duell, for défendant.
LACOMBE, Circuit Judge. The patents in suit and similar in-
fringing devices to those complained of were before the Circuit Court
in the District of New Jersey on final hearing. 124 Fed. 778. Nearly
ail the prior patents now presented were then submitted, although the
opinion does not specifically enumerate them. Under such circum-
stances the practice hère is to inquire, first, whether the record con-
tains anything not before the New Jersey court, and, if something new
is found, to inquire whether it is of such a character that it may fairly
be supposed that such court would hâve reached a différent conclusion
had it been presented in the earlier case. Badische Anilin &; Soda
Fabrik v. Klipstein (C. C.) 125 Fed. 543. There is nothing new hère
except prior patents to Beach and to Davenport and Bridges, and the
file wrapper and contents. Neither of thèse patents shows the précise
combination which would anticipate, and the old éléments they show
were already shown in the patents which were before the court in the
other cause. It is not thôught that any différent resuit would hâve
been reached had thèse and the file wrapper been originally put in proof.
The Circuit Court in New Jersey, however, stayed the issuance of in-
junction until its décision could be passed upon by the Court of Ap-
peals, and a similar disposition would seem proper in the case at bar.
The ordinary injunction order will therefore be signed. Immediately
upon its entry défendants may take an order suspending opération of
the injunction upon défendant filing a bond for $20,000 and sworn state-
ments of bimonthly sales of the infringing trucks; the suspension,
however, to be limited to the time required to secure décision of appea!
in the Third Circuit, with provision that in the case of any delay by ap-
pelants in that case complainants hère may move to vacate the order
suspending stay.
An injunction order will be signed in the suit against the old Com-
pany, Peckham Motor Truck & Wheel Company, but no suspending or-
der will be granted in that case.
WESTINGHOUSE ELECTRIC & MANUFACTURING CO. T. STANLEÏ
INSTRUMENT CO.
(Circuit Court, D. Massachusetts. Marcli 11, 1903.)
No. 1,084.
1, Patents— Anticipation— Electric Motors.
The Tesla patents, Nos. 511,559 and 511,560, for a method and means
of operating electric motors, held void for anticipation by the Ferraris
publication at Milan, on évidence which failed to carry the date of Tes-
la's Invention back of such publication.
WILLIAM FIRTH CO. V. MILLEN COTTON MILLS. 141
In Equity. Suit for infringement of letters patent Nos. Sii,559 and
511,560, for a method and means of operating electric motors, granted
to Nikola Tesla, December 26, 1893. On final hearing.
Kerr, Page & Cooper and Frederick P. Fish, for complainanL
Mitchell, Bartlett & Brownell, for défendant.
COLT, Circuit Judge. Upon careful considération of the évidence,
I hâve reached the conclusion that the complainant has failed to estab-
lish, by sufficient proofs, the conception by Tesla of the inventions in
suit prior to April 22, 1888, the date of the Ferraris publication. _ In
complainant's supplemental brief I find no reasons stated or authorities
cited which should lead the court to any différent conclusion.
Since the hearing in the case at bar, the Circuit Court of Appeals for
the Second Circuit, in a suit, involving the same patents, brought by
this complainant against the Catskill Illuminating & Power Company,
upon the same évidence which was before us, has held that the proofs
were insufficient to establish invention by Tesla prior to April 22, 1888.
This décision, which was passed down February 26, 1903, renders un-
necessary an extended opinion by this court, since it would be only a
répétition of the views so clearly expressed by Judge Townsend in the
opinion of the court in the Catskill Case, 121 Fed. 831.
A decree may be entered dismissing the bill, with costs.
WILLIAM FIRTH CO. v. MILLEN COTTON MILLS. SOUTHEEN
COTTON MILLS & COMMISSION CO. v. SAME. C. B.
RILBY & CO. V. SAME."*
(Circuit Court, S. D. Georgla, N. E. D. May 4, 1903.)
1, CoKPOEATioNs— Liens— Sale or Assets — Attornbts fob Stockholdees—
Suit Mving been brought to foreclose liens on a new cotton mlll, the
property of a corporation, petitioners flled a bill on behalf of certain stock-
holders, alleging that the suit to sell the property was in aid of a collu-
sire combination to deprive such stockholders of thelr interest, and prayed
that the court take charge of the property, and operate the same for the
payment of the corporation's debts. The bill was Consolidated wlth the
prior proceedings without objection, and, on petitioners' initiative, an ex-
pert was appointed, who made a valuable report to the court as to the
property and the advisabllity of operating the same, after which a decree
of sale was ordered on the combined bill, at which only $50,000 was bid
(or property worth $160,000. This sale was set aside on petitioners' ob-
jection, and a resale ordered at an upset price of $90,000, for which the
property was sold. Held, that petitioners, having rendered valuable serv-
ices both to the court and to the creditors, were entitled to a fee of $1,500
eut of the proceeds of the sale.
In Equity. Pétition of Erwin & Callaway and Hall & Wimberly, for
attomey's fées. Exceptions to master's report
* Reversed on appeal. See 129 Fed. 79.
142 129 FEDBBAL REPORTER.
Marion Erwin, Merrel P. Callaway, John I. Hall, and Olin J. Wim-
berly, for petitioners.
William K. Miller, for J. R. Lamar, trustée, purchaser.
E. H. Callaway, for Millen Cotton Mills.
SPEER, District Judge (orally). The equity of solicitors for the
appHcant hère is based upon the following facts : There was a bran
new cotton mill of modem construction, with modem machinery,
complète and ready for opération. It cost $160,000. Some of its
directors were also creditors. They were entering into negotiations
with other creditors for the purpose of bringing about a sale of the
property at much less than its real value. There can be no doubt
about thèse facts. One of thèse creditors, namely, the William Firth
Company, brought an original bill seeking to foreclose certain liens
and sell the property. The stockholders who had put their means
in large amount in this venture saw that their ail therein invested
was threatened, and they brought a separate bill with a view to hâve
the court take charge of the property, protect it from collusive com-
binations which threatened to ruin ail except those in the alleged
combination, and if possible hâve such an investigation made as
would enable the court to détermine if it could be operated profit-
ably, and thus work itself out of debt. This bill, without any ex-
ception from any quarter, was by order of the court consoHdated
with the original bill for foreclosure, and thereafter the cases pro-
ceeded together. The sale was had under the Consolidated bills.
Adéquate compensation, $1,500 in amount, was by the purchasers,
and through a private agreement of which the court was not ap-
prised until the hearing, paid the solicitors, who filed the original
bill. It was stated in judicio by one of the solicitors for the pur-
chasers, who were also the lienholders, that it was deemed safer to
pay ofï thèse solicitors than to fight them, but ail compensation is
refused to Messrs. Hall & Wimberly and Erwin & Callaway, who
brought the bill intended to conserve the properties, and who now
apply for an allowance. In addition to thèse proceedings, C. E.
Riley & Co. filed another bill to foreclose mechanics' liens, and their
solicitors were paid. It is quite safe to conclude that their fées were
deducted from the large values thèse purchasers secured by this hti-
gation ; in other words, from the fund in court. We, however, hâve
no knowledge of the amount paid thèse gentlemen, who now repre-
sent the purchasers resisting the claim of Hall & Wimberly and
Erwin & Callaway. Mr. E. H. Callaway, counsel for the Millen Cot-
ton Mills, bas also been paid by private understanding, presumabîy
from the same fund. It is to be observed that his client through
answer filed by him expressly approved the effort of the soHcitors
now seeking compensation to save the property by their attempt to
hâve the receivers work it out of debt. Upon the averments of this
bill such investigation was made, an expert was appointed, the re-
ceiver under the original bill of William Firth Company not having
the requisite technical knowledge, and the expert Mr. Tracy I. Hick-
man made a careful investigation into the status and character of
WILLIAM FIBTH CO. V. MILLEN OOTTON MILLS. 143
the property and the facilities for opération, ànd with the co-receiver
made a joint report to the court. This report was of undeniable
value, net only to the court, but to ail of the creditors. The re-
ceivers, it is true, reached the conclusion that the property could
not be operated profitably by them, and that, in itself, was a matter
of very great value to ail the parties at interest, because otherwise
the court might hâve gone forward in the effort to keep the enter-
prise a going concern, and might for the lack of information hâve
entailed greater loss on the creditors. The investigation thus made
by the receiver appointed under the bill filed by the attorneys mak-
ing application for counsel fées was generally of great value to the
court, and his gênerai participation in the management and con-
servation of this property, he being an experienced mill man, was
also advantageous to the trust fund. Finally, however, the property
was brought to sale. It was alleged that the combination had been
made to sell it for $40,000, and it is signifîcant that the bid as made
for it, in which the local directors and the other lien creditors were
interested, was for $50,000, and those parties who were charged as
combining to sell it in the first instance were in large measure
intended to be the beneficiaries of this bid. The soUcitors now seek-
ing compensation filed objections to the price offered, and upon fui!
hearing the bid was held inadéquate. Thèse gentlemen attended
the hearing of the motion to confirm the sale, and made a full show-
ing why it should not be confîrmed. A resale was ordered, and the
property brought the sum of $90,000, an increase of 44 per cent,
over the bid originally made. This sale was approved.
Now, it cannot be questioned that the conduct of thèse solicitors
was meritorious. They did not succeed in accomplishing ail that
they set out to do in the first instance, but it seems a just conclusion
that they contributed to increase the aggregate value of the fund
in court from $50,000 to $90,000. They appeared at ail the triak
of the various issues in the cause. Thèse were numerous. Their
counsel assisted the court in every way possible, they took part in
ail the efïorts to resuscitate this venture which was earnestly and
persistently attempted by the court with a view to save the creditors
and stockholders as well, and to bestow upon the community where
the mill was situated the great benefits to resuit from the opération
of such an establishment.
In the exercise of the équitable discrétion in such cases justified
by the authorities, it seems justifiable to allow thèse gentlemen com-
pensation for their services. Besides, there will be no great hard-
ship on the syndicate of creditors and directors of the Millen Cotton
Miîls, who, as the resuit of thèse proceedings, hâve obtained a clear
title to a new mill, with the most modem and costly machinery,
worth $160,000, for $90,000 of their claims. The actual price they
paid, reduced to a money basis, is in fact much less. It is apparent
to the court that but for the action of the solicitors now seeking
compensation the mill would hâve been sacrifîced .for a little more
than half this sum, with utter ruin to every interest save the pur-
chasers thus favored, and leaving $40,000 of liens unpaid, with the
inévitable delay, litigation, and diminution of the trust fund which
144 129 FEDEBAIi REFOBTEB.
must have resulted by the efforts of those parties to recoup them-
selves.
We conclude, therefore, that the solicitors before the court asking
an allowance are entitled to compensation, under the circumstances ;
and since it is conceded on ail hands that, if entitled at ail, a fee of
$1,500 will be entirelj- reasonable, that sum will be allowed.
KALAMAZOO CORSET CO. v. SIMON.
(Circuit Court, E. D. Wisconsin. March 20, 1903.)
1. CoNTEACTS— Construction— Usage.
While proof of a gênerai usage Is admissible to explain a contract, In
the absence of express stipulations, or where the meaning of the parties
Is uncertain, from the language used, usage cannot be shown to vary the
légal Import of the contract as made, or to add new terms thereto.
2. S AME— Application of Usage.
Where numerous lots of corsets were offered for sale by letter as a
"job lot" and as an entirety, the letter stating that "the enclosed stock
sheet shows the quantity of each style and color," and that "the proportion
of sizes," as shown, "is nearly perfect," which offer défendant declined,
but selected and offered to take three of the lots as specified in the stock
sheet, the acceptance of defendant's offer made a contract based on ex-
press stipulations, which was not within a usage that, in the purchase of
job lots, the buyer is not obligated if the variation in the deliveries is con-'
siderable, and that it rests with the buyer to détermine whether the dis-
crepancy is reasonable or unreasonable.
3. Same— Validity — Definiteness.
A usage that, in sales of job lots of goods, the buyer is not obligated if
the variation in the quantity delivered is considérable, and that it rests
with the buyer to détermine whether the discrepancy is reasonable or un-
reasonable, no deflnite test being recognized, Is invalid for uncertainty,
4. Same— Pebfokmance or Contract— Subbtantial Variations.
Where défendant purchased three job lots of corsets, represented on
plaintiff's stock list as containing 25110/12 doz., 20411/12 doz., and 8O9/12
doz., and the deliveries offered contained 266% doz., 267i/i2 doz., and 78
doz., the variance was substantial, and entitled the buyer to refuse ac-
ceptance.
5. Same— Question fob Court.
Where, in an action for breach of a contract of sale, the facts were
undisputed, and a verdict for plaintiff would be unsupported by testimony
or legitimate inference from any fact in évidence, it was proper for the
court to détermine the same without submitting it to the jury.
6. Same— Waiver.
Where défendant agreed to purchase certain job lots of corsets accord-
ing to a stock sheet showing the quantities, he did not waive his right to-
refuse to accept because of a material variance in the quantities delivered,
by his mentioning only his own mistake in ordering one of the lots, wben
he intended to order anothei", which the seller refused to permit him t»
correct.
On Motion for New Trial.
Durant, Price & Cowen, for plaintifï.
Winkler, Flanders, Smith, Bottom & Vilas, for défendant.
SEAMAN, District Judge. The suit is for breach of contract of
purchase, by refusai to accept the goods tendered as a delivery. The
contract is in writing for the purchase of a large quantity of corsets
KALAMAZOO COESET CO. V. SIMON. 145
from the manufacturer, designated in the pleadings as a "job lot" or
"job lots," and the facts are undisputed. Verdict was directed in fa-
vor of the défendant upon the ground that the goods tendered for de-
livery greatly exceeded the terms of the order in two of the lot num-
bers, and were slightly déficient in the other number. As the goods
varied in size and color in each lot, and came intermingled, so that
several days' work was involved in checking and storing, the défend-
ant was justified in the rejection, if the letter of the contract governs
the issue. The plaintifï made an offer by letter to close out numerous
lots of corsets, each bearing a descriptive number, at priées named for
each, inclosing a "stock sheet," which, the letter stated, "shows the
quantity of each style and color. You will observe the proportion of
sizes is nearly perfect." The défendant answered with an offer for
three of the lots — Nos. 79, 20 and 249 — referring to the stock list, at
priées named by him, but refusing the others, and this was accepted.
In the stock list. No. 79 contained 251^°/" doz. ; No. 20 contained
204^Vi2 doz.; and No. 249, 80^/12 doz. The plaintiff sent instead of
No. 79, 266y3 doz.; of No. 20, 267 V^^ doz.; and No. 249, 78 doz.
Under well-settled rules, this tender is not performance of the con-
tract, unless (l) the contract terms are subject to modification by the
proof admitted of gênerai custom in respect of job-lot transactions;
and (2) the performance appears to be within a valid gênerai custom or
usage applicable thereto.
1. Proof of a gênerai usage is admissible to explain a contract, either
"in the absence of express stipulations, or where the meaning of the
parties is uncertain upon the language used, and where the usage of the
trade to which the contract relates, or with référence to which it was
made, may afford explanation and supply deficiencies in the instru-
ment." Oelricks v. Ford, 23 How. 49, 63, 16 L. Ed. 534, 5 Rose's
Notes (U. S.) 966. So it may be that référence to a "stock sheet" in a
simple offer and acceptance of a job lot may thus be open to explana-
tion where no express stipulations appear to govern the interprétation.
Nevertheless the rule stated by Mr. Justice Story in The Reeside, 2
Sumn. 567, Fed. Cas. No. 11,657 — approved in De Witt v. Berry, 134
U. S. 306, 312, 10 Sup. Ct. 536, 33 L,. Ed. 896— appears to prevail,
namely, "that it can never be proper to resort to any usage or custom
to control or vary the positive stipulations in a written contract, and a
fortiori not in order to contradict them. An express contract of the
parties is always admissible to supersede or vary or control a usage or
custom." As stated in De Witt v. Berry, supra, "While paroi évidence
is sometimes admissible to explain such terms in the contract as are
doubtful, it is not admissible to contradict what is plain, or to add new
terms." Usage cannot be shown to vary the légal import of the con-
tract as made. 27 Am. & Eng. Encyc. 862. In the light of thèse prin-
ciples I am of opinion that the terms of référence to the stock sheet in
each of the letters constituting the contract in question exclude the
custom from considération, even if the custom as shown is otherwise
applicable to the transaction.
2. On the other hand, the custom stated by the witnesses cannot af-
fect the contract for two reasons, at least : (i) Because the transaction
129 F.— 10
146 129 FEDERAL REPORTER.
was not the ordinary job-lot sale to which the testimony of usage re-
lates ; and (2) because the terms of the usage are either too uncertain
to admit of its considération, or exclude the case of large excess shown
in two of thèse lots, (i) The only transaction to which the testimony
of usage can be deemed applicable is one of simple offer and acceptance
of a recognized job lot upon the mère exhibition of a stock sheet, usually
in the hands of a traveling salesman for that purpose. Hère numerous
lots were ofifered by letter, as a job lot and as an entirety, stating that
"the enclosed stock sheet shows the quantity of each style and color,"
and that "the proportion of sizes," as shown, "is nearly perfect." The
défendant declined this offer, but selected and offered to take three of
the lots as specified in the stock list. Acceptance of this offer made
the contract upon that basis as one of express stipulations, and not
within the alleged usage. (2) In any view, however, the testimony con-
curs in the requirement that the stock sheet must show approximately
the quantity of goods in the lot offered for sale, the only variations
being for diminution or increase naturally arising in due course of the
business before the sale is consummated; and the two disinterested
witnesses concur in testifying that the buyer is not obligated under
the custom if the variation is considérable, and that it rests "with the
buyer to détermine whether the discrepancy is reasonable or unrea-
sonable," no definite test being recognized. On the last-mentioned ver-
sion of the custom — shown on legitimate cross-examination, as I un-
derstand its import — uncertainty in its terms and obligation clearly bars
it from entering into the alleged sale. Oelricks v. Ford, 23 How. 62,
16 L. Ed. 534. There was no meeting of the minds of parties upon the
subject-matter to make an executory contract. It is true that a valid
contract could be made for a spécifie lot, though the quantity was unde-
termined ; that it could be made for such quantity as was produced
or remained on hand at a given time or event. The quantity would
then be determined by the event. But no such contract is made by
the alleged usage. No such test is made binding. The question
whether the quantity conformed to the offer and acceptance was con-
tingent upon the buyer's view whether the variance was reasonable or
unreasonable, and in any aspect no definite test was provided. Treated
as "an absolute contract for a spécifie quantity within a reasonable
limit" (Cabot v. Winsor, r Allen, 546, 551), it is plain that the variance
is substantial. The facts being undisputed, the question thereupon was
rightly determined by the court without submission to the jury. Cabot
V. Winsor, supra. A verdict contra would be unsupported by testi-
mony or by legitimate inference from any fact in évidence.
The contention that the défendant waived this defect by mentioning
only the mistake made by him in ordering No. 79, when he intended
No. 179, is not tenable. It is probable that he would hâve waived if
that correction had been allowed, but it is clear that he did not do so
when they refused, and he had ascertained the true state of facts.
The motion for a new trial is denied, and judgment will enter upon
the verdict.
CN BE LEWIS. 1^7
m re LEWIS.
(District Court, D. Delaware. Aprll 5, 1904.)
No. 95.
1. BANKEUPTCT — iNVOLTJNTAKy PETITION — UlSMISSAL.
An involuntary pétition in bankruptcy, in due form, by three créditons,
will not be dismissed on the application of two of them, against the objec-
tion of the ttiird, on the ground merely that the two "désire and consent
that said pétition and proceedings be dismissed."
(Syllabus by the Court)
In Bankruptcy.
Robert H. Vandyke, for petitioners.
C. L. Ward, for Champion Mfg. Co., one of original petitioners.
BRADFORD, District Judge. An involuntary pétition in bank-
ruptcy, containing the proper averments and in due form, was filed
March 26, 1904, by the Supplée Hardware Company, Samuel M. Mal-
lalieu and the Champion Manufacturing Company against Louisa S.
Lewis. On the same day a receiver of the estate of the alleged bank-
rupt was appointed, who has since qualified, and entered into posses-
sion thereof. Process issued pursuant to the prayer of the pétition
and was served March 28th. Two of the three petitioning creditors,
namely, the Supplée Hardware Company and Mallalieu, hâve this
day filed a pétition praying that the pétition in involuntary bank-
ruptcy in which they joined, and the proceedings thereon, "be dis-
missed, and that notice be given to the creditors as provided by the
bankruptcy law." On the présentation of this pétition in open court
the Champion Manufacturing Company, the remaining original peti-
tioner, through its counsel, objected to the granting of the prayer
thereof, and insisted that the case in bankruptcy should not be ar-
rested. There are several independent objections fatal to the grant-
ing of the prayer of the pétition for dismissal. It is unnecessary,
however, to consider in this opinion more than one. The pétition
wholly fails to state any ground justifying a dismissal as prayed.
The sole reason assigned is "that your petitioners désire and consent
that said pétition and proceedings be dismissed." Such a reason is
palpably insuificient, even were there no other objections to the grant-
ing of the prayer for dismissal. The pétition does not show how a
dismissal could inure to the gênerai benefit of the creditors, nor, in-
deed, does it aver that it would be of such benefit. To dismiss the
proceedings in bankruptcy on the ground alleged would establish a
harmful précèdent. In the language employed in another connection
by Judge Blodgett in the case of In re Heffron, Fed. Cas. No. 6,321,
decided under the bankruptcy act of 1867, "It would lead to under-
hand and secret negotiations between the debtor and a portion of the
creditors, and be a strong incentive for showing favors to a few
creditors at the expense of the many." Therefore, if it be assumed
that the pétition for dismissal has not been prematurely presented, no
list of creditors having been filed in the case, and if it be further as-
sumed that the court could properly order a dismissal of the proceed-
148 129 FBDBBAL RSFOBTEB.
ings in bankruptcy on the application of two of the original petîtioners
against the protest of the third, and if it be further assumed that the
prayer for dismissal sufficiently discloses an existing pecuniary inter-
est on the part of the Supplée Hardware Company and Mallalieu, or
either of them, in the subject to which it relates, the court would still
be obliged to deny the présent application.
SOCIAL REGISTER ASS'N t. MURPHY.
(Circuit Court, D. Rhode Island. Mnrch 9, 1904.)
No. 2,617.
1. Copteioht—Infbingement— Damages Recoverabxe in Equitt.
In a suit in equity for infringement of copyriglit there can be no re-
covery In tlie way of damages beyond the gains and profits which the de-
fendant Is shown to hâve realized from the infringement
In Equity. On motion for entry of decree.
See 128 Fed. 116.
Gifford & Bull, for complainant.
Matteson & Healy, for défendant.
BROWN, District Judge. This is a motion for the entry of a de-
cree for infringement of copyright. The complainant is entitled to an
account of the profits, gains, and advantages which the défendant has
received. It is not entitled to damages other than this. The complain-
ant relies upon section 4964 of the Revised Statutes, which provides
that an infringer shall "pay such damages as may be recovered in a
civil action by such proprietor in any court of compétent jurisdiction."
This does not enlarge the jurisdiction of a court of equity. It is not
analogous to section 4921, which confers upon the courts power, in
patent causes, to render a decree for damages in addition to profits to
be accounted for. The gênerai principles governing courts of equity
in such matters are explained in Root v. Railway Co., 105 U. S. 189,
207-215, 26 L,. Ed. 975; Chapman v. Ferry (C. C.) 12 Fed. 693; Cal-
laghan v. Myers, 128 U. S. 663, 9 Sup. Ct. 177, 32 h. Ed. 547. See,
also, Stevens v. Gladding, 17 How. 447, 15 L. Éd. 155; 7 Am. & Eng.
Enc. Law (2d Ed.) 590. This point was not involved in the décision
of Belford v. Scribner, 144 U. S. 488, 12 Sup. Ct. 734, 36 L. Ed. 514.
The decree simply awarded profits, and no distinction was made be-
tween profits and damages. While in some cases the profits to be ac-
counted for are spoken of as damages, yet in no case that has been pre-
sented is it held that damages, as distinct from or additional to profits,
can be decreed in equity in a copyright case, as in patent causes.
While the word "damages" is used in decrees, it is used synonymously
with "profits." Confusion can be avoided by omitting the word "dam-
ages," since the word "profits" is more accurate, and sufficient. The
waiver of forfeiture removes ail objection to the examination of the
défendant on the accounting. The only proofs of infringement of
H 1. See Copyrights, vol. 11, Cent. Dig. §§ 81, 83.
DAVIS V. KANSAS & TEXAS COAL CO. 149
Spécifie copyrights that hâve been presented are those contained in the
complainant's exhibit "Parallel Columns." The decree should be limit-
ed by striking out ail copyrights other than those referred to in that
exhibit. Clause 3 should be amended by striking out the words "one
or more of the copyrights," and inserting a référence to the spécifie
copyrights which the défendant has infringed as appears by said ex-
hibit.
I find no sufficient reason for the déniai of the usual costs to the
complainant.
Let a draft decree be prepared accordingly.
DAVIS V. KANSAS & TEXAS COAL 00. et al.
(Circuit Court, W. D. Arkansas, Ft Smith Division. April 1, 1904.)
1. FOEEIQN COEPORATIONS— SeBVICE OF PeOCESS— CONBTITUTIONALITY OF STAT-
UTE.
Act Arlv. Feb. 26, 1901 (Acts 1901, p. 52, | 1), which provides that where
a right of action shall accrue in favor of a résident or citizen of the state
against a foreign corporation, whether arising on contract or In tort, aW
such corporation shall not hâve an agent in the state or hâve designated
a person on whom service may be made, process may be served on the
Auditor of State, and shall be sufficient to give jurisdiction of the person,
when construed in connection with previous législation requiring foreign
corporations doing business in the state to designate agents therein on
whom process might be served, is constitutional and valid, as applied to
corporations which were doing business in the state after the passage
of the act and at the time the cause of action sued on accrued therein In
favor of a citizen, and a corporation caimot évade service in such case
by thereafter withdrawlng from the state and canceling the appointment
of its designated agent.
On Motion to Quash Service.
T. B. Pryor, for plaintifî.
Ira D. Oglesby, for défendants.
ROGERS, District Judge. This suit was brought in the state
court, and removed by the défendants to this court. A motion is
now made by the défendant the Kansas & Texas Coal Company to
quash the service. The service was made upon the Auditor of State,
and the motion allèges that the service upon the Auditor was un-
authorized, illégal, and insufficient, and conferred no jurisdiction to
render personal judgment against said défendant, because no war-
rant or authority of law exists for the service of such process upon
the Auditor ; second, because the service of the process upon the
Auditor of the state of Arkansas under the act under which the
service was made is in violation of section 8, art. 2, of the Consti-
tution of Arkansas, and of the fifth and fourteenth amendments to
the Constitution of the United States. The provision of the Con-
stitution of Arkansas referred to is the one which provides that no
person shall be deprived of life, liberty, or property without due
1 1. Service of process on foreign corporations, see note to Eldred v. Amer-
ican Palace Car Co., 45 C. C. A. .3.
150 129 FEDERAL EEPOETER.
process of law; being, in substance, the same as article s of the
fédéral Constitution.
It was conceded in the argument that, at the time the injury com-
plained of occurred, the Kansas & Texas Coal Company was doing
business in the state of Arkan.sas, and in the Ft. Smith division of
the Western District thereof. It was also conceded that, at the time
the suit was brought, the Kansas & Texas Coal Company had ceased
to do business in the state, and had no agent in the state upon
whom service could be made. It also appears from the record that
up to the 28th of July, 1902, Thomas R. Tennant was the designated
agent of the Kansas & Texas Coal Company for the service of sum-
mons and other process, and that his agency was revoked on the
28th day of July, 1902, and that prior to the 28th of July, 1902, the
Kansas & Texas Coal Company had ceased to do business in the
state of Arkansas, and was not engaged after that time in any busi-
ness in the state, and that at the time of service of process in this
case Thomas R. Tennant was not the agent of the Kansas & Texas
Coal Company, or in any way connected with or employed by it.
It ,also appears from the record that service had been had upon the
sSÉÎd Tennant, and had been quashed by the state circuit court, be-
fore the removal of this case into this court, to which action the
défendant the Kansas & Texas Coal Company at the time excepted.
The service was had under the act approved February 26, 1901 (Acts
1901, p. 52), section i of which is as foUows :
"In ail cases where cavise of action shall accrue to a résident or citizen of
the state of Arkansas, by reason of any contract with a foreign corporation,
or where any liabllity on the part of a foreign corporation shall aecnie in
favor of any citizen or résident of this state, whether in tort or otherwise.
and such foreign corporation bas not designated an agent In this state upon
whom process may be served, or has not an offlcer continuously residing in
this state upon whom summons and other process may be served so as to au-
thorize a Personal judgment, service or summons and other process may be
had upon the Auditor of State, and such service shall be sufficient to give
jurisdiction of the person to any court in this state having jurlsdiction of the
subject-matter, whether sitting in the township or county where the Auditor
Is served, or elsewhere in the state."
If this act stood alone, the court would be compelled to quash the
service. Manifestly this statute, standing by itself does not author-
ize service upon the Auditor, which would be binding upon the de-
fendant corporation, if it was not doing business in Arkansas at the
time the cause of action accrued, or vi'here the cause of action grew
out of a transaction outside of the state. The act is broad enough,
however, to cover that class of cases. It must be construed, if it
can be upheld at ail, to apply only to causes of action against cor-
porations growing out of transactions while such corporations were
doing business in the state ; and, if this act stood alone, it could
not be upheld at ail, as against the Kansas & Texas Coal Company,
but it does not stand alone. The act of the Législature of Arkan-
sas approved February 16, 1899 (Acts 1899, pp. 18-21), is as foUows :
"Section 1. Every corporation fornied in any other state, territory or coun-
try, before it shall be authorized or permitted to transact business in this
state, or to continue business therein, if already established, sliall by its cer-
tificate, under the hand of the président and seal of such company or corpo-
DAVIS V. KANSA8 A TEXAS OOAI. 00. 151
ration, filed In the office of the Secretary of State of thls state, deslgnate an
agent, who shall be a citizen of thls state, upon wbom service of snmmons and
other process may be made. Such certiflcate shall also state the principal
place of business of such corporation in thls state. Service upon such agent
shall be suffleient to glve jurisdiction over such corporation to any of the
courts of thls state. Any corporation so flling such certiflcate in the office
of the Secretary of State shall pay therefor a fee of one dollar ($1.00) for
such flling, and a like fee for each subséquent appointment of an agent so
flled.
"Sec. 2. Every company or corporation incorporated under the laws of any
other state, territory or country, now or hereafter doing business in this state,
shall flle in the office of the Secretary of State of this state, a copy of its
charter, or articles of incorporation or association ; or, ia case such company
or corporation is Incorporated merely by a certiflcate of incorporation, duly
authenticated and certified by the proper authority. The Secretary of State
shall cause ail such charters, articles of incorporation or association so flled
to be duly recorded In a book kept for that purpose. And such corporation
shall be required to pay into the treasury of the state, Incorporating and oth-
er fées equal to those required of similar corporations formed with and under
the laws of this state. Upon compllance with the above provisions by said
corporation, a copy of such charter, or articles of incorporation, or certiflcate
so flled, properly certifled under the seal of hls office, shall be taken by ail
the courts of this state as évidence that the said corporation is entltled to
ail the rights and beneflts of this act And such corporation shall be entltled
to ail the rights and privilèges, and subject to ail the penalties conferred and
imposed by the laws of this state upon similar corporations formed and ex-
isting under the laws of this state : provided, that the provisions of thls act
requiring copy of original charter, and certiflcate naming an agent, and to
pay certain fées therefor, shall not apply to railroad or telegraph companies
which hâve heretofore built their Unes of railroad or telegraph into or through
this state : provided further, that the provisions of this act are not inteuded
and shall not apply to 'drummers' or traveling salesmen solicitlng business
in this state for foreign corporations which are entirely nonresldent.
"Sec. 3. On and after the going into effiect of this act, any foreign corpora-
tion, as defined above, which shall refuse or fail to comply with this act, shall
be subject to a flne of not less than one thousand dollars ($1,000.00), to be
recovered before any court of compétent iurisdiction ; and it is hereby made
the duty of the prosecuting attorneys of the différent judicial districts of thls
state to see to the proper enforcement of this act. Ail such fines so recovered
shall be pald into the gênerai revenue fund of the county in which the cause
shall accrue. In addition to which penalty, or after the going Into effect of
thls act, no foreign corporation, as above defined, which shall fail to comply
with this act, can maintain any suit or action, either légal or équitable, in
any of the courts of this state, upon any demand, whether arising ont of con-
tract or tort
"Sec. 4. Any foreign corporation that has heretofore engaged in business,
or made contracts in this state, may wlthin ninety days after the passage
of this act, flle such copy of articles of incorporation, together with certiflcate
of appointment of an agent upon whom service of summons and other légal
process may be had, in the office of the Secretary of State, and pay the req-
uisite fées thereon, as provided by this act, then ail their contracts made
before this act goes into efCect are hereby declared as valid as if said arti-
cles of incorporation and certiflcate, as herein defined, had been flled before
they began business in this state.
"Sec. 5. That ail laws and parts of laws in conflict herewith be and the same
are hereby repealed, and that this act shall take effect and be in force from
and after its approval."
By an act approved March i8, 1899 (Acts 1899, pp. 116, 117), it is
provided :
"Section 1. That section 1323 be amended so as to read as follows : Before
any foreign corporation shall begin to carry on business in thls state, It shall,
by its président and seal of said company filed In the office of the Secretary
152 129 FEDERAI!. REPORTEE.
ot State, deslgnate an agent who shall be a citizen of this state, upon whom
service of summons and other process may be made. Such certiflcate shall
state the principal place of business of sald corporation In this state, and
service upon such agent at any place In this state shall be sufBeient service
to give jurisdlction over such corporation to any of the courts of this state,
whether the service was had upon said agent withln the county whore the
suit is brought or Is pending or not.
"Sec. 2. Ail acts and parts of acts Inconsistent with this act are hereby re-
pealed, and this act shall take efCect and be in force from and after its pas-
sage."
By an act of the Législature of Arkansas (Acts 1899, pp. 305-307),
section 2 of the act of February 16, 1899, was amended so as to read as
follows :
"Section 1. That section two (2) of sald act be and the same is amended so
as to read as follows : Every Company or corporation incorporated uuder the
laws of any other state, territory or country, now or hereafter doing business
in this state, shall flle in the office of the Secretary of State of this state, a
copy of its charter, or articles of incorporation, or association, or in case such
Company or corporation is incorporated merely by a certiflcate, then a copy
of its certiflcate of incorporation, duly authentlcàted, and certified by the
proper authority. The Secretary of State shall cause ail such charters, arti-
cles of incorporation, or association, so filed to be duly recorded in a book
kept for that purpose. And such corporation shall be required to pay into the
treasury of the state, incorporating and other fées equal to those required
of similar corporations formed withln and under the laws of this state. Upon
compliance with the above provisions by said corporation the Secretary of
State shall cause to be issued to said corporation, a copy of such charter, or
articles of incorporation, or certiflcate so flled, properly certifled under the
seal of bis office, and a copy of such charter, or articles of Incorporation or
certiflcate, certifled to by the Secretary of State shall be taken by ail the
courts of this state as évidence that the said corporation has complied with
the provisions of this act, and is entitled to ail the rights and beneflts tberein
conferred. And such corporation shall be entitled to ail the rights and privi-
lèges, and subject to ail the penalties conferred and imposed by the laws ot
this state upon similar corporations formed and existing under the laws of
this state: provided, that the provisions of this act requlring copy of orig-
inal articles of incorporation, or charter, and certiflcate naming an agent,
and to pay certain fées therefor, shall not apply to railroad companies whlch
hâve heretofore built their lines of railroad into or through this state: pro-
vided further, that the provisions of this act are not intended and shall not
apply to 'drummers' or traveling salesmen soliciting business in this state for
foreign corporations which are entirely non-resident."
Ail thèse acts must be construed together, so that the provisions of
each of them may be permitted to stand, and from the whole the pur-
pose and object of the Législature is to be deduced. It may be noted
in this connection that as early as the 25th of April, 1873 (Acts 1873,
p. 258, § 13), the Législature of Arkansas enacted the following stat-
ute:
"No Insurance Company, not of this state, nor its agents, shall do business
in this state, until it has filed with the Audltor of this state a written stipu-
lation, duly authenticated by the company, agreeing that any légal process
affècting the company, served on the Audltor or the party designated by him,
or the agent specifled by said company to reçoive service of process for the
company, shall hâve the same effect as if served personally on the company
withln this state. And if such company should eease to maintain such agent
in this state, so designated, such process may thereafter be served on the
Audltor ; but so long as any liability of the stipulating company to any rés-
ident of this state continues, such stipulation can not be revoked, or modlfled,
except that a new one may be substituted, so as to requlre or dispense with
©AVIS V. KAN8AS & TEXAS COAL CO. 153
service at the office of said company within this state, and that snch service,
accordlng to this stipulation, shall be sufflclent personal service on the Com-
pany. The term 'process' includes any wrlt, summons, subpœna, or order,
wliereby any action, suit or proceedings shall be commenced, or which shall
be issued in or upon any action, suit or proceedings."
It will be noted that this last statute differs in some important par-
ticulars f rom the statutes quoted above, which apply to other corpo-
rations than insurance companies. For instance, by the last statute,
before an insurance company could legally do business in the state,
it was required to iîle a written stipulation "agreeing that ail légal
process affecting the company, served on the Auditor or the party
designated by him or the agent specifîed by said company to receive
service of process for the company, shall hâve the same effect as if
served personally on the company within this state." It is also pro-
vided that if such company should cease to maintain such agent in
the state, so designated, such process may thereafter be served on
the Auditor; and it prohibited the revoking by insurance companies
of such stipulation, except by substituting a new agent for the ône
revoked. It is also provided specifically that service on the Auditor
or such agent according to the stipulation shall be sufficient personal
service on the company.
Reviewing thèse several statutes, it appears that by a provision of
the original Code of this state, which provision is now found in sec-
tion 5672 of Sandel & Hill's Digest of the Statutes of Arkansas, a
foreign corporation having an agent in this state, could be brought
into court by making service upon such agent. Service could not be
had upon a foreign corporation in this state at that time in any other
way. It was therefore within the power of a corporation, if it saw
fit, at any time, to withdraw its agents from the state, and in that
way avoid suit. Afterwards, by an act of the Législature approved
April 4, 1887 (Acts 1887, p. 234), incorporated in sections 1323-1325,
inclusive, of Sandel & Hill's Digest, the Législature sought to cor-
rect this evil, and provided that, before any foreign corporation shall
begin to carry on business in the state, it shall, by its certificate under
the hand of the président and seal of such company, filed in the office
of the Secretary of State, designate an agent, who shall be a citizen
of the state, upon whom service of summons and other process may
be made. Such certiiicate shall also state the principal place of busi-
ness of such corporation in the state. Service upon such agent shall
be sufficient to give jurisdiction over such corporation in any of the
courts of the state. And by such stipulation the failure by such cor-
poration to comply with this provision rendered ail its contracts with
ail the citizens of the state void, and the state courts were prohibited
from enforcing the same in favor of such corporation. Corpora-
tions doing business in the state were also given 90 days within which
to comply with the statute. The purpose of this act was manifest.
It was to prohibit the corporation doing business in the state until
it had first designated an agent upon whom process might be served
in favor of any citizen of the state who might hâve a cause of action
against it. The act of February i6th, quoted supra, was intended to
carry out the same idea, and also to further regulate the doing busi-
154 129 PBDBBAIi REPORTEE.
ness in this state by foreign corporations. The act of March i8th,
supra, which amends section 1323 of Sandel & HiU's Digest, referred
to supra, was intended to authorize suit to be brought against foreign
corporations by service on the designated agent, whether the service
was had upon said agent within the countv where the suit was brought
or is pending, or not. The act of May 8th amending the second sec-
tion of the act of February i6th, supra, in no wise affects the method
previously provided for service upon corporations. It may be noted
that the Législature of the state, up to this date, made no provision
for service upon a foreign corporation, except upon an agent found in
the state, or a citizen of the state designated as an agent upon whom
service might be had under the acts above referred to. But the act
of February 26, 1901, which is now assailed, and under which the
process in this case was had, went a step f urther, and provided that :
"In ail cases where cause of action shall accrue to a résident or citizen of
tbe state of Arkansas, by reason of any contract with a foreign corporation,
or where any Ilability on the part of a foreign corporation shall accrue in
favor of any citizen or résident of this state, whether in tort or otherwise,
and such foreign corporation has not designated an agent in this state upoii
whom process may be served, or has not an offlcer continuously residing in this
state upon whom summons and other process may be served so as to author-
ize a Personal judgment, service of summons and other process may be had
upon the Auditor of State, and such service shall be sufficient to glve juris-
dictlon of the person to any court in this state having jurisdiction of the sub-
ject matter, whether sitting in the township or county where the Auditor is
served, or elsewhere in the state."
Up to the passage of this act a foreign corporation doing business
in the state might, at its pleasure, cease to do business in the state,
recall its agents, and revoke the authority conferred under the acts
above referred to upon a citizen of the state upon whom service could
be made; and, this being done, no suit could be brought against it
in the state. If the same is true under the provisions of the act of
February 26th, to which I bave just referred, what was the object
and purpose of the provision authorizing service to be made upon the
Auditor? The company could not withdraw the agency of the Au-
ditor, because that was conferred by the terms of the statute, and
when it did business in the state after the passage of the act of Feb-
ruary 26, 1901, that section of the statute became in the nature of a
contract between the company and the state, to the effect that service
might be had upon the Auditor of State in ail cases where suits accrued
against the company while doing business within the state ; and it
is beyond the power of the défendant company to revoke that pro-
vision of the statute. If the object of the statute was not that the
company might be sued after it had ceased to do business in the state,
and had recalled its agents and revoked the agency of the person
designated, then what could hâve been the purpose of the Législature
in designating the Auditor as a person upon whom service might be
had? It may be said that the object of designating the Auditor as
a person upon whom process might be ser\'ed was to provide against
the failure of foreign corporations to designate agents as previous
statutes required ; but it must be remembered that, by the provisions
of the previous statutes, foreign corporations were absolutely forbidden
IN EE BEEINEE.
165
to do business in the state at ail until they had designated agents, and
their contracts had been rendered void, and they themselves subjected
to criminal prosecution, for their failure to comply with the statutes.
I think, therefore, it is fair to say that the Législature intended that
a foreign corporation doing business in the state should not escape
suit in the state for contracts entered into by it or torts committed
by it by simply ceasing to do business in the state, recalling its agents,
and revolîing the authority of the person designated by it under the
law to receive process.
I am of the opinion that the principles laid down in the case of
Collier v. Mutual Reserve Life Association (C. C.) 119 Fed. 617, are
alike applicable to the case at bar, and that the motion to quash the
process ought to be overruled. 0£ course, this opinion must be lim-
ited to the facts before the court, and bas no application whatever to
contracts entered into or torts committed by corporations not doing
business within the state at the time the cause of action accrued, Be-
cause the act of February 26, 1901, is broad enough to cover the acts
and doings of foreign corporations beyond the territorial limits of
the state, which never at any time did business within the state, and
therefore, as to such corporations, is unconstitutional, it does not fol-
low that the act should be held to be void as to the class of cases
which arise out of transactions of foreign corporations doing business
in the state at the time such cause of action accrued.
The motion to quash the process in this case is overruled.
In re BREINBR,
(District Court, N. D. lowa. Aprll 22, 1904.)
1. BaNKBUPTCT— CONCEALMENT OF ASSETS— DiSCHAEGE.
Where, at the time of flling a voluntary pétition In bankruptcy, the
banlirupt knew that he had an interest in his grandfather's estate, and
knowingly omitted to list the same in his schedules, for the purpose of
conceallng it from his creditors, and knowingly made a false oath to such
schedules In expeetation of receiving a discharge from his debts and aft-
erwards enjoyiiig the property, he was not entitled to discharge.
2. Same— Amendmekt of Schedules.
Where a bankrupt knowingly omitted certain assets from his schedules,
the fact that he listed the property and amended his schedules after his
attempt to conceal such assets, and after the fact that he had made a
false oath had been discovered, was Insufflcient to relieve hlm of the con-
séquences of such acts and entitle hlm to a discharge.
On Pétition of the Bankrupt for Discharge, and Objections of Cred-
itors Thereto.
Kelly & Kelly, for bankrupt.
E. A. Morling and Geo. B. McCarty, for opposing creditors.
REED, District Judge. On November 27, 1903, Dallas D. Breiner,
of Emmetsburg, Palo Alto county, was adjudged a bankrupt upon his
own pétition, which was fîled November 2Sth, but sworn to by him
H 1. See Bankruptcy, vol. 6, Cent. Dig. §§ 733, 735,
156 129 FEDERAL REPORTER.
November 13, 1903. On December 28th following he filed his péti-
tion for discharge, and certain of his creditors, within the time allowed
therefor, hâve filed spécifications of grounds in opposition thereto,
which are substantially (i) that the bankrupt has concealed, while a
bankrupt, from his trustée, property belonging to his estate in bank-
ruptcy ; and (2) that he has made a false oath to his schedules attached
to his pétition. From the évidence adduced in support of thèse spéci-
fications it appears that Joseph Breiner, the father of the bankrupt,
died December 26, 1902; that Francis J. Breiner, father of Joseph
Breiner, and grandfather of the bankrupt, died testate in McDonough
county, m, August 18, 1903. On March 9, 1900, the grandfather
made his will, whereby he devised 80 acres of land and bequeathed cer-
tain Personal property to one of his daughters, and the remainder of
his estate, real and personal, in equal shares to six other children (of
whom Joseph Breiner, the bankrupt's father, was one) and the children
of a deceased son; thus leaving to the father of the bankrupt one-
seventh of the remainder of his estate. After the death of the bank-
rupt's father, and on January 13, 1903, the grandfather made a codicil
to his will, the material parts of which are as follows :
"Ist. It is niy will that my former will, executed March 9th, 1900, shall
stand In ail particnlars except as hereinafter nientioned. Slnce my above will
was executed, my son Joseph Breiner departed this life. It Is my will, and
I hereby bequeath said Joseph Bretner's share to the children of sald Joseph
Breiner, after the death of their mother Hester Breiner. During the natural
life of said Hester Breiner my executors are directed to pay to said Hester
Breiner, the income derived from said share, and my executors are directed
to keep said share invested in some secure manuer for that purpose. 2nd.
After the death of said Hester Breiner, my executors are directed to pay to
said children of said Joseph Breiner, their said shares in equal parts share
and share alike."
On August 25, 1903, the executors named in the will of the grand-
father filed the same in the probate court of McDonough county, 111,,
together with a pétition praying that probate thereof be granted. This
pétition recites that the deceased (the grandfather of the bankrupt)
died seised of real estate valued at about $18,000, and possessed of
certain personal property estimated to be worth about $20,000, and
names the heirs of the deceased, with their places of résidence; and
among them is that of the bankrupt. Dallas D. Breiner, his place of
résidence being given as Emmetsburg, lowa. About August 26th the
clerk of the probate court of McDonough county, 111., mailed to the
bankrupt at Emmetsburg, lowa, a certified copy of this pétition, which
recites that October 5, 1903, has been fixed as the time for the hearing
proof of said pétition. The bankrupt admits that he received this
copy through the mails, at Emmetsburg, about September i, 1903 ; and
it appears that the will and codicil were duly proven and admitted to
probate October 31, 1903, at a tenn of court which began October 5,
1903.
In Schedule B-4, attached to the bankrupt's pétition (which we hâve
seen was signed and sworn to by him November 13, 1903), under the
head of "Rights & Powers, Legacies and Bequests," he answers,
"KTone." The bankrupt testified on January 19, 1904, that he is one
of nine children or heirs of the said Joseph Breiner, and entitled to
IN BE BEEINEB. 157
one-nînth of hîs estate ; that his mother, Hester Breiner, was still Hv-
ing, and probably 67 or 68 years old ; that he does not know her exact
âge. He was questioned closely in regard to the above-mentioned
statement in his schedule, and testified that it was true so far as he
knew. In answer to questions as to his knowledge of his grandfa-
ther's will, he says :
"I supposed lïe left a wlll. Don't know positive that he dld. Supposed that,
•,Tith the amount he had, probably he did. Q. Haven't you been informed by
letter from McDonough county, Illinois, that lie did leave a will? A. I had
a letter from Illinois. I thought it was a letter. I don't know what you
would call it. I guess it was a pétition. Q. What information did this paper
give you? A. Well, I couldn't tell you. There was a good deal on that paper.
I couldn't give you a statement of what was on that paper. * * * i haven't
received a copy of my grandfather's will. I sent for it, and waited quite a
while, but dldn't get it. Sent to my uncle, and he said he didn't know what
a copy would cost. ïhat Is the last I heard of it. * * * Q. Did you not,
through hlm or some other source, learn that you had an interest in your
grandfather's estate? A. I don't know as I did. Ali I know about it would
be that my grandfather died, and left what he had. I supposed it would be
left to the family. Q. Plaven't you said to parties in this county that you
had an Interest in that estate, but it was subject to your mother's life estate?
A. I expect I bave said that probably. I said that, if my mother was to die,
I supposed, if there was anything left, I would get my share of it. Q. Didn't
the paper sent you from Illinois inform you that you had an Interest in your
grandfather's estate? A. Well, I don't know for swe that it did or didn't.
I told you before I don't know what was ou that paper ; that is, I don't know
DOW. I think I read the paper I received from Illinois. * * * Q. This
paper did inform you of the amount of your grandfather's estate? A. Tes, sir ;
I think it said what it was. I don't recollect what it was. Q. After you re-
ceived that paper, didn't you know that you had an interest in your grand-
father's estate? A. I bave forgot how the paper read, but I don't see how
I could know neither, because I didn't know, from the way that paper read,
if I understood the paper. I don't say that I understood that paper. I don't
understand the way it reads myself."
Further questions in regard to this paper were not freely nor frankly
answered by the bankrupt, and when requested to produce the paper
he declined to do so, or at least did not do so (claiming that he had
left it at home, some six miles distant from where he was being ex-
amined) until he was ordered by the référée to produce it. In pursu-
ance of siich order, he later produced a duly certified copy of the péti-
tion of the executors for the probate of the grandfather's will. It
gives the estimated value of the estate as hereinbefore stated, is in
writing and print, and gives the bankrupt's name and address in type-
writing as one of the heirs of the testator. The envelope in which it
came to the bankrupt shows that it was received at Emmetsburg Au-
gust 28, 1903, and he says that he got it within two or three days there-
after. The bankrupt was then shown a copy of the will and codicil of
his grandfather, and asked :
"Are you now willing to amend your schedule in the bankruptcy proceedings,
and add the legacy herein bequeathed to you, and list It as one of your assets?
A. Surely, if I hâve a right to. I don't know anything about that paper my-
self, and don't know if I hâve a right to do such a thing."
After conferring with his counsel, he was again asked :
"After having consulted with your attorneys, I will now ask If you wlll pro-
eeed to amend your schedule, and flle the legacy and expectancy deseribed tn
158 129 FEDERAL REPORTER.
the codicil read to you as one of your assets in the bankruptcy proceedings?
A. Tes, sir, I do. Listed It before if I had known it. Wrote for it, but didn't
get it. ïhat is what I wrote for, witli tliat intention."
Cross-examined by his attorneys, he says :
"Q. State whether or not you endeavored to procure and seeure any Infor-
mation concerning your grandfather's estate? A. Wliy, only just by sending
for the will, or sending for a copy of it. I didn't reçoive the copy. Q. You
may state why you sent for tlie wlll. A. I sent for it with the intention of
this bankruptcy proceeding. Q. What did you intend to do in the bankruptcy
proceeding with référence to that will, or your interest, if any you had? A.
I intended to list it. Q. And how long did you wait from the time you re-
cel ved this notice untll you comraeuced bankruptcy proceedings? A. The 27th
of November, I believe, was the day the papers were acknowledged. Q. That
is, from about the Ist of September until the 27th of November? A. Yes, sir.
Q. Did you get any information, directly or indirectly, that you had any in-
terest in the estate of your grandfather? A. Not anything more than what
was on that pétition. * * * Q. At the time you signed the pétition for
bankruptcy and ail schedules thereto attached, did you hâve any intention or
désire to secrète or hide or in any other manner eover up any property in
which you had an interest? A. No, sir."
Afterwards, and on January 29, 1904, an amendment to the schedule
was liled with the clerk as follows :
Amendment to Schedule B-4.
Rights & Powers One of the eight or nine legatees who are
Legacies and Bequests. to inherit their father's share of their
grandfather's estate, now held and to be
held for life by petitioner's mother,
supposed valuation $500.00.
This amendment was not verified, and no leave was asked or granted
to file the same. No explanation is made or offered of the failure of
the bankrupt to list this mterest in his grandfather's estate in his orig-
inal schedules, unless it be his equivocal Etalements that he did not
know, when he made such schedules, that he had such interest.
It satisfactorily appears from this testimony that at the time the
bankrupt made and filed his pétition he had an interest, as legatee un-
der his grandfather's will, in the latter's estate. That he knew at
such time that he had such interest cannot, under his own testimony,
be doubted. When his attention was first called to its omission from
Schedule B-4, he says "that his schedule is true, so far as he knows."
The copy of the pétition for the probate of the will which he produced
names him as one of the heirs, and he admits having received this
copy about September ist (six weeks before he signed and swore to
the pétition). Afterwards, in answer to questions by his attorney, he
says that he sent for a copy of the will in order to list whatever in-
terest he might hâve thereunder in this bankruptcy proceeding. This
is inconsistent with the former part of his testimony, in which he en-
deavors to maintain that he did not know that he had an interest un-
der that will. The value of this interest does not appear, except from
the récital in the pétition for the probate of the will. It is a fair infer-
ence, however, from the testimony of the bankrupt, that his grand-
father's estate was of considérable value; and in the amendment to
his schedules which he has filed he says the supposed value of his in-
terest in that estate is about $500. The bankruptcy law is designed
to afi^ord relief to the unfortunate debtor; but to receive the benefîts
UNITED STATES V. MOOBB. 159
of that law in a full discharge from hîs liabilities he must lay before
his creditors ail of his property except such as may be exempt to him
under the laws of the state in which he lives, and make true oath that
he has donc so. If he knowingly fails to do this, a discharge from
such debts will be denied him. The conclusion from the whole testi-
mony is unavoidable that this bankrupt did know that he had an in-
terest in his grand father's estate at the time he made and filed his pé-
tition in bankruptcy ; that he knowingly omitted listing such interest in
his schedules of his property for the purpose of concealing it from
his creditors ; and that he knowingly made a false oath to such sched-
ules in expectation of receiving a discharge from his debts, and after-
wards enjoying the benefits of this property freed from liability for
such debts. The fact that he listed the property after his attempt to
conceal the same and after the making of the false oath by him had
been discovered will not relieve him from the conséquences of such
acts; neither will his déniai, then made, of any intent on his part to
secrète, hide, or otherwise cover up such property. The right to a dis-
charge is forfeited if the bankrupt knowingly conceals his property, or
knowingly makes a false oath in the bankruptcy proceedings; and it
is not restored when his wrongful acts are discovered, or attempts
frustrated.
It follows that the pétition for discharge must be denied, and it is so
ordered.
UNITED STATES v. MOOEE.
(District Court, W. D. Missouri, Central Division. March 22, 1904.)
No. 3,262.
1. PosT Office— NoNMAiLABLE Matteb — Obscène Lettek— Statutes— Con-
STBUCTION.
Rev. St. U. S. § 3893 [D. S. Comp. St. 1901, p. 2658], provides that every
obscène, lewd, or lasclvious bock, pamphlet, wrlting, or other publication
of an indécent character shall be nonmailable. Eeld, that where the nec-
essary inference from the language used in a letter was obscène, and
tended to offend the sensé of decency, purity, and chastity of society,
it was Immaterial that the words used were not themselves obscène.
2. Samb.
A letter was written by a married man to a married woman, not his
wife, whom he had never met, suggesting that he hoped the same would
come to her as "a ray of sunshine on a cloudy day" ; that his attention
had been called to her "by a friend of ours," and asked her to meet him
on an afternoon at the house of an old lady who kept rooms to rent "for
such meetings" ; that his proposition was "ail straight goods," and that
he would be "a good friend" to her, and, though he had never been at
such proposed meeting place, he knew others who had been there, and had
been informed by them that it was "ail O. K." Held, that the purpose
of such letter was an invitation and solicitatlon to the addressee to meet
the writer for illicit intercourse, and was therefore obscène, withln Rev.
St. U. S. § 3893 [U. S. Comp. St. 1901, p. 2658], prohibiting the sending
of any obscène writlng through the mails.
Il 1. Obscène matter as nonmailable, see note to Timmons v. United States,
30 G. C. A. 79.
See Post Office, vol. 40, Cent. Dig. § 50.
160 129 FEDERAL BËPOUTEB.
On Demurrer to Indictment.
William Warner, U. S. Dist. Atty.
C. D. Corum and J. G. Slate, for défendant
PHILIPS, District Judge. The défendant stands îndicted under sec-
tion 3893, Rev. St. U, S., I Supp. Rev. St. p. 621 [U. S. Comp. St. 1901,
p. 2658 ] , for writing and placing, or causing to be placed, in the post
oiifice of the United States at Jefferson City, Mo., an obscène, lewd,
and lascivious letter, of an indécent character. The letter is in words
and figures as follows :
"October 7, 1903.
"Dear Mrs. Thomas: I know you will be surprised to get this letter but
I hope It will be a glad surprise. I hope It will corne to you as a ray of sun-
shine on a eloudy day, I do not know you personally, but I bave heard you
spoken of by a friend of ours. I hâve been wanting to meet you, but so far
hâve failed. I bave taken tbis method of trylng to get acquainted wltb you.
I don't know whether my suggestion vrill meet with your approval or not,
are whether you will want to meet me or not. If you do and will do as I
tell you, we can meet each other and no one will ever know It. And we can
pass some pleasant afternoons together. There is an old lady by the name
of Mrs. Willard that keeps rooms to rent for such meetings. She lives West
of Elston House up stairs on the first iloor over the book bindery. Go up
the stairs between the book bindery and the Saloon. Tell her that you hâve
a 'gentleman friend' that you want to meet there. Say twice a week and
that be is alright, and will treat her right. I bave never been at her place
but I know some parties that go there and they tell me it is ail 0. k. I want
to meet you there at about 3 o'clock Thursday afternoon. You go about 2 :30
and talk to the old lady and get on the good side of her. I want you to be
sitting at the front window with your hat on, so I will know that you are
there and that you want to see me. I will corne up on the opposite side o(
the Street and will tip my hat so you will know it is me comming, and you
<'an meet me at the top of the stairs. This is ail straight goods. And I will
be a good friend to you. If you cannot go on Thursday afternoon, go Friday.
But I will look for you Thursday. Will not siga my name. Will tell you
ail about myself when I see you. A friend.
"Don't fail me."
The défendant has demurred to the indictment on the ground that,
the letter being admitted, it does not come within the purview of the
statute. Reliance for this contention is predicated of the ruling in
United States v. Lamkin (C. C.) 73 f éd. 459. The correctness of the
ruling in that case can be conceded without affecting the validity of this
indictment. The character of the letters upon which that indictment
was based is materially différent from the letter in question. But
the reasoning of the learned judge in his opinion in that case does not
wholly accord with my view of the statute. The trend of the opinion,
if I read it aright, is that unless the language employed in the letter
is per se coarse, obscène, lewd, lascivious, or indécent, although it is
discernible on the face of the letter that it was written for the immoral
purpose of inviting and stimulating illicit intercourse with a woman, it
is not within the denunciation of the statute. It may be conceded that
the forbidden character of the book, pamphlet, picture, paper, letter,
etc., is to be found on its face. If the terms employed do not, in and
of themselves, reasonably convey the suggestion of obscenity, lewdness,
or lasciviousness, they cannot be cked out by évidence aliunde ; that is to
say, the court cannot, with strained eyes, read into the letter a hidden
UNITED STATES V. MOOBE. 161
purpose its lànguage does not naturally import. But ît is as equally
true that the obscène, lewd, lascivious, indécent character of the writing
is not to be made to dépend upon the fact that the lànguage employed
niust be coarse, blunt, and bald. Lànguage is a vehicle of thought.
"Chaste words may be applied so as to be understood in an obscène
sensé by every one who hears them." Edgar v. McCutchen, 9 Mo.-
768. Words, abstractly considered, may be free from vulgarism, yet
they may, by reason of the context, manifest to the intelligent appré-
hension the most impure thoughts, and may arouse a libidinous passion
more effectually in the mind of a modest woman than the coarse ver-
îiacular of the bawd and the pimp. The poison of the asp may lie be-
iieath the honeyed tongue, just as a beautiful flower may contain a
deadly odor. The statute does not say that every bock, pamphlet, pic-
ture, paper, letter, writing, etc., containing obscène, lewd, or lascivious
lànguage, is prohibited to the use of the mails ; but it is the "indécent
character," obscène, lewd, or lascivious in its nature and import, against
which the statute is leveled. In other words, it is the efïect of the làn-
guage employed, conveying obscène, lewd, or lascivious suggestions,
tainted with immorality and impurity, which is struck at by the statute.
Judge Thayer, in United States v. Clarke (D. C.) 38 Fed. 732, in dis-
cussing this statute, when it was directed only against the admission to
the United States mails of books, pamphlets, pictures, papers, writings,
and prints, said :
"ïhe Word 'obscène,' » • • when used, as In the statute, to deseribe
the character of a book, pamphlet, or paper, means containing Immodest and
indécent matter, the readlng whereof would hâve a tendeney to déprave and
torrupt the minds of those Into whose hands the publication mlght fall, whose
minds are open to such immoral influences."
In United States v. Harmon (D. C.) 45 Fed. 414, 417, the word "ob-
scène" was discussed, and, quoting from Chief Justice Cockburn in
Rex V. Hicklin, L. R. 3 Q. B. 360, "where the tendeney of the matter
charged as obscène is to déprave and corrupt those whose minds are
open to such immoral influences, and into whose hands a publication of
this sort may fall, and where it would suggest to the minds of the
young of either sex, or even to persons of more advanced years,
thoughts of the most impure and libidinous character," the court said :
"Rather is the test, what is the judgment of the aggregate sensé of the
community reached by it? What is its probable, reasonable effect on the sensé
of decency, purity, and chastity of soeiety, extending to the family, made up
of men and women, young boys and girls?"
In United States v. Martin (D. C.) 50 Fed. 918, the letter in question
was written by a married man to an unmarried woman, the substance
of which was a solicitation by him to her to take a trip with him to
Lynchburg, Va., with a proposition to pay her expenses and $5 besides,
with the suggestion that, "if you will go, I will promise you a nice
time," and that she would contribute to his happiness, and would
never regret it, etc. The court, after adverting to the foregoing cases
of the United States v. Clarke and United States v. Harmon, said :
"Taking thèse définitions, and applying them to the letters on which this
indlctment was found, the court cannot see how any other construction can
be put upon them, than that they are obscène, wlthin ' the meanlug of the
129 F.— 11
l62 129 FEDERAL EBPOBTEB.
statute. The expressions used In the letters can leave no doubt as to thelr
lewd and lasclvlous charaeter. It is difficult to concelre what can be more
shoeking to the modesty of a chaste and pure-minded woman than the prop-
osition contained in thèse letters. It Is no less than a proposition from a
marrled man to an unmarried woman, proposing a clandestine trip to the eity
of Lynchburg for a grossly immoral purpose."
In Dunlop v. United States, 165 U. S. 486, 500, 17 Sup. Ct. 375, 380,
41 L,. Ed. 799, it appears that the trial court, in charging the jury, inter
alia, said :
"Now, what are obscène, lascivious, lewd, or indécent publications, is large-
ly a question of your own conscience and your ovvn opinion. * * * it must
come up to this point: that it must be calculated, with the ordinary reader,
to déprave hlm, déprave his morals, or lead to impure purposes."
In passing upon this instruction, Mr. Justice Brown, speaking for
the court, said :
"The alleged obscène and indécent matter consisted of advertlsements by
a woman, soliclting and ofCering inducements for the visits of men, usually
'reflned gentlemen,' to their rooms, sometimes under the disguise of 'baths'
and 'massage,' and oftener for the mère purpose of aequaintance. The court
left it to the jury to say whether it was within the statute, and whether per-
sons of ordinary Intelligence would hâve any difflculty in divining the inten-
tion of the advertiser. We hâve no doubt that the flnding of the jury was
correct upon this point."
In United States v. Wroblenski (D. C.) 118 Fed. 496, the court said:
"In either case [that is, of publication or sealed private Istter] the question
of violation of the statute resta upon the import and presumed motive, and
not upon the mère terms of the communication. Thus its tendeney dépends
upon circumstances, and unexceptionable language may convey vicious infor-
mation within the statute. In the case of a private letter there is no publi-
cation, and no presuniption arlses of intention to give public! ty, or that it
wiU be read by others than the addressee. The language or communication
may be free from the condemnatlon of the statute in one instance, while it
would clearly fall within it when addressed to other persons. So the Inquiry
as to the tendeney of the letter must be narrowed to its liabllity to corrupt
the addressee."
Turning to the letter in question hère, what is its plain purport? It
was written by the défendant, admitted to be a married man, to Mrs.
T., with whom he had never met, with the suggestion that he had hoped
his missive would come to her as "a ray of sunshine on a cloudy day" ;
that his attention had been called to her "by a friend of ours."
He expressed some appréhension lest his advance might not meet with
approval. He therefore essays to beguile her by suggesting that if
she will meet him, and "do as I tell you, we can see each other and no
one will ever know of it ; and we can pass some pleasant afternoons to-
gether." Indeed, he suggests broadly in the letter an assignation house
favorable "for such meetings," and enters into détails for signais for
such clandestine meeting ; that, while he has never been on this "hap-
py meeting ground," he knows parties who say it is O. K. ; winding up
with the suggestive assurance that "this is ail straight goods, and I
will be a good friend to you. I will not sign my name. Will tell you
about myself when I see you." Can two intelligent minds reach any
other conclusion on reading this letter than that its purpose was an
invitation and solicitation to Mrs. T. to meet tlie writer for illicit inter-
ELLIOTT V. OANADIAN PACIFIC ET, 00. 163
course? The very secrecy and safety of the method of meetîjig was
calculated to excite in the mind of the addressee libidinous thoughts
and indulgence, if there was any such lurking tendency in her character.
In short, it was a seductive letter — as much so as if the writer had em-
ployed broader and baider indécent expressions for bringing about adul-
terous intercourse with this woman. At ail events, it certainly is a
question for the jury to pass upon, under proper instructions from the
court.
The demurrer is overruled.
ELLIOTT V. CANADIAN PACIFIC RY. CO.
(Circuit Court, D. Vermont. April 5, 1904.)
1. Master and Servant— Railroads—Cae Inspectoes — Wrongftil Death—
Question for Jury.
In an action for the wrongful killlng of a car Inspector by his being
run over by a car started by other cars violently switched against the
same, évidence as to defendant's négligence held to présent a question for
the jury.
2. Fellow Employés— Incompetenct.
Where, in an action for wrongful death of a car Inspector, It was clalm-
ed that his injuries resulted from the négligence of an incompétent brake-
man, évidence tendlng to show that the person actlng for défendant in
employlng such brakeman shortly before the accident was the brakeman's
cousin, and that he had doubt as to the brakeman's proper command of
himself when braking cars, he not having been so previously employed,
was sufficient to justify a flnding that défendant was négligent in em-
ploylng such brakeman.
3. Same— CoNTRiBUTOEY Négligence.
Where, before golng in front of a car to test the knuckle of a coupling,
a car inspector saw an englne and certain other cars a considérable dis-
tance away, and if they had been moved at the ordinary speed of cars in
switchlng they could not hâve reached the car he was inspeeting until
long after he had accompllshed his object, he was not guilty of contribu-
tory négligence as a matter of law in placing himself in front of the car,
whieh might be run against and over hlm.
4. Same— FEDERAL Courts- Défenses.
In an action for wrongful death in the fédéral courts, contrlbutory nég-
ligence is a matter of défense, unless the proof shows an absolute act of
négligence so plaln that the minds of reasonable men would not differ
concerning it.
5. Same— Pleading.
In an action in the fédéral courts for wrongful death, the déclaration
need not allège absence of contrlbutory négligence.
6. Same— Objections after Verdict.
Where the gist of an action for the wrongful death of a car Inspector
was the running of several cars without control, by an incompétent brake-
man, and the déclaration alleg'ed the running of such cars against other
cars, without any proper control, at a hlgh rate of speed, on a down grade,
in charge of but one inexperienced and incompétent brakeman, so negll-
gently, and without proper control, that plalntlff's intestate was suddenly
thrown violently down under the car which he was so inspeeting, dragged
for a long distance, and then killed, it was sufficient as against a motion
in arrest of judgment.
ï 5. See Death, vol. 15, Cent. Dlg. § 62.
164 129 FBDBEAI, KEPORTEB.
7. Same,
Hev. St. § 954 [TJ. S. Comp. St. 1901, p. 696], proT.ldes that no déclara-
tion shall be quashed for any defect or want of form, but the court shall
give judgment according as the rlght shall appear, without regarding
any such defect, except those specially set down as grounds of demurrer,
and that the court shall amend every such defect other than those
specially demurred to, and may at any tlme permit the pleadings to
be amended. Held, that where no objection was made to the déclara-
tion until the close of the évidence, and everything that défendant clainied
should hâve been alleged was proved, and the .iury found the facts in favor
of the plaintiff, a judgment on the verdict v^fill not be set aside for defects
In the déclaration.
At Law. On motions to set aside a verdict in favor of plaintiff
and in arrest of judgment. Motions denied.
Max L. Powell and Wilder L. Burnap, for plaintiff.
Frank E. Alfred and William B. C. Stickney, for défendant.
WHEELrER, District Judge. The plaintiff 's intestate was a car
inspector employed in the defendant's yard at Richford, which was
on an unusual grade for a railroad yard. He went to the lower end
of one of two cars standing on one of the tracks, and held by a
brake, for the purpose of testing the knuckle of the coupling, which
would take but a few seconds. Five heavily loaded cars were sent
down the same track toward thèse two at a! rapid rate, struck them,
pushed them along, and ran them over him and killed him. This
suit is brought for that cause of his death ; and since the verdict the
défendant has moved to set it aside as against the évidence, and
moved an arrest of judgment for the insufficiency of the déclaration.
The ground upon which the plaintiff recovered was the inefFiciency
of the brakeman on the five cars whereby the death was caused.
The intestate was entitled to a reasonably safe place in which to
work, and to reasonably compétent and safe fellow workmen. One
principal ground for setting aside the verdict relied upon is the lack
of suffîcient évidence of the incompetency of the brakeman to the
knowledge of the défendant. The grade of the yard made it a difïi-
cult place for switching cars in making up trains. Whatever lack
of safety there was about that would be well known to the intestate,
who had been employed there for some years ; but the grade of the
yard, according to the évidence, required a more experienced and
efficient brakeman than an ordinary yard would. The proof tended
to show that the brakeman had no proper control of the five cars ;
that they ran at two or three times the usual speed for cars being
switched in that way, and drove against the two cars with great
force, and thereby sent them along the track. This was contra-
dicted, but the effect of it was for the jury.
An important requisite was the control of the cars, which would
include the control by the brakeman of himself. The évidence tend-
ed to show that one who acted for the défendant in employing this
brakeman then lately before, was a counsin of the brakeman who had
not before been employed as such, was acquainted with him, and
had some doubt as to his proper command of himself when braking
on the cars. This was a very important matter for a brakeman who
ELLIOTT V. CANADIAN PACIFIC BT. CO. 165
was to do what this brakeman was doing at the time when the intes-
tate was killed. Lack of control of himself would be a very seri-
ous defect in the ability of a brakeman to properly control cars in
such connections. The évidence in regard to that seemed at the
trial to be sufficient to lay before the jury as to the competency
of the brakeman, and seems so now. The question is not as to how
the court would find the fact, but as to whether there was enough
from which the jury might find the fact, and there seems to hâve
been enough. This brought the defect to the attention of those act-
ing for the company in employing this brakeman, and tends to show
that the company was aware of his actual capacity such as it was.
This is a little différent from what it would hâve been if a compé-
tent brakeman had grown incompétent. Hère the question was as
to hiring a suitable brakeman, which would involve proper inquiry
as to his capacity. There the question would be as to notice of the
failure of capacity.
Another question made is as to contributory négligence of the in-
testate. It is argued that he placed himself at the end of the car,
which might be run against and pushed over him. Unless this was
50 plain that there could be no question about it in the minds of
reasonable men, it would be a question for the jury, and the cir-
cumstances were such that there might well be such a question.
The testing of the knuckle would involve so short a time that he
could easily do it and move away before any cars which were ni
sight would reach the two cars at the ordinary rate of speed for
switching cars. ■ If thèse cars were sent at twice the usual speed,
he would only hâve one-half the usual time; if at three times the
usual speed, he would hâve only one-third the usual time. The com-
ing so much quicker than he expected may hâve misled him into
going there and remaining long enough for testing the knuckle.
The switch engine and the fîve cars were away up the track. At
the ordinary speed of cars in switching, according to some witnesses,
they would move but a few feet — about seven or eight — in a second,
which would give many more seconds before they would reach there
than were necessary to accomplish his object. This is a matter of
défense in this court, which could not be taken from the jury unless
it was an absolute act of négligence, and could not apparently be
properly disposed of without being submitted to the jury as it was.
The motion to set aside the verdict as being against the évidence
must, according to thèse views, be denied.
The principal fault found with the déclaration is the lack of allé-
gations of the incompetency of the brakeman to the knowledge of
the défendant and without the knowledge of the intestate. As con-
tributory négligence is in this court a défense, no allégation of wani
of knowledge or proper conduct on the part of the intestate was
necessary. It would be sufficient to allège in the proper manner
the defect in the brakeman, whereby the injury resulting in death
was caused. The déclaration allèges the running of the five cars
against the two cars negligently, "without any or proper control,
at a high rate of speed, on said down grade, alone and free from
any locomotive or engine, and in charge of an insufficient and of
166 129 FEDERAL REPORTER.
but one inexperienced and incompétent brakeman, * * * and
so negligently, improperly, imprudently, and without control that
the plaintiff's intestate was suddenly, helplessly, and without fault
on his part thereby struck, thrown violently down, and thrown un-
der said car, which lie was so inspecting, and dragged for a long
distance, to wit, ninety feet, by means whereof he was then and
there killed." This is not a technical, artiiicial, and apt statement
of the insufficiency of the brakeman, whereby the intestate was struck.
The question is not as to the correctness, accuracy, and fullness of
the averments, but whether in any, even defective, manner, the sub-
stance of what is necessary to a right of recovery is set out. The
running of the five cars was, of course, the act of the défendant.
The running them in charge of an insufficient, inexperienced, and
incompétent brakeman would involve knowledge of the incompeten-
cy such as would make the défendant responsible for the act of the
incompétent man. The gist of the action was the running of the
five cars without control of any but an incompétent brakeman. What-
ever charged that was a sufficient charge of that negHgent act, and in
that view the déclaration seems, upon this motion in arrest of judg-
ment, to be sufficient to found a judgment upon.
The statute of jeofailes appHcable (section 954, Rev. St. [U. S.
Comp. St. 1901, p. 696]) provides that no summons, writ, déclara-
tion, return, etc., shall be abated, arrested, or quashed for any de-
fect or want of form, but the court shall give judgment according
as the right of the cause and matter in law shall appear, without
regarding any such defect or want of form except those which in
cases of demurrer the party especially sets down, and the court
shah amend every such defect and want of form other than those
the party demurring so expresses, and may at any time permit either
of the parties to amend any defect in the process or pleadings upon
such conditions as it may prescribe.
This saves everything to the party that can be saved. This déc-
laration was not challenged by any demurrer, spécial or otherwise,
and no point was made upon it until the close of the évidence in
the case. It seems to, although in a somewhat defective manner,
hâve stated sufficient of the grounds of the cause of action to war-
rant the taking of a verdict. Upon the submission of the case to
the jury everything that défendant now claims should hâve been al-
leged was laid before the jury, who hâve found the facts for the
plaintifï, and judgment on the verdict now would conform to the
requirements of that statute.
Motions overruled. Judgment on verdict.
UNITED STATES V. ONE BLACK HOESB. 167
UNITED STATES y. ONE BLACK IIORSB et aL
(District Court, D. Maine. April & 1904.)
No. 96.
1. SMUGQLINQ — HORSES AND VeHICLES— FORFEIÏUBES— INTENT OF OWNEB,
Rev. St § 3061 [U. S. Comp. St 1901, p. 2006], makes it the duty of a
revenue offlcer to search any vehicle on whlch he suspects there is mer-
chandise subject to duty, or which bas been introduced Into the United
States contrary to law, whether by the person In possession or upon such
vehicle; and, If such merchandise Is found on the vehicle, the offlcer Is
regulred to seize and secure the same. Section 3062 [U. S. Comp. St 1901,
p. 2007] provides that such vehicle shall be Uablc to selzure and forfel-
ture ; and section 3063 [U. S. Comp. St 1901, p. 2007] déclares that vehl-
cles used by common carriers shall not be subject to forfelture unless It
shall appear that the agent of the carrier in charge of the vehicle at the
time of the unlawful importation or transportatlon was a consenting
party thereto. Helct, that section 3063 should be construed as excludlng
vehicles other than those used by common carriers from its application,
and hence a vehicle owned and let by a llveryman, and used wholly with-
in the United States for the purposes of traasporting llquor lUegalIy
brought across the Canadian border, was subject to selzure and forfel-
ture, though the llveryman had no knowledge of the purpose for which
the team was to be used.
Isaac W. Dyer, U. S. Dist. Atty.
Foster & Hersey, for claimant, Wm. E. Foss.
HALE, District Judge. This case cornes before the court on a
iibel by information of the United States of America against one
black horse, one harness, and one wagon, alleged to hâve been
used by one William Elliott in conveying four bottles of liquor from
the Province of New Brunswick into the Judicial and Collection
District of Houlton, in the District of Maine, and to hâve been so
used at the time of the illégal importation aforesaid.
William E. Foss, of Houlton, appears as claimant for said horse,
harness, and wagon. The case is presented on an agreed statement,
as follows:
"The followlng facts are agreed upon by eounsel, and are found as facts in
the case:
"First The flrst fact found is that the said William Elliott did smuggle the
four bottles of liquor on the 8th day of August 1903, and that said Elliott has
stnee been convicted and sentenced for said act of smuggling.
"Second. That on the said 8th day of August said Elliott hired the horse,
carrlage, and harness, described in the Information, of William E. Foss, the
claimant, who was then and there engaged In the business of a llvery stable
keeper at said Houlton, and in letting horses for hire,
"Third. That said Foss at the time of letting the team to said Elliott had
no knowledge or Information that said team was to be used for any violation,
or to aid in any violation, of the customs revenue laws of the said United States
by said Elliott
"Fourth. That said Elliott, having hired the team as aforesaid, did drive
to a point very near the Une, but on the United States side of It and left the
team in a shed within the United States, and wlthin the town of Houlton.
That said Elliott immediately went over the Une, purchased the four bottles
of liquor, returned. placed them in the carrlage, and started to drive towards
Houlton village. Before he' had completed his return journey the said four
bottles of liquor and the said team were seized, as stated In the Information."
168 129 FEDERAL REPORTEE.
The statutes of the United States (sections 3061-3063, Rev. St. [U.
S. Comp. St. 1901, pp. 2006, 2007]) are as follows :
"Sec. 3061. Search of Vehicles and Persons. Any of the offlcers or persons
authorized to board or search vessels inay stop, search, and examine, as well
wlthout as wlthin their respective districts, any vehlcle, beast, or person, on
which or whom he or they shall suspect there Is merchandise whieh is sub-
ject to duty, or shall hâve been introduced into the United States in any
manner contrary to lavs^, whether by the person in possession or charge, or by,
in, or upon such vehiele or beast, or otherwise, and to search any trunli or
envelope, v^herever found, in which he may hâve a reasonable cause to sus-
pect there is merchandise whieh was imported contrary to law ; and if any
such officer or other person so authorized shall find any merchandise on or
about any such vehlcle, beast, or person, or in any such trunk or envelope,
which he shall hâve reasonable cause to belle ve Is subject to duty, or to hâve
been unlawfully introduced into the United States, whether by the person in
possession or charge, or by, in, or upon such vehlcle, beast, or, otherwise, he
shall seize and secure the same for trial.
"Sec. 3062. Forfeltures. Every such vehlcle and beast, or either, together
with teams or other motive-power used in conveying, drawing, or propelling
such vehlcle or merchandise, and ail other appurtenances, including trunks,
envelopes, covers, and ail means of concealment, and ail the équipage, trap-
pingB, and other appurtenances of such beast, team, or vehlcle, shall be subject
to selzure and forfeiture. If any person who may be driving or conductlng,
or in charge of any such carrlage or vehiele or beast, or any person travelling,
shall willfuUy refuse to stop and allow search and examlnation to be made
as hereln provided, when requlred so to do by any authorized person, he shall
be punishable by a fine of not more than one thousand dollars, nor less than
flfty dollars.
"Sec. 3063. Privlty of Owner. No railway car or engine or other vehiele, or
team, used by any person or corporation, as common carriers, in the trans-
action of their business as such common carriers, shall be subject to forfeiture
by force of the provisions of thls tltle unless it shall appear that the owner,
superlntendent, or agent of the owner in charge thereof at the time of sucli
unlawful Importation or transportation thereon or thereby was a consenting
party, or privy to such Illégal Importation or transportation."
Under the décisions of our courts, this and ail other statutes re-
lating to forfeitures in revenue cases must be construed fairly and
reasonably, to arrive at the intention of the lawmaking body. In
coming to this construction the court must remember that the con-
struction is made in a civil case in a matter relating to forfeiture of
property, and not relating to the punishment of an ofïender. It is
the duty of the court to discover vv^hat was the intention of the
lawmakers in framing this law. This belongs to a class of cases
where the Législature might undoubtedly déclare an act criminal
without respect to the motive of the doer of the act. The courts
hâve repeatedly decided that in respect to statutory offenses an evil
intent is not necessarily an ingrédient. It is then necessary for us
to inquire, not what was the intention of the claimant in this case,
but what was the intention of the lawmaking power. Where the
intention is left in any way obscure, the courts hâve repeatedly said
that the forfeiture of goods for violation of revenue laws would not
be imposed, unless the owner of the goods or his agent has been
guilty of an infraction of the law. Peisch v. Ware, 4 Cranch, 347-
362, 2 ly. Ed. 643 ; United States v. Bags of Kainit (D. C.) 37 Fed.
326; United States v. Certain Celluloïd, 82 Fed. 627, 27 C. C. A.
231 ; United States v. Two Barrels of Whiskey, 96 Fed. 479, 37 C.
C. A. 518; The Lady Essex (D. C.) 39 Fed. 767; Six Hundred and
tJNITED STATES V. ONE BLACK HOBSE. 169
Fifty-One Chests of Tea v. United States, Fed. Cas. No. 12,916;
United States v. Two Horses, Fed. Cas. No. 16,578. In the case of
United States v. Two Barrels of Whiskey, 96 Fed. 479, 37 C. C. A.
518, a full examination of authorities is given, and much light is
thrown upon the gênerai subject of forfeitures in revenue cases.
That case deals with a statute différent from the statutes in the case
at bar. In the statutes which were before the court in that case,
the court found that there was no intention of the Législature to
forfeit property, except the property of owners, on account of the
misconduct of Etrangers over whom the owners could hâve no con-
trol. Such has been the gênerai construction of revenue statutes.
In Eoyd v. United States, 116 U. S. 616, 6 Sup. Ct. 524, 29 L. Ed.
746, the court, Mr. Justice Bradley, says :
"We are clearly of the opinion that proeeedings instituted for the purpose
of deelaring forfeiture of a man's property by reason of an offense committed
by him, though they may be civil in form, are by their nature criminal.
« * * The Information, though technically a civil proceeding, is in sub-
stance and effect a criminal one. It is bis breach of the law which has to be
iiroved to establish the forfeiture, and it is his property vrhich is sought to be
forfeited. • * * Goods, as goods, cannot ofCend, forfeit, unlade, pay du-
ties, or the like; but men whose goods they are."
In this case, and in the cases which we hâve cited, the court was
able to find some language in the statute which enabled it to con-
strue such statute as implying that the Législature did not intend to
forfeit the goods, unless knowledge was shown on the part of the
owners. It is claimed that in the case at bar the court should find
that thèse statutes above quoted should be so construed as to mean
that the claimant of goods must be charged with knowledge that
his property is to be used in a manner offensive to the statutes, and,
further, that it is not enough for the court to find that the property
has been used in transporting smuggled property, but that, in order
to create a forfeiture, the horse, wagon, and harness must be found
to hâve assisted in the importation itself of the property. By the
agreed statement it appears clearly that the horse, wagon, and har-
ness were used in the transportation of the liquors within the United
States, and not in bringing them over the line; and, further that
they were used without the knowledge or consent of the owner.
Now, let us examine the statutes. Section 3061 makes it the duty
of the revenue officer to search any vehicle on which he suspects
there is merchandise subject to duty, or which has been introduced
into the United States contrary to law, whether by the person in
possession or upon such vehicle; and if the officer shall find mer-
chandise on such vehicle which he shall hâve reasonable cause to
believe is subject to duty, or to hâve been unlawfully introduced into
the United States, whether by the person in charge of the vehicle
or upon the vehicle, or otherwise, then he, the said officer, shall
seize and secure the same. The clear intention of Congress in mak-
ing this law was to provide for the seizure of property which had
been smuggled into the United States, either by the person in charge
of it or upon the vehicle. Upon any reasonable and.fair construc-
tion of the statute, it was clearly the intention of the Législature to
seize a vehicle which has been used either in the importation or the
170 129 FEDERAL EBPOBTBB.
transportation of smuggled property. Indeed, this clear intention
of the Congress is gathered without recourse to "construction," but
by a reading of the unambiguous language of the law. Where "there
is no ambiguity, there is no room for construction." U. S. v. Mor-
ris, 14 Pet. 464, 10 L,. Ed. 543. The above case is cited with ap-
proval in the opinion in the Northern Securities Case (just pub-
lished, by the Suprême Court) 24 Sup. Ct. 436, 48 L. Ed. .
Section 3062 provides that "such vehicle," namely, a vehicle which
has been found by an officer to be in use in transporting or convey-
ing smuggled property, shall be Hable to seizure and forfeiture.
This statute should be construed, as ail such statutes should be,
with a view of giving the full force to ail the language of the stat-
ute, under the principle that words are to be taken in a statute or
in a contract under the rule of noscitur a sociis. The meaning of
words is undoubtedly to be derived from the company in which they
are found; but when this rule is applied in the interprétation of
thèse statutes, no construction can be arrived at which is favorable
to the claimant's contention. The duty of the officer in seizing is
to seize property which is subject to duty, or has been introduced
into the United States in any nianner contrary to law. This statute
is not one of the laws where doubt can be found as to the intention
of holding ofïending property which has been used in smuggling
without the knovvledge of the owner. In such cases of doubt the
courts hâve properly given the construction favorable to the clami-
ant, and hâve imported the claimant's knovvledge into the statute.
In the statutes which are now before us in the case at bar, the court
cannot fînd that there is any room left, after an intelligent reading of
the law, to import such knowledge of the claimant into it.
Section 3063 provides that, in case of vehicles used by common car-
riers in the transaction of their business, such vehicles shall not be
subject to forfeiture, unless it shall appear that such agent of the com-
mon carrier in charge of the vehicle at the time of such unlawful im-
portation or transportation was a consenting party to the illégal
importation or transportation. This section is very important in ar-
riving at the intention of Congress in référence to the whole law
before us. It provides distinctly that common carriers should be
charged with knowledge before their property can be forfeited. The
Législature has clearly shown that it did not hâve such intention
with référence to the vehicles of others besides common carriers.
The rule "Expressio unius, exclusio alterius," is very important in
the construction of statutes of this nature. The Congress has shown
clearly in thèse statutes before us that it regards property as of-
fending when used not only in the importation, but in the trans-
portation, of smuggled goods. The case at bar is like the case of
United States v. Two Bay Mules (D. C.) 36 Fed. 84, although the
statute in this case makes the contention of the government much
more reasonable than in the Case of the Two Bay Mules.
The court has well said, in such case, that "Congress has been induced
to enact very comprehensive, spécifie, and stringent measures for the
prévention and punishment of frauds" in revenue matters. The law
which we are construing in the case at bar is much more comprehensive
THE SOUTHWAEK. 171
and stringent than the law -which was being enforced in the Case of
the Two Bay Mules. In this case, as in that, the redress of the inno-
cent claimant must be from the wrongdoer himself, or by application
to the officers of the government invested with the authority to remit
forfeitures. It is the clear duty of the court, although it may seem
a harsh one, to construe the law reasonably and fairly, giving clear
effect to the ordinary use of the English language.
Let a decree of condemnation be drawn in conformity with this
opinion.
THE SOUTHWARK.
(District Court, E. D. Pennsylvania. March 10, 1904.)
No. 16.
1. Admiealty— StriT in Rem— Recoveey of Interest and Costs fbom Claim-
ant.
The claimant of a ship who eontests a suit in rem against it to recover
damages, wàether for a maritime tort or for breach of a contract of car-
riage, is liable for interest and costs, although the damages awarded to
the libelant, together with the interest, may exceed the amount of the
stipulation given for the vessel's release; the decree in such case to be
entered against the stipulators to the extent of their contract liabillty,
and against the claimant for the remainder of the interest and the costs.
2. S AME.
A libelant Is not precluded from as.serting his right to recover Interest
and costs from the claimant in a suit in rem, in excess of the stipulation
given, by the fact that hls application for leave to amend his llbei by in-
serting a claim in personam for the damages sued for was denied on the
ground of lâches.
In Admiralty. On motion for entry of decree.
See 128 Fed. 149.
Horace L. Cheyney and John F. Lewis, for libelant.
Biddle & Ward, J. Rodman Paul, and Howard H. Yocum, for re-
spondent.
J. B. McPHERSON, District Judge. Unless the présent case
can be distinguished from The Wanata, 95 U. S. 600, 24 L. Ed. 461,
I think the libelants are entitled to a decree against the claimants
for the damages agreed upon, and for interest and costs, even al-
though the amount of such decree exceeds the sum named in the
stipulation. The decree against the surety, however — the City Trust,
Safe Deposit & Surety Company — is to be limited to the principal
sum for which it agreed to be bound. An effort is made to distin-
guish the cases, first, on the ground that The Wanata was an action
for collision, in which the claimant was taking advantage of the stat-
ute permitting a limitation of liability; and, second, on the ground
that permission to amend so as to prosecute the présent action
against the claimants in personam has been refused on the ground
of undue delay, and therefore that the libelant should not be per-
mitted to accomplish, by this form of motion, what the court has
denied him permission to accomplish by another.
As it seems to me, neither ground is well taken. The reasoning
172 129 FEDEBAIi REPORTER.
of the court in The Wanata was intended, I think, to cover other
actions than those of collision, for there is no eiïort to confine it
to torts of that class, where the claimant is seeking to limit his lia-
bility. In that case the damages awarded, $16,000, were precisely
the amount of the stipulation for value, but the District Court added
interest and costs thereto in the decree that was entered against the
offending schooner. No decree was entered in the District Court
against the stipulators for costs or the stipulators for value, the sign-
«rs of each stipulation being the same persons, and thèse uniting
also in an appeal bond for the sum of $2,000. In the Circuit Court,
on appeal, a decree was entered against the schooner, and at the
«ame time the court (page 608, 95 U. S., 24 L. Ed. 461) "entered a
decree against the stipulators for value in the sum of $16,000, and
against the stipulators in the other stipulation and the sureties in
the appeal bond in the sum of $1,407.47, the two sums being exactly
equal to the amount of the decree entered against the schooner,
which includes the $16,000 recovered as damages in the District
Court, together with the costs taxed in the District Court, and in-
terest on the sums recovered in that court to the date of the decree
entered in the Circuit Court, and the costs taxed in the Circuit
Court, amounting in ail to the sum of $17,407.47." Thereupon the
claimants, who were also among the stipulators, appealed to the
Suprême Court, and one of the positions taken by the libelants^ap-
pellees — was (page 612, 95 U. S., 24 L. Ed. 461) "that the owners
defending the suit are liable for costs, even where the damages are
equal to the stipulated value of the property, and the costs taxed
exceed the amount of the stipulation for costs fîled when the owners
appeared in the District Court." The Suprême Court approved this
position, saying: "Doubtless the rule was so prior to the passage
of the act of Congress limiting the liability of shipowners. 9 Stat.
635. Since the passage of that act the question arises whether costs
can be allowed in such a case, where it appears that the decree for
damages exhausts the whole amount of the stipulation for value."
Référence is then made to the British statute upon the subject of
limiting liability, and to the cases, such as The Volant, i Rob. A.
383, which hâve held that, where the proceeds of the ship were in-
sufficient to make good the loss, "the court cannot decree against
the owner for the excess of damage beyond the proceeds of the
ship." And it is then said that, although this may be true, "it is
settled law that the defending owners in such a case are liable for
costs, even though the damages recovered exhaust the whole amount
of the stipulation for value." The John Dunn, i Rob. 160.
Turning to the subject of interest, the court proceed to say (page
613. 95 U. S., 24 L. Ed. 461) : "Interest in such a case is allowed,
as well as costs ; and in case of an appeal, the interest is cast upon
the whole amount of the decree in the court below, including costs,
as well as the amount of the damage. The Dundee, 2 Hagg. 137."
Referring further to The Dundee, the court approve the rules there
laid down by Lord Stowell :
"Due objection to a decree settled In that form was made In that case ; but
Lord Stowell held that the allowances were correct, that the cost to which
THE SOTJTHWARK. 173
the party la put to recover his Just damages Is a part of his loss, and that
the costs In such a case are properly added to the damages in the computation
of interest. Objection was also made in that case to the allowance of inter-
est, as the damages were equal to the value of the ship ; but the same learned
judge answered that the sufferer Is entitled to such costs as he shall incur in
recovering the value of the ship, and to interest if payment Is delayed — mean-
ing, of course, that the party causing the delay is liable in such a case ; and
he added that the suffering party is entitled to rémunération for the costs to
whlch he is driven for recovering his loss, as the costs constitute a part of the
same ; that the act of Parllament is not gullty of the injustice v^fhich would
ensue if it exeluded the costs, which are necessary for replacing the sufferer
In a just State of compensation. Such a party, if he is reinstated in the value
of the property without litigation, is not entitled to costs ; but if he cannot
obtain the benefit of the régulation in respect to compensation without being
driven to the necessity of a suit, the statute would be chargeable with great
injustice if it did not allow him to recover costs ; and thèse remarks apply
with equal force to the charge of intervenlng interest arising from delay occa-
sioned by such litigation.
"Common-law authorities support the same construction of the act of Par-
liament referred to, and show to a démonstration that the rule is flrmly es-
tablished in ail the courts of the parent country. Ex parte Rayne, 1 Gai. &
Dav. 377 ; Gall v. Laurle, 5 B. & C. 163."
From this outline of the relevant portions of the opinion in The
Wanata, I think it will be seen that the court's discussion proceeded
along gênerai lines, and was not intended to apply solely to the
class of maritime torts. No principle is perceived that requires the
rule announced by the court to be so limited. If the libelant has
been injured, what différence does it make whether the harm has
been done by sinking his ship, or by breaking a contract to carry
safely? In either event he has suffered a money loss, and whatever
rule may exist that seeks to make him whole, so far as possible, in
the one case, ought also to be applied in the other.
The second ground of objection, as it seems to me, is also not
tenable. I refused the motion to amend the libel, because the great
weight of authority seemed to be in favor of refusai, and I was un-
willing to départ from a well-estabHshed rule. But the présent ap-
plication seems to be supported by the highest authority in the land,
and, while it is true that I hâve a discrétion on this motion also
(The Maggie J. Smith, 123 U. S. 349, 8 Sup. Ct. 159, 31 L. Ed. 175),
I am disposed to exercise it in favor of the libelants. The same
reason that influenced my décision on the pétition to amend, namely,
that décisive authority is on the side of the appellant, influences me
now, and supports the position that the libelants should be compen-
sated in fuU, so far as the power of the court may go, for the loss
they hâve sustained, and for the cost of carrying the litigation to an
end. The fact that the libelants will thus obtain by one method
what they were unable to obtain by another does not seem to me to
be important. Both remédies were available if the court permitted;
the remedy by amendment and suit in personam, and the remedy by
such a decree as is now asked for. Thèse remédies were not dépend-
ent upon each other, and the considérations that are pertinent upon
the subject of their allowance are not the same. It is not accurate,
I think, to say that the libelants ask the court to do indirectly what
the court has just refused to do directly. Doubtless the same resuit
will be reached, but it will be reached directly, although by another
174 129 FEDERAL BEPOETER.
road than the road of amendment. I can see no reason vvhy thèse
two remédies may not be successively invoked.
The following decree will be entered :
And now, the mandate of the Suprême Court of the United States
having been fîled, directing a reversai of the decree of this court
dismissing the libel, and directing a decree to be entered in favor
of the Hbelants for the amount of damages sustained with costs ;
and it further appearing, by agreement of the proctors for the par-
ties fîled of record, that the damage sustained by the libelants for
the cause of action set forth in said libel amounts to the sum of
$6,036, with interest thereon from August i, 1894, and that the li-
belants' costs amount to the sum of $711.16; and it further appear-
ing to the court that the interest upon the said sum of $6,036 to date
amounts to the sum of $3,473.72, making the total claim of the libel-
ants $9,509.72; and it further appearing that the claim was made
for said steamship Southwark by H. C. Bye, agent of the Interna-
tional Navigation Company, owner of said steamship, and that an-
swer to the libel was filed by the said International Navigation Com-
pany, owner of said steamship, and that the payment of the libelants'
claim has been contested and resisted by the said International Navi-
gation Company up to this time :
Now, upon motion of Horace L. Cheyney and John F. Lewis,
proctors for the libelants, the damages of the said libelants are here-
by assessed at the sum of $9,509.72, being the amount of said claim,
as set forth in the libel, together with interest thereon from August
I, 1894, to this date; and it is ordered and decreed that Joseph J.
Martin, Alfred M. Fuller, and Thomas B. Shriver, copartners trad-
ing as Martin, Fuller & Co., libelants, shall hâve and recover from
the City Trust, Safe Deposit & Surety Company and H. C. Bye,
agent of the International Navigation Company, stipulators, the sum
of $7,500, being the said sum of $6,036 damages, with the sum of
$1,464, a portion of the interest thereon; and that the libelants shall
further hâve and recover of the International Navigation Company,
owner and claimant of said steamship Southwark, the sum of $2,-
009.72, being the balance of said interest ; and shall further hâve and
recover of said International Navigation Company their costs,
amounting to the sum of $711.16. And it is further ordered and de-
creed that this decree shall bear interest from its date at the rate of
6 per cent, per annum.
SAMUEL H. COTTRBLL & SON T. SMOKELESS FUEL CO,
(Circuit Court, E. D. Virginia. January 16, 1904.)
Sales— CoNTBACTS— Excuses foe Ii'ailuke to Delivee.
Where a contract for the sale of sucli eoal as the buyer might need,
approximating 3,000 tons, during the year from April 17, 1902, to April
17, 1903, contained a provision that dellveries should be subject to strikes,
accidents, interruptions to transportation, and other causes beyond the
seller's control, the existence of a miners' strike did not avoid the con-
tract, but only suspended its opération during such strike.
SAMUEL H, COTTRELL A SON V. 8M0KELESS FUEL 00. 1T5
2. Same—Damages.
Where défendants agreed to dellver such coal as plalntlff should need
between April 17, 1902, and Aprll 17, 1903, approximating 3,000 tona, in
such quantities and at sueh times as plalntlff should direct, except that
dellveries should be subject to strikes, and by reason of a strike deliveries
were prevented from June 7, 1902, to March 1, 1903, and plalntlff only
demanded two car loads after that date, plalntlff could only recover dam-
ages on such amount
In Assumpsit for Breach of Contract.
On the 17th day of Aprll, 1902, the Smokeless Fuel Company entered Into
a contract with S. H. Cottrell & Son, by which the fuel Company agreed to
furnish and dellver to Cottrell & Son, at Rlchmond, Va., ail of the New River
R. O. M. steam coal from Oollins Colliery Company, they mlght need from the
17th of Aprll, 1902, to April 17, 1903, approximating 3,000 tons, more or less,
and to ship the same in such quantities and at such times as Cottrell & Son
might from time to time direct durlng the continuance of sald contract, at
priées therein mentloned, but subject to the following provision: "Deliveries
of coal under this contract are subject to strikes, accidents, interruptions to
transportation, and other causes beyond the control of the party of the first
part [the fuel company], which may delay or prevent shipment" Cottrell &
Son called for and received under said contract up to the lOth day of June,
1902, a total of 563 tons, at the price of $2.57 per ton, the contract price. On
the 7th day of June, 1902, there was a gênerai strike throughout the mining
district, including the mines from which the coal under this contract was to
be sbipped. From that time on no coal was shlpped to Cottrell & Son durlng
the continuance of the contract, though during the pendency of the strike they
frequently called for the same; and after it ended, and durlng the running
of the contract, made one request of two car loads of coal, none of which
was furnished. This action was brought to recover damages for breach of
the contract for failure to furnish the undelivered 2,437 tons of coal thereun-
der, said damage being estimated on the average of ruling priées for such
coal from November, 1902, to April, 1903, which showed a loss to Cottrell &
Son of fl.74i/i per ton, as they claim, and for which the verdict of the jury
was rendered in their favor.
Henry R. Pollard, for plaintiffs.
Sands & Sands, for défendant.
WADDILL, District Judge. This case is now before the court up-
on a motion to set aside the verdict of the jury rendered herein on the
2d day of December, 1903, because, among other things, it is contrary
to the law and the évidence, and unsupported by the évidence. After
mature considération of said motion, having carefuUy reviewed the
évidence and heard the arguments of comisel thereon, the conclusion
reached by the court is that the verdict rendered in favor of the plain-
tiffs should be set aside, because the same is unsupported by and con-
trary to the évidence. The crucial point involved is whether or not the
conditions at the mines of the défendant during the continuance of the
contract were such as to relieve it from the obligationof the same un-
der the clause in the agreement known as the "strike clause." In other
respects the facts may be said to support the finding of the jury. That
abnormal conditions prevailed durjng the fall of 1902 and the winter of
1902-3 is a matter of common knowledge, and forms a part of the
history of the times ; but reliance need not be had upon this, as the
évidence conclusively establishes that from the 7th of June, 1902, cer-
tainly for a period of four months, conditions at the mines were such
that the ordinary and usual opération of them was eut of the question.
176 129 FEDBKAL REPORTEE.
Indeed, out of 60 mines in the coal district, comparatively few were
operated at ail, and those few under the protection of a military force.
Normal conditions were not resumed until about the ist of March,
1903. This is established by the évidence of the plaintiffs' own wit-
ness Mr. Morris O. Brooks, a gentleman of intelligence, who had ample
opportunity of knowing the conditions existing, and who testified with
such frankness, fairness, and clearness, and showed such familiarity
with the entire situation, that none could fail to be impressed by his
évidence; and as to the conditions mentioned he is fully sustained by
the évidence of the défendant company. At an early stage of the strike
little or no coal was mined, but the défendant never discontinued
work entirely, though conducting its business by means of an armed
force, employed as well at the mines as in the effort to transport coaî
therefrom. The output was comparatively small, and produced at
greatly increased expense ; so muçh so that the coal more than doubled
in value. Even after the return to normal conditions, the cost of
mining and the price of coal were never anything approximating those
existing at the time of entering into the contract. The strike clause ivi
the contract was manifestly inserted for the purpose that when condi-
tions existed wliich placed it beyond the control of the party of the first
part to the contract, the défendant hère, to carry out the same, it shouîd
operate to relieve it from the provisions thereof. That such conditions
did exist during the life of this contract which placed the mining and
transportation of coal in the usual course of business beyond the de-
fendant's power, is too apparent to admit of serious doubt. Indeed,
it is the one thing in which the évidence of the plaintiffs and the défend-
ant concur; and to allow the verdict of the jury to stand based upon
the failure of the défendant to furnish coal during the strike would,
in effect, be to annul that important qualification and condition in the
contract, and to give to it no effect whatever. The language in référ-
ence to strikes is : "Deliveries * * * are subject to strikes, acci-
dents, interruptions to transportation, and other causes beyond the
control of the party of the first part, which may delay or prevent ship-
ments." The existence of the conditions do not avoid the contract,
but only suspend the opération of the same during their pendency,
which in this case was from the 7th of June, 1902, to the ist of March,
1903. For the failure to deliver coal during that period, no recovery
should be had, and the plaintiffs can only recover for such coal as they
called for under their contract, after the restoration of normal condi-
tions at the mines — that is, after the ist of March, 1903, to the I7th of
April, 1903 — which, according to the évidence, consisted of two car
loads ordered by the plaintiffs on the 2d of March, 1903.
The court's attention has been called to the case of HuU Coal & Coke
Co. V. Empire Coal & Coke Co., 113 Fed. 256, 51 C. C. A. 213, which
bears upon the gênerai subject tmder considération, but otherwise
throws no spécial light on this case, as the same turns entirely upon
the sufficiency of the évidence adduced to support the.finding of the
jury.
The verdict, as rendered, will therefore be set aside, and a new trial
awarded herein.
OART BEOS. A HANNON V. MORBISON. 177
CARY BROS. & HANNON v. MOBRISON.
tCircuit Court of Appeals, Eighth Circuit. March 18, 1904.)
No. 1,928.
1. Explosives— Blasting—Right to Use to Gbade Railroad.
Blasting by the use of gunpowder or dynamite is an appropriate and
justifiable mode of removiug rock from the riglit of way of a railroad in
order to bring it to grade, and a railroad company or its grading con-
tractors may lawfully employ it, with reasonable care.
2. Same— Thbowing Rocks upon Neigheoring Pbopebtt— Waening.
Wtiile a contraetor may lawfully use blasting wIth gunpowder or dyna-
mite to remove rock in the right of way of a railroad company, he bas
no right by its use to throw rocks upon persons rightfully occupying or
using neighboring property. Such an act is a trespass, and it Is his duty
to give such persons reasonable warning of coming explosions.
3. Same— Unheeded Waening— Oonteibutoby Négligence.
It is the duty of one who is lawfully using property near to that upon
which another is legally engaged in blasting, and who is warned of a
coming explosion, to use reasonable diligence to escape from danger on
account of it ; and a failure to exercise such care, which concurs in pro-
ducing his injury, walves his right of action for the trespass, and const>
tûtes contributory négligence, which is fatal to his action for damages
for the injury.
4. Contributory Négligence— Question for Jury— Exception.
The question whether or not one is guilty of contributory négligence is
ordinarily for the jury. It is only when the facts which condition the
question are stipulated, or are established by testimony which is free from
substantial conflict, and, the inference from the facts Is so certain that ail
reasonable men, in the exercise of a (air and impartial judgment, must
agrée upon it, that the question of contributory négligence may be law-
fully withdrawn from the jury.
6. Explosives— Blasting— Contributory Négligence— Question fob Juey.
The défendants were lawfully engaged in blasting rock out of the right
of way of a railroad company at a point about 150 feet from a river. The
décèdent was rightfully walking along the bank of the river a short dis-
tance below a point opposite the place of blasting, holding the prow of a
(erryboat away from the bank with a pôle, while the ferryman was walk-
ing ahead of him, puUing the boat up the stream, in the customary way,
preparatory to poling it across. The décèdent had engaged his passage
across the river upon the boat. The custom of the défendants was to
send men out, shouting "Fire," at short Intervais for a period of 12 or
15 minutes before explodiug a charge of gunpowder or dynamite, and the
charges had been so heavy that rocks had fallen ail aroand the place
where the décèdent and the ferryboat were, and had broken llmbs and
stripped foliage from the trees of the forest which intervened between
the right of way and the river, and concealed the boatmen from those en-
gaged In blasting, who were not aware of their présence before the explo-
sion. The décèdent had worked for the défendants, and knew thèse facts
and this custom. Seven witnesses heard the cry of fire 12 to 15 minutes
before the explosion. Three heard it from 2 to 5 minutes before. When
the ferryman heard It, he shouted "Don't shoot," and he and the décèdent
continued to ascend the stream within 200 or 300 feet of the place of
blasting. The ferryman heard It again, and answered it again, and they
continued up the river. The ferryman heai-d it a third time, answered
again, the signal to explode the blast was glven, the charge was fired,
K 2. See Explosives, vol. 23, Cent Dig. §§ 9, 10.
129 F.— 12
178 129 FEDERAL EBPOETEK.
and a rock fell upon the décèdent and killed hlm. The defendant's wlt-
nesses testifled that they dld not hear the cry "Don't shoot."
Held, the question whether or not the décèdent was guilty of contribu-
tory négligence was for the jury.
Thayer, Circuit Judge, dissenting.
(Syllabus by the Court.)
In Error to the Circuit Court of the United States for the Western
District of Arkansas.
G. B. Rose (U. M. Rose and W. E. Hemingway, on the brief), for
plaintiffs in error.
Ira D. Oglesby (W. E. Atkinson and Geo. O. Patterson, on the brief),
for défendant in error.
Before SANBORN, THAYER, and HOOK, Circuit Judges.
SANBORN, Circuit Judge. This writ of error questions the pro-
ceedings at the trial of an action for négligence brought by Mrs. T.
Jane Morrison, the administratrix of the estate of W. L. Morrison,
against Cary Bros. & Hannon, a partnership composed of the défendants
below, which resulted in a judgment against the défendants for $6,000.
In her complaint the plaintiff alleged that her husband, W. L. Morrison,
was killed by a blow from a rock which was carelessly thrown from a
blast by the défendants, who were then engaged in grading the Little
Rock & Et. Smith Railroad. The défendants denied that they weré
guilty of négligence, and alleged that the injury and death of Morrison
were caused by his own carelessness, in that he disregarded warnings
that the explosion was about to occur, and refused or neglected to
seek a less dangerous place. At the close of the trial the court, in effect,
charged the jury that Morrison was free from négligence, and that, if
they believed that the défendants were guilty of carelessness which
caused his injuries and death, the plaintiff was entitled to a verdict.
This instruction is challenged, and its considération nécessitâtes a
review of the facts disclosed by the évidence at the trial, which were
thèse : Cary Bros. & Hannon had been engaged at the place where the
accident occurred in blasting heavy rocks out of the right of way of
the Little Rock & Ft. Smith Railroad Company for about two weeks.
At the place where they were at work the right of way ran east and
west parallel to, and about 150 feet distant from, a river 1,200 feet
wide. The surface of the ground along the right of way was higher
than that of the river, and between them was a forest, which, with its
foliage, made it impossible to see the river from the surface of the
ground along the right of way, although there was testimony that it
was visible from a pile of timber and brush some 20 to 90 feet distant
from the explosion. On the bank of the river, and about 700 feet below
and east of a point upon the river directly south of the place of the
blasting, was a landing place for a ferry ; and between thèse two points,
and about 350 feet from the landing, was a mill. The country was
sparsely populated, and there was but one house, aside from the mill,
within 700 feet of the place of the fatal blast. The contractors had
been using heavy charges of powder, and had thrown rocks in every
direction, some of them 700 feet from the place of the explosion, but
CAET BEOS. & HANNON V. MORKISON. 179
naturally many more had fallen nearer to the place of the blasting
than at a greater distance. Between the place of the explosion and the
river much .foliage had been stripped from the trees, and their limbs
had been broken by falling rocks. The custom of the défendants had
been and was to send their employés ont 12 or 15 minutes before a
charge of powder was to be fired, shouting the word "Fire" at short
intervais, for the purpose of warning ail persons in the vicinity of the
coming explosion, so that they might retire out of danger. Morrison
was a laborer, a farmer, and a minister, who earned annually about $100
by the first, about $300 by the second, and about $75 by the third
occupation. He had been an employé of the défendants at the place of
the explosion within two weeks before the accident occurred, had seen
heavy charges of powder exploded, was aware of their efïeCt, and knew
how the warning of a coming blast was given, and ail the facts which
hâve been recited. The customary method of operating the ferry-
boat at this time was to tow it up the stream, so that the carrent would
not carry it below the opposite landing, and then to pôle it across the
river. But the défendants' witnesses testified that they were not aware
that the ferryboat ever came up along the bank in that way. At a time
when the défendants had a charge of powder nearly ready for explosion,
about 2 or 3 o'clock in the afternoon of October 5, 1902, Morrison came
from the north to the landing place of the boat for the purpose of cross-
ing the river upon it. When the boat was ready to cross the river, it
was loaded with a team of mules, a wagon, and one Davis, the owner
of the mules. Thereupon the ferryman walked up along the north
bank of the river, and dragged the Ijoat after him by means of a rope
attached to it, while Morrison walked along the bank behind him,
and pushed the prow of the boat away from the bank with a pôle.
When they had arrived at a point above the mill, but below a point
opposite the place of the blasting, Davis heard the cry of fire, the ferry-
man shouted "Don't shoot," and they proceeded on their way up the
river. After a short interval Davis again heard the shout "Fire," and
the ferryman again cried "Don't shoot," while they continued on their
way. And after another interval Davis heard the cry of fire again,
the ferryman again cried "Don't shoot," Davis heard the words "Ail
right," the explosion occurred "right then," and a rock from the blast
fell upon Morrison and killed him. The défendants' witnesses testified
that they did not hear the cry "Don't shoot," did not know that Mor-
rison and his companions were near their place of work, and that the
words "Ail right" were addressed to the operator of the battery, and
constituted the signal for the explosion. The course of proceeding of
the défendants and their employés up to this time had been this :
About 12 or 15 minutes before the explosion, men had been sent out,
crying "Fire," and they continued to repeat the cry at short intervais
until the explosion occurred. One of the employés of the défendants
stepped on some logs about 100 feet from the river, faced it, and
shouted "Fire." After he had donc this he walked 500 feet to the bat-
tery before the explosion. Seven witnesses testified that they heard the
cry of fire 12 or 15 minutes before the explosion. Three witnesses
only, and they were on the opposite side of the river, testified that they
first heard the cry from 2 to 5 minutes before the explosion. The
180 129 FEDERAL EEPORTER.
witness Hihes testified that he was sitting on the north bank of the river,
opposite the mill, when he first heard the warning; that this was 12
or 15 minutes before the explosion; that the ferryboat was then no
more than 200 feet above him (and that would hâve been about 150
feet below a point opposite the place of the blasting) ; that he heard
the cry of fire five times, and that after he first heard it he went north
and east 1,000 feet, in order to get out of danger before the explosion
occurred. Yandell, another witness, who was on the opposite side of
the river, and who did not hear the cry until from 2 to 5 minutes of the
explosion, walked 120 feet away from the river after he heard it, and
before the explosion, in order to place himself without the range of
danger. And Prendergast, who was aiso on the other side of the river,
testified that he heard the cry 15 minutes before the explosion, and went
under a shed for shelter. Davis was the only one of the men who
were with the boat at the time of the accident who appeared at the trial,
and he testified that when he first heard the cry of fire the boat was a
little below a point opposite the place of explosion, and that the ferry-
man dragged it up the river two boat lengths, or 90 feet, and commenced
to roU up his lines to start to cross the river before the blast came.
In this State of the évidence the court below instructed the jury,
in effect, that there was no question of contributory négligence for their
considération, and that, if the défendants were guilty of négligence,
the plaintifï was entitled to their verdict. It refused to charge, at the
request of the défendants, that if Morrison was a passenger on the
ferryboat, but was walking along the bank of the river, pushing the
boat from the bank, and if he heard the warning, and made no effort
to get out of danger, but continued to walk along the bank, he was guilty
of contributory négligence. It also refused the request of the défend-
ants to instruct the jury that it was the duty of Morrision, when he was
made aware of the fact that a blast was about to be fired, to use reason-
able diligence to get out of danger. It charged them that it was not
the duty of Morrison to abandon the boat in the event that he was Cross-
ing the river and was a passenger when the warning wa.s given. Thèse
rulings présent the question to be considered in this case.
The railroad company and its contractors, the défendants, had the
right to grade its road along its right of way. The right to accomplish
a resuit includes the right to use the appropriate means to produce it.
In a sparsely settled country, blasting by means of gunpowder or dyna-
mite is a reasonable and justifiable way of removing ledges and rocks
for the purpose of bringing a railroad to a proper grade, and a corpora-
tion and its contractors hâve the right to use this method, provided they
exercise reasonable care to protect others from injury. Dodge v.
County Commissioners of Essex, 3 Metc. (Mass.) 380, 383 ; Whitehouse
v. Androscoggin R. Co., 52 Me. 208; Brown v. Providence, etc., R.
Co., 5 Gray, 35, 40; Blackwell v. Lynchburg, etc., R. Co., m N. C.
151, 153, 154, 16 S. E. 12, 17 L. R. A. 729, 32 Am. St. Rep. 786; Watts
V. Norfolk & W. R. Co., 39 W. Va. 196, 205, 19 S. E. 521, 23 L. R. A.
674, 45 Am. St. Rep. 894; Gates v. Latta, 117 N. C. 189, 190, 23 S. E.
^7Z> 53 Am. St. Rep. 584; Mitchell v. Prange, iio Mich. 78, Çi-j N. W.
1096, 34 L. R. A. 182, 64 Am. St. Rep. 329.
While a railroad company has the right to blast rock from its right
CAET BEOS. & HANNON V. MOERISON. 181
of way by means of gunpowder or dynamite, it has no right, without
warning, to throw rocks upon persons who are lawfully occupying or
using neighboring property, and such an act is a trespass. Sullivan v.
Dunham, i6i N. Y. 290, 55 N. E. 923, 47 L. R. A. 715, 76 Am. St. Rep.
274; Hay V. Cohoes Co., 2 N. Y. 159, 51 Am. Dec. 279; Wright v.
Compton, 53 Ind. 337; St. Peter v. Denison, 58 N. Y. 416, 423, 17 Am.
Rep. 258; Colton v. Onderdonk, 69 Cal. 155, 159, 10 Pac. 395, 58 Am.
Rep. 556.
It is, however, the duty of one who is lawfully using neighboring
property, and who is warned of a coming explosion by another, who
is rightfully engaged in blasting, to use reasonable diligence to escape
f rom danger from the approaching explosion ; and a failure to exercise
such care, which concurs in producing his injury, waives the right of
action for the trespass, constitutes contributory négligence, and is fatal
to an action for the recovery of damages on account of the injury.
Sullivan v. Dunham, 10 App. Div. 438, 440, 41 N. Y. Supp. 1083 ;
Wright V. Compton, 53 Ind. 340, 341 ; Graetz v. McKenzie (Wash.)
35 Pac. 377, 378 ; Mills v. Wilmington City Ry. Co. (Del. Super.) 40
Atl. II 15; 2 Shearman & Redfield on Law of Négligence, § 688a.
In the case at bar, therefore, the défendants had the right to remove
the ledges and rocks from the right of way of the railroad company by
explosions of gunpowder or dynamite. The décèdent, Morrison, had
the right to walk along the bank of the river for the purpose of accom-
panying the boat to its starting point, and crossing upon it to the oppo-
site side. It was the duty of the défendants to warn Morrison and
every other person within the circle of danger of the coming explosion
they were about to cause. It was the duty of Morrison and of every
one thus warned to exercise reasonable diligence to escape from the
danger from the explosion and from the threatened injury, and if they
failed to exercise this diligence, and their failure contributed to their
injury, it was fatal to an action for damages on account of it. The
évidence is conclusive that Morrison was warned of the danger, and
the conclusion is inévitable that the court below fell into an error when
it refused to instruct the jury that it was his duty, after he was thus
warned, to exercise reasonable diligence to escape from the threatened
injury, unless the necessary déduction from the undisputed évidence
was such that ail reasonable men, in the exercise of an impartial judg-
ment, would be compelled to conclude that he exercised reasonable care
or diligence to escape from the impending danger. The question of
contributory négligence, like every question of négligence, is ordinarily
for the jury; and it is only when there is no substantial conflict in the
évidence which conditions it, and when, from the undisputed facts, ail
reasonable men, in the exercise of a fair judgment, would be compelled
to reach the same conclusion, that the court may lawfully withdraw it
from them. St. Louis, I. M. & S. R. Co. v. Leftwich, 54 C. C. A. i,
2, 1 17 Fed. 127, 128 ; Railroad Co. v. Jarvi, 3 C. C. A. 433, 53 Fed. 65 ;
Pyle V. Clark, 25 C. C. A. 190, 192, 79 Fed. 744, 746 ; Railroad Co. v.
Ives, 144 U. S. 408, 417, 12 Sup. Ct. 679, 36 L. Ed. 485 ; Railroad Co.
V. Converse, 139 U. S. 469, 11 Sup. Ct. 569, 35 L. Ed. 213.
In the case at bar neither of thèse conditions existed. The évidence
which conditions the question of contributory négligence is not free
182 129 FEDERAL BEPOBTEB.
from substantial conflict, and, if the view of it most favorable to the
défendants is taken, as it must be in this case, where the instruction
which took the question from the jury was for the plaintiff, reasonable
men might well conclude that the décèdent was net free from négligence
which contributed to his injury. The crucial fact in the case is the
time when Morrison first heard the cry of fire. That time is not fixed
by the testimony of any witness, but it must be found from the évidence
of the witnesses who heard the cries. No one testifies when Morrison
first heard them. The great prépondérance of the testimony is that
the shouts of fire were made at short intervais for a period of from 12
to 15 minutes before the explosion. Seven witnesses heard them at
least 12 minutes before the blast was fired. One of thèse witnesses was
about 200 feet below Morrison, on the same bank of the river, and
another was on the opposite side of the river, 2,200 feet from the place
of the explosion. Three witnesses who were on the other side of the
river testified that they first heard the cry of fire, and the ferryman's
answer, "Don't shoot," from 2 to 5 minutes before the explosion. The
natural and rational inference from ail this testimony is that the shouts
of fire were given for at least 12 minutes before the blast, but that the
three witnesses on the other side of the river did not hear the earlier
shouts. Did Morrison first hear the warnings when the seven witness-
es, many of them farther from the place of blasting than he was, first
heard them, or when the three witnesses on the other side of the river
first perceived them? The évidence is certainly ample to sustain a
finding that Morrison first heard them when the majority of the wit-
nesses first perceived them, 12 or 15 minutes before the explosion. The
prépondérance of the évidence points to that conclusion. If he heard
this warning 12 or 15 minutes before the explosion, ail reasonable
men would not be compelled, in the exercise of a sound judgment,
to conclude that remaining within the circle of danger, or advancing
into greater danger, when he was on the bank of the river and free to
escape from ail danger, was the exercise of reasonable care or diligence.
Again, there is sufiicient évidence in this record to warrant a finding
by the jury that the ferryboat was at least 150 feet below a point oppo-
site the place where the explosion occurred when the ferryman first
cried "Don't shoot." Three witnesses testify that this cry was first
heard by them from 2 to 5 minutes before the explosion. Davis says
that the ferryman was walking fast, drawing the boat up the river,
and then rolling up his lines to start across the river, during this time.
A man walking slowly — walking only 3 miles an hour — travels 528
feet in 2 minutes ; and the boat sank only 800 feet above the landing,
and not more than 100 feet above a point opposite the place of blasting.
Davis testifies that the boat was a little below a point opposite the place
of the explosion when he first heard the cry of fire. Hines says that it
was at least 150 feet below that point when he first heard the cry, and
that he was within 200 feet of it. Davis says that the boat went
about 90 feet after he first heard the warning, and the testimony of
two witnesses on the other side of the river is that the boat seemed to
be about opposite the place of the blasting when they first heard the
cry "Don't shoot." But Davis' estimâtes of distance were demon-
strated by the measurements to be erroneous. He thought the dis-
CAET BROS. A HANNON V. MOBEISON. 183
tance from the place of the explosion to the point where the boat sank
was 450 feet. It was 198 feet. He said he heard the first cry of fire
about 900 feet above the landing. But the distance from the landing
to the place where the boat sank was only 800 feet. Thus it appears
that the évidence was substantial and sufficient to sustain a finding
that the boat was 150 feet below the place of blasting when the ferry-
man first cried "Don't shoot," and when Morrison must hâve been
aware of the danger.
Moreover, wherever the boat may hâve been, there were at least 2
minutes — time enough for one to go on a slow walk 528 feet, and on
a brisk walk 700 feet, after the ferryman first cried "Don't shoot,"
and before the explosion occurred. It was only about 700 feet from
the point on the river opposite the place of blasting to the landing.
Every step down the river, away from the place of explosion, dimin-
ished the danger of in jury. Every step towards it increased the dan-
ger. Would a person of ordinary prudence and diligence under
such circumstances remain in the imminent danger or advance into
increasing danger? Or would he flee from the point of greatest dan-
ger, when every step down the river would diminish the chance of his
in jury? Some reasonable men might well conclude that a person of
ordinary prudence and diligence would, under such circumstances,
move away, instead of advancing toward or remaining near the point of
greatest danger. That was the course pursued by every person within
hearing of the warning, except the men about the ferryboat. Five
of those who thus retired upon hearing the warning were much farther
away from the place of the explosion than Morrison was, and four of
them were on the opposite side of the river. Hines, on the same bank,
200 feet below Morrison, traveled 1,000 feet north and east after he
heard the cry, and before the explosion occurred. Prendergast, 2,200
feet away, on the other side, took shelter under a shed. Yandell,
Pointer, and Travers, on the opposite side of the river, and at least a
quarter of a mile distant, turned and walked farther away. The ferry-
man had the care of his boat. Davis had the care of his mules. Morri-
son had the care of nothing but himself. He was walking on the bank
of the stream, with no responsibility, care, or duty, save the duty to
heed the warning and use ordinary care to retire from the impend-
ing danger. This wfts not a case where the facts which conditioned
the question of contributory négligence were stipulated, or where
they were established by undisputed testimony. It was not a case
where, from the facts which the évidence tended to establish, no rea-
sonable men could hâve rightfully drawn the conclusion that Mor-
rison failed to exercise ordinary care and diligence to escape from
the impending danger after he received the warning of it, and the
question of his contributory négligence should hâve been submitted
to the jury. It was a debatable question — one upon which the minds
of reasonable men might honestly reach opposite conclusions — and
hence one peculiarly appropriate for the détermination of a jury of
men of the vicinage, who are necessarily familiar with the methods
of- life and action in the country where the accident occurred, and
of the course of action which men of ordinary sagacity usually pursue
when they are notified that a heavy charge of powder to blast out
184 129 FEDERAL REPORTER.
rock, which has been falling from such blasts ail about the place they
are occupying, is about to be exploded. The facts were not so clearly
established, nor the inference from them so conclusive, that the court
below should hâve instructed the jury either that if Morrison was a
passenger, and was walking along the bank, pushing the beat away
from thé land with a pôle, when he heard the warning, and made no
efïort to escape, but continued to walk up the river until the explosion,
he was guilty of contributory négligence, or that it was not his duty
to abandon the boat in the event that he was crossing the river and
was a passenger when the warning was given. The court gave the
latter instruction. It was erroneous, because the évidence was undis-
puted that Morrison was not crossing the river when he heard the
warning, but was walking on its bank, and because, when he heard the
warning, he owed no duty to the boat, nor to the men about him, which
was not subordinate to his positive duty to immediately use reasonable
diligence to decrease, and if possible to entirely avoid, the impending
danger.
There are other spécifications of error, but the discussion of those
which hâve been already considered sufficiently indicates the law appli-
cable to the case, and détermines the disposition which must be made
of it in this court.
The judgment below is accordingly reversed, and the case is remand-
ed to the Circuit Court, with instructions to grant a new trial.
THAYER, Circuit Judge (dissenting). The défendants below, who
are the plaintiiïs in error in this court, requested the trial court to give
four instructions on the subject of contributory négligence, ail of which
were refused, and the sole question before this court is whether a ré-
versible error was committed in refusing thèse instructions, or any of
them. The first of the four instructions was as f ollows :
"The évidence shows that at the time of hearing the warning, and until he
was killed, Morrison was not in the boat, but was wallcing on the bank ; that
he was a passenger, and under no obligation to loolc ont for the safety of the
boat or its contents ; and you are instructed that when he heard the alarm it
was his duty to proceed down the bank In search for a place of safety, and
that, if he did not do so, he was guilty of contributory négligence which pre-
cludes of recovery in this case."
The second and third instructions embodied the same idea, namely,
that if Morrison heard the alarm of fire while walking along the bank
ànd poling the ferryboat offshore, and made no effort to get out of
danger after he heard the alarm, he was guilty of contri|jutory négli-
gence.
The fourth instruction was a mère abstract proposition of law, to
the following effect :
"The court, in this connection, Instructs you that It was the duty of the dé-
cèdent, Morrison, when he was made aware of the fact that a blast was to
be fired, to use reasonable diligence to get out of danger."
I hâve not been able to conclude that the refusai of either of thèse in-
structions constitutes a réversible error. The first three of thèse in-
structions were palpably wrong and misleading, in that they ignored
material facts which the testimony for the plaintiff below strongly tend-
CARY BROS. * HANNON V. MOERISON. 185
«d to establish. This testimony was to the effect that no warning of
the blast which was about to be fired was given until the ferryboat
had started on its voyage across the river, and had proceeded upstream
from 150 to 300 yards above the landing; that, when the alarm of
fire was given, the captain of the ferryboat immediately hallooed back
as loud as he could, two or three times, net to fire until the boat got
away, or "Don't shoot until we get away," and that the reply immediate-
ly came back from some person in the vicinity of the blast, "Ail right."
In other words, the testimony for the plaintifï below showed that the
persons on the ferryboat and alongside of it, including the deceased,
were led to believe, by the reply "Ail right," which was made to the
captain's exclamation "Don't shoot," that the firing of the blast would
be deferred until the boat had got ont of danger. Obviously, then, if
such was the fact, and the jury had so found, as they might well hâve
done, under the testimony, it could not be said that the deceased was
guilty of contributory négligence, as thèse instructions declared, be-
cause he did not drop his pôle and search for a place of safety imme-
diately after the alarm of fire was given. The first three instructions
that were asked on the subject of contributory négligence whoUy ig-
nored this phase of the testimony, and the trial court properly refused
thèse requests for that reason.
The fourth instruction, above quoted, stated merely an abstract
proposition of law, giving the jury no précise direction as to what
the deceased's conduct should hâve been on the occasion in ques-
tion. If the deceased heard the alarm of fire, and also heard the
captain's exclamation "Don't shoot," and the response "Ail right,"
and understood from such response, as he probably did, that the blast
would not be fired until the boat was out of danger, no one can say
that he did not exercise reasonable diligence in acting as he did. On
the other hand, if he did not hear such response, and was not given to
understand that the blast would not be fired, the exercise of reasonable
diligence might, in the estimation of the jury, bave required him to act
differently than he did. The fault with this instruction, in my judgment,
was that it was too gênerai in its terms, not adapted to the différent
phases of the testimony, and was not calculated to give the jury any
information concerning their duty in the premises. Instructions ought
always to be adapted to the various hypothèses of fact which may be
found by a jury, and a judgment ought not to be reversed because the
trial court fails to give an instruction, as respects some abstract rule
of law, however accurate it may be, which is not calculated to aid the
jury in reaching a correct conclusion. There is abundant évidence
in the record to support the conclusion that the plaintiffs in error were
guilty of négligence. Indeed, I do not understand that fact to be chal-
lenged by the majority opinion. The testimony shows that the blasts
which they were in the habit of firing from this eut were very heavy.
When fired they showered the surrounding country with rock, and
put the lives of every one who was within the vicinity in péril. It
was shown that only a day or two previous to the accident in ques-
tion a blast had been fired which threw a rock weighing 20 tons en-
tirely across the river. Under thèse circumstances, it was the duty
of the défendants below to hâve taken greater care than they appear to
186 129 FEDERAL REPORTEE.
have taken to ascertain, before firing- a blast, whether ail persons within
the danger line had been duly notified of the expected explosion, and
were in a place of safety, or had been given time to reach a place of
safety. Certainly such blasts as the one in question ought not to be
fired in proximity to a ferry landing, and near a public highway, with-
out taking such précautions as are fully adéquate to protect human life.
In the présent instance the area of danger was so large that if the
décèdent, when he first heard the warning cry, "Fire," had dropped his
pôle and run in any direction, he might not have reached a place where
he would have been any safer than by remaining where he was ; but,
conceding it to be true that it was his duty to have made some effort
to reach a place of safety after he heard the warning cry of fire, yet the
plaintiffs' évidence, if credited by the jury, was of such a character as
excused him from making any such effort. I think that no instruction
on the subject of contributory négligence, such as was requested, ought
to have been given, and that the record discloses no réversible error.
HARGROVE et al. v. CHBROKBB NATION.
(Circuit Court of Appeals, Eighth Circuit February 27, 1904.)
No. 1,866.
1. JUDGMENT— PEKSONS BOUND— PUBCHASEB PENDING SUIT.
In a suit under section 3 of Act June 28, 1898 (30 Stat. 495, c. 517),
whieh authorizes a suit by a tribe In the Indian Territory to recover lands
held by those clalming membershlp In the tribe, but whose membership
or right has been disallowed by the commission or the United States court,
and the judgment has become final, the gênerai rule applles that a stran-
ger cannot, by a conveyance or transfer of possession froin the défendant
pendente llte, acquire any rlghts wbich are not subject to the judgment
subsequently rendered in the suit, whether or not he Is made a party
thereto; and where such a purchaser or transférée Is brought in by an
amended complalnt it Is not neeessary to allège that his membership in
the tribe has been disallowed.
2. iNDiANS— Action to Dispossess Intbudeb on Lands or Tbibe— Notice be-
FOBE Suit.
Act June 28, 1898 (30 Stat 495, c. 517), provides for the bringing of
suits by any tribe in the Indian Territory to dispossess intruders on lands
of the tribe, and authorizes such suit by any member of the tribe where
the chlef or governor fails or refuses to brlng it Section 5 requlres the
party bringing such suit to serve notice on the adverse party to leave the
premises at least 30 days before the suit is conimenced; and by section
2 it Is provlded that when, in the progress of any civil suit in a court of
the territory, it shall appear that the property of any tribe Is afCected by
the Issues, it shall be the duty of the court to make such tribe a party
by service on the chief or governor. Held that, where a suit to dispos-
sess an Intruder was orlglnally brought by a member of a tribe who had
served the requlred notice, such notice was sufficlent, although the Cher-
okee Nation aftervvard joined, and became the plalntlff in the suit
8. Same — Damages fob Détention of Pbopbbty.
Where, In such a suit it appeared that a défendant brought In by an
amended complalnt by an agreemeut wlth the original défendants, ob-
talned possession of the premises and Improvements after the bringing
of the suit and wrongfully wlthheld possession from the tribe, a judgment
may properly be rendered agalnst him for tte damages caused by his
wrongful détention, as well as for possession of the property.
HAEGEOTE V. CHEROKEB NATION. 187
In Error to the United States Court of Appeals in the Indian Ter-
ritory.
For opinion below, see 69 S. W. 823.
An act of Oongress approved on .Tune 28, 1898, entitled "An act for the pro-
tection of people of the Indian Territory, and for other purposes" (30 Stat.
495, c. 517), contains, among others, the followlng provisions:
"See. 2. That when in the progress of any civil suit, either in law or equity,
pending in the United States court In any district in said territory, it shall
appear to the court that the property of any tribe is in any way affected by
the issues being heard, said court Is hereby authorized and required to make
said tribe a party to said suit by service upon the chief or governor of the
tribe, and the suit shall thereafter be conducted and determined as If said
tribe had been an original party to said action.
"Sec. S. That said courts are hereby given jurisdiction In thelr respective
districts to try cases against those who may claim to hold as members of a
tribe and whose membership is denied by the tribe, but who continue to hold
said lands and tenements notwithstanding the objection of the tribe ; and if
it be found upon trial that the same are held unlawtully against the tribe by
those claiming to be members thereof, and the membership and right are dis-
allowed by the commission to the Five Trlbes, or the United States court, and
the judgment has become final, then said court shall cause the parties charged
vv'ith unlawfully holding said possessions to be removed from the same and
cause the lands and tenements to be restored to the person or persons or
nation or tribe of Indians entitled to the possession of the same : provlded al-
ways, that any person belng a non-citizen in possession of lands, holding the
possession thereof under an agreement, lease, or improvement contract wlth
either of said nations or tribes, or any citizen thereof, executed prlor to Jan-
uary first, eighteen hundred and ninety-eight, may, as to lands not exceedlng
in amount one hundred and sixty acres, in défense of any action for the pos-
session of said lands show that he Is and has been In peaceable possession
of such lands, and that he has, while in such possession made lasting and
valuable improvements thereon, and that he has not enjoyed the possession
thereof a sufficient length of tinie to compensate him for such Improvements.
Thereupon the court or jury trying said cause shall détermine the falr and
reasonable value of such improvements and the fair and reasonable rental
value of such lands for the time the same shall bave been occupled by such
person, and if the improvements exceed in value the amount of rents wlth
which such persons should be charged the court. In its judgment, shall speclfy
such time as will, in tlie opinion of tlie court, compensate such person for the
balance due, and award him possession for such time unless the amount be
paid by claimant within such reasonable time as the court shall speclfy. If
the finding be that the amount of rents exceed the value of the improvements,
judgment shall be rendered against the défendant for such sum, for which
exécution may issue.
"See. 4. That ail persons who hâve heretofore made improvements on land
belonging to any one of the said tribos of Indians, claiming rlghts of cltlzen-
ship, whose clalms hâve been decided adversely under the Act of Congress
approved June tenth, eighteen hundred and ninety-six, shall hâve possession
thereof until and including December thirty-flrst, eighteen hundred and ninety-
eight ; and may, prlor to that time, sell or dispose of the same to any member
of the tribe owning the land who desires to take the same in bis allotment:
provlded, that this section shall not apply to improvements which hâve been
appraised and paid for or payment tendered by the Cherokee Nation under
the agreement wlth the United States approved by Congress March third,
eighteen hundred and ninety-three.
"Sec. 5. That before any action by any tribe or person shall be commenced
under section three of this act it shall be the duty of the party brlnging the
same to notlfy the adverse party to leave the premises for the possession of
which the action is about to be brought, which notice shall be served at least
thirty days before commencing the action by leaving a written copy with the
défendant, or, if he cannot be found, by leaving the same at his last known
place of résidence or business with any person occupylng the premises over
188 129 FEDERAL REPORTER.
the âge of twelve years, or, If hls résidence or business address can not be
ascertalned, by leaving the same with any person over the âge of twelve years
upon the premises sought to be reeovered and described in said notice ; and
it there be no person with whom said notice can be left, then by posting same
on the premises.
"Sec. 6. That the summons shall not issue in such action until the ehief or
governor of the tribe, or person or persons brluging suit in his own behalt',
shall hâve flled a sworn eomplaint, on behalf of the tribe or himself, with the
court, which shall, as near as practicable, descrlbe the premises so detained,
and shall set forth a détention without the consent of the person bringing said
suit or the tribe, by one whose membership Is denied by it: provided. that
if the ehief or governor refuse or fall to bring suit in behalf of the tribe then
any member of the tribe may make eomplaint and bring said suit"
Pursuant to the provisions of the foregoing act of Congress, one Claude S.
Shelton, who was an Indian, and a member of the Cherokee tribe of ludiaus,
appears to hâve brought an action against J. S. Hargrove et al., the plaiutiffs
in error, Jn which action the Cherokee Nation subsequently joined as a party
plahitiff. The original eomplaint, which was flled by Shelton, Is not found
in the présent record, but the action so brought was tried, resulting in a judg-
ment in favor of the plaintifEs, whereupon the défendants prosecuted an appeal
to the United States Court of Appeals in the ludian Territory. The latter
court reversed the judgment of the lower court for reasons fully disclosed in
its opinion. Vide Hargrove v. Cherokee Nation (Ind. T.) 58 S. W. 007. On
the return of the record to the lower court, the défendants flled a motion to
dismiss the action, which motion was overruled. The plaintiffs thereupon
asked leave to amend the eomplaint by making oue Samuel H. Conklin a
party défendant, and leave to that efCect was granted. An amended eomplaint
was thereupon flled, and afterwards a second amended eomplaint, on which
the judgment now before this court for review was subsequently rendered.
By the second amended eomplaint Conklin was made a party défendant, and
with leave of court Shelton's name was stricken out as a party plaintifî, so
that the action was thereafter prosecuted to final judgment by the Cherokee
Nation as the sole plaintiff. To this second amended eomplaint the défendants
below, who are the plaintifïs in error hère, interposed a demurrer on the fol-
lowlng grounds : First, that the court had no jurisdiction of the person of the
défendant Conklin, or of the subject of the action as to said défendant Conk-
lin ; second, that the plaintiff had no légal capacity to sue the défendant
Conklin ; third, that there was a defect of parties défendant ; and, fourth, that
the amended eomplaint did not state facts sufBcient to eonstltute a cause of
action. The trial court overruled the demurrer. The défendants declined to
plead further, whereupon a judgment was rendered against them, which was
subseguently afllrmed on a second appeal to the United States Court of Ap-
peals in the Indian Territory (69 S. W. 823), and the judgment which was so
afllrmed is before this court for review on a writ of error.
M. M. Edmiston, for plaintifïs in error.
James S. Davenport, for défendant in error,
Before SANBORN, THAYER, and HOOK, Circuit Judges.
THAYER, Circuit Judge, after stating the case as above, delivered
ttie opinion of tlae court.
As tliere was no trial below except on demurrer, and as the record
contains no bill of exceptions, the questions for considération by this
court are those which arise on the face of the record, and are in the
main those which are presented by the demurrer to the second amend-
ed eomplaint.
The reason assigned in support of the first ground of demurrer,
namely, that the court had no jurisdiction of the case as respects the
défendant Conklin, and no right to render a judgment against him,
HAKGKOVE V. ClIEKOKEE NATION. 189
appears to be this : that the amended complaint contains no allégation
that Conklin's right to the improvements in controversy had been dis-
allowed by the décision of the commission to the Five Tribes, or a
judgment of the United States court in the Indian Territory, which
had become final at the time he was made a party défendant. It is
urged, in substance, that under the provisions of the third section of
the act of Congress above quoted, under which the action is brought,
the court before whom the case was tried had no power to cause Conk-
lin to be removed, and the premises in controversy to be restored to
the Cherokee Nation, until his membership in the tribe "and right" had
been (as the act says) "disallowed by the commission to the Five Tribes
or the United States court, and the judgment had become final" ; and
that, as the complaint showed no such disallowance of his member-
ship and rights by the commission or the United States court, the
lower court had no jurisdiction over him in this statu tory proceeding.
This contention is founded, apparently, upon a misconception of the
reasons which caused the Cherokee Nation to make Conklin a party de-
fendant. Its second amended complaint alleged that the défendants
other than Conklin were claimants to citizenship in the Cherokee Na-
tion, whose claim had been decided advcr.ciy to them by the United
States courts and the Dawes commission, and that the judgment had
become final; that said défendants were, at the time of the institution
of this action, holding the improvements in controversv as claimants
to citizenship in the Cherokee Nation ; that the défendant Conklin, on
or about and since the institution of the suit, had taken possession of
the improvements in controversy jointly with the other défendants —
that is, with the Hargroves ; that he so took possession under an ar-
rangement with the other défendants for the purpose of defeating the
Cherokee Nation of its right to the improvements ; that at the time of
the institution of the présent action Conklin had a suit pending against
the other défendants to obtain possession of the identical improvements
now in controversy; that the Cherokee Nation had filed its interplea
in said case for the protection of its rights; and that subséquent to
the filing of such interplea Conklin, through his attorney, had dis-
missed "his action to recover the improvements from the other défend-
ants, doing so in pursuance of a combination or agreement with the
other défendants for the purpose of holding the improvements in con-
troversy contrary to and against the will of the Cherokee Nation. The
complaint contained another allégation to the efifect that the défend-
ants were at the time in unlawful possession of the lands and improve-
ments in controversy, that they were not the owners thereof or entitled
to the possession, and that the Cherokee Nation was the absolute own-
er, and as such entitled to the immédiate possession of the same.
Fairly construed, thèse allégations of the complaint must be under-
stood to mean that Conklin acquired such possession as he had sub-
séquent to the commencement of the présent action against the other
défendants, who were in possession of the improvement in controversy
when the suit was instituted, and whose claim and right thereto had
been disallowed by the commission, and that such possession as he
had gained was obtained by collusion with the other défendants to pre-
vent the Cherokee Nation from recovering the possession of the im-
190 129 FEDERAL EBPOETER.
provement in thîs action, which was then pending. In view of the
foregoing averments, it is manifest, we think, that Conklin was named
as a party défendant to the second amended complaint iipon the theory
that he could net, by collusion with the Hargroves, take possession of
the land and improvements in controversy subséquent to the institution
of the action, and by so doing defeat the purpose of the suit, although
snch claim to the improvement as he may hâve had had not been dis-
allowed by the commission or the United States courts. This view
of the case appears to us to be well founded. It is a gênerai rule of
law, and one which is absolutelv essential to the effective prosecution
of an action for the recovery of the possession of real property or to
enforce a lien against the same, that one who acquires possession of
property from a person against whom a suit is at the time pending for
the possession thereof or to enforce a lien against the same takes it
subject to the outcome of the pending action, and may be dispossessed
precisely as the person from whom he acquired the possession might
hâve been dispossessed had he retained the possession, whether such
intruder is made a party to the suit and has his day in court or not.
Any other rule would render suits for the recovery of real property in-
efïectual, as they might be defeated by repeated transfers of possession
during the pendency of the action. Tilton et al. v. Cofield, 93 U. S.
163, 168, 23 L. Ed. 858; Whiteside v. Haselton, iio U. S. 296, 301, 4
Sup. Ct. I, 28 L. Ed'. 152; Burleson v. McDermott, 57 Ark. 229, 21
S. W. 222 ; Bailey v. Winn, 113 Mo. 155, 165, 20 S. W. 21. See, also,
Am. & Eng. Ency. of Law, vol. 21 (2d Ed.), p. 595, and cases there
cited. We perceive no reason why this doctrine should not be held
applicable to a case like the one at bar, which is an action by the
Cherokee Nation to recover an intruder's improvement on land belong-
ing to the nation, although it is a statutory proceeding authorized by
an act of Congress. The same reasons exist in such a case as in ordi-
nary cases why an action which is brought by the nation in pursuance
of the statute to recover an improvement, provided it is brought against
the parties who are in actual possession at the time the suit is instituted,
should not be affected, or in any manner interrupted, by a subséquent
transfer of the possession to a third party. The facts alleged in the
complaint as against Conklin are fully admitted by the demurrer, and
inasmuch as it appeared that he acquired possession of the improve-
ment subséquent to the institution of the suit against the Hargroves,
he could hâve been ousted by the nation under a judgment against
them, even if he had not been made a party. VVe are of opinion, there-
fore, that he has no right to complain because he was made a party
and given an opportunity to assert his rights if he had any ; and we
entertain no doubt of the jurisdiction of the court as respects Conklin,
or of its power to enter a judgment against him for the restoration
of the land and the improvements thereon to the Cherokee Nation.
The other objections to the amended complaint, which are specified
in the demurrer, are that there "is a defect of parties défendant," and
that "said amended complaint does not state facts sufficient to con-
stitute a cause of action." The first of thèse objections only chal-
lenges the right of the plaintiff to make Conklin a party défendant,
as it saw fit to do. It therefore présents the same question which has
HAEGROVE V. OHEEOKEE NATION. 191
already been considered and decided. As Conklîn acquîred possession
from the other défendants after the suit was brought, we are of opin-
ion that the Cherokee Nation had the right to make him a party de-
fendant if it thought proper to do so, and that he has no cause for
complaint on that ground.
The next objection — to the sufficiency of the amended complaint —
raises but one question, and that is whether such a notice was given
to the défendants as is required by the fifth section of the act of June
28, 1898, supra. The complaint shows that the original défendants
were served with the statutory notice by the original plaintifï, C. S.
Shelton, but it does not aver that the nation itself served or caused
such a notice to be served on the défendants prior to its becoming a
party plaintiff; and the question to be determined is whether the no-
tice which was given by Shelton is sufificient to sustain the action. The
act of Congress above quoted clearly contemplâtes that actions for the
recovery of intruder's improvements in the Indian Territory shall be
brought by the tribe to whom the lands belong, but the proviso to the
sixth section of the act déclares "that, if the cîiief or governor refuse
or fail to bring suit in behalf of the tribe, then any member of the tribe
may make complaint and bring said suit." The fifth section of the
act in terms permits the party who institutes the suit, whether it be
the tribe or a member of the tribe, to serve the prescribed notice, and
the second section of the act makes it the duty of the court, when it
appears that the property of the tribe is "in any way afïected by the
issues being heard" in a suit pending before it, "to make said tribe a
party to said suit." It further déclares that "the suit shall thereafter
be conducted and determined as if said tribe had been an original
party to said action." Now, if the original action which was brought
by Shelton had come to trial before the Cherokee Nation had elected
to join in the proceeding, it would bave been the duty of the court be-
fore whom the case was tried, under the second section of the act, to
hâve made the nation a party, and in that event it could hardly be
claimed that the nation would hâve been under an obligation to serve
a second notice before it could hâve been made a party and allowed to
take part in the prosecution of the suit. Moreover, the notice which
the fifth section of the act requires to be served is merely intended to
advise the intruder that his claim is contested, and to give him a fair
opportunity to abandon his holding before any costs are incurred. One
notice to this effect, by a person entitled to give it, is certainly as ef-
fective as many. In view of thèse considérations and the varions pro-
visions of the act, we feel constrained to hold that, when a member of
a tribe gives the requisite notice to an intruder, and subsequently brings
a suit on the strength thereof, and thereafter the nation elects to join
in the suit, it may do so without giving another notice in its own be-
half; in other words, we are of opinion that it may properly adopt
or ratify the action of one of the members of the tribe, who, in bringing
a suit to dispossess an intruder in the Indian country, really acts in be-
half of his tribe and for its benefit. We conclude, therefore, that the
second amended complaint was not fatally defective because it failed to
show that a notice had been given by the nation itself, and, as the com-
plaint contains ail the other allégations necessary to the establishment
192 129 FEDEEAL REPOETEK.
of a cause of action in'Behalf of the Cherofeee Nation, the demurrer to
the complaint was properly overruled.
While the point is not argued in the brief of counsel for the plaintiffs
in error, yet we hâve considered the question whether the lower court
acted properly in rendering a judgment against the défendant Conklin
for the damages occasioned by the unlawful détention of the improve-
ment as well as for the possession of the property. It may be assumed,
we think, that this question is fairly raised by tiie demurrer to the sec-
ond amended complaint, which challenges the jurisdiction of the court
to render a judgment against Conklin of any kind. After due con-
sidération of this question, we hâve concluded that the judgment
against Conklin for damages can be upheld as well as the judgment for
possession. It stands admitted by the demurrer to the complaint that
he joined with the other défendants in withholding possession of the
improvement from the Cherokee Nation, in conséquence of which the
damages were incurred; and, while the complaint allèges that he en-
tered into possession of the improvement subséquent to the institution
of this suit, yet it further avers that his entry was on or about the time
the action was commenced, from which we must infer that the wrongful
and collusive entry was almost coïncident with the institution of the
suit. We are aware of no sufficient reason why one who wrongfully
intrudes upon the possession of property after a suit to recover it has
been brought by the true owner should not be held responsible for the
rents and profits of the property from and after the date of his entry.
A judgment against such a person for the damages incident to a déten-
tion of the property, in which he participated, would seem to be as
proper as a judgment against him for the possession. In the présent
instance the record discloses that the damages which were awarded
were assessed by a jury which was called to assess the damages after
the demurrer to the amended complaint had been overruled, and, as
there is no bill of exceptions bringing the testimony upon the record,
we must présume that the assessment rests upon adéquate évidence, and
is in ail respects correct.
Finding no error in the proceedings which, in our judgment, would
warrant a reversai of the judgments below, they are each hereby af-
firmed.
BIÎOUGHT et al. v. CHEROKEE NATION.
(Circuit Court of Appeals, Eighth Circuit. February 27, 1904.)
No. 1,887.
1. Indians— Suit to Dispossess Intrudbr on Lands of Tkibe— Paeties.
A suit under Act Juue 28, 1898 (30 Stat. 495, c. 517), to dispossess an
intruder ou lands owned by an Indian tribe or nation, altliough brought
by a uiembor of tbe tribe, as permitted by sucli act, when tlie tribe fails
or refuses to bring it, is based primarily on tbe right of the tribe, and tlie
court may properly permit it to be substituted as plaintifC, and to allow
the name of the original plaintiff to be stricken ont, with his consent.
2. Same—Pleading— Vérification of Complaint.
It is sufficient compliance with the requircraent of such act that a "sworn
complaint" shall be filed if the complaint is verified by the authorized
BROUGHT V. CHEROKEE NATION. 193
attorney of the tribe or nation which Is plaintiff, who states that the
facts allégea are withln his knowledge.
3. JUDGMENT— CONFOKMITT TO PLEADINGS— EXCESSIVE DAMAGES.
A judgment for damages In a sum greater than Is alleged or prayed for
in the complalnt cannot be sustained, although it may be snpported by the
évidence.
4. Indians— Suit to Dispossess Intbudbr on Lands— Pleading.
Where the défendants in a suit by an Indian tribe to dispossess an In-
truder on its lands and recover damages for wrongful détention do not
plead the value of their improvements, or ask to recover for the same, the
court is without authority to set offi such value against the damages
awarded plaintiff.
In Error to the United States Court of Appeals in the Indian Terri-
tory.
For opinion below, see 69 S. W. 937.
M. M. Edmiston (W. S. Stanfield, on the brief), for plaintiffs in
error.
James S. Davenport, for défendant in error.
Before SANBORN, THAYER, and HOOK, Circuit Judges.
THAYER, Circuit Judge. This is an action which was originally
brought in the United States Court in the Indian Territory on May
30, 1899, by Andrew McAffrey against C. G. Brought, Mrs. C. G.
Brought, J. H. Balfour, and J. Reamer, three of whom are the présent
plaintiffs in error, to recover an intruder's improvement, as authorized
by the third section of the act of Congress of June 28, 1898 (30 Stat.
495) c. 517). The case is very similar to the case of Hargrove et al.
V. The Cherokee Nation, 129 Fed. 186, which has just been decided,
and référence is hère made to the various provisions of the act of Con-
gress of June 28, 1898, which are set forth in that opinion. After the
suit at bar was instituted, leave was obtained to file an amended com-
plaint making the Cherokee Nation a party plaintiff, and sucli a com-
plaint, making the nation a party, was thereafter filed in the month of
November, 1899. The complaint was again amended on February i,
1901, this latter complaint being the one on which the case was even-
tually tried. When the complaint was last amended, the name of An-
drew McAffrey, the original plaintiff, was stricken out by leave of court,
and the case was thereafter prosecuted by the Cherokee Nation as
the sole plaintiff. The complaint showed, by proper averments, that
the défendants proceeded against were intruders in the Indian Terri-
tory, and were holding and occupying land belonging to the Cherokee
Nation, on which they had made improvements, which lands were de-
scribed with sufficient certainty to identify them ; that the commission
to the Five Tribes had previously reported and decided that the improve-
ments in question were intruder improvements; that the persons who
made the same, to wit, C. G. Brought and Mrs. C. G. Brought, had
been tendered the money for the value of the improvements, but that
they had declined to accept the tender, and had continued to hold and
occupy the premises, contrary to the laws of the Cherokee Nation and
of the United States ; that in conformity with the act of Congress of
June 28, 1898, a notice had been served upon the défendants to vacate
129 P.— 13
194 129 FEDERAL REPORTER.
the premises, and that more than 30 days had elapsed prior to the bring-
ing of this action since the notice was served; that, notwithstanding
such notice, the défendants refused to vacate the premises; that the
Cherokee Nation was the owner of the land and the improvements there-
on, and had been since the tender of their value to the défendants and
their refusai to accept the same; that the plaintifif, the Cherokee Na-
tion, had been made a party to the action by leave of court ; and that the
annual rental value of the place was $400 per year, and that the Chero-
kee Nation had been entitled to the rents and profits of the place since
the institution of the action. The Cherokee Nation accordingly prayed
judgment for the possession of the lands and the improvements there-
on, and for the annual rental value of the same at the rate of $400
per year until the termination of the action. To the complaint thus
filed the défendants interposed a demurrer, but the demurrer was over-
ruled, and, as the défendants elected to stand upon their demurrer, and
as both parties waived a jury, the case was submitted to the court, which
rendered a judgment in favor of the Cherokee Nation, which judgment
is before this court for review on a writ of error. As no bill of excep-
tions was filed bringing such testimony as may hâve been heard upon
the record in an authentic form, the questions presented to this court
for review are those which arise and are presented by the demurrer
to the complaint. While the complaint on which the case was tried
was demurred to for several reasons, yet we understand that the
grounds relied upon to obtain a reversai of the judgment — that is to
say, the grounds specified in the brief with which we hâve been favored
— are thèse : That the Cherokee Nation was erroneously substituted as
plaintiff in place of McAfïrey; that the name of McAfïrey was erro-
neously stricken out as a party plaintiiï; that the amended complaint
was not sworn to by the chief or governor of the Cherokee Nation ;
and that the notice to leave was not served by the nation, but by
McAfïrey. For ail of thèse reasons, as we understand, the plaintiffs
in error insist that the demurrer to the amended complaint should hâve
been sustained, and the action dismissed.
We hâve already held, however, in Hargrove et al. v. The Cherokee
Nation, 129 Fed. 186, that when a member of the tribe serves a notice
upon an intruder to leave the premises which he wrongfully occupies,
and the improvements thereon, and subsequently sues for the recovery
of the same, as he is permitted to do by the proviso to section 6 of the
act of June 28,1898 (30 Stat. 497,0. 517), and the nation thereafter elects
to join in the action by making itself a partj plaintiff, it need not serve
a second notice, but may adopt the notice already given by the member
of the tribe who originally sued. If the nation does not join of its
own volition in an action by one of its citizens to recover an intruder's
improvement, it would be the duty of the court, under the second section
of the act of June 28, 1898, to issue process against it, and make it a
party, as we pointed out in the case of Hargrove et al. v. The Cherokee
iVation, supra. We perceive no sufficient reason, therefore, why its
voluntary appearance without process and making itself a party, should
not place the nation in the same position which it would hâve occupied
had the court caused it to be made a party ; and in the latter event the
act expressly déclares that "the suit shall thereafter be conducted and
BROUGHT V. CHEROKEE NATION. 195
determined as if said tribe had been an original party to said action."
The truth is that suits to recover intruder's improvements are based
primarily upon the right of the nation to hâve and recover such im-
provements as hâve been wrongfully erected by an intruder upon its
land, and aiithority is conferred on individual members of a tribe to
bring such actions and give the requisite notice because the nation may
at times be dilatory in the assertion of its rights. We perceive no error,
therefore, in the action of the trial court in permitting the Cherokee
Nation to become a party and to proceed with the suit, or in striking out
the name of the original plaintiff. At ail events, if any one is entitled
to complain because the original plaintiff was dropped when the nation
became a party, it would seem to be McAffrey himself, and lie is not
complaining, and has not appealed.
Relative to the contention that the amended complaint was not sworn
to by the chief or governor of the Cherokee Nation, this may be said :
That the sixth section of the act of June 28, 1898, does not, in terms,
provide that the complaint filed in such cases shall be sworn to by the
chief or governor of the tribe in person. The provision of the act is
that "a sworn complaint" shall be filed ; not that the complaint shall
be verified by the chief or governor of the tribe in person. The amend-
ed complaint on which the case was tried was sworn to in due form by
"one of the attorneys for the Cherokee Nation in this action." The
affidavit made contains the further statement that the affiant "knows the
facts contained in the within and foregoing amended complaint, and the
same are true." We are of opinion that this was a sufficient vérifica-
tion, it having been made by an agent and authorized attorney of the
Cherokee Nation to satisfy the requirements of the statute.
Another point was made by counsel for the plaintiffs in error on tne
oral argument of the case, although it is not mentioned in the brief ;
the point being that the trial court erred in entering its judgment in
awarding damages against the défendants for a greater sum than was
prayed for in the complaint. This point seems to be well taken, and it
appears upon the face of the record. The amended complaint alleged
that the rental value of the premises in controversy was $400 per an-
num, and that the nation was entitled to the rents and profits "since the
institution of this suit." The suit was brought on May 30, 1899, and
the judgment was rendered on February 8, 1901, so that in no event
was the plaintiff entitled to recover in this action a greater sum than the
value of the rents and profits for one year eight months and nine days,
or, in the aggregate, the sum of ^Gyj.yy. The trial court in fact al-
lowed the plaintiff, as damages, a sum sufficient to cancel the nation's
indebtedness to the défendants for the appraised value of their im-
provements, to wit, the sum of $1,344, which sum had been tendered to
them before the suit was brought, but was not accepted; and it also
rendered a judgment against the défendants for the sum of $337.50.
In other words, the trial court appears to hâve awarded damages
amounting in the aggregate to $1,681.50, and to hâve entered the judg-
ment in such a form as to cancel and extinguish the defendant's claim
against the nation for the appraised value of their improvements. A
judgment to this extent, and having such an effect, was not authorized
by the pleadings, since a judgment in a légal proceeding for an amount
196 129 FEDERAL REPORTER.
greater than is claimed by the plaîntifï in his complaint is erroneotis,
and will be reversed on appeal, although the judgment may be sustained
by the évidence. Cauthorn v. Berry, 69 Mo. App. 404, 412; Moore v.
Dixon, 50 Mo. 424; Wright v. Jacobs, 61 Mo. 19; Armstrong v. City
of St. Louis, 3 Mo. App. 100, 106; Corning v. Corning, 6 N. Y. 97,
105. Moreover, as the défendants did not plead the value of the im-
provements that had been tendered to them by the nation as a counter-
claim or set-off against the demand for the rents and profits of the
land, we fail to perceive that the trial court, in the absence of such a
plea, had any power to allow such a set-off in this proceeding, thereby
extinguishing the claim of the défendants against the nation for the
appraised value of their improvements. Because of this error we think
the existing judgments should be reversed and annulled, and that
the case should be remanded to the trial court, with directions to that
court to enter a judgment in favor of the Cherokee Nation for the
possession of the land and improvements in controversy; also a judg-
ment in its favor against the défendants for the rental value of the prop-
erty from May 30, 1899, to February 8, 1901, in the sum of ^ôyy.yy;
leaving the parties at liberty to adjust the claim for the assessed
value of the improvements as they may be advised.
It will be so ordered, and that the costs in this case on appeal be taxed
against the Cherokee Nation.
CALLISON V. BRAKB.
(Circuit Court of Appeals, Fifth Circuit Aprll 8, 1904.)
No. 1,319.
1. Weongftjl Death— Action for Damages— Insteuctions.
Instructions in an action by an adminlstrator to recover damages for
wrongfnl death under the statute of Florida considered and approved, as
in conformity with a prior décision of the court.
2. Statutes— Manner or Enactment— Constittjtionai. Reqtjirejients.
Where a bill introduced into the Florida Senate was regularly passed
by a eall of the yeas and nays and referred to the House, where on its
second reading a substitute w^as Introduced by the judiciary comiulttee,
regularly passed, and forwarded to the S.enate, the faet that the Senate
treated the substitute as an amendment of the original bill, and concurred
In it without the formality of a roll call, did not invalldate the act on the
ground that It was not passed In conformity with the state Constitution,
whicb requires the yeas and uays to be taken on the iînal passage of a bill.
3. Wbongful Death— Action for Damages— Joindeb of Causes of Action
XTNDEB Différent Statutes.
Rev. St. Fia. 1892, §§ 2342, 2343, authorize actions for wrongful death
to be brought, among others named, by the exécuter or administrator of
the deceased; the measure of damages in such case being the loss to the
estate. Such sections were supplemented by Laws 1899, p. 114, c. 4722,
whicb authorlzes an action for the wrongful death of a minor child by the
father or mother of such child, in which the plaintifC "may recover, not
only for the Joss of services of such minor child, but, In addition thereto,
such sum for the mental pain and sufifering of the parent or parents as
If 3. See Death, vol. 15, Cent. Dig. § 22.
CALLISON V. BRAKE. 197
the Jury may assess." Held that, where the father of a mlnor who was
killed was aiso the administrator, he might sue for the death in both ca-
pacities in the sanie action, joining counts under each statute in the same
déclaration.
In Error to the Circuit Court of the United States for the Southern
District of Florida.
For opinion below, see 122 Fed. 722.
This is an action by the plaintlffl, as administrator o( the estate of Gérard
H. Brake, deeeased, to recover damages from the défendant for alleged wrong-
ful aet or acts, or négligence, or default on the part of the défendant, alleged
to hâve been the cause of death of Gérard H. Brake. The stateuient of the
piaintIfC's case is set forth In his déclaration in four separate and distinct
counts ; that Is, each of thèse four separate counts is a statement of a claim
contended for by plaint! ff against défendant, Callison. In the flrst count,
plaintIfC allèges in substance that the défendant, as the lessee of county con-
victs for the county of Alachua and state of Florida, had, in the month of
November, 1901, Gérard H. Brake, son of the plaintiff, aged at that tlme about
16 years. In his custody as lessee, said Brake having been committed as a
prisoner of said county, and that the défendant, as such lessee of the county
convicts, became obligated to furnish support, care, and maintenance to the
said Brake, and that the said Brake was during such time sick and aillng,
and In feeble and inflrm health, ail of which Is alleged to bave been well
known to the défendant, and that the défendant failed and neglected and re-
fused to permit décèdent proper opportunlty for rest, and eompelled him to
toil Immoderately, and failed and neglected to furnish said Brake with neces-
sary medielne and médical attendance and Personal care, In conséquence
whereof said Brake langulshed and died, whereby the plaintiff has lost and
been deprived of the services of the said Brake to the value of $5,000, and that
the plaintiff and the plaintIfC's wife, niother of the said Brake, bave been
submitted to great mental pain and sufifering, to thelr damage In the sum of
$20,000. This count of the déclaration in brief elaims that, by reason of
the neglect of the défendant to furnish proper clothing, médical attention, and
tomfortable quarters, and by reason of having eompelled said Brake to work
immoderately the said Brake died, to the damage of the plaintiff as alleged.
The third count In substance sets forth substantlally the same facts as were
set forth In the first count as to the décèdent, Gérard H. Brake, being in the
custody of the défendant as lessee of the county convicts of the county of
Alachua, Fia., and then allèges that the said Brake, at the tlme of such im-
prlsonment by the défendant, was sick and alling, and In feeble and failing
beaith, and unfit for work, and that the défendant, knowlng said Brake was
sick and alling, urged and Insisted that the said Brake engage in labor dis-
proportlonate to his strength, and by way of coerclug the said Brake to labor
the défendant caused and procured said Brake to be Immoderately beaten and
bruised upon and about the body and limbs. In conséquence whereof the said
Brake langulshed and died, to the damage of the plaintiff for loss of services
of the said Brake of $5,000, and for mental pain and suffering of the plaintiff
and plaintiff's wife to the sum of $50,000. The second count of the déclara-
tion, after setting up the same facts as to the imprisonment of Gérard H.
Brake In the county convict prison of Alachua county, and his custody by the
défendant as lessee of the said convicts, and after alleging It to be the duty
of the défendant to furnish support, care, and maintenance to the said Brake,
and stating that during such Imprisonment the said Brake was sick, alling.
and in feeble and inflrm health, to the knowledge of the défendant, allèges
that the said défendant failed and neglected to provide the said Brake with
comfortable quarters, good bedding and blankets, and wholesome food, and
also refused to permit Brake to hâve proper rest, and eompelled him to toil
immoderately, and also failed to furnish décèdent with necessary medicine
and médical and Personal attendance, in conséquence of which the said Brake
langulshed and died, to the damage of the plaintiff, as administrator, by the
loss of earnlngs which the décèdent in his lifetime would hâve made, to the
estent of $25,000. The fourth count of the déclaration, after setting up the
198 129 FEDERAL REPORTER.
facts of the Imprlsonment of Brake aud hls custody as such prîsoner by the
défendant, then allèges that tlie said Brake, while thus imprisoned, was
sick, ailing, and In feeble and infirm liealth, and unflt for work, that the de-
fendant urged and insisted that tbe décèdent engage in labor disproportionate
to his strength, and by way of coeïclng the said Brake so to labor défendant
caused and procured Brake to be immoderately beaten and bruised upon and
about the body and limbs, In conséquence whereof Brake languished and died,
and by said wrongful acts of the défendant the plaintifC, as administrator,
suffered great damages by loss of earnings wblch the said Brake in his life-
time would hâve made, to wit, $25,000. The plaintifC claims as total damages
for the causes of action set forth in ail counts of the déclaration $75,000.
The défendant Is charged, therefore, with two classes of torts : First, of-
fenses of omission, or rather a failure to provide suitable and satisfactory sub-
sistence, quarters, bedding, and blankets, proper opportunities for rest, neces-
sary medicine and médical attendance and persoual care. The testimony is
conclusive of the relations existing betweeu the deceased and the défendant.
The deceased was a convlct, and the défendant vyas, in accordance with the
law, the keeper and eustodian of the deceased, aud as such custodian of the
deceased, and as such custodian and keeper, it was his duty to furnish the
deceased with ail reasonable means and opportunity for health and welfare,
as far as the clrcumstances would justify. The défendant cannot be held re-
spousible for the position of the deceased as a convict. In which he was found ;
but it was his duty to provide him. suitable quarters, bedding, and blankets,
necessary medicine, and attendance, such as might be required by the phys-
ical condition of the convict The foregoing statement of the case we hâve
adopted from the opening paragraphe of the charge given to the jury by the
trial judge.
Bisdee & Bedell, for plaintiff in error.
Evans Haile, S. Y. Finley, E. P. Axtell, C. D. Rinehart, and Hora-
tio Davis, for défendant in error.
Before FARDEE, McCORMICK, and SHELBY, Circuit Judges.
McCORMICK, Circuit Judge (after stating the facts as above). In
the opinion of the majority of this court, the judgment of the Circuit
Court in this case should be afïirmed. We do not deem it necessary
to notice in détail, and in the order in which they hâve been présentée!
by the respective counsel, the questions which were raised on tlie trial
and hâve been stibmitted to us on the hearing of this writ of error.
We notice only a few of the points, which we deem require some atten-
tion.
The trial judge, amongst other things, in the charge which he gave
the jury on his own motion, instructed them substantially that the lia-
bility of the défendant, under the déclaration, is based upon two stat-
utes, under one of which this suit is brought lay the plaintiff as admin-
istrator, and under which the défendant may be liable for any act of a
servant, agent, or employé, acting by the authority of the défendant;
but in such case the damages are limited to the actual injury suffered
by the plaintiff in such character of administrator — that is, the value
of the estate. Later on, he instructed further to the effect, substan-
tially, that under the second and fourth counts of the déclaration the
défendant would be liable for any act or négligence of any agent or
employé of his, acting in the line of duty to which he had been ap-
pointed, or for which he had been employed ; but for such act or nég-
ligence nothing could be recovered for mental suffering or for the
services of the deceased before he reached the âge of 21. So, if you
CALLISON V. BRAKE. 199
find the défendant liable under thèse counts, the only damages that
can be given would be such as would be coming to the plaintiff as ad-
ministrator; that is, the présent worth of what you find the deceased
would hâve accumulated during his natural life, considering his prob-
able earnings, expansés, and savings, and the probable length of his
life. Of thèse matters you are the sole judges according to your best
judgment. The jury should take into considération the âge, occupa-
tion, habits, character, and ability, mental and physical, of défendant,
and the probable continuance of his life, in arriving at this estimate.
In référence to the other counts under the déclaration, the trial judge
instructed the jury to the effect that, if you find for the plaintifï upon
the issues of either of thèse counts, it will be necessary for you to
détermine the damage that plaintiff has suffered. Under thèse counts
the défendant can only be held liable for his own personal acts or nég-
ligence. If you find the death of the deceased was caused by such
Personal act or négligence, damage may be allowed the plaintiff, as
parent, for the net services of deceased until he reached the âge of 21
years, making allowance for ail expansés of his éducation and sup-
port, and for the mental pain and suffering of his parents. There is no
rule by which thèse can be determined, except by your own judgment
under the light of ail the circumstances and the évidence in the case.
You are to take into considération ail the facts and circumstances, and
upon the testimony, tested by your own gênerai knowledge of human
nature, détermine in your own mind what was the distress and an-
guish of mind, the mental pain and suffering, of thèse parents, caused
by the death of their son under thèse circumstances; and upon your
deliberate judgment and individual conscience make such an award as
you deem just.
The statutes of Florida, to which the trial judge referred, and under
which the action was brought, are sections 2342 and 2343 of the Re-
vised Statutes of the State of Florida of 1892, and chapter 4722, p.
114, of the Laws of Florida, approved June 3, 1899. The provisions
of thèse statutes, so far as they affect this case, are as follows :
"Sec. 2342. Whenever the death of any person in this state shall be caused
by the wrongful act, négligence, carelessness or default of any individual,
* * * and the act, négligence, carelessness or default is such as would, if
death had not ensued, hâve entitled the party injured thereby to maintain an
action for damages in respect thereof, then, and in every such case, the person
who would hâve been liable in damages, if death had not ensued, shall be
liable to an action for damages, notwithstanding that the death shall bave
been caused under circumstances as would make it in law amount to a felony.
"Sec. 2343. Every such action shall be brought by, and In the name of, the
widow or husband, as the case may be, and where there Is neither widow nor
husband surviving the deceased, then the minor child or children may maintain
an action ; and where there is neither widow, nor husband, nor minor child
or children, then the action may be maintained by any person or persons dé-
pendent upon such person killed for a support; and where [there] is neither
of the above classes of persons to sue, then the action may be maintained by
the executor or administrator, as the case may be, of the person so killed, and
in every such case the jury shall give such damages as the party or parties
entitled to sue may hâve sustained by reason of the death of the party killed."
Chapter 4722, § 1. "Whenever the death of any minor child shall be caused
by the wrongful act, négligence, carelessness, or default of any individual,
* ♦ * the father of such minor child, or if the father be not living, the
motber, as the légal représentative of such deceased minor child, may maintain
200 129 FEDERAL EEPOKTER.
an action against such indivldual, • • • and may recover, not only for
the loss o( services of such mmor chlld, but in addition thereto such suni for
the mental pain and suffering of the parent or parents as the jury may assess."
In this case the issues which were présentée! and decided by the
Circuit Court, affecting so much of the action as looks to sections 2342
and 2343 of the Revised Statutes of Florida of 1892, are substantially
the same as those which were presented in the case of Sullivan, by
administrator, v. The Florida Central P. R. Co., which was heretofore
tried in the same Circuit Court, and brought by writ of error to this
court under the style of "Florida Central & P. R. Co. v. Sullivan," and
hère affirmed, as appears from the report of our action thereon in 120
Fed. 799, 57 C. C. A. 167, 61 L. R. A. 410. In the case we are now
considering the learned judge of the Circuit Court, who had formerly
tried the Sullivan Case, followed substantially herein the rulings that
he made therein, and which we had affirmed, as to the right of the
administrator to sue, the right to recover under thèse statutes, and the
measure of damages ; and, as we hâve seen no occasion to change the
views then expressed, we must, on the authority of that case, hold that,
as to so much of this case as rests on those sections of the Revised Stat-
utes, the Circuit Court did not err in its rulings and action.
The effort herein to recover under the act of June 3, 1899, occasioned
the présentation of two questions which we ought to notice :
First, whether that act was constitutionally passed by the Législature
of Florida? The counsel for the plaintiff in error, assuming, on the
authority of State v. Hocker, 36 Fia. 358, 18 South. 767, and Ottawa
V. Perkins, 94 U. S. 260, 24 L. Ed. 154, that this court takes judicial
notice of the journals of thq, Législature of Florida to ascertain whether
or not a bill lias been constitutionally passed into a law, prints in his
brief "extracts from the journals of the Législature of Florida for its
session of 1899, showing ail the entries relating to the supposed passage
of chapter 4722, p. 1 14, of the Laws of Florida, the act on which the
iirst and third counts of the déclaration are based." We bave examined
thèse journal entries with minute care, and, in connection therewith,
the décisions of the Suprême Court of Florida in the case of State v.
Hocker, supra, and State V. Dillon, 42 Fia. 95, 28 South. 781, and we
conclude that the record of the action of the Législature, read in the
light of the décisions of the Suprême Court of Florida, does not sup-
port the objection made by the plaintiff in error to the validity of the
act in question.
The other question is whether recovery under both statutes may be
sought and had by the administrator in his character as légal représenta-
tive in one action? The later statute is récent, and no décision under
it is reported. Its language appears to authorize recovery under both,
when the administrator is the father or the mother of the deceased.
The damages in each case grow out of the same transaction. The
proof, in the very nature of the case, must be substantially the same
in each as to the wrong done and as to the liability of the défendant.
The action is by one natural person as the légal représentative of one
intestate décèdent, and against one natural person, to recover damages
for wrongfully causing the death of the deceased. The later statute
seems to supplément the earlier one, and to carry the remedy, in the
BEAKE V. CALLISON. 201
same direction, farther towards completion. The time, place, and
circumstances of the wrong alleged to hâve been donc are the same.
The nature of the relief sought is the same. It seems to us thatto
conclude and hold that in such suit there is a misjoinder of parties
plaintiff, or a misjoinder of causes of action, would involve the sur-
render of our faculties to the duress of distinctions which, in the olden
time, learned experts in the science of pleading treated as substantial,
but which in their essence are shadowy and highly technical.
The judgment of the Circuit Court is afhrmed.
BRAKE y. CALLISON.
(Circuit Court of Appeals, Fifth Circuit. April 8, 1904.)
No. 1,332.
1. Bankbuptct— AcT or Bankruptcy.
A conveyance of property by a debtor to creditors cannot be chargea as
an act of bankruptcy, where he had at the time no other creditors.
2. Same— Involuntart Peocebdings— Who may Maintain.
A judgment credltor eamiot maintain a pétition In bankruptcy against
his debtor on an allégation that the latter made a conveyance of property
to creditors which constituted an act of bankruptcy before the rendition
of the judgment, where it does not appear that the demand on which it
was rendered was one provable in bankruptcy, so as to make hlm a ereditor
at the time the conveyance was made.
Pétition for Revision of Proceedings of the District Court of the
United States for the Southern District of Florida, in Bankruptcy.
Bisbee & Bedell, for petitioner.
E. P. Axtell, C. D. Rinehart, and Jno. E. Hartridge, for respondent.
Before PARDEE, McCORMICK, and SHELBY, Circuit Judges.
McCORMICK, Circuit Judge, delivered the opinion of the court.
On May i6, 1903, the respondent, N. A. Callison, for a recited con-
sidération of $12,000 to him in hand paid, conveyed to H. F. Dutton,
J. G. Nichols, and W. G. Robinson, as partners, a large amount of real
and Personal property. The deed was filed for record on the day of
its date, and recorded May 18, 1903. On May 29, 1903, the pe-
titioner, William J. Brake, as administrator of the estate of Gérard H.
Brake, deceased, recovered a judgment at law against the respondent
in the Circuit Court of the United States for the Southern District
of Florida, for the sum of $6,000 damages and $189.25 cost, whereupon
exécution issued out of that court, and the judgment remains in full
force and effect, unsatisfied, and in no wise reversed or made void. On
September 9, 1903, the petitioner presented to the District Court, as a
court of bankruptcy, his pétition against the respondent, making the
formai allégations necessary to show the jurisdiction of the court, in-
cluding the averments as to the nature and amount of his claim, as
substantially recited above, and charging that the respondent is in-
solvent, and within four months had by his certain deed (above re-
ferred to) conveyed, transferred, concealed, removed, and permitted to
202 129 FEDERAL EÉ'PORÎ^EB.
be concealed and removed, a part of his property, witli the intent to
hinder, delay, or defraud his creditors, or some of them ; that the re-
spondent was, on the day of the date of the deed, indebted to the
grantees therein, and made the conveyance with the intent to prefer such
creditors over his other creditors ; and that the deed was, in effect, a
gênerai assignment for the benefit of creditors. To this pétition the
respondent, by counsel, submitted a demurrer, and for grounds thereof
alleged : First, it does not appear from the pétition that the respondent,
on the i6th day of May, 1903, had any creditors, within the meaning
of the bankrupt act, who are entitled to complain of the transaction
complained of in the pétition ; second, because it appears from the state-
ments contained in the pétition that the petitioner was not a créditer
of the respondent at the time of the transfer complained of, and is not
entitled to file a pétition in bankruptcy, within the meaning of the bank-
rupt act (Act July i, 1898, c. 541, § i, 30 Stat. 544, 545 [U. S. Comp.
St. 1901, p. 3419]). Three other grounds are assigned, but it is not
necessary that they should be specially considered. The District
Court sustained the demurrer on each of the grounds above stated, with
leave to the petitioner to amend as advised. No amendment was
tendered, and this pétition for review was allowed.
The counsel for the petitioner submits that the case présents the
question whether a creditor, having a provable claim, may file a péti-
tion, irrespective of whether he had such claim at the time of the com-
mission of the act of bankruptcy complained of. Redacting this propo-
sition, and dispensing with its abstract features, the case présents
to us the question whether, under the conditions shown by the petitioner
at the date of the conveyance by the respondent, his conveyance of his
property constituted an act of bankruptcy. So far as shown by the
pétition, the grantees in his deed were his only creditors at that time.
It could not be an act of bankruptcy as to them. As to the parties to
that deed, it was manifestly a valid conveyance. It is said in Horbach
V. Hill, 112 U. S. 144, 5 Sup. Ct. 81, 28 L. Ed. 670 (we quote the sylla-
bus):
"A creditor of a grantor of real estate, attacking tlie conveyance as made
to defraud creditors, should show affirmatively that he was a creditor of the
grantor when the alleged fraudulent conveyance was made."
Referring to the grantor in that case, the concluding sentences of the
opinion are in these words :
"He had a right to dispose of his property in the ordinary course of business
for a valuable considération, and the défendant (the grantee) had a right to
purchase it. The complainant, not showing that he was at the time a cred-
itor, cannot complain. Bven a voluntary conveyance is good as against sub-
séquent creditors, unless executed as a cover for future schemes of fraud."
The pétition to the bankrupt court allèges no facts, other than those
already stated, showing or tending to show that the conveyance in
question was executed as a cover for future schemes of fraud. There
is no allégation that the petitioner had any claim of any kind against the
respondent prior to the date of the rendering of the judgment which
he obtained. The allégation is simply that it was a judgment for dam-
ages, without indicating whether they grew out of a breach of contract,
express or implied, or were recovered on account of a tort. As de-
CARET V. BILBT. 203
fined by the bankriipt act, the term "creditor" încludes any one who
owns a demand or claim provable in bankruptcy, and the term "debt"
includes any debt, demand, or claim provable in bankruptcy. It not
appearing that at the time of the respondent's conveyance there were
any other creditors than those to whom he conveyed, and it appearing
expressly that the petitioner was not a creditor of respondent at that
time, we conclude that the demurrer to the pétition was well taken
on the first and second grounds. Beers v. Hanlin (D. C.) 99 Fed.
695 ; In re Brinckmann (D. C.) 103 Fed. 65. As this disposes of the
case, it is unnecessary to notice the other grounds.
The pétition for revision is dismissed.
OAREY V. BILBT et al. (two cases).
(Circuit Court of Appeals, Eighth Circuit March 7, 1904.)
Nos. 1,929, 1,930.
1. TORTS — Joint Toet Feasor— Release of One — Construction — Effect.
Plalntiff, claimlng a right of action for damages against O. and H.
jointly for alleged fraudulent misrepresentations In the sale of cattle, ac-
ceptée a certain amount of money from H., and executed a release dis^
charging him from any and ail liability by reason of such misrepresenta-
tions, and agreeing to Indemnlfy him from being compelled to pay any
further sum by reason thereof. The release, however, expressly pro-
vlded that plalntiff did not relinquish or release any action or cause of
action against C. by reason of the premises, but reserved hls right to sue
C. or the flrm of O. Bros, on such cause of action. Beld, that such in-
strument should not be treated as a technical release terminating plain-
tiff's cause of action against ail the joint tort feasors, but as a covenant
uot to sue H., and was therefore no défense to an action against C.
In Error to the Circuit Court of the United States for the District of
Nebraska.
John S. Bilby and Russell I. Bilby, the défendants in error In case No.
1,929, brought an action against John L. Carey, the plalntiff in error, to re-
cover certain damages for injuries whlch they claimed to hâve sustained In
conséquence of their being induced by the défendant, Carey, to purchase from
him certain Texas cattle through false représentations. John S. Bilby and
John E. Bilby, the défendants in error in case No. 1,930, brought a similar
action against John L. Carey, plaintIflC in error. The complaints in the two
cases were substantially alike, except that In case No. 1,929 the damages
elalmed by the plaintiffs below were $13,611, whereas the damages claimed
in case No. 1,930 was the sum of $3,809. The complaints stated, in substance,
that in the month of May, 1897, the défendant, Carey, and one C. J. Hysham
were the owners of 755 head of cattle, which had been shlpped by them from
the State of Texas to the clty of St. Joseph, Mo. ; that said Carey and Hy-
sham offered to sell to the plaintilïs below certain of said cattle, and, to
induce them to buy, represented that the cattle had been kept durlng ail of
the preceding wlnter and spring in a part of the state of Texas, which was
entirely free from, and not Infected with, a certain contagions disease com-
monly known as "Spanish Fever," and that they had not been driven over
or in the vicinity of any territory In the state of Texas which was infected
by said disease, and had not been exposed thereto, but were in a sound and
healthy condition; that, relying on this représentation, and believing the
same to be true, they purchased a certain number of the cattle from Carey
If 1. See Release, col. 42, Cent Dig. §§ 08, 71.
204 129 FEDERAL HEPOETER.
and Hysham, and paîd tbem tàerefor; that the represeatations aforesald,
at the tfme they were made, were known to the vendors of the cattle to be
untrue ; that they aiso knew that the purchasers of the cattle would pasture
them on lands in the state of Missouri with a large number of Missouri and
other native-born nortbern cattle ; that they were so pastured by the vendees,
after they were purchased, with other northern-bred cattle; that, In consé-
quence of their being affected with the contagions disease aforesaid, they
communlcated the disease to other cattle with whom they were herded,
which belonged to the plalntiffs below, and that in conséquence thereof tlie
plaintiffs lost a large number of cattle of great value, and that they were
damaged in the one case to the amount of |15,840 and in the other case to
the estent of $4,580, in conséquence of the disease in question being communi-
t-ated to their respective herds. The plaintiffs below further alleged that they
liad been paid by C. J. Hysham, on account of the damages claimed in case
No. 1,929, the sum of $2,229, and that they had been paid by C. J. Hysham,
on account of the damages claimed in case, No. 1,930, the sum of ?771, leaviii?
a balance of damages due to them in the one case in the sum of $13,611 and
a balance due to them in the other case In the sum of $3,809.
Among other allégations contained in the defendant's answer it was ad-
mitted that the plaintiffs had received from C. J. Hysham the sums of money
alleged in the complaints, and it was alleged that the sums so paid to the
plaintiffs by Hysham were received and accepted by said plaintiffs in full
release, satisfaction, and discharge of the pretended causes of action sued
upon In said actions, and in full release of said Hysham from ail liability
thereon. On the trial of the cases the reeeipt which was signed by the plain-
tiffs when the sums of money were paid to them by 0. J. Hysham was intro-
duced in évidence, and was of the followlng purport :
"Whereas, on or about the ■ day of May, 189T, T. J. Hysham actiug
for 0. J. Hysham or 0. J. Hysham & J. L. Carey, as partners or either of
them, purchased for said O. J. Hysham or C. J. Hysham & J. L. Carey as
partners, or either of them, certain cattle of Cîomer Brœ., in the State of
Texas, and
"Whereas, said cattle were shipped from the State of Texas and were sold
and delivered by said C. J. Hysham or O. J. Hysham and J. L. Carey as part-
ners, or either of them, to J. S. Bilby in St. Joseph, Missouri, on or about
the day of May, 1897, and
"Whereas, said J. S. BJlby.flid on the day last above named recelve from
said C. J. Hysham, or 0. J. Hysham & J. L. Carey as partners, or either of
them, at St. Joseph, Missouri, about 756 of said cattle, and did at said time
exécute and deliver to the said C. J. Hysham hls certain promissory note for
the purchase priée of said cattle, together with a chattel mortgage on said
cattle thus bought by him securing said note, and
"Whereas, the said J. S. Bilby bas sinee paid off and discharged said note
and mortgage, and
"Whereas, after buying said cattle said Bilby took the same to his farms
described in said chattel mortgage, and
"Whereas, after taking said cattle to his farm, the said Bilby claims that
many cattîe owned by him or others hâve dled, and that many other cattle
became sickened and impoverished, and
"Whereas, the said Bilby claims that the said cattle thus dying and the
others thus becomlng slcfcened and impoverished was caused by reason of
what is commonly called the Spanlsh or Texas fever, and
"Whereas, the said Bilby claims the said Spanish or Texas fever was Im
parted or conveyed by the cattle that he thus bought at St. Joseph, Missouri,
as aforesaid recited.
"Now, therefore, in considération of the sum of $3,000.00 to me in hand
paid by T. J. Plysham and 0. J. Hysham, and the further considération of
the said T. J. Hysham and O. J. Hysham having assigned to me ail claims
and causes of action that they, or either of them hâve against the said Corner
Bros., growlng out of or in any way connected with the said purchase of said
cattle from said Corner Bros., I, J. S. Bilby, fully release and discharge him,
the said T. J. Hysham, and the said C. J. Hysham from any and ail liability
by reason of each, ail and every of the foregoing matters and things, and re-
CARET y. BILBr. 205
lease hlm, the sald T. J. Hysham and the sald C. J. Hysham from any and
ail Uability In any way connected with or growing out of the aforesald mat-
ters. And I will indemnify, protéct and save harmless the sald T. J. Hysham
and the said C. J. Hysham from paying any further sum to any person or
persons whatsoever, on account of any or ail the matters set forth in this
contract.
"But it is expressly and specifleally understood in the exécution and de-
livery of this paper that I do not relinquish or release any action or causes
of action that I may now or hereafter hâve against him, the said J. L. Carey,
or them, the said Corner Bros., or either of them by reason of any of the
matters or things hereinbefore reclted, expressly and specifleally reserve to
myself the right to malntain in said action or actions against him, tlie said
J. L. Carey, or them, the sald Corner Bros., or either or ail of them by reason
of said matters and things or any of them that I now hâve or may hereafter
hâve.
"Signed this second day of August 1898. John S. Bilby."
The trial below resulted in a verdict in favor of the plaintiffs in case No.
1,929 for the sum of $2,229 and in a verdict in favor of the plaintiffs in case
No. 1,930 for the sum of $7T1, on which verdicts judgments were subsequently
entered. The défendant below has brought the cases to this court on writs
of error.
John C. Cowin, for plaintiff in errer.
James W. Hamilton (H. E. Maxwell, on the brief), for défendants
in error.
Before SANBORN, THAYER, and HOOK, Circuit Judges.
THAYER, Circuit Judge, after stating the case as above, delivered
the opinion of the court.
At the conclusion of the évidence on the trial below, counsel for the
défendant requested a peremptory instruction to find a verdict in favor
of his client. This instruction was asked, as it seems, on the sole
ground that the release which had been executed by the plaintifï Bilby
in favor of T. J. Hysham and C. J. Hysham operated as a release of
the défendant, Carey, although it was not so intended, and that no
action could be maintained against him in conséquence of the exécu-
tion of this instrument. The trial court denied the request, holding
that the release in question did not hâve the effect claimed for it. It
is conceded by counsel for the plaintifï in error that the only question
for détermination by this court is whether the trial judge was right
in his view that the release did not operate as a discharge of the cause
of action against Carey.
It is an old and well-established rule of law that the release of a
cause of action as against one of two or more joint tort feasors or
joint obligors opérâtes as a release of ail. This is upon the theory that
when one has received fuU compensation for a wrong, no matter from
which wrongdoer or from what source, the law will not permit him
to recover further damages. Lovejoy v. Murray, 3 Wall, i, 17, 18
L,. Ed. 129. When a release of a cause of action for a tort is given
by the injured party to one of two or more persons who committed
the wrong, the release is construed most strongly against the party
executing it. The law indulges in the presumption that the release
was given in full satisfaction for the in jury, and upon a suiEcient con-
sidération, and will not permit the presumption to be overcome by
oral proof to the contrary. EUis v. Esson, 50 Wis. 138, 6 N. W. 518,
206 129 FEDERAL REPOETEE.
520, 36 Am. Rep. 830; Bronson v. Fitzhugh, i Hill, 185, 186. Some-
times, however, as in the case in hand, a release executed in favor of
one wrongdoer is accompanied with the réservation of the right to sue
others who were jointly concerned in the wrong, and in such cases the
question has frequently arisen, how shall such an instrument be inter-
preted? Shall the réservation of the right to sue others be ignored,
and the instrument treated as raising a conclusive presumption that
full compensation for the wrong has been made, as though it were a
technical release under seal, or shall the réservation of the right to
sue others be taken to mean that full compensation has not been re-
ceived by the injured party, and that he merely intended to agrée with
the released party not to pursue him further, but without releasing
his cause of action against the other wrongdoers, or admitting that
he has received full compensation for the injury? With référence to
this question the authorities are not in accord. Some courts are dis-
posed to hold, and hâve held, that when such an instrument contains
apt words releasing one of the joint wrongdoers, it opérâtes to release
ail, and that any clause inserted therein reserving a right to sue others
after one has been released is répugnant to the release, in that it de-
feats or attempts to defeat, the natural légal effect of the instrument;
and that it should therefore be ignored. McBride v. Scott et al.
(Mich.) 93 N. W. 243, 61 L. R. A. 445; Abb v. Northern Pacific Ry.
Co. (Wash.) 68 Pac. 954, 58 L. R. A. 293, and cases there cited. Other
courts hold, however, that such an instrument should be given efïect
according to the obvious intent of the person executing it, and that it
should not be treated as a technical release operating to destroy his
cause of action as against ail of the joint tort feasors, but rather as a
covenant not to sue the party in whose favor the instrument runs. Gil-
bert V. Finch (N. Y.) 66 N. E. 133, 61 L. R. A. 807; Matthews v.
Chicopee Mfg. Co., 3 Rob. 712 ; Ellis v. Esson, 50 Wis. 138, 6 N. W.
518, 36 Am. Rep. 830; Hood v. Hayward, 124 N. Y. i, 16, 26 N. E.
33 1 ; Sloan v. Herrick, 49 Vt. 327 ; McCrillis v. Hawes, 38 Me. 566 ;
Miller v. Beck (lowa) 79 N. W. 344, 345 ; Price v. Barker, 4 El. & Bl.
760, 776, Tjy.
We are of opinion that the doctrine enunciated in the cases last
cited is supported by the greater weight of authority, and is founded
upon the better reasons. It has the merit of giving efïect to the in-
tention of the party who exécutes such an instrument, which should
always be done when the intention is manifest and it can be given
effect without violating any rule of law, morals, or public policy. Be-
sides, we are not aware of any sufficient reason which should preclude
a person who has sustained an injury through the wrongful act of
several persons from agreeing with one of the wrongdoers, who de-
sires to avoid litigation, to accept such sum by way of partial compen-
sation for the injury as he may be willing to pay, and to discharge him
from further liability without releasing his cause of action as against
the other wrongdoers. The law favors compromises generally, and it
is not perceived that an arrangement of the kind last mentioned should
be regarded with disfavor. The release which was read in évidence in
the case at bar plainly shows that the sum paid by Hysham was not
accepted by the plaintiffs as full compensation for the injury which
EIGGS V. UNION LIFE INS. CO. 207
they had sustained ; that it was not in fact full compensation for the
injury ; and that they had no intention of releasing their cause of ac-
tion as against Carey. Why, then, should it be given an effect con-
trary to the intent of the one who executed it? We perceive no adé-
quate reason for giving it such effect, and accordingly agrée with the
lower court that it did not release Carey.
The judgments below are therefore affirmed.
RIGGS et al. V. UNION LIFE INS. 00. OF INDIANA. SAME v. AMERICAN
CENT. LIFE INS. CO. SAME v. FIDELITÏ MUT. LIFE INS. CO.
SAME V. NOETHWESTERN NAT. LIFE INS. CO.
SAME V. HARTFORD LIFE INS. CO.
(Circuit Court of Appeals, Eighth Circuit March 23, 1904.)
Nos. 1,947-1,951.
1. Insubance Policy— Feaud— Remedy AT Law befoee Loss— Jtjeisdiction in
Equitt.
Before a loss under a policy of Insurance, tbe company whleh issued it
has no adéquate remedy at law for f raud, f aise représentations, or conceal-
ments which procured its issue, and a federr.1 court has jurisdiction in
equity of a suit for tlie surrender and cancellation of the policy.
2. Same— Remedy at Law aftee Loss.
After a loss under a policy of Insurance, the company whleh Issued it
ordinarily has an adéquate remedy at law for fraud, false représentations,
or false concealments whleh procured its Issue by presenting them as a
défense to any action that may be brought upon the policy, so that a suit
In equity for its surrender and cancellation, commenced after the loss,
cannot be maintained in the fédéral courts in the absence of spécial facts
or clrcumstances invoking jurisdiction in equity.
3. Same.
The fact that the action at law on the policy wlll be brought In a state
court does not render the remedy of the company at law in the fédéral
court so inadéquate that a suit In equity to avold the policy, commenced
after the loss, may be maintained, where the company has the right to
remove the action at law from the state to the fédéral court
4. Same.
Nor does the fact that the license of the company to do business In the
state in which the action at law Is to be commenced will be revoked if the
company removes that action to a fédéral court render Its remedy at law
in the fédéral court so inadéquate as to give that court jurisdiction in
equity of a suit to cancel the policy.
(Syllabus by the Judge.)
Appeals from the Circuit Court of the United States for the Western
District of Missouri.
For opinion below, see 123 Fed. 312.
Kendall B. Randolph and R. A. Hewitt, Jr. (W. H. Ha)mes, James
T. Blair, and William M. Fitch, on the brief), for appellants.
W. A. Kerr, Augustin Boice, and Stephen S. Brown (John E. Dol-
man, on the brief), for appellees.
Before SANBORN, THAYER, and HOOK, Circuit Judges.
î 1. See Cancellation of Instruments, vol. 8, Cent. Dig. § 13.
208 129 FEDBEAL REPORTER.
SANEORN, Circuit Judge. Thèse are appeals from orders of the
Circuit Court, which granted to the insurance companies interlocutory
injunctions against the executors of the last will of Eber B. Roloson
and others, who were défendants in thèse suits in the court below. The
injunctions forbid the executors or their codefendants to bring actions
at law upon or assign their clainis against the insurance companies
which are based upon poHcies of insurance issued by the latter upon
the Hfe of Eber B. Roloson, Avho died on February 28, 1903. The bills
in thèse cases were first exhibited after the death of Roloson. In them
the complainants, the insurance companies, allège that they are cor-
porations organized under laws of states other than the state wf Mis-
souri, that the défendants are citizens of the latter state, that the
amount in controversy in each of the suits is more than $2,000, that the
défendants in each case conspired together to procure and did pro-
cure the çomplainant in that case to issue a policy or policies of in-
surance which constitute the subject of that suit by fraudulent rep-
résentations and concealments, that the complainants hâve procured
their licenses to do business in many of the states upon the condition
that they will not remove actions or suits brought against them in the
courts of the states to the courts of the nation, and that the executors
will, if not enjoined by the court, assign their claims under the policies,^
and cause actions to be brought upon them in the courts of some state,
so that the insurance companies cannot remove thèse actions to the
fédéral courts without incurring the penalty of a revocation of their
licenses to do business in that state. No demurrers or answers were
interposed in thèse suits, and the cases stand upon the bills and upon
the orders for the injunctions. Thèse orders are challenged by the
défendants on the ground that the complainants had an adéquate rem-
edy at law, so that the court below was without jurisdiction of the
suits in equity, because, if the insurance companies are sued upon the
policies, they may remove the actions to the fédéral courts, and the
fraudulent représentations and concealments which induced the issue
of the policies will constitute perfect défenses to those actions.
Whatever doubt there may hâve been of the jurisdiction in equity
of the court below over thèse suits when the learned District Judge
considered that question and issued the injunctions bas been dispdled
by the later décision of the Suprême Court in Cable v. U. S. Life Ins.
Co., 191 U. S. 288, 24 Sup. Ct. 74, 48 L. Ed. 188. Before the loss
under an insurance policy occurs, a company bas no adéquate remedy
at law for the fraudulent représentations or concealments which induce
its issue, because an estoppel from denying its validity may arise in
favor of third persons who advance their money in reliance upon it,
and because the time when an opportunity will be ofïered to establish
the fraud as a défense to an action upon the policy is so remote and
uncertain that indispensable witnesses and évidence may, and probably
will, disappear before the opportunity will be offered. Hence a féd-
éral court sitting in equity has jurisdiction of a suit instituted before
the loss under a policy occurs to compel its cancellation and surren-
der on account of fraud or misrepresentation in its procurement, and
after the court has thus acquired jurisdiction by the commencement
of the suit before loss it may proceed to a final decree, although the
THE EDITH L. ALLEN. 209
loss occurs during the pendency of the suit, and before the final hear-
ing. Bacon on Benefit Societies and L,ife Insurance, § 285 ; Hamilton
V. Cummings, i Johns. Ch. 517; Home Ins. Co. v. Stanchfield, 12
Fed. Cas. 449, No. 6,660; Benefit Ass'n v. Parks, 81 Me. 79, 16 Atl.
339, 10 Am. St. Rep. 240.
But the décision of the Suprême Court in Cable v. U. S. Life Ins.
Co. has placed this proposition beyond doubt or debate: After a loss
under a policy the remedy of the insurance company at law for fraud,
false représentations, or concealments which induced its issue by pre-
senting them as a défense to the action that may be brought upon the
policy is not inadéquate because that action may be brought in a state
court, where the défendant will hâve the right to remove it to a féd-
éral court, although its removal to the latter court may resuit in a
revocation of the license of the insurance company to do business in
that State, nor because a défendant has no choice of the time or place
of the commencement of such an action, and less control of its con-
duct than the plaintiff, and a suit in equity to cancel the policy and to
prevent an action at law upon it cannot be maintained in the fédéral
courts upon thèse grounds. The jurisdiction of the court below in
equity is invoked for no other reason that is worthy of considération
or discussion, and the orders which granted the injunctions must be
reversed, and the cases must be remanded to the Circuit Court for
further proceedings not inconsistent with the views expressed in this
opinion, upon the authority of Cable v. U. S. Life Ins. Co., 191 U. S.
288, 24 Sup. Ct. 74, 48 L. Ed. 188 ; and it is so ordered.
THE EDITH L. ALLEN.
(Circuit Court of Appeals, Second Circuit. March 11, 1904.)
No. 132.
1. Salvage— Rbscue or Stbanded Schooneb— Réduction or Awabd.
A salTage award of $6,500 for the rescue of a schooner valued, as saved,
with her cargo and frelght, at $32,800, which was stranded on the coast
of New Jersey, reduced on appeal to $4,500 ; It appearlng to hâve been
Increased to some estent by a misapprehension by the trial judge of the
facts Bhown by the évidence as to the péril of the stranded vessel.
Appeal from the District Court of the United States for the South-
ern District of New York.
For opinion below, see 122 Fed. 729.
This cause cornes hère upon appeal from a decree of the district court,
Southern District of New York, awarding to Neal, as owner of the tug Som-
ers N. Smith, and to the American Salvage Company, which had a crew on
board said tug, the sum of $6,500 salvage for pulllng the schooner Edith K
Allen off the eastern edge of Brigantlne Shoal, on the coast of New Jersey,
and towlng her to the port of New York. The decree further awarded to Neal
the sum of $1,700 for damages alleged to hâve been sustained by the tug dur-
ing the salvage opération. The appellant contends that the court erred in
awarding anythlng for damages to the tug, and that the amount of salvage
awarded is excessive. It Is not disputed that salvage service was rendered.
The value of the schooner, as saved, her cargo and frelght, was $32,800. The
11 1. Salvage awards In fédéral courts, see note to The Lamlngton, 30 0. G.
A. 280.
129 F.— U
216 129 FEDERAL REPORTER.
value of the tng, speclally equlpped with the best appllances for wrecklng,
was $50,000.
Edward G. Benedict, for appellant
Henry G. Ward, for appellees.
Before WALLACE, LACOMBE, and COXE, Circuit Judges.
LACOMBE, Circuit Judge. The opinion of the District Court will
befound reported in 133 Fed. 729. It sets forth the facts so fuUy that
it is not necessary to undertake to restate them hère. It will be under-
stood that the conclusions of this court are based thereon, with such
modifications only as are hereinafter set forth.
While hauling on the schooner, February 3, 1902, the tug struck bot-
tom, certainly twice, possibly three times. Thèse blows were very sé-
vère ones. The engineer testified that he was at the throttle, handling
the engines, at the time, and that the blow came very near throwing
him down off his feet, and made the tools rattle in the fireroom, and
also shook the coal bunkers, boilers, and pipes in the engine room.
There were big swells running at the time, and she struck twice, at
least, between swells. So they paid out the hawser, and got into
deeper water. The day before, while near another stranded vessel, and
before the salvage service of the Allen was undertaken, the tug also
touched bottom, but that was a very slight contact — phe "just nudged
the bottom" — whereas, when she struck while hauling on the Allen, "it
was a barder strike. She came down on something, and it jarred her
ail over." The tug is a steèl boat, with a double bottom; the spaces
between the floors being filled up with cément and pig iron, making a
very solid structure. No leak developed after the blows testified to, and
no survey of her bottom was made till she was put on dry dock, two
months later, for her usual spring overhauling. It was then discov-
ered that her port side was damaged about amidships under the boilers.
some of the garboard streak plates were bent, and had to be taken oflE
and renewed, and the vertical floor under the forward fireroom bulk-
head was bent, buckled, and distorted so that several frames had to
be straightened. No holes were punched through the plates, but they
were fractured on the inside and at the rivet holes. The mechanic who
made the repairs had attended to the tug at her overhauling the
spring before, and testified that thèse injuries did not then exist. Her
master testified that he had been by the tug the whole of the time since
the prior overhauling — "every day, never been off her two hours" —
and that she never struck bottom during that period, except on the
occasions above set forth. Upon this uncontradicted évidence, the
district judge was warranted in finding that the injuries to the tug's
bottom were sustained during the salvage service, and his award there-
for was proper.
The amount awarded for salvage rests usually in the discrétion of the
court awarding it. Nevertheless, in The Bay of Naples, 48 Fed. 739,
I C. C. A. 81, we held that:
"Appellate courts will look to see if that discrétion has been exerclsed by
the court of flrst Instance In the splrlt of those décisions whlch higher tri-
bunals hâve recognized and enforced, and will readjust the amount if the
decree below does not follow in the path of authorty, even though no prin-
ciple has been violated or mistake made,"
THE EDITH L. ALLEN. 211
And a readjustment will more readily be made if the award below
appears to hâve been enlarged through some misapprehension of the
facts.
It is apparent that the salvors hâve been awarded a very high per-
centage of the amount salved. The appellant has submitted a list of
ail salvage cases found in the Fédéral Reporter down to date (say
volume 124), where wooden vessels hâve been rescued from a stranded
situation on the Atlantic Coast. They are given in a note, as a con-
venient supplément to the list given in the note to The Lamington, 86
Fed. 675, 30 C. C. A. 271. In the case at bar an important circum-
stance is the condition of the tide at stranding and until rescue. The
schooner stranded on the eastern edge of the shoal during a strong
squall from the northwest (offshore), which blew her headsails to pièces,
so that she came up to the wind; and, before they could get her off,
she was ashore. This was on Sunday, February 2d, at about 5 130 p. m.
The wind had been easterly, but by 1 1 a. m. it had shif ted to the west,
and blew from the west and northwest until the stranding, increasing
in violence. It had been blowing hard offshore for certainly four hours
before the "living gale" in which the master of the schooner sa) s she
went ashore, with the natural resuit of somewhat flattening the sea
and holding back the water. There is conflict between the weather rec-
ords at Atlantic City, six miles distant, and the witnesses from the life-
saving stations near Brigantine Shoal; but it may fairly be assumed,
as libelants contend, that during the night of Sunday, and during Mon-
day and Monday night until near midnight, there was a heavy offshore
blow. The heaviness of the blow was not an especial péril to the
schooner, since she was was not far enough offshore for the wind to
make much of a sea ; and, had she been blown off, she would not hâve
sunk, because her leaks, as the event showed, were not beyond the con-
trol of the pumps. This strong offshore wind, however, prevented the
natural rise of the tide. In conséquence the tug strove in vain to
haul her off — for two hours at high tide Monday afternoon, and again
for a like time at the next high tide, early Tuesday moming. There-
after, however, there came a change in the wind, which ceased to
operate to hold back the water, and in conséquence the next tide came
in with an unusual rush; and on the third pull, which began about
I p. m. Tuesday, February 4th, the schooner came off the shoal about
2 130 p. m., without any difficulty, and when the tide was only half high.
If this change in the wind had been one from offshore to onshore, the
schooner's position would hâve been serions, because, being without
headsails and heavily iced, as the water lifted her the wind would bave
driven her aground higher up on the shoal. A change, however, only
from a heavy to a light breeze, would not tend to produce such resuit,
and might allow her to get afloat by the use of her own anchor and
capstan. The évidence is uncontradicted that this was the only change.
The wind fell to less than six miles an hour, and, although for a brief
space it backed around to northeast, it remained westerly not only until
the schooner was pulled off, but during ail the rest of the week. It
would seem, however, that the district judge was under the impression
that the wind changed in direction as well as in velocity. He says:
"There can be little doubt that * * * the schooner was in great danger
of becoming a total loss, from a change of the wind to the eastward, which
212 129 FEDERAL KEI'ORTER.
was Impcndlng, and In fact occnrred before the schooner was floated." And
again: "The change in the wlnd, which brought a normal state of the tide,
was, o( course, an extremely Important feature in the proceeding. • • *
It appears hère that, in ail probability, without the opportune intervention of
the salvors, the change of wind, with the conséquent increase of depth of
water, though it might hâve caused the schooner to float temporarily, would
eventually hâve driven her higher up on the beaeh, and led to her total loss."
Manifestly this understanding of situation operated to increase the
award beyond what would otherwise hâve been made, and we think the
salvage should be reduced from $6,500 to $4,500.
The decree is reversed, with costs of this court to appellant, and
cause remanded to the District Court, with instructions to decree in
accordance with this opinion; costs of district court to Hbelants.
XOTE. Salvage cases cited on argument, being ail those in the first 124
volumes of Fédéral Reporter where a wooden vessel bas been rescued from a
stranded situation on the Atlantic Coast :
Mary E. Long (D. C.) 7 Fed. 364 4 %
Maggle Ellen (D. 0.) 19 Fed. 221 5 %
Andrevr Adams (D. C.) 36 Fed. 205. SSM> %
Nellie Floyd (D. C.) 36 Fed. 221 6V-, %
The Eleanor (D. C.) 42 Fed. 54,". 5 %
Thos. B. Garland (D. C.) 83 Fed. 1018 6% %
Agnes I. Grâce (D. 0.) 49 Fed. 602 42 %
The Fenobscot (D. C.) 103 Fed. 205 9 %
ïhos. L. James (D. C.) 115 Fed. 560 25%
In re GOLDMAN.
In re GILBERT.
(Circuit Court of Appeals, Second Circuit March 10, 1904.)
No. 188.
1. Bankruptgy— Reopening Estaxb— Discrétion of Couet.
While a court of bankruptcy has power to reopen the estate of a bank»
rupt to permit the trustée to maintain an action to recover concealed as-
sets, the granting of an application therefor rests to its discrétion, and
its action vcill not be reversed except for an abuse of discrétion.
Pétition to Review Order of the District Court of the United States
for the Southern District of New YOrk.
J. C. Bushby, for petitioner.
Nathan D. Stern, for respondent.
Before WALLACE, LACOMBE, and COXE, Circuit Judges.
PER CURIAM. We hâve no doubt of the power of the court to
reopen the estate of the bankrupt or of the right of the trustée to
maintain action necessary to recover concealed assets. But the motion
was addressed to the sound discrétion of the District Judge, and we
are not satisfied that it was not properly exercised, in the interests of
preventing litigation of insignificant importance. Had the application
been made by the original creditors it would be regarded with more
xavor.
WESTIXGHOUSE ELECTKIC & MFG. CO. V. MUTUAL LIFE INS. CO. 21o
WBSTINGHOUSB ELECTRIC & MFG. CO. V. MUTtTAL LIFB INS. CO. OF
Î^EW YORK et al.
(Circuit Court, W. D. New York. February 9, 1904.)
No. 188,
1. Patents— Anticipation— INFRINGEMENT— Electric Motors.
The Tesla patents, Nos. 511,559 and 511,560, the former covering a
method, and the latter certain apparatus or means of operating electric
motors by means of alternating eurrents from a single original source
known as the "split-phase" System, held not anticipated by the publication
in Milan of a lecture by Prof. Galileo Farraris April 22, 1888, on évidence
■which clearly and satisfactorily carries the invention back to September,
1887. Such patents also held valid, and both claims of the former and
claims 1 and 2 of tlie latter infringed by the Gutmann recording watt
meter.
2. Same— Suit foe Infeingement— Parties.
An agent is not properly joined with hls principal as a défendant In a
suit for Infringement because of acts done in his capacity as such agent.
In the absence of spécial circumstances.
3. Same— Défenses.
It is not a défense to a suit for infringement against a user that a de-
cree has previously been obtained against the maker, from whom the de-
fendant bought the infringing article.
In Equity. Suit for infringement of letters patent Nos. 511,559 and
511,560, relating to electric motors, granted to Nikola Tesla December
26, 1893. On final hearing.
Kerr, Page & Cooper, for complainant.
Martin Carey and Seward Davis (Charles A. Brown, of counsel), for
défendants.
HAZEL, District Judge. This suit in equity is brought to establish
infringement by the défendants of two United States letters patent
granted to Nikola Tesla, of which complainant is the owner by assign-
ment. The applications for both patents were filed December 8, 1888,
but, on account of interférence proceedings in the Patent Office, they
were not granted until December 26, 1893. Their numbers are 511,-
559 and 511,560, respectively. The infringements consist in the use
by the défendants of an alternating split-phase motor in an instrument
for measuring the amount of electric energy supplied to a consumer.
The instrument containing the motor is technically known as a "re-
cording watt meter." The infringing apparatus used by the défend-
ants in a building at Elmira, N. Y., is the Gutmann meter. The dé-
fense is want of patentability, noninfringement, and anticipation. Pat-
ent No. 511,559 has two claims, both of which are said to be infringed.
They read as follows :
"(1) The method of operating motors havlng independent energizing circuits,
as herein set forth, which consists in passing alternating eurrents through both
If 2. See Patents, vol. 38, Cent. Dig. §§ 459, 471,
214 120 FEDBKAL REPORTER.
of the said circuits, and retarding the phases of tlie carrent In one circuit t»
a greater or less extent than In the other.
"(2) The method of operating motors having Independent energlzing circuits,
as herein set forth, which consists in direeting an alternating current from
a single source through both circuits of the motor, and varying or modifying
the relative résistance or self-induction of the motor circuits, and thereby pro-
ducing in the currents différences of phase, as set forth."
The first daim relates broadly to the method and extent of retar da-
tion of the phase of the current. The second claim refers specifically
to the method of accompHshing in the electric currents a différence of
phase. Infringement is also charged of claims i and 2 of the patent
No. 511,560, which read as follows:
"(1) The combination, with a source of alternating currents and a circuit
from the same, of a motor having independent energlzing circuits connected
with the said circuit, and means for rendering the niagnetlc efCects due to said
energlzing circuits of différent phase, and an armature within the influence
of said energlzing circuits.
"(2) The combination, with a source of alternating currents and a circuit
from the same of a motor having independent energlzing circuits connected
in dérivation or multiple arc with the said circuit, the motor or energlzing
circuits being of différent electrical character, whereby the alternating currents
thereln will hâve a différence of phase, as set forth."
Thèse claims with particularity refer to an apparatus for efFecting
the object of process patent No. 511,559, and specifying the devices
constituting the split-phase motor with a single line or circuit. It is
practically conceded that infringement of either of the claims involves '
the complète use of the entire System described in the spécifications.
The patents in suit are improvements on a séries of five earlier patents
which are the basic inventions for a class of motors called the poly-
phasé motors for power transmission, or rotating field alternating mo-
tors. They are operated by alternating currents of electricity. The
improvement patents hère considered relate to the split-phase motor.
It is not intended to discuss the scope of thèse patents in détail, for the
reason that the claims involved hâve been uniformly construed in one
form or another in a variety of litigations which hâve followed the
Tesla polyphasé and the split-phase patents from the time of their
issuance. The patents in suit especially hâve been attacked with well-
directed, vigorous, and resolute pertinacity. The fundamental prin-
ciples upon which a différence of phase in circuits is based hâve been
set forth with elaborate détail in prior opinions by Circuit Courts and
Circuit Courts of Appeals, notably by Judge Townsend in the case of
Westinghouse v. New England Granité Co. et al. (C. C.) 103 Fed. 951,
which was a suit upon the broad Tesla patents of May r, 1888, Nos.
381,968, 382,279, and 382,280; by Judge Shipman in the same case
. for the Circuit Court of Appeals, iio Fed. 753, 49 C. C. A. 151; by
Judge Brown in Westinghouse Co. v. Royal Weaving Co. (C. C.) 115
Fed. 733 ; by Judge McPherson in Tesla Electric Co. v. Scott &
Janney et al. (C. C.) 97 Fed. 558; by Judge Thompson in Westing-
house Co. v. Dayton Fan & Motor Co. (C. C.) 106 Fed. 724, and in the
same case by Judge Severens, who wrote the opinion for the Circuit
Court of Appeals for the Sixth Circuit, 118 Fed. 562, 55 C. C. A.
WESTINGHOUSE ELECTRIC & MFG. CO. V. MUTUAL LIFE INS. CO. 215
390; by Judge Lacombe in Westinghouse Co. v. The Catskill Illumi-
nating Co. (C. C.) iio Fed. 377, and in the same case by Judge Town-
send for the Circuit Court of Appeals, reversing the décision of the
Circuit Court, 121 Fed. 831, 58 C. C. A. 167; and recently by Judge
Coït in Westinghouse Co. v. Stanley Electric Co., and by Judge Arch-
bald in Westinghouse Co. v. Hiram C. Roberts (C. C.) 125 Fed. 6. It
would, indeed, be a work of supererogation to hère attempt an analysis
of the involved claims and their scope, specially in view of the ex-
tremely technical character of the abstruse questions involved, and their
previous exhaustive and comprehensive considération by the courts.
In the Catskill case the Circuit Court, considering the Tesla patents
in suit and the défenses there raised, sustained their validity, and un-
qualifiedly concurred in the décisions of Tesla Electric Co. v. Scott &
Janney et al. and Westinghouse Co. v. Dayton Fan & Motor Co.,
supra. The Circuit Court of Appeals, however, reversed the déci-
sion upon the ground that the publication of a magazine article on April
22, 1888, by Prof. Galileo Ferraris, fully described and disclosed the
System covered by the patents in suit. This publication upon the évi-
dence in that case vsras found to be prior to the date of the inventions in
suit, and constituted an anticipation. It is quite apparent that the
Circuit Court of Appeals did not intend to disaffirm or disapprove the
conclusion of the Circuit Court upon any other ground, although no
other issues were expressly discussed. By implication, at least, the
novelty and validity of the patents Nos. 511,559 and 511,560, as found
by the Circuit Court, were concurred in and sustained. Upon that
point the opinion of the Circuit Court of Appeals states :
"By the method and means therein described, Tesla dispensed wlth one of
the line circuits, and was able to run the motor by means of alternating cur-
rents from a single original source. This was accomplished, as appears from
the foregoing claims, by means which retarded the phases of the current In
ail circuits, or so varied the relative résistance of the motor circuits as to
maintain the necessary difCerenee in phase in the currents. Such utilization
of a single original source by thus splitting a single current into two currents
was an improvement of great practical value."
This construction will be adopted by this court. The conclusions
in patent cases by courts of concurrent jurisdiction, though the parties
are différent, are in themselves strongly persuasive of their soundness ;
but, virhen thèse questions hâve been reviewed on appeal and sustained,
the doctrine of res adjudicata, provided no new évidence upon the sub-
ject is shown, has undoubted application.
I am now brought to the question of anticipation. Are patents Nos.
511,559 and 511,560 invalid because anticipated by the admitted pub-
lication of Prof. Galileo Ferraris on April 22, 1888, in Turin, Italy?
It is not controverted that this publication completely described the
process and method of operating motors, as set out in the spécifications
and claims in suit. The Tesla split-phase patents, as has been stated,
were granted December 23, 1893, upon applications filed December
8, 1888, eight months after the Ferraris publication. Upon careful
considération of the proofs, I hâve arrived at the conclusion that the
actual date of the Tesla inventions is prior to this publication, and that
216 129 FEDB3EAL REPORTER.
the patents were not void for anticipation. According to tlie évidence,
Tesla conceived his invention in iiis laboratory. No. 89 Liberty street,
New York City, and çompleted the same in the month of September,
J887. He made discïosure thereof to others during the fall of 1887,
especially to Mr. Brovvn and Mr. NelHs, witnesses for complainant,
and subsequently in the month of April, prior to the Ferraris pubhca-
tion, to his solicitor, Mr. Page. The défense of anticipation raises a
question of much importance. Evidence in support of the claim of
earlier conception than the date of the application, discïosure of the
invention, and its actual réduction to practice must be received with
great caution. Unless such inventions were actually made and per-
fected before the date of the Ferraris publication, the patents cannot
be sustained. The burden is upon the complainant, under the cir-
cumstances, to establish by clear, unequivocal, and convincing proof
that the anticipation has been anticipated. Westinghouse Co. v. Sara-
nac Lake Electric Light Co. (C. C.) 108 Fed. 221 ; Thayer v. Hart
(C. C.) 20 Fed. 693 ; St. Paul Plow Works v. Starling, 140 U. S. 184,
II Sup. Ct. 803, 35 L. Ed. 404. Has the complainant complied with
the rule ? Tesla, to sustain an earlier date of invention than the date of
the application, and as a part of the complainant's prima facie case,
gives testimony tending to establish the foUoviàng facts : In the au-
tumn of 1887, assisted by Mr. Szigeti, he was engaged in his laboratory
at No. 89 Liberty street, New York, in perfecting différent types and
sizes of alternating current motors. Complainant has been unable to
locate Szigeti, which tends to explain his failure to corroborate Tesla
upon this point. In July, 1888, Tesla sold his polyphasé and split-
phase patents to the complainant corporation, and, entering its employ,
took up a temporary résidence in Pittsburg, where complainant's fac-
tory was located. During his absence of one year from New York,
the laboratory was moved by his assistant from Liberty street, and
later, after his return to New York, again moved to South Fifth ave-
nue, where in 1895 i^ was consumed by a fire which destroyed ail his
motors, except the "Exhibit Tesla Motor." This apparatus had been
reduced to practical form, according to the évidence, in September,
1887, and was in the Patent Office at Washington at the time of the
fire. It had been iised as an exhibit in proceedings in interférence
with Ferraris, and was produced as new évidence upon the hearing
of this case. It is shown to be capable of successful opération by two
wires, as indicated in the spécifications of patent No. 511,560. The
transaction to which Tesla's narrative relates occurred fully 15 years
ago. Examination and considération of ail the testimony disclosed by
the record satisfies me, even after this lapse of time, of its truthfulness
and its accuracy. The conclusion is not reached without some degree
of hésitation, solely due, however, to the views expressed by the Cir-
cuit Court of Appeals of this Circuit, in the Catskill Case, regarding
the proof there submitted upon this question. This proof constitutes
a portion of the évidence hère, and will be treated hereafter. The
standard of proof required, where anticipation has been clearly shown,
to carry the invention back to a date earlier than the application, has
been abundantly supplied in the présent record. Hère the testimony
WESTINGHOUSE ELECTRIC & MFG. CO. V. MUTUAL LIFE INS. CO. ^ll
of Tesia, emphatically and unequivocally narrated, sufficiently sup-
ported by other witnesses, as to the spécifie construction of the exhibit
motor and its operativeness as a split-phase derivative motor in the
month of September, 1887, impels me to the conclusion that its actual
invention is prior to the date of the Ferraris pubhcation. In the case
at bar, the circumstances surrounding the earlier date of invention and
the subséquent facts indubitably lead to the conclusion that an earlier
date of invention has been definitely fixed and established. Accord-
ing to Tesla, the expérimental motor in évidence was one of the earliest
constructed, and was operated by him almost daily in September, 1887,
upon the split-phase dérivation System. His description of the way
in which the two circuits were connected preparatory to securing the
necessary différence of phase for the opération of the motor is entitled
to weight, and is fairly corroborated by the testimony of Mr. Brown,
to whom, with others, the single-wire System of motor opération was
disclosed and explained. Tesla testifies further that subsequently, and
early in April, 1888, he disclosed the invention to his solicitor, Mr.
Page, who was then engaged in preparing an application for an im-
provement patent upon one of Tesla's earlier inventions. This com-
munication is corroborated by Mr. Page, who testifies that the subject
of such application was thereafter fully and frequently discussed.
The two-wire induction motor was regarded by them as being the
raost important type of motors, and accordingly was fully described
in the application filed May 15, 1888, without mentioning the dérivation
feature. Nellis, witness for complainant, testifies to the practicability
and operativeness of the Tesla exhibit motor in the years 1887 and
1888. His testimony is to be received with caution, as he was not
an electrician. It appears from the proofs that the expérimental mo-
tor admittedly was capable of use in varions way s, either as a trans-
former or polyphasé motor, and therefore the testimony of Nellis,
aside from his observations, which would be entitled to no probative
effect, ought not to be entirely disregarded. So far as such testimony
shows an indépendant recollection of facts and détails, it is entitled
to weight. I am unable to perceive any sufficient reason why his
narrative of what he saw at particular tinies should not be given cre-
dence. Certainly his opportunity for observation was enticing; the
laboratory was guardedly closed to the public and open to few, and
the experiments of a trained expert in the intricate subject of elec-
tricity, fascinating to a mechanic, may well hâve made an impression.
He testifies that he furnished power at night whenever Tesla tested
his apparatus. It appears that Tesla showed him the method of op-
erating with two wires the exhibit motor, which the witness says was
thus revolved and reversed. The testimony leaves an undoubted im-
pression upon the mind that, however unskilled this witness may hâve
been shown, he had a clear recollection that the armature was revolved
and reversed by the manipulation of two wires. Such opération of
the apparatus, crudely and superficially stated, was substantially the
discovery described in the Tesla patents in suit. It is argued that Ut-
ile stress ought to be placed upon this évidence in the absence of facts
showing that the expérimental motor was capable of opération with-
218 129 FEDEBAL EEPOETElt.
out the use of auxilîary devices. As already observed, standing alone
it would not be entitled to considération, but, when considered witli
the testimony of Tesla and Brown, it cannot be denied some degree
of weight. The complainant's witness Brown, by his admission, was
financially interested in the patents of Tesla, and this fact undoubt-
edly tends to detract from the force of his testimony, but no sufficient
reason is apparent to disregard it. He testifies substantially that the
motors of the derivative split-phase type were first made by Tesla in
his laboratory in the summer or fall of 1887, and that the exhibit
"Tesla Motor" was successfully operated many times in his présence.
He says:
"It was operated by means of an alternatlng current, from which were
taken two derlved currents, one passlng through one winding and the other
through the other. It was operated as an induction motor, or by means of
putting external résistance in one of the derived circuits."
The witness had some skill in the practical application of ■ electricity,
and his description of the apparatus conforms to the appearance of
the exhibit motor. It was prior to or during September, 1887, that
Tesla communicated to him the method of effecting a retardation to
produce a différence in phase by putting an inductive résistance on
one of the two derived circuits from the main circuit. Tesla also com-
municated to his soliciter that the rotary field motor was capable of
direct opération from a single circuit, as well as from two or more
independent circuits from the current source. To one who had thus
recently drawn spécifications covering the polyphasé System of motors,
the communication that such motors were capable of successful opéra-
tion from a single circuit by a method of "splitting" or "dérivation,"
thereby dispensing with one of the circuits, must hâve been not only
interesting but surprising. I quite agrée that it was astonishing that
the disclosure by Tesla to his solicitor was not made earlier; but the
reason assigned by Mr. Tesla himself deserves more than passing at-
tention. Upon this point he testifies that he did not wish to apply for
a patent for the later invention until the patents for his polyphasé
System were granted, being apprehensive that the later would minimize
the importance of the earlier. It appears from the évidence of Mr.
Page that, upon receiving the disclosure early in April, he became
apprehensive that the applications then filed, and for which patents
were soon to be granted, were not sufficiently spécifie to include the
later method. Accordingly, he advised with his associâtes at home,
and later in Washington, in relation to modifying or amending the
pending claims, and in devising a future course to protect the later
invention. The conclusion reached was that an earlier patent covered
the invention, and hence the delay in not at once filing application.
Attention is called to a written charge for services rendered by Mr.
Page, under date of April 27th, upon which stress is laid by complain-
ant, and to which Judge Archbald, in his opinion in the Roberts Case,
attached much significance. I do not attach like emphasis to this point.
In my mind, it is quite probable that the said charge, as well as the
trip to Washington, may hâve related to the application of May I5th,
which, as I understand the évidence, had référence to the inductive
WESTINGHOUSE ELECTRIC & MFG. GO. V. MUTUAL LIFE INS. GO. U19
split-phase feature, and not to a motor "connectée! in dérivation or
multiple arc with the circuit." Irrespective, therefore, of tlie entry in
Mr. Page's lost diary of a charge for services rendered, the resuit of
ail the évidence establishes the disclosure by Tesla, in the manner and
at the time stated by him, clearly, directly, and persuasively. This con-
clusion is strengthened by many other facts and circumstances, disclosed
by the record, tending to corroborate an earlier date for the invention.
The testimony of Mr. Stanley, witness for défendant, deserves to be
noted. On his direct examination he testifies that between May 15
and June 15, 1888, he had an interview with Mr. Tesla in his laboratory;
that nothing was said on the subject of a two-wire motor, nor were
any experiments made by Tesla in his présence. Later, when con-
fronted with a letter addressed to George Westinghouse, written by
him under date of June 24, 1888, he admitted the truth of its con-
tents. The letter states that Tesla spoke of having run the motors
by one circuit with a retarding coil in one set of circuits, and mention
is made of the manner in which the resuit is achieved, namely, by
"changing the lag in one set of circuits, and using the différence in
phase between direct and indirect magnetization." True, this letter
was written and the interview took place two months after the Ferraris
publication, but it is a circumstance which has weight in support of
complainant's contention. It certainly dissipâtes the argument, based
upon the witness Darlington's testimony, that when Tesla was in Pitts-
burg he was ignorant of the dérivation method. Furthermore, Tesla
has satisfactorily explained his failure to disclose his invention to
Prof. Anthony, while at the factory of the Mather Electric Company,
whereby two currents of différent phase could be derived from a single
source. It appears that he was admonished by Mr. Brown and Mr.
Peck, both financially associated with him, to remain silent, and later,
upon the advice of counsel, he again declined to furnish information
sought regarding his invention. Thèse are ail significant facts, which
in my judgment supply the definiteness and certainty on the question
of priority of invention which the court found absent in the Catskill
Case. For thèse reasons, the date of the inventions in suit is carried
back to September, 1887.
As to infringement. It was held by Judge Lacombe in the Cats-
kill Case, and by Judge Archbald in the Roberts Case, cases in which
the infringing devices were équivalent, that, inasmuch as the meter
armature of the defendant's apparatus "rotâtes against the action of
a permanent magnet, and turns the spindle which opérâtes the regis-
tering device," the production of some power is necessarily involved,
and accordingly it was held to be immaterial that the structures of
the patent involved power transmission Systems, while that of the de-
fendant involved a meter. The defendant's apparatus in the Roberts
Case being practically identical with the defendant's device in this case,
the conclusion and reasoning of the court in that case upon the ques-
tion of infringement will be followed hère. It is contended by the
défendant that the disk or armature of its apparatus is rotated as a
resuit of the energizing out of phase currents acting in unison upon it ;
that the position of the disk in the defendant's apparatus is horizontal,
220 129 FBDBEAL KEPOHTER.
havîng two electro-magnets placed in relation thereto in such a way
that the magnetism intersects the same on the same radius; that one
of the magnets located near the disk's edge receives a "shunt" car-
rent — that is, a current derived from the main circuit — and tlie other
is energized by the "séries" or main current. It is further contended
that the said electro-magnets are so arranged in the meter as to pro-
duce electric currents of differing phase, namely, that the construction
of tlie shunt magnet and the coils which surround it produces a cer-
tain amount of self-induction, while, on the other hand, the function
of the séries magnet, which has little or none of the retarding eflfect
mentioned, is to create a magnetic force in the plane of the disk, and
by their joint action cause it to rota te. The rapidity of its rotation,
according to defendant's view, is "arranged to be proportional to the
flow of the current employed by the consumer, passing through the
séries coil, and also proportional to the electrical pressure between the
mains or the flow of current through the shunt coil." This descrip-
tion, and the manner of operating defendant's meter, in my opinion
does not difïerentiate the same from Tesla's primary patents, to which
références are made in the patents in suit, and which describe a mode
of opération depending entirely upon a rotation or "whirling field of
force," in which the magnetic pôle shifts from point to point about the
])eriphery of the armature, resulting in its rotation. No evidential
value is attached to the defendant's theory upon this point in view
of the indisputable proof that the efïect of the achievement by the de-
fendant's meter practically consists in the utilization of the Tesla
method of producing a différence of phase in the energizing circuits.
In the Roberts Case the armature consisted of a hollow vertical cylinder
having slanting slots, while in the case at bar the armature in the form
of a horizontal disk has spiral slots, and the pôles of différent phase
are so constructed in relation thereto, as has already been pointed out,
as to deflect through the radial slots of the disk the magnetic eft'ect
produced by the pôles. I concur in tlie analysis of this feature of the
defendant's apparatus, as stated by Judge Archbald. In referring to
the eddy curents formed in the armature under the field pôles, he says :
"The fleld pôles, AA, at one end, are deflected by the slots In the cylinder,
so as to corne under the Influence of the fleld pôles, BB, of differing phase at
the other end, and that it is the résultant magnetic efCect of the two that
causes the rotation of the armature. That it is this résultant effect that is
sought and obtained is manifest, else why the deflecting slots, the only func-
tion of which ia to extend the eddy currents from one to the other? Cut this
off, or dispense with one set of pôles, and you hâve no rotation, or only a most
feeble one, explainable on other principles."
The record discloses that the Tesla patents describe armatures as
disks wherein field pôles are presented radially to their periphery, while
in the defendant's motor the pôles are perpendicular to the disk. Thèse
structural différences are immaterial. Other différences hâve been
pointed out, but it is thought that they are merely a différence in form,
and not such as affect the merits of the patents in suit. The Gutmann
meter without the registering attachment, is appropriately described by
the following diagram prepared by complainant's expert witness Water-
man:
WESTINGHOUSE ELECTKIC & MFG. CO. V. MUTUAL LIFE INS. CO. 221
svTf^AA/a-iiE re/i.
ÙUTMANH • fl£ T£B
ttHC/lATOK.
"D represents a disk of aluminuin, whlch serves as the armature. BB are
two colis of coarse wire with short iron cores which are placed on opposite
faces of the disk near Its center, and C Is a magnetic core carrying a fine wire
coil, A, and having its pôles presented to opposite faces of the disk at a point
near the edge of the latter. The coarse-wire coils, B, constitute one energiz-
ing circuit, while the fine-wlre coil, A, Is the other energizing circuit. Thèse
two circuits form paths through whlch the current proceeding from an alter-
nating current generator, G, divides, and as the path or branch Includiug the
coils, B, has but a few turns of coarse wire surroundlng a small amount of
iron, w^hile the path Including the coil. A, has very many turns of fine wire
surroundlng a large Iron core, the latter path will hâve a very high self-In-
duction as compared wlth the first, and hence the current which passes
through it will be greatly delayed in phase with respect to that in the other
or coarse-wire path."
It is wholly unnecessary to comment upon the inventions of Caba-
nellas, Dumesnil, and others relied on in anticipation, or to again
construe with greater particularity the claims in suit. This has been
exhaustively and comprehensively donc in the later adjudications in
the Circuit Courts, to which attention has been called. Furthermore,
the distinguishing features described in the alleged anticipatory patents
hâve often with great particularity been explained by the courts. It is
enough that it is satisfactorily shown by the proofs that the apparatus
of the défendant is constructed by a method of applying the energiz-
ing circuits in différent phases, and that the effective results of the
armature or disk are achieved in the defendant's motor by the mode
of opération described by both claims of patent No. 511,559 and claims
I and 2 of patent No. 511,560. Those claims, therefore, are held to be
infringed.
Two other points pressed at the argument, viz., that the défendant
Mandeville is not a proper party défendant, and that the meters which
are the subject of this suit were sold to the défendant insurance com-
222 129 FEDERAL REPORTIOli.
pany by the Western Electric Company, against which this complain-
ant has already had a deeree, need to be decided. The first point is
sustained. The défendant Mandeville, in the absence of spécial cause,
is net chargeable with infringement in his capacity as agent, especially
as the real substantial infringer is before the court, and hence the bill
as to him is dismissed with costs. The second point is overruled on
the authority of Birdsell v. Shaliol, 112 U. S. 485, 5 Sup. Ct. 244, 28
L. Ed. 768; Kelley v. Ypsilanti Mfg. Co. (C. C.) 44 Fed. 19, 10
L. R. A. 686; Electric Gas-Lighting Co. v. Wollensak (C. C.) 70
Fed. 790.
It follows that the patents in suit are valid. The défendant has
failed to establish any of the grounds upon which complainant's right
to sue for infringement dépends, and complainant is therefore entitled
to a deeree in the usual form, with costs and disbursements.
WATTS et al. V. UNITED STATES.
(District Court, S. D. New York. April 8, 1904)
1. Collision— Damages— FiNDiNGS ov Commissioxer.
The flnding of a commissioner as to the value of a vessel sunk In col-
lision, made on conflicting évidence, will not be disturbed unless error
or mistake is clearly apparent.
2. Same— Suit against United States— Interest.
A court of admiralty, in a suit brought against the United States, un-
der a spécial act of Congress, to recover damages for the loss of a Brll-
Ish vessel through collision vs'ith a naval vessel, has no authority to allovr
interest as a part of such damages, vi^here the spécial act is sllent on the
subject; the gênerai rule belng that Interest is not recoverable against
the government, and such being the statutory rule governing suits in the
court of claims.
In Admiralty. On exceptions to commissioner's report.
See 123 Fed. 105.
Wing, Putnam & Burlingham, for the exceptions.
Henry L. Burnett, U. S. Dist. Atty., and Arthur M. King, Asst, U.
S. Dist. Atty,
ADAMS, District Judge. The first three exceptions relate to the
value of the steamship Foscolia. They are:
"First For that the Commissioner found the value of the Foscolia at the
time of the collision at only $GO,000 instead of £17,000 ($82,730) or £15,000
($72,997) as testifled to by the London witnesses, Burgess and Gordon respect-
Ively ; also that the Commissioner by said valuation rejected in efiCect the
estimâtes of the three New York witnesses called for the libellants, namely,
Saunders, who proved a value at £14,538 ($70,654.68), Clark, who showed a
valuation of £14,500 ($70,542.50), and Garmey, who appraised the ship at $63,-
611.94.
Second. For that the Commissioner did not regard, or dld not give due and
sufflcient weight to, the high rates of freight proved to be prevaillng in May
1898, which enhanced the earning power of cargo steamers like the Foscolia,
and necessarily increased the market value thereof.
î 1. See Collision, vol. 10, Cent. Dig. $ 306.
WATTS V. TTNITBD STATES. 223
Thlrd. For that in Us valuatlon the Commlssloner assumed that the Fos-
colla could as readlly be sold hère as In Bngland, whereas the value of such
a vessel In her home port, to wlt, In London, is the correct measure of the
owners' loss."
The finding of the Commissioner is not in accordance with the esti-
mate of any one witness but his report shows that he reached his resuit
through a considération of ail of the testimony. His conclusion was
arrived at from conflicting évidence and should not be disturbed unless
error or mistake is clearly apparent — Panama R. Co. v. Napier Shipping
Co., Ltd., 6i Fed. 408, 9 C. C. A. 553 ; The Elton, 83 Fed. 519, 31 C. C.
A. 496 — which is not the case hère. On the contrary, the award is a
conservative one, taking into account the testimony adduced both hère
and in England and is consistent with the weight of the évidence.
The following is his report upon this subject, which I adopt:
"There Is testimony on the part of her owners to the effect that the Fos-
colia had been a very profitable vessel, and some of the testimony taken by
them in Bngland on the question of value appears to hâve been largely Influ-
enced by this fact Libellants' counsel argues that the value of the vessel
to the owners is a better measure of damages than the estimâtes of experts,
and quotes from the opinion of Mr. Justice Barnes in the Harmonides, 9 Asp.
Mar. Cases, 354, in which this vIew Is apparently taken. But the décisions
of our courts are to the effect that this Is not the proper test, and that In the
absence of spécial circumstances the amount for which the vessel would hâve
sold In the open market Is the true lest of value. Nor do I think that because
of our navigation laws greater weight should be given to the London testi-
mony than to that taken In New York, since one of the wltnesses examined
hère stated that the value given by him was that of London, and the other
New York witnesses dld not take the navigation laws Into considération as
affecting the value, It being assumed that, for the purposes of the enquiry,
the Foscolia could be as readlly sold hère as In England.
The Foscolia was an Iron steamship built at Newcastle, England, In 1879,
at a contract price of £23,074. Some of the Government witnesses consldered
this a large sum to pay for her at that time, and it appears that bids w^ere not
asked for when she was built ; but Mr. Burgess, one of the owners, testifled
that he knew what values were at that time and believed he got the lowest
rates, Wltnesses for the owners testifled that iron vessels hâve more en-
durance than Steel vessels, and this has not been dlsputed by the Government.
The Foscolia was of the double-deck type, with three tiers of deck beams, had
one iron deck and one deck partly Iron and partly wood, high forecastle solid,
bridge and high poop. She had compound engines, and her average speed
was 9 knots when loaded, on a coal consumption of 12 tons per day. She was
classed 100 A 1 with a star, in the Britlsh Lloyds, which is the highest class
and indicates that she was built under a spécial survey. She had retained
that class from the beginning, passing the periodical surveys, and she was
entltled to be continued in it as long as her owners complied with the Lloyds
requirements. Her last survey was In September, 1897, about seven months
before her loss, and under It the vessel would bave retained her class for
four years, barrlng accidents. The engines and boilers were the same that
were originally placed in her, but they had been subject to annual inspection,
and in September, 1897, were certlfied for 12 months. From the time she
was built her owners had spent £12,136/9/6 on her in repairs and renewals,
and the testimony shows that she had been thoroughly kept up.
To prove value, two witnesses were examined In London on behalf of the
owners, and one on behalf of the Government, besides the wltnesses who tes-
tifled hère. Thelr values were given as of May, 1898, when the vessel was
lost.
Mr. Burgess, one of the English owners, whose business and expérience
qualifled him to testlfy on the subject, placed the value at £17,000. This is
the highest estimate given by any witness, and liis interest in the matter may
224 129 FEDERAL REPORTER.
have led Mm to place too great a value on the vesscl. Moreover, thîs appears
to be hls estimate of her commercial value to his firm, since he says: 'To
us, a going concern, the steamer was worth at least £17,000.'
Mr. Gordon, the other London witness for the owners, was an offlcer of a
Company ownlng a large number of steamsbips, and had a long expérience
In the purchase, ownership and management of steamships. He valued the
Foscolla at £15,000. He States that there was a demand for shlps of her
class at that time, not in England, but from foreigners, who were buying
largely ; such vessels were well adapted for the Baltic and Black Sea trades,
but were not then belng built in England. Mr. Gordon had never been aboard
the vessel, although he had seen her some years before her loss. In explain-
Ing his method of flxing the value, he said that he took into considération
his own steamers of similar biiild and âge, their Insured values for that year,
and their earning capacity. He also States that for this particular year,
'the earning quality of the boat is an absolute test of value.' Elsewhere,
however, he disclaimed taking the Insured value into considération as an
élément, and said that his estimate was based upon hls knowledge of ships
of similar type and slze. He seems to have been in error as to the âge of
the vessel, since he refers to her as 'practieally new' In 1892, when In fact
she was 13 years old. When asked what, under normal conditions, would
be the percentage of détérioration for a vessel costing £23,074 In 1879, he said
that he could not answer the question with référence to the Foscolla, since
she was probably worth nearer £30,000 than £23,000 in 1881, and in the neigh-
borhood of £29,000 when she was 5 years old, because vessel values Increased
enormously during that period.
Mr. Thompson, the London witness examlned on behalf of the Government,
was not a vessel owner, but was a surveyor and appraiser of vessels, and a
naval archltect and engineer ; his expérience, extending over some 40 years,
included superintending the construction of shlps and frequently testifying
as to ship values in the admiralty courts. He valued the Foscolla at £11,000.
He says, however, that if the owners had gone into the market in May, 1898,
to contract for the building of a similar steamer, the cost would, in his judg-
ment, have been about £23,000. He bas no knowledge of the vessel beyond
the records in Lloyds' Eegister. He said that in flxing the value, he assumed
that she was a good dead weight carrier, that she was in a condition for sea,
that her original boilers were still in her, and that no large structural re-
pairs had been recently made; he had kept informed as to actual sales, and
such sales had entered into his computation ; the fact that the vessel's boilers
had nerver been renewed materially affected his valuation.
Five witnesses were examined in New York on the question of value.
Thèse were Herbert B. Saunders, John Garmey and Arthur H. Clark on behalf
of the owners, and Horace See and Thomas Congdon on behalf of the Gov-
ernment. Their estimâtes ranged from $70,654.68 to $52,500.
Mr. Saunders Is a marine appraiser and surveyor for underwriters, and has
acted in this port about 4 years. His knowledge of the Foscolla was derived
from Lloyds' Eegister, although he said that he had seen the vessel and 'went
across her' on one occasion. There is some confusion in his figures, since
he changea his resuit once or twlce because of inaccurate data on which he
had made his calculatlons, and errors in Computing, but after making his cor-
rections he testifled that the value was £14,538, or $70,654.68. He worked
out this resuit by applying a System of déductions for dépréciation at varions
stages in the life of the ship.
Mr. Garmey is superintendent of the Prince Line, which has a large number
of cargo steamships plying in varions parts of the world, he has bought and
sold vessels and had occasion to value and appraise them. His knowledge
of the Foscolla was confined to shipping records and other information brought
out in the testlmony. He valued her at $63,611.94. His method was to make
a déduction of a certain percentage from her original cost at the date of each
of the periodical surveys which she underwent, so that when she passed her
last survey, in 1897, thèse déductions amounted to 40% of her original cost;
and flnally, on ascertalning that the vessel had run in the iron ore trade in
the last years of her existence, he took ofC 10% more, for the wear and tear
which hè consldered incidental to this rough trade. He said that he ap-
WATTS V. UNITED STATES. 223
proached the subject in the attitude of an Intendlng purchaser, and valued
the vessel at what he would hâve been wilUng to pay for her ; hls estlmate
had not been influenced In any way because of the fact that the United States
was at war and was procuring vessels.
Mr. Clark was at one time a master mariner, but bas been Lloyds' agent
in New York for the past 8 years ; he was in London from 1877 to 1890 as
agent for New York and Boston Underwriters, and has also been chief sur-
veyor to the Record of America and Foreign Shlpping ; he has had to do with
the valuatlon of vessels in London and keeps posted about vessels in New
York. He valued the vessel at £14,500 or $70,542.50. He had never seen her,
but based hls estimate on the surveys and data furnished him. He took the
original eost of £23,000, which, with the repairs, renewals and other expenses
amounting to £12,000, made a total of £35,000, which the owners had spent
on the ship ; but in the £12,000 there were a good many items which, although
necessary, did not increase the intrinsic value of the ship, such as survey-
ors' fées and dry docking ; for this reason he rejected 50% of the £12,000, re-
ducing It to £6,000, which, deducted from £35,000, left £29,000; bearing In
mind the high class of the vessel, and the fact that her earning capacity was
not impaired (since she could earn as much money for her owners as a new
ship of her size and type could) but considering that she was 19 years old, he
thought it would be fair to strike off half of the amount expended on her, or
£14,500 ; he was also mlndful of the fact that in 1898 ship property was any-
where from 25 to 30% more valuable than at présent; he also took into ac-
count the fact that she had her original bollers, but he found that they did
not carry a very high pressure of steam, and for that reason they would
probably outlast boilers carrying a higher pressure ; they had evidently been
kept in good repair, because they were surveyed every year by Lloyds' Reg-
ister and still held their highest class as they had originally.
Mr. See has been a marine engineer and naval constructor for 40 years and
has been connected with well known ship-buildlng and steamshlp firms as su-
perlntending and constructing engineer, and from this, and other expérience
which he set forth, has become famillar with steamshlp construction and
values, although he sald he never had to do with the actual purchase or sale
in the market of vessels llke the Foseolia. He placed the market value at
£10,500, 'or $52,500.' This was based on the surveys, her original eost and
the amount spent on her upkeep. He did not figure on an annual déprécia-
tion, but a gênerai dépréciation, taking ail the éléments into considération ;
the boilers showed a dépréciation which reduced the working pressure from
CO to 80 Ibs., and that should be considered in relation to the hull, also ; the
efficiency of the boilers would be impaired, and with the reduced pressure
and a greater coal consumption she would go slower and it would take longer
to make the voyage.
Mr. Congdon has had an expérience as a marine surveyor, extending over
a perlod of 45 years. Early in Ilfe he went through such training as was nec-
essary to become eertifled as a shipwright and ship builder, afterwards was
a Lloyds' surveyor at varions ports in England for many years, and for 21
years was principal surveyor for Lloyds' Register in the United States. He
has seen the Foseolia many tunes, and passed her on one of the surveys, which
he thought was In 1895. He placed the market value at $52,500. He says
that he worked out the percentage of dépréciation up to the vessel's 13th
year, at which time he considered her worth from $60,000 to $65,000, and
added: 'Beyond that I think it is unsafe to go, because I don't think there
is any scale, or any man's expérience, that will place a percentage of dépré-
ciation, year by year, for any séries of years over that time on eomparatively
old vessels. You hâve to fall back tben on what is termed the market value,
what a vessel would fetch if sold, by comparison with other vessels that hâve
been sold.' He received circulars containing records of sales of vessels abroad,
and it was by comparison with thèse and with vessels which he himself
had valued that he determlned the market value ; he had also considered the
condition of the freight market at the time and given the vessel the benefit
of it ; she was a fairly good cargo steamer but there was nothing spécial
about her ; in flxing the value, he had given her the advantage wherever he
could, because she was old and not very marketable.
129 F,— 15
226 129 FEDERAL KEPORTEK.
Where there is such a wlde différence among experlenced appralsers, it la
not unreasonable to assume that some of them were biased to a certain es-
tent In favor of the parties calling them, and that thelr estimâtes were un-
consclously influenced more or less by a désire to présent a favorable case for
their clients. But It will be seen that the lowest estimate of any witness for
the owners is that of Mr. Garmey, $63,600, and that the highest given by a
witness for the Government is that of Mr. Thompson, £11,000, or $53,531.50;
a différence of some $10,000. I am satisfled that the fair market value lies
somewhere between thèse two estimâtes. In the three years immediately pre-
cedlng the loss of the Foscolia, Mr. Garmey had an expérience In the actual
purchase and sale of vessels, which I think gives his testimony a practical
value beyond that of the other experts examined before me. He testified on
cross-examinaton as follows:
'Q. Mr. Garmey, hâve you bought and sold iron vessels? A. Yes, sir.
'Q. Could you say, roughly, how many? A. Well, between 1895 and 1898,
for one flrm I bought 7, sold 9 and built 3, ranging from 3,000 tons to 6,000
tons dead-weight.'
Under ail the circumstances, I think that $60,000 is a falr value for the
Foscolia, and I accordingly allow that sum."
The exception upon which raost stress was laid in the argument
was the one relating to interest, as follows :
"Fourth. For that the Commlssioner dld not allow interest upon ail the
items of the libellants' damages at the rate of six per cent, from the 28th
day of May, 1898."
It is contended that the disallowance of interest is unjust and ex-
cludes the libellants from a full recovery of the damages sustained.
Such appears to be the fact. Without interest, the recovery is only
partial but it is too well established to admit of argument that the
Government is not liable for interest on damage claims in the ab-
sence of an express statutory provision or stipulation covering it.
Bunton v. U. S. (C. C.) 62 Fed. 171 ; U. S. v. Sherman, 98 U. S.
565. 25 L. Ed. 235; Tillson v. U. S., 100 U. S. 43. 25 L- Ed. 543;
Harvey v. U. S., 113 U. S. 243, 5 Sup. Ct. 465, 28 L. Ed. 987; An-
garica v. Bayard, 127 U. S. 256, 8 Sup. Ct. 1156, 32 L. Ed. 159;
U. S. V. North Carolina, 136 U. S. 211, 10 Sup. Ct. 920, 34 L. Ed.
336.
Formerly, Congress adjudicated upon private claims against the
Government, through its Committees, but the great and increasing
volume of claims necessitated some other method of providing for
their investigation and the Court of Claims was established for such
purpose — Act of February 24, 1855, c. 122 (10 Stat. 612) — ^but gên-
erai authority was never granted to pass upon collision cases, as
they sounded in tort, and spécial législation remained necessary in
each case of such character. St. Louis & Miss. Valley Transp. Co.
V. U. S., 33 Ct. Cl. 251, 265. When Congress acted upon such
claims, the Court of Claims was usually selected as its instrument
to ascertain the facts and, in case of liability upon the part of the
Government, to assess the damages. Interest, however, was ex-
pressly excluded. Rev. St. p. 200 [U. S. Comp. St. 1901, p. 747] :
"Sec. 1091. No interest shall be allowed on any clalm up to the time of the
rendltion of judgment thereon by the Court of Claims, uuless upon a contract
expressly stipulating for the payment of interest."
WATTS V. UNITED STATES. 227
The claimants hère, while conceding that if the matter had been
referred by Congress to the Court of Claims, interest would not be
recoverable, urge that as it has been sent to an admiralty court,
which ordinarily allows interest as part of the damages, interest
should be granted. The question turns upon the intention of Con-
gress. It would seem that under the authorities cited, interest is
not allowable, uniess expressly provided for, and there being a com-
plète absence of any aUusion to interest in the Act, under which the
action has been tried hère, it should not be granted. The Commis-
sioner says in this connection:
"Libellants elaim Interest on the various sums allowed. The District Attor-
ney insists that Interest caunot be allowed, slnce the act under which the suit
was brought did not expressly award interest in the event of recovery by libel-
lants.
It is undoubtedly true.that the sovereign cannot be sued without his con-
sent, and that interest cannot be allowed against the United States where it
has not manifested its consent that it should be awarded. The act by which
Congress authorized this suit to be brought does not in express terms author-
ize the Court to award interest, but libellants' counsel contends that It does
so by implication, Inasmuch as it provides that the claim of the owners of
the Foseolia be submitted to this Court 'under and in compllanee with the
rules of said court sitting as a court of admiralty,' and that if It should ap-
pear that the fault was with the Columbia, the court should détermine the
amounts to be paid to the owners of the ship and cargo 'in order to relm-
burse them for the losses so sustalned.'
It is argued that the référence to the rules of admiralty may be elther to
the practice on the instance side of the court or to the procédure in prize
causes, and that in elther view interest should be allowed.
Were this a collision suit against an Indlvidual, there Is Ilttle doubt that
libellants would be entitled to interest under the settled practice in this court;
and perhaps It would also be so if the procédure In prize causes were followed,
although the only Instance cited In which Interest was allowed against the
United States in a prize cause was the Paquete Habana, 189 U. S. 453 [23
Sup. et. 593, 47 L. Ed. 900], and there, as counsel States, the admission of the
court that interest was allowable against the Government was only implled.
In the other cases cited, tlie Government was not a party, and two out of the
three captures were by prlvateers.
In regard to that portion of the Act which provides that the libellants shall
be reimbursed for their losses, I agrée with libellants' counsel that for losses
which occurred six years ago, it cannot fairly be said that the libellants are
reimbursed when they recelve the bare principal without the least compensa-
tion for the loss of the use of their property or its value durlng that period;
and I should allow interest for that reason, if I thought interest could be al-
lowed against the United States under an Act which does not expressly award
it
Besides a number of décisions of the Suprême Court, the District Attorney
quotes œany expressions from opinions of the Attorney Gênerais and Comp-
trollers of the Treasury whleh he contends support his position. Some of the
opinions of those officiais undoubtedly go so far as to say that the award of
Interest must be express, that it is never given by construction under an Act of
Congress, and It seems clear that the practice has long prevalled in the depart-
ments, of disallowing Interest on clalms presented for payment. I thlnk that
the Suprême Court has also gone to this extent. It Is true that some of thèse
cases (as In Tillson v. U. S., 100 U. S. 43 ['25 L. Ed. 543]), are appeals from the
Court of Clalms, and that the subject of interest on claims prosecuted in that
court has been regulated by an Act of Congress to the effect that no interest
shall be allowed on any claim up to the time of the renditlon of the judgment
thereon by the Court of Claims, uniess upon a contract expressly stipulatlng
for the payment of Interest. Act March 3, 1863, c. 92, § 7, 12 Stat. 706 [U. S.
Comp. St 1901, p. 747], But I am referred to no case in which the fédéral courts
228 129 FEDERAL REPORTEE.
have allowed Interest against the United States by construction tinder an act
of Congress, and I have been unable to flnd any and the Suprême Court has
expressed its views In language so positive that in my opinion an allowance
of interest under the act which permitted this suit would be unauthorized.
In Angarica v. Bayard, 127 U. S. 251 [8 Sup. Ct. 1156, 32 L. Ed. 159], which
was not an appeal from the Court of Claims, the court referred with approval
to the long line of opinions rendered by the Attorney Gênerais against the
allowance of interest, including those in which it was stated that interest
cannot be allowed unless expressly granted by Act of Congress. The Court
also said:
'The case, therefore, falls within the well settled princîple, that the United
States are not llable to pay interest on claims against them, in the absence
of express statutory provision to that effect. It bas been established, as a gên-
erai rule, in the practice of the government, that interest is not allowed on
claims against it, whether such claims origlnate in contract or in tort, and
whether they arise in the ordinary business of administration or under pri-
vate acts of relief, passed by Congress on spécial application. The only rec-
ognized exceptions are where the government stipulâtes to pay interest and
where interest is given expressly by an act of Congi-ess, either by the name
of interest or by that of damages.'
I therefore disallow interest"
I consider that thèse views are soiind and should not be disturbed.
Moreover, there is persuasive évidence that Congress intended to
exclude the recovery of interest. While this matter was pending,
another claim for the recovery of damages caused by collision with
a Government vessel was introduced simultaneously in the Senate
and House of Représentatives. The Senate bill which especially
provided for the recovery of interest and costs, was fîrst passed.
When the matter was taken up for considération by the House
Committee on Claims, a report was made as follows:
"56th Congress, House of Représentatives. Report
Ist Session. No. 723
The Brooklyn Ferry Company of New York.
March 20, 1900. — Committed to the Committee of the Whole House and or-
dered to be printed.
Mr. Otey, from the Committee on Claims, submitted the followlng
Report.
(To aecompany H. R. 9499.)
The Committee on Claims, to whom was referred the bill (H. R. 9499) for
the relief of the Brooklyn Ferry Company, of New York, report the same
favorably, and recommend that the same do pass, with an amendment strlking
out the words 'with costs and interest', on page 2, line 5.
The claim, amounting to $12,188.04, arises out of a collision which occurred
in the East River, New York, on the Ist day of August, 1899, between the
ferryboat New York and the U. S. S. Dolphin, a little after 6 o'clock in the
morning. The Dolphin was bound through the East River to Newport, R. I.,
and the ferryboat was proceeding from the foot of East Twenty-third street,
Manhattan, to her Brooklyn slip, at the foot of Broadway. A serious colli-
sion between the vessels happened off about South Third street, Brooklyn.
The ferry company allèges that faults on the part of the Dolphin caused the
disaster in violating a New York law, which Is recognized and enforced by the
United States courts, requiring steam vessels navigating the East River, when
not bound to any of the docks or landing places therein, to keep as near as
possible in the center of the river, and not to be propelled in excess of a rate
of speed of 8 miles an hour ; also, In violating the United States laws for the
prévention of collisions in not keeping a proper lookout on the forward part
of the vessel, in not stopping and backing her engines when danger of collision
became apparent, in not giving the proper signais with her steam whistle, and
in not navigating In conformity with those she did give.
WATTS V. UNITED STATES. 229
The action of the committee In reporting the blll favorably Is regarded as
consistent with the policy of Congress, heretofore manifestée! in extending re-
lief to citizens suffering loss from alleged négligence of Govei-nment's agents
in this class of cases by giving tliem an opportunity to establish their claims,
if found to exist, in the United States courts, and as this collision happened
within the limits of the jurisdlction conferred by law upon the United States
district court for the eastern district of New York, and as that court has
had a very large expérience In deallng with cases of collision upon the water,
it is deemed the proper forum for the détermination of the questions of law
and faet involved in this case. A further reason for conferring jurisdlction
iipon that court in this case is found in the légal résidence of the claimant
wlthin the district. The policy of Congress to permit citizens havlng claims
agalnst the Government to sue in thelr own districts flnds expression in sec-
tion 2 of the act of March 3, 1887, entltled 'An act to provide for the bringing
of sults agalnst the Government of the United States.' "
After this report, the Senate bill was amended to conform to it,
by striking out the provision for interest and costs, gid a bill was
passed by both bouses, of which the following is a copy :
"56th Congress,
Ist Session. H. E. 9499.
(Report No. 723.)
In the House of Représentatives
March 12, 1900.
Mr. Fitzgerald, of New York, Introduced the following bill ; whlch was re-
ferred to the Committee on Claims and ordered to be printed.
March 20, 1900.
Reported with an amendment, committed to the Committee of the Whole
House, and ordered to be printed.
(Omit the part struck through.)
A Bill
For the relief of the Brooklyn Ferry Company, of New York, ownet of the
steam ferryboat New York.
Be it enacted &?/ the Senate and Bouse of Représentatives of the Vnited
States of America in Congress assemMed,
That a claim against the United States of the Brooklyn Ferry Company, of
New York, a corporation organlzed and exlsting under the laws of the State
of New York, with its principal place of business In the borough of Brooklyn,
clty of New York, owner of the ferryboat New York, for damages caused by
collision between the sald ferryboat and the United States steamer Dolphin,
in the East River, near Brooklyn, on the flrst day of August, eighteen hundred
and ninety-nine, may be sued for by the said ferry company, in the United
States district court for the eastern district of New York, sittlng as a court
of admlralty and acting under the rules governing such court, and sald court
sball hâve jurlsdiction to hear and détermine such a suit and to enter a judg-
ment or decree for the amount of such damages, if any shall be found to be
due, against the United States in favor of the said ferry company, upon the
same principles and measure of llabllity, with cocto & cd-4r:tsrest as in llke
cases In admlralty between private parties, and with the same rights of appeal.
Sec. 2. That such notice of the suit shall be given to the Attorney-General
of the United States as may be provided by order of the sald court, and it shall
be the duty of the Attorney-General to cause the United States attorney in
such district to appear for and défend the United States.
Sec. 3. That should damages be found to be due the sald ferry company, the
amount of a final decree therefor shall be pald out of any money in the United
States Treasury not otherwise appropriated."
The matter under considération covering the Columbia-Foscolia
collision, was introduced in the Senate and House of Représenta-
tives before the one covering the Dolphin-New York collision but
230 129 FEDERAL EErOETEK.
was enacted into a law subsequently. The report of the Senate
Committee on Claims was as foUows:
"Calendar No. 112.
56th Congress, Senate. Report
Ist Session. No. 100.
British Ship Foscolia.
January 17, 1900.— Ordered to be printed.
Mr. Warren, from the Committee on Claims, submitted the following
Report.
(To aecompany S. 189.)
The Committee on Claims, to whom was referred the bill (S. 189) for the
relief of the owners of the British ship Foscolia and cargo, having carefully
cousidered the same, submit the f ollowiug report :
A similar bill to the one now under considération was favorably reported
by this committee last session and passed the Senate. The Senate bill was
also favorably reported by the House Committee on Claims.
As the committee's report (Senate report No. 1625) made last session fuUy
sets forth the facts in the case, yonr committee adopt said report as thelr re-
port and recommend the passage of the bill.
The report is as follows:
The Committee on Claims, to whom was referred the bill (S. 5000) for the
relief of the owners of the British ship Foscolia, and cargo, beg leave to rec-
ommend the passage of the bill for the reasons set forth in the letter of the
Secretary of the Navy and accompanying papers.
Navy Department, Washington, January 11, 1899.
Sir: In response to the committee's request, contaiued in its letter of the
9th instant, for the vlews and recommendation of the Department in regard
to the Senate bill 5000, for the relief of the owners of the British ship Fos-
colia and cargo, I hâve the honor to state that on the 28th of May last, at
7.30 p. m., the U. S. S. VolumMa, while engaged in patrol duty just outside
the harbor of New York and about 12 miles southerly and easterly from the
Fire Island light-ship, came into collision with the British merchant steamer
Foscolia. The ColumMa was not seriously injured, but the Foscolia suffered
much damage and sunk nlne hours after the collision. There was no loss of
life, the offlcers and crew of the Foscolia being taken on board the GolunMa
and cared for and brought into port, but the Foscolia and her cargo were a
total loss.
It appears from the flnding of a naval board of inquiry, convened to inves-
tlgate and report upon the circumstances attending the collision, that at the
time it occurred and for an hour and a half prevlously a thick fog had pre-
valled ; that the vessels were both running at reduced speed on account of the
fog; that a proper lookout was kept on both vessels; that the Foscolia was
exhibiting the usual lights and sounding the fog signal, but that the Oolunibia
had ail her lights screened and was sounding no fog signal. It also appears
from the finding of the court that no fault is imputed to any of the offlcers
or men on board the ColumMa, and that, aside from the screening of lights
and discontinuance of the sounding of fog signais, everything that could hâve
been done by them to avoid the catastrophe and to minimize its conséquences,
when it became inévitable, was done.
The testimony adduced shows that the lookouts on each vessel sighted the
other at about the same tlme, the two vessels being about 100 yards apart,
and that the Columbia was so manœuvred that a glancing blow only was re-
ceived from the Foscolia, and doubtless little Injury would hâve been caused
either vessel but for the fact that the bow of the merchant steamer was
caught upon one of the projecting after sponsons of the cruiser.
Upon careful considération of the facts reported by the naval court of in-
quiry, above mentioned, the Department is satisfled that there is at least
reasonable ground for the contention advanced by the owners of the Foscolia
that the collision might bave been avoided had the ColumUa shown the lights
and sounded the fog signais usual under such conditions. The lights and
WATTS V. UNITED STATES. 231
signais were, however. dispensed with by the Oolwnbia on thls occasion for the
reason tliat the Spanish fleet under tlie command of Admirai Cervera had not
at that time been loeated and the «ruiser was then engagea in patrol duty in
the vicinity of the most important ports of the country, New York and Phila-
delphia, the points between which she was cruising being Fire Island light-
ship and Delaware Breakwater, and that it was deemed essential to take ex-
traordinary précautions, even to the extent of Incurring some hazard, in guard-
ing against possibilities which might hâve developed at any moment.
A collision with one o£ our war ships having occurred under such circum-
stances when, for public reasons deemed sufBcient to justify such action, our
vessel was disregarding the rules of the road at sea, and a valuable merchant
steamer and cargo belonging to a friendly power being destroyed, apparently
without contributory négligence on the part of her ofBcers and erew, it would
seem proper that the losses incident thereto should not be allowed to rest
upon the owners of a private vessel, but that such losses should, on the con-
trary, be borne by the United States, provided, of course, that it shall be ju-
dlcially determined in the courts of the United States that the facts are as
hereinbefore outlined.
Entertaining thèse views, and inasmuch as it appears that the blll (S. 5000)
provides simply for the submission of ail matters of fact in the case to the
United States district court for the southern district of New York, sitting as
a court of admiralty, and for the payment of such amount only as may be
adjudged to the claimants by decree of such court, the Department recommends
the bill to the favorable considération of the committee, section 2 of the blll,
making provision for the prompt payment of the amount which the court may
find to be due, being deemed proper in view of the fact of the foreign owner-
ship of the vessel lost and the desirability of avoiding in such a case the delay
which would resuit from a resubmission of the matter to Oongress for the
necessary appropriation.
In this connection I désire to state that, under date of the 21st of June last,
this Department addressed letters to the Commlttees on Naval Aflfairs of the
Senate and House of Représentatives, respeetively, reeommendlng favorable
action in the matter of the claim of the owners of the FoscoUa and cargo.
The inclosures of your communication are herewith returned.
Very respectfully, John D. Long, Secretary.
Hon. H. M. Teller,
Chairman Senate Committee on Claims, United States Senate.
Navy Department, Washington, June ZO, X898.
Gentlemen: Complying with the request contained in your communication
of the 14th instant, I transmit herewith a press copy of the flndings of the
court of inquiry which reeently investigated the collision between the U. S.
S. Columbia and the steamer FoscoUa. The Department's action of this date
upon the case is as follows :
'The flndings of the foregoing court of Inquiry are approved.
'With respect to the claim of the owners of the FoscoUa for damages, the
Department will request Oongress to authorize the submission of such claim
to the United States district court for the southern district of New York for
détermination.'
Very respectfully, John D. Long, Seoretary.
Messrs. Cowen, Wing, Putnam & Burlingham,
45 WilUam Street, New York City.
Finding,
On the evening of May 28, 1898, the U. S. S. Columbia, on patrol duty, was
in latitude 40° 20' north, longitude 73° (?)' west, and about 12 miles southerly
and easterly from Fire Island light-ship. At 7.30 p. m. the course was S. W.
Î4 S., and her speed 6 knots per hour. A thick fog had prevalled since 7 p. m.
and the Columbia had ail her lights screened and was sounding no fog sig-
nal. The British merchant steamer FoscoUa was at the same time approach-
ing on a course B, % S., at a speed which had been reduced to 71^ knots on
account of the fog. At 7.38 p. m. the lookout on the Columbia and the man
in the forward chains sighted the FoscoUa on the starboard bow.
232 129 FEDERAL EEPOIITEE.
The ofBcer 6t the deck o( the Oolùmbia sounded the steam whistle twiee, put
the helm to starboard, and signaled the englne room for full speed ahead.
The commanding officer of the GolumWa, coming qulekly from the emergency
cabin, repeated the order for full speed ahead and sounded the siren, the col-
lision occurrlng at the same moment. When the Posoolia was slghted the
two vessels were about 100 yards apôrt. She had her starboard, port, and
masthead lights set, yet none of thèse were visible to the Oolumbla until al'ter
the FoscoUa's hull was seen. This is accounted for by the fact that the fog
was very dense and daylight had not yet entirely disappeared. The FoscoUa
slghted the Columlna at about the same tlme that she herself was seen. The
FvncoUa's engines were at once reversed and given full speed astern. Her
helm was put hard aport for starboard, but the distance was so short that
lier headway was probably not stopped until the collision oceurred. The Fos-
coUa struck the Oolmnbia at the aft sponson on the starboard side, her stem
euttlng into five compartments above the protective deck. A considérable por-
tion of her stem was left In the Golu'm'bîa's side.
Measures were promptly taken for the temporary repair of the damages to
the Golnmbia, and two of the Colwnbia's boats were sent to the assistance of
the FoscoUa. The Golumbia remalned in the locality nine hoùrs, until the
FoscoUa sank. There was no loss of life, the crew of the FoscoUa being taken
on board th& GolwmMa and cared for and brought to port. The damages to
the FoscoUa, occurring through the collision, caused her to sink. The court
finds that the fog whistle of the FoscoUa had been sounded for upward of half
an hour previous to the eollision, and that the whistles wëre not heard on board
the ColuniMa until after the vessel was sighted. The évidence shovys conclu-
sively that the captain, officers, and men of the Cohimbia were attentive to
their duties previoua to and at the time of the collision. The same is true of
the master, offlcers, and men of the FoscoUa.
Opinion.
The court is of the opinion that when the two vessels sighted each other
the distance between them was so small and their speed and relative positions
were such that a collision was unavoidable. If the lights of the Golumbia
had been dlsplayed it is impossible to state positively whether they would
hâve been visible to the lookouts on the FoscoUa before the Oohimbia's huU
was in sight, but the court is of the opinion that the huU would hâve been
flrst discovered. The opinion of the court is, therefore, that the absence of
the Gohimbia's lights is not an élément in the causes which produced the col-
lision. Notwithstanding that the fog whistle on board the FosooUa was not
heard on board the Golumbia, the court is of the opinion that the Gohimbia's
fog whistle might bave been heard on board the FoscoUa had it been sounded.
The court cahnot, however, express a positive opinion on the subject, owing
to well-known instances of sound being diverted under certain atmospheric
conditions.
The court having taken into considération the instructions in the case of
the loss or grounding of a ship of the Navy, as directed by the precept, did
not consider it necessary to call air the offlcers and crew before it, beeause of
the fact that there had been no loss or grounding of a navy vessel. Capt.
James H. Sands, of the Golumbia, had received positive orders from his su-
perior ofBcer in command of the northern patrol fleet to cruise without lights.
The object of this order was to conceal the présence of his ship from tlie ves-
sels of a nation with which the United States was at war. [See article 44.")
of the United States Navy Régulations.] Captain Sands directed fog signala
to be suspended for the same purpose. The court is of the opinion that he
was justifled in so doing. The court is of the opinion that the eollision be-
tween the Golumbia and the FoscoUa was, under the clrcumstances of war,
in no respect due to the fault or négligence of any of the offlcers or members
of the crew of the U. S. S. Golumbia, and therefore It Is of the opinion that no
further proceedings should be had in the matter.
William P. McCann.
Commodore, United States Navy, Retired, Président.
Douglas Roben,
Vnited States Navy, Retired, Judge-Advocate."
MORSE V. ST. PAUL FIRB 4 MARINE INS. CO. .233
The folbwing is a copy of the bill which was subsequently adopted
by both houses;
-SOth Congress, S. 189.
Ist Session. (Report No. 739.)
In the House of Représentatives,
February 22, 1900.
Referred to the Committee on Clalma.
March 21, 1900.
Committed to the Committee of the Whole House and ordered to be printed.
An Act
For the relief of the owners of the Brltish shlp Foscolla and cargo. '^
Se it enacted J)y the Senate and House of Représentatives of the Vnited
fêtâtes of America in Congress assembled,
Thot the claim of the owners of the Brltish steamçhip Foscolla, sunk by
collision wlth the United States steamship Columbia on the evenlng of May
twent3'-elghth, elghteen hundred and ninety-eight, near Fire Island light-ship,
for and on acconnt of the loss of sald vessel and cargo, may be submitted to
the United States district court for the southern district of New York, under
iînd in compliance with the rules of sald court sitting as a court of admlralty;
aod sald court shall hâve jurisdiction to hear and détermine and to render
judgment thereupon: Provlded, however, That the Investigation of said claim
shsll be made upon the following basls: First, the said court shall find the
facts attending the loss of the said steamship Foscolla and lier cargo ; and sec-
ond, if it shall appear that the responsibillty therefor rests wlth the United
States steamship Columbia, the court shall then ascertain and détermine the
amounts which should be paid to the owners respectively, of the Foscolla and
her cargo, in «rder to reimburse them for the losses so sustained, and shall
render a decree accordingly : Provided further, That the amounts of the
losses sustained by the master, officers, and crew of the Foscolla may be in-
cUided in sùch decree.
Soc. 2. That should such decree be rendered In favor of the owners of the
Foscolia and her cargo, the amount thereof may be pald ont of any money In
the ïreasury and not otherwise appropriated."
It will be seen that when the provision for interest and costs is
ptricken out of the Dolphin-New York bill, there is no material
différence between the two bills with respect to interest. Under such
circumstances, it is not perceivable how interest can be allowed on
the Foscolia losses, even though it is apparent to the court that
strict justice can not be achieved in any other way. It certainly
was not the intention of Congress to allow interest to foreign own-
ers, when refused to citizens of this country under somewhat simi-
lar circumstances.
The exceptions are overruled,
[The décision on the merits in this action will be found in 123 Fed.
105.]
MORSE et al. V. ST. PAUL FIRE & MARINE INS. 00.
(Circuit Court, D. Maine. April 25, 1904.)
No. 27.
1. Marine iNStmANCE— Unseawoetiiiness— New Tbiai..
Where, in an action on a marine pollcy, a new trial was granted after
verdict in favor of plaintifC on the uncontradicted testimony of two wit-
nesses who testified that after the loss they made an examination by bor-
ing through the vessel's waterways Into the ends of the beams between
234 129 febeSàl reporter.
the main and fore masts, and found no solld wood, but only mud and
dirty wood, and on the second trial sucti évidence was again introduced,
and there was no otlier évidence ofïered tending to obviate Its effect, a
second verdict in fa ver of plaintiff sbould be set aside, and a new trial
ordered.
A. Nathan Williams, for plaintiffs.
Charles E. Littkfield and Arthur S. Littlefield, for défendant.
HALE, District Judge. This suit has already been twice before the
court. It first came before the court on a question raised at a tria!
before the jury. Judge Putnam rendered an oral décision, which ap-
pears in 122 Fed. 748. The :case proceeded, and the plaintiffs re-
covered a verdict. The défendant moved to hâve that verdict set
aside on the ground that it was against the weight of évidence. Judge
Putnam, speaking for the Circuit Court, rendered his décision upon
that question in 124 Fed. 451, granting a new trial. The case then
went to trial a second time before a jury, and the plaintiffs again re-
• covered a verdict. The défendant now moves to hâve this second
verdict set aside, on the ground that it, also, was against the weight
of évidence.
The suit is upon an open policy of marine insurance, upon a cargo,
on a voyage from Calais, Me., to Philadelphia. The only défense sub-
mitted to the jury was that the vessel was unseaworthy at the time
the risk was to commence. At the second trial of the case, more tes-
timony was submitted ; but the language of Judge Putnam, in rela-
tion to the issues before the jury, and as to the gênerai character of the
défense, is true, also, with référence to the case at its second trial.
The court granted a new trial for reasons stated at page 454. After
referring to the testimony of two men who examined the vessel, the
court says :
"What we rest on Is the évidence furnished by them of particular facts of
a fundamental and serions character, which the plaintiffs made no attempt to
contradict by proofs, the force of which, also, they hâve not undertali:en to
obviate at bar, or in the brief which has been submitted to us. One of thèse
witnesses testifled as f ollows : 'We bpred down through the waterways, strilc-
ing into the ends of the lower deek beams, and, if I remember aright, into some
of the timbers, too ; and we couldn't find any Sound wood at ail — nothing but
mud and rotten wood.' The other one testifled as follows: 'And we bored
down in the waterway till we struek the end of the beams, and we couldn't get
any sound wood whatever. It was a kind of mud and dirty wood, that came
right up into the barrel of the auger, and stayed there. They bored from the
mainmast to the foremast.' Welay aside the characterization of what came
up out of the borings, but we are compelled to accept the uncontradicted state-
ments that the vessel was bored through her waterways, through the ends of
the beams, and at some points Into the timbers from the mainmast to the fore-
mast, and that no sound wood was found. We also observe on the fact that
the record is absolutely lacking in évidence of any other borings made elther
by the plaintiffs or by the défendant, and we cannot reject the well-known
considération that this is the ordinàry'and most efficient way of determining
whether or not a vessel is sound. Notwithstanding the observations we
jnade with référence to the jury, it will be borne in mind that this évidence,
as the resuit of boring the vessel, stands uncontradicted and unexplained;
and, whatever may be the condition of her planking, a vessel with a f rame
such as was exhlljited by thèse borings cannot be regarded as seaworthy.
Consequently either the jury failed to properly note this évidence, or to con-
nect it with the définition of 'seavi'orthiness' as given by us. Public policy
MOE8B V. ST. PAUL FIRE & MARINE INS. 00. 235
requlres that courts shall not encourage the navigation of the océan by craft
in such a condition as this évidence sliows this vessel to liave been in. There-
fore, on the strength of tlie testimony of thèse two witnesses, disclosing a fact
vvhieh speaks for itself, and overlaps ail the other facts in the record, and
which stands absolutely uncontradlcted, either directly, indirectly, or by in-
ference, we are compelled to grant the defendant's motion. Of course, it is
to be understood that our décision is based strictly on the case as it now
stands, bo that on a new trial the proofs which now eontrol us may be di-
rectly met or avoided in such manner as to put this partlcular portion of it
beyond the reach of the court on another motion for a new trial, if one is
made, preeisely as ail the rest of it la beyond such eontrol of the présent
record."
The testimony on which the new trial was granted by Judge Putnam
was that of John W. Cann, a surveyor and inspector, and Alexander
Fisher, a repairer and builder, of towboats, scows, and yaclits. The
testimony of thèse witnesses consisted of dépositions, and was the
same at the second trial as at the first. As will be seen from the quo-
tation which we hâve made from the former décision of the court, it
consisted of testimony of Cann and Fisher that they bored through
the waterways into the ends of the lower deck beams, and into some
of the timbers from the mainmast to the foremast, and that no sound
wood was found. They also testified to further examinations at the
"bottom part of the vessel"; but, confining ourselves only to the tes-
timony commented upon by the court at the former trial, it is sufficient
to say that no proofs were submitted at the second trial to contradict or
explain that testimony, or in relation to the distinct subject-matter upon
which the new trial was granted. Testimony was offered tending to
show that the vessel had been new sealed and other repairs had been
made below her under deck in 1897, and that there had been repairs
from time to time upon her, and that she had been kept in repair.
But ail this testimony appears to relate to her condition before the
examination made by Cann and Fisher; and no proofs are presented
of any boring into her timbers below her lower deck or near the places
testified to by thèse gentlemen; so that it still remains true that the
testimony which is commented on by the court in the first application
for a new trial is the only testimony relating distinctly and expressly
to the condition of the vessel's lower beams and to the lower part of
her frame. The décision of the court in the former trial is the dé-
cision of a judge not only of great learning in the law, but of great
expérience in ail matters relating to vessels and maritime aflfairs. He
found distinctly that "a vessel with a frame such as exhibited by thèse
borings cannot be regarded as seaworthy." He laid great stress upon
the condition of the lower part of the vessel, as shown by the testi-
mony upon which he based his décision.
After a careful examination of ail the testimony presented to the
jury at the second trial, we are compelled to décide that the record
does not show anything relating to the subject-matter on which the
new trial was granted to materially change the facts which were be-
fore the court at the former hearing, and which led the court to grant
a new trial. We must corne to the same conclusion to which the
court then came. Judge Putnam in his opinion gives a summary of
the rulings of the court in this circuit with référence to new trials.
From that summary, and from the current of décisions in the fédéral
236 129 FEDERAL EEPOETEB.
courts, it is clear that a court, in order to set aside a verdict— especîallr
a second verdict — should be without any doubt as to what it ouglit to
do in the premises.
In Wright v. Southern Express Co., 80 Fed., at page 91, Judge
Hammond, speaking for the Circuit Court, said :
"Notwithstandlng tbere hâve been two verdicts In thls case in favor of the
plalntiff, the court is constrainedly of the opinion that the jury may be en-
tirely wrong in its flnding. * • • Unquestionably thls case is not one for
the direction of a verdict, but, on the contrary, is distlnctly a case wbich
ought to be submitted to a jury. But It does not follow, because It ought to
be submitted to a jury, that the court should let the verdict stand, nor even
two verdicts, possibly not three or more, if at each succeeding trial the proof
should be preeisely the same, and no stronger for the plalntifC at the last than
the flrst trial."
In Felton v. Spiro, 78 Fed., at page 582, 24 C. C. A. 327, Judge Taft,
speaking for the Circuit Court of Appeals, said :
"We corne, then, to the question whether a fédéral court In which a jury
has rendered a verdict bas the power to set aside a verdict, when, in ils
opinion, it is contrary to the decided or overwhelming weight of the évidence,
and, in the exercise of a légal discrétion, may properly do so. Upon this
point we hâve not the slightest doubt In an elaborate and most carefully
consldered opinion, Judge Lurton, spealîing for the court, points out the dis-
tinction between that insufficiency in law of évidence to support an issue
which will justify a peremptory instruction by the court, and that insufficiency
in fact of évidence, when weighed with opposing évidence, which, while not
permitting a peremptory instruction, will justify a court lu setting aside a
verdict based on It, and sending the parties to another trial before another
jury." *
He then quotes the opinion of Judge Lurton found in Mt. Adams
Co. V. Lowery, 74 Fed. 477, 20 C. C. A. 609 :
"We do not thlnk, therefore, that it is a proper test of whether the court
should direct a verdict that the court, o^i weighiug the évidence, would, upon
motion, grant a new trial. A judge mlght, under some circumstances, grant
one nevi trial and refuse a second, or grant a second and refuse a third. In
passing on sucb motions, he is necessarily requlred to weigh the évidence,
that he may détermine whether the verdict was one which might reasonably
hâve been reached. But In passing upon a motion to direct a verdict, his
functions are altôjether différent. In the latter case we tblnlc he cannot
properly undertake to weigh the évidence. His duty is to take that view of
thè évidence most favorable to the party against whom it is moved to direct
a verdict, and from that évidence, and the inferenees reasonably and jus-
tiflably to be drawn therefrom, détermine whether or pot, under the law, a
verdict might be found for the party having the onus."
In the case; before us there was much more évidence submitted at
the second trial than at the first. There was much testimony of ex-
aminations of the ship and of borings, but at différent parts of the
ship from that covered by the testimony of Cann and Fisher, upon
which the new trial was ordered. The new testimony related to ex-
aminations and borings, but not to the condition of the ship below the
lower deck, in her lower beams and lower framework. The proof s
which seemed vital to Judge Putriam hâve not been met by any testi-
mony offered at the second trial.
The verdict is set aside. A new trial is ordered.
iK EE GEISEB. 237
In re GEISBR.
In re McGKATH.
(District Court, D. Montana. Aprll 1, 1904.)
1. Bankettptct—Constables—Levy— Surplus— Patment.
A constable, after having sold a debtor's property on exécution, re-
turned the exécution as satisfied, and alleged tliat he liad returned the
surplus to the purchaser at tbe sale. The debtor having become bank-
rupt, his trustée demanded such surplus. The constable, on being cited
to show cause why he should not pay the money, testified that he had
never received the same. Held, that if he sold the property on crédit,
or failed to collect the amount bid, he was prima facie liable for the
surplus to the exécution debtor, and was therefore properly adjudged to
pay the same to the trustée.
In Bankruptcy.
Sanders & Sanders, for Drake, trustée.
Davies & Haskins, for McGrath.
KNOWLES, District Judge. In this case it appears that there was
a suit brought in the justice's court of Silver Bow township, Silver
Bow county, Mont., before John Doran, a justice of the peace, by W.
M. Montgomery & Co., against said George F. Geiser. The com-
plaint and an affidavit and undertaking in attachment were filed Au-'
gust 27, 1903, and the summons and writ were duly issued and placed
in the hands of John McGrath, constable, for service, and he executed
the writ of attachment by levying the same, and taking into his pos-
session certain personal property belonging to the said défendant,
George F. Geiser, consisting of fixtures, tools, and appHances used by
said défendant in connection with a butcher shop and business, and
also upon some perishable goods, consisting of fresh and sait méats,
fisL, etc. During the pendency of this suit and before a judgment was
entered therein, said McGrath, as constable, sold certain of the prop-
erty as perishable, and realized $67.50 from the sale thereof. Out
of the sum realized, he paid $8 as compensation to a keeper of the
property, and the balance, $59.50, he paid over to Justice Doran, to
await the final disposition of the suit. On September 2, 1903, a
judgment was made, given, and entered in favor of said W. M. Mont-
gomery & Go., plaintiffs in said suit, and against said George F. Geiser,
défendant, for the sum of $197.49 damages and costs, and on September
2, 1903, an exécution was duly issued upon said judgment and deliver-
ed to the said John McGrath, constable, and under it said McGrath
sold the remaining personal property of the défendant at public sale on
September 8, 1903, to one À. P. Henningsen, for $400, who was the
highest and best bidder therefor, and said McGrath delivered said
property to said Henningsen. Pending the suit one Charles Hartneck
filed his labor or wage claim under the statute, which claim was al-
lowed in the sum of $62.50. Out of the moneys realized from said
sale under said exécution, the said McGrath paid in the sum of $209.19,
the amount of said judgment, costs, and interest, and retained $19.64
for his expenses and costs, and paid the labor claim of said Hartneck,
238 129 FEDBEAL REPORTEE.
in the sum of $62.50, and returned said exécution as satisfied. The
total amount of the judgment, costs, interest, accruing costs, and of
said labor claim was $291.33. This would leave a balance in his hands
of $176.17, and this amount, in his return made by said McGrath, he
allèges, was paid back to said A. P. Henningsen. In the meantime, and
on the 23d day of September, 1903, upon a pétition in involuntary bank-
ruptcy proceedings fil'ed in this court by certain of his creditors, said
George F. Geiser was duly adjudged a bankrupt, and Frederick H.
Drake was on the I2th day of October, 1903, duly appointed as the
trustée of the estate of said bankrupt, Geiser; and, upon qualifying
as such trustée, said Drake made demand upon said McGrath for the
payment to him of the said sum of $176.17, as a part of the estate of
said bankrupt. Said McGrath failed, neglected, or refused to pay said
sum, or any part thereof, to said Drake, who made complaint to "Thomp-
son Campbell, one of the référées in bankruptcy of this court, to whom
the said bankruptcy matter had been referred; and thereupon said
Campbell issued an order to show cause, requiring said McGrath to
appear before him and show cause why he should not pay over and
surrender to said Drake the balance of $176.17 in his hands as the pro-
ceeds of his exécution sales. This order was duly served upon said
McGrath, and he appeared in person and by attorney before the réf-
érée and answered, and asked to hâve the proceedings on said order
continued, in order that he might make amendment of his return on
-said exécution. As to what matters he expected to amend, said return
does not appear. He seems to hâve had plenty of time in which to
amend his return, but no amended return was presented to the court.
Upon the hearing had before the référée, said McGrath was ordered
to pay said balance to the trustée. He again failed to pay over this
balance, and thereupon he was adjudged to be in contempt, and the
matter was certified to this court by said référée. The évidence of
the défendant shows that he received the sum of $67.50 specified above,
and that he sold the remainder of the bankrupt's property for $400.
He dénies, however, that he received this $400, or any part thereof. It
also appears that he delivered the said property so sold by him to said
Henningsen.
A sheriff who fails to collect the amount of a bid made at an exécution
sale is prima facie liable to the exécution debtor as for a neglect of duty.
Murfree on Sheriffs, § 999a. If an officer sells the property on crédit,
without authority, he and his sureties are liable for ail loss. Murfree,
supra, § 993a. To the same effect is Maddox v. Rader, 9 Mont. 126,
22 Pac. 386. It appears from thèse authorities that if the défendant in
this case sold the property to Henningsen on crédit, or in any other
way than for cash, he made himself liable personally for the amount
of the bid made by said Henningsen. In fact, he would be estopped,
under such circumstances, to claim that he never received any money
for the property. The effect of this would be to place the défendant in
the same position in which he is found by his return upon the exécution,
and I am not called upon to détermine whether or not défendant, as
between himself and the trustée of the bankrupt's estate, was not ab-
solutely bound by his return. In law, the défendant would be found
EX PARTE HOUGHTON. 2E9
to have $176.17 of money in his possession, which, under the statute
lavv, he is required to account for. He did not pay the same over to
the bankrupt, Geiser, nor to the justice's court in which the aforesaid
action was pending, and he has not paid the same over to the trustée
of the bankrupt's estate. Having been ordered to pay said sum to the
trustée by Thompson Campbell, Esq., one of the référées in bank-
ruptcy of this court, and, having failed to do so, adjudged in contempt,
and the matter certified up to this court. The défendant now urges
that he should not be punished for contempt, because he is a poor man,
with a large family, and unable to comply with the orders of the court.
The defendant's afhdavit upon this point is unsàtisfactory. In his re-
turn to the exécution he stated that he had paid the money over to Hen-
ningsen. In his évidence before the référée he swears that he never
received the money. If he paid this $176.17 over to Henningsen with-
out any order of court, or if he failed to collect this sum from Henning-
sen at the sale made to him, he has voluntarily placed himself in a
position where he cannot comply with the orders of the court, and thus
beconies liable to its command to perform his duty, See Rapalje on
Contempts, § 17; Galland v. Galland, 44 Cal'. 475, 13 Am. Rep. 167;
People V. Salomon, 54 111. 39. It does not appear that the défendant
cannot collect this money from Henningsen, and there is no reason why
he should not make some endeavor to do so. Henningsen has no right
to this money, according to his statement. I think, therefore, the judg-
ment and order of the référée that the défendant be found guilty of
contempt must be affîrmed. If at any time it should satisfactorily ap-
pear that the défendant is absolutely unable to pay over this money, the
court will consider it.
It is therefore ordered that the défendant, John McGrath, be, and
he is hereby, required to pay the said balance of $176.17 to Frederick
H. Drake, the trustée of the estate of George F. Geiser, bankrupt,
within live days, or if he shall fail within said time to make such pay-
ment, that said John McGrath be committed to the custody of the
United States marshal for the District of Montana, and be imprisoned
until he shall f ully comply with this order ; and that said McGrath pay
the costs of this proceeding.
Ex parte HOUGHTON.
(Circuit Court, D. Maine. April 9, 1904.)
No. 162.
1. Armt and Navt— Enlistment or Minces— Necessitt of Paeents' Con-
sent.
Under the làws o( tlie United States a minor cannot lawfully be en-
listed in any branch of the military or naval service wlthout the consent
of his parents, and one who has so enlisted by misrepresenting his âge
will be discharged by writ of habeas corpus at suit of his- parents.
2. Same— DiscHABGE on Habeas Cobpus— Jxieisdiction or Civil Coubt
FiEST Attaching.
Where a pétition for habeas corpus for the discharge of a minor from
the military service on the ground that he enlisted wlthout the con-
240 129 FEDEKAL EEPOKTEB.
sent oî his parents has been served, the court is not deprîvecl of Jurîs-
dictlon to dlscharge the minor by his subséquent arrest by the mllitary
authoritles on the charge of fraudulent enlistment
Habeas Corpus.
Frank D. Marshall, John C. Stewart, and J. M. Maloney, for peti-
tioner.
Isaac W. Dwyer, U. S. Dist. Atty.
HALE, District Judge. This is a pétition of Patrick Houghton
for habeas corpus. It is heard on an agreed statement of facts, as
follows :
"It Js agreed on behalf of the petitioner and of the United States that Wil-
liam Houghton was enlisted at Klttery, Maine, June 6, 1903, by Captain R. N.
Lane, for four years; that at the date of said enlistment he represented bis
âge to be twenty-one years and six months; that he has been in the service
of the United States from said 6th day of June, and is now in said service;
tbat he is the son of Patrick Houghton and Mary T. Houghton, citizens of
Massachusetts; that said William Houghton was born In Boston, August 10.
1884; that he enlisted without the consent of his parents or guardian; tbat
said William Houghton is now under arrest pending charges of fraudulent
enlistment, and that said arrest was made and charges preferred since the
service of the pétition for habeas corpus In thèse proceedings."
The statutes of the United States make it clear that it is the will
of Congress that minors shall not be enlisted in any branch of the
service without the consent of their parents. In the case of Mc-
Nulty and Clément, 2 Low. 270, Fed. Cas. No. 8,917, Judge Lowell,
in this circuit, held that under the laws of the United States a minor
cannot be lawfully enlisted in the marine corps without the consent
of his parents. Under section 11 17, Rev. St. U. S. [U. S. Comp.
St. 1901, p. 813], Congress requires the written consent of parents
for the enlistment of minors in the military service. Under the stat-
utes referred to in Judge Lowell's décision, just cited, Congress has
made clear its intention that the consent of the parents is necessary
for the enlistment of minors in any branch of the United States
military or naval service. The décision of Judge Lowell, which we
hâve quoted, applies distinctly to the enlistment of minors in the
marine corps. It appears by the agreed statement in the case at
bar that the minor, William Houghton, is now under arrest pend-
ing charges of fraudulent enlistment, and that said arrest was made
and charges preferred since the service of the pétition for habeas
corpus in thèse proceedings. This arrest refers clearly to an arrest
by the military authorities, but it appears afifirmatively that such ar-
rest was made and the charge preferred since the jurisdiction of
the United States attached in thèse proceedings. The rule of the
fédéral courts in this circuit touching this matter of jurisdiction is
settled by Judge Putnam in Re Carver (C. C.) 103 Fed. 624, where,
at page 626, Judge Putnam says:
"True it Is that it seems to be well settled by the décisions, and it is also
consonant with the ruies of law framed to prevent unseemly confllcts between
différent judicial tribunals, that, ordinarlly, where charges hâve been pre-
ferred, and the court-martial having jurisdiction has been ordered, and the
person charged has been held to answer, the jurisdiction which attaches la
UNITED STATES V. CLAKK. 241
favor of the court-martial will exclnde that of a civil tribunal In whlch pro-
ceedings for a writ of habeas corpus may afterwards be commenced. Under
such circumstances the civil tribunal must walt until the court-martial has
eoncluded its proceedings, and even until the sentence, if any, imposed by the
court-martial, has been worked out."
But in the case at bar the military authorities did not take any
action until the jurisdiction of this court under thèse proceedings
had attached. In the case of George F. Harris, petitioner for writ
of habeas corpus, recently decided in the Suprême Court of the Dis-
trict of Columbia, the court found that when Harris, the minor, en-
listed in the marine corps of the United States, he was a minor 19
years old, and was living at home with his father; that the arrest
by the military authorities did not occur until after the service of
the writ of habeas corpus had been made. The court discharged
the minor. In the case before us it is clearly the duty of this court
to exercise its jurisdiction and to grant the prayer of the petitioner.
The decree must be: Prayer of petitioner granted; writ of ha-
beas corpus to issue, returnable forthwith.
UNITED STATES v. CLARK et al.
(Circuit Court, D. Montana. April 1, 1904.)
No. 209.
1. Lands— Entet— Fratjd— Pleading.
A Mil by the United States alleged that public land in controversy had
been entered by certain persons, acting in collusion with défendant C,
for the purpose of obtainlng title to the land and conveylng the same to
défendants ; that the entries were made by fraud and misrepresentation,
to whlch C. was a party ; that C. acted for himself and the other défend-
ant, who well knew, at the time the land was conveyed to hlm by C, ail
the facts constituting the fraud, and that the land had been entered in
violation of the laws of Congress, and that the entrymen had entered the
same for hire, on spéculation, for the purpose of enabling défendants to
obtaln title in violation of the laws of Congress. Held, that such bill
stated a sufflcient cause of action against both défendants.
2. Same— Pabties.
The entrymen by whom the land had been conveyed to défendants be-
fore patents issued were not necessary parties to the bill.
3. Same— MtTLTiFABiousNESS.
Where several entrymen on public land eonspired with défendant C. to
make their entries for the benefit of C. and his codefendant, to whom the
land was subsequently conveyed, a bill to set aside such entries as fraud-
ulent was not multifarious in that each of such entries was a sépara te
transaction.
See 125 Fed. 774,
P. C. Knox, Atty. Gen., M. C. Burch and F. A. Maynard, Spécial
Asst. U. S. Attys., and Cari Rasch, U. S. Atty.
W. M. Bickford and W. A. Clark, Jr., for défendants.
KNOWLES, District Judge. The United States, as complainant,
sues the défendants, William A. Clark and Robert M. Oobban, in
129 F.— 16
242 129 FBDEEAL REPORTEE.
this action, to déclare void, and to déclare canceled ahd held for
naught, certain patents for certain lands situated in the District of
Montana, and purchased by some 50 persons from the United States
under the so-called "Timber and Stone Acts"; and also to compel
the said Clark to release and convey his purchased title, and ail in-
terest claimed by him in and to said lands, to the United States.
To the bill of complaint fîled herein the said défendants hâve in-
terposed separate demurrers, the grounds thereof being substan-
tially the same, and are : (i) That said bill of complaint does not
State facts sufficient to constitute a cause of action, either at law
or in equity in favor of the complainant and against the défendants.
(2) That there is a want of proper parties défendant to said bill, in
this : That the said bill charges a joint conspiracy between several
différent parties, and allèges an agreement and contract with cer-
tain parties who made entry or entries under a law of the United
States approved June 3, 1878, 20 Stat. 88, whereby the said parties
agreed to sell and transfer their lands before making entries of said
lands under said law. That Susan Alford and 49 others are named
as parties who entered said lands under said law, and that each com-
mitted a fraud against the United States in the making of their said
entries. (3) That the bill is multifarious and improperly confounds
distinct demands, in that each of the entry men and women men-
tioned in said bill of complaint made a separate and distinct entry
of a particular tract of land, which is set forth and described in said
bill, and that each of the said entries is based upon a separate and
distinct set of facts, and has no relation to any other entry men-
tioned in said bill.
Suiïîcient facts are set forth in the bill to show that the several
parcels of land entered bythe entry men and women named in the
bill were procured from the United States by fraud and misrepre-
sentation, and that the said Cobban was a party to theSe frauds;
and it is also stated that the said Cobban acted for himself, and for
the use and benefit of Clark. It is also charged that the défendant
Clark well knew, in a gênerai way, if not in détail, at the time the
said conveyances to ail of said lands were made to him by the said
Cobban, the facts constituting the frauds alleged to hâve been com-
mitted by the said entry men and women and said Cobban, and
well knew, and had good cause to know, that the said lands had
been entered in violation of the laws of Congress under which the
said entries were made, and that the said several parties had entered
the same for hire and upon spéculation, and for the purpose of en-
abling him, the said défendant Clark, through the said Cobban, to
procure title from the United States to the same by évasion and vio-
lation of said laws of Congress. Under thèse allégations it would
appear that there is a good cause of action against both Clark and
Cobban. Cobban, it appears from the bill, obtained a conveyance
of the said lands from the entry men and women, and conveyed
the same to Clark, and it is claimed they were acting together in
the procuring of title to thèse lands. Considering thèse allégations,
I hold that the bill does state facts sufficient to constitute a cause of
action.
UNITED STATES V. CLARK. 243
Under the second ground, that there is a want of proper parties
défendant to the bill, the claim is made that ail the persons who
made the entries named in the bill should hâve been joined with
Clark and Cobban as défendants. The bill shows that patents were
issued to thèse parties, that before patents issued they conveyed the
lands to Cobban, and that Cobban subsequently conveyed the same
to Clark. Under and by virtue of the statute law of Montana, the
title subsequently obtained by thèse parties inured to the benefit of
Clark. A fraudulent grantor of land, as he has no further interest
therein, is not deemed a necessary party to a suit brought to set
aside the conveyance. i Beach, Mod. Eq. Pr. § 72; Dunn v. Wolf
et al. (lowa) 47 N. W. 887. In the case of Northern Pacific R. R.
Co. V. Kindred (C. C.) 14 Fed. IJ, an action was brought to set aside
certain deeds fraudulently obtained for certain lands of the North-
ern Pacific Railroad Company. In that case it was insisted that the
parties who first received a conveyance of thèse lands, and after-
wards conveyed them to Kindred, should hâve been made parties.
In considering this matter, Judge McCrary said:
i<« * • ijijjg jjjjjy necessary parties are the persons who hâve some prés-
ent interest in the controversy, and against whom the complainant has a rigbt
to decree for relief. The persons who are alleged to hâve been used as the
instruments of the frauds, and who hâve, in pursuance of the eonspiraey, con-
veyed to others the title which was once vested in them, are not necessary
parties."
See, also, Cherokee Nation v. Hitchcock, 187 U. S. 294, 23 Sup.
Ct. IIS, 47 Iv. Ed. 183.
The next point presented is that the bill is multifarious. The
claim is made that each one of the entries made by each one of the
parties making the same is a separate and distinct act, based upon
a separate and distinct set of facts, and has no relation to the other
entry mentioned in said bill. In the case of Hayden v. Thompson,
71 Fed. 60, 17 C. C. A. 592, it was held that, where a bill charged
that separate stockholders of an insolvent national bank had received
«eparate dividends, they could be charged in a bill in equity by its
receiver with holding the money each had received in trust for the
creditors of the bank. In that case each stockholder had received
a separate dividend upon a separate amount of stock. That, upon
the facts, would seem to be a stronger case in support of the conten-
tion of the défendants than the one at bar. The Circuit Court, on
the argument on the demurrers, held, in favor of the défendants, to
the eflfect that the bill was multifarious (67 Fed. 273) ; on appeal,
the décision of the court below was reversed. In N. P. R. R. Co.
V. Kindred, supra, it was held that, where the bill charged a eon-
spiraey entered into for the purpose of obtaining the complainant's
lands for less than their value, through the fraud of its agents, a
bill was not multifarious because each particular transaction charged
is several in character and distinct from ail the others. In the case
at bar a eonspiraey is also charged. In i Beach, Mod. Eq. Pr. §
134, the author says:
"There is no such gênerai prlnciple that distinct matters between the same
parties, and who sue or are sued, cannot properly be united In the same bill.
244 129 FEDERAL REPORTER.
On the contrary, there are several cases in whîch It has been held that matters
of the same nature and between the same parties, although arising out of dis-
tinct transactions, may be joined in the same suit."
See, also, Id. § 129.
The suit in this case is against two défendants, while the transac-
tions by which title was obtained from the United States were sepa-
rate; still the cases are ail much alike; the grounds for relief in
each case are the same, and the uniting of ail of them in one action
prevents a multiplicity of suits, and I can see no good reason for
requiring 50 separate suits when one will accomplish the same purpose
fully. As to multifariousness it is said: "It is almost universally
declared that every case must be governed by its own circumstances,
and the question is left to the discrétion of the court." Section 115,
Beach, supra.
For the foregoing reasons, the défendants' demurrers must be,
and the same are hereby, overruled.
McFARLAND v. STATE SAVINGS BANK et aL
(Circuit Court, D. Montana. April 1, 1904.)
No. 225.
1, Dbcbee Pbo Confesso— Vacation.
Where a bill was talcen pro confesso on demurrers being treated as
Insufflcient for failure of the parties to make the affldavit required by eq-
uity rule 31, but no final decree could hâve been entered in favor of the
complainants until one of the défendants vrho had not been served had
been brought in, and défendants' failure to bave the demurrer verifled
was the resuit of a mistake caused by lack of knowledge as to the proper
mode of procédure in equity, défendants, on presentlng answers on the
merits, should be entitled to bave the decree pro confesso vacated on pay-
ment of the costs of the suit to the date of their application.
Alex Mackel, for plaintifif.
McBride & McBride, for défendants.
KNOWLES, District Judge. The complaînant, G. O. McFarland,
filed his bill of complaint in this court on October 12, 1903. AU o£ the
défendants named in the bill, except Lulu F. Largey, were duly served
with process, and appeared in the case, and filed demurrers to the
bill, alleging several grounds of objection to the same. The solicitors
for the appearing défendants certified that, in their opinion, their de-
murrers so interposed were well founded in point of law ; but no affi-
davit was made by any of the défendants that said demurrers were not
interposed for delay, as required under the provisions of equity rule 31
of the Suprême Court.
Complainant caused thèse demurrers to be set down for a hearing.
Subsequently, however, but during the présent term of court, he en.-
tered an order for taking the bill pro confesso. This action on the
part of complainant treated the demurrers as of no force, on account
of the failure of the parties to make the affidavit required by equity
rule 31, supra. The appearing défendants now ask to be let in to file
answers to the merits of the suit.
STATE SAVINGS BANK. 245
It îs évident from an inspection of the bill that no decree fully de-
termining ail the rights of ail the parties to this controversy can be
had until Lulu F. Largey, one of the défendants herein, has been served
with process. Under thèse circumstances, the complainant, at présent,
can hâve no final decree as against thèse appearing défendants.
As to the i,ooo shares of stock which it is charged should be held
in trust for complainant, it does not appear as to who holds the same,
be it Liilu F. Largey, Thomas M. Hodgens, or the State Savings
Bank. It appears that this stock was assigned to Lulu F. Largey, and
that she was to use the same as collatéral security in obtaining a loan
of money from the State Savings Bank. Whether it was so used is
not disclosed by any allégations contained in the bill. Whether the
State Savings Bank now holds said stock as a pledgee is also not dis-
closed by the bill.
There are certain interrogatories propounded in the bill to be an-
swered by the défendants, but, in the matter of presenting thèse inter-
rogatories, complainant fails to conform to the requirements of equity
rule 41. No mémorandum is found at the foot of the bill, requiring
each of the défendants tb answer any spécifie interrogatories. There
are a good many other defects in the bill that might be noticed, which
might cause some confusion in making answer to the same.
The défendants claim to hâve been surprised and to hâve made a
mistake on account of rule 1 1 of this court, which requires a demurrer
to be certified to by counsel, as in equity rule 31, but does not require
an afiidavit of good faith by one of the parties interposing the de-
murrer. This rule is placed under the head of common-law rules, and
should not hâve been confounded by counsel with the rules governing
equity proceedings. On account of the confusion made by this rule.
it has been abrogated by the Circuit Court several years ago. Still it
has been quite a common mistake on the part of attorneys who hâve
been educated under the code system of pleading to fall into this er-
rer. In 5 Ency. PI. & Pr. 1014, it is said: "Mère orders pro con-
fesse are opened, much as a matter of course, upon a showing of sur-
prise and a meritorious défense." Again, Id. p. 1015 : "A decree pro
confesso may be opened, and the défendant let in to answer, where his
failure to appear or answer was due to the négligence of his solicitor."
Whilst I cannot say in this case that there was any négligence on the
part of the solicitors for thèse défendants, still there was a mistake,
by reason of a lack of knowledge as to the proper mode of procédure
on the equity side of this court, occasioned, perhaps, by the aforesaid
common-law rule 11 of this court. The défendants hâve presented
separate answers on the merits, and I think the case ought to be heard
on the merits. It is a case involving a very considérable amount, and,
under the circumstances presented, calls for some leniency and liberal-
ity on the part of the court. Leave is therefore given to the défend-
ants to file their answers, upon the condition, however, that they pay
the full amount of the costs thus far incurred in this suit.
246
129 FEDERAL REPORTER.
MIDVALB STEEL CO. v. CAMDBN IRONWORKS.
(Circuit Court, E. D. Pennsylvanla. March 30, 1904.)
No. 53.
1. Pleadino — SnpFiciENCT OF Déclaration— Motion for Judgment.
A plaintif!: is not entltled to judgment on tbe pleadings for the price
of articles whieli plaintifC was to manufacture and deliver to défendant.
where It appears from the face of the letters alleged to constitute the
contract, which are set out, that the priée was not to be due until a
certain time after the articles were delivered, and it does not appear that
they ever were so delivered.
On Rule for Judgment for Want of a Sufficient Affidavit of Défense.
Thomas Leaming, for plaintiflf.
H. Gordon McCouch and R. C. Dale, for défendant.
J. B. McPHERSON, District Judge. Upon this motion I cannot
take into account the correspondence that passed betweeti the parties a
year and a half after the contract was made. It may be compétent
évidence on the trial for some purpose, but it certainly does not form
part of the contract itself, and is not properly on the record. Confining
myself, therefore, to the other writings that are attached to the plaintiff's
statement, I find an apparently unqualified agreement that the price
of the forgings was not to be due until 90 days after they were delivered
f. 0. b. at Cincinnati, Ohio. As it is undisputed that no such delivery
has been made, the plaintiff's suit seems, therefore, to be prématuré.
Of course, a différent situation may develop on the trial of the case. I
am speaking now only of the effect of the two letters dated January 27
and February 20, 1902, and of the spécifications dated January 25,
1902. The letters are as follows:
"Phlladelphla, January 27, 1902.
"The Camden Ironworks, Camden, N. J. — Gentlemen : Referring to your
valued favor of the 3rd instant, in which you enclose blue prints of shafta
and Connecting rods, your Nos. 8314, 8320 and 8301, which are duplicates of
drawlngs furnished us some time ago, also a duplicate copy of the spécifica-
tions for shafts and rods, ail as requested by us of your Mr. Lewis. We hâve
gone carefully over the verbal quotatlon made by our Mr. Bowen, and we now
submit the foUowing priées : 4 Cranb shafts, finished complète, as per B/P
0-S301, 13%c. per Ib. 4 1. P., 4 H. P. and 4 L. P. Connecting rods ; finished
complète as per B/Ps # 8320 and # 8314, 23y8C. per Ib.
10c. per fb.
4 Connecting rods,
24 Piston rods,
48 Distance rods,
12 Couplings,
4 Shafts 'A',
4 " 'B',
12 Main crosshead pins,
4 Air pump crosshead pins,
"The above priées are for forgings delivered Cincinnati, O.
"Hoping they wIU warrant you placing your order with us, we are,
"Very truly yours, The Midvale Steel Co.
"Terms : Cash 90 days. by Henry D. Booth.
"Camden Iron Works,
"Accepted subject to spécifications H. G. H, Jarr."
accompanyiug this proposai."
finished
complète,
as per
B/P 0-8297
**
"
n ^i
8334
tt
•*
t* Il
1
8334
t*
t(
** "
1
8334
••
II
tt it
t
44/80
•<
M
t» «
44/80
II
It
It II
<
44/81
13, "
II
Il It
4"V81
IN EE LINCOLN. 247
"Order No. 3764. Camaen, N. J. 2/20 1902
"Midvale Steel Co., Nleetown, Pa. : Please send the followlng wlth a Bill,
numbered as above : 4-Crank shafts flnished and fltted up complète as per our
priEt 024-8301 herewith, price $.13% per Ib. F. O. B. Cincinnati, Ohlo. Terms
cash 90 days after delivery. As per your quotatlon of January 27th, 1902.
Patterns when used to be the property of 0. I. W. and dellvered Camden Iron-
works, Camden, N. J.
"Ail the above to be strlctly In accordance to spécifications. For delivery
see spécifications. For Camden Ironworks
"Hamlîn."
The relevant parts of the spécifications are as follows :
"The whole of the above to be of flrst-class materlal and workmanship, and
must be to the complète satisfaction of the Camden Ironworks and the en-
gineer of the City of Cincinnati or his représentatives. * • * Ail the
above to be dellvered f. o. b. cars at California Pumping Station, City of Cin-
cinnati, Ohlo."
"Accepted accompanying proposai to the Camden Ironv^orks dated January
27th, 1902, and accepted by Camden Ironworks.
"Accepted for the Midvale Steel Company,
"by Henry D. Booth
"Camden Ironworks,
"H. G. H. Jarr."
The rule for judgment for want of a sufficient afRdavit of défense is
discharged.
In re LINCOLN.
(District Court, N. D. California. February 8, 1904.)
No. 13,216.
1. Indians— Allotted Lands—Ceimes— State Coixbt— Jubisdiction.
Where land was allotted to an Indian under Aet Cong. Oct. 1, 1890 (26
Stat 658), providing for the réduction of the Round Valley Indian Réserva-
tion, and authorizing the agricultural lands therein to be surveyed and
allotted to Indians residing thereon in severalty, such allotment did not
operate to exclude the land from the réservation so as to confer jurlsdic-
tion on the courts of the state In which It was located to prosecute the
allottee for a violation of the state's game laws committed on the land
allotted to him.
Marshall B. Woodworth, U. S. Atty., for petitioner.
Pillsbury, Madison & Sutro, for respondent.
DE HAVEN, District Judge. The petitioner is an Indian ward of
the government residing upon the Round Valley Indian Réservation,
situate in the county of Mendocino, in this state. On January g, 1904,
in the justice's court of Round Valley township, county of Mendocino,
state of California, he was convicted of the alleged offense of having
deer méat in his possession on the I4th day of November, 1903, in said
Round Valley township, contrary to the Pénal Code of this state. It
is conceded that the alleged offense, if any, was committed at the home
of the petitioner, on land which has been allotted to him by the govern-
ment, under the provisions of the act of Congress approved October i,
1890, entitled "An act to provide for the réduction of the Round Valley
Indian Réservation, in the state of California, and for other purposes"
(26 Stat. 658), and that such land was within the boundaries of the
248 129 FEDEBAL EEPOETEB.
Round Valley Indian Réservation as they existed at the date of the
passage of said act.
The petitioner is a ward of thé government, and tlie légal title to the
land which has been allotted to him is still in the United States, and the
act of allotment did not hâve the efïect of excluding such land from the
limits of the Round Valley Indian Réservation. Such being the facts,
there can be no doubt that the justice's court was without jurisdiction
to enter the judgment under which the imprisonment of the prisoner
is sought to be justified. In re Blackbird (D. C.) 109 Fed. 139; State
V. Campbell et al., 53 Minn. 354, 55 N. W. 553, 21 L. R. A. 169 ; United
States V. Kagama, 118 U. S. 375, 6 Sup. Ct. 1109, 30 L. Ed. 228.
Petitioner discharged.
HORAN V. HUGHES.
(District Court, S. D. New York. May 15, 1903.)
1. CoNTRACTS— Défense of Agenct.
Défendant, to sustaln the défense against hls contract wîth plalntlfC
that he was actlng as agent, must prove that he dlsclosed the name of
his principal. It Is not enough that plaintlff supposed he was aeting for
some one not disclosed.
In Admiralty.
Peter S. Carter, for libelant.
James J. Macklin, for respondent
HOLT, District Judge. Hughes made the contract with Horan.
He is therefore presumably responsible on it. His défense is, in sub-
stance, that he was aeting as agent for a principal. To maintain such
a défense, he must prove that he disclosed the name of his principal.
It is not sufficient that he was aeting as agent, or that the other party
to the contract supposed he was aeting as agent, if he did not know who
the principal was. De Remer v. Brown, 165 N. Y. 419, 59 N. E. 129;
Tew v. Wolfsohn (Court of Appeals) 66 N. E. 934. The évidence in
this case, in my opinion, preponderates that Hughes either chartered
Horan's boat himself, or that, if Horan supposed Hughes was aeting
as agent, he did not know who Hughes' principal was.
There should be a decree for the libelant for the amount demanded in
the libel, with costs.
H 1. See Principal and Agent, vol 40, Cent DIg. §§ 501, 522.
UNITED STATES V. ORIENTAL AMERICAN CO. 249
UNITED STATES v. ORIENTAL AMERICAN CO.
(Circuit Court, D. Oregon. March 5, 1904.)
No. 2,784.
1. CusTOMS DuTiEs— Classification— Refined Cocoanut Oïl— Cocoa-Btjt-
TEKINE.
As to certain coeoanut cil of tlie melting point of 70° to 75° F., whicli
bas been purified and rendered suitable for culinary purposes and the
manufacture of high-grade soaps, and wliicli is not susceptible of the
same uses as cocoa-butter, held, that the article is not subject to duty
as "cocoa-butterlne," under paragraph 282, Tariff Act July 24, 1897, c.
11, § 1, Sehedule G, 30 Stat. 172 [D. S. Comp. St. 1901, p. 1652], but is free
of duty under paragraph 626 of said act (section 2, Free List, 30 Stat.
199 [D. S. Comp. St 1901, p. 1685]) as coeoanut oil.
2. Same— CocoA-BuTTEEiNE.
Cocoa-butterine, as provided for in paragraph 282, Tarife Act July 24,
1897, c. 11, § 1, Sehedule G, 30 Stat. 172 [U. S. Comp. St. 1901, p. 1652],
consists of products made in imitation of cocoa-butter, and adapted for
use as a substitute therefor.
Edwin JVIays, for the Government.
P. L. Willis and Guy G. Willis, for défendant
BELLINGER, District Judge. The tariff act provides that coeoa-
nut oil, with other enumerated commodities, "when imported shall
be exempt from duty." Act July 24, 1897, c. 11, § 2, Free List, par.
626, 30 Stat. 199 [U. S. Comp. St. 1901, p. 1685]. The défendant im-
ported 46,912 pounds of refined coeoanut oil, which was so classified
by the customs officers at this port, but which, after analysis by the
United States chemist at New York, was reclassified by them, under
instructions from the Secretary of the Treasury to the Board of Gen-
eral Appraisers, as "cocoa-butter or cocoa-butterine." Paragraph 282,
Tariff Act July 24, 1897, c. 11, § i, Sehedule G, 30 Stat. 172 [U. S.
Comp. St. 1901, p. 1652]. When so reclassified, the marchandise im-
ported became liable to a duty aggregating $1,641.92, for the recovery
of which this action is brought.
Cocoa-butter is produced from the beans of the cacao or chocolaté
tree ; the word "cocoa," used in this connection, being a corruption of
the word "cacao." The importation in question is made from the fîeshy
part of the coeoanut, a product of the cocoa palm. Ail products made
in imitation of cacao or cocoa-butter, and adapted to its use, are classi-
fied as cocoa-butterine, and are dutiable.
It is conceded by the government that the importation in question
is refined coeoanut oil. The reason given for classifying it otherwise
is that it is in fact coeoanut oil deodorized and prepared for edible pur-
poses, that the refining process has rendered it agreeable to the taste
and edible, and that it is not placed on the market under the name of
"coeoanut oil," but under varions names indicating a différent product
and use from coeoanut oil, such as "Mannheim butter," "vegetable but-
ter," etc. Such is the effect of the report of the United States chemist
at New York, which has been admitted in évidence on behalf of the
government. Two cases are cited in this report in support of the con-
250 129 FEDERAL KEPOETER.
clusion reached. In one of thèse cases the marchandise in question was
invoiced as "nucoa butter," an article used chiefly by confectioners as a
substitute for cocoa-butter. It is described as a hard butter, manufac-
tured from cocoanut oil by subjecting the oil to hydraulic pressure until
the soft oils are expressed from it, when the hard oil remaining is re-
fined by careful washing with steam, according to a patent process.
The extra-refifted oil resulting is then colored with yellow coloring
matter, presumably to give it a resemblance to cocoa-butter. The melt-
ing point of this product is 87° F. It is represented that it is "as good
and genuine an article for chocolaté thinning as cocoa-butter itself" ;
that it is successfully used instead of cream in the manufacture of
caramels, and renders wax and wrappers unnecessary. The Board of
United States General Appraisers found that this manufacture was iiot
the cocoanut oil of commerce, but a product of that oil, and dutiable,
and this décision was affirmed in the Circuit Court of Appeals for the
Seventh Circuit. Apgar v. United States, 78 Fed. 332, 24 C. C. A.
113. In the Qther case the article imported was a product of cocoanut
oil obtained by "eliminating the softer oils and the free fatty acids, thus
raising the melting point and removing the rancidity found in the
cocoanut oil of commerce." The Board of General Appraisers held
that this product had been advanced beyond the condition of an oil,
and was a substitute for cocoa-butter. Décision of General Appraisers,
In re Wood, G. A. 5,353 (T. D. 24,495). -A- sample of the merchandise
which was the subject of this décision (No. 5,353) was procured by the
attorney for the United States, and is made an exhibit in this case, to-
gether with a sample of unrefined cocoanut oil, and one of the mer-
chandise which is the subject of this action. Thèse three samples are
marked as Exhibits i, 2, and 3, respectively. They were marked by the
examining chemist as 2,661, 2,662, and 2,663, respectively, and the
références to them in the testimony are by thèse numbers. Prof.
Knisely, chemist at the State Agricultural Collège in this state, at the
instance of the attorney for the United States, made an analysis of thèse
three products in order to détermine by comparison whether Exhibit
No. 3 (Chemist's No. 2,663), the merchandise imported, bas been by
process of manufacture advanced beyond the condition of an oil, so
as to constitute it a cocoa-butterine, under the décisions of the Board
of General Appraisers in the cases referred to. Tried by ail of thèse
tests, some 12 in number, no appréciable déviation was found in the
imported merchandise from the unrefined oil. The two articles difïered
equally in character from Exhibit No. i (Chemist's No. 2,661), the arti-
cle held to be a cocoa-butterine in the later of the two cases upon which
the report of the chemist at New York is based.
Mr. Loebell, chemist and manager for the oil mills at Singapore,
where the importation was refined, testifies as a witness in defendant's
behalf that his Company manufactures three classes of cocoanut oil,
designated as No. i, No. 2, and No. 3. The last is an inferior grade
of oil, and is chiefly used in thè country where manufactured for lighting
purposes. None of it is exported. No. i is white, free from rancidity,
smell, and taste, and is used for culinary purposes and for making
high-grade soap. No. 2 is used for culinary purposes by the Chinese
and for soap-making. There is only slight variation in the melting
UNITED STATES V. ORIENTAL AMERICAN CO. 251
point of thèse three oils, such as will be found in ail cocoanut oils — the
melting point being from 70° to 75° F., while the melting point of
cocoa-butter is 85° to 95°. This witness testifies that the No. i cil —
the oil involved in this action — is not produced by the élimination of
the softer oils, as was the case with the manufacture involved in the
cases cited ; that this oil is "the entire cocoanut oil in the same state
as it is contained in the fresh cocoanut, without any of the lower or
higher melting parts having been removed" ; that cocoa-butter is made
from the bean of the cacao or chocolaté tree, by heating it up between
60 and 80 degrees centigrade, and pressing it under hydraulic pressure,
thus separating the fat, which comprises 40 to 45 per cent, of the whole,
from the nonfatty part. The remaining dry substance is ground up and
sold as cocoa. This vsritness further testifies that he has made experi-
ments to détermine whether the imported product could be adapted
to the purposes for which cocoa-butter is used, by trying to raise its
melting point far enough (some 15° F.) to make it a suitable substitute
for such butter; that this can only be done by adding certain higher
melting substances to it, or removing some of the lower melting parts
from it; that neither of thèse methods is practicable in Singapore,
since, owing to the high température of that climate, the employment
of a refrigerating plant would be necessary, while it can be done in
other countries at ordinary température at a considerably less expense.
The witness explained the process of separating the high and low melt-
ing parts of the fats included in the cocoanut oil. He exhibited a
sample of Cochin oil, a kind of cocoanut oil that comes from Cochin,
and that cornes in free of duty. He testifies that this is exactly the
same thing as the merchandise imported by the défendant, with the
exception of having a little more free fatty acids.
The élimination of free fatty acids and the softer oils from the cocoa-
nut oil of commerce adapts it for use as a substitute for cocoa-butter.
This has been decided. No board or court, so far as I am advised, has
gone the length of holding that removal of the free fatty acids without
raising the melting point of the oil adapts it for use as such substitute.
It renders it edible and adapts it to gênerai culinary use. But edible
oils are not necessarily butter, or imitations of it; nor is rancidity,
which is a manifestation of free fatty acids, a characteristic of cocoanut
oil. The oil made from the fresh nut is free from it, sweet and edible.
The so-called cocoanut oil of commerce contains it in varying degrees,
depending on the condition as to cleanness and freshness of the copra,
or dried kernel of the nut, from which it is made. The refining pro-
cess, which constitutes what is called the "manufacture" of the oil,
merely removes from it the impurities due to the manner in which the
kernel is handled and dried, and to its partial decay. There is no stand-
ard of purity by which the cocoanut oil of commerce is known.
That oil, for anything that appears to the contrary, may be a pure and
edible oil. An edible cocoanut oil is not a butter because it is edible.
Other vegetable oils, like olive oil and cotton seed oil, are edible, and,
with butter, are used in cooking as substitutes for the fat of swine.
The unrefined cocoanut oil is used for culinary purposes by Chinamen
in the Straits Settlements. It must be assumed that whether an oil
is an oil or a butterine does not dépend upon the degree of rancidity
252 129 FEDERAL EBPORTEB.
it has, by which îts gênerai culinary use is affected. A product, to be
dutiable as cocoa-butterine, miist be useful as a substitute for cocoa-
butter. It must be an artificial substitute for cocoa-butter. Such is
the holding of the Board of General Appraisers.
As already appears, cocoa-butter is a product of the bean of the
cacao or chocolaté tree. The oil from cocoanuts, to be classed as
cocoa-butterine, must be an imitation of this cacao or cocoa butter.
It must, in other words, be an artificial cocoa-butter. The testimony in
the case shows a wide différence between the two articles. One of
the witnesses, a dealer who has sold cocoanut oil of the manufacture
in controversy for a year and a half, testifies that he never offered it for
sale, or knew of any one else offering it, as cocoa-butterine ; that it dif-
fers in appearance from cocoa-butterine ; that there are, of the import-
ed butterines and those manufactured hère, some 12 or 15 différent
cocoa-butterines ; that they are ail solids, with a melting point of
about 90° F., and are usually sold in cakes, wrapped in paper, and
packed in cases, while the oil in question melts at about 80° completely
and becomes a liquid, and is sold in hermetically sealed packages;
that the two products differ in color, in texture, and in the uses to
which they are applied; that cocoa-butterine is sold to confectioners
and pharmacists as a substitute for cocoa-butter; that in the pharma-
ceutical trade the cocoa butter and butterines are largely used for
suppositories ; that they are similar in color, in texture, in the nature
of the fracture when broken, and in the degree of melting; that in
many cases the odor of the cocoa-butter is attempted to be introduced in
the butterines, not always successfully, but that they are put up in the
same manner, packed in the same weight of packages, and bear, as near-
ly as an imitation may bear, ail the characteristics of cocoa-butter ; that
they are readily recognized by every one in the trade; that confection-
ers refuse to buy the oil in question because its low melting point makes
it entirely unsuitable as a substitute for cocoa-butter. The testimony
of the confectioners is that the importation in question is not used
as a substitute for cocoa-butter ; that any sweet, clean fat can be used,
to a limited extent, in thinning chocolaté; that inost fats dissolve at
a very low degree, while cocoa-butter, because it melts at a higher de-
gree, is more suitable for thinning chocolaté, "so the chocolaté won't
dissolve and spread"; and that, in the confectioner's business, cocoa-
butter is chiefly used for this purpose. Some of thèse witnesses testi-
fied that they had used the cocoanut oil in question, but it was not suc-
cessful ; that it was no more suitable for their use than lard or cotton
seed oil. From the testimony in the case it appears that this cocoanut
oil is used chiefly for soap-makïng, and that more than three-fourths of
the importation on account of which this action is brought was pur-
chased by one manufacturer for such use.
From thèse facts, I conclude that the merchandise in question is not
an imitation of, nor a substitute for, cocoa-butter, and that it is not
dutiable under the tarifï act.
GRAHAM V. TLAXTEKS' COMFRESS CO. 253
GBAHAM V. PLANTERS' OOMPEESS CO.
(District Court, S. D. New York. Aprll 14, 1904.)
1. ShIPPINO — DeMUBBAGB— LlABILITY OF CONSIGNEE.
Where a consignée Is Interested in the cargo, and accepta It under a
charter party made between the vessel and the consignor whlch provides
for demurrage, he is Ilable therefor in case o£ his default
2. Same— BiLLS or Lading.
Where a part of the freight had been paid by the consignor, and the
consignée was required by the charter party to pay the balance, a pro-
vision in the bill of lading requirlng the consignée to pay freight at the
rate agreed on, in accordance with the terms of the charter party, re-
ferred to freight alone, and did not obllgate the consignée to pay demur-
rage.
3. Samb>— Failuee to Accept Cabgo.
Where, though a consignée was not liable for demurrage under the bilI
of lading or charter party, he improperJy refused to take part of the
cargo within a reasonable time after arrivai, he thereby became liable
for damages arising from the delay.
Martin A. Ryan, for libellant.
Simpson, Thacher, Barnum & Bartlett and Graham Sumner, for re-
spondent
ADAMS, District Judge. This action was brought by Stephen Gra-
ham, as owner of the boat Six Brothers, against the Planters' Compress
Company, to recover a claim for freight, with demurrage and other
charges, on a quanti ty of hay transported from Montréal to New York
in August, 1903. The freight, amounting to $185, was admittedly due
and an offer was made to pay it, with custom house charges, but refused
and the action was instituted to recover $318.60, which included the
custom house charges mentioned, amounting to $4.70, towing charges
in New York Harbor, amounting to $4, demurrage for 32 days at $4
each, amounting to $128, and wharf âge charges in New York for 31
days, amounting to $8.90. An ofïer was made on the 22nd of January,
1904, to allow judgment for $150 and costs to date.
The dispute arises out of the condition of 51 baies of damaged hay
and the responsibility therefor, the contention of the libellant being
that it was the duty of the shipper to furnish proper covering for the
cargo to protect it from the weather while en route and the damage
occurred because it did not do so. The respondent claims that the
damage arose through a leaky condition of the boat and that the
libellant should be held responsible for it, which would require a dis-
missal of the libel, in view of the offer to pay.
The testimony is to the effect that the damage was principally away
from the side of the boat, where some slight leaks existed. My im-
1 1. Demurrage, see notes to Harrison v. Smith, 14 C. C. A. 657 ; Eandall
V. Sprague, 21 C. C. A. 337 ; Hagerman v. Norton, 46 C. C. A. 4.
See Shipping, vol. 44, Cent. Dig. § 571.
254 129 FEDERAL REPORTER.
pression formed on the trial, that in ail probability the damage was
caused through defective coverings, has not been disturbed but rallier
confirmed by a penisal of the testimony, in connection with a considéra-
tion of the improbability of leaks, located as thèse were, damaging the
cargo. The libellant's claim should, therefore, be sustained, but the
respondent insists that if such conclusion is reached, the respondent
being merely a consignée is not liable, and in any event is entitled to $25
for the détention of 4 Canadian tarpaulins, which the libellant received
in Montréal and failed to deliver promptly in New York.
The question of when and how far a consignée is liable for demur-
rage dépends upon the particular facts in each case. A mère consignée,
who is not interested in the goods carried, is not liable for demurrage —
Merritt & Chapman Derrick & Wrecking Company v. Vogeman (D. C.)
127 Fed. 770 — But where the consignée is interested in the cargo and
accepts it under a charter party made between the vessel and the
consigner, which provides for demurrage, he becomes liable in case of
his default. Sutton v. Housatonic R. Co. (D. C.) 45 Fed. 507.
In this case a shipment of 5000 half baies of hay was ordered from
the respondent by Thebaud Bros, of New York. The respondent ob-
tained the hay at Montréal from the Canadian Baling Company, Ltd.
and it was forwarded under a charter, of which the following is a
copy:
"Charter Party.
Concluded at Montréal this 30th day of July 1903
Between
The Canadian Baling Co. Ltd Merchant of Montréal
and
Stephen Graham Captain of boat Six Brothers
It Is This Day Mutually Agreed:
1. That said boat Six Brothers belng tlght, staunch, and in every way fltted
to carry hay, shall be at the port of Montréal Québec on the St. Lawrence
River, on the day of July Slst 1903, ready to receive a cargo of pressed hay,
not to exceed what can pass under ail bridges safely, and when loaded shall
proceed with ail reasonable speed for New York, and there deliver sald cargo
as ordered by Plantera Compress Co. at the port of New York.
2. Boat to give, free of charge, elght full working days to load & unload
said cargo, Sundays and Holidays excepted, after which demurrage shall be
paid by shipper at the rate of $4.00 per day. -It-i5-ïiîiàsr-StGGd-t-lia^tMs-â8-
murrago ie payable at point of tihipmont nud oannot bo ooUoatod fpom oon
s ignoo.
3. Cargo to be loaded at the expense of The Canadian Baling Co. Ltd Mer-
chant.
4. Boat to pay ail canal tolls and towages to New York and one towage
In New York Harbor within lighterage limits.
6. Freight to be paid at the rate of Three hundred and ten dollars for the
full cargo.
6. Captain to receive, as an advance, when the cargo is loaded, the sum
of One hundred & twenty flve dollars.
Balance of freight to be paid by consignée, free of commission, on rlght
delivery of cargo at New York.
7. The Company to unload sald cargo at New York.
8. The boat to allow eight full days for discharging & loading, Sundays
and Holidays excepted, after which demurrage shall be paid at the rate of
$4.00 per day ; lay days commencing immediately after Captain enters hIs
boat at the Custom-house, New York City, and reports to the consignée.
GEAHAM V. PLANTEES' COMPBESS CO. 255
9. The Merehant agrée to furnish suffldent tarpaullns to cover the hay on
deck.
10. Captain to deliver tarpaullns at point of dlscharglng to the consignée.
Canadian Ballng Company Ltd.
per Wm J S Burns,
Marchant
Wltness: Stephen Grabam
B. Brlsebols. Captain."
(Ëndorsed)
"Captain to report to
Plantera Compress Co
675 West 33rd St.
New Xork.
Pler 16
Prentlce Stores
Brooklyn.**
The bill of lading was as follows:
"Shlpped In good order and condition by Canadian Ballng Co Ltd on board
the boat Six Brothers Whereof Stephen Graham is master, now lylng at the
port of Montréal
No. of Baies. Welght In Pounds
2686 Hay * 259630
For Export to Xucatan Ibs.
to be delivered in llke good order and condition at the port of New York (the
act of God, fire and every danger and accident of the seas, rivers, canals and
navigation, of whatsoever klnd excepted), Consigned to Plantera Compress
Co he or they paying frelght at the rate of as agreed, In accordance wlth
the terms of the charter party.
In Wltness Whereof the master of said boat hath signed 3 Bills of Lading,
ail of thls ténor and date, one of which belng accomplished, the other to stand
void.
Dated at Montréal, thls Ist day of August 1903
Stephen Graham, Master."
(On margln)
"Notlfy Planters Compress Co
675 West 33rd St
New York
Planters Compress Co
New York
2686 Baies hay
259630 Ibs
4 Canadian
Tarpaullns
to be retd
Captain paid $4 70/00
Customs Charges on Cargo
F, W. Myers & Co.
Freight advanced
$125 00/00
Captains copy"
(Endorsed)
"Captain to report to
Planters Compress Co
675 West 33rd St
New York."-
256 129 FEDERAL REl'OIlIEE.
When the boat reacKèd New York, the cargo was taken charge of
by the respondent, which procee^ed to unload it. As above appears,
some of the cargo was damaged, without fault on the part of the boat,
and the testimony of the libellant shows that he was ordered back to
piers 4 and s, where he had been lying before going to Statçn Island
to discharge, under a promise f rom the respondent that the balance
of the hay and the covers would be taken off. But the hay was not re-
moved and the boat was detained with the covers until the 2ist of
September, when they were taken possession of by the respondent
and the libellant was informed that the hay was his. On the 23rd
of September, he sold it for $15, and gives the respondent crédit
for that amount. During the period he was detained, the wharfage
mentioned accrued.
Bills of lading requiring the consignée to pay the freight, only hold
him liable for such provision alone. Burrill v. Crossman (D. C.) 65
Fed. 104; Id., 69 Fed. 747, 750, 16 C. C. A. 318; Crossman v. Burrill,
179 U. S. 100, 109, 21 Sup. Ct. 38, 45 L. Ed. 106. Hère, $125 of the
freight were paid by the consigner and the consignée was by the charter
required to pay the balance. The provision in the bill of lading:
"in accordânce with the terms of the charter party" evidently referred
to the freight alone. Imust hold, therefore, that there was no liability
on the part of the consignée as such, under the charter party.
If the consignée had been entitled to reject the damaged hay, there
would be no liability on its part, but as it improperly refused to take
part of the cargo, the case seems in this respect, to fall under the
principle that where a consignée fails to take the cargo within a rea-
sonable time after arrivai, he remains liable for the damages arising
from undue delay, according to the ordinary rules of law, which govern
in the absence of a spécifie agreement. Crossman v. Burrill, supra.
I conclude that the consignée should be held for the delay incident to
the refusai, including the wharfage necessarily incurred during such
period, less $15, and unless the parties can agrée upon the amount
of damages, there will hâve to be a référence to ascertain them.
Decree for the libellant, with an order of référence.
SIMPSON V. FIRST NAT. BANK. ?57
SIMPSON V. FIEST NAT. BANK OF DENVEE,
FIRST NAT. BANK OF DENVER v. SIMPSON.
(arcuit Court of Appeals, Eighth Circuit March 22, 1904.)
Nos. 1,828, 1,829.
1. APPEAL— ASSIGNMENT OF EeKOES— FiLING BefOEE ALLOWANCE OP APPEAL
Indispensable.
The flling of an assignaient of errors before or at the time of the allow-
ance of an appeal Is Indispensable, under the eleventh ruie of the Circuit
Courts of Appeals (91 Fed. vi, 32 C. C. A. Ixxxvlli), and the appeal wlll
be dismissed if the assignment Is not thus filed.
2. SaME— CONDITIONAL ALLOWANCE.
An allowance of an appeal on condition that the petltloner give a bond
In a fixed amount does not become an allowance of the appeal until the
bond is given and accepted, and the filing of an assignment of errors before
or at the time of the giving and acceptance of the bond Is a flling wlthln
the time prescribed by the rule.
8. Appeal Mattee of Right— Allowance of Weit of Beeoe Mattee fob
JxjDiciAL Détermination.
An appeal is a matter oif right, secured by act of Congress upon corn-
pliance with the statutes relative to security and with the rules of the
courts.
The allowance of a writ of error is a matter for judicial détermina-
tion upon a considération of the sufflcieney of the grounds for the writ
stated in the pétition and assignment of errors.
The reason for the rule requiring the filing of an assignment of errors
before the allowance of an appeal is to give notice to opposlng counsel
and the appellate court of the questions of law to be discussed. In an
action at law there is the additional reason that the présentation of an
assignment of errors to the judge who allows or issues a writ of error is
essential to his décision of the question whether or not It should be Issued.
4. Evidence— Accouni'—Each Side Peima Facie Evidence of its Contents.
The introduction in évidence wlthout qualification of an account con-
taining débit and crédit Items makes each side évidence of its contents.
In the absence of ail other évidence, the débits and crédits of such an
account ofCset each other, and the account proves Its balance only. An
admission must be taken with Its qualifications as an entirety.
But where there is other évidence the court or jury is not requlred to
give equal crédit to each side of the account, to the admissions against
interest, and to the self-servlng statements contalned in it. They may.
and they should, détermine the fact for or against the évidence contalned
in the account as the prépondérance of ail the évidence in the case and the
rules of law require.
(Syllabus by the Court.)
Appeals from the Circuit Court of the United States for the District
of Colorado.
See 93 Fed. 309, 35 C. C. A. 306; 115 Fed. 1019, 52 C. C. A. 683.
Simon M. Simpson exhibited his bill against the First National Bank of
Denver to procure an accounting from it of the proceeds of certain personal
property, which he averred that he had pledged to the bank to secure his In-
debtedness to It. The bank denled that a portion of the goods were pledged,
and alleged that its cashier had bought and paid for them. A decree to that
efCect was rendered in the court below, and this suit was dismissed. Upon an
appeal to this court that decree was reversed, and the case was remanded to
the court below, with directions to take an account of the proceeds of ail the
Personal property which the eomplainant clalmed to be pledged. That account
129 P.— 17
258 129 FEDEKAL REPOETER.
has been taken, and a decree bas been rendered upon the accounting. Each
of the parties to the suit ha« appealed from this decree.
T. J. O'Donnell, for plaintiff. ;
Charles J. Hughes, Jr. (Barnwell S. Stuart, on the brief), for défend-
ant.
Before SANBORN, THAYER, and HOOK, Circuit Judges.
SANBORN, Circuit Judge (after stating the facts as above). The
first question which the record in this case présents is whether or not
the assignments of error were filed in such time that the merits of the
case may be reviewed in this court. On June 23, 1902, each of the
parties to this suit prayed in open court for an appeal from the decree,
and orders were made that the appeal of the défendant was allowed,
"but upon the condition, nevertheless, that the respondent give bond
on such an appeal. in the sum of fifty thousand dollars ($50,000)," and
that the appeal of the complainant was allowed, "but upon condition,
nevertheless, that he give bond on said appeal in the sum of iive
hundred dollars ($500)." On August 15, 1902, the défendant filed an
assignment of errors, an approved bond in the sum of $50,000, and a
citation dated on that day. On August 20, 1902, the complainant filed
an assignment of errors, an approved bond for $500, and a citation dat-
ed on that day. The bonds were approved and the citations were signed
by the judge who heard the case and made the conditional orders of
allowance of the appeals. In this way the question is presented wheth-
er or not an assignment of errors is filed at or before the allowance of
the appeal, within the meaning of rule 11 of this court (91 Fed. vi, 32
C. C. A. Ixxxviii), when it is filed at the time when the judge signs the
citation and approves the bond which he has made a condition of the
allowance of the appeal.
The acts of Congress provide that "there shall be annexed to, and
returned with any writ of error for the removal of a cause at the day
and place therein mentioned an authenticated transcript of the record,
an assignment of errors and a prayer for reversai with a citation to
the adverse party," and that "appeals * * * shall be subject to
the same rules, régulations and restrictions as are or may be prescribed
in law in cases of writs of error." Rev. St. §§ 997, 1012 ; i U. S.
Comp. St. 1901, pp. 712, 716. Rule 11, so far as it is relevant to the
question now under considération, reads:
"The plaintiff In error or appellant shall file with the clerk of the court
below, with his pétition for the writ of error or appeal, an assignment of er-
rors which shall specify separately and partieularly each error asserted and
intended to be urged. No writ of error or appeal shall be allowed until such
assignment of errors shall hâve been filed."
The acts of Congress did not require the filing of an assignment of
errors before the allowance of a writ of error or of an appeal. This re-
quirement rests upon rule 11 of this court, which is the same in terms
and in effect as rule 34 of the Suprême Court of the United States.
There are two reasons for this rule: One is that the judge to whom
the application for the allowance or issue of a writ of error is presented
may be informed what the alleged errors are upon which the petitioner
SIMPSON V. FIE8T NAT. BANK. 259
relies, so that he may intelligently décide the question whether or not
the writ should be issued. The other is that opposing counsel and the
appellate court may be informed by a statement which becomes a part
of the record what questions of law are presented for their considération
and détermination.
The first reason applies to the allowance of a writ of error only.
It is inapplicable to the allowance of an appeal. The filing of the péti-
tion for a writ of error, with its accompanying assignment of errors, is
the institution of a suit in the appellate court. The pétition and the as-
signment set forth the grounds for the issue of the writ, and the duty
of deciding whether or not thèse grounds are sufficient to warrant its
issue, and of issuing or refusing to issue it in accordance with his dé-
cision of this question, is imposed upon the judge to whom they are
presented.
It is not so in the case of an appeal. The right to appeal is an abso-
lute right granted to thedefeated party by the acts of Congress. No
court or judge has any jurisdiction or power to condition the allowance
of an appeal upon his considération or détermination of the question
whether or not the applicant présents alleged errors which form rçason-
able grounds for the review of the décision below. That question is
reserved for the considération of the appellate court exclusively. The
petitioner has the same right to the allowance of his appeal, in the ab-
sence of error or of the appearance of it, as when he présents the most
conclusive reason for the belief that the décision against him was erro-
neous. The only question for the considération of the court or of the
judge to whom an application for an appeal is made is the sufiiciency
of the security offered for the costs and damages, or for the costs alone ;
and if the petitioner présents satisfactory security, and prays an appeal
in accordance with the statute and the rules of the courts, the duty of
the court or judge to whom he présents his application is imperative
to allow it. Brown v. McConnell, 124 U. S. 489, 490, 8 Sup. Ct. 559,
31 L. Ed. 495; Pullman's Palace Car Co. v. Central Transp. Co. (C. C.)
71 Fed. 809. The resuit is that the assignment of errors is not required
to be filed before an allowance of appeal for the benefit or information
of the court to whom the application for its allowance is made. The
only reason for its filing at that time is that the alleged errors upon
which the petitioner relies may be made a part of the record for the in-
formation of opposing counsel and of the appellate court ; and that ob-
ject is as well attained by filing it at any time before the security is
approved and accepted as by filing it before the order is made which al-
lows the appeal only upon the giving of the security.
Again, no formai order of allowance of an appeal is requisite to its
perfection. The acceptance of security in open court at the same time
at which the decree challenged is rendered, or the acceptance of security
and the issue of a citation by the proper court or judge at any proper
time or place within the period limited for an appeal, in themselves con-
stitute its allowance, without any other or further order regarding the
matter. Sage v. Railroad Co., 96 U. S. 712, 715, 24 L,. Ed. 641 ; Draper
V. Davis, 102 U. S. 370, 371, 26 L. Ed. 121 ; Brandies v. Cochrane, 105
U. S. 262, 26 L. Ed. 989; National Bank v. Omaha, 96 U. S. 737, 24
L. Ed. 881.
260 129 FEDERAL REPORTEE.
What, theii, in the light of thèse principles and ruies, was the légal
effect of the orders of the court below, made on June 23, 1902, to
the eflfect that the appeals of thèse parties should be allowed upon
condition that they give bonds in the amounts there specified ? That
court had no jurisdiction or power to détermine whether or not the ap-
peals of thèse parties should be allowed if the appHcants complied with
the rules of the court and gave the security required by the acts of
Congress. If they eflfected this compliance and the court accepted their
security, its further order allowing or disallowing their appeals would
b'e utterly futile. Their appeals would be as effective, upon their com-
pHance with the rules and upon the acceptance of their security, if the
court made an order that they were disallowed, as they would be if it
made an order that they were allowed. The only judicial discrétion
and the only function of the court upon the application for the appeals
was to détermine the amount and suffîciency of the security which
the parties were to présent when they took them. This discrétion it
exercised. It fixed the amounts of the bonds, and it ordered that the
appeals should be allowed upon the express condition that thèse bonds
were .given. If the bonds had not been given, that court would not
hâve lost, and this court would not hâve gained, jurisdiction of this case.
The appeals would not hâve been perfected, and the case would hâve
remained in the Circuit Court. Draper v. Davis, 102 U. S. 370, 371,
26 L. Ed. 121; Aspen Mining & SmeUing Co. v. Billings, 150 U. S.
31, 35, 14 Sup. Ct. 4, 37 L. Ed. 986.
The légal effect of the conditional orders of allowance, therefore,
was exactly the same that the effect of an order that the amounts
of the bonds for appeals were fixed at $50,000 for the défendant
and $500 for the plaintiff would hâve been. Under such an order the
acceptance of the bonds and the issue of the citations would hâve al-
lowed the appeals, without any order of allowance whatever. Under
the conditional order actually made the acceptance of the bonds and the
issue of the citations could hâve no other effect. Thèse acts allowed the
appeals, and our conclusion is that the appeals were not allowed until
the bonds were accepted. The orders of allowance were expressly con-
ditioned upon the giving of the bonds, and until they were given and
accepted the appeals were not allowed, because, until then, the condi-
tions of their allowance were not fulfiUëd. As the assignments of error
were filed before or at the time of the acceptance of the security and the
issue of the citations, they were filed within the time fixed by rule 11
of this court and the merits of the cases presented by the appeals are
open for our considération.
The cases of Radford v. Folsom, 123 U. S. 725, 727, 8 Sup. Ct. 334,
31 L. Ed. 292, Brown v. McConnell, 124 U. S. 489, 490, 8 Sup. Ct. 559,
31 L. Ed. 495, and Hewitt v. Filbert, 116 U. S. 142, 6 Sup. Ct. 319,
29 L. Ed. 581, hâve been read and considered; but they do not appear
to us to be inconsistent with the conclusion at which we bave arrived.
Neither of them présents a conditional order of allowance. It may
be, as the Suprême Court held in Radford v. Folsom, that, where a
bond is given and accepted under an order which absolutely allows
an appeal and fixes the amount of the bond, that the appeal relates
back to the date of the order of allowance, for the purpose of deter-
SIMPSON V. FIRST NAT. BANK. 2G1
mining the term of the appellate court at which the case should be
docketed. That question is not before us, and its décision either way
does not détermine the issue whether or not a conditional allow-
ance becomes an absolute allowance before the condition is fulfilled.
In Brown v. McConnell and Hewitt v. Filbert the Suprême Court in
effect held that where an appeal is absolutely allowed and the case is
docketed in that court, without the taking of security or without the
issue and service of a requisite citation, that court has the power in its
discrétion to allow security to be given, or to issue a citation and permit
it to be served, and then to proceed to hear the case upon the merits.
But it is not perceived that thèse décisions answer the question whether
or not an appeal, permitted only upon an express condition, is allowed
before the condition is complied with. The opinions of this court hâve
declared, and it is our purpose to adhère strictly to the rule which they
announce, that rule ii of this court is just and reasonable, that it will
be enforced, and that under it we cannot consider or décide issues of
law which are not raised by assignments of error filed before or when
the writ of error or appeal is allowed. In actions at law the assignment
of errors must be filed and presented to the judge before the writ of
error is issued or allowed, because he must détermine, from an ex-
amination of it and of the pétition for the writ, whether or not they
set forth any substantial grounds for the issue of the writ. Frame v.
Portland Gold Min. Co., io8 Fed. 750, 47 C. C. A. 664 ; U. S. v. Good-
rich, 54 Fed. 21, 22, 4 C. C. A. 160; Union Pac. R. Co. v. Colorado East-
ern R. Co., 54 Fed. 22, 4 C. C. A. 161 ; City of Lincoln v. Sun Vapor
Street Light Co., 59 Fed. 756, 759, 8 C. C'. A. 253, 256; Flahrity v.
Railroad Co., 56 Fed. 908, 6 C. C. A. 167 ; Crabtree v. McCurtain, 61
Fed. 808, 10 C. C. A. 86.
The rule applies with equal force to cases brought to this court by ap-
peal. In Webber et al. v. Mihills, 124 Fed. 64, 59 C. C. A. 578, an appeal
had been taken in a case in which the allowance was made on November
19, 1902, was absolute, and there was no claim or suggestion that it was
not perfected on that day, so far as it could be completed without the
fîling of an assignment of errors. But the assignment was not filed
until November 26, 1902. The appeal was dismissed because the assign-
ment of errors was not filed before the appeal was allowed. The con-
clusion in the case at bar that the appeals hère were not allowed until
the conditions on which the court permitted them were fulfilled, and that
the assignments of error were filed within that time, is consistent with
the décision in the Webber Case. The opinion in Lockman, Adm'r,
V. Lang et al. (filed November 30, 1903) 128 Fed. 279, was rendered up-
on what was then supposed to be a state of facts similar to those present-
ed in Webber v. Mihills, and the décision followed the conclusion in
that case. A re-examination of the record in the Lockman Case, how-
ever, discloses the fact that the order of allowance of the appeal in that
case contained a condition similar to those in the orders in the case at
bar. The order of allowance was conditioned upon the giving of the
bond for $100, and when this bond was presented and accepted by the
court a pétition for a writ of error to which an assignment of errors
was attached was filed with the trial court. A motion for a rehearing
has been made in this court in that case, and the final décision of it
202 129 FEDERAL REPORTEE.
will be made to conform to the views which hâve been expressed in
this opinion. We turn to the considération of the merits of the case.
Thèse are appeals from the decree of the Circuit Court upon the
accounting directed by this court in Simpson v. First National Bank,
93 Fed. 309, 35 C. C. A. 306. In that case we found, from the évidence
which had then been produced, that on March 2, 1887, Simpson owed
the bank $33,685.31, and that for the purpose of securing the payment
of this indebtedness he conveyed and delivered to S. N. Wood, the
cashier of the bank, and to H. Z. Salomon, its agent, his house and
three lots in the city of Denver, which were worth about $12,500, his
stock of cigars, which was worth about $21,000 and was called the
"cigar store," and his bonded goods, which were worth about $25,000,
under an agreement with them that they should convert this property in-
to money, pay the debt he owed to the bank, and return the surplus
to him. The bank had admitted by its answer and testimony that Wood
received the bonded goods for the purpose of securing the payment
of $23,000 of the debt of Simpson to the bank, but it had alleged and
claimed that Wood bought the house and lots for $7,500, which he
applied in payment of Simpson's debt, and that he also purchased the
cigar store for a like amount, which he also applied to the payment of
the same debt and to the purchase of a certificate of deposit in the
name of the président of the bank. The claims of the défendant that
the transactions with Wood constituted a sale to him of the real estate
and of the cigar store were not sustained by the proof ; but as the com-
plainant, Simpson, had not alleged that the real estate had been con-
veyed to secure his debt, and had not asked for an accounting of its pro-
ceeds, the conveyance of the house and lots to Wood and the réduction
of the debt of Simpson by the application of the $7,500, which the bank
alleged that Wood had paid for this real estate, was allowed to stand
as a sale, and the Circuit Court was directed to take and state an ac-
count of the proceeds received and of the expenditures made by the
bank and by its agents, Wood and Salomon, in the management and
disposition of the store and of the bonded goods. This account bas
been taken, and the court below has found, and rendered a decree to
the efïect, that the bank has received from thèse goods $22,061.93 more
than the sum of its expenditures and of the indebtedness of Simpson
to it, and that the latter is entitled to recover this amount from the bank,
with interest from January 19, 1893. Both parties hâve appealed from
this decree. The alleged errors pfesented for our considération by the
bank will fîrst be considered.
The cigar store was operated by Salomon from March 7 to March
25, 1887, when he gold it for cash and notes from which the bank
realized $19,541.66. Salomon then proceeded to sell many of the
bonded goods, which had been at first delivered to Wood by Simp-
son, and he concluded his relations with this transaction during the
last days of January, 1888. During this time the bank kept an ac-
count with him, styled "H. Z. Salomon Cigar Store Account," in which
Salomon deposited the proceeds of the sale of the store and of the bond-
ed goods which he handled, and eut of which he drew varions amounts
by checks or orders upon the bank. During the same time Wood,
the cashier of the bank, was expending money to pay duties and freight
SIMPSON V. FIRST NAT. BANK. 263
upon the bonded goods, and was selling to others and was himself col-
lecting the proceeds of some of thèse goods. The proceeds which he
obtained from thèse sales to others than Salomon he deposited in his
individual account with the bank. Out of this account he checked the
amounts which he paid for duties, freight, and other expenses incurred
in disposing of the bonded goods. Thèse two accounts, and much
testimony concerning many of the items which appear in them and
concerning the amount and character of the goods in the store and in
bond, were introduced in évidence at the first hearing for the purpose
of proving that the cigar store was piedged, but was not sold. In this
State of the case, and after the décision of this court, the Circuit Court
on June 8, 1899, ordered the accounting. The seventy-ninth rule in
equity requires parties accounting to bring in their respective accounts
in the form of debtor and creditor, and provides that any of the other
parties to the proceeding who are not satisfied with the account shall
be at liberty to examine the accounting party in the master's ofSce.
The burden and duty was therefore upon the bank to bring in an ac-
count in the form of debtor and creditor, which would show upon its
face the items which the bank claimed it had received and those which
it claimed to hâve rightfully expended on account of the store and of the
bonded goods, together with the respective dates at which it received
and paid them out. On October 22, 1900, more than a year after the
accounting had been ordered by the Circuit Court, the bank had pre-
sented no account whatever to the master. Thereupon counsel for
Simpson submitted to the master the évidence that had been taken at
the first hearing, and asked that the accounting might be had upon that
record. On March 21, 1901, counsel for the bank submitted an account
upon which two of the items credited to Simpson were : "Balance ret'd
by S. N. Wood from cigar store, $12,366.40. Collatéral in hands of
S. N. Wood sold, $26,273.82."
The items from which thèse balances were derived were not specified
in the account, but witnesses for the bank by their subséquent testimony
identified them. This account disclosed a balance due from Simpson
to the bank of $9,813.17, and its witnesses testified that it was a correct
statement compiled from its account books of ail the moneys received
and expended by it or by its agents on account of the store and the
bonded goods. It had, however, stated in its original answer that Simp-
son owed the bank only $2,742.98, upon the theory which it then main-
tained that the store was not piedged, but sold, and that he was entitled
to a crédit of only $7,500 on account of the store, from which the
bank actually received $19,541.66. At a later period during the hear-
ing before the master the bank filed another account, verified by the
testimony of one of its witnesses, which shows Simpson in debt to the
bank in the sum of $42,466.67. This account contains an item of $10,-
500 for goods placed in the cigar store and of $22,230.86 interest, which
appear hère for the first time. Testimony was introduced which identi-
fied the items of receipts and expenditures on account of the piedged
goods which passed through the individual account of Mr. Wood, and
they stand in the master's report free from exceptions.
The first spécification of error questions the action of the master and
of the court below relative to the cigar store account. That account
264 129 FEDERAL EBFOEXBK.
practically balances. Some of the items which appear in it to the crédit
of the cigar store were explained and verified by testimony, and some
were not. This is also true of the items charged against the cigar
store in that account. The master, in making the statement of account
upon which the decree below rests, charged the bank with the unex-
plained items on the crédit side of that account, which amount to about
$23,000, on the ground that they were admissions of the bank against
its interest ; and he ref used to crédit it with the unexplained items on
the débit side, which amount to about $20,000. Upon this subject he
said:
"By the décision of the Court of Appeals Mr. Salomon Is held to be in this
transaction the agent of the défendant, and this account must therefore be
considered as the account of the bank ; and the défendant must be charged
with the entire amount of receipts as shown by the account, and can take crédit
only for such items of disbursement as are shown to be proper and necessary
to the exécution of the trust. There can be no reasonable doubt but a portion
of the disbursements appearing on the account were expenses necessarily In-
curred in the transaction of the business, but they are not identified, nor the
purpose of the expenditure shown."
This décision and action of the master was affirmed by the court be-
low, and it is the subject of bitter complaint. The cigar store account
was ofïered in évidence by the complainant upon the accounting as a
part of ail the évidence taken at the iirst hearing. It was a single ac-
count, composed of débit and crédit items. There was testimony to
the effect that Salomon deposited the proceeds of the pledged goods
in the bank to the crédit of the cigar store in this account, that he
checked out of this account many thousand dollars to Wood, which the
latter applied to pay the debt of Simpson, and that he used the moneys
deposited in this account to run the business of the cigar store. This
testimony was uncontradicted. This was an account between the bank
and its agent, Salomon, and it was undoubtedly évidence that the bank
received from Salomon, on account of the cigar store and on account of
the bonded goods, the amounts which were credited to the store in that
account, and that it paid out upon the orders or checks of its agent
the amounts which are debited to the store therein. Where one
introduces in évidence an admission, it must be taken in its entirety,
with the qualifications which hmit or destroy its effect. The whole ad-
mission, together with the limitations and qualifications it contains,
must be taken together, because, unless thèse are ail received, the true
import and meaning of the admission may not be discovered, and
the truth, which is the great object of the inquiry, may not be ascer-
tained. • But although the entire admission, including the parts favor-
able as well as the parts unfavorable to the party who makes it, must
be received in évidence, they are not ail necessarily equally conclusive
or worthy of crédit, and it is the province and the duty of the trior
of the fact, in the light o£ ail the évidence in the case, to détermine how
much of the entire statement he will believe and how much he will
discrédit. Greenleaf, Ev. § 201; Bristol v. Warner, 19 Conn. 7, 18;
Kallman v. His Creditors, 39 La. Ann. 1089, 1090, 3 South. 382. This
rule applies to statements of account which are introduced in évidence
without qualification to secure the benefit of the admissions against in-
terest which they contain. In the absence of ail other évidence, each
SIMPSON V. FIRST NAT. BANK. 2G5
side of such an account qualifies and limits the other. Both sides must
be taken, weighed, and considered together. The items upon one side
offset the items upon the other, and the account proves its balance
only. Morris v. Hurst, Fed. Cas. No. 9,832 ; Bell v. Davis, Fed. Cas.
No. 1,249.
But, where other évidence relative to the matters referred to in the
account is presented for the considération of the court or jury, they are
net required to give equal effect to ail parts of the account — to the
admissions against interest and to the self-serving statements; but it
is their province and their duty to consider each side of the account,
together with ail the other évidence germane to it, and to give to each
part of it such crédit as they believe it to be fairly entitled to receive.
Neither side of the account in such a case is conclusive évidence of the
facts vvhich it discloses. The évidence presented by either side may be
rebutted and overcome by testimony aliunde, and the triors of the fact
may and should détermine the question at issue for or against the évi-
dence contained in the account as in their opinion the prépondérance
of ail the évidence in the case and the rules of law require. i Jones
on Law of Evidence, § 295 ; Walden v. Sherburne, 15 Johns. 409, 424;
Veiths V. Hagge, 8 lowa, 163, 174 ; Gildersleeve v. Landon, 73 N. Y.
609. The cigar store account, therefore, was prima facie évidence of
the receipt by the bank, on account of the bonded goods and on ac-
count of the cigar store, of the items upon its crédit side, and prima
facie évidence of the payment by the bank, upon the same account,
of the items on its débit side. But, as there was much other évidence
upon this subject, it was not conclusive proof of either fact, and neither
the master nor the court was required to give the same credence and
effect to the self-serving statements on the débit side that they gave
to the admissions against interest upon the crédit side of the account.
The effect of the application of this rule of law to the évidence in this
case will be considered later in this opinion, after the effect of the other
spécifications of error which affect the master's statement has been de-
termined.
The second spécification of alleged error made by the bank is that
the master and the court below found that the cigar store was sold for
$21,000, when the fact was that the selling price was only $19,900.
This spécification is without foundation in fact, because the account of
the master shows that the amount charged against the bank on account
of this sale was only $19,541.66. There was, however, an error in
the charge, which the master made against the bank, of $817.10 under
date of March 25, 1887. This item was a check of S. N. Wood to
Salomon, given to reimburse the latter for the payment of duties upon
the bonded goods which he had made. This $817.10 is credited to the
bank by the master in the item of $1.035.8? nnder the same date. The
charge of the $817.10 offsets the crédit to that amount, and the efïect of
it is to deprive the bank of any crédit for this amount of $817.10, which
it paid for duties on the goods. The débit side of the master's ac-
count should accordingly be reduced by the sum of $817.10.
The next complaint is that the master and the court below refused
to crédit the bank with $10,500 on account of imported cigars of that
value, which the counsel for the bank insisted were placed in the cigar
266 129 FEDERAL RBPOKTEE.
Store after ît had been delivered to Salomon and just before he sold
it. The bank also complains that the master refused, after the testi-
mony was closed, to permit it to prove that thèse cigars were thus in-
troduced into the store. The fact, if it be a fact, that thèse cigars were
placed in the store, and the évidence offered to establish that fact, are
ahke immaterial, in the absence of any proof, and of any ofifer to prove,
that thèse cigars were bought by, or were the property of, the bank.
The décision of this court at the former hearing was that the cigar
store and the bonded goods were the property of Simpson, and that
the bank must account for their proceeds. If the bank, or its agent,
Salomon, bought, paid for, and put into the cigar store, while it was in
the hands of the latter, more cigars, the bank would undoubtedly be en-
titled to a crédit for the amount which was realized from the sale of
those cigars to Hyman, when it produced fair proof of the proportion
of $19,541.66 which was obtained at the sale that was realized from
the cigars which it bought and placed in the store. The burden, how-
ever, would in any event be upon the bank to establish thèse facts, and
in the absence of proof of them the complainant would be entitled to ail
the proceeds of the stock. If the bank had purchased and mingled its
own cigars with Simpson's, it would hâve donc so at its péril. In the
case as it stands, the proof utterly fails to show that the cigars in ques-
tion were ever the property of the bank or of Salomon, or that either
of them ever bought or paid for them. There is neither proof nor
offer of proof of thèse essential facts. The probability is that, if any
cigars were ever added to the stock in the cigar store during the in-
cumbency of Salomon, they were the cigars of Simpson which hâve
not been otherwise accounted for by the bank, and there was no error
in the refusai of the master to crédit it with their supposed value, nor
in his refusai to permit it to prove that such cigars were placed in the
store, in the absence of évidence that they were the property of the
bank, or the property of any other person than Simpson.
On November 6, 1888, Simpson indorsed and dehvered to the bank
the promissory note of the Only Chance Mining Coinpany for $5,000.
At a later date such entries were made in the books of the bank as
strongly indicate that the bank treated this note as paid by the surplus
above $7,500 which it received from the sale of the real estate it had
obtained from Simpson. It is assigned as error that no crédit was
given to the bank for the amount of this note. As the complainant did
not attack the sale of the real estate to Wood for the sum of $7,500, and
that transaction stands unimpeached, nothing was ever in fact paid
upon this note, and crédit for it should be given to the bank. The
second note for $5,000 made by the Only Chance Mining Company
was not indorsed by Simpson, and for that reason it was properly
omitted from the charges against him.
Other spécifications of error are that the master and the court below
refused to receive in évidence the bill of sale and other documents and
testimony which tended to show that the transfer of the cigar store to
Salomon was a sale, and not a pledge, and that they did not hold that
inasmuch as the cigar store account appeared to balance, and Wood
testified that in 1889 he delivered up to Salomon the Only Chance
Mining Company's notes, a complète and conclusive settlement of the
SIMPSON V. FIRST NAT, BANK. 267
transactions between Simpson and tiie bank was thereby effected. But
tiiere was neither error of law nor mistake of fact in thèse rulings.
The second hearing below, was not a new trial of the issues which were
presented at the first hearing. It was not a rehearing of the questions
whether the transaction between Simpson, the bank and Salomon was
a sale or a pledge, and whether or not the accounts between them had
been conclusively settled in 1888 or 1889. Those issues were tried and
adjudicated by this court upon the appeal from the first decree. That
adjudication was the law of the case, and the only questions open at the
second hearing were those involving the state of the account between
Simpson and the bank and its agents, Wood and Salomon, who took
and held the cigar store and the bonded goods in trust to pay Simpson's
debt to the bank and to return the surplus to him. The former adjudi-
cation determined the issue whether the accounts between thèse par-
ties had ever been finally rendered and settled. No correct account had
ever been rendered, because the bank had never given to Simpson crédit
for more than $7,500, when he was entitled to crédit for $19,541.66 on
account of the cigar store ; and, even if the question were open for con-
sidération, the évidence does not satisfactorily sustain the claim that
any settlement was ever made between thèse parties, even upon the
erroneous theory upon which the bank originally insisted.
We turn to the complaints of Simpson. He insists that the charge
against him of $2,000 for the services of Salomon in handling and sell-
ing the pledged goods is excessive, and that it ought not to be allowed
to the crédit of the bank. But Salomon took possession of, and with
the aid of Simpson sold and collected the proceeds of, property of the
value of more than $50,000. He did this with the consent and pursu-
ant to the agreement made by Simpson with the bank. For thèse serv-
ices the bank has paid him $2,000. The only question hère is whether
or not the services of Salomon were worth that amount. The master
and the court below were compétent, upon the disclosure of the facts
that Salomon had rendered thèse services and that the bank had paid
him for them, to détermine their reasonable value, and their décision of
this question should not be disturbed, in the absence of error of law or
of mistake of fact. There is no évidence of either, and their finding
upon this subject is affirmed.
The next complaint is that the bank was credited with the payment
of $2,000 for the services of its attorney in defending the title to the
bonded goods against an action brought by one Muro, who claimed to
be the owner of them. The évidence is conclusive that the action was
brought, that the bank retained the attorney to défend it, that he did
défend it, and that his services were worth $2,000. The bank insists
that on May 17, 1895, it paid the attorney this amount, and Simpson •
déniés it. The évidence upon the question of payment is not very satis-
factory. It is such that a finding either way could not be said to be
without substantial support in the record. The master and the court
below agrée that the fee was paid, and that finding ought not to be
disturbed, in view of the state of the évidence upon this issue, and of
the fact that the issue involves nothing but interest upon the $2,000. It
involves interest upon the $2,000 only, because, if the bank did not pay
that amount to its attorney, the évidence conclusively shows that it
268 129 FEDEEAL REPORTEE.
incurred the liability to pay it, and Simpson, wlio appeals to this court
of equity for the proceeds of his property, ought, as a condition of the
relief he seeks, to pay the liability of his pledgee necessarily incurred
in defending the title to it. He who seeks equity should do equity.
The action brought by Muro was settled on January 19, 1893. But,
according to the report of the master, there was in the coffers of the
bank a surplus of the proceeds of the pledged property, after the pay-
ment of the debt of Simpson, at ail times subséquent to the year 1887.
It is assigned as error that in the statement of the account the bank
is not charged with any interest upon this surplus from 1887 until the
settlement of the Muro action on January 19, 1893. This balance,
however, was derived from the sale of the goods to a large part of
which Muro claimed the title. If he had succeeded in his action, the
bank would hâve been required to pay to him the value of thèse pledged
goods. It would hâve been relieved from paying their proceeds to
Simpson. It would hâve been entitled to apply those proceeds to satis-
fy the claim of Muro. It was the surplus which the bank should re-
ceive after properly administering the trust, after defending the title to
the pledged goods, and after paying the debt of Simpson, and that sur-
plus only, which the latter was entitled to receive from the bank. It
was impossible to détermine whether or not there would be any surplus,
and, if there should be, how much that surplus would amount to, until
the action which Muro had brought was determined. Until that time
nothing became due from the bank to Simpson, no action to recover
the surplus could be maintained, and consequently no liability to pay
interest upon the amount which the bank held in trust and had the
right to retain, at least for a reasonable time, in order to dispose of the
litigation against it, arose. The spécifications of error regarding the
interest cannot be sustained.
Référence has been made to ail the spécifications of error, and the
resuit is that if the unexplained items on the débit side of the cigar store
account should be disallowed, as they were by the master and the court
below, the $22,061.93 which was found by them to be due from the
bank to Simpson should be reduced by the déduction of $5,817.10 to
$16,243.83 and interest from January 19, 1893. If> on the other hand,
those unexplained items should be allowed and credited to the bank, a
decree should be rendered in favor of the bank and against Simpson,
because the aggregate of thèse items exceeds $16,243.83 by several
thousand dollars. We return to the considération of this, the most im-
portant question in this case.
The cigar store account was introduced before the master as a part
of the évidence at the first hearing, from ail of which this court de-
, duced the finding that on Mardi 2, 1887, Simpson owed the bank $33,-
685.31, that he paid it $7,500 by the conveyance of his résidence, and
pledged to it to secure the remainder of his indebtedness bonded goods
of the value of about $25,000 and a cigar store of the value of about
$21,000, leaving the bank indebted to him on the face of this finding
in the sum of about $19,814.69. 93 Fed. 310. The évidence at the
former hearing, in other words, so strongly indicated that there was
some amount of money due to Simpson on account of the pledged
goods that in the opinion of this court it overcame the évidence of thè
SIMPSON V. FIEST NAT. BANK. 2G9
débit side of the cigar store account, and induced a finding to the effect
which has been stated. It necessarily follows that when the counsel
for the appellee, Simpson, introduced before the master ail the évi-
dence at the former hearing, he made a prima facie case to the eflfect
that his client was entitled to recover about $19,000 from the bank, and
the burden was placed upon the appellant bank to overcome this con-
clusion by means of the accounting. Does ail the évidence, vs^hen
fairly considered, establish the fact that the bank was not justly liable
to pay to the complainant an amount approximating this sum? The
case imposes upon the court the duty of answering this question, and
it has been a difficult task to do so satisfactorily. The évidence is not
so clear that it is possible to state an account with the certainty that
every item in it is correct. If, however, when ail the évidence is taken
together, it indicates with reasonable certainty what the gênerai bal-
ance of the account between thèse parties must hâve been on January
19, 1893, the court is not relieved of the duty of finding this amount
and rendering a decree accordingly by minor doubts and uncertainties
which the record leaves undetermined. If there was any probability
that more or better évidence could be produced, the case might be re-
turned to the master for farther testimony ; but the witnesses hâve gen-
erally testified that they hâve now presented ail the évidence under
their control. Salomon, the chief actor in the drama, is dead. His
books and vouchers hâve been destroyed, and there is no hope of a more
satisfactory record from a prolongation of this litigation. This suit
has been pending for more than a décade. Its continuance would serve
only to deprive the ultimate victor of the benefit of the decree, and to
inflict unnecessary loss upon the defeated. In view of thèse facts, ail
the testimony, including especially both sides of the cigar store account,
has been carefully read and thoughtfully considered. Much of the
évidence has been read many times, and an earnest effort has been made
to justly détermine the main issue remaining in this case — the issue
whether the bank is justly indebted to Simpson for an amount ap-
proximating $16,000, or Simpson is indebted to the bank, as claimed
by counsel for the latter, for tens of thousands of dollars. The estab-
lished facts which persuade to the conclusion that has finally been reach-
ed upon this question will be briefly stated. No attempt will be made,
however, to itemize the amounts to be mentioned, or to make them ex-
act, because the significance of the facts is not in the spécifie amounts
with which they deal, but in their gênerai character and effect.
Conceding to the débit side of the cigar store account its effect as
prima facie évidence, the case before the master opened, as we hâve
seen, with that évidence rebutted and a prima facie case against the bank
established for the recovery of about $19,000, based upon ail of the évi-
dence at the first hearing and the finding of this court thereon. When
the subséquent évidence upon the accounting had been introduced, the
fact was established, by the cigar store account and by the testimony of
Simpson and Wood, that Salomon received from the pledged goods
and deposited with the bank in that account about $55,000, and that
out of this account he paid to Wood amounts which aggregated $24,-
766.40 to pay the debt of Simpson, $7,543 to pay a note which Salomon
gave to the bank when he took the cjgar store, and $2,000 to Salomon
2T0 129 FEDERAL EEPOETEK.
for his services in handling the pledged goods, leaving a balance of
about $20,000, which the débit side of that account shows that Salomon
had checked eut for other purposes which are not established or indi-
cated by the record. Now, the only other purpose to which this $20,-
000 could hâve been legitimately applied was to pay the necessary ex-
pansés of operating the store, which had a stock of about $20,000, for
23 days, and the reasonable expansés of selling the bonded goods, which
were worth about $35,000. The fact that Salomon checked this amount
of about $20,000 out of the bank through his cigar store account, and
that it was charged to him in that account, does not seem to us to be
convincing évidence that it was either reasonable, just, or necessary to
expend so large an amount to dispose of property which realized only
about $55,000. It is true that in the foregoing statement of the ac-
count, which finds the amount realized by Salomon from the goods he
sold to be $55,000, the cigar store account and the testimony of Simp-
son that Salomon deposited the proceeds of his goods in that account,
and that as the money accumulated he gave checks to Wood to apply
on Simpson's debt and to run the business, has been esteemed sufficient
proof , in the light of the other évidence in the case, that the unexplained
items on the crédit side of this account, which amount to about $23,000,
represent proceeds of the pledged goods received by the bank from
Salomon, while the débit side of that account is not given sufficient
probative force to establish the proper expenditure of the unexplained
items on that side of the account, which amount to about $20,000. But
there are substantial reasons for this conclusion, derived from the rela-
tions of the parties and the other évidence in the record. The bank
held thèse goods in trust as pledgee. It had the control of the goods,
of its agent, Salomon, of the account of the sales, and of the expendi-
ture of the moneys derived from them. Simpson had none of thèse
things. He participated in, perhaps conducted, the negotiations for the
sale of the goods under the supervision of Salomon; but he had no
control of the account or of the moneys deposited in the bank. It was
the duty of the bank to keep a correct account of the receipts from the
proceeds of the trust estate, of the necessary expenses of selling it, to
render this account to Simpson, and to pay to him the surplus remain-
ing after his debt and the necessary expenses of tuming the pledged
goods into money had been paid. It kept an account with its agent,
Salomon, but none with Simpson or with the trust estate. The crédit
side of this account is an admission against interest, while the débit
side is a self-serving statement, and in the présence of other persuasive
évidence upon-this subject the former naturally induces more credence
than the latter.
Again, this was not an account between a creditor and his debtor.
In such an account the debtor himself generally orders the payment of,
or receives, the items charged to him, and, if they are erroneous, he
has the knowledge and the testimony to disprove them. It is not so in
this cigar store account. This was an account between the bank, a
trustée, and its agent, Salomon. So far as this record discloses Simp-
son had no knowledge, nor means of knowledge, of the purposes for
which the $20,000 hère in question was expended, or of the items
through which it was drawn from the bank, while the latter, after the
SIMPSON V. FIEST NAT. BAHK. 271
moriey was dep&sited with it, had the power and was charged with the
duty to see and to know how this fund was used.
Again, this account was written by the bank, if the testimony of its
officers was true, at a time when they were acting upon the theory that
Salomon owned the cigar store, and had the right to use its proceeds
for his own benefit, or otherwise, as he saw fit. It may, therefore, well
be convincing évidence that the unexplained items on its crédit side
were derived from the pledged goods and were deposited with the bank.
But how can it be very persuasive évidence of the just application of
$20,000 of thèse trust funds which are included in the unexplained items
on its débit side ?
There is another class of évidence in this case which strongly con-
firma the conclusion that the unexplained items on the crédit side of the
cigar store account represent the proceeds of the pledged goods, while
those on the débit side do not represent a proper application of those
proceeds to the discharge of the trust. It is the évidence of the action
of the bank before this controversy had arisen. Neither the account
of Wood nor the cigar store account shows any surplus or balance due
to Simpson. The action of the bank demonstrates the fact that there
was such a surplus. While in 1887 it was treating the transfer of the
cigrr store to Salomon as a sale, and was giving Simpson crédit for
only $7,500 on account of it, instead of allowing him a crédit for its
proceeds, $19,541.66, it nevertheless acknowledged full payment of
Simpson's debt from the proceeds of the pledged goods on October 5,
1887. If upon that theory the debt was paid on that'day, Simpson is
now entitled to recover of the bank at least —
The amount of the certiflcate of deposit to Moflfat, which he had
bcrught with hls propei'ty, and which the bank was holding for
him $ 4,314 69
The différence between the ?7,500 the bank had credlted him for the
elgar store and $19,541.66, its proceeds 12,041 66
The amount deposited In the cigar store account after October 5,
1887 5,683 99
$22,040 34
Less the amount pald Salomon for hls services $2,000 00
The amount pald for the settlement of the Muro action and
for the attorney's fées thereln 4,230 00
And the amount of the Only Chance note 6,000 00
Makingin ail $11,^30 00
And learing a surplus due him of $10,810 34
Thèse considérations hâve forced our minds to the conclusion that
the évidence clearly establishes the fact that the bank received about
$55,000 from the proceeds of the pledged giods which were handled
by Salomon. The receipt of this money by the bank charged it with
a trust in favor of Simpson, and made the bank Hable to him for every
dollar of it which it did not lawfully expend in dischargihg its trust.
Concède that the cigar store account is évidence that the bank paid out
the $20,000 evidenced by the unexplained items on the débit side of the
account upon the checks of Salomon. That fact is not enough to ex-
onerate it. It must go farther and establish the fact that it paid this
sum out either in satisfaction of the debt of Simpson to it or in dis-
272 120 FEDERAL REPORTEB.
charge of tHe nècessary expenses of cônverting the pledged goods înto
money. The proof is plenary that Simpson's debt and Salomon's note
and Salomon's services were paid' with about $35,000 of this fund.
But there is no évidence to show what was donc with the other $20,000.
The duties upon the goods, the freight, the insurance, the taxes upon
them were paid by Wood and are credited to the bank in the master's
account If other duties, other freight, other taxes, other insurance,
had been paid, the proof of it would doubtless hâve been forthcoming ;
for it would not hâve been difficult to obtain, and the witnesses for the
bank hâve testified that they hâve produced ail the évidence they could
secure. There is nothing left to which this $20,000 could hâve been
lawfully applied but the expenses of conducting this business, and it is
too tense a strain on our credulity to believe that it was nècessary to
expend $20,000 to pay the expenses of cônverting cigars and tobacco
worth only about $55,000 into money. The facts tô which référence
has now been made converge with compelling force to show that there
was a substantial surplus of many thousand dollars remaining in the
hands of the bank and of its agents after the debts of Simpson and ail
the legitimate charges against the proceeds of the pledged goods had
been satisfied. While they do not disclose the exact amount of this
balance, they indicate that it could not hâve been very far from the
$16,243.83 to which the award of the master has been reduced by the
spécifie exceptions which hâve been considered, and they leave little
doubt that a reversai of that award and a finding of an indebtedness of
Simpson to the bank would work substantial injustice. '
In reaching this conclusion the books and accounts of the bank and
the testimony of its officers and witnesses hâve not been disregarded,
but they fail to convince that the bank has fairly accounted for the pro-
ceeds of this trust estate which the proof, in our opinion, shows that it
received. In the first place, the account books of the bank were not
written to show, but to conceal, the truth of this transaction. They
did not disclose the fact that the deposit certificate to the président of
the bank for $4,314.69 was the property of Simpson. They were not
written to indicate, but to conceal, the fact that the cigar store was
pledged to secure the debt of Simpson. The bank never made or kept ,
any separate account of the receipts and expenditures on account of /
the pledged goods, as it was its légal duty to do. It mingled the
amounts which Wood obtained from them with his individual funds,
and permitted him to make his expenditures on account of them by
means of checks on his own account, paid indiscriminately with those
he drew to discharge his individual business obligations, so that there
was no way to trace his receipts and expenditures on account of the
trust estate, except by means of a tedious search for the items through.
his individual account, with the ^d of his recollection and his vouchers.
Even this account with Wood was not regularly kept, by entering ail
the items in it at the respective times at which the transactions to which
they relate occurred. It contains a single crédit on October 4, 1887,
of three items; one of $5,117.30, March 25; one ôf $10,000, May 13;.
and one of $5,000 August 4, making in the aggregate $20,117.30.
There were other errors in the books of the bank — one of $10,000 in
W^ood's account, one of $100.92, under date of December 15, 1887, in.
SIMPSON V. FIRST NAT. BAKK. 273
the cîgar store account, and one of seven items which made a différence
of $4,604.95 in the profit and loss account. The entries in the latter
account regarding the transaction in question in this suit, and the en-
tries of certain notes on the discount ledger relating to Simpson's ac-
count, were written over erasures of entries that it was impossible to
read. The ofUcers and witnesses of the bank were unable themselves
to make a true statement of the account between it and Simpson from
their books and vouchers. Their knowledge and testimony concerning
this subject hâve been neither uniform nor consistent. When they ex-
amined their books and made their answer, they stated an account on
the theory that the cigar store was sold by Simpson to Wood for $7,-
500. They gave Simpson crédit on account of it for that amount only,
and then showed a balance due to the bank of only $2,742.98. They
had not then discovered apparently that they held a deposit certificate
in the name of their président for $4,314.69, which, upon the theory
of that account, had been purchased with the money of Simpson, and
that he was entitled to additional crédits of this $4,314.69 and of $12,-
041.66, the différence between the $7,500 which they had credited him
for the cigar store and the $19,541.66 which that store produced. After
the décision of this court and the order for the accounting they stated
another account, which disclosed a balance of $9,813.17 against Simp-
son, and before the testimony in the présence of the master was closed
they presented a third account, in which the balance against Simpson
appears to be $42,466.67. The last account includes items of $10,500
for cigars taken from the warehouse and put into the cigar store, and
$22,230 for interest, which there first appear. One or more of the offi-
cers or witnesses for the bank testified that each of thèse three accounts
was correct according to the books of the bank and according to the
knowledge which the officers or witnesses had of the transactions. But
the three accounts and the testimony in support of them demonstrate
the fact that some of them must hâve been erroneous. There is noth-
ing in ail this évidence for the bank, including the débit side of the cigar
store account, of sufficient weight and cogency to overcome the broad,
controUing fact which the évidence establishes and which conditions
the entire case — the fact that the bank bas received from the pledged
goods many thousand dollars for which it has not in any way accounted,
save by the entries in the débit side of the cigar store account of un-
explained items to the amount of about $20,000. There is no legitimate
cause to which the expenditure of thèse items can be attributed under
the évidence, except the expenses of operating the store for 23 days,
such as rent and clerk hire, and the expenses of sëlling the bonded
goods. The débit side of this account may be évidence of a reasonable
expenditure for this purpose. Such a reasonable expenditure may hâve
amounted to $1,000. An expenditure of this character of some amount
must hâve been made. The probative force of the unexplained items in
the débit side of the cigar store account cannot and ought not to be ex-
tended beyond this reasonable expenditure, in the absence of évidence of
the exact amount paid out on this account, and this item of expenditure
is accordingly fixed and allowed to the bank at the sum of $1,000. The
record as it stands^ con tains no évidence that will sustain a finding that
it was either necessary, just, or right for the bank or its agents to ex-
129 F.— 18
274 129 FEDERAL EEPORTBR.
pend more than thîs amount in the exécution of its trust, în addition to
the amounts heretofore credited to it, while it is convincing to the effect
that the bank held ail the amounts which it received from the pledged
goods, above the sums it expended to administer the trust and to pay
the debts of Simpson, charged with an express trust for the benefit of
the complainant. The amount thus received by the bank above the
expenses of the administration of the trust and the debts of Simpson
is, therefore, found to be $15,243.83.
The decree below is accordingly reversed, and the case is remanded
to the Circuit Court, with instructions to enter a decree in favor of
the complainant, Simpson, and against the bank, for the sum of $15,-
243.83, with interest thereon at 8 per cent, per annum from January 19,
1893, and his costs to the time of thèse appeals. The bank may re-
cover the costs of thèse appeals in this court.
HBINZB et al. V. BUTTE & B. CONSOL. MIN. CO.
(Circuit Court of Appeala, Ninth Circuit March 4, 1904.)
No. 1,033.
1. CoNTEMPT— Natube of Peocbedinq— Review.
A bill in equity, flled in ald of an action at law to recover for trespasses
on a minlng clalm, alleged that défendants had ex'tended thelr underground
worklngs from adjolning clalms owned by thein into the clalm of com-
plainant, and prayed for an injunction restralning them from extracting
and removing ore therefrom. The answer justifled the trespasses on
the ground that the velns or Iodes into whlch défendants' workings were
extended had thelr apexes in défendants' clalms, and were thelr prop-
erty. A prellmlnary Injunction was granted, and, on pétition of com-
plainant, an order was entered requlring défendants to permit agents of
complainant to enter their workings, and examine, inspect, and survey
the same so far as necessary to obtaln évidence on the issue jolned. De-
fendants havlng refused to permit such inspection and survey, an order
was entered finding them in contempt of court, and adjudglng a fine
against them ; such order, however, to be discharged, as to both fine and
commitment, on their compllance with the préviens order. Held, that
such order of contempt was not a judgment in a crlmlnal, but in a civil,
proceedlng ; that It was remédiai and coercive in character, and entered
for the purpose of enforcing private rights of complainant, judicially
determined, and was not revlewable by writ of error.
2. Same— Peesons Bound bt Oedees of Couet— Officeks of Cobpoeation De-
' FENDANT.
Officers of a minlng corporation whleh is a party to a suit in equity
in whlch it bas been ordered tô permit an inspection and survey of its
mine are bound by such order, although not personally parties to the suit,
and may be subjected to punlshment for contempt, where, having the
power to require compllance with it by the company, they refuse to do so.
3. Interlocutory Oedebs— Peesons Bound— Pubchaseb Pbndente Lite.
A purehaser of minlng property, including the shafts, machinery, and
workings thereon, pendlng a suit against the grantor Inyolvlng the alleged
extension of such workings into adjolning property, is bound by an order
subsequently made by the court in such suit permlttlng the adverse party
to inspect and survey the mine.
In Error to the Circuit Court of the United States for the District
of Montana.
Thls is a wrltof error, direeted to the Circuit Court for the District of
Montana, to revlew an order of that court adjudglng F. Augustus Helnze,
HEINZE V. BUTTE * B. CONSOL. MIN. CO. 275
Josiah H. Trerise, and Alfred Frank guUty of contempt of court, in vlolating
an order of the court permlttlng the inspection and survey of certain premises
mentioned and described in the order.
On May 17, 1898, the défendant in error flled a blll In equlty in tlie Circuit
Court for the District of Montana against the Montana Ore Purchasing Com-
pany, Chili Gold Mining Company, John MacGinnis, Edward h. Whitmore, and
Carlos Warfield, as défendants, to enjoln and restrain the défendants from
extracting and removing certain ores and minerais from out of the Michaei
Devitt claim, of which complainant claimed to be the owner. The suit was
ancillary to an action at law brought by the same complainant, as plalntiff,
against the same parties, as défendants, to recover damages for the same
trespasses. Upon the bill, process was issued, and the défendants appeared
and answered. The Montana Ore Purchasing Company, in its answer, justi-
fied the trespasses charged in the bill of complaint by virtue of its claim of
ownership of the Rarus and Johnstown Iode claims, lying northerly of and
adjacent to the Michaei Devitt claim. It was alleged that thèse claims were
patented by the United States ; that they had parallel end Unes ; that certain
velns or Iodes which had thelr tops or apexes within the said Rarus and
Johnstown Iode claims extended on their strike through said Iode claims nearly
parallel to the side lines of said claims, and departed through tJie end Unes
thereof ; that thèse veins or Iodes on their downward course or dip so far
departed from a perpendicular as to pass beyond the vertical side lines of said
Iodes or claims, and to enter the ground described in the complaint as the
Michaei Devitt Iode claim; that the Montana Ore Purchasing Company was
the owner of said veins or Iodes which had their tops or apexes within the
Rarus and Johnstown claims, and ail ores, minerais, and metals therein con-
tained, throughout their entire depth ; that any entry which had been made
by the défendant or its lessee, the Chili Gold Mining Company, within the
vertical side lines of the Michaei Devitt claim mentioned in the complaint,
had been upon such veins or Iodes, and that any ores, minerais, or metals
which had. been extracted from within said vertical side lines had been taken
and extracted from said vein or Iode; and that the same was the property
of the défendant or Its lessee. Ttie answer of the défendant the Chili Gold
Mining Company pleaded substantially the same justification, under the lease
from the Montana Ore Purchasing Company. The answer of the défendants
MacGinnis, Whitmore, and Warfield justifled as ofiicers or agents of the Chili
Gold Mining Company.
Upon the bill an injunction pendente lite was Issued In accordance with the
prayer of the bill, and served upon T. Augustus Heinze, as président of the
Montana Ore Purchasing Company, Edward L. W^hitmore, a trustée and gên-
erai manager of the Chili Gold Mining Company, and upon each of the other
défendants named in the bill of complaint This injunction Is still in force.
On October 1, 1903, the complainant In the action presented a pétition to
the Circuit Court, showing that the défendants had constructed certain shafts
upon the Rarus and Johnstown claims, and from said shafts had made a large
number of underground workings, extending through the said Johnstown and
Rarus claims into and beneath the surface of the Michaei Devitt daim, and
aiso had extended and made a large number of workings from the said shafts
south into the clalm called the "Pennsylvania Claim," which joins the said
Michaei Devitt daim on the west, and from the said Pennsylvania claim into
and beneath the surface of the Michaei Devitt claim ; that, in order that the
complainant might be prepared to prove Its contention in the case, and prove
that it was the owner of the ore bodies in controversy, and also prove a vio-
lation of the injunction by the défendants, It was necessary that the complain-
ant, by its représentative, should make a survey, Inspection, and examination
of certain portions of the Rarus and Johnstown claims, and underground
workings therein, and underground workings made from the shaft and work-
ing of said claims, and from and through the Pennsylvania claim into and
beneath the surface of the Michaei Devitt claim, and ail workings made from
any of said claims under the surface of the Michaei Devitt claim. To this
pétition the Montana Ore Purchasing Company flled its answer on October
18, 1903, in which it denled the several allégations contained in the pétition ;
denied that it had possession and control of any of the shafts or portions of
the Johnstown and Rarus daims lylng north of the Michaei Devitt daim,
276 129 FEDERAL EEPOKTEK.
or extending Into the Michael Devitt clalm ; and denled that It was necessary
for the complalnant to hâve the surrey, exainlnation, or Inspection of the worlc-
ings in the Rarus, Johnstown, or, Pennsylvania claims for the purpose of the
trial, or for any matter connected therewith.
On October 14, 1903, upon the pétition and upon the motion of the com-
plainant, an order of inspection, examination, and siirvey was entered in the
Circuit Court, appointing certain persons as agp> 's and représentatives of
the complainant during a period of 15 days, to survey, examine, and inspect
the Michael Devitt, Rarus, Johnstown, and Pennsylvania Iode claims, and ail
the underground workings and openings in said claims, so far as was neces-
sary to enable complainant to ascertain whether the said underground work-
ings and openings in the Rarus, Johnstown, or Pennsylvania connected with
the underground worliings in the Michael Devitt Iode claim. It was further
ordered that for the purpose of such inspection, examination, and survey, tlie
agents and représentatives of the complainant were authorized to temporarily
remove or open ail doors, bulkheads, or other obstructions which might bo
found in said premises, or any part therèof, and which might interfère with
or obstruct such examination, inspection, and survey, provided that at or be-
fore the completlon of such inspection, examination, and survey, the com-
plainant should replace ail such bulkheads, doors, or other obstructions so re-
moved, and leave the premises in the same condition as found, so far as prac-
ticable. The défendants were required to hoist and lower complainant's rep-
résentatives through the shafts on the Rarûs and Johnstown Iode claims in
the control of the défendants, and furnish to the représentatives of the com-
plalnant ingress to and egress from the said premises and the sàid workings
at ail reasonable times during the period of 15 days.
The défendants thereupon appealed from said order to this court, and peti-
tioned this court for a writ of supersedeas. This pétition was denied, the
court holding that the order appealed from was in no sensé final, and there-
fore not appealable. 126 Ped. 168. The défendants thereupon presented to
this court a pétition for a writ of certiorarl to review the action ofthe Circuit
Court in making the order of October 14, 1903. This pétition was denied;
the court holding that, having determined that the order was not appealable,
the court had no power to issue the writ of certiorarl. 126 Fed. 169. There-
after another pétition for writ of certiorarl was flled in this court by tlie
Johnstown Mining Company to review the same order. This pétition alleged
that it was not a party to the action In the Circuit Court, but, it appeariug
that the petltioner had acquired its title to a portion of the ground involved
in the inspection order from the Montana Ore Purchasing Company during the
pendency of the cause, and after the issues were joined in the same, this péti-
tion was also denied.
Pending thèse proeeedings the order of the Circuit Court of October 14, 1903,
was not enforced, and on November S, 1903, the period for the inspection, ex-
amination, and survey mentioned in the order was extended by the court for
a period of 21 days from November 4, 1903. Upon an attempt being made
upon several days from November 4 to November 16, 1903, to exécute and
enforce the order, its exécution is charged to hâve been impeded and obstructed
by P. Augustus Heinze, Josiah H. Trerise, and Alfred Frank. The charge
being brought to the attention of the Circuit Court by affldavit, that coiiit
issued an order, directed to Heinze, Trerise, and Frank, to show cause why
they, and each of them, should not be committed for contempt in refusiug to
permit the inspection, examination, and survey as directed by the court. In
response to this order, the parties named appeared, and severally pleaded "Not
guilty." The court thereupon heard testimony upon said charge, and rendered
its judgment on December 19, 1903, to the effect that the persons charged,
to wit, F. Augustus Heinze, Josiah H. Trerise, and Alfred Frank, were eaeh
and ail guilty of contempt of court in violating, obstructlng, and refusing to
obey the order of the court ; that the acts of contempt were committed- after
notice and full knowledge of the issuance of the said order. From this order
a writ of error was allowed, and on the 21st day of December, 1903, a bond
on the writ of error for costs in the sum of $300 was accepted and approved
by the judge holding the Circuit Court, but the judge refused to take a super-
sedeas bond to stay the judgment of the covirt in the contempt proeeedings.
Thereupon application was made to the writer of this opinion, as a judge of
HEINZB V. BUTTE & B. CONSOL. MIN. CO. 277
the Clrcnlt Court of Appeals, to take a supersedeas bond and direct the clerk
of the Circuit Court of Appeals to issue a writ of supersedeas to the court
below, staying the exécution of the judginent of the court. The supersedeas
bond was taken, and a writ of supersedeas issued accordingly.
Garret W. McEnerney, James M. Denny, and John J. McHatton, for
plaintiffs in error Heinze and Trerise.
Robert B. Smith, for plaintiff in error Alfred Frank.
John F. Forbis, Crittenden Thornton, and J. F. Riley, for défendant
in error.
Before GILBERT, ROSS, and MORROW, Circuit Judges.
MORROW, Circuit Judge. The défendant in error has moved to
dismiss the writ of error on the ground that this court has no jurisdic-
tion to review the judgment of the Circuit Court in tliis case. At com-
mon law the exercise by a court of compétent jurisdiction of the power
to punish for contempt could not be reviewed. 9 Cyc. 61. "The pow-
er to punish for contempts is inhérent in ail courts. Its existence is
essential to the préservation of order in judicial proceedings, and to the
enforcement of the judgments, orders, and writs of the courts, and
consequently to the due administration of justice. The moment the
courts of the United States were called into existence and invested with
jurisdiction over any subject, they became possessed of this power."
Ex parte Robinson, 19 Wall. 505, 506, 22 L. Ed. 205.
The appellate jurisdiction of the Circuit Court of Appeals to review
by appeal or writ of error final décisions in the District Court and the
existing Circuit Courts is provided in section 6 of the act of March 3,
1891, c. 517, 26 Stat. 826, 828 [U. S. Comp. St. 1901, pp. 547, 549].
It is there provided that this jurisdiction shall be exercised in ail cases
other than those provided for in the preceding section of the act, unless
otherwise provided by law. The cases provided for in the preceding
section of the act relate to appeals and writs of error from the District
and Circuit Courts direct to the Suprême Court, and do not include
final décisions in the District and Circuit Courts in contempt proceed-
ings. The primary object of the act of March 3, 1891, well known as
a matter of public history, manifest on the face of the act, and judicially
declared in the leading cases under it, was to relieve the Suprême Court
of the overburden of cases and controversies arising from the rapid
growth of the country and the steady increase of litigation, and, for the
accomplishment of this object, to transfer a large part of the appellate
jurisdiction of the Suprême Court to the Circuit Courts of Appeals
thereby established in each judicial circuit, and to distribute between
the Suprême Court and the Circuit Courts of Appeals, according to the
scheme of the act, the entire appellate jurisdiction from the Circuit and
District Courts of the United States. American Construction Co. v.
Jacksonville Ry. Co., 148 U. S. 372, 382, 13 Sup. Ct. 758, 37 L. Ed.
486; United States v. American Bell Tel. Co., 159 U. S. 548, 551, 16
Sup. Ct. 69, 40 L. Ed. 255. Prior to this act the gênerai appellate juris-
diction of the Suprême Court in civil cases was provided for in the sev-
eral acts of Congress incorporated into sections 691, 692, and 693 of
the Revised Statutes, and the authority to décide questions occurring
on the hearing or trial of any criminal proceeding before a Circuit
278 129 FEDERAL EEPOETER.
Court, upon which the judges were divided in opinion, was provided for
in section 697 of the Revised Statutes. Neither of thèse sections pro-
vided in express terms for tlie review of judgments in contempt pro-
ceedings, but very early in the judicial history of the Suprême Court
the question arose whether the court had authority to review the judg-
ments of the Circuit Courts in such proceedings. The first case in
which this question was considered was Ex parte Kearney, 7 Wheat. 38,
5 L. Ed. 391. In that case a pétition was presented to the Suprême
Court for a writ of habeas corpus to bring up the body of Kearney,
who was in prison under a commitment of the Circuit Court for an al-
leged contempt. The petitioner was a witness under examination in
the Circuit Court, and had refused to answer a question put to him,
on the ground that the answer might tend to criminate him as a parti-
ceps criminis. The objection was overruled, and, he having persisted
in his refusai to answer the question, he was committed to jail for con-
tempt. It was contended, in opposition to the pétition for writ of
habeas corpus, that the Suprême Court had no appellate jurisdiction in
criminal cases, and that it could only revise the décisions of the Circuit
Court in cases where there was a certiiicate of a division of opinion
of the judges below. The writ was denied. Mr. Justice Story, in
delivering the opinion of the court, said :
"It is to be considered that this court has no appellate jurisdiction con-
fided to it in criminal cases by the laws of the United States. It eaunot en-
tertaln a writ of error to revise the judgment of the Circuit Court in any case
where a party has been convicted of a public offense. And undoubtedîy the
déniai of this authority proceeded upon great principles of publie poliey and
convenience. If every party had a right to bring before this court every case
in which judgment had passed against him for a crime or misdemeanor or
felony, the course of justice might be materlally delayed and obstructed, and
in some cases totally frustrated. If, then, this court cannot directly revise
a judgment of the Circuit Court In a criminal case, what reason is there tb
suppose that it was intended to vest it with the authority to do it indireetly?
It is also to be observed that there is no question hère but that this commit-
ment was made by a court of compétent jurisdiction, and in the exercise of
an unquestlonable authority. The only objection is, not that the court acted
beyond its jurisdiction, but that it erred In its judgment of the law ^plicable
to the case. If, then, we are to give any relief in this case, it is by a revision
of the opinion of the court, glven in the course of a criminal trial, and thus
asserting a right to eontrol its proceedings and take from them the conclu-
sive efCect which the law Intended to give them. If this were an application
for a habeas corpus after judgment on an indictment for au offense within the
jurisdiction of the Circuit Court, It could hardly be maintained that this court
could révisa such a judgment, or the proceedings which led to it, or set it aside
and discharge the prisoner. There is, In principle, no distinction between
that case and the présent, for, when a court commit a party f<xc contempt,
their adjudication is a conviction, and their commitment, in conséquence, is
exécution; and so the law was settled, upon full délibération, in the case of
Brass Crosby, Lord Mayor of London, 3 Wilson, 188."
In the case of New Orléans v. Steamship Company, 20 Wall. 387,
392, 22 L. Ed. 354, the Circuit Court of the United States for the Dis-
trict of Louisiana had obtained jurisdiction of a controversy between
the steamship company and the authorities of the city of New Orléans
concerning a lease of certain water-front property by the steamship
company. An injunction had been issued by the Circuit Court, re-
straining the city authorities from interfering with the possession of
the property as held by the steamship company. The city surveyor.
HEINZE V. BtTTTE <Se B. CONSOL. MIN. CO. 279
aided by a number of laborers, acting under an order of the city coun-
cil approved by the mayor, destroyed the fence or inclosure erected
by the Company around the leased premises ; and thereupon the mayor
of the city appljed to a city court for an injunction to restrain the
Company from rebuilding the inclosure which had been destroyed, and
an injunction was granted by the city court accordingly. The company
thereupon obtained a rule in the Circuit Court requiring the mayor to
show cause why he should not be punished for contempt in taking such
action in another tribunal. At the hearing the court decreed that the
mayor should pay a fine of $300 for the contempt of court wherewith
he was charged ; that the city should be enjoined from interfering with
the possession and infringement of the demised premises by the com-
pany during the life of the lease, and that the company should recover
from the city $8,000 for damages; and that the city should pay the
costs of the suit. From the decree in the case an appeal was taken to
the Suprême Court of the United States, where the decree or judgment
was affirmed. Speaking of the fine Imposed upon the mayor, the court
said :
"The fine of three hundred dollars Imposed upon the mayor is beyond our
O'urisdiction. C!ontempt of court Is a spécifie crlmlnal offense. The imposi-
tion of the fine was a judgment in a criminal case. That part of the deereé
is as distinct from the residue as if it were a judgment upon an indictment
for perjury committed in a déposition read at the hearing. This court can
take cognizance of a criminal case only upon a certiflcate of division in opin-
ion. In Crosby's Case, Mr. Justice Blackstone said: 'The sole adjudication
for contempt, and the punishment thereof, belongs exclusively and without
interfering to each respective court' "
In the case of In re Chiles, 22 Wall. 157, 22 L. Ed. 819, the state of
Texas applied to the Suprême Court for a rule on John Chiles to show
cause why he should not be dealt with as guilty of a contempt of that
court, in disobeying one of its decrees. The decree allégea to hâve
been disobeyed by Chiles is found in Texas v. White, 7 Wall. 700, 742,
19 L. Ed. 227, and had relation to the title to certain bonds of the United
States issued to the state of Texas. The suit was an original suit in
the Suprême Court, in which the state of Texas, claiming the bonds
as her property, prayed for an injunction to restrain the défendants
White and Chiles from receiving payment from the national govern-
ment, and to compel the surrender of the bonds to the state. The de-
fendants filed separate answers. Notwithstanding the decree, Chiles
continued to claim title to the bonds under a transaction not set up in
his answer to the suit. The court held that he was not the less con-
cluded and bound to obey the injunction; that notwithstanding the
fact that, in the answer to the order to show cause, Chiles asserted a
différent title or source of title from the one imputed to him in the suit,
and defended by him, he was in contempt of court in setting up and
seeking to enforce his claim. He was found guilty of contempt, the
court holding that punishments for contempt of court had two as-
pects, namely: (i) To vindicate the dignity of the court from dis-
respect shown to it or its orders; (2) to compel the performance of
some order or decree of the court which it is in the power of the party
to perform, and which he refuses to obey.
The next case is that of Hayes v. Fischer, 102 U. S. 121, 26 h. Ed.
280 129 FEDERAL KEPOETER.
95. The facts of the case are stated in tlie opinion of the court by
Mr. Chief Justice Waite as follows:
"Fischer^ the défendant in error, brought a suit in equity in tbe Circuit
Court of the United States for the Southern District of New York to restrain
[layes, the plaintifi! in errer, from using a certain patented device. In tliis
suit an Interlocutory injunctiou was granted. Complaint having been made
agalnst Hayes for a violation of this injunction, proeeedings were instituted
against him for contempt, wàich resulted in an order by the court that be
pay the clerk $1,389.99 as a fine, and that he stand committed until the order
was obeyed. To reverse this order, Hayes sued out this writ of error, whieh
Fischer now moves to dismlss on the ground tbat such proeeedings in the
Circuit Court cannot be re-examined hère. If the order complalned of is to
be treated as part of wbat was done in the original suit, it cannot be brought
iiere for review by writ of error. Errors in equity suits can only be corrected
in this court on appeal, and that after a final decree. This order, if part of
the proeeedings in the suit, was interlocutory only. If the proceedlng below,
being for contempt, was Independent of and separate from the original suit,
it cannot be re-examined hère either by writ of error or appeal. This was
decided more than fifty years ago in Ex parte Kearney, 7 Wheat. 38 [5 L.
Ed. 391], and the rule then established was followed as late as New Orléans
V. Steamship Company, 20 Wall. 387 [22 L. Ed. 354]. It follows that we hâve
no jurisdiction."
The next case is that of Word en v. Searls, 121 U. S. 14, 7 Sup. Ct.
814, 30 L. Ed. 853. The suit was a bill in equity in the Circuit Court
to restrain infringement of letters patent, and for assessment of dam-
ages. A preliminary injunction was issued and served upon the de-
fendants. Afterwards an order was made and entered by tlie court, en-
titled in the cause, imposing a fine of $250 on the défendants, to be paid
by them to the complainant, for a violation of tlie preliminary injunc-
tion. This order was opened for a further hearing, and an order was
made, entitled in the cause, imposing a fine of $1,182 on the défendants
for such violation, to be paid to the clerk of the court, and by him to be
paid over to the plaintiff, for damages and costs; the défendants to
stand committed until the same should be paid. An appeal by the de-
fendants from the order was allowed, and an order was made that ail
proeeedings to enforce the collection of the fine be stayed until the fur-
ther order of the Circuit Court on the giving of a specified bond, which
bond was given. On the report of the master on the référence under
the interlocutory decree, a final decree was entered that the plaintiflfs
recover against the défendants $24,573.91 as profits, and $386.40 costs.
From this final decree the défendants appealed to the Suprême Court.
In that court the défendants asked for a review and reversai of the
orders imposing fines for violation of the preliminary injunction.
The complainant contended that the Suprême Court could not review
the action of the Circuit Court in punishing a contempt committed by a
violation of such injunction : (i) Because the proeeedings were crim-
inal in their character ; (2) because the action of the Circuit Court was
by section 725 of the Revised Statutes [U. S. Comp. St. 1901, p. 583]
expressly made discretionary. The court held, with respect to thèse
objections, that it had jurisdiction to review the final decree in the suit
and ail interlocutory decrees and orders; distinguishing the facts of
the case from those of Ex parte Kearney, 7 Wheat. 39, 5 L. Ed. 391,
and the case of New Orléans v. Steamship Company, 20 Wall. 387,
22 L. Ed. 354. The court also held that section 725 of the Revised
HEINZE V. BUTTE & B. CONSOL. MIN. CO. 281
Statutes [U. S. Comp. St. 1901, p. 583]. did not make the action of the
court imposing a fine for contempt such a matter of discrétion that
the orders imposing the fines were not reviewable, The court said :
"They were, to ail intents and purposes, orders in the course of the
cause, based on the questions involved as to the légal rights of the
parties." It was further held that, although the court had jurisdiction
of the suit and of the parties, the order for the preliminary injunction
was unwarranted, as a matter of law, and the orders imposing the fines,
so far as they had not been executed, were, under the spécial circum-
-stances of the case, reviewable by the court, under the appeal from
the final decree. The final decree of the Circuit Court was reversed,
and the case remanded, with directions to dismiss the bill, with costs,
but without préjudice to the power and right of the court to punish
the contempt referred to in the orders by a proper proceeding.
ït appears from thèse décisions that the Suprême Court draws a dis-
tinction between a contempt proceeding where the court is called upon
to vindicate its authority and dignity, and where the enforcement of
its orders and decrees are, to ail intents and purposes, orders in the
course of the cause based on the questions involved as to the légal
rights of the parties. The first are in the nature of criminal proceed-
ings, and under the law as it stood prior to the act of March 3, 1891,
establishing the Circuit Courts of Appeals, the jurisdiction of the Su-
prême Court to review the judgment of the Circuit Courts in criminal
cases was upon a certificate of division of opinion between the judges
of the latter court. And since, if the judges of the Circuit Courts
disagreed, there could be no judgment of contempt (California Paving
Co. V. Molitor, 113 U. S. 609, 618, S Sup. Ct. 618, 28 L. Ed. 1106), it fol-
lowed that no cases of that character were reviewed by the Suprême
Court. With respect to the second class of contempts, the Suprême
Court had authority to review such interlocutory judgments or decrees
upon an appeal from the final decree in the cause. This, then, was the
State of the law upon this subject when the Circuit Courts of Appeals
were established, in 1891, and those courts succeeded to a portion of
the appellate jurisdiction previously conferred upon the Suprême Court.
There is, however, this différence in the appellate jurisdiction of the two
courts: The Suprême Court had jurisdiction to review questions oc-
curring on the hearing or trial of a criminal case in the Circuit Court
«pon a certificate of division of opinion between the judges of the Cir-
cuit Court. The Circuit Court of Appeals bas jurisdiction, under the
act of March 3, 1891, to review final décisions in a criminal case not
capital in either the Circuit or District Court, upon a writ of erfor.
We now proceed to consider the cases where the Circuit Courts of
Appeals bave had under considération the question as to their jurisdic-
tion to review décisions of the District and Circuit Courts in contempt
proceedings :
The case of Nassau Electric Ry. Co. v. Sprague Electric Ry. & Motor
Co., 95 Fed. 415, 37 C. C. A. 146, was an action brought to restrain the
infringement of a patent. The Circuit Court of Appeals for the Sec-
ond Circuit held that the order imposing a fine for the violation of a
preliminary injunction in the cause could not be reviewed upon a writ
of error ; it could only be reviewed upon an appeal from a final decree
282 129 FEDERAL REPORTER.
in the cause; citing In re Debs, 158 U. S. 573, 15 Sup. Ct. 900, 39 L.
Ed. 1092.
In Cary Mfg. Co. v. Acme Flexible Clasp Co., 108 Fed. 873, 48 C.
C. A. 118, the same court reviewed, upon writ of errer, a judgment of
the Circuit Court imposing a fine upon the défendant for a violation of
an injunction issued by the court against an infringement of a patent.
This proceeding was, however, after the final decree sustaining the
patent and adjudging an infringement of the patent in the Circuit
Court, and after the affirmance of this final decree in the Circuit Court
of Appeals.
In Butler v. Fayerweather, 91 Fed. 458, 33 C. C. A. 625, an attorney
was being examined in a case in the Circuit Court, to which he was not
a party. He was asked a question which he refused to answer, upon
the ground of privilège; For this refusai he was committed for con-
tempt. A writ of error was sued out to review the order of commit-
ment in the Circuit Court of Appeals. The court held that the order
proceeded upon a matter distinct from the gênerai subject of litigation ;
that the aggrieved party would hâve no opportunity to be heard when
the cause should be before the court at the final hearing, and as to him
the proceeding was finally determined when the order was made. Not
being a party to the cause, he could not be heard on an appeal from
the final decree, and, unless he could be heard upon a writ of error, he
had no review, but must submit to the détermination of the court be-
low, if the court had jurisdiction, however unwarranted it might be
by the facts or the law of the case. The court was of the opinion that
it had the power to review the order, and upon the merits reversed
the judgment of the Circuit Court.
Flower v. MacGinniss, 112 Fed. 377, 50 C. C. A. 291, was a case in
the same court. 'A witness in an equity cause, not a party to the suit,
had refused to submit to an examination upon the ground that issues
had not been joined in the cause, and the complainant was therefore
not entitîed to take his testimony. He was adjudged guilty of con-
tempt. A writ of error was sued out to review the order in the Cir-
cuit Court of Appeals. The right to review the order by writ of er-
ror was sustained, on the authority of its previous décision in Butler
V. Fayerjweather, supra.
In King v. Wooten, 54 Fed. 612, 4 C. C. A. 519, certain property
in the possession of the receiver of a fédéral court was levied on and
sold for taxes by a state sheriflf, and the purchaser replevied it from
the receiver, who gave a forthcoming bond. The receiver then filed
a pétition asking the protection of the court appointing him, and,
after hearing, it was decreed that the sale was null and void ; that the
purchaser and sherifif were in contempt of court ; that they desist from
any interférence with the property; that the purchaser dismiss his
replevin action, and that the receiver pay ail taxes due the sherifï;
and that after the purchaser had dismissed said suit, and the défend-
ants had paid ail the costs of the proceeding, they, and each and ail
of them, should stand acquitted of the contempt of court. Respond-
ents appealed to the Circuit Court of Appeals for the Fifth Circuit.
The court dismissed the appeal, holding that the proceeding was clear-
ly a contempt proceeding — one which, in the very nature of the case.
HEIKZE V. BUTTE & B. CONSOL. MIN. CO. 283
must be summary, to be at ail effective; that it was manifestly not
intended to conclude the ultimate rights of the purchaser at the tax
sale, but was only to the effect and extent that he could not in that
way dispossess the receiver.
In the récent case of In re Nevitt, 117 Fed. 448, 54 C. C. A. 622, be-
fore the Circuit Court of Appeals of the Eighth Circuit, Judge San-
born delivered an elaborate opinion upon the subject of contempt pro-
ceedings in the fédéral courts. The case came before the court upon
the pétition of two of the judges of the county court of St. Clair coun-
ty, in the state of Missouri, and upon the pétition of their counsel, for
the issue of the writ of habeas corpus to relieve thèse judges from an
imprisonment which they were enduring until such time as they should
comply with a mandamus of the United States Circuit Court for the
Western Division of the Western District of Missouri, which directed
thèse judges to levy a tax to make partial payment upon a judgment
recovered by one Douglas against the county of St. Clair, and to make
partial payments upon other judgments of Hke character based upon
certain bonds of the county of St. Clair. One phase of the question
before the court was the claim that the contempt of which the judges
stood convicted was a "distinct and substantial offense against the
United States," and that, as such, it fell within the pardoning power of
the Président of the United States ; and, for the purpose of applying
to the Président for the release of the petitioners, the appellate court
was asked to order a stay of proceedings in the lower court. The
court rev;ews numerous décisions upon the subject of contempt, and
disposes of the application for a stay of proceedings in the following
language :
"This is not a criminal, but a civil, contempt — a proceeding Instituted for the
purpose of protecting and enforcing the private rights and administerlng the
légal remédies of the judgment plaintifC, Douglas ; and, whatever the author-
ity of the Président may be to pardon for a criminal contempt, he is, upon
prlnciple and upon authority, without the power to relieve from elther fine
or imprisonment imposed in proceedings for contempts of this character. He
has no more power to deprive private citizens of their lawful rights or légal
remédies without compensation than hâve the courts or the Congress."
The further discussion of the subject of contempt by the court is
applicable to the question before this court in the présent case. The
court says :
"Proceedings for contempt are of two classes — those prosecuted to préserve
the power and vindicate the dignity of the courts, and to punish for disobe-
dlence of their orders, and those instîtuted to préserve and enforce the rights
of private parties to suits, and to compel obédience to orders and decrees made
to enforce the rights and administer the remédies to which the court has
found them to be entitled. The former are criminal and punitive in their
nature, and the government, the courts, and the people are laterested in their
prosecution. The latter are civil, remédiai, and coercive in their nature, and
the parties chiefly in interest in their conduct and prosecution are the indi-
viduals whose private rights and remédies they were instituted to protect or
enforce. Thompson v. Railroad Co., 48 N. J. Eq. 105, 108, 21 Atl. 182 ; Hen-
dryx V. Fitzpatrick (C. C.) 19 Fed. 810; Ex parte Culllford, 8 Bara & C. 220;
Eex V. Edwards, 9 Barn. & C. 652; People v. Court of Oyer and Terminer,
101 N. Y. 245, 247, 4 N. E. 259, 54 Am. Rep. 691 ; Phillips v. Welch, 11 Nev.
187, 190 ; State v. Knight, 3 S. D. 509, 513, 54 N. W. 412, 44 Am. St. Rep. 809 ;
People V. McKane, 78 Hun, 154, 160, 28 N. Y. Supp. 981 ; 4 Bl. Comm. 285 ;
7 Am. & Eng. Enc. Law, 68. A criminal contempt involves no élément of per-
284 129 FEDERAL REPORTER.
sonal in jury. It îs dlrected agalnst the power and dîgnity of the court, and
private parties hâve little, if any, interest in the proceedings for its punish-
meut But if the contempt consista in the refusai of a party or a person ta
do an act whioh the court has ordered him to do for the beneflt or the advan-
tage of a party to a suit or action pending before it, and he is committed until
he compiles with the order, the commitment is In the nature of an exécution
to enforce the judgment of the court, and the party in whose favor that judg-
ment was rendered is the real party In interest in the proceedings."
The court thereupon reaches the conclusion that the proceeding for
contempt under which the petitioners were held imprisoned in that
case was not criminal in its nature, but civil, remédiai, and coercive,
instituted and maintained for the purpose of enforcing the private
rights of the judgment creditors to the collection of their judgments.
The prayer of the petitioners was accordingly denied, and the péti-
tions dismissed.
The case of In re Debs, 158 U. S. 564, 15 Sup. Ct. 900, 39 L. Ed.
1092, and 159 U. S. 251, 15 Sup. Ct. 1039, remains to be considered.
A bill in equity had been filed by the direction of the Attorney General
of the United States in the Circuit Court for the Northern District
of Illinois, alleging that Debs and others had combined and conspired
together to obstruct the opération of certain Unes of railways engaged
in Interstate commerce and in carrying the United States mails, and
that they threatened to continue to restrain, obstruct, and interfère
with Interstate commerce and the transmission of the mails. The bill
prayed for an injunction, which was issued and served upon the de-
fendants. Subsequently an attachment was issued against the défend-
ants, charging them with violating the injunction, and uponV hearing
they were found guilty of contempt of court and sentenced to impris-
onment. Pétitions were thereupon presented to the Suprême Court of
the United States on behalf of the défendants, one for a writ of error,
and the other for a writ of habeas corpus. The pétition for a writ of
error was denied. 159 U. S. 251, 15 Sup. Ct. 1039. The court, in its
statement of the case upon the pétition for a writ of habeas corpus
(158 U. S. 573, 15 Sup. Ct. 900, 39 L. Ed. 1092), states that the péti-
tion for a writ of error had been denied on the ground that the order
of the Circuit Court was not a final judgment or decree. In support of
the pétition for a writ of habeas corpus a number of objections were
urged to the jurisdiction of the Circuit Court to adjudge the petition-
ers guilty of contempt of court — among others, that the judgment of
the court had invaded the constitutional right of the petitioners to a
trial by a jury. The Suprême Court sums up its answer to this ob-
jection, and States the law of contempt applicable to such a case, in
the following comprehensive language :
"In brief, a court enforcing obédience to Its orders by proceedings for con-
tempt is not executing the criminal laws of the land, but only securing to
suitors the rights wlUch it has adjndged them entitled to."
In the présent case the order of the court provided, in substance,
that the Butte & Boston Consolidated Mining Company, through its
agents and représentatives, should be permitted, during a period pre-
scribed in the order, to survey, examine, and inspect certain under-
ground workings from the Rarus, Johnstown, and Pennsylvania daims,
beneath the surface of the Michael Devitt claim, owned by the com-
HEINZE V. BUTTE & B. COXSOL. MIN. CO. 2S5"
plainant; and for that purpose such représentatives of the complain-
ant were to be permitted to remove or open ail doors, bulkheads, or
other obstructions which might be found in said premises, obstructing
and preventing such examination and survey. The order was for the
purpose of enabling the complainant to maintain its légal rights in
said premises in the pending suits. The action of the appellants in
refusing to comply with this order of the court was a résistance on
their part to an adjudicated right in favor of the complainant. But
it was provided in the judgment of contempt that the commitment
should continue only until they should consent to the inspection, ex-
amination, and survey of the underground workings specified in the
order, and until they should give the necessary orders and provide the
necessary nieans for making such examination, inspection, and sur-
vey, and should permit the removal of the obstructions provided to be
removed in said order, or until the further order of the court. It was
further provided that, when the appellants should comply with the
order of the court, the order should be discharged as to both fine and
imprisonment against each and ail of said parties, and none of the
parties should be further held or chargeable thereunder. As said by
the court in In re Nevitt, 117 Fed. 461, 54 C. C. A. 635 :
"They carry the keys of their prison in their own poclîets. Governments
are founded to administer justice. Courts are established to détermine the
rights and remédies of litigants by peaceable décisions under the law, instead
of by the wager of battle. They are not infallible, but no better method of
determining adverse elaims bas yet been devised."
No constitutional right is denied to the appellants in this case.
They are not required to furnish évidence against themselves. They
are simply to unbar their doors, stand aside, and allow the représenta-
tives of the complainant to ascertain whether in the depths below the
surface of their own property the défendant in the suit in which this
controversy has arisen is not engaged in extracting and carrying away
the wealth of the property, The complainant is simply asking to be
allowed to establish and protect its own property and rights, and it
would be a misérable failure of justice if the court has not the power
to enforce obédience to its orders in such a proceeding.
The next question to be considered in this connection is the objec-
tion of the appellants that the Johnstown Mining Company is the
owner in possession, and entitled to the possession, of the machinery,
shafts, premises, and underground workings required to be used, en-
tered, and inspected under said order of survey, examination, and in-
spection; that said Johnstown Mining Company is not a party to the
action; that Josiah H. Trerise and Alfred Frank are not parties to
the action, and therefore not subject to the jurisdiction of the court.
The pétition for an order of the court for an examination, inspec-
tion, and survey of the underground workings and openings in the
Rarus and Johnstown elaims was presented to the Circuit Court on
October i, 1903. On October 13, 1903, the Montana Ore Purchasing
Company, one of the défendants in the action, filed its answCr to this
pétition, in which it denied generally the allégations of the pétition,
and, among others, denied that it was in possession or control of the
shafts or openings in that portion of the Johnstown and Rarus Iode
28G 129 FEDERAL KEPOEÏER.
claims lying north of the Michael Devitt Iode daim, or extending into
the Michael Devitt Iode daim; denied that the survey, inspection, and
examination mentioned in the pétition was necessary for the purpose
of the action, or to enable the complainant to prépare the case for
trial, or for any matter connected therewith; denied that the défend-
ants or either of them, by means of workings made from the Rarus or
Johnstown claims, or any other means, since the service of the injunc-
tion in the case, trespassed upon or mined or extracted any ores from
within the Michael Devitt Iode daim, or any portions of the daim
mentioned in the pétition. Upon the pétition and answer the court on
October 14, 1903, made the order of inspection, examination, and sur-
vey prayed for in the pétition. Then followed the several appeals to
this court to set aside the order of inspection. AU of thèse appeals
being denied, an attempt was made to exécute the order of the court,
when the exécution of the order was obstructed by the appellants. In
the answer of the Montana Ore Purchasing Company to the order to
show cause, filed November 2, 1903, it alleged that it was not then, and
had not been since the day of August, 1903, in possession of
the Rarus shaft or shafts, or any portion of the Rarus daim lying
north of the Michael Devitt daim. On the same day the Johnstown
Mining Company filed its spécial appearance in court, in which it
denied the jurisdiction of the court over it to enforce obédience to the
order of the court, and expressly of any such order as requested by
the complainant, and refused to submit itself to the jurisdiction of the
court. There are two deeds in the record, executed by the Montana
Ore Purchasing Company, by F. Augustus Heinze, président — one
dated August 5, 1903, filed for record in the office of the county
recorder on October 17, 1903, and the other dated September i, 1903,
filed for record in the office of the county recorder on November 3,
1903. Thèse deeds convey to the Johnstown Mining Company cer-
tain portions of the surface and underground veins of the Johnstown
and Rarus claims. The Johnstown Company thus became a purchaser
pendente lite, and derived its title and possession from the Montana
Ore Purchasing Company after issue had been joined in the suit, and
the deeds of conveyance were filed of record after the commencement
of the proceedings for inspection, examination, and survey. In our
opinion, this change of title to a portion of thèse claims and under-
ground veins, under the circumstances disclosed by the évidence, in
no way affects the question before the court. The Johnstown Com-
pany, as such purchaser, became subject to ail the proceedings and de-
crees in the suit relating to the property involved in the suit. The
original injunction in the case was directed to the Montana Ore Pur-
chasing Company, and its clerks, agents, attorneys, servants, work-
men, and lessees. In the proceedings relating to the order of inspec-
tion, that corporation undertook at first to represent ail opposing in-
terests, and, as we read the testimony in the case, it is still the real
party in interest. The appellant F. Augustus Heinze is the président
of that corporation. Josiah H. Trerise, another appellant, testifies that
he is the superintendent of the corporation; and Alfred Frank, the
third appellant, testifies that he is a mining engineer superintendent
in the employ of the Montana Ore Purchasing Company and the
ALLEN-WEST COMMISSION CO. V. QEUMBLES. SST
Johnstown Mining Company. The court below, in its judgment of
contempt, found as a fact that Heinze, Frank, and Trerise had full
knowledge and notice of the order of inspection and its terms, and
during ail the times mentioned in the order they were able to comply
with its terms. Equity always attempts to get at the substance of
things, and to ascertain, uphold, and enforce rights and duties which
spring from the real relations of parties. It will never sufïer the mère
appearance and external form to cancel the true purpose, objects, and
conséquences of a transaction, i Pom. Eq. Jur. (2d Ed.) § 378.
The conclusion we reach is that the judgment of contempt of court
which the appellants seek to hâve reviewed upon the présent writ of
error is a judgment in a civil proceeding; that it is remédiai and
coercive in its exécution, and that it has been entered by the court for
the purpose of enforcing the private rights of the complainant ju-
dicially determined in its favor ; and that the appellants are subject to
its terms and conditions. It follows that it is a judgment that cannot
be reviewed upon this writ of error, and the writ of error is therefore
dismissed, with costs to the défendant in error.
ALLEN-WEST COMMISSION CO. v. GRUMBLES et nx.
(Circuit Court of Appeals, Eighth Circuit Aprll 8, 1904.)
No. 1,979.
J. GiFT— Intention of Donoe— Kenunciation dp Dominion— Delxveet.
A flxed intention by the donor to irrevocably dlvest himself of tltle,
dominion, and control of the subject of the gift at the very tlme he at-
tempts to make it, the actual accompllshment of that purpose, and the
delivery of the subject of the gift, are indispensable conditions of a valld
donation.
2. Same— CoEPOEATE STOCK— Deliveby of Cebtificates.
The delivery of the subject of the gift must be made In the most effec-
tuai mode to command dominion over it
The delivery of certlficates of shares of stock, when they are présent
and their delivery Is practicable, is Indispensable to a valid gift of stock
in a corporation, l)ecause the possession of the certiflcates commanda the
dominion of the stock In the most effectuai way.
3. Same— Deliveey of Weitten Assignment— Effect.
The delivery of a written assignment of stock In a corporation Is In-
efCectual to make a valld gift, while the donor retains the certlficates.
4. Same— Evidence— Conclusions.
G., the owner of 110 shares of stock in a corporation, delivered a writ-
ten assignment of his interest in its business to his wlfe in May, 1899,
when he was free from debt. He retained the certlficates of the shares,
voted them, and received dividends upon them, In money and In stock,
until February, 1903, when he had become heavily involved in debt He
then transferred the stock to his wife by an indorsement and surrender
of the certiflcates to the corporation.
Held, G. had no intention in May, 1899, to then divest himself of the
dominion and control of the stock, a delivery of the certiflcates of the
stock was indispensable to accomplish such a purpose, and the delivery
of the written assignment, while the donor retained and used the certifl-
cates to control the stock, was insufficient to complète a valid gift.
î 2. See Gifts, vol. 24, Cent. Dig. § 50.
288 129 FEDERAL REPORTEE. ,
6. Gabnishment— Oedeb on Gaenishee to Deliveb injto Couet.
TJnder the statutes of Arkansas, where the garhlshee appears by affi-
davit, and does not appear In,, person, or submit to an examination, or
make default* the tlaintlff is not entitled to an order that the garnishee
shall deliver the property of the défendant in hls possession, or that he
shall pay the money whlch he owes the défendant, into court. His rem-
edy is by compelling an examination under oath, or by an action under
section 360, Sand. & H. Dig.
(Syllabns by the Court.)
In Error to the Circuit Court of the United States for the Western
District of Arkansas.
The Allen-West Commission Company, a corporation, brought an action
against J. H. Grumbles to enforce his liability under the statutes of the state
of Arkansas for the debt of a bank of which Grumbles was président, and
reoovered a judgment of $21,133.35 against him. No attack is made upou
this judgment. The indebtedness which it évidences had arisen in the years
1902 and 1903. On March 30, 1903, the plaintifiC issued an attachment in
its action against Grumbles, and garnisheed Mary E. Grumbles, his wife.
The ground of the attachment and garnishment was that Grumbles had
disposed of his property with intent to delay and defraud his creditors. The
défendant in the action denled this averment. The issue thus made was
tried by the court, which made a spécial finding of facts, dissolved the at-
tachment, and discharged the garnishee, on the ground that there was no
proof that Grumbles had disposed of any of his property with intent to delay
or defraud his creditors. The writ of error challenges the judgment of dis-
solution of the attachment and of discharge of the garnishee, and counsel for
the plaintiff in error rely upon the foUowing facts to sustain their averment
that this judgment was erroneous :
In May, 1899, the Mann-Tankersley Drug Company was a corporation of
the state of Arkansas, engaged in the business of dealing in drugs at Whole-
sale and retail at Pine BlufC, in that state, and the défendant James H.
Grumbles was free from debt, and was the owner of 110 shares of stock in
this corporation, of the value of $3,700, which was evidenced by a certiflcate
of his ownership of thèse shares, which was in his possession. On May 14,
1899, he made and delivered to his wife an instrument in thèse words :
"Knovir ail men by thèse présents, that I, J. H. Grumbles, of Nashville,
Arkansas, for and in considération of the sum of flve dollars ($5.00) to me
in hand paid by Mary Grumbles, and for the f urther considération of love
and affection that I hâve for my beloved wife, Mary Grumbles, and for the
further purpose of maklng a division of my property with my wife, the said
Mary Grumbles, the receipt whereof is hereby acknowledged, do hereby bar-
gain, sell, and deliver unto the said Mary Grumbles ail my right, tltle, and
interest in the Mann-Tankersley Drug Company business, a corporation or-
ganlzed and existing under the laws of the state of Arkansas, and doing
business in the city of Pine Bluff, Arkansas, under the corporate name of the
Marai-Tankersley Drug Co., said business being a wholesale and retail drug
business, and my interest in said business or corporation being of the vaiue
of about thirty-seven hundred dollars. To hâve and to hold the same unto the
said Mary Grumbles, and her heirs and assigns, forever. And I, the said J.
H. Grumbles, do hereby covenant to warrant and défend the title to said bar-
gained interest In the said Mann-Tankersley Drug Co. business unto the said
Mary Grumbles, and unto her heirs and assigns, forever, with ail privilèges
and rights enjoyed by me in said business.
"Witness my hand and seal this 14th day of May, 1899.
"J. H. Grumbles."
He kept the certiflcate for the 110 shares of stock in his possession, and
voted and recelved dividends in money upon it until February, 1903. Prior
to this tlme he had ineurred his liability to the plaintiffi and had become in-
solvent. On February 7, 1903, the surplus earnlngs of the 110 shares of stock
entitled it to a dividend of 144 additional shares of stock, and thèse addl-
tional shares wero issued to and received by Mr. Grumbles. On Februarj;
ALLEN-WE8T COMMISSION CO. V. GEUMBLES. 289
25, 1903, Grumbles indorsed and surrendered the certiflcates for the entlre
254 shares, and caused new certiflcates therefor to be Issued to hls wife,
Mary E. Grumbles. On March 14, 1903, Mary B. Grumbles sold thls stock
to innocent purchasers for $6,032.50. No notice of the May assignment to
Mrs. Grumbles was glven to the Mann-Tankersley Company untll after
January, 1903. The stock stood In the name of James H. Grumbles on the
bocks of the corporation untll February 25, 1903. The transfers of It sub-
séquent to February 24, 1903, were entered on the books of the corporation,
and the certificate thereof was flled with the clerk of Jefferson county, in
the State of Arkansas, before the attachment herein was made.
W. B. Smith (J. M. Moore, on the brief), for plaintiff in error.
W. T. Wooldridge (F. G. Bridges, W. P. Feazel, and J. W. Bishop,
on the brief), for défendants in error.
Before SANBORN, THAYER, and HOOK, Circuit Judges.
SANBORK, Circuit Judge, after stating the case as above, delivered
the opinion oï the court.
The crucial question in this case is : Did the delivery in May, 1899,
by the défendant Grumbles to his wife, of the formai bill of sale of his
interest in the Mann-Tankersley Drug Company business, constitute
a completed giftpf his 1 10 shares of stock in the corporation, in view
of the fact that Grumbles retained the certificate of the shares, kept
the stock in his own name upon the books of the company, voted and
received dividends upon it until after he had become hopelessly in-
solvent and then transferred it to his wife by an indorsement and sur-
render of the certificate without the use of the assignment of 1899, °^
which no notice had been given to the corporation? If this question
should be answered in the affirmative, the transfer by Grumbles to his
wife in February, 1903, was no évidence of an intent on his part to
hinder or defraud his creditors, because the stock had not been his
since May, 1899. If, on the other hand, this question should be an-
swered in the négative, that transfer was conclusively fraudulent as
against creditors, because it was a voluntary conveyance, without valu-
able considération, after the donor had become heavily indebted to his
various creditors.
While the assignment recites a considération of five dollars and of
love and aiïection, counsel for Mr. and Mrs. Grumbles do not claim,
nor has the court below found, that this instrument évidences any
sale for value of the iio shares of stock, or that $5, or any other sum,
was ever paid as a part of the considération for the exécution or de-
livery of that assignment. Moreover, if that question were presented
hère for our considération, the written instrument and the facts dis-
closed by the findings of the court would lead our minds to the con-
clusion which counsel for ail parties to thîs litigation hâve tacitly
adopted. At the time the assignment was made the stock was worth
about $3,700. It is not a rational inference that property of this value
was sold for $5. Again, the entire assignment must be read and con-
strued as a whole. When thus read, it déclares that it was made for
$5, for love and affection, and for the purpose of making a division
of the property of the grantor. The natural inference from thèse ré-
citals is that it was a voluntary assignment without valuable considér-
ation, and that the référence to the $5 is the usual form of récital
129 F.— 19
290 129 FEDBKAL EEPORTEK.
which is frequently inserted in instruments of this character, when
no valuable considération is actually paid. Baltimore Retort & Fire
Brick Co. v. Mali, 65 Md. 93, 94, 3 Atl, 286, 57 Am. Rep. 304.
We come, therefore, to the only question to which counsel hâve
addressed their arguments — to the question whether or not, under
the law applicable thereto, the facts of this case will sustain the con-
clusion that the défendant Grumbles made a valid gift of his stoclc
in the Mann-Tankersley corporation to his wife on May 14, 1899,
when he delivered to her the assignment in question. In every case
of an alleged gift, the burden of proof is upon the donee to establish
a complète and valid donation. Jones v. Falls (Mo. App.) 73 S. W.
903. Among the indispensable conditions of a valid gift are the in-
tention of the donor to absolutely and irrevocably divest himself of
the title, dominion, and control of the subject of the gift in pressenti
at the very time he undertakes to make the gift (Lehr v. Jones, 74
App. Div. 54, ^-j N. Y. Supp. 213; Bickford v. Mattocks, 50 Atl. 894,
95 Me. 547; In re Estate of Soulard, 141 Mo. 642, 657, 659, 43
S. W. 617; Newman v. Bost [N. C] 29 S. E. 848, 850) ; the irrévoca-
ble transfer of the présent title, dominion, and control of the thing
given to the donee, so that the donor can exercise no farther act of
dominion or control over it (Basket v. Hassell, 107 U. S. 602, 614, 615,
2 Sup. Ct. 415, 27 L. Ed. 500; Cook v. Lum, 55 N. J. Law, 373, 376,
26 Atl. 803) ; and the delivery by the donor to the donee of the subject
of the gift or of the most efifectual means of commanding the dominion
of it. This delivery must be an actual one "so far as the subject is
capable of it. It must be secundum subjectam materiam, and be the
true and effectuai way of obtaining the command and dominion of
the subject." 2 Kent's Com. 439. If the subject of the gift is a chose
in action, such as a bond, a note, or stock in a corporation, the delivery
of the most effectuai means of reducing the chose to possession or use,
such as the delivery of the bond, or the note, or the certificate of stock,
if présent and. capable of delivery, is indispensable to the completion
of the gift. Richards v. Delbridge, L. R. 18 Eq. il ; Knight v. Tripp,
121 Cal. 674, 679, 54 Pac. 267; Miller v. Jeffress, 4 Grat. 472, 480;
Matthews v. Hoagland, 48 N. J. Eq. 455, 487, 21 Atl. 1054; Wadd v.
Hazelton, 137 N. Y. 215, 219, 33 N. E. 143, 21 L. R. A. 693, 33 Am.
St. Rep. 707; Matter of Crawford et al., 113 N. Y. 560, 21 N. E. 692,
5 L. R. A. 71; Beaver V. Beaver, 117 N. Y. 421, 22 N. E. 940, 6 L,.
R. A. 403, 15 Am. St. Rep. 531 ; Liebe v. Battmann, 33 Or. 241, 54
Pac. 179, 72 Am. St. Rep. 705; Williams v. Chamberlain, 165 111. 210,
218, 46 N. E. 250; Gartside v. Pahlman, 45 Mo. App. 160.
Stock in a corporation is a chose in action, and the certificates are
the évidence of its existence and of its amount. They bear some an-
alogy to the title deeds of real estate (Com. v. Crompton, 137 Pa. 138,
20 Atl. 417) ; but they are far more commanding and useful in the han-
dling of the stock they represent than are title deeds in the handling of
the land they describe. Because the stock in a corporation is trans-
ferred by means of the delivery, or by means of the indorsement and
delivery of the certificates, the latter by a sort of mental substitution
come to be thought of and dealt in as the stock itself. The stock of
corporations is ordinarily transferred on the books of the company
ALLEN-WEST COMMISSION CO. V. GKUMBLE8. 291
only by the surrender of the certificates and the issue of new ones to
the grantees. Hence assignments, bills of sale, and conveyances, with-
out the accompanying possession and delivery of the certificates, are
much less effectuai or available to command the title, the dominion,
or the control of the stock than the mère possession of the certificates
themselves. The indorsement and delivery, or the mère delivery, of
the certificates, without entry of the transfer upon the books of the
corporation, is generally held to constitute a valid sale of the stock
between vendor and vendee, or a completed gift of it between donor
and donee. Such an indorsement and delivery of the certificates gen-
erally enables the holder to enforce a transfer of the title to the stock
upon the books of the corporation. Basket v. Hassell, 107 U. S. 602,
614, 615, 2 Sup. Ct. 415, 27 L. Ed. 500; Com. v. Crompton, 137 Pa.
138, 20 Atl. 417; Hopkins v. Manchester (R. I.) 19 Atl. 243; Walsh
V. Sexton, 55 Barb. 251; Leyson v. Davis (Mont.) 42 Pac. 775, 793,
31 L,. R. A. 429; First National Bank of Richmond v. Holland, 99
Va. 495, 39 S. E. 126, 55 L. R. A. 155, 86 Am. St. Rep. 898; Stone v.
Hackett, 12 Gray, 227, 231; Cushman v. Thayer Mfg. Jewelry Co.,
76 N. Y. 365, 32 Am. Rep. 315; Grymes v. Hone, 49 N. Y. 17, 10
Am. Rep. 313 ; Reed v. Copeland, 50 Conn. 472, 47 Am. Rep. 663.
If, by an indorsement and delivery of the certificates of stock with
the donative intention, the défendant had completed his gift to his
wife, a court of equity would bave compelled the corporation to trans-
fer the shares upon its books. The difficulty vi^ith this case is that
the certificates of shares were not delivered, no intention on the part
of the donor to immediately renounce dominion and control of the
stock was formed, and no executed gift was made. This was the
situation : Grumbles made the assignment of his interest in the drug
business to his wife on May 14, 1899. His interest was 1 10 shares in
the stock of the corporation which was operating that business, and
he held the certificate of his ownership of thèse shares while the title
to them stood in his name upon the books of the company. The hold-
ing of the certificate of shares of stock is the customary and most
effectuai means of using the rights and privilèges which the stock con-
fers. The indorsement and delivery of this certificate is the usual and
most efficient way of transferring the stock. Three things were es-
sential to a valid gift of this stock by the défendant: (i) A fixed
purpose, at the time he made the assignment to his wife, to then divest
himself of ail title, dominion, and control of the stock, and to vest
thèse irrevocably in his wife; (2) the immédiate and perfected exécu-
tion of this purpose; and (3) the delivery to his wife of the most
effectuai means of using and reducing the stock to possession. The
indorsement and delivery of the certificate to his wife would bave
proved ail thèse prerequisites. Such an indorsement and delivery was
the true, customary, and most effectuai way to évidence the intention
to transfer the title, the control, and the dominion of the stock, and
to accomplish that purpose. The fact that the défendant did not pur-
sue this plain method is in itself cogent proof that he intended to accom-
plish no such purpose. He made no indorsement or delivery of the
certificate. He made no assignment of the stock by name or descrip-
tion, but simply delivered to his wife an assignment of his interest in
292 129 FEDERAL KEPOItTEE.
the business of the corporation, which she never used to obtaîn control
or dominion of the stock, but wliich she quietly tucked away and
never brought to light until creditors were pressing her husband for the
payment of bis debts, nearly four years after she received the assign-
ment. Neither Grumbles nor his wife gave notice to the corporation
of this nominal conveyance until after his bank had failed, in February,
1903» and his creditors were clamoring for payment. He received
annual dividends upon the stock from May, 1899, until February, 1903.
In the latter month a stock dividend of 144 additional shares accrued
upon his stock, and he took the additional shares in his own name,
and finally, after he had become insolvent, he transferred ail thèse
shares to his wife in February, 1903, not by the use of the dormant
assignment of 1899, but by the usual and most effectuai method — by
an indorsement and delivery of the certificates. Thèse are ail the facts
in this case from which the intention of the défendant when he made
the assignment of 1899 may be deduced. He knew how to divest him-
self of title, of control, and of dominion of the stock; for he did so
by indorsement and delivery of the certificates in February, 1903. If
he ever intended to do so before that time, the évidence of that in-
tention in this record is imperceptible. A man is presumed to in-
tend the natural and probable conséquences of his acts. The consé-
quences of the acts of Grumbles hère were that, although he delivered
to his wife the dormant assignment, he retained the apparent title, the
actual control and dominion of the stock, and the enjoyment of every
right and privilège it commanded, for nearly four years after he parted
with the written assignment, and until the pressing claims of creditors
admonished him that his stock was liable to be applied to the payment
of his debts, and then for the iirst time he invoked its aid. The dé-
duction from thèse facts is irrésistible. It is that the défendant Grum-
bles intended in 1899 exactly what he did in that and the subséquent
years. He intended to retain the appearance of title, the actual domin-
ion, control, and bénéficiai use of his stock, until the claims of cred-
itors or his own decease compelled him to relinquish them. That in-
tention is fatal to the existence of the gift he" asserts. Gallagher v.
Donahy (Kan.) 69 Pac. 330.
But, even if Grumbles had intended to renounce dominion and con-
trol of the stock, he could not hâve accomplished that purpose by the
mère delivery of this assignment, because it had not that effect, and
because he failed to deliver to his wife the most effectuai and appro-
priate means of reducing the stock to possession and use — the certifi-
cate of the shares. The assignment was by its terms a conveyance of
his interest in the drug business and a covenant to défend the title to
that interest, together with ail the rights and privilèges enjoyed by
him in the premises. It did not transfer the bénéficiai use of the stock,
the privilège of voting it and of drawing dividends upon it, because
thèse rights and privilèges were transférable only by a transfer of the
title of the stock upon the books of the corporation, upon the surrender
of the certificate. The possession of the certificate was the sine qua
non of that transfer, and the most extensive effect that the assignment
could bave had was to give Mrs. Grumbles the covenant or promise
of her husband that he would deliver the certificate, so that she could
ALLEN-WEST COMMISSION 00. V. GEUMBLES. 293
transfer the stock and secure its bénéficiai use. But a gift of a cov-
enant or promise is void, because it is unexecuted, and every valid
gift must be executed and complète. Harris v. Clark, 3 N. Y. 93, 112,
51 Am. Dec. 352.
It is said that the assignment gave the donee the right to compel
the défendant to surrender the certificate and transfer the stock. But
the fact is that Grumbles' possession of the certificate left him the un-
restricted power, by the surrender of the certificate and the sale of
the stock to a bona fide purchaser, to deprive his wife of every right
under the assignment, except a right of action for damages for con-
version of the stock. A gift of a right of action for conversion of
stock is not a gift of stock. The présent transfer of dominion and
control of the stock, so that the donor cannot deprive the donee of it,
is essential to a valid gift of stock. The gift of a right of action for
conversion of it, or of the possibility of compelling a delivery or trans-
fer of it by a suit in equity, is not suificient, when the donor retains
the unrestrained power to place the title, possession, and control of the
stock beyond the reach of the donee at any time, and thereby to defeat
such a suit in equity. Again, if the assignment had been in terms a
conveyance of the stock, it would not hâve sustained the defendant's
claim of a gift, because he failèd to deliver the certificate of the shares.
The certificate was the usual and most effective means of reducing the
stock to possession and use. It was présent. It was capable of manual
delivery. In this state of the case its delivery was indispensable to a
valid gift, and a separate assignment of the stock without a delivery
of this certificate was ineffective.
Counsel for the défendant argue that a complète gift may be made
by a written assignment or conveyance, without a delivery of the sub-
ject of the gift, and cite authorities to support this position. It is
true that in cases where manual delivery of the subject of the gift, or of »
the évidences which command it, is impracticable or impossible, and
in cases in which a written conveyance is the most effectuai mode of
divesting the donor of dominion and control of the thing, such a con-
veyance is sufficient. But it is equally true that a written assignment
is utterly inadéquate, where the delivery of the subject of the gift or
the delivery of the évidences of it is practicable, and the latter is the
more ready and efficient way of commanding the dominion and control
of the subject of the gift. Thus in Grymes v. Hone, 49 N. Y. 17, 10
Am. Rep. 313, a gift by means of a written assignment of 20 out of
120 shares of stock that were evidenced by a single certificate was
sustained; in Bond v. Bunting, 78 Pa. 210, a gift by an assignment of
ail over $5,600 that should be realized from an Insurance pohcy was
maintained; and in Banks' Adm'r v. Marksberry, 3 Litt. 276, a gift
by an assignment of the future income of a slave was held valid — with-
out a delivery of the subjects of the gift. But the reason for thèse
décisions is that the delivery of thèse subjects was impracticable, be-
cause others than the donee had rights and interests in them which
entitled them to their possession. Again, a gift by means of an as-
signment made by the owners of a fund that had been collected from
an insurance policy and was in the hands of executors of an estate
was a good gift without a delivery of the money, because it was not in
294 129 FEDERAL EEPOEÏER.
the possession of the donors, and hence was incapable of manual de-
livery by them. Matson v. Abbey, 70 Hun, 475, 24 N. Y. Supp. 284.
Se in Tarbox v. Grant, 56 N. J. Eq. 204, 39 Atl. 378, 380, a trust deed
to a third party, trustée, for the benefit of the children of the grantor,
of his équitable interest in tlae property, was sustained as a création
of a trust ; and in Wallier v. Crews, 73 Ala. 412, a deed of promissory
notes which by its terms reserved the right in the donor to retain and
coOect the notes, and to invest and reinvest their proceeds for the
donee, was sustained as a gift and a déclaration of trust, without a de-
hvery of the notes. But an instrument like the assignment at bar,
which was executed as an absolute conveyance, and which contains
no déclaration of trust, cannot be sustained as the création or the déc-
laration of a trust for the benefit of the donee. Wadd v. Hazelton,
137 N. Y. 215, 219, 220, 33 N. E. 143. 21 L. R. A. 693, 33 Am. St.
Rep. 707; Young v. Young, 80 N. Y. 437, 36 Am. Rep, 634; In re
Estate of Soulard, 141 Mo. 659, 43 S. W. 617 ; Richards v. Delbridge,
L. R. 18 Eq. II, 14, 15, overruling Morgan v. Malleson, L. R. 10 Eq.
475, and Richardson v. Richardson, L. R. 3 Eq. 686 ; Milroy v. Lord,
4 De Gex, Fisher & Jones, 264, 274, in which Lord Justice Turner
well said : "If it is intended to take efifect by transfer, the court will
not hold the intended transfer to operate as a déclaration of trust;
for then every imperfect instrument would be made effectuai by being
converted into a perfect trust." Again, a recorded deed of real estate,
or a recorded brand of cattle, in the name of the donee, without a
delivery of the subjects of the gifts, may well be sustained, because the
donor, by placing the record title in the donee, places the property
irrevocably beyond his dominion or control. Holmes v. McDonald,
119 Mich. 563, 78 N. W. 647, 75 Am. St. Rep. 430; Love v. Francis,
63 Mich. 181, 29 N. W. 843, 6 Am. St. Rep. 290; Adams v. Adams,
21 Wall. 185, 191, 22 L. Éd. 504; Hillebrant v. Brewer, 6 Tex. 45,
55 Am. Dec. 757. But "if an owner of shares of stock in a corpora-
tion, intending to give them to A., should take the scrip to the office
of the Company and surrender it, and receive new scrip in the name
of A., has he by this change of title on the books of the company,
while retaining the entire possession and control of the scrip, and
without any delivery thereof to A., accomplished a valid executed gift
of the ownership of the shares to his intended donee? We should say
clearly not." Matter of Crawford et al., 113 N. Y. 560, 567, 21 N. E.
692, 5 L. R. A. 71. The reason for the différence between a gift ex-
ecuted by a recorded deed of real estate and one unexecuted by a failure
to deliver certificates of stock is that the record title to real estate
Controls and draws to it the possession and dominion of the property
and of its title deeds, while, on the other hand, the possession of cer-
tificates of shares of stock commands the dominion and control and
the record title of the stock.
The clew to the labyrinth of décisions upon this subject is the rea-
son of the rule which makes delivery of the thing, or of the most avail-
able means of commanding its dominion and control, indispensable to
the validity of a gift. That reason is the imperative necessity of re-
quiring the renunciation by the donor, not only of ail possession, do-
minion, and control of the thing, but of ail appearance thereof, lest
ALLEN-WEST COMMISSION CO. V. GRUMBLES. 295
by such an. appearance he should lead creditors, purchasers, and others
to believe, and to crédit him in the belief, that he is the owner of that
which in reality belongs to his donee, and lest by fraud and perjury
gifts be proved which never in fact existed. Yancey v. Field, 85 Va.
756, 8 S. E. 721. This reason of the rule conditions the nature of the
dehvery it requires, and demands that that delivery shall, in every
case, whether evidenced by written assignment or oral statement, con-
sist as far as practicable of a delivery of that thing which will most
effectually and irrevocably divest the donor of the dominion and the
control of the subject of the gift, and thus of the appearance of title,
whether that thing be the subject itself, a symbol of the subject, a writ-
ten assignment of it, or the patent évidences of it whose delivery con-
stitute the most effectuai mode of transferring the dominion over it.
In the case at bar that thing was the certificate of the shares. The de-
livery of that certificate was the most effectuai mode of divesting the
défendant of his title, of his dominion, and of his control of the stock
and of the appearance thereof. It was the most efficient way of avoid-
ing the mischief which the rule of delivery was established to prevent,
while, on the other hand, the delivery of the dormant and unused as-
signment, unaccompanied with the delivery of the certificate, was the
least effective for thèse purposes, and the most efficient way of pro-
moting the mischief at which the rule was leveled. The failure to de-'
liver the certificate was fatal to the alleged gift, because without its
delivery the dormant assignment did not irrevocably deprive the de-
fendant of the dominion and control of the stock, but left them ail per-
fectly amenable to his will.
This conclusion is not without support in the décisions of the courts.
In Basket v. Hassell, 107 U. S. 602, 614, 2 Sup. Ct. 415, 27 L. Ed.
500, a case in which the Suprême Court held that the delivery of a
certificate of deposit to an intended donee, with an indorsement upon
it to pay it to the latter's order, but not until the donor's death, was
not a valid gift, because it did not deprive the donor of the présent
power of dominion and control. That court declared, as a resuit of a
review of the authorities relative to the delivery of a chose in action,
that the rule was —
"That the instrument or document must be the évidence of a subsisting obli-
gation, and be dellvered to the donee, so as to vest hlm with an équitable
title to the fund it represents, and to divest the donor of ail présent control
and dominion over it, absolutely and irrevocably."
In Knight v. Tripp, 121 Cal. 674, 676, 679, 54 Pac. 267, the Suprême
Court of California held a formai written assignment delivered to the
donee insufficient to sustain a claim of a gift, and said :
"There must be both a purpose to glve and the exécution of this purpose.
The purpose must be expressed, either orally or In writing, and it must be
executed by the actual delivery to the donee of the thing given, or of the
means of getting possession and enjoyment thereof. A written Instrument
may be available for designating the property intended to be given, as well
as to show the intention of the donor; but by itself it no more establishes
the gift than would the same words orally delivered by the donor. * * •
It Is the fact of delivery that couverts the unexecuted and revocable purpose
into an executed and complète gift"
In Baltimore Retort & Fire Brick Co. v. Mali, 65 Md. 93, 96, 3 Atl.
286, 57 Am. Rep. 304, the subject of the intended gift was stock in a
296 129 FEDERAL RBFORTEU.
corporation, the certifîcate for which remained uncut in the stock book
of the Company. Thereupon the owner made a written assignment of
the stock to his .daughter, which recited that it was for value, although
no valuable considération was actually paid, and delivered it to the
attorney for the corporation, with instructions to transfer the stock to
the daughter on the books of the company as soon as the attorney ob-
tained the consent of the mortgagee of the corporation. The court
held that the intended gift was incomplète and void, because the owner
had not irrevocably parted with his control and dominion of the stock.
In Matthews v. Hoagland, 48 N. J. Eq. 455, 485, 490, 21 Atl. 1054,
1065, 1067, the court refused to sustain an attempted gift of stock,
evidenced by the delivery of the indorsed certificates, without any ac-
companying assignment, on the ground that —
"The failure of the record owner of the stock to clothe the donee with the
means of at once acquirlng the beneflts of the stock leaves unperformed an
act which prevents the gift from taking efCect in prœsenti, which is vital to
a gift Inter vivos."
In Snyder v. Snyder (Mich.) 92 N. W. 353, 354, an attempt was
made to sustain a gift of a mortgage by means of a written assignment
made by the donor to her son in 1888 and recorded in 1893. But it
was defeated, because until she died in 1899 the donor enjoyed tlie
bénéficiai use of the mortgage, not by virtue of any of the terms of
the assignment, but by virtue of an oral agreement aliunde to that
effect.
In Snook v. Sullivan, 53 App. Div. 602, 607, 66 N. Y. Supp. 24,
affirmed in 167 N. Y. 536, 60 N. E. 1120, an alleged gift, evidenced
by an assignment and delivery of the certificate of the stock, was de-
feated, where the donee, after the assignment, drew the dividends, as
he had done before, as attorney in fact of the donor, and presumably
applied them to lier use.
And in Bauernschmidt v. Bauernschmidt, 97 Md. 35, 54 Atl. 637,
642, 643, the Court of Appeals of Maryland held that there was no
completed gift of stock by a husband to his wife, although he placed
the title of 30 shares of it in her name upon the books of the corpo-
ration and issued a certificate therefor in lier name, which he subse-
quently surrendered to the corporation, and although he caused 140
shares of the stock to be transferred to himself and his wife, and
caused a certificate therefor to be issued in their names, because dur-
ing ail this time he actually had the dominion and control of the stock
by virtue of his possession of the certificates.' The court declared in
words which are peculiarly applicable to the f acts of the case before us :
"He, and he alone, voted the 140 shares, and his final assertion of control
over the certificate representlng those shares was manlfested when he trans-
ferred It in blank and delivered it to Sperry, Jones & C!o. His dealing with
the stock, and her acquiescence in what he did, and the fact that he could,
and did, as the actual owner of ail the property which the company pos-
sessed, exercise complète control over those 140 shares, show that he had
never surrendered dominion over them, or put it out of his power to revoke
the gift of them."
Other authorities almost without limit could be cited in support of
the position that this alleged gift was incomplète and invalid, because
ALLEN- WEST COMMISSION CO. T. GEUMBLES. 297
the défendant failed to renounce dominion and control of its subject;
but perhaps our views hâve already been sufficiently illustrated, and
farther discussion will be omitted.
The dormant assignment of May 14, 1899, did not eflfect a valid
gift of the stock of the défendant Grumbles, because he then had no
intention to immediately and irrevocably divest himself of the control
and dominion of the stock, because he retained the possession of the
certificate, and ail the rights and privilèges which the stock conferred,
until February, 1903, and because he failed until that time to irrevoca-
bly divest himself of the title, dominion, and control of the stock. As
this stock remained his property until many months after his indebted-
ness to the plaintifï accrued, his voluntary transfer of it to his wife
in 1903 was in the eyes of the law a fraud upon the plaintifï, and the
judgment of the circuit court that the attachment be dissolved, and the
garnishee, Mary E. Grumbles, be discharged, cannot be sustained.
The statutes of Arkansas provide that each garnishee summoned
shall appear in person or by his afhdavit disclosing his indebtedness
to the défendant and the property of the défendant in his possession
(Sand. & H. Dig. § 357) ; that he may be required to appear in person
and to submit to an examination under oath ; that if, when he appears
in person and is examined under oath, and when he makes default
by failing to appear and the court hears proofs, the court finds that
he has in his possession property of the défendant or that he is in-
debted to the défendant, it may order the garnishee to deliver the
property or to pay the amount of the debt into the court. Sections
358, 359, Sand. & H. Dig. The counsel for the plaintiff ask this court
to direct the court below to order the garnishee, Mrs. Grumbles, to
pay the proceeds of the sale of the defendant's stock which she has
received into the Circuit Court upon the reversai of the judgment dis-
solving the attachment and discharging the garnishee. But the gar-
nishee, Mrs. Grumbles, has not as yet corne within the terms of the
provisions of the statutes which hâve been cited. She has not appeared
in person or been examined under oath. She has not made default
in appearance. She appeared by her affidavit, in which she denied
that she was in possession of any of the property of the défendant, and
denied that she was indebted to him. In this state of the case the court
below may undoubtedly compel her to appear in person and to submit
to an examination under oath, and then, if the évidence sustains the
charge of the plaintiff, it may order her to pay the proceeds of the
sale of the stock into court. But, in the absence of any proceeding
of this character and of any appearance of Mrs. Grumbles in person,
the remedy of the plaintiff is to proceed against her by an action under
section 360, Sand. & H. Dig., which provides that, when the garnishee
fails to make a disclosure satisfactory to the plaintiff, he may proceed
in an action against her by filing a complaint and causing a summons
o be issued upon it. The time has not yet arrived under thèse statutes
when the plaintiff is entitled to an order on the garnishee to pay the
moneys she obtained from the sale of the stock into court.
The judgment of the court below, that the attachment be dissolved,
and that the garnishee, Mrs. Mary E. Grumbles, be discharged, must
be reversed, and the case must be remanded to the Circuit Court, with
298 129 FEDERAL REPORTER.
instructions to enter a judgment that the attachment is sustained, and
to take further proceedings not inconsistent with the views expressed
in this opinion.
It is so ordered.
CITY OP MOBILE v. SULLIVAN TIMBER CO.
(Circuit Court of Appeals, Fifth Circuit April 8, 1904.)
No. 1,312.
1. Land undeb Navigable Watees— Ownership.
Tlie State of Alabama, when admitted into the Union, acquired by the
compact the title to the soil below high-water mark under the navigable
vraters within the llmits of the state which had not been prevlously
granted.
2. Same—Conveyance— Trusts.
By Act Ala. Jan. 31, 1867 (Laws 1866-67, p. 307), grantlng to the city
of Mobile so much of the shore and soil under the Mobile river as was
within the city's boundaries, the city acquired tltle to the land so con-
veyed as trustée for the public, and could not convey the same for the
benefit of riparian proprietors.
3. Same— IMPLIED Licenbe— CtrsTOM.
Where a city held the title to the land under a navigable river within
the city's llmits below high-water mark in trust for the public, a cus-
tom under which riparian proprietors used the land for the érection
of wharves, etc., was not available to support a contention that the
city had thereby been divested of its title to the land.
4. Same— EsTOPPEL.
Where a city held the title to land under a navigable stream in trust
for the public, and a river commission was authorlzed to establish
wharves, bulkheads, boom linès, etc., the fact that neither the city nor
the commission objected to the construction of expensive works, including
bulkheads, etc., in the river, by a riparian proprietor, dld not estop the
city to deny such proprietor's right to continue to occupy the same.
5. Same— CoNDEMNATioN.
Where a riparian proprietor, with the knowledge of a city holding the
title to land under a navigable stream for the beneflt of the public, con-
structed an expensive work, including wharves, booms, bulkheads, etc.,
on the land. In order to render the river available for use in lumberlng
opérations, and thereaf ter such propf ietor paid taxes and fées to the
city for the privilège of erecting and maintaining such structures, the
city was only entltled to a restoration of the land so used on payment
of reasonable compensation to such proprietor for the loss sustained.
Appeal from the Circuit Court of the United States for the Southern
District of Alabama.
L. H. & E. W. Faith, for complainant.
Gregory L. & H. T. Smith, for défendant.
Before McCORMlCK, Circuit Judge, and SPEER and PAR-
LANGE, District Judges.
SPEER, District Judge. This cause présents an appeal from a
decree of the Circuit Court for the Southern District of Alabama.
It appears from the record that the Sullivan Timber Company, a cor-
1F 1. See Navigable Waters, vol. 37, Cent. Dig. § 184.
COTT OF MOBILE V. SULLIVAN TIMBEB CO. 299
poration of the state of Florida, had been sued in ejectment by the
city of Mobile to recover two pièces of real estate. This was riparian
land. One lot was between Old Water street and the channel of
the Mobile river on its western side, and the other was between the
channel of the Mobile river and a line parallel with and loo feet east
of the high-water mark on the western side of the river. Thèse
actions were brought by the city of Mobile to assert its title not
only to the shore and part of the river bed, but also to the immedi-
ately abutting upland. The title to this land was originally in the
United States government, and it passed to the state of Alabama
by virtue of the act of Congress under which the state was admitted
into the Union. Subsequently the title passed to the city of Mobile
by virtue of certain statutes. The fîrst was approved January 31,
1867 (Laws 1866-67, p. 307), and provides that the shore and the
soil under Mobile river situate within the boundary lines of the city
of Mobile, as defined and set forth in section 2 of the act to incor-
porate the city of Mobile, approved February 2, 1866 (Laws 1865-66,
p. 202), "be and the same is hereby granted and delivered to the city
of Mobile." The second section déclares the municipal authorities
of the city trustées "to hold, possess, direct, control and manage the
shore and soil herein granted in such manner as they may deem best
for the public good." Again, on December 5, 1896 (Acts 1896-97,
p. 49), the General Assembly of Alabama enacted —
"That the absolute and unconditlonal title and rlght to ail real estate, . rights,
and easements, pertaining, or incidental, to any real estate, or any right there-
in, or thereto, heretofore vested In the mayor, alderman and commoq council
of the city of Mobile, or in the port of Mobile, or in the présent city of Mobile,
or in any municipal corporation of Mobile, however said corporation may hâve
been named or called, whether held in trust, or otherwise, except such as hâve
heretofore vested in the trustées for the holders of the bonds of the city of
Mobile, is hereby vested absolutely, and uncondltionally In the city of Mobile,
to be by It held, managed, controlled and dlsposed of, as to it may seem best."
Thèse statutory grants to the city of Mobile are in accordance with
the salutary principle embodied in the Constitution of many of the
States, including that of the state of Alabama, by which it is guaran-
tied that the navigable waters of the state shall be forever preserved
as public highways.
It is alleged that the Sullivan Timber Company, which was the
défendant in the actions of ejectment brought by the city, had taken
possession of the shore and soil in controversy, and had erected
thereon certain wharves and other obstructions, which set out into
the river midway between the shore and what is termed "the point
of practical navigability." Thèse structures were wholly disconnected
with the shore and with the navigable channel, and hâve the eiïect
to obstruct ail communication between the shore and the navigable
part of the stream. By thèse structures, it is insisted that the de-
fendant has inclosed a part of the Mobile river, and, excluding ail
other persons therefrom, uses this to float its own barges and logs.
It is insisted by the city that the action of ejectment was brought to
maintain the communication between the upland belonging to the
city with the navigable river, and to assert its public ownership, in
order that ail portions of this important navigable stream and harbor,
300 129 FEDERAL EEPOETER.
upon which deflnite rights of wharfage hâve not been granted, may
remain available to the gênerai public in accordance with the act
under which the state was admitted into the Union. Thèse actions
having been instituted in the state circuit court of Mobile county,
Ala., the défendant thereto, the Sullivan Timber Companv, caused
Lhem to be removed into the United States Circuit Court, and, after
removal, there filed the bill on which the decree hère complained of
was rendered.
i By the averments of this bill the following contentions are pre-
sented for the complainant: First. That the city of Mobile claimed
the lands under the act of January 31, 1867, which vested the title
in the city as trustée for the public good. That this enactment, in
connection with the act of February 18, 1895 (Acts 1894-95, p. 815),
as amended by the act of December 5, 1896 (Acts 1896-97, p. 49),
vested the absolute and unqualified légal title to the shore and soil
under Mobile river in the city of Mobile, discharged and freed from
the trust created by the act of 1867. That this was the sole title
of the city of Mobile. That the municipal corporation for whose
benefit thèse enactments had been passed had been annulled and
abolished on February 11, 1879, and, as a substitute therefor, a new
municipal corporation was created, called the "Port of Mobile." That
the Législature of Alabama gave this new corporation no power,
title, authority, or jurisdiction to the shore and soil under the Mobile
river. However, by an amendment made to its charter on December
8, i88b, the corporation was given power to establish and déclare
by ordinance a designated Une along the river front, within the cor-
porate limits of the city, beyond which wharves and other structures
should not be built. That, acting under the authority last mentioned,
in 1882, the police board of the port of Mobile established such chan-
nel Unes, and declared that wharves and similar structures should
neither extend beyond nor fall short of said lines. By the act of
December 10, 1886, the municipality was aeain entitled the "City of
Mobile," and it was given power to establish channel lines, but with
the proviso that, if the Législature should create a harbor commis-
sion, the power in the city of regulating wharf and boom lines should
be suspended so long as the commission was clothed with that power.
That on February 28, 1887, such a commission, with such power, was
created. It was organized in 1887, and is now exercising the powers
and jurisdiction given to it by the act. The bill further allèges that
the timber company owns the upland in front of which is the locus
in quo; that its predecessors in title and itself, at great expense,
built wharves, bulkheads, booms, etc., on the shore and over the
water in front of their upland out to the established lines ; that at
still further expense it had built in the lower marsh land, and im~
proved the upland — ^built sawmills, etc., thereon ; that thèse improve-
ments were made under permission obtained from the city of Mobile
and the Mobile river com.mission, respectively, and the work was
done under the supervision of the appellant's civil engineer. The bil!
further avers that the timber company, which is the appellee hère,
as the owner of the upland, had the right of access from its upland
to the navigable portion of said river in front of it, and to the wharves
CITT OF MOBILE 7. SULLIVAN TIMBEE CO. 301
built out thereto, subject to sudi reasonable régulations as the city
might prescribe. This right, it is averred, was secured by the com-
mon law of the state of Alabama, as well as by the Constitution and
statute laws thereof.
There are the usual prayers for process and for temporary injunc-
tion pendente lite. Another and more important prayer is that on
the hearing:
"The court will be pleased to perpetuate such Injunctlon, and decree that
the City of Mobile and ail persons elalming under it be perpetually enjoined and
restrained from prosecuting said ejectment suits aforesaid, and from molest-
ing or dlsturbing your orator in the possession of said property out to the said
channel lines of Mobile river, as established, and from asserting title or claim
thereto, and, further, that the court may be pleased to quiet the right, title,
and possession of orator in its wharf, bulkheads, and improvements from ora-
tor's upland out to the said channel Une of Mobile river aforesaid."
Motions to dismiss the bill for want of equity and demurrers there-
to were overruled, and certain amendments followed. The bill as
smended \vas retained in court, and upon the pleadings and proof the
court rendered a decree in favor of the Sullivan Timber Company,
and the city of Mobile brought this appeal.
A référence to the decree granted by the court will discover
that it is of the most sweeping character. By its perpétuai injunc-
tion it finally concludes the appellant from asserting any claim
whatever to, or from any interférence with, the use and possession
by the Sullivan Timber Company of its wharves, docks, booms,
and other improvements erected by it, in front of its upland, on
the lands and premises in controversy. It clearly has the practical
effect to vest the fee to this important wharf property, which may
be highly essential to the future prosperity of the port, in the Sulli-
van Timber Company, and its successors in title.
We are of the opinion that while that company may possess
equities of importance, which the court, after proper inquiry, may
feel authorized to protect, the decree transcends any right to which
the complainant is entitled, and has the effect to reverse the policy
of the state, intended to secure to the public access to its naviga-
ble streams and harbors. This policy is increasingly important
in view of the already augmented commerce of the Gulf ports, and
the phénoménal augmentation which will necessarily be caused by
the construction of the Isthmian Canal.
While the briefs of opposing counsel in this case afford a great
plentitude of authority, and, indeed, exhibit commendable indus-
try and research, our détermination with regard to the title of the
city must be controlled by the latest and most authoritative déci-
sion upon the subject. This is found in the case of Mobile Trans-
portation Co. V. Mobile (decided by the Suprême Court of the
United States January 5, 1903) 187 U. S. 479, 23 Sup. Ct. 170, 47
L. Ed. 266. There ît is conclusively settled that the state of Ala-
bama, when admitted to the Union, became entitled to the soil un-
der the navigable waters below high-water mark within the limits of
the state, not previously granted. It is further held in the same
case that the législation of the state conveying to the city of Mo-
bile the shore and soil under Mobile river is not unconstitutional.
302 129 FEDERAL REPORTEE.
as impairing the vested rights of owners of grants bordering on Mo-
bile river, for the reason that such grants do not relate to land bor-
dering on tidal streams ; and further that, as the state held the lands
below high-water mark as trustée for the public, it had the right
to devolve the trust upon the city of Mobile. In short, this case
adjudicates the title of the lands in controversy under the acts and
resolutions of Congress, the ordinances of Alabama, and the acts
of the General Assembly of the state hereinbefore enumerated. It
is difficult, in view of this décision, to understand how any contro-
versy can be maintained as to the title of the city. Many décisions
of the Suprême Court of Alabama are reviewed in the learned opin-
ion of Justice Brown. His conclusions are, as stated, that the title
to ail lands under tidal waters in Alabama below high-water mark
are in the state, and subject to such disposition as that made by the
state in this case in behalf of the city of Mobile. He continues:
"The status of real estate within a particular jurisdiction Is not so much
one of contract as of policy, whlch may be changea at any time by the Légis-
lature, provided no vested rights are dlsturbed. Of course, If riparlan proprl-
etors hâve acquîred the title to the property below high-water mark by a grant
or prior possession good against the state, they could only be dispossessed
by proceedings in emlnent domain. The act of 1867 declared no more than
that the rights possessed by the state in the shore and soil under Mobile river
were granted to the city. We see nothing objectionable in this act. What
the state held, it held as trustée for the public, and it had a right to devolve
this trust upon the city of Mobile. What it had not, it could not grant, and
the rights of the rlparian proprietors were neither enlarged nor restricted by
the act." "Upon the whole," the learned justice concludes, "we are of opin-
ion that there is no defect upon the face of the title of the city which the
transportation company was entltled to avail Itself of."
It is true that in that case the court expressly declined to pass
upon the défenses of estoppel by reason of improvements made
upon this land with the acquiescence of the city, license to build
wharves, and payment of taxes; the unconstitutionality of the act
of 1867, because the title of the act does not describe its subject;
want of power in the state to convey its title to the city; and the
statute of limitations. The Suprême Court makes no deliverance
upon thèse subjects, because they are ail of a local nature, and
présent no fédéral question. Some of thèse are, however, in the
case at bar, for the reason that jurisdiction of the cause is now
taken because the controversy is between citizens of différent states.
Starting, then, with this authoritative démonstration that the lé-
gal title to the locus in quo is in the city, upon what equity can
there be based a right in the complainant to the perpétuai injunc-
tion granted, which will forever debar the city from the assertion of
that title?
It is urged in behalf of the appellee that its structures were erected
under a license granted by the Mobile river commission. This,
however, seems to stand exclusively upon the nonaction of that
commission, rather than upon any express permission, Surely it
will take something more than proof of the quiescence of a commis-
sion Hke that to estop the municipality which holds title for the
public benefit from proceeding with its duty to protect the public
interest. Estoppels are not favored by the law, and this would
CITT OF MOBILE V. SULLIVAN TIMBEE CO. 303
seem especially true when by such estoppel it is attempted, by the
omission or indifférence of officiais, to finaily conclude the rights
of the public to a public use. The alleged immémorial custom of
persons to erect wharves on such broad harbor Hnes as those of
the Mobile river and the adjacent waters, even if clearly demon-
strated, can hâve no légal effect against the assertion by the state
of its right to control the wharf Unes of its navigable streams. For
a custom to be valid, it must be lawful; and it can never be law-
ful for the citizen or a corporation to take possession of property
belonging to a state, or a municipality created by it, hold it indefi-
nitely, and justify that conduct by proof of custom. Indeed, did
the claim of the appellee dépend upon a positive and perpétuai
grant from the city, if given without proper considération, it would
be in this case of no more avail than the quiescence of the commis-
sion or the immémorial custom on which the appellee relies. The
rights of the public cannot be divested in such manner. In the
case of Mayor of Jersey City v. American Dock & Improvement
Company (N. J.) 23 Atl. 682, Chief Justice Beasley, for the court,
déclares :
"Nor would even the joint action of the board and the clty glve a semblance
of legality to the transaction. If the municipal corporation had, by the most
formai writing, assented to the couimlssion's grant, and had joined in it as a
party, the instrument would hâve been an absolute nullity. This resuit pro-
ceeds from the characterlstics of the property in question, and which hâve been
heretofore fully deflned. The title is vested in the city In trust for the public,
and is therefore Inaliénable and indisposable, except by législative action.
The composition of the so-called title of the défendant, it wlll be observed, con-
sista of the acquieseenee and negleet of the trustée of a public use, and the
act of a board having no power over the subject Such a claim seems to be
slngularly futile."
It is true that the act of 1896 to which référence has been made
seeks to make a change in the character of this property and the
manner in which it may be disposed of, but, since this was long
after the concurrence upon which the appellee places reliance, it does
not affect the question.
It is, however, contended by the appellee that it has paid to the
city fées and taxes for the privilège of erecting its structures ; that
thèse were accepted; that its work was done in compliance with the
rules and régulations of the commission, and under the supervision
of the city engineer; that neither the, city of Mobile, nor the river
commission, ever made any objection or protest against its expen-
sive work, such as filling in of the lowlands, construction of bulk-
heads, wharves, and booms ; that the city of Mobile stood silently
by and permitted ail this to be done without objection, and with-
out challenge of the occupation being made by the appellee during
a long séries of years. Upon thèse facts it is urged that it would
now be unconscionable to permit the city to oust the appellee, and
thus inflict upon it the great loss which would necessarily resuit.
It seems highly probable that such facts make a meritorious show-
ing for suitable relief, on proper pleadings. It is equally clear that
thèse contentions could not forever defeat the right of the city to
control the wharfage within its jurisdiction. A simple illustration
304 129 FEDERAL IIEPOKTER.
will show how untenable is the appellant's daim on thîs subject,
The defendant's structures are in their nature temporary; its busi-
ness, of a character possibly limited by the available tirnber supply.
When the uses of its structures hâve departed, they will rapidly
decay. Can it be insisted that, because of its license to erect tîiem,
it can retain the title to the riparian soil upon which they stand?
If this were true, a licensee erecting structures of the most perisha-
ble character might acquire, without considération, wharf rights
as -valuable as the docks on the Mersey at Liverpool, or the piers
on the Hudson at New York. While, therefore, this claim must
be denied, it does not follow that the appellee is without a reni-
edy. If its structures hâve been erected, and its outlay and ex-
penditure hâve been made, because of a license granted by the city,
before the city, for its own purposes, can reassume control of the
real estate in dispute, there should be a just accounting, and ascer-
tainment and allowance of compensation for the losses the appellee
will incur because of the négligent or unjustifiable action of the
city authorities. The true equity seems to be found on the médian
line between the contentions of the controverting parties. The
city, for the public welfare, is entitled to control its river front, ex-
cept where the title to its wharves is parted with in compliance
with positive law. If it is deemed necessary by the city to cause
the removal or destruction of the appellee's wharves, sawmills, and
booms, a judicial estimate should be made of the damage to the ap-
pellee thus incurred. Since, however, there are no averments or
prayers in the bill before the court which will justify such direction,
it will be incumbent upon the appellee, who was the complainant
in the Circuit Court, to amend tlae bill in such manner as to avail
itself of the relief and compensation, which may be ascertained by
an appropriate inquiry.
In view of thèse considérations, we détermine that the decree of
the court below be modified as follows, and it is accordingly ordered :
That the permanent injunction granted be set aside, and the tem-
porary injunction pendente lite be reinstated. That the appellee,
who is the complainant in the Circuit Court, hâve leave within 30
days from the date whereon the mandate of this court shall be
made the judgment of the Circuit Court to amend its bill, and by
such amendment offer to restore to the appellant the real estate
in dispute upon the payment of such compensation as may, by agree-
ment between the parties, or upon judicial inquiry, appear to be
équitable and just, for the losses and damages, if any there be, which
it may appear the complainant will sustain because of the revocation
by the city of its împlied license to erect said structures. That in
case such suitable amendment, with appropriate prayers, is made,
the bill as amended will proceed as usual in equity. In case, how-
ever, the appellee, the complainant in the Circuit Court, shall not
exercise the option offered of amending his said bill, it is directed
that at the expiration of the time above specifîéd the same shall be
dismissed at the cost of complainant. That the cost of this appeal.
be taxed against the appellee.
WEIDENFELD V. NORTHERN PAC. RT. CO. 303
WEIDENFBLD v. NORTHERN PAC. RY. CO.
(Circuit Court of Appeals, Eighth Circuit March U, 1904.)
No. 1,942.
1. CoBroEATioNS— Railboads— Pkefeeeed Stock— Retiebment—Conveksion.
Laws Wls. 1895, c. 244, p. 475, cliartered the Northern Pacifie Railway
Company, and authorized It to classify its stock into cominon and pre-
ferred, and to make such preferred stock convertible into common, on
Buch ternis and conditions as might be flxed by the board of directors.
The act also authorized the company to borrow from time to time such
sums of money and on such terms as the corporation or its board of
directors should agrée, and in Its corporate name to exécute évidences
of indebtedness, and make the same convertible into its capital stock of
any class upon such terms and conditions as its board of directors deemed
advisable. Held, that the c-orporation, under such provisions of its
charter, had authority to issue certiflcates of Indebtedness with whlch
to retire the preferred stock, and to immediately couvert such certiflcates
Into common stock. '
2. Same— Ratification.
The certiflcates of indebtedness having been Issued under express stat-
utory authority conferred by Laws Wls. 1895, p. 475, c. 244, § 11, the
conversion, even if net originally authorized, was subsequently conflrmed
by Laws Wls. 1897, p. 632, c. 294, and Laws Wls. 1899, p. 296, c. 193,
authorizing the consolidation of railroad companies, valldating agree-
ments on whlch their stocks had been issued, together with thelr plans
of reorganlzation, etc.
8. Same— REDUCTION and Inckeasb op Stock.
Where a corporation Issued certiflcates of Indebtedness with whlch to
retire Its preferred stock, and Immediately thereafter converted such
certiflcates Into cominon stock, such transaction should be considered as
a whole, and hence the issuance of the certiflcates and retirement of the
preferred stock did not operate as a réduction of capital, nor the Is-
suance of such additlonal common stock as an Increase thereof.
4. Same— RiGHTS of Stookholdeks.
Where a corporation issued certiflcates of Indebtedness with whlch to
retire Its preferred stock, for whlch the holders of the common stock
were entltled to subscribe, a common stockholder could not object that
the transaction was invalid on the ground that the preferred stockholders
were not entltled to share therein.
5. Same— Peefeeeed Stock — Stockholders' Rights.
Where, at the time of the reorganlzation of a railroad company, pre-
ferred stock was issued under a resolution of the stockholders on the
express condition that the company, at its option, might retire the same
at its élection on certain dates, and each certiflcate contalned a récital
of such condition, each preferred stockholder acquired hls stock aubjeet
to the terms of an express contract which denled him the rlght to share
in new stock issued as a part of a scheme for the retirement of such
preferred stock, and that when hls stock was so retlred he thereupou
became a stranger to the company.
8. Same— Actions against Coepoeation— Paeties.
Where a stockholder of a corporation brought suit to restraln it froui
carrylng out a scheme to retire Its preferred stock and to Issue common
stock In its place, but the thing primarily complained of was the owner-
ship of a majority of the corporatlon's stock by a securities company
formed for that purpose, the end sought being the destruction of the se^
curities compauy's tltle to its stock and its status as a stockholder, the
securities company is an Indispensable party défendant, and is not repre-
Bented in the suit by the corporation.
129 F.— 20
306 129 FEDERAL EEPORTER.
Appeal from the Circuit Court of the United States for th i Dis-
trict of Minnesota.
This is an appeal from a decree dlsmlsslng the appellant's Intervening
pétition. The suit was originally instltuted by one Peter Power in the dis-
trict court of I-Iennepin county, Mlnn. By his verifled blll of complaint,
which was filed December 30, 1901, Power alleged that he was then, and had
been for more than six months, the owner and holder of 100 shares of the
common stock of the défendant, the Northern Pacific Railway Company.
He complalned that the company, wlthout authority of law, was about to
retire ail of Its preferred stock, amounting to $75,000,000; also that the
board of directors and other oflBcers of the company had entered into an illé-
gal combination and conspiracy with similar officers of the Great Northern
Railway Company and of the Chicago, Burlington & Quincy Railway Com-
pany for the purpose and with the object in view of merging and consoli-
dating the railway Systems of the three companles, which were alleged to
be parallel and competing, under one management, in violation of the laws
and public policy of the United States, the state of Minnesota, and the other
States traversed by said railroad Systems, and that to accomplish such mer-
ger and consolidation they had caused to be incorporated under the laws of
the state of New Jersey a corporation known as the Northern Securities Com-
pany, with authority to purchase and hold the stocks, bonds, and securities
of other corporations, the Intention being to cause a majority of the stock of
ail three companies mentioned to be transferred to the securities company,
and to be controlled by it, thereby securing the conduct of the entire business
of the three Systems by one corporation, and the illégal suppression of compé-
tition. It was also alleged by Power that the movement to retire the prefer-
red stock of the Northern Pacilic was for the sole purpose of enabling those
stockholders and officers who favored the merger to accomplish thelr unlaw-
ful purpose. The relief sought by Power was the prévention by injunction of
the retirement of the stock and of the consummation of the merger. The
cause was removed by the défendant company to the Circuit Court of the
United States for the District of Minnesota, the complainant, Power, belng
a citizen of the state of New York and the défendant a citizen of the state of
Wisconsin. The proofs taken by the défendant showed conclusively that
Power never owned any stock in the Northern Pacific Railway Company, and
had no interest whatever in any of the matters alleged in his complaint.
When the cause was ready for hearing in September, 1902, and long after the
retirement of the preferred stock of the Northern Pacific and its conversion
into common stock of that company, the appellant, Camille Weidenfeld, by
leave of court flled his Intervening pétition, the averments of which, though
much more spécifie and in détail, are substantially along the Unes of the orig-
inal bill. The principal différence relates to the acquisition of the stock of
the Chicago, Burlington & Quincy Company by the other companies — a différ-
ence whieïi is not material to a détermination of the controlling Issues in the
case. Weidenfeld alleged that sinee December 26, 1901, he was the owner and
holder of 100 shares of the common stock of the défendant of the par value
of .ÇlOO each. The prayer of his intervening pétition was that ail of the steps
and proceedings taken by the défendant, its officers, directors, and stockhold-
ers, looking to the organization of the securities company and the transfer to
it of the controlling interest in the stock of the défendant, be adjudged fraud-
ulent and void; that the défendant be adjudged to hâve combiued and Con-
solidated its stock, property, and franchises with the stock, property, and fran-
chises of the Great Northern Company, a parallel and competing llne of rail-
way, eontrary to the laws of the state of Minnesota; that the organization of
the securities company by the défendant and those assoclated with it be held
and adjudged to be a conspiracy in violation of the law and policy of the state
of Minnesota, and that ail transfers of stock in the défendant company to It
be adjudged to hâve been in furtherance of the conspiracy and void; and gen-
erally that a eontinuance of such conspiracy and combination by the company,
whether by its directors, officers, and agents, or by its constituent members or
stockholders, be enjoined; and for gênerai relief.
The faets relating to the merger are substantially those which were recited
and passed upon by the court below in United States v. Northern Securities
WEIDENFELD V. NOETHEEN PAO. ET. CO. 307
Co. (C. C.) 120 Fed. 721, and a full narrative of them Is unnecessary hère. The
above outline of the averments in the pleadlngs and of the prayers for relief
is suflicient for the purpose of this appeal. A référence more in détail, how-
ever, should be made to that feature of the case relating to the retlrement of
the preferred stock. The défendant, Northern Pacific Raihvay Company, dé-
rives its corporate existence from certain laws of the state of Wisconsln.
Originally incorporated as the Superior & St. Croix Eailroad Company, its
name was changed on the Ist day of July, 1896, about the time of its acquisi-
tion of the properties of the Northern Pacific Eailroad Company whlch were
then in the hands of a reorganization committee. To enable the défendant to
effect such acquisition, its capital stock, which was theretofore $5,000,000,
was increased to $155,000,000, divided into $75,000,000 of preferred stock and
$80,000,000 of common. This increase of the capital stock and its classifica-
tion into preferred and common were duly authorized by law and by the unan-
imous vote of the stockholders. The resolution of the stockholders reclted as
an express condition to the issue of the preferred stock that the company
might, at Its option, retire the same in whole or in part, at par, from time to
tliue, upon the Ist day of any January prlor to 1917. Accordingly each cer-
tificate of preferred stock, the form of which was prescrlbed by the board of
directors and thereupon approved by the stockholders, contained the condi-
tion that "the company shall hâve the right, at its option, and in such manner
as it shall détermine, to retire the preferred stock in whole or in part, at par,
from time to time upon any Ist day of January prier to 1917." The same ré-
cital appears in every certificate of common stock issued by the company. The
preferred stock possessed a preferential 4 per cent noncumulative dividend
feature, with provision for the ratable division of the remainder of the surplus
net earnings in any fiscal year among ail of the stock of both classes, after an
equal payment upon the common. It was provided by chapter 244, p. 475, of
the Laws of 1895 of the state of Wisconsln, which Is one of the varions acts
conferring upon the défendant company its corporate existence and its pow-
ers, that it should possess authority to classify its stock into common and pre-
ferred, and to "make such preferred stock convertible into common stock upon
such terms and conditions as may be fixed by the board of directors." By the
act mentioned the company was also "authorized to borrow from time to time
such sums of money and upon such terms as the corporation or board of di-
rectors shall agrée upon or authorlze as necessary and expédient; and in Its
corporate name exécute and deliver its notes, bonds, debentures or other év-
idences of Indebtedness in such form as shall be from time to time prescrlbed
by the board of directors and In such amount as shall be deemed from time
to time by said board expédient; and may make the same convertible into Its
capital stock of any class upon such terms and conditions as to the board of
directors may seem advisable." And gênerai power was conferred upon the
board of directors to use such évidences of Indebtedness in any manner which,
in their judgment, would subserve and promote the corporate purposes. By
another section of the act it was provided, with certain exceptions not mate-
rial hère, that "ail of the affairs of said company shall be managed by a board
of directors, who shall be stockholders, and are hereby vested with ail the
powers of the corporation." On November 13, 1901, the board of directors of
the company adopted a resolution by whlch it was determined to retire the
entire issue of preferred stock at par upon the Ist day of January, 1902, the
funds for such purpose to be obtalned by the issue and sale of certiflcates of
indebtedness or bonds whlch were convertible at their face into common stock
at par. The plan pursued was in strict conformlty with the terms of the res-
olution. The holders of the preferred stock were duly notifled that their stock
would be retired on January 1, 1902. Certiflcates of indebtedness aggregat-
ing $75,000,000, dated November 15, 1901, maturlng January 1, 1907, and
bearlng interest at 4 per cent, after January 1, 1902, were issued. They were
at once offered to the common stockholders at par, each stockhôlder being
given the right to subscribe for and purchase the same to the amount of ''^/so
of the amount of common stock owned by him. On November 15, 1901, a con-
tract was entered into with the Standard Trust Company of New Tork, where-
by the latter agreed to purchase such of the certiflcates as were not taken by
the common stockholders. ' The certiflcates, accordlng to their terms, were. at
the option of the company, convertible into common stock at par at any time
308 129 FEDERAL REPORTER.
after thelr date, and Itkewlse so convertible upon demand of the certlflcate
holder at any time after Januai-y 1, 1902. Immediately after ttie eertificates
were Issued, the eompany, acting through its board of directors, exercised Its
option to require their conversion into common stock. The resuit was that on
January 2, 1902, ail of the preferred stock of the eompany had been retired,
ail of the eertificates of indebtedness had served thelr temporary purpose and
had been retired, and the place of the preferred stock in the capitalizatlon of
the eompany had been taken by an equal amount of the common stock, the
aggregate capitalizatlon of §155,000,000 being preserved and maintained.
The intervention of the appellaut was heard upon the proofs taken in the
main branch of the case. The Circuit Court, upon final lieariug, dlsmlssed
Power's original bill of complaint and appellant's intervening pétition. Power
did not appeal.
M. H. Boutelle and A. W. Bulkley (Bulkley, Gray & Moore, on the
brief), for appellant. ,
C. W. Bunn and F. B. Kellogg (C. A. Severance, on the brief),
for appellee.
Before SANBORN, VAN DEVANTER, and HOOK, Circuit
Tudges.
HOOK, Circuit Judge, after stating the case as above, delivered
the opinion of the court.
The appellant's objections to the conversion of the preferred stock
of the Northern Pacific into common stock are: (i) That the retire-
ment of the preferred stock constituted a decrease of the corporate
capitalizatlon without authority of law; (2) that the issue of the
convertible eertificates of indebtedness was not for the acquisition
or construction of additional Unes of railroad or other properties,
and was therefore unauthorized and void ; (3) that after the decrease
of the capitalizatlon by the retirement of the preferred the issue of
an equal amount of common stock was an unauthorized increase in
the capitalizatlon. Appellant also contends that the réservation by
the eompany of the option to retire the preferred stock, and the in-
sertion in ail of the eertificates of stock of both characters of a récital
of such réservation, were without authority of law; also that the
scheme of retirement and conversion was void for the reason that the
privilège was not accorded the preferred stockholders of subscribing
to the new issue of common stock. The answer to thèse varions
contentions may be briefly stated. In the reorganization of the
Northern Pacific Railroad Company and the acquisition of its prop^
erties by the défendant in 1896 the bonded indebtedness of the former
was converted into the preferred stock of the latter, and in considéra-
tion of that fact the reorganization çommittee and the holders of the
securities and the stock of the two companies expressly contracted
that the défendant should hâve the right to retire such stock on the
ist day of any January prior to 1917. To avoid error on the part of
any one subsequently dealing in the stock of the défendant, every
certificate that was ever issued by it bore upon its face an évidence
of such agreement. The preferred stock was intended to be of a
temporary character, and to retain in some measure the quality of the
original indebtedness, which it succeeded. We do not doubt that
the défendant possessed adéquate authority to so condition it under
the broad and comprehensive powers conferred by its charter, but,
WEIDENFELD V. NORTHERN PAC. RY. CO. 300
even if what it did in tbat respect was not originally authorized,
confirmation may be found in the subséquent législation of Wisconsin.
Chapter 294, p. 632, Laws 1897; chapter 193, p. 296, Laws 1899.
The certificates of indebtedness which were designed to provide a
fund with which to retire the preferred stock were issued pursuant
to express statutory authority, the limitation being that of a lawful
corporate purpose ; and thèse in turn were with like authority con-
vertible into the common stock of the company. Section 11, c. 244,
p. 483, Laws 1895.
Counsel in their criticisms hâve adopted too narrow a view of what
was donc under the resolution of November 13, 1901. The capital
stock of the company was not reduced, nor was it increased. The
various steps which were adopted should, not be regarded as isolated
acts. The issue of the convertible certificates and their sale, the re-
tirement of the preferred stock with the proceeds, the retirement
in turn of the certificates themselves, and the issue of an equal amount
of common stock of the company constituted in a larger sensé but
steps to one ultimate act, and that act was the conversion of the
preferred stock into the common stock of the company. Every
conversion of a security of one class into a security of another nec-
essarily implies a retirement of the former, although every retirement
does not necessarily signify a conversion. The issue of the con-
vertible certificates was but a temporary expédient in the process
of conversion. Having served their temporary purpose, they passed
out of existence, and no longer remained as obligations of the com-
pany. As the company was clothed with the express power to con-
vert its preferred stock into stock of another character, and the con-
version as efïected had due regard to the rights of ail parties, an ex-
tended considération of some intermediate but nonessential step be-
comes prontless. It is true that the preferred stockholders were not
accorded the privilège of subscribing to the new issue of common
stock ; but certainly that fact is not a proper subject for complaint on
the part of appellant. His holdings were confined to 100 shares of
common stock. He is not the protector or conservator of the Per-
sonal rights of the preferred stockholders. The claim that their rights
were denied may well be left to them to be asserted. As a common
stockholder, the appellant was accorded every considération which
he could lawfully claim. He was entitled to subscribe for the new
common stock to an amount proportionate to his holdings of the
former issue — the same right that was given to every common stock-
holder. He was not required to exercise such right if he did not so
désire, and, if he thought the amount allotted to him for subscription
was excessive, he was entitled to reduce it to an amovmt measured
by his sensé of the equities of the situation. One may not invoke the
aid of the courts in respect of matters in which he has neither a Per-
sonal nor a représentative interest. Smith v. Gale, 144 U. S. 509, 12
Sup. Ct. 674, 36 L. Ed. 521. Moreover, it may well be said that each
preferred stockholder acquired his stock subject to the terms of an
express contract which denied him the right to share in the new
stock assigned for subscription, and that, when his stock was re-
tired, he thereupon became a stranger to the company, without voice
310 129 FEDERAL REPORTEE.
or right of participation in its intracorporate acts and relations. It
is also contended by appellant that the retirement of the preferred
stock was intended to further the accomplishment of an unlawful
merger in the name of the securities company; that without the
élimination of the preferred stock the holders of a majority of ail
the stock of the Northern Pacific, preferred and common, were op-
posed to the merger; and that, therefore, the taint of the ultimate
purpose affected the legality of the retirement. Waiving the question
which at once snggests itself — whether it is permitted to inquire into
the motives which prompt the doing of that which in itself is ex-
pressly authorized by law — we find nothing in the record which sup-
ports the premises from which the conclusion is drawn. The évi-
dence conclusively shows that the purpose to retire the preferred
stock at the earliest practicable opportunity had its birth when the
stock was first issued in i8g6. That opportunity arose when the mar-
ket value of the common stock reached par. Were the preferred
stock wholly replaced in the capitalization of the company by an
equal amount of common stock, the great advantage to the holders
of the original issue of common stock, to whom the option of retire-
ment belonged, is at once apparent. The provision for a preferential
dividend on nearly one-half of the total issue of stock would no longer
exist, and the surplus net earnings in each fiscal year would then be
ratably divided among ail ol the stockholders of the company. Ail
of the testimony appearing in the record is to the efifect that the
conversion of the stock was planned and executed upon its own
merits, and had no bearing upon the transaction with the securities
company. It also appears that before the conversion was consum-
mated the contending éléments among the stockholders who were
struggling for the control of the company adjusted their différences,
and that subsequently practically ail of the stock of the défendant
was sold to the securities company, or exchanged for stock of that
company. If we may, without direct évidence, assume with counsel
that this harmony was due in part to a récognition of the power
of the holders of a majority of the common stock to force the retire-
ment of the preferred, nevertheless the fact so assumed is entirely
too remote for considération in connection with the contention of
the appellant.
The remaining contention of appellant, necessary to be consid-
ered, is that the Circuit Court erred in holding that the securities
company was an indispensable party to the suit, and that in its
absence the intervening pétition could not be maintained. The
theory of the appellant is that, as an individual stockholder, he can
maintain a suit against his corporation as sole défendant to pre-
vent it from commencing or continuing the doing of those things
which are beyond its corporate powers, are in violation of law, and
which may lead to a forfeiture of its corporate franchises; that, in
respect of the charges made in his intervening pétition -and the re-
lief sought thereby, the défendant company may stand as the sole
représentative in the suit of ail of the stockholders, including the
securities company, and that, therefore, the présence of the latter
may be dispensed with. But appellant ignores 'the force of the
WEIDENFELD 7. NOETHEEN PAC. ET. 00. 311
pressing and insistent fact that the very thing of which he com-
plains is primarily the ownership by the securities company of a
majority of the stock of the défendant, and the end which he is
seeking is the destruction of its title and its status as a stock-
holder. It is of the foundation of our jurisprudence that the rights
of a person shall not be directly afïected by a judicial proceeding
to which he is not a party, and in which he cannot be heard for
their défense and protection. Out of this principle has grown the
rule, always recognized and enforced, that a suit will not be enter-
tained in the absence of a person who has an interest in the con-
troversy of such a nature that a final decree cannot be rendered
without either afïecting that interest or leaving the controversy
in such a condition that its final détermination may be wholly in-
consistent with equity and good conscience. Minnesota v. North-
ern Securities Company, 184 U. S. 199, 235, 22 Sup. Ct. 308, 46 L.
Ed. 499; New Orléans Waterworks v. New Orléans, 164 U. S.
471, 17 Sup. Ct. 161, 41 L. Ed. 518; California v. Southern Pacific
Company, 157 U. S. 229, 15 Sup. Ct. 591, 39 L. Ed. 683; Christian
V. Railroad, 133 U. S. 233, 10 Sup. Ct. 260, 33 L. Ed. 589; Ribon
V. Railroad Companies, 16 Wall. 446, 21 L,. Ed. 367; Shields v. Bar-
row, 17 How. 130, 15 L. Ed. 158; Taylor v. Southern Pacific Com-
pany (C. C.) 122 Fed. 147; HoUifield v. Railroad Company, 99 Ga.
365, 27 S. E. 715; Joslyn V. St. Paul Distilling Company, 44 Minn.
184, 46 N. W. 337. Taylor v. Southern Pacific Company, HoUi-
field V. Railroad Company, supra, and the case at bar, are identical
in important and controlling features. In each case the complain-
ant was a minority stockholder of the défendant corporation, and
in each case the complainant undertook to lay the ax at the root
of the title of an absent stockholder. In the two cases cited it was
held that the présence of a stockholder whose rights were attacked
was indispensable to the accomplishment of the complainant's pur-
pose.
It is true that, generally speaking, a corporation is the proper
représentative of ail of its stockholders in a suit in which the re-
lief sought will affect each and ail of them in the same way and to
the same degree. In one sensé ail of the stockholders are the cor-
poration, and the corporate body, as a légal entity, may be intrusted
with the défense of those rights which are common to ail. Obvi-
cusly, the very foundation of this rule is a community of interest,
with respect of the object of the suit, between the corporation and
ail of its stockholders. But where the gravamen of the complaint
consists of a vital conflict of interest between the corporation and
one or more of its stockholders, or between dififerent stockholders
or classes of stockholders, the reason for the rule concerning the
représentative character of the corporation ceases. The underlying
theory of appellant's case is that the corporate powers of the North-
ern Pacific which he is seeking to protect and the claims of the
securities company are conflicting to such a degree that the con-
tinued assertion and récognition of the latter will destroy the ex-
istence of the former. In other words, he says that, if the secur-
ities company is permitted to dominate and control the Northern
Pacific in connection with a similar relation to the Great North-
312 129 FEDERAL REPORTER.
ern, the independence of the Northern Pacific will eease, îts capacity
to perform its duties to the public will be destroyed, and ultimately
its corporate franchises may be annulled. A greater conflict be-
tween opposing interests can scarcely be imagined, and in view of
such a conflict it cannot reasonably be said that in the suit before
us the Northern Pacific may stand as the accredited représentative
of the securities company.
We may agrée with counsel that there are involved in this suit
questions concerning the corporate functions of the Northern Pacific,
and also conditions which threaten its corporate integrity. But
ail of this would merely show that the Northern Pacific was an in-
dispensable party to the controversy. It would not tend to show
that some other corporation did not also possess such an interest
in some other phase of the controversy as made its présence equally
indispensable. The power of another to hold and own stock of the
Northern Pacific and to exercise the rights of a stockholder are not
corporate functions of that company. But the question whether
the securities company may lawfully continue to own the stock
of the Northern Pacific which it held when the appellant inter-
vened, and may lawfully continue to exercise the rights incident
to such ownership, is one afifecting the corporate powers of the se-
curities company. It is a question in which that company has an
immédiate and vital interest. The force of thèse observations is
apparent when it is remembered that appellant is seeking a decree
that the transfer to the securities company of a controlling interest
in the stock of the Northern Pacific be adjudged fraudulent, illégal,
and void, and that the organization of the securities company be
held to be an illégal conspiracy, and, in substance, that the North-
ern Pacific and its officers be enjoined from according to the secur-
ities company the rights and privilèges of a stockholder. We are
of the opinion that the securities company was an indispensable
party to the controversy, and that the Circuit Court correctly held
that the suit could not be maintained in its absence. Thèse conclu-
sions make it unnecessary to consider the other matters presented
in the briefs of counsel.
The decree of the Circuit Court will be affirmed.
BLACK HILLS & N. W. RY. CO. et al. v. TACOMA MILL CO.
(Circuit Court of Appeals, Ninth Circuit March 4, 1904.)
No. 988.
1. INJUNCTION — Adéquate Remedy at Law — CoNDE.\rNATioN Procbedinos.
An injunction will not be granted to restrain proceedings by a railroad
company to condémn land for rlght of way in Washington on the ground
that it is not for a public use, since, under the statutes of the state, as
construed by Its Suprême Court, that question may be litigated in the
condemnation proceedings.
Appeal from the Circuit Court of the United States for the Western
Division of the District of Washington.
This is a suit in equity brought by the appellee to restrain the appellants
from proeeeding with a certain condemnation suit for the appropriation of
BLACK HILLS & N, W. ET. CO. V. TACOMA MILL 00. 313
lands of the appellee. Affidavits were filed In support of the bill, and counter
affidavits in opposition to the application for a temporary injunction. At the
hearing an interloentory decree was entered, granting the injunction prayed
for. The case is now before this court on appeal from the interlocutory de-
cree.
Consldering the events connected with this suit in chronological order, It
appears that the Blaclc Hills & Northwestern Railway Company, appellant
herein, petitioned the superior court of Washington for the condemnation of
a right of way across certain lands belonging to the Tacoma Mlll Company,
appellee herein, alleging that the petitioner was a corporation organized un-
der the laws of Washington, and engagea in the construction of a Une of rail-
road in the state of Washington for the carriage of freight and passengers;
that the défendant Tacoma Mill Company was a California corporation en-
gaged in operating a sawmill for the manufacture of lumber in the state of
Washington, and is the owner of certain lands in Thurston county, in said
state; that the petitioner has constructed and has ready for opération a Une
of railroad which has for point of commencement and intersecting with the
Olympia & Gfray's Harbor Branch of the Northern Pacifie Railway, a point
one mile west of the town of Little Rock, in Thurston county, Wash., and ex-
tends to a certain point in said county adjacent to lands owned by the de-
fendant; that the petitioner has projected its said Une of railroad from said
point over the défendants lands to a terminus on the Pacific Océan in said
state; that the petitioner has sought the right of way from défendant by pur-
chase, but that défendant has refused to permit petitioner to enter thereon,
or to construct said railroad thereon, or to sell or convey such right of way
to petitioner. The petitioner pràyed that condemnation proceedings be insti-
tuted for the appropriation of the defendant's lands to the extent of a right
of way for said projected railroad, under a statute of Washington permitting
the appropriation of prlvate property by corporations when the public inter-
est demands, and when the purpose is a public use. TJpon motion of the ap-
pellee, the proceeding was removed to the United States Circuit Court for
the District of Washington. Before a hearing was had on the pétition, the
appellee brought suit in equity to restrain the condemnation proceeding, alleg-
ing as grounds for the relief prayed for that the défendants Thomas Bordeaux,
A. II. Anderson, and Joseph Bordeaux owned ail the capital stock of the appel-
lant Mason County Logging Company, which company was organized to carry
on a gênerai sawmill and logging business, and is not authorized to act as a
common carrier, nor to exercise the right of eminent domain; that said com-
pany owns large tracts of timber land adjacent to the lands of the appellee,
and has been engaged in hauling the logs eut from its said lands over its log-
ging road to the Northern Pacific Railway, and thence to tide water under a
spécial freight rate; that said Thomas Bordeaux, A. H. Anderson, and Joseph
Bordeaux organized the défendant Black Hills & Northwestern Railway Com-
pany as a common carrier of freight and passengers, and with the power to
exercise the right of eminent domain, with the sole design of extending the
logging road of the Mason County Logging Company to the lands of said com-
pany lying beyond the lands of the appellee, so as to enable it to hanl the
timber therefrom at reduced freight rates; that the right of way attempted
to be condemned is sought for the sole purpose of constructing such a logging
road for the timber of the appellant logging company;' and that it was never
intended that the appellant railway company should exercise any of the fuuc-
tions of a common carrier. It is alleged that no Une of railway has ever been
projected by the appellant railway company, except across the lands of the
appellee; that, if such a railroad should be constructed, it could be used for
no useful purpose, save to transport the logs of the said logging company,
and that the public interest does not require the prosecution of such an enter-
prise, nor is the same a public use. The bill charges that the appellant rail-
way company was fraudulently incorporated for the purpose of unlawfuUy
by a fraudulent compliance with the laws of the state relating to the exercise
of eminent domain, securing ingress and egress to and from the timber lands
of the said logging company. In support of this bill, affidavits were flled by
the appellee alleging that the said logging company had endeavored to nego-
tiate with the appellee for a right of way for a logging road across the lands
of the appellee, and upon the refusai to grant that privilège the appellant
314 129 FEDERAL REPORTER.
Thomas Bordeaux had stated that the logging company would Incorporate a
railroad company and force a right ot way. It Is also alleged In the affida-
vits that the country through whlch the Une of road is projected beyond the
lands of the appellee Is Impracticable for the successful opération of a rail-
road.
Thls showlng Is met by the appellants by affidavits showing that the log-
ging company has been engagea In the logging business in the district In ques-
tion for four years, and has constructed some six miles of standard gauge
main Une railroad, and four miles of side tracks and switches, over whlch
it hauled Its logs to the Northern Pacific Railroad; that the town of Mumby
has been built upon the said Une of road, with about 15 familles résident there,
and 8 or 10 familles In the viclnity; that there are a public school, a post
office, and a sawmlll at said town; that said logging company, while not au-
thorized or deslrlng to do business as a common carrier, had for some time
been obliged, from the necessities of the situation, to carry both freight and
passengers over Its road. It was alleged that the projected Une of road had
long been contemplated; that It would be constructed with ordlnai^y grades,
and would open up a country rich In timber land, and which, when logged
oiï, would be valuable for agrlcultural purposes; that said road would furnlsh
an outlet from said district to Puget Sound, on one side, and to Gray's Har-
bor, on the other. The allégations of fraudulent incorporation are declared
to be untrue.
Upon thls showing, the court below entered an Interlocutory decree restraln-
ing the appellants from proceeding with the condemnation suit.
Charles F. Munday, George C. Israël, and James B. Howe, for ap-
pellants.
Struve, Hughes & McMicken, W. T. Dovell, and James M. Ashton,
for appellee.
Before GILBERT, ROSS, and MORROW, Circuit Judges.
MORROW, Circuit Judge (after stating the facts as above). The
appeal is from the order of the court granting the preliminary injunc-
tion, and the errors specified are that neither the bill, nor the affidavits
filed in support of the bill, state any ground of jurisdiction in a court
of equity, for the reason that it appears therefrom that complainant
cannot suffer any injury or damage whatsoever by the prosecution
of the condemnation proceedings; that the bill, and affidavits filed
in support thereof, show that complainant has a plain, adéquate, and
complète remedy at law, namely, its défense to the condemnation
proceedings, wherein ail of the questions sought to be raised by com-
plainant in the présent suit can be raised and adjudicated.
It is provided in the statutes of the state of Washington that any
corporation authorized by law to appropriate land, real estate, prem-
ises, or other property for right of way, or any other corporate
purposes, may présent to the superior court of the county in which
any land, real estate, premises, or other property sought to be appro-
priated shall be situated, or to the judge of such superior court in
any county where he has jurisdiction or is holding court, a pétition
in which the land, real estate, premises, or other property sought to
be appropriated shall be described with reasonable certainty, and
setting forth certain particulars conceming the ownership of the prop-
erty, and the object for which the land is sought to be appropriated.
Thestatute requires that a notice, stating briefly the objects of the
pétition, and containing a description of the land, real estate, prem-
ises, or property sought to be appropriated, and stating the time and
BLACK HILLS & N. W. KT. CO. V. TACOMA MILL CO. Ki5
place when and where the same will be presented to the court, or judge
thereof, shall be served on each and every person named therein as
owner, incumbrancer, tenant, or otherwise interested therein, at least
10 days previous to the time designated in such notice for the présen-
tation of such pétition.
It is further provided that at the time and place appointed for hear-
ing said pétition, or to which the same may hâve been adjourned, if
the court or judge thereof shall hâve sa tis facto ry proof that ail parties
interested in the land, real estate, premises, or other property described
in said pétition hâve Ijeen duly served with notice, and shall be further
satisfied by compétent proof, among other things, that the contem-
plated use for which the real estate, premises, or other property sought
to be appropriated is really a public use, that the public interests re-
quire the prosecution of such enterprise, and that the land, real es-
tate, premises, or other property sought to be appropriated are required
and necessary for the purpose of such enterprise, the court or judge
thereof may make an order directing the sherifï to summon a jury to
ascertain, détermine, and award the amount of damages to be paid
to the owner or owners, and to ail tenants, incumbrancers, and others
interested, for the taking or injuriously afïecting such land, real estate,
premises, or other property. 2 Ballinger's Ann. Codes & St. Wash.
§§ 5637, 5638, 5640, 5641. From thèse provisions of the statute, it
appears that, before there can be an ascertainment of the value of
the land sought to be appropriated by the petitioner as a right of way,
ail parties interested in the property described in the pétition hâve the
right to hâve the court détermine in the condemnation proceedings
the question whether the contemplated use for which the property is
sought to be appropriated is really a public use, and not a private use,
whether the public interest requires the prosecution of the enterprise,
and whether the land sought to be appropriated is necessary for the
purposes of such enterprise.
But it is contended by the appellee in support of the interlocutory
decree of the court below that the petitioner, the Black Hills & North-
western Railway Company, is not acting in good faith, within the
puiview of the statute granting to corporations the right to exercise
the power of eminent domain, and that this question cannot be liti-
gated in the condemnation proceedings; that the inquiry which the
court is authorized to make is limited by the apparent authority con-
feired upon the corporation by the statute; that, in this case, behind
the apparent authority conferred by the articles of incorporation is a
question of fraud in the organization of the corporation, whereby its
promoters hâve unlawfully colluded to place themselves, as a corpora-
tion, in a position whereby they are able to impose upon the court, and
appropriate the property of the complainant for a private use.
If the facts charged in the bill of complaint are true, concerning
the fraudulent character of the incorporation of the Black Hills &
Northwestern Railway Company, there is, without doubt, a remedy by
information in the nature of quo warranto to dissolve the corpora-
tion. Section 5780 et seq., Ballinger's Ann. Codes & St. Wash.
In National Docks R. R. Co. v. Central R. R. Co., 32 N. J. Eq. 755,
an injunction had been granted restraining the construction of a rail-
316 129 FEDERAL REPORTER.
road by the complaînants across the lands of the défendants, and from
instituting condemnation proceedings for the taking of land for such
purpose. It was contended by the défendants, upon the writ of error
to the appellate court, that the complainants, in incorporating, were
the mère agents of a storage company, using its money for stock sub-
scriptions, and that the road was designed for the sole convenience
of the storage company ; no ptibhc use or necessity being involved in
the proposed appropriation of land. The situation was very similar,
it will be observed, to that in the case under considération. The court
there said:
"Tliese reasons, if tbey hâve any force, go dlrectly to the legality of the
organization of the railway company. If they should prevent the exercise by
the company of the powers which the gênerai railroad law confers upon cor-
porations created under it, it is because the company should not hâve been
created in the mode and for the purposes in and for which it has been organ-
ized, and should be dlsbanded. It Is not denied that every formai requirement
of that law has been complled witb, and that, to ail extemal appearanoe, this
company is a corporation by virtue of its provisions; but it is clalmed that,
the motives and purposes of its corporators being what they are, they hâve
usurped a corporate existence which the law did not authorize them to as-
sume, and hence, while they may retain the form, they cannot exercise the
funetions, of a corporation. Not because this corporation threatens to assail
any rights of the complainants, which, if lawfully organlzed, it would not
be permitted to invade, but because it Is a corporation de facto, merely, and
not de jure, does the chancellor prevent it from doing what only a légal cor-
poration may do. An Inquiry and judgment of this nature are, we think, be-
yond the powers of the court of chancery, at least in a suit between private
parties. Whenever it is sought to impugn the legality of a corporation which
exists under the forms of law, the remedy is by quo warrante, or information
In the nature thereof, Instituted by the Attorney General."
The court, after coiisidering other matters presented by the bill of
complaint, said:
"Most of thèse questions are questions of law, which certainly hâve not beeu
heretofore settled in the complainants' favor; and no rule of equity is more
firmly established than the doctrine that a complainant is not in a position
to ask for a preliminary injunction, when the right on which he founds his
claim is, as a matter of law, unsettled."
The court accordingly dissolved the injunction. See, also, Holly
Shelter R. Co. v. Newton (N. C.) 45 S. E. 549.
But in our opinion tliere is also a remedy provided by the statute,
in the défenses that may be made to the condemnation proceeding.
The wrong which it is charged the petitioner is about to accomplish
by the proceeding is the taking of complainant's property for a private
use, and this wrong is specifically made a défense by the statute;
and, when made, it raises a question which the court is required to
détermine in limine upon satisfactory proof, and not merely upon the
showing that the petitioner is a corporation authorized by law to
exercise the right of eminent domain. This is clearly the view of the
law entertained by the Suprême Court of Washington.
In Western American Co. v. St. Ann Co., 22 Wash. 158, 60 Pac.
158, the Suprême Court had before it a judgment in a proceeding
brought to condemn a right of way across certain land. The points
urged by the appellant were, that the land sought to be condemned
was attempted to be appropriated for a private, and not a public, use,
BIACK HILLS & N. W. RT. CO. V. TACOMA MILL CO. 317
and that the respondent was not authorized by its charter to condemn
said right of way or exercise the right o£ eminent domain for the
uses set forth in the pétition. It was objected by the respondent that
the appeal could not be entertained, for the reason that the statutory
provision for an appeal in condemnation proceedings was hmited to an
appeal from the amount of damages. The Suprême Court sustained
this objection, and, in the course of its opinion, said:
"It is argued by the respondent that, Inasmuch as the law makes the ques-
tion of public use a judicial question, It must be contemplated that that judi-
tial question is to be settled by the appellate court; but we do not see any
particulai' merit in this contention, for questions which the law submits to
the exclusive jurisdiction of the superlor courts may be as purely judicial
questions as though they were tried in this court."
The Constitution of the state of Washington provides, in article i,
§ i6, that :
"Whenever an attempt Is made to take private property for a use alleged
to be publie, the question whether the contemplated use be really public shall
be a judicial question, and determined as such, without regard to any législa-
tive assertion that the use is public."
In article 4, § 4, the Constitution gives the Suprême Court of the
stBte power to issue ail writs necessary to the complète exercise of its
appellate and revisory jurisdiction.
In Seattle & Montana R. R. Co. v. Bellingham Bay & Eastern R. R.
Co., 29 Wash. 491, 69 Pac. I107, 92 Am. St. Rep. 907, the superior
court had determined that the right of way described in the pétition
and sought to be appropriated was necessary for the petitioning rail-
road Company, and the intended use was a public one, and that the
public interest required the appropriation. The proceeding was taken
to the Suprême Court by certiorari. The Suprême Court held that,
under the provisions of the Constitution cited, it had the power to
issue the writ of certiorari to bring before it the proceedings of the
superior court for the purpose of reviewing the détermination of that
court upon the question whether the contemplated use of the property
sought to be condemned was really a public use. The court there-
upon reviewed the proceedings for that purpose, and held that compé-
tent proof had been made of ail the facts necessary to be proved, and
affirmed the judgment of the superior court. This décision is, in
effect, a détermination that the question whether the property sought
to be appropriated was for a public use, and the necessity for that
use, could be litigated in the condemnation proceeding. To the same
efifect is State ex rel. Smith v. Superior Court, 30 Wash. 219, 70
Pac. 484, and State v. Superior Court of King County (Wash.) 72
Pac. 89.
The good faith of the appellant in the prosecution of the condemna-
tion proceeding is necessarily involved in the question whether the
land sought to be appropriated is really for a public use, and, as this
question may be litigated in the condemnation proceeding, the com-
plainant has a plain, adéquate, and complète remedy at law. The rule
under such circumstances is stated in Lewis on Eminent Domain (2d
Ed.) vol. 2, § 646, as follows :
"A blll In equity wlU not lie to enjoln proceedings for condemnation, for
the reason that the mère taking of such proceedings does no injury to prop-
318 129 FEDERAL REPORTEE.
erty, and for the furtber reason that the grounds relled upon for an înjunc-
tlon may be urged In défense of the proceedlngs. The making of a public Im-
provement cannot be enjoined on the ground that It is unnecessary or Is being
made to further private ends, but, vvhere the ground relied upon cannot be
litigated in the eondemnation proceedings, an Injunction will be granted."
The decree of the Circuit Court is reversed, with direction to dismiss
the bill.
SWAN V. WESTERN UI^ION ÏELEGRAPH CO.
<Circuit Court of Appeals, Seyenth Circuit. Jauuary 5. 1904)
No. 1,006.
1. Teleqeaphs— Messages— TEANsitissioN—DELAY—jVroTiriCATiON TO Sendee—
Négligence.
Where a mining expert delivered a telegrara to défendant telegraph Com-
pany advising the purchase of certain miuing stock, which message he
dlrected to be transmitted to plaintiff and 293 others, wUo were hls cli-
ents, under an agreement to transmit the saine at once, there being other
methods of rapld communication between the sendlng office and plaintifif's
place of business, It was the duty of the telegraph company, on dlscover-
Ing that it would not be able to transmit such message to plaintIfC wlth-
out delay, by reason of a defect In its wires, to promptly notify the sender
of such fact, he being a person well known to the company's agents at the
sendlng office, and easily accessible.
2. Same— Damages.
Where a mlnlng expert delivered a message to a telegraph company to
be sent to plaintiff, his client, advising the purchase of certain mining
stock, which défendant agreed to promptly transmit, but failed to notify
either the sender or the addressee that there had been several hours' de-
lay, by reason of which the addressee was led to purchase the stock at a
higher price than be would hâve been compelled to pay if the message
had been promptly delivered before the close of an exchange on the day
it was sent, the addressee was entitled to recover the différence between
vvhat he had to pay for the stock which he purchased the succeeding day
and what the stock would bave cost him if the telegram had been trans-
mitted within a reasonable time after it was received for transmission.
In Error to the Circuit Court of tlie United States for the Northern
Division of the Northern District of Illinois.
Henry L. Clarke, for plaintiff in error.
P. B. Eckhart, for défendant in error.
Before GROSSCUP and BAKER, Circuit Judges, and BUNN, Dis-
trict Judge.
BUNN, District Judge. This action was brought by Charles J. Swan,
the plaintiff in error, against the Western Union Telegraph Company,
to recover damages for losses sustained on account of the failure of the
défendant company to give notice of the delay in sending an important
business telegram relating to the purchase of certain mining stock on
1 1. Delay in dellvery of telegram, failure to disclose that Une was not In
working order, see note to Pacific Postal Telegraph Cable Co. v. Fleischner,
14 C. C. A. 177.
If 2. Measure of damages in actions against telegraph companies, see notes
to Western Union Telegraph Co. v. Coggin, 15 0. C. A. 235; Same v. Morris,
28 C. C. A. 59.
See Telegraphs and Téléphones, vol. 45, Cent. Dig. § 72,
8WAN V. WESTEBN UNION TELBaEAPH 00. 319
the Boston Stock Exchange. A jury was waived, and the case tried by
the court upon the following stipulation of facts, to wit :
"It is hereby stipulated and agreed by and between the parties herein, by
their respective attorneys, that:
"The plaintiff makes no claim agalnst the défendant on account of négligent
delay in transmittlng and deliverlng the message in controversy, and said
question may be considered by the court as eliminated from the case ; but the
plaintiff charges the défendant with negligently failing to give due notice of
delay of the message, or by reason of the '3 27 PM' under the sender's signa-
ture, with wrongfuUy misleading the plaintiff as to such delay, as set forth
and charged in the déclaration. On May 1, 1901, and for some time thereto-
fore and thereafter, the défendant corporation was engaged in and operating
a public telegraphing business and service for compensation between and with-
in Chicago, Illinois, and Houghton, Michigan. On said Ist day of May, 1901,
one Horace J. Stevens, a mining expert, and editor of certain copper-mining
publications, and assistant commissioner of minerai statistics for the state
of Michigan, occupied an office In the said town of Houghton, and was well
known to the local office of the défendant at Houghton. On the said Ist day
of May, 1901, at about 9 :15 a. m., the défendant, at its public office in Hough-
ton, Michigan, received from said Horace J. Stevens, of Houghton, Michigan,
a communication to be telegraphlcally transmitted and dellvered to the plain-
tiff herein in words and figures as foUows :
" 'Houghton, Michigan, May 1, 1901.
" 'Dr. C. Joseph Swan,
" '34 Washington St., Chicago.
" 'Ten to twenty dollars quiek rise In Mohawk. Has Wolverine Iode rich
as Quincy beside million dollars worth "Mohawkite" almost spot cash opened
in three upper levels. Advise quick purchase.
" 'Horace J. Stevens.'
"And about four o'clock in the afternoon of the said Ist day of May, 1901, the
défendant delivered to the plaintiff, and he paid the charges on, a typewritten
message In words and figures as f ollows ;
" '253. CH. MD. JO. 31 CoUect,
" 'Houghton, Michigan, May 1, 1901.
" 'Dr. C. Joseph Swan,
" '34 Washn St Chgo,
" 'Ten to twenty dollars qulck rlse In Mohawk. Has Wolverine Iode rich
as quincy beside million dollars worth "Mohawkite" almost spot cash opened
in three upper levels advise qulck purchase.
" 'Horace J. Stevens.
" '3 27 PM'
"The plaintiff had no notice that the message accepted as aforesald by the
Houghton office of the défendant would be or had been delayed in the trans-
mission and dellvery beyond the time ordinarily required for the transmission
and dellvery of such a message or for more than one-half hour after its ac-
ceptance by the défendant. The message first above quoted was accepted by
the défendant from the said Stevens in manner and form as foUows, viz. :
The entire message, except the name and address of the sendee, was written
by Stevens on one sheet of paper, and on a number of other sheets were written
the names and addresses of 294 sendees, Includlng the plaintiff. When the
said message and llsts of sendees were presented by Stevens at the Houghton
office of the défendant a consultation was had between Stevens and the man-
ager of the said office as to the most expéditions and convenlent method of
transmittlng the message ; and at the suggestion of the said manager it was
arrangea that the body of the message should be wired to Chicago and fol-
lowed by the Ust of addresses for Chicago and points beyond, the Chicago
office to relay the message to such further points. Thereupon the sheets of
addresses were rearranged by Stevens, and numbered in red pencil, and the
sheet bearing the plalntlff's name and address became the first sheet, with the
plaintiff's name number 17 on the llst, and preceded by 13 addresses for Chi-
cago and points beyond and 3 'local' addresses. The said manager of the de-
fendant advised Stevens that the transmission of the matter so accepted would
320 129 FEDBBAT. REPORTEE.
be promptly proceeded wlth, and tbe sal^ Stevens had no notice that the mes-
sage to the plalntlff would be delayed beyond tbe time tbat would ordinarily
be requlred for the transmission and dellvèry of such a message so accepted.
"Ou the sald Ist day of May, 1901, there were, besldes the service of tbe de-
fendant, two other available means of rapid communication from Houghton,
Michigan. to Chicago, Illinois, viz:; the service of the Postal Telegraph Oo.
and the long-distance téléphone, the latter directly Connecting wlth the office
of the plaintiff. From the opening up to the hour of noon on the Boston Stock
Exchange on the said Ist day of May many hundred shares of Mohawk stock
sold at 39, and on said day until the noon hour there was not more than y^
of one point of fluctuation from 39 in the sales of said stock. Thereafter the
said stock rose, and the last sales before the close of said exehange at 3 p. m.
of the said day were at 47, and the following morning the market opened at
51. The plaintlfC could hâve communicated by téléphone with his brokers in
Chicago, Wm. H. Colvin & Co., at any time on the said Ist day of May, and the
said brokers then had such security for the plaintifC's orders that they would
at once hâve proceeded to exécute by telegraph his téléphone order to buy one
hundred shares of Mohawk on the Boston Exchange. The plaintiff would
testify that he inferred that the message delivered to him as aforesaid had
been transmitted wlthin the time ordinarily required for such a message, and
had been sent by the said Stevens af ter the close of the Boston Stock Exchange,
whereon Mohawk was listed, on the said Ist day of May, and that such
message applied to the market of the following or 2d day of May, 1901. The
plaintiff would testify that he further inferred and understood, and was not
informed to the contrary, that the hour date of '3 27 PM' appearing directly
under the signature of the said Stevens on the said message Indicated the hour
at which the said message had been delivered by the said Stevens to the de-
fendant. On the morning of the 2d day of May, 1901, about 10:30 a. m.
(Central time), the aforesaid brokers of the plaintiff, at his order to buy
'under 50,' bought for him on the Boston Exchange one hundred shares of Mo-
hawk at 49%, which was as high as any subséquent sale of that day, and sev-
eral points below a few earlier sales of the same morning ; ànd he would tes-
tify that he ordered such purchase about 10 a. m. on the ground of the advices
contalned in the aforesaid message, and upon his aforesaid Inferences and
understanding as to the time of sending of said message. Later on the said
2d day of May and on the next following day Mohawk fell, and on the 3d
day of May, 1901, closed at 42, and thereupon the plaintiff made inquiry of the
said Stevens by long-distance téléphone as to the reason for such fall, and
then and there for the flrst time it became known to the plaintiff and to the
said Stevens that the above-stated delay of the message of Stevens had oc-
curred. Thereupon the plaintiff niade inquiry ou the said 3d day of May,
1901, at the Chicago office of the défendant, as to the cause of the aforesaid
delay and the Chicago office wired the inquiry to the Houghton office, and the
latter wired back that 'wire trouble' had 'delayed (Houghton) business al!
around (on May 1, 1901)' ; and the said Chicago office referred the plaintiff to
the New York office of the défendant as to any claim for damages, and such
claim was forthwith made in writing by the plaintiff, and from time to time
repeated until the beginning of the présent suit The plaintiff would testify
that the one hundred shares of Mohawlc purchased as aforesaid were held by
him until the autumn of 1901, and flnally sold at 49, and while so held their
value at one time decreased to about 30, and at anotlier time the plaintiff was
called upon to pay and did pay an assessment of tln-ee hundred dollars on the
said shares ; and he also pald to his brokers one-eighth of one point per share
for buying and one-eighth of one point per share for selling said one hundred
shares ; and while so holding said shares he was deprived of ail interest that
might bave accrued from the moneys so invested.
"This suit was not brought until after the refusai of the défendant to settle
the aforesaid claims of the plaintiff. And the foregoing statement of facts
shall constitute ail and the only évidence to be submitted by either party on
the trial of this cause.
"Chicago, June SOth, 1902. G. Joseph Swan,
"By Henry Love Clarke, His Attorney.
"Western Union Telegraph Co.,
"By Henry D. Estabrook, Its Attorûey."
SWAN T. WESTERN UNION TELEGEAPH CO, 321
THe court below, upon the hearîng, after overruling several proper
spécial requests to find for the plaintiff, rendered judgment in favor
of the défendant. We think this was error, and that judgment should
hâve been given in favor of the plaintifï for $1,050 and interest, that
being the amount of damages sustained by him by reason of the de-
fendant's neglect in not giving notice of the obstruction in its telegraph
lines between Houghton and Chicago; the stipulation showing that at
the first opportunity after the receipt of the message he paid $49.50
per share for 100 shares which would hâve cost him $39 per share if
the message had been sent in due course of business on the morning of
May ist, within a reasonable time after its receipt at the defendant's
office in Houghton. It seems évident that the duty was with the de-
fendant Company to send the message in due course, or, if it was unable
from obstruction of its lines to do so, then to notify the sender of that
fact so that he might avail himself of one of the two other methods
of quick communication that were open to him. It does not appear
from the statement of facts whether the obstruction in the lines existed
at 9:15 a. m. of May ist, the hour when the message was handed in at
the Houghton office, or came in after that time. If we were to indulge
in any presumption from the facts that are in évidence, it would seem
reasonable to suppose that the inability existed at the time of receivins;
the message, when, according to the stipulation of facts, the company's
manager advised Mr. Stevens that the transmission of the message
would be promptly proceeded with. Thirty minutes would probably
hâve given ample time for transmitting the message if proceeded with
according to such promise, but it was not sent until nearly seven hours
after its receipt. So that, if the lines were not down at the receipt of
the message, they were but shortly after ; otherwise the message would
hâve been sent. But that question does not seem to be material, as the
obligation resting upon défendant would be of a similar character in
either case. If the lines were already down, it was the duty of the de-
fendant to so inform the sender, so that he could avail himself of an-
other line of communication, or, if he so chose, to take the chances on the
defendant's restoring its service in time. If communication was ob-
structed after the message was received, this fact being unknown to
Mr. Stevens, it was equally incumbent upon the défendant to give him
timely notice of that fact. Without any explanation or excuse for the
delay in sending the message from 9:15 in the morning to 4 o'clock in
the aftemoon, or of notifying the sender of the disability' to send, the
inference of culpable neglect is palpable; and, to aggravate the case,
the Company at some point, whether at Houghton or Chicago does
not appear, placed under the sender's name the figures "3 27 PM," from
which the plaintifï understood that the message was received by the
Company at Houghton at that time, which would hâve given the very
reasonable time of 33 minutes for its transmission from the Houghton
office to Chicago. But under the stipulation we are not at liberty to lay
any stress upon this circumstance. There is nothing in the case to show
what thèse figures placed under the sender's name import — whether
they are to note the time of the receipt of the message at Houghton,
the time of sending, or the time of its receipt at the office in Chicago. It
was open to the plaintifï to make inquiry, if he did not know what
129 F.— 21
322 129 FEDEEAL REPORTER.
the figures meant. There is no évidence that he did so. He assumed
that the figures noted the time the message was received by the company
ât its office in Houghton. Thèse figures piaced by the company under
the sender's name are relied upon by the plaintifï as one ground of
négligence, but we place the décision of the case solely on the ground
of the négligence of the défendant in failing to give notice that its lines
were obstructed so that the message could not be sent. Whether the
obstruction in the lines existed when the message was delivered, or oc-
curred after that time, it was equally incumbent upon the company to
notify the sender of the fact, so that he could send the message by an -
other line of communication. That the defendant's line was out of or-
der was a fact unknown to the sender, but must hâve been well known
to the défendant. Under thèse circumstances it was the plain duty of
the défendant to give timely notice of its inability to send the message.
We bave assumed thus far that there was delay due to wire trouble
as stated by the Houghton office. Counsel for appeUee, however, insist
that, though there is thus a showing of delay, there is no showing
that the delay was uareasonable, or that the Houghton office had such
knowledge concerning the delay as imposed upon it the duty to inform
the parties interested that the message had been delayed ; and in sup-
port of this insistence point to the opening paragraph of the stipula-
tion that "the plaintifï makes no claim against the défendant on ac-
count of négligent delay in transmitting and delivering the message
in controversy, and said claim may be considered by the court as
eliminated from the case." While such paragraph exempts appellee
from damages in this suit on account of négligent delay in transmitting;
the message, it works no exemption from damages growing out of the
négligent failure to give notice of the delay ; for appellee is expressly
charged in the stipulation with negligently failing to give due notice of
the delay. The two grounds of action thus indicated — ^the one eliminat-
ed and the other clung to — are distinct. It is with respect, then, to the
second ground, only, that the fact of delay cuts any figure. The stipu-
lation shows the fact of delay ; but leaves it open whether the cause and
nature of the delay were such that the agent should hâve given notice
to the parties interested; and on this open question of fact, the évi-
dence of which was wholly within the possession of appellee, the bur-
den of proof, in our opinion, was on the appellee.
Our view .may be summed up thus : The suit being for damages
growing out of "the agent's failure to give notice of the delay, and the
bare fact of delay appearing in the stipulation, the burden was on ap-
pellee to show the nature and cause of the delay ; and, in the absence of
such showing it will be presumed that the agent at Houghton had such
information as imposed on him the duty of informing the parties in-
terested — a duty that was not in fact performed. The case is not dis-
tinguishable in principle from Fleischner v. Pacific Postal Telegraph
Cable Co. (C. C.) 55 Fed. 738, affirmed by the Circuit Court of Appeals
for the Ninth Circuit, 66 Fed. 899, 14 C. C. A. 166. The gênerai rule
applicable in that case was laid down by that court as f ollows :
"As has been said, plalntiff In error contracted to transmit and deliver this
message. At the time Its wires were down, and there was an impossibility
In performing the contract as required. The gênerai rule is that, when an
SWAN V. WESTERN UNION TELEGRAPH CO. 323
impossibility of performance Is known to the promisor, but is not known to
the promisee, the former Is liable In damages for failure to perform. 3 Am.
& Eng. Bnc. Law, subd. 73, p. 898, tlt 'Contract' ; 2 Parsons, Cont. 673."
The analogous ruie more specifically adapted to telegraph companies
is laid down by Gray in his work entitled "Communication by Tele-
graph" (section i8), as follows:
"If a telegrapli compauy Is unable, through a disarrangement of its Unes or
other cause, to do wbat it makes a business of doing, It must inform those
who wish to eniploy it of the fact, and thus acquaint them with the advantage
of employing other means. A telegraph company offers and is employed solely
to elïect the rapid communication of a message. The excuse for a failure to
efCect that communication that the company, when it made the contract, knew
that it could not perform it, can hardly be deemed a valld one."
That rule, as there laid down, commended itself to the United States
Circuit Court of Appeals in the case afore cited, and commends itself
to this court as applicable to the case in hand.
It appears from the agreed facts that the plaintiff was one of 294
persons to whom this same message was to be sent. A list of thèse
persons was prepared, with the plaintifif's name standing as No. 17 in
the list, preceded by 13 other addressees for Chicago and beyond and 3
local addressees. There was to be but one dispatch for thèse 294 cus-
tomers, so that the profits, considering the amount of work to be donc,
would no doubt be considérable. It does not appear whether or not this
circumstance had any influence upon the conduct of the company in re-
taining the dispatch for so many hours without giving notice to Mr.
Stevens, who had an office in Houghton, was a public character, and
well known to the local office of the défendant at Houghton, that an
obstruction in the wires rendered it impossible to transmit the message.
But whether the inducements for retaining and sending the message,
rather than having another company do it, were great or small, the de-
fendant had a duty to perform. Al'though not a conimon carrier in the
sensé of being insurers, a telegraph company owes an obligation to the
public analogous to that of a common carrier.
On the question of damages we bave encountered no such difficulty
as seems to hâve been experienced by the court below in finding a prop-
er measure of damages for the case. If the plaintiff was entitled to
recover even nominal damages, that would be better than to give a judg-
ment for costs against him. The proper measure of damages is what the
plaintiff lost through the négligence of the défendant, which was the
différence between what he had to pay for the stock on the morning of
May 2d and what it would hâve cost him in the forenoon of May ist,
when he should hâve received the dispatch, or notice that it could not be
sent.
The judgment of the court below is reversed, and judgment ordered
in favor of the plaintifï in error for the sum of $1,050, with interest
from the 2d day of May, 1901, besides costs.
324 129 FKDERAL EEI'ORTER.
ROBINSON V. PITTSBTJRG COAL CO. et al,
(Circuit Court of Appeals, Sixth Circuit. May 4, 1904.)
No. 1,261.
1. Mastbb and Servant— Injuries to Servant— Cause of Injuet— Ques-
tion FOK JUEY.
In an action for Injuries to a seaman by the breaking of a mast,
caused by its being struck by a bucket of ore negligently swung from the
hold by stevedores engaged in unloadlng a vessel, whettier it was tbe
erratic movement of the bucket which caused the accident, or wliether
the derrick engineer was négligent in attempting to swing the bucket
from the hatch to the dock while such movement was going on, was for
the jury.
2. Same— Fellow Servants.
Where a seaman was injured by the falling of a mast, caused by Its
being struck by a bucket of ore being hoisted from the hold by a derrick
engineer employed by a différent master from the owuer of the vessel, the
seaman and the derrick engineer were net fellow servants.
3. Same — Peoximate Concueeing Cause.
Where a seaman was killed by the falling of a mast after it was
struck by a bucket of ore negligently hoisted from the hold of the vessel
by an engineer employed by another master to unload the vessel, in the
absence of proof that the mast was not sufBciently strong to stand ail
the uses for which it was deslgned, and, if it had been entirely sound, it
would hâve sustained, wlthout breaking, the strain put upon it by the
blow from the loaded bucket, the fact that the mast had become decayed
was not a proxlmate cause of the accident.
In Error to the Circuit Court of the United States for the North-
ern District of Ohio.
Paul Howland and Charles F. Lang, for plaintifï in error.
Squire, Sanders & Dempsey, for défendant in error Pittsburg
Coal Co.
H. H. McKeehan (Hoyt, Dustin & Kelley, of counsel), for défend-
ant in error Pittsburg Steamship Co.
Before LURTON, SEVERENS, and RICHARDS, Circuit
Judges.
RICHARDS, Circuit Judge. This was an action to recover dam-
ages for the death of James Kerr, an employé of the Pittsburg
Steamship Company, by the wrongful acts of that Company and
the Pittsburg Coal Company. Kerr was employed as a watchman
on the steamer Bartlett, and was killed while the boat was being
unloaded by the Pittsburg Coal Company at its docks in Cleve-
land, July i, 1901. The Bartlett was a whaleback steamer loaded
with iron ore. At the time of the accident, Kerr was at the cap-
stan on the forward turret, trying to heave the vessel doser to the
dock. The boat was being unloaded by revolving derricks located
on and operated from the dock. Next the turret was the fore-
mast, and just aft of it hatch No. i. A heavy bucket of iron ore,
lifted out of this hatch and swung forward and toward the dock,
struck the lamp guy of the foremast. The strain broke ofï the mast
If 2. See Master and Servant, vol. 34, Cent. Dig. § 485.
ROBINSON V. PITTSBXTRG COAL CO. 325
seven or eight feet from the top, just below an iron collar or band
to which the lamp guys were attached. The falling pièce struck
and killed Kerr. An inspection of the pièce showed the mast was
rotten where it broke.
It was claimed that the steamship company was negHgent in
sending Kerr into a dangerous place without warning hira, in per-
mitting the rotten mast to be in and on the steamship, in causing
the steamship to be heaved doser to the dock while the unloading
opérations were in progress, and in causing the unloading to be
begun and continued without removing the foremast.
The coal company was charged with négligence in permitting
the bucket to corne into forcible contact with the lamp guys, thus
breaking off the masthead, in continuing the unloading opérations
while the vessel was being moved doser to the dock, in continu-
ing the unloading opérations without adjusting the unloading ma-
chinery to fit the altered situation of the vessel when brought
doser to the dock, and in permitting ail five of the unloading der-
ricks to be operated at the same time. The court arrested the tes-
timony from the jury, and directed a verdict for each of the de-
fendants.
I. The Bartlett landed at the dock in the morning. She was
moored eight to ten feet from the dock, not being able to get
nearer on account of her draught. While she was in this position,
the coal company began to unload. The unloading began about
10:30 or II o'clock, and stopped at 12 for dinner. Work was re-
sumed at i o'clock. During the forenoon, while the unloading
was going on, the boat was hove in nearer the dock "two or three
times, probably four times." At this time she was in charge of the
mate, Moser. She was hove in by order of the foreman of the
dock, Weddow, who said to Moser as soon as the boat was tied
up, "Get her alongside of the dock as quick as you can." Al-
together she was hove in about two feet in the morning, so that,
when the men quit work at noon, she was six or eight feet from
the dock. After the mate had had his dinner, he heard the buckets
and machines going again, and he went on deck and ordered the
deceased, Kerr, to go forward and heave the boat in, if he could,
with the steam capstan. Kerr proceeded to exécute the order.
What then occurred was thus described by the mate :
"A. Kerr went up on the forward turret, and took the turns of the Une
ofC the timberheads, where the line was made fast to the dock ; and he gave
it the steam In order to heave her in, but I dldn't see hlm heave her in. I
didn't see that the capstan moved. So I said, 'did you get any, .Jim?' and
he says, 'I got a little;' and that moment I saw a bucket coming toward
the spar and strike the lamp guy, and the topmast came down and fell on
Kerr, and he dropped down, and I jumped on the forward turret" —
The foremast was of pine, about 35 feet long, 10 inches in diameter
at the butt, and tapering toward the top. It was fastened to the
deck by two pièces of iron, and was held in place by three wire
stays ; one running forward, and the other two to each side of the
vessel. The stay nearest the dock was removed. The mast stood
on a line running through the center of the hatch, about a foot and
32G 129 FEDERAL EEl'OETBE.
a half forward of it and next the turret. About 7 or 8 feet from
the top of the mast there was an iron coUar or band, resting on a
shoulder eut into the mast. From this collar, two iron arms ex-
tended out and forward, to which were attached two lamp guys
(wire ropes three-eighths of an inch in diameter), which ran parallel
with the mast, to the turret where they were fastened. The mast
was used to carry the ship's lights, and the lamp guys to raise the
Hghts. The lamp guys were about 14 inches apart and extended
about 3 inches beyond the side lines of the mast. They were in
front of the mast, probably a foot from it. The iron bucket was
about 3 feet square, and, when fiUed with iron ore, weighed nearly
a ton. It struck the lamp guys midway between the turret and the
iron collar. The mast broke just below the collar. It was rotten
there an inch deep ail around.
Just before the accident the mate was standing a little behind
the hatch out of which the bucket was hoisted, and on the dock
side, 15 or 20 feet from Kerr. Asked whether the vessel was drawn
in after dinner, he said:
"It was so little that I cauldn't see, and that caused me to ask Kerr 1£ he
got any slack on the Une at ail. He said, 'Yes, a little.' "
Asked where the bucket was when he first saw it, he said :
"A. When it struck the guy — ^when it came swinging in towards the gnf."
The Court: How you mean 'swinging in?'" A. Out from the dock towards
the center of the vessel."
Examined further upon the same point, he said :
"A. I saw the bucket swinging towards the mast. So it must hâve corne
this way. The Court : Where was it when you saw it? A. It was rlght
in range of my view between me, and swinging in towards the mast. * • *
Q. And when you saw it, was when It was awinging around In a circle to-
wards the dock, when it caught the mast? A. It swung towards the mast.
It didn't swing In a regular circle. Q. It swung towards the mast? A.
Yes, sir. Q. When was that? A. When I first saw it Q. And when was
It that you first saw it? A. When It was about two or three feet away from
the guy, swinging towards the mast. I can't tell you the exact time."
O'Boyle, the engineer who operated the derrick at hatch No. i,
testified that after dinner he swung an empty bucket from the dock,
and lowered it into the hatch. He did this slowly. The bucket
cleared the lamp guy 2 or 3 feet. He waited 10 or 15 minutes,
and then raised and swung the loaded bucket, which struck the
lamp guy and broke the mast. Asked to describe the motion of this
bucket, he said:
"A. The bucket came up good and stralght, but the momentum of the
bucket was what caught him. I couldn't see the man, where he was, at ail.
It was the momentum of the bucket which caught the lamp guys, The
Court: What do you mean by that? You say the bucket came up stralght.
A. Yes, sir. Q. Now you say the momentum of the bucket. Do you mean
it swung out? A. Yes, sir ; and I couldn't stop it. Q. When you turned
the boom, the bucket swung out? A. Ye^, sir. Q. How much did it swing
from being In an upright position? A. About 3 or 4 feet"
On cross-examination the witness was asked :
"Q. I want to know if you did not say to Mr. Howland, there, that, after
that bucket came up out of the hatch and started back for the dock, it was
swinging back and forth? A. Well, a bucket naturally would swing back
KOBINSON V. PITTSBUEG COAL CO. 327
and forth. Q. Did yon say that to him? A. Yes, sir; I did. Q. And the
bucket was swinging back and forth, you said, through the air, about 3 or
4 feet, didn't youî A. Yes, sir."
The witness, on cross-examination, testified that in the morning the
boom was lower down, in order to reach out farther over the ves-
sel. It does not appear when he raised the boom. He says he did
not during the forenoon, and he evidently did not after dinner. It
was his opinion the boat was moved in during the noon hour, but he
did not see it. When he swung the empty bucket out to the hatch
after dinner, he says it cleared the mast about two or three feet. He
moved that bucket "slow."
This was substantially ail the testimony with respect to the accident
itself. There was some additional with respect to the rotten mast.
2. The court below, after holding that the rotten mast was not con-
nected with the accident in a way to render the steamship company
liable on that account (a ruling which we sustaîn), assumed that the
occasion of the accident was "the bringing nearer together of the
vessel and the machinery for unloading it," and, asserting that the
deceased did this, and failed to notify either the mate of the vessel
or the agent of the coal company of the extent of the movement of
the vessel nearer the dock, held that neither the steamship company
nor the coal company was liable under the circumstances.
We hâve examined the testimony carefully, and are at a loss to
comprehend how the court below reached the conclusion that the
only reasonable inference to be drawn from the testimony is that
the vessel was hove in two feet nearer the dock during the noon hour,
when the deceased tried to work the capstan, and that this was the
cause of the accident. Instead of establishing thèse facts, there was
proof which, in our opinion, tended to show that there was nO' move-
ment of the vessel during the noon hour, when the deceased tried to
operate the capstan, and that the cause of the accident was not the
movement of the boat, but of the bucket. It was not the dock hands,
but the sailormen, who hove in the boat. They were in command
of the mate, and acted under his orders. The mate had been directed
by the foreman of the dock hands to get the boat along side of the
dock as quick as he could. He therefore was the one of ail others
who was in the best position to state when the boat was hove in. He
testified she was hove in probably four times during the morning —
in ail, 2 feet. He directed Kerr to try and heave her in further after
dinner, and Kerr tried to do this with the steam capstan. He was
only 15 or 20 feet away from Kerr, and watching him closely, when
he tried to work the capstan, yet he could not see any movement at
ail. That is why he asked Kerr whether he got any slack, and Kerr
said, "A little." He might hâve got a little Ijy the stretching of the
line. The tendency of this testimony is to show that, in point of fact,
Kerr did not move the vessel at ail. If he had moved the boat but a
few inches, the mate, watching closely the working of the capstan,
would instantly hâve observed the movement.
Not only does the testimony fail to show with any degree of cer-
tainty that the boat was hove in by the deceased a distance sufficient
to cause the bucket, in its regular course, to catch the lamp guy.
328 129 FEDERAL EEPORTEK.
thus causing the accident, but it tends to show that the reason the
bucket struck the lamp guy was because of its erratic movement,
occasioned by the improper and negHgent opération of the derrick
by O'Boyle, the engineer on the dock. The mate and O'Boyle were
the two persons who had opportunity to observe the motion of tlie
bucket when it struck the lamp guy. They both testifîed that at t!ie
time the bucket was not swinging around on its regular circle frora
the hatch towards the dock, but out from the dock towards the mast —
in other words, back and forth, or to and fro, across the Hne of its
usual circular course. Tlie mate was in a position — on the dock side
of the vessel, just aft of the hatcli — where he would notice such a
divergence of the bucket from its regular course. He says the bucket
"came swinging towards the guy" ; "swinging out towards the mast" ;
"it swung towards the mast"; "it didn't swing a regular circle." The
derrick engineer says the bucket came up good and straight, but "it
was the momentum that caught him," and, asked to explain what he
meant by the momentum, said the bucket "swung out," and he
could not stop it; that "it swung out about 3 or 4 feet." On cross-
examination he admitted that he had stated that the bucket "was
swinging back and forth about 3 or 4 feet."
The engineer testifîed that, when the empty bucket was swinging
slowly from the dock to the hatch, it missed the mast and the lamp
guys by only two or three feet. He had the means, therefore, of
knowing that the loaded bucket, swinging back and forth, across the
line of its course and towards the mast, a distance of about three or
four feet, as he put it, was liable to hit the mast or the lamp guys if
swung around while that erratic movement continued.
One of the claims of the pétition is that the coal company was
négligent in permitting the loaded bucket to strike the lamp guys,
and thus break the mast. In view of the testimony to which we hâve
called attention, we think it was clearly a question for the jury to
détermine whether it was the erratic movement of the bucket which
caused the accident, and whether the coal company, through its em-
ployé, the derrick engineer, was négligent in attempting to swing the
bucket from the hatch to the dock while this movement was going
on. Dunlap v. N. E. R. R., 130 U. S. 649, 9 Sup. Ct. 647, 32 L. Ed.
1058; R. R. V. Converse, 139 U. S. 469, 11 Sup. Ct. 569, 35 E. Ed.
213 ; Richmond & Banville R. R. v. Powers, 149 U. S. 43, 13 Sup. Ct.
748, 37 L. Ed. 642; Gardner v. Mich. Cen. R. R., 150 U. S. 349, 14
Sup. Ct. 140, 37 L- Ed. 1107. The deceased was not, in the view we
take of the case, a fellow servant of the derrick engineer, nor did he
assume the risk of being injured by the négligence of servants of the
coal company engaged in unloading the vessel.
3. Whiie unable to agrée with the court below that there was no proof
presented to sustain a verdict in favor of the coal company, we ap-
prove of its action in directing a verdict for the steamship com-
pany. The claim against the latter turned upon the part played in
the accident by the rotten mast. There was no testimony tending to
show that the mast was not strong enough to stand ail the uses for
which it was designed and employed, namely, the carrying of liehts
and signais, and no testimony tending to show that the mast, if en-
THREE PACKAGES OF DISTILLED SPIRITS V. UNITED STATES. 329
tirely sound, would hâve sustained, without breaking, the strain put
upon it by the blow of the loaded bucket when it struck the lamp guy.
The steamship company could not be held liable for failing to guard
against an accident which it bad no reason to anticipate, either by
providing a stronger mast, or by warning the deceased not to stand
near the mast while the derrick was being operated.
The judgment of the court below is affirmed as to the Pittsburg
Steamship Compiny, but reversed as to the Pittsburg Coal Company,
and the case remanded for a new trial.
THREE PACKAGES OF DISTILLED SPIRITS v. UNITED STATES ex rel.
WESTHUS, Collecter of Internai Revenue.
(Circuit Court of Appeals, BIghth Circuit. April 4, 1904.)
No. 1,988.
1. Inteknal Revenue— Liquob Package»— Changing Contents aptes Stamp-
iNG—FoErBiTUEBS— Evidence.
Where, on an Information to forfeit certain liquors on the grounj
that distilled splrlts of a différent quality had been put into the barrels
after they were orlglnally stamped and branded, in violation of Rev. St.
S 3455 lU. S. Coinp. St. 1901, p. 2279], it was conceded that the claimant
was entltled to reduce the proof by the addition of water, and the un-
contradieted évidence showed that the spirits contalned in the packages
had been reuueed In proof between 12 and 14 degrees, after they had
been gauged and stamped, by the addition of water, in conformity wlth
the law and in the présence of a government gauger, the diserepancy
in the percentage of the alcohol contained in the liquor was insufflcient
to form a basis for an inference that the change was occasloned by the
addition of "other spirits of a différent quality."
2. Same— Issues— Peoof.
Where an information for the forfeiture of certain packages of liquors
alleged that, after the barrels had been Inspected, gauged, and stamped,
something else than the contents which were therein when said barrels
aud packages were so lawfuUy stamped, branded, and marked, to wit,
dlstilled spirits of a différent quality, had been placed therein, in viola-
tion of Rev. St. § 3455 [U. S. Comp. St. 1901, p. 2279], évidence that at
the time the proof of the liquors was reduced by the addition of water,
after the packages had been stamped, some caramel coloring matter had
been put into the packages to deepen the color, was not withln the in-
formation, and therefore inadmissible.
In Error to the District Court of the United States for the Eastern
District of Missouri.
For opinion below, see 125 Fed. 52.
Warwick M. Hough (Jacob Klein, on the brief), for plaîntiflf in
error.
David P. Dyer (Horace L. Dyer and Bert D. Norton!, on the brief),
for défendant in error.
Before SANBORN, THAYER, and HOOK, Circuit Judges.
TITAYER, Circuit Judge. This is an information which was fîled
by the United States against three packages of distilled spirits to ob-
tain a forfeiture of the same under section 3455 of the Revised Stat-
utes of the United States [U. S. Comp. St. 1901, p. 2279]. The A.
330 129 FEDERAL REPORTER.
Graf Distilling Company claimed the liquor and interposed a défense
against the forfaiture. Section 3455 of the Revised Statutes of the
United States, qnoting only so much thereof as is essential, is as
follows :
"Whenever any person sells, glves, purchases, or receives any box, barrel,
bag, vessel, package, wrapper, covér, or envelope of any kind, stamped,
branded, or marked In any way so as to show that the contents or intended
contents thereof hâve been duly inspected, or that the tax thereon has been
paid, or that any provision of the internai revenue laws has been complied
with, whether such stamping, branding, or marking may hâve been a duly
authorized act or may be false and counterfeit, or otherwise without author-
ity of law, said box, barrel, bag, vessel, package, wrapper, cover, or envelope
being empty, or containing anything else than the contents whlch were there-
in when said articles had been so lawfully stamped, branded, or marked
by an offlcer of the revenue, he shall be liable to a penalty of not less than
flfty nor more than five hundred dollars. * * * And ail articles sold,
given, purchased, received, made, manufactured, produced, branded, stamp-
ed, or marked in violation of the provisions of thls section, and ail their
contents, shall be forfeited to the United States."
The information which was filed by the government alleged in the
second article:
"That prior to the times of said seizure of said barrels and packages they
and each of them had been purchased and received by A. Graf & Company,
they then being stamped, branded, and marked so as to show that the con-
tents thereof were distilled spirits of a certain proof, which had before then
been duly inspected by an offlcer of the revenue, to wit, a United States
gauger ; that afterwards and before said seizure said barrels and packages
and each of them, and the contents therein contained, were sold to divers per-
sons, each of the barrels and packages at the time of the sale last aforesaid
then containing things else than the contents which were therein when said
barrels and packages were so lawfully stamped, branded, and marked by
said offlcer of the revenue, to wit, distilled spirits of a différent quality, in
violation of section 3455 of the Revised Statutes of the United States, where-
by and by force of said statute said barrels and packages and ail the con-
tents thereof became and are forfeited to the United States."
At the conclusion of the évidence the ctaimant below, who is the
plaintiff in error hère, requested the trial court to direct the jury
to return a verdict in its favor, on the ground that there was no sub-
stantial évidence to sustain the charge which was contained in the
information. This instruction was refused, whereupon the trial court,
of its own motion, after reciting the substance of the statute as above
quoted, charged the jury as follows :
"If he sells the barrel, the barrel havlng been branded or stamped by one
of the revenue offlcers pursuant to law, and the barrel is empty, that Is the
flrst condition. Undcr those rules no one is permitted to sell the empty
barrel containing this brand, because it may be used as an instrument for
defrauding the government of its wealth. The second condition is that he
may not sell it if it contains anything else at the time of the sale than the
contents which were therein when said liquor had been lawfully stamped,
branded, or marked. Now, it is claimed that after the gauger put his stamp
on those casks, after the proof had been reduced, that between that time
and the time when the claimant hère, Mr. Graf, sold it, something had been
put Into those casks. If there was anything put in there other than water,
then I charge you that you should find in favor of the government."
An exception was taken to the action of the court in both of the
respects last stated, and thèse exceptions présent the principal ques-
THREE PACKAGES OF DISTILLED SPIBITS V. UNITED STATES. 331
tions to be deterniined on appeal ; the jury having retumed a verdict
in favor of the government.
It will be observed that the information alleged that the barrels
and packages in question, when sold, contained "things else than
the contents which were therein" when the packages and barrels were
stamped and branded, "to wit, distilled spirits of a différent quality."
After a careful examination of the record we are of opinion that there
was no substantial évidence offered by the government to sustain
the allégation that distilled spirits of a différent quality had been put
into the barrels after they were originally stamped and branded. The
testimony shows that the spirits which were contained in the three
packages now in controversy were manufactured in Kentucky, where
the packages were originally stamped and branded by a government
gauger. They were subsequently sold by the distiller and transported
to the city of St. Louis, Mo., where the proof was reduced by the ad-
dition of water. The proof was reduced by the addition of water
from 102°, the original proof, to about 90°, or, as one witness says,
to 88°. The government obtained samples of the spirits in their origi-
nal condition from Kentucky, and caused them to be compared by ex-
perts with samples which were taken from the packages in controversy
after the proof was reduced. The comparison thus made disclosed the
présence of a larger percentage of alcohol in the sample which was ob-
tained from Kentucky than in the sample which was taken from the
other packages. The former sample contained 52.03 per cent, of al-
cohol, while the sample taken from the other packages contained
44.52 per cent. Because of this discrepancy, one of the government's
witnesses said that the inference was that a part of the original con-
tents of the casks had been withdrawn and other neutral spirits of a
cheaper character substituted. This is the only évidence that we find
in ihe record to sustain the allégation that "distilled spirits of a dif-
férent quality" had been put into the barrels after they were originally
stamped and branded. Now, in view of the admitted facts that the
spirits contained in thèse packages had been reduced in proof after
their removal to St. Louis by the addition of water, that the proof
was so reduced in conformity with law and in the présence of a gov-
ernment gauger, and that by the addition of water the original proof
had been reduced as much as 12° or 14°, we hâve not been able to
conclude that the observed discrepancy in the percentage of alcohol
formed a sufïicient basis for an inference that the change was occa-
sioned by the addition of other spirits of a différent quality. It is
conceded that the claimant had the right to reduce the proof by the
addition of water. To that efïect are the authorities, as well as the
rulings of the Commissioner of Internai Revenue. United States
V. Thirty-Two Barrels of Distilled Spirits (D. C.) 5 Fed. 188 ; Three
Packages of Distilled Spirits (D. C.) 14 Fed. 569; United States v.
Fourteen Packages of Whiskey, 66 Fed. 984, 14 C. C. A. 220 ; United
States V. One Package of Distilled Spirits (D. C.) 88 Fed. 856; United
States V. Bardenheier (D. C.) 49 Fed. 846. See, also, letter of the
Commissioner of Internai Revenue of date August 8, 1900. The gov-
ernment ofïered no testimony tending to show that the réduction in
the percentage of alcohol could not hâve been occasioned or was not
332 129 FEDEEAL REPOETEK.
adequately accounted for by the addition of water în the manner
aboyé mentioned. The mère fact, therefore, that the proof of the
spirits had been reduced so as to show a smaller percentage of alcohol,
raised no presumption that it had been reduced by putting other
spirits of a différent quality into the packages, vvhen the réduction
could be as well accounted for by the doing of a lawful act, which had
in fact been done ; that is, by the addition of water. Under thèse cir-
cumstances, we think that there was no substantial évidence that other
distilled spirits of a différent quaHty had been introduced into the
pacl-cages after they were originally stamped and inspected.
In the course of the trial considérable évidence was introduced
having a tendency to show that, either at the time when the proof
was reduced or subsequently, some caramel coloring matter had been
put into the packages to deepen the color of the spirits ; and the in-
struction which the trial court gave was to the effect that if anything
whatever was put into the packages, other than water, they became
subject to forfeiture. It is niost probable, we think, that the jury
found that caramel coloring matter had been introduced into the
packageSj and that they had become forfeited for that reason. This
présents the question whether the information was sufïîcient to war-
rant a forfeiture on that ground. It did not allège that coloring mat-
ter had been put into the barrels after they were stamped, and pray
for a decree of forfeiture for that reason, but did allège that the
"something else" which had been added was "distilled spirits of a
différent quality" than those contained in the barrels when they were
originally inspected and branded. This was the précise issue tendered
by the information. Now, waiving the question whether, when one
puts a substance like caramel coloring matter, on which the govern-
ment does not levy a tax, into a barrel of distilled spirits, he thereby
does an act which renders it forfeitable under section 3455 of the Re-
vised Statutes, we think that such an act was not charged in the in-
formation, but an altogether différent act, and that the government
should be held to proof of the fact which it had alleged. In ordinary
civil cases the rule is that the proof must conform to the allégations.
In a civil suit a party is not permitted to state one cause of action
and recover upon another. and there is sfreater reason why the rule
should be enforced in the case in hand, because it is a proceeding of
a quasi criminal nature to enforce a forfeiture of property. We feel
constrained to hold, therefore, that under such an information as was
filed the government was not entitled to a decree of forfeiture on the
ground that caramel coloring matter had been put into the packages
after they were stamped, and, as there was no substantial évidence to
sustain the allégation that other distilled spirits had been put into
the packages, we think that the claimant's peremptory instruction to
find in its favor ought to hâve been given. The judgment of the lower
court is accordingly reversed, and the case remanded for a new trial.
WEEKS V. SCHAREB. 333
WBEKS V. SCHARBR.
(Circuit Court of Appeals, Eighth Circuit. March 18, 1904.)
No. 1,851.
1 Masteb and Servant— Injtjbies to Servant— Mines— Evidence— Self-
Sebving Statements.
Where, in an action for injuries to a miner, négligence was alleged, In
that défendant failed to promulgate and enforce a rule ttiat tlie trapdoors
at the top of tlie shaft should be elosed when the lioist bucket was being
unloaded at that place, évidence of défendants son that the superintend-
ent of the mine was direeted to instruct the employés that such doors
should be elosed at such times, offered in support of the testimony of
plaintiff's fellow servant, who alone testifled that instructions concern-
ing the closlng of such doors had been actually given to the employés,
is inadmissible, as being of a self-serving charaeter.
2. Tbial— Argument to Jury— Misconduct or Counsel— Curing Erboe.
Where, on the attention of the court being ealled to misconduct of plain-
tiff's counsel in making a certain argument to the .lury, which was not
supported by the évidence, the court promptly sustained the objection,
and direeted the jury to disregard such improper statement, the error
was cured.
S. Fellow Servant— Incompetency—Supebior Servant— Notice.
Where a shift boss in a mine had no power to hire or discharge the
workmen under Mm, but was merely a fellow servant of plaintiiï of a
superior grade or class, the fact that he had power to temporarily sus-
pend workmen did not render him a vice principal, so as to charge the
master with the knowledge of such shIft boss as to the incompetency of
a fellow servant, by whose négligence plaintiff was injured.
In Error to the Circuit Court of the United States for the District
of Colorado.
On March 20, 1899, and for some time prior thereto, Weeks was the lessee
and was engaged in the opération of a mine in ïeller county, Colo. Part of
the time his son was about the raine as the représentative of the owner, but
during ail of the time the immédiate direction, supervision, and control of the
mining opérations were exercised by a superintendant. On the day referred
to, Scharer, who was employed as a trammer, was struck and severely in-
jured in the 500-foot level, near the vertical shaft of the mine, by a jackscrew
which had been allowed to fall from the mouth of the shaft at the surface,
and which, meeting an obstruction in Its deseent, bounded into the drlft where
he was working. One Murcray, a fellow servant of Scharer, had taken the
jackscrew to the surface, and was endeavoring to remove it from the bucket
in which the ascent had been made, when it escaped his control, and fell down
the shaft, with the resuit mentioned. The mouth of the shaft was equipped
with trapdoors, but they were not elosed while Murcray was endeavoring to
remove the jackscrew. Scharer brought suit against Weeks, alleglng that he
failed in his duty as employer to make, promulgate, and enforce a rule that
the trapdoors at the top of the shaft should be elosed when a bucket was be-
ing loaded or unloaded at that place ; also that Murcray was a négligent and
careless workman, and that his habits and charaeter in that regard were either
known to thelr common employer or could hâve been known by the exercise
of ordinary care, and that he should hâve been discharged before the occur-
rence of the injury complained of. The action was tried, and resulted in
a judgment of the Circuit Court in favor of Scharer, which was reversed by
this court Weeks v. Scharer, 111 Fed. 330, 49 C. C. A. 372. It was agaln
tried with a similar resuit. To reverse the second judgment, Weeks prose-
cutes this proceeding in error.
The défense was that a rule requiring the closlng of the trapdoors had been
duly made and promulgated; that the careless habits of Murcray were not
known to Weeks, and that, therefore, he was çot négligent tn retaining him in
334 129 FEDERAL REPORTER.
hls service; that Seharer and Murcray were fellow servants, and that damage
to the former by the négligent act of the latter could not be visited upon
Weeks. As tendlng to prove the making and promulgation of the rule, Weeks
offered the testimony of hls son as to instructions glven to the superinteudent
regarding the opération of the trapdoors. An objection thereto was sustained
by the Circuit Court. In hls closing argument to the jury the counsel for
Seharer, without the authorlty of any évidence in the case, spoke of an alleged
custom among other mine owners to instruct their shift bosses to report men
who were found to be careless and reckless. Objection being made to this con-
duct by opposing counsel, the court promptly sustained the objection, and
directed the jury to disregard the statement In order to show that Weeks
had notice of the négligent and careless habits of Murcray, testimony was re-
ceived that one of the shift bosses was fully advised thereof. There was also
testimony tending to show that the shift boss had power to temporarily lay
off or suspend the workmen, but not the power to hire or discharge them.
Weeks requested that the jury be Instructed that notice to the shift boss of
Murcray's habit of carelessness was not notice to hlm, and would not be such
notice unless he had invested the shift boss with authorlty to hire and dis-
charge the workmen. The Circuit Court refused to so instruct the jury, but,
on the contrary, Instructed them that, if the shift boss had authorlty "to dis-
charge Incompétent miners or to suspend them," he represented Weeks, and
that notice to hlm was notice to Weeks. Thèse three matters are relied upon
by Weeks, the plalntiff in error, for the reversai of the judgment of the Circuit
Court.
Lester McLean (W. Scott Bicksler and Edmon G. Bennett, on the
brief), for plaintiflf in error.
Horace N. Hawkins (Thomas M. Patterson and Edmund F. Richard-
son, on the brief), for défendant in error.
Before SANBORN, VAN DEVANTER, and HOOK, Circuit
Judges.
HOOK, Circuit Judge, after stating the case as above, delivered the
opinion of the court.
In view of the testimony on behalf of the plaintifï it became impor-
tant to the défendant, Weeks, to prove that he discharged his duty
to make, promulgate, and enforce a rule that the trapdoors at the
mouth of the shaft should be closed when the bucket was being load-
ed or unloaded at that place. To this end he sought to show by his
son that the superintendent was directed to instruct the employés
accordingly. The proffered testimony was excluded by the trial court.
It is clear that the testimony was of a self-serving character, and
inadmissible, and that its purpose was to improperly strengthen the
statement of Murcray, who alone testified for défendant that instruc-
tions concerning the closing of the trapdoors were actually given to
the employés. The superintendent was not a mère servant of the
owner. In addition to his gênerai powers of management and super-
vision of the opérations of the mine, he had been invested with the
power to hire and discharge the employés. He represented the owner
in respect of the primary and personal duties of the latter to the work-
men. He also possessed the power, and it was his duty, to make and
enforce ail needful rules and régulations for the protection of the
men under him ; and, being clothed with this power and charged with
the corresponding duty, the further directions from the son of the
owner were wholly superfluons. It is contended that the testimony
which was rejected tended to show the making of a rule with respect
WEEKS V, SCHAKEE. 335
to the closing of the trapdoors, although it might not tend to show
that such a rule was actually promulgated. But the mère promulga-
tion of the rule by the superintendent or other person in authority
involved at once its making or establishment. The alleged directions
f rom the son without corresponding action by the superintendent would
hâve been futile, while action by the superintendent without the alleged
directions from the son would hâve been sufficient. The testimony was
properly excluded.
It is also assigned as error that counsel for Scharer during his clos-
ing argument assumed, without warrant and authority in the record, to
inform the jury that shift bosses in other mines were charged with the
duty of advising their principals of the careless and reckless habits of
the workmen. This matter may be dismissed from further considéra-
tion with the observation that the attention and action of the court
were at once invoked, and the court promptly sustained the objection,
and directed the jury to disregard the improper statement. Portland
Gold Min. Co. v. Flaherty, m Fed. 312, 49 C. C. A. 361.
There remains the question of the correctness of the instruction that
notice to a shift boss of the reckless habits of a servant is notice to the
master if the shift boss bas authority to suspend, but is without au-
thority to discharge, such servant. The instruction was predicated not
upon any claim of négligence in the original hiring of Murcray, but
upon the failure to discharge him after an alleged notice of his reck-
less habits. To bind the master in such a case the notice must be given
to the master himself, or to some one who represents him in respect
of his positive duty to exercise reasonable care in the rétention of his
servants. Notice of the character of a servant given to a fellow serv-
ant who does not stand in the place of the master is ineflfective. It is
settled doctrine in the courts of the United States that mère différences
in grades of service or in power or authority with respect to each other
will not detach one of a number of employés from the class of fellow
servants. The presumption is that ail who enter the service of a com-
mon master, and engage in a common service or in the same gênerai
undertaking, are fellow servants. A few of the multitude of cases will
serve to illustrate the appHcation of thèse rules. The foUowing hâve
been held to be fellow servants : Conductor and brakeman on a freight
train (Railroad v. Conroy, 175 U. S. 323, 20 Sup. Ct. 85, 44 L. Ed. 181) ;
foreman and laborer in mine (Alaska Min. Co. v. Whelan, 168 U. S.
86, 18 Sup. Ct. 40, 42 L. Ed. 390); roadmaster, foreman of section
gang, member of gang and train conductor (Martin v. Railroad, 166
tJ. S. 399, 17 Sup. Ct. 603, 41 L. Ed. 105 1) ; foreman and section hands
(Railroad v. Peterson, 162 U. S. 346, 16 Sup. Ct. 843, 40 L. Ed. 994,
and Railroad v. Charless, 162 U. S. 359, 16 Sup. Ct. 848, 40 L. Ed. 999) ;
foreman and other members of switching crew (Railroad v. Keegan,
160 U. S. 259, 16 Sup. Ct. 269, 40 L. Ed. 418); foreman of a shift of
miners and members of another shift (Davis v. Mining Co., 117 Fed.
122, 54 C. C. A. 636); foreman and employés in railroad machine shop
(Gaynon v. Durkee, 87 Fed. 302, 31 C. C. A. 306) ; foreman of a quarry
and a stone cutter (Reed v. Stockmeyer, 74 Fed. 186, 20 C. C. A. 381);
foreman of street gang and laborer (Balch v. Haas, 73 Fed. 974, 20
C. C, A. 151); foreman and member of bridge gang, the former having
336 129 FEDBJEAL EBPORTER.
power to hire and discharge the men and to direct and control tlicm
in their work (Railway v. Brown, 73 Fed. 970, 20 C. C. A. 147) ; shift
boss and miner (Weeks v, Scharer, m Fed. 330, 49 C. C. A. 372).
For the négligence of one of thèse resuhing in injury to the other the
master is not liable unless he has intrusted to the neghgent servant the
performance of his positive duties as master. And in such case, wlien
liabihty exists, the négligence must arise from the failure to perform the
particular duty of the master with which the servant is charged. Thus
it was held in Railroad v. Peterson and in Railroad v. Charless, supra,
that a railroad company was not liable to a member of a section gang
for the Personal négligence of his foreman, although it appeared that
the latter had the power to hire and discharge the men and to manage
and superintend their labors.
The shift boss and Scharer and Murcray were mère fellow servants
of a common employer, unless the possession by the shift boss of the
power to temporarily suspend his co-workers raised him to a différent
class, and charged him with the positive duty of the master in respect
of the competency of the employés. If the shift boss had been clothed
with power to discharge the men under him, he would then hâve occu-
pied the position of a vice principal, and it would hâve been his duty
to exercise reasonable care to retain in the service only those who were
careful and prudent. But does he occupy such a position merely be-
cause he has the power to temporarily suspend them? The absence of
the power to discharge, in connection with the possession of the power
to suspend, would seem naturally to imply that the shift boss had not
been charged with that positive duty of the master, and that the master
had withheld an authority which alone is controlling and effective. An
essential and important quality of représentation would seem to be lack-
ing. The power to suspend the workmen pertains more to the usual
and ordinary progress and performance of the work. It is a part of
that authority which is generally intrusted to superintendents, fore-
men, and bosses who direct the body of employés where to work,
how to work, and when, and concededly the possession of such powers
does not make a superintendent, a foreman, or a boss a vice principal.
Superintendence without the power of temporary suspension is unusuaL
Such power appeals to the mind as being a natural and inhérent quality
of mère superintendence. It pertains to the province of ordinary su-
pervision. It is similar in character to the power to temporarily sus-
pend the prosecution of the work which in itself opérâtes as a suspen-
sion of the workmen, and such power is plainly included in that of
ordinary superintendence. We are of the opinion that a shift boss who
is without the power to discharge the workmen under him is not
charged with the master's duty as to the exercise of care in the réten-
tion of none but compétent servants, and is therefore not the master's
représentative in that respect, although he may possess the power of
temporary suspension. The position of vice principal necessarily im-
plies the investiture of authority commensurate with its duties. The
power to temporarily suspend a workman may well be exercised by a
fellow workman of a superior grade or class without destroying their
légal relation to each other. We are aware that the Circuit Court of
Appeals for the Sixth Circuit has announced a contrary view. Rail-
HBINZE T. BUTTE & BOSTON CONSOLIDATED MIN. OO. 337
road V. Henthorne, 73 Fed. 634, 19 C. C. A. 623. But we believe
that the conclusion which we hâve reached is in accord with the spirit
of the later décisions of the courts upon this subject. Attention is
called by counsel to the former opinion in this case. Weeks v. Scharer,
supra. It is apparent from a cursory reading of that opinion that this
court did not hold that the mère possession by a servant of the power to
suspend his fellow servants raised him to the position of a vice princi-
pal. The record then before the court did not présent such a question,
and the employment in the opinion of the term "suspend" was in con-
nection with a référence to the doctrine of a number of cases which were
therein cited ; that of Railroad v. Henthorne, supra, being among them.
Counsel for Weeks did not strictly comply with rule 11 of this
court (90 Fed. cxlvi, 31 C. C. A. cxlvi) in the assignment of the error
involved in the instruction complained of ; but in view of his manifest
purpose to challenge the correctness of that feature of the instruction
which relates to the power of the shift boss to suspend the other work-
men, and of the further provision of the same rule that the court may,
at its option, notice a plain error which is not assigned at ail, we hâve
deemed it proper to give due considération to their contention. We
are of the opinion that the instruction as given was erroneous.
The judgment of the Circuit Court will be reversed, and the cause
remanded for a new trial.
HBINZE et al. v. BUTTE & BOSTON CONSOLIDATED MIN. CO. et al.
(Circuit Court of Appeals, Ninth Circuit February 16, 1904.)
Nos. 958, 966.
1. APPEAI/— iNTERLOCUTOET OEDKES MADE IN RECEIVEESHnP.
Neither an order of a Circuit Court approving monthly reports of a
receîver, nor one directing him to pay expenses incurred by him, made
before the coming in of his final account, Is a final order, appealable to
the Circuit Court of Appeals; both being clearly Interlocutory orders,
directly and not collaterally conneeted with the receivershlp, and subject
to review on final settlement of the receiver's account.
Appeals from the Circuit Court of the United States for the District
of Montana.
On motions to dismiss appeals.
John J. McHatton, James M. Denny, and John W. Cotter, for ap-
pelants.
John F. Forbis and L. O. Evans, for Butte & Boston Consolidated
Min. Co.
H. J. Burleigh, for John S. Harris, receiver.
Before GILBERT, ROSS, and MORROW, Circuit Judges.
GILBERT, Circuit Judge. Two appeals are hère presented: An
appeal from the order of the Circuit Court directing the receiver, in
a suit fof partition, to pay to his attorney the sum of $350, as his com-
II 1. What decrees are final, see note to Brush Electric Co. v. Electric Imp.
Co. of San José, 2 C. C. A. 379.
129 F.— 22
338 129 FEDE3EAL REPORTER.
pensâtion for professional services rendered by him, and hîs expenses
incurred in representing the receiver before this court on the applica-
tion made by the appel lants for a writ of super sedeas or order to stay
the orders whereby the Circuit Court had appointed the receiver, and
had thereafter extended the receivership over the whole of the mining
property involved in the suit, with directions to operate the same ; and
an appeal from the order of said Circuit Court made on November
lo, 1902, allowing and confirming eight monthly reports of said re-
ceiver, said monthly reports being numbered 23 to 30 inclusive. Mo-
tions are made to dismiss thèse appeals on the ground that the orders
therein referred to were not final, and are therefore not appealable.
The appellants concède the gênerai rule to be that no appeal may
be taken to this court from an interlocutory order unless the order
is expressly made appealable by statute, but they contend that the or-
ders appealed from are not interlocutory, but final, for the reason that
they make final disposition of a portion of the funds in the hands of the
receiver — funds which are a portion of the subject of the controversy
between the parties to the partition suit.
It is true that the Suprême Court has recognized an exception to the
gênerai rule that an order made before the final disposition of a cause,
and before the final account of a receiver is filed, is not appealable, in
the case of Trustées v. Greenough, 105 U. S. 527, 26 L. Ed. Ii57._
That was an appeal from an order directing that the complainant in the
suit be paid out of the fund in the receiver's hands the costs, expenses,
and counsel fées incurred by him in a suit which he had brought against
the trustées of bonds issued by a corporation and secured by a trust
fund, to secure the due application of the trust fund and prevent the
waste thereof, the resuit of which suit was to bring the fund under the
control of the court for the common benefit of ail the bondholders.
The expenses and fées were not incurred by the receivership, but pre-
liminary thereto, and in preserving the trust fund from waste. The
court, not without apparent hésitation, sustained the appeal, on the
ground that the order was a final décision in a collatéral matter. Said
the court, "Though incidental to the cause, the inquiry was a collatéral
one, having a distinct and independent character, and received a final
décision." That ruling was followed in Hovey v. McDonald, 109 U. S.
150, 3 Sup. Ct. 136, 27 L. Ed. 888; Williams v. Morgan, m U. S.
684, 699, 4 Sup. Ct. 638, 28 h. Ed. 559; Tuttle v. Claflin, 88 Fed. 122,
31 C. C. A. 419; and Grant v. Los Angeles, etc., Ry. Co., 116 Cal.
71, 47 Pac. 872. But we find no décision holding that an appeal may
be taken from an interlocutory order confirming a receiver's report, or
directing the receiver to pay expenses incurred by him, before the
coming in of his final account, except the décision of the Suprême Court
of North Carolina in Battery Park Bank v. Western Carolina Bank,
36 S. E. 39, where the appeal was sustained, not upon any recognized
principle applying to appeals from interlocutory orders, but upon the
ground that such an order is in effect a final appropriation of a part of
the assets, and "no harm can come to any one interested in the suit by
regarding it as final." It is true that it is generally held that an order
confirming the final account of a receiver is appealable, notwithstanding
that no final disposition may hâve then been made of the suit wherein
HEINZE V. BUTTE <fe BOSTON CONSOLIDATED MIN. CO. 339
the receiver was appointed. Hinckley v. Railroad Ce, 94 U. S. 467,
24 L. Ed. 166; State V. District Court (Mont.) 72 Pac. 613. But the
riglit to appeal, even from such an order made prier to the final disposi-
tion of the action, has been denied in New York, where, owing to the
language of the Code of Civil Procédure of that state, which allowed
appeals from judgments or orders "finally determining actions or spé-
cial proceedings," it was held that an order confirming the final account
of a receiver was neither an order made in a spécial proceeding, nor
a judgment finally determining an action. People v. Am. L. & T.
Co., 150 N. Y. 117, 44 N. E. 949; N. Y. Security & T. Co. v. Sar-
atoga Cas & Elec. Co., 156 N. Y. 645, 51 N. E. 297. In California,
where the statute allowed appeal from a final judgment, it was held, in
a suit for the dissolution of a partnership, that an order made upon
objections and a hearing approving the final account of the receiver,
after the plaintiff had filed written notice of his abandonment of the
suit, but before the entry of a judgment of dismissal, was not appeal-
able, for the reason that it was an order made before judgment. Rochat
v. Gee, 91 Cal. 355, 27 Pac. 670. And in Illinois Trust & Savings Bank
V. Railroad Co., 99 Cal. 407, 33 Pac. 1132, where an appeal was taken
from an interlocutory order in a foreclosure suit, made after notice and
a hearing, making the indebtedness contracted by the receiver in an-
other suit a paramount lien on the funds in his hands, and directing its
payment out of the proceeds of the foreclosure sale, the appeal was dis-
missed for the reason that it was not a final judgment. In that case
the court, after referring to the protection to ail parties afïorded by the
Personal liability of the receiver and the sureties on his officiai bond,
said:
"To enforce this liability, the court may compel the receiver to account for
the funds that hâve corne Into his hands, and the order séttling his account
Is reviewable in this court, on appeal from the judgment If made before judg-
ment, or on appeal from the order if made after judgment."
In Free Gold Mining Co. v. Spiers, 135 Cal. 130, 67 Pac. 61, it was
held that an order directing the receiver of a mining property to pur-
chase a cyanide tailings plant in order to work a large body of valuable
tailings belonging to the property was not appealable.
The order approving the receiver's monthly accounts, which is the
subject of one of the appeals now under considération, was not an or-
der made upon a matter collatéral to the partition suit or to the re-
ceivership of the fund in controversy, nor do we think it was a final
judgment. The receiver, being an officer of the court appointed to
préserve and manage the property which was the subject of the suit,
in accordance with his duty as such officer, filed his monthly accounts
for the purpose of informing the parties litigant and the court of his
management of the property and his receipts and disbursements of the
fund, and for the further purpose of obtaining the sanction of the
court therefor. as well as for the allowance of his monthly compensa-
tion. Upon the report so filed an order was obtained expressing the
judgment of the court upon the matters so presented. Such an order
made during the progress of the receivership, and before the final ac-
count is, we think, clearly interlocutory. If such an order be held
appealable, it follows that every order directing the action of the
340 129 FEDERAL EEPOETEB.
receiver in the disbursement of any portion of the funds in his hands,
and each order approving his monthly accounts, may be made the sub-
ject of an appeal, and the matters involved in the receivership may be
brought into this court piecemeal. In a receivership such as this, ex-
tending over a long period of time, such a rule would involve burden-
some litigation. The order herein appealed from involves the approval
of eight monthly reports. It lias been followed by two later appeals
which are now pending in this court— an appeal from the order made
February 27, 1903, approving the 3ist, 32d, 33d, and 34th monthly re-
ports, and an appeal from the order of March 18, 1903, approving the
3Sth and 36th monthly reports. It would doubtless be succeeded by
other appeals if the présent appeal were sustained. Ail the matters
involved in the monthly reports may be reviewed by the Circuit Court
on présentation of the receiver's final account. That court still re-
tains and may then exercise the power to consider the whole subject of
the receivership, and may make such final order concerning the same
as shall seem just and reasonable in the light of the facts that shall
then hâve been disclosed. From such an order either party may appeal,
and thereupon may review the same, as well as ail the interlocutory
orders approving the monthly accounts. The act of Congress creating-
the Circuit Courts of Appeals confers upon this court appellate juris-
diction to review by appeal or writ of error "final décision" in the Cir-
cuit and District Courts in the classes of cases to which its appellate
jurisdiction extends. "If the judgment is not one that disposes of the
whole case on its merits, it is not final." Bostwick v. Brinkerhoft',
106 U. S. 3, I Sup. Ct 15, 27 L- Ed. 73. The foregoing considérations
apply also to the appeal from the order directing the payment of coun-
sel fées by the receiver. That was an order made in the receivership,
and concerning the conduct of the receiver. We are unable to see that
it stands on différent ground from the other appeal. It is true that,
if the money be paid to the receiver's attorney under the order of court,
it is a final disposition of the sum so paid. But the court thereafter
still had the receiver's account under its control. If the sum so paid
were improperly disbursed, the error in its payment may be reviewed
in adjusting the receiver's final account. It was not paid in a matter
collatéral to the suit or to the subject-matter thereof, but in a matter
relating solely to the receivership. The argument that the money
so paid is a final disposition of so much of the funds in the receiver's
hands applies with equal force to any item of the current expense ac-
count of the receiver. In each case the money paid is a final payment
out of the fund in the receiver's hands. But the liability of the receiver
and that of his bondsmen will stand for protection to the parties to
whom the fund in controversy rightfully belongs, and that protection
may be made available on adjustment of the final account of the re-
ceiver, or on appeal from the order allowing the same.
Both appeals will be dismissed.
CLARK V. KANSAS CITT, FT. 8, 4 M. E. 00, 341
CLARK V. KANSAS CITT, FT. S. & M. R. CO.
(Circuit Court of Appeals, Slxth Circuit May 6, 1904.)
No. 1,247.
L Railboads—Piees—Statutes— Application.
Sand. & H. Dig. Ark. § 7362, providing that any person wlio shall set
on iire any grass or other combustible material within lils inclosurea,
80 as to damage any other person, shall make satisfaction in single dam-
ages to the party injured, etc., bas no application to an action for the
destruction of a warehouse near a railroad right of way from tire set
out by members of a track crew on the riglit of way.
2. Same— Fbdbeal Cotjets— Contributory Négligence— BnRDEN or Proof.
In the fédéral courts the burden of proof of plaintlfC's contributory
négligence, alleged as a défense, is on the défendant
8. Same— Evidence.
Plaintlfï owned a warehouse near a railroad right of way, constructed
of planks, wlth an iron roof, and inelosed by a plcket fence. On a cer-
tain Sunday, certain track crews livlng in "camp cars," and stationed
near the warehouse, maintained Ares on the right of way during the
day for the purpose of washlng their clothes ; and during the forenoon
plaintlfC's agent called the attention of defendant's station agent to the
fires, and the danger to plalntiEC's property. One of the Ares was with-
in 40 feet of the warehouse, and another about 140 feet away, with the
wind blowing in the direction of the warehouse at a velocity of 15 miles
per hour. After the warehouse and fence had been elosed and locked
for the nlght, the building was set on lire by sparks and destroyed. Held,
that plaintlfC was not guilty of contributory négligence, as a matter of
law, precluding him from recovering agalnst the railroad company.
In Error to the Circuit Court of the United States for the Western
District of Tennessee.
Thls action was brought in the state circuit court of Shelby county, Tenn.,
and removed into the Circuit Court of the United States for the Western Dis-
trict of Tennessee. The object of the suit was to recover damages for the
destruction by tire of the cotton seed house or warehouse of plaintiff in error,
Bituated ou land adjolnlng the right of way of défendant in error at tiie sta-
tion and village of Clarketon, Ark. The flre occurred about 11 o'clock p. m.
Sunday nlght, January 13, 1901, resultlng in total destruction of the warehouse
and Its contents, it belng at the tlme full of cotton seed. The action proceed-
ed upon the ground that the building was set on flre by sparks negligently
BufCered to escape from Ares started and in use on the right of way of défend-
ant in error during the day time of January 13, 1901.
The facts whieh the évidence established and tended to show need only be
glven brlefly : A gang or crew of railroad hands in the service of défendant
in error, while remalning during Sunday on a slde track at sald station in
"camp cars," bullt and started fires on the right of way of the company for
the purpose of washlng thelr clothes, and maintained the Ares during the day.
The warehouse was constructed of plank, with an iron roof, and inelosed by a
picket fence, and the doors or gâtes to the house and picket fence were elosed
and locked on Sunday nlght at the time the building was set on flre. In pro-
cess of time, as a resuit of seasoning and shrinkage, small cracks were left
between the edges of the planks, through which flying sparks might pass and
come in contact wlth the contents of the building. One of thèse flres was as
close as 40 feet to the house, while another was about 140 feet away. The
wind was from the southwest, and in the direction of the warehouse from the
fires, and blowing with a velocity of 15 miles an hour. There had been no
flre in the warehouse or on the plaintlff's premises during the day. During
the forenoon of Sunday, agents of the plaintiff called the attention of the
Btation agent and also the tlmekeeper of the gang to the fact of the Ares,
■nd the danger to plaintifC's property in conséquence of the escaping sparks.
342 129 FBDEEAt REPORTEE.
The defendant's évidence only tended to show that the Ares were not so large
and the veloclty of the wlnd not so great as stated by witnesses for plalntiff,
and that the wlnd was not constantly in the direction of the warehouse. The
station agent Slagle, dénies any recollection of his attention being directed
to the Ares and tbe danger by either Madden or Willard, the agents of plain-
tifiC in error. Besides this, there was nothing material in the évidence, so
far as it is now important. No precautionary action was taken by either
party to guard agalnst the danger in relation to the fires, or the protection
of the building, beyond what we hâve stated.
At the conclusion of the whple of the évidence the court, on defendant's mo-
tion, directed a verdict In Its favor, on which judgment was entered, and the
case is brought hère on error for review.
Carroll, McKellar, Bnilington & Biggs, for plaintiff in error.
C. H. Trimble, for défendant in error.
Before LURTON and RICHARDS, Circuit Judges, and CLARK,
District Judge.
CLARK, District Judge, after making tlie foregoing statement,
delivered the opinion of the court.
The liability of the défendant, as determined under common-law
rules, is supposed to be changed or affected by statute, as.found in
the Code of Arkansas (section 7362, Sand. & H. Dig.), which is as
follows :
"If any person shall set on flre any grass or other combustible material
wlthln his enclosures, so as to damage any other person, such perscn shall
make satisfaction in single damages to the party injured, to be recovered by
civil action in any court having jurisdiction of the amount sued for ; but if
such person shall, before settlng ont the lire, notify thèse persons whose farms
are adjoinlng sald place which he proposes to burn, that he Is golng to flre
such grass or other combustible matter, and shall use ail due caution to pre-
vent such flre from getting ont, to the injury of any other person, he shall not
be Uable to pay damages, as provlded in this section."
It is quite clear, we think, that the statute is not applicable to a
case like the one with which we are hère dealing, and that the sub-
ject of this enactment may be dismissed, as the case is controlled in
its resuit entirely by common-law principles.
It is said in brief, and was stated in the argument at bar, that the
learned judge in the court below withdrew the case from the jury
under the view that the contributory négligence of the plaintifï's
agents was so conclusively shown as to require that this issue should
be treated as one of law, by peremptory instruction. We conclude
that this was error, on the facts disclosed in the record. It could
hardly be doubted, on this record, that the timekeeper and station
agent were both notified of the fîtes and the danger apprehended
for the distinct purpose of causing some précaution to be taken.
This was at the hour of g or 10 o'clock a. m. Sunday, and the fîre
occurred, as stated, about 11 o'clock at night. After thus giving
notice, what further act or duty were the plaintifï's agents required
to do? It is suggested that they should hâve gone on the premises
of défendant and cxtinguished the fire, but such a course of action
would or might hâve brought on difFiculty with the gang who were
using the fires. It is évident some difïiculty would be experienced
in pointing out just such spécifie affirmative action as was called
C3LARK V. KANSA8 CIXT, FT. S. & M. E. CO. 843
for, beyond what was donc, in order to exonerate plaintiff's agents
from the charge of contributory négligence. It is not controverted,
and could not be, that, apart from the origin of thèse fires and any
liability in that regard, whenever the fîres became a known fact and
a condition on the premises of the défendant, it was at once charged
by law with the obHgation to exercise reasonable care and caution
to prevent damage to adjacent property liable to be ignited by es-
caping sparks. In support of this proposition the cases of St. Louis
Southwestern R. R. Co. v. Ford, 65 Ark. 96, 45 S. W. 55, and Bail v.
Grand Trunk R. Co., 16 U. C. C. P. 252, may be referred to as in
point. See, also, the cases of St. Louis & San Francisco Ry. v.
Mathews, 165 U. S. 5, 17 Sup. Ct. 243, 41 L. Ed. 611; Milwaukee,
etc., Railway Co. v. Kellogg, 94 U. S. 469, 24 L. Ed. 256; and 13 A.
& E. Encycl. of L. (2d Ed.) p. 464, and cases collated.
In determining the questions of négligence and contributory nég-
ligence, the jury would necessarily consider distance, the character
of the exposure to the fîres, the hour of night, the direction and
velocity of the wind, the condition of the weather as to dryness or
moisture, and as being clear or cloudy. In short, every fact and cir-
cumstance constituting the entire situation would be given due and
proper attention. An important matter for considération would be
the précautions which either party could hâve easily or conveniently
adopted to guard against the apparent danger. À duty rested on
each party to exercise proper care. Such means and methods as
were readily and practically available to the agents of each party
should hâve been adopted, to the extent of exercising reasonable
care and prudence. Such précautions as a reasonably prudent man
would be expected to take under the given circumstances would be
the measure of care required by law. Thèse précautions should hâve
been taken by the défendant, in the first instance, to prevent the
émission of sparks liable to set on fîre buildings situated close by;
and, in the second place, like care should hâve been exercised by plain-
tif! to prevent the building from being ignited. Neither party was
required to resort to unreasonable or extremely difficult measures of
précaution. The plaintifï was not required to adopt unreasonable
methods of extrême difficulty to guard against a danger negligently
set up and maintained by the défendant on its own premises.
We are clear that, in view of ail the facts and circumstances, the
danger was not so threatening and immédiate as to require the court
to treat the alleged contributory négligence of the plaintifï as plainly
évident, and as a question of law. On the contrary, we think négli-
gence and contributory négligence were both issues of fact which
the court should hâve submitted to the jury for détermination. Dun-
lap V. Northeastern Railroad Co., 130 U. S. 64g, 9 Sup. Ct. 647, 32 L.
Ed. 1058; Mexican Cent. Ry. Co. v. Murray, 102 Fed. 264, 42 C. C.
A. 334; Delaware, etc., Railroad v. Converse, 139 U. S. 469, 11 Sup.
Ct. 569, 35 L. Ed. 213 ; Richmond & Danville Railroad v. Powers,
149 U. S. 43, 13 Sup. Ct. 748, 37 L. Ed. 642; Choctaw, Oklahoma,
etc., R. R. Co. v. McDade, 191 U. S. 64, 24 Sup. Ct. 24, 48 L. Ed. .
The burden of proof was, of course, upon the défendant to estab-
lish the fact of the plaintifï's contributory négligence, as in other
344 129 FEDERAL KEPORTEK.
cases. Strawboard Co. v. C. & A. R. R. Co., 177 111. 513, 53 N. E.
97; Northern Pac. R. Co. v. Lewis, 51 Fed. 658, 2 C. C. A. 446.
The judgrnent is accordingly reversed, and the case remanded,
with directions to set aside the verdict and award a new trial.
WESTERN UNION TELEGRAPH CO. v. SCHRIVBE et al.
(Circuit Court of Appeals, Elghth Circuit. March 16, 1904.)
No. 1,906.
1. Teleqbaphs— Fkaudulent Messages— Parties.
Plalntiffis, dealers in llve stock, were negotiatlng a sale of cattle to
B., and, pending the riegotiations, a fraudaient telegraph message, pur-
portlng to hâve been sent by the Bank of D., was received by tlie Com-
mercial Bank of B., alleged to hâve been plaintiffs' agent for the pur-
pose of receiving an assurance that B.'s check for the cattle would be
paid on présentation; statlng that the Bank of D. would honor B.'s
draft for a certain amount. The Commercial Bank exhibited the tele-
gram to plaintiffs, who, relylng on the genulneness thereof, accepted
B.'s check, and delivered the cattle. The eheck was not paid, B. proved
to be insolvent, and the transaction resulted in a loss to plaintiffs of
the entire value of the cattle. Held, in an action against the telegraph
Company for négligence in sending the same, an instruction based ou the
theory that It was permissible for the jury to say and to flnd that the
telegraph company was fairly charged by the language of the telegrani
with notice that some one other than the addressee was intendiiig to
act on the Information therein glven, and would be affected by it, so
as to take the telegram out of the well-recognized rule that a telegraph
Company cannot be liable to a stranger to the company and to the tele-
gram, was erroneous.
In Error to the Circuit Court of the United States for the Northern
District of lowa.
Asa F. Call (Geo. H. Fearons and Craig L,. Wright, on the brief), for
plaintiff in error.
D. M. Kelleher (John A. Senneff, M. F. Healy, T. D. Healy, L. M.
Shaw, and Jacob Sims, on the brief), for défendant in error.
Before SANBORN, THAYER, and VAN DEVANTER, Circuit
Judges.
VAN DEVANTER, Circuit Judge. Plaintififs in the Circuit Court,
défendants in error in this court, recovered a judgrnent against the tele-
graph company for $8,872, with interest, as damages occasioned to
them by the company's transmission and delivery of this telegram :
"Denison, lowa, March 14, 1902. To Commercial Bank, Britt, lowa : We
(vill honor Barnes draft for eight tbousand nine hundred seventy-two dollars.
[Signed] Bank of Denison."
Plaintifïs were dealers in live stock, and negotiated a sale of cattle
to one Barnes, who made payment therefor by a check drawn by him
on the Bank of Denison, and made payable to plaintiffs. The conten-
tion of plaintiffs was that the telegram was transmitted and delivered
without the authority or knowledge of the Bank of Denison ; that
"défendant company knew, or by the exercise of reasonable care and
WESTERN UNION TELEQBAPH CO. V. SCHBITEB. 345
caution would hâve known," this; that the Commercial Bank at Britt
was tlie agent of plaintififs for the purpose of receiving assurance that
Barnes' check would be paid upon présentation ; that, upon the deHvery
of the telegram by défendant to the Commercial Bank, it was exhibited
by the latter to plaintiffs, and, relying upon the telegram as genuine,
plaintiffs then accepted Barnes' check, and delivered the cattle to him;
that the check was not paid, Barnes proved to be insolvent, and the
transaction resulted in a loss to plaintiffs of the entire value of the
cattle. It was not claimed that défendant had any knowledge of the
transaction between Barnes and plaintiffs, or of the relation of the
Commercial Bank of Britt to plaintiffs, or that défendant had any
knowledge of the purpose of the telegram, otherwise than as its pur-
pose was disclosed upon its face. The transmission and delivery of
the telegram in the name of the Bank of Denison was procured by
Barnes, and the circumstances under which this was done were the sub-
ject of conflicting évidence. The company's charge for the message
was paid at the sending office, and not by the bank at Britt or by plain-
tiffs.
Différent rulings during the trial show that the court proceeded
tipon the view that it was permissible for the jury to say and find
that the telegraph company was fairly charged by the language of
the telegram with notice that some one other than the addressee, the
Commercial Bank, was intending to act upon the information therein
given, and would be affected by it, and, that if the jury placed this
construction upon the telegram, the case would be taken out of the
well-recognized rule, stated and applied by this court in McCornick v.
Western Union Telegraph Co., 25 C. C. A. 35, 39, 79 Fed. 499, 38 L. R.
A. 684, viz. : "But a telegraph company cannot be liable to a stranger
to the company and to the telegram — one to whom it has never deliv-
ered the message, and to whom it owes no duty whatever — merely be-
cause he has seen the telegram and acted upon it to his injury." The
court gave expression to this view in différent portions of the charge to
the jury, including the last paragraph, which was :
"In oi'der to entitle the plaintiffs to recover in this action, it must appear
that this dispatch, sent in the name of the BanU of Denison, was of such a
character as upon its face It showed that it dealt with money or property ;
that it was of such a character as that the telegraph company could be fairly
held to infer from the telegram that some person other than the Commercial
Banlv might be interested in it ; that in fact it was delivered by the telegraph
«ompany, and was delivered under circumstances charging the telegraph
company with a want of ordinary care in receiving it; and that it did not use
ordinary care to ascertain whether the Bank of Denison authorized the dis-
patch to be sent; and that the évidence shows that in fact the Bank of
Denison did not send this telegram, or authorize it to be sent; and that, as
a conséquence of actlng upon it, the plaintiffs parted with their property, and
bave been damaged in the value of the cattle."
This is complained of, and we think it was error. The language
of the telegram is clear, and is confined to a statement that the sender,
a bank, will honor Barnes' draft for a stated sum. This statement is
addressed to another bank, a part of the business of which is to ad-
vance money on checks or drafts drawn upon distant banks and others.
It is a matter of common knowledge that thèse advances are made
at times directly to the drawer, and at other times to the payée or
346 129 FBDEEAL EEPOETEB.
a remote holder, and that in each instance the bank advancing the
money is a principal in the transaction, incurs a risk to the extent of
the money advanced, and is influenced by its information respecting
the probability of payment by the drawee. The telegram could there-
fore properly and reasonably relate to a possible and probable trans-
action of concern to the addressee, and in which its action would be in-
fluenced by the information given, ail of which is apparent upon
reading the telegram. It is true that checks and drafts are, for pur-
poses of collection, freqnently committed by the payée or holder to
a bank under circumstances where the bank does not become the
owner, risks nothing upon the probability of payment by the drawee,
and is not influenced by information upon that subject; but this
telegram contains nothing which suggests that it relates to such a
transaction. In the absence of anything to the contrary, the infer-
ence to be properly drawn from the face of a telegram or other com-
munication of this nature is that it relates to a matter which concems
the one addressed, and that it is his action, and not that of another,
which is to be influenced. That no inference of its relation to a
transaction like that between plaintiflfs and Barnes properly or rea-
sonably arises from the face of this telegram is quite manifest when
it is considered that the telegram does not make the slightesl référ-
ence to any past or prospective sale of cattle or other property, or to
any person other than the addressee, the sender, and Barnes, or to
an absence of interest on the part of any one of them in the informa-
tion given. To say that the telegraph company "should hâve fairly
inferred" from the face of the telegram that some one other than the
addressee was "the real party in interest," as by one paragraph of
the court's charge the jury were permitted to say in this case, is to
reject the language used in the telegram, and the reasonable inference
therefrom, and to substitute in their stead surmise and conjecture. Of
course, this is not reasonable or permissible.
It is urged that the Commercial Bank of Britt, to which the tele-
gram was addressed and delivered, was in fact the agent of plaintiffs
for the purpose of receiving the information conveyed in the telegram,
and that therefore plaintiffs were not, in légal contemplation, strangers
to the company or to the telegram, but were the real parties in in-
terest, and, as undisclosed principals of the addressee, may maintain
this action, although there was no indication in the telegram that it
was intended for them, or that the addressee was only an agent. But
if the rule of law invoked in this contention be applicable to an ac-
tion such as this, as to which no opinion is now expressed, it does
not avoid the error already shown. It is so much of a departure
from the view disapproved by us, which controlled the course of the
trial, and under which the jury retumed the verdict which supports
the existing judgment, that to now apply it to the évidence for the
purpose of sustaining the verdict and judgment would be to take the
place of the trial court and jury, and to transcend the authority of an
appellate tribunal.
The judgment is reversed, with a direction to grant a new trial.
DENTEE & E. G. B, CO. V. ABRIGHI. S4T
DENVER & R. G. R. CO. v. ARRIGHI.
(Circuit Court of Appeals, Eighth Circuit. March 18, 1904.)
1, Mastee and Servant— Railkoads— Injuries to Seevant— Coupling Cabb
— StATUTES — ASSTJMPTION OF KiSK — CoXTEIBUTOEY NEGLIGENCE.
Act March 2, 1893, c. 196, § 8, 27 Stat. 532 [3 U. S. Comp. St. 1901, p.
3176], providing that any employé of any Interstate carrier who inay
be injured by any car used in Interstate traffic by reason of the same
net baving been equipped with an automatic coupler device coupling
by impact shall not be deemed to hâve assumed the risk thereby occa-
sioned, though continuing in the employaient of the carrier after the
unlawful use of the car had been brought to bis knowledge, did not re-
lieve an employé injured by a car not so equipped from liability for
his own contributory négligence.
2. Same— Evidence.
PlaintifiC, a skilled switchman, was injured whîle attempting to couple
two cars equipped with link and pin couplings, with whicb he was per-
fectly familiar. The englneer was under his direction at the time, and
backed the train so slowly that it barely moved. Plalntiff took hold of
the link of the approaching car with his left band to guide it, and, hav-
Ing done so, left his hand between the drawheads untll his Angers were
crushed by the impact. Held, that under the particular facts appearing
in the case the plaintiff was guilty of contributory négligence as a matter
of law.
In Error to the Circuit Court of the United States for the Dis-
trict of Colorado.
Arrighl, the plaintiff below, was a switchman in the service of the railroad
Company in its yards at Salida, Colo. The railroad company was a common
carrier engaged in interstate commerce as well as in commerce within the
State. On the evening of November 19, 1901, Arrighi was injured while en-
deavoring to effect a coupling of two narrow-gauge freight cars, one of which
was at the time employed in moving interstate tralBc. Neither car was equip-
ped with couplers coupling automatically by impact. The drawbars of eaeh
were equipped with old-style link and pin couplings. It therefore became nec-
essary for Arrighi to go between the ends of the cars in the performance of
his duty. In making the coupling his left hand was crushed between the
drawheads, resulting in the loss of the first three Angers thereof and the cor-
responding metacarpal bones. He brought suit against the railroad company,
and at the trial rested his right to recover solely upon the failure of the de-
fendant to comply with the provisions of the act of Congress of March 2, 1893.
c. 196 (27 Stat. 531 [U. S. Comp. St. 1901, p. 3174]), requiring the equipment
of cars used in moving interstate traffic with couplers operating automatic-
ally. He reeovered a judgment for $10,000, and the défendant prosecuted a
writ of error from this court.
Wm. W. Field (Wolcott, Vaile & Waterman and E. N. Clark, on
the brief), for plaintiff in error.
Harvey Riddell (William L. Dayton, on the brief), for défendant
in error.
Before SANBORN, VAN DEVANTER, and HOOK, Circuit
Judges.
HOOK, Circuit Judge, after stating the case as above, delivered
the opinion of the court.
The trial court denied a request of the défendant that the jury be
instructed to return a verdict in its favor for the reason that the
If 1. Assumption of risk incident to employment, see note to Chesapeake &
O. R. Co. V. Hennessey, 38 C. C. A. 314.
818 129 FBDBIRAL BEFORXEB.
plaintiff was guilty of négligence contributing to hîs injury. The
action of the court in that respect is assigned as error. Prior to the
time when the act of Congress became fuUy operative, the employés
of a railroad company subject to its provisions, engaged in coupling
cars used in moving interstate trafHc, but not equipped with auto-
matic couplers, assumed the ordinary risks and hazards of that em-
ployment, and the company was not Hable to them for injuries re-
sulting therefrom. The common-Iaw doctrine of the assumption
of risk was then applicable. But a new rule is prescribed by the
act. It specifically provides that the employés shall no longer rest
under the burden of that assumption in respect of any car used con-
trary to its provisions. While this is true, the railroad company
is not thereby deprived of the défense of contributory négligence.
With an exception, unnecessary to be noted hère, the risks and dan-
gers of an employment which at common law are assumed by the
employé are not those which arise from the négligence of either
party. And when the burden of those assumed risks and dangers
were lifted from the employé by statutory enactment, and cast upon
the railroad company, tlîere was not transferred therewith a respon-
sibility for the négligence of the employé himself. The rationale
of the doctrine of assumption of risk is not that which supports the
rule of contributory négligence. They operate differently, and are
dépendent upon widely différent principles. Railroad Company v.
McDade, 24 Sup. Ct. 24, 48 L. Ed. 9 G; St. Louis Cordage Com-
pany V. Miller (C. C. A.) 126 Féd. 495. It cannot be assumed that
by the passage of a salutary law designed for the protection of those
engaged in a hazardous occupation Congress intended to offer a
premium for carelessness, or to grant immunity from the consé-
quences of négligence. The reasonable conclusion is that the dé-
fense of contributory négligence is as available to a railroad company
after as before the passage of the act of Congress, although it bas
not complied with its requirements.
The undisputed facts in this case are as follows: The plaintiff
was a skillful workman in bis calling, having had about 11 years'
expérience in railroading. He was thoroughly acquainted with the
old-style link and pin couplings and the method of operating them.
He knew that the cars which he sought to couple were so equipped.
There was no defect in the couplings which contributed to the acci-
dent. The engine which was moving the car up to make the coup-
ling was being directed by him, and they came up so slowly as to
to be barely moving. Not a single fact, circumstance, or condition
appeared in connection with the cars, their surroundings, equipment,
or opération which was exceptional, or which seemed in any way
to contribute to the accident. The plaintifif adopted the most dan-
gerous method of performing his duty. He took hold of'the Hnk
of the approaching car with his left hand to guide and direct it, and,
having donc so, he simply left his hand between the drawheads un-
til his fingers were crushed by the impact. His attention was not
momentarily distracted ; the moving car did not approach more
rapidly than he calculated ; he did not stumble or lose his balance,
nor was he unable to see clearly; he was not unfamiliar in any de-
GILL V. GENERAL ELECTEIO CO. 349
grée with the character of the appliances about which he was en-
gagée!; and it does not even appear that he endeavored to remove
his hand. In fact, if the plaintiff had declared that he made no ef-
fort to remove his hand from between the drawheads, he would not
hâve added much to the force of the facts and circumstances shown
by the record. The plaintiff himself was the principal witness in his
own behalf, and the conditions which we hâve recited were shown
almost wholly by his own testimony. The conclusion is irrésistible
that the plaintiff's injury was caused by his own want of proper
care, and was not the resuit of the ordinary and usual risks and dan-
gers of his employment. Bearing in mind the limitations upon the
power of the trial court in respect of the défense of contributory
négligence, we are nevertheless of the opinion that upon the évi-
dence then before it the instruction requested should hâve been given.
The judgment of the Circuit Court is reversed, and the cause re-
manded for a new trial.
GILL et al. v. GENERAL ELECTRIC CO.
(Circuit Court of Appeals, Third Circuit. May 2, 1904.)
No. 26.
1, CoNTBACTs— Execution— Pebsons Liable— Signatuee— Effect.
Where the acceptance of an ofifer to sell certain machinery was signed
"G. & Co., by S. S. G.," by the other member of the firm, and by W. B.
G. Indivldually, the latter rendered himself liable aa a joint contractor,
and not merely as a guarantor.
2. Same.
Where an acceptance of a proposai for the sale of machlnery was
signed "G. & Co., by S. S. G., W. B. G., and T. H. G.," the word "by"
after the partnership name was limited to the partner first slgnlng, and
did not authorize an inference that the signature of W. B. G., who
was not a member of the firm, was made only as one of the three agents
of the firm.
8. Same.
Where an offer for the sale of machlnery was made to G. & Co. "(for
the N. Umbrella Co.)," and an acceptance of the ofCer was signed by
G. & Co. and by one not a member of such flrm, such signature bound
the slgners personally, and not as agents of the umbrella company.
4. Same — Weitten Instbuments— Parol Evioenoe.
Where a séries of wrltings was intended to embody an entlre contract,
from which it appeared that one of the défendants was a joint con-
tractor, paroi extraneous évidence was Inadmissible to vary or annul
his connection therewith.
In Error to the Circuit Court of the United States for the Eastern
District of Pennsylvania.
For opinion below, see 127 Fed. 241.
David Lewis, for plaintiffs in error.
H. B. Gill, for défendant in error.
Before ACHESON, DALLAS, and GRAY, Circuit Judges.
1 4. See Evidence, vol. 20, Cent Dig. S 1906.
350 129 FEDERAL REPORTER.
DALLAS, Circuit Judge. This was an action by the General Elec-
tric Company against Sidney S. Gill, William B. Gill, and T. Harvey
Gill, to recover a balance due for electrical apparatus supplied and set
up under and in pursuance of a certain proposai, acceptance, and ap-
proval in writing. The proposai, dated May 29, 1902, was made by
the electric company, and was thus addressed :
"To Messrs Gill & Co. (for the National Umbrella Co.)
"(Hereinafter called the purchaser.)
"Address 1000 Ohestnut St., Phlladelphia, Pa."
It contained this clause :
"The foregoing proposai is subject to the approval of • ♦ * the Man-
ager of its (the Electric Company's) Phlladelphia Office."
The acceptance was as follows :
"To General Electric Company: ïour proposai as above is hereby accept-
ed this 4th day of June, 1902.
"Gill & C!ompany,
"By Sydney S. Gill,
"W. B. Gill,
"T. Harvey Gill."
The approval was in thèse words:
"Approved, Phlladelphia, June 16, 1902.
"General Electric Company
"By E. D. Mullen,
"Manager, Phila. Office."
Sydney S. Gill and T. Harvey Gill made no défense, and judgment
was entered against them by default. As to William B. Gill the case
went to trial, and the court below directed a verdict against him for
an agreed amount. It is averred that this direction was erroneous,
because, as is contended, W^illiam B. Gill was not liable under the
contract sued upon. We cannot sustain this contention. It is true
that he was not a partner in the firm of Gill & Co., to whom the
proposai was addressed, but it is also true that he united with the
members of that firm in accepting it. The paper which he signed is
unambiguous and explicit, and it is impossible to ascribe any other
significance to his signature. It must therefore be assumed that the
approval by which the contract was completed was given upon the
mutual understanding that ail those who had executed the acceptance
would be bound by it. This is the only construction, if construction
it may be called, of which the acceptance is susceptible, and there
is nothing in the proposai which calls for its rejection. The fact
that Sydney S. Gill and T. Harvey Gill constituted the firm of Gill
& Co., to whom the proposai was addressed, is unimportant. As be-
tween themselves, thèse two may hâve regarded the transaction as a
partnership one, but, as to the electric company, the position of the
three accepting persons was simply that of joint contractors.
Looking only at the signatures to the acceptance, independently
of the oral évidence which was referred to by the court below, we
concur in its opinion that the word "by" after the partnership name,
applies to Sydney, and to him alone. It cannot be supposed that this
name was actually written by more than one person, and it could
not hâve been written by authority of William B. Gill, for he not only
concèdes, but insists, that he was not a partner. Therefore the con-
OILL V. OENEBÀL EL£CIBIC OO. 351
tention that he sîgned merely as one of three agents of the partner-
ship of Gill & Co. appears to be baseless ; and tbe alternative sugges-
tion that he and the others signed, not for themselves, but as agents
of the National Umbrella Company, is likewise inadmissible. Tbe
language of the writing is, "Your proposai as above is hereby ac-
cepted." Accepted by whom? Of course, by the signers; and
neither in the paper itself nor in the signature of William B. Gill is
there any intimation of agency. It is argued, however, that it should
be understood that he signed for the umbrella company, because the
proposai was addressed to "Gill & Co. (for the National Umbrella
Co.)," and contained some provisions apparently intended for the
benefit of the last-named company. But, waiving the question wheth-
er this peculiar form of address and thèse provisions should be un-
derstood to import that the proposai was originally made to Gill &
Co. as agents of the umbrella company, the fact is patent that Wil-
liam B. Gill was not addressed at ail. His liability resulted from his
joinder in the acceptance of the subsequently approved proposai, no
matter how or to whom it was addressed; for by that act he made
himself a party to the contract, although he may hâve had no con-
nection whatever with the negotiations which preceded it. Leith v.
Bush, 6i Pa. 395; Knisley v. Shenberger, y Watts, 193; Clark v.
Rawson, 2 Denio, 135 ; Staples v. Wheeler, 38 Me. 372; Thompson v.
Coffman, 15 Or. 631, 16 Pac. 713.
Inasmuch as the séries of writings which hâve been considered
were obviously designed to embody the entire contract, and as from
them alone it appears that William B. Gill was a party to it, it would
be difïïcult to maintain that in a court of law any extraneous évi-
dence could change it, or could vary or annul his connection with
it. Shankland v. City of Washington, 5 Pet. 393, 8 L. Ed. 166. But,
even if it were otherwise, the évidence dehors the writings would not
hâve warranted a finding that William B. Gill had not personally
and directly assumed the responsibility they imposed. There was
testimony that "a form of guarantee * * * fiUed out for William
B. Gill to sign as security," was given by a représentative of the elec-
tric company to Sydney S. Gill, but the undisputed évidence is that,
instead of executing that paper, William B. Gill signed the accept-
ance, and that thereafter the electric company's approval, which had
previously been withheld, was given. The contention of the plaintiffs
in error that from thèse facts the jury should hâve been permitted
to infer that "it was the intention of the parties, as to William B.
Gill's signature, to hâve treated him as a guarantor, not as a princi-
pal," is, we think, manifestly unsound. Such an inference would not
only hâve conflicted with the plain meaning of the instrument which
he actually signed, but could not hâve been rationally deduced from
the évidence as a whole. In our opinion, the only reasonable, and
therefore the only permissible inference from it, is that which was
drawn by the learned trial judge : "W. B. Gill signed the acceptance,
instead of the separate guaranty that had been sent for his signature,
because he intended to bind himself for the fulfillment of the con-
tract, in response to Mr. Mullen's demand, and it was simpler to hâve
one paper than two."
3S2 129 FEDERAL EEPOBTBR.
Upon any possible view of the case, therefore, the binding direction
which was given was proper, and the judgment, which was subse-
quently entered upon the verdict that was rendered in conformity with
that direction, is accordingly affirmed.
VAN INGEN et al. v. SCHOPHOFEN.
(Circuit Court of Appeals, EIghth Circuit March 26, 1904.)
No. 1,940.
1. Bankeuptct— Discharge— Objections^Failuee to Keep Bocks.
A bankrupt's discharge can be prevented under Bankr. Act July 1, 1898,
c. 541, § 14b, 30 Stat. 550 [U. S. Comp. St. 1901, p. 3428], for his failure
to keep bocks of accounts or records showing his true financial condition
wlth intent to defraud, etc., only on proof that bis failure to keep such
books was with a frauduJent intent to thereby conceal his flnancial condi-
tion, and also in contemplation of bankruptcy.
2. Same— Evidence.
Where a bankrupt's discharge was sought to be prevented on the ground
that he had failed to keep books showing his true flnancial condition^
etc., but the only proof of his intent was his statement that his failure
to enter certain loans was induced by fear that, if the objectlng créditer
knew that he got money outsidé, such créditer would close hlm up, and
that he thought that he could work along from season to season and pay
his debts, such évidence did not .iustify a presumption that his failure
to keep proper accounts was induced by contemplated bankruptcy.
Appeal' from the District Court of the United States for the Western
District of Missouri.
This Is an appeal by a créditer from an order granting a discharge to a
bankrupt On June 19, 1902, Schophofen was adjudged a bankrupt upon
the pétition of Van Ingen & Co., one of his creditors. His discharge, which
was applied for in due course, was opposed by the créditer, the spécification
of objection being that the "bankrupt, with fraudulent intent to conceal his
true flnancial condition, and in contemplation of bankruptcy, failed to keep
books of account or records from which his true condition might be ascer-
tained, in this : that in the schedule of liabilities flled by sald bankrupt
* * * he scheduled an indebtedness of one thousand dollars to Freder-
icka Schophofen (his wife), and six hundred thirty-five dollars to Joseph
Sach Rowltz, but failed to keep any books or records of any kind whatever
showing said Indebtedness, or anything whatever relating to the same ; that
he failed to keep any eashbook or record of the amount of cash received by
said bankrupt, and failed to keep any books or records showing the amount
of profit made by said bankrupt In his business." At the hearing before
the référée the bankrupt was the only wituess offered by the objectlng créd-
iter. There was no évidence tending to show that the failure to keep a cash-
bock or record of profits was with fraudulent intent, or in contemplation of
bankruptcy ; but when the bankrupt was asked by counsel why he had not
made entries showing the Indebtedness to his wifè and to Rowitz upon the
Imperfect record which he styled his ledger the bankrupt answered: "Be-
cause I thought that if your client [Van Ingen & Oo.] saw that we had to get
money outslde to run the shop he would close us up. I thought that I could
work along from season to season ; that business would get better, and I could
pay up." Upon this state of facts the référée reeommended the discharge of
the bankrupt, and it was accordingly granted by the District Court.
Samuel Feller (Karnes, New & Krauthoff, on the brief), for ap-
pellants.
Wilhelm Heidelberger Q. H. Bremermann, on the brief), for ap-
pellee.
VAN iNGEN T. 80HOPHOFBN. 388
Before SANBORN, THAYER, and HOOK, Circuit Judges.
HOOK, Circuit Judge, after stating tiie case as above, delivered the
opinion of tlie court.
To defeat the discharge of the bankrupt the appellant relies upon
section 14b of the bankrupt act of July i, 1898, c. 541, 30 Stat. 550
[U. S. Comp. St. 1901, p. 3428], the pertinent provision of which
is that the bankrupt shall be discharged unless he has "with fraudu-
lent intent to conceal his true financial condition and in contemplation
of bankruptcy * * * failed to keep books of account or records
from which his true condition might be ascertained." Two conditions
must accompany and give character to the failure of the bankrupt to
keep the requisite books of account or records in order to justify its
use as a bar to his discharge. In connection with such failure there
must be présent in his mind not only a fraudulent intent to thereby
conceal his true financial condition, but also a contemplation of pro-
ceedings in bankruptcy. The existence of the former without the lat-
ter is insufficient. The case before us turns upon the fact that the
ledger of the bankrupt, the only record kept by him, did not show the
indebtedness to two of his creditors, the inquiry as to the purpose of
the omission, and his answer. He admitted that his intent was to
prevent the appellant, his principal créditer, from ascertaining that he
had secured financial assistance from others, and by fair inference from
this admission it may be assumed that the first condition operating to
prevent his discharge was proven. But was his failure to exhibit such
indebtedness upon his books in contemplation of bankruptcy? The
bankrupt testified that he thought he could work along from season
to season ; that business would get better, and that he could pay up.
This testimony affirmatively négatives the contention that he was then
contemplating bankruptcy. The appellant claims in this connection
that the bankrupt was in a state of hopeless insolvency, and that, there-
fore, it may be presumed that he had in contemplation the necessary
end and conséquence of that condition. But, assuming that such a
presumption may be utilized in a case of this character, it is sufficient
to say that the record does not supply the fact from which it is drawn.
It does not appear that the bankrupt was hopelessly insolvent. The
items and the gross amount of his indebtedness appear in the record,
but the amount or value of his assets is not shown. For aught that
appears, the hope of the bankrupt to ultimately pay ail of the claims
of his creditors may hâve been fairly justified by his business pros-
pects and the amount of his assets. At any rate, we cannot assume a
condition not shown by the record, and then predicate thereon a pre-
sumption to supply a reason for reversing the order of the trial court.
As bearing upon the question whether the bankrupt had in contempla-
tion proceedings in bankruptcy, it should be observed that he did not
voluntarily seek the benefit of the provisions of the act, but that, on
the contrary, the proceeding was an involuntary one, and was instituted
by the appellant as petitioning creditor. Radical changes were made
in the provisions of the act of 1898 concerning the discharge of bank-
rupts by the amendatory act of February 5, 1903 (32 Stat. 797 [U. S.
Comp. St. Supp. 1903, p. 410]), and among them was the élimination
129 F.— 23
35é; .129 FElDEiRÀL BBFOBTBB.
of the requîremçnt that the failure to keep books of account from
which the bankrupt's financial condition might be ascertained _must,
in brder to operate as a bar to his discharge, be in contemplation of
bankruptcy. But the case in hand is controlled by the provisions of
the original act.
The order of the District Court will be afSrmed.
TERRY et al. v. JOHNSTON, Sheriff, et al.
(Circuit Court of Appeals, Fifth Circuit February 9, 1904.)
No. 1,265.
1. Execution— Levy—Redeliveby Bond— Judgment— Enfoecement— Injttnc-
TION.
Where a surety on a forthcoming bond made no objection to the sala
of bis property under an exécution on a judgment on the bond, other
sureties and the principal, who had become a bankrupt, were not entltled
to enjoin such sale.
Appeal from the District Court of the United States for the West-
ern District of Louisiana.
I. C. Terry, for appellants. :
Frank P. Stubbs and Frank P. Stubbs, Jr., for appellees.
Before McCORMICK and SHELBY, Circuit Judges.
McCORMICK, Circuit Judge. The appellants exhibited in the
District Court a bill for injunction. After notice, the matter came
on for hearing, and the défendants submitted a gênerai demurrer to
the bill, which the court sustained, dissolved the restraining order,
and denied the application for injunction, at the cost of the appli-
cants.
The bill shows that there existed in the Sixth judicial district court
of Louisiana, Ouachita parish, a judgment against I. B. Kidd in
favor of one Julius Lemle, for $401, with interest thereon from Oc-
tober 5, 1895, at 8 per cent, per annum, to satisfy which an exécu-
tion was issued and levied upon the property of the défendant in the
judgment. After this levy the défendant in the judgment appeared
before the sherifï, and, with accepted sureties, gave a delivery bond,
by the terms of which the défendant agreed to return the property
to the sheriff whenever the same should be demanded and offered
for sale to satisfy that exécution, and, in event of failure to return
the property as conditioned, then the sureties on the bond should
become liable therefor. There appears to hâve been some inter-
ruption in the proceedings in the state court, and to hâve been a
new advertisement of the property for sale to take place on May
4, 1901. Before that day arrived the défendant in the judgment
presented to the bankrupt court for that district his pétition, asking
to be adjudicated a voluntary bankrupt, which was done; and on
the sale day, instead of producing the property according to the
terms of the delivery bond, he advised the sheriff that so much of
the property as was still in existence was in the possession of a keeper
BEMBEET EOLLER 0OMPEES3 CO. V. AMEEIOAN COTTON 00. S55
appointed by the référée in bankruptcy in behalf of the United
States marshal, and therefore could not be delivered. To this no-
tice the sherifï paid no attention, but at the appointed time and
hour called for the property to be sold, and, on its not being de-
livered, declared the forthcoming bond forfeited, on which there
was duly entered judgraent against the sureties, and to enforce which
process was issued and levied on the property of D. A. Breard,
Sr., one of the sureties on the forthcoming bond. The property
seized was advertised for sale to take place June 14, 1902. The
surety whose property was seized took no action, but on the I3th
of May, 1902, I. B. Kidd, défendant in the judgment, and who had
been adjudged a bankrupt; George C. Terry and I. C. Terry, hus-
band of George C. Terry, who joined therein with his wife, George
C. Terry; John Kidd and Laura Kidd, creditors of the bankrupt
(said George C. Terry being also one of the sureties on the forth-
coming bond) — instituted this proceeding and obtained a restraining
order against the sherifï selling the property of the other surety,
D. A. Breard, Sr.
It is not necessary to specify ail of the errors assigned. The
fîrst is that the decree is inéquitable, and the second, "that by the
order of dissolution of said injunction said court practically permits
a grave injustice to be done to the above creditors." The court
of bankruptcy, it appears, was not able to see how seizure of a stran-
ger's property to satisfy an admitted debt of a bankrupt could harm
the bankrupt or his creditors, or why, if the party whose property
was seized did not complain, others should be heard to do so. It
is clear to us that the demurrer to the bill is well taken.
The judgment of the District Court is therefore affirmed.
KEMBERT ROLLER COMPRESS CO. v. AMERICAN COTTON CO. et al.
(Circuit Court of Appeals, Pifth Circuit. March 29, 1904.)
No. 1,289.
1. Pate.xts— Infbingement— Method op Baling Cotton.
The Rembert patent, No. 441,022, is for a method of baling cotton by
whicb It Is ginned, condensed, and baled into standard compressed baies
ready for shipment In one continuons opération. The method conslsts In
passing the cotton In a sheet after it leaves the condenser between rolls,
the sheet being then folded to the proper size for a baie, and the air be-
tween the layers pressed out by an ordlnary press. The theory of the
patentée, as stated in his application and amendments thereto, Is that,
when cotton Is subjected to a pressure just short of that which wlll Injure
the fiber, It for a time loses its elasticity, and the sheets wlll therefore
remain in the same compressed condition In which they leave the rolls
until they can be baled. Reld that, In vIew of the prier art and the pro-
ceedings in the Patent Office, the patent niust be restricted to a method
which dépends for its successful opération upon the utilizatlon of such
theory, there having been prlor patents for mechanism for compressing
cotton in layers ; that, as so restricted, the method as shown by the évi-
dence lacks utillty; and that, if conceded validlty, the patent Is not In-
frlnged by the use of the mechanism of the Graves patent, No. 473,144,
by which the cotton, after being compressed In sheets, Is kept under con-
tinuons pressure until the sheet has been roUed Into a baie.
856 129 FEDERAL BEFOEIEB.
Appeal from the Circuit Court o£ the United States for the Southern
District of Texas.
A bill was filed In the Circuit Court for the Eastern District of Texas by
the Rembert Relier Compress Company, a Texas corporation, against the
American Cotton Company, a New Jersey corporation, having its principal
office in the state and city of New Yorli, and doing business in the Eastern
District of Texas under a permit from the state of Texas, and against the
Wharton Gin & Milling Company, a Texas corporation, having its place of
business in the Eastern District of Texas (it being alleged that the Wharton
Gin & Milling Company Is the agent of the American Cotton Company, con-
ductlng In part the business of the American Cotton Company in the county
and town of Wharton, in the Eastern District of Texas), and against K. H.
Houston, président of the Wharton Gin & Milling Co. The purpose of the
bill is to restrain the défendants from Infringing letters patent No. 441,022,
issued to Henry Rembert on the 18th day of November, 1890, and assigned
by said Rembert to the Rembert Roller Compress Company. The patent set up
in the bill Is a process patent. The object of the method so patented is to gin,
condense, and baie cotton in one continuons opération, and so efCectualIy to
reduce the size of the resulting baie of cotton in the first original initial
process as to make it of suitable dimensions and density for market, or for
transportatlon by rail or sea to final destination. This patent contains a
description of an apparatus which the patentée says is considered "best
adapted for carrying eut the patented process under certain conditions meu-
tioned In connection with the apparatus," but "it is to be distlnctly under-
stood that this apparatus is not the essence of the présent invention," and
that the method herein clalmed may be carried into efCect by varions other
mechanisms, which will suggest themselves to the skilled méchante as équiva-
lents of the one described. The précise claim of the complainant as to this
process patent can be gathered from an extract from the bill, as foUows :
"Heretofore the usual method of handling and ballng cotton practiced in
the Southern States has been as follows : The cotton fiber, when it comes
from the fleld of production, is first passed through the gin and the con-
denser, and from the latter It is carried to an ordinary 'country' or 'plan-
tation' press, where it is pressed and baled. The baies formed by thèse 'plan-
tation presses,' as tliey are termed, are very large and bulky, and therefore
require considérable space for storage, and greatly increase the cost of
transportation. The baies, after belng formed, are then transported to a
compress located at some concentrating point, where they are subjected to
a very heavy pressure, sufflcient to reduce their slze and increase their
density to the required 'standard' flxed by the railroad companies, boards
of trade, and others, after which they are ready for shipment, by rail or
otherwise, to the manufacturers. This method of handling and baling the
cotton had many disadvantages and drawbacks. In the flrst place, the usual
method of handling the loose cotton in the ginnery establishment, previous
to being baled, causes the atmosphère of the building to be completely filled
with floating fiber flnely comminuted, which dust not only stifles and Inter-
fères with the attendants, but also greatly increases the danger and risk of
a conflagration, and thereby increases the cost of the fire Insurance. It also
nécessitâtes the employment of a number of attendants, which materially
lessens the profits of the producer. The baies, when they come from the
first pressing opération, are necessarlly large and bulky, and low in density,
inasmuch as the ordinary plantation or country presses are not adapted for
heavy pressing, and for that reason are not only difficult to handle and re-
quire a large storing space for their keeping, but also greatly Increase the cost
of- transportation from the ginning establishment to the compress, which is
often located a long distance from the ginning point; but probably the most
serions drawback attendant upon the use of the foregoing manner of handling
cotton is the great cost of building and maintaining the powerful hydraulic
and steam compresses required for compressing the baies before they are
shippèd to the manufacturer, and the expense to which the producer is put
in having the baies thus compressed. To reduce the baies to the standard
Bize and density required by the trade, thèse presses are necessarlly large
EEMBEKT EOLLEK COMPEESS CO. V. AMEEICAN OOTTON OO. 357
and expensive, not only in building but in maintaining them in opération,
as is évident By this Invention of Henry Rembert are obviated the main
difflculties in the manner of handling and baling cotton heretofore in vogue,
and substitute tlierefor a simple and inexpensive metliod, that may be carried
out in tlie ginning establisliment without the employment of costly labor and
powerful compresses, and by means of whieh the cotton is not subjected to
unnecessary handling or exposure, but by a continuous process is formed into
baies of a size and density that will equal the standard compressed baies.
This method may be carried out and operated by means of the same power
that opérâtes the ginning mechanism, and from this fact it dérives one of its
chief advantages."
The bill then States the claims made by Henry Rembert in bis patent, vi^hich
are as follows :
"(1) The method of baling cotton, which consista in compressing the same
progressively, accumulating the compressed flber previous to its expansion
in the form of a baie, applying the pressure to expel the air, and flnally tying
the baie, substantially as specifled.
"(2) The method of baling cotton, consisting In compressing the same in the
form of a continuous sheet, lapping said sheet before it has had time to
expand in the form of a baie, and subsequently applying pressure to expel
the air from between the layers, substantially as specifled.
"(3) The method of baling cotton, which consists in condensing the same in
the form of a continuous soft bat, compressing the same progressively, ac-
cumulating the compressed fîber previous to its expansion in the form of a
baie, applying pressure to expel the air, and finally tying the baie, substan-
tially as specifled."
The allégations of the bill show that exactly what Henry Rembert claims
to hâve discovered was that the elasticity, or tendency to expand, in cotton,
can be suspended for an interval ; that cotton can be compressed to a point
just short of crushing and injuriug the fiber, so that it will retain its density,
when so compressed in détail, that it can be baled, and, when so baled, be
a compressed baie. It is claimed that Hem-y Rembert found a bat of cotton
which had been run over by a train on a railroad track, and discovered that,
while the wheel passing over the cotton on top of the rail crushed the liber,
the flanges of the wheel compressed a part of the bat to a point just short
of injuring the fiber, and then or thereafter resulted hls Intellectual concep-
tion of the use of the dlscovery, which it is said he then made. The prac-
tical use of this alleged dlscovery was, as shown by the extract from the bill,
to compress finally at the gin, and thereby obviate the expense and trouble
of making the old-fashioned plantation haie of cotton at the gin, and then
transporting it to the compress, and having It there compressed, so as to be
of sufficient density for commercial use for shipping by rail and by sea. The
bill then allèges infringement on the part of the American Cotton Company
and the Wharton Gin & Milling Company, and prays for an injunction and
accounting.
There was a demurrer to the bill, which demnrrer was overruled, and the
bill was anawered by the American Cotton Company and the Wharton Gin
& Milling Company. In the answer the défendants admit the issuance of
the letters patent to Henry Rembert for an alleged method of invention of
baling cotton, but deny that he is the original and flrst inventer of the al-
leged method or invention as set forth in his bill. It is also admitted that
the letters patent and the invention set forth thereln hâve relation to an
alleged method of baling cotton, and that said alleged method is adapted to
be practiced at the point of ginning, to form a continuous process of ginning ;
but it is stated that défendants are not informed, save by complainant's bill,
that the object of said alleged method is to gin, condense, ànd baie the cot-
ton in one continuous opération, and so effectually to reduce the size of the
resulting baie of cotton in this flrst original initial process as to make it of
suitable dimensions and density for market or transportation by rail or ses-
to final destination, and they therefore deny the allégation in the bill in this
behalf, and leave the complainant to make proof thereof. The défendants
deny the alleged dlscovery of a "law of nature," and they deny that the
elasticity of cotton ean be suspended, and utmost density short of crushing
358 129 FEDERAL REPORTEE.
its flber obtained in détail, before baling. They also deny that the letters
patent In suit embraee the conception of a new property in cotton, by which
it remaius compressed, and so retains its density when compressed in détail.
They also deny that, when cotton is compressed as set forth in sald letters
patent, It can be baled, and, when baled, Is a compressed baie. They also
deny that the alleged Invention of Rembert obvlated the main difflculties in
the manner of handling and baling cotton in vogue prlor to sald application,
and substantially they deny that by Rembert's alleged invention a simple
method was discovered of baling and compresslng cotton by one continuous
opération at the point of glnnlng, thereby savlng two opérations, vlz., the
gUming and formlng into a plantation baie at the gin, and then transporta-
tion to another point and compression there. The défendants in their answer
then deny that Henry Rembert was the true original and first inventer of
the alleged method or process of baling cotton to which the letters patent
No. 441,022 relate, and on Information and belief allège that, long before any
invention or discovery made by Rembert, the same and substantial and ma-
terlal parts thereof had been Invented, and had been known to and used by
others in thls country, and had been in public use or on sale in the United
States for more than two years prlor to the date of the application for said
letters patent. The names and places of résidence of persons who had such
prlor knowledge, and by whom the same was publlcly used or sold, are
then giveu. The défendants, further answering on information and belief,
say that the letters patent issued to Henry Rembert are invalid and void,
because the alleged Invention therein set fortti and claimed, or material and
substantial parts thereof, had prlor to any alleged invention or discovery
thereof by Henry Rembert been patented and been described in printed pub-
lications in the United States and forelgn countries. It then sets ont a num-
ber of patents, antedating that of Henry Rembert, issued by the United
States Patent Office, and two issued in Great Britain. The défendants deny
any infringement on the part of the American Cotton Company or the Whar-
ton Gin & Milling Company.
In effect, the pleadlngs hère raise, so far as we deem it material to consider
them, issues as to the patentabllity of Rembert's alleged discovery on the
ground that the same lacks novelty and utllity as to the prlor art, and as to
whether Rembert's patent Is infringed by the process or method in use by the
American Cotton Company and the Wharton Gin & Milling Company. A
large amount of testimony was taken, and the case heard upon the plead-
lngs and proof, and after considération the court made a final decree dis-
missing the complainant's blll. In a brief opinion filed by the judge presld-
ing in the Circuit Court, the followlng conclusions of law and fact are stated :
"Conclusions of Fact. I find, from the facts: First, that the Rembert
patent, as it relates to the method of compresslng cotton, is without novelty ;
second, that sald patent is without utillty ; third, that the inventor of the
Rembert process is not a ploneer in the art of compresslng cotton ; fourth,
that the method patented by Rembert is without clalm to priorlty ; fifth.
that the défendants the American Cotton Company and the Wharton Gin &
Milling Company are not infrlnging upon the method or machinery covered
by the patent issued to the complainant.
"Conclusions of Law. Applying the law to the facts above stated, the blU
of complainant should be dismissed, which Is accordingly done; the costs to
be ascertained and taxed agalnst the complainant."
George E. Mann, for appellant.
Eugène Williams, Richard N. Dyer, and Frank L. Dyer, for appel-
les.
Before PARDEE, Circuit Judge, and SPEER and NEWMAN, Dis-
trict Judges.
After stating the case as above, the opinion of the court was delivered
by NEWMAN, District Judge.
The first inquiry in this case is : Did Henry Rembert make a patent-
able discovery and one having utility ? The claim is that he discovered
REMBERT KOLLEK COMPEESS OO, V. AMERICAN OOTTON 00. 359
that the resiliency, or tendency in cotton to expaijd, could, by com-
pression to a point just short of injuring the fiber, be arrested or sus-
pended for a sufficient length of time for it to be folded or lapped into
a baie, so that the only thing left to be done would be by slight com-
pression to expel the air from between the laps or layers, and apply the
fastenings, making in this way a baie of sufficient density to be a stand-
ard commercial baie for shipment to distant points by rail or water.
The density required by the varions cotton exchanges is not less than
22^ pounds per cubic foot, The additional advantage claimed is that
this resuit is obtained by one continuons opération at the point of
ginning. The practicable method of utiUzing this alleged discovery
was by passing the cotton between two rollers, so as to form a bat to be
lapped into a baie. Unless it is true that cotton will remain in this com-
pressed condition after passing between the rollers a sufficient length of
time to carry out the remainder of the process — ^that is, to lap into a
baie, exclude the air, and tie — there is no merit in the complainant's
claim.
The file wrapper proof in this case shows that Rembert's original
spécifications and claims were unsatisfactory, notwithstanding amend-
ments thereto, and were rejected by the Patent Office. The application
was again amended and renewed, and was finally granted with the
claims which bave been set out above. The amendment to Rembert's
spécifications, so far as important, which finally caused the granting of
the letters patent, was as follows :
"A marked distinction between my method of producing a baie of com-
iiressed cotton and those which preceded it lies in the fact that I effect the
compression progressively ; that is to say, by compressing a small portion
or unit of the mass at a time, and thereafter accumulating thèse compressed
units, instead of effecting the compression of the entire mass at one opéra-
tion, as heretofore practiced. The expressions 'compression' and 'compressed
cotton,' as used in the présent spécification and claims, refer to that extrême
compression, such as Is efCected by the so-called 'compresses' of the présent
day, and which, falling just short of the crushing of the individual flbers, so
solidifies or condenses the mass that the elastie or expansive tendency is for
the time being suspended."
There was also an amendment, in connection with the foregoing, in
référence to the apparatus accompanying the application, as follows :
"While I hâve illustrated and deseribed herein that form of apparatus which
I eonsider best adapted for carrying out my process under certain conditions,
it is to be dlstinctly understood that this apparatus Is not the essence of the
présent invention, and that the method herein claimed may be carried Into
effect by varions other mechanisms, which will readily suggest themselves
to the skilled meehanic as équivalents of the one herein shown and de-
seribed."
- In the remarks accompanying the applicant's last amendment was
the following:
"It is now well recognized in the art that by compressing cotton to a point
just short of crushing the flber is to cause it to cohere for a short space of
time, so that, although relieved of pressure, it will for the time being retain
its solidified and condensed condition. Applicant's results are attained by
talîing advantage of this fact"
So that we thus reach Rembert's précise discovery, as shown by this
file wrapper proof ; that is, the utilization, as he says, of a law of na-
360 129 FEDERAL EEPOETEK.
ture, the suspension of the elasticity or tendency in cotton to expand for
a brief interva,! after being relieved from heavy pressure.
The rejection o£ Rembert's original claim by the Patent Office was
on several grounds. One of those was Clemens' patent, No. 7,612,
September 3, 1850. The Clemens patent, which caused the first rejec-
tion of Rembert's application, will bç gathered from a part of the spéci-
fications, as follows:
"Cotton and other substances above enumerated bave always heretofore
been packed and pressed by pressure applied by a platen or f ollower directly
to the whole mass. This of necesslty requires great power, and, if the sub-
stance or substances be matted ànd in uneven lumps, the whole mass cannot
be well condensed. By my invention I am enabled to condense the mass into
a much smaller <:ompass, and by much less power than heretofore, while at
the same time the substance or substandes can be unpacked to more advan-
tage for the purpose of manufacture, particularly when applied to cotton.
The first part of my Invention consists in pacljing the substances above enu-
uierated and ail others of a like character in a séries of successive layers or
.strata, by the action of a roller or rollers, or cylinders, or curved or beveled
faces on the surface thereof, the pressure being in succession applied to one
or more of such layers or strata, whereby the substance or substances to be
pressed and packed are more evenly distributed, and therefore in a condition
to be condensed into a more compact mass and with less power, for the rea-
son that the power is divided and applied by the surface of the roller or
rollers or cylinders, or their équivalents, to a small portion of the surface of
each layer or layers, Instead of to the whole mass at once. The second part
of my invention, which relates to the means for applylng the first part of
my Invention, consists In combining with rollers or cylinders, or their équiv-
alents for laying and compressing in successive layers or strata, a bed which
shall recède from the surface of the rollers or cylinders as the layers or
strata accumulate, and which either traversed back and forth under them,
or over which they traverse from end to end to distribute the layers or strata.
The third part of my Invention consista in combining with a press for pack-
ing and pressing substances in successive layers or strata, by means of rollers
or cylinders, or their équivalents, a lapping machine for laying or forming
the fibrous substance or substances to be packed into a lap or laps, prepara-
tory to the opération of laying and pressing. The fourth part of my inven-
tion Consists in combining with each of the laying and compressing rollers,
or their équivalents, a séries of rollers, or their équivalents, for retaining the
layers in their compressed state as the bed traverses under them."
Clemens' administrator, Chetlain, obtained a patent in 1876 (No. 187,-
814) for an improvement in cotton presses. A brief statement from
the spécifications will show what his patent embraced : _
"Cotton, which in a loose state is very bulky, should be compressed in small
quantities in order to condense it as much as possible, and to obtain tha
maximum density each incrément to the volume of the cotton should be com-
pressed at the time it is added to the baie. This improved cotton press packs
the cotton In this manner, and at the same time in such a way that it can
afterward be used from the baie to the best advantage. The cotton, as it
cornes from the gin, is formed Into a continuons sheet, which is pressed and
laid under pressure in folds doubled one upon the other. The baie is thu»
formed of continuous parallel layers of cotton greatly condensed."
Rembert's patent was rejected on the further ground of the English
patents to Lahaussois of November 22, 1877. The character of that
patent may be gathered from a brief extract from the spécifications, as
follows :
"In the presses, as hitherto constructed, the entire mass required for a sin-
gle baie bas been placed in the press, and the whole mass compressed at one
time. In such pressing the portion situated at the surface is much more
BEMBEET EOLLEK COMPEESS CO. V. AMEEICAN COTTON CO. 3pl
compact and dense than that near the middle of the baie. The object of tWs
invention is to make the baie equally dense throughout; and It consists in
pressing the material in successive layers, one after the other, and then com-
bining the several layers into one baie, as more fully hereinafter described."
Taking this file wrapper proof in connection with what is otherwise
shown by the record, it is manif est that Rembert's alleged discovery
is confined within very narrow limits. It is the application of that
quality in cotton which causes it to cohere after severe compression
for a brief interval to practical purposes in compression and baling.
Unless this suspended elasticity after compression to a point just short
of in jury to the fiber occurs, and unless this quality in cotton, if it ex-
ista, can be applied as claimed, Rembert's patent would be invalid, and
liis case must fail for this reason. It is contended on behalf of the de-
fendants that, after any compression of cotton short of crushing- the
fiber, expansion occurs immediately, and that practical experiments with
Rembert's method hâve demonstrated this. There is considérable évi-
dence in the record on this subject.
William F. Ladd, who had been vice président of the Rembert Com-
press Company since 1893 and up to the time he testified in this case,
was examined with référence to the expansion of cotton under the Rem-
bert process after leaving the rollers. His first allusion to it is as fol-
lows :
"Q. Did you notice that the sheet, or bat, expanded after It left the com-
pression rollers? A. Yes, sir. Q. And I suppose, v^hile it was accumulating
in the press box, and before the final pressure was applied, it also expanded?
A. Tes, sir. Q. Do you recollect whether the final pressure which you applied
actually compressed the layers which had accumulated in the press box? A.
After the cotton passed through the rollers it expanded to twlce its thickness
in the press box, and by the application of pressure in the press box it was
compressed back almost to the same thickness it had in passing through the
rollers."
On examination in rebuttal, Mr. Ladd testified as follows on this
subject :
"A. Several of the witnesses whose testimony you bave asked me about say
that the pressure of the baling press was to not only exclude the air from
between the laps or folds of the bat that had been condensed by the rolls,
but that it compressed the bats themselves. I want to explain that the fact
is that when the bat had passed between the rolls it fluffed a little as it got
the air Into its exposed surface, and so the air between the bats was also in
tbe surface of the bats to some extent; but there Is no question In my mind
that a press with a power of some 50 tons to the whole surface of the baie
did not do more than squeeze out the air that there was between the layers,
as this bat had just been a few minutes before subjected to a roller pressure
of several thousand tons to tbe surface of one lap of the baie, and while the
surface fluffed, the body of the bat was still compressed, so that there could
be no density added by a plantation press that at the outside could not put
a pressure to the whole surface of a baie of over 50 tons. The average coun-
try press, with which many first-class Rembert baies were made, is not over
oO or 40 tons. The best, such as was used with the Rembert at Palmer, and
part of the time at Galveston, only gave a pressure of about 50 tons."
The testimony of Henry Rembert, the patentée, on this subject, can
be gathered substantially from a few questions and answers on his
cross-examination. After testifying that the cotton bat, before it en-
tered the compression rollers, was about two inches thick, or should
be about that thickness, and that as it passed immediately between the
362 129 FEDERAL REPORTÎEE.
rollers it \was not thicker than a pièce of brown paper, then testified as
follows :
"Q. How thîek was the bat after It left the compression relis? A. I could
not tell you, sir. I could not measure it. Q. If its expansion was suspended
by the compression of the compression rolls, is it your vlew that the bat.
after it left the compression rollers, was as thin as when it was subjected
to the maximum compression as it was when between the rolls? A. I expect
probably the body of the bat was, but there was a good deal bf fuzz on each
side of it, which was sticking to each roll. It would fuzz up a little, but the
main body of the bat was thin. Q. Tour point, then, is that the bat was
compressed by the compression rolls, so as to be reduced to an extremely thin
sheet, and that, after leaving the compression rollers, certain of the flbers on
the surface protruded to form a fuzz, or fuzzy surface, which gave the ap-
pearance of thiekness to the bat? A. No, sir; I could not say that it did.
You could see it was simply a loose fuzz that was pulled up when the bat
left the two rolls, and I suppose the cotton sticking to the rolls caused it to
pull out a little. ïhe main body of the bat was firm. Q. It was like a
blanket, as I understand you? A. No, sir; I could not say it was. The
blanket is not as firm. The fuzz stuck out like a blanket, but the main body
of the bat was firm, and the blanket is not. Q. The body of your bat, after
passing through the compression rollers, was Armer than the blanket? A,
ïes, sir."
This embodies about the strongest testimony for the complamant as
to the suspension of elasticity in cotton, after leaving the compression
rollers.
T. J. Griffin, who was a machinist, and had been in the employ of
the Rembert Company, testified as follows :
. "Q. Were any rolls put on the folder, so as to assist in holding down the
bat of cotton in the compress box? A. Yes, sir; there was an addition of
three rollers placed on the machine, one of which was a wooden roll set di-
rectly over the positive compression roll, or a little past the center nearest
the condenser fro^i said compression roll, to gradually press down the mass
of cotton as it paissed down the chute before entering between the compres-
sion rolls. Then there were a set of rolls placed on a traveler inside of the
reçeiving box, çonneçted by means of rocker arms to the sides of the folder,
so that the stroke of the folder going backwards and forwards to hold the
mass of cotton that those rollers would corne in contact with [the accumulated
mass of cotton in the reçeiving box], and press it down, so as to obviate the
necessity of punchlng it down with a stick. Q. Well, now, were those foUow-
er rollers intended to keet the cotton from expandlng in each layer? A.
Yes, sir ; the intent of those rollers was to squeeze the air from under each
bat as it was folded or deposlted by the folder. Q. And was it also its pur-
pose to compress and keejp compressed the cotton in each layer? A. No, sir;
as it would expand after passing through the rolls. Q. Well, did the cotton
expand after passing through the compression rolls? Is that what you refer
to? A. Yes, sir. Q. Explain just how it appeared and did as it passed be-
fore, through, and after the compression rolls. A. Before it passed through
the compression rolls it was in a fluffy mass or bat, the rollers being tled
together in housing, with sufiicient pressure exerted on the templet screws,
80 as to make the négative or friction roll rotate thereby. When the rolls
were properly ad.insted, by dropping a pièce of ordinary paper through the
rolls, it would flatten, or hâve a tendency to flatten, and, in passing from a
three to a six Inch bat of cotton in its fluffy state between the rolls, it would
necessarlly put an euormous. Incalculable pressure on the journals. After
passing through the rolls and allowing it to remain in the reçeiving box for a
few moments, or pulling it ofC of the bat, as v/e often done, as it passed through
the folder, we would flnd the bat of cotton had e.xpanded, with the cotton dry
and fluffy, to half an inch thlck. Q. How thick was it as it passed through
the rollers just in the line of contact? A. That I cannot answer intelllgently,
as the rollers were rigidly in contact. The only elasticity or give that there
could possibly be in the spring on the shaft or housings.' Q. Would it be less
BBMBEET EOLLBB COMPBB88 CO. V. AMEEICAN OOTTON OO. 363
than a quarter of an Inch? A. Yes, sir. Q. Much lessî A. Tes, sir. Q. Ton
migbt estimate it by saying less than one-sixteenth of an inch? A, I shonld
say so. Q. After the cotton had gone through the compression rollers, It would
expand until it was a half an inch in thickness? A. Yes, sir. Q. You say that
with the cotton in its normal condition that it would expand to even more than
that at times? A. Yes, sir; and, to illustrate, with damp or green cotton we
could easily, without any punehing or pushing down of the aecumulated mass
of cotton into the receiving box, make a baie of cotton weighlng from 550 to
600 pounds. In cotton that was dry and fluffiy, very often we could not get in
the same slzed receiving box a baie weighlng from 400 to 450 pounds. Q. What
is the normal condition of cotton — dry and fluft'y, or green and wet? A. Dry
and flufEy."
In référence to the expérimental plant carried on at Galveston, Mr.
Griffin testified as f ollows :
"A. There were something like between 1,000 and 1,200, I wlll say, of baies
of cotton made on the expérimental plant in Galveston. Some few baies of the
cotton, I understood, were ginned for customers, and others were ginned on
account of the company — cotton they had bought. My understanding, which
was qulte fréquent, that the baies of cotton we were making did not hâve a
sufficlent density, and that I was told that I would bave to apply more pressure
on the ordlnary press, whlch in every instance that I done, the resuit
would be a broken press, and parts of the press would hâve to be carried off,
and as often as twice and three times a day, to be repaired, and to my personal
knowledge I know of a great number — how many I can't say exactly — that were
carried and placed under the follower blocks of the Taylor compress and there
recompressed. A great many baies, however, and a majority of the baies
that we made in Galveston, were shipped away on board of cars, and I pré-
sume, not hearing anything more and not being connected with the office, that
they were satisfactory. In many instances I hâve calculated the density of
those baies, and found them, not a great many of them over the average of
22% pounds per cubic foot, and a great many under the required density ; that
is, after it had passed the expérimental stage, it was ginned (or we tried to
gin, up to the period the cotton seed became damaged), they would be run
straight along, and a great many baies would be perfect, and others would be
imperfect. * • *"
G. T. Loutitt, who was employed as a mechanical draughtsman by
représentatives of the Rembert Company, and who had a contract to
build one machine, testified on this subject as follows :
"Q. Very briefly, just explain how and where the cotton went after passing
ont of the condenser in the Rembert metbod. A. The cotton came out of the
condenser in a sort of a bat, and passed between two cast-iron rolls. Underneath
thèse rolls there was a folder, which folded the cotton in an oblong baie, you
can call it — not a square baie. It folded it in a box the same slze as the baie
This box was made so that it would revolve, and afterwards the cotton was
put under a screw press, and In some instances a hydraulic press, and in some
instances a knuckle-jointed press, so that the cotton could be brought down to
what the Rembert people called a 'compressed baie.' Q. Now, in passing from
the condenser to the rolls, about how tbick was the bat, as you flrst saw it, if
you can remember? A. It was about two or three incbes thick — Zy^ inches ;
about that. Q. It passed into the crevice between the compression rollers, then,
just before going in, at two or three inches tbick? A. Yes, sir. Q. While it
was between the compression rollers, how thick was it? A. That is hard to
judge. I sbonld judge about three-elghths to half an inch. Q. Were the rollers
so arrangea as to meet before the cotton came into it? A. Well, they were
screwed up almost tight, so that the faces were almost tlgbt together. Q.
When you first saw it, were tbose rollers both fixed, so that there was no glve
to them, or was one of them arranged so that it would move back and forth?
A. By loosening the screw, you could. Q. When you had tightened the screw?
A. It would not give — only the spring, that is, in the iron. * * • Q. Then
the only give was the give that the iron would give by reason of its flexibility?
364 129 FEDEEAL EBPORTEB.
A- Tes, sir ; that Is rlght. Q. As It passed through, then, It was In a very thin
band or bat? A. Tes, sir. Q. You said about half an Inch. Do you speak ad-
vlsedly? Was It as much as that from your expérience? A. No; net at the
point of contact. No, sir ; net at ail. I do not think that between the rollera
It was more than three-slxteenths of an inch — from one-eighth to three-six-
teenths. In fact, sometimes they were almost tight up. Q. When the cottoti,
then, passed in, they were almost tlght up? A. Yes, sir; almost tight up. Q.
And the actual thickness of the bat at that point, as it passed the point of con-
tact of the rollers, you think would bQ very thin? A. Yes, sir; very thin. Q.
The exact thickness you could not accurately estimate? A. No sir. Q. New,
after it passed out from this crevice or point of contact, what was the actual,
practical resuit, as you observed it? Dld the cotton widen out, or did it re-
maln thin? A. It widened out a good deal. It expanded. Q. How much? A.
I should say it would expand to an inch and a half or two inches — an inch
and a half, anyhow. Q. Do you remember, by flxing in your mind the flrst time
you ever saw the process, it being a novelty — did it fix itself in your mind?
A. Yes, sir."
There is much testimony in the record as to the différence in the
opération of the Rembert process with damp cotton and with dry cot-
ton. When working with damp cotton, it would retain its compressed
condition much better than when the cotton was dry and fluiïy, which
fact hardly needs expert testimony to demonstrate.
Benjamin Worley tried one of the plants of the Rembert Company,
and the iîrst year it was put up, after making five or six baies, and it
failing to work satisfactorily, he shut it down, and the next year it was
put in perfect order and again tried. As to the last experiment Mr.
Worley testifies as follows :
"Q. Well, was it put in perfect order next season? A. Well, it was, yes, sir;
but it did not accomplish the desired résulta. Q. That is what I was getting
at. Did you try to run it parts of two seasons? A. Not the same plant. AVe
did the System. Q. That is what I am speaking of, the System? A. Yes, sir;
we tried to run it a part of two seasons. Q. Then, taking the flrst efforts that
you made, you say you paclîed a few baies of cotton on it? A. Yes, sir. Q.
Mr. Rembert came up, and you had a talk with hlm, and he told you to put it
out, and to put back your old System? A. Yes, sir. Q. Did you do that? A.
Yes, sir ; he told me to throw it out, but I put back my old System on my own
account Q. He told you to put it out? A. Yes, sir ; his words were : 'Throw
the damn thing out. It is no good.' Q. That is what Rembert hlmself said?
A. Yes, sir. Q. But he stated he would perfect it for the next year? A. Yes,
sir. Q. And there was an effort made in that direction? A. Yes, sir ; a very
strong one too. Q. Now, taking up the first year, what was the cause of what
you call a failure? A. Well, sir ; there was only one cause. That was that the
cotton would not hold the compression after it passed through the rolls. The
cotton was too dry. It would expand to fully 50 per cent of its original sîze
or thickness. AVe passed a bat through there six inches thick, and it came out
three. * • * Q. Now, what would it take to make the method work upon
dry cotton at any time? Did any suggestion come to your mind about it? A.
Yes, sir ; there is only one thing that would make it work. The cotton was
compressed, and, if they had just had some contrivance to hâve held it under
compression after they had compressed it, it would hâve been a success. It
had time to expand, you see, after leaving the rollers until it reached the box,
and it expanded to 50 per cent, of its original thickness."
Mr. Worley then testified to the fact that the cotton usually retained
its compressed condition better near the coast, as at Galveston, when it
was damp, and, substantially, that after getting 50 miles from the coast
the cotton would be too dry to retain its compressed condition by this
process. Mr. Worley further testified :
"Q. When this cotton got to the box where it was to be formed into the baie,
could they get enough cotton in there to make the régulation size baie? A.
BEMBEBT EOLLER G0MPBES8 CO. V. AMERICAN COTTON OO. 365
They could make the régulation slze, but not the weight. Q. Well, by size I
mean weight What was the trouble? A. They could not get enough cotton in
there. It was too bulky. The box would not hold sufficient cotton to make the
régulation weight baie. By régulation weight is meant 500 pounds. Q. Now,
when you had gotten in there as much as you could get in this press box, was
the mass as it then existed loose and flufify, or were thèse laps in a state of
thin felt bands? A. No, sir ; they were loose and fluffy. Q. In making the baie
and tying it, after this step was reached in the process, what resuit was neces-
sary from the press In order to make a baie? A. It was necessary to put on
more pressure than we could obtain from the press to make a baie. We could
not get the pressure. If we wanted to make a compressed baie ont of it, the
press that we used was not sufficiently strong to make it. Q. Was there any
other duty for the press to perform than pressing the air from between the
layersî A. Well, If they wanted to make a success of it, there was. Q. What
was it? A. It did not only bave to press the air from the layers, but it had
to still go further. It had to press the cotton close enough to make a con-
densed compressed baie of It ; but the press dld not bave the power to do that"
A. D, Thomas, a witness for the défendants, who seems to hâve
practical knowledge of the subject in question, says in his testimony:
"I do not think it possible to compress cotton in a thin sheet, so that it will
not expand, without injuring the fiber."
D. H. Harkey, a witness for the défendants, testifies as to the press
at Palmer, Tex. : "By the time they got the baie ginned, it was fiabby
and loose, and in a great pile" — and that after leaving the compression
rollers the cotton expanded enough to require compression to press it
again.
J. J. Payne, a witness for the défendants, testified :
"Q. When it came out from under that little crevice between the rollers,
do you remember how thick the bat was there? A. I don't know. It was not
hait an inch thick, I would not suppose — hardly. Q. Afterwards, when it was
accumulated in the press box, did it remain like it was when it passed through
the rollers? A. No, sir. Q. What did it do then? A. It expanded, and that
was the trouble. They could not hold It"
We think it is demonstrated by the évidence in this case that the
theory upon which the Rembert patent is based is not sound. The évi-
dence shows that, when cotton is passed between the rollers as proposed
by Rembert, the elasticity or tendency in cotton ordinarily dry to ex-
pand is not suspended long enough to fold it into a compressed baie
as proposed, and to make in that way a compressed baie; using the
term "compressed" in its commercial and technical sensé. One of the
great difficulties about Rembert's alleged discovery is the fact that it
requires that the cotton shall be compressed to a point just short of, but
not quite to, injury to the fiber. It requires such a nice adjustment of
the machinery in order to reach this point of compression, and especially
with référence to the dampness or dryness of the cotton, that in prac-
tical experiments, as this évidence shows, it proved almost, if not quite,
impossible to make the process a success, for this very reason. This is
illustrated by a brief extract from the testimony of Mr. Worley, the
witness who has been before referred to :
"Q. Did you flnd that the cotton at Gatesville could be compressed to a de-
gree of compression which would destroy its elasticity, but not injure the
flber? A. No, sir; I did not. Q. Whenever you got to the point where the
elasticity was destroyed, the cotton was destroy edî A. Yes, sir."
366 129 FEDERAL EEPOKTEB.
The foregoing, of course, are not ail the witnesses examined pro and
con, even on this particular question; but those we hâve referred to,
and the extracts from their testimony, we think, présent fairly the char-
acter of the testimony submitted by the parties respectively as to this
matter. At ail events, we think it is fairly established, by the évidence
as to the practical experiments with this process and with the machines
adapted to its use, that the fiber was injured, or, if not, that expansion
immediately after compression by the rollers resulted, so as to prevent
the making of a satisfactory compressed baie.
With the particular feature which has been discUssed eliminated
from the Rembert patent, which, indeed, is the whole invention claimed,
it is unnecessary to refer to the prior art further than we hâve in citing
the patent by Clemens' administrator, Chetlain, and the Lahaussois
British patent. The Clemens patent of 1850 was for a "method of
packing and compressing substances into baies or packages in a séries
of successive layers or strata by means of rolling pressure or its
équivalent." It combines with the laying and pressing rollers, or cyl-
inders, "a bed which shall be gradually separated from the rollers or
cylinders as the layers or strata accumulate," etc. The patent of Clem-
ens' administrator of 1876 is to "provide a machine that will baie cotton
by a continuous automatic action in direct connection with the process
of ginning it." It provides for a "mechanism for forming the loose
cotton as it cornes from the gin into a sheet, for conveying the sheet
into the baling bed, and depositing it, under pressure, in layers doubled
back and forth, one upon another," etc. Lahaussois' British patent of
1877, to be used for hay, cotton, and other substances, provided for
"pressing the material in successive layers, one after the other, and then
combining the several layers into one baie." The pressure on the
layers is by "two compression cylinders." Two patents to Samuel D.
Keene, issued in 1884, No. 307,119 and No. 307,200, might also be cited
in this connection as anticipating the Rembert patent, when the latter
is confined within the narrow limits we hâve indicated; but we deem
it unnecessary to discuss further this feature of the case.
If the Rembert patent could be sustained, we are satisfîed that it is
not being infringed by the défendants' method and apparatus. The de-
fendants are using, somewhat modified, the apparatus for which John
W. Graves obtained a patent December 5, 1893, the application for which
was filed April 22, 1890, and renewed May 5, 1893, No. 473,144. In
the spécifications attached to his application, after referring to the for-
mer method of baling cotton, he states his invention in this way ;
"My invention consists, first, in improved mectianlsm for baling cotton and
other fibrous materials, which consists In feeding and slmultaneously subject-
ing the same, In the (orm of a bat or sheet, to friction and pressure during the
baling opération, by means of a belt, within the loop or bight of which the
baie is formed by continuous aecretion and rotation of the fiber, and by effeet-
ing its compression in détail, or layer upon layer, as it is fed to the baie,
which is preferably efCected, when baling cotton by deliverlng the sheet or
bat into the press from the condenser of a gin in an unbroken condition;
second, in mechanism for causing the bat or sheet of fiber, as it is fed Into
the press, to be subjected to constant friction and compression, which, never
being released until the baie is flnished, results in the greatest attainable
density of the material, and in the layers throughout the baie constituting re-
taining bands for those wound interiorly thereof, which are held or boimd by
the layers outside ; third, in mechanism which is adapted for applying the
EEMBEET EOLLEB COMPRE8S CO, V. AMERICAN COTTON OO. 367
covering or banda, when such are used, to the completed baie, without permlt-
tlng the same to expand; fourth, in devices for permittlng the loop or bight
of the belt to automatically aceommodate itself to the Increasing size of the
baie ; flfth, in automatic tensiouing devices, whereby the pull or pressure upoa
the belt is increased approximately in the ratio of increase of the diameter
of the baie ; sixth, in automatic devices for sustaining the increased size and
weight of the baie in the same plane, while permitting It to move freely
within the bight of the belt; and, seventh, In the spécial mechanisms em-
ployed for carrying out the objects or purposes of this invention, as herein-
after fully disclosed in the description, drawings, and clalms."
John W. Graves, testifying in this case as to the apparatus used by
the défendants, says :
"In my patent. No. 510,388, I use the endless belt, passing over a séries of
rollers and about a central splndle or core, and about which the baie Is wound ;
the baie belng formed by wlnding up convolutely a continuous sheet or bat
of cotton subjected to pressure during the formation of the baie. In the ap-
paratus now used by the American Cotton Company, a device slmilar In con-
struction is used, consisting of an endless belt passing over a séries of rollers
and about a central core or splndle, about which the cotton is wound; the
same pressure belng retalned untll the baie is completed and tied out. The
press used at présent by the American Cotton Company Is Identically the same
in princlple and method as that employed by me in ail my experiments. The
same principle of passing the covering around the baie while under pressure
and tied out Is employed. The only différence of importance between the ma-
chines of my patent and that used at présent by the American Cotton Com-
pany Is in the manner of applying the pressure to the belt under which the
baie is formed."
Magnus Swenson, manager of the operating department of the
American Cotton Company, and a witness for the défendant, describes
the defendant's apparatus and method as follows :
"The apparatus consists primarily of two horizontal rolls, with a core, which
is held In movable checlj plates, and which It located between those two rolls.
One of the rolls Is mounted in stationary bearings, while the other roll is
mounted in bearings that are allowed to sllde or move away from the flxed
roll. The movement of this movable roll Is resisted by two hydraulic jacks
located at the end of the press. The press is furnished with gearing that
revolves the two baling rolls in the same direction. An endless belt, called
the 'baling belt,' which is practically as wlde as the baling rolls, passes over
both of the baling rolls and underneath the core, and in the slack loop of
the belt Is located a roll which guides the belt and keeps it tight. The bat
former is located directly over the press, and consists of a chamber, in the
upper part of which is located a perforated drum, which revolves at a rapid
rate. This drum condenses the cotton by allowlng the air to pass out through
the perforations In the drum, and the cotton falls down on two other per-
forated drums which are located in the lower part of the case or bat former.
Thèse two drums rotate slowly, and form the cotton Into a loose bat or sheet.
This sheet passes down between two doffier rolls, located underneath the bat-
f orming drums ; thèse rolls giving the bat sufficlent pressure to make it
smooth and cohérent This bat passes down a chute, and the action of the
press carries the bat underneath the core, whereon it is wound into a baie,
owing to the pressure which Is exerted by the résistance of the movable
roll and belt. The cotton bat goes Into the press contlnuously untll the baie
is of sufficient size, when It Is covered with burlap and ejected from the press ;
the core being removed after the baie has been taken out."
As will be perceived from the foregoing, there is nothing whatever
in the machine or m^ethod used by the défendants which infringes in
the least upon the précise process or method for which Henry Rem-
bert obtairied the patent in suit in this case. There is no attempt in
368 129 FEDERAL EEPORTER.
any part of the opération of the defendant's machine or process by
which the suspension of elasticity in cotton is utilized in any way in
forming the baie, or the bat of which the baie is made. In another
part of the testimony of Mr. Swenson, the following questions and
answers will show that this is true.
"Q. Tou State that with the apparatus origlnally used by the Cotton Ginners'
Compress Company, as well as with the apparatus now used by the American
Cotton Company and Its llcensees, the cotton sheet or bat is caused to pass
between a pair of doffer rollers, which slightly compress it. Can you form
an opinion as to the relative denslty of the sheet or bat after it leaves thp
batting or doffer rollers, as compared with the available denslty of the sheet
or bat after it is wound in position on the flnished baie? A. The bat is com-
pressed when it goes tlirough the doffer rolls to about an inch in thickness.
This immediately swells out until it is about four Inches in thickness, aud
thls bat is condensed in the press to about a fourth of one Inch In thickness.
From which it is readily seen that the pressing of the cotton is practically
ail accomplished in the press, as the pressure which it receives between the
doffer roUs bas practically nothlng whatever to do with the density of the
baie. Q. I understand from thls that with the apparatus of the American
Cotton Company a very much greater density Is secured in the ballng press
than is secured by the opération of the batting or doffer rollers. Is this cor-
rect? A. That is correct, as the pressure which the bat reçoives between the
doffer roUs is only for the purpose of maklng it adhère and for smootheuing
it, and has nothlng to do with the denslty which it gets In the press."
The compression of the baie by the défendants' method and appa-
ratus is obtained by winding up a bat in cylindrical form. Each con-
volution adds pressure to that already wound, and ultimately makes
the required density in the baie. Each layer, as the baie is continuously
wound, keeps the layer underneath in its compressed condition. In
Graves' spécifications practically what is donc by the défendants is de-
scribed in this way :
"To effect the compression or ballng of the fiber, by wlndlng the bat smoothly
or without tangllng or twlstlng its flbers, around a removable core or shell,
so that the, pressure upon the fiber will constltute the main retalning élément
or holding means for the completed baie, and so that any light wrapplng or
coverlng which will arrest the expansion of the outer layer of the bat, will
also prevent ail expansion of the rest of sald baie; also, the fiber will be
left in such condition that, when sald coverlng has been removed, the rota-
tion of sald baie can be reversed, and the bat unwound in a continuous or
unbroken sheet, but in a more compressed condition than when it was
origlnally delivered from the condenser."
For the purpose of determining whether the défendants' apparatus
and method infringes the Rembert process, we think Rembert patent
should be confined within the limits heretofore stated. It will not
be extended beyond the language of the patent, and its history in the
Patent Office. Giving it a very libéral construction, it must still be
viewed in the light of the language of the patent, and the file wrapper
évidence. In Shepard v. Carrigan, Ii6 U. S. 593, 6 Sup. Ct. 493, 29 L.
Ed. 723, the rule on this subject is stated in this way :
"Thls fact, and the file wrapper and contents, of which we hâve stated
the substance, make It clear that the clalm and spécification of the Mae-
donald patent must be construed to include, as thelr language requlres, a
fluted or plaited baud or border as one of the essential éléments of the In-
pentlon. Without this élément the pateiit would not hâve been Issued. The
Patent OfBce decided that without It the invention had been anticlpated.
Where an applicant for a patent to cover a new comblnatlon is compelled
EBMBBBT EOLLEB OOMPKESS CO. V. AMEEICAN COTTON OO. 369
by the rejection of his application by the Patent OfiSce to narrow hls claim
by the Introduction o£ a new élément, he cannot, after the Issue of the
patent, broaden his claim by dropplng the élément which he was compelled
to Inelude in order to secure his patent. Leggett v. Avery, 101 U. S. 256, 25
L. Ed. 865; Goodyear Dental Vulcanite Co. v. Davis, 102 U. S. 222, 228, 26
L. Ed. 149; Fay v. Cordesman, 109 U. S. 408, 3 Sup. Ct 236, 27 L. Ed. 979;
Mahn v. Harwood, 112 U. S. 354, 359, 5 Sup. Ct. 174, 6 Sup. Ct. 451, 28 L. Ed.
C65; Cartridge Co. v. Cartridge Co., 112 U. S. 624, 644, 5 Sup. Ct. 475, 28
L. Ed. 828 ; Sargent v. Hall Safe & Lock Co., 114 U. S. 63, 5 Sup. Ct 1021, 29
L. Ed. 67."
In Sutter v. Robinson, 119 U. S. 530, 7 Sup. Ct. 376, 30 h. Ed. 492,
it is said on this question :
"A comparison of the patent as granted with the application very eonclu-
sively establishes the limits within which the patentee's claims must be con-
fined. He is not at liberty now to insist upon a construction of his patent
which will inelude what he was expressly required to abandon and disavow
as a condition of the grant. Shepard v. Carrigan, 116 U. S. 593, 6 Sup. Ct
493, 29 L. Ed. 723, and cases there cited."
In Corbin Cabinet Lock Co. v. Eagle Lock Co., 150 U. S. 38, 14
Sup. Ct. 28, 37 L. Ed. 989, there is this statement:
"lîaving originally sought broader claims, which were rejected, and hav-
ing acquiesced in such rejection, and having withdrawn such claims and
substituted therefor this narrower claim, describing a particular or spécifie
lock, as such, neither the patentée nor his assignées can be allowed, under
the authorities, to insist upon such construction of the allowed claim as
would cover what had been previously rejected."
There is nothing whatever in the défendants' apparatus or method
which infringes in any way, as we see it, upon the Rembert process or
method of utilizing the alleged temporary suspension of elasticity in
cotton for the purpose of forming a compressed baie. The défend-
ants do not prétend by their machine to suspend the elasticity in the
cotton as or after it passes through the rollers and before baling;
but the elasticity or expansion is afterwards reduced and confined by
the process of forming into a cylindrical baie, as has been described.
In this view of the case, it is unnecessary for us to notice the contention
between the parties as to the priority of conception or of use by Graves
and Rembert of their respective inventions. We think the method and
machine used by the défendants so easily distinguished from the Rem-
bert process, and any machinery by which it might be utilized, as to
render the considération of their claims as to priority in time of dis-
covery and use unnecessary.
Our conclusions are:
First. That the Rembert patent. No. 441,022, confined, as it must be,
within the limits we hâve suggested, lacks utility.
Second. That, if it could be given a broader scope than that of util-
izing the alleged suspended elasticity in cotton for the purpose of form-
ing a compressed baie, it was anticipated in the prior art.
Third. Confining complainant's alleged invention within the limits
we hâve herein suggested, it is not in any way infringed by the défend-
ants' apparatus and method of baling and compressing.
We think, for thèse .reasons, that the decree of the Circuit Court
dismissing complainant's bill was right, and it is affirmed.
129 F.— 24
STÛ 129 ffBDËEÀL EEPOETEE.
BARBER V. NATIONAL CARBON CO. et al.
(CSrcuit Court of Appeals, SIxth Circuit May 4, 1904.)
No. 1,143.
1, Patents— Suit fob Infeingemest— Construction of Plea..
A plea to a bill for infringement of a patent alleged that complainant
was employed by défendant, a corporation engagea in the manufacture
of carbons, as a mechanical engineer, and agreed to give bis time, skill,
and attention and inventive ability to tbe service of défendant in and
about tbe cheapening and improving of the process of electroplating,
and other processes in tbe manufacture of carbons; that wbile so em-
ployed, and at defendant's expense, he made tbe inventions covered by
tbe patent, wbicb consist of a process and machine for electroplating;
that sucb Inventions and improvements "belong" to défendant; that
"said défendant is entitled to the perpétuai use of tbe same, and that,
by reason of the facts bereinbefore stated, * • » complainant is not
entitled to any relief prayed for in said bill of complaint, but that said
défendant * * * is entitled and bas the right to the perpétuai use
in its business for its purposes" of said inventions. Held, that such
plea should be construed as a plea of license only, which was ail that was
required to constitute a défense to the bill.
2. Same— Infbingement— iMPLiED Xicense.
Défendant company, which was a manufacturer of carbons, employed
complainant as a mechanical engineer on salary ; a part of bis duty
being to dévote bis time and skill to tbe improvement and cheapening
of tbe processes of sucb manufacture, an essential one of which was
electroplating. Wbile so employed, complainant invented a valuable
process for electroplating, and a machine for carrying out tbe same, both
of which he patented. Under bis directions, spécial buildings were made
at defendant's vyorks to accommodate seven of such machines, six of
which were built and installed also under bis direction, and a seventh
was installed after his employment ended. Held, that while défendant
did not become the owner of the patent, in the absence of an express agree-
ment to that effect, it had an implied license to use the seven machines,
and any replacement of tbem, together with the patented process, In the
manufacture of carbons, so long as it contlnued in the business.
Appeal from the District Court of the United States for the North-
ern District of Ohio.
This is a bill alleging Infringement of letters patent No. 523,099, issued to
tbe complainant, Clarence M. Barber, July 17, 1894. The patent is both for
a process and an apparatus for electroplating.
The défendants flled a plea In the following words and figures:
"lu the Circuit Court of the United States, Northern District of Ohio, Eastern
Division.
"Clarence JI. Barber, Complainant, v. Tbe National Carbon Company, et al..
Défendants. In Bquity.
"The défendants, the National Carbon Company, Washington H. Lawrence,
Benjamin F. Miles, Webb C. Hayes, Harvey E. Hackenberg, John H. Osborn,
Myron T. Herrick, and James Parmelee, by protestation, and not acknowledg-
ing or confessing ail or any part of the matters and things in said bill of com-
plaint mentioned to be true in such manner and form as therein set forth, for
their joint and several plea theveto say: Said National Carbon Company is
a corporation duly organized and existing, and engaged in the business of
manufactùring carbons, and that the other défendants herein are offlcers and
dlrectors of said National Carbon Company, excepting said John H. Osborn.
If 2. See Patents, vol. 38, Cent. Dig. §§ 125, 302.
BAEBEB V. NATIONAL OAEBON CO. 371
That, In the manufacture of carbons, one of the Important processes conslsts
in electroplating, and that an economical apparatus and process for electro-
plating Is very useful and esseutial to the proper and successful conduct of
said business of manufacturlng carbons. That in the fall of 1889 the said
National Carbon Company, being eugaged in such manufacture, and being de-
sirous of cheapening and improving the process of manufacturing, employed
the complainant herein, Clarence M. Barber — he claiming at that time to be,
and the défendant company employing him by reason of such clalm upon his
part, a skilled mechanical engineer^and it paid to him a salary for hia serv-
ices of forty dollars per week. Thèse défendants say that said Barber was so
employed for the express purpose of giving to the company the beneflt and
advantages of his mechanical and inventive skill in cheapening and improv-
ing, among other proeesses used by said company, that of electroplating, and
to assist the officers and employés in making such inventions. Défendants
say that said complainant accepted said employment for the purpose above
stated, and agi-eed to give his time, skill, and attention and inventive ability
to the service of said défendant company in and about the cheapening and Im-
proving of the process of electroplating and other processes in the manufac-
ture of carbons. That on or about June 1, 1893, this défendant increased the
wages of complainant to $3,000 per year, which it paid to him untll he severed
his connection with the company on or about April, 1894. Thèse défendants
further say that said complainant, while so employed, devoted a large part of
his time to expérimenta in the Une of devising and perfecting a process for
cheapening and improving the System of electroplating; that, for that pur-
pose, he was furnished with ail needed assistance by the said carbon compa-
ny, and with ail such material as he desired to use for such purpose; that he
was speclally employed to devise and perfect processes in the manufacture
of carbons, and particularly the process of electroplating, among others; that
his skill, ability, and services in that direction were paid for by the défend-
ant carbon company, and his inventive ability, time, and skill had been sold
to and purchased by the défendant company, so far as the same pertained to
the process of electroplating, and other processes for cheapening and perfect-
ing the manufacture of carbons. Thèse défendants say that said complainant
devised the alleged patented invention while in the employment of the said
défendant carbon company; that his employment was expressly In the Une of
such devising, inventlng, and improving; that the défendant company fur-
nished the material, tools, and everythlng necessary to enable him to make
such Invention; that the same was in the Une of his employment, and that
the improvements and inventions claimed by the complainant to hâve been
patented, as in the bill set forth, belong to the National Carbon Company;
that said défendant is entltled to the perpétuai use of the same, and that, by
reason of the facts hereinbefore stated, and by reason of the employment of
said complainant by the défendant carbon company, and the character of said
employment, complainant is not entitled to any relief prayed for In said bill
of complaint, but that said défendant carbon company is entitled and has the
right to the perpétuai use, in its business, for its purposes, of the improve-
ments and claimed Inventions of the complainant In his bill set forth. Ail of
which matters and thlngs the défendants aver to be true, and plead the same
to said bill, and ask the judgment of the court whether they shall be required
to make further answer. The National Carbon Company,
"By W. H. Lawrence, Président"
To this the complainant filed a replication. Evidence was taken, and the
case heard upon the issue thus presented by the plea, whereupon the court
below dismissed the bill, flnding that the défendants had not infringed, other
than by the use of the ijrocess in seven electrotype machines made according
to the claims of the patent, and that, under the évidence, the défendants were
entitled to a gênerai license to use the process and machine in connection with
their business as manufacturers of carbons.
R. S. Taylor, for appellant.
Squire, Sanders & Dempsey, and Frederick P. Fish, for appellees.
Beiore LURTON, SEVERENS, and RICHARDS, Circuit Judges.
372 129 FBDEEAL KBPOETEH. '
LURTON, Circuit Judge, after making the foregoing statement,
delivered the opinion of tiie court.
The discussion has largely turned upon the proper interprétation
of the plea. The appellant insista that it is a good plea of title
to the "inventions" made by Barber, and that an agreement to give
onc's time, skill, and inventive ability is, in légal effect, an agreement
that the fruit of his inventions shall become the property of his em-
ployer. By this method of reasoning it is sought to secure a holding
that the plea is a good plea of title, notwithstanding the absence of
any averment that there was an "agreement" that the company should
hâve title to his inventions, or to any patent that he might obtain
for them. In short, a distinction is made between an employment
under vvhich one agrées "to use his best efforts and dévote his knowl-
edge and skill in devising and making improvements" in an article
made by his employer, and an agreement by which the employé
"agrées to give his time, skill, and attention and inventive ability"
to the service of his employer in and about cheapening and improv-
ing the process used in his business. In the case fîrst put, which is
precisely the case stated in Hapgood's bill, as reported in Hapgood
V. Hewitt, 119 U. »S. 226, 229, 7 Sup. Ct. 193, 197, 30 L. Ed. 369, the
bill was held bad, the court saying:
"ïhere is nothing set forth in the bill as to any agreement between the cor-
poration and Hevvitt that the former was to hâve the title to his Inventions.
or to any patent that he might obtain for them. The utmost that can be made
ont of the allégations is that the corporation was to hâve a license or right
to use the inventions in making plows. It is not averred that anything passed
between the parties as to a patent. We are not referred to any case which
sustains the vIew that, on such facts as are alleged in the bill, the title to the
invention or patent for it passed."
There is some room for the distinction insisted upon in the décision
of District Judge Graham in Hapgood v. Hewitt (C. C.) Il Fed. 422,
and the statement by the Suprême Court in the same case (119 U. S.
233, 7 Sup. Ct. 193, 30 L. Ed. 36g) that they concurred in the view ;
of the Circuit Court, although that gênerai statement is followed
later by the paragraph set out above.
Whiting V. Graves, 3 Ban. & A. 222. Fed. Cas. No. 17,577, and Wil-
kens v. Spafiford, 3 Ban. & A. 274, Fed. Cas. No. 17,659, both hold
that only a license, exclusive or otherwise, according to the terms
of agreement, would resuit from a contract for the inventive ability
of a workman. We do not fînd it important to décide the question
thus mooted. If it be concluded that it is not essential that there
shall be an express agreement that the employer is to hâve the title
to the inventions of tlie workman, or to any patent he may obtain
for them, if the contract provided that the employer should hâve the
benefit of the employé's inventive faculties, it does not necessarily
follow that this plea is to be construed as other than a plea of Hcense.
We are not required to assume, as a necessary conclusion from the
fact that Barber is averred to hâve agreed to give the company his
"time, services, and inventive ability," that the pleader intends to
assert title. The plea is to be construed by looking to ail of its aver-
ments, and from the whole document détermine whether the défense,
from the facts stated and the conclusions drawn, is that of license or
BARBER Y. NATIONAL CARBON OO. 873
tîtle. To stand narrowly upon an inference that the title îs claimed
trom the contract to give the company the benefit of his inventive
abilities will be to ignore other facts, and, more than ail, to ignore
the conclusion which the pleader himself drew from the facts he had
stated.
The business of the carbon company was not the making or sell-
ing of machinery or mechanism for any purpose. They were en-
gaged in making carbons. The plea states this, and that a part of
the process consisted in electroplating such carbons. The plea then
avers that Barber agreed to give his "skill, attention, and inventive
ability to the service of said défendant company in and about the
cheapening and improving of the process of electroplating, and other
processes in the manufacture of carbons." At most, the employ-
ment was for this purpose, Why shall we deduce the conclusion that
anything more than a license to use such inventions as he should
make in the business of the company would resuit from^ an agree-
ment of that kind ? But the conclusion which the plea draws from
the agreement stated is in accordance with the tendency of the law
to préserve to a workman as large a benefit from the results of his
intellectual faculties as is consistent with the contract between him
and his employer. The plea concludes by claiming that "the défend-
ant is entitled and has the right to the perpétuai use, in its business,
and for its purposes, of the improvements and claimed inventions
of the complainant in his bill set forth," etc. The italics are ours.
A right to a use in its business and for its purposes is a license,
and is a very différent estate from a title to the inventions of the
complainant. We think, therefore, the proper construction of the
plea is that the pleader is to be understood as setting out a state of
facts from which he deduced the claim of a license in behalf of the
défendant, and that it was not intended to set up a claim of title to
the invention. Tlie establishment of a license was ail that was re-
quired to constitute a défense, and there was no necessity for plead-
ing more than that. Any other construction would lead to the con-
séquence that the plea would be double, as claiming botb the title
to the invention and a license to use it. We do not think the plea
intends this, but only to lay the ground upon which at least a license
would resuit, and then to put forward the claim of a license as a
sufKcient défense to the niatter of the bill.
This brings us to the scope of the license implied from the cir-
cumstances as established by the évidence in support of the plea.
The évidence does not show any contract by which Barber was to
make inventions or dévote his inventive faculties to the service of
the Carbon company, or any agreement that any inventions should
helong to the employer, or any patent which he should obtain there-
on. It does show that he was employed because he was a mechanical
engineer, and that he was expected to dévote his time and service
to the cheapening of the processes used by the carbon company.
But nothing was said upon the subject of inventions, or the use of
his inventive faculties for their benefit, unless an agreement to dévote
his knowledge, skill and service to the cheapening and improving of
the processes used in the factory involves the inventive faculty also.
374 129 FBDEBAL BBFOBTEB.
The précise terms of his employment are somewhat indefinite, but
the things which Barber set to do and that he continued to do justiîy
the interprétation the court below put upon the contract of employ-
ment. In the course of his employment, Barber made the very valu-
able invention for which he obtained a patent. That his employers
knew of his purpose to apply for a patent, we, from the évidence,
think most Hkely. When he built and established his fîrst machine,
he placed thereon plates with an inscription thereon, "Patent Applied
For." When this machine was started, the officers and directors vvere
called in to inspect it. It is impossible to believe that thèse plates
escaped their observation. The fact that the plates were thus con-
spicuously affixed is at least indicative of Barber's intention to pro-
tect his invention with a patent, and we can but believe that this fact
was also known to his corporation.
The fact of knowledge of Barber's intention to patent his invention,
however, is only significant in respect of the scope of the license im-
plied from the fact that he made his invention while in the employ-
ment of the Carbon company, and that, while so in their employment,
six machines were constructed, wholly or partly, for the company, un-
der his personal direction, and without any announcement of any
purpose to claim a royalty for their use. The évidence shows that
the machine for the use of the process of the patent was one of costly
character, occupying very great space. To use them profitably, the
factory must be specially constructed upon plans adapted to furnish
the space needed. To properly install Barber's machines, spécial de-
signs for buildings were therefore prepared under Barber's direction,
and machines were either built or started according to his plans
before he was discharged. In one of defendant's factories there
was space especially designed for another of his machines, and after
his discharge a seventh machine was built for the place thus prepared.
In Withington-Cooley Co. v. Kinney, 68 Fed. 500, 15 C. C. A. 531,
537> we had the question of the scope of duration of a license im-
plied from service, and said :
"The duration and scope of a license must dépend upon tlie nature of the
invention, and the clrcumstances out of which an implied license must be pre-
sumed, and both must at last dépend upon the intention of the parties."
In that case the employer was a manufacturer of power presses
for sale, and the employment of Kinney had relation to the making
of patterns and drawings for such patterns. Kinney made an im-
proved press, and built patterns by which such improved presses were
made in the shop for the purpose of supplying his employers' trade.
We held, under the circumstances, that Kinney must be presumed
to intend that his employer should use his improvement in such new
machines as he should make while personally engaged in the busi-
ness of supplying such machines to the trade. We therefore held that
the license, to be presumed, "was not limited by the mère life of the
patterns, but was intended as an authority to make and sell power
presses embodying Kinney's improvement so long as Babcock should
continue in business."
, In Solomon v. United States, 137 U. S. 342, 346, 11 Sup. Ct. 88,
89, 34 L. Ed. 667, Clark, while in the employment of the government
BABBEB T. NATIONAL OABBON CO. 875
and at the expense of the government, devised a self-canceling rev-
enue stamp, which was adopted by the government upon his recom-
mandation. It was held that a perpétuai license to make and use that
stamp was to be presumed. In that case the principle was said to
be this :
"If one Is employed to devise or perfect an Instrument, or a means for ac-
complishing a prescribed resuit, he cannot, after successfully accomplishlng
the work for which he was employed, plead title thereto as against his em-
ployer. That which he bas been employed and paid to accomplish becomes,
when accomplished, the property of his employer. Whatever rlghts as an in-
dividual he may hâve had in and to his inventive powers, and that which they
are able to accomplish, he has sold in advance to his employer. So, also, when
one is in the employ of another in a certain line of work, and devises an im-
proved method or instrument for doing that work, and uses the property of
his employer and the services of other employés to develop and put in prac-
ticable form his Invention, and explicitly assents to the use by his employer
of such invention, a jury or a court trying the facts is warranted In finding
that he has so far recognlzed the obligations of service flowlng from employ-
ment, and the beneflts resulting from his use of the property, and the assist-
ance of the co-employés, of his employer, as to hâve given to such employer
an irrévocable license to use such invention."
In Lane & Bodley v. Locke, 150 U. S. 193, 14 Sup. Ct. 78, 37 L. Ed.
1049, ^ license to continue to make and use a stop valve in their
business was presumed. In Gill v. United States, 160 U. S. 426, 16
Sup. Ct. 322, 40 L. Ed. 480, the cases are ail reviewed, the principle
upon which they rest held to be an application of the law of estoppel
in pais.
In view of the fact that buildings specially designed for the use
of Barber's process and apparatus were constructed under his direc-
tion, we think the presumption is that he intended to grant to the
carbon company the right to use his process in connection with the
machines, for which space in the several factories had been specially
arranged with his knowledge and under his direction. The right of
use presumed is the right to use such number of machines as had
been prepared for, and that the right is not limited to the life of the
particular machine, but will include replacements so long as the
carbon company continues in the manufacture of carbons. The scope
of the license therefore includes the seventh machine, constructed
after Barber was discharged, to occupy the place prepared for it under
Barber's direction. By his conduct, Barber has estopped himself
from asserting that the use of his invention to this extent is an
infringement of his right as a patentée.
The défendants hâve therefore not exceeded the license implied
from the facts, and the decree is, upon this ground, aiïirmed, so far as
it dismissed the bill of the complainant.
The following is the opinion of the District Court (Wïng, District
Judge):
A bill has been flled in this case alleglng Infringement of letters patent No.
523,099, issued to the complainant Clarence M. Barber, July 17, 1894, for a
process and apparatus for electroplating. The défendants flled a plea. To
this plèa the complainant flled replioatlon. Testimony has been taken by both
the complainant and the défendants, and after arguments the cause has been
submitted.
376 129 FBDEEAL REPORTER.
The plea sets forth that the Invention described and clalmed In the patent
Issued to the complainant was discovered and perfected whlle the complainant
was in the employ of the défendant corporation, the National Carbon Com-
pany, and that in the experiments, and the expenditure of the worli, labor,
material, and money, nothing of any of thèse contributing faetors was used
except what belonged to the said défendant the National Carbon Company.
The plea allèges, In terms, that the défendant was engagea in the business
of manufaeturing earbons ; that in such manufacture one of the important
processes consists in electroplatlng, and that an economlcal apparatus and
proeess for electroplatlng is very useful and essential to the proper and suc-
cessful conduct of said business of manufaeturing earbons. ïhe plea further
allèges as follows : "That In the fall of 1889 the said National Carbon Com-
pany, being engaged in such manufacture, and being desirous of eheapening
and improving the proeess of manufaeturing, employed the complainant hereiu,
Clarence M. Barber — he claiming at that time to be, and the défendant Com-
pany employlng hlm by reason of such clalm upon bis part, a skilled mechan-
ical engineer — and it paid to hlm a salary for his services of forty dollars per
week. Thèse défendants say that said Barber was so employed for the express
purpose of giving to the Company the benefit and advantages of his mechau-
ieal and inventive skill in eheapening and improving, among other proeesses
used by said company, that of electroplatlng,, and to assist the offlcers and em-
ployés in making such inventions. Défendants say that said complainant ac-
cepted said employment for the purpose above stated, and agreed to give his
time, skill, and attention and inventive ability to the service of said défendant
Company in and about the eheapening and improving of the proeess of electro-
platlng, and other processes In the manufactm-e of earbons. * * • Thèse
défendants say that said complainant devised the alleged patented invention
while in the employment of the said défendant carbon company ; that his em-
ployment was expressly in the Une of such devising, inventing, and Improving ;
that the défendant company furnished the material, tools, and everything nee-
essary to enable bim to make such Invention ; that the same was in the Une
of his employment, and that the improvements and inventions elaimed by the
complainant to hâve been patented as in the bill set forth belong to the Na-
tional Carbon Company ; that said défendant is entitled to the perpétuai use
of the same ; and that by reason of the facts hereinbefore stated, and by rea-
son of the employment of said complainant by the défendant carbon company,
and the charaeter of said employment, complainant is not entitled to any relief
prayed for In said bill of complaint, but that said défendant carbon company
is entitled and bas the rlght to the perpétuai use, in its business, for its pur-
poses, of the improvement and clalmed inventions of the complainant In his
bill set forth."
The complainant urges that, because It Is a fundamental rule in equity plead-
Ing -that a plea shall présent a single point for adjudication, and because thls
plea sets up more than one défense, it Is "bad in law." It Is further urged that
the proof does not support the charge in the plea that the complainant agreed
togive his inventive ability to the service of the défendant company, nor the
clalm that the Invention patented to the complainant belongs to the National
Carbon Company, and, further, that the court can conslder but thls one défense
set up in the plea, to wlt, the défense of ownership of the patent by the de-
fendant corporation, and that In conséquence the decree should be for the com-
plainant Thls is, in efCect, an objection to the plea for duplicity. The au-
thorities are numerous, and settle the doctrine in equity, that the form of a
plea may not be objected to by the complainant after repllcation flled and
proof taken. In the case of William Oliver and Micajah T. Williams et al. v.
Robert Platt, 3 How. 333, 411, 11 L. Ed. 622, the Suprême Court of the United
States say : "The objection of multifarlousness cannot, as a matter of rlght,
be taken by the parties, except by demurrer or plea or answer; and, If not
so taken, it Is deemed to be waived. It cannot be insisted upon by the parties
even at the hearing In the court below, although it may at any time be taken
by the court sua sponte, wherever it is deemed by the court to be necessary or
proper to assist it in the due administration of justice. And at so late a
perlod as the hearing, so reluctant is the court to countenance the objection
that, 1( It can get on in the cause to a final decree without serions embarrass»
BARBER y. NATIONAL CARBON CO. 87T
ment, It wlll do so, disregarding the fault or error, when It bas been acqulesced
In by the parties up to that time." To the same effect are the following :
Stead's Ex'rs v. Course, 4 Cranch, 403, 412, 2 L. Ed. 660 ; Hughes v. Blake, 6
Wheat 453, 472, 5 L. Ed. 303 ; State of Rhode Island and Providence Planta-
tions V. State of Massachusetts, 14 Pet. 210, 257, 10 L. Ed. 423; John G.
Nelson et al. v. John J. Hill et al., 5 How. 127, 131, 12 L. Ed. 81 ; Farley v.
Kittson, 120 U. S. 303, 314, 7 Sup. Ct. 534, 30 L. Ed. 684; Sharon v. HIU (C.
O.) 22 Fed. 28, 29; Converse v. Michlgan Dairy Co. et al. (0. O.) 45 Fed. 18:
Ranger v. Champion Cotton Press Co. et al. (C C.) 52 Fed. 611.
The proof does not show that the complainant agreed to convey any inven-
tion that he might discover during hia employment by the défendant corpora-
tion, or any patent Issued therefor, to such corporation. I thlnk it clear,
however, f rom the proof, that Barber was employed by the défendant cor-
poration, because he was a mechanlcal engineer, to assist In making improve-
ments in the methods in use by the company in the préparation of Its products,
although such improvements might amount to Invention. The convlnclng fact
in this connection Is that Barber himself so Interpreted bis dutles under bis
contract of employment. He admittedly spent his time, whlch belonged to the
Company, in making experiments which led to the Invention for whicb he ob-
tained a patent, and perfected such invention by material of the company, the
labor of himself and others paid by the company, and the use of considérable
money of the company. To find that he was doing thls on hls own account
would be to attribute to him dishonest motives. The only understandlng upon
his part of his duties under hls contract of employment that would justify the
course whicb he himself states that he pursued would be that he was employed
to do the things which he did do.
The Mil charges gênerai infringements. There Is no proof of Infringement
by any o*" the défendants except the use by the défendant corporation, the Na-
tional Carbon Company, of six machines which the complainant caused to be
constructed whlle in the employ of the company, and with its means and ma-
terial, and a seventh machine constructed after his discharge, but in a build-
ing specially adapted by the complainant for the location of such a machine.
The patent is for a process. The facts shown by the proof, under the alléga-
tions of the plea, make It clear to me that the défendant the National Carbon
Company Is entitled to a gênerai license under the patent, so far as the In-
vention as described therein may be used In connection with the manufacture
of carbons.
The bill shonld be dismissed.
378 129 FEDERAL EEPORTEK.
THOMSON-HOUSTON ELECTRIC CO. v. OHIO BRASS CO. et al.
(Circuit Court, D. Massachusetts. April 27, 1904.)
No. 1,237.
1. Patents— Invention— CoMBiNATioN oe Aggkegation of Old Eléments.
Tlie combination of two known devices in a single device, wliich results
In a new utility by uniting the functions of tlie two in a single article,
may Involve invention.
2. SAME— InFEINGEMENT— INSTJLATING TUEN-BUCKLE.
The Van Depoele patent, No. 394,039, claim 18, for a turn-buckle the
body portion of which is composed of insulating matërial, for use ou the
span wire in overhead trolley Systems, is for a combination which unités
the functions of a turn-buckle and an insulator, previously used sepa-
rately, and discloses invention. Also held infringed.
In Equity,
Thomas J, Johnston, for complainant.
Edmund Wetmore and Macleod, Calver & Randall, for défendants.
HALE, District Judge. This suit is brought for infringement of
claim i8 of letters patent No. 394,039, dated December 4, 1888, to
Charles J. Van Depoele. The claim alleged to hâve been infringed is
as follows : "A turn-buckle, the body portion of which is composed
of insulating matërial, substantially as described." The défenses are
that there is no invention, and that there has been no infringement.
The claim covers an insulated turn-buckle, such as is alleged to be used
on an electric railway under the suspended conductor System. The
purpose of the device is to unité in a single structure means for tight-
ening the span wire and means for furnishing insulation between the
trolley wire and the ground. It is well known that the grounded rails
on an electric road usually form the return circuit of an overhead
trolley railway. Necessarily the trolley wire must be carefully in-
sulated from the ground, or from any structure electrically connected
with the ground. It is alleged that the practice is to insulate the
trolley wire itself from the span wire, and then to place an insulating
turn-buckle in the span wire also, so that, if any accident should de-
stroy the insulation at the first point, there would still remain effective
insulation between the electric current and the ground. Previous to
this device it is alleged that a metallic turn-buckle had always been used,
with separate insulating devices wherever such insulation was required.
The problem in the mind of the inventor was to unité the two func-
tions of tightening the span wire and at the same time affording
an electrical barrier to prevent the passage of the electric current.
The défendants urge the défense of invalidity. They insist that
turn-buckles were old, and insulating matërial was old, and that it
was net invention to put them together. It does not appear that
thèse two éléments hâve ever been put together until this union was
effected by Van Depoele. The devices referred to in the prior art
are ordinary metallic turn-buckles and swivels. Some of the swivels
to which référence is made contain insulating matërial, and are al-
1 1. See Patents, vol. 88, Cent. Dig. § 29,
THOMSON-HOTJSTON ELECTRIC CO. V. OHIO BRA83 CO. 379
leged to hâve been used for purposes of insulation as well as for tlie
usual purposes of swivels. Where swivels are so constructed, they
require only the addition of a screw to make them insulating turn-
buckles. The Clark patent, No. 227,095, cornes the nearest to pre-
senting a case of anticipation, but this patent, in any event, requires
the function of tightening to be added to the swivel in order to make
it a référence for an insulating turn-buckle. It is claimed, too, that
the Clark patent does not even présent an insulated swivel, and that
provision is made for preventing the insulation, instead of eflfecting
it. We think, however, the discussion on thèse Unes is immaterial.
The whole question of invalidity is presented clearly and distinctly by
the learned counsel for the défendants in his daim that the turn-buckle
of the patent in suit présents merely a union of two well-known de-
vices, namely, the old metallic turn-buckle and insulating material,
which also was old. It is urged with great force that the mère uniting
of two instruments is not invention. The well-known theory of the
patent law is cited as contained in the Suprême Court décision that
it is not invention to substitute rubber for part of the lead in lead
pencils, so that the lead pencil will form a combined pencil and eraser.
Reckendorfer v. Faber, 92 U. S. 347, 23 L. Ed. 719. See, also, Rub-
ber Tip Pencil Co. v. Howard, 20 Wall. 498, 22 L. Ed. 410. The
Suprême Court bas announced the doctrine with great clearness that
the combination of old devices into a new article without producing any
new mode of opération is not invention. Pickering v. McCuUough,
104 U. S. 310, 26 L. Ed. 749; Floresheim v. Schilling, 137 U. S. 64,
1 1 Sup. Ct. 20, 34 L. Ed. 574. Thèse cases présent the uniting of two
functions without adding any new utility. On this subject the well-
known doorknob case is perhaps the leading one, and demands careful
considération. Hotchkiss v. Greenwood, 11 How. 248, 13 L. Ed. 683.
The patent in that case was for a clay or porcelain doorknob. The
court said:
"But in the case before us the knob Is not new, nor the metallic shank
and gpindle, nor the dovetail form of the cavlty In the knob, nor the meana
by which the metallic shank is securely fastened therein. AU thèse were
well known, and in common use ; and the only thing new Is the substitution
of a knob of a différent material from that heretofore used in connection with
this arrangement. Now, it ma y very well be that by Connecting the clay or
porcelain knob with the nnetallic shank in this well-known mode an article
is produced better and cheaper than in the case of the metallic or wood knob ;
but this does not resuit from any new mechanical device or contrlvance, but
from the fact that the material of which the knob is composed happens to
be better adapted to the purpose for which it Is made. The improvement
consists in the superiority of the material, and which is not new, over that
previously employed in making the knob. But this, of Itself, can never be
the subject of a patent. No one will prétend that a machine made in whole
or in part of materials better adapted to the purpose for which It is used
than the materials of which the old one is constructed, and for that reason
better and cheaper, can be dlstlnguished from the old one ; or, In the sensé
of the patent law, can entitle the manufacturer to a patent The différence
is formai, and destitute of ingenuity or invention. It may afCord évidence
of judgment and skill in the sélection and adaptation of the materials in the
manufacture of the instrument for the purposes intended, but nothing more."
But on careful examination of the device claimed in the patent in
suit, and of ail that class of authorities to which we hâve called atten-
tion, we are satisfied that the insulated turn-buckle does not corne
380 129 FEDERAL REPORTER.
within the reasoning of thèse cases. In the lead pencil case no new
utility was presented by the patent. The device still remained a lead
pencil at one end and an eraser at the other end. The combination
of the old devices did not produce any new and single mode of opéra-
tion. The two old functions were left of erasing at one end and of
writing at the other. So, also, in the doorknob case, the patent did not
produce any new mode of opération. It did not unité any two func-
tions. The doorknob was still a doorknob, and only a doorknob. It
presented a plain, simple substitution of materials and an improvement
of a commercial product by such substitution. But, while the com-
mercial product was improved, it was not made functionally différent.
The courts hâve, however, distinctly held that where to a prior struc-
ture a part is added which gives a new utility, there is invention. In
the Faber Case, which we hâve cited, Mr. Justice Hunt clearly draws the
distinction between a case where no new utility is found and a case
in which a new combination does resuit in a new utility. He says, in
speaking of the resuit in the matter of the rubber-ended lead pencil :
"A pencil Is laid down and a rubber is taken up, one to write, tlie other
to erase. A pencil is turned over to erase with, or an eraser is turned over
to Write with. The principle is tlie same in both cases."
He further, in his opinion, shows other instances of the same char-
acter. He says :
"It is the case of a garden rake, on the handie end of which should be
placed a hoe, or on the other side of the same end of which should be placed
a hoe. In ail thèse cases there might be the advantage of carrying about one
Instrument instead of two, or of avoiding the liability to loss or misplaclng
of separate tools. The instrument placed upon the same rod might be more
convenient for use than when used separately. Each, however, continues to
perform its own duty, and nothing else. No efCect is produced, no resuit
follows from the joint use of the two. A handie in common — a joint handie
— does not create a new or combined opération. The handie for the pencil
does not create or aid the handie for the eraser. The handie for the eraser
does not create or aid the handie for the pencil. * * * Perfection of
workmanahip, however much it may increase the eonvenience, extead the
use, or diminish expense, is not patentable. * * • The combination, to
be patentable, must produce a différent force or efCeet, or resuit in the com-
bined forces or proeesses from that glven by tbeir separate parts. There
must be a new resuit produced by their union. If not so, it is only an ag-
gregation of separate éléments. An instance and an illustration are found ia
the discovery that by the use of sulphur mlxed with indla rubber the rubber
could be vulcanlzed, and that without this agent the rubber could not be
vulcanized. The combination of the two produced a resuit or au ar-
ticle entirely différent from that before in use. * ♦ * A stem-winding
watch key is another instance. The office of the stem is to hold the watch
or hang the chain to the watch. The office of the key is to wind it. When the
stem is made the key, the joint duty of holding the chain and winding the
watch is performed by the same Instrument. A double effect is produced, or
a double duty performed, by the combined resuit. In thèse and numerous
like cases the parts co-operate in producing the final effect; sometimes si-
multaneously, sometimes successively. The resuit cornes from the combined
effect of the several parts, not simply from the separate action of each, and
Is therefore patentable."
In the case at bar the insulated turn-buckle présents a case in which
there is combined in one device the utility of tightening the wire and
of insulating it at the same time and in the same instrument. We
ihink this involves invention. The device is a very simple one, but its
THOMSON-HOUSTON ELECTEIG CO. V. OHIO BEAS8 OO. 381
siniplicjty should nol be urged against its patentability. As in the case
of the watch key, a double effect is produced, and a double duty per-
formed by the combined resuit. To the ordinary duties of the turn-
buckle is added the new function of insulation. After the combina-
tion is made it seems entirely easy and simple, so easy and simple that
expert witnesses readily say that nothing was involved in it but the mère
"expected skill of the mechanic." But we must remember that we
are examining a combination after it is made, and we must net be
misled by what Judge Putnam calls "the ease with which interested
ingenuity dresses up matters occurring after the fact." American
Pulp Company v. Howland Company (C. C.) 70 Fed. 986. However
obvious the combination before us may be said to hâve been, it was
never made before, so far as the testimony shows. In Webster Loom
Company v. Higgins, 105 U. S. 580, 26 L. Ed. 1177, Mr. Justice Brad-
ley says :
"It may be laid down as a gênerai rule, thougli perhaps not an Invariable
one, that, If a new combination and arrangement of known éléments produce
a new and bénéficiai resuit never attained before, it is évidence of invention.
• * ♦ It may bave been under their very eyes. Tbey may almost be said
to hâve stumbled over It, but they certainly failed to see it, to estimate its
value, and to bring it into notice. • * * now that it bas succeeded, it
may seem very plaln to any one that he could bave done it as well. Tbis is
often the case with inventions of the greatest merit."
In Régent Company v. Penn Company, 121 Fed. 83, 57 C. C. A. 334,
Judge Baker says :
"The device seems exceedingly simple, but its simplicity in such an old
field should be a warning against a too ready acceptance of the ex post facto
wisdom of the bystander."
On examination of the device in suit, we think it présents more than
an aggregation. Although it is a simple device, under the great mass
of patent décisions relating to simple devices we think this may prop-
erly be held not to hâve been the resuit of the mère use of the skill of a
mechanic, nor the mère use of the reasoning faculty, but to présent
some patentable invention.
It remains for the court to inquire whether or not the patent has
been infringed. The device of the patent is a turn-buckle, the body
of which has in it an insulating material. The thought of the inventer
is, as we hâve said, to combine the process of tightening and insulating
in one instrument. To do this he makes an ordinary turn-buckle with
a body of an insulating material. The body of a turn-buckle is the
middle of it, the part between the ends, the portion that rotâtes. This
is the natural construction to give to the term "body portion" as used
in the patent. As you take a turn-buckle in your hand and look at it,
it naturally divides itself into two parts. The portion which constitutes
the body is one part, and the ends are the other part ; in other words,
the body is everything except the ends. This interprétation of the
word "body" is borne out by the use of the term in former patents.
It is not necessary that the whole of the body should be of insulating
material. The inventive idea was that there should be enough insu-
lation in the turn-buckle to make the device perform the function of
an insulator. The device which the défendants use is composed partly
of métal and partly of insulating material. The complainant's device
382 129 FEDERAL UEPORTBR.
has the same composition. Without describing in détail the two
devices, it is enough to say that when put to use the opération of the
device used by the défendants is that an insulating- material is placed
under compression, while in the complainant's device it is placed under
tension. The resuit is that the device used by the défendants appears
to be stronger and better adapted to resist strain than the device of
the complainant. But we cannot find that it is functionally différent.
It effects the same resuit by substantially the same method. The fact
that the construction used by the défendants improves the construction
of the complainant does not tend to prove that it does not infringe;
in fact, it must infringe before it can improve. In the récent case of
Electric Smelting Company v. Réduction Company (C. C. A.) 125 Fed.
926, Judge Coxe says:
"If the inventer produces a new and usefui resuit, he does not lose hls
reward because he or some one else subsequently renders it more usefui."
In the case at bar we find the défendants using a device which both
infringes and improves the complainant's device. It is not necessary
to décide whether the défendants themselves hâve effected the improve-
ment, or whether they are using an improvement that some one else
has invented. It seems clear to the court that there has been an in-
fringement by the défendants of the patent in suit. We conclude that
the patent is valid, and that it has been infringed.
A decree is to be entered for complainant for an injunction and for
an accounting.
KEMP V. McBRIDEj
(Circuit Court, D. Massachusetts. April 18, 1904.)
No. 1,708.
1. Patents— Anticipation — Febd Mechanism for Carding Machines.
The ICeiup patent, No. 718,130, for feed mechanism for carding ma-
chines, held valid as against the claim of an infrlnger that he was hlm-
self the original inventor of the mechanism covered thereby.
In Equity. Suit for infringement of letters patent No. 718,130,
for feed mechanism for carding machines, granted January 13, 1893,
to Harry Kemp. On final hearing.
Roberts & Mitchell and Robert Cushman, for complainant.
Patrick L,. McBride and Albert M. Moore, for défendant.
HALE, District Judge. This suit in equity is brought to restrain
the alleged infringement of a patent for feed mechanism for card-
ing machines, No. 718,130, issued to the complainant January 13,
1903. The answer of the défendant sets up that the machine de-
scribed in the patent in suit was invented by the défendant, and by
him introduced into public use, before it was invented by the com-
plainant. The défendant further in his answer allèges that the in-
vention and substantial parts of the same were introduced into pub-
lic use, and were advertised and sold by the défendant as his owa.
The novelty and utility of the invention are therefore admitted. The
KEMP y. h'bbide. 383
infringement of the patent is aiso admitted, uniess the court shall
find that the original invention was the defendant's, instead of be-
ing that of the complainant. The défendant shows in his évidence
that he has been placing the device upon the market, as well as ad-
vertising and selling it, and that he has himself applied for a pat-
ent for this identical invention. The only question, then, before
the court, is whether the complainant or the défendant is the true
inventor. The record shows that the défendant has submitted tes-
timony, and has, by counsel, appeared in a contest of the case, up
to the time of the final hearing. At that hearing, however, he did
not submit a brief, nor appear in court to argue his case.
The subject-matter of the invention relates to a feeding device,
for a carding engine. The patent in suit is for an improvement upon
the Apperly feeder. In the carding of wool, it is usual to arrange
three carding engines tandem. The first carding engine is called
the "first breaker" ; the second is called the "second breaker" ; the
third is called the "finisher." Between the first and second break-
ers, and between the second breaker and the finisher, some sort of a
feeding device is required to take the sliver of wool delivered from
the next preceding carding engine and feed it into the next succeed-
ing carding engine. This sliver of wool so delivered from engine
to engine consists of a coarse, untwisted strand or roping of partly
carded fibers. To this feeding mechanism the Kemp patent in suit
relates. The features of novelty in the feeding mechanism in con-
troversy consist of the pivoted plate attached to the carrier or trav-
eler, and in the parts carried by that plate. Thèse parts comprise
a pair of gears in train, mounted on yielding or movable bearings
in the plate, and adapted to carry feed-rolls of various diameters.
By thèse means the feed-rolls separate more or less, as may be re-
quired to accommodate the passage of the slivers of wool, which
may not be of uniform thickness, and the feed-rolls themselves may
be changed, if desired, rolls of larger diameter having a relatively
greater surface speed than rolls of smaller diameter. This process
enables the operator to feed the sliver of wool with greater or less
speed, as the exigencies of the work require. The gears are so con-
structed that they will remain in mesh, and insure the positive driv-
ing of the feed-rolls at ail points of séparation of the gear axes.
When a wide range of movement of the gear axes is desired, in order
to afford a considérable séparation of the feed-rolls, or to permit a
variation in the size of the change feed-rolls, the gears are con-
structed with elongated teeth, so that they will still remain in mesh
as their axes separate. As defined in the patent, the condition to
be observed is simply that the gear teeth shall be of greater depth
than the extrême range of séparation of the gear axes.
The testimony induces the court to believe that the machine em-
bodying thèse features was conceived by the complainant, the pat-
entée, in the latter part of the year 1898. At that time he made a
sketch showing the essential features of the invention. He also
made a leather-board pattern of it, and began the construction of a
model, partly of métal and partly of wood. He completed the
model in the early part of the year 1899. Ample testimony tending
384 129 FEDERAL EEPORïBa.
to show his invention, as above detailed, has been offered. ît ap-
pears "from testimony aside from that of the complainant that he
fully explained his invention to several parties. The testimony of
thèse witnesses is persuasive to the court. The record further shows
that in September, 1901, the patentée began the construction of a
full-sized working machine, embodying ail the features of his in-
vention. He completed this machine early in November, 1901,
and placed it in opération in the Mtm Mills, at Watertown, Mass.,
on Monday of the second week in November, 1901. From that
time forward the machine did practical work in the ^Etna Mills for
three or four months. This machine is in évidence, and has been
verified by witnesses who saw it, who helped Mr. Kemp to construct
it, and who operated it while it was running in the ^Etna Mills.
In 1902 the complainant applied for a patent for this machine,
and on January 13, 1903, the patent in suit was issued. The de-
fendant testifies that in May, 1901, he conceived the idea of mak-
ing the feed-rolls of a self-adjustable card-feeder. He does not
show what the exact device was which he claims to hâve conceived
at that time. He does not show affirmatively and conclusively that
the device which he conceived was the invention in controversy.
His bare assertion of his secret thought, unsupported by any corrobo-
rative évidence, is not satisfactory proof of the conception of the
invention. The earliest date of this inventive thought, which the
défendant has made out by sufhcient légal évidence, is the latter part
of November or the first of December, 1901, when he says he made
a machine like the infringing exhibit which is brought before the
court. This infringing machine is conceded to contain ail the élé-
ments of the patented invention. The date of the making of this
machine is established only by the verbal testimony of the défend-
ant and one of his men, and is not corroborated by any drawings,
models, or machines ; but it appears from the testimony that the
complainant's actual and practical use of his full-sized machine was
three or four weeks earlier than the date testified by the défendant to
hâve been the time when he made his first machine, and the testimony
shows that the complainant conceived the idea of his invention three
years before this time. It seems clear, then, upon examination of the
testimony, that, on the face of the record, the weight of the évidence
shows the complainant to be the first inventor.
The testimony before the court, however, is persuasive that, prior
to any date on which défendant claims to hâve made an invention, the
complainant fully described and explained his whole invention to the
défendant. Kemp had made McBride his licensee under an earlier
patent for another type of machine. In the course of negotiations re-
lating to the license under this earlier patent, Kemp disclosed to Mc-
Bride ail his ideas relating to feed mechanisms, patented and unpat-
ented, including the invention in controversy. He made sketches for
McBride and explained in détail to him the feeder of the patent in suit.
The testimony shows that he made thèse disclosures upon at least
three différent occasions between December, 1900, and June, 1901, and
this was before défendant had produced any feed mechanism at ail.
The court must therefore come to the conclusion that the complainant
m
was the first înventor of the device in controversy, and that the de-
fendant obtained his information concerning the device from the com-
plainant, and afterwards proceeded to put such invention upon the
public. In the Barbed Wire Case, 143 LJ. S. 275, 12 Sup. Ct. 443, 36
L. Ed. 154, Mr. Justice Brown commenta upon certain unpatented de-
vices claimed to be anticipatory of the patent in suit in that case, the
existence of which was proved only by oral testimony. Although his
language is not intended to apply to precisely such testimony as is
offered by the défendant in the case at bar, it is clearly descriptive of
this class of testimony. He says :
"Wltnesses whose memorles are prodded by the eagerness of Interested par-
ties to eliclt testimony favorable to themselves are not usually to be depended
upon for accurate information. Tlie very fact, which courts as well as the
publie hâve not failed to reeognize, that almost every Important patent, from
the cotton gin of Whitney to the one under considération, bas been attacked
by the testimony of witnesses who imagined that they had madé similar dis-
coveries long before the patentée had claimed to bave invented his device, has
tended to throw a certain amount of discrédit upon ail that class of évidence,
and to demand that it be subjected to the closest scrutiny. Indeed, the fre-
quency with which testimony is tortured, or fabricated outright, to build up
the défense of a prier use of the thing patented, goes far to justify the pop-
ular impression that the inventer may be treated as the lawful prey of the
infringer."
In further commenting upon the fact that the patentée, who had ob-
tained his patent, was in position to demand distinct proof of anticipa-
tion before his own patent could be overthrown, the court says:
"We are not satlsfled, however, that Jie [the patentée] was not the origl-
nator of the combination claimed by him of the coiled barb, locked and held
in place by the Intertwisted wire. It is possible that we are mlstaken in this,
but some one of thèse experimenters may hâve, in a crude way, hit upon the
exact device patented by Glidden, although we are not satisfled from this tes-
timony whether or by whom it was done. It Is quite évident, too, that ail, or
nearly ail, of thèse experiments were subsequently abandoned. But it was
Glidden, beyond question, who first published this device, put it upon record,
made use of it for a practlcal purpose, and gave it to the public."
We think that the language of the Suprême Court, in the case we
hâve cited, applies to, and is descriptive of, the testimony oflfered by
the défendant in attacking the patent in the case at bar. The com-
plainant has obtained his patent, and is entitled to protection under
that patent. There is not sufiiïcient testimony ofïered to defeat this
patent. The court will not at this point in the case make a decree fof
exemplary damages under Rev. St. U. S. § 4919 [U. S. Comp. St.
1901, p. 3394], but will leave the case for an accounting, and for a final
order on the question of damages after such accounting.
A decree is to be entered for complainant for an injunction and an
accounting.
129 F.— 28
3^ 129 FEDERAL BBFOBTE&
FELT & TÀRRANT MFG. CO. v. MBCHANICAL ACCOUNTANT CO.
(Circuit Court, D. Rhode Island. April 4, 1904)
No. 2,645.
1. Patents— Invention— Use of Devices Common in Otheb Arts.
To prevent tjie excessive rotation of a wheel by a stop, eitlier positive
or frietlonal, and to remove the stop to permit the further opération of
the wheel, are features so common in machine construction that they
cannot be monopolized by any mechanie for the purposes of a particular
art.
2. Same — Infbinpement— Adding Machines.
A preliminary injunction against tnfringement of the Felt patent, No.
, 371,496, for an improvement in adding machines, denied, the patent never
having been adjudicated, and it appearing from the showlng made that
there are serions doubts as to invention and as to the scope and valldlty
of the clalms.
In Equity, Suit for infringement of letters patent No. 371,496
for an adding machine, granted to D. E. Felt October 11, 1887. O^i
motion for preliminary injunction.
Munday, Evarts & Adcock and Henry L,ove Clarke, for complain-
ant.
Wilmarth H. Thurston and Warren R. Perce, for défendant.
BROWN, District Judge. The patent to Felt, No. 371,496, dat-
ed October 11, 1887, is for improvements in adding machines, and
especially for improvements upôn the machine of Felt's prior pat-
ent. No. 366,945, dated July 19, 1887. The patent in suit has not been
adjudicated, and the évidence of public acquiescence in the claims in
suit is not satisfactory, for the reason that the complainant's com-
mercial machine is not constructed under a single patent, but con-
tains also many features claimed in the prior patent. See Upton v.
Wayland (C. C.) 36 Fed. 691; George Ertel Co. v. Stahl, 65 Fed.
519, 13 C. C. A. 31. The defendant's machine is constructed under
letters patent to Turck, No. 679,348, dated July 30, 1901, and No.
720,086, datçd February 10, 1903; and the défendant, upon tliis
hearing, is entitled to the benefît of the presumption, from the grant
of letters patent, of a substantial différence between the inventions.
Kokomo Fence Machine Co. v. Kitselman, 189 U. S. 8, 23 Sup. Ct.
521, 47 L. Ed. 689. It is quite clear that the real questions in the
case are much narrower than the reasons advanced by the com-
plainant in support of the pétition for a preliminary injunction. Not
only must enlargement of the patent in suit by Felt's prior patent be
avoided, but it must also be recognized that JPelt's prior patent is in
the prior art of this case, and tends to narrow the claims in suit.
The case présents questions which are very close to the line between
invention and the application of the ordinary skill of mechanics skilled
in the art. Claims i, 2, 3, 4, 5, 6, 7, and 22 relate to stop devices
for preventing overrotation of numéral wheels. It is said by the
complainant that ail of the claims include a "positively acting carry-
ing stop-mechanism" as an essential élément. The function of the
stop is to correct the raechanical error of excessive rotation of a nu-
PELT & TAERANT MFG. CO. V. MECHANIOAL ACCOUNTANT OO. 387
meral wheel. A numéral wheel in a calculating machine is moved
in two ways : by impulses from the key-mechanism, and by impulses
from the carrying-mechanism. The carrying-mechanism is the means
whereby a complète révolution of one numéral wheel causes the next
higher wheel in the séries to advance one step. The motion of the
numéral wheel from either impulse is likely to be excessive. Over-
rotation causes inaccuracy in the opération of the machine. This me-
chanical difficulty of overrotation is common to counting machines in
which ail impulses are applied to the first wheel of the séries, and to
calculating machines in which an impulse may be appHed by a key-
stroke to any wheel of a séries. The prior art is full of stop devices
to prevent overrotation. It is sufficient, however, at présent, to refer
to Felt's prior patent, which shows a positively acting detent for this
purpose. The pressure of a key causes a detent to engage pins or
teeth in the numéral wheel, and thus to stop the wheel ; removal of
pressure allows a spring to withdraw the detent. The detent of
Felt's earlier patent stops rotation only when it is caused by the ac-
tion of the key-mechanism. The key-mechanism serves not only to
set the wheel in motion to perform a mathematical opération, but
also to govern the stop which prevents the mechanical error of over-
rotation. It is, of course, obvions that a stop device with the limit-
ed function oi arresting excessive motion of a wheel, or of any other
moving part, must not block the opération of the machine. It must
be released and taken out of the way to permit the machine to op-
erate. This is one of the commonplaces of machine construction,
and had been applied in many forms to adding machines. It was
old to provide a stop to prevent overrotation under impulses from
key-mechanism, and to hâve the key-mechanism control the stop.
It was also old to provide a stop to prevent overrotation under im-
pulses from carrying-mechanism, and to hâve the action of car-
rying-mechanism control the stop. The substance of one of Felt's
improvements was to add to his older machine stops to prevent
overrotation of the wheel when it was moved by carrying-mechan-
ism. Felt, in his spécification, referring to prior stop-motion de-
vices, says :
"The stop-motion device, which remains In action until the wheel of the
next lower order is uear to the completlon of its next révolution, is inappli-
cable, because it will prevent any movement of the numéral wheel by its own
l^ey."
It is apparent that there was no invention in the thought of using
both a key-stop and carrying-stop upon a single wheel, or in having
key-mechanism control a key-stop, and carrying-mechanism control
a carrying-stop. The difficulty which Felt points out is, in sub-
stance, that the old carrying-stop, controlled only by carrying-mech-
anism, will block one of the intended opérations of the calculating
machine. This was a difficulty that did not arise in a counting
machine where the impulses from the keys move directly only the
first wheel. The key-board of a calculating machine contains nine
keys for each numéral wheel. It is intended that the operator may,
at pleasure, operate any one of the numéral wheéls by striking a
key. If a carrying-stop, controlled only by carrying-mechanism, is
388 129 FEDERAL BKPOETBB.
used, thîs at times will be impossible. Felt introduced a carrying-
stop which is controlled by the carrying-mechanism, as in the prior
art; but added a new feature, which, so far as I am able to per-
ceive, was not in the prior art. It was necessary to release his car-
rying-stop wheri the key-mechanism operated. He appUed the fa-
miliar idea of using the key-mechanism to control a stop-motion de-
tent. The novelty was that he made tlie ke3'-mechanism control the
carrying-stop at this time. His carrying-.stop, therefore, apparently
is differentiated from any carrying-stop of the prior art by the fact
that it has the additional feature of a release by the key-mechanism.
The défendant argues that it was obvious to any one skilled in the
art that when a stop detent is used in connection with a wheel that
is adapted to be operated either by key-mechanism or by carrying-
mechanism, then the withdrawal of the detent must be controlled by
key-mechanism when the wheel is to be operated, by its key-mech-
anism, and must be controlled by the carrying-mechanism when the
wheel is to be operated by the carrying-mechanism. The patentée,
after stating in his specifàcation that a carrying-stop which remains
in action until near the completion of a révolution of a wheel of
lower order will prevent any movement of the numéral wheel by its
own key, says:
"Therefore the automatic stop-motion devlce must be Independently released
by its own key-mechanism, as well as by the carrying part." etc.
If it was obvious that the carrying-stop must be independently re-
leased by the key-mechanism, then there are most serious doubts
both upon the question of invention and upon the question of in-
fringement. If Felt and Turck each began to correct this error of
overrotation with the obvious requirement that the carrying-stop
must be released by the key-mechanism, then, according to my prés-
ent impression, Turck's device must probably be regarded as sub-
stantially différent from Felt's. It is by no means clear that the re-
lease of carrying-stop by key-mechanism was more than ordinary
mechanical skill vvould hâve suggested. In the prior art the key-
mechanism removed the stop which would otherwise block the move-
ment of the wheel. An additional stop was added to the same wheel.
Unless removed, this stop would block the wheel when the key-
mechanism operated. The key-mechanism was made to remove that
stop also. Was this so broad an improvement that Felt should be
given a monopoly of the use of a positively acting detent to stop
the overrotation of a numéral wheel under the action of carrying-
mechanism ?
In Colt's Patent Fire-Arms Mfg. Co. v. Wesson, 127 Fed. 333, in
the opinion of the Circuit Court of Appeals for this circuit, it was
said:
"The methods of locking and of holding in and ont of operatlve position
are innumerable ; so that, unless extrême care is used in analyzing patenta
for inventions relating to that topie, the rule of équivalents, as applicable
to alleged infringements, would block the path of invention to an exteut which
would be unreasonable." i
This remark is applicable to this case. To think of preventing ex-
cessive rotation of a wheel, of doing this by a stop, whether positive
FERET V. WAEING HAT MFG. CO. 389
or frictional, and of removing the stop to permit the opération of
parts, are features so common that they cannot be monopoiized by
any mechanic for the purposes of a particular art. There is ordi-
narily no more invention in the thought of making a stop positive,
as distinguished from frictional, than there is in making it of steel,
as distinguished from brass; and, in view of the positive stop of
Feh's prier patent, the idea of a positive stop for the wheel, removed
by the action of key-mechanism, was old.
Serions questions arise, not only upon the question of invention,
but also as to the scope and vahdity of the claims. The patent is
secondary in character. There is a large number of patents dealing
directly with the problem of overrotation ; and it must not be for-
gotten that the principal claims of the patent in suit relate not to
the gênerai principles of calculating machines, but to a device de-
signed simply for the limited purpose of preventing the mechanical
defect of overrotation of a wheel. While the spécial problem of
releasing a carrying-stop detent to permit action of key-mechanism
did not confront makers of counting machines, yet such machines
are relevant to show the familiar means of controlling stops. In
fact, it may be said that the problem of stopping the overrotation
of a wheel by a detent, and of releasing the detent to free the wheel,
probably ought to be regarded rather as a gênerai problem of ma-
chine construction than as a problem in the particular art of count-
ing machines or calculating machines. Mast, Foos & Co. v. Sto-
ver Mfg. Co., 177 U. S. 485, 492, 493, 20 Sup. Ct. 708, 44 L. Ed. 856.
So far I am rather inclined to the view that Turck was at liberty to
provide a positively acting stop against the action of his carrying-
mechanism; that he was entitled to operate such a stop by his car-
rying-mechanism and by his key-mechanism ; and that, while there
doubtless would be infringement if a broad construction could be
placed upon several of the claims, yet the claims probably are not
valid unless strictly confined to the detailed constructions of Felt.
Claims 17 and 18 of the Felt patent in suit involve a distinct sub-
ject-matter. Thèse claims call for mechanism whereby ail of the
carrying-stops are simultaneously released prior to the forward ro-
tation of the numéral wheels for the purpose of rotating them to
zéro. There is a serions controversy as to the validity of thèse
claims. It is contended that set-back mechanism of this gênerai
character was old, and that each claim is for a pure aggregation.
Upon the whole, I think it clear that the case is not a proper one
for a preliminary injunction.
Pétition denied.
FERRY et al. v. WARING HAT MFG. CO.
(Circuit Court, S. D. New York. July 9, 1900.)
Patents— Infeingement— Hat Rings.
The Ferry patent, No. 574,894, for a hat ring, for use In packing hats
together in boxes for shipment, construed, and held not anticipated, and
to disclose invention. In view of its superior utility and exceptional com-
mercial success. Also held Infringed.
390
129 FEDEKAL REPORTEE.
In Equity. Final hearing on pleadings and proofs of a suit for in-
fringement of United States letters patent No. 574,894, January 12,
1897 (applied for June 2, 1894), to F. P. Ferry, assigner of one-half
to Théodore Clark & Co., for hat-packing ring.
J. Edgar Bull and F. M. Smith, Jr., for complainants.
Chamberlain & Newman, for défendant.
LACOMBE, Circuit Judge. The first impression formed upon
reading this patent is that there could be no patentable invention in
so simple a modification of earlier forms. But the évidence is most
persuasive to the conclusion that, trivial though it seems, the improve-
ment is one which has commercially proved exceptionally successful;
and if it were, as défendant contends, a natural development from
earlier forms, it is difficult to understand why, in view of the demands
of the trade, no one produced it during the interval succeeding the
earlier patent of January 6, 1891, unless it were that more than the
mère technical skill of the handicraftsman in the art was required for
its conception.
The patent relates to what are known as hat-packing rings or stays.
The manufacturers of hats ship thèse articles in tall boxes, each con-
taining several hats. To keep the hats in the box separate, so they will
not rub against or mar one another, hat-packing rings are employed
Hat-packing rings of varions forms hâve been employed for years.
Any plain strip of pasteboard of suitable width, curved to conform to
the contour of the hats, might be employed for the purpose. It is
obvious, however, that the sharp or rough edge of a pièce of pasteboard
would chafe the hats where it was in contact with them. Varions expé-
dients had been adopted, prior to this patent, to overcome this difficulty.
Strips of paper had been pasted over the raw edges of the cardboard,
or they had been bound with flannel or other soft material, or the
edges had been broken over, so that they stood at an angle with the
body of the strip, forming a flange or broader strip for the hat to
rest on.
The patentée. Ferry, in 1888 applied for a patent, issued January 6,
1891, covering a ring of a gênerai cylindrical shape to contain the
hat-crown; the edges of said ring being curled outwardly, so as to
présent a perfectly smooth, unbroken surface for contact with crown
and brim of the hat. Fig. 3 sufficiently indicates the curved edges
of the ring.
FEEKT V. WAEING HAT MFG. 00.
391
In this earlier patent, 444,343, the spécification states :
"I am aware that packing-rings hâve been made wlth their edges bound
with felt or other soft material, so as not to chafe the hats, but my inven-
tion contemplâtes no such construction. I am also aware that a packlng-
support for a single hat has been made wherein the top edge bas been flanged
or curled outwardly in order to afford a nonchaflng support for the hat-brim,
but thls has never, to my knowledge, been doue except in the instance of a
separable ring; and, moreover, such construction could not be of advantage
in packing a nest of hats, since it is essential that both the top and bottom
edges of the ring should be so formed that the brim of the hat should not
be chafed either on the upper or under surface. I therefore wish to be under-
stood as distinetly disclaiming any flaring or curling of the edges of a hat-
packing ring, save the outward curling of both the top and bottom edges of
a closed pasteboard ring."
While affording theoretically a sufficiently broad and easy seat for
the hat, this earlier ring was, comparatively speaking, expensive and
difïïcult to manufacture. A considérable proportion of the product
was unsalable because defective, and the beads, D, were liable to un-
curl, kink, or break and chafe the hat. Moreover, this liability to
uncurl or kink made it impracticable to dispose of them, save as com-
pleted rings, fastened together at the ends. They could not be nested
and shipped in bulk. Freight to any distance, by reason of the bulk
of parcel, was prohibitive.
The improvement of the patent in suit is sufficiently indicated in
Fig. 2, and the f ollowing excerpts f rom the spécification :
JP^
.2.
"In carrying eut my invention, I take a pièce of pasteboard, 1, of any
suitable width and length, and curl over the opposite edges as shown at 2,
3, to form hollov? beads, 4, 5, a surplus from such edges being left to form
petticoats, 6, 7, which latter lie closely against the body of the strip. The
object of the petticoat portions, 6, 7, is to give stability to the beads, 4, 5,
and to prevent them from erawling back, and also give them greater body
and flexibility. * * * The hoUow beads at one end of the strip are
readily inserted within the beads at the other end, since the latter beads
yield readily to permit of this, and exert a grasp firm enough to prevent any
accidentai slipping of an adjustment. The hollow bead affords great ad-
vantages, in that it is not stiff or unyielding, but is flexible and résilient [in
392 129 FEDERAL EEPORTEE.
earller devîces the edge had been turned over and glued down, sometlmea
with an extra , thickness of materlal inserted — manifestly an unylelding and
nonresilient finish], whlle its shape is preserved by the petticoats, 6, 7, which,
as above set forth, snugly lie against the body of the strip."
To reduce the field of discussion presented on the record, touching
infringeraent, the third claim, only, need be quoted. It reads as fol-
lows:
"(3) As a new article of manufacture, a pasteboard hat-packing ring, hav-
ing closed beads at its edges, and, with the extrême edges of the stock beyond
the beads dlsposed flat against the body of tlie strip, substantially as de-
scribed."
Infringement of this claim seems plain, upon a mère inspection of
the exhibits. The only question of différence between the parties is
as to the "hollowness" of the beads. The beads of the patent, as
shown in the drawing, are "hollow," in the full sensé of the term.
Hollowness is achieved by turning over a mandrel, or otherwise, suffi-
cient material to form a tubular structure. In defendant's rings suffi-
cient material is thiis turned over, but it is also collapsed upon itself
from the top downward, so that it no longer looks like a "hollow
bead," but it is not pasted together or otherwise held rigidly, so that it
cannot perform the useful function of end into end insertion, which the
évidence shows to be the great commercial advantage of complainant's
patent. The superabundance of material, giving a gréa ter bearing
surface than would the mère turning over of the material on a knife
edge, affords a similar support for the hat, and it also secures the
iiecessary play for insertion of the other end of the ring— a play which
would not be secured without such superabundance of material. Of
course, if it were pasted down or rigidly secured, it would be merely
the device of earlier patents; but since it performs ail the functions
of the device of the patent, and in the same way, the différence be-
tween the two is verbal only. A web hose is a hollow structure for
the transmission of water, although, when water is not flowing through
it, it may lie perfectly flat, and be folded upon itself, with no sug-
gestion of a tube about it.
The évidence establishes with a conclusiveness rarely found in pat-
ent suits that the advance from Ferry's patent of 1891 to the one in
suit bas produoed a marked saving in the cost of manufacture and in
the amount of waste, and has vastly enlarged the output field of the
manufacturer. The earlier rings hâd to be completed as rings before
shipment ; that is, the ends had to be fastened together, or the edges
would uncurl. Then, since freight is regulated to some extent by
the size 6i the package, the manufacturer could supply only his immé-
diate neighborhood. The device of the patent may be "nested" and
shipped to remote places, each ring to be there fastened by insertion
when put to use.
A number of patents hâve been introduced in évidence. It is suffi-
cient to say that none of them anticipate. Some of them would seem
to indicate that the improvement of the patent — now that we know of
it — was to be expected of the skilled workman; but when it appears
that an enormous increase in sales awaited the man who devised it,
and that from the issuance of the first Ferry patent, of 1891, to the
FEKBT V. WAKING HAT MFS. 00. S93
application for the patent in suit, June 2, 1894, no one but the patentée
came forvvard with such a device, the court is constrained to conclude
tliat it exhibits patentable invention.
The évidence introduced by défendant is mainly directed to estab-
lishing the proposition that the complainants made and sold petticoated
rings more than two years prier to the date of application. The testi-
inony on this branch of the case is conflicting. Application was filed
June 2, 1894. The burden is upon défendant to show public use
and sale prior to June 2, 1892. There is not a scintilla of évidence
that petticoated rings were made by hand. On September 30, 1891,
a manufacturer named Wilkins supplied complainants with a two-part
machine adapted for curling over the bead edgings and fastening the
rings as shovi'n in the 1891 patent. This was the first machine for
making packing rings used by complainants. On June 24, 1892, the
same manufacturer delivered a new machine to complainants, which
was adapted to curl over a bead with a petticoat — not so long a petti-
coat as shown in the patent, or as is produced by later machines, but
still sufficiently long to corne within the patent. Both thèse machines
exist to-day. They hâve been put in évidence and operated. The
dates of their delivery are fixed beyond peradventure or dispute by
book entries, dated bills,mnd letters. The complainants concède that
they made rings with petticoats on the second machine and sold them
shortly after its receipt. The question, then, is narrowed down to the
single issue, were petticoated rings made commercially on the first
machine? Those made on the second machine are out of the case.
The weight of évidence seems to call for a négative answer to this
question. Indeed, it would seem that such rings could not be made
upon the first machine, except experimentally by altering the adjust-
ment of parts in the bead-forming portion of the machine beyond the
capacity of the mechanism, wedging the guides out of alignment, while
the subséquent passing of such expérimental rings through the ring-
forming portion of the machine would practically ruin the greater
portion of them. The défense of prior use is not established.
The évidence does not sustain the contention that Ferry was not
an original inventor, by reason of a certain ring alleged to hâve been
shown to him by the witness Hallock in February, 1890. That ring had
its edges simply turned over flat down upon the stock. There was no
suggestion in it of a bead, hollow, or collapsed. It was, as the witness
says, "practically ail petticoat."
There is no force in the proposition that complainant abandoned
invention by stamping the petticoated rings made prior to the issuing
of the patent in suit with the patent date of the earlier Ferry patent,
on which they were an improvement.
Complainant may take the usual decree.
39é < 329 FBD&RAL BEFOSTEB,
COMPTOGRAPH CO. v. MECHANICAL ACCOUNTANT 00.
(Circuit Ciourt, D. Rbode Island. April 4, 1904.)
No. 2,644.
1, Patents— Infbingement— Computing Machines.
A preliminary injunction against infringement of the Feit patent, No.
465,255, for improvements in recording Computing machines, denied on
the ground that the proofs left in doubt both the validity of daims
and the question of infringement.
In Equity. Suit for infringement of letters patent No. 465,255, for
a Computing machine, granted to D. E. Felt December 15, 189 1. On
motion for preliminary injunction.
Munday, Evarts & Adcock and Henry Love Clark, for complainant.
Wilmarth H. Thurston and Warren R. Perce, for défendant.
BROWN, District Judge. This suit is for infringement of letters
patent No. 465,255, to D. E. Felt, dated December 15, 1891, for im-
provements in recording Computing machines. The subject-matter
of claims 7 and 8 is "subtraction cut-offs." "Claims 9, 10, II, and
12 relate to means for returning ail numéral wheels to zéro.
In performing subtraction on an adding machine, the numéral virheels
are given the same movements as in addition. Subtraction is per-
formed by the addition of complementary numbers. Since the nu-
méral wheels rotate as in addition, the carrying-mechanism, whereby
a complète rotation of a wheel of lower order moves forward one step
a wheel of higher order, will continue to operate, and to produce an
error in the resuit. This error will occur at the left of the wheels
operated. The patentée says:
"Another object of my invention Is to prevent the carrying of fens from
any column to the next higher whenever a subtraction is made, by means of
adding a complementary number."
Referring to the machine of a prior patent to Felt, the patentée says :
"lu my former machine, the 1 carrled to the next higher numeral-wheel to
the left of the bigliest numeral-wheel of the subtrahend was removed by add-
ing a 9 to said numeral-wheel, and to ail other numeral-wheels at the left of
it. To save the carrying of the 1 above mentioned, and afterward adding the
9's as above deseribed, I provide the following device."
The substance of the improvement was to provide for each carrying-
mechanism an individual cut-off, so that the operator may at will pre-
vent the occurrence of the carrying. It is necessary to put but one
carrier ont of opération. When the operator makes a subtraction, a
lever at the left of the highest column or séries of keys in which a
key is struck is pushed backward. This raises a carrying-pawl, and
thus prevents the carrying from the highest séries. The défendant
shows nothing in the prior art which will accomplish ail that is ac-
complished by individual subtraction cut-offs.
It is quite clear that devices whereby ail the carriers are simultane-
ously thrown out of opération are not full anticipations, since to throw
out ail the carriers would prevent the addition of complementary
numbers. Felt, so far as appears, was the first to provide a comput-
COMPTOGEAPH 00. V. MEOHANICAL ACOOITNTANT 00. 395
ing machine with individual cut-offs for subtraction. He was not,
however, the inventer of the gênerai method of subtraction by addi-
tion, or of the use of complementary numbers or co-digits for sub-
traction.
As appears from the spécification of the patent in suit, as well as
in complainant's rebuttal affidavits, the errer incident to doing sub-
traction on an adding machine was one that was well known, and
whese cause, namely, the undesired opération of the carrier at the ex-
trême left, was obvious. The errer could be remedied by mentally
disregarding it in reading the machine, or by adding a nine to that
numéral wheel and ail ether numéral wheels at the left, or, as sug-
gested by Grant, by turning one of the numéral wheels back one tooth
by hand. Instead of allowing the errer to occur, and then correcting
it, Felt provided means to prevent its occurrence. Mechanically, the
means are very simple ; and, given the idea of doing this, it would in-
volve nothing more than the most erdinary mechanical skill to accom-
plish it. A simple lever is provided for each carrying-mechanism,
and a finger-piece to move the lever. That part of the carrying-
mechanism which it is désirable should be operated is left in action,
and that part which commits the error is stopped.
The important question in this case is vi'hether Felt is entitled to
a monopoly in means for controlling at will any one of the carrying-
mechanisms for the purposes of subtractien. The remark from Colt's
Patent Firearms Mfg. Co. v. Wesson (C. C. A.) 127 Fed. 333, is hère
applicable :
"ïhe methods of locking and of holding In and out of operative position are
innumerable, so that, unless extrême care is used in analyzing patents for
inventions relating to that topic, the rule of équivalents, as applicable to al-
leged infringements, would block the path of invention to an extent which
would be unreasonable."
There is a very extensive discussion of this question upon the de-
fendant's brief, which leaves the impression that the question of the
patentability of this broad feature is doubtful. The idea of correct-
ing this error was a familiar one, but it had not been thought désir-
able to add to the old Computing machine spécial mechanical parts
for doing it. If given a broad construction, claim 7, perhaps, would
be anticipated by the Shattuck patent, which contains means for throw-
ing out of action ail the carrying-mechanism simultaneously. Were
this mechanism ef Shattuck's applied at exactly the right time, it would
prevent the occurrence of the undesired carrying; but it is obvious
that it would involve a mental opération in order to time its applica-
tion, and it is quite probable that there are certain opérations which
could not be foreseen in time by the operater. It certainly is not an
anticipation of ail that is in the individual cut-offs.
Coming to the question of inf ringement : Felt has provided a séries
of slides and levers actuated directly by the finger. Thèse are new and
additional parts, and are used only at the times when it is desired
to subtract. In the defendant's machine, the carrying-pawl is thrown
out ef opération in every actuation of the keys, whether fer subtraction,
addition, or any other purpose. It is also said that the primary pur-
pose in introducing the lever used by the défendant in subtraction was
398 129 FEDERAL REPORTEE.
not to permît the performance of subtraction, but to take up an extra
throw or excess of motion, so as to prevent the ratchet, 115, from
catching on the pawl, 135, and that it was afterwards discovered acci-
dentally that this mechanism was capable of use for subtraction pur-
poses by means of a half-stroke of one of the keys of the same séries.
If this is the fact, it is very doubtful if there is infringement. It is one
thing to provide a separate part, or a séries of stops, for the distinct
purpose of correcting an error. It is another to utilize a part, having
a distinct function, to perform the additional opération of correcting
the carrying error. The performance of the same function is not
alone a safe test of the equivalency of mechanism. The language of
Kokomo Machine Co. v. Kitselman, 189 U. S. 8, 23 Sup. Ct. 521, 47
L. Ed. 689, possibly is applicable: "The machines lack that identity
of means and identity of opération which must be combined with iden-
tity of resuit to con'stitute infringement."
It seems hardly reasonable to hold that ail Computing machines,
however différent in mechanical opération, however différent in car-
rying-mechanism, shall be tributary to Fait, so far as concerns cor-
recting mechanically this well-known error, and that no one after
Felt shall be permitted to prevent the occurrence of this error by
stopping the carrier which causes it.
The defendant's lever is actuated for the purposes of subtraction
by a half-movement of one of the keys. It is the contention of the
complainant that the actuation through a roundabout connection with
the digit keys is a mère évasion. In support of this, it is pointed out
that in the Turck patent there are subtraction cut-offs actuated directly
by the finger, as in the Felt patent. Although the Tufck patent does
show such a construction, it is nevertheless true that a separate finger
device is absent from the infringing machine, and that one of the pré-
viens members, namely, a key, is used to actuate the defendant's lever,
which serves as a subtraction cut-off. A carrying-mechanism which
is freed at every stroke of the key is appreciably différent from a carry-
ing-mechanism which is freed only by a separate device. Whether
substantially différent, I am now unable to détermine.
As the record stands before me upon this pétition, there is a serious
question raised by the contention of the complainant that Turck's de-
vice is a merely colorable évasion. It is not clear upon the présent
record, and is hardly a proper question to be determined upon this
pétition.
Claims 9, 10, 11, and 12 relate to means for returning ail numéral
wheels to zéro. By a single motion of the hand, the operator is en-
abled to release ail the wheels from the carrying-stop detents, and
aiso to rotate ail of the numéral wheels to zéro. Complainant em-
phasizes this one-motion feature. The défendant contends that the
connection of two shafts, one of which opérâtes to unlock the detents,
and the other of which rotâtes the wheel, so that they will operate
simultaneously, was not a patentable invention. It cites Office
Specialty Mfg. Co. v. Globe Co. (C. C.) 65 Fed. 599. A long list of
patents is also cited to show anticipation, and it is further contended
that there is no infringement of the claims. Thèse questions are ail too
doubtful to warrant a preliminary injunction.
KES8LER & 00. V. ENSLEY CO. 397
Without going further into the merits, it may be said that the de-
fendant has shown the présent controversy to be such as the courts
hâve usually refused to dispose of on a pétition for a preliminary in-
junction. It may be said, also, in regard to this case, that the de-
fendant's machine is of quite a différent type from that of the com-
plainant, so that it can hardly be said to be in compétition in the same
commercial field.
Pétition denied.
KBSSLER & CO. et al. v. ENSLET CO. et al.
(Circuit Court, N. D. Alabama, S. D. April 15, 1904.)
1. Corporations — Suit bt Stockholdees — Right to Maintain.
Wtiile tlie mère refusai of the governing body of a corporation to brlng
suit to redress a fraud committed against it is not a ratifleatlon of sucli
fraud, and does not in itself constitute a fraud against the corporation,
yet where the refusai is from proper motives, and in the interest of the
corporation, it is neither illégal nor immoral, it being the duty of such
body in gênerai to act for the pecuniary interest of the corporation; and
where its action has been falrly approved by a disinterested majority of
the stockholders it is binding on the minority, who cannot, in such case,
maintain in their own name, on behalf of the corporation, the suit which
the majority hâve determined to be against its interest as to a purely
intra vires matter.
2. Same — Fraudulent Conteacts — Powee of Ratification.
A contract or transaction by which offlcers hâve obtained property of
a corporation by actual fraud, may nevertheless be ratified by the directors
and a disinterested majority of the stockholders where they act fairly, in
good faith, and with knowledge of the facts, and for what they believe
to be the best interest of the corporation.
3. Same — Refusai, of Dieectoes to Sue — Beeach op Trust.
It is the duty of the directors of a corporation, when requested by
stockholders to bring suit to set aside a transaction by which property
was obtained from the corporation by fraud, to consider the question care-
fully, and détermine it solely on its merits, with référence alone to the
best interests of the corporation ; and a court will not refuse to enter-
tain a suit by stockholders on behalf of the corporation to redress the
fraud, where it appears from the allégations of the bill that the action
of the directors in refusing to bring the suit was prejudicial to the cor-
porate interests, that they acted negligently, or without proper délibéra-
tion, upon a mistaken vievv of the law with respect to their duty, or from
extraneous motives, since in either case their action amounted to a breach
of trust, although it is not charged that it was corrupt, or from motives
of self -interest ; and to establish such facts the complainants may show
what was said as well as what was done by the directors at the time
their action was taken.
4. Same — Acts Ceeating Estoppel.
A bill filed by stockholders of a land company which owned a town site
and adjoining lands alleged that at a time when the individual défendants
were officers and directors of the company they procured a sale of ail
of its property under a small judgment against the company, which they
in fact owned, leaving the company only the right of rédemption; that
they subseguently procured the conveyance of such right of rédemption
by the company to trustées, in whom also had been vested the légal title,
under a trust by which property was to be sold sufficient to pay the
company's debts, when the remainder should be reconveyed; that sub-
sequently défendants by fraud procnred the assent of the stockholders
to the sale by the trustées of some 200 acres of the cholcest land of the
company to themselves, through a second company, their ownersbip of
398 129 FBDEEAL REPORTER.
which they concealed, for a small fraction of Its actual value. It further
appeared that the trustées sold sufflcient lands to pay the debts of the
Company, and reconreyed the remalnder, which the eompany accepted and
still holds. Eeld that, while the eompany was estopped by its subséquent
action from questioning its conveyance to the trustées, it was not estopped
from attacking the validity of the conveyance to défendants, in the ab-
sence of a ratification or lâches, and that the refusai of the directors to
bring a suit for the purpose did not amount to such ratification.
5. PLEADING SUFFICIENCY QUESTIONS ABISING ON DeMUBEEB.
In deterniining the sufflciency of a bill charging fraud, on demurrer
the allégations therein are alone to be looked to, and the charaeter of
the parties charged cannot be considered.
6. Eqxiitt — Lâches — Notice to Stockholdeb of Coepobate Acts.
In a suit by a stockholder in right of the corporation to require a
former officer to account for property which he Is chargea with having
obtained by fraud from the corporation while such ofBcer, the adverse
possession of such property by défendant for a period of time within the
statute of limitations cannot be held, as matter of law, to impute notice
of the fraud to the stockholder, so as to charge him with lâches, nor to
charge him with knowledge of what was done at a stockholders' meeting
which he did not attend.
7. Same — Facts Imputing Notice of Actual Feaud to Stockholdee — Re-
LIANCE on INTBGEITY OF OfFICEBS.
stockholders who are complainants In a suit brought In right of the
corporation to set aside a conveyance of property from the corporation to
some of its ofiicers are not chargeable with notice of actual fraud, which
Is alleged to bave been practiced in obtaining the property, from which
lâches must be imputed to them, because it must be inferred from the
allégations and silence of the bill that they had knowledge of facts which
would render the transfer construetively fraudulent, it being alleged that
they were ignorant of the actual fraud, and that the reason they did not
make further inquiries was because of their confidence in défendants and
their reliance upon their acting in good faith as trustées for the stock-
holders.
8. Same — Sufficiency of Bill — Offbe to do Equitt.
A bill by stockholders to set aside an alleged fraudulent sale of prop-
erty by the corporation to défendants, which allèges that they bave sold
a portion of the property to bona flde purchasers, prays an accounting
by défendants, and oft'ers to allow them crédit for any sums expended
which will inure to the benefit of the corporation, contains a suflicient
ofifer to do equity.
In Equity. On demurrers to amended bill.
See 123 Fed. 546.
This is a bill by minority stockholders of the Bnsley Land Company, flled
in right of the eompany, which refused to sue, to set aside certain transac-
tions between the eompany and the respondents, who it is alleged, while occu-
pying flduclary relations, defrauded the corporation in the sale of 240 acres
of land, of which respondents became purchasers. On demurrer to the origi-
nal bill the court held that, as the majority of the stockholders and the two
boards of directors, who refused to authorize the suit, were not charged to be
iuterested, or acting from improper motive, the décision, which related to a
matter intra vires, bound the minority, as it did not appear, on the facts shown
by the bill, that it was to the interest of the corporation to bring suit, or that
the directors and stockholders had not fairly decided the matter in the inter-
est of the corporation; and also that the complainants had been guilty of
lâches. The case is reported Kessler & Co. et al. v. Ensley Co. et al. (C. C.)
123 Fed. 547. The bill was amended in particulars sufficiently shown in the
présent opinion. The respondents again demur. To distinguish the Ensley
Land Company from the Ensley Company, and for the sake of brevity, the
Ensley Land Company is referred to as the "Land Company," and the Ten-
nessee Coal, Iron & Railroad Company is called the "Tennessee Company."
KESSLEE & CO. V. ENSLET CO. 399
T. M. Steger, Smith & Smith, J. W. Baker, and L 'K. Boyesen, for
complainants.
Knox, Bowie & Dixon, Walker, Tillman, Campbell & Morrow, James
C. Bradford, J. F. Martin, and E. J. Smyer, for défendants.
JONES, District Judge (after stating the facts as above). It was not
ruled on the former hearing, as complainants seem to suppose, that the
refusai of the boards of directors and stockholders, under the circum-
stances stated, to bring the suit, amounted to a ratification of the trans-
actions complained of ; but that, in view of the case disclosed by the
original bill, the minority was bound by the action of the governing
body, which was not charged to be interested, or acting from improper
motive. It was stated arguendo that an honest and disinterested gov-
erning body or majority of stockholders, if rescission would not be
advantageous or would be harmful to the corporation, might ratify
actual fraud practiced on it by an ofScer or director. Complainants
dévote a large part of their argument to combating the correctness of
the former opinion on thèse points. They insist that a corporation can-
not in any case ratify a transaction whereby its officers obtain corporate
property of large value by actual fraud, save by unanimous consent of
the stockholders ; and that the court, by refusing to entertain the stock-
holders' bill, when the corporation refuses to sue, enables the governing
body or majority to accomplish indirectly, agaihst the protest of the
minority, that which could not be done directly save by unanimous
consent. Upon thèse premises they vigorously contend that the gov-
erning body has no discrétion to refuse to stie in a case like this when
the minority demand it, and that their refusai to sue confers upon the
minority an absolute and imperative right, beyond the power of a
court of equity to control, to file the bill in their own name, making the
corporation a défendant.
I. There is a manifest distinction in principle between committing
a fraud upon a corporation or piling one fraud on another by abuse of
corporate authority in vicions ratification, and the refusai by the
governing body, on proper motives, of a request of some of the stock-
holders to bring suit to redress the fraud. Of and in itself the mère
refusai to sue cannot be ratification. Unless the situation has been so
changed, in conséquence of the refusai, as to work an estoppel to com-
plain of the fraud, the governing body may change its policy at pleas-
ure. Of and in itself it is neither illégal nor immoral to refrain from
redressing a fraud by suit. In the very nature of things, a refusai, in
the interest of the corporation, to bring suit, cannot amount to a fraud
upon the stockholders. They are allowed to bring suit when the cor-
poration fails to do so solely to "prevent a failure of justice/' The
failure of justice to be prevented is the failure of justice to the corpora-
tion. The transaction hère complained of is whoUy intra vires, and in-
volves private, nôt public, wrong. The complaining minority stockhold-
ers and theother stockholders alike assert only the right of the corpo-
ration. They havè no independent rights agâinst one another, or
against the corporation. The only right which any stockholder may
assert in a case of this kind is subject to the police power of the govern-
400 129 FEDERAL REPORTER.
ing body, and the extent of the stockholder's right is narrowed and
restrained by the fair exercise of this power.
Enforcing a corporate right, especially when, as hère, the corporation
must festore the purchase money and surrender the right to enforce the
performance of other conditions of the sale in order to regain that which
it sold, may be decidedly to its disadvantage. It is frequently the
highest wisdom to refrain from attempting to redress violations of
right. Probable gain is generally balanced against probable loss.
Modem jurisprudence assimilâtes corporations as far as possible to
natural persons in determining their discrétion andi power as to such
matters. The governing body is expected, within the limits of the char-
ter, by ail means not violative of law and good morals, to promote
the pecuniary advancement of the corporation in its dealings, whether
with its own pfficers or third persons. Bearing this in mind, and that
it is not the fâct that a fraud has been committed, but the fact of right-
ful or wrOngful refusai to redress the fraud, which détermines whether
equity will aid the stockholder, the question is not of diiîficult solution
on principle. The stockholder appeals to the conscience of the chan-
cellor at the very threshold of the litigation to set aside the judgment
of a corporate tribunal provided in advance, to détermine primarily
for every stockholder the very question brought before the court. The
law does not présume fraud, misconduct, or infidelity on the part of
the directors; on the other hand, in the absence of showing to the
contrary, présumes that they acted rightly and properly. When the
governing body is not challenged as in any wise unfit or interested, and
no ulterior or improper motive is imputed to it, the décision by such a
body is prima facie right, and must stand, unless the court can see
from the facts stated in the stockholder's bill that the décision, upon
the facts presented, proves its own unworthiness — shows a failure of
justice to the corporation, if the stockholder is not permitted to sue.
The only right of the stockholder hère is to show that the corporation
has been wronged by the refusai to sue, and in that event to sue for it.
Both factions hâve equal right to be heard on that question, not only
before the court, but before the governing body. If the corporation's
interest will not be promoted by suit to redress the fraud, there is no
wrongful refusai to sue, no foundation for the stockholder's equity to
compel suit, and no threatened failure of justice to the corporation to
be averted. Of necessity, then, the governing body in every intra vires
matter has a discrétion to détermine what action to take on the stock-
holder's request to sue ; and when the stockholder comes into court the
first question it must détermine is whether that discrétion has been prop-
erly or improperly exercised.
2. The assertion that a disinterested corporate body or majority of
stockholders of a business corporation are powerless in any case, against
the objection of a single stockholder, to ratify actual fraud, as to a mat-
ter intra vires, upon the corporation by one of its own oihcers, by which
he obtains some of its property, cannot be accepted as a correct enuncia-
tion of the law. The case in hand involves an executed sale and con-
veyance of land thereunder, made under the confessedly corporate pow-
er to sell land to pay corporate debts. The vice imputed to the transac-
tion is that it was accomplished by actual fraud of the corporation's.
KESSLER <b CO. V. EN8LET OO. 401
officers who became purchasers, Individual stockholders hâve no such
interest in a purely corporate asset, or the undivided corporate prop-
erty of a solvent, going corporation, as entitles them, in a case of this
kind, to exact unanimity on the part of the stockholders before the cor-
poration can hâve or exercise judgment of its own as to the wisest
course to pursue with référence to a fraud concerning it. Want of
unanimity in such a case cannot dethrone the governing body, or sus-
pend or repeal those provisions of the charter which define their powers
and duties, or transfer the duties and rights of the corporation in the
premises to the minority. If the interests of the corporation are pro-
moted by the refusai to sue, or by ratification, it is unconscientious to
insist that it has been wronged by either ratification or the refusai to
sue. That is quite a diflferent thing from committing or defending a
fraud. The stockholder, having only derivative and subordinate rights,
cannot force the corporation to do that which will harm it, or fairly
complain when it elects, for its own good, to stand upon the transaction,
rather than repudiate it. The bocks are fuU of cases where corpora-
tions hâve been wronged by actual fraud of their officers. The corpo-
ration may hold them to such transactions, unless the thing donc is
forbidden by law, or condoning it is contrary to public policy. If the
transaction in which the oiificer defrauded the corporation is one into
which it might enter in the first instance, it is not contrary to public
policy for the corporation to condone the fraudulent contract, and insist
upon its performance, on sufficient considération and motives. The
wrong hère is a private wrong, and a private person may condone a
private wrong when the rights of the public or strangers are not in-
volved. AU the cases admit that the person defrauded, if sui juris,
can ratify the fraud. The corporation is certainly sui juris as to mat-
ters intra vires. The différence in the cases results from the view taken
of "the person" defrauded in a case of this kind. The cases which
deny the right of the governing body to ratify insist that the whole body
of stockholders make up and constitute "the person" who is defrauded,
and necessarily that unanimity of the stockholders is required to create
the assent of that person. Thèse cases entirely ignore the nature and
limitations of the right asserted and conséquences which flow from it to
the corporation, the only tests which détermine whether the majority
may ratify, when fairly done, against the wishes of the minority. Hère
the transaction sought to be avoided is already accomplished. Rescis-
sion cannot be made by the minority, it must be efïected by the act of the
corporation or of the court. The minority has only a joint interest
with other stockholders, and the disinterested majority of the whole in-
terest, in the absence of fraud, bad faith, and the like, détermines what
is best for the corporation. Équity in cases of this sort steps in, and
strikes down either ratification or refusai to sue, only when the gov-
erning body has abused the corporation in ratifying the wrong, or in
refusing to sue, or is unfit or interested, or dominated by improper mo-
tives, or has acted negligently, without the exercise of reasonable judg-
ment and prudeiice, or in some way has been misled or deceived.
3. Complainaiits cite a number of cases to sustain their contention.
It is impossible to analyze them ail without unduly lengjthening
this opinion. The leading case upon which they rely is Cumberland
129 F.— 26
402 129 FEDERAL EÉPOETER.
Coal Company v. Sherman, 30 Barb. 577. It was there held that a
majority could not ratify a sale of land made by a director to him-
self, although there might be no actual fraud. In this respect it is
directly opposed to Twinlick Oil Co. v. Marbury, gi U. S. 587, 23 L-
Ed. 328; Hôtel Co. v. Wade, 97 U. S. 13, 24 L. Ed. 917; Pneumatic
Gas Co. V. Berr.y, 113 U. S. 322, 5 Sup. Ct. 525, 28 L. Ed. 1003. In
the latter case it was charged that défendants, who stood in fiduciary
relations, "had in their possession, unaccounted for, at least sixty
thousand dollars," derivcd from a lease made without authority, which
belonged to the Company. There had been much dealirig with the
directors, and finally they settled with the défendants, and executed a
formai release. Under the circumstances, there being no bad faith,
fraud, or concealment charged in the settlement, the release was
upheld. The précise statement by the court in Cumberland Coal Co.
V. Sherman, on this point, is :
"But, even If the confirmation had been legally made, and by a majority of
the stockholders — which it clearly was not — when, as in this case, It must be
made by a class, the sanction of a majority could not be obligatory on the
rest; but the confirmation, to be complète, must be the joint act of the whole.
Ex parte Hughes, 6 Vesey, 622 ; Ex parte Lacey, Id. 628 ; Ex parte Jones, Id.
377; Davoue v. Fannlng, 2 Johns. Ch. 264."
Cumberland Coal Company v. Sherman, is largely, if not entirely,
rested on Davoue v. Fanning, supra. In Davoue v. Fanning, Chan-
celier Kent, speaking of the Yorks Building Co. v. McKenzie, in the
English House of Lords, on a like question, said that "it is perhaps
one of the most interesting cases on a mère technical rule of law
that is to be met with in the annals of jurisprudence." He founded
his ruling in Davoue's Case upon the décisions of Lord Eldon. Chan-
cellor Kent cites a décision of the New York Court of Appeals in
Munro v. Allaire, 2 Caines, Cas. in Error, 183, 2 Am. Dec. 330, and
regrets that Mr. Justice Benson, who delivered the opinion of the
Court of Appeals, "much weakened the rule in the subséquent part of
the opinion." Chancellor Kent says :
"Justice Benson makes a distinction to show that the rule thus laid down
is not to be understood in absolute and unqualified sensé. A trustée, it is
said, is never to be assisted in this court by giving efCeet to such a purchase;
but It does not follow that chancery is bound in every case, and of course, to
annul such a purchase on the application of the cestui que trust. His words
are that it is not in every instance indispensable that ail the cestuis que trust
sbould agrée to waive tlie implied fraud. It may be sufficient for a majority,
or such other number or proportion of them, to agrée as to that, according
to the circumàtances of the case, it may be presumed there was no fraud in
fact." ■
Lord Eldon, whose decisiops are the main foun dation of Davoue, v.
Fanning, declared in Sandersy. Sanders, 13 Vesey, 603, "he had fre-
quèntly laid down as a principle in bankruptcy that, where trustées
for infants had purchased trust property, the court would not disturb
the, sale if it appeared to be bénéficiai to the infants, and would dis-
turb it if it did not appear for their benefit." That principle, his
lordship added, "though open to objection, must be adhered to until
a better could be found." Lord Hardwicke, in Whelpdale v. Cockson,
I Vesey, 9, s. c. 5 Vesey, 692, held that a majority of the cestuis
que trust wère sufficient to establish the purchase, whether the minority
KESSLEB & CO. V. EN8LBT OO. 403
consented or not. On a creditors' bill against executors he ordered
the creditors to elect whether they would abide by the purchase, and
declared that, if the majority elected not to abide by it, he would
order a resale. Chancellor Kent says that case was questioned and
practically overruled in later cases. He puts his objection to it on
the ground that "it seems contrary to the settled rights of the par-
ties; for one cestui que trust has no power to control or give away
the rights of another." It is to be observed that Lord Hardwicke in
no way denied the principle that courts, on grounds of inexorable
public policy, would set aside a trustee's purchase at his own sale, no
matter how fair and free from fraud or imposition, as a matter of
course, on seasonable application of the cestuis que trust. The diver-
gence is only on the point whether the minority or majority is to be
regarded as the cestuis que trustent who may complain of the sale.
Chancellor Kent's reason for ignoring the wishes and interest of the
majority is that "one cestui que trust has no power to control or give
away the rights of another." Do we not inevitably give one cestui
que trust "power to control the rights of another" when we allow
ininority stockholders to control the action of the corporation against
the wishes of the majority stockholders? Kent was dealing with
the case of cestuis que trustent whose rights against their trustée were
several, direct, and primary; and not one like this, where the right
asserted is purely derivative and joint, having to be worked out by
enforcing the right of a third person, for whom a majority of those
interested in the estate hâve tlie right to speak, and to elect not to
attack the sale, if they act fairly and in good faith. He was not deal-
ing with a case whicli involved not merely the question of resale, but
also the disposition of the thing sold, and the abandonment of some
other contract with the purchaser in connection with it, the loss of
which might far outweigh any advantage from setting aside the sale.
The doctrine he applied was intended as a shield for cestuis que
trustent, and not to furnish a sword with which the few may stab
the rights of the many, where ali belong to a class whose corrélative
rights and duties are fixed and prescribed by contract among them-
selves, that the majority, acting disinterestedly and fairly, shall control.
Exacting the rule of unanimity which Chancellor Kent applied to an
entirely différent case, in a case like this, is tantamount to declaring
that the majority stockholders hâve no rights which the minority or
the courts are bound to respect in setting aside a sale. The doctrine
is, as Chancellor Kent described it, "a mère technical rule of law,"
which ought not to be allowed in equity to override substantial justice,
or to enable a stockholder to harm a corporation, when his only
equity in the premises is to sue to benefit it.
The case in Cumberland Coal Company v. Sherman, supra, came
before the Suprême Court of Maryland, and is reported under the
title Hofïman Steam Company v. Iron Co., i6 Md. 456, "JJ Am. Dec.
311, and Cumberland Coal & Iron Company v. Sherman, 20 Md. 117.
Unlike this case, it was an effort by the wronged corporation to re-
scind. It presented a flagrant example of attempts by the use of
corporate power by an interested and dishonest majority to put corpo-
rate assets in the pockets of some of the stockholders to the préjudice
404 129 FEDERAL EEPOETEU.
of the rest. Neîther of those cases is authority to the point that actual
fraud of an officer may not be ratified by the governing body, or by
the vote of a majority less than the whole number of cestuis que
trustent, if they are not interested in the fraud, and act upon good
motives and sufficient considération. The implication from their lan-
guage is to the contrary. Brewer v. Boston Theater, 104 Mass. 394,
expressly admits the right of a corporation in a case of this kind, when
it acts through a disinterested and compétent governing body, to
ratify actual fraud upon it by its ofScer. It holds that a case like
this is an exception to the rule it lays down, and cites Great Luxem-
bourg Railway Co. v. Magna}', 25 Beavan, 586, on this point. Other
cases, of which Hazard v. Durant, 11 R. I. 195, is an example, déclare
that a majority cannot "wantonly," or "willfully," or "gratuitously"
condone a fraud against the wishes of a minority. Thèse décisions
go no further than to hold that ratification, which might otherwise
be valid when made by a disinterested corporate tribunal, is fraudu-
lent as to the stockholders, unless based upon a fair considération
nioving to the corporation. The fact that harm would come to the
corporation from rescinding is sufficient considération for ratification,
and takes the act out of the category of willful, wanton, or gratuitous
abandonment of corporate rights, or gifts of corporate property, which
at last are the things which are the essence of the fraud, of which
thèse cases speak, upon the rights of stockholders. Greenwood v.
Freight Company, 105 U. S. 16, 26 L. Ed. gôi, is not in point. The
Législature repealed the charter of a corporation. Greenwood, who
was a stockholder, insisted that the repeal impaired the obligation of
the contract made by the charter bctween the state and the corporation
within the meaning of the Constitution of the United States, and
insisted that the directors bring suit to test the matter. It was clear,
upon the facts stated, if the corporation had any rights, not to allow
the stockholders to sue when the corporation refused would amount
to its destruction. The court could see on the face of the bill that
the corporation had ail to gain and nothing to lose by bringing the
suit. Heath v. Erie Railroad, 8 Blatchf. 347, Fed. Cas. No. 6,306,
involved not only ultra vires, but illégal, acts, and the corrupt use of
corporate power by the wrongdoers for their own benefit. It is not
at ail in point on the question hère involved. Atwool v. Merriwether,
5 L. R. Eq. 649, sheds no light whatever on the principle which must
govern in a case of this kind. In that case individual shareholders,
who had been induced by a fraudulent prospectus to subscribe and
pay for stock in a corporation formed solely for the purchase of a
worthless mine from a person who, in connection with the promoter,
had hatched out the scheme to promote the corporation and hâve it
buy the mine, and afterwards defrauded it as to the price, on which
partial payment had been made, sought by bill in their own right to
rescind their subscriptions to the stock, and to recover what they had
paid, on the ground of the fraud, and, as ancillary relief, to rescind
the corporation's contract for the purchase of the mine, to get back
what had been paid on it, and to wind up the corporation. The owner
of the mine, the promoter, and the company were ail made défendants.
The company had paid out on the purchase money ail the payments
KES8LEB <& CO. V. BNSLET OO. 405
niade on the stock subscribed. Plainly, the complainants there as-
serted direct, purely personal, and primary rights of their own against
the corporation, the owner of the mine, and the promoter. They each
had a direct, individual, and personal right to rip up and unravel the
fraud from beginning to end, regardless of anything the corporation
might wish to do, in order to get their money back. The fraud and
seasonable offer to rescind destroyed the relation of stockholder, if
it ever existed, and tore down any foundation which might otherwise
exist of any implied right of any stockholder to interfère with the
defrauded party, or to control him in dealing with a direct personal
fraud on himself. The purchase of the mine by the corporation was
the main spring of the fraudulent contract by which the corporation
was brought into being and the complainants became stockholders,
and the stock subscription and the corporation's purchase were ail
parts of one and the same fraud. It is quite clear, in such a case,
that the personal, individual rights of the party defrauded could not
be controlled or altered in any way by anything the other victims of
the fraud might wish to do as to the wrong done them. It was of such
a condition of things that Vice Chancellor Wood said :
"The whole thing was obtalned by fraud, and the persons who may possibly
form the majorlty of shareholders could not in any way sanction a transac-
tion of that kind. I think in thls particular case it Is hardly necessary to
rely upon that, because having it plainly before me that I hâve a majority of
shareholders independent of those implicated in the fraud supporting the bill,
it would be idle to go through the circuitous course of saylng that leave must
be obtained to file the bill for the company."
Hère, there is nd majority supporting the bill. Hère, the relation of
shareholders is undoubted and undisputed. Hère, the rights of com-
plainants are purely derivative. Hère, the fraud does not go to the
existence of the company, or the contract by which complainants be-
came members. The rights of the stockholders, as among themselves,
can in no wise be changed, whatever may hâve been the fraud as
to the sale and purchase of the 240 acres of land ; for their relations to
one another were in no wise afïected by it. Complainants hère hâve,
in effect, intervened, "not as individuals, but as shareholders, in the
assertion of rights common to the shareholders, which the corporation
itself has declined to protect." Big Creek Gap Co. v. American Loan
& Trust Co. (C. C. A.) 127 Fed. 633 ; Dickerman v. Northern Trust Co.,
176 U. S. 181, 20 Sup. et. 311, 44 L. Ed. 423.
Bigelow on Fraud, vol. 2, p. 645, does not sustain the complainants.
The doctrine which Bigelow combats, and which we do not at ail as-
sert, is that a majority "hâve no right to use corporate control for the
purpose of appropriating the property of the corporation or its avails
or income to themselves, or to any other shareholders, to the préjudice
of the others." To bring that doctrine into play, the governing body
or stockholders whose act is challenged must avail themselves of the
corporate control to appropriate property to their own benefit, or to the
"exclusion" or "préjudice" of other shareholders. There is no "préj-
udice" to any shareholder in refusing to sue; he is not deprived of
his "rightful share" in any corporate asset, if suit is not to the interest
of the corporation, although the resiilt may be to leave some corporate
property in the hands of an individual shareholder who has wronged the
406 129 FBDEBAt; RKFOBTBR.
corporation. On the case presented in the original bill, the body which
it is urged could not ratify was neither interested, nor improperly con-
trolled, or gained anything by their décision which the corporation
lost, but only refused to sue, presumably after exercise of judgment on
the merits, because it was against corporate interests. The interest
which the minority stockholder has the right to call on the governing
body and the court to protect is the value of the interest which wilî in-
ure to the corporation after striking a balance of loss or gain between
standing by or rescinding the fraudulent transaction. He has no equity
to say to the corporation that the refusai to rescind — leaving corporate
property in the hands of a wrongdoer — to that extent "diminishes the
value of my shares," and "you must, therefore, at ail hazards, increase
the value of my shares by getting that property back, though by doing
so you may entail far greater loss on the corporation and dépréciation in
the value of ail the shares than if you allowed the unlawful transaction
to stand." There is no "exclusion of" or "préjudice" to any stock-
holder, or depriving him of his "rightful share," when the majority,
in the interest of the whole, déclines to bring loss upon the corporation
in such a case. Equity is perverted when, warped by obédience to a
"purely technical rule of law," it allows the individual stockholder to
use its powers to harm fellow shareholders, as innocent as himself of
any wrong, and equally deserving of protection, in the direction of the
common enterprise. Ratification of a wrong is but the exercise of the
rights and liberties of the person wronged. It is one of the powers
and incidents of ownership. The right may extend to actual as well
as constructive f raud. On principle, how can the -présence of f raud
vel non in the transaction détermine the ownership of the thing fraud-
ulently obtained, or who may ratify the fraud? Upon what principle
of logic or reason can a disinterested majority, acting fairly, be con-
ceded the right to condone a constructive fraud, and yet be denied
the right to condone actual fraud? It is wholly immaterial in ascer-
taining the owner of a thing wrongfully taken, or who has power to
ratify the fraud, whether its possessor was deprived of it by construc-
tive wrong or by actual fraud. The law itself détermines in this
case. The corporation is the person who was defrauded — the person
who, as to matters intra vires, may ratify or condone the wrong done
the corporation. There can be no doubt as to this when we consider
who the stockholders of a business corporation are, the purpose and law
under which they associate, and the inévitable implications which resuit
from such association, as to their power to speak for the corporation.
They form their relations to each other and the corporation voluntarily,
by contract, and for the financial gain of the body as a whole. They
contract to submit to the choice and direction of the majority, within
certain limits, as to the redress of wrongs to the entity called the cor-
poration, which equity regards as wrongs to the stockholders, solely be-
cause they are the ultimate owners of the property of that entity. The
law provides corporate tribunals to détermine, among other things, as
to the ratification of such wrongs. The stockholders elect the persons
who constitute this tribunal, to whose décisions they voluntarily contract
in advance to submit. The rights of persons thus associated by con-
tract, as against each other, about a matter purely intra vires, in the
KESSLEB & OO. V. ENSLET 00. 107
direction of the common agent, in furtherance of a Joint purpose, dé-
pend upon entirely différent considérations from those whicli govem
courts in passing upon the rights of ordinary cestuis que trustent to
control one another as to ratification of fraud upon their rights by a
trustée. In the latter case the minority cestuis que trustent hâve sev-
eral, direct, and independent rights against their trustée, and hâve no
binding contract between the majority and themselves that the ma-
jority, when acting fairly and in good faith, shall settle such questions ;
and the law as to them has not authorized any tribunal other than the
courts to intervene, and, when acting fairly, to bind the minority, under
any circumstances, to any extent, in the décision of such matters.
Less than 50 years ago the Suprême Court of this state held that
the owners of a steamboat, whose crew willfuUy ran down and sank
a flatboat, were not responsible for the wrong. It held, likewise, that
a corporation could not commit a libel, or be guilty of malicious prosecu-
tion. In applying the doctrine of ultra vires, it held that a charitable
corporation which loaned out its funds for investment could not re-
cover the money either under the contract or in an action for money had
and received. Thèse rulings largely represented the doctrine prevailing
in those days. What court would now think of measuring the rights
and liabilities of corporations in that regard by the old décisions?
Courts of law and equity hâve constantly expanded or contracted the ap-
plication of old and gênerai principles to meet the exigencies of mod-
em corporate development, and in properly adjusting the changed
rights and relations born of new conditions. "The sound administra-
tion of justice" will be best promoted by equity 's so molding its decrees
in cases of this kind as not, on the one hand, to give such effect to mere-
ly technical considération of the nature of tlae artificial person called the
corporation, as will improperly hamper the conduct of its business;
nor, on the other hand, to enable the governing body to oppress or in-
jure creditors or stockholders who are, in equity, the real owners of
the corporate property. Pomeroy's Eq. § m.
4. On the case made by the original bill it was quite plain that the
application to sue was properly denied. It did not appear what was
the value of the différent undertakings of the Ensley Company, and
hence it was not shown that the sale of the lands was for an inadéquate
considération, or that it was to the interest of the Land Company to
rescind. Vested rights of creditors would hâve been interfered with,
and the corporation put in péril, by ripping up transactions which re-
sulted in the trust deed. It did not appear that the refusai to sue was
not the resuit of the exercise of judgment on the merits. It was only
stated that there was a refusai to hear and to sue. It is now shown that
the Tennessee Company has paid off the debts of the Land Company,
and the property has been reconveyed to it freed from the trust. It
is now alleged that "none of the défendants" — which includes the Land
Company — ever treated the proposition of the Ensley Company as
binding, but that it had been in fact waived or abandoned by mutual
consent, and that improvements actually made on the land and indus-
tries attracted there, with the exception of a few houses built by re-
spondents, were not due to any effort or investment by the Enslçy Com-
pany, but were caused by the location of the steel plant. On the case
408 129 FEDERAL EBPPfiïEK.
as now stated the real considération for the sale of- the lands, charged
to hâve beén accomplished by deceit practiced by respondents while
they exercised the powers of the corporation, was $20,600, at a time
when the lands were worth over ten times that sum. It now appears
that the directors were informed by one of their own nuniber, when
urging before the directors' meeting that suit be brought, that the di-
rectors and officers of the Ensley Land Company had "fraudulently
acquired the choicest and most valuable parts of the lands of that Com-
pany, worth over two hundred thousand dollars, for about eighteen
thousand dollars," and in causing the conveyances çomplained of re-
spondents had been actuated in their own interest and for their own
benefit. The bill does not profess to state ail that took place at the di-
rectors' meeting, but it does specifically déclare that "the only reason"
given by the majority for opposing the suit by the Land Company was
that "such suit by the company might do the défendants with whom
the directors and stockholders sustained business and personal rela-
tions great injury by charging them with having committed a fraud on
the company, and that they were unwilHng, by reason of their personal
relations with défendants, to vote that such a suit be brought against
them by the company; that, if any stockholder had a grievance, the
courts were open to it." It is further alleged that the application to the
other board of directors and stockholders was rejected "for the same
reason assigned above."
Under such circumstances is the court authorized to go behind such
action of the stockholders and directors, not charged to be interested
or acting from selfish motives, as to a matter intra vires, and overturn
their décision? It cannot be denied upon the facts stated that it was
to the interest of the corporation to bring suit, nor could there be doubt
among fair and reasonable men what course fealty to the corporation
demanded at the hands of the governing body. Boards of directors
occupy fiduciary relations to the stockholders, and are bound to exer-
cise care and diligence proportionate to the importance of the matters
committed to their charge. Although equity will not remove a director
who is a statutory fiduciary, as it would an ordinary trustée, it will not
hesitate in proper cases to enjoin a director, or to set aside acts of mis-
conduct amounting to a breach of trust, which oppress a stockholder
or militate against the well-being of the corporation, as well as to hold
him personally accountable therefor. Want of proper care must not
be confounded with honest mistake of judgment. Déniai of request to
sue without passing judgment on the merits must not be confused with
the exercise of judgment as to the merits of the suit. The décision
with which we are hère concerned does not involve peculiar skill in art,
trade, or business, knowledge of markets, capacity to direct labor or
skill or to cope with financial and industrial situations, or the doing of
any of the things required to accomplish the mission of the corporation,
which, in a qualified sensé, are sometimes denominated the "législative
functions" of the corporation, and go to make up what is properly
termed "corporate administration." The matter concerns the exec-
utive or ministerial, rather than the législative, function of the cor-
poration. When ail disinterested and fair men, upon the facts upon
which the directors' act is challenged, would reach the conclusion that
KESSLBR se OO. V. ENSLEY OO. 4^9
tKe décision not to sue was improper, and greatly prejudicial to cofpo-
rate interests, and it appears that the directors hâve been négligent, or
hâve not deliberated or passed judgment on the merits of the question,
and refused to sue for some extraneous reason, or upon a mistaken view
of the law, the court cannot refuse to intervene, although the directors
may hâve been honest and disinterested. Gamble v. Q. C. W. Co., 123
N. Y. 99, 25 N. E. 201, 9 L,. R. A. 527 ; Briggs v. Spaulding, 141 U. S.
147, II Sup. Ct. 924, 35 L. Ed. 662; HolHns v. Brierfield Coal & Iron
Co., 150 U. S. 385, 14 Sup. Ct. 127, 37 L. Ed. 1113; Grififîn v. Pringle,
56 Ala. 492 ; Hun v. Cary, 82 N. Y. 74, 37 Am. Rep. 546 ; Pomeroy's
Eq. Jur. § 1070.
Respondents insist, "where the directors and stockholders hâve the
power to act, and are not adversely interested to the company, nor act-
ing from selfîsh interest, the motives which led them to décide as they
did cannot be inquired into." It is urged that it is improper to inquire
into their motives for the same reason which forbids inquiry into
the motives of members of the Législature. The functions of directors
and legislators in matters of this kind are unlike. Within the limits
of the Constitution the legislator's discrétion is absolute and irrevisa-
ble. Within the limits of the charter, which stands for the constitution
of the corporation, the directors hâve no unlimited discrétion about
ratifying a fraud or refusing to redress it. They hâve no unlimited
"power to act," and to bind their constituents, as the legislator has
within the limits of the Constitution. They hâve the undoubted power
to pass upon the question of redressing frauds upon the corporation,
but it is a qualified authority, in the employment of which they must
use diligence to learn the facts, and exercise reasonable judgment upon
the merits of the matter. If they act upon such matters negligently,
without considering the good of the corporation, and are moved by
extraneous considérations to wrong and injurious results, they commit
a breach of trust. The directors under no circumstances hâve the
right to gratuitously and capriciously abandon or give away the rights
of the corporation, either to a stockholder or to a stranger. Whenever
it clearly appears that they bave donc so, a clear breach of trust is
shown, and the courts will disregard such action. The directors hâve
not been vested with power to do such a thing "in any event." It is
without the limits of the powers or discrétion granted by the charter.
In complaints of this kind the décision of the court will turn mainly,
and generally entirely, upon the rightfulness and propriety vel non
of the action taken in view of the situation upon which the directors
acted. If the situation clearly justifies the action of the directory, or,
on the other hand, clearly shows that it was a breach of trust, the
motives which inspired them either way, whether good or bad, are en-
tirely immaterial in either case. Right action, though from bad mo-
tives, will not be disturbed, "for in equity, as at law, a fraudulent intent
is not the subject of judicial cognizance, uniess accompanied by wrong-
ful act." So, also, where the action taken is plainly négligent and un-
justifiable, good motives will not sustain it ; since a breach of trust can-
not be upheld in equity by showing that it was committed from good
motives. It is only "when the action of itself is lawful" that the case
falls within the rule of Oglesby v. Attrill, 105 U, S. 609, 26 L. Ed.
410 129 FEDERAL BEPORTEB.
1186, that înquiry will not be indulged as to the motives with which it
vvas donc. , There are many situations which are not so marked as to
clearly point out and prescribe the duty of the governing body, leaving
the question whether their action was a proper corporate détermination
or not to dépend upon other considérations. In such cases the dis-
sentient stockholder, to repel the presumption otherwise indulged that
the décision was a proper corporate détermination, may show that the
directors abdicated their function of passing judgment, and neglected
to exercise diligence and care in ascertaining the truth as to the cor-
porate matter with which they dealt, and that allowing the décision to
stand will work wrong and oppression to the stockholder. In such
cases the court must exercise an independent judgment of its own as to
the propriety of the décision of the directory; and the dissentient
stockholder, in this connection, unquestionably has the right not only
to show the real situation with which the governing body dealt, but that
in dealing with it it pretermitted the question of corporate interest, and
did not pass upon the merits, but, without considering either, acted
wrongly under the pressure of other motives. To this end he may
show what the directors said, as well as what they did, at the meeting
which took the action complained of. Such déclarations, of course,
are not necessarily binding upon the court, but may, when taken in
connection with other facts and circumstances, be given such weight
as they deserve in view of ail the surrounding circumstances. The
amended bill makes it plain that there could be no reasonable room
for doubt as to the duty to sue, and, further, that the refusai to sue
was not due to the conviction that suit was uncalled for, or not ad-
vantageous to corporate interest, but resulted either because the di-
rectors were unwilling, for personal reasons, to litigate with those whom
it was their duty to bring before the court, or that they were laboring
under a mistaken view of law that they had no duty in the premises,
and that the rights of stockholders could not, in any event, be afïected
by their refusai to act. Under thèse circumstances the refusai to bring
the suit was a breach of trust, and does not bind the stockholders, and
furnishes no reason why the court should refuse to entertain their bill.
5. It is urged, if the court entertains a bill of this kind at the
instance of minority stockholders challenging the action of the direc-
tory, as to matters purely intra vires, when the directory is not
charged to hâve been interested or to hâve acted from selfish motives,
it puts it in the power of any dissatisfied stockholder to substitute the
court for the board, and embroil the corporation in litigation over the
merits of every internai matter about which the stoclcholders differ,
although the directors hâve properly determined it, and their action be
proved to be wise and prudent. To justify refusai to entertain a
bill making charges like this, the court would be compelled to hold that
a disinterested governing body, not actuated by selfish motives, could
not commit a breach of trust as to matters intra vires. This, we hâve
seen, they can do, although honest and disinterested, when they act
negligently, and do not exercise common prudence in passing judg-
ment on the matter which they are called upon to décide. If the law
were otherwise, disinterested directors, not acting from selfish motives,
would be absolute dictators as to ail matters intra vires, and there
KESSLEK & CO. V. ENSLET OO. 411
would be no remedy, although they were négligent, whereby great
wrong and oppression were inflicted upon the stociiholders. Besides,
will it do to say that the directors are net acting from selfish mo-
tives when, from considérations of personal regard for wrongdoers,
or disinclination to incur their enmity, they pass over the merits of
a suit, and décline to bring it, in disregard of their officiai duty?
Aloreover, the governing body is under no necessity, unless it chooses
to take such burden, to take part in the litigation at large, or to risk
the vindication of its décision upon the facts stated by its adversa-
ries, as it necessarily does when it allows the matter to be tested on
demurrer to the bill. If the action of the directory is proper, regard-
less of the merits of the original controversy between the stockholders,
and its position bas been niisstated, the directory, by interposing a
proper plea to the whole bill, disclosing the real truth, may confine the
litigation to that question alone. The court would ordinarily set the
case down for hearing, in the first instance, on that plea, and, if the
proof sustained the plea, that would end the litigation. The Land
Company bas not availed itself of this right. It bas answered, in
substance, that it knows nothing about the frauds, and can neither
admit nor deny them. The answer, of course, cannot be looked to in
passing on the demurrers of the other parties. If it could be looked
to, it would show a plain case of utter indifférence to corporate in-
terest and négligence in the discharge of duty in refusing to bring
a suit, when the directors knew nothing about the merits, and the
charges, if true, made it the manifest duty and interest of the corpo-
ration to sue.
6. The Land Company lost title to its land by the sale under the
Warner judgment. Mrs. Warner conveyed to the Ensley Company,
which in turn conveyed to Barker and Bowron. The conveyance to
them, together with what was donc under color of the proceedings of
the stockholders' meeting of January 25, 1898, resulted in the trust
and légal title in Barker and Bowron. The Tennessee Company, for
the Land Company, aftervi'ards paid a large sum of money, which
liquidated the debt's of the Land Company, and thereupon the trus-
tées conveyed the lands to the Land Company, which now claims
and holds them through and under thèse conveyances. The Land
Company for years bas acquiesced in the several transactions, avail-
ing itself of their benefit, dealt with the trustées, inevitably made
some sort of settlement with them, and took title in subordination to
them, unquestionably after full knowledge of the facts. The Land
Company and ail claiming in subordination to it are now estopped
to assail thèse conveyances. "A court of equity does not listen with
much satisfaction to the complaint of a company that transactions were
illégal, which had its approval, which were essential to its protection
and the benefits of which it bas received." 113 U. S. 327, 5 Sup. Ct.
525, 28 L. Ed. 1003. Besides, respondents claim and hâve no estate
or interest in this part of the lands, and the rights of the parties
could in no way be advanced by setting thèse transactions aside, or
decreeing that the trust bas ended as to them, or that respondents
held whatever interest they acquired in them in trust. The bill
itself shows that the trust bas ended as to this part of the lands, and
412 329 FEDEBAL BEFOBTEB.
ail the équitable and légal estate is already back in the Lan'd Com-
pany,
7. The right of the Land Company to assail the title to the 240
acres of land bought from the company's trustées by Ramsey and
McCormack and the Ensley Company, or to hold the trustées to ac-
count for other portions not reconveyed, dépends upon considérations
net applicable to the rest of the lands. Barker and Bowron's convey-
ances of thèse 240 acres of land to respondents form no part of the
chain of title of the Land Company. It neither took nor holds any
of its property in subordination to thèse conveyances. It occupies
no inconsistent attitude in assaiiing them. The rétention of the pur-
chase money while respondents were in control of the Land Company,
or their knowledge of the matter, cannot, of course, be imputed to
the Land Company, as évidence of ratification or estoppel. It bas
done nothing, so far as appears by the bill, which shows any intent to
ratify the acts of the trustées in this particular, or which estops the
corporation from assaiiing them. Thèse conveyances may be rati-
fied if the majority, upon sufficient considération, after fuU knowledge
of the facts, deliberately take such action. Until such action, the
corporation, within any period short of the bar of the statute of
limitations, before inaction with knowledge bas built up an estoppel,
can assail thèse conveyances for fraud; and the complainants may
assert its rights in this respect if the action of the governing body,
in refusing to sue, does not foreclose them, which, as we bave seen,
it does not, and they hâve not been guilty of lâches.
8. The purpose and motives of the respondents throughout ail the
stages of thèse transactions are bitterly assailed both in the bill and
in the argument of counsel. It is not to be gainsaid that a positive
charge of, fraud, though on information and belief, must be accepted
as fully on demurrer as though made on positive knowledge. It does
not suffice, however, to charge fraud as a mère conclusion of the
pleader, but the facts out of which it arises must be stated. Where
the acts and transactions upon which are based the bad motives as-
cribed are fully set forth, the court will look to ail that is detailed to
détermine whether the inference of fraud is well founded, no matter
how positively it is charged in gênerai terms. It is not true that
there was studied concealment about the whole matter from the in-
ception of the transaction. The situation of the Land Company for
some time before the sale under the Warner judgment, in the then
condition of the times, must hâve impressed every one who knew
anything of its aiïairs that somèthing must soon be done to prevent
a race of diligence among its creditors, which might start at any time,
and resuit in ruin of the enterprise. The inévitable inference from
complainants' bill, which for some reason does not inform the court
as to complainants' knowledge on thèse points, is that the complainants
knew at the time of the critical condition of the corporation, though
they may bave been unacquainted with the détails or the proximate
amount of its debts. The just inference is that they knew of the sale
under the Warner judgment shortly after it occurred. If the title
had been taken directly to the Land Company after the sale under
the Warner judgment, or when there was rédemption from it, as
KESSLEE <Sc CO. T. ENSLET OO. 413
complainants insist ought to hâve been donc, it would hâve accom-
plished no useful purpose, and would only hâve invited other sales.
Complainants, who appear to be men of affairs, would hardly hâve
insisted at either time that it was wise to take the title directly in the
name of the Land Company, when there were numerous creditors,
some of whose debts were already in judgment, ready to pounce upon
the property. In order to extricate the enterprise from its difficul-
ties, it was necessary to put the property, if it could be done, in a
situation where individual creditors could not redeem on their own
account alone, or to the disadvantage of other creditors, so as to force
some common agreement with ail. It was manifestly the part of
wisdom to induce creditors to consent to put the lands in the hands
of trustées, and to wait until they could sell the lands in the ordinary
way, rather than to attempt to meet the demands upon the corpo-
ration by forced sales at ruinons sacrifice. Ramsey made his proposai
at an annual meeting. The publication of notice thereof in a Bir-
mingham paper, though the meeting itself should hâve been held at
Ensley, certainly gave more publicity to the call than if the publi-
cation had been made at Ensley, a neighboring, and much smaller,
but most closely connected, business town. The bill shows the place
of meeting fixed by the by-laws. There must hâve been a time
fixed for the annual meeting, and the law imputes knowledge of this
time to every stockholder. Nothing was done beforehand which
tended to prevent a gênerai attendance of stockholders at that meeting.
On the contrary, there seems to bave been a purpose to secure a full
attendance. McCormack certainly intended to make his proposai,
whatever his secret purpose in making it, at the meeting thus called.
The président, at the beginning of the meeting, reported the diffi-
culties of the corporation, and submitted his plan for surmounting
them. There was opposition to McCormack's proposition, and, doubt-
less, discussion of it, since a resolution was adopted concerning it, and
30 shares of stock voted against it. It would bave been an act of
inconceivable foUy on the part of a reasonable man, as Ramsey and
his associâtes nmst be presumed to be, after he proclaimed in open
meeting in the most formai way that he was acting in his own behalf,
and setting forth the numerous things he proposed to do on the prop-
erty for which he made his offer, in order to give value to the rest,
afterwards to attempt to falsify his act and plan, and deceive the
stockholders as to it, by causing an entry to be made on the minutes
that some one else made his proposition, when he was well aware that
every one who attended the meeting would know that the statement
was false. AU thèse occurrences related to important matters made
at a time in the history of the corporation, when they were sure to
attract attention among the stockholders.
The fidelity of one of the trustées selected to carry out the scheme
is in no wise assailed by the bill, but it is alleged he was an honest
man, and thought he was doing what was best for the corporation.
It would be strange, if the plot was conceived as far back as stated,
that such plotters would bave selected an honest trustée to intervene
between them and their evil purpose in getting the title in Mrs.
Warner and putting it out of her and into the hands of the Ensley
414. 129 FEDERAL EEPORTEB.
Company, Is it natural, if such was their aim, that they would volun-
tarily hâve interposée! a stumbling-block to the accomplishment of
their designs in the person of an honest trustée, when they could as
easily hâve selected a pHant instrument? The interposition of the
Ensley Company as a conduit of title to the trustées, and the pur-
chase of the town site from thèse trustées, by this same Ensley Com-
pany, which, just prior to that, had conveyed the property to thèse
trustées, and that, too, in the face of the fact that a proposition to
buy this same property had been made by Ramsey and associâtes,
with whom the stockholders reconimended the trustées to trade, was
sure to excite and stimulate inquiry as to who promoted the Ensley
Company, the purpose for which it was formed, and how the Ensley
Company induced the trustées to sell to them the very property which
the stockholders recommended the trustées to sell to Ramsej and as-
sociâtes. Any one knowing the facts — and stockholders were sure
to know them — would instinctively connect Ramsey and associâtes
in some way with the Ensley Company. The transaction, instead of
concealing their identity, tended to divulge it. It seems almost in-
credible that sensible men, as we must présume respondents to be,
would hâve adopted such a contrivance as holding out any hope of
successfully veiling their scheme of obtaining the property for them-
selves and concealing their identity and interest from the knowl-
edge of the stockholders, if they were actuated in the transaction by
the motives and purposes now imputed to them. The subséquent
conduct of McCormack and associâtes is utterly inconsistent with such
a theory. About a month after McCormack made his proposai at
the adjourned annual meeting, he and Ramsey openly purchased in
their own behalf and name lo acres of land from the trustées in the
heart of the town site, including the hôtel and other prominent build-
ings thereon, acting openly in taking possession, and spreading their
deed upon the record. Shortly afterwards, they purchased in their
own names lo acres more from the trustées in another part of the
town, and again put their deed on record. That part of the bill which
sets forth notice of the published meeting at Birmingham makes as
part of the bill a copy of the minutes, which contains a notice, signed
by the président and secretary, addressed to the stockholders, stating
that they would be asked to consider at the annual meeting a plan
looking to the sale of the land by the Land Company, and that, as an
incident to this, the stockholders would be asked to pass upon the
policy of relinquishing the statutory right of rédemption, etc. This
circular further stated that a plan had been devised for dealing with
the company's affairs which it was believed would prove satisfac-
tory, and would undoubtedly redound to the interest of the stock-
holders, and concluded by urging attendance of ail the stockholders,
"as matters of vital importance" would be transacted at the meeting.
The bill is silent whether this circular was ever issued or not, or
whether complainants knew of it at or about that time. The language
and posture of this circular copied Verbatim upon the minutes, to
which every stockholder had the right of access, immediately at the
foot of the notice which was published, signed by the officers of the
corporation, and addressed to its stockholders, leads to the conclusion
KESSLEB 4c CO. V. ENSLET CO. il5
that it was intended for publication along with the formai notice for
the meeting, which it is admitted was published, if, indeed, this
circular was not in fact issued and published — a point the allégations
of the bill do not settle. Whether or not it was published and sent
out, its appearance upon the minutes shows the plan of liquidating
the affairs of the company was not kept a guarded secret, but openly
spread on the minutes at least, before the meeting at which it was
expected to présent the plan, and more than three weeks before it was
actually presented to the assembled stockholders. Is it not a most prob-
able and reasonable presumption, under thèse circumstances, that the
matter had been discussed with creditors, and at least with some of the
stockholders, beforehand, and that the steps taken just prior to the
meeting were generally known to the creditors, if not to the stock-
holders generally? It is not certain from the allégations of the bill
whether it intends to deny that a resolution was passed, as the minutes
show, accepting McCormack's proposition under the name of the
Ensley Company. May not the discrepancy in the state of the title,
as stated, at the time the meeting was held, be reasonably and fairly
accounted for on the presumption that the conveyances to the Ensley
Company, and by it to Barker and Bowron, were but advance steps
to put in opération the plan already agreed to by creditors, and not
thought to be objectionable to the stockholders, in an honest effort
to extricate the corporation from its difficulties, and save something
to the stockholders? The Ensley Company after getting the Warner
title, almost immediately conveyed ail the lands it had bought, at
about cost, to Barker and Bowron, with whom there had been,
evidently, an understanding that the title should be transferred to
them, and they would stand seised for the creditors and stockholders.
As the law devoted the property to the very trust under which Barker
and Bowron acknowledged they held it, the dealing with the Warner
title, of itself, neither could nor did harm the corporation.
It is urged there was fraud in using the money of the Tennessee
Company in redeeming the lands and getting them into the hands of
the trustées. But how? If the Tennessee Company owed the Land
Company, as charged, it was proper to use the money of the former
company to protect the property of the Land Company in that way.
If the Tennessee Company did not owe the money, directors could
borrow from it, or might use their own money for such a purpose,
without being guilty of the slightest misconduct. It is évident, whoso-
ever's money it was, the Land Company has had an accounting as to
it. That is an irrésistible inference from the allégations and silence
of the amended bill on thèse points. The correctness of the statement
that the Tennessee Company would hâve come to the rescue and
prevented the sale if it had been informed is overthrown by the fact
that it did not do so, and allbwed the property to remain in the hands
of the trustées for some time, to be disposed of by them in meeting
its debts. How long, the bill for some reason déclines to inform the
court.
Shook's statement as to the condition of the title, which was literally
incorrect in several particulars at the time he made it to the stock-
holders. though not aubstantially erroneous as a gênerai statement of
416 139 FEDERAL EBPOETEE,
the condition of its affairs, could hardly hâve misled or been intended
io mislead anybody as to its solvency and the sore straits to which it
was reduced. When a meeting of business men is told that it is pro-
posed to relinquish the "statutory right of rédemption" in property,
the ordinary stockholder understands that his property has been sold,
and nothing reaiains but the right given by the statute to get it back
by paying the debt for which it was sold upon the terms prescribed by
the statute. There were directors in the several boards of the Land
Company during the next four years, who are not charged with com-
plicity in thèse transactions, who were under duty to protect its inter-
est, who certainly knew of the purchase at the time, and, as the court
must suppose, were well acquainted with the value of the property
sold. Is it reasonable to suppose, that they would remain silent, and
take no steps to protect their company, if they believed it had been
wronged? McCormack and Ramsey, leaving out ail question about
the value of the undertakings in behalf of the Ensley Company, paid
more for the 240 acres they purchased than the whole 3,700 acres
brought under exécution sale the year before. The Tennessee Com-
pany, which is the largest stockholder in the Land Company, certainly
knew of thèse sales about the time they happened. It was at least
watchful of the interest of the Land Company. It paid a large sum
of money for it to the trustées, procured a conveyance from them
to the Land Company, and for the Land Company, and, by its au-
thority, settled with thèse trustées, at least for the property then in
their hands, and doubtless knew what they had done with other por-
tions not reconveyed. Yet, so far as the bill shows, neither that
company nor any of the disinterested members of the boards of direct-
ors hâve, even to this day, made any complaint, or otherwise chal-
lenged any of thèse dealings. Much stress is laid upon the fact that
the respondents, in acting as they did, while ofiicers of the Tennessee
Company, which was the majority stockholder of the Land Company,
breached their trust to it. So far as that phase of the matter is
concerned, the Tennessee Company alone can complain, and its atti-
tude, as shown by the bill, for nearly four years prior to its fîling,
is certainly not one of disapproval or dissent. Whatever be the correct
view, thèse transactions are certainly of no moment now, save as
they shed light upon the bona lides of the purchase of the 240 acres.
In the light of ail thèse things, but for the explicit statement that
respondents concealed from the stockholders knowledge of the com-
ing of the steel plant, and did not advise the trustées of the peculiar
value of the lands sold — the town site — in view of the great increase
in price which would naturally take place when the plant was built,
the court, giving the conduct of the respondents the benefit of the com-
mon presumption in favor of the rectitude of men's intentions, would
hâve no hésitation in saying, on a fair construction of the averments
of the bill, that the respondents were not endeavoring to pave the
way for their own aggrandizement in thèse transactions, but were
rather honestly striving to extricate the property, as best they could,
from its difficulties, and save it for the stockholders, and that in ac-
compîishing that purpose they were either ignorant of the trammels
which the law puts upon trustées in dealing with their cestuis que
EESSLEB & CO. V. ENSLET CO. 417
trustent, or else, having acted openly, and with no bad motive, in the
interest of the corporation, relied on their associâtes to approve what
they did. On the positive charge as to the deceit and concealment,
it must be held on demurrer that actual fraud was practiced in thèse
parchases; but it is not inconsistent with the facts detailed to pré-
sume that the temptation to départ from rectitude came and was
>ielded to in the interval elapsing between the lodging of the title in
Barker and Bowron and the meeting of the stockholders.
Much has been said by counsel on both sides in this connection, as
10 the right of the court to look to the character of the respondents
in determining the motives for their acts. There may be cases where
a judge may avail himself of personal knowledge of the high character
of litigants, in passing upon the motives of their acts, in cases before
him. This is not such a case. The question on demurrer is not wheth-
er the respondents are guilty of fraud, but whether, upon the allégations
of the bill, fraud has been well charged. On an issue of this sort char-
acter sheds no light and can hâve no influence. Men of high character
can commit fraud, and such men, though entirely guiltless, may be
charged with fraud.
9, The next important question is whether the complainants hâve
been guilty of lâches, and, in that connection, the proper construction
of the allégations of the amended bill. Is a stockholder, in a case like
this, on an issue of lâches between him and a fiduciary alleged to be a
possessor mala fide, charged, as a matter of law, with knowledge or
notice of the possession of parcels of corporate property by an ofiicer
or director, or thereby put under duty to trace how such officer holds
the property and how he acquired it, as soon as he knew or should hâve
known of such possession? If he has knowledge that his fiduciary has
committed constructive fraud, does that knowledge charge him, with-
out more, with actual knowledge or notice of the fraud or deceit in ob-
taining title or possession of the property? Some of the English au-
thorities hold that it is no part of a nonmanaging shareholder's duty
to look after the management of the corporate property, nor is it suf-
ficient to show that he might hâve become acquainted with it. It
must be shown that he did so. The American authorities generally,
and certainly the courts of the United States, hold that "means of
knowledge plainly within the reach of stockholders by the exercise of
the slightest diligence is, in légal effect, the équivalent of knowledge."
There is, however, no presumption of law that an absent stockholder,
on an issue of lâches between him and his fiduciary, either knew or
did not know what was donc at a regular or adjourned meeting of stock-
holders, which he did not attend, or as to the disposition the managers
of his corporation hâve made of parts of corporate property in the
conduct of its business. Such issues are to be solved as inferences of
fact, in view of the comparative magnitude or insigniiicance of the
transactions complained of, the openness and publicity attending it,
the volume and nature of the business of the corporation, the extent
of the territory in which its opérations are carried on, the place where
the transaction occurred, the value of the stockholder's interest in the
corporation, his présence or absence from its home, the nature of
his own pursuits, and ail the surrounding circumstances which throw
129 F.— 2T
418 129 FEDERAL BEFORTEB.
light upon the question. With the vast multitude of corporations cov-
ering every field of business and industry, and the vast number of stock-
holders scattered in différent parts of the country, at a distance f rom the
opérations of the corporation, and the fréquent récurrence (sometimes
by design and sometimes otherwise) of improper transactions which
militate against the interests and rights of minority shareholders, it
would not be promotive of justice, when the cestui que trust seeks to
call his trustée to account, to hold, as matter of law, that adverse pos-
session of a portion of the corporate property by an officer or agent
of the corporation, for a period short of the bar of limitations, of itself
charged the stockholder with notice or knowledge of how and when the
property was obtained, or imputes to him knowledge of what was done
at stocicholders' meetings, which he did not attend. Lâches is the
créature of circumstances. It is inaction when, in good conscience,
there should be action. Inactivity, when it is not blâmable, is not
lâches. No one can be charged with négligence in the assertion of his
rights unless he knew them, or is blâmable for not knowing them.
There is no such thing as acquiescence in a wrong unless there is
notice or knowledge of that wrong. It must be remembered, in con-
struing the amended bill, that it was intended to repel inferences of fact
which the court felt compelled to draw in the particulars pointed in the
former opinion. Nevertheless, the amended bill is still silent concern-
ing many important questions of fact then discussed. The amended
bill does not tell when complainants first learned of the plan of the prési-
dent to put the property in the hands of trustées; no intimation is
given of the date when the steel plant was erected, or when complain-
ants first learned of the fact. The court is not informed when the
Tennessee Company paid off the debts of the Land Company and its
property was reconveyed to it, or what took place between the L,and
Company and its trustées as to the various transactions had by the
trustées in disposing of the property which came into their hands.
Nothing is stated as to when complainants first learned what took place
at the stockholders' meeting of January 25, 1898. The gênerai alléga-
tions of ignorance that Shook and McCormack had acquired the
Warner judgment, that the sale was not necessitated by pressure of
creditors, that the Ensley Company was organized for the benefit of
respondents and they were acting adversely, is, by the language of the
déniais, limited to any period prior to the stockholders' meeting of Jan-
uary 25, 1898. For aught that appears, one of the complainants now
before the court may hâve been one of the holders of the 30 shares of
stock which voted against McCormack's proposition. The court is
bound to présume that complainants knew of the constructive fraud on
the part of the respondents in the purchase of the 240 acres of land at
least shortly after thèse transactions happened. In this respect the
amended bill is not materially difi^erent from the original bill, save
in the statement that no change has taken place which would make it
inéquitable to rescind.
Giving due weight to the studied silence of the amended bill in the
particulars pointed out, in what attitude does it place the complainants
as to knowledge or notice of the deceit and concealment, the actual
fraud charged, in the dealings with the trustées and stockholders, as
KESSLEE A CO. V. ENSLET 00. M9
to the purchase of thèse 240 acres of land? Complaînants knew, as
must be inferred, long before the bill was filed, of the constructive
fraud. They had ascertained who the Ensley Company was. They
knew the steel plant had been built, and when; presumably a short
time after the sale. They knew there had been a subséquent rise in the
values of the property sold. They knew what property had been sold,
and how it was situated with référence to the steel plant. The bill,
however, avers explicitly that there were no records on the books of the
Tennessee Company or of the L,and Company which would hâve dis-
closed the actual fraud charged, or put the Land Company, or any of
its disinterested officers and stockholders, on inquiry. Complainants
aver explicitly that they never entertained suspicion of the good faith
or rectitude of the défendants in the transactions complained of, but,
on the contrary, trusted and confided in them until put upon notice by
a speech made by one of the défendants, the substance of which is given,
at Ensley, about July, 1901, when they commenced to prosecute inquiry,
etc. They aver that they were ignorant of the actual fraud for thèse
reasons. Do the facts admitted by the bill, fairly construed, disprove
or overthrow the last assertion ? Conceding that the respondents knew
of the proceedings at the stockholders' meeting, and that the Ensley
Company was in possession of the lands bought by it, and McCormack
and Ramsey were in possession of the 20 acres bought by them, and
also when the steel plant was erected, does that charge complainants
with knowledge that respondents concealed or withheld knowledge of
the expected building of the steel plant from their fellow shareholders,
or from their trustées when they purchased from them ? Certainly the
possession of the land did not give notice of the actual fraud. It shows
only a constructive fraud. A purchase by a trustée is not necessarily
fraudulent in fact or in morals. Complainants might hâve been wil-
ling to waive a fair purchase from their trustées, when they would not
hâve been willing for the purchase to stand, if they had knowri it was
tainted with actual fraud. Certainly the things which complainants
knew would, to prudent minds, hâve suggested inquiry, whether knowl-
edge of the building of the steel plant had been withheld from the stock-
holders, which would hâve developed the fact. Complainants did not
inquire, and remained in actual ignorance. Are the respondents at fault
for not making the inquiry? They were dealing with their trustées.
They had a right to présume that they would not be guilty of any
actual fraud. They had a right to rely upon that presumption, and
not to watch or suspect them. If complainants did not make the in-
quiries, they would not be blâmable, as between themselves and the
trustées, where the failure to inquire and conséquent ignorance grew
out of confidence in the trustées, and the fact that the fraud was con-
cealed as charged. Kilbourn v. Stmderland, 130 U. S. 519, 9 Sup. Ct.
594, 32 L. Ed. 1005 ; Thompson v. Finch, 22 Beavan, 325 ; Larzelere
v. Starkweather, 38 Mich. 96; Jones v. Smith, i Hare, 109. Knowl-
edge of other things which must be imputed to complainants, unaccom-
panied by the statements hère made that there was actual ignorance of
the deceits charged, and that suspicion had not been aroused, would
hâve led to the inferences of fact, drawn on demurrer to the original
bill, that suspicion had developed inquiry which had been followed
420 129 FEDSKAL ESFOEIËB.
up, and led to the knowledge of the fraud complaîned of, long before
the filing of the bill. If such had been the fact, it would hâve put com-
plainants, in view of the long delay which has occurred, in the attitude
of expectant watchers, waiting to affirm or disavow the transaction as
their interest might suggest, speculating upon respondents ; an attitude
which of itself would require a court to décline relief as regards prop-
erty under the changing conditions hère involved. Complainants, how-
ever, expHcitly aver that their reliance upon respondents prevented
suspicion and lulled inquiry, and that, in conséquence, they were ac-
tually ignorant of the fraud which it is alleged was concealed, until
complainants discovered it shortly before the filing of the bill.
The case, as now presented, is no longer one whtre complainants
hâve acquiesced, at least as to the actual fraud charged. In reaching
this conclusion, the court has not been unmindful that long delay has
elapsed before complaint was made; that only the holders of thèse
few shares are asking to set aside transactions which its several boards
of directors and vast majority of stockholders hâve neither assailed,
nor shown any disposition to assail, after being invited to do so by this
bill, which, with its array of charges, has been pending for many
months ; nor that it seems strange, in view of the knowledge that must
be imputed to complainants in the matters to which we hâve referred,
that complainants did not earlier entertain suspicion and prosecute in-
quiry which would hâve long since led to the discovery of the griev-
ances complained of. The court, however, cannot find complainants
guilty of lâches in thèse respects without breaking down the principle
that the cestui que trust may assume the rectitude of his trustée, and
has the moral and légal right to indulge full confidence, without making
inquiry, even when he docs not understand a transaction, until knowl-
edge, direct or indirect, actually comes home to him who reposes con-
fidence that his trustée has wandered from the paths of rectitude.
Until then the law does not require him who gives confidence to watch
or suspect him in whom the confidence is reposed. If the confidence is
in fact reposed, and the cestui que trust is lulled into fancied security,
and therefore does not watch or suspect, and thus remains in actual
ignorance, it would assail the usefulness and integrity of the trust
relation to absolve the trustée of accountability because the cestui que
trust should bave suspected the trustee's infidelity, and earlier ascer-
tained the truth, if he had not extended such ample confidence to one
whom he had the right to trust implicitly. A trustée, on an issue of
good faith with the cestu que trust, cannot be heard to say, in a court
of equity, that a cestui que trust, who in fact remained in ignorance of
actual fraud because he trusted, would not hâve been so long ignorant
if he had not trusted too much, and was therefore guilty of lâches in
the measure of confidence extended. A trustée in possession mala fide
cannot avail himself of changed circumstances growing up in the in-
terval between the commission of a concealed fraud and its discovery
to defeat rescission when the cestui que trust, who remained in ac-
tual ignorance by reason of trust in him, acts promptiy on discovery.
10. It is objected by the demurrers that complainants do not prop-
erly ofl^er to do equity, and restore the status quo, and that the cred-
(tors of the Ensley Land Company are not made parties. It appears
OAMDEN INTERSTATE ET. 00. V. CITY OF CATLETXSBXJEG. 421
from the amended bill that the debts due creditors hâve been paid by
the Tennessee Company. There are, therefore, no longer any creditors
to be affected by the decree herein. The bill does not contain a gênerai
offer to do equity, or to submit to and abide by such orders as to equity
may seem meet. It does, however, allège in a gênerai way that some
of the property has been sold to bona fide purchasers, and therefore
cannot be restored to the complainants. It prays for an accounting,
etc., and concludes, "And complainants hereby oflfer to allow a crédit
to the défendants for ail sums lawfully expended for said Ensley
Land Company, or which inured to its benefit." It is évident from
the bill, if complainants prove their case, there must be an accounting.
While the bill shows the payment of considérable sums of money inur-
ing to the benefit of the Land Company for which respondents will be
entitled to crédits, the amounts for which respondents may be debited
on account of sales of land to bona fide purchasers does not appear.
The prayer to set aside the conveyances and for an accounting, and the
ofïer to allow a crédit for ail expenditures which inured to the benefit
of the Land Company, bind the complainants to ail the conséquences of
rescission and an accounting, and authorize the court, if the state of the
accounts require it, to render a decree in favor of the respondents for
any balance due them, without a more spécifie offer of equity, and to
make ail proper decrees to fully restore the status quo. Goldthwaite
V. Day, 149 Mass. 187, 21 N. E. 359; Miller v. L. & N. R. R. Co., 83
Ala. 275, 4 South. 842, 3 Am. St. Rep. 7.-^^ ; Cumberland Coal & Iron
Co. v. Sherman et al., 20 Md. 133. At this stnçre of the proceedings the
ofïer is sufficient.
The spécial demurrers to so much of the bill as seeks to vacate and
annul the sherifif's sale under the Warner judgment, the conveyances to
the Ensley Company, its conveyance to Barker and Bowron, their déc-
laration of trust, and the conveyance made by Shook pursuant to the
resolution of the stockholders, releasing the right of rédemption, etc.,
are well taken. The other demurrers are not well taken, and will be
overruled. A decree may be presented sustaining and overruling the
demurrers on the points stated, in conformity with the opinion, giving
the respondents 40 djys in which to answer.
CAMDBN INTERSTATE RY. CO. v. CITY OF CATLETTSBURG et al.
(Circuit Court, B. D. Kentucky. April 4, 1904)
1. Jtjeisdiction of Fedëbal Coxtbts— Suit against State.
A municipal corporation is not an agency of the state In such sensé that
a suit agalnst it is one against the state within the meaning of the elev-
enth constitutional amendaient, excludlng such suits from fédéral Juris-
dlction.
2. Same— Enjoining Peoceedings in State Court.
Under Rev. St. U. S. § 720 [U. S. Comp. St. 1901, p. 581], prohibiting
fédéral courts from granting an injunction to stay proceedings in a state
H 1. Fédéral jurisdiction of suits against state, see note to Tindall v. Wes-
ley, 13 C. O. A. 165.
11 2. Fédéral courts enjoinlng proceedings in state courts, see notes to
Garner v. Second Nat. Bank, 16 C. C. A. 90 ; Central Trust Co. v. Grantham,
27 C. C. A. 575.
422 129 FEDERAL REPORTER.
court, a fédéral court Is wlthout jurisdlctlon to enjoln the further prose-
cution of erlminal proceedings instituted by a city for the violation of an
ordinance, although such sectioii does not deprlve it of jurisdiction to
enjoin tbreatened proceedings, which hâve not yet been eommenced.
3. Equity Jukisdiction— Enjoiking Ceiminal Peoceedings.
A court of equlty bas no power to enjoin the institution or prosecu-
tion of crimlnal proceedings, unless tîiey are instituted by a party to a
suit already pending before it, and to try the same right that is in issue
tberein, or to prohibit the invasion of rights of property by the enforce-
ment of an unconstitutional law.
4. Same.
The grant to a rallroad company of the right to construct Its road on
the streets of a city does not vest it with property rights which render
unconstitutional a subséquent law or ordinance enacted In the exercise
of the police power of the state to secure the safety of the public by re-
quirlng the company to malntain flagmen at street crossings, and the
prosecution of crimlnal proceedings for the enforcement of such a law
or ordinance cannot be enjoined by a court of equity.
In Equity. On motion for preliminary injunction and on demur-
rer to bill.
Brown & Vinson, Thos. R. Brown, and Z. T. Vinson, for plaintifï.
P. K. Malin and H. C. Sullivan, for défendant.
COCHRAN, District Judge. The complainant is a West Virginia
corporation owning and operating an electric railroad between Hunt-
ington, W. Va., and Ironton, Ohio, which passes in its course through
the city of Catlettsburg, a municipal corporation of the fourth class
in the state of Kentucky. The défendants are said city and the
mayor and the chief of police thereof. The object of the suit is to
enjoin the prosecution of proceedings already instituted and threat-
ened to be instituted against complainant in the police court of said
city for violation of an ordinance thereof which requires it to keep
flagmen at a certain point on Center street, and at the intersection
thereof and Division street, and at the intersection of Division and
Louisa streets, or, in lieu of flagmen at said intersections, to hâve
the conductor of each car flag it around the curves thereat. The
ordinance provides that each day's failure to comply therewith shall
be deemed a separate offense, and fixes a fîhe of $io for each
offense. The complainant moves for a preliminary injunction, and
défendants demur to the bill. Each step raises the same questions.
It is urged by the défendants that this court has no jurisdiction
of this suit because of the eleventh amendment to the fédéral Con- .,
stitution. That amendment is in thèse words :
"The judicial power of the United States shall not be construed to extend
to any suit in law or equity, eommenced or prosecuted against one of the
United States by citizens of another state, or by citizens or subjects of any
foreign state."
They cite authorities to the effect that a municipal corporation is an
agent of the state government for local purposes, and contend, there-
fore, that a suit against such corporation and its oiïîcers is a suit
1[3. Kestraining criminal prosecutions, see note to Arbuckle v. Blackburn,
51 0. C. A. 133.
See Injunction, vol. 27, Cent. Dig. §§ 178, 179.
OAMDEN INTEBSTATE KT. OO. V. OITT OF OATLETTSBITEG. 42S
against "one of the United States," within the meaning of that
amendment. That such a corporation is such an agent is undoubt-
edly true, but it does not foUow therefrom that a suit against it or
its officers is such a suit. The most that can be said is that it is a
suit against a subdivision of one of said states, not that it is a suit
against one of said states itself. This being so, the amendment in
question does not deny jurisdiction to the fédéral courts of the suit,
for it dénies to them jurisdiction only of suits against "one of the
United States," and not against a subdivision thereof. If the féd-
éral courts do not, by reason of said amendment, hâve jurisdiction
of suits against municipal corporations, it is hard to understand
upon what ground it has been that they hâve so often taken juris-
diction of suits against them. So far as my research has gone, I
hâve not found a case where it has been urged that fédéral courts
do not hâve such jurisdiction, much less where it has been so held.
The cases cited by counsel for défendants in support of the propo-
sition that municipal corporations are state agencies for local pur-
poses were mostly suits against municipal corporations, and in none
of them was it suggested that the suits could not be maintained for
want of jurisdiction; on the contrary, in each of them jurisdiction
to dispose of them on their merits was exercised. I think it there-
fore clear that the jurisdiction of this court of this cause is not af-
fected by this considération.
But this is not the only ground upon which it can be claimed that
this court has no jurisdiction, though it is the only one that has been
urged. It is certain tliat it has no jurisdiction to enjoin the further
prosecution of the proceedings already instituted and now pending.
This is because of section 720, Rev. St. U. S. [U, S. Comp. St. 1901, p.
581], which is in thèse words:
"ïhe writ of injunction shall not be granted by any court of the United
States to stay proceedings in any court of a state except in cases wliere sucti
injunction may be authorized by any law relating to proceedings in bank-
ruptcy."
It is well settled that such proceedings as are now pending are pro-
ceedings in a court of the state of Kentucky within the meaning of
said statutory provision. In the case of Yick Wo v. Crowley (C.
C.) 26 Fed. 207, it was held that said section forbade the issuance
of an injunction to prevent a police officer of a city from serving
warrants of arrest issued by a state court for violation of city or-
dinances claimed to be in contravention of the fourteenth amend-
ment of the United States Constitution and the treaty with China.
Said statutory provision, however, has no relation to such proceed-
ings as are not now pending, but are only threatened. In the case
of Rhodes & Jacobs Mfg. Co. v. New Hampshire (C. C.) 70 Fed.
721, Judge Putnam said:
"We are asked to enjoin one of the défendants from proceeding in his offi-
ciai capacity as a justice of a state police court, admittedly a judicial func-
tion ; and ail the other défendants are sought to be restrained in the exercise
of their officiai duties solely and purely with référence to the incidents of
proceedings in the justice's court It Is plain that under section 720 of the
Revised Statutes the proceedings instituted before this bill was filed and
described in it cannot be enjoined by this court. It seems, however, to be
424 129 FEDERAL EEPOETBB,
for the most part considered that this section does not apply to proceedlngs,
elther crlmlnal or civil, wliich liave not In fact commenced, but which are
threatened by state officiais. Mr. Justice Bradley, in Liye Stocli Dealers &
Butchers' Ass'n v. Crescent City Live Stock Landing & glaughter-House Co.,
1 Abb. (U. S.) 388, 404, 407, Fed. Cas. No. 8,408, and Mr. Justice Blatcbford
in Fisk v. R. R. Co., 10 Blatcbf. 518, Fed. Cas. No. 4,830. A llke distinction
seems also to bave been made by Judge Sawyer in Yick Wo v. Crowley [0.
G.] 26 Fed. 207. Tberefore if we had only tbis statutory provision to con-
sider, we might flnd no difflculty in going to an injunction against criminal
proceedlngs tlu-eatened, but not commenced, when the bill was filed."
But though it cannot be said that this court has no jurisdiction
to enjoin the institution of threatened proceedings under said ordi-
nance because of said statutory provision, there is ground upon which
it may be urged that it has not such jurisdiction. That ground is
that proceedings under said ordinance are criminal proceedings, and
a court of equity has no jurisdiction to enjoin the institution or
prosecution of such proceedings. There can be no doubt but that
such is the nature of such proceedings; and it is equally true that,
as a gênerai rule, a court of equity is without jurisdiction to enjoin
their institution or prosecution. But to this rule there are two ex-
ceptions, and the question arises whether this case cornes within
either one of them. To détermine this question correctly it is es-
sential to understand exactly just what those two exceptions are.
And hère we will limit our attention to décisions of the Suprême
Court of the United States relevant to the matter. The leading
case on the subject, though what is said in the opinion cherein in re-
lation to the jurisdiction of a court of equity to enjoin criminal pro-
ceedings is open to the suggestion that it was obiter, is the case of
In re Sawyer, 124 U. S. 200, 8 Sup. Ct. 482, 31 L. Ed. 402. That
tvas a pétition by the mayor and councilmen of Lincoln, Neb., for
a writ of habeas corpus to release them from imprisonment for con-
tempt of court in disobeying an order of the United States Circuit
Court for that state enjoining them from prosecuting proceedings
already instituted and then pending to remove the police judge of
said city from his office for malfeasance therein. The contempt de-
pended upon the question whether the Circuit Court had jurisdiction
to make the order disobeyed. It was held that it did not hâve such
jurisdiction, and the pétition was therefore granted. The ground
upon which it was held that said court was wanting in such juris-
diction was that a court of equity has no jurisdiction to enjoin pro-
ceedings to remove a public officer from his office, and this without
regard to the nature of the proceedings. Mr. Justice Gray, who
delivered the opinion of the court, suggested that there were sev-
eral possible views as to their nature, without deciding which was
the true one. They might be regarded as criminal or civil, and, if
the latter, they might be regarded as judicial or administrative. It
regarded as civil judicial proceedings, he held that there was in this
an additional reason for holding that the lower court was without
jurisdiction to enjoin their prosecution, because of section 720, Rev.
St. U. S., heretofore referred to_, which prohibits a court of the Unit-
ed States granting a writ of injunction to restrain proceedings in a
state court. This reason equally applied if the proceedings were re-
OAMDEN INTBESïATE BY. 00. V. OITT OF OATLETTSBtJIta. *25
garded as criminal, and therefore judicial, in their character, though
no suggestion was made as to this. If, however, theproceedings
were regarded as criminal, he held that there was in this considéra-
tion a reason also for the lower court being without jurisdiction to
make the order which had been disobeyed. And in this connection
he stated the law in regard to the right of a court of equity to en-
join criminal proceedings. Seemingly, at least, he recognized but
one exception to the gênerai rule on the subject. In the course of
his considération of the subject he said :
"The modem décisions in England by eminent equity Judges concur in hold-
ing that a court of chancery has no power to restrain criminal proceedings
iinless they are instituted by a party to a suit already pending before it, and
to try the same right that is in issue there."
Mr. Justice Field, who dehvered a concurring opinion, had this to
say on the subject :
"I concur also in what is said in the opinion of the court as to the want of
jurisdiction of a court of equity over criminal proceedings, but do not per-
ceive its application to the présent case. The proceedings before the common
councll were not criminal in the sensé to which the principle applies._ That
body was not a court of justice administering criminal law, and it is only
to criminal proceedings in such a tribunal that the authorities cited hâve réf-
érence. In many cases proceedings, criminal In their character, taken by
individuals or organized bodles of men, tending, if carried out, to despoil one
of his property or other rlghts, may be enjoined by a court of equity."
I do not understand the last sentence of this quotation.to state an
additional exception to the rule in question, but to limit it to pro-
ceedings in a court of justice criminal in their character.
The case of Reagan v. Farmers' Loan & Trust Co., 154 U. S. 362,
14 Sup. Ct. 1047, 38 L. Ed. 1014, was a suit by the Farmers' Loan
& Trust Company, mortgagee of the International & Great North-
ern Railroad Company, against the Railroad Commission and At-
torney General of the state of Texas and said railroad company to
cancel and hâve declared null and void certain rates and tariffs for
the transportation of goods by said company which had been fixed
by said commission, because unreasonable and unjust, and to re-
strain said company from putting them into efïect, and said commis-
sion and Attorney General from instituting proceedings against said
company and its ofïïcers and agents to enforce payment of penalties
prescribed by the law under which said commission acted in fîxing
said rates for extortion in charging rates in excess thereof and said
commission from fîxing other rates. It was adjudged that the plain-
tiff was entitled to ail the relief prayed for save in so far as the com-
mission was sought to be enjoined from fîxing other rates. The
only ground urged as a reason why there was no jurisdiction to
grant said relief cousidered and passed upon by the court was that
the suit, in so far as it was against the Railroad Commission and
the Attorney General was a suit against the state of Texas, and
hence prohibited by the eleventh amendment. It was held that this
ground was not well taken, because the suit was not a suit against
said state within the nîeaning of said amendment, and, whether so
or not, the sixth section of said law authorized any railroad com-
pany or party in interest dissatisfîed with the rates iîxed by the
426 129 FEDEBAt EBPOETEB.
Railroad Commission to bring suit against it to raise and hâve de-
termined the question as to their reasonableness. Nothing was said
in the opinion as to whethef the proceedings authorized to be insti-
tuted to enforce said penalties were criminal proceedings, and, if so,
whether the right to enjoin the Railroad Commission and Attorney
General from instituting them was affected by this fact, or adjusting
the holding that their institution should be enjoined with the gên-
erai rule in regard to the right to enjoin the institution or prosecu-
tion of criminal proceedings as laid down in the Sawyer Case. And
it is to be noted that, in addition to liability to such proceedings for
charging excess rate, there was also liability to civil suit for dam-
age and penalties at the hand of shippers provided by said law.
The case of Smyth v. Ames, 169 U. S. 542, 18 Sup. Ct. 418, 42 L.
Ed. 819, which involved a law of Nebraska, was similar to the Rea-
gan Case save in that the suit was brought by certain stockholders
of the railroad company afïected by the rates in question, and those
rates were fîxed by said law, and not by the Railroad Commission.
The railroad company was enjoined from making a schedule of rates
in accordance with said law, and the Railroad Commission, or "Board
of Transportation," as it was called, was enjoined from instituting
or prosecuting any proceedings for violation of said law. Hère, toc,
nothing was said in the way of adjusting the position taken that the
plaintiffs were entitled to the relief granted with the holding in the
Sawyer Case as to the right of a court of equity to enjoin the insti-
tution or prosecution of criminal proceedings.
The case of Harkrader v. Wadley, 172 U. S. 148, 19 Sup. Ct. 1x9,
43 L. Ed. 399, was an appeal from an order of the Circuit Court of
the United States for the Western District of Virginia discharging
a prisoner from state custody on a writ of habeas corpus. The pris-
oner was in custody under proceedings against him on an indict-
ment for embezzlement of the assets of a bank. The ground upon
which the lower court acted in discharging the prisoner was that
prior to the finding of the indictment two suits in equity had been
brought in said court by the creditors of said bank, in which a re-
ceiver to take charge of the bank and a master to take ail necessary
accounts had been appointed, and after the finding thereof the com-
monwealth attorney and other persons engaged in prosecuting it
had been enjoined by it from further prosecution thereof. It con-
sidered that pending those suits the state court had no jurisdiction
to proceed by way of indictment and trial against the prisoner for
embezzling the assets of said bank, and for it to so proceed consti-
tuted an interférence with the fédéral court in the exercise of its ju-
risdiction. The Suprême Court reversed the order appealed from.
ït held that the lower court had no right to enjoin the prosecution
of said indictment for three reasons: It was prohibited by section
720, Rev. St. U. S., it was an injunction against the prosecution of
criminal proceedings, and it was a suit against the state of Virginia
within the meaning of the eleventh amendment. In considering the
second reason, the only exception tO' the gênerai rule that a court of
equit) has no power to enjoin criminal proceedings referred to was
OAMDEN INTERSTATE BT. 00. V. OITT OF OATLETTSBTJBO. Ï27
the one suggested by Mr. Justice Gray, and ît was held that the
case did not come within that exception.
The case of Fitts v. McGhee, 172 U. S. 516, 19 Sup. Ct. 269, 43 L-
Ed. 535, was a suit brought by the receivers of a railroad company
against the Attorney General of the state of Alabama to restrain
him from instituting or prosecuting criminal proceedings to enforce
against the plaintiffs provisions of a state law reducing the toUs which
had been exacted of the public by said company for travel over a
bridge owned by it on the ground that said législative enactment
was arbitrary, unreasonable, and amounted to a confiscation of said
company's property. It was held that the suit could not be main-
tained. The déniai of the relief sought was placed upon two grounds.
One was that it was a suit against the state of Alabama, within the
raeaning of the eleventh amendment. The other was that it was a
suit to enjoin the institution and prosecution of criminal proceed-
ings, which a court of equity had no jurisdiction to do. The law
reducing the tolls provided a fine for each ofïense of demanding or
receiving a higher rate of toll than that prescribed of $20 to be re-
coverable before any justice of the peace of the two counties in
which the bridge was located. The holding that the plaintifif was
not entitled to the relief sought on the latter of said two grounds
was based upon the Sawyer Case and that of Harkrader v. Wadley.
No référence was made to the two cases of Reagan v. Farmers' Loan
& Trust Co. and Smyth v. Ames as bearing upon this point, or at-
tempt made to adjust them to said holding, though they were re-
ferred to and distinguished in their bearing upon the question as to
whether the suit was one against the state of Alabama. Mr. Jus-
tice Harlan, in delivering the opinion of the court, said :
"We are of the opinion that the Circuit Court of the United States sitting
In equity was wlthout jurisdiction to enjoin the Institution or prosecution of
thèse criminal proceedings commeneed In the state court"
And again:
"The plaintiffs state that the toll gatherers in thelr service had been in-
dicted in a state court for vlolating the provisions of the act of 1895 in respect
of tolls. Let them appear to the Indictment, and défend themselves upon
the ground that the state statute is répugnant to the Constitution of the
United States. The state court is compétent to détermine the question thus
raised, and Is under duty to enforce the mandates of the suprême law of the
land. • • * And if the question is determined adversely to the défend-
ants In the highest court of the state in which the décision could be had, the
judgment may be re-examined by this court upon wrlt of error. That the
défendants may be frequently indicted constltutes no reason why a fédéral
court of equity should assume to interfère with the ordinary course of crim-
inal procédure in a state court"
The last case in which the Suprême Court has had occasion to con-
sider the jurisdiction of a court of equity to enjoin criminal proceed-
ings is the récent one of Davis & Farnum Mfg. Co. v. City of Los
Angeles (decided March 2, 1903, and not yet officially reported) 23
Sup. Ct. 498, 47 L. Ed. 778. That case was this: Caroline W.
Dobbins made a contract with the Valley Gas & Fuel Company, a
California corporation, to build certain gasworks for her, including
ail things necessary for the manufacture, recovery, and storage of
128 129 rSDEBAIi RBFOBTEB.
gas on lands thereafter to be designated. Thereafter said companyï
made a contract with the Davis & Farnum Manufacturing Compa-
ny, a Massachusetts corporation, to erect on Mrs. Dobbins' prem-
ises a water tank and gas holder, one of the things included in said
company's contract with her. And thereafter Mrs. Dobbins pur-
chased certain lands in Los Angeles upon which the gasworks were
to be built, and which were within the limits wherein it was lawful
to erect gasworks according to the then existing ordinances of said
city, obtained permission of the board of fire commissioners to erect
the gasworks thereon as therein prescribed, and her contractors be-
gan to lay the foundation thereof at a cost of upwards of $2,500.
Subséquent to this the city amended said ordinances, and included
Mrs. Dobbins' property in the prohibited territory for the érection
or maintenance of gasworlis. It would seem that said ordinances
provided criminal proceedings to secure their enforcement, and, the
work being continued after the adoption of said amendment, pro-
ceedings were instituted against the employés of the gas and fuel
Company and the jmanufacturing company upon which they were
arrested and the work stopped. Thereupon a bill in equity was filed
by said manufacturing company alone against the city to restrain it
and its officers from enforcing said ordinances. It was averred that
the gasworks were in an uncompleted condition, exposed to the élé-
ments, and in danger of being destroyed; that said amending ordi-
nances were adopted at the instigation of a light company that had
enjoyed a monopoly of the gas business in said city for 10 years
past ; that they were unconstitutional, as impairing the obligation
of Mrs. Dobbins' contract with the city under the prior ordinances.
It was held that the suit could not be maintained. The lower court,
by Judge Wellborn, whose opinion may be found in 115 Fed. 537,
had Ijkewise so held. He placed his décision solely upon the ground
that it was a suit to enjoin the prosecution of criminal proceedings.
In his opinion he recognized but one exception to the gênerai rule
that a court of equity lias no jurisdiction to enjoin svtch proceed-
ings; that exception being the one stated by Mr. Justice Gray in
the Sawyer Case, to wit, where they were instituted by a party to a
suit already pending before it, and to try the same right that is in
issue there. The Suprême Court considered the case under the same
aspect. Mr. Justice Brown said:
"As the only method employed for the enforcement of thèse ordinances was
by criminal proceedings, it follows that the prayer of the bill to enjoin the
city from enforcing thèse ordinances or prevent plaintifC from carrying ont
Its work must be construed as demanding the discontinuance of such crim-
inal proceedings as were already pending and the Institution of others of a
similar character."
In stating the rule on the subject, Mr. Justice Brown referred
to another exception thereto, and seemed to hold that it was im-
plicitly, if not expressly, stated in the Sawyer Case, though there
is room for the inference that it was admitted under the influence
of the cases of Reagan v. Farmers' Loan & Trust Co. and Smyth
V. Ames, and that it was considered that it was not afïected by the
case of Fitts v. McGhee. That exception was that, where the
OAMDEN INTERSTATE Bt. CO. V. CITY OF 0ATLETT8BTJR0. 429
crimina! proceedings were in the enforcement of a law which was
unconstitutional because it invaded rights of property, their
threatened institution or prosecution might be enjoined at tlie in-
stance of the party whose rights of property would thereby be in-
vaded. Mr. Justice Brown said :
"That a court of equlty has no gênerai power to enjoin or stay criminal
proceedings unless they are instituted by a party to a suit already pendlng
before It, and to try the same right that Is in issue there, or to prohibit the
Invasion of the rights of property by the enforcement of an unconstitutional
law, was so fully considered and settled in an elaborate opinion by Mr. Justice
Gray (In re Sawyer, 124 U. S. 200 [8 Sup. Ct 482, 31 h. Ed. 402]) that no fur-
ther référence to prier authorities is deemed necessary, and we hâve little
more to do than to conslder whether there is anything exceptional In the case
under considération to take it out of the gênerai rule."
He stated that the gênerai rule had been applied in Harkrader v.
Wadley and Fitts v. McGhee, and as to the latter case he said :
"Thls was held to be in reality a suit against the state to enjoin the Insti-
tution of criminal proceedings, and hence within the gênerai rule."
Concerning its apphcation to the case in hand he said :
"PlalntlfC seeks to malntain Its blll under the exception above noted, where-
In, In a few cases, an Injunctlon has been allowed to issue to restraln an inva-
sion of rights of property by the enforcement of an unconstitutional law,
where such enforcement would resuit In irréparable damages to the plalntlfC."
Concerning the Reagan Case, which had been cited by plaintiff
in support of the admission of such exception, he said that therein,
"under a law of Texas giving express authority to a railroad Com-
pany or other party in interest to bring suit against the Railroad
Commission of that state, a bill was sustained against such com-
mission to restrain the enforcement of unreasonable and unjust rates,
and in the opinion a few instances were cited where bills were sus-
tained against officers of the state who, under color of an unconsti-
tutional statute, were committing acts of wrong and injury to the
rights and property of the plaintiff acquired under a contract with
the state." And in justification of the admission of such exception
he said :
"It would seem that if there were jurlsdictlon in a court of equlty to en-
join the Invasion of property rights through the Instrumentallty of unconsti-
tutional law, that jurisdictlon would be ousted by the fact the state has chosen
to assert its power to enforce such law by indlctment or other criminal pro-
ceedings. Springhead Splnnlng Co. v. Riley, L. R. 6 Eq. 558."
The ground upon which it was held that the case in hand did not
come within the exception, and therefore the plaintiff was not en-
titied to the relief sought, was that it had no légal interest in the
litigation, and there was no lack of complète and adéquate remedy
at law. It had no contract with the city which had been violated
by the ordinances complained of. The contract relied on was a
contract with Mrs. Dobbins, to which it was no party, and in which
it had no direct interest. And the case was distinguishable, for rea-
sons given, from those in which bills had been sustained by one or
more stockholders in a corporation against the corporation, and oth-
er parties to restrain the enforcement of an unconstitutional law
430 129 FEDEBAL BBPOETEB.
against the corporation itself, andalso from the Reagan Case, in
which it was held that the trustée of bondholders of a railroad cor-
poration could maintain a suit against the State Railway Commis-
sion to restrain the enforcement of unreasonable and unjust rates.
Besides, it did not appear that the manufacturing company did not
hâve a complète and adéquate remedy against its contractor, the
gas and fuel company, for ail damages which it had sustained by the
stoppage of the work. This being so, irrespective of the fact that
the case did not corne within the exception relied on, and hence Vf3.s
affected by the gênerai rule in relation to enjoining criminal pro-
ceedings, plaintifï was not entitled to the relief sought.
The line of cases which we hâve been considering in extenso must
be difïerentiated from those cases which relate to the question wheth-
er a court of equity can enjoin criminal acts. In the former the
question is whether it has jurisdiction to enjoin proceedings to pun-
ish criminal acts, whereas in the latter it is whether it can enjoin
thèse acts themselves. It is held that criminal acts which amount
to an invasion of right of property may be enjoined by a court of
equity, notwithstanding they may be punishable criminally. This
was one of the questions considered and deterrained in the case of
In re Debs, 158 U. S. 596, 15 Sup. Ct. 909, 39 h. Ed. 1092. Mr.
Justice Brewer there said :
"Again, it Is objected that It Is ontslde of the iTirlsdictlon of a court of equi-
ty to eujoin the commission of crimes. This, as a gênerai proposition, is un-
questioned. A chancelior has no criminal jurisdiction. Something more than
the threatened commission of an offense against the laws of the land is neces-
sary to call into exercise the injunctive power of the court. There must be
some interférence, actual or threatened, with property or rights of a pecunl-
ary nature; but when such interférences appear the jurisdiction of a court
of equity arises, and is not destroyed by the fact that they are accompanied
by or are themselves violations of the criminal laws."
Likewise that line of cases must be distinguished from those which
uphold the right of a court of equity to enjoin proceedings to en-
force payment of penalties prescribed for nonpayment of taxes or
license fées that are illégal on the ground that thereby multiplicity
of suits is prevented. Such proceedings are civil in their nature.
In the case of Royall v. Virginia, 116 U. S. 572, 6 Sup. Ct. 510, 29
L,. Ed. 735, Mr. Justice Matthews said :
"As the sum demanded for the license is a tax, the provision for the punish-
ment of one who pursues his profession without a license is a part of the rev-
enue System of the state, and is a means merely of enforcing payment of the
tax itself, or of a penalty for not paylng it. It is legally équivalent to a civil
action of debt Upon the statute, and its substantial character Is not changed
by calling the default a misdemeanor, and providing for its prosecution by
information. The présent case therefore stands precisely, so far as the con-
stitutional questions arising In it are affected, as if it were a civil action in
vrhieh the commonwealth of Virginia was plaintiff, seeking to recover the
amount due on aecount of the tax and penalty."
In the récent case of Southern Express Co. v. Ensley (C. C.) 116
Fed. 756, Judge Jones said :
"A license imposed for revenue is the exercise of the taxing, not the police,
power, and prosecutions before the coi'porate tribunal for doing the business
without a license are quasi pénal at most In substance and légal effect they
OAMDEN INTERSTATE ET. CO. V. CITT OF OATLETTSBUEG. 431
are civil proceedlngs. * * » The 'offense' Is not a crime. Tlie 'offense'
does not vlolate any lave for the préservation of the health, morals, llberty, or
peace of the citizens of Ensley. Enjoinlng prosecutlons of the 'ofCense' hère.
If there is any law to support it, does not in any wise interfère with the con-
trol of the local tribunals over the mass of governmental powers committed
to them for the welfare of the people of Ensley under what, for want of a
better name, we denominate the police power. It is about ordinances directed
solely to that end that many of the authorities are strict in holding that cour*-»
of equity must not interfère."
In view of this line of décisions it is not necessary to consider au-
thorities in other jurisdictions bearing upon the question as to when
criminal proceedings may and when they may not be enjoined by a
court of equity. Perhaps more definiteness is désirable as to what
constitutes an invasion of rights of property by the enforcement
through criminal proceedings of an unconstitutional law so as to bring
it within said exception, and perhaps, also, the décision in the case
of Davis & Farnum Manufacturing Company v. City of Los Angeles
requires that the case of Fitts v. McGhee should be limited to a hold-
ing that plaintifï therein was not entitled to the relief sought upon
the ground that it was a suit against the state of Alabama within the
meaning of the eleventh amendment. But sufficient can be gathered
from them to détermine whether or not this court has jurisdiction to
enjoin the institution of further proceedings under the ordinances com-
plained of herein.
It is certain that this case does not corne within the fîrst exception
to the gênerai rule against a court of equity enjoining criminal pro-
ceedings. The criminal proceedings complained of herein were not
instituted by a party to a suit already pending before this court, and
to try the same thing that is in issue there. Does it, then, come within
the other exception? Hâve those proceedings been provided to en-
force a law which is unconstitutional because it invades the property
rights of complainant ? There is no doubt but that the ordinance
in enforcement of which those proceedings are provided affected the
property of complainant. It imposes a burden of maintaining a flag-
man at least at one point, and at two other points if it does not see
fit to cause the conductor of each car to flag it thereat, and, if it does,
it imposes the burden of the delay in the opération of its cars thereby
i:aused. But in so doing does it invade the property rights of complain-
ant, and is it therefore unconstitutional ? This dépends upon the fur-
ther question as to whether the Législature of Kentucky had the power
to authorize the city of Catlettsburg to enact such an ordinance. It it
did, then said ordinance and the act of said Législature empowering
its enactment, if there is such an act, are not unconstitutional. The
complainant, îf such is the case, holds its property subject to the rights
of said Législature to impose such a burden upon it, and the imposi-
tion thereof cannot, therefore, be an invasion of its property rights.
It is averred in the bill that the complainant at and before the passage
of said ordinance had the right to operate a line of electric raiiroad
over the streets of the défendant city under a grant so to do upon
certain terms and considérations, none of which are set forth, made
by it to the Ashland & Catlettsburg Street Railway Company, which
grant was subsequently assigned and transferred to complainant by
432 129 FEDERAL KEPOETEK.
said Company, and it is claimed that by reason of such grant without
the réservation of power to impose the burden complained of no such
burden could subsequently be imposed upon complainant by author-
ity of the Législature. But such resuit does not foUow from the fact
of such grant without such réservation. Notwithstanding it, by vir-
tue of the police power, the Législature had the right to impose or au-
thorize the imposition by the défendant of such burden upon the
complainant. This is well settled. In the case of N. Y. & N. E. R.
R. Co. v. Bristol, 151 U. S. 556, 14 Sup. Ct. 437, 38 L. Ed. 269, where
the action of the Railroad Commissioners of Connecticut in pursuance
to a law of that state requiring the removal by a railroad company
of a grade crossing at a highway in the town of Bristol was upheld.
Mr. Chief Justice Fuller said :
"It Is likewise thoroughly establlshed In this court that the inhibition of the
Constitution of the United States upon the impairment of the obligation of
contracts, or the deprivation of property without due proeess, or of the equal
protection of the laws, by the states, are not violated by the legitimate exer-
cise of législative power in securing the public safety, health, and morais.
The governmental power of self-protection cannot be contracted away, nor can
the exercise of rights granted, nor the use of property, be withdrawn from the
iruplied liability to governmental régulation in particulars essential to the
préservation of the community from injury."
In the case of Chicago, B. & Q. R. Co. v. Chicago, 166 U. S. 254,
17 Sup. Ct. 590, 41 L. Ed. 979, where the right of the city of Chica-
go to open a new street across a railroad without compensating the
company for the additional expense imposed upon it by reason there-
of was in question, Mr. Justice Harlan said :
"The plaintiff in error toolc its charter subject to the power of the state to
provide for the safety of the public in so far as the safety of the lives and
persons of the people were involved in the opération of the railroad. The com-
pany laid the tracks subject to the condition necessarily implled that their use
could be so regulated by compétent authority as to insure the public safety.
And as ail property, whether owned by private persons or by corporations, is
held subject to the authority of the state to regulate its use in such manner
as not to unnecessarlly end.inger the lives and the Personal safety of the peo-
ple, it is not a condition of the exercise of that authority that the state shall
indemnify the owners of property for the damage or Injury resulting from
its exercise. Property thus damaged or injured Is not, within the meaning of
the Constitution, taken for public use, nor is the owner deprived of it without
due proeess of law. The requirement that compensation be made for private
property taken for public use imposes no restriction upon the inhérent power
of the state by reasonable régulations to protect the lives and secure the safe-
ty of the people."
But, though the position is taken in the bill that the burden com-
plained of could not constitutionally be imposed upon complainant,
it has not been seriously urged in the argument of the case. Ac-
cording to that the real contention of complainant is that the Lég-
islature has not undertaken to impose this burden on it by author-
izing the défendant city to enact the ordinance by which it has been
attempted to be imposed upon it. In other words, its real position
is that the défendant city did not hâve législative authority to enact
the ordinance complained of. It is certain that it must hâve had
such authority in order for the ordinance to be valid. As said by
CAMDEN INTEKSTATE BT. CO. V. CITT OF CATLETTSBURG. 43S
Mr. Justice Brown in the case of Barnett v. Denison, 145 U. S. 135,
12 Sup. Ct. 819, 36 L. Ed. 652:
"It is the settled doctrine of thls court that municipal corporations are
merely agents of the state government for local purposes, and possess only
such powers as are expressly given, or implied because essential to carry Into
effect such aa are expressly granted."
It is certain, further, that the only powers conferred upon the de-
fendant city which can be construed as giving it authority to pass
ihe obnoxious ordinance are gênerai powers "to pass ordinances not
in conflict with the Constitution and the laws of the state or of the
United States" ; "to prevent and remove nuisances at the cost of the
owner or occupants or of the party upon whose ground they exist,
and define and déclare by ordinance what shall be a nuisance within
the limits of the city, and to punish by fine any person for causing
or permitting a nuisance" ; "to make by-Iaws and ordinances for the
carrying into efïect of ail the powers herein granted for the govern-
ment of the city, and do ail things properly belonging to the police
of incorporated cities"; and to hâve "the exclusive management and
control" of ail "public streets, alleys, sidewalks, roads, lanes, avenues,
highways, and thoroughfares," "with powers to improve them by
original construction, or to reconstruct them as may be prescribed
by ordinances" ; and spécifie power to "grant the right of way over
the public streets or public grounds of the city to any railroad Com-
pany or Street railroad company on such conditions as to them may
seem proper"; to "hâve a supervising control over the use of the
same" ; to "regulate the speed of cars and signais and fare on street
cars" ; to "grant the right of way that may be necessary to gas com-
panies, water companies, electric light companies, téléphone com-
panies, or any like companies"; and to "compel railroad companies
to erect and maintain gâtes at any or ail street crossings." See
Ky. St. 1903, § 3490, subsecs, i, 7, 25, 33 ; section 3560. The com-
plainant contends that this is not sufïicient to confer power on the
défendant city to pass said ordinance, and cites particularly in sup-
port of its contention the case of Pittsburgh, C, C. & St. L. R. Co.
v. Crown Point (Ind.) 45 N. E. 587, 35 L. R. A. 685, where it was
held that a grant to municipal corporations of power to regulate
travel upon the streets so as to make their use reasonably safe and
to enact ordinances for the protection of health, life, and property
was not sufïicient to authorize it to pass an ordinance to compel a
railroad company at its own expense to keep a watchman and main-
tain gâtes where the tracks cross a street, under penalty for failure
so to do. On the other hand, défendants cite in support of their
contention that such power is ample to warrant the passage of the
ordinance, the case of South Cov. & Cin. S. R. Co. v. Berry, 93
Ky. 43, 18 S. W. 1026, 15 E. R. A. 604, 40 Am. St. Rep. 161, where
it was held that an ordinance of the city of Newport, Ky., requiring
a street railway company to hâve both a conductor and driver on
each of its cars, was authorized by a provision of the charter of the
city which conferred upon the council power to pass ail ordinances
"that may be necessary for the due and efïectual administration of
right and justice in said city and for the better government thereof,"
129 F.— 28
iSi 129 FEDERAL EEFOETEK.
and "to cause the removal or abatement of nuisance." In the view
which we take of the case we do not find it necessary to pass upon
this question thus at issue between the parties hereto, and the rea-
sons put forward in support of their several contentions. It is plain
that this is not a case where the rights of property of complainant
are invaded or attempted to be invaded by an unconstitutional law
sought to be enforced by criminal proceedings, and that, therefore,
it does not corne within the second exception to the gênerai rule
that a court of equity is without jurisdiction to enjoin the prosecu-
tion of criminal proceedings put forth by Mr. Justice Brown in the
Davis & Farnum Manufacturing Company Case, but is subject to
the gênerai rule, and this court is without jurisdiction to grant the
relief sought in this case.
Some point is made by complainant that on account of the low
fine prescribed by the ordinance for each offense, to wit, $ro, it is
without remedy to hâve the serions matter presented by said ordi-
nance disposed of by the higher state courts, and this is urged as a
reason why this court should intervene. But this point is not well
taken, for it is expressly provided in section 3519, Ky. St. 1903, a
part of the charter of municipal corporations to which the défend-
ant city belongs, that:
"Appeals shall be from the Judgment of sald police court to the circuit court
of the county in ail cases where the fine is more than twenty dollars. In cases
where twenty dollars and less are imposed or authorized under ordinanees the
legality of such ordinanees may be tested by elther party by an appeal to the
circuit court of the county. Where any Judgment shall be rendered from the
circuit court of the county as provided for in this section, either the city or
the accused may appeal to the superior court or Court of Appeals."
Then it is urged as a reason why this court should taken jurisdic-
tion that the complainant is liable to be subjected to innumerable
prosecutions until the validity of the ordinance is finally determined
by the highest court of the state. This is true, and to prevent it
the complainant may hâve to temporarily, at least, comply with the
ordinance. P"<- as said by Mr. Justice Harlan in the case of Fitts
V. McGhee : -
"That the défendant may be frequently Indicted constitntes no reason why
a fédéral court of equity should assume to interfère with the ordinary course
of criminal procédure in a state court."
It follows that the motion for, a preliminary injunction must be
denied, and the demurrer to the bill sustained.
RUSSBLL V. RDSSELL et al.
(Circuit Court, D. New Jersey. Aprll 15, 1904.)
Res Judioata— Mattees Concluded by Decree.
The questions coneluded by a decree in equity, where the cause was ap-
pealed, are determined by the opinion of the appellate court. The parties
are not coneluded as to questions which were left open by such opinion,
although they may hâve been passed on by the court below.
Same.
Complainant brought a suit for the reforraatlon of an antenuptial agree-
ment, aud for its spécifie enforcement as reformed ; it being alleged that,
as written, it was procured by fraud. The court, on a hearing, dismissed
BTJSSELL V. KUSSELL. 435
the bill on the ground that the agreement could not be varied by paroi,
and also that the évidence was Insufflcient to show fraud In Its procure-
ment. On appeal the decree was afflrmed, but the court, In Its opinion,
stated that it was not necessary to enter upon the question of fraud, be-
cause It appeared that complainant had recelved and retalned a partial
payment from the executors under the agreement, and was therefore
not in a position to repudlate it. Eeld, that the decree in such suit was
not a bar to a second suit by complainant to Impeach and set aslde the
agreement, in which she offered to return the amount recelved and pald It
Into court.
3. Eqxjity— Défense of Lâches.
A widow will not be held barred by lâches from maintalning a suit to
set aslde an antenuptial agreement for fraud, Instltuted at once after the
unsnccessful termlnatlon of a prier suit for Its reformation, whlch waa
commenced wlthln a year after her husband's death, and where she at ail
tlmes asserted the invalidlty of the agreement.
4. Tendee— Necessitt as Condition Pbecedent to Suit.
A tender back of a payment made to a widow by her husband's exec-
utors is not necessary, as a condition précèdent to her right to malntain
a suit to set aslde an antenuptial agreement, where, In any event, she
was «ctltled to a larger amount from the estate.
5. Antenuptial Ageeements— Validity— Pbesumptions.
Where the provision made for a wlfe by an antenuptial agreement Is
grossly disproportionate to the rlghts surrendered, the presumptlon is that
the agreement was brought about by fraudulent concealment, and the
burden rests upon those who would profit by it to show otherwise.
6. Witnesses— Competenct— Testimony as to Transactions with Décèdent.
Rev. St 858 [U. S. Comp. St. 1901, p. 659], which provides that. In sults
by or agalnst executors in whlch judgment may be rendered for or against
them, neither party shall be allowed to testify agalnst the other as to
any transaction with or statement by the testator, unless called by the
adverse party or the court, does not prevent a widow from giving testi-
mony with respect to the making of an antenuptial agreement in a suit
by her to recover her dower estate in the property of her deceased hus-
band, to whlch hls executors are only nominal parties, against whom no
judgment could be rendered.
7. Antenuptial Agbeement— Validity— Impeachment ïoe Feaud.
An antenuptial agreement provlded that the Intended wife should re-
ceive $5,000, wlthln a stated tlme after her husband's death, in lieu of
dower, and in addition to what mlght be glven her by her husband's will.
She signed the agreement at his sollcltatlon, without any knowledge of
the amount of hls property, and on his représentation that he would pro-
vide llberally for her by his will, and that the amount to be pald her un-
der the agreement would be ample for her untll hls estate could be settled.
He owned real estate which at the tlme of hls death, flve years later, was
valued at $117,000, and Personal property exceedlng $100,000 in value,
whlch, under the laws of the state, he could dispose of by will free from
any clalm on her part. By hls will he gave her certain stocks, not ex-
ceedlng $1,600 in value. Held that, in vlew of the confldential relations
existlng between the parties, the widow was entitled to hâve the agree-
ment set aslde for fraud, and to recover her dower interest in hls realty.
8. Same— Feaud— Violation of Peomise.
The failure to fulflll an executory promise made to secure the consent
of a woman to an antenuptial agreement may constltute a fraud which
will invalidate the agreement.
In Equity. On final hearing,
John H. Hazelton, for complainant.
David J. Pancoast and Walter H. Bacon, for respondents.
1 5. See Husband and Wife, vol. 26, Cent. Dig. § 165.
436 129 FEDBBAL EEPOETEB.
ARCHBALD, District Judge.^ The purpose of this bill is to set
aside an antenuptial agreement on the ground of fraud. The com-
plainant, Lottie R. Russell, is the widow of John Russell, late of
Leesburg, N. J., deceased, to whom she was married November 30,
1892, and who died July 20, 1897. Mr. Russell was 75 at the time
of the marriage, and Mrs. Russell 50, and both had been previously
married. Mr. Russell had no children living, but had three grand-
children; and Mrs. Russell had two adult sons, George R. and Grant
Brown. By the antenuptial agreement, which was executed Novem-
ber 22d, a few days before the marriage, it was provided that there
should be paid to Herschel Mulford, as trustée for Mrs. Russell, out
of the estate of her husband, within six months after his decease, the
sum of $5,000, which was to be in lieu and satisfaction of dower, and
a bar to any claim upon his personal estate, unless some part of it
should be given to her by will. Mr. Russell was at the date of this
agreement and at the time of his death a man of considérable weaith ;
having realty estimated at $105^000, and personal estate of about $117,-
000, or $222,000 in ail. It is charged that the agreement was secured
by him, not only by concealing from his prospective wife the extent
of his property, but by actually misrepresenting its condition and
value, and particularly by promising to provide liberally for her in
his will, which he failed to do. A will was executed by Mr. Russell
February 18, 1896, without the knowledge of his wife, while they
were on a pleasure trip in Florida; and by it, in addition to the $5,000
named in the antenuptial settlement, he siniply gave her 10 shares
of stock in the Glassboro National Bank, of tîie value of twelve or
fifteen hundred dollars. Mrs. Russell was very much disappointed
when she found out after his death how little he had left her, and,
upon complaint to the otliers interested in the estate, there was some
talk of a libéral increase of it by amicable arrangement, but none was
reached. The executors subsequently paid to the trustée $500 of the
$S,ooo called for by the agreement, and the trustée on December 16,
1897, turned this over to Mrs. Russell, which, after taking the advice
of counsel, and being assured that it would not préjudice her, she
accepted and receipted on account. Being notiiîed by the trustée, later
on, that the rest of the $5,000 was ready for her, but being- required
to exécute a formai release, she declined to accept it; and, concpiving
in the end that she had been overreached, on June 2, 1898, she filed
a bill in the Court of Chancery of New Jersey to assert her rights.
This bill was against the same parties who are respondents hère, and,
relying in substance on the facts which hâve been stated, it prayed
that the antenuptial agreement should be decreed to be of no effect,
and be delivered up to be canceled; that the promise of her husband
to make a libéral provision for her should be specifîcally enforced, by
paying to her not less than one-third of the net personal estate, in
addition to the value of her dower in the realty; and that the will
should be declared to hâve been in fraud of her rights, and be made
null and void so far as it stood in her way. The respondents having
answered, the case was heard by Vice Chancellor Grey, who on August
iSpecially assigned.
EXJSSELL V. RCrSSELL. 437
16, 1900, filed an opinion in which he advised that the bill be dismissed,
and a decree was subsequently entered in accordance therewith. Rus-
sell V. Russell, 60 N. J. Eq. 2^2, 47 Atl. 37. ■
The case was considered by the vice chancelier as proceeding upon
two grounds: First, to reform the antenuptial agreement so as to
embody the undertaking by Mr. Russell to provide liberally for the
complainant in his will; and, secondly, to set aside the agreement,
as induced by misrepresentation and fraud, in order to make way
for the claim of dower in the realty. As to the former it was held that
the agreement, being in writing and complète in itself, could not be
varied by an added terni resting in paroi, both on account of the es-
tablished rule in this regard, as well as the fact that, being based on
the considération of marriage, the statute of frauds was an insur-
mountable bar ; and, as to the second, that fraud in inducing the exé-
cution of the agreement, as made, was no ground for the spécifie per-
formance of it, as not made. Recognizing, however, that relief for
the complainant must corne, if at ail, by setting aside the agreement,
so as to let her into her dower rights, and proceeding to consider the
alleged fraud in its procurement in order to dispose of the whole
case, it was pointed out that there was no misrepresentation by Mr.
Russell as to its terms, which were perfectly plain and in accordance
with what had been previously discussed ; that Mrs. Russell took time
to consider it, and submitted it to her sons for advice ; that there was
nothing inconsiderate in its provisions, having regard to the âge and
relative position of the parties, and the uncertain condition of some
of Mr. Russell's property; and that there was no proof that it was
executed by Mrs. Russell without full knowledge of the extent and
value of his estate, nor any such discrepancy between that which was
given her by the antenuptial agreement and will, and her dower rights,
which were alone involved (there being an absolute right in the hus-
band, by the laws of New Jersey, to dispose of the whole of his Per-
sonal estate by will), as to raise the presumption that she was not
fairly dealt with. Confirmatory of this view, it was noted that on
December 22, 1897, more than four months after the will was proved,
Mrs. Russell accepted $500 on account of her portion, and was under
treaty to receive and invest the rest of it ; the only explanation of this
course being that she acted without the advice of counsel, which was
not regarded as sufficient to do away with its eflfect. The fact that
in reality she acted upon the advice of counsel was not disclosed.
From the decree so entered against her, Mrs. Russell appealed to
the Court of Errors and Appeals, but the décision was afïirmed. 63
N. J. Eq. 282, 49 Atl. 1081. On the question whether she was entitled
to ingraft upon the antenuptial agreement the paroi contract which
she asserted that libéral provision should be made by the testator in
his will, the same view was taken as by the vice chancellor; But with
regard to setting the agreement aside for fraud, the court declared
that it was not necessary to express an opinion, Mrs. Russell not
being in shape to repudiate the agreement, having accepted $500 under
it. "It is entirely settled," says Gummere, J., "that a party to a con-
tract cannot at one and the same time repudiate it, and retain a benefit
from its partial exécution. In order to entitle him to rescind, he must
438 129 FBDB3EAL EEPOBTBK.
first restore what he has received under the contract, and thus put the
other party to the agreement in his original position. * * * i^j^js
the appellant has not donc, and consequently does not stand in a posi-
tion which entitles her to an annulment of the contract, even if it be
true, as she allèges, that she was induced to enter into it by fraud on
the part of her husband."
This décision was made August 23, 1901, and the présent suit was
instituted November 15 following; the complainant having mean-
while become a citizen of New York. The question whether the con-
clusion reached in the one is a bar to the other stands at the threshokl
of the case, and has first to be disposed of. It is earnestly contended
by the respondents that it is, but upon that there is considérable to be
said. It is to be noted, in the first place, that, while there was a
prayer in the former case to hâve the antenuptial agreement set aside
on account of the fraud alleged to hâve been practiced upon the
complainant, yet, as pointed out by the vice chancellor, this was merely
as the basis, and to make way, for the reformation of the agreement,
and its spécifie enforcement in its modified form. Except as so sub-
ordinated, there was, in strictness, an inconsistency in the two posi-
tions. The complainant was not entitled to hâve the agreement es-
tablished and enforced in the shape she contended it ought to be, and
at the same time entirely annulled. It is, no doubt, true, however, that
the vice chancellor did not stop at this, but, taking the avoidance of
the agreement as a matter of independent and alternative relief, passed
upon it, and decided adversely to the complainant's rights. If, then,
the case stood on his rulings, she would be unquestionably concluded
by them. But the appeal removed the case in its entirety to the higher
court, and it is the judgment there rendered that must control, which
has to be determined by the views expressed by the court in the opinion
filed. As said in Larkins v. Lindsay, 205 Pa. 534, 55 Atl. 184 :
"A decree In equity is not, llke a judgment at law, necessarily conclusive
as to every matter which either was or might hâve been involved in the
décision. Regard must be had to the reasons of the chancellor as well as
his decree, for, to take the most obvious illustration, the case may hâve been
disposed of on grounds of adéquate remedy at law, or other reasons not in-
volving the merits."
Unless, therefore, the rights of the complainant which are now
sought to be litigated were directly disposed of in the final judgment
rendered, as disclosed by the opinion of the Court of Errors and Ap-
peals, they are not barred. This is squarely ruled in Turley v. Tur-
ley, 85 Tenn. 251, i S. W. 891, where it was held that a question left
open by the opinion of the appellate court, although passed upon by
the court below, could be re-examined in a subséquent suit where it
was directly raised. It is true that there was a reversai in that case,
and not an affirmance, but that is not material. As is there said,
the appeal vacated the decree below, and brought up the whole case
for review; and, the court of last resort having declined to décide
the question subsequently mooted, it was left open for future déter-
mination. In this connection, also, the case of Stewart v. Ashtabula,
107 Fed. 857, 47 C. C. A. 21, is instructive. On a previous bill filed
by the plaintiff to establish his right to maintain a street railway, it
BUSSELL V. EUSSELL. 439
had been decided that he had failed to comply with the village ordi-
nance which granted him that privilège, and that the village had the
right, in conséquence, to remove the tracks and ties. But this déci-
sion was held net to estop him from maintaining an action for dam-
ages for the wrongful conversion of this property after it had been
removed, even though an account for such damages might hâve been
ordered by the court, had the plaintifï's right been sustained, and it
had been specifically found in the former suit that the tracks and ties,
after their removal, had been piled up and held at the order of the
plaintiff ; this finding not being essential to the décision made.
The ultimate conclusion reached in the former suit, as expressed
in the opinion of the Court of Errors and Appeals, must therefore dé-
termine how far it is a bar in this. Looking into the opinion, it un-
questionably disposes of the complainant's right to reform by paroi
the antenuptial agreement, and hâve it specifically enforced. But
passing by the question whether a fraud was perpetrated upon her in
its procurement, it was held that she was not entitled to raise that
issue, because she had accepted $500 of the money given her by the
agreement, which she could not retain in affirmance of it, and at the
same time move to rescind. The décision so made, to the extent indi-
cated, must be accepted in its entirety, and leaves nothing open that
was involved. It cannot be qualified by the suggestion with respect to
the $500 that due considération was not given to the fact that, which-
ever way the case was decided, the complainant would be entitled to
this amount; nor yet that in accepting it she acted under the advice
of counsel, which was not disclosed. The latter circumstance, if ma-
terial, was well known to her, and should hâve been brought forward
as part of her case. She may hâve been misadvised as to its ma-
teriality, but, while that will explain the omission, it does not over-
come it. But on the other hand, the décision is not to be carried be-
yond its terms. The allégation of fraud was not disposed of, because
it was not considered necessary to do so, nOr whether the complainant,
by an offer to return, such as is now made, could qualify herself to re-
assail the agreement upon that ground. It was simply decided that
she was not in à position to do it at that time. It follows, therefore,
that the question of fraud is open for considération, provided it is not
made too late, of ail of which this court is entitled to judge, regard-
less of anything that has gone before.
To meet the objection which proved fatal to her former case, the
complainant has offered in the présent bill to return the $500 she re-
ceived, and has followed this up by paying the money into court. She
has also paid in the dividend of $30, put to her crédit by the executors,
from the bank stock. It is claimed that this is inefïective at this stage,
and after the interval which has elapsed, and particularly without a
tender before suit brought. It is the undoubted rule, where fraud in
the procurement of a contract is intended to be relied on to avoid it,
that the party defrauded must assert his rights with reasonable prompt-
ness. The transaction is not void, but voidable, and delay will ordi-
narily be regarded as a waiver and affirmance. Byard v. Holmes, ^3
N. J. Law, 119; Dennis v. Jones; 44 N. J. Eq. 513, 14 Atl. 913, 6 Am.
St. Rep. 899 ; Grymes v. Sanders, 93 Ù. S. 55, 23 L. Ed. 798. But
440 129 FEDERAL EBPOUTER.
circumstances alter cases, and each must bç governed by its own. In
the présent instance it has been the manifest intention of the com-
plainant from the outstart not to abide by the antenuptial agreement
as it was written, which it would do violence to her actions not to recog-
nize and uphold. She receipted for the $500 only on the advice of
counsel that it would not préjudice her, and refused to take more and
sign a release when she found it would. Her former bill was filed
within a year of her husband's death, and distinctly asserted the in-
validity of the agreement; demanding spécifie performance of the
paroi understanding by which it was modified, instead. On the hear-
ing upon it she relied on and gave évidence of the fraud which had
been practiced upon her, and, when that suit failed for the reasons
specified, she promptly began the one in hand. While, therefore, it
may be true, as decided by the Court of Errors and Appeals, that she
was not in a position to disaffirm so long as she held on to even a part
of that which she obtained under the agreement; yet, outside of that,
by the most positive and persistent acts, which could not be misunder-
stood, she has consistently asserted the invalidity of the agreement as
it stood, and manifested her détermination not to be bound thereby.
Finally, to remove ail questions, she now not only ofïers to return
what she received, but has actually paid the money into court, thus
surrendering every vestige of benefit from it. If this is not sufficient,
she is held to a very rigorous rule. It is true, she made no tender
before suit brought ; but considering that, whether she wins or loses,
considerably more than this will be due her, it does not seem requisite
that she should. The rights of the parties can be entirely protected
by the final decree. Billings v. Aspen Mining Co., 51 Fed. 338, 2 C.
C. A. 252; Thackrah v. Haas, 119 U. S. 499, 7 Sup. Ct. 311, 30 L.
Ed. 486; Sloane v. Schiffer, 156 Pa. 59, 27 Atl. 67. If this is in con-
flict with the local law, which it does not seem to me it necessarily is
(Pidcock V. Swift, 51 N. J. Eq. 405, 27 Atl. 470), the case is not one
where the state law govems, but is to be disposed of by the court ac-
cording to its own views of what is équitable and right.
On the question of fr; nd in the procurement of the agreement, one
cannot fail to be impresscd with the disproportion between the esta te
of which the décèdent was possessed and that which was secured to
the complainant therefrom. Notwithstanding that Mr. Russell was
worth nearly a quarter of a million of dollars — ^$105,000 in real estate,
and $117,000 in personalty— :all she got for the surrender of her
dower rights was $5,000, to be paid her within six months after his
death, and such additional remembrance as he might be moved to give
her by will. According to the sequel, this proved next to nothing —
the 10 shares of bank stock not exceeding $1,500 in value — and, if the
respondents' contention be sustained, it did not hâve in reality to be
even that. In passing, therefore, upon the agreement as written, it
must be remembered that the whole considération of the bargain to
Mrs. Russell was the $5,000 named. It is idle to argue that this was
anything but what was close and narrow. If there was no great dis-
parity in it, why this long and expensive litigation, which might hâve
been amicably avoided, according to the évidence, for a very moderate
advance, in order to keep the complainant out of her dower? With-
RUSSELL V. EUSSE LL. 441
out stopping to go into an extended démonstration, it is not difficult to
figure out a yearly value of over $4,000 from the productive real es-
tate, outside of possible returns from the timber lands, of which the
complainant would be entitled to a third; and, holding down to this
low estimate, in four years she would equal what she was to get by
the agreement, and, if her expectation of life was fulfilled, would far
exceed it in the end. No one with knowledge of the facts, or except
because of a confidence inspired, would make such a one-sided bar-
gain. No account is taken in this calculation of the personal property,
but it is manifest that it cannot be entirely left out of sight. While
the complainant could acquire no légal claim upon it by the marriage,
as lias been already noted, yet it constituted a material part of Mr.
RusseU's possessions, and contributed to make him the man of wealth
which he was. Bearing on future possibilities, as it did, it is a factor
to be considered in determining whether the bargain was a fair one;
and, with this thrown into the scale, even though no more than as a
niakeweight, the disparity is materially increased.
The law which governs in such cases is uni versai and well defined.
Kline v. Kline, 57 Pa. 120, 98 Am. Dec. 206; Bierer's Appeal, 92
Pa. 265; Warner's Est., 207 Pa. 580, 57 Atl. 35; Pierce v. Pierce, 71
N. Y. 154, 27 Am. Rep. 22 ; Taylor v. Taylor, 144 111. 436, 33 N. E.
532; Fisher v. Koontz, 110 lowa, 498, 80 N. W. 551; Spurlock v.
Brown, 91 Tenn. 241, 18 S. W. 868. The parties who enter into an
antenuptial arrangement stand in such a relation of confidence to each
other as to call for the exercise of the highest fairness and good faith.
It cannot be expected that either will pry into the money affairs of
the other,_ except possibly in the most gênerai way ; or conduct an inde-
pendent investigation with regard to them. The amenities of the
situation forbid it, if nothing else. It is too suggestive of a mercenary
motive in the marriage, which should be prompted by mutual affection,
to be sanctioned. Each must therefore, of necessity, dérive knowledge
from the other of his or her property, and both must be frank. No
agreement on any other basis will stand, as ail the cases attest. Where
the bargain is manifestly unfair, as where the provisions made by it
on either side are inadéquate or grossly disproportioned to the rights
surrendered, the presumption is that it was brought about by fraudu-
lent concealment, and the burden is upon those who seek to profit by it
to show otherwise, which is as it should be, for the additional reason
that the mouth of the one party is usually closed by the death of the
other.
But we do not need to rest the case upon presumptions. There is
direct évidence of that which preceded and induced the agreement
v/hich leads to the same resuit. So far as this dépends on the testi-
mony of the complainant, she is a compétent witness, notwithstanding
that it relates to a transaction with the respondents' testator, now de-
ceased. She may not be by the state law, but the case falls within the
terms of the fédéral statute, which therefore contrôla. Potter v. Third
National Bank, 102 U. S. 163, 26 L. Ed. m, The Revised Statutes
(section 858 [U. S. Comp. St. 1901, p. 659I) déclare that:
"In the courts of the United States no witness shall be excluded • • *
in any civil action because he is a party to or interested in the issue to be
442 129 FEDERAL KBPORTER.
trled: provlded, that In actions by or against executors, admînlstrators or
guardians In whleh judgment may be rendered for or against them neither
party shall be allowed to testify against the other as to any transaction witli
or statement by tlie testator, intestate, or ward, unless called to testify
thereto by the opposite party, or required to testify thereto by tlie court."
To the extent that this is a suit against executors, two of the de-
fendants being sued in their représentative as well as their individual
capacity, it falls within the proviso of the statute, but the other condi-
tion of exclusion is not fulfilled. No judgment for or against the
executors is asked by the bill, or could be rendered thereon. It is
brought to secure the complainant's dower in the lands of her late hus-
band, and is essentially against the heirs and devisees to whom it de-
scended or was left by his will, and not against the executors, except
nominally. 7 Encycl. Plead. & Pract. 197; Chapman v. Schroeder, 10
Ga. 321 ; Campbell's Case, 2 Doug. (Mich.) 141. The personal property
being disposable by the testator without accountability, no claim is or
could be made against it; and, the estate being solvent, the realty is
not needed for payment of debts. Neither are the executors given any
duties by the will with respect to it, and if, as it seems, they hâve inter-
vened in any way, they must be regarded as having done so, not on be-
half of the estate, but as agents for those interested therein. 11 Am.
& Eng. En. Law (2d Ed.) 1208. The proceeding is therefore distinctly
in rem, except so far as the rents and profits wrhich hâve accrued are
concerned ; or $.s compensation may be claimed for lands disposed of by
the testator in his lif etime ; and even as to this it cannot be said that
the gênerai estate in the hands of the executors is involved. The case
is like that of Goodwin v. Fox, 129 U. S. 601, 9 Sup. Ct. 367, 32 L. Ed.
805, where, although the plaintiff sued, in terms, as executrix, the de-
fendant was held to be a compétent witness; the relief sought being
only with regard to her interest in certain land as devisee.
Turning, then, to the facts with regard to the making of the antenup-
tial agreement in controversy, and bearing in mind that the parties
became engaged in August, 1892, and were married November 30
following, the story of how it came to be executed will best be told in
the words of Mrs. Russell, taken entire. Being asked to state what
took place between herself and Mr. Russell with regard to it, she said :
"He said there was a Ilttle matter lie wislied to speak to me about. Tliis
was in the month of October. I said: 'Very well. Go ahead.' He said
that in ail probabillty I would outlive him, and that he wanted to provide
for me, and he asked me what part of his estate I would be satisfled with
at the tlme of his death. I told hlm that I dldn't know ; that I had never
thought anything about that I said: 'I don't really know what you are
worth — what you claim to be worth. What would you like to give me?' He
said: 'Well, I want to make you satisfled, and I will do so, but I wlsh you
would mention a sum.' I said : 'Well, I can't do that, because I don't know
anything about what you are worth.' He said: 'Well, I don't eitlier. My
business is in such a condition that I don't know how I am standing, but
I want to give you something that will make you Independent at the time
of my death. I think that would be better for us both.' I said: 'Well, if
you think so, what would you like to give me?' He said: 'Well, how would
$15,000 suit you — to reçoive It within six months after my decease?' I said
that that would be ail right ; that I would be satisfled with that. He said :
'As soon as we are married, I shall make my will, and I want to fix you so
you will be independent.' I said: 'Very well. That will be satisfactory.'
And he said: 'I will give you something in my will, too.' So we talked a
BUSSELL V. BtrSSELIi. 443
little whlle, and after a few minutes he sald : 'That Is rather more than you
will need, and I don't think It would be best to give you quite that much.
It might put my executors to considérable trouble, and some losses, to raise
that amount wlthin six months. How would $10,000 suit for the time, and
then I will provide for you in my will?' I said: 'That is ail rlght. That
is satisfactory, too, if you think it is best' Then he said: 'I think it would
be better for us to bave a writing drawn up— an agreement — and it would
be better for you and better for me. Who shall we hâve to draw it up?' I
sald: 'Any one you say. I don't know anythlng about anybody who ought
to do it' He said : 'I hâve had a good deal of dealings with Potter & Nixon,
of Bridgeton, and I think I will go to them, if it suits you.' I said : 'It suits
me ail right' That was about ail that was sald in regard to the matter at
that time. Then in a few days he went to Bridgeton, and saw Potter &
Nixon, and in a day or two I received an agreement through the mail, and It
was drawn for $5,000 ; but I thought It was a mistake of the lawyers or the
typewriter. I didn't think that Mr. Russell had made the change. So I
just put it aside and waited till he called, whieh was in a very short time —
a day or two, perhaps. As soon as he came in he said: 'Did you receive
an instrument in writing through the mail?' I sald I did, and he said:
'So did I.' I said: 'Did you?' He said: 'Yes.' He then sald: 'What did
you think of the change I made?' I said: 'Did you make that change? I
thought it must hâve been a mistake.' And he said: 'No. If you will sit
down, I will tell you why I made it in that way.' So I did, and listened
to him. He said that, after considering the matter thoroughly, he thought
that that would be sufflcient to carry me through till his estate was settled,
and said that he would provide liberally for me in his will. He said: 'Per-
haps I could leave what I leave you in my will already invested, or I may
leave it to you in cash. I will see what is best I want to fix it so that
you will hâve no trouble with it' He then asked me: 'What do you think
of that arrangement?' I said: 'If you think that is better, I am willing for
you to do just what you think is best.' He said : 'I don't want you to think
that this 55,000 is ail that I intend you to hâve. You see right hère at the
bottom I hâve left a space where I can make a provision for you, and that
is why I did it, and had it left open.' He then sald : 'Do you think you un-
derstand it?' I said: 'I think I do.' He said: 'Well, I will do as I say,
and I think it will be the best way to do.' He said: 'Can you trust me?'
I said: 'I think I can. If I cannot, we had better stop right hère, wlthout
going any further. I want to trust my husband.' He said: 'I thank you
for your confidence, and you may rest assured that I will do just what I
say, and make a libéral provision for you in my will, after we are married,
for I don't know who could bave a greater claim on what I hâve than my
wlfe.' "
And again when recalled;
"Did Mr. Russell explain what he meant by 'better for you and better
for me,' and, if so, how? A. That I would be provided for until his estate
was settled. Q. And what by 'better for me'? A. That he would not always
hâve to come to me to get my signature to papers when he bought or sold
anythlng."
There is little need for comment on this testimony. It speaks for
itself, and pointedly shows that while, on the one side, the settlement
was treated as a matter of wifely confidence, on the other it was ap-
proached. in the spirit of bargaining, to get as much and give as little
as possible, as though the parties were strangers dealing at arm's
length. Not only was there no disclosure by Mr. Russell to his in-
tended wife of the nature and extent of his property, or of the part of
it to which she could lay claim, but the références made to it were of
a character to raise a doubt. The complainant, thus, if not actually
misled by direct intention, was at least left entirely in the dark as the
resuit. But worse than this, there was an expression of future inten-
m 129 FBDEBAL EËFOKXEH.
tion whicfi assumed the form of an absolute undertaking by Mr. Rus-
sell, as part ôf the considération by which the agreement was induced,
the subséquent disregard of which was an unpardonable breach of
faith. The représentation made with regard to the $5,000 which
Mrs. Russell was to receive was that it was but a part, and, as she
might well be led to infer, a small part, of his intended bounty to
her; his express promise being that she should be otherwise Uberally
provided for after his death by his will. This was given as a reason for
reducing the amount originally proposed to be settled upon her, and
was enforced by calling attention to the phrase at the end of the agree-
ment, where the matter had been apparently taken care of, "unless some
part thereof be given to her by his will." The promise so made, the
testator was bound to fulfill, not as a matter of contractj but as one
of conscience and good faith. Not only the relation between the
parties, but the confidence expressed by the complainant in his assur-
ances, which he himself invoked, forbade anything less. "Can you
trust me ?" were his words ; and her answer, which was most appro-
priate: "If I cannot, we had better stop right hère." How he could
bring himself to feel that he had met this obligation by the niggardly
gift of 10 shares of bank stock, when he came to make his will, it is
difficult to understand.
Entire corroboration of what Mrs. Russell testifies to is to be
found in the déposition of her son Grant Brown, taken in the previous
case, and introduced as évidence, without further examination on the
subject, in this: He states that he was présent when Mr. Russell ex-
plained the reason for reducing the amount to $5,000, and heard him
promise to provide for his mother liberally in his will ; declaring that
this was merely to meet her temporary needs, and by no means repre-
sented the entire share designed for her in his estate. It is not neces-
sary to go over his testimony in détail, or to refer to it further, except
to say that upon it alone the complainant's case would be made out,
justifying a decree setting aside the agreement on the ground of bad
faith.
It is said, however, that fraud cannot be predicated on the mère fail-
ure to fulfill an executory promise, for which Marshman v. Conklin, 21
N. J. Eq. 546, and Lovett v. Taylor, 54 N. J. Eq. 311, 34 Atl. 896, are
relied on. But that dépends. In the first of the cases cited, a trust in
lands was sought to be imposed upon a conveyance absolute on its face,
by reason of an alleged paroi promise made to the grantor at the time
to hold for her benefit after the purpose for which the conveyance was
executed had been subserved ; and it was held that the misplaced con-
fidence involved could not be considered as a fraud or imposition that
would avoid the transaction. But the parties stood in no relation of
confidence, and dealt at arm's length ; and the case set up in the bill
was of an express trust resting in paroi, in the face of the statute of
frauds, which is materially différent from the case in hand. In Lovett
V. Taylor, an improvident son, acting on the advice of his sister and her
husband and their counsel, voluntarily conveyed his property to his
mother, who took it for the purpose of preventing it from being squan-
dered. There was évidence of a verbal promise on her part to recon-
vey to him in course of time, and a reiterated expression of her inten-
RUSSELL V. EUSSELL. 445
tion to do so, but she died without having fulfilled it. On this showing,
it was held by the vice chancellor that no trust resulted by virtue of
the promise or intention of the mother, nor could any fraud be charged
for failure to subsequently recognize the force of the obHgation; the
promise having been made in good faith at the time, and not falsely
or with no intention of ever observing it. Notwithstanding this con-
clusion, however, the court did, in the end, give relief permitting the
son to assert and enforce the trust against his brother and sister by
means of a cross-bill.
But without stopping to discuss the merits of thèse cases, or par-
ticularly quarreling with what they immediately décide, there is abund-
ant authority for the position that the failure to regard an assurance
upon which an agreement is executed may, under certain circumstances,
amount to a fraud. In the leading case of Church v. Ruland, 64 Pa.
432, a daughter importuned and persuaded her father to leave her ail
his land by will, on the express and reiterated promise that she, in turn,
would leave one-half of it to her sister Charlotte's children when she
died. Instead of this, she willed it to the youngest daughter; and it
was held that the assurance upon which the will of her father in her
favor was procured fastened on her conscience, as the party procuring
it, a trust or confidence, the failure to fulfill which was a fraud, creating
a trust ex maleficio, which a court of equity would enforce. In Cow-
perthwaite v. First National Bank, 102 Pa. 397, at a sherifï's sale of the
land of the plaintifif's husband a promise was made to the plaintiff, his
wife, who, by payment of part of the purchase money, had an interest
therein distinct from her dower, that, in case she would allow a con-
sentable sale, the exécution creditors would buy in the property, and
resell it to her on certain terms ; and it was held that the subséquent
refusai to recognize the arrangement was such a fraud as converted
the jpurchaser into a trustée. In Smithsonian Institute v. Meech, 169
U. S. 398, 18 Sup. Ct. 396, 42 L. Ed. 793, title to land for which the
husband furnished the purchase money was taken in the name of the
wife on the distinct understanding and promise by paroi that she would
dispose of it to the Smithsonian Institute by her will. Having failed
to do so, a bill was filed after her death to enforce the obligation, and
it was held that she was bound thereby. "If Mrs. Avery," says the
court, "had during her lifetime conveyed this property to her sister and
brothers, it would hâve been a fraudulent breach of trust; and the
like resuit follows if, now that she bas died without executing a will,
her heirs are permitted to take the property which was conveyed to her,
not as an advancement, but on an agreement that it should subse-
quently pass to this plaintiff." It is true that in this case a trust result-
ed from the payment of the purchase money, and the promise was
relied on mainly to rebut the presumption of a gift from the husband
to his wife; but at the same time the fraud which would foUow a
breach of the undertaking on which the title was obtained is recognized,
which is the importance of it hère.
My conclusion on the whole case, therefore, is that the complainant
was overreached in the making of the antenuptial agreement, and is
entitled to now bave it put out of her way. Laying aside ail considéra-
tions but the last, there is enough in that alone to justify a decree. By
446 129 FBDEKAL REPORTEE.
a most definite and assuring promise, that libéral provision should be
made for her by the testator in his will, she was induced to part with
her dower rights for the very inadéquate sum which he persuaded her
to accept. The promise so made was more than the expression of a
bénéficiai intention. It was a direct assurance, inviting confidence,
and intended so to do, and removed the transaction from the région
of ordinary bargaining to that of conscience and good faith. The
subséquent breach was a fraud which relates back and vitiates the
agreement which was obtained on the strength of it. The testator
could not honestly keep the land, in the face of it, free from the com-
plainant's dower ; nor can the respondents, his heirs and devisees,
who seek to profit by it after his death. To do so abuses the confidence
invited and reposed, which a court of equity will not permit.
Let a decree be drawn avoiding the antenuptial agreement, and estab-
lishing the complainant's dower in the lands of which the respondents'
testator was seised in his lifetime, and appointing commissioners to set
ofï the same, allowing compensation where that cannot conveniently
be donc as well as for that which has been aliened, and stating an ac-
count of the rents and profits meanwhile by way of damages for the
détention, with costs.
In re PHASE.
(District Court, B. D. Mlchlgan, N. D. October 1, 1902.)
1. Bankeuptot— Liens— MoETGAGE fok Bokkowed Money.
A mortgage glven by an insolvent, subseqnently and within four months
adjudged a bankrupt, to secure money borrowed at the tlme for the pur-
pose of preferring certain of his ereditors, where the lender linew or
had reason to believe that such was his purpose, is void under Bankr.
Act July 1, 1898, c. 541, § 67e, 30 Stat 564 [U. S. Comp. St. 1901, p. 3449].
2. Sàme. .
A trust Company, through Its agent and attorney, who was also attor-
ney for large ereditors of a country marchant doing business at a dis-
tance, made a loan to such merchant, with which he at once paid certain
ereditors in full, including the clients of the agent, who received the
money on their behalf directly from the lender. The loan was secured
by a chattel mortgage on the borrower's stocli, and on the next day after
it was given, in aecordance with the previous intention of the lender, it
took possession of the stock, and proceeded to sell It out under the mort-
gage. The borrower was actually insolvent, but no steps were taken by
the Company or Its agent to ascertaln his condition. It did not appear
that he was a party or consented to the taking possession of his stock,
which was not provided for in the mortgage, and there had been no de-
fault He was soon after adjudged a bankrupt. Held, that the trans-
action was evidently not In good faith, in the belief of the bankrupt's
solvency, or for the purpose of assisting him to continue his business,
but was apparently in the interest of the preferred ereditors, and that
the mortgage was void under Bankr. Act July 1, 1898, c. 541, § 67e, 30
Stat. 564 [U. S. Comp. St 1901, p. 3449].
In Bankruptcy.
Perry D. Pease was adjudicated a bankrupt at a tlme when he was carry-
ing on business in a small town of 600 Inhabitants. He had, October 12, 1900,
incurred debts to the amount of about $10,000, and estimated his stock in
H 1. See Bankruptcy, vol. 6, Cent. Dig. §§ 256, 257, 259, 261.
ZN BE FEÂSB. éil
trade at about the samc amonnt On that day he borrov«d (3,500, girlng a
mortgage on bis stock to a securlty trust company. The mortgage was secnred
by a Mr. Chittenden, a lawyer, who, upon the glvlag of the mortgage, took
possession of the stock and proceeded to sell it Certain credltors of Pease
attached the property, and on an Inventory the stock was valued at $6,698.
This appraisal, added to the goods sold by Mr. Chittenden after he took pos-
session, shows the stock valued at about $7,298, leavlng the Indebtedness of
Pease, above the amount of hls stock, at about $2,700. Llttman & HofCstadt,
credltors of Pease, had been pressing hlm for settlement at the tlme of the
negotlatlon of thIs mortgage, and out of the proceeds of the mortgage thelr
Indebtedness, in the amount of $1,800, was pald. A portion of the money was
also used to pay an indebtedness to the debtor's mother-ln-law. The testlmony
of the trustée in bankruptcy was to the effect that sales by a mortgagee re-
duced the value of the stock that remalned after the payment of the mortgage
debt about 40 per cent. The testlmony of Llttman, who had been paid, as to
hls knowledge of the bankrupt's condition at the tlme of the payment, was
unsatisfactory and contradictory, and was not sustained by the testlmony of
Chittenden, who negotlated the loan. Chittenden represented the trust Com-
pany, for whom he had been in the habit of negotiatlng loans, and at the tlme
he recelved the proceeds of the loan from the trust company he had notlfled
Llttman to be présent, that hls claim would be paid, and was authorized by
hlm to reçoive and recelpt for the money as hls attorney,
Chittenden & Chittenden, for appellant.
Chauncy H. Gage and Searl & Montfort, for appellee.
SWAN, District Judge. The bankrupt's intent to prefer Littman
& Hoffstadt and the other creditors, to pay whom he borrowed the
$3,500, is conclusively shown by the facts, and was known to the
agent of the trust company. Nor is there any question but that the
intent and efïect of the mortgage was to hinder or delay, if not de-
fraud, his creditors. In re Goldschmidt, 3 Nat. Bankr. R. 168, 169,
Fed. Cas. No. 5,520; In re McLam (D. C.) 97 Fed. 922.
The giving of the mortgage, therefore, was an act of bankruptcy,
under subdivision i, § 3, c. 541, Bankr. Act July i, 1898, 30 Stat. 546,
547 [U. St. Comp. St. 190 1, p. 3422], without regard to Pease's finan-
cial condition at the time. Insolvency of the debtor is not an élément
of that subdivision. Pease, being insolvent October 12, 1900, as is
conceded, by the payment of Littman & Hofïstadt and his creditors for
money borrowed, with the intent to prefer them over his other creditors,
violated subdivision 2 of section 3 of the act. The act of the debtor
being a préférence, his intent is inferable from his act. In re Black
& Secor, I Nat. Bankr. R. 361. Is the mortgage a lien upon the
bankrupt's estate? By subdivision "a," § 67, c 541, Bankr. Act:
"Clalms whlch for want of record or for other reasons would not hâve been
valid liens as against the claims of the creditors of the bankrupt shall not
be liens against his estate."
By subdivision "d," § 67 :
"Liens given or accepted In good falth and not In contemplation of or In
fraud upon thls act, and for a présent considération whlch bave been recorded
according to law, if record thereof was neeessary in order to impart notice,
«hall not be affected by this act"
By subdivision "e," § 67 :
"Ail conveyances, transfers, asslgnments or encumbranees of hls property
or any part thereof made or given by a bankrupt" wlthin the specified period
"with the Intent and purpose on his part to hinder, delay or defraud hls cred-
i48 129 FEDERAL EEPOIITER.
itors or any of them shall be nnll and vold as against the credltors of sucK
debtor, except as to purchasers In good faith and for a présent fair conëldera-
tion, • • ••'
By subdivision "b," § 67:
"Whenever a créditer is prevented from enforcing Ma rights as against a
lien created or attempted to be ereated by bis debtor, who afterwards becomes
a bankrupt, the trustées of the estate of such bankrupt shall be subrogated to
and may enforce such rights of such creditors for the beneflt of the estate."
It seems clear that thèse several subdivisions hâve a common pur-
pose, and should be read together as collectively définitive of the es-
sentials of a valid lien. It follows that no person can be a "pur-
chaser in good faith" of any part of the bankrupt's estate, if title or
security was accepted "in contemplation of or in fraud upon" the bank-
rupt act, or if for any reason it would not hâve been valid against the
claims of creditors of the bankrupt. The propositions that advances
may be lawfully made in good faith to a debtor to carry on his busi-
ness, and that the lender may lawfully take security at the time for
such advances without violating the bankrupt act, are beyond déniai.
"It makes no différence," says the court in Tifïany v. Boatman's Inst.,
18 Wall. 375, 21 L. Ed. 868, "that the lender had good reason to be-
lieve the borrower to be insolvent, if the loan was made in good faith,
without any intention to defraud the provisions of the bankrupt act."
This was held in construction of section 35 of the bankrupt act of
1867, 14 Stat. 534 (Rev. St. § 5129), which avoided "any conveyance,
transfer or other disposition of the property of an insolvent, if the
grantee had reasonable cause to believe the grantor insolvent, and that
the conveyance was made to prevent the property coming to the as-
signée in bankruptcy, or to prevent the same from being distributed
under the act, or to defraud the object of, or in any way impair, hinder,
impcde or delay the opération and effect of, or to évade any of the
provisions of this title." Thèse two éléments must hâve concurred
in the transaction to avoid the conveyance. It was not enough that the
grantor was believed to be insolvent in order to defeat the title of the
grantee, but it must also appear that the grantee knew that the convey-
ance was made with a view to effect any purpose prohibited by the act.
If that is shown, it avoids the transfer. Even though a présent fair
considération for property transferred to the hindrance, delay of, or in
fraud upon creditors, it will not save the conveyance. "A sale may
be void for bad faith, though the buyer pays the full value of the
property bought." This is the conséquence where his purpose is to
aid the seller in perpetrating a fraud upon his creditors, and where he
buys recklessly, with guilty knowledge. Cléments v. Moore, 6 Wall.
312, 18 L. Ed. 786; Cadogen v. Kenneth, 2 Cowp. 432; Walbrun v.
Babbitt, 16 Wall. 581 (bottom), 21 L. Ed. 489.
The décisions under the acts of 1841 and 1867 are to the same efïect
as Tiffany v. Boatman's Inst., 18 Wall. 375, 21 L. Ed. 868, viz., that
it is essential to the validity of security for a loan to one adjudged a
bankrupt within four months thereafter that the transfer was had
"without any intention to defraud the provisions of the bankrupt act."
In Re Butler, 4 Nat. Bankr. R. 308, 120 Fed. 100, the bankrupt
borrowed from one Mendcll, upon mortgage of his stock in trade,
IN KE PEASE. 449
$i,6oo to pay one Cushman, an unsecured creditor, who was pressing
for payment. Kimball> a clerk or partner of Cushman's, suggested to
the mortgagee the loan to Butler upon security, and to Butler, the
bankrupt, that Mendell wrould probably lend him the money. Mendell
made no inquiry into the condition of Butler's affairs, but relied mainly
upon the advice of Kimball and Cushman. Judge Lowell held that
the money was raised for the express purpose of paying an antécédent
debt, and that the intent to prefer the creditor was plainly inferable;
that the mortgage was out of the ordinary course of the business of
the bankrupt, because he was a retail dealer, doing a business of about
$100 a day, and a mortgage of such a trader's full stock is a confes-
sion of insolvency — citing Nary v. Merrill, 8 Allen, 451. He dismissed
the pétition of the mortgagee for payment of his mortgage debt from
the proceeds of sale of the property. The case is very like that at
bar in its main features. In the latter, however, the attorney for the
mortgagee was also attorney for the principal preferred creditor.
In Bucknam v. Goss, 13 N. B. R. 337, Fed. Cas. No. 2,097, Judge
Fox held that a mortgage given by one subsequently adjudged a bank-
rupt in part to prefer the mortgagee as to his claim, and in part to se-
cure a présent loan made for the purpose of enabling the debtor to
pay another creditor, was entirely void.
In Fox V. Gardner, 21 Wall, 475-480, 22 L. Ed. 685, it is said:
"The right of an Insolvent person, before proceedings are commenced
against him, to pay a just debt, honestly to sell property for whleh a just
équivalent is recelved, to borrow mouey, and give a valid security therefor,
are ail recognized by the bankrupt act, and ail dépend upon the same prln-
ciple. In each case the transaction must be honest, free from ail Intent to
delay or defraud credltors or to give a préférence, or to Impair the estate.
If there is fraud, trickery, or intent to delay or prefer one creditor over others,
the transaction cannot stand."
In the case of In re Soudan Mfg. Co., 113 Fed. 804, 51 C. C. A. 476,
it was held that under section 67d of the bankrupt act the validity of a
mortgage given to secure a présent loan of money within four months
prior to the borrower's bankruptcy does not dépend upon his solvency
at the time, or upon notice of his financial condition by the mortgagee,
actual or constructive ; but to invalidate such a mortgage it must be
shown that the borrower was insolvent, that the purpose of the loan
was to accomplish unlawful préférence or otherwise violate the act,
and that the lender knew or was chargeable with knowledge of both
of such facts. In that case the mortgage was upheld upon the facts
in the case, which did not imply insolvency of the borrower.
In Re Beerman, 7 Am. Bankr. R. 431, 112 Fed. 663, a firm creditor
of an insolvent debtor a month before his bankruptcy procured a third
person to lend money to pay his debt to the firm upon a mortgage upon
the debtor's stock, and a bond of indemnity from the firm against loss,
the lender understanding that the money was to go to the firm, and
the firm received it. The mortgage was held void under the bankrupt
act, since it would enable the creditor to obtain by indirection a préfér-
ence which he would hâve been unable to get if he had dealt directly
with the debtor. Upon a like state of facts Judge Coxe held a trans-
fer of property by the bankrupt void as a préférence. In re Minnie
McGee, 5 Am. Bankr. R. 262, 105 Fed. 895.
129 F.— 29
450 129 FEDERAL REPORTER.
The validity of a dealing assailed as a préférence îs determined by
its purpose and effect, and not by its form. In Stern, Falk & Co. v.
Trust Co., 7 Am. Bankr, R. 305-308, 112 Fed. 501, where the creditors
of a bankrupt firm were disallowed because they had refused to sur-
render proceeds of the bankrupt's estate acquired by collusion with the
assignée of the bankrupt, Judge Severens said :
"In respect to the means by which the transfer Is effected there Is no limita-
tion. However devions the method, if the resuit is that but for the act the
créditer acquires property from the debtor which is subject at law or in equity
to be appropriated to the satisfaction of the debtor's obligations, that is a
transfer, within the meaning of the act"
Under the act of 1867 it was held that the first clause of the thirty-
fifth section of that act, which corresponds to section 60 of the prés-
ent act, had référence only to transfers of property to pre-existing
creditors of the bankrupt, and that a transaction original and com-
plète in itself, founded on the présent considération and had with one
having no previous relations with the bankrupt, could only be assailed
under the second clause of the thirty-fifth section of the former act,
which is the équivalent of section 61 of the présent act. Bean v. Brook-
mire, i Dill. 25, Fed. Cas. No. 1,168; Gibson v. Warden, 14 Wall.
244, 20 L. Ed. 797.
By a parity of reasoning it may be that the facts of the case at bar
bring it under section 67, subds. "d," "e," and exclude the applicability
of section 60, subds. "a," "b," because the Security Trust Company
had had no dealings with the bankrupt prior to the loan of October
12, 1900. This, if conceded, would not aid the validity of the mort-
gage in controversy; for, if good faith is the sole criterion of the
validity of a transfer upon a présent considération, that élément can-
not inhere in it, where the lender knew or had reason to believe that
the grantor was insolvent, and that the purpose of the loan was to
enable him therewith to defeat any provision of the bankrupt act. "If
the vendor's purpose in selling is to defraud his creditors" (and it
might be added, "or to hinder or delay them"), "or if it is to work a
fraud upon the law by illégal payments, préférence, or the like, and the
purchaser knows, or has good reason to believe, that such is the pur-
pose of the vendor, then the purchase is void." Darby v. Lucas, i
Dill. 170, Fed. Cas. No. 3,573.
Under the second clause of section 35 the act of 1867 includes any
disposition of property by one insolvent or in contemplation of insol-
vency if the récipient had reason to believe the grantor to be in either
of thèse conditions, "and that the act was donc by him to prevent the
property from coming into the hands of his assignée in bankruptcy
and from being distributed under the bankrupt law." Gibson v. War-
den, 14 Wall. 249, 20 L. Ed. 797. The sixty-seventh section of the
act of 1898 is entitled to quite as broad construction to effectuate the
purpose of the law as that given to the second clause of section 35 oî
the prior act. If a volunteer purchaser or incumbrancer of an in-
solvent's property, having knowledge or means of knowledge of his
actual insolvency and of his purpose by the transfer to defeat the pro-
visions of the bankrupt act, is protected as a bona fide purchaser upon
the bankruptcy of the grantor within four months, while any unse-
IN EE PEASE. 4:51
cured creditor who, without reasonable cause to believe the debtor is
insolvent, has received part payment upon his daim, must surrender
such payment as preferential before he can prove for the balance of
his claim, tlie object of the bankrupt act may easily be thwarted. The
creditor has only to obtain a loan to the bankrupt, and receive pay-
ment of his full claim from the proceeds.
In Tiffany v. Boatman's Institution, i8 Wall. 375-388, 21 L. Ed.
868, the court upheld the validity of a loan to one Darby, who is de-
scribed as "a man of large property and large debts," and "of wonder-
ful energy and capacity for business." Darby borrowed the money
to take valuable securities out of pledge and to prevent their sacrifice.
Neither he nor the lender contemplated any fraud upon creditors.
Their rédemption was a benefit to creditors. The testimony was in
conflict as to Darby's commercial solvency at the time of the loan.
The case of Tiffany v. Lucas, 15 Wall. 410, 21 L,. Ed. 198, sustained
a sale of property by Darby. While thèse décisions are often cited
as holding that good faith is the only test of the validity of a transfer
by one subsequently adjudged a bankrupt, and that "it makes no dif-
férence that the lender had good reason to believe the borrowCr in-
solvent, if the loan was made in good faith without any intent to de-
feat the provisions of the bankrupt law," they are not authorities for
the doctrine that under the act of 1898 one actually insolvent can
make any transfer of property, even for a présent considération, to
one who knows or had the means of knowing of his financial condi-
tion and his purpose to évade the bankrupt act. Under the act of
1867, a person was insolvent who could not pay his debts as they ma-
tured. This condition might well consist with the possession of am-
ple property to meet them if an extension of time could be had. For
that reason it was held the loan to one known to be commercially in-
solvent to enable him to avoid bankruptcy was a legitimate transfer
if no fraud upon the bankrupt act was intended. Where, however,
one's debts exceed the value of his property, there is no reason why
one who knows that fact and its necessary conséquences to creditors
of the borrower, and lends him money upon the security of his prop-
erty, to be applied in preferring one or more of his creditors or to hin-
der or delay the insolvent's creditors, should be held a preferred cred-
itor.
One actually insolvent has no équitable înterest in what is only
nominally his property. The effect of his transfer is to hinder, delay,
and defraud his other creditors without the hope or possibility of bene-
fiting him self. The reasons for sustaining a sale or security given by
one commercially insolvent in the effort to save his business and avoid
bankruptcy hâve no application to one who has lost everything, and
who by a sale or mortgage of his property necessarily withdraws it,
in whole or in part, from the reach of creditors. Both lender and
borrower are chargeable with knowledge of the obvions efïect of the
transaction upon unsecured creditors, and with coUuding to defeat the
bankrupt act, if the insolvent seasonably beconies a bankrupt. Had
the Security Trust Company in this case been a pre-existing creditor
of Pease its security for its debt would hâve been indefensible. It is
equally so when it ignored the means of knowledge of the grantor's
i52 129 FEDERAL EEFORTBK.
hopeless însolvency, and knowing that the money was to be used to
pay unsecured pre-existing debts. A loan of that character is not sanc-
tioned by the reasoning in either Tififany v. Boatman's Inst., supra, or
Tifïany v. Lucas, 15 Wall. 410-424, 21 L. Ed. 198, in neither of which
was the vendor known to be even commercially insolvent. It seems
clear from thèse considérations that, although a présent considération
passed to Pease for the mortgage, the avowed purpose and necessary
efïect of the transaction, under the facts in this case, deny to the mort-
gagee the character of a purchaser in good faith. The agent and at-
torney of the Security Trust Company admits that he knew before
he went to Ashley that Pease wanted the loan to pay Littman & Hoff-
stadt (who had been his clients for several years, and had consulted
him about their claim against Pease), and other creditors whose daims
were long overdue, and that the Security Trust Company knew tliat
Littman & Hoffstadt were to be paid from the loan, yet the proofs
show that he made no inquiry into Pease's indebtedness beyond asking
him if there were any judgments against him or incumbrance upon
his property. Littman had been persistent in pressing Pease for pay-
ment, and when told by Pease, about a week before the mortgage was
given, that his efforts to borrow money in Ithaca had failed, assured
Pease that he would get it for him. Littman dénies this, but the facts
tend to corroborate Pease. The proofs show that Littman was at
Ithaca when the mortgage was executed, having been informed by
Chittenden and by Pease that he would get his money that day from
the proceeds of the loan. At Littman's suggestion Pease gave Chit-
tenden an order on the Security Trust Company for Littman's claim of
$1,842, and that sum was paid to Chittenden at Toledo by the mort-
gagee, and Chittenden paid it to Littman. The proofs are convincing
that the loan was made and the security taken primarily to secure pay-
ment of the claim of Chittenden's clients, Littman & Hoffstadt, in the
belief founded upon an overvaluation of the stock, and Pease's estimate
— which was a mère guess — that he had a margin of $2,000 or $3,000
of assets over his liabilities. This guess, however, was discredited by
Pease's express admission, abundantly established by his own testi-
mony and that of Mr. Matthews that he did not know how much he
owed. The means for ascertaining the exact amount of his indebted-
ness were at handj. but were not called for. Mr. Chittenden does not
claim that he asked Pease for either his books or his invoices of his
stock. Pease kept no books, but that, it seems, was not known to
Chittenden. Pease had no difficulty in making up from his invoices
of stock a schedule of his creditors and their claims when he filed his
pétition in bankruptcy, and its correctness has not been questioned.
Indeed, the admission of counsel for the mortgagee that he was in-
solvent when the mortgage was given leaves that fact beyond contro-
versy. It is equally certain that examination of the invoices of his
purchases would hâve disclosed Pease's indebtedness for his stock.
This, added to his debts for borrowed money, would hâve demonstrat-
ed, even on Chittenden's estimate of the stock, that he owed more
than he could pay. Thèse facts liken this transaction to that con-
demned in Waldrun v. Babbitt, 16 Wall. 577-582, 21 L. Ed. 489, where
the title of a purchaser, who bought, without inquiry as to the vendor's
IN EE PEASE. 453
financial condition, the stock of a country trader, was sought to be de-
fended on the ground that he had paid full value in ignorance of the
condition of the seller's business. The purchaser limited his inquiry
to the trader's object in selling out and his future purpose. The
court held that a sale of that kind imported the seller's fraudulent in-
tent, and put the buyer on inquiry, adding :
"Somettimg more was required than this Information of the trader's object
and future purpose, which the law raised In the mère fact of a retail mer-
chant selling out his entire stock of goods. If this sort of information could
sustain the sale, the provision of the bankrupt law we are considering would
be no protection to creditors in Mendelson's situation, and with the purpose
he had in view would be likely to give the party with whom he was dealing
a plausible reason for his eonduct. The presumption of fraud arising from the
unusual nature of the sale In this case can only be overcome by proof on the
part of the buyer that he took the proper steps to flnd out the pecuniary con-
dition of the seller. Ail reasonable means pursued in good faith must be used
for this purpose. * * * In chooslng to remain ignorant of what the
necessities of his case required of him to know, he took the risk of the im-
peachment of the transaction by the assignée In banlcruptcy in case Mendel-
son should be adjudged a bankrupt within the time limited in the statute."
This duty of inquiry was reiterated in Wager v. Hall, i6 Wall. 584-
600, 21 L. Ed. 504.
Neither the Security Trust Company nor its agent and attorney at
any time contemplated aiding Pease to continue his business and avoid
bankruptcy, as was the purpose of the lender in Tiffany v. Lucas,
supra. When Mr. Niles agreed with Chittenden to make the loan,
conditioned on the latter's approval, it was agreed between them that
Pease should be ousted from possession at once, and a custodian should
take charge of the stock. This was donc immediately, on Chitten-
den's telegram, the same day the mortgage was delivered, and without
notice to Pease of that purpose or the significance of the présence of
Cummings, the custodian sent by Niles, although, as Chittenden ad-
mits, Pease had not violated any condition of the mortgage, nor is it
claimed that he was informed that the mortgagee in so doing was
acting under the insecurity clause of the mortgage. Thereupon, with-
in two or three days after the exécution of the mortgage, handbills an-
nouncing a chattel mortgage sale of the stock under the order of the
Security Trust Company were scattered broadcast by Chittenden's
orders, although no installment of the mortgage debt was due. Pease
was surprised by thèse acts. His request for a loan to help him "pull
through" had been nominally granted. The lender "kept the word
of promise to the ear, but broke it to the hope." The conséquences
in no degree exculpate him from the charge of violation of the bank-
rupt act in making a transfer for a purpose, in fraud of the act. He
had armed the lender with the power to appropriate his property to
the hindrance and delay of his creditors, and must be presumed to
hâve intended the natural conséquences of its exercise, although he
was not bound to anticipate its abuse. Clarion Bank v. Jones, 21 Wall.
327, 22 L. Ed. 542.
The évidence shows without conflict that the necessary effect of
the slaughter of the stock efïected by the course pursued and the reck-
less manner in its disposition of the mortgagee impaired the value
of what remained and sacrificed the interests of unsecured creditors
454 129 FEDERAL REPORTER.
whose only fund it was. There is évidence that no bank would hâve
made the loan as an investment on the security offered. The utmost
profit it could hâve yielded to the lender, had its terms been met by
Pease, vi^ould hâve been abput $52, the interest on the money to the
maturity of the debt. The paucity of that incentive to a loan to an
unknown country merchant doing business in a small village distant
130 miles or more from Toledo, and confessedly and obviously unable
to pay either his business indebtedness or long-standing debts for bor-
rowed capital, the arbitrary and prématuré steps deliberately taken
against the property, and the relation between the attorney for the
lender and the preferred creditors of the bankrupt, are little short of
conclusive that the real purpose of the loan was in this circuitous way
to obtain the préférence for Littman & Hofifstadt, and that accomplish-
ed to sacrifice the mortgaged property for payment of its own debt,
ignoring alike the terms of the mortgage and the interest of Pease's
creditors. The facts throw the burden upon the mortgagee to excul-
pate itself, and this has not been met. The course taken in the en-
forcement of the security was not authorized by the mortgage. If,
as is claimed by Mr. Chittenden, it was consented to by Pease as a con-
dition précèdent to the loan, it is singular it was not embodied in the
mortgage. It proves also it was not taken under the insecurity clause.
It was not notified to Pease's creditors by the records of the mortgage,
and it substituted another security for that evidenced by the instru-
ment and its record. Such substituted security was not a lien for
"want of record," under section 67 of the act and the statutes of
Michigan. Under the testimony and accepting the recorded mortgage
as a measure of the rights of the parties, the action of the mortgagee
was a premeditated wrongful conversion of the property, and an inten-
tional disregard of the rights of the mortgagor and his creditors and to
their injury. Woods v. Gaar, Scott & Co., 93 Mich. 147, 53 N. W. 14.
While the conséquence to Pease's creditors of this action would not
defeat the mortgage, if valid, yet they tend to show that the purpose of
the lender was not the relief of the mortgagor or the préservation of
his business, as he was led to believe, but the contrary. This is fur-
ther evidenced by the fact that at least $350 of the "expenses" charged
to Pease, and apparently allowed as covered by the mortgage, were ail
incurred, as Mr. Chittenden admits, in contesting the claims of Pease's
attaching creditors, and are not proper charges against Pease's estate.
There are other "expenses" allowed the mortgagee against the bank-
rupt's estate quite as open to challenge. Thèse charges also impugn
the good faith of the mortgagees, who are responsible for and charged
with knowledge of ail facts known to Mr. Chittenden, who was their
attorney in the transaction, and, though he testifies he was "not re-
tained," acted also for Littman & Hofifstadt. The Security Trust
Company knew that Pease intended to pay Littman & Hoffstadt's
claim out of the proceeds of the loan — Mr. Chittenden had so informed
them — and he knew that the claim was not due, and that its payment
would work a préférence. He not only shut his eyes to Pease's finan-
cial condition, but made no inquiry to learn whether Pease had other
property, "because," as he admits, he "was not interested in that."
Disregarding the mortgage, and under the alleged anterior agreement
8XATE TRUST CO. V. KANSA8 CITY, P. & G. E. CO. 435
with Pease inconsistent with its provisions, but of no légal efïicacy, he
practically destroyed the only available fund for creditors — the stock,
which he said was worth $8,000 — to enforce prématuré payment of $3,-
267 by a course which he apparently premeditated when he accepted
the loan, but did not disclose until the delivery of the security. His
acts and knowledge are those of the mortgagee, who knew not Pease,
but committed the conduct and consummation of the loan to him,
Rogers v. Palmer, 102 U. S. 263, 26 L. Ed. 164; The Distilled Spirits,
II Wall. 356, 20 L. Ed. 167; Smith v. Ayer, ici U. S. 320, 325, 326,
25 L. Ed. 955.
The facts disprove the good faith of the Security Trust Company in
the transaction, and the finding of the référée in its favor, holding its
debt a secured claim, is reversed, and its mortgage is decreed to be
void.
The finding of SWAN, District Judge, was afîfirmed by the United
States Court of Appeals, Sixth Circuit.
STATE TRUST CO. v. KANSAS CITY, P. & G. R. CO. et al. (WESTING-
HOUSB AIR BRAKE CO., Intervener).
(Circuit Court, W. D. Missouri, W. D. March 29, 1904.)
No. 2,331.
1. Railkoads— Mortgage Pobeclostjke — Claims Entitlbd to Préférence.
Wliere a fédéral court, in a suit to foreclose a railroad mortgage, in
considération of the previous condition of the mortgagor company exceed-
ed the usual limlt of six months, and directed the receivers to pay debts
for services rendered or materials and supplies furnished and necessary
to the maintenance of the road contracted within a year prior to the re-
ceivership, it will not extend such period still further, and glve préfér-
ence over the mortgage to a claim arising more than a year before the
suit, uDless the equities of the case absolutely demand It; and the fact
that the claim is one for equipping cars of the mortgagor with air brakes,
required by act of Congress, does not give it any higher equity or right
to préférence than any other claim for necessary equipment or supplies.
2. Fedeeal Courts— Following State Décisions— Construction of State
Statutes.
A décision of the Court of Appeals of Missouri as to the construction
or effect of a state statute is not binding on a fédéral court, since the
Suprême Court of the state, which is the court of highest jurisdiction, is
not concluded thereby, but may, should the same question be presented
to it, détermine it difCerently.
3. Railboads— Suit to Foreclose Moetgage— Waiveb of Right to Assert
Pebferestial Lien.
A créditer of a railroad company, who, after the appointment of receiv-
ers for the property of the company in a suit to foreclose a mortgage
thereon, flled a statement under a state statute for a mechanlc's lien for
the debt, thereby waived the right to afterward assert an équitable pref-
erential lien in the foreclosure suit, the right to which was dépendent on
a différent state of facts as to the extension of the crédit.
1 1. Foreclosure of mortgages in fédéral courts, see note to Seattle L. S. &
E. Ry. Co. V. Union Trust Co., 24 C. C. A. 523.
1[ 2. State laws as rules of décision in fédéral courts, see notes to Griffin v.
Overman Wheel Co., 9 C. C. A. 548 ; Wilson v. Perrin, 11 C. C. A. 71 ; Hill v.
Hite, 29 C. C. A. 553.
See Courts, vol. 13, Cent. Dig. § 957.
456 129 FEDERAL KEPOKTEK.
lu Equity. In the matter o£ the intervention of the Westinghouse
Air Brake Company.
For former opinion, sec 128 Fed. 129.
Prier to and on the Ist day of April, 1893, there existed the Kansas City,
Pittsburg & Guif Railroad Company, a Missouri corporation, the Texarkaaa
& Ft. Smith Railway Company, an Arkansas corporation, and the Kansas
City, Shreveport & Gulf Railway Company, a corporation of the states of
Louisiana and Texas, respectively. The stock of said Texarkana & Ft. Smith
Railway Company and the Kansas City, Shreveport & Gulf Railway Company
having been largely acquired by the stockholders of the Kansas City, Pitts-
burg & Gulf Railroad Company with the view of building and operatiug a
continuons Une of road from Fairview, in Jackson county, Mo., to the Gulf
of Mexico, bonds were issued, of date April 1, 1893, in spécifie numbers, by
the respective corporations, to the State Trust Company of New York, as
trustée, for the purpose of raising the necessary funds for the construction
and equipment of said continuons line of road; and on the Ist day of April,
1893, a blanket mortgage was placed on said railroad properties in respective
_ amounts aggregating about $23,000,000 In favor of said trust company as
' trustée. Default having bèen made in the payment of interest coupons on
said bonds, the said State Trust Company on the Gth day of April, 1899, filed
its bill in this court against said railroad companies to foreclose said mort-
gage on the property situate within this jurisdiction. Under this bill Sam-
uel W. Fordyce and Webster Withers, on the 2Sth day of April, 1899, were
appointed receivers of said railroad property of the Kansas City, Pittsburg
& Gulf Railroad In this state. Like bills of foreelosure were filed in the
United States Circuit Courts in the other states in which the respective cor-
porations were situated, and the said Fordyce and Withers were appointed
in thèse ancillary proceedings as receivers therein. Such proceedings were
had under said bills resulting in the foreelosure and sale of said respective
properties, under which the Kansas City Southern Railway Company, a
Missouri corporation, organized pursuant to the scheme of reorganization,
became the purchaser of said properties at the upset price, amounting to
§12,500,000, and received a deed therefor. On the 5th day of May, 1899, the
Westinghouse Air Brake Company, a corporation of the state of Pennsyl-
vania, flled in the circuit court of Jackson county, Mo., a mechanic's lien
on the property of the Kansas City, Pittsburg & Gulf Railroad Company,
under the statute of the state of Missouri, to secure an indebtedness on ac-
count for air brakes and materials furnished to said last-named railroad
Company between the 20th day of February, 1897, and the Ist day of April,
1899. On the 15th day of June, 1899, the said Westinghouse Air Brake Com-
pany, on its application therefor, was granted leave by this court "to inter-
vene in this cause and file herein its pétition for intervention," which was
flled on the same date ; and on the 8th day of September, 1900, said West-
inghouse Air Brake Company flled its amended intervening pétition herein,
in which it set up a claim on said account against said Kansas City, l'itts-
burg & Gulf Railroad Company for an équitable lien, preferential in its char-
acter to the rights of the mortgagee in said foreelosure proceeding, in which
it was alleged that the said material so furnished by said vendor was nec-
essary for the proper equipment and opération of said railroad to keep it a
going concern, and that it was understood between said vendor and vendee
that the same was to be paid for out of the current earnings in the opéra-
tion of said railroad not otherwise applied to the expenses of running, oper-
ating, and maintaining the railroad ; that sufflcient funds were earned out
of the current income of the railroad to hâve paid the said indebtedness,
but that the same were diverted to the betterment of the railroad property,
so as to entitle the intervener to the équitable preferential lieu aforesaid ;
and asking that the same may be declared a lien upon the corpus of the
propei'ty purchased by said Kansas City Southern Railway Company, and
that said lien be enforced, unless otherwise paid by said purchasing com-
pany. The bill also, in one paragraph thereof, pleaded the flling of a me-
chanic's lien aforesaid, and asked for its enforeement against the property
80 purchased by the Kansas City Southern Railway Company. The issues
STATE TRUST CO. V, KAîjISAS CITY, P. A G. B. CO. 457
on thls intervention were referred to B. H. Stiles, master in cliancery, to
talie the proofs and report the évidence, together with hls flndings on the
faets and the law, to thls court The master made hls report, flnding In
f avor of the intervener on its mechanic's lien in the sum of $11,271.05 ; and,
further, that, Independently of the statutory lien, intervener is entitled to
an équitable lien in the sum of $12,316.21. Both parties toolc exceptions to
the flndings of the master. On hearing before the court the court held that
the bill of intervention was multifarious In asserting In the same bill the
équitable lien and the statutory mechanic's lien (128 Fed. 129), and therefore
directed that the intervener malte Its élection as to which of said asserted
liens it vpould stand upon for final decree, and to dismlss the bill as to the
other claim. Conformably to this direction, the intervener has flled its élec-
tion in writing herein to stand upon the équitable lien.
Haff & Michaels, for Westinghouse Air Brake Co.
Lathrop, Morrow, Fox & Moore, for Kansas City Southern Ry. Co.
PHILLIPS, District Judge (after stating the facts). The inter-
vener having elected to stand for final decree upon its claim for an
équitable lien, the court will not consider or pass upon what it con-
ceives to be some of the vital objections to the validity of the statutory
mechanic's lien, but will only discuss and détermine the validitv of the
équitable lien. Paragraph 6 of the decree of this court appointing the
receivers provides as f ollows :
"Said receivers shall be authorized to pay out of any Income or revenues
which may come to their hands ail debts which may hâve been lawfully
contracted by the Kansas City, Pittsburg & Gulf Rallway since May 1, 1898,
for services rendered to said company by its employés In the opération of its
road, includlng herein the reasonable salaries to its officers, and reasonable
compensation for professional services rendered by attorneys ; also ail debts
lawfully contracted during the aforesald period for materials and supplies
furnished to said railway company, and used in the maintenance and opéra-
tion of Its road; and also ail trafflc balances, if there shall be any due, to
Connecting carriers. Other daims and demands against said company shall
only be paid by the receivers upon orders of court hereafter made, and the
court reserves to Itself the power to direct the payment of such other de-
mands against said railway as It may deem to be of a preferentlal nature."
Paragraph 19 of the decree of foreclosure contains the foUowing
provision :
"Any such purchaser or purchasers, and hls or their successors and assigns,
shall enter his or their appearanee In this court, and he or they, or any of
the parties to this suit, shall hâve the right to contest any claim, demand,
or allowance undetermined at the time of the sale, or which thereafter may
arise or be presented, and which would be payable out of the proceeds of
the sale hereunder, or by said purchaser or purchasers, his or their succes-
sors or assigns, or wIth which he or they or the property purchased would
be chargeable under the terms of this decree; and he or they may appeal
from any décision relating to any such claim, demand, or allowance."
It is quite évident from said paragraph 6 that the court did not in-
tend to give priority over the mortgage lien to any and ail claims of
an asserted équitable character which niight be presented against the
mortgagor, regardless of the circumstances and the time of their origin.
The receivers were authorized to pay out of the income or revenue cer-
tain designated debts contracted after May i, 1898, reserving to the
court, by the last clause, the right to détermine what other claims and
demands against the company should be paid by the receivers. By
said paragraph 19, while the purchaser of the road was required to en-
458 129 FEDERAL EBPORTEE.
ter its appearance în this court and become a party to the suit, the right
was nevertheless reserved to such purchaser "to contest any claim, de-
mand, or allowance undetermined at the time of the sale, or which may
thereafter arise or be presented." The first part of paragraph 6 in-
dicates, in a gênerai way, what was the mind of the court respecting
the limit of time within which daims should hâve accrued to author-
ize their payment. The court was familiar with the history of this
railroad, and the character of its burdens, as well as the probable losses
that must be sustained by the bondholders whose money had gone
into the construction and equipment of the road. The period of 6
months is ordinarily recognized by the fédéra! courts as just and rea-
sonable within which the claim must hâve accrued to entitle it to préf-
érence over the mortgage; and, while it is not an inflexible rule, and
the court may reserve to itself the right to allow a longer time when
the equities of the case absolutely demand it, there certainly ought to
be some spécial equity to give this particular alleged lienor an exten-
sion beyond the i2-months period recognized in paragraph 6. Speak-
ing for myself, who joined with Judge Thayer in making the decree
in question, the i2-months period was deemed most libéral to the
creditors. And as this court knows that ail the claims imposed upon
the purchaser of this road hâve been adjusted upon the i2-months
limitation period, it can see no spécial equity in favor of this inter-
vener, who represents the last unadjusted claim, for according to it,
as the master has, a period of i8 months anterior to the appointment
of the receivers, even if the claim should be found entitled to the préf-
érence asserted.
The principal reason assigned for giving this claim such spécial dis-
tinction is that the air brakes were essential to enable the railroad
Company to comply with the act of Congress requiring railroads en-
gaged in Interstate commerce to equip their trains with the Westing-
house air brake. Aside from the fact that the account in question
shows many items which were not air brakes, but were for articles
for repairs in and about the cars, and the master has largely eut down
the amount claimed, I am unable to perceive why this company, which
had the good fortune to get this act through Congress, and secure
to itself a monopoly of this entire business, and a spécial contract
from the company obligating it to obtain its supplies from the Westing-
house Company, should stand upon a better footing than the cred-
itor who furnished engines for hauling its trains, or for fuel for pro-
pelling the engines, or who furnished ties and rails for the construc-
tion of the road. Without thèse the railroad could not hâve been
operated at ail. Railroads had hitherto been operated without the in-
tervener's air brakes, but no railroad was ever operated without an
engine, fuel, ties, and rails. Congress itself extended the time to 1900
for railroads to comply with the act without being amenable to the
penalties therein provided. In view of the manner in which ail other
claims hâve been adjusted under the receivership and the decree of the
court, I am unwilling to make any discrimination in favor of this inter-
vener by recognizing its preferential right, if at ail, anterior to the
ist day of May, 1898. Nor can this court see any spécial reason for
the claim of the intervener for interest on its claim. No other claim-
STATE TBUST OO. V. KANSAS GITT, P. & G. B. CO. 45&
ant has been allowed interest on its daim, and the gênerai rule is not
to allow such interest. Thomas v. Western Car Company, 149 U. S.
9S> 13 Sup. Ct. 824, 37 L. Ed. 663. And so the master has found.
A more serions question confronts the claim of the intervener. As
shown by the foregoing statement of facts, and as disclosed on the
face of the bill, the intervener, shortly after the appointment of the
receivers, filed its claim for the account in question with the clerk of
the circuit court of Jackson county, Mo., asserting its right to a stat-
utory mechanic's Hen. Counsel for the Kansas City Southern Rail-
way Company, the purchaser under the foreclosure sale, interposes the
objection that the state statute giving a mechanic's lien, and the action
taken thereunder by the intervener, preclude the assertion of any équi-
table lien. This contention is predicated in part upon the ruling of
the Court of Appeals of this state in Van Frank v. Ehret Warren Mfg.
Co., 89 Mo. App. 573, amplified in the case of Van Frank v. Brooks,
93 Mo. App. 412, 67 S. W. 688, in which it is held that, where the claim
is one for which a lien is afforded by section 4239, Rev. St. Mo. 1899,
relating to liens in favor of contractors, materialmen, etc., against rail-
road companies, the statutory remedy excludes the équitable one al-
lowing a préférence in a foreclosure suit. This ruling is based upon
the proposition that the alleged lienor has a complète and adéquate
remedy at law by the statute, and that, as the statute giving the right
of lien against railroad companies was enacted and in force in this
state long prior to the introduction into the fédéral judiciary procédure
in railroad foreclosure suits of the right to an équitable préférence over
the mortgagee, it is a légal remedy afforded which excludes the in-
vocation of the equity doctrine. That court, while recognizing the
flexibility of équitable principles to meet constantly occurring novel
situations in connection with the development of railroads and railroad
mortgages, held that:
"The création of an équitable remedy for this purpose Is not called for
when there Is already an adéquate statutory one In force. Nor could an
équitable one be tolerated in that contlngency wlthout disregarding the pre-
eept that cases are not cognizable In equity when there Is a sufflclent légal
remedy, exeept in the few instances of concurrent jurlsdlction."
The court also recognized the correctness of the rule that when a
court of equity, in the exercise of its inhérent powers, has jurisdiction
to grant particular relief in the particular case, "such Jurisdiction is
not, in gênerai, lost, or abridged, or affected because the courts of law
may hâve subsequently acquired a jurisdiction to grant either the same
or différent relief in the same kind of cases and under the same facts
or circumstances." But, inasmuch as the légal remedy under the me-
chanic's lien statute was provided and existed in this state before any
court had introduced the doctrine of équitable préférence in foreclosure
proceedings, the légal remedy "is the older, and therefore precludes
the exercise of the latter." Should this ruling of the Court of Ap-
peals be followed by this court? As said by Mr. Justice White, in
M., K. & T. Ry. Co. v. McCann, 174 U. S. 586, 19 Sup. Ct. 758, 43 L.
Ed. 1093 : "The elementary rule is that this court accepts the inter-
prétation of the statute of a state affixed to it by the court of last re-
sort thereof." Were such the construction placed upon the state
*Ô0 129 FEDERAL REPORTEE.
statute by the Suprême Court of the state (the court of highest juris-
diction in the state), there would be better ground for holding that it
should be followed by this court, for the reason that the rule established
by the state court might constitute a rule of property as to railroads
opéra ted in the state. Knapp, Stout & Company v. McCaffrey, 177
U. S. 638, 20 Sup. Ct. 824, 44 L. Ed. 921 ; Williams v. Gaylord, 186
U. S. 157, 163, 165, 22 Sup. Ct. 798, 46 L. Ed. 1102. But it might be
that, notwithstanding such construction of the state statute in ques-
tion, the fédéral court, in the exercise of its equity jurisdiction, in taking
possession of property under a receivership, could nevertheless condi-
tion the appointment of receivers upon the requirement that they
should recognize and pay certain specified indebtednesses against the
corporation. But this question is not before the court. The Court
of Appeals of this state in many respects is not the highest court of
the state, whose rulings are binding on this court. In M., K. & T. Ry.
Co. V. Elliott, 184 U. S. 530, 22 Sup. Ct. 446, 46 L,. Ed. 673, it was
held that the judgment of the state Court of Appeals in a case within
its jurisdiction, not reviewable by the Suprême Court of the state, was
so far a judgment by a court of last resort as to authorize the prosecu-
tion of a writ of error directly f rom the Court of Appeals to the Su-
prême Court of the United States. Under the scheme of the constitu-
tional provision creating the Court of Appeals of the state, the Suprême
Court, when a like question comes before it as to the construction and
effect of a statute of the state, may give a différent construction
thereto from that of the Court of Appeals ; and the ruling of the
Suprême Court would then become the local law as to the efïect of the
statute. The most to be said of the ruling of the Court of Appeals
under considération is that it is entitled to respect by the fédéral court
in administering law in. the state when its construction of the statute
comes before the fédéral court for détermination. The ruling of that
court may be strengthened by the décisions of other courts in pari
materia.
In Farmers' Loan & Trust Company v. Candler (Ga.) 18 S. E. 540,
Candler, the claimant, as hère, intervened in the foreclosure suit, as-
serting an équitable préférence over the mortgagee. Likewise had he
previously undertaken to file a mechanic's lien, which contained a mis-
description of the property, invalidating his lien. The court held
that, having the right to the lien, or an opportunity to file one, he was
not entitled to the équitable lien as against the mortgagee. The court
said :
"The scheme of the Code Is to gIve to contractors for building railroads
a lien for work done or materials furnished on certain prescribed terms,
and the mode of enforcing the lien Is also prescribed. It seems to us plain
that the object of the Code would be frustra ted, and virtually defeated, if
a contractor who bas secured a lien, but failed to enforce it in the manner
prescribed, can abandon that lien, and fall back upon an alleged équitable
lien involved in the very same state of facts out of which 'his légal lien arose,
and thereby postpone or defeat a mortgage upon the railroad, duly recorded
and foreclosed; this mortgage being of older date than the gênerai judg-
ment which the contractor bas obtalned for the amount of his debt. We
entertain no doubt that the law contemplâtes that a contractor to whom it
gives a légal lien upon a railroad, and who bas nothing to do in order to
take the benefit of it but to enforce it in the way prescribed, shall bave no
STATE TRUST CO. V. KANSA8 CITY, P. & G. B. CO. 461
other lien, elther in addition to It or as a substitute for it. He cannot cover
his failure to comply with the statute as to the enforeement o£ the lien by
abandoniug that lien and asserting another one, nor can lie assert his légal
lien otlierwise tban in the mode prescribed. We need not rule, and do not,
whether, if there were no statutory System of liens in behalf o£ railroad con-
tractors, there would be any equity in favor o£ the contractor against the
mortgage, under the circumstances of this case, or not. But wlth that Sys-
tem, and the relation to it which this contractor oecuples, we deem it per-
fectly clear that he is restricted to his statutory lien, and must enforce that
or none at ail."
Indépendant of the question as to whether or not the statutory pre-
scription for securing liens upon railroad property in the state ex-
cludes the establishment of the common-law lien as against the mort-
gagee whose lien in the case at bar covers ail the property of the rail-
road Company, as well as its income in excess of operating expenses,
the question arises : Where it appears, both on the face of the bill of
intervention and in the intervener's proofs, that after the appointment
of the receivers under the foreclosure suit by the mortgagee the in-
tervener filed a mechanic's lien, under the state statute, on the property
of the railroad company in this state, on the account in question, can
the intervener nevertheless assert an équitable or common-law lien?
The only adjudicated case bearing on this question, so far as I am ad-
vised, is that of Bankers' & Merchants' Tel. Co. of Indiana v. Bank-
ers' & Marchants' Tel. Co. of New York (C. C.) 27 Fed. 536, where the
intervener undertook to file a mechanic's lien under the statute, and
also to assert a common-law lien. The master concluded his report
as follows: "I report and find that by perfecting his claim for a lien
under the statute Mr. Vale waived the right, if he had any, to assert
his common-law Hen." The Circuit Court, while holding that the
ciaimant did not come within the purview of the statute, said: "In
the opinion of the court the petitioner had no lien at common law or
in equity." On appeal to the Suprême Court (entitled Vane v. New-
cr-mbe, 132 U. S. 220, 238, 10 Sup. Ct. 60, 65, 33 L. Ed. 310), after
considering the statute under which the mechanic's lien was asserted,
the court said: "A common-law lien and an équitable lien are also
claimed. As to the common-law lien the master reported 'that, by per-
fecting his claim for a lien under the statute, Mr. Vane waived the
right he had, if any, to assert his common-law lien.' We concur in
this view as to the personal property and earnings of the corporation."
It is quite clear from the finding of the master that he based his con-
clusion on the légal proposition that the filing of the statutory lien was
a waiver of the right to invoke a common-law lien. This view of the
master was affirmed by the Suprême Court, and it seems to me the con-
clusion stands to reason. When in possession of ail the information
respecting the circumstances under which the materials in question
were furnished, whether on a gênerai crédit looking to the responsi-
bility of the railroad company, with the right under the statute to file
a mechanic's lien, or whether it was under a spécial understanding en-
titling the vendor to an équitable preferential lien, the vendor, after
the court had taken charge of the property for administration under
the receivership, filed its statement for a statutory lien on the account,
asserting that the materials were sold "pursuant" to a spécifie written
462 129 FEDERAL REPORTER.
contract of date January i, 1896, and that ail the items therein were
furnished under "one entire contract." This was a proclamation in
solemn form by the claimant to the receivers and every créditer of
the insolvent company that it abandoned any other assertion of a lien,
especially an équitable one, dépendent upon a différent state of facts.
If I read aright the plain language of the Suprême Court in the fore-
going case, this act constituted a waiver of any common-law lien. I
can see nothing to dififerentiate that case on principle from the one at
bar.
It results that the claim of the intervener to an équitable préférence
is disallowed.
THE TRADER.
THE CAPITAL CITY.
(District Court, D. Washington, W. D. Aprll 6, 1904.)
1. Collision — Steam Vessels Mçeting — Négligence and Violation oe
RtTLES.
A collision occurred in Puget Sound shortly after dark, off Dash Point,
four miles north of Tacoma, between the steamer Capital City, proceeding
from Tacoma at a speed of 12 miles, and the British steamer Trader, com-
Ing southward at a speed of 5% miles. The nlght was dark but calm,
with no fog, and the lights could readily be seen. As the Capital City
came out past Brown's Point, being then on a crosslng course and showing
her green light to the Trader, the latter, then a mile distant, gave a signal
of two blasts for passing starboard to starboard, which was not answered.
The Capital City then swung to the starboard so as to pass a quarter of
a mile o£C Dash Point, and for five minutes the vessels approached each
other head on. When half a mile apart the Trader repeated her signal
for a starboard passing, whieh was assented to, but the Capital City pro-
ceeded wlthout changing course or speed until Immediately before colli-
sion, when, wlthout signal, she ported her helm and swung to starboard
across the course of the Trader, which immediately reversed, but too late
to avoid the collision. Held, that both vessels were in f ault ; the Trader
for signaling while the other vessel was coming around the point and
before she had settled on her course, and persistlng in such signal contrary
to the rules whIle they were approaching head on, and for not sooner
stopping and givlng alarm signais when the Capital City was seen to be
coming on at full speed wlthout changing her course ; the Capital City for
inattention to the meeting vessel, for failing to act on the signal after
acceding to It, and, flnally, for taking the contrary course wlthout notice,
making the collision Inévitable.
2. Same— Issues in Suit — Consolidation oe Causes.
The failure of a pétition for limitation of llabllity on account of colli-
sion to set out the grounds on which exemption from llabllity is claimed,
as required by admiralty rulé 56, when It is Intended to contest such lla-
bllity, cannot be taken advantage of by the adverse parties, where by stipu-
lation such proceedings hâve been Consolidated with cross-suits between the
two vessels, in whieh the question of llabllity bas been put in issue by the
pleadlngs.
3. Same — Failuee of Mastee to Stahd by aetee Collision— Evidence Con-
sidkbed.
The failure of the captain of one of two vessels, both of which were
serlously injured in a collision, to stand by after the other had been
U 1. Signais of meeting vessels, see note to The New York, 30 G. O. A. G30.
THE TEADEE. 463
beached, or to take off her passengers, was not a violation of Act Sept.
4, 1890, c. 8T5, 26 Stat. 425 [D. S. Comp. St 1901, p. 2902], which rendered
his vessel llable for the collision, where it was calm and there was little
danger to the passengers, and the estent of the injury to his own vessel
was unknown, and where, after proceeding to port only four miles distant,
he at once gave notice and Uimself returned with a tug, and ail the pas-
sengers and crew were safely taken ofC.
4. SAME— ASSIGNMENT OF CLAIMS SUIT BT VOLXJNTEEE.
A mère volunteer to whom claims for damages by collision hâve been
assigned solely for the purpose of suit, and who bas no interest therein,
bas no standing to prosecute such claims in a court of admiralty.
In Admiralty. Cross-libels to recover damages for injuries caused
by a collision between the steamboat Capital City, an American vessel,
owned by the S. Willey Steamship & Navigation Company, and the
steamboat Trader, a British vessel, owned by C. S, Baxter and F. W.
Vincent. Hearing on the merits. Both vessels found to be in fault,
and damages divided.
Thls lltigation was initiated by a suit In rem In behalf of the S. Willey
Steamship & Navigation Company, owner of the steamboat Capital City,
against the British steamboat Trader, registéred at the port of Victoria, B. C,
to recover damages for an injury to the Capital City, and for loss of cargo
and baggage of passengers and personal efCects of members of her crew, caused
by a collision between the two vessels, which occurred on the 28th day of
October, 1902, on Puget Sound, ofC Dash Point, about four miles northward
from Tacoma, by which the Capital City was so badly injured that it was
necessary to run her on the beach to save the lives of the passengers and
crew on board. Said libel was filed the next day after the collision, while the
Capital City was sunk, and supposed to be a complète wreck, and the amount
of damages claimed was $40,000. After the Trader had been taken into the
custody of the United States marshal, her owners appeared as claimants, and
flled a pétition for limitation of liability in accordance with the laws of the
United States, and thereupon the Trader was appraised, and a bond for her
appraised value was filed in the case, after which she was released from cus-
tody. The Capital City having been raised, and taken to a dock for repairs,
an amended libel was filed, in which the amount of damages claimed was re-
duced to $8,500. On December 29, 1902, the owners of the Trader commenced
an independent suit in rem against the Capital City to recover $5,000 damages
for alleged Injuries to the Trader caused by the collision. On the same day,
December 29, 1902, a stipulation, signed In behalf of the respective owners of
the two vessels, was filed In the suit of Baxter and Vincent against the Capi-
tal City, whereby the parties agreed as follows:
"It Is hereby stipulated and agreed by and between the proctors for ail
parties in interest:
"First. That the causes and matters of ail klnds and nature whatsoever
in any wise comprised or included In the above-entitled matters shall be Con-
solidated and by the above-entitled court heard as of one case.
"Second. That ail évidence taken in any of such causes upon the behalf of
any party thereto, whether heretofore appearing or hereafter to appear, shall
be considered in ail of said causes, and hâve the same force and effect, as
though separately taken in each case.
"Third. That Honorable Samuel D. Bridges be appointed by the judge of
the above-entitled court as court commissioner to take évidence therein, and
ail of the évidence heretofore taken or hereafter to be takén before said com-
missioner be considered as having been taken In each, every, and ail of said
causes.
"Fourth. That this stipulation Is entered Into toavoid eosts, expense, and
delay, and the same is considered a full and sufflcient considération and cause
thereof on behalf of every party hereto, and on behalf of any party or parties
hereinalter in any of thèse causes appearing or making claim.
464 129 FBDB3BAL REPORTER.
"Fifth. That any party or parties clalming or pretending to clalm to hâve
any Interest or rlght by reason of the collision of the steamers Capital City
and Trader ont of whleh the above causes arose may appeàr in any one of sald
causes, or elther of them, and such appearance shall be considered an appear-
ance In each and ail thereof, one appearance only as to ail of said causes from
this time forth being required, and such intervening parties to hâve every
right by reason of such appearance as though separate appearances were made
in ail three causes.
"Sixth. ïhat the above-entitled court make its order, forthwith direeting
a monition to issue in the matter of the limitation of liability, and appolnting
the said Samuel Bridges as commlssloner of said court to take testimony
thereunder; and that thereupon the sald causes proceed to a final hearing
as soon as may be convenient and possible upon the part of the parties hereto.
"Seventh. Thàt this stipulation be filed, and an order be entered accordingly,
and that ail parties hereafter appearing or intervening In this cause hâve the
beneflt hereof, reserving ail questions under pétition for limitation of liability."
On the 23d day of January, 1903, Francis Rotch appeared In the original
suit, in response to the pétition for limitation of liability, and flled an inter-
vening libel to recover, on the bond filed by the owners of the Trader, the
alleged value of merchandise and baggage, and personal efifects of a number
of shippers and passengers, and members of the crew, alleged to hâve been ou
board the Capital City, and to hâve been lost or damaged in conséquence of
the collision, and alleged that thç owners thereof had assigned their claims
to him.
In accordance with the stipulation above referred to, the several causes
were Consolidated, and évidence in behalf of each and ail of thé litigants bas
been taken and reported to the court by a commissioner appointed for that
purpose.
The pleadings upon which the cause bas been submitted to the court con-
sist of the amended libel of the S. Willey Steamship & Navigation Company,
the answer of Baxter and Vincent to said amended libel, the pétition of Bax-
ter and Vincent under the llmited liability statutes, a clalm in behalf of the
original libelant In response to the pétition for limitation of liability, a claim
in behalf of Francis Rotch In response to said pétition for limitation of lia-
bility, the libel of Baxter and Vincent against the Capital City, an answer
to said libel of the owner of the Capital City, the intervening libel of Francis
Rotch, and an answer to said Intervening libel of Baxter and Vincent.
In this mass of pleadings there are many répétitions, but the issues are few
and simple. Against the Trader, the charge is made that she was solely in
fault, because (a) she did not hâve the, régulation lights, or, if her lights were
burnlng, they were so defective and dim as to be invisible until the two steam-
ers approached so near to each other that the collision could not be avoided;
(b) the Trader signaled for a starboard passing when the positions and courses
of the two vessels were such that they should hâve passed port side to port
side, and no signal to apprise the Capital City of her présence was given by
the Trader at the proper time; (e) her commander "did not properly direct
the course and movement" of the Trader. This gênerai charge, and the spéc-
ifications thereof, are ail denled. Against the Capital City, it is alleged that
she was solely in fault, for the reason that when the two vessels were one
mile distant from each other, and In such positions that the Capital City
showed only her green llght and her masthead light to the Trader, a signal
for a starboard passing was given by the Trader, to which the Capital City
failed to make response, and later, when the distance betweeh the two vessels
was at least one-half of a mile, and the Capital City was still showlng her
green light, and not her red llght, to the Trader, the signal for a starboard
passing was repeated by two blasts of the Trader's whlstle, to which the Cap-
ital City Immediately responded by two blasts of her whistle, and when the
vessels were very neàr to each other, and the Capital City runnlng at a high
rate of speed — at least 12 knots per hour — sald steamer, wlthout giving any
warning of Intention to change her course, suddenly turned on a port helm.
In such a manner as to swing across the bow of the Trader, and the collision
occurred, notwithstanding the fact that the Trader's engine was immediately
THE TEADEB. 465
reversed, and commenced worklng full speed astern. This charge, and the
spécifications thereof, are also denled. The amounts of the losses alleged in
the intervening libel of Rotch, and the several assignments to him, were put
in issue by the answer to said llbel.
As part of the proceedings under the pétition for limitation of liabllity, the
court appointed a commissioner to whom ail clalms against the Trader for
damages growing out of said collision should be presented, and directed said
commissioner to take évidence to prove such claims as might be presented,
and to report to the court the amount of each of such claims. Said commis-
sioner has made a report containing a schedule of claims for merchandlse lost
or damaged, amounting in the aggi'egate to $419,61, and a schedule of claims
for the Personal efCects of employés of the Capital City, amounting in the
aggregate to $410.50, and it appears from said report that the amounts claim-
ed as set forth in said schedules were not contested, but were admitted. Said
commissioner's report also shows that the elaim of the S. Willey Steamship
& Navigation Company, amounting to $8,500, was also presented, and It was
not contested. The commissioner, however, dld not assume to make any flnd-
ings as to the liabllity of either of the parties with respect to said claims.
Richard Saxe Jones and George C. Israël, for libelant
J. M. Ashton, for claimants.
Richard Saxe Jones, for intervening libelant.
HANFORD, District Judge (after stating the facts as above). From
the évidence, I find the facts of the case to be as follows : The place
of the collision was about four miles north of Tacoma, and one-fourth
of a mile ofif shore, opposite the south side of Dash Point. There was
ample room for the two vessels to hâve passed each other in safety,
there being proximately three miles of open water between the shore
of the mainland and Maury Island, and the vessels were not embar-
rassed by the présence of other craft. The time of the collision was
about 6 :20 p. m., October 28, 1902. The sky was overcast and cloudy,
so that it was quite dark; otherwise it was a fine evening — that is to
say, it was calm, and there was no fog or rain to obstruct the vision.
The Trader was going to Tacoma, carrying a cargo of salted fish in
boxes. She passed Point Robinson at about 5 :30 p. m., and was then
so far out towards midchannel that another steamer, going northward
to Seattle, passed between her and Point Robinson. At that time the
captain relieved the mate and took sole control of her movements, and
changed her course so as to head south by west a quarter west by her
compass. The distance from Point Robinson to Dash Point is proxi-
mately five miles, the tide was ebbing, and the Trader's speed was about
5^ statute miles per hour. At that rate of speed, with the tide against
her, and on that course, in the 50 minutes which intervened between the
time of passing Point Robinson and the time of the collision, the
Trader would hâve crossed Puget Sound on an oblique line, and would
hâve come to the place of the collision above indicated, which is proxi-
mately one-quarter of a mile ofï the southerly side of Dash Point.
The accompanying outline map is an accurate représentation of
the shore lines and points referred to and the course of the Trader, in-
dicated by an arrow 1,000 feet off Point Robinson, and shows proxi-
mately the location of the collision, indicated by a cross one-fourth of
a mile ofï Dash Point, and proximately the courses of the Capital City
before and after turning Brown's Point.
129 F.— 30
466
129 FEDERAL KEPORÏBE.
"Tacom^
The Capital City is a passenger steamboat, and was employed on a
route between Seattle, Tacoma, and Olympia. Compared with the
Trader, she is a fast boat, her ordinary speed being ï2}4 miles per
hour. She left Tacoma at 6 p. m. on her run northward to Seattle,
and passed Brown's Point 15 minutes later, and then steered a course
to the place of the collision above indicated, so that for a period of about
5 minutes the two steamers were on opposite courses, and approaching
each other head on, or nearly so. Each of them carried the régulation
masthead light and side lights, ail of their lights were burning brightly,
THE TRADER. 467
and the three lights of each were visible to the other vessel from the
time that the Capital City changed her course after tuniing Brown's
Point, but until she changed her course only her masthead light and
green light would show to the Trader. The captain of the Trader
saw the masthead light and the green light of the Capital City as soon
as she came out past Brown's Point, and immediately, the vessels then
being distant one mile from each other, blew two blasts of the Trader's
whistle, which is the signal for passing starboard to starboard, and to
that signal the Capital City made no response. About two minutes
afterwards, when the vessels were approaching head on, as above indi-
cated, and showing ail their lights to each other, the captain of the
Trader persisted in his purpose, and repeated the signal for a starboard
passing, to which the Capital City assented by an immédiate response,
giving two blasts of her whistle, and continued on her course, running
full speed until the two vessels were very close to each other, when
her captain, without having sounded an alarm, and without giving any
signal other than the response to the Trader's whistle as above men-
tioned, changed her helm to hard aport, so that she turned quickly to
starboard in a manner to bring her port side across the bow of the
Trader. The captain of the Trader noticed the movement as soon as
the Capital City commenced to turn, and immediately gave the signal
to his engineer to reverse and work the engine full speed astern, and
said order was instantly obeyed. Eitner the reversing of her engine
or a change of her helm caused the Trader to swing to port, so that
when the two vessels came together they were both turning inshore.
The Trader's bow eut into the port side of the Capital City, about 30
feet abaft her stem, at an angle of about 45 degrees from the line of
her keel. One of the broken timbers of the Capital City penetrated the
huU of the Trader on the starboard side of her bow below the water
line. Both vessels were seriously injured by the heavy jar of the im-
pact and by the crushing of their timbers. The Capital City took in
water rapidly, so that the fire in her furnace was extinguished before
she struck the beach on Dash Point, less than 10 minutes after the col-
lision. The only opening made in the hull of the Trader was partly
choked by the timber which made it, so that she did not take in water
to such an extent as to prevent her from completing the run to Ta-
coma, which she did after the Capital City had been run upon the beach.
On arrivai at Tacoma her captain reported the disaster, and during the
evening the passenger steamer Flyer went to the relief of the Capital
City and took ofF ail of her passengers. Previous to that being done,
however, the captain had returned with a steam tug to render any as-
sistance possible.
In arriving at a conclusion with respect to the facts of the case, I
hâve been guided mainly by the évidence of unimpeached witnesses, and
by the indisputable facts with rsspect to the time and place of the col-
lision. I hâve been obliged to reject as untrue the testimony given
by the captain of the Trader, to the effect that only the green light of
the Capital City was visible to him when he blew the second signal for
a starboard passing. It is a peculiar feature of this case that the two
captains agrée in their testimony with respect to the course steered by
the Capital City. Her captain puts her on a course from Brown's
168 129 FEDERAL EEPOKTElt.
Point which would show only her green light to the Trader, and the cap-
tain of that veSsel swears that the Capital City did show only her green
light, until she turned immediately preceding the collision. Neverthe-
less, the results prove the contrary, for it is certain that, when the two
steamers first came into positions to be visible from each other, the
Trader was off Dash Point and the Capital City was turning Brown's
Point, and it is certain that she came around that point and ran to the
place where the Trader struck her, and she was stranded on Dash Point ;
therefore she must hâve run nearly a straight course from Brown's
Point towards Dash Point, until she turned to starboard, only a few
seconds before she was struck; whereas, if she was on a course N.^â
W., as her captain testified, or on any course which would conceal her
red light from the Trader, as she was going northward, she would
hâve pointed across the Sound, more in the direction of the center of
Maury Island than towards the place where the collision occurred, and,
keeping in mind the superior speed of the Capital City, it is obvious that
if she pointed to the westward sufficiently to conceal her red light
from the Trader she would hâve made way out towards the middle of
the stream so far, before she turned to starboard, that the collision could
not hâve happened so quickly after that error as ail the évidence proves,
and, if the testimony of the captain of the Trader is true in respect to his
own promptness in reversing and commencing to work her engine full
speed astern, the collision would hâve been avoided.
The testimony of the captain of the Capital City is muddled and con-
tradictory, and inconsistent with well-established facts. He claims to
hâve been in the pilot house, and on watch from the time his steamer
left Tacoma ; that he heard only one signal from the Trader ; that he
responded to that signal, notwithstanding the fact that he was unable
to see the Trader's lights, or to locate her position, until the vessels were
so near to each other that the collision could not be avoided ; that at first
he saw only her red light, which was four points ofï the Capital City's
port bow ; and that the two vessels were in that position (that is to say,
very near to each other, and the Trader bearing four points off the
Capital City's port bow, and showing only her red light) when he
put his helm hard aport. He attempts to excuse himself for not seeing
the Trader's lights by saying that it was raining and the weather was
thick, and yet he claims that he did see the lights on Point Robinson,
more than five miles distant. He prétends, also, that at the time of
answering the signal he gave an order to the man who was steering the
Capital City to change her course one point to port, and that he does
not know now, and did not at the time observe, whether said order
was obeyed or not; and, further, it appears by his testimony that he
was first apprised of danger by hearing some one — he does not know
who — say, "There is going to be a collision." He did not then give
any signal to his engineer, and attempts to excuse that failure by say-
ing that he was standing in the pilot house in a position where he could
not reach the handle of the engine-room signal bell. If this is a true
exposure of his conduct, we hâve an instance of a captain of a passen-
ger steamboat, running in the nighttime at a high rate of speed, placing
himself in a position where he could not communicate with his engineer,
and remaining in that position after hearing a passing signal from a
THE TRADER. 469
steamer which he did not see nor locate, although the signal was in fact
given by a steamer in dangerous proximity, when nothing intervened to
obstruct his vision, and, after giving an order to his helmsman to
change the course of his vessel, taking no heed to see whether the order
was obeyed or not. The culmination of his extraordinary proceedings
is in swearing, as a witness in this case, that when he arrived at Brown's
Point he put the Capital City on a course N.^W., then clianged the
course one point more to West, and, with that steering, fetched the
Trader's red light four points ofï the port bow of his own vessel.
It is entirely plain to me that the collision could not hâve happened,
under the circumstances which existed, without the concurrence of
négligence and mismanagement on the part of both captains. The
collision did occur as a conséquence of the obstinancy of a British
captain in disregarding the plain mandate of the law that two steamers
on opposite courses, approaching each other head to head, shall each
give way sufHciently to pass each other port side to port side. The first
signal for a starboard passing was given when the Capital City was
at least one mile distant from the Trader, and when she was turning
a point, and in this there was a violation of law — the passing signal
should not be given by one vessel until the course of the other vessel
has been ascertained. His error in signaling prematurely gave the
captain no right whatever to insist upon passing on the starboard side,
when the conditions were such as to require adhérence to the rule
requiring both vessels to give way to starboard so as to pass on the
port side. The Capital City carried good Hghts, and it is reasonably
certain that the captain of the Trader saw her red light before repeat-
ing the signal for a starboard passing ; theref ore an inexcusable fault
on his part was committed in repeating that . signal, and steering a
course to pass on the starboard hand. If he did not see the Capital
City's red light at the time of repeating the signal, he certainly was
not attending to his business, and was guilty of a fault as serions as
the other. The conduct of the Capital City in running at a high rate
of speed so as to meet the Trader head on after she had signaled,
without responding to the signal, was a sufficient indication of danger
to make it the imperative duty of the captain of the Trader to stop
his vessel and sound an alarm, and his failure to do so was another
violation of law, and a serious fault.
The charge made against the Trader, that she did not hâve the
régulation lights, or that, if she did hâve lights, they were defective,
is shown to be untrue by ample évidence. The errors committed by
the captain of the Capital City are glaring and inexcusable. He knew
that his vessel was running at a high rate of speed, and that for
safety it was necessary for him to keep a vigilant lookout, and es-
pecially so when turning Brown's Point. He either neglected that
important duty, or actually saw the lights of the Trader when she
was one mile distant, and made no timely effort to keep out of her way.
His failure to see the Trader, if he did not see her in ample time, and
his failure to keep out of her way, constitute the first fault of which
I find him guilty. Having assented to the Trader's second signal
for a starboard passing, he was bound to act accordingly, and should
hâve changed the course of the Capital City by going to port, so as
470 129 FEDBBAL KEPOEÏEE.
to give. ample room to pass clear. If he had donc so, the collision
would not hâve occurred, and his failure in this respect constitutes
the second fault of which I find him gnilty. If the Capital City had
continued on a straight course, the Trader might hâve given way so
as to hâve passed in safety; therefore the act of the captain of the
Capital City in turning to starboard, suddenly, without having indi-
cated his intention to do so by any signal, made the collision inévitable,
and that act constitutes the third fault of which I find him guilty.
And his failure to stop and sound an alarm when the trader gave a
wrong signal for passing constitutes the fourth fault of which I find
him guilty. The captain's own testimony is sufficient to condemn his
seamanship, and put upon the Capital City responsibility for the col-
lision, and ,1 do not hâve to rest my décision upon the testimony of
witnesses who appear to be under suspicion. I will say, however, in
passing, that the man who was in the pilot house with tlie captain, and
who steered the Capital City, and who was called first as a witness
for the libelant, and afterwards was recalled as a witness for the
Trader, appears to me to hâve been just as incompétent in the position
of helmsman as he is untrustwdrthy as a witness. He does not know
starboard from port. I am justified in saying so by the contradictions
in his testimony. It is impossible to ascertain from his évidence
whether he changed the helm so as to turn the vessel to starboard, or
to port, after the signais were exchanged. The following quotation is
taken from the cross-examination of said witness when he was giving
his évidence in behalf of the libelant :
"Q. Did you get any order from the captain, from Capt Edwards, as soon
as you saw the Trader? A. He took the wheel himself to throw her hard
over, and tried to clear the boat, and the other boat turned right around and
hit us. Q. Oh, I see. Then, as soon as you saw the Trader, you put your
helm hard aportî A. The helm hard astarboard. Q. ïou put your helm hard
astarboard when you saw the Trader; Is that right? A. I mean hard aport,
to try to get away from her again, to make a starboard passing. Q. I want
to know just what you do mean. When you flrst saw the Trader, dId you put
your helm hard astarboard or hard aport? A. Put the helm hard astarboard
— I mean hard aport — to try to get away from him; we were maklng a star-
board passing. Q. Then when you put your helm hard aport^ A. Hard
astarboard. Q. Hard astarboard. Then as a matter of fact you put your helm
hard astarboard, did you? A. Yes, sir. Q. Who told you to do that? A.
Well, the captain took the wheel then himself. Q. He took the lever? A. Yes,
sir. Q. Well, he dId not change the course any after he took it, did he? A.
Well, he put the wheel hard astarboard. Q. You put It hard astarboard, and
then he took the lever? A. Yes, sir. Q. Now, Mr. Simdars, why did the cap-
tain take the lever away from you? A. Well, he seen there was going to be a
collision, and he trled to get out the best way he eould. He took it himself
to try to get out of It. Q. DId not he take your lever away from you because
he told you to put your helm hard aport and you put It hard astarboard, as
you testified? A. No, sir. Q. What did he say to you when he took the lever
away from you? A. He did not say anything; he just— I let him hâve the
wheel, and he took the wheel and done the best he could to try to get away
from her."
In the light of such testimony, given by one of the most important
witnesses for the libelant, the conclusion that the Capital City was in
control of a blunderer is unavoidable, and it is useless to conjecture as
to whether it was the helmsman, or the captain himself, who blundered.
The proctor for the libelant and intervening libelant has unreasona-
IHE IBADEE. 471
ably insisted upon a decree in favor of his clients for full damages on
merely technical grounds, taking the position that the pétition for limit-
ation of liability filed in behalf of the owners of the Trader amounts to
a confession that the Trader was in fault and liable to an amount ex-
ceeding her value, and that they should be precluded from contesting
liability by reason of their failure to observe the requirements of ad-
miralty ruie 56, which prescribes that in proceedings under the limited
liability statute, if the owner or owners of a vessel elect to contest his
or their liability, or the liability of the vessel, independently of the
limitation of liability claimed, the facts or circumstances by reason of
which exemption from liability is claimed shall be stated "in his or their
libel or pétition." It is true that the pétition for limitation of liability
is defective, and if the proceedings were merely such as are contemplat-
ed by the admiralty rules, in which the issues are to be ascertained from
statements of the owner's pétition or libel and an answer thereto, it
would be entirely fair for the court to deny the right of the peti-
tioners to daim exemption, because their pétition does not set forth
the facts and circumstances relied upon as grounds for complète ex-
emption. In this case, however, the issues which the court must ad-
judicate are set forth in the several pleadings which I hâve enumerated,
and by the stipulation of the parties the several causes hâve been Con-
solidated, and the court is required to adjudicate the entire controversy,
and every branch of it. It is my opinion that the libelant, by said
stipulation, waived whatever technical rights might otherwise hâve
been based upon exceptions to the sufficiency of the pétition for limita-
tion of liability. In the first pleading filed by the libelant, an issue was
tendered with respect to the fault of the Trader, and by the answer an
issue was joined, and the same issue was raised by the libel against the
Capital City, and the answer thereto, and évidence has been submitted
in behalf of Ijoth parties bearing upon that issue, and from considération
of ail the évidence the court has reached the conclusion, above indicated,
that the collision and ail consequential damages were caused by faults of
the respective captains in the management of both vessels, and that the
entire damages should be divided equally.
In the argument, but not in the pleadings, the Trader is charged with
failure to render assistance in rescuing the passengers and crew of the
Capital City, and it is insisted that under the act of Congress of Septem-
ber 4, 1890, c. 875, § I, 26 U. S. Stat. 425 [U. S. Comp. St. 1901, p.
2902], the collision must be deemed to hâve been caused by the wrong-
ful act, nôglect, or fault of the Trader. I find, however, that she did
stand by until the Capital City was beached, and then proceeded to Ta-
coma, and her captain was prompt in reporting the disaster, and pro-
cured a steamtug to go to the relief of the Capital City, and returned to
her with said tug. Considering the comparative safety of the people
on the Capital City after she was beached, and the unknown extent of
the damages to the Trader, it would hâve been imprudent to hâve at-
tempted to take the passengers on board the Trader. Therefore the
statute cited is not applicable to this case.
The intervening libelant has no standing in a court of admiralty, for
the reason that the ftvudence proves affirmatively that he has no interest
in any of the matters in controversy. He paid nothing to either of the
ïl:72 120 FEDERAL KErOKTEK.
owners of merchandise or baggage alleged to hâve been lost or dam-
aged, and the several assignments of claims alleged in his libel were in-
tended tb give only color of a right to sue for damages. Courts of ad-
miralty do not encourage litigation by mère volimteers. The Prussia
(D. C.) 100 Fed. 486; Minturn v. Alexandre (D. C.) 5 Fed. 119; Fretz
V. Bull, 12 How. 468, 13 L,. Ed. 1068. I direct that the decree herein
shall contain a sentence that said intervening Hbelant take nothing.
From considération of the évidence, the court finds that the Trader
was seriously injured by the collision, and that $2,500 is a reasonable
estimate of the damages for said in jury. The total amount of damages
caused by the collision, with interest thereon, computed at the rate of
6 per cent, per annum, from the ist day of January, 1903, to the ist day
of April, 1904, amounts to the sum of $11,825, ^"d the amount for
which the Trader is liable, after deducting $2,500 and interest thereon,
amounts to the sum of $3,225, to which will be added one-half of ail
the taxable costs ; and by the decree it will be directed that the owners
of the Trader pay into court said amount plus one-half of the taxable
costs, out of which will be paid the total amount of the taxable costs,
and the residue vf'ûï be paid to the libelant
BIRD V. TBRBT.
(Circuit Cîourt, D. Washington, W. D. February 28, 1903.)
No. 773.
1. InDIANS— AiXOTMENT OP LaNDS IN SBVEBALTT— RiGHTS CONVETED BY PAT-
ENT UNDEB TBBATY.
A treaty made in 1854 between the United States and the Puyallup
and other bands of Indlans provlded for the allotment and conveyance
In severalty of land to Indlans who were heads of familles upon certain
conditions as to résidence and cultivation, and with certain restrictions
as to aliénation, subject to which the land was to be thelrs for a perma-
nent home for themselTes and thelr familles and Inherltable by their
heirs. Held, that a patent to an Indian under such treaty for lands
prevlously allotted to him, which reclted the ternis of the gi-ant, conveyed
to him a vested estate, which could not be taken away or affeeted by aiiy
subséquent action of the executive department of the government so long
as he complied with the conditions.
2. SAME— RlQHTS FOLLOWING ClTIZENSHIP — PROTECTION OF PBOPERTY RiGHTS.
An Indian, who, by practicing the habits of civllized life, and llving on
and cultivating land allotted to him in severalty, bas become under the
law a citizen of the United States, Is entitled to ail the rights of other
citizens, and may prosecute and défend sults in any court of compétent
jurisdlctlon, state or fédéral, In respect to his property rights, and hls
ownershlp and use of land which has been patented to him under a treaty
are matters not subject to the décision or control of either Congress or
the executive branch of the government.
In Equity. The following is the agreed statement of facts :
It is hereby stipulated and agreed by and between Messrs. Reid & Meade,
sollcitors for complalnant, George Bird, and Edward B. Cushman, Assistant
United States Attorney, and attorney for défendant, Frank Terry, that the
following are materlal facts which could be proven under the issues, and that
they are hereby stipulated to be the controUing facts in this case. It is fur-
BIED V. TERRT. 473
ther stlpulated and agreed that upon this statement of facts thls cause la
submitted to the court for judgment, and that by submitting the case upon the
said agreed statement of facts neither complalnant nor défendant waive any
rlght to review or appeal from said judgment ; ail ot which rights are ex-
pressly reserved the same as though said case had been regularly submitted
and tried upon évidence taken.
(1) That on the 26th day of December, 1854, a treaty was concluded and
signed between the Puyallup and other bands of Indians on the one part and
the United States on the other part, and was thereafter duly ratifled and con-
flrmed by the Président and Senate of the United States. Said treaty is found
in Aet Dec. 26, 1854 (10 Stat. 1132).
(2) That on and prlor to the 17th day of January, 1881, said George Bird
was a member of the Puyallup tribe of Indians, and was one of the members
entitled to an assignment of lands under the provisions of said treaty, and
that on said day an allotment of land was made to complalnant, under the
provisions of said treaty, by an instrument in wrlting in the following words :
"No. 50. Department of the Interior,
"Office of Indiaa AfCairs,
"January 17th, 1881.
"Thls Is to certify, that Teow-away, or George Bird, a member of the Puy-
allup trlbe ot Indians, having expressed a désire to adopt habits of settled
industry, and to receive an allotment of lands for the purposes of cultivation,
as provided for in the 6th article of the treaty with said tribe, concluded De-
cember 26th, 1854 (Vol. 10, page 1133), la entitled to acres of land, and
that he has selected for such purposes the N. B. M of S. W. % of Sec. 12 in
township 20, north of range 3 east of the Willamette Merldian, in Washington
Territory, containing forty acres.
"The said Teow-away, or George Bird, is entitled to and may take immé-
diate possession of said land and occupy the same, and the United States
guarantees such possession, and will hold the tltle thereto in trust for the ex-
clusive use and beneflt of himself and his heirs so long as such occupancy shall
continue. ;
"Thls certificate is not assignable except to the United States, or to other
members of the tribe under such rules and régulations as may be hereafter
prescribed by the Seeretary of the Interior, and the said Teow-away, or George
Bird, is expressly prohibited from asslgning or attemptlng to assign the same,
and from selling or transferring the said land or disposing of the same, or
any Interest therein, to any person or persons whomsoever (except as above
named) under penalty of an entire forfeiture thereof.
"E. M. Marble, Acting Commissioner."
(3) That said George Bird availed himself of the privilège thus offered, and
accepted said assignment, and located upon said land as a permanent home,
and cleared and cultlvated said land, and built a dweliing house and other
improvements thereon.
(4) That on the 30th day of January, 1886, under the provisions of said treaty,
the United States executed and dellvered to said Bird a patent for said land
(and some additional land), which said patent is in the words and figures
following, to wlt :
"The United States of Ameriea, to Ail to Whom thèse Présents Shall Come,
Greeting :
"Whereas, by the slxth article of the treaty, concluded on the twenty-sixth
day of December, Anno Domini one thousand eight hundred and flfty-four,
between Isaac I. Stevens, governor and superintendent of Indian Affairs of
Washington Territory, on the part of the United States, and the chiefs, head-
men, and delegates of the Nisqually, Puyallup, Steilacoom, Squawksln, S'Ho-
manish, Stehchass, T'Peeksln, Squlatl, and Sa-heh-wamlsh trlhes and bands
of Indians, It is provided that the Président, at his discrétion, cause the whole
or any portion of the lands hereby reserved, or of such other land as may be
selected in lieu thereof, to be surveyed into lots, and assign the same to such
indlviduals or famllies as are vvilllng to avail themselves of the privilège, and
will locate on the same as a permanent home, on the same terms and subject
474 129 FEDERAL KEPORTER.
to the same régulations as are provided In the slxth article of the treaty with
tte Omahas, so far as the same may be applicable ;
"And. whereas, there has been deposited in the General Land Office of the
United States an order bearing date January 20th, 1886, from the Secretary
of the Interior, accoœpanied by a return dated October 30th, ISSi, from the
Office of Indlan Affairs, with a list approved October 23rd, 1884, by the Prés-
ident of the United States, showing the names of members of the Puyallup
band of Indians who hâve made sélections of land in accordance with the pro-
visions of sald treaties, in which lists the following tracts of land hâve been
designated as the sélection of Teo-away, or George Bird, the head of a faiiiily
consisting of himself and Mary, viz. : The southwest quarter of the northwest
quarter of section fifteen (40.00 acres), the soutbeast quarter of the northeast
quarter and the northeast quarter of the southeast quarter of section sixteen
(80.00 acres), in township twenty-one north, and the northeast quarter of the
southwest quarter of section twelve (40.00 acres), in township twenty, north
of range three east of the Willamette Merldlan, Washington Territory, con-
taining in the aggregate one hundred and sixty acres :
"Now know ye, that the United States of America, in considération of the
promises and in accordance with the direction of the Président of the United
States under the aforesaid sixth article of the treaty of the sixteenth day of
March, Anho Domini one thousand eight hundred and fifty-four, with the
Omaha Indians, has given and granted, and by thèse présents does give and
grant, unto the said Teo-away, or George Bird, as the head of the family as
aforesaid, and to his heirs, the tracts of land above described, but with the
stipulation contained In the said sixth article of the treaty with the Omaha
Indians, that the said tracts shall not be alienated or leased for a longer term
than two years, and shall be exempt from levy, sale or forfeiture, which con-
ditions shall continue in force uutil a state constitution embracing such lands
within its boundaries shall hâve been formed and the législature of the state
shall remove the restrictions, and no state législature shall reniove the restric-
tions without the consent of Oongress.
"To hâve and to hold the said tracts of land, with the appurtenances, unto
the said Teo-away, or George Bird, as the head of the family as aforesaid,
and to his heirs forever, with the stipulation aforesaid.
"In testimony whereof, I, Grever Cleveland, Président of the United States,
bave caused thèse letters to be made patent, and the seal of the gênerai land
office to be hereunto afflxed.
"Given under my band at the city of Washington, this thirtieth day of
January, in the year of our Lord, one thousand eight hundred and eighty-six,
and of the Independence of the United States the one hundred and tenth.
"By the Président: Grever Cleveland,
"S. W. Clark, By M. McKean, Secretary.
"R."
(5) That at ail times after the making of said assignment and the issuance
of said patent said Bird voluntarily took up, within the limlts of the United
States, and upon the lands in said patent described, his résidence, separate
and apart from any tribe of Indians, save as qualifled by paragraph 9 hereof,
and adopted the habits of clvilized llfe, and has at ail times since the issuiug
of sald patent continued to exercise habits of civilization within the county of
Pierce and state of Washington, and has at ail such times continued to occupy
and till a portion of the land thus assigned and patented to him.
(6) That on and prior to the 17th day of January, 1881, said George Bird
and one Mary Bird were husband and wife, and were residiug on the land
in said patent described, and that said Mary Bird is the "Mary" mentioned
in sald patent as a member of complainant's family. That said Mary Bird
died on or about the 15th day of August, 1887, and left her surviving two
sons, Joseph Winyer and Henry Winyer, who had been born to said Slary
Bird by marriage to a former husband. That said sons were the only surviv-
ing issue of said Mary Bird. That said Mary Bird was born of Indian par-
ents, and the father of said Joseph and Henry Winyer was an Indian. That
said Joseph married a full-blood Indian woman, and one Frank Winyer is the
issue Of said marriage. That thereafter the mother of said Frank died, and
BIKD V. TEKET. 475
sald Joseph then married SalUe Winyer, an Indian woman. That saîd Joseph
died while he was the husband of Sallie, and after the death of Mary Bird.
That sald Sallie has slnce died, and one Mary Charley and said Frank Win-
yer are now the heirs of said Joseph Winyer.
(7) That said Joseph Winyer and Henry Winyer were never members of
complainant's famlly, and they each reeeived assignnients of land upon said
réservation at the time complainant was awarded the assignment of land hère-
inbefore described.
(8) That said Bird has leased said land In said assignment and patent de-
scribed to one Frank Albert for a period of time less than two years, and for
a full and fair considération paid by said Albert to said Bird.
(9) That the défendant, Frank Terry, Is superintendent of the Puyallup In-
dian School, and agent o£ the Puyallup Indian réservation, occupied by allot-
tees of the Puyallup Indian Tribe, in which réservation are ineluded the lands
in said patent described ; and that as such agent it is his duty to perform such
duties, not inconsistent with law, as may be presoribed by the Président, Sec-
retary of the Interior, or Conimissioner of Indian Affalrs. Section 2058,
Eev. St.
(10) That under the act of Congress of March 3, 1893 (27 Stat. 633, c. 209),
and under the instructions and régulations of the Président of the United
States, Secretary of the Interior, and Commissloner of Indian AfCairs, the
Puyallup Indian Commissioners ascertalned, found, and determined that
George Bird was the owner of one-half of said land, that Henry Winyer waa
the owner of one-fourth thereof, that Sallie Winyer was the owner of one-
eighth thereof, and that Frank Winyer was the owner of one-eighth thereof.
That said Puyallup Indian Commissioners did not ascertain, flnd, or détermine
said ownership by or throngh any proceeding in any court, but arrîved at
said détermination after making such investigation as they could among the
Indians. That thls finding and détermination of the Puyallup Indian Com-
missioners was, on July 1, 189G, approved, and said ownership conflrmed ac-
cordingly, by the Secretary of the Interior.
(11) That certain rules and régulations hâve been adopted and promulgated
by the Secretary of the Interior and Commissloner of Indian Affairs regard-
ing the leasing by Indian allottees of allotted lands, which said rules and rég-
ulations are applicable to the Puyallup Indian réservation and the lands in
question. That among other régulations it is provided that ail leases shall
be submitted to and approved by the Secretary of the Interior, and that ail
rental money shall be paid to the Indian agent for distribution to the parties
found to be the owners by the said Puyallup Indian Commissioners; and it
Is further made the duty of the Indian agent to exclude, eject, and oust froin
any such allotted lands tenants or lessees refusing to comply with the afore-
said régulations.
(12) That the lease made by said Bird to sald Albert was made without com-
plying, and without any attempt on the part of either to comply, with the
foregoing rules and régulations. That the said agent has never consented to
the occupancy of said land by said lessee, Albert, or to his résidence or prés-
ence on said réservation. Said Bird claims the right to lease said land for
a period less than two years without the intervention of said Secretary of the
Interior. Indian agent, or other person. That the only reason why said Bird
Is unwilling to exécute a lease before said Indian agent and in accordance
with the foregoing niles and régulations is that he claims to be the sole owner
of the whole of said lands, and entltled to ail the rents and profits thereof,
and that said Secretary of the Interior and Indian agent elaim that under
said treaty, patent, law, and findings of said Puyallup Indian Commissioners
the said Bird is only the owner of a one-half interest in said land, and is
only entitled to one-half of the rents and profits thereof. If the rental money
falling due under said lease or under any lease made by said Bird comes into
the hands of said Indian agent, he will forthwith pay to said Henry Winyer,
Frank Winyer, and Mary Charley one-half thereof.
(13) That said Terry will, unless restrained by this court, eject and remove
said Frank Albert, or any other lessee or tenant of the complainant under any
lease, unless made in conformity with the foregoing rules and régulations.
That said land so leased by said Bird to said Albert is of great value, to wit,
476 129 FEDERAL RErORÏEït.
of the value of ten thousand dollars, and that, If said Terry is permitted to
evlct said Albert therefrom, the complalnant will tliereafter be unable to in-
duce any person to lease said premises directly from him. That complaiQant
Is an old man, aud unable, from his âge, to cultivate said land, and, if he is
thus prevented and hindered from leasing said land, its value will be largely
lest to complainant.
(14) That heretofore said George Blrd instltuted a suit In the superior court
of the State of Washington for the county of Pierce against Henry, Frank,
and Saille Winyer to détermine the ownership of said tract of land. That
said superior court Is and was a court of gênerai law and equity jurisdictlon.
That due service of process was niade upon each of said défendants, aud they
thereafter appeared in said suit by their attorney, and fully litigated therein
their said rights and claim to ownership of said land. That said superior
court held and adjudged that the said Blrd owned but a one-half interest iu
said land, and that said Winyers owned a one-half interest therein. That
thereupon said Blrd appealed said case to the Suprême Court of the state of
Washington, the highest court of said state to which said case could be ap-
pealed. That said case was duly argued before and presented to said court
by counsel for the respective parties. That after due hearing and considéra-
tion the said Suprême Court reversed the order of the superior court, aud
held and declded that said Wiuyers had no right, title, or interest in or to
said land. That said Sallie Winyer dled after the décision of said case by
said Suprême Court Said case is reported in 24 Wash., at page 269, 64 Pac.
178. Said case has never been appealed.
(15) That the Secretary of the Interior, Superintendent of Indian AfCairs,
and said Terry maintain that said state courts hâve and had no jurisdictlon
to détermine the issues betï^een said Blrd and said Winyers, for the reason
that the said land, the subject-matter of said suit, is and was allotted land
on an Indian réservation.
(16) Paragraphe 2 and 6 of the treaty with the Puyallups and other Indian
tribes made on December 26, 1854 (10 Stat. lir>2), are hereby referred to and
made a part of this statement of facts; article 6 of the treaty with the
Omahas, made March 16, 1854 (10 Stat 1043), is hereby referred to and made
a part of this statement of facts; that the act of Congress of February 8,
1887 (24 Stat 390, c. 119), is hereby referred to and made a part of this state-
ment of facts ; the act of the Législature of the state of Washington of March
22, 1890 (Laws 1889-1890, p. 499), is hereby referred to and made a part of
this statement of facts ; the act of Congress of March 3, 1893 (27 Stat 633,
c. 209), is hereby referred to and made a part of this statement of facts ; sec-
tion 4621, 1 Ballinger's Ann Codes & St of the state of Washington is hereby
referred to and made a part of this agreed statement of facts : that section
3 of the act of Congress of February 28, 1891 (26 Stat 794, c. 383), is hereby
referred to and made a part of this agreed statement of facts ; the act of Con-
gress of August 15, 1894 (28 Stat. 305, c. 290), is hereby referred to and made
a part of this statement of facts ; the act of June 7, 1897 (30 Stat 85, c. S), is
hereby referred to and made a part of this statement of facts; the act of
Congress of May 31, 1900 (31 Stat 229, c. 598), is hereby referred to and made
a part of this statement of facts ; the act of Congress of August 15, 1894 (28
Stat 286, c. 290), and more especially that part thereof found at page 305,
is hereby referred to and made a part of this statement of facts. And it is
hereby by both parties hereto asked and prayed that the court, upon the fore-
going agreed statement of facts, adjudge and détermine the rights of the par-
ties hereto, and construe, in so far as it is necessary in so determining, the
effect of the laws herein cited and referred to.
Ried & Meade, for complainant.
E. E. Cushman, Asst. U. S. Atty., for défendant.
HANFORD, District Judge. It is my opinion that the patent is-
sued by the United States government to the plaintiff, George Bird, is
not a meaningless or deceitful document, which conveys no estate to
the grantee, and I liold that it must be regarded and construed as a
BIRD V. TERKÏ. 477
bona fide and valid instrument, effective to fulfill the promise made
to the grantee named therein as one of the Indians concerned in the
treaty made by Gov. Stevens in the year 1854. By the treaty, Bird,
as the head of a family, was entitled to hâve the quantity of land
which the patent conveys allotted to hini in severalty as a permanent
home for himself and family, upon condition that he and the family
should occupy and cultivate the same; and by the treaty he was
promised not only the right to occupy and cultivate the land, but that
the right should be exclusive, and inheritable by his heirs. The es-
tate which the government promised to convey was not an absolute
fee-simple estate, but was limited, so that he could not alienale the
same without the consent of the state Législature and of Congress,
and the estate was defeasible in this: that it was subject to forfei-
ture if the allottee became a rover, and failed to occupy the land as a
home. The patent by plain and positive words conveys to Bird the
rights and the title which the treaty promised, and the grantee has
in good faith accepted the land and the patent, and by erecting a
dwelling upon the land and preparing a part of it for tillage, and by
making his home thereon, and actual occupancy and cultivation of the
land, he has fulfilled the conditions which entitle him to ail the rights
and benefits which the patent purports to convey to him. George
Bird, although an Indian, has also, by adopting and practicing the
habits of civilized life, and residing upon and cultivating the land
allotted to him, fulfilled the conditions which, under laws enacted by
Congress, entitle him to ail the rights, privilèges, and immunities of
citizenship. He is a citizen of the United States, and entitled, equally
with other citizens, to make a lawful use of his own property, and to
prosecute and défend in the courts of this state and in the courts of
the United States actions affecting his légal rights wlth respect to
property, and to make contracts, not prohibited by law, including
leases of the land in question for terms not exceeding two years.
Having a complète vested estate in the land, and being endowed with
the rights of citizenship, George Bird is under the protection of the
guaranties of the Constitution of the United States, so that neither
Congress nor the executive branch of the government can divest him
of his property, nor deny to him the equal protection of the laws
in a manner which would violate the constitutional rigtits of any other
citizen. He cannot be prohibited from submitting for adjudication
to the courts of this state disputed questions with respect to his own-
ership of the land conveyed by the patent, nor required to abide by the
décision of any commission or agent of the executive branch of the
government not authorized by law to exercise the judicial powers of
the government, which takes from him and gives to others a part of
the land which he and his family alone are entitled to possess, nor be
subjected to the control of government functionaries in the matter
of leasing his lands for a term not exceeding the time limit specified in
his patent.
The several propositions above stated lead me to the conclusion
that the heirs of Mary Bird, the deceased wife of George Bird, who are
not his heirs, nor members of his family, hâve no right to nor interest
in any part of the land conveyed by the patent, and that the agents of
478 129 FEDERAL REPOETEE.
the Interior Department cannot rightfully exercise any authority or
control in the matter of leasing the land or receiving the rent, and that
the décision of the Suprême Court of the state of Washington in the
case of Bird v. Winyer, 24 Wash. 269, 64 Pac. 178, was a lawful ad-
judication by a court of compétent jurisdiction of the questions which
were at issue in that case between Bird and the heirs of his deceased
wife.
Let a decree be entered in favor of the complainant, declaring him
to be entitled to the exclusive possession of the 160 acres of land de-
scribed in his complaint, and every part of it, and that the heirs of his
deceased wife hâve no interest therein, nor right to possession of any
part of it, and let an injunction issue against the défendant, Terry, for-
bidding him from molesting the plaintiff or his tenants in their occupa-
tion and use of the land, and from receiving any part of the rent for
the same.
In re CONGDON.
(District Court, D. Minnesota, Slxth Division, January 4, 1904.)
1. BANKR0PIOY — Genebal Assignment — Axlowance fob Services of As-
signée.
A gênerai assignment, procured from an Insolveut by the attorney for
the assignée, whieh résultée in no advantage to the estate, but rather In
détriment, is, not only in law but in fact, a fraud on the bankruptcy law,
and no allowance will be made by the court of bankruptcy to the assignée
for services rendered by himself or his attorney.
In Bankruptcy. On certificate from référée,
The following is the referee's certificate :
I, Ole J. Vaule, the référée In bankruptcy in charge of this proeeeding, do
certify as follows :
November 20, 1903, the above-named Darius H. Congdon was adjudicated
bankrupt, and December 5, 1903, Thomas P. Jumper was appointed trustée
of his estate In bankruptcy. October 13, 1903, the bankrupt made to the said
Thomas P. Jumper a gênerai assignment of ail his property for the beneflt
of ail his credltors, under what might probably be called a common-law deed
of assignment. December 5, 1903, Thomas P. Jumper flled his account as
assignée under said deed, and asked that he be credited with the following
Items :
Cash paid for Insurance $70 00
Cash paid for rent of store 40 00
Attorney fées due Morphy, Ewing & Bradford, for services rendered 85 00
Personal services 25 00
By an order of December 8, 1903, I allowed the items of $70 paid for Insur-
ance and $40 paid for store rent, but disallowed the items of .$85 attorney fées
and $25 for Personal services, and Thomas P. Jumper, being aggrieved thereby,
flled his pétition December 21, 1903, for the review of said order by the Judge.
The facts leading up to and connected with the assignment are as follows :
Shortly prior to October 31, 1903, the bankrupt, being financially embarrassed,
had made arrangements with his attorney, Henry Funkley, to go through
bankruptcy, and the only or main reason why his pétition in bankruptcy had
not been flled before this date was that the attorney had not had time to make
out the necessary papers. On the 13th of October, 1903, John M. Bradford,
one of the attorneys of Thomas P. Jumper, came to the store of the bankrupt,
at Blaekduck, and requested the baukrupt to give a deed of assignment. The
bankrupt told him he had decided to go through bankruptcy, but Mr. Bradford
insisted that it was mueh better for the bankrupt to make an assignment, that
m EE CONGDON. 479
the assignée would leave the bankrupt In possession of the store at a salarj'
of $50 or $60 per month, and that the creditors would furnlsh him with new
goods, as they migM be needed, and extend the time of payment. On the
strength of thèse représentations the deed of assignment was obtained. The
bankrupt was In possession of the store, as he had been before, but the new
goods that were promised were not fortJicoming, and ail that Mr. Jumper did
as assignée was to take eut a policy of insurance, pay a month's store rent,
and Write the bankrupt a few letters for money.
It is needless to say that a retail store of gênerai merchandise cannot be
kept going in the regular course of trade unless the stock is from time to time
replenished. Mr. Jumper is the crédit man of George R. Newell & Co., and
there is no question but that he could bave supplled the bankrupt with the nec-
essary goods, had he been so disposed. The agreement to leave the bankrupt
in the possession and control of the business at a salary, and to furnlsh him
with new goods, seems to me, under the circumstances of the case, to be so
unbusinesslike and unreasonable that it could never hâve been Intended to be
kept, but that it was simply used to induce the bankrupt to make the deed of
assignment, The deed itself Is also peculiar. It provides that the assignée
shall not be liable for "any wrongful acts of any agent by him appointed to
carry out said ti-ust." He does everything in this Une through agents. He
has the sélection of them, and, If he is not to be liable for their misdeeds,
the creditors bave poor protection. While it does not appear how soon the
pétition in bankruptcy would bave been flled, had not the assignée interfered,
it Is apparent that on account of this interférence much .valuable time has been
lost to this estate. Assignments hâve generally been considered frauds on the
bankruptcy law, and for that reason no compensation has beeu allowed either
the assignée or bis attorney for their services ; the interests of both being in
conflict with the provisions of the bankruptcy law. Collier on Bankruptcy
(4th Ed.) 464 ; In re Gutwillig, 1 Am. Bankr. Rep. 78, 90 Fed. 475. But see
Randolph v. Scruggs, 10 Am. Bankr. Rep. 1, 190 U. S. 533, 23 Sup. Ct. 710, 47
L. Ed. 1165. However, the assignée has quite generally been reimbursed for
actual expenses wisely and neeessarily incurred for the benefit of the estate,
where such reimbursement would not resuit in duplication of charges. But
it has also been held that, inasmuch as the assignée must know that his posi-
tion is in conflict with the scheme and purpose of the bankruptcy law, he
should not be allowed any disbursements incurred by him prior to the flling
of the pétition in bankruptcy. In re Gladding Co., 9 Am. Bankr. Rep. 171.
The décision by the référée in this case was affirmed by Judge Brown, of New
York, and the case is now on appeal before the Circuit Court of Appeals. See
Summers v. Abbott, 10 Am. Bankr. Rep. 254, note, 122 Fed. 36, 58 C. C. A. 352.
In the case last clted, the assignée under a common-law deed of assignment
took possession of a large stock of merchandise. He sold part of it at retail
and the balance in bulk. He spent about one month in the management of the
estate, and realized for the estate In cash over $40,000. Under thèse circum-
stances the Circuit Court of Appeals of this circuit held: "While an assign-
ment for the beneflt of creditors, executed within the four-months period, Is
an act of bankruptcy, yet, if honestly made for the purpose of applying ail
the property of the assigner to the payment of his debts, the assignée, who
accepts the trust In good faith and exécutes it Intelligently, successfully, and
honestly, is entitled, upon turning over the proceeds of the sale of property to
the trustée in bankruptcy or his assignors, to be paid a falr and reasonable
compensation for his services and those of his attorneys." But In the case
at bar the assignée acted neither "intelligently" nor "successfully," and I
fail to see how he could hâve acted In good faith. In the Summers Case the
court said (page 269, 10 Am. Bankr. Rep., page 40, 122 Fed., and page 356, 58 C.
C. A.) : "To prevent misapprehension, it is proper to say that this case has
none of the odlous features about it that sometimes crop out in cases where
insolvents make deeds of assignment for the professed beneflt of their creditors,
but which are in fact made to embarrass and defraud them, and where the as-
signée is a wllling instrument of the fraudulent debtors. In such cases, ac-
cording to an old and well-settled priuciple, quite independent of the bankrupt
act, neither the assignée nor his attorney is entitled to any compeusîition for
their services out of the fraud."
480 129 PEDBKAL REPORTEU.
It seems to me, that In the case at bar the assignmeut was a fraud on tlie
bankrupt act (Act July 1, 1898, c. 541, SO Stat. 544 [U. S. Ooinp. St 1901, p. 3418]),
not only in law, but In fact From their relation wlth Mr. Congdon, the as-
signée and his attorney must bave known that bankruptcy Was inévitable, and
that they were dolng the estate only damage. As between the attorney and
hls clients, $85 for his expenses and trouble in gôing to Blackduck is no doubt
reasonable ; but the amount should, in my opinion, not be saddled upon the
estate in bankruptcy slmply because the attorney was Ingénions enough to
procure a deed of assignaient. On the strength of the Summers Case the pro-
curement of deeds of assignaient bas become an industry to be guarded
against. I enclose herewith the assignee's account (with a copy of the deed
attached), my order thereon, the pétition for review, and the évidence.
John M. Bradford, for assignée.
LOCHRENj District Judge. For the reasons stated by the référée,
his décision is in ail things affirmed.
EMPIRE STATE CATTLB CO. et al. v. ATCHISON, T. & S. F. ET. CO.
MINNESOTA & D. CATTLE CO. v. SAME.
(Circuit Court, D. Kansas, First Division. Aprll 2, 1904.)
Nos. 8,155, 8,157.
1. Caebiees— Action foe Injukt to Pboperty in SniPMBNT— Pleading.
In an action against a railroad company to recover damages for an
alleged violation of duty as a common carrier, plaintiff is not required to
plead or prove the written contract under whlch his shlpment was made,
which, if relied on by défendant, is a matter of défense.
On Motions by Défendant to Require Plaintiffs to Amend Their
Pétitions.
Botsford, Deatherage & Young and R. E. Bail, for plaintiffs.
A. A. Hurd, for détendant.
POLLOCK, District Judge. The above actions are brought by
plaintiffs to recover damages from défendant railway company, al-
leged to hâve been sustained by plaintiffs in the shipment of cattle
over the defendant's line of railway during the flood of last year in
the Kaw river. The pétitions filed by plaintift's déclare upon a viola-
tion of defendant's duty as a common carrier for hire. A motion
by défendant company has been interposed in each case, requiring
plaintiffs to amend their pétition by stating whether the contracts of
shipment of the cattle mentioned in said pétition were in writing or
oral, and, if said contracts were in writing, that plaintiffs be required
to attach a copy or copies thereof to said pétitions, in order that the
défendant may be fully advised as to the terms and conditions upon
which said shipments of cattle were made, the destination of same,
and the route, if any, agreed upon by the terms of such contracts.
That contracts for shipment of the cattle were entered into between
the parties, and that such contracts are in writing and in the possession
of plaintiffs, was admitted by counsel for plaintiffs in the oral argu-
ment of this motion. The question is, should the court, by its order.
FKOST & ADAMS V. SALTON8TALL, 481
require the plaintifïs to set forth and déclare upon such written con-
tracts ?
Counsel for plaintiffs contend their actions are in form ex delicto,
and that they are not required by the rules of pleading to rely upon
or set forth the contracts, if any exist, between the parties to the action.
Counsel for défendant contends, in the absence of a direction from
Oongress, the practice adopted and followed by the state courts of
this State under the Code must control. This latter contention I think
correct. The common-law forms of action are, by provision of the
Code, expressly abolished. AU a plaintiff is required to do in plead-
ing under the Code is to state the facts constituting his cause of ac-
tion in plain and concise language, without répétition. It is no con-
cern of the pleader, under the Code of this state, whether the facts
constituting his cause of action form a cause of action which at the com-
mon law would be denominated ex delicto or ex contractu, or both
in one ; but the settlement of this contention does not, in my judgment,
settle the question under considération. I do not find the Suprême
Court of this state to hâve ruled upon the précise question under con-
sidération hère, and no authoritative décision of that court is cited by
counsel. The exact question, in my judgment, is, admitting a contract
of shipment between the parties, in writing, to exist, and in the posses-
sion of plaintiffs, as was admitted at the oral argument, must the plain-
tiffs plead and prove such contracts, as a part of their case, or is
such contract a matter of défense to the carrier? Upon investiga-
tion of this subject, I find the précise question to bave been passed
upon by the Court of Appeals for this circuit in Southern Pacific Com-
pany v. Arnett, m Fed. 849, 50 C. C. A. 17. In that case, Judge
Thayer, in delivering the opinion of the court, says:
"A spécial contract, when exacted by a carrier, is a défensive weapon to
be made use of by the carrier when sued by the shlpper for any alleged der-
ellction of duty agalnst which It was designed to afford protection."
Upon authority of that case, controUing hère, the motion will be over-
ruled.
FROST & ADAMS v. SALTONSTALL, Collector.
(Circuit Court, D. Massachusetts. November 12, 1887.)
No. 2,892.
1. CUSTOMS DDTIES— PeOTEST— TiMELINESS— HotlDAYS.
Notice was posted in a customhotise that it would be closed June 17th
— a holiday observed by local custom, but not established by law. Cer-
tain importers, having notice of the closing of the customhouse on that
day, which was the tenth day after the liquidation of their entry, flled a
protest on the day foUowing. Held, that the protest was flled in accord-
ance with the requlrements of section 2931, Rev. St., providing that pro-
tests shall be made "within ten days after the ascertainment and liqui-
dation of the duties."
At Law. Action to recover excessive duties.
This action was brought by Frost & Adams, importers, agalnst Leverett,
Saltonstall, collector of customs at the port of Boston, to recover excessivft
duties which had been paid under protest The entry in question was liqui'
129 F.— 31
iS2 129 FEDERAL EBPORTEU.
dated June 7, 1887, but the Importers dld not flle thelr protest with the col-
lecter untll June 18th. The customliouse, however, was closed on June ITth,
In célébration of Bunker Hill day, whlch, It appeared, was not a holiday es-
tablished, but a local one observed In Boston and vlclnity In accordance wlth
a long-standing custom. The importers contended tbat, as June 17th was not
a légal holiday, the collecter had no right to close the customhouse ou that
day, and that the protest mlght be flied on the following day, the 18th, and
yet satlsfy the requlrements of section 2931, Rev. St., where it is provlded that
protests shall be made to the collector In writing "within ten days after the
ascertalnment and liquidation of the duties by the proper officers of the cus-
toms." Note Shefer v. Magone (C. 0.) 47 Fed. 872.
On appeal to the Secretary of the Treasury in accordance with said section
2931, it was decided, June 28, 1887, that the protest was not in time; the fol-
lowing language being used in the secretary's letter to the collector:
"It appears from your report that the entry of the merchandise in question
was llquldated on the 7th instant, whlle the protest and appeal were not
lodged until the 18th Instant, more than ten days after the date of liquida-
tion. The department must therefore décline to entertain the appeal. The
claim of the appellants that the protest should be considered as flIed in tlme
because the customhouse was closed on the 17th of June, the tenth day after
liquidation, cannot be allowed, inasmuch as it has been invariably held by
the Department (see T. D. 7,858) that the ten days prescribed by section 2931
of the Revised Statutes Include Sundays and holidays; and, besides, It is not
understood that any légal authorlty existed for closing the eiistomhouse on
Baid date."
The Importers thereupon brought suit agalnst the collector, settlng forth
In their déclaration that they had filed wlth the défendant a "due and tlmely"
protest In writing, and the following motion was entered In their behalf :
"And now cornes the plaintiff, and makes a motion that the protest per
steamship Pavonia, mentloned In the second item of the blll of partieulars,
as filed June 18, 1887, may be adjudged to hâve been filed In accordance with
the requlrements of section 2931 of the Eevised Statutes of the United States.
• * •"
At the trial of the case the plalntifC's counsel testlfled that he had ealled
at the customhouse on June 16th, and there found notice posted that it would
be closed to business on the day following. It was argued that, if the collect-
er mlght properly close the customhouse on one day, he mlght close it for
10 days or more, and thus entirely dcfeat the importera' rigbts.
Charles P. Searle, for importers.
T. H. Talbot, Asst. U. S. Atty.
COLT, Circuit Judge. At the close of the argument the court ruled
that this notice furnished a good excuse for not filing a protest June
17th, and made a protest filed on the 18th valid.
Motion allowed, and judgment entered for the plaintiff.
PRICE A HART v. T. J. ELLIS & CO.
(Circuit Court, E. D. Arkansas, W. D. April 11, 1904)
No. 5,265.
1. RiuovAL or Cattsbs— Amount in Dispute— Cotjnteeclaim.
Where the défendant In an action by a nonresident in a state court te
recover a sum less than $2,000 files a counterclalm by whlch he seeks to
recover a sum greater than $2,000, the cause is removable by the plain-
tiff at or before the tlme he is required to plead to such counterclalm.
1 h See Eemoval of Causes, yol. 42, Cent. Dlg. § 131.
PBICE & HART T. T. J. ELLIS & CO. éU'à
On Motion to Remand to State Court.
N. W. Norton, Baldy Vinson, and Metcalf & Metcalf, for plaintiff.
Wells, Williamson & Cotham and W. S. & F. L. McCain, for défend-
ants.
TRIEBER, District Judge. The only question involved in this mo-
tion to remand is whether the plaintifï, who is a nonresident of the state,
and who has instituted an action at law in the state court against a resi-
den of this state to recover a sum of money not exceeding $2,000, can
remove the cause to a national court when the défendant tiled with his
answer denying the plaintifif's demand a counterclaim by which he
seeks to recover from the plaintifï a judgment for more than $2,000,
exclusive of interest and costs. The question has never been authori-
tatively settled by the décision of any court whose judgment is con-
clusive on this court. Neither the Suprême Court nor the Circuit
Court of Appeals for this (the eighth) circuit has ever passed upon it
directly, nor has any other fédéral appellate court ever determined that
question, except the Circuit Court of Appeals for the Fifth Circuit, in
Waco Hardware Co. v. Michigan Stove Co., 91 Fed. 289, 33 C. C. A.
511. West V. Aurora City, 6 Wall. 139, 18 L. Ed. 819, has been fre-
quently cited by some of the courts as a case in point, but that case is
inapplicable to the acts of Congress now in force, as the removal in
that case was sought to be made under the provisions of the judiciary
act of 1789 (i Stat. 79), digested as the first subdivision of section 629,
Rev. St. U. S., which has been repealed or superseded by the act of
March 3, 1875 (18 Stat. 470), and the act of March 3, 1887, as cor-
rected by the act of August 13, 1888 (25 Stat. 433; U. S. Comp. St.
1901, p. 509). The act of 1789, construed by the court in West v.
Aurora City, limited the right of removal to a défendant who had
not submitted himself to the jurisdiction of the state court, except
to enter his appearance for the purpose of removing the case. The
chief justice, who delivered the opinion of the court in that case, said :
"And it [the right to remove] is given only to a défendant who promptiy
avails himself of the right at the time of appearance by declinlng to plead and
filing his pétition for removal."
Waco Hardware Co. v. Michigan Stove Co., supra, while no doubt
a binding authority on the Circuit Courts of the United States held
within the Fifth Circuit, has no such efïect on this court, although en-
titled to the highest considération. The décision of that case is based
solely on what was decided in West v. Aurora City, and, as that case
construed an act of Congress différent from those now in force, it has
no application to causes arising under the présent acts. The acts of
Congress now in force regulating the removal of causes from a state
to a national court contain no such restrictions as did the act of 1789.
A défendant now may plead or answer in the state court, and still re-
move the cause, if the facts otherwise authorize a removal, provided he
files his pétition and bond for removal at or before the time he is, by
the laws of the state or the rules of the court in which the action is
pending, required to plead. Brisenden v. Chamberlain (C. C.) 53
Fed. 307; Champlain Constr. Co. v. O'Brien (C. C.) 104 Fed. 930;
Sidway v. Missouri, etc., Co. (C. C.) 116 Fed. 381.
484 120 FEDERAL KBl'OllTEi:.
The décisions of the Circuit Courts of the United States on this
question are quite numerous, but unfortunately so conflicting that the
only aid they afford is the reasoning of the différent judges who decided
them. In this the Eighth Circuit we find four cases reported in which
this question was in some shape before the Circuit Courts for déter-
mination. Carson & Rand Lumber Co. v. Holtzclaw (C. C.) 39 Fed.
578, decided by Judge Thayer; Bennett v. Devine (C. C.) 45 Fed.
705, decided by Judge Shiras; Lee v. Continental Ins. Co. (C. C.)
74 Fed. 424, decided by Judge Adams ; and McKown v. Kansas & T.
Coal Co. (C. C.) 105 Fed. 657, decided by Judge Rogers. A careful
examination of thèse cases shows that the only one in which the facts
were identical with those in the case at bar is Carson & Rand Lumber
Co. V. Holt2claw, and there Judge Thayer held that the cause was re-
movable under the acts of Congress now in force. In Lee v. Conti-
nental Ins. Co., the statutes of Utah, in a court of which state the action
was pending, made it obligatory on the défendant to set up his counter-
claim in the same action, or be forever afterward prohibited from main-
taining an action against the plaintiff therefor. But the learned judge,
in delivering his opinion, took occasion to express his views on this
subject regardless of the Utah statute, and reached the same conclusion
as that expressed by Judge Thayer in Carson & Rand Lumber Co. v.
Holtzclaw, supra. Judge Adams thus states his conclusions :
"There is a contradiction of opinion, independent of such législation as is
found in the statute of Utah, with respect to the question whether the amount
involved in an asserted counterclaim against a cause of action shall or may be
eonsidered In determining the jurisdiction of fédéral courts. Opinions of very
eminent judges and courts are found on either side of the question, and as a
new question it would be somewhat difflcult to détermine it, based simply on
the decided cases. However, my inclination is to adopt the conclusion that the
amount involved in a counterclaim is a part of the subjeet-matter iu dispute,
within the meaning of the act of Congress, conferrlng jurisdiction upon the
fédéral court ; and that inclination is strongly fortifled in the case at bar by
the terms of the Utah statute."
In Bennett v. Devine, decided by Judge Shiras, the cause was sought
to be removed by the original défendant, who was sued for $1,950 only,
but filed a counterclaim to recover $3,000, and it was held that it could
not be removed upon the ground, as stated by the learned judge, that :
"So far as the counterclaim is concerned, the party seeking the removal is
the plaintiff therein, and the right of removal does not exist in favor of a
plaintiff, or a party who bas voluntarily invoked the jurisdiction of the state
court."
In this case the removal was made by the original plaintiff, who be-
came the défendant in the counterclaim.
In McKown v. Kansas & T. Coal Co., decided by Judge Rogers, the
facts were like those in Bennett v. Devine. The removal was sought
to be made by the original défendant, who became the plaintiff in a
counterclaim, and, the right to remove being limited to the défendant,
the cause was properly remanded.
That the défendant who files a counterclaim becomes, as to the
counterclaim, a plaintiff, under the statute of Arkansas, and the original
plaintiff becomes the défendant, has been fully determined by the court
of last resort of that state in Heer Dry Goods Co. v. Shaffer, 51 Aïk.
PRIOE A HABT T. T. 3. ELLIS & CO. 485
368, II S. W. 517. In that case an action at law had been instituted
by the plaintiff to recover a sum of money from the défendant. The
défendant, with his answer, denying the indebtedness alleged in the
complaint, pleaded a set-off and counterclaim, the correctness of which
was verified by the oath of the défendant. The plaintiff filed no reply
to this set-off, but dismissed his original action. The défendant there-
upon demanded judgment on his counterclaim, which was granted by
the court without any other proof than the verified account filed there-
with. Upon appeal to the Suprême Court that court held :
"But a set-off Is a cross-elaim for money by the défendant, and must be a
cause of action arising upon contract, or ascertained by the décision of a court.
The answer which sets it up must state facts which constitute a cause of ac-
tion against the plaintiff, and its sufflcieney is governed by the same rules that
would apply to the complaint if the défendant had sued the plaintiff. The
plaintiff can reply to it, denying each allégation setting up the set-off, and
alleging any new matter not inconsistent with the complaint, constituting a
défense. If he falls to do so, every material allégation of the answer consti-
tuting the set-off, except as to value or amount of damages, is taken as true.
If he dismisses his action, or fails to appear, the défendant can proseeute his
set-off to judgment. So in every respect it is essentially a cross-action, in
which the relation of the parties in the original action is reversed, and the
défendant Is plaintiff, and vice versa." 51 Ark. 370, 11 S. W. 518.
Cases decided by the Circuit Courts in circuits other than the Eighth,
in which the right of removal in cases like this was sustained, are
Clarkson v. Manson (C. C.) 4 Fed. 257, decided by Judge Blatchford,
afterwards one of the justices of the Suprême Court; and Walcott v.
Watson (C. C.) 46 Fed. 529. Cases, although not direct in point, yet
applicable by analogy, are Lovell v. Cragin, 136 U. S. 130, 10 Sup.
Ct. 1024, 34 L. Ed. 372, and Block v. Darling, 140 U. S. 234, 11 Sup.
Ct. 832, 35 L. Ed. 476. In both of thèse actions the court was called
upon to détermine its jurisdiction on appeal and writ of error in rela-
tion to the amounts involved. In the first case it was sought to dis-
miss the appeal upon the ground that the amount involved was not
sufficient to give that court jurisdiction, as it did not exceed $5,000.
The decree appealed from was for $4,830.64, but the cross-bill of appel-
lant, which had been dismissed by the court below, claimed a decree
in behalf of the original défendant for a greater sum than $5,000, and
it was held that :
"When the matter set up In a cross-bill is directly responsive to the aver-
ments in the bill, and Is directly connected with the transactions which are
set up in the bill as the gravamen of the plaintiff's case, the amount claimed
In the cross-blU may be taken Into considération in determining the jurisdic-
tion of this court on appeal from a decree on the bill."
In Block V. Darling it was held :
"Where, In an action for the recovery of a money demand, a counterclaim
of the défendant exceeding $5,000 Is entirely disallowed, and judgment ren-
dered for the plaintiff on his clalm, this court bas jurisdiction of the writ of
error sued out by the défendant without regard to the amount of plaintiff's
judgment."
While, under the laws of this state, a défendant is not compelled
to set up his counterclaim in that action, but may maintain a separate
suit thereon, he has the right to do so, and, as determined by the
highest court of the state, it thereupon becomes "in every respect a
cross-action, with the parties reversed." There is no reason why
486 129 FEDERAL KEPOETBK.
a nonresident tlius involuntarily made a party défendant in an action
in which judgment for more than $2,000, exclusive of interest and
costs, is denianded and can be rendered against him should be deprived
of his right to remove the cause to a national tribunal, if lie so elects.
It is true, he selected the state court as the forum in which to litigate
his cause of action when he instituted the suit originally, but, as his
claim for which he instituted that suit did not exceed in value the
sum of $2,000, exclusive of interest and costs, he had no choice in
the sélection of the forum, for that was the only court which had
jurisdiction of the subject-matter. It was the filing of the counter-
claim alone which gave him the right of élection, and, if he avails
himself of this privilège within the time prescribed by the statute,
"at or before the time he is required by the laws of the state or the
rules of the court to answer or plead," which can only be done after
the filing of the counterclaim, and which must be done "on or before
the calling of the cause for trial" (section 5736, Sandell's & H. Digest
of Statutes of Arkansas), I can conceive of no substantial reason why
he should not be entitled to remove the same. Thus, in Powers v.
Chesapeake & Ohio Ry. Co., 169 U. S. 92, 18 Sup. Ct. 264, 42 L. Ed.
673, it was held that :
"An action not removable from a state court by reason of joinder as de-
fendants of citizens of the same state as plaintiff may, upon a subséquent dis-
contlnuanee In that court by the plaintiff against the résident défendants,
making the action for the flrst time a removable one by reason of diverse citi-
zenship of the parties, be removed by the défendant upon a pétition filed Im-
mediately after such discontinuance, and before talcing any other steps in dé-
fense of the action."
Mr. Justice Gray, in delivering the opinion of the court in that case,
says:
"The reasonable construction of the aet of Congress, and the only one which
wlll prevent the right of removal, to which the statute déclares the party to
be entitled, from being defeated by circumstances wholly beyond his control,
Is to hold that the Incldental provision as to the time must, when necessary
to earry out the purposes of the statute, yield to the principal enactment as to
the right; and to consider the statute as, in intention and efCect, permitting
and requiring the défendant to file a pétition for removal as soon as the action
assumes the shape of a removable case in the court in which it was brought."
This excerpt applies with great force to the facts in this case. See,
also, Jones v. Mosher, 107 Fed. 651, 46 C. C. A. 471. Had the de-
fendants instituted an original action against the plaintiiïs on their
counterclaim, the cause would clearly hâve been removable, and it
was the filing of the counterclaim, although a suit was then pending
between the parties, which brought the cause within the terms of the
statutes regulating removals of causes from the state to the national
courts. The pétition for removal in this case was filed by the plain-
tiffs, who became défendants in the cross-action, and were nonresi-
dents of this state, as soon as the facts necessary to confer jurisdic-
tion on this court were made a part of the record, and within the time
they were required by the laws of this state to file a reply, and this
was the first opportunity they had to elect one of the two forums in
which to try their case. Before that time no right of élection existed,
and, of course, they could exercise none.
The motion to remand is overruled.
lEGAKDEN V. LE MAKCHEI^ é87
TBGARDEN V. LE MARCHBL.
(Circuit Court, W. D. Arkansas, Harrison Division. April 11, 1904.)
1. EjECTMENT— Equitable Defeî?se in Fedebal Coukt.
In an action o£ ejectment in a fédéral court, the défendant cannot set
up an équitable tltle to defeat the légal title by impeaching a patent from
the United States, and this rule is not affected by a state statute under
which such défense would be permissible.
2. Same— Limitation.
Limitation cannot begin to run against an action of ejectment in a
fédéral court prior to the time when the patent for the land under which
plaintifC claims was issued by the United States.
3. Same— Action by Patentée— Claim foe Impeovbments Made besoee Issu-
ANCE or Patent.
A state statute glving a défendant in ejectment the right to recover the
value of improvements made by him In good faith under color of title
cannot be applied in a case in which the plaintiff claims under a patent
issued by the United States after the Improvements were made, since the
power of the United States to dispose of its public lands Is absolute, and
the right of its grantee to possession on receiving the légal title cannot
be obstructed or affected by any claim made under a law of the state.
Action in Ejectment. On demurrer to answer.
Seawell & Seawell, for plaintiff.
J. C. Floyd, S. W. Wood, and G. J. Crump, for défendant
ROGERS, District Judge. The plaintiff brought his suit in eject-
ment in the usual form, and under the act of March 5, 1875, found in
Sand. & H. Dig. §§ 2578-2582, inclusive, stated such facts as show
a prima facie title in himself to the land in controversy. They are,
in substance, as follows: William Goodall in his lifetime entered the
land in controversy, and shortly afterwards died, leaving certain heirs
at law, who had conveyed ail their title to the property to the plaintiff.
After such conveyance was made, a patent for thèse lands was issued,
on the 27th of May, 1903, to William Goodall, in Ueu of one bearing
date July l, 1850, which latter patent misdescribed the land, and
copies of said deeds and patent are attached as exhibits to the com-
plaint, as the statute required. Plaintiff also claims title by virtue of a
tax deed, which, for the purposes of this demurrer, need not be no-
ticed. The défendant answered in five counts. A gênerai demurrer
was interposed to each count in the answer. The first count in the
answer expressly admits possession, and then dénies that such pos-
session is unlawful, and then dénies that plaintiff is entitled to posses-
sion as alleged, and then proceeds to set forth the reasons why the
plaintiff is not entitled to possession; the facts stated being in the
nature of an équitable défense based upon a homestead entry of the
same land by the défendant on the 28th of December, 1893. It then
allèges, in substance, that this defendant's homestead entry had been
canceled by the fraudulent conduct of Goodall, by the procurement of
fraudulent affidavits to the effect that Goodall had entered the -land,
and that other and différent lands had been patented to said Goodall,
whereby he procured the General Land Office to cancel the defendant's
homestead entry, and procured the patent exhibited with the complaint
488 129 FEDEEAL EEPOKTER.
to be issued to Goodall's heirs, which représentations, the défendant al-
lèges, are false and fraudulent, and that the said Goodall had never,
in point of fact, entered the land in controversy, never had possession
thereof, nor had any claim, right, title, or interest in the same, and
that the procurement of the issuance of said patent was a fraud both
on the United States and on the défendant, and that the plaintifï, by
virtue of his patent, has no right or title whatever to said land.
It will be observed that the défendant first dénies that his posses-
sion is unlawful. That déniai is simply a conclusion of law, and pré-
sents no issue. Keith v. Freeman, 43 Ark. 297. He then dénies that
the plaintifï is entitled to the possession of the same. The demurrer
concèdes this déniai to be true, and, if the déniai stood alone, the de-
murrer should be overruled on that ground; but the answer con-
tinues, and sets out the reasons why he is not entitled to the posses-
sion, and those reasons are in the nature of an équitable défense, and
the gênerai déniai that the plaintiff is entitled to the possession must
be construed in connection with the équitable matters set up in the
same answer, and which constitute the facts upon which the défendant
relies for defeating plaintifï's right to the possession.
The question therefore arises whether or not, in the fédéral courts,
a défendant in ejectment may set up an équitable title to defeat a légal
cause of action. This question has been settled over and over again
by the Suprême Court of the United States. In Gibson v. Choteau,
13 Wall. 102, 20 L. Ed. 534, the court say:
"In the fédéral courts, where the distinction between légal and équitable
proceedings is strlctly maintained, and remédies aflforded by law and equity
are separately pursued, the action of ejectment can only be sustained upon
the possession by the plaintiff of the légal title. For the enforcement of
équitable rights, however clear, distinct équitable proceedings must be in-
stituted. The patent is the instrument which, under the laws of Oongress,
passes the title of the United States. It is the government conveyance. If
other parties possess equities superior to those of the patentée, upon which
the patent issued, a court of equity will, upon proper proceedings, enforce
such equities by compelling a transfer of the légal title, or enjoinlng its en-
forcement, or canceling the patent. But in the action of ejectment in the
fédéral courts the légal title must prevail, and the patent, when regular on
Its face, is conclusive évidence of the title."
Johnson v. Towsley, 13 Wall. 73, 20 L. Ed. 485 ; Moore v. Robbins,
96 U. S. 530, 24 L. Ed. 848; Smelting Co. v, Kemp, 104 U. S. 636, 26
L. Ed. 875. _
The principle hère decided is conclusive against the sufficiency of
the first count in the answer, and the demurrer as to that count must
be sustained. I hâve not overlooked the fact that, under the statutes
of Arkansas (Sand. & H. Dig. § 2574), provision is made for main-
taining ejectment upon équitable titles. This class of state statutes,
however, has no force in the United States courts, where proceedings
in law and equity are kept distinct. Gibson v. Choteau, 13 Wall. 102,
20 L. Ed. 534.
The second count in the answer simply pleads the statute of limita-
tions. ■ The plaintiff, in his complaint, allèges that he rests his claim
upon a patent issued by the United States, May 27, 1903, for the land
in controversy ; and a copy of that patent to William Goodall and his
heirs, together with a deed from his heirs, is set foith as an exhibit to
TEGAKDBN V, LE MAKCHEL. 489
the complainL No exceptions are filed to the exhibits. It is true that
the demurrer does not reach the exhibits. PercifuU v. Platt, 36 Ark.
456. But inasmuch as the patent is conclusive évidence of the légal
title in the person to whom it was issued, it is clear and conclusive,
in a suit in ejectment, that no statute of Hmitations could begin to run
until the patent itself was issued. The reason for this is that until the
patent was issued the légal title was in the government of the United
States, and, the légal title being in the United States, the statute does
not run against the United States. It is obvious therefore that the
statute of limitations in this case cannot avail the défendant. But
the question arises whether or not that question can be raised by the
demurrer. The demurrer itself admits that the défendant bas been
"in the actual, open, notorious, adverse possession of said land, claim-
ing to be the owner thereof, holding the same under color of title, as
set forth in paragraph No. i of this answer, for more than seven
years next preceding the bringing of the suit by the plaintifï herein."
Paragraph i of the answer sets up an équitable défense under a home-
stead entry which bas been canceled, and, being canceled, of course,
could not constitute color of title. Moreover, it has appeared that,
if ail the facts set forth in paragraph i were taken to be true, they
could not avail the défendant in a suit in ejectment, but that bis rights,
if he should hâve any under the équitable défense set up, are to be
enforced in a court of equity. His holding open, notorious, actual,
adverse possession of said land, claiming to be the owner thereof under
the canceled homestead entry, for seven years, would be no défense
at ail to the action, because during ail that period, until the patent
was issued, the légal title was in the United States. There is no
déniai in any of the counts of the answer that the patent was issued
on the day stated in the complaint. The plaintifï's cause of action,
therefore, arose on that day. It could not arise any earlier than that,
because, as stated, in the fédéral courts the action of ejectment can
only be maintained upon the légal title, and the government did not
part with the légal title until it issued the patent, and the statute
therefore did not begin to run until the patent was issued. Simmons
V. Ogle, 105 U. S. 271, 26 L. Ed. 1087; Gibson v. Choteau, 13 Wall. 93,
20 L. Ed. 534; Nichols v. Counsel, 51 Ark. 27, 9 S. W. 305, 14 Am.
St. Rep. 20.
The same observations which bave been made to the second count
are equally applicable to the third, and the demurrer to each of said
counts (i. e., the second and third) must be sustained.
The fourth count in the answer allèges facts which, if true, would de-
feat plaintifï's title under the tax deed. But if plaintifï's tax deed is
void, still he is entitled to recover, as the pleadings now stand, under
his patent; and therefore the facts stated, which, if true, vitiate the
tax deed, do not constitute any défense to plaintifï's suit in ejectment
based on the patent.
It is not necessary to pass on the question as to whether the land was
subject to taxation, but see Witherspoon v. Duncan, 4 Wall. 210, 18 L.
Ed. 339. The demurrer to the fourth paragraph must be sustained.
The fifth count in the answer attempts to set up facts which, if true,
would ordinarily entitle défendant to a judgment for improvements
490 129 FBDHEAL BEPOKTEK.
under sections 2590-2591, Sand. & H. Dig. The count îs bad for fail-
ure to show that thé défendant held under color of title, as the statute
prescribes. It is not necessary to décide whether defendant's entry
of the land under the homestead law, if the facts relative thereto were
properly alleged, would constitute color of title. In Wirth v. Bran-
son, 98 U. S. 121, 25 L,. Ed. 86, it is held :
"The rule is well settled, by a long course of décisions, that when public
lands bave been surveyed and placed In the market, or otherwise opened to
prlvate acquisition, a person who compiles with ail the requisites necessary
to entitie him to a patent in a partieular lot or tract is to be regarded as the
équitable owner thereof, and the land is no longer open to location. Tlie
public falth has become pledged to him, and any subséquent grant of the same
land to another party is vold, uniess the flrst location or entry be vacated and
set aside. This was laid down as a principle in the case of Lytle et al. v.
State of Arkansas et al., 9 How. 314 [13 L. Ed. 153], and has ever since been
adhered to. See Stark v. Starr, 6 Wall. 402 [18 L. Ed. 925]. Subséquent
cases which hâve seemed to be in confliet with thèse hâve been distinguished
from them by the fact that something remained to be done by the claimant to
entltle him to a patent, sueh as the payment of the price, the payment of the
fées of surveying, or the like. The proper distinctions on the subject are so
fully stated in the case of Stark v. Starr, supra, Frisbie v. Whltney, 9 Wall.
187 [19 h. Ed. 668], the Yosemlte Valley Case, 15 Wall. 77 [21 L. Ed. 82].
Rallway Company v. McShane, 22 Wall. 444 [22 L. Ed. 747], and Shepley et
al. V. Cowen et al., 91 U. S. 330 [23 L. Ed. 424], that it would be supereroga-
tion to go over the subject again."
The real question, it seems to me, as to this count in the answer, is
as to whether the statute referred to above, providing for the assess-
ment of improvements made on land held in good faith under color of
title, has any application at ail to a case where the improvements are
made on land the légal title to which is in the United States. I am not
aware that there is any décision on the précise point, but I think the
question is settled on principle in a number of cases. In Gibson v.
Choteau, 13 Wall., at pages 99, 100, 20 L. Ed. 534, the court said:
"With respect to the public domain, the Constitution vests in Congress the
power of disposition and of making ail needful rules and régulations. That
power is subject to no limitations. Congress bas the absolute right to pre-
scrlbe the times, the conditions, and the mode of transferring this property,
or any part of it, and to deslgnate the persons to whom the transfer shall be
made. No state législation can interfère with this right or embarrass Its
exercise, and, to prevent the possibllity of any attempted interférence with It,
a provision has been usually Inserted in the compacts by which new states
hâve been admitted into the Union that such interférence with the prlmary
disposai of the soil of the United States shall never be made. Such provision
was inserted in the act admitting Missouri, and it is embodied in the présent
Constitution, with the further clause that the Législature shall also not In-
terfère 'with any régulation that Congress may find necessary for securlng
the title in such soil to the bona flde purchasers.' The same principle which
forbids any state législation interfering with the power of Congress to dis-
pose of the public property of the United States also forbids any législation
depriving the grantees of the United States of the possession and enjoyment
of the property granted by reason of any delay in the transfer of the title
after the initiation of proceedings for its acquisition. The consummation of
the title is not a matter which the grantees can control, but one which rests
t-ntirely with the government. With the légal title, when transferred, goes
the right to possess and enjoy the land ; and It would amount to a déniai of
the power of disposai In Congress if thèse beneflts, which should follow upon
the acquisition of that title, could be forfeited because they were not asserted
before that title was issued."
CAMPBELL & ZELL CO. V. AMEKICAN 8UBETT CO. 491
And at page 103, 13 Wall., 20 L. Ed. 534, the court also said:
"But neither in a separate suit lu a fédéral court, nor In an ansvjer to an
action of ejectment in a state court, can the mère occupation of the demanded
premises by plaintiffs or défendants for the period prescribed by the statute
of limitations of the state be held to constitute a sufflcient equity In thelr
favor to control the légal title subsequently conveyed to others by the patent
of the United States, without trenchlng upon the power of Congress in the
disposition of the public lands. That power eannot be defeated or obstructed
by any occupation of the premises before the issue of the patent, under state
législation, in whatever form or tribunal such occupation be asserted."
I am therefore of the opinion that the statute above referred to, pro-
viding for the assessment for improvements, has no application to a
case like this, and the demurrer to the fifth count must also be sus-
tained.
CAMPBELL & ZELL CO. V. AMERICAN SURETT CO.
tCircuit Court, D. Massachusetts. March 11, 1904)
No. 1,397.
1. CoEPOEATioNS— Actions by— Phoof op Incoepoeation.
The burden rests upon a plaintiff suing as a corporation to prove its
corporate existence, but such fact is sufEciently proved for the purposes
of a case by the production of the bond sued on, which was executed by
défendant, and contains a récital thaï plalntlfE is a corporation.
2. Same— Peooi' of Identitt.
That a corporation plaintiff is the îdentical one to which a bond sued
on was executed may be inferred from the identity of name, uniess it is
shown that there are others of the same name.
3. Attachment— Bond fob Dischaege— Paett Entitled to Sue.
An action was brought in the name of a receiver appointed in another
state for a corporation of such state. The déclaration contained one
count setting out a contract between the défendant and such corpora-
tion made prior to the receivership. The court havlng determined that
the receiver could not maintain an action thereon, the déclaration was
amended by substituting the corporation as plaintiff, and on that count
alone judgment was rendered against the défendant, but in favor of the
corporation, and not of the receiver. Held, that a bond given prevlously
by the défendant to obtain the discharge of an attachment in the suit,
although running to the receiver, created a contract wlth the corpora-
tion, on which it could maintain an action against the surety in its own
name, the record havlng been such as to advise the surety from the be-
ginnlng that the corporation was the real party In Interest, so that Its
obligation must be construed in the light of such fact.
4. Same— LiABiLiTY of Sueety— Amendmbnt of Declaeation Substituting
New Plaintiff.
The surety on a bond glven for the discharge of an attachment in an
action brought by a foreign receiver for a corporation is presumed to
know that the déclaration is amendable at common law by substituting
the corporation as plaintiff, and such an amendment does not affect its
liability.
5. Judgment— BuBDEN of Pboving Patment.
Where, under the pleadings, the burden rests on a plaintiff to prove
that a judgment pleaded is unpaid, such burden is met by proving the
renditlon of the judgment, the presumption beiug, in the absence of other
proof, that it has not been paid.
*92 129 FB3DBEAL EEPOETEK
At Law. On trial to the court.
Mahqney, Crowell & Sullivan, for plaîntifif.
Lougee & Robinson, for défendant.
PUTNAM, Circuit Judge. The questions involved in this case
are technical, and somewhat difficult, as to which the court is lia-
ble to err. But the diiificulty is not the fault of the law. The plain-
tiff had a clear, straight path given it, which, if pursued, would hâve
left no doubt. While it is clear it might hâve brought a suit in its
own name, and taken a bond to itself, so that there would now be
no question, it brought suit in the name of a foreign receiver, al-
though, according to the rules of law which hâve been settled from
the beginning of our judicial system, a receiver appointed in one state
has no more authority in another state than a police judge or a
police officer of one state has a right to come to another and arrest
criminals or préside at trials. Of course, this remark is confined
to an ordinary receiver, and does not apply to a statutory receiver,
in whom the title vests, and who becoraes the statutory successor
of the corporation.
The first question arises on the pleadings of the défendant with
référence to the name of the principal corporation, combined with
a question as to its existence. The défendant says that the plaintiff
is bound to prove its existence, and also bound to prove that it is the
corporation of which the receiver was appointed in the state of Mary-
land, which receiver initiated thèse proceedings. It seems that the true
name of the corporation is the Campbell & Zell Company of Baltimore
City, while, in the proceedings before us, it is described simply as the
Campbell & Zell Company. So far as the existence of the corpora-
tion is concerned, on the pleadings, and according to our practice,
the burden rests on the plaintiff. It proves this by producing the
bond sued in this case, which describes it as a corporation. This
makes out a prima facie case. It is not necessary to prove the ex-
istence of a corporation by the production of records. For ordinary
purposes the de facto existence of a corporation may be proved
by admissions of the adverse party, and this is sufficient. Hère we
hâve the description in the bond of the plaintiff as a corporation,
and therefore its existence is admitted by the défendant under its
seal.
Then, as to the identity of the corporation : If the défendant hère
could show that there were two Campbell & Zell corporations, spé-
cial proof might be required on the part of the plaintifï that this
is the corporation of which Mr. Homer was made receiver. The
court is of the opinion that, as the case stands, the identity is proven.
The facts of the case are, briefly, as follows : As already stated,
the local court in Maryland appointed Mr. Homer receiver of the
Campbell & Zell Company of Baltimore City. At a term of the
superior court for the county of Essex, in Massachusetts, held on
the first Monday of December, 1902, Homer brought suit against
the Barr Pumping Engine Company. In his writ and déclaration
he described himself as follows : "Charles C. Homer, of the state
of Maryland, receiver of the Campbell & Zell Company, a corpo-
CAMPBELL .& ZELL OO. V. AMEBICAN STTRETr OO. 493
ration established under the laws of the state of Maryland." Then
followed several counts ; ail, except one, of a doubtful character.
They may be construed as alleging a promise to Homer as receiver.
If ail the counts were of that indefinite character, this suit would
fail, because there would be nothing on the record to inform the
American Surety Company that it was giving an obligation to pro-
tect any kind of a claim except on promises made to Homer as re-
ceiver. Therefore défendant could not be held for a judgment on
promises made to the présent plaintifï. There was, however, a
count which set out the facts specifically, and alleged a contract made
between the Barr Pumping Engine Company and the Campbell &
Zell Company, and an obligation to pay by the Barr Pumping En-
gine Company to the Campbell & Zell Company, which, according
to the dates alleged, preceded the appointment of Homer as re-
ceiver.
The judgment in the state court followed that count, and was in
favor of the Campbell & Zell Company, and not of Homer, as re-
ceiver. The law, as settled, applies, that, where there is one good
count, claiming sufficient to warrant the judgment, the judgment
must stand, even though ail the other counts are bad. So that the
case stands as though the déclaration in the suit in the state court
showed that Homer, although the nominal plaintifï, was really suing
in behalf of the Campbell & Zell Company, and on a contract made
with it. This appears on the face of the papers, which the Amer-
ican Surety Company was bound to inform itself about, and which
we may présume it did inform itself about, when it gave the bond
in suit. Therefore the true condition was shown at the outset, and,
as we will fînd, whatever was afterwards done was entirely consistent
with the facts as they thus appeared, and only contributed to give
full efifect thereto. That proposition must be kept fîrmly in mind, and
the dates also.
At that stage of the case the Barr Pumping Engine Company,
desiring to release an attachment of its property, gave a bond for
that purpose. In that bond the American Surety Company, the
présent défendant, became surety. Nevertheless, we must look at
the four corners of the obligation of suretyship to learn its proper
construction. Guaranty Co. v. Press Brick Co., 191 U. S. 416, 24
Sup. Ct. 142, 48 Lr. Ed. 242. This is not a new rule. In Bowman v.
Read, 2 Wall. 591, 603, 17 L. Ed. 812, the court says:
"Sureties are as much bound by the true intent and meanlng of thelr con-
tracts which they voluntarlly* subscribe as prlncipals. They are bound in the
manner, to the extent, and under the circumstances as they cxisted when the
contract was executed."
This bond, if it is severed into parts, contains some expressions
which might require the court to construe it strictly as a contract
between the American Surety Company and Homer, as receiver;
but we must look at ail the expressions found in it, and at what
was contained in the plaintiflf's déclaration in the state court; and,
looking at thèse, we find it clear that the parties understood that
the Campbell & Zell Company had the real interest, and that Homer
was simply a go-between. Of this, the American Surety Company
494 129 FEDERAL EEPOEIER.
had knowledge when it executed the obligation in suit, so that in
executing it the surety Company subjected itself to ail such future
steps as might be taken by the courts in working out the substance
as shown on the face of the papers.
A.ssuming that the original suit had been brought in the state of
Maryland by Homer, as receiver of the Campbell & Zell Company,
in his name as such receiver, and had there proceeded to judgraent
in his name as such receiver, and that afterwards the receivership
had been discharged, and by order of court the original condition had
been restored, then, undoubtedly, in working out the substantial
rights of the Campbell & Zell Company appearing on the face of the
papers, supplementary suits could properly hâve been brought in its
name, and judgments taken accordingly, in the Maryland courts ;
and ail rights to the bond, both in equity and in law, would hâve
vested in it. That is a settled rule, and it goes quite as far as we
are required to go in order to maintain the suit now before us, un-
der existing circumstances.
It appears that, suit having been brought in the way in which we
hâve described in the state court, and that court having determined,
as it should hâve determined, that it could not be prosecuted in the
name of the receiver, therefore, in accordance with the settled prac-
tice, not only in Massachusetts, but in the fédéral courts, the writ
and déclaration w^ere amended, and Homer, the nominal plaintifï,
disappeared, the Campbell & Zell Company appeared in his place,
and judgment was rendered in its favor. This case turns on that
fact. ïhe surety company says that it did not contract with the
Campbell & Zell Company, but with Homer, as receiver. Neverthe-
less, as we hâve said, the substantial parties to the litigation appeared
on the face of the papers, and were always known to the surety com-
pany; and they must be presumed to hâve contracted in référence
to what thus appeared.
Référence has been made to Revised Laws of Massachusetts of
1902, c. 173, §§ 48, 121, with référence to amendments. Section 121
provides for notice to parties interested in case of certain amend-
ments, and, further, that, if notice has been given, the action of the
court allowing the amendment shall be conclusive. No such notice
was given hère. But this statute does not reach this case, in which
the amendment was made in accordance with the rules of the com-
mon law. In Chapman v. Barney, 129 U. S. ^TJ, g Sup. Ct. 426, 32
L. Ed. 800, an action was brought in the name of the United States
Express Company, declaring it to be a corporation. It was, however,
not a corporation, but a joint-stock association, organized under and
by virtue of the laws of a state which authorized such association
to bring suit in the name of the président. Thereupon the Circuit
Court permitted an amendment at common law bringing in "Barney,
président of the United States Express Company," which amend-
ment the Suprême Court approved. In Fenton v. L^rd, 128 Mass.
466, where suit had proceeded in name of the wife to and including
verdict, she was allowed to amend by joining her husband as plain-
tifï. In the same way, in East Tennessee Land Company v. Leeson,
178 Mass. 206, 59 N. E. 639, exactly the same amendment as at bar
IN RE DANN. 495
was allowed, apparently under the rules of the common law. There-
fore, in the case at bar, this was a common-law amendment, based
upon matter appearing on the face of the papers and of the bond in
suit. We regard the amendment as not at ail a substantial mat-
ter, and as merely one of form. The American Surety Company
must be assumed to hâve known that the déclaration was thus amend-
able, because the décisions to which we hâve referred in the Su-
prême Court of the United States and in 128 Mass. were made long
before this bond was given. What our décision would be in case
the rule admitting amendments of this class had been changed in
actual practice after the bond was given we need not consider. So
far as we hâve gone, this case is with the plaintifï.
This leaves only one question; that is, the condition arising out of
the fact that the plaintifï bas not oflEered any proof showing that the
judgment obtained in the state court was not paid. At common law,
in suits on bonds with a condition, the burden of proving payment
dépends on the pleadings. The plaintifï allèges that the judgment
was not paid. The answer contains a gênerai déniai, and, of course,
puts that allégation in issue; so that, on the state of the pleadings,
the burden rests apparently on the plaintifï to prove nonpayment.
That burden, of course, is easily met by the rule that a debt in-
curred is ordinarily presumed not to hâve been paid. In the absence
of proof, we will rest on the usual presumption. If that fails the
plaintifï, it is his own fault, because he could hâve relieved the court
of this difïiculty, and ofïered proof that payment had not been made.
Judgment for the plaintifï for the amount claimed and costs.
In re DANN.
(District Court, N. D. Illinois. Aprll 1, 1904.)
No. 9,701.
1. Bankbttptct— Inventor'b Kights befobe Patent— Tbansfeb.
A bankrupt's ineorporeal Interest In an alleged invention pendlng ap-
plication for a patent does not pass to his trustée in bankruptcy under
Bankr. Act July 1, 1898, c. 541, § 70a, cl. 2, 30 Stat. 566 [U. S. Comp. St.
1901, p. 3451], declaring that the bankrupt's interest in patents, patent
rights, etc., shall be vested In the trustée by opération of law as of the
date he was adjudged a bankrupt, since the words "Interest In patents,
patent rights," etc., should be construed as referring to rights acquired
under a patent to a third party.
2, Same— "Peopebty."
Bankr. Act July 1, 1898, c. 541, § 70a, cl. 2, 30 Stat. 566 [U. S. Comp.
St 1901, p. 3451], expressly provides for a transfer of the bankrupt's
interest in patents, patent rights, copyrights, and trade-marks, and clause
5 provides for the surrender of ail property which, prlor to the filing of
the pétition, the bankrupt could by any means hâve transferred. Held,
that since no mention is made in clause 2 of the ineorporeal interest of
an inventor in an article concelved prior to the allowance of a patent,
such interest should not be treated as "property," within clause 5, though
Rev. St. § 4895 [U. S. Comp. St 1901, p. 3385], permlts the inventor to
transfer the same, and authorlzes the issuance of a patent to the trans-
férée.
On review of ruling by the référée that the bankrupt's interest
and claims under pending application for a patent vested in the trustée
496 129 FBDEEAL KEl'ORTER.
under Act July i, 1898, c. 541, § 70, 30 Stat. 565 [U. S. Comp. St.
1901, p. 34SI].
Raymond & Bamett, for bankrupt
Thos. S. Hogan, for trustée.
Thos. M. Turner, for petitioning creditors.
SEAMAN, District Judge. The question certified, as stated by the
référée, is this : "Can a bankrupt be compelled to assign to the re-
ceiver or to the trustée ail of his rights, title, and interest in, to, and
under applications pending in the Patent Office for letters patent
upon alleged invention?" The solution is not free from difficult}',
but I am constrained to the opinion that the alleged interest of the
bankrupt is not within either of the provisions of Act July i, 1898, c.
541, § 70, 30 Stat. 565 [U. S. Comp. St. 1901, p. 3451], and does not
pass to the trustée in bankruptcy. The opinion of the référée rests
the ruHng in favor of the trustée upon section 70a, cl. 2, 30 Stat. 566
[U. S. Comp. St. 1901, p. 3451], which déclares that the bankrupt's
"interests in patents, patent rights, copyrights and trade-marks" shall
be so "vested by opération of law" as "of the date he was adjudged
a bankrupt," and upholds the contention on behalf of the trustée
that the interest in a pending application is within the statutory in-
tent and meaning of the term "patent right," as therein used. This
view impresses me as untenable for the reasons well stated in the
opinion of Judge Shiras in Re McDonnell (D. C.) loi Fed. 239. The
term is one of fréquent and distinctive use, both in statutes and in
common parlance, and under the established rules for its construc-
tion must be taken in its "natural, plain, obvions, and ordinary sig-
nification." Suth. on Stat. Const. § 229. As commonly used in vari-
ons State statutes regulating transactions thereunder which hâve re-
ceived judicial construction, the term "patent rights" has been lim-
ited, for obvions reasons, to such as "the patentée or his assignée
{or licensee) possesses in the property created by the application of
a patented discovery" (Patterson v. Kentucky, 97 U. S. 501, 506, 24
L. Ed. I115); while in common parlance it is applied to rights de-
rived under patents. As used in this statute, following the words
"interests in patents," I concur in the définition given by Judge Shiras,
as "intended to indicate rights acquired under a patent to a third
party, such as a license or manufacturing right." The term is in no
sensé appHcable to the incorporeal interest of an inventor in an al-
leged invention for which no patent has issued, though application
is pending. It would be a misnomer if employed in the latter sensé,
for no right to a patent exists except as provided by statute and
upon allowance thereunder. Without such allowance of an applica-
tion, the applicant has no interest which can be denominated a "pat-
ent right," whatever may be his interest in the invention claimcd.
Remarks arguendo in Fisher v. Cushman, 43 C. C. A. 381, 387, 103
Fed. 860, 51 L. R. A. 292, are cited by the référée (and in the briefs)
as opposed to the ruling in the McDonnell Case. I do not so regard
their import, and the dicta referred to impresses me as instructive
only upon the inquiry of property right which remains to be consid-
ered.
IN RE DANN. 497
The question of difficulty, as I view the case, ïs whether the al-
leged interest o£ the bankrupt may not be reached under the terms
of section 70a (5), as "property which prior to the filing of the péti-
tion he could by any raeans hâve transferred or which might hâve
been levied upon or sold under judicial process against him." That
the invention may be transferred before patent is well recognized
(Cammeyer v. Newton, 94 U. S. 225, 226, 24 L. Ed. 72), and section
4895, Rev. St. (3 U. S. Comp. St. 1901, p. 3385), authorizes issue of
the patent to the assignée in such case. So the test of the applica-
bihty of this clause (5) is whether tlie interest in the alleged invention,
pending application for a patent, constitutes "property" within the
statutory meaning. This term is one of wide gênerai signification,
but, as found in the clause in question, I am satisfied that the rule
above cited in référence to words in common and distinctive use is
not applicable; nor are the dictionary définitions cited on the one
side and the other safe guides for its interprétation. Fisher v. Cush-
man, supra. As thus found, "it is not to be construed in any loose,
popular sensé, but with regard to the limitations which the law (in
question) attaches to it." Id. The spécial nature of the right of an
inventer to his own invention is well recognized as having no sub-
stantial value in the absence of statutory provision for patent monop-
oly. While he "had at ail times the right to enjoy the fruits of his
own ingenuity, in every lawful form of which its use was susceptible,
yet before the enactment of the statute he had not the power of pre-
venting others from participating in that enjoyment to the same ex-
tent with himself; so that, however the world might dérive benefit
from his labors, no profit ensued to himself." Patterson v. Kentucky,
97 U. S. 501, 507, 24 L. Ed. 1115, quoting with approval Jordan v.
Overseers, etc., 4 Ohio, 295. AU that is primarily secured by the
patent is "the exclusive right in the discovery," and it then stands
as only "an incorporeal right, or, in the language of Lord Mansfield
in Miller v. Taylor, 4 Burr, 2303, 'a property in notion* having 'no
corporeal tangible substance.' " Patterson v. Kentucky, 97 U. S.
506, 24 L. Ed. II 15. It is true that this incorporeal right is named
as the property of the inventor before patent issues in Jones v.
Sewall, Fed. Cas. No. 7,495, and in Rathbone v. Orr, Fed. Cas. No.
11,585; but both thèse définitions must be qualified by that above
cited in the ruling case upon the subject. The substantial property
right of exclusive use is created alone by the patent, while the in-
ventor bas at the utmost a mère inchoate right to that end, which
is of no avail unless a patent is granted. Gayler v. Wilder, 10 How.
477. 493> 13 L. Ed. 504. In the well-considered case of Gillett v.
Bâte, 86 N. Y. 87, 94, the opinion speaks in référence to this inchoate
right of the inventor that it is "at least doubtful whether it bas the
characteristics of property, so as to justify a compulsory transfer by
the inventor." An invention is the product of original thought, and
its éléments are (l) the mental conception, and (2) the application
of the thought in form to produce practical resuit, i Robinson on
Pat. §§ Tj, 78. This conception surely bas no attribute of property
which can subject it to compulsory transfer before a patent is ap-
plied for to secure the wanting aitribute of monopoly in its use ; and
129 F.— 32
4:98 129 FEDERAL EEPOETER.
I am doubtfui, to say the least, whether the further action of the in-
venter in prosecuting an application for a patent créâtes property in-
tereSt which would pass to the trustée under the gênerai terms of
this clause, irrespective of the effect of the preceding spécification.
In Fisher v. Cushman, supra, the question involved was whether a
liquor license passed under this clause. By way of illustration the
opinion suggests "as an extrême case" the completion of an inven-
tion by a bankrupt, after depleting his estate in experimenting to that
end, with no act needed for procuring a patent except the making
of an application, and it is thereupon said : "We cannot concède that
there are any authorities of so précise a character as would prevent
a court of bankruptcy from realizing capital thus locked up." While
I am not prepared to concur in this intimation, it is sufficient to re-
mark that no such phase appears in the case at bar, and that my con-
clusions do not rest upon the abstract meaning of the word "prop-
erty" as found in clause 5, but upon the limitations placed thereon
through clause 2. As stated by Judge Jenkins (In re Rouse, Hazard
& Co., 91 Fed. 96, 100, 33 C. C. A. 356, 360), the principle of con-
struction is elementary that "spécifie provisions relating to a par-
ticular subject" must "govern in respect to that subject as against
gênerai provisions contained in the same act." The bankruptcy act
of July I, 1898, c. 541, § 70a, cl. 2, 30 Stat. 566 [U. S. Comp. St. 1901,
p. 3451], thus provides specifically for vesting in the trustée the in-
terest of the bankrupt in patents and patent rights, and the presump-
tion arises therefrom, when followed by clause 5 in référence to gên-
erai property, that it was so provided in récognition of the distinc-
tion of this class of interests from the gênerai classification of prop-
erty, as pointed out in the foregoing citations. Under the rule of
interprétation referred to, I am of opinion that the interest of the
bankrupt in the alleged invention cannot be reached through the gên-
erai terms of clause 5, in the face of this spécifie provision for patent
interests ; thus concurring in the view expressed by the référée there-
upon. The fact that no mention is made in clause 2 of the interest
which the inventer may hâve prior to the allowance of a patent,
and that it is therefore treated as excluded from that provision, can-
not disturb the application of the rule. The exclusion so found must
be deemed intentional, having the peculiar interest of invention in
mind, and that intention cannot- be evaded without violating the prin-
ciple on which the rule is founded. With the patent predicated solely
on the invention rights, rejected from the gênerai property clause,
no construction is justified to extend that clause over the inchoate
(and inferior) right represented in the patent.
The question certified must be answered in the négative, and the
pétition of the trustée denied accordingly. It is so ordered.
UNITED STATES V. LAKB. 499
UNITED STATES T. LAKB.
(District Court, E. D. Arkansas, W. D. Aprll 27, 1904.)
1, BANKEUPTCY— SCHEDULES— False Oatd— Indictmekt— Materialitt.
Where an indictment against the président of a bankrupt corporation
for maklng a false oath to its scbedules alleged that the corporation was
adjudged a bankrupt; that défendant, as its président, in coiapliance
with the bankruptcy law, dld file in the bankruptcy proeeedlng with the
référée the schedules required by law, subscribed and sworn to by him
as président, etc. ; that défendant stated on his oath that such schedules
contained a true and complète statement of ail the corporation's prop-
erty ; and that the statement that the bankrupt corporation had then on
hand only the sum of $100, which was ail the money the corporation then
and there had — was false, such indictment followed the strict language
of Bankr. Act Jnly 1, 1898, c. 541, § 29, 30 Stat. 554 [U. S. Comp. St.
1901, p. 3433], and sufiiciently showed the materiality of the false state-
ment, without an express averment thereof.
2. Same— Description of Assets.
In an indictment against the président of a bankrupt corporation for
making a false oath to its schedules, a description of the assets
charged to hâve been fraudulently and knowingly omitted from such
schedules as "one hundred and fifty thousand dollars in lawful money
of the United States" was sufflciently spécifie.
8. Same— Bankbupt Act— Oonsteuction— Concealment oï Assets— Peesons
LlABLE.
Bankr. Act July 1, 1898, c. 541, | 29, par. "b," cl. 1, 30 Stat. 554 [U. S.
Comp. St. 1901, p. 3433], provlding that a person shall be punished by
Imprisonment on conviction of having knowingly and fraudulently con-
cealed, while a bankrupt or after his discharge, from his trustée, any of
the property belonging to his estate in bankruptcy, must be strictly con-
strued, and does not include officers of a corporation declared a bankrupt ;
the term "bankrupt" being deflned by section 1, par. 4, to include a person
against whom an involuntary pétition, or an application to set a composi-
tion aside, or to revoke a discharge bas been flied, or who lias flled a
voluntary pétition, or has been adjudged a bankrupt
4. Pebjuet— Indictment— WiixruLNESs.
In a prosecution for perjury In violation of Rev. St. S 5392 [D. S. Comp.
St 1901, p. 3653], providing that every person who, having taken an oath
bef ore a compétent officer. In any case In which a law of the United States
authorizes an oath to be administered, that he will testify truly, wiUfuily
States any material matter which he does not belleve to be true, is guilty
of perjury, an indictment failing to charge that défendant took an oath,
alleged to be false, "willfuUy," was fatally détective.
On Demurrer to Indictment
William G. Whipple, U. S. Atty.
Campbell & Stevenson, for défendant.
TRIEBER, District Judge. The indictment în this case contains
six counts. The first, fourth, fifth, and sixth are based upon section
29b (2) of the bankruptcy act (Act July i, 1898, c. 541, 30 Stat. 554 [U.
5. Comp. St. 1901, p. 3433]), and charge the défendant with making a
false oath to the schedule of assets of the Alphin & Lake Cotton
Company, a bankrupt corporation of which the défendant was prési-
dent. Thèse counts are ail identical, except that the first count charges-
a concealment of $150,000 in lawful money, and each of the other
counts above mentioned charges a concealment of certain choses in
oOO 129 FBDBEAL EEPOETBE.
action, describing them as "a debt due from certain designated per-
sons to the banknipt corporation for money had and received." The
material facts charged in the first count, of which the other counts
above mentioned are practically copies, except as to the amount and
description of the property concealed, are as follows :
"That the Alphin & Lake Cotton Company, a corporation created and or-
ganized under tbe laws of the state of Arkansas, was heretofore, on the 201ii
day of February, A. D. 1903, adjudicated a bankvupt by the bankrupt court
of the United States for the sald district and division, and Edward H. Lalie,
late of said district and division, on the 5th day of May, A. D. 1903, in the
said district and division, and within the jurisdiction of this court, did then
and there, in eompliance with the bankrupt law of the United States, file in
the bankruptcy proceedings aforesaid, vfith Patrick 0. Dooley, the référée
in bankruptcy duly appointed by sald bankrupt court, a certain schedule as
required by sald law, which schedule was signed 'Alphin & Lake Cotton Com-
pany, by Edward H. Lake, Président,' of which schedule the following Is a
copy, to wit."
And then follows the schedule of assets, and the oath prescribed by
law, and then the indictment proceeds as follows :
"That the said schedule was by the said défendant then and there sub-
scrlbed and sworn to before one James H. Stevenson, then and there a notary
publie of the state of Arkansas, duly appointed, eommissioned, and actlng,
and duly authorized as such to admluister oatbs in such cases, whereby and
whereln the said défendant did then and there knowingly and fraudulently
falsely state that the Alphin & Lake Cotton Company, in which sald corpora-
tion the said défendant then and there held stock, and of which he was then
and there the président, had then and there on hand only the sum of one
hundred dollars ($100.00), which was ail the money the said corporation then
and there possessed, and did then and there further state that the sald
schedule was a statement of ail the property and assets of the sald com,-
pany, both real and Personal ; whereas, in truth and in fact, the said cor-
poration then and there had on hand, and in its possession and under ita
control, more than one hundred dollars ($100), to wit, the sum of one hundred
and flfty thousand dollars ($150,000) lawful money of the United States, and
whereas, in truth and in fact, the said schedule did not contain a statement
of ail the property of the said Company, both real and Personal, but said
Company did then and there hâve further assets not mentioned in said sched-
ule, to wit, property and assets of the value of one hundred and flfty thousand
dollars ($150,000) lawful money of the United States, as said défendant then
and there well knew. Said défendant then and there thereby knowingly and
fraudulently made a false oath and account in relation to a proceeding in
bankruptcy, contrary to the form of the statute in such case made and pro-
vided, and agalnst the peace and dlgnity of the United States of America."
The démarrer challenges the sufficiency of thèse counts upon two
grounds: First, because they fail to allège that the omissions from
the schedules mentioned in each of the counts are "material"; and,
second, that the description of the assets omitted from the schedules,
to wit, $150,000 in lawful money, in one count, and the choses in ac-
tion of $50,000 and choses in action for very large sums mentioned
in the other counts, is not sufficiently spécifie to apprise the défendant
precisely what he is called upon to défend.
As to the allégations of materiality, that is unnecessary, when the
facts stated in the indictment are sufficiently full to show the materi-
ality of the acts of omission. The statement in the indictment that
the matters sworn to by the défendant, and which are alleged to hâve
been false, are material, may be essential when the allégations in the
UNITED STATES V. LAKE. 501
indictment are not so spécifie as to show their materiality; but, when
the allégations of the indictment show the materiality of the alleged
false statements made under oath, the court will détermine that fact,
and the allégation of the pleader that the statements were material
would be but a conclusion of law and wholly superfluous. State v.
Hayward, i Nott & McC. 553. The indictment in this case allèges the
adjudication as a bankrupt of the corporation; that the défendant,
as its président, did, in compliance with the provisions of the bank-
ruptcy law file in the bankruptcy proceeding with the référée in bank-
ruptcy the schedules required by law, subscribed and sworn to by
him as président before a duly commissioned and acting notary
public of the statc of Arkansas, authorized as such to administer
oaths ; that the défendant stated upon his oath that said schedules
contained a true and complète statement of ail the property ana
estate of said corporation, both real and personal, etc.; and that
the statement that the bankrupt corporation had then and there on
hand only the sum of $100, and which was ail the money the saia
corporation then and there had, was false, etc.
As the bankruptcy act requires such schedules to be filed by the
bankrupt, or, if a corporation, by one of its officers, the materiality of
the alleged false statement is apparent, and an allégation by the
pleader that it is material can do nothing to aid, nor can its omission
detract from, its effect in any way. The bankruptcy law (section 2y)
does not require an allégation of materiality; and as the indictment
foHows the language of the statute strictly, and tells the facts with
sufficient accuracy to enable the défendant, in case of an acquittai or
conviction, to plead, in case of an additional indictment being returned
against him, a former acquittai or conviction, it is clearly sufiicient.
United States v. Gooding, 12 Wheat. 460, 6 L. Ed. 693; Cannon v.
United States, 116 U. S. 55, 6 Sup. Ct. 278, 29 L. Ed. 561 ; Ledbetter
v. United States, 170 U. S. 612, 18 Sup. Ct. 774, 42 L. Ed. 1162;
Milstead V. Commonwealth (Ky.) 51 S. W. 451; State v. Byrd, 28 S.
C. 18, 4 S. E. 793, 13 Am. St. Rep. 660. In United States v. Staats,
8 How. 41, 12 L,. Ed. 979, the défendant was indicted for an offense
which the statute declared to be a felony, and it was urged that, as
the indictment failed to charge that the act of the défendant was
committed feloniously, for that reason the indictment was defective;
but the court held that, as the statute did not require the act to be
done feloniously, it was unnecessary to charge it in the indictment.
Nor is it necessary to describe the assets charged to hâve been
fraudulently and knowingly omitted from the schedules by the défend-
ant with greater particularity than has been done. The description
in the first count is "one hundred and fifty thousand dollars in lawful
money of the United States," and in the other counts it describes the
choses in action, giving the amount and the parties from whom they
are due. This description is sufiicient to notify the défendant what
proof he will be required to meet, and enable him to plead a former
acquittai or conviction in case he is called upon to answer a new
indictment for the same offense. Rex v. Hepper, Ryan & M. 210,
cited by counsel, is not in point. In that case the indictment merely
charged that "the schedule did not contain a full, true, and perfect
502 129 FBDBBAL BEFOBIEB.
account of ail debts owing to him at that time," without specîfyîng
what debts owing td him had been omitted. The court properly held
that the indictment was defective. Had the indictment in this case
failed to charge that he omitted one hundred and fifty thousand dol-
lars in lawful money of the United States, the contention of the de-
fendant would hâve been sustained, and Rex v. Hepper would hâve
been in point. The demurrer to thèse four counts is, therefore, over-
ruled.
The demurrer to the second count is sustained. That count charges
a concealment of assets, under section 29b (i) of the bankrupt act;
but this section only applies to the bankrupt, and not to others, even
if officers of the bankrupt corporation. The language of the statute is :
"Coneealed while a bankrupt or after his discharge from his trustée auy
of the property belonging to his estate in bankruptcy."
As this is a criminal statute, it must be strictly construed. The de-
fendant is not a bankrupt. The act itself defines the meaning of the
word "bankrupt." It says:
" 'Bankrupt' shall include a person against whom an Involuntary pétition
or an application to set a composition aside or to revoke a discharge has been
flled, or who has flled a voluntary pétition or wbo has been adjudged a bank-
rupt" Section 1 (4), 30 Stat. 541 [U. S. Comp. St. 1901, p. 3418].
It does not include officers or agents of a corporation. In de-
fining the word "person," the act does include officers, as well as
ail persons who are participants in the forbidden acts, and the agents,
officers, and members of the board of directors or trustées, or other
similar controlling bodies or corporations. Section i (19) of the bank-
ruptcy act. No doubt, it was an oversight on the part of Congress
not to include officers of corporations, who are the only persons who
can file the schedules of assets and verify them by their oaths ; but the
courts are powerless to remedy the omissions of Congress.
The third count is for perjury, under section 5392, Rev. St. [U.
S. Comp. St. 1901, p. 3653], based upon the same facts as set out
in the fîrst count. The defect in that count is the omission to charge
that the défendant took the oath alleged to be false "willfully." This
is a fatal omission, and for this reason the demurrer to that count
must also be sustained. United States v. Dennee, 3 Woods, 39, Fed.
Cas. No. 14,947 ; United States v. Edwards (C. C.) 43 Fed. 67.
The order of the court is that the demurrer to the second and third
counts be sustained, and that to the first, fourth, fifth, and sixth
counts be overruled.
In re ADLER.
(District Court, W. D. Tennessee. Mareh 10, 1904.)
1. Bankrttptcy— Oedeb Requibing Bankkupt to Pay Ovee Money— Suffi-
CIENCY OF ShOWIKG.
To warraait an order requirlng a bankrupt to pay over a sum of money
to his trustée under penalty of punishment for contempt as against his
déniai that he has such sum In his possession or under his control, such
fact must clearly appear. That he has defrauded his creditors, or that
he has failed in tis examination to satisfactorily account for the value
m BE ADLEB. 503
of properiy whlch he should hâve had If statements made to commercial
agencies prlor to his bankruptcy were true, is not sufiaclent ground for
sueh an order.
2. Same— Phocbduee.
Proceedings to requlre a bankrupt to pay over money or surrender
property to his trustée should ordinarlly be by motion for a rule on him
to show cause, and should be Justified by the faets brought out In the
examination of hlmself and other witnesses in the regular course of the
proceedings. Unless under exceptlonal circumstances, where it Is nec-
essary to bring before the court facts not appearing in the examination,
or new parties, a formai pétition and pleadings as in a suit in equity
are unnecessary, and an expense which should not be permitted by the
court; nor should the court or référée entertain such proceedings at ail
unless there is sufiaclent in the évidence, taken in the regular course
of the proceedings, to warrant the order sought prima facle.
In Bankruptcy. On review of order of référée.
J. W. Apperson, for trustée,
L. Lehman, for bankrupt
HAMMOND, J. This is a pétition to review the action of the
référée in directing the bankrupt to show cause why he should not
be compelled to pay over to the trustée in bankruptcy the sum of $7,000,
which it was alleged he had in his possession or under his control.
The trustée filed a pétition setting forth, in substance, that the bank-
rupt some nine months before his bankruptcy had made a report
to the commercial agencies showing that he had on hand a stock of
goods of the value of $9,000, and that subsequently, and more re-
cently before his bankruptcy, he had purchased other invoices of goods
which ran the aggregate of his purchases to a considerably larger
sum. The pétition then sets out the debts which he had paid, and
the more or less accurately estimated expenses of his business, and
by a simple sum in arithmetic calculâtes that he should still hâve on
hand about $7,000. The prayer of the pétition was that he should
be required to show cause why he should not be compelled to pay this
money over to the trustée by a peremptory order to that effect, to be
followed, of course, by contempt proceedings to enforce the order.
This pétition was demurred to by the bankrupt, the demurrer over-
ruled, and an order to show cause issued and served upon the bank-
rupt according to its prayer. From that order of the référée this
pétition for review was filed.
The question presented by counsel at first related solely to the
sufficiency of the demurrer, but the court passed that question as
quite immaterial in the attitude of the record, and inquired of counsel
for the trustée whether or not the proof showed that the bankrupt
had this money in his possession or under his control, to. which an-
swer was made that it was only shown by a necessary inference to
be drawn from the facts proven in the record. The pétition of the
trustée was predicated of the disclosures brought out by the exam-
ination of the bankrupt and the proof of certain witnesses concerning
his affairs. This examination shows substantially what is alleged
in the pétition — ^that the bankrupt had made the reports stated to the
commercial agencies, and that he had expended the sums of money
that were mentioned in the examination, and, according to his stàte-
504, 129 FBDBEAL REPORTEE.
ment, other sUms not so defînitely shown, and in liîs exâmination he
gàvè as an excuse fof not having more money on hand that he had
wasted it in gambling on the horse races by buying pools at the pool-
room on the other side of the river in Arkansas, kept for the use of
those participating in thîs city in such gambling enterçrises. The cred-
itors undertook to prove that the bankrupt had never been seen in this
pollroom, and, from such facts and circumstances, that this story of
losing the money on the races was untrue. In a gênerai way, it may be
said that the proof shows that as late as November before the filing of
the pétition of the bankrupt in January he had on deposit in the banks
some $400 in money, and at one time he drew out of the bank as much
as $1,400 of money. The bankrupt explains his affairs by saying that
the statements that he made to the commercial agencies were untrue,
that they were exaggerated for the purpose of making a good showing
for his crédit, that he kept no books of account except a scratcher to
show to whom he liad sold goods on a crédit, that his accounts with
his creditors were simply kept by placing his invoices on a file wire,
that he kept only a small store or shop, and that his business did not
amount to anything like the sums of money indicated by the cred-
itors. There is no more conclusive proof than this as to the pos-
session of the money, and it is not claimed by counsel that any more
conclusive proof is available, but only that it is a necessary implication
from thèse facts that the bankrupt is concealing the money and with-
holding it from his trustée.
The court does not think that this is at ail a necessary presumption,
and is of the opinion that upon such proof it is not within the powers
of the bankruptcy court to direct the bankrupt to pay the money into
court under the penalties for contempt. Such a construction of the
bankrupt law would be only to revive the long since abolished process
of imprisonment for debt, which is both obsolète and unconstitutional.
The court has no doubt of the power of the court, where it reason-
ably appears that the bankrupt has the money in his possession or
under his control, to compel him to pay it over; but that fact must
appear by something more substantial than mère presumptions or in-
ferences taken from such circumstances as those which hâve been
proven in this case. To invoke that power requires something like
incontestible proof as against the banlcrupt's déniai that he has the
money. The fact that he accounts falsely for his dissipation of the
money, the fact that he does not satisfactorily disclose his uses of it,
the fact that he évades the exhibition of his conduct in the premises,
may indicate that he has defrauded his creditors, that he has dealt
falsely with them, that he has egregiously perjured himself and
forsworn the truth, and may invoke other remédies under the statute ;
but not this of a peremptory order to pay the money to the trustée,
and punishment by contempt for a failure to do so. That remedy
applies only to a fund which can be designated and traced into his
possession, so that it is, in a légal sensé, a tangible fund on which the
court can lay its hands; and it cannot be made to apply to some
intangible money supposed to be kept in his possession which he
can be forced to pay by raising or procuring the money to meet the
orders of the court. No doubt many bankrupts could be made, under
IN KE ADLEE. 505
the coercion of imprisonment, to find the money with which to meet
such a demand; but the law does not proceed upon the theory of
thus compelling a bankrupt to pay his creditors that which he owes
them. It would be in substance and in fact a mère revival of the dis-
carded remedy of imprisonment for debt. Therefore, unless the court
can see that the bankrupt is in possession of the money, and withholding
it wrongfuUy, it will not make such an order as that which is applied
for in this case. The bankrupt may be indicted under the criminal
features of the act, his discharge may be refused, he may be compelled
by contempt proceedings to answer questions which he évades and re-
fuses to answer, and to disclose the rights of action that may belong
to the trustée by reason of his deahngs with others ; and thus in many
ways he may be compelled to give the fuUest statement of his affairs ;
but, no matter how fraudulent his conduct may be, the creditors cati-
not resort to this method of compelling him to pay his debts, wheii
there is not sufficient proof that he is concealing money or other prop-
€rty in actual possession or control.
The court wishes to take this occasion to protest against the grow-
ing habit in the bankruptcy cases of lumbering up the record with
pétitions and litigation growing out of them that is expensive, and
an unnecessary tax upon the assets of a bankruptcy estate. The
creditors and their trustée in bankruptcy, by the ordinary process of the
examination of the bankrupt, and the power to compel ail witnesses
who hâve any knowledge of his affairs to come before the référée
and be examined in relation thereto, hâve ample procédure for dis-
closing ail the facts in relation to the bankrupt's affairs which would
furnish a foundation for an ordei' on him to pay money into court,
or to surrender property in his possession to the trustée. He is in
a certain sensé ever présent in court to answer such demands, and
ail that is necessary is a simple motion for a rule upon him to show-
cause against the order that is required, and pétitions for that pur-
pose are wholly unnecessary. Hère we bave, without the least
necessity for it, such a pétition, with a demurrer for repugnancy and
other technical objections, and ail the expenses incident to such a liti-
gation as if it were a formai bill in equity; and it seems to be the
habit to proceed by pétition in almost every controversy that arises
in the bankruptcy proceedings, thus incurring an unnecessary expense.
It may sometimes be necessary to file a formai' pétition, as it is somc-
times necessary in équitable proceedings ; but such a method is rarely
essential, and should never be resorted to unless the purpose is to
bring into the notice of the court some outside matter that does not
appear by the ordinary record, or some outside party who is not bound
or ready to take notice of the proceedings in bankruptcy ; and a simple
notice and rule to show cause, and oftentimes a mère afSdavit, is ail
that is necessary to accomplish everything that could be accomplished
by a formai and expensive pétition. Therefore the court has con-
cluded in this case to disregard the demurrer to this pétition, treating
it as an unnecessary pleading in any event, but amply sufficient to
do that which a simple motion or rule to show cause would just as
effectually accomplish. The court does not wish to establish the
précèdent that the trustée may not, if necessary, proceed in a matter Hke
506 129 FEDERAL EEPOETEIi.
this by pétition, and therefore it might overrule this demurrer; but it
is not necessary to dispose of the case upon its merits to send it back
to the référée for a formai answer to this pétition, and a possible re-
tum of it hère upon a pétition for review upon exceptions which may
be taken to that answer, thus injecting into a bankruptcy proceed-
ing — unnecessarily, the court must insist — a formai suit as expensive
and formidable as a regular bill in equity. If the trustée has not been
able, through the ordinary procédure of an examination of the bank-
rupt and the witnesses in the bankruptcy proceedings, to show that
the bankrupt has in his possession money or property that he ought
to be directed to turn over to his trustée, the court wiU not allow
a new litigation to be initiated and carried on by this pétition for
the purpose of making such a showing on any such mère presumptions
as those that are contained in this pétition.
Therefore the order of the court will be that this demurrer be
overruled, but that the pétition shall be dismissed, because it appears
from the record of the proceedings in bankruptcy that there is no
foundation in any of the disclosures made about the bankrupt's affairs
for any rule upon him by pétition or otherwise requiring him to show
cause why an order should not be made upon him to surrender money
or other property to the trustée in bankruptcy. It will be time
enough to issue such a rule when the trustée shall show, by the exam-
ination of the bankrupt, or witnesses who know the facts, that this
bankrupt has in his possession a fund of $7,000 which he should be
required to turn over to the trustée, and it is not at ail necessary that
we shall inaugurate any proceedings by pétition or otherwise for
that purpose. The ordinary power of examination is amply sufficient
for it, and the rule, as the record now stands, will be refused.
Ordered accordingly.
CHRISTIE-STREBT COMMISSION CO. r. UNITED STATES.
(Circuit Court, W. D. Missouri, W. D. April 25, 1904.)
No. 2,731.
1. Taxes— Patment undeb Duress— Recovebt— Toet— Jtjeisdiction.
Ttie amended pétition alleging that the tax sought to be recovered was
exacted by threats and paid under duress, the action is for damages
sounding in tort. HelO,, therefore, that the action is excepted from the
jurisdiction of the Circuit Court, in the flrst instance, by section 1 of the
act of March 3, 1887, c. 359, 24 Stat. 505 [U. S. Comp. St. 1901, p. /752].
2. Same.
The case of Dooley v. United States, 21 Sup. Ct 762, 182 U. S. 222, 45
h. Ed. 1074, dlfferentiated, as that was controlled by the construction
placed upon section 8, art. 1, of the fédéral Constitution. As such, the
action was founded on the Constitution, and conferred jurisdiction on
the Circuit Court under the act of 1887.
3. Same— Limitations.
The amended pétition, as did the original, dlscloslng the fact that the
plaintiflf appealed to the Commissioner of Internai Revenue for redress,
under section 3226, Rev. St. U. S. [U. S. Comp. St. 3901, p. 2088], held,
that the action is subject to the period of limitations imposed by sections
3226 and 3227 of sald statutes.
OHRISTIE-STREBT COMMISSION CO. V. UNITED STATES. 507
4. Same.
In such case the rmmlng of the statute of limitations Is not suspended
during the pendency of tbe appeal before the Commissioner of Internai
Revenue.
5. Same— EsTOPPEL.
Statements made by minlsterlal or departmental officers of the govern-
ment to the claimant pending such appeal, to the efEect that the claim
would be allowed, or had been certified favorably to the auditlng office,
constitute no estoppel against the government, so as to avoid the opéra-
tion of the statute of limitations.
(Syllabus by the Court)
Harkless, Crysler & Histed, for plaintiflf.
Wm. Warner, U. S. Atty,
PHILIPS, District Judge. In its amended pétition the plaintîff
seeks to escape from tlië ruling of this court (126 Fed. 991) on the orig-
inal pétition that, the tax having been voluntarily paid, no action to
recover the same could be maintained at common law, by now alleging
that the tax was paid under duress ; i. e., by threatening the company
with séquestration of its property, interruption of its business, and
with criminal prosecution of its officers. This conceded, the exaction
of the tax was not only unlawful, but tortious, and subjected the col-
lector, as a tort feasor, to an action of trespass vi et armis. In its
légal essence, it is an action for damages, sounding in tort, simple and
pure. Nothing else can be made out of it, unless the court should
disregard ail recognized distinctions between actions ex contracta and
actions ex delicto, and actions on the case and actions in trespass vi et
armis. As such, it is expressly excepted from the jurisdiction of this
court, in the first instance, by the second section of the act of March
3, 1887, c. 359, 24 Stat. 505 [U, S. Comp. St. 1901, p. 753], relied on
by plaintiff.
In the opinion of this court on the original pétition, it was tentatively
stated that it might be inferred from the discussion of Mr. Justice
Brown in Dooley v. United States, 182 U. S. 222, 21 Sup. Ct. 762, 45
L. Ed. 1074, that this action might be instituted in the first instance
in the United States court. On further examination, I am of opinion
that the question discussed and uppermost in the mind of the court
in that case was whether or not duties could be collected on mer-
chandise imported from the United States into Porto Rico, and vice
versa, after the ratification of the treaty between the United States
and Spain. It is manifest that the décision of the case was controlled
by section 8, art. I, of the fédéral Constitution, providing that "ail
duties, imposts and excises shall be uniform throughout the United
States." The action was therefore founded upon the Constitution, and
was not, like the case at bar, a simple action sounding in tort for the
recovery of an illégal tax coerced by the threats and duress of the
ministerial officer. It was not in the mind of the court in the Dooley
Case to overrule that long and unbroken line of décisions holding that
the government does not subject itself to suits for the torts, misfea-
sances, or malfeasances of its officers, as indicated by the following
cases, which hâve never been overruled : Gibbons v. United States, 8
Wall. 275, 19 L. Ed. 453 ; Morgan v. United States, 14 Wall. 534, 20
508 120 FEDERAL EEPOIiTEIl.
L. Ed. 738; United States v. Savings Bank, 104 U. S. 'J2^'jii, 26
Iv. Ed. 908; Hill V. United States, 149 U. S. 593, 13 Sup. Ct. loii, ly
L,. Ed. 862; Langford v. United States, loi U. S. 342, 345, 25 L. Ed.
loio; Schillinger v. United States, 155 U. S. 163, 168, 15 Sup. Ct.
85, 39 L. Ed. 108; United States v. Lynah, 188 U. S. 445, 23 Sup. Ct.
349, 47 L. Ed. 539 ; Cheatham et al. v. United States, 92 U. S. 88, 23
L. Ed. 561; Kings County Savings Institution v. Blair, 116 U. S.
200, 6 Sup. Ct. 353, 29 L. Ed. 657.
The amended pétition, as did the original, shows that the plaintiiï
elected not to sue the collecter for the tort, but sought redress from
the government directly under the provisions of section 3226, Rev. St.
U. S. (carried forward in U. S. Comp. St. 1901, p. 2088), by appeal-
ing to the commissioner of internai revenue to obtain restitution. Ac-
cordingly, it is averred that the pC tioner filed its writto application
with said commissioner in October, 1899. This remedy in this class
of cases is specifically provided for by said section, and the course pre-
scribed is exclusive, and must be pursued, and is subject to ail the
conditions and limitations therein imposed. Cheatham et al. v. United
States, 92 U. S. 88, 89, 23 L. Ed. 561 ; United States v. Bank, 104 U.
S. 733, 734, 26 L. Ed. 908; Snyder v. Marks, 109 U. S. 193, 3 Sup. Ct.
157, 27 L. Ed. 901; Commissioners, etc., v. Buckner et al. (C. C.) 48
Fed. 533.
As this suit was not brought until November 14, 1902, it is barred
by the statu te of limitations. Sections 3226, 3227, Rev. St. [U. S.
Comp. St. 1901, pp. 2088, 2089]. See opinion herein, 126 Fed. 995,
996; Commissioners, etc., v. Buckner et al. (C. C.) 48 Fed. 535.
Nor is the position tenable that the running of the statute of limita-
tions in question was suspended during the pendency of the appeal
before the Commissioner of Internai Revenue. United States v. Utz,
80 Fed. 849, 26 C. C. A. 184. While that was an action based on an
express contract, and was therefore clearly within the provision of
the act of 1887 conferring jurisdiction on the United States court in
such action, in which the six-years limitation applies, it is direct au-
thority against the contention of the plaintiiï that the running of the
statute is suspended while such claim is being considered by one of
the departments of the government. Indeed, as applied to the case at
bar, the provision of section 3226, Rev. St. U. S., is too explicit to ad-
mit of debate. The only exception made to the two-years limitation
therein prescribed is in the proviso "that if such décision is delayed
more than six months from the date of such appeal, then the said suit
may be brought, without first having a décision of the commissioner
at any time within the period limited in the next section" : that is, sec-
tion 3227, which déclares that :
"No suit or proceeding for the recovery of any internai tax alleged to bave
been erroneously or illegally assessed or collected, or of any penalty alleged to
hare been collected without authority or of any sum alleged to hâve been ex-
cessive, or in any manner wrongfully collected, shall be maintained in any
court, unless the same is brought within two years next after the cause of
action accrued."
The plaintiff seeks în the amended pétition to escape from this di-
lemma by pleading, in effect, that its counsel was led to believe, by
OHKISTIE-STKEEI COMMISSION CO. V. XJ^ilXED SXATES. 500
the statements of some one representing the government, that the
claim would be allowed when certain évidence and exhibits were fur-
nished by petitioner, and that finally some représentative of the Internai
Revenue Department stated that the claim had been certified to the
auditing department. If this plea has any office in légal procédure, it
is that of an estoppel. If it could obtain in a suit against the govern-
ment, the statement, as made in the pétition, would be bad. It should
state what ofïicer made such représentation, so that the court could
say whether he was in a position to bind his principal. And in the
second place, the plaintiff could not be justified in accepting such state-
ment when the records of the commissioner's office, which is a pub-
lic record, would show officially whether or not such final action had
been taken, and when an inquiry and examination at the auditor's of-
fice would hâve developed the truth. Eut aside from this, thé govern-
ment would be in a sorry plight if the neglects, the careless speeches,
and self-excusing or self-serving statements of its ministerial officers
or agents could create waivers and estoppels in suits by and against
the government. It has been the recognized doctrine since the founda-
tion of the government that "it does not undertake to guaranty to
any person the fîdelity of any of the officers or agents whom it em-
ploys, since that would involve it, in ail its opérations, in endless em-
barrassments and difficulties and losses, which would be subversive
of the public interests." United States v. Kirkpatrick, 9 Wheat. 720,
6 L. Ed. 199; Dox V. Postmaster General, i Pet. 318, 7 L. Ed. 160.
As said by Mr. Justice Miller in Gibbons v. United States, supra, "No
government has ever held itself liable to individuals for the misfea-
sance, lâches, or unauthorized exercise of power by its officers and
agents." See, also, Hart v. United States, 95 U. S. 318, 24 L. Ed. 479,
in which Mr. Justice Waite said, "The government is not responsible
for the lâches or the wrongful acts of its officers."
Out of this doctrine has grown the rule that no officer of the gov-
ernment is authorized to waive the statute of limitations imposed in
favor of the government. Accordingly, Mr. Justice Harlan, in Finn
V. United States, 123 U. S. 227, 8 Sup. Ct. 82, 31 L. Ed. 128, said:
"The gênerai rule that limitation does not operate by Its own force as a
bar, but is a défense, and that the party mailing such a défense must
plead that statute if he wishes the benefit of its provisions, has no appli-
cation to suits In the Court of Claims against the United States. An individ-
ual may waive such a défense either expressly or by failing to plead the stat-
ute, but the government has not expressly or by implication conferred author-
ity upon any of its officers to waive the limitation imposed by the statute upon
suits against the United States In the Court of Claims."
And since the Circuit Courts hâve acquired no greater right in this
respect by the enabling act of 1887, the same rule applies to suits insti-
tuted in the Circuit Court.
The demurrer to the amended pétition is sustained.
610 129 FBDBRAL BEPOBTEB.
In re RBINHAET.
(District Court, S. D. Georgla, W. D. Oetober 21, 1902.)
1. Bankruptct— Exemptions— Law of Georgia.
The law of Georgia permlts a debtor to take elther the statutory
homestead exemption or that given by the constitution of 1877, but not
botb; and further provides (Code, § 2865) tbat he may supplément his
exemption by addiug to the amount already set apart, which is less
than the whole amount allowed, a sufficiency to make his exemption
equal to such amount. Eeld, that a court of bankruptcy had power.
under Bankr. Act 1898, to permit a bankrupt who had been granted
the statutory exemption prior to his bankruptcy, but in property which
at the date of his bankruptcy was of little value, to supplément the
same up to the full value of that allowed by the statute from any prop-
erty or funds of the estate, but that he could not be allowed the con-
stitutional exemption.
2. Exemption — Waivbb— Law of Georgia.
Under the law of Georgia, the head of a family has no power to
waive his statutory homestead exemption in favor of a créditer, such
power of waiver having relation solely to the exemption provided by
the constitution of 1877.
In Bankruptcy. On review of referee's décision approving the ac-
tion of the trustée in setting apart property to the bankrupt as a home-
stead exemption.
S. A. Crump and W. B. Gerry, for bankrupt.
Herman Brasch and E. P. Johnson, for objectors.
SPEER, District Judge. The applicant for homestead exemption
in this case is J. V. Reinhart. He conducted a small business in
fruit and similar produce, but, faiHng in business, was adjudged a
bankrupt, and now seeks such homestead exemption out of the pro-
ceeds of his estate as will be allowed by the law of Georgia and the
bankruptcy aCt. The trustée set apart to the bankrupt certain Per-
sonal property as an exemption, under article 9, § i, of the constitu-
tion of the State of Georgia. This permits an exemption to the head
of a family, in real estate or personalty, or both, to the value in the
aggregate of $1,600. Code Ga. § 5912. This action of the trustée
was objected to by certain creditors before the référée in bankruptcy.
L. L. Bishop and Simmons and Bishop objected on the ground that
the bankrupt had been granted by the ordinary of Bibb county, on
March 22, 1900, the statutory exemption under the law, which existed
previously to the adoption of the constitution of 1877, which provides
for the constitutional exemption of the larger amount above adverted
to. Adams and Johnson, aiso creditors, objected upon the ground
that they hold four promissory notes, amounting in the aggregate to
$105.12, in which notes; the bankrupt waived his right to the home-
stead exemption. Notwithstanding thèse objections, the référée ap-
proved the exemption, and his décision is presented to this court for
review.
After considering the arguments of counsel and the authorities re-
lating to this question, we do not feel at liberty to approve the finding
IN BB BEINHABT. 611
of the référée in îts entîrety, but, by a libéral construction of the stat-
utes and décisions on this subject, we yet feel justified in aflfording some
measure of relief to this unfortunate man and his helpless family. It
is not denied that previously to his application to the bankruptcy court
for the constitutional exemption Reinhart, as a head of a family, had
obtained from the ordinary the statutory exemption. This consisted
of a one-third reversionary interest in a small tract of land, a bedstead,
bedding, a httle household furniture, a small gray horse, a cow, and
a few other articles of trivial value. It appears from the évidence
that the horse is dead, and that certain other articles are worn out or
lost. It is safe to conclude that the remuants of this exemption are
paltry, if not wholly worthless. While this is true, it was yet the
statutory exemption. The law of the state is that "one entitled to a
homestead may take the statutory or the constitutional homestead at
option, but cannot take both. The two are distinct, and where one
has been taken it cannot be supplemented by the other." This an-
nouncement was made for the suprême court of the state by the late
Chief Justice Warner. Johnson v. Roberts, 63 Ga. 167. It has not
been departed from, and is entitled to ail the weight of authority
ascribed by the profession and the bench to the déclarations of that
famous jurist. The same principle is expressed in the statutory pro-
visions of the state on this subject. Code, § 2854. It follows that the
constitutional exemption in the form as allowed by the trustée and ap-
proved by the référée must be denied, and the applicant must be re-
stricted to his statutory exemption. It is at this point, however, that
the hberal provisions of the bankruptcy law relative to homestead ex-
emptions for unfortunate and distressed debtors will afïord this appli-
cant relief. While he must be content with his statutory exemption,
popularly called the "pony homestead," we think that the trustée may
allow him its full équivalent out of the values in his hands. It has long
been the policy of the state to allow to the head of a family of slender
means the benefit of this exemption. The first act upon the subject
was adopted in 1822, and the provisions defîning its extent may be
found in section 2866 of the Code. The property which may be set
apart may consist of 50 acres of agricultural land and five additional
acres for each child under the âge of 16. If the land is not suitable for
agricultural purposes, and is located in a city, town, or village, it may
be set apart to an amount not exceeding $500 in value. It exempts
also a farm horse or mule, or a yoke of oxen, a cow and calf, 10 head
of hogs, and $50 worth of provisions, and $5 worth additional for each
child. It also includes a considérable amount of provender and
forage, a one-horse wagon, household and kitchen furniture, a loom,
a spinning wheel, two pairs of cards, 100 pounds of hnt cotton, tools
of trade of the applicant and his wife, the equipment and arms of a
militia soldier and trooper's horse, wearing apparel, a family Bible,
religions works, school books, family portraits, library of a pro-
fessional man not to exceed $300 in value, and a sewing machine.
Such are the provisions of this admirable law. But few of the articles
enumerated hâve been set apart to the applicant by the ordinary. But
under another benignant provision of our law he may supplément his
512 129 fedejeAl KEi'oini::;.
hômestead. Thiô is found in section 2865 of the Code, which pro-
vides :
"It phall be the rlght of the appllcant to supplément his exemption by
addlng to the amount already set apart, which is less than the whole amonnt
of the exemption allowed by the constitution and laws of the state, a sufll-
clency to make hls exemption equal to the whole amount by resorting to the
methods for settlng apart and valuation of the exemptions provlded In this
article."
Now, we may not in the bankruptcy court adopt tlie machinery
provided by the state law, yet in proper cases we are authorized to
exercise the somewhat elastic and flexible powers of a court of equity,
and, in view of the manifest purpose of congress to afford the relief of
a hômestead exemption to persons who are in the situation of the ap-
plicant hère, is it not compétent for the court to direct the trustée to
set apart, so far as may be possible, a sufficiency of the assets of the
bankrupt to make his hômestead équivalent in value and in benefits
to himself and his family to that statutory hômestead provided by the
lavir of the state above quoted ? It is true that in the case of Mitchell v.
Wolfe, 70 Ga. 625, the suprême court of this state held that where one
had obtained an exemption of personalty he could not afterwards in-
crease it by having other personalty set apart. An examination, how-
ever, of that décision discloses that the hômestead there obtained w^as
under the constitution of 1868. Vested rights had accrued in parties
objecting to the supplemental proceedings, and the constitution of
1868 afiforded no provision for supplementing the hômestead it created.
The hômestead under considération hère was created by the statutes of
the state, and section 2865 of the Code above quoted, which embodies
the acts of 1878-89, is explicit in the rights it grants, to supplément the
other exemptions permitted by the laws of the state. Pâte v. Fertiliz-
ing Co., 54 Ga. 520, was decided in 1875 before the provision for a
supplementary hômestead was enacted.
In view of thèse considérations, this cause will be remanded to the
référée, with instructions to that ofificer to direct the trustée to set
apart of the funds in his hands for the benefit of the bankrupt a fair
équivalent of the hômestead provided by section 2866 of the Code of
Georgia, so far as that is practicable.
With regard to the other objection, that the hômestead should not
be allowed because certain creditors hold waiver notes, it is suflicient
to say that the head of a family in Georgia has no power or authority
to waive the statutory hômestead for the benefit of a créditer; the
power of waiver relating exclusively to the constitutional hômestead
provided by the organic law of 1877.
DALT V. BUSK TUNNEL KT. 00. 513
DALY V. BUSK TUNNEL RT. CO.
(Circuit Court o£ Appeals, Bighth Circuit March 17, 1904.)
No. 1,963.
1. OONTRA-CT FOB MaKING TUNNEL— CONSTEUCTION—RiGHT TO CHANGE DIMEN-
SIONS.
A contract for tbe construction of a rallway tunnel through a mountain
nearly two miles in length flxed the dimensions of the tunnel and the
priée par lineal foot to be paid the contracter for excavating the same.
It contained the f urther provision : "(6) It is understood and agreed that
the railway company shall hâve the rlght to make such changes in the
amount, dimensions or character of the work to be done, as in the opinion
of the chief engineer the interests of said work or of the company may
require ; * * *. Any increase in the amount of work to be done, that
may be caused by such changes, shall be paid for at the same rate as
slmilar work is herein contracted to be paid for." Printed spécifications
attached to the contract contained a provision that "the right is reserved
to vary the standard dimensions of the tunnel should the engineer deem
It advisable, but the end area shall not thereby be increased." Held, that
the latter provision was not intended to prohlblt the company absolutely
from enlarging the end area or cross-section of the tunnel, but, when con-
strued in connection with the provision of the contract proper, meant that
it should not be so enlarged as to require the removal of more material for
the contract price per lineal foot, and that if so enlarged the contractor
should be entitled to extra pay ; that such changes, therefore, were not
a variation from the contract which would release the surety on the con-
tractor's bond from llability, though made wlthout his knowledge or con-
sent.
2. Same— OoNFLicTiNG Provisions.
In case of a confliet between the provisions of a contract for the con-
struction of a tunnel and those of printed spécifications attached tbereto
which were prepared previously for gênerai use in connection with such
contracta and not with référence to that partieular contract, those of the
contract itself must control.
3. SETTLEMENT— IMPBACHMBNT EOK MiSTAKE— FAILUBE TO DBAW PROPEB IN-
FBRENCE FROM KNOWN FACTS.
A surety on the bond of a contractor for work, who settled a demand
made on him for his principal's default after long negotiation, in which
he was represented by an attorney, cannot impeach such settlement for
mistake of fact in that the other party had, in violation of the contract,
paid to the contractor as the work progressed the greater part of the 10
per cent, on the amounts due on monthly estimâtes, which the contract
provided should be reserved until the completlon of the work, of which
fact be was ignorant when the settlement was made, where it is shown
that ail the facts were freely furnished to his attorney, including state-
ments showing the total value of the work done by the contractor, and
the total amount paid him, from which the inference was obvions that
such payments included a large part of the reserved percentage.
4. Same— Surety- DuTY of Opposing Paett in Negotiations.
In negotiations for the settlement of a disputed demand, the fact that
ono of the parties is a surety does not require the other party to call his
spoeial attention to the bearing of facts known to both, or the Inferences
to be drawn therefrom.
5. Same— Considération.
The law favors the compromise of doubtful daims, and the avoidance of
litigation Is a sufficient considération to support such agreements, even
though it eventually appears that if the demand had been litigated no
recovery could hâve been had.
î 5. Hee Compromise and Settlement, vol. 10, Cent. Dig. § 40.
129 F.— 38
514 129 FEDEEAL REPORTEE.
In Error to the Circuit Court of the United States for the District
of Colorado.
This action was brought by Margaret P. Daly, as executrix of Marcus Daly,
deceased, the plaintiff in error, agalnst the Busk Tunnel Railway Company,
the défendant in error (hereinafter termed the "Tunnel Company"), to recover
the sum of $22,500 vvhich had been paid by the plaintifC's Intestate to the
Tunnel Company on Oetober 28, 1895. The grounds on which the plaintifE
predicated her rlght to recover were thèse: She alleged, in substance, that
on July 21, 1890, the Tunnel Company entered into a contract with one Michael
H. Keefe by virtue of which he undertook to construct for the Tunnel Com-
pany a tunnel underneath the crest of the Eocky Mountains between the sta-
tions of Busk and Ivanhoe, on the Une of the Colorado Midland Railway ; that
on July 25, 1890, her intestate became a surety on the bond of said Keefe in the
sum of $100,000, conditioned that Keefe would "well and truly keep and per-
form eaeh and ail of the terms and conditions of said contract on his part
to be kept and performed" ; that Keefe began the work of construction after
the exécution of the contract and bond, and prosecuted it until July 22, 1893,
when he abandoned the work, leaving the tunnel unflnlshed ; that during
the progress of the work the height and width of the tunnel were in-
creased above the height and width called for by the contract and spécifica-
tions, such altération in the height and width being made by agreement be-
tween Keefe and the Tunnel Company without the knowledge of the surety;
also that the contract provided that 10 per cent, of the monthly estimâtes of
work donc by the contractor should be withheld from him until the final com-
pletion and aceeptance of the work, and that, In violation of this provision of
the contract, the Tunnel Company, without the knowledge of the surety, paid
Keefe §61,000 of the sum of money which it should bave retained until the
completion of the work. It was then averred, in substance, that, after Keefe
had abandoned the work, the Tunnel Company made a claim against the plain-
tiff's intestate, who was one of the sureties on his bond, in the sum of §100,-
000, claiming that it had sustained damages to that amount in conséquence
of Keefe's failure to exécute the contract, and that, to induce the surety to
compromise and pay said claim or a part thereof, the Tunnel Company "false-
ly represented [to him] that it had in ail tbings kept and performed the con-
ditions of said contract by it to be kept and performed," although it well knew
that it had entered into an agreement with Keefe whereby material altéra-
tions had been made in the terms of the contract between itself and Keefe;
and that, relying upon such représentations as were made by the Tunnel Com-
pany, and believing that he was liable upon the contract for the damages
which the Tunnel Company had sustained by reason of the failure of said
Keefe to complète the tunnel, and being ignorant that any altérations had
been made in the tenus of the agreement in the respects heretofore stated, he
was induced to pay to the Tunnel Company, by way of settlement and com-
promise of his liability on the bond, the sum of $22,500, for which amount the
plaintiff below prayed judgment. At the conclusion of the trial in the lower
court the plaintiff and the défendant each asked the court to direct a verdict
in their favor. The plaintiff's motion to this effect was overruled, while the
defendant's motion was granted, whereupon a verdict and judgment was ren-
dered in its favor. The case bas been brought to this court for review on a
wrlt of error which was sued out by the plaintiff below.
T. J. Walsh (John H. Knaebel and Ernest Knaebel, on the brief),
for plaintiff in error.
Lucius M. Cuthbert (Henry T. Rogers, Daniel B. Ellis, and Pierpont
Fuller, on the brief), for défendant in error.
Before SANBORN, THAYER, and HOOK, Circuit Judges.
THAYER, Circuit Judge, after stating the case as above, delivered
the opinion of the court.
In view of the foregoing statement, it will be observed that the case
at bar is prosecuted upon the theory that, when the plaintiff's intestate
DALT V. BUSK TUNNEL RT. CO. 515
paid the sum of $22,500 by way of compromise and settlement of
his liability as a surety on the bond of Keefe, he had in fact been re-
leased from ail liability thereon by reason of the action of the Tun-
nel Company in enlarging to a certain extent the bore of the tunnel
by agreement with Keefe, and also by reason of its action in paying
to the contracter the sum of $61,000, which, under the terms of the
contract, it should hâve retained until the completion of the work. It is
claimed that thèse acts constituted material altérations in the terms of
the contract, which the surety promised should be faithfuUy performed
according to its terms, and not otherwise ; that he was ignorant of thèse
altérations at the time he made the settlement and compromised his
supposed liability ; that it was the duty of the Tunnel Company to hâve
advised him of its action in the matters aforesaid before negotiating a
settiement, and that, as it did not do so, the money which it received
may be recovered as m.oney paid under a mistake of fact.
The first question to be considered, therefore, is whether any such
change was made in the height or width of the tunnel as operated to
release the surety on the bond of the contracter, assuming such change
of dimensions to hâve been made without the knowledge of the surety.
The contract, which was prepared by the attorneys of the Tunnel Com-
pany with especial référence to the work which was to be donc by
Keefe, was typewritten, and signed by both of the contracting parties.
Annexed to this contract, and referred to therein as a part thereof,
were certain printed spécifications, which were not drawn, at the time
the contract was made, with especial référence to the construction of the
tunnel in controversy, which is commonly called the "Busk Tunnel,"
but had been prepared some time before that tunnel was projected,
and were kept on hand by the engineers of the Tunnel Company for
gênerai use in connection with whatever construction work they niight
hâve occasion to do. The printed spécifications in question, which
were annexed to the contract, related to railway construction generally,
and to varions kinds of work which Keefe did not undertake to do and
was not expected to do. Thèse printed spécifications, under the heading
"Tunnel," contained the following clause :
"The floor will be flat, and excavated to six (6) Inches below grade. The
roof will be a gothic arch described with a radius of ten and one half (10y2)
feet from a Une ten (10) feet above grade. The sidê walls will be vertical to
a height of ten (10) feet and parallel to and seven (7) feet six inches from the
tenter line. The total height of tunnel from floor to center of roof will be
twenty (20) feet six (G) inches."
Farther on in the spécifications, under the same heading, is found the
following clause:
"Bills or claims for extra work must be rendered within thirty (30) days
af ter it has been done, and in ail cases not later than the end of the next suc-
ceeding month. The right is reserved to vary the standard dimensions of the
tunnel should the engineer deem it advisable ; but the end area shall not there-
by be increased. The prlce per llneal foot of tunnel will Include the haul of
materials and deposits in embankments at each end of tunnel as directed by
the engineer."
The contract proper, and by this is meant the typewritten part, which
was prepared with spécial référence to the work which the contracter
was to do, contained the following provisions:
"(6) It is understood aud agreed that the railway Company shall ha^e the
right to make such changes in the amount, dimensions or character of the
516 129 FEDERAL EEPORTEB.
work to be done, as In the opinion of the chîef engîneer the interests of sale*
work or of the eompany may require ; * * ♦. Any Increase In the amount
of work to be done, that may be caused by such changes, shall be pald for at
the same rate as similar work is herein contracted to be pald for ; and if
such work is not similar to that herein contracted for, it shall be pald for as
extra work at priées to be agreed upon between the chief engîneer and con-
tractor prlor to the commencement of sald extra work, but if the contracter
and chief engîneer are unable to agrée upon a priée for sald work, thon the
rallway eompany may enter Into contraet with any other party or parties for
Its exécution, the same as If this contraet had never existed.
"(7) In considération of the falthful performance of the covenants and agree-
ments made by the contractor, the rallway eompany hereby covenants and
agrées to pay or cause to be pald to the contractor, bis executor or admluistra-
tor, the rates and priées herelnafter named, to-wlt ; * « • Excavation :
Earth, twenty-ûve cents — Per Cublc Yard. Excavation: Loose Rock, Forty-
flve cents (45c) — Per cublc Yard. Excavation Solld Rock, One Dollar and
thlrty cents ($1.30) per cublc yard. Tunnel Excavation, Sixty-two dollars aud
fifty cents ($62.50) per lineal foot. For tunnellng enlargement to receive tim-
ber,— Two Dollars & flfty cents (?2.50) per eu. yard."
The évidence shows that after about i,ooo feet of the tunnel had
been constructed, counting the construction at both ends, the contractor
was permitted by the engineer in charge of the work to make the height
of the tunnel 2i feet, instead of 20 feet 6 inches, as called for by the
spécifications, and he was paid for the extra amount of excavation thus
occasioned at the rate of $2.50 per cubic yard for ail extra material
that was removed. This change in height was allowed, as it seems,
mainly for the accommodation of the contractor. He found it quite
difficult, in blasting, to make the fîoor of the tunnel smooth and exactly
20 feet and 6 inches below the center of the roof of the tunnel at ail
places. In the process of blasting, "hummocks," as they are termed,
would be left in the floor, projecting up into the ballast, which was re-
quired to be six inches in depth below grade. Thèse hummocks pro-
jecting up into the ballast had the effect of lessening the elasticity of
the track, and they could only be removed by the contractor with sniall
blasts of powder, which work occasioned some difficulty and expense.
To overcome the difficulty the contractor was permitted to excavate
12 inches below grade instead of 6, so as to avoid the hummocks and
the cost of removing them, and he appears to hâve availed himself of
this privilège with alacrity so as to avoid expense. The évidence further
discloses, without any substantial controversy, that while the side walls
of the tunnel were required to be 7 feet and 6 inches distant from the
center line of the track, making the tunnel 15 feet wide between the
inside faces of the timber which supported the side walls and the arch,
yet it was in fact made about two and three-eighths inches (2^) wider
for the greater part of its length, and for the f ollowing reasons : The
work had been in progress for some time when it was discovered that,
if the wall plates were set exactly 15 feet apart in the first instance,
the pressure of the mountain, and the blasting which was being done
within the tunnel, had a tendency to crowd them inward a short dis-
tance, leaving the tunnel a little less than 15 feet wide in the clear;
and, as it was necessary that the tunnel should be that wide to insure
the safe passage of trains, and as the contraet called for that width, the
contractor was compelled at times to go back over his work, and, by re-
moving rock and débris back of the timbers, press them back into place.
DALT V. BUSK TUNNEL RT. CO. 517
To overcome this difficulty it was agreed by the contractor and the
engineer in charge that the wall plates might be set 15^/1» feet apart
in the first instance, so as to make good the shrinkage in width which
was incident to the pressure and blasting, thereby leaving the tunnel
15 feet wide between the inside faces of the timber which supported the
side walls. The contractor appears to hâve availed himself of this priv-
ilège very readily, as, by setting the wall plates 15V10 feet apart in the
first instance instead of 15 feet, it relieved him of considérable trouble
and expense. Thèse are the alleged changes in the height and width of
the tunnel which the plaintiff below relied upon to relieve the surety
of his liability upon the bond.
It is insisted, in behalf of the plaintiff in error, that the words "end
area'* as used in the spécifications, means the superficies of an end of
the bore of the tunnel, and that it can mean nothing else ; that the al-
térations aforesaid in the height and width of the tunnel increased its
"end area" and the solid contents of the bore of the tunnel, contrary to
the letter of the spécifications, and for that reason the surety was re-
leased, the changes having been made without his knowledge, although
such changes appear upon this record to hâve been to the advantage of
the contractor rather than to his disadvantage. On the other hand,
the Tunnel Company contends that by its agreement with the contractor
it expressly reserved the power "to make such changes in the amount,
dimensions or character of the work" as were in fact made ; that this
clause of the contract does not in fact conflict with the inhibition con-
tained in the spécifications against increasing the "end area," and that,
if there is an irreconcilable conflict between the contract and the spécifi-
cations, the latter must give way to the former, because the contract
was prepared with especial référence to the work in question, while the
spécifications were not so prepared ; and that the contract, rather than
the spécifications, must accordingly be taken as expressing the true in-
tent of the parties. It is further claimed by the Tunnel Company that
as the work of excavating the tunnel was to be paid for at the rate of
$62.50 per lineal foot, and as a cross-section, i foot in thickness, of the
tunnel as projected, contained 9.91 cubic yards of material, as shown by
the blue prints which were prepared by the company's engineer, and
in pursuance of which bids for doing the work were invited and the
contract with Keefe was entered into, the provision in the spécifica-
tions against increasing the "end area" simply means that the contractor
should not be compelled to move more than 9.91 cubic yards of material
in excavating i Hneal foot of the tunnel, and that if, by reason of neces-
sary changes in the bore, he was required at any time to move more
than that amount of material, he should be paid therefor as for extra
work at the contract rate. In other words, it is said that this clause of
the spécifications was not intended to deprive the Tunnel Company of
the power reserved to itself in the contract to make such changes in the
bore of the tunnel as it found necessary to make, but rather to protect
the contractor and insure him adéquate compensation for his work if
such changes necessitated the excavation of more than 9.91 cubic yards
of material in advancing the tunnel i foot.
With référence to thèse contentions, it is to be observed that the
changes in the height and width of the tunnel did not in fact increase
518 129 FEDERAL KEPOETBE.
its "end area," if thèse words are taken literally, because the change was
not made until work at each end had proceeded some distance, and
the end areas do not appear to hâve been altered. Thèse words, how-
ever, should not be read literally. The last observation is made for the
purpose of showing that the vi^ords "end area" admit of some latitude
of construction, and that the contract, considered as a whole, must re-
ceive a reasonable interprétation, having référence to the situation of the
parties when it was made, and the character and magnitude of the en-
terprise to which it related, as well as the uncertainty concerning the
difficulties that might be encountered as the work progressed. We
entertain no doubt that the Tunnel Company intended to reserve the
power to make such reasonable changes in the bore of the tunnel as the
necessities of the work might require. Indeed, we can scarcely con-
ceive that a company engaged in constructing a tunnel nearly two miles
in length through a high mountain, and being at the time ignorant of
the character of the materials and the obstructions which it might en-
counter, would deliberately agrée that the size of the bore should not
be increased even a few inches. It is customary, so far as we hâve
observed, for companies which are engaged in the prosecution of such
great enterprises as the one in hand to reserve a large power of control
over the work, as well as the right to make such reasonable changes in
the original plans for doing the same as the circumstances of the case
may deniand ; but, whether customary or not, the power in question was
reserved by the Tunnel Company in the clearest language by the con-
tract which it entered into with Keefe, the provision being that it should
"hâve the right to make such changes in the amount, dimensions or
character of the work to be done as in the opinion of the chief engineer
the interests of said work or of the company may require." And we can
scarcely conceive that after having its attention directed to this subject,
and :ifter reserving this power, it intended to relinquish it by the provi-
sion contained in the spécifications against increasing the "end area,"
as it did do if that clause is understood to prohibit a change in the bore
of the tunnel to any extent that would enlarge its cubical contents.
For thèse reasons we are of opinion that the clause found in the spécifi-
cations against increasing the "end area" does not mean that the Tunnel
Company should not enlarge the dimensions of the bore of the tunnel
to any extent, but that it means rather, as the Tunnel Company claims,
that the bore of the tunnel should not be so enlarged as.to compel the
contractor, in driving it l lineal foot, to excavate more than 9.91 cubic
yards of material for the sum of $62.50, and that, if so enlarged as to
require the removal of a greater quantity of material, he should receive
extra pay.
If the foregoing is not the true interprétation of the clause found
in the spécifications against increasing the "end area," and if the lan-
guage employed means necessarily that the bore of the tunnel should
not be enlarged to any extent, then we should be of opinion that the
clause in question is in conflict with the provision of the contract here-
tofore quoted, and is controlled thereby. It is one of the fundamental
rules for the construction of agreements that, when a contract is pre-
pared on a printed form, words in writing prevail over words in print.
This is uf>on the theory that words in writing express the actual and
DALr V. BUSK TUNNEL EY. CO. 519
final intent of the parties, and that clauses in conflict therewith which
may be found in print were probably overlooked, and should not be
given the same weight as words in writing that were consciously em-
ployed by the contracting parties. Hernandez'v. Sun Mutual Life
Ins. Co., 6 Blatchf. 317, 12 Fed. Cas. 34, 37; Duffield v. Hue, 129 Pa.
74, 18 Atl. 566, 568; Chadsey v. Guion, 97 N. Y. 333, 339; Bishop on
Contracts, § 413; Am. & Eng. Ency. of Law (2d Ed.) vol. 17, p. 21.
We think the reasons upon which this rule of interprétation is founded
are applicable to the case in hand. The contract proper, that is, the type-
written part, was prepared with especial référence to the construction
of the Busk Tunnel, and no other. Every clause which it contains must
be presumed to hâve passed under the scrutiny of the contracting par-
ties, and to express their real purpose. The spécifications, on the
other hand, were not so prepared, but were kept in stock in the engi-
neer's office for his convenience, to be attached, when occasion required,
to contracts for whatever work he might hâve occasion to let. It is
reasonable to présume that they were not carefully revised and re-read
on ail occasions when they were appended to a contract, but that they
were sometimes annexed without revision, on the assumption that they
were not substantially in conflict therewith. Particular clauses found in
an instrument of that kind should not, in our judgment, be accorded the
same weight in arriving at the intention of the contracting parties as
stipulations found in the contract itself, provided they are at variance.
And this is so, we think, although the contract may contain a clause
declaring that a paper attached thereto forms a part thereof. We ac-
cordingly conclude that the changes which were made in the height
and width of the tunnel were made in pursuance of an authority re-
served to the engineer in charge of the work to make such changes, and
that they did not operate, as claimed, to release the surety from his
liability on the contractor's bond.
This brings us to a considération of the question whether the surety
was released from his obligation on the bond because reserved per-
centages to the amount of $61,000 were paid to the contractor in ad-
vance of the completion of the tunnel. The contract provided, in sub-
stance, that approximate estimâtes of the value of the work donc should
be made on or about the last day of each month, and that the amount
of said estimâtes, less 10 per cent., should be paid to the contractor, and
that the reserve percentage should be withheld by the Tunnel Company
until the final completion and acceptance of the work; also that the
contractor should be subject to the laws of the state of Colorado re-
garding liens for hbor or materials furnished for the work, and should
protect or indemnify the Tunnel Company against ail claims upon it or
liens upon the premises for labor or materials furnished, and that the
Tunnel Company might, whenever it deemed proper and expédient to
do so, pay to the laborer or other persons employed by the contractor,
or who had furnished materials for said work, out of any moneys due
for any monthly or other estimâtes, any sums due for labor, services,
or materials under the contract, and might charge the payments to the
contractor as so much paid on his contract. As early as February 21,
1891, Keefe, the contractor, appears to hâve become involved in debt for
labor and materials furnished in constructing the tunnel, which he was
520 120 FEDEKAL REPORTEE.
unable to pay. He applied to the Tunnel Company for relief, and on
that occasion, and three others between that date and June 6, 1893, he
was paid, on account of the reserved percentages, various sums amount-
ing in the aggregate to $61,000. Thèse payments, as it is claimed, hav-
ing been made contrary to the terms of the contract, released the sure-
ty. We are satisfied, however, that the plaintiff's intestate was cliarge-
able with knowledge that thèse payments had been made to Keefe be-
fore he conipromised his liability on the bond by the payment of $22,-
500 on October 28, 1895. The testimony shows that when the plain-
tiff's intestate was called upon to discharge his liability on the bond,
after Keefe had abandoned the work, and as early as the month of
May, 1894, he employed a capable attorney residing at Denver, Colo.,
to examine into the merits of the claim and protect his interests, and
that he later gave his attorney full authority to represent him in nego-
tiating a settlement. The Tunnel Company was represented by an at-
torney who also resided in Denver. From that time forward until
October 28, 1895, negotiations looking to a compromise were in prog-
ress between the two attorneys, and they seem to hâve been conducted
with great délibération. In the meantime ail the information relating
to the controversy which was called for by counsel who represented the
plaintiff's intestate was promptly furnished by the Tunnel Company
without réservation, and without any apparent effort to conceal any
material fact or circumstance relating to its dealings with the contractor.
Indeed, counsel for the plaintiff's intestate who conducted thèse negotia-
tions exonérâtes the attorney of the Tunnel Company from ail char-
ges of fraud or the suppression of material facts, by the admission,
made under oath, that the negotiations looking to a settlement were
conducted with entire good faith on both sides. As early as July 2,
1894, the attorney who represented the plaintiff's intestate was furnish-
ed with a statement of account between the Tunnel Company and the
contractor, which showed that the contractor had been paid by the Ttm-
nel Company $647,259.64 on account of work donc. On August 24,
1895, he was handed a letter and a statement which showed that' the
value of the work donc by the contractor up to July 21, 1893, when he
abandoned the contract, amounted to $662,923.60 at contract rates,
and that the work thereafter donc by the Tunnel Company to finish the
tunnel amounted in value to $77,771.85. A letter written by the same
attorney to the plaintiff's intestate of date October 10, 1895, shows
Gonclusively that he understood and advised his client at that time that
the Tunnel Company had paid Keefe in ail the sum of $647,259.64, and
that it only owed him, when he abandoned the work, the sum of $17,783.-
96. Knowing, as he did, that the total value of the work which had been
done by Keefe, estimated at the contract price, was $662,923.60, and
that he had been paid something over $647,000, he must hâve been
aware that the greater part of the reserved percentages had already
been paid to the contractor. Moreover, it is shown by the testimony
that the various receipts which were given by the contractor for money
paid to him out of the reserved percentages were handed to an account-
ant whom the attorney for plaintiff's intestate had employed to examine
the various statements and vouchers relating to the construction of the
tunnel, and that thèse receipts thus placed in the hands of the accountant
DALT V. BUSK TUNNEL BT. 00.
521
showed on their face out of what fund and on what account the pay-
ments in question had been made. It is manifest, we think, that, if
the compromise was made while plaintifï's intestate was ignorant of the
fact that Keefe had received $61,000 out of the reserved percentages,
such ignorance was due to a failure on his part, or that of his agent,
to draw a proper inference of fact from facts which were communi-
cated ; and, where one pays money to settle threatened Htigation under
such circumstances, it cannot be said that he pays it under a mistake of
fact. He pays it rather with a knowledge of facts which the law im-
putes.
The case has been argued in this court by leamed counsel for the
plaintiff in error upon the theory, apparently, that it was the duty of the
attorney who represented the Tunnel Company to specially invite the
attention of the opposite party to the fact that the greater part of the
reserved percentages had been paid, and that such was his duty, because
the claim was against a surety, and for that reason involved the exer-
cise of the highest degree of good faith. Conceding, for the purposes
of the présent case, that a higher degree of good faith was requisite
than in ordinary cases, because the rights of a surety were involved,
we cannot accède to the proposition that an obligation rested on the
attorney for the Tunnel Company to invite spécial attention to the fact
that the reserved percentages had been in great part paid. It was suf-
ficient, we think, to advise the opposite party what was the total sum
earned by Keefe, and how much of the sum earned had in fact been
paid. He was dealing with a compétent attorney who had been em-
ployed by the surety to attend to his interests, who was doubtless well
acquainted with the provisions of the contract between Keefe and the
Tunnel Company, and fully qualified to décide whether the right to
recover against his client had been impaired by the payments that had
been made, the extent of which he well knew. Although he represented
a surety, he was not wholly absolved from the duty of making inquiries
or déductions from facts within his knowledge, nor was he privileged
to rely blindly on such information as the opposite party saw fît to
communicate, without seeking other information that might be of ad-
vantage to his client. It is most probable, we think, that the attorney
for the Tunnel Company regarded the payments that had been made
to the contracter as payments which it had the right to make under
the provisions of the contract reserving to it the right to discharge
claims for labor, services, and materials which might become a lien on
the tunnel, and it may be that he was right in that view of the case,
although no opinion need be expressed on that question. For, whether
that view is right or wrong, he communicated enough facts to the op-
posing party to bring the question sharply to his attention, and he was
not required to go further. The law favors the compromise of doubt-
ful claims, and the avoidance of Htigation is a sufficient considération to
support such agreements, even though it eventually appears that, if the
demand had been litigated, no recovery could hâve been had. It will
not suffer them to be set aside on slight grounds. Cleaveland v. Rich-
ardson, 132 U. S. 318, 10 Sup. Ct. 100, 33 L. Ed. 384; Hager v. Thomp-
son et al., I Black, 80, 94, 17 L. Ed. 41 ; Graham v. Meyer, 99 N. Y.
611, I N. E. 143; Swem V. Green, 9 Colo. 358, 364, 12 Pac. 202;
522 129 FEDERAL EBPORTEB.
Brooks V. Hall, 36 Kan. 697, 14 Pac. 236; Grandin v. Grandîn, 49
N. J. Law, 508, 514, 515, 9 Atl. 756, 60 Am. Rep. 642. In the présent
instance it is certainly true that there was sufficient doubt of the ability
of the plaintiff's intestate to make a successful défense against the
claîm, which was preferred against him by the Tunnel Company, to
sustain an agreement of compromise, and, as it was made without the
semblance of fraud, and without the suppression of any facts within the
knowledge of the Tunnel Company which it was bound to disclose, we
think it should be upheld.
The judgment below is accordingly affirmed.
CHICAGO, M. & ST. P. EY. CO. v. VOELKER.
(Circuit Court of Appeals, Eighth Circuit March 26, 1904.)
No. 1,842.
1. Raileoads— Automatic Cotjplers—Statutes— Construction.
Act March 2, 1893, c. 196, 27 Stat. 531 [3 U. S. Comp. St. 1901, p. 3174].
provides that after January 1, 1898, it shall be unlawful for any coni-
mon carrier, engagea in Interstate commerce by rallroad, to haul or per-
mit to be hauled or used on its Une any car used in moving interstate
traffic not equipped with conplers "coupling automatically by Impact, and
which can be uncoupled without the necessity of men golng between the
ends of the cars." Code lowa 1897, §| 2097, 2080, déclares that after the
eame date no corporation operatlng a rallroad shall hâve upon such rall-
road In that State any car that is not equipped with "automatlc couplers
so constructed as to enable any person to couple or uncouple them with-
out going between them." Held, that the test to be applied by both of
sald acts, vlz., whether the person operatlng the coupler is required to go
between the ends of the cars, applles to the act of coupling as well as
that of uncoupllng, and that the act of Congress forbids the use of a
coupler which requires the operator to go between the ends of the cars to
prépare the coupler for the impact.
2. Act of Coupling Cars.
The préparation of the coupler for the Impact Is not distinct from the
act of coupling. The préparation and the impact are connected and indis-
pensable parts of the larger act, which is regulated by the statute, and
the performance of which is intended to be relieved from unnecessary rlsU
and danger.
3. Statutes— Construction.
Statutes, the purpose of which Is the protection of the lives and limbs
of men, are go construed as to prevent the mlschlef and advance the
remedy, so far as the words fairly permit.
4. Statutes— Interprétation.
Punctuation Is a minor, and not a controlllng, élément in Interprétation,
and courts will disregard the punctuation of a statute, or repunctuate it,
if need be, to glve efCect to what otherwise appears to be its purpose and
true meanlng.
5. Defective Car Coupmrs — Actionable Négligence.
Where an automatlc car coupler had been permltted to become and ro-
main defective so that the lever would not lift the pin from the socket
and the knuckle could not be drawn open by leaniug toward the coupler
and using one hand, but required the présence of the operator's entire
body between the ends of the cars and between the drawbars, and the
use of both of hls hands, such coupler dld not satlsfy Act March 2,
1803, c. 196, 27 Stat. 531 [3 U. S. Comp. St. 1901, p. 3174], or Code lowa
1897, §§ 2097, 2080, requiring the use of automatlc car couplers not requir-
523
ing the présence of any person between the ends of the cars In order to
operate the same; and the use of such defectlve coupler coustltuted ac-
tionable négligence.
6. Intebstate Teaffic— Tempoeaet Suspension or Transit.
A shipment, originatlng in one state and being inoved to a point in
another state, is impressed with the character of Interstate trafflc, which
wlll follow the shipment until the actual transit ceases. A car used in
moving such shipment remalns subject to Act March 2, 1893, c. 190, 27
Stat. 531 [U. S. Oomp. St. 1901, p. 3174], until its use in moving the ship-
ment is ended, notwithstanding the transit may be temporarily, but not
indeflnitely, suspended ; and this, whether the ultimate destination of
the shipment be near to or remote from the point of suspension.
7. Pétition— Objections at Tkiai/— Variance— Appeal.
Where, in an action for wrongful death of a switchman by reason of
an alleged defectlve coupler attached to a car used in moving traffic,
défendant offered no objection to évidence whieh, without conflict, estab-
lished the Interstate character of the commerce in which défendant was
engaged and of the trafflc being moved by the car in question, and in
excepting to the instructions applylug Act March 2, 1893, c. 196, 27 Stat.
531 [U. S. Comp. St. 1901, p. 3174], to the case, défendant did not place
its exceptions on the ground that the pétition did not state a case arising
within Interstate commerce, such objection was not available on appeal.
8. Automatic Couplées— Wheee Defective No Assumption of Risk.
Under Act Cong. March 2, 1893, c. 196, § 8, 27 Stat 532 [3 U. S. Comp. St.
1901, p. 3176] providing that any employé of an Interstate carrier who
may be injured by any car in use contrary to the provisions requiring the
use of automatic eouplers shall not be deemed thereby to bave assumed
the risk, though he continue in the employment of such carrier after the
unlawful use of such car, etc., bas been brought to bis knowledge, a
svrltchman engaged in handling a freight car having a détective coupler,
on a track princlpally used for handling freight trains, though sometimes
used to handle cars in need of repairs, did not assume the risk arising
from the defect in the coupler; the car not having been marked or iso-
lated as one in bad repair, and its movement at the time not being with
a View to its isolation or repair.
9. CONCUBKING ACTS OF NEGLIGENCE— INSTRUCTIONS.
Where a right of recovery was rested upon each of two separate and
concurring acts of négligence, It was the right of each party to hâve the
jury correctly instrueted respeeting each act of négligence, the same as
if the right of recovery rested upon it alone ; and, if there was material
error in the instructions given or refused respeeting either charge of négli-
gence, the verdict, where gênerai, cannot stand.
10. CusTOM TO Kick Cars without Notice to Fieldman— Assumption of
Risk.
Where It was the gênerai and uniform custonj in a railroad yard to
kick cars down to a fieldman without giving him notice or warning, a
fieldman who was aware of such custom and remained in that service as-
sumed the risk of Injury arising from the observance of the custom.
In Error to the Circuit Court of the United States for the Northern
District of lowa.
For opinion below, see Ii6 Fed. 867.
This was an action to recover damages for the death of Emll Voelker,
occurring while he was engaged in coupling cars at Dubuque, lowa, in the
service of the rallway company. After describing défendant company as a
Wisconsin corporation "engaged in operating a Une of rallway through the
If 8. Assumption of risks incident to employment, see note to Chesapeake
& O. R. Co. V. Hennessey, 38 0. C. A. 314.
H 10. See Master and Servant, vol. 34, Cent. Dig. § 596,
524 120 FEDERAL EEPOliTEll.
State of lowa," and liaiing upon one ot Its yard tracks at Dubuque "a
loaded car, which was to form a part of a train then being made up * * *
for early movement," and after describing Voelker as a car coupler and field-
man in the switching crew which was making up thls train, the pétition
charged two acts of négligence on tbe part of the Company as proxlmate
causes of Voelker's death : (1) "Défendant negligently permitted tbe coupler
on the northerly end of sald car to become and remain inoperative and de-
fective in that the link Connecting the lever and the pin was loose, broken, and
disconnected, so that the pin and coupler could not be operated by means
of the lever, and the sald coupler was so old, worn, and rickety that the pin
could not be ralsed because of the tumbler pressing and resting agalnst the
frame of the coupler, thus making it necessary, in order to operate tlie
coupler, to go between the cars, insert the hand in the coupler, push tbe
tumbler away from the frame, and then raise the tumbler and pull tbe
knuckie open. * * * Défendant knew, or by the exercise of ordinary dili-
gence could and should hâve known, of the defective and inoperative condi-
tion of the coupler aforesald, before the death of sald Voelker, and in time
to hâve remedied the same." (2) "The gênerai practice recognlzed and known
by défendant, then and many years prlor thereto in force, was for car
couplers to go between the cars and open the knuekles whenever the same
could not be operated by means of the lever." Voelker accordingly went be-
tween thls and another car, whlch were separated a few feet, "to open tbe
knuckie, in order that the coupling might be made by impact; and whlle
thus engaged, and unaware of the danger to whlch he was exposed, sald
switching crew, while actlng wlthin the scope of their employment, and
knowing that sald Emll Voelker went between said cars to couple the same,
negligently caused two or more other cars to be kiclîed with great force
* * « agalnst the cars between whlch said Emil Voelker was thus oc-
cupied, • * • without signal from him, although the gênerai practice
then and long prier thereto required that said cars be not moved while he
was thus occupied between the cars, without signal from hlm."
Defendant's answer denled the statements of tbe pétition other than those
relating to the citlzenship of the parties, charged that Voelker's death was
the resuit of his own contributory négligence, and alleged that the track
where he was injured was prlor to and ail during his service used to set out
and handle thereon cars haviug some defect in them and needing repairs, as
well as other cars not defective ; that thls was known to him, or could hâve
been ascertained by the exercise of ordinary eare; that with thls knowledge
or means of knowledge he remained in the company's service, and contlnued
to work on that track without objection or complalnt, and therefore assumed
the risk of meeting and working with defective cars at that place.
At the trial thèse facts were established: The car in question was loaded
with coal, and was brought by défendant over its Une of rallroad from a
station thereon in the state of Illinois, and reached defendant's yards at Du-
buque, lowa, about 5 o'clock in the afternoon. About 8 o'clock tbe next morn-
Ing, when the injury to Voelker occurred, the car was on a freight track
prlnclpally or largely used in receiving Incomlng freight trains and making
up outgoing freight trains. A switching crew, in which Voelker was actlng
as car coupler and fleldman, was then engaged in shlfting about and coupling
this coal car and several other loaded cars. Whlle Voelker was between the
coal car and another car separated by a distance of about 10 feet, and
was engaged in adjustlng the coupler on the coal car so that it would couple
automatically upon impact, the two cars came together, catching hlm between
the drawbars, and crushed him to death. He was 29 years old, and had been
in defendant's service as brakeman and switchman 8 years. In respect of
several other matters the évidence was conflicting. The jury returned a ver-
dict for plaintlfC, on which judgment was rendered, to reverse which the
rallroad company prosecutes this writ of error.
W. J. Knight and H. H. Field, for plaintiff in error.
H. C. Kenline and J. J. McCarthy (R. P. Roedell, on the brief),
for défendant in error.
George Crâne, Asst. U. S. Atty., amicus curiœ.
CHICAGO, M. & ST. P. ET, CO. V. VOELKEB. 523
Before SANBORN, THAYER, and VAN DEVANTER, Circuit
Judges.
VAN DEVANTER, Circuit Judge, after stating the case as above,
delivered the opinion of the court.
It is entirely clear that the trial proceeded upon the theory that
plaintiff's pétition charged two acts of négligence on the part of the
railway company as proximate causes of Voelker's death : First, per-
mitting the coupler upon the coal car to become inoperative and dé-
tective; and, second, kicking or sending other cars against the cars
between which Voelker was engaged without a signal from him, and
contrary to a gênerai and established practice. Each party, without
objection from the other, introduced évidence bearing directly upon
each charge of négligence, and not otherwise relevant to the issues.
The court also instructed the jury upon this theory. The contention
on behalf of the railway company that the case was tried upon the
theory that the pétition charged the négligent kicking or sending of
other cars against those between which Voelker was engaged as the
sole proximate cause of the injury is not supported by the record, but
is refuted by it. The évidence relating to the condition of the coupler
on the coal car was conflicting, but substantial évidence was produced
by plaintiff to the effect that it was equipped with a coupler known
as "Hein No. i," which originally, and when in good condition, could
be prepared for coupling and would couple automatically by impact,
without the necessity of any one going between the ends of the cars
in the sensé of putting the body entirely between them, but that at
the time of the injury to Voelker this coupler had become so defective
and inoperative that when the knuckle thereof was closed it was
necessary for some one to go completely between the cars to open it,
and thereby prépare the coupler for the impact; that this condition
of the coupler had existed for such a length of time as to charge the
railway company with notice ; and that at the time of the injury the
knuckle was closed, and, in the discharge of his duty as a switchman,
Voelker was entirely between the ends of the cars engaged in pre-
paring the coupler for the impact by opening the knuckle, a task
made difficult by the defective and inoperative condition of the coupler.
In view of this évidence, and the established facts shown in the
statement before made, the court, in substance, said to the jury that
it would be assumed that they would find from the évidence that
défendant was a common carrier engaged in Interstate commerce by
railroad, and that the coal car was being used by défendant on its
line of railroad in moving Interstate traffic, and then instructed them
that the branch of the case resting upon the condition of the coupler
was controlled by the act of Congress of March 2, 1893, c. 196, 27 Stat.
531, 3 U. S. Comp. St. 1901, p. 3174, relating to safety appliances to
be provided and maintained by such common carriers. This is as-
signed as error, and in support of the assignment it is urged: First.
That the act of Congress does not forbid the use of a car having an
automatic coupler "to prépare which for the impact" it is necessary
to go between the ends of the cars, but is satisfied with a coupler
which, when so prepared, will couple automatically by impact; that
526 129 FBDBEAL REPORTEE.
the terms of the congressional act are such "that the test of a man
going between the ends of the cars is applied to uncoupling only,
and that no such test is applied to coiipling"; and that plaintiff's
pétition and the évidence show Voeiker "was net attempting to make
a coupling," but was simply opening the knuckie of the coupler, the
defect in which, if it were defective, did not prevent it from coupling
automatically by impact when open, but merely rendered it more diffi-
cult to open the knuckie or prépare the coupler for the impact. Sec-
ond. That there is no évidence but that the car had reached its desti-
nation, or that it was intended to be thereafter used in moving Inter-
state traffic. And, third, that plaintiff's pétition does not allège that
défendant was a common carrier engagea in Interstate commerce by
railroad, or that the coal car was being used on defendant's line of
railroad in moving Interstate traffic, and therefore does not state a case
controlled by the act of Congress.
The first section of the safety appliance act of Congress of March
2, 1893, requires "every common carrier engaged in Interstate com-
merce by railroad" to equip its engines and trains used in moving In-
terstate traffic with a System of train brakes which will enable the en-
gineer to control the speed of the train. The second section déclares :
"That on and after the flrst day of January, eighteen hundred and ninety-
eight, it shall be unlawful for any such common carrier to haul or permit
to be hauled or used on its line any car used in moving interstate traffic not
equipped with couplers coupling automatically by impact, and which can be
uncoupled without the necessity of men going between the ends of the cars."
A statute of lowa enacted April 6, 1892 (sections 2097, 2080, Code
1897), déclares:
"After January 1, 1898, no corporation, company or person, operating a
railroad, or any transportation company uslng or leasing cars, shall hâve
upon such railroad In this state any car that is not equipped with such safety
automatie coupler," namely : "with automatic couplers so constructed as to
enable any person to couple or uncouple them without going between them."
While there is some différence in the words by which thèse statutes
describe the type of coupler with which each requires cars coming
within its opération to be equipped, we think both apply the test of
whether the person operating the coupler is required to go between the
ends of the cars to the act of coupling as well as to that of uncoupling.
The risks and dangers which attended the old link and pin System
when couplings and uncouplings were effected by going between the
cars were such a menace to the lives and limbs of those employed in
that branch of the railroad service, and thèse risks and dangers inhered
so largely in the act of going between the cars, whether in the act of
coupling or uncoupling, that there can be no doubt of the purpose of
the congressional enactment as well as of that of the state to obviate
and prevent this act of exposure, which the invention and use of auto-
matic couplers had demonstrated to be wholly, or at least largely, un-
necessary. The state statute plainly and without uncertainty calls for
"automatic couplers so constructed as to enable any person to couple
or uncouple them without going between them." If there be uncer-
tainty in the congressional act, it is obviated by merely inserting a
comma after the word "uncoupled" in that portion of the act which
CHICAGO, M. & ST. P. ET. CO. V. VOELKEK. 527
calls for "couplers coupling automatically by impact, and which can
be uncoupled without the necessity of men going between tlie ends of
the cars." The concluding phrase then hterally appHes to both the
coupling and uncoupling. Punctuation is a minor, and not a con-
trolîing, élément in interprétation, and courts will disregard the punctu-
ation of a statute, or re-punctuate it, if need be, to give effect to what
otherwise appears to be its purpose and true meaning. Hammock v.
Loan & Trust Co., 105 U. S. yy, 84, 26 h. Ed. iiii ; United States v.
Lâcher, 134 U. S. 624, 628, 10 Sup. Ct. 625, 33 L. Ed. 1080; United
States V. Oregon, etc., Railroad, 164 U. S. 526, 541, 17. Sup. Ct. 165,
41 L. Ed. 541 ; Ford v. Delta, etc., Co., 164 U. S. 662, 674, 17 Sup.
Ct. 230, 41 L. Ed. 590 ; Stephens v, Cherokee Nation, 174 U. S. 445,
480, 19 Sup. Ct. 722, 43 L. Ed. 1041 ; Sutherland, Statutory Construc-
tion, § 232. Obviously, the purpose of this statute is the protection
of the lives and limbs of men, and such statutes, when the words fairly
permit, are so construed as to prevent the mischief and advance the
remedy. The mischief to be prevented rested quite as much in the
act of coupling as in the act of uncoupling. Science had offered, and
practical use had approved, a remedy applicable not alone to the act
of uncoupling, but also to that of coupling. The two statutes, fédéral
and State, seem to hâve been enacted in pursuance of a common pur-
pose to afford a remedy as broad as the mischief, and to remove the
source or cause of the latter through the compulsory adoption and
use of a new System of coupling and uncoupling which dispensed
with the necessity of any one going between, or at least entirely be-
tween, the cars.
The contention that the préparation of the coupler for the impact
is distinct from the act of coupling is a mistaken attempt to sepa-
rate a part of an act from the whole. The préparation of the coupler
and the impact are not isolated acts, but connected and indispensable
parts of the larger act, which is regulated by thèse statutes, and the
performance of which is intended to be relieved of unnecessary risk
and danger.
Counsel for the railroad company deny, and opposing counsel affirm,
the existence at the time of the enactment of this législation of any
automatic coupler which could be prepared for the impact or coup-
ling by manipulating a lever or otherwise, without placing any portion
of the body between the ends of the cars. The real situation then
existing, if shown by évidence produced at the trial, or by something
of which judicial notice could be taken, might hâve an important
bearing upon the true meaning of thèse statutes in respect of the
extent to which it was intended to dispense with the necessity of going
between the cars; but no évidence upon this point was presented by
either party, and counsel hâve not attempted to call our attention
to anything which sustains either of their opposing assertions. An
exaniination of public documents, possibly within the range of judicial
notice, tends to confirm the assertion of counsel for plaintiff that such
couplers were in existence and in actual use at that time, but we
think a détermination of this question is not necessary to a décision
of this case. There is no doubt under the évidence but that this "Hein
No. l" coupler, when in reasonably good condition, is operated in
528 129 FEDERAL EEPOKTEK.
this manner: The switchman, by depressing with one hand a lever
at the corner of the car, lifts the pin from the socket in the coupler,
and, leaning toward the coupler, readily draws the knuckle open with
the other hand, an act which is performed in a brief space of time,
with slight exertion, and without placing the body completely between
the ends of the cars. Plaintifï's pétition complains, not of the type
of coupler with which this car was equipped, but that défendant
negligently permitted it to become and remain so defective and eut
of repair that it could not be operated in the usual manner; that the
pin could not be lifted by means of the lever ; and that it was neces-
sary "to go between the cars, insert the hand in the coupler, push
the tumbler away from the frame, and then raise the tumbler and
pull the. knuckle open." In their brief, counsel for plaintiff concède
that, if the coupler is operative and in good condition, "this is a
reasonably safe method of making the coupling," and that whether
this coupler, when in such condition, fully conforms to the congres-
sional or state statute "is not a vital question in this case." For the
présent purposes it will therefore be assumed — a décision upon the
question being unnecessary — that this coupler, if in . reasonably good
condition, satisfied both statutes. But the évidence produced by plain-
tiff tended to show that the coupler was not in reasonably good
condition ; that it had been permitted to become and remain defective
and inoperative; that the lever would not lift the pin from the socket;
that the knuckle could not be drawn open by leaning toward the
coupler and using one hand, but to open it required the présence
between the ends of the cars, and between the drawbars, of the
entire body of the person attempting it, and also the use of both hands,
considérable strength, and more than the usual time; ail of which
greatly increased the risk and added to the danger of the undertak-
ing. If this was the true condition of the coupler at the time of the
injury, it did not satisfy either statute, and its use was violative of one
or the other of them, and constituted actionable négligence.
Whether the violation was of the congressional act or of the state
statute depended upon whether défendant was a common carrier en-
gaged in interstate commerce by railroad, and was using the car in
question on its line of railroad in moving interstate traffic. We think
there was évidence that the carriage or movement of the coal with
which the car in question was loaded had not terminated, and that the
coal was still actually in transit. The évidence contains no suggestion
that the car had reached the end of its journey, or that it was to remain
indefinitely or for any considérable time on the track where it was
at the time of the injury, or that the coal was to be unloaded there.
The inference to be reasonably drawn from the évidence is that the
car was then about to actively continue the journey toward the ulti-
mate destination of the coal which it was carrying. Whether that
was near by or remote is not material, because the shipment had
originated in another state, and was already impressed with the char-
acter of interstate traffic, which would follow it at least until the
actual transit ceased. Défendant was clearly shown to be a common
carrier engaged in interstate commerce by railroad, and to be using
the car mentioned on its line of railroad in moving interstate traffic.
CHICAGO, M. ic ST. P. BT. CO. V. VOELItEK. 529
and therefore the branch of the case relating to the condition of the
coupler is controlled by the act of Congress, and not by the state stat-
ute. Plaintiff's pétition states clearly enough that défendant was a
common carrier engaged in commerce by raiiroad, and that it was
iising this car on its line of raiiroad in moving trafEc. As stated, the
case falls short of coming within the act of Congress only in that the
pétition does not allège the interstate character of the commerce in
which défendant was engaged, or of the traffic which the car was
moving. But, whether the case stated is controlled by the act of
Congress or the state statute, it is one of actionable négligence, the
right and measure of recovery for which are the same in either event,
and are to be ascertained and enforced by the same rules. Other allé-
gations bring the case equally within the jurisdiction of the Circuit
Court, whether the violation was of one statute or of the other. De-
fendant offered no objection to the évidence, which without conflict
established, as before shown, the interstate character of the com-
merce in which défendant was engaged, and of the traffic being
moved by the car mentioned; nor does it appear that in excepting
to the instructions by which the court applied the act of Congress to
this branch of the case, défendant put its exception upon the ground
that the pétition did not state a case arising in interstate commerce.
Plaintiff was entitled to be seasonably apprised of the objection if
it were intended to be relied upon, and doubtless the court would
hâve permitted an amendment of the pétition, as it is manifest the
défendant was not misled or surprised by the variance. Under the
circumstances the pétition may well be considered as having been
amended to conform to the facts proved. Code lowa 1897, §§ 3597,
3600; Rev. St. U. S. § 954 [U. S. Comp. St. 1901, p. 696] ; Roberts
v. Graham, 6 Wall. 578, 581, 18 L. Ed. 791 ; Nashua Savings Bank v.
Anglo-American, etc., Co., 189 U. S. 221, 231, 23 Sup. Ct. 517, 47 L.
Ed. 782 ; Haley v. Kilpatrick, 44 C. C. A. 102, 104, 104 Fed. 647. We
are of opinion that no error was committed in instructing the jury
that the branch of the case resting upon the condition of the coupler
was controlled by the act of Congress.
It is assigned as error that the court, in effect, instructed the jury
to disregard the défense of assumption of risk based upon the allé-
gation, in defendant's answer, that the track on which the coal car
was standing was used "to set out and handle thereon * * * cars
having some defect in them and needing repairs, as well as other
cars not defective," and that this was known to Voelker, or could
hâve been ascertained by him by the exercise of ordinary care. The
allégation is not that this was a hospital track, specially designed or
used for isolating or holding cars in need of repair or for repairing
them, or that the car in question was being moved with a view to its
isolation or repair. Section 8 of the controlling act of Congress dé-
clares :
"That any employée of any such common carrier who may be Injured by
any locomotive, car, or train in use contrary to the provision of this act shall
not be deemed thereby to hâve assumed the risk thereby occasioned, although
continuing in the employment of such carrier after the unlawful use of such
locomotive, car, or train had been brought to his knowledge."
129 F.— 34
530 129 FEDERAL REPORTEE.
The évidence, without any substantial conflict, showed that this
track was principally used in actively handling freight trains and
freight cars; that incoming trains were received thereon and the cars
distributed therefrom ; that outgoing trains were made up thereon
and dispatched therefrom; that incoming trains sometimes brought
thereon cars in need of repair, and in some instances such cars were
temporarily transferred thereto from other tracks; that there was
in the yards at Dubuque a hospital track specially designed and used
for isolating and holding cars in need of repair; that the practice
W'as to inspect the cars of incoming trains, and to mark those found
in need of repair, commonly termed "bad order" cars, in such manner
as to indicate their condition, preparatory to their proper disposition,
and as a warning to thosê handHng them; and that at the time of
the injury this car had not been marked or isolated as in bad order.
There was no évidence that Voelker was engaged in moving the car
as one in bad order, with a view to its isolation or repair. Of this
évidence it is sufficient to say that, working under such circumstances
with a car in use contrary to the congressional act does not, in the
piesence of section 8, amount to an assumption of the risk arising
therefrom, and the court very properly instructed the jury to that efïect.
As shown in the statement before made, plaintifï's pétition rested
the right of recovery upon two acts of négligence on the part of
défendant, and, as stated in the brief ol counsel for plaintiff: "The
case was tried to the jury upon the theory that the injury was the
resuit of two concurring or proximate causes: (i) The defective
and nonautomatic coupler; and (2) the négligent kicking down of
the second eut of cars." It was therefore the right of each party
to hâve the jury correctly instructed respecting each of the claimed
acts of négligence the same as if the right of recovery rested upon
it alone; and, if there was material error in the instructions given
or refused respecting either charge of négligence, the verdict, being
gênerai, cannot stand.
The principal allégations constituting plaintiff's second charge of
négligence were: First, the existence of a practice in defendant's
yards at Dubuque, long recognized by défendant, and amounting to
a gênerai custom, requiring, when a car coupler, also called "field-
man," is engaged between two cars in preparing them for coupling,
that other cars be not moved against those between which he is
engaged without a signal from him ; and, second, the kicki;ig or send-
ing of other cars forcibly against those between which Voelker was
engaged, without a signal from him, and with knowledge of his ex-
posed position between the cars. The évidence shows that the coal car
before mentioned was standing on a freight track distant about 800
feet from a switch which connected it with the main track; that the
switching crew, with an engine and 12 or 13 cars, approached the
switch from along the main track, and there kicked 8 or 9 of the cars
onto the freight track with suiBcient force to send them along that
track to or near the coal car; that Voelker accompanied the moving
cars, riding thereon, for the purpose of controlling their speed and of
effecting a coupling between them and the coal car; that the switch-
ing crew then kicked 2 of the remaining cars down the main track,
then kicked the other 2 cars onto the freight track with sufficient
CHICAGO, M. & ST. P. ET. CO. V. VOELKBE. 531
force to send them along that track to or near the cars first kicked
thereon, and then followed the 2 cars sent down the main track. It
was the theory of plaintiiï's évidence that the cars last kicked onto
the freight track moved along that track to the point reached by the
cars first kicked thereon, and struck them with such force as to
move them against the standing cars and cause the injury to Voelker,
who was then between the cars, and engaged in opening the knuckle
of the coupler on the coal car, as before stated. Whether the second
set of cars actually reached those first sent along the freight track
was, however, the subject of conflicting évidence, as was also Voelker's
knowledge of the intention to send a second set of cars along that
track. The switching crew did not know of Voelker's position be-
tween the cars, or that there was occasion for him to go between
them. He gave no signal to the switching crew indicating that there
was occasion for him to go between the cars, and no effort was made
by them to apprise him of the approach of the second set of cars,
excepting as it was claimed that he was informed, before leaving the
switch, of the intended sending of a second set of cars along the
freight track. While the switch and standing cars were widely sepa-
rated, the view between them was unobstructed, so that Voelker and
the switching crew could each hâve ascertained the movements of
the other with little effort. It was important, therefore, to know
whether it was Voelker's duty to take the précaution necessary to
avoid injury from an exposed position between the cars and the move-
ment of other cars, or whether it was the duty of the switching crew
to take this précaution. While the évidence respecting the practice
in switching cars and the duties to be performed by those engaged
therein was conflicting, that produced by défendant, including the
testimony of the yardmaster and of the foreman of the switching
crew under whom Voelker was employed, tended to show that the
practice long established, generally followed, and effective during
Voelker's employment, was that this duty rested upon the car coupler,
and not upon the switching crew. The custom is stated by one of the
witnesses in this manner:
"Where the cars are kicked onto a track, and a man rides down the first
eut, and goes luto the fleld, and other cars are kicked in on the same track,
it is not customary or a usual thing for the men who are kicking the car's
in to wait before kicking in a second eut, to see where the man is who rode
the first eut down. It is not customary for persons kicking In cars in that
way to hold up or refrain from kicking them in, after one set of cars is
kicked in, until they can see the man In the front, unless they get a signal
from him or something. The man who rides down the first string is called
the 'fleldman,' and he is understood to take care of himself — look out for
himself. Thèse were automatic couplers on thèse cars. The fieldman sets the
couplers so if they corne together they will catch. When he goes in, and
flnds he can't couple, and he understands other cars may corne down the
track, his duty Is to step out. He don't need to glve any signal — step out of
the way. He wouid glve no signal to the men who were kicking in the cars
on the other end, because it wouldn't be necessary. You couldn't stop the
cars, kicking them in there. It don't make any différence for that eoupling
he would let it go. It would be coupled up afterwards."
Another witness put it this way :
"Q. It wouldn't be customary to be looking for that [position of fleldman]?
A. No, sir. When we switch cars we always kick one eut in, and the fleld-
532 129 FEDERAL HEPOEXER.
inan looks eut for them, and keeps on klcklng untll you get the track flllod
np. Q. And then you would kick In eut after eut wlthout looking to the
fleldman at ail? A. Yes, sir. * * * Q. The fieldman, as I understaiid
it, is supposed to look out for hlmself? A. Yes, sir. Q. By the Cîourt: Is
there a différence betvveen the action when a switchman or fleldman is iii
for the purpose of coupling up the cars? A. If the fleldman aln't got ail
the couplings made, you get hoid with your engine, and couple them ail up."
As applicable to this state of the évidence bearing upon the second
charge of négligence, défendant requested the court to charge the
jury as follows:
"If, while Voelker was working In the yards, it was the gênerai and uni-
form custom to kick cars down to the fleldman without giving him auy notice
or vvaruing, and Voelker continued in the service, such custom being prac-
ticed or acted on, he took the risks arising from this manner of kickiug cars,
and no recovery can be liad because of injury to him caused thereby."
"If, while Voelker was working in the yard, it was the gênerai and uni-
form custom to kick cars down to a fieldman, so called, without giving him
any notice or warning, and Voelker was acting as fleldman, and cars v»'ere
kicked down to him without giving him notice or warning, and he remained
working in the yard while this custom or practice was observed, there eau
be no recovery for auy injury done him because of the kicking of cars to him
without giving notice or warning that it was to be done."
The court refused to so instruct the jury, and gave no other instruc-
tion upon the subject. We regard thèse requests as substantially the
same, and think one of them should hâve been granted. The rejec-
lion of both was error. Each is in terms carefuUy confined to the
charge of négligence in kicking or sending down the second set of
cars, and each requires that the custom should hâve been gênerai
and uniform, and that Voelker should hâve continued in the service
while the custom was being observed. If it was gênerai and uniform,
and was observed during his continuance in the service, it was
manifestly within not merely his means of knowledge, but his actual
knowledge. He was an experienced railroad employé, and was famil-
iar with this branch of that service, having been in defendant's employ
as a brakeman and switchman for a period of eight years. He there-
fore understood the dangers incident to the observance of such a
custom. There can be no claim, under the évidence, that the injury
was willfully or wantonly inflicted. Nor was the custom an unreason-
able one. Whether or not there was occasion to go between the
cars, and thus assume a position of exposure to injury from the move-
ment of other cars, would be known to the fieldman, but not to the
switching crew. His position would also enable him to judge of the
character and probable duration of the exposure better than could
be done by others. He would be primarily in a place of safety, would
know that the work in which he was engaged was, in a larger sensé,
that of moving cars and making up trains, and, being in control of
his movements, would not assume a position of danger without some
volition of his own. If, in the présence and during the observance
of a gênerai and uniform custom of the character stated, Voelker con-
tinued in the service of défendant, he assumed the risk of injury
arising from its observance.
The judgment is reversed, with a direction to grant a new trial.
BOGEN <fc TEUMMEL V, PROTTEE. 533
BOGEN & TRUMMBL v. PROTTEB.
(Circuit Court of Appeals, Sixth Circuit May 4, 1904)
No. 1,266.
L Bankkuptot— AcTS of Bankkitptcy— Suffeeing Pbefekence thbottgh Lé-
gal Pboceedings.
A debtor who does hot pay a lawful debt when due, upon which the
créditer ob tains a .ludgment against him and levies on his property, "suf-
fers and permits" the créditer to obtain a préférence, through légal pro-
ceedings, wlthin the meaiiing of Bankr. Act July 1, 1898, c. 541, § .3, subd.
3, cl. "a," 30 Stat. 546, 547 [U. S. Oomp. St. 1901, p. 3422], which, if he
is insolvent, and unless he discharges the préférence at least five days be-
fore the time for sale under the levy, constitutes an act of bankruptcy.
2. Same— BuEDEN OF Proving Solvenct— Failuee to Pboduce Books.
Under Bankr. Act July 1, 1898, e. 541, § 3d, 30 Stat. 646, 547 [U. S. Comp.
St. 1901, p. 3422], which requires a person chargea with bankruptcy, who
dénies his insolvency, to appear for examination "with his books, papers
and accounts," a merchant is required to produee such books, invoices, etc.,
as should properly be kept in his business, and which are necessary to
show the amount of his assets and liabilities, and his f allure to do so, with-
out satisfactory explanation, casts upon him the burden of proving his
solvency.
8. Same— Evidence on Issue or Insolvency.
Where a portion of the stock of goods of an alleged bankrupt was de-
stroyed by fire shortly before the flling of the pétition, and his Insurance
thereon was unadjusted, it was compétent on the issue of insolvency to
show the value of his stock before the fire as well as that remaining, and
évidence was admissible to contradict or impeach his own estimâtes or
appraisals.
In Error to the District Court of the United States for the Northern
District of Ohio.
In Bankruptcy.
Squire, Sanders & Dempsey, White, Johnson, IVIcCaslin & Cannon,
and Ames Burt Thompson, for plaintiffs in error.
R. A. Castner and L. F. McGrath, for défendant in error.
Before LURTON, SEVERENS, and RICHARDS, Circuit Judges.
RICHARDS, Circuit Judge, delivered the opinion of the court.
This was a pétition filed by the plaintiffs in error against the défend-
ant in error, Jacob Frotter, asking that he be adjudged a bankrupt on
the ground that, in violation of subdivision 3 of section 3, clause "a,"
Bankruptcy Act, he had, while insolvent, "suffered or permitted cer-
tain creditors to obtain a préférence through légal proceedings." Act
July I, 1898, c. 541, 30 Stat. 546, 547 [U. S. Comp. St. 1901, p. 3422].
Frotter answered, admitting that judgments had been rendered and
exécutions levied as averred, but denying that thereby he violated the
provision mentioned. He also denied he was insolvent, and demanded
a jury trial. Upon the trial he appeared for examination, but failed to
produce some of the books, papers, and accounts called for by the pe-
titioners. The court declined to hold that for this failure the burden
of proving his solvency rested upon him, and, having excluded sub-
î 1. See Bankruptcy, vol. 6, Cent. Dig. § 82.
534 129 FEDEEAL EEPOETEB.
stantially ail the testimony offered by the petitioners, directed a verdict
for the défendant, on the ground that the évidence did not prove in-
solvency. The case is hère upon certain assignments of error.
1. For some years prior to July 4, 1902, Frotter was engaged in tho
umbrella business in Cleveland, Ohio. His liabilities at that time
amounted to about $22,000, and he had Insurance policies aggregating
ÎSSîOOO on his stock of goods. On that day there was a fire in his store,
and thereafter he practically did no business. On August 30th he
made out proofs of loss, based upon an appraisement made by Hower,
an insurance adjuster, and others, in whicli he claimed his entire loss
by fire was $18,476.95. The insurance companies rejected thèse proofs
upon a number of grounds, and up to the time of the trial below no
amended proofs had been filed. There were conférences between Frot-
ter and his attorneys and the attorneys representing certain of his cred-
itors, at which Frotter offered to pay 40 cents on the dollar, the credit-
ors demanding 50 cents, so no agreement was reached. In October two
judgments were rendered against him, one in a suit brought by the
Wheeler & Wilson Manufacturing Company, the other in one brought
by the Rest-Henner-Smith Company, upon which exécutions issued and
levies were made, the property being advertised for sale in the first case
on October 2Sth, and in the second on October 27th. On October 24th
the pétition praying that Frotter be adjudged a bankrupt was filed. Ir
is insisted that, under the circumstances. Frotter did not "sufïer or per-
mit" thèse creditors to obtain a préférence through the judgments and
levies mentioned; that he cannot be said to "sufïer or permit" that
which he could not prevent; that, to corne within the meaning of the
law, he must hâve consciously and voluntarily co-operated with the
creditors in "obtaining" the préférence. But it was held in the case of
Wilson V. Nelson, 183 U. S. 191, 198, 22 Sup. Ct. 74, 11, 46 L. Ed. 147,
that "the act of 1898 makes the resuit obtained by the créditer, and not
the spécifie intent of the debtor, the essential fact." A debtor who does
not pay a lawful debt when due, and stands by while his creditor se-
cures a judgment against him and levies upon his property, certainly
"suflfers and permits" such judgment to be taken, levy made, and préf-
érence thereby obtained. The debtor still has the privilège of avoiding
the act of bankruptcy by discharging the préférence at least five days
before the time set for sale. But Frotter did not take advantage of
this, so the only question in his case is whether he was insolvent at the
time he committed the act of bankruptcy.
2. We hâve quoted the words of subdivision 3 defining the act of
bankruptcy charged against Frotter. Clause "d" of the same section
provides :
"Whene-cer a person against whom a pétition has been filed as hereinbefore
provlded under the second and thlrd subdivisions of thls section takes issue
wlth and dénies the allégation of his Insolvency, it shall be his duty to appear
in court on the hearlng, wlth his books, papers and accounts, and submit to
an examlnation, and glve testimony as to ail matters tendlng to establish sol-
vency or Insolvency, and In case of his failure to so attend and submit to ex-
amlnation the burden of provlng his solvency shall rest upon him."
Protter's assets at the time he committed the act of bankruptcy con-
sisted of his notes and bills receivable (put at $2,436.78), the goods on
hand after the fire, and his claim against the insurance companies.
BOGEN & TBUMMEL V. PEOTTEE. 635
The last two items, the value o£ his goods on hand after the fire and
his loss and damage by the fire, should equal the value of his goods be-
fore the fire. To ascertain, therefore, his financial condition, and dé-
termine whether he was solvent or not, it was necessary to know the
amount and value of the goods he had on hand at the time of the fire,
and to do this it was necessary to hâve the last inventory taken before
the fire, with the books showing the purchases and sales since. Under
the above provision of the bankruptcy act it was Protter's duty to ap-
pear in court "with his books, papers and accounts." The books,
papers, and accounts referred to are those material in determining an
alleged bankrupt's financial condition. Frotter appeared, but he did
not produce the books and records which would disclose the amount and
value of the goods he had in his store at the time of the fire. He testi-
fied that an inventory of his stock was made in December, 1901, show-
ing the goods then on hand were wôrth about $43,000, but he did not
produce this. Ail he had was what he claimed was a summary of it
copied into a small book. Lacking the inventory, he might hâve sup-
ported his statement as to its resuit by producing his books for the
preceding years, but he did not do so. Ail of the books for 1899 and
1900 were missing, and the ledger, cashbook, salesbook, and checkbook
for 1901. Not only were thèse books missing, but also the more im-
portant books for the six months of 1902 preceding the fire — the sales-
book, shipping book, cashbook, and ledger. No wonder that Hower,
the insurance adjuster employed by Frotter, stated on the stand that,
with the data he had at hand, it was impossible to détermine the amount
of the goods totally destroyed ! With thèse books missing, it was im-
possible to ascertain Frotter's financial condition. The law expects
a merchant charged with bankruptcy to support his statements by his
books, which speak for themselves. If he submits to examination and
produces his books, and his insolvency does not appear, the burden is
upon the petitioners to make the proof ; but if he fails to appear for
examination, or fails to produce his books, the burden is upon him to
prove his solvency. In this case the testimony showed the salesbook
for 1902 was on hand just before the fire. It disappeared after the fire,
although it was not burned up. So with the other books. No satis-
factory explanation of their disappearance was furnished. It is not suf-
ficient for an alleged bankrupt, when called upon to produce his books,
to say, "I don't know where they are." It is his business to know
where they are. They are the only proper proof of his financial condi-
tion. Ile must not only keep proper books of account, but préserve
them, and produce them when called upon. He fails to do so at his
péril. The court should hâve held that under the circumstances the
burden of proving his solvency rested upon Frotter.
3. The inventory on which Frotter's proof of loss was based was
made by Hower, an insurance adjuster, Wise, a clerk of Frotter, and
two others. Hower wrote down the items, which were called out by
Wise. The quantities were given by Wise, the priées by Frotter.
Where the goods were in the original boit or package, the yardage on
the tag was taken. If the boit had been broken, the quantity was esti-
mated by counting the folds. In this way the appraisers estimated the
goodi on hand to be worth $22,864.08, sound value. The damage to
Û3C 129 FEDEEAL REPORTEE.
them was arbitrarily placed at 65 per cent., or $I4,849.9S. The goods
totally destroyed were estimated at $3,180. Hower stated that it was
entirely impossible to détermine the value of the goods totally de-
stroyed They had no data to go back to — no inventory of the goods.
Ail they had to dépend on was the information given them by Frotter as
to what was stored where the fire was the worst and the contents of the
shelves totally burned. Frotter objected to placing the value of the
goods totally destroyed at $3,180, and urged a higher figure, but Hower
and Protter's lawyer both insisted that no larger claim for goods totally
destroyed should be made until additional proof was secured. If he
could furnish further proof, the claim in that regard could be amended.
Shortly after the Frotter appraisement, and while the goods remained
undisturbed, an appraisement was made by the fire marshal and four
men of expérience — Lowe, Lemmers, Bruce, and Sommers. Lowe
had been in the umbrella business 13 years. This appraisement began
about July 30th. The appraisers had the benefit of the inventory made
by Frotter's appraisers. Lowe testified there was no évidence of a big
fire. There were three rooms in the building — a front room, used as
an office and salesroom ; a middle room, used as a stockroom ; and a
rear room, used as a workshop. The bulk of the stock was in the mid-
dle room. There was évidence of fire in four or five places in the room.
The stock for the most part was in cases and covered up, so was not
badly damaged. The appraisers were engaged nine days. They found
the items set out in the former appraisement, but the quantities were
not the same. There was a shortage in the yardage. They would
find an original boit of silk marked "105 yds." on the tag, and on meas-
uring it would find only 55 or 60 yards. In at least a third of the cases
the tags had been torn off. As the resuit of the appraisement, the
sound value of the goods found was placed at $9,015.26, and the actual
value at $7,706.16, leaving $1,310.10 as the loss and damage under the
policies. Before Lowe's examination was concluded, he was stopped
by the court virtually taking the position that testimony which tended
to impeach the correctness of the appraisement made by Frotter, or
to show there could not hâve been on hand at the time of the fire the
amount of goods Frotter claimed was on hand, was incompétent. Thus
the witness was not permitted to answer the question : "And in how
many cases did you find the yardage incorrect in the Frotter inventory ?"
The court took the view that ail testimony given by Lowe went to an
issue which would hâve to be tried somewhere else, namely, the amount
Frotter should recover on his policies ; that the f act of holding policies
in solvent Insurance companies to the amount of $35,000 raised a pre-
sumption that that was valid insurance, and that whatever assets he
had when the fire occurred were prima facie covered by that insurance.
Accordingly, the court refused to permit the other appraisers, who.
along with Lowe, had gone over Protter's stock of goods after the fire,
to testify, and, having thus excluded the évidence impeaching Frot-
ter's statement and inventory, directed a verdict for the défendant, on
the ground there was no proof of his insolvency. We think the court
was palpably wrong in excluding the testimony offered and in directing
a verdict for the défendant. Because Frotter failed to produce his
inventory and books, it did not follow that his verbal statement of the
BOGEN & TRUMMEL V. PKOTTEB. OJ i
amount of goods lie had on hand at the time of the fire was conclusive.
His own appraisers first contradicted his statement, and impeached the
alleged inventory on which it was based, by making out a proof of loss,
which placed the sound value of the goods on hand at the time of the fire
at $26,000, instead of $43,000. The claim against the insurance com-
panies based upon this appraisal amounted to about $18,000. It was
undoubtedly true, as the court suggested, that, having ascertained the
value of the goods on hand before the fire, the presumption was that the
policies, being in solvent companies, would make good the loss. But
conceding this, the question remained to be determined by the jury,
"What was the value of the stock on hand at the time of the fire?"
The proper proofs of this, to wit, the inventory and books, were not pro-
duced, and in their absence it was necessary to resort to other testimony.
The method which Frotter himself employed in preparing his proof ot
loss was an appraisement which would not only ascertain the goods
on hand and their value, but serve as a basis for an estimate both of the
damage to them and of the amount and value of the goods totally de-
stçpyed. Certainly it cannot be contended that because Frotter had
policies aggregating $35,000, and a fire took place in his store, therefore
it must be presumed that his claim against the insurance companies
amounted to the face of the policies. The policies were merely con-
tracts to make good whatever loss or damage he might sufïer by fire,
not exceeding $35,000. His claim must be measured and limited by the
extent of his loss and damage, and this obviously by the value of the
goods on hand when the fire broke out. If he only had $15,000 worth
of goods on hand, he could not be damaged to any greater extent. It
was therefore entirely compétent to introduce testimony tending to
show that he never had on hand at the time of the fire $26,000 worth of
goods. Taking the character of the goods he dealt in, and which he
described, it was compétent to show that there was not space enough
in his store to hold $43,000 worth of such goods. It was further proper
to show that Frotter's appraisement was wrong, if not fraudulent ; that
the quantities were overstated; that, instead of having on hand after
the fire $22,000 worth of goods, he only had $9,000 worth. The court
therefore erred in excluding the testimony referred to.
4. Frotter stated that his accounts and bills receivable amounted to
$2,436.78. Lowe and the appraisers who worked with him ascertained
the goods on hand, after the fire, to be worth (sound value) $9,015.26,
and Frotter's appraisers placed the value of the goods totally destroyed
at $3,180.00. Thèse amounts aggregated $14,632.04, and it was con-
ceded that Frotter's liabilities amounted to $22,000. In view of this,
we think it was for the jury to détermine whether Frotter was insolvent
or not. The court erred in taking the case from the jury and directing
a verdict for the défendant.
The judgment of the court below is reversed.
538 129 FEDERAL EEPOBTEB.
ALDEN SPBARE'S SONS CO. v. HUBINGEB*
ÎClrcult Court of Appeals, JBighth Circuit. Mardi 28, 1904.)
No. 1,978.
1. Saxes— Bbeach of Conteact— Damages— Maeket VaI/Tje — Sale of Goods—
Reasonable Time.
Where, on a breaeh of a contraet of sale, the seller elects to sell tlie
property at public sale for the purpose of establishing its market value,
the sale, in order to be effective for that purpose, must be made witbin a
reasonable period after the buyer has broken his contraet, and the seller
must exercise good faith and reasonable diligence to sell the goods for the
best priée obtainable.
2. Same— Instructions.
Where, after breaeh of a contraet for the sale of starch on July 1, 1900,
the seller did not sell the starch for the purpose of establishing its market
value, until March, 1901, an instruction submitting the question whether
the sale had been made within a reasonable tlme, so as to be blnding on
the buyer in an action for breaeh of contraet, that the seller was required
to use diligence to sell It at the best possible advantage, within a reason-
able time after notice to the buyer, and that it was for the jury to say
under ail the clrcumstances whether the sale was made within a reason-
able time, and that the fact that the buyer had some one represeuting
him at the sale could not be held to be an acquiescence In it, was proper.
3. Same—Conteacts— Parties.
Where in an action for breaeh of a contraet for the sale of starch the
Issue whether the starch was purchased by H. Individually or by a cor-
poration of whieh he was the président was properly submitted to the
jury, which was left at full liberty to détermine the question according to
the évidence, as they saw fit, a statement of the judge in his charge that
he thought that nelther of the parties was satisfied with a téléphone com-
munication between H. and plaintiff's agent, during which H. gave the
order, and that a letter written on behalf of the corporation the uext day,
confirming the purchase, really formed the contraet, was ïiot error.
In Error to the Circuit Court of the United States for the Southern
District of lowa.
This case was tried in the lower court on a complalnt filed by the Alden
Speare's Sons Company, the plaintiff in error, which contained the followlng
allégations : "On or about January 5, 1900, plaintiff sold to défendant teu car
loads of wheat starch at the agreed price of 5^^ cents par pound f. o. b. Indian-
apolis, Indiana, to be shipped on or before and after July 1, 1900, to J. C. Hu-
biuger Company, Indianapolls, Indiana, as ordered by défendant. Said ten
car loads of starch to aggregate 381,710 pounds, and was of the value of $20,-
994.05. Upon the sale of the said ten car loads of starch to défendant, plain-
tiff purchased of the Crystal Springs Manufacturing Company, for the pur-
pose of meeting its obligations to défendant, the aforesaid ten car loads of
starch. Défendant refused and declined to accept and receive the said ten
car loads of starch, and on or about the day of , 1900, notlfied
the plaintiff in writing not to ship said ten car loads of starch, and that he
did not want and would not receive and accept same. On or about the 16th
day of March, 1901, plaintiff, after due notice to défendant thereof at No.
369 Atlantic street, in the city of Boston, in the state of Massachusetts, sold
the aforesaid ten car loads of starch at public sale, upon and for defendant's
account, to the Liberty Oil Company at the price of four cents per pound, the
best offer received therefor, for the sum of $15,268.40. The cost of transport-
ing the said ten car loads of starch to Indianapolls, Indiana, would hâve been
one-fourth cent per pound, or a total of $954.27. There is due plaintiff from
défendant the sum of $4,771.38 together with 6 per cent, interest from March
16, 1901. Wherefore plaintiff demands judgment agalnst the défendant for
the sum of $4,771.38, together with C per cent, interest from date until paid,
ALDEN SPEAEe'S SONS CO. V. HUBINGEE. 539
and costs of suit." The défendant, by hls answer, averred, In substance, that
the starch in question was ordered by the J. C. Hubinger Company, a corpo-
ration, and not by J. C. Hubinger individually ; that on Februai^ 24, 1900,
the défendant and the said J. C. Hubinger Company notlfled plaintifC to make
no further shipments of starch, and cancel the order; that subsequently, on
or a bout April 20, 1900, they again notified the plaintifif that they did not de-
sire any further shipments of starch under the aforesaid order, and that Per-
sonal notice was given to the plaintiff's agent in Chicago on or about the dates
last aforesaid that the J. C. Hubinger Company would not be able to take
the starch; that the plaintiff, when thus notified to cancel the order, made
no objection to the cancellation, and gave no notice that it would insist upon
the fulfillment of the order ; that long afterwards, and on or about July 28,
1900, the plaintiff and the défendant settled certain litigatlon which was pend-
ing between them in the courts of lowa, and that at said settlement no notice
was given to the défendant that the plaintiff had a claim against the défend-
ant or the J. C. Hubinger Company growing out of the cancellation of the
aforesaid order; that thereafter, on March 16, 1901, the plaintiff caused ten
car loads of starch, which it claimed to hâve sold to the défendant, to be re-
sold on account of the défendant; that no proper or sufflcient notice of the
sale was given to the défendant ; and that the sale was not made in good faith,
or in such a manner as to bind the défendant. The case was tried to the jury
on the aforesaid issues, and resulted in a verdict In favor of the défendant
below, who is also the défendant in error hère.
W. J. Roberts (Almon W. Bulkley and Bulkley, Gray & More, on
the brief), for plaintiff in error.
John É. Craig and Théodore A. Craig (James C. Davis, on the brief),
for défendant in error.
Before SANBORN, THAYER, and HOOK, Circuit Judges.
THAYER, Circuit Judge, after stating the case as above, delivered
the opinion of the court.
It will be observed that the complaint on which the case was tried
failed to show the market value of the starch at the time and place of
delivery. Neither did it contain an allégation that there had been a
décline in the market value of the commodity intermediate the sale
and the time of delivery, nor an express allégation that the plaintiff
had sustained damage. The action seems to hâve been brought on the
theory that it was sufficient to allège that at the sale made in Boston in
March, 1901, nearly nine months after the time of delivery specified
in the contract, the starch did not bring as much as the contract price,
and that this allégation alone entitled the plaintiff to recover the dif-
férence between the contract price and the price for which it had been
sold. Counsel for the plaintiff in error concède that the damages re-
coverable for the breach of a contract of sale is the différence between
the contract price and the actual market value of the commodity at
the time and place of delivery. They contend, however, that when a
contract of sale is broken the vendor may sell the article for the purpose
of establishing its market value ; that the market value may be proven
in this way as well as by the testimony of witnesses, and that the sum
bid for the starch at the public sale in Boston in March, 1901, was prima
facie évidence of its value when the contract was broken, and that it
showed a décline in the market value, and conséquent damage.
Assuming, without deciding, that there might hâve been a recovery
of substantial damages although it was not expressly alleged that the
market value of the starch at the time and place of delivery was less
540 129 FEDEKAL KEPOETEB.
than the contract price, and although it was not expressly alleged that
the plaintiff had sustained damage ; and assuming farther that a vendor
of merchandise, if the vendee déclines to accept it, may cause the same
to be sold for the purpose of establishing its market value — still, when
property is thus sold by the vendor to establish its market value, the
sale must be made within a reasonable period after the vendee has
broken his contract, and in making the sale the vendor must exercise
good faith, and do whatever may be donc in the exercise of reasonable
diligence to make the property sold bring the best price. Moore v.
Potter, 155 N. Y. 481, 487, 50 N. E. 271, 63 Am. St. Rep. 692 ; Tripp
V. Forsaith Mach. Co., 69 N. H. 233, 45 Atl. 746; Brownlee v. Bolton,
44 Mich. 221, 6 N. W. 657; McCombs v. McKennan, 2 Watts & S.
216, 2i7 Am. Dec. 505 ; Mechem on Sales, § 1650. In the case in liand
it was the function of the jury to décide whether the starch in question
was sold by the plaintiff company within such a reasonable period of
time after July i, 1900, and under such circumstances, as would war-
rant them in finding that the price bid at the sale was the fair market
price of the starch at that time and nine months previously — that is
to say, when the contract was broken. This question was in fact sub-
mitted to the jury. With référence to this phase of the case the trial
court charged the jury as follows:
"Now, then, what is a reasonable time, so far as this case is concerned, is
at least a question of fact for you, gentlemen. Hère is a starch manufacture^,
it seems, from flour ; possibly some other ingrédients ; I do not know as to
that. They must ofCer It upon the markets if it is already manufactnred.
They must use diligence to sell it at tlie best possible advantage, and. if they
intend to make a public outery, and if it is sold at such a sale as that, within
a reasonable time, they must give Mr. Hubinger notice that they iutend to
hold him for the différence between the contract price and what it sells for,
so that he can do what to him seems proper to protect himself. The évidence
is without conflict that there was no notice given until some time the next
March. Now, that is a question for you to say, uuder ail the circumstances,
was that within a reasonable time? And, If not, then this auctlon sale in this
building in the clty of Boston would in no wise be binding upon Mr. Hubinger.
The fact that he had some one there representing him will not be an acqui-
escence in it, because he would hâve a right to see what was going on ; and if
you find that that was an unreasonably long time after this contract had been
canceled, then that auctlon sale would in no wise be binding upon Mr. Hu-
binger in flxing the amount of damages."
This instruction is criticised as having been erroneous. It is said
that, if the sale of the starch was made within a reasonable time after
the défendant had declined to accept it, the price which it brought
was conclusive évidence of its market value at the time of the breach,
and that, although the vendor may hâve suffered an unreasonable
time to elapse before exposing it to public sale, yet the price bid for
it at the sale was at least prima facie évidence of its value during the
preceding nine months, and that the trial court erred in not instructing
the jury to that effect. We are unable to assent to that view. If
a vendor resorts to the expédient of selHng property which the vendee
has declined to accept, for the purpose of establishing its market value
and the amount of his damages, he should do so within a reasonable
period after the contract is broken. When the vendor retains the prop-
erty sold for months after the vendee has declined to accept it, and then
exposes it to sale, the law will hardly indulge in the presumption that
ALDEN SPEAKE's SONS CO. V. HUBINGEE. 541
the value of the article has remained stationary in the meaiitime, and
that the price realized is a fair test of the value of the article at the time
of the breach. We are of opinion, therefore, that the trial court was
right in directing the jury that the price which was bid for the starch
in Boston in 1901 would not be binding on the défendant in fixing
the amount of the damages, provided the jury found that the sale was
not made within a reasonable time after July i, 1900. The plaintiff
company made no attempt to show that it had sustained damage other-
wise than by proving that at the public sale in March, 1901, the starch
had been sold to the highest bidder at 4 cents per pound, which
was ij^ cents per pound less than the contract price. It seems to hâve
relied for a recovery exclusively upon this évidence, and as the jury,
acting under the instruction above quoted, most likely found that the
sale was not made within a reasonable period, and was not binding
upon the défendant for the purpose of fixing the amount of the plain-
tifï's damages, there was in fact no évidence before the jury which
would hâve warranted them in finding that the plaintiff company had
sustained any substantial damage such as could be recovered from the
défendant.
The pleadings in the case presented another issue of fact, namely,
whether the contract for the sale of the starch was made by Hu-
binger individually or with the J. C. Hubinger Company, and it is
claimed that the trial court practically withdrew this issue from the
jury by directing them that the contract was made with the com-
pany, and not with Hubinger. The record discloses that the order
for the starch was first communicated over the téléphone by Hubinger
in person to the plaintifif's agent in Chicago, 111., on January 5 or 6,
1900. At the conclusion of the message there was some difficulty with
the wires, but Hubinger was understood to say that he would write
to the agent that night. A letter was written that night or the follow-
ing morning, and mailed at Keokuk, lowa, where Hubinger resided,
and where the J. C. Hubinger Company was also located and engaged
in business. This letter was as follows :
"Keokuk, lowa, Jan. 6, 1900.
"Alden Speare's Sons Ce, Chicago, 111.— Gentlemen : * * • you can bock
oiir order for 10 cars of wheat starch to be delivered between now and July
Ist, allowing us 60 days time on each car, which time is the dating that we
hâve to allow on our bills.
"I was adding this clause when phoning you In Chicago, but was eut off, so
thought you might not bave eaught that part of the conversation. It is under-
stood of course that the starch is to be thin bolllng pure wheat starch and flrst
class in every respect.
"Very truly, J. C. Hubinger Ce."
At the commencement of his charge, in reviewing, in a gênerai way,
the circumstances under which the contract was made, the trial judge
remarked casually, "So I think it is fair to say that, in vicw of the fact
that neither of the parties were satisfied with the téléphone talk, that
this letter of the next day really forms the contract." Afterwards,
however, the question whether the contract was made with Hubinger
individually or with the Hubinger corporation, of which he was prési-
dent, was submitted to the jury in the following language :
"It is claimed by the défendant that this contract was made by the Hubinger
Company, a corporation. If that is true, then in no event can there be any
542 129 FEDEBAL KEPORTER.
reeovery by the plalntlffi in thls case. Mr. Horr, the représentative of the
plalntlfC, says he understood, not only from past dealings, but from this con-
versation on the téléphone on the 5th of January, that it was Mr. Hubinger
as an individual. The letter hère wcald indicate that it was done by the
corporation. One of the letters of caneellation, or which is ofCered and con-
tended to be a caneellation, on the 24th of February, is likewlse signed by
the corporation. The second letter of April 20th is signed by Mr. Hubinger
as an individual. So that is one question of fact you gentlemen will déter-
mine — with whom was this contraet niade by the plaintiff, with the Hubinger
corporation or with Mr. Hubinger as an individual? Because it makes no
différence who they are in this corporation. So far as we know, Mr. Hubinger
may or may not hâve owned ail the stock. He may or may not bave been the
controUing offlcei-. But if by the corporation, he, as an individual, under the
laws of lowa, would not be responslble for the corporation; at ail events so
far as this case is concerned. So you will détermine that in your own mind,
and if you find that it was by Mr. Hubinger as an individual then you will con-
sider the case without référence to that question. If you flnd it was by the
Hubinger corporation, your verdict will be for the défendant."
It is manifest, therefore, that the question whether the contraet for
the sale of the starch was made with the défendant as an individual or
with the corporation of which he was président was submitted to the
jury, and there seems to be no substantial basis for the contention that
this issue was withdrawn from their considération. The remark that
was made by the trial judge at the commencement of the charge
amounted to no more than an expression of opinion, but, as the jun,*
were subsequently left to détermine the issue as they thought proper,
the plaintiff company has no just ground for complaint, since a trial
judge is always at liberty to express his opinion on any issue of fact
which arises in a case, provided the jury is ultimately left at full liberty
to détermine it.
After a careful examination of the record and the briefs, we hâve
reached the conclusion that the jury must hâve found either that the
plaintiff company had not sustained any damage in conséquence of the
alleged breach of the contraet, or that the contraet was in fact made
with the J. C. Hubinger Company, and not with the défendant. The
verdict can be accounted for, we think, on no other ground, and in our
judgment thèse issues were properly submitted to the jury. The plain-
tiff company did not ask the trial judge to déclare that it was, in any
event, entitled to recover nominal damages, nor is this court asked to
reverse the judgment below for that reason.
Under thèse circumstances no sufficient reasons exist for the reversai
of the judgment below, and it is accordingly afSrmed.
CECIIi V. AMERICAN SHEET STEEL CO.
(Circuit Court of Appeals, Slxth Circuit. May 5, 1904.)
No. 1,231.
1. Master and Servant— Mines— Timbees—Dutt to Furnish— Statutes.
Rev. St. Ohio 1892, § 6871, requires the owner or operator of every
coal mine to keep a supply of timber constantly on hand, and to deliver
the same to the working place of the miner, and déclares that no miner
shall be held responsible for accidents which may occur in the mine
where the provisions of such section are not complied with. Eeld that,
CECIL V. AMERICAN SHEET STEEL 00. 543
slnce the act did not deflne the degree of care required of the mine owner
In provldlng timber, such care must be determlned by the princlples of
the eommon law.
2. Same— Injueies to Minée— Falling Rock— Defective Timbebs.
Where a miner was struck by a rock falling from the roof of the mine
by reason of the alleged insufficieney of a timber cap furnished to sup-
port the roof, plaintiÊC, in order to recover, was not required to establish
demonstratively that the stone would not hâve fallen, except for the
détective condition of the cap, but was only required to Introduce proof,
direct and circumstantial, sufficient to show that the stone would prob-
ably not hâve fallen, except for the breaking of the détective cap.
3. Same— Pboximate Cause— Question fob Jtjey.
In an action by a miner Injured by the falling of a stone from the
roof, whether the alleged defectiveness of a plUar cap furnished to sup-
port the roof was the proximate cause of the accident held a question
for the jury.
In Error to the Circuit Court of the United States for the Eastern
Division of the Northern District of Ohio.
This suit was instituted in the court of eommon pleas for Tuscarawas
county, Ohio, to recover damages for a Personal Injury sufCered by plaintifif
in error while in the employment of the défendant in error as a coal miner.
The action was removed into the Circuit Court of the United States for the
Eastern Division of the Northern District of Ohio, held at Cleveland. On
the trial of the case, and when ail the évidence was In, the court, on motion,
dlrected a verdict for défendant, on which judgment was entered. Excep-
tions were duly taken, and, to revise the judgment, the case Is brought to
this court on writ of error.
The work in which the plaintiff was engaged at the time of the accident
which caused the injury was that of removing or mining pillars of coal left
In branch or slde entries to the main entry of what is called a "drift mine"
belonging to défendant. As side entries were made or driven, in the prog-
ress of the work, large pillars or blocUs of coal were left to support the slate
or soapstone roof of the entries left by mining and removing the coal on ail
sides of thèse pillars. When flnally thèse entries were extended as far as
the coal justified, and it was determlned to abandon them, the pillars of coal
were mined and removed. The plaintiff was engaged in mining one of thèse pil-
lars, and had been engaged In that partieular work for two weeks. While doing
this work, It was the miner's duty to prop and support the roof of stone or slate
by timber posts placed In an upright position, vvith a cap pièce flxed agalnst the
roof. Thèse posts were about 4 inches in diameter, with caps 6 Inches wlde,
18 inches long, and about 1% inches thick. Thèse timbers were sent to the
miners in the entries, and each miner did his own propping. The miner
was furnished with the usual miner's lamp, of about three candie power.
On the day of the accident, plaintiff had, on golng into the mine, examined
or "sounded" the roof in the usual way, and placed in position, as usual,
three posts, with caps, from timber furnished and placed conveniently close
by the master. After proceeding two hours or more with the work, a pièce
or slip of stone fell from the roof above, where the mining had just been
done, striking plaintiff, and inflicting serions injury. This slip or block of
stone weighed about 500 pounds, was 3 feet long, 8 inches wide, and 8 inches
thick in the middle, from which it sloped towards the ends, at which It was
wedge-shaped.
The plalntlfif's case Is stated in the pétition as follows:
"That, as a part of his dutles as such coal miner, be was required to, and
did, perform the work of taking ont pillars or posts of coal between rooms
in said coal mine; and he was also required to keep the roof of said coal
mine, at or near where he was working, propped with posts, or timbers and
caps, so that said roof would not fall in, thereby endangering the life or
llmbs of himself or other employés of the défendant
"Plaintiff further says that it was the duty of the défendant at ail times
544 129 FEDEBAL REPORTEE.
to f urnlsh plaintiff, at Ms working place in sald coal mine, with good, sound,
and substantial tiinbers and caps, wlth which to keep said roof propped in
a safe and sufflcient manner, but the défendant, disregardlng Its said duties
in the premises, at the time hereinafter stated, wrongfully, carelessly, aud
negligently failed to furnish plalntifC with good, Sound, substantial timbers
and caps, as it was bound to do, and avers that one of the caps furnlshed
by the défendant to plaintifC, to be used in propping the roof at or near where
plaintiff was working in sald mine, and so used by the plaintiff, was nn-
sound, rotten, and defective, and wholly unflt for the purposes for which
the same was intended, as défendait well knew.
"Plaintiff further avers that on or about the llth day of November, 1001,
while so engaged as a coal miner in said defendant's sald mine, said rottoii
and defective cap broke and gave way, and caused the roof of said coal
mine, at and near where plaintiff was at the time working, to fall in, by
reason whereof a large stone, with slate, etc., fell on plaintiff, striking plain-
tiff on his back, and on the spinal column thereof, fracturing the vertebra
of plaintiff's spinal column, by reason whereof plaintiff's spinal column and
nervous System bas been permanently iujured, and plaintiff has ever sincc
been sick, lame, and diseased.
"Plaintiff avers that said injuries were caused wlthout any fault or neg-
lect on his part, but wholly on account of the carelessness and négligence of
the défendant; that plaintiff had no knowledge whatever that said cap was
unsound or defective or rotten ; that he used ail the timbers and caps fur-
nlshed him at the time by the défendant to prop said roof ; and that, before
using the same, he used ordinary care to détermine whether the same was
Sound and fit for the purpose intended."
There was évidence to show that the posts and caps were properly set,
in the usual way. About four or five Inches of one end of the stone slip
which fell rested on the end of the post cap, as appeared by the opening in
the roof left by the falllng stone. The évidence tended to show that the
pièce of the cap which broke off was flve or six Inches long, and was de-
fective, "by being wormy." and was somewhat decayed from exposure to
weather, or, as the witnesses say, was "brash wood," and was partly rot-
ten. The break in the cap was a square break across the grain.
The View of the learned judge below appears in the peremptory instruction
to the jury, which, taken from the record, is as follows :
"It must be shown, as a part of the plaintiff's case on this theory, that
this rock would not hâve fallen, except for the rottenness of this cap. Now,
that is not shown. It is guessed at. It is surmised. But there is the évi-
dence that it was supported by the coal under it, and that, when the coal
was removed, it fell, and that it was of certain dimensions and weight. It
would be extremely improbable that a board four inches long was destined
to support a 500-pound stone of tliose dimensions. And under the considér-
ation of the testimony, that there is an insufficient amount to show that the
condition of the board that broke was the proximate cause of this accident,
I cannot escape from the first conclusion that I came to — that it is not shown
in such a way but what the court will be bound to set aside a verdict, if the
jury said that was the occasion of the accident. And therefore a verdict is
directed for the défendant."
Section 6871 of the Revlsed Statutes of Ohio of 1892, cited as having a
material bearing on the case, is as follows :
"The owner, agent or operator of every coal mine shall keep a supply of
timber eonstantly on hand and shall deliver the same to the working place
of the miner and no miner shall be held responsible for accidents which may
occur in the mine where the provisions of this section bave not been com-
pUed with by the owner, agent or operator thereof."
Foran, McTighe & Gage and T. H. Loller, for plaintiff in error.
E. K. Wilcox, for défendant in error.
Before LURTON and RICHARDS, Circuit Judges, and CLARK,
District Judge.
OECIL T. AMEBICAN SHEET STEBL OO. 545
CLARK, District Judge, after making the foregoîng statement, de-
livered the opinion of the court.
After this somewhat full statement of the case, it does not seem to
require extended discussion. It is very clear that this statute imposes
on the owner or operator of a coal mine the duty to keep constantly
on hand a sufficient supply of timber, without undertaking to déclare or
define the degree of care which the mine owner or operator must exer-
cise in that regard. The degree of care, therefore, which must be exer-
cised, is left to be determined on common-law principles, and this statute
may therefore be put aside without further discussion.
As will appear from the comments of the court below in giving a
peremptory instruction for défendant, the ruling was based upon two
grounds ; the first being that it was necessary for plaintifï to show "that
this rock would not hâve fallen, except for the rottenness of this cap,"
and, second, that the breaking of the board was not shown to hâve been
the proximate cause of the accident.
In regard to the first proposition, the remark of the court was:
"Now, that is not shown. It is guessed at. It is surmised." It is
not ahogether clear, in view of this language, what was the extent and
character of the évidence which it was thought would be necessary to
establish a prima facie right to recover. If it had been regarded as
legally permissible for the plaintiff to establish by testimony reasonable
grounds of presumption or probability as to the cause of the accident,
and for the jury to infer from such évidence, direct and circumstantial,
that the slip of stone would probably not hâve fallen, except for the
breaking of the détective timber, and that the breaking of the timber
support was therefore a proximate cause of the accident, it is very diffi-
cult to conceive that it would not at once hâve been recognized that the
question was one of fact, and, as such, required submission to the jury
for détermination. The view, if entertained, that the plaintiff rriust, in
order to recover, show positively that "this rock would not hâve fallen,
except for the rottenness of this cap," was to require an impossibility.
In the very nature of the case, it could never be established dem-
onstratively that the stone would not hâve fallen, except for the rot-
ten condition of the cap. The case could be determined and disposed
of only on the reasonable and stronger probabilities of the situation in
the light of ail the attending circumstances and conditions. The ques-
tion was largely one of opinion, based on such justifiable inferences as
might be drawn upon reasonable grounds from the facts found by the
jury, so far as thèse were disputed. Such conclusions as might be
reached were conclusions of fact, however, and not of law. The issue
was one of fact, to be disposed of in a practical and substantial way,
and not on the purely spéculative theory whether the stone slip might
hâve become loose, and might hâve fallen, regardless of the fact that
the post cap was rotten, or if it had been sound. The proposition that
the breaking of the defective timber was the proximate cause of the
falling of the stone and of the accident was necessary for the plaintiff
to establish, not demonstratively or conclusively, so as to exclude doubt
or déniai, but probably, and this probability should, on the whole of the
évidence, outweigh, by a fair prépondérance, the évidence in favor of
any other view or probability. Just what caused the stone to fall is
129 F.— 35
546 129 FEDEKAL EEPOETEB.
a question which admits of only an answer in its nature a probability,
and involving, in its last analysis, to an extent, matter of opinion.
There was certainly évidence tending to show that the breaking of the
supporting cap timber caused or permitted the stone to fall.
One of the witnesses in the case (Opphill, a miner of 20 years' ex-
périence) was required by the court to express an opinion as to the cause
of the falling of the stone, as will appear in the foliowing questions and
answers :
"Q. And where was that stone before It fell, wlth référence to this cap
which you say broke? A. Up in the roof. Q. Was any portion of that stone
over the pièce before it fell? A. It was about half. Q. By the Court:
Half of the stone? A. No; just the edge. Q. Just the edge of the stone
was over the cap? A. Yes, sir. Q. The rest of the stone was not supported
at ail? A. I couldn't tell that Q. There was nothlng there to support it,
was there? A. No, sir; I don't suppose there would be. Q. Now, what do
you say, Mr. Opphill? Did the stone break the cap, or the cap break and
let the stone fall? A. The cap Iroke and let the stone fall. Q. What broke
the cap? A. The stone, I reckon. Q. And just one edge of that stone — not
more than four inches — could be over that cap, and the rest of that whole
big stone was outside? A. Yes, sir. Q. Oan you tell us what proportion of
the weight of that stone would rest upon that cap, before it fell, from the
position which you say it occupied? A. You mean the weight of the rock?
Q. By the Court: How much of the weight of the rock was on this pièce
of cap before the stone fell? If It weighed 500 pounds, how much weight
of that 500 pounds was on the cap? A. Just the edge of it. Q. How much
of the weight would be on that cap? A. I couldn't tell."
So, too, in the testimony of plaintiff, Cecil, the foliowing questions
and answers occur :
"Q. Now, you may state what happened, if anything, as you were there
working? A. The timier 'broke and let the roof cave in on me. The cap
broke. Q. By the Court: What timber? A. The cap on top of the post."
Besides this, there were ail the particular circumstances of the situa-
tion for considération, such as the extent to which the stone slip pro-
jected over on the edge of the supporting cap or board, and the weight
which a board or timber of that thickness, if sound, would probably
hâve supported, and the extent to which this support would hâve
tended to prevent the falling of the stone, the distance to which the
stone had been eut away from the prop, and other like circumstances.
In view of the entire évidence found in this record, we know of no
doctrine or principle which would sustain the view that, as matter of
law, the testimony was insufficient to go to the jury upon the question
as to whether the stone slip would hâve fallen, except for the defective
condition of the post cap. We think this was a question of fact on
which the plaintiff was entitled to go to the jury.
In the case of Choctaw, Oklahoma, etc., R. R. Co. y. Holloway, 191 U.
S. 334, 24 Sup. Ct. 102, 48 L. Ed. 207,, the testimony showed that an en-
gine was being run backward at night by the engineer and fireman,
when, on coming upon a trestle, the engine collided with a horse upon
the trestle and was derailed, and the fireman caught between the tank
and engine, and seriously injured. The engine was not equipped with
brakes. There was évidence that the engine could hâve been stopped
more quickly with brakes than without them. One ground on which the
charge of négligence was founded was the fact that, when the engineer
CECIL V. AMERICAN SHEET STEEL 00. 547
discovered the horse, he applied the brakes on the tender successfully,
but this was without effect on the engine, which was forced, with its
weight and momentum, against the tank or tender. In disposing of
the ground on which the défense rested, the court, by Mr. Justice Peck-
ham, said :
"It is insisted, however, on the part of the défendant, that the court erred
in not holding that the absence of brakes on the engine was not the proxi-
mate cause of the injury, that the présence of the horse on the trestle was
the proximate cause of derailing the tender and engine, and that the Com-
pany was not guilty of any négligence by reason of which the horse canie
upon the trestle. We think this claim is unfounded, and that the proxiuiate
cause of the injury, within the nieaning of the law, was the absence of the
brakes on the engine. At any rate, tliere was évidence which made it a
question for the jury to say whether the accident would bave happened if
there had been braises on the engine, in good order and fit for use. It may
be assumed that there was no négligence on the part of the défendant, by
reason of which the horse came upon the trestle, and that it was not, there-
tore, responsible for any damage of which the horse was the sole and prox-
imate cause. We think one proximate cause of the accident was the ab-
sence of the engine brakes. The purpose of a brake is to stop the engine
more promptly thau can be done without it, and, if there had been a brake
on the engine, it would, if used, hâve proîiaMy prevented the accident. At
any rate, there was évidence to that effect The absence of a brake, which,
if présent, would hâve prevented the accident, was therefore a proximate
cause thereof."
To same effect is the opinion of this court in Postal Tel. Co. v. Zopfi,
73 Fed. 609, 19 C. C. A. 605.
As will be perceived, it was adjudged that the proximate cause of
the accident was a question for the jury, in the considération of which
the jury might infer that, "if there had been a brake on the engine,
it would, if used, hâve probably prevented the accident." (Italics in
ail quotations ours.) In respect of both points, the ruling is, in princi-
ple, opposed to the views expressed by the court below on facts similar,
in substantial effect and bearing, to those found in this record. In rela-
tion to thèse points, the case of Mexican Cent. Ry. Co. v. Murray, 102
Fed. 264, 42 C. C. A. 334, is also instructive.
It is well settled, and not denied, that, in a case like this, where the
servant does the constructive work on an appliance, such as thèse props,
for his own safety, the master's duty is to exercise reasonable care to
furnish Sound and suitable material and timber for the work, and to
make reasonable and proper inspection in that regard. Mexican Cent.
Ry. Co. v. Murray, 102 Fed. 264 ; 42 'C. C. A. 334 ; Texas & Pacific
Railway v. Archibald, 170 U. S. 665, 18 Sup. Ct. yyy, 42 L. Ed. 1188,
and cases cited.
In the court below, the point whether the defect, if one, was latent
or patent, seems to hâve entirely escaped attention. This is an embar-
rassing difficulty in the case. Of course, if the defect in the post cap
was patent, or such as should bave been discovered by reasonable and
ordinary inspection, the master would be liable ; otherwise not. A
brash or defective condition of the timber might be discovered after it
was broken across the grain, and thus exposed, which would not be
previously discoverable by ordinary and reasonable inspection. It is
impossible to deal safely or intelligently with this phase of the case,
although the question is suggested by what is found in the record. The
548 129 FEDERAL EBPOETER.
point can be properly consîdered and disposed of on a new trial only.
The argument for défendant in error is, in part, devoted to an effort
to show that the contributory negHgence of the plaintiff was so con-
clusively and plainly évident as to make it a question of law for the
court, and it is sought to sustain the ruling in the case on that ground.
This défense, however, if relied on, obviously présents an issue of fact
to be submitted to the jury.
Our conclusion being that there was error in the withdrawal of the
case from the jury, it results that the judgment is reversed, and the case
remanded, with directions to set aside the verdict and award a new trial.
HUNTZICKBIl V. ILLINOIS CENT. R. CO.
(Circuit Court of Appeals, Slxth Circuit. May 9, 1904.)
No. 1,267.
I. Masteb and Sehvant— Pellow Servant— Emplotment.
Deceased, a young man, desiring railroad employment, appHed to de-
fendant's tralnmaster, wlth whom It was agreed that deceased should
go on the road, and learn by observation and practice the dutles of a
flagman, to which end the tralnmaster gave him a permit, directed to
defendant's freight conductors, to allow him to ride on freight trains In
the district, and acquire familiarity wlth the business. Deceased was
Instructed In the duties of a flagman, and performed such duties under
the direction and control of the conductors of the trains until on the
day of his death, as he was traveling on a freight train to hls train-
master's station to be examined, he was killed, while asleep (with the con-
ductor's assent) in the caboose, by a rear end collision. Held, that de-
ceased, while engaged In such work, was a servant of défendant, and
a fellow servant of those by whose négligence he was killed.
In Error to the Circuit Court of the United States for the Western
District of Tennessee.
Bell, Terry & Bell, for plaintiflf in error.
Fentress & Cooper and Cooper, Hirsh & Cooper, for défendant in
error.
Before LURTON, SEVERENS, and RICHARDS, Circuit Judges.
SEVERENS, Circuit Judge. The plaintiff 's intestate, Fred Fereday,
a young man desiring employment in the train service of the défendant,
applied to the tralnmaster on ône of its divisions therefor, and, it ap-
pearing that he had not had sufEcient expérience to qualify him for the
service, it was agreed that he should go upon the road and learn by
observation and practice what the duties of a flagman were, and gain
the necessary expérience to qualify him. To this end the tralnmaster
gave him the foUowing permit:
"Fulton, Ky., May 14, 1902.
"Freight Conductors, Fulton District:
"Allow the bearer, Fred Fereday, to learn the duties of flagman on Fulton
District. Good thirty days. O. M. Sewall, Tralnmaster."
If 1. Who are fellow servants, see notes to Northern Pac. R. Co. v. SmitL,
8 0. C. A. 668; Canadian Pac. Ry. Co. v. Joànston, 9 C. 0. A. 596; Flip-
pin v. Kimball, 31 C. C. A. 286.
HL'NTZICKEE V. ILLINOIS CENT. E. CO. 5iU
Thereupon Fereday, using the permit, went upon various freight
trains moving over the road, seeking to acquire familiarity with the
business. He observed and inquired about the methods of the business,
and was instructed therein, and participated in the performance of the
(luties of flagmah under the direction and control of the conductor of
the train. On June 3, 1902, Fereday having expressed a désire to be
examined in respect to his proficiency, the trainmaster indicated that
if he would corne to his office he would examine him. A message
to that effect was delivered to Fereday, who thereupon left the train
on which he then was, and took another freight train moving to the
destination where the trainmaster's office was located. On this train
he used his permit, and continued his pursuit of information, and to
some extent his practice of executing a flagman's duties. While on
the way, being tired, he obtained the conductor's consent that he lie
down in the caboose and sieep awhile. This he did, and while he was
asleep a train coming up from behind negligently ran into the caboose,
crushing it, and killing him instantly. Upon proof of thèse facts by
the plaintiff, and of which there was no dispute, counsel for the de-
fendant moved for a peremptory instruction by the court that the jury
should find for the défendant, upon the ground, as we gather, that Fere-
day was a fellow servant with those by whose négligence he was killed.
The request was granted, and a verdict was rendered for the défendant,
and judgment accordingly.
The décisive question in the case is whether Fereday was a servant
of the défendant at the time he was killed. If he was, he was a fellow
servant with those whose négligence caused his death, and the défend-
ant would not be liable. Oakes v. Mase, 165 U. S. 363, 17 Sup. Ct.
345, 41 L. Ed. 746 ; New England R. R. Co. v. Conroy, 175 U. S. 323,
20 Sup. Ct. 85, 44 L. Ed. 181. If he was a mère licensee, in the enjoy-
ment of a privilège accorded him by the défendant, he was not a fel-
low servant, and the plaintiff was entitled to recover. As there was
no controversy over the facts, the question became one of law, and the
court performed a duty of its own in deciding it. The agreement be-
tween the parties, reduced to its éléments, was that the défendant was
to furnish the plaintiff the facilities for qualifying himself for the duties
of a fiagman ; that is to say, it was to give him instruction and transpor-
tation over its road ; not such transportation as is due to a passenger,
but such as is ordinarily incident to the opération of freight trains by
men in that service. In considération of this, Fereday was to perform
such elementary and simple service as he was capable of under the di-
rection of the conductors of trains. If this were doubtful, the subsé-
quent conduct of the parties confirms the construction of the contract
above stated. As there was no contract for his ultimate employment as
a fiagman, the défendant would receive and did receive no other con-
sidération for the privilèges granted to Fereday than such services as
he would render while in the enjoyment of them. It is quite true that
he was not obliged to continue his relation to the company for any
definite length of time or continuously during the time for which the
privilèges were granted ; but while he did avail himself of them and was
receiving the benefit he was under a duty to perform the service ex-
550 129 FEDERAL EEPOETEK.
pected of him. Probably the service was not o£ much value, but, such
as it was, it necessarily brought him into association and co-operation
with the other servants employed in moving the trains. The fuie ap-
plicable to the relation of fellovir servants rests upon the idea of such
voluntary association and co-operation and the assumption of the risk
arising therefrom. He was enjoying the privilège and rendering the
service at the time when he lest his life. We hâve no doubt of the cor-
rectness of the proposition contended for by counsel for the plaintiff
that one who, for his own purposes, and by consent of another, assists
that other in facilitating the discharge of a duty owed to himself, cannot
be regarded as a servant of the other. Holmes v. N. E. Ry. Co., Law
Rep. 4 Exch. 254; Wright v. London & N. W. Ry. Co., L. R. 2 B. 252.
The Wright Case, which is especially relied on for the plaintiff, has
always been regarded as an authority of great weight, having been de-
cided in the Court of Appeal, consisting of Lord Coleridge, C. J., James,
Mellish, and Baggally, h. JJ., and Cleasby, B., who also participated in
the Holmes Case. In that case the consignée of a heifer, with the
consent of the company, and for the purpose of saving delay, assisted
the company's servants in shunting the car in which the heifer was
shipped upon a side track for delivery, and while doing this was in-
jured by the négligence of the company's servants. It was held that
he was not a servant of the company, and was not affected by the rule
applicable to fellow servants. The décision turned upon the fact that
the plaintiff was engaged in furthering his own interest by hastening
the unloading of the animal. This was also the ground on which the
Holmes Case was decided. That doctrine rests upon the ground of
the interest of the party in the ultimate object and resuit of that which
the party does, and not an interest which he has in the mère doing of it.
In ail cases of service done for hire the workman has an interest in do-
ing his work, because his wages dépend upon it; but he has no inter-
est in the resuit of his work. On the other hand, the party who, in his
own interest, assists in, or even himself wholly performs, a duty of the
other, takes no account of his own endeavor as one of service, and ex-
pects no reward from the other party for it. He regards only his own
advantage in having it accomplished. This distinction, though some-
times said to be acute, is yet clear enough, and runs through ail the
cases which hâve traced to its origin the line of démarcation between a
service rendered to another in an employment, and one which, though
helpful to another, is performed for the purpose of promoting one's
own interests. There are cases which hold that it is not even necessary
that one volunteering to assist the servants of their employer should
hâve the expectation of reward, if he has no interest in having the thing
done, in order to constitute him a fellow servant. Thèse cases go up-
on the ground that the party joined the servants, and was doing what
he did in the assumed relation of a servant, and consequently took the
risk of the négligence of his fellow servants. Degg v. Midland Ry.
Co., I Hurls. & Norm. 772» is a leading case of this class, where a by-
stander volunteered to assist the company's servants in moving a turn-
table, and was injured by their négligence. It was held he could not
recover. A similar case is Potter v. Faulkner, 3 B. & S. 800. But
O'hABA V. UNITED STATES. B53
that class of cases is not quite pertinent hère, except that they mark tlie
distinction on which the Holmes and Wright Cases, supra, were de-
cided.
Applying the controlling principles which we hâve indicated to the
présent case, it seems clear that Fereday at the time of his death was a
servant of the défendant. He was enjoying the privilège for which he
served. He was under the control of the défendant, and the company
would undoubtedly hâve been responsible for the manner in which he
performed his service; and, what is more important, under the test
above stated he had no interest whatever, other than that which any
servant has in the resuit of his service, in the conséquences of the dis-
charge of his duties. We are therefore of opinion that the court did
not err in its direction to the jury.
The judgment must be afRrmed, with costs.
O'HARA V. UNITED STATES.
^Circuit Court of Appeals, Slxth Circuit May 4, 1904.)
No. 1,265.
L Use op Mails— Schemb to Defeaud— Indictment.
In a prosecutlon for uslng the mails In furtherance of a scheme te de-
fraud, in violation of Rev. St. § 5480, as amended by Act March 2, 1889.
c. 393, 25 Stat. 873 [U. S. Oomp. St. 1901, p. 3696], it is sufflcient to charge
that the défendants, havlng devlsed or Intending to devise a echeme to
defraud, to be executed by the use of the mails, dld, in the exécution
of such fraudulent scheme, depoalt for transmission a letter In some post
office.
2. Samb— Time.
Where an Indictment charged that on May 21, 1902, défendants de-
vlsed a scheme to defraud, descrlbed in détail, and in conclusion alleged
that défendants dld then and there, in the exécution of such scheme,
place In the mails at 0. a letter, a copy of which was set out, which
letter was dated on May 21, 1902, and addressed to H., one of the per-
Bons it was averred the scheme was devlsed to defraud, was sufflciently
deflnlte as to time, though there was an averment in the body of the
Indictment that défendants Intended to obtaln from H. and others, be-
tween January 1, 1902, and May 23, 1902, large sums of money, etc.,
since such allégation, being nonessential, might be rejected as surplus-
age.
8. Samb— Execution or Scheme— Impossibilitt.
In a prosecutlon for uslng the mails wlth Intent to defraud, In fur-
therance of a scheme devlsed by défendant, as an alleged turf commis-
sloner, to pay large returns for money to be used In betting on horse
races, the fact that the scheme was impossible of exécution on Its face
was Immaterial.
4. Same— Gamblinq Teansactioh— iLLEGALrrr.
In a prosecutlon for uslng the mails In furtherance of a scheme to
defraud by the paying of large returns for money to be used In betting
on horse races, the fact that such scheme Involved a gambling transae-
t4. Nonmailable matter in fuitberauce of fraud, see aote to Tlmmons v.
United States, 30 C. O, A. 86,
552 129 FEDERAL REPORTEE.
tlon forWdden by the laws of the state where It was devised and where
défendants resided was Immaterlal.
B, Bame— Cbiminal Law—Wiinesses—Numbee— Limitation.
Under Eev. St § 878 [U. S. Comp. St. 1901, p. 668], authorizlng the
court In a crlminal case to direct witnesses to be subpœnaed for défend-
ant at the govérnment's expansé under certain circumstances, it was
wlthln the discrétion of the triai court to iimit the number of defend-
ant's witnesses to be so subpœnaed to four on each particular point
named in defendant's prsecipe.
6. Samb— Abeaignment— Plea.
Where défendant was arraigned and pleaded "not guilty," but there-
after obtalned leave to wlthdraw hls pjea and file a motion to quash
the Indictment and a demurrer theteto, which was thereafter overruled,
whereupon he went to trial, the wlthdrawal of the plea of not guilty
was provisional only, and it was not materlal that a plea of "not guilty"
should be agaln entered of record.
7. Same— Vakiance.
In a prosecution for uslng the mails In the furtheranee of a scheme
to defraud, alleged to hâve been devised on May 21, 1901, évidence of
slmilar transactions occurring prier to such date was properly admitted
as showing the nature of the scheme In which défendant was engagea
in executlng when he malled the letter to the person specified in the
indictment.
8. Same— Evidence.
In a prosecution for using the mails with Intent to defraud, loosa
Bheets of paper contaluing figures with référence to defendant's business,
which he could not Identify or explain, not appearing to be elther orig-
inal records or copies thereof, were properly excluded.
In Error to the District Court of the United States for the South-
ern District of Ohio.
The plaIntifC In error was Indicted and convlcted of violatlng section
5480 of the Revised Statutes of the United States, as amended by Act March
2, 1889, c. 393, 25 Stat. 873 [U. S. Comp. St. 1901, p. 3696], which reads as
follows : "If any person having devised or Intending to devise any scheme or
artifice to defraud • • • to be effected by either opening or intending
to open eorrespondence or communication with any person, whether résident
within or outside the United States, by means of the post office establishment
of the United States, or by Incitlng such other person or any person to open
communication with the person so devising or Intending, shall, in and for
executing such scheme or artifice, or attempting so to do, place or cause
to be placed, any letter, packet, writing, circular, pamphlet, or advertisement
In any postofllce • • * such person so misusing the postofflce establish-
ment shall upon conviction, be punishable," etc.
The Indictment was In three counts. The flrst count charged :
"That W. W. O'IIara and Thomas H. Walker, • • ♦ on, to wlt, the
twenty-flrst day of May, in the year of our Lord one thousand nlne hundred
and two, in the county of Hamilton, in the state of Ohio, in the Circuit and
Western Division of the District aforesald, and within the jurlsdictlon of
this court, did then and there unlawfully, knowingly, and fraudulently devise
a scheme and artifice to defraud Henry Hlldebrant, P. B. Middleton, Harry
O. Thompson, and various other persons to thèse grand jurors unknown,
which said scheme and artifice to defraud was to be effected by opening and
Intending to open eorrespondence with said Henry Hlldebrant, P. B. Middle-
ton, Harry O. Thompson, and said various other persons to thèse grand jurors
unknown, by means of the post-ofllce establishment of the United States,
which said misuse of the post-office establishment of the United States was
then and there a part of said scheme and artifice to defraud, which said
scheme and artifice to defraud was in substance as follows, to wit :
"That they, the said W. W, O'Hara and Thomas H. Walker, • * • in-
tended to falsify, prétend, and state, in and through certain clrculars and
O HARA V. UNITED STATES. 00^
retters sent and dellvered through the post-otHcf- establishment of the United
States as aforesaid, that the said W. W. O'Hara, who had offices In the Union
Trust Building, Cincinnati, Ohlo, was a 'turf commissioner,' and had expert
professional handlcappers operating in connection with his commission house,
and that by reason of his expérience and knowledge in the race-horse world,
and his system of placing bets upon the varions races that were belng con-
ducted throughout the United States, ail risk of loss was practically elimi-
uated, and, by reason of the manner In which he was to conduct the business
of 'turf commissioner' as aforesaid, he would be able to earn for his eus-
tomers the large dividends and profits that he was from week to week to
give to the investors who Intrusted their money In his hands ; that, with the
money received frora his numerous customers and Investors in the United
States, pools would be formed the first of every week; that twenty-five per
cent, of the winnings was to be dedueted for the services of the commissioner,
and the net earnings of each week were to be sent to his customers as afore-
said ; that never more than twenty-five per cent, of the money sent by each
customer was to be hazarded upon any race at any one time, and that the
principal of the investors or customers was always to be kept Intact and re-
turned to the said investors or customers upon demand, and that the divi-
dends to be paid and promlsed to be paid were always to be pald from earn-
ings or profits derlved from winnings upon the races or bets made upon race
horses.
"ïhe grand jurors further présent that said W. W. O'Hara and Thomas
H. Walker * * * intended to obtain from said Henry Hlldebrant, P. B.
Middleton, Harry O. Thompson, and the varions other persons to thèse grand
.lurors unknown, between the dates of January 1, 1902, and May 2.3. 1902,
large sums of money, to wlt, more than $200,000, on the représentation that
they would use the same in betting upon races or upon race horses.
"In truth and in fact, however, the grand jurors aver that said W. Wi
O'Hara and Thomas H. Walker » * * did not intend to use the money
so received from the said Henry Hlldebrant, P. B. Middleton, Harry O.
Thompson, and said varions other persons to thèse grand jurors unknown,
in betting upon races or upon race horses ; that they dld not Intend to hâve
in thelr employ professional handlcappers, or persons experlenced In the
raclng business ; that they dld not Intend to Invest the money so received
as they represented as aforesaid, to wlt, in betting upon races or upon race
horses; but the said W. W. O'Hara and Thomas H. Walker * * * dld
intend to pay out each week to thelr customers, or persons who had Intrusted
money to them to be Invested in their pretended scheme as aforesaid, a por-
tion of said large sum of money (the amount Is to thèse grand jurors un-
known), which they were to prétend and state were the net profits or earn-
ings of the money received and Invested in their pretended scheme as afore-
said, and were to appropriate and couvert to their own use a large amount
of the money received from the victims of said scheme, the exact amount
being unknown to thèse grand jurors; and at no tlme after the recelpt of
rhe money from Henry Hlldebrant, P. B. Middleton, Harry O. Thompson, and
said varions other persons to thèse grand jurors unknown, was the principal
to be received from thèse parties, as aforesaid, to be kept intact, so that It
eould be returned to them upon demand, as they were to promise they would
do.
"And the grand jurors aforesaid, upon thelr oaths and affirmations, do
further présent that said Henry Hlldebrant, P. B. Middleton, Harry O.
Thompson, and said varions other persons to thèse grand jurors unknown.
by reason of the false and fraudulent acts as aforesaid, and In the use of the
mails as aforesaid, were to be defrauded out of the money placed in the
hands of the said W. W. O'Hara, Thomas H. Walker, In large sums, to wlt,
to the amount of more than $200,000.
"And the grand jurors aforesaid, upon their oaths and affirmations, do
further présent that said W. W. O'Hara and Thomas H. Walker * • *
did carry out said scheme to defraud above outllned, thereby defrauding said
varions persons out of large sums of money, and did unlawfully, wrongfully.
and willfuUy, then and there, in further exécution of said scheme and arti-
fice to defraud, and in the misuse of the post-office establishment of the Unltr
554 129 FEDERAL REPORTER.
ed States as aforesald, place and cause to be placed In the post office at Cin-
cinnati, for mailing and dellvery, a letter addressed to Henry Hildebrant,
Washington 0. H. 0., whlch said letter was in the words and iigures follow-
ing, to wit:
" 'Office of W. W. O'Hara, Turf Commlssloner, Union Trust Building,
Fourth and Walnut Streets.
'"Cincinnati, O., May 21, 1902.
'"Mr. Henry Hildebrant, Wash. C. H. O. : The dividend for week ending
May 17, 1902, is $3.00 on each $100. Enelosed flnd money order for $9.00,
less exchange on your investment of $300.
" 'Kespectfully, W. W. O'Hara.'
— Contrary to the form of the statute In sueh cause made and provided, and
against the peace and dignity of the United States of America."
The second and third counts descrlbe the scheme to defraud in simllar
language, but the second charges that the scheme was devised on May 19,
1902, and on that day, to carry It eut, a letter (which is set out in full) was
mailed to P. B. Middleton; while the third charges that the scheme was
devised May 21, 1902, and on that day, to carry It out, a letter (whieh Is set
out in full) was mailed to Harry O. Thompson. There was a gênerai verdict
of guilty. Motions in arrest of judgment and for a new trial having been
overruled, the plalntifC in error was sentenced to imprisonment in the peni-
tentiary. There are 96 assignments of error.
Shay & Cogan and Thos. H. Darby, for plaintiflf in error.
Sherman T. McPherson, U. S. Atty., and Edward P. Moulinier,
Asst. U. S. Atty.
Before LURTON, SEVERENS, and RICHARDS, Circuit Judges.
RICHARDS, Circuit Judge, after making the foregoing statement,
delivered tlie opinion of the court.
I. By the motion to quash and a demurrer, a number of objections
were made to the indictment: That it is indefinite and répugnant in
its averments as to time; that it does not charge the offense directly,
but only by intendment and argumentation ; that the scheme to defraud
was one impossible of performance, and therefore not within the con-
templation of the law; and that the things the défendants pretended
they would do were forbidden by the laws of Ohio, and therefore the
défendants cannot be punished for not doing them. The form of the
indictment might hâve been improved, but a defect in matter of form
only is immaterial. Rev. St. § 1025 [U. S. Comp. St. 1901, p. 720].
As Mr. Justice Brown said:
"WhlIe the rules of crlminal pleadlng require that the accused shall be
fully apprised of the charge made against him, It should, after ail, be borne
In mind that the object of crlminal proceedings is to convict the guilty, as
well as to shield the Innocent, and no Impracticable standards of particu-
larlty should be set up whereby the government may be entrapped into mak-
ing allégations which It would be Impossible to prove." Evans v. U. S., 153
U. S. 584, 590, 14 Sup. Ct. 934, 38 L. Ed. 830.
It is sufficient, under section 5480 [U. S. Comp. St. 1901, p. 3696],
to charge that the défendants, having devised or intending to devise
a scheme to defraud, to be efïected by the use of the mails, did, in the
exécution of this fraudulent scheme, deposit for transmission a let-
ter in some post office. The offense is the misuse of the mails — the
deposit of a letter in the exécution of a scheme to defraud. Weeber
O'hAEA V. UNIIED SIATES. 555
V. U. S. (C. C.) 62 Fed. 740; Durland v. U. S., i6i U. S. 306, 315. 16
Sup. Ct. 508, 40 L. Ed. 709.
In the first count it is charged that the défendants, on May 21, 1902,
devised a scheme to defraud. This scheme is described in détail, and
in conclusion it is alleged that the défendants did "then and there,"
in exécution of this scheme, place in the mails at Cincinnati a letter,
a copy of which is given. The letter is dated May 21, 1902, and ad-
dressed to Hildebrant, one of the persons it is averred the scheme was
devised to defraud. It is clear the pleader intended to charge that the
scheme was devised on the day the letter was dated and mailed. In
the body of the indictment there is the averment that the défendants
intended to obtain from Hildebrant and others, between January i,
1902, and May 23, 1902, large sums of money, namely, more than
$200,000, on the représentation that they would use it in betting upon
horse races. The claim is that this paragraph vitiates the indictment
for repugnancy, because the scheme devised on May 21, 1902, could
not be carried into exécution between January l, 1902, and May 23,
1902. But this paragraph is not connected by averment with the
scheme to defraud described in détail. It stands alone, is inessential,
and may be rejected as surplusage. Lehman v. U. S. (C. C. A.) 127
Fed. 41, 45. Doubtless the pleader, although aware that the défend-
ants had been operating the scheme from January, hesitated to charge
that they devised the scheme in January for the purpose of defrauding
Hildebrant, whom at that time they did not know and could not hâve in
mind. Out of abundance of caution, he charged that the scheme to de-
fraud Hildebrant was devised the day they wrote and mailed him the
letter.
There is no merit in the objection that the indictment does not charge
the ofifense in positive terms. The intention to make false and fraud-
ulent représentations by means of circulars and letters transmitted
through the mails, and thus obtain money from the credulous, consti-
tuted the scheme itself.
The objection that on its face the scheme was impossible of exécution,
and therefore should hâve deceived no one, is without merit. Weeber
V. U. S. (C. C.) 62 Fed. 741. Schemes to defraud dépend for success
not on what men can do, but upon what they may be made to believe,
and the credulity of mankind remains yet unmeasured.
Finally, it is urged the scheme involved a gambling transaction for-
bidden by the laws of Ohio, and that the défendants ought not to be
prosecuted for not carrying it out. It is not charged that the race
tracks were in Ohio, and it is not clear that the betting had to be donc
in Ohio. But, however this may be, the défendants were not prosecuted
for failing to bet on races, but for using the mails in executing a scheme
to despoil the public. The betting was but a prêteuse. If they had bet
the money, they would be in no better plight, for they could not hâve
bet it so as to enable them to redeem their promises. They knew this
from the start.
2. It is claimed that the trial court erred in limiting the number of
the defendant's witnesses to be subpœnaed at the government's ex-
pense to four upon each particular point named in the defendant's
prtecipe. This was within the discrétion of the court, under section
556 129 FEDERAL REPORTEE.
878, Rev. St. U. s. [U. s. Comp. St. 1901, p. 668], and violated no
fundamental right under the Constitution. Crumpton v. U. S., 138
U. S. 361, 364, II Sup. Ct. 355, 34 L. Ed. 958; U. S. V. Van Duzee,
140 U. S. 173, 177, II Sup. Ct. 758, 35 L. Ed. 399; Goldsby v. U. S.,
160 U. S. 70, 73, 16 Sup. Ct. 216, 40 L. Ed. 343.
3. The record shows that the défendant was arraigned and pleaded
"not guilty," but afterwards, on leave granted, he withdrew this plea
to file the motion to quash and the demurrer. They being overruled, he
went to trial, the record not showing whether he again pleaded "not
guilty." An Ohio case (Hanson v. State, 43 Ohio St. 376, i N. E. 136)
is relied on as holding that a record is fataîly defective which does not
show an arraignment on the indictment before trial. But this record
does show such an arraignment. He did plead "not guilty." That
plea was only withdrawn for the purpose of filing the motion and de-
murrer. The order shows that it was not finally withdrawn, but only
formally for the spécial purpose. Thèse having been overruled, he
was remitted to his plea of "not guilty." Nothing was left except to
plead "guilty" or go to trial. Naturally, he did the latter.
4. Eight witnesses were permitted, over the objection of the défend-
ant, to testify to transactions with him prior to May 21, 1902, when it
was alleged the scheme was devised. It is urged a variance is shown
because thèse persons were not named in the indictment; and, besides,
that their testimony should hâve been excluded. The record does not
show that the question of variance was presented to the court below.
If they had been entrapped before May 21, 1902, evidently the scheme
devised on that day was not intended for them, and the ^rand jury
could not properly hâve included their nanies as persons whom the
scheme of May 21, 1902, was devised to defraud. Their testimony was
objected to on the ground that it was not responsive to the allégations
of the indictment, and it was admitted because it was introduced and
tended to prove the fraudulent character of the scheme which the de-
fendant was operating. The court rightly refused to limit the govern-
ment to the précise time when the indictment averred the scheme was
devised to defraud the person to whom the letter was mailed. A like
scheme had been in opération for months. The scheme charged in
the indictment was but a continuation of this. It was entirely proper
to introduce évidence of its character as reflecting upon the nature of
the scheme the défendant was engaged in executing when he mailed
the letter in question.
5. The court refused to permit the défense to introduce in évidence
a number of loose sheets of paper, containing figures about horse
races, which the défendant, who was on the stand, could not identify
or explain. Thèse papers did not appear to be original records, or
copies of original records, and they were rejected on this ground.
We think the court was right in excluding them. They were not
properly connected with O'Hara's transactions in carrying out the
scheme under considération. In no way were they identified as records
or copies of records of his transactions.
Thèse are the only assignments of error which, in our opinion, merit
considération.
The judgment is affirmed.
HENNESST BEOS. & EVANS GO. V. MEMPHIS NAT. BANK. 557
HENNESSY BROS. & EVANS CO. v. MEMPHIS NAT. BANK.
(Circuit Court of Appeals, Sixth Circuit May 4, 1904.)
No. 1,246.
1. Banks— OvEEDEAiTS— Notes.
An overdraft allowed by a bank Is a loan due on demand, and hence,
where a demand note Is given therefor, a suit may be niaintained there-
on to the same estent as could hâve been maintained on the overdraft
thereby segregated from the account.
2. COEPOBATIONS— ACTS OF OîTICEES— NOTES— EXECUTION.
A building corporation opened an office in a city in a foreign state,
where it was conducting large building opérations, and placed the same
in charge of Its assistant secretary, who opened a bank account in de-
fendant's bank in the name of the corporation through which the lat-
ter's flnancial transactions at that place were accomplished. The account
becoming overdrawu, such officer executed demand notes in the name of the
corporation to the bank therefor, whereupon the amounts were credited
In the corporation's bankbook, and the book was delivered to the offi-
cer, whose accounts were perlodically checked up by the corporation, and
no objections to the accounts were made. Held, that the corporation was
liable on the notes, though no express authority to the officer executing
them to do so was shown, and he subsequently became a defaulter to the
corporation for a large sum.
S. Same— Intekest.
Where an overdraft was settled by the exécution of a note payable on
demand, the amount due bore interest from the date of the settlement.
In Error to the Circuit Court of the United States for the West-
ern District of Tennessee.
W. A. Percy and T. K. Riddick, for plaintiffs in error.
Carroll, McKelIar, Bullington & Biggs, for défendant in error.
Before LURTON, SEVERENS, and RICHARDS, Circuit Judges.
SEVERENS, Circuit Judge. There are counterwrits of error in
this case, on which each party prays for the reversai of the judg-
ment rendered by the court below, and there are bills of exceptions
taken by each. But the errors complained of on each side relate to
one controversy, and may be considered together.
Hennessy Bros. & Evans Company, a building corporation organ-
ized under the laws of Illinois, and located at Chicago, entered into
large contracts during the year 1900 for building in the city of Mem-
])his, Tenn., involving the employment of several hundred thousand
dollars, and sent its assistant secretary, John D. Evans, who had exe-
cuted the contracts in its behalf, to Memphis, to superintend its business
there. On account, as we must suppose, of the frequently recurring
financial necessities of his company at Memphis, Evans, in its behalf,and
with its knowledge and assent, opened an account with the Memphis
National Bank in November of that year. On December 26, 1900, the
account of the company was overdrawn, and, to cover the overdraft,
he gave to the bank a note, payable on demand, for $4,500, and signed
in the company's name "by John D. Evans Asst. Secy.," the entire
amount of which was placed by the bank to the crédit of the companx-
in its account. In April, 1901, the account being again overdrawn,
558 129 FEDERAL REPORTEE.
Evans gave the bank another note payable in 30 days, for $2,000, signed
in the same way, and the proceeds were put to the crédit of the com-
pany in its account. This last note was renewed three times; the
last renewal having been made July 17, 1901, by a note for the same
amount payable on demand. The company had a passbook in whick
the account was frequently balanced by the bank and returned to the
company. The entries in the passbook showed the crédits of the $4,-
500 and of the proceeds of the $2,000 note as of the dates when the
notes were given. This account, consisting of débits and crédits, con-
tinued from November, 1900, to September, 1901, at about which time
John D. Evans disappeared; being, as was alleged by the company,
a defaulter to it for a considérable sum, which it was claimed was ob-
tained by him by checks on the company's account with the bank,
which was thereby overdrawn. Later other officers of the company
settled with the bank for the overdraft then appearing, but refused to
acknowledge or pay the notes of $4,500 and $2,000, respectively, upon
the ground that they had been given by Evans without authority. It
appeared upon the trial that from time to time the président and secre-
tary of the company, who had gênerai charge of its finances, went from
Chicago to the Memphis office, and "checked up" Evans' financial trans-
actions, including those with the bank. But the company gave évi-
dence tending to show that the passbook above mentioned was not pro-
duced to them, and that it was not seen by them until after the disap-
pearance of Evans. But they knew that Evans had it in his possession.
They also knew that, during the running of the account, overdrafts
had occurred at several times, and they made no objection to the making
of such overdrafts. Some other facts appear in the course of this
opinion, but it is believed that those most material hâve now been
stated.
The bank brings this suit to recover the amount of the two notes
above mentioned, and adds the common counts, on which it claims that,
if it cannot recover upon the notes themselves, it may be allowed to
recover the amounts which they represent as having passed to the
crédit of the company, of which it had the avails, as money had and re-
ceived. As to the notes, the company pleaded that they were never
authorized, and, as to the other counts, it pleaded the gênerai issue.
Upon the trial, the making of the notes having been proved in the
circumstances already stated, the défendant called as witnesses the
président and other officers of the company, who gave gênerai évidence
denying that Evans was authorized to sign the notes for the company,
and denying that the company ever had knowledge of the making and
using said notes until after the disappearance of Evans, and that it had
never ratified them. Assuming that an issue was thus established upon
the évidence, the court permitted the parties to go into évidence in
respect to the question as to whether the défendant had received bene-
fit from the overdrafts which the notes represented, and, if so, how
much. A prolonged inquiry was entered upon for the purpose of as-
certaining what debts of the company had been paid by checks made
by Evans on the bank, a considérable number of which were traced to
the company's creditors. At the close of the testimony the plaintiff
asked for an instruction that a verdict should be rendered for the
HENNESST BROS. & EVANS OO. T. MEMPHIS NAT. BANK. 559
plaintiff for the amount of the notes, with interest. This request was
refused, and the plaintiff excepted. The court, in its instruction to the
jury, left open for their détermination the question whether the giving
of the notes by Evans was authorized or not, and, if not, then the
question to what extent the défendant had been benefited by the crédit
given on account of them, in determining which the défendant could
only be charged with what it actually got, and not with that which
Evans appropriated to his own use. The jury rendered a verdict for
the plaintiff for $6,008.00. Several rulings were made by the court
in taking évidence and in its charge to the jury, which are complained
of by the défendant, and are made grounds for its assignments of error
on its writ.
In view of those facts about which there was no confiict in the testi-
mony,we think the plaintiff was entitled to the instruction which it asked.
There was no légal ground on which the contention that the notes in
suit were not obligatory upon the défendant, or, what amounts to the
same thing, that it was not bound for the crédit which it got on the occa-
sions when they were given, could rest. An overdraft allowed is a loan
due on demand, and may be sued for as such. Thomas v. International
Bank, 46 111. App. 461 ; Franklin Bank v. Byram, 39 Me. 489, 63 Am.
Dec. 643. Of precisely the same character is the obligation of a note
given, payable on demand, to cover it, to the extent that the overdraft
is thereby segregated from the account. With respect to the note for
$2,000, it appears that a part of that amount was to pay an overdraft,
and the balance to provide funds to check against. Thèse funds were
checked against and withdrawn by the man in charge of the account,
and apparently, so far as the bank could see or know, for the company's
business. The notes served every purpose which would hâve been
subserved if the company had made équivalent deposits on those dates.
The bank required the overdrafts to be paid, and, instead of cash, it
took those notes. The authority which the company intrusted to
Evans, or the exercise of which it repeatedly sanctioned, was suf-
ficiently extensive to cover his dealings with the bank, including the
giving of the notes. We are inclined to think that his gênerai au-
thority, coupled with that which was given him to open an account and
transact the business of his company with the bank, was sufficient to
justify his covering of the overdrafts which he had made in the com-
pany's behalf, and of which the company had the benefit. If he had
made the company's note, and negotiated it with the bank, professedly
for the company's business, and secured a loan of money thereon,
which he used in the company's business, could it be doubted that the
company would be bound by his act? We think not. If his use of
the proceeds was that of paying an overdraft owing by the company,
would not that be devoting it to the company's business? But there
could be no distinction between such a transaction as that which oc-
curred and that supposed, except in mère form, on which the law would
lay no stress. But it was indisputably proved that the company knew
that overdrafts were occurring. It took no précautions to prevent
them, or to provide for their settlement. It must hâve known that
they had been provided for in some way, and must be if they occurred
again. The only reasonable inference is that it was intended by the
300 120 FEDEEAL EEPOKTEB.
Company to leave the duty of attending to such contingencies to their
superintendent, who was in charge of the account.
There is another feature of the case, however. The company kept
a passbook, which was periodically balanced by the bank and returned
to the company; that is, it was returned to its superintendent, who
had his office there, and was the person who conducted the business to
which the book had relation. The crédits obtained by the notes were
shown by the book. If the company had any reason to suppose that
those crédits were obtained for its own remittances to Evans, an ex-
amination of its own books when it was "checking up" Evans would
hâve immediately disclosed that it had not made such remittances. And
it may be remarked in this connection that it is not now contended that
such remittances were made, or that there were any remittances of
which thèse could hâve been parcels. A comparison of the books of
the company with those of the agent would detect such a fact if it ex-
isted. But it is urged that Evans was a rogue, and was contriving
in his own interest to put some of the money he should get from the
bank on the crédit of his company to his own uses, and that there-
fore the information given by the passbook should not be imputed to his
principal. The rule of law thus invoked is not applicable. It is ap-
plicable when the agent leaves his place as agent, and, in dérogation
of the rights of his principal, concocts and carries into efïect some
scheme of his own for his private advantage, and where the other party
knows or has good reason to believe that the agent is acting falsely.
But there is no reason hère for charging the bank with notice of any
wrongful purpose of the company's agent. It returned the balanced
passbook to the person put in place by the company to receive and ex-
amine it, and take steps to correct anything objectionable which the
book indicated. The bank had the right to expect that the company
would do its duty in this regard, and the company is affected by notice
of the contents of the passbook to the same extent as if the agent
had been an honest one. It was so held by this court in First Na-
tional Bank of Evansville v. Fourth National Bank of Louisville,
i6 U. S. App. I, 56 Fed. 967, 6 C. C. A. 183. And see Leather Manu-
facturers' Bank v. Morgan, 117 U. S. 96, 6 Sup. Ct. 657, 29 L,. Ed. 811 ;
First National Bank v. Allen, 100 Ala. 482, 14 South. 335, 27 L. R. A.
426, 46 Am. St. Rep. 80. This contention of the défendant runs
counter, as, indeed, does its entire défense, to the settled rule that, when
one of two persons is to suffer by the act of an agent intrusted by his
principal with the appearance of authority to do the act, that one shall
take the burden whose agent committed the wrong. We think this
is a plain case for the application of that doctrine. It seems to fit the
undoubted facts, and we can see no valid reason why the conséquences
of the dishonest conduct of the agent toward his principal should be
shifted from the company to the bank, which appears to hâve acted
in good faith. If the controlling facts of the case were in doubt or
open to fair dispute, the case should hâve gone to the jury under a
proper submission of the issues by the court. But they were not, and
the case should be dealt with accordingly, as was done in Myers v.
Bank, 193 Pa. i, 44 Atl. 280, 74 Am. St. Rep. 672. It is trûe that
OHAMBEES V. AMEEICAN TIN PLATE 00. 561
there is a sweeping déniai of the authority of Evans, but that amounts
to nothing in the face of the actual facts.
With respect to the matter of interest, an overdraft running without
any interest or adjustment does not draw interest, upon the principle
that applies to open accounts generally. But it is held that when it
has been demanded, or an account therefor has been rendered, it would
carry interest. Casey v. Carver, 42 III. 225.
As there must be a new trial, and the questions raised upon the other
writ are not likely to be presented in the same way, we forbear to
consider them.
The judgment will be reversed on the writ of error taken by the
Memphis National Bank, with costs.
CHAMBERS v. AMERICAN TIN PLATE CO.
(Circuit Court of Appeals, Sisth Circuit May 4, 1904.)
No. 1,243.
1. Mastee and Servant— Injubies to Servant— Scaffolding—Constbtjc-
TION— DUTT OF MASTEB.
Where défendant, engaged in tlie construction of a building, under-
toolc to erect scafColding for the use of bricklayers, and, to accomplish
this, employed a. boss carpenter, who, with Lis servants, negligently con-
structed the same with light and insufflcieut materials, by reason of
which one of the bricklayers was injured, défendant waa liable therefor.
In Error to the Circuit Court of the United States for the Northern
District of Ohio.
Action for personal injuries sustained by the plaintifF, while in the
dejfendant's employ, by the fall of a scaffolding on which he was stand-
ing when laying brick in a wall of a building in course of construction.
Upon the conclusion of the plaintiff's évidence, Wing, District Judge,
instructed the jury to return a verdict for the défendant.
Chas. Fillus and Murray & Koonce, for plaintiff in error.
T. H. Gilmer and E. K. Wilcox, for défendant in error.
Before LURTON and RICHARDS, Circuit Judges, and CLARK,
District Judge.
LURTON, Circuit Judge. The défendant was erecting for its own
use a large brick mill. It supplied the materials and hired masons
and carpenters by the day, and the work was carried on under the gên-
erai direction of a superintendent. A scaffolding was constructed out
of material furnished by the défendants for the use of the masons in
the prosecution of their work. This scaffold fell while the plaintiff
was standing thereon engaged in laying brick. The pétition charges
that the fall was due to def ective and unfit materials and also to negU-
gent construction. The falling of a staging or scaffold without any
apparent cause may well be regarded as prima facie évidence of négli-
gence on the part of the person who had provided it. Stewart v.
H 1. See Master and Servant, vol. 34, Cent. Dig. § 397.
129 F.— 36
562 129 FEDERAL REPORTEE.
Ferguson, 164 N. Y. 553, 58 N. E. 662. But in this case there was évi-
dence tending to show that its fall was due to négligent construction.
There was also évidence showing that the materials fumished by the
défendant for the construction of this scaffold was hemiock lumber, one
inch thick, full of knots and knotholes. There was nô expert évidence
as to the fitness of such materials for such a purpose, though there
was évidence of the load which was likely to be upon it, and that it
fell under a less load than ordinarily expected. There was also évi-
dence that some of the planks were found broken "crosswise," as well
as split. We are not sure that expert évidence was essential, under
such facts, to justify a submission of the question of the quality and fit-
ness of such materials for such a purpose. The common expérience
and knowledge of the strength of such material would seem to furnish
a fair standard for an intelligent judgment upon such a question. In-
asmuch, however, as there must be a reversai of the case upon another
ground, we express no opinion upon the ruling of the trial judge in
respect to this aspect of the case.
The évidence tended to show that the masons did not undertake or
assume to construct this staging, and that neither the plaintiff nor any
of those workmen for whose use it was constructed had anything what-
ever to do with its building or the sélection of materials therefor. Up-
on the other hand, there was évidence tending to show that the défend-
ants assumed and undertook to construct same, and that they had same
made by one John Frampton, a boss carpenter in their employment, and
that Frampton was in no way aided or assisted by other than his car-
penter helpers. There was also évidence tending to show that when the
scaffold was finished the plaintiff and his fellow masons were directed
by the foreman of the bricklayers to go upon and continue their work
upon same. The only question, then, is whether the relation of the
parties is such that the défendants are liable for the négligence of
Frampton in the construction of the staging so made. There is a line
of cases holding that when the employer furnishes suitable materials,
and the workmen themselves construct a scaffolding or staging as a
part of the work which they undertake to perform, and build it accord-
ing to their own judgment, that the employer is not liable for an injury
to one of their own number, sustained in the subséquent use of the
structure, in conséquence of négligence in construction. The érection
and re-erection of such a staging as the work requiring its use pro-
gresses, being itself a part of the very work which the employés are
to do, takes it without the gênerai rule in respect to the duty of tlie
master to exercise reasonable care to furnish a reasonably safe place
and appliances. Am. & Eng. Ency. Law, vol. 20, p. 82; Kimmèr v.
Weber, 151 N. Y. 417, 421, 45 N. E. 860, 56 Am. St. Rep. 630; Armour
V. Hahn, m U. S. 313, 4 Sup. Ct. 433, .28 L. Ed. 440; Killea v. Faxon,
125 Mass. 485. But the rule is quite otherwise if the employer himself
undertake to furnish such scaffolding for the men who are to work
thereon. In such case the duty is one of those positive duties of the
master toward the servant which cannot be discharged by the substi-
tution of a compétent agent. The act or service to be donc is that of
furnishing a reasonably safe place or appliance, and négligence in the
doing of such a service is the négligence of the master, without re-
CHAMBERS V. AilEKICAN TIN PLATE CO. 5GS
gard to the rank of différent employés. Connor v. Pioneer Co. (C.
C.) 29 Fed. 629; McNamara v. McDonough, 102 Cal. 575, 36 Pac.
941 ; Coughtry v. Globe Woolen Co., 56 N. Y. 124, 15 Am. Rep. 387;
Kimmer v. Weber, 151 N. Y. 417, 45 N. E. 860, 56 Am. St. Rep. 630;
Bowen v. The C. B. & K. C. Ry., 95 Mo. 268, 8 S. W. 230; Mulchey
V. Methodist Society, 125 Mass. 487; C. & R. Co. v. Maroney, 170
111. 520, 48 N. E. 953, 62 Am. St. Rep. 396; Behm v. Armour, 58
Wis. I, 15 N. W. 806; Austin Mfg. Co. v. Johnson, 89 Fed. 6jT, 32
C. C. A. 309 ; Am. & Eng. Ency. Law, vol. 20, p. 81 ; Labatt, Master
& Servant, 614 et seq. In Killea v. Faxon, 125 Mass. 485, it appeared
that the staging had been made by direction of the master or his
superintendent by a carpenter in his employment, and that it sub-
sequently gave way when being used by a workman sent by a cop-
persmith to put up gutters bought from him. The court held that
there was no évidence that the employer undertook to furnish a
staging for the plaintiff, and that the négligence of the carpenter,
who was a compétent man, was the négligence of a fellow servant.
It is only upon the assumption that the employer was under no obli-
gation to furnish a reasonably safe staging to the plaintiff that the
case is reconcilable with the doctrine of the courts of the United
States in respect to the nondelegable character of the duty of the
master to furnish his employés with reasonably safe appliances. In
the case at bar there was no évidence tending to show that the ma-
sons, for whose use the scaffold in question was made, undertook
to furnish, or build, or construct their own staging, and no évidence
that it was customary for such workmen, directly employed each
for himself, to build their own scaiïolds. On the contrary, there
was évidence tending to show that the défendant had employed
one Frampton as boss carpenter to erect such scaffolding as should
be needed, and to do such other carpenter work as should be needed
in the progress of the Building. There was évidence, therefore,
from which the jury might reasonably infer that the défendants un-
dertook to furnish ail necessary scafïolding, and that they had in
fact supplied a completed structure for the use of the plaintiff and
his fellow masons. Whether we regard a mason's staging as a
place to stand and do his work or as an appliance for the doing of
his work, is not very important for the purposes of this case. If
an obligation to furnish such staging was assumed by the défend-
ants, they were bound to exercise reasonable care to furnish an
appliance reasonably safe and suitable for the purpose. The dis-
tinction we draw is noted by the New York Court of Appeals in
Kimmer v. Weber, 151 N. Y. 417, 421, 45 N. E. 860, 86r, 56 Am. St.
Rep. 630, where it is said :
"When a gang of masons are engaged In plastering or painting a room, the
construction of proper platforms or places upon whlch to stand while doing
the work is a détail of the business that is generally left to the men them-
selves. The master may, it is true, take this out of their hands, and assume
to do it himself, and in that case he would be bound to furnish an appliance
reasonably safe and suitable for the purpose."
In Connor v. Pioneer Co. (C. C.) 29 Fed. 629, Brewer, Circuit
Judge, now Justice Brewer, charged a jury in a case where the plain-
564 129 FEDERAL REPORTER.
tiff had been înjured by the fall of a scaffold upon which he was
working "that, if the défendant had furnished the material," etc.,
"and left with the tilers generally the duty of preparing their own
platforms, and this platform, so prepared, was defective, that was
the négligence of the employés, and the employer would not be lia-
ble ; while, on the other hand, if the employer had employed spécial
individuals — Mr. Simpson and his assistant — to attend to the work
of preparing the platforms, and they failed to prépare a platform
that was reasonably safe, their négligence was the négligence of the
défendant, and the Company would be responsible." If an employer
undertake himself to furnish his employés with reasonably suitable
and safe appliances, he does not discharge his duty by the employ-
ment of an agent to carry out his obligation. For the négligence
of that agent he continues responsible. "If," says Justice Peckham,
speaking for the court in Northern Pacific R. R. v. Peterson, 162
U. S. 346, 353, 16 Sup. Ct. 843, 845, 40 L,. Ed. 994, "the master be
neglectful in any of thèse matters, it is a neglect of a duty which he
personally owes to his employés, and, if the employé suffer damage
on account thereof, the master is liable. If, instead of personally
performing thèse obligations, the master engages another to do
them for him, he is liable for the neglect of that other, which, in
such case, is not the neglect of a fellow servant, no matter what his
position as to other matters, but it is the neglect of the master to
do those things which it is the duty of the master to perform as
such." This nondelegable character of the personal duties of an
employer has been many times stated by the Suprême Court and by
this court. Hough v. Ry. Co., 100 U. S. 213, 218, 25 L,. Ed. 612;
Northern Pac. R. Co. v. Herbert, 116 U. S. 642, 6 Sup. Ct. 590, 29
L. Ed. 755; Union Pac. R. R. v. Daniels, 152 U. S. 684, 14 Sup. Ct.
756, 38 L. Ed. 597; Texas Pac. Ry. Co. v. Barrett, 166 U. S. 617,
17 Sup. Ct. 707, 41 L. Ed. 1136; Felton v. Bullard, 94 Fed. 781, 785,
37 C. C. A. I ; L. & N. R. Co. v. Miller, 104 Fed. 124, 43 C. C. A.
436; W. U. Tel. Co. V. Burgess (C. C.) 108 Fed. 26, 33.
The judgment must be reversed, with directions to grant a new
trial.
YORK V. WASHBURN.
(Circuit Court of Appeals, EIghth Circuit Aprll 6, 1904.)
No. 1,891.
FEDERAI, Courts— Actions— Tkiai, bt Court— Findings—Effect.
Where an action at law is tried to the court without a .lury, the flndlng
of the court, given under the circumstances reclted in this opinion, and
whether regarded as gênerai or spécial, has the same effect as the ver-
dict of a jury, and prevents any Inquiry on appeal as to whether it ia
sustained by the évidence.
Opinion of Tbial Judqe— Xot a Spécial Finding.
An opinion of the trial .ludge, delivered in writing and setting forth the
reasons for his décision, does not, by being copied into the judgment entry,
become a spécial flndiug of the ultimate facts, ia the nature of a spécial
verdict
YORK V. WASHBURN. 565
8. STATtPTE OF Frauds— State Laws— Statu: Décisions— Rules or Pbopeety
— EfFECT in FEDERAL COURTS.
Whetlaer an oral contract for a lease of real property for more than
a year. not complying with the statute of frauds of the state where the
property is situated, is a nullity or unenforceable only at the élection of
the parties, is not a question of gênerai jurisprudence or of commercial or
mercantile law, but a rule of property, which must be determlned in the
fédéral courts according to the décisions of the highest judlcial tribunal
of the state where such property is located.
4. Same— Lease for More than a Year — Eabnest Money— Recovert.
An oral contract for the letting of real property located in Minnesota
for more than a year, not complying with the statute of frauds of such
state, though unenforceable, is not void, and hence the contemplated lessea
cannot recover earnest money paid thereon; the lessor being ready,
willing, and able to perform.
In Error to the Circuit Court of the United States for the District
of Minnesota.
For opinion below, see ii8 Fed. 316.
Shubael F. White (Frank F. Price, on the brief), for plaintiff in error.
John G. Williams and W. D. Bailey, for défendant in error.
Before SANBORN, THAYER, and VAN DEVANTER, Circuit
Judges.
VAN DEVANTER, Circuit Judge. This was an action at law by
York to recover back earnest money paid by him to Washburn upon
an unperformed agreement for the procurement and delivery of a min-
ing lease of real property for a term of years. Plaintifï's complaint
placed his right of recovery upon two grounds — one, that the agree-
ment was oral, and therefore void under the statute of frauds of the
state of Minnesota, in which the real property is situate ; and the other,
that défendant failed and refused to deliver a lease conforming in
terms to the agreement. There was no allégation that the agreement
left any of the terms of the lease to be settled by further negotiations,
or that payment of the earnest money was raade under any misappre-
hension or mistake. In addition to a gênerai déniai, the answer, so
far as now material, was to the efifect that défendant had been ready,
able, and willing to deliver to plaintiff a lease conforming in ail re-
spects to the agreement, but that plaintiff had refused to accept such
a lease, and, for the purpose of avoiding performance of the agreement,
and as a mère subterfuge, had insisted upon receiving a lease differing
in terms from those agreed upon. The case was tried to the court,
the parties having waived a jury by stipulation. The judgment was
for défendant. There was no spécial finding of the facts, and no
exception was reserved to the gênerai finding. Nor was there an ap-
plication or request at the close of the trial for a finding or judgment
for plaintiff, in the nature of a request for a directed verdict, based
upon some spécifie proposition of law, or upon the theory that there
was no substantial évidence to sustain a finding or judgment for defend-
t 3. State laws as rules of décision In fédéral courts, see notes to Griffiu
V. Wheel Co.. 9 C. C. A. 548; Wilson v. Perrin, 11 C. C. A. 71; Hill T. Hite,
29 C. O. A. 553.
566 129 FEDERAL EBPOBTEB.
ant. Ali but one of the assignments of error are to the effect that,
upon the évidence, or upon the statements of fact in a written opinion
given by the trial judge, the judgment should hâve been for plaintiff.
The assignments seem to be pfincipally directed against portions of
that opinion. It was carefully prepared; states the history of the
case; quotes from the évidence, and comments thereon; states the
judge's conclusions upon the law, with his reasons therefor; sustains
defendant's version of the agreement in respect of the terms of the
lease, and his claim that he "was ready, willing, and able to obtain and
deliver to the plaintiff a lease in conformity with such agreement, and
that the plaintiff, without any just cause, failed and refused to accept
such lease and carry out the agreement"; and then directs the entry
of a judgment for défendant. The opinion was copied into the judg-
ment entry, but it is not, and was evidently not intended to be, a spécial
finding of the ultimate facts, in the nature of a spécial verdict, such as
is contemplated by sections 649 and 700 of the Revised Statutes [U. S.
Comp. St. 1901, pp. 525, 570]. Insurance Co. v. Tweed, 7 Wall. 44,
51, 19 L. Ed. 65; Dickinson v. Planters' Bank, 16 Wall. 250, 257, 21
L,. Ed. 278; Lehnen v. Dickson, 148 U. S. 71, 77, 13 Sup. Ct. 481, 37
L. Ed. 373 ; Reed v. Stapp, 3 C. C. A. 244, 246, 52 Fed. 641 ; Adkins
v. Sloane, 8 C. C. A. 656, 60 Fed. 344; Kentucky, etc., Co. v. Hamilton,
II C. C. A. 42, 63 Fed. 93; Hinkley v. City of Arkansas, 16 C. C. A.
395, 398, 69 Fed. 768 ; Minchen v. Hart, 18 C. C. A. 570, 72 Fed. 294 ;
National, etc., Ass'n v. Sparks, 28 C. C. A. 399, 403, 83 Fed. 225, 229;
Ogden City v. Weaver, 47 C. C. A. 485, 108 Fed. 564. That which
the record discloses is nothing more than a gênerai finding of ail the
issues in favor of défendant, but, whether the finding be gênerai or spé-
cial, it has the same effect as the verdict of a jury, and, in the circum-
stances in which it was given, is conclusive, and prevents any inquiry
in this court as to whether it is sustained by the évidence. Norris v.
Jackson, 9 Wall. 125, 19 L. Ed. 608; Martinton v. Fairbanks, 112 U.
S. 670, 5 Sup. Ct. 321, 28 L. Ed. 862; Lehnen v. Dickson, 148 U. S.
71, 13 Sup. Ct. 481, 37 L. Ed. 373; Dooley v. Pease, 180 U. S. 126,
131, 21 Sup. Ct. 329, 45 L. Ed. 457; Wilson v. Merchants' Loan &
Trust Co., 183 U. S. 121, 127, 22 Sup. Ct. 55, 46 L. Ed. 113; Mercan-
tile Trust Co. v. Wood, 8 C. C. A. 658, 60 Fed. 346; Walker v. Miller,
8 C. C. A. 331, 59 Fed. 869; Hughes County v. Livingston, 43 C. C.
A. 541. 555, 104 Fed. 306; Barnard v. Randle, 49 C. C. A. 177, iio
Fed. 906.
The remaining assignment of error challenges certain rulings upon
the admission of évidence excepted to by plaintiff, which raise the
question whether, if the agreement was in paroi, plaintiff could recover
back the earnest money, when défendant was not in default, and
plaintiff had refused to acceptt a lease conforming to the agreement.
The circuit court answered the question in the négative. The agree-
ment related to real property in the state of Minnesota, and was gov-
erned by the law of that state. This is conceded, but counsel differ
in their interprétation of the state statute (section 4215, Gen. St. 1894),
which provides :
"Every eontract for the leasing for a longer period than one j'ear, or for
the sale, of any lands, or any Interest In lands, shall be void unless the con-
TOEK V. WASHBtTBN. 567
tract, or some note or mémorandum thereof, expressing the considération, la
in writing, and subscribed by the party by whom the lease or sale Is to be
made, or by his lawful agent thereunto authorized, In writing; and no such
contraet, when made by such agent, shall be entltled to record unless the
authority of such agent be also recorded."
Counsel hâve made an exhaustive examination of similar statutes
in the several states, and of the décisions interpreting them. This
research discloses that states having a statute identical with that of
Minnesota differ in its interprétation; the différence being that, by
the interprétation prevaihng in Wisconsin and some other states, an
agreement such as is hère under considération "is absolutely void
and a nullity," while, by the interprétation prevaihng in New York
and some other states, the law will lend no aid in enforcing such an
agreement, but it is not contrary to law, and the parties are at liberty
to act under it. By the first interprétation, the vendee or lessee may,
if the agreement be not performed, recover back the money paid,
without référence to who is responsible for the default, and as though
no agreement had been made. By the second interprétation, no re-
covery can be had if the vendor or lessor is not in default, but is able
and willing to perform the agreement. We are only concerned with
the interprétation placed upon the Minnesota statute by the court of
last resort in that state. It is a cardinal rule in the courts of the
United States that the judicial department of each state is the appro-
priate organ to construe its législative enactments, and that in cases
depending on the laws of a particular state, and "not controlled by
the Constitution, laws, or treaties of the United States, or by the
principles of the commercial or mercantile law or of gênerai juris-
prudence, of national or universal application," the construction which
the highest judicial tribunal of the state has given to the laws of the
state is controÛing. Elmendorf v. Taylor, lo Wheat. 152, 6 L. Ed.
289 ; Christy v. Pridgeon, 4 Wall. 196, 18 L. Ed. 322 ; Louisiana v.
Pilsbury, 105 U. S. 278, 294, 26 L. Ed. 1090; Bauserman v. Blunt,
147 U. S. 647, 657, 13 Sup. Ct. 466, 37 L. Ed. 316; Hartford Ins.
Co. V. Chicago, etc., Ry. Co., 175 U. S. 91, 100, 20 Sup. Ct. 33, 44 L.
Ed. 84; Chattanooga, etc., Ass'n v. Denson, 189 U. S. 408, 23 Sup.
Ct. 630, 47 L. Ed. 870; First National Bank v. Glass, 25 C. C. A. 151,
79 Fed. 706. The interprétation of a state statute of frauds by the
highest court of the state establishes a rule of property, and is within
the rule stated. Allen v. Massey, 17 Wall. 351, 21 L. Ed. 542; L,loyd
V. Fulton, 91 U. S. 479, 485, 23 L. Ed. 363; Robinson v. Belt, 187
U. S. 41, 23 Sup. Ct. 16, 47 É. Ed. 65. The facts of the présent case
make Louisiana v. Pilsbury, supra, directiy in point. It was there said
by Mr. Justice Field:
"The construction, so far as contraet obligations Incurred under It are
concerned, constltutes a part of the law as much as If embodled In It So
far does this doctrine extend, that when a statute of two states, expressed
in the same terms, is construed dlfferently by the highest courts, they are
treated by us as différent laws, each embodylng the particular construction
of Its own state, and enforced in accordance with it in ail cases arising un-
der it."
Repeated décisions of the highest judicial tribunal of the state of
Minnesota, rendered before this agreement was made, had uniformly
508 129 FEDERAL REPORTEE.
placed upon the statute of frauds of that state an interprétation similar
to that prevailing in New York, and unlike that prevailing in Wiscon-
sin j and, as part of the interprétation adopted in Minnesota, it had
become established law in that state that when a vendor, under an
agreement for the sale of lands which is within the statute of frauds,
because not in writing, is nevertheless willing and offers to perfori-n
on his part, but the vendee refuses to perform, and répudiâtes the
agreement, the latter is liot entitled to recover an installment of pur-
chase money previously paid. Sennett v. Shehan, 27 Minn. 328, 7
N. W. 266; La Du-King Manufacturing Co. v. La Du, 36 Minn, 473,
31 N. W. 938; McKinney v, Harvie, 38 Minn. 18, 35 N. W. 668, 8
Am. St. Rep. 640; McClure v. Bradford, 39 Minn. 118, 38 N. W. 753;
Keystone Iron Co, v. Logan, 55 Minn. 537, 57 N. W. 156. In Sennett
V. Shehan, which was an action much like this, it was said:
"The agreement whieh the parties entered into in ttiis case was not an
illégal one, and tUerefore Incapable of being performed, if they were willing
to abide by its terms. The plalntlff voluntarily paid to défendant the sum
which he now seeks to recover, as a partial payment upon this contract ;
and, so long as the défendant Is not In default, but is willing and ready to
perform on hIs part, he Is not at liberty to rescind the agreement and recall
his money because the statute déclares the contract to be vold as not being
in writing."
It is conceded that no question of right under the Constitution,
laws, or treaties of the United States arises in this case, but it is insisted
by counsel for plaintiff that there is presented a question of commer-
cial or mercantile law or of gênerai jurisprudence, of national or uni-
versal application. After citing the cases of Township of Fine Grove
V. Talcott, 19 Wall. 666, 22 L. Ed. 227, and Burgess v. Seligman, 107
U. S. 20, 2 Sup. Ct. 10, 27 h. Ed. 359, counsel say :
"The real doctrine of the United States Suprême Court Is that, where the
décision of the state court Is right and according to the plain letter ot the
law, • » • the fédéral courts must foUow the same, but where It is
contrary to the plain letter of the statute, • * • or contrary to what
the Suprême Court of the United States deems to be the true interprétation
of the statute, • • * the fédéral courts should not follow the state dé-
cision."
We think the question presented is one of purely local law, and is
not controlled by the principles of the commercial or mercantile law
or of gênerai jurisprudence, of national or universal application. The
question goes to the légal effect of the agreement, rather than to
the meaning of the words or terms in which the parties expressed
their mutual undertakings. The agreement related to property the
permanent situs of which was in the state of Minnesota. The statute
and the décisions of the state court interpreting it hâve no bearing
upon agreements concerning property located elsewhere, and the stat-
ute was adopted and the décisions interpreting it were made before the
agreement was entered into. We also think the contention of counsel
respecting the effect of the décisions of the Suprême Court of the
United States is refuted by the décisions cited to support it. The case
of Township of Fine Grove v. Talcott involved the validity, in the
hands of a bona fide purchaser, of township bonds issued in negotiable
form, and in conformity with a state statute subsequently held invalid
rOBK V. WASHBURN. 569
by the courts of the state. Speaking through Mr. Justice Swayne, the
court said:
"The question before us belongs to the domain of gênerai jurisprudence.
In this class of cases thls court Is not bound by the judgment of the courts
of the States where the cases arise. It must hear and déterminé for Itself.
Hère commercial securities are involved. When the bonds were issued, there
had been no authoritative Intimation from any quarter that such statutes
were invalid. The Législature affirmed their validity in every act by an
implication équivalent, In effect, to an express déclaration. And during the
period covered by their enactment, nelther of the other departments of the
government of the state llfted its volce agalnst them. The acquiescence was
universal. The gênerai understanding of the légal profession throughout
the country is belleved to bave been that they were valld. The national
Constitution forbids the states to pass laws impairing the obligation of con-
tracts. In cases properly brought before us, that end can be accomplished
unwarrantably no more by judicial décisions than by législation." 19 Wall.
677, 22 L. Ed. 227.
In Burgess v. Seligman the question presented for décision was the
liabiHty as a stockholder of one who received from the corporation
itself, as collatéral security for the payment of debts of the corpora-
tion, certificates of stock in a corporation organized under the statutes
of Missouri. When the transactions occurred out of which the lia-
bility, if any, arose, the state statute under which liability was asserted
had not been construed by the state tribunals, but thereafter the Su-
prême Court of Missouri rendered two décisions placing an interpré-
tation upon the statute which was urged upon the Suprême Court of
the United States as controlling. In thèse circumstances, it was said
by Mr. Justice Bradley, speaking for the court :
"We do not consider ourselves bound to follow the décision of the state
court in this case. * * * Since the ordinary administration of the law
is carried on by the state courts, It necessarily happons that by the course
of their décisions certain rules are established which become rules of prop-
erty and action in the state, and hâve ail the effect of law, and which it
would be wrong to disturb. This is especially true with regard to the law
of real estate, and the construction of state constitutions and statutes. Such
established rules are ahvays regarded by the fédéral courts, no less than by
the state courts themselves, as authoritative déclarations of what the law
is. But where the law bas not been thus settled, It is the right and duty
of the fédéral courts to exercise their own judgment, as they also always do
in référence to the doctrines of commercial law and gênerai jurisprudence.
So when contracts and transactions bave been entered into, and rights hâve
accrued thereon, under a particular state of the décisions, or when there ha.s
been no décision, of the state tribunals, the fédéral courts properly claim
the right to adopt their own interprétation of the law applicable to the case,
although a différent interprétation may be adopted by the state courts after
such rights hâve accrued. But even in such cases, for the sake of harmony
and to avold confusion, the fédéral courts will lean towards an agreement
of views with the state courts if the question seems to them balanced witb
doubt." 107 U. S. 33, 2 Sup. Ct. 21, 27 L. Ed. 359.
It has long been settled, and in the very nature of things it must be
so, that the conclusive effect, in the fédéral courts, of the interpréta-
tion of a state statute by the courts of the state, does not dépend
upon the view which the fédéral courts may take of the soundness of
tliat interprétation. Christv v. Pridgeon, 4 Wall. 196, 203, 18 L. Ed.
322; Supervisors v. United States, 18 Wall. 71, 82, 21 L. Ed. 771;
570 129 FEDERAL REPOKTEK.
Louisiana v. Pilsbury, 105 U. S. 378, 294, 36 L. Ed. 1090; Fall-
brook Irrigation District v. Bradley, 164 U. S. 112, 155, 17 Sup. Ct.
56, 41 L. Ed. 369; Adams Express' Co. v. Ohio, 165 U. S. 194. 219,
17 Sup. Ct. 305, 41 L. Ed. 683; Williams v. Eggleston, 170 U. S. 304,
311, 18 Sup. Ct. 617, 42 L. Ed. 1047; Wilkes County v. Coler, 180
U. S. 506^ 524, 21 Sup. Ct. 458, 45 L. Ed. 642; Louisville, etc., Co. v.
Kentucky, 183 U. S. 503, 508, 512, 22 Sup. Ct. 95, 46 L. Ed. 298.
The Circuit Court took the correct view of the légal effect of the
agreement under the law of the state of Minnesota, by which the
rights of the parties must be determined, and properly admitted évi-
dence of defendant's ability and willingness to perform the agreement,
and of plaintirï's refusai to do so.
The judgment is affîrmed.
LEWIS et ux. V. CLARK.
(Circuit Court of Appeals, Nlnth Circuit March 1, 1904)
No. 838.
1. BtTlXDIHG AND LOAN ASSOCIATIONS— INSOLVENCT—FOBECLOSUEE SUIT BT
FOKEIGN RECEIVEE,
A building and loan association of Minnesota deposited bonds and mort-
gages of its members with tlie state of Wisconsin, in compliance with the
law of that state, in order to entitle it to do business therein, and to secure
the performance of contracts made with citlzens of the state. The asso-
ciation having become insolvent, a controversy arose In the courts of Wis-
consin between a spécial reeeiver there appointed and the gênerai receiver
in Minnesota as to the rlght to such securitles, pending which, however,
It was stipulated that they should be collected by the Wisconsin receiver,
and they were formally asslgned to hlm by the gênerai receiver. HeM,
that a fédéral court in Idaho, acting in a splrit of comity, properly per-
mitted such receiver to maintain a suit therein to foreclose a mortgage
given by a citizen of the state on property therein whleh constituted one
of the securitles so deposited, although he was not entitled to maintain
such suit as a matter of rlght; it not being contrary to any law or public
policy of the state, nor in any manner prejudicial to any rlght of the de-
fendants.
2. SaME— CONTEACTS WITH BOBBOWING MEMBEES— EFFECT OF INSOLVENCY.
The insolvency of a building and loan association works a rescission
of its contracts with its members, and sums borrowed by them become
Immediately due and payable, regardless of the terms of payment flxed
by the contract
S. Same— UsuET— Law Goveening.
A bond and mortgage given by a member to a building and loan asso-
ciation organized under the laws of Miimesota, payable at its office in
that state, are governed by its laws with respect to usury, although fiie
mortgaged property may be situated in another state, where the borrower
résides.
If 1. Suits by and against receivers of fédéral courts, see note to J. I. Case
Plow Works V. Flnks, 26 G. C. A. 49.
IF 3. What law governs usury by building and loan associations, see note
to Kirllcks v. Interstate Building & Loan Ass'n, 51 C. C. A. 319.
See Usury, vol. 47, Cent. Dig. § 11.
LEWIS V. CLARK. 571
Appeal from the Circuit Court of the United States for the Central
Division of the District of Idaho.
This is a suit brought by M. C. Clark, as receiver of the American Savings
& Loan Association, formerly the American Building & Loan Association, to
foreelose a bond and mortgage glven by Isaac I. Lewis and his wife on prop-
erty in the state of Idaho to the sald American Building & Loan Association.
This association is a corporation organized under the laws of the state of
Minnesota. Lewis and his wife are citizens of the state of Idaho. In May,
1889, Lewis made application to the association for a loan of |5,000, and in
September of that year received such loan or advancement, and the bond and
mortgage upon which this suit Is based were then executed. The bond was
secured by a pledge of ail stock owned by Lewis, which was to be the prop-
erty of the association on maturity of sald stock, which Lewis agreed to ma-
ture by the payment of certain moneys each month, part being called "inter-
est," and part "dues on the shares of stock," one-half of which was stock
called "premium for the privilège of obtaining the loan or advancement."
Lewis made thèse payments monthly up to January, 1896, when he was notl-
fied that a receiver of the association had been appointed, and that no further
payments would be accepted. The association was declared to be Insolvent
in proceedlngs brought in the state court of Minnesota, and William D. Haie
was appointed receiver to take charge of the property and efCects of the cor-
poration, on January 14, 1896, and on June 18, 1896, he was made permanent
receiver of the association. It appears from the record that said association,
in order to engage In business in the state of Wisconsin, and In aceordance
with the laws of said state, deposîted wlth the State Treasurer of Wisconsin,
in trust for the benefit and securlty of ail its members In the state of Wis-
consin, securities of the value of $100,000. Among the securlties so deposîted
was the bond and mortgage of Lewis and wife, which is sought to be fore-
closed in this suit. Thereafter one L. V. Lewis, a member of the association,
and a citizen of the state of Wisconsin, brought an action in the state court
of Dane county, Wls., to bave the bonds and mortgage in the hands of the
State Treasurer of Wisconsin placed in the hands of a receiver, for the pur-
pose of collecting them for the beneflt of the Wisconsin members. In this ac-
tion, Receiver Haie, who had been appointed by the Minnesota court, inter-
vened, and claimed that the securlties in the hands of the State Treasurer
shoiild be delivered to him, as the receiver of the association. In the course
of the proceedlngs in that action, M. O. Clark, the complainant in this suit,:
was appointed receiver of the association for the state of Wisconsin. The
contest between the respective receivers with référence to the securities in the
hands of the Treasurer of Wisconsin continued until the suit was dismissed,
for want of jurisdietion, by the Suprême Court of the United States, in May,
1901. Haie v. Lewis, 181 U. S. 473, 21 Sup. Ct. 677, 45 L. Ed. 959. Pending
the controversy therein, the receivers, Haie and Clark, entered into an agree-
nient, by leave of the Wisconsin court, by which the bond and mortgage in
question in this suit were to be assigned and transferred by Haie to Clark.
For the purpose of carrylng out this agreement, a formai asslgnment was made
by Haie to Clark. Thereafter Clark, the Wisconsin receiver, commencéd this
suit in the circuit court of Idaho, alleglng, among other things, that at the
time of his appointment as receiver "the American Savings & Loan Associa-
tion had no credltors and owed no debts in the state of Idaho." The pro-
ceedlngs in this suit flnally resulted in a decree of foreclosure of said bond .
and mortgage, from which decree Lewis and wife hâve appealed to this court.
Seldon B. Kingsbury, for appellants.
A. A. Frasier and W. E. Borah, for appellee.
Before GILBERT and ROSS, Circuit Judges, and HAWLEY,
District Judge.
HAWLEY, District Judge, after making the foregoing statement
of facts, delivered tiie opinion of tlie court.
572 129 FEDERAL REPORTER.
It is contended by appellants that the complainant, Clark, as receiver
of the Wisconsin court, has no standing in the court in Idaho, and
should net hâve been permitted to maintain this suit, because he is a
foreign receiver, and does not represent the association, its officers,
membership, or interests; that the only interests which he represents
are antagonistic to the whole membership of the association, opposed
to the citizens of Idaho, and against the public policy of that state.
It is true that Clark is not the gênerai receiver of the association.
He was appointed by the court in Wisconsin for the purpose of re-
ceiving and foreclosing the securities which had been deposited with
the State Treasurer as required by the statute of Wisconsin, so as to
enable it to transact business in that state. His appointment may
hâve been made for the better protection of the members of the asso-
ciation in said state, but it does not necessarily follow that his interests
are entirely antagonistic to the association, its members, shareholders,
or creditors. The stockholders authorized the deposit of the secu-
rities of the corporation in Wisconsin, and the members of the asso-
ciation are not in a position to question the validity of such deposit,
or its binding force and effect, as against them.
We are not called upon in this suit to discuss the relative rights of
the receivers. Haie and Clark, in order to détermine the rights of the
shareholders or creditors of the association under the law of Minne-
sota, who insist that ail the securities held by the association should be
deposited in Minnesota for the benefit of ail the members of the asso-
ciation, nor to discuss the question as to the validity of the statute
of Wisconsin requiring the deposit of $100,000 with the State Treas-
urer as a prerequisite of the right of the said association to transact
business in that state.
In Lewis v. American Savings & Loan Association et al., 98 Wis.
203, 73 N. W. 793, 39 L. R. A. 559, the facts relative to the insolvency
of the association, the laws of Minnesota and of Wisconsin, the reso-
lution of the board of directors of the association passed May i, 1889,
authorizing the deposit of securities to the extent of $100,000 in com-
pliance with the Wisconsin statute, as well as the appointments, of
Haie and Clark, are set forth at length, and the validity of such acts
and the légal effect thereof are fully discussed. It was there held
that the securities deposited in Wisconsin would be presumed to hâve
been deposited in a bona fide attempt on the part of the association to
comply with the laws of that state; that the failure of the association
to comply with the statutory provisions of the state of its domicile
in making such deposit did not render the transfer void, compliance
with such provisions having been intended as a matter of local admin-
istration merely, and not as a condition précèdent to the right to
make it; that such deposit was within the lawful power of the asso-
ciation, as represented by its directors, and the action of the directors
in making it was binding upon the association and ail its members
to the extent and according to the terms of the statute under which
it was made; that the receiver appointed in Wisconsin was entitled
to retain and sell or collect the securities, and apply the proceeds to
the rédemption in fuU of ail shares held by the résidents of Wisconsin,
and to the performance and discharge of ail the association's con-
LEWIS V. CLAEK. l><u
tracts and obligations to members and persons residing therein, the
residue, if any, to be turned over to the foreign receiver (Haie) ; that
the association and its stockholders had waived the right to question
the validity of the trust or the constitutionality of the Wisconsin
statute on the ground that they impaired the obhgation of contracts,
even though in case of insolvency a préférence was thereby secured to
résident shareholders. See, also, Clark v. Oison (N. D.) 83 N. W. 519.
The shareholders in associations of this character are not, in the
ordinary sensé, creditors, and, if deemed creditors in any sensé, they
are necessarily subject to ail equities existing between themselves.
There were no creditors residing in the state of Idaho whose rights
could in any manner be afifected, except those who were shareholders
in the association. The court did not err in recognizing and permit-
ting the complainant, Clark, as receiver of the Wisconsin court, to
bring and maintain this suit in Idaho. Lewis and his wife were not
thereby deprived of any of their rights. They could not hâve made
any other défense or availed themselves of any other privilège if the
suit for foreclosure had been instituted by Haie, the gênerai receiver
of the Minnesota court, or by an independent or ancillary receiver
appointed by the court in Idaho. The maintaining of such a suit is
not against any public policy or law of the state. It is undoubtedly
true that a receiver appointed by a court has no extraterritorial juris-
diction. A receiver in one state cannot maintain suit in the courts of
other States as a matter of absolute right, but the courts of other states
may, in the exercise of their sound discrétion, as a matter of fact or
comity, permit such a receiver to bring and maintain such suits. This
doctrine of comity which usually prompts the courts to give this
permission is almost universally applied, except in the single excep-
tion where some well-established right of the citizen of a state inter-
venes. Enforcement of this rule of comity does not impeach the
sovereignty of the respective states, but produces a friendly inter-
course between them ; and it should only be denied when contrary to
the policy of the state, or prejudicial to its real interests or the inter-
ests of its citizens. Cole v. Cunningham, 133 U. S. 107, 10 Sup. Ct.
269, 33 L. Ed. 538 ; Reynolds v. Adden, 136 U. S. 353, 10 Sup. Ct.
843, 34 L. Ed. 360. The suits of this character will also be sustained
as an équitable proceeding to facilitate the settlement of the affairs
of the insolvent association. The agrecments and assignments be-
tween the receivers were evidently in furtherance of such a purpose.
In Haie v. Hardon, 95 Fed. 747, 750, 37 C. C. A. 240, the questions
presented to the Circuit Court of Appeals were as to how far the
défendant, a nonresident stockholder, in that case was bound by the
action of the Minnesota court; and, second, whether the plaintifï in
that suit, in his capacity as receiver for the creditors, appointed in
a proceeding in Minnesota for the purpose of enforcing the liability
of stockholders, might, in aid of that proceeding, maintain his action
at law for such purpose in another and fédéral jurisdiction, upon
grounds of comity or otherwise. Upon thèse questions the court,
among other things, said :
"We may well observe at the outset that for many years the steady trend
of fédéral décision has been in the direction of upholding and enforciiig extra-
574 129 FEDERAL EEPOETER.
territorially thls class of Uabllitles accordlng to the falr Intendment of the
local law in cases properly wlthiu the provisions thereof, except where enforce-
ment would unreasonably Interfère wlth local vested ereditor interests in
States where enforcement is sought extraterritorially on grounds of comity, and
perhaps, in some cases, where such enforcement would offiend the gênerai public
policy of the state, while among the courts of the states there bas been a di-
minishing diversity of décisions upon questions growing out of such statutory
liabilities. It does not seem necessary to refer to the numerous décisions of
the Suprême Court, and those of the various Circuit Courts of Appeal and of
the Circuit Courts, so often cited, which sustain this gênerai proposition. We
shall therefore only refer, in this connection, to the more récent cases In the
United States courts, of Rhodes v. Bank, 13 C. C. A. G12, 66 Fed. 512 [34 L.
R. A. 742] ; Whitman v. Bank. 28 C. C. A. 404, 83 Fed. 288 ; Elkhart Nat.
Bank V. Northwestern Guaranty Loan Co., 30 C. 0. A. 632, 87 Fed. 252 ; Dex-
ter V. Edmands (C. C.) 89 Fed. 467 ; and to the more récent décisions of the
State courts, as showing the présent tendency of judicial décision in such
.iurisdictlons (Bagley v. Tyler, 43 Mo. App. 195 ; Guerney v. Moore, 131 Mo.
650, 32 S. W. 1132; Ferguson v. Sherman, 116 Cal. 169 [47 Pac. 1023, 37 L.
R. A. 622] ; Cushing v. Perot, 175 Pa. 66, 34 Atl. 447 [34 L. R. A. 737, 52
Am. St. Rep. 835] ; Bank v. Ellis, 172 Mass. 39, 51 N. E. 207 [42 L. R. A. 396,
70 Am. St. Rep. 232], and the admirable opinion of Chief Justice Field in that
case) ; and to the exceedingly well-reasoned cases of Bank v. Lawrence (de-
clded In Michlgan, July, 18981 76 N. W. 105, and Bell v. Farwell (declded by
the Illinois Suprême Court in December, 1898) 52 N. E, 346 [42 L. R. A. 804,
(>8 Am. St. Rep. 194]. It would not be useful to undertake a review of the
décisions of the various states, and it is quite needless to say that we must
follow the décisions of the Suprême Court, so far as they cover the questions
In this case, and, as to particular questions, if any, not covered by the Su-
prême Court décisions, that we should, in a case of thls character, be gov-
erned by the judicial policy of the fédéral law, rather than that of any par-
ticular State."
In addition to the authorities there cited, see, aiso, Relfe v. Rundel,
103 U. S. 222, 26 L. Ed. 337; Parsons v. Charter Oak Life Ins. Co.
(C. C.) 31 Fed. 305; Rogers v. Riley (C. C.) 80 Fed. 759; National
Trust Co. V. Miller, 33 N. J. Eq. 155, 158; Gluck & Becker on Re-
ceivers (2d Ed.) § 5, p. 34 et seq. ; High on Receivers, § 241.
The insolvency of a public building and loan association consists of
its inability to perform the purposes for which it was created. Its
insolvency works a rescission of the contracts between the association
and its members. The money advanced to the borrowing member
upon such insolvency immediately becomes due and payable, regard-
less of the terms of payment fixed in the written contract. Curtis v.
Granité State Provident Association (Conn.) 36 Atl. 1023, 1025, 61
Am. St. Rep. 17; Knutson v. Northwestern Loan & Building Asso-
ciation (Minn.) 69 N. W. 889, 64 Am. St. Rep. 410.
The insolvent association in this case was organized under the
laws of Minnesota. The bond and mortgage given by Lewis to the
association were made payable to it at its home office, in the city of
Minneapolis, Minn. The contract as thus made must be treated as
a Minnesota contract, and the rights of the parties determined in
accordance with the laws of that state, in so far as the question of
usury in the payment of interest is considered, notwithstanding the
security for its performance was the taking of a mortgage upon real
estate in Idaho, where the law upon this question was différent. The
validity of such contracts has been sustained by this court. Dygert
v. Ver'mont L. & T. Co., 94 Fed. 913, 37 C. C. A. 389; Pacific States
HIBBERD V, BAILET. iilil
Savings, Loan & Building Association v. Green (C. C. A.) 123 Fed.
43, 44, and authorities there cited. See, also, United States Savings
& Ivoan Co. V. Harris (C. C.) 113 Fed. 27.
The decree rendered by the court was certainly as favorable to ap-
pellants as the law would warrant. We find no error in the record
prejudicial to appellants which would justify a reversai of this case.
At the time the case was submitted, appellants filed a pétition for a
bill of review. This pétition is denied, and the decree of the Circuit
Court is affirmed.
HIBBERD V. BAIIiET.
(Circuit Court of Appeals, Thlrd Circuit February 22, 1904.)
No. 41.
1. Administratoe— EiGHT TO Recoveb on Bond of Peedecbssoe.
Under the statute of Pennsylvanla, an admlnistrator d. b. n. Is autbor-
Ized to demand and reeover from bis predecessor in the administration,
or tbe suretles on bis bond, ail money due and belonglng to tbe estate of
the décèdent
2. BANKEtiPTCY— Peovable Claims— Liability as Sueett,
Wbere an orphans' court in Pennsylvanla entered a decree nlsl adjudl-
cating tbe account of an admlnistrator and directlng a distribution, wblcb
decree was afterward "confirmed absolute," but later suspended as to the
distribution, and the admlnistrator directed to hold the "balance shown
by said account" until further order of the court, such decree flxed the
amount of the adminlstrator's liability to the estate, and also that of the
surety on bis bond ; and an admlnistrator d. b. n. subsequently appointed,
to whom the first admlnistrator bas been ordered by the court to pay
over such amount, may prove the same in bankruptcy against the estate
of the surety as a fixed liability evidenced by such decree, absolutely
owing to the estate, within tbe meanlng of Bankr. Act July 1, 1898, c. 541,
§ 63a, 30 Stat 562 [U. S. Comp. St 1901, p. 3447].
Appeal from the District Court of the United States for the East-
ern District of Pennsylvanla.
For opinion below, see 123 Fed. 185,
J. B. Rettew, for appellant.
Rudolph M. Shick, for appellee.
Before ACHESON, DALLAS, and GRAY, Circuit Judges,
GRAY, Circuit Judge. In March, 1895, John Wiseman, one of the
bankrupts in the above-entitled case, together with another, was sure-
ty upon the bond of George L. Hubbard, admlnistrator of George
K. Hubbard, deceased, in the sum of $6,000. The condition of the
bond, inter alia, was that George L. Hubbard, admlnistrator of the
estate of George K. Hubbard, should well and truly administer the
said estate, should make and file an inventory and appraisement, ac-
cording to law, should make or cause to be made, a just and true ac-
count of the said administration within one year from the date of
the bond, or when thereunto legally required, and "ail the rest and
H 1. See Executors and Admlnistrators, vol. 22, Cent Dlg. §§ 488, 2521,
576 129 FEDEKAL REi'OUTEK.
residue of the said goods, chattels and crédits which shall be found
remaining upon such administrator's account (the same being first
examined and allowed by the orphans' court of the said county of
Philadelphia) shall deliver and pay unto such person or persons re-
spectively as the said orphans' court, by their decree and sentence
pursuant to law, shall limit and appoint." On the 24th of May, 1896,
an inventory and appraisement was filed in said estate, appraising the
Personal property of said décèdent at the sum of $47,062.02, and on
the 22d day of June, 1896, an account was filed by the administrator,
showing a balance for distribution of $44,130.59. This account waâ
audited by the orphans' court of Philadelphia county, Penrose, J.
Upon the 28th of June, 1896, an adjudication nisi was filed, wherein it
appeared that the balance for distribution, in the hands of George
Iv. Hubbard, administrator, was $44,115.59, of which amount $33,-
797.02 represented the interest of the late George K. Hubbard in the
£rm of George K. Hubbard & Co., the balance being a cash asset.
This balance, with interest, if any, was awarded in equal shares to
the chiidren of the décèdent. At the expiration of the period at which
adjudications nisi under the rules of the orphans' court were made
absolute, if not excepted to, to wit, July 18, 1896, the decree was
marked as of that date, "Confirmed absolute." No exceptions were
ever filed to the account of the said administrator. On the gth day
of July, A. D. 1896, one John Quincy Adams filed in the court of
common pleas of Philadelphia county, a bill in equity against George
L/. Hubbard, administrator of the estate of George K. Hubbard, de-
ceased, et al., praying for a partnership accounting, and alleging, inter
alia, that the estate of George K. Hubbard was indebted to him in a
large sum. On the i8th day of July, A. D. 1896, upon application of
the counsel of the said Adams to the orphans' court, Penrose, J., in
chambers, indorsed upon the back of the adjudication the words
"Confirmation of account is suspended until further ordered." This,
it will be observed, was upon the same day that, in accordance with
the rules of the court, "confirmation absolute" of the said decree
of adjudication nisi had been entered upon its records. Attached to
Ihe said adjudication, is the following order of the orphans' court,
made on the I2th day of October, 1896, signed by Penrose, J. :
"Estate of George K. Hubbard, deceased.
"Now, October 12, 1896, confirmation of tlie adjudication of the account of
Oeorge L. Hubbard, administrator, filed July 1, 1896, having, upon pétition
of J. Quincy Adams, clalming as a creditor, been suspended until further or-
der and the matter having come for further hearing before the auditing judge
on the day first above mentioned ; and it appearing that claim of said John
Quincy Adams grows out of and involves a settlement of a partnership ac-
count existing at one time between the claimant and the décèdent, which set-
tlement is not within the jurisdietion of this court. It is therefore ordered
that the distribution ordered by the said adjudication be suspended and that
the balance shown by said account be held by the accountant until the settle-
ment of the said partnership account, and the ascertainment of the amount
if any being due the said John Quincy Adams, or until further order of the
court. C. B. Penrose, Judge."
On the 9th day of April, 1902, John Wiseman, who was surety as
aforcsaid on the administration bond of George L. Hubbard, was ad-
HIBBEBD V. BAILET. 577
judicated a bankrupt. On the i8th of September, 1902, George L.
Hubbard was removed from bis office of administrator, and ordered
to pay over to his successor, thereafter to be appointed by the regis-
ter of wills, ail moneys, chattels and securities belonging to the
estate of the said George K. Hubbard, deceased. On the 23d day of
September, 1902, Dilworth P. Hibberd was appointed by the said reg-
ister of wills administrator d. b. n. of the estate of George K. Hub-
bard, deceased, and was duly qualified to act, and thereupon made
demand upon the said George L. Hubbard to pay over ail the mon-
eys, chattels and securities in his hands, that had been charged to
him as administrator of said estate by the decree of the orphans'
court. Said Hubbard was then unable to comply with the said or-
der and decree, having been adjudicated a bankrupt, and wholly
failed to turn over the -moneys of the estate that had been loaned
to his firm. Dilworth P. Hibberd, administrator d. b. n., there-
upon presented and offered to prove a claim against the said John
Wiseman, in bankruptcy, upon his liability as surety in the said ad-
ministration bond, in the sum of $6,000, the full amount of the pen-
alty thereof. Objection was made to this claim before the référée,
by the trustée in bankruptcy, upon two grounds :
"(1) That the administrator d. b. n. had no right to présent a claim on the
bond of his predecessor, George L. Hubbard. (2) That the daim was net
provable In bankruptcy, because of its being a contingent liability."
The référée at first disallowed the claim, but, upon exceptions to
his report, afterwards decided that the claim was provable in bank-
ruptcy. Upon an appeal taken to the District Court, that court re-
versed the décision of the référée, and held that the claim was not
provable. 123 Fed. 185. From this decree of the District Court, the
présent appeal has been taken.
The question raised upon the first objection, viz. : Can an adminis-
trator d. b. n., in the state of Pennsylvania, maintain an action in the
name of the commonwealth, to his use, against a surety on a bond
of a previous administrator, is answered by the act of Assembly of
that state, of February 24, 1834, § 31 (P. L,. 78) by which it is provided
that:
"Administrators d. b. n., with or wlthout a wlU annexed, shall hâve power to
demand and recover from their predecessors in the administration, or their
légal représentatives, ail moneys, goods and assets remaining In their hands,
due and belonging to the estate of the décèdent"
We do not understand that the efifect of this statute, in determining
the question above stated, was contested by the appellee in his ar-
gument before this court. It is well, however, to read, in connection
with the language of the statute, the following portion of the condi-
tion of the bond, executed by the bankrupt, viz. :
"That the administrator, George L. Hubbard, should make, or cause to be
made, a just and true account of his said administration * * * and ail
the rest and residue of the said goods and chattels and crédita which shall be
found remaining upon the said admlnlstrator's account, the same belng first
examined and allowed by the orphans' court of the county having jurlsdic-
tlon, shall dellver and pay untô such person or persons as the said orphans'
court, by their decree or sentence, pursuant to law, shall llmit and appoint"
129 F.— 37
578 129 FEDEEAL EBPOKTBE.
The sutety is undoubtedly liable upon this condition of the bond,
for the performance of ail such duties as are or may be imposed by
law. The right of the administrator d. b. n. to demand, and the duty
of the removed administrator to pay over to him, ail of the moneys,
goods and assets remaining in his hands, due and belonging to the
estate of the décèdent, is clearly imposed by the law of Pennsylvania.
The question presented for our détermination is, has the liability of
the principal in the bond been so legally liquidated and ascertained, as
to the amount and the person to whom due, as to hâve fixed the lia-
bility of the surety therein at the time of the filing of the pétition in
banif ruptcy ?
Thèse bonds, conditioned for the fidelity of an oiïicer, such as an
administrator or executor, appointed by law to discharge plain and
well-defined duties, being taken in the name-of the state, are held in
trust by their legally designated custodian for the protection of those,
who thereafter may be injured by the default of such ofificer in any of
the duties covered by the condition of his bond. Such persons are
ordinarily creditors or legatees, and prior to the act of 1834, in Penn-
sylvania, and above recited, an administrator d. b. n. could not in
that commonwealth maintain an action to his use against either
principal or surety on the bond of a previous administrator. A cred-
itor or legatee, who desired to recover from a surety the legacy or
debt uniawfully withheld from him by an executor or administrator,
must first hâve brought suit against such administrator or executor as
the principal on the bond, and hâve thus ascertained a definite amount
due from such defaulting officiai to himself. Under the law and prac-
tice as obtaining in Pennsylvania, the orphans' court is vested with
jurisdiction, not only to audit the accounts of executors and adminis-
trators, and charge them with the unadministered balance remaining
in their hands and due the estate of their decedents, but also, upon
proper proceedings had before them, to make distributive decrees, as-
certaining the amount due and the persons to whom payable. A de-
cree thus fixing an amount due and the person to whom payable,
fixes the liability of the administrator or executor as principal in his
bond. If such principal be insolvent, or his inability to pay be other-
wise demonstrated, or, without regard to the ascertainment of thèse
facts, nothing further is required to make certain and definite the lia-
bility of the surety in such bond. In the case of a creditor or legatee,
there must be évidence produced before the orphans' court, show-
ing the amount, as well as the ground, and existence of his claim as
a lawful one, upon which a definite order and decree of the court
can be made.
Assuming, as we do, that sincç the Pennsylvania act of 1834, above
alluded to, the claim of an administrator d. b. n. against his predeces-
sor in office is protected by the administration bond of such prede-
cessor, the conclusion seems necessarily to foUow, that the adju-
dication of the orphans' court finding a definite amount remaining in
said predecessor's hands after an audit, and charging him with the
same for distribution, fixes his liability upon his bond, and conse-
quently the liability of his surety. The liability is to the estate of the
décèdent, and it does not intermit or become suspended by reason of
HIBBEED V. BAILET. 579
the fact that the situation does not yet admit of the appointment of
an administrât or d. b. n. The liability is for the whole amount found
due to the decedent's estate, and no further adjudication is necessary,
as in the ease of a legatee, who must legally establish his daim out of
the fund so remaining in the hands of the administrator.
Corning then, to the case before us, we are to consider how far, un-
der the sixty-third section of the bankrupt act, par. "A," Act July i,
1898, c. 541, 30 Stat. 562 [U. S. Comp. St. 1901, p. 3447], the claim of
the estate of George K. Hubbard, deceased, was provable by his ad-
ministrator d. b. n. against-the estate of the bankrupt, surety on the
administration bond. Paragraph "a," of the section referred to,
describes as a provable debt, inter alia :
"A fixed liability as eyidenced by a judgment or an Instrument In writing
absolutely owing at the time of the filing of the pétition against him, whether
then payable or not, with any Interest thereon which would hâve been recov-
erable at that date, or with a rebate of interest upon sueh as were not then
payable and did not bear Interest."
The law of Pennsylvania fixes the Hability of an administrator to
pay over to his successors in office ail the moneys, goods and assets
remaining in his hands and due and belonging to the estate of the
décèdent. The amount "due and belonging to the estate of the dé-
cèdent" was in this case ascertained by the adjudication of the or-
phans' court, made and entered of record upon the 28th of June, 1896,
and finally confirmed by the order and decree of October 12, 1896,
recited above in full from the record. Though distribution by this
latter decree was suspended until further order, the amount "due
and belonging to the estate of the décèdent" was confirmed. No fur-
ther évidence was necessary to fix the amount due or ascertain to
whom the same was due, as in the case of a legatee claiming some
part of the whole sum. The whole amount found by the decree of
June 28th, and confirmed by that of October I2th, to be in the hands
of the administrator, was, by virtue of the said adjudication, "due and
belonging to the estate of the décèdent." It is not required in Penn-
sylvania, that the administrator should be pushed to insolvency. A
judgment at law or a decree of the orphans' court ascertaining the
amount of his personal responsibility, and to whom, is àll that is
necessary as a prerequisite to a proceeding against the surety. Com-
monwealth v. Stub, 11 Pa. 150, 51 Am. Dec. 515.
The liability, therefore, of the surety in the bond, was a fixed liabil-
ity, evidenced by the said adjudication at the time of the fîling of the
pétition against him, whether then payable, or not. It is true, that
the appointment of the administrator d. b. n. and the order of the or-
phans' court, of September 18, 1902, ordering and directing the said
George L. Hubbard "forthwith to pay and turn over to the admin-
istrator so appointed ail the moneys, chattels and securities belonging
to the said estate," were not made until after the filing of the péti-
tion in bankruptcy. But the liability of the former administrator to
the estate of the décèdent, was fixed by an adjudication long prior to
the bankruptcy proceedings. The act, as we hâve seen, expressly
makes it a matter of indifférence, whether said liability be payable at
the time of adjudication evidencing it, or not. The debt was due the
580 129 FEDERAL REPORTER.
estate. The administrator d. b. n. was merely the ministerial officer
to demand and collect it as such. The right to file such claim depend-
ed upon the existence of a fixed liability properly adjudicated, as due
and belonging to the estate prior to the fiHng of the pétition in
bankruptcy, not upon the date of the appointment of the administrator
d. b. n., who was authorized by law to enforce such liabihty.
We are of opinion that a liability has been established against the
principal to a greater amount than the liability of the bond ; that that
liabihty was fixed at the time of the filing of the pétition in bank-
ruptcy, and therefore became a fixed liability against the surety and
bankrupt, such as is required by the provisions of the sixty-third
section of the bankruptcy act.
We hâve carefully examined, but do not deem it necessary to dis-
cuss, the authorities cited on either side in the argument before us.
Most, if not ail, of those cited by the appellee, refer to the fixing of
the liability of the executor or administrator to the particular créditer,
legatee or distributee suing on the bond. In such case, of course,
there is the necessity of another adjudication than that establish-
ing the liability of the administrator to the estate of the décèdent.
Hère, we are concerned with the primary liability to the estate which,
as we hâve seen, is covered by the first adjudication.
The order of the court below, in setting aside the report of the
référée, must be reversed, and the said report, allowing the claim of
the said Dilworth P. Hibberd, administrator d. b. n. of the estate of
George K. Hubbard, deceased, against George W. Bailey, trustée of
the estate of John Wiseman, bankrupt, is confirmed.
B. H. GODSHALK CO. v. STERLING et al.
(Circuit Court of Appeals, Third Circuit May 10, 1904.)
No. 16.
1. Bankeuptct—Dischabge— Objections— Spécifications— Specificness.
A spécification of objection to bankrupts' discharge, alleging that the
bankrupts, with intent to conceal their flnancial condition, failed to keep
books of account or records from which such condition could be ascertain-
ed, was sufficiently spécifie withln Bankr. Act July 1, 1898, c. 541, § 14b,
80 Stat. 550 [U. S. Comp. St. 1901, p. 3427], as amended by Act Gong. Feb.
5, 1903, c. 487, § 4, 32 Stat 797 [U. S. Comp. St Supp. 1903, p. 411], pro-
vidlng that the failure to keep books, with such intent, shall deprive the
bankrupt of the right to a discharge, though the spécification did not dis-
close what books of account it was claimed the bankrupt sbould hâve
kept
2. Same— Destruction op Votjchees.
A spécification of objection to bankrupts' discharge, alleging that the
bankrupts, with intent to conceal their flnancial condition, did destroy,
through the agency of , their regularly authorized bookkeeper, canceled
checks drawn by the bankrupts, together with stubs of such checks, from
which such condition mlght be ascertained, was not objectionable for fail-
ure to more defiuitely describe the checks and stubs alleged to hâve been
destroyed.
E. H. GODSHALK 00. V. STERLING. 581
a. Same—Appeal— Objections.
An objection to spécifications of objections to a bankrupt's dlscharge,
on the ground that the jurât was insufllclent, cannot be made for the flrst
time on a pétition for review.
4. Same— False Statements.
A spécification of objection to bankrupts' discharge, on the ground that
they had made a materially false statement on which they had obtalned
crédit, which failed to state the substance of such alleged false statement,
was insuffieient
Pétition for Revision of Proceedings of the District Court of the
United States for the Eastern District of Pennsylvania.
E. B. Seymour, Jr., for petitioner.
Henry N. Wessel, for appellees.
Before ACHESON, DALLAS, and GRAY. Circuit Judges.
ACHESON, Circuit Judge. E. H. Godshalk Company, a créditer
of Sterling & Snyder, banlcrupts, filed in the court below four spécifi-
cations of objections to the discharge of the bankrupts. The bank-
rupts moved to dismiss thèse spécifications, and the court allowed the
motion. The reasons assigned by the bankrupts in support of their
motion were because the spécifications, "and each of them, are insuf-
fieient, indefînite, and uncertain, and for the additional reason that
they fail to specify facts which constitute légal ground for the refusai
of the court to grant the discharge of the bankrupts, and for the fur-
ther reason that they do not specify any légal objection to the bank-
rupts' discharge." The learned judge below, in sustaining the motion
to dismiss, filed no opinion. Therefore we hâve not the benefît of
any statement by him as to his reasons for his order of dismissaJ.
The spécifications in question corne under section 14b of the bankrupt
act of July I, 1898, c. 541, 30 Stat. 550 [U. S. Comp. St. 1901, p.
3427], as amended by Act Feb. 5, 1903', c. 487, § 4, 32 Stat. 797 [U.
5. Comp. St. Supp. 1903, p. 411]. This amendatory section, we in-
cline to think, is more favorable to objecting creditors than was the
original section as construed by the courts. But however this may
be, M'e hâve reached the conclusion that at least two of the spécifica-
tions in this case, namely, i and 4, were sufificiently spécifie, and that
the court should hâve heard and investigated them. Thèse two spéci-
fications of objection to the discharge of the bankrupts are as follows :
"(1) That such application should not be granted, because of the followlng
facts, which the undersigned charges to be true, vlz. : That the said bank-
rupts, Isaac Sterling and Harry Snyder, did, with intent to conceal their finan-
cial condition, fail to keep books of account or records from which such con-
dition might be ascertained."
"(4) That such application should not be granted, because of the following
facts, constituting an additional ground, which the undersigned charges to
be true, vlz. : That the said bankrupts, Isaac Sterling and Harry Snyder, did,
with intent to conceal their financial condition, destroy, through the agency
of one Albert Sterling, son of Isaac Sterling aforesaid, their regularly author-
1(3. Appea! and review in banliruptey cases, see note to In re Bggert, 43 C.
C. A. 9.
î 4. See Bankruptcy, vol. 6, Cent. Dig. § 714.
582 129 FEDERAL EEPOETEK.
ized bookkeeper. canceled checks drawn by the said flrm prior to the flrst day
of January, A. D. 1903, and also stubs of sald checks from whlch such condi-
tion might be ascertained."
Thèse spécifications, respectively, not only conform to the language
of section 14b of the banl<rupt act, as amended by the act of 1903, but
we think tliat they sufficiently specify the necessary facts.
We cannot assent to the suggestion that it was the duty of the ob-
jecting creditor to specify what books of account the bankrupts should
hâve kept. We think the spécification went far enough when it af-
firmed that the bankrupts, with intent to conceal their financial con-
dition, failed to keep books of account or records from! which such
condition might be ascertained.
The fourth spécification distinctly avers that the bankrupts, with
intent to conceal their financial condition, destroyed, through the
agency of one Albert Sterling, scm of one of the bankrupts, and the
bookkeeper of the firm, canceled checks drawn by the firm prior to
the rst day of January, 1903, and also the stubs to said checks, from
which such condition might be ascertained. We think that this spéci-
fication was sufficient in its statement of facts. It was not for the
objecting creditor to set forth the dates when those checks were
drawn, or other particulars. The destruction of the checks and their
stubs, with intent to conceal the firm's financial condition, was the
important fact.
No objection seems to hâve been taken in the court below to the
jurât, and it is too late to make such objection upon the hearing in
this court upon this pétition for review, even if the objection had any
substantial basis. We do not see, however, that the jurât is open to
objection.
Our conclusion is that the assignments of error relating to the ac-
tion of the court below with respect to the spécifications of objections
numbered 2 and 3 should be overruled. The spécification numbered
2 does not set forth what the "materially false statement" was upon
which the bankrupts obtained crédit. No good reason appears why
at least the substance of this alleged false statement was not contained
in the spécification. The like observations are applicable to the tbird
spécification of objection. It does not set forth, as we think it should
hâve done, what property the bankrupts transferred. The averment,
"some of their property," is inexcusably vague.
The decree of the District Court, in so far as it overruled and dis-
missed the spécifications of objection to the bankrupts' discharge, filed
by E. H. Godshalk Company and numbered i and 4, is reversed, and
the case is remanded to that court for further proceedings in accord-
ance with this opinion.
WALMSLET V. QUIGLEY. 583
WALMSLBY V. QUIGLEY.
(Circuit Court of Appeals, Eighth Circuit April 28, 1904.)
No. 1,834.
1. Agent's Authoeitt— Evidence— Déclarations of Agent.
Tlie admissions or déclarations of an alleged agent are alike Incompé-
tent to prove bis authority or tbe estent of lils powers.
(Syllabus by the Court.)
In Error to the Circuit Court of the United States for the District
of Colorado.
Charles J. Hughes, Jr., and Bret Harris, for plaintifif in error.
E. T. Wells, John Charles Thompson, John H. Chiles, and George
S. Redd, for défendant in error.
Before SANEORN, VAN DEVANTER, and HOOK, Circuit
Judges.
SANBORN, Circuit Judge. The défendant in error, Edward D.
Quigley, brought an action in the Circuit Court against Sylvester
Pierce Walmsley to recover a commission of $2,500, which he alleged
was due to him for his services in procuring a purchaser for certain
real estate, which, for the sake of brevity, will be called the "Dove's
Nest Property." For his cause of action he alleged in his complaint
that thèse facts existed: On April i, 1901, Robert S. Morrison held
the title to the real estate as a trustée for Walmsley and others whose
names were unknown to him. M. C. Merrill told him that he desired
to purchase this property. Thereupon he applied to Morrison for
authority to sell the property to Merrill, and Morrison, "by authority
of said défendant and the others equitably interested in said premàses,
and for whose use and behoof the said Morrison was holding the
same," agreed with him that he should procure Merrill or some other
person to buy the property for $25,000, and that he should receive as
his commission for the negotiation and for procuring the purchaser
$2,500. Afterwards he persuaded Merrill to visit and examine the
property, and, while Merrill had the purchase under considération,
Morrison, by the direction and request of the défendant and others
equitably interested in the property, conveyed it to Walmsley as trus-
tée for those entitled to its benefit. At some subséquent time Merrill
continued the negotiations for the purchase which had been instituted
by the plaintiiï, and finally, on December 24, 1901, bought the prop-
eity for $25,000. The défendant, Walmsley, admitted in his answer
that Morrison held the naked légal title to the real estate on April i,
igoi, in trust for the défendant and others who were the équitable
owners thereof, that Morrison subsequently conveyed this title to him,
and thait he sold the property to Merrill in the autumn of the year
1901 through an agent named Owen, to whom he paid a commission
of $2,500 for eiïecting the sale. He denied that Morrison ever had
any bénéficiai interest in the property, that he ever had any right or
î 1. See Principal and Agent, vol. 40, Cent. Dig. § 416.
384 129 FEDKEAL EEPORTKK.
authority tO' sell the land, to offer it for sale, or to authorize any other
person to do so. He denied that Morrison ever had anj^ power or
authority fronj him or from any of the other persons equitably inter-
ested in the property to make the alleged agreement to pay to the
plaiiitiff a commission of $2,500 for procuring a purchaser of the prop-
erty, a.nd denied that Morrison ever made any such agreement. He
denied that Merrill continued any negotiation instituted by Quigley at
the time when he finally purchased the firoperty through Owen.
Under thèse pleadings, and with the alleged authority of Morrison
to agrée on behalf of the défendant, Walmsley, and the other équitable
owners of the property, to pay to the plaintiff a commission of $2,500
for procuring a purchaser of the property for the sum of $25,000,
squarely in issue, the case came tO' trial, A jury was waived, and the
trial was conducted before the court. The plaintifï introduced in
évidence a sheriflf's deed of the land in question to Morrison, dated
September 16, 1898, and the certiiicate of its record upon September
26, 1898. The plaintifï, Quigley, was then called as a witness, and he
tcstified that in February, 1901, Merrill wanted him to look up the
Dove's Nest property, learn who owned it and what it could be pur-
chased for, and told him that he wanted to buy it ; that he proceeded to
investigate the title, and found thait the property stood in the name of
Morrison ; that he thereupon called upon Morrison, and the latter
asked him to make a proposition which he could submit to some co-
owners ; that he made a proposition to pay $25,000 for the property
— $5,000 cash, and $5,000 every 90 days thereafter until the fuU price
was paid ; thiat Morrison told him, that he would hâve to wait until he
heard from New Orléans parties who were interested in the property
before he could give him any answer to his proposition ; that he wait-
ed two weeks, and that Morrison then said that he could not give a
definite answer because some of the owners, Mr. Walmsley or their
attorney, were in New York ; that at the end of three or four weeks
Morrison told him that they had accepted the proposition, and that
he could go on with the sale ; that he then put Morrison in communi-
cation with Merrill, and informed the latter that they had agreed to
the proposition, and that he could go on and close the deal at any time.
The foregoing is ail the material testimony that had been presented in
the case when counsel for the plaintifï asked Quigley what the terms
of the agrecm^ent were with référence to commission, defendant's
counsel objected to the question upon the ground that no relationship
between the plaintifï and the défendant had been shown which would
justify proof of commission, this objection was overruled, the plaintifï
excepted, and the witness answered that they were to pay him 10 per
cent, of the purchase price. The ruling of the court which admitted
this évidence is the first spécification of error assigned.
This is an action toi recover $2,500 of the défendant, Walmsley, as
an individual, and not as a trustée, and the judgment which has been
rendered against him is a personal judgment. The cause of action
rests upon the averment that Morrison, by authority of Walmsley,
agreed to pay the plaintifï 10 per cent, of the purchase price of the
property for his services in procuring a purchaser for it. Proof of the
authority of Morrison to make this agreement on behalf of Walmsley
TSOI TU V. UNITED STATES. 5oi>
was clearly an indispensable prerequisite to the competency of évi-
dence of the agreement. No such proof had been presented. The
testimony of Quigley that Morrison had told him that "they" had ac-
cepted his propcisition, even if it be conceded that Walmsley was one
of the "they," was both insufRcient and incompétent to establish the
authority of Morrison to bind Walmsley by such a contract. The ad-
missions and déclarations of an alleged agent are alike incompétent
to establish his authority or the extent of his powers. Union Guar-
anty & Trust Co. v. Robinson, 24 C. C. A. 650, 653, 79 Fed. 420, 422 ;
Whitam v. Dubuque & S. C. R. Co. riowa) 65 N. W. 403, 405 ; Ba-
con V. Johnson (Mich.) 22 N. W. 276, 277. The Circuit Court should
hâve sustained the objection to évidence of the agreement to pay the
commission until the plaintiiif had established the fact by compétent
proof that Walmsley had authorized Morrison to make such a contract
on his behalf. There was no évidence of any such authority before
the court at the time this ruling was miade. Moreover, a careful
perusal of the entire record bas produced a settled conviction in our
minds that there was no évidence at any time during the trial that
the défendant ever gave Morrison any such authority or that he ever
ratified any such contract. The resuit is that proof of the agreement
of Walmsley to pay the commission was not only incompétent at the
time it was ofifered, but it never became compétent at any time during
the trial of the action, and the error in receiving it was crucial and
fatal to the plaintiflf's recovery, so that it becomes unnecessary to
consider any other question presented in this case.
The judgment below must therefore be reversed, and the case must
be remanded to the Circuit Court with directions to grant a new trial.
It is so ordered
TSOI TII T. UNITED STATES. YEB YUEN v. UNITED STATES.
CHEUNG HIM NIM v. UNITED STATES. CHEW HINQ
V. UNITED STATES. LEE YUE v. UNITED
STATES. CHIN CHEW PONG v.
UNITED STATES.
(Circuit Court of Appeals, Ninth Circuit. Aprll 4, 1904.)
1. Chinese Exclusion— Re VIEW of Obdeb of Depoetation-tJubisdiction of
CiBCuiT Court of Appeals.
Under section 6 of Act March 3, 1891, creatlng the Circuit Courts of
Appeals (26 Stat. 828, c. 517 [U. S, Comp. St. 1901, p. 549]), which glves
such courts the power to review by appeal or writ of error final décisions
in the District Court, an appeal lies to such court from a judgment of a
District Court rendered on an appeal from an order of a commissloner
for the déportation of a Chinese person arrested under section 13 of the
exclusion act of September 13, 1888, c. 1015, 25 Stat 479 [U. S. Comp.
St. 1901, p. 1317], which authorizes an appeal from a conviction before a
commissloner to "the judge of the District Court for the district"
Appeals from the District Court of the United States for the North-
ern District of CaHfornia.
C. T. Hughes, Frank V. Bell, and Dibble & Dibble, for appellants.
Duncan E. McKinlay, for the United States.
586 129 FEDERAL REPOBTBB.
Before GILBERT and ROSS, Circuit Judges, and HAWLEY, Dis-
trict Judge.
GILBERT, Circuit Judge. The appellants in thèse cases, Chinese
persons, were prosecuted before a United States commissioner under
section 13 of the Chinese exclusion act of September 13, 1888, c. 1015,
25 Stat. 479 [U. S. Comp. St. 1901, p. 1317]. The commissioner in
each case adjudged that they were unlawfully in the United States, and
that they be deported. Appeals from his judgments were taken to the
judge of the District Court for the Northern District of California.
Judgments were made and entered in that court affirming the judg-
ments of the commissioner. From the judgments of the District Court,
appeals were taken to this court. The appellee now moves to dismiss
on the ground that no appeal lies from the décision of the district judge.
Section 13 of the act of September 13, 1888, under which the appeals
were taken, provides as follows :
"That any Chinese person or persons of Chinese descent found unlawfully
In the United States or Its territories may be arrested upon a warrant Issued
Lipon a complalnt, under oath, flled by any person on bebalf of the United
States, by any justice, judge or commissioner of a United States court, re-
turnable before any justice, judge or commissioner of a United States court,
or before any United States court, and when convlcted upon a hearing and
found and adjudged to be not lawfuUy entitled to be and remain in the
United States, such person shall be removed from the United States to the
country whence he came. But any such Chinese person convlcted before a
commissioner of a United States court may, within ten days from such
conviction, appeal to the judge of the Dlsf;rict Court for the district."
It is contended that ail législation relating to the Chinese is spécial,
that the section above quoted gives the right of appeal only from the
ruling of a commissioner to the judge of the District Court, and that
the décision of such district judge is not the judgment of the court,
and is not a final décision appealable to this court, such as is con-
templated by section 6 of the act of March 3, 1891, c. 517, 26 Stat. 828
[U. S. Comp. St. 1901, p. 549], establishing the Circuit Courts of Ap-
peals, and providing that they shall exercise appellate jurisdiction to
review by appeal or writ of error final décisions in the District Court.
In the case of United States v. Gee Lee, 50 Fed. 271, i C. C. A. 516,
the phrase "the District Judge bf the district," as used in section 13 of
the act of September 13, 1888, was construed, and was held to be
the équivalent of the words "District Court of the district." Judge
Deady, who delivered the çpinion of the court in that case, said :
" 'Judge of the District Court' and 'District Court' are not, strictly speak-
Ing, convertible terms. But they are so in a popùlar sensé, and it is saf e
to assume that Congress, In the use of the former phrase In this connection,
intended to glve the party an appeal to the District Court of the district"
In Chow Loy v, United States, 112 Fed. 354, 50 C. C. A. 279, the
Circuit Court of Appeals for the First Circuit criticised the décision
in the Gee Lee Case, and held that the appeal to the judge of the
District Court for the district is to the judge as a spécial tribunal,
and not to the District Court. In support of that view the court re-
TSOI rn V. UNITED STATES. 587
ferred to the décision in Fong Vue Ting v. United States, 149 U. S.
698, 728, 13 Sup. Ct. 1016, 1028, 37 L. Ed. 905, where it was said:
"The désignation of the judge in gênerai terma as a United States judge
Is an apt and sufflclent description of a judge of a court of the United States,
and is équivalent to or synonymous with the désignation, in other statutes,
of the judges authorized to issue writs of habeas corpus or warrants to
arrest persons accused of crime. Rev. St §§ 752, 1014 [U. S. Comp. St. 1901,
pp. 592, 716]."
And the Circuit Court of Appeals, arguendo, referred to Carper v.
Fitzgerald, 121 U. S. 87, 7 Sup. Ct. 825, 30 L. Ed. 882, where it was
held that no appeal lies to the Suprême Court from the order of a
circuit judge made in chambers as a judge, and not as a court, dis-
charging a person brought before him on a writ of habeas corpus.
But in the case of Fong Yue Ting the remarks of the court above
quoted were not directed to the provision of the act providing for an
appeal to the district judge from a commissioner's décision. They
had référence to the language of section 6 of the act of May 5, 1892,
c. 60, 27 Stat. 25 [U. S. Comp. St. 1901, p. 1321], and the portion
thereof which provides that a Chinese laborer who shall neglect or
fail to apply for a certificate of résidence within the year therein pre-
scribed "may be arrested by any customs officiai, collector of internai
revenue or his deputies, United States marshal or his deputies, and
talien before a United States judge," and that it shall thereupon be
the duty of a judge to order that the laborer be deported from the
United States.
We think the whole question of our right to entertain thèse appeals
is determined by the décisions of the Suprême Court in United States
V. Mrs. Que Lim, 176 U. S. 459, 20 Sup. Ct. 415, 44 L. Ed. 544, Chin
Bak Kan v. United States, 186 U, S. 193, 22 Sup. Ct. 891, 46 L. Ed.
1131, and Ah How v. United States and the other cases therewith
decided on February 23, 1904 (not yet officially reported) 24 Sup. Ct.
357, 48 L,. Ed. . In the first of those cases certain Chinese had
by the United States commissioner been adjudged to be unlaw-
fully within the United States. They appealed, and the District
Court held that they were lawfully entitled to be and remain in
the United States. An appeal was taken to the Suprême Court,
and that court affirmed the judgment of the District Court. In the
Chin Bak Kan Case the appellant was arrested under the provisions of
section 13 of the act of September 13, 1888, and was by a commissioner
adjudged to be unlawfully in the United States, and ordered to be
deported. An appeal was taken from the judgment of déportation
rendered by the commissioner to the judge of the District Court of the
United States for the Northern District of New York. That court
aifirmed the judgment. From that judgment an appeal was taken to
the Suprême Court under section 5 of the act of March 3, 1891, 26
Stat. 827, on the ground that the construction of the treaty of 1894
was drawn into question. The Suprême Court entertained the appeal,
and, in its opinion affîrming the judgment appealed from, quoted the
provisions of section 13 of the act of September 13, 1888, under which
the arrest was made. The case of Ah How was a similar one. Mr.
Justice Holmes, in delivering the opinion of the court, said, "Thèse
are appeals from judgments of the United States District Court cou-
585 129 FEDERAL EEPOETEE.
firming décisions of a commissioner, and adjudging that the appellants
be removed f rom the United States to China," and the court affirmed
the judgments of the District Court.
If appeals could be taken in those cases to the Suprême Court,
they could be entertained only on the ground that the décision of the
district judge on an appeal from the commissioner's décision was the
judgment of the District Court, and, as such, a final décision, from
which an appeal could be taken. It is true that in neither of those
décisions was discussion had of that précise question, but it is not to
be supposed that the Suprême Court did not consider ail the terms
of the act authorizing the judgment from which the appeal was pros-
ecuted, and did not hâve in mind and pass upon the question of its own
jurisdiction. On the authority of those décisions, the motions to dis-
miss will be overruled.
SHOB & LBATHER REPORTER et al., Petltloners.
In re FLAGG MFG. CO.
(Circuit Court of Appeals, First Circuit April 26, 1904.)
No. 520 (original).
L Ban KRTJPTCY— -Courts— JUEISDICTION—MOKTGAGED Peopeett— Salb.
Union Trust Company, Petitioner, 122 Fed. 937, 59 C. C. A. 461, applled,
to the elïect that a court of bankruptcy has jurisdiction to order a sale in
gross of ail the assets of a bankrupt manufacturlng corporation in its
possession free from ineumbranees, notwithstanding the corporation has
given a mortgage on such assets to secure its bonds, leaving questions as
to what assets are covered by the mortgage to be af terwards determined.
2, Same— Revisoby Pétition— Questions Reviewable.
An objection to an order of a court of bankruptcy flxlng a minimum
bid for the sale of the assets of the bankrupt, and providing that five-
sixths of the purchase price might be paid in bonds secured by mortgage
on such assets, will not be reviewed on a revisory pétition where pétition-
ers could not be prejudiced in any maaiier thereby.
8. Same— Questions Raised Below.
Where it was not objected in the District Court, sitting In bankruptcy,
that part of the property of a bankrupt ordered to be sold had not been
inventbrled in the manner required by the bankrupt act, such objection
would not be considered on a revisory pétition.
Howland Twombly (Boyden, Bradlee &. Twombly, on the brief), for
petitioners.
Howard W. Brown, for respondent.
Before COLT and PUTNAM, Circuit Judges, and BROWN, Dis-
trict Judge.
PUTNAM, Circuit Judge, This is a revisory pétition brought by
certain creditors of the Flagg Manufacturlng Company, a corporation
which has been adjudged bankrupt. The corporation was actively
engaged in manufacturlng at the time of its bankruptcy, and in ail
essential features the case is like that of Union Trust Company, Pe-
H 2. Appeal and review ia bankruptcy cases, see note to In re Eggert, 43 G.
0. A. 9.
SHOE <fc LEATHEK EEPOKTEB, PETITIONER
689
titiorier, wherein we passed down an opinion on May 15, 1903, 122
Fed. 937, 59 C. C. A. 461. In this case, as in that, the bankrupt cor-
poration had given a mortgage securing its bonds, and the indebted-
ness under that mortgage is very considérable. It aiso has a large
unsecured indebtedness. This pétition is brought by some of the un-
secured creditors.
After a full investigation, the District Court, sitting in bankruptcy,
ordered a sale of ail the assets in lump, leaving ail questions as to
what portions thereof are covered by the mortgage and are not covered
by it to be afterwards ascertained and determined. Therefore, so far
as the main issue is concerned, the District Court rested securely on
our décision in Union Trust Company, Petitioner.
Only two propositions require our attention. The District Court
provided that the minimum bid should be $60,000, and that the pur-
chaser might pay fîve-sixths of the purchase money in bonds secured
by the mortgage referred to. The other sixth, being not less than
$10,000, it ordered to be paid in cash. The petitioners claim that the
District Court had no power to order any portion of the purchase
price to be paid in bonds, but it is plain that they cannot be prejudiced
by its order in that particular, so that we need not investigate its pow-
ers in référence thereto. The case in this respect falls within our
expression in Boston Dry Goods Company, Petitioner, wherein we
passed down an opinion on October 13, 1903, 125 Fed. 226, 229, 230,
as follows:
"It would be detrlmental to the authority of the District Court, Injurious
to its administration of the bankruptcy statutes, and Involve the numerous
and useless delays whlch those statutes evidently hâve been framed to avoid,
if, in administrative matters, where no substantlal Interests are concerned,
we became meddlesome beyond what the law requires of us."
It is enough to say that this part of the case, as made by the petition-
ers, is disposed of by the gênerai rule in equity which applies to thèse
summary pétitions, to the effect that equity does not concern itself
with mère trivialities, nor unless, on the whole case, the proponent
satisfies the court that he has a substantial interest, which is in danger.
The petitioners now maintain that the outstanding bonds, or some
of them, are not valid obligations of the bankrupt corporation; but
on this point the record gives us nothing definite, and the order of the
District Court directing the sale contains sufficient remédiai réserva-
tions, which it is not necessary to recite. The only other objection
brought to our notice is that some of the property ordered to be sold
has not been inventoried in the manner required by the bankruptcy
statutes. While, of course, we would ordinarily expect the District
Court, before selling property in lump as to which there are conflicting
claims, to establish by proper inventory and appraisal the basis for a
distribution of the proceeds when the title to the portions of the prop-
erty in dispute is settled, yet this record présents nothing definite with
regard to this proposition of the petitioners. It, however, appears that
nothing of this character was brought to the attention of the District
Court. Therefore this point is disposed of by the further observation
made by us in Boston Dry Goods Company, Petitioner, to the effect
that "we ought not to take jurisdiction over propositions of the char-
590 129 FEDERAL BEFORTEB.
acter submitted to us, which the record does not clearly show were
brought specifically to the attention of the District Court."
On the whole, we do not find that we would be justified in assum-
ing to revise the District Court with référence to the case before us.
Let there be a decree disniissing the pétition, with costs for the re-
spondent.
HIBBBRD V. McGILIi.
(Circuit Court of Appeals, Thlrd Circuit. February 22, 1904.)
No. 42.
1. Banketjptcy— Paetneeship ob Individtjal Debt.
An indebtedness contracted by a member of a partnership Indivldually
before the partnership was formed cannot be converted Into a flrm obli-
gation by its entry as such on the books without the creditor's knowledge,
or by the maklng of payments thereon by flrm checks, so as to preclude the
créditer from proving it agalnst the estate of the Indivldual partner in
bankruptcy.
Appeal from the District Court of the United States for the Eastern
District of Pennsylvania.
For opinion below, see 123 Fed. 187.
J. B. Rettew, for appellant.
Rudolph M. Shick, for appellee.
Before ACHESON, DALLAS, and GRAY, Circuit Judges.
GRAY, Circuit Judge. The facts, as disclosed by the record in this
case, are as follows :
John Wiseman and George McGill traded together in Philadelphia,
as partners under the firm name of Wiseman & McGill, in the whole-
sale grocery business, for a number of years prior to 1891. In Janu-
ary, 189 1, George McGill died. There stood to his crédit as capital,
on the books of the firm, about $18,000. He left surviving him his
widow, this claimant, and one daughter, Anna E. McGill. Dr. George
W. Bailey was executor of his will, and one of the trustées for Anna
E. McGill. Shortly after George McGill's death, Dr. Bailey, as execu-
tor, and acting as attorney in fact for Mrs. McGill and as trustée for
Anna E. McGill, made a settlement with Mr. Wiseman, the surviving
partner. In that settlement, it was agreed between Mr. Wiseman,
the surviving partner, and Dr. Bailey, that $9,000 should be carried
to the crédit of Mrs. McGill. It was also agreed that Mrs. McGill
should be paid $75 per month. This agreement was made prior to
March 16, 1891, because on that date, there is a check in évidence,
signed "Wiseman & McGill," for the first month's installment (prob-
ably the month of February) under that agreement. This sum was
regularly paid each month, by checks signed in the same way during
several years, and until the firm name was changed to Wiseman &
Wallace. There is also in évidence the following receipt :
"Philadelphia, April 1, 1891.
"Eeceived of Ella McGill Nine Thousand Dollars and the same is placed to
her crédit on our books.
"$9,000.00. [Signed] Wiseman & McGill."
HIBBERD V. m'GILL. 591
It was testified that, on the ist of April, Wallace, who had pre-
viously been a bookkeeper of the old firm, became a partner, the firm
name of Wiseman & McGill being continued as stated. It is also in
évidence that Mrs. McGill's account was kept upon the books of the
firm, and that her monthly stipend was paid out of partnershp funds.
There was no évidence, however, that either Dr. Bailey, her attorney,
or Mrs. McGill herself, ever consented to consider the debt as a debt
of the new firm. On the contrary, Mrs. McGill testified that she _al-
ways consider ed that, as Wiseman had assumed the debt as surviving
partner, it so continued as his individual debt. Indeed, Mr. Wiseman,
in his testimony, confirms that of Mrs. McGill in this' respect. There
was other testimony which more or less tended to support one side or
the other of the controversy, which took place before a référée, when
Ella McGill undertook to prove her claim against the individual es-
tate of John Wiseman, bankrupt. The claim was objected to by Wise-
man's individual creditors, on the ground that it was a debt of the
firm composed of John Wiseman and Thomas F. Wallace, constituting
the firm of Wiseman & Wallace, and not a debt of Wiseman, individu-
ally. Objection was also made by former creditors, that the pay-
ment of $75 a month, as interest on the $9,000, was usurious, and
that the claim, if allowed for firm assets, should be subject to a ré-
duction for ail money paid as interest over 6 per cent. The référée in
bankruptcy disallowed the claim against the individual estate of John
Wiseman, but allowed it against the firm assets, and found that the
claim should not be reduced on the ground that the $75 a month had
been paid, not only as interest, but in payment for the good will of
the previous business. Exceptions were filed on the part of Ella Mc-
Gill, and an appeal was taken to the United States District Court for
the Eastern District of Pennsylvania. The learned judge of that court
reversed the référée and allowed the claim against the individual es-
tate of John Wiseman. From this finding and decree, the présent
appeal was taken.
The opinion of the learned judge, which comes to us in the record,
is as follows :
"McPherson, J. I regret to say, that I flnd myself unable to agrée with
the learned référée in his finding of facts in this case. I hâve read the tes-
timony with care, and it seems to me to establish clearly the fact that the
agreement in controversy was originally made with John Wiseman Individ-
ually, and not with the flrm of Wiseman & Wallace. This being so, of course
it could not become an obligation of the firm unless Mrs. McGill assented
thereto. The flrm could not be substituted as her debtor in place of John
Wiseman unless she agreed to the change, and there is no évidence that she
ever made any such agreement It is true that the amount due her was en-
tered upon the books of the firm, and that the monthly payments were made
by checks of the firm out of partnership funds, but obviously thèse facts could
not of themselves change the character of the debt It is not shown that she
knew of the entry upon the books, and certainly it could make no différence to
her from what source the monthly payments were made. The testimony
leaves me in no doubt, therefore, that Mrs. McGill is entltled to make her claim
against the individual estate of John Wiseman. Coneerning the monthly pay-
ments, I agrée with the learned référée, that they were not made as interest
and are therefore not obnoxious to the charge of usury. In this respect, the
report of the Référée is conflrmed, but his disallowance of Mrs. McGill's claim
against the individual estate of John Wiseman must be disapproved." 123
Ked. 187.
592 129 FEDERAL EBPORTEK.
The fact that the learned judge felt compelled to differ from the
conclusions reached by the référée, presumably rendered more care-
ful the scrutiny with which the testimony was reviewed by him. As
the case turns almost entirely upon questions of fact, we would feel
constrained to adopt the finding made by the learned judge under
thèse circumstances, unless a manifest error in that regard should ap-
pear to hâve been made.
We hâve, however, carefully examined the testimony set out in the
record, and are inclined to agrée with the conclusions reached bv the
court below, and its order and judgment in the premises are there-
fore affirmed. ■
TERRY V. BIRD.
(Cîlrcult Court of Appeals, Ninth Circuit. February 1, 1904.)
No. 960.
1. Circuit Courts of Appeals— Jueisdiction— Suit Involvino Construc-
tion OF Tbeaty.
A suit in a Circuit Court by an Indian to détermine his rights under
a patent conveying land to him In severalty in accordance witli the pro-
visions of a treaty between his tribe and the United States, on whatever
ground the jurisdiction of the court was invoked, is one involving the
construction of a treaty of the United States, and which, by section 5 of
Act March 3, 1891, ereatlng the Circuit Courts of Appeals (26 Stat 82T
[U. S. Comp. St. 1901, p. 549]), is appealable dlrectly to the Suprême Court,
and is net reviewable by the Circuit Court of Appeals, the appellate juris-
diction of the Suprême Court being exclusive.
Appeal from the Circuit Court of the United States for the Western
Division of the District of Washington.
On motion to dismiss appeal. For opinion of court below, see 129
Fed. 472.
Jesse A. Frye, U. S. Atty., and Edward E. Cushman, Asst. U. S.
Atty., for appellant
George T. Reid, for appellee.
Before GILBERT, ROSS, and MORROW, Circuit Judges.
GILBERT, Circuit Judge. George Bird, the appellee, an Indian
of the Puyallup réservation in the state of Washington, filed a bill in
equity against Frank Terry, the appellant, the superintendent of said
agency, alleging, in substance, that under the treaty of December 26,
1854 (10 Stat. 1132), made between the United States and the Puyallup
Indians, lands were reserved for the latter, which were to be assigned
and patented to them in severalty ; that the appellee was a member of
said tribe, and on January 30, 1886, received, under the provisions of
said treaty, a patent to the land in controversy; that by the terms of
the patent the land was granted to the appellee as a head of a family
and to his heirs ; that at the date of said patent he and Mary Bird were
husband and wife, and resided on the land described in the patent, and
that she was the Mary Bird referred to in the patent, in which it was
recited that the lands had been designated as the sélection of "Teo-
away or George Bird, the head of a family, consisting of himself and
TEKBT V. BIED. 593
Mary"; that Mary Bird died on August 15, 1887, leavîng, her sur-
viving, two sons, Joseph Winyer and Henry Winyer, who had been
born to her by a marriage with a former husband; that said Joseph
Winyer and Henry Winyer were never members of the appellee's
family, but that they also received assignments of land upon said rés-
ervation at the time when the appellee was awarded his assignment of
land ; that the appellee is the owner in fee simple of the said land, but
that the appellant contends that he owns only an undivided one-half
interest therein, and that the other interest belongs to the heirs at law
of Mary Bird ; and that the said appellant claims that under the laws
of the United States and the rules and régulations of the Secretary of
the interior the appellee cannot lease said land to any person unless
said lease is executed before the appellant and approved by the Secre-
tary of the Interior, and unless the rent falling due thereunder is paid
to the said appellant to be distributed by him one half to the appellee
and the other half to the said heirs of Mary Bird ; that the appellee has
leased the whole of said land to one Frank Albert for a period of time
less than two years for fuU and fair considération paid by said Albert
to the complainant, and that the appellant threatens to and will, unless
restrained by the court, go upon the appellee's land and drive off the
stock of said lessee, and evict him therefrom.
The appellee moves to dismiss the appeal on the ground that the
case is one which involves the construction of a treaty made under the
authority of the United States, from the judgment in which an appeal
lies only to the Suprême Court of the United States. No case is made
in the bill of diversity of citizenship, nor was jurisdiction of the Circuit
Court invoked on that ground. The appellant contends, however, that
the jurisdiction of the Circuit Court does not rest alone upon the fact
that the case involves the construction of a treaty or law of the United
States, but that it is conferred by the act of August 15, 1894, c. 290,
28 Stat. 286-305, which gives to the Circuit Courts "jurisdiction to try
and détermine any action, suit or proceeding arising within their re-
spective jurisdictions involving the right of any person in whole or in
part of Indian blood or descent to any allotment of land under any law
or treaty." This provision, if applicable at ail to the présent case, does
not confer a jurisdiction which otherwise would not exist, nor does
it render the cause any the less one which involves the construction of
a treaty of the United States, and which, under section 5 of the act es-
tablishing the Circuit Court of Appeals (Act March 3, 1891, c. 517, 26
Stat. 827 [U. S. Comp. St. 1901, p. 549]), is made appealable from the
Circuit Court directly to the Suprême Court. In American Sugar
Refîning Company v. New Orléans, 181 U. S. 277-281, 21 Sup. Ct. 646,
45 L. Ed. 859, the court, referring to the act creating the Circuit Court
of Appeals, said:
"The intention of the act in gênerai was that the appellate jurisdiction
should be distributed, and that there should not be two appeals. And the
rlght to two appeals would exist in every case (the litlgated matter having
the requisite value) where the jurisdiction of the Circuit Court rested solely
on the ground that the suit arose under the Constitution, laws, or treaties of
the United States, if such cases could be carried to the Circuit Court of Ap
peals, for their décisions would not corne within the category of those made
final. As, however, a case so arises where It appears on the record, from
129 F.— 38
594 129 FBDË3EAL EEPORTEB.
plaintUTs own statement, In légal and loglcal form, such as Is requlred by
good pleadlng, that the suit Is one whlch does really and substantially Involve
a dispute or controversy as to a right whlch dépends on the construction or
application of the Constitution or some law or treaty of the United States
(Gold Washing & Water Co. v. Keyes, 96 U. S. 199 [24 L. Ed. 656] ; Blackburn
V. Portland Gold Mining Co., 175 V. S. 571 [20 Sup. Ct. 222, 44 h. Ed. 276];
Western Union ïelegraph Co. v. Ann Arbor Railroad Company, 178 U. S.
239 [20 Sup. et. 867, 44 L. Ed. 1052]; and as those cases fall strictly within
the terms of section 5, the appellate jurisdiction of this court in respect of
them Is exclusive."
There can be no doubt that the présent case is one which invoîves a
construction of the treaty with the Puyallup Indians, and an adjudica-
tion of the rights of the appellee thereunder. Such a case is appealable
to the Suprême Court, and no provision is made for its appeal to the
Circuit Court of Appeals.
The motion to dismiss will be allowed.
PAULUS et al. v. M. M. BUCK MFG. CO. et al.
(Circuit Court of Appeals, Eighth Circuit March 28, 1904.)
No. 1,968.
1. Patent foe Invention— Ov^ner or Unuivided Intekest May Géant Li-
CESSE.
The owner of an undlvided part of ail the rights secured by a patent
may, without the consent of his co-owuers, grant a valid license to use
the monopoly secured by the patent.
2. Same—Assionment— License— Définition.
A patent secures the exclusive right to make, the exclusive rlght to use,
and the exclusive right to vend the Invention it protects. A grant of ail
thèse exclusive rights throughout the United States, a grant of an undl-
vided part of ail thèse exclusive rights, or a grant of ail thèse exclusive
rights throughout a specified part of the United States, is an assignment
of an interest in the patent, by whatever name it is designated. A grant
of any interest in or right under a patent less than thèse is a license.
3. Same— Unrecorded Grant of Exclusive Rights— Validitt.
An unrocorded paroi or wrltten grant of ail the exclusive rights under
a patent is an assignment, and under section 4808, Rev. St. [U. S. Comp.
St. 1901, p. 8387], it Is void aa against subséquent purchasers for value,
without notice.
4. Appeal— Fin DiNGS and Deceee— Prestjmptions.
Where a chancellor bas considered conflicting évidence, and made hls
findings and decree thereon, they must be deemed to be presumptlvely
correct in an ajipellate court; and, unless an obvions error bas Intervened
In tbe application of the law, or some serions mistalse bas been made In
the considération of the évidence, they will not be dlsturbed.
(Syllabus by the Court.)
Appeal from the Circuit Court of the United States for the Eastern
District of Missouri.
James H. Peirce, George P. Fisher, Jr., Paul Bakewell, and Fred-
erick R. Cornvvall, for appellants.
George H. Knight, for appellees.
Before SANBORN, THAYER, and HOOK, Circuit Judges.
f 1. See Patents, vol. 38, Cent. Dig. § 269.
U 2. Power of patentée to control his invention, see note to Heaton-Penlnsu-
lar B. F. Co. V. Eurêka Specialty Co., 25 C. C. A. 280.
PATJLUS V. M. M. BUCK MFG. OO, 695
SANBORN, Circuit Judge. This is an appeal from a decree which
dismissed a bill for relief from an infringement of letters patent No.
428,516, for improvements in railway drills, issued to the complainant
Aaron R. Plaulus on May 20, 1890. On June 14, 1890, he conveyed
an undivided one-fourth of his interest in the patent to his co-com-
plainant, William W. Ellis. The issue in this case is one of title, and
not one of inipinging inventions. The complainants' title, as the rec-
ord discloses it, has been stated. This is the title of the défendants :
On February 24, i8go, Paulus made a written agreement to sell and
convey one-half of his interest under the patent to W. W. Ellis and
Mrs. Mary West, the wife of Charles J. West, as soon as he should
receive his patent. This agreement was not recorded. On June 14,
1890, Paulus conveyed one-fourth of his interest as patentée to
Charles J. West. On June 8, 1891, West assigned this interest to
Mrs. Mary West, his wife. After thèse assignments had been re-
corded, and on September 23, 1896, Mrs. West conveyed her one-
fourth interest in the patent to the deifendants Weaver and Emminger.
On Miay 24, 1897, Weaver and Emminger granted a license to the
défendant the M. M. Buck Manufacturing Company to manufacture
and selil the railway track drills protected by the patent to Paulus.
Under this title, as the record of the Patent Office disclosed it, Weaver
and Emminger owned an undivided one-fourth of the monopoly se-
cured by the patent when they issued their license to the Buck Com-
pany, and Paulus and Ellis were entitled to no relief under their bill.
The owner of an undivided part of ail the rights secured by a patent
may, without the consent of his co-owners, grant a valid license to use
the monopoily it protects. Bloomer v. McQuewan, 14 How. 539, 14
L. Ed. 532 ; Blackledge v. Weir & Craig Mfg. Co., 47 C. C. A. 212,
108 Fed. 71. The burden was therefore upon the complainants to
show that by reason of facts which the recorded title did not disclose
the défendants ought not to be permitted to use the one-fourth of the
exclusive rights under the patent which they had purchased. They
endeavored to bear this burden in this way : They alleged in their bill,
and the défendants denied in their answer, that about the ist of June,
1890, they and Charles J. West, the owners of the patent, formed a
partnership styled the Paulus R. R. Drill Company, and orally agreed
that this partnership should hâve ail the exclusive rights secured by
the patent during its term ; that neitlier one of them should sell his
interest in the patent without first oiffering to sell it to the other mem-
bers of the firm ; that, if any one of them should sell to a stranger, the
purchaser should step into the shoes of the vendor, and become a
member of the partnership subject to the agreement ; and that Weaver
and Emminger had notice of thèse facts before they purchased their
one-fourth interest from Mrs. West. Paulus and Ellis testified to the
existence of the agreement of partnership and of transfer to the part-
nership of the exclusive rights protected by the patent, and Charles
J. West and Mary West, his wife, testified that no such grant was
ever made. The défendants introduced in évidence the written agree-
ment dated February 24, 1890, by which Paulus contracted to sell to
W. W. Ellis and Mrs. West a one-half interest in the patent as soon
as he obtained it, and they testified that West never owned any inter-
596 129 FEDERAL EEPORTER.
est in the patent ; that the assignment to him dated June 14, 1890, was
made by mistake, when it should hâve been made to Mrs. West ; that
Paulus knew thèse facts; that he made the assignment to West in
the performance of the agreement of February 24, 1890; and that
Mrs. West never consented to any grant or license to the partnership
which could in any way prevent her from itsing her one-fourth of the
rights secured by the patent. The évidence was conclusive that
Charles J. West and his wife left Vilhsca, lowa, where the drill Com-
pany was organized, and where it was operating, about the year 1892 ;
that thereafter they hved in Ohio; tlmt there was no agreement of
dissokition of the partnership ; and that neither West nor his wife par-
ticipated in the profits or in the losses of the firm after they left lowa.
There was a sharp confiict of testimony upon the issue whether ornot
Weaver, Emminger, or the Buck Manufacturing Company received
notice that the interest of Mrs. West was subject to the exclusive
rights of the drill company to the monopoly before they acquired their
interest. There was évidence which had some tendency to show that
they had notice of facts which might hâve led a person of ordinary
prudence and diligence to discover the daims of the complainants in
this regard. On the other hand, the défendants testified that they had
no notice or knowledge of any such claim.
The agreement which the complainants testify that the owners of
the patent made to the effect that the drill company should hâve and
exercise ail the exclusive rights secured by the patent is called by their
counsel an oral license, and much iS written in the brief to show that
a license may be made by paroi. For the purposes of this case the
concession is made that parties may make a valid oral license. But
the agreement to which the complainants testify evidenced no license.
It was a grant of the exclusive right to make, to use, and to vend the
invention throughout the United States for the full term of the pat-
ent. They testify that the agreement was that the patent should "be
used and controlled by the Paulus R. R. Drill Company for the term
of the patent ; that neither Paulus, Ellis, nor West could use the right
outside the Paulus R. R. Drill Company" ; and that, if either of them
sold his interest, the purchaser should hold the same relation to the
drill compaoy that the vendor had held, and should take subject to the
contract. The name by which a grant of a right under a patent may
be called is not material. It does not condition or afïect the rules
of law which govern it. The exclusive rights secured by a patent are
the right to^ make, the right to use, and the right to vend the inven-
tion it protects. A grant, transfer, or conveyance of thèse exclusive
rights throughout the United States, or a grant of an undivided part
of thèse exclusive rights, or a grant of thèse exclusive rights through-
out a specified part of the United States, is an assignment of an inter-
est in the patent, by whatever name it may be called. A grant, trans-
fer, or conveyance of any right or interest less than thèse is a license.
Waterman v. Mackenzie, 138 U. S. 252, 255, 256, 11 Sup. Ct. 334, 34
L. Ed. 923; Union Switch & Signal Co. v. Johnson Railroad Signal
Co., 10 C. C. A. 176, 179, 61 Fed. 940, 943; Pickhardt v. Packard
(C. C.) 22 Fed. 530, 532, 23 Blatchf. 23. The agreement to which the
complainants testify constituted a grant to the partnership of ail the
PAULTJS V. M. M. BtJGK MFG. OO. 597
exclusive rights secured by the patent to Paulus, and it constituted an
assignment of an interest in the patent, and not a license under it;
Section 4898 of the Revised Statutes [U. S. Comp. St. 1901, p. 3387]
provides that "an assignment, griant or conveyance shall be void as
against any subséquent purchaser or mortgagee for a valuable con-
sidération without notice unies s it is recorded in the patent office with-
in three months from the date thereof." The défendants Weaver and
Emminger were pnrchasers of the interest of Mrs. West for a valu-
able considération after the alleged assignment to the partnership, and
the oral unrecorded grant to the firm was void as against them and
their licensee, the Buck Manufacturing Company, unless they huad no-
tice of its existence before they purchased from Mrs. West. Gates
Iron Works v. Fraser, 153 U. S. 332, 349, 14 Sup. Ct. 883, 889, 38 L.
Ed. 734.
In the last analysis, therefore, the décision of this case is condition-
ed by the answers to thèse two questions of fact : Did the owners of
the patent grant the exclusive rights under it to the Paulus R. R. Drill
Company in 1890? Did the défendants hâve such notice of this grant
as would hâve put a man of reasonable prudence and diligence upon
an inquiry which would hâve discovered it before they acquired their
respective interests ? The burden was upon the complainants to prove
a State of facts that would sustain an affirmative answer to each of
thèse questions. The évidence upon each of thèse issues was con-
fiicting. This was a suit in equity. The chancellor found that one
or both of thèse questions must be answered in the négative, for he
found for the défendants. This finding placed an additional burden
upon the complainants, for the presumption is that the conclusion of
a chancellor upon conflicting évidence is correct, and it ought not to
be disturbed unless an obvious error has intervened in the application
of the law, or some serious mistake has been made in the considération
of the évidence. Thallmann v. Thomas, 49 C. C. A. 317, 323, m
Fed. 277, 283 ; Exploration Co. v. Adams, 104 Fed. 404, 408, 45 C.
C. A. 185, 188; Mann v. Bank, 86 Fed. 51, 53, 29 C. C. A. 547, 549;
Tilghman v. Proctor, 125 U. S. 136, 8 Sup. Ct. 894, 31 L. Ed. 664;
Kimberly v. Arms, 129 U. S. 512, 9 Sup. Ct. 355, 32 L- Ed. 764; Furrer
V. Ferris, 145 U. S. 132, 134, 12 Sup. Ct. 821, 36 L. Ed. 649; Warren
V. Burt, 58 Fed. loi, 106, 7 C. C. A. 105, iio; Plow Co. v. Carson,
72 Fed. 387, 388, 18 C. C. A. 606, 607; Trust Co. v. McClure, 78
Fed. 209, '210, 24 C. C. A. 64, 65.
No good purpose would be served by extending this opinion to re-
cite, review, and discuss the conflicting testiraony. Suffice it to say
that a careful reading and analysis and a deliberate considération of
ail the évidence hâve failed to convince that the court below fell into
any error of law or mistake of fact in its considération or décision of
the questions presented in this case. The decree below is accord-
ingly affirmed.
598 128 FEDERAL BBFOBTUB.
HALB & KILBUEN MFG. CO. v. ONEONTA, COOPERSTOWN & RICH-
FIELD SPRINGS RY. 00.
(Circuit Court, N. D. New York.)
No. 6,984.
1. Patents— Anticipation— Peesumption from Action of Patent Office.
The presumption arlsing from the granting of a patent, tUat it was net
■ antlcipated by one previously issued, is strengthened where It is shown
that such prier patent was called to the attention of the examiners and
considered before the one in suit was granted, and in such case auy doubt
on the question must be resolved in favor of the later patent.
2. Same— Inopeeative Pbior Device.
A patent for an operative and useful device Is not antlcipated by a
prior device which is not operative, although the parts and combinatlon
may be similar.
3. Same— Infeingement— Cab Seats.
The Haie patent No. 359,354, for a car seat, construed, and held not
antlcipated, valld, and Infrlnged.
In Equity. Suit for infringement of letters patent No. 359,354, for
a car seat, granted to Henry S. Haie March 15, 1887. On final hear-
ing.
Samuel Owen Edmonds, for complainant.
Harry E. Knight and George H. Knight (Harris L. Cooke. of coun-
sel), for défendant
HAZEL, District Judge. This is a bill for infringement of United
States letters patent No. 359,354, granted March 15, 1887, to Henry S.
Haie, and by him assigned to complainant. The patent relates to car
seats in which the seat proper may be automatically tipped or tilted,
and shifted or moved slightly forward by the act of reversing the
back. The défendant is a purchaser and user of the infringing seats.
They were manufactured by the St. Louis Car Company, a Missouri
corporation, which, according to the stipulation found in the record,
assumed the défense herein, and hence may be regarded as the real
défendant. The first claim of the patent, which alone is involved, re-
fers to a combination of four éléments, and reads as follows :
"(1) In a seat, the combination of the main frame having cam faces or guides,
a seat-supporting frame having racks and working upon said cam faces to
admit of reciprocation and to tilt the seat, tlie seat back, and Connecting
arms for hinging the seat back to the frame, provided with gear segments
meshing with the rack on the seat-supporting frame, whereby the sald gear
segment shifts the seat with a uniform movement and locks the frame agatnst
vertical displacement, substantially as and for the purpose speclfled."
The défenses relied on are anticipation and noninfringement. The
spécification points out that the objects of the patent, briefly stated,
are: (i) To enable the seats having high backs to be reversed in a
limited space, suitable for use in railway cars; (2) to hinge the back
of the seat firmly to the arms locking the same, so as to prevent oscilla-
tion until the back is raised from the seat to a vertical or nearly vertical
\ 2. See Patents, vol. 38, Cent. Big. § 73.
HALE A EILBUBN MFG. 00. ▼. ONEONTÀ, 0. A B. S. ST. OO. 699
position, when the locks unlatch, and the back may then be oscillate'd
by hand ; (3) to pivot the seat back arms dose to the seat, and by means
of a rack and pinion device connect them with the seat carrying frame,
"whereby the movement of the seat back will shift the seat in the proper
direction with a uniform movement, and at the same time hold the
seat frame down and lock it from displacement." The spécification
States: "The seat frame runs upon cam faces, substantially in the
manner set out in my former application herein referred to, for the
purpose of tipping or tilting the seat in the act of shifting it." Such
an arrangement causes the seat proper to move simultaneously with
the back of the seat whenever the back is reversed. The desideratum
is to obtain a uniform movement of the back and seat so as to lock
the same rigidly after the back is turned. This is absolutely essential
to the successful operativeness of the seat. Failure in this respect is
apt to jam or wedge the seat, displacing the alignment and the adjust-
ing mechanism, resulting in temporary annoyance, as well as some in-
convenience to the manipulator. The réversible car seat, namely, a
car seat having a back pivoted to the arm of the seat so as to change
the direction of its facing, was not new when the application for the
patent in suit was filed. The sole apparent purpose of the invention
is to secure automatic uniformity of movement of the frame upon
which the seat is placed, by tipping or tilting its front edge upward
with a simultaneous shifting movement of the seat forward, and then
locking the seat frame so as to prevent displacement. The patent in
détail describes the mechanism by which thèse objects are attained.
For the purposes of this action thèse détails need not be specifically
set forth. It is enough to briefly describe the car seat and its manner
of opération. According to complainant's expert witness :
"The seat-back arms are pivoted close to the seat, and coimected by meana
of a rack and plnlon device vs'Ith a seat-earrying frame, the seat frame Itself
running upon aupporting means, such as guides or cam faces, whereby, as the
movement of the seat back Is Imparted to change It from one edge to the other
of the seat, the seat frame wlll be glven a uniform movement towards the
edge, which Is for the tlme belng to constltute the front, and wlll be held
locked In such position, the act of movlng the seat frame in the manner noted
Imparting thereto also a tipping or tilting of the front edge."
Notwithstanding the many prior applications found in the record,
the prior art is within a very limited field. It is practically conceded
on both sides that the only références to which attention need be given
are the Gardner patent. No. 250,435, dated December 6, i88r, and the
Paulding & Maybeck, No. 281,129, granted about three years before
the filing of the application for the patent in suit. The earlier patent
relates to réversible car seats, but does not appear to hâve any of the
éléments of the patent in suit. It describes a tilting or raising of the
seat, and not a forward movement, as specifically pointed out in com-
plainant's structure. The Paulding & Maybeck patent relates to car
seats having réversible backs, and, according to défendant, discloses
the identical function found in the combination of claim i in suit. The
difïerentiating structural features consisted in the manner in which
the seat was moved. The movement of the seat was owing to a re-
versai of its attached pivoted arms from one position to the other ^
their lower ends engaged between two ^irojecting pins or teeth. Thus,
600 129 FBDBEAL KBPOETEB.
with the aid of suitable devices, the seat was moved, and locked the
back in either of its extrême positions. It is contended by the de-
fendant that the mechanism of this device which moved the seat is the
plain équivalent of the rack and pinion movement found in complain-
ant's patent. It is quite true that its opération very closely approaches
the patent in suit. The séries of diàgrams in évidence, prepared by
defendant's expert witness SouIe, to demonstrate the mechanical equiv-
alency of the différent forms of rack and sector arrangements shown
by the Haie and Paulding & Maybeck patents, are entitled to more
than passing considération. The adaptation of the segmentai pinion
and rack, a well-known mechanism, found in the Haie patent, may
hâve been perfectly obvious to the skilled observer of the Paulding &
Maybeck structure when attention was called to it. Any doubt which
I may hâve upon that point is resolved in favor of the patent. Cer-
tain it is that the rack and pinion device, in combination with the other
éléments of claim i, produce a structure which effectively achieves the
particular object of the inventor, which, as has been said, was to shift
the seat "with a uniform movement, and at the same time hold the seat
frame down and lock it from displacement." Furthermore, I am con-
vinced, by a fair prépondérance of the évidence, that the 'practical
operativeness of the alleged anticipating patent is successfuUy disputed.
The spécification of the Haie patent calls attention to the scope of the
Paulding & Maybeck patent in the following language :
"The idea of pivoting the baek-supporting ariiis close to the seat, and shift-
ing the seat thereby, broadly, is not new, as somewhat the same principles
are embodied In patent No. 281,129; but my improved device, by which this
resuit is aceomplished in so perfect a manner, and whereby additional advan-
tages are attained, is new, as far as I am aware, and renders what was here-
tofore an unsatisfactory, and, I may say, impracticable, device, now operatlve
with the hlghest degree of utility and comfort."
The alleged mechanical equivalency of the complainant's structure,
and the asserted impracticability of the broader Paulding & Maybeck
patent, were directly brought to the attention of the Patent Office. It
may therefore be fairly assumed that on comparison of the two pat-
ents a conclusion was reached inimical to the defendant's claim." For
this reason the presumption of the validity of the patent hère con-
sidered is entitled to increased weight. The conclusion that the two
devices are not équivalents is strongly supported by the action of the
Patent Office, and, accordingly, ail doubt upon the controverted ques-
tion of anticipation must be resolved in favor of the patent. Fraim
v. Keen (C. C.) 25 Fed. 820; Goodyear Co. v. Gardner, 4 Fish. Pat.
Cas. 224, Fed. Cas. No. 5,591. It has been suggested that the alleged
anticipatory patent was incapable of practical opération. A contrary
view does not satisfactorily appear from the proof. An assumption of
successful operativeness is negatived by the évidence. Upon this
point complainant's expert witness Hains lays much stress. He testi-
fies regarding the Paulding & Maybeck patent, in substance, that the
connections between the lower ends of the cams G, and the rocker
frame are so loose that a uniform movement is impossible, and that a
vertical displacement of the rocker frame is liable to occyr in turning
the back of the seat. This évidence based upon the Paulding & May-
EALK il EILBURN MFG. CO. T. ONEONTA, a A B. S. BT. 00. 601
fceck spécification and drawing, tending to show that the structure
there described was incapable of successfui opération, is entitled to
weight, especially in view of its corroboration by other testimony in
the case. Some doubt even as to its operativeness may be found in
the expressions of the defendant's witness, Forney, who testifies that in
1883 he saw a model seat constructed by Paulding & Maybeck. He
remarked to persons présent when the model was exhibited that he
could get up a better car seat himself, and subsequently obtained a
patent for an improvement. It also appears by the record that in
about the year 1885 the Paulding & Maybeck seat was used as an ex-
periment for a short time by the New York Central Railroad to ascer-
tain its practicability and usefulness. Soon afterwards it disappeared
from the market, and the Forney seat and complainant's structure went
into extensive use. The witness Forney admitted at the hearing that
"there might be practical objections to the Paulding & Maybeck seat
which would develop in practice." The conclusion reached upon this
point is that the défendant has failed to establish the practicability of
the structure claimed to anticipate the patent in suit, and, as the idea
of a more perfect car seat has been successfully embodied in the patent
by Haie, he must be acknowledged the real inventor. As the prior in-
vention upon which défendant relies was not capable of practical op-
ération, the combination of old éléments found in the Haie patent,
correlated for adaption to a new and useful purpose, is entitled to the
protection of the patent laws. General Electric Co. v. Wise (C. C.)
119 Fed. 926; Cimiotti Co. v. American Co., 115 Fed. 498, 53 C. C. A
230 ; American Graphophone Co. v. Leeds (C. C.) 87 Fed. 873.
Infringement. An analysis of claim i of the Haie patent, together
with an examination of the defendant's structure, discloses the in-
fringement by which complainant feels aggrieved. True, there are
dissimilar features in defendant's structure, but the détails in construc
tion, while differing in appearance, are functionally the same. Sub-
stantially the same combination of éléments arranged as presented in
claim I are found in defendant's structure. The infringing car seat
has a main frame, having cam faces or guides, slightly inclined, to en-
able the rocker frame to be reciprocated as it moves backward and for-
ward. A seat-supporting frame and suitable rack are adjusted to recip-
rocate upon the cam faces or guides so as to tilt or shift the seat. It
also appears that the arms of the seats are connected with the main
frame, and are provided with gear segments meshing with the rack
on the seat-supporting frame, which is adapted to uniformly move or
tilt the seat, locking the frame against vertical displacement. The
patent in suit is not limited to the précise construction described in the
claim, and therefore the différent appearances of the mechanism are
wholly immaterial.
I conclude that claim i is infringed by the défendant, and that the
complainant is therefore entitled to an accounting, with costs. The
patent having expired, no injunction will issue.
602 129 FEDERAL HEPORTEB.
DIAMOND MATCH CO. v. UNION MATCH CO.
(Circuit Court, D. Minnesota, Fifth Division. April 23, 1904.)
1. Patents— Suit ïor Infbingement— Preliminabt Injonction.
A court is not requlred to grant a preliminary injunction against the
Infrlngement of a patent because Its validity has been sustained by a
décision In another circuit, but Is at llberty to exercise its independent
judgment on the proofs, and will the more readlly do so where It ap-
pears that before the hearing in the prior suit the défendant therein
had ceased to bave aiiy Interest in defending It
2. Same— SurnciENCT or Pboofs.
Where the complainant's right, on the proofs, Is doubtful, aad there
Is a substantial controversy between the parties as to the validity of a
patent, which cannot well be determined wlthout a fuU hearing, the
court wlll not grant a preliminary injunction which would vvork great
flnancial injury to a défendant able to respond in damages if infrlnge-
ment should be found on the final hearing.
8. Same— Machine foe Making Matcheb.
A preliminary injunction against Infringement of the Beecher patent.
No. 389,435, for a machine for making matchea, denled on the proofs.
In Equity. Suit for infringement of letters patent No. 389,435, for
a machine for making matches, granted to E. B. Beecher September
II, i888. On motion for preliminary injunction.
Paul Bakewell, John R. Nolan, and C. D. O'Brien, for complainant.
J. L. Washburn, C. T. Benedict, and H. H. Bliss, for défendant.
MORRIS, District Judge. But for the décision and decree of
the Circuit Court of the United States for the District of New Jersey
in the case of Diamond Match Company v. Ruby Match Company
et al., 127 Fed. 341, certified copies of which décision and decree hâve
been filed herein, it is probable, I think, that this application for a pre-
liminary injunction would not hâve been made; but, if made, there
is no question in my mind but that it should hâve been denied. Coun-
sel for complainant contend — and that was their principal contention
on the hearing — that, under the proofs filed herein, said decree ought
to be conclusive upon this court as to the validity of the claims there
adjudicated, if it is in doubt on that question, and that then the only
question left to be considered is that of infringement.
That was a suit based on letters patent issued to E. B. Beecher, Sep-
tember 11, 1888, against défendants therein, who were manufacturing
under patents to Alexander Kelly — one of July 5, 1898, and the other of
July 3, 1900 — and in it claims 4, 15, and 17 of the Beecher patent were
considered and adjudicated. Claims 4 and 15 were hekl to be valid,
and défendants therein were found to be infringing those claims.
Claim 15 is not involved in this suit, and that décision can only
be invoked hère as to claim 4. It appears from the proofs here-
in that, before that case was argued and submitted to the court,
the charter of the défendant, Ruby Match Company, had, according
to the laws of Delaware, been repealed by proclamation of the Gov-
emor, and that it had, long prior to the repeal of its charter, gone out
\ 1. See Patents, vol. 38, Cent. Dig. § 484.
DIAMOND MATCH CX>. V. UNION MATCH CO. 603
of the business of manufacturing matches, so that at the time of the
argument and submission of the case, and at the time of its décision,
neither said défendant nor its ofFicers had any interest in the resuit of
the suit, except as to costs, and as to an accounting of damages and
profits by reason of past infringement by défendants prior to the date
of the decree, which accounting, as the decree shows, was waived by
complainant. It aiso appears that at the time of the argument and sub-
mission of the case, and for a long time prior thereto, the counsel for
défendants had received little, if any, assistance, and no compensation,
from the défendants therein, and that he was greatly hampered in bis
défense. And it further appears that the défense, as it concerned
claim 4 of the Beecher patent, was principally made upon the issue of
noninfringement, and upon the proper manner of construing and in-
terpreting said claim, and that the question of its validity was not
strenuously pressed by counsel for défendants therein ; he being sure
that the validity of that claim might be admitted, and yet the court
would be obliged to fmd that there was no infringement of it by the
machine there in suit. Whether thèse facts were known to counsel
at the time or not, the fact that they existed would cause me to hesi-
tate long in this case, where the validity of that claim is vigorously
denied and contested, to issue a preliminary injunction based upon
that décision.
Aside from that, however, after a careful considération of the
opinion in that case, in the light of the proofs hère, and the very
able and exhaustive arguments of counsel, extending over a period
of nearly six days, I find myself unable to concur in the reasoning
therein in so far as it relates to claim 4 of the Beecher patent. It is
not necessary or proper that I should hère and now détermine the
question of the validity of that claim, and I do not wish to be under-
stood as doing so. I only wish to say that I do not concur in the
reasoning of the learned judge in that case thereon. Indeed, if I
should. foUow his reasoning, in so far as it relates to that claim, to
what I consider its logical conclusion, I should be led to the opinion
that both Beecher and Kelly had been anticipated in the prior art.
This being the case, I feel obliged to dispose of this application upon
the proofs hère as though that décision had not been rendered. Wels-
bach Light Co. v. Cosmopolitan Incandescent Light Company, 104
Fed. 83, 43 C. C. A. 418; Mast, Foos & Co. v. Stover Mfg. Co., 177
U. S. 485, 30 Sup. Ct. 708, 44 L. Ed. 856.
Thus considering it, the language of the court in the case of Stand-
ard Elevator Company v. Crâne Elevator Company, 56 Fed. 718, 6 C.
C. A. 100, at pages 719, 720, 56 Fed., and page 101, 6 C. C. A., ex-
presses exactly my position :
"The object of the provislonal remedy is préventive, largely, and It wlll not
be granted If it is more llliely to produce than to prevent irréparable mischief.
If the controversy between the parties be substantial, and not, as to the alleged
infringer, colorable, merely, courts of equity are not disposed to adjudicate
upon the rights of the parties otherwise than according to the approved usages
of chancery, when the defendant's rights mlght, by the issuance of a writ of
injunction, be put in great jecpardy, and the complainant can be compensated
in damages. Without passing any opinion upon the complainant's right or
the defendant's infringement, It sufflces to say that, upon the proofs in the
604 129 FEDERAL REPORTER.
record, we cannot déclare that the rlght or the infringement Is so clear from
doubt as to warrant the Issuance of a preliminary Injunction. The évidence
as to the construction of claims and Infringement, upon which the court below
was called to pass, was largely and necessarily ex parte. There was no oppor-
tunity of probing the witnesses. Scientlflc expert évidence is not whoUy re-
iiable vrhen not subjeeted to the searchlight of intelligent cross-examination.
It vcould, we think, be most unsafe to détermine this controversy withont
full and orderly proof. It would be most unwise to imperil, and presumably
wholly ruin, the large capital and interests involved in the business of the
appellants, by arresting the enterprise in advance of a final decree, when the
damages which the appelles may sustain can be compensated in money. The
flnancial ablllty of the appellants to so respond has not, in our judgment, been
successfully attacked."
I hâve therefore been obliged to deny the motion for a preliminary
injunction.
WESTINGHOUSE ELECTRIC & MFG. CO. V. WAGNER ELBCTEIC
MFG. CO.
iCircuit Court, B. D. Missouri, B. D. February 13, 1904.)
No. 4,657.
1. Patents— Infringement— Elïcteical Converters.
The Westinghouse patent, No. 366,362, claim 4, for an eleetrlc con-
verter constructed with open spaces in its core, an inclosing case, and a
nonconducting fluid or gas in said case, adapted to circulate through said
spaces and about the converter for the purpose of cooling the saïue, con-
strued, and held not Infringed by a converter In which spaces were left
between the coils and between them and the inclosing core for coutain-
ing a cooling liquid, but which had no open spaces in its core.
2. Same— Construction of Claims— Estoppel.
Where a patentée and complainant, his assignée, had for a number of
years placed a certain construction on a claim of his patent, with knowl-
edge that during sueh time défendant was making and selling a device
for a similar purpose, but which did not Infringe the patent as so con-
strued, complainant is estopped to claim a différent construction for the
purpose of charging défendant with infringement.
In Equity. Suit for infringement of letters patent No. 366,362, for
an electrical converter granted to George Westinghouse, Jr., July 12,
1887. On final hearing.
Kerr, Page & Cooper, Bakewell & Cornwall, and B. F. Babbitt, for
complainant.
Fowler & Bryson, for défendant
ADAMS, District Judge. This is a suit based on the fourth daim
of letters patent of the United States No. 366,362, granted to com-
plainant's assignor July 12, 1887, for new and useful improvements in
electric converters. The relief asked for is an injunction restraining
the défendant from infringing the claim and an accounting. The pat-
ent has been in litigation before. On 'May 10, 1900, complainant in-
stituted a suit on the same patent in the Circuit Court of the United
States for the Northern District of New York against the Union Car-
bide Company (112 Fed. 417), which will hereafter be referred to as
the "Carbide Case." The défendant in this case, being the manu-
WESXINGHOUSE ELECT. & MFG. CO. V. WAGNER ELECT. MFG. 00. 605
facturer of the device claimed to constitute an infringement in the Car-
bide Case, appeared, and conducted the défense, and it is conceded is
bound by the decree therein rendered. Before final submission of that
case complainant dismissed as to claims i, 2, 3, and 5, submitting claim
4 only to the final judgment of the court. The défenses to that action
were want of patentable invention and noninfringement. Tlie trial
court decided that claim 4 of the patent was valid, and that défendant
had infringed the claim by manufacturing the device then before the
court, and this decree was afïirmed by the Circuit Court of Appeals for
the Second Circuit. 117 Fed. 495, 55 C. C. A. 230. The présent action
is based on the same claim (4), and no controversy is now made except
on the issue of infringement. Défendant contends that this présent
device is so différent from the device involved in the Carbide Case
that the judgment in that case is not res adjudicata of the présent issue
of infringement, and that in fact the defendant's device does not in-
fringe claim 4. The only question for décision, therefore, is whether
the defendant's device constitutes an infringement of claim 4 of the pat-
ent in suit. The invention of the patent relates, according to the spécifi-
cation, "to the construction of a class of apparatus employed for trans-
forming alternating or intermittent electric currents of any required
character into currents différent therefrom in certain characteristics,"
and the object of the invention, according to the spécification, is "to
proyide a simple and efficient converter which will not become overheat-
ed when employed for a long time in transforming currents of high
electro-motive force, and which will be thoroughly ventilated." The
claim in question is as foUows :
"(4) The combination, substantially as described, of an electric converter
constructed with open spaces In its core, an Inclosing case, and a nonconduet-
ing fluid or gas in sald case adapted to circulate through said spaces and about
the converter."
Complainant claims that the converter, now commonly called a
"transformer," manufactured by the défendant, infringes claim 4 in
three particulars: First, because there is an open space between the
coils themselves; second, because there is a rectangular opening in-
side of the core, through which the coils pass ; and, third, because there
are open spaces between the core and the coils. The question for dé-
termination is whether either of thèse three spaces or openings consti-
tute "open spaces in its core" within the true meaning of claim 4 of
the patent.
I hâve reached the conclusion that the defendant's transformer does
not, by reason of either one or ail of the above-mentioned features,
hâve "open spaces in its core," within the true meaning of the- patent
in suit, for the following reasons:
First. The fact that there is a space between the two coils when in-
serted in the core is not an infringement of claim 4 for the most obvions
reason that claim 4 calls for no such space, and for the quite equally
obvions reason that claim i, which is not now in controversy, does con-
tain that élément. From thèse two facts it is altogether probable that
the patentée did not himself understand or intend that claim 4 should be
construed as containing the élément. After a careful reading of the
opinion of the Court of Appeals in the Carbide Case, 117 Fed. 495, 55
606
129 FBDEEAL REPORTER.
C. C. A. 230 (which is conceded by counsel to be binding upon the
défendant in this case), I find no reason for reading the élément of
"open space between the coils" into claim 4.
Second. The drawings and description of complainant's patent, as
well as the model shown in évidence and used in argument, show a de-
vice in which the coils completely fill the opening in the surrounding
core, and in which parallel open spaces a few inches apart appear in the
substance of the core, extending throughout its body in such way as to
permit the oil in which the transformer is submerged to freely circu-
late about the surrounding core and into the interior. A longitudinal
section of this device is shown in Fig. 2 of the drawings of the patent,
which is as follows :
^^2^
k^vA^^.^■.^^^v^^'^^^^'.v^^w^■,v'.'.',^^^A^■.^w.^v.^^v^^'.Vss^!
Thèse numerous parallel open spaces so shown in the drawings and
model, and any other open spaces, whether parallel or not, cutting
through the body of the surrounding core and extending into the in-
terior opening containing the coils, are, in my opinion, the "open spaces
in its core" contemplated by claim 4. The purpose of thèse open spaces,
as disclosed by the patent and the évidence of experts, is to permit the
oil to so batlie the heat-producing surfaces of the transformer, and
to so circulate throughout the parts of the transformer, as to préserve
the insulation of the coils, and radiate the beat generated by the trans-
former's action. The use of oil or paraphine in a tank inclosing the
transformer for the purposes just specified has been long known to the
art, and is recognized by at least two patents prior in date to complain-
ant's patent. Accordingly, the invention has for its main purpose only
the physical means for effectually securing this circulation of oil. It
deals with the core itself, and divides it up into groups of plates, each
group separate from the other in such way as to make numerous paral-
lel open spaces in the core leading from its outer surface on ail its four
sides into the interior opening made for the introduction of the coils.
This interior opening, called in the patent "two rectangular openings.
WESTINGHOXTSE ELEOT. A MFQ. OO. T. WAGNBB BLECT. iiSd, OO. .607
e^ and e*, through which the wires pass," is not, in my opinion, "an
open space in its core," within the meaning of claim 4. I adopt the
views of Prof. Nipher with respect to this rectangular opening. He
says: "The core is not the core of a transformer or converter until
thèse rectangular openings are made through it." He says further:
"Thèse openings give character to the core." "It is not a core until
they exist there." "The core is in fact given such a form that it sur-
rounds the coil in a certain sensé, and the space so surrounded by the
core might be called a 'coil opening.' " The core of a transformer is
the iron part of it. It must be so constructed as to permit the introduc-
tion of the coils of wire approximately through its center. The wire
coil must be put in to make a transformer. I cannot understand how
this space left in the inside of the iron for this purpose can be an open
space in the core. It might be as well said that the space left on the
outside of the iron, between it and the incasing tank, is an open space
in the core. The defendant's device bas a space between the coils, and
has also this rectangular opening for the introduction of the coils into
the core, but, for the reasons above expressed, thèse are not "open
spaces in its core," within the meaning of the patent in suit.
Third. The defendant's device also has certain open spaces between
the core and the coils, as shown in its model in évidence. The com-
plainant's device has no such spaces. Complainant's core hugs the
coils closely, and thereby secures greater efficiency of action. But it
is contended that thèse spaces between the core and coils are the me-
chanical équivalent of the spaces in the core already considered. I can-
not agrée to this view of the case. They are physically two différent
things. One (the complainant's) has the spaces cutting the core
throughout its whole substance, thus permitting the oil to percolate
copiously into ail heat-producing surfaces. The other (defendant's)
has its spaces inside the core between its inner surface and the outer
surface of the coils, thereby releasing the grasp of the core upon the
coils, and decreasing the efficiency of its transforming action. If the
patent in suit were a broad and valid patent for a circulatory System
throughout the heat-producing parts of a transformer, the two devices
might be the mechanical équivalent ; but it is not such a patent. It is
distinctly a patent for a machine involving physical éléments, and I can-
not bring myself to think the spaces of the defendant's device between
the core and the coils are the same as the open spaces in the core of com-
plainant's device, or the mechanical équivalent thereof. They may per-
form the same function, but they do it by means of différent physical
éléments, and the defendant's device is constructed at the expense of
efficiency, which the complainant's device avoids.
The problem for years before the grant of complainant's patent was
to devise efficient means for cooling the heat-producing surfaces of the
transformer, and for protecting the insulation of the coils. The com-
plainant invented the physical means shown in claim 4. The défendant
adopted the totally différent physical means shown in its model. In
view of the foregoing, I cannot construe the opinion in the Carbide Case
as giving the complainant the monopoly of ail means by which the ex-
ternal and internai surfaces of the heat-producing parts of a converter
can be cooled. This view would preclude the use of any and every
608 >:y, 129 FEDERAL BŒEOETEH.
other devîce lookîng towards the accomplishment of the maîn object,
namely, the circulation of oil througiiout the heat-producing parts of a
converter. The opinion in that case uses the language thait the patentée
was "entitled to claim the means" for accompHshing that object, mani-
festly referring to the means claimed in claim 4, and described in the
patent, namely, of opening up the core itself in the way already pointed
out, leaving ail other means (not the mechanical équivalent, however)
open to the free use of the public.
I think the construction which I hâve already placed on claim 4 is
the one which complainant itself placed upon that claim for years, and
in fact until the spring of 1903, when it moved in this case for a rule to
punish the défendant for contempt.
In 1887, on the same date the patent in suit was granted, the patentée,
George Westinghouse, Jr., secured a British patent for a device of simi-
lar construction to that employed in the defendant's transformer. The
drawings and claims of that British patent show a transformer with
open spaces between the coils and between the coils and the core.
Claims 10 and 11 of that patent distinctly call for "strips of insulating
material extending along the sides of the coils and separating the same
from the surrounding core." The American and British were applied
for and secured at the same time. Accordingly, it is obvions that the
patentée had in mind the construction involved now in defendant's de-
vice, and he deemed it important enough to be made the subject of a
separate patent. To give him now the monopoly of this construction
by virtue of his American patent would, in my opinion, give him some-
thing which he intentionally failed to claim when he secured it, and
which he obviously then thought should be specifically claimed in order
to secure it.
Again, it clearly appears that the défendant was engaged in making
its transformer for some years prior to the hearing of the Carbide Case,
and that the witnesses in that case knew of this fact. They certainly
knew that défendant was manufacturing a transformer with open
space between the coils and a rectangular opening into the core for the
insertion of the coils. But no attempt was there made to hold thèse
features to be an infringement of claim 4 of the patent. Complainant
there contented itself by claiming the parallel open spaces throughout
the core itself to be an infringement. After the judgment was ren-
dered in that case, the complainant, with fuU knowledge that the de-
fendant was manufacturing transformers with the open spaces and
openings now claimed to be an infringement of claim 4, never sought
to hold the défendant guilty of contempt for violation of the injunctive
order in that case. After that injunctive order became final, the de-
fendant conformed thereto by changing its transformer so as to close
up ail the parallel open spaces throughout the core itself, leaving the
core one solid mass of iron plates with no open spaces in it, but retaining
in its structure the open spaces between the coils and between the core
and coils as before, and bas continued to manufacture such transform-
ers, so modified, from that day to this. The proof shows no claim that
the use of this modified structure constituted a violation of the injunc-
tive order in that case.
WESTINGHOUSB KLECT. <fe MFG. CO. r. WAGNEE ELEOT. MFG. OO. 609
Soon afterwards the présent suit was instituted, and a preliminary în-
junction was granted against the défendant restraining it from infringe-
ment. This restraining order was consented to by défendant under
tlie belief that it related exclusively to the same kind of a transformer
which was declared an infringement in the Carbide Case, and I am satis-
fied that counsel on both sides so regarded it at the time. In due time
after the institution of this suit the défendant filed an answer admitting
that the judgment in the Carbide Case was an estoppel against it as
to the validity of claim 4, and consenting to a final decree enjoining it
from infringing that claim. At about this juncture complainant and
défendant, by counsel, came to an understanding that neither party
should take any évidence until further notice. The case remained in
this condition for about a year; and in the meantime défendant re-
frained from manufacturing or selling the transformer condemned as
an infringement in the Carbide Case, but continued to manufacture and
sell the transformer now claimed to be an infringement. This condi-
tion of things remained until May, 1903, when a motion was made to
punish défendant for contempt on the ground that the manufacture and
sale of its présent transformer was a violation of the preliminary injunc-
tion granted in this case. This motion was denied, and since then
proofs hâve been taken, and the cause is now submitted for a final de-
cree. Ail of thèse facts convince me that complainant's présent claim
that defendant's présent transformer is an infringement of claim 4 of
its patent is an afterthought on its part, and that from the date of its
British patent, in 1887, to the date of filing the motion to punish défend-
ant for contempt, in May, 1903, the complainant continuously inter-
preted claim 4 of its patent as not covering the defendant's device now
in question. This seems to me to be such a contemporaneous and
continuons construction put upon claim 4 of the patent by complainant,
and one upon which défendant has innocently acted, that complainant
ought to be estopped at this late day from asserting the contrary.
The patent in suit has only about five months longer to run. It ex-
pires on July I2th of this year. To now enjoin the défendant, after it
has been manufacturing, selling, and advertising the transformer com-
plained of for a period of about eight years, as shown by the testimony,
and imder circumstances disclosed by this record, would, in my opinion,
be grossly inéquitable. My conclusions are:
1. That the transformer now being used by the défendant is not,
within the true meaning of the patent itself, an infringement of claim 4.
2. The construction which I hâve placed upon this claim is in har-
mony with the contemporaneous and continuons construction placed up-
on the same claim by the patentée himself, and by the complainant.
3. The complainant, by its own conduct, is estopped from claiming
the contrary.
The decree will be that the défendant be enjoined from manufactur-
ing or selling the transformer like that declared an infringement in the
Carbide Case, and for the usual accounting, but it will be so framed as
to exclude from its opération the transformer now manufactured by
the défendant, which has afforded the only issue before the court in this
case.
129 F.— 39
610 129 FEDERAL EEPOBTBE.
I am not disposed to work out the question of costs, though the stat
ute relating to disclaimer (section 4922, Rev. St. U. S. [U, S. Comp. St.
1901, p. 3396]) as that involves a lengthy considération of the question
whether the complainant should npt, before bringing this suit, hâve en-
tered a disclaimer as to claims i, 2, and 5 of the patent. I think the
equity of the matter can be reached by a direct order concerning the
costs. The complainant had a right, as long as the défendant was
making use of the transformer adjudged to be an infringement in the
Carbide Case, to institute its suit for an injunction and accounting by
reason thereof; and, notwithstanding the fact that défendant admit-
ted the infringement in its answer, the complainant should not be ad-
judged to pay ail of the costs of this proceeding. I think an équitable
disposition of this matter is to require each of the parties to pay its own
costs, and it will be so ordered.
MISSOURI PAC. RY. CO. v. WESTERN ASSUR. CO.
(Circuit Court, D. Kansas, First Division. April 28, 1904.)
No. 8,152.
1. INSUBAKCE— Conditions— Proofs of Loss— Filing— Time.
A condition in a fire policy requiring proofs of loss to be furnished with-
in CO days afforded a reasonable time to enable assured to comply tbere-
with.
2. Same— Waivee.
Where a fire policy provided that proofs of loss should be furnished
within 60 days from the date of loss, and declared that an extension of
such period should be evidenced by a writlng attaehed to or Indorsed on the
policy, and that the insurer should not be held to hâve waived any for-
feiture provided for in the policy, or any condition thereby Imposed on
insured by any proceeding on the part of the company relating to ap-
praisal or examination of the property insured, a forfeiture for assured's
failure to furnish proofs of loss within the time required, in the absence
of such written extension, was not waived by an acknowledgment of no-
tice of loss and the commencement and continuation of negotiations for
settlement without requiring proofs to be made.
Waggener, Doster & Orr, for plaintiffs.
Sylvester G. Williams and Osmond & Cole, for défendant.
POLLOCK, District Judge. This is an action at law, brought to
recover on a contract of Insurance. A copy of the contract relied upon
by plaintiff is attaehed to and made part of the pétition. The plain-
tifï, in its pétition, allèges a compliance with ail the terms and condi-
tions of this contract requisite on its part to be performed in order to
establish its right to a recovery, except that condition of the contract
requiring plaintiff to make and furnish proofs of loss. In this respect
the pétition, by way of pleading an avoidance of the terms and condi-
tions found in the contract with respect to proofs of loss, states :
"Said plaintiff further says that it bas performed ail the conditions and
terms of said contract except the condition thereln set out for the making
«Bf proofs of loss to said assurance company within sixty days after the
IT 2. See Insurance, vol. 28, Cent. Dlg. §§ 1405, 1406.
MISSOURI PAO. ET. CO. V. WESTERN ASSTJE. 00. 611
occurrence of the loss whieh sald contract of insurance eovers. Sald plaln-
tifC was ready to make and did make ail proofs of Iosb required Taj said de-
fendant Company withln sald period of 60 days, but the further making of
said proof was waived by sald défendant by the acknowledgment of notice
of the occxn-rence of the loss of sald building by flre, and the commencement
and continuanee of negotiations for a settlement of sucli loss wlthout the
making of further proofs thereof, whereby said plaintiff was led to believe
that said défendant did not désire and would not require further proof to
be made."
The conditions expressed in the contract relating to proofs of loss
and the maintenance of an action upon the policy are as follows :
"If flre occur, the insured shall glve immédiate notice of any losa thereby
in writing to thls company, * • * and wlthin sixty days after the flre,
unless such time is extended in writing by this company, shall render a
statement to this company, signed and sworn to by sald Insured, stating the
knowledge and belief of the insured as to the time and orlgin of the flre;
the interest of the insured and of ail othors in the property ; the cash value
of each item thereof and the amount of loss thereon ; ail Incumbrances there-
on ; ail other Insurance, whether valid or not, coverlng any of sald prop-
erty ; and a copy of ail the descriptions and schedules in ail policies, any
changes in the title, use, occupation, location, possession, or exposures of
said property since the issuiug ot this policy ; by whom and for what pur-
poses any building herein deseribed and the several parts thereof were occu-
pied at the time of lire, etc."
"This company shall not be held to hâve waived any provision or condition
of this policy or any forfeiture thereof by any requirement, act, or proceed-
ing on its part relating to the appraisal or to any examination herein pro-
vided for ; and the loss shall not become payable until slxty days after the
notice, ascertainment, estimate, and satistactory proof of the loss herein re-
quired hâve been received by this company, including an award by appraisers
when appraisal has been required.
"No suit or action on thls policy, for the recovery of any claim, shall be
sustalnable in any court of law or equity until after fuU compliance by the
Insured with ail the foregoing requirements nor unless commenced withln
twelve months next after the flre.
"This policy is made and accepted subject to the foregoing stipulations
and conditions, together with such other provisions, agreements, or condi-
tions as may be endorsed hereon or added hereto, and no offlcer, agent, or
other représentative of this company shall bave power to waive any provi-
sion or condition of this policy except such as by the terms of this policy
may be the subject of agreement endorsed hereon or added hereto, and as
to such provisions and conditions no offlcer, agent or représentative shall
hâve such power or be deemed or held to hâve waived such provisions or
conditions unless such waiver, if any, shall be written upon or attached
hereto, nor shall any privilège or permission affecting the insurance under
this policy exist or be claimed by the insured unless so written or attached."
In short, the above-quoted provisions of the contract of insurance
in this case provides: (i) What "proofs of loss" under the policy
shall contain; (2) that such proofs of loss shall be furnished by the
assured to the insurer within 60 days from the date of loss, unless
this specified period of time is extended ; (3) that an extension of such
period of time shall be evidenced by writing to that effect; (4) such
written extension of time shall be attached to or indorsed upon the
contract of insurance; (5) that the company shall not be held to hâve
waived any forfeiture provided for in the policy, or any condition
thereby imposed upon the insured by the terms of thg policy by any
requirement or proceeding on the part of the company relating to any
appraisal or examination of the property insured provided for in the
612 129 FEDERAL EEPOETEB.
policy; (6) that loss under the policy shall not become payable until
6o days after "proofs of loss" are furnished ; (7) that no suit or action
shall be brought on the contract of insurance until the assured shall
hâve complied with ail the requirements and conditions of the contract
précèdent on his part to be performed.
The pétition of plaintiff, in légal effect, by the plea of waiver, admits
(a) that "proofs of loss" were not furnished within 60 days from the
date of the fire, as required by the terms of the policy; (b) that no
extension of time in which to furnish such proofs of loss was granted
by the insurance company or its agents to the assured in writing;
(c) that no such "proofs of loss" as are provided for in the contract
hâve been furnished. To this pétition the défendant bas filed a gên-
erai demurrer. Can plaintiff recover in this action at law on the con-
tract of insurance under the allégations of its pétition ? The solution
of this problem must dépend on the construction of the terms employed
in the contract and plaintiff's compliance with such terms and con-
ditions, unless compliance lias been waived by the défendant. In re-
gard to the conditions imposed upon the assured to furnish "proofs
of loss" as required by the terms of the contract of insurance, it has
been held :
•'The condition requiring service of proofs of loss Is one wholly for the
benefit of the Insurer. The assured contracts to perform it, and until he
does so he has no légal clalm against the insurer, and no cause of action.
The proofs thus provided for are the légal évidence of the loss. The per-
formance of the condition is not a thing to be done at the request of the in-
surer. The company may remain silent, and, until proofs are furnished, it
cannot be called upon to pay the loss." Armstrong v. The Agricultural In-
surance Co., 130 N. Y. 500, 29 N. E. 991.
In Fournier v. German-American Ins. Co., 23 R. I. 36, 49 Atl. 98, it
is said :
"The flling of 'proofs of loss,' so called, Is a perfectly reasonable condition
in order to protect the company from fraud, and covers a great deal more
than stating that the loss has occurred and glving the value of the property
destroyed. It embraces, among other things, a statement of any changes
in the title, use, occupation, location, possession, or exposures of the prop-
erty slnce the issulng of the policy. It spécifies by whom and for what pur-
pose the building described in the policy, and each part thereof, was occu-
pied at the time of the tire ; and it must also set forth the knowledge and
belief of the insured as to the time and origin of the lire, and, unless a sworn
statement as to thèse things is furnished by the assured, It would be a com-
parative easy matter to defraud the insurance company."
Such being the conditions imposed upon the assured to furnish
"proofs of loss" to the insurer as found in lais contract of insurance, and
such being the character of the "proofs of loss" so required to be
furnished, the contract period of 60 days from the date of loss is a
reasonable time to enable the assured to comply with the conditions
imposed. However, in the event this period of time for any reason
proves insufficient, and an extension of time is desired by the insured,
the parties to the contract liave expressly stipulated, not that a waiver
on the part of the company of the failure of the assured to furnish
"proofs of loss" within the 60 days required by the terms of the con-
tract may not*be shown, but, in order that the entire engagement and
obligation of the company may rest in writing, and not in the fickle
MISSOURI PAC. BY. CO. V. WESTERN ASSUR. CO. 613
memory of interested parties or witnesses, it is stipulated that such
waiver, if any, must rest in a writing to that efFect, executed in such
manner as will bind the company. That such is the contract existing
between the parties there is no room to doubt. That this contract has
not been complied with by the assured stands admitted.
Has nonperformance of this condition by assured been waived by
défendant? Référence to the adjudicated cases will show not a little
"judicial législation" on this subject of Insurance in many of the
States, doubtless occasioned from the hardship or supposed hardship
resulting to the assured from an enforcement of the contract of in-
surance only according to its terms and conditions as found therein
written, and by way of avoidance of such supposed injustice to as-
sured. However, the fédéral Suprême Court has not indulged in this
"judge-made" law, but has uniformly and consistently held that a
policy of Insurance, where plain and unambiguous in terms, is a con-
tract between the parties, to be enforced only according to its provi-
sions, and in the same manner as any other contract in writing. In
the case of Impérial Insurance Company v. Coos County, 151 U. S.
452, 14 Sup. Ct. 379, 38 L. Ed. 231, Mr. Justice Jackson, delivering
the opinion of the court, said :
"Contracts of Insurance are contracts of indemnity upon the terms and
conditions specifled in the policy or policies, embodying the agreement of the
parties. For a comparatively small considération the Insurer undertalses to
guaranty the insured agalnst loss or damage, upon the terms and conditions
agreed upon, and upon no other; and when called upon to pay, in case of
loss, the insurer therefore may justly inslst upon the fulflllment of thèse
terms. If the insured cannot brlng himself wlthin the conditions of the pol-
icy, he is not entitled to recover for the loss. The terms of the policy con-
stitute the measure »f the insurer's liabillty, and, in order to recover, the
assured must show himself withln those terms; and if it appears that the
contract has been terminated by the violation on the part of the assured of
its conditions, then there can be no right of recovery. The compliance of
the assured with the terms of the contract is a condition précèdent to the
right of recovery. If the assured has violated or failed to perform the con-
ditions of the contract, and such violation or vvant of performance has not
been waived by the insurer, then the assured cannot recover. It is imma-
terial to consider the reasons for the conditions or provisions on which the
contract is made to terminate, or any other provision of the policy which
has been accepted and agreed upon. It Is enough that the parties hâve made
certain terms, conditions on which their contract shall continue or termi-
nate. The courts may not make a contract for the parties. Their function
and duty eonsists simply in enforcing and carrying out the one actually
made."
The latest expression of that court upon this subject is found in
Assurance Co. v. Building Association, 183 U. S. 308, 22 Sup. Ct.
133, 46 L. Ed. 213, wherein Justice Shiras, delivering the opinion of
the court, says :
"What, then, are the principles sustained by the authorities, and appli-
cable to the case in hand? They may be briefly stated thus : That contracts
in writing, if in unambiguous terms, must be permitted to speak for them-
selves, and cannot by the courts, at the instance of one of the parties, be
altered or contradicted by paroi évidence, unless in case of fraud or mutual
mistake of facts ; that this principle is applicable to cases of Insurance con-
tracts as fully as to contracts on other subjects ; that provisions contained
in flre Insurance policies that such a policy shall be void and of no efCect if
other iusurance is placed on the property in other companies without the
614 129 FEDERAL EEPOETER.
knowledge and consent of the company are usual and reasonable; that tt
Is reasonable and compétent for the parties to agrée that such knowledge
and consent shall be manifested in writlng, either by indorsement upon the
policy or by other writing ; that it is compétent and reasonable for iasurance
companles to make it matter of condition in their policies that their agents
shall not be deemed to hâve authority to alter or contradict the express
terms of the policies as executed and delivered; that where flre Insurance
policies contain provisions whereby agents may, by writing indorsed upon
the policy or by writing attached thereto, express the company's assent to
other iusurance, such limited grant of authority is the measure of the agent's
power in the matter, and where such limitation is expressed in the policy,
executed and aceepted, the insured is presumed, as matter of law, to be
aware of such limitation; that Insurance companies may waive forfeiture
caused by nonobservance of such conditions; that, where waiver is relied
on, the plaintifC must show that the company, with knowledge of the facts
that occasioned the forfeiture, dispensed wlth the observance of the condi-
tion ; that where the waiver relied on is the act of an agent it must be shown
either that the agent had express authority from the company to make the
waiver, or that the company subseauently, with Itnowledge of the facts,
ratifled the action of the agent."
The opinion is lengthy, and exhaustive of the subject discussed, and
was evidently prepared with the intent of clearly setting forth the views
of that court on the nature of a contract of insurance and the ruies of
law governing its construction and enforcement. The question there
considered, while not identical with that at bar, yet is of so close an-
alogy as to furnish a rule for décision hère.
So, in the case at bar, it is held, the assured not having furnished
"proofs of loss" within the period of 60 days from the date of the
fire, as required by the terms of the policy, it would, in my judgment,
be compétent for plaintifï to allège and show, if possible to so do, that
défendant company, through its duly authorized officers or agents,
had waived such breach of condition by extending the time for per-
formance in the manner stipulated in the contract — that is, by a writing
to that efïect — or had in writing waived performance of the condition
requiring assured to furnish "proofs of loss" either by denying lia-
bility under the contract in advance of "proofs of loss," thus repudiat-
ing its contract on its part, or by in any manner in writing notifying
assured that "proofs of loss" would not be required in accordance with
the condition imposed in the policy. But such is not the waiver
pleaded in the pétition. The waiver of the breach of a condition to be
performed under the express terms of the contract in this case by as-
sured, précèdent to the maintenance of this action for a recovery upon
the contract, which the parties bave stipulated shall rest in and be
evidenced only by writing, is hère attempted to be predicated upon acts
and conduct of the défendant necessarily resting in paroi, and not evi-
denced by writing. This, in my judgment, may not be donc; nor do
I think, from a careful examination of the case of Thompson v. Phcenix
Insurance Co., 136 U. S. 287, 10 Sup. Ct. 1019, 34 L. Ed. 408, that
case in any wise conflicts with the view hère expressed.
It follows the demurrer to the pétition must be sustained. It is so
ordered.
SCOTT V, STOOKHOLDEBS' OIL 00. 61B
SCOTT V. STOCKHOLDERS' OIL CO. et aL
(Circuit Court, E. D. Pennsylvanla. April 28, 1904-)
No. 1,
1. Fedebal Cotibts—Peocess— Service— Plea in Abatembnt — Afeidavit. '
Where, In an action against a foreign corporation, a plea In abate-
ment was filed on Its behalf to vacate the service, whlch averred that the
person on whom process was served was nelther an agent nor oflBcer of
the corporation, an affidavit by the person so served, as required by eq-
uity rule 31, that the averments in the plea were true in fact, and that
It was not interposed for delay, was Insufficient, since the plea on its
face showed that such person had no authority to make it on behalf of
the corporation.
2. Same.
Where the return of service on an allas summons in an action against
a foreign corporation showed service on the corporatlon's alleged rési-
dent agent on January 20, 1904, a plea In abatement to quash the serv-
ice, verified on March 3, 1904, and recitlng that the person served "is"
not an agent or officer of the corporation, was insufficient, since it did
not négative the fact that he was such agent on the date of service.
In Equity. Motion to strike ofl plea in abatement.
See I20 Fed. 698 ; 122 Fed. 835.
Samuel J. Houston and Lawrence W. Baxter, for complaînant.
Joseph R. Embery, for Théodore J. Durable.
J. B. McPHERSON, District Judge. The history of this litiga-
tion is as follows : The service of the summons on the Durable De-
velopment Company was made upon its secretary and gênerai man-
ager, but was set aside by Judge Dallas for the foUowing reasons:
"The Dumble Development Company is admittedly a Delaware corporation.
The return does not state, nor does it appear from the record, that it is an
inhabitant of this district, or bas in any manner become subjeet to the juris-
dlction of this court; and therefore, even if it be true, as stated, that the per-
son served was, when served, 'secretary and gênerai manager of said Compa-
ny,' yet the return is legally insuffleient, because it does not affirmatively
show ail that is requlslte to constitute a valid service." Scott v. Stockhold-
ers' 011 Co. (C. C.) 122 Fed. 835.
An alias summons was thereupon issued, and upon this writ the
marshal has made return as follows:
"January 20th, 1904, at Phlladelphla, in my district, served the within writ
on the Dumble Development Company by giving a true and attested copy
thereof to Tlieodore J. Dumble, the registered agent of said company, as will
appear by the certiflcate of the Secretary of the Commonwealth of Pennsyl-
vanla, hereto annexed and made part of this return; and at the time of said
service I made known to said Dumble the contents of said writ. I first tried
to serve said writ at 1217 Filbert street, Phlladelphla, the deslgnated office
or place of business of said Dumble Development Company, but I was una-
ble to find said Dumble, its registered agent, at said place. I then served the
H 1. Service of process on foreign corporations, see note to Eldred T. Amer-
ican Palace-Car Co., 45 C. C. A. 3.
616 129 FEDERAL REPORTER.
sald wrlt as above speclfled at the dwelling house of sald Durable, 1519 Ruan
Street, Frankford, Philadelpbia."
The certificate of the vSecretary of the Commonwealth, attested by
the seal of the state, déclares under date of January 19, 1904 :
"I do liereby certify that the records of this department show, that on No-
vember 5, 1902, the Dumble Development Company, a corporation of the state
of Delaware, flied In this office a statement of office and agent in compliance
with our aet of April 22, 1874 [P, L. 108], entitled 'An Act to prohibit foreign
corporations from doing business In Pennsylvania, without having known
places of business and authorized agents,' deslgnating in said statement as
agent Théo. J. Dumble, 1217 Filbert street, Philadelphia; that after careful,
thorough and diligent search through the records of this department, I haye
been unable to find any subséquent statement filed by sald Company or any
substitution or revocation of the authority of the above named Théo. J. Dum-
ble, as agent of said corporation."
Section I of the act referred to in the secretary's certificate pro-
hibits any foreign corporation from doing business in Pennsylvania
until it has established an office and appointed an agent for the trans-
action of business in this state. Section 2 is as follows:
"It shall not be lawful for any such corporation to do any business in this
commonwealth, until It shall hâve filed in the office of the .Secretary of the
Commonwealth a statement, under the seal of said corporation, and signed by
the président or secretary thereof, showing the title and object of said corpo-
ration, the location of its office or offices, and the name or names of its author-
ized agent or agents therein; and the certificate of the Secretary of the Com-
monwealth, under the seal of the commonwealth, of the fllmg of such state-
ment, shall be preserved for public Inspection by each of said agents, in each
and every of said offices." P. L. 1874, p. 108.
Upon such an agent service of a writ of summons may be made
by virtue of the act of 1903, § 2, cl. "g" (P. L. 139) :
"In the case of a registered foreign corporation, partnershlp limited, or
joint stock eompany, by serving its duly registered attorney as in the case of
a summons Issued against him personally, or by leaving a true and attested
copy thereof for him at the registered place. If he be not found there during
the usual business hours of any business day, with the person for the time
being in charge of the business carried on at such place."
The return of the marshal, so far as it goes, is in compliance with
this statute, feut the development eompany, being of opinion that es-
sential averments of fact are still lacking, and that the facts that are
averred are not correctly stated, has filed this plea in abatement :
"The Dumble Development Company, one of the above-named défendants,
specially appearing under protest for the purpose of this plea, and for no other
purpose, says that this défendant has not properly been served with process;
that Théodore J. Dumble is not its agent or officer; that it is not a corpora-
tion organized under the laws of the state of Pennsylvania, nor a citizen nor
inhabitant of the state of Pennsylvania, nor does it hâve an office or agency
In the state of Pennsylvania, nor does it transaet business therein, nor does
it hâve any property therein; but that it is a corporation organized under the
laws of the state of Delaware, and residing in Wllmington, in the district of
Delaware— ail of which matters and things are liue."
To which Théodore J. Dumble makes this aifidavit :
"Théodore J. Dumble, being duly sworn, says: 'I am the person upon whom
service of process was made as agent of the Dumble Development Company.
The averments contained in the foregoing plea are true in tact, and the plea
is not iuterposed for delay.' "
BCOTT V. STOCKHOLDBBfl' OIL CKX 61Î
The présent motion to strike ofï the plea is founded upon equity
rule 31, which déclares that:.
• "No demurrer or plea shall be allowed to be flled to any bill, unless upon
a certiflcate of counsel that In his opinion it is well founded in point of la\r,
and supported by the affidavit of the défendant that It Is not Interposed for
delay, and, if a plea, that it is true In point of fact."
It is contended on behalf of the complainant that the présent affi-
davit does not comply with this rule, because it shows upon its face
that it was not made by any person authorized to speak in behalf of
the development company. I think this contention is sound. The
averment of the plea is that Théodore J. Dumble is not the com-
pany's agent or officer, and, assuming this to be true, as must be as-
suraed for the purpose of this motion, it is also true that he discloses
no authority to make the affidavit in the defendant's behalf. The
company can only speak by one of its agents or officers, and, so far
as appears from the plea, the affiant is a stranger to the corporate
afifairs. It may also be noted that the plea is further defective in this
respect: It avers that Théodore J. Dumble "is" not its agent or
officer — meaning, of course, upon March 3, 1904, when the affidavit
was subscribed, whereas the relevant date to which the plea should
refer is January 2oth, the day when the alias summons was served.
The plea is therefore defective in both particulars, and might be
stricken from the files without further ceremony. But I am unwill-
ing to take a step that might be unduly harsh, and shall therefore
permit the development company to supply the defects of the plea
on or before May I5th.
It may be well for the complainant to consider at this stage of the
case whether he has sufficiently complied, or can hereafter sufficiently
comply, with the nde that was laid down in St. Clair v. Cox, 106 U.
S. 350, 1 Sup. Ct. 354, 37 L. Ed. 223, concerning what must appear &a
the record in the case of suits against foreign corporations. The sub-
ject is also considered in Earle v. Chesapeake & Ohio Railway Ce, 127
Fed. 235, a récent case decided in this court. Otherwise much needless
labor and expense may be incurred in the hearing of the suit, while the
court may be compelled in thç end to dismiss the proceeding of its own
motion for want of jurisdiction.
If the plea is not amended on or before May isth, the clerk
is directed to strike it from the files.
61S 129 FBDSBAL BEFOBTEB.
JONES V. ADAMS EXPRESS CO.
(Circuit Court, E. D. Kentucky. February 27, 1904.)
No. 429.
1. Eemovai. op Causes— Suiticiency of Pétition— Alleging Diveesitt of
CiTIZENSHIP.
The fact that there are a large number of parties plaintiff or défend-
ant does not take a case ont of the well-settled rule that, in order to
show the jurlsdiction of the fédéral court on removal the pétition there-
for must allège the citizenship of each party. It is not sufflcient to
allège a diversity of citizenship In gênerai terms.
On Motion to Set Aside Order Overruling Motion to Remand to
State Court.
Morton, Webb & Wilson, for plaintiff.
Breckinridge & Shelby, for défendant.
COCHRAN, District Judge. It is well settled that a party bring-
ing a suit in a fédéral court or seeking to reniove one brought in a
State court thereto must show afiSrmatively in his pétition or bill in
the one case and in his pétition for removal in the other case that
the fédéral court has jurisdiction thereof by alleging the facts essen-
tial to give it jurisdiction. If he does not show this, his pétition or
bill in the one case will be dismissed, or the cause in the other case
will be remanded to the state court, and that by the court upon its
own motion upon becoming aware of the failure to show jurisdic-
tion. It is also well settled that if the ground of fédéral jurisdiction
relied on is that of diversity of citizenship, the party suing or remov-
ing must allège not simply that the parties are citizens of différent
States, but the states of which they are citizens. In the case of Cam-
eron v. Hodges, 127 U. S. 325, 8 Sup. Ct. 1155, 32 L. Ed. 132, Mr.
■ Justice Miller said :
"This court has always been particular In requlring a distinct statement of
the citizenship oî the parties and of the particular state In which it Is claimed,
in order to sustain the jurisdiction."
In the case of Benjamin v. City of New Orléans, 74 Fed. 417, 20
C. C. A. 591, it was held that a bill filed in the United States Circuit
Court of Louisiana by the assignée of certain claims against the city
of New Orléans, which alleged that each of the assignors of said
claims were "citizens, respectively, of states other than the state of
Louisiana," was properly dismissed because it did not set forth the
states of which said assignors were citizens. Judge Speer said :
"The défendant is entitled to actual and definite notice in the plaintiff's
pleadlng of the citizensliip or alleged citizenship of each assigner. No fact in
the pleadlng of the plaintiff in thèse courts can be more material, for the au-
thority of the court to act dépends upon it. It was not sufficient, then, to say
that the assignors were 'citizens, respectively, of states other than Louisiana,
IT 1. Averments of citizenship to show jurisdiction In fédéral courts, see
note to Ship v. Williams, 10 C. C. A. 261.
See Removal of Causes, vol. 42, Cent. Dig. §§ 170, 172, 173.
JONES V. ADAMS EXPBESS 00. 6l9
and compétent, as sueh citizens, to maintaln suit lu thls court' Jurisdlctlon
cannot be inferentially averred."
The gênerai allégation of diversity of citizenship is not sufficient
to give the fédéral court jurisdiction, in the absence of a motion to
make it more spécifie. It is simply sufificient to permit an amend-
ment making it more spécifie. This was ail that was decided in the
case of Stadlemann v. White Line T. Co. (C. C.) 92 Fed. 209. If an
amendment had not been ofïered in that case, making the pétition
for removal spécifie by alleging the particular state of which the
plaintiflf in the action was a citizen, the motion to remand would
bave been sustained. So far there can be no question as to the cor-
rectness of the positions taken.
The question which this case présents is whether the numerous-
ness of the parties plaintifif or défendant makes any difiference. It is
alleged in the pétition for removal that the petitioner and défendants
in the action are more than 3,000 in number. The plaintifif had a
right to sue them ail. Under the décision in the case of Adams Ex-
press Co. V. Schofield (Ky.) 64 S. W. 903, 23 Ky. Law Rep. 1120, he
had a right to sue them under the name of Adams Express Company,
and the cause was not removable unless ail of them were citizens of
States other than Kentucky. The défendants daim that to compel
them tO' set out the states of which each of them are citizens will be
a hardship on them, and a practical déniai of the right to coma into
the fédéral court. Is the fact of the numerousnéss of the petitioners
and the hardship that it will be upon them to require them to make
their pétition for removal more spécifie sufificient reason for this
court taking jurisdiction of this cause, nothing else appearing than
what is alleged in the pétition for removal? Two reasons occur to
me why, in a case of this kind, it is not sufificient reason. It will
simply postpone the hardship to a later stage of the proceeding. It
will certainly be imposed upon them by a déniai of the gênerai allé-
gation as to the citizenship of the petitioners. The other is that
it takes from the petitioners the burden of showing that this court had
jurisdiction, and imposes on défendant to the removal the burden of
showing that it has not jurisdiction, thereof. Certain advantages
accrue to défendants by so many of them being able to do business
together without incorporation. If it were not so, they would not
transact business in this way. Certain disadvantages grow out of
it also. They should take the disadvantages with the advantages —
the bitter with the sweet. I think the fair inference from- the décisions
in the cases of Chapman v. Barney, 129 U. S. (yJJ, 9 Sup. Ct. 426, 32
L. Ed. 800, Great So. F. P. H. Co. v. Jones, 177 U. S. 449, 20 Sup.
Ct. 690, 44 L. Ed. 482, is that the numerousnéss of parties plaintifif
or défendant is not sufificient to take a case out of the well-settled
rules heretofore stated.
I think, therefore, that I erred in overruling the motion to remand.
The order overruling it will therefore be set aside. The petitioners
raay file an amendment setting forth the states of which each of them
is a citizen, if they so désire; otherwise the motion to remand will
be sustained.
6201 129 FBDBBAL BEPOETBB.
In re EVERLETH.
(District Court, D. Vermont. Aprll 19, 1904.)
1. BANKBtrPTCT— Exemptions— Wearing Apparel.
Neither a watch and chain, nor a sword and belt, constltutlng a part
of Masonlc regalia, are exempt to a bankrupt as wearing apparel under
the Vermont statute; nor are the watch and chain exempt as a time-
piece, constituting a part of the tools of his trade as a barber, where
among such tools there was also a clock; but a bat, although also a
part of his regalia, Is exempt.
In Bankruptcy.
Anthony F. Schwenk, for bankrupt.
Clarke C. Fitts, for trustée.
WHEELER, District Judge. The bankrupt appears to hâve been
a barber, and to hâve had the tools and implements proper and neces-
sary for a barber's shop, including a clock; and he also had a watch
and chain, worth $20, and Masonic regalia, consisting of a hat, belt,
and sword, of the value of $35, which he claims to be exempt. The
clock bas been turned over by the bankrupt to the trustée. The
questions remaining are as to the watch and chain and the regalia.
The watch and chain are claimed to be exempt as constituting a
timepiece, but they do not seem to be as necessary for that purpose
as the clock; and a watch and watch chain hâve usually been un-
dcrstood to be attachable, and not exempt, under the laws of this
state. They are not in any sensé any part of the barber's outfit, nor
of the wearing apparel, which is exempt by name in the state statutes.
Such a question as to articles similar to the Masonic regalia was
before the Suprême Court of the state in Sawyer v. Sawyer, 28 Vt.
24g. The articles there were a sword, sword belt, and epaulets of
the intestate, worn by him when in uniform as a purser in the United
States Navy ; and a watch, ornamental key, and chain, a finger ring,
and a breastpin worn by him usually, in his lifetime. It was held by
a majority of the court that the sword and belt, watch and chain,
and finger ring were not a part of the wearing apparel, and did not
pass as such to the widow, but remained a part of the estate, and that
the epaulets, with the coat on which they were, should go as wearing
apparel to the widow. That question as to the meaning of the words
"wearing apparel," on decreeing distribution between the widow, the
heirs, and creditors, was very similar to the one hère as tO' the mean-
ing of the same words in setting out property between the bankrupt
and creditors.
That décision has never, so far as has been pointed out or noticed,
been overruled in any respect. As applicable hère, it disposes of ail
questions except as to the hat. This hat is understood to be such a
one as, when worn, would answer ail the purposes of a hat, and
would be, of itself, wearing apparel. It may be used only for the
purposes of the order to which the bankrupt belonged; but, when
so used, it would be for a covering or protection of the head from
T 1. See Bankruptcy, vol. 6, Cent. Dig. § 659.
IN RE m'OBACKEN A m'lEOD. 621
the weather, as hats ordinarily are that constitute a part of the wear-
ing apparel, and it might be so used at any time. It is like the coat,
on v/hich the epaulets were worn, in Sawyer v. Sawyer, about which
no question appears to hâve been made but that it was wearing ap-
parel.
The décision of the référée is therefore modified as to the hat,
and, as so modified, afïirmed. The déniai of the right to the watch
as a timepiece so varies the circumstances as to the clock delivered
up that the trustée may properly enough now set out the clock, if the
bankrupt so desires, with the hat, as exempt.
Décision of référée modified as to the hat, and then affirmed, with
leave to allow the clock to be set out as exempt, with the hat.
in re McORACKEN & McLEOD.
(District Court, W. D. Tennessee. May 3, 1904.)
1. Bankbuptcy— Pétitions— Necessity— Consolidation— Res Judicata.
Tbe consolidation of bankruptcy pétitions filed by différent creditors
under order of court before the adjudication of banlcruptcy, and before
référence to the référée, was res judicata of the question of the neeessity for
the fillng of the second pétition, and precluded the référée from there-
after reviewing the question and holding that such second pétition was
unnecessary.
2. Same— Attoeney's Fees— Division.
Where two bankruptcy proceedings were filed by attorneys representing
différent creditors, and were Consolidated by order of court, as authorized
by gênerai bankruptcy order Ko. 7 (89 Ped. v, 32 C. C. A. xi), a single
attorney's fee should be dlvided between such attorneys atcording to the
relative value of the services and amount of work done by each.
Pétition to Review.
Jas. R. Duffin and R. W. Maddox, for pétition.
Hawkins, Peeler & Hawkins, opposed.
HAMMOND, J. The one attorney's fee allowed the petîtioning
creditors by section 64b (3) of the bankruptcy statute of 1898 (Act
July I, 1898, c. 541, 30 Stat. 563 [U. S. Comp. St. 1901, p. 3448]),
should be equitably divided between the attorneys representing two
pétitions filed and consolidated by order of the court under gênerai
order 7 of the Suprême Court Orders in bankruptcy (89 Fed. v, 32 C.
C. A. xi}. The référée decided that the attorneys filing the second
pétition were net entitled to share in the fee, because that pétition was
unnecessary — giving the whole of it to the attorneys filing the first
pétition in point of time— and this pétition was filed to review that
finding. The consoHdation by order of the court before the adjudi-
cation and before the référence to him precluded that question before
the référée, and he was not authorized, after such an order of con-
solidation, to détermine that the pétition was unnecessary. It was
already res judicata, and he should hâve confined his action to deter-
mining the amount of the fee, and, if the attorneys could not agrée
about its division, to allow to each a share according to the relative
622 129 FBDBRAL BEFOBTEB.
value of the services and amount of work donc by each in behalf of
the creditors, having care to adhère to the statute by riot allowing
more than one fee, however numerous the attorneys.
The finding will be vacated, and the case returned to the référée,
with directions to proceed according to law. Ordered accordingly.
In re GORDON SDPPLT & MFG. CD.
(District Court, M. D. Pennsylvanla. April 9, 1904.)
No. 411.
1. Bankrtjptot— Trustées— Sélection.
Where a trustée chosen to admlnlster the asseta of a bankrupt corpo-
ration by a majority of the creditors was not oaly a stockholder In the
corporation, but had been closely associated as attorney for those who
had previously been in control, and whose management was not only the
subjeet of criticism, but might call for action on the part of the trustée
to hold them personally responsible, such trustée, though unobjectlonable
personally, should not be permltted to act over the objections of a mi-
nority.
In Bankruptcy. On exceptions to action of référée approving of
trustée selected by majority of the creditors.
C. P. O'Malley, for objectors.
W. H. Jessup and Charles H. Welles, opposed.
ARCHBALD, District Judge. There can be no objection person-
ally to the trustée who has been chosen by a majority of those in-
terested in the estate, at the creditors' meeting; and the right of such
majority, under ordinary circumstances, to control the matter, must
be conceded. The trustée is the représentative of creditors, and they
are the ones to décide who he shaîl be, subjeet only to the right of
the court to supervise the choice where it is objected to. In the
présent instance the trustée chosen is not only a stockholder in the
bankrupt corporation against which the proceedings were instituted,
but he has been admittedly associated closely, as attorney and légal
adviser, with those who hâve been hitherto in control; and their
management is not only the subjeet of criticism, but may call for
action on the part of the trustée to hold them personally responsible.
To approve of the trustée now selected cornes too near, therefore, to
a continuation of previous conditions, to be warranted. With so
many others who vould be fully as efficient and entirely acceptable,
the majority hâve no right to impose their présent choice on the
objecting minority.
The élection is therefore set aside, and a new élection ordered.
î L See Bankruptcy, voL 6, Cent Dig. S 185.
MISSOUEI DBtrS CO. T. WTMAN. £23
MISSOURI DRUG CO. v. WYMAN.
(Circuit Court, TJ. D. Missouri, E. D. May 9, 1904.)
1. Mails— Fraudulent Use— Statutes— Constitutional Law.
Rev. St §§ 3929, 4041 [U. S. Comp. St. 1901, pp. 2686, 2749], and Act
Mareh 2, 1895, c. 191, § 4, 28 Stat. 964 [U. S. Comp. St. 1901, p. 2688], givlng
the Postmaster General authority to prevent the use of tlie mails by per-
sons engagea in use thereof to conduct fraudulent schemes or to sell
goods by false prêteuses, are not unconstitutional, since, as the right to
use the mails Is a statutory privilège only, its withdrawal Is not a dep-
rivation of property without due process of law.
2. Same— Postal Régulations.
Under the plenary power conferred on Congress to establlsh and regu-
late the postal System, it may lawfully confer on the Postmaster General
authority to prevent the mails being used as a médium to dissemlnate
printed matter which, on grounds of public policy, bas been deelared non-
mailable.
3. Same— Post-Office Department— Jubisdiction.
Congress having deelared that certain kinds of printed matter shall be
nonmailable, and that the mails shall not be used to accomplish fraudu-
lent schemes, whether certain mail matter belongs to the prohibited class,
or whether a person is in fact making a fraudulent use of the mails, is
within the iurlsdictlon of the executive branch of the government, the
détermination of which is not reviewable by the courts if sustained by
any crédible évidence.
4. Same— Médical Remédies— Feaudulbnt Adveetisinq — Opinions— Puff-
ING.
A drug Company advertised "Vitality Pills" by printed matter sent
through the mails, represenflng itself as an expert, and that the pills
had been the resuit of long médical research, made from an animal extract
taken from healthy young buUs ; that they were a positive cure for ail
nervous and sexual diseases where epllepsy or insanity had not already
set in, would enlarge the sexual organs, etc., and were the only known
positive cure for lost manhood, etc. Thèse statements were false, the only
médicinal value of the pills being certain old and well-known drugs pos-
sessing some tonic properties. Held, that such représentations were mis-
representations of fact and of alleged expert knowledge, authorizing a
fraud order issued by the Post-Office Department, and not mère statements
of opinion and laudatory statements used in advertlsing.
On Pétition for Injunction.
On November 3, 1903, the Acting Assistant Attorney General for the Post-
Office Department at "n'ashington, D. C, notifled the Missouri Drug Company,
doing business in the city of St. Louis, Mo., that charges had been lodged with
the Postmaster General against the drug company to tke efiEect that it was
engaged in conducting a scheme or device for obtaining money through the
mails by means of false and fraudulent représentations or promises, in viola-
tion of sections 3929 and 4041 of the Revised Statutes of the United States
[U. S. Comp. St. 1901, pp. 2686, 2749] ; that a statement of the nature of the
charges was inclosed with the notice ; and that it was desired that the drug
Company make a reply to the charges on November 18, 1903. On the day ap-
polnted for the hearing before the Acting Assistant Attorney General for the
Post OlHce Department the drug company appeared by its président, and filed
a written reply to the charges of some length. In its reply It set ont with
considérable détail its méthod and manner of doing business, and insisted, in
substance, that it was not engaged in obtaining patronage for the medicines
which It was engaged in selling by means of false and fraudulent représenta-
it 1. Nonmailable matter in furtherance of fraud, see note to Timmons v.
United States, 80 C. C. A. 86,
624 129 FBDEBAL BEFOBTSB.
tlona, but was transactlng Its business In a lawful manner. Subséquent to the
hearing, and on Deceniber 7, 1903, the drug Company was advised, In sub-
stance, that ail the évidence in the case had been carefully consldered by the
Post-Offlee Department, and that it had been decided "that that part of the
company's business whieh relates to the cure for lost manhood is in violation
of the postal fraud laws." It was further advised that it was "not the désire
of the Post-Office Department to interfère with any legitimate business (of the
drug Company), but to suppress that part which relates to the cure for lost
manhood," and that it had been decided to give the company an opportunity
to discontinue the objectionable branch of its business by signing an affldavlt
that it had entirely discontinued and abandoned the sale of its "Vitality Pills,"
and ail other business connected with its cure for lost manhood, with the ex-
ception of completing the treatment of patrons who had actually ordered "Vi-
tality Pills" at the time of the signing of the affldavit. On receipt of this
communication the drug company, under date of December IT, 1903, flied an
affidavit to the effect that it had ordered the immédiate discontinuance of ail
public advertlsing in the newspapers and magazines of a cure for lost man-
hood known as "Vitality Pills," and that it had stopped the use of the mails
for the shipment of "Vitality Pills," except in fulflllment of promises made
previous to the signing of the affldavit. Subsequently the Post-Office Depart-
ment appears to hâve been advised that, notwithstanding the statement con-
taiued in the affldavit of December 17, 1903, the drug company was using the
mails for the purpose of distributing "Vitality Pills," whereupon, under date
of F'ebruary 15, 1904, a fraud order was issued by the Postmaster General,
known as "Order No. 126." This order recited, in substance, that it had been
made to appear to the Postmaster General, upon évidence satisfactory to him,
that the JVIissonri Drug Company, its offlcers and agents, at St Louis, Mo., was
engaged in conducting a scheme or device for obtaining money through the
mails by means of false and fraudulent prêteuses, représentations, and prom-
ises, in violation of the act of Congress entitled "An act to amend certain sec-
tions of the Revised Statutes relating to lotteries and for other purposes,"
approved September 19, 1890, 26 Stat. 465, c. 908 [U. S. Comp. St. 1901, p. 2659].
Whereupon the postmaster at St. Louis, Mo., was forbidden to pay any postal
money orders payable to the order of the Missouri Drug Company, and to in-
form persons transmitting such postal money orders that payment thereof had
been forbidden, and that the amount would be returned upon présentation
of the original order, or a duplicata thereof, which should be applied for and
obtained under the régulations of the department. The postmaster at St.
Louis, Mo., was further ordered to return ail letters, whether registered or
not, and other mail matter, which should arrive at his office directed to said
Missouri Drug Company, to the postmasters at the offices at which such mail
matter was originally received, with the word "Fraudulent" plainly written
or stamped upon the outside of such letters or other mail matter ; and that,
where there was nothing on such letters to indicate who were the senders, ta
cause such letters to be sent to the dead letter office, with the word "Fraudu-
lent" plainly written or stamped thereon, to be disposed of as other dead matter
under the laws and régulations applicable thereto. After the issuance of this
order, and on March 2, 1904, the drug company flled its bill of complaint
against Frank Wyman, postmaster in the city of St. Louis, praying for an in-
junction perpetually enjoining and restraining him and his employés from
obeying such order of the Postmaster General, and from Interfering with the
complainant's mail matter in any respect. The bill of complaint alleged, in
substance, and as a ground of relief, that It had been for some time past en-
gaged in the business of healing diseases and aliments of the human family.
and more particularly those diseases and aliments which afCected the nervous
and sexual organs ; that it had expended large sums of money in advertlsing
its remédies for such aliments, and had created a large demand for its remédies
throughout the United States; that said business was a légal and legitimate
business, conducted according to légal and business methods, and was founded
solely on the médicinal virtues of the remédies which it was engaged in selling ;
that its remédies were capable of cure, and had cured many aliments of the
nervous and sexual organs ; that sections 3929 and 4041 of the Revised Stat-
utes of the United States [U. S. Comp. St 1901, pp. 2086, 2749] hâve no applica-
MISSOUKI DKUG CO, V. WTMAN. 625
tlon whatever to the business In which the complalnant was engagea, and that
said business was legitimate, and that no fraud, deceit, déception, or misrepre-
sentatlon of any klnd had ever been practlced by It. On the présentation of
the bill of complaint an order was entered requiring the postmaster at St.
Louis to appear on a certain day and show cause why a temporary injunctlon
such as was prayed for in the bill should not be granted. In obédience to the
rule to show cause a return was made by the postmaster, in which return it
was alleged, amongst other thlngs, that at the time said fraud order was
issued, and for a long time prior thereto, the complainant had been engaged
in a scheme by It devlsed to defraud divers persons throughout the United
States, which scheme was to be effected through the use and by means of the
post-office establishment of the United States. On the hearing of the applica-
tion for a prellminary injunction the court made an order restraining the
postmaster, during the pendency of the cause, and until a final hearing, from
executing so much of the order of the Postmaster General as required him to
return mail matter addressed to the complainant to the senders thereof and
branding it fraudulent. At the same time, by consent of the complainant and
the défendant, an order was made directing that the cause be speeded to a
final détermination, that the time be shortened for the taking of such testimony
as the parties desired to submit, and that when such testimony was taken the
cause be submltted to the court for such final decree as it thought proper to
enter. The défendant thereafter filed an answer to the bill of complaint. In
the answer so filed the défendant in substance repeats the allégations con-
talned In his return to the rule to show cause, that when the fraud order was
issued the complainant was, and for a long time prior thereto had been, en-
gaged in a scheme and artifice to defraud divers persons résident in the United
States by means and by use of the post-ofiice establishment. The nature of
such fraudulent scheme was also stated with some détail in the answer. In
pursuance of the permission given to the parties to take such testimony as
they desired to take, considérable testimony bas been taken by the complain-
ant, and the cause bas been submltted to the court for final decree upon such
testimony, the défendant declining to take any testimony In his own behalf.
Ashley C. Clover and James H. Harkless, for complainant.
David P. Dyer, U. S. Dist. Atty., for respondent.
THAYER, Circuit Judge, after stating the case as above, delivered
the opinion of the court.
Regarding the proposition which was advanced on the hearing that
the statutes under which the Postmaster General assumed to act in
issuing the fraud order, to wit, sections 3929 and 4041 of the Revised
Statutes [U. S. Comp. St. 1901, pp. 2686, 2749], and section 4 of chap-
ter 191 of the act of March 2, 1895 (28 Stat. 964 [U. S. Comp. St. 1901,
p. 2688]), are unconstitutional, it is sufïicient to say that the court ad-
hères to the views which it expressed on that point in the case entitled
American School of Magnetic Healing v. McAnnulty (C. C.) 102 Fed.
565, and to the views previously expressed by the Circuit Court of Ap-
peals for the Sixth Circuit in Enterprise Savings Ass'n v. Zumstein,
15 C. C. A. 153, 67 Fed. 1000, and by the Suprême Court of the Dis-
trict of Columbia in Dauphin v. Key, 4 MacArthur, 203. In other
words, the court holds that, in virtue of the plenary power conferred
upon the Congress of the United States to establish a postal System and
make régulations for its government and control, it may lawfuUy dé-
clare what shall and what shall not be carried in the mails, and may
lawfully confer on the Postmaster General the requisite authority to
prevent the mails from being used as a médium to disseminate printed
matter which, on grounds of public policy, it has declared to be non-
mailable. When Congress déclares, as it has an undoubted right to
129 F.— 40
626 129 FEDERAL EEPORTEE.
do, that a certain kind of printed matter shall not te deposîted in the
mail, or that the mails shall not be Used by any person or corporation
to accomplish fraudulent schémas, the duty of determining whether
certain mail matter belongs to the prohibited class or whether a certain
person is in fact making use of the mails to accomplish a schéma to
defraud, are questions which can be decided most conyeniently by those
who are charged with the administration of the postal laws. The dé-
termination of such questions is, in its nature, an executive function.
It frequently happens that officers who are charged with the exécution
of the laws are compelled to exercise some measure of judgment and
discrétion, and to détermine, to the best of their ability, questions both
of law and fact on which the proper exécution of the law dépends. No
reason is perceived, therefore, why Congress could not lawfully vest the
Postmaster General with authority to inquire and détermine whether
any person or corporation was using the mails to consummate a scheme
to defraud after it had determined that the mails should not be used for
that purpose. Indeed, it would seem that the power in question could
not well hâve been lodged elsewhere than with the head of the Post-
Office Department, whose duty it is to see that the postal laws are in
ail respects faithfully executed, and that the privilège accorded to citi-
zens of using the mails is not abused. The statutes in question operate
equally upon ail persons. They do not deprive any one individual or
class of individuals of a privilège which is accorded to others, nor do
they take away from the citizen any right which is guarantied to him
by the fédéral Constitution. The right to use the mails is a mère
privilège conferred by législative enactment, and it must always be ex-
ercised under and subject to such conditions and restrictions as Con-
gress sees fit to impose. Sections 3929 and 4041 [pages 2686, 2749],
now under considération, appear to hâve been enacted for no other
purpose than to vest the Postmaster General with the power to ef-
fectually prevent the mails from being used as a means of disseminating
printed matter which was deemed harmful to the public, and which Con-
gress for that reàson had declared should not be so disseminated.
The bill of complaint contains an allégation, in substance, that the
sections of the Revised Statutes last mentioned hâve no application to
such a business as the complainant is engaged in transacting, and it is
on this ground that the drug compajiy principally relies to obtain
injunctive relief. In support of this contention it asserts that ail the
représentations made by it to induce people to purchase its "Vitality
Pills" were matters of opinion, and, being of that character, that persons
who purchased on the strength thereof cannot be said to hâve been de-
frauded. It further insists that because ail of the fraudulent représen-
tations that were relied upon to prove the existence of a scheme to
defraud were mère expressions of opinion, they could not, as a matter
of law, accomplish a f raud ; and that the Postmaster General had no
jurisdiction to find that the drug company was engaged in a scheme
to defraud, and on the strength of that finding deprive it of the priv-
ilège of using the mails. This argument is based largely on some
observations of the Suprême Court of the United States which were
made arguendo in the case of School of Magnetic Healing v. McAn-
nulty, 187 U. S. 94, 23 Sup. Ct. 33, 47 L,. Ed. 90. In that case, how-
MISSOURI DRUG OO. V. WTMAN. 627
ever, it was a conceded fact (the case having passed off on a demurrer
to the bill, which admitted ail of its allégations) that the défendant
who was proceeded against was doing business and inviting patronage
from those having physical aliments on the professed theory that
the human mind is largely responsible for bodily aliments, and that
thèse could be cured or ameliorated by influences brought to bear on
the mind of the patient, and that persons received treatment from the
défendant with full knowledge that it was administered upon that
theory. In view of thèse facts the court said, in substance, that the
theory upon which the défendant administered médical treatment might
be erroneous, but no one could say with certainty that it was errone-
ous, inasmuch as the truth or falsity of the theory was whoUy a mat-
ter of opinion ; that those who received treatment with knowledge of
ther principle upon which it was based could not be heard to say that
they were defrauded ; that, in view of the admission made by the gov-
ernment, it was legally impossible to say that the défendant was engaged
in a scheme to defraud, and that the Postmaster General had made a
mistake of law, on account of which a court of equity could afford relief,
in finding the existence of a scheme to defraud upon an admitted state
of facts where no fraud was possible. The case which is cited and
relied upon bears little analogy to the case in hand. In the case now
under considération it appears that the complainant, to induce the sale
of its "Vitality Pills" for the cure of lost manhood, by its advertise-
ments and circulars makes certain statements of matters of fact which
the Postmaster General may hâve found, and probably did find, to be
false and misleading, and to hâve been made with intent to deceive
the public. For example, its leading advertisement contains the state-
ment that "after years of research eminent physicians hâve at last
discovered a remedy which is indorsed by the leading members of
the médical profession as permanent in its effect" ; that "the principal
ingrédient is an animal extract, taken from healthy young bulls" ; that
"it is scientifically prepared by the best chemists in the world"; and
that "the réputation of the institution (that is to say, the Missouri Drug
Company) is such that ail physicians know, when they stand sponsor
for a remedy, that remedy must be exactly as represented; and when,
upon their réputation, they make the statement that Vitality Pills will
cure ail cases of lost manhood, spermatorrhea, * * * and weakness
of any nature of the nerve or sexual organs, a cure must be positive
and permanent." The advertisement further déclares that "Vitality
Pills will efïect a cure at any âge" ; that "there is no case that it will
not cure permanently, except where epilepsy or insanity has already set
in"; and that the company "hâve received many letters from people
ail over the country telling of the most astonishing cures made by
Vitality Pills." In the complainant's circulars and other literature,
which is widely disseminated through the mails, are found statements to
the following effect: That the complainant's médical department "is
in charge of one of the most eminent physicians in this country" ; that
"the organs of génération can be made larger" ; that it "utters this all-
glorious truth professionally, having made many successful experi-
ments" ; that "the Missouri Drug Company is one of the largest chem-
istries in the United States" ; that "in presenting the Vitality Pills for
628 129 FEDERAL RBPOETBR.
the cure of diseases caused by an abnormal condition of the nervous
System we can unhesitatingly state that it is the best, the most certain,
and only permanent cure that has thus far been discovered for the dis-
eases and symptoms which are brought about by * * * sexual ex-
cesses," etc. ; that "the formula of Vitality Pills is not a spontaneous
or miraculous discovery, but was formed after years of scientific re-
search by the greatest professors of nervous diseases, and was com-
pounded in its présent form and efificaciousness at great expense to the
Missouri Drug Company" ; also "that thèse wonderful pills are to-day
accepted as the only known cure for lost manhood," etc., "and are now
being used by the profession for the treatraent of ail disorders result-
ing from either self-abuse or sexual excesses" ; that "it is now conceded
that Vitality Pills are the only spécifie known which will actually cure
permanently lost manhood in ail its forms and conditions" ; that Vital-
ity Pills are "to-day the only cure of its kind in the world free from
ail injurious and objectionable properties, and will always cure if the
simple directions for its use are followed"; also that the complainant
has in its possession "thousands of testimonials received from men in
every walk of life, both old and young, who send their thanks and
gratitude for being lifted from the midnight despair into the sunshine
of hope and liappiness by Vitality Pills." The testimony that was ad-
duced at the trial shows that thèse extravagant statements, and some
others of a similar nature, which the oomplainant confesses that it has
made to create a demand for its "Vitality Pills," rest upon no substantial
basis of fact or expérience, and, as some of them are statements of
matters of fact, rather than expressions of opinion, the court has little
hésitation in holding that the case was of a kind where the Postmaster
General, acting within the authority conferred upon him by the postal
laws, could properly find, as he appears to hâve done after giving the
drug Company an opportunity to be heard, that it was engaged in a
scheme to obtain money through the mails by means of false and fraud-
ulent prêteuses and représentations, and that it was doing so at the
time the fraud order was issued.
It must also be borne in mind that it is not always true that a mis-
representation, to amount to a fraud, must be a misrepresentation as
respects some matter of fact, although such is the gênerai rule. There
are well-established exceptions to this rule. An opinion may some-
times be expressed under such circumstances as will render a person
guilty of a fraud; as, where one who is an expert, or who possesses
peculiar knowledge of the value or the quality of an article expresses to
another, who lacks such spécial knowledge, and who relies upon the
superior information of the person with whom he is dealing, an opinion
as to the value or quality of the article which he does not honestly enter-
tain, doing so for the purpose of deceiving him. Cooley on Torts (2d
Ed.) p. 567, and cases there cited ; Eaton on Equity, p. 291, and cases
there cited. In view of this exception to the gênerai rule, some of
the statements which the complainant appears to hâve been in the habit
of making with respect to the merits of its "Vitality Pills," treating
them as expressions of opinion, might well be found to be false and
fraudulent if they were not entertained by the complainant, but were
MISSOURI DRTJG CO. V. WTMAN. 629
made solely with a view of inducinar the unwary to purchase its "Vitality
Pills."
Counsel for the complainant say that the représentations which it
was in the habit of making concerning its "Vitality Pills" are the ordi-
nary puffing statements which are usually made by the manufacturers
of patent medicines and other nostrums to introduce them into the mar-
ket, and it is doubtless true that représentations are sometimes made
with little regard for the truth, to create a demànd for such articles,
and that the public is in that manner sometimes deceived. This argu-
ment, however, is entitled to no weight, and cannot be accepted as a
sufficient excuse, much less as a justification, for the statements which
the complainant appears to hâve made to create a demand for its "Vital-
ity Pills." Even if it believes that thèse pills hâve some médicinal value
— which they may hâve, as they appear to be compounded in part of
some old and well-known drugs which possess some tonic properties —
yet the latitude ordinarily allowed to a vendor to puff his wares would
not justify such représentations as the complainant's literature dis-
closes. This court, however, is not called upon to make an independent
finding upon the question whether the drug company, at and prior to
the issuance of the fraud order, was or was not engaged in a scheme
to obtain money through the mails by means of false and fraudulent
représentations or prêteuses, and it would not be understood as making
a definite finding on that issue. The law devolves on the Postmaster
General, in the discharge of his executive functions, the duty of de-
termining that issue, and the courts will not interfère with his action, or
reverse his finding, where the complaining party has had a reasonable
opportunity to be heard in its défense unless the case on which the
head of the department has acted is one where, upon the state of facts
laid before the officer, it is legally impossible to hold that the complain-
ing party was engaged in obtaining money through the mails by false
or fraudulent représentations, so that such a finding, when made, may
be characterized, not as an erroneous finding, but rather as a mistake of
law. The case above cited, School of Magnetic Healing v. McAnnulty,
187 U. S. 94, 23 Sup. Ct. 33, 47 L. Ed. 90, fell within this rule, and
the judgment of the lower court was reversed because on the state of
facts then involved, the existence of which were admitted, it was im-
possible to say that the conduct of the défendant was fraudulent. The
judiciary cannot review or control the action of executive officers in
the détermination of questions of fact which they hâve been expressly
empovi'ered to détermine, and in the décision of which they must of
necessity exercise judgment and discrétion. Enterprise Savings Ass'n
V. Zumstein, 15 C. C. A. 153, 159, 67 Fed. 1000, and authorities there
cited. Moreover, when an executive officer, in the performance of his
duties, is called upon to détermine a question of fact on which
the due administration of the law dépends, his finding upon such an
issue, based upon conflicting évidence, if uninfluenced by fraud or mis-
take, is usually regarded as conclusive, and will not be disturbed by
the courts. Burfenning v. Chicago, St. Paul, Minn. & Omaha Ry. Co..
163 U. S. 321, 16 Sup. Ct. 1018, 41 L. Ed. 175; Gardner v. Bonestell,
180 U. S. 362, 21 Sup. Ct. 399, 45 L. Ed. 574; United States v. Winona
& St. P. R. Co., 67 Fed. 948, 15 C. C. A. 96, 107, and cases there cited.
630 129 FBDEBAL BBFOBTEB.
Indeed, as thîs court had occasion to reniark, in substance, in the case
of American School of Magnetic Healing v. McAnnulty (C. C.) 102 Fed.
565, 569, if the courts could be called upon and be required to review
the findings of the Postmaster General in every case of this sort the
statute under considération would not prove to be an efficient means for
preventing the misuse of the mails.
In view of thèse considérations, the court holds that it has no right
to grant the relief which the complainant seeks to obtain. The finding
of the Postmaster General that the complainant was engaged in a
scheme to obtain money through the mails by means of false and f raud-
ulent pretenses and représentations is one which this court is not au-
thorized to review or overrule, inasmuch as the finding is based on
évidence which certainly tends to sustain it, and in that event the statute
empowers the Postmaster General to judge of its weight and suffi-
ciency. The bill of complaint is accordingly dismissed, at the com-
plainant's cost.
UNITED STAÏES v. MOORE et al.
(Circuit Court, N. D. Alabama, S. D. May 8, 1904.)
1. CONSTITUTIONAI- LAW— RiGIITS OF CiTIZENS— OrGANIZATION.
The right of a citizen to organize mlners, artisans, laborers, or persons
In any pursult, as well as the right of Indlvlduals In sueh calllngs to unité
for their own improvement or advancement, or for any other lawful pur-
pose, is a fundamental right of a citizen in ail free governments ; but It
is not a right, privilège, or immunlty granted or secured to cltizens of the
United States, by its Constitution or laws, and is left solely to the pro-
tection of the States.
2. Same— liiFE AND Liberty.
The fourteenth amendment of the fédéral Constitution, which prohlblts
a State from depriving any person of hls life, llberty, or property with-
out due process of law, adds nothing to the rlghts of any citizen agalnst
another, but merely furnlshes additlonal guarantles agalnst any encroach-
ment by the States upon the fundamental rlghts which belong to every
citizen as a member of society.
3. Same— Fedeeal Courts— Jubisdiction.
Fédéral courts hâve no jurlsdlction to punish a conspiracy to oppress
and Intimldate a citizen of the United States to prevent hlm from exer-
cising the right to establish a mlners' union in a state, in the furtherance
of which défendants were alleged to hâve assaulted such citizen, with
Intent to murder hlm by shootlng at hlm with a plstol ; such offense be-
Ing entirely wlthin the iurisdlctlon of the state courts.
On Demurrer to Indictment.
The indictment, found under section 5508 of the Revised Statutes [U. S.
Comp. St. 1901, p. 3712], contained two counts. The flrst charged that the de-
fendants, Charles Moore, William Balllnger, John Chance, George De Loach,
Luther Éayburn, and Sterling Shores, consplred to Injure, oppress, and In-
timldate one B. L. Gréer, a citizen of the United States, to prevent the free
exercise and enioyment by hlm of a right or privilège secured to hlm by the
Constitution and laws of the United States, to wlt, "the right and privilège
of establishing, organizing, and perfectlng a local union of the United Mine
Workers of America at Empire, In the county of Walker and state of Ala-
bama," and that. In pursuance of the c-onspiracy, and to effect its object, the
défendants unlawfully assaulted and beat said Gréer, etc. The second count
charges a conspiracy among défendants to injure, oppress, and threaten sald
UNITED STATES V. MOOBB. 631
Gréer "for having, and because o( hls havlng exerclsed the rlght and privi-
lège," named, setting it forth as described In the flrst count, and that, In the
exécution of the consplracy, and to effect its object, the défendants unlawfully,
and wlth malice aforethought, assaulted sald Gréer with intent to murder him
by shooting at hlm with a pistol, etc.
The défendants demurred substantially on the foUowlng grounds: (1) Be-
cause it appears from the indictment that the right or privilège claimed is
not secured to said Gréer as a citizen of the United States by the Constitution
and laws thereof, and that said consplracy and assault did not violate any
privilège or immunity of a citizen of the United States. (2) The Indictment
shows that no offense was committed against the criminal laws of the United
States, but only an offense against the laws of the state of Alabama. (3) The
indictment shows that this court bas no jurisdietion to try and punish the
offense set forth.
Thos. R. Roulhac, Dist. Atty., and N. L. Steele, Asst. Dist. Atty.,
for the United States.
Walker Percy and W. I. Grubb, for défendants.
JONES, District Judge (after stating the facts as above). Unques-
tionably the right of a citizen to organize miners, artisans, laborers, or
persons in any pursuit, as well as the right of individuals in such call-
ings to unité for their own improvement and advancement, or for any
other lawful purpose, is a fundamental right of a citizen, protected in
every free government worthy of the name. The only issue this case
présents is, to what government, under our complex institutions, is
committed the duty to protect that right?
In ascertaining the privilèges or immunities of citizens of the United
States, as distinguished from the rights which pertain to the citizen of
the State as such, and to what governments, respectively, their protection
is committed, we must consult the history of our institutions, as well as
the language of the Constitution. Ail well-informed persons know that
our ancestors brought with them from England traditionary privilèges,
Personal and political rights, which had been gained in struggles between
Gommons and King, confirmed by repeated acts of Parliament and judi-
cial décisions, and so long acquiesced in that in time they finally became
the accepted maxims of government which constitute the British Con-
stitution. The Révolution deprived the people of the Colonies of
none of thèse rights, but put them more directly in their own keeping.
Their painful expérience with the helplessness and inefïiciency of the
government under the Articles of Confédération convinced the people
that their welfare and happiness would be best subserved by com-
mitting some of their powers, rights, and liberties to a new govern-
ment, which, as to such matters, should be suprême and independent
of the States. Accordingly the people of the United States, acting
through their several state conventions, created the government of
the United States, with ail needful power to conduct their afifairs with
other nations, to regulate the rights of the states, and the rights of
citizens of différent states as among themselves and with the gênerai
government, and some other matters of common concern to the
people, and committed to the new government ail their powers, rights,
and liberties as to those carefully énumerated matters, specified in the
Constitution of the United States, and reserved ail the other rights,
powers, and liberties theretofore enjoyed by the people of the states to
632 129 FEDERAL BEPOHTEB.
the keeping and protection of the state governments, wliich reniained
after the adoption of the Constitution, as they were before, sovereign
as to them. As there was much appréhension in the conventions
which ratified the Constitution, which contained no bill of rights, that
the rights of the states and of the people would be unduly trenched
upon by the gênerai government, the first Congress proposed ten
amendments ; the resolutions submitting them, reciting that :
"The conventions of a number of states having, at the time of their adopt-
ing the Constitution, expressed a désire, in order to prevent miseonstruction
or abuse of its powers, that proper declaratory and restrictive clauses should
be added; and as extending the ground of public confidence in the govern-
ment will best insure the beneficent ends of its création," etc.
Thèse amendments denied power to Congress to interfère with cer-
tain enumerated rights of the citizen, and gave certain constitutional
guaranties, as to the right of trial by jury, etc. The last two of the ten
amendments thus proposed provided that "the enumeration in the
Constitution of certain rights shall not be construed to deny or dis-
parage others retained by the people," and that "the powers not dele-
gated to the United States by the Constitution, nor prohibited by it
to the states, are reserved to the states, respectively, or to the people."
It is quite apparent, therefore, that the protection of certain rights of
the citizen of a state, although he is by récent amendments made a
citizen of the United States and of the state in which he résides, dé-
pends wholly upon laws of the state, and that as to a great number of
matters he must still look to the states to protect him in the enjoy-
ment of life, liberty, property, and the pursuit of happiness. ■
Inevitably, then, when a citizen claims protection of a right or privi-
lège, as one secured to citizens of the United St^.tes by its Constitution
or laws, thèse inquiries arise : Is the right or privilège claimed granted
in terms by any provision of the Constitution, or so appropriate and
necessary to the enjoyment of any right or privilège which the Con-
stitution does specify and confer upon citizens of the United States
as to arise by necessary implication ? Is its exercise necessary or ap-
propriate in the performance of any of the duties which the Consti-
tution and laws of the United States exact from its citizens? Is its
protection by fédéral authority needful to the just supremacy of the
gênerai government over any matter committed to it, or directly con-
servative or promotive of any of the ends for which the Constitution
ordained the government of the United States? If the character of
the right or privilège claimed does not permit affirmative answer to
any of thèse inquiries, it is clear the right is not derived from or dé-
pendent on the Constitution, and its protection is not committed to
the gênerai government.
It is no longer open to discussion or doubt that "the United States
are a nation whose powers of government, législative, executive, and
judicial, within the sphère of action coniîded to it by the Constitution,
are suprême and paramount. Every right created by or arising under
or dépendent upon the Constitution may be protected and enforced
by such means and in such manner as Congress, in the exercise of the
corrélative duty of protection and of the législative powers conferred
upon it by the Constitution, may, in its discrétion, deem most eligible
UNITED STATES T. MOOKE. 633
and best adapted to attain the object." In re Quarles and Butler, 158
U. S. 535, 15 Sup. Ct. 960, 39 L. Ed. 1080; Logan v. United States,
144 U. S. 293, 12 Sup. Ct. 617, 36 L. Ed. 429. Among the rights and
privilèges secured to citizens of the United States, expressly or im-
pliedly, which are grouped hère to show how entirely différent they
are in origin and nature from the right involved in this case, are the
right to vote for presidential electors and members of Congress ; the
right to hold and seek ofïice under the fédéral government ; the right
to pétition Congress for redress of grievances, and to freely print,
speak, or write one's sentiments, being responsible for the abuse
thereof, concerning any right or matter committed to the fédéral gov-
ernment; the right, of his own volition, to become a citizen of any
State of the Union by bona fide résidence therein, with the same rights
as other citizens of that state ; the right of every judicial or executive
officer or other person engaged in the service, or kept in the custody
of the United States, in the course of the administration of justice, to
be protected from lawless violence ; the right to the privilèges of the
writ of habeas corpus ; the right to go to and return from the seat of
government ; the right to resort to the courts of the United States ;
the right to communicate to any executive officer any information
which the citizen has of the commission of an offense against the laws ;
the right to engage in Interstate commerce ; the right to enter a home-
stead upon the public domain, and live on it for the purpose of perfect-
ing the entry ; the right to claim the protection of the government
when on the high seas or in foreign lands, or in any place committed
exclusively to fédéral jurisdiction ; the right to be exempt from dis-
crimination on account of race, as to equality before the law, suffrage,
or service on juries ; the right to pass from one state to any other for
any lawful purpose ; the right to be free from taxes and excises not
imposed by the state on its own citizens ; and the right to be free from
slavery or involuntary servitude, except as a punishment for crime.
The power conferred upon Congress by the Constitution concern-
ing thèse rights, in some instances, as under the fourteenth amend-
ment, is corrective merely of invasion of them by state law or author-
ity. Under other provisions, as under the thirteenth amendment, the
power of Congress is fuU, primary, and direct, authorizing not only
the annulment of state laws antagonistic to the right secured, but ex-
tending as well to législation for the protection of the right, and pun-
ishment of individuals who transgress its laws on the subject. It deals
with things, not merely with names. Prigg v. Pennsylvania, 16 Pet.
539, 10 L. Ed. 1060. "It is 'clear that this amendment, besides abol-
ishing forever slavery and involuntary servitude, gives power to Con-
gress to protect ail persons within the jurisdiction of the United States
from being in any way subjected to slavery or involuntary servitude,
except as a punishment for crime, and in the enjoyment of that free-
dom which it was the object of the amendment to secure." United
States V. Harris, 106 U. S. 540, i Sup. Ct. 610, 27 L. Ed. 290. Under
this amendment Congress has the undoubted power to deal not only
with the laws which seek to accomplish the forbidden ends, but also
■\vith acts of individuals which bring about the same resuit. Peon-
634 129 FEDERAL REPORTER.
âge Cases (D. C.) 123 Fed. 671 ; Slaughterhouse Cases, 16 Wall 36,
21 L. Ed. 394.
The Suprême Court recently declared :
"To leave to the several states proseeutions of consplracles to prevent clti-
zens enjoylng the privilèges granted or secured by tlie Constitution of the
United States would tend to defeat the supremacy and Indépendance of the
national government As said by Chief Justice Blarshall In McCullooch v.
Maryland [4 Wheat. 316, 4 L. Ed. 579J, and cannot be too often repeated, no
trace is to be found in the Constitution of an intention to croate a depend-
ence of the government of the Union on those of the states for the exécution
of the great powers asslgned to It Its means are adéquate to those ends,
and on those means alone vp^as It expected to rely for the accompUshment of its
ends. To Impose on it the necessity of resorting to means it cannot control,
vs^hich another government may furnish or wlthhold, would render its course
precaripus, the resuit of its measures uncertain, and create a dependence on
other governments vs^hich might disappoint its most Important designs, and Is
incompatible wlth the language of the Constitution." 158 U. S. 537, 15 Sup.
et. 961, 39 L. Ed. 1080.
If, therefore, the citizen is obstructed or intimidated by the lawless
acts of individuals in the "free exercise or enjoyment of any right or
privilège secured to him by the Constitution and laws of the United
States," Congress may make such acts crimes against the United
States, and punish them in its courts. Section 5508 of the Revised
Statutes [U. S. Comp. St. 1901, p. 3712] is a lawful exercise of the
authority of Congress to that end. It is to be borne in mind, how-
ever, that "the protection of this section extends to no other right —
to no right or privilège dépendent on a ïaw or laws of the states. Its
objèct is to guaranty safety and protection to persons in the exercise
of rights dépendent on the laws of the United States, including, of
course, the Constitution and treaties, as well as statutes, and it does
not, under this section, at least, design to protect any other right."
United States v. Waddell, 112 U. S. 79, S Sup. Ct. 36, 28 L. Ed. 673.
The right or privilège hère involved is not granted in terms to any
citizen of the United States by any provision of the Constitution. Its
exercise is not necessary to the enjoyment of any right or privilège
which the Constitution does specify and confer. It does not resuit
from relations of citizens of the United States to the government of
the United States, as needful or proper to the discharge of any duty
the citizen owes it. Its protection is not essential to the supremacy
of the gênerai government over any matter committed to it by the
Constitution, nor is its enforcement a proper means to any end which
the Constitution ordained the government of the United States to ac-
complish. The right has not been assailed or invaded under any state
law or by any state authority, or on account of race, color, or previous
condition of servitude, or in any other way than by the acts of lawless
individuals. How, then, can such an offense fall within the criminal
jurisdiction of the courts of the United States ?
The Constitution of the United States, as we repeat, left the power
and duty to protect life, liberty, property, the pursuit of happiness,
freedom of speech, the press, and religious liberty, and the right to
order persons and things within their borders, for the protection of
the health, lives, limbs, morals, and peace of citizens, save as the
original power of the states over them might be disturbed or de-
UNITED STATES V. MOORB. 635
stroyed by the spécifie grants of power to the gênerai government,
where the Constitution found them — in the exclusive keeping and
power of the state — and denied the gênerai government any respon-
sibility for or power over them. Rights like thèse do not arise from
the Constitution of the United States, and are in no wise dépendent
upon it. Provisions of the Constitution which refer to rights like
tlîese are merely in récognition of rights which existed before the gov-
ernment of the United States was formed, in abdication of power in
the gênerai government to interfère with or invade them, and in sonie
instances intended as a breal<water against their invasion by state
power. As said in United States v. Cruikshank, 92 U. S. 553, 23 L,.
Ed. 588:
"The very highest duty of the states when they entered Into the Union un-
lier the Constitution was to protect ail persons within their boundaries In the
enjoyment of those unalienable rights wlth which they were endowed by their
Creator. In thèse respects, as regards the particular right hère involved, the
récent amendments to the Constitution hâve made no change in the power or
duty of the gênerai government. The fourteenth amendaient, which prohibits
a state from deprivlng 'any person of life, liberty or property without due
process of law,' adds nothing to the rights of one citizen against another, but
slmply furnlshes additlonal gnaranties against any encroachment by the states
upon the fundamental rights which belong to every citizen as a member of
Society." United States v. Crullishank, 92 U. S. 554, 23 L. Ed. 588.
In that case it was further said :
"Wlthln the scope of Its powers as enumerated and deflned, the government
of the United States Is suprême and above the states, but beyond it bas no
existence. It was erected for spécial purposes, and endowed with ail power
for its préservation and the accomplishment of the ends the people had in
View. It can neither grant nor secure to its citizens any right or privilège
not expressly or by implication placed under Its jurlsdlction."
If, as contended by the government, Congress has power to punish
conspiracies to prevent the exercise of rights like that hère invaded,
it has equal power to punish individual acts having the same end in
view. It could invade the whole domain of the municipal codes of
the states, and punish every act of lawless violence directed against
the enjoyment of any right concerning life, liberty, and property, or
the pursuit of happiness. The authority and duty of the states in the
premises would be transferred to the fédéral government, whenever
it legislated as to them, and violations of its laws as to such rights
were punished in its courts; and that government, contrary to the
design of the Constitution of the United States, would hâve at least
concurrent jurisdiction with the state governments in prescribing and
punishing offenses against rights whose protection was never com-
mitted or intended to be committed to the United States, but, on the
contrary, expressly left to the power of the states. Civil Rights Cases,
109 U. S. 3, 3 Sup. Ct. 18, 27 L. Ed. 835 ; Slaughterhouse Cases, 16
Wall. 36, 21 ly. Ed. 394 ; United States v. Cruikshank, 92 U. S. 550,
23 L. Ed. 588.
Ail who value the blessings of justice administered without respect
of persons, and who love liberty regulated by law, will share in the
regret that acts like those disclosed in the indictment can happen in
our midst, and that appréhension exists that the right hère claimed,
which is dépendent solely upon the laws of Alabama, will not be vin-
636 129 FEDERAL REPORTER.
dicated and enforced in the tribunals of this state. Whether thèse ap-
préhensions be well or ill founded, it would be a less evil to society
to leave the wrong unredressed than to usurp jurisdiction to punish the
offenders hère.
As the acts charged cannot constitute an offense against the laws
of the United States, the demurrers will be sustained, and an order
wiU be entered tliat the défendants go hence without day.
WILSON et al. v. CHICAGO LUMBER & TIMBER CO. et aL
(Circuit Court, D. Colorado. March 28, 1904.)
No. 4,277.
1. Deeds— Construction— Refeeence to Map.
A deed to land in the town site of Denver, made pursuant to a decree
of tlie probate judge, eutered after hearing on tlie pétition of the grantee,
described the laiid by inetes and bounds ; making the old bed of the South
Platte river, as shown on a map referred to therein, a part of the north-
westerly boundary, and the extrême depth of the tract westerly froin the
Street on which it fronted 125 feet, whieh was the depth claimed by the
petitioner. At the time the map was made, it was difflcult, if not impos-
sible, to correctly locate the old bed of the river, which had been obliter-
ated by floods. According to the scale of the map, it was shown to be
200 feet from the street at the nearest point where it would be reached by
the boundary given, but the fleld notes of the survey on which the map
was based showed it to be very near the street. Held, that it could not
be presumed that the judge intended to grant more than the petitioner
claimed, nor could the distances given in the description be ignored be-
cause of the référence to the river bed, the location of whieh was uncer-
tain, and tbat the deed must be construed as conveying no land west of a
Une 125 feet from the street
Action in Ejectment. On trial to the court.
R. H. Gilmore and John D. Fleming, for plaintifïs.
Elmer E. Whitted, for défendants.
HALLETT, District Judge. This is an action of ejectment to re-
cover the possession of land in the city of Denver, the description of
which wil'l soon appear. Plaintififs claim title under a deed issued by
Henry A. Clough, probate judge of Arapahoe county, to PoHnah S.
Truax, of date September ly, 1872, pursuant to an act of Assembly
approved February 8, 1872 (Ninth Session, p. 191). Polinah Truax
made a pétition to the probate judge of Arapahoe county, in which
she declared that she held, under deed from Jacob Dowing, a former
probate judge, of date gth September, 1869, land described as follows :
"Beginning at a point 65 feet from the northwest corner of F and Williams
Streets; thence along the west side of F street to Bassett street, 183 feet;
thence westerly at right angles with F street 125 feet ; thence southerly on a
line parallel with F street 185 feet ; thence easterly 125 feet to the place of
beginning."
She then described certain improvements which she had made on the
premises, and declared that she had occupied the same since January
I, 1872, in good faith and in ignorance of any adverse claim. She
knew not why her title was challenged, and prayed for a deed to her
WILSON V. CHICAGO LUMBER & TIMBER 00. 637
according to the terms of the aforesaid act of Assembly. Thereupon
the probate judge directed that a hearing be had upon the pétition on
the i6th day of September, 1872. On the I7th of September the hear-
ing before the court occurred, in which Polinah Truax appeared, and
the city of Denver appeared by its attorney. After describing the tract
claimed by the petitioner as given in her pétition, with a frontage of
185 feet on F street and a depth of 125 feet, the court declared that
Polinah Truax had acquired an interest in and to the following de-
scribed pièce of land — being a portion of that above described — in good
faith, and without actual notice of the légal defects to the title thereof ,
and had located dwelHng houses thereon prior to January 25, 1872,
to wit : "Beginning at a point on the west line of F street in the East
Division of the city of Denver in said county and territory, 106 feet
north f rom the northwest corner of F and Williams streets ; thence on
the west line of F street 144 feet ; thence at right angles with F street
westerly to the east line of the old bed of the South Flatte River, as the
same is marked and defined on the map of the said city, as per survey
of F. J. Ebert ; thence southerly along the east line of the old bed of
the South Flatte River, 162 feet ; thence in a direct line southerly and
parallel with F street to a point 106 feet northerly from Williams street
and 125 feet westerly from the westerly line of F street; thence at
right angles and in a direct line easterly 125 feet to F street, to the place
of beginning" — ^but that the said Polinah S. Truax did not obtain an
interest in the remainder of the land, as first above described, in good
faith, and without actual notice of the defects to the title thereof, im-
proving the same by the érection of a dwelling or dwellings thereon.
A deed was then issued by the probate judge for the land as described
in the order, except that the course along the east line of the old bed
of the South Flatte river was given as 62 feet, instead of 162 feet, as
mentioned in the order. This discrepancy between the order and the
deed was not noticed by counsel in the course of the trial, and, in a plat
of the premises put in by the plaintiffs, and marked "Exhibit C," this
course was marked as of the length of 62 feet, so that it may be assumed
that the length of the course as stated in the order was in fact erroneous.
The second course in the description of the premises conveyed in the
deed extends westerly from F street to the east line of the old bed of
the South Platte river, as the same is marked and defined on the map of
said city, as per survey of F. J. Ebert, and plaintififs maintain that this
line is at a distance of more than 260 feet from the west line of F
street. From this point of intersection, plaintiffs follow the Hne of
the old bed of the South Platte river a distance of 62 feet, and there
diverge in a southerly direction for a distance of 87 feet, which brings
plaintiffs to a point 106 feet from the north line of Williams street, and
294 feet from the westerly line of F street. Thence the plaintiffs pro-
ceed to the place of beginning, 106 feet northerly from the intersection
of Williahis and F streets, and on the west line of F street.
It may be useful to observe that F street now is called "Fifteenth
Street," and thèse terms are used interchangeably in the record. The
course of this street is northwest and southeast, and the right-angle
courses from F or Fifteenth street would be northeast and southwest.
The southwesterly line of the premises claimed by plaintiff is some-
638 129 FEDERAL REPORTEE.
what irregular as to about one-half, by the course of 62 feet along
the Une of the old bed of the South Flatte river, but it may be said that
the extension of territory embraced within the deed, according to plain-
tiffs' construction of the description over that called for in the de-
scription in the pétition filed by Polinah Truax with the probate judge,
is much greater than the original claim of Polinah Truax. Polinah
Truax claimed a depth of 125 feet from F street in her pétition to the
probate judge. The depth now claimed by plaintjffs must be something
over 160 feet, in addition to the 125 feet. I hâve not made the necessary
calculation to ascertain the position of the southwesterly line upon an
average of the entire width of the premises, but, as stated above, it must
be somewhat beyond 160 feet.
We are now to consider whether the deed will admit of this con-
struction in respect to the premises conveyed. It will be observed
that Polinah Truax claimed title to no more than 125 feet in depth, and
declared that she had a deed from an earlier probate judge for this
quantity of land. The presumption is strong that the probate judge
would give no more than was claimed by the petitioner.
Secondly, the probate judge declared that the land granted was a
portion only of that described in the pétition. If it be contended that
this referred to the f routage on F street, which was reduced from 185
feet to 144 feet, did the probate judge intend to extend the lines in one
direction, after restricting them in another, and so as to make the entire
claim very much larger than that which Polinah Truax claimed in her
pétition ?
Furthermore, plaintiffs reject a part of the description in the fourth
course, in order to enlarge the territory claimed by them. This fourth
course is "thence in a direct line southerly to a point 106 feet northerly
from the north line of Williams street and 125 feet westerly from the
westerly Kne of F street." Plaintiffs accept the point 106 feet northerly
from the north line of Williams street, and cast out the part which dé-
clares that it shall be 125 feet westerly from the westerly line of F
street, in order to put this point 169 feet further to the southwest.
This they are not permitted to do if the description can be made effec-
tuai in any other way. The rule is that ail calls in a deed must be fol-
lowed if it be practicable to do so. If, now, we assume that the pro-
bate judge found the east line of the old bed of the South Platte river
to be within 125 feet from the westerly line of F street, and within the
territory described in the pétition of Polinah Truax, as to the northwest
corner thereof, we shall hâve no difficulty in giving effect to the calls
of the description. This would bring the third course of the description
along the east line of the old bed of the South Platte river, 62 feet with-
in the premises claimed by Polinah Truax in her pétition, and make the
fourth course intelligible in going to a point 106 feet northerly from
the north Hne of Williams street, and 125 feet westerly from the west
line of F street. This accords with the judgment of the probate court,
that less was given than Polinah Truax had asked in her pétition. It
was less in a southwesterly direction from F street, and less in the
frontage upon F street.
In opposition to this view, plaintiffs contend that the référence to
the map of the city of Denver, as per survey of F. J. Ebert, upon which
WILSON V. CHICAGO LUMBEB A TIMBBE CO.
the line of the old bed of the South Platte river is traced at a distance
of more than 260 feet from the westerly line of F street, shows the
intention of the probate judge to convey ail the lands claimed by them.
The fact that the Une of the old bed so appears is not disputed. The
greater part of the testimony in the record is directed to the location
of the old channel. When the Ebert map was made, in 1865, the Une
of this channel was not visible at the point in dispute. It had been
obliterated by the flood which took place in Cherry creek and in Plum
creek in the month of May, 1864, so that the actual location of the chan-
nel and the east line of the old bed of the South Platte river in the
year 1865 must hâve been difficult, if not impracticable, to locate. Nev-
ertheless Êbert made notes of the channel, which were given in évi-
dence at the trial. Thèse notes bring the channel very close to the
line of F street, and they serve to explain in some measure the appear-
ance of a small segment of land at the corner of Williams and F street,
marked as "Block 5." It may be presumed that Ebert assumed that
this small segment of land was ail that would be available, outside the
channel of the river, for town purposes. According to thèse notes of
survey, the entire tract claimed by Polinah Truax in her pétition to
the probate judge was withîn the channel of the South Platte river.
Whether the probate judge examined the fieid notes to ascertain the
location of the old channel of the South Platte river, we do not know.
To assume that he did so accords with his character for diligence and
probity in the discharge of an officiai duty. The rule for which plain-
tiffs contend, that the line traced on the Ebert map and the distance
of it from F street, as shown by the scale of that map, must be accepted
as showing the western limit of the grant, is not reasonable, under the
circumstances disclosed in the record. Clough was a public officer
engaged in the discharge of a public duty. It is doubtful whether
he could give more land to Truax than was called for in her pétition.
It is clear from the language used by him in the deed, and in the order
upon which the deed was issued, that he did not intend to do so.
The rule for which plaintiiïs contend, and to which counsel hâve
cited many cases, is of large and wholesome application, where the
parties to a conveyance intend to make a map or chart of the premises
conveyed the best évidence of the extent of the grant. It is sometimes
applied where a statute or a rule of practice has made the map or chart
extraordinary évidence of the description of the land. Such was the
case of Beaty v. Robertson, 130 Ind. 589, 30 N. E. 706. It has little
application to a plat of a town, which is always open to correction
from field notes or other compétent évidence to show the true Unes of
survey. O'Farrel v. Harney, 51 Cal. 125; Whiting v. Gardner, 80
Cal. 79, 22 Pac. 71.
This controversy relates entirely to a tract of land west of that de-
scribed in the pétition of Polinah Truax to the probate judge, and be-
tween that tract and the bed of Cherry creek. As to that land, the court
finds that Polinah Truax acquired no title from the deed by Clough to
her, and therefore the plaintifïs hâve shown no title. Upon that, the
judgment will be for défendants.
64Q 129 FBDEBAL BEPOBIBB.
In re LAKB JACKSON SUGAR CO.
œistrict Court, S. D. Texas. January 28, 1904.)
No. 1,044.
1. BANKBTIPTCT— INVOLITNTAET BANKETIPTS— PeRSONS BnGAGED IN FaEMING—
COKPOBATIONS.
Bankr. Act July 1, 1898, c. 541, i 4b, 30 Stat. 547 [U. S. Comp. St. 1901.
p. 3423], provides that any natutal person except a wage-earner or a
person engagea chiefly in farmlng or the tillage of the soil, and any cor-
poration principally engaged in manufaeturing, trading, etc., owing debts
to the amount of $1,000 or over, may be adjudged an Involuntary bank-
rupt. Reld, thiat a person engaged chiefly in farming or the tlUage of the
soil should be construed to apply only to natural persons, and not to cor-
porations.
2. Same— Evidence.
Evidence held insufficient to establlsh that a corporation agalnst which
involuntary bankruptcy proceedîngs were brought was engaged chiefly
in farming or the tillage of the soil, within Bankr. Act July 1, 1898, c.
541, § 4b, 30 Stat. 547 [U. S. Comp. St. 1901, p. 3423], providing that any
natnral person except a wage-earner or a person engaged chiefly in farm-
ing or the tillage of the soil, eitc, may be adjudged an involuntary bank-
rupt.
In Bankruptcy.
Tlie following is the referee's report :
To the Honorable Waller T. Burns, Judge of the United States District Court
for the Southern District of Texas :
This proceeding, involuntary in its nature, was institutnd 4th of November.
1903, by H. D. Taylor &. Sons and other parties against the Lake Jackson
Sugar Company, of Brazoria county, Texas, by pétition duly sworn to and
filed with the clerk of this court ; in which pétition it is alleged that the pe-
titloners are creditors of the said Lake Jackson Sugar Company, having prov-
able claims against It to the amount, in the aggregate, of $500 and over ; that
the said company owes debts to the amount, in the aggregate, of $1,000 and
over ; that the said company Is insolvent, and is neither a wage-earner nor
is it engaged principally in farming or in the tillage of the soil ; that within
the four months next precedlng the filing of their pétition, to wit, on the 3d
day of November, 1903, a receiver, because of the said company's Insolvency,
was put in charge of its properties, under the laws of the state of Texas, the
name of which receiver is T. lî. Bennett, of Angleton, Texas ; that said com-
pany bas committed other acts of bankruptcy by paying money to certain of
its creditors, thus creating a préférence in favor of such creditors over other
of its creditors ; that said company has long ceased to pay its debts, and that
sults are now pending against it. The prayer of the petitioners is that the
Lake Jackson Sugar Company be adjudged bankrupt within the purview of the
acts of Congress relating to bankruptcy.
To the said pétition of H. D. Taylor & Sons et al. the said receiver, T. E.
Bennett, made answer under oath, virtually admittlng ail the allégations
therein, except that which allèges that "the Lake Jackson Sugar Company is
neither a wagehcarner nor a person engaged principally in farming or the
tillage of the soil." Te the same effect did several intervening creditors of
said company make answer thereto, afflrmatively alleging in their respective
answers that said company was and is chiefly engaged in the business of farm-
ing and tillage of the soil. The Lake Jackson Sugar Company, though duly
ser%'ed with process, wholly made default.
The petitioners filed a replication to thèse answers, thus raising the issue
as to whether or not the défendant, the Lake Jackson Sugar Company, is or
1 1. What persons are subject to bankruptcy laws, see note to Mattoon NaL
Bank v. First Nat. Bank, 42 0. C. A. 4.
IN RE LAKB JACKSON SUGAR 00. 641
Is not engaged chlefly In farmlng and the tlllage of the soU, and thla Is the
only issue In the case. And in pursuance of an order of your honor, made in
the above cause, and bearing date December 3, 1903, whereby the underslgned
was authorized and directed, as référée of thls honorable court, "to consider
the pétition in the above cause, and aiso to hear the contest thereln raised
by answers thereln flled, and to take such proceedlngs theretn as are requlred
by the acts of Congress relating to bankruptcy, and that the sald Lake Jack-
son Sugar Company and contesting creditors shall attend upon sald référée
at such date in the near future as shall suit said référée and the parties at
interest," I, S. W. Jones, référée, as aforesald, do report that, having duly
extended notices to the sald Lake Jackson Sugar Company and to ail others
In interest, through their attorneys of record, of the time and place for the
hearing before me of the matters referreid — that is to say, at 11 o'clock a. m.,
on the 19th day of December, 1903, at the United States courtroom In the city
of Galveston, Texas — I did, on the day and at the place aforesald, proceed to
consider the said pétition and to hear the contest in the above cause raised
by answers thereln flled, and to take such proceedlngs thereln as are requlred
by the acts of Congress relating to bankruptcy; and, having been attended
by Sterling Myer, of the law firm of Hunt & Myer, counsel for the petitloning
creditors, A. R. Masterson (for H. Masterson), counsel for T. E. Bennett, re-
ceiver, and by A. E. Masterson, counsel for intervening and contesting cred-
itors, and having heard read the pleadings and the documentary évidence and
the oral and written testimony produced before me and the arguments of
counsel, and having duly and carefully considered the same, and having care-
fully examined and inqulred into the matters so referred, I do find and report
as f ollows :
From the évidence before me I find: That the Lake Jackson Sugar Com-
pany was incorporated under the gênerai incorporation act of thls state in
April or May, 1900, for the purpose of "manufaeturlng sugar cane into mo-
lasses, sugar, and ail other products of sugar cane, and for that purpose to
purchase material necessary for such manufaeturlng, and to sell the products
of such manufaeturlng business; to purchase such real estate, machinery,
and appllances as may be necessary or suitable to conduct such business."
That very shortly after its incorporation the sald company leased two large
plantations upon which to ralse sugar cane and other products, constructed
a railway, equipped veith necebsary rolllng stock, from thèse plantations to
a sugar mill, where it could couvert the sugar cane into merchantable com-
modities, and thence to a trunk Une of railway by which the said company
could market its products. That It about the same time began the cultivation
upon said lands of sugar cane and corn, except a small portion thereof, which
it sublet to a third party for rlce culture upon shares. That it raised each
year large quantities of sugar cane, varylng with the seasons, and also corn,
employing for that purpose a large number of llve stock and from seventy-
five to one hundred laborers. That about six or seven hundred acres of said
lands were employed in the raising of such cane. That the julce from thls
cane was manufactured by the sald company into molasses, sugar, and syrup,
and the commodities were placed, each year, upon the market, and sold in
most of the cities and towns of any size In the state of Texas ; and that the
said company neither purchased nor sold any cane.
Joseph Khea testlfied, besldes other facts : That he is now, and had been for
four or five years previous hereto, the manager for the défendant company.
That the company employed Its laborers by the day. That the mill was used
in reduclng the cane raised into sugar, molasses, and syrup. That no cane
was ever used except that raised on the two plantations. Never raised any
cotton. That flve or six hundrefl acres were used in raising corn. That the
corn was used in feeding the live stock employed on the two plantations ; that
this live stock is valued at $10,0W). That the cane crop raised by the company
in 1902 was valued at $20,000. That the manufactured products of the said
company were its only sources of revenue ; that thèse products were gener-
ally sold to jobbers. That letters were often written ofCerlng them for sale.
That "we [meaning the défendant] sent eut samples and wrote letters offering
them for sale to jobbers throughout the country. We manufactured syrup
of a very hlgh grade, and placed it In every town in Texas of any aize, during
129 F.— 41
642 129 FEDERAL REPORTEE.
the présent season, and no complaînt hâve we had. We had a ready sale for
this syrup, and sold It through jobbers. We also sold our sugar through
jobbers. The syrup was put up in cans and some in barrelS; The store on the
plantations was for the accommodation of our employés. On the Ist of Janu-
ary, 1903, we carried a stock worth about $2,500, which conslsted of grocerles,
dry goods, hardware, farm implements, lumber, and shingles. This store
was open to any one who wished to buy, and others would buy as well as our
laborers and people In the vicinlty were aware of that fact. We generally
kept a gênerai stock of goods on hand in the store. We sold at a profit, and
would make from 25 to 50 per cent, profit That railroad and its equipment
cost about $40,000, and the sugar mill about $15,000. The Lake Jackson Sugar
Company does not own the sugar mlll. We did not pay our laborers wages
in merchandise, but gave them tlme checks, which were équivalent to money,
and thèse time cheeks were Cashed at the end of every two weeks, or they
could be used in the purehase of merchandise at the store, if the laborer so
wished. We put up our sugar in barrels, just as other manufacturer s do."
The following is a letter addressed by the défendant, through J. Rhea, its
manager, recognlzed by him as emanating from him, together with the printed
heading thereon, which form was generally used in the company's corre-
spondence :
"R. Oliver, Président. J. Walker, Secretary. Jos. Rhea, Manager.
"The Lake Jackson Sugar Company.
■'Dealers In General Merchandise, Hardware, Harness, Farm Implements,
Builders' Supplies, Lumber, Shingles, Windows, Doors and Sash,
Lime, Cément and Brick.
"Manufacturers of Sugar, Molasses and Pure Ribbon Cane Syrup.
"Angleton, Texas, Jany. 31, 03.
"Messrs. H. D. Taylor and Sons, Houston, Tex. — Gentlemen: We are In
receipt of your letter of the 28th inst, and note what you bave to say con-
cerning syrup. You state can goods is not going rapidly because you bave so
much barrel goods on hand, now this is the very reason, as you hâve ac-
knowledged, 'You hâve none,' therefore you cannot know of its selllng quali-
fies. This goods does not interfère with your sales in barrel good, as it goes
to a différent trade, It is of a much higher quality and when once the best
trade gets it to their table they will constantly call for it. You should put it
up to your best customers that they can hâve an opportunity to glve their
trade the Pure Article. We are sure that you will be more than satlsfied and
that every désire you may bave for a syrup will be fllled whan you hâve put
our goods before your trade.
"We are anxious for you to try our goods, not for the sake of a sale, but
to hâve your customers try it, that they will know where the pure goods, the
goods with the best flavor and bearing the proper color, can be found. Wa
know our goods can not be equaled and for this reason we insist that you use
it. We bave placed it in every town in Texas of any size during the présent
season and not one complaint hâve we had. We trust you will give this
matter, the question of pure syrup, due considération and await your orders
with pleasure.
"We enclose B/L to the candy we are returning, you will please crédit our
account and mail us crédit mémorandum. Our samples of sugar went for-
ward ou yesterday, which we trust you hâve by now. Trusting to hâve you
command us at an early date and assuring you our best efforts in fiUing your
orders, we remain,
"Yours very truly, The Lake Jackson Sugar Co.
"Jos. Rhea, Manager."
The bankrupt act of July 1, 1898, c. 541, § 4b, 30 Stat. 547 [U. S. Comp. St.
1901, p. 3423], provides as follows : "Any natural person, except a wage earner
or a person engaged chlefly in f arming or the tillage of the soil ; any unin-
corporated company, any corporation engaged principally in manufacturing,
trading, prlnting, publishing, or mercantile pursuits, owing debts to the
amount of $1,000.00 or over, may be adjudged an involuntary bankrupt upon
default or an Impartial trial, and shall be subject to and entitled to the pro-
IN EE PANCOAST. 643
visions of this act. Prîvate bankers, but not national banks, or banks In-
corporated under state or territorial laws, may be adjudged. involuntary bank-
rupts." And it is claimesd in this case by tlie respondents that, inasmuch as
tbe défendant company is, as alleged by them, chiefly engaged in farming or
the tillage of tbe soil, it (tbe défendant) cornes within the exception above
quoted, to wit, "a person engaged cbiefly in farming or tbe tillage of tbe soil,"
and is not amenable to said bankrupt act But it seems to me that this con-
tention is clearly erroneous. I bave been cited to no authority, nor bave I
been able to flnd any, where such a défense has been advanced by a corporation
in an involuntary proceeding. Indeed, it is rather a novel idea that a cor-
poration should be engaged cbiefly In farming or the tillage of the soil. Tbe
phrase above quoted from the act should be and has been strictly construed,
even in cases where an individual person was alleged bankrupt (Collier on
Bankruptcy, p. 54) ; and. In my opinion, the use of the phrase "natural per-
son," when construed in connection vvith the above-quoted phrase, "except
wage-ear]iers and those chiefly engaged in farming or the tillage of the soil,"
and ail that follows it, is to exeludei corporations from this exception. Col-
lier on Bankruptcy, p. 53.
But suppose I am in error In this. Has the défendant company been
brought within this exception according to the facts disclosed? From those
facts it appears that it (the défendant company) has been for several years
engaged in three difCerent branches of business — in farming, in merchandising,
and in the manufactura of sugar, molasses, and syrup from the sugar cane
which it raised upon the plantations cultivated by it ; and of thèse, which did
the company deem of paramount importance to Its welfare? Was it its
farming or its manufacturing interest or enterprise? It raised corn, it is
true, but sold none, consuming ail of it in feeding the mules, numbering flfty
head and over, eniployed by it in cultlvating two plantations, whereon was
raised this corn, and also sugar cane, the juice of which latter was converted
by the company into sugar, molasses, and syrup, and sold in the open market ;
one year realizing therefrom $20,000. The company bought no cane and sold
none, and its only source of revenue was from its manufactured articles. If
thèse facts be true — and they are nowbere contradicted — the only natural con-
clusion is that manufacturing, and not farming, was its.chief pursuit or voca-
tion ; that the latter was only incidental to the former, and only pursued in
furtherance of its manufacturing interests — in other words, that its manu-
facturing interests were deemed by it of paramount Importance to its welfare
and peeuniary advancement. The premises considered, I conclude that the
défendant, the Lake Jackson Sugar Company, is Insolvent, has committed
acts of bankruptcy, and is amenable to the acts of Congress relatlng to bank-
ruptcy, and that an order adjudicating It bankrupt should be entered by this
honorable court in this case ; and I respectfully so recommend.
RespectfuUy submltted, S. W. Jones, Référée in Bankruptcy.
Hunt & Myer, for petitioning creditors.
Masterson, Morris & Masterson, for receiver.
A. E. Masterson, for contesting creditors.
BURNS, District Judge. Exceptions overruled, and referee's re-
port confirmed.
In re PANCOAST.
(District Court, E. D. Pennsylvania. April 30, 1904.)
No. 1,912.
1. Bankbtjptct— Proof op Claims— Authentication.
Under Bankr. Act July 1, 1898, c. 541, § 20, 30 Stat. 651, 552 [U. S.
Comp. St 1901, p. 2430], a notary public is authorized to administer the
oath to a proof of daim, being an officer authorized to administer oaths
In proceedlngs lu the courts of the United States by Act Aug. 15, 1876,
644 129 FEDEEAL REPORTER.
C. 304, 19 Stat 206 [U. S. Comp. St. 1901, p. 662] ; and such oath Is suffl-
dently authentlcated, prima facie, by what purport to be the notary's offi-
ciai signature and seal, although made in a différent state from that in
which the proceedings are pending, and without regard to the spécial re-
qulrements of the statutes of either state.
In Bankruptcy. On certificate from référée.
Henry N. Wessel (Alfred Aarons, of counsel), for S. W. Downer.
J. B. McPHERSON, District Judge. The facts upon which the
question for décision arises appear from the following report of the
référée :
"Henry N. Wessel, Esq., an attorney at law In Philadelphla, presented the
proof of debt of S. W. Downer, of Downet, Gloucester county, New Jersey, a
ereditor of the above-named bankrupt, for $23.63, together wlth a gênerai let-
ter of attorney In fact to the said Henry N. Wessel and J. B. Larzalere. Esq.,
an attorney at law located at Norristown. To the proof of debt was attached
an itemized bill showing the considération for the debt. The affidavit to the
proof of debt was taken before one Harry C. O. Shute, an alleged notary public
of Glasboro, N. J., and there is attached his seal as follows: 'Harry C. C.
Shute, Notary Public, Glasboro, N. .T.'
"There is not attached to the affldavlt any certificate of the court that the
said Harry C. C. Shute is a notary public and In commission ; neither is there
attached to the certificate a statement in plain leglble characters in the Bug-
llsh language of the date upon which hls commission es;pires.
"It is because of the omission of the certificate of the court, and also the
omission of the statement of the date upon whieh hls commission expires, that
the référée refuses to flle and allow the claim, the référée holding that before
he shall flle and allow a claim talien before a foreign notary the probate shall
be 'accordlng to the forms now or hereafter requlred by this state, relative
to such acknowledgment or probate.' Act Assem. Aprll 22, 1863, § 1; P. L.
548. The act of Aprll 4, 1901, § 5 (P. L. 71), requires every notary public to
'append to each certificate, attestation, or officiai notarial act, a statement in
plain leglble characters in the English language of the date upon which his
commission expires.' The notary not having complied wlth the laws of the
state of Pennsylvania, in that he has not appended the date of the expiration
of his commission as required, the référée holds that the probate Is not suffi-
cient.
"The référée further holds that, before he shall receive and flle a daim
probated by a foreign notary, there shall be attached a certificate of the court
that the notary is a notary, and In commission, and that the mère fact that
he signed himself as a notary and attaches what purports to be his seal of
office is not sufficient. For thèse two reasons the référée has refused to flle
the claim, and at the request of the said Henry N. Wessel, Esq., he certifies
the facts to your honorable court for the purpose of having the matter passed
upon by your honorable court, and finally adjudicated."
I am unable to assent to the correctness of this conclusion. The
power of a notary to administer the oath in question is not to be test-
ed by the Pennsylvania statutes, but by the bankrupt act itself and by
other fédéral législation. It is unnecessary to consider the laws of New
Jersey, as will be seen in a moment. Section 20 of the bankrupt act dé-
clares that "oaths required by this act, except upon hearings in court,
may be administered by (i) référées, (2) officers authorized to admin-
ister oaths in proceedings before the courts of the United States or
under the laws of the state where the same are to be taken. * * *"
Act July I, 1898, c. 541, 30 Stat. 551, 552 [U. S. Comp. St. 1901, p.
2430]. Now, a notary public is an officer authorized to administer
oaths in proceedings before the courts of the United States, for he
IN EE PANCOA8T. 645
was expressly gîven such power by Act Aug. 15, 1876, c. 304, 19 Stat.
206 [U. S. Comp. St. 1901, p. 662], which provides "that notariés pub-
lic of the several states, territories and the District of Columbia, be,
and they are hereby, authorized to take dépositions, and do ail other
acts in relation to taking testimony to be used in the courts of the
United States, take acknowledgments and afïidavits, in the same man-
ner and with the same effect as commissioners of the United States
Circuit Court may now lawfully take or do." That commissioners
of the United States Circuit Court had power at that time to take
proof of a debt in bankruptcy, appears from section 5076 of the Re-
vis ed Statutes, which required creditors to prove their claims eitlier
before a register of the court or before a commissioner of the Circuit
Court. Other acts giving a commissioner power to administer oaths
are referred to in the discussion by the Suprême Court of a notary's
power in this respect in United States v. Curtis, 107 U. S. 671, 2 Sup.
Ct. 507, 27 L. Ed. 534.
Nothing is said in thèse acts about the method of certifying the
oath, but, in my opinion, the signature and seal of the notary are suf-
ficient, without more, in the first instance, whether he be a notary of
this State or of some other state. There is a conflict in the décisions
upon this subject, but the decided weight of authority, I think, is in
favor of the view just stated. A number of the cases are cited in 21
Am. & Eng. Enc. of L,aw (2d Ed.) page 561. See, also, Brandenburg
on Bankruptcy (3d Ed.) § 849. In Wood v. St. Paul Street Railway
Co., 42 Minn. 411, 44 N. W. 308, 7 E. R. A. 149, a statement of lien
was ofïered in évidence, sworn to before a notary public in Phila-
delphia, the oath being authenticated by a signature and a notarial
seal. No proof was ofïered of the genuineness of the signature or the
seal, or that the person signing the jurât was a notary, or, if a notary,
that he was authorized to administer oaths in Pennsylvania. Never-
theless, the Suprême Court of Minnesota upheld the admission of the
statement in évidence, giving the following reasons for their décision :
"We think thèse affidavits may be made In another state, before any officer
authorized by the laws of such state to administer oaths. Of course, if taken
in another state, they must be duly authenticated, so as to show on their face
the officiai character of the offlcer, as well as hls authority to administer
oaths. In each of the présent cases the afHdavit was sworn to in Pennsylvania
before a notary public of that state, who authenticated it by signing the jurât
and affixing hls notarial sfeal. If, Instead of being affidavits, thèse had been
certificates of protest or authentlcations of similar commercial documents, it
is elementary law that the notary's seal would prove itself, without any fur-
ther proof of his ofHcial character, or of his authority to do the act. A notary
public is considered not merely an offlcer of the country where he is admitted
or appointed, but as a kind of international offlcer, whose ofBcial acts, per-
formed in the state for which he is appointed, are recognized as authoritative
the world over. Defendant's counsel concèdes that this is true as to ail his
acts in the way of authentication of what he terms commercial documents,
but insists that outside of such matters a notary bas no power, in the absence
of statutory authority, to administer oaths. Although this is sometimes stated
in the books as being the law, yet its correctness may well be doubted. The
powers of a notary, which is a very ancient office, are largely founded on cus-
tomary law. The English notariés hâve always considered themselves author-
ized to administer oaths, and whatever chance for doubt about it there might
hâve been was set at rest by the act of 5 & 6 Wm. IV, c. 62, § 15. Brooke,
Not 20. Affidavits taken before notariés in foreign countries hâve uniformly
646 129 FEDERAL REPORTEE.
been received by the courts of England in judicîal proceodings witbout any
other proof of thelr officiai character or their authority to adminlster oattis
tlian their notarial seals. Omealy v. Newell, 8 East, 364; Walrond v. Van
Moses, 8 Mod. 321 ; Haggitt v. Iniff, 5 De Gex, M. & G. 910 ; Cole v. Slierard,
11 Exch. 482. It was said in Omealy v. Newell, supra, that this had been
the uniform practice 'as far baelc as living memory could trace it' The same
practlce seetus to hâve obtained in the American courts. TJ. S. v. Libby, 1
Woodb. & M. 221 [Fed. Cas. No. 15,597] ; Winaiis v. Denmead, 2 MacArthur,
475 [Fed. Cas. No. 17,860] ; Tucker v. Ladd, 4 Cow. 47 ; Conolly v. Riley, 25
Md. 402. This practice has also long prevailed in this state, especially in the
probate courts and in the proof of claims in insolvency proceedings. It is
true, as counsel suggests, that thèse are rules of practice, as to whleh the
courts are to some estent a law uuto themselves ; but the f act is important,
and in point as a récognition not only of the regularity of affldavits sworn
to outside the state, but also of the gênerai power of notariés to administer
oaths without proof of statutory autliority to do so. As a matter of fact, in
every state and territory of the Union notariés hâve power to administer oaths,
and for the last forty years affidavits sworn to before a notary in any state
of the Union, and authentlcated by his notarial seal, hâve been admissible
in ail the fédéral courts, without any proof of their authority to administer
oaths. It is true that perhaps in every state the powers of notariés, including
that of administering oaths, hâve been regulated by statute, which, however,
are largely declaratory in their nature. But whether this authority be of a
statutory origin or founded on a customary law, the récognition of its exist-
ence has become so gênerai, if not universal, that there is now no good reason
why it should not be judicially recognized as one of the gênerai powers of
notariés, and afBidavits authentlcated by seals of notariés of other states
placed on precisely the same footing as their certiflcates of protest or authen-
tications of so-ealled commercial documents."
In my opinion, this is an excellent statement of the reasons why
no further proof should, in the first instance, be required of the no-
tary's officiai character than a signature and seal that purport to be
his. It may be added that, as Chief Justice Tilghman remarked in
Browne v. Phila. Bank, 6 Serg. & R. 484, 9 Am. Dec. 463 : "It ought
to be presumed, till the contrary be proved, that no man would dare
to assume the office without proper authority." It is true that the
notary public in that case was a Pennsylvania officer, but similar rea-
sons, although perhaps not quite so strong, call for the application of
the presumption to a notary public of another state.
The référée is directed to receive the proof of claim referred to in
his certificate.
In re BELKNAP. '
(District Court, E. D. Pennsylvania. May 2, 1904.)
No. 1,773.
1. AcTS DP Bankeuptct— Peefeeence— Jtjdicial Peoceedings.
Where a landlord's levy on the goods of his tenant under a distress
warrant dld not operate as a préférence, as deflned by Bankr. Act July
1, 1898, c. 541, § 00, cl. "a," 30 Stat. 562 [U. S. Comp. St. 1901, p. 3446],
amended by Act Coug. Feb. 5, 1903, c. 487, § 13, 32 Stat. 799 [U. S. Comp.
St. Supp. 1903, p. 416], the failure of the bankrupt to procure the release
of such levy did not constitute an act of bankruptcy.
2. Same.
Where counsel for one of the petitioning credltors of a bankrupt threat-
ened him with criminal proceedings unless the debt due was immediately
.j)aid, whereupon the bankrupt sold certain property for nearly its full
IN KE BELKNAP. 647
value to ralse money for the purpose at a tlme when his entire stock
was worth less than hls entire indebtedness, but the creditor afterwards
refused to receive the money, and Instltuted crimlnal proceedings, such
sale by the bankrupt did not constltute an act of bankruptcy within Bankr.
Act 1898, c. 541, § 3a, subds. 1, 2, 30 Stat. 546 [U. S. Oomp. St. 1901, p. 3422],
providing that the conveyance of property with intent to hinder, delay,
or defraud the bankrupt's credltors, or a transfer thereof while insolvent
with intent to prefer some creditors over others, shall constitute acts of
bankruptcy.
% Same— Removal of Propektt.
Where a creditor of a bankrupt removed certain goods from the bank-
rupt's store during the bankrupt's absence, and retained possession thereof
over the bankrupt's protest, the bankrupt's failure to take légal proceed-
ings to recover possession of the goods, in the absence of évidence of col-
lusion, did not constitute an act of bankruptcy within Bankr. Act July 1,
1898, c. 541, § 3a, subd. 1, 30 Stat. 546 [U. S. Comp. St. 1901, p. 3422], pro-
viding that the removal of any part of a bankrupt's property with his per-
mission, with intent to hinder, delay, and defraud credltors, shall consti-
tute an act of bankruptcy.
Isaac Hassler and J. Hector McNeal, for petitioning creditors.
John R. K. Scott and E. O. Michener, for alleged bankrupt.
J. B. McPHERSON, District Judge. This pétition was filed No-
vember 4, 1903, and sets fortli as the acts of bankruptcy that' Charles
F. Belknap did, "on the 2ist day of October, 1903, suffer and permit a
levy to be made at the instance of the Fidelity Trust Company, one of
his creditors, upon certain of his goods and chattels at 333 Chestnut
Street, which said goods will be exposed for sale under said levy at said
premises on November 4, 1903, thereby suffering and permitting, while
insolvent, a creditor to obtain a préférence through légal proceedings,
and not having, at least five days before the sale or final disposition of
any property affected by such préférence, vacated or discharged same ;
(2) that said Belknap has within four months last past conveyed, trans-
ferred, concealed, and removed part of his property with intent to
hinder, delay, and defraud his creditors, in that he has removed from
his premises almost ail of his effects, and concealed or disposed of the
same for the purpose of hindering, delaying, and defrauding his credit-
tors, and with said intent." The testimony shows that the first act of
bankruptcy thus set forth was not a levy under exécution, but was a dis-
traint of goods under a landlord's warrant, and the question is present-
ed whether such a levy is a "légal proceeding" within the meaning of
section 3a (3), Act July i, 1898, c. 541, 30 Stat. 546 [U. S. Comp. St.
1901, p. 3422]. I do not think it necessary to décide the question, how-
ever, because it is clear to my mind that no préférence was obtained
by the distress. A préférence is described by Act July i, 1898, c. 541,
§ 60, cl. "a," 30 Stat. 562 [U. S. Comp. St. 1901, p. 3446], as amended
in Act Feb. 5, 1903, c. 487, § 13, 32 Stat. 799 [U. S. Comp. St. Supp.
1903, p. 416], in the following language :
"A person shall be deemed to hâve given a préférence, If, being insolvent,
he has within four months before the fillng of the pétition, or after the filing
of the pétition and before adjudication, procured or suffered a judgment to
be entered against himself in favor of any person, or made a transfer of any
of his property, and the effect of the enforcemeut of such judgment or transfer
will be to enable anyone of his creditors to obtain a greater percentage of his
debt than any other of such creditors of the same class."
648 129 FEDERAL EEPOETER.
Passing without décision the further question whether a "judgment"
is to be so interpreted as to include a distress for rent, it is enough to
say, I thipk, that, even if this be true, the effect of the distress did net
enable the landlord to obtain a greater percentage of his debt than any
other créditer of the same class. There is no other creditor of the
same class, for there is but a single landlord; and, as the claira for
rent had priority over the claims of the gênerai creditors, the distress
did not enable the landlord to obtain a greater percentage of his debt.
The rent was entitled to be paid first out of the proceeds of the very
property upon which the distress was levied, whenever it should be sold
by the trustée, and therefore the distress gave no new right, but mereh-
hastened the tirae of payment. When he distrains, a landlord is simply
enforcing the priority which is given to him by law, and in no way gains
any improper advantage over other creditors by thus converting the
property into money more speedily. He may, of course, be restrained
f rom selling, if there are good reasons for such an order ; I am suppos-
ing that a sale has actually taken place.
The second act of bankruptcy is under section 3a (i) 30 Stat. 546
[U. S. Comp. St. 1901, p. 3422], and the facts with référence to this
charge are f ound by the référée as f oUows :
"Counsel for one of the petitionlng credltora went to Belknap, and threat-
ened him with criminal prdceedlugs uniess the debt due his client was irnme-
diately paid. Bellsnap then sold certain property to raise money for this pur-
pose, but the creditor afterwards refused to reçoive the money, and instltuted
criminal proceedings. Belknap dénies having sacrificed goods for that purpose,
saying that he obtalned for them not much less than their fuU value, but ad-
mitted that at the time his stock of goods was worth less than $25,000, the
amount of bis indebtedness."
As it seems to me, this transaction cannot be regarded as being the
act of bankruptcy described in section 3a (i). The intent to defraud is
essential imder this clause, and differs from the intent to prefer, which
is essential to the act of bankruptcy described in section 3a (2). The
proper distinction should be preserved between thèse two clauses. The
subject has been so satisfactorily discussed by Judge Archbald, of the
Middle District of Pennsylvania, in Githens v. Shiffler, 7 Am. Bankr.
Rep. 453, 112 Fed. 505, that I content myself with referring to his opin-
ion as a clear vindication of the conclusion that the facts hère do not
make out an intent to defraud. See, also, Re Mingo Valley Creamery
Ass'n, 4 Am. Bankr. Rep. 67, 100 Fed. 282. It is urged that Re Mor-
gan, 4 Am. Bankr. Rep. 402, loi Fed. 982, is an authority in support
of the opposite view, and it is true that some language in the opinion
will bear that construction. But an examination of the case discloses
a conipleted préférence in favor of two creditors, and it is certainly rea-
sonable to suppose that the court was speaking with référence to the
actual facts. But, even if I should be mistaken in this, Githens v.
Shiffler is of more weight in this circuit.
It also appeared that another creditor, named Wright, whose debt
was .ibout $6,000, came to Belknap's place of business upon one occa-
sion, and in Belknap's absence took about $1,200 of goods, and car-
ried them away to his own store, and retained possession of them in
spite of Belknap's protest. Belknap took no légal proceedings against
HEIDE V. WALLACE * CO. 649
Wright to recover possession of the goods, but the référée has found
that there was no évidence of collusion between Belknap and Wright,
and he declined to hold that upon thèse facts the further act of bank-
ruptcy described in section 3a (i) as permitting to be removed any part
of the bankrupt's property with intent to hinder, delay, or defraud his
creditors had been committed. Another support to his ruling may be
found in the f act that the pétition does not aver any such act of bank-
ruptcy ; and therefore, both for the reason given by the référée — with
whose finding of fact upon this subject I agrée — and also for the rea-
son that the pétition is silent upon the subject, the referee's décision was
undoubtedly correct.
The exceptions to his report are overruled, and, in accordance with
his recommendation, the pétition is dismissed, at the costs of the peti-
tioning creditors.
HEIDE V. WALLACB & CO.
(Circuit Court, D. New Jersey. May 6, 1904.)
1. Unfaie Compétition— Gbotjnds foe Equitable Relief.
ïlie use by 011e manufacturer to designate his product of a name pre-
viously in use by another does not alone constitute unfair compétition,
but, to justify a court of equity in interfering, there must also be such
an imitation of display or dressing as to deceive purchasers into buying
defendant's goods for those of complainant; fraud being the practical
basis of any such relief.
2< Same— Facts Considebed.
Complainant manufactures and sells in flve-eent packages a small con-
fection, composed chiefly of liquorice, under the name of "Liquorice Pas-
tilles." They are of diamond shape, and hâve embossed thereon the let-
ters "H-H." Défendants make and sell a similar article under the same
name, having the same size, color, and shape, and the letter "W" embossed
thereon. Eeld, that none of such facts, nor ail together, entltled complain-
ant to an injunction on the ground of unfair compétition, the name be-
ing descriptive, and having been previously used by others in substan-
tially the same form, and neither the shape of the confection, nor the
embossing of letters thereon, having originated with complainant; there
being no attempt by défendants to imitate his packages.
In Equity. Suit for unfair compétition. On final hearing.
William Raimond Baird and Stephen J. Cox, for complainant.
Louis C. Raegener, for défendant.
ARCHBALD, District Judge.^ This is a suit for alleged unfair com-
pétition. The complainant is successfully engaged in the manufacture
of candies and confections, among which is one, the principal ingrédient
of which is liquorice, attractively flavored, and put up in the form of
small diamond-shaped lozenges, embossed with his monogram "H— H."
Thèse lozenges he denominates and has extensively advertised as
"Liquorice Pastilles," and has chiefly sold them in small packages or
boxes, which retail at 5 cents each. As at présent on the market, the
H 1. Unfair compétition, see notes to Scheuer v. MuUer, 20 CSL C. A. 165 ;
Lare v. Harper & Bros., 30 C. C. A. 376.
iSpecially asslgned.
650 129 FEDBKAL REPORTEE.
coloring upon thèse boxes is mixed red, blue, and gilt, with the plain-
tiff's name prominently displayed upon them to indicate their origin.
The défendants also manufacture similar diamond-shaped confections,
on which the letter "W" is embossed, and which are put up in the
same-sized packages, also labeled "Liquorice Pastilles." The plaintiff
contends that this invades his rights, and has therefore brought suit to
restrain their infringement, and compel the défendants to account in
damages for the trade unfairly diverted from him.
After a careful considération of the various cases bearing on the sub-
ject, the conclusion was reached in Draper v. Skerrett (C. C.) Ii6 Fed.
206, that, to justify a court of equity in interfering in an alleged case
of unfair compétition, there must be something more than the mère
duplication by the one party oi the other's trade-name, and that this
was to be found in the deceptive use of imitative methods of display, or
other device by which the public are led into buying the infringer's
goods where they intended to buy those of the original producer ; the
fraud so perpetrated being a legitimate ground for équitable interfér-
ence, and the practical basis of it. It is by this standard that the com-
plainant's right to relief in the présent instance must be judged. Ste-
vens Linen Works v. Don & Co. (C. C.) 121 Fed. 171 ; Allen B. Wrisley
Ce. V. lowa Soap Co., 122 Fed. 796, 59 C. C. A. 54.
Ten différent points of resemblance between the plaintifï's goods and
those put out by the défendants are claimed. They hâve, as it is said,
the same name, "Liquorice Pastilles;" the same diamond shape; the
same embossing of letters ; the same mint flavor ; the same diminutiye
size ; the same black color ; the same combination of gum and liquorice ;
the same retail price, 5 cents; the same-sized box or package; and
practically much the same lettering thereon. But many of thèse are
forced, if not fanciful, and relate to matters which the complainant
could not expect, under any circumstances, to monopolize. His conten-
tion must be made out, if at ail, on the use by the défendants of the
words "Liquorice Pastilles" to designate their confections, and the adop-
tion of the diamond form, bearing an embossed initial letter, together
with any points of imitative display of which they may be guilty. If
thèse do not establish unfair compétition, there is nothing shown that
will ; the only significance of the others being as possible makeweights
to strengthen that idea. But analyzing the matter still further, it is
difficult to see how the plaintiff can claim the right to prohibit other
manufacturers from putting up this confection in diamond form, any
more than in a square, cube, oval, or drop. It is true that he has adopted
a diamond with his initiais, "H-H," as a trade-mark, and has denomi-
nated his goods, of which he has a great variety, "Diamond Confection-
€ry ;" but this does not give him a monopoly of that particular shape,
even if he was the first to employ it for liquorice compounds, which
he was not. Neither can he prevent others from stamping or embossin;;
an initial letter thereon, so long as it dôes not imitate the monogram
"H-H," which distinguisheg his productions. This device has been em-
ployed for the purpose of marking their goods by others in the same
trade, including the défendants, fully as long, if not longer, than the
complainant. Furthermore, except as thèse so-called pastilles are sold
in bulk, neither the form nor the lettering is brought to the attention of
HBIDB V. WALLACE A 00.
051
purchasers until after they hâve bought them; and while both, no
doubt, even so, might aid in an intended déception, it bas to be initially
induced and practically accomplished by the outside of the package, as
addressed to the eye of the customer, which is thus controUing.
The case, in this view, is brought dovvn to the use by the défendants
of the words "Liquorice Pastilles," and the manner they bave taken to
dress their packages. But so far as the former is concerned, the plain-
tif? has shown no exclusive right in the virords "Liquorice Pastilles" to
designate this class of goods. Liquorice is a well-known article of com-
merce; and "pastille," a French diminutive, meaning a little pièce of
paste ; and the two combined make a descriptive term in no v/ay par-
ticularly distinctive of the goods which the plaintiflE manufactures, any
more than others. But conceding, for the sake of argument, that if the
plaintiff was the first to employ the term, and had worked up a trade
under it, so that it had become specially indicative of his goods, others
might be compelled to abstain from their use, the fact is that he was
not the originator of the name, which was used, by not one, but several,
before and contemporaneously with him, applied to exactly the same
character of confections. As early as 1869, and for upwards of 20
years after that, the Roworth Manufacturing Company sold small
pièces of liquorice under the name of "Pastilles de Paris," and Duché
& Sons for 12 or 14 years past hâve sold round pièces stamped with
an eagle, and known as "Flexible Liquorice Pastilles." "Pastilles de
reglisse," which is the French for "liquorice," made by Florent & Co.,
of Avignon, France, hâve been imported into this country for up-
wards of 20 years ; and they are also made by Warric Bros., of Paris,
and by Wilkenson & Co., of London, but for just how long does not
appear. In the face of this démonstration, it cannot be successfuUy
contended that the term "Liquorice Pastille," which has been in such
long and familiar use, is distinctive of the plaintifï's manufacture. It is
only when he adds his name and trade-mark that we bave anything
that is, and thèse the défendants in no way imitate. Neither do they the
style or coloring with which he dresses out his package. This is in
mixed red and blue, set oiï with gilt, with the diamond trade-mark^y-
<?-';
Red represented by black.
Gold represented by Bliaded Unes IIIIIIIHU
Blue represented by stipple .*-'•> <.•.•, :-!'.it».'jv.T>»
White as shown.
prominently displayed ; while the defendant's package is predominantly
ycllow, with an entirely différent style of lettering in red, shaded with
white on a black background, with their name written below. There is
129 fBOERAL REPORTES.
nothing whatever to suggest an attempt to catch the unwary purcHaser,
and inveigle him into tâking the one when he was seeking the other ;
nor could the most careless be deceived, except as he was in reality
unconcerned as to whîch he got. It does not seem to me that, having
regard to thèse considérations, the complainant has a vestige of a case
or that the doctrine with respect to unfair compétition could be made
to apply to it, except by a most unwarranted extension and strain. Un-
doubtedly the complainant has extensively advertised thèse goods, and
it may be that the défendants are reaping some of the benefit of it. But
so long as he has seen fit to do so, employing the common and ordinary
name of "Liquorice Pastilles," he must take the ill results with the
good. He certainly cannot expect to enjoy a monopoly based solely
on that which he did not create.
What has been said with respect to the 5-cent boxes applies with even
greater force to the larger packages and the sales in bulk. Without
stopping to particularly discuss that feature of the case, this référence
will show that it has not been overlooked.
Let a decree be drawn dismissing the bill, with costs.
PALATO V. INTERNATIONAL SILVEB CO.
(Circuit Court, D. Connectlcut Aprll 21, 1904.)
No. 543.
L Masteb and Servant— Injtjey of Sebvant— Négligence of Fellow Serv-
ant. ^ , ,
Evidence considered, and heU to show that the injury of an employé
by the falling of the ram of an hydraullc press, which he was assisting to
repair, was not due to any defect in the appliances used, nor to the incom-
pétence of a fellow servant, but, so far as appeared, to liia négligence, for
which the master was not liable.
At Law.
Canfield & Judson, for plaintiff.
Seymour C. Loomis, for défendant
PLATT, District Judge. This is a hearing în damages after default,
under the state practice, in an action by Louis Palato to recover $3,000
damages for injuries which he cliums to- hâve suffered from the négli-
gence of the défendant, transferred from the state court for diversity of
dtizenship.
Having heard the évidence, I find the following facts :
On june 6, 1903, at the defendant's factory, in Derby, Conn., a cer-
tain hydraulic press became out of repair, and required repackmg.
The plaintiff had for many years been employed upon that press, and
at tinies upon a smaller one in the same room. Each press had required
repacking about once in six months, and the plaintiff had been présent
at and taken part in neariy ail such repackings, and was thoroughly ex-
perienced in ail the détails connected therewith. A necessary part of
such work was to lift out the ram or plunger which was used in con-
nection with the dies in stamping out the metaJ blanks. The ram was
PALATO V, IMTEBNATIONAL SIIiVEB 00. 653
drcular in form, with a diameter of about 17 inches, about 17 inches
in height, and weighed about 1,000 pounds. When in use, it was raised
by hydraulic pressure se that its upper surface reached the head of
the press, and then, by removing the upward pressure, was pemiitted
to fall of its ovvn weight upon the die below. The lower face of the
ram, when so raised that its upper surface reached the head of the
press, had a fall of about 1 1 inches bef ore it reached the face of the die,
which was set in a cylinder of practically the same diameter. Whiist
Ihe work of repacking was going on, the ram was controlled by a block .
and falls. The way of it was this: Above the room in which the
press stood was a small attic room, called the "fanroom." That room
was used to get the height necessary for the action of the lifting appar-
atus. There was a trapdoor immediately over the head of the press.
A pulley was securely fastened by an eyebolt screwed into the ceiling of
the fanroom. This could be raised and lowered somewhat, and, in
addition, a chain coul'd be suspended from a hook at the lower part
thereof. The chain was dropped down through the trapdoor, and
through a circular opening in the head of the press, a trifle larger than
the chain, into a like opening in the ram, where it was fastened by a
crossbar of steel. The length of this chain was then governed by a hitch
made over the hook suspended by the pulley. In each instance of re-
packing, the play of the pulley not being sufficient for the purpose, sev-
eral hitches were made up in the fanroom — sometimes three, sometimes
four, depending upon the number of times it was necessary to carry the
ram away from its central location, and toward the edge of the
press or beyond. The vitals of the case center around this hitch.
I will now describe briefly the actual proceedings on the day of the
accident: Edward J. Welch was the foreman in charge of the hydraulic
press work. It is conceded that he had not at the time sufficient ex-
périence to hâve attended to the hitches himself. He put several men at
work on the repacking. Abram N. Burke was put in charge of making
the hitches in the fanroom above. Palato and others worked on the
press in the room below. The ram was lifted out and taken to one side,
and then brought back several times; Burke attending to the hitches
in the fanroom. At last, while the ram was resting upon a circular
board, about two inches in thickness, placed over the cylinder, the chain
being still fastened to the ram by the steel boit, the signal was given
to Burke to lift the ram toward the head of the press by the pulley.
Just before that Palato says that he thought he saw a vibration, and
asked if the hitch was solid. Burke called out that it was ail right, and
the ram was lifted from its resting place. At the instant when it reached
the head of the press, Palato reached under the ram, with oiled waste in
his hand, and began to wipe off the undersurface of the ram. As he
did so, the ram fell upon the circular board, and mangled his arm from
the wrist to the elbow. Fortunately the ram began to tip sideways
when it came upon the board, and, with Welch's assistance, the weight
was removed from Palato's arm.
No bones were broken, but the contusion was serions ; and, in dis-
cussing the extent of the injury, the plaintifï claims that the nerves
were seriously and probably permanently injured, so that the arm can
never be used again with its normal power, and the défendant insists
654 129 FHDBEAL REPORTEE.
that the înjury was mâinly in the ligaments and muscles, which hâve
practically recovered their normal use, and that he is on the high road
to full recovery. In that part of the case, it was important to establish
the existence of a certain bony growth near the elbow socket, and, as
bearing upon that question, certain X-ray pictures, called "skyographs,"
were admitted in évidence.
The case turns upon the kind of hitch which it was safe to use, upon
Burke's competency to make the hitch, and upon Palato's carelessness
in reaching his arm under the ram to wipe it, when the situation an in-
stant before had been such as to suggest to him that the danger was
approaching which did in fact reach him in the twinkling of an eye.
Burke was in the fanroom alone, and made the hitches. He made the
hitch in this way: A link chain of sufficient strength, 6 feet and 9
inches long, having been attached to the ram below as heretofore de-
scribed, was thrown over the hook in such a manner that the chain
was supported by the hook above its heel, and crossed in the dip of the
hook below and opposite ; the f ree end falling first across the dip, and
the weight-carrying portion lying upon the free portion. By this sim-
ple device, it is évident that, owing to the force of friction, the chain
can carry the full weight of its capacity, and, the greater the weight, the
greater the security. It is a well-known hitch, in common use among
practical engineers and mechanics, called the "Blackwall Hitch," and can
be found described in any well-known text-book touching on such mat-
ters. It is easily understood by a man of fair intelligence. I find as
a fact that the hitch used was a proper one in the circumstances, and
that Burke was a compétent man to be employed in making it. His
expérience with the hitch was sufficient, and the master was not négli-
gent in intrusting the management of it to him. Palato had made
hitches in former years, but, owing to the loss of some fingers about
four years before the accident, had been forced to desist. One Silvester
had also attended to the hitches on many prior occasions. Both of
thèse men gave évidence that in making the hitches they had always
used a double hitch, to wit, had thrown the chain twice around and
above the heel of the hook, which they insisted increased the security
of the fastening, but I am unable to accept their statements as true.
The surrounding and underlying facts and circumstances belie the
statements as to the way they had made the hitch, and it is not apparent
that absolute security, or even that better security, would resuit from
the double hitch. Burke testified that he made the hitch as he had
made it on several former repackings, and as he had seen Silvester and
Palato make it. I am entirely satisfîed, from the appearance of the
witnesses, and from their manner when testifying, and from other évi-
dence, and from the gênerai situation, that Burke told the truth when
he so testified. Ail the appliances are conceded to hâve been proper,
and I find that Burke was fit and compétent to adjust the appliances.
It is contended that the single hitch is vmsafe when the tension is not
uniform, that the évidence in this case shows clearly that the tension
was not uniform, and that therefore its adoption makes the master lia-
ble. The difficulty with that contention is this : It is proven, and I
find as a fact, that after each hitch was made the tension was uniform- —
varying, it is true, in intensity, but existing nevertheless to some ex-
THE EXPRESS. €55
tent — until the next occasion arose for carrying the ram away from its
central position. Then the chain was loosened to permit the removal,
but upon its retum a new hitch was necessary, and from that time no
sufïicient lack of tension could exist to enable the chain to slip below
the heel of the hook if adjusted above the heef. At the time of the ac-
cident it had served to lift the ram upward some ii inches from its
resting place. The single hitch was adaptable in the circumstances,
and beyond valid criticism. The trouble came, not from the character
of the hitch, but, if the évidence points to any clearly defined cause,
from the failure of a compétent man to make the singl'e hitch as he
should and could make it, coupled with a very careless act on the part
of the plaintifï, in attempting to wipe the undersurface of a half ton
weight the instant after something had suggested to him the possibility
of danger. So far as the master is concerned, it was the inévitable mis-
take which can be found now and then in the doings of the most careful
and compétent men, and to charge the accident to it would be to hold
it an insurer. In many previous trials it had not occurred, and I am led
at this moment to add one word in closing : I hâve taken into consid-
ération évidence tending to show that the master has, since the accident,
found a way to make assurance doubly sure, and has adopted that meth-
od. Perhaps I ought not to hâve admitted the évidence, but the plain-
tifï cannot complain. If the défendant has adopted such a contrivance,
its action is humane and creditable, but by reason thereof it ought not to
be punished for its former method, which was in exact harmony with
the best expérience of the times.
It follows that the master discharged the duty which the law im-
poses upon it, and the plaintifï is only entitled to nominal damages.
Let judgment be entered for $25 and costs.
THE EXPRESS.
(District Court, S. D. New York. May 2, 1904.)
1. Seamek— Wages— Penaltt foe Refusing to Pay without Sufficient
Cause.
Libelants were hired as deck hands on a steamer making dally trips
between New York and another port at $30 per month, and after working
six days left the service without the consent of the master. Held, that the
refusai of the owner to pay them wages for the time they worked did
not subject him to the penalty Imposed by Rev. St. | 4529, as amended
U. S. Comp. St. 1901, p. 3077, for refusing and neglecting to pay seaman's
wages when due without sufflcient cause, there being reasonable ground,
at least, for the owner's clalm that libelants' contract was one from
month to month, and that they had no right to abandon the service before
the end of the month.
In Admiralty. Suit to recover seamen's wages.
Richard D. Currier, for libelants.
James J. Macklin, for claimant.
HOLT, District Judge. This is a libel for seamen's wages. The
amount sued for is small, but the question of statutory construction
involved is of some importance. The libel was filed by Higgins and
6S6 129 FBDEKAL EEPOETEE.
Buckley, who were employed by the master of the steamer Express to
work as deckhands for $30 a month. The steamer made daily trips
from New York to Newark and back. Libelants began work on Oc-
tober 14, 1903, and left the vessel, without the master's consent, on
October 20th. I understand it to be admitted that the claimant has
settled with Higgins. Buckley has been paid $1. He claims to be
entitled to recover $5 still due for wages, and a dollar a day since,
under the statute imposing that penalty for neglect to pay seamen's
wages when due without sufficient cause. Rev. St. U. S. § 4529; Act
Dec. 21, 1898, c. 28, § 4, 30 Stat. 756 [U. S. Comp. St. 1901, p. 3077].
The claimant refused to pay at first, on the ground that Buckley had
no right to abandon the service until the end of the month, but in the
answer has ofïered to pay the $5, but dénies liability for the penalty.
The sole question, therefore, is whether the penalty is due. In my
opinion, the penalty cannot be recovered in this case. In the first
place, the libel does not allège any facts showing tbat the refusai was
without sufficient cause. In the next place, I think that there were
reasonable grounds for the claim that this was a contract of employ-
ment from month to month. There are cases that hold that it is the
custom at the port of New York that men engaged to work on vessels
employed about the harbor may be discharged or may leave at any
time, although their wages may hâve been fixed at a certain rate per
month. Moore v. Neafie (D. C.) 3 Fed. 650 ; Disbrow v. The Walsh
Brothers (D. C.) 36 Fed. 607. But this usage, in my opinion, only
applies to men working on vessels employed about the harbor, making
no regular voyages or trips. The gênerai rule in admiralty is that a
sailor who agrées to serve on a ship, without specifying any particular
time, ships for the voyage; but I think that that rule would hardly
apply in the case of a steamboat making regular daily trips between
two ports. It is important in such a case that the employmient should
be steady and continuons, and I see no reason why, if a man makes
a contract to work upon such a vessel at a certain amount per month,
the contract should not receive its natural construction of being a
contract by the month. At ail events, the claimH,nt asserted that that
was the agreement, and that the men had no right, arbitrarily and with-
out cause, after six days' service, to leave the ship. That was a fair
question of controversy, and the refusai to pay under such circum-
stances was not, in my opinion, a refusai without sufficient cause,
within the meaning of the statute. The statute is a pénal statute, in-
tended to punish masters of vessels who, without any just excuse, ar-
bitrarily refuse to pay seamen their wages when due.
My conclusion is that there should be a: decree for the libelant Buck-
ley for $5. As the substantial question in controversy has been de-
cided in favor of the claimant, the libelant should not recover costs.
PEPIN TP. V. SAOE. 657
PEPIN TP. et al. V. SAGE.
(Circuit Court of Appeals, Eighth Circuit. Aprll 14. 1904.)
No. 1,887.
1. Municipal Coepoeations— Bffect of Dissolution— Laws of Minnesota.
Sections 33, 34, ingrafted on article 4 of the Constitution of Minnesota
by way of amendment in 1892, prohlbit the passage of any local or spé-
cial law regulating the afCairs of, or incorporating, erecting, or changing
the Unes of, any county, city, village, township, ward, or school district,
but provide that the Législature may repeal any existing spécial or local
law, and that It shall provide gênerai laws for the transaction of any
business so prohibited. Gen. St. Mlnn. 1894, § 258, provides that when-
ever à law is repealed which repealed a former law the former law shall
not thereby be revived unless It is so specially provided. In 1868 a vil-
lage was created by a spécial act from territory lyipg partly within a
city and partly within a township previously created. The act creating
the village made no référence to the city or township, their boundaries,
or the statutes defining them. In 1895 the spécial act creating the village
was repealed. Held, that the constitutional and statutory provisions cited
had no application to such repealing act ; that the statutes creating the
city and township and defining their boundaries were not repealed by
the act creating the village, the effect of which was to except the ter-
ritory covered by It from the city and township, and from the opération
of the statutes creating them, which exception ended when such act was
repealed, leaving the territory within the city and township as before Its
enactment
2. Same.
The express authorlty for the repeal of any existing spécial or local
law conferred by the provlso to the constitutional amendment Is a lim-
itation upon the inhibition against the passage of spécial or local laws,
and withdraws such repealing acts, as well as the changes necessarily
wrought in existing conditions, by giving them their ordlnary légal effect,
from the opération of that inhibition; and hence the act repealing the
law creating the village Is not to be construed as one changing the bound-
ary Unes of the city and township, but merely as releasing the territory
previously excepted from their jurisdlctlon by the act repealed, upon
which it again came within their jurisdlctlon by virtue of the valld and
subsisting statutes creating them and defining their boundaries.
3. Statutes— Effect or Repeal.
Gen. St. Minn. 1894, § 258, provldlng that the repeal of a law repealing
a former law shall not revive the former law unless so expressly pro-
vided, applies only to cases of absolute repeal, and not to cases where the
law repealed merely ingrafted an exception on a prior law, leaving It in
force. In such cases the repeal leaves the former law to be applied
■wlthout the exception.
4. Municipal Corporations— Dissolution—Apportionment of Indebted-
NESS.
In the absence of constitutional limitation It Is wholly within the power
of a Législature on the dissolution of a municipal corporation and the
transfer of Its territory to others to apportion its indebtedness between
Buch others, and to détermine what proportion shall be borne by each ;
but In the absence of such apportionment they wlll be severally liable in
proportion to the value of the taxable property of the dissolved corpora-
tion which falls within their boundaries respectlvely, and the power of
taxation to be exercised to pay such debts wlll extend to ail the taxable
property within their respective jurisdictions.
11 4. Dissolution and reincorporation of municipal corporations — Effect on
indebtedness — see note to City of Uvalde v. Spier, 33 C. C. A. 506.
See Municipal Corporations, vol. 36, Cent. Dig. §§ 107, 109.
129 F.-^2
658 129 FÈDElBAL REPORTER.
5. Statutes—Constitutionality— Spécial Législation.
Oonst. Minn. art. 4, § 33, which prohibits the enactment of spécial laws
where a gênerai law can be made applicable, bas in numerous décisions
been construed by the Suprême Court of the state, which has uniformly
held that a law based on a classification purely arbitrary and not justl-
fied by some apparent natural reason, was within the prohibition. Act
April 10, 1901 (Laws 1901, p. 279, c. 201), provides, in effect, that where
a munlcipality created by spécial act, and having outstanding bonds or
other written obligations, has been or shall be dissolved by the repeal of
the act creating it, the efCect of which is to attach its territory to one or
more existing municipallties, such Indebtedness shall be enforceable solely
against the territory which was responsible for its payment at the tlme
of the repeal. Held, that under the rule of the Suprême Court such act
is spécial législation, and void, there being no natural reason why a dis-
tinction should be made between municipal corporations created by spé-
cial act and dissolved by its repeal and those created and dissolved under
the gênerai laws of the state, which hâve long existed, and provide both
for the création and dissolution of such corporations ; nor between "bonds
or other written obligations" and other forms of indebtedness in respect
to the property which shall be chargea with payment on dissolution.
6. Bqtjity— Lâches.
An owner of bonds issued by a village, who commenced an action there-
on before the expiration of the period of limitation, and obtained a judg-
ment against the village, which was afterward adjudged in quo warrante
proceedings to hâve been dissolved by a prior act of the Législature, and
who, within two years after obtaining his judgment, and within one year
after the judgment of ouster, commenced a new suit in equity against
the successors of the village, based on his judgment, was not chargeable
with lâches.
Appeal from the Circuit Court of the United States for the Dis-
trict of Minnesota.
John E. Stryker (J. F. McGovern, John W. Murdoch, and Michael
Marx, on the brief), for appellants.
George H. Selover (Owen Morris, on the brief), for appellee.
Before SANBORN, THAYËR, and VAN DEVANTER, Circuit
Judges.
VAN DEVANTER, Circuit Judge. This is an appeal from a de-
cree charging the township of Pépin and the city of Wabasha, in tlie
state of Minnesota, as the successors of the late village of Reads, in
that state, with the payment of bonds issued by the village during its
corporate existence, and apportioning the debt between the succeed-
ing municipallties in the proportion that the taxable value of the
property falling within each by reason of the dissolution of the vil-
lage bears to the taxable value of the entire property within the vil-
lage at the time of its dissolution. The facts are, briefly, as follows ;
The village of Reads was created by a spécial act approved March
5, 1868 (Sp. Laws 1868, p. 261, c. 34), out of territory partly within
the township of Pépin and partly within the city of Wabasha. The
bonds were issued by that village under authority of spécial acts ap-
proved March 6, 1868 (Sp. Laws 1868, p. 29, c. 16), and March 5.
1869 (Sp. Laws 1869, p. 211, c. 37), by the first of which it is pro-
vided that the faith of the village "or the municipal corporation
which may succeed it" shall be pledged for the payment of the prin-
cipal and interest of the bonds, and that to make such payment taxes
PEPIN TP. V. SAGE. 659
shall be levied and collected upon the taxable property of the vil-
lage in the same manner as other taxes are levied and collected in
the village "or the municipal corporation which shall succeed it."
Before the actual issuance of the bonds, but after their issuance was
authorized by statute and by a vote of the electors of the village, a
spécial act, approved March 5, 1869, again placed in the city of Wab-
asha the portion of the village which had been taken from the city
when the village was created. A spécial act approved January 29,
1891 (Sp. Laws 1891, p. 5S1, c. 51), returned to the village the ter-
ritory originally taken from the city, and from then until its disso-
lution the village covered the identical territory over which it was
first erected. The charter or spécial law under which the village
v/as created was repealed and the village dissolved by an act ap-
proved April 22, 1895 (Laws 1895, p. 798, c. 390), and taking efïect
February 6, 1896. Acting under the behef, generally shared by ail,
that this statute did not dissolve or disorganize the village, its inhab-
itants continued to elect officers, and through them to transàct the
business of the village and to govern its territory and people as
theretofore until in 1899, when in proceedings in the nature of quo
warrante prosecuted by the state a judgment of ouster was rendered
against the village and those acting as its ofïîcers. State ex rel. v. Vil-
lage of Reads, 76 Minn. 69, 78 N. W. 883. In 1897 appellee commenced
an action in the court below against the village to recover the unpaid
principal and interest of ail of the bonds, excepting one not then
due. The action was defended on behalf of the village by the per-
sons claiming to be and acting as its officers, and July 13, -1898, re-
sulted in a judgment for appellee and against the village for the
amount due upon the matured bonds. There were seven of the
bonds. One matured each year beginning July 1, 1892. The prés-
ent suit was commenced April 24, 1900. Three questions are pre-
sented : (1) Did the territory of the village, upon its dissolution, fall
within the township of Pépin and the city of Wabasha, and make
them the successors of the village, each to the extent that it received
the territory of the village? (2) Is the act of April 10, 1901 (Laws
Minn. 1901, p. 279, c. 201), entitled "An act providing a method for
the payment of the debts of dissolved municipalities," a valid law
under sections 33 and 34 of article 4 of the Constitution of the state,
and does it restrict the enforcement of the debt in question to the
territory which was responsible for its payment at the time of the
dissolution of the village ? (3) Is part of appellee's claim barred by
lâches? It is not questioned that appellee's remedy is in equity.
The présent suit strongly resembles and has closely followed the
one shown in Mount Pleasant v. Beckwith, 100 U. S. 514, 25 L. Ed.
699, where it was determined, in the absence of constitutional re-
strictions : (1) The création, division, and dissolution of municipal
corporations, and the powers to be exercised by them, are subject
to the législative control of the state creating them. (2) Where one
municipality is legislated out of existence, and its territory is annexed
to other municipal corporations, it belongs wholly to the Législature
to apportion between them the debts of the dissolved municipality,
and to détermine what proportion shall be borne by each; but in the
660 129 FEDERAL EEPOETEE.
absence of such législation the municipal corporations receiving the
territory of the one dissolved will be severally liablç for its then sub-
sisting légal debts in the proportion that the taxable property with-
in it falls within them respectively, and the power of taxation to be
exercised to pay such debts will extend to ail the taxable property
within their respective jurisdictions, and will not be restricted to the
property and persons within the territory annexed. Other cases of
similar import are Broughton v. Pensacola, 93 U. S. 266, 23 L. Ed.
896; Meriwether v. Garrett, 102 U. S. 472, 26 L. Ed. 197; Mobile
V. Watson, 116 U. S. 289, 6 Sup. Ct. 398, 29 L. Ed. 630; United
States ex rel. v. Port of Mobile (C. C.) 12 Fed. 768 ; Brewis v. Du-
luth (C. C.) 13 Fed. 331; Laird v. De Soto (C. C.) 22 Fed. 421. The
principles announced and applied in Mount Pleasant v. Beckwith
are in full accord witli the décisions of the Suprême Court of the
State of Minnesota, so far as that court bas spoken upon the subject.
State V. City of Lake City, 25 Minn. 404, 414; City of Winona v.
School District, 40 Minn. 13, 16, 41 N. W. 539, 3 L. R. A. 46, 12 Am.
St. Rep. 687. Counsel for appellants practically concède that the
law is as just stated, and they rely upon certain provisions of the Con-
stitution and statutes of Minnesota as controlling in the présent case.
Their first contention is that the territory within the village of Reads
did not, upon its dissolution, fall within or become part of the tovi^n-
ship of Pépin and the city of Wabasha, and therefore the township
and city are not the succcssors of the village, and are not charged
with the payment of its debts. To support the contention they cite
sections '33 and 34, ingrafted upon article 4 of the state Constitution
by way of amendment in November, 1892, and section 258, Gen. St.
1894. So far as material, thèse are as follows :
"Sec. 33. In ail cases wlien a gênerai law can be made applicable no spécial
law shall be enacted ; and whetlier a gênerai law could hâve been made appli-
cable in any case is hereby declared a judiclal question, and as such shall
be judicially determined without regard to any législative assertion on that
subject. The Législature shall pass no local or spécial law regnlating the
affairs of, or Incorporating, erecting or changing the lines of any county,
city, village, township, ward or school district. * * • Provided, however,
that the inhibition of local or spécial laws in this section shall not be con-
strued to prevent the passage of gênerai laws on any of the subjects enumer-
ated. The Législature may repeal any existing spécial or local law, but shall
not amend, extend or modify any of the same.
"Sec. 34. The Législature shall provide gênerai laws for the transaction
of any business that may be prohibited by section one of this amendment
[Sec. 33], and ail such laws shall be uniform in their opération throughout the
State."
"Sec. 258. Whenever a law is repealed which repealed a former law, the
former law shall not thereby be revived, unless it is so specially provided."
We think thèse provisions are not applicable to the act dissolving
the village. Originally the township and city included the territory
in question, and the spécial acts which placed it within the village
contain no référence whatever to the township or city, or to their
boundary lines, or to the statutes defining them. The statutes cre-
ating the township and the city were not at any time repealed, but
were left in force. The township and the city were not at any time
extinguished, but remained in existence under the opération of those
PEPIN TP. V. SlàGE. 661
statutes. The effect of the spécial acts creating the village and de-
fining its boundaries was to except the territory covered by it from
the township and the city and from the opération of the statutes cre-
ating them. Subject to that exception, the législative will, as at ail
times registered and expressed in living, operative, and valid stat-
utes — not enactments entirely repealed, either expressly or by impH-
cation — placed this territory in the township and city. When the
spécial acts which by implication put that exception upon thèse stat-
utes were repealed, the exception was at an end. Thèse statutes and
their définition of the boundaries of the township and city were then
operative as if there had been no exception. They did not need to
be revived because they had not been repealed. Nor was any amend-
ment, extension, or modification of them necessary to give them
efïective opération over the territory of the extinguished village.
While carefully prohibiting the passage of local or spécial laws, in-
cluding those changing the boundary Unes of any city, village, or
township, the amendment to the Constitution expressly permits the
repeal of existing laws of that character, and impliedly, but not less
certainly, permits the repeal to hâve the usual or ordinary eflfect of
such a statute. This repealing act is confined to a direct annulment
of the charter or spécial law creating the village and makes no at-
tempt at any affirmative législation or to give to the repeal any other
than the usual or ordinary efïect.
In respect of the constitutional provisions cited, our opinion may
be stated in this manner : The express authority for the repeal of
"any existing spécial or local law" is a limitation upon the inhibition
against the passage of spécial or local laws, and withdraws such re-
pealing acts from the opération of that inhibition. The act repealing
the charter or law creating the village of Reads is within the express
authorization, and is to be given the usual or ordinary légal effect of
such an act. The changes wrought in existing conditions by giving
this effect to an authorized repealing act are also within the express
authorization, and not within the inhibition. Upon the dissolution
of the village the territory embraced therein became part of the town-
ship of Pépin and the city of Wabasha, not because the repealing act
changed the boundary lines of the township or city, but because it
released that territory from the excepting effect of the charter or
law creating the village ; and when this was donc that territory came
within the boundaries of the township and city as theretofore law-
fuUy defined, by valid statutes still subsisting, and therefore became
part of the township and city, and was brought within their jurisdic-
tion. In other words, while this territory was released from the ef-
fect of the village charter by the repealing act, it resumed its place
in the township and city by reason of the statutes creating them and
defining their boundaries. Of course, this resuit would not hâve fol-
lowed if thèse statutes had been repealed in the meantime, or if the
act repealing the village charter had provided — if it could do so with-
out violating the inhibition against spécial or local laws — that the
territorj' and inhabitants within the limits and jurisdiction of the vil-
lage should be resolved into the body of the state, and be subjected
to its immédiate control.
662 129 FEDERAL BEPOKTER.
What has been said seems in principle to aiso dispose of the con-
tention in respect of the effect of section 258, Gen. St. 1894, before
quoted, but it may be well to notice the construction uniformly given
to sirnilar statutes prescribing a rule for determining the efïect of a
repealing act. Perhaps the first of the cases is Brown v. Barry, 3
Dali. 365, 1 L. Ed. 638. An act of Virginia adopted in 1793 expressly
repealed a prior act. A third act declared that the opération of the
repealing statute should be suspended for the time being. In 1789
a statute like section 358 had been adopted, and the contention was
that it prevented the repealed statute from being revived by the sus-
pension of the repealing act. The court, speaking through the chief
justice, said:
"The act suspending the repealing act of November, 1792, Is not within the
act of 1789, which déclares that the repeal of a repealing act shall not revive
the act first repealed. The suspension of an act for a limited time is not a
repeal of it ; and the act of 1789, being in dérogation of the common law, is to
be taken strictly."
Sinith V. Hoyt, 14 Wis. 273, presented the question in this way:
A gênerai statute required the défendant in civil actions to answer in
30 days. An act adopted in 1858 (Laws 1858, p. 134, c. 113) gave
the défendant in foreclosure suits six months in which to answer.
This was repealed by a still later act. The contention was that the
first statute was repealed by the act of 1858 as to foreclosure suits,
and that upon the repeal of that act a statute hke section 358 prevent-
ed the revival of the statute first named. The court held the conten-
tion untenable, and, after declaring that the act of 1858 did not strict-
ly repeal the first or gênerai statute but merely excepted a class of
cases from its opération, said (page 277) :
"That being so, vphere the statute creating the exception Is repealed, the
gênerai statute which was in force ail the time would then be applicable to
ail cases aecording to its terms. And this would be no violation of the rule
of construction before referred to, that the repeal of a repealing act should
not revive the act repealed. The act of 1858 was équivalent to a proviso at-
tached to the gênerai rule that it should not be applicable to foreclosure de-
fendants. But If a proviso creating an exception to the gênerai terms of
a statute should be repealed, courts would be afterwards bound to give efCect
to it aecording to those gênerai terms, as though the proviso had never ex-
Isted, And this could not be said to revive a repealed statute. The rule
against this relates to cases of absolute repeal, and not to cases where a
statute Is left In force, and ail that is done in the way of repeal is to exeept
certain cases from its opération. In such cases the statute does not need to
be revived, for It remains in force, and the exception being taken away, the
statute is afterwards to be applled without the exception."
West Virginia has such a statutory provision respecting the efifect
of the repeal of a repealing act. In holding it inapplicable to the
repealing act then under considération, it was said by the Suprême
Court of Appeals of that state in State v. Mines, 38 W. Va. 135, 131,
18 S. E. 470, 473:
"Now, as I remarked above, section 20 of ehapter 35 of the Code was broad
and comprehenslve, applying every statute of limitation against the state.
The act of 1875 [Acts 1875, p. 118, c. 55] only changed or modiiied It to a cer-
tain extent — that is, prevented its opération as to judgments and claims of
the state, leaving It in ail other respects operative — simply made an excep-
tion to the generality of the opération of the statute; and when that act
PEPIN TP. r. SAGE. 663
was Itself repealed, and the exception or limitation was no longer In force,
said section 20 opérâtes free of that exception. It was only a partial abroga-
tion of section 20. It would liave been différent, had it been a total abroga-
tion."
Other décisions to the same effect are State v. Sawell, 107 Wis.
300, 83 N. W. 296; Edworthy v. Savings Ass'n, 114 lowa, 220, 223,
86 N. W. 315 ; Glaholm v. Barker, L. R. 1 Ch. App. 223 ; Mount v.
Taylor, L. R. 3 C. P. 645. It is clear that, within the meaning of sec-
tion 258, the statutes creating the township and city and defining their
boundaries were not repealed by the charter or law creating the vil-
lage, and that the repeal of the latter présents no occasion or oppor-
tunity to apply the rule stated in that section.
We are of opinion that the territory of the village, upon its disso-
lution, fell within the township and city, and made them the succes-
sors of the village. But it is urged upon us that this results in trans-
ferring the debts of one community to other communities which had
no voice in the création of the debts or in their transfer. In one sensé
that is true, but the resuit of a ruling to the contrary would be dis-
tressing to contemplate. It would amount to a déclaration that the
state extinguished one of its municipalities under circumstances
which make proceedings for the collection and payment of the mu-
nicipal debts impossible. A resuit which imputes to a state such an
indifférence to the claims of justice and to the lawful engagements
of the municipalities under its control is not permissible where an-
other is possible under the law. The circumstances of this case do
not permit such an imputation. The answer to the présent insistence
is given in Mount Pleasant v. Beckwith, supra, where the court said
(pages 529, 531, 100 U. S., 25 L. Ed. 699) :
"But in ail thèse cases, If the extinguished munlclpallty owes outstanding
debts, it will be presumed in every such case that the Législature Intended
that the liabilities as well as the rights of property of the corporation which
thereby ceases to exist shall accompany the territory and property into the
jurisdiction to which the territory is annexed. * * * Power exists hère
in the Législature not only to fix the boundaries of such a municipality when
incorporated, but to enlarge or diminish the same subsequently, without the
consent of the résidents, by annexation or set-off, unless restralned by the
Constitution, even against the remonstrance of every property holder and
voter within the limlts of the original municipality. Property set ofl or an-
nexed may be benefited or burdened by the change, and the liability of the
résidents to taxation may be increased or diminished ; but the question in
every case is entirely within the control of the Législature, and, if no provi-
sion is made, every one must submit to the will of the state, as expressed
through the législative department. Inconvenience will be suffered by some,
while others will be greatly benefited in that regard by the change. Nor Is It
any objection to the exercise of the power that the property annexed or set
ofE will be subjected to increased taxation, or that the town from which It is
taken or to which it is annexed will be benefited or prejudiced, unless the
Constitution prohibits the change, since It is a matter, in the absence of con-
stitutional restriction, which belongs wholly to the Législature to détermine."
April 10, 1901, the Législature of the state enacted a statute enti-
tled "an act providing a method for the payment of the debts of dis-
solved municipalities (Laws 1901, p. 279, c. 201)" which is as follows :
"Section 1. That In ail cases in which the Législature of the state of Min-
nesota bas repealed, or may hereafter repeal the charter of any city, village,
borough, or other municipality, or the spécial law under which the same is.
664 129 FEDERAL REPORTER.
or was, organlzed, or created, agalnst which munlcipallty tLere are outstand-
Ing bonds or other wrltten obligations whlch are, at the time of sucb repeal,
a légal and enforeeable clalm against the municipallty afCeeted by sueh repeal,
without making, or having made, any provision for the payment of such
indebtedness, and the effect of such repeal is to attach the territory of the
municipallty so dissolved to one or more munieipalities existing at the tinie
of such repeal, said indebtedness shall be and continue to be enforeeable solely
•iigainst the territory which was responsible for the payment of the same at
the time of said repeal, and it shall be the duties of the proper offlcers of the
municipallty, or munieipalities, whlch acquire the territory of the dissolved
municipallty, to levy such tax or taxes upon the property and territory com-
ing within its or thelr jurisdlction, by reason of such repeal for the payment
or discharge of such outstanding indebtedness, and to coUect, receive and
apply the same in such payment of such indebtedness in practically the same
manner as would bave been the duty of the proper offlcers of the dissolved
municipallty to levy taxes for the payment of said indebtedness, and to col-
leet, receive and dlsburse the same, had there been no repeal of said charter
or spécial law. And the territory so attached to such municipallty or mu-
nieipalities shall not be liable for any of the debts of such municipallty or
munieipalities existing at the time of the repeal of said charter or spécial
law, but ail such debts shall continue a demand solely against the municipallty
or territory which was llable for the payment of the same at the time of said
repeal.
"Sec. 2. This act shall apply to ail cases falling within its provisions in
which judgment bas not already been recovered by the owner or holder of
such bonds, or other forms of indebtedness as are described in section one
of this act, against the municipallty or munieipalities acquirlng the territory
of the dissolved municipallty."
The second contention of counsel for appellants rests upon this
act, and is that the enforcement of the debt in question should be re-
stricted to the territory which was responsible for its payment at the
time of the dissolution of the village, and that the decree against the
succeeding munieipalities should be Hmited to requiring "the assess-
ment, levy and collection of a tax upon the property situate within
the boundaries of the dissolved municipality for the purpose of pay-
ing the amount which appellee is entitled to recover." Counsel for
appellee challenge the validity of this act under the provisions of sec-
tions 33 and 34 of article 4 of the state Constitution, before quoted.
The claim is that it is not a gênerai law, and does not hâve uniform
opération throughout the state. This act has not been considered
by the Suprême Court of the state, but the principles by which its
validity is to be tested are well settled by the décisions of that court,
among which are Nichols v. Walter, 37 Minn. 264, 33 N. W. 800 ;
State ex rel. v. Cooley, 56 Minn. 540, 58 N. W. 150 ; State ex rel. v.
Ritt, 76 Minn. 531, 79 N. W. 535; Murray v. Commissioners, 81
Minn. 359, 84 N. W. 103, 51 h. R. A. 828, 83 Am. St. Rep. 379 ; Du-
luth Banking Co. v. Koon, 81 Minn. 486, 84 N. W. 335 ; Hetland v.
Commissioners (Minn.) 95 N. W. 305 ; State ex rel. v. Justice (Minn.)
97 N. W. 124 ; Thomas v. St. Cloud (Minn.) 97 N. W. 125. In Nichols
V. Walter, an act regulating the removal of county seats was held not
gênerai, or of uniform opération, because the terms of the act were
such that in any county which had located its county seat by a vote of
its electors at any time before the passage of the act removal could be
effected only by a vote of three-fifths of the electors, while in other
counties removal could be had upon a majority vote. The court was
of opinion that the basis of the classification was arbitrary, and that the
PEPIN TP. V. SAGE. 665
application of différent rules to the two classes of counties was not
grounded in necessity or propriety. Referring to the constitutional
limitation, it was said (page 371, 37 Minn., page 802, 33 N. W.) :
"A law Is gênerai and uniform in its opération which opérâtes equally upon
ail the subjects within the class of subjects for which the rule is adopted ;
but, as we hâve said, the Législature cannot adopt a mère arbitrary classifi-
cation, even though the law be made to operate equally upon each subject of
each of the classes adopted. An illustration and example of that we take
f rom State v. Hammer, 42 N. J. Law, 435, 440 : 'Thus a law enacting that In
every city in the state in which there are ten churches there should be three
commlssioners of the water department, with certain prescrlbed duties,' would
présent a spécimen of such a law. So in the matter we hâve supposed, of
granting powers and privilèges to incorporated villages, If those situated on
ri vers were placed in a class for the purpose of conferring on them spécial
powers and privilèges not referring to nor suggested by the peculiarity of their
situation — as, for instance, for the purpose of maintaining high schools — the
classification would be merely arbitrary. The princlple adopted by the Su-
prême Court of New Jersey comes more nearly to what we regard the true
principle of classification than that stated by any other court. We quote again
f rom State v. Hammer : 'But the true principle requires something more than
mère désignation by such charaeteristies as will serve to classify, for the
characteristics which thus serve as the basis for classification must be of such
a nature as to mark the objects bo designated as peculiarly requiring exclu-
sive législature. There must be a substantial distinction, having référence
to the subject-matter of the proposed législation, between the objects or places
embraced in such législation and the objects or places excluded. The marks
of distinction on which the classification is founded must be such, in the
nature of things, as will, in some reasonable degree at least, aceount for or
justify the restriction of the législation.' Or, to state It differently, though
not so well, the true practical limitation of the législative power to classify
is that the classification shall be upon some apparent natural reason — some
reason suggested by necessity, by such a différence in the situation and cir-
cumstances of the subjects placed in différent classes as suggests the necessity
or propriety of différent législation with respect to them."
In State ex rel. v. Cooley, the court declared its adhérence to what
had been stated in Nichols v. Walter, and then said (page 551, 56
Minn., page 153, 58 N. W.) :
"By 'necessity' is meant 'practical,' and not 'absolute,' necessity. But the
characteristics which will serve as a basis of classification must be substan-
tial, and not slight or illusory. For example, distinctions due merely to pre-
existing repealable spécial législation would not, of themselves, constitute
a proper basis of classification, for that would tend to perpetuate the very
peculiarities which the Constitution was designed ultlmately to remove."
In State ex rel. v. Ritt, an act was likewise held not gênerai or of
uniform opération which provided for one assessor for the entire
county in each county of not less than 100,000 and not over 185,000
inhabitants, and left in force in ail counties of less than 100,000 or
over 185,000 inhabitants the existing law providing for an assessor
for each township, city, and village. In support of the act it was con-
tended that there was necessity or propriety in having the property
in very populous counties assessed by or under the supervision of
one officer as a means of attaining greater uniformity in valuation.
Without acceding to the contention, the court said (page 535, 76
Minn., page 536, 79 N. W.) :
"But, the more populous the county, the stronger this reason would apply.
If it applies to counties whose population is between 100,000 and 185,000, It
uiiplies with still greater force to counties containing more than 185,000.
666 129 FEDERAL EEPORTER.
There Is no apparent reason suggested by necesslty, or by the différence In
the situation or circumstances of counties tiavlng a population of not less tlian
100,000 and not over 185,000 and counties having a population of over 185,000,
why tlie county assessor System should be applied to the former, and the
latter left under the local assessor System In the same class with counties
having a population of less than 100,000. The attempted classification is there-
fore arbitrary and incomplète, for the reason that it does not include ail the
members of the same class, but excludes some whose conditions and wants
render such législation equally necessary and appropriate to them as a part
of the same class."
In Murray v. Commissioners an act was likewise declared invalid
which provided for the treatment, at the expense of the county of
their résidence, of a limited number of indigent habituai drunkards
in counties having a population of 50,000 or more. The court, after
observing that drunkenness was not confined to counties having more
than 50,000 population, based its décision upon a statement that a
classification cannot be sustained unless it embraces ail, and excludes
none, whose condition and wants render the législation necessary or
appropriate to them as a class, and that, to be valid, législation lim-
ited in its relation to particular subdivisions of the state must rest on
some characteristic or peculiarity plainly distinguishing the places in-
cludod from those excluded. Hetland v. Commissioners involved an
act which authorized the issuance of bonds to provide money to com-
plète courthouses in counties having a population of 100,000 or less,
which had entered into a contract for the érection of a courthouse,
and had expended $7,000 or more towards its érection. The act was
held invalid as establishing an unwarranted classification, and as be-
ing gênerai in form, but spécial in opération. State ex rel. v. Justus
presented the question of the validity of an act requiring journey-
men plumbers to take an examination and procure a certifîcate of
competency as a condition to their employment in cities or towns
having a System of sewer or water works. The court was of opinion
that faulty plumbing was injurious and pernicious whether donc by
a journeyman plumber or by a master plumber, and whether donc
in a city or town without a System of sewer or water works, or in a
city or town where such a System exists. The act was declared in-
valid as making an arbitrary and unreasonable distinction in the pla-
ces and persons to which it applied. Thomas v. St. Cloud involved
an act authorizing the issuance of bonds with which to purchase wa-
terworks in cities which hâve owned waterworks and hâve sold them
with a reserved right to repurchase them. The act was adjudged
spécial and invalid, because "the basis of the classification used is so
narrow, restricted, and peculiar that the inference is unavoidable that
it was not intended as â gênerai law, but to meet the requirements
of a spécial situation."
By its terms the act under considération makes the présence of the
following conditions requisite to its opération : (1) The indebtedness
must be that of a municipality organized or created under a charter
or spécial law. (2) The dissolution of the municipality must hâve oc-
curred through the direct législative repeal of such charter or spécial
law. (3) The indebtedness must be outstanding bonds or other writ-
ten obligations. (4) The effect of the repeal must hâve been to at-
tach the territory of the municipality so dissolved to one or more mu-
PEPIN TP, V. SAGE. 667
nîcipalities exîsting at the time. In Minnesota there lias long existed
a System of gênerai laws providing for the création, division, and dis-
solution of villages and other municipal corporations, and for detach-
ing territory therefrom and attaching territory thereto. Municipali-
ties existing under thèse gênerai laws incur debts substantially in the
same way and for the same purposes as do those existing under spé-
cial laws. Both classes contract debts by implication as well as
through bonds or other written obligations, and both may incur lia-
biHties through tortious acts of their officers and servants. The en-
gagements and liabilities of. both classes stand upon the same foot-
ing, and the creditors of both are entitled to the same considération.
Both classes are subject to dissolution, and the necessity or propri-
ety of providing for the payment of their debts in that event is the
same whether the municipality owes its existence to a spécial law or
to the gênerai laws, and whether it be dissolved by direct act of the
Législature or by the action of its inhabitants had under the gênerai
laws. Nothing in the spécial or gênerai character of the laws by or
under which municipalities are created or dissolved suggests that it
should be made the basis of a distinction or différence in those who
succeed to the obligation to pay the debts of dissolved municipalities,
or in the property from which the money to pay thèse debts shall be
raised by taxation or in the character of the debts to be paid, whether
evidenced by written obligations or otherwise. The subject is one
which in its nature, and with justice to ail concerned, can be reason-
ably covered by a gênerai law operating uniformly in ail cases. To
make the repealable spécial charters of municipalities owing their
existence to that character of législation the basis of a classification,
when no necessity or reason for a différence in remédies, liability, or
législative treatment inheres in that fact, is spécial législation. A
statute establishing such a classification does not include ail objects
which, in their nature, are of the same class, but excludes some whose
conditions and wants render such législation equally necessary and
appropriate to them as members of the class.
Tested by the rules announced and applied by the Suprême Court
of the State, the act of April 10, 1901, is violative of the constitutional
restriction upon spécial législation, and is void. It may, as is asserted
by counsel, propose an équitable and just plan of adjusting and dis-
charging the debts of the dissolved municipality or municipalities to
which it applies, but this does not satisfy the imperative constitution-
al requirement that, to be valid, the act proposing and establishing
the plan must not be spécial, but gênerai, and of uniform opération
throughout the state. Wanting in this essential, it falls within the
inhibition against spécial législation, no matter what its merits in oth-
er respects. It is of significance that the act déclares that it shall ap-
ply to cases in court falling within its provisions which, at the time
of its passage had not proceeded to judgment. The présent suit was
commenced April 24, 1900, and had not passed to a decree when the
act was passed, April 10, 1901. There is no claim that any other suit
of this character was then pending, or even contemplated. The con-
ditions existing at the time and the terms of the act make the infer-
ence unavoidable that it was not intended to be a gênerai law of uni-
668 129 FEDBEAL REPORTEE.
form opération, but to meet the supposée! requirements of a partic-
ular situation. The act is clearly void, and does not affect the rights,
remédies, or liabilities of any one.
We think the contention that part of appellee's daim is barred by
lâches is without merit. The period of limitation within which ac-
tions could be commenced upon the village bonds is fixed at six
years by the state statute. As to one bond, that period expired July
1, 1898, as to another, it expired July 1, 1899, and as to the others, it
had not expired when the présent suit was commenced. Appellee's ac-
tion at law against the village, upon the two bonds with others, was
commenced before the expiration of the period of limitation, and was
prosecuted to a judgment in his favor before the judgment of ouster
in the proceeding in quo warrante; and the présent suit, which is
rested in part upon the judgment in the action at law, was commen-
ced within less than one year after the dissolution of the village had
been so judicially pronounced. The record does not disclose such
delay on the part of appellee as requires or permits the application
of the doctrine of lâches.
The decree is affirmed.
EESDRRECTION GOLD MIN. CO. v. FORTUNE GOLD MIN. CO.
(Circuit Couit of Appeals, Bighth Circuit April 14, 1904.)
No. 1,789.
1. BOtTNDAKIES— WlIEN CaLLS AND COUESES AND DISTANCES CONFLICT.
In cases of conflicts between monuments called in a conveyance and the
courses and distances there noted, tlie former, if standing in their orig-
inal positions, prevail.
If monuments called hâve been lost or removed, the places where they
were originally set may be shown by paroi or doeumentary évidence, and, if
proved to the satisfaction of the jury by a falr prépondérance of testi-
mony, they prevail over the courses and distances.
If the monuments called hâve been lost or removed, and thelr original
locations are not proved, the courses and distances control the description,
and must be follovped in its application to the land.
2. Samk— Paeol Evidence to Change Calls of Monuments.
Paroi évidence is incompétent to substituts In a conveyance a call for
another monument in the place of the call for the original monument there
contained.
A round stake four Inches in diameter, set loosely six Inches in the
ground between two convenient référence points within four feet of it,
with two blazes upon it, and an inscription with a lead pencll of the fig-
ures "3-2309" upon the later blaze, does not flll the description of a post
four inches square, with the figures "3-2309" eut into It, set flrmly in the
ground, where no référence points are available.
3. Cross-Examination— RiGHT OF — Discrétion in Aliowing.
A full and falr cross-examination of a witness upon the subjects of his
direct examination is a right, and not a privilège, of the party against
whom be is called. and its déniai or substantial restriction is réversible
error.
ïhe allowance of cross-examination is discretionary only, after the right
has been fairly exercised.
t 1. See Boundaries, vol. 8, Cent. Dig. § 18.
EB8UREE0TION GOLD MIN. CO. V. FORTUNE OOLD MIN. OO. 669
4. Same— Limited to Stjbjects of Dibect Examination.
It Is the gênerai rule In the fédéral courts that the cross-examlnatton
of a wltness should be llmlted to the subjects of his direct examlnatlon.
5. Same— May Blicit Affirmative Défense.
Where a witness for the plaintiff bas disclosed on his direct exaœina-
tion a part of a conversation or transaction, the fact that the entire
conversation or transaction constitutes an affirmative défense is no bar
to its disclosure by cross-examinatlon.
6. Same— Denial Peejtjdicial.
Préjudice is presumed from the déniai or undue restriction of a cross-
examination. It is no answer that the cross-examiner could call the wit-
ness or other witnesses to prove the facts he seeks. He Is entitled to bind
his adversary by proof of the facts by the latter's vritness.
7. Same— General Rule.
The gênerai rule is that error produces préjudice, which may not be
disregarded, unless It appears beyond a doubt that it did not préjudice,
and could not hâve prejudiced, the party who assigned it.
8. WiLLFtTL Tbespasser— Définition— Négligence as Evidence of.
One vcho takes the ore of another from his land v?ithout right, either
recklessly or with the actual intent so to do, is a willful trespasser. One
who takes such ore without right, but inadvertently and unintentlonally,
or in the honest belief that he is exercising his own right, is not a willful
trespasser, and may avail himself of the lower measure of damages.
Mère négligence, of the character described by the word "inadvertenee,"
in ascertaining the limits of the lands or rights of the owner, will not
alone sustain a finding of that recklessness, fraud, bad faith, knowledge,
or intent requisite to establish a willful trespass, but It is compétent
évidence upon the issue of willfulness or innocence.
An intentional omission, however, to exercise care to ascertain such
limits, for the purpose of maintaining ignorance regarding them and tres-
passing upon them, or a reekless disregard of them, is as fatal to the
claim of a trespasser to limit damages to the lower measure as knowledge
of the owner's rights and an intent to violate them.
Thayer, Circuit Judge, dlssenting in part.
(Syllabus by the Court.)
In Error to the Circuit Court of the United States for the District
of Colorado.
Gerald Hughes (Charles J. Hughes, on the brief), for plaintiff in
error.
Clayton C. Dorsey (Willard Teller, on the brief), for défendant in
error.
Before SANBORN, THAYER, and HOOK, Circuit Judges.
SANBORN, Circuit Judge, delivered the opinion of the court.
This is an action of trespass brought by the Fortune Gold Mining
Company, a corporation, the lessee of the Fortune Iode mining claim,
against the Résurrection Gold Mining Company, a corporation, for the
intentional removal of ore from the Fortune claim. The plaintiff al-
leged, and the défendant denied, that the former was the lessee from the
owner and was in the possession of the Fortune Iode mining claim,
and that the défendant intentionally and willfully removed therefrom
ore of the value of $100,000. The real issue between the parties, how-
ever, was whether the boundary of the Fortune claim at corner No. 3
was at the point where the courses and distances recited in the patent
located it, or at a place about 28 feet farther northwesL If it was at the
670 129 FEDERAL EEPORTBK.
former point, the trespass of the défendant was înconsiderable ; but
if, as the plaintifï claimed and the jury found, it was in the latter place,
ore of the value of several thousand dollars had been extracted f rom the
plaintifï's daim by the défendant.
The plaintifï's title rested upon a patent issued in 1894, and the de-
scription in that patent upon the survey for patent made in January,
1882. The original monuments erected by the surveyor at corners i
and 2 of the Fortune claim, when he surveyed it for patent, were stand-
ing upon the ground at the time of the trial. The monument erected
at corner 4 had disappeared. The plaintifï insisted that a round stake,
with two iîlazes upon one side of it, loosely placed in the earth, and
surrounded by a mound of stones at a place about 28 feet northwest of
the point where the courses and distances run from the known corners
1 and 2 located corner 3, was the original monument erected by the sur-
veyor to mark that corner, and that it was in the same place where the
surveyor put the original monument in January, 1882. The patent and
the field notes on which the patent was based were introduced in évi-
dence by the plaintifï. The récitals of the patent, so far as they are
material to the questions in this case, are that it is a grant of the For-
tune Iode mining claim known as "Lot No. 2,309"; that this claim is
bounded as follows: Beginning at corner No. i, a post four inches
square, marked 1-2309, thence south i degree 30 minutes west 300
feet to corner No. 2, thence south 88 degrees 48 minutes east 1,465
feet to corner No. 3, thence north i degree 30 minutes east 300 feet to
corner No. 4, thence north 88 degrees 48 minutes west 1465 feet to
corner No. i at the place of beginning; and that the lot No. 2,309
extended 1,465 feet in length along the Fortune vein or Iode. The
field notes recited that a post marked each corner, that at corner No.
3 there were "no référence pomts available," and that "ail corner posts
are 4" square x 4 ft. long set 2 ft. in ground, and hâve eut into them
the respective number of the corner and number of the survey. No
bearing ties available from any of the corners." The amended field
notes recite that there was at corner No. i "a post 4 ins. square, 4 ft.
long, set 2 ft. in ground and marked 1-2309," at corner No. 2 "a post
4 ins. square, 4 ft. long, set 2 ft. m ground and marked 2-2309," at
corner No. 3 "a post 4 ins. square, 4 ft. long, set 2 ft. in ground and
marked 3-2309," and at corner No. 4 "a post 4 ins. square, 4 ft. long, set
2 ft. in ground, and marked 4-2309." Neither the patent nor the field
notes describe a mound of stones as a part of any of the monuments.
The original monuments which stand at corners i and 2 are posts 2j4
feet high, about 5 inches square, set firmly in the ground, with the
figures "1-2309" and "2-2309" eut into them respectively about % of
an inch. The stake which the plaintifï claims is the original monument
at corner No. 3 is round, 4 or S inches in diameter, about 3 feet high,
and it sets loosely about 6 inches in the ground, and is surrounded by
a mound of stones. It is blazed on one side. A partial attempt has
been made to square it at the top. No figures are eut into it. Some
one has whittled or hewn off one side of the blaze, and upon this new
blaze has faintly written with a lead pencil the figures "3-2309."
The owner of the claim from whom the plaintifï dérives its lease
testified that he was présent when the survey for patent was made, that
RESTJEEEOTION GOLD MIN. 00, V. rOBTUNE GOLD MIN. CO. 671
four stakes of about the same character were set at the four corners,
that stones were piled around them, that he did not notice and does not
know how they were marked, that he does not know how the round
stake at corner No. 3 is marked, that he thinks the round stake is the
original post set there by the surveyors, that it looks to him like it,
and that it is in the same location in which the original post was set.
He testified that when the original post was placed at this corner by the
surveyor in 1882 there was a stump 18 inches in diameter and 12 or 14
feet high 18 inches north of the post, and another large stump 3 feet
south of the post, and that the surveyor and his assistants measured the
distances from the post to thèse stumps and blazed them. The stumps
still remain upon the ground. No other witness testified that he knew
the round stake to be the original post. Several stated that they had
seen the stake, in the place where it now stands, at various times be-
tween the survey in 1882 and the time of the trial. One of the defend-
ant's witnesses testified that in 1896 he found a stake at this corner
about 2j4 feet high and 5 or 6 inches square, but that on July 9, 1898,
he looked for it at the same place but could not find it. No other ma-
terial évidence upon the issue of the identity of the round stake with
the original post set at corner 3 appears in the record.
It is assigned as error that in this state of the évidence the court re-
fused to grant the request of the défendant to instruct the jury "that
a post which is round, blazed on one side, and bearing lead-pencil marks
or figures, not set in the ground, but set up in a mound of stones,
does not fulfill the description of a post which calls for a post four inch-
es square, four feet long, set two feet in the ground, and having the
number of the corner and the number of the survey eut into said post,"
and that the court on the contrary charged the jury "that a stake such
as described by the witnesses m fîiis case as located at corner No. 3 is
sufficient to meet the calls of the patent." The description of the land
in controversy in the patent is copied from and founded upon the field
notes of the survey of the claim which were introduced in évidence by
the plaintiff, so that, as far as the question hère presented is concerned,
the case stands as though the field notes were written into the descrip-
tion of the patent.
Before entering upon the discussion of the spécifie issue to which
our attention is first challenged, it may be well to recur for a moment to
the rules for the application of a description in a patent or in a deed
to the land to which it refers. A plain and unambiguous description
in a written conveyance can no more be contradicted or modified by
paroi évidence than any other part of a written agreement. It is only
when a patent ambiguity arises in the description itself, or in the applica-
tion of it to the land, that évidence aliunde becomes admissible for the
purpose of fitting the description to the ground to which it refers and of
removing uncertainty. When the monuments called for in a convey-
ance do not correspond with the courses and distances there recited,
such an ambiguity necessarily arises, and paroi and other évidence is
then admissible to remove it. In cases of this character the original
monuments called by the patent, if they still remain in place, prevail
over the courses and distances noted in the description. If the monu-
ments called hâve been lost or removed, the places where they were
672 129 FEDERAL REPORTEE.
originally located may be shown by paroi or other compétent évidence,
and, if proved to the satisfaction of the jury by a fair prépondérance of
évidence, thèse original locations will prevail over the courses and dis-
tances, and control the application of the description to the land. Rob-
inson v. Kinie, 70 N. Y. 147, 154; Lodge v. Barnett, 46 Pa. 485;
Wendell v. People, 8 Wend. 190, 22 Am. Dec. 635 ; Jackson v. Widger,
7 Covv. 723; Pernam v. Wead, 6 Mass. 131; Lessee of McCoy v.
Galloway, 3 Ohio, 282, 283, 17 Am. Dec. 591 ; Bagley v. Morrill, 46
Vt. 94, 100 ; Opdyke v. Stephens, 28 N. J. Law, 83, 89. If the monu-
ments are lost or removed and their original locations are not estab-
lished by compétent proof, the courses and distances prevail, and control
the description.
Paroi évidence, however, is incompétent to substitute a différent
monument for one clearly called by a deed or patent, or by the survey
upon which it is founded, because that course of proceeding would
violate the settled rule that written contracts may not be contradicted
or modified by oral évidence. It is not compétent to create an am-
biguity by changing the written description by paroi évidence, and theii
to proceed to apply the changed description to the land by the rules of
law and évidence to which référence bas been made, which are ap-
plicable only to conveyances which are in themselves ambiguous, or
become so in their application to the ground. Bruckner's Leesee v.
Lawrence, i Doug. 19, 25, 27-36; Bagley v. Morrill, 46 Vt. 94, 100;
Drew v. Swift, 46 N. Y. 204, 209; PoUard v. Shively, 5 Colo. 309,
315 ; Lessee of McCoy v. Galloway, 3 Ohio, 282, 283, 17 Am. Dec. 591 ;
Claremont v. Carlton, 2 N. H. 369, 9 Am. Dec. 88.
The patent in the case before us disclosed no ambiguity, and presented
no conflict between its courses and distances and any monument for
which it called at corner No. 3, because it specified no monument at
that corner. There was therefore no excuse for paroi évidence on the
face of the patent, and the courses and distances which it contained
were prima facie controUing and consistent with themselves. There-
upon counsel for the plaintiff introduced in évidence the fîeld notes of
the survey, and read them into the patent for the purpose of raising
the requisite ambiguity upon which its cause of action rests. Thèse
field notes recite that the monument at corner No. 3 was "a post 4 ins.
square, 4 ft. long, set 2 ft. in ground, marked 3-2309," that thèse num-
bers were eut into the post, and that it stood at a place where no réf-
érence points were available. This description imported no ambiguity
into the patent, unless the post there described could be found, or un-
less its original location could be proved to be at some other point than
at the place where the courses and distances located the corner. In
order to prove that there was such a stake at such a place, and in order
to create the ambiguity which did not otherwise exist, the plaintiff intro-
duced testimony that a round stake 4 inches in diameter, with two
blazes, the later on the side of the earlier, with the figures "3-2309"
written in pencil upon it, but without any figures eut into it, stood be-
tween two available référence points 28 feet northwest of the position
of the corner as indicated by the courses and distances, and the court
instructed the jury that the latter stake satisfied the description of the
corner post. Stakes in themselves are generally similar, The descrip-
EE8UKEECTION GOLD MIN. CO. V. FORTTJNE GOLD MIN. CO. 673
tion contained in the word "stake" or the word "post" segregates no
stake or post from others of similar character. The distinguishing
characteristics of the post described by the surveyor in his field notes
were not the material of which it was made, its length, or its size. They
were its peculiar shape, and especially the marks he put upon it for the
express purpose of identifying it and setting it apart from ail others.
The post was squared, and the figures "3-2309" were eut into it to for-
ever distinguish it from ail other pièces of wood, just as thèse marks on
the stakes at corners i and 2 hâve clearly and conclusively identifîed
them. If this round blazed stake with its fading pencil marks upon it
stood near the post at corner 2, no one would hesitate for a moment to
say that it was not the square post with its carved figures described in
the surveyor's notes. The post at corner 3 described in the notes was
square. That which the owner of the land found and testified con-
cerning was round, with two blazes of evidently différent dates upon
one side of it. The figures "3-2309" had been eut into the former. No
figures had been eut into the latter, but the figures "3-2309" had been
written upon it with a lead pencil. The former stood whiere no réf-
érence points were available ; the latter where two excellent références
were within four feet of it. The latter had none of the distinguishing
marks and did not satisfy the description of the former, and the in-
struction of the court to the contrary cannot be sustained. Its efïect
is to import an ambiguity into a conveyance where none existed before,
by changing the written description in the patent and field notes by oral
évidence. Its efïect is to strike out of the patent and field notes the
description of the square post marked by the figures "3-2309" eut into
it, and to write into them the description of the round blazed stake
inscribed with the figures "3-2309" by means of a lead pencil, and in this
way to violate the settled rule that written conveyances may not be
modified or contradicted by paroi.
The next question presented relates to the cross-examination of
McNeece, the owner of the claim. He testified on his direct examina-
tion that he was présent and saw the stake set when the survey for
patent was made, that the round stake with the blazes and pencil marks
is in the same place in which the surveyor set the original post for cor-
ner No. 3, and as follows :
"Q. Describe the manner In which the monuments were set. A. We drove
down a stake hère [indicatlng on map], and plled a plie of rock around It ; the
same with this stake hère, and the same with No. 3, and the same with No. 4."
After he had testified on cross-examination that the original monu-
ment which marks corner number 4 of the Kokomo claim, which the
field notes of the Fortune claim déclare bears north 2 degrees 5 minutes
east 196 feet from corner No. 4 of the Fortune, is still standing, and af-
ter he had testified that, when the survey of the Fortune was made,
the surveyors measured the distance from corner No. 3 to two stumps
near it and blazed them, he was asked on cross-examination, "Did
they measure the distance from that corner No. 4 at the time they set
it in the patent survey to corner No. 4 of the Kokomo ?" and the court
sustained an objection to the question, and refused to permit the witness
to answer it. The fact was that if corner No. 4 of the Fortune was ig6
feet distant from corner No. 4 of the Kokomo, then that corner was
129 F.— 43
674 129 FEDERAL EBPOETEB.
about 300 f eet f rom the place where the défendant claimed, and the
courses and distances located corner No. 3, and about 325 feet from the
round stake which this witness had testified marked that corner.
Hence, if the surveyors measured the distance from corner No. 4 of the
Fortune to corner No. 4 of the Kokomo, that fact tended much more
strongly to show that McNeece was mistaken in his testimony to the
efïect that the round stake was at the location of the original monument
than if the surveyors had simply calculated that distance. Many argu-
ments are urged upon us by counsei for the plaintiflf for the purpose of
sustaining this ruling. They say that permission to answer this ques-
tion was discretionary with the court below, and that its refusai was
no abuse of discrétion; that the answer to the question would hâve
established an affirmative défense; and that the refusai to permit the
introduction of the answer was not prejudicial to the défendant because
it might hâve made the owner of this property its own witness and then
hâve asked him the same question ; and that in any event the expected
testimony was only cumulative. But a fair and full cross-examination
of a witness upon the subjects of his examination in chief is the abso-
lute right, and not the mère privilège, of the party against whom he is
called, and a déniai of this right is a prejudicial and fatal error. It is
only after the right has been substantially and fairly exercised that the
allowance of cross-examination becomes discretionary with the trial
court. Gilmer v. Higley, iio U. S. 47, 50, 3 Sup. Ct. 471, 28 L. Ed.
62 ; Chandler v. Allison, 10 Mich. 460, 473 ; Heath v. Waters, 40 Mich.
457, 471; Sperry v. Moore's Estate, 42 Mich. 353, 361, 4 N. W. 13;
Martin v. Elden, 32 Ohio St. 282, 287; Wilson v. Wagar, 26 Mich.
452, 456, 458 ; Reeve v. Dennett, 141 Mass. 207, 6 N. E. 378 ; Taggart v.
Bosch (Cal.) 48 Pac. 1092, 1096; New York Iron Mine v. Negaunee
Bank, 39 Mich. 644, 660 ; Jackson v. Feather River W. Co., 14 Cal. 19,
24; Wendt v. Chicago, St. P., M. & O. Ry. Co., 4 S. D. 476, 484, 57
N. W. 226.
The converse of this rule is equally controlling. In the courts of
the United States the party on whose behalf a witness is called has
the right to restrict his cross-examination to the subjects of his direct
examination, and a violation of this right is réversible error. If the
cross-examiner would inquire of the witness concerning matters not
opened on the direct examination, he must call him in his own behalf.
Houghton v. Jones, i Wall. 702, 706, 17 L. Ed. 503 ; Montgomery v.
^tna Life Ins. Co., 97 Fed. 913, 916, 38 C. C. A. 553, 557; Safter v.
U. S., 87 Fed. 329, 330, 31 C. C. A. I, 2; Mine & Smelter Supply Co.
V. Parke & Lacey Co., 107 Fed. 881, 884, 47 C. C. A. 34, 36; McCrea
V. Parsons, 112 Fed. 917, 919, 50 C. C. A. 612, 614; Merchants' Eife
Ass'n V. Yoakum, 98 Fed. 251, 26b, 39 C. C. A. 56, 65; Sauntry v.
U. S., 117 Fed. 132, 135, 55 C. C. A. 148, 151; Goddard v. Crefield
Mills, 75 Fed. 818, 820, 21 C. C. A. 530, 532; i Greenleaf, Ev. § 445;
8 Enc. of PI. & Prac. 104; Hopkinson v. Eeeds, 78 Pa. 396; Fulton v.
Bank, 92 Pa. 112, 115; People v. Edwards (Cal.) 73 Pac. 416; People
V. Keith (Cal.) 68 Pac. 816; Stevens v. Walton (Colo. App.) 68 Pac.
834, 835; People v. McLean (Cal.) 67 Pac. 770, 771; Acklin v. Mc-
Calmont Oil Co. (Pa.) 50 Atl. 955, 956; State v. Hawkins (Wash.) 67
Pac. 814; Bowsher v. Chicago, B. & Q. R. Co. (lowa) 84 N. W. 958,
BESURKECTION GOLD MIN. OO. V. FORTUNE GOLD MIN. CO. G75
960 ; Missouri Pac. R. Co. v. Fox (Neb.) 83 N. W. 744, 752 ; Boucher
V. Clark Pub. Co. (S. D.) 84 N. W. 237, 240; Stubbings v. Curtis (Wis.)
85 N. W. 325, 327; L,ake Erie & W. R. Co. v. Miller (Ind. App.) 57
N. E. 596, 598; State v. Savage (Or.) 60 Pac. 610, 615; Baker v. Sher-
man (Vt.) 46 Atl. 57, 62 ; Pennsylvania Co. v. Kennard Glass & Paint
Co. (Neb.) 81 N. W. 372, 376, 377; Posch v. Southern Electric R. Co.,
76 Mo. App. 601 ; People v. Dole (Cal.) 55 Pac. 581, 585, 68 Am. St.
Rep. 50; State v. Ballou (R. I.) 40 Atl. 861, 862; Fisher v. Porter (S.
D.) j'j N. W. 112, 114; State Bank v. Waterhouse (Conn.) 38 Atl. 904,
908, 66 Am. St. Rep. 82; East Dubuque v. Burhyte (111.) 50 N. E.
1077, 1078; Ernst V. Estey Wire- Works Co. (Sup.) 46 N. Y. Supp. 918,
920; Thalheim v. State (Fia.) 20 South. 938, 946; Devine v. Railway
Co. (lowa) 69 N. W. 1042 ; Crenshaw v. Johnson (N. C.) 26 S. E. 810.
The reason of the rule is that a witness during his cross-examination
is the witness of the party who calls him, and not the witness of the
party who cross-examines him. Wilson v. Wagar, 26 Mich. 457, 458 ;
Campau v. Dewey, 9 Mich. 417, 418. The cross-examiner has the
right to bind his opponent by the testimony of the witness upon cross-
examination relative to every subject concerning which his opponent
examined him in the direct examination. But he has no right to bind
his opponent by the testimony of the witness during the cross-examina-
tion upon subjects relative to which his opponent did not inquire. If
the cross-examiner would investigate thèse subjects by the testimony
of the witness, he may and he must make him his own witness, and
stand sponsor for the truth of his testimony. It is discretionary with
the court to permit the cross-examiner to do this at the time he is con-
ducting the cross-examination, because the time and the manner of the
trial are within the discrétion of the court. It is discretionary with
the trial court to permit leading questions to be put to a hostile witness
upon his direct examination. But in the fédéral courts the Une of dé-
marcation which limits a rightful cross-examination is clear and well-
defined, and it rests upon the reason to which attention has been called.
It is the line between subjects relative to which the witness was exam-
ined upon the direct examination and those concerning which he was
not required to testify. It exists because within that line the party who
calls the witness stands the sponsor for the truth of his testimony,
while without that Hne he does not. It does not vary, at the discré-
tion of the court, with any convenience or necessity of court or counsel,
because no convenience or necessity can be conceived of which would
not enable the cross-examiner to make the witness his own, and be-
cause to subject the rule to the discrétion of the court or counsel is
to abrogate it.
On the other hand, the right of cross-examination upon the subjects
opened by the direct examination is invaluable, and it should be care-
fully preserved. Under the English and American Systems of juris-
prudence the opportunity to exercise the right of cross-examination
is a condition précèdent to the réception of the direct évidence of the
witness. Heath v. Waters, 40 Mich. 457, 471 ; Sperry v. Moore's
Estate, 42 Mich. 353, 361, 4 N. W. 13". The right of cross-examination
is the great safeguard against fraud, false statements, and half truths
resulting from statements of parts, and omissions of other parts, of
676 129 FEDERAL BBPOETEB.
conversations and transactions, which are frequently more misleading
and dangerous than direct falsehoods. It furnishes the cardinal and
most effective means to discover and disclose the whole truth in ail
judicial investigations. It extends to the eliciting of every fact relative
to the matters recited in the direct examination which either conditions,
qualifies, or weakens the statements there made, or supplies any omis-
sion in the earlier testimony of the witness concerning the subjects
there treated. Martin v. Elden, 32 Ohio St. 287 ; i Thompson on Tri-
als, § 406. The testimony given by a witness on his cross-examination
is the évidence of the party in whose behalf lie is called, and not that
of the party on whose account the cross-examination is conducted, The
former, and not the latter, is bound by the évidence elicited upon the
cross-examination. M^'ilson v. Wagar, 26 Mich. 457, 458; Campau v.
Dewey, 9 Mich. 417, 418. Hence it is no answer to a refusai to permit
a full cross-examination that the party against whom the witness was
called to testify might hâve made him his own witness and then hâve
propounded to him the questions to which he was entitled to answers
upon the cross-examination. "No one is required to make his adver-
sary's witness his own to explain or fill up a transaction he has partially
explained already." He has the right to bind his adversary by' the
truth elicited from his own witness. Chandler v. Allison, 10 Mich. 460,
473 ; New York Iron Mine v. Negaunee Bank, 39 Mich. 644, 660.
Nor is it any answer to the refusai to permit a cross-examination of
the character of that hère in question that it would develop an affirma-
tive défense. If upon the direct examination a witness is led to disclose
a part of a single conversation or transaction the whole of which con-
stitutes an affirmative défense or a counterclaim, that fact does not
deprive the défendant of his right to prove the entire conversation or
transaction by the same witness upon his cross-examination. Moreover,
the rule which prohibits the proof of affirmative défenses upon cros.
examination relates to those only which are pleaded by the party ad-
verse to him who çalls the witness. It never applies to a cross-exam-
ination by which the adverse party simply seeks to disprove, weaken, or
modifv the case against him which the witness himself has made.
Wcndt v. Chicago St. P., M. & O. Ry. Co., 4 S. D. 476, 484, 57 N. W.
226; Jackson v. Feather River W. Co., 14 Cal. 19, 24. The défendant
in this case pleaded no affirmative défense and no counterclaim, and its
aim upon the cross-examination was to disprove by the witness Mc-
Neece the case which that witness had made against it by requiring him
to relate the entire transaction, a portion of which he had recited upon
his direct examination. The rule which the plaintiff invokes hère is in-
applicable to the case in hand.
The testimony which the défendant sought to elicit was not cumula-
tive, because no other witness testified, and no other knew, so far as
this record discloses, whether or not the surveyors measured the dis-
tance from corner 4 of the Fortune to corner 4 of the Kokomo when
they set the monuments. Nor, if it had been cumulative, would that
fact hâve deprived the défendant of its right to elicit the testimony on
a proper cross-examination from the plaintiff's witness for whose tes-
timony the Fortune company stood sponsor. One is not deprived of his
right of cross-examination by the fact that he may be able to obtain tes-
KESUKBECTION GOLD MIN. CO. V. FOBTUNE QOIA) MIN. CO. 677
timony tending to establish the facts he seeks from his own witnesses.
If he were, the right of cross-examination would in the large majority
of cases cease to be. A party has the right, if he can do so by proper
cross-examination, to prove the facts he relies upon by the cross-ex-
amination of the witness of his adversary, by whose testimony the lat-
ter is concluded, although he may be able to introduce other witnesses
to establish the same facts.
None of the reasons why its witness should not hâve answered the
question propounded to hira which counsel for the plaintifï urged upon
us commend themselves to our judgment. They had requested Mc-
Neece on his direct examination to describe the manner in which the
monuments were set when the survey for the patent was made, and he
testified to the method of the survey and to the setting of each of the
four posts in its place. Upon cross-examination he testified, readily
and without objection, about the setting of the posts and the measure-
ments made by the surveyors, until he came to the question whose an-
swer seemed likely to tend to weaken or disprove the case made by
his direct testimony, and there he was stopped by the objection of coun-
sel for the plaintiff. The question which he was asked related to the
subject of his direct examination, to the res gestse which he had in
part there related, and it tended to qualify and weaken the case which
his direct testimony had made. Under ail the rules it fell far within
the pale of the right of cross-examination, and the refusai of the court
to permit the witness to answer it cannot be lawfully sustained.
Nor can counsel escape a reversai of the judgment below upon the
theory that, although this ruling was erroneous, it was not injurions to
the défendant, and that for two reasons : In the first place, it is the
gênerai rule of the fédéral courts that error produces préjudice, and
that it cannot be disregarded unless it appears beyond a doubt that
the error complained of did not préjudice and could not hâve prejudiced
the rights of the party who assigns it. Boston & Albany Railroad v.
O'Reilly, 158 U. S. 334, 337, 15 Sup. Ct. 830, 39 L. Ed. 1006; Deery
v. Cray, 5 Wall. 795, 807, '18 L. Ed. 653; Gilmer v. Higley, iio U. S.
47, 3 Sup. Ct. 471, 28 L. Ed. 62. In the second place, the presumption
is that the answer to a question propounded would hâve been favorable
to the party who asked it, that he would hâve followed the inquiry thus
opened farther, and that his cause was prejudiced by the suppression of
the investigation. Martin v. Elden, 32 Ohio St. 282, 287 ; Buckstafï
V. Russell, 151 U. S. 626, 637, 14 Sup. Ct. 448, 38 L. Ed. 292; Atchi-
son, Topeka & S. F. R. Co. v. Phipps, 125 Fed. 478, 480, 60 C. C. A. 314.
There is no escape from the conclusion that the ruling of the court
which refused to permit the défendant to elicit an answer to the ques-
tion he propounded upon cross-examination is réversible error. If
there were doubt relative to the question concerning this cross-examina-
tion which we hâve been considering, the terse and lucid opinion of Mr.
Justice Campbell regarding it in Chandler v. Allison, 10 Mich. 460, 473,
would persuade. He said :
"Whenever an entire transaction Is In issue, évidence which conceals a
part of It is defective, and does not comply with the primary obligation of
the oath, which is designed to elicit the whole truth. If the witness were,
as he always may be, requested to state what he knows about it, he would
678 129 FEDERAL EErOKTEE.
not do his duty by designedly stopping short of it. Any question which fllls
up his omissions, whether designed or accidentai, Is legitimate and proper
on cross-examinatlon. When the answers are given, the nature and extent
of the transaction becomes known from a comparison of the whole, and each
fact material to a compréhension of the rest is equally Important and perti-
nent. A party cannot glean out certain facts which, alone, would make out
a false account, and save his own witness from the sifting process by which
only those omissions can be detected. There could be no such thing as cross-
exaniination if such a course were allowed ; no one could expose a fraudu-
leut witness for his dishonest concealments ; and every one who knew of
such practices would be driven to the necessity of calling, in his own behalf,
an adverse witness to show his own concealments, whom, if perjured, he
could not impeach. The absurdity of such a process is too plain to need
pointing out. No one can be compelled to make his adversary's witness his
own to explain or flll up the transaction he bas partially explained already."
The statutes of Colorado limited the width of the Fortune daim to
150 feet on each side of the center of the vein or crevice. 2 Mills' Ann.
St. Colo. § 3149. After the owner of the daim had testified that the
original post at corner 3 was located where the round blazed stake was
standing, a point about 23 feet farther north than the location of that
corner indicated by the remaining monuments and the courses and
distances, and after he had testified that the corner posts placed at the
time of the survey for patent were set at about the same places as the
corner stakes driven at the time of the original location of the daim, and
after he had testified to the location of his discovery shaft, counsel for
the défendant ofïered in évidence the original location certificate of the
daim, dated June 7, 1880, and two amended certificates, one dated
December 22, 1881, and the other February 15, 1882, ail signed by the
witness, and thèse certificates were rejected upon the ground that they
tended to contradict the terms of the patent. But the offer of thèse cer-
tificates was not made to contradict or vary any of the terms of the pat-
ent, but simply to weaken and rebut the case made by the witness who
had, by his own testimony that the original monument which marked
corner 3 was about 23 feet farther north than the description in the
patent located it, raised an ambiguity which both parties were endeavor-
ing to make certain by évidence. The amended location certificates
made and signed by this witness and others within two months of the
survey for patent, to which he had testified, recited, one that the loca-
tors claimed 1,500, and the other that they claimed 1,465, lineal feet
along the Fortune Iode, together with 150 feet on the north side and 150
feet on the south side of the middle of said vein at the surface, and ail
veins, Iodes, ledges, or deposits, and surface ground within the lines
of said daim 395 feet running north 88 degrees 30 minutes west (accord-
ing to the December certificate), and north 88 degrees 48 minutes west
(according to the February certificate), from center of discovery shaft,
and 1,100 feet running south 88 degrees 30 minutes east (according to
the December certificate), and 1,070 feet running south 88 degrees 48
minutes east (according to the February certificate), from the center of
the discovery shaft. The difiference in the courses recited in the two
certificates was insufficient to afifect their évidence, and it is plain that, if
the line runing east from the center of the discovery shaft described in
thèse certificates intersected the east line of the daim at a point about
175 feet south of the round stake, that fact would tend to prove that
EESUERECTION GOLD MIN. OO. V. FORTUNE GOLD MIN. CO. (579
the witness McNeece was mistaken in his testimony that this stake was
at the place where the original monument was located, v/hile, if that
line would intersect the east line of the daim about 150 feet south of
the round stake, that fact would tend to corroborate his évidence. The
certificates were ofïered to establish the former fact, not to contradict,
but to corroborate and sustain, the description in the patent and in the
field notes, and to rebut the testimony of this witness by which the plain-
tiff was seeking to apply them to a tract of land which upon their face
they did not describe. The évidence was compétent and material for
the purpose for which it was ofïered, and it should hâve been received.
The resuit of our examination of this record is that this case must
be again tried. At the coming trial two important issues may be pre-
sented : First, whether or not the round stake stands in the same place
in which the square carved post called for by the field notes as the mark
of corner No. 3 was originally located ; and, second, whether the de-
fendant intentionally or innocently took ore from the plaintifï's claim.
Upon the first issue the location of corners 3 and 4 by means of the
monuments at corners i and 2 and the courses and distances described
in the patent and in the field notes, run both forward and backward from
corners i and 2, the relations of the disputed corners and Unes upon the
two théories advanced by the respective parties to the varions ties and
références in the patent and in the field notes of the Fortune claim, the
testimony of the witnesses who knew the location of the original monu-
ments, and other évidence which directly tends to prove or disprove the
theory of either party, should be received. Upon the second issue évi-
dence of the knowledge and information which the managing ofïicers
of the défendant had relative to the location of the disputed Unes and
corner before and during the removal of the ore, évidence of their rele-
vant acts and omissions during this time, and testimony of their intent
and purpose in taking the ore, will be compétent évidence.
The measure of damages for the reckless, willful, or intentional tak-
ing of ore from the land of another without right is the enhanced value
of the ore where it is finally converted to the use of the trespasser.
The measure of damages for wrongfully taking ore from the land of
another through inadvertence or mistake, or in the honest belief that
one is acting within his légal rights, is the value of the ore in the mine.
The wrongful taking of the ore, in the absence of ail other évidence,
raises a presumption of fact that the trespasser took it intentionally and
willfully. This presumption, however, is a disputable one, which évi-
dence may so completely overcome that it will become the duty of the
court to instruct the jury that it cannot prevail. The trespasser may
overcome it, and may lirait the recovery against him to the lower measure
of damages, by proof presented on behalf of the owner, or on his own
behalf, that he took the ore unintentionally, in good faith, in the honest
belief that he was lawfully exercising a right which he possessed. When
this issue is presented for détermination, the question is, did the trespass-
er take the ore from his neighbor's land recklessly, or with an actual in-
tent to do so, or inadvertently or unintentionally, or in the honest belief
that he was exercising his own right ? If the former he was a willful tres-
passer, if the latter he was an innocent trespasser, within the meaning of
the rule relative to the measure of damages. U. S. v. Homestake Min.
CSO 129 FEDERAL REPORTEE.
Co., 117 Fed. 481, 482, 485, 486, 54 C. C. A. 303, 304, 307, 308; Golden
Reward Min. Co. v. Buxtoh Min. Co., 97 Fed. 413, 422, 38 C. C. A.
228 ; St. Clair v. Cash Gold Min. & Mill. Co. (Colo. App.) 47 Pac.
466, 468, 469.
The rules upon this subject hâve been again stated, because some
discussion has arisen at the bar whether or not a jury may lawfully
infer that a Irespass was willful and intentional from the single fact
that the trespasser failed to exercise ordinary care in ascertaining the
limits of his victim's land or rights. Our answer is that the wrongful
taking raises the presumption of an intentional and willful trespass, and
that négligence in ascertaining the limits of the land or of the rights of
the owner is compétent évidence upon the issue, but that négligence
which amounts to mère inadvertence, without evil intent or reckless-
ness, is not in itself sufficient proof to sustain a finding of fraud, bad
faith, willfulness, or evil intent in committing the trespass. In Durant
Min. Co. v. Percy Consol. Min. Co., 35 C. C. A. 252, 253, 93 Fed. 166,
167, this court held that a jury was not required to find a trespass to be
willful from the négligence of the trespasser in ascertaining the line be-
tween his own property and that of the owner whose ore he took ; and
we said, in the course of the discussion of that question, that "a jury
may lawfully infer that a trespasser had knowledge of the right and title
of the owner of the property upon which he entered, and that he in-
tended to violate that right, and to appropriate the property to his own
use, from his reckless disregard of the owner's right and title, or from
his failure to exercise ordinary care to discover and protect them." It
was not, however, our intention to hold that lack of ordinary care alone
would justify a finding that a trespasser was guilty of that bad faith,
fraud, knowledge, or intent which renders him liable for the higher
measure of damages, or to gô farther than to intimate that the négli-
gence of the trespasser, like ail his other acts and omissions, is com-
pétent évidence for the considération of the jury in determining the real
issue whether his trespass was intentional or reckless on the one hand,
or inadvertent or innocent on the other. While mère négligence which
is synonymous with inadvertence will not alone sustain a finding of
willful trespass, one may be "so far négligent as to justify an inference
that he acted knowingly and intentionally" and to warrant a jury in
finding his trespass willful. Golden Reward Min. Co. v. Buxton Min-,
Co., 97 Fed. 413, 422, 38 C. C. A. 228, 238. An intentional or reckless
omission to exercise care to ascertain the boundaries of his victim's land
or rights, for the purpose of maintaining ignorance regarding them,
or a reckless disregard of them, is as fatal to the claim of a trespasser
to limit the recovery of damages against him to the lower measure as
an intentional and willful trespass. Thèse rules and principles, applied
to the évidence to be produced upon the coming trial, will, we trust,
resuit in a fair and impartial hearing of the issues presented, and a just
and righteous judgment. The judgment below is reversed, and the
case is remanded for a new trial.
HOOK, Circuit Judge (concurring). I concur in the resuit announ-
ced, and also in what is said in support thereof, excepting in one par-
ticular. I concur in the view that réversible error was committed in the
EESUEKECTION GOLD MIN. CO. V. FORTUNE GOLD MIN. CO. 081
exclusion of the question propounded to the witness, McNeece on cross-
examination. An authority directly in point is Eames v. Kaiser, 142
U. S. 488, 12 Sup. Ct. 302, 35 L. Ed. fogi. As applicable to this mat-
ter, it is said in the foregoing opinion that a fair and full cross-exam-
ination of a witness upon the subjects of his examination in chief is the
absolute right, and not the mère privilège, of the party against whom he
is called, and a déniai of this right is a prejudicial and fatal error. To
this I assent.
But it is also said :
"The converse of this rule Is equally controlUng. In the courts of the
United States the party in whose behalf a witness is called has the right
to restrict his cross-examination to the subjects of his direct examination, and
a violation of this rule is réversible error."
I am unable to agrée that this is a correct statement of the law.
The questions presented by the record in the case before us do not re-
quire any expression as to what is said to be the converse of the rule
which is actually applied and enforced, but inasmuch as it appears in the
foregoing opinion, and a similar différence of opinion arose in Balliet v.
United States (decided at this term) 129 Fed. 689, it is not inappropriate
that my position in respect thereto be defînitely stated.
It is undoubtedly the settled rule in the courts of the United States
that the right of cross-examination of a witness is limited to the sub-
jects of his direct examination. This rule finds adéquate support in
Railroad v. Stimpson, 14 Pet. 448, 461, 10 L. Ed. 535, and in Houghton
V. Jones, I Wall. 702, 706, 17 L. Ed. 503. Moreover, with some few ex-
ceptions, the rule prevails in ail of the states. But from this rule is
deduced the conclusion, to which I am unable to assent, that, if a trial
court fails to confine the cross-examination of a witness to matters
concerning which he testified in his principal examination, prejudicial
and fatal error is committed. The position of Judge THAYER and
the writer of this opinion is that, after a cross-examining party has
been accorded ail of his rights as limited by the rule of Railroad v.
Stimpson and Houghton v. Jones, supra, whether the cross-examina-
tion may then take a wider scope or latitude is generally a matter within
the Sound discrétion of the trial court, and error is not committed un-
less such discrétion is abused. This position finds overwhelming sup-
port in the décisions of almost every court of last resort in the United
States, in the views of the text-writers, in the everyday proceedings of
trial courts, and in the gênerai concurrence of the bar. That a trial
court is given a broad discrétion in controlling the latitude of a cross-
examination has become an axiom of the practice. In the exercise of
that discrétion within its legitimate scope, no error, réversible or other-
wise, can be committed. It may not be said that a court is possessed
of a discrétion to commit error. The doing of whatever under the law
it has the power to do or the discrétion to do is not erroneous. Error
may be successfully predicated upon an abuse of discrétion, but not
upon the reasonable exercise thereof. It may be safely asserted that,
in nearly every case in which the rule that a cross-examination is limit-
ed to the subjects of the examination in chief is declared, the appellant
was pressing for a latitude which the court in its discrétion declined to
allow, and that in most of the others there appeared to be such an abuse
682 129 FËDBÏIAL KBPOETEE.
of discrétion as constituted reVersible error. It rafely happens that
a reversai is avvarded because qf' a mère latitude of cross-examination, if
the subjects thereof were pertinent to the issues. That there is a broad
field of discrétion between the limits of the affirmative, positive rights
of a cross-examining party on the one side, and the line of abuse and in-
justice upon the other is indisputable.
In Rea v. Missouri, 17 Wall. 532, 542, 21 L. Ed. 707, it was said :
"Still, where the cross-examination is directed to matters not iiiqulred
about in the principal examination, its course and extent Is very largely sub-
ject to the control of the court, in the exercise of a Sound discrétion, and the
exercise of this discrétion is not reviewable on writ of error."
In Wills v. Russell, 100 U. S. 621, 626, 25 L. Ed. 607, the cases of
Raiiroad, V. Stimpson and Houghton v. Jones, supra, which hold that
a cross-examination is limited to matters stated in the examination in
chief, are cited and approved, but it is expressly said that they do not dé-
cide the converse of the proposition. The court, speaking through Mr.
Justice Clifford, said:
"It has been twice so ruled by this court, and is undoubtedly a valuable
rule of practice, and one well caleulated to promote regularity and logical
order in jury trials ; but it is equally well settled by the same authorities
that the mode of conducting trials, and the order of introduclng évidence,
and the time wben it is to be introduced, are matters properly belonging very
largely to the practice of the court where the matters of fact are tried by a
jury. Both of the cases referred to by the plaintifCs show that the judgment
wlU not be reversed merely because it appears that the rule limiting the cross-
examination to the matters opened by the examination in chief was applied
and enforced; but those cases do not décide the converse of the proposition,
nor is attention called to any case where it is held that the judgment will be
reversed because the court trying the issue of fact relaxed the rule and al-
lowed the cross-examination to extend to other matters pertinent to the issue.
Cases not infrequently arise where the convenience of the witness, or of the
court, or the party producing the witness, will be promoted by a relaxation
of the rule, to enable the witness to be discharged from f urther attendance ;
and, if the court in such a case should refuse to enforce the rule, it clearly
would not be a ground of error, nnless it appeared that It worked serions in-
jury to the opposite party."
In Davis v. Coblens, 174 U. S. 719, 726, 19 Sup. Ct. 832, 835, 43 L.
Ed. II 47, it is said:
"Thereupon defendant's counsel cross-examined him at great length, against
the objection of plaintiffs, regarding his business of buying and selling real
estate, and the extent of it and eharacter. The ruling of the court permitting
the cross-examination is assigned as error. We see no error in it. The ques-
tion of plaintiffs' counsel was a gênerai one, and opened many things to par-
tieular inquiry. The extent and manner of that inquiry was necessarily
within the discrétion of the court, even though it extended to matters not
connected with the examination in chief. In Rea v. Missouri, 17 Wall. 532
[21 L. Ed. 707], it was said: 'Where the cross-examination is directed to
matters not inquired about in the principal examination, its course and extent
are very largely subjeçt to the control of the court, in the exercise of a sound
discrétion, and the exercise of that discrétion Is not reviewable on a writ of
error.' "
In Homestake Min. Co. v. Fullerton, 69 Fed. 923, 16 C. C. A. 545,
this court said :
"Trial courts should be allowed a libéral discrétion In determining the lati-
tude to be given to a cross-examinatiou, and particularly in determining the
form in which questions should be propounded to a witness which are simply
RESURRECTION GOLD MIN, OO. V. FORTUNE GK)LD MIN, CD. 683
designed to impeach bis credibllity. We are not prepared to say, therefore,
that the trial court exceeded its discretionary powers lu sustainlng the ob-
jection to the several questions above quoted."
The doctrine was again referred to with approval by this court in
Sauntry v. United States, 117 Fed. 132, 135, 55 C. C. A. 148.
In Seymour v. Lumber Co., 58 Fed. 957, 7 C. C. A. 593, it was said
by the Circuit Court of Appeals of the Sixth Circuit:
"The course and estent of eross-examination, when directed to matters not
inquired about In the principal examination, is very largely subjeet to the
control of the court, in the exercise of a sound discrétion, which is not re-
viewable on writ of error."
As illustrative of another phase of the same doctrine, Judge Taft said,
concerning the refusai of a trial court to allow a re-examination of a
witness :
"This subject was collatéral to the main issue, and largely withln the dis-
crétion of the court." Sutherland v. Round, 57 Fed. 467, 6 0. C. A. 428.
In Hart v. Atlas Knitting Co., "jj Fed, 399, 23 C. C. A. 198, the Court
of Appeals for the Second Circuit said :
"It is true that no issue wàs raised by the pleadings as to the cancellation
of orders with other persons, but courts hâve universally recognized the neces-
sity of leaving the course and extent of a cross-examination very largely to
the discrétion of the trial judge."
The extent to which a witness may be cross-examined is within the
discrétion of the trial court, and it will not be reviewed unless the dis-
crétion has been abused. Root v. Railway, 183 Mass, 418, 67 N. E,
365 ; State v, Haab, 105 La. 230, 29 South. 725 ; Pennsylvania Co. v.
Newmever, 129 Ind. 401, 28 N, E. 860; Hanchett v. Kimbark, 118
111, i29,'7 N. E. 493 ; State v. Bunker, 7 S. D. 642, 65 N, W. 33 ; State
V. Pf efferle, 36 Kan. go, 12 Pac. 406 ; Wroe v, State, 20 Ohio St. 460 ;
Hanoiï v. State, zj Ohio St. 178, 41 Am. Rep, 496; White v. McL,ean,
57 N. Y. 671 ; City v. Gavin, 182 111. 232, 54 N. E. 1035 ; Lesser v,
Furniture Co., 68 N. H. 343, 44 Atl. 490.
The rule was interpreted by Mr. Justice Sharswood in Jackson v,
Litch, 62 Pa, 455, as follows:
"A party will not be permitted to lead out new matter, constitutlng his
own case, by the cross-examination of his adversary's witnesses. Bllmaker
V. Buckley, 16 Serg. & R. 72; Floyd v. Bovard, 6 W. & S. 75; Mitchell v.
Welch, 17 Pa. 339 [55 Am. Dec. 557] ; Turner v. Reynolds, 23 Pa. 199. Yet
I hâve not been able to find a single case in which this court has reversed
on that ground. It has generally been consldered as a matter within the
Sound discrétion of the court below, and in Schnable v. Doughty, 3 Pa. 392,
though the Suprême Court thought that the rule had been violated, they dis-
tinctly refused to reverse. In Helser v, McGrath, 52 Pa. 531, the présent
Chief Justice remarked: 'Thèse rules, as well as ail others on the order of
examinatlon of witnesses and the introduction of testimony, hâve for their
object the eliciting of truth, and the préservation of the equality of the rights
of parties in trials in courts. Much, however, must still be left to the dis-
crétion of the judge. Neither the rule nor the exception must be allowed, if
it can be prevented, unduly to préjudice the parties. The exercise of a pru-
dent discrétion by the judge is the only guard against this in many cases.
Although we will not reverse in this case for an excess of latitude in the cross-
examination, because we do not dlscover the injury from It, yet we think it
was very great, and beyond the limits of the authorlties generally. Doubt-
less the learned judge thought he saw the propriety of allowing It, and we
684 129 FEDERAL EEPOETEK.
eannot say he was wrong, for we hâve not his means of judging.' It may be
concluded from thèse authorlties that, In order to reverse, It must be an ex-
trême case, in which discrétion has been abused, and in which it is apparent
that the party has been injured."
This case was cited and the doctrine reafSrmed in Bohan v, Avoca,
154 Pa. 404, 26 Atl. 604.
It is said in the concurring opinion in Balliet v. United States, supra,
that, if therule limiting a cross-examination to the subjects of the ex-
amination in chiefis relaxed or suspended when the trial court is of
the opinion that it is necessary or convenient to do so, the rule is abro-
*gated and ceases to be a rule at ail ; that such discrétion is not com-
mitted to a court. But there are other rules in the law of évidence
equally well settled, the rigid enforcement of which is by universal con-
sent committed to the discrétion of the trial courts. Thus in Ballew v.
United States, 160 U. S. 187, 193, 16 Sup. Ct. 263, 40 ly. Ed. 388, the
court recognized and applied the well-known rule that a re-examination
of a witness should be confined to matters to which the cross-examina-
tion related, and that an attempt to draw out new matter is, in the lan-
guage of that court, clearly improper. i Greenleaf on Evidence, § 467.
Though this is a recognized rule of the law of évidence, nevertheless ail
will agrée that its suspension or relaxation in actual practice is almost
as fréquent as the administration of the oath to witnesses.
Again, it is a gênerai rule that leading questions on direct examina-
tion are not permissible. That rule was applied by this court in Parker
V. Brown, 85 Fed. 595, 29 C. C. A. 357. But it was said by the Su-
prême Court in Railroad v. Urlin, 158 U. S. 271, 273, 15 Sup. Ct. 840,
39 L. Ed. 977, that the granting or refusai of permission to ask such
questions is within the discrétion of the trial court, and that there must
appear a plain case of abuse of discrétion in order to justify the claim
that error was committed ; and it was said by this court in Eli Mining
& Land Co. v. Carleton, 108 Fed. 24, 47 C. C. A. 166, that an objection
to a question as leading is "never regarded by an appellate court."
It seems that the true theory is that thèse rules are intended primarily
to limit the positive rights of the parties when engaged in the examina-
tion or cross-examination of witnesses, but are not intended to impose
an unyielding limitation upon tiie discrétion of a court as exigències
anse during the progress of the trial. By denying to trial courts a
discrétion in the enforcement of thèse rules — and I do not conceive that
there is any différence between them which is material to the matter
under discussion — we would add immeasurably to that great mass of
technicalities which unfortunately encroach upon, and not infrequently
entirely obstruct, the channels of justice. The object of ail évidence in
courts of justice is that the truth may be elicited, and this is of much
more importance, than the mère order in which the évidence is adduced
or the latitude allowed in the examination of witnesses. I am of the
opinion that when one of thèse rules of évidence is relaxed or suspended
by a trial court, and its action in that regard is challenged on appeal,
the appellate court does not proceed upon the assumption that réversible
error was committed, but that, on the contrary, it is presumed that er-
ror was not committed, unless it clearly appears that the discrétion of
the trial court was abused.
KESUKRECTION GOLD MIX. CO. V. FORTUNE GOLD MIN. CO. 685
THAYER, Circuit Judge (dissenting in part). I am unable to concur
in the conclusion announced on ail of the questions that are considered
and decided in the foregoing opinion. I do not concur in the view
tliat the instruction of the trial judge relative to the post at the corner
No. 3 of the Fortune Iode claim was an erroneous instruction. The pat-
ent granting the Fortune Iode, and the original and amended field notes
of the survey on which the patent was founded, were read in évidence,
without objection; and it is conceded, in the foregoing opinion, that
the case stands as though the field notes were written into the descrip-
tion of the patent. Therefore the patent déclares that corner No. 3 of
the claim as granted is marked by a post four inches square, four feet
long, set two feet in the ground, and having the number of the corner
and the number of the survey eut therein. When the boundaries of the
claim were run, however, according to the courses and distances men-
tioned in the patent, no post whatever was found at corner No. 3 as
thus located, but within 23 feet of that point, and to the northwest, a
post was found which was squared on one side and surrounded by a
mound of stones, and bore the number of the corner and the survev
written thereon in pencil. One witness, who was présent at the sur-
vey of the Fortune daim, testified that this was the very post which
was erected by the surveyor to mark corner No. 3 when the claim was
surveyed, and that it was at the point where the surveyor placed it.
Several other witnesses, who lived in the vicinity and were familiar with
the locality, gave évidence tending to show that the post had been
standing in the same position since the date of the survey, and had been
seen repeatedly by them since that time. One of thèse witnesses, a
surveyor by profession, testified, in substa • :, that he had seen this
post on several occasions since 1887, and had recognized it as the estab-
lished corner of the Fortune claim by tying other surveys made by
him to that corner, and that he had driven a nail into the post, to identify
it, as early as 1887, and that he found the nail in the post as late as 1901,
having tied other surveys to that corner in the meantime.
Now, on this state of facts, when the learned trial judge came to
charge the jury, he instructed them as follows :
"The court instriicts the jury that monuments control the courses and dis-
tances mentioned in a patent, and if the monuments called for in the patent
or field notes of the original survey are found upon the ground, or supplied
by proof of their former existence, then distances must be lengthened or
shortened and courses changea to conform with the location of said monu-
ments ; and In this connection the court instructs you that a stake, such as
described by the witnesses In this case as located on corner No. S, is sufflcient
to meet the calls of the patent ; and, if they believe from the évidence that
such stake is at the place at which corner No. 3 was located by the deputy
minerai surveyor in makiug survey for patent, then the jury may flnd that
the Une of the patent should be extended to said corner No. 3."
In the same connection he instructed the jury :
"That it is the Unes actually run out and marked upon the grounds by the
surveyor making survey for patent, when such Unes can be identifled, and not
the lines which said surveyor reports in his field notes, which control and
identify the granted premises. If, therefore, the jury believe from the évi-
dence that the deputy minerai surveyor, in making survey for the Fortune
patent, placed his monument marking corner No. 3 at the point where said
monument is found to-day, and where the same la placed by plaintifE's maps
686 129 FEDERAL EaPOETBR.
and plats, then your fiuding should be for the plaintiff ; that it is the owncr
of the Fortune daim to corner No. 3 as indlcated by the monument now ex-
isting upon the ground."
The trial judge declined to give an instruction in favor of the plain-
tiff in error which is quoted above in the majority opinion, and he also
declined to give an instruction which was asked by the plaintiff in error
to the effect that corner No. 3 of the Fortune Iode mining claim should
be re-established by running from corner No. 2 on the courses and dis-
tances given in the patent, "unless [the jury found] from a prépondér-
ance of the evidepce that the stake as contended for by the plaintiff, and
which now stands upon the ground, does comply with the description of
said post as set out in the patent." In other words, plaintiff in error,
who was the défendant below, asked the trial court, first, to permit the
jury to détermine whether the post standing upon the ground at corner
No. 3 complied sufiîciently with the description of the post at that corner
as given in the patent, and, in the second place, to déclare, as a matter of
law, that the post did not so comply.
On the State of facts above narrated, I am of opinion that the trial
court was fully warranted in instructing the jury, as it did in sub-
stance, that if the post found on the ground at corner No. 3 was at the
place where the surveyor placed his monument at the time of the sur-
vey to mark corner No. 3 of the claim, then the existing post might be
regarded as answering the calls of the patent, and that the boundary of
the claim should be extended thereto. There would seem to be little jus-
tice in depriving the plaintiff below, who is the défendant in error hère,
of valuable property by adhering strictly to courses and distances, which
are apt to be to some extent erroneous, if the jury were satisfied
by reliable testimony, as they appear to hâve been, that the artificial
monument found on the ground was in the exact spot where the survey-
or had placed it to mark corner No. 3 at the time he surveyed the claim
for patent. The patent and field notes showed that the corner in ques-
tion had been marked at the time of the survey by an artificial monu-
ment, to wit, a post of-a certain description; but when the corner was
located by following courses and distances, no post whatever was found
at that point, or évidence that one had ever been erected at that place.
This fact alone created some uncertainty — a doubt as to the accuracy of
the course. Near by, however, was found a monument, that had evi-
dently been set by a surveyor, which corresponded generally with the
monument called for in the patent. It was so near as to justify an
inference that it was the post referred to in the patent, and that, as
frequently happens in running Unes over a rough country, the course
and distance from corner No. 2 to corner No. 3 had been read errone-
ously. Thèse facts, in my judgment, warranted the introduction of oral
proof to the effect that the monument found on the ground was the
one set by the surveyor, or was at the very spot where he had placed
a post to mark the corner. Proof to this effect was in fact received,
without objection from anybody that the réception thereof violated any
rule of évidence, and it was ample to establish the fact which it was
intended to establish. The doctrine announced in the foregoing opinion
comes dangerously near declaring that if a monument set by a surveyor
to mark the boundary of property is accidentally destroyed, or is not
EESUERECTION GOLD MIN. CO. V. FORTUNE GOLD MIN. CO. 687
described to a nicety, the owner loses his property, although he may be
able to prove to a certainty exactly where the monument was set, or
that the monument remains where it was placed by the surveyor but
was not described accurately. I am unable to concur in this view.
Furthermore, I hâve not been able to conclude that a material or
prejudicial error was committed by the trial court in refusing to permit
the witness McNeece to answer the question, on his cross-examination,
if, when the Fortune claim was surveyed, the surveyor measured the
distance from corner No. 4 of that daim to corner No. 4 o£ the Kokomo
claim, which distance, as the patent declared, was 196 feet on a certain
course. Conceding that an answer to this question might hâve been
properly allowed, it is a différent question whether the court committed
a réversible error in sustaining an objection to the interrogatory. The
object which the plaintiff in error, who was the défendant below, had
in view in asking this question, appears to hâve been to show that if
the distance between thèse corners of the Kokomo and the Fortune was
as specified — that is to say, 196 feet — then corner No. 4 of the Fortune
would be located about ^23 feet distant from the post which was found
at corner No. 3, making the claim of excessive width ; whereas if corner
No. 4 of the Fortune was located according to this call of the patent —
that is to say, 196 feet from corner No. 4 of the Kokomo — it would
be in the neighborhood of 300 feet from corner No. 3 of the Fortune
as located by following courses and distances, which the défendant in-
sisted should be followed. In other words, the évidence tended, in
some measure, to confirm the contention of the défendant below as to
the proper location of corner No. 3, while it tended in some measure to
overcome plaintiff's contention on the same point. But as I read the rec-
ord, the fact which the défendant below wished to establish was conclu-
sively shown afterwards, by the testimony of a surveyor who had meas-
ured the distance in question, that if corner No. 4 of the Fortune was lo-
cated 196 feet distant from corner N0.4 of the Kokomo, then it would be
at a point 328 feet distant from the post which, as the plaintiff claimed,
was set to mark corner No. 3 of the Fortune. There seems to hâve been
no substantial controversy on this point, so that it is difficult to see in
what manner the défendant below was prejudiced by the refusai to allow
McNeece to answer the question if the distance between the two corners
was measured. The fact which the défendant wished to establish, and
from which it desired to draw inferences, was established by authentic
testimony, and does not seem to hâve been seriously disputed. I am
of opinion, therefore, that it is overtechnical, unnecessary, and unwise
to hold that the refusai of the trial court to permit McNeece to answer
this particular question on his cross-examination, was a material error.
Incidentally, the foregoing opinion contains the statement — although
the case at bar does not seem to involve a discussion or décision of that
question — that "the party on whose behalf a witness is called has the
right to restrict his cross-examination to the subjects of his direct ex-
amination, and a violation of this right is réversible error." This state-
ment, besides being unnecessary, is, in my judgment, erroneous, in that
it States the rule too broadly, and is calculated both to mislead practi-
tioners and cause them to sue out writs of error on insufficient grounds.
While it is true that it is customary in the fédéral courts to limit the
688 129 FEDERAL EBPORTEB.
cross examination of a witness to matters inquîred of în chief, yet it is
not true that every relaxation of this rule constitutes a réversible error.
As Mr. Justice Clifford well observes in Wills v. Russell, loo U. S.
621, 626, 25 L. Ed. 607:
"Cases not infrequently arlse where the convenîence of the witness or of
the court or the party producing the witness wlll be promoted by a relaxation
of tbe rule, to enable the witness to be discharged f rom further attendance :
and, if the court in such a case should refuse to enforce the rule, it clearly
would not be a ground of error, unless it appear that it worked serions injury
to the opposite party."
No fédéral case bas been cited, and none, I apprehend, can be found,
where the judgment of a trial court bas been reversed solely because a
question was asked of a witness on cross-examination about a matter
not inquired of in chief. The cases cited in support of the doctrine an-
nounced in the foregoing opinion are those where a litigant was com-
plaining in the appellate court because the trial court did not permit a
witness to testify on cross-examination about matters to which he had
not been interrogated in chief, and the rulings were upheld. Trial
judges will often find it to be convenient, and even necessary, to permit
a witness to be asked a question or questions on cross-examination rel-
ative to a subject about which he has not testified on his direct exam-
ination. They must of necessity exercise some discrétion on such occa-
sions, and the true doctrine is, in my opinion, that a judgment will not
be reversed on appeal because of some relaxation of the gênerai rule,
unless the trial court abuses its discrétion and permits a witness to be
interrogated on his cross-examination about matters not gone into in
chief, when there was no reasonable excuse for so doing, and when it is
apparent that the opposite party was thereby prejudiced.
I hâve not been able to conclude that the exclusion of the location cer-
tificates was such an error as warrants a reversai of the judgment.
It is conceded by learned counsel for the plaintifï in error that the loca-
tion certificates cannot be introduced for the purpose of contradicting
the patent as to the area of the claim, or in any other respect, and such
is clearly the law. Doe v. Waterloo Mining Co. (C. C.) 54 Fed. 935,
940; Waterloo Mining Co. v. Doe, 27 C. C. A. 50, 82 Fed. 45 ; Golden
Reward Mining Co. v. Buxton Mining Co. (C. C.) 79 Fed. 868, 874 ;
Lindley on Mines (2d Ed.) § 778. But it is claimed, as I understand,
that the location certificates contained an important admission on the
part of McNeece, who was one of the locators, which tended to rebut
his statement that the post found on the ground at corner No. 3 of the
claim was where it was originally located by the surveyor. The admis-
sion, as I understand, is contained in the first paragraph of the amended
location certificate, which déclares, in substance, that McNeece and
others had made a location by right of discovery, in compliance with
the act of Congress and the local customs, claiming 1,500 linear feet on
the Fortune Iode vein "along the vein thereof with ail its dips, angles
and variations as allowed by law, together with 150 feet on each side of
the middle of said vein at the surface so far as can be determined f rom
présent developments * * * within the lines of said claim 395 feet
running N. 88° 30' W. from center of discovery shaft and 1105 feet run-
ning S. 80° 30' E. from center of discovery shaft." It is said that the
BALLIET V. UNITED STATES. CS9
course of the center line of the vein as thus given corresponds with the
course given in the patent from corner No. 2 to corner No. 3, the two
lines being practically parallel, and that the center line of the vein pro-
jected would intersect the east end Hne more than 150 feet south of the
post found at corner No. 3, which the plaintiff below claimed to be the
true corner as actually located by the surveyor. It will be observed,
however, from the language employed in the location certificate, "so
far as can be determined from présent developments," that when this lo-
cation certificate was prepared the course of the vein — that is to say, the
middle of the vein at the surface — could only be approximately de-
termined. So far as developments at that time had disclosed, the mid-
dle thread of the vein was believed to be about parallel with the line from
corner No. 2 to corner No. 3. It is quite apparent, from the location
certificate, that McNeece and his fellow locators intended to claim 150
feet on each side of the center of the vein at the surface, wherever sub-
séquent developments might prove the center line to be. He or the sur-
veyor supposed at the time the course of the vein to be about N. 88° 30'
W. from the center of the discovery shaft. I fail to see that the faci.'
that this center line of the vein, as described by the location certificates,
intersects the east end line of the claim more than 150 feet south of the
post, was entitled to any greater significance, or that it gave any in-
creased weight to the fact, which was not denied, that the line drawn
from corner No. 2 to corner No. 3 of the claim, following courses and
distances, established corner No. 3 about 23 feet south of the post which
was found on the ground. The actual course of the vein was founded
on supposition largely. As the location certificates show, it was believed
to be about parallel with the north side line as the claim had been sur-
veyed, and it was so described probably without any survey of the cen-
ter line of the vein at the surface because it could not be accurately
determined. The real point in dispute between the parties, as it seems
to me, was whether the post which was found at the corner No. 3 was
at the spot where the surveyor placed it to mark the corner, and that
issue, in my judgment, was fairly tried.
I concur in what is said in the foregoing opinion concerning the prop-
er rule for the admeasurement of damages.
BALLIET V. UNITED STATES.
(Circuit Court of Appeals, Elghth Circuit March 21, 1904.)
No. 1,886.
l. Cbiminal Law— Witnesses — ExAMiNATiON— Notice to Accused.
Since Rev. St. U. S. § 1033 [Û. S. Comp. St. 1901, p. 722], providlng that
a person indicted for treason or a capital offense shall be furnished witli
a list of witnesses, to be produced three days before tlie trial on the in-
dictment for treason and two days before the trial of any other capital
cases, limits such right to trials for treason and capital offenses, it Im-
plledly authorizes the examination of witnesses in trials in the fédéral
U 1. See Criminal Law, vol. 14, Cent. Dig. §§ 1420, 1422,
129 F.^44
690 120 FEDERAL KEPOBTER.
courts for lesser crimes wlthout such wltnesses belng previously disclosed
to accused.
2. Same— Fedbbal Cotjets— State Law— Adoption— Pbactice—Custom.
A fédéral court In 1859 adopted certain chapters of the Code of the
State In whlch it was sittlng relating to criminal procédure, requiring the
names of ail witnesses, on whose évidence the indlctment is found, to be
indorsed on the indictment, and providing that the county attorney should
not introduce any witness who was not examined before a committing
magistrate or the grand jury, etc. In 1893 the practice In such court
was changea so as to authorlze the government to introduce testimony
of witnesses other than those whose names were indorsed on the indlct-
ment, without giving prevjous notice to accused. Eeld, that a défendant
subsequently indicted was not entitled to claim the benefit of the former
practice.
3. APPEAL— ASSIGNMENTS OF ErbOB— OBJECTIONS TO TESTIMONY.
Where nelther the assignment of errors nor the brief of counsel on ap-
peal quotes the substance of testimony objected to. In full, as requlred
by Court of Appeals rules 11 and 24 (89 Fed. vil, xi, 32 C. G. A. xiv, xxiv),
and the pages of the record where the testimony is reported are not re-
ferred to, such objections wlll not be revlewed.
Same— Bill of Exceptions— Exhibits— Objections.
Where objections to the admission of written and printed exhibits are
relied on on appeal, it is Improper to descrlbe them In the blll of excep-
tions merely by date and gênerai import, but they should be set out In
full at the places where they appear to hâve been offered and read.
5. Use of Mails— Scheme to Defkaud— Evidence— Lettees—Adveetising
Matteb.
Since, in a prosecution for use of the mails in furtherance of a scheme
to defraud, In violation of Rev. St. U. S. § 5480 [U. S. Comp. St. 1901, p.
3C90], by Induclng the public to purchase worthless mining stock, the glst
of the offense Is fraud, letters and telegrams prlncipally written by de-
fendant, showlng that be exerclsed absolute control of a mining company,
the stock of whlch he was engaged in selling, some of such letters con-
tainlng false and fraudulent représentations Induclng a sale of stock,
and other false and fraudulent advertisements in newspapers and maga-
zines, printed as news and paid for at high rates as advertisements, whicb
pretended to glve a true account of defendant's achlevements as a min-
ing expert, and calculated to deceive the public, were admissible.
6. Same— Witnesses— Défendant — Ceoss-Examination— Mateeial Matteks—
Failube to Explain— Pbestjmptions.
Where, In a prosecution for using the mails with Intent to defraud, de-
fendant became a witness in his own behalf, as authorized bv Act March
16, 1878, c. 37, 20 Stat. 30 [U. S. Comp. St. 1901, p. 660], providing that
a person charged with an offense shall at hls own request, but not other-
wise, be a compétent witness, and that hls fallure to make such request
shall not create any presumption agalnst hlm, an instruction that, défend-
ant having goue on the stand, If he had not fully explained or had not
explalned matters materlal to the Issues which were naturally withln
his knowledge, the jury might conslder such fallure as a circumstance
tendlng to show that the facts, If explalned, would bear out the conten-
tion of the government, and his fallure to explain them, or glve a truth-
ful explanatiou, was agalnst hlm, was erroneous as mlsleading, and as
placing an undue burden of proof on défendant
In Error to the District Court of the United States for the Southern
District of lowa.
F. W. Lehmann (S. F. Balliet, on the brief), for plaintiff in error.
Lewis Miles, U. S. Atty., for défendant in error.
Before SANBORN, THAYER, and HOOK, Circuit Judges,
BALLIET V. UNIÏED STATES. 691
THAYER, Circuit Judge, delivered the opinion of the court.
This is a criminal action which was brought by the United States
against Letson Balliet for an alleged violation of section 5480 of the
Revised Statutes of tlie United States [U. S. Comp. St. 1901, p. 3696].
As no questions are raised in this court respecting the sufftciency of the
indictment, it will suffice to say, generally, that two indictments were
found against Letson Balliet, the plaintifL" in error, which were subse-
quently Consolidated • for trial; that the indictments charged, in sub-
stance, that Letson Balliet, the plaintiff in error, had devised a scheme
and artifice to defraud certain persons, which was to be consummated
by opening correspondence with them by means of the United States
mail; that his scheme was to prétend that he was the owner of the
White Swan Gold Mine, located at Baker City, in the state of Oregon,
and to induce persons to subscribe and pay for stock in said mines by
false représentations as to the richness, value, condition, and output
of the mines, with intent to couvert the money so obtained from the sale
of stock to his own use; and that in furtherance of such scheme he
deposited varions letters, circulars, newspapers, etc., in the mail, which
were addressed to certain persons, ail of which contained various false
représentations concerning the value and condition of the mines, that
were known to him at the time to be untrue. The trial of the Con-
solidated indictments resulted in the production of a great mass of évi-
dence, oral and written, which tended to support the charge, and on the
strength of which the accused was ultimately convicted.
In this court the accused seeks to obtain a reversai of the judgment
below, because the names of certain witnesses who were allowed to
testify in behalf of the government were not indorsed on the indict-
ments prior to the trial, and because no notice was served upon the
accused, in advance of the trial, that such persons would be produced
as witnesses against him, also because incompétent testimony was intro-
duced during the progress of the trial, and because the jury were mis-
directed. The record discloses that, by an order made by the District
Court of the United States for the Southern District of lowa in Junc,
1859, certain chapters of the Code of lowa, relating to grand jurors and
criminal procédure, were adopted and put in force in that District.
Two sections of the local statute, which are now sections 5276 and 5373
of the Code of lowa of 1897, that were so adopted and put in force, in
substance, require the names of ail witnesses on whose évidence an
indictment is found to be indorsed thereon before it is presented in
court, and also provide that the county attorney, in ofïering évidence
in support of an indictment, shall not be permitted to introduce any
witness who was not examined before a committing magistrate or the
grand jury, and the minutes of whose testimony was not presented with
the indictment, to the court, unless he shall hâve given the accused,
at least four days before the commencement of the trial, a notice in writ-
ing stating the name, place of résidence, and occupation of such witness,
and the substance of what he expects to prove by him on the trial. It
further appears that from and after the promulgation of the aforesaid
rule, and up to the year 1893, it was the uniform practice in the fédéral
courts for the Southern District of lowa to indorse upon indictments
found in those courts the names of witnesses who had testified before
692 129 FEDERAL REPORTER.
the grand jury. In the year 1893, however, during the progress of a
criminal trial in the United States Court for the Southern District of
lowa, it was decided that on the trial of a criminal case the United
States could introduce testimony of witnesses, other than those whose
names were indorsed on the indictment, without having given the four
days' notice prescribed by the local statute ; and continuously since that
ruling was made it has been the custom and practice, in the trial of crim-
inal cases in the Southern District of lowa, to permit the United States
to introduce in its testimony in chief, as witnesses, persons whose names
had not been indorsed on the back of the indictment, and to do so
without giving any previous notice whatsoever to the défendant. This
practice, as the record discloses, has been uniform from the year 1893
down to the time when the trial in the case at bar took place.
In view of thèse facts, we conclude that the judgment below should
not be reversed because some witnesses were allowed to testify on be-
half of the United States whose names were not indorsed on the in-
dictments, although no notice was given to the accused that such wit-
nesses would be produced. Except when a person is indicted for
treason or some capital offense (vide section 1033, Rev. St. U. S. [U. S.
Comp. St. 1901, p. 722]), there is no provision found in the fédéral stat-
utes requiring the accused in a criminal action to be furnished with a
list of the witnesses who will be produced against him, or requiring the
names of witnesses to be indorsed on the indictment ; and the fact that
a spécial provision is made for advising the accused of the names of
witnesses who will be produced on trials for treason and other capital
offenses warrants the inference that in prosecutions for other offenses
against the laws of the United States it is unnecessary to advise the
accused of the names of witnesses who will be sworn. The maxim,
"Expressio unius est exclusio alterius," clearly applies. By virtue of
section 1033 [page 722], supra, a person indicted for treason or a cap-
ital offense is entitled to be furnished with a list of witnesses to be pro-
duced, three days before the trial on an indictment for treason and tw6
days before the trial in other capital cases, and, if the accused season-
ably claims this right, it is error to put him on trial, and permit witness-
es to testify against him, without furnishing him with a list. Logan
V. United States, 144 U. S. 263, 304, 12 Sup. Ct. 617, 36 L. Ed. 429.
But in the absence of some statute prescribing a contrary rule, there is
neither error nor irregularity in permitting a witness for the govern-
ment to be sworn in criminal cases, other than those above mentioned,
whose name does not appear on the back of the indictment or has not
been furnished to the accused. Thiede v. Utah Territory, 159 U. S.
510, 515, 16 Sup. Ct. 62, 40 L. Ed. 237. Waiving, on this occasion,
any considération of the question whether it was compétent for the
Circuit Court of the United States for the Southern District of lowa
to adopt a rule, as it appears to hâve donc, which would operate to
exclude as witnesses in criminal proceedings, other than capital cases,
persons who were qualified to testify under the laws of the United
States, because their names were not indorsed on the indictment or
furnished to the défendant, we are of opinion that, even if it was com-
pétent for the court to prescribe such a rule, the rule was practically
abrogated and annulled, nearly 10 years before the case at bar was tried.
BALLIET V. UNITED STATES. <i93
by the same court which prescribed it, by the adoption of a contrary
practice and by an uniform adhérence to the contrary practice. The
first ground of reversai is therefore untenable, and must be overruled.
The errors that are assigned because of the admission of incompétent
évidence relate to two kinds of testimony: First, to oral testimony;
and, second, to written and printed exhibits, consisting of letters, tele-
grams, circulars, and publications in varions newspapers, which the
défendant had caused to be printed and distributed by means of the
mail. In so far as the assignments are addressed to oral testimony
which was received on the trial, they will be ignored, because they are
not assigned in conformity with rules 1 1 and 24 of this court (89 Fed.
vii, xi, 32 C. C. A. xiv, xxiv), to which we hâve frequently alluded.
Neither in the assignment of errors nor in the brief of counsel is the
substance of the objectionable testimony quoted in fuU, as the rules re-
quire, nor are we referred to the pages of the record where the testi-
mony is reported, so that we can find it conveniently without loss of
time, and ascertain if a seasonable objection in due form was interposed
when it was offered. Where this is not donc, and the record, as in
the présent case, is lengthy, we will not consider objections' to the ad-
mission or exclusion of oral testimony, as we hâve frequently decided.
Lincoln Savings Bank & Safe-Deposit Co. v. Allen, 27 C. C. A. 87, 82
Fed. 148; City of Lincoln v. Sun Vapor Street Light Co., 8 C. C. A.
253, 59 Fed. 756 ; United States v. Indian Grave Drainage District, 29
C. C. A. 578, 85 Fed. 928. If counsel will not take the trouble to state
the full substance of évidence which they claim to hâve been erroneously
admitted, and point out the pages in the record where it can be found
and examined, we may well assume that the alleged error is not ma-
terial, and accordingly ignore it.
Concerning the written and printed exhibits which, as the plaintiff in
error claims, were erroneously admitted in évidence, it is to be ob-
served, in the first place, that some of them are not set out in full in
the bill of exceptions, and, in the second place, that the objections which
were made to the admission of ail the exhibits were couched in the most
gênerai terms, the objection being that they were "incompétent, ir-
relevant, and immaterial." None of the exhibits are copied in the bill
at the places where they appear to hâve been offered and read, but they
are found elsewhere ; some of them are copied in part only, while oth-
ers are not copied even in part, but are described merely by their date
and gênerai purport. This method of preparing a bill of exceptions is
subject to grave criticism, and the practice of making up a bill in that
form ought to be discouraged, since it renders it impossible for an ap-
pellate court to détermine readily what évidence was in fact admitted,
what was its précise nature, and what may hâve been its bearing upon
the issues in the case. Waiving thèse objections to the bill of excep-
tions, however, and conceding that the question whether thèse exhibits
were properly admitted în évidence is before us in such a form that we
can consider it, we hâve concluded that the question must be answered
in the affirmative. The letters and telegrams in question were prin-
cipally written by the défendant himself. They showed that he exer-
cised absolute control over the affairs of the White Swan Mines Com-
pany, Limited, whose stock he was engaged in selling. They further
694 129 FEDERAL BBFOBÏEK.
showed the nianner in which he conducted the business of that Com-
pany, and the use that he made of the money which he received from
the sale of its stock. Some of the letters also contained représentations
that were made by the défendant for the évident purpose of inducing
the sale of its stock. The other exhibits consisted principally of reports
made by the défendant to stockholders of the White Swan Mines Com-
pany, Limited, and articles which the défendant had composed and
caused to be published in certain newspapers and periodicals, among
others, in the Chicago Inter-Ocean, the City Argus, of San Francisco,
Ainslee's Magazine, and a monthly publication termed "The Mining
News." Of thèse newspaper articles it is sufficient to say that they
were paid for at a high rate, as advertisements, out of the funds which
the défendant realized from the sale of stock, although the articles did
not appear to be advertisements, but purported to contain legitimate
items of news which the proprietors of the several publications had
gathered in the ordinary way. They were of an exceedingly laudatory
character. Some of them referred to the défendant as "The Mining
King of Eastern Oregon," "The Cecil Rhodes of America," "Oregon's
Bonanza King," "The New Star in Mining Circles," etc. Thèse arti-
cles also pretended to give a true account of the defendant's wonderful
achievements and rapid rise to eminence as a mining expert and de-
veloper of mining properties ; they also contained glowing accounts of
the richness and future prospects of the White Swan Mines. In a
word, the articles in question were well calculated to excite the cupidity
as well as to deceive credulous and ignorant people, thereby inducing
them to invest their means in purchasing the stock which the défendant
was engaged in selling. The testimony in the case also shows that the
défendant had been exceedingly industrious in giving a wide circula-
tion to thèse articles by mailing them to hundreds, if not thousands, of
persons. The case was tried below upon the correct theory, namely,
that it was incumbent upon the government to show that the défend-
ant had concocted a scheme to defraud which was to be consummated
by the use of the mails — that is, by entering into correspondence
through the mail with certain persons — and that in exécution of the
scheme he had deposited in the mail the letters which were referred to
in the indictment. In other words, the case proceeded upon the theory
that fraud was the gist of the offense charged in the indictment, and
that it must be made to appear that the defendant's purpose from the
beginning was to sell a worthless stock by means of false représenta-
tions, or a stock which was less valuable than it was represented to be,
and to appropriate the proceeds, or a part thereof, to his own use.
This being so, we are of opinion that ail of the exhibits above men-
tioned were properly received in évidence to develop the defendant's
purpose. The jury were entitled to consider ail of the defendant's acts
and déclarations in connection with the exploitation of the White Swan
Mines, both before and after the letters mentioned in the indictment
were deposited in the mail, for the purpose of determining with what
intent the défendant had acted. In no other way could his purpose be
established. Besides, the exhibits in question contained so much of
exaggeration, and were put forth in such a form, as though they con-
tained well authenticated items of news, and with such a reckless disre-
BÂIiLlËT y. UNITED STATES. .695
gard of the truth, as would fairly justify the inference that they were
intended to deceive, and were acts donc in furtherance of a scheme to
defraud by means of the mail. We think the trial court would hâve
erred had it excluded the several exhibits.
We hâve next to consider whether the jury were misdirected, and
only one alleged error of this sort is called to our attention. At the
conclusion of a somewhat lengthy charge, the trial judge made this
statement, to which an exception was duly taken :
"It bas been suggested that I hâve overlooked one thing. I may say you
may consider, in determining the question, the fact that the défendant having
gone upon the witness stand, if he has not fully explalned, or has not explained
matters which are material to the issues in this case, and which are naturally
within his knowledge, you may consider that as a circumstance tending to
show that the facts, if explained, etc., would bear out the contention of the
government, and his failure to explain them or give a truthful explanation is
against him."
We hâve not been able to conclude that this instruction states a cor-
rect rule of law, or that the giving of it was not a material error. As
we interpret this instruction, it means that, inasmuch as the défendant
had elected to testify in his own favor, if while on the stand he had not
fully explained ail matters and things material to the issues in the case
which the jury might think were naturally within his knowledge, then
the jury might conclude that the facts, etc., if he had indulged in an
explanation conceming them, would hâve borne out the contention of
the government — that is, shown that he was guilty — and that his fail-
ure to explain was against him; that is, would justify a conclusion of
guilt. This rule of law would put the défendant in a criminal case
in a peculiar attitude, for if he takes the stand as a witness he must per-
forée explain every fact and circumstance which has been put in évi-
dence against him, as tending to establish guilt, which a jury may deem
material, and such as he could explain, at the risk of having them con-
clude, because of his silence as respects such facts and circumstances,
that they are true and that he is guilty. If a défendant in a criminal
case desires to take the stand and contradict some particular fact or cir-
cumstance that has been testified to, he cannot safely do so for fear of
raising a presumption of guilt by his failure to explain other facts and
circumstances in évidence which the jury may happen to regard as
material and may think the accused could explain. The fédéral statute
(Act March i6, 1878, c. 37, 20 Stat. 30 [U. S. Comp. St. 1901, p. 660])
provides, in substance, that a person charged with an offense "shall at
his own request but not otherwise, be a compétent witness. And his
failure to make such request shall not create any presumption against
him." When the défendant in a criminal case, in compliance with this
statute, waives his constitutional privilège by taking the witness stand,
he occupies the attitude of any other witness, and may be cross-exam-
ined like an ordinary witness, and to the same extent. Fitzpatrick
v. United States, 178 U. S. 304, 315, 20 Sup. Ct. 944, 44 L. Ed. 1078.
The fédéral statute does not, like the statutes of some states (vide Rev.
St. Mo. 1899, § 2637), expressly provide that the examination of the
accused shall be limited to the matters testified to on his direct examina-
tion, but we apprehend that it should be so limited, because that is the
gênerai rule which obtains in the fédéral courts relative to the cross-
G96 129 FEDEEAL KEPOfiïEB.
examination of ail witnesses except, when the rule is relaxed, as it some-
times is, on grôlinds of convenience or necessity. Houghton v. Jones, i
Wall. 702, 706, 17 L. Ed. 503; Wills v, Russell, 100 U. S. 625, 626, 25
L. Ed. 607; Montgomery v. ^tna Life Ins. Co., 38 C. C. A. 553, 97
Fed. 913; Goddard v. Crefield Mills, 21 C. C. A. 530, 75 Fed. 818;
Safter v. United States, 31 C. C. A. i, 87 Fed. 329. It is also doubtiess
true that, when a défendant in a criminal case takes advantage of the
statute and testifies in his own favor, the government may comment en
his testimony and draw inferences therefrom as freely as if he were
an ordinary witness and not the accused. It is only where the ac-
cused fails to testify that the statute prohibits unfavorable comment
and attempts to create a presumption against him because he lias not
donc so. Conceding this much, we are nevertheless of opinion that the
instruction in question went too far, in that it required the accused to
explain every fact and circumstance which had been introduced against
nim, and gave to them additional probative force because he had not
donc so or attempted to do so. Furthermore, it left the jury at full
liberty to détermine what matters which had been given in évidence
were "material to the issues in the case," without directions on that
point, and equal liberty to détermine what matters were "naturally
within his knowledge" and susceptible of explanation. The testimony
ïn the case had taken a very wide range and covered a considérable
period of time. While on the stand some facts and circumstances that
had been introduced in évidence may hâve been overlooked by the ac-
cused or by his counsel, and he may not hâve been interrogated with
respect thereto for that reason, or they may hâve been regarded as of
no importance, or the circumstances may hâve been of a character which
admitted of no further explanation, being in themselves such circum-
stances as the jury could ignore or draw such inferences therefrom as
they thought proper. And yet the instruction was of a nature which
permitted the jury to draw unfavorabrè inferences against the accused,
because in the course of his examination he had not alluded to every
fact and circumstance already in évidence, and given an explanation
thereof consistent with his innocence. We are satisfied that the in-
struction cast an undue burden on the défendant, and that it was also
misleading. Moreover, we are not able to say with certainty, as we
must be to up'hold the verdict, that the défendant was not prejudiced
by the instruction.
The judgment below is accordingly reversed, and the case is remand-
ed for a new trial.
SANBORN, Circuit Judge (concurring). I concur in the resuit,
and in the opinion in this case, with this exception : The opinion con-
tains the statement that it is the gênerai rule in the fédéral courts rela-
tive to the examination of ail witnesses, except when the rule is relaxed,
as it sometimes is, on grounds of convenience or necessity, that the
cross-examination must be limited to the matters testified to upon the
direct examination of the witness. I concède the gênerai rule, but I
do not understand that it is discretionary with the fédéral courts to relax
the rule, on the ground of convenience or necessity, so far as to permit
a cross-examiner to cross-examine a witness, produced by his opponent.
BALLIET V. UNITED STATES. 697
upon subjects not germane to those upon which he was examined in
chief. Résurrection Gold Mining Co. v. Fortune Gold Mining Co. (C.
C. A.) 129 Fed. 668 ; Houghton v. Jones, 1 Wall. 702, 706, 17 L. Ed. 503 ;
Montgomery v. .<îCtna Life Ins. Co., 97 Fed. 913, 916, 38 C. C. A. 553,
557; Safter v. U. S., 87 Fed. 329, 330, 31 C. C. A. i, 2; Mine &
Smelter Supply Co. v. Parke & Lacy Co., 107 Fed. 881, 884, 47 C. C. A.
34, 36; I Greenleaf, Ev. § 445; Hopkinson v. Leeds, 78 Pa. 396;
Fulton V. Bank, 92 Pa. 112, 115. A rule which may be relaxed by the
court when in its opinion it is necessary or is convenient to relax it is
no rule at ail. Such an exception is the abrogation of the rule, because
it leaves its controlling force and effect in every case to the discrétion
of the trial court. In my opinion the rule has not been so abrogated
by the fédéral courts, and it ought not to be so destroyed. This rule
rests upon a sound reason, which varies not, at the discrétion of the
court, by reason of convenience or necessity. It exists because a wit-
ness during his cross-examination is the witness of the party who calls
him, and not the witness of the party who cross-examines. Wilson
V. Wagar, 26 Mich. 452, 458; Campau v. Dewey, 9 Mich. 381. The
cross-examiner has the right to bind his opponent by the testimony
of the witness upon cross-examination relative to every subject concern-
ing which his opponent examined him in the direct examination. But
he has no right to bind his opponent by the testimony of the witness dur-
ing the cross-examination upon subjects relative to which his opponent
did not examine him. If, he would examine the witness upon such
subjects, he may and he must make him his own witness, and stand
sponsor for the truth of his testimony. It is discretionary with the
court to permit the cross-examiner to do this at the time he is con-
ducting the cross-examination, because the time and the manner of the
trial are within the discrétion of the court. It is discretionary with the
trial court to permit leading questions to be put to a hostile witness upon
his direct examination. But in the fédéral courts the line of demarka-
tion which limits a rightfui cross-examination is clear and well-defined.
It is the line between subjects relative to which the witness was exam-
ined upon the direct examination and those concerning which he was
not required to testify. It exists because within that line the party who
calls the witness stands sponsor for the truth of his testimony, while
without that line he does not. It does not vary with any convenience
or necessity of court or counsel, because no convenience or necessity
can be conceived of which would not enable the cross-examiner to make
the witness his own and take the chance of his testimony. For thèse
reasons I adhère to the gênerai rule upon this subject, but am unable to
concède the correctness of the exception thereto stated in the opinion.
698 129 FEDERAL BEPOBTEE.
THE TRITON.
(Circuit Court of Appeals, First Circuit February 4, 1904.)
Ko. 486.
1. TOWAGE— LOSS OF TOW— LlABILITY OF TUG,
A tug having two laden barges in tow, the entlre tow belng 2,300 feet
long, undertook to pass tbrough a narrow channel between two islands,
instead of taking a safer course. After passlng around a rock at some
distance in front of the entranee of the channel, she was obllged to swing
to port to make the entranee, and one of the barges struck a rock at one
side of the entranee and was sunk. Held that, having exercised her op-
tion as to the course, she was bound to the strictest care, and must be
chargea with llability for the loss, in the absence of évidence to show
that the barge was not properly foUowlng.
Appeal from the District Court of the United States for the District
of Massachusetts.
Eugène P. Carver (Edward E. Blodgett, on the brief), for appel-
lant.
Robert M. Morse and William M. Richardson, for appellee.
Before COLT and PUTNAM, Circuit Judges, and ALDRICH, Dis-
trict Judge.
PUTNAM, Circuit Judge. This is a libel against the steam tug-
Triton, alleging that she was négligent in rendering towage services,
and claiming damages on that account. The decree of the District
Court was for the libelant, and the claimant of the tug appealed.
On January i6, 1898, the tug left Clark's Point, below New Bed-
ford, in Buzzards Bay, bound for Boston, with two coal-laden barges
in tow. The barge immediately following the tug was the Pine Forest.
The length of the entire tow was about 2,300 feet. Everything went
well until near 4 o'clock in the afternoon. The weather was clear,
with light winds, and with a very moderate set of the current. The
normal rise and fall of the tide in Buzzards Bay is only about three
feet. The tug, as usual, had the option of determining the courses,
within certain reasonable limits. She might hâve gone to the west-
ward of Cuttyhunk, where she would hâve had a clear seaway. In
stead of that, she undertook to pass through the narrow channel be-
tween Pasque Island and Nashawena Island, known as "Quicks Hole."
Lying outside of the entranee to Quicks Hole, and the distance there-
from of about the entire length of the tow, is Lone Rock, very nearly
in the path of the tug if she had proceeded in a direct Une from Clark's
Point into the Hole. She might hâve passed this rock on her star-
board, leaving it on the west, thus giving her a larger fairway and
a more direct course into the Hole. She left it on her port — that is, on
the east — which, as she made her courses, required her to change
to her port on entering the Hole. Her course was so far to the
westward of Lone Rock that the change which she was required to
make involved a considérable sweep for herself and her tow. While
1[ 1. See Towage, vol. 45, Cent. DIg. §§ 11, 20.
THE TRITON. 699
it was not unusual to make thèse various courses, and the tug is not
charged directly with fault on that account, yet, as she used her own
option in référence thereto, the court is compelled to apply to her
with great strictness the usual rules of diligence obligatory on a vessel
of her class engaged in waters with which she is presumed to be
familiar. Under the circumstances, if she had used the diligence she
should hâve used, she would hâve passed her tow into the Hole with
safety.
As, in passing Lone Rock, the tug swung her course to her port,
this left the barges heading, or sagging down, towards the project-
ing rocky shoal, known as "North Rock," which marks the entrance
to Quicks Hole on her starboard. The Fine Forest was wrecked;
and it is claimed by the libelant that she was wrecked on what is
known as the "Fourteen-Foot Spot," marking the extrême edge of
this North Rock. On the other hand, the tug claims that the barge
was wrecked on what is known as the "Félix Ledges," which are
near the center of the channel after well entering the Hole. The
Félix Ledges were not at that time shown on any chart, and had
not been disclosed by any surveys of the United States. As the case
stands, it can hardly be questioned that, if the barge struck there,
the tug was not at fault. But, on the other hand, it can hardly be
questioned, and, in fact, is apparently not questioned, that, if she
struck on the "Fourteen-Foot Spot" on the North Rock, the decree
of the District Court was correct so far as this particular point is con-
cerned.
Another barge was wrecked on the Félix Ledges about the time
this disaster occurred, and the two induced a survey by the United
States. This disclosed two pointed rocks, or bowlders, which, ac-
cording to the Coast Survey charts subsequently published and since
in use, are i8 feet below the surface of the water at mean low tide.
There are other rocks or bowlders between the two, or in their neigh-
borhood; but, so far as the United States survey is concerned, none
of them are so shoal as i8 feet, and, moreover, at the time of the
wreck, the tide had not fully ebbed. There was an effort made by
the Triton to prove that the United States charts are not correct, and
that, at certain stages of the tide, there are only about i6j4 feet over
the Ledges. The District Court found, however, that there is so
much water over them that the barge could not hâve impinged on them.
On the whole, the évidence, including the officiai surveys, justifies this
finding, and requires us to agrée with it, and to détermine that the
wreck occurred at the so-called "Fourteen-Foot Spot."
Only one other proposition comes before us. It is claimed that the
barge Fine Forest was in fault in not properly foUowing the course
of the tug. It is with extrême difficulty that a question of this char-
acter can be determined satisfactorily from contradictory proofs, es-
pecially when, as in the case at bar, the courts are not assisted by the
opinions of well-qualified experts in référence thereto. This proposi-
tion, however, is easily disposed of on the well-known rule that in
marine cases the judgment of the responsible parties exercised on the
spot must ordinarily prevail. Capt. Chase of the tug testified as fol-
lows :
700 129 FEDERAL EEPOKTBE.
"Int. Do yon hâve any signais for calling attention of the tow to thelr
not steering properly? Ans. Tes, sir.
"Int. What are they? Ans. Several short qulck whlstles to pay attention.
"Int. ïou say you dld not use those signais, or any signais, at tàat time?
Ans. No, sir.
"Int. Why not? Ans. I supposed that the barge had plenty of room to
come clear.
"Int. Then you considered that where she was was ail rlght, dld you? Ans.
After we got by the point, I supposed she would come by ail rlght. It seems,
though, that she didn't."
Under the circumstances of the weather and the hour of day, there
can be no question that'Capt. Chase was at the time able to see and
comprehend the situation perfectly. The facts stated by him, that he
made no signal to the barge, and that he then supposed she had
plenty of room to go clear, and that she would come by ail right, make
a practical verdict in référence to this proposition of the défense. It
is clear that he, as master of the Triton, did not at that time charge the
barge with not steering properly, and it is too late for the tug's rep-
résentatives to do so now. Therefore, on both propositions, we come
to the same practical conclusion as the District Court.
The decree of the District Court is affirmed, with interest, and the
appellee will recover its costs of appeal.
THE FINE FOREST.
(Circuit Court of Appeals, First Circuit March 29, 1904.)
No. 487,
1. Salvage— Raisins Sunken Vessel— Services Rendebed bt Ownees or
Vessel in Fatjlt.
The raising of a sunken vessel Is not a salvage service for whieh com-
pensation can be collected, where the sole owners of the vessels employed
in the raising were also the sole owners of the one through whose fault
the sinking occurred.
2. Same.
A barge sunk while In tow of a tug was ralsed and brought Into port
by other vessels owned by the owners of the tug. Subsequently the tug
was libeled for the loss, and then flled a pétition for limitation of lia-
bility, which prevailed. Afterward her owners brought suit to recover
for salvage services rendered In raising the barge. The tug was held
solely In fault for the sinking of the barge, and the damages exceeded
her stlpulated value, wlthout taking Into considération the cost of sal-
vage, and a decree was entered for such stlpulated value. Held that,
whatever may hâve been the rights of the owners of the tug with respect
to salvage If they had surrendered her before performing the service,
the proceedlng to avail themselves of the llmlted llability statute, not
having been begun until after the service was rendered, could not affect
the application of the rule that a salvage reward cannot be clalmed by
the owners of the vessel through whose fault the services were ren-
dered necessary.
Appeal from the District Court of the United States for the District
of Rhode Island.
For opinion below, see 119 Fed. 999.
H 1. See Salvage, vol. 43, Cent Dig. § 44.
TllE rX.NK FOUEST. TOI
Eugène P. Carver (Edward E. Blodgett, on the brief), for appellants.
Robert M. Morse and William M. Richardson, for appellee.
Before COLT and PUTNAM, Circuit Judges, and ALDRICH, Dis-
trict Judge.
PUTNAM, Circuit Judge. This appeal relates to a libel for salvage,
following a wreck which occurred under circumstances shovvn in the rec-
ord in The Triton, in which case we passed down an opinion and entered
judgment on February 4, 1904. 129 Fed. 698. The libel in this case was
dismissed by the District Court, and the libelants appealed to us. The
Triton was a steam tug which had the barge Pine Forest in tow. The
record stipulâtes into this case the proofs and proceedings in The
Triton, where we found that the Pine Forest was wrecked, and that the
tug, under her contract of towage, was liable for the damage arising
therefrom. The amount now claimed is for raising the Pine Forest
and bringing her into a port of refuge. It is agreed that we are to ac-
cept $8,750 as a fair value of the services, if they are to be recovered for
in this proceeding. It was stipulated in The Triton that, aside from
the $8,750 now in controversy, the damage to the Pine Forest and
her cargo, for which the Triton was primarily responsible, amounted
to $24,784.91. The items making up this total were stated in détail,
and included, repairs and refurnishings at the port of refuge, damage to
the cargo, loss of freight, demurrage, loss of personal efifects of the
crew of the barge, and small incidental items. Therefore, if the amount
now claimed is included with the stipulated damage to the barge and
cargo, the total would be $33,534.91. It also appears in The Triton
that her owners availed themselves of the provisions for limited liability
contained in section 4283 of the Revised Statutes, and séquence ; and,
for that purpose, the value of their interest in accordance therewith was
stipulated at $20,000. Consequently, damages were awarded at that
amount, interest, and costs.
The barge was raised and brought into port, not by the Triton, but
by the libelants, now the appellants, who were the owners of the Triton,
or the représentatives of those owners, and also the owners, or repré-
sentatives of the owners, of the tugs and barges employed in the salving
enterprise. Indeed, it is agreed that the libelant in The Triton is to
be taken as the claimant in the case now before us, and that the libel-
ants in the case now before us are to be taken as the claimants in the
other suit and owners of the tug. The présent libelants, however, un-
dertake to make a distinction based on a claim that the employment of
the Triton in the towage service for which she was held responsible was
under a charter; but this is dismissed from our considération by the
fact that it appears, on cross-examination of the witness who testified
that she was under charter, that it was not of the hull of the tug, and
that during the towage service she remained under the control of her
owners. It cannot be claimed on the proofs before us that her owners
pro hac vice were other than the registered owners. Thus the légal
identity of the parties in interest in the two litigations is established.
In The Glengaber, L. R. 3 A. & E. 534, 535, decided by Sir Robert
Phillimore in June, 1872, a vessel was brought into a position of
jeopardy by a steam tug, as in the case at bar. Another steam tug, the
702 129 FEDERAL REPORTER.
Warrior, of which only a part of the owners were owners of the tug at
fault, rescued the tow. It was held that the case was one of salvage.
Sir Robert Phillimore concluded as follows:
"I know of no authority for the proposition that a vessel wholly uneon-
nected with the act of misehief is disentitled to salvage rewards, simply be-
cause she belongs to the same owners as the vessel whlch bas done the
misehief."
It will be noticed that this expression ignored the fact, which was
carefully stated in the report of the case, that only some of the owners
of the Warrior were owners of the other tug ; and the décision has been
cited with apparent approval, either without référence to this distinc-
tion, or without following it out, by text-writers usually authoritative.
Kennedy's Law of Civil Salvage, 74, 75; Carver's Carriage by Sea
(3d Ed. 1900) 386, note e. This makes, apparently, a weighty body of
authority, ail resting on the proposition that we are to look at the con-
duct of the salving ship only, and that this identifies with her ail who
are connected with her, whether as officers, seamen, or owners. Never-
theless, this is certainly not now the law in England when the owner-
ship is identical, as in the case at bar.
Authoritative English décisions later than The Glengaber, and also
authoritative English text-writers, hold the rule which defeats salvage
in the case before us. In The Glenfruin, 10 P. D. 103, decided in 1885,
the salving vessel was expressly excluded on the ground of identical
ownership with the vessel in fault; and The Cargo ex Laertes, 12 P.
D. 187, 190, decided in 1887, laid down the same rule in positive
terms. So in Carver's Carriage by Sea (3d Ed.) 386, at the same page
where the note refers to The Glengaber, the learned author, who is ac-
cepted as high authority, adopts the rule of The Glenfruin; and the
work entitled Abbott's Merchants' Shipping and Seamen (l4th Ed.
1901), at page 975, says :
"ïhe owners of a salving ship who are also the owners of the salved ship
may obtaiu salvage rémunération from the owners of the salved cargo, pro-
vided the eircumstances which caused the necesslty for the salvage services
do not amount to a breach of the contract of carriage between the ship's
owners and the owners of the cargo which is on board the salved ship."
This is also accepted as the law in so accurate a work as Williams
& Bruce, Admiralty Practice (3d Ed. 1902) 141. The Glenfruin has
never been questioned in England by any text-writer, or, so far as the
officiai reports disclose, by the Suprême Court of Judicature in any of
its departments, by the Privy Council, or by the House of Lords.
Thèse authorities déclare the right of the crew of the salving ship to
salvage ; but this, of course, avoids the difficulties of the case before us.
To the same effect, The Clarita and The Clara, 23 Wall, i, 19, 23 L.
Ed. 146, referring to eircumstances under which the péril to which a
vessel may be exposed is caused by libelants who claim salvage reward,
says that "to the rule that such libelants are not entitled to recover there
are no exceptions." Therefore, in view of the fact that the parties
are identical, as we hâve explained, the présent libelants are positively
barred by the authorities everywhere, unless relieved by the statutes
of limited liability.
THE PINE FOEEST. 703
As already stated, thé owners of the Triton availed themselves of
those statutes, and damages were assessed against her to the full
amount at which her liability was limited. Therefore her entire value
was exhausted in the proceeding against her. In this connection dates
become important, and they are as foUows : The wreck occurred Jan-
uary i6th; the work of raising the Pine Forest commenced on Jan-
uary i8th, and was completed on February a/th; on March 5th, the
Triton was Hbeled ; and on March loth, the application was made for
a limitation of liability. In the succeeding April the présent libel was
filed. So it appears that ail the services for which compensation is now
claimed were performed prior to the application for limitation of Ua-
bility. Thus the présent condition is a complication of artificial results
arising from a mère incidental order of succession of dates. If the
owners of the Triton had appreciated that she would ultimately be
found at fault by the court, they might hâve surrendered her before
commencing the services for which compensation is now claimed, and
thus, perhaps, they could hâve purged themselves, and entitled them-
selves to a salvage reward. Also, if the services now claimed for had
been rendered by some one else than the owners of the Triton, the bur-
den of them would hâve rested on the claimant of the Pine Forest, with-
out any right of recoupment from the owners of the tug. As it stands,
the owner of the barge is receiving $20,000, in addition to services of
the value of $8,750, a total of $28,750, thus in excess of the amount at
which the Triton was appraised. This is contrary to the underlying
purpose of the statute of limited liability. Nevertheless, by force of
the rules and authorities to which we will refer, this anomalous resuit
cannot be avoided.
It is to be borne in mind that the claim asserted in this libel is for
salvage. But according to the underlying rules of the admiralty law,
and aside from the statutes of limited liability, it is clear that the serv-
ices rendered by the libelants, inasmuch as they were the owners of the
Triton, were not salvage services. The authorities are overwhelming
that under those rules there can be no salvage reward to a vessel or
individual with référence to a condition arising from the fault of that
vessel or individual. This is not merely technical, but it is recognized
everywhere as fundamental.
In stating this proposition, we must regard as inefïectual the sug-
gestions on the one side and the other with référence to the nature of
the alleged stipulations between the owner of the barge and the owners
of the Triton, and of the conférences which occurred between them, as
to the services which were rendered by the présent libelants. Salvage
does not ordinarily arise out of a contract, and the most formai agree-
ments for salvage or rescue services do not bar the admiralty from
reaching the merits, or from applying its fundamental rules when cir-
cumstances justify it. Presumabîy, at the time of thèse conférences,
the libelants had no belief that the Triton was in fault, or that there
was anything in the way of their recovering for the services which the
conversations concerned, and to which the présent litigation relates.
Very likely, also, the owner of the Pine Forest had at that time no
decided understanding otherwise. Nevertheless, as well observed by
the learned judge of the District Court, this suit "must be determined
lOi 129 rBDBBAIi BBFOBTEB.
f rom the proof as to the things which were donc" ; that is, f rom the
event. What we intend by this, a hypothetical illustration from a class
of cases which are common will make clear. Two vessels are in col-
lision; No. I is seriously datnaged and No. 2 only slightly injured,
or not injured at ail. No. i appeals to No. 2 for assistance ; and im-
mediately from the decks of the two vessels, the masters agrée as to
a round sum to be paid for the assistance, if successful. Ail this is
effectuai if it is afterwards determined that No. 2 is not in fault, but
it goes for nothing if it is finally settled that she was the guilty vessel.
Therefore, as we hâve said, the conférences referred to are not of im-
portance on the appeal before us.
We corne to the précise proposition that, at the critical time, the rela-
tions of the Triton and the Pine Forest were such that, under the mari-
time law, no claim could arise on which the libel now before us, which
asks salvage, can be based. The Triton was under a contract of tow-
age. She was not released from that contract by the mère fact that the
barge required assistance which, under ordinary circumstances, would
entitle those rendering it to salvage compensation. The Carbonero,
106 Fed. 329, 333, 45 C. C. A. 314. Also, under ail the authorities and
on principle, a towage contract cannot be converted under the admiralty
law into a salvage service under conditions brought about by the fault
of the tug, as in the case before us. This is declared in nearly ail the
authorities we hâve cited, and emphatically in The Clarita and The
Clara, 23 Wall, i, 18, 19, 23 L,. Ed. 146. A very late reaffirmance of
the rule is found in The Duc D'Aumale (1904) P. 560.
Thèse propositions are not dicta, nor limited to spécial circumstances.
They are the logical results of proportions of maritime law, so plain
that they need not be detailed, and ail the text-writers of authority
agrée to them. We hâve no occasion now to discuss the conditions un-
der which officers and crews can become salvors, because there are hère
no such conditions. The officers and crews of the rescuing tugs and
barges were paid their ordinary wages, included in the $8,750. Thèse
rules of maritime law would so plainly bar the libelants from maintain-
ing a libel for salvage as salvage that we would not hâve deemed it
necessary to elaborate them, or cite authorities in référence thereto,
except that they do not appear to bave received spécial attention in their
particular application to the case at bar. They dispose of this case, be-
cause, as we hâve said, it is strictly a libel for salvage.
Nevertheless, it is interesting and worth our while, in order to avoid
any impression that we are disposing of this appeal on merely technical
grounds, to pursue the relations of the parties to the controversy some-
what further. Section 4283 of the Revised Statutes [U. S. Comp.
St. 1901, p. 2943] provides that the "liability of the owner" "shall in
no case exceed the amount or value of the interest of such vessel and
her freight then pending." If we had only that gênerai déclaration of
the fundamental rule of adjustment, and the case was not merely a libel
for salvage, but one which would enable us to make a complète disposi-
tion of ail counterclaims and ail equities pro and con, we might, per-
haps, in the absence of authorities otherwise, administer the statute
by holding that the owners of the Triton, in rendering services, in rais-
ing the Pine Forest, to the value of $8,750, should be equitably dis-
THE PINE rOEEST. 703
charged from liabîlity to that extent, and that, in determining ail the
sums to be awarded against her and her owners, this $8,750 should
be deducted; so that ultimately the statutory provision that the lia-
bility of owners should in no case exceed the amount or value of their
interest could be literally, and also substantially, complied with. But,
aside from the fact that the form of proceedings now before us could
not, for the reasons we hâve stated, permit so broad an adjustment,
the various statutes of limited liability hâve not been administered prac-
tically in that enlarged manner, and do not contain machinery adjusted
thereto.
As sustaining this proposition, the claimant relies on The Benefactor,
103 U. S. 239, 245, 26 L. Ed. 351, where it is said that, in case of pay-
ment of a demand against a vessel before proceedings for limited lia-
bility are commenced, the court vvill refuse its aid in compelling return
of the money received. This, however, is to be considered in connec-
tion Mrith the later case of The City of Norwich, 118 U. S. 468, 6 Sup.
Ct. II 50, 30 L. Ed. 134. What is to be met in the case at bar is not a
simple proposition like that in The Benefactor, but the possibly logical
resuit of the application of the statutes of limited liability in harmony
with The City of Norwich, at page 493, 118 U. S., 6 Sup. Ct. 11 50, 30
L,. Ed. 134. Speaking of the options given the vessel owner, namely,
one of surrendering the vessel and the other of an appraisal, this opin-
ion says that the measure of liability is the same whichever course is
adopted. It adds that this "enables the owner to lay out money in
recovering and repairing the ship, without increasing the burden to
which he is subjected." This has référence to repairs which might be
made on the ship in fault before proceedings for limited liability are
commenced ; and, on broad principles, the owner of the ofïending ves-
sel ought to be allowed, in the same way, to recover and repair the in-
jured ship without increasing his burden. In other words, in order
that the liability of the owner of an ofïending vessel may not exceed his
interest, the rule has been settled by the Suprême Court that the value
thereof shall be taken as of immediately after the damage was done ;
and the point is to meet the proposition that, to give full efïect to the
logical séquence of that rule, everything else should bave relation to
that point of time. In other words, the proposition to be met is that,
when the application for a limitation of liability had been made by the
owners of the Triton, she and they were purged as of the time immedi-
ately after the Pine Forest was wrecked.
There is another difHculty which meets the claimant in this case.
Under ail circumstances, according to the rules of maritime law, no
one should be discouraged from rendering assistance to a vessel in dis-
tress. Sometimes, as we may well présume to hâve been the fact in the
case at bar, the owners of the offending vessel, by their equipment and
adjacency to the place of wreck, are the most compétent of ail to effect
a prompt rescue; but, on the rule asserted by the claimant, and which,
by the force of authority, we are compelled to accept, such persons,
when situated like the libelants, may well say : "We refuse to expend
our moneys in behalf of your property until we hâve applied for the
benefit of the statutes of limited liability, so as to enable us to recover
what we may disburse." Such a proposition would not be admissible
129 F,— 45
706 129 FEDERAL REPORTER.
where life was involved ; but, when it is a mère question of property,
there is no unreasonableness in the interests of one party being bal-
ancée! against those of another.
Notwithstanding thèse difficulties, we seem, as we hâve said, to be
bound by authority to affirm the décision of the District Court dismiss-
ing the Hbel. Under the English statutes, the point seems to hâve been
directly determined against the owners of the Triton. The Ettrick,
6 P. D. 127, was first decided by Sir Robert Phillimore, and he was af-
firmed on appeal, at page 132, ail in 1881. The case is accepted by so
careful an authority as Mr. Marsden in his Collisions at Sea (4th Ed.)
193, which gives the pith of this décision. That under the English stat-
utes, the liability extends to eight pounds per ton of the oflfending ves-
sel is not essential, as is plain of itself, and as is also emphasized by the
fact of the citation of The Ettrick by the Suprême Court, to which we
will hereafter refer. The substance of this décision is stated by Mars-
den as follows:
"The owner of a ship sunk by collision, who, admittlng that the collision
was caused by the fault of his own ship, obtains judgment for limitation
of his liability, and pays Into court the statutory amount of his liability,
does not thereby escape from the légal conséquences of his wrongful act
in causing the collision, except so far as the act expressly relieves him. The
owner of a ship sunk in the Thames paid into court the statutory amount
of his liability. His ship was raised by the Thames Conservators (who hâve
statutory power to raise wrecks and reimburse themselves for the expense
of raising them by sale of ship and cargo), he undertaklng to pay the cost
of raising. It was held that the shlpowner was bound to hand over cargo
on board to its owner, and that the cargo owner was not able to pay him
anything by way of salvage or gênerai average contribution."
In the case as reported, Jessel, the Master of the Rolls, at page 132,
States the position of the owner of the offending vessel in such a way as
to présent the précise difficulty we hâve suggested. He observes :
"He [that is, the shipowner] says that the payment of the £8 per ton not
only prevents his being answerable in damages for any more, but is équiva-
lent to saylng that he shall be in exactly the same position as if no négli-
gence had been committed."
That is to say, the Master of the Rolls puts the position of the ship-
owner as though he had claimed that a compliance with the statutes of
limited liability purged his vessel and himself as of the time when the
damage was donc. Of course, The Ettrick necessarily overrules this
proposition, and thus meets ail suggestions in the way of the owner of
the Pine Forest. There were other propositions considered in the vari-
ons opinions delivered in the case, but none of them contravene the use
we make of the décision. The Ettrick has never been questioned by
any judicial tribunal in England. It is accepted by Mr. Justice Ken-
nedy in his work on Civil Salvage, to which we bave already referred,
at page 183. It is also accepted by the Suprême Court in The Irrawad-
dy, 171 U. S. 187, 19s, 18 Sup. Ct. 831, 43 L. Ed. 130.
The Irrawaddy supports the conclusion we are compelled to an-
nounce. That case arose under the "Harter Act," so called ; but that,
for ail the purposes to which we apply The Irrawaddy, there is no dis-
tinction between that statute and the statutes on which the Triton relies,
is true, and is emphasized by the fact that the Suprême Court used The
Ettrick as we hâve already said. It is true that the issue in The Irra-
THE PINB FOBESI. 707
waddy was not one of salvage, but of gênerai average, the shipowiier
claiming to share therein, although the sacrifice which underlay it was
made in order to relieve against the fault of his own vessel. General
average and salvage, for ail the purposes we are considering, are to be
spoken of in the same breath ; and, indeed, they run together in a great
many respects. The pith of what applies to this case is stated at pages
193, 194, 171 U. S., and page 833, 18 Sup. Ct, 43 L. Ed. 130, as fol-
lows;
"The act in question [meaning the Harter act] does undoubtedly modify
the public policy as prevlously declared by the courts ; but if Congress had
Inteuded to grant the further privilège now contended for, it would hâve
expressed such an intention in unmlstakable terms. It is one thing to ex-
onerate the shlp and its owner from liabllity for the négligence of those
who manage the vessel ; it is another thing to authorlze the shipowner to
do what he could uot do before, namely, share In the gênerai average occa-
sioned by the mismanagement of the master and crew."
This, in connection with the citation of The Ettrick, is a déclaration
that the rules of interprétation as applied in The Ettrick and The Irra-
waddy run on parallel Unes, and reach in the same way the statutes of
limited liability on which the Triton relies as they do the Harter act.
The resuit is that, on the fundamental principles of the maritime law,
neither the Triton nor her owners can recover for salvage services to
the Pine Forest, and, on the authorities, there is nothing in the statutes
which gives them relief in this respect beyond what otherwise existed.
There is much force in the proposition that the statutes of limited
liability on which the Triton relies effectuate a privilège, so that, if
availed of by a vessel owner, it must be taken with ail the burdens of
the condition as it exists at the time to which the acceptance has been
delayed ; in other words, that, unless the shipowner acts at once and
promptly, he must stand the conséquences thereof. Under some cir-
cumstances it would be impossible to escape this proposition in some
respects. The opinions of the Master of the Rolls and the Lords
Justices in The Ettrick contain several expressions in that direction;
especially the former at the foot of page 132, and Lord Justice Brett
at page 134, where he speaks of "a new séries of events," meaning the
raising of the Ettrick and her cargo, "with which, to my mind, the act
of Parliament," meaning the statute hmiting liability, "has nothing
whatever to do." Nevertheless, in view of the varions considérations
which we hâve stated, it is not safe to apply this proposition too rigidly
or universally. Possibly the circumstances would admit of its applica-
tion hère ; but we deem it safer to dispose of this appeal in view of the
authorities which we hâve cited, and which, taken together, resuit in
the proposition that, whatever may be the theory of the statutes, they
contain no suitable provision or machînery for working out any salvage
compensation for the libelants, now the appellants.
With référence to any services which might be rendered after an
application for limited liability has been made by the owners of an of-
fending vessel, the position would probably be différent; but, as this
case stands, we are led to the conclusion that the libelants can obtain
no relief.
The decree of the District Court is afErmed, and the appellee recovers
its costs of appeal.
708 129 FEDERAL EEPOETEa.
UNITED STATES V. McCABB et aL
(Circuit Court of Appeals, First Circuit May 4, 1904)
No. 503.
1. Fedebal Courts— Officebs—Bailiffs.
Balliffs and criers of the fédéral courts, appointed to attend the same,
as authorized by Rev. St. § 715 [U. S. Comp. St. 1901, p. 579], though
not constitutlonal offieers, are officers of the court.
2. Same— Obiers— Bailiffs—Peb Diem— Adjotjenments.
Where criers and ballififs, appointed under Rev. St. § 715 [U. S. Comp.
St. 1901, p. 579], attend a Circuit Court on days to which the court is ad-
journed by written orders of the judge, they are entitled to receive their
per diem therefor, though the court was not actually opened by a judge,
and they were not speciflcally directed by the court or Judge to attend.
In Error to the Circuit Court of the United States for the District of
Rhode Island.
For opinion below, see 122 Fed. 653.
Charles A. Wilson, U. S. Atty.
Rathbone Gardner, for défendants in error.
Before PUTNAM, Circuit Judge, and ALDRICH and I.OWELL,
District Judges.
PUTNAM, Circuit Judge. In this case the United States brought a
suit on the statutory bond of McCabe as marshal for the District of
Rhode Island. The matters in controversy are per diem payments
made to the crier and the bailiffs of the Circuit Court for that district
in July, August, and September, 1899. They were charged in the
marshal's account, and he paid into the treasury qnly the balance shown
thereby. This suit was instituted accordingly, the United States claim-
ing that the payments were unauthorized. The trial in the Circuit
Court was by the presiding judge, a jury having been waived under the
statute, and the judgment was for the défendants. Thereupon the
United States took out this writ of error. The learned judge of the
Circuit Court gave a full opinion on the merits, with which we agrée ;
but thèse controversies hâve been so protracted, and taken so many
phases, that we feel disposed to supplément what he said.
The statutes bearing upon this question are as follows: Section
583 of the Revised Statutes [U. S. Comp. St. 1901, p. 478] reads:
"If the judge of any District Court is unable to attend at the commence-
ment of any regular, adjourned, or spécial term, the court may be adjourned
by the marshal, by virtue of a written order directed to hlm by the judge, to
the next regular term, or to any earlier day, as the order may direct."
Section 672 of the Revised Statutes [U. S. Comp. St. 1901, p. 546]
reads :
"If neither of the judges of a Circuit Court be présent to open and adjourn
any regular, or adjourned, or spécial session, either of them may, by a writ-
ten order directed alternatively to the marshal, and. In hls absence, to the
clerk, adjourn the court from time to time, as the case may require, to any
time before the next regular term."
701)
Criers and bailiffs are appointée under the following section of
the Revised Statutes :
"Sec. T15 LU. S. Comp. St. 1901, p. 5T9]. The Circuit and District Courts
may appoint criers for their courts, to be allowed the sum of two dollars per
day ; and the marshals may appoint such a number of persons, not exceed-
Ing flve, as the judges of thelr respective courts may détermine, to attend
upon the grand and other juries, and for other necessary purposes, who shall
be allowed for their services the sum of two dollars per day, to be paid by
and ineluded in the accounts of the marshal, out of any money of the United
States in his hands. Such compensation shall be paid only for actual at-
tendance, and, when both courts are in session at the same time, only for
attendance on one court"
The act approved on March 3, 1899, c. 424, 30 Stat. 1 1 16, contains the
following provision:
"For pay of bailifCs and criers, not exceeding three bailiffs and one crier
in each court, except in the Southern District of New ïork: provided, that
ail persons employed under section seven hundred and fifteen of the Revised
Statutes shall be deemed to be in actual attendance when they attend upon
the order of the courts : and provided f urther, that no such person shall be
employed during vacation."
Similar provisions had been enacted in several previous years.
The varions days for which the payments in dispute were made weie
days to which the Circuit Court had been specifically adjoumed by writ-
ten orders. No business was transacted on any of them, except ad-
journments in accordance with f urther written orders.
Under section 715 of the Revised Statutes [U. S. Comp. St. 1901,
P- 579]) criers are appointed by the court, and therefore may well be
regarded as constitutional officers. Const. art. 2, § 2, cl. 2. Section
715 gives the other persons appointed under it no désignation, but they
are described by several statutes as bailiffs, thus securing to them a
certain officiai standing. Criers are not customarily sworn, and bailiffs,
not being constitutional officers, are neither customarily nor necessarily
sworn. The appointments of the latter are usually made by oral désig-
nations by the marshal, without any formai order by either judge or
court. They are for no spécifie periods, and the appointées are re-
movable at will in the 'most informai manner. Nevertheless, by long-
continued usage, supplemented by their récognition in the statutes as
bailiffs, they must be regarded as having a connection with the courts,
continuons until dissolved by some act of either the judge or marshal.
It follows that, while bailiffs are not constitutional officers, they are
"officers of the court," by common understanding, and within the mean-
ing of that expression as used in United States v. Pitman, 147 U. S.
669, 671, 13 Sup. Ct. 425, 37 L. Ed. 324.
United States v. Pitman related to the per diem compensation of the
clerk for his attendance at both the Circuit Court and the District
Court for the District of Rhode Island. It was decided in 1893, and
at that time the essential statutory provisions involved were practically
the same as in the case now before us. The précise point technically
determined was that the clerk was entitled to his per diem for attend-
ance, regardless of any question whether a judge was présent or busi-
ness transacted. No distinction was made between the two courts.
United States v. Nix, 189 U. S. 199, 23 Sup. Ct. 495, 47 L. Ed. 775,
710 129 FEDERAL KEPOKTBR.
related to the attendance of a marshal at courts in the territory of
Oklahoma. At page 203, 189 U. S., page 497, 23 Sup. Ct, 47 L. Ed.
775, United States v. Pitman was cited as a pertinent décision; and
it was added that, when a court is opened by order of the judge, it is
the duty of the marshal to attend, and that there is no reason wliy he
should not receive his per diem. In both cases the per diems claimed
were allowed. United States v. Pitman, 147 U. S. at pages 671 and
672, 13 Sup. Ct. 426, 2)7 L. Ed. 324, observes that attendance when court
is opened under sections 583 and 672 of the Revised Statutes [U. S.
Comp. St. 1901, pp. 478, 546], which is by written order of the judge,
"is put by Congress upon the same footing as if the judge were actually
présent, and business were actually transacted." This seems to be suf-
ficient of itself ; but connection with what was said at pages 670 and
671, 147 U. S., page 426, 13 Sup. Ct., 37 L. Ed. 324, makes it positively
clear that the court recognized no distinction between adjournments
under sections 583 and 672, such as we hâve hère at bar, and the or-
dinary adjournments from day to day. In United States v. Aldrich,
58 Fed. 688, 7 C. C. A. 431, decided by this court on September 29,
1893, United States v. Pitman was applied ; but the case is not of im-
portance hère, except that it shows that favorable presumptions should
be made in behalf of its officers when the record states that a court was
actually opened under color of some of the statutes cited, and that they
were in attendance.
As we understand, the only proposition now made by the United
States is that under the act of March 3, 1899, neither the crier nor the
bailiffs can receive a per diem unless the court is actually opened by a
judge on the day to which an adjournment is made by a written order,
except so far as they are specially directed or otherwise designated
by the court or judge to attend. The Auditor suspended the account
in issue as follows:
"Suspended for the reason that the orders of the courts do not show or
require that the bailiffs should be in attendance on the above dates."
The décision of the Comptroller of March 18, 1899 (5 Comp. Dec.
583, 586), relied on by the United States, has ^ very uncertain sound.
He thinks that statutes like that of March 3, 1899, do not refer to an
order of adjournment made according to sections 583 and 672 of the
Revised Statutes [U. S. Comp. St. 1901, pp. 478, 546], but only to
an absence of the judge while the session is suspended awaiting the ac-
tion of the jury, or for any reason not necessitating a formai adjourn-
ment to a given day. He adds :
"It means, as I understand It, an order of Instruction personal to the ball-
iff or crier, relating to services to be rendered durlng the absence of the
judge, and not to an order of adjournment which has been preannounced or
predetermined."
This is such a strained and Imaginative construction, and so incon-
sistent with the simple phraseology of the statute in question, that, if
the United States rested there, we would not need to give the case fur-
ther considération. In justice to the Comptroller, it should be said
that seemingly his opinion, at page 587, finally left the matter on the
invalidity of nunc pro tune orders. Moreover, by an opinion of April
UNITED STATES T. M'OABH. 711
5, 1902 (8 Comp. Dec. 699), the same Comptroller apparently reversed
his adverse expressions of March 18, 1899, so that we do not perceive
any existing effective ruling of the department justifying this défense.
In order, however, that we may give every possible considération to the
propositions of the United States, we return to the ruHng of the
Auditor, and to a substantial répétition thereof at bar to the follow-
ing effect: The United States contend that "persons" whom, as they
say, "the marshal is permitted only upon occasion to appoint," may or
may not be necessary to aid him in the discharge of his duties in court.
They add that "it is impossible to escape the conclusion that such per-
sons may be altogether unnecessary to the discharge of the m.arshal's
duties, and it would seem to follow that they ought not to be fastened
permanently upon the government by the marshal, or by construction,
unless their services are necessary ; and this necessity ought to be spe-
cially found by the court in a definite way."
We may at this point note the peculiar form of the expression in
the act of March 3, 1899, "order of the courts." No suggestion has
been made, either at bar or by the executive officers, that this is to be
literally and technically construed. Everywhere it has been treated as
covering not only orders of the courts in session, but orders of absent
judges. Congress at times interchanges the words "court" and
"judge." This was strikingly illustrated in one of the statutes relat-
ing to the removal of Chinese, under considération by the Circuit Court
of Appeals in the Ninth Circuit in United States v. Gee Lee, 50 Fed.
271, 273, I C. C. A. 516, where the statutory word "judge" was con-
strued to mean the court. On account of the context, we took a dif-
férent view in Choy Loy v. United States, 112 Fed. 354, 50 C. C. A.
279, but the uniform practice of the Suprême Court with référence to
the statute sustains the Circuit Court of Appeals for the Ninth Circuit
We may assume that in this extract from the act of March 3, 1899,
the word "courts" was intended to cover not only courts in session,
but absent judges. With this explanation, the plain and natural
reading of the act of March 3, 1899, brings this case within the rule of
United States v. Pitman and United States v. Nix ; and there is noth-
ing unreasonable in such a reading, nor anything in any of the statutes,
or in any judicial décision or any settled practice, which contravenes it.
Before proceeding further, we must notice an opinion of the Attor-
ney General rendered to the Comptroller of the Treasury under date of
April II, 1903, appended to the brief of the United States, and relied
on as supporting their présent position. Aside from the fact that the
Attorney General is a high ofïicer, we regard his opinions, when ren-
dered to other high officers of the United States for their advice in mat-
ters not technically controversial, as quasi judicial and entitled to much
respect, but this opinion is not in point. The Attorney General was
asked to distinguish the case then before him from United States v.
Finnell, 185 U. S. 236, 22 Sup. Ct. 633, 46 L. Ed. 890, where the ques-
tion was entirely différent from that at bar. So far as we understand
it, the opinion has no pertinency, because what it had under considéra-
tion was not formai orders adjourning the court, but merely directions
to the clerk to make certain entries on his journal or dockets, which
might well hâve been made at chambers. The clerk, however, on his
712 120 FEDEKAL HEPOEÏEK.
own motion, assumed to open the court and enter adjournments. How-
ever this may be, this case is too clear to justify us in resting on any-
thing which has been decided adversely by the Department of Justice
or the Comptroller.
The resuit of the construction now put by the United States on
the act of March 3, 1899, is such as to make it read that the persons
described in it shall not be deemed to be in actual attendance unless after
an order of the court specifically requiring them to be présent, and
that they shall not otherwise be entitled to compensation. Thus, while
its plain reading is affirmative and remédiai, the United States make
it négative and restrictive, and this constrained interprétation seems to
lie at the foundation of their case. Yet United States v. Pitman, 147
U. S., at page 671, 13 Sup. Ct. 425, 37 L,. Ed. 324, contains thèse ex-
pressions :
"It is clearly the duty of the oflBcers of the court to be présent at the ad-
journed day, and to obey the written order of the judge with respect to any
further adjournment, and there Is no reason why they should not receive
their per diems therefor as If the judge were actually présent."
"We think the court should be deemed actually In session, within the
meaning of the law, not only when the .1udge is présent in person, but when,
in obédience to the order of the judge directing Its adjournment to a certain
day, the offleers are présent upon that day, and the journal is opened by the
clerk, and the court Is adjourned to another day by further direction of the
judge."
The opinion then cites the act of March 3, 1887, c. 362, 24 Stat. 509,
541 [U. S. Comp. St. 1901, p. 640], which impliedly approved payments
of per diem to clerks and marshals except for days when the court was
opened by the judge, or business actually transacted, or they attended
under the sections of the Revised Statutes which we hâve quoted.
The court treated it, not as new législation, but simply as giving efïect
to the existing law. This is enforced by turning to the same case
as reported in Pitman v. United States (D. C.) 45 Fed. 159, where it ap-
pears that the per diems in dispute extended from October, 1854, to
December, 1888 ; and yet the Suprême Court disposed of the marshal's
entire account in issue regardless of the date of the approval of the act.
Notwithstanding thèse decided expressions of the Suprême Court,
it is apparent from the opinion of the Comptroller of April 19, 1897 (3
Comp. Dec. 522), that the department had refused to follow them, pre-
sumably on the ground that the issue directly involved in United States
V. Pitman was only the per diem of the clerk. Thereupon Congress,
by the act of March 2, 1895, c. 189, 28 Stat. 958 [U. S. Comp. St.
1901, p. 580], enacted what was, as we hâve said, afterwards re-enacted,
and is now found in the citation made by us from the act of 1899. As
we hâve shown, the United States, in order to sustain their présent posi-
tion, are compelled to construe this statute as though it read nega-
tively instead of affirmatively, while, on the other hand, it is much
more reasonable to hold that Congress intended by it to affirm the broad
expressions in United States v. Pitman, and make it clear that they
applied to criers and bailiffs.
This history of this législation makes it apparent that the statute of
1895, as re-enacted in 1899, was such as we hâve characterized it.
Nevertheless the highest authorities on the construction of statutes in-
tJNITED STATES V. m'cABE. 713
sist that a very useful guide is to ascertaîn the mischief which it may be
reasonably supposée the législature intended to remedy. The United
States criticise the références bv the Circuit Court to the congressional
debates in regard to the act of' 1895, but the criticisms cannot be sus-
tained. It is true that there are some expressions of the Suprême Court
which, literally read, would not permit a resort to congressional debates
for the purpose of ascertaining the construction of the statutes to which
the debates relate, but there are other expressions from a différent
standpoint. The courts are entitled, not only for the purpose of ascer-
taining what mischief the législature intended to remedy, but also for
ail other purposes which assist in the construction of statutes, to read
history, and this is sometimes read better in the législative debates than
anywhere else. Such debates may also be referred to for the purpose
of seeking out some fact or suggestion which may give a due to what
is obscure. In the présent case, not only the leamed judge of the Cir-
cuit Court, but also the Comptroller, in 3 Comp. Dec. 522-524, already
referred to, justly cited the debates in Congress for the purpose of show-
ing the fact, which they do show, that the mischief which the act of
1895, and subséquent like enactments, sought to remedy, was the re-
fusai of the departments to apply broadly the expressions of the Su-
prême Court in United States v. Pitman. With the aid of thèse de-
bates, as well as independently of them, the act of March 3, 1899, must
be accepted as remédiai.
But we can go deeper. We hâve shown that, although the persons
referred to by section 715 of the Revised Statutes [U. S. Comp. St.
1901, p. 579], are not there designated by any officiai title^ yet they are
recognized by the statutes as bailiffs, and that, although appointed by
mère word of mouth, and removable the same way, they, in practice,
hold a continuons tenure. They are "officers of the court," within that
expression in United States v. Pitman, and therefore, without being
sought out individually, they must attend on the day to which it is ad-
fourned, according to the citations from that case. When the court
is in continuous session and adjourning from day to day, no spécial or-
der expressly requiring the bailififs to be présent is ever made, formally
or verbally, but their attendance on such adjournments is always re-
lied on. As we hâve shown, no distinction between such adjournments
and adjournments to spécifie days by written orders of an absent judge
can be made. It is therefore difficult to understand the origin of the
suggestion that bailiffs, in order to receive their per diem, should be
specially designated to attend the courts. Nothing of this kind has
been known in common practice, either in the fédéral courts or the state
courts, with référence to any of thèse officers, with the exception of
occasional orders which hâve been entered of late so as to free the
courts and their officers from temporary embarrassment arising out of
the rulings of the Comptroller to which this opinion refers. Congress
knows that, even when courts are opened in the morning with the
promise of an idie day, emergencies at times compel the unexpected
exercise of ail their powers, and demand prompt assistance from every
officer over whom they bave control. Therefore, as is the gênerai prac-
tice, they may well keep equipped, ready on the instant for any such
contingency. Consequently an order of adjournment to a spécifie day
714 129 FEDERAL EEPOETEB.
in any judicîal tribunal, national or local, is an order that ail its ma-
chinery shall be in readiness for prompt and efficient action. United
States V. Pitman and United States v. Nix were decided on this theory ;
and no statute directing or providing for the attendance of either
marshal or clerk was relied on, or even cited, except the act of 1887,
which, as we hâve shown, was regarded as only declaratory. In
neither case, with référence to allowing the clerk or the marshal his
per diem, did the Suprême Court rest on any statutory direction to
either to be in attendance, or on any spécifie order in référence thereto.
Not a word in either opinion can be found supporting any suggestion
to the contrary. The expression in United States v. Pitman, that "it
is clearly the duty of the officers of the court to be présent at the ad-
journed day," and the like expression in United Staes v. Nix, 189 U.
S., at page 203, 23 Sup. Ct. 497, 47 h. Ed. 775, that, "where the court
is opened for business by an order of the judge, it is the duty of the
marshal to attend," had référence only to the common practice which
we hâve explained.
Every adjournment to a spécifie date, whether made in open couri
or by written order, involves possibility or probability or expectancv
that a judge will be présent on the day to which the court is adjourned ;
and in each case expectancy may be resolved into probability or possi-
bility, or be wholly defeated, and possibility or probability niay be re-
solved into expectancy or accomplishment. Under neither condition
is a judge, on coming into court, to send out to the neighboring streets
or shops for marshal, clerk, crier, or bailififs, before proceeding to busi-
ness, if he be so fortunate as to hâve any one to send. The courts of
some States, held at the shire towns of numerous counties, sat formerly
only at certain times named by statute, and for brief periods. From
time immémorial the business, relating mostly to common-law suits.
had been satisfactorily disposée! of in this way, although in late years,
with the increase on the chancery side, statutory provisions and the
rules of the courts hâve directed that they shall be considered open at
ail times for the purposes of litigation in equity. With the fédéral
courts the emergencies are so numerous and so varions that it bas been
found impracticable, with justice either to the United States or indi-
vidual suitors, thus to dispose of judicial business at the stated terms,
to be held open only for short periods and then finally adjourned. Con-
sequently some of the fédéral courts are held open quite continuously,
and ordinarily no term is finally adjourned until immediately before
the opening of the next statutory term. To meet public emergen-
cies in the districts where the business is most voluminous, the courts
are adjourned from day to day, and are always open. In the districts
where the volume of business is smaller, adjournments from day to day
are not required, but the peculiar emergencies which expérience bas
developed demand fréquent open sessions. The practice in this respect
is fully explained by the opinion in United States v. Pitman, 147 U. S.,
at pages 670, 671, 13 Sup. Ct. 425, 37 L. Ed. 324, and this aided the
conclusion there reached. The law requires that the statutes on this
topic be construed in the light of the presumption that Congress knew
the usages of the fédéral courts, and legislated in harmony therewith.
In United States v. Pitman, 147 U. S., at page 670, 13 Sup. Ct. 425,
THE DATJNTLESS. 715
37 L,. Ed. 324, the coui-t disposes of ail the suggestion^ urge3 on us by
the United States, based upon the assumption that, unless ttie strict rule
of the department is applied, the courts and the marshal might fasten
on the United States a body of needless officiais and a mass of need-
less expenses. To that Une of reasoning we need no answer except
this citation.
We wish it understood that we are dealing only vvith the précise case
before us. By long and well-known usages, in which there has been
acquiescence by ail concerned, many matters of accounting affecting the
courts hâve been practically settled with référence to conditions as to
which the statutes are doubtful, or as to which they make no provision.
We are not investigating any such usages, or attempting to unsettle
them. Our décision is limited to the proposition succinctly put by the
Auditor as we hâve quoted him, and restated by the United States at
bar, to the eflfect that the only reason given for disallowing the pay-
ments under considération is that the orders directing the adjournments
did not specifically require the crier and bailifïs to be in attendance on
the days in issue.
To sum up: On the natural and not unreasonable reading of the
statutes, so much discussed in this opinion and by the departments,
especially that of 1895, and its annual re-enactment to and including
March 3, 1899, they contempla te the payments now in dispute. By
accepted and necessary usage, the officers of the court, including the
crier and bailifïs, attend, without spécial désignation, on any day to
which it is specifically adjoumed, whether it be by an oral order in open
court, or by a written order of an absent judge. Every order of ad-
journment to a spécifie day implies an order to the olficers of the court
to then attend. The underlying rule is as shown in the extracts which
we hâve made from United States v. Pitman and United States v. Nix ;
and the payments in issue in this case should hâve been allowed by the
department, alike under and independently of the act of March 3, 1899,
and nothing in it, or in any other statute, or in any settled usage acqui-
esced in in the manner we hâve described, restricts or removes the
obligation to make them.
The judgment of the Circuit Court is affirmed, and neither party will
recover costs of appeal.
THE DAUNTLES3.
tTNION TRANSP. CO. v. KENT,
(Circuit Court of Appeals, Ninth Circuit February 1, 1904.)
Nos. 952, 953.
1, MAErrrwE Liens— Wrongfdi Death— Statutoet Action fob Damages.
Code Clv. Proc. Cal. § 377, gives a right of action for wrongful death
"against the person causing the death," Section 813 provides that "ail
steamers, vessels and boats are liable • • * (5) for Injuries committed
by them to persons or property." Held, that such statutes do not give a
IF 1. Maritime liens for torts, see note to The Anaces, 34 G. C. A. 565,
See Admlralty, vol. 1, Cent. Dlg. S 285.
716 129 FEDERAL RBPOBTEB,
lien on a vessel for the damages recoverable under section 377 for a death
resulting from collision, and that a suit In rem cannot be maintained In
a court of admlralty to recover such damages.
2, Evidence — Wkight — Right to Disbkliïvi! Witness although Uncontea-
PICTED.
In a suit to recover for the death of a person on a launch whlch was
sunk In collision wlth a steamer, where the only persons on the launch
were drowned, the court Is net bound to accept as true the testimony of
the pilot of the steamer that the launch suddenly changed Its course and
ran directly into the steamer, although uncontradicted, the inhérent im-
probability of such action being such as to warrant the court in disbe-
îieving the testimony.
8. Collision— Steamers Meeting in Nakkow Ohannel— Violation or Rules.
A steamer held in fault for a collision in a river with two launches made
fast together, in which the launches were sunk, and those on board
drowned, on the ground that she did not hâve a proper lookout, and for
violation of article 25 of the Inland navigation rules (Act June 7, 1897,
c. 4, 30 Stat 101 [U. S. Comp. St. 1901, p. 2883]), which required her to
keep on the other side of the channel.
Appeals from the District Court of the United States for the North-
ern District of California.
For opinion below, see I2i Fed. 420.
Nathan H. Frank and Campbell, Metson & Campbell, for appellants.
M. B. Woodworth and F. R. Wall, for appellees.
Before GILBERT and ROSS, Circuit Judges, and HAWLEY, Dis-
trict Judge.
HAWLEY, District Judge. Separate appeals were taken in thèse
cases. They were consoIidated for trial, and hâve been argued together
in this court. The testimony was ail taken before a commissioner.
No. 952 is an action in rem brought by the administrator of John T.
Doane, deceased, against the steamer Dauntless for damages occa-
sioned by the death of John T. Doane. No. 953 is an action in per-
sonam brought by the administrator of David J. Kent, deceased,
against the Union Transportation Company for damages occasioned
by the death of David J. Kent, Both causes arise out of the same state
of facts. Appellee in each case recovered the same amount of dam-
ages, to vvit, $1,200.
There are only 177 assignments of error in each case. Why counsel
should hâve taken pains to make so many assignments is unexplained.
The truth is that there were but three points discussed by counsel, and
we shall confine ourselves to thèse points.
I. There is one point raised which relates exclusively to case No.
952, viz., it is claimed that this case is an action in rem, and that no
lien is given under the laws of the state of California, enforceable in
an action for damages by death.
This court, in The Willamette, 70 Fed. 874, 878, 18 C. C. A. 366,
31 L. R. A. 715, and in Laidlaw v. Oregon Ry. & Nav. Co., 81 Fed.
876, 879, 26 C. C. A. 665, in construing the statute of Oregon which
reads as follows : "Every boat or vessel used in navigating the waters
of this state * * * ghall be Hable and subject to a lien * * *
for ail * * * damages or injuries done to persons or property
by such boat or vessel" (lïiH's Ann. Code, § 3690) — held that an action
THE DAUNTLES8. 717
of this character in rem could be sustained. The question involved in
this case is whether or not such actions can be maintained under the
statutes of California. It is claimed that the question has been de-
cided in favor of appellants' contention by the Suprême Court of Cali-
fornia (Mimro V. Dredging Co., 84 Cal. 515, 524, 24 Pac. 303, 18 Am.
St. Rep. 248; Morgan v. Southern Pacific Co., 95 Cal. 510, 519, 30
Pac. 603, 17 L. R. A. 71, 29 Am. St. Rep. 143), and by the Suprême
Court of the United States (The Albert Dumois, 177 U. S. 340, 257,
20 Sup. Ct. 595, 44 L. Ed. 751), and by the Circuit Court of Appeals,
Seventh Circuit (The Onoko, 107 Fed. 984, 986, 47 C. C. A. m).
Thèse suggestions require an investigation upon new lines. In the
construction of state statutes, it is our duty to follow the décisions of
the Suprême Court of a state. If no construction has been given to
the statute by that tribunal, but has been given by the Suprême Court
of the United States, we would be controlled by such décision. The
décisions in other circuits are not binding upon this court, but are
deserving of respect, and entitled to crédit and considération for the
strength of the reasons therein given.
The statute of California (section 377, Code Civ. Proc.) provides,
"When the death of a person is caused by the wrongful act or neglect
of another, his heirs or personal représentatives may maintain an ac-
tion for damages against the person causing the death." Section 813,
Code Civ. Proc, provides, "Ail steamers, vessels, and boats are liable
* * * (5) for injuries committed by them to persons or property."
The California cases above cited did not discuss the questions hère
presented. Ail that was there said having any bearing upon the stat-
ute vvas "that the action given by the statute is a new action, and not
the transfer to the représentative of the right of action which the de-
ceased person w^ould hâve had if he had survived the injury."
In The Albert Dumois Case, the court said :
"Assuming for the présent tbat the question of lien Is material, we are next
to inquire whether such lien is given by the local law of Louisiana. We are
cited in tliis connection to two articles of the Civil Code, the flrst of which
(article 2315), as amended in 1884, déclares that 'every act whatever, of man.
that causes ' damage to another, obliges him by whose fault it happened to
repair it ; the right of this action shall survive, in case of death, in favor of
the miner children or widow of the deceased, or either of them, and In de-
fault of thèse, in favor of the surviving father and mother, or either of them,
for the space of one year from the death. The survivors above mentioned
may also recover the damages sustained by them by the death of the parent,
or cbJld, or husband, or wife, as the case may be.' It was held by us in The
Corsair. 145 U. S. 335 [12 Sup. Ct 949, 36 L. Ed. 727], a case arising out of
a collision which also took place on the lower Mississippi, that this local law
did not glve a lien or privilège upon the vessel, and that nothing more was
contemplated by it than an ordinary action aecording to the course of the
law as administered in Louisiana. Our attention is also called by the owners
of the Dumois to subdivision 12 of article 3237 of the Civil Code, which reads
as follows : 'Where any loss or damage has been caused to the person or
property of any individual by any carelessness, neglect or want of skill in the
direction or management of any steamboat, barge, flatboat, water craft, or
raft, the party injured shall hâve a privilège to rank after the privilèges
above specified.' No reliance was placed upon this article in the case of The
Corsair, probably because it was thought to refer only to losses or damages
to persons stlll living, and that an action would lie in favor of the party in-
jured. Certainly, If this article had been supposed to give a remedy for
damages occasioned by death, to the représentatives of the deceased person,
718 129 FEDERAL EEPOETEH.
it would never hâve escaped the attention of the astute eounsel who par-
tlcipated in that case. The question whether 'damage done by any slilp,"
jurisdiction over which was glven to the High Court of Admiralty in England,
included actions brought by the personal représentatives of seamen or pas-
sengers killed in a collision, bas been the subject of many and conflicting ju-
diclal opinions in the English courts, a summary of whlch may be found In
The Corsair, 145 U. S. 345 [12 Sup. Ct. 949, 36 L. Ed. 727], and was flnally
settled against the jurisdiction by the House of Lords in the case of The
Franconia, 10 App. Cases, 59. ♦ • * The object of article 3237 was not to
extend the cases in which damages might be recovered to such as resulted in
death, but merely to provide that, in cases of damages to person or property,
where such damage was occasioned by négligence in the management of any
water craft, the party Injured should hâve a privilège or lien upon such craft
We deem It entirely clear that the article was not intended to apply to cases
brought by the représentatives of a deceased person for damages resulting in
death."
In The Onoko the court said :
"Undoubtedly, In this eountry, since the décision In The Corsair, the gênerai
trend of opinion in the lower courts bas been to the efCect that the water-
eraft laws of the various States give a lien upon the vessel for Injuries occa-
sioning death. * * * in ail thèse cases, with the exception of The Glen-
dale, the act supposed to grant the lien Is an Independent act, and in no way
connected with the act giving the action for the death. In The Glendale the
provision granting the lien is part of the very act giving the rlght of action."
In referring to The Albert Dumois Case, the court states the fact
upon which the case was decided, and gives the views of the court
upon the question hère under discussion. It was there, as hère, urged
that the déclaration of the opinion upon the subject of the lien is
dictum, because it was adjudged that, under the limited liability act,
damages by reason of death were recoverable, although no lien upon
the vessel was allowed, and the court said :
"We do not think this contention should prevall. The question was, as we
read the opinion, whether a moiety of those damages should be chargea upon
the amount awarded to the owner of the Argo, upon the ground that the in
terveners had liens upon the Argo, and that, having sucb liens, the court was
justifled in deducting from the amount awarded to the owner of the Argo
a moiety of the damages awarded to the Interveners. We may not consider
this déclaration of the Suprême Court as merely dictum, but, If the matter
were doubtful, we should not feel at liberty to disregard this carefully con-
sldered deliverance of the Suprême Court upon the subject."
The court then discussed the Lord Campbell act, and the statutes of
the différent states with référence thereto, and said :
"It is also to be said that the water-craft law contemplâtes a lien for direct
Injuries done by the inanimate thing negllgently navigated, and would not
seem to comprehend such Injury as Is contemplated by the act granting a
right of action for a death. The injury for whlch a lien Is given Is a direct
injury by the negligently navigated craft to person or property. By reason
of the faulty navigation and conséquent collision, no injury was done to the
person of the libelant, or to the persons of those he represents. Nor was In-
jury done to his or their property. The,y had no property right in the person
of the deceased. The right of action arose only upon and because of liis
death. The recovery is allowed as compensation for the supposed support
and éducation whlch they would hâve received had he survived. This right
of action, arising only upon death, cannot, within the meaning of the water-
craft law, be property which could be Injured by an Inanimate thing negli-
gently navigated. In vIew of the ruling of the Suprême Court, we are not
permitted to follow the décisions upon this question by the Circuit Courts of
Appeals rendered before the décision in The Albert Dumois, and are con-
THE DAUNTLES8. 719
strained to hold that no lien upon the vessel is created by the acts consldered
for the cause declared in the libel."
We are of opinion that no substantial différence can be drawn be-
tween the statutes of the différent states upon which The Albert
Dumois and The Onoko were based, and the statutes under considéra-
tion. If any distinction exists, it must be conceded that the language
of section 813 of the Code of Civil Procédure of California is stronger
in favor of appellants' contention than the others; and, in the light
of thèse opinions, and in view of the language used in the California
statute, we feel compelled to hold that in the Doane Case this court
has no jurisdiction. That case (No. 952) is reversed, and cause re-
manded, with instructions to dismiss the action.
The other case (No. 953) must be considered upon its merits.
The Union Transportation Company was the owner of the steamer
Dauntless. Doane was on a launch also named "Dauntless," and was
towing another launch called "Viola," and Kent was on this launch.
The launches were lashed together side by side. Both Doane and
Kent lost their lives, and but one other man was on the launches, and
he, too, was drowned. The collision between the steamer and the
launches which resulted in their death occurred about 11:10 o'clock
p. m., September 14, 1900, on the Mokelumne river, about a mile and
a half above Central Landing, on Bouldin Island. The steamer about
10 150 p. m. left Valentine's Landing, which is about seven miles above
Central Landing. The night was clear and calm, with a Hght wind
blowing. The steamer was traveling at a speed of from 8 to 12 miles
an hour, and drew about 6J^ feet of water. The river was about 800
feet wide. The testimony shows that, between 3 and 5 minutes be-
fore the collision, lights were fîrst seen from the hurricane deck of
the steamer Dauntless. At that time the launches were between one-
half and three-quarters of a mile from the steamer, off her starboard
bow. The courses of the steamer and the launches made an angle
with each other of from 15 to 20 degrees. At the time the light or
lights were first seen from the steamer, her pilot, McNeil, thought one
of them was "a pale green light." The steamer did not alter her course
or speed, or give any signal with her whistle, until within at least 300
feet of the launches. The pilot of the steamer then saw that there were
two launches under way, and that a collision was imminent or inévitable.
He then gave two whistles, and put his helm to starboard, but the
steamer and the launches came together while the steamer was swinging
to port; the steamer striking the launch Dauntless on that launch's
port side, damaging that side, the only place where any damage was re-
ceived. The launches went to the bottom at one. The point of con-
tact on the steamer was somewhere between her bow and 25 or 30 feet
forward of the gangway of the steamer's starboard side.
Patterson testified that he was bow watchman of the Dauntless, and
"was supposed to be on the bow to look out"; that on the night of
the collision he was performing other duties ; that when the collision
took place he "was about fàfty feet from the bow," alongside of the
boilers on the starboard side; that when he got out on the bow of
the steamer he saw a green light on the launches, about 100 yards
ahead, and the collision occurred in about i^ minutes; that as he
720 120 FEDEKAL REPOETEE.
went out on the bow of the steamer he heard one bell first, "to stop,"
followed by two bells, "to back full speed."
Pellett, who was at the outside of the pilot house, testified that he
first saw a light about three-quarters of a mile ahead ; that he asked
the pilot what it was, and "he said he thought it might be a schooner
anchored out there," and he thought this was about five minutes be-
fore the collision. "Q. About how long was it after you heard this
signal of one bell to the engine room before the collision? A. It was
so quick that I could not tell how quick it was. * * * I got kind
of excited when I seen them coming and see that it could not be
avoided, and I could not exactly tell what time."
Rideout testified that there was about i8 feet of water where the
launches were sunk, and that about two weeks after the collision the
launches were found "between 150 and 200 feet from the left-hand
bank of the river, going down."
The court below, in reviewing the testimony, said :
"My coEClusion from the évidence is that the steamer Dauntless was In
fault in two particulars : First, she dld not hâve a lookout stationed at her
bow immediately preceding the collision ; second, the steamer, in starboarding
her helm, and attemptlng to pass the launches near the left-hand bank of the
river, vlolated article 25 of the act of June 7, 1897, c. 4" (30 Stat 101 [U. S.
Oomp. St. 1901, p. 2883]).
And in referring to the testimony as to the cause of the collision,
said:
"The évidence is not very satisfactory as to the précise manner in which
the collision occurred, but I am unable to aceept the statement of the pilot
of the steamer that the launches came 'straight up in the middle of the river,
almost, and, when it got just abreast of the steamer, whipped right around
and headed straight for the Dauntless.' Although this is not contradicted by
any witness, It appears to me to be so unreasonable that the court would not
be warranted In flnding that such was the fact."
Thèse findings are assailed, and constitute the pivotai points made
by appellant, whose contention is that the launches were wholly at
fault, that the launches ran into the steamer, and that the steamer did
not run into the launches.
If the testimony of McNeil must be taken as true, because uncontra-
dicted, then appellant's contention is made out, but it seems so unrea-
sonable that a man in the small launch would be guilty of such con-
duct, almost certain to produce instant death to him. It is not im-
possible that he might hâve donc so, but it is highly improbable. It
certainly does not seem natural. Self-preservation is said to be the
first law of nature. The lips of Doane and Kent were sealed by death,
and the court is thereby deprived of their version of the facts. We
hâve the right, therefore, to look to the common expérience of man-
kind in order to détermine whether the statement of McNeil is rea-
sonable or not.
In Thomas v. Railroad Co. (C. C.) 8 Fed. 729, 731, where plaintifï's
intestate had been killed in a railroad accident, and the court had in-
structed the jury that the deceased was bound to that measure of care
and prudence which would hâve been exercised by an intelligent and
careful man under the same circumstances, Judge Wallace, in denying
a motion for a new trial, said :
THE DAUNTLESS. 721
"NotwithstandJng the testlmony of tho defendant's wltnesses, the jury were
at liberty to draw the inference that, owing to the obstructions, the deceased
did not see the approaching train, and that, owing to the noise of the factory,
he did not hear it. The absence of any fault upon the part of the deceased
may be inferred from the cireumstances, In connection with the ordinary
habits, conduct, and motives of men. The natural instinct of self-preserva-
tion in the case of a sober and prudent man stands in the place of positive
évidence."
See, also, Allen v. Willard, 57 Pa. 374, 379 ; Railroad Co. v. Rowan,
66 Pa. 393, 399 ; Johnson v. Railroad Ce, 20 N. Y. 65, 69, 70, 75 Am.
Dec. 375.
This court is not bound to accept the statement of any witness
simply because his testimony is uncontradicted, nor even when cor-
roborated by other witnesses, if the story they ail tell bears the ear-
marks of inhérent improbability and is unreasonable.
The ruie in relation to this subject is well expressed by Mr. Justice
Field in delivering the opinion of the court in Quock Ting v. United
States, 140 U. S. 417, 420, 11 Sup. Ct. 733, 734, 35 L. Ed. 501, as fol-
lows:
"Undoubtedly, as a gênerai rule, positive testimony as to a particular fact,
uncontradicted by any one, should control the décision of the court, but thaï
rule admits of many exceptions. There may be such an Inhérent improbability
in the statement of a witness as to induce the court or jury to disregard hia
évidence, even in the absence of any direct conflicting testimony. He may be
contradicted by the facts he States as completely as by direct adverse testi-
mony."
This court has announced the same rule. Lee Sing Far v. United
States, 94 Fed. 834, 838, 35 C. C. A. 327, and authorities there cited.
See, also, Chandler v. Town of Attica (C. C.) 22 Fed. 625, 627, and
authorities there cited ; Tracey v. Town of Phelps (C. C.) 22 Fed. 634 ;
McLean v. Clark (C. C.) 31 F'ed. 501, 504; People v. Milner, 122 Cal.
171, 179, 54 Pac. 833; Anderson v. lyiljengren, 50 Minn. 3, 52 N.
W. 219.
In Blankman v. Vallejo, 15 Cal. 638, 645, the court said:
"We do not understand that the credulity of a court must necessarlly cor-
respond with the vigor and positiveness with which a witness swears. A
court may reject the most positive testimony, though the witness be not dis-
credited by direct testimony Impeaching him or contradicting his statements.
The inhérent improbability of a statement may deny to It ail claims to belief."
In Haney v. Baltimore Steam Racket Co., 23 How. 287, 291, 16 L.
Ed. 562, which was a case in adniiralty, where the question raised was
very similar to the case in hand, the answer admitted the collision, and
the resuit of it, and it also admitted that the schooner was seen at a
distance of 2 or 3 miles ; that the steamer was proceeding at a rate of
14 miles an hour, heading due north, and the schooner holding her
course nearly due south; but it alleged as an excuse that, while the
steamboat and schooner were meeting on parallel lines, the schooner
suddenly changed her course and ran under the bows of the steamer.
The court said: "This is the stereotyped excuse usually resorted to
for the purpose of justifying a careless collision. It is always im-
probable and generally false."
In examining the testimony of McNeil, we find that he was manag-
ing the steamer Dauntless, and responsible for her proper steering.
129 F.-^6
722 129 FEDERAL REPORTER.
He was interested in establishing the fact that it was the launches, and
not the steamer, that were at fault in causing the collision. He ad-
mits that he was mistaken as to the light he saw on the launches. He
made no inquiry of others on the steamer, but proceeded downstream
on the wrong- assumption that the launches were "a schooner at anch-
or." It is fair to présume that if the lookout had been at his post of
duty, on the lower deck, in the forward part of the steamer, he would
not hâve been misled as to the color of the light on the launches ; and,
if a constant lookout had been maintained, he would undoubtedly hâve
discovered that it was a white light, and that the launches were mov-
ing, instead of being anchored, as the pilot supposed, in time to hâve
given the facts to the pilot so as to hâve avoided the collision.
In The Pilot Boy, 115 Fed. 873, 875, 53 C. C. A. 329, 331, the court
said :
"It is the duty of every steamer navlgatlng the thoroughfares of commerce
to hâve a trustworthy lookout, besides the helmsman, and in case of collision
the absence of such lookout is prima facie évidence that the collision was
caused by the fault of the steamer. The Genesee Chief, 12 How. 443 [13 L.
Ed. 1058]. When acting as the ofBcer of the deck, and having charge of the
navigation, the master of a steamer is not a proper lookout. The Ottawa, 3
Wall. 269 [18 L. Ed. 165]. Proper lookouts are persons other than ofl3cers of
the deck or the helmsman, and they should be stationed on the forward part
of the vessel. Elevated positions on a steamer, such as the hurricane deck, are
not as favorable situations for the lookout as those on the forward deck near
the stem."
See, also, Chamberlain v. Ward, 21 How. 548, 570, 16 L. Ed. 211 ;
The Parkersburgh, 5 Blatchf. 247, Fed. Cas. No. 10,753 '> Heney v.
Baltimore Steam Packet Co., supra; Wilder's S. S. Co. v. Low, 112
Fed. 161, 172, 50 C. C. A. 473 ; Occidental & O. S. S. Co. v, Smith,
74 Fed. 261, 268, 20 C. C. A. 419.
We are of opinion that the steamer Dauntless was at fault in not
obeying article 25 of the rules of navigation when she first saw the
light of the launches. This rule reads as follows :
"Art. 25. In narrovv channels every steam-vessel shall, when it is safe and
practicable, keep to that side of the fair-way or mid-channel which lies on the
starboard slde of such vessel."
It is true that this rule must be taken in connection with the others,
when applicable. It is not an absolute rule. The circumstances and
situation may change it.
Article 22 is relied upon by appellant. This rule is to the effect
that "every vessel which is directed by thèse rules to keep out of the
way of another vessel, shall, if the circumstances of the case admit,
avoid Crossing ahead of the other." But this rule does not benefit
appellant. The steamer had no right to wait until it got so near the
launches that it was impracticable to cross ahead of the launches. The
launches were on the right side of the middle of the river, going up;
and the steamer ought to hâve been on the right side of the middle
of the river, coming down. The launches were where they had the
right to be.
Upon the whole case, our opinion is that the steamer's fault was
the cause of the collision. If proper care had been taken on board
the steamer Dauntless after the launches' light was first seen, it would
PHEMX IXS. CO. V. KERR. 723
seem almost impossible that a collision could hâve happened, with the
launches moving at a rate of two miles an hour through the water,
even if it should be conceded that the launches were in some respects
at fault as to their lights, or were carelessly or injudiciously managed.
There was no necessity for the steamer passing so near to the launches
as to create the hazard. The Genesee Chief, 12 How. 443, 461-463,
13 L. Ed. 1058.
The decree of the district court in favor of appellee Kent, in No.
953, is affirmed, with costs.
PHENIX INS. CO. OF BROOKLYN, N. T., V. KBRB,
(Circuit Court o£ Appeals, Elghth Circuit March 28, 1904.)
No. 1,966.
1. Pbactice— Pekemptort Instructions — Waiver of Jtjet.
Where at the close of a trial to a jury each party requests a peremptory
Instruction in his favor, and the court grants one of the requests, tha
ruling constitutes a gênerai flnding for the successful party by the court,
and the only questions it présents in an appellate court are, was the
iinding without substantial évidence to support it? and, was there error
in the court's déclaration or application of the law?
2. Insurance — Unconditional Ownership — Pubchasee undeb Conteaci
Has.
The interest of a purchaser of property, which he has unqualifledly
agreed to buy and which the former owner has absolutely contracted to
sell to him upon deflnlte terms, is the sole and unconditional ownership
within the true meaning of the ordinary clause upon that subject in In-
surance policies, because the vendor may compel the vendee to pay for the
property and to suffer any loss that occurs.
3. Same— Option to Purchase— Unconditional Ownership.
The interest of an owner of property which another holds nnder his
option to purchase, which is irrévocable by the owner, but which the
holder of the option has not bound himself to accept, and which he is f ree
to abandon, is the sole and unconditional ownership of the property
within the proper Interprétation of the clause upon that subject in In-
surance policies, because the owner cannot compel the holder of the option
to také the property or sufCer the loss.
4. Same— Proofs or Loss— Dbnial of Contkact— Waiver of Pboofs.
A distinct déniai by an Insurance company of llability under a pollcy
ifter the loss, and within the time prescribed for the proofs, upon the
ground that there was no contract of Insurance, is a waiver of proofs of
loss, because in such a case the proofs do not tend to induce the company
to pay the loss, and they are futile.
(Syllabus by the Court)
In Error to the Circuit Court of the United States for the District of
Nebraska.
H. C. Brome (A. H. Burnett, on the brief), for plaintiff in error.
C. C. Wright (John M. Ragan and John F. Stout, on the brief), for
défendant in error.
Before SANBORN, THAYER, and HOOK, Circuit Judges.
H 2. See Insurance, vol. 28, Cent. Dig. §§ 347, 618.
724 120 FEDERAL REPORTER.
SANBORN, Circuit Judge. This is an action on a policy of insur-
ance against fire for damages caused by the burning of an elevator. The
complaint was in the usual form. The answer was that the policy had
been canceled before the fire, that the insured was not the sole and un-
conditional owner of the property, and that no proofs of loss had been
made. The plaintiff replied that the company had denied its liability on
the ground that there was no contract of insurance, and had thereby
waived the proofs of loss. The case was tried to a jury. At the close of
the trial the plaintiff requested the court to give an instruction to the ef-
fect that the jury should return a verdict in his favor, the défendant ask-
cd the court to charge the jury to find a verdict for the insurance com-
pany, and the court told the jury to return a verdict for the plaintiff'.
This instruction is the alleged error in this case.
Where each of the parties to a trial by jury requests the court to
charge them to return a verdict in his favor, he waives his right to any
finding or trial of the issues by the jury, and consents that the court shall
find the facts and déclare the law. An acceptance of thèse waivers and
a peremptory instruction by the court in favor of either party constitutes
a gênerai finding by the court of every material issue of fact and of law
in favor of the successful party. The case is then in the same situation
in which it would hâve been if both parties had filed a written waiver
of a jury and it had been tried by the court. Each party is estopped by
his request from reviewing every issue of fact upon which there is any
substantial conflict in the évidence, and the only questions which the
instruction présents to an appellate court are, was the court's finding
of facts without substantial évidence to sustain it? and was there error
in its déclaration or application of the law ? U. S. v. Bishop (C. C. A.)
125 Fed. 181, 183; Bowen v. Chase, 98 U. S. 254, 264, 25 L. Ed. 47;
Beuttell V. Magone, 157 U. S. 154, 157, 15 Sup. Ct. 566, 39 L. Ed. 654;
The City of New York, 147 U. S. 72, TJ, 13 Sup. Ct. 211, 37 L. Ed. 84;
Laing V. Rigney, 160 U. S. 531, 16 Sup. Ct. 366, 40 L. Ed. 525 ; King v.
Smith, 1 10 Fed. 95, 97, 49 C. C. A. 46, 48, 54 E. R. A. 708 ; The Francis
Wright, 105 U. S. 381, 26 L. Ed. iioo; Merwin v. Magone, 70 Fed.
776, 777, 17 C. C. A. 361, 363; Chrystie v. Foster, 61 Fed. 551, 9 C.
C. A. 606; Stanford v. McGill (N. D.) 72 N. W. 938, 952; Mayer v.
Dean, 115 N. Y. 556, 22 N. E. 261, 5 L. R. A. 540; Provost v. McEn-
croe, 102 N. Y. 650, 5 N. E. 795.
The first question for considération, therefore, is, was there any sub-
stantial évidence in support of the finding of the court below that the
policy in suit was not canceled or surrendered? There was évidence
that the plaintiff was the owner and that Rundberg & McCann were the
lessees of, and the holders of an option to purchase, the elevator, which
was the subject of this litigation, under a contract to keep it insured for
the benefit of the plaintiff. McCann had paid the premium — $80 — upon
the policy in suit, and had caused Rohrer, the recording agent of the
défendant, to issue and deliver it to the plaintiff in November, 1900.
The policy, by its terms, promised indemnity against loss by the burning
of the elevator for the term of one year. On December 5, 1900, Rohrer
received an order from Chicago to cancel the policy. On December
12, 1900, after some conversation with McCann and with Coryell, the
State agent of the défendant for the state of Nebraska, he wrote, coun-
PHENIX INS. CO. V. KEKK. <^-J
tersigned, and placed in his safe a policy of the Milwaukee Mechanics'
Insurance Company, which by its terms insured Kerr against loss by
fire on this elevator. He debited the Milwaukee Company and credited
the Phénix Company with the $80 premium upon his account books,
and wrote the word "Canceled" across his register of the Phénix policy.
Pie wrote the Milwaukee policy and took the action which has been de-
scribed for the purpose of substituting that policy for the policy of the
défendant upon which this action is founded. While matters were in
this situation, and on December 16, 1900, the elevator burned. On the
next day Rohrer went to the plaintiff, Kerr, who still held the Phénix
policy, told him what he had donc, and that, in view of the entries upon
his books, he rather thought that the Milwaukee Company was liable
for the loss. Thereupon Kerr delivered the Phénix policy to Rohrer,
and took from him the Milwaukee policy. Rohrer testified that Mr.
Ragan, the attorney of the plaintiff, subsequently told him that he might
deliver the Phénix policy to the state agent, Coryell, and they would
make no claim under it. But Mr. Ragan denied that he ever made any
such statements. Kerr brought an action for his loss against the Mil-
waukee Mechanics' Company upon the policy which he had taken in
exchange for the Phénix policy after the fire, and failed to recover. The
judgment in that case was brought to this court, and was affirmed.
Kerr v. Milwaukee Mechanics' Ins. Co., 117 Fed. 442, 54 C. C. A. 616.
The évidence which conditions the question whether or not the Phénix
policy was canceled before the loss in this case does not difïer materially
from that which was produced and is set forth more at length in the
case against the Milwaukee Company. In that case we held that Rohrer
had no authority from Kerr to consent to the cancellation of the Phénix
policy, and that, as that policy provided that it could be canceled by the
Company only by a return of the unearned premium after a notice of five
days, and no notice had been given to Kerr, who held the policy, and no
premium had been returned before the fire, the policy of the Phénix
Company was valid and that of the Milwaukee Company was void
when the loss occurred. Nothing has been presented in this case to lead
us to reverse or modify that conclusion, and we adhère to it. When,
therefore, Rohrer went to Kerr with the Milwaukee policy the morn-
ing after the fire, that policy was useless and valueless and Kerr had a
valid claim against the Phénix Company for about $3,500 on account
of the loss of his elevator. The surrender by Kerr of the Phénix policy
and his acceptance of the Milwaukee policy in lieu of it neither released,
avoided, nor afifected this claim, because the exchange was not made
or intended for that purpose and there was no considération for it. The
finding of the court below, therefore, that the Phénix policy was not
canceled before the loss, and that the plaintifï's claim under it was not
avoided or released thereafter, was not without substantial and suffi-
cient évidence to sustain it, and it is affirmed.
Was the interest of the plaintiff, Kerr, in the elevator other than the
unconditional and sole ownership ? The évidence was that Kerr bought,
paid $6,000 for and took the title to the elevator. Thereupon he made
a written agreement with Rundberg & McCann tô the eflfect that they
should hâve the possession and use of the property for a monthly rental
of $100 and for the payment of the premium on the Insurance ; that they
726 129 FEDEEAL RBPOETBB.
should be at liberty to pay more than $ioo per month if they saw fit ;
that, if they failed to pay as much as that amount for two successive
months, the contract should cease, and Kerr should retain the moneys
he had received, but that, if they should continue to make the paymenls
until they should aggregate $6,000 and interest at 10 per cent, per
annum, Kerr would convey the elevator to them. VVhen the loss oc-
curred, Rundberg & McCann were not in default. They had paid
about $1,200 under this contract, and they, were in the possession of
the property. It is contended that this transaction constituted a loaii
of $6,000 by Kerr to Rundberg & McCann, and that the conveyance
by the original vendor to Kerr was in fact a mortgage to secure the pay-
ment of this loan. But while there is testimony to the effect that Kerr
bought the elevator for Rundberg & McCann with the undoubted ex-
pectation that they would use it, and with the hope that they would pur-
chase it, the entire évidence taken together, and especially the written
agreements between the various parties, which niust, in the end, con-
trol, do not sustain the position that this was a loan. Rundberg & Mc-
Cann never agreed to repay the $6,000 to Kerr, nor did they ever èon-
tract to buy and pay for the property. It is improbable that Kerr loaned
$6,000 to them without taking any promise or obligation for the repay-
ment of this amount of money. The written agreement between them
négatives this idea. It is not an agreement of purchase and sale. It
is an option contract — an agreement to give Rundberg & McCann the
option to purchase the elevator as long as they failed to make default
for two successive months in the payment of the monthly rentals. It
is a unilatéral contract, because Rundberg & McCann did not bind
themselves to purchase the property, or to pay the rentals for any speci-
fied time. When they made their first payment under the agreement,
the option undoubtedly became irrévocable by Kerr, because he had
accepted a considération for it, and it continued in that condition until
the fire because Rundberg & McCann continued to make the specified
payments. But Rundberg & McMCann made no irrévocable contract.
They never agreed to accept the option or to purchase the property,
and they were at liberty to renounce the one and to abandon the other
at any time. Was Kerr the sole and unconditional owner of the elevator
in this State of the case? The object of the provision in policies of in-
surance that they shall be void if the interest of the assured in the prop-
erty is not the sole and unconditional ownership of it is to prevent gam-
bling contracts, and to protect the companies against the claims of those
who bave no insurable interest in the property injured or destroyed.
The purchaser of the property, who is in the possession of it under a
contract whereby the former owner agrées to sell and the buyer abso-
lutely binds himself to purchase and to pay an agreed price for the
property, is almost universally held to be the unconditional owner of
it under the clause under considération, because the loss from any in-
jury or destruction of the property falls upon him. If the owner has
agreed to sell and the vendee has agreed to buy on definite terms, the
purchaser is the sole and unconditional owner of the property within
the true meaning of the clause upon this subject in Insurance policies,
because the vendor can compel the purchaser to pay for the property
notwithstanding its injury or destruction, and hence to suffer the loss
PHENIX INS. CO. V. EERB. 727
occasîoned thereby. Milwaukee Mechanics' Ins. Co. v. Rhea & Son (C.
C. A.) 123 Fed. 9, II, 13 Am. & Eng. Ency. of Law (2d Ed.) 178, 179,
and cases cited; Hough v. City Ins. Co., 29 Conn. 10, 76 Am. Dec.
581 ; Rumsey v. Phœnix Ins. Co. (C. C.) I Fed. 396; Amsinck v. Ameri-
can Ins. Co., 129 Mass. 185 ; Wainer v. Milford Fire Ins. Co., 153
Mass. 335, 26 N. E. 877, II L. R. A. 598; Redfield v. The Holland Ins.
Co., 56 N. Y. 354, 15 Am. Rep. 424; Pelton v. Westchester Ins. Co., JJ
N. Y. 605 ; Dupuy v. Delaware Ins. Co. (C. C.) 63 Fed. 680. But if the
owner gives to another the option to purchase a pièce of property, and
the latter does not irrevocably accept the offer and definitely agrée to
make the purchase, the loss of its injury or destruction falls upon the
owner of the property, and not upon the owner of the option, because
the latter is not bound to take or pay for the property, and he cannot be
compelled to do so. And while the owner of the option may accept it,
and compel the owner of the property to comply with its terms, until
the owner of the option does so he has no interest in the property. He
has nothing but a mère right to acquire an interest, and this is neither the
ownership nor any interest in the property which impinges upon its un-
conditional ownership by him who gave the option. Richardson v.
Hardwick, 106 U. S. 252, 254, i Sup. Ct. 213, 27 L. Ed. 145 ; Gustin
V. Union School District (Mich.) 54 N. W. 156, 34 Am. St. Rep. 361.
The resuit is that the owner of property who has given an irrévocable
option to purchase it to one who has not agreed to accept the option or
to buy or to pay for the property still has the unconditional ownership
of it within the proper interprétation of the clause upon that subject in
policies of insurance, and he may maintain an action upon a policy for
injury to it by fire. The plaintiff was in that situation. He was the
owner of the elevator. Ile had given an option to purchase it to Rund-
berg & McCann. They had paid $1,200 for that option, and in partial
acceptance of it, so that it had become irrévocable. But they had not
agreed to complète their acceptance, or to buy the property, and they
were not bound to take or to pay for it. They had no interest in it,
but a mère right to acquire an interest which they were at liberty to
enforce or to abandon. The interest of the plaintiff was the sole and
unconditional ownership, and his action upon the policy was well
brought.
The policy required the insured to furnish proofs of loss within 60
days after the fire. A distinct déniai by an insurance company of lia-
bility under a policy after the loss, and within the time prescribed by the
proofs, upon the ground that there was no contract of insurance, is a
waiver of proofs of loss, because in such a case the proofs do not tend
to induce the company to pay the loss, and they are useless. Tayloe v.
Ins. Co., 9 How. 390, 403, 13 L. Ed. 187; Knickerbocker Life Ins.
Co. V. Pendleton, 112 U. S. 696, S Sup. Ct. 314, 28 L. Ed. 866. Was
there any substantial évidence in this case of a déniai of the validity of
the policy within 60 days after the loss ? Rohrer, the recording agent
of the défendant, testified that he issued the policy; that he received
an order from Chicago to cancel it on December 5, 1900; that the fire
occurred on December 16, 1900 ; and that on the next day he told the
plaintiff what entries he had made on his books ; told him that he rather
thought that the Milwaukee Company was the one liable, and obtained
728 129 FEDERAL KEPOETER.
from him the Plienix policy in place of the Milwankee policy which he
delivered to him. Mr. Ragan, the attorney for Kerr, testified that Mr.
Coryell, the state agent for the Phénix Company, told him that the
Milwaukee people were liable, and that his company was not liable, be-
cause there had been a substitution of policies. The testimony of Ra-
gan is contradicted by the testimony of Coryell, but the statement of
Rohrer is undisputed. It is contended that neither Rohrer nor Coryell
had any authority to waive proofs of loss without a written indorsement
of the waiver upon the policy under the usual clause therein which re-
quires a waiver to be evidenced in that way. But Rohrer received the
order from Chicago on December 5, 1900, to cancel the policy. That
order must now be deemed the order of the company itself because the
company has ratified the order and founded one of its défenses to the
policy upon it. It necessarily follows that Rohrer's acts and sayings
while he was engaged in attempting to exécute the order were the acts
and sayings of the company, and that his déclaration to Kerr that the
Milwaukee Company was liable was, in efïect, a déniai of the liability
of the défendant, and furnished évidence to sustain the finding of the
court below to that effect, aâywell as its conclusion of law that this dé-
niai of liability was a waiver of the proofs of loss.
Our conclusion is that there was no error in the finding or in the con-
clusions of the trial court, and that the judgment below must be af-
firmed. It is se ordered.
WESTERN TIE & TIMBBR CO. v. BROWN.
(Circuit Court of Appeals, Eightli Circuit. Mareli 28, 1904.)
No. 1,953
1. Banketjptcy— Transpee to Preferred Ckeditob— Préférence.
Under section 60a of tlie baukrupt law of July 1, 1898, c. 541, 30 Stat.
562 [U. S. Comp. St. 1901, p. 3445], as amended (Act Feb. 5, 1903, c. 487,
§ 13, 32 Stat 799 [U. S. Comp. St. Supp. 1903, p. 416]), a transfer of the
debtor's property may constitute a préférence, although the property is
not conveyed to the preferred créditer, if the efCeet of the transfer is to
enable the creditor to receive eut of the debtor's estate a larger percentage
of his claim than others of the same elass obtain.
2. Same— VoiDABLE Préférence— Intention to Give— Neoessitt.
An intention on the part of the Insolvent to glve a préférence by means
of a transfer he makes is not indispensable to the existence of a voldable
préférence, under section 60 of the bankrupt law of July 1, 1898, c. 541,
30 Stat. 562 [U. S. Comp. St 1901, p. 3445], as amended (Act Feb. 5, 1903,
c. 487, i 13, 32 Stat. 799 [U. S. Comp. St. Supp. 1903, p. 416]). It is suffl-
cient that a transfer of the insolvent's property is made, which has the
effect to glve a préférence, and that the party who receives it has reason-
able cause to believe that it is Intended by the party who procures the
transfer, or who gives to the transfer the efCect of a préférence, that it
should hâve that effect, although the Insolvent is innocent of that inten-
tion.
3. Same— VoiDABLE Préférences not Allowable as Set-Offs.
Préférences voldable under sections 60a and 60b of the bankrupt law
of July 1, 1898, c. 541, 30 Stat. 56É [U. S. Comp. St. 1901, p. 3445], as
amended (Act Feb. 5, 1903, c. 487, I 13, 32 Stat. 799 [U. S. Comp. St.
H 2. See Bankruptcy, vol. 6, Cent. Dig. §§ 252, 256.
WESTEKN TIE A TIMBER CO. T. BKOWN, 729
Supp. 1903, p. 416]), are not allowable as set-offs agalnst claimg of th?
. preferred credltors under section 68 (30 Stat. 565 [U. S. Comp. St. 1901.
p. 3450]), on the ground that the préférences and the claims constitute mU'
tuai debts and crédits.
4, SaME— VOIDABLE PEErEEENCE— FACTS,
A Company was hiring laborers to gather tles. The Insolvent was oper-
ating stores and supplying the men. For many months an inspecter had
sent a pay roll once in about two weeks to the Company, upon which the
name of each laborer, his earnings, and the amount furnlshed him by the
Insolvent, appeared. The company had unlformly deducted the price ol
the supplies from the earnings of each man, had sent hlm a check for the
balance, and had sent the Insolvent a check for the supplies furnlshed.
The Insolvent owed the company more than $20,000, when, within four
months of the flling of the pétition in bankruptcy, It retained the amount
owing the Insolvent for the supplies furnlshed for three months and
credited him with this amount, $2,210.73, on its claim agalnst him.
Held, this was a voidable préférence, and the claim of the company
agalnst the estate of the bankrupt should be expunged unless it pays to
the trustée the amount It thus withheld.
(Syllabus by the Court.)
Appeal from the District Court of the United States for the Eastern
District of Arlcansas.
F. H. Sullivan, for appellant.
S. M. Stuckey (M. S. Stuckey and H. L. Fonder, on the brief), for
appellee.
Before SANBORN, THAYER, and HOOK, Circuit Judges.
SANBORN, Circuit Judge. This is an appeal from an order of the
District Court that the daim of the Western Tie & Timber Company
against the estate of S. F. Harrison, a bankrupt, be expunged unless
the company pays to the trustée the sum of $2,210.73 which the court
below found had been transferred to the company by the bankrupt in
such a way that the transaction constituted a préférence.
A motion has been made to dismiss the appeal, under rule 1 1 of this
court (90 Fed. cxlvi, 31 C. C. A. cxlvi), because the assignment of errors
was not filed at the time of , or before, the allowance of the appeal. The
record, however, does not establish the fact upon which this motion is
founded. The order allowing the appeal, the citation, the admission of
service of the citation, and the bond, are dated June 12, 1903. The
approval of the bond and the assignment of errors are not dated. Ail
thèse papers were filed June 16, 1903. As the assignment of errors was
filed at the same time as the other appeal papers, the presumption is
that it was presented to the court with them when the appeal was al-
lowed, and the motion to dismiss is denied.
Harrison was adjudged a bankrupt on February 24, 1903. Prior to
that time he owned some merchandise in two stores, and he was engaged
in forwarding the work of gathering ties from the lands of the tie
company, and in selling supplies to the laborers engaged in this work.
Once in two or three weeks an inspecter sent to the company a pay
roll upon which the name of each workman, the amount owing to him
for his services, and the price of the supplies which Harrison had fur-
nished him, appeared. The comoany uniformly deducted from the
wages due each workman the price of the supplies Harrison had deliv-
730 129 FE3DERAL REPORTEE.
ered to him, sent the workman its check for the balance, and sent
Harrison the price of ail the supplies he had f urnished to the laborers.
This co^trse of dealing had been followed for many months on Octobèr
24, 1902, four months before the filing of the pétition in bankruptcy.
On that day Harrison owed to the company more than $20,000. He
owed other creditors many thousand dollars. The tie company held
a mortgage on his property to secure the payment of $15,000 to it, and
he was insolvent. During the month of December he applied to the tie
company tp advance him more money, and it refused his request.
Thereafter, when the pay rolls for December, 1902, and January and
February, 1903, came in, the company paid the laborers as usual, but,
instead of sending to Harrison, as it had become accustomed to do, the
price of the supplies which he had delivered to the men, it credited him
with this amount, which aggregated $2,210.73, ^nd in this way secured
a payment of this amount upon its claim against him. The référée and
the District Court held that this transaction gave to the tie company a
voidable préférence, and required it to pay to the trustée $2,210.73, as
a condition of the allowance of its claim against the estate of the bank-
rupt.
This ruling is challenged by counsel for the appellant on three
grounds : Because no transfer of anything by Harrison to the appel-
lant was shown ; because there was no proof that Harrison was in-
solvent, or that the tie company had any notice of his insolvency, when
it withheld the price of the supplies; and because there was no évi-
dence that Harrison intended to prefer the tie company when he deliv-
ered the supplies to the men, or that the company had any notice of
any such intention.
But the test of a preferential transfer under the bankrupt act of 1898
is not whether or not the debtor has conveyed anything to the créditer,
or whether or not the créditer has réceived anything from the debtor.
It is whether or not the debtor has made a transfer of any of his prop-
erty to any one in any way whereby the enforcement of the transfer
will enable one of his creditors to obtain a greater percentage of his
debt than any other créditer of his class can secure. So the question
in this case is not whether or not Harrison transferred any of his prop-
erty directiy to the tie company, but whether or not any transfer of his
property was made in the time and manner denounced by the bankrupt
law, so that the tie company was enabled to secure a larger percentage
of its claim against him than other creditors of its class can obtain.
One of the main purposes of the bankrupt law is to distribute the
unexempt property which the bankrupt has four months before the
filing of the pétition in bankruptcy, share and share alike, among his
creditors. In order to attain this object, the law provides that if a
person, being insolvent, has, within four months before the filing of the
pétition, made a transfer of any of his property, the effect of the enforce-
ment of which will be to enable any one of his creditors to obtain a
greater percentage of his debt than any other of his creditors of the
same class, he shall be deemed to hâve given a préférence, and that if he
has given a préférence, and the person receiving it or to be benefited
thereby, or his agent acting therein, shall hâve had reasonable cause to
believe that it was intended thereby to give a préférence, the claim of
WESTERN TIE <fc TIMBEB CO. V. BKOWN. 731
the créditer who has received such a préférence shall not be allowed,
unless he surrenders it. Bankr. Law 1898, c. 541, §§ 60a, 60b, 57g, 30
Stat. 562, 560 [U. S. Comp. St. 1901, pp. 3445, 3443], as amended in
Act Feb. 5, 1903, c. 487, §§ 13, 12; 32 Stat. 799 [U. S. Comp. St.
Supp. 1903, pp. 416, 415] ; Swarts v. Fourth Nat. Bank, 117 Fed. i,
3, 4, 54 C. C. A. 387, 389, 390. The uniform practice of the tie Com-
pany for many months before October, 1902, to pay to Harrison once
or twice in 30 days the price of ail the supplies which he furnished to
the workmen who prepared and hauled the ties for it, warranted a find-
ing and conclusion that, while Harrison delivered the goods to the work-
men, he sold them to the tie company, and that company became legally
and morally bound to pay him their value. When, therefore, the com-
pany refused to pay him, and credited him on account of thèse goods
with $2,210.73 upon its claim of $20,000 against him, the effect of the
transaction was to pay $2,210.73 o^ Harrison's indebtedness to the tie
company with thèse supplies, which were a part of his estate. More-
over, whether the workmen or the tie company were the légal debtors
of Harrison for thèse supplies, the actual resuit of the transaction was
the same. Within the four months before the filing of the pétition the
supplies were a part of the estate of the insolvent, Harrison. At the end
of the four months they had been converted into ties, which were a
part of the property of the company. The latter had received in the
ties the value of $2,210.73, which had been transferred to it from the
estate of Harrison, and for which it had paid nothing to the workmen
or to Harrison, except by means of the crédit it had given to Harrison
upon its claim against him. But every transfer of his property by an
insolvent, within four months of the filing of the pétition in bank-
ruptcy, which has the effect to "enable any one of his creditors to obtain
a greater percentage of his debt" out of the property of the insolvent
"than any other of such creditors of the same class," is a préférence.
Swarts V. Fourth Nat. Bank, 117 Fed. 4, 54 C. C. A. 390. The trans-
fer of the supplies which were a part of the property of Harrison enabled
the tie company to obtain about 10 per cent, more of its debt out of his
estate than other creditors of its class can secure, and the contention that
this transaction did not constitute a préférence under the law cannot
be maintained.
Was Harrison insolvent when the company secured this préférence,
and did the latter bave notice of this fact? The answer must be in
the affirmative. He owed the tie company more than $20,000. It held a
mortgage on his property, which had been made in January, 1902, to
secure the payment of $15,000. He had frequently made statements
of his assets and liabilities to the company which showed the former to
be "a little bit more" than the latter. In December he applied for the
advance of more money, and the company refused his request because it
had received information that his indebtedness was greater than he had
represented it to be. Thereupon, on December 28, 1902, the company
first applied an installment of its indebtedness to Harrison for the sup-
plies furnished to its workmen to the payment of a part of the bank-
rupt's indebtedness to it. Thèse facts convince that Harrison was in-
solvent, and that the tie company knew it before it applied its indebt-
edness to him in payment of its claim against him.
732 129 FEDERAL REPORTER.
There îs no évidence in the record before us tliat Harrison ever in-
tended by the sale of the supplies to prefer the tie company to his other
creditors. Prier to December, 1902, the company had invariably sent
him its checks for the supplies which he delivered, and he probably ex-
pected that it would, and intended that it should continue to do so.
If it had done so, no prekrtTiCe would bave been created. It failed to
continue its practice, and, by withholding payment for the supplies from
Harrison and crediting him with their price, it secured a payment of
$2,210.73 upon its claim against him. Counsel for the company per-
suasively argue that this transaction did not constitute a voidable préf-
érence, because Harrison did not intend to give any préférence bv
means of it. But an intention on the part of the insolvent to give a préf-
érence by means of a transfer which he makes is not always indispensa-
ble to its existence. It is sufficient if he bas given the préférence, and
the party receiving it bas reasonable cause to believe "that it was in-
tended thereby to give" it. The statute does not require that it should
be intended by the debtor, but is fully satisficd by the existence of an
intention on the part of the actor — the person who procures, brmgs
about, or efïects the transfer. The préférences denounced by the stat-
ute are often secured by creditors without any désire or intention on the
part of the debtors to give them, as in cases in which the creditors ob-
tain judgments against their debtors over défenses made to the actions
in good faith, and in cases, Hke that at bar, where, without the consent
of their debtors, creditors appropriate to the payment of their claims
the property of their debtors which happens to be under their control.
Such transactions are none the less voidable préférences, that the debt-
ors do not intend them to bave that effect. If they are conducted within
the four months, and if they bave the effect to give to the creditors
who conceive and exécute them larger percentages of their claims
than other creditors of the same class receive, they fall as clearly under
the ban of the law as transfers made by debtors with the intent on their
part to give the préférences. Such a transaction is voidable by the
trustée not only when the party receiving it bas reasonable cause to
believe that it was intended by the debtor, but also when it was intended
by the creditor, or by the actor who accomplished the resuit, to work a
préférence by means of the transaction. Act July i, 1898, c. 541, §§
6oa, 60b, 57g, 30 Stat. 562, 560 [U. S. Comp. St. 1901, pp. 3445, 3443I.
as amended in Act 5, 1903, c. 487, §§ 13, 12, 32 Stat. 799 [U. S. Comp.
St. Supp. 1903, pp. 416, 415]. The tie company in this case had rea-
sonable cause to believe that the transaction which it conducted was in-
tended to give it a préférence over the other creditors of Harrison in
its class. Indeed, ît knevv that this was the object of the transaction. It
knew that its own intention and purpose was to secure such a préférence
by applying the debt it owed to Harrison for the supplies in part pay-
ment of its large claim against him for money advanced, and it at-
tained its object, at least temporarily. The transaction fell fairly with-
in the terms of section 60, and it constituted a voidable préférence.
Finally, it is said that this $2,210.73 was a crédit to Harrison, and
that the company should be permitted to set it off against his debt to it,
and should be allowed to prove its claim for the balance remaining,
without restriction, on the ground that thèse claims were mutual debts
WESTERN TIE & nMBER CO V. BKOWN. 733
and crédits, under section 68 of the bankrupt iaw. But this section
must be read and construed with sections 6oa, 6ob, and 57g, and in the
light of the dominant purpose of the Iaw to distribute to the creditors
equally ail the unexempt property owned by the insolvent four months
before the pétition in bankruptcy is filed. When it is thus read, it
becomes plain that préférences denounced by, and made voidable under,
sections 60a and 60b, cannot be permitted to stand as offsets against
claims of the preferred creditors against the bankrupt which accrued
more than four months before the filing of the pétition. If this could
be done, any creditor who had a running account with bis debtor could
secure an unassailable préférence by simply receiving and crediting
upon this account within the four months sufficient money or property
of bis debtor to satisfy his claim. The truth is that the Iaw draws a line
through the account between the insolvent and his creditor four months
before the pétition in bankruptcy is filed. Ail mutual debts and crédits
which accrue prier to that time may be set off against each other. Créd-
its to the insolvent accruing subséquent to that time which constitute
voidable préférences under section 60 are excepted by that section from
the subséquent provisions found in section 68 (Act July i, 1898, c. 541,
30 Stat. 565 [U. S. Comp. St. 1901, p. 3450]), and they cannot be used
to offset debts of the insolvent which accrue prior to that date. The
mutual debts and crédits which accrue within four months of the filing
of the pétition, and which do not constitute voidable préférences, may
be set ofï against each other, as well as against the respective debts and
crédits accruing more than four months before the pétition is filed.
The crédit to Harrison of the $2,210.73 constituted a voidable préfér-
ence, and cannot, therefore, be lawfully set off against the claim of the
tie Company against him under section 68. There is, however, an item
of $75 in the claim against Harrison which may perhaps properly be
used to reduce the amount of the préférence under section 60c, which
provides that a claim for money or property delivered to a debtor un-
der a new or further crédit by a creditor after he bas been preferred
may be offset against the préférence. While the évidence is not very sat-
isfactory, it seems to indicate that this $75 was advanced to Harrison
after the company had secured a préférence to the amount of $1,042.77.
The amount to be refunded by it will accordingly be reduced by the
sum of $75, and the order of the court below will be modified to the
effect that the claim of the Western Tie & Timber Company against
the estate of the bankrupt, Harrison, be expunged unless the company
pays to the trustée of the estate $2,135.73 within 20 days after the man-
date of this court is filed and entered in the court below, and the order
thus modified will be afïirmed.
It is so ordered.
734 129 FEDERAL EEFOETBB.
FINLBY et al. v. ABNBR.
(Circuit Court of Appeals, Eightli Circuit Marcli 29, 1904.)
No. 1,924.
1. Descent— Kansas Staïute— Consteuction.
The statute of Kansas relating to descent (Gen. St. 1889, c. 33, §§ 20,
21, 29) whicli by act of Congi-ess (Act Feb. 8, 1887, 24 Stat. 389, c. 119,
§ 5) is made to govern tlie descent of lands allotted in severalty to tlie
members of certain tribes in ludian Territory, provides that, if an in-
testate leaves neither husband, nor wife, nor issue, bis estate shall go
to bis parents, and, if bis parents be dead, sball be disposed of in the
same manner as if they, or either of tbem, had outlived the intestate and
died in the ownership and possession of the portion thus falling to their
share, or to either of them, and that "children of the haif blood shall
inherit equally witb children of the whole blood." Held, that the word
"children," as so used, should be construed as meaning "kindred," and
that, Hnder such provision, where an Indian woman, whose parents were
dead, died unmarried and witbout issue, but leaving a half-brother, he
inherited her land, to the exclusion of her uncles and cousins.
In Error to the United States Court of Appeals in the Indian Terri-
tory.
For opinion below, see 69 S. W. 911.
This suit was brought in the United States Court for the Northern District
of the Indian Territory by George W. Finley, Alfred F. Barnes, Estella Sta-
ton, Mabel Staton, and Claudie Staton against Joseph Abner for the parti-
tion of a tract of land. The plaintiffs claim to be the owners of an undivided
one-half of the property, and concède to the défendant the ownership of the
remaining interest. Ail of the parties claim title through one Edith Abner,
to whom, as an Indian, the land had been allotted and patented by the United
States, and who died intestate in April, 1890, without husband, or issue, or
other kin nearer than her half-brother. The common father of the défend-
ant, Joseph Abner, and the deceased Edith, was Dennis W. Abner. His first
wife was the mother of Joseph ; his second wife was the mother of Edith.
He outlived both wives, and, dying, left surviving him his only children, Jo-
seph and Edith, half brother and sister. The plaintiffs were uncles and cou-
sins of Edith Abner on the side of her deceased mother. By one of the acts
of Congress providing for the allotment in severalty of lands to Indians of
the tribe and class to which Edith Abner belonged, the laws of Kansas were
adopted as furnishing the rules with respect to the descent and partition of
such lands. Act Feb. 8, 1887, 24 Stat. 389, c. 119, § 5. The provisions of those
laws, pertinent to this case, are found in sections 20, 21, and 29 of the act con-
cerning descents and distributions (Gen. St. Kan. 1889, e. 33), and they are as
follows :
"Sec. 20. 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.
"Sec. 21. If one of his parents be dead, the whole of the estate shall go to
the surviving parent; and if both parents be dead, It shall be disposed of in
the same manner as if they, or either of them, had outlived the intestate and
died in the possession and ownership of the portion thus falling to their
share, or to either of them, and so on through ascending ancestors and their
Issue."
"Sec. 29. Children of the half blood shall inherit equally with children of
the whole blood. Children of a deceased parent inherit in equal proportions
the portion their father or mother would bave inherited, if living."
The claim of the plaintiffs is that upon the death of Edith Abner, both of
her parents being dead, one half of her estate went through her father, and
tbence down to Joseph Abner, the défendant, and the other half went through
her mother to her mother's parents, and, they being aiso dead, thence down
FÏNLET V. ABNEB. 735
to her uneles and cousins as the sole heirs of her maternai grandparents, as
well as the sole heirs of her mother. Joseph Abner relies upon section 21
and the first clause of section 29, supra, and claims that in vlrtue of the pro-
visions of the latter he occupies the position of a brother of the full blood.
He also contends that, as their common father survived the mother of Edith,
no inheritance could be traced through the latter, and that he, as the sole
heir of the father, takes the entire estate. The cause was submitted upon
the pleadings and an agreed statement of facts, and resulted in a judgment
for the défendant. ïhe judgment was afflrmed by the United States Court
of Appeals for the Indian Territory (69 S. W. 911), and is now before this
court for review.
S. C. Fullerton and Geo. B. Denison, for plaintiffs in errer.
D. W. Talbot and W. H. Kornegay, for défendant in error.
Before SANBORN, THAYER, and HOOK, Circuit Judges.
HOOK, Circuit Judge, after stating the case as above, delivered
the opinion of the court.
If Joseph Abner, in respect of capacity to inherit from his deceased
half-sister, sustained to her a relation équivalent to that of a brother
of the full blood, the conclusion necessarily follows that under the
laws of Kansas he takes the entire estate. In the matter of inheritance^
a full brother or sister of an intestate takes precedence of uneles and
cousins. The crucial question, therefore, is whether a half-brother
possesses the inheritable quality of a brother of the full blood. The
first clause of section 29 of the Kansas act concerning descents and
distributions provides that "children of the half blood shall inherit
equally with children of the whole blood." We must agrée with
counsel that this provision is somewhat obscure, and that the ternis
employed do not clearly indicate the législative intent. If the word
"children" is to be taken in the sensé of "offspring" or "issue of the
body," it is difficult to perceive how, in the very nature of things,
there could be children of the half blood. Every child is of the full
blood of both of its parents. No child can be of the half blood of
either of its parents. If a man has been twice married, both wrives
bearing children to him, those of the first wife are her children of the
full blood, but are not of the blood at ail of the second one, and so
of the children of the second wiic. But ail of the children are of
the full blood of their common father, The phrase "of the half blood"
necessarily signifies that the consanguinity is collatéral, rather than
lineal. The term "children" was not happily chosen for use in connec-
tion with collatéral kinship, but such an ambiguity or inaptness of
words will not justify us in ignoring the force and eiïect of the clause^
when properly construed. It is presumed that every provision was
intended to serve some definite purpose. The intent of a statute is its
vital, living spirit, and it is the duty of courts, when called upon, to
ascertain and give eiïect to such intent, if possible, having due regard
to the language in which it is expressed. In the performance of this
duty it is sometimes helpful and always proper to consider the condi-
tions which led to the enactment.
By the common law of England kindred of the half blood were
wholly excluded from inheritance, even though such exclusion re-
sulted in an escheat of the estate to the crown. The manifest harsh-
736 129 FEDERAL EBPOÉTER.
ness o£ this rule, and the vveakening of the ancîent doctrine of feudal
tenure out of which it grew, led to a modification by an act o£ Parlia-
ment; and, in the spirit of departure frora the old institutions, laws
hâve been enacted in nearly ail, if not ail, of the states of this coun-
try, placing kindred of the half blood, in respect of their inheritable
capacity, wholly or partly in the class of those of the whole blood.
In some states a distinction is made between property acquired by
inheritance and that acquired by purchase, the old rule being retained
as to the former ; in other states a distinction is made between personalty
and realty. In some the kindred of the half blood are given a fractional
interest in comparison with that which is given to those of the whole
blood; and in other states ail différences in capacity to inherit are
wholly abolished. Gardner v. Collins, Fed. Cas. No. 5,223 ; Id., 2 Pet.
58, 7 L. Ed. 347; Stone v. Doster, 50 Ohio St. 495, 35 N. É. 208;
Baker v. Chalfant, 5 Whart. 477; Appeal of Lynch, 132 Pa. 422, 19
Atl. 281; Oglesby Coal Co. v. Pasco, 79 111. 164; Moore v. Abernathy,
7 Blackf. 442; Àrmington v. Armington, 28 Ind. 74; Clay v. Cousins,
I T. B. Mon. 75 ; Petty v. Malier, 15 B. Mon. 591 ; Keller v. Harper,
64 Md. 74, I Atl. 65; Larrabee v. Tucker, 116 Mass. 562; Rowley v.
Stray, 32 Mich. 70; Fatheree v. Fatheree, i Walk. 311; Prescott v.
Carr, 29 N. H. 453, 61 Am. Dec. 652 ; Deadrick v. Armour, 10 Humph.
588; Chaney v. Barker, 3 Baxt. 424; Marlow v. King, 17 Tex. 177;
Stark V. Stark, 55 Pa. 62.
It is worthy of note in this connection that the only provision in the
entire body of the laws of Kansâs directly touching this subject is
contained in the clause under considération. Upon a view of the an-
cient rule and the prevailing departure therefrom, we can hâve no
doubt that in its enactment it was the purpose to follow the trend of
modem législation, and consequently that its effect is to permit kin-
dred of the half blood to inherit equally with those of the full blood;
the term "children" being construed as meaning "kindred." This be-
ing true, what is the resuit? Joseph Abner is placed in the position
of a full brother of the intestate. The law says, in efïect, that he
shall inherit equally with a brother of the full blood. There is no
ambiguity in the measurement of the interest which he would take in
that capacity. Larrabee v. Tucker, supra. As a full brother of the
intestate, Joseph Abner would take the entire estate of the intestate,
to the exclusion of her uncles and cousins. Being a half-brother,
with equal rights of inheritance, the same resuit naturally follows.
It is suggested that by this construction efïect is not given to the
second clause of the same section, which provides that "children of
a deceased parent inherit in equal proportions the portion théir father
or mother would hâve inherited, if living," and that a proper applica?
tion of this clause to the case in hand would permit of the inheritance
of the plaintiffs as heirs of the mother of the intestate. The purpose
of this second clause was to apply a limited rule of représentation per
stirpes to an appropriate state of facts pertaining to collatéral inher-
itance in cases of intestacy ; but there is no condition in the case before
us which authorizes the use of the rule. We hâve, instead, a near rela-
tive, who is clothed with ail of the rights of a brother, and who, un-
der the law, is entitled to take the entire estate. The existence of a
LEIGHTON T. KBNNEDT. 737
half-brother of the intestate, possessing the inheritable quality of a
brother of the f ull blood, necessarily precludes an ascent along the
ancestral' Une for the discovery of uncles and cousins, as is authorized
by the twenty-first section of the same act. Whenever, in the plan of
descent and distribution prescribed by law, there is found a person
who possesses the right to take the entire estate of an intestate, the
provisions applying to those who are more remote in relationship be-
come of no moment. Thèse conclusions render it unnecessary to con-
sider the effect upon the rights of the parties to the suit which might
under différent conditions flow from the fact that the common father
of Joseph Abner and the intestate survived her mother, through whom
the plaintiffs claim.
The judgment will be affirmed.
LEIGHTON V. KENNEDY.
(Circuit Court of Appeals, First Circuit. Aprll 14, 1904.)
No. 502.
1. BaNKRUPTCT— ASSIGNMENT OF CLAIMB— HFFECT.
Within four montlis prior to the flling of a pétition praylng that the
person against whom the pétition was brought should be adjudged a
banUrupt, the alleged banlîrupt had made a gênerai assignment for the
benefit of creditors to one M. M., prior to the iiling of the pétition, pur-
chased the claims of 12 creditors, which were nonnegotiable choses In
action, under such circumstances that the alleged bankrupt might hâve
claimed that the purchases were In his interest. Afterwards, and a few
days before the flling of the pétition, M. assigned each of said claims to
a stranger, with the purpose of keeping allve 12 différent claims In the
hands of 12 différent supposed creditors, so that the same might be
enumerated as outstanding creditors with référence to any such pétition.
Eeld, that the claims so purchased merged in M., so as to become a
single clalm In equity, or are to be regarded as extlnguished ; that. In
either case, the several persons to whom the claims were assigned ac-
quired no equltles superior to those of M., as the claims were non-
negotiable choses in action; and that the attempt by M. to create the
condition described with référence to enumeration of creditors was an
attempt to defeat the seheme of the statutes In bankruptcy, and therefore,
in any view, noneffectual.
2. Same.
Within four months prior to the flling of a pétition praying an adjudi-
cation in bankruptcy of the person against whom the pétition was flled,
the alleged bankrupt made an assignment for the beneflt of creditors to
M. M., within a few days prior to the flling of the pétition, purchased with
funds of the assigned estate several claims against the alleged bankrupt
belonging to creditors who had not assented to the assignment ; and
thereafter, before the flling of the pétition, M. executed formai assign-
ments of each of said claims to a stranger, without recelvlng any con-
sidération therefor. Eeld, that the claims. If not extlnguished through
the purchase by M., were by that purchase put under the control of the
alleged bankrupt, who held the residuary Interest In the assigned estate,
and so continued, and therefore must be rejected in Computing the enu-
meration of outstanding creditors with référence to such pétition.
Appeal from the District Court of the United States for the District
of Massachusetts.
129 F.— 47
738 12& FEDERAL REPORTER.
John J, Ryan (Pingreé & Ryan, on the brief), for appellant.
Frederick P. Cabot (Hvirlburt, Jones & Gabot, on the brief), for ap-
pellee.
Before COLT and PUTNAM, Circuit Judges, and ALDRICH,
District Judge.
PUTNAM, Circuit Judge. In this case the appellant, Leighton,
was adjudicated a bankrupt by the District Court for the District of
Massachusetts, and thereupon he seasonably appealed to us. The case
turns on the construction, application, and force of the following pro-
vision in paragraph "b" of section 59 of the bankruptcy act approved
on July I, 1898, c. 541, 30 Stat. 561, 562 [U. S. Comp. St. 1901, p.
3445] :
"Tliree or more creditors who hâve provable claims against any person,
which amount in the aggi-egate, in excess of the value of securities held by
them, if any, to five hundred dollars or over, or if ail of the creditors of such
person are less than twelve in number, then one of such creditors whose claim
equals such amount may file a pétition to bave hlm adjudged a bankrupt."
A single créditer (Kennedy), who is the appellee, filed on March 28,
1903, a pétition in due form, praying that Leighton might be adjudged
bankrupt. He alleged that Leighton's creditors were less than 12.
Leighton answered, denying this allégation, and prayed that the péti-
tion be dismissed. On February 20, 1903, Leighton, being admittedly
insolvent, made a gênerai assignment for the benefit of his creditors
to one Walter J. Martin. A portion of the creditors came into the as-
signment, the détails as to which ones it is not necessary to state.
Twelve of Leighton's creditors who had not corne in, on March 12,
1903, asSigned their claims to Martin, receiving in payment therefor
checks signed by him as assignée. The assignments to Martin were in
writing, and in form to him individually ; that is, without describing
him as assignée, or disclosing on their face anything to show that he
obtained them other than in his individual capacity. It appears that at
the time thèse assignments were taken Martin had on deposit to his
crédit as assignée a certain amount of cash, and on the sàme day bor-
rowed other amounts, which were credited to him as assignée, and pre-
sumably added to hïs deposit as such. Thèse sums were borrowed, as
the case states, for the purpose of aiding him in making payments to
the creditors. Subséquent to the pétition in bankruptcy the larger por-
tion of the sums so borrowed were paid by Martin by his checks as as-
signée, but this cannot be regarded as a material fact.
The case contains the following statements agreed to by the parties
to the controversy:
"The twelve accounts assigned as aforesaid to Martin were, on March 24,
1903, assigned by said Martin to twelve différent persons, who respectively
paid to Martin for the several accounts the same amount that Martin had
paid for the respective accounts."
"The purpose of Martin and his assignées in making and taking thèse assign-
ments of March 24, 1903, from Martin, was to keep claims enough alive to
prevent a single créditer from maintalning a creditor's pétition in bankruptcy
against said Albert Leighton, and to prevent thèse claims from merging in
hlraself, and to exclude the possibility of his being counted as only one cred-
itor in case of bankruptcy proceedings against said Leighton."
LEIGHTON V. KENNEDT. 739
It will be noticed that thèse assignments from Martin were only four
days before the pétition in bankruptcy was filed. They were in writing ;
so that if, after the claims had merged in Martin, he could lawfully
reassign them, and they were capable of being severed, each of the
various persons to whom the assignments were made became, for ordi-
nary purposes, a creditor of Leighton, not only in equity, but at law,
as will be seen by the extract from the Massachusetts statutes which
we will hereafter make. The parties further agreed as foUows :
"Eight claims against said Leighton, aggregating less than $200, and being
ail but seven of the other claims against Leighton which had not assented in
writing to the assigument, were assigned by the holders thereof, credltors of
Martin, to différent persons for a similar purpose, of which both assignors
and assignées were cognizant ; but the considération theref or was furnished
by checks drawn by Martin as assignée, under said assignment, on the said
bank account hereinbefore described."
Also as follows :
"Unless the above-mentloned twelve claims assigned on March 24, 1903, by
Martin, or unless the eight claims assigned for a similar purpose, the consid-
ération for which was paid by Martin as aforesaid, are counted in determining
the number of creditors, there were less than twelve credltors at the date of
the filing of the bankruptcy pétition."
As under an assignment for the benefit of creditors the assigning
debtor retains the benef^^ ial interest in the residue of the property, when
there is any, and in equity controls it, and as the assignée under such a
(ked bears trust relations to the debtor as well as to the creditors, it
follows that whatever may hâve been the form of the transactions
which resulted in the assignments of various debts to Martin, or to the
persons designated by him who paid no considération therefor, it was
at the option of the debtor, Leighton, to ratify Martin's transactions
in thèse respects, and accept the benefit thereof. To the time when the
pétition in bankruptcy was filed Leighton had not repudiated them;
so that, for this case, ail the debts thus assigned must be held to hâve
been extinguished by payments from his assets, or on his account. The
only alternative would be to hold that Leighton even then retained the
right of afifirming or rejecting, thus leaving him at his option to play
fast and loose with référence to proceedings in bankruptcy, which, of
course, could not be permitted. Therefore, according to the settled
practice in bankruptcy, those debts are not to be counted in Computing
the outstanding creditors with référence to the number required to unité
in an involuntary pétition. Bump's Bankruptcy (lOth Ed.) 439. This,
of course, would not prevent thèse creditors from surrendering, after
an adjudication in bankruptcy, the cash received by them as unlawfui
préférences, and from proving their debts. Neither, according to the
well-settled practice in bankruptcy (Bump's Bankruptcy [loth Ed.]
439), would it prevent them from uniting in an involuntary pétition,
and counting as creditors accordingly, unless the pétition was based on
préférences given them. Thèse propositions together work out an
équitable resuit ; while, if preferred creditors should be counted against
an involuntary pétition, they could, by merely sitting still, give effect
to préférences illegally received, and defeat the purposes of the bank-
ruptcy statutes. We find nothing in the présent législation which con-
740 129 FEDERAL REPORTEE.
travenes thèse rules of practice, although they were settled under previ-
ous statutes. The décisions cited in behalf of Leighton for the most
part fail to meet thèse points, and, if to any extent they do not so fail,
they are not of sufficient authority to change the previous practice.
Of course, like ail other purchasers of nonnegotiable choses in action,
the parties who acquired the I3 claims from Martin took them subject
to ail equities, and therefore to this option on the part of the debtor.
In this particular case this is emphasized because, in view of the fact
that they and Martin united for the purpose stated in the record, they
must be held cognizant of the true condition of affairs. Therefore,
for fundamental reasons, thèse debts cannot be enumerated under para-
graph "b" of section 59 of the act of July i, 1898.
The eight claims which were, by Martin's procurement, assigned to
différent persons who paid no considération therefor, are also subject
to further observations which easily dispose of them. Unless regarded
as discharged from the assigned assets of Leighton in the manner we
hâve stated, they belonged in equity to Martin ; and the interests of the
several persons to whom they were nominally assigned were unsubstan-
tial, and not cognizable in bankruptcy proceedings, which, as we hâve
several times held, are governed by équitable rules. It is the settled
practice in the United States in bankruptcy that choses in action which
hâve been assigned before a pétition is filed are to be proved by the
assignée as being the substantial party in intérêt. Bump's Bankruptcy
(loth Ed.) 638. It is clear, as ruled in Sandusky v. First National
Bank, 23 Wall. 289, 23 L. Ed. 155, that a proceeding in bankruptcy,
from the time of its commencement to its final settlement, is one suit.
The rule is universal in ail litigation except suits at law, whether in
equity or admiralty, and therefore in bankruptcy, which is analogous to
equity, that interveners come in in the names of the substantial owners
of claims, whether they be the original holders or assignées. Conse-
quently, so far as thèse eight claims are concerned, there was, at the
time the pétition in bankruptcy was filed, in the best view of the case for
Leighton, only a single creditor.
In addition to this, after the purchase by Martin, the claims, if not
extinguished, were under the control of Leighton, who had the resid-
uary interest in the estate assigned to Martin, and in whose behalf the
latter was subject to a trust, as we hâve already explained. The rea-
sons why thèse claims should not count are therefore multiple ; and in
any view of the policy of the bankruptcy statutes, and of the necessity
of an honest administration thereof free from improper control or in-
fluence, they must be rejected in Computing the number of outstanding
creditors under section 59b of the act of July i, 1898, which we hâve al-
ready quoted.
With référence to thèse particular claims, we observe nothing in
the transaction which could be said to clearly operate in violation of
the policy of the Bankruptcy Statutes. If we could assume that they
are to be regarded as outstanding debts, the condition was not changed
by the assignments made in connection with them, because prior
thereto there were eight creditors, and there was, therefore, no unlaw-
ful purpose contemplated in the endeavor to maintain that same num-
ber. As to the twelve claims, however, the condition was entirely dif-
LEIQHTON V. KENNEDY. 741
ferent. Either on the assignments of thèse daims to Martin they were
extinguished, as we hâve said, or they ail merged in Martin, so that he
became in equity a single creditor, and, under the Revised Laws of
Massachusetts of 1902, c. 173, § 4, a single creditor at law. This
reads as follows:
"The assignée of a non-negotiable légal cbose In action which Las been as-
signée! in writing may maintain an action tliereon in his own name."
The subséquent assignments by him constituted an attempt to cre-
ate artificially a new condition for the spécifie purpose, assented to by
ail involved, of defeating the carefully prepared scheme of the bank-
ruptcy statutes with référence to the subject-matter which this proceed-
ing concerns. An attempt to create such a condition, and thus by
indirect methods to defeat the scheme of the statute, is unlawful and
void, and so clearly so that we need not elaborate the proposition. It
is true that there is a class of cases, like In re Strachan, 3 Biss. 181,
Fed. Cas. No. 13,519, where, as the resuit of an inefïectual effort to
adjust the affairs of a debtor by voluntary agreement among creditors,
the enumeration with référence to proceedings in bankruptcy has been
disturbed ; but those disclose an honest purpose which the law does not
discourage. On the other hand, the présent appeal exhibits in connec-
tion with the 12 claims no intention of bringing about a voluntary ad-
justment of Leighton's affairs, but only a purpose, by an artificial array
of numbers, to bar the petitioner, Kennedy, from his statutory right,
and so no purpose whatever except that of defeating the scheme
of the statute. Therefore there is no basis for its approval by a judicial
tribunal.
We do not forget that prior to the later statutes in référence to
the jurisdiction of the Circuit Courts it was admissible for citizens of
différent states to acquire property by absolute title although the pur-
pose thereof was to establish jurisdiction in the fédéral courts ; nor do
we forget that a gift made for a like purpose to South Dakota was ac-
cepted by the Suprême Court as vesting it with jurisdiction against
North Carolina. South Dakota v. North Carolina, 192 U. S. 286, 24
Sup. Ct. 269, 48 L. Ed. . Neither do we forget that under the prior
bankruptcy statutes it was held by at least one District Court that it
was legitimate to purchase claims for the purpose of securing the
statutory amount required for the bringing of an involuntary pétition.
In re Woodford and Chamberlain, 13 Nat. Bankr. R. 575, Fed. Cas.
No. 17,972. But thèse attempts to invest courts with jurisdiction were
not reprehensible in the sensé in which the contrivance at bar was so,
in that the latter looked to forcing the petitioner out of the bankruptcy
courts, and to depriving him of the right which the statutes carefully
sought to secure him ; and it should be understood that we do not in-
tend to cover by this décision anything except with regard to the pré-
cise facts before us.
The decree of the District Court is afifirmed, and the appellee will
recover his costs of appeal.
742 129 FEDERAL EBI'OKTBB.
UNITED STATES y. MASON.
(Circuit Court o£ Appeals, First Circuit February 24, 1904.)
■ No. 500.
1. FEDERAL Courts— Clebks—Fees Collectbd.
Moneys in the liands o£ tlie clerk of a fédéral district court are the
property of the government, subject only to the payment of hls Personal
compensation and necessary office expenses, includiug clerk hire.
2. Same— Bankruptct— Blanks— Pbikting.
Where a fédéral district judge declded that bankruptey forms were
reasonably necessary for the proper administration of justice in order
to insure unlformlty, and thereupon ordered the District Court clerk
to hâve certain approved forms printed and dlstrlbuted, and to pay for
the same from the receipts of hls office, the prlntlng of such forms, in
so far as they were to be used for records by référées, etc., could uot be
regarded as stationery or a necessary expense of the clerk's office, with-
In Eev. St. U. S. § 833 [U. S. Comp. St. 1901, p. 642], authorizlng clerks
of the district courts to retaln from the fées of their office ail necessary
expenses thereof, but the clerk was entltled to pay, as a "necessary ex-
pense," for the prlntlng of such portion of the forms as were necessary
to inform the référées, etc., of the forms adopted by the court.
In Error to the District Court of the United States for the Dis-
trict of Massachusetts.
William H. Garland, Asst. U. S. Atty., and Henry P. Moulton, U.
S. Atty.
William A. Pew, Jr., for défendant in error.
Before COLT and PUTNAM, Circuit Judges, and BROWN, Dis-
trict Judge.
PER CURIAM. This is a writ of error to review the judgment
of the District Court in an action upon the officiai bond of the clerk
of the District Court of the United States for the District of Massa-
chusetts. The case was submitted to the District Court upon an
agreed statement of facts, supplemented by the testimony of Mason,
the défendant. It is agreed :
"That, while acting in the eapaeity of clerk of sald court, défendant pur-
chased, or caused to be printed, by order of the court, certain blank forms,
to be used by the référées and clerk in bankruptey ; sald forms beiug adopted
and approved by the honorable judge of this court for the purpose of se-
curing uniformity in the varions forms used in the court of bankruptey, and
for the convenience of the court in considerlng the return made to it by the
référées, and in dealing with matters of bankruptey. That sald court declded
that sald forms were reasonably necessary for the proper administration of
justice, and ordered the clerk to cause the same to be printed and distributed,
and to pay for the same from the receipts of the clerk's office."
The amount in question is $411.14, the government having aban-
doned its contention as to ail other items.
The moneys in the liands of the clerk are the property of the gov-
ernment, subject only to the payment of his personal compensation
and his necessary office expenses, including necessary clerk hire.
The clerk is the collecting agent for the government. Beau v. Pat-
terson, iio U. S. 401, 4 Sup. Ct. 23, 28 L. Ed. 190. His duties as
collecting agent are prescribed by statutes governing an officer of
UNITED STATES V. MASON. 743
a court of the United States. United States v. Hill, 123 U. S. 681,
8 Sup. Ct. 308, 31 L. Ed. 275. By section 833, Rev. St. U. S. [U. S.
Comp. St. 1901, p. 642], it is provided that he shall make to the At-
torney General returns of the fées and émoluments of his office, and
of ail the necessary expenses of his ofificè. By section 844, Rev.
St. U. S. [U. S. Comp. St. 1901, p. 647], he is required to "pay into the
treasury, or deposit to the crédit of the Treasurer, as he may be
directed by the Attorney General, any surplus of the fées and émol-
uments of his office, which said return shows to exist over and
above the compensation and allowances authorized by law to be re-
tained by him."
To entitle the clerk to crédit for the items disallowed, authority
must first be found in the statutes. That "necessary office expenses"
may be allowed as a proper crédit appears from section 833 and sec-
tion 839, Rev. St. U. S. [U. S. Comp. St. 1901, p. 645]. Passing
the questions which arise from the statement that the expense was
incurred without previous authority from the Attorney General, we
will consider whether the expenditures can be regarded as for neces-
sary expenses of the clerk's office. In this connection, we may con-
sider the facts that the court ordered the blanks that they might be
used by the référées and clerks in bankruptcy; that the forms were
adopted and approved by the district judge for the purpose of se-
curing uniformity in the varions forms used in the court of bank-
ruptcy, and for the convenience of the court in considering the re-
turn made to it by the référées and in dealing with matters in bank-
ruptcy, and that the District Court decided that said forms were
reasonably necessary for the proper administration of justice; and
that ail of thèse blanks, after being filled out, were returned to the
clerk, and ultimately became a part of the record of the court in
bankruptcy cases, and were the only record.
To regard this expenditure merely as for stationery would be a
narrow view. The printed blanks were for the use of the référées,
not as mère stationery, but were also directions to them in fulfilling
their duties as officers of the bankruptcy court in making up the
judgments of the bankruptcy court and its records.
That the most practical means to give instructions to a large num-
ber of référées in différent parts of the district, to hold them to uni-
formity in methods, and to provide for orderly and convenient rec-
ords of the court, was to issue sample forms, adopted and approved
by the court, is obvions. To one at ail familiar with bankruptcy
procédure, it is évident that the préparation of practical blanks in-
volves much more than the promulgating of an ordinary rule of
court. The practical way to tell the référées and clerk what to do
was not by mère pen-written orders, but by preparing sample blanks
with the aid of a printer, who could provide suitable type, and suita-
ble spaces for entries and for signatures, and make a sufficient num-
ber of duplicates. Ail thèse matters of form, size, and arrangement
were most important, and were under the control of the District
Court. The purpose of the order was to enable the court to do
bankruptcy business in an orderly and proper manner, not to pro-
vide stationery for référées.
^ii 129 FEDERAL RBPOUTEE.
What was donc comprehended, in substance, three thîngs: The
issuance, through the clerk, of directions of the judge to the réf-
érées ; the provision of blank forms for the use of référées, which
blanks, when filled, subsequently became the records of the bank-
ruptcy court ; and the provision of stationery for the use of référées.
So far as the blanks are to be regarded as stationery, it was sta-|
tionery for the use of référées, and not for the use of the clerk. So
far as the blanks were for records, we think they cannot be regarded
as for the use of the clerk, or their printing as a necessary expense
of his office, within the meaning of the statute. By référence to
Bankruptcy Act, §§ 39, 42 (Act July i, 1898, c. 541, 30 Stat. 555, 556,
557 [U. S. Comp. St. 1901, pp. 3436, 3437], it will be seen that the
duty of making up such portions of the record as were made upon
blanks furnished to référées is not a duty of the clerk, but of the réf-
érées, who are officers whose duties are defined by statute. By
General Orders in Bankruptcy, § 35, pars. 2, 4 (89 Fed. xiii, xiv, 32
C. C. A. xxxiv), it appears that the Suprême Court has so inter-
preted the bankruptcy act as to permit the reimbursement of the
référées for necessary expenses out of particular estâtes. Branden-
burg on Bankruptcy (3d Ed.) c. 62. Provision being made for ex-
penses incident to the office of référées, such expenses cannot be re-
garded as necessary expenses of the clerk's office. The only aspect
in which the furnishing of such blanks can be regarded as within the
duties of the clerk is that it was a communication to the référées of
forms adopted and approved for the régulations of référées.
The United States attorney urges that :
"If tlie court desired to secure uniformity In returns of référées in bank-
ruptcy cases, he might hâve prescribed a form, and bave directed the clerk to
send it to the varions référées throughout the district."
For reasons before stated, we are of the opinion that it cannot be
said that the printing of sample forms for this limited purpose was
not a necessary expense of the clerk's office. While it is true that
it might hâve been possible for a clerk, with pen and ruler, to make
by hand a sufficient number of copies, the inconvenience of doing
so amounted to a practical necessity for printing, in order to carry
out the directions of the court. It cannot be said, as a matter of
law, that printing either by rubber stamps or by machine presses
can in no instance be a necessary expense of the clerk's office.
As the case cornes before us, the only objection properly made by
the United States to the allowance of the item of $411.14 is that it
was not disbursed for "necessary office expenses." For the reasons
that we hâve shown, evidently a portion of it was not for such ex-
penses ; and, as ail the circumstances under which the expenditures
were made are open on this record, we hold, for the reasons stated,
that for such portion the United States is entitled to recover on the
bond in suit. But under the assignment of errors, so much of the
item of $411.14 as was for "necessary office expenses," on the prin-
ciples we hâve stated, cannot be recovered by the United States, and
this independently of whether the work was donc with the pen and
ruler or by printing. We say "under the assignment of errors," be-
cause clearly none of them properly raises any distinct question un-
CLAEK V. PIDCOCK. T^à
der the régulations of any of the departments, and ail of them go to
the merits of the expenditures, without regard to any régulation.
This is true of the fourth assignment, which contains the expression,
"without the authorization of the Department of Justice or of any
express provision of law," since it also contains the_ Avords, "for the
purchase of supplies not required for use in the administration of his
office as such clerk." The assignment of errors concludes with a
sweeping paragraph, but this, of course, is limited by the context.
Therefore, so far as the expenditures in dispute were actually for
"necessary office expenses," they should be allowed. As the record
stands before us, we cannot, of course, ascertain how much of the
item of $411.14 should be appropriated to them, if any.
The judgment of the District Court is reversed, and the case is
remanded to that court for further proceedings in accordance with
our opinion passed down this day, and neither party recovers costs
on appeal.
CLAEK V. PIDCOCK.
(Circuit Court of Appeals, Thlrd Circuit. May 2, 1904.)
No. 27.
BANKEUPTCT— OlECTJIT COUETS OF APPEAL—JURISDICTIOK— PETITION FOR
Review.
Under Bankr. Act July 1, 1898, c. 541, § 24b, 30 Stat. 553 [U. S. Oomp.
St. 1901, p. 3432], providing that the several Circuit Courts of Appeal
shall hâve jurisdiction In equlty to revise in matters of law the proceed-
ings of the several inferlor courts of bankruptey within their jurisdic-
tion, which power shall be exerclsed on due notice and pétition by the
party aggrieved, where, after a bankrupt's estate bas been closed with-
out appointment of a trustée for the reason that the schedule showed
no assets, an assignée of a judgment créditer who alone proved his clalm
applled to hâve the estate opened on the ground that the bankrupt had
assets which he had fraudulently conveyed, on which pétition the court
discharged a restralning order and refused an iujunction to prevent a
further transfer of the assets, but appointed a trustée, such petitioner
was a party aggrieved, and was therefore entitled to prosecute a péti-
tion for review of such order.
2. Same—Teustees— Appointment.
Where, at the first meeting of creditors of a bankrupt, called by the
référée on Noveinber 21, 1899, no creditors were présent and no trustée
was appointed, and petltioner's assigner was the only creditor who
proved his debt, it appearing that there were no assets, and on January
28, 1902, the référée made his final report, recitlng that the bankrupt's
estate had been fully adminlstered so far as it had been referred to him,
and that it was closed, the fact that more than a year elapsed thereafter
before such credltor's pétition for the appointment of a trustée was flled,
which showed that the bankrupt had died leaving assets fraudulently
transferred, did not deprlve the court of jurisdiction to open the pro-
ceedings and appoint a trustée under Bankr. Act July 1, 1898, c. 541, §
H 1. Appeal and review in bankruptey cases, see note to In re Eggert, 43
C. C. A. 9.
746 129 FEDERAL EEPOETEB.
44, 30 Stat. 557 [U. S. Comp. St 1901, p. 3438], providlng that, If credlt-
ors of a bankrupt shall not appoint a trustée at their flrst meeting the
court shall do so.
Appeal from the District Court of the United States for the District
of New Jersey.
George H. Large, for appellant.
R. L. Lawrence, for appellee.
Before ACHESON, DALLAS, and GRAY, Circuit Judges.
GRAY, Circuit Judge. The pétition in this case was filed under sec-
tion 24b of the bankruptcy act of 1898 (Act July l, 1898, c. 541, 30 Stat.
553 [Ù. S. Comp. St. 1901, p. 3432]), and seeks the revision in matter
of law of an order appointing a trustée in bankruptcy, made by the Dis-
trict Court of the United States for the District of New Jersey, on the
]3th day of April, 1903, in the matter of James N. Pidcock, bankrupt.
James N. Pidcocii was adjudicated a bankrupt on October 27, 1899,
on the filing of his pétition in voluntary bankruptcy. The said pétition
and the schedules filed therewith under oath, show no assets, but debts
amounting to upwards of $300,000.
On the 3ist day of October, 1899, an order of référence was made to
011e of the référées in bankruptcy, who, on the 6th day of November, A.
D. 1899, called the first meeting, of the creditors of the said James N.
Pidcock, bankrupt as aforesaid, to be held in Flemington, N. J., on the
2ist day of November, 1899. At the said time and place, the first
meeting of creditors was held by the référée, and no créditer appearing
or being represented thereat, the référée ordered "that no trustée of
the estate of the said James N. Pidcock, bankrupt as aforesaid, be ap-
pointed."
In the list of creditors of the said bankrupt, as shown in the schedules
filed by him, as aforesaid, is the name of Daniel W. Kleinhaus, for the
sum of $329.97, the amount of a certain judgment recovered by said
Kleinhaus against said Pidcock. On the 5th day of December, 1899,
the said Kleinhaus duly filed his proof of claim against the estate of
the said banknipt with the référée, and the same was allowed and is
now on file with the papers in the case.
On or about the I7th day of December, A. D. 1899, the said Pidcock,
bankrupt as aforesaid, died, without having filed his pétition for a dis-
charge in bankruptcy, and on the 2d of February, 1903, letters of ad-
ministration were granted unto Harriet G. Pidcock, widow of the said
James N. Pidcock, deceased, by the surrogate.
On July 9, 1900, the référée made the following certificate :
"I hereby certlfy that said Pidcock was adjudged a bankrupt on the 27th
day of October, 1899.
That the schedules filed herein disclose no assets, nor hâve any assets come
to the hands of the trustée.
That I bave rendered ail the services requlred to be rendered to the présent
time.
That this matter bas been closed so far as the payment of fées is con-
cerned under the authority of rule 18 of this court.
Dated July 9th, 1900. Frederick W. Léonard,
Keferee in Bankruptcy."
CLARK V. PIDCOCK. 747
On January 28, 1902, the said référée made the f ollowing report :
"In tlie District Court of tlie United States, for the District of New Jersey.
In the Matter of James N. Pidcoek, Bankrupt In Baiikruptcy.
I, Frederick W. Léonard, référée in bankruptcy in charge of this matter,
do hereby make my final report as follows : The estate of said bankrupt bas
been fully administered to my satisfaction, and so far as the same bas been
referred to me it bas been closed.
I herewith flle my bock of record of proceedings herein and ail papers filed
with me.
Dated Newark, N. J., January 28th, 1902.
Respectfully submitted, Frederick W. Léonard,
Référée in Bankruptcy."
On March 31, 1903, the pétition of one Harrison P. Lindabury was
filed in the District Court, in which the petitioner, after stating the
foregoing facts, ail of which appear of record, further states that by
a certain deed of assignment bearing date the iith day of March, A. D.
1903, made and executed by the said Daniel W. Kleinhaus, the judg-
ment recovered by the said Daniel W. Kleinhaus against the said
James N. Pidcoek, bankrupt as aforesaid, was assigned and transferred
unto the petitioner, who now holds the same and offers to produce the
same whenever required so to do ; that by said deed of assignment, the
said petitioner became subrogated to ail the rights and privilèges of
the said Kleinhaus against the estate of the said bankrupt "acquired by
virtue of the proof of claim filed by the said Kleinhaus, as above recited,
or otherwise"; that no part of the said judgment has ever been paid
to the said Kleinhaus, or to the petitioner, but that the whole of said
sum, with interest thereon from February 20, 1894, still remains due
and unpaid and owing to the said petitioner from the estate of the said
bankrupt, as aforesaid.
The petitioner then states that by the schedules filed by the said bank-
rupt, it appears that the total liabilities of the said bankrupt amounted
to the sum of $373,537-0 1, and that the said bankrupt had no property
or assets of any kind or description. The petitioner, then, upon in-
formation and belief, states that the pétition and schedules filed in the
District Court, as aforesaid, by the said bankrupt, did not truly repre-
sent the property and assets of the said bankrupt, "but that they were
and are false, fraudulent and misleading," and were made and filed by
said bankrupt with the intent to defraud his creditors.
The petitioner then proceeds to set out and specifically describe vari-
ons properties, choses in action, bonds, stocks, and securities, which the
said bankrupt has, he avers, "falsely, fraudulently and willfully con-
cealed and withheld from the said pétition and schedules filed as afore-
said, with the intent and for the purpose of defrauding his creditors,"
and further, that the said bankrupt conveyed his property to his three
sons and a daughter, who, with others, are charged with the intent to
conceal the same from his creditors, and in fraud of the bankrupt law.
Thèse alleged fraudulent transactions are set out specifically and in
détail, and affidavits tending to support the same are filed with the said
pétition.
The pétition further allèges that the said Kleinhaus never knew of the
fraudulent practices and perjuries alleged to hâve been committed by
the said Pidcoek, and that he had no knowledge which would lead him
'''^8 129 FEDBEAL EEPOETEE.
to suspect them, and the petitioner charges and avers that such in-
formation had recently, within the then past few weeks, corne to his
knowledge, and that neither he nor Kleinhaus had been guilty of any
lâches or undue delay in filing the said pétition, having moved therein
as soon as the counsel could prépare the proper moving papers and affi-
davits.
^^ The pétition then concludes as follows :
"That this matter should, therefore, the premises consldered, be reopened
and the said adjudication set aside and for nothing holden if It shall be
aiade to appear that the said James N. Pidcoek, bankrupt as aforesaid, was
not insolvent, or be re-referred to one of the référées of this honorable court
if it shall be made to appear that the said James N. Pidcoek, bankrupt as
aforesaid, had assets and property which he fraudulently concealed and with-
held from the pétition and schedules flled by him as aforesaid, to the end
that a trustée or trustées of the estate of the said James N. Pidcoek, bank-
rupt as aforesaid, may be appointed, and the said estate administered as
contemplated by the statutes in such case made and provided :
Your petitioner, thei'efore, humbly prays, that an order may be made by
this honorable court reopening this matter, and that it be re-referred to one
of the référées in bankruptcy of this honorable court to take such action as
he may be advised the exigencies of the matter require and as may meet the
requirements of equlty aud good conscience, and that your petitioner may
hâve such other and further relief as this honorable court may deem proper
and advisable."
Then îollows a prayer for a rule commanding that James N. Pidcoek,
Jr., and the other sons and daughter of the bankrupt, together with his
widow, as administratrix, the First National Bank of Jersey City, the
Merchants' Trust Company of the City of New York, and George E.
Fisher and Ezra M. Tuttle, appear upon a day certain, and show cause
why a restraining order and injunction thereafter prayed for should
not be made permanent until the further order of the court.
The petitioner then prays that a restraining order and an injunction
may issue, restraining the parties and each of them, their officers, agents
and attomeys, servants and assigns, from making any gift, sale or trans-
fer or other disposition of the said stocks, bonds, securities and choses
in action, so held by the First National Bank of Jersey City, until the
further order of the court.
Upon the reading of the pétition, and the affidavits thereunto annexed
in support thereof, a restraining order was issued by the court below,
March 31, 1903, as prayed for, until the hearing and décision of the
order, whereby the parties named in said pétition were, on the I3th day
of April, 1903, ordered to show cause why the said restraining order
should not be continued by a writ of injunction duly issued by the said
court.
To this pétition, on the said I3th day of April, 1903, an answer was
duly filed by the soliciter of the respondents, together with their aiiS-
davits annexed thereto, denying ail the allégations of fraud and mis-
conduct on the part of the said Pidcoek, deceased, bankrupt as afore-
said, or by the respondents. On the said I3th day of April, 1903, the
rule to show cause coming on to be heard in the présence of the peti-
tioners and their solicitors, and the respondents and their solicitors, and
the pétition, answers and affidavits of the respondents being read and
filed, and counsel having been heard, it was ordered that the restrain-
CLARK V. PIDCOCK. 749
ing order be discharged, and that the injunction therein mentioned be
refused.
It also appears by the record that on the same day, a separate order
was made and filed in the court below, which reads as foUows :
"United States District Court, District of New Jersey.
In the Matter of James N. Pidcock, Bankrupt. In Bankruptey. Order
Appointing Trustée.
(Filed April 13, 1903.)
Application being made to the court by Harrison P. Lindabury, a judgment
créditer of the said James N. Pldcoek's estate, for the appointment of a
trustée in the above stated matter.
It is therefore, on this thirteenth day of April, A. D. nineteen hundred and
three, on motion of Elmer King, attorney of the petitloner, ordered that John
M. Mills, Esq., of Morris county, New Jersey, be and he hereby is appointed
trustée of the above-named bankrupt, and that the pénal sum of his bond
be one hundred dollars. And it is further ordered that said trustée forthwith
give notice to ail the creditors of the above-named bankrupt of his said ap-
pointment. Andrew Kirkpatrick, Judge."
Section 24b of the bankrupt act provides as follows:
"The several Circuit Courts of Appeal shall hâve jurisdiction in equity,.
* * * to superintend and revise in matter of law the proceedings of the
several inferior courts of bankruptey within their jurisdiction. Such power
shall be exercised on due notice and pétition by any party aggrieved."
The appellees contend that this court is without jurisdiction to
entertain this appeal, on the ground that the pefitioner hère cannot be
considered a party aggrieved, within the meaning of this provision of
the act. We are disposed, however, to give Hberal construction to the
language used hère, and a doubt in regard to the same should be re-
solved in favor of the petitioner. The petitioner who invokes our juris-
diction under this section, was a judgment créditer of the bankrupt, and
50 scheduled by him in his bankruptey pétition. Whether he may or
may not hereafter be allowed to prove his claim, he bas an interest as
a gênerai creditor in the estate of the bankrupt.
Entertaining jurisdiction, however, we think the court below had
authority under section 44 of the bankrupt act (30 Stat. 557 [U. S.
Comp. St. 1901, p. 3438]) and rule 15 of the gênerai orders in bank
ruptcy (89 Fed. vii, 32 C. C. A. xviii) to make the appointment o:
trustée hère complained of. At the iirst meeting of creditors called
by the référée, on the 2ist day of November, 1899, it appears by the
record that no creditors were présent, and no trustée was appointed,
and that but one creditor, to wit, the said Daniel W. Kleinhaus, bas
proved his debt, and thàt the schedule of the bankrupt disclosed no as-
sets, and that it was ordered by the référée that "until further order
of the court, no trustée be appointed and no other meeting of the cred-
itors be called."
On the 28th day of January, 1902, the référée made the final report
above recited, that "the estate of the bankrupt bas been fully admin-
istered to my satisfaction, and so far as the same bas been referred to
me, it bas been closed, and I herewith file my book of record of pro-
ceedings herein, and ail papers filed with me."
It is true that from this date to March, 1903, when Lindabury filed
his pétition in the court below, a period of more than one year, no fur-
750 129 FEDERAL EEPORTER.
ther proceeding was had. The estate, however, was not technically
closed, because there was no final meeting of creditors or discharge of
a trustée upon the settlement of his accounts. The pétition of Linda-
bury, as it appears in the record and above referred to, must, therefore,
be taken as a moving of the court to exercise its jurisdiction under
section 44 of the bankrupt act, which provides that "creditors of a bank-
rupt estate shall, at their first meeting after their adjudication * * *
appoint one trustée or three trustées of such estate. If the creditors
do not appoint a trustée or trustées, as herein provided, the court shall
do so." We do not see that any lapse of time, or at ail events the time
elapsed in the présent case, can hâve the efïect of taking away this dis-
crétion to appoint a trustée, conferred by the section quoted upon a
court in bankruptcy. The record contains no opinion by the judge
from which we can inform ourselves as to the reasons operating upon
his mind in making the order appointing the trustée, but, in the absence
of anything in the record to impeach the exercise of his discrétion, we
are not at liberty to question the same. There was but one créditer
whose claim had been proved, and who was entitled to notice of such
appointment, and it was upon that creditor's pétition that the appoint-
ment of the trustée was made. We do not think that the fifteenth gên-
erai order in bankruptcy was framed under any view of the meaning
of section 44 inconsistent with the action taken by the court below.
In fact, its reasonable interprétation would seem to authorize the view
hère taken, of the authority of the court in the premises.
The pétition to this court is therefore dismissed.
DUNN et aL v. GANS.
(Circuit Court of Appeals, Third Circuit. May 2, 1904.)
No. 9.
1. Bankruptcy— PKEFEBENCES—StTBRENDES—STATUTES CONSTBTJCTION.
Bankr. Act, Act July 1, 1898, c. 541, § 57g, 30 Stat. 560 [U. S. Comp. St
1901, p. 3444], provides tliat the clalms of creditors wtio bave recelved
préférences shall not be allowed unless such creditors shall surrender
their préférences. Held, that such act should be construed as dealing
with the creditors and not with their claims, so that where a créditer
had recelved a préférence he was not entitled to segregate the bankrupt's
indebtedness according to the notes by which it was evidenced, and apply
the préférence in payment of some of the notes, and prove the others as
separate claims against the bankrupt's estate, without surrenderlng such
préférence.
Appeal from District Court of the United States for the Eastern Dis-
trict of Pennsylvania.
Arthur B. Houseman, for appellants.
Julius C. Levi, for appellee.
Before ACHESON, DALLAS, and GRAY, Circuit Judges.
GRAY, Circuit Judge. On the 26th day of June, 1901, the firm
of Dunn Bros., bankers, of Philadelphia, filed before the référée their
DUNN V. GAN8. 751
claim against the bankrupt estate of E. O. Thompson's Sons, upon two
promissory notes for $2,500 each, the notes being dated january 2,
1901, and January 14, 1901, and made by the bankrupts to the order of
Benjamm Thompson, and discounted by Dunn Bros. On the 2d day
of July, 1902, the trustée of said bankrupts' estate, presented his péti-
tion to the référée in bankruptcy, representing that Dunn Bros., the
said claimants, had received a préférence from the bankrupts, within
four months prior to the filing of the pétition and when the said bank-
rupts were insolvent, and asking that the whole of said claim, as proved
by said claimants, and set forth in the schedule, be disallowed and ex-
punged, unless said claimants should surrender to the petitioner, as
trustée, the préférence received by said claimants, as thereinbefore set
forth. The petitioner also prayed that an order be made and entered,
requiring the claimants to show cause why they should not pay or sur-
render to petitioner, as trustée as aforesaid, the amount of said préf-
érence, so unlawfully received by them, as therein set forth in a certain
schedule or exhibit, marked "Exhibit A," viz. :
Exhibit A.
Dunn Brothers.
Amount of claim filed $ 5,004 62
Amount of preferential payments 10,000 00
Dates and amounts of preferential payments are as foUows :
1901.
January 21. To cash $5,000 00
April 2. ïo cash 2,500 00
April 15. To cash 2,500 00
$10,000 00
No one appearing on behalf of said claimants, this rule was made
absolute. On the 20th of March, 1903, more than eight months there-
after, the said claimants filed their pétition with the référée, averring
that they had instructed their attorneys to take the proper légal proceed-
ings to protect their rights and secure the proper récognition of their
claim, and that they had no f urther notice or knowledge that their claim
had not been reinstated, until a short time before the filing of their péti-
tion. Petitioners therefore prayed that, in view of the fact that there
were just and légal reasons for the allowance of their claim, a rule
should be granted upon the trustée, to show cause why the petitioners
should not be allowed to file an answer, and show cause therein nunc
pro tune. Upon this pétition, the référée, considering the merits of the
case set forth by the pétition, denied the prayer thereof, and, at the
request of the petitioner, certified the matter for review to the District
Court for the Eastern District of Pennsylvania. From the decree of
that court, confirming the report of the référée, this appeal is taken.
Section 57g of the bankrupt act of 1898 is as follows : "The claims
of creditors who hâve received préférences shall not be allowed unless
such creditors shall surrender their préférences." Act July i, 1898,
c. 541, 30 Stat. 560, 561 [U. S. Comp. St. 1901, p. 3444]. The facts
appearing from the record, and pertinent to the considération of this
appeal, are, as follows : At the time pf the making of the two prom-
issory notes by the bankrupts; in favor of the appellants, for $2,500 each,
to wit, on January 2, 1901, and January 14, 1901, said bankrupts were
also indebted to said appellants in the sum of $10,000, rpaking a total
752 129 FEDERAL EEPOKTEB.
indebtedness of $15,000 or upwards. On this indebtedness, the said
bankrupts, after the giving of said promissory notes, which are the sub-
ject of the claim in this appeal, and within four months of the fiUng
of the pétition in bankruptcy, and when the said bankrupts were in-
solvent, made payments as follows: On January 21, 1901, $5,000, on
April 2, 1901, $2,500, and on April 15,1901, $2,500, There can be no
question that thèse were preferential payments under the statute, and
that they diminished, pro tanto, the estàte of the bankrupts distributable
to creditors. The contention of the appellants is, however, that the
debt represented by the two notes of $2,500 ëach, and proved by them
before the référée, were separate and distinct claims, upon which no
preferential payments had been made; or, in other words, that the
payments, aggregating $10,000 above stated, were payments in full, or
in part, upon separate and independent claims, which they are not re-
quired to surrender by section 57g of the bankrupt act, before receiving
allowance of their claim upon said unpaid promissory notes. In sup-
port of this proposition, they contend that this section of the bankrupt
act of 1898 should not be given a meaning différent from that of sec-
tion 23, chapter 176, of the act of March 2, 1867, 14 Stat. 528, which
provides that "any person who * * * has accepted any préférence,
having a reasonable cause to believe that the same was made or given
by the debtor contrary to any provisions of the act of March 2nd, 1867,
siaall not prove the debt or claim on account of which the préférence is
made or given; nor shall he receive any dividend therefrom until he
shall first surrender to the assignée ail property, money, benefit or ad-
vantage received by him under such préférence" and they therefore rely
upon the décisions under the act of 1867 t° support their contention
hère. In this, we cannot concur. If anything is needed to make clear
the meaning of section 57g of the act of 1898, it is the différence be-
tween that section and the section dealing with a similar subject-matter
in the act of 1867. The framers of the latter act must hâve had before
them, and in their minds, the language of the section just quoted from
the act of 1867, and the décisions thereon. If they had meant the same
thing, it is presumed that they would hâve used the same or équivalent
language. The words "shall not prove the debt or claim on account of
which the préférence is given," in the act of 1867, are omitted in that
of 1898, and no équivalent phraseology is substituted therefor. In the
language of Mr. Justice McKenna^ delivering the opinion of the Su-
prême Court, in Pirie v. Chicago Title & Trust Co., 182 U. S. 448, 21
Sup. Ct. 906, 45 L. Ed. 1171, and discussing thèse very sections of the
bankrupt acts of 1867 and 1898, "when the purpose of a prior law is
continued, usually its words are, and an omission of the words implies
an omission of the purpose."
We agrée with the opinion of the court below, that section S7g of
the act of 1898 concems creditors, and not claims. The daim resting
upon the two notes for $2,500 each, for which an allowance is hère
souglit, was, at the time of their several dates, part of a larger in-
debtedness, however evideiiced, upon which subsequently, within four
months of filing the pétition,' and when the bankrupts were insolvent,
the payment of $10,000 was made. The creditors hâve thus received a
préférence, within the meaning of the présent bankrupt act, which
EOBINSON V. BALTIMOEE <fe O. B. CO. 753
bars their right to hâve their daim allowed for the balance of the in-
debtedness, without a surrender of said preferential payments. The
object and purpose of the bankrupt System, being to secure equality
in distribution of the bankrupt's estate among his creditors, it would
violate the spirit as well as the letter of the act, were we to allow the
estate of an insolvent, within the short period mentioned in the act,
prior to the inception of bankruptcy proceedings, to be diminished, by
permitting a créditer, who has received payments out of the insolvent
estate, to retain the same, and at the same time claim a dividend on the
balance, in equality vi^ith other creditors not so favored. We do not
think that any fair construction of section 57g, would permit a creditor
of an insolvent debtor to escape the penalty imposed by that section for
receiving a préférence, by simply dividing the indebtedness into several
amounts or parts, evidenced by several promissory notes. The décision
of this court in the case of Gans v. EUison et al, 114 Fed. 734, 52 C. C.
A. 366, is not inconsistent with the view hère taken. The case In re
Abraham Steers Lumber Co., 112 Fed. 406, 50 C. C. A. 310, much re-
lied upon by appellant, merely décides that "the payment by an in-
solvent debtor, of an existing debt, either in full or in part, does not con-
stitute a préférence as regards a new indebtedness contracted subse-
quently, to which the payment could hâve had no relation." It is not
necessary to discuss, though we hâve carefully considered, ail the cases
cited, which bear upon the question before us.
The decree of the court below is affirmed.
ROBINSON et al. v. BALTIMORE & O. R. CO.
(Circuit Court of Appeals, Fourth Circuit Marcli 14, 1904.)
No. 500.
1. Carbibes— Receiving Goodb— Régulations.
A common carrier has power to make reasonable régulations governlng
the manner and place lu which it will receive such articles as It professes
to carry, and also to change or modlfy such régulations on reasonable
notice to the public.
2. Same— Shipment of Coai,.
Where a carrier had designated a certain siding as the place at which
It would receive coal for transportation, and such siding was not an un-
reasonable place, a shipper was not entltled to compel the carrier to re-
ceive coal from him at another siding, where merchandise other than coal
was received, merely because the place so designated was not so accessi-
ble to such shipper.
8. Same— iNjuNCTioN— Public Nuisance.
Where a shipper of coal refused to deilver coal to the carrier at a sid-
ing designated for that purpose, and. In his endeavor to compel the carrier
to receive coal at another siding, Intended for shippers of other merchan-
dise, blocked such siding with teams for the purpose of obstructing traffio,
and took possession of cars intended for other shippers, and dumped coal
at the siding and station, which resulted in the total suspension of ail
freight business at the station for two days, and he threatened to continue
such acts Indeflnitely until the carrier submitted to his demands, such
acts amounted to a public nuisance, and justlfied relief by injunction.
129 F.--48
734 329 FEDERAL REPORTER.
Appeal from the Circuit Court of the United States for the North-
ern District of West Virginia, at Parkersburg.
W. S. Meredith, for appellants.
John Bassel, for appellee.
Before SIMONTON, Circuit Judge, and MORRIS and McDOW-
ELL,, District Judges.
MORRIS, District Judge. This is an appeal from a decree of the
Circuit Court for the Northern District of West Virginia, dated April
24, 1903, perpetuating an injunction by which the appellants were
inhibited from attempting to ship coal against the consent of the
railroad company in the city of Fairmont, in Marion county, W. Va ,
at a point known as "Walker's Siding," or at any dépôt of the rail-
road company except the dépôt or point provided by the railroad
company for the réception and shipment of coal. The bill was filed
November 20, 1902, by the appellee, the Baltimore & Ohio Railroad
Company, a Maryland corporation, complainant, against the appel-
lants, citizens of West Virginia, défendants, alleging that the rail-
road company maintained at Fairmont, in Marion county, W. Va.,
a station at which it received, stored, and delivered goods and mer-
chandise, except coal, and also had there certain side tracks, known
as "Walker's Siding," wHere it placed cars to receive and dcliver
ail kinds of goods and raerchandise, except coal, and owned and
maintained there a roadway about 60 feet wide, over which shippers
and receivers of goods, except coal, were allowed to drive teams
and wagons in order to deliver and receive goods to and from the
cars on said siding, but that the railroad company had forbidden,
and had given public notice that it forbade, any one to receive or
ship coal from or by the cars at said Walker's Siding, and had desig-
nated another siding in said city of Fairmont, called the "Belt L,ine,"
as the place where it would receive and ship coal, and had so rc-
peatedly notified the appellants. The bill further allèges that the
appellants were not owners or operators of coal mines, and not reg-
ular shippers of coal, but had recently engaged in the business of
hauling coal in wagons tO' Walker's Siding, in order tO put it on the
cars of the railroad company for shipment to various points, that
the appellants had been repeatedly warned not to do so, but they had
forcibly persisted in hauling large quantities of coal to Walker's Sid-
ing, and depositing the same in large quantities on said railroad,
and in forcibly taking possession of, and putting the coal upon, the
cars placed there for other goods and merchandise, and had forci-
bly obstructed and were continuing to obstruct shippers and re-
ceivers of other goods from using the siding, and said other ship-
pers were threatening to bring suits for damage against the plain-
tifif railroad company ; that the appellants had hauled and dumped
large quantities of coal at its freight station, and had blockaded and
stopped up one door of the station, and had blockaded the roadway
by congregating and keeping standing there horses and wagons,
which they refused to remove, and which prevented the railroad
company from either receiving or delivering other goods from its
KOBINSON V. BALTIMORE & O. E. CO. tOO
said freîglit station and Walker's Siding, to the irréparable injury
and damage of the railroad company; that the said appellants for
some tiine prior had been loading and shipping their coal from the
designated point on the Belt Line, and the railroad company had
assigned a certain per cent, of its cars for the use of the said ap-
pellants for shipping their coal, and had notified the appellants that
they were subject to their use. The prayer of the bill was for an
injunction restraining the appellants from obstructing the station,
siding, roadway, and approaches thereto in the manner and by the
means charged in the bill of complaint.
The answers of the appellants denied that the freight station and
siding were maintained by the railroad company for other goods and
merchandise, except coal, and averred that the station, and espe-
cially the side tracks and switches called "Walker's Siding," had been
used and were maintained by the railroad company for the purpose
of receiving and shipping coal in car-load lots, and denied that the
Belt Line was a proper place to be designated by the railroad for
the shipment of coal by the défendants, because it was over a mile
farther in distance from défendants' mines, and the increased cost
of the haul made the shipment of coal by the défendant at that point
unprofitable. The allégations in the bill of complaint that the ap-
pellants had defiantly refused to comply with notice from the rail-
road that coal would not be received for shipment at Walker's Sid-
ing were not really controverted by the answers; and the déposi-
tions fully established that the défendants had resisted the order
with force, and that great disorder had occurred, and an intolérable
confusion and disturbance of the regular business of the station ha<]
resulted from the intentional blocking and obstructing of trafïic by
the appellants in order to force a compliance with their claims. The
appellants' principal justification was that they had before the notice
been in the habit, from time to time, of shipping small quantities of
coal at Walker's Siding. The reply to this by the railroad company
was that on account of the scarcity of other coal in the winter of 1902,
and the rise in price, the quantity shipped at Walker's Siding became so
great that it interfered with other merchandise, and the railroad
company was compelled, in the reasonable régulation of its business,
to provide another place for shipping coal from Fairmont.
Quite recently a case in ail points similar to the case in hand was
heard on appeal in the Eighth Circuit (Harp v. Choctaw, O. & G. R.
R. Co., 125 Fed. 445) ; and, in a careful opinion by Circuit Judge
Thayer, it was held that a railroad company had the right to make
reasonable régulations, applicable alike to ail shippers, as to the man-
ner in which such a commodity as coal would be received for trans-
portation, and could not be held answerable because it refused to
receive coal hauled by wagons to the side tracks of a station, and
that the power to make reasonable régulations as to the manner and
place where the railroad would receive coal for shipment implied
the power to change and modify such régulations from time to time
upori reasonable notice to the public. We do not think it necessary
to attempt to add anything to the reasoning and citation of authori-
ties by which the ruling in that case is supported. The case of the
ioQ 129 FEDERAL REPORTER.
appellants dépends entirely upon their alleged right to compel the
railroad company to receive the appellants' coal at Walker's Siding
because ôther raerchandise was received there. This right cannot
be sustained. It is not shown that the Belt Line, designated by the
railroad company as the place where, on account of the large tem-
porary increase in the shipment of coal, it would receive it, was an
unreasonable place in any way. It was a more distant place for the
appellants, but it may hâve been nearer to others. It is not shown
that, under ail the circumstances, it was not a reasonable provision
for the transportation of coal at Fairmont.
The case stated in the bill of complaint, and established by the
dépositions, was a most proper one for relief by injunction. The
dépositions showed that the persistent efforts of the appellants to
block up the approaches to Walker's Siding with teams, which were
kept there for the purpo.se of obstructing traffic, and the taking pos-
session of cars intended for shippers of other merchandise, and the
dumping of coal at the siding and station, had resulted during two
days in suspending ail freight business at the station, and threatened
to continue indefinitely until the appellants had compelled submis-
sion to their demands. This amounted to a public nuisance, with
immédiate danger of irréparable mischief before the tardiness of the
law could suppress it. In such cases the jurisdiction of courts of
equity to give more adéquate and complète relief by injunction bas
been fully sustained. In re Debs, 158 U. S. 564, 587, 588, 596, 15
Sup. Ct. 900, 39 L. Ed. 1092.
We are of opinion that the decree for a permanent injunction was,
in substance, right, and should be affirmed.
KELLET et al. v. DIAMOND DRILL & MACHINE CO.
(Circuit Court of Appeals, Third Circuit. April 27, 1904)
No.l.
1. Patents— Infringement—Coil Clasps foe Fastbning juelts.
The Jackson patent, No. 433,791, for a coil clasp for fastening belts, etc.,
claim 7, construed, and held infringed on reliearing,
Aclieson, Circuit Judge, dissenting.
On Rehearing. For former opinion, see 123 Fed. 882.
Before ACHESON and DALLAS, Circuit Judges, and BUFFING-
TON, District Judge.
PER CURIAM. Since the reargument, this case has again received
the attentive considération of the court, with the resuit that the judges
respectively adhère to their views as heretofore expressed. 123 Fed.
882, 59 C. C. A. 370. The decree of the court below therefore stands
affirmed upon the opinion of the majority of the court on file.
PAUL STEAM: STSXEM CO. V. PAUL. .757
PAUL STEAM SYSTEM CO. v. PAUL.
(Circuit Court, D. Massachusetts. April 20, 1904.)
No. 1,759.
L CoEPOKATioNS — Notice— Knowledge or Officeks.
A corporation, having the riglit under a contract to purchase and own
patents which should be granted to an inventer, if it stiould elect to do
80 before applications tlierefor were filed, and should pay the costs of
obtaining the same, was charged with notice which required it to make
such élection where its président and some of its directors had knowl-
edge that applications were to be flled by the inventer ; and it was not
necessary that its board of directors, as a body, should be given notice
of the fact.
2. Patents— CoNTEACT Givinq Right to Pubchase— Abandonment.
Where a corporation, having the right under a contract to purchase
and own patents which might be granted to an inventor for a certain
class of inventions, if it should so elect before applications were flled
for such patents, and should pay the cost of obtaining the same — other-
wise the inventor to bave the right to obtain them in his own name and
for his own benefit — made its élection as to certain patents, and paid
the preliminary fées, but afterwards advisedly failed to pay the final
fées, such f allure opéra ted as an abandonment of its élection, and-left
the inventor free to take the patents for his own benefit
3. Pkeliminaby Injunction— Sufficiencv of Gbounds.
It is the practice of the fédéral courts to refuse an injunction pendente
lite unless the case shows beyond reasonable question the necessity for
such intervention.
In Equity.
Coolidge & Hight and Ernest Howard Hunter, for complainant.
Kenyon & Kenyon, for défendant.
HAL,E, District Judge. This is a suit in equity brought by the
complainant to compel the défendant to assign to it United States
letters patent No. 604,335, No. 647,023, and No. 647,024, ail of said
letters patent having been granted to the défendant ; also to assign to
the complainant an application for United States letters patent No.
16,808, filed by said défendant in the Patent Office May 15, 1900, and
now pending there.
The case is now before the court upon a motion for a preliminary
injunction to restrain the défendant from assigning the patents and
the application named in the bill of complaint, and from construct-
ing, using, or selling any of the improvements described therein. The
bill allèges that prior to October 5, 1894, the défendant and one Wil-
liam P. Skifiîngton were owners of certain inventions and improve-
ments relating to steam Systems and devices for removing the water
of condensation from the cylinders of paper drying. machines, and
of certain other inventions relating to the same subject, and that,
being in possession of thèse patents and inventions, thfty caused the
complainant corporation to be incorporated for the purpose of ac-
quiring ail their interest in the said patents and inventions; that on
October 5, 1894, an agreement in writing was entered into by the
% 1. See Corporations, vol. 12, Cent. Dig. §§ 1748, 1754.
758 129 FEDERAL KKPORTER.
complainant corporation with the défendant and with saîd William
P. Skiffington, whereby the complainant corporation acquired ail the
interest of the défendant and of Skiffington in the inventions relating
to said subject. This agreement is made a part of the bill, and sets
eut that the défendant and said SkifKngton, parties of the first part,
are the owners of certain inventions relating to steam heating Sys-
tems and devices for removing the water of condensation from the
cylinders of paper drying machines. The agreement enumerates the
patents, and sets out further that the said défendant "owns or con-
trols certain other inventions relating to steam heating Systems, for
which no applications hâve yet been prepared." The agreement pro-
vides in the first clause that Paul and Skiffington agrée to assign and
transfer to the company "the entire right, title and interest in and
to the above-recited inventions, applications and letters patent, in-
cluding ail the inventions in steam heating Systems and devices for
removing the vi^ater of condensation from the cylinders of paper dry-
ing machines heretofore made and contemplated by the said Andrew
G. Paul." The agreement further provides for the payment in cash
and stock, and makes other provisions, which for the purposes of
this case it is unnecessary to enumerate. The fourth clause of the
agreement is as follows :
"Fourth. The said Andrew G. Paul agrées that if he shall make any fur-
ther improvement or improvements on the above-mentioned inventions while
he is in the employnient of the party of the second part or during a period of
two years, after the terminatlon of such employment, the party of the second
part shall bave the option to purehase or own the said Improvement or im-
provements and patent or patents that may be granted therefor, both In the
United States and in foreign countries, the said party of the second part to
pay in considération for said Improvement or Improvements and patent or
patents merely the expenses connected with the securlng of said United States
and foreign patents. It is understood and agreed that the said party of the
second part shall elect whether it shall purehase the said improvement or im-
provements referred to in this clause and the United States and foreign pat-
ents for the same before any application for a patent bas been filed for said
improvement or improvements in the United States or any foreign country;
and if prior to the flling of any such application In the United States or any
foreign country the party of the second part shall not elect to purehase and
own the said improvement or Improvements, then the said Andrew G. Paul
shall retain title to the said Improvement or Improvements free and clear of
any claim thereto on the part of the party of the second part, and shall hâve
the rIght to apply for and obtain In his own name and for his own beneflt a
patent or patents for any such improvement or improvements both In the
United States and foreign countries."
It appears further from the bill and from the testimony in the case
that prior to May i, 1903, the défendant made certain improvements
on the inventions referred to in the agreement, and particularly im-
provements described in letters patent Nos. 604,335, 647,023, and
647,024, and in an application for a patent filed by the défendant
May 15, 1900,* No. 16,808, and that he now holds for his own use and
in his own n«me the said letters patent and the said application for
letters patent.
The bill further allèges that the complainant fears that défendant
will transfer the letters patent and the application to a third person,
and will cause the complainant irréparable damage, and asks, among
other things, for a temporary injunction restraining the défendant
PAUL STEAM SYSTEM CO. V. PAUL. 759
from assigning the patents and the application, and from constructing,
using, or selling any of the inventions. It will be seen by an exam-
ination of the fourth clause of the agreement, upon which the suit is
brought, that the défendant agreed that if he should make any fur-
ther improvement on the inventions enumerated in the agreement,
while he is in the employment of the Company, or during a period
of two years after the termination of such employment, the Com-
pany should hâve the option to purchase said improvement, and the
patent or patents that may be granted therefor, the company paying
"in considération for said improvement or improvements and patent
or patents merely the expenses connected with the securing of said
United States and foreign patents." The testimony shows that the
improvements and the application concerning which relief is sought
were made during the time set forth in the fourth clause.
The défendant in this suit makes the contention that the claim of
the complainant to the patents and the application enumerated can-
not be sustained, for two reasons : First, because the inventions
claimed in said patents and in said application are not improvements
upon the inventions assigned f» the complainant company in the con-
tract in suit; and, second, because the complainant company, having
full notice of the inventions and of the defendant's intention to file the
application, did not elect to own the inventions, as it was bound to
do under the terms of the fourth clause of the contract of 1894.
Much testimony is ofïered on the questions of law and fact arising
under the first contention, and very able and ample arguments hâve
been submitted on both sides on thèse questions. The court prefers,
however, to address itself first to the considération of the second con-
tention raised by the défendant, namely, did the complainant company
hâve full notice of the inventions set forth in said patents and in said
application, and did the said company hâve full notice of the defend-
ant's intention to file said application, and, having such notice of the
inventions and of the defendant's intention to file the application, did
the complainant company elect to purchase the improvements enu-
merated in said patents and in said application under the terms of said
contract? Under this second contention, for the purposes of the
case, we may assume the admission that the inventions were "im-
provements," within the meaning of the contract.
Upon this motion for a temporary injunction, it is incumbent upon
the complainant, before it can be entitled to the relief sought, to show
that it did exercise its right of élection. The testimony with référence
to the first two patents enumerated in the bill is différent from the tes-
timony on this point in relation to the last-named patent and to the
application No. 16,808. With regard to the last-named patent and
the application, the testimony fails to satisfy the court that the com-
plainant, after having full notice, did elect to purchase the improve-
ments to which this patent and this application relate. In référence
to the application the testimony on this subject is very ample. The
testimony of the défendant and of several directors is distinct that
the complainant did hâve full notice that the patent was to be ap-
plied for, but the testimony does not satisfy us that they elected to
purchase the improvement named in the application. In this peti-
700 129 FEDERAL KEPORÏER.
tion for a. temporary injunction the court does not consider it neces-
sary or advisable to discuss the testimony in détail. It is sufficient
to say that the complainant has not, on this point, met the require-
ments of the law with référence to showing a clear case for the relief
sought. The défendant and his witnesses hâve clearly shown that
the président and certain of the directprs of the corporation knew of
the fact that an appHcation for a patent was to be made. The point
is taken by the complainant that this notice, in order to be conclu-
sive, must hâve been brought home to the directors of the company
in a meeting, and must hâve been acted upon in a formai way, and
must be shown of record. We do not think so. Notice to the acting
officers, or to some of them, was sufficient. Corporations act by
agents. The whole scope of corporation law is defined on principles
of agency. We think that, under the décisions of this court, a notice
of this sort, if brought home to some acting officer or agent of the
corporation, is sufficient. The testimony upon this point with regard
to patent No. 647,024 is of a similar character to that in regard to the
application No. 16,808. The court finds that the corporation did not
elect to purchase the improvement contained in this patent.
With regard to patents No. 604,335 ^"d No. 647,023 a différent
State of facts exists. The corporation did elect to own thèse patents,
and did pay for the filing of the applications and for the preliminary
work of getting the patents, but failed to pay the final fées. Thèse
fées were paid by the défendant, he taking the patents in his own
name. While a more difficult question arises in regard to thèse pat-
ents, we think that in regard to them the complainant has not shown
a right to the remedy sought upon this motion. The testimony in-
dicates that the complainant corporation acted advisedly in regard to
discontinuing their payments, and concluded not to carry out their
élection, and not to receive and take the patents in their own name.
They do not, then, prove a right to the patents under the agreement.
When ail the testimony is taken, and the cause comés before the
court for a final hearing, it may be that the examination and cross-
examination of witnesses may présent the case in a new light. The
practice in the fédéral courts, and especially in this circuit, is to re-
fuse an injunction pendente lite unless the case shows beyond rea-
sonable question the necessity for such intervention of the court.
The practice of this circuit has been, except in clear cases of neces-
sity, to leave a cause untrammeled by injunctions or décrétai orders
until the final hearing.
The court is of the opinion in the case at bar that it is its duty to
deny the temporary injunction restraining the défendant from as-
signing the patents and the application, and from constructing, using,
or selling the described inventions. The motion for temporary in-
junction is denied.
8AMPS0N & MUEDOCK CO. V. 8EAVEK-KADF0ED 00. 7G1
SAMPSON & MDRBOCK CX). v. SBAVER-BADFORD CO.
(Circuit Court, D. Massachusetts. April 22, 1904.)
No. 1,937.
1. Pkeliminart Injtjnction — Discrétion of Couet — Considérations Afpeot-
ING.
On an application for an injunction pendente lite, the court should con-
sider the efEect on both parties of the granting or refusai of the order;
and, where it appears that in either case great or Irréparable injury will
resuit to one or the other, the court will take the course which seems most
conducive to justice to both parties.
2. Copyright— Suit for Infeingement— Peeliminary Injunction.
On an application for a preliminary injunction to restrain the publica-
tion and sale of a city directory alleged to infringe complainant's copy
righted directory, the master to whom the application was referred re-
ported flndings that defendant's directory contained infringing matter ;
that its sale would not interfère to any great extent with the sale of the
copyrighted work, which was published some time previously, but that it
would resuit in large loss to complainant in its gênerai business as pub-
lisher of an annual directory, the amount of which could not be well deter-
mined ; also that defendant's directory was printed and bound and ready
for sale ; that it was différent in size and appearance from complainants,
and not likely to l>e mistaken therefor ; that défendant had expended a
large sum in its préparation, and had a large amount due for advertising
matter therein, which was not collectible until the books had been pub-
lished and sold ; and that its sale would be, to a great extent, lost, if do
layed for any considérable time. HeU, that a preliminary injunctiop
would be refused on condition that défendant should give a bond to secure
the payment of damages that naight be recovered, and should keep an ac-
count of its sales.
In Equity. Suit for infringement of copyright. On motion for
preliminary injunction.
This is a suit in equity by Sampson & Murdook Company, a corporation or-
ganlzed under the gênerai laws of the state of Rhode Island, a citizen of that
State, against Seaver-Radford Company, a corporation organized under the
gênerai laws of the commonwealth of Massachusetts, and a citizen of that
commonwealth, having its usual place of business at Boston. The complainant
is publisher of "The Boston Directory," which contains a clty record, a di-
rectory of the citizens' business directory, a street directory, and a map for the
year commencing July 1, 1903, upon which It has obtained a copyright, as is
alleged in the bill. The défendant corporation has prepared and printed, and,
without the consent of the complainant, is abont to publish and sell, or offier
for sale, a book entitled "The 1904 City Directory of Boston." The bill allèges
that this book of défendant, the 1904 Clty Directory of Boston, is an in-
fringement upon the complainant's publication, the Boston Directory ; that
the defendant's book is a copy, in whole or in part, of the compiled and copy-
righted work of the complainant; that the copying and threatening to pub-
lish and sell defendant's book is in violation of complainant's rights in its
copyrighted work. The cause is now heard upon the complainant's applica-
tion for an interlocutory injunction. Upon this application the cause was re-
ferred by the court to Frédéric Dodge, Esq., as master, who has presented a
very complète report. Upon this report the action of the court is based. The
allégations of the bill in equity referred to in said report are as follows :
"(1) That on or before the 29th day of June, 1903, and prier to the date of
the publication thereof in this or any foreign country, the flrm of Sampson,
Murdock & Co., of Boston, the predecessors in business of your orator, de-
U 2. See Copyrights, vol. 11, Cent. Dig. § 78.
762 129 FEDEEAL KEPOKÏEK.
poslted In the mails wlthin the United States, addressed to the librarian of
Congress, at Washington, District of Columbla, a printed copy of the title
of a certain book, entitled 'The Boston Dlrectory,' containing the city record,
a directory of the citizens' business directory and Street directory, with map
No. XOIX, for the year commenelng July 1, 1903, in order to copyright the
same, and claimed said copyright as authors and proprietors, and that they
deposited in lil^e manner the sum of fifty cents for copyright fées, and that
thereupon, on the llth day of July, 1903, and aiso before the date of publica-
tion in this or any foreign country, deposited in the mails within the United
States, addressed to the librarian of Congress, at Washington, District of
Columbia, two printed copies of such copyright directory, and that the sald
title so deposited was duly recorded by the librarian of Congress upon the
said 29th day of June, 1903, whereby they became entitled to the copyright
upon said book under the laws of the United States.
"(2) That on the Ist day of October, 1903, the said flrm of Sampson, Mur-
dock & Co., for a valuable considération, and by an instrument in writiug, a
copy of which is hereto annexed, conveyed the said copyright to the com-
plalnant herein, and that the complainant by the said conveyance became and
has ever since been and now is the sole owner of said copyright, and of the
exclusive rights thereby conferred under the laws of the United States.
"(3) That the two copies of the said book deposited as above set forth were
printed from type set within the limits of the United States, or from plates
made therefrom.
"(4) That the said Sampson, Murdock & Co. and the complainant, as their
assignée and successor in the business, bave given notice of the said copy-
right by Inserting in the several copies of every édition published on the title
page thereof the copyright notice required by law, in the following words,
to wit: 'Copyright 1903, by Sampson, Murdock & Co.'
"(5) That the défendant corporation, after the recordlng of the title of the
said book, and the depositing of two copies thereof as provided by the laws
of the United States, and within the term of copyright limited, and without
the consent of the proprietors of the said copyright, in writing or otherwise,
has printed, and is about to publlsh and sell, or expose for sale, many copies
of a certain book entitled 'The 1904 City Directory of Boston,' each of which
said copies is in whole or in part a copy of the directory compiled and copy-
righted by the said Sampson, Murdock & Co.
"(6) That such copying and threatenlng to publlsh and sell the same is in
violation of the sole llberty of prlntlng, reprinting, publishing, completing,
copying, executlng, flnishiug, and vending the book duly copyrighted to the
sald Sampson, Murdock & Co., the copyright of which has been assigned by
them, and is now held by your orator as aforesaid."
The master's report is as follows :
"The report of proceedings before me filed in court on Mareh 7, 1904, is
referred to as part of this report. The rullng and order made by me March
3, 1904, as in said report of proceedings appears, havlng been sustalned by the
court on March 7, 1904, the hearing before me under the order of court en-
tered March 3, 1904, was eontinued on March 9, 1904, and on subséquent days
thereafter by adjournment. The défendant produced before me the original
copy for Its proposed directory, according to my said order. It also produced
a bound copy of Its sald proposed directory. Both were submitted to the
examination of the complainant. Having now fully heard the parties and
their évidence and the arguments of their counsel, according to the order of
court of March 3, 1904, I hereby report thereon as below.
"My flndings of fact are as follows :
"(1) The allégations of articles 1-4, inclusive, of the complainant's blll, re-
garding the issuance to It of the copyright upon the book there referred to,
the validity of that copyright, and the complainant's title thereto, are estab-
lished. The évidence in support of them was not contradicted before me by
the défendant. A copy of the complainant's copyrighted directory was in
évidence before me, and is to be referred to in connection herewith.
"(2) The défendant corporation, organized for that purpose in August, 1903,
under the laws of Massachusetts, has prepared and printed, and. without the
consent of the complainant, is about to publish and sell, or offer for sale, a
SAMPSON & MUEDOCK CO. V. 8EAVER-EADFORD CO. 7(>3
book entitled as stated in article 5 of the complalnant's blll ; belng the book,
a copy whereof was produced by the défendant before me, as stated above.
"(3) The defendant's book referred to In the preceding paragraph differs
from the complainant's book in shape, size, style of binding, and typography ;
also in arrangement, In so far as it bas three columns upon each page, in-
stead of two. Thèse différences are such as to prevent it from belng confused
with or mistaken for the complainant's book. They readily appear by in-
spection of the two books produced. The title of the defendant's book differs
from that of the complalnant's book.
"(4) The gênerai dlrectory comprised in the defendant's book contains about
50,000 more names than the correspondlng division of the complainant's book.
The former contains about 318,000, the latter about 268,000, names. When-
ever a person mentioned in this part of the complainant's book has a télé-
phone, the fact is stated, whieh is information not given in the complainant's
book. The business dlrectory comprised in the defendant's book is to a large
extent arranged under différent headings from those used In the correspond-
lng division of the complainant's book. The street dlrectory in the defendant's
book contains several hundred more names than the street dlrectory of the
complainant's book, and contains also much additlonal information with
référence to the streets. No claim of infringement was made as occurring in
the street dlrectory.
"(5) The défendant began Its canvass for names and information to be in-
cluded in its dlrectory on July 7, 1903. This canvass extended over a period
of between four and six months. There were employed in maklng this can-
vass 75 men, in ail, for various lengths of time. The number of days' work
expended on It was more than 2,000. Besides the information obtained by
canvassers, circulars and return postal cards requestlng information were
sent ont to many socletles, associations, and organizatlons of various kinds.
Schedules of employés were also obtained from public departments and em-
ployers of large numbers of persons, such as the Jordan Marsh Company and
the New England Telegraph & Téléphone Company. The original circulars
and some of the original schedules used as above were produced before me.
"(6) The results of the canvass described In the preceding paragraph were
compared by the defendant's employés with the complainant's gênerai dl-
rectory, which was divided Into sections called 'checkbooks' for the purpose.
The names reported by the defendant's eanvassers as obtained by them were
checked off In black pencil upon the pages of thèse checkbooks. Of the names
In the checkbooks then remalnlng unehecked, those considered of sufflcient
importance to be Included In the defendant's book were marked with blue-
pencll dots. The names thus 'blue-dotted' were then written out, each on a
slip of paper, as it appeared in the complalnant's book, with the Information
there gIven ; and thèse slips, sorted by streets and districts, were given to
eanvassers, with instructions to go to the places indicated, make inqulries,
and obtain the information required for a dlrectory regarding the names in-
dicated ; changing the Information on the slip when necessary to conform to
the information obtained, checklng It as correct when found to be correct,
and cancellng it if the person indicated eould not be found. The eanvassers
employed in this work were five in number, and were selected as the best of
the defendant's force of eanvassers. No record, however, was kept by the
défendant showing which of thèse five eanvassers performed the work of set-
tling any particular question. The slips given to the eanvassers were, vrhen
returned by them, either checked as correct or changed as above, pasted in
thelr proper alphabetical order among the other slips containing names and
information brought in by the original eanvassers, upon sheets which form
the copy from which the defendant's gênerai dlrectory was prlnted, and they
thus, except perhaps in a few instances, became incorporated into the de-
fendant's book. A similar use was made of the complalnant's business dl-
rectory, except that after checklng thereon ail names obtained by the de-
fendant's eanvassers, and marking for omission certain other names, ail the
remalnlng names were copied as above upon slips, with the information given
by the complalnant as to each, and ail but about 25% of them sent out to be
verlfied by eanvassers. The 25% not sent out were destroyed. No blue dots
were used to indicate the names to be so copied out, as in the case of the
764 129 FEDERAL REPOETBB,
gênerai dlreetory. The process of copying ont names and Information se-
leeted as above from the complainant's directory was referred to by tlie wit-
nesses as 'drawlng questions,' and the process of verifying the information
so taken ofC upou slips was referred to as 'settling questions.'
"(7) It was asserted by the complainant and denied by the défendant that
the use made as above of the eopyrighted book in compiling the defendant'a
book was unlawful, even though every one of the questions drawn was prop-
erJy verifled before the information taken in it froin the eopyrighted book
was reproduced by the défendant. This is a question of law upon facts about
which there is no dispute, and is dealt with below (page 20, master's report).
It was further contended by the complainant and deuled by the défendant
that, upon the évidence before me, the information taken as above from the
eopyrighted book had not been properly verified before reproduction in the
defendant's book. ïhis is a question of fact, which I next proceed to con-
sider.
"(8) Fictitious Names. For the purpose of enabling it to detect copying, the
complainant inserted in its eopyrighted book certain fictitious or imaginary
names. Three of thèse names appear in the defendant's book, viz. :
" 'Rogers, Robert L. 312 Maverick.' Copyrighted book, p. 1969, in the busi-
ness directory, under 'Boots and Shoes.'
" 'Rogers, Robert L. 312 Maverick E. B.' Defendant's book, p. 1774, in the
business directory, under 'Shoe Dealers.'
" 'Jones, G. W. 1650 Dorchester Av.' Copyrighted book, p. 2051, in the busi-
ness directory, under 'Hairdressers.'
" 'Jones, G. W. 1650 Dorchester Av. Dor.' Defendant's book, p. 1613, in the
business directory, under 'Barbers.'
"(Neither of tiie names is in elther gênerai directory.)
" 'McKlnley Hall, 24 W. Ooncord.' Copyrighted book, p. 66, under 'Public
Offices, Halls, Blocks, &c.'
" 'McKlnley Hall, 24 W. Concord St' Defendant's book, p. 173, under 'Of-
fice Buildings, Halls, &c.'
"There were ten such names, in ail, in the copyrighted book, three of which
were in the Street directory. The président of the complainant cùmpany, who
testiiîed in regard to them, was asked on cross-examination to give the other
se%'en fictitious names, and to state whether or not they also appeared in the
defendant's book. He declined to do so, and I ruled that he need not do so
unless he chose. To this ruling the défendant excepted. There is no Mc-
Klnley Hall in Boston, there are no such persons as the fictitious names repre-
sent, and there are no such numbers on the streets referred to. The sheets
from which the defendant's book was printed show that the matter appearing
in the book about Robert L. Rogers and McKinley Hall came in each case
from a question on slip checked as if sent out for vérification and found cor-
rect, and that what appears about G. W. Jones was written upon the sheet,
instead of being on a slip. There was testimony teiiding to show that it was
written upon the sheet from a checked slip brought in after the sheets had
been made up. Whether no question was ever really drawn, or noue ever
really sent out to be settled, or none ever really settled, the resuit is the same,
viz., that in thèse three instances matter from the copyrighted book was
transferred to the defendant's book without independent vérification.
"(9) Names of Persons Deeeased. The copyrighted book was published July
13, 1903. The work of compiling it was therefore substantially completed
before the defendant's canvass began, on July 7, 1903 (paragraph 5). There
appear in the defendant's book names of persons given by the copyrighted
book, but who are shown by the city records to hâve died either before the
defendant's canvass began, or so soon thereafter that no question slips re-
garding them, drawn from the copyrighted book, could hâve been checked and
returned as correct if the inquiry necessary to a proper settlement had been
really made. Thèse are: Suminsby, Bodney F., died June 10, 1903; Fitz-
gerald, William J., died July 1, 1903; Dexter, George, died May 28, 1903
Murphy, Daniel J., died June 1, 1903; Gerrish, Geo. H., died May SI, 1903
Gearin, Stephen J., died May 27, 1903 ; Parker, Edward J., died July 3, 1903
Phillips, Charles P., died June 18, 1903; Tully, James, died July 2, 1903
Rosenthal, Joseph, died May 7, 1903. (The widows of two of thèse persons.
SAMPSON & MDEDOCK CO. V. SEATER-EADFORD 00. 786
Sumlnsby and Rosenthal, appear as such In the defendant's book.) In each
of thèse cases, however, the question slip formlng part of the copy from whlch
the defendant's book was printed was produeed, and found to bear the cheek
Indlcating that it had been settled as correct Other instances in whlch the
name of a person deceased before its canvass began appear in the defendant's
book are referred to hereafter ; the évidence belng, as to them, that the slip
from which the name was printed was one brought In by an original can-
vasser, and not one sent out as a question drawn from the copyrighted book
to be settled.
"(10) Errors Reproduced. In the following cases errors in the copyrighted
book reappear in the defendant's book, although the question slip sent out is
found, on the copy sent to the printer, checked as correct
" 'Abbot, Samuel, engineer, bds. 27 High Shsn.'
" 'Abbott, Samuel, engineer, bds. 27 High Chsn.'
"Both thèse names are in the gênerai directory of the copyrighted book.
The defendant's book repeats the latter name and both addresses as given,
although the former name is changed to Samuel S.
" 'Adamson. Thomas W., grocer, 1825 Dorchester Av.' In the business di-
rectory this number is 1847. The defendant's gênerai and business direetories
differ in the same way, though a question was drawn on each, and checked
up as correct.
" 'Andersen, Chas. A., salesman, 651 Wash.' This appears in the Gen. Dlr.,
both books. The right name is William C, which both books insert in Its
proper place, with the résidence given as Wakefield. The défendant gives
Chas. A.'s résidence as Melrose, the copyrighted book giving It at Wakefield.
" 'Austin, George M. & Son.' Copyrighted Gen.
" 'Austin, G. M. & Sons.' Do Bus., 'Provisions.'
"The same dlscrepancy between Gen. and Bus., under 'Provisions,' occurs
in the defendant's book. Defendant's Bus. bas also 'Geo. M. and Son' under
'Poultry.'
" 'Ballardville Mllls.' So in both books. Gen. Dir. The correct spelling
le 'Ballardvale.'
" 'Beane, William M. Mrs. & Co.' Copyrighted Gen.
" 'Beane, W. M. Mrs.' (Do Bus.)
"The same dlscrepancy between the Gen. and Bus. (under 'Fancy Goods')
appears in defendant's book.
" 'Beckwlth, Leslie A.' Copyrighted Gen.
"The name so appears in defendant's Gen. The right name is 'Leslie W.'
(The défendant also bas 'L. W. Beckwlth.')
" 'Bullard, George P.'
"Both books (Gen.) give him as président, etc., of 'Bastern Expanding Métal
Co.' The correct word Is 'Expanded.'
"'Oapen, Walter.' Copyrighted Bus.
"The true name is 'G. Walter,' and is so given In copyrighted Gen. De-
fendant's Gen. omits the name altogetber. Its Bus. gives it without the 'G.'
" 'Enneking, John J. 174 Tremont' Copyrighted Bus.
"So in defendant's Bus. under 'Artists.' The correct number Is 175a. The
copyrighted Gen. has the name ; the defendant's Gen., not
" 'Fletcher, Howard F.' Copyrighted Gen.
"Same in defendant's Gen. The right name Is 'Howard S. Fleldlng, John B.'
"Copyrighted Gen. gives the résidence as SomervlUe, whereas it should be
Malden. Defendant's Gen. does the same.
" 'Gallivan, Timothy.' Copyrighted Gen.
"Same in defendant's Gen. The right name is 'Galvln,' and this défendant
also has.
" 'Gray, Robert B. bds. 81 Arlington.' Copyrighted Gen.
"Same in defendant's Gen. The right number Is 8. There is no 81 on the
rtreet.
" 'Gibbs, Carrie A.' Copyrighted Gen.
" 'Gibbs, Carrie E.' Do Bus.
"The same dlscrepancy exista between defendant's Gen. and BuOi
" -Guild, Willard G.' Gen., both books.
"The right name is 'Willis G.'
" 'Johnson, Adolph 0.'
766 129 FEDERAL REPORTER.
"The copyrighted Bus., under grocers, gives hls place of business '498 Sum-
mer St' This, as appears by copyrighted Gen., Is hls résidence, but not hls
store, whlch is 487, same street. Defendant's Bus. repeats 498 as hls store.
"'Koritzky, Simon.' Copyrighted Gen.
" 'Kovitzky, Simon.' Do Bus., under 'Grocers.'
"Same dlscrepancy between defendant's Gen. and Bus, The defendant's
Gen. has some Information not In copyrighted book.
" 'Levy, Lewis I. & Son.' Copyrighted Gen.
" 'Levy, L. I.' Do Bus., 'Fancy Goods.'
"Same dlscrepancy between defendant's Gen. and Bua.
" 'Milton Bradley Co.' Copyrighted Gen.
" 'Bradley Milton Co.' Do Bus., 'School Supplies.'
"Same dlscrepancy between defendant's Gen. and Bus. The flrst name Is
the right one.
" 'Morrell, George C. 40 State St'
"Under lawyers in Bus. of both books. He is not a lawyer, although copy-
righted Gen. erroneously descrlbes hlm as such.
" 'Patten, F, R. Mrs.'
"Her lunchroom is glven in Bus. of both books, under 'Restaurants,' as
at '2280 Dorchester Av.,' whlch is wrong accordlng to the Gen. of both books.
" 'Rlchardson, Earl B.' Copyrighted Gen.
"Same in defendant's Gen. The right name is 'H. Earl,' whlch both books
(Gen.) also hâve.
" 'Ryan, George T.' Copyrighted Gen.
" 'Ryan, George F.' Do Bus., 'Florlsts.'
"The same dlscrepancy Is found between defendant's Gen. and Bus.
" 'Trautmann, Louis H., salesman 178 Tremont, rm. 4, bds. 19 Wabeno,
Rox.'
" 'Trotman, Louis H., salesman, 178 Tremont, rm. 4.'
"Both thèse names appear in the copyrighted gênerai dlrectory. They ap-
pear In the same manner In the defendant's gênerai dlrectory, except that
the défendant spells the flrst name 'Trautman, Lewis H.'
" 'Waehuset Thread Co.' Copyrighted Gen.
"The name appears In the same way In defendant's Gen. The correct
spelllng is 'Wachusett'
" 'Watson, George.'
"Both business dlrectorles, under 'Accountants,' give hls address as '53
State St., room 705.' The right room Is 605, and It sO appears In the Gen.
of both books.
" 'Weddick, Frank.'
"The Gen. of both books give the surname spelled thus, with the same In-
formation, but the défendant has Frank L. instead of Frank. The correct
spelllng is 'Wedlck,' and this the défendant has also; the name spelled wltb
one 'd' appearing to hâve been obtalned on the original canvass, and as
'P''rank,' not 'Frank L.'
" 'Wlggin, Henry D., Jr.'
"The Gen, of both books has this name, and both give the résidence at Med-
ford. Tlie man left Medford in April, 1903.
"I omit about tvirenty instances havlng a slmllar tendency to show Imper-
fect settllng of question slips, but In whlch there seems to be more posslbll-
ity that a reasonably careful canvasser might bave Independently fallen into
the error reproduced. As to nearly half of thèse, also, they are names of
nurses, whlch both parties may, perhaps, hâve got at secondhand from a list
of nurses.
"(11) It will appear from the cases cited on page 20 .that if the défendant
is permitted at ail, by the law of copyright, to reproduce in its own book in-
formation based upon the copyrighted book, accordlng to the above-described
method of drawing and settllng questions, it is only upon condition that it
uses the question slips for no other purpose than to direct Its canvassers to
the sources of information, and there obtalns the information reproduced,
by its own labor, to the same extent as it would hâve done without any ques-
tion slip at ail. The défendant employed in superintending the work of pre-
paring its book Mr. George M. Hyde and Mr. Frederick H. Radford, two
SAMPSON & MUEDOCK CO. V. SEAVEB-RADFOKD CO. 767
persons of large expérience In the business of publishlng dlrectorles; both
baving been employed for many years by the complalnant or îts predecessors,
and afterwards, in 1902, by a concern called the Cl^ Directory Company.
While connected with the City Directory Company, Mr. Hyde had consulted
counsel regarding the legality of 'drawlng questions' from existing copy-
righted directories. No counsel were separately consulted upon this point
by the défendant with spécial référence to its canvass. Both Hyde and Rad-
ford testified before me (the testlmony being objected to by the complalnant,
and admitted subject to its exception) that they believed they had a perfect
rlght to follow this method of drawlng questions described above. I flnd that
they did so believe. The advlce from counsel received by Hyde as above was
that he had a perfect right to draw off every name and verify It. The fact
that Hyde had received such advlce was known to Radford and Seaver. The
persons who drew the questions for the defendant's directory upon the slips
referred to, or many of them, testified before me, as did also ail the canvas-
sers who settled them, and many of the persons who afterwards inserted
them in the copy from whlch the defendant's book was prlnted. The testl-
mony given by ail thèse persons was that, throughout the préparation of
the defendant's book, fréquent, reiterated, and emphatie instructions were
given to ail its employés by Mr. Hyde and Mr. Radford, also by Mr. Seaver,
the président, to make no use of the copyrighted book except for the pur-
pose of drawlng questions from it ; also that those instructions were obeyed.
It was agreed that ail the defendant's employés. If called, would testify to
the same efCect. (See the stipulation flled before me March 25, 1904.) De-
fendant employed, in ail, between fifty and sixty office assistants, and, in-
eluding the flve canvassers already mentioned, thirty men in ail were em-
ployed in settling questions, who did, in ail, 337 days' work. My conclusion,
however, must be, from the facts above found in paragraphs 8, 9, and 10,
that the instructions so given were not always obeyed. It is, of course, possi-
ble that in some of the instances cited in paragraphs 9 and 10 the canvasser
supposed to 'settle' the questions used the slip taken from the copyrighted
book only in the manner described at the beginning of this paragraph ; that
the information thereby obtained by him was wrong, and, in the cases cited
under paragraph 10, wrong in the same way that the information taken from
the copyrighted book was wrong. It does not seem to be possible that ail
the instances referred to can be so accounted for. The presumption arising
from facts shown, in my opinion, calls upon the défendant to account for
each instance by speciflc proof, and cannot be disposed of by gênerai testl-
mony that the instructions referred to were given and followed. I therefore
find that copyrighted information was, upon any view of the law, uniawfully
transferred to the defendant's book in ail the instances referred to.
"(12) The défendant contended that the évidence before me showed Its
original canvass to bave been made without any use whatever of the copy-
righted book, and also to bave been such as to correct a very large propor-
tion of the mistakes occurring in that book. I flnd that in the foUowing
instances mistakes occurring in the copyrighted book hâve been reproduced
in the defendant's book, not by means of question slips drawn from the copy-
righted book, but by means of slips brought in by the defendant's original
canvassers, and made part of the copy from which defendant's book was
printed.
" 'Bauer, John W.' This name appears in the gênerai directory of both
books. The correct name is 'John N.' The defendant's book gives bis rési-
dence, which is not in the copyrighted book. The reproduction of the error,
however, is not explained.
" 'Dana, Samuel L.' The résidence Is given In both books (gênerai direc-
tory) as '44 Peter Parley Road.' The correct résidence Is '49.' (The copyrighted
book bas 'S. L.,' whereas the défendant bas 'Samuel,' in the business direc-
tory.
" 'Floyd, Bzra B.' The name is so given in the gênerai directory of both
books. The correct name Is 'Eugène B.' The défendant gives the Company
whereof Mr. Floyd was treasurer — Glen Almond Mica Mining Company —
which the copyrighted book does not.
" 'Langerfeld, John P.' Both books, in their business d'irectories, under
'Bakers,' give his address as '98 Boston.' That address bas been wrong sinee
76S 129 FEDER.^L REPORTER.
February, 1903, when he left it, The défendant also glves two other ad-
dresses, which the copyrighted book bas not.
" 'Starbard, Nathaniel Wi' The riame eo appears in the Gen. of both
books. The corr^jct spelllng is 'Starbird.'
" 'Wlllson, Alexander E;' Both books (Gen.) give bis business address as
'28 School St. Room 56.' The correct room number is '59.' The défendant
gives the mlddle initial 'W,' in place of 'E.'
"I flnd also that the follow-ing names, also incorporated in the defendant's
book by means of original canvassers' slips, are names of persons wlio bad
died since the insertion of , their names in the copyrighted book, but before
the defendant's canvass, viz. : Gensler, William, dled July 8, 1903; Léon-
ard, Frank A., died June 22, 1903; Morrison, George 6., died July 3, 1903;
Ramsay, William H., died May 28, 1903; Scully, Charles H., dled June 13
1903 ; Sproul, Charles W., died June 17, 1903 ; Wood, James F., dic-d Juue
28, 1903. One of the defendant's canvassers testifled to having personally
canvassed the apartment hôtel where Frank A. Léonard last resided, accord-
ing to the copyrighted book, but not to the spécifie information he obtained
(if any) regarding this name. He did testify that, such information as he
got, he got there. Testlmony was Introduced by the complainant tending
to show that Leonard's widow moved away from the hôtel before the date
of this canvasser's alleged visit. In the other instances the presumption
arlsing is rebutted only by the gênerai testimony of the defendant's employés
that they obeyed the insti-uctions given them to make no use of the copy-
righted book in their canvass. I find, however, that in the case of William
Gensler a sign vcas found by one of the defendant's canvassers, on March
17, 1904, at the said Gensler's former place of business, reading, 'William
Gensler, Hairdresser.' In the case of the name of William H. Ramsay, bar-
ber, bis name was found upon a doorplate at his address on the same date,
but ail that was ou the door plate was 'W. H. Ramsay.'
"AVhat Is said above applies to the name 'Alario Joseph,' which appears
in both business directorles — under 'Hairdressers' in the copyrighted book,
under 'Barbers' in the defendant's. He left the address given July 4, 1903.
"(13) I find, upon the indications afforded by the instances cited in the
preceding paragraph, that there bas been some copying of names or informa-
tion contained in the copyrighted book, independently of questions drawn
from it or the settlement of such questions. I am unable to flnd, upon any
évidence before me, whether, in the Instances above given, the original can-
vassers, or the persons who transferred their slips to the copy for the print-
ers, or who else, were responsible in thèse cases. Otherwise than as appears
in the instances referred to, I find no évidence of copying independently of
drawing questions as explained above (paragraph 6).
"(14) I also flnd some reason to believe from the indications afforded by
the defendant's 'checkbooks' (paragraph 6) that its original canvass was not
as fuU and complète as mlgbt bave been expected. The total number of
copyrighted names checked as not obtained by canvassers bas not been
counted by either side, and is only to be ascertalned by estimate. The prési-
dent of the défendant company estimated it at one-quarter. Neither bas the
number of copyrighted names blue-dotted been counted, and this also can
only be estimated. The same witness estimated it at one-quarter of the
names not obtained by canvassers, which would be 6.25 per cent, of the whole.
Mr. Hyde estimated it for the général directory at 22 per page, which would
be, in ail, 41,162 for the whole number. The estimate on behalf of complain-
ant is 27.2 per page, or 50,891 for the whole. If either of the two latter esti-
mâtes, which seem to be more likely to approximate the truth than the for-
mer, be accepted, the number of copyrighted names not returned by the de-
fendant's original canvassers, which must bave been considerably larger still,
is not easily accounted for consistently with the theory of a thorough orig-
inal canvass by the défendant. Other facts leadlng to the same resuit are
that a large number of prominent and well-known names in the copyrighted
gênerai directory and a large proportion of such headings in the copyrighted
business directory, as 'Masters in Chancery,' 'Hospitals and Dispensaries,'
'Piano Tuners,' 'Clubs,' 'Artists,' are shown by the checkbooks not to bave been
obtained by the original canvass. The total number of names in the défend-
SAMPSON & MURDOCK 00. V. SEAVEK-EADFOKD CO. 769
iint's gênerai dlrectory being 318,000, as above found (paragraph 4), If Mr.
Hyde's estimate of the number o£ names blue-dotted be dedueted, there will b'e
left 276,838, as the number of those obtained by the défendant independently
of the use of questions drawn. If the complainant's estimate of the blue-
dotted names be dedueted, the remainder will be 267,109.
"(15) Not counting the three flctltlous names (paragraph 8), there hâve
been indicated above 53 instances which are found to show copying from the
copyrighted book. For the purposes of the hearing before me, about 6(X) cases
of error, omission, or discrepancy in the copyrighted book, being about one-
fifth of one per cent of ail the défendants names, were compared on behalf
of the complainant with the defendant's book. About 8.8 per cent, there-
fore, of the entire number compared, are found to be reproduced by the de-
fendant. Thirty-nine of the instances referred to are cases where questions
were drawn upon blue-dotted names, or 6.6 per cent, of the whole number
examined. If the blue-dotted names be taken as numbering 25 per page,
which is 16% per cent of ail the copyrighted names, and if ail the questions
drawn on blue-dotted names be assumed to show copying in the same pro-
portion as the number examined, the percentage of ail the copyrighted names
improperly reproduced by blue-dotting would be 1.10 per cent As above
found, however, the process of blue-dotting and drawing questions was not
the method of reproducing the copyrighted matter In ail the cases where it
bas been reproduced. In 14 instances (paragraph 12) it must be ascribed to
some other part of the work of préparation. The défendant requests the
finding that in the case of ail the 600 names examined, but not put in évidence
by the complainant, errors in the copyrighted book were found not to bave
been reproduced, or else to hâve been corrected by the défendant I flnd
that the défendant corrected the complainant's errors in some of thèse cases,
but I do not think that any further finding regardlng such names is war-
ranted by the évidence.
"(16) The complainant bas remaining on hand 195 copies of its copyrighted
book. The priée at which they are regularly sold is $6. It may reasonably
expect to sell 75 more copies ; one reason why the number is not greater
being that it expects. In regular course, to publish a 1904 directory in July.
If, therefore, the only damage to the complainant by publication of the de-
fendant's book is the loss of sale of copies of its copyrighted book, such dam-
age will not exceed $450. The damages to the complainant's business, how-
ever, which will resuit from the publication of a rival directory such as the
defendant's book, will be much greater, and will be of such a nature that
they cannot be estimated at law, and will be in that sensé irréparable.
"(17) The défendant bas expended, in eompiling, printing, and binding its
proposed directory, between $35,000 and $40,000. The issue of the injunetioii
prayed for by the complainant will probably resuit In the total loss of this
investment. The advertisements inserted in the book bave been inserted
under a contract providing for payment when the book is published, and the
total amount so paid for advertising is a good many thousand dollars. The
book, if published, will be of substantial value.
"(18) The galley proof slip annexed to the third aflSdavit of Charles D.
Marcy, flled in court February 29, 1904, is found not to be a part of the de-
fendant's book as printed. I flnd, that pages 1617 and 1618, being the pages
of the defendant's book whereon the matter appearlng on said galley proof
slip would bave appeared in the book, were, as those pages appeared in the
printed proof sheets before me, printed on différent type from the remain-
ing proof sheets, and inserted by pasting, in the place of other pages re
moved, among the proof sheets submitted. I flnd, however, upon the évidence
of the printer who set it up, calied as a witness by the complainant, that be
was directed by défendant to print no further from the galley proof slip at
some tlme prior to the filing of the bill of eomplaint. Pages 1617 and 1618,
as they appear flnally in the defendant's book, omit two of the names re-
ferred to in Marcy's afiBdavit No. 3, and correct the errors pointed out by said
afBdavit in the four remaining instances.
"(19) Except as set forth in this report, I flnd no reason to question the
good faith or honest intention of any person concerned in the enterprise of
preparing the defendant's book.
129 F.— 49
770 129 FEDERAL REPORTER.
"My conclusions of law are as follows :
"(1) The question referred to above In par. 7, viz., 'Is It lawful, In the prép-
aration of a directory, to copy, verify, clieclî, and correct copyrighted infor-
mation, witti intent to reproduce it, save as corrected, in a competing book?'
is one wtiich does not appear to be settled by any express and controlling
décision. The Bnglish cases (Kelly v. Morris, L. R. 1 Eq. 69T: Morris v.
Aslibee, L. R. 7 Bq. 34; Morris v. Wright, L. R. 5 Ch. 279; MofCatt v. GUI,
86 Law Times R. 465) and the following in the United States (Banks v. Mc-
Divitt, 13 Blatchf. 163, Fed. Cas. No. 961 ; List v. Keller [C. C] 30 Fed. 772 ;
E. Thompson Co. v. American, etc., Co., 122 Fed. 924, 59 C. C. A. 148, 62 L.
B. A. 607 ; OoIIlery Co. v. Ewald [C. C] 126 Fed. 843) seem to be those most
closely relating to the point to be decided. It does not appear, therefore, to
be a clearly settled question of law. My own opinion (of course, submltted
with diffldence, under the clrcumstauces) is that the question shouid be au-
swered in the négative. My conclusion of law, therefore, is that none of the
Information Incorporated In the defendant's book by means of questions
drawn as above, whether settled or not, can be published wlthout violatlng
the complalnant's copyright.
"(2) The Infringement found Is clear in law and substantial In amount,
whatever be the décision of the question referred to above under 1.
"The validlty of the complalnant's copyright and its Infringement as above
by the defendant's proposed book being established, the complalnant is en-
tltled, upon gênerai principles, to hâve the publication of the book enjolned
pendlng further proceedings, at least as to so much of the work as is a plain
infringement, and such injunction is granted in the ordinary course. It Is,
however, granted or refused in every case according to the discrétion of the
court. The facts which may be supposed to guide the court in exercising
such discrétion bave been found above."
Alexander P. Browne, for complainant.
Gaston, Snow & Saltonstall and Thomas Hunt, for défendant.
HALF, District Judge (after stating the facts). In this case, after a
full heaiiiig of the parties and their witnesses, the master has made an
ample, detailed, and complète report, embodying a careful analysis
of the testimony. We hâve copied this report in full, as it, with the bill
in equity, constitutes the record ; and so we need not recite its détails.
The master has found that the damage to the complainant, by publi-
cation of the defendant's book, will be, in the loss of the sale of its
copyrighted book, a sum not exceeding $450. He fiinds further that the
damages to the complalnant's business which will resuit from the publi-
cation of a rival directory, such as the defendant's book, will be much
greater, and will be of such a nature that they cannot be estimated at
law, and will be in that sensé irréparable. He further finds that the
défendant has expended in compiling, printing, and binding its proposed
directory between $35,000 and $40,000; that the issue of the injunc-
tion prayed for by the complainant will probably resuit in the total
loss of this investment; that the advertisements inserted in the book
hâve been inserted under a contract providing for payment when the
book is published, and the total amount so paid for advertising is
many thousand dollars; that the book, if published, will be of substan-
tial value. He states the leading question of law which arises in the
case, namely : Is it lawful, in the préparation of a directory, to copy,
verify, check, and correct copyrighted information, with intent to re-
produce it, save as corrected, in a competing book? And he says that
this question is one which does not appear to be settled by any express
and controlling décision, He then refers to the leading English and
SAMPSOX & MUKDOCK CO. V. SEAVEE-RADFOED CO. 771
American cases, and concludes that, in his opinion, none of the informa-
tion incorporated in the defendant's book by means of "drawing ques-
tions," whether settled or not, can be published without violating the
complainant's copyright. Fie further finds that there has been an in-
fringement, whatever may be the décision on the above question.
Since the présentation of this report, our attention is called to Dun
V. International Mercantile Agency (C. C.) 127 Fed. 173, a rase just de-
cided, in which Judge Lacombe says :
"It îs not dlsputed that défendant made use of complainant's book in pre-
parins its own publications. Thanks to siich use, it discovered the names
of individuals, firms, and corporations engagea in business, and therefore dé-
sirable for inclusion in its book, -which names had apparently not been dis-
covered by the investigations of defendant's own canvassers, nor found in
some other publication. The names thus obtained from complainant's book
aggregated certainly hundreds, possibly thousands. Was thia an unfalr use
of the complainant's book? Had this question been presented to this court
a year ago, the answer might not improbably hâve been in the affirmative.
Such use of another's compilation was approved in Moffatt v. Gill, 86 Law
Times Rep. 405, but that décision was not controUing hère, and for reasons
assigned in Colliery Engineering Oo. v. Ewald (C. 0., Oct. 9, 1903) 126 Fed.
843, it was thought that its conclusions were harsh and inéquitable. Never-
theless, propositions which work hardship to the individual are sometimes
sustained on grounds of public policy, and the opinion of the Court of Ap-
peals of this Circuit In Thompson Co. v. American Lawbook Co. (July, 1903)
122 Fed. 922 [59 C. C. A. 148, 62 L. R. A. 607], expressly approves the doctrine
of MofCatt V. Gill. In view of that décision, which Is, of course, controlling
hère, injunction cannot be granted upon the undisputed facts."
It will be seen that this case, which is the latest American authority,
approves and confirms the doctrine of Moffatt v. Gill, in which the court
said:
"You cannot, where another man has compiled a directory, simply take
Uis sheets, and reprint them as your own ; but you are entitled, taking the
sheets with you, to go and see whether the exlsting facts concur with the
description in the sheets, and, if you do that, you may publish the resuit as
your own."
See, aiso, Pilce v. Nicholas L. R. 5 Ch. 251, and other cases cited
and commented on in Coppinger on Copyrights (3d Ed.) p. 201.
It seems to us that there is strong reason for holding that the publish-
er of a new directory has a right to take an old directory, and be guided
by it to original sources of information, and that if, so guided, he goes
to those sources of information and obtains facts, he may publish those
facts, even though they consist of names and addresses which are identi-
cal with those published by the old directory. But upon this motion for
a temporary injunction it is not necessary, nor fitting, for the court
to pass upon this question. The master has wisely reported that it is
not conclusively settled. We hâve pointed out also that he has found
that there has been infringement, and that the damage to the complain-
ant from the publication of the defendant's work may be, in a sensé,
irréparable. But thèse findings, if sustained by the court, do not neces-
sarily lead us to the conclusion that an unlimited intcrlocutory injunc-
tion should be granted. We hâve pointed out also the finding with
référence to the effect upon the défendant if the injunction is granted
as prayed for.
It is the business of a court of equity to inquire not only whether seri-
ons and irréparable damage is to be donc to the complainant if the tem-
772 129 FEDERAL EEPOETKB.
porary înjunction îs refused, but also to inquire whether or not the in-
jury donc to the défendant by the granting of an injunction will be dis-
proportionate to the benefit derived by the complainant. In Hanson v.
Jaccard Jewelry Co. (C. C.) 32 Fed. 202, the court said :
"On an application for an injunction pending suit, it is proper for the
court to consider the harm that would be done to the complainant by refus-
ing such an order, in comparison with the damage that might be sustained
by the défendant In conséquence of granting the same."
In Trow Directory, etc., Co. v. Boyd (C. C.) 97 Fed. 586, Judge La-
combe said :
"Nevertheless an Injunction to the full extent prayed for by the complain-
ant would, If issued now, be practlcally a judgment in advance of trial, which
would work Irréparable Injury to the défendant, while it seems as If the
complainant mlght be Bufficlently protected by a bond and an aecount of
sales."
In West Publishing Co. v. Lawyers' Co-op. Pub. Co. (C. C.) 53 Fed.
265, Judge Coxe said:
"It is the duty of the court in ail thèse cases to take into considération
the situation of both parties, and not to issue the writ except in the plaln-
est cases, where the resuit will be irréparable Injury to défendant, without
corresponding advantage to plaintiff."
In Sargent v. Seagrave, 2 Curt. 553, Fed. Cas. No. 12,365, Judge
Curtis said:
"The court looks to the particular clrcumstances to see what degree of In-
convenience would be occasioned to one party or the other by granting or
withholdlng the Injunction."
In Spottswoode v. Clarke, 2 Phil. Ch. 157, the chancellor said:
"Hère is a publication whlch, if not issued thls month, wlU lose a great
part of its sale for the ensulng year. If you restrain the party from selling
immediately, you probably make it Impossible for him to selî at ail. You
take property out of hls pocket and give it to nobody. In such a case, if
the plaintiff Is rlght, the court bas some meaus, at least, of indemnlfying
him by making défendant keep an aecount, whereas, if the défendant be right,
and he is restrained, it is utterly impossible to give him compensation for
the loss he will hâve sustained. And the efCect of the order in that event
will be to commit a great and Irrémédiable Injury."
Dron on Copyright, p. 516, says:
"The question of granting a prellminary injunction Is affected by many
considérations. It dépends chiefly on the extent of the doubt as to the va-
lidity of the copyright, and whether it has been infringed, the damage which
wIU be sustained by the plaintiff If the injunction Is wlthheld, and the in-
jury that wUl be done to the défendant If It is granted. The court will ex-
ercise its discrétion in following that course which appears most conduciye
to justice to both parties."
See, also, Coppinger on Copyright (3d Ed.) p. 269.
In Ladd v. Oxnard (C. C.) 75 Fed. 703, Judge Putnam, in this circuit,
has fully considered the subject which is now before us. At page 732
he considers the question of what loss is "irréparable," within the mean-
ing of the law. He cities Parker v. Woolen Co., 2 Black, 545, 17 L.
Ed. 333, where the word "irréparable" is held to cover cases "where the
loss of health, the loss of trade, the destruction of the means of subsist-
ence, or the ruin of the property must ensue." In the case last cited.
SAMPSON <fc MUEDOCK CO ■>- SEAVER-EADFORD CO. (io
Mr. Justice Swayne, for the Suprême Court, gives further définition
of the meaning of the court in the use of the word "irréparable," and
quotes the old doctrine that the case must be "one of strong and imperi-
ous necessity." In the matter which Judge Putnam had before him in
Ladd V. Oxnard, he found that a large proportion of the copyrighted
book was plagarized, and that the plaintifï had made out a very strong
and striking case ; that it did not appear that the défendants had acted
in good faith ; and that it did appear that an injunction would destroy
property of the défendant of very great value. In the case before us
the findings of the master in respect to thèse matters to which we hâve
just referred are much stronger for the défendant than the facts in Ladd
V. Oxnard. In both cases there is évidence of infringement consisting
of répétition of errors, and in both cases there is no great similarity of
books, or danger that the public will mistake one for the other. Ladd
v. Oxnard contains the settled and conservative doctrine of this' circuit
with référence to the granting of interlocutory decrees in copyright
cases. At page 733, Judge Putnam says:
"But the law vests in no other individual holding an officiai position, wheth-
er executive, législative, or judicial, a power more extensive and more capa-
ble of eril, as well as of good, without defined rules either as to' the law or
the facts, than that which a single .iudge is so often asked to exercise in the
manner asked in the case at bar. In view of this fact, and further in viev
of the varying and inconsistent expressions in relation to the proper occa-
sions for exercising this power, the only true safety is In saying that a tem-
porary Injunction ought never to be granted in a case of new impression,
like this at bar, if it be possible to effectuate justice In any other way.
* * * The case fails to Impress the court with the necessity of granting
the complalnants, for their protection, an unconditional Interlocutory order.
The respondent is not charged with attempting in any way to pass ofC his
publication for that of the complainants. Indeed, not only the title page
and the short name given the respondent's book, but also Its size and style
of binding, prevent any probability of one being mistaken for the other.
There is therefore no threatened Injury to come from a counterfeiting oi
that character, so that we can apply the fact, which is matter of common
knowledge, that publications of this peculiar character rely for their accept-
ance on the réputation of the compllers and publishers, and the circulatior
of them must ordinarily be the same, whether protected by copyright or noi.
The court must therefore présume that, while the respondent's publicatioc
might obtain some circulation for which he may be liable to account to the
complainants in the way of profits, yet such circulation would probably be in
addition to any which the complainants would secure, even if they maintained
a monopoly, and consequently not of such character as to cause them a sub-
stantial loss of trade."
In the case at bar we are governed largely by the considérations
which prevailed in this circuit in the case which we hâve just cited. It
is the duty of the court to take a course most conducive to justice to
both parties to the controversy. In this attempt we grant a conditional
order, which we think will best subserve the ends of justice. It is
ordered that there will be an interlocutory decree for an injunction as
prayed for, unless the défendant on or before the loth day of May,
1904, file a bond to the complainant, with sureties approved by the
clerk, in the pénal sum of $5,000, conditioned for the payment of any
sum, except costs, which may be finally decreed against the défendant
in this court or on appeal, and keep an account of sales of directories
made by it
774 129 FEDERAL EEPORTBU.
WILSON V. ATLANTIC COAST LINE R. CO.
tCIrcuit Court, N. D. Georgia. April 30, 1904.)
No. 1,769.
1. Cakrieks— Spécial Services— Cikcus Tbains— Liability foe Négligence
— Spécial Oonteact—Validity— Public Policy.
Where a rallroad company agreed to haul certain cars of the proprietor
of a circus accordlng to a spécial scliedule, and for a price less than the
regular rates for such service, tlie carrier's servants having no rlght to
direct the loading or unloading, whlch was in the exclusive charge of
the employés of the circus company, an express contract between the
parties, exempting the carrier from liability for the négligence of its
employés, and releasing the carrier from liability for loss and damage
to any of the circus company's property, ménagerie, cars, or equipment
vrhile in transit, and to indeninify the carrier agalnst damage or injury
to any of the circus company's officers, agents, performers, or employés,
vras not invalid, as contrary to public policy.
2. Same— Pleading— Demueeer.
Where a shlpper brought suit on a spécial transportation contract
agalnst the carrier for damages to his property, the contract providing
that It was made in considération of reduced rates granted to the shlp-
per, he could not contend, on demurrer to the pétition, that the statement
in the. contract that a reduced rate was given was false.
3. Same— Action Ex Delicto.
Where a circus proprietor brought suit in tort to recover damages foi'
injuries to a circus train, transported over the Une of défendant rallroad
company under a contract exempting the carrier from liability for négli-
gence, and providing that the carrier's obligation should be that of a
private carrier only, a pétition alleging such contract as matter of In-
ducement only, and charging that the same was illégal and vold as be-
yond the carrier's corporate capaclty, and that the transportation of
shows, theaters, and cireuses was a part of defendant's regular business
as a carrier, was demurrable.
*. Same— Chaeactbe of Tbanspobtation— Peivate Carrier.
A rallroad company is not requlred, as a common carrier, to take a
circus train, a part of whlch Is loaded wlth wild animais, and transport
the same over its Une, but may refuse to transport such train, excepi
under a spécial contract Umiting Its liability to that assumed by a private
carrier.
Burton Smith and George Gordon, for complainant.
F. G. Du Bignon and R. C. Alston, for défendant.
NEWMAN, District Judge. This suit was brought originally ïii the
oity court of Atlanta, and removed by défendant to this court on th'tf
ground of adverse citizensliip ; the plaintifï being a citizen and résident
of the State of Virginia, and the défendant a North Carolina corpora-
tion. The déclaration allèges that the plaintifif is the owner and gênerai
manager of the "W. H. Harris Nickle Plate Shows" ; that being the
trade-name under which the plaintiff carries on his business of show-
man. Said show is not incorporated. It allèges that the défendant rall-
road corporation has damaged him in the sum of $15,000. The allé-
gations on which the complaint is founded are as follows :
"That défendant, on the 15th day of September, 1902, entered into a con-
tract wlth plaintifï, vvherein the défendant agreed for a considération to
H 4. See Carriers, vol. 9, Cent. Dig. § 048.
WILSON V. ATLANTIC COAST LINE E. CO. 775
transport plalntiff's show from the city of Montgomery, Alabama, to VaMosta,
Georgia, stopping at varlous places along defendant's line of railroad for
the purpose of allowing plaintilï to exhibit his show. A copy of the contract
Is attached. Plalntlffi, relying on the defendant's performance of said con-
tract, arranged dates for exhibiting along the line of defendant's railroad,
and went to an expense of one thousand dollars in preparing for and adver-
tising said exhibitions, of which fact défendant had full knowledge. Défend-
ant well knew, when It contracted to transport plaintifC and his show along
the line of its railroad, the character of the business in which plaintifC was
engaged, the importance of plaintiff's show being transported from place to
place at the times specified, and the conséquences to plaintifC of delay in such
transportation ; and plaintiff further shows that défendant undertook to
transport plaintilï and his show, with full knowledge of ail the facts, and
agreed in its capacity of common carrier to transport and care for plaintiff
and his property. That on or about October 28, 1902, défendant undertook
to move plaintiff's said show from Dothan, Alabama, to Bainbridge, Georgia,
when, by reason of the unsafe and defective condition of defendant's track
and appliances, and the négligence and carelessness of defendant's servants,
two of plaintiff's cars, loaded with plaintiff's animais, wagons, tents, and
other paraphernalia used by plaintiff in connection with his said show, were
ditched, and his said property broken up and destroyed."
It is alleged that the plaintiff's cars being moved from the siding at
Dothan, Ala., into the main track of defendant's road, preparatory to
transporting the show to Bainbridge, when, by reason of the defective
and unsafe condition of defendant's said track and appliances, and by
reason of the négligence and unskillfulness of defendant's servants and
employés, plaintiff's cars were wrecked, and his property damaged. It
is alleged that defendant's track was defective and unsafe, in that a
large rail was joined to a srnaller one, and the ends of said rails were
not fastened together with fishplates, as safety required, but were sim-
ply spiked to the ties, making an extremely crude and unsafe joining of
said tracks or rails. It is alleged that the uneven and defective joining
of said two rails was on the curve of the track where said side track
curved in to join the main track, and was on the outside of said curve,
making the place doubly dangerous on account of the fact that at such
a place the weight of the cars would be mainly thrown upon said out-
side rail at the defective joint, thus crowding it out, and allowing the
wheels to drop down upon the ties. It is alleged that the defective and
unsafe joining of said rails was due to the négligence of the défendant,
its officers and agents in charge oi its track, and that this defective and
dangerous condition of its track défendant well knew, or could by the
exercise of ordinary care hâve discovered ; that by reason of the dan-
gerous and defective condition of the track two of plaintiff's cars were
derailed, turned over, and bro'.^en to pièces, his wagons which were
loaded on said cars were thrown ofï and broken up, his tent pôles, seats,
and canvas were broken and smashed and otherwise damaged, the
wagon known as the "bank wagon" and "lion den" was turned over
and demolished. One of plaintiff's lions was so injured that it subse-
quently died, and another one so injured as to be of no further use to
plaintiff. The damage to plaintiff's cars, wagons, seats, pôles, canvas,
lions, and other property amounted to $4,000. It is further alleged
that by reason of said wreck, occasioned Ijy defendant's négligence, the
plaintiff was greatly delayed, and was unable to exhibit his show at
Bainbridge on October 28, 1902, as he had advertised and arranged to
do, and as défendant knew he had arranged to do, whereby plaintiff
77(3 129 FEDEEAL EEPOEXER.
lost that day's exhibition, to his damage $800; that by reason of the
wreck and the destruction of his wagons and paraphernalia, plaintiff
was unable to hâve any street parade of his show for 22 days following
said wreck, and that by losing thèse parades he lost $200 per day, or an
aggregate of $4,400; that the expense occasioned to the plaintiff by the
extra men, horses, and wagons necessary for such a street parade as
the plaintiff had daily in connection with his show as an advertisement
was $200 per day ; that this expense was occasioned for 22 days after
the accident, to the plaintiff 's aggregate damage $4,400 ; that the daily
expense of maintaining plaintiff's show is $400, and for the day plaintiff
was scheduled to show at Bainbridge he paid expenses to the amoimt
of $400, being deprived of any return therefor by reason of defendant's
négligence. It was then alleged that the défendant is a common car-
rier, and is obliged by law to accept and transport ail goods, animais,
and other property offered to it for transportation over its Une of rail-
road, but plaintiff shows that now regarding its duty as a common
carrier, défendant refused to receive and transport his show until he
should sign the contract heretofore mentioned and fully set out in
"Exhibit A." Plaintiff allèges that said contract was forced on him,
and that, in so far as it purports to excuse défendant from its légal
liability as a common carrier, and to limit its liability unreasonably as to
items of damage to be suffered by plaintiff, it is against public policy
and void. It is then alleged that the allégations of considération of
reduced rates contained in said contract is false, and that, on the con-
trary, défendant charged plaintiff double what he had formerly paid
défendant for the same service; and that when he objected to the price
demanded by défendant on this occasion he was informed that he must
pay defendant's price or walk ; and, in so far as said contract attempts
to limit defendant's liability, it is without considération.
The contract, which is attached to the déclaration, is as f ollows :
Atlantic Coast Line Railroad Company.
Circus Contract
An Agreement made this ISth day of September, 1902, by and between the
Atlantic Coast Line Railroad Company, hereinafter styled and called the rail-
road Company, of the first part, and W. H. Harris (Nickel) Plate Shows here-
inafter styled and called a circus company, of the second part.
Whereas, the Circus Company la the owner of a circus and ménagerie, iu-
cluding horses, wild animais and other live stock, and tents and other para-
phernalia usually used as a part of a circus and ménagerie, and is also the
owner of certain railroad cars especially designed and made for the carriage
and transportation of the circus, its animais, tents, paraphernalia and per-
formers in the said circus and of the agents and servants of the said circus
Company employed in and about the same, and
Whereas, the Circus Company Is desirous to glve exhibitions of its said
circus and ménagerie at varions points on the lines of railroad of the Rail-
road Company, and to that end to hâve its railroad cars loaded witb ail of
its said circus, paraphernalia, tents, equipments, horses, wild animais, live
stock and also Its performers, agents and servants moved over the lines of
railroad of the said railroad company from point to point where exhibits
are to be given by the said Circus Company and upon a schedule différent
from any in use by the said railroad company ; and
Whereas, it has been expressly stipulated and agreed between the said par-
ties that the said railroad company, by reason of the unusual services which
it Is to perform for the said circus company uuder the contract, uot only in
WILSON V. ATLANTIC COAST LINE E. CO.
777
the manner of transportlng of the sald persons and property and of the sched-
ules to be used in the said transportation, but also of the reduced and un-
usual rates charged for such services, makes this contract, net as a common
carrier, but as a private carrier, and Its liability for any breach of this con-
tract or for any damages arislng hereunder, or by reason hereof, shall be that
of a private and not a common carrier.
Now Therefore, this Agreement wltnesseth That the railroad Company, for
and in considération of the sums of money to be paid to it by the Circus
CoiDpany, as hereinafter provlded, and of the stipulations and agreements
herein set forth, agrées wlth the said Circus Company,
(1) That it will furnish unto the circus company the use of its railroad
and ail such locomotives englues and train crews as may be necessary to
transport and move 3 coaehes, 2 stock cars and 3 flat cars. Advertising car,
free ; cars for said circus company, coutaining the circus, ménagerie, para-
phernalia, equipments, performers and employés of the circus company from
point to point upon the Unes of railroad o£ the Railroad Company, upon the
foUowlng proposed itinerary and schedule, to wit ;
Leave.
Time.
Date.
To be Hauled
for Ex. at
Spécial
Eelease Rate.
Montgomery
Troy
Ozark
Elba
Enterprize
Abbeville
Dothan
Bainbridge
M-night
11
II
II
II
II
H
Oct. 20th
Oct. 21st
Oct. 22d
Oct. 23d
Oct. 24th
Oct. 25th
Oct. 27th
Oct. 28th
Troy
Ozark
Elba
Enterprize
Abbeville
Dothan
Bainbridge
Valdosta
$129 00
105 00
121 00
63 00
■; 137 00
91 00
135 00
. 185 00
5966 00
Should it become necessary to change the above routes or dates, the circus
company shall hâve the privilège of making such change by giving the Rail-
road Company ten days notice beforehand.
(2) The railroad company agrées to furnish the side track necessary for
unloading and re-loading the said train at each point in the said schedule at
which a stoppage for exhibition is to be made to the extent of the existing
side track room at such point, less the space occupied by such freight cars
as may be at the station and the space necessary for the free and safe pas-
.sage of their trains on the main track, and also an englue to shift the cars
duting the loading and unloading thereof.
(3) The trains shall not be run at a higher rate of speed than flfteen miles
an hour over any part of the road, unless by some unforeseen accident or
event it shall become necessary to Increase such speed in order to arrive at
the point of exhibition at the time above specified.
(4) That the railroad company will haul free for the said circus company
an advertising car over its road on its freight or accommodation trains be-
tweeu the points named in the above schedule and pass free on its passenger
trains bill posters in actual service, baggagemen, advertising agents and bag-
gage and advertising materlal of the said Circus Company.
In considération of ail of the which and of the greatly reduced rates given
by the railroad company to the circus company, the circus company covenants
and agrées as follows:
(1) To pay to the said railroad company the suin of Nine hundred and sixty-
six dollars and "o/ioo payable as follows at points of ahipment and at rates
named.
(2) The circus company for the considération herein set forth agrées to re-
lease and discharge and does hereby release and discharge the said railroad
company from ail liability for loss of, or damage to, any of its property,
ménagerie, cars and equipments which the same may sustain while in trans-
778 129 FEDERAL REPORTEE.
port over or upon the lines of the railroad company, and to Indemnîfy and
save harmless the railroad company for and against any damage or injury
to the person of any of Its ofHcers, agents, performers servants or employés
which may happen or occur upon its Une of railroad.
(3) That the railroad company shall hâve a lien upon any and ail of the
property of the Circus Company as securlty for ail sums of money due the
railroad company by the circus company under the provisions of this contract.
(4) That the railroad company shall not be required to run more than
seventy-five miles from one exhibition point to another as specifled in Its
schedule withln the usual time, eight hours, or between the hours of 11 p. m.
and 9 a. m.
(5) That the railroad company shall hâve the power and option at any and
ail tlmes to Inspect the cars of the circus company, and to reject any or ail
the railroad company shall see flt, untU such repalrs, altérations or addi-
tions are made to the said cars as the railroad company may demand for
their free and safe transportation over Its Unes. Such repairs, altérations
and additions, and ail materlal furnlshed and work done upon the said cars
whlle on the lines of the railroad company shall be at the expense of the said
circus company, and shall be paid before the said cars can be moved by it
ofC of the lines of the said railroad company.
(6) If any damage shall be done to the cars of the circus company, for
whIch the railroad company may be held legally liable, the circus company
shall permit the railroad company to repalr such damage at such time and
place within ninety days after such damage as the railroad company elect.
But the railroad company shall use ail reasonable dispatch in mailing the
same.
(7) If the railroad company shall for any cause be held liable for the loss
of or In.lury to any of the animais transported by it under this contract, It
is agreed that the said animais shall be valued at their actual value and in
no instance at a higher price or value than herein stipulated, as follows :
Eléphants, Hippopotami, Giraffes, Rhinoceroses $.500 00
Horses and Zébras 100 00
Ail other members of the equine specles ,50 00
Lions and Tigers 100 00
Léopards 50 00
Ail other members of the féline species 20 00
Buffaloes, and ail other members of the bovine specles 50 00
Seals 10 00
Monkeys, and ail other animais not specified 5 00
BIrds, ail species of 5 00
Crocodiles, Alligators, Serpents, and other reptilia 5 00
AH other animais not specifled 5 00
(8) That the circus company shall and will load and unload the said cars
at ail points of stoppage as per the above schedule, at its ovvn proper cost,
expense and risk, and that It shall and vfHI comply with ail of the provisions
of the Statutes of the United States or of any State through which the said
animais and live stock may be moved over the lines of the said railroad com-
pany in respect to the periodical loading, unloading, feeding and watering of
the said animais and llve stock durlng the transportation.
(9) That the railroad company shall not be liable to the circus company
for any damages or loss of profits at any point of exhibition or stoppage upon
the said schedule by reason of any violation of the railroad company to
transport the cars of the circus company on time as per the above schedule
or any agreed variation of the same.
In Witness Whereof, the parties hereto hâve caused thèse présents to be
executed by their respective agents thereto duly authorized, on the day and
year tlrst above written.
Exeeuted ia duplicate, of whIch one part to each of the said parties.
The Atlantic Coast LIne Railroad Co.,
By Jas. Menzles, G. O. F.
Chas. 0. Wilson, Mgr. Harris Shows.
Witness: C. L. Whaley.
WILSON V. ATLANTIC COAST LINE B. CO. i779
It appears from the foregoing contract that the plaintiff owned
the railroad cars in which its circus was to be transportée!, and that they
were specially constructed and designed for that purpose ; that among
the things to be transported were wild animais and Hve stock ; that
a spécial schedule was arranged by the railroad company for the
plaintifif to suit his convenience and desires in giving exhibitions,
and that what is called in the contract a "spécial release rate" was given
by the railroad company to the plaintifï for this service to be rendercd.
It is then specially stipulated and agreed that by reason of the unusual
character of the service, and of the rates given, the contract was made
by the défendant company not as a common carrier, but as a private
carrier, and its. liability for any breach of the contract, or any damage
thereunder or by reason thereof, should be as a private carrier, and not
as a common carrier.
It is then stipulated that for the considération set forth the circus
company releases and discharges the railroad company from ail liabil-
ity for loss and damage to any of its property, ménagerie, cars, or
equipment.s which the same may sustain while in transit over or upon
the lines of the railroad company ; and to indemnify and save harmless
the railroad company for or against any damage or in jury to the per-
sons of any of its ofhcers, agents, performers, or employés which
might happen or occur upon defendant's line of railroad.
The case is now heard on a demurrer to the déclaration, and the
question for considération is whether or not this is a valid contract of
release, and whether the contract which makes the obligation of the rail-
road company that of a private carrier, and not that of a common car-
rier, is valid and binding. Counsel for plaintifï relies largely upon the
important case of Railroad Co. v. Lockwood, 17 Wall. 357, 21 L. Ed.
627, which has for a long time been regarded as a leading case upon
the subject of the validity of contracts made by railroad companies re-
leasing themselves from liability for négligence in the performance of
their duty as common carriers. The conclusions reached by the court
in the Lockwood Case, so far as applicable hère, were as follows : "(1)
A common carrier cannot lawfully stipulate for exemption from respon-
sibility when such exemption is not just and reasonable in the eye of the
law. (2) It is not just and reasonable in the eye of the law for a com-
mon carrier to stipulate for exemption from responsibility for the nég-
ligence of himself or his servants."
It is to be determined hère how far thèse rules apply to a, case like
the présent, where a railroad company undertakes to transport for a
circus company a train of cars owned by the circus company on sched-
ules arranged to suit the engagements of the circus company, and with
the other stipulations and agreements expressed in this contract. The
case of Chicago, M. & vSt. P. R. R. Co. v. Wallace, 66 Fed. 506, 14
C. C. A. 257, 30 L. R. A. 161, decided by the Circuit Court of Appeals
for the Seventh Circuit, was a case very much like this. It was a suit
by the owner of a circus against the railroad company for damages
caused by the derailment of the circus train, and which the railroad
company had undertaken to carry under a spécial contract, in essential
particulars very much like the contract in this case. The décision of
the court in that case will appear from the syllabus, which is as follows :
'i'Stl 129 FEDEBAL REPORTER.
"The C. R. Co. made a spécial contract In wrlting wlth one W., the pro-
prletor of a elrcus, to haul a spécial train, consisting of cars owned by W.,
containing the clreus property, equipment, and performers, between certain
points, on stated days, at prices specified, which were less than the regular
rates of the company for transportation of passengers and frelght. It was
provided in the contract that, in considération of the reduced rate and of the
increased risks to the property of the railroad company in running such
spécial ti-ain, said company should not be llable for any damage to the per-
sons or property of the clreus company from whatever cause. It was not the
regular business or the custom of the railroad company to haul such spécial
trains of private cars, or to transport persons, animais, and frelght on the
same trains. Held, that the railroad company, in carrying W.'s property
on such spécial train, acted as a private, and not as a eommon, carrier ; that
as such It had the right to make the contract stlpulatlng against liabllity
for damage ; and that such contract was bindlng upon the parties."
In the opinion by Judge Bimn référence is made to tKe case of Rail-
road Company v. Lockwood, supra, and this quotation is made from it :
"A eommon carrier may undoubtedly become a private carrier, or bailee
for hlre, when, as a matter of accommodation or spécial engagement, he un-
dertakes to carry somethlug whlch It is not bis business to carry."
Référence is also made to the cases of Coup v. Railroad Co., 56 Mich.
III, 22 N. W. 215, 56 Am. Rep. 374, and Robertson v. Railroad Co., 156
Mass. 525, 31 N. .E. 650, 32 Am. St. Rep. 482.
In Coup V. Railroad Co., it is said in the opinion of the court :
"The business of eommon carrier, while it prevents any rlght to refuse the
carrlage of property such as is generally carried, Implies, especially on rail-
roads, that the business wlll be done on trains made up by the carrier, and
running on thelr own time. It Is never the duty of a carrier, as such, to
make up spécial trains on demand, or to drive such trains made up entirely
by other persons, or by thelr cars. It is not important now to consider how
far, eseept as to the owners of goods in the cars forwarded, the réception
of cars, loaded or unioaded, involves the respousiblllty of carriers as to the
owners of the cars as such. The duty to recelve cars of other persons, when
existlng, is usually fixed by the railroad laws. and not by the eommon law.
But It is not incumbent on companles, in thelr duty as eommon carriers, to
move such cars, except in their own routine. They are not obllged to accept
and run tbom at ail times and seasons, and not in the ordinary course of
business. The contract before us involves very few thlngs ordinarily under-
taken by carriers. The trains were to be made up entirely of cars whlch
belonged to plalutlff, and whlch the défendant nelther loaded nor prepared,
and into the arrangement of which, and the stowlng and placing of thelr con-
tents, défendant had no power to meddle. The cars contained horses which
were entirely under eontrol of plaintifC, and whlch, under any circumstances,
may involve spécial risks. They contained an éléphant, whlch mlght very
easily invclve dlfficulty, especially in case of accident. They contained wlld
animais, which defendant's men could not handle, and which might also be-
come trouBlesome and dangerous. It has always been held that it la not
incumbent on carriers to assume the burden and risks of such carrlage. The
trains were not to be run at the option of the défendant, but had short routes
and spécial stoppages, and were to be run on some part of the road chlefly
durlng the night. They were to wait over for exhibitions, and the times
were fixed with référence to thèse exhibitions, and not to suit the defend-
ant's convenieuce. There was also a dlvlded authority, so that, while
defendant's men were to attend to the movlng of the trains, they had
nothlng to do with loading and unloadlng cars, and had no rlght of access
or régulation In the cars themselves. It cannot be claimed on any légal
principle that plalntifC could, as a matter of rlght, call upon défendant to
move his trains under such circumstances and on such conditions, and, if
he could not, then he could only do so on such ferma as défendant saw fit
WILSON V. ATLANTIC COAST LINB R. 00. 781
to aecept. It was perfectiy légal and proper, for the greatly reduced prlce,
and wlth the rlsks and trouble arislng ont of movlng pecullar cars and pe-
culiar contents on spécial excursions and stoppages, to stipulate for exemp-
tion from responsibility for conséquences whieh might follow froiii careless-
ness of thelr servants whlle In this spécial employment How far, In the ab-
sence of contract, they would be liable in such a mixed employment, where
plaintlfC's men as well as their own had duties to perform connected wlth
the movement and arrangement of the business, we need not consider."
In Robertson v. Railroad Co., 156 Mass. 525, 31 N. E. 650, 32 Am.
St. Rep. 482, the décision is stated in the headnote, and reads as follows :
"A railroad company agreed to haul certain cars of the proprietors of a
circus accordlng to a certain schedule of time, and for a priée less than the
regular rates for such service, the proprietors agreelng at their own expense
to load and unload the cars, to save the défendant harmless from ail claims
for damages to persons and property, however accruing, and to 'assume ail
risk of accident from any cause.' An accident occurred by one of the cars
running off the track by reason of Its trucks not belng In proper condition,
and an employé of the proprietors, who was riding in one of the cars, was
Injured. Meld, In an action for injuries by the employé against the company,
that he could not recover, as the défendant had no control over the condition
of the cars, and no power to Interfère with them, as the contract was simply
to haul the cars as they were, which contract the défendant had a rlght to
make, and as it was under no obligation to draw the cars as a common car-
rier."
But I think the case of Railway Co. v. Voight, 176 U. S. 498, 20 Sup.
Ct. 385, 44 L. Ed. 560, is absolutely controlling on the principal question
in this case. That was a suit by an express messenger against the
railway company for damages for injuries sustained in a collision be-
tween two trains on the defendant's road. The question in the case
was certified by the judges of the Circuit Court of Appeals for the Sixth
Circuit to the Suprême Court. The facts appearing were that the rail-
road company had a contract with the express company to furnish cars
■uitable for transporting express matter, and to transport its employés
free, the express company agreeing to protect the railroad company
and hold it harmless from ail liability the railroad company might be
imder to the employés of the express company for injuries they might
sustain in being transported by the railroad company over its line as ex-
press messengers, whether the injuries were caused by négligence of the
railroad company or its employés or otherwise. The plaintiff, an express
messenger, had made a contract with the express company by which he
had assumed ail risk of accidents or injuries he might sustain in the
course of his employment occasioned by négligence, and whether re-
sulting in death or otherwise, and agreed to indemnify and hold harm-
less the express company as to any and ail claims which might be made
against it on his part, whether the injuries resulted from négligence or
otherwise, and agreeing to release the transportation lines (the railway)
from ail claims and demands or causes of action arising out of any in-
jury, and ratifying the agreement made between the express company
anfl the transportation company to the same efïect. The question sub-
mitted was decided by the Suprême Court in favor of the railway com-
pany, Mr. Justice Harlan dissenting. The important part of the case in
this connection is the référence made in the opinion of the court by Mr.
782 129 FEDERAI, REPORTER.
Justice Shiras to the cases of Robertson v. Old Colony Railroad, supra,
Coup V. Railroad Ce, supra, and to the décision by the Circuit Court of
Appeals for the Seventh Circuit in Chicago, M. & St. P. R. R. Co. v.
Wallace, supra. Thèse cases are cited and referred to in a way which
seems undoubtedly to mean an approval of them. This occurs in the
opinion :
"Where a railroad company macJe a spécial contract in writing with the
owner of a clrcus to haul a spécial train between certain points at specifled
priées, and stipulating that the railroad company should not be llable for any
damage to the persons or property of the clrcus company from whatever
cause, it was held by the Circuit Court of Appeals for the Seventh Circuit
citing Coup v. Railroad Co., 56 Mich. 111, and Robertson v. Old Colony Rail-
road, 156 Mass. 506, that the railroad company was not actlng as a common
carrier, and was not llable under the contract for injuries occasioned by nég-
ligent management of its trains."
"In its opinion the court quoted the followlng passage from Railroad v.
Lockwood : 'A common carrier may undoubtedly become a private carrier or
bàilee for hire when, as a matter of accommodation or spécial engagement, he
undertakes to earry something which it is not his business to carry.' Chicago,
Milwaukee & St. P. Railroad v. Wallace, 24 U. S. App. 589, 66 Fed. 506, 14 C.
C. A. 257, 30 h. R. A. 161."
While, therefore, the immédiate question for détermination in the
Voigt Case was the rights of an express messenger who had released
the express company, and the express company had released the rail-
road company, still I think the necessary effect of the décision, and es-
pecially the citation by the court of the authorities named with apparent
approval, was to include the cases of spécial contracts like the one be-
fore the court for hauling circus trains, and by so including them to dis-
tinguish them from the class of contracts for exempted liability by rail-
roads, covered by the décision in the Lockwood case.
It is alleged in the plaintiff's pétition that the statement in the con-
tract that a reduced rate was given by the railroad company is false.
The plaintiff contends, therefore, as I understand it, that, as this case
is now being heard on a demurrer, it must stand as if no reduced rate
had been given, and consequently the basis or considération for the con-
tract of release does not for présent purposes exist. The difficulty about
this contention is that the plaintiff sues on the contract. This is mani-
fest from the déclaration. I do not see how the plaintiff can sue upon
the contract, and then deny its terms, in this respect at least.
It is also alleged in the plaintiff's déclaration that the défendant is a
common carrier, and is obliged by law to accept and transport goods,
animais, and other property offered for transportation over its line
of railroad, but that it refused to transport plaintiff's show unless he
would sign the contract in question ; that the contract was f orced on
plaintiff, and is against public policy and void. A railroad company is
certainly not required, as a common carrier, to take a circus train be-
longing to a circus company, a part of which is loaded with wild ani-
mais, and transport it over its line on a schedule to be arranged by the
circus company. This is clearly held in the authorities cited above,
and which, as stated, are believed to hâve received the approval of the
Suprême Court.
ANTHOUr V. BUREOW. 78o
On Demurrer to Amended Déclaration.
(May 21, 1904.)
After the foregoing opinion was filed, counsel for plaintiff, having
previously asked leave to do so, filed an amendment to his déclaration as
follows :
"Now cornes the plaintiff in tbe above-stated case, and, having first ob-
tained leave of court, amends hls déclaration heretofore flled, and for such
amendment says :
"(1) He shows that his action Is founded upon the tort committed on him
by défendant, as is more fully set ont in his said déclaration, and not upon
the contract mentioned in said déclaration and set out in the exhibit attached
thereto ; that said contract is set ont and described by plaintiff, not as the
ground and basis of his action, but as a matter of inducement merely, and
showing his relation to said défendant; and that he seeks recovery, not for
the breach of any contract, but for the tort negllgently committed on him
and his property by said défendant. He further shovrs that in setting out
said contract in his said déclaration he does not ratify nor approve same,
nor admit himself bound by the terms thereof.
"(2) He shows further that said contract is illégal and void, in that It is
an attempt on the part of a public carrier, which plaintiff allèges défendant
to be, to act and contract as a "private carrier," in which capacity, plaintiff
allèges, défendant could not, under its charter, by which It was made a pub-
lic carrier, act or contract ; and plaintiff allèges, further, that said contract
is an attempt on the part of défendant to make of Itself something other
and différent from that which it is made by its charter, and having différent
powers, duties, and liabilities from those conferred and imposed upon it by
its said charter. Plaintiff allèges that, in so far as said contract attempts
to make of défendant a private carrier, it is ultra vires and illégal.
"(3) Plaintiff further allèges that to transport, in their own cars and in
the manner in vi'hich plaintiff's show was being transported by défendant,
shows, theater companies, and cireuses from place to place along their Unes
of railroad, on spécial schedules arranged for the convenience of both carrier
and earried, is a part of the common and ordinary business in which railroad
companies in gênerai and this défendant In particular are authorized by their
charters to engage, and in which they do in fact engage ; that défendant bas
a printed form of contract prepared, under which it undertakes this branch
of its business ; and that it was and is customary, and a part of the business
of ail railroads in gênerai and of this défendant in particular, to transport
along their Unes of railroad shows and cireuses, In their own cars, and in the
manner in which plaintiff's show was being transported under the contract
set out in plaintiff's déclaration heretofore filed."
Thereupon counsel for défendant renewed the demurrer to the déc-
laration as amended, and, after argument, the demurrer, so renewed,
was sustained.
ANTHONY V. BURROW et al.
(Circuit Court, D. Kansas, First Division. Aprll 12, 1904.)
No. 8,193.
1. Jtjrisdiction or Fedeeal Courts— Pedebal Question— Legalitt of Con-
GEKSsioNAi, District.
While the power to flx the number of représentatives In Congress and
to apportion them among the several states is vested in Congress, the
power to divide a state into congressional districts for the élection of
représentatives résides In the Législature of the state, and the question
If 1. Fédéral jurisdiction in actions involving fédéral question, see notes to
Bailey v. Mosber, 11 C. C. A. 308 ; Montana Ore Purchasing Co. v. Mining Co.,
35 C. 0. A. 7. ■
784 129 FEDERAL KEPORTEB.
whether a county Is lawfully included in a congresslonal district where
it was placed by an act of the Législature does not dépend on the con-
struction of any law of the United States, so as to give a fédéral court
jurisdiction of a suit for its détermination, but upon tàe validity of tlie
act of the Législature, which is a question for détermination by the state
courts.
2. Sams.
State législation relating to the sélection of candidates for représenta-
tives in Congress does not, becaùse of its subject-matter, become a part
of the fédéral law, the construction of whlch ralses a fédéral question.
3. Eqtjity Jueisdiotion— REMEnY AT Law— Mandatobt Injunction aqainst
State Officbe.
A fédéral court of equity Is without jurisdiction to grant an order re-
quiring a state officer to certify the nomination of a certain person as a
candidate for représentative in Congress, the subject not being of équi-
table cognizance.
4. FEDERAL Courts— Enfokcing Statutoby Remedy.
The rule that a fédéral court may enforce a remedy, elther équitable
or légal, given by a state statute, présupposes that the cause is oue of
which the fédéral court has jurisdiction.
5. Equity Jurisdiction— Politicai Rights— Enjoining Issuance of Certif-
icats OF Nomination.
A court of equity has no jurisdiction to enjoln officers of a state, actlng
under a state statute, from issuing a certiflcate of nomination to a can-
didate for représentative in Congress, the right involved being purely po-
litical, as distlngulshed from a civil or property right, to which alone
the jurisdiction of equity extends.
In Equity. On application for restraining of der.
A. E. Crâne and Hite & Nichols, for complainant.
C. C. Coleman, Atty. Gen., Eugène Hagan, and J. G. Slonecker, for
défendants.
POLLOCK, District Judge. This court is asked to grant a tem-
porary restraining order against défendants upon the face of the bill of
complaint filed herein. The controversy arises from political complica-
tions now existing in the First Congresslonal District of this state be-
tween two factions of the Republican Party. The real question of merit
thought to be involved and sought to hâve determined hère is whether
complainant or one Charles Curtis is the regular nominee of the Repub-
lican Party in the First Congresslonal District of this state for the office
of représentative in the Congress of the United States from said district.
The averments of the bill, in substance, are : That complainant pos-
sesses ail of the qualifications requisite under the law for such office;
that défendants are the Secretary, Auditor, and Attorney General of the
state of Kansas; that at a nominating convention, duly called, held
at the city of Holton on the 2d day of February last, for the purpose
of selecting a candidate of the Republican Party for said office from
said district, to be voted for by the electors in said district at the coming
November élection, a split of said convention into two factions occur-
red, the one faction nominating complainant, and the other nominating
said Charles Curtis ; that, by reason of a conspiracy existing among
certain of the adhérents of the Curtis faction, numerous frauds were
perpetrated in many of the counties comprising the district for the pur-
pose of preventing complainant from securing such nomination, and
ANTHONY V. BOKROW. "i^Sô
that such conspiracy resulted in the sending to said convention contest-
ing and fraudulent délégations from certain counties in said district,
unlawfully pretending to represent said counties in said convention;
that said congressional district, under the act of Congress of February
7, 1891, commonly known as the "Reapportionment Act," at the date
of said convention was composed of the counties of Atchison, Brown,
Doniphan, Nemaha, Jackson, Jefferson, Leavenworth, and Pottawato-
mie; that, notwithstanding the fact that under the provisions of said
act of Congress said district was so composed of the counties named,
the county of Shawnee, not included in or comprising a part of said
district, selected a large number of delegates, who appeared in said
convention as adhérents of the Curtis faction, and, in furtherance of
said conspiracy to defeat the nomination of complainant, were wrong-
fully seated in the convention which nominated said Charles Curtis;
that the convention which pretended to sélect said Curtis as the party
nominee of said party in said district was wholly irregular, void, and
without authority of law, and did not include a majority of the del-
egates to said convention entitled under the law to participate there-
in, but, on the contrary, that complainant secured the vote of a ma-
jority of the delegates to such convention entitled by law to participate
in the proceedings of said convention ; that he is the lawful nominee of
the party for said congressional district, and was so regularly declared
at said convention, is entitled to a certificate of nomination under the
laws of the state of Kansas, and that a majority of the qualified ele^tors
of said congressional district favor his élection to said office, and, unless
precluded therefrom by the unlawful combination and conspiracy of the
défendants and others named in the bill, will be elected to such office at
the coming November élection. It is further averred in the bill that
under the provisions of section 2703, Gen. St. Kan. 1901, which pro-
vides as follows :
"The certificate o( nomination and nomination papers being so filed, and
being in apparent conformity with this aet, sball be deemed to be valid, unless
objection thereto Is duly made in writing wlthln three days from the date
said papers are filed with the proper officers. Such objections or other ques-
tions arlsing in relation thereto, in case of nominations of state officers or
officers to be elected by the voters of a division less than a state and greater
than a county, shall be consldered by the Secretary of State, Auditor of State,
and Attorney General, and a décision of a majority of thèse officers shall be
final. Such objections or questions arlsing in the case of nominations for offi-
cers to be elected by the voters of a county or township shall be consldered
by the county clerk, clerk of the district court, and county attorney ; and
the décision of a majority of said officers shall be final. Objections or ques-
tions arlsing in the case of nominations for clty or Incorporated town officers
shall be consldered by the mayor and clerk, with whom one coundlman, chosen
by a majority of the councilmen,. shall act; and the décision of a majority
of such officers shall be final In any case where objection Is made, notice
shall forthwlth be given, by the officer with whom the objections ate filed,
to the candidates affected thereby, addressed to thelr places of résidence as
given in the nomination papers, and stating the time when, in no case to be
more than five days, if a state or district officer, nor more than three days,
if a county officer, and the place where such objections wIU be consldered.
Ail mandamus proceedings to compel an officer to certify and place upon the
ballot any name or names, and ail Injunction proceedings asking that said offi-
cers be restrained from certifying and placing upon the ballot any name or
names, must be commenced not less than twenty days before the élection" —
129 F.— 50
786 129 FEDERAL EBPOETER.
The défendants constitute the members of the board provided for in
such act to pass upon objections to the nomination of any candidate for
a public office whose district comprises more than one county in the
State; that défendants are the nominees of the Republican Party of
the State for re-election to the officiai positions now respectively held
by each ; that in order to secure their renomination to the several offices
now held by them, at the state convention of the Republican Party
held in the city of Wichita on the çth day of March last, défendants
conspired and confederated with the adhérents of the Curtis faction in
the First Congressional District to defeat the nomination of complain-
ant and to secure their own renomination ; that under the provisions of
the statute above quoted said Curtis has filed a certificate of nomination
with such board, and complainant has been compelled to file objections
thereto, and that said objections are now pending and undisposed of be-
fore said board. The complainant further avers that, as a part of the
fraudulent conspiracy to wrong complainant, the défendants, as mem-
bers of the tribunal or board provided in said act of the Législature to
hear and détermine objections filed to the nomination of said Curtis,
hâve collusively and fraudulently, without hearing the évidence, pre-
judged said objections against complainant and in favor of the legality
of the nomination of said Charles Curtis. It is further alleged in the
complaint that the power attenipted to be conferred upon défendants
constituting said board, by the terms of the said act of the Législature,
to hear and détermine the objections to the nomination papers of said
Curtis made by complainant, is a judicial power, and that the attempt to
confer such judicial power upon the Secretary, Auditor, and Attorney
General, of the state of Kansas was an unlawful exercise of législative
power, and that said act is, under the Constitution of the state of
Kansas, void and of no efïect. It is further alleged that défendants,
acting as said board, unless restrained by order of this court, will dé-
termine the nomination papers of said Charles Curtis regular and valid,
and the objections of complainant filed thereto insufficient under said
void statutory provision, and that the défendant J. R. Burrow, as
Secretary of the state of Kansas, will certify to the county clerks of
the counties claimed by said Curtis to constitute the First Congression-
al District the name of said Charles Curtis as the regular party nominee
for said office to be voted for by the electors of said district at the com-
ing November élection. The relief prayed is that an order of injunc-
tion may issue restraining défendants from acting as a tribunal or board
under said void act of the Législature to hear and détermine the ob-
jections filed to the nomination of said Charles Curtis, and from deter-
mining who is the lawful nominee of the Republican Party for said of-
fice, and for an order directing the défendant J. R. Burrow, as Secre-
tary of State, to forthwith certify to the several county clerks of the
counties comprising the First Congressional District of the state of
Kansas the name of complainant as the candidate of the Republican
Party for member of the House of Représentatives, to be placed upfin
the officiai ballot to be voted for at the coming November élection, and
gênerai relief.
The first question naturally arising for détermination is, does a féd-
éral court of equity hâve jurisdiction to hear and détermine a contro-
ANTHONY V. BUEROW. 787
versy of such nature as that charged in the bill of complainant ? The
gênerai jurisdiction of this court is invoked, first, on the ground that
the controversy involves the jurisdictional amount, and arises under a
law of the United States. That law is the act of Congress of February
7, 1891, commonly known as the "Reapportionment Act," which in-
creased the number of représentatives in Congress from this state to
eight, and section 4 of which act provides :
"ïhat in case of an increase in the number of représentatives which may
be given to any state under this apportionment such additional représenta-
tive or représentatives shall be elected by the state at large, and the other
représentatives by the districts now prescribed by law until the Législature
of such state in the manner herein prescribed shall redistrict such state, and
if there be no increase in the number of représentatives from a state the rep-
résentatives thereof shall be elected from the districts now prescribed by the
Législature of such state." 26 Stat. 736, c. 116.
By the provisions of section 2, c. i, p. i, Laws 1883, the Législature
of the state had provided that the counties of Atchison, Brown, Doni-
phan, Nemaha, Jackson, Jefferson, Leavenworth, and Pottawatoniie
should constitute the First Congressional District of the state, and
such counties did constitute the First Congressional District at the date
of the reapportionment act of Congress above mentioned. While it is
not so averred in the complaint, yet it is a well-known fact, of which
this court takes judicial knowledge, that the Législature of the state,
at its 1897 session, enacted as follows:
"That section 2 of chapter 1 of the Session Laws of 1883, be and the same
is hereby amended so as to read as follows : Sec. 2. The counties of Nemaha,
Brown, Doniphan, Jackson, Atchison, Jefferson, Leavenworth, and Shawnee,
shall constitute the First District." Section 1, c. 90, p. 181, Laws 1897.
Hence the contention of complainant is that, Congress having de-
clared the counties comprising the First Congressional District at the
time of the reapportionment act should constitute the First Congression-
al District until the state should by act of the Législature be redistricted
into congressional districts, and as the taking of Pottawatomie county
out of the First District and the placing of Shawnee county therein was
not a redistricting of the state, Shawnee county constituted no lawful
part of the First Congressional District at the date of the Holton con-
vention, and the delegates therefrom were not entitled to a voice in such
convention.
Does such contention raise a fédéral question cognizable in this court
sitting in equity? By the repeated adjudications of the Suprême Court
it is conclusively settled that a case arises under the Constitution or laws
of the United States whenever, upon the whole record, there is a con-
troversy involving the construction of either. Cohens v. Virginia, 6
Wheat. 264, 5 L. Ed. 257 ; Nashville v. Cooper, 6 Wall. 247, 18 L. Éd.
851 ; Tennessee v. Davis, 100 U. S. 257, 25 L. Ed. 648. In so far,
therefore, as the gênerai jurisdiction of this court dépends, the question
is, does the décision of this controversy dépend upon a construction of
the reapportionment act of Congress mentioned ? The power to déter-
mine the number of représentatives in Congress and to apportion that
number among the several states résides in and can be exercised only
by the Congress of the United States. In the exercise of that power
the reapportionment act from which the above quotation is made was
788 129 FEDERAL REPORTER.
enacted, fixing the number of représentatives in Congress from the
state of Karisas at eight, and providing for their élection. But the
power to divide the territory of a state into congressional districts, for
the purpose of selecting members of Congress apportioned to a state,
is a power residing in the Législature of the state, and not in the Con-
gress of the United States, as is recognized by said act of Congress.
In the exercise of that power the act of the Législature of 1897 was
passed, taking the county of Pottawatomie from, and adding the county
of Shawnee to, the First Congressional District. Hence it is apparent
that the right of Shawnee county to participate in the proceedings of
the Holton convention, under the averments of complainant's bill, does
not dépend upon the true construction of the "reapportionment act" of
Congress, but does dépend upon the validit}' of the act of the Législa-
ture of the state placing the county of Shawnee in the First Con-
gressional District; and the validity or invalidity of that act of the
Législature is a question for the détermination of the courts of the state,
and does not involve a fédéral question for détermination by this court,
unless the further contention made by solicitors for complainant may
be sustained.
Such further contention is that under section 2, art. i, of the fédéral
Constitution, the électoral machinery of the state, when employed for
the purpose of selecting représentatives in Congress from a state, be-
come laws of the United States, and are to be construed the same as
though enacted by Congress for that purpose. In other words, .if the
détermination of this controversy dépends upon the construction of acts
of the Législature of the state of Kansas employed for the purpose of
selecting a candidate for the office of représentative in Congress from
the First Congressional District of the state, such controversy becomes
one cognizable by the fédéral courts, to the same extent as though the
construction of the fédéral Constitution or laws was directly involved.
In support of this contention, Ex parte Yarbrough, iio U. S. 651, 4
Sup. Ct. 152, 28 L. Ed. 274, Wiley v. Sinkler, 179 U. S. 58, 21 Sup. Ct.
17, 45 L. Ed. 84, and Swafford v. Templeton, 185 U. S. 487, 22 Sup. Ct.
783, 46 L. Ed. 1005, are cited. However, an examination of thosc
cases will show the sole question therein determined was, in the Yar-
brough Case, the sufficiency of the fédéral criminal laws to punish one
who unlawfully obstructs a person qualified under state laws from
voting for a member of Congress ; and, in the other cases, that fédéral
courts bave jurisdiction of an action at law brought by one qualified
under state laws to vote for a member of Congress, who is wrongfully
prevented from voting; and this because section 2 of article i of the
fédéral Constitution adopts the qualifications required under state laws
to vote for a member of the more numerous branch of the state Législa-
ture as the test of the proper qualifications to vote for a member of
Congress. From this it will be seen the claim made by soHcitors for
complainant, that the above and kindred cases hold the élection ma-
chinery employed by the state in the sélection of candidates for the office
of représentative in Congress, becomes, when so employed, a part of
the fédéral law, and the construction of the same raises a fédéral ques-
tion, is claiming too much for such cases.
As the question at bar is not the right to vote, but the privilège of
AXïiiosr V. Bu;iiiow. 789
being voted for, and as this is not an action at common law for damages,
but relief is sought by a bill in equity, the question whether this court in
equity bas jurisdiction to grant the injunction prayed remains. It
must be apparent to any one that the relief sought by complainant un-
der his bill, in so far as it prays an order of this court directing the
défendant Burrow, as Secretary of State of the state of Kansas, to
forthwith certify to the several county clerks of the counties comprising
the First Congressional District the name of complainant as the party
candidate to be placed on the officiai ballot to be voted at the coming
November élection, is not a proper subject of equity, for such relief can
only be afforded in an action of mandamus, which is an action at law,
and that a fédéral court of equity vvill not grant a mandatory injunc-
tion upon a preliminary or interlocutory motion against officers of a
state, but, if at ail, only upon final hearing, and then only to exécute
the decree or judgment of the court. Walkley v. City of Muscatine,
6 Wall. 483, 18 L. Ed. 930; Fletcher v. Tuttle (111.) 37 N. E. 683, 25
L. R. A. 143, 42 Am. St. Rep. 220; McCauley v. Kellogg et al., 2
Woods, 13, Fed. Cas. No. 8,688; Audenried v. Philadelphia & Read-
ing R. Co., 68 Pa. 370, 8 Am. Rep. 195 ; Rogers Locomotive Works v.
Erie Raiiway Co., 20 N. J. Eq. 379.
As to the temporary restraining order now asked, the argument made
by solicitors for complainant is that the concluding portion of section
2703, Gen. St. Kan. 1901, above quoted, recognizes the right to pro-
ceed in equity in the state courts to restrain the action of the board of
which the défendants are members. Hence such remedy, undcr re-
peated décisions of the fédéral courts, may be available in this court sit-
ting as a court of equity. Ex parte McNeil, 13 Wall. 236, 20 L. Ed.
624, Davis V. Gray, 16 Wall. 203, 21 L. Ed. 447, Cowley v. Northern
Pacific Railroad Co., 159 U. S. 569, 16 Sup. Ct. 127, 40 L. Ed. 263, and
many other cases, are cited in support of the contention made. While
it is true the rights created and remédies provided by the statute laws
of a state may be enforced in the fédéral courts, either in law or in
equity, yet the enforcement of such statutory rights and remédies b}-
the fédéral courts first présupposes jurisdiction in the fédéral courts;
and while the statute under considération recognizes the right to ob-
tain relief by injunction in the state courts under certain conditions,
yet it créâtes no such right, and in my judgment no such right exists
in this court sitting as a co.urt of equity, and this for the following rea-
sons : The right to become the nominee of a political party for a pub-
lic office, whether national or state, and as such nominee to receive the
votes of the qualified electors voting to fill such office, is a purely politi-
cal right as contradistinguished from a civil or property right. In Re
Sawyer, 124 U. S. 200, 8 Sup. Ct. 482, 31 L. Ed. 402, Mr. Justice Gray
,says :
"ïlic office and jurisdiction o( a court of equity, uniess enlarged by express
statute, are limited to tlie protection of rights of property."
"Political riglits consist in the power to participate, directly or indirectiy.
in the establishment or management of the government. Thèse political rights
are fixed by the Constitution. Every citizen has the right to vote for publie
officers, and of being elected. Thèse are the political rights which the hum-
blest citizen possesses. Civil rights are those which hâve no relation to the
establishment, support, or management of the government. ïhey consist in
790 129 FEDERAL KEPOETEK.
the power of acquiring and enjoylng property, or exercising the paternal and
marital powers, and the llke. It wlll be observed that every one, unless de-
prived of them by sentence of civil death, is in the enjoyment of the civil
rights, which Is not the case with political rights, for an alien, for example,
bas no political, although in full enjoyment of the civil, rights." 2 Bouv. Law
Dict. 597.
Mr. Justice FuUer, sitting as Circuit Justice in Green v. Mills, 69
Fed. 857, 16 C. C. A. 522, 30 L. R. A. 90, says :
"The jurisprudence of the United States bas always reeognized the distinc-
tion between common law and equity as, uuder the Constitution, matter of
substance as well as of form and procédure. And the distinction bas been
steadily maintained, although both jurisdictions are vested in the same courts.
Fenn v. Holme. 21 How. 481 [16 L. Ed. 1981 ; Thompson v. Raiiroad Co., 6
Wall. 184 [18 L. Ed. 765] ; Cates v. Allen, 149 U. S. 451 [13 Sup. Ct. 883, 37
L. Ed. 804] ; Mississippi Mills v. Cohn, 150 U. S. 202 [14 Sup. Ct. 75, 37 L. Ed.
1052]. It is well settled that a court of chancery is conversant only with mat-
ters of property and the maintenance of civil rights. The court bas no juris-
dictlon in matters of a political nature, nor to Interfère with the duties of
any department of government, unless under spécial circumstances, and when
necessary to the protection of rights of property, nor in matters merely crim-
inal or merely Immoral, which do not afïect any right of property. In re
Sawyer, 124 U. S. 200 [8 Sup. Ct. 482, 31 L. Ed. 402] ; Luther v. Borden, 7
How. 1 [12 L. Ed. 581] ; Mississippi v. Johnson, 4 Wall. 475 [18 L. Ed. 437] ;
Georgia v. Stanton, 6 Wall. 50 [18 L. Ed. 721] ; Holmes v. Oldham, 1 Hughes,
76 ired. Cas. No. 6,643]."
The précise question hère under considération was ruled by the
Suprême Court of Illinois in Fletcher v. Tuttle, 151 111. 41, 37 N. E.
683, 25 L,. R. A. 143, 42 Am. St. Rep. 220. It is there said :
"The question, then, is whether the assertion and protection of political
rights, as judicial power is apportioned in this state between courts of law
and courts of chancery, are a proper matter of chancery jurisdiction. We
would not be understood as holding that political rights are not a matter of
judicial solicitude and protection, and that the appropriate judicial tribunal
will not, in proper cases, give them prompt and eihcient protection, but we
think they do not come wlthin the proper cognizance of courts of equity. In
Sheridan v. Colvin, 78 111. 237, this court, adopting, in substance, the language
of Kerr on Injunctions, said: 'It is elementary law that the subject of the
jurisdiction of the court of chancery is civil property. The court is conversant
only with the questions of property and the maintenance of civil rights. In-
jury to property, whether actual or prospective, is the foundation on which
the jurisdiction rests. The court bas no jurisdiction in matters merely crlni-
inal or merely Immoral, which do not affect any right of property. Nor do
matters of a political character come within the jurisdiction of the court of
chancery. Nor bas the court of chancery jurisdiction to Interfère with the
public duties of any department of the government, except under spécial cir-
cumstances, and where necessary for the rights of property.' Georgia v.
Stanton, 6 Wall. 50 [18 L. Ed. 721] ; In re Sawyer, 124 U. S. 200 [8 Sup. Ct.
482, 31 L. Ed. 402] ; Sheridan v. Colvin, 78 111. 237 ; Dickey v. Reed, 78 111.
261 ; Harrls v. Schryock, 82 111. 119, and other cases — are cited in support of
the doctrine announced."
Again, in that case, it is said :
"Other authorities of similar import might be referred to, but the fore-
golng are amply sufflcient to show that wherever the established distinctions
between équitable and common-law jurisdiction are observed, as they are in
this State, courts of equity bave no authority or jurisdiction to interpose for
the protection of rights which are merely political, and where no civil or prop-
erty right is Involved. In ail such cases the remedy, if there is one, may be
sought in a court of law. The extraordinary jurisdiction of courts of chan-
cery cannot, therefore, be invoked to protect the right of a citizen to vote or
ANTHONY V, BUEKOW. 791
to be voted for at an élection, or hls right to be a candidate for or to be
elected to any office ; nor can it be Invoked for the purpose of restrainlng the
holding of an élection, or of directing or controlling the mode in which, or
of determining the rules of law In pursuance of which, an élection shall be
held. Thèse matters involve in themselves no property rights, but pertain
solely to the politlcal administration of government. If a public officer, char-
gea with politlcal administration, has disobeyed or threatens to disobey the
mandate of the law, whether in respect to calling or conducting an élection or
otherwise, the party injured or threatened with injury in hls politlcal rights
is not without remedy, but hls remedy must be sought in a court of law,
and not in a court of chancery."
In Hardesty v. Taft, 23 Md. 513, 87 Am. Dec. 584, it is said:
"On this branch of the inquiry it seems to the court very clear that a court
of equity cannot be invoked to prevent the performance of politlcal duties
like those committed to the officers of registration under the law. The will-
ful, fraudulent, or corrupt refusai of a vote by judges of élection, or a like
déniai of registration by the offlcer appointed to register votes, which is the
same thing, can be adequately compensated for in damages at law. The
wrlt of injunction will not be awarded In doubtful or new cases not coming
within the well-established principles of equity. Bonaparte v. Kailroad Oo.,
Fed. Cas. No. 1,617."
In People v. Canal Board, 55 N. Y. 393, it is said:
"A court of equity exercises its peculiar jurisdiction over public officers to
control their actions only to prevent a breach of trust afCecting public fran-
chises, or some illégal act under color or claim of right affeeting injuriously
the property rights of indlviduals. A court of equity has, as such, no super-
visory power or jurisdiction over publie officiais or publie bodlès, and only
takes cognizance of actions agalnst or concerning them when a case is made
coming within one of the acknowledged heads of equity jurisdiction."
In Giles v. Harris, 189 U. S. 475, 23 Sup. Ct. 639, 47 L. Ed. 909, it
is held :
"A circuit court of the United States In Alabama has not jurisdiction of an
.iction in equity brought by a colored man, résident in Alabama, on behalf
of himself and other negroes, to compel the board of reglstrars to enroll the
jiames upon the voting lists of the county in which they réside under a Con-
stitution alleged to be contrary to the Constitution of the United States."
From an examination of the authorities I am persuaded this court
has no jurisdiction to restrain the board of which the défendants are
the constituent members, created under the statute above quoted, from
acting, upon the ground that such statute is unconstitutional and void,
or upon any ground set forth in the bill. The right sought to be en-
forced under the allégations of the bill filed in this case being a politlcal
right, and not a civil or property right, this court has no jurisdiction
to entertain the bill, and a temporary restraining order against the de-
fendants as officers of the state constituting such board, under the law
above quoted, may not and should not be granted. There is no equity
in the bill, and the same will be dismissed.
792 129 É-EDERAL REPORTEE.
FIRST NAT. BANK OF COVINGTON v. CITY OF COVINGTON et al.
(Circuit Court, B. D. Kentucky. May 26, 1903.)
No. 2,195.
1. Ees Jttdicata— Questions Concluded bt Judgment— Subséquent Suit
on diffebent cause of action.
Under the rule of the fédéral courts, a décision by the highest court
of a State that the acceptance by a banb of a statute imposing taxes
created a eontract with the state by which the bank was exempt from
local taxation during the term of its charter renders such question res
Judieata between the parties to the suit, and it cannot be agaln litigated
between them In a subséquent suit, although it Is on a différent cause
of action, arising under a law subsequently passed.
2. Same.
The fact that the judgment of a court might hâve been based upon a
ground other than that on which it was actually based does not prevent
the détermination that such ground existed from being conclusive in
a subséquent suit between the same parties, if its existence was in issue
in the former suit, and properly formed the basis of the judgment therein.
3. Same— Fédéral Courts— Followinq Rule of State Courts.
Although a judgment of a state court would render a question res
judicata in a subséquent suit between the same parties, under the rule
of the fédéral courts, yet a fédéral court will not give it such effiect
where It would not be an estoppel under the rule of the highest court of
the state.
4. Taxation— National Banks— Kentucky Statutes.
Act Ky. March 21, 1900 (Acts 1900, p. 05, c. 23), providing for the tax-
ation of shares of national banks, is valid and enforceable, as applied
to taxes for subséquent years, and a bank is not exempted from its op-
ération because of its acceptance of the provisions of the Hewitt act of
1886 (Acts 1885-86, p. 140, c. 1233), which, as has been authoritatively
determined, did not create an irrévocable eontract with the state.
In Equity. Suit to enjoin collection of taxes.
S. D. Royce, for First Nat. Bank.
F. J. Hanlon, for City of Covington.
COCHRAN, District Judge. The Suprême Court of the United
States, upon the appeal from the decree entered herein December 17,
1900 (103 Fed. 523), held that said decree was not final, but interlocu-
tory, and hence not appealable (185 U. S. 270, 22 Sup. Ct. 645, 46 L.
Ed. 906). It did so because the decree did not dispose of the entire
controversy presented by the pleadings herein. That controversy in-
volves the right of the défendant city of Covington, under the act of
March 21, 1900 (Acts 1900, p. 65, c. 23), to coUect from complainant
any taxes whatever ; i. e., taxes for the years after that date until the
expiration of its charter, November 17, 1904, as well as taxes for the
years prior thereto, since the adoption of the revenue law of 1892. A
single ground is urged by complainant for nonliability on its part for
taxes under said act for any period of time either before or after its
1 1. See Judgment, vol. 30, Cent. Dlg. § 1508.
H 3. Conclusiveness of judgments between fédéral and state courts, see
notes to Kansas City, Ft. S. & M. R. Co. v. Morgan, 21 C. C. A. 478; Union
& Planters' Bank v. City of Memphis, 49 C. C. A. 408.
FIRST NAT. BANK V. CITT OF COVINGTON. 793
passage. That ground is that in a former suit brought by it against
said défendant in the circuit court of Kenton county, Ky., afterwards
transferred to the circuit court of Campbell county, and appealed to
the Court of Appeals of Kentucky, to enjoin the collection of city
taxes from it for the year 1893 under said revenue law of 1892, it was
adjudged by the two latter courts that it had an irrévocable contract
with the State of Kentucky, under the Hewitt law of 1886, by which
it was exempted until the expiration of its charter, November 17,
1904, from ail other taxes than that provided by said law, and because
thereof it was not liable for city taxes for said year 1893 under said
revenue law of 1892. The opinion of the Court of Appeals rendered
in said case is contained in 97 Ky. 590, 31 S. W. 1013. An additional
ground is ui^ed for nonliability on complainant's part to défendant
for taxes under said act of March 21, 1900, prior to its passage, and
that is that said act, in so far as it relates to taxes for that period of
time, is discriminatory and répugnant to section 5219, Rev. St. U. S.
[U. S. Comp. St. 1901, p. 3502]. Judge Evans held that said por-
tion of said act was invalid on this ground, and, because of this, en-
joined and restrained the défendants from assessing complainant's
property under said act for said years. 103 Fed. 523. This is as
far as the decree goes. He. did not détermine whether complainant
was liable for no taxes at ail, on the ground relied on by it in support
of its contention that it was not, and hence the decree leaves the con-
troversy as to taxes after March 21, 1900, undisposed of.
The decree not being final, but interlocutory, for the reason stated,
I hâve thè power to set it aside if I think that it is wrong, and see fit
to do 30. But it is one thing for me to hâve such power, and another
for it to be proper for me to exercise that power. The decree was
entered by Judge Evans after due considération of the questions in-
volved. I am of equal rank with him, and hâve no appellate juris dic-
tion over his action. Comity requires, therefore, that I should permit
it to stand, so far as it goes. In allowing it to stand on this ground,
I do not mean to intimate any doubt as to the correctness of the po-
sition upon which he based it. I hâve simply refrained from any con-
sidération of it, being under no necessity to do so. It is incumbent
upon me, however, to dispose of so much of the controversy as relates
to the taxes after March 21, 1900, which has been left undisposed of
by Judge Evans. The Hability of complainant for thèse taxes dépends
entirely upon the correctness of the position taken by it that it was
not liable for any taxes under said act either before or after its pas-
sage, because of the adjudication hereinbefore referred to, and, if
well taken, it afifords an additional reason for permitting Judge Evans'
action to stand.
It is certain that if I am free to deternjine the question whether
complainant, by its acceptance of the Hewitt law in 1886, acquired an
irrévocable contract from the state of Kentucky exempting it from ail
other taxation than that provided in said law until the expiration of
its charter, on its merits I would hâve to hold that it did not thereby
acquire such a contract. Bank Tax Cases, 102 Ky. 174, 39 S. W.
1030; Citizens' Savings Bank v. Owensboro, 173 U. S. 636, 19 Sup.
Ct. 530, 43 ly. Ed. 840. And complainant so concèdes. Its sole re-
794 i2S> FliUKKAL UEl'OUXEU.
liance is on the adjudication in the former suit. It claims tliat tlie
question as to whether it so acquired such a contract is res judicata —
a thing adjudged — and that it cannot now be claimed that it did net.
It is certain that in said suit it was adjudged by the Campbell circuit
court, and afterwards on appeal by the Court of Appeals, that such a
contract had been made by the state of Kentucky with complainant,
and that it was irrévocable. Both courts delivered written opinions,
and both opinions are made part of complainant's bill. It is true that
the Campbell circuit court also adjudged that the taxes levied by the
revenue law of 1892 upon national banks were franchise taxes, and
hence invalid, and that on this ground, as well as the existence of the
contract, complainant was not liable for the taxes of 1893. But the
latter was the main ground of its action, and such was the only ground
upon which the Court of Appeals based the affirmation of its judg-
ment.
The défendants urge several reasons why the former adjudication
should not be accepted in this suit as conclusive of the existence of
such an irrévocable contract in complainant's favor. They say that
this suit is upon an entirely différent cause of action. It is a suit to
enjoin the collection of taxes for subséquent years authorized to be
collected by another and subséquent act of the Législature. This is
undoubtedly true. But does this fact make any différence ? I think
not. It is well settled that a thing adjudged in a former suit cannot
be questioned in a subséquent suit between the same parties, although
the latter is upon an entirely différent cause of action. In the case of
Southern Pac. Ry. Co. v. U. S., 168 U. S. 48, 18 Sup. Ct. 27, 42 h. Ed.
355, Mr. Justice Harlan said :
_ "The gênerai principle announced In mimerous cases Is that a rlgbt, ques-
tion, or fact distinct!}' put in issue and directiy determined by a court of com-
pétent jurisdictiou as a ground of recovery cannot be disputed In a subsé-
quent suit between the same parties or their privies; and, even if the second
suit is for a différent cause of action, the right, question, or fact once so de-
termined must, as between the same parties or their privies, be talcen as con-
clusively established, so long as the judgment in the first suit remains unmodi-
fled. This gênerai ruie is demanded by the very object for which civil courts
hâve been established, which is to secure the peace and repose of society by
the settlement of matters capable of Judicial détermination. Its enforeement
is essential to the maintenance of social order, for the ald of judiclal tribu-
nals would not be invoked for the vindication of rights of persons and prop-
erty if, as between parties and their privies, conclusiveness did not attend the
judgment of such tribunals In respect of ail matters properly put in issue and
actually determined."
This principle has been applied by the Suprême Court of the United
States in cases where the two suits related to différent years' taxes.
City of New Orléans v. Citizens' Bank of La., 167 U. S. 371, 17 Sup.
Ct. 905, 42 L. Ed. 202; Baldwin v. Maryland, 179 U. S. 220, 21 Sup.
Ct. 105, 45 L. Ed. 160.
In the former case Mr. Justice White points out that :
"The argument that, because a tax of one year is a différent cause of action
from the tax of a subséquent year, therefore a demand for a tax of a subsé-
quent year can never be conchided by the thing adjudged in the prior year,
admits the relevancy of res adjudicata to demands for taxes, but contends
that wherein there are différent demands the thing adjudged has no appllca-
FIEST NAT. BANK V. CITT OF COVINGXON. 795
tlon, although the last demand may dépend upon a question whlch has pre-
viously been determined under the same facts and clrcumstances."
To this argument he responds thus :
"ïhe proposition tliat, because a suit for taxes of one year Is a différent
demand from the suit for a tax for another, therefore res judlcata canuot ap-
ply, whilst admittlng in form the principle of the thlng adjudged, in reality
substantially dénies and destroys it. The estoppel resultlng from the thlng
adjudged does not dépend upon vvhether there is the same demand In both
cases, but exists even although there be différent demands, when the question
upon which the recovery of the second demand dépends has, under identlcal
clrcumstances and conditions, been previously concluded by a judgment be-
tween the parties or thelr prlvies. This Is the elemental rule stated in the
text-books, and enforced by many décisions of this court."
To the argument that "it would be intolérable to recognize that a
judgment as to the tax of one year could be conclusive as to the tax
of a subséquent year," and that, "as a matter of pubhc policy and pub-
Hc necessity, the principles of the thlng adjudged can never apply to
taxation," he responds thus :
"The argument that, as a matter of public policy, the principle of the thlng
adjudged should be held not to apply to controversles as to taxation, if there
be merit in it, should be addressed to the lawmaklng, and not to the judlcial,
department. But if the judlcial mlnd could entertain the suggestion, it seems
clear that it is not without real merit. In Its ultimate aspect, it asserts that
no question concernlng government or public authority ought ever to be sub-
mitted to judlcial investigation. Indeed, the contention Is that there is no
power in courts of justice to conslder any question of taxation, or render any
judgment In relation thereto. That this is the resuit of the proposition is
maulfest from the fact that the very essence of judlcial power is that, when
a matter is once ascertalned and determined, it Is forever concluded, when it
arises again, under the same clrcumstances and conditions, between parties
or thelr prlvies. To admit the judlcial power on the one hand, and to deny
on the other the very substance and essence of such power, is not only contra-
dictory, but destructive of the fundamental conceptions upon whlch our Sys-
tem of government is based. Under this theory, the case under considération
should not be entertalned, but should be dlsmissed. Accepting this argument
in its full conséquence, every judgment rendered by this court from the foun-
dation of the government, declaring a partlcular tax or burden unconstltution-
al, imports no efllcacy whatever. Every decree of this court enforcing taxa-
tion in order to discharge obligations previously contracted, where the right
to the tax was a part of the obligation, is deprlved of the sanctlty of the thlng
adjudged, for, manifestly, if the estoppel of the thlng adjudged does not arise
from a judgment preventlng taxation, such an estoppel cannot also resuit
from a judgment enforcing taxation."
In the latter case Mr. Justice Brewer said:
"The controversy in the case reported in 85 Md. 145, 36 Atl. 764 [Baldwin
V. County Com'rs, etc.], was one between the estate of the ward and the state
of Maryland. In that case the right of the state to compel a payment by the
estate of the ward of taxes levied thereon for the years 1893 and 1894 was
settled. • * * The matter has become res judlcata between the estate
and the state. There Is no prêteuse that the taxes of 1895 stand in any other
condition, as to the matter of fact, than the taxes of 1893 and 1894, whlch
were, in terms, Included within the litigation settled by the décision referred
to, The rullng, therefore, as to the taxes for 1895 comes within the force of
that décision, and is determined by the conditions in respect to the taxes of
1893 and 1894. Johnson Steel R. Co. v. Wharton, 152 U. S. 252 [14 Sup. Ct.
608, 38 L. Ed. 429] ; Last Chance Mining Co. v. Tyler Mining Ce, 157 U. S.
683 [15 Sup. Ct. 733, 39 L. Ed. 859] ; New Orléans v. Citizens' Banli, 167 U. S.
371 [17 Sup. Ct. 905, 42 L. Ed. 202]."
796 129 FEDERAL EBPOETEE.
And it has been applied by the Circuit Court of the District of Ken-
tucky and the Suprême Court of the United States in cases exactly
like the one in hand, save in a particular hereinafter referred to.
Bank of Kentucky v. Stone (C. C.) 88 Fed. 394; Northern Bank v.
Stone (C. C.) 88 Fed. 413; Farmers' Bank v. Stone (C. C.) 88 Fed.
987; Louisville Banking Co. v. City of Louisville (C. C.) 88 Fed. 988;
Third National Bank v. City of Louisville (C. C.) 88 Fed. 990 ; Stone
V. Farmers' Bank, 174 U. S. 409, 19 Sup. Ct. 880, 43 L. Ed. 1027;
Stone V. Bank of Kentucky, 174 U. S. 408, 19 Sup. Ct. 881, 43 L. Ed.
1187; City of Louisville v. Louisville Banking Co., 174 U. S. 408, 19
Sup. Ct. 881, 43 L. Ed. 1027; Stone v. Deposit Bank, 174 U, S. 408,
19 Sup. Ct. 881, 43 L. Ed. 1027.
Again, défendants urge that this suit is not only to enjoin the col-
lection of différent years' taxes, but taxes imposed on the shares of
stock of national banks by the act of March 21, 1900, whereas the
former suit was to enjoin the collection of taxes levied on the fran-
chise of national banks by the revenue law of 1892, which law, by rea-
son of the fact that the taxes were so imposed, was invalid, and the
collection of which taxes complainant was entitled to hâve enjoined
on this ground alone, without référence to the question whether it
had an irrévocable conti-act exempting it from other taxes than those
imposed by the Hewitt law (Acts 1885-86, p. 140, c. 1233). This, too,
is undoubtedly true. Owensboro Nat. Bank v. Owensboro, 173 U. S.
664, 19 Sup. Ct. 537, 43 L. Ed. 850. It is in this particular that this
case is unlike the cases hereinbefore cited, which otherwise are, as
stated, exactly Hke it. In ail of them, except that of Third National
Bank v. City of Louisville, 88 Fed. 990, the banks involved were state
banks, and in that case the Circuit Court for the District of Kentucky
held that the revenue law of 1892 was valid in so far as it afifected na-
tional banks, basing its judgment entirely on the former adjudication
as to the existence of an irrévocable contract under said Hewitt law
in favor of said bank ; and the Suprême Court of the United States
affirmed said judgment on the ground that said revenue law of 1892
was invalid as to national banks, and waived a considération of the
efïect of said former adjudication. City of Louisville v. Third Na-
tional Bank, 174 U. S. 435, 19 Sup. Ct. 874, 43 L. Ed. 1037.
Does, then, the fact that said revenue law was invalid as to national
banks, and complainant was entitled in the former suit to an injunc-
tion against the collection of the taxes for the year 1893 imposed by
said law, on this ground alone, without référence to the question as
to whether it was invalid as to complainant, also, because it impaired
the obligation of an irrévocable contract between it and the state,
under the Hewitt law, make any différence? I do not think that it
does. The fact that the judgment of a court in a suit might hâve been
based upon another ground than that on which it was actually based
does not prevent the détermination that such ground existed being
conclusive as to its existence in a subséquent suit between the same
parties, if its existence was in issue in the former suit, and properly
formed the basis of the judgment therein. Likewise, if a judgment in
a suit is properly based upon two grounds, the détermination therein
that both grounds exist is conclusive as to the existence of either
FIKST NAT. BANK V. CITY OF COVINGTON. 79T
ground in a subséquent suit between the same parties. In Black on
Judgments, vol. 2, p. 604, it is said that one of the two main rules which
govern the law of estoppel by judgment, as the same may be deduced
from the gênerai resuit of ail the authorities, is as follows :
"A point which was actually and dlrectly in issue In a former suit, and was
there judicially passed upon aud determined by a domestic court of compétent
jurisdiction, eannot be again drawn in question in any further action between
the same parties or their privies, whether the cause of action in the two suits
be Identleal or différent."
And again, on page 729, it is said :
"It is a fundamental and unquestioned rule that a former judgment, when
used as évidence in a second action between the same parties or their privies,
is conclusive upon every question of fact which was directly involved within
the issues made in such former action, and which is shown to hâve been ac-
tually litigated and determined."
No exception is stated to this gênerai rule, growing out of the fact
that other points or facts were directly in issue in the former suit, and
were or might hâve been litigated and determined therein, and formed
the basis of the judgment therein. As a counter rule it is stated on
page 733 that the judgment is not conclusive "of any matter which
was incidentally cognizable in that action, or which came coUaterally
in question, nor of any matter to be inferred by argument and con-
struction from the judgment." And on page 734 it is said that an
important analogy to this counter rule "is found in the case of opin-
ions of the appellate courts considered as authoritative statements of
the law. A point may be considered and passed upon by the court
which cornes only incidentally in question, and is not necessary to the
détermination of the case. In that event the décision, so far as con-
cerns that point, is merely obiter dictum, and not entitled to the weight
of a précèdent." "But," he adds, "where the record in an action of
which the court has jurisdiction fairly présents two points, upon either
oi which the décision might turn, and the court fully considers and de-
!.';rmines both, the décision of neither can be considered as an obiter
dictum, and the judgment is authorized on both points."
This latter statement of the law as to the authoritativeness of a dé-
cision of an appellate' court upon two points involved in a case before
it, upon either of which the décision might turn, in subséquent cases
involving either one of them, finds support in the case of Hawes v.
Water Co., S Sawy. 287, Fed. Cas. No. 6,235. The question decided
in that case was whether the court, in construing a state statute in-
volved therein, was bound to follow a décision of the higher court of
that state construing that statute. It is well settled that the fédéral
court must follow the construction put upon a statute by the highest
court thereof, and equally well settled that it is not bound to do so if
the décision of the state court is a mère dictum. The subquestion in
that case was whether the décision of the state court which it was
claimed the fédéral court should follow was a dictum or not. Judge
Sawyer said :
"There were two grounds relied on to show that this was not a proper case
for exercising the jurisdiction: (1) That the board of supervisors is a légis-
lative body, having a discrétion to pass ordinances, and that the court ought
not to interfère with its législative discrétion in advance, on the hypothesis
798 129 FEDERAL REPORTER.
that It intends to pass an alleged ordlnance, especlally when It cannot be
known in advance what Its Intention as a législative body Is; (2) that the city
bad a rigiit to the water claimed, and a rlght to take the measures alleged to
isecure it in case the petitloner sbould shut it off, and for that reason, also,
there was not a proper case for the prohibltory wrlt Both grounds weve dis-
tinctly and squarely presented by the record, and relied on, and the latter
more especially fully argued by counsel. The court might just as well hâve
rested its décision on the second ground, if found good, without notlcing the
tirst, as upon the flrst without noticlng the second, or it mlght, if thought
proper, hâve decided both, as It dtd. It is a matter of almost everyday occur-
rence that the record présents two or more points, either of which. If sustaln-
ed, would détermine the case, and the court décides them ail. In such cases
It can no more be sald that one, rather than another, is obiter. In this case
the court was earnestly pressed by counsel on both sides to décide the case on
Its merlts, and glve an autborltatlve construction of the statute. The great
anxiety was to ascertain the right of the respective parties, and the mode was
of no conséquence. * * * rp^ gj^y ^^,^^, ^j^^^^ ^^^ construction of the statute
was merely obiter Is to say that a vast amount of labor, research, energy, and
anxiety was expended by counsel and court to no real purpose. * * * It is
the very point upon which nearly ail of the efCort and research of counsel and
court were actually expended. This discussion did not lu any wise serve to
illustrate the other point. Indeed, it had no relation whatever to it. It was
a distinct, separate, and independent point, and the only one in the case that
counsel or parties practlcally cared anytblng about. * * • i regard the
construction put upon the clause in controversy by the Suprême Court In the
prohibitive case cited as autborltatlve, and, being so, I rest my décision upon
that case, without examlning the question as an original proposition."
If, then, a décision by an appellate court of a point upon which a
case turns, when there is another point upon which it might equally
turn, or of both points, is authoritative in subséquent cases in the one
instance as to the one point, or in the other as to either point, on the
principle of stare decisis, or on the principle which governs fédéral
courts in foUowing the highest court of a state in construing its stat-
utes, it is equally authoritative on the principle of res judicata in a case
involving that principle. In the former suit between complainant and
défendant city of Covington, the case turned on either of the two
grounds hereinbefore stated. It was made to turn by the Campbell
circuit court on both grounds — mainly, however, on the ground that
complainant had an irrévocable contract, and by the Court of Appeals
solely upon that ground. The décision therein that complainant had
such a contract must therefore be accepted as conclusive in this state,
notwithstanding the fact that the former suit could hâve been made to
turn solely on the other ground, to wit, that the revenue law of 1892
was invalid as to national banks, because the taxes which it imposed
on them were upon their franchises, which the législature of Kentucky
had no power to do. Had the state courts in the former suit granted
complainant the relief which it sought therein, without giving any in-
timation as to the ground upon which they granted it, then the judg-
ment therein would not hâve been conclusive herein upon the question
as to whether complainant had an irrévocable contract. For then it
could not be told upon what ground complainant had been granted
that relief, and it is well settled that estoppels must be certain. In the
case of Russell v. Place, 94 U. S. 606, 24 L. Ed. 214, Mr. Justice Field
said:
"It Is undoubtedly settled law that a judgment of a court of compétent juris-
«liction upon a question dlrectly involved in one suit is conclusive as to that
FIEST NAT. BANK V. CITY OF COVINGTON. "Ï'M
question In another suit between the same parties. But to this opération of
the judgment it must appear, either upon the face of the record, or be shown
by Intrlnsic évidence, that the précise question was raised and determined in
the former suit. If there be any uncertalnty on thls head in the record— as,
for example, if it appear that several distinct matters may hâve been litigated,
upon one or more of which the judgment may hâve passed, without indication
v^hich of them vras thus litigated and upon which the judgment was rendered
— the whole subject-matter of the action will be at large, and open to new con-
tention, unless this uncertainty be removed by intrinsic évidence showing the
précise point Involved and determined. To apply the Judgment, and give
effect to the adjudication actually made, when the record leaves the matter
in doubt, such évidence is admissible."
But no such uncertainty exists hère. The sole ground upon which
complainant in the former suit sought to hâve the revenue law of 1892
declared invalid as to it, and to enjoin collection of taxes by the de-
fendant city under it for the year 1893, was the existence of said irrév-
ocable contract; and the Campbell circuit court granted it that relief
on that ground, though it did so on the other ground also, and the
Court of Appeals affirmed its judgment on that ground alone. This
is made clear by the records in the former suit, and there is no uncer-
tainty whatever in regard to it.
Still further, défendants urge that the courts of Kentucky, if this
suit were pending therein, would give no such eiïect to the adjudica-
tion in the former suit relied on herein, and therefore this court should
not give it any such effect. In support of their contention that the courts
of Kentucky would give no such effect thereto, they cite the following
cases, to wit: City of Newport v. Commonwealth, 50 S. W. 845, 51
S. W. 433, 45 L. R. A. 518; Louisville Bridge Co. v. City of Louis-
ville, 58 S. W. 598 ; Negley, Sheriff, v. City of Henderson, 59 S. W.
19; Bell County C. & I. Co. v. City of Pineville, 64 S. W. 525; City
of Frankfort v. Deposit Bank, 65 S. W. 10 ; Louisville Bridge Co. v.
City of Louisville, 65 S. W. 814. The case of City of Newport v.
Commonwealth was a suit by the state against the city of Newport to
recover taxes under the revenue law of 1892 for the year 1894 on the
franchise of said city to operate waterworks. Several défenses were
made to the suit. Amongst others was a plea of res judicata. It was
alleged that suit had been brought against the city to recover taxes
under said law of 1892 for the year 1893 on said franchise, and same
had been dismissed by the circuit court, which judgment had never
been set aside or reversed. It was claimed that this judgment made
the question as to the liability of said city for franchise taxes under said
law a thing adjudged, and was conclusive on the question. It was
held by the court that the judgment in the former suit did not hâve
this effect. And it would seem that the judgment of the majority of
the court was placed upon the broad ground that in no case and to no
extent could a judgment in a suit as to one year's taxes be res judicata
as to another year's taxes. Judge Dix Relie, in stating the opinion of
the majority of the court, based the holding on this reasoning, to wit :
"The authorities seem to hold that when a court of compétent jurisdiction
bas, upou a proper issue, decided that a contract, out of which several distinct
promises to pay money arose, has been' adjudged Invalid in a suit upon one of
thèse promises, the judgment is an estoppel to a suit upon another promise
founded on the same contract. But taxes do not arise out of contract. They
are imposed in invitum. Tbe taxpayer does not agrée to pay, and the right
800 129 FEDERAL KEPORÏEE.
to litigate the legallty of a tax upon ail grounds must, of necesslty, exlst, re-
gardless of former adjudications as to tlie valldlty of a différent tax." And
again: "In our opinion, it would be against public poliey to liold that a judg-
ment of a circuit court upon a question of taxation is forever binding upon
tliis court, not only as to the taxes tliere in litigation, but also as to taxes for
ail subséquent years, merely because counsel for the commonwealth failed to
bring the question hère. Such a rullng would seem to be open to the objec-
tion that It would hold the commonwealth bound by the lâches of its otficer."
It appears, from his response to a pétition for rehearing, that the
minority of the court, composée! of three out of the seven judges, de-
sired an extension of the opinion so as to include the qualification
upon the gênerai rule laid down as to the application of the doctrine
of res judicata in tax cases, to wit :
"But whether the state is bound by a former adjudication that there exists
a contract exemptlng from taxation, or as to the construction of such contract,
Is a question not necessarily involved hère, and to the décision of which it
may be that différent principles apply. There would seem to be an essential
différence between the commonwealth exercising the highest of its sovereign
powers — a power necessary to its very existence — and the same common-
wealth, its sovereignty laid aside, binding itself as a mère corporate entity
by a sealed instrument. But it is not necessary, in our judgment, to go into
this question, nor even to décide that there is a différence."
The two cases, styled alike "Louisville Bridge Company v. City of
Louisville," were two suits by said city against the bridge company — ■
the one, to recover city taxes on its bridge (its tangible property) for
the years 1890, 1891, 1892, 1893 and 1894; the other, to recover same
on same for the years 1895 and 1896, and also city taxes on its fran-
chise (its intangible property) for the years 1894, 1895, 1896 and 1897.
In the case of Louisville Bridge Company v. City of Louisville, 81 Ky.
189, which was a suit by said city against said bridge company to re-
cover city taxes on its bridge for the year 188-, it had been held that
the said bridge was not liable to city taxes, because it was not the ré-
cipient of the benefits of municipal government. This former adjudi-
cation was relied on as a bar in the two subséquent suits to recover
taxes for the latter years. It was held that it was not a bar. In the
former of the two cases, Judge Burnam said :
"In response to appellant's plea of res judicata, It may be said that this
identical question was before the court in the case of Henderson Bridge Co.
V. City of Henderson, decided June 24, 1896 [90 Ky. 498, 14 S. W. 493], and in
the very récent cases of Newport v. Masonic Temple Ass'n, 45 S. W. 881, 48
S. W. 697, and City of Newport v. Com., 50 S. W. 845, 51 S. W. 433 [45 L. R.
A. 518]. It was held that a judgment as to the validity of taxes for one year
is not conclusive as to the validity of taxes on the same property for another
year, and, as the question is fully considered in thèse cases, it is unnecessary
to elaborate it again."
In the latter of the two he said :
"The plea of res judicata relied on for reversai has been decided so tre-
quently adversely to the contention hère made, in récent décisions of this
court, that it is unnecessary for it to consider this question; it havlng been
expressly decided that a judgment by a court of compétent jurisdiction in a
suit for taxes of one year did not constitute a bar in a subséquent suit between
the same parties under the same law for another year's tax. See Henderson
Bridge Co. v. City of Henderson, 90 Ky. 498, 14 S. W. 493; Same v. Com., 99
Ky. 623, 81 S. W. 486. 29 L. R. A. T3; City of Newport v. Com. [Ky.] 50 S. W.
SAS, 45 L. R. A. 518."
FIKST NAT, BANK V. OITT OF COVINGTON. 801
In regard to thèse two cases, it is to be noted that as to ail the taxes
involved therein, save for the years 1890 and 1891, there was not the
same question as was adjudged in the earlier case in 81 Ky. 189, and
as to those two years it was held that the bridge company was not
Uable. As to the other years, there was not the same question, be-
cause it had been held in previous cases referred to in said two cases
that section 174 of the Constitution of Kentucky, adopted September
28, 1891, which applied to ail years after 1891, had changed the rule
in regard to the liability of property in cities and towns not enjoying
the benefits of municipal government. The bridge company was held
not liable for the years 1890 and 1891, not on the ground of said
former adjudication, but because it had acted on it, and not collected
taxes from its tenants for those years, who were under an obligation
to it to pay ail its taxes. As to the cases cited by Judge Burnam in
said extracts from his opinions in support of the proposition there
laid down, none of them are to that efïect, save the Newport Case, to
which we hâve already referred. The Henderson Bridge Cases do
not involve any question as to res judicata, except that one decided
June 24, 1896, and in that case its décision was expressly waived. The
question in the case of Newport v. Masonic Temple Ass'n was the
same as that involved in the Louisville Bridge Company Cases as to
taxes after 1891. The charter of the Masonic Temple Association,
passed March 29, 1880, exempted its property from taxation. It had
been sued for taxes for several years prior to the new Constitution of
1891, and held not liable, because of this exemption. In a suit for
taxes after the adoption of that Constitution, it was held that that in-
strument repealed said exemption, and that hence the former adjudi-
cation was no bar to suit for said taxes. The only case so cited which
was in point was the Newport Waterworks Case, which is the pioneer
and leading authority in Kentucky upon the question under considéra-
tion.
The case of Negley, Sheriflf, v. City of Henderson was a suit by said
city against the sherifï of Henderson county to enjoin collection of
State and county taxes for the years 1896 and 1897 on its franchise to
operate waterworks in said city. In support of its claim not to be
liable for taxes on said franchise, the city alleged in its pétition that,
in a former suit by it against the sheriff, the circuit court of Hender-
son county had enjoined the collection of taxes on its tangible prop-
erty for the years 1894 to 1897, inclusive. It was held that the former
adjudication was not conclusive of the city's right to enjoin said fran-
chise taxes. Judge Du Relie said :
"Thls brings us to conslder the question of res Judicata. It was, In City of
Newport v. Commonwealth, supra, dlstlnctly and emptiatically held that an
adjudication as to the tax of one year did not create the estoppel of res judi-
cata against the tax for another year. It seems to us equally clear that it
does not create an estoppel against the collection of a différent tax upon différ-
ent property for the same year. If the one proposition be true, the other must
be true also."
The case of Bell County C. & I. Co. v. City of Pineville was a suit
by said company against said city to enjoin collection of taxes upon
its property within said city for the years 1895 to 1898, inclusive, on
129 F.— 51
802 129 FEDERAL EBPORTBB.
the ground that it was used for farming purposes, and derîved no bene-
fit from the city government. A judgment in a similar suit of the
Bell circuit court enjoining the collection of taxes for the year 1891
on the same ground was pleaded by the company as concluding the
question of its liability for the subséquent year's taxes. It was beld
that it had no such effect. Judge Du Relie said :
"The case of City of Newport v. Com., 50 S. W. 845, 51 S. W. 433, 45 L. R.
A. 518, is décisive of the question raised by this plea of res judicata."
It will be noted hère, though not referred to in the opinion, that the
rule as to liability of property in a city, not enjoying the benefits of
municipal government, to city taxation, was changed between the year
1891, taxes for which were involved in the former suit, and the years
1895 to 1898, inclusive, taxes for which were involved in the suit in
hand, by the Constitution of 1891, so that in no event was the doctrine
of res judicata applicable to the case.
The case of City of Frankfort v. Deposit Bank is somewhat novel
in its character. The Franklin circuit couit, in a suit by the city
against the bank for taxes for the years 1893 and 1894 under the reve-
nue law of 1892, adjudged, under authority of the décisions of the
Court of Appeals in the first Bank Tax Cases, that the bank was not
liable therefor, because it had an irrévocable contract, under the Hew-
itt law of 1886, exempting it from taxation other than under said
law. Thereafter, in a suit by the bank against the city in the United
States Circuit Court for the District of Kentucky, the latter was en-
joined from collecting taxes under said revenue law of 1892 for the
years 1895 to 1898, inclusive, on the ground of the adjudication that
it had such a contract in the former suit in the Franklin circuit court ;
and that notwithstanding that the Court of Appeals, in the second
Bank Tax Cases, had overruled its décision in the first Bank Tax
Cases, on authority of which the judgment of the Franklin circuit
court had been rendered. This judgment was affirmed by the Su-
prême Court of the United States on an appeal therefrom by the city.
Stone V. Deposit Bank of Frankfort, 174 U. S. 408, 19 Sup. Ct. 881,
43 L. Ed. 1027. After the décision of the Court of Appeals in the
second Bank Tax Cases, time for an appeal from said judgment of
Franklin circuit court not having elapsed, an appeal was taken there-
from to the Court of Appeals, and it reversed the judgment on author-
ity of its décision in the second Bank Tax Cases. On the return of
the case to the Franklin circuit court, the bank pleaded the judgment
of the United States Circuit Court, affirmed by the Suprême Court,
as to taxes from 1895 to 1898, inclusive, which had been based upon
said former judgment of Franklin circuit court as to years 1893 and
1894, in bar of the city's right to recover taxes for said years in said
suit. It was held that the plea was not good, and, on appeal to the
Court of Appeals, it affirmed the ruling of the lower court. In the
opinion, after showing that the doctrine of res judicata could not bo
applied in such a case, Judge Paynter added :
"However, we do not hold that the judgment of the fédéral court Is not a
bar to a recovery of the taxes for the years 1893 and 1894. This court, in City
of Newport v. Com., 50 S. W. 845, 51 S. W. 433, 45 L. R. A. 518, and Loulsville
Bridge Co. v. City of Louisvllle, 58 S. W. 598, heid that an adjudication as to
FIRST NAT. BANK V. CITT OF COVINGTOM. 803
one year's taxes Is not a bar to a recovery în the Utlgation as to any other
year's taxes."
This detailed examination of the cases relied on by défendants in
support of their contention that, according to the law as laid down in
the State courts, the former adjudication relied on herein is not con-
clusive of complainant's exemption from liability for the taxes involved
herein, because they are taxes for years différent from and subséquent to
the year for which the taxes involved therein were levied, leads to the
conclusion that the contention is correct, though some, if not most, of
said cases, for the grounds stated, are not in point, and in none of them
was the former adjudication based upon an exempting contract covering
ail of the years' taxes involved in both suits. I think that there can be
no question as to this. Complainant cites the cases of Thompson v.
Louisville Banking Co., 55 S. W. 1080 ; Hardwicke v. Young, 62 S. W.
10, decided by the Court of Appeals of Kentucky, as being contra
to défendants' contention in the matter under considération. Thèse
cases, however, are not against that contention. In each case the
same year's taxes v^^ere involved in that court on a second appeal.
Of course, a décision of the Court of Appeals that a certain year's
taxes are invaHd is binding as to the vahdity of that year's taxes on
a second appeal of that case to that court. And a holding that its
former décision in that same case is binding is not an authority in
favor of the position that a décision that one year's taxes rendered in
one case is binding in another case as to another subséquent year's
taxes.
It must be accepted, therefore, that the state courts, in view of said
décisions, would not give the effect to the former adjudication relied
on herein by complainant which it contends for, and which this court,
under the décision of the Suprême Court of the United States herein-
after cited, would otherwise be bound to give it. It remains to be
considered what efïect is to be given to this fact. And hère we are
not without authority proceeding from the Suprême Court. In the
case of Union & Planters' Bank v. City of Memphis (decided April 13,
1903) 189 U. S. 71, 23 Sup. Ct. 604, 47 L. Ed. 712, it was held that a
former adjudication in the state courts between the parties thereto in
relation to the liability of the former to the latter for taxes for the
years 1889 to 1891, inclusive, was not conclusive as to such liability
for the year 1899, because it was not conclusive in the state courts.
Mr. Chief Justice Fuller, in delivering the opinion of the court, said :
"It is enough that in Tennessee the doctrine of res judlcata Is not applica-
ble to taxes for years other than those under considération In the particulai
case, inasmuch as what effect a judgment of a state court shall hâve as res
judicata is a question of state or local law, and the taxes involved In this suit
are taxes for years other than those involved in the prier adjudication. Phœ-
nix Fire & Marine Ins. Co. v. Tennessee, 161 U. S. 174 [16 Sup. Ot. 4T1, 40 L.
Ed. 660]. In New Orléans v. Citizens' Bank, 167 U. S. 371 [17 Sup. Ct. 90.5,
42 L. Ed. 202], referred to by appellant's counsel, no clalm was made that the
judgment relied on would not hâve been res judicata in the state courts, and
attention was particularly called to the fact that the rule in Louisiana was
In accord with the conception of res judicata expounded in that case. As the
judgment pleaded had no force or efCect in the Tennessee state courts, other
than as a bar to the identical taxes litlgated in the suit, the courts of the
United States can afford it no greater efficacy. Cooper v. Newell, 173 U. S.
804 129 FEDERAL REPORTER.
555 [19 Sup. et. 506, 43 L. Ed. 808]; Metcalf v. Watertown, 153 U. S. 671 [14
Sup. Ot. 947, 38 L. Ed. 861] ; Chicago & Alton R. R. Co. v. Wiggins Ferry
Co., 108 U. S. 18 [1 Sup. et 614, 27 L. Ed. 636] ; Rev. St § 905 [U. S. Oomp.
St 1901, p. 677]."
This case is binding upon me, and settles the matter in accordance
with defendant's contention. It is true that in the cases hereinbefore
cited the Suprême Court held, as to certain of the banks involved
along with the complainant in the litigation which resulted in the dé-
cision in 97 Ky. 590, 31 S. W. 1013, that they were exempted from
other taxation than under the Hewitt law by an irrévocable contract ;
that said décision made the question res judicata as to subséquent
years. But at the time it so held, there had been no décision by the
Court of Appeals of Kentucky as to the effect of an adjudication in
relation to one year's taxes upon other years' taxes. Since then, as
we hâve seen, that court has taken the position that such adjudication is
not a bar to a considération of the question of the liability for the other
year's taxes on its merits. That being so, I feel bound by the décision
of the Suprême Court in the Tennessee case to hold that tTie former
adjudication relied on herein is not a bar to a considération of com-
plainant's liability for the taxes involved herein on the merits. And
so considering it, I am bound by the décision of the Kentucky Court
of Appeals in the second Bank Tax Cases, and of the Suprême Court
in the Owensboro Case, to hold, also, that complainant has no irrév-
ocable contract under the Hewitt law, and that therefore the com-
plainant is liable under the act of March 21, 1900, to the taxes which
hâve accrued or will accrue since its passage.
A decree will therefore be entered dismissing complainant's bill as
to said taxes, and permitting the decree entered pursuant to the opin-
ion of Judge Evans in relation to former years' taxes to stand as en-
tered.
SIMS V. UNION ASSUR. SOC.
(Circuit Court, N. D. Georgla. September 30, 1903.)
No. 1,571.
1. BANKRTrPTCT— Action bt Trustée— Jubisdiction of Circuit Court,
Where a bankrupt absconded a- short time before the bankruptcy pro-
ceedlngs were Instltuted, but his family remained In the same place, he
continued a résident there in such sensé as to give a Circuit Court of
the United States for that district jurlsdlction of an action by his trus-
tée against a forelgn corporation to collect a demand In favor of the
bankrupt Involvlng the jurisdictional amount, under Bankr. Act July 1,
1898, c. 541, § 23b, 30 Stat. 552, 553 [U. S. Comp. St. 1901, p. 3431], which
provides that suits by the trustée shall be brought only In the courts
where they mlght hâve been brought by the bankrupt, if the proceedings
in bankruptcy had not been Instltuted.
2. Insurance— Proofs of Loss— Authority of Receiveb to Makb.
Proofs of loss under a flre Insurance policy running to a bankrupt who
had absconded may lawfully be made by a receiver appointed by the court
of bankruptcy, and expressly authorized and directed by the order mak-
Ing the appointment to make such proofs.
SIMS V. UNION ASSUK. SOC. 805
8. Same— RiGHT OF Action on Polict— Failueb of Insueed to Complt with
Conditions.
Provisions of a policy of flre Insurance, that "the insured * * •
8hall * « * submit to an examination under oath by any person
named by this company and subscribe the same," and that no action shali
be maiutainable to recover on the policy untll after full compliance by
the Insured wlth ail its requlrements, give to the company a substantial
right, and the fallure of the insured to appear for examination after
a loss, in compliance wlth its demand, defeats an action on the policy,
although such fallure was due to the faet that the insured had abscond-
ed, and the action is brought by bis trustée in bankruptcy.
4. Same— CoNSTEUCTioN of Policy— Rights of Receivee.
A provision in au Insurance policy that, where the expression "insured"
is used therein, it shall include the "légal représentatives" of the insured,
does not entitle a receiver to take the place of the Insured in answer to
a demand by the company that the insured shall appear for examination
under oath respecting a loss, as required by the policy, although the
receiver was appointed for the express purpose of collecting the Insur-
ance; the insured having absconded and having been adjudged a bank-
rupt.
Action on Policy of Pire Insurance. Trial to the court by stipulation.
Gray, Brown & Randolph and Felder & Rountree, for complainant.
King & Spalding, for défendant.
NEWMAN, District Judge. George H. Sims, as trustée in bank-
ruptcy, brings this suit against the Union Assurance Society on a pol-
icy of fire Insurance issued to the bankrupt. By written stipulation of
the parties the case is submitted to the court for trial upon the issues
of law and fact raised therein without the intervention of a jury, and
there is an agreed statement of facts. The property covered by the
policy sued on was located in Maçon, Ga., and was destroyed by fire on
May 20, 1900. On May 29th, thereafter, E. G. Coflfman, the insured,
who resided with his family in Atlanta, absconded, and his whereabouts
was unknown at the time the proceedings occurred which give rise to
the questions raised in this case. Just prior to Coiïman leaving At-
lanta, a warrant was sworn out against him charging him with embez-
zlement of the funds of the Southern Agricultural Works, a concern
with which he was connected in Atlanta, and which had failed. On
the 8th day of June a pétition in involuntary bankruptcy was filed
against Coffman. Upon the filing of this pétition in bankruptcy, George
H. Sims was appointed receiver for the property of the bankrupt. On
motion of counsel for petitioning creditors an order was entered, a part
of which is as follows :
"That George H. Siins be, and he is hereby, appointed receiver as prayed,
wlth authority and direction to hold and préserve the assets until this bank-
ruptcy proceeding is dismissed or a trustée is qualifîed ; that the said receiver
be authorized and directed to make proofs of loss, and to comply with ail
the conditions of said policy of Insurance, so far as he can, and to do every-
thing that may be deemed necessary for the préservation and protection of
the' assets of said bankrupt, until the further order of the court."
Sims, as receiver, soon after his appointment as such, made up and
furnished to the Insurance company proofs of loss, verified by himself
and B. E. Willingham, who was président of the B. E. Willingham
Plow Company, which company had sold the prc^erty covered by the
80C 129 FEDERAL REPORTEE.
policy of insurance to Coffman, and vvhich company has an interest in
the policy to the extent of the amount of purchase money due it by
Cofïman. An affidavit was aiso made to tlie trutli of the proofs of loss
by M. B. McAfee, who in his affidavit stated that :
"At the time the said policy was issued, and from that time until after
the fire referred to In the foregoing proof of loss, the assured, E. G. CofCman,
resided in Atlanta, Georgia, and from the lOth day of April, 1900, to the 29th
day of June, 1900, and during the time when said flre occurred, déponent, as
agent for the said CofCman, had charge and supervision of said property.
That déponent was familiar with the same, having done considérable work
ou the machinery referred to in said proof of loss. That the allégations eon-
tained In said proof of loss are true, to the best of déponents knowledge and
belief."
Daniel W. Rountree, Esq., as attorney for Coflfman, joined in the
proof of loss. The agent of the insurance company acknowledged re-
ceipt of this proof of loss, but denied the right of the receiver to make
the proof, claiming that it should be made by E. G. Coffman, the in-
sured. No other objection was made to the proof of loss. The repré-
sentative of the company also notified Mr. Sims and Daniel W. Roun-
tree, Esq., as attorney for Coffman, that the company demanded the
right to examine Mr. Coffman under oath at the time specified in the
demand. Some correspondence ensued between Sims and the repré-
sentative of the company, which simply set out the respective conten-
tions as to the right of tlie company to require an examination of Coff-
man, under the circumstances. Coffman failed to appear at the time
and place named for examination, but George H. Sims, receiver, was
présent with his counsel, and the counsel then and there tendered Sims
to be examined by the défendant, or its agent or counsel, if they so de-
sired. The insurance company, through its counsel, refused to examine
Sims, and insisted on its right to examine Coffman.
The first question raised in this case is as to the right of the trustée
in bankruptcy to sue in the Circuit Court of the United States for this
district. Section 2^ of the bankruptcy act controls in this matter, and
that section reads as follows :
"(a) The United States Circuit Courts shall hâve jurisdiction of ail contro-
versies at law and in equity, as dlstlnguished from proceedings in bankrupt-
cy, between trustées as such and adverse claimants eoncerning the property
acquired or claimed by the trustée, in the same manner and to the same ex-
tent only as though bankruptcy proceedings had not been instituted and such
controversies had been between the bankrupts and such adverse claimants.
"(b) Suits by the trustée shall only be brought or prosecuted in the courts
where the bankrupt, whose estate is belng administered by such trustée, fiiight
hâve brought or prosecuted them if proceedings in bankruptcy had not been
instituted, unless by consent of the proposed défendant. * * *"
Act July 1, 1898, c. 541, 30 Stat. 552, 553 [U. S. Comp. St 1901, p. 3431].
I think, under the facts shown hère, this case is cognizable by the
Circuit Court for this district. While it is true that Coffman had lab-
sconded a few days before the bankruptcy proceedings were instituted,
it is agreed that his family continued to réside in Atlanta until some
time after such proceedings were instituted and after this suit was
brought against the insurance company by the trustée. The défendant
is a foreign corporation, and it must be held that Sims was a résident
SIMS V. UNION ASSUR. SOC. 807
o£ this district at the time the right of action accrued, and the action
is maintainable hère by the trustée in bankruptcy.
The next question is as to the sufficiency of the proof of loss. Coun-
sel for the insurance company earnestly contend that there is no au-
thority on the part of the receiver in bankruptcy to make the proofs,
and that, even with the affidavits of Mr. WiUingham and Mr. McAfee,
the proofs are still insufficient. I do not agrée with this contention.
The court by its order directed the receiver to make proofs of loss.
The order to this eflrect was made in an ancillary proceeding in the
bankruptcy case. It was a proceeding on the equity side of the bank-
ruptcy court, and looking to the collection of the amount claimed to
be due on this policy of insurance, and the préservation of the same for
the benefit of the creditors. On such a proceeding, the court, in my
opinion, could make an order appointing a receiver, who could be au-
thorized, as this receiver was, to take preliminary steps looking to the
collection of the loss on this policy. Thèse proofs were strengthened,
after they were sworn to by Sims, by the affidavits of Mr. Willingham
and Mr. McAfee, as has been stated.
A more difficult question, however, is as to the right of the insurance
company to require an examination under oath of the insured, and to
set up the failure of the insured to appear for such examination as a
défense in this action. A provision in the policy is that:
"Tlie insured * * * shall * • • submit to an examination under
oath by any person named by this company, and subscribe the same."
A further provision of the policy is that :
"No suit or action on this policy, (or the reeovery of any claim, sliall be
sustalnable in any court of law or equity until after full compliance by the
insured with ail the foregoing requirements. * * *",
This question was before the Suprême Court of Georgia in Insurance
Company v. Sims, Trustée, 115 Ga. 939, 42 S. E. 269. From a careful
examination of this décision, with the authorities therein cited, and
quite a number of other pertinent authorities, I am satisfied that the
décision of the Suprême Court correctly détermines the law of this
case. Référence to the able opinion in that case by Justice Cobb, and
to the authorities cited by him, renders any further discussion of the
question hère unnecessary.
The right of the insurance company to hâve the insured himself ap-
pear for examination under oath is a substantial and important one.
It is entirely différent, in my opinion, from the right to make the pre-
liminary proof of loss. There is a claim in the déclaration in this case
that the insurance company paid to the Willingham Plow Company the
amount due the plow company by Coffman, being the interest of the
plow company in the policy. This claim is met in the defendant's an-
swer by the statement that the payment to the Willingham Plow Com-
pany was by way of compromise and settlement of its claim. There is
nothing whatever in the agreed statement of facts upon this subject. It
must be taken as a fact, therefore, that whatever was paid the plow
company was by way of compromise of its claim; and even if a settle-
ment in full of a claim of a third party to a part of the proceeds of a
policy would be a récognition of liability on the whole policy, it cer-
808 129 FEDERAL EBPOBTER.
tainly would not be so where the payment is made to such third party
by way of compromise.
There is a provision in the policy that, where the expression "insured"
is used, it shall include the "légal représentatives" of the insured. I do
not think a receiver, even when appointed, as in this case, for the
particular purpose of collecting the insurance, can, in respect to the
right of the company to an examination under oath, take the place
of the insured.
Controlled by the provisions of the contract of insurance, and by
the overwhelming weight of authority bearing thereon, I am com-
pelled to hold that the failure of the insured to appear for examina-
tion under oath on the demand of the insurance company is a bar to a
right of action in this case; and upon that ground judgment will be
rendered in favor of the défendant
THE JAMES T. FURBER.
(District Court, D. Maine. April 25, 1904)
No. 98.
L Admiealty JtmisDicTioN— Subject-Matteb or Suit— State Stattiti: Cbe-
ATiNG Liens.
A State statute giving a lien on domestle vessels in certain cases can-
not enlarge the admiralty Jurisdiction of the fédéral courts, which dé-
pends on whether the subject-matta: of the suit is maritime in its na-
ture.
2. Same— Mabitime Conteacts— Lease of Wharf.
A lease of space at a wharf for use by a vessel at a flxed annual rent
is a lease of real estate, and not a maritime contract on which a suit in
admiralty ean be maintalned for the collection of the rent, since it bas
not necessarily any connection with navigation or the commerce of the
seas.
In Admiralty. Suit in rem to recover rent for wharf.
James C. Fox, for libelant.
Benjamin Thompson, for claimant.
HALE, District Judge. This is a libel în rem, filed in this c&art on
the igth day of September, 1903. It is brought by the libelant, a cor-
poration, the owner of Long Wharf, against the steamer James T.
Furber, for alleged wharfage. The third article of the libel allèges
that on May 30, 1902, Edward A. Baker, «s master of the steamship
James T. Furber, made and executed a contract with the libelant for
the use of a landing on Long Wharf ; also for wharf room for the érec-
tion of a waiting room on said wharf; and agreed to pay for the same
the sum of $200 a year as rent. Said article further allèges that the
libelee bas continued to occupy said wharf up to the time of the filing
of the libel, and that the accrued rent amounts to $250. By a seventh
article, added by amendment, the libel further allèges that at the time
î 1. Maritime liens under state statutes, see The Anaces, 34 C. O. A. 565,
T 2. See Admiralty, vol. 1, Cent. Dig. § 141.
THE JAMES T. FURBEB. 809
of furnishing said wharfage or landing and wharf room the steamship
James T. Furber was a domestic vessel, and that a lien exists thereon
as security for the libelant's daim. The libelant introduces in évidence
a written agreement or lease, which is as follows:
(Lease, Common Form.)
This Indenture, Made the thirtleth day of May In the year of our Lord
one thousand nine hundred and two,
Witnesseth, That the Proprietors of Portiand Long Wharf of Pcftland,
Maine, do hereby lease, démise and let unto Freeport and Portiand Steam-
boat Co. a landing for their steamer James T. Furber, above the landing of
the Brunswick and Portiand Steamboat Company, also wharf room for the
érection of a waiting room or shelter opposite the landing, but not so as to ob-
struct free passage to and from the said steamer landing below. Said steam-
er to hâve the landing as above when rnnuing and free dockage at the wharf
when not running.
To hold for the term of one year from the flrst day of June in the year one
thousand nine hundred and two, yielding and paying therefor the rent of
Two Hundred Dollars.
And said Lessee do promise to pay the said rent in four payments riz.
Fifty Dollars on July 15, 1902, Fifty Dollars on August 1/02, Fifty Dollars
on August 15/02, and Fifty Dollars on Sept. 1/02, and to qnit and deliver up
the premises to the Lessor, or their attorney, peaceably and quietly at the
end of the term aforesaid, in as good order and condition, — reasonable use
and wearing thereof, or Inévitable accident, excepted, — as the same are, or
may be put into by the said Lessor, and to pay no taxes duly assessed thereon
during the term, and for such further time as the Lessee may hold the same,
and not make or suffer any waste thereof ; and that he will not assign or
underlet the premises or any part thereof, without the consent of the Lessor
in wrlting, on the back of thls Lease. And the Lessor may enter to view
and make improvements, and to expel the Lessee if they shall fail to pay
the rent aforesaid, whether said rent be demanded or not, or if they shall
make or suffer any strip or waste thereof, or shall fail to quit and surrender
the premises to the Lessor at the end of said term, in maimer aforesaid,
or shall violate any of the covenants in thls Lease by said Lessee to be per-
formed.
And the premises shall not be oceupied, during the said term, for any pur-
pose usually denomluated extra-hazardous, as to flre, by Insurance Com-
panies.
In Witness Whereof The parties hâve hereunto Interchangeably set their
hands and seals, the day and year flrst above written.
Edward A. Baker. [Seal.]
Signed, Sealed and Delivered Proprietors of Portiand Long Wharf,
in Présence of By Daniel Chase, Clerk. [Seal.]
Frederick E. Berry.
The testimony shows that the James T. Furber was a small steamer,
used exclusively in Casco Bay, and that at the time of making the lease
she was in winter quarters at Merriirs Wharf, and had not been to Long
Wharf ; that she was then owned by some outside parties, not concern-
ed in making the lease ; that she was purchased on June 25, 1902, by
the parties who had taken the lease of the libelant's wharf, and was
taken to Long Wharf sometime between June 35 and June 28, 1902,
and that she later began to run between Portiand and South Freeport
as a passenger and freight steamer; that some time in the following
July the parties having the lease erected a small building for a waiting
room and freight shed in connection with the business in which the
steamer was engaged ; that the steamer continued to run on her route
until August 28, 1902, when she was hauled off on account of a break-
down, and did not résume her trips again that year ; that on September
810 129 IfHDBEAL EEPOETER.
6, the steamer was sold by the parties operating her to Charles H.
Baker, who, on October 27, 1902, sold her to his wife, Etta R. Baker,
the présent owner ; that the steamer remained at Long Wharf during
the winter of 1902 and until April 18, 1903, when the présent owner
put her in commission, and ran her on his own account, carrying pas-
sengers to the forts in Portland Harbor; that the steamer continued
landing at Long Wharf from April 18, 1903, to June 7, 1903, when, ow-
ing to the inability to get in and out of the dock, and the odors arising
from the dock, she found wharfage elsewhere ; that the lessee under the
lease continued in possession of the leased premises until the filing of
the libel, and that the building and a boiler, gangway, signs, and other
property are still upon that part of the wharf covered by the lease;
that, after the original lease expired by limitation, the lessee continued
to hold over, and up to the time of the filing of the libel was still in
the enjoyment of the premises leased as a tenant at will. It appears also
that during the time the steamer landed at Long Wharf during the
season of 1903 she occupied the berth covered by the lease.
The question which lies at the threshold of the case is, does the
suit involve such a "maritime contract" as to give the court jurisdic-
tion? Chapter 287, p. 255, of the Laws of 1889, now found in the Re-
vised Statutes of the State of Maine, c. 93, § 7, reads as follows :
"Ail domestic vessels shall be sub^ect to a lien to any part owner or other
person to secure the iJayment of debts contracted and advances made for
labor and materials necessary for their repair, provisions, stores, and other
supplies necessary for their employment, and for the use of a wharf, dry
dock, or marine railway, provided, that such lien shall in no event continue
for a longer period than two years from the time when the debt was con-
tracted or advances made."
It will be seen that the state law above quoted gives a lien "for the
use of a wharf, dry dock, or marine railway." In the above enumera-
tion the Législature evidently intended to embrace and group certain
maritime matters over which it created a Hen upon domestic vessels.
By the term "use of a wharf" it is évident that nothing more was in-
tended than "wharfage," which distinctly and obviously relates to the
navigation, business, or commerce of the sea, and has always been re-
garded as among the usual and necessary port charges of a vessel.
"Wharfage" is the use of a wharf furnished in the ordinary course of
navigation. A contract relating to "wharfage," as understood in the
laws and usages of maritime affairs, is clearly a maritime contract.
But there is a distinct différence between a claim for "wharfage" and
a claim for "rent of a wharf." Under such a lease as in the case at bar
the rent is payable, even though the vessel which is the subject of
the lease should never come near the wharf, and should never require
"wharfage" or "the use of a wharf." The contract, in the case at bar,
relates to real estate, and arises out of the relation of landlord and ten-
ant. The lease, which we hâve quoted, is in form and substance a lease
of real estate. It does not présent a "maritime contract," and cannot be
enforced by the admiralty court. The intention and the effect of the
state statute can be only to provide a remedy under a contract which
is distinctly and wholly "maritime." In The H. E. Willard, 53 Fed. 599,
in this district, Judge Webb said :
THE JAMES T. FXJRBEE. 811
"That State Législatures cannot restrict or extend the admlralty jurlsdlc-
tion exclusively vested in the fédéral courts bas been often decided, and is
conclusively settled. It follows, necessarily, that a lien given by a state
statute is not a test of jurisdiction. If it were, a State Législature might,
at pleasure, modify the jurisdiction of courts of admiralty by creating or
abrogating liens not given by the maritime law. The distinction between
cases in which the cause of action is itself within the admiralty jurisdic-
tion and cases in which the admiralty, independently of the local law, bas
no jurisdiction, must not be forgotten or neglected."
The case was affirmed by Mr. Justice Gray, Circuit Justice, and
Judge Putnam, Circuit Judge. Mr. Justice Gray, speaking for the
Circuit Court, said (52 Fed. 389) :
"The admiralty jurisdiction is conferred on the courts of the United States
by the Constitution, and cannot be enlarged or restricted by the Législature
of a state. When a right maritime in Its nature bas been created by the
local law, the admiralty courts of the United States may doubtless enforce
that right according to their own rules of procédure. * * * But no state
législation can bring within the jurisdiction of those courts a subject not
maritime in its nature."
In Boon v. The Hornet, Fed. Cas. No. 1,640, Judge Hopkinson,
speaking for the court, said :
"A lien given by a state law may be enforced by a suit in rem in the ad-
miralty. But it must be such a suit as the admiralty can entertain; in
other words, in cases where the contract and service are maritime, or of the
admiralty and maritime jurisdiction, although they are not such as would
authorize a proceeding in rem in the admiralty, because there was no lien
by them, yet when the state law supplies this deflciency, and gives a lien, a
court of admiralty will enforce it. This is not enlarging the jurisdiction
of the court, but the remedy of the party. It does not authorize a suit in
the admiralty on the subject-matter not of admiralty jurisdiction, but only
gives to the party a particular proceeding or remedy for the recovery of his
debts."
In Plummer v. Webb, 4 Mason, 380, Fed. Cas. No. 11,233, Judge
Story held "that, in order for a contract to be cognizable in admiralty
it must be maritime in ail its éléments ; that a contract of a spécial na-
ture is not so cognizable merely because the considération of the con-
tract is maritime service. The whole contract must in its essence be
maritime." In his opinion he says :
"I cannot see that the whole contract is hère of a maritime nature. There
are mixed up in it obligations ex contractu not necessarily maritime, and so
far the contract is of a spécial nature. In cases of a mixed nature it is not
a sufficient foundation for admiralty jurisdiction that there are involved
some ingrédients of a maritime nature. The substance of the whole con-
tract must be maritime. * • * In such a mixed contract the whole would
most approprlately belong to a court of common law. * * ♦ I bave no
désire to strain the jurisdiction, so as to reach cases of an ambiguous char-
acter. Let them be left to the common forum of the litigant parties."
In The Advance (D. C.) 60 Fed. 766, Judge Brown said :
"In the présent case the wharfage was not furnished In the ordlnary course
of navigation, nor upon the request or upon any contract of the master or
any other officer of the ship. The évidence leaves no doubt that it was fur-
nished in accordance with the terms of an unsigned mémorandum of agree-
ment, which had been previously drawn up upon negotiatlons between the
libelant and the président of the steamship company some two years before.
* * * The agreement provided for the payment of thirty dollars a day
for the entire use of the Robert Pier for loading and discharging outward
812 129 FBDB3RAL KBPOETEE.
and inward càrgoes, and also for receivîng and storing frelght on the pier
pending the arrivai of any of the company's steamers. * * * During the
occupancy of the ships it was 'optional to use the pier for any and ail pur-
poses which may be construed for the best interests of said steamship Com-
pany or any of its patrons.' The agreement also gave the right 'to use, free
of charge, for outward freight on the ground floor, one of the libelant's stores.'
* * * The agreement, it is obvions, embraced eonslderably more than
ordinary wharfage rlghts. The contract rates were very much in excess of
the statutory rates, evidently in considération of the storage and other facil-
îties offered. The contract was, in fact, rather a contract for the exclusive
use of the vi^harf and a partial use of the stores. * * » The price was
not aecording to tonnage, like the usual wharfage rates. * * * I am con-
strained to find that there is no maritime lien in this case, (1) beeause what-
ever wharfage privilèges were furnished were furnished under a contract
which for a single price per day embraced other valuable considérations,
the supply of which would give no lien upon the ship, and it is impossible
to divide the price per day into différent parts ; (2) beeause the évidence in-
dicates beyond doubt, as it seems to me, that the deallngs were upon a Per-
sonal contract between the two companies, which did not look to any crédit
of the ship, but only to the Personal responsibility of the steamship company."
In 71 Fed. 987, 18 C. C. A. 404, Judge Wallace, in affirming the above
décision, speaking for the Circuit Court of Appeals, made this finding :
"Where wharfage, together with the use of warehouses and plers for receiv-
ing and storing freight, were furnished to several vessels belonging to a domes-
tic corporation for a single price per day under a contract with it, held that no
lien arose, flrst, beeause the contract embraced other valuable considérations,
the supply of which would give no lien against the ship, and which cou!'T
not be separated from the wharfage proper ; and, second, beeause the con-
tract did not look to the crédit of the ship, but only to the Personal respon-
sibility of the owner."
See, also, the elaborate opinion upon this subject of Chief Justice
Alvey in Upper Steamboat Co. v. Blake, 2 App. D. C. 51.
It has been repeatedl)' decided that, to give the court jurisdiction
over a contract as maritime, such contract must relate to the trade and
business of the sea; it must be essentially and wholly maritime in its
character ; it must provide for maritime services, maritime transactions,
or maritime casualties ; and the provisions of a state statute, the inten-
tion of which is to give a party a remedy under his contract, cannot
be enlarged by construction, analogy, or inference. The Paola (C. C.)
32 Fed. 174; The Steamship Yankee Blade, 19 How. 82, 15 L. Ed. 554;
Scott V. The Morning Glory, Fed. Cas. No. 12,542; The Lottawanna,
21 Wall. 558, 22 L. Ed. 654; The Corsair, 145 U. S. 335, 12 Sup. Ct.
949, 36 Iv. Ed. 727. In Campbell v. H. Hackfeld & Co., 125 Fed. 696
(a case just pubHshed), the Court of Appeals in the Ninth Circuit dé-
cides "that the employé of a contracting stevedore has no remedy in
the admiralty court against his principal for personal injuries, while dis-
charging a vessel, through the alleged négligence of said contracting
stevedore." In an elaborate opinion Judge Ross shows the tendency of
the courts of this country in late cases to restrict admiralty jurisdiction.
He says:
"The fundamental princlple underlying ail cases of tort, as well as con-
tract, is that, to bring a case within the jurisdiction of a court of admiralty,
maritime relations of some sort must exist, for the all-sufflcient reason that
the admiralty does not concern itself with non-maritime affairs."
In the case at bar the contract is a lease of real estate. The con-
tract itself and the évidence relating to it do not présent any question
THE JAMES T. FTJRBER.
813
relatîng to navigation or to the commerce of the seas. Such a contract
as is presented in the case before us is not within the jurisdiction of an
admiralty court.
Upon examina tion of the évidence in the case the court finds, too,
that, if the case were within our jurisdiction, even then the clear inten-
tion of the parties as shown by the proofs indicates that the rent of the
landing and wharf room was furnished solely upon the crédit of the
owner, and not upon the crédit of the vessel. In the case of The Iris,
100 Fed. 104, 40 C. C. A. 301, Judge Putnam has construed a similar
statute, and has held that it is not essential to the right of a lien that
material or repairs should be furnished under a mutual understanding
between the contracting parties tliat crédit should be given to the ves-
sel. He says :
"We are therefore to look at the terms of the statute, which contain no
requirements beyond that the supplies and labor be furnished to a domestic
vessel on the order of the owner, or of somebody representing him or em-
ployed by him."
He puts the statute in the same group "with the ordinary statutes
giving liens on buildings, as to which it is clear that no évidence is re-
quired that either of the parties contemplated crédit to the property."
He says f urther, however :
' Ot course, with référence to ail property domestically located, whetber
buildings or vessels, circumstances may be such * * * as to show that
the parties intended that crédit should be given solely to the purchaser."
The case at bar cornes within the exception just quoted which Judge
Putnam makes in The Iris, and which he discusses in Cuddy v. Clément,
113 Fed. 454, 51 C. C. A. 288. In this case last cited he fuUy states
the principle. In Prince v. Ogdensburg Transit Co. (C. C.) 107 Fed.
978, Judge Coït found that the conduct of the parties proved "that
the dealings are not with the ship, or upon her crédit, but upon the Per-
sonal responsibility of the owners." In Ex parte Lewis, Fed. Cas. No.
8,310, Judge Story referred to a séries of authorities which decided
"that, where the parties enter into a personal contract for a spécifie sum,
it is a discharge of the implied lien resulting by opération of law."
Taylor v. The Commonwealth, Fed. Cas. No. 13,787; The J. M. Welsh,
Fed. Cas. No. 7,327; N. Y. Mail Steamboat Co. v. The Baltic, Fed.
Cas. No. 10,213.
In the case before us the lease itself and ail the proofs tend to show
that a Personal crédit was intended, and that a lien upon the vessel was
not within the contemplation of the parties. The whole testimony is in-
consistent with such a lien, either for the time covered by the lease or
after the expiration of the lease; for the évidence leads the court to
believe that the parties to the contract intended that crédit should be giv-
en solely to the lessee named in the lease, whose agent Baker appears
to hâve been in signing the contract. The steamer had not been at
the libelant's wharf at the time the lease was made, and, indeed, had
Tiot been purchased, so far as the testimony shows ; so that it is difficult
to see how crédit to the steamer could hâve been within the minds of
the parties to the contract. It was the clear intention of the lessor
to give crédit to the owner of the steamer, and not to the steamer
itself, under and during the life of the lease. No other intention is
6X4i 129 FEDERAL REPORTER.
proved as to the time after the expiration of the lease. The case is
then brought within the exception referred to in The Iris, supra, and
within the rule in Cuddy v. Clément, supra, and in The Electron, 74
Fed. 689, 21 C. C. A. 12. The court is, then, of the opinion that the
libel must be dismissed. As the court finds, however, that it has no
jurisdiction, it must order the dismissal of the libel without costs.
The decree may be entered. Libel dismissed, without costs.
THE MARY F. CHISHOLM.
(District Court, D. Maine. April 26, 1904)
No. 74.
1. Admiealtt JtrRisDicTioN—GBouNDS— State Statuts Enlaksing Remedt.
A State statute givlng a lien on vessels cannot enlarge the jurisdiction
of a court of adniiralty, whlch dépends upon whether or not the subject-
matter of the suit Is maritime.
2. Same— Maritime Contkact— Sai,e of Supplies to Fishermen.
A sale by a merchant to flshermen, who are about to go on a flshing
voyage under a lay oontract, of tobacco, clothing, and other articles for
their personal use, Is not a maritime transaction, and a court of adml-
ralty is without jurisdiction of a suit to enforce collection therefor, al-
though a lien is clalmed on the vessel under a state statute.
8. Maritime Lien— Supplies— Maine Statute.
Clothing, tobacco, and other articles for personal use sold to flshermen
about to start on a flshing voyage under a lay contract are not "supplies
necessary for the employment" of the vessel, within the meaning of the
Maine statute givlng a lien for such supplies.
1. Admiraltt— Costs— Dismissal foe Want of Jurisdiction.
Where a suit in admlralty Is dismissed for want of jurisdiction of tiie
subject-matter, costs cannot be allowed.
In Admiralty. Suit to enforce statutory lien for supplies.
William H. Gulliver, for libelants.
Benjamin Thompson, for claimant.
HALE, District Judge. This is a libel in rem, filed on the I4th day
of July, 1903, by Rosenberg Bros., clothing dealers in the city of Port-
land, against the fishing schooner Mary F. Chisholm, hailing from the
port of Portland, and owned by résidents of Portland, to recover for cer-
tain articles furnished and delivered to 14 members of the crew of that
vessel on the 20th day of September, 1902. The libel allèges that the
schooner Mary F. Chisholm is a domestic vessel, of the burden of 70
tons, belonging to the port of Portland ; that on the 20th day of Sep-
H 1. Admlralty jurisdiction as to enforcement of liens under state laws, see
Qote to The Electron, 21 C. O. A. 21.
See Admlralty, vol. 1, Cent. Dig. § 194.
1[ 2. Admlralty jurisdiction as to matters of contract, see notes to The Rich-
ard Wlnslow, 18 C. C. A. 347; Boutln v. Eudd, 27 C. C. A. 530.
1 3. Maritime liens for supplies and services, see note to the George Dumois,
15 C. C. A. 679.
THE MARY F. CHISHOLM. 815
tember, igo2, said schooner was in the port of Portlatid, and in need of
supplies for her crew ; that the libelants, at the request of the master,
furnished to and for said vessel necessary supplies, clothes to her crew,
and other articles which were necessary for her employment ; and that
ail of said materials and clothing were necessary for the crew of said
vessel, were furnished on the crédit of said vessel, and became a lien
thereon under the statutes of the state of Maine. The libel further sets
out that the master and owner of said vessel hâve refused to pay for
such supplies.
The évidence shows that at the time of the furnishing of the alleged
supplies the Mary F. Chisholm was a domestic vessel, owned by several
responsible persons living in Portland ; that she was, and for some time
prior thereto had been, engaged in seining for mackerel ; that during
the season of 1902 she made three mackerel trips ; that the crew of said
vessel on said trips consisted of six men, ail told ; that the libelants were,
at the time of furnishing the alleged supplies, engaged in the clothing
and furnishing business at No. 377 Fore street, in the city of Portland ;
that they had been engaged in such business for about 15 years, and
during that time had been owners of fishing vessels, and interested in
furnishing supplies to that class of vessels ; that they were familiar with
the custom which exists in Portland respecting the manner in which
that class of vessels were sailed, and had seen settlements made between
crews and owners for the fish taken on such vessels; that the master
of this vessel had traded with the libelants for many years, and, after
completing a voyage, he had been in the habit of settling with them for
such supplies as the crew had purchased ; that the crew of the Chisholm
were shipped under the usual lay, and by the usual shipping articles, for
the mackerel fishery, in and by which it was agreed that the owners, at
their own expense, should equip the schooner with ail necessary tackle
and apparel for the carrying on of the mackerel fishery, and that the
vessel should be so equipped and fitted during the fishing season ; that
the master and the several fishermen comprising the vessel's crew agreed
to pursue the mackerel fishery in said schooner ; that the shipping arti-
cles further provided that the fish caught, or the proceeds thereof,
should, after deducting the expense of the "great gênerai charges" —
which were to consist of "packing, hoisting, towage, and commissions"
— be divided as f ollows : To the owners of the vessel, for their share,
one-half part thereof, the residue to be divided among the fishermen,
including the master, they agreeing to pay for water, medicines, ail
canned goods, eggs, and pickles, cook's wages, and for tarring and hang-
ing the seine; that some time in July, 1902, prior to the schooner going
out on her second trip, the master and some of the schooner's crew went
to the libelants' store and obtained certain outfits, such as rubber boots,
oilskins, mittens, and tobacco; that the libelants made out a bill for
each lot of goods to the men to whom the goods were delivered ; that
upon her return from the fishing voyage, some time in September, the
master paid the libelants the amount coming due from the respective
men, and deducted it from their share of the catch ; that about Septem-
ber 22, 1902, a few days after the settlement for the supplies purchased
in July, Capt. Ellsworth went to the libelants' store with 13 or 14 men
who were going out in the schooner for another trip ; that the libelants
2 00
1 25
10
9 00
4 00
2 00
3 25
50
2 00
1 00
1 25
75
816 120 FEDERAL REPORTER.
furnished the crew with the following articles as called for, which vvere
to be chargée as on the last trip :
Tobacco, of the value of Ç23 60
Two pairs of sllppers, "
Stocklngs, "
Mlttens,
Tbree pairs rubber boots, "
One pair of leatlier boots, "
One pair of shoes, "
One lot of oilclothes, "
One bat,
ïwo blankets, "
One quilt, "
One shirt, "
One mattress, "
The answer allèges that the schooner was being fitted eut for a
mackerel voyage on the customary lay; that the supplies in question
were furnished to the varions members of said vessel's crew who de-
sired to make purchases for their own personal use; that the payment
therefor was to be deducted from the shares coming due to the various
members of the schooner's crew upon the settling up of said fishing voy-
age. It dénies that any of the goods in question were supplied upon the
crédit of the vessel, or were in any way necessary for her employment
in said business ; and that, as no fish whatever were taken on the voyage
in question, no moneys became due to the crew.
The court must first consider whether the subject-matter of the suit
is within its jurisdiction. Jurisdiction is conferred upon the admiralty
court, as upon ail the fédéral courts, by the Constitution, and cannot be
enlarged by our state Législature. In The James T. Furber, 139 Fed.
808, this court has quite fully discussed the law pertaining to juris-
diction over contracts where a lien is claimed under the state statute ;
in that case we hâve cited many authorities touching this gênerai sub-
ject. It is perfectly clear that the subject-matter presented by a suit
must be distinctly, essentially, and wholly maritime in order to give the
court jurisdiction. The test, then, to be appHed, is, does the suit arise"
from the necessities of navigation or from any matters relating to the
commerce of the sea? In Diefenthal v. Hamburg- American Packet Co.
(D. C.) 46 Fed. 397, Judge Billings said :
"It [the eontract before the court in that case] is, after ail, net a contract
where, untll supplies are actually furnished, the contractors relied upon any
ship, but upon the other contracting parties. * ♦ * It was a gênerai con-
tract for the sale and delivery of provisions. * * ♦ The objection to the
jurisdiction, whIch it seems to me must prevail, is that this contract, though
relating reœotely to navigation and maritime commerce, is separated so far
from them that it did uot spring from the necessities of navigation, and is not
within the considérations which make It essentially and dlstlnctlvely mari-
time."
The court found that the contract in that case was personal in its
character, preliminary in its nature, and not within the admiralty juris-
diction.
In Scott v. The Morning Glory, Fed. Cas. No. 12,542, Judge Hoff-
man said:
"It is impossible not to recognize. In the récent décisions of the Suprême
Court, a disposition to confine the admiralty jurisdiction within narrower
THE MABY F. CHISHOLM. 817
llmits, and restrict maritime liens to fewer cases tlian is desired by its more
ardent adTOcates. * • • To give the court jurisdictlon over a contract as
maritime, It must relate to the 'trade and business of the sea,' or must be es-
sentially maritime in its character. • * * If the jurisdiction be construed
to embrace net only matters directly connected with maritime commerce, but
those tending toward or conducive to it, a large and indefinite fleld would be
opened."
In The Persévérance, Fed. Cas. No. 11,017, Judge Betts said:
"The essential requisite of a contract, to bring it within the jurisdictlon
of an admiralty court, Is that it must be one which is to be performed on the
high seas, or which bas relation to a maritime service. The most enlarged
interprétation of the term 'maritime,' as applied to the jurisdictlon of this
court, bas not been extended beyond subjects or engagements which are nec-
essarily connected with services to be rendered on tide waters, or supplies
furnished to vessels in aid of a voyage, or labor, or materials, or cash advan-
ced to obtain such supplies."
In The Kingston (D. C.) 23 Fed. 200, Judge Nixon said :
"There bas been much eonflict in the courts as to the meanlng of the new
rule, but since its adoption the Suprême Court, in The Lottawanna, 21 Wall.
580 [22 L. Ed. 654], held that the District Courts of the United States, having
jurisdiction of the contract as a maritime one, might enforce laws given for
its security, even when created by the state laws. The inference is plain that
the court meant to affirm that no such jurisdiction exlsted when the contract
was not of a maritime nature."
See, aiso, the décision of Judge Webb in The H. E. Willard (D, C.)
53 Fed. 599; the décision of Mr. Justice Gray and Judge Putnam in the
same case (C. C.) 52 Fed. 387; The Corsair, 145 U. S. 335, 12 Sup.
Ct. 949, 36 L,. Ed. 727; The Orléans, 11 Pet. 175, 9 L. Ed. 677; Peo-
ple's Ferrv Co. of Boston v. Beers, 20 How. 393, 15 L. Ed. 961 ; Camp-
bell V. Hackfeld & Co., Etd. (C. C. A.) 125 Fed. 696. In the late case,
Reliance Lumber Co. v. Rothschild (D. C.) 127 Fed. 745, the court,
Judge McPherson,treats in a very complète manner of the subject which
we are now discussing, and at page 749 he cites the controUing décisions
relating to undertakings which are merely personal or preliminary in
their character, and which, while they lead to maritime contracts, do
not themselves relate to the business and commerce of the sea. The
same case aIso décides that, where a libel is dismissed for want of juris-
diction of the subject-matter, costs cannot be allowed. This décision in
référence to costs is upon the authority of Citizens' Bank v. Cannon,
164 U. S. 324, 17 Sup. Ct. 89, 41 L. Ed. 451. It is clear, then, that the
jurisdiction dépends upon the nature of the subject-matter of the con-
tract, and not upon the existence of a lien. The lien affects only the
form of the proceedings and the character of the remedy.
In the case before us, the court is of the opinion that there is not suf-
fîcient in the proofs before it — the material part of which has been
stated — to give jurisdiction to the court. The articles which were to be
furnished to the fishermen were tobacco, clothing, rubber boots, and
other articles relating to the personal use of the fishermen who were to
sail the boat upon shares. The goods were delivered to the fishermen,
nearly ail of them, on the land, in the store of the libelant. There is not
enough in the évidence to bring the case within the rule which we hâve
cited, that supplies must be for the ship, in aid of the voyage. If we
should hold that the furnishing of thèse goods was a maritime contract,
129 F.— 52
818 129 FEDERAL REPORTER.
then the furnishing of a single fisherman, in a common fishing boat,
with wearing apparel, might, under the same rule, be held to pertain
to navigation, and to be within admiralty jurisdiction. The contract
appears to the court to be one of the undertakings which courts hâve
classed as personal and preliminary, and not within the jurisdiction of
the admiralty court.
Another question is raised, by the language of the statute, as to
whether, even if the court had jurisdiction, the supplies furnished were
"necessary" supplies. The state statute, which is found in chapter 287,
page 255, of the Laws of 1889, and in the Revised Statutes of the
state of Maine, chapter 93, § 7, is as follows :
"AU domestic vessels shall be subject to a lien to any part owner or other
person to secure the payment of debts contracted and advances made for labor
and materials necessary for their repair, provisions, stores, and otlier supplies
necessary for their employaient, and for the use of a wharf, dry dock, or
marine railway, provided, that such lien shall in no event continue for a longer
period than two years from the time when the debt was contracted or advan-
ces made."
Under this statute the lien is given to vessels to secure the payment
of "stores and other supplies necessary for their employment." Were
the supplies furnished in this case necessary for the employment of the
vessel ? The courts hâve repeatedly held that a state statute giving a
lien for supplies furnished at a home port must be construed strictly,
and cannot be sustained by construction, analogy, or inference. The
Steamship Yankee Blade, 19 How. 82, 15 L. Ed. 554; The Paola (C.
C.) 32 Fed. 174; The Kiersage, Fed. Cas. No. 7,762; The Red Wing
(D. C.) 14 Fed. 869. In The Cabarga, Fed. Cas. No. 2,276, Mr. Justice
Nelson, sitting upon the circuit, said :
"Where the materialman or ship chandier bas parted with the materlals
and stores, and the ship has received the beneflt of them, • * * in those
cases only the lien attaches. In the case of materlals and repairs, the articles
furnished enter into and give value to the ship itself ; and in the case of
stores, they are necessary to enable her to earn ber freigbt."
In the case at bar, we hâve already said that the efifect of a state
statute cannot be to enlarge the jurisdiction of the court, but only to
furnish a remedy which did not exist before the statute was passed.
Boon V. The H omet, Fed. Cas. No. 1,640. We are of the opinion that
the remedy within the contemplation of the state statute must be limited
to such articles as are for the benefit of the ship, in aid of the voyage,
and necessary in order to make the ship aCcomplish her undertaking.
We do not think the supplies furnished in the case before us are sup-
plies, within the meaning of the statute, which were necessary for the
employment of the vessel. Thèse supplies ail relate to the personal
needs and convenience of men who are preparing to enter upon a fishing
voyage. Even though the crew would not hâve shipped if they could
not hâve had thèse supplies furnished them, still this fact cannot enlarge
the statute, and make the articles which were furnished them "neces-
sary" within the meaning of thè law. The articles furnished were
useful and convenient for the personal needs of the fishermen, but
were not, in our opinion, "supplies necessary for the employment of the
vessel."
The decree may be entered : Libel dismissed, but without costs.
LAKE STEAM SHIPPING CO. V. BACON. 819
LAKB STBAM SHIPPING CO., Limited, v. BACON.
(District Court, S. D. New York. May 2, 1904.)
1. SHIPPING— Chartek Party— Disablino of Vessel et Stranding.
A steamshlp was ehartered for a voyage and return at a stlpulated hlre
per month. The charter required her to be tight, stauneh, aud strong,
and in every way fitted for the service. It also contained a provision
that In the event of loss of time from "breakdown of machinery, stranding,
fire, or damage preventing the working of the vessel for more than twenty-
four runnlng hours the payment of the hlre shall cease untll she be agaln
In an efficient state to résume her service." On the return voyage the
shlp stranded, and was several days on the rocks, reeelvlng such injury
to her huU that two of her holds contalning cargo were partly fllled with
water, and remalned se through the remalnder of the voyage, whlch was
completed only by the use of extra pumps, which were procured at a
port to which she deviated after the accident. Held that, the vessel ùot
havlng been in an efficient state after the stranding, no charter hlre eould
be reeovered after that time, except for the time taken In dlscharging.
2. Same— Haetee Act.
The Harter Act, Act Feb. 13, 1893, c. 105, 27 Stat. 445 [U. S. Comp. St.
1901, p. 2946], does not affect the rights of parties under a charter party,
Iii Admiralty. Suit to recover charter hire.
Convers & Kirlin, for libellant.
Wheeler, Cortis & Haight, for respondent.
ADAM S, District Judge. This action was brought by the Lake
Steam Shipping Company, Limited, as owner of the steamship Avon-
more, to recover from Daniel Bacon, the charterer, the hire of the steam-
ship from April i6, 1903, to May 13 following, amounting, it is claim-
ed, to $2545.14. It is admitted by the libellant that the hire was prop-
erly suspended from April 11, 1903, at 7 A. M. until April 16, at 10:30
A. M., the period during which the vessel was stranded on Anegada
Reef, Virgin Islands. The amount originally claimed was $2526.
There was an error in the libel as to the time the vessel was removed
from the reef, which the testimony shows was April i6th at 10:30
A. M. instead of 4 P. M. as first claimed. A correction of the error
involved an additional claim of $19.14.
The steamship was in the service of the charterer, under a charter
party dated January 28, 1903, which provided "for one round trip to
the West Indies ^''^/or Mexico" and further :
"4. That the Charterers shall pay for the use and hire of the sald vessel
flve hundred and eighty pounds (£580) Brltish Sterling per calendar month,
commenelng on and from the day of her delivery, as aforesald, and at and
after the same rate for any part of a month ; hire to continue until her de-
livery, with clean holds to the Owners (unless lost) at a port in the United
States north of Hatteras at charterers option. • ♦ •
6. Payment of the said hlre to be made in cash half monthly in advance In
New York. • * »
15. That in the event of the loss of time from deflciency of men or stores,
breakdown of machinery, stranding, fire or damage preventing the working of
the vessel for more than twenty-four runnlng hours, the payment of the hlre
shall cease until she be agaln in an efficient state to résume her service, but
1[ 2. Statutory exemption of shipowners from llability, see note to Nord-
Deutscher Lloyd v. Insurance Co., 49 C. C. A. 11.
820 120 FEDEEAL KEPOETBK.
should she, in conséquence, put into any port, other than that to whieh she is
bound, the Port Charges and Pilotages at such Port shall be borne by tlie
Steamer's Owners, but should the vessel be driven Into port, or to anchorage
by stress of weather, or from any accident to the cargo, such détention or
loss of tlme shall be at the Charterer's risk and expansé."
The défense of the respondent is stated in the answer as follows :
"Slxth. Further answering the libel herein, the respondent allèges that by
reason of the stranding of the Steamship 'Avonmore' on the llth day of April,
1903, she sustalned very serions damage, and when flnally floated, her bottom
plating had béen entirely perforated iu several places to such an extent that
No. 1 hold was practically flooded, and No. 2 hold, partly so. After said
steamer was floated she made her vvay to St. Thomas where temporary repairs
were made, but said repairs were not sufflcient to render the vessel fit for
service under the provisions of the charter party, and she was not in condi-
tion to load or discharge cargo without damage to same and was not in many
ways tight, staunch, strong and fit. On account of this fact the Master de-
viated from the direct course to be as near as possible to land in case he was
imable to control the leaks by the use of spécial pumps placed aboard at St.
Thomas.
On said voyage to New York, the sugar cargo was still further damaged by
reason of the leaky conditions of the steamer, and upon her arrivai at that
port ail of the sugar stowed in No. 1 compartment had entirely melted ; and
the sugar stowed in No. 2 compartment was seriously damaged. By reason of
the damage sustained to cargo in the No. 1 and No. 2 holds, the respondent
was unable to collect a large part of the freight to which he would bave other-
wise been entitled. By reason of the damaged condition of the cargo, the dis-
charge of the said steamer was also very seriously delayed at New York, and
the respondent ineurred extra expansé. After said discharge the steamer was
dry docked and repalred at the port of New York, said repairs, as respondent
is informed and believes, having required an expenditure of $48,000 before
the steamer could be again put iu a fit condition for service. Respondent bas
paid hire in full to the llth of April, 1903, at 7 A. M. when the steamer
stranded, and bas refused to pay ail hire since that date under the provisions
of clause 15 of the charter."
The testimony shows, that on a return trip of the steamer to New
York from Port of Spain, Trinidad, for which voyage she was sub-
ciiartered by the respondent herein to the Trinidad Shipping and Trad-
ing Company, I,imited, which had loaded her with a cargo of sugar
in bags, stowed in the five holds of the vessel, she sailed from Port
of Spain on April gth, 1903, at 5 P. M. On the iith, at 7 A. M., she
stranded on the reef stated, which is on the westerly side on the Ane-
gada Passage, owing to the existence of an uncharted westerly cur-
rent which set the vessel out of her course and led to the disaster. Aft-
er efforts were made to float the vessel by the use of her own steam and
anchors, it was found necessary to place a part of the cargo in small
boats and to jettison a considérable quantity, by which means the ves-
sel was removed from the reef on the i6th of April at 10:30 A. M.
The bottom of the vessel was seriously injured by pounding on the
reef and she began to leak shortly after she stranded. When she float-
ed ofï the reef she had 19 feet of water in the fore-hold and about
3 feet in the No. 2 compartment. She then proceeded towards St.
Thomas, 45 miles distant, for the purpose of having the damage exam-
ined and to get assistance. She arrived there on the i6th of April,
about 5 45 P. M., and was then about 2 feet by the head, but had no
more water in her than when she started after the stranding, it having
been kcpt down by pumping. When the harbor master at St. Thomas
LAKE STEAM SHIPPING CO. V. BACON. 821
learned that the vessel carried a foui bill of health, owing to small pox
having existed at Port of Spain at the time of her departure from there,
she was quarantined and ail personal communication with the shore for-
bidden for eight days. At the expiration of such time, the master and
chief engineer were permitted to go ashore but the vessel was not grant-
ed full pratique. Subsequently steps were taken towards holding a sur-
vey and it was recommended that the cargo be discharged as soon as
practicable but the recommendation could not be carried out because
nobody would work on the vessel owing to her foui bill of health.
On arrivai at St. Thomas, the master cabled the position to the re-
spondent but he gave no orders.
A subséquent survey was held by two ship masters, dififerent per-
sons from those constituting the first board, but the recommendation
made by the last board that the vessel be dry docked for repairs could not
be carried out and the master, having consulted the other officers of the
steamer, including the chief engineer, concluded to proceed to New
York. At this time the water in the fore-hold had been reduced from i6
to lo feet. The water in the main-hold was being kept down to about 14
inches by pumping. Extra pumps were taken aboard, with men to
work them, to assist the ship's engines, and the surveyors having had
the assistance of divers who went under the bottom of the vessel and re-
ported favorably as to her seaworthiness, concluded that she was in a
fit condition to proceed with safety to her destination and gave a cer-
tificate to that effect. The pumps were set up in the holds and the ves-
sel proceeded. At this time there were only 10 feet 3 inches in No. i
hold and 4J^ inches in No. 2. The other parts of the ship were dry.
She was then drawing 22 feet aft and 16 feet forward. During the voy-
age, the pumps became somewhat choked at times, and although the
hand pumps were kept working continually, the water increased in the
holds, so that when she arrived in New York, she had 19 feet in No. i
and 8 inches in No. 2.
Upon arrivai at New York, May 6th, she was ordered by the respond-
ent to a dock, and he provided stevedores and delivery clerks for dis-
charging purposes. When the cargo was delivered in due course, the
respondent collected $6,084.65 freight.
The vessel was then docked and her bottom repaired at a large ex-
pense, about $49,000, some part of which was probably due to injuries
which could not hâve caused the Jeaks in the bottom.
The question to be determined is, whether the charterer was justified
in refusing to pay hire for any part of the period from April i6th at
10 :30 A. M., the time the vessel was removed from the reef after the
stranding, and can appropriate for his own benefit the freight collected,
without accounting in any way to the ship owner, to whom he dénies
that anything is due.
The respondent contends that the steamer was never in a fit condition
for service after the stranding until the repairs in New York were made
and that he was excused from paying any hire under the I5th clause of
the charter party, which provided that in the event of loss of time from
breakdown of machinery, stranding * * * damage preventing the
working of the vessel for more than 24 running hours, the payment of
hire should "cease" until she should "be again in an efficient state to
822 129 FEDERAL REPORTER.
résume her service." He argues that the word "again" has a distinct
meaning, because the contract provided in the beginning that the steam-
er should be placed at the disposai of the charterer "being on her deliv-
ery, ready to receive cargo, and tight, staunch and strong and in every
way fitted for the service."
It is admitted by the libellant that the obligation of the charterer to
pay hire ceased by reason of the stranding and it is argued by the re-
spondent that unless she subsequently was in a condition to be tendered
to him under the charter, the contract to pay hire did not again become
operative.
On the other hand, the libellant argues with much force that as the
vessel actually rendered services to the charterer, in bringing a part of
the cargo home, payment should be made for it.
The détermination of the controversy is difficult owing to the equity
of the libellant's position but it must be determined according to the
law. The case has been presented on the theory of hire being due,
and resisted upon the ground that legally none was due.
The authorities- seem to be with the charterer. It is apparently well
settled that where the provisions of a contract of this kind hâve not
been complied with by the owner of a vessel, there can be no recovery
of hire, even though the charterer has had some benefit from her serv-
ices in the carriage of the goods. The gênerai doctrine will be found
discussed in Parsons' Ship. & Admy. 319; Donahoe v. Kettell, r Cliff.
35,Fed. Cas. No.3,980 ; Cook v. Jennings, 7 Durn. & East. 381, and Ho-
garth V. Miller, App. Cas. 1891, 48, 7 Aspinall, Mar. Cas. N. S. 1. In
the last case, a chartef containing a clause substantially like the ont
involved hère was under considération. The vessel there started on
her return voyage from the west coast of Africa to Harburg on the
Elbe. En route, her high pressure engine broke down and she had to
put into Las Palmas in the Canary Islands. Eventually, the voyage was
completed by the use of her low pressure engine and with the aid of a
tug, which was partly paid for by the vessel. An action for the hire was
instituted and allowed in the lower court, excepting one and a half
days' détention from her damaged condition. On appeal to the Court of
Session — 16 Sess. Cas. (4th) 599 — the judgment was reversed, the court
holding that the ship was not in an efficient state and that the owner hacl
no claim for hire after the accident, excepting for a part of the time
occupied in discharging cargo at the place of destination. On appeal
to the House of Lords, supra, the décision of the Court of Session was
affirmed, excepting that the owner was allowed full time for the dis-
charging on the ground that the ship was in an efficient state for that
particular employment.
The libellant hère divides his claim for hire into 4 parts : (a) The
time occupied in proceeding from the reef where she stranded to St.
Thomas, (b) the delay in St. Thomas, (c) the period of the voyage from
St. Thomas to New York and (d) the period while the vessel lay in New
York occupied with the discharging, claimed to be from May 6 at 1 1 :3o
A. M. until May r6 at 4 Pi M., when she was delivered to her owner.
(a & b) The accident caused a déviation from the vessel's course to
New York and what occurred during such déviation, is attributable to
the disaster, which includes the voyage to St. Thomas and the deten-
UNITED STATES V. LEWI3. 823
tion there. The fact that the vessel was quarantined at St. Thomas on
account of having come from an infectée! port has no bearing, although
ordinarily the charterer is bound to furnish a clean bill of health. The
Shadwan (D. C.) 49 Fed. 379 ; afïïrmed, sub nom. Donkin v. Herbst, 55
Fed. 1002, 5 C. C. A. 381. Hère, it does not appear that the absence of
such a bill would hâve made any différence, if the vessel had not de-
viated from her course on account of her injuries.
(c) During the voyage to New York, the ship was in a crippled condi-
tion and not entitled to hire under the contract. The libellant is not
aided by the Harter Act, which was designed to modify the relations
previously existing between vessels and their cargoes. The Delaware,
161 U. S. 459, 471, 16 Sup. et. 516, 40 L. Ed. 771.
(d) The time occupied in discharging in New York, however, is di-
rectly within the ruling of Hogarth v. Miller, supra, and the libellant is
entitled to recover in such respect. If the parties can not agrée upon
the amount due hereunder, a référence may be had to détermine it.
Decree for the libellant, with an order of référence.
UNITED STATES ex rel. DRURY et al. v. LEWIS, Jall Warden.
(Circuit Court, W. D. Pennsylvania. April 28, 1904.)
1. FEDERAL COUBTS— JUBISDIOTION— HaBEAS CoBPUS.
A court or judge of the United States has jurisdlctlon to grant a writ
of habeas corpus for the purpose of reviewing the legality of the re-
straint of liberty of any prisoner held in custody under the authority of
a State, whenever it is alleged that he is in custody for an act doue or
omitted in pursuance of a law of the United States, or in violation of
the Constitution or of a United States law or treaty.
2. United States Soldiers— Offenses — States— Civil Jurisdiction.
Under Eev. St. § 1342, art. 59 [U. S. Comp. St. 1901, p. 955], providlng
that when any offlcer or soldier is accused of a capital crime, or of an
offense against the person or property of any citizen of any of the United
States punishable by the laws of the land, the commanding ofHcer and
the officers of the régiment, troop, battery, etc., to whieh the person so
accused belongs, except in time of war, shall, on application duly made,
use their utmost endeavor to deliver him to a civil magistrate in order
to bring him to trial. Held, that such- enactment was a distinct récog-
nition by Congress of the gênerai jurisdiction in time of peace of the civil
courts of the state over persons In the United States milltary service ac-
cused of offenses against citizens of the state.
3. Same— Homicide— MiLiTARY Guabd— Arrests.
Where, on a writ of habeas corpus to obtain the discharge of two
members of the United States army from an indlctment for murder,
found by the courts of the state where the offense was committed, it ap-
peared that the shooting of deceased occurred in the streets of a clty,
outslde the military réservation, while petitioners were endeavoring to
arrest deceased for déprédations committed on such réservation, but the
évidence was confllctlng as to whether the shooting was done whlle de-
ceased was endeavoring to escape or after he had stopped, thrown up
his hands, and offered to surrender, the détermination of whether the
shooting was justifiable was within the exclusive jurisdiction of the state
courts.
H 1. Jurisdiction of fédéral courts in habeas corpus, see note to In re Huse,
25 C. C. A. 4.
824 129 FEDEEAL EBPORTER.
John C. Haymaker and John Marron, for the Commonwealth of
Pcnnsylvania.
James S. Young, U. S. Atty., for respondents.
ACriESON, Circuit Judge. On the 8th day of February, 1904, the
date of the issuing of this writ of habeas corpus, and at the tinie the
writ issued, the petitioners, Ralph W. Drury and John Dowd, were in
the custody of Edward Lewis, warden of the jail of Allegheny county,
Pa., by virtue of a commitment issued on that day out of the court of
oyer and terminer for the county of Allegheny and commonwealth of
Pennsylvania. This commitment was based on an indictment found
on December 16, 1903, in the said court of oyer and terminer, which
indictment charges thèse petitioners, in the iirst count thereof, with the
murder of one William H. Crowley, and in the second count thereof
with the manslaughter of the said Crowley, on September 10, 1903.
The petitioners had been at large on recognizance in the sum of $5,000,
taken by the court of oyer and terminer, conditioned for their appear-
ance in that court to answer the indictment. With the consent of the
petitioners, and by prearrangement with their bail, they were surren-
dered by their bail on the 8th day of February, 1904, for the purpose
of enabling them to apply for and prosecute this writ of habeas corpus.
The case disclosed by the évidence submitted on the hearing of this
writ is as follows: On September ID, 1903, Ralph W. Drury was a
commissioned officer of the United States army, of the rank of second
lieutenant, and had under bis command a detachment of 20 enlisted
men, of whom John Dowd was one, stationed at Allegheny Arsenal, in
the city of Pittsburg, in Allegheny county, Pa. ; this arsenal being a
subpost of Ft. Niagara, N. Y. From time to time before September
10, 1903, some copper down spouts and eave-troughs had been stripped
from some of the buildings on the arsenal grounds, and the material
stolen, and other déprédations, such as the breaking of window lights,
had been committed on the arsenal property. Lient. Col. Robertson,
the commanding officer at Ft. Niagara, on the occasion of an inspection
of Allegheny Arsenal in July, 1903, had directed Lient. Drury to use
his best endeavors to stop the déprédations, and to that end ordered him
to establish a patrol of the guards day and night upon the arsenal
grounds, and to apprehend and arrest any person or persons committing
déprédations on the arsenal property. Shortly before 10 o'clock on
the morning of September 10, 1903, having received word that some
persons were stealing copper from one of the buildings on the arsenal
grounds, Lieut. Drury took John Dowd, then on guard duty, and an-
other private soldier (each of the latter being armed with a rifle and
ammunition), and, passing out of the arsenal grounds through the gâte
on Butler street, the three proceeded by way of Butler street and Al-
mond alley toward the Allegheny Valley Railroad. Drury informed
the two men of the reported stealing of copper, and instructed them to
continue down Almond alley and arrest any person coming from the
arsenal. Drury himself left Almond alley at the corner of Willow street,
and went by Willow street to Fortieth street (which runs along, but out-
side of, the arsenal wall), and proceeded down Fortieth street to its
foot, where were congregated three or four half-grown boys or young
UNITED STATES V. LEWIS. 825
men, among whom was William H. Crowley, aged about 19 or 20 years.
Thèse persons fled in différent directions when they saw Lieut. Drury
approaching. Crowley ran from the foot of Fortieth street away from
the arsenal property in the direction of Forty-First street, keeping on or
near the Allegheny Valley Railroad. When he was about 100 yards
from the arsenal wall, Crowley was shot by Dowd, who aimed and fired
his rifle at Crowley. At the time of the shooting, Drury, Dowd, and
Crowley were ail off the ground belonging to the United States. Each
one of the three then stood either upon a street of the city, on the Alle-
gheny Valley Railroad, or on private property. The rifle bail struck
Crowley's left thigh, inflicting a mortal wound, from which he died
on the evening of the same day, September 10, 1903.
Thus far the facts are not open to dispute under the testimony. But
as to the circumstances attending the shooting of Crowley the évidence
is conflicting, and leads to opposite conclusions of fact as one or other
version of the aiïair given by the witnesses is accepted. Dowd testifies,
and the petitioners bave produced other évidence tending to show, that
as Crowley fled he was called on several times by Dowd, who followed
him, to hait, with warning that unless he halted Dowd would fire ; that
Crowley did not hait, but continued his flight, and to prevent his escape
behind or through a lumber pile Dowd fired, and that Drury did not or-
der Dowd to fire, and was not connected with the shooting save by the
fact that he ordered the arrest of any person coming from the arsenal.
On the other hand, two witnesses who were présent {Mrs. Long and
Miss Terwillerger) testify that before the shot was fired Crowley stop-
ped, turned around, and, facing the pursuing soldier (Dowd), threw up
his hand, said, "Don't shoot," "I will corne back," or "I will give up,"
and just then Lieut. Drury said "Fire !" and Dowd fired the shot that
killed Crowley. The testimony of at least one other witness tends to
corroborate the account of the transaction given by the two named
women as above recited. It is not for me to say whether or not the
witnesses who hâve testified thus on the part of the commonwealth are
mistaken.
In view of ail the évidence herein, should this court interfère to pre-
vent the trial of the petitioners upon the indictment in the state court —
take the petitioners out of the custody of the authorities of the state,
and discharge them finally without trial by any civil court in the reg-
ular administration of justice? This is the question which confronts
me. Undoubtedly, a court or judge of the United States is authorized
to grant a writ of habeas corpus for the purpose of inquiring into the
cause of the restraint of the liberty of any prisoner held in custody un-
der the authority of a state, whether by virtue of an indictment or oth-
erwise, whenever it is in due form alleged that he is in custody for an
act done or omitted in pursuance of a law of the United States, or is in
custody in violation of the Constitution or of a law or treaty of the
United States, and to proceed in a summary way to détermine the
facts, "and thereupon to dispose of the party as law and justice require."
But in the exercise of this authority the courts and judges of the United
States are to be governed by the principles laid down by the Suprême
Court in the cases of Ex parte Royall, 117 U. S. 241, 6 Sup. Ct. 734, 29
L. Ed. 868, Whitten v. Tomlinson, 160 U. S. 231, 16 Sup. Ct. 297, 40
826 129 FEDERAL REPORTER.
L. Ed. 406, and Baker v. Grice, 169 U. S. 284, 18 Sup. Ct. 323, 42 L.
Ed. 748. The doctrine of those cases is that, except in instances of pe-
culiar urgency, or where there is no jurisdiction in the state court to tr}-
the prisoner for the offense charged (as were the cases In re Neagle.
135 U. S. I, 10 Sup. Ct. 658, 34 L. Ed. 55, In re Waite [D. C] 81 Fed.
359, and Ohio v. Thomas, 173 U. S. 276, 19 Sup. Ct. 453, 43 L. Ed. 699),
the court or judge shoufd not discharge the prisoner in advance of his
trial in the state court ; and even after the final détermination of the
case in the state courts should generally leave him to his remedy by writ
of error from the Suprême Court of the United States.
As the primary question hère is whether the petitioners are amenable
to the state court upon the indictment found therein, it is proper to quote
at length one of the articles for the government of the armies of the
United States prescribed by section 1342 of the Revised Statutes of the
United States [U. S. Comp. St. 1901, p. 955], viz. :
"Art 59. When any officer or soldier is accused o( a capital crime, or or any
offense against the person or property of any citizen of any of the United
States, which is punishable by the laws of the land, the commanding officer,
and the offlcers of the régiment, troop, battery, company, or detachment, to
which the person so accused belongs, are required, except in time of war,
upon application duly made by or In behalf of the party injured, to use their
utmost endeavors to deliver him over to the civil magistrate, and to aid the
offlcers o( justice in apprehending and securing him in order to bring him to
trial. If, upon such application, any officer refuses or willfuUy neglects, ex-
cept in time of war, to deliver over such accused person to the civil magis-
trates, or to aid the offlcers of justice in apprehending him, he shall be dis-
missed from the service."
This enactment is a distinct récognition by Congress of the gênerai
jurisdiction in time of peace of the civil courts of a state over persons in
the miHtary service of the United States who are accused of a capital
crime, or of any offense against the person of a citizen committed with-
in such state. Such criminal jurisdiction has always been exercised by
the state courts. Coleman v. Tennessee, 97 U. S. 509, 514, 24 L. Ed.
II 18. Clearly, the indictment against the petitioners présents a case
prima facie cognizable by the state court. Does the évidence disclose
any ground to defeat that jurisdiction, or show a case requiring inter-
férence by this court to prevent the trial of the petitioners upon the in-
dictment? I feel constrained to answer negatively. The shooting of
Crowley did not take place upon the land purchased by the United States
for military purposes by consent of the Législature of the common-
wealth of Pennsylvania, but outside the arsenal property. It occurred
within the territorial jurisdiction of the state court in which the indict-
ment is pending^the only civil court which could hâve jurisdiction to
try the petitioners for the alleged unlawful killing of Crowley. The
shooting was not done in obédience to a command to fire given to Drury
and Dowd by their superior officer. It will be remembered that the
shooting which Dowd did and Drury is alleged to hâve directed was,
according to the testimony for the commonwealth, of a man who had
ceased flight and offered to surrender. It may be conceded that it was
the right and duty of the petitioners to pursue and arrest Crowley, who
was suspected (justly, it now seems) of being concerned in the larceny
of some pièces of copper taken off one of the arsenal buildings, but it
IN EE MILGRAUM <fc 03T. 827
by no means follows that the homicide, as testified to by the witnesses
for the commonwealth, is net rightfully the subject of judicial investiga-
tion in the orderly course of procédure by the civil courts having juris-
diction of such offenses as are charged in this indictment. Crowley,
nioreover, was a citizen of Pennsylvania. He was not in military serv-
ice, nor subject to military law. The case is wholly unlike the cases of
United States v. Clark (C. C.) 31 Fed. 710, and In re Pair (C. C.) 100
Fed. 149. In the former of thèse cases the shooting occurred within a
military réservation of the United States, and was of a military convict
(a soldier) by a military guard to prevent the escape of the convict. In
the other case (In re Fair) the person shot was a military prisoner held
in a fort of the United States under a charge of désertion, who, with
violence, had overcome his military guard, and was immediately pursued
beyond the fort by soldiers on guard duty, who fired to prevent his
escape. Moreover, in each of those cases, and, indeed, in every case
brought to my attention wherein a United States court or judge upon
habeas corpus has discharged a prisoner in custody under state author-
ity, the facts entitling the prisoner to exemption from state control
were undisputed. This was so in the cases In re Neagle, supra ; In re
Waite, supra ; In re Lewis (D. C.) 83 Fed. 159; United States v. Fuell-
hart (C. C.) 106 Fed. 911 ; In re Turner (D. C.) 119 Fed. 231 ; and Ohio
V. Thomas, supra. But in the présent case there is a serions confîict of
évidence involving an important issue of fact, namely, whether Crowley
was shot while fleeing to escape arrest, or after he had stopped and
turned around, and virtually had surrendered. It is very clear that on
a habeas corpus hearing such as this it is not compétent for the court
to détermine upon conflicting évidence whether the person under indict-.
ment in the state court is guilty or innocent of the offense of which he
is accused. Ex parte Crouch, 112 U. S. 178, 180, 5 Sup. Ct. 96, 28 L.
Ed. 690. Whether the shooting of Crowley was justifiable or excusable
must be determined by the state court to whose jurisdiction the peti-
tioners are subjected. That the petitioners will be protected by that
court in ail their légal rights is not to be doubted.
An order will be made discharging the writ of habeas corpus, and
reraanding the petitioners to the custody of the warden of the jail of
AUegheny county.
In re MILGRAUM & OST.
(District Court, E. D. Pennsylvania. May 6, 1904.)
No. 1,804.
1. Bankettptct—Dischaege— Objections— Spécifications— VEHincATioN bt
Attobnet.
Thougli spécifications of objection to a bankrupt's discharge should not
ordinarily be signed and verlfied by attorneys in fact or at law for ob-
jecting creditors, they may be so signed under exceptlonal circumstan-
ces.
2. Same— JoiNDEE or Cbeditobs.
Where several creditors of a bankrupt desired to urge the same objec-
tions to the bankrupt's discharge, they were not required to slgn separate
spécifications of objection by bankrupt order No. 32, providing that "a
828 129 FEDBIIAL REPORTER.
creditor shall enter hls appearance," etc., but were entitled to join in
the same spécification.
3. SaMB— AFFIDAVITS— SurFICIENCT.
Afladavlts to spécifications of objection to a bankrupt's discharge, sworn
to "to tlie best of afiiant's knowledge, information, and belief," were suf-
ficiently verified.
4. Same— Failuee to Kkep Books oï Account.
A spécification of objection to baukrupts' discharge, that sueh bank-
rupts, with intent to conceal their flnancial condition, destroyed, conceal-
ed, or failed to keep boolîs of account or records from which sueh condi-
tion might be ascertained, was not sutficiently spécifie.
6. Same— CoNCEALMENT of Merchandise.
A spécification of objection to bankrupts' discharge alleglng that, with-
In four months immediately preceding the flling of the pétition, the banlc-
rupts transferred, removed, destroyed, or eoncealed their property, with
intent to defraud their creditors. In that, about a week prier to the flling
of the pétition, and at other times, they eoncealed large quantifies of mer-
chandise in a certain house, with intent to hinder, delay, and defraud
their creditors, and thereafter, on a day specified, removed and eoncealed
other large quantifies of merchandise from their place of business with
like intent, was sufflclent.
In Bankruptcy. Motion to Dismiss Spécifications of Objection to
Discharge.
Henry N. Wessel, for bankrupts.
Keator & Johnson and Reber & Downs, for objecting creditors.
J. B. McPHERSON, District Judge. One ground of complaint
against thèse spécifications of objection to the bankrupts' discharge
is that they are signed and sworn to by attorneys in tact and in law,
and not by the creditors themselves. I cordially agrée to the propo-
sition that aiïidavits of agents and attorneys are usually objection-
able, and should be discouraged. The practice of this court forbids
them ordinarily, and I hâve no intention of relaxing the rule on this
subject; but exceptional circumstances occur when they seem to be
necessary, and I think this is sueh a case. Clause 9 of section i (Act
July I, 1898, c. 541, 30 Stat. 544 [U. S. Comp. St. 1901, p. 3419]) rec-
ognizes the possibihty of sueh a situation by providing that " 'créditer'
shall include anyone who owns a demand or claim provable in bank-
ruptcy, and may include his duly authorized agent, attorney or proxy."
The spécifications are also attacked because they are signed by
four creditors, acting by their attorneys ; the argument being that ob-
jections to a discharge can only be made by a creditor acting singly.
This contention rests largely on the grammar of order No. 33 — "A
creditor * * * shall enter his appearance," etc. It seem need-
less to take up much time over this argument. If two or more cred-
itors see fit to adopt the same objections, I can see no reason why
they may not reach that result by signing the same paper, for they
could certainly do so by signing separate copies of the original. Their
action is équivalent to the exécution of as many copies of the spéci-
fications as there are signers, and each signer is individually Hable for
his own act. There is nothing joint about the paper. It is simply a
device to avoid the multiplication of copies.
H 4. See Bankruptcy, vol. 6, Cent. Dig. § 714.
IN EK MILGRAUM & OST. 829
Neither do I see any force in the objection to the affidavits because
they déclare that the facts are true "to the best of [affiants'] knowl-
edge, information, and belief." This phrase is objected to as vague
and uncertain, and in some connections it may perhaps deserve thèse
epithets. Usually, however, it is as far as any man should be asked
to go in taking an oath — the instances are infrequent, I think, when
an assertion that facts are true can be properlv made without qualifi-
cation of any kind--— and the Suprême Court of the United States has
thought the phrase to be unobjectionable, as may be seen by exam-
ining the afifidavit to form No. 2. No doubt, it was expected that this
afifidavit would ordinarily be taken by a principal ; but, if the prin-
cipal is permitted to be thus cautious, I think that his agent, vvho is
only allowed to take his place under exceptional circumstances, ought
not to be obliged to assume a heavier burden.
The fîrst spécification, however, is plainly insufficient. It is merely
a gênerai statement, following the language of the act (chapter 541,
§ 14b, 30 Stat. 550 [U. S. Comp. St. 1901, p. 3427]), "that said bank-
rupts hâve, vvith intent to conceal their financial condition, destroyed,
concealed, or failed to keep bocks of account, or records from which
such condition might be ascertained." This has been so often decided
to be bad, that nothing more need be said upon the subject.
But the second spécification, in my opinion, is sufRciently spécifie.
It déclares :
"That said bankrupts hâve, within a tlme subséquent to the flrst day of the
four months Immediately preceding the filing of the pétition against them,
transferred, removed, destroyed, or concealed, or permitted to be removed,
destroyed, or concealed, their property, with intent to hlnder, delay, and de-
fraud their creditors, in this: that said bankrupts did on or about December
1, 1903, or about one week prior to the flling of the pétition against them, and
at other times, remove and conceal large quantities of their merchandise to
the house of Léon Wiesen, No. 529 N. Sixth street, in the city of Philadelphia,
with the intent to hinder, delay, and defraud their creditors; and in this:
that said bankrupts did further, on the 19th day of November, 1903, and at
other times, remove and conceal, or permit to be removed and concealed, large
quantities of merchandise, consisting of toys, notions, and pens, from their
place of business, at 303 Market street, Philadelphia, with the intent to hin-
der, delay, and defraud their creditors."
This is definite enough to advise the bankrupts clearly what they
may expect to meet, and, if they receive information of that quality,
they are treated as fairly as the bankrupt act requires. As it seems
to me, to compel nicety of pleading in spécifications of objections to
a discharge is more likely to lead to the escape of dishonest men from
their liabilities, than to protect honest debtors from the spiteful at-
tack of disappointed creditors.
The clerk is directed to send the second spécification to the référée
for investigation and report.
830 129 FEDERAL EKPORTER.
EBLLT ▼, GRAND CIRCLB, WOMBN OF WOODORAFT.
(Circuit Court, D. Washington, E. D. May 2, 1904.)
No. 1,131.
1, Fedeeal Courts— REMOVAt of Cause— Spécial Proceedings— Mandamus.
A proceeding for mandamus under 2 Ballinger's Ann. Codes & St. § 5765,
authorizing sueh proceedings to be commeneed by Xhe filing of a motion
supported by affidavits, and. autliorizing the assessment ol! damages and
costs when a judgmeut is given in favor of the applicant, together wlth
the issuance of a peremptory writ, is a spécial proceeding, and not a suit
"of a civil nature at common law or in equity," and, not being ancillary
to any other case of which the fédéral court had acquired jurisdiction,
was not removable to such court
Spécial proceeding, by motion and affidavit for a writ of mandamus
to compel tlie respondent, a fraternal society, to restore the applicant
to membership in the society, and to her aïleged rights as holder of
a certificate of life insurance, and to pay damages for her wrongful
expulsion. Heard on a motion to remand the case to the state court
in which it was commeneed. Motion granted.
S. S. Bassett, for applicant.
Denton M, Crow and A. D. Stillman, for respondent
HANFORD, District Judge. This case was commeneed in the su-
perior court of the state of Washington for Spokane county by filing
a motion, supported by an affidavit, for a writ of mandate, to redress
alleged wrongs by compelling Ihe respondent, which is a fraternal
society, to restore the relator to her rights as a member of the society
and holder of a certificate of life insurance, and to pay her $il,ooo
as compensation for injuries alleged to hâve been suffered in con-
séquence of an illégal and unjustifiable attempt to exclude her from
the society, and forfeit her rights as holder of said certificate. The
procédure by which the case was initiated is the procédure provided
by the Code of Washington for mandamus cases, and the rehef prayed
for, including the recovery of damages, is sought through and by
means of a writ of mandate. The respondent caused the case to be
removed from the state court in which it was commeneed into this
court, and now resists a motion to remand on the ground that there
is included in the case an action to fecover damages.
The case is not an action for damages in any form of action known
to the common law, and it lacks the requisites as to pleadings and
jurisdictional process prescribed by the Code for the commencement
of a civil action. Provision is made in the chapter of the Code relat-
ing to mandamus proceedings for assessing damages and costs when
a judgment is given in favor of the apphcant, and in such cases a
peremptory writ must issue without delay. 2 Ballinger's Ann. Codes
& St. § 5765 ; Pierce's Code, § 1419. Under this statute the right to
recover damages is made dépendent upon a right to hâve a peremp-
tory writ of mandamus ; hence a case commeneed as a spécial pro-
ceeding cannot be converted into an ordinary civil action to recover
H 1. See Removal of Causes, vol. 42, Cent. Dig. § la
MASOii V C0NN0K8. 831
damages by repleading, and severance of the demand for damages
from the application for a writ of mandamus. The case is net ancil-
lary to any other case of which this court has acquired jurisdiction,
but is an original independent case, net cognizable in this court, be-
cause it is not a suit of a civil nature at common law or in equity,
and a writ of mandamus is not necessary to the exercise of the juris-
diction of this court. i8 Encyc. PI. & Pr. 171 ; Bath County v. Amy,
13 Wall. 244-251, 20 L. Ed. 539; In re Vintschger (C. C.) 50 Fed.
459; Gares v. Building Association (C. C.) 55 Fed. 209; Indiana ex
rel. City of Muncie v. Railway Company (C. C.) 85 Fed. i ; Hair v.
Burnell (C. C.) 106 Fed. 280.
Motion to remand granted
MASON V. CONNORS et aL
(Clrcnlt Court, D. Vermont Aprll 21, 1904.)
1. Phocess— Service on Nonbesident— "Vebmont Statuts;.
The statutes of Vermont do not authorize service of summons on non-
resident défendants by leaving copies ttiereof witli a codefendant wiio Is
served within tlie state, where tbere Is no attachment of property or
crédits.
2. Same— Nonbesident Tempoeaeilt in State.
Under the laws of Vermont, Personal service of summons on a défend-
ant within the state gives the court jurisdiction to render a Personal
judgment agalnst him, although he is a noaresident, and was only tem-
porarily vrithin the state, unless hls présence there was for a purpose
which rendered hIm privileged.
3. Parties — Action against Pabtneks— Seevice on Sinole Défendant.
The fact that a summons describes the défendants named therein as
"partners" wIU not prevent the action from proceeding agalnst one, who
aloue was served, where the déclaration does not show a joint cause of
action.
At Law. On plea to jurisdiction.
Ru fus E. Brown and R. W. Taft, for plaintifT.
Edmund C. Mower and Cassius R. Peck, for défendants.
WHEELER, District Judge, The plaintiff, of Burlington, Vt.,
took out a writ of summons and attachment in an action of assumpsit
against "E. F. Connors, D. E. Connors, and T. H. Connors, doing
business, under the firm name and style of Connors Bros., at New-
port,"' Vt, demanding damages in $5,000, summoning the Pauly Jail
Building Company, a corporation of Missouri, trustée, and returnable
to Chittenden county court of the state. The sheriff served the writ
at Newport on the second vice président and gênerai eastern manager
of the trustée, and by "giving J. H. Connors one of the défendants
within named, a true and attested copy of the original writ with my
return thereon endorsed," and by leaving with John H. Connors, "for
E. F. Connors and D. E. Connors each who réside without this State
and hâve no known agent or attorney within this State upon whom to
If 2. See Process, vol. 40, Cent Dig. { 70.
832 129 FEDERAL REPORTEE.
make service thereon, true and attested copies of this original writ
with my retùrn hereon thereon endorsed for said défendants."
The défendants, citizens of Massachusetts, appeared specially to
plead to the juris diction, removed the cause to this court, and hère
John H. Connors specially pleads to the jurisdiction of the state court,
and says that he is not and never has been résident of the state of
Vermont, and has no authorized agent résident there ; that the trustée
never had a place of business, or office, or agent résident there, but
is now, and has for more than five years been, in Boston, in the state
of Massachusetts ; that no attachment was made of the défendants'
property there, nor any service of copies made on the trustée for either
of the défendants ; and "that said John H. Connors was in the said
state of Vermont temporarily, and for the spécial purpose of superin-
tending the building of a courthouse, customhouse, and postoffice for
the United States at said Newport, with the intention of returning to
his domicile and résidence in said Boston, in said state of Massachu-
setts, as soon as said superintendence was ended" ; wherefore he
moves the court to abate the writ, dismiss the action, allow the de-
fendants their costs, and "make such other orders and judgments as
the circumstances require." The trustée has been discharged by the
plaintifif, and no service has, according to the face of the proceedings,
been made, otherwise than as stated, and the question of jurisdiction
has been heard upon them.
The John H. Connors appearing and filing this plea submits himself
as, and is taken to be, the J. H. Connors mentioned in the sheriff's
return, and the same person named as D. H. Connors in the writ, and
he is to be so considered. The différence in initiais may be a clérical
mistake in making the copies entered in this court.
In this state, when suit is commenced against a nonresident défend-
ant by trustée process, constructive service may be made upon the
défendant by copy left with the trustée for the défendant (V. S. 1319).
and if the trustée is discharged such service fails (Id. 1321). In this
case, there having been no service of copies on the trustée for the de-
fendants, and, if there had been, the trustée being discharged, there
is nothing in that behalf to aiïect the défendants as parties. When
Personal property of a nonresident is attached, substituted service may
be made by copy left with a known agent or attorney, and, for want
thereof, at the place of the attachment. Id. 1109. But hère was no
such attachment or service, and there was no service upon Edward
F. or Dennis E. Connors but by leaving a copy for each with John H.
Such leaving of a copy with one défendant for another, without any
attachment of property, or crédits as a basis for it, is not any mode
of service provided for by the laws of the state, or known to exist
under them. There was nothing resembling légal service upon those
défendants, and they had nothing to do to avoid becoming parties but
to keep away. As their appearance was limited to objecting to the
jurisdiction, it did not make them parties for any other purpose. They
cannot be held, and the suit must be dismissed as to them.
The writ required the sherifif to attach the goods, chattels, or es-
tate of tlie défendants to the value of $5,000, and then notify thereof
according to law, and also to notify them to appear before the court,
UNITED STATES V. OUNNINGHAM. 833
and to cause their appearance to be entered with the clerk, on or be-
fore a day named, to answer to the plaintifï in a plea of the case set
forth by the common counts in assumpsit. This notification, apart
from the attachment, was a summons, and the writ in that respect was
a writ of summons. The law of the state provides (V. S. 1095) : "A
writ of summons shall be served on the défendant by delivering him
a true and attested copy of the writ with the ofïicer's return thereon,
or," etc. This writ of summons appears to hâve been exactly served
upon the défendant John H. Connors by deUvering to him a true and
attested copy of the writ, with the return thereon, according to the
statute, witliin the jurisdiction. This made him a party, Hable to any
Personal judgment that could be rendered in the action, without référ-
ence to any attachment, whether a résident of the state or not, unless
he had some personal privilège from being sued that he could avail
himself of. The difïerence between making a défendant a party liable
to a Personal judgment by direct service upon him, and making his
property within the jurisdiction liable by constructive service, was well
shown by Judge Peck in Price v. Hickok, 39 Vt. 292, and by Mr. Jus-
tice Field in Pennoyer v. Nefif, 95 U. S. 714, 24 L. Ed. 565. As to
such Personal judgments, not résidence, but personal service on the
défendant within the jurisdiction only, is required. There are privi-
lèges from suit even, on coming into a jurisdiction for some purposes
(Bridges v. Sheldon (C. C.) 18 Blatchf. 507, 7 Fed. 17, but coming
for superintendence of a public work does not appear to be one of
them. That employment was merely his voluntary private business
which took him, but did not compel him, to go there. As the case
stands, the défendant John H. Connors appears to hâve been well
made a party to the suit, Uable to such personal judgment, if any, as
the plaintifiE may recover therein against him alone.
The writ described the défendants as partners, but the déclaration
does not set up any joint liability. Whether there may be question
about the several liability of this défendant upon any cause of action
on which recovery may be sought is not now material. The only
questions considered relate to the right of the plaintiflf to proceed to trial
upon such cause of action as he may claim to hâve against this défend-
ant, and upon the views stated he appears to hâve that right.
Plea of John H. Connors to the jurisdiction overruled, and other de-
fendants dlsmissed.
UNITED STATES v. CUNNINGHAM et aL
(District Court, D. Oregon. April 21, 1904.)
No. 4,741.
United States— Conspibact to Defbaud— Public Lands— FEArDULEWT
Entbies.
Where an ludlctment eharged that défendants did unlawfully conspire
together to defraud the United States out of a portion of Its public lands
on homestead entry, etc., such allégation Included ail proceedlngs as a
whole necessary to complète the transfer of the tltle.
129 F.— 53
834 129 FEDERAL KEPOETEE.;
2. Same— Pkestjmptions.
It woul4 be implîed from such allégation that the affldavlts and proofs
were such as were required by law to entltle the entryman to a patent,
and that such afBdavits and proof were false.
3. Same — Inconsistbnt Allégations.
An allégation in an indictment that défendants dld unlawfully conspire
to defraud the United States out of a portion of its public land, by means
"of procuring persons" to make false and fraudulent entries on such land,
was not Inconsistent with a further allégation as to the overt aets char-
gea, showing that the false proofs and entries were made by défendants
themselves, and not by others proeured by them.
On Demurrer to the Indictment.
John H. Hall, U. S. Atty.
John J. Balleray and J. H. Raley, for défendants.
BELLINGER, District Judge. The demurrer is overruled, upon
the authority of the case of Dealy v. United States, 152 U. S. 539, 14
Sup. Ct. 680, 38 h. Ed. 545. In that case the Suprême Court of the
United States holds an indictment good that charges that the de-
fendants did falsely, unlawfully, and wickedly conspire to defraud the
United States of the title and possession of large tracts of land by
means of false, feigned, illégal, and fictitious entries of said lands under
the homestead laws of the United States; the said lands being then
and there public lands of the United States, open to entry under said
homestead laws, etc. That case is identical with the présent case in
its essential features.
This indictment charges that the défendants did unlawfully con-
spire together to defraud the United States out of a portion of its
public lands, upon homestead entry, etc., by means of procuring per-
sons to make false and fraudulent entries upon such lands, at the
United States Land Office at La Grande, Or., by causing and procur-
ing persons fraudulently to make proof of settlement and improvement
upon said lands, etc. The allégation that the défendants conspired to
defraud the United States by making false and fraudulent entries upon
the public lands thereof includes ail the proceedings as a whole neces-
sary to complète the transfer of title. It is implied from this alléga-
tion that the affidavits and proofs were such as are required by law
to entitle the entryman to patent, and that thèse affidavits and proofs
were false.
It is objected to the indictment that the allégation that the défendants
intended to carry out their conspiracy by means of procuring persons
to make the false and fraudulent entries is negatived by the overt acts
charged, which show that the false proofs and entries were not proeured
to be made by other persons, but were made by the parties to the con-
spiracy themselves. The overt acts charged to hâve been done may
be innocent in themselves. They may not follow the particular de-
scription of what was proposed, and yet be sufficient for the purposes
of the indictment. I am of the opinion that the words "procure per-
sons" to make false proofs, etc., are not inconsistent with the making
of such proofs by the conspirators themselves.
WILSON V. FBBBDLin 835
WILSON y. FREEDLEY.
(Circuit Court, D. Vermoat May 10, 1904)
1. New Trial— Newi,y Discovered Evidence.
Where alleged newly discovered évidence vyith référence to damages,
alleged as a ground for a new trial, was in defendant's possession, and
might hâve been produced at the trial except for defendant's overslght,
and the évidence ofEered would not change the verdict to one for défendant,
but would at most only mitigate the damages, the, motion will be denied.
At Law.
For former opinion, see 125 Fed. 962.
Orion M. Barber, for plaintiff.
Fred M. Butler, for défendant.
WHEELER, District Judge. This is a motion for a new trial for
newly discovered évidence filed since a remittitur of damages required
to save the verdict on a motion to set it aside as against the évidence,
and for excessive damages. Wilson v. Freedley, 125 Fed. 962. The
issue to which the alleged newly discovered évidence would be appli-
cable was as to the value of the uncovering of good marble by tun-
neling into poor marble above it, and making room for channeling
machines for taking out the good. The plaintiff was stopped by the
défendant December 31, 1901, and the tunneling remained as the plain-
tif! had left it in the possession of the défendant from that time to
the time of the trial, October 13, 14, and 15, 1903. The plaintifï had
tunneled above and taken out marble, under his contract, in other parts
of the quarry near by, as designated with this part by the défendant.
As to the value of this work, the plaintiff testified that the tunnel-
ing above and taking out the marble in the other parts of the quarry
showed that of the 45 cents, the contract price per cubic foot of good
marble obtained, and from which 10 cents per foot for monthly defi-
ciencies was to be deducted, about 15 cents per foot was required for
the tunneling, 15 cents for the quarrying and removing, leaving 15
cents profit; and that he estimated the amount of good marble that
would be produced by quarrying this part that had been uncovered at
26,640 cubic feet ; that it had cost him $3,996 to uncover.
The défendant has owned thèse quarries many years, and works them,
and was working some of them near by under charge of an experienced
superintendent while the plaintiff was working thèse, and both ob-
served the plaintiff's work. As to this tunneling and uncovering, some-
times called "stripping," the défendant did not question the plaintiff's
estimate of the relative cost of stripping and quarrying, or the relative
amount of both to profits under the contract, and testified :
"It Is incomplète now, and would require at least two or three weeks with
a crew and steam drill to complète the stripping."
His superintendent testified :
"Q. What remains to be done to complète that? A. There Is some squaring
up of the corners, and a little work in blasting on the back slde of it."
II 1. See New Trial, vol. 37, Cent. Dig. §§ 202, 20G, 226.
836 109 PËDBEAli BEFOEÏSE.
And on cross-examination :
"Q. You say it would take two men and a drlll a week or two to flnlsh the
stripping of It? A. Yes, sir. Q. The wages of those men would be about how
mucli? A. Oh, somewhere like $3 or $3.25 per day ; that Is, the two of tliem.
Q. That would be $3 or $3.25 a day, for two weeks, and the use of a machine?
A. Yes, and a boiler, and another man to flre that. Q. And when that was in-
curred, running a couple of weeks, the stripping would be finished? A. Yes."
The alleged newly discovered évidence is mainly to the effect that
there is a horizontal seam, above where the plaintiff tunneled in thèse
quarries, to which he did not go, but left a scale likely to fall, which
has come down in one of the other places that he worked, which should
hâve been taken down when the tunneling was done, and which must be
taken down now at greater expense to complète the stripping. The
scale that has come down in the other part of the quarry appears to
hâve been blasted down since the plaintifï left, and the estimate that
he made in comparison with the other tunneling did not include that.
The value of the wOrk done under such circumstances must hâve réf-
érence to the contract price. Gilman v. Hall, ri Vt. 510, 34 Am. Dec.
700; Merrow v. Huntoon, 25 Vt. 9; Kelly v. Bradford, 33 Vt. 35.
As this work would hâve to be done to get the good marble, and was
what the défendant wanted done, and the deficiency in fulfilling the
contract for 50,000 feet was to be compensated for by déduction from
the price monthly, the value of the work under the contract would be
what it would cost at the contract price. The plaintifï's estimate of the
proportion for profits seems large, but the larger it was the less was
left for the work. The quantity and character of the work was in issue
in this suit ever after it was brought, and the seam and the scale below it
were in évidence there within the defendant's control and view ail
the while, and within the observation of the défendant and his super-
intendent when examining into the deficiencies of the work at the cor-
ners and back, about which they testified, as well as they hâve ever been
since or are now. The examination since by the défendant, his su-
perintendent, and other witnesses desired is new, but the évidence af-
forded by the seam and scale are not new. That was at ail times within
the reach of the défendant, and the diligence used since the trial to pro-
cure the affidavits in support of this motion could bave produced the
witnesses at the trial. The plaintiff is not shown to bave known any
more about the seam or the necessity of working to it than the défend-
ant, and there is nothing to show that the plaintiff concealed anything
in this behalf from the défendant which has since been brought to light.
The omission of this évidence may bave been an oversight, but, if so,
it was the defendant's oversight. To open the case for it would allow,
perhaps, better préparation of the défense, but it would be because this
part of the défense is better appreciated. In the interest of ending liti-
gation, the law does not allow this to be done. This évidence could
not change the verdict to one for the défendant, but only mitigate it
Ail anticipated profits bave been excluded on the motion to set aside
the verdict for excessive damages, and this part, with another small
item, only remains. It may be large, but it is the jury's fînding within
their province, and it is better that it stand than that the rules of law
applicable should be departed from.
Motion denied.
BRENNAN V. UNITED STATES. S37
BRENNAN v. UNITED STATES.
(Circuit Court, D. Massachusetts. April 23, 1904,)
No. 1,342.
1. CusTOMS DuTiES— Classification— PiCKLED Limes— Fkuit in Bbine— Pic-
kles.
"Pldîled limes," or "limes in brine," are more speciflcally provided for
under the enumeration of "limes," in Tariec Act July 24, 1897, c. 11, § 1,
Sctedule G, par. 266, 30 Stat. 172 [U. S. Comp. St. 1901, p. 1651], than
under tbe provision in paragraph 559 of said act, for "fruits in brine, not
specially provided for," or that in paragraph 241 of said act, for "ail vege-
tables, prepared or preserved, Including pickles and sauces of ail kinds,
not specially provided for."
Application by the Importers to Review a Décision of the Board of
United States General Appraisers.
Thèse proceedings were brought by William F. Brennan to review
a décision of the Board of General Appraisers in Re Brennan, G. A.
5,307 (T. D. 24,320), which affirmed the assessment of duty by the col-
lector of customs on certain so-called "pickled limes," or "limes in
brine," iniported by him at the port of Boston.
See Reiss v. United States (C. C.) 126 Fed. 578.
Hatch, Keener & Clute, for petitioner.
Henry P. Moulton and William H. Garland, for the United States.
HALE, District Judge. This is a pétition for review of a décision of
the Board of General Appraisers sustaining the action of the collector
of customs at Boston in assessing a duty on certain merchandise import-
ed by the petitioner, and entered at Boston January 22, 1902. The col-
lector assessed the duty on the merchandise in question under para-
graph 266 of the tariff act of July 24, 1897 (chapter 11, § i, Schedule G,
30 Stat. 172 [U. S. Comp. St. 1901, p. 1651]), the merchandise having
been returned by the appraiser as "limes in brine." Paragraph 266
reads as follows : "Oranges, lemons, limes, grape fruit, shaddocks or
pomelos, one cent per pound." The importer protested against the
classification and assessment, and claimed that the goods were free of
duty, under paragraph 559 of the tarifï act of 1897 (chapter 11, § 2, Free
List, 30 Stat. 198 [U. S. Comp. St. 1901, p. 1683]). This paragraph
reads : "Fruits or berries, green, ripe or dried, and fruits in brine, not
specially provided for in this act." The importer claimed further that,
if it should be determined that the limes in brine are not free of duty,
under paragraph 559, then they should be held classifiable and dutiable
at 40 per cent, ad valorem, under paragraph 241 of the tarifï act of 1897
(chapter 11, § i, Schedule G, 30 Stat. 170 [U. S. Comp. St. 1901, p.
1649]), as "pickles." The portion of paragraph 241 under which the
importer makes this claim is as follows ; "* * * Ail vegetables, pre-
pared or preserved, including pickles and sauces of ail kinds, not spe-
cially provided for in this act, and fish paste or sauce, forty per cent
ad valorem." The Board of General Appraisers, on June 13, 1903, over-
ruled the protest of the importer, afïirming the collector's assessment of
a duty of one cent per pound upon both the fruit and brine. From this
838 129 FEDERAL REPORTEE.
décision of the Board of General Appraisers, the importer has appealed
to this court.
The question, then, before the court, is, was the merchandise in ques-
tion properly classified under paragraph 266 of the tariff act of 1897, or
should it hâve been classiiied under paragraph 559, as being "fruits in
brine," or, if not classified under this last-named paragraph, should it
hâve been classified under paragraph 241 of the same act, as "pickles"?
The opinion of the Board of General Appraisers, which now cornes be-
fore the court, is clearly stated, and puts the décision upon proper
grounds. In Roche v. United States (C. C.) 116 Fed. 911, "pickled
limes," or "limes in brine," vi^ere held to be dutiable under the classifica-
tion of paragraph 266 of the tariff act of 1897, providing for "oranges,
lemons, limes, grape frujt, shaddocks, or pomelos." The Board of Ap-
praisers are correct in saying that the effect of the construction given
by the court in the case just cited is to make paragraph 266 provide for
limes in brine as fully. as if it had read "limes, including limes preserved
in brine." This décision was under the clearly recognized principle that
articles are not dutiable under gênerai terms where there is a duty im-
posed under spécifie language which can be applied to nothing else.
Arthur v. Stephani, 96 U. S. 125, 24 L. Ed. 771 ; Reiche v. Smythe, 13
Wall. 162, 20 L. Ed. 566; Movius v. Arthur, 95 U. S. 144, 24 L. Ed.
420. In Homer v. The Collector, i Wall. 486, 17 L. Ed. 688, the ob-
ject of the suit was to ascertain whether, under the tarift act of 1857
(Act March 3, 1857, c. 98, § 2, 11 Stat. 193), almonds were placed in the
category of "dried fruit," upon which a small duty was imposed, the
tariff act of 1846 (Act July 30, 1846, c. 74, 9 Stat. 42) having imposed a
larger duty upon certain articles enumerated, among which were "al-
monds." Mr. Justice Nelson, speaking for the Suprême Court, said :
"The argument Is that almonds are dried fruit, and hence are provlded for
in the second section of the act of 1857 ; and évidence was offered on the
trial to show that such was the commercial sensé of the term. But this
inquiry had nothing to do wlth the question, and, Indeed, it is dlfflcult to see
how any such inquiry could take place, except as matter of curioslty and
spéculation ; for certalnly such proof could not exist or be found in the sensé
of commercial usage under any of the tariff acts, as a duty has been imposed
on almonds eo nomme almost Immemorlally, at least slnce the duty act of
1804 [Act March 27, 1804, c. 57, 2 Stat. 299]."
In Reiche v. Smythe, supra, Mr. Justice Davis said :
"If It be true that it is the duty of the court to ascertain the meaning of
the Législature from the words used in the statute and the subject-matter to
which it relates, there is an equal duty to restrict the meaning of gênerai
words, whenever it Is found necessary to do so, In order to carry out the
législative intention."
The case at bar is clearly within the ruie announced by the Suprême
Court in the cases to which we hâve just referred. The spécifie pro-
vision of paragraph 266 of the tarifï act of 1897, imposing a duty on
"limes" eo nomine, must be held to override the gênerai provision of
paragraph 559 of the same act, which admits free of duty "fruits in brine
not specially provided for." The merchandise in question upon which
the duty was assessed must be held to hâve been "specially provided
for," under the spécifie provision of paragraph 266 ; hence the gênerai
provision of paragraph 559 cannot apply. Following the same rule, we
V. BOSTON HEKALD 00. 839
must conclude that the merchandise could not hâve been properly class-
ed as "pickles" under the gênerai provisions of paragraph 241.
In this view of the case it is unnecessary to décide whether a commer-
cial désignation making a distinction between "limes" and "limes in
brine" has or has not been proved in the record before us, Such proof
would be immaterial under the principles of the Suprême Court which
we hâve cited.
A decree, therefore, may be entered that the décision of the Board of
General Appraisers is afïirmed. Decree of Board of General Apprais-
ers afhrmed.
O'CONNELL V. BOSTON HERALD CO.
SAMB V. COURIBE-CITIZEN CO.
(Circuit Court, D. Massachusetts. March 16, 1904.)
Nos. 1,377, 1,378.
1. LiBEii— Privilège— Evidence of Caee.
Under the rule that on a question of privilège with respect to an al-
légea libelous publication, where there was an Inaccuracy, défendant
Is entitled to ahovr that reasonable care was used, a défendant charged
with libel in publishing an iuaccurate report of judicial proceedlngs is
entitled to show that the statements published were made from the writ-
ten opinion of an appellate court, although such opinion was not a part
of the record in the cause.
At Law. Actions for libel. On motions for new trial.
Bernard D. O'Connell, pro se.
Melvin O. Adams and Karl Adams, for the Boston Herald Co.
John J. Pickman, for the Courier-Citizen Co.
PUTNAM, Circuit Judge. Thèse are suits against the various
companies publishing the newspapers named, growing out of an at-
tempt to report certain judicial proceedings. The part of the publica-
tion complained of by the plaintif! is, in one issue of one of the news-
papers, the words, "and that he has fraudulently altered the will," and,
in the others, the words, "the petitioner had made altérations in it
afterwards." The question hère is about the propriety of admitting
in évidence in behalf of the défendants the opinion rendered in behalf
of the Suprême Judicial Court of Massachusetts afïirming the verdict
of the jury as to certain portions of the alleged will. That opinion is
reported in O'Connell v. Dow, 182 Mass. 541, 66 N. E. 788.
The verdict of the jury contained no such finding as is stated in the
alleged libels. In some portions of the opinion it does not go beyond
the verdict. Other portions, especially at page 545, 182 Mass., page
789, 66 N. E., as the opinion is reported, read alone, might justify the
statements in the défendant newspapers to which the plaintifï objects,
or, rather, might, under ail the circumstances, be held by the court or
the jury to justify those statements. It appears by the évidence of the
young man who made the report for the newspapers in question that
he examined the opinion on file in the office of the officiai reporter of
840 129 FEDERAL REPORTER.
ihe Suprême Judicial Court in Boston, and that he made up his state-
ment irom it. It does not appear that he examined the bill of excep-
tions or the record proper. The plaintifï claims that in making his
report he should hâve limited himself to the proper record of the case
or to the bill of exceptions, and should not hâve examined, or drawn
inferences of fact from, the opinion. He contends that the opinion
is no part of the record, and that it is not the source from which the
tnie facts of the case are to be drawn. Therefore, he says, inasmucli
as there were inaccuracies in the opinion, and as the opinion, in certain
portions of it, departed from the fmdings of the jury as shown by the
record, it should not hâve been admitted for the purpose of protecting
the défendants.
There is no doubt of the fact that the opinion is not a part of the
record. In that respect the practice of the local courts conforms to
the practice of the fédéral courts. Of course, there are exceptions
where the court makes the opinion a part of the record; but in this
case it is clear that it was not so made a part. It is also clear that
the true source from which is to be derived an exact statement of the
facts is the record itself ; and therefore the plaintifï claims, as we hâve
said, that the newspapers were not justified in pubHshing anything
which was not shown by it, or in publishing what appeared in the opin-
ion of the court which did not conform to it. If the défendant news-
papers had restricted themselves accordingly, it is quite apparent that
this particular expression of which the plaintiff complains would not
hâve been published, because the basis of it is found only in the opin-
ion, and no basis for it is found in the record proper.
The plaintifï relies, in référence to this proposition, on the discus-
sion in Burt v. Advertiser, 154 Mass. 238, 28 N. E. i, 13 L. R. A. 97,
but the difKculty is that Burt v. Advertiser was not a case of privilège
in the technical sensé of the word, while published reports of current
judicial proceedings are so privileged. They are so treated by ail the
authorities. It is not a matter of absolute privilège, like discussions
in court, and in Congress, and in the jury room; but a privilège sub-
ject to certain limitations. So far as Burt v. Advertiser says any-
thing with référence to cases of privilège, the observations are entirely
against the plaintifï, who maintains that a report of public proceedings
in a newspaper, to be justified, must be strictly and technically ac-
curate. On the other hand, the Suprême Judicial Court in that par-
ticular décision points out at least one class of cases where accuracy
is not required, but where ail that is required is good faith. How-
ever that may be, in a case of privilège like this, we must follow the
Circuit Court of Appeals in this circuit in Douglass v. Daisley, 114
Fed. 628, 52 C. C. A. 324, 57 L. R. A. 475, where it is apparent that
it meant to hold that, on a question of privilège in connection with a
publication, where there is inaccuracy, it is the right of the défendant
to show that reasonable care was used, and that the inaccuracy arose
notwithstanding it. On the whole question of reasonable care, look-
ing at this also as a practical question, where should a newspaper re-
porter go for his information as to the history of légal proceedings,
and of the nature of the décision in which the proceedings terminated ?
Probably the most accurate source of information would be a verbal
IN RE GIBABD GLAZED KID 00. 841
statement from the judge to the reporter personally. It seems to us
that, under the rule of Douglass v. Daisley, if this reporter had taken
as the basis of his information an oral statement by the judge, thèse
newspapers could not be held responsible, because the judge, although
informally and orally, stated to him the facts and conclusions of law
as he understood them, and yet inaccurately. That probably, in the
use of due care, would be the most satisfactory way of ascertaining the
facts. In our judgment, the next most satisfactory way is to examine
the officiai opinion of the court ; and the least satisfactory way wouki
be for a reporter to undertake to go through the record and the
bill of exceptions, voluminous, and containing much irrelevant and
inconsistent matter, and get out in that way what he should fur-
nish the public. We can see no practical solution of this case,
nothing which ought practically to guide us, except to say that, in our
view, knowing the difïiculty of understanding prolix and complicated
légal proceedings, the opinion of the judge, written in behalf of the
court, is ordinarily the best source of information for the public, and
that, therefore, as it appears that this reporter examined the opinion
which was offered in évidence, and the reporter based his statement in
the newspapers on that, it was properly admitted in évidence.
In re GIRARD GLAZED KID CO.
{District Coui-t, B. D. Pennsylvania. May 5, 1904)
No. 1,767.
1. BaNkruptcy— Involttntaby Proceedings— Qualification of Petitionee.
A créditer is not dlsqualified from filing a pétition In bankruptcy against
the clebtor because of tbe receipt of a payment more than four months
previously, whicb, if made within that time, would hâve been preferential,
but Is not so under Bankr. Act July 1, 1898, c. 541, § 60a, 30 Stat. 562 [U.
S. Conip. St. 1901, p. 3445], as amended by Act Feb. 5, 1903, c 487, § 13,
32 Stat. 799 [U. S. Comp. St. Supp. 1903, p. 416].
2. Same— Rehearing — Grotjnds.
A rehearing will not be granted on prêteuse of reconsiderîng a case on
the merits, but for the real purpose of reviving the petitloner's right of
appeal, the tlme for taking an appeal having expired. If entitled to re-
lief for that purpose, the facts must be shown in the pétition.
In Bankruptcy. On certificate from spécial référée recommending
adjudication.
Edward H. Weil and Arthur E. Weil, for petitioner.
Crawford & Loughlin, for bankrupt.
J. B. McPHERSON, District Judge. In the division of certain cor-
porate assets pro rata among the bankrupt's creditors by virtue of the
agreement of January 20, 1903, it is clear that Barbara Swartz and
ail the other creditors, except Clara Illingsworth, received more than
their proper share, because the claim of the last-named person had
been improperly reduced on the books of the company by the entry of
a false crédit in the sum of $3,200, and therefore the dividend she ought
to hâve received upon that amount was divided among the other crédit-
842 129 ffBDEBAL EEPOETER.
ors. This improper crédit was made or sanctioned by the président of
the Company, who was Clara Illingsworth's father, and her représenta-
tive in ail her dealings with the company, and by the secretary and
treasurer, who was the son of Barbara Swartz, and in like manner her
représentative. The participation of the président in the transaction is
a disputed point, but the question is one of fact, and I see no reason to
disagree with the finding of the référée upon this subject. The resuit
has been to prefer Barbara Swartz, among other creditors ; and, as she
is the single petitioner, the question is presented whether she is so
far disqualified from fîling a pétition that the proceeding must be dis-
missed. The pétition was not filed until October 28, 1903, and, as
the last payment to the creditors seems to hâve been made on March
27th of that year, the preferential payment is now, by the lapse of time,
secure from attack. If the payment had been made within four months,
I should follow the course adopted by several other district judges, and
require the petitioner to surrender her préférence under penalty of hav-
ing the pétition dismissed, but, as the facts are, I do not feel at liberty
to impose that condition. The bankrupt act itself protects thèse pay-
ments, for it draws an arbitrary line at four months preceding the filing
of the pétition, and, by declaring payments on one side of that line
to be voidable, it necessarily implies that payments on the other side
cannot be successfully assailed. In other words, Barbara Swartz is
not a "preferred creditor," within the meaning of that phrase as it is
used in the bankrpt act, and, this being so, I am unable to see upon
what ground I can properly hold lier disqualified to file a pétition
against the corporation. She may be under a moral obligation to re-
pay a certain sum of money to Clara Illingsworth, because she has
profited by the act of her son at the other's expense, but she is urider no
légal obligation to anybody, and she has donc no wrong of any kind or
degree to the bankrupt or to any other creditor except to Clara Illings-
worth. I can discover no reason for the application of the doctrine
of "clean hands," and no other ground, légal or équitable, why the pe-
titioner should not be permitted to begin and carry on this proceeding.
The exceptions to the report of the référée are dismissed, and the
clerk is directed to enter an order adjudging the company to be a bank-
rupt.
Pétition for Rehearing.
(May 19, 1904.)
This pétition is upon its face an ordinary application for a rehearing
on the merits, and présents no reason that has not already been fully
considered. Its real purpose, however, is to regain the right of appeal,
which has been lost by a failure to act within the 10 days prescribed
by the statute. Judge Lowell disposed of a similar application in Re
Wright, 3 Am. Bankr. R. 184, 96 Fed. 820, and I fully agrée with what
he there said :
"The court is satisfled with its original décision upon the merits of the case,
and will not grant a rehearing in order to give those merits further considéra-
tion. To grant a rehearing upon the pretense of reconsidering the merits of
the case, but really to revive the petitioner's right of appeal, vpould be the em-
jiloyment of an unwortby Action. The record should show the true purpose
for which the rehearing was sought and granted."
THE LTNDHÏJEST, 843
This pétition, therefore, must be refused, as the court is satisfied
witli its previous décision on the merits, and does not désire to hear
further argument thereon. If a pétition is presented, however, setting
forth the reasons for the failure to appeal in due season, their sufficiency
will be considered, and it can then be determined properly and directly
whether the petitioner is entitled to relief.
THE LYNDHURST.
(District Court, S. D. New York. May 4, 1904.)
1. TOWAGE— Fastbning of Towline— Duty of Ttjg.
It is the duty of a tug taking in tow a canal boat which bas but one man
on board to see tbat the towline is sufîicient and securely fastened, and it
cannot escape liability for damages arising from the insufficient securing
of the Une on the towby delegating such duty to the master of the boat.
2. Same— Liability of Tug foe Collision of Tow with Vessel at Whabf.
A tug held liable for injury to her tow from collision with a moored
vessel caused by the towlng Une sllpping off the cleat on the tow and per-
mltting her to be carried against the other vessel, on the ground that the
line was either not properly fastened or became loose from the effect of a
prier collision due to the négligent navigation of the tug.
In Admiralty. Suit against tug for injury to tow from collision.
James J. Macklin, for libellant.
Carpenter, Park & Symmers, for claimant.
ADAMS, District Judge. This action was brought by the libellant
John D. Myers, the owner of the canal boat Phillip Rafferty, to recov-
er from the tug Lyndhurst, the damages sufïered by him on the I3th
of March, 1897, through injury to the Rafferty, caused by a collision
in the North River, with a carfloat moored to the wharf at I2th Street.
The boat had been lying stern out, light, outside of two other boats
fastened on the upper side of I3th Street and was taken in tow there,
about 7 o'clock in the morning, by the tug, to be towed to Edgewater,
New Jersey, for a load of coal, on a hawser, furnished by the tug and
leading from her stern. The loop of the hawser was put by the mas-
ter of the boat over her stern cleat, under directions from the tug, but
it shortly afterwards slipped off, letting the boat go adrift and come in
contact with the float, causing the damage complained of. The tide
was ebb and the wind of some force from the north-west.
The tug's liability turns principally upon the question whether she
was négligent in making the boat fast. The libellant contends that the
hawser was frozen and stiff and it slipped off for that reason. Also
that the tug was in fault in several other particulars, among them,
that the tug failed to see that the tow was properly fast and permitted
her to come in violent collision with a lighter. The claimant contends
tliat the accident was wholly produced by the négligence of the mas-
ter of the boat in that he did not properly fasten the hawser to his
cleat.
The weight of the testimony seems to show that the hawser was
not frozen. The weather had been cold but not freezing, although by
844 129 FEDKBAL REPORTER.
the _Weath,er Records the thermometer got down to 30 degrees about
8 o'clock. Prior to that honr it had ranged from 45 degrees at i
o'clock A. M. to 31 at 7 o'clock A. M., and for the several prior days, the
mean temiperature was not under 45. I do not see, in view of the
évidence, how the theory that the hawser was frozen can be sustained.
Nevertheless, the tug apparently did not perform her duty. It was
said in The Quickstep, 9 Wall. 665, 671, 19 L. Ed. "^^y :
"It was the duty of the tug, as the captains of the canal-boats had no voice
in making up the tow, to see that It was properly constructed, and that the
Unes were suflicient and securely fastened. This was an equal duty, whether
she furnished the Unes to the boats, or the boats to her. In the nature of the
employaient, her officers could tell better than the men on the boats what sort
of a Une was requùed to secure the boats together, and to keep them in their
positions. If she failed in this duty she was guilty of a maritime fault."
The claimant insists hère that the tug had a right to assume that
the master of the boat had securely fastened the hawser and relies
upon the aase of Pederson v. John D. Spreckles & Brothers Company,
87 Fed. 938, 31 C. C. A. 308, tO' sustain his contention. That was an
action of négligence brought by Pederson, who was the mate of a
schooner, for injuries caused to him' by the breaking of a chock upon
her, which he had selected toi run the towing line through. The
schooner was in charge of her own officers and crew. It was held
that the bitts upon which the line was placed, and which required the
use of the broken chock, were the wrong ones, and the libellant could
not recover. The gênerai principle which governs thèse actions was
recognized and the case in hand distinguished from ones of that char-
acter. It was said (page 943, 87 Fed., page 313, 31 C. C. A.) :
"This testimony, instead of showing that the tug was towing at an excessive
speed, tends to show that the Une, af ter passlng through the breast chock, was
fastened to the wrong bitt, and that the négligence was upon the part of the
officers and crew of the schooner, instead of upon the part of the tug. It is
shown by the testimony that the tug was fully adéquate to the work. It was
managed with reasonable care, judgment, and skill. It performed its duty in
an ordinary, careful, and prudent manner, and did its entire duty, unless, as
is claimed by appellant, it was its duty to see that the Une was properly
placed and fastened on the schooner before it started to tow. A vast number
of authorities are cited by the appellant to the effect that the tug dominâtes,
guides, and directs ; that the tow keeps in her wake, and conforms to her di-
rections ; that the tug must f urnish the motive power, and direct the location
of the tow ; how she shall be lashed ; with what f asteniug she shall be se-
cured ; to see that her tow is properly made up, and secured with Unes of
proper strength. Many of thèse cases are in relation to the duties of the tug
in the towing of canal boats and barges, which hâve no life, voice, or control
In making up the tow ; and in ail thèse cases it is held that it is the duty of
the tug to see that the Unes of the tow are properly, sufiiciently, and securely
fastened, and that if the tug falls in this duty, she Is guilty of a maritime
fault. But such cases hâve no application to a case like this, where the
schooner had its own otEcers and crew on board, and, in pursuance of the cus-
tom in this respect, took fuU charge, management, and control of thèse matters.
The distinction between the cases is too manifest to require extended discus-
sion, and is clearly illustrated in the décision of the court in The Quickstep,
9 Wall. 665, 670 [19 L. Ed. 767], which is one of the leading cases relied upon
by the appellant. In the course of the opinion the court said :
'If the tug, in constructing the tow, used the Unes furnished by the différent
boats, yet, as each boat was independent of the other, no responsibility can
attach to either for the breaking of the line which she did not provide, and
liad nothing to do with making fast'
SHALLUS V. UNITED STATES. 845
The testimony shows, without confllct, that it is the custom, In ail cases
where the tow bas its own offleers and crew on board and In charge, for the
officers of the vessel to arrange ail the preliminary matters, such as plaeJng
and making f ast the towUne ; that such matters were withln the duty of the
appellant to perform ; and that he did in faet perform that duty."
One man only formed the crew of this boat and it was etidently the
duty of the tug to see that the hawser was properly niade fast. She
was net relieved from her obligation by the turning of the duty over
to the master of the barge, who, it would seem, became the agent of
the tug in handling the hawser. The fact that the loop held in the
beginning of the towing, and only slipped oflF after the tug had permit-
ted the boat's starboard side to corne, with some violence, in contact
with a lighter, lying near the foot of Little 12th Street, the next street
below, tends to show that the hawser was sufficiently made fast in the
beginning and came ofif in conséquence of this collision. When it came
free, so that it had no further towing power, the boat was about 50
feet clear of the wharf and had been towed with the hawser probably
about 150 feet. One of the claimant's witnesses, a boatman, testified
that the loop was put over the cleat "ail right." I conclude that the
accident was either due to the tug's omitting to see that the loop of
the hawser was carefuUy put over the cleat — The Sweepstakes, 23 Fed.
Cas. 541 — or to its being shaken loose by collision with the lighter,
which was due to négligent towing.
Decree for the libellant, with an order of référence.
SHALLUS V. UNITED STATES.
(Circuit Court, D. Maryland. December 14, 1903.)
1. CUSTOMS DtFTIES — CLASSIFICATION— HAIB SWEEPINGS — SUBSTANCE FOB Ma-
NUEE— Waste.
Certain waste of hog hair, consisting of sweepings In factories, which is
used solely in the manufacture of artiflcial fertilizers, although not sultable
in Its Imported condition for use as fertilizer, is subject to classification
under Tarife Act July 24, 1897, c. 11, § 2, Free List, par. 569, 30 Stat 19S
[U. S. Comp. St. 1901, p. 1G84], providing for "substances used only for ma-
nure," and not as "waste, not specially provided for," under paragrapli
403 of said act (section 1, Schedule N, 30 Stat. 194 [U. S. Comp. St. 1901.
p. 1679]).
Appeal by the Importer from a Décision of the Board of United
States General Appraisers.
Note Magone v. Heller, 150 U. S. 70, 14 Sup. Ct. 18, 37 L. Ed. looi.
T. Spence Creney, for appellant.
John C. Rose, for the United States.
MORRIS, District Judge (orally). This is an appeal by Frank H.
Shallus, the importer, from a décision of the Board of General Ap-
praisers dated November 19, 1902, overruling the protest of the im-
porter, and afSrming the action of the collector. The merchandise in
question is principally pig or hog hair, and is the accumulation of sweep-
ings in mills at which curled hair is manufactured, and in some cases of
846 129 FEDEEAL REPORTER.
the sweepings of brush factories. It contains a large per cent, of dust,
scruff, and sotne partiales of the skin of the hog or other animal from
which the hair was taken. It was assessed for duty at the rate of lo per
centum ad valorem under paragraph No. 463 of the tariff act of July 24,
1897 (chaptçr 11, § i, Schedule N, 30 Stat. 194 [U. S. Comp. St. 1901,
p. 1679]), as "waste, not specially provided for." It is claimed by the
importer to be free of duty under paragraph No. 569 of said act (sec-
tion 2, Free lyist, 30 Stat. 198 [U. S. Comp. St. 1901, p. 1684]), which
paragraph is one of the subparagraphs in the free hst, and reads as fol-
lovvs : "569. Guano, manures, and ail other substances used only for
manure."
There was no question hère, as there was none before the Board of
Appraisers, that the article would be a valuable ingrédient for the
manufacture of artificial fertilizers. The Board of General Appraisers,
however, found that, in order that such merchandise should be held to
be within the provisions of paragraph No. 569, it was necessary that
the importer show that the sole use of it was as such ingrédient. At
the hearing before the board the importer ofïered no évidence, and con-
sequently the action of the collector was affirmed. în this court, the im-
porter, availing himself of his right under the statutes, has taken évi-
dence, and has shown without contradiction that the importation is
valueless for any other purpose except as an ingrédient for an artificial
fertilizer. The government, however, contends that the language of
paragraph 569, properly construed, does not include substances which
by themselves cannot be used for manures, but is limited to those sub-
stances which can, in the state in which they are imported, be used only
as manure. With this contention I do not concur. I am of opinion that
the framers of the law, in providing as they did in section 569 that the
articles included under that section should be admitted free of duty,
wished to encourage agriculture, or at ail events were désirons that no
unnecessary burden should be placed upon it. It would therefore seem
that the section should be so construed as to give efïect to its obvions
purpose. Where, as in this case, the testimony conclusively establishes
that the article brought into the country has no other use or value ex-
cept that of forming, together with other things, a manure, it seems to
me to be within both the spirit and letter of paragraph 560. The dé-
cision of the Board of General Appraisers should therefore be re-
versed, and the protest of the importer sustained.
THE IDLEWILD.
(District Court, S. D. New York. May 5, 1904.)
1. Collision— Passing Tow and Anohored Yacht— Vessbl Anchoeed Out-
SIDE Anchoeage Gbotjnds.
A yacht held in fault for a collision with a passing scow In tow while
she was at anchor in New Yorlc Bay, in the night, on the ground that she
was anchored outslde the anchorage grounds without necessity, and the
tug having the scow in tow also Ueld in fault for failure to ses and avoid
the yacht.
In Admiralty. Suit for collision.
IN EE EASTEEN COMMISSION & DIPOKTING 00. 847
James J. Macklin, for libellant.
John F. Foley, for claimant.
ADAMS, District Judge. This action arose eut of a collision which
occurred in the moming of October 4th, 1899, about 12:15 o'clock,
between the libellant's schooner yacht Coronet and a scow in tow of the
tug Idlewild, by which the yacht was considerably injured. The yacht
was at anchor ofif Quarantine, Staten Island, and the tug proceeding to
sea with a tow of four scows, on a hawser. The third one of the
scows did the injury complained of. The tide was ebb.
The testimony makes it clear that the yacht had anchored, without
sufficient excuse, outside of the anchorage limits. The wind was light
but there would hâve been no great difïiculty in getting eut of the
channel. She was, therefore, in fault. The Ailsa (D. C.) 76 Fed. 868,
affirmed 86 Fed. 475, 30 C. C. A. 203 ; The James D. Leary (D. C.) iio
Fed. 685, affirmed 113 Fed. 1019, 51 C. C. A. 620.
There is a controversy as to whether the tug was aiso in fault. I
conclude that she was, because the yacht, though considerably outside
of the anchorage limits, was fuUy lighted and easily to be seen by a
careful observer. She was avoided by a number of other tows going
to sea on the same tide.
The mate of the tug, who was in charge of her navigation at the
time, testified that a lookout was stationed forward but the person
was not produced and if he were there, he made no reports and was evi-
dently not attending to his duties. The mate did not see the yacht's
llghts until after the collision, when he looked back in conséquence of
it and then saw the anchor light. Before reaching the yacht he had
been looking back to watch his tow. He claims that he could not hâve
seen the yacht's lights before he did, because of the electric lights of a
large steamer, but it is not sufhciently explained how such lights could
hâve interfered, as the nearest steamer was several hundred feet to
the westward and somewhat below the yacht. The tug should also be
found in fault. The Steamboat New York, etc., et al. v. Rae, etc., i8
How. 223, 15 L. Ed. 359.
Decree for the libellant for half damages.
In re EASTEBN COMMISSION & IMPOETING CO. .
(District Court, D. Massachusetts. May 6, 1904:.)
No. 8,705.
1, Bankeuptct— Peooeedings against Debtob— Stat.
Where within four months prior to the filing of an Involuntary bank-
ruptcy pétition a creditor of the alleged bankrupt had brought suit in a
state court on a debt dischargeable in bankruptey against the bankrupt,
and threatened to obtain an attachment, and, in order to prevent the at-
tachaient, the bankrupt gave bond with surety, and to protect the surety
had pledged Its property, the banliruptcy court would restrain the cred-
itor from proceeding therewith until after adjudication.
In Bankruptey.
848 , 129 FEDERAL BEPOKXEB.
Robert Homans, receiver, pro se.
Elder & Whitman, for creditor.
LOWEIyL, District Judge. Pending adjudication upon an involun-
tary pétition, a receiver appointed by the court of bankruptcy filed a
pétition alleging as follcrws : That within four months a creditor had
brought suit in the state court against the respondent in bankruptcy,
and had obtained or threatened to obtain an attachment upon its prop-
erty ; that, in order to prevent the exécution of the threat or to dissolve
the attachment, the debtor had given a bond, with surety, and to pro-
tect the surety had pledged its property to him in order to secure him
from loss; that the suit was based on a debt dischargeable in bank-
ruptcy; that, if the creditor's suit was allowed to proceed, exécution
would be levied either (i) upon the debtor's goods, or (2) upon the
surety, who, upon payment of the debt and satisfaction of the bond,
would realize on his pledge, and so in either case the estate to be ad-
ministered by the court of bankruptcy would be diminished ; that there
was now no one with clear right to défend the suit. It was held by
the Suprême Court in Jaquith v. Rowley, 188 U. S. 620, 23 Sup. Ct.
369, 47 L,. Ed. 620, affirming In re Franklin (D. C.) 106 Fed. 666, that
this court could not enjoin one who had already recovered judgment
against the bankrupt from taking out exécution against the surety on
a bail bond given to release the bankrupt, where the surety held in
pledge the bankrupt's property to indemnify him for his liability on the
bail bond. So hère, if the creditor had recovered judgment, and were
now seeking to enforce his bond against the surety, this court could not
stay him. Again, if, after adjudication, he were seeking to proceed
with his suit in order to obtain a spécial judgment, as in Rosenthal v.
Nove, 175 Mass. 559, 56 N. E. 884, 78 Am. St. Rep. 512, this court
might refuse to exercise its discrétion to stay him. Prior to adjudica-
tion, however, the statutory stay is peremptory. It is in the interest
not only of the bankrupt, but of his estate, that there should be some one
to défend the suit. If the creditor gets judgment, he will be able not on-
ly to enforce the bond, but to prove the amount of his judgment against
the estate in bankruptcy, and other creditors are interested that the
judgment shall be as small as possible. They hâve now no trustée to
represent them. While it may be possible to authorize the receiver to
undertake the défense of the suit, yet for obvious reasons this is not or-
dinarily désirable. An injunction will issue restraining the creditor
from suit until after adjudication. If further stay is deemed necessary
by any party, it must be applied for.
WESTEEN UNION TELEGRAPH CO. V. PENNSYLVANIA 00. 849
WESTERN UNION ÏBLEGRAPH CO. v. PENNSTLVANIA CO.
(Circuit Court of Appeals, Third Circuit May 2, 1904.)
No. 24.
1. CONTBACTS— DUBATION— PBESTJMPTION.
If a contract Is not revocable at the wlll of elther party, or otherwise
llmited as to Its duration, by its express terms, or by the inhérent nature
of the contract Itself with référence to its subject-matter or its parties,
It is presumably intended to be permanent and perpétuai In the obliga-
tion it Imposes.
2. Same— RiGHT TO Teeminate AT WiLi/— Agbeement foe Constbuction and
Opebation of Telegeaph Line.
A contract between a railroad company and a telegraph Company pro-
vided for the construction, maintenance, and opération of a telegraph
line along the right of way of the railroad company, whlch was to fur-
nlsh and place the pôles and cross-arms, while the telegraph company
was to furnish the wlre, Insulation, and instruments, and operate the
line, sending messages relating to the railroad business free, and having
itself the commercial business. The railroad company was given the
right to strlng a wire for its own business, and the telegraph company
an addltional wire, and provision was also made for the repalr and re-
newal of the line. The line was built and operated under the agreement
for many years, during which time it became an important part of the
gênerai System of the telegraph company, which, by mutual agreement,
largely increased the number of its wires, and paroi modifications were
also made as to the expense of repairs and reconstruction. Held, that
the relations created between the parties by the contract were not mere-
ly Personal, as in cases of partnershlp, master and servant, and the like,
but that rlghts of property and the user thereof, In the nature of an
easement, were conferred on the telegraph company, and that, in the ab-
sence of any express provision therefor, no right in the railroad company
to détermine or revoke the same at wlll could be Inferred from the
silence of the contract in that respect, or from its terms, purpose, or In-
hérent nature.
8. Same— Validity— iNVALiD Provision.
The fact that such contract contained a provision that the railroad
company should not permit any other telegraph company or individual
to build or operate a line of telegraph along Its road, which was valid
at the time the contract was made, but was rendered invalid by act of
Congress of 1866, giving any telegraph company accepting Its provisions
the right to construct its line along any post road, does not affect the
validity of other provisions for which It did not constitute the main con-
sidération, nor the right to a spécifie enforcement of such provisions.
4. Speciito PEEroEMANCB— Contbacts Enfobceablb— Natuee op Relief Re-
quibed.
A court of equity Is not precluded from deereeing the spécifie perform-
ance of a contract because it is continuons in its opération, where the
principal, If not the only, relief required is injunctive, to préserve the
status quo which has existed between the parties for nearly 50 years,
and to prevent the threatened termination of the contract by the défend-
ant
Appeal from the Circuit Court of the United States for the Western
District of Pennsylvania.
For opinion below, see 125 Fed. 67.
11 4. Enforcement of contracts requiring continuons aets, see note to Ber-
llnger Gramaphone Co. v. Seaman, 49 C. C. A. 103.
129 F.— 54
850 129 FEDERAL EEPOETEB,
Rush Taggart, for appellant.
George B. Gordon, for appellee.
Before ACHESON, DALLAS, and GRAY, Circuit Judges.
GRAY, Circuit Judge. This is an appeal from the decree of the Cir-
cuit Court for the Western District of Pennsylvania, entered upon a
demurrer to an amended bill of complaint filed by the complainant be-
low, the appellant hère. The decree sustained the demurrer, and dis-
missed the amended bill of the complainant.
The suit is founded upon a written contract, entered into in the year
1856, and certain paroi modifications thereof set forth in the bill, be-
tween the Western Union Telegraph Company and the Cleveland &
Pittsburg Railway Company. The written contract filed as an exhibit
and made part of the bill, is as follows :
"An agi'eement made and entered Into thls day of October, 1856, be-
tween tbe Western Union Telegraph Company, of the flrst part, and the
Cleveland & Pittsburg Kailroad Company, of the second part, witnesseth
as follows :
Ist The sald Rallroad Company Is to put up, as soon as the work can be
reasonably done, along the Une of Its road, from Cleveland to Rochester via
Alliance and Wellsville, and also from Wellsville to Bellaire, a Une of tele-
graph pôles or posts of good timber, stripped of the bark, and permanently
and securely set In the ground, thirty to the mile, not less than eighteen feet
high above the ground, and not less than nine inches in dlameter on an aver-
age, at the surface of the ground when set, wlth cross arms suitable for
two or more wlres, well and securely fastened to the pôles.
2nd. The sald Telegraph Company is to furnlsh wire, Insulators, instru-
ments, patents and everythlng except the posts or pôles and cross arms, and
complète sald Une with one wire and extend it upon the pôles now up, or
upon other pôles equaliy good, along the Ohio & Pennsylvania Rallroad, from
Rochester to Pittsburg, and put sald Une in opération as soon after the pôles
are set as is reasonably practicable, and open offices at Cleveland, Hudson,
Ravenna, Alliance, Wellsville, Rochester, Pittsburg, Steubenville and Wheel-
ing, and such other places on the Une as the said Rallroad Company may
deslgnate and furnish instruments for ; and the said Rallroad Company Is
to pay to the said Telegraph Company the loss, if any, at any office on said
Une where the expenses amount to more than the reeeipts of the office for
said Une; and the said Telegraph Company is to send, free of charge, over
said Une, during ordinary business hours, ail messages strictly pertaining
to the business of sald Rallroad, includlng the ordinary family communica-
tions of its officers and agents, that may be required by any of the offlcers
or agents, giving préférence to messages of emergency or pertaining to acci-
dents.
3d. The sald Rallroad Company Is to pay to the sald Telegraph Company,
as soon as the sald Une is completed and in worklng order, thirty dollars a
mile for the length of the wire, Includlng that from Rochester to Pittsburg,
and also to pass or convey, free of charge, over its said road ail men and ma-
terials used or eœployed in building and operating said Une.
4th. The said Rallroad Company is to bave the rlght at any tlme to put
upon said posts, or cross-arms, a telegraph wire and work the same for its
exclusive use, but not to send any messages thereon other than those per-
taining to the business of the said rallroad and the ordinary family commu-
nications of its offlcers and agents, at or from points where the said Telegraph
Company may or shall bave an office.
5th. The sald Telegraph Company is also to bave the rlght to strlng an-
other wire for its own use upon said posts or pôles at àhy part thereof.
6th. When the wire of the sald Rallroad Company, as provided for in ar-
ticle fourth, is down or ont of order, the said Telegraph Company is to do
the telegraph business of the said Bailroad Company upon its wire or wirea,
WESTERN UNION TELEGRAPH 00. V. PENNSTLVANIA CO. 851
or any parallel wire It has or may hâve, and when the wire or wires of the
said Telegraph Company Is, or are, down or ont of order it Is to hâve the
right to send its business free over the wire of the said Railroad Company,
but not to interfère v?ith or delay the telegraph business of the said Rail-
road Company.
7th. After the telegraph line is completed with one or more wires, the same
is to be kept in repair by the said Railroad Company, and maintained in first
rate working order, so far as practicable. But the said Telegraph Company
is to furnish, or pay, to the said Railroad Company, the cost of the wires
and insulators used and necessary in maintaining the wire or wires of the
said Telegraph Company in good working order.
8th. The said Railroad Company is not to allow any other Telegraph Com-
pany or individual to build or operate a line of telegraph on or along its said
railroad, or any part thereof.
9th. The said Railroad Company Is not to be liable to the said Telegraph
Company, or to any of the employés thereof, for any accidents or injuries to
the said employés while traveling on the cars, free of charge, under this con-
tract. Nor is the said Telegraph Company to be liable to the said Railroad
Company for any damage or mistake in the transmission or delivery of mes-
sages.
In witness whereof," etc. (Executed by the seals of the companies and
the hands of their présidents respectively.)
"It is understood that if the pôles between Steubenville and Bellaire wlU
answer for that line, new pôles will not be required during the life of those
pôles. Also, that No. 9, good wire, shall be used, and that the pôles shall be
of sufflcient size. Cleveland & Pittsburg Railroad Company,
[Seal. C. & P. R. R. Co.]
[Signed] By C. W. Rockwell, Président.
[L. S.] [Signed] E. Rockwell, Secretary."
"At a stated meeting of the Board of Directors of the Western Union Tel-
egraph Company, held at the office of the Secretary, In the City of Rochester,
on the 21st day of January, 1857, the following preamble and resolution were
passed :
'Whereas, In the month of October, last past, this Company on Its part, ex-
ecuted a contract between this Company, of the first part, and the Cleveland
& Pittsburg Railroad Company, of the second part, providing among other
things for the construction of a telegraph Une along the route of the said
railroad.
'And Whereas, the said Railroad Company has executed the said contract
with the following supplementary clause, and in the following form, that is
to say : "It is understood that if the pôles between Steubenville and Bellaire
will answer for the line, new pôles will not be required during the life of
thèse pôles. Also, that No. 9, good wire, shall be used, and that the pôles
shall be o£ sufflcient size." '
The Cleveland & Pittsburg Railroad Company,
[Signed] By C. W. Rockwell, Prest.
[L. S.] [Signed] E. Rockwell, Secy."
"Resolved, That this Company assent and agrée to said supplementary
clause, and that the Président and Secretary, on behalf of this Company,
exécute any paper necessary to verify the said assent to said clause."
"This certifies that the foregoing is a true extract from the records of the
Western Union Telegraph Company.
June 22, 1857. [Signed] H. Sibley,
Prest. of the W. U. Tel. Co.
[Signed] I. R. Elwood,
[Seal W. U. T. Co.] Secy. of the W. U. Tel. Co."
The material allégations of the bill are as f ollows :
In paragraphs 2 and 3, the complainant sets forth that the "West-
ern Union Telegraph Company," the complainant, is a telegraph Com-
pany and a corporation duly organized under the laws of the state
S52 129 FEDERAL EEPOETEK.
of New York, and that the "Pennsylvania Company," the défend-
ant, is a corporation organized under the laws of the state of Penn-
sylvania, and in possession of and operating a Une of railroad known
as the "Cleveland & Pittsburg Railroad," extending from the town
of Rochester, in the state of Pennsylvania, through the states of Penn-
sylvania and Ohio to the city of Cleveland; also from the mouth of
Yellow creek, near Wellsville in the state of Ohio, via Steubenville,
to Bellaire; and also from Bayard to New Philadelphia in the state
of Ohio ; that the said Cleveland & Pittsburg Raitroad is a corporation
organized under the laws of the states of Pennsylvania and Ohio, and
in October, 1871, it executed a lease, for the term of 99g years, of its
said line of railway to the Pennsylvania Railroad Company, a cor-
poration organized under the laws of the state of Pennsylvania; that
in the year 1873 this lease was assigned to the défendant, the Penn-
sylvania Company, which has ever since operated the said railroad un-
der the same.
Paragraph 4 of the bill sets forth that the complainant was organized
as a telegrapli company in the year 1851, and has been continuously
since that time engaged in the work of constructing and operating
telegraph Unes, and has acquired a continuons System of telegraph
lines, which now extends through ail the states and territories of the
United States and into portions of the Dominion of Canada, and con-
nects with telegraph lines of Central and South America, and by
submarine cables with the telegraph Systems of foreign countries ; and
that among the lines ol telegraph forming an important part of said
System of said complainant, and Connecting with its main office in the
city of New York, and with other lines of telegraph leading to the im-
portant commercial centers of the West and Southwest, are the lines
of telegraph over and along the said Cleveland & Pittsburg Railroad.
In paragraph 5, complainant states that the lines of telegraph along
the said Cleveland & Pittsburg Railway were originally constructed by
the complainant under the contract entered into in October, 1856, be-
tween complainant, the Western Union Telegraph Company, and the
Cleveland & Pittsburg Railroad Company, above recited as Exhibit i,
attached to and made a part of said bill of coniplaint.
In paragraph 6 of the bill, complainant allèges that at the time of the
maliing of said contract, and for many years thereafter, the said com-
plainant controlled within the territory covered by said Cleveland &
Pittsburg Railroad, and the territory contiguous thereto, the patents
controlling the art of telegraphy, without which no person or corporation
could lawfully engage in sending messages by telegraph ; that after the
construction of the said telegraph line, as provided in said contract,
complainant and the said Cleveland & Pittsburg Railroad Company
carried out ail its provisions, and complainant furnished the wires, in-
sulators and patents, and extended the said line of telegraph from
Rochester to Pittsburg, as provided therein, and continuously maintain-
ed offices, as provided in and by said contract; that it furnished télé-
graphie facilities for the use of said railroad company, as provided by
the said contract, and the valuable patent rights owned and controlled by
it as aforesaid, and that the said railroad company availed itself of ail
the rights and privilèges secured to it in and by said contract, and used
WESTERN UNION TËLEGKAPH CO. V. PENNSXLVANIA CO. 853
said telegraph lines in connection with the opération of its said raîl-
road ; that in addition tliereto, complainant furnislied thereafter, con-
tinuously, tlie use of its main batteries for the wires of the railroad
Company, at ail times, day and night, and at many places opened offices
for public business, and transmitted by its operators the messages of
the railroad company and of its officers, without charge, and thereafter
the said railroad company and complainant carried out and observed
the provisions of the said contract, and continuously operated the lines
of telegraph as provided therein, until the said Cleveland & Pittsburg
Railroad Company, as hereinbefore set forth, leased its said line of rail-
road to the said Pennsylvania Railroad Company, in October, 1871.
In paragraph 7, it is alleged that in the said lease, the Pennsylvania
Railroad Company expressly covenanted and. agreed with the said
Cleveland & Pittsburg Railroad Company to carry out and perform the
said contract with the complainant, and did fully perform and observe
the same until the transfer by the said Pennsylvania Railroad Company
to the défendant, the Pennsylvania Company, of the possession and
control of the said line of railroad, by the assignment of said lease, as
hereinbefore set forth, in the year 1873 ; that the défendant, the Penn-
sylvania Company, in accepting the assignment of said lease, expressly
covenanted and agreed with the said Pennsylvania Railroad Company
to perform ail and singular the covenants, agreements and undertak-
ings of the said Pennsylvania Railroad Company.
In paragraph 8 of said bill of complaint, it is alleged that the défend-
ant, the Pennsylvania Company, after receivmg possession and control
of the said Cleveland & Pittsburg Railroad, under said assignment of
lease in the year 1873, continued thereafter to recognize the rights of
complainant and to observe the obligations of said contract, "save and
except that by the consent and acquiescence of your orator and the de-
fendant the provisions of the seventh article were modified in that
your orator furnished ail the material for the repair or reconstruction
of said telegraph lines and the défendant furnished the labor therefor."
In paragraph 9, it is alleged that at ail times since the making of
the said contract, complainant has observed ail the obligations and re-
quirements thereof, both as originally written and as modified, as here-
inbefore set forth, and has faithfully carried out ail the provisions
thereof, and expended large sums of money upon the faith of said
contract, amounting in the aggregate to many thousands of dollars,
and that the said défendant, the Pennsylvania Company, since its pos-
session of the said line of railway, has at ail times availed itself of the
facilities thus aflforded by complainant, without complaint on its part
that complainant was in any respect delinquent, in failing to render
to said Pennsylvania Company ail the service and benefits that it was en-
titled to receive and enjoy under each and every of the provisions of
the said contract.
In paragraph 10 complainant sets forth, that since the assignment
of the said lease to the défendant, both complainant and défendant,
by mutual consent, hâve, at their own several cost and expense, strung
additional wires upon the said line of telegraph constructed and main-
tained under the provisions of the said contract, so that at présent there
ftre in place upon portions of the said Cleveland & Pittsburg Railroad
854 129 FBDERAIi EEPOBTEK.
a large number of additionat wires belonging to complainant and to
the défendant railroad company respectively, which wires hâve been
maintained and operated by complainant and said railroad company
under the provisions of said agreement, and their maintenance and
reconstruction hâve been carried on in conformity with the require-
ments thereof, as modified, to wit, complainant furnishing ail the ma-
terial for the repair and reconstruction of said lines, and défendant
furnishing the labor therefor.
In paragraph ii, complainant avers that on or about the 2d day of
June, 1902, the défendant caused to be transmitted to complainant a
written notice, expressing its désire to terminate the agreement above
recited, which said notice is attached to the bill as an exhibit and made
a part thereof. Said notice, after referring to the agreements under
which the telegraph lines, located upon the right of way of the varions
railroads controlled by the Pennsylvania Company, are operated by
the Western Union Telegraph Company, concludes as follows :
"Whereas said telegraph company furnlshes the material and said railway
eompanles the labor for the construction and maintenance of said telegraph
lines, thereby establishing a joint ownership in same ;
Now therefore, the said Pennsylvania Company hereby gives to said West-
ern Union Telegraph Company notice of its désire to terminate said agree-
ments, and ail suppléments to or extensions of same — whether written or
verbal — and that the same wlll be terminated on June 2, 1903, and we re-
spectfully request that you sélect représentatives of the telegraph company
to meet our représentatives at a date, previous to August 1, 1902, that will be
mutually satisfactory, for the purpose of adjusting the ownership of your
company and thls company in the property comprising the telegraph lines
referred to.
Will you kindly aeknowledge receipt of this letter and oblige,
The Pennsylvania Company,
By James McCrea, Vice Président
To Mr. R. C. Clowry,
Président Western Union Telegraph Company,
New York City, New York."
The bill then recites and refers to certain correspondence which en-
sued upon the réception of the said notice, which is set forth in ex-
hibits attached to the bill and made a part thereof. The resuit of this
correspondence was, in substance, that the said complainant declined
to aeknowledge the right of the défendant to revoke the said contract,
under and pursuant to which the said telegraph lines had been main-
tained along the line of the railway df the said défendant since 1856,
and insisted that the agreement referred to could not be terminated by
either party without the consent of the other.
In paragraph 12 are recited certain sections of an act of Congress,
approved July 24, 1866, entitled "An act to aid in the construction of
telegraph lines and to secure to the government the use of the same
for postal, military and other purposes." 22 Stat. 221.
In paragraph 13, complainant avers that it complied with the pro-
visions of the said act of Congress, on or about the 8th day of June,
1867, by filing its written acceptance with the Postmaster General
of the United States, of the restrictions and obligations of said act, a
copy of which is annexed as an exhibit and made a part of the bill of
complaint.
WESTEBN UNION TELEGEAPH 00. V. PENNSYLVÀNIA OO. 835
In paragraph 15, complainant avers that in compliance with the act
of Congress, approved June 10, 1872, it has transmitted the messages
of the government of the United States over lines situated along the
railway of the défendant company, and upon its other lines connected
therewith, at ail times since the passage of said act, at rates far below the
usual rates paid" by individuals for similar services.
In paragraph 16, complainant recites the act of Congress by which
each and every railroad within the limits of the United States is declar-
ed a post route.
In paragraph 17, complainant avers "that ail the telegraph lines along
and upon the said Une of railway operated by the défendant, as herein-
before described, hâve been constructed thereon with the express con-
sent of the défendant railway, or of its predecessor in title, the Cleve-
land & Pittsburg Railway Company, with the well-understood purpose
that the same should form a part of ând be connected with the other
lines of telegraph belonging to your orator, and with the knowledge of
the said railway company were erected and incorporated in and became
part of and were operated as a part of the gênerai System of telegraph
lines owned and controlled by your orator."
In paragraphs 18, 19, 20 and 21, complainant sets forth its under-
standing and contention as to the rights and privilèges conferred upon
it by the acts of Congress before recited, in référence to the maintaining
of its line of telegraph as now existing along the railroad and over the
right of way of the défendant.
In paragraph 22 complainant allèges that it stands ready, and is able
and willing to perform, and thereby tenders performance of , said agree-
ment to the said défendant company, of the conditions and obligations
imposed upon said complainant by said agreement, and is entitled to
specifically require from the défendant company the performance on
its part of ail the provisions of the said contract.
In paragraph 23, complainant says that the said lines constructed and
maintained under said contract, constitute some of the main lines of
communication for the transmission of télégraphie messages between the
city of New York and foreign countries, and the larger cities of the
West and Southwest, Mexico and South America, and that the défend-
ant, the Pennsylvania Company, is threatening by its notice of June
2, 1902, and in portions of its correspondence above referred to, to
sever the lines of telegraph of complainant, situated upon the said hnes
of railway, from their connection with the other telegraph lines owned
and operated by complainant, and avers that the said défendant, unless
restrained by the order of this court, will carry such threats into ex-
écution.
In paragraph 24, complainant avers that by carrying such threats
into exécution, and refusing to perform and observe the provisions
of said contract, the défendant will inflict irréparable in jury upon com-
plainant and practically destroy the entire value of ail the télégraphie
property of complainant now constructed, maintained and operated
along and upon the right of way of said railways of défendant. It
also avers that the said telegraph lines along and upon the said right of
way of the railways of said défendant, do not interfère with the ordinary
S5G 129 FEDERAL EErOETER.
opération of said railways, and that the continuance of said lines will
not be of any détriment to the said défendant.
In paragraph 25, complainant avers that the détermination of the
défendant to remove the telegraph lines of the complainant, together
with the offices and instnimentalities appurtenant thereto, from its said
line of railway, and to forbid the further opération thereof, under the
provisions of said contract, was not caused by any delinquency of the
said complainant in the service furnished by it under the said contract,
or by reason of any interférence of the said lines of telegraph, or the
opération thereof, with the opération of the said railroad, or by any
compulsion or necessity to use the space occupied by said telegraph
lines, for railroad purposes. As évidence of this, complainant shows,
that the said défendant company has entered into, or intends to enter
jnto, a contract with the Postal Telegraph & Cable Company, a rival of
said complainant, by the terms of which it undertakes to compel the re-
moval of complainant's lines of telegraph from its premises, and its in-
struments and fixtures from its stations and buildings, and to install in-
stead thereof the lines, pôles, fixtures and instruments of said Postal
Telegraph & Cable Company, the said lines of said Postal Telegraph
& Cable Company to occupy substantially the same location now occu-,
pied by complainant's lines of telegraph, and to be used in the same,
or substantially the same manner, to the end that the défendant may
transfer and vest in said competing company ail the rights and privi-
lèges now vested in complainant.
In paragraph 26, complainant avers that the termination of said
agreements by the said défendant, as set forth in said notice of June
2, 1902, and the termination of complainant's right to maintain and
operate telegraph lines along said line of railway, as contemplated and
threatened by the said défendant, is contrary to the stipulations and
obligations of the said contract, and is contrary to, and will be de-
structive of, the rights of complainant, as secured to it under and by vir-
tue of said agreement, and is contrary to the intent and purposes of said
act of Congress, and would work irréparable loss and injury to the com-
plainant, to the public, and to the government of the United States.
Complainant then prays:
(i) That défendant may make a true answer, not under oath ;
(2) That défendant may be required to specifically perform said
agreement, said complainant being ready and willing, and hereby of-
fering specifically, to perform said agreement in ail things on its part
and behalf ;
(3) That the court will order and dedree a perpétuai injunction
against the défendant, the Pennsylvania Company, "restraining it from
in any manner violating any of the provisions of said contract on its
part, or in any manner interfering with the location, construction, main-
tenance and opération of your orator's said lines of telegraph, under
and in accordance with the provisions of said contract, upon the road
or right of way of said défendant" ;
(4) That complainant's right under the said acts of Congress, to
construct, maintain and operate its said line of telegraph, be established ;.
(s) That a temporary injunction may be issued ;
(6) Other and further relief.
WESTEKN UXION TELEGKAPH CO. V. TENXSYLVAXIA CO. 857
As the case made by the allégations of the amended bill must be
accepted by the court, the foregoing extended statement of the same is
necessary to a clear understanding of the questions raised by the
demurrer of the défendant thereto. The demurrer is gênerai and spé-
cial. The spécial grounds of the demurrer are, in substance:
(First) That under the terms of the contract, the défendant had the
right to revoke the contract, upon reasonable notice ; and that the notice
given was such a reasonable notice;
(Second) That the relationship existing between the plaintifï and de-
fendant, as shown by the bill, is the joint ownership and opération of a
line of telegraph for their joint benefit. That plaintifï and défendant,
by said contract and the paroi modifications thereof, became partners,
and that such partnership was determinable by the notice given by de-
fendant for that purpose, and that as the bill avers fuU performance by
both plaintifï and défendant, of the obligations of said contract, there
is no ground for équitable relief;
(Third) That the subject-matter of the contract, as set forth in the
bill, is of such a character that a court of equity will not undertake
to supervise the spécifie performance thereof ;
(Fourth) That the essential provisions of the original contract are
illégal and void, in that it was intended thereby to create a monopoly
in the telegraph business, and for that reason, the contract is not such
as a court of equity will enforce ;
(Fifth) That it appears by said bill that said written contract has
been in essential particulars modified by paroi, and that the relation
between the plaintifï and défendant, if not a partnership, is one based
upon a paroi contract, which is contrary to the statute of frauds, and
void.
Défendant further demurs specifically to those portions of the bill
which refer to or aver any rights alleged to be vested in plaintifï by
reason of the acts of Congress set forth in said bill. The court sus-
tained the demurrer, and entered a decree dismissing the bill.
The grounds of this decree appear, in the opinion of the learned
judge of the court below, to be, that the said agreement of October,
1856, did not convey to complainant an easement or grant of real
cstate in perpetuity, but was an undertaking for the furtherance of a
joint enterprise, and was therefore terminable at the option of either
party, upon reasonable notice, and the reasoning and argumentation
of the opinion is in support of this conclusion. There is an implication
in this, that if an easement of support over the lands of the railway
Company, upon the pôles affixed to said lands, was, in eflfect, granted to
complainant, by the contract of 1856, there Ijeing no words of limita-
tion therein, the interest of complainant under said contract was in
perpetuity. But it does not follow that, if the said contract is not to be
interpreted as granting an interest in realty, but as being only an under-
taking of a joint enterprise, for the benefit of the parties thereto, it
is necessarily revocable at the will of either of the contracting parties.
There is in this case much to support the contention, that the con-
tract of 1856 was, in efifect, the granting of an easement in gross, by
the railway company to the complainant, and imposed a perpétuai servi-
tude, in favor of said complainant, upon the lands of the railway com-
858 320 FEDERAL REI'ORTlvU.
pany. The pôles, with their cross-arms, which, by the express ternis
of the contract of 1856, were to be securely and permanently iîxed in
the ground by the railway company, along its railroad, and were to be
by it maintained and repaired indéfinitely, were assuredly part of the
real estate of said company. It was upon and over thèse pôles and cross-
arms, to be thus indéfinitely maintained and renewed by said company,
that the telegraph company were given the right, by said contract, to
string its wires. There is no express limitation in the contract itself,
as to the duration of the rights created by said contract, and it is a
recognized doctrine of equity, that no technical words of conveyance
are necessary to create the interest intended to be created, if such in-
tent clearly appears by the whole scope and ténor of the writing. Be-
ing in writing, there is no ground for objection, that the effect claimed
for this agreement is in contravention of the statutes of fraud, of either
of the States, whose statutes in that respect would be applicable.
If complainant, under the agreement in question, bas a right to
daim an easement in the lands owned or possessed by the railroad
company, it is conceded that, it is one of perpétuai duration, and there-
fore nonrevocable by the owner of the servient estate. So also regard-
ing the agreement of 1856 as a mère license in writing, to complainant,
to occupy the lands owned or possessed by the railroad company, for
the purposes of its telegraph line, which, by the érection of said Unes
and the expenditure of money in other respects, as incident thereto, bas
become a license executed, and, not being within the denunciation of
the statutes of fraud, has ripened into an interest in realty, the same,
by reason and authority, must be considered nonrevocable. Le Fevre
V. Le Fevre, 4 Serg. & R. 241, 8 Am. Dec. 696; Rerick v. Kern, 14
Serg. & R. 267, 16 Am. Dec. 497; Swartz v. Swartz, 4 Pa. 353, 45 Am.
Dec. 697 ; Huff v. McCauIey, 53 Pa. 206, 91 Am. Dec. 203 ; Thompson
V. McElarney, 82 Pa. 174; Pierce v. Cleland, 133 Pa. 189, 19 Atl. 352,
7 L. R. A. 752 ; Hornback v. C. & Z. R. Co., 20 Ôhio St. 81 ; Wilson v.
Chalfant, 15 Ohio, 248, 45 Am. Dec. 574; U. S. v. B. & O. R. R. Co.,
I Hughes, 138, Fed. Cas. No. 14,510; Messicks v. Midland Ry. Co.,
128 Ind. 81, 27 N. E. 419 ; Baker v. C, R. I. & P. Ry., 57 Mo. 265.
It is not necessary, however, in the view hère taken of this case,
to discuss the question, whether a technical easement, appurtenant or in
gross, has been, in effect, granted by the railway company to the com-
plainant, by the provisions of the contract of 1856, nor is it important
that we should call the interest of complainant, founded on its con-
tract with the predecessor of défendant, a license executed, or other-
wise label the claim set up and founded upon the allégations of the
amended bill of complaint.
Accepting the conclusion at which the court below arrived, that no
easement or interest in realty, as such, was created in favor of the com-
plainant, we think it still remains to consider whether a correct inter-
prétation of the contract, set forth in the bill of complaint, does not ex-
clude the existence of any power of revocation, at the mère will of either
party to the contract. Contractual relations of a permanent character
may hâve been established, in the matter now before us, even though no
easement or interest in realty were granted. What thèse contractual re-
lations are in the présent case, and whether they are revocable at the
WESTERN UNION TELEGRAPH CO. V. PENNSTLVANIA CO. 859
mère will of either complainant or défendant, are the underlying ques-
tions in this case. A proper interprétation of the contract is necessary
to their solution.
Referring, then, to the contract as set out in the bill of complaint,
we find that its provisions are contained within a narrow scope, and free
from complication. The gênerai purpose of the contract is easily ar-
rived at. The telegraph company was extending its lines from the
East to the West, and was naturally desirous, for that purpose, of ob-
taining a right of way, as direct as possible, one that would be protect-
ed, and form a link between its lines, east and west of the said Cleve-
land & Pittsburg Railway. The line of an established railway, Hke the
Cleveland & Pittsburg Railway, would accomplish both thèse objects.
It ran in the right direction, and its occupation and use for railway
purposes aiïorded a protection not otherwise to be obtained, without
great expenditure of capital. Moreover, the use of the right of way
by the telegraph company created no possible interférence with the
opération of the railway. On the other liand, a télégraphie service was
obviously necessary to the successful management of the railway. It
needs no argument to show that this télégraphie service could be more
economically obtained by an arrangement with a telegraph company
that needed a right of way along its line, which could be maintained and
used without any détriment to railroad opérations, than by the expendi-
ture of capital necessary to erect and equip, for its own use, a line of
telegraph. So the railroad company agreed to fix and maintain a line
of pôles along its roadway, to be used by the telegraph company for
stringing its wires, and the telegraph company agreed to furnish wire,
insulators, instruments, patents; and everything except the posts and
pôles and cross-arms, and to complète said line with one wire and ex-
tend it upon the pôles then up, or upon pôles, equally as good, along the
Ohio & Pennsylvania Railroad from Rochester to Pittsburg, and put
said line in opération as soon after the pôles were set as was reasonably
practicable, and to open and equip offices at such places on the line as
the said railroad company should designate. And the said telegraph
company further agreed to send, free of charge, over said Une, ail
messages appertaining to the business of said railroad, including the
ordinary family communications of its officers and agents, giving préf-
érence to messages of emergency or pertaining to accidents.
Thèse are the gênerai and salient features- of the contract made in
1856, between the complainant and the Cleveland & Pittsburg Railway
Company, as the same are set forth in the bill of complaint. Other and
niinor features are, that the railroad company is to pass or convey, free
of charge, over its said road, ail men or materials used and employed in
building and operating said line. Also, that the said railroad company
is to hâve the right at any time to put upon said posts or cross-arms
a telegraph wire, and work the same for its exclusive use, and the tele-
graph company is also to bave the right to string another wire, for
its own use, upon said posts or pôles.
The seventh paragraph of said agreement provides that, "after the
telegraph 'ine is completed with one or more wires, the same is to be
kept in repair by the said railroad company, and maintained in first
rate \\orking order, as far as practicable. But the said telegraph com-
S60 129 FEDERAL KEPOETEB.
pany îs to furnish or pay to the said raihvay company the cost of the
wires and insulators used and necessary in maintaining the wire or
wires of the said telegraph company in good working order."
The amended bill of complafnt, as hereinbefore recited, in its eighth
paragraph, states a modification of this written contract, which is,
that after the assignaient of the lease of the Pennsylvania Railroad
Company to the défendant, in February, 1873, by the consent and ac-
quiescence of complainant and défendant, the provisions of the seventh
article were modified, in that, complainant furnished ail the materials
for the repair or reconstruction of the said telegraph lines, and the de-
fendant furnished the labor therefor. This modification is not a great
or radical one, and amounts to only this, that the telegraph company,
instead of paying to the railroad company the cost of material necessary
to the maintenance of the line, was to furnish the materials themselves,
the railway company furnishing the labor, as theretofore. It is not to
be Qverlooked in this connection, that some of the essential averments
of the amended bill cover any supposed enlargement of the scope of
the original contract, by the paroi agreements of complainant and de-
fendant, therein stated. In paragraph 10 of the amended bill, it was
averred, that subséquent to the assignment of tlie said lease of the Cleve-
land & Pittsburg Railroad to the défendant, the Pennsylvania Com-
pany, by mutual agreements betvveen complainant and défendant, addi-
tional wires for the spécial use, and at the cost and expense, of the
parties respectively, had been strung upon said line of telegraph "con-
structed and maintained under the provisions of the said contract," and
that the additional wires belonging to the défendant railroad company,
hâve been maintained and operated by complainant and the said rail-
road company "under the provisions of said agreement, and that the
maintenance and reconstruction of said lines hâve fallen under the provi-
sions of said contract, as modified as hereinbefore set forth." It is sig-
nificant that, by the averments of paragraph 8 and paragraph 10, "recon-
struction" was included withm the obligation for maintenance and re-
pair, by mutual understanding between complainant and défendant.
In the seventeenth paragraph of the amended bill, complainant avers
as follows :
"Your orator further says that ail the telegraph lines along and upon the
said line of railway operated by the défendant, as hereinbefore described,
hâve been constructed thereon with the express consent of the défendant rail-
way company or of its predecessor In title, the Oleveland & Pittsburg Railroad
Company, with the well understood purpose that the same should (orm a part
of and be connected with the other Unes of telegraph belonging to your orator,
and with the knowledge of the said railway company, were erected and in-
corporated in and beeame part of and were operated as a part of the gênerai
System of telegraph lines owned and controlled by your orator ; that the said
lines of telegraph hâve been at ail times operated and maintained. not only
as connected with ail the lines of telegraph along and upon the said railroad
owned and operated and controlled by the défendant company, but also as an
intégral part of the gênerai System of telegraph lines owned, controlled and
operated by your orator within the United States and Dominion of Canada,
and the other lines of telegraph connected therewith, as hereinbefore more
fully set forth."
In the view taken by the court below, that no interest in realty
was granted by the agreement of 1856, and that the contract betvveen
WESTEKN UNION TELEGKAPH 00. V. PENNSTLVANIA CD. 861
the parties was merely for a joint enterprise, which, so far as it concern-
ed property, concerned personal and net real property, there is no reason
why the contract, with its modifications, as stated in the bill, and which
hâve been in part performed, should not be recognized in a court of
equity, as the foundation for a suit for spécifie performance, or for
injunction. Leake on Contracts, 306.
Such being the nature of the contract, and the circumstances sur-
rounding it, as stated by the amended bill of complaint, we come to
the question, is it in the power of either party, without the consent of
the other, to terminate said contract, and free itself from ail obligation
under it? We think it will sufficiently appear, from a careful consid-
ération of the contract, with its modifications, as set forth in the bill, the
circumstances attending its origin, the purposes had in view, and the
conduct of the parties throughout the long period during which those
purposes seem to hâve been accomplished, that there was no intention
entertained by the parties to the contract, to limit its duration, or con-
fer upon either party, without the consent of the other, the right of rev-
ocation. If a contract is not revocable at the will of either party, or
otherwise limited as to its duration, by its express terms, or by the
inhérent nature of the contract itself, with référence to its subject-mat-
ter or its parties, it is presumably intended to be permanent and per-
pétuai in the obligation it imposes. That the life of a contract should
dépend on the mère will of either party thereto, without the consent
of the other, is a limitation so important and drastic, that it is hard to
conceive why, if the parties intended it, they should not express that
inteiiLon in the contract itself.
The contractual relations established between complainant and de-
fendant, as we gather them from the averments of the amended bill,
(which, for the purposes of this demurrer, must be taken as making the
case before us), involve mutual covenants, which are mutual considéra-
tions. It is true, that some of thèse are executory in their character,
but many most important stipulations hâve been executed by the com-
plainant. The installment of the telegraph line and plant, by complain-
ant, was an initial and executed considération, involving not only a
large expenditure of money, but the orderly and successful establishment
of its System east and west of the lines of the défendant, and has had
an important influence on the situation of the parties. The scope and
purposes of the contract were, we think, within the powers of both
corporations. It has been an important, useful and economical means
of advancing the public ends, for which both were created. That the
railroad company has found it to be most convenient and economical
to make such an arrangement with an established telegraph company,
rather than to incur the expense of building and equipping telegraph
lines for itself, is evidenced, as we hâve already said, by the statement
in the bill, that a rival telegraph company is to be installed in its place,
to perform the same service, and in the same manner, as is now per-
formed by the complainant under its contract. The essential nature
of the service is such as to indicate that permanency in contractual rela-
tion was intended by the contract under which thèse parties hâve lived
for nearly half a century. We certainly find nothing in the character of
the relation established between thèse parties so long ago, as would indi-
862 129 FEDBEAL EEPOETEB.
cate that it was terminable at the will of either party, without the con-
sent of the other. If a power of revocation was intended by the parties
to this contract, it would seem the natural and logical course, that such
power should hâve been expressly incorporated in the contract itself.
Apart from those contracts, which, from their inhérent nature, imply
a power of revocation, it would seem that the intention of parties to
an agreement, that it should be perpétuai and without limit as to dura-
tion, could not be more properly expressed than by silence as to any
time limit, or power of revocation. Reason and authority would seem
to concur in support of this doctrine, and we find no direct and con-
trolling authority to controvert it. The reasoning of the court below
has apparently been on a contrary presumption, that is, that every
written contract, vesting no interest in realty, and silent as to the time
or method of its duration, is to be presumed revocable at the will of
either party, upon reasonable notice.
The case of Great Northern Ry. Co. v. Manchester, Sheffield, etc.,
Ry. Co., 5 De Gex & Smale's Chan. Rep. 138, is interesting upon this
point. The opinion delivered by Vice Chancellor Parker, is interesting,
and its reasoning is not inapplicable to the case before us. The syllabus
of the case, which correctly summarizes the points decided, is as fol-
lows :
"Two directors of a rallway company (the plaintifEs) met two directors of
another rallway company (the défendants), and entered into an agreement In
vvriting, signed by ail four directors on behalf of their respective companies,
whereby it was mutually agreed that each of the companies should, inter-
changeably, use the rallway of the other company, on certain specifled terms.
The agreement contained no words of succession or of restriction : Held,
that thèse contracts were not mère licenses determinable at will, but con-
ferred rights of a permanent nature on the companies. Held, also, that the
terms of the contract were not toc vague, but that the user conceded was
one consistent with the proper enjoymeut of the railway, the subject matter
of the contract, and within the rights of the grantiug party. Held, also, that
this court will grant an injunction restraining the défendants from acting
contrary to a négative agreement, although it cannot specifically enforce the
performance of the whole of the agreement."
The Vice Chancellor, in describing the right conferred by the con-
tract, upon the complainant, uses this language :
"If, for valuable considération, a party says that another shall hâve the
right of using a thing, a right in the nature of an easement, I think that,
prima facie, the inference to be drawn from that language, would be that
it was not a mère license, determinable at the will of the party who had
granted it."
The case of Llanelly Ry. & Dock Co. v. London & N. W. Ry. Co.,
L. R. 7 H. L. 550, is instructive on this point. The judgment of the
flouse of Lords was unanimous, and affirnied the unanimous décision
of the Lord Justices of Chancery Appeal. L. R. 8 Ch. App. 942, The
facts of the case are, briefly, as f oUows : The Llanelly Company being
in want of money to complète an extension Une, applied to the N. W.
Railway Company for a loan of £40,000, and it was agreed that the N.
W. Company should lend the money and hâve running powers over
the lines of the Llanelly Company. An agreement under seal was en-
tered into, not referring to the loan, by which it was agreed, (i) that,
subject to such by-laws and régulations of the Llanelly Company as
WESTERN UNION TELEGRAPH CO. T. PENNSTLTANU 00. SÔ3
should from time to time be in force, the N. W. Company might run
over and use the railways of the Llanelly Company, and their sta-
tions, sidings, and conveniences ; (2) that the receipts from through
traffic should be apportioned between the two companies according to
mileage proportion, with a certain allowance per cent, to the N. W.
Company out of the Llanelly Company's share; (3) that the N. W.
Company might hâve their own staff at the stations on the Llanelly
Company's lines ; (4) that, whether the running powers were exercised
or not, there should be a complète System of through booking and
through fares from the stations of each company by the lines of the
other ; (5) that, if the running powers were exercised, the fares should
be fixed by the N. W. Company, and if the Llanelly Company objected
to any of them, then by arbitration ; (6) that the N. W. Company should
not carry the local traffic on the Llanelly lines, but should, if required by
the Llanelly Company, carry local passengers for 15 per cent, of the
local fares ; (7) that the companies should send by each other ail traffic
not otherwise consigned to and from stations on the lines of each other
whenever such lines formed the shortest route ; (8) that any différence
under the agreement should be settled bv arbitration under the Railway
Companies Arbitration Act 1859. The N. W. Company advanced the
£40,000, and the agreement as to running powers was acted upon for
some time, but afterwards the Llanelly Company gave three months'
notice to détermine it.
The opinion of the Court of Chancery Appeals was delivered by
Lord Justice James, holding that évidence of the advance of the £40,-
000 having been the considération for the agreement, was admissible,
but not on the ground that it was a considération for the contract, be-
cause, apart from this évidence, the agreement was not determinable,
and saying:
"In my opinion, the évidence Is not material, because, independently of
that, it appears to me that there is sufficient considération expressed in the
agreement itself, and that the agreement, on the face of it, without any référ-
ence to that évidence, Is conclusive upon the parties."
As to the main point in the case, the language of Lord Justice
James is as follows:
"The contention on the part of the Llanelly Company, Is, that this is an
agreement determinable at will, or by reasonable notice. The contention of
the London and North Western Kallway Company Is, that it Is, as it is ex-
pressed to be, an agreement without any limit whatever in point of time.
The case is in many respects slmilar to tne case of the Great Northern Rail-
way Company v. Manchester, Sheflield and Lineolnshire Railway Company
(1), in which there were running powers glven interchangeably between the
railway companies, and the Vice Chancelier held that they were given In
perpetuity. In my opinion this case is not distinguishable on any sufficient
ground from that case, which was decided as far back as the year 1851, and
lias been considered to be law from that day to this. As that, however, was
only the décision of a Vice Chancelier, and as It has been contended before
us that a great part of the ratio decidendi in that case does not apply to this
case, it is incumbent upon us to express our own opinions upon the matter
as if no such authority existed; and upon gênerai principles I hâve formed
a very decided opinion that I should hâve arrived at the same conclusion
as the Vice Chancelier did in that case ; and I should, If the thing were res
Integra, arrive at a simllar conclusion In this case. I start with this proposi-
tion, that prima facie every contract is permanent and irrévocable, and that
864 129 FEDERAL KEPOKTEE.
it lies upon a person who says that It Js revocable or determlnablc to show
elther some expression in the contract itself, or something in the nature o£
the contract, from which it is reasonably to be implied that It was not in-
tended to be permanent and perpétuai, but was to be in some way or other
subject to détermination. No doubt there are a great many contracta of that
kind ; a contract of partnership, a Contract of master and servant, a contract
of principal and agent, a contract of employer and employed in various
modes — ail thèse are Instances of contracts in which, from the nature of the
case, we are obllged to consider that they were intended to be determinable.
Ail the contracts, however, in virhich this bas been held are, as far as I know,
contracts which involve more or less of trust and confidence, more or lésa of
délégation of authority, more or less of the necessity of being mutually satis-
fied with each other's conduct, more or less of Personal relations between the
parties.
But I am of opinion that no such considération applies to a case in which
there Is a grant, or an agreement In the nature of a gi'ant, of a wàyleave, or
of running powers, which is only another mode, according to my view of it,
of expressing a wàyleave. • * «
That would seem to me to be the principle with which we must start in
considering whether this agreement, which is in indefinite terms, means that
the London and North Western Rallway Company shall bave power from time
to time, and at ail times, to run over and use with their engines, carriages,
vehicles, and servants the Unes of the Llanelly Company and their conveni-
ences, or that they shall bave power only duriug the pleasure of the Llanelly
Company. Then, when we come to look into the agreement, It appears to me
that almost every line of it is full of permanence and adverse to the notion
of its being revocable."
An appeal was taken to the House of Lords, and the judgment and
opinion of Lord Justice James were expressly and unanimously affirm-
ed, Lord Chancelier Cairns and Lords Chelmsford, Hatherly and Sel-
bourn delivering conçu rring- opinions.
As the learned judge of the court below, as well as the counsel for ap-
pellee, seeks to distinguish this case from the one in hand, by observing
that a présent and valuable considération, to wit, the loan of £40,000,
had passed to the party that afterwards sought to terminate the con-
tract; it is to be observed, that this so-called "valuable considération"
was a loan, and not a payment of money, for the privilèges obtained.
The £40,000 was the considération of the contract of loan, and was ad-
vanced on the faith of debenture securities bearing four per cent, in-
terest. But it is sufficient to call attention hère to the fact, that Lord
Justice James, in the Court of Chancery Appeal, expressly disclaims the
admissibility of the contract of loan, as évidence of considération for
the principal contract then before the court, and distinctly says, as al-
ready quoted :
"In my opinion, the évidence Is not materlal, because, Independently of that,
It appears to me that there Is sufficient considération expressed in the agree-
ment Itself, and that the agreement, on the face of it, without any référence
to that évidence, is conclusive upon the parties."
So aiso, in the House of Lords, Lord Chancellor Cairns, in delivering
the principal opinion, says, speaking of the contract :
"The later sections, and especially that seventh section, appear to me
clearly to carry a considération which would be amply sufficient, as a matter
of considération, to support this agreement upon the face of it, and without
référence to the loan to which I bave already referred."
But whéther the loan of £40,000 was an essential part of the consid-
ération, or not, the ground upon which the nondeterminability of such
WESTERN UNION TELEGEAPH CO. V. PENNSTLVANIA CO. 863
a contract at the will of one of the parties, is placed, is that there had
been an executed considération, which had altered the situation of the
parties, to the loss of the one against whom the contract was sought
to be determined, and not the mère fact that there was a paid up money
considération. In other words, the essential requirement is a real and
valuable considération, executed in whole or in part, and not a particu-
lar kind of considération. In the case of the Great Northern Ry. Co. v.
Manchester, Sheffield, etc., Ry. Co., above referred to, there was no
considération beyond the part performance of the mutual covenants
of the contract.
Learned counsel for appellee contend that the relationship establish-
ed between the parties under this contract, was really a partnership, and
therefore comes within the rule applicable to partnership contracts con-
taining no time limit, and so is revocable at the will of either party.
We do not think this contention a sound one. The contractual relation
between complainant and défendant did not embrace the éléments of a
partnership. The several contributions of the parties to what, if you
please, was a joint enterprise, was each for its own benefit, and did
not, and was not intended to, resuit in the product of a common fund,
to be shared as profits. Nor was there the incident of joint and indi-
vidual liability for the debts incurred in the business by one of the
parties without the consent of the other, growing out of the implied
agency of each partner to act for the others, which is commonly char-
acteristic of a partnership. The language of the Lord Chancellor, in
his opinion, is pertinent to this contention of the counsel for the appel-
lee. It is as follows :
"My Lords, référence was made to the well-known cases of contracts of
hiring service and contracts of partnership. Thèse cases appear to me to
hâve no analogy whatever to the présent. With regard to contracts of hiring
and service the law Is well settled as applied to différent kinds of hiring and
service, assigning to each of them certain notices by which they can be
terminated ; and they are, besides, engagements which dépend upon the Per-
sonal confidence which one of the parties reposes in the other, and which in
their nature cannot be supposed to be of a personal character. With regard
to contracts of partnership, they also are ah'eady ruled and settled, by law,
to be capable of termination at any moment unless a deflnite limit is pre-
scrlbed upon the face of them. And, the law being well settled, wheu you
bave a contract of that kind, you apply the understood law, and you hold
that the parties, knowing what the law was, must be supposed to hâve in-
tended to enter into a partnership which could at any time be terminated,
if they did not provide upon the face of their contract that it should be a con-
tinuing partnership. But your Lordships hâve to décide hère without any
rule of law already laid down, with regard to agreements of this kind, upon
the nature of the agreement itself, and upon the construction of that agree-
ment as we flnd it expressed; and, applying the considérations which I hâve
pointed out to your Lordships, I should humbly suggest to you, that those
considérations clearly lead to the conclusion that an agreement of the kind
which I hâve read, entered into under the eircumstances which I hâve men-
tloned, must, in its nature, be an agreement which should hâve a continuing
opération, unless some power is glven on the face of it to the parties to tenu-
inate the agreement."
If the agreement in the case now before us were one terminable at
the will of either party, without the consent of the other, then it could
hâve been revoked by the railroad company as soon as the Une had been
established and the offices equipped by the complainant. We do not
129 F.— 65
866 129 FEDERAL EEPOKTER.
believe that such a power can be fairly inferred froni the nature of the
contract, the circumstances that attended the making of it, or the situ-
ation of the parties.
The judgment of the Suprême Court of the United States, in the
case of Franklin Tel. Co. v. Harrison, 145 U. S. 459, 12 Sup. Ct. 900,
36 L. Ed. 776, seems fully to support the position hère taken. In that
case, the telegraph company had given to Harrison the right to put up,
at his own expense, and maintain and use a wire upon the pôles of the
company; between New York and Philadelphia, the company to hâve
the use of the wire when not so employed. The company agreed to
keep and maintain the wire, and to bear ail expenses connected with its
working, and to permit such use by Harrison for a period of ten years.
At the end of that time, the wire was to be the property of the com-
pany, the company agreeing to lease the same to Harrison for his own
use, for the sum of $600 per annum, payable quarterly, and upon the
same terms, in ail other respects, as if the wire had not been given up
to the company. The wire was put up by Harrison, and used by him
for a term of 10 years, without compensation, and after that, at the
agreed compensation. The company then notified Harrison, that the
use of the wire by him had become such as to exclude the company
from ail use of it, which was not contemplated by the original contract,
and that the agreement would be terminated by the company. The
bill was filed by Harrison, to restrain the company from so doing. It
had been contended in the circuit court, as it was contended in the
Suprême Court, that the agreement to lease the line, at the expiration
of 10 years, to Harrison, for a yearly rent of $600, was revocable, be-
cause, no term being mentioned, the use of the word "lease" imported a
contract revocable from year to year. The decree of the Circuit Court,
which was held by Mr. Justice Bradley and Judge Butler, ordered
and adjudged that Harrison was entitled, so long as the défendant, the
Franklin Telegraph Company, their successors or assigns, should keep
up and maintain the line of telegraph between the cities of New York
and Philadelphia, mentioned in said agreement, or any telegraph line
between said cities, to an irrévocable license, subject to the payment
of $600 per annum, payable quarterly, etc. This decree was afErmed
by the Suprême Court, and the right of the complainant to a decree for
spécifie performance, fully sustained.
The case of Texas, etc., Ry. Co. v. Marshall, 136 U. S. 393, 10 Sup.
Ct. 846, 34 ly. Ed. 385, much relied upon by appellee, and cited by the
learned judge of the court below as a leading authority in support of his
conclusions, originated in a suit brought by the city of Marshall, Tex.,
to enforce spécifie performance of a contract of the railway company, to
"permanently establish its eastern terminus and Texas office at the city
of Marshall, and also to establish and construct at said city the main
machine shops and carworks of said railway company." In considéra-
tion of this engagement on the part of the railroad company, the city
of Marshall conveyed to the said company, a lot of ground suitable for
said buildings, containing about 66 acres, and in addition, donated to
said company county bonds to a large amount. The case went on
to final hearing, upon bill, answer, exhibits and testimony on both
sides. It appeared that, pursuant to the contract, the railway com-
WESTERN UNION TELEGEAPH CO. V. PBNNSTLVANIA CO. 867
pany did establish its eastern terminus and Texas office at the said city
of Marshall, and did locate and construct there its main machine shops
and carworks, and so maintained them during a period of eight years.
At the end of that period, the railroad company removed its office
and shops to other cities at a considérable distance from the city of
Marshall. The railway company introduced évidence tending to show
that the exigencies of its business required the change thus made, and
that it would hâve been hindered and disabled in the performance of its
public service, by longer maintaining its office and shops within the lim-
its of the said city. Mr. Justice Miller, in delivering the opinion of the
Suprême Court, maintaining the right of the railway company to make
the said change, does not place that right upon the ground that the
said contract was one determinable or revocable at the mère will of the
railway company, but upon the ground that it had been fully executed
and performed by said company, by the original location of the said
office and shops, and their maintenance at the said city during a period
of eight years, as will clearly apoear from the opinion of the court. The
ratio decidendi sufficiently appears in the following extracts from the
opinion :
"The object of the city might very well be supposed to hâve been attaineâ
by the sélection of the city as a terminus of the railroad, the construction
and establishment there of its offices, its dépôt, its car manufactory and other
machlnery, since there was hardly any ground to suppose that the railroad
company would ever hâve inducements enough to justify it in removing aJ
thèse things to another place. * * • It appears to us, so far from this,
that the contract on the part of the railroad company is satisfied and per-
formed when it establishes and keeps a dépôt, and sets in opération car
Works and machine shops, and keeps them going for eight years, and until
the interests of the railroad company and the public deniand the removal
of some or ail of those subjects of the contract to some other place. This
was the establishment at that point of the things contracted for' in the agree-
ment. It was the fair meaning of the words 'permanent establishment,' as
there was no intention at the time of removing or abandonlng them. The
word 'permanent' does not niean forever, or lasting forever, or existing for-
ever. Tlie language used is to be consldered according to its nature and its
relation to the subject matter of the contract, and we think that thèse things
were permanently establlshed by the railway company at Marshall."
There is hère no discussion of the right of the railway company to ter-
minate an existing contract, but a décision by the court that the contract
in question must be considered as having been sufficiently performed by
the railroad company, by the location and maintenance of its office and
shops, with no présent purpose otherwise than permanently to maintain
them. It is clear that the grounds of this décision difïer materially
from those upon which the présent case must be determined.
On the whole, we are of opinion that the relations created between
the parties by the agreement in question, were not merely personal, as
in cases of partnership, agency, master and servant, and the like, but
that rights in property and the user thereof, rights in the nature of an
easement, were conferred upon the appellant, and that no right in the
appellee to revoke or détermine the same, in tlie absence of express stip-
ulation to that effect, is to be inferred from the silence of the contract
in that respect, or from its terms, purpose, or inhérent nature.
This brings us to the other main contention of the appellee, to wit,
that this is not such a contract as will be enforced specifically, because,
868 129 FEDERAL REPORTER.
as alleged, first, the contract was intended to create a monopoly, and is
therefore illégal and void.. In support of this contention, the appellee
refers to the eighth paragraph of the agreement of 1856, which is as
follows :
"8th. The sald Railroad Company Is not to allow any other telegraph Com-
pany or individual to bulld or operate a line of telegraph on or along its said
railroad, or any part thereof."
This stipulation of the contract was undoubtedly valid, when made.
But it is contended, that the act of Congress, entitled "An act to aid in
the construction of telegraph Unes," etc., passed 10 years thereafter,
struck the stipulation with nullity, by providing that any telegraph Com-
pany, then or thereafter organized under the laws of any state, which
shall hâve accepted the provisions of the act, shall hâve the right ta
construct, maintain and operate lines of telegraph over and along any
of the military or post routes of the United States, which hâve been
or may hereafter be declared such by act of Congress. Undoubtedly,
the act of Congress renders nugatory the restraint imposed upon the
railroad company by the 8th paragraph of the contract referred to. It
does not follow, however, as contended by appellee, that the invalidity
of this eighth paragraph, after 1866, strikes also with invalidity the oth-
er provisions of the contract made 10 years prior to the passage of the
act referred to. It does not constitute the main considération of the
contract. It has never, during the long period of the existence of this
contract, been sought to be enforced, nor is it sought to be enforced
now. Neither the Postal Telegraph Company, nor any other telegraph
company has been made a party to this suit. No prayer in the bill asks
for any relief against any other telegraph company, or that any other
telegraph company should be prevented from construct' ';g, maintaining
or operating lines of telegraph over or along the railroad of the défend-
ant. Ail it asks, is that it, the Western Union Telegraph Company,
shall not be disturbed in the possession of its right of way over and
along said railroad, and in the possession of its offices and equipment,
as secured to it by contract.
It is perfectly well settled, that where one provision in a contract,
which does not constitute its main or essential feature or purpose, is void
for illegality, or otherwise, but is clearly separable and severable from
the other parts which are relied upon, such other parts are not afïected
by the invalid provision, and may be enforced as if no such provision
had been incorporated in the contract. The case of the U. S. v. The
Union Pacific Railway Co., supra, relied upon by counsel for appellee to
support the contention, that the whole contract between plaintiff and de-
fendant is invalid, by reason of paragraph 8 thereof being in contra-
vention of the act of Congress, is not inconsistent with the views just
enunciated. The suit in that case proceeded on the ground that the
Union Pacific Railway Company was conducting its business under
certain contracts and agreements with the Western Union Telegraph
Company, that were not only répugnant to the orovisions of the act
of Congress, of 1888, but were inconsistent with the rights of the
United States. The relief given was a decree, annuUing thèse contracts
and agreements and compelling the railway company to maintain and
operate telegraph lines on its roadways, as required by the act. The
WESTEEN UNION TELEGEAPH CO. V. PENNSTLVANIA CO. 869
first section thereof provides, that ail railroad companies to which the
United States hâve granted any subsidy, etc., and which, by the acts in-
corporating them, were required to construct, maintain, or operate tele-
graph lines, "shall forthwith and henceforward, by and through their
own respective officers and employés, maintain and operate, for railroad,
governmental, commercial and ail other ptirposes, telegraph lines, and
exécute by tnemselves alone ail the telegraph franchises conferred upon
them and obligations assumed by them under the acts making the grants,
as aforesaid." The case is a long one, and the facts complicated. In
regard to the contract of July i, 1881, between défendant and the
Western Union Telegraph Company, Mr. Justice Harlan, delivering
the opinion of the court, uses this language :
"But that agreement Is illégal, not slmply to the extent that It assumes to
give to the Western Union Telegraph Company exclusive rights and advan-
tages in respect of the use of the way of the railroad company î'iv telegraph
business ; but it Is also illégal, because, in effect, it transfers to the Western
Union Telegraph Company a télégraphie franchise granted it by the govern-
ment of the United States. The duty to maintain and operate a telegraph
line between the points specified in the Act of 1862 was committed by Con-
gress to certain corporations which it named, and neither they, nor any cor-
poration into which they were nierged, could, without the consent of Congress,
invest a state corporation wîth exclusive télégraphie privilèges on the line
of the roads it then owned or thereafter acqulred. The United States was
not bound to look to the Western Union Telegraph Company for the discharge
of the duties, the performance of which, in considération of the aid received
from the Government, the Union Pacific Railroad Company, and other named
companies, undertook to diseharge, for the beueflt of the United States and
of the public. No agreement with the telegraph company, to which the assent
of the government was not given, could take from the railroad company its
right at any tinie, to itself maintain and operate the telegraph line required
by the act of 1862 for the use of the government and of the public, nor im-
pair the power of Congress to require the performance by the railroad com-
pany itself of the duties imposed by that act."
We hâve quoted at length this passage from the opinion of the court
in this case, because it is thereby abundantly apparent why the court
Jield that those illégal provisions of the contract were its very méat and
i-ssence — the essential part of the agreement, and therefore struck the
whole contract with invalidity.
As another reason why this contract will not be enforced specifically,
it is alleged that it calls for continuing contributions of money and prop-
erty, and exercise of judgment and skill, and no decree that could be
entered by the court would be final. This contention is much insisted
upon, and requires careful considération. A prayer for a spécifie per-
formance always appeals largely to the discrétion of the court whose
jurisdiction is invoked. In the exercise of this discrétion, courts hâve,
it is true, in many cases declined to enforce a contract, whose provi-
sions are multifarious, and whose obligations are continuing, so that a
final decree cannot be made, which will end the matter, but will require
constant supervision and supplemental proceedings to enforce the per-
formance of constantly recurrins" duties. Each case, however, must
dépend upon its own circumstances.
The case of Marble Ce. v. Ripley, 10 Wall. 339, 19 L,. Ed. 955, cited
by appellee in support of its contention, illustrâtes very well the princi-
ple upon which courts will exercise their discrétion in refusing a decree
870 129 FEDERAI RBPOETEK.
for Spécifie performance. That was a case where oneowner of aquar-
ry conveyed the quarry lands to his co-owners, reserving a right in the
grantor to enter and keep possession, and take the marble himself, if
grantees did not furnish marble of a certain kind and under _ certain
conditions named in the contract. The court said, that the spécifie per-
formance of a contract will not be decreed, where the duties to be fulfiU-
ed by the grantee are continuons, and involve the exercise of skill, Per-
sonal labor, and cultivated judgment, as e. g., to deliver marble of cer-
tain kinds and in blocks of a kind that the court is incapable of deter-
mining whether they accord with the contract, or no. There were other
reasons given by the court for refusing a decree for spécifie perform-
ance, such as a want of mutuality in the contract, and that there existed
a complète remedy at law. But the reason first given, that the duties
to be specifically performed ■^ere not only continuons but involved the
exercise of skill, personal labor and cultivated judgment, sufficiently
indicate the line of démarcation between such continuons duties as
can be, and such as cannot be, the subject of a decree for a spécifie per-
formance. The use of individual skill, the performance of personal
labor, or the exercise of a cultivated judgment, are matters clearly
beyond the reach of a judicial decree, and cannot be efficiently compelled
by a mandatory process.
So also, the case of Port Clinton R. R. Co. v. Cleveland & Toledo
Ry. Co., 13 Ohio St. 544, which was, as stated by appellee, an action for
spécifie performance of a contract to operate a railway. We can well
understand, upon the principle laid down in the case of Marble Co. v.
Ripley, why the decree was refused in this case.
The case of Texas & Pacific Ry. Co. v. Marshall, supra, is much
relied upon as to this point also. This, as we hâve seen, was an action
to compel the Texas & Pacific Railway Company to maintain its offices
and shops in the city of Marshall, under a contract to that effect. Mr.
Justice Miller, having already decided that the contract did not require
a perpétuai maintenance of the shops and offices in the town of Marshall,
and that it had been substantially performed by the railway company,
proceeds to décide that, even if the contract were to be otherwise con-
strued, it is not one to be enforced in equity, and, founding his opinion
upon the décision of Marble Co. v. Ripley, says :
"If the court had renclered a decree, restorlng ail the offices and machinery
and appurtenances of the road, which hâve been removed from Marshall to
other places, It must necessarlly superintend the exécution of this decree.
It must be making constant inquiry as to whether every one of the subjects
of the contract which bave been removed has been restored. It must con-
slder whether this has been done perfectly and in good faith, or only in an
evasive marmer. It must be liable to perpétuai calls in the future for lllce
enforcement of the contract, and it assumes, In this way, an endless duty,
inappropriate to the functions of the court, which is as ill calculated to do
this as it is to supervise and enforce a contract for building a house or build-
ing a rnilroad, both of which hâve in this country been declared to be out-
side of its proper functions, and not withln its powers of spécifie perform-
anca"
So also, it has been held in the cases cited by the appellee, that a con-
tract to build a railroad will not be specifically enforced in equity, be-
cause there cannot be one decree made which would end the matter, but
WESTERN UNION TELEGEAPH 00. V. PENNSTLVANIA CO. S71
that it would necessarily require various supplemental proceedings.
We do not see that any of the cases cited in behalf of this contention
by the appellee, are applicable to the case in hand. The spécifie per-
formance which is sought hère, is that the défendant should observe
the contract under which both parties hâve lived for nearly half a
century, by not interfering with complainant's rights under said con-
tract, and by not compelling complainant to remove its wires and dis-
mantle its offices along the line of defendant's road. It thus appears
that spécifie performance, in the proper sensé of those terms, is not the
main relief sought by the bill. The prayer which, if granted, will be op-
erative and efficient to give to complainant the remedy it demands and
requires in this case, is the injunctive process of the court. It asks that
the défendant company may be enjoined from interfering with the lo-
cation, construction, maintenance and opération of complainant's said
îines of telegraph, under and in accordance with the provisions of said
contract, upon the roadway or right of way of the said défendant. So
that, when the court has determined that the contractual relations which
hâve existed so long between the parties, are not determinable merely
at the will of the défendant, it means nothing more than that those re-
lations shall continue as they hâve heretofore existed. Such a détermi-
nation does not involve any change in the présent situation. Nothing is
required to be done by either complainant or défendant, other than
they hâve been doing for nearly half a century, and are still continuing
to do. It does not require, as in the case of Texas & Pacific Ry. v.
Marshall, that extensive workshops and office buildings should be moved
from one location to asiother and distant one. It does not require the
défendant to build or operate a railroad, or even to build or operate a
telegraph line. Ail that is required, is that the status quo should be
preserved, and the complainant not interfered with. Injunctive relief
is the principal, if not the only, relief required. If, however, after a de-
cree giving such relief, difficulties should develop in the relations here-
tofore existing under the contract, such difficulties may be dealt with
as they arise. We are not to assume that the mandate of the court
will not be respected and obeyed, or that there will be any real difficulty
in simply maintaining the old-time and existing relations between com-
plainant and défendant.
A number of cases hâve been cited by the appellant, which maintain
to the fullest extent the views we hâve hère expressed. Without intend-
ing to discuss them at length, we will refer briefly to the case of Joy v.
St. Louis (C. C.) 29 Fed. 546. A railroad company claimed, under cer-
tain contracts, a right to the use of the terminal facilities of another rail-
road company, for the use of its trains. The provisions of the contract
were many and complicated. A bill was filed for spécifie performance.
The case was tried before Judge Brewer, then Circuit Judge, who en-
tered a decree in accordance with the prayer of the bill. In the course
of his opinion, he says :
"I see no satisfactory reason why courts may not also hold sufflclent and
valid a mère contract for the right, and, determining the right, also settle
and prescribe the terms of the use. It is true, that such a decree cannot be
executed by the performance of a single act. It is continuons In its opéra-
tion. It requires the constant exercise of judgment and skill by the offlcers
of the corporation défendant ; and, therefore, in a qualified sensé, it may be
872 129 FEDERAL REPOETBR.
true that the case never is ended, but remains a permanent case in the court,
performance of whose decrees may be tbe subject of repeated Inqulry by pro-
ceedings in the nature of contempt. * * ♦ So, wlien a deeree passes in a
case of this klnd, It remains as a permanent détermination of tlie respective
rlgtits of the parties, subject only to the further right of either party to apply
for a modification upou any changed condition of afCairs."
An appeal was taken to the Suprême Court of the United States, and
the deeree of the Circuit Court was unanimously affirmed. In delivering
the opinion of the Suprême Court, Mr. Justice Blatchford says :
"In the présent case, It is urged that the court will be called upon to déter-
mine, from time to time, what are reasonable régulations to be made by the
Wabash Company for the running of trains upon its tracks by tbe Colorado
Company. But this is no more than a court of equity is called upon to do,
vvhenever ît takes charge of the running of a rallroad by means of a receiver.
Irrespective of this, the deeree is complète in itself and disposes of the eon-
troversy ; and It is not unusual for a court of equity to take supplemental
proceedings to carry out its deeree and make It effective under altered cir-
cumstanees."
See, also, Chicago, R. I. & Pac. Ry. Co. v. Union Pac. Ry. Co. (C.
G.) 47 Fed. 15; Frankhn Tel. Co. v. Harrison, supra; Wolverhampton
& Walsall Ry. Co. v. London & N. W. Ry. Co., L. R. 16 Eq. Cas. 343 ;
Greene v. West Cheshire Ry. Co., L. R. 13 Eq. Cas. 44; P. P. & C. I.
R. R. Co. V. C. I. & B. R. R. Co., 144 N. Y. 152, 39 N. E. 17, 26 L.
R. A. 610.
It must be borne in mind, that the demurrer brings before us only
the case as made by the allégations of the bill. Thèse set out the writ-
ten contract, its paroi modifications, the circumstances attending the
making thereof, the situation of the parties, and the full performance on
both sides of its covenants and stipulations during a period of nearly
50 years. There is no suggestion as to any changed conditions, impos-
ing hardship upon the défendant in the continuance of those contractu-
al relations, or of a situation which would make it intolérable for the
railroad Company to continue the contract. Neither in the notice of
June 2, 1902, expressing the désire and intention of the railroad Com-
pany to terminate the contract, nor in the correspondence between the
parties, which ensued thereafter, was there any reason given by the rail-
road Company for its action in the premises. It simply asserted its
right under the contract to terminate it at will. The averment, that at
différent times, by the consent and acquiescence of both parties, the
scope of the contract was enlarged, and modifications of its terms agreed
to, affords ground for the inference of a renewed and continuing satis-
faction on the part of the défendant with the established contractual re-
lations. It was open to défendant, if it were dissatisfied with the con-
tract, to refuse modification or change therein, and thus possibly hâve
compelled an abandonment of the same by the telegraph company. AU
such matters, however, are at this stage of the case matters of conjec-
ture. We must now décide the equities of the case upon the allégations
of the amended bill.
We do not think that the act of Congress, of July 24, 1866 (14 Stat.
221), has any bearing on the situation in which the complainant finds
itself, but, in view of the opinion hereinbefore expressed, it is unneces-
sary to discuss the contention of complainant in this behalf.
THE StrEPEISB. 873
For thç reasons hereinbefore given, the decree of the Circuit Court is
hereby reversed, and the cause is remanded to that court for further
proceedings in accordance with this opinion.
THE SURPRISSE.
ROBINSON et al. v. WHITCOMB.
(Circuit Court of Appeals, First Circuit. Marct 29, 1904)
No. 495.
1. Mabitime Liens— Supplies— Distinction between Cases Where Sup-
plies WBBE ObDEHED BY OWNER AND WHERE BY MASTEB.
The rule restated that there is a broad différence, in the facts necessary
to create a lien for repairs or supplies furnished to a vessel in a foreign
port, between repairs or supplies ordered by the master, in which case,
thelr necessity belng shown, everything else Is presumed in favor of a
lien; but, when they are ordered by the owner, whether registered
or pro hac vice, while there may be an agreed lien under the modern
American rule, there Is no presumption in it» favor.
2. Same — Supplies Obdeeed by Masteb— Necessity dp Consulting Ov^ner.
Where supplies furnished a vessel In a foreign port on the order of the
master are such as are used In the ordlnary navigation of the vessel.
the necessity for which must hâve been known to the owner, there is not
the same necessity of consulting the owner as where extraordinary ex-
penditures are required.
S. Same— Demised Vessel— Conditions of Ohaetee.
It is immaterlal, to the right to a lien for ordlnary supplies furnished
on the order of the master of a vessel belng navigated by a charterer,
whether or not there is a formai charter party expressly providing that
the charterer shall make ail disbursements and protect the vessel from
liens, since that Is an Implied condition of every such charter.
4. Same— Authoeity of Mastee.
The master of a vessel, although she is belng navigated by a charterer
who is bound to make ail disbursements and to protect the vessel
from liens, has authority, as representing, not only the owner and char-
terer, but also the crew and passengers and cargo, to procure the
necessary wharfage at ports other than the home port, and also such pro-
visions and other supplies as are necessary for Immédiate or every-
day use in the navigation of the vessel. Those furnishing such wharfage
or supplies on the crédit of the vessel are entltled to a lien therefor ;
and It Is immaterial whether or not they knew of the charter or Its con-
ditions, It belng a presumption of law, from considération of the con-
venience and necessities of commerce, that the owners consented that the
ordinary requisites of the voyage should be obtained on the crédit of the
vessel.
Appeal from the District Court of the United States for the Dis-
trict of Massachusetts.
Benjamin Thompson (Alvah L. Stimson, on the brief), for appellants.
Walter Bâtes Farr (M. F. Dickinson, on the brief), for appellee.
Before COLT and PUTNAM, Circuit Judges, and ALDRICH, Dis-
trict Judge.
1[ 1. Maritime liens for supplies and services, see note to The George Du-
mois, 15 C. C. A. 679.
87i 129 FEDERAL EEPORTEB.
PUTNAM, Circàit Judge. This is an appeal agaiilst a decree of tlie
District Court fot-the District of Massachusetts, taken by two joint
libelants of the steamer Surprise, owned and registered at the port of
Boston, in the state of Massachusetts. One libelant, Robinson, allèges
that he was engaged in the gênerai grocery and provision business at
Portland, in the state of Maine, and that, on sundry days, wliich he
names, in August and September, 1902, the Surprise, being then in the
port of Portland, and standing in need of supplies to enable her to con-
tinue the prosecution of her business, he, on the orders of her steward,
furnished her the same, amounting, in the whole, to $732.68. He
further allèges that the supplies were delivered on the crédit of the
steamship ; but he does not aUege that she was without f unds, or that
there was any necessity for pledging her crédit, or that he was entitled
to an admiralty Hen on account of the premises.
The other libelant is a corporation known as "The Proprietors of
Union Wharf." It allèges that it is the owner of Ijnion Wharf, at
Portland; that the wharf is specially arranged for the landing of
passengers and f reight ; and that, between September 1 1 and September
26, 1902, the Surprise, while making regular passages between Port-
land and Boston, was needing the use of a wharf and dockage in order
to land and receive her passengers and freight, and to enable her to
continue the prosecution of her business. It is further alleged that
The Proprietors furnished this wharf âge and dockage "at the spécial
request of the agent of said steamship and upon her crédit," for which
is claimed $73.33. The same defects exist with référence to allégations
of lack of funds, necessity of crédit, and right to a lien. The défense,
however, as to both libelants, seems not to hâve noticed thèse omissions.
Neither does the défense make any claim on account of the use of the
Word "agent," without further defining ; and the case does not come
down to such close issues that we require to dwell on thèse peculiarities.
The Surprise was under charter, and the appellee, who is the claimant
of the steamer and her registered owner, apparently relies on the
theory that The Kate, 164 U. S. 458, 17 Sup. Ct. 135, 41 L. Ed. 512, and
The Valencia, 165 U. S. 264, 17 Sup. Ct. 323, 41 L-. Ed. 710, apply,
although, as we hâve explained heretofore, The Kate and The Valencia
hâve no relation to dealings with a master. We hâve also explained
that, with dealings such as ocdtirred in this case, although not done per-
sonally by the master, being, nçvertheless, under his eye, and relating
to the usual minor incidents of a maritime voyage, the légal effect is
the same as though they had involved his personal acts. In The Kate
there was a continuons current account between the proprietors of a
line of steamers and the furnishers of coal, the bargain having been
made at the principal office of the furnishers, and under such circum-
stances that the case might well hâve been put on the ground that there
never was any expectation of holding the vessel; so that it was, in
substance, like Cuddy v. Clément, decided by us and reported in two
opinions, one passed down on January 16, 1902 (113 Fed. 454, 51 C. C.
A. 288), and one passed down on April 10, 1902 (115 Fed. 301, 53
C. C. A. 94). However this may hâve been, the court in the later case,
The Valencia, is careful to say àt page 265, 164 U. S., page 323, 17 Sup.
Ct., 41 L,. Ed. 710, that none of the coal there in controversy was deliv-
THE SURPEISB. 873
ered by the order of the master, or by hîs procurement, or wîth his
consent. On the other hand, in The Philadelphia, 75 Fed. 684, 686,
21 C. C. A. 501, 503, we said :
"The supplies were dellvered to the steamers libeled, at their respective
wharfs at their ports o£ touch, on their round trips, in small quantlties, as
needed for daily use, in the présence of the masters of the respective steam-
ers, and while they were in control of them, and in the absence of both their
owner and their charterers. Therefore the transactions were in the usual
course of business by which ordinary supplies are commonly furnished to
vessels by the order of the master, and away from the port where the own-
ers réside. It would be intolérable, and entirely contrary to the practice
of the courts, to hold that persons furnishing vessels such supplies in small
quautities, to meet the requlrements of the law for efifectuating a lien, must
prove express orders by the master. It Is prima facie sufficient in such cases
that the supplies are of the character which we hâve described, and corne
aboard under such circumstances that the master can properly be assumed
to acquiesce in their purchase and réception; and thls, without référence
to whether or not the immédiate orders for them came from some person
occupying a subordiuate position.
"The supplies having thus been furnished under such circumstances that
we ought to présume that they were obtained on the express or implied or-
ders of the master, the parties furnishing them were aiso entitled, at the
time the supplies were furnished, to the beneflt of the same presumption ;
and, if the owner of either steamer would rebut the case as thus made, he
must show that the orders came from the charterers themselves, and that
the parties furnishing the supplies knew that they so came, and thus knew
that the course of business was other than that apparent on the face of the
transactions, and other than that which they had a rlght to présume it to
be. The record fails to furnish any proof of this character."
In The Iris, 100 Fed. 104, 106, 107, 40 C. C. A. 301, 303, 304, we said :
"By the maritime law, no lien for supplies or labor furnished a vessel is
presumed to arise on a contract made by the owner, and proof is required
that the minds of the parties to the contract met on a common understanding
that such a lien should be created. Neither is it sufficient that the party
who furnished the labor or supplies gave crédit, so far as his own intentions
were concerned, to the vessel, or would not bave furnished them except on
the belief that he was acquiring a lien for them. In this respect the status
is différent from what it is with référence to liens for labor and supplies
furnished a vessel on the order of her master. This gênerai rule Is stated
in The St. Jago de Cuba, 9 Wheat. 409, 417, 6 L. Ed. 122 ; Thomas v. Osborn,
19 How. 22, 29, 40, 43, 15 L. Ed. 534 ; The Grapeshot, 9 Wall. 129, 136, 137.
19 L. Ed. 651 ; The Kalorama, 10 Wall. 204, 214, 215, 19 L. Ed. 941 ; Tho
Emily B. Souder, 17 Wall. 666, 671, 21 L. Ed. 683 ; and The Stroma, decided
by the Circuit Court of Appeals for the Second Circuit, and reported in 53
Fed. 281, 283, 3 C. C. A. 530. It is expressly stated to the same effect in
The Valencia, 165 U. S. 264, 270, 271, 17 Sup. Ct. 323, 41 L. Ed. 710.
"This distinction bas been emphasized with regard to alleged liens for sup-
plies furnished on the order of the charterers of a vessel, especially where
there was no apparent necessity for pledging her crédit. The Kate, 164 U.
S. 458, 17 Sup. Ct. 135, 41 L. Ed. 512 ; The Valencia, 165 U. S., at page 271,
17 Sup. Ct. 325, 41 L. Ed. 710; and The Samuel Marshal, decided by the
Circuit Court of Appeals for the SIxth Circuit, reported in 54 Fed. 390, 4
G. C. A. 385, and cited in The Valencia, 165 TJ. S., at pages 271, 272, 17 Sup. Ct.
325, 41 L. Ed. 710. In The Philadelphia and The Baltimore, 75 Fed. 684, 21
C. 0. A. 501, decided by the Circuit Court of Appeals for the First Circuit,
■where it was maintained that the facts were similar to those in The Kate
and The Valencia, the question which arose in those cases was laid aside,
fcecause the court found that the supplies were obtained under such circum-
fctances that they were to be held as furnished in a foreign port on the or-
bers of the master, thus bringing the circumstances within The Patapsco,
876 129 FEDERAL REPORTER.
13 Wall. 329, 20 L. Ed. 696, and wlthln the supposed hypothetlcal case stated
In The Kate, 164 U. S., at pages 470, 471, 17 Sup. Ot. 140, 41 L. Ed. 512. In
respect to this entlre subject-matter, there Is a distinction recognized through-
out between supplies on tlie one liand, and seamen's wages and contracts of
afifreigtitment on the otber, as to which liens presumptively arise."
In Cuddy v. Clément, 113 Fed. 454, 461, 462, 51 C. C. A. 288, 295,
296, we said :
' "The rule that an owner of a vessel, Tvho is not aiso the master, may cre-
ate an implled lien on her for supplies, is a modem one, conflned to the
United States, and not a part of the maritime law. This is historically well
known, and It is, aIso, stated by so eminent an authority as Flanders on
Maritime Law, § 241. Mr. Flanders understood this proposition to be sup-
ported by the opinion of Mr. Justice Johnson in The St. Jago de Cuba, 9
Wheat. 409, 416, 6 L. Ed. 122. The fact that the owner may hypothecate a
vesKsel by an implled lien, without bottomry, must be regarded as established
in the United States by The Grapeshot, 9 Wall. 129, 19 L. Ed. 651, The Guy,
9 Wall. 758, 19 L. Ed. 710, and The Kalorama, 10 Wall. 204, 214, 19 L. Ed.
941. The rule has been recognized in other cases, but it origlnated with
those to which we hâve referred. It happens that, as the rule was developed.
no proper distinctions or limitations hâve been given concerning it, except
those explained by the extraets we hâve made from The Iris, and there shown
to hâve been fully sustained by the Suprême Court.
"In the case of supplies and repairs ordered by a master In a foreign port,
their necessity belng shown, everything else is presumed prima facie in favor
of a lien, and the burden is thrown on whomsoever disputes its validity ;
but, with référence to supplies ordered by the owner, it is difflcult to say
what the presumptions are. At one stage of the maritime law, it seems to
hâve been understood that the owner might bottomry a vessel, under eir-
cumstances which would make the bottomry valid although there vvere no
maritime necessity therefor. Flanders on Maritime Law, § 251. If such
were the law, it might foUow that, by a elear understanding, the owner might
in like manner impress the vessel with an implied lien although there were
no maritime necessity therefor. On that hypothesis, there could be no in-
quiry, when repairs or supplies are ordered by the owner, whether a crédit
to the vessel was requisite. The true rule, however, undoubtedly is, with
référence to implled liens created by the owner, as well as to express liens
created by him, in the form of bottomry or respoudentia, that there must be
a maritime necessity. This implies both a need of repairs, or supplies, aud
a reasonable impracticability of obtaining the same on the crédit of the
owner. The law is thus stated in the last édition of Abbott's Law of Mer-
chant Shipping (London, 1892) 165. In The Kalorama, 10 Wall., at page 214,
19 h. Ed. 941, this is also implied by the observation that 'undoubtedly, the
présence of the owner defeats the implied authority of the master ; but the
présence o£ the owner would not destroy such crédit as is necessary to fur-
nish food to the marinera, and save the vessel aud cargo from the périls of
the seas.' "
We thus distinguished fuUy and definitely between cases like The
Kate and The Valencia, where goods are ordered by the owner pro hac
vice, and cases like those at bar, where the orders are by the master,
either in fact or in theory of law. We also enforced the proposition
that the lien for supplies obtained on the order of the owner, whether
registered or pro hac vice, is of modem growth, peculiar to the United
States, and is not supported by presumptions ; while, with référence to
supplies obtained under the circumstances stated in The Philadelphia
and in the case at bar, it appearing that apparently what was obtained
was reasonably needed by the vessel, ail the presumptions are supplied
by the law, and the burden of neg^tiving them rests on the claimant of
the vessel.
THE SURPRISE. 877
In addition to the cases referred to in our prior opinions wîth regard
to the presumptions in favor of merchants who supply vessels on the
orders of the masters, we may well cite The Lulu, lo Wall. 192, 197,
19 L. Ed. 906, where we believe they were first stated by the Suprême
Court as now thoroughly understood. It is there said:
"Contracts for repairs and supplies, under such circumstances, may be
made by the master to enable the vessel to proceed on her voyage, and if the
repairs and supplies were necessary for that purpose, and were made and
furnished to a foreign vessel or to a vessel of the United States in a port
other than a port of the state where the vessel belongs, the prima facie pre-
sumption is tiiat the repairs and supplies were made and furnished on the
crédit of the vessel unless the contrary appears from the évidence in the
case."
We wish, also, before taking up the detailed facts on this appeal, to
lay aside aiiother élément. What were furnished by thèse Hbelants
were hand to mouth necessities, and of such a character that, according
to the course of maritime aflfairs, and according to maritime ordinary
conditions requiring instant action, the law does not always insist that
the owners, either pro bac vice or registered, should be first consulted.
The case in that respect cornes within the observation in the Eliza Lines
(C. C.) 61 Fed. 308, 317, affirmed by the Circuit Court of Appeals, 114
Fc'l. 307, 52 C. C. A. 195, referring to a bottomry bond, as follows:
"ïhere is not a syllable in the record impeaching the transaction, except
it is the testimony of Andreasen that he failed to communicate with his own-
ers in advance. In this case this omission was immaterial. The amount
taken up was moderate, at a fair rate of maritime interest, and covered only
the ordinary port disbursements. The transaction was touching the ordi-
nary course of the management of the vessel, with référence to particulars
which the owners foresaw, and could easily hâve provided for otherwlse, if
they had so desired. The cases familiar in the décisions arose from unfore-
seen disasters, involving large amounts at remote points, where the lenders
of money were few, and could make thelr own terms, and ail under circum-
stances which the owners could not anticipate or provide for. It is this class
which the courts hâve considered when laying down so strietly the rules
requiring prior communication with owners."
In ail the particulars named, this appeal is parallel to The Eliza
Lines, especially with respect to the fact that the transactions were in
the ordinary course of the navigation of the vessel, and to the fact that
they concerned particulars which the owners of the Surprise foresaw
must be provided for. Therefore, we hâve no occasion to comment
upon, or lay down any rules with référence to, circumstances involving
unusual expenditures, and with regard to which there would be ample
opportunity to consult the owners in the ordinary manner. What, in
such event, would be required, in view especially of the fact that the
Surprise was a chartered vessel, is not now relevant.
We should also observe that much has been made of the fact that,
in The Kate and The Valencia, there were formai charter parties which
expressly provided that each charterer should disburse the vessel for
ordinary current expenses, and pro;ect her from ail liens on account
thereof. There seems to be an impression that there was something in
this fact of spécial importance ; and it has apparently appealed to the
légal imagination. It was, however, absolutely immaterial, because, on
every charter of the hull of a vessel, the substantial relations of the par-
878 129 FEDERAL EBPOETER.
ties are the same as those specially provided in The Kate and The
Valencia. The charter is bound to disburse the vessel and protect her
from hens, and impliedly agrées to do so, an agreement as effectuai
in law as an express one. Moreover, so far as concerns knowledge on
the part of a merchant of a charter party or its ternis, or the duty arising
on a merchant to inquire, there is no essential distinction ; because, if
a merchant knows tliat the hull is chartered, though orally and inform-
ally, he knows as a matter of course, and must be held to know, that
the usual obHgations pro and con exist; and he could know no more if
the whole was expressed in a formai instrument. We emphasize this
fact because ail the décisions we will hereafter cite relating to vessels
where the hull was chartered, bear on The Kate and The Valencia, re-
gardless of the fact whether there was a formai charter, or only an oral
one without any express stateraent of the terms thereof.
Coming to the merits of the appeal, it will be found that, for each
libelant, it is disposed of by The Philadelphia, except only so far as a
distinction can be made, if one can be, arising from the fact that in The
Philadelphia it did not appear that the merchant knew, or ought to hâve
known, that there was a charter, while, at bar, the claimant of the
steamer insists that the libelants were expressly inforraed of the charter
and its terms, or were put on notice in référence thereto. The con-
clusion which we reach will concède that additional élément.
The Surprise was engaged in making regular voyages between Boston
and Portiand, her home port being Boston, as we hâve already said.
She was running as an ordinary steam packet, carrying passengers and
freight, and the frequency of her voyages is plain from the fact that,
during the period over which the demands in issue extend, she was at
Portiand on the 25th, 27th, and agth days of August, and the ist, 3d,
5th, 8th, loth, I2th, I5th, I7th, igth, 22d, 24th, and 26th days of Sep-
tember. The claim of The Proprietors of Union Wharf is a small
one, and only a very few dollars for each dockage. The record fails
to bring up to us a convenient statement of the détails of Robinson's
claim. The amounts must hâve been moderate for each particular land-
ing. The record covers, however, three formai réquisitions for sup-
plies, apparently filled out on printed blanks framed for that purpose.
They were signed by the steward of the Surprise, and began as foUows :
"Please deliver to S. S. Surprise the following articles, and send bill for
the same to us."
The "us" is not responded to except as appears from the signature to
which we hâve already referred, namely: "E. Thompson, Steward."
The réquisitions cover fresh méats, fresh vegetables, fîsh, clams, butter,
brooms, tacks, tomato ketchup, soap, olive oil, sulphuric acid, toilet
paper, coarse sait, articles as necessary at local points for steamships en-
gaged in the business in which the Surprise was engaged, and as imme-
diately consumable, as would be daily supplies of water, hay and grain
for a horse during a long drive. They are ail in the class, and fur-
nished under such circumstances, as to which the law necessarily favors
presumptions of a just crédit to the vessel, so far as possible for such
presumptions to exist.
It is claimed that Robinson did not intend to crédit the Surprise, but
that he relied solely on one or more of the charterers. The claimant
THE SURPRISE. 879
offered some évidence to that end. This proposition, however, is net
sustained. The réquisitions wliich were the foundation of the transac-
tions contained no direction to ctiarge the supplies to any individual,
but only an order for delivery to the "S. S. Surprise." They effectual-
ly laid the basis for crédit to the steamer. The matter is made positive,
because, when Mr. Robinson testified, he produced his original book
of entries, that is, his order book, and stated, with the book before him,
that the original charges were to the steamer.
The steward testified to some preliminary conversations with Rob-
inson, but not to enough to establish any formai or fixed contract for
supplies during the season, or a portion of it, or even any informai ar-
rangement for the account current. The conversations left the parties
without any obligations on one side or the other ; so that, aside f rom an
expression on the one part, not binding, of a disposition to purchase of
Robinson, and, also, an expression on the other part, not binding, of
a willingness to give crédit if the steamer needed it, the subséquent pur-
chases were taken up as for supplies from hand to mouth in an inter-
mediate port in the same way as in The Philadelphia, 75 Fed. 684, 21
C. C. A. 501, already cited. Therefore, we hâve an ordinary case of
minor supplies furnished to a vessel in a foreign port, of the class of
which she had immédiate need, and a large part of which she could
not take up conveniently except at the place where needed ; a case with
circumstances under which, prior to The Kate and The Valencia, no
admiralty court ever refused a lien, unless the owners showed that there
was no necessity for crédit to the vessel, and that the merchant knew
that fact, or had very good reason to know it, or was in some way
clearly put on inquiry. Moreover, according to the universal practice
of the admiralty courts prior to the décisions referred to, such liens
hâve uniformly been sustained, at least since Thomas v. Osborn, 19
How. 22, 15 L. Ed. 534, decided at the December term, 1856, without
regard to any question whether the vessel was navigated by her regis-
tered owner or by charterers.
Referring again to the claim of The Proprietors of Union Wharf,
nothing could be more contrary to the spirit of the maritime law, the
great purpose of which is to enable vessels to plow the sea and perform
their voyages, than the suggestion that a steamship, arriving from an
Atlantic voyage, long or short, with passengers and freight, or either,
should lie in the stream pending investigation by the owners of a dock
or wharf as to the terms of her charter party, or pending communica-
tions with her charterers or owners at a port more or less distant. Ac-
cording to the gênerai mercantile practice, wharfage, pilotage, wages
to crew, the cost of discharging, and other necessary minor inward
expenses, are furnished or disbursed without hésitation, relying in part,
of course, on their being made good from the inward freight when col-
lected. If not so made good from the inward freight, they retain
their liens, being presumed to hâve been furnished on the crédit of the
vessel as well as on the reliance of payment from freight. The same
presumption applies with regard to prompt fresh provisioning on ar-
rivai, which was included in what was sold by Robinson. Except in
the case of shipowners of wealth, who maintain bankers' accounts at
important points throughout the worlcl, the usual course is to thus dis-
880 129 FEDEKAL REPORTEE.
burse and supply the immédiate wants of a ship on arrivai, relying
partly on the inward freight, but always on the crédit of the vessel.
For us to sustain the conclusion of the District Court in this case would
be to reverse the continuous course of the admiralty courts, recogniz-
ing this universal commercial practice, and based on it.
The position of the owner of the Surprise on this appeal overlooks
two crucial propositions : First, it is in line with the conf used thought
which exists to a considérable extent, that the maritime law runs parallel
with the rules of the common law as to the relations of master and serv-
ant. The maritime law is not based on the common law, and, while at
certain points it touches it, at other points it does not. It is unsafe
to reason to it from the common law. Second, it overlooks the fact
that the master of a ship représenta, not only her owners, but also her
passengers, cargo and crew; so that, whatever stipulations may be
made between owners and charterers, the ordinary maritime necessities
for which the master must provide as the common agent, overrule them.
This fact is everywhere recognized with regard to sailors' wages ; and
it would also be conceded with référence to repairs to a ship laden with
cargo or passengers, or both, in marine distress in a distant port of
refuge, which, as representing ail interests, the master is bound to ob-
tain, even to the extent of a bottomry of the vessel. It will be conceded
that no form of stipulation on the part of the owner of a vessel who
permits her to take the seas, could prevent a lien, either in behaif of
the crew, or in behaif of merchants furnishing necessary repairs, or
funds therefor, under those circumstances. Inward pilotage, wharfage,
dockage and stevedoring, ail fall into the same line, because they con-
cern, not merely the vessel, but the crew, passengers and cargo ; ail of
which the master must protect, notwithstanding spécial stipulations
with charterers, whenever the owner has permitted his ship to make voy-
ages. If, in thèse respects, there is any violation of any agreement, ex-
press or implied, between owners and charterers, the owners must pro-
tect themselves, as was donc in the case at bar, by taking an obligation
with a surety, or by terminating the charter for a breach of the terms
thereof.
Also, bills of lading for merchandise for cargo to be transported,
or cargo received aboard without bills of lading, necessarily raise a
lien under ail circumstances. The same may be said as to fresh pro-
visions on arrivai, which are generally absolutely necessary for the
health of the crew. Thus, sometimes, the maritime law raises a neces-
sary presumption in favor of the right to pledge the crédit of the vessel,
while she is being navigated with the consent of the registered owner ;
while the conditions with regard to supplies of the classes furnished
by Robinson, when obtained by the authority of the master, express or
implied, under the circumstances of this case, are commonly so pressing
that they overcome the merely ordinary stipulations on the part of the
charterer that he will not burden the vessel with liens.
Thèse propositions are not only based on fundamental rules of mari-
time law, which regard above everything else the necessity of keeping
a ship active and useful, but they hâve always been recognized in the
United States by those learned in, that direction. The reasons therefor
are numerous, and sometimes one is stated and sometimes another.
THE SURPRISE. 881
Judge Asher Ware, who has always been held as most leamed in ad-
miralty and maritime rules, in The Phebe, i Ware, 263, 267, Fed. Cas.
No. 11,064, observing upon the proposition of the claimant of a vessel
that a shipper had no lien on her because she had been let under the
paroi agreement well known on our northeastern coast, under which
it is held that the vessel goes ont of the employment of the owner into
the control of the master, said:
"But the argument Is founded on a mlsconception of the true princîples of
the law. Thls rule by which the vessel Is bound in specie for the acts of the
master Is not derived from the civil law [meaning thereby the civil law as
practiced In the common law courts], but has Its origin in the maritime us-
ages of the Middle Ages; and it Is to thèse usages that we must look to as-
certain its true character."
Again, on page 268, i Ware, Fed. Cas. No. 11,064 he said:
"But, by the maritime usages and customs of the Middle Ages, which, hav-
ing been generaliy adopted by merchants, silently acquired the force of a
gênerai law, the master, who was ordinarily a part owner, was not consld-
ered as properly the agent or mandatary of the other part owners, but rather
as the administrator of the property, that Is, of the vessel which was en-
trusted to his care and management."
Again, he said, at page 269, i Ware, Fed. Cas. No. 11,064:
"Thus, ail the contracts of the master with the marlners for their wages,
with materlalmen for repairs and supplies of rigging, or for provisions, or
other necessaries for the vessel, Involved a tacit hypothecatiou of the ship
and freight. But he was not authorized in his character as master, and as
representing his co-owners, to bind them beyond the value of their share in
the ship and freight. * * * if the vessel was lost before the creditors
were paid, they had no remedy except against the master."
In this same Une, in The China, 7 Wall. 53, 68, 19 h. Ed. 67, where it
was held that the vessel may be liable in case of collision, although in
charge of a pilot which she was compelled to take, while it was subse-
quently established in Homer Ramsdell Company v. La Campagnie
Générale, 182 U. S. 406, 21 Sup. Ct. 831, 45 L. Ed. 1171, that the
owners are not liable at the common law, thèse observations of Judge
Ware were repeated. Commenting on The China, the opinion in be-
half of the court in Ralli y, Troup, 157 U. S. 386, 403, 404, 15 Sup, Ct.
657, 663, 664, 39 L. Ed. 742, says that that décision proceeded on the
distinct practice of the maritime law, that a vessel, in whosesoever hands
she is, is considered as the wrongdoer, liable for her torts, and subject
to maritime liens for the damages arising therefrom. Judge Ware's
propositions were again repeated in Homer Ramsdell Company v. La
Campagnie Générale, 182 U. S., at page 413, 21 Sup. Ct. 834, 45 L. Ed.
1171. Further, in Thomas v. Osborn, 19 How. 22, 15 L. Ed. 534.
where the question arose as to hypothecation for repairs and supplies
by one who was both master of the vessel and charterer, having taken
her on shares in accordance with the usages of our northeastern coast
to which we bave referred, the terms of the lease were described at page
26, 19 How., 15 L. Ed. 534, to the effect that the master had the entire
possession and navigation of the vessel, and that he was to victual and
man her at his own expense, although the owners were to keep her in
repair. The libel in that case related, not only to repairs, but to pro-
visions, without distinguishing one from the other ; and the opinion of
129 F.— 56
882 129 FEDERAIi REPORTER.
Mr. Justice Curtis, in behalf of the majority of the court, makes no dis-
tinction in référence thereto. At page 30, 19 How., 15 L. Ed. 534,
it refers to a case in which the Suprême Court held that the master may
bind the vessel to the cargo, wholly irrespective of the ownership of
the vessel ; and it continues :
"And so, In this case, we think the gênerai owners must be taken to hâve
consented that, If a case of necesslty should arise In the course of any voy-
ages which the master was earrying on for the joint benefit of themselves
and himself, he might obtain, on the crédit of the vessel, such supplies and
repairs as should be needful to enable him to continue the joint adventure.
This presumption of consent by the gênerai ovvner is entertained by the law
from the actual circumstances of the case, and from considérations of the
convenience and necessities of the commercial world."
There was a dissent in Thomas v. Osborn ; but nothing therein con-
travenes what was thus said. It must be admitted that what we hâve
cited from that opinion was mère dictum, as the case turned; but it
stated the views of Mr. Justice Curtis, who is conceded to hâve had a
thorough knowledge of the principles of admiralty, and of the maritime
law. So, in 1842, in The Monsoon, i Spr. 37, Fed. Cas. No. 9,716,
the entire subject-matter now before us, in the best view which can be
taken for the owner of the Surprise, was ruled against him, Judge
Sprague holding that the person who furnishes provisions to a vessel,
not in the home port, may hâve a lien therefor, although he knew that
the master has taken her on shares and is to victual and man her. We
must bear in mind what we hâve already said, that the taking of vessels
on shares according to the custom of the northeastern coast opérâtes as
a charter, and créâtes what is known as an ownership pro hac vice ;
and we repeat that there is no distinction between an oral charter, where
the duty of provisioning the vessel arises by implication and the force
of law, and a formai charter, where the same duty is expressly stated.
At page 38, I Spr., Fed. Cas. No. 9,716, Judge Sprague said :
"In order to see whether a lien was created in this case, we must look to
the gênerai authority of the master, and the reasous oii which it is founded.
He has power to hypothecate the vessel in other than the home port for nec-
essary supplies, or to ereate a lien upon her therefor ; and this power is given
in order that he may pursue the voyage. It is deemed for the benefit of the
owners that such a right should exist, that the certainty of holding the ship
therefor, without the uecessity of inquiring into the state of the tltle, or the
ability of the owners, should give the greatest facility for obtaining thèse
necessaries."
Then followed this observation:
"I am not aware of any case in which the state of the title has In any de-
gree affected this right, and I think it would impair the usefulness of the
rule to introduce any such modification of it. * • * i should fear that
owners themselves would be the sufTerers from any diminution of the cer-
tainty of this security."
Of course, in ail this, Judge Sprague had référence to supplies ob-
tained under such circumstances that they were expressly or impliedly
ordered by the master in the manner we hâve already explained; be-
cause that was the case before him, and, at that time, the subject-matter
of maritime liens given by an owner who was not acting as master was
not a famihar one to the admitalty lawyers, as we hâve shown in Cud-
Jy v. Clément, 113 Fed. 454, 462, 51 C. C. A. 288, according to the ex-
HOSMER V. WTOMING ET. & IRON CO. 883
tract we hâve already made from that case. The Grapeshot, 9 Wall.
129, 19 L,. Ed. 651, was not decided until more than 30 years after The
Monsoon.
So, in Flaherty v. Doane, l Low. 148, 150, Fed. Cas. No. 4,849,
the rule of The Monsoon was restated without question. This was in
1867, and by Judge John Lowell, whose familiarity with the whole field
of the maritime law cannot be questioned. The case related to sea-
men's wages, which are peculiar, so that the rule of The Monsoon was
not in question, and what Judge Lowell said in référence thereto may
be regarded as a dictum. Nevertheless, it was an unqualified expression
of a recognized authority.
The resuit is a restatement of several well-known rules of the mari-
time law. First, the vessel, for ordinary maritime purposes, has an in-
dividuality which is separate from, and superior to, ail questions of
ownership or title. Second, it is for the interest of ail concerned in the
vessel, whether registered owners or owners pro hac vice, that the crédit
given according to the maritime law be governed by simple rules, re-
garding only the leading circumstances, without the necessity of investi-
gating problematical détails of ownership or titles. Third, notwith-
standing the détails of a charter party, presumption of consent by the
registered owners that the ordinary necessities and conveniences of a
voyage should be obtained on the crédit of the vessel, subject only to the
usual limitations, is entertained by the law, not only from the actual
circumstances of particular cases, but, also, as said in Thomas v. Osborn,
"from considération of the convenience and necessities of the commer-
cial world." Fourth, the master represents not only the vessel, but the
crew, passengers, and cargo, and, therefore, is conclusively authorized
to bind the vessel in behalf of the entire enterprise, within, at least, the
reasonable limits to which this case relates. In conclusion, we repeat
that The Kate and The Valencia hâve only a narrow application, and
that the libelants are clearly outside the same.
We may add, although, perhaps, unnecessary so to do, that since Ex
parte Easton, 95 U. S. 68, 24 L. Ed. 373, there has been no question
that claims like that of The Proprietors of Union Wharf are of a mari-
time nature, and may be protected by maritime liens.
The decree of the District Court is reversed ; and the case is remand-
ed to that court, with directions to enter a decree for each of the libel-
ants for the amount claimed by him or it, with interest, and the costs of
that court, and also for the costs of appeal.
HOSMER et al. v. WÏOMING RT. & IRON CO. et al.
(Circuit Court o£ Appeals, Eighth Circuit April 28, 1904.)
No. 1,873.
AppEAiy— Gkotjnds foe Reveesal— Mtjltifaeiousness of Bir,!..
An appellate court of tlie United States will rarely reverse a decree
in equity on the sole ground that the bill was multlfarious, and it will
not do so where the causes of action jolned are not répugnant or incon-
Bistent with each other, and where the only loss or inconvenience to a
SS4 120 FEDEEAL REPORTER.
défendant from such joinder arises from his having been subjected to the
payment of costs with which he Is not justly chargeable, which can be
remedled by a modification of the decree.
2. Vendob and Pubchaseb— Payment of Pubchase Money— Time as of the
Essence of the Contbact.
A court of equity will not hold time to be of the essence of a contract
for the absolute sale of mlning property, so as to cause the forfeiture of
the rights of the vendee thereunder because of his failure to make pay-
ment promptly, In the absence of an express stipulation to that effeet,
and where It appears from récitals in the contract in œaking statement
of the considération that the greater part of the original purchase pi'ice
of the property had been paid by the vendee under prior eontracts be-
tween the parties for which the later one was substituted.
3. Specific Performance— Coxthact for Sale of Realty— Necessity of
Tender.
When a contract évidences an actual sale and purchase of real prope
erty, and time is not an essentlal élément therein, and the parties hâve
substantially progressed with performance, the rule requiring a tender
of payment by the purchaser before institution of suit for spécifie per-
formance is not of imperative application, and a bill for that purpose will
not be dismissed for failure to make such tender, where it appears that
complainant bas a substantlal Interest in the property, and a dlsmlssal
would work loss and inconvenience to both parties ; but where the
costs of the suit might hâve been avoided, had the tender been made, they
will be taxed to complainant, although the suit is contested.
Appeal from the Circuit Court of the United States for the District
of Wyoming.
This was a suit brought by the Wyoming PLailway & Iron Company against
Edward S. Hosnier, Addison A. Ilosmer, Amanda S. Hosmer, David S. Wegg,
and the Colorado Fuel & Iron Company, to enforce spécifie performance of
a contract for the sale of certain minlng claims and real property appurte-
nant thereto in Laramie county, Wyo. The contract soiight to be enforced
was entered into by défendants Edward S. Hosmer and David S. Wegg on
September 7, 1898, and was supplemented and qualified by certain agreements
of extension. The Wyoming Company, the complainant, was the successor
in interest of Wegg. Amanda S. Hosnier succeeded to the interest of Edward
S. Hosmer, her son. Addison A. Hosmer, after flling a disclaimer, departed
this life. The Colorado Company was the lessee of the Wyoming Company,
and was engaged in miuing and removing iron ore from the property in con-
troversy. Wegg flled a eross-bill against the Hosmers, which was substan-
tially in aid of the relief sought by the complainant. The Hosmers, excepting
Addison A., claimed In their answers a forfeiture of the contract and of
ail rights of the purchaser thereunder. The property Involved in the suit
comprised what was generally known as the "Sunrise Group" of patented
mining claims, includiiig in such désignation the appurtenant mill sites.
The transactions leading up to the contract last mentiôned will be briefly
noticed. Some time in 1891 William Sturgis, Jr., who was then the légal
owner of part and the équitable owner of the remainder of the "Sunrise
Group," contracted to sell the property to one Charles A. Guernsey, repre-
senting himself, Wegg, and one Kennan, for the sum of $120,000. Afterwards,
in June of that year, Edward S. Hosmer came into the transaction, and
agreed to furnish the entire amount necessary to acquire the property from
Sturgis, the same to be held for the benelit of himself, Wegg, and the latter's
associâtes, Guernsey and Kennan, each to hâve a one-fourth interest, sub-
ject, however, to the payment to Hosmer of the moneys expended by him lu
the purchase of the property, with certain additions by way of interest and
a bonus in case of resale by them. The title was to be taken in the name
of Hosmer as his security for the moneys advanced. The agreement between
the four parties, dated June 9, 1891, provided that Wegg and his associâtes
If 3. See Spécifie Performance, vol. 44, Cent. Dig. § 286.
HOSMEB V. WTOMING ET. <fe IRON CO. 885
should hâve the right to sell the property, and that Hosmer should deed to
their vendee upon the paymerit to him of the moneys advanced and Interest.
and the bonus in addition thereto. It was also stipulated that, If the prop-
erty was not sold withln a llmited period, It should, at Hosmer's option, be
conveyed to a corporation to be formed, Hosmer to recelve one-fourth of the
capital stock, and Wegg and his associâtes to recelve three-fourths thereof,
in considération of the conveyance by them of certain other mlnlng clalms
and property In the vicinity of the "Sunrise Group." When Hosmer came
into the transaction new papers were drawn between him and Sturgis. Stur-
gis executed a deed conveying to him the "Sunrise Group," and placed It in
escrow. Sturgis and Hosmer executed an escrow agreement, so called, which
specified the tlmes of maturity of the deferred installments of the $120,000
purchase priée. The agreement contalned explicit and stringent provisions
making time of payment by Hosmer of the essence of the contract, and pro-
viding that upon default in the payment of any iustallment on the due day
thereof ail prevlous payments should be forfeited to Sturgis as liquidated
damages, and that he might Immediately résume possession of the property.
About three months later, the property not havlng been resold by them, sev-
eral contracts were drawn up and signed by Hosmer and Wegg and hls asso-
ciâtes, looklng to the formation of the corporation and the conveyance to It
of the "Sunrise Group" and the other properties. Thèse contracts, however,
were subsequently canceled and abandoned. It was contended on the part
of Hosmer that the abandonment was caused by certain mlsrepresentatlons
of Wegg and his associâtes concernlng the title to the properties which on
their part they were to convey to the corporation. It was contended by Wegg
that the cause was the financlal embarrassment of Hosmer, which rendered
him unable to complète the payments to Sturgis. Wherein lies the truth
among their contentions is Immaterial. They are referred to merely as
marking a stage in the progress of the transactions between the parties.
Whatever the cause, Hosmer concluded to accept repayment of the moneys
thus advanced by him and drop out of the enterprise. On March 24, 1802,
Hosmer, Wegg, and Guernsey entered into a new contract, Kennan retiring,
which reclted the contract between Hosmer and Sturgis, that the considéra-
tion to be paid Sturgis was §120,000, that at that time Hosmer had paid
thereon $42,000 of principal and S012.92 of interest, and that Wegg and his
associâtes had paid thereon $3,000. It was agreed that Wegg and Guernsey
were withln five years from that time to pay to Hosmer $44,287.92 (the In-
creased amount being due to certain other small dlsbursements), with inter-
est at 5 per cent, per annum, and were also to assume and pay to Sturgis
the remaining $75,000 and Interest necessary to secure the Sturgis deeds,
which were stlll held in escrow. Hosmer on his part agreed to use hls best
endeavors to secure for Wegg and Guernsey an extension from Sturgis of
time for paying the remaining installments of purchase priée, and he also
agreed to exécute to them a warranty deed for the property when they had
paid to him the amount above mentioned, and had also paid the balance due
Sturgis and the taxes upon the property. This is one of the important con-
tracts bearing on the controversy between the parties, and It Is one of those
reclted in the contract of September 7, 1898, the spécifie performance of
which was sought to be enforced. It will be noticed that thIs new arrange-
ment contemplated no change in the contract with Sturgis, that the right
of purchase from him was left in the name of Hosmer, that payments of the
balance due Sturgis would therefore be made In the name of Hosmer, and
the deeds which were held in escrow would come to the latter upon final
payment by Wegg and Guernsey. When thls agreement with Hosmer was
reached, Wegg and Guernsey contracted with the Wyomlng Company, the
complainant, a corporation organized and ■ controlled by them, to convey to
it the "Sunrise Group" in considération of a certain amount of Its capital
stock. Guernsey subsequently surrendered to Wegg hls rights under the con-
tract of March 24, 1892, and Wegg completed the payment to Sturgis of the
remaining installments of the purchase prlce, amounting, with interest, to
$81,377.80. From time to time prior to September, 1898, he also made pay-
ments to Hosmer aggregating $9,857.61, but did not thereby reduce the prin-
cipal of Hosmer's clalm, nor pay ail of the Interest thereon.
886 129 FBDEÎRAIi EBPOETBR.
On September 7, 1898, Hosmer and Wegg entered Into the contract sought
to be speclflcally enforced by complainant's bill and the cross-bill o£ Wegg.
Thls contract recites that on June 15, 1891, Hosmer contracted with Sturgis
for the purchase of the "Sunrise Group," and made certain payments upon
the purchase prlce; that on March 24, 1892, Hosmer entered into a contract
with Wegg and Guernsey whereby the latter agreed to pay' to Sturgis the
balance o£ the purchase prlce, and fnrther agreed to pay to Hosmer on or
before March 24, 1897, the sum of $44,287.92, with Interest; that Hosmer
agreed, in considération thereof, to convey the property to Wegg and Guern-
sey ; that Sturgis had been paid in full, and that deeds vesting title in Hos-
mer were in the possession of a certain bank ; that Wegg had acquired the
Interest of Guernsey ; that Wegg had not paid to Hosmer any part of the
principal sum due him, nor had he paid ail of the accrued interest ; that
there was due to Hosmer an additional $5,000 on account of the purchase
for Wegg and his associâtes of another clalm not included in the "Sunrise
Group" ; that Wegg was désirons of acquiring the "Sunrise Group." Follow-
ing thèse preliminary récitals is thls expression of the considération for the
contractual clauses of the Instrument: "Now, therefore, in considération of
the premises and of one dollar In hand paid by each of the parties hereto
to the other party hereto, respectively, the recelpt whereof is hereby mutually
acknowledged, and in further considération of the covenants hereln contalned
and for other valuable considérations, It is agreed as follows." By this con-
tract Wegg bound himself to pay to Hosmer $60,000, with Interest, In certain
installments, the last thereof maturing March 24, 1900, and aiso to pay ail
of the taxes upon the property. Hosmer agreed to convey the property to
Wegg by full and sufficient warranty deed. It was stlpulated that the con-
tracts of September 9, 1891, and March 24, 1892, were canceled, and the par-
ties mutually released from ail obligations arlsing by reason thereof ; also
that If, on March 24, 1900, Wegg was unable to pay the balance of the prin-
cipal sum due to Hosmer, then notes were to be given secured by mortgage
upon the "Sunrise Group" and other properties. Wegg agreed to hâve the
Sturgis deeds recorded, thus vesting complète title of record in Hosmer. ïhe
$60,000 to be paid by Wegg to Hosmer was made up of the principal amount
specified In the contract of March 24, 1892, the $5,000 advanced by Hosmer
in the purchase of the other mining claim and interest, and other disburse-
ments by Hosmer for traveling and living expenses In connection with the
"Sunrise Group." There was no provision in this contract of September 7,
1898, making time of payment by Wegg of the essence of his rights thereun-
der. On May 23, 1899, Hosmer and Wegg entered Into another contract,
which contemplated the conveyance of the property to the latter, so that he
could use it as security for a séries of mortgage bonds aggregating $250,000,
of which Hosmer was to take an amount sufficient at 80 cents on the dollar
(in the language of the contract) "to satisfy the clalm he now bas against
said Wegg." Hosmer agreed to attempt to float the balance of the bonds,
and to accept as his commission, If successful, 20 per cent, of the capital
stock of the Wyoming Company. Afterwards, for reasons satisfactory to
both parties, this contract was abandoned, and Wegg paid to Hosmer $7,500
as compensation for his services. On March 22, 1900, Hosmer agreed in
writing that the contract of September 7, 1898, which would mature two
days thereafter, should be extended to September 24, 1900, with provision
for the payment of some intermediate installments. A further extension to
November 24, 1900, was granted by Hosmer upon condition that by so doing
there should be no other change or modification of the rights and obligations
of the parties. As this last-mentioned day approached 'Wegg endeavored to
secure a further extension of time for payment and the division of the bal-
ance due Hosmer into monthly Installments. Hosmer resided In New ïork ;
Wegg In Chicago. On Oetober 17, 1900, Hosmer wrote Wegg that he could
not décide deflnitely upon any plan of settlement diflfering from that of the
contract In force until some time in November, when he would be glad to
take the matter up. He also wrote: "You may rest assured that I will do
everything I can to arrange the matter in some way to your satisfaction, if
you find yourself unable to carry out the terms of your agreemeut." On Oe-
tober 26, 1900, Wegg wrote requesting favorable action upon his proposition
HOSMEE V. WTOMING ET. & lEON OO. 887
of modification, and Hosmer replied on the Ist of November that he was
bnsily engagea in otiier matters, and when at Ilberty would, If Wegg would
corne to New York, talk the situation over with him and see what could
be done. On the 15th of November Hosmer wrote that he had completed hls
other labors and would see Wegg any time that he came. On the 23d Wegg
Wired that on account of the illness of hls wife he was unable to go East
at that time, and making another proposition to pay the amount due to
Hosmer in monthly payments. On the 24th of November, 1900, the final day
of the last extended period, Hosmer wired Wegg that he could not accept
the terms suggested and notifled him that he (Hosmer) would stand on his
légal rights. On the same day Wegg wired in reply that he was ready to
pay Hosmer the amount due him, but that he should stand on his légal
rights and insist upon delivery of perfect abstract of title with warranty
deed, and that until Hosmer was ready to deliver the same he would hold
him responsible for costs and damages. The demand for the delivery of ab-
stract of title with warranty deed was unjustifiable, as Wegg well knew.
He had several times agreed to hâve the original deed to Sturgis and the
Sturgis deed to Hosmer recorded, and had defaulted in his promise and dutj'.
On the 24th of November, 1900, Hosmer wrote to Wegg confirming his tele-
gram of the same day, but indicated that his purpose was not to make a modi-
fication of their contract relations excepting upon personal conférence. When
Wegg received this letter, he wired Hosmer on the 27th that he misunder-
stood the latter's telegram, and on the same day he wrote him renewing his
proposition of modification. To this Hosmer replied that, as the money had
not been paid on the 24th of November, he had sold the property to a party
in New York. The sale referred to was to his mother, who took with notice
of v?hatever rights or equities were possessed by Wegg. The deed to Mrs.
Hosmer was executed on the 28th of November, 1900. On the lOth day of
the following month Wegg deeded the property to the Wyoming (Dompany.
On the 24th of November, 1900, Wegg had perfected arrangements enabling
him to secure the money to pay the entlre amount due to Hosmer, but, in-
stead of utilizing his ability in that respect, he endeavored to secure from
Hosmer another extension and modification of terms. TJnder the contract
of September 7, 1898, and its extensions, Wegg paid Hosmer $15,600. Ail
of the payments made to Sturgis and Hosmer upon the property amounted
in the aggregate to $109,835.41. The amount due Hosmer, principal and in-
terest, when the suit was instituted, was $53,205.40. At this time the com-
plainant or Wegg had received in royalties upon ore taken from the "Sun-
rise Group" the sum of $23,365.59. The bill of complaint was flled Decem-
ber 12, 1900. No tender of the amount due Hosmer vi'as made by either the
complainant or Wegg prior to the institution of the suit. The bill, and an
amended bill afterwards flled, contained a gênerai ofEer to pay and deliver
to défendants, or to such of them as might be entitled thereto, and upon such
terms and at such times as might be found by the court to be just and right,
any and ail stocks, moneys, and other property found to be due to them.
Wegg by his cross-bill made substantially the same ofCer In connection with
a prayer for an accounting.
On November 5, 1898, the Wyoming Company executed a mining lease of
the property in controversy to the Colorado Fuel & Iron Company ; the latter
contracting thereby to pay certain royalties upon the ore removed. It was
alleged in the amended bill of complaint of the Wyoming Company that it
had the right to cause the application of the royalties accruing under the
lease to the payment of any sum that might be found to be due to Hosmer ;
that the Hosmers were seeklng to prevent the payment of royalties, and that
the lessee was threatening to discontinue Its payments ; that the complain-
ant conseuted, and prayed that the Colorado Company be required to pay
into court such royalties as might accrue under the lease, and that the court
make such disposition thereof as was just and right. Mrs. Hosmer demurred
to the amended bill upon the ground, among others, that it was multifarious,
because of the joinder of a suit to enforce the contract of September 7, 1898,
with an action against the Colorado Company upon the lease. The demurrer
was overruled. Upon motion of complainant the Circuit Court ordered the
Colorado Company to pay into court the royalties accruing under the lease.
888 129 FBDEBAL KBPOETEK.
The Company did so. Subsequently it was decreed that the elerk pay the
money so deposited to the complainant, and the costs of the suit, Including
the 2 per centum upon the amount o( royalties pald to complainant out of
the reglstry of the court, were taxed to the Hosmers. The final deeree award-
ed spécifie performance upon payment into court by complainant of the
amount found due to Hosmer, from which was to be déducted the costs. The
Hosmers appealed.
Brainard Toiles and J. F. Vaile (Wolcott, Vaile & Waterman, on
the brief), for appellants.
John W. Lacey, for appellee Wyoming Railway & Iron Company.
Timothy F. Burke, for appellee David S. Wegg.
Before SANBORN, VAN DEVANTER, and HOOK, Circuit
Judges.
HOOK, Circuit Judge, after stating the case as above, delivered the
opinion of the court.
Did the Circuit Court commit réversible errer in overruling the de-
murrer to the amended bill of complaint, which was alleged to be mul-
tifarious? Was time of the essence of the contract sought to be en-
forced ? Was the failure of complainant and its predecessor in interest
to tender the amount due under the contract fatal to the maintenance of
the suit? Thèse are the questions presented on this appeal.
The doctrine of multifariousness in equity pleading rests largely upon
considérations of inconvenience and expense. Its limitations are net
sharply defined, and it would be both difficult and unwise to formulate
a rule for unvarying application. It often becomes a nice question
whether the convenience of a complainant, and his interest that a mul-
tiplicity of suits be avoided, which is also of public concern, outweigh
the inconvenience of the défendants arising from the joinder of two
or more causes of action in a Single suit, and whether the relation be-
tween the causes of action is sufficiently apparent to présent a common
point of controversy. United States v. Bell Téléphone Co., 128 U. S.
352, 9 Sup. Ct. 90, 32 L,. Ed. 450; Brown v. Guarantee Co., 128 U. S.
403, 410, 9 Sup. Ct. 127, 32 L,. Ed. 468 ; Barney v. Latham, 103 U. S. 205,
215, 26 E. Ed. 514; Oliver v. Piatt, 3 How. 333, 411, 11 E. Ed. 622 ;
Gaines v. Chew, 2 How. 619, 641, 11 L. Ed. 402. But it has rarely, if
ever, happened that a deeree has been reversed in an appellate court of
the United States upon the sole ground that the bill was multifarious.
An appellate court should hesitate in awarding a reversai, if the evil re-
sulting to an objecting party from a pleading of that character may be
properly and effectively cured. In the absence of a union of causes of
action or défenses which are répugnant and inconsistent with each oth-
er, the substantial evil is generâlly one of costs accruing in respect of a
matter in which an appellant has no concern. In the appeal before us
it is contended that the complainant used the suit to enforce the pay-
ment of rents into court by an unresisting défendant, that the demand
was not of an équitable nature, that the contract reserving the rents
was solely between complainant and its lessee, that the appellants were
not parties tb the instrument and asserted no claim thereunder, that
the trial court ordered the moneys so turned into court by the lessee
to be paid to complainant and taxed against the appellants ail of the
HOSMEB V. WTOMING ET. & IRON CO.
costs including those connectée! with that feature of the case. Assum-
ing, without determining, that the claim of multifariousness is well
founded, it is clear that with the Hfting of the burden of the costs ail
substantial cause for complaint would disappear, and that in the action
of the Circuit Court there would be nothing of préjudice to the appel-
ants.
The gênerai rule applied in courts of equity is that time is not ordi-
narily of the essence of a contract for the sale of real property, and
that it will not be so regarded uniess it affirmatively appears that the
parties so intended it. Such intent may be indicated by express stipu-
lation to that effect, or it may be gathered by clear implication f rom the
character of the contract itself, or from the nature of the property
which is the subject of the contract, or the avowed purposes of the par-
. ties with référence thereto. Thus a strict and prompt performance of
optional contracts by the party to whom the privilège of purchase is
given is regarded as essential to the maintenance of his rights there-
under. The same rule has been applied to contracts for the sale of prop-
erty of a spéculative character, or which is subject to sudden or fré-
quent fluctuations in value or condition. The principle underlying this
rule is manifest. It is designed to prevent a defaulting party from
utilizing his own default in a hazard or spéculation to the disadvantage
of another. But the mère fact that the property is of the character
mentioned does not give rise to a necessary or inévitable inference that
time of performance is a vital and essential feature of the contract.
Other facts and other circumstances may so condition the relation of the
parties as to clearly impel a contrary conclusion. Notwithstanding the
character of the property, it may appear from their course of dealing
that the contracting parties did not regard time as of the essence. It
may also appear that the transaction has progressed to such a. stage
that the vendee has an equity in the property equal or superior lo that
of his vendor, and that the latter's title or possession should be regard-
ed in the light of a security '^or the balance of the purchase price, or that
the vendee has such an interest that it would be unconscionable to per-
mit of its forfeiture. When by the omission of affirmative stipulation
the question is at large, and is one for the détermination of a court of
equity, it is to be so determined, if possible, that no unnecessary hard-
ship or loss shall be inflicted upon one party not demanded by the ciear
rights of the other. It is presumed, in the absence of countervailing
reasons, that such interprétation was within their intent and purpose
when they assumed the contract relation and before their controversy
arose. To reach a just conclusion in a suit for spécifie performance, a
court may avail itself of ail of those aids which the rules of law permit
in the ascertainment of the intention of the contracting parties, and ail
of the facts and circumstances which serve to disclose their conduct
under the contract, their own interprétation of its terms, and their rela-
tions to the property and to each other. While it will not make a new
contract for them, nor interpolate stipulations not of their sélection,
nevertheless it will distinguish between those provisions which pertain
to the form and those which are of the substance of their agreement, to
the end that the former be not permitted to lead to an inéquitable and
unjust resuit, The power so to do belongs to one of the great heads of
8t>0- V2U FKUBKAL, KErOUTliU.
equity jurisprudence. No express provision making prompt payment
by Wegg of the essence of his rights appears in the contract of Septem-
ber 7, 1898, or in any of the agreements of extension. Tlie fixing in the
extension agreements of new times for payment is of no more im-
portance in this connection than the spécification of the maturity of the
installments in the original contract. Does it arise by implication that
such vital importance should be attached to time of payment by Wegg?
It is clear that the contract is not of an optional character. On the
contrary, Hosmer agreed to convey the property to Wegg, and the lat-
ter obligated himself unconditionally to pay the remainder of the pur-
chase price. This operated to pass to Wegg an équitable interest in
the property, even if he possessed none before, and his interest in-
creased with his continued payments. The légal title remained in Hos-
mer as security for the balance due him and as trustée for his vendee.
Nor should the considération be overlooked that Hosmer did not ac-
quire ownership of the property solely through his own means, but
that, on the contrary, nearly two-thirds of the considération moving to
Sturgis, the original owner, was paid directly by Wegg himself, and in
that wise Hosmer secured his title. It is true that the property in con-
troversy is a group of mining claims containing deposits of iron ore,
but it is also true that whatever enhancement in value has occurred is
attributable largely, if not wholly, to the efforts and industry of Wegg
and the complainant. Certain prior transactions are expressly referred
to in the contract of September 7, 1898, as constituting a part of the
considération thereof. We do not reopen that contract for the purpose
of inserting new stipulations, but simply avail ourselves of its affirma-
tive récitals of the considérations moving between the parties. Briefly
stated, those récitals refer to the contract of sale by Sturgis to Hosmer,
the partial payment of the purchase price by the latter, his contract of
sale to Wegg and associâtes in considération of reimbursement to him
and payment of balance due Sturgis, the actual payment in fuU to Stur-
gis, and the inclusion as part of the considération of a sum of money
expended by Hosmer in another matter. By thèse récitals and by the
évidence we learn that at the institution of the suit Wegg had paid to
Sturgis and Hosmer upon the purchase of the property more than $86,-
000 over and above the royalties received from the mining opérations.
When this is placed against the fact that there remained due to Hosmer,
principal and interest, but $53,205.40, it becomes apparent, in the light
of ail of the other circumstances of the case, that a forfeiture of
the purchaser's rights would be grossly inéquitable and unjust, and that
it would be unconscionable to impose such a penalty upon him. While
it is true that the prior contracts were canceled and the parties released
from ail obhgations thereunder by the contract of September 7, 1898,
what was meant thereby was merely that the last contract should stand
as the évidence of their rights and obligations, and not that the former
could not be referred to, as they were in fact expressly referred to, as
indicating in part the considération already paid and the équitable rela-
tion thereby created.
Neither the complainant nor Wegg made a tender of the balance of
the purchase price due to Hosmer before the suit was instituted, nor
is it at ail clear that the offers set forth in the pleadings are sufticient
HOSMBR V. WTOMING ET. & IBON CO. 891
either în tîme or character. The amount due to Hosmer was fixed and
certain, and did not dépend for its ascertainment upon trial and decree
by the court. No accounting was necessary. The indefinite and uncer-
tain tenders in complainant's bill and Wegg's answer were well calcu-
lated to postpone the performance of an immédiate and positive obliga-
tion. In this, connection it should be said that upon a careful considér-
ation of the record we are of the opinion, notwithstanding the aver-
ments of forfeiture in the ansvvers of the Hosmers, that, had a full and
fair tender been made to them before suit was instituted, it would
hâve been accepted, and thereby ail of the costs incident to this litiga^
tion would bave been avoided. The course of complainant and of
Wegg, its grantor, has caused them to be unfairly charged with the
payment of a large bill of costs. Ordinarily, when a tender is not
made before the institution of the suit, or is not made in the bill in cases
in which it is proper to so tender performance, the bill will be dismiss-
ed at complainant's cost. But should that be done in this case? The
transactions of the contracting parties were such that at the time the
suit was instituted each of them possessed a substantial interest in the
property in controversy. The purchaser had paid the major part of
the purchase money. He had been, and his grantee was then, in the ac-
tual possession of the property, and had caused to be made extensive
improvements in the immédiate vicinity, to the end that the product
thereof was readily marketable. The seller retained the légal title, and
there remained unpaid to him, even with interest added, considerably
less than one-half of the principal of the original purchase price. When
a court of equity has acquired jurisdiction of a suit, it will generally
proceed to a complète détermination of the entire controversy, and will
not remit the parties to additional suits or actions for relief, if such
course may be properly avoided. And while, in working out an équita-
ble resuit, a court has no power to impose conditions not authorized bv
the settled principles of equity jurisprudence, nevertheless it is well
recognized that, under the doctrine that he who seeks equity must do
equity, it may so condition and qualify its decree that a righteous adjust-
ment of the claims of the contending parties may be accomplished. The
Hosmers hâve not sought, by act or pleading, a rescission or termina-
tion of the contract, except by way of strict forfeiture of Wegg's équita-
ble interests ; and this, we hâve seen, is inadmissible. There should be
no forfeiture of his or his grantee's interests, if they are still willing to
promptly pay the balance which is due.
No resuit bénéficiai to any of the contending parties would be se-
cured by a dismissal of complainant's bill because of failure to tender
performance. Their rights would be by such course left in a condition
wholly unsatisfactory. When the contract évidences an actual sale
and purchase of real property, and time is not an essential élément
therein, and the parties hâve substantially progressed with performance,
the rule requiring tender before institution of suit for spécifie perform-
ance is not of imperative application. Much dépends upon the equities
of the particular case, and whether the omission to profïer performance
has resulted in a hardship or loss that cannot be readily remedied by the
decree. It is not infrequent that the question is resolved into one con-
cerning the mère assessment or apportionment of costs. In Hepbum
892 129 FEDERAL REPORTER.
V. Auld, 5 Cranch, 262, 3 L. Ed. 96, it was held that a vendor could
compel spécifie performance of a contract for the sale of land, if able to
give a good title at the time of the decree, although it was perfected aft-
er suit was instituted. And in Hepburn v. Dunlop, i Wheat. 179, 4
L. Ed. 65, it was suggested that in a case peculiarly circumstanced a
court might even continue the cause for the purpose of affording a party
time for the completion of his title. In Stevenson v, Polk, 71 lowa,
288, 32 N. W. 346, it was said :
"It Is sufficient î( the title is perfected or Incumbrances removed prior to
the trial. If the court can then by a decree protect the rights of ail parties,
this Is ail either can justly ask, unless there has been a rescission, or an offer
to resdnd, and the party so offering has done ail he is required to do, aiid was
entitled thereto at the time the offer was made." Wllson's Bx'rs v. Tappan,
6 Ohio, 174; Linn v. McLean, 80 Ala. 308; Chrisman v. Partee, 38 Ark. 60;
Tewksbury v. Howard, 138 Ind. 111, 37 N. B. 358; Oakey v. Cook, 41 N. J.
Bq. 364, 7 Atl. 503.
The principle of thèse authorities may well be applied to the case
of a proffer or tender by a vendee, where considérations of equity and
justice demand it. On the whole we are of the opinion that sub-
stantial justice will be accomplished by the reversai of the decrees of
the Circuit Court and the entry in lieu thereof of a decree in conformity
with the views herein expressed.
The decree below will be reversed, with costs, and the case will be
remanded to the Circuit Court, with instructions to enter a decree to the
eiïect that Edward S. Hosmer and Amanda S. Hosmer recover of the
complainant below their costs in the Circuit Court, to be duly taxed,
and that if, within 30 days after the filing in the Circuit Court of the
mandate herein, the complainant, as the grantee of Wegg, shall pay
into the Circuit Court, for the benefit of the said Edward S. Hosmer
and Amanda S. Hosmer, the entire amount due and unpaid under the
contract of sale, with interest to the date of payment, ail of the costs
of this suit in the Circuit Court and in the Circuit Court of Appeals, and
the commission or percentage upon said amounts which the clerk of
that court will be entitled to obtain for his services in receiving and
disbursing the money, the complainant may bave spécifie performance
of the contract, and the Hosmers may receive the moneys thus deposited
for their benefit; but, if it fails to make thèse payments at the time
and in the manner above specified, it shall be deemed to hâve elected
to abandon ail rights under the said contract, and Amanda S. Hosmer
shall be deemed and decreed to be the owner of the property free from
the claims of the complainant and of the défendant Wegg. Amanda S.
Hosmer should not be required to exécute a deed containing cove-
nants of warranty against demands, liens, or titles of persons who do
not claim under or through her or her grantor, Edward S. Hosmer, nor
against claims, liens, or titles arising out of unpaid taxes, gênerai or
spécial.
It is so ordered.
IHE NEW BEUN8WICK, 893
THE NEW BRUNSWICK.
MORRISON V. OBRION.
(Circuit Court of Appeals, First Circuit. May 4, 1904.)
No. 528.
1. Mabitime Liens— Supplies— Présence oi' Ownek.
Where the place of business of a corporation which is the owner of
a vessel is at a port in a state other tlian that of its création and légal
domicile, and its officers are ttiere présent, to ttie knowledge of one who
furnishes supplies in that port, the master has no authority to impress
a lien on the vessel for such supplies.
2. Same— State Statute— Fobeiqn Vessels.
The rule that a proceeding cannot be maintained to enforee a lien under
a State statute for supplies furnished a seagoing vessel owned by a cor-
poration of another state is uot rendered inapplicable by the fact that she
was enrolled at the port where the supplies were furnished, where it is not
shown that the person furnishing the same was misled by such fact into
believing her a domestic vessel.
Appeal from the District Court of the United States for the District
of Massachusetts.
For opinion below, see 125 Fed. 567.
Eugène P. Carver and Stephen R. Jones, for appellant.
Arthur J. Selfridge (William L. OBrion, on the brief), for appellee.
Before COLT and PUTNAM, Circuit Judges, and BROWN, Dis-
trict Judge.
PUTNAM, Circuit Judge. This appeal arose out of an intervening
pétition filed by Morrison, the appellant, on the ist day of June, 1903, in
a proceeding then pending in admiralty against the steamer New Bruns-
wick in the District Court for the District of Massachusetts. 125 Fed.
567. The pétition was dismissed, and Morrison appealed to this court.
The essential parts of the pétition are as follows :
"That the steamer New Brunswick, during the months of June, July and
August, 1902, was owned by the Colonial Steamboat Company, a corporation
organized and existing under the laws of the state of Maine.
"That your petitioner during the said months was engagea in the business
of furnishing and supplying coal to vessels in said Boston ; that during the
said months the said steamer New Brunswick was lying in the port of Boston,
and in need of coal and certain labor incident to its dellvery, to enable her
to continue in the business In which she was engaged and for whIch she was
intended, and, at the instance and request of her master and agent, your pe-
titioner supplied to said steamer certain coal, labor, and supplies of which
she was in need, on the dates when and in the amounts as are set out in the
itemized account which is hereunto annexed, marked 'A,' and that there Is
due to your petitioner for said coal, labor, and supplies the sum of $1,536.32 ;
and that the said coal, labor, and supplies were furnished on the crédit of the
said steamer, and the amounts chargea for the same are fair and reasonable,
and your petitioner Is entltled to a lien on the said steamer New Brunswick
for the said amount.
^ 1. Maritime liens for supplies and services, see note to The George Du-
mols, 15 C. C. A. 679.
K 2. Maritime liens under state statutes, see note to The Electron, 21 O. C.
A. 21.
894 129 FBDE3EAL REPORTEE.
"That the sald coal, labor, and supplies were fnrnlshcd In the port of Boston,
and your petitioner duJy flled in the oOice of the clerk of the clty of Boston
statements subscribed and sworn to by him, glvlng a true account of the de-
. mands due to him, with ail just crédits, and otherwise in accordance with
law."
Thereupon the petitioner prayed that the District Court would de-
cree for the balance against the steamer. The opinion of the District
Court on this pétition was as follows :
"This was for the priée of coal. The arrangements for Its purchase were
made by the clalmant's manager before the season began, and without any
Intervention by the captain. tlnder thèse circumstances, it is of little consé-
quence who ordered the coal to be delivered from time to time. Morrison
relied upon an agreement to give a lien said to hâve been made between him-
self and some of the clalmant's ofRcers, but I flnd that no such lien was ever
agreed to by any one authorized to represent the claimant in the matter. So
far as appears, even the libelant did not understand that he had a gênerai
maritime lien for the coal f urnished. He seems to hâve supposed that he
could avall himself of the lien given by the statutes of Massachusetts. He
may hâve supposed this either beeause he thought the steamer was a Massa-
chusetts vessel, or beeause he did not anticipate the décision of the Suprême
Court in The Koanoke, 189 U. S. 185 [23 Sup. Ct. 491, 47 L. Ed. 170]. As the
contract for coal vcas made for the season by the owners, there was no lien.
Cuddy V. Clément, 113 Fed. 454 [51 C. C. A. 288]. While Morrison flled the
statutory claim for a lien, he cannot, under thèse pleadlngs, avail himself
of it."
There may be some question whether there was a definite arrange-
ment for the coal before the season commenced, as stated by the learn-
ed judge of the District Court. This, however, in view of other aspects
of the case, it is not necessary for us to détermine. It appeared that
the corporation which owned the New Brunswick, although created by
the laws of Maine, had its usual, and in fact only, place of business at
Boston. It also appeared that the steamer was engaged in excursion
trips between Boston and Salem, making her port of rest at Boston,
where the coal was supplied.
The petitioner undertakes to bring this appeal within The Surprise
(decided by us on March 29, 1904) 129 Fed. 873, and The Philadelphia,
75 Fed. 684, 686, 21 C. C. A. 501, also decided by us. This he fails to
do. In each of thèse cases, hand-to-mouth supplies were furnished at
intermediate ports on the orders of the master, or under such circum-
stances that they were presumed to be by his orders. Certainly there
is nothing in this record to enable us to frame a judgment for any por-
tion of the coal in issue as having been thus ordered. As testified by
the gênerai manager of the Colonial Steamboat Company, it was ob-
tained in the following manner :
"I had instructed the wharfinger [that is, the wharflnger at Boston], several
times, to go to the head of the wharf and phone for coal. Ail coal that was
sent to the dock, there was a slip sent with it. The wharflnger would receipt
the slip, pass it to the engineer for his O. K., and then pass it to the treas-
urer."
The wharfinger was in no sensé a représentative of the master of the
vessel ; and, independently of that, inasmuch as the established place
of business of the Colonial Steamboat Company was at Boston, al-
though that city was not its légal domicile, that corporation, as the own-
er of the New Brunswick, must be regarded as so far présent that
THE NEW BBXTNSWICK. 895
there was no existîng emergency which vested in the master authoritx
to impress a lien on the vessel for supplies fumished her at that port.
The undisputed rule in this respect is as stated in The Lulu, lo Wall.
192, 200, 19 L. Ed. 906, and in 2 Parsons on Shipping & Admiralty
(1869) 332. The continued présence of the owner, even at a place other
than that of his domicile, if known to the supplyman, as it was in this
case, defeats the power of the master to impress a lien on the ship.
The only évidence which the petitioner produced on this point was
that "sometimes the captain would order; sometimes Mr. Peck would
order, and Mr. Ware." Mr. Ware was the treasurer of the corpora-
tion, and, as we hâve said, Mr. Peck was the gênerai manager. Nothing
in the record enables us to form any estimate of what coal was in fact
ordered by the master, if any was so ordered, either directly or by impli-
cation, so that, if in truth any was ordered by him, it would be, as we
hâve already said, impossible for us to frame a judgment for any
spécifie amount in that behalf. Without going further into détails, the
record thus lacks definite évidence that any particular part of the coal
in question was ordered by the master, either expressly or by implica-
tion.
The petitioner undertakes to bring himself within The Patapsco, 13
Wall. 329, 20 L. Ed. 696; but, alike for the reasons we hâve stated,
and for the other reasons given by us in Cuddy v. Clément, 113 Fed.
454, 460, 51 ce. A. 288, the circumstances of The Patapsco were es-
sentially unlike those of the case at bar. The petitioner also insists that
if what we hâve already said be conceded, including that the coal was
ordered by the corporation itself through its principal and responsible
officers, yet there was an agreement, express or implied, that the peti-
tioner should hâve a lien on the steamer therefor. Aside from the
question which we considered somewhat in Cuddy v. Clément, at page
462, 113 Fed., 51 C. C. A. 296, whether a lien of a maritime character
could be created in that way without évidence of a maritime necessity
therefor, as to which there was no sufficient proof at bar, the record
fails to show a meeting of the minds, such as in several décisions we
hâve stated is required in order to sustain this proposition. We need
refer to none of our décisions on this point except Whitcomb v. Met-
ropolitan Coal Co., 122 Fed. 941, 59 C. C. A. 465. There the opinion
of Judge Aldrich, rendered in behalf of the court, stated at page 942,
122 Fed., page 466, 59 C. C. A., that, in order to raise a lien in this
way, "the minds should meet in such a sensé as to create an understand-
ing or a contract that such a lien should exist for the purposes of securi-
ty to the party who furnished the supplies." As, therefore, the only
question is one of fact — whether the évidence sustains the petitioner in
the particulars required by Whitcomb v. MetropoHtan Coal Co., it
would not be of advantage to détail the proofs, because it is too clear
that they are so indefinite and uncertain that they do not justify us
in finding this issue in his favor.
It will be noticed that the pétition which we hâve considered rep-
resents merely that the New Brunswick was owned by the Colonial
Steamboat Company — a foreign corporation, so far as the questions
hère involved are concerned. It does not state where she was registered
or enrolled, though it perhaps left the presumption that she was régis-
896 129 FEDERAL EEPOKXER.
tered or enrolled at some port in the state of Maine. The pétition con-
tained some allégations looking to claiming a lien under the statutes of
Massachusetts. The Roanoke, 189 U. S. 185, 23 Sup. Ct. 491, 47 L.
Ed. 170, as applied to the pétition and the facts already referred to,
rendered ineffectuai any attempt to enforce such a lien. The Roanoke
was decided on the 2d day of March, 1903, but the volume containinp:
it was undoubtedly published after this pétition was filed. The opinion
of the District Court adverse to Morrison was passed down on July
9, 1903. Shortly previous thereto an application had been made to
the court for leave to amend, alleging that at ail times while the coal
was being delivered the New Brunswick was enrolled at the port of
Boston. We assume that the purpose of this application was to enable
the petitioner to rely on the alleged statutory lien. Whether this
amendment should hâve been allowed was, under the circumstances, a
matter of discrétion which we cannot revise. Any décisions of the Su-
prême Court apparently to the contrary, on careful examination and
comparison with other décisions, will be found not to contravene this
proposition as applicable to the précise case before us. But as we will
see, the amendment would hâve been ineffectuai if it had been made.
Subsequently, after the opinion of the District Court to which we
hâve referred had been passed down, Morrison filed a new pétition, al-
leging that the New Brunswick was during the year 1902 enrolled at
the port of Boston, and evidently he aimed by this pétition to secure
from the District Court the enforcement in admiralty of the alleged stat-
utory lien to which we hâve referred. The second pétition was dis-
missed by the District Court on the ground of res adjudicata, holding
that the disposition of the first pétition on the merits barred it: As a
gênerai proposition, the court is sustained by the rule as given in
Stearns on Real Actions {183 1) 80, 81, and elaborated and broadly ap-
plied in United States v. California & Oregon Land Co., 192 U.
S. 355, 24 Sup. Ct. 266, 48 L. Ed. . The usual rule undoubtedly is
that where a proponent has made his case in his own way, and has gone
to trial on the merits and been defeated, he cannot afterwards maintain
another suit, based upon the same transaction, varying the allégations
with référence to the cause of action. For other reasons, however,
this pétition, as well as the proposed amendment, was ineffectuai.
There were no allégations in the second pétition to the effect that
Morrison was misled by the fact that the New Brunswick was enrolled
at Boston, and there is no claim of that nature in the record. So far as
either is concerned, he was wholly inconsiderate of any question as to
the place of enrollment. Therefore there is no basis for any claim that a
foreign vessel may be regarded as domestic, or vice versa, when the
materialman has been misled. St. Jago de Cuba, 9 Wheat. 409, 418, 6
L. Ed. 122; Parsons on Shipping & Admiralty (1869) 325. Conse-
quently the ordinary rule applies, that a vessel is domestic at the port
where her owners are domiciled or réside, and foreign at other ports,
wherever she may be registered or enrolled. White's Bank v. Smith,
7 Wall. 646, 19 L. Ed. 211 ; The Havana, 64 Fed. 496, 12 C. C. A.
361. It is also the settled law of the fédéral courts that a corporation
is domiciled and résides in the state of its création. Therefore Maine
MAHLEB V. ANIMAEIXJM 00. 897
was the home port of the New Brunswick, and, in any view of the case,
and alike on each pétition, the Roanoke meets it, and no statutory lien
can be successfully maintained.
The decrees of the District Court are affirmed, and the appellee re-
covers the costs of appeal.
MAHLBR et al. v, ANIMAEIUM 00.
UNITED STATES ex rel. ANIMARIUM 00. v. CIRCUIT COURT OF
UNITED STATES, SOUTHERN DIST. OP lOWA, et al.
(Circuit Court of Appeals, Eighth Circuit. April 28, 1904.)
Nos. 1,527, 41.
1. DECEEE— IMPEACHMENT— DENIAL OF AXJTHORITT OF COUNSEL.
Duly authorized counsel instituted a suit for the complainant, durlng
the progress of which an order of severance was made, and leave was
given to file a new bill against certain of the défendants, which was
done. The cause on such bill proceeded to a decree In complainant's
favor, which was reversed on appeal, being conducted throughout by the
same counsel. Held, that complainant could not challenge the validity
of the decree of the appellate court on the ground that the trial court
was without power to make the order of severance, and consequently the
subséquent proceedings thereunder constituted a new suit, in which the
counsel thereafter appearing had no authority to represent It without
a new and express employment.
2. Same— PowEE or Couet to Set Aside.
A decree, although final, remains under the control of the court during
the term at which it was rendered; and where the court suspended the
entry of a decree whleh had been previously signed, but not entered on
the journal, and proceeded thereafter to reform the pleadings and hear
the cause anew, with the aequiescence of the parties, such decree Is of
no validity, although it was by mistake flled by the clerk.
Appeal from the Circuit Court of the United States for the Southern
District of lowa.
Edward J. Hill, for Animarium Co.
Leslie A. Gilmore, for James H. Mahler and others and respondents.
Before SANBORN, VAN DEVANTER, and HOOK, Circuit
Judges.
HOOK, Circuit Judge. In the fîrst of thèse causes a motion was
presented on behalf of the Animarium Company and certain of its licen-
sees to cancel a decree of this court for want of jurisdiction. The
other cause is an application on behalf of the same company for a writ
of mandamus commanding the respondents to proceed with the enforce-
ment of what is claimed to be a decree in its favor rendered by the
Circuit Court of the United States for the Southern District of lowa.
Thèse matters are the outgrowth of the same litigation, and, as there
exists in a large measure a dependence upon the same conditions, they
will be considered together.
On September 20, 189g, the Animarium Company filed its bill in
the Circuit Court of the United States for the Southern District of
lowa against one G. Walter Filloon, to obtain an injunction restraining
129 F.— 57
S98 129 FBDEKAL RBPORTEK.
the infringement of certain letters patent. In Jannary, 1901, James IL
Mahler and others, doing business as the Oxygenor Company, were,
upon tlieir own application, made parties défendant. The issues were
joined, and a large amount of testimony was taken. The cause having
been heard, an opinion was filed by the trial judge on June 21, 1900, to
the efifect that the Animarium Company was entitled to a decree. Ani-
marium Company v. Filloon (C. C.) 102 Fed. 896. A decree, however,
was not entered at that time, for the reason that it was agreed that
the pleadings should be recast, so that, the complainant having embra-
ced in an amended and substituted bill of complaint the substance of the
facts proven by the testimony, the questions involved might be concisely
presented by demurrer, and determined by the ruling of the court
thereon, and thus the expense of a voluminous record on appeal could
be avoided. Counsel for the respective parties appeared on September
8, 1900, and it was then formally ordered that the Animarium Company
hâve leave to file instanter an amended and substituted bill, and that de-
fendants hâve leave to file a demurrer thereto ; and, said pleadings beipg
considered as having been filed, it was further ordered that the demur-
rer to the amended and substituted bill be overruled. The défendants
electing to stand on the demurrer, a decree was rendered in favor of
the Animarium Company. This is the decree which that company now
seeks to hâve enforced. The amended and substituted bill not being
completed at the time of the hearing, the papers, including the signed
decree, were delivered to one of the solicitors for the complainant, with
the direction that, when presented to the clerk of the circuit court,
they should be filed and entered as of the 8th of September. Thèse plead-
ings and the decree were not presented to the clerk until September 26,
1900. Two days prior thereto the défendant, Filloon, presented a péti-
tion for rehearing, and supported the same with an affidavit stating in
substance that he had not been represented at the hearing of September
8th, and that the counsel who there represented the défendants were
the counsel of his codefendants, Mahler et al., and had no authority
from him. The trial judge at once fix'.,d a date for the hearing of Fil-
loon's pétition, and made an order on September 24, 1900, that in the
meanwhile the decree should not be entered. When the papers were
received by the clerk, on the 26th of September, he filed ail of them,
including erroneously the draft of the suspended decree. The decree
was not entered upon the journals of the court, and it has not been so
entered to this day. The pétition of Filloon for a rehearing was heard
on the I7th of October, 1900, counsel for ail of the parties being prés-
ent ; and the court, being impressed with the contention of Filloon that
he had not been represented at the prior hearing, and that his rights
would be prejudiced by joinder with his codefendants, Mahler et al.,
made an order of severance, and that the litigation should thereafter
proceed as two independent suits in equity ; that is to say, that the bill
as originally filed, Filloon's answer, and complainant's replication, should
stand as the pleadings in one suit, and that the Animarium Company
should hâve leave to file another amended and substituted bill against
Mahler et al., and that it should be docketed and proceeded with as a
separate and independent suit. No objections appear to hâve been
made at the time to this procédure. The suit against Filloon may be
MAHLEB T. ANIMAEIXJM 00. 899
dismîssecl from further considération with the observation that ît seems
to be still pending, and that its course since the order of severance is
marked by an unusual confusion and complexity of pleading. In com-
pliance with the order of severance, the Animarium Company filed its
second amended and substituted bill against Mahler et al. on October
31, 1900. The défendants demurred thereto, the demurrer was over-
ruled, the défendants elected to stand upon theîr demurrer, and on
November 13, 1900, a decree was rendered in favor of the Animarium
Company. From this decree the défendants appealed to this court.
The record filed hère contained none of the proceedings prior to the filing
of the second amended and substituted bill. The only référence to such
proceedings is contained in the récital in the second amended and substi-
tuted bill that it was filed pursuant to the order and direction of the court.
Upon hearing in this court, the decree below was reversed, and the
cause was remanded, with directions to dismiss the bill of complaint.
Mahler v. Animarium Company, m Fed. 530, 49 C. C. A. 431. The
decree in this court was rendered October 21, 190 1, and it is the de-
cree which is sought to be canceled because of an alleged want of ju-
risdiction. On April 14, 1902, the application of the Animarium Com-
pany for a writ of certiorari was denied by the Suprême Court. 186
U. S. 481, 22 Sup. Ct. 941, 46 L. Ed. 1266.
Two grounds are relied upon for the cancellation of the decree of this
court. They are: (i) That commencing with the filing of the second
amended and substituted bill of complaint in the Circuit Court, the same
being the first pleading shown in the record on appeal to this court,
the suit was prosecuted without the knowledge or authority of the
Animarium Company; (2) that it appears upon the face of the bill of
complaint filed in the name of the Animarium Company, and shown in
said record, that the Circuit Court was without jurisdiction, in thàt the
suit was not instituted in a district in which the défendants were in-
habitants, or had committed acts of infringement, and had a regular and
established place of business. Of thèse in their order.
Passing the question which at once suggests itself — whether a sol-
emn decree of a court can be attacked, after the term at which it was
rendered, by mère motion, and affidavit that counsel had no authority
to represent a party for whom they appeared, or whether the remedy
imder such circumstances is not by original bill — the first of the enu-
merated objections is disposed of by the record, and the admission of
counsel who now appears for the Animarium Company. It was admit^
ted by counsel that the original bill which was filed on behalf of the
Animarium Company in 1899 was filed with its authority; that it was
cognizant of ail of the proceedings in the cause prior to the order of sev-
erance of October 17, 1900; that the counsel who prosecuted the suit
and participated in such proceedings, and whose names appear of record,
had full authority to do so, down to the date last mentioned. They are
the same counsel who continued in charge of the cause against Mahler
et al., and of the interests of the Animarium Company in the appeal to
this court. But it is argued that the Circuit Court had no power to
make the order of severance, and to set aside its previous decree of
September 8, 1900, and, being without such power, the counsel who
had theretofore appeared were without authority to continue their rep-
900 129 FEDERAL REPORTEE.
resentation of the interests of the Animarium Company, uniess that
Company was advised of the situation, and had expressly empowered
them to act in what counsel claims was substantially a new suit. The
mère statement of this proposition is sufficient to demonstrate its un-
soundness. Moreover, there appears in the pétition for the writ of
mandamus an express admission of the Animarium Company that its
solicitors endeavored for a long time, and in good faith, to carry out
the order of severance of October 17, 1900. The excuse offered is that
its acquiescence and comphance was out of déférence to the trial judge.
The second ground of the motion is that the amended and substituted
bill of complaint is déficient in essential jurisdictional averments. The
act of March 3, 1897, c. 395, provides as follows :
"That In sults brought for the Infrlngement of letters patent the Circuit
Courts of the United States shall hâve jurisdiction in law or In equity, lu
the district of which the défendant is an Inhabitant, or in any district in
which the défendant * • * shall hâve committed acts of infrlngement
and hâve a regular and established place of business." 29 Stat. 695, 1 Oomp.
St 1901, p. 689.
It is claimed that it appears from the second amended and substitut-
ed bill that the défendants Mahler et al. réside in Chicago, 111., and that
it was not sufficiently alleged that they committed acts of infringement
and had a regular and established place of business in the Southern
District of lowa. But in that pleading it is expressly alleged that the
défendants were înfringing upon complainant's rights secured by its
letters patent; that it had requested them to cease and desist, but that
défendants failed to comply with the request, and were still using the
infringing devices, and were threatening to continue the use thereof,
and, using the language of the complainant itself —
"That they now hâve a place of business for the manufacture and sale and
disposition of said devices so mannfactured and sold by, them in the city of
Des Moines, Polk county, state of lowa, and had said place of business at said
clty of Des Moines aforesaid prier to and at the commencement of this suit,
and still hâve the same, and threaten to continue their said business there,
and will continue to do so, as your orator believes, uniess restrained by an
injunction of this honorable court."
Even were nothing else to be said upon this point, it is manifest that
thèse allégations constitùte a compliance with the requirements of the
act.
By the pétition for the writ of mandamus it is sought to give life and
efficacy to the decree of September 8, 1900. It is sufficient to say that
this decree was never entered, and that, even if it ever became effective,
the order of the Circuit Court of the 24th of September, the order of
October I7th, and the course pursued by the court, with the acqui-
escence of the parties, in severing the two causes and proceeding with
them as independent suits, operated to vacate it. A court has full con--
trol over its orders and decrees during the term at which they were ren-
dered. Henderson v. Carbondale Co., 140 U. S. 25, 11 Sup. Ct. 691, 35
Iv. Ed. 332. And this power extends to decrees which are final as well
as to those of an interlocutory character. It will be presumed, nothing
appearing to the contrary, that the action of the Circuit Court in sus-
pending and then in effect vacating the decree was during the same term
LAND TITLE & TKUST CO. V. M'COACH. 901
at which the decree was signed. The briefs of counsel contain many
suggestions in support of the motion and the pétition for the writ of
mandamus, but, although they hâve received due considération, we hâve
deemed it unnecessary to give more than a gênerai référence to them.
The Animarium Company, through counsel who were employed an^
fully authorized by it, instituted suit and proceeded with the prosecution
thereof. It was wholly successful in the Circuit Court. It endeavored
to hold fast to its success on the appeal to this court, and by its appli-
cation to the Suprême Court for the writ of certiorari, but met with
failure. It was finally adjudged that the complainant's devices were de,-;
void of patentable quality. And now, two years after the cause was
finally closed, a dragnet is drawn through the proceedings, and the Com-
pany seeks a review by this court of matters most of which hâve not
even a remote bearing upon the jurisdiction of the court below. Some
of its objections are predicated upon its own omissions ; others, upon a
course of procédure in the Circuit Court in which it fully acquiesced at
the time. None of them are substantial.
The motion to cancel the decree of this court will be overruled. The
pétition for a writ of mandamus will be denied.
LAND TITLE & TRUST CO. v. McCOACH, Internai Rerentie Collector.
(Circuit Court of Appeals, Thlrd Circuit May 26, 1904.)
No. 30.
1, Intebnal Revenue— Legact Taxes— Vested ok Contingent Reuainoeb.
A testator who dled In March, 1901, by his will bequeathed his resid-
uary estate in trust, the income to be paid to his wife during her life,
with remalnder to his chlldren llving at the time of her death, and the
lawful issue of any deceased child or chlldren ; snch Issue taking th»
Bhare only thelr parent would hâve taken if llving. Eeld, that the re-
malnder so created was not vested, not belng llmited to "persons In esse
and ascertained," but was contingent, belng llmited to persons who could
not be ascertained until the death of the wife, and that such bequests
were not subject to the legacy tax imposed by section 29 of the war rev-
enue aet of June 13, 1898, c. 448, 30 Stat. 464 [D. S. Comp. St. 1901, p.
2307] ; the wife belng stlll llving at the time of the taking effect of the
amendment of June 27, 1902, c. 1160, § 3, 32 Stat 406 [U. S. Comp. St
Supp. 1903, p. 282], exemptlng from the tax "any contingent bénéficiai
Interest not absolutely vested in possession or enjoyment" prior to July
1, 1902.
In Error to the Circuit Court of the United States for the Eastern
District of Pennsylvania.
For opinion below, see 127 Fed. 381.
John G. Johnson, for plaintiflF in error.
James B. HoUand and J. Whitaker Thompson, for défendant in
error.
Before ACHESON, DALLAS, and GRAY, Circuit Judges.
DALLAS, Circuit Judge. The plaintiff in error was plaintiflF be-
low, and the défendant in error was défendant below. In this opinion
902 129 FEDERAL EEPOEÏER.
they will be referred to simply as plaintiff and as défendant, respec-
tively. As collector of internai revenue, the défendant on December
8, 1903, assessed, inter alia, a tax of $11,439.53 upon the bénéficiai
interests of the remaindermen in the residuary estate of George M.
Troutman, who died in the city of Philadelphia on March 5, 1901.
The plaintifï admitted that there was due, upon sundry spécifie be-
quests under the will of the said George M. Troutnian, internai rev-
enue taxes upon said estate aggregating $1,431.51, and he paid this
amount to défendant on January 5, 1903 ; but he refused to pay the
additional sum of $11,439.53, assessed and demanded by the défend-
ant, who thereupon assessed a penalty of 5 per centum for nonpay-
ment thereof within 10 days, making the total amount of the disputed
assessment $13,011.51. The plaintifï paid this last-mentioned sum
under protest and distress, and, after duly appealing to the Commis-
sioner of Internai Revenue for the refund and repayment thereof,
which was refused, he brought this action in the Circuit Court, in
which he claimed to recover the said sum of $13,011.51, with interest.
To the statement of this claim the défendant demurred, assigning
several causes of demurrer, which it is unnecessary to set forth, as the
déclaration in defendant's brief, that he demurred "upon the ground
that the bénéficiai interests upon which the taxes were assessed were
vested, and not contingent, and therefore liable for the tax," présents
the main question in the case, and one upon which it properly may
be decided. The statutory provisions under which this question
arises are as follows:
"An act to provide ways and means to meet war expenditures, and for other
purposes," approved June 13, 1898, c. 448, 30 Stat. 448, 464 [U. S. Comp.
St. 1901, pp. 2286, 2307].
"Sec. 29. That any person or persons having in cliarge or trust, as admlnis-
trators, executors, or trustées, any legacles or distributive shares arislng from
Personal property, where the whole amount of such personal property as afore-
said shall exceed the sum of ten thousand dollars in actual value, passing,
after the passage of this act, from any person possessed of such property,
either by will or by the intestate laws of any state or territory, or any Per-
sonal property or Interest, therein, transferred by deed, grant, bargain, sale
or gift, made or Intended to take efCect in possession or enjoyment after the
death of the grantor or bargainor, to any person or persons, or to any body
or bodies, politlc or corporate, In trust or otherwise, shall be, and hereby are,
made subject to a duty or tax, to be paid to the United States, as follows —
that Is to say: Where the whole amount of said personal property shall
exceed in value ten thousand and shall not exceed in value the sum of twenty-
flve thousand dollars the tax shall be: First. Where the person or persons
entitled to any bénéficiai interest in such property shall be the lineal issue or
lineal ancestor, brother or sister to the person who dies possessed of such
propert}', as aforesaid, at the rate of seventy-five cents for each and every
hundred dollars of the clear value of such interest in such property."
"An act to provide for refunding taxes paid upon legaeies and bequests for
uses of a religious, charitable, or educational character, for the encourage-
ment of art, and so forth, under the act of June thirteenth, eighteen hun-
dred and ninety-eight, and for other purposes," approved June 27, 1902,
c. 1160, 32 Stat. 400 [U. S. Comp. St. Supp. 1903, pp. 281, 282].
"Sec. 3. That in ail cases where an exécuter, administrator, or trustée shall
hâve paid, or shall hereafter pay, any tax upon any legacy or distributive
share of personal property under the provisions of the act approved Juiie
thirteenth, eighteen hundred and ninety-eight, entitled 'An act to provide
ways and means to meet war expenditures, and for other purposes,' and ameud-
LAND TITLE & TRUST -00. V. M'COAOH. 903
ments thereof, the Secretary of the Treasury be, and he Is hereby, authorized
and dlrected to refund, out of any money in the treasury not otherwise ap-
propriated, upon proper application being made to tlie Commissioner of Inter-
nai Revenue, under such rules and régulations as may be prescribed, so much
of said tax as may hâve been collected on contingent bénéficiai interests
whieh shall not hâve become vested prior to July first, nineteen hundred and
tv?o. And no tax shall hereafter be assessed or imposed under said act ap-
proved June thirteenth, eighteen hundred and ninety-elght, upon or in respect
of any contingent bénéficiai interest which shall not become absolutely vested
in possession or enjoyment prior to said July first, nineteen hundred and
two."
The will of George M. Troutman disposed of his residuary estate
as follows:
"Thirteenth. AU the rest, residue, reversion and remainder of my estate,
real and Personal, whatsoever and wheresoever and of which I may die seised.
possessed or in any way entitled to, I give, devise and bequeath unto my ex-
ecutors, hereinafter named, their helrs, executors, administrators, successors
and assigns forever, in trust nevertheless to collect and receive the rents, In-
terest, income, dividends, and profits thereof and after first deductiug ail ex-
penses attendant upon the exécution of the trust to pay the same unto my
said beloved wife. Maria E. Troutman, for and during the fuU end and term
of her natural life in at least quarter yearly payments. And from and im-
mediately after the deeease of my said vyife, then in trust to divide the said
rest, residue and remainder of my estate into as many equal parts and shares
as there shall be children of mine then livlng and lawful Issue of deceased
children, such issue taking such share only as their parent would hâve takeu
if living.
"And the shares happening to my children in such division to continue to
hold in trust to collect and receive the interest, rents and income thereof and
pay over the same unto my said children during the terms of their respective
natural lives for their respective use, beneflt and behoof and so that the same
shall not be llable for their debts, contracts or engagements by assignments,
anticipation or otherwise and also that the shares of my daughters shall not
be subject to the control or interférence of or liable for the debts, contracts
or engagements of any husband they may hâve or take. And the shares so
happening to my said children from and immediately after their respective
deaths, to hold in trust for ail their children then living and the lawful Issue
of such of them as may then be deceased, their helrs, executors, administra-
tors and assigns forever, in equal parts and shares, so nevertheless, that such
issue take and receive such part and share only as his, her or their deceased
parent would hâve taken and received, if then living, for the purposes herein-
after set forth, that Is to say, as to the shares of the issue born before my
deeease of any of my children, to hold the same In trust for such issue during
their respective natural lives upon the same trust as hereinbefore set forth
with respect to the shares of my children during their lives and after the
deeease of such issue respectively, then in trust to grant, convey, assign and
pay the said shares respectively unto ail their respective lawful Issue in equal
jarts and shares, absolutely and in fee, such Issue taking by représentation
md not per capita. And as to the shares of the Issue born after my deeease,
)f any of my children, to grant, convey, assign and pay the same unto such
ssue, their heirs, executors, administrators and assigns forever.
f "And as to the shares happening In the division of my residuary estate after
fhe deeease of niy wife, unto grandchildren or remoter descendants of mine,
%o hold in trust for the following purposes, that Is to say, the shares happen-
iig to grandchildren or remoter descendants born before my deeease to hold
■pon the same trusts above set forth wIth respect to the shares of the issue
porn before my deeease, or any of my children taking In the division afore-
laid and the shares happening to grandchildren or remoter descendants born
îifter my deeease to hold upon the same trusts above set forth with respect
,lo the shares of the issue born after my deeease of any of my children taking
ta the division aforesaid."
904 129 FEDBEXL EEPOKTEB.
It îs contended for the défendant that the remainder creaîed by
this clause is a vested remainder, and for the plaintiff that it is a con-
tingent one. Let us, then, in the first place, consider the language
of its création. After a devise and bequest of the residuary estate
in trust to pay the income to the testator's wife during her life, the
provision is that upon her death (which has not yet occurred) the
said residuary estate shall be divided "into as many equal parts or
shares as there shall be children of mine then living and lawful issue
of deceased children, such issue taking such share only as their par-
ent would hâve taken if then living." Hère, it will be observed, the
remainder is not given to the testator's children generally, or as a
class, but is limited to such of them as shall be living upon the ter-
mination of the précèdent life estate, and, furthermore, that it is left
uncertain whether, as to any share or shares, the person or persons
entitled to take in remainder will be his children, or will be the lawful
issue of them, or of any of them. This is made évident by what fol-
lows that part of the clause from which we hâve just quoted, where
the contemplation of a remainder which might pass to children, or
which might pass to other descendants, plainly appears in the pro-
visions made as to the shares happening to his children and as to
the shares happening in the division unto his grandchildren or re-
moter descendants. From the language employed in its création,
it seems, then, to be obvious that this remainder is not "limited to
a person in esse and ascertained," and therefore is not vested (Fearne
on Contingent Remainders, 217), but is "limited to a person not as-
certained," and therefore is contingent. Cruïse on Real Property
(Ist Am. Ed.) vol. 2, p. 263. It is precisely within the rule laid down
in Smith on Executory Interests (section 281), that:
"Where real or Personal estate Is devised or bequeathed to such children, or
to such chlld or Indivlduals as shall attain a given âge, or the children who
shall sustain a certain character, or do a particular act, or be living at a
certain tlme, wlthout any distinct gift to the whole class, preceding such re-
strictive description, so that the uncertain event forms part of the description
of the devisee or legatee, the Interest so devised Is necessarily contingent on
aceount of the person. For, until the âge Is attalned, the character is sus-
talned, or the act Is performed, the person is unascertalned. There Is no per-
son answering the description of the person who is to take as devisee or leg-
atee."
That the law îs as stated by the standard text-wrîters to whom we
hâve referred, the gênerai current of judicial décisions abundantly
shows ; but it is contended that those of the Suprême Court of Penn-
sylvania disclose no settled construction of such language as is used
in George M. Troutman's will, and that therefore the décisions of
the fédéral courts should be followed. But in our opinion the law
of Pennsylvania as to the matter in question has been settled by the
décisions of its court of last resort, and in conformity with the gen-
erally established rule to which we bave heretofore adverted. It may
be that it would be difficult to harmonize ail the dicta, or perhaps
some of the judgments, reported in the earlier Pennsylvania cases,
but no attempt to do so need be made. It suffices to say that the
Suprême Court of that state has, by its more récent adjudications,
distinctly, and, as may be assumed, finally, resolved any doubt that
LANP XITLE <fe TEU8T CO. V. m'COAOH. 905
mîght previously hâve been entertained as to îts position upon the
subject under considération. In Craige's Appeal (1889) 126 Pa. 223,
17 Atl. 585, the testamentary clause in question was:
"(4) In the event of my son's decease, and of his wife, Ann, whlle hls wldow,
or in the event of her second marriage, I will that my whole estate shall be
Immediately divided Into two equal portions by my trustée herein named, or
his successor, calling to his ald the advice of my daughter Caroline, and such
other frlends of the family as they may choose to consult; and that one-
half of said estate thus divided shall be distributed In equal proportions, to
ths children of my said son Edmund and his wife Ann, living at the time of
vheir death or said Ann's second marriage, giving hereby to my daughter
Caroline the ehoice of one-half of said estate thus divided."
It was held "that the estate given to the children of Edmund and
Ann Holmes was contingent, and became vested only upon the death
of both, and in such children as were then in Hfe" ; and in that case,
as also in Reilly's Estate (1901) 200 Pa. 304, 49 Atl. 939, it was said
that the rule of légal construction, as well as the testamentary intent
in such cases, is well stated in the passage which we hâve already
quoted from Smith on Executory Interests. Thèse cases would
seem, as to the law of Pennsylvania, to be conclusive, but to the same
effect are Martin's Appeal (1898) 185 Pa. 51, 39 Atl. 841, and Ral-
eigh's Estate (1903) 206 Pa. 451, 55 Atl. 1119.^ It is not impossible
plausibly to suggest that the fédéral décisions disclose some apparent
discrepancies, but, as was said in the case of In re Hoadley (D. C.)
101 Fed. 233, their explanation is to be found in the endeavor to
adopt that construction of the will which will most nearly carry out
the apparent intent of the testator, and make that intent controlling.
But that thie question before us, if presented as in this case, would
be decided by the Suprême Court of the United States as we feel
compelîed to décide it, is, we think, made apparent by the opinion
delivered by that court in McArthur v. Scott, 113 U. S. 340, 5 Sup.
Ct. 652, 28 L. Ed. 1016, in which (page 379, 113 U. S., page 661, 5
Sup. Ct., 28 L. Ed. 1015) it is significantly pointed out that the gift
of the remainder there under examination "is not to such grandchil-
dren only as shall be living at the expiration of the particular estate, but
it is to 'my grandchildren per capita, the lawful issue of my said sons
and daughters' — v^fords of description appropriate to designate ail
such grandchildren."
Having reached the conclusion that the remainder in this case is
contingent, and that therefore the assessment was unlawful, it is un-
necessary for us to express an opinion upon any other of the ques-
tions which hâve been argued. Our views upon the single point we
hâve discussed require that the judgment of the Circuit Court shall
be reversed, and the cause be remanded to that court with direction
to enter judgment for the plaintiff upon the demurrer, and it is so
ordered.
1 Note by the Court. And also MulMken v. Earnshaw, 58 Atl. 286, which
bas been decided by the Suprême Court of Pennsylvania Biuce this opinion
was written. It bas not yet been officially reported.
906 129 FEDERAL REPORTEE.
PHILADELPHIA TRUST, SAFE DEPOSIT & INS. CO. et al. y. McCOACH,
Internai Revenue CoIIeetor.
(Olreult Court of Appeals, Third Circuit May 26, 1904.)
No. 29.
1. INTERNAL REVENUE — liEGACT TAXES — VeSTED OE CoWTINGENT REMAINDER.
The interest of a daughter In her father's estate, which, by the terms of
hls will, she was not to take unless she survived her mother, was con-
tingent, and not vested, and did not become subject to legacy tax, under
section 29 of the war revenue act of June 13, 1898, c. 448, 30 Stat. 464
[U. S. Comp. St. 1901, p. 2307], where her mother was llving July 1, 1902.
after which time contingent bénéficiai interests vested in possession or
enjoyment were exempted from the tax by the amendment of June 27,
1902, c. 1160, § 3, 32 Stat. 406 [D. S. Comp. St. Supp. 1903, p. 282].
In Error to the Circuit Court of the United States for the Eastern
District of Pennsylvania.
For opinion below, see 137 Fed. 386.
John G. Johnson, for plaintifïs in error.
James B. Holland and J. Whitalcer Thompson, for défendant in
error.
Before ACHESON, DALLAS, and GRAY, Circuit Judges.
DALLAS, Circuit Judge. In this case the interest of a daughter
in her father's estate, which, by the terms of his will, she was not to
take unless she should survive her mother, was adjudged to be li-
able to tax, notwithstanding the statutory exemption from such tax
of "a contingent bénéficiai interest not absolutely vested in posses-
sion or enjoyment." That this adjudication was erroneous is shown
in the opinion filed herewith, in the case of Land Title & Trust Com-
pany, Executor, etc., v. McCoach, Collector of Internai Revenue,
129 Fed. 901, and in the opinion and judgment of the Suprême
Court of Pennsylvania in Holmes' Appeal, 116 Pa. 246, 9 Atl. 341.
The judgment of the Circuit Court in favor of the défendant upon
his demurrer to the plaintifïs' statement of daim is reversed, and the
cause will be remanded to that court, with direction to enter judg-
ment thereon in favor of the plaintifïs.
HBMPSTBAD Y. THOMAS. 907
HBMPSTBAD T. THOMAS, Collector of Cnstoma
(Carcuit Court of Appeals, Third Circuit May 9, 1904.)
No. H.
L CusTOMS DuTiEs—CLASsinoATioN— Borate ot Manganèse— Boeate Mate-
EiAL— Chemical Compound— Noscitub a Sociis.
The enumeratlon in paragrapli 11, Tariff Act July 24, 1897, c. 11, 80
Stat. 152 lU. S. Comp. St. 1901, p. 1627], of "otlier borate material, re-
fers only to borate materials found in nature In a raw condition, sucli
as the "borates of lime or soda" Included in the same provision, and does
not embrace borate of manganèse, or bormangan, which Is a manufac-
tured article made from manganèse and borates of lime or soda, and
which is held to be dutlable as a chemical compound or sait under Dara-
graph 3 of said act, 30 Stat. 151 [U. S. Comp. St 1901, p. 1627].
Appeal from the Circuit Court of the United States for the Eastem
District of Pennsylvania.
For décision below, see Hempstead v, United States, 123 Fed. 346,
G. A. 5155.
Wm. A. Keener (J. Stuart Tompkins, on the brief), for appellant.
James B. Holland and Wm. M. Stewart, Jr., for appellee,
Before ACHESON, DALLAS, and GRAY, Circuit Judges.
GRAY, Circuit Judge. This is an appeal by the importers from a
decree of the Circuit Court of the United States for the Eastem District
of Pennsylvania, affirming the action of the Board of General Ap-
praisers. The undisputed facts appear to be as foUows :
O. G. Hempstead & Son imported into the port of Philadelphia,
at various dates between December 4, 1899, and March 29, 1900, 16
separate lots of merchandise, invoiced as bormangan, or borate of man-
ganèse, which was assessed with duty at three cents per pound, under
paragraph 11, Act July 24, 1897, c. 11, 30 Stat. 152 [U. S. Comp. St.
1901, p. 1627] which provides as follows :
"11. Borax, flve cents per pound; borates of lime or soda, or other borate
material not otherwlse provided for, containing more than thlrty-six per
centum of anhydrous boraclc acid, four cents per pound; borates of lime or
soda, or other borate material not otherwlse provided for, containing not
more than thlrty-six per centum of anhydrous boraclc acid, three cents per
pound."
The importers protested against this classification and assessment,
claiming that said merchandise was dutiable at 25 per cent, ad valorem
as a chemical compound or salts, under paragraph 3 of said act of 1897,
c. II, 30 Stat. 151 [U. S. Comp. St. 1901, p. 1627], which said para-
graph reads as follows:
"3. Alkalies, alkalolds, distllled olls, essentlal oils, expressed cils, rendered
oils, and ail comblnations of the foregoing, and ail chemical compounds and
salts not speclally provided for in this act, twenty flve per centum ad valo-
rem."
< The Board of General Appraisers overruled the protests, and af-
pirmed the décision of the collector. The Circuit Court affirmed the
).
908 129 FEDERAL KEPOKTEE.
action of the Board of General Appraisers. In so doing, we think the
learned judge of the court below was in error. We take the foUowing
findings of fact from the opinion of the court :
"It Is Rgreed by the parties to this appeal, that the followlng facts hâve
been established by the testimony : The merchaiidise in question is borate
of manganèse, and is known by the trade as such. It is not found in nature,
but is a manufactured product derived from borate of lime, or borate of soda,
and manganèse. It is a compound of boraclc acid and manganèse. The sev-
eral importations In question contain from 4 to 20 par cent, of manganèse,
and from 10 to 30 per cent, of anhydrous boracic acid. The market priée
of manganèse Is 4 cents a pound, and the market priée of anhydrous boracic
acid is 16 cents a pound. Borate of manganèse is extensively used in the
manufacture of varnishes, where a light colored varnlsh is desired, and Its
only practical use is in such manufacture. The manganèse acts as a dryer,
the boracic acid having apparently no effect, exeept as a vehicle for the man-
ganèse."
The classification of the importation in this case turns upon the
meaning of the words "other borate material," as used in paragraph
II, above quoted. There is apparently confusion in the use of the
word "material," by both the Board of Appraisers and the court. It
is sometimes used by them as the équivalent of "substance" or "ar-
ticle," without référence to its real meaning as the substance or mat-
ter of which anything is made or to be made.
Borate of manganèse is shown by the testimony to be an article not
found in nature, but manufactured from the raw materials, borate of
lime, or borate of soda, which are found in nature. Borate of man-
ganèse, therefore, is purely a manufactured article — as stated above,
a chemical compound of boracic acid and manganèse.
Is this borate of manganèse a "borate material," within the mean-
ing of paragraph ii of the tarifF act of 1897? We think not. As
the only borate material specifically mentioned in paragraph 11 of the
tariff act of 1897 are the borates of lime and soda, the meaning of
"other borate material," used in conjunction therewith, must, on the
principle of noscitur a sociis, be determined with référence to thèse
substances. Borate of lime and borate of soda are the principal raw
materials from which borax and boracic acid are obtained. There are
other borate materials, such as Tuscan crude boracic acid, tincal,
boro-nitro-calcite, boracic acid crystals and tisa, from which borax
and boracic acid are manufactured. They are ail crude raw mate-
rials found in nature, and are of a character similar to borate of lime
and borate of soda, but borate of lime and borate of soda seem to be
the principal borate materials from which borax and boracic acid are
obtained, as they are found in nature in enormous quantities. Borate
of manganèse, on the other hand, as we hâve seen, is not found in na-
ture, but is a manufactured product, obtained from the raw mate-
rials, borate of lime, borate of soda, and manganèse. Thus manufac-
tured, it contains, of course, boracic acid in varying proportions from
10 to 30 per cent., the same being useful only as a vehicle for the
manganèse, and when eliminated, is waste product. It is true, that,
chemically, borax and boracic acid can be obtained from the borate of
manganèse, but it 's not true that, commercially, they can be so ob-
UNITED STATES V. O'NEIUU 909
tained. It îs in évidence that borax is sold for 8J4 cents per pound,
and boracic acid for i6 cents per pound, while it would cost at least
one dollar per pound to produce borax or boracic acid from borate of
manganèse. It is also testified that, apart from the cost, boracic acid
so obtained would not be a commercial article, on account of the stain
produced by the manganèse.
We thinic, therefore, that it is clearly established by the évidence
contained in this record, that borate of manganèse is not, practically
or commercially, a borate material. It is itself a product of the borate
materials mentioned in paragraph 1 1 of the tariflf act referred to.
It is admitted on botla sides, that this paragraph is founded upon the
protective policy of the government. This fact only lends force and
emphasis to the argument, that a practical and commercial meaning
must be given to the words "borate material." The fact that, chem-
ically, it is possible to produce borax or boracic acid from borate of
manganèse, does not bring the latter within the meaning of the words
"borate material," as used in the paragraph in question. Neither the
letter nor the spirit of the act requires that it should.
Excluded from classification under paragraph 1 1 of the tariff act of
July 24, 1897, borate of manganèse, we think, should be classified
under paragraph 3 of the said act, as a chemical compound or salts not
specially provided for in the act.
The decree of the court below is reversed, and the case remanded to
that court, with directions to enter a decree in conformity with this
opinion.
UNITED STATES v. O'NEILL et al.
(Circuit Court of Appeals, Third Circuit May 2, 1904.)
No. 19.
CUSTOMS DUTIES— LlABILITY OF CONSIGNEES— UNATJTHORIZED SHIPMENT—
Meechandise not "Imported."
Certain merchants ordered for importation a quantity of merchandise
of a kind not subject to duty. In response to the order a shipment was
consigned to them of an article of a différent character, which was sub-
ject to a high rate of duty, and which they refused to accept or to make
themselves responsiblc for in any way. Held that there was no colora-
ble authority for the shipment of the merchandise, and that the con-
signées should not be consldered as having "imported" the merchandise
within the meaning of section 1, Customs Administrative Act of June
10, 1890, c. 407, 26 Stat. 131, 1 Supp. Rev. St. 744 [U. S. Comp. St. 1901,
p. 1886], providing that ail merchandise "Imported" Into the United
States shall for the purposes of the act "be deemed and held to be the
property of the person to whom the merchandise may be consigned."
SAME— CONSIGNMENT WITHOTIT CONSENT OF CONSIGNEE.
Where merchandise is shipped to parties in the United States, which
is of a différent character from that ordered, it Is a consignment made
without the consent of the consignées, within the meaning of article 1231.
Customs Régulations 1899, prescribing that, when the proceeds from the
sale of unclalmed merchandise are not sufficlent to pay the dutles and
other charges thereon, "the consignées are liable for such dutles, unlesy
it be sbown that the consignment was made without thelr consent"
910 129 FEDEEAL KBPOKTEE.
8. Same— Unatithorized Shipment— Obligation of Consigneb to Makk Bh-
TKT.
Where merchandlse Is shlpped to parties In the United States wlthout
thelr authorlty, they are under no obligation, In order to free themselves
from liability for duty, to make entry of the merchandlse or to take pos-
session of it for any purpose.
In Error to the District Court of the United States for the Eastem
District of Pennsylvania.
For décision below, see 123 Fed. 547. Note U. S. v. Bishop, 125
Fed. i8i, 6o C. C. A. 123.
Wm. M. Stewart and James B. HoUand, for plaintiff in error.
John G. Johnson, for défendants in error.
Before ACHESON, DALLAS, and GRAY, Circuit Judges.
GRAY, Circuit Judge. This was an action of assumpsit, brought
by the United States to recover a balance of customs duties, amount-
ing to $722.72, alleged to be due by the firm of O'Neill Bros., of the
city of Philadelphia. The case was tried before McPherson, J., with-
out a jury, in accordance with the provisions of section 639, Rev.
St. After hearing and argument, the learned judge directed judgment
to be entered in favor of the défendant upon his findings of fact and
law, as set out in his opinion, of which the following is a copy :
"Thls suit Is brought to recover a balance of tarlff duties for whlch the
défendants are alleged to be llable. The case having been tried by the court
wlthout a jury, I flnd the following facts :
"The défendants are merchants in the city of Philadelphia, and as part of
thelr business buy and sell cotton waste and woolen waste. Shortly before
October 1, 1899, they received a sample of cotton waste from the Kingston
Hoslery Company, dolng business In the Province of Ontario, and ordered
flfty baies to correspond with the sample. On October Ist the hoslery Com-
pany delivered to the Grand Trunk Rallway flfty baies of waste consigned
to 'J. D. Lewis, Suspension Bridge, Messrs. O'Neill Brothers, Philadelphia.'
This bill of lading was Indorsed by J. D. Lewis: 'Deliver to J. Mcl. Mc-
Niven.' When the goods arrived at Suspension Bridge, McNlven entered
them for consumptlon, declaring, among other thlngs, that 'to the best of
my knowledge and bellef, O'Neill Brothers, Philadelphia, Pa. are the owners
of thèse goods, wares, and merchandlse mentioned in the annexed entry.'
The baies were afterwards examined by a customs offlcer, who discovered
that four baies were nearly ail wool, and forty-slx baies were cotton and
wool mlxed, although mostly cotton. Ootton waste is admitted free of duty,
whlle woolen waste, or woolen and cotton mlxed, Is charged with a duty of
ten cents a pound. The net weight of thèse baies being eight thousand flve
hundred pounds, a duty of $850 was accordlngly imposed and payment was
demanded from the défendants. To this they replled that thelr order had
been given upon a sample that contalned nothlng but pure cotton, and that
if the baies which were shlpped contalned wool the hoslery company had sent
something that they had not ordered, and therefore that they dld not hold
themselves responslble for any'duty that might be collectlble upon the ship-
ment. The goods were stored by the customs authorities for more than a
year, and were then sold to enforce payment of the duty, producing the net
sum of $127.28, thus leaving an unpaid balance of $722.72, for which amount
the présent suit is brought. So far as appears from the évidence, neither
Lewis nor McNlven was an agent of the défendants, either gênerai or spécial,
and neither had any authorlty, express or implied, to enter the goods for
consumptlon. The défendants decUned to accept the baies, and paid no fur-
ther attention to the shipment They had not ordered the goods that were
UNITED STATES V. o'nEILL. 911
sent, and very properly refused to recelve them or to make themselves in any
way responsible for thelr eare or custody.
"Upon thèse facts, it seems to me that the défendants are not liable for the
balance of the duty. It is true that the act of 1890, 1 Supp. Rev. St. 744
[V. S. Comp. St. 1901, p. 1886], déclares that 'ail merchandise imported into
the United States shall, for the purpose of thls act, be deemed and held to
be the property of the person to whoni the merchandise may be consigned.'
It is also true that the bill of lading shows that the Grand Trunk Railway
named O'Nelll Brothers as the ultimate consignées of the merchandise. But
under the other facts, I do not think that the act should be so construed as
to embrace the présent défendants. They did not import thls merchandise
into the United States in the proper sensé of that word. They ordered an
entirely différent article from the hoslery Company, and, if that article had
been furnished, no doubt they would hâve been liable for the duty with which
the goods might hâve been properly chargeable. But I am unable to see
upon what ground they can be eharged for duty upon an article which they
neither bought, nor accepted, nor entered for consumption. The entry at the
custom house was not made by the défendants' agents, and they eannot be
held responsible for McNiven's unauthorized act. They disavowed it as soon
as they knew of it, and consistently refused to pay any further attention to
the goods. The government argues that they should hâve given the bond
provided by law and hâve withdrawn the goods for exportation to the hosiery
Company, but I eannot agrée that any such obligation was imposed upon the
défendants. On the contrary, as it seems to me, to hâve taken possession
of the goods for any purpose, might hâve been construed by the hosiery Com-
pany to be an acceptance, and, at ail events, would hâve exposed the défend-
ants to the hazard of a lawsuit upon that ground.
"In my opinion, they were fully justified in the course they foUowed. The
opinion of the Attorney General in 5 Treas. Dec. 244 (Dec. No. 23,606), does
not in any respect affect the question now belng considered. There the con-
signée received and entered the very tobaccos he had ordered, but because
the wrappers and Allers were improperly packed together, he was obliged to
pay a higher duty than would bave been otherwise chargeable. He had 'im-
ported' the goods and the law flxed him with liability. Hère, however, the
défendants did not order thèse goods to be sent into the United States, did
not enter them, and hâve never exereised any act of ownership over them.
In a word, the défendants did not 'import' the goods and never intended to
import them.
"I conclude, therefore, that the défendants are not liable for the amount
sued for, and that jndgment should be entered in their favor."
The plaintiff thereupon brought the case to this court on a writ of
error to the District Court. The questions raised by the assignments
of error, as stated by the District Attorney, are: (i) Were O'NeilI
Bros., under the facts as found by the court, the consigTiees of the 50
baies of waste in question? (2) If O'NeilI Bros, were the consignées,
was "the consignment made to them without their consent," within
the meaning of those words, as used in article 123 1 of the customs
régulations ?
The facts are found by the court and are not in dispute. What-
ever may be said in answer to the first question, as above stated, we
are clearly of opinion that if O'NeilI Bros, were the consignées, the
consignment was made to them without their consent, within the
meaning of those words, as used in article 1231 of the customs régu-
lations. That article provides that, "when the proceeds of any sale of
goods remaining unclaimed more than a year, are insufficient to pay
the charges and duties, the consignées are liable for such duties, unless
it be shown that the consignment was made without their consent."
This rule of the Secretary of the Treasury, for the practical admin-
912 129 FEDERAL KEPOETEE.
istration of the customs laws in this respect, promulgated under au-
thority conferred by law, is in accord with justice and common sensé.
The facts, as found by the court below, clearly show that this con-
signment of wool waste and mixed cotton and wool, was made with-
out the authority, express or implied, of the défendants in error. The
goods were not sent by the consignors in response to an order for the
same. What défendants in error ordered, was cotton waste, an ar-
ticle to be imported free of duty. The consignaient hère in ques-
tion was of wool waste and mixed cotton and wool, dutiable at lo cents
per pound. Such a shipment is as clearly made without the consent of
the consignée, as if no order for a différent article had been sent. The
facts found do not support the assertion, that the défendants in error
"ordered fifty baies of waste and they were forwarded fifty baies of
waste." The order of one article is not colorable authority for the
shipment of an entirely différent article, especially where the articles
ordered are on the free list, arid those shipped are dutiable. In such
case, the party to whom the shipment is made, is not bound, in order
to free himself from liability, to enter a bond for re-exportation of
the goods thus sent without authority. Such entry of bonds and re-
exportation would, as said by the court below, expose the party to lia-
bilities, both to the government and to the shippers, which he was
not obliged to assume. We are of opinion that the défendants in er-
ror in this case, on the facts found by the court below, are within
the exception to article 123 1 of the customs régulations above quoted,
it being clearly shown that the consignment in question "was made
without their consent."
The judgment of the court below is therefore afïîrmed.
liANÏON ZINC CO. et al. v. BROWN et aL
(Circuit Court of Appeals, Eighth Circuit. March 28, 1904.)
No. 2,014.
1. Patents— Infbingement—Obe Boasting Fuenace.
The Brown patent, No. 471,264, for an ore roasting furnace, claim 1,.
whlcti covers a furnace In wMch the mechanism for operating the rab-
bles for stlrring and advancing the ore is placed In a supplemental cham-
ber for the purpose of protecting It from the action of the beat, dust,
and fumes, Is Umlted by the words "supplemental chamber," and is not
infringed by the construction shown In the Oappeau patent. No. 691,112,
in which the furnace is supported by posts, and the rabble operating
mechanism is placed In the uninclosed space beneath.
Appeal from the Circuit Court of the United States for the District
of Kansas.
John H. Atwood and John R. Bennett (C. E. Benton, on the brief),
for appellants.
Douglas Dyrenforth, for appellees.
Before SANBORN and THAYER, Circuit Judges.
LANTON ZINC CX). V. BROWN. 91?.
THAYER, Circuit Judge. Thîs is an appeal from an order award-
ing an injunction which restrained the appellants from using ore roast-
ing furnaces made in accordance with the spécification of letters patent
No. 691,112, issued to Joseph P. Cappeau on January 14, 1902. This
order of injunction appears to hâve been made on a motion which was
filed in a proceeding that had been begun against the Lanyon Zinc Com-
pany and others to punish thera for an alleged violation of an order of
injunction previously obtained, which enjoined them from infringing
claim I of letters patent No. 471,264, issued to Horace F. Brown, one
of the appellees. In view of the manner in which the injunction was
obtained, certain questions of procédure are discussed in the briefs. On
the oral argument, however, it was agreed by counsel that ail questions
of procédure should be waived, and that the point to be determined
on appeal was whether an ore roasting furnace made in conformity
with the spécification ôf the Cappeau patent, such as the appellant is now
using, infringes the first claim of the Brown patent, which is owned by
the appellees.
The Brown patent has been before this court for construction on
several occasions. Thus in Metallic Extraction Co. v. Brown, 43 C. C.
A. 568, 104 Fed. 345, the patent was upheld, and it was decided that an
ore roasting furnace made in accordance with the spécification of letters
patent No. 532,013, issued to Alfred Ropp on January i, 1895, infringed
the first claim of the Brown patent; the same ruling was made in Lan-
yon Zinc Co. V. Brown et al., 53 C. C. A. 354, 115 Fed. 150; and the rul-
ing was repeated in Lanyon Zinc Co. v. Brown, 56 C. C. A. 448, 119
Fed. 918. The first claim of the Brown patent, that has been upheld in
the cases last cited, is as follows :
"In an ore roasting furnace having means for stlrrlng and advancing the
ore, a supplemental chamber at the side of the main roasting ehamber, and
eut off from sald main chamber by a wall or partition, and carriers In sald
supplemental chambers cc_nected with the stirrers, but removed from the
direct action of the beat, fumes, and dust, substantlally as hereln deserlbed."
Figures i and 2, which appear on the adjoining page, disclose the
method of constructing the Cappeau furnace. Referring to thèse fig-
ures — particularly figure i — it will be seen that the body of the fur-
nace is supported by pillars or iron posts set firmly in the ground ; the
space underneath the hearth being left open and uninclosed to permit
the free circulation of air from ail aides. The floor of the hearth has
a longitudinal slot through which a perpendicular arm or rod extends,
which rod or arm, at its lower end, is attached to a carrier that moves
on a track underneath the hearth. To the upper end of this rod a
crossbar is attached, from which the rabble arms dépend that serve to
stir the ore within the furnace as the carrier moves along the track. At
the ends of the furnace are swinging gâtes, which are opened by the
stirrer mechanism, and are closed by their own weight as socm as the
stirrers hâve passed.
The appellants contend that the Brown patent describes and claims a
"supplemental chamber eut off from the main chamber," that a supple-
mental chamber is one of the essential features of the invention covered
by that patent, and th... it is not found in the Cappeau furnace which
they are using. We entertain no doubt that, as claimed by the appel-
129 F.— 58
914
129 FEDERAL REPORTER.
lants, a supplemental chambér for the housing of the rabble opéra ting
mechanism constitutes an essential feature of the Brown furnace. It
was that novel method of constructing a furnace which entitled him to
a patent. The language of the Brown spécification, and particularly
the language of the first claim, leaves no room for doubt on that point.
Brown described the disastrous effect of the beat and fumes within the
furnace upon the mechanism which had previously been employed to stir
the ore within the oven and gradually move it to the end where it was
to be discharged. He also described a means whereby the difficulty
theretofore encountered could be overcome and had been overcome ; the
means described being the construction of a supplemental chamber eut
off from the main roasting chamber wherein the rabble operating mech-
anism could be placed, thereby removing it from the direct action of
beat ; and the means thus described he specifically claimed in his first
claim, thereby making the supplemental chamber the principal feature
of his furnace. In the case of Metallic Extraction Co. v. Brown, supra,
this court concluded, after a careful scrutiny of his spécification, that
Brown did not intend to make the location of the supplemental chamber
a material élément of his claim, although he had described it as located
at the side of the main roasting chamber. We accordingly held in that
case that the use of the Ropp furnace, which had a well-defined supple-
mental chamber underneath the hearth for housing the rabble operating
LANTON ZINC CO. V. BBOWN. 915
mechanism and protecting it from the beat, was an infringement of
claim one of the Brown patent.
The question to be determined on the présent appeal, therefore, is
whether the open and uninclosed space underneath the Cappeau furnace
can be held to be a supplemental chamber, within the fair intent and
meaning of those words as employed in the Brown patent. We are
of opinion that this question must be answered in the négative. The
space in question satisfies none of the définitions usually given of a
chamber. It is not a "room" or "an apartment" or "a cavity" or a
"closed space" of any sort. It is entirely uninclosed. In ordinary
speech, no one would think of describing the open space underneath the
Cappeau furnace, where the track is laid on which runs the carriage that
opérâtes the rabble arms, as a supplemental chamber, although the
words in question were aptly applied by Brown to describe the inclosed
space in bis furnace where the rabble operating mechanism is located.
It is an elementary rule that a patentée may claim the whole or a
part of what he has invented. He is entitled to limit his claims to any
extent that may seem désirable, but, having done so, his right to protec-
tion is also limited, since the claim actually made by the patentée is the
measure of his right to relief. McClain v. Ortmayer, 141 U. S. 419,
12 Sup. Ct. 76, 35 L. Ed. 800; Keystone Bridge Co. v. Phœnix Iron
Co., 95 U. S. 274, 278, 24 L. Ed. 344; White v. Dunbar, 119 U. S. 47,
51,7 Sup. Ct. 72, 30 L. Ed. 303. It may be that Brown, being the first
to place the rabble operating mechanism of a furnace outside of the
oven, might hâve formulated bis claims in such a manner as would hâve
covered the method of construction described in the Cappeau patent, but
he has not done so. He saw fit to place his rabble operating mechanism
not in an open and uninclosed space adjacent to the oven, but in a sup-
plemental chamber, and claimed the chamber as an élément of his com-
bination. Having done so, he is not entitled to relief against one who
does not employ a chamber in which to locate his mechanism for operat-
ing the rabble arms. The first claim of tiie Brown patent is entitled
to a fair and reasonable interprétation, but we cannot indulge in a
liberality of construction which ignores the ordinary meaning of words
and phrases, as we must do if we hold that an open and uninclosed space
is a chamber.
The decree of the lower court awarding an injunction restraining the
appellants from using the Cappeau furnace, and holding the use of that
furnace to be in violation of the existing injunction, is reversed, and
the cause is remanded with directions to dissolve the injunction which
was granted.
916 129 FEDERAL REPOKTEB.
MORTON TRUST CO. et al. v. AMERICAN CAR & FOUNDRT CO,
(Circuit Court of Appeals, Third Circuit May 13, 1904.)
No. 18.
1. Patents— Suit vor Infeingement— Pleadino.
Where a bill charges infrlDgement of a patent generally, In accordanee
with the approved practice, it may be construed to charge Infringement
of ail the claims; and, unless under very exeeptional cireumstances, the
complalnant cannot be required to amend by specifying the claims wltli
respect to whlch infringement is elaimed and the parts of defendaut's
structure whlch are elaimed to infringe.
Appeal from the Circuit Court of the United States for the District
of New Jersey.
For opinion below, see I2i Fed. 132.
John R. Bennett, for appellants.
Paul Bakewell, for appellee.
Before ACHESON, DALLAS, and GRAY, Circuit Judges.
ACHESON, Circuit Judge. This is an appeal from a decree in
equity dismissing the bill of complaint upon the ground that the plain-
tiffs had failed to comply with an order of the court requiring them
within 30 days to "specify the particular parts of the défendants' car or
car construction that are relied upon as infringements of the patent in
suit, and the several claims which they are alleged to infringe." The
suit was for the infringement of letters patent No. 584,709, for an "im-
provement in metallic cars," granted to Charles T. Schoen. In the in-
troductory part of the spécification are thèse statements :
"This invention relates, stated generally, to the construction of a railway
car, and, stated speciflcally, to the construction of a pressed steel hopper-
bottom car. The invention comprises a nuniber of détails of construction, such
as the under frame and its sills, the draft-gear, the body-bolster, the bottom,
the doors for the bottom, the supports for the bottom, the sides and ends, the
stakes and corner-posts, and other parts and combinations of parts, as herein-
after more particularly set forth and elaimed."
Then follows a detailed description of the invention. The claims are
28 in number.
The bill is in the usual form, and contains the usual allégations in
an infringement suit, and the usual prayers for relief. Infringement by
the défendant company is charged thus :
"And so It is, may it please your honors, that the said défendant, as your
orators are informed and believe, and therefore aver, well knowing the prom-
ises, and wlthout the license of your orators, against their wlll and in viola-
tion of their rights, and to their very great damage and Irréparable injury, has
manufactured, sold, and used metallic cars, and sold such cars to others to use,
substantially as set forth In the said letters patent No. 584,709, and elaimed
in the claims thereof, and that It has threatened and Intends to continue to
so manufacture, sell, and use, and sell to others to use, metallic cars embodylng
If 1. Pleading in patent infringement suits, see note to Caldwell v. Powell, 19
C. C. A. 595.
See Patents, vol. 38, Cent. Dig. § 511.
MORTON TRUST CO. T. AMERICAN CAR A FOUNDRT CO. OIT
the invention and method of the claims of the sald letters patent No. 584,709
within the United States, ail of which is in violation and Infringement of the
eaid letters patent No. 584,709, and of the claims thereof, and your orators'
rights in the preuaises."
The averment of infringement was clearly sufficient, according to
the approved practice in patent causes. 3 Robinson on Patents, p. 430,
§ 1106; Thatcher Heating Co. v. Carbon Stove Co., 4 Ban. & A. 68.
The défendant, however, presented to the court a pétition concluding
with the following motion:
"Défendant moves your honors to make an order in this cause requiring the
complainants, vs'ithin a time to be appointed by this court to amend their bill
of complaint In order to specify in and by the same the particular claim or
claims of said Schoen patent, No. 584,709, of June 15, 1897, v^ith respect to
which complainants charge infringement by the défendant in this cause, 'and
that, after complainants bave so amended their bill of complaint, défendant
hâve at least thirty days within which to file its answer or other pleading in
this cause; and défendant prays for such other and further order in the
premises as to this court may seem meet, and which may be in accordance
with the principles of equity and good conscience."
Thereupon the court made the order above mentioned. It will be
observed that in its order the court went beyond the defendant's spécifie
prayer, for it not only required the plaintififs to specify the several
claims which tliey alleged the défendant infringed, but also "the par-
ticular parts of the défendants' car or car construction that are relied
upon as infringements of the patent in suit."
In some rare instances where the cases seem to hâve been exceptional,
the plaintiff in an infringement suit has been required to specify in
limine the claims relied on, but there is no précèdent in this circuit for
such an order. Applications therefor were denied by the Circuit Court
for the Eastern District of Pennsylvania in Johnson v. Columbia Phono-
graph Co. and Johnson v. National Graphophone Co., 106 Fed. 319.
We are not convinced that in the présent case there are any spécial rea-
sons for a departure from the usual practice. Moreover, the charging
clause of this bill recited above, we think, imports infringement of ail the
claims of the patent in suit. The invention of this patent covers a num-
ber of détails of construction of the described railway car, and there
might well be infringement of ail the claims. As we hâve seen, how-
ever, the order made by the court below required the plaintifïs not only
to specify the several claims alleged to be infringed, but also the par-
ticular parts of the defendant's car or car construction that are relied
upon as infringements of the patent. In its scope the order goes be-
yond any précèdent known to us. Compliance with the order would
require definite knowledge of the defendant's car construction. It
does not appear, and we think it ought not to be presumed, that the
plaintiffs hâve had such an opportunity to inspect ail the parts of the
defendant's car as would enable them to specify the extent and char-
acfer of the defendant's infringement with the particularity enjoined by
the order. On the other hand, there is no hardship that we can see in
calling upon the défendant to answer the charge of infringement con-
tained in this bill. The défendant has before it, or is entitled to hâve
before it, the patent sued on, and upon an inspection of the patent can
see whether its construction is the same as or différent from that of the
OIS IZ) r::r>:;:;AL :;::ro:;rKu.
patent. We are far from satisfied that the trial of patent causes 'v ;j_:,!
Be expedited, or the records therein abbreviated, by the adoption of tiie
new practice contemplated by the order in question.
We cannot agrée with the contention of the appellee that the court
bas no jurisdiction of this appeal, and therefore should dismiss it. The
order complained of was not simply one of judicial discrétion. But f ur-
thermore the appeal is not from the interlocutory order, but from the
final decree of the court dismissing the bill for failure to comply with
the order.
The decree of the Circuit Court dismissing the bill of complaint is
reversed, and the cause is remanded to that court, with direction to re-
instate the bill, and for further proceedings thereon in conformity with
the views expressed in this opinion.
TOWER V. HOBBS.
(Circuit Court of Appeals, First Circuit May 5, 1904.)
No. 515.
1. Patents— Infringement—Penholdebs.
Tlie Tower patent. No. 378,223, for a penholder liaving a sleeve of cork
at its lower eud, held not Infringed.
Appeal from the Circuit Court of the United States for the District
of Massachusetts.
Anson M. Lyman (Walter S. Logan, on the brief), for appellant.
Marcellus Bailey (Aaron H. Latham, on the brief), for appellee.
Before PUTNAM, Circuit Judge, and BROWN and LOWELL,
District Judges.
LOWELL, District Judge. The question hère raised was decided by
the Circuit Court of Appeals for the Second Circuit in Tower v. Eagle
Pencil Co., 94 Fed. 361, 36 C. C. A. 294, Upon considération we find
no reason to differ from that court in its conclusion that a pen precisely
like the defendant's, hère in évidence, did not inf ringe the patent in suit.
Concerning the validity of that patent we express no opmion.
The decree of the Circuit Court is affirmed, and the appellee recovers
bis costs of appeal.
AMEEIOAN CHOCOLATE MACHINEKT 00. V. HELMSTETTEE. 919
AMERICAN CHOCOLATE MACHINERA CO. v. HBLMSTETTBR.
(Circuit Court, S. D, New York. March 14, 1904.)
1. Patents — Infringement — Machine foe Coating Confectioneet.
The Holmes patent, No. 492,205, for a machine for coating confection-
ery, clalm 1, covering a combination of a dipping mechanism with a
jarring devlce for removlng surplus coating from the drops, was not
anticlpated, and Is entitled to a libéral construction as embodying the
flrst successful automatic machine for coating cream cores with chocolaté,
and Is infringed by the machine of the Weelîs patent, No. 634,633.
2. Same— Chocolaté Dipping Trat.
The Gousset patent. No. 526,968, for a chocolaté dipper, claim 4, was
not anticipated, and is valid; also held infringed.
3. Same— Chocolaté Coating Machine.
The Walter patent. No. 533,974, for a chocolaté dipping or coating ma-
chine, claim 1, held infringed.
In Equity.
Charles C. Gill, for complainant,
Hector T. Fenton, for défendant.
COXE, Circuit Judge. This action is founded on three letters patent
for improvements in the confectionery art. They are as follows : No.
492,205, granted February 21, 1893, to Daniel M. Holmes; No. 526,-
968, granted October 2, 1894, to Cyprien Gousset and No. 533,974,
granted February 12, 1895, to William Walter.
The complainant is a New York corporation engaged in the manu-
facture and sale of machinery for making chocolaté confections and is
the owner of the patents in controversy. The défendant is engaged in
making chocolaté creams in the city of New York and, in such business,
uses apparatus alleged to infringe. Holmes seems to hâve been the first
person to produce a successful automatic machine for coating cream
cores with chocolaté. The portion of the machine in controversy relates
to mechanism whereby the cream cores are properly held in position,
dipped in the chocolaté solution, withdrawn therefrom and the surplus
chocolaté removed by means of a jarring action imparted to the hold-
ing frame or dipper. The first claim of the Holmes patent, the only
one involved, is as follows :
"In a machine of the character herein specifled, the combination with the
drop dipping mechanism, of a jarring device for removing surplus coating
material from the drops, substantially as shown and described."
This combination contains two éléments, first, a drop dipping mech-
anism, and, second, a jarring device for removing the surplus chocolaté ;
both éléments, of course, must be found in a machine for coating con-
fectionery as described and shown.
The jarring device is thus ref erred to in the spécification :
"As the dipping mechanism reaches Its hlghest point, the flnger Is no longer
held out of engagement with the ratchet, but, through the médium of the rod
and its connections is released permitting the ratchet to strike it, and tbe
hammers are caused to rapidly tap the upper portion of the connections to
the drop holder, thus causing the jarring off of the surplus coating, and this
jarring continues until the drops are nearly deposited upon the paper."
920 129 KEDEEAL REPORTEE.
It consists of a succession of sharp jars or shocks impartcd to tlie
holding tray by Iiammers moving vertically, se that tiie surplus chocolaté
is removed without injuring or marring the symmetry of the drop.
There is nothing in the prior art requiring a limitation of the claim
in any particular material to this controversy. The Stone patent, No.
371,990, for "improvements in holders and gages for paper cônes
while waterproofing them," is so obviously différent in mechanism and
purpose that it is unnecessary to discuss it. No one from a study of the
Stone patent would know how to construct an automatic power choco-
laté machine. The only other prior patent is No. 485,326, granted to
Holmes himself, for a hand machine designed to accomplis!! a resuit
similar to that of the patent in suit. It is, however, a crude and clunisy
device which never was and never can be used commercially. It is
enough to say that the "jarring device" of the présent patent is absent
and no équivalent is shown therefor. The rollers which are described
in the spécifications as "assisting the removal of the surplus chocolaté"
do not remove the surplus from the cream drops, but only such drip-
pings as may accumuîate upon the rollers by gravity or othervvise.
There is nothing in the mechanism of the first patent at ail comparable
to the mechanism of the combination of the first claim of the second
patent.
The défendant seeks to avoid infringement by placing unnecessary
limitations upon the claim. To paraphrase the language of the Suprême
Court it may be said that "Holmes, having been the first person who
succeeded in producing an automatic machine for coating chocolaté
cream drops is entitled to a libéral construction of the claims of his pat-
ent. He was not a mère improver upon a prior machine which was
capable of accomplishing the same gênerai resuit; in that case his
claims would properly receive a narrower interprétation." Sewing
Machine Co. v. Lancaster, 129 U. S. 263, 9 Sup. Ct. 299, 32 L. Ed.
715-
The defendant's machine is made under letters patent No. 634,633
granted to W. H. Weeks October 10, 1899. It is argued that the de-
fendant's jarring frame is not the "jarring device" of the claim. It cer-
tainly is not the exact apparatus shown and described by Holmes but
it accomplishes the same resuit in substantially the same way and only
differs in nonessential détails. The defendant's tray, fiUed with the
candy cores, is detachably hung on hooks of the dropping mechanism
which descends into the chocolaté solution and then rises until its up-
ward course is arrested by appropriate devices. The tray is then taken,
manually, from the hooks and moved laterally upon guides to the jar-
ring frame which is part of the same machine and is placed over a con-
tinuation of the vessel containing the solution. This frame is mounted
upon rods, the lower ends of which rest upon ratchet wheels which
are rotated from the main shaft and as the ends drop off the teeth of
the ratchets, a jarring motion is imparted to the tray and the superfluous
chocolaté is shaken ofï. In both the complainant's and defendant's
structures, the jarring motion is produced by ratchet wheels; in the
former by causing hammers to tap the tray and in the latter by causing
the tray to tap the hammers — for this is, in effect, what occurs when the
AMERICAN CHOCOLATE MACHINERT CD. V. HELMSTETTBB. 921
toothed vvheels revolve, causing the tray to rise and fall with great
rapidity. The two structures are clearly équivalents. There can be no
doubt that the défendant has, in his machine, a drop dipping mechanism
and a jarring device, and so infringes the claim in issue. It is truc
that for an instant the intervention of an attendant is necessary in pla-
cing the defendant's tray upon the jarring frame, but this frame and the
dipping mechanism are, nevertheless, in combination. The machine is
a unit. AU its parts co-operate to produce the desired resuit. For-
bush v. Cook, 2 Fish. Pat. Cas. 668, Fed. Cas. No. 4,931; Birdsall v.
McDonald, i Ban. & A. 165, Fed. Cas. No. 1,434; Hoffman v. Young
(C. C.) 2 Fed. 74- . .
Gousset's invention is an exceedingly simple one and relates solely
to improvements in that class of devices which are used for dipping
cream drops into a chocolaté solution so as to give them the desired ex-
terior chocolaté coating. The fourth claim, only, is involved and it
sufficiently described the invention, as follôws :
"A chocolaté dipper comprislng an open frame, a séries of parallel wires
Crossing the frame, and secured at their ends thereto, and a séries of cups
formed of a séries of serpentine or zig-zag wires crossing the frame and rest-
ing at their upward bends upon said cross wires, and the second séries of
serpentine or zig-zag wires at right angles to the first séries and having thoir
downward bends crossing the dowuward bends of the said first séries sub-
stantially as described."
It required ingenuity and skill to construct a basket which would
hold the creams while being coated and release them afterwards without
being disfigured. The basket patented in Germany to Reiche shovsfs an
entirely différent construction, virhich is obvious on comparison, and
nothing else in the art approaches the patented device as closely as does
the Reiche structure.
The defendant's tray is almost an exact reproduction of the Gousset
device, the only différence being that the défendant has introduced ad-
ditional heavy wires extending longitudinally and other immaterial
changes incident to the increase of thèse wires. That the défendant
has appropriated the essential features of the Gousset tray and those
upon which its successful opération dépends, there can be little doubt.
The patent to Walter is an exceedingly elaborate one and contains 18
claims, but the first claim only is involved and the structure therein
described is not at ail complicated or difficult to comprehend. The dis-
tinctive feature sought to be secured by this claim was the removal of a
large number of coated creams — amounting to several hundred — in a
séries of rows, from the tray. With this object in view the patentée
uses a tray, of the Gousset type, having an individual holding récepta-
cle for each core and mounts the tray on pivots so that it may be turn-
ed over, after having a receiving plate of equal dimensions placed upon
it, thus depositing the coated drops upon the plate. The first claim is as
follows :
"In a machine of tbe character described, the réceptacle to contain the coat
Ing substance, and the vertically movable tray reversibly mounted over said
réceptacle and adapted to hold the pièces to be coated, combined with means
for ralsing and lowering said tray, substantially as and for the purposes set
forth."
922 129 FEDERAL RBPOETEH.
The defendant's tray îs reversibly mounted precisely as in the Walter
structure but it is moved laterally, on the jarring frame, to its pivoted
supports before the reversing action takes place. In both machines the
tray is reversed over the réceptacle which contains the chocolaté solution,
and in both, the mechanisms which accomplish this resuit are intégral
parts of the machines.
It is thought, contrary to the impression formed at the argument,
that the defendant's pivoted reversing apparatus does not cease to be
part of this combination because of the change of position on the frame,
for the reasons stated in considering the combination of the Holmes
patent. The jarring frame is part of the combination and the reversing
apparatus is part of the jarring frame.
Thèse conclusions render it unnecessary to consider the effect of the
licenses granted to the défendant under the Walter and Gousset pat-
ents.
The complainant is entitled to the usual decree for an injunction and
an accounting.
In re LEEDS WOOLBN MILLS,
(District Court, W. D. Tennessee. April 22, 1904.)
1. BANKRTTPTCY— JUBISDICTION OF COUET— DETEEMINING ADVEESE OWNEESHIP
or Pbopeety.
The fact that property was In the actual possession of a bankrupt at
the time of thé filing of the pétition, and was by him surreiidered with
his other property to a reeeiver or custodian ad intérim appointed by the
court, places such property in custodia legis, and gives the court of bauk-
ruptcy jurisdiction to détermine its ownership as between the trustée
subsequently appointed and an adverse claimant; and such jurisdiction
is not affected by the fact that the reeeiver, acting without authority, sur-
rendered possession of the property to the claimant.
2. Same— Peopebty Weongfully Taken feom Custody of Couet.
One who has obtained possession of goods from a reeeiver appointed
by a court of bankruptcy, who had no authority to surrender the same,
by such intermeddling with property in the custody of the court submits
himself to Its jurisdiction for ail purposes properly connected with pro-
ceedings to compel him to restore the property or its value, and where he
has disposed of it, claiming to be the owner, the court may détermine the
question of ownership in the same proceeding as a matter afCecting the
propriety of entering a decree against him for its value.
3. Same— Adverse Claimant oi' Peoperty— Bueden of Peoof,
On the question whgther a shipment of goods to an insolvent eompany
a short time prior to its bankruptcy was pursuant to a sale, or vrhether
the transaction was such that the shipper remained the owner, he has the
burden of proof as against the trustée in bankruptcy, and his claim to
ownership will not be sustained unless he fully and fairly discloses ail
the facts bearing on the nature of the transaction, and such facts show
clearly that a sale was not intended at the time.
4. Same— Bailoes as Adveese Claimants.
Bailors permitting their goods, in the hands of an insolvent bailee be-
comiug bankrupt, to pass into the custody of the recelvers or trustées in
bankruptcy, cannot occupy the attitude of adverse claimants in determin-
ing the jurisdiction of the court.
o. Same— Saies— Retaining ïitle — How Deteemined.
The fact that a merchant stiips goods to a customer, but consigned to
himself, is not conclusive of a title reserved for future scrutinj •'>f the
IN RE LEEDS WOOLEN MILLS. 923
customer's flnancial condition, if there be other and equivocal facts tend-
ing to show an actual sale aud a resort to thls equivocal method for tlie
purpose of deuying a sale in case o£ bankruptcy. There must be good
faith, and no sinister design, in tbe transaction.
In Bankruptcy, On exceptions to master's report.
Pierson & Pierson, for exceptions.
D. W. De Haven, opposed.
HAMMOND, J. This pétition of the trustée against Hines for the
recovery of about $500 worth of goods received by him f rom the référée
in bankruptcy, acting as receiver or custodian of the property, has
been twice on référence before the standing master, and is before the
court again upon a second report sustaining the title of the trustée to the
goods. Objection is taken again to the jurisdiction of the court, that
question liaving been reserved from the beginning.
Both counsel seem under the misapprehension that it is necessary for
the court to décide the question of adverse ownership as one involved
in the question of jurisdiction. It is true, we are compelled to look at the
facts found in the record relating to the ownership in order to détermine
whether or not Hines was, at the time of the filing of this pétition, sub-
ject to the jurisdiction of this court, to entertain it against him; but
certainly the jurisdiction of the court does not dépend upon the fact
of an adverse daim of ownership, and we may hâve the jurisdiction
whether the goods belonged to him as an adverse claimant or not. The
very question is whether or not we can entertain the jurisdiction to
décide that controversy. The facts pertinent to the élément of juris-
diction are that at the time of the bankruptcy the goods in contro-
versy were in the actual manual possession of the bankrupt corpo-
ration and passed from it into the manual possession of the référée
as custodian, upon the surrender of thèse and ail the other goods to
him. In my judgment, the simple fact of this possession by the référée
in bankruptcy is conclusive in favor of our jurisdiction. By that pos-
session the goods were in custodia legis — whether rightfully or wrong-
fuUy is another question. But that question may be rightfully decided
by us. Whether it might also be rightfully decided by any other
jurisdiction it is not necessary to détermine. The bare possession by
the court, through its officer, of the property, was sufficient to give us
jurisdiction to détermine to whom the goods properly belonged. The
case belongs to the category of those controlled by the décision of the
Suprême Court of the United States in the case of White v. Schloerb,
178 U. S. 542, 20 Sup. Ct. 1007, 44 L. Ed. 1183, and not to that of those
controlled by the décision of that court in Bardes v. Hawarden Bank,
178 U. S. 524, 20 Sup. Ct. 1000, 44 L. Ed. 1175.
If it be a fact, upon the proof in this record, that the bankrupt held
the goods as a bailee of the rightful owner, and yet, through some mis-
apprehension, he surrendered them as his own to the bankruptcy re-
ceiver or trustée, or if he mixed them with his own goods and so sur-
rendered them along with his goods, nevertheless, if the bankruptcy
receiver or trustée deny title of the rightful owner and claim the prop-
erty as that of the bankrupt, it is a controversy which this court has the
plain jurisdiction to détermine; and that jurisdiction cannot be defeated
024 129 FBDBBAL BBFORTBR.
by the delîvery or surrender of the possession to the supposed rightful
owner by the receiver or référée in bankruptcy, whatever may "be said
upon that point as to such a surrender by the trustée in bankruptcy after
his appointment. The référée, as custodian or receiver, or a receiver
ad intérim, bas no title to the goods, and no right or authority to déter-
mine any question of title or ownership, and no right to make any sur-
render of the goods to any claimant, so as to bind the trustée when lie
is subsequently appointed, or those who are interested in the estate.
When the trustée is elected under the statute, he represents the title
and ownership of the goods, for the benefit of the estate, and it is net
impossible that if he should surrender them to a claimant, even under
a misapprehension as to the ownership or validity of the claim, the latter
would be such an adverse claimant as would bring the case within the
jurisdiction of the case of Bardes v. Hawarden Bank, supra. But this
cannot be the eiïect of a surrender by the référée holding goods under
our rule constituting him the custodian until a trustée is appointed in
cases of voluntary bankruptcy, nor by an ad intérim receiver otherwise
appointed until the trustée is elected. Therefore, when the défendant
Hines represented to the référée as the temporary receiver that he was
the owner of the goods, and persuaded him to accept his représentations
and deliver to him the two boxes of woolen stuffs as his own property,
he did not thereby become an adverse claimant in such a sensé as that he
is entitled to rely upon the rule of Bardes v. Hawarden Bank, supra.
On the contrary, he wrongfully took the goods from the possession of
the court, whether he was the rightful owner or not, and he can be, by
this court, compelled to restore that possession for the purposes of its
jurisdiction ; and the case stands as if the court had never been deprived
of its jurisdiction, and Hines were himself the petitioner, asking to hâve
the goods decreed to him upon the facts of this case. Bailees in posses-
tion of an insolvent's goods at the time of bankruptcy are not altogether
favored claimants, and they must expect such embarrassment as a con-
troversy arising with the trustée about the ownership of the property,
and must be willing to submit that controversy to the bankruptcy court,
if they permit their property to pass into its possession aiong with the
bankrupt's own goods. Our bankruptcy statute is not so drastic as the
English act, which passed the title to the trustée in bankruptcy of "ail
goods being, at the commencement of the bankruptcy, in the possession,
order or disposition of the bankrupt in his trade or business, by the
consent and permission of the true owner, under such circumstances
that he is the reputed owner thereof." Property so situated passed to
the trustée and creditors of the bankrupt upon the gênerai ground of
equity against one who allows a person to obtain the crédit that be-
longs to reputed ownership acquired by consent of the true owner, so
that, if one chooses to leave his property in the hands of an insolvent
who becomes bankrupt, he cannot complain if those who give the
bankrupt crédit upon the possession of the property shall be held to hâve
a better right to it than himself. Act of 1890, § 43 ; Williams' Bky.
175. This has long been a principle of English bankruptcy législation.
It has been mitigated somewhat by adjudications that discriminate in
favor of the unfortunate true owner, under particular circumstances
that show a better equity than the creditors may hâve under the gênerai
IN BE LEEDS WOOLEN MILLS. 925
rule. I call attention to this principle for the purpose of showing that,
notwithstanding- our bankruptcy act does net go so far as the English
act, it does not lie in the mouth of a bailor whose goods are, by his con-
sent, in the possession of an insolvent bailee who becomes bankrupt,
to set up any objections to the jurisdiction of the court of bankruptcy
to détermine the ownership, if he permits the goods to pass into the
possession of the officiais, receivers, or trustées of the bankruptcy ad-
ministration. He, probably, of ail claimants, can least expect to hâve
the advantage of being an "adverse claimant" in the sensé of Bardes
V. Hawarden Bank, supra. Certainly, if he reacquires possession by
représentations made to the receiver, who has no authority to deliver
such possession nor to détermine any question of title, he will not be
allowed to take advantage of that recovered possession, although he
may, in fact, be the rightful owner.
The case of In re Bender (D. C.) io6 Fed. 873, is very much in point
in favor of the ruling we make hère, though it présents the question
in a somewhat différent aspect. There the marshal seized the prop-
erty in possession of the bankrupt vmder a writ issued by the bank-
ruptcy court, upon the pétition of creditors, after a voluntary adjudi-
cation. A claimant set up that the bankrupt was in possession only as
his agent, and that the property really belonged to him, and he asked
the court, upon a summary motion, to deliver the property to him, which
the court refused upon the ground that it had no jurisdiction by a
summary proceeding to settle the question of title ; that, if the claim-
ant choose to come in and submit to the jurisdiction of the bankruptcy
court, it had jurisdiction to settle that title, but, if not, he could not be
compelled to do so. It was not decided that the trustée could, by a
pétition against the rightful claimant, hâve invoked the jurisdiction of
the bankruptcy court to settle the title, but the possession of the court
was protected until the question of title was settled by a refusai to sur-
render it to the alleged rightful owner. If, however, that rightful own-
er had, by some arrangement with the receiver or the marshal, secured
a surrender of the property to him, could there hâve been any doubt
about the power of the court to compel him to replace it in the posses-
sion of the marshal ? White v. Schloerb, supra. And that is, in légal
effect, the purpose of this pétition. With that jurisdiction goes, in
my judgment, the power to détermine the whole controversy.
One who meddles with the possession of the court by ousting it in
any unauthorized way thereby necessarily submits himself to the juris-
diction of that court for ail the purposes of making right that which
has been done wrongfully by him. If he cannot restore in kind the
very goods he has taken away, he must pay their value, and it would
seem/ idle that a court of equity having jurisdiction for that purpose
should find itself unable to détermine the rightful ownership and set-
tle the whole controversy. It is a familiar principle that courts of
equity claim that right. -It is true that in White v. Schloerb, supra,
the bankruptcy court had not undertaken to détermine the title to the
property, but had specifically required the proceeds of sale to be kept
separate and apart to abide the further order of the court ; and the
Suprême Court was careful not to go beyond the question certified to
it, and reserved any opinion as to the right of the bankruptcy court
926 129 FEDERAL EEPOETEE.
to settle the question of title, and only decided that it bad the jurisdic-
tion to compel a return of the property. In that case the goods had
not been sold or disposed of by the wrongdoer, and his sale of them
was restriained, and he was compelled to deUver them to the trustée,
who sold the goods, and the court directed him to set apart the price
until by proper proceeding ail question of title was settled. Each case
may dépend upon its own circumstances, and since hère the wrong-
doer is not in a condition to restore the goods, and has appropriated
them to his own use, restoration cannot be made without a decree
against him for their value, and of course the court should not give
a decree against him for their value if the goods belonged to him.
There seems no reason for taking tvi'o judicial bites at this one cherry,
and I feel quite sure that the case falls within the rule that an equity
court having jurisdiction for the purpose indicated will complète the
adjudication by finally determining it. i Fonbl. Eq. § 3 ; Story's Eq.
Jur. 64 (k); I Pom. Eq. § 237; i Fost. Fed. Pr. 2; Id. 28, 234; Tay-
loe V. Merchants' Ins. Co., 9 How. 390, 405, 13 E. Ed. 187 ; Ober v.
Gallagher, 93 U. S. 199, 206, 23 L. Ed. 829; Ward v. Todd, 103 U.
S. 327, 26 L. Ed. 339; Sunflower Oil Co. v. Wilson, 142 U. S. 313,
324 (3), 12 Sup. Ct. 235, 35 L. Ed. 1025 ; Earoes v. Home Ins. Co.,
94 U. S. 621, 630, 24 L. Ed. 298.
An instructive case is that of The Eliza Lines, 114 Fed. 307, 315, 52
C. C. A. 195, where it is said that, the court having acquired jurisdic-
tion of the subject-matter of the controversy, one who had intervened
to interrupt the proceedings submitted himself to the jurisdiction of
the court for ail purposes, as well tho«e which were incidental and
auxiliary to the proceedings as the others, and it had a right to settle
ail the controversies and conséquences which followed naturally and
reasonably from their interruption of the prosecution of the voyage
of the ships and their interruption in respect to the adjustment of the
varions rights in the vessel and lier cargo. See, also, Centervill v.
Fidelity Tr. Co., 118 Fed. 332, 337, 55 C. C. A. 348; Barrett v. Twin
City Co. (C. C.) 118 Fed. 86r, 865 ; Fidelity Tr. Co. v. Fowler Water
Co. (C. C.) 113 Fed. 566, 571; Union Cent. Life Ins. Co. v. Phillips,
102 Fed. 19, 24, 41 C. C. A. 263 ; Old Colony Tr. Co. v. Dubuque
Light Co. (C. C.) 89 Fed. 794, 810; Springfield Mill. Co. v. Barnard
& Leas Co., 81 Fed. 261, 265, 26 C. C. A. 389; 111. Cent. Tr. Co. v.
Arkansas City, 76 Fed. 271, 288, 22 C. C. A. 171, 34 L. R. A. 518;
Western Assur. Co. v. Ward, 75 Fed. 338, 341, 21 C. C. A. 378; Fit-
ton v. Phœnix Ins. Co. (C. C.) 25 Fed. 880, 881 ; Berry v. Ginaca
(C. C.) 5 Fed. 475, 481. The limitation upon this doctrine in its rela-
tion to the fédéral courts found in the case of Byers v. McAuley, 149
U. S. 608, 13 Sup. Ct. 906, 37 L. Ed. 867 — a limitation as to which two
of the judges dissented in that case even — has no application to a case
like this. There the jurisdiction failed as to some of the parties be-
cause it was a case of which the fédéral court-could not obtain jurisdic-
tion at ail. Hère it is plain that the only obstacle to our jurisdiction,
if any, is that contained in the spécial provisions of the bankruptcy
statute. Even those limitations hâve been eHminated by the amend-
ment to the bankruptcy statute, approved February 5, 1903 (chapter
487, §§ 8, 16, 32 Stat. 798, 800 [U. S. Comp. St. Supp. 1903, pp. 413,
IN RE LEEDS WOOLEN MILLS. 927
417]) amending sections 23b, 6rj&, and 70e (Act July l, 1898, c. 541,
30 Stat. 552, 564, 566 [U. S. Comp. St. 1901, pp. 3431» 3449. 3452]},
so that now there will be no sort of doubt of our jurisdiction of this
controversy, were it not for section 19 of the amended act (32 Stat.
801), wliich prohibits its application to cases then pending, this suit
being brought before the amendment was passed. But the existence
of the jurisdiction under the amended act shows conclusively that this
case does not fall within the exception of Byers v. McAuley, supra, the
subject-matter of which controversy, so far as it was rejected by the
Suprême Court, could not possibly corne within the fédéral jurisdic-
tion.
The case of Beach v. Maçon Grocery Co., 116 Fed. 143, 53 C. C.
A. 463, was one in which the receiver in an involuntary case of bank-
ruptcy pending adjudication took control of property in the adverse
possession of another, claiming it as her own, and sold it under the
orders of the bankruptcy court. The Court of Appeals held that this
part of the proceeding was wrongful, and the court was without juris-
diction, except to hâve enjoined the adverse claimant from making
any disposition of the property until a trustée was appointed. It di-
rected the money realized at the sale to be returned to her, to be held,
however, in lieu of the property, without préjudice to the rights of the
trustée tOi take such proceedings as would settle the ownership of the
property. Evidently that was a case .almost the converse of this.
In re Winship Co., 120 Fed. 93, 56 C. C. A. 45, was a somewhat
peculiar controversy. Property went into the hands of the receiver,
pending an adjudication upon an involuntary pétition, being in the
possession of the insolvent défendant at the time the receiver was ap-
pointed. Claimlants who had leased the property to the bankrupt
asked to hâve it returned under the termis of the lease. It was deter-»
rained, upon the proof, that the transaction was really a sale and not a
lease to the bankrupt, and thereupon the court ordered the receiver to
settle, which was done, and the money paid into the registry of the
court, but with a stipulation that the purchaser should return the
property if the court should ultimately hold that it belonged to the
alleged lessor. Before any final détermination of this question the
insolvent debtor made a composition with his creditors and paid the
composition money into court, and creditors were paid according to
its terms, leaving a balance, however, to represent the purchase mon-
ey of the printing presses, the property in controversy. The Court
of Appeals declined to décide some of the questions arising on this
state of facts, and held that, the bankruptcy proceedings having been
compromised, the property was to be returned to the alleged lessor by
the purchaser, unless the lessor should choose to confirmi the sale and
take the money. The jurisdiction of the court to make this decree
was put upon the distinct ground that property in custodia legis,
whether the court be one of common law or equity or admiralty or
bankruptcy, has the power to restore that possession to whomsoever
it rightfully belongs. The receiver in the case was a mère caretaker,
having no title, and was in no proper sensé a trustée in bankruptcy
with the powers conferred by the statute upon that fîduciary. The
pertinency of the case is that it sustains in the most positive way the
928 129 FEDERAL REPORTER.
jurisdiction of the bankruptcy court to deal with the right of prcperty
and settle it between the parties whenëver it cornes into the posses-
sion of the res itself, as it did in the case we hâve in hand.
The case of Mueller v. Nugent, 184 U. S. i, 22 Sup. Ct. 269, 46 I-
Ed. 405 (same case, 105 Fed. 581, 44 C. C. A. 620, and Wayne Knit-
ting Mills V. Nugent [D. C] 104 Fed. 530), which so strongly rein-
forces the case of White v. Schloerb, supra, and makes the distinction
between that case and Bardes v. Hawarden Bank, supra, which we
are now making, supports our jurisdiction in this case. Among other
things it was held in that case that an order to pay over the money was
not an order for the payment of the debt, but an order for the surren-
der of the assets of the bankrupt which had been placed in custodia
legis by the adjudication, just as in this case, although we may give
a judgmicnt against Hines for the amount and the value of the goods,
we are, in effect, only compelling him to restore to the trustée in bank-
ruptcy that which properly belonged to him, and which Hines had
wrongfully taken from the custody of the receiver and the court. It is
in no sensé the adjudication summarily of the title as against one
claiming adversely, but compelling one who has taken wrongful pos-
session from the court to restore that possession, without respect to his
title or his right; and, as an incident to that authority, we hâve full
jurisdiction to détermine the whole controversy, necessarily including
the title or rightful ownership. The proposition is broadly laid down in
Re Antigo Screen Door Co.,133 Fed. 249, 59 C. C. A. 348, that authority
to détermine the right to a fund in the possession of the court belongs
exclusively to^ that court, and is incident to the jurisdiction of every
court. But it must be kept in mind that this authority accompanies
the property that is in custodia legis whenëver it is, without consent
of the court, taken into the possession of another. One holding such
possession can take no advantage of it. The property is still, not-
withstanding his interférence and interposed possession, in contem-
plation of law in the possession of the court, which is the condition we
find in this case.
In Re Kellogg, 121 Fed. 333, 57 C. C. A. 547, Id. (D. C.) 113 Fed.
120, jurisdiction is placed upon the safe ground that, if the trustée is in
the actual possession of the property, the right of the court of bank-
ruptcy, even before the amendment of 1903, to settle the question of
title, is an incident to that possession ; but if the adverse claimant
is in possession, and the trustée must bring the suit, Bardes v. Haward-
en, supra, applies, and without the consent of the adverse claimant
the bankruptcy court cannot acquire jurisdiction. But hère again I
must call attention to the fact that this judgment proceeds upon the
theory that although Hines got the actual possession by an arrangement
which the receiver had no right to make, the technical légal possession
remained with the court through its receiver, and passed to the trustée,
whereby this case stands as if that technical légal possession had never
been disturbed by Hines and his arrangement with the receiver. In re
Gutman (D. C.) 114 Fed. 1009, is quite directly in point. The day
after a receiver had been appointed, property at that time in the posses-
sion of the bankrupt was taken from him by a mortgagee, who claimed
tlie right to possession under the terms of his mortgage. The court
IN EE LBEDS WOOLEN MILLS. 929
held that this tnortgagee did not obtain légal possession of the chat-
tels by that act, but the right of possession passed to the trustée from
the bankrupt, and was ail the time constructively in the possession of
the court when the mortgagee's wrongfui possession was obtained.
The mortgagee therefore had no right of action in the state court
against the trustée, and such action was enjoined. In re Whitener.
105 Fed. 180, 44 C. C. A. 434, is another case quite nearly in point.
There the bankrupt was in possession of a livery stable, consisting of
the real estate and other property related thereto. He did not put this
property in his schedules, to which his creditors objected, showing
that it belonged to him, and he was directed to deliver it to the trustée,
which ultimately he did, although he earnestly protested that the
property did not belong to him, but to another whose agent he was.
The claimant filed his pétition in the bankruptcy court to hâve the prop-
erty restored to him, which was refused, whereupon he applied to the
State court for necessary process against the trustée under the theory
of Bardes v. Hawarden Bank, that he was an adverse claimant as
against the property in the possession of the trustée, and the state court
directed the sherifï to put him in possession, which was donc. There-
upon the bankruptcy court, upon the pétition of the trustée, enjoined
the proceedings in the state court, and compelled the redelivery of the
property to the trustée, and the jurisdiction of the bankruptcy court
to do this was approved in the opinion of the Court of Appeals, al-
though the proceeding there seems to hâve been dismissed. In re Cor-
bett (D. C.) 104 Fed. 872, is another case where the goods, having been
removed by claimant after adjudication in bankruptcy and while they
were in custodia legis, were restored to the trustée — ultimately, I take
it, by a judgment for their value against the attorney who removed them
for his fee, though that does not appear in the report. In re Gibbs
(D. C.) 103 Fed. 782, is a case where it was held that the actual "occu-
pation at the time of adjudication" gives the bankruptcy court juris-
diction to détermine a controversy about the property.
I think it may be affirmed upon ail the cases that the question of the
jurisdiction of the bankruptcy court dépends upon the possession of
the bankrupt at the time of the filing of the pétition. Whether he was
the real or qualified owner, or held it in some other capacity, the bare
possession by him gives the bankruptcy court jurisdiction, particularly
if that possession passes into the hands of the officiai administrators of
the bankruptcy court, such as receivers, either temporary or ad intérim,
or trustées.
Having thus determined that we hâve the jurisdiction which has
been so strenuously denied by the learned counsel for the défendant
Hines from the very inception of this controversy, it only remains to
détermine to whom the property really belonged — whether to him or to
the bankrupt corporation. That is purely a question of fact, and the
court is entirely satisfied with the détermination of it by the standing
master in chancery, who reports that the property belonged to the
bankrupt corporation, and not to Hines. AU exceptions to his report
are overruled. There is little difficulty in understanding the law of
sales applicable to the facts of this case as reported by the master, or
129 F.— 59
930 129 FEDERAL EEPOETBR.
as shown by the évidence sent up by him with his report, upon whidi
his findings are based ; but it bas required a nice discrimination as to
the application of the law of sales to the particular facts of this trans-
action, and the court is well satisfied with the treatment of the testi-
mony by the master in working eut bis conclusions that there was a sale
to the bankrupt corporation, and that the goods belonged to it. It is
not necessary to repeat hère the findings of the master in respect of this,
but only to say that he bases his conclusion against the significance of
the almost sole fact in favor of Hines, namely, that he shipped the goods
consigned to himself in the care of the bankrupt corporation, and that
the packages were so delivered, upon other facts appearing în the case
which show either that this was a device by Hines to protect himself
against what he intended to be a real sale, or that it was subsequently
converted into an actual sale by the occurrences in the transaction.
Hines does not présent, in his testimony, that frankness of disclosure
and full information which would strengthen his credibility, and there
is some appearance of disingenuousness ail through it. For one thing,
he does not produce, nor satisfactorily account for the absence of, the
letters which accompanied the invoices sent to the consignée. I think
it may be agreed that the counsel for the trustée did not press him for
information as to the contents of those letters in such a way as ought
to bave been donc; still he was called upon to produce ail his papers,
and thèse he did not produce, and gave no reason for it. The failure
of the bankruptcy trustée to produce them, or of the bankrupt to pro-
duce them, is accounted for by the fact that they were loosely thrown
away or mislaid in the confusion attending the bankruptcy and transfer
of possession. Those letters undoubtedly would show precisely what
was in Hines' mind when he sent the two boxes of woolen stuffs in his
own name to himself as the consignée, but in the care of the bankrupt
concern. That which the management did upon the receipt of the
goods shows that they understood it to be a sale, and indicates that they
received that impression from the accompanying letters, or from them
and the circumstances of their dealing with Hines. It must be con-
ceded that their impression of the transaction, and even their conduct
in relation to it, cannot, of itself, bind Hines as to his intention in send-
ing the goods ; but if he fails to produce the letters sent at the time, and
subsequently asserts that his intention was not to make a sale, but to
place the goods in the care of the Company until he could afterwards
deal with them, the assertion is not so strong as if he should produce
the letters in confirmation of it. In the ordinary course of business the
letters ought to show precisely how the fact was, and the want of them
will be taken most strongly against Hines. Again, the fact that the
manager of the business of the corporation, after the receipt of the
goods and after dealing with them as if they had been sold to the con-
cern, changed his mind, and, on the advice of a lawyer, concluded that
the fact that they had been sent consigned to Hines himself was con-
clusive against the company's right to them, is not binding on the trustée
in bankruptcy. This testimony of the manager is subject to some scru-
tiny, if not suspicion, when we consider the fact that immediately after
the bankruptcy, and upon his statement, the goods were surrendered
by the référée as receiver to Hines, and tliis same manager immediately
IN EE LEEDS WOOLEN MILLS. 931
went into possession of the goods as a partner of Hines in a new firm
doing the same business after the bankruptcy.
Another circumstance upon which the master somewhat confidently
rehes, and the court thinks fairly and justly, is the fact that, according
to the custom of the trade in such goods, four yards of each boit of
woolens for tailoring purposes is eut off and sent outside of the pack-
ages containing the goods themselves to the purchaser, for the pur-
pose of display and as a sajmple, for use in selling to customers. In this
transaction this custom was followed, and the four-yard samples were
sent to the consignée without any restrictions or instructions as to their
use, and were immediately displayed and used as samples of goods be-
longing to the stock of the company; while, if the transaction had
been such as Hines now contends it was, naturally and in the ordinary
course of business he would not hâve eut off such samples, but would
hâve packed ail the bolts of cloth uncut in the shipping packages.
There could hâve been no purpose in sending samples if there was
no sale, but only a contemplation of a sale at some future time. It
is on such circumstances as thèse that the master finds the fact against
Hines, and I think correctly. There are many other circumstances in
the proof that point in this direction, but it is hardly necessary to call
attention to them hère. It may be said in favor of Hines that he un-
doubtedly had suspicion of the ability of the company to pay for thèse
goods, and it certainly would hâve been within his right to hold the
title by consigning them to himself and awaiting developments ;
but even in that view it would bave been more prudent and accord-
ing to ordinary dealings to hâve consigned them in the care of
someone else tlian the proposed purchasers, though there is no dif-
ficulty in consigning them to such proposed purchaser if it be done
for the purpose of retaining the title and ownership until a future time,
and it might be convenient to adopt that course. Hines testified that
he did it for this convenience, and, because of his suspicion that they
would not be able to pay for the goods, he desired to retain control of
them until he could come to Memphis to see if it was safe to sell them
to thèse parties. But, after ail, he left his goods unreasonably in their
hands, under circumstances leading them to believe that there had been
a sale to them, and which were equivocal in their indications, notwith-
standing the main fact that he did consign the goods to himself in their
care. He had had previous dealings with them for the sale of goods,
and they owed him a considérable sum when the bankruptcy occurred ;
but, at last, his claim of title dépends almost entirely upon his assertion
of an intention not to sell on this occasion, and the one fact that he did
consign them in the unusual manner already stated. The master found
that this fact and his testimony as to his intention were overborne by
the accompanying circumstances that militate against him, and the
court is not disposed to disturb that finding.
There is another controlling considération in reaching this judgment.
We know from judicial expérience in the administration of the bank-
ruptcy statute, and from the numerous cases arising in thé bankruptcy
courts everywhere, that there is a tendency on the part of sellers of
merchandise to protect themselves against the possible bankruptcy ot
their customers by equivocal devices which will enable them to claim
932 129 FEDERAL REPORTEE.
a sale if the customer goes through the pending difficulties safely, but
to claim ownership if he fails and becomes bankrupt. Resort is had
oftentimes to undeniable and effective conditional sales and rétention
of the title, with similar methods of dealing to that we hâve hère and
with réservations appropriate to that kind of security, but sometimes it
is not convenient or désirable to take the effective way of retaining title
or making conditional sales, and yet the désire is to give to the trans-
action that false appearance, so as to meet possible emergencies. There-
fore, in my judgment it is the duty of the bankruptcy courts to scruti-
nize such transactions with the utmost care, and protect the assets of
bankrupts against invasions that may corne by dubious dealings in
business ; and I think the rule of law is established that the seller must
show the utmost good faith in the transaction, and the burden is upon
him to establish the fact by a prépondérance of the testimony that he
remains an owner, and did not become a seller and creditor. The
courts cannot allow him to shift his position from creditor to owner
upon any except the clearest prooi of such self-protection, made in
good faith at the inception of the dealing, and not conceived after-
wards for the purpose of escaping the results of a bad bargain.
Exceptions overruled.
RODGERS V. PITT et al
(Circuit Court, D. Nevada. April 4, 1904.)
No. 658.
1. Wateb Rights— Suit to Enjoin Diversion of Water— Parties.
A number of owners in common of a dam flume and irrigating ditch,
wlio by agreement dlvide tbe waters flowing in tbe dltch between them,
are tenants in common of the water rights, and one may alone maintaln
a suit to enjoin the diversion by a subséquent appropriator of any por-
tion of the water to which he or either of lais co-tenants is entitled.
2. Res Judicata— Inteblocutoey Decbee— Questions Reviewable on Fi-
nal Hbaring.
Ail questions decided on a motion for a preliminary injunction are
open for revlew on the final hearlng, but the prier décision should be
adhered to unless additional facts appear which require its modification
or reversai, or it clearly appears that an error was committed.
H. Water Rights— Appropriation of Wateb— Estent of Right Acquired.
To establish an appropriation of water from a stream, the proof must
show an intent to apply it to a bénéficiai use existing at the time, an
actual diversion from the stream, and the application of it to such béné-
ficiai use ; but the right is not limited to the amount of water used at
the time the appropriation Is made, but extends to such other and further
amount within the capaclty of the appropriator's ditch as may be re-
quired for the future improvement and extended cultivation of his lands
for which the appropriation was made, his intention, and the object and
purpose for which it was made, and his acts in carrying out such pur-
pose, being taken Into considération.
* Same— Diligence in Appi,ying to Beneficial Use.
To entitle an appropriator of water to claim his rights therein by re^
iation to the time when the appropriation was made, he must bave pros-
% 2. See Injunction, vol. 27, Cent. Dig. § 341.
KODGEES V. PITT. 933
ecTited the work necessary to apply It to the bénéficiai use Intended with
reasonable diligence ; what eonstitutes such diligence being a matter
dependlug on the facts in each partlcular case.
6. Same— Pbepaeing Land for Iebigation.
The fact tbat, at the time a complainant made an appropriation of
water from a stream for irrigating purposes, the land intended to be
Irrigated was swamp and unflt for cultivation, does net affect hls right
to the water appropriated, as against a défendant whose appropriation
was not made until complainant had drained his land, put it in cultiva-
tion, and applied the water to its irrigation.
6. Samb.
An appropriator of water from a stream for Irrigating purposes is
not conflned to the amount of water he used, or to the amount of land
he irrigated during certain dry seasons when there was not sufficlent
water to irrigate ail his land or as much as he had previously irrigated.
7. Same— Beneficial Use— Ibkiqation of Wild Hay Land.
ïhe use of water to irrigate wild grass land for the purpose of pro-
ducing hay or pasturage is a bénéficiai one, and one who, year after
year, conducts water from a stream onto his land for such purpose in
such quantity as to be effective, thereby acquires the right to the use
of sutficient water to irrigate such land.
8. Same— Mannee of Use— Custom.
In determining the amount of water which a user applies to a béné-
ficiai use, and to which he is entitled as against a subséquent appropri-
ator, the System of irrigation in common use in the locality, if reasonable
and proper under existing conditions, is to be taken as the standard, al-
though a more economical method might be adopted.
In Equity. Suit to enjoin the diversion of water from a stream.
On final hearing.
Since the submission of this cause the original complainant, Arthur Rod-
gers, died, and the suit has been revived in favor of the executris of his
will, but the références will be made to the original parties to the suit.
There is no case made ont against the défendant the Lovelock Mill Com-
pany, and it should be dismissed from the case.
The lands of the défendants are situated in the upper part of Lovelock
Valley ; the lands of complainant, Rodgers, and of Thies and Carpenter, are
situated in the lower part of the valley.
There is a long history connected with the rights of the predecessors In
interest of the complainant to the land and water obtained by them prior
to the time when défendants acquired their rights to the waters of the Hum-
boldt river. Hundreda of pages of typewritten testimony give the facts in
relation thereto. It would serve no useful purpose to enter into any minute
détail of the facts as shown by the undisputed testimony. Suflice it to say,
that in 1875 P. N. Marlier commenced purchasing land in Lovelock Valley.
At this time there were several Irrigating dltches in use on other lands owned
by other parties. Thèse lands and the water rights appurtenant thereto
were acquired by the Markers, and ail the lands described in the complain-
ant's bill in this case were owned by them before the fall of 1888. In addi-
tion to the varions ditches above mentioned, two new appropriations of wa-
ter were made in 1875, viz., The Farmers' ditch and the Markers' ditch,
claiming 15,000 Inches of the water flowing in the Humboldt river, and the
work on thèse ditches was proseeuted with reasonable diligence. When the
Markers first acquired their rights to the land, most of the land vi^as cov-
ered hère and there with sloughs, with the natural water flowing in the
Humboldt river. At the time the Markers went upon the land no grain or
alfalfa was raised in Lovelock Valley. The irrigation was principally used
upon wild land for pasturage and for hay, that the natural grasses could
be made to produce. There was no scarcity of water for irrigation on the
Markers' lands prior to the time of défendants' appropriation of the surplus
waters. The flume in the Marker ditch, upon which much testimony was
934 129 FEDERAL EEPOETEE.
given on both sides, would at that tlme carry ail the water that the Marker
ditch coiild bring to it, and the ditches below the flume were o£ sufflcient
size and capacity to carry ail the water which the Marker ditch above the
flume diverted from the river.
There is more or less conflict in the testimony of the witnesses, and a
decided controversy In the briefs of the respective counsel, as to the capacity
of the Marker ditch and flume. L. H. Taylor, a civil engineer, introduced
by the défendants, testifled that the carrying capacity of the ditch in 1898
was a little less than 7,000 miner's inches, and that the capacity of the
flume was established by hlm at that time to be 11,500 inches, and that the
flume actually showed a high-water mark of 7,175 inches. In 1901 he esti-
inated the capacity of the ditch, before the banks were raised, to be 5,310
inches. Thurtell, the expert on behalf of complainant, testifled that 9,000
inches would be a conservative estimate of the capacity of the ditch, and
that the capacity of the flume when fllled to a depth of three feet, with a
free discharge, is about 12,000 Inches. In making their measurements Tay-
lor and Thurtell used the same coefficient of friction, and each took into con-
sidération, in his estimâtes of the capacity of the ditch, "the willows growing
along the ditch." The measurements of thèse experts were not based on
the conditions existing at the time of trial. Thurtell, upon his cross-exam-
inatlon, said: "The carrying capacity of that ditch is based, not upon the
carrying capacity of the ditch at présent, but as it was within Its old banks
before the levée was thrown up. * * * My estimate was based on what
the ditch would carry before It was leveed up."
There was as much land irrigated on the complainant's lands prior to 1888
as bas been irrigated since, but not as much land cultivated for crops of
grain and alfalfa; more land being used and cultivated in the earlier years
for pasture and grass, and less for crops, than in the later years. At the
time this suit was brought, in 1898, the amount of land cultivated in grain
and alfalfa on complainant's land was 2,127 acres, on the Carpenter land
976 acres, and on the Thies land 544 acres, making a total of 3,647 acres.
In 1896 over 1,200 acres were cultivated in grain and alfalfa upon com-
plainant's land, and 800 acres additional were plowed, but not sown on
account of lack of water. In 1897 about 1,600 acres were in grain and al-
falfa, in addition to 250 acres of plowed ground. In 1898, the year in which
the présent suit was commenced, there were 2,100 acres in cultivation, and
there were also 1,250 acres of plowed land, part of which was sown, but on
which no crops were produced, again because of the want of water.
Thies, Carpenter, and Rodgers own separate tracts of land in Lovelock
Valley. Long prior to 1883 the owners of thèse separate tracts of land had
acQuired separate rights in various ditches and sloughs, for the purpose of
conveying water to irrigate such portions of their lands as could be culti-
vated, etc. In 1883 they united together for the purpose of obtaining the
water necessary to irrigate their respective lands from a common source.
To this end they constructed the Marker dam, flume, and ditch, and by means
thereof diverted the waters of the Humboldt river to and upon their lands
for irrigating purposes. The interests of the owners of thèse respective
tracts of land in the ditch and water flowing therein were, by agreement of
the parties, divided as follows : Thies is entitled to s/24, Carpenter to 7/24,
and Rodgers to iVsi- Rodgers brought this suit to enjoin défendants, who
are subséquent appropriators of the water from the river, from diverting any
of the water which Rodgers, Thies, and Carpenter are entitled to hâve flow
through the Marker ditch for the purpose of irrigating their respective lands.
Complainant is the owner of the lands described in his bill, and of ail the
water rights of the Markers connected with said lands. About 10,000 acres
of said land is so situated that it is capable of being irrigated by the water
flowing through the Marker ditch. According to the testimony ofCered by
défendants, more than 4,000 acres of the complainant's lands which were
covered by sloughs, tules, and swamps in 1875 had ceased to be such In 1888,
when the défendants commenced work to divert the waters of the river.
There was a small portion of the land that was overflowed during a period
of unusual bigh water in the year 1890. There is a great diversity of opin-
ion in the testimony as to the actual number of acres that were irrigated
EODQKKS V. FITT. 935
prlor to 1888. P. N. Marker placed It at 4,000 acres, others much less, and
some of the défendants' wltnesses placed it at about 1,000 acres. Carpenter
irrigated about 1,200 acres, and Thies about 700 acres.
In the fall of 1888 the défendants Pitt and Hauskins commeneed work
under their appropriation of water, to be conveyed under the Old Channel
diteh, for the purpose of Irrigating their lands, and completed the same in
1889. They then had between two and three thousand acres of land. In
1898 there was a freshet which washed away their dam. It was rebuilt,
and in 1891 and 1892 about 1,200 acres lying under the ditch were put in
crops. Thereafter the acreage of land irrigated was gradually increased.
The largest increase was made in 1803 and 1895, and the défendants hâve
now under irrigation about 4,000 acres of land.
In 1892 the Markers and Thies commeneed an action in the state court
against Pitt, Hauskins, and Downs to restrain the défendants therein froni
diverting 404 cubic feet per second of the waters of the river.
The varions contentions of counsel for défendants, as stated in the brief,
are as follows:
"Under the testlmony, ànd the law of appropriation, we shall, under vari-
ous headings, contend :
"(1) That Rodgers, Carpenter, and Thies are not, and never were, tenants
in common of the water flowing through the Marker ditch, and that, even
if they were, a co-tenant can only sue to protect his own Interest in the
water.
"(2) The holding of the court that they were tenants in common was not
intended to preclude further investigation and final détermination. The
prineiple of res judicata does not apply. The whole of the subject matter
is sub judice.
"(3) For the same reason it is Immaterial that the court adopted the Sys-
tem of irrigation In use in Lovelock Valley for the purposes of the hearing
upon the temporary restrainlng order. The right to water is usufructuary
and not proprietary, and is subject to the control and régulation of the
court.
"(4) That the maximum capacity of the Marker ditch, determined at the
point of its least carrying capacity, was never greater than 5,310 inches.
until enlarged somewhat In 1901. The discharge capacity of the flume is
reduced to about 5,000 Inches by obstructions below.
"(5) That what is now the Marker ditch was the main channel of the river
in 1875. It was a succession of sloughs, conneeted in order to drain the
lands. The sloughs and ditches were ail for drainage purposes, excepting a
small 'Farmers' ' ditch. The great necessity then was to drain and keep the
water away from the land. When Pitt and Hauskins appropriated, the
Marker ranch had only a thousand acres under cultlvatlon. The remainder
was : 6,000 acres of swamp, tule, and cane ; 3,000 acres of sagebrush, grease-
wood, etc. ; and about 2,000 acres of barren land above the ditch.
"(6) To establish an appropriation of water, the proof must show : (1) An
intent to apply It to a bénéficiai purpose ; (2) a diversion from the stream
to apply it to the bénéficiai purpose; (3) an actual application of It to the
bénéficiai use.
"(7) The intent and diversion must be followed by the actual application
within a reasonable time, or there is no appropriation — the prosecutlon of
the enterprise must be regarded as abandoned.
"(8) If there Is any delay in applying the water to a useful purpose, It
must be attrlbutable to matters incident to the enterprise itself, or the doc-
trine of relation cannot be invoked. Illness and poverty are not légal ex-
cuses.
"(9) T. J. Hauskins' appropriation antedated that of Marker, and, If lack
of diligence In proseeuting the enterprise to completion may be excused by
poverty, his appropriation is prlor to that of Marker.
"(10) Marker only put under irrigation 1,000 acres in 14 years — from 1875
to 1889 — and his right to Increase the use of water, assuming that he was
the first approprlator, ended when Pitt and Hauskins appropriated in 1888.
"(11) Assuming that Marker was prior in tùne, ail of the residue of the
936 129 FEDERAL REPORTER.
stream In 1888 was subject to appropriation, and Pitt and Hauskins ac-
qulred a vested right to sueli resldue by their appropriation.
"(12) A claimant's riglit is not measured by the capacity of his ditch, nor
by the quantity of water he diverts, but by the amount he needs, wheii
economieally used, for bénéficiai purposes. Bénéficiai use is the payment
demanded by the law, and when payment ceases the right is suspended. The
experiments made, the expérience of the ranchers, and the tables prepared
from the testimony of the witnesses absolutely and mathematically démon -
strate that less than one-fourth of an inch to the acre during the irrigating
season Is ample to Insure the best irrigation and erops on complainant's land
and throughout the valley.
"(13) The complainant's right to irrigate begins April Ist and ends Octo-
ber Ist, and the défendants, by their Intent, diversion, and use of the water.
are entitled to a prior right to the water prior to April Ist.
"(14) While the court, havlng the authority to limit the use of water fb
the amount necessary to accomplish the purpose of the appropriation, has
the corrélative power to decree a suflîcient head, by rotation or otherwise.
it need not be exercised in this case, because the défendants hâve admitted
that the équivalent of a constant flow of 250 inches for six months measures
the complainant's rights. and consented that 84,487,500 cuble [feet] may be
called for whenever required — enough to cover 1,000 acres two feet deep in
any number of irrigations desired.
"(15) The case against the Lovelock Mill Company failed utterly, and it
must be dismissed from the case."
Charles W. Slack and A. E. Cheney, for complainant.
Bigelow & Dorsey, R. M. F. Soto, and Torreyson & Summerfield,
for défendants.
HAWLEY, District Judge (after stating the facts as above). This
is a suit in equity to enjoin the diversion of water by défendants
from the Humboldt river. It has frequently been before the courts,
and four différent opinions hâve been rendered therein. Rodgers v.
Pitt (C. C.) 89 Fed. 420; (C. C.) 89 Fed. 424; (C. C.) 96 Fed. 668;
(C. C. A.) 104 Fed. 387. It is now before the court upon the évidence
taken under issue joined at the trial. The gênerai facts in relation
thereto are set forth in the foregoing statement, some of which were
stated in the opinion of this court (89 Fed. 420), ordering the issuance
of a temporary injunction, to which référence is hère made.
A careful, extended, and painstaking examination and considération
of the briefs of the respective counsel, and the material portions of
ail the testimony, has convinced me that the points made and relied
upon at the trial are substantially the same as at the preliminar}'
hearing. The testimony at the trial was more thorough in its détails
as to the facts, and the arguments more extended, with a citation of
authorities showing commendable industry, care, and zeal on the
part of the respective counsel; but the gênerai history of the case
remains the same, with one or two minor exceptions, which will
hereafter be noticed. Did the court err in any of the conclusions
reached at the preliminary hearing? Do the merits of the case, as
presented at the trial, demand any différent conclusion than was
then reached ? Thèse are the real questions to be now determined.
I. Can complainant maintain this suit and obtain an injunction
against the défendants, except as to the amount of water appropriated,
needed, and required for a bénéficiai use for the irrigation of his own
lands? It is apparent from the facts of this case that Thies, Car-
KODGEK8 V. PITX.
937
penter, and Rodgers, by virtue of their interest in the Marker dam
and ditch, might at anj' time agrée among themselves that, instead
of using their proportionate share of the waters flowing therein all_ the
time on their land, each should take ail the water a part of the time.
As was said in 89 Fed. 420 :
"They could agrée that Thies should hâve ail the water for 3 days out of
24, that Carpenter should hâve It ail for 7 days out of 24, and that Rodgers
should take it ail for 14 days out of 24. In the event of any litigatlon be-
tween themselves as to their respective rights, a court of equity would hâve
the unquestioned power to make such a decree, If it fairly represented their
respective rights as to the use and necessity of the water to irrigate their
respective lands. This being true, It follows that each has such a unity of
possession of the ditch and water flowing therein as to entltle either of them
to bring suit, and enjoin any diversion of the water, by a trespasser, to which
they are ail entitled."
This court will not consider any of the questions decided on the
hearing for a preliminary injunction as res judicata. They are open
for review, but they should be adhered to, unless it clearly appears that
an error was committed, or that additional facts were brought out at
the trial which demand a modification or reversai of the views ex-
pressed at the preliminary hearing. Upon this point no new facts
were elicited at the trial. The conclusions reached in the former
opinion are in accordance with the Aaews expressed by this court in
Union Mill & Mining Co. v. Dangberg (C. C.) 81 Fed. 73, 87, and fol-
lowed in Miller & Lux v. Rickey (C. C.) 127 Fed. 573, 586. In addi-
tion to the authorities cited in the opinions referred to, upon this
point, see: The Débris Case (C. C.) 16 Fed. 25, 34; Carpentier v. Web-
ster, 27 Cal. 524; Himes v. Johnson, 61 Cal. 259; Meagher v. Harden-
brook, 1 1 Mont. 385, 390, 28 Pac. 45 1 ; Spanish Fork v. Hopper, 7
Utah, 235, 238, 26 Pac. 293; Plall v. Blackman (Idaho) 68 Pac. 19, 22;
Bâtes V. District of Columbia, 7 Mackey, 75, 79; Black's Pomeroy on
Water Rights, § 63 ; Long on Irrigation, § 85.
In Black's Pomeroy, supra, the author said :
"Wherever ditches or other structures for diverting and appropriatlng
water belong to two or more proprietors, such owners are, In the absence of
spécial agreements to the contrary, tenants in common of the ditch, and of
the water rights connected therewith, and their proprletary rights are gov-
erned by the rules of law regulating tenancy in common. • * • Of ten-
ants In common, each has a right to enter upon and occupy the whole of the
common property, and every part thereof, and may recover the whole thereof
from a trespasser ; and an arrangement as to perlods for the use of the
water, among the co-tenants, afCects them only, and Is for their convenience,
and is no défense to an action of trespass against a third party by one of
the co-tenants."
In Meagher v. Hardenbrook, supra, the court said:
"ïhat one tenant in common may préserve the entire estate or rIght held
in common is a proposition so well settled it Is unnecessary to cite authorities
in support thereof. In this the tenant in common is only preserving bis own,
as his right partakes of the whole."
2. Touching the matter of jurisdiction discussed by the Circuit
Court of Appeals in 104 Fed. 387, 390, some référence ought, perhaps,
to be made to the averments in défendants' answer, alleging that the
complainant had actual notice at the time he took the conveyance from
938 129 FEDERAL EEPOETEE.
the Màrkérs of the pendency of the action in the state court. The
défendants introduced but one witness to sustain this spécial défense,
and his testimony failed to meet the expectations of défendants in
that respect. Notwithstanding this fact, counsel seem to think that
the court ought to take judicial notice that complainant must hâve
Itnown the facts to be as alleged in the answer. It is enough to say
upon this point that there is no testimony in the record tending to
show that at or prior to the time of the commencement of this suit
complainant had actual notice of the pendency of the action in the
state court. If there had been any constructive or actual notice
proven, then the court might hâve been called upon to answer the
question, suggested by complainant's counsel, whether or not the ju-
risdiction, being matter of abatement, should hâve been raised by
plea, and is waived by answering to the merits. It has been so held
in many cases. Marshall v. Otto (C. C.) 59 Fed. 249, and authorities
there cited. In addition thereto, see Dodge v. Perkins, 4 Mason, 435,
Fed. Cas. No. 3,954; Wood v. Mann, i Sumn. 578, Fed. Cas. No.
17,952 ; I Bâtes on Fed. Proc. § 239 ; i Beach, Mod. Eq. Pr. § 304.
3. It is claimed by défendants that complainant's right to use the
water commences April ist, and ends on October ist, each year, and
that in any event the défendants should not be enjoined from using
the water prior to April ist. There is no doubt that, where a party
in the appropriation of water limits himself in using it to certain
specified dates, subséquent appropriators may acquire a vested right
to the water to be used at times not embraced in the claim of the
first appropriator. In Barnes v. Sabron, 10 Nev. 217, 245, the court
said:
"We think the rule Is well settled, upon reason and authority, that, 1£ the
first appropriator only appropriâtes a part of the waters of a stream for a
certain period of time, any other person or persons may not only appropriate
a part or the whole of the residue, and acquire a right thereto as perfect
as the first appropriator, but may also acquire a right to the quantity of
water nsed by the first appropriator at such times as not needed or used by
hlm. In other words, if plaintiiï only appropriated the water during certain
days In the week, or during a certain number of days In a month, then the
défendants would be entitled to its use in the other days of the week, or the
other days in the month."
But the contention of counsel must be disposed of by the particular
facts existing in this case. The record shows that the complainant
claimed and used the waters appropriated by his predecessors in inter-
est for the irrigation of the land owned by him. His claim and use
of the water was not with référence to any particular period in the
spring or fall, or during any particular months in the year. It is
broadly claimed that complainant never irrigated any of his land any
year before April ist. This is not borne out even upon the testimony
of H. C. Marker, offered by défendants :
"Q. What time did the irrlgating season begin up to 1888 and 1889? When
did you first begin to irrigate? A. What time of year? Q. Before 1889. A.
About the Ist of March. Q. You began irrlgating as early as the Ist of
Mareh? A. Tes. Q. Do you know of any irrlgating that began as early
as that time? A. Yes, I hâve irrigated in January. Q. What did you Irri-
gateî A. Alfalfa. * * * Q. I asked you yesterday something about the
time of the beginning of the irrlgating season ; you answered that ; and now
RODGERS V. PITT. 939
I would like to recur to that subject and ask you when It was that you flrst
began to irrigate while you were on the Marker ranch from 1875 untll 1889
— wbat month In tbe year? A. Generally commeneed the Ist of Aprll on
grass ground. Q. Hâve you ever irrigated earlier than that? • * • A.
Last year I turned water in on fruit trees, and to kill gophers, and some on
alfalfa too, for three or four days. In January. * * * Q. Hâve you irri-
gated in March sometimesî A. It may be, but I do not think of it. Q.
* * * I want to knovv whether that answer of yours flts ail the time there,
that your earliest irrigating season began in April, while you were on the
Marker ranch? A. I think so; I can't say that for certain."
The truth is, as shown by the testimony, that there was no fixed
time to begin irrigating in Lovelock Valley. It depended upon the
seasons, climatic conditions, water supply, etc., as well as upon the
character of the soil. In a season like the présent, where there has
been an almost continuons fall of rain or snow during the entire
month of March, it is safe to say that no irrigation will be required
before the ist of April, and, in many localities, probably not before
the ist of May. In dry seasons it would be required much earlier.
Nelson, a farmer residing in the valley, said :
"Q. Is the season in the year for irrigating always the same? The same
one year as in another? I am speaking, of course, of the land that you hâve
described, Rodgers', Thies', and Carpenter's, and your own and your neighbors'
land lying under the Union Canal? A. The season varies considerably. Q.
There is no flxed time then at which you begin irrigation? A. No. Q. If
the season is an open one and water Is short, what time would you begin?
A. I would begin about the flrst part of March for alfalfa. • * • It
might damage grain to begin too early. Q. But If, on the other hand, if
the season is a late one, could you make profitable use of water at an earlier
period? A. If the season is late, with the prospect of abundance of water,
we hâve better results irrigating in April. Q. On the other hand. If the sea-
son was late, and the prospect not good for an abundance of water, would
you take the water when you could get it? A. Yes."
P. N. Marker, the former owner of the Rodgers land, testifîed :
"Q. Is there any flxed time when the flrst crop Is eut? A. No, sir; that
also dépends on the season ; it varies sometimes two weeks. Q. So, as a
matter of fact, there is no flxed period of irrigation of that property out
there? A. Well, yes; there is a certain time between February and Sep-
tember."
Joseph Hill, superintendent of the Rodgers ranch, on cross-examina-
tion testified:
"Q. Do you mean during the Irrigating season, running through the entire
irrigating season? A. Yes. Q. What Is the irrigating season? A. When you
need it. Q. How many months? A. From February until September."
Peter Anker testified that the irrigating season in Lovelock Valley
"would be ail the way from the fîrst of March, or last of February,
to the fîrst of September."
W. C. Pitt, one of the défendants, testifîed, that alfalfa required
irrigation "in April or March as the case may be. * * * I hâve
irrigated at ail times through the winter when I could get water;
that is, in places where I could put the water, where it would not
injure the land. The regular time that I am using water to irrigate
with is about the ist of March at the présent time."
4. It is claimed by counsel that, "to establish an appropriation of
water, the proof must show intent to apply it to a bénéficiai purpose
940 129 FEDERAL REPORTER.
existing at the time, an actual diversion from the stream, and tHe ap-
plication of it to a useful purpose." This is correct. In Union Mill
& Mining Co. v. Dangberg, supra, this court, in discussing principles
applicable to this case, said :
"Under the principles of prior appropriation, the law Is well settled that
the right to water flowing In the public streams mav be acqnired by an actual
appropriation of the water for a bénéficiai use; that, if it is used for Irri-
gation, the approprlator Is only entltled to the amount of water that is nec-
essary to irrlgate his land, by making a reasonable use of the water; that
the object had m view at the time of the appropriation and diversion of the
water is to be considered in connection with the estent and right of appro-
priation ; that if the capacity of the flume, ditch, canal, or othcr aqueduct
by means of which the water is conducted, is of greater capacity than is
necessary to irrigate the lands of the approprlator, he will be restricted to
the quantity of water needed for the purposes of irrigation, for watering his
stock, and for domestic use ; that the same rule applies to an appropriation
made for any other bénéficiai use or purpose; that no person can, by virtue
of his appropriation, acquire a right to any more water than is necessary
for the purpose of his appropriation; that, if the water Is used for the pur-
pose of irrigating lands owned by the approprlator, the right is not conflned
to the amount of water used at the time the appropriation is made; that
the approprlator is entltled, not only to his needs and necessitles at that time,
but to such other and further amount of water, within the capacity of his
ditch, as would be requlred for the future improvement and extended culti-
vation of his lands, if the right is otherwise kept up; that the intention
of the approprlator, his object and purpose in making the appropriation, his
acts and conduct in regard thereto, the quantity and character of land owned
by him, his necessities, ability, and surroundings, must be considered by the
courts, in connection with the estent of his actual appropriation and use, in
determining and deflning his rights; that the mère act of commencing the
construction of a ditch, with the avowed intention of appropriating a given
quantity of water from a stream, gives no right to the water unless this
purpose and intention are carried out by the reasonable, diligent, and effec-
tuai prosecution of the work to the final completion of the ditch, and diver-
sion of the water to some bénéficiai use ; that the rights acquired by the
approprlator must be exercised with référence to the gênerai condition of the
country and the necessities of the community, and measured in its exteut
by the actual needs of the particular purpose for which the appropriation
is made, and not for the purpose of obtaining a monopoly of the water, so
as to prevent its use for a bénéficiai purpose by other persons; that the
diversion of the water ripens into a valid appropriation only where it is
utilized by the approprlator for a bénéficiai use. * * » Water in this
State is too scarce, needful, and precious for irrigation and other purposes
to admit of waste. No person, whether an approprlator or riparian pro-
prietor, should be allowed to 'be extravagantly prodigal in dealing with this
peculiar bounty of nature.' "
S. The questions stated by counsel in points S to ii will be grouped
together under one gênerai head.
(a) The claim that "Hauskins' appropriation antedated that of
Marker" is not supported by the testimony. The answer of défend-
ants does not contain any allégation claiming any rights whatever
under the appropriation made by Hatiskins in 1873 ; it admits priority
in complainant to the extent of 450 inches. It is without foundation
in the pleadings or the proofs, and is not seriously urged. In fact,
it appears to bave been made subject to conditions which hâve no
spécial application to the particular facts of this case. The facts as
shown by the évidence at the trial, as well as upon the heariug, are
that "the défendants' right to appropriate any water from the Hum-
boldt river was not acqnired until the fall of 1888. Complainant's
BODGEES V. PITT. 941
rights, as well as those of Thies and Carpenter, his co-tenants in the
Marker ditch, were acquired many years prior to that time." 89 Fed.
423. Marker's claim and rights to tlie water commenced in 1875.
(b) Did complainant's predecessors in interest prosecute the work
with such reasonable dihgence as to entitle him to claim his rights
by relation to the time of their first inception? The principles of law
applicable to this question are covered by the quotation from Union
M. & M. Co. V. Dangberg, supra. Whether this case cornes within
the rules there stated is a question of fact. The court must always
be controlled by the facts, circumstances, and conditions as shown
by the évidence. An illustration is found in the décisions of the Su-
prême Court of this state. Thus, in the Ophir Silver M. Co. v. Car-
penter, 4 Nev. 534, 97 Am. Dec. 550, it was held that the diligence
required by the law was not estabhshed by the facts. And in Barnes
V. Sabron, 10 Nev. 217, 242, it was held that proper diligence was
shown. But the principles of law announced in each were the same,
and are substantially identical with the doctrine announced by this
court in the case of Union M. & M. Co. v. Dangberg, heretofore
quoted. "What constitutes a reasonable time within which the water
must be applied to bénéficiai use is obviously a question of fact, de-
pending upon the circumstances of each particular case." Long on
Irrigation, § 47, and authorities there cited.
(c) In the course of défendants' brief it is said :
"An examlnation of tlie record will disclose the fact that, as to ail save
an exceedingly small part of the Marker diversion, each of the three élé-
ments essential to constitute a valid appropriation was utterly lacking when
the water was first taken. ïhere was no présent intention to apply it to
a useful purpose. There was no necessity for the water. There was no
application of it to a bénéficiai use. As to the first élément, the larger and
more valuable portion of the Marker ranch — that part which is now under
cultivation was under water — was swamp. There certaiuly could hâve beeu
no intention to use water on swamp lands. As to the second élément, there
was — there could hâve been — no necessity to irrigate the swamps. As to
the third élément, no such application, if claimed or Intended, could hâve
been beneficially made."
The fact is that, at the time Marker secured the lands and appro-
priated the waters of the Humboldt river, the natural waters thereof
were flowing in the Humboldt river, and spread over portions of the
lands in various sloughs. It was necessary to drain thèse sloughs in
order to put the land under cultivation. It was like cutting timber
in the forests, or digging out or plowing up the sagebrush or grease-
wood that grows in the désert. The conditions on the land had to
be changed in order to apply the water claimed and appropriated to
a useful and bénéficiai purpose. It was a part of the enterprise which
Marker had in view in making his appropriation. There is no prin-
ciple of law that required him, under such circumstances, to delay
making his appropriation until after he succeeded in draining the
land and putting it in a condition where it could be cultivated. The
défendants are not in a position to make any such défense. They
did not make any appropriation of the waters of the river until years
after Marker had appropriated the same, and had cleared nearly ail
of his land for cultivation, and was irrigating the same, using the
water he had appropriated for a useful and bénéficiai purpose. Ail
942 129 FEDERAL KEPOETER.
that they can daim is as to the excess of the water after the time they
made their appropriation in the year 1888. They were not entitled
to any vested right to any of the waters of Humboldt river until that
time. To hold otherwise would be to take away from complainant,
whose predecessors in interest had made a prior appropriation and
diverted the water to a bénéficiai use, the quantity of water to which
he was entitled, and give to the défendants a quantity of water to
which they never were entitled, and had never theretofore enjoyed, or
had the right to enjoy.
(d) There was no lack of diligence upon the part of complainant,
or his predecessors in interest, after the years 1888 and 1889. It is
true that during certain years thereafter the complainant did not use
, as much water as had been used before 1888, and some reliance
seems to be placed upon this fact in order to reduce the amount of
water to which complainant is entitled. During the dry years there
was not sufiîcient water to furnish the necessary supply. Complain-
ant could not obtain sufiicient water to irrigate the land. The com-
plainant certainly ought not to be confined to the amount of water
he used, and to the number of acres irrigated during the dry seasons.
A référence to the statement of facts will show the number of acres
cultivated on complainant's land in grain and alfalfa, and the number
of acres plowed for which water could not be obtained during the
years 1896, 1897, and 1898. Looking further into the facts, it will
be discovered that, after the défendants had diverted the water of the
river onto their lands, their acreage steadily increased year by year
until they had about 4,000 acres under cultivation. In the estimâtes
made by défendants of the number of acres under cultivation on com-
plainant's land, they apparently overlook the plowed ground, and ig-
nore the number of acres of pasture land or wild grass that were
irrigated. It is in effect claimed that the use of water for pasture
and for wild hay was not for a bénéficiai purpose. The courts hâve
held otherwise. In Pyke v. Burnside (Idaho) 69 Pac. 477, it was ex-
pressly held that where one constructs a ditch and conducts water
upon his land year after year, and permits the same to spread out over
wild hay land for the purpose of making hay or using such land for
pasture, he thereby secures the right to the use of sufficient water to
irrigate such land, provided the amount of water so used is sufiîcient
for that purpose ; such use being a bénéficiai one. In Smyth v. Neal,
31 Or. 105, 109, 49 Pac. 850, 851, the court said:
"It seems to hâve been a conceded proposition that the use of water for
the irrigation of thèse wild meadow lands was for a useful purpose, and that
such irrigation was necessary for the production of grass in sufBcient quan-
tities to be gathered and cured as feed for stock."
The theory advanced by défendants, that the rights of complainant
should be limited to the amount of lands actually cultivated for crops
and grain, cannot be sustained. In Kleinschmidt v. Greiser, 14 Mont.
484, 497, 37 Pac. s, 6, 43 Am. St. Rep. 652, the court, in answering
a similar contention, said :
"Such theory, if followed, is, we think, without doubt, erroneous. There-
by a prior appropriator of water would be eut down to the quantity necessary
to irrigate the land he actually had under cultivation when the subséquent
R0DGEE8 V. PITT. 943
appropriation was made, although the flrst approprlator's land was ail avail-
able for production o( crops by aid of irrigation, but, at the time of making
the appropriation of water necessary for its Irrigation, he had not subdued
ail of it to the plow. The priority under such rule would dépend largely
upon the time appropriators brought their lands under cultivation, and not
upon the priority of appropriation and diversion of the water necessary to
irrigate the land owned by the appropriator, as the law provides."
6. What amount of water is complainant entitled to in this case ?
What amount of water is necessary to properly irrigate an acre of
land? Thèse questions were involved and disposed of on the prelim-
inary hearing (89 Fed. 423), and must now be disposed of by the
weight of the testimony given upon the trial of the case. No addi-
tional facts were elicited at the trial which demand any change in the
views that were then expressed. The amount of water necessary to
irrigate the lands dépends, in a greater or less degree, upon the
gênerai character of the soil in the locality where the lands are situated.
The System in vogue among the farmers in Lovelock Valley is that of
using irrigating ditches, generally of uniform size and dimensions,
varied only by changed conditions, and turning the water through
thèse ditches over the land, controlling and changing the water, as
occasion requires, at différent timeS during the day, and letting it run
and take care of itself during the night, but arranged where it is be-
lieved it will do the most good and least harm. Upon the preliminary
hearing it was said: "It is the duty of the court, in the absence of
any law upon the subject, to détermine the amount of water by a
référence to the system used." This necessarily implied that the system
was a proper one under ail the existing conditions. In Long on Irri-
gation, § 49, the author said :
"The methods of applying water to the soil vary wlth the character of
the soil and crop, the quantity of water available, the slope of the ground,
and like considérations. The water may be distributed, as is usually done
in the case of hay crops, such as alfalfa, growing on nearly level ground, by
cuttlng the side of the distributing ditch constructed along the highest parts
of the iield, either by making temporary openings with a shovel or hoe, or
by permanent gâtes, and letting the water flow In ail directions over the
surface. This is evidently the simplest mode of distribution from a ditch.
Other methods, varying in complexity up to elaborate Systems of distribu-
tion by means of pipes, are employed."
The défendants' expert Taylor testified that in his opinion the System
of irrigation used by the farmers in Lovelock Valley is defective, but
nevertheless "it is arranged according to the best intelligence of the
farmers themselves, and oftentimes very good, still apt to be defective
more or less."
Absolute perfection in the system of irrigation in this state, has,
perhaps, not yet been reached, and it is doubtful if any system could
be devised that would not, in the opinion of some scientists and ex-
perts, "be defective more or less." The contention that the prior ap-
propriators of the water ought to be compelled to change their system
for the exclusive benefit of the subséquent appropriators, who use
the same system, does not appeal, in the light of ail the facts in this
case, very forcibly to a court of equity, as being sound. It would
seem more just to allow the complainant to change his System, if he
can and désires so to do, and to adopt any system that would allow
944 129 I-'EDEKAL KEPOETEE.
him to so use the amount of water to which he is entîtied as would
enable him to cultivate more of his land. The court cannot, in the
absence of any law upon the subject, compel the famiers to use any
particular System, but it might, in a case where an extravagant and
wasteful System is used, which demands more water than they are
entitled to by virtue of their appropriations, déclare that under such
circumstances they were not entitled to the quantity of water they
were using, and give the excess to subséquent appropriators. But
this is not such a case. The testimony shows that the System referred
to is used by ail the farmers in Lovelock Valley — ^by the défendants
as well as by the complainant.
In the former opinion, speaking of the testimony, the court said :
"The wltnesses on behalf of complainant place the quantity at one inch
to the acre ; the défendants generally at about one-half an inch to the acre ;
some placing it, however, as low as one-quarter of an inch to the acre. The
great weight of the testimony, however, Is to the effect that one inch to the
acre Is required to properly Irrigate the cultivated lands. The défendants
offered testimony to the efCeet that they would be satlsfled wlth one-half an
inch to the acre, and that that quantity was ail that was required. The
fact, however, Is that, durlng the early part of this season, ail the farmers
taking water frpm the Pitt ditch used 3,400 Inches of water to Irrigate about
3,000 acres of land, and there were more or less dissensions between them
as to their not having their proportion or sufficient quantity of water to
properly irrigate their lands. A surveyor was employed, and measurements
made, showing, wlth but one or two exceptions, that each party was only
using his proportionate share of the water," to wit, one Inch to the acre.
The only additional testimony at the trial was given by experts,
whose testimony is claimed by défendants to be entitled to greater
crédit than the testimony of the farmers. It is an easy task for coun-
sel to claim that the witnesses introduced on behalf of their clients
establish facts which entitle them to recover, but the court ought not
to ignore the testimony of the other side. It is compelled to consider
ail the testimony offered by the respective parties, to weigh and analyze
it by the settled rules of law, in order to détermine where the pré-
pondérance lies. In its investigation the court cannot say that the
testimony of experts as to the amount of water used or required must
be accepted as against the farmers of the vicinage who had been
living in the valley and using the water for several years. It may be
difiicult for the courts to détermine with mathematical certainty the
précise amount of water running in a stream, or the carrying capacity
of ditches and flumes, when the testimony, as in the présent case, is
conflicting; but the experts, who ought to know, diiïer as widely in
their measurements as do the ordinary farmers in their method of
calculation. A référence to what was said by this court in Union Mill
& Mining Co. v. Dangberg, 8i Fed. 99, 100, without comment, shows
that even experts are liable to make mistakes in their methods of
measuring water, and in their judgment as to the amount of water
necessary to irrigate an acre of land.
There are divers other points argued by défendants' counsel, not
specifically noticed herein. Theiir discussion would serve no useful;
purpose. Suffice it to say that in my opinion, after a careful exam-
ination thereof, they are not of such a character as to change the
results. Many of the points urged by défendants' counsel seem to
THE HEBCULES. 945
have been made, as was said by the court in Francis v. United States,
i88 U. S. 376, 23 Sup. Ct. 334, 47 h. Ed. 508, "in the hope that some
shot might hit the mark."
Upon the whole case, my conclusion is that tlie complainant herein
is entitled to a decree that the temporary injunction heretofore issued
be made perpétuai, restraining défendants and ail parties claiming
under them, their agents, servants, employés, etc., from diverting, or
in any manner using, the waters of the Humboldt river so as to
prevent 3,500 inches thereof, measured under a four-inch pressure (or,
in other words, 70 cubic feet of vi^ater per second of time), from flow-
ing in the bed of the river to the head of complainant's ditch during
the irrigating season, and for costs.
THE HERCULES.
LARSEN et al. v. S. P. SHOTTER CO,
(District Court, S. D. Georgla, E. D. Match 11, 1904.)
(Circuit Court, S. D. Georgla, E. D. March 11, 1904.)
1. Shippinq — Construction oï Chabteb— Bbeach by Refusal to Accept
Vessel.
Whlle loading at Savannah, a shlp was chartered for a subséquent
voyage from that port, the charter provldlng that she should be tlght,
Btauncb, strong, and in every way fitted for the voyage ; that she should
proceed in ballast to Savannah after having dlscharged her présent cargo
in Europe. There was no stipulation In respect to the time of her re-
turn, and the charter eontained a provision that the dangers of the sea,
fire, and navigation of every nature and klnd be always mutually ex-
cepted. In passlng out from Savannah in tow she struck on a bar, and
was injured to such an extent that, after having dlscharged her cargo
at Hamburg, it was found necessary to make repairs, and, there being
a strike among the ship carpenters in Hamburg, she was taken to a port
In Norway, the trip requlring two days, where the repairs were made
as requlred by the officiai board of survey, and, as shown by the évidence,
In as short a time as possible. The broker who negotiated the charter
at once advised the charterers of the situation, and submitted an oflfer
by the owners to substltute another vessel or to cancel the charter, which
was refused, the charterers claiming a réduction of the freight on account
of the delay. A subséquent ofCer of the same kind was also refused,
and after completlng her repairs the ship sailed for Savannah, where
Bhe was entered at the customhouse by the charterers, but after she had
remained in port nearly a month they gave notice that they waived their
clalm for a réduction in the freight and had canceled the charter. Held,
that the mutual exception In the charter of dangers of the sea took effect
at once on its exécution, from whIch time the owners became bound there-
by to put the shlp in a seaworthy condition and to proceed wlth reason-
able dispatch until she was delivered for loading, subject to such excep-
tion, and that therefore the unavoidable delay caused by such périls
afforded no ground for the refusal of the charterers to accept and load
the vessel ; nor was the taking of the shlp to the port where she was
repalred such a déviation from the contemplated prlor voyage as released
the charterers under the clrcumstances shown, or entitled them to dam-
ages for the delay, especially after their repeated refusal of the owners
offer to cancel.
129 F.— 60
946 129 FBDBKAL REPORTER.
In Admiralty. Gross-àctions in the District and Circuit Courts, re-
spectively, Consolidated by consent and heard before Judge SPEER,
as judge of both courts, without a jury.
Samuel B. Adams and Davis Freeman, for J. A. Larsen and others.
George W. Owens and Walter G. Charlton, for S. P. Shotter Co.
SPEER, District Judge. This proceeding originated in an action in
the city court of Savannah by J. A. Larsen et al, plaintiffs hère, and
owners of the ship Hercules. It was an action for damages for breach
of a charter party of that vessel by the défendant, the S. P. Shotter
Company. The défendant, while carrying on its business in the city of
Savannah, in this district, is a corporation of the state of West Virginia,
and caused the removal of the case to this court. After the case was
removed, the Shotter Company filed a libel claiming damages against
the plaintiffs for alleged breach of the charter party on their part.
While there is much apparent conflict in the testimony, a careful
analysis of the évidence, in connection with the admissions in the de-
fendant's answer, discloses that there is little real conflict as to the ma-
terial facts. The charter party was made on the 5th day of March, igoi.
It was for a voyage from Savannah to certain ports, for orders to
discharge at certain other safe ports, to be designated at charterer's
option. It was expressly stipulated that the vessel shall be tight.
stauncfi', strong, and in every way fitted for such a voyage. The Shot-
ter Company engaged to provide and furnish for the said vessel a full
and complète cargo of spirits of turpentine and rosin. The charterer
agreed to pay four shillings British sterling per barrel of 40 gallons
gross American gauge of barrels of spirits of turpentine, and two shil-
lings and nine pence British sterling per barrel of 310 pounds gross
American weight for rosin, ail with 5 per cent, primage, payable in cash
on proper , discharge of cargo, free of discount or interest, three pence
British sterling per barrel to be deducted from above rates if vessel
is ordered, on signing bills of lading, to any direct port as above. It
was further agreed that there should be 25 lay days for loading and dis-
charging cargo, and that, for each and every day's détention by default
of the Shotter Company or agent, 18 pounds British sterling per day,
day by day, shall be paid by the charterer. It provided that the dan-
gers of the sea, fire, and navigation of every nature and kind be al-
ways mutually excepted. It is not without importance to observe that
H. Clarkson & Co., of London, acted as agents for the plaintiffs and for
the Shotter Company. The final stipulation of the charter party is:
"It is «nderstood that the vessel proceeds to Savannah in ballast, after
having discharged her présent cargo in Europe." It is to be observed
that there was no time stipulated in the charter party in which the ship
should return, no such expression as "ail convenient speed," but it is not
questioned that her owners were under obligation to return her within
a reasonable time.
Sailing from Savannah with full cargo after this charter party was
executed and in opération, and attempting, while in charge of a pilot
and in tow by a tug, to cross the bar at low neap tide, the Hercules
THE HERCULES. 947
struck four times. That the ship by this misadventure was seriously in-
jured is not, in the opinion of the court, fairly debatable. It was an old
vessel, having been launched in 1868. The pilot, it is true, expressed
the opinion that she could not hâve proceeded on the voyage had she
sustained the injuries described by the witnesses for the plaintiff. This
opinion is not deemed important, in view of the fact that she did pro-
ceed, and in view, also, of the positive testimony of several witnesses
who did the actual work of repairing her in a Norwegian shipyard at
Porsgrund. The testimony of Halvor Nielson, of the firm of Nielson
& Backa, at whose shipyard the Hercules was repaired, is as follows :
"My firm repaired the shlp 'Hercules,' of Sklon, In Porsgrund, during the
summer of 1901, owing to damage done to ship, said to hâve been done wheu
the vessel crossed the bar on leaving Savannah en route for Hamburg. The
repairs carried out by my firm were ordered to be done by the ofBcial survey-
ors — 'Det norske Veritas' (the Norwegian Veritas). No repairs were made
except those required by the above-named authorities. The repairs consisted
in the f ollowing : A new pièce of false keel under the forefoot, partially new
inner and outer forestem. This had given way or started, especially between
the ports, and was split In the middle where bolted. 'The materials were
otherwise Sound. The bow fastenings had to be loosened, partially removed,
in order to get the inner stem in place, and consequently had to be rebolted
and refastened. This work was diflicult to eBEect, and took a very long time
to do, although much overtime was spent on It, as only three to five men could
bo used at this work at a time. The sternpost was started and had to be
completely rebolted, as well as in part further fastenings. The lower rudder
metals were broken aud had to be renewed. The false keel aft was split,
and had to be replaced by two larger pièces. Besides which, the ship was
retrenailed from beneath the chainbolts down to about six or seven feet
from the keel. The ship was ealked from keel to gunwale, and remetaled.
The mizzenmast was repaired with three new pièces of pitchpine deals aud
iron hoops, and this work was carried out whilst the other repairs were pro-
ceeding, and without any détention to thèse."
There is other testimony as to the character of thèse injuries, but
much of it is hearsay, and the conclusion of the court is based upon the
testimony of the shipwrights and artisans above referred to. The in-
juries were, as stated, quite serious, but the vessel proceeded on her way
to Hamburg, and there unloaded. It appears further from the testimony
that her captain refused to take her out on another voyage until she
was repaired. It is equally clear from the évidence that a strike was
in progress among the ship carpenters at Hamburg, and that, while it
may hâve been possible to hâve repaired her there, it was judicious, and
in the interest of the charterer and the owners as well, to hâve the
repairs made at Porsgrund, in Norway. This was only a two days'
voyage from Hamburg.
When the Hercules reached Porsgrund she was surveyed by the offi-
ciai board, who enjoy and no doubt deserve the honorable title of the
Norwegian Veritas. This body, created by Norwegian law with nec-
essary authority, ordered certain additional repairs, and according to the
testimony of Hans A. Oelsen, who was a shipbuilder for 35 years, and
was présent at the shipyard, the repairs were expeditiously made, a
number of laborers, varying from 25 to 30, being continuously em-
ployed, and as many calkers and carpenters as could be reasonably
brought to work on the repairs. Thèse repairs were completed on Sep-
948 129 FBDEEAL RKPOEÏEU.
tember 22, 190 1. They were so salutary in their effect upon the ship
that she retained lier class in the Norwegian Veritas. Oelsen testifies :
"As a shlp bullder and foreman of many years standing, and having bad
considérable expérience in such matters, I may safely say that I am of tbe
opinion that the said repairs were carried eut with the utmost possible dis-
patch, and could, to the best of my bellef and Iinowledge, not hâve been effect-
ed better or quiclcer elsewhere."
Mr. Halvor Nielson, who is a shipbuilder and a shipyard proprietor,
testified to the same effect.
It will be recalled that H. Clarkson & Co., 112 Fenchurch street,
London, were the brokers who negotiated this charter party for the con-
tracting parties on May 25, 1901. Thèse mutual agents by letter no-
tified the Shotter Company of the plight of the Hercules.
"The owners of this vessel inform us," write thèse gentlemen, "that she
bas been aground and leaky and recommended to recopper (we understand
she will also reclass). Owing to the carpenters' strike at Hamburg, owners
bave been obliged to take her to Norway in tow, whereby we understand no
delay will occur. Ovt'ners might give you a substitute for earljer loading, or
cancel charter If you should prêter, and we now await your cable on receipt
if you bave any proposai to make ; if we don't hear from you by cable we
shall understand you will load her as per charter."
This letter reached the défendant on June 7, 1901. This, according to
the testimony of Mr. Einar Storm Trosdal, chief clerk of the foreign
department of the Shotter Company, was some months before the
présence of the Hercules at Savannah was indispensable. Indeed, he
stated that he supposed that a cargo could hâve been provided for her
as late as October. Notwithstanding this fact, the Shotter Company im-
mediately (that is to say, on June 7) reply by cable :
"Charterer will not cancel charter Referring to your letter of May 25th Her-
cules we claim réduction l%d."
The Shotter Company supplemented this telegram with the letter to
Clarkson & Co. of June 8th, from which we extract the following :
"We do not approve of owners doing as they please in such matters. In our
many years expérience we bave found Norwegian ship owners very strict in-
deed, in cases where we might deviate a little from the terms laid down in
the charter party. As a matter of fact when we want any privilège or option
we bave to pay very heavy Indeed, and there is no reason wby we should
be any more lenlent to them tban they are to us. As a matter of fact when
the owners of the Hercules undertook to send theIr vessel to Norway for re-
pairs they dld so at thelr own péril, because we contend that it was a viola-
tion of the contract with us. We cabled you that we would consent provided
owners make an allowance of l%d. and awalt your reply."
This attitude of the Shotter Company does not appear to be wholly
justifiable. It is, in effect, to make the Hercules a vicarious sufferer
for the alleged sharp practices of other Norwegian owners. This does
not seem maintainable upon any principle of admiralty law, save, per-
haps, such as relate to letters of marque and reprisai, which it is su-
perfluous to observe are only issued pursuant to act of Congress, and in
time of war, or near thereto.
Clarkson & Co. having received this cable, write on June 8th :
"We bave Informed owners that you claim a réduction of l^^d. offi the rate,
because ship was sent from Hamburg to Korway for repair."
THE HERCULES. 949
On June I2th, Clarkson & Co., who, as stated, acted as the joint
broker of the owners of the Hercules and of the Shotter Company,
Write :
"We are sorry and must say rather surprised at the vlew you are taklng
in this matter and cannot see why you should clalm any réduction, as It cer-
tainly bas been in your interest to taice the vessel over to Norway for repaira
instead of having the same efCected at Hamburg, where we understand strikesi
are still going on and there can be no doubt that the vessel will now be at
yours much sooner than would bave been the case if she had repaired at
Hamburg. She will be remetalled and reclassed A2. She is being put in
flrst class order, which naturally will make a great différence to you in effect-
ing the Insurance. Personally we thlnk you ought to waive the whole ques-
tion of réduction or If you should prefer it to cancel the charter."
To this letter it appears that the Shotter Company reply on June
I3th: .
"We will only refer you to our letter of the 8th Instant where we wrote
fully about this vessel. We therefore cabled you we would not cancel char-
ter but inslsted on getting allowanee of l%d."
On August 3, 1901, the Clarkson Company write to the Shotter Com-
pany:
"As cabled you the Hercules Is expected ready about the end of this month.
Awaiting further news we remain."
On August 27th the Shotter Company write to Clarkson & Co. :
"We take it for granted that by this time you will hardly agrée with the
owners of the vessel that time could be saved by having them go to Norway
for repairs. Whilst we bave not expressed ourselves plainly on this subject
before, we will say that we consider it perfectly absurd on the part of the
owners of that vessel to assume that they had the right to take the vessel
to Norway for repairs without our permission. We consider that the owners
violated their contract with us, and we shall see that the vessel carries part
of the burden and loss which we bave suffered."
Even at this late day it appears that there is no intimation on the part
of the Shotter Company that they hâve any purpose to cancel the char-
ter party. Their purpose, as disclosed, is to obtain a réduction of
freights, or otherwise make the owners of the Hercules share their
loss, whatever it may prove to be, or account to them in damages. On
November 9, 1901, Clarkson & Co. write to Shotter Company :
"In the case of the Hercules you will remember that as soon as we informed
you of this vessel having gone to Norway, owners made you a proposai to
cancel C. P. to which you would not agrée, but said that you would load the
ship at a réduction of l%d. so we cannot see how you claim more than this
réduction from the owners. We can assure you that the owners of both ships
bave used every diligence to get vessels repaired."
Her repairs having been finally completed, and the Shotter Company,
so far as the correspondence discloses, remaining inexorable in their
détermination not to cancel the charter party, but to insist upon a ré-
duction of freight, the owners of the Hercules sent her on the long
voyage through the North Sea and across the Atlantic to Savannah.
She reached Savannah on the 28th day of November, was entered at
the customhouse by Dahl, the agent of Shotter, who advanced the cap-
tain $100. Even now there appears to be no immédiate détermination
of the Shotter Company to cancel the charter party. The Hercules U
950 129 FEDERAL EBPOETER.
in the harbor from the date last mentioned until December 24th, when
Shotter Company write Clarkson & Co. as follows :
"We hâve decided to walve the clalm for damages agalnst the vessel, but
we hâve notified the eaptain that we hâve cancelled charter party. We regret
this very much Indeed, but considering the high-handed position the owners
took, they could hardly expect better treatment."
Now, whatever may be the technical rule which it is insisted author-
ized the Shotter Company to withhold cancellation until the ship arrived
at the port of loading, the application of such a rule hère seems uncon-
scionable. In the meantime the Hercules is claiming demurrage from
the 2d day of December, and finally succeeds in getting another charter
from the Patterson Downing Company on the 3ist day of December,
1901, and sails January 26, 1902. The Shotter Company contend, on
account of the failure of the Hercules to corne within a reasonable time,
that they were compelled to charter another vessel or vessels to take
the cargo provided for her, at a considérable loss to them. This loss
was stated in their plea in the removed case to be $381.04. In their libel
filed in this court, and sworn to by Mr. Shotter, it is stated to be $1,000,
or other large sum. They insist that their conduct in repudiating the
charter party is justifiable, first, because there was a déviation in the
voyage of the Hercules after that instrument was executed, and, sec-
ondly, becauses they were tinder no obligation to cancel the charter par-
ty until the Hercules returned to the port of destination ; that is, to Sa-
vannah. The court is unable to perceive any reasons under the cir-
cumstances which would justify the Shotter Company in repudiating
this charter party on either ground. The obligations of that instrument
were always mutually excepted from the dangers of navigation. The
injury resulted from one of those dangers. Repairs were unquestion-
ably necessary. It is clear that they could not be so well made at Ham-
burg as two days away at Porsgrund. That they could hâve been made
at- Savannah, where the injuries were sustained, is not contended.
There were no adéquate facilities hère. It was stipulated in the charter
party that the vessel should be staunch, sound, and seaworthy. The
owners, after the misadventure at Tybee, took the proper course to make
it so.
It is, however, insisted that this qualification relates to the voyage
to be made for the charterer, and not to the condition of the ship while
going to the owners' port of discharge, nor to any détention made nec-
essary by that condition. The case of Porteous v. Williams et al., 115
N. Y. 116, 21 N. E. 711, is cited in support of this contention. It is
true that certain language of the opinion in that case, Justice Danforth
delivering the opinion for the court, seems to support this proposition
of the defendant's counsel, but in that case, to use the language of the
court :
"The express agreement of the owner required the ship, after dlscharging
the cargo then on board with 'ail convenient speed,' to sail and proceed to the
port of the charterer. No déviation was provided for, nor détention for any
cause, save the necessary delay of unloading."
The qualification in the charter party before the court seems much
broader : "The dangers of the sea, fire and navigation of every nature
and kind always mutually excepted." Besides, in the case of the Por-
THE HEKCTTLES. 951
teous V. Williams, the language used by the court may, we think, be
regarded as obiter. This is defined to be an opinion expressed by a court,
but which, not being necessarily involved in the case, lacks the force
of an adjudication, i Bouvier, p. 567. As the question to be determined
there was whether a nonsuit of the owners was justifiable, the court
holding, favorably to the owners, that the nonsuit was improperly
granted, and that the case ought to bave been submitted to a jury, the
observations above referred to, which favor the charterer, were there-
fore not necessary to the détermination of the issue under considération.
Indeed, it seems to hâve been discussed as an abstract proposition along
with, to quote the language of the learned justice, "some other proposi-
tions none of which in the présent aspect of the case would permit the
case to be taken from the jury, and it should be sent to them."
On the other hand, there are two carefully considered cases of the
admiralty courts of the United States which adjudicate the contrary doc-
trine. Tliey are the décisions of the District Court in The Star of Hope,
reported in i Hask. 36, Fed. Cas. No. 13,312, décision by Judge Fox, of
the District of Maine, and on an appeal taken from that décision, which
was affirmed on circuit by Associate Justice Clifïord, of the Suprême
Court. 8 Fed. Cas. 1115, No. 4,710. That case is singularly like the
case at bar, and the opinions of both of the learned judges are supported
by a plentiful référence to authorities of the most convincing character.
In that case the disabilities arose through a misadventure in the navi-
gation of the vessel when it was dispatched from Boston to Farming-
dale, in Maine, where it was expressly stipulated that the charter party
should commence, and on page 42, Judge Fox, after citing a number of
cases supporting the obligation of the charterer when the vessel is de-
layed for repairs, remarks:
"This principle Is so well established, that I do not understand It as ques-
tioned by the learned eounsel for respondent; but it is contended that, ad-
mitting such to be the law when the vessel meets with disasters in the prose-
cution of the voyage, it is not applicable to the présent case, as the voyages
stipulated for In charter had not yet commenced. It is very certain that the
vessel was bound to proceed from Boston to Farmingdale under Implied con-
ditions, as the charter party is sllent on this subject; and it is difficult for
me to flnd satisfactory reasons why any other conditions should arise or be
implied, in relation to this portion of her undertaking, than the law would
Imply in case the charter had merely said, 'vessel to proceed from Boston to
Farmingdale,' or the charter had commenced at Boston, and had provided
for the vessel going in ballast from Boston to Farmingdale and load ; and in
thèse cases, if the vessel had been delayed by storms and needed repair, and
so was compelled to refit, and delay was occasioned thereby, neither party
would bave been exonerated from the performance of the contract, if the ves-
sel was seasonably repaired and arrived at the port of loading."
On page 45 the court continues :
"I am therefore of opinion that the shipowners In this case are under the
same liabilities as to delays and risks from dangers of the sea as they would
hâve been under a charter commencing at Boston, and binding them to send
their vessel to Farmingdale for a cargo. In that case they would not assume
the risks and delays from périls of the sea, and they did not under the prés-
ent agreement"
The case at bar is much stronger than that discussed by Judge Fox,
for in the charter party before the court a stipulation was inserted in
writing, as follows : "It is understood that the vessel proceeds to Sa-
932 129 FEDEKAL EEPORTEK.
vannah in ballast after having discharged her présent cargo in Europe."
This stipulation was made while the vessel was in Savannah. It nec-
essarîly followed that her voyage to Europe was in contemplation of
the parties, and therefore the agreement that détention resulting from
the dangers of navigation should be mutually excepted would not avoid
the contract under the stringent clause on that subject above quoted.
The opinion of Justice Clifford in the same case, reported under the
title Fearing v. Cheeseman et al., 8 Fed. Cas. 1115, No. 4,710, is aiso
highly valuable. Discussing the contention that the charter party was
not to attach until the vessel arrived at the place where it was expressly
stipulated the charter party should begin, the learned circuit justice re-
marks :
"The contract became operatlve when the charter party was exeeuted and
delivered. The obligation of the shipowners to put the vessel in a seawoi-thy
condition, and cause her to sail for the place of loading withln a reasonable
tlme, commenced when the charter party became operatlve, and continued in
force till the covenants were fulfllled. Performance of that Implied cove-
nant was as much required by the charter party as that notice of readiness
of the vessel to receive cargo be given on her arrivai at the place of loading.
Such notice could not properly be given before the vessel actually arrived,
and the Implied requirement was that she should proceed there with reason-
able dispatch, the dangers of the seas and navigation excepted. Unavoidable
delay arislng from thèse causes would not discharge the charterers from their
covenant to load the vessel, unless the delay was so great as to frustrate the
voyage or deprive the freighter of the beneflt of his contract Where the delay
ensues from unforeseen causes, but the voyage is not frustrated, the ehar-
terer is entltled to his claim for damages, as compensation for any Injury he
may sustaln."
The owners in this case seem to hâve acted with entire frankness,
and with marked considération for the rights of the Shotter Company.
They appreciated the fact that there might be some delay to that com-
pany, and, as soon as their ship was brought to the shipyard at Pors-
grund, they communicated with the Shotter Company, offering to sub-
stitute another vessel, or to cancel the charter party. This proposition,
as we hâve seen, the latter peremptorily refused to accept. No interest
or considération prompting the shipowners to cancel the charter party
appears anywhere in the évidence. It was their interest to carry it out.
It was, however, from the condition of their vessel, absolutely im-
possible for them to do so as soon as the Shotter Company wished ; but
instead of accepting their proposition to cancel the contract and allow
them to secure a vessel elsewhere, it appears that the défendant Com-
pany, aware the Hercules could not return to Savannah as soon as had
been perhaps contemplated, while holding them to the contract, seizes
upon the misfortune of the owner as a basis to exact a réduction in their
freight charges. The mutual agent of the contracting parties, by rea-
sonable and well-grounded appeals by letter to the considération of the
Shotter Company, seeks to change their ultimatum. This, however, is
nnsuccessful. At no time does the Shotter Company definitely cancel
the charter party until long after the Hercules has reached the port of
Savannah and is awaiting her cargo. Then the défendant waives its
claim for damages and répudiâtes the contract. This can be considered
as nothing less than an insistence upon the part of the Shotter Com-
pany that the Hercules shall yet make her voyage under the contract.
053
The opinion of the court is that, in waiving their daim for damages,
the Shotter Company waive ail right to take affirmative action against
the Hercules for a delay which, as we hâve seen, was not unreasonable,
and was occasioned by dangers of navigation. And it was no longer
optional with the Shotter Company to adopt the arbitrary and oppressive
action indicated by this letter.
In view of the uncontradicted évidence that the repairs were made
as expeditiously as possible, and that the additional repairs ordered by
the Norwegian Veritas were made at the same time with those ren-
dered necessary by the grounding on Tybee bar, the whole contention
of unreasonable delay by the Shotter Company must dépend upon four
days' voyage of the Hercules from Hamburg to Porsgrund and re-
turn. That the venture of the Shotter Company was not wholly frus-
trated is évidence by the fact that, after refusing the ofïer of the Her-
cules owners to substitute another ship, for a small additional charge
they secured another vessel.
The court is then of the opinion that the claim for damages set forth
by the libel of the Shotter Company must be disallowed. We are fur-
ther of the opinion that the plaintiff is entitled to recover damages for
breach of the charter party, and for ail demurrage sustained during the
period when the Hercules lay in the harbor of Savannah while attempt-
ing to obtain cargo. It would, liowever, seem équitable, if the Shotter
Company, as contended, was obliged, at a greater rate of freight than
that stipulated in the charter party under considération, to charter an-
other vessel to take cargo provided for the Hercules, that the damages
recoverable by the owners of the Hercules should be reduced by an
amount equaling the sum of the increased freight charges. An inquiry
vvill be ordered before the master to ascertain : First, was the Shotter
Company compelled to obtain another vessel or vessels to carry the
amount of cargo which would hâve been transported by the Hercules
but for the delay? Second, what increased freight rate, if any, was
paid by Shotter Company for the transportation of such cargo? And,
third, the amount of damages sustained by the Hercules because of the
liability of the Shotter Company for the breach of its charter party, and
for the demurrage resulting therefrom. A decree will be rendered for
the plaintiffs for the amount thus found, less the sum of the increased'
charges, if any, above those fixed in the charter party, which were paid
by the Shotter Company for the transportation of the cargo intended
for the Hercules. Ail costs will be allowed against the Shotter Com-
pany.
O'SHAUGNESSX v. HUMES et al.
(Circuit Court, W. D. Tennessee. March 21, 1904.)
Parties— Suit in Equitt by Assignée— Neoessity of Joining Assignob.
One who bas assigned ail bis Icgal and équitable Interest in the subject-
matter of a eontroversy and ail rights of action, légal and équitable, with
respect to such interest, is not an indispensable party to a suit in equity
by tbe assignée to enforce the rights assigned.
Vi 1. See Assignments, vol. 4, Cent. Dig. § 215.
954 12!) IfEDERAL REPORTEK.
2. Equity Pleading— Speaking Demueeee.
A speaking demurrer, or one setting up facts extrlnslc to the Mil, wlll
be overruled for Its defect of form without considering the merlts of the
défense, which can only be made by plea or answer.
8. Demubeeb— Questions Peesented— Consteuction of Conteact.
A court wlll not, on demurrer, construe an Instrument set up In the
pleading demurred to, and détermine the rlghts of the parties thereunder,
when It Is obscure and ambiguous in its language, and so uncertain in
meanlng that it cannot be fairly interpreted without a knowledge of the
surrounding facts and circumstanees.
In Equity. On demurrers to bill.
Metcalf & Metcalf, Thos. B. Turley, and Frank P. Poston, for de-
murrer.
Gréer & Gréer, opposed.
HAMMOND, J. Chronologically, the averments of this bill may
be stated as f ollows :
(i) Prior to March, 1887, the défendant Milton Humes was the attor-
ney and managing agent of Mrs. Ada Lane, and in that relation became
indebted to her for sums of money not necessary now to notice, because
they are not involved in the controversy over this demurrer.
(2) March 17, 1887, he sold to his own wife, one of the other de-
fendants, Mrs. ÉUelee C. Humes, real and personal property belonging
to Mrs. Lane. The real estate in Madison county, Ala., was conveyed to
Mrs. Humes for a recited considération of $35,000, and "pictures, draw-
ings, paintings, statuary, and other personalty," amounting to $5,000.
It is not understood that the money for the personal property is involved
in this controversy over the demurrer. The averments of the bill con-
cerning this transaction are meager, indeed. The deed is neither set
out in its particulars, nor exhibited with the bill, and, if it has any such
relation as that which is suggested in the argument to the subséquent
transactions between the parties, so as to create the relation of princi-
pal debtor between Mrs. Humes and Mrs. Lane, it is only a matter
of inference, and is scarcely made to appear by the spécifie averments of
this bill. Presumably Mrs. Humes in some form, we do not know how,
agreed to pay the recited considération of $25,000, but this is only an in-
ference to be drawn from the bare averment of the bill that the deed
of conveyance recited a considération of $25,000.
(3) The bill avers that on the 3d of August, 1887, the défendant
Milton Humes informed Mrs. Lane that the balance due her from ail
sources in the management of her property was $30,000, and that he
had invested that amount in good securities yielding 8 per cent, interest.
How this information was given is not stated, but the bill states that
"this instrument [whether it means the deed to Mrs. Humes or the in-
strument containing the information we cannot say] should hâve
brought the said Mrs. Lane an annual income of twenty-four hundred
dollars." Then the bill states that the complainant, who is Mrs. Lane's
assignée, is now informed and believes that Humes never made any in-
vestment of the money, but converted the moneys realized by him to his
own use, and only made remittances and disbursements on Mrs. Lane's
account out of his own personal funds.
HUMES. 955
(4) The bill avers that on the 4th of September, 1887, Mrs. Humes
and her husband conveyed the real estate in Alabama to one James F.
O'Shaugnessy for $25,000, that this considération was never paid, and
on the 26th day of January, 1892, O'Shaugnessy and his wife "recon-
veyed" the property to Milton Humes. Again, this deed is not set forth
in its particulars, nor is it exhibited with the bill, nor are there any
averments about it in its relation to subséquent transactions. Evidently
it was not a "reconveyance," for that would hâve required a deed to
Mrs. Humes herself, while this was to her husband. No averments
are made in the bill as to the payment of the considération or any un-
dertakings of Humes in relation thereto, either with O'Shaugnessy or
with his wife, Mrs. Humes, and we know nothing from the bill as to any
adjustment of that matter as between thèse parties. What disposition
was made of the indebtedness to Mrs. Lane from Mrs. Humes which
is to be inferred from the fact that the property was conveyed to the
latter by Mrs. Lane's agent and attorney is not shown by the bill, and
therefore it throws scarcely any light except by inference upon the sub-
séquent transactions involved in the controversy over this demurrer.
It is not to be assumed as one of thèse inferences, however, we should
think, that Mrs. Humes, without the consent of Mrs. Lane, by this trans-
action denuded herself of any indebtedness which she owed to the latter
because of her original purchase of Mrs. Lane's property.
(5) The bill next avers that on February 13, 1892, the défendant
Milton Humes conveyed another of the lots in Alabama to one Mrs.
Wells for a considération of $6,500, and that the title to the other three
lots still remains in the said Milton Humes.
(6) The bill avers that Mrs. Lane was constantly making unsuccess-
ful efforts to secure an accounting with Milton Humes, and at last, on
the ist day of October, 1889, he and his wife, "well knowing that the
money recited in the deed of conveyance to Mrs. Humes as the consid-
ération of twenty-five thousand dollars had never been paid, delivered
to her an instrument of writing, as follows :
"This instrument of writing. witnesseth : That we, the undersigned Milton
Humes and his wife, Ellelee C. Humes, hereby acknowledge that we hold for
Mrs. Ada Lane Twenty-iive Thousand ($25,000.00) which is loaned eut
at 8 per cent per annum. We are to coUect the interest and pay it to her as
near as we can in monthly Installments as called for by her.
"[Signed] Milton Humes.
"Ellelee 0. Humes."
(7) On the 7th of March, 1896, Milton Humes, being the owner of
real estate in Shelby county, described in the bill as situated on the
Poplar Boulevard, and known as the "Humes Place," executed a mort-
gage to his wife, the défendant Ellelee C. Humes, conveying this real
estate to her. The bill avers that the mortgage "recites that it is given
as security to Mrs. Ellelee C. Humes on account of her signing the
above-described acknowledgment of twenty-five thousand dollars in-
debtedness to the said Mrs. Ada Lane, and for the considération of ten
dollars in hand paid." Again, the bill gives no further particulars as to
this mortgage, nor does it exhibit the same, or a copy thereof, with the
bill, nor in terms make it a part of the bill, but it is referred to as being
of record in the register's office of Shelby county, giving the book and
956 129 FEDERAL KEPORTER.
page where it is to be found. It will be noticed that the bill does not
say that the mortgage was given as a security to Mrs. Humes in any
particular capacity or relation to thèse transactions, but it simply avers
that the mortgage recites that it was given as above stated in the quota-
tion from the bill. By consent of counsel arguing this demurrer, we are
permitted to turn to the brief of counsel for the complainant, where
the récitals of the mortgage are more f ully set f orth, as f ollows :
"Know ail men by thèse présents, That I, the undersigned Milton Humes,
am Indebted to Ada C. Lane, as evidenced by my obligation to her, which is
also signed by my wife, Ellelee 0. Humes, — and Whereas, I am désirons of
securing my said wife from any liability by reason of her signlng sald note—
"New therefore, In considération of the premises and the sum of Ten Dollars
to me In hand paid, the receipt of whieh is hereby aeknowledged, I, the under-
signed Milton Humes, do hereby bargain, sell, allen, and convey unto my safd
wife, Ellelee C. Humes, the followlng described property, to-wit :
"[Description.!
"To hâve and to hold the above described property, unto the said Ellelee C.
Humes, her heirs and assigna forever, but nevertheless, upon the followlng con-
ditions : That whenever the sald Milton Humes shall pay and discharge said
debt to said Ada C. Lane, then thIs conveyance shall become null and void, and
of no effeet, and the said Ellelee C. Humes shall make this conveyance satisfied
on record thereof, or, re-convey the property above described to said Humes,
as he may elect."
It is to be noticed that even the récitals in the mortgage are somewhat
îndefinite, and the whole instrument seems to be quite obscure in its
language as disclosing its purpose. It recites that Milton Humes is
indebted to Mrs. Lane, "as evidenced by my obligation to her, which
is also signed by my wife," and in the very next clause it expressed a
désire to secure his wife from any Hability by reason of her signing
"said note." This imperfectly fits the instrument of October i, 1889,
which is neither a note nor in the ordinary form of an obligation of in-
debtedness, as will be observed by turning to the copy of it contained
in this statement. That document states only that "we hold for Mrs.
Lane Twenty-five Thousand Dollars, which is loaned at eight per cent
per annum," and in terms it seems to promise only to collect the inter-
est, and pay it over in monthly installments. It appears, however, to be
assumed by both the complainant and the défendant that this is the doc-
ument referred to by the récitals of the mortgage, though that is alto-
gether a matter of inference, rather than from any definite statements
that are contained in the mortgage itself ; very much Hke the many oth-
er inferences that are left open by this bill in its statements about thèse
instruments so meagerly set out in it. It seems to the court that too
much is left to inference by the pleading, which is not nearly so spécifie
in its indications of the groundwork of this lawsuit as are the arguments
and brief s of counsel, in which either side treats of the object and pur-
pose of the bill, and states the inferences to be drawn from its aver-
ments, quite differently from the other. Neither agrées with the other
as to the nature and character of the pleading. The complainant in-
sists that Mrs. Humes is a principal debtor by reason of thèse transac-
tions, while the défendant insists that she is only a surety, and the fact
is, probably, that she may be either one or the other, so far as we hâve
any knowledge of her relation in respect of thèse transactions from the
averments of the bill itself, or even from the instruments which the bill
957
so sparsely sets out. But it is to be observed that the mortgage itself is
to become null and void only when "the said Milton Humes shall pay
and discharge said debt to said Ada C. Lane."
(8) The bill next avers that on the 24th of March, 1903, the défend-
ants Humes and wife sold the Memphis property to the other défend-
ants Cooper and wife. No considération is stated for the deed, nor any
of its particulars, except the bare fact that the deed was made and ex-
ecuted ; but the bill avers that the preliminary negotiations and the ex-
écution of the deed itself were intended as a fraud upon the rights of
Mrs. Lane and her assignée, the complainant in this case. The grounds
of this alleged fraud are not very distinctly set forth, and it is based
upon the averment that the complainant is informed and believes that
the défendant Milton Humes could not legally convey the property
which was held as security for the indebtedness of Humes and wife to
Mrs. Lane, until Mrs. Lane would sign a release of whatever claim or
lien she had. Therefore, in February, 1903, the said défendant Humes
endeavored to secure her release, which she refused to sign until the de-
fendant had rendered her an account, which was finally done, showing
that the said défendants Milton Humes and his wife were indebted to
Mrs. Lane in the sum of $31,698.88, whereupon Mrs. Lane refused to
release her claim or lien upon the property, notwithstanding which
Humes and his wife conveyed the property to Cooper and wife. It is
alleged that this conveyance was made with the intention of not paying
the debt to Mrs. Lane or her assignée, and that the conveyance "was
made and contrived of fraud, covin, collusion, and guile, with the intent
and purpose to delay, hinder, and defraud the said créditer of the said
Milton Humes and his wife of their just and lawful debts."
(9) The bill finally allèges that Cooper and wife had actual knowl-
edge of this indebtedness, and of the mortgage to secure it, as well as
the constructive notice given by the registration of the mortgage on
the records of the county, and that they took the deed with the intent
to hinder, delay, and defraud Mrs. Lane and her assignée of their just
debt.
The prayer of the bill is: (i) For parties and process; (2) for an
accounting between the complainant and the défendants Humes and
wife, so as to ascertain the amount of the indebtedness; (3) for a de-
cree against Humes and wife for the payment of this indebtedness, prin-
cipal and interest ; (4) that the deed to Cooper and wife be declared
to be fraudulent and void; (5) that the complainant be declared to
hâve a valid and subsisting lien for the $25,000 and interest thereon
from the ist of October, 1889, to date, upon the property described in
the mortgage, until the indebtedness is paid in full by the défendant
Milton Humes and wife ; (6) "that, to secure and impound said prop-
erty as described within, a writ of attachment be issued by fiât of the
court, and be levied on said tract of land" ; (7) complainant prays for
such other, further, and gênerai relief as he may be entitled to on the
facts at the hearing.
To this bill both Humes and wife and Cooper and wife demur sep-
arately, but they may be treated together. The grounds of demurrer
are : (i) That Mrs. Lane is a necessary party. (2) That Mrs. Humes,
heing a married woman, could not be bound upon any obligation to Mrs
958 129 FEDERAL EEPOETER.
Lane. (3) That by the laws of Alabama (Acts 1886-87, p. 82, § 9) it is
provided that the husband and wife may contract with each other, but
ail contracts into which they enter are subject to the rules of law as to
contracts made by and betvveen persons standing in confidential rela-
tions, and the wife shall not, directly or indirectly, become the surety
for the husband ; which law was in force at the time of the exécution of
the obligation mentioned in this bill. (4) That the mortgage was not
made to secure Mrs. Lane,. but only Mrs. Humes as surety. (5) No al-
légation of Humes' insolvency.
The demurrers are very numerous, and présent the questions sought
to be raised in many forms, but they ail hinge around thèse which hâve
been above mentioned, and we need not consider any others at the prés-
ent time. Indeed, except the first ground of demurrer — that Mrs. Lane
is a necessary party — ail the other grounds turn upon the coverture
and alleged suretyship of Mrs. Humes. As to the first ground of de-
murrer, it should be definitely overruled. The assignment by Mrs.
Lane to the complainant, set out in the bill, is so complète in itself that
it conveys ail légal and équitable interest that she had in the subject-
matter of this controversy, and ail rights of action, légal and équitable,
which she might hâve to enforce that interest; and lience, under the
strictest rules upon the subject of making the assignor a party to a bill
in equity filed by an assignée to enforce the rights that hâve been as-
signed to him, it does not appear upon the face of the bill that Mrs. Lane
is a necessary party. Possibly it may be made to appear by an answer or
plea stating some of the extrinsic facts, such as bave been suggested in
the argument, that she is a necessary party, but it does not so appear
upon the face of this bill. As it is laid down, the true principle on this
subject would seem to be that in ail cases where the assignment is abso-
lute and unconditional, leaving no équitable interest whatever in the
assignor, and the intent and validity of the assignment is not doubted or
denied, and there is no remaining liability in the assignor to be afïected
by the decree, it is not necessary to make the latter a party. At most
he is merely a nominal or formai party in such a case. It is a very
différent question whether properly he may not be made a party as
a légal owner, although no decree is sought against him, for in many
cases a person may be made a party, though it is not indispensable.
I Daniel, Ch. Pr. (5th Ed.) 198, note. Also in the fédéral courts it is
a rule that where it appears, as it does from the bill, that the absent
party is out of the jurisdiction, the complainant is excused from making
him a party, unless he be an indispensable party ; though this rule has
probably not so much force now in cases where the présence of the ab-
sent party would not oust the jurisdiction, since under the act of 1872
provision is made for bringing in absent parties by substituted service
or by publication, where there is such an interest in the property within
the district as to authorize that course under the act, which may be
doubted on the facts stated in this bill. If the présence of the absent
party would oust the jurisdiction, of course the complainant would still
be excused from bringing him in, unless bis présence in the suit were
indispensable. Under the assignment exhibited with the bill Mrs. Lane
does not appear to bave remaining any interest in the real estate sub-
ject to the mortgage in controversy. At most she is only a proper par-
O'SHAUGNESSX V. HUMES. 959
ty, and possibly, under the circumstances of this case, could not be
brought in by the substituted service of the act of 1872, if she were
formally named as a party to the bill. Rev. St. § 738. It seems,
under the authority above cited from Daniel's Chancery Practice, that
the custom is to make an assigner a party complainant where he can
be so brought in, though, of course, he may be made a party de-
fendant if deemed advisable or made necessary by the circumstances.
If Mrs. Lane does not choose to become a party complainant, and did
not voluntarily appear, it is probable, under the practice of the court,
that she could not be compelled to become a party to this suit. That
ground of demurrer is therefore overruled.
The court is of opinion that it is neither necessary nor proper to
décide the other grounds of demurrer which bave been filed and argued
at the bar. They proceed upon the almost gratuitous assumption that
upon the face of the bill Mrs. Humes occupies the attitude of a surety
to her husband. It may be that she is so, but it does not so appear upon
the face of this bill. It is very conveniently assumed by the défendants
that she is sued as a surety, and that this is a bill to subrogate the com-
plainant to her rights as a surety to a mortgage provided by the debtor
for her benefit ; but none of this appears upon the face of the bill un-
less it may be by an inference which the défendants choose to draw
for the purpose of presenting the demurrer. The bill is very difficult
to define. It seems to be in one aspect a bill to set aside a fraudulent
conveyance made to Cooper and his wife, for the purpose of defeating
Mrs. Lane's security; but, if the complainant bas a mortgage to secure
the debt to Mrs. Lane, and his lien inheres in that instrument by its
terms, then it is quite immaterial whether Cooper and wife are fraudur
lent vendees or such in the utmost good faith. Except in a very gên-
erai and inferential way the bill does not appear to be a bill to fore-
close such a mortgage. It does not pray for any foreclosure and sale of
the mortgaged property, but it does pray for an attachment of the prop-
erty, "to secure and impound" the property by such attachment, possibly
upon the theory that the bill is to set aside a fraudulent conveyance
from Humes and wife to Cooper and wife. But, after ail, there is a
gênerai prayer for relief, and upon the averments of the bill it is rather
to be inferred that Mrs. Humes is sought to be held as a principal debtor
by thèse transactions than as any surety for her husband, and that it is
in that relation she is treated by the complainant in the pleading. At
ail events, the bill may as readily be construed as a bill for that pur-
pose and as a bill to foreclose the mortgage made by her husband to
secure her debt and his debt, as to construe it as a bill for the subroga-
tion of the complainant to any rights of Mrs. Humes as a surety.
The paper signed by Humes and his wife is not, on the face of it, a déc-
laration of suretyship ; neither does the mortgage, by its récital, con-
tain any déclaration of suretyship ; and, when closely analyzed, neither
of thèse instruments can be said upon their face to présent Mrs. Humes
in the attitude of a surety, and, looking at the transactions from the be-
ginning to the end out of which the obligation and the mortgage grew,
she originally occupied the attitude of the primary and principal debtor
to Mrs. Lane. The notion of her being a surety for her husband in
the signing of this paper arises out of the peculiar phraseology of the
960 129 FEDBKAL REPORTEE.
mortgage, in whîch it is recited that he secures her against any liabîlity
for signing the paper ; but, non constat, that she signed it as a surety,
and not as a principal debtor. The most that can be said is that the in-
struments are ambiguous, and only to be interpreted by the light of the
real facts growing eut of ail thèse transactions, and that it does not ap-
pear upon the face of the bill definitely and distinctly that she is a sure-
ty. Therefore this demurrer in respect of thèse matters is what is
known as a speaking demurrer. They state by way of défense facts
that are extrinsic to the bill. As an illustration, it is stated in the de-
murrers that in Alabama a wife is forbidden to become a surety for her
husband. That does not appear by any averment of the bill, and can
only be made to appear hère by our taking judicial notice of the laws
of Alabama ; but as it does not appear on the face of the bill or in the
terms of the instrument that she is a surety, by the same law taking ju-
dicial notice of it, if she be a principal debtor, she had a right to make
the contract. The dominant fact relied upon that she is a surety is one
that at most is only an inference drawn by the défendants themselves
from the averments of this bill. Such an inference is not properly a
basis for an adjudication of the rights of the parties to this suit, and if
it be true as a fact it must be set up by plea or answer as a défense to
this bill. Imperfect as the bill is, it is, under our libéral method of prac-
tice, sufficiently framed, even under the gênerai prayer, to decree a
foreclosure of this mortgage if Mrs. Humes be a principal debtor, whose
obligation as such has been secured by her husband. The language of
her obligation is one of coequal, if not joint, obligation with her hus-
band, and there is not the least indication from that paper that she
signed it as a surety. He and she use in that paper the language of
joint or coequal obligation, and not the language of suretyship. A
speaking demurrer, or one making défense by setting up facts extrinsic
to the bill, will always be overruled because of that infirmity in the
demurrer. Stevvart v. Masterson, 131 U. S. 151, 159, 9 Sup. Ct. 682,
33 L. Ed. 1 14 ; Richardson v. Loree, 94 Fed. 375, 379, 36 C. C. A. 301 ; i
Bâtes, Fed. Eq. 210; 6 Enc. PI. & Pr. 298; 25 Enc. L. (2d Ed.) 1161 ; 2
Danl. Ch. Pr. (ist Ed.) 72 ; i Danl. Ch. Pr. (sth Ed.) 587 ; 2 Bouv. Die.
536. Wherefore the court, without expressing any opinion upon the
questions of law that hâve been argued upon thèse demurrers, is con-
strained to overrule them because they do not présent the questions that
hâve been argued, and for no other reason. It will be time enough to
consider thèse questions when they are properly raised upon the record.
They cannot be considered now.
Défendants' counsel désire a more spécifie .ruiing on that ground of
the demurrer which relates to the construction of the instrument secured
by the mortgage, particularly that which insists that it is only a security
for the interest, and not the principal of $25,000. Obviously, the instru-
ment cannot be fairly interpreted upon the face of it, and within its
own terms. It clearly belongs to that class of documents which must
be construed in the light of the facts surrounding its exécution, and is
quite unintelligible without it. This outside light, it may be inferred,
can only be shed upon it when ail the facts are known at the hearing.
Even the mortgage is not exhibited with the bill, and the averments
about it are destitute of ail particulars. They seem to assume that it
8AXJVAGEAU V. RIVEE SPINNING 00. 961
secures the $25,000 as well as the interest, and it is not impossible to
conceive that the mortgage, when brought into évidence, may, by its
particular language, interpret or throw light upon the instrument secur-
ed by it. We are asked by the demurrer to rule against this averment
of the bill, which ordinarily is confessed by a demurrer, and déclare
on the language of the instrument secured that the mortgage is not as
broad as the bill avers it is. If it were a plain proposition that the in-
strument of indebtedness itself is confined to a promise to pay the inter-
est only, non constat that the parties might not by the mortgage itself
hâve acknowledged an obligation for the principal debt, and secured it,
as well as the interest ; for it appears by the mortgage that Humes, who
was the owner of the property, promised to pay and discharge his
debt to Mrs. Lane, and the mortgage was to be null and void only upon
his discharge of that debt; so that Mrs. Humes' relation to it may be
wholly immaterial in a court of equity. She might be held to be only a
trustée of the title for Mrs. Lane. We cannot tell from the bill, which is
as indefinite as the instrument in controversy, as it merely avers that the
mortgage "is given as security to Mrs. Humes on account of her signing
the above-described acknowledgment of $25,000 indebtedness." What
the language of the mortgage is we do not know, nor what the facts
are about this alleged debt, except in the scant way, shown in the fore-
going part of this opinion, being left as we are by the pleading mostly
to inferences from barely stated averments of fact. But the inferences
we are asked to draw by the défendants on this demurrer are not more
satisfactory than the inferences we are asked to draw by the plaintiflf on
the argument from the scant averments of the bill ; and the assumptions
of fact by the one party are a very good set-ofï against the assumptions
of the other on the présent state of the pleadings.
The instrument of alleged indebtedness is unique in its language, if
not artful, is out of the ordinary style of obligation, obscure as well as
ambiguous, and altogether too uncertain in its meaning to enable any
court to interpret it without knowing more about the facts. The bill
does not throw much light upon it, but such as it does is not in favor of
the interprétation given to the contracts by the demurrants. They may
be right about their construction, but it does not satisfactorily appear to
be so upon the face of the instrument nor upon the face of the bill.
Therefore the question should be reserved for the hearing, as indicated
in the foregoing part of this opinion,
Demurrer overruled.
SAUVAGEAU v. RIVER SPINNING CO.
(Circuit Ciourt, D. Rhode Island. Aprll 25, 1904.)
No. 2,686.
Masteb and Sbevant — Injuries to Servant— Rtjles— Evidence— Weight.
Where, in an action for injuries to a servant while cleaning a cardlng
macliine, the évidence as to whether plaintiff was instructed tô clean
the machine while in motion was eonflicting, and plaintiffi's counsel ar-
gued to the Jury that it was unreasonable to belleve that plaintiff, after
being expressly forbidden to clean the machine while in motion, as de-
129 F.— 61
962 , ,. 129 FEDERAL EEPOUTEE.
fendant testified, would bave proceeded wlthîn a few minutes to dis-
obey such instructibn, a verdict in favor of plaintifl on such issnfi should
not be set aside.
2. SaME — ASSUMPTION OF RiSK.
Plalntlff, wbile engaged in cleanlng a wool carding machine wbile in
motion, vvas injured by having bis band caught between the cylinder and
one of tbe top rolls of the machine. Tbe sbaft wbich plalntifC was
cleaning projeeted beyond the frame of the machine, and at tbe end tbere-
of was a geat over wbich a chain ran. Wool having coUected on the
sbaft inside tbe gear and outslde tbe cylinder, plaintifC attempted to
take the wool off the sbaft as be was told to do. The wool got caught
in the cylinder and dragged bis hand in sidewise. Held that, wbile the
risk of getting bis hand caught in tbe gear and chain was obvious, plain-
tiff not having placed bis hand where the rolls or cylinder would catch
it, tbe risk that it would be drawn in by tbe wool caught in the cylinder
was not so obvious tbat plaintiff assumed the same as a matter of law.
3. Same— CoNTEiBUTORY Négligence.
Where plaintiff, who was 18 years of âge, and had worked in the
carding room of a factory only 3 days prior to bis injury, was instructed
by bis superior to lift up bis sleeve and clean a wool carding machine
wbile in motion, and to look out for the chain at the end of the sbaft,
wbich danger be avoided, but he puUed ofC the wool from the sbaft in
such a manner tbat it became caught in the cylinder and drew bis band
in, he was not tbereby guilty of contributory négligence as a matter of
law.
Archambault & Gaulin, for plaintiff.
Comstock & Gardner, for défendant.
BROWN, District Judge. The plaintifï's right hand was seriously
injured by being caught between the cylinder and one of the top
rolls of a carding machine. He was engaged in cleaning the machine
while it was in motion. The plaintifï, at the time of the injury, was
about i8 years old, and had worked but 3 days in the carding room,
although he had worked for several years about the mill. He testi-
fied that he was instructed to clean the machine while in motion. Up-
on this question there was an issue of fact, to be determined by the
jury upon conflicting évidence. The defendant's brief admits that
there was a conflict in the direct testimony on this point between the
plaintifï and Marchand, the second hand ; but contends that, in view
of the évidence of a strict rule of the mill forbidding the cleaning of
machinery while in motion, and of the évidence of Marcroft, the over-
seer, that he also had instructed the plaintifï not to clean any ma-
chinery while in motion, and had told him specifically to keep his hands
away from the rolls, the jury should hâve found that the plaintifï was
not ordered to clean the machine while in motion. The plaintifï's
counsel, however, argued to the jury, and with apparent effect, that
it was not reasonable to believe that the plaintifï, after being ex-
pressly forbidden to do so, would hâve proceeded, within a few min-
vites, to clean the machine while in motion. Thus not only the direct
évidence, but the probabilities of the case, were presented for the
considération of the jury; and I iînd myself unable to say that the
jury overstepped its province, or did not act within the bounds of
T 2. Assumption of risk Incident to employment, see note to Cbesapeake &
O. K. Co. V. Hennessey, 38 C. C, A. 314.
SAUVAGEAU V. RIVER SFINNING CO. 9(>3
reason as to this point. If such direction were given, it exposed the
plaintiff not only to the dangers from the chain and gears at the
end of the shaftj concerning which he had been cautioned, but aiso
to the danger of having his hand caught between the cylinder and
rolls in the manner described by him.
The défendant mal<es no contention that the risk from which the
plaintiff suffered was one of the ordinary risks of the business, but
contends that the risk was obvious. It seems hardly crédible that
the plaintiff was not aware of the existence of the cylinder and rolls,
and of their dangerous character should he get his hand between
thera. It is not clear, however, that the spécifie risk of having his
hand drawn between the cylinder and the rolls by the wool which
hè was removing from the shaft in the process of cleaning was a
risk obvious to one of limited familiarity with the work. The shaft
which he was cleaning projected beyond the frame of the machine
about seven inches. At the outside end was a gear about five inches
in diameter, over which a chain was running. The risk from this
was both obvious and actually known to the plaintifif. Wool had col-
lected on the shaft inside the gear and outside the cylinder. The
plaintiff testified : "I was taking the wool off the shaft, and the wool
got caught in the cylinder and dragged my hand jn * * * side-
ways." While it is true that in cleaning the machine while in motion
the plaintifï assumed the obvious risk of getting his hand caught in
the gear and chain on the outside end of the shaft, and while it is
highly probable that he also knew that the rolls and cyHnder at the
inner side were dangerous, and could not recover if he voluntarily
or carelessly placed his hand so near the cylinder and roll that it
was caught thereby, yet, according to the plaintiff's testimony, in
cleaning the machine he did not place his hand where the rolls and
cylinder caught it, but in removing the wool, as he had been told to
do, the wool caught in the cylinder, and dragged his hand between
the cylinder and rolls. Was this an obvious risk? I am not satisfîed
that it was.
The question of contributory négligence remains. Was the plain-
tiff guilty of contributory négligence in attempting to clean this ma-
chine while in motion, or in getting his hand caught? In view of
what we hâve already said, it must be assumed, on the pétition for a
new trial, that the plaintiff was instructed by the second hand to lift
up his sleeve and clean the machine in motion, and to look out for
the chain at the end of the shaft; that he avoided that danger, but
pulled off the wool in such manner that it became caught in the cyl-
inder and drew his hand in. Upon this state of facts it cannot be said,
as a matter of law, that the jury should hâve found the plaintiff guilty
of contributory négligence.
The allégation that the working place was not properly lighted
was not sustained by the proof.
While there is rooni for serious doubts as to the merits of the
case, yet the jury has acted within its province in finding the facts,
and there is no sufficient reason for setting aside the verdict.
Pétition for a new trial denied.
964 129 FEDERAL KEPOETBE.
THE DEUTSCHLrAND.
(District Court, S. D. New York. Aprll 23, 1904.)
1. COLLISTON— Sl-EAMER AND SAILING VESSEL— StEAMSHIP TUBNING IN NeW
YoBK Bat.
ïbe Deutschland, a large steamship 687 feet long, after having been
passed by the health officer at the quarantine station, Staten Island,
where she had been at anchor, headed downstream on account of the flood
tlde, undertook to swing around wlth her head to the eastward. and In
doing so backed, and her propeller hood came into collision with the
Snow, a small schooner wbieh had also just been released from quar-
antine, and had started northward at a distance of some 130 feet
astern of the steamship before the latter backed. She made an effort
to get ont of the way, but could not do so in time. The Deutschland had
no lookout astern, and, according to the welght of the évidence, gave no
backlng signal. Eeld, that for such reasons she was solely in fault for
the collision.
In Admiralty. Suit for collision.
Wing, Putnam & Burlingham, for libellants.
Wheeler, Cortis & Haight, for claimant.
ADAM S, District Judge. This action arose ont oî a collision which
occurred between the libellants' schooner Lavinia M. Snow, laden with
lumber, and the steamship Deutschland, off a point somewhat above
the Quarantine Station, Staten Island, about 8 o'clock on the morning
of the 8th day of September, 1903. The Snow, about 133 feet long,
having been passed by the Quarantine Health Officer, was standing to
the northward under reduced sail, close hauled on the starboard tack,
well to the westward of the channel. Being aided by a flood tide of
about 2 knots strength, she was making about 4 knots over the ground.
The steamship, which had also been passed by the Health Officer, was
manœuvring to get a heading up the bay so as to reach her wharf in the
North River. She was 687 feet long. The flood tide necessitated a
heading down the bay on the part of the steamship while at anchor.
When she becanie entitled to proceed, she hauled around to the north-
ward, through the east. As she was turning and headed somewhat
across the channel, the collision occurred, the steamship's submerged
rudder hood coming in contact with the schooner's starboard side, caus-
ing such damage to the latter that she nearly sank.
The schooner charges that the collision and damages were wholly due
to the steamship, in that she backed without any signais or warning;
did not hâve a lookout properly stationed ; miscalculated the force of
the current and did not hâve a tug to aid her ; did not seasonabîy check
her sternway, and did not keep clear of the schooner.
The steamship's answer, after alleging the difficulty of turning a ship
the size of this steamship, allèges :
"Seventh. And further answering the libel herein, and as a separate and
distinct defence thereto, claimant allèges that on the sald 8th day of Septem-
ber, 1903, the Steamship 'Deutschland' arrived at Quarantine, having com-
pleted a voyage from Hamburg, Germany, to the Port of New York. Sald
'Deutschland' was in ail respects tlght, staunch, well manned and equipped,
and In charge of a compétent Master and offlcers. A compétent pilot was on
the bridge, having brought the vessel in from sea, and was directing her
THE DEUTSCHLAND. 905
moTeraents through the channel to her wharf In the North River. Compétent
lookouts were properly statloned, and attendlng to their duties. While an-
chored at Quarantine, the 'Deutschland's' bow was pointing down stream,
owing to the strong flood tide, and upon ralslng her anchor it became neces-
sary to turn in a comparatively narrow and erowded channel, for the purpose
of proceeding up stream to her wharf. The 'Deutschland' is a steamship of
thousand tons, being one of the largest and most powerful steamships
afloat. To turn such a vessel in the channel ofC Quarantine is a matter of
some difflculty, and is naturally conducted with great care. Upon this occa-
sion the 'Deutschland' was turned in the usual method, by driving one engine
ahead and reversing at reduced speed with the other engine. By this method
the vessel swings around as on a pivot, her stem moving but llttle ahead
during the opération, until nearly stralghtened on her course. Durlng this
manœuvre, and while the 'Deutschland' was pointing nearly across the chan-
nel, with her head to the eastward, the 'Snow,' being unskillfully and negli-
t,ently handied, and approaching head on to the 'Deutschland's' starboard
iiuarter, endeavored too late to pass under the 'Deutschland's' stem, and in
KO doing came in contact with the 'Deutschland' about or slightly below the
surface of the water. There was plenty of room for the 'Snow' to hâve passed
well astern of the 'Deutschland,' and the direction of the wind was entirely
in favor of the schooner, in executing such a manœuvre. At the time that
the 'Snow' approached sufficlently near to the 'Deutschland' to make a colli-
sion appear possible, the 'Deutschland' had no sternway, had little, if any,
headway, and so far as her ability to avoid a collision was in question, was
practically in the position of a vessel at anchor. Her engines were at once
put at full speed ahead, in order to prevent a collision, if possible, and in any
event, to co-operate with the 'Snow' in her tardy efforts to avoid a collision."
The answer then allèges that the schooner was solely in fault in that
she (i) attempted to pass too dose to the steamship's stern, when there
was plenty of room to give her a wide berth ; (2) in overestimating the
speed of the steamship, or underestimating the strength of the tide, or
both, and in delaying her attempt to pay ofï until too late to be suc-
cessful ; (3) that the master or other person in charge of the Snow was
either grossly incompétent or grossly incapable and inattentive, as the
collision which insued was not contributed to in any degree by a diffi-
cult or unusual situation, or the proximity of other vessels, but was the
resuit of an act of stupid and reckless management on the part of the
persons having in charge the movements of the schooner.
The évidence shows that at the time of collision, the Deutschland was
headed across the bay and was going astern through the water towards
the Staten Island shore. It would not be profitable to discuss the tes-
timony in détail. Considérable of it cornes from disinterested sources
and to my mind shows conclusively that the collision, which occurred
about on the line of the anchorage ground, was caused by a backward
movement on the steamship's part. There is a conflict with respect
to whether or not the steamship sounded any backing signal. The
weight of the testimony shows that she did not. She had no lookout
astern.
The schooner, after obtaining pratique, was headed up the bay,
about north or north east, intending to pass about her own length
astern of the steamship, then apparently simply endeavoring to get a
heading towards New York by a turning movement of her screws.
When the schooner observed the backward movement of the steamship,
about 400 feet away, and that she was closing in on the course of the
schooner, the master of the latter ordered the helm to be put to star-
966 129 FEDERAL REPOETEU.
board, dropped the mizzen topsail and let the spanker sheet run off to
facilitate the rudder action. This brought the schooner around to a
heading of about north north west but it did not serve to avoid the
collision, which occurred by the hood coming in hard collision with the
schooner's side about opposite the main rigging.
There is little contention with respect to the rétrograde movement of
the steamship. The testimony of her pilot shows, and it is practically
admitted, that during the turning manœuvre, there was some sternway.
The claimant's principal contention seems to be that the steamship had,
because of her size, the right of way and it was the schooner's duty
to avoid her. , No authorities, however, hâve been submitted in support
of such contention, and however stronglythe argument that compara-
tively small sailing vessels should give way to thèse large steam-
ships might commend itself to the court, it would be in violation of or-
dinary rules to apply it to this case. Evidently the steamship should not
bave backed without seeing whether there was anything in the way of
such manœuvre and certainly should not hâve donc so without signais.
The faults are plain on her part and sufficiently account for the colli-
sion.
Decree for the libellants with an order of référence.
BRYCH V. SOUTHERN RY. CO. et al.
(Circuit Court, D. South Carolina. January 30, 1904.)
1. FEDERAL COUETS— REMOVAL OP CATJSES — tjNDETEEMINED MOTXONa.
Where, at the time a pétition for the removal of a cause was flled, a
motion to make the complaint more defînite and certain was peuding and
undetermined in the state court, such motion was transferred to the féd-
éral court with the record, to be there determined.
2. Same— Time foe Answeeing— Extension.
The removal of a cause to the fédéral court did not extend the time for
answering the complaint.
3. Same— Detebmination.
The time for answering a complaint In a case removed to the fédéral
courts from a state court is flxed by ascertainlng the number of days
which had elapsed between the service of the complaint in the state court
and the date of the removal, suspending the time between such removal
and the date the record reaches the fédéral court, which then begins to
run from the day of the entry in such court, and, as provided by the
circuit court rules (Fourth Circuit), the défendant wlll be in ■ time if he
serves his answer on a rule day within 20 days thereafter.
4. Same— Motion to Remand— Extension of Time.
Where, after the removal of a cause to the fédéral court, a motion to
remand is made, such motion extends the time to answer until the rule
day next succeediug the détermination thereof.
5. Same— Failuee to Answek— Default — Judgment— Vacation — Teems.
Where, after the removal of a cause to the fédéral court, a motion to
remand was made, which was determined before the hearing of a motion
to malîe the complaint more deflnite and certain, which had been flled
in the state court and removed with the record, and by reason of the pen-
dency of such motion undetermined défendant flled no answer within the
If 2. See Removal of Causes, vol. 42, Cent. Dig. § 249.
BRYCE V. SOUTHERN KY. CO. 967
tlme requlred, and Judgment was taken by default, such Judginent will be
set aside on terms, under Code S. C. § 195, provlding that the court In
its discrétion, and on such terms as may be deemed just, may allow an
answer to be made after the time llmlted by the Code bas expired.
6. Samb— Caeeiees— Injubies to Passengebs— Complaint— Definiteness.
Wbere, in an action by a passenger against a carrier for injuries, his
complaint alleged that the train on which he was rlding was derailed, and
tbat he was injured in conséquence thereof, it alleged a sufficient cause
of action, and was not subject to a motion to make it more definite and
certain ; the burden being on the carrier to show that the derallment did
uot occur from Its négligence or the négligence of its servants.
See 125 Fed. 958.
J. P. K. Bryan, for plaintiff.
Joseph W. Barnvvell, for défendants.
SIMONTON, Circuit Judge. This case now cornes up on motion
to make the complaint more definite and certain. The action began in
the State court at Orangeburg. The plaintifif, William Bryce, brought
suit against the Southern Railway Company and the conductor and en-
gineer of one of its trains for personal injuries sufifered by plaintiff, a
passenger, by reason of the derailment of the train on which he was.
A pétition for removal, with bond, was filed in the state court, and the
record was filed hère.
A motion was made to remand the cause. The motion was heard
and elaborately argued, and was refused, this court holding that the
complaint stated a separable controversy with the Southern Railway
(122 Fed. 709). Counsel for the plaintifif asked for a rehearing, this
request was granted. The cause was again heard, and the order re-
fusing the remand was affirmed (125 Fed. 958). It appeared that on
the twentieth day after the service of the complaint the défendant had
entered in the state court a motion that the complaint be made more
definite and certain. On the same day, but after entering this motion,
the pétition for removal was filed. As the cause came into this court
in the same plight as it left the state court (Duncan v. Gegan, loi U.
S. 810, 25 L,. Ed. 875), this notice of the motion to make more definite
and certain came with it. The removal did not extend the time for an-
swering the complaint. This time for answering is fixed by ascertain-
ing the number of days which had elapsed between the service of tht
complaint in the state court and the date of the removal. Suspending
the time until the record reaches this court, which then begins to run
from the date of the entry hère, under our rule the answer is due the
rule day, within 20 days thereafter. Pelzer Mfg. Co. v. St. Paul (C.
C.) 40 Fed. 185. This record came in March 17, 1903, and under or-
dinary circumstances the answer was due on the rule day in April
thereafter. But the motion to remand was not finally determined un-
til November, 1903. The answer, therefore, unless there be some rea-
son to the contrary, was due at the rule day in December. No answer
having been filed on that day, nor at the January rules, plaintifif en-
tered a judgment by default.
Under our rule, the judgment by default will entitle him to obtain
a verdict from the jury at the term next succeeding the judgment by
default. The défendant now seeks to avoid the judgment by default
908 129 FEDERAL EBPOETER.
by pressing his motion to make the complaint more definite and cer-
tain, contending that having duly entered this motion he was not bound
to answer until it was disposed of, subject, however, to the opinion of
tlie court hearing the motion whether the grounds on which he pro-
ceeds are frivolous or intended for delay only; in which case he will
be put on terms, or perhaps fail in setting aside or avoiding a judg-
ment by default. The questions thus before us are :
First, when a motion to make a complaint more definite and certain
^ is made, must it be heard before the time for answering tlie complaint
has expired? This character of motion is allowed in section i8i of
the Code of Civil Procédure of South Carolina. No time is fixed in
the section for making the motion. In Bowden v. Winsmith, ii S.
C. 409, it is said it must be made before answer filed ; and in Zimmer-
man v. McMakin, 22 S. C. 375, 53 Am. Rep. 720, it is said that it must
be made before trial. Rule 20 of the circuit court of South Carolina
says that "it must be noticed before demurring or answering the plead-
ings and within twenty days after service thereof." There does not
seem to be any Case reported, certainly none has been cited, holding
that such motion must be heard as well as noticed within 20 days after
service of pleading. As full 20 days are given within which to serve
such notice, the same period prescribed for filing the défense, it seems
reasonable to conclude that the motion, though noticed within 20 days,
need not be heard within that period. See Allen v. Cooley, 60 S. C.
370, 38 S. E. 622.
The question remains, however: Granted that such a motion may
be heard after the expiration of the 20 days, does the pendency of the
motion suspend the requirement of the Code that the demurrer or an-
swer must be filed within 20 days after service of the complaint?
The summons in every case notifies the défendant that 20 days after
service of the complaint the plaintifï will apply to the court for the re-
lief demanded. Code, § 150. Section 164 requires that the défendant
must file his défense, whether by demurrer or answer, within 20 days
after service of the complaint. Section 267 of the Code provides that
if a plaintiff file proof of lawful service of summons and complaint on
défendant, and that no appearance has been filed, or answer or demur-
rer served, the clerk must put the case on the default calendar, to be
called on the first day of the next term. Such is our rule also. Thèse
rules seem to be imperative. Yet it is earnestly contended that, when
a défendant bona fide asks that a complaint may be made more definite
and certain, he cannot intelligently and fuUy make his défense until
he knows the précise charge against him, and that it would be illogical
to require him to make a défense necessarily imperfect. The point
has not been decided in South Carolina. In Whaley v. Lawton, 53
S. C. 580, 31 S. E. 660, a motion was made to make a complaint more
definite and certain, and then an answer was filed. The court below
held that this waived the motion. The Suprême Court, commenting
on this ruling, disapproved of it, but affirmed the decree below on an-
other ground. After hearing this motion, inquiry has been made by
the court of three practicing attorneys at this bar upon their practice
in thèse cases. One of them replies that in every case, out of abund-
ant caution, he files his défense notwithstanding the motion, or pro-
MEEEITT <Ss CHAPMAN DERRICK & WEECKING CO. V. GEEENE. 969
cures an order extending the time to file it. The others say that in
their practice they always claimed that the time within which to file
their défense was suspended ipso facto by the motion to make more
definite and certain, and that they hâve never heard the matter dis-
puted. The learned counsel for the défendant in this case has pro-
duced very many instances in his practice in railroad cases in which
he has made this motion, and in every case has acted as if the time for
answering had been ipso facto suspended.
In the absence of any décision in the state court, and with the con-
trariety of practice among members of the bar, the expérience of the
plaintiff's attorney being exactly contradictory to that of the defend-
ant's attorney, this court will not definitely décide this point. The
safer course unquestionably is to file the défense within the prescribed
time, or obtain an order extending it.
Considering the doubt upon this question, the bénéficiai provisions
of section 195 of the Code can be applied, and the judgment by de-
fault can be set aside on terms.
With regard to the motion to make the complaint more definite and
certain, that is refused. The cause was removed into this court upon
the ground that the complaint in full contained proper charges against
the Southern Railway, but did not state a cause of action against the
conductor and engineer. The plaintifï was a passenger on the South-
ern Railway, a common carrier, the train was derailed, and he was in-
jured. AU this he states distinctly. This makes a complète case.
The law puts on the Southern Railway the burden of showing that
the derailment did not occur from its own négligence or the négligence
of any of its servants. Plaintifï is not bound to tell how or why the
accident occurred. He need only state that it occurred to him, a
passenger on the Southern Railway, on the passage.
It is ordered that the judgment by default be set aside, provided
the défendant file his answer and serve a copy thereof upon the plain-
tifï on or before I5th of February, 1904, and that the case be pre-
pared for trial at the ensuing April term of this court
MERRITT & CHAPMAN DERRICK & WRECKING CO. v. GRBENB et al.
(Circuit Court, D. Connecticut April 5, 1904.)
No. 527.
1. CoNTRAcrr— Services Rendeeed on Reqtjest— Recovekt ou Quantum Meb-
UIT.
A complaint alleging that plaintiff, at defendant's request, furnished
a steamer, men, and the necessary equipment, and pulled a schooner off
the ways, where she had stuck, and which seeks to recover therefor on
a quantum meruit, does not state a case authorizing a recovery thcre-
under for "materials used up on the job" ; there being no allégation that
it was necessary to use them up, in a proper performance of the work,
or that their being so used up was contemplated by the parties when the
contract was made.
On Motion to Expunge an Item in Plaintiff's Bill of Particulars,
and Motion for More Spécifie Statement of Such Item.
970 129 FEDERAL REPORTEE.
James D. Dewell, Jr., for plaintiff.
Canfield & Judson, for défendants.
PLATT, District Judge. It is asumed that the item în the bill
of particulars claiming for "materials used up on job, $887.80," re-
lates to the demand set forth in the second count of the original
complaint. A demurrer to that second count was filed May 6, 1903.
A motion for more spécifie statement of matters set forth in certain
paragraphs, of what was then the first count, was filed May 7, 1903.
On June 8, 1903, at New Haven, the demurrer and motion were
taken up together, and argued orally. After listening to the ar-
guments, I was impressed with the force of the demurrer, and so
stated frankly in open court. In an unfortunate moment, trusting
that a path was plainly open, which, if followed, would lead to a
harmonizing of the contentions and dissensions of counsel, I sug-
gested that the plaintifï ought to strike out the second count, and
also file a statement which, by its spécifie character, might inform
the défendants of the claims which they were called upon to meet
under the latter portion of the then first count. On July 10, 1903,
an amended complaint was filed, which strikes out the original sec-
ond count, and substitutes a new second count, which takes the
place of the paragraphs of the original first count, where a quan-
tum meruit was relied upon. As to the other feature of my sug-
gestion, the plaintifï filed on the same day a paper which is entitled
"Bill of Particulars," and contains an account with the schooner and
with défendants. Among the items therein appears the one refer-
red to at the outset, which the défendants, by their motions of Sep-
tember 26, 1903, ask to expunge and make more spécifie. It is
obvions that both motions cannot be granted in the same breath.
The matter has become somewhat confused by the peculiar state
of the pleadings, growing out of an attempt on my part to pro-
mote, temporarily, at least, peace and good will among counselors
and their clients. Having managed to make confusion worse con-
founded, it is full time to give the case a practical, common-sense
treatment. The original arguments, coupled with the briefs for-
warded at my request, and now before me, make it possible, it is
hoped, to settle now what it would hâve been better that I should
hâve settled when the demurrer was under considération.
The gist of the second count, as it now stands, is this : On July
27, 1902, while the schooner Perry Setzer, upon which a fruitless
pull had been made for $500, as set forth in the présent first count,
was still stuck on the ways, the défendants requested the plaintifï
to fit up and get ready for use necessary appliances, materials, and
men, and make further efïorts to move the schooner. On July 28,
1902, plaintiff complied with the request, and succeeded in pulling
the schooner into the water. The extra work of steamer and men,
and the expense of preparing and furnishing the appliances and ma-
terials necessary for the work, were reasonably worth $2,132.80, over
and above the $500 due on contract, as set forth in the first count.
Plaintiff has requested payment thereof, which was refused. Such
statement of a cause of action manifestly cannot entitle the plaintiff
MEEBITT & CHAPMAN DERRICK & WREOKING 00. V. GEEENE. 971
to recover for "materials used up on the job." It is confined spe-
cifically to the extra work of boat and men, and the expense of pre-
paring and furnishing necessary appliances and materials. There is
no suggestion of an implied promise to pay for materials destroyed
or rendered worthless. The theoretical situation suggested by coun-
sel for plaintiff is not analogous. He supposes a case in which a
farmer employs a man to remove stumps from his land, with no spé-
cifie bargain as to price. The man blows up a stump, and charges
$10 therefor. When called upon to be spécifie, he says, labor, so
much; use of drill, so much; so many pounds of powder used up, so
much. If it is conceded, as it must be, that when the bargain was
niade it was understood by both parties that the proper and reason-
able way to remove a certain stump would be to blow it up, there
would be sorae force in the reasoning. I hâve assumed that the
contention hère relates to the breaking of a cable by reason of the
unusual strain to which it was subjected. Can it be claimed that it
was contemplated by the parties when the bargain was made that
to use a cable in such a manner as to produce such a resuit would
be a reasonable and proper way to attempt to pull the schooner off
the stocks ? If not, there can be no implied promise to pay its value
if it was "used up on the job." Look for a moment at another sit-
uation. Suppose that the same farmer employs a man to furnish
horses and plow, and turn up the furrows in his field, with no spé-
cifie bargain as to price. The man does the work, and, while doing
it, breaks his plowshare on a well-embedded stone. He charges the
farmer $20 on quantum meruit. When asked to be spécifie, he says,
his own labor, so much; labor and use of horses, so much; plow-
share broken, so much. It would seem that the last item in this
theoretical case ought to be expunged on motion, and that would
be so, no matter whether entered as "plowshare broken," or as "ma-
terial used up on job."
The plaintifï contends that on the trial he ought to be permitted
to présent the facts attending the employment to the jury, so that
it can estimate intelHgently what the services were reasonably worth.
If, on the trial, he shall ofïer évidence to prove that the appliances
were proper, and that the necessary strain in puUing was so great
as to cause the parting of a sound cable — such a cable as a reason-
ably prudent man would put to such a strain in such a case — the
bridge which he pictures will be reached, and it will then be time
to settle whether we shall cross it. Before that moment, it will be
well to remember that two pulls had been taken without success
under the $500 contract, and to consider whether such knowledge
would not furnish the jury ail the light it would require in reaching
a conclusion as to the state of the minds of the parties when bar-
gaining for the work, and the kind of work they bargained for.
Let the item, "Materials used up on job, $887.80," be stricken out.
^^2 129 FEDEEAL EEPOETEB.
THE THOMAS M. PARSONS.
(District Court, S. D. New York. Aprll 9, 1904.)
1. Collision— Excessive Claim— Costs.
A libelant, who recovers damages for a collision for which his owa
vessel was not in fault, Is entitled to costs, although the recovery is muck
less than tlie amount claimed, where there "Is no évidence tliat such claim
vk'as made fraudulently.
In Admiralty. Suit for collision. On exception to taxation of
costs.
James J. Macklin, for exceptions.
Avery F. Cushman, opposed.
ADAM S, District Judge. In this action the libellant sought to re-
cover $150 costs of repairs and $300 for permanent injury to his small
yacht Margery, caused by collision in August, 1901, with the lighter
Thomas M. Parsons. Claim was also made for $100 démurrage. The
yacht was moored off Tompkinsville, Staten Island, at the time of
the collision. The lighter was a moving vessel and held in fault. The
matter was then referred to a commissioner to ascertain and report
upon the amount of damages. He has reported $50, and after the con-
sidération of exceptions, I confirmed the report in a mémorandum, of
which the following is a copy :
"The commissioner has allowed the libellant ?50. Both parties bave flled
exceptions to his report.
"The libellant's exceptions are to the effect, that enough has not been al-
lowed, claim being made for several hundred dollars. I find nothing in the
testimony that sustains the exceptions. There was probably some damage
done by the collision but the évidence is very weak and uncertain as to its
estent. It does not appear with reasonable certainty what expenditures for
the repairs, incident to the collision, bave been made.
"The claimant's exception Is that nothing more than $12 should hâve been
awarded, as there was no proof to show anything beyond that sum. There is
some force In the contention, but I bave no doubt that the commissioner's
award of $50 is just in effect, although apparently conjectural, and as the
elaimant has not pointed ont with précision the grounds of the exceptions,
nor given références to the évidence, I will not consider it The Commander-
in-Ohief, 1 Wall. 43 [17 L. Ed. 609].
"Ail exceptions overruled."
When the matter came before the clerk for taxation of costs, the
elaimant objected to the taxation of any costs. This objection was
overruled and exception taken. It is now before me again on the
exception, the elaimant urging that no costs should be allowed to the
libellant because the elaimant has substantially succeeded, citing Pettie
V. Boston Tow-Boat Co., 49 Fed. 464, i C. C. A. 314, in support of
his contention.
The disallowance on appeal of the costs before the commissioner in
the Pettie Case, was explicitly based upon the particular facts devel-
oped. Wallace, J., for the Circuit Court of Appeals, said (pages 467,
468, 49 Fed., and page 318, i C. C. A.) :
"The appellent insists that the libellant should not hâve been awarded the
costs of the référence before the commissioner, and urges that he was guilty
of oppressive and fraudulent conduct upon the référence. We are satisfied
by a careful examination of the record that the libellant corruptly attempted,
8H0ETLAND BEOS. CO. V. CITT OP NEW TOBK. 973
by hîs own testlmony, and by the testimony of wltnesses in his behalf, whose
statement he did not himself believe to be correct, to exaggerate the value of
the barge, and obtain an inordinate compensation for her loss. He was an
expert, thoroughly qualified to judge of the value of such a vessel. He knew
what she had actually cost, and the appraisal placed upon her for Insurance
,1iist before she was lost. His own testimony was false in respect to matters
as to whleh he eould not well be mistaken. Among, other statements, it was
untrtie that he had ever received the offer for the barge to which he had tes-
tifled. His recklessness In disregarding even the appearance of candor is
shown by his attempt to prove the value of the barge at $6,500 or $7,000, àl-
though he had alleged it in the libel to be but $5,500. It must be as'sumed
for présent purposes that she was worth only $1,750. It would serve hb use-
fnl purpose to enter upon any recapitulation or analysls of his testimony, and
that of his witnesses, before the commissloner. It sufïices to say that we are
unable to eonsider his misstatements, and those of several of the witnesses
produced by him, as venial errors which can be reconciled with integrity of
purpose by attrlbuting them to honest, but mistaken, estimâtes in matters of
opinion."
In the case under considération, it does not appear that any fraud
was attempted. A larger claim was put forward than the évidence
subsequently justified but that does not establish corruption. The case
was a genuine one of some damage. The évidence failed to sustain
the amounts claimed but the fact of there being a small recovery, in
the face of a comparatively large claim, is more consistent in this
case, with defect of proof than the kind of fraud attempted in the
Pettie Case. Hère, the costs consist largely of disbursements and the
effect of sustaining the exception would be not only to deprive the
libellant of any recovery of damages but leave him out of pocket by
reason of his action, which has been upheld. Such would be an anom-
alous resuit, where real damages hâve been suffered through the wrong
of another, but the injured party is unable to prove the fuU extent of
them.
Exception overruled and the taxation will be proceeded with,
SHORTLAND BROS. CO. v. CITY OF NEW YORK.
(District Court, S. D. New York. October 20, 1903.)
1. Collision— Steam Vessels on Crossing Courses— Change op Course.
As the tug Watt was coming up East river on a flood tide a short dis-
tance from the end of the piers on her starboard hand, the Boody came
out of her slip, but, instead of keeping her course and speed and Cross-
ing ahead of the Watt in accordance with the ordinary rule, she signaled
her intention of passing on the Watt's starboard side, but came out at
such fast speed that, before she could exécute the maneuver, she was In
the course of the tug, and a collision resulted. Held that, if she under-
took to change the ordinary course whleh she was expected to take, it
was her duty to navigate cautiously, and that she was solely in fault for
the collision.
In Admiralty. Suit for collision.
Mr. Forrester, for libelant.
Mr. Kindleberger, for respondent.
HOLT, District Judge (orally). I think that thèse vessels, when they
first saw each other, were on crossing courses, and it was the business of
974 129 FEDERAL BEPOETEB.
the Watt to keep out of the way, and of the Boody to hold her course
and speed, unless she gave a différent direction. If she undertook
to change the ordinary rule of passing to the right, she ought to use
correct judgment to do it. She did décide to change, and, instead of
holding her course, and passing to the right, she gave the signal of
two whistles to pass to the left. She came out very fast, and the
Watt was coming up on a strong flood tide, and couidn't maneuver
as safely as the Boody coming out against the tide. It was the duty
of the Boody not to come out fast, as there was a vessel coming up with
the tide close off the mouth of the slip. She should hâve come out
cautiously. If they were far enough apart so that she could come
out at full speed, she was either bound to follow the usual rule, or, if
she decided to sound two whistles and go on the other side, she was
bound to hâve room enough to do it. The strong flood tide brought
the Watt upon her, and at the last minute she backed, as they usually
do when collision is inévitable. It isn't of much conséquence what
they do when they are right on one another. The question is whether
the maneUvers are properly taken when they first see each other; and
it seems to me from that point of view that the Watt was not guilty of
any fault, and that the Boody was guilty of fault — that is, she elected
to pass on the starboard side of the tug; and, if she changed the regular
course that the other vessel expected her to take, and instead of holding
her course and speed and allowing the other vessel to pass behind her,
she determined to take the other course, and go the other way, she did
that at her own risk.
My opinion is there should be a decree for the libelant, with the usual
order of référence to ascertain the damages.
TOLLMAN V. QUINCY.
(Circuit Court, S. D. New York. Mareh 14, 1904.)
1. Accommodation Xote— Diversion— Holdee fob Value.
Where defendant's note was transferred to plaintlff before maturlty In
settleinent ol' a peadiug suit, plaintiff's counsel beiug told that it had been
given by the maker to the payée iu settlement of an account between them,
plaintifli: was a bona fide holder for value, and it was therefore no défense
that the note was accommodation paper, or that it had been diverted.
Howard R. Bayne, for plaintiff.
Wellman & Gooch (Sumner B. Stiles, of counsel), for défendant
HOLT, District Judge. The défendant allèges in his answer that the
note in suit was given to Bâtes "to enable him to effect a settlement
of the said suit of the plaintiff against the said Bâtes." He testified
on the trial, in substance, that he gave Bâtes the note to be used, if
necessary, during his absence in Europe, to renew certain joint obliga-
tions on which both their names appeared, and that he knew nothing
about the proposed use of the note to settle a debt of Bâtes until after
its delivery. Tlie gênerai rule is that admissions in a pleading cannot
be contradicted by testimony. Assuming, however, that this note was
THE BUCKINGHAM. 975
either an accommodation note or a diverted note, I think the plaintiff
is a bona fide holder, before maturity, for value. It was transferred in
settlement of a pending suit, and was therefore transferred for value
within the meaning of that term in commercial law. Northern, etc., Co.
V. Kelly, 113 U. S. 199, 5 Sup. Ct. 422, 28 L. Ed. 948; Swift v. Tyson,
16 Pet. I, 10 L. Ed. 865 ; Oates v. National Bank, 100 U. S. 239, 25 L.
Ed. 580; Raiiroad Co. v. National Bank, 102 U. S. 39, 26 L. Ed. 61 ;
American File Co. v. Garrett, iio U. S. 288, 4 Sup. Ct. 90, 28 L. Ed.
149; Rector v. Teed, 120 N. Y. 583, 24 N. E. 1014; T. N. Bank v.
Parker, 130 N. Y. 415, 29 N. E. 1094. The proof is that the plaintiff
had no knowledge that the note vi^as an accommodation note or that
it had been diverted. His counsel was told that it had been given by
Quincy to Bâtes in settlement of an account between them.
I think that the agreement of settlement between Tollman and Bâtes
constitutes no défense. The effect of the agreement was, in my opinion,
that, if the note were not paid at maturity, the plaintiff had an élection,
either to go on with the original suit, or to enforce payment of the
note. It is not the correct construction of the agreement, as I regard
it, that Bâtes or Quincy, or both, could elect not to pay the note, and
that thereupon the plaintiff was left with no other remedy except to go
on with the original suit. There was no reason why Tollman should
hâve taken Quincy's note at ail, if it could not be enforced.
My conclusion is that the plaintiff is entitled to judgment for the
amount demanded in the complaint, with costs.
THE BUCKINGHAM.
STEAMSHIP BUCKINGHAM CO., Limited, v. PACIFIC TRANSPORT
CO. et al.
(District Court, B. D. Pennsylvania. April 22, 1904.)
Nos. 12, 15.
1. Shippinq—Chabtee— Commencement of Votage,
A steamer under a time charter was delivered to the charterer at Seat-
tle, her iirst voyage to be to an Alaskan port. She took on some coal at
Seattle, and then proceeded to other ports, where she took on cargo and
a f urther supply of coal ; proceeding thence to Alaska, and returning
to Seattle, where she was again taken in charge by the charterer. Held,
that the voyage began at Seattle, and not at the last port of loadtng.
2. Same— Damages Claimed by Chaeteeee.
A time charterer who compromised and settled a claim for démarrage
against a consignée cannot assert a claim for the balance whieh was in
dispute, against the vessel, on the ground that he could hâve recovered In
full but for the master's misconduct.
3. Same— Déductions feom Chaetee Hiee.
Evidence considered, and held not to establish the claims of a charterer
to various déductions from the charter hire of a steamer.
In Admiralty.
Henry R. Edmunds, for Pacific Transport Co.
Convers & Kirlin and J. Parker Kirlin, for the steamship.
976 129 FEDERAL EEPORTER.
J. B. McPHERSON, District Judge. i. The Buckingham is a
British steamship, and was chartered to the Pacific Transport Company
and James Griffiths for eight shillings and sixpence per ton, gross
register, under a time charter, for the period of six months. Delivery
of the vessel, which was on a voyage from Hong Kong to Tacoma when
the contract was made, was accepted by the charterers at Seattle on May
27, 1901. The charter party contained the provision that the ship
might be employed "in such lawful trades as the charterers or their
agents shall direct, but not north of Vancouver, and no part of North
America except Pacific side." This restriction was modified by cable
a few days before the ship was delivered, so as to permit the charterers
to make one voyage to St. Michael's, Alaska, for which privilège they
were to pay the additional hire of two shillings and sixpence per ton.
This voyage was the first enterprise upon which the ship was to enter,
and the first subject of dispute now is : When did the voyage begin and
end? The relevant facts are as follows: Immediately upon delivery
of the vessel the charterers loaded some bunker coal, and on. May 29th
the ship left Seattle for Nanaimo, another port on Puget Sound, where
she took on board a further supply of bunker coal and about 75 tons
of cargo for St. Michael's. On May 30th she crossed the sound to
Vancouver, where she loaded a gênerai cargo of 2,400 tons ; leaving
that port on June 6th, and recrossing the sound to Ladysmith, where
she completed lier cargo by loading 2,000 tons of coal. She left Lady-
smith on June loth, and proceeded directly to St. Michael's, merely
touching at Victoria to put the pilot ashore. She returned to Puget
Sound on July 30th, making a brief stop only at Port Townsend, and
arrived at Seattle four or five hours later on the same day, where she
was again taken in charge by the charterers, and accounts for the voy-
age were settled with the master. On thèse facts, I agrée with the posi-
tion taken by the proctors for the Buckingham, that the voyage began
and ended at Seattle. The charterers' contention that the voyage did
not begin ilntil June loth, when the ship left her last port of loading
with a complète cargo, finds no support in the authorities. No décision
was cited in which the point has been so ruled, but there are several
cases in which it has been distinctly decided that a voyage begins when
a ship sets about doing what is to earn freight for the owner. Bruce
V. Nicolopulo, II Exch. 129, questioning the authority of Crow v.
Falk, 8 Q. B. (55 E. C. E.) 467; Barker v. McAndrew, 18 Com. Bench
(N. S.) 114 E. C. L. 758; Valente v. Gibbs, 6 Com. Bench (N. S.) 95
È. C. L. 270; The Carron Park, 15 Prob. Div. 203; Nottebohn v.
Richter, 18 Q. B. D. 63 ; Fearing v. Cheeseman, 3 CHff. 91, Fed. Cas.
No. 4,710. The English cases are summarized in Carver's Carriage by
Sea (3d Ed.) § 148, in the foUowing language :
"A doubt sometlmes arlses as to when during the agreed voyage the ordinary
exceptions of périls apply. Do they relate only to that part of it in which
the ship is carrying the charterer's goods? Or do they also cover risks which
irustrate or delay the voyage before the goods are taken on board? Say, in
going to the port of loading, and during the loading there.
"Where such and such périls are to be 'always excepted,' the shipowner
seems to be relieved from liability for any failure to perform his contract,
if caused by those périls, whenever they may hâve occurred. But where the
THE BUCKINGHAM. v < '
clause runs 'dnring the voyage always excepted,' as It frequently does, there
may be an ambiguity In the word 'voyage.'
"If the vessel is to proceed to a différent port from that at which she Is
lying, and load there, the voyage thlther Is eonsidered to be part of the char-
tered voyage, even though the vessel be allowed by the charter to take, and
in fact takes, a cargo outwards for other merchants, and although in doing
so she proceeds first to another port, eut of the route to the loadlng port.
And if the vessel is prevented or delayed In getting to the loadlng port, or if
the loading is prevented, or a loss occurs during the loading at that port by
a péril excepted 'during the voyage,' the exception applies.
"So, again, where the vessel is lying at her port of loading, if she has to
move from the place at which she is lying to a loading berth, the 'voyage' to
whlch the exceptions relate commences as soon as she breaks ground to go
to that berth.
"But it seems that the exceptions do not apply to matters which may happen
before the ship has entered upon the voyage dealt with by the charter party.
So that. If she were disabled by périls of the sea while still completing a voy-
age on whlch she was engaged at the time of chartering, the shipowner would
not be excused.
"If the ship is to be loaded at the place where she is lying, It does not
appear to be settled whether the 'voyage' may begin before she has commenced
her transit, in such a sensé that the exceptions may relate to risks during or
prlor to the loading. In Crow v. Falk It was decided that It did not But that
décision has more than once been dissented from."
In view of thèse authorities, I think it is clear that the point must
be decided against the charterers' contention.
2. The second ground of dispute concerns the sum of $67.50 that was
paid to three Japanese firemen who were employed by the master at
Ladysmith. The owners were bound by the charter party to furnish
a full complément of ofScers, seamen, engineers, and firemen for a
vessel of the Buckingham's tonnage, and to pay their wages. The
charterers' contention is that this sum of $67.50 was paid to the firemen
as wages for doing that particular work, and therefore is not a proper
charge. The évidence satisfies me, however, that the money was not
paid for firing, but for work done in discharging the cargo at St.
Michael's, and was paid by the express authority of the charterers them-
selves. Indeed, the item appeared in the account rendered by the
master of the Buckingham on his return to Seattle, and was approved
and paid by the charterers at that time without objection. No reason
whatever has been shown for opening that settlement, and the objection
to this item seems to be an afterthought, probably suggested by subsé-
quent controversies over other matters.
3. A similar remark may be made concerning the charterers' claim
of $108, which is said to be an overcharge for boarding several men
who were sent by the charterers to St. Michael's to help in discharging
the cargo. Thèse men were not seamen, nor in the employ of the
ship, but were carried by the captain without other charge than $1 per
day for boarding. The charterers claim that 40 cents per day is the
usual rate paid upon the Pacific Coast for boarding, but I do not think
it necessary to décide whether the claim is well founded, for this item
also was included in the account rendered by the master upon his re-
turn, and was paid without a word of objection, and no reason has been
shown for opening that settlement.
4. The charterers further assert that they should be allowed the sum
of $1,900 for damages sufïered by the wrongful conduct of the master of
129 F.— 62
978 129 FEDERAL EEPOETER.
the Buckingham ai the port of St. Michael's. Upon this point the
libel contains the following statement :
"That on the arrivai of the said vessel at St. Michael's It was the duty of
the said master, under the terms of the charter party, to proceed to a place
desiguated by the consigiiee of the cargo, to discharge the same, but the mas-
ter did not and would not proceed to the place so designated until the con-
signée paid him the sum of $100. That, on account of the mlsconduct of the
master in this behalf, the vessel was detained eight days, whereby libelants
sustained damages in the sum of $300 per day, or $2,400. That libelants hâve
only received $500 on this account, leaying a balance still due libelants from
the owners of the vessel of $1,900."
To make the meaning of this paragraph clear, it is necessary to state
what took place at St. Michael's. When the Buckingham reached the
port on June 28th, the harbor was still closed by ice, and the ship came
to anchor in 33 feet of water about 5I/2 miles out in the open roadstead.
Her draft at this time was nearly 23 feet. The captain walked ashore
on the ice, entered the ship at the customhouse on the 29th, and notified
the two consignées of the cargo on the 30th; but, as long as the ice
remained, it was impossible to begin unloading. The ice went out on
July 3d. The customhouse declared the harbor open on July 4th, and
on that day the ship moved to a point about 4 miles from the town, and
again anchored in 33 feet of water. The work of discharging went
on from July 4th to July 1 5th, when the vessel was again moved a mile
nearer the shore, where she lay in about 24 feet of water. On July
i3th the gênerai cargo was completely discharged, and also a portion of
the coal that constituted the remainder of her load. On that day the
consignée pf the coal, the Northern Commercial Company, asked to
hâve the ship brought further in, but the master at first refused, because
he regarded the conditions as unsa,fe, and repeated his refusai shortly
afterward. The consignée then oflfered the master $100 if he would do
as he was asked, and he finally consented and accepted the money, but
upon the further condition that one of the consignee's steamboats should
be lashed alongside, that a compétent pilot should take the ship in
without obliging her to use her own steam, and that she should be
helped out of the harbor if bad weather came on. The discharge of the
coal was cotnpleted on July iQth, and the master thereupon presented
a claim for eight days' demurrage, contending that the lay days expired
on July I3th, counting the time from July ist, while the consignée con-
tended that the time should not be counted before July 5th, conceding
that four days' demurrage was due, and signing a letter to that effect.
The agreed rate of demurrage was $300 per day, but, as the master had
no authority to collect any money on this account, the dispute was
referred to San Francisco for adjustment. It was there taken up by
counsel, and, after considérable negotiation, was compromised by the
payment of $500 to the charterers. The agreement concerning the car-
nage of the coal provided that the ship should take it to St. Michael's,
"or as near thereto as the vessel can safely get," and the consignee's
objection to the charterers' claim for eight days' demurrage was that
the master did not bring the Buckingham as close as he might hâve donc
with safety, and thus increased the cost and delay of discharging.
The charterers now assert that, they were entitled to claim eight days'
THE BUOKINGHAM. 97»
demurrage, and that they could hâve collected it from the consignée if
the master's refusai had not furnished the company with a vaUd counter-
claim which compelled the compromise for $500. Accordingly it is
now sought to recover from the ship the balance of $1,900.
To the allowance of this item I think there are several objections.
First, the charterers hâve offered no évidence from which the dispute
can be satisfactorily determined. The charter for the carriage of the
coal was not produced, and there is not sufficient évidence otherwise
concerning the number of lay days, and the time when they were to
begin. Second, since the charterers elected to compromise the dispute
with the consignée, and accepted $500 in full settlement, it is not easy
to see upon what ground they can set up this claim against the ship.
It is by no means clear that they could hâve recovered $2,400 from the
consignée ; and I confess I do not see how they can transform a claim
against the consignée for demurrage, that has aiready been settled and
ended, into a live claim against the ship for the misconduct of the mas-
ter. But, third, I do not find the needful évidence that the master's
conduct was wrongful. Without going into the détails of the testi-
mony, I am satisfied that he acted with caution and propriety. He was
careful of the ship in a strange harbor, as he was bound to be, but there
is no évidence at ail that he kept the ship as far out as possible in or-
der to extort money for bringing her in. The consignée made no claim
at the time that its rights were being disregarded, but urged the mas-
ter, simply as a favor, to corne doser to the shore, and paid the $100 as
a gratuity in récognition of this service. At the end of the discharge the
consignée was so well satisfied as to pay the master $25 more as a fur-
ther expression of satisfaction. Moreover, by express agreement, the
master was the charterers' agent in the discharge of the cargo, and for
this service he was paid $250. Mr. Griffiths, one of the charterers,
testified that "his conduct was very satisfactory in regard to the dis-
charge." Surely, to permit the recovery of this item of $1,900 from the
ship in the face of thèse objections, is scarcely possible.
5. The charterers hâve deducted £122 7s., hire for three days, which
are said to hâve been lost on the second voyage, because of the vessel's
failure to furnish a full complément of firemen. It appears from the tes-
timony that on August çth, a few days after the return from St. Mi-
chael's, the vessel was ordered to Vancouver. Her three firemen had
refused duty, and three laborers were employed, who fired the vessel on
the trip to Vancouver. Hère the refractory firemen were arrested and
imprisoned for 24 hours, after which they deserted the ship altogether.
The captain made efforts to obtain men to take their places, but was
unable to do so, and after remaining at Vancouver until August I5th
the ship was fired across Puget Sound to Nanaimo by the engineers and
the donkeyman. No time was lost upon this passage, which only oc-
cupied a few hours. The testimony has satisfied me that the delay at
Vancouver was due, not to the absence of the firemen, but to the failure
of the charterers to furnish money to disburse the ship at that port.
They had agreed to furnish money to the ship for a commission of 2)^
per cent., and it was their delay in furnishing the necessary funds that
compelled the ship to remain at Vancouver for two of the three days
980 129 FEDERAL EEPOETEB.
tliat are now in controvèrsy. With regard to the remamîng day, which
is averred to hâve been lost on the voyage betv/een Vancouver and San
Francisco, I am also of opinion that the testimony does not establish
the charterers' contention. As I hâve already said, no time was lost on
the passage to Nanaimo. When the ship left that port she was still with-
out firemen, but arrangements had been made with three of the crew, the
donkeyman, and one of the engineers to perform this duty. She sto!^-
ped at Victoria in another effort to obtain firemen, and spent 15 or 16
hours in the vain attempt to secure them. There seems to hâve been a
strike at that time among the firemen along the Pacific Coast, but, for
vvhatever reason, the effort was unavailing. The time spent at Victo-
ria was undoubtedly lost by reason of the ship not having a full com-
plément of men, and for this loss the charterers would be entitled to an
allowance, if it were not for the fact that the charter party expressly
provides that for delay arising from such a cause no allowance is to be
made unless the delay is longer than 24 hours. It follows, therefore,
that the loss and expenses which the charterers claim to hâve suffered
by reason of the delay cannot be allovved.
6. Neither, as I think, is the claim to be allowed for a further delay
of 37 hours at San Francisco any better founded in fact. The char-
terers aver that the captain improperly ref used to accept a cargo of
dynamite that was offered him on Saturday, August 3ist, and that he
should hâve received it at that time, and immediately proceeded upon
a voyage to Noyo, a port further south on the California coast, instead
of delaying to sail until Tuesday morning following. As I read the
testimony, however, the facts are otherwise. The dynamite was not
offered to the captain before Monday, when it was received, after
proper provision had been made for its careful stowage. The ship did
not sail upon Monday, because the shippers of the cargo had sent on
board 14 men, who were to be transported to Noyo to unload the cargo
there ; and, owing to certain customs régulations, they could not be car-
ried upon a British vessel between two American ports without being
put upon the ship's articles. In order that this formality might be ob-
served, it was impossible to sail before Tuèsday morning.
7. There remain for considération three items which the ship avers
hâve been improperly deducted from the hire due by the charterers.
One is the sum of $11.47, excess of exchange upon London over the
true rate, charged upon cash advanced to the master; the second is
$108.75, being an overcharge for bunker coal furnished to the ship's
galley ; and the third is $100, charged for the use of certain gear be-
longing to the charterers on board the ship. In my opinion, ail of thèse
sums hâve been improperly deducted. The uncontradicted testimony
shows that the rate charged for exchange was one penny too high,
and this amounts to the disputed sum of $11.47. With référence to the
second item, the testimony satisfies my mind that the charge for coal
was much too high, and that no more than about 105 tons were proba-
bly consumed, for which the charterers hâve been paid in full. As
for the use of the charterers' gear at Barbadoes while the vessel was
being repaired, the only compétent évidence upon the subject goes to
show that, if any of it was used, it was a comparatively insignificant por-
IN KE ALLENDOKF. 981
tion ; and, moreover, as ail the gear was afterwards sold to the ship for
$30, it seems out of ail reason to charge $ioo for the use of only psut of
it for a short time.
Decrees may be entered in accordance with this opinion.
In re ALLENDORr*.
(District Court, N. D. lowa, B. D. May 14, 1904.)
No. 327.
L BANKBTTPTCT— DiSCHAEGE— GROUNDS FOR REFUSAI..
Where it appeared tàat a bankrupt who liad been In business as a re-
tail merchant but a short time conducted his business in a somewhat
careless manner, and also that liis stock had been damaged by flre, and
a fire sale held, the mère fact that the value of the stock, as appralsed
by his trustée, was not as great as It apparently should hâve been, esti-
mated by deducting the amount of sales from the invoice priées, or that
the amount of cash paid out, as shown by his check stubs, was short of
the amount taken in from sales, is not sufBcient, alone, and against his
déniai, to justlfy the refusai of his discharge on the ground that he con-
cealed property and money from his trustée.
2. Same— Failuee to Keep Books.
To warrant the withholding of a discharge for fallure of the bankrupt
to keep books or records, or for bis destruction of them, it must be shown
that such fallure or destruction was with Intent to conceal his financial
condition.
3. Same— Obtaining Ciîedit bt False Statement.
The omission by a bankrupt to state an item of indebtedness in a state-
ment made at the request of a wholesale house to which he had previ-
ously sent an order for goods cannot be considered as rendering it a ma-
terially false statement, made for the purpose of obtaining other goods,
which were not ordered until eight months thereafter — the goods or-
dered at the time having been paid for in the meantime — so as to de-
feat the right to a discharge uuder Bankr. Act, § 14b, cl. 3, as amended
by Act Feb. 5, 1903, c. 487, 32 Stat 797 [U. S, Comp. St. Supp. 1903, p.
411].
In Bankruptcy. On pétition for discharge, and spécifications of ob-
jection thereto.
Mears & Lovejoy, for bankrupt.
Gates & Leffring and C. D. Kern, for opposing creditors.
REED, District Judge. Henry Allendorf was adjudged a bankrupt,
by this court, upon his own pétition, June 17, 1903. On November i6th
following he filed a pétition for discharge, and certain of his creditors
in due time thereafter filed spécifications of objectiorjs in opposition
thereto, upon the grounds, in substance, that the bankrupt had, (i)
while a bankrupt, knowingly and fraudulently concealed from his trus-
tée property belonging to his estate in bankruptcy; (2) with intent to
conceal his financial condition, destroyed or failed to keep books of ac-
count or records from which such condition might be ascertained ; (3)
obtained property from one of the objecting creditors upon a materialiy
If 2. See Bankruptcy, vol. 6, Cent Dig. § 752.
982 129 FEDEBAL EBPOKTEK.
false statement in wrîting made to such creditor for the purpose of
obtaining gueh property,
I. The bankrupt was a retail merchant doing business at Waterloo,
in Blaclcliawk county ; and in support of the first of the spécifications
it is urged that the testimony shows that he has failed to account for,
or turn over to his trustée, a considérable portion of his stock of goods,
and ail of the money received from sales of goods and other sources
from some time in January, 1903, to the time he was adjudged a bank-
rupt. The alleged failure to account for or turn over ail of his stock
of goods is based upon the ground that the estimated value made by
the trustée of the goods coming to his possession is some $2,500 less
Ihan the différence between the original cost thereof, as shown by the
invoices or bills of the same, and the purchase price of others, and
the amount of bankrupt's sales from such stock during such time. The
évidence fails to show the basis upon which the trustée made his esti-
mate of the value of the stock, and does show that in the latter part of
December, 1902, the stock was largely damaged by fire, for which
damage the bankrupt received some $3,300 Insurance thereon. In Jan-
uary following the bankrupt conducted or held for several days what
he calls a "fire sale," at which his goods were sold in many instances
belovk' cost. He also claims that the amount of insurance received by
him did not cover the full damage to the stock by fire. It also appears
that after the fire some new goods were added to the stock; also a
secondhand stock purchased by the bankrupt from a Mr. Billings, for
which he was to pay $2,800, and upon which he did pay $1,500 in cash.
In this transaction with Billings the bankrupt claims that he was great-
ly deceived in the value of thèse goods ; that in fact they were not worth
to exceed $600. Some litigation grew out of this transaction, and Bill-
ings replevied some of the goods, and the matter was adjusted in some
way — by the bankrupt paying to Billings something more — and the
bankrupt says, "I paid Billings some $1,725, altogether, and did not
get $200 out of it." It seems to be admitted that there is a discrepancy
between the estimated value of the stock by the trustée, and its value as
shown by the invoice of its purchase and the amount paid Billings, less
the sales therefrom. It is quite apparent that there might and proba-
bly would be a wide différence in the estimated value of such a stock.
The bankrupt explains that the apparent discrepancy in values is be-
cause of the damage to the stock by fire, and of sales at less than cost
during the continuance of his "fire sale." No accurate computations
are made in regard to thèse shrinkages, nor could there well be. The
alleged concealment of money is made to appear by taking the gross
amount of cash received from sales of goods and other sources from
early in January, 1903, the most of which was deposited in bank, and
deducting therefrom the checks drawn against such deposits, as shown
by the stubs of such checks. Upon this basis there appears to be a
shortage of something over $1,000. The bankrupt, however, says tiiat
some of the checks made by him upon the bank are not shown upon
the stubs, and the checks themselves were not preserved. The testi-
mony seems to sustain this view. The bankbooks do not show the dif-
férent checks, but only the gross amount returned at time of balancing
the bocks. The bankrupt also says that payments of expenses and some
IN RE ALLENDORF.
other items were made from the store, and did noi pass through the
bank. Estimating ail of thèse amounts that he could, there appears
to be about $500 still unaccounted for. At the time of his exam-
ination in July, 1903, at the first meeting of the creditors (and this is
the testimony upon which the creditors mainly rely upon this hearing),
the bankrupt was 34 years old ; had a family, consisting of his wife
and two small children, which were supported from this business.
He had never conducted a business prior to beginning this, which was
in November, 1901, but had been a clerk in différent establishments, at
salaries varying from $15 to $20 a week. It is very apparent that he
is not or was not a careful business man; that this business was con-
ducted in a loose and careless manner ; and it is a fair inf erence from
ail the testimony that whatever shortage there may be in the value of
his stock, or money received in the course of business, is due largely to
this and the damage caused by fire, and not to a fraudulent concealment
by the bankrupt from the trustée of any of his property. The bankrupt
positively dénies that he has concealed or withheld any of his property
not exempt from exécution from the trustée, and it is not made to appear
that he had any of it in possession or under his control at the time of
his examination, or the taking of the testimony upon this hearing.
It cannot, therefore, be said, from the testimony submitted in support
of this spécification, that he has willfully and knowingly sworn falsely,
or has fraudulently concealed from the trustée any money or other
property belonging to his estate in bankruptcy.
2. To warrant the withholding of a discharge for a failure of the
bankrupt to keep books or records, or for his destruction of them, such
failure or destruction must be with intent to conceal his financial condi-
tion. This bankrupt did not fail entirely to keep books. He kept a
cashbook, showing the amount received from the daily sales of goods
and from other sources, and most of the payments for goods, expenses,
and other matters ; also a bankbook, and the original invoices or bills of
goods purchased. He kept no daybook, blotter, or ledger. The testi-
mony shows that the clerks or salesmen were furnished small sales-
books, made of thin sheets of paper, arranged to fold or double over a
pièce of carbon paper. Upon a sheet so folded, the article sold and the
price were entered, and in doing this a copy was made at the same
time by means of the carbon paper. The sheet or slip was then torn off,
and sent with the amount of the purchase to the cashier ; the salesman
retaining the copy. At the close of the day the amounts from thèse
various slips were ascertained and entered upon the cashbook, and the
slip destroyed soon after. The spécification of the destruction of books
or records is based upon the destruction of thèse slips. There is no tes-
timony frOm which it can be found that the failure to keep a more
complète set of books, or that the destruction of thèse slips, was with
intent to conceal the financial condition of this bankrupt; and, in the
absence of such testimony, it cannot be so held.
3. Did the bankrupt make a materially false statement in writing to
one of the objècting creditors for the purpose of obtaining property
from such creditor? It appears that some time prior to September 9,
1902, the bankrupt wrote tp one of the objècting creditors, requesting
it (a copartnership) to sehd him a bill of goods on crédit. The amount
984 129 FEDERAL EEPOKTER.
is not shown. Before sending the goods, the créditer requested of the
bankrupt a statement of his financial condition. In response to this
request the bankrupt on September çth wrote the créditer as follows :
"Waterloo, lowa, Sept. 9tli, 1902.
"Messrs. Llndeke, Warner & Schurmeier, St. Paul, Minn. — Gentlemen : En-
elosed please flnd statement of my standing as near correct as I can re-
inember.
"New the reason that I am behind in my payments, I had to put in a
heavier stock than I Intended on account of the compétition In this city, and
I suppose I bought of too many people whlch I am not doing this fall. My
sales bave increased every montb since In business, and if tbey continue
to do so I wlll not owe a cent by Jan. Ist. If you consider my crédit good
enough to ship my order I would flrst like to ask you to caneel the Wool
Dress Goods, as I bave ail I can use in that Une.
"Hoping to hear from you favorably, I am,
"Yours Truly, Henry Allendorf."
The statement inclosed in this letter is upon a printed blank address-
ed to, and apparently furnished by, the creditor, and is as follows :
"Gentlemen, the followlng Is a correct statement of our flnancial condi-
tion on Sept 9, '02:
Assets.
Stock of merchandise $ 5,000
Cash on hand and in bank 50
Store furniture and flxtures 400
Total assets ? 5,450
Insurance on stock $ 3,600
Annual sales 12,000
Llabilitles.
Bank indebtedness $ 200
Money borrowed from friends and relatives
Other borrowed money
Mortgages
Merchandise indebtedness.
[Names and amounts stated] Total 1,041
Other small bills, about 250
Total ? 1,491
"[Signed] Henry Allendorf."
At the date of this statement the bankrupt was owing his wife's moth-
er and another lady some $8oo or $900, and this amount and about
$375 owing to another creditor are not stated in the list of his liabilities.
Upon receipt of this letter and this statement, the creditor shipped to
the bankrupt the goods ordered. The testimony of the bankrupt shows
that the crédit so obtained was afterwards settled and paid by him
in January or February following. Afterwards, and on May 15, 1903,
the bankrupt ordered by letter from this creditor a bill of goods
amounting to $63.39, ^"d on May 20th, another order amounting to
$32.50, both of which were filled, and the goods soon after shipped to
the bankrupt. The creditman of this creditor testifies that the order
of May isth was the first the fîrm had receîved from the bankrupt for
several months, and that before approving it he looked up their infor-
mation on Allendorf, and read his statement of September 9, 1902, and.
EX PARTE P0WEK3. 985
on the strength of tliat, approved the order and shipped the goods, and
that the order of May 20th, was also approved and the goods shipped
on the strength of such statement. Conceding, without so deciding,
that a materially false statement made prior to the amendment of Feb-
ruary 5, 1903, to the bankruptcy law (chapter 487, 32 Stat. 797 [U. S.
Comp. St. Supp. 1903, p. 409]), may be shown, to defeat a discharge
in proceedings commenced since that amendment, do the facts shown
sustain this spécification ? That the omission by the bankrupt from this
statement of the amounts owing by him to his relatives and to the
other creditor, if knowingly or purposely done, would be a material
false statement, may be conceded. Does it, however, fairly appear that
such statement was made for the purpose of obtaining the goods order-
ed May isth and 2oth, respectively ? The statement was made at the
request of the creditor, when it received the order for goods, some time
prior to September 9, 1902, and to induce it to fill that order. There
is nothing in the statement, nor in the letter of the bankrupt inclosing
it to the creditor, to show that it was to be a continuing statement or
représentation of the bankrupt's financial standing — in fact, the state-
ment is expressly Hmited to his condition on September 9, 1902 — and
the testimony of the creditman of this creditor and the letter of the
bankrupt conclusively show that it was made to secure the bill of goods
prior to September 9th only. Between that date and May I5th follow-
ing (more than eight months) there was no dealing between thèse par-
ties, and there is no évidence from which it can be fairly inferred that
the statement was made for the purpose of obtaining the goods shipped
upon the orders of May I5th and May 2oth. To defeat a discharge,
the bankrupt must hâve obtained property upon a materially false state-
ment made in writing for the purpose of obtaining such property. The
statement in question was not made for the purpose of obtaining the
property shipped to the bankrupt by this creditor on May i5th and
20th, respectively, nor any other property for which he is now owing.
It follows that the spécifications of objection in opposition to the
discharge are not sustained by the évidence, and the discharge must
be granted, and it is so ordered.
Ex parte POWERS.
(District Court, W. D. Kentucky. January 5, 1904.)
1. Habeas Corpus— Fedeeal Courts— Pbisoneb in Custody undek Ceiminal
Charge bt State.
A person in prison under a conviction by a state court on an indictment
charging him with being accessory to a murder, and pending an appeal
from such conviction, is not "in custody in violation of the Constitution
or of a law or treaty of the United States" wlthin the meanlng of Rev. St.
i 753 [TJ. S. Comp. St. 1901, p. 592], and such section does not authorize his
discharge on habeas corpus by a fédéral court, on the ground that durinç
his trial he vi^as deprlved of rlghts guarantied him by the fédéral Constl-
% 1. Jurisdictlon of fédéral courts on habeas corpus proceedings, see note to
l!) re Iliise, 25 C. C. A. 4,
See Habeas Corpus, vol. 25, Cent. Dig. § 44.
986 129 FEDERAL EEPORÏEK.
tution. However erroneous the judgment of conviction may hâve been,
bis imprisonment is legial until the charge made in the indictment bas been
hnally adjudicated by the state courts.
2. S AME.
A writ of habeas corpus from a fédéral court cannot be made to perf orm
the office of a writ of error to revievs' a judgment of conviction in a state
court in a criminaj case of which it had jurisdiction ; and, even where it
Is clalmed by the défendant that some right under the Constitution of the
United States bas been denied him, a fédéral court will not ordinarily
interfère by writ of habeas corpus, but will leave him to bis remedy by
direct proceedings for review in the state courts, and by writ of error f roiu
the Suprême Court of the United States if bis daims should be there de-
cided adversely.
Habeas Corpus.
Sims & Grider and H. C. Howard, for petitîoner.
EVANS, District Judge. The petitioner, who is in the Jefferson
county jail under sentence of death, asks for a writ of habeas corpus.
Section 753, Rev. St. U. S. [U. S. Comp. St. 1901, p. 592], so far as
appHcable to the pétition before me, expressly provides tliat "the writ of
habeas corpus shall in no case extend to a prisoner in jail, unless where
he * * * is in custody in violation of the Constitution or of a law
or treaty of the United States," etc. The petitioner shows that he is
in jail under a conviction had in a state court upon an indictment char-
ging him with being accessory to the murder of William Goebel. It
also shows that he bas appealed from the judgment of conviction, and
that the appeal is pending in the Court of Appeals of the state.
Of the indictment for the offense charged the state court undoubted-
ly had jurisdiction, and its judgment, however erroneous, is not a
nullity. It cannot be maintained that being in jail under such a con-
viction upon such a charge is of itself a being in "custody," in violation
of the Constitution or of any law or treaty of the United States. No
provision of the Constitution or of any law of the United States in ternis
forbids such a resuit from such a cause. Conceding this, it is neverthe-
less suggested that during the progress of the trial which resulted in his
conviction the petitioner was denied ail the rights secured to him by
the fourteenth article of amendments to the Constitution of the United
States. Certainly, if the averments of the pétition be true, it may be
hard to escape the conclusion that he was manifestly denied some, at
least, of those rights. But, if so, is this the proper tribunal or now
the proper time so to adjudge, or to give the relief to which he might
be entitled as a citizen and as a man ? There can be but one answer to
the inquiry. The petitioner is not in jail primarily, or in the sensé in
which we must view the case, for any cause except that which comes
through the processes of law resulting from his indictment upon the
charge upon which he was tried and convicted, to wit, that of being
accessory to the murder of Goebel. To imprison him after a convic-
tion upon that charge, or in advance of a conviction thereon, under
process issued upon the indictment itself, is in no sensé a violation of
the Constitution of the United States, or of any law or treaty thereof.
In the légal sensé, that is the only ground of his imprisonment, and
it would necessarily so appear in any return to a writ of habeas corpus.
EX PARTE POWEES, 987
It is quite true that îh a certain secondary or remote sensé it might be
said, if the averments of the pétition be taken as true, that, if he had not
been denied his rights under the fourteenth amendment, he would not
hâve been convicted; but, even if that were true, it would only affect
the conviction, and not the imprisonment, which would continue if the
conviction were set aside and a new trial granted, especially as this
court could not admit to bail pending another trial in another court.
But we cannot look at the case from the standpoint last indicated, nor
treat the real cause of imprisonment as being anything except the
charge made in the indictment and the conviction thereon. The im-
prisonment appears to be the resuit of the charge made in the indict-
ment, and not in any palpable sensé the resuit of the déniai, during the
progress of a trial upon that charge, of his rights under the fourteenth
amendment. If it be true that the petitioner, at his trial, was denied any
of the rights guarantied by the fourteenth amendment, this is not the
tribunal to review the proceeding.
Section 753, Rev. St. [U. S. Comp. St. 1901, p. 592], plainly limits
the power of the fédéral courts to cases where the "custody" is in viola-
tion of the fédéral Constitution or laws. It excludes the power to cor-
rect by writs of habeas corpus mère errors in the proceedings of some
other court having jurisdiction. There is no right to a writ of error
from this court to a state court, either directly, or indirectly through
the médium of the writ of habeas corpus, though under some circum-
stances and in a certain modified sensé this court might hâve the right
to proceed under section 753 to ascertain whether an imprisonment itself
was in violation of the Constitution or laws of the United States, or
was inflicted in a case of which the state courts had no jurisdiction.
But ordinarily this court, so long as there is or may be an appeal in due
course of law from a judgment of a state court in a crirninal case, can-
not and should not review that judgment, even where the rights of a
citizen, under the Constitution or laws of the United States, are alleged
to hâve been denied. Other tribunals are given that power. In some
cases it is true, especially where no appeal is allowed by law, the cause
of the confinement of a prisoner in a jail, and even the grounds of his
conviction of an offense, may be looked into, to see if such confinement
is outside of the jurisdiction of the court, or is in violation of the Con-
stitution or laws of the United States. Ex parte Green (C. C.) I14
Fed. 959 ; Ex parte Comingore (D. C.) 96 Fed. 552. Unquestionably in
this instance the petitioner had the right under the laws of Kentucky to
an appeal to the Court of Appeals, and, if the constitutional ques-
tions bave been properly raised in the record in the state court, he will,
as a matter of right, be entitled to a writ of error from the United
States Suprême Court, should the Court of Appeals afSrm the judgment
against the petitioner. It is not for this court to interfère with those
processes. The right to review the proceedings by which the petitioner
was convicted is vested in other tribunals, and this case is not like one
where an appeal is denied, or where the trial court had no jurisdiction
or other extrême cases.
Besides thèse considérations, other matters may be alluded to. With-
out hav'ng the record in the state court before me, and without express-
ing any opinion upon its contents, or whether it raises certain constitu-
988 129 FBDEKAL EErORTEK.
tional questions, it may be said that if, in fact, it présents those questions
in such a way as to entitle the petitioner to a writ of error from the
Suprême Court of the United States, then clearly this court should not
anticipate the action of that court, and especially as no writ of error
would be necessary or allowable, if the Kentucky Court of Appeals
should reverse the judgment against the petitioner. If, on the other
liand, the constitutional questions are not so raised in the record as to en-
title the petitioner to go to the Suprême Court, then it is not for this
court to say that there was error in the proceedings in the state court
in a case within its jurisdiction, by its déniai to the petitioner during
the trial of his rights under the Constitution of the United States. It
would not, in that contingency, appear that any of those rights were
properly claimed before the state court by the petitioner, or were im-
properly denied by that court. It necessarily results, under our dual
System of government, that the fédéral tribunals ought not to interfère
by writs of habeas corpus with the administration of the state criminal
laws, except in clear and urgent cases, where no other available remedy
is open. The authorities leave no doubt of the soundness of this con-
clusion.
The fourteenth article of amendments to the Constitution of the
United States, after making ail persons born in the United States or nat-
uralized therein citizens of the United States, provides, first, that no
state shall make or enforce any law which shall abridge the privilèges
or immunities of citizens of the United States ; second, that no state
shall deprive any person of Hfe, liberty, or property without due process
of law; and, third, that no state shall deny to any person within its ju-
risdiction the equal protection of the laws. Thèse are provisions, not
only of extraordinary, but of paramount, importance, and it is settled
clearly enough that the word "state" in this amendment includes its
officers, its courts, and other governmental agencies. Ail of them are
included in the prohibitions of the constitutional provision. Chicago,
etc., R. R. v. Chicago, i66 U. S. 233, 17 Sup. Ct. 581, 41 L. Ed. 979,
and cases cited. If it were not so, the amendment would be futile.
True, the rights indicated are guarantied by the organic law ; but, in or-
der that even the Suprême Court of the United States may enforce the
guaranty, the right claimed must be asserted in some form, and its
déniai by the state court must in some way be shown upon the record.
Otherwise the court can get no tangible hold upon the question.
It is quite impossible, from the averments of the pétition before
me, to say whether, in a way that meets that requirement, it was in-
sisted upon, and shown or adequately attempted to be shown, at the
trial in the state court : Either, first, that any privilège or immunity of
the petitioner as a citizen of the United States was denied or abridged
by the state court at the trial. This would be a very gênerai claim, of
course, and it would be requisite to specify in the record what privi-
lège or immunity was abridged or denied, and how it was donc, or at
least it ought to be shown in some proper way how any attempt was
made to claim such right and how it was denied. Or, second, that the
trial and its results, if enforced, would deprive the petitioner oî his life
without due process of law. This claim should, of course, be made ex-
pressly and distinctly, and the record made to show in some proper
EX PARTE POWER8. 989
way how it was made, the grounds thereof, and how it was denied. Or,
third, that the petitioner at the trial was denïed the equal protection of
the laws. This claim should be made before the state court, and the
record made explicit, not only as to the claim, but how it was supported
by proof, or offers of proof. Or, at ail events, in some proper way
thèse matters must hâve been or must be called to the attention of one or
the other of the state courts, and the décision must hâve been or must be
against them. Sayward v. Denny, 158 U. S. 183, 15 Sup. Ct. jyj, 39 L.
Ed. 941. We must assume that thèse claims were or will be properly
presented, and that the record will se show.
It is claimed that in December, 1899, upon a proper certificate of his
élection in the preceding November, William S. Taylor, in the légal
and ordinary way, was inaugurated Governor of Kentucky, and en-
tered upon the discharge of his duties, and continued to perform those
duties for several succeeding months. In the meantime his élection
was contested before the Législature by Wm. Goebel ; but while the
contest was pending, and prior to its détermination, Goebel was shot.
While he was on his deathbed a portion of the members of the Législa-
ture undertook to détermine the contest, and certain publications, called
the "House Journal" and the "Senate Journal" were subsequently print-
ed, and undertook to establish a record of the contest and its resuit.
Possibly while he was alive, but most likely unconscious, the oath of
ofJSce is claimed to hâve been administered to Goebel. If done at ail,
this was accomplished only a very short time before his death. It is
claimed that thèse proceedings were fraudulent and pretended, that the
so-called House Journal and Senate Journal were pure fabrications,
and that the contest was never in fact determined by the Législature or
a quorum thereof. It may be dififîcult to reach any other conclusion;
but it would seem that thèse are questions to be determined, at least in
the fîrst instance, by the state courts, as questions rather of state than
of fédéral law. In re Duncan, 139 U. S. 449, 11 Sup. Ct. 573, 35 L. Ed.
219.
It is insisted in the pétition before me that W. S. Taylor, after be-
ing duly qualified as the Governor of the state, and while acting as
such, executed and delivered to the petitioner, who accepted it, a full
and free pardon for the offense charged in the indictment; that this
pardon, under the seal of the state, was exhibited to the state court at
the trial ; and that it was denied by that court any effect whatever. It
goes without saying, in my judgment, that every citizen of Kentucky,
equally with ail of his fellows, is entitled to the benefits of a free and
full pardon given by a Governor, either de jure or de facto. If he be
the acting Governor under color of law, his acts, upon every principle of
law known to me, are effective, and particularly so until after his
title to the office has been finally adjudged to be invalid. See In re
Henry Ward, 173 U. S. 454, 19 Sup. Ct. 459, 43 L. Ed. 765. Can one
citizen alone be denied the benefits of such a pardon, while ail others
hâve the right to such benefits, and still not be deprived of the equal pro-
tection of the laws? is a most important inquiry. But, however
strong my convictions on the subject might be, it would not follow
that I had power to grant the writ prayed for. The ruling of the court
may hâve been erroneous ; but, as the state courts are as much bound by,
990 129 FEDERAL EEPORÏER.
and as they as much respect, the Constitution and laws of the United-
States as the fédéral tribunals. it must be presumed on this hearing
that the Court of Appeals in this case will detect, and, if possible, cor-
rect, the errors, if any, of the trial court.
Under Kentucky law every person accused of a crime is entitled to
be tried by a fair and impartial jury. Const. § 7. Can the petitioner,
in a palpable way, be denied this right, while ail others are given the
full benefit of it ? Can the life or liberty of the petitioner, a citizen of
the United States, be taken from him by the verdict of a jury, packed
and organized for that express purpose by the officers of the state by
notoriously public methods, and it still be said that there was no déniai
to him of the équal protection of the laws? If due process of law and
the equal protection of the law do not include a fair proceeding in the
sélection of a jury, it is quite difficult to see what they do include; for,
unless that is done, a trial by a jury would be a mockery. The stream
of justice would indeed be poisoned at the fountain-head. See Strauder
V. West Virginia, 100 U. S. 308, 309, 25 L. Ed. 664.
It is averred in the pétition that the jury in this case was a packed
jury, and that the manner of its sélection was such as could only re-
suit, and was intended to resuit, in having a jury pledged in advance
to convict the prisoner; but even that gives me no right to interfère,
for, if we assume the facts to be true as stated, and if the questions of
constitutional law growing ovit of them shall properly and adequately
appear in the record of the state court, the remedy of the petitioner is
complète through his appeal to the Court of Appeals of the state, and,
if that tribunal should concur with the circuit court in denying or ig-
noring the constitutional rights claimed by the petitioner, the Suprême
Court of the United States would doubtless assume jurisdiction upon a
writ of error. Nor can it be supposed that this could be prevented
by sections 280 and 281 of the Criminal Code of Kentucky, which ex-
clude the right of exception to anything that may be done in the forma-
tion of the jury in the trial court; for otherwise every constitutional
guaranty could be crippled or destroyed by similar means with ease and
facility. Shutting ofï, or attempting to shut off, considération by a
higher court of such questions, while allowing ail others which may af-
fect results involving the life or liberty of the accused to be reviewed and
corrected, can hâve no effect upon the rights or powers of the Suprême
Court under the Constitution of the United States, if, indeed, the Court
of Appeals itself can constitutionally ignore or be exempted from the
duty of enforcing the constitutional rights of the citizen, if appealed to
for the purpose. See, especially, Rogers v. Alabama, 192 U. S. 226,
24 Sup. Ct. 237, 48 L. Ed. . The constitutional provisions referred
to are of higher sanction than any statute or Code, and create rights
which it is the duty of the judicial tribunals to protect and enforce, any
law of any state to the contrary notwithstanding.
So that, if the questions arising under the fourteenth amendment
were, or if they shall be, properly raised and presented, the rights of
the petitioner are clear. If not raised or presented, either at the trial or
in the Court of Appeals, then those rights would not appear to hâve
been denied by the state courts, and the failure to demand thèse rights
cannot hâve the effect of giving this court revisory jurisdiction by
EX PAKTE PO WEBS. 991
means of a writ of habeas corpus. The authorities establish the fol-
lowing propositions, to wit:
1. That judgments of the state courts in criminal cases, of which
they hâve jurisdiction, should not, in gênerai, be reviewed by the fédéral
courts through writs of habeas corpus, but that, where it is claimed in
such cases that some right claimed under the Constitution of the Unit-
ed States has been denied, the proper remedy is by a writ of error.
Markuson v. Boucher, 175 U. S. 184, 20 Sup. Ct. 'jS, 44 L. Ed. 124 ;
Tinsley v. Andersen, 171 U. S. loi, 18 Sup. Ct. 805, 43 L. Ed. 91.
2. That the writ of habeas corpus cannot be made to perform the
office of a writ of error. Under the latter the inquiry is addressed to
errors merely, while in the former the question is whether the pro-
ceedings and judgment are nullities. United States v. Pridgeon, 153
U. S. 48, 14 Sup. Ct. 746, 38 L. Ed. 631 ; In re Schneider, 148 U. S.
166, 13 Sup. Ct. 572, 37 L. Ed. 406; In re Lane, 135 U. S. 443, 10
Sup. Ct. 760, 34 L. Ed. 219.
3. While, under section 753, application for a writ of habeas corpus
may be made to the fédéral courts after a judgment in a criminal
case, those courts should ordinarily limit the remedy by that writ to
cases in which the judgment or sentence attacked is clearly void by
reason of its having been rendered without constitutional power, or
without jurisdiction, or in excess thereof. In re Frederich, 149 U. S.
70, 13 Sup. Ct. 793, 37 L. Ed. 653.
4. Though it is somewhat a matter of discrétion, yet ordinarily a féd-
éral court, even in a case where it is otherwise allowable, will not inter-
fère, by writ of habeas corpus, with a criminal case pending in a state
court, in advance of a trial or final détermination of the case by the
state court. Cook v. Hart, 146 U. S. 184, 13 Sup. Ct. 40, 36 L. Ed. 934 ;
Davis V. Burke, 179 U. S. 399, 21 Sup. Ct. 210, 45 L. Ed. 249. Excep-
tions to the gênerai rule are found in cases like Davis v. Burke, 179
U. S. 399, 21 Sup. Ct. 210, 45 L. Ed. 249; Boske v. Comingore, 177
U. S. 466, 20 Sup. Ct. 701, 44 L. Ed. 846; Whitten v. Tomlinson, 160
U. S. 231, 16 Sup. Ct. 297, 40 L. Ed. 406; In re Neagle, 135 U. S. i,
10 Sup. Ct. 658, 34 L. Ed. 55.
5. When the trial court of a state has power and jurisdiction under
state laws to try a case for murder, and the prisoner, when convicted,
has an appeal of which he avails himself, the fédéral court, if applied to
pending the appeal for a writ of habeas corpus, on the ground that the
proceedings were in violation of the Constitution of the United States,
should décline to interfère. In re Duncan, 139 U. S. 449, 11 Sup. Ct.
573» 35 L. Ed. 219. This case alone would appear to be décisive of the
one before me.
From every standpoint, therefore, it ai)pears clear that this court
should not at this stage attempt to interfère, and the application for
a writ of habeas corpus is accordingly denied.
i)93 129 FEDEKAL ItKPOKTEE.
ORAWFORD et al. v. EIDMAN, Internai Revenue CoUector.
(Circuit Court, S. D. New York. April 8, 1902.)
No. 3,919.
1. Damages— CosTS in Foemee Peoceedings.
A suit for the possession of certain real estate had been dlscontlnued
by a government offleer, who had previously seized the property for viola-
tion of law, but who, without right, continued in possession after the dls-
continuance. Eeld, in an action for damages for thus wrongfully retain-
ing possession, that the amount of costs in the former proceeding, incurred
by the plaintiff in the latter case, formed no part of the damages which
were recoverable.
2. Public Oïficeks— Liability— Weongful Possession or Peivate Peoperty
—Damages.
Where a government offlcer, who has seized property used for illicit
purposes, retains possession of it without color of process after his right
to such possession has eeased, he is liable to the owners of the property
for the damages sufCered by them through such wrongful possession, even
though he acted in good f aith.
3. Same— Exbmplaey Damages— Wanton Diseegaed of Peivate Rights.
Where a government officer injures a citizen by any officiai act, he is,
in addition to his liability for aetual damages, subject to exemplary or
punitive damages, if he proceeds in malicious or wanton disregard of the
citizen's rights.
At Law. Action for damages.
This action was brought by John G. Crawford and another against Ferdinand
Bidman, Collector of Internai Revenue for the ' "lird district of New York.
The plaintiffs had purchased at a f oreclosure saie a pièce of property on which
they held a purchase-money mortgage, and which had been seized previously
by the défendant on discovering an illicit still on the premises. ïhe défendant
removed the still and its appurtenances, without disturbing an engine and
boiler which had been placed in the building in order to furnish steam power
for factory purposes; and, though the plaintiffs were entitled to possession
under the judgment of foreclosure, the défendant continued to retain pos-
session of the building, with internai revenue locks on the doors, on the ground
that he might want to sell the engine and boiler as being connected with the
illicit still. The plaintiffs made numerous attempts to Induce hlm to sur-
render the building in its condition at that time, or to remove the engine and
boiler and give up the building, or to sell the engine and boiler there and then
surrender the building ; but he would do nothing. The plaintifCs finally ob-
tained an order from the Commlssioner of Internai Revenue, directing the de-
fendant to release the property to them, which order was not obeyed for more
than two weeks after its receipt.
On the ground that the défendant had unlawfully prevented them from
having the possession and use of their property, the plaintiffs brought this ac-
tion.
Jacob Fromme and Isaac Fromme, for plaintiffs.
Charles D. Balcer and Arthur M. King, Asst. U. S. Attys., for de-
fendant.
WALLACE, Circuit Judge (charging jury). You aiready under-
stand that this action is brouglit by the plaintiffs to recover damages for
being kept from the possession of their premises, 324 West Twenty-
1f 2. Torts of publie offlcers, see note to Mayor, etc., of City of New York v.
Workman, 14 C. C. A. 534.
CRàWFOED V. EIDMAN. 993
Sixth Street, during the time that intervened after they acquired right
to the possession on the foreclosure sale, and until it was surrendered to
them on the 30th day of August, following.
î\ow, it seems that the plaintiffs acquired title under the foreclosure
sale on June 30th. Until that time they had no right to the possession
of the premises. It seems that, shortly before, three weeks before,
the government, having information that an illégal distillery was be-
ing carried on, entered the premises and made a seizure of the personal
property found there. The plaintiffs had nothing to do with conducting
the illégal distillery. They were entirely innocent. On the other hand,
the défendant, representing the government, was perfectly justified in
visiting the premises and in removing therefrom ail the guilty prop-
erty ; that is to say, ail the property which was being used in the con-
duct of this illicit business. The property was removed in April, the
iith day of April, except an engine and boiler. Now, it is conceded
that this engine and boiler were a part of the real estate, that a suit had
been commenced by the government to forfeit the real estate, and
that, if that suit had proceeded to a decree, the boiler and engine
would hâve been forfeited, as well as the land and building. It appears,
also, that the plaintiffs, holding a mortgage upon the property, this be-
ing before the foreclosure sale had been consummated, intervened in
that suit ; and the government, doubtless being advised that they were
entirely innocent, permitted its suit to be discontinued.
Now, it is said that the plaintiffs were compelled to pay the costs
on the discontinuance of that suit. Very likely they were; but that
is a matter with which this défendant has no concern whatever. In ail
probability, if the défendant had not been kindly disposed toward the
plaintiffs, that suit might hâve been protracted for months, and would
not hâve terminated until there had been a final decree; and in the
meantime the property would hâve been in the possession of the govern-
ment. But the government ofEcers seemed to recognize that it was just
that the suit should be discontinued, and it was discontinued on the 22d
day of June. That was the end of that controversy, and the matter of
the costs is of no relevancy.
Now, as I hâve said, on the 30th day of June the plaintiffs acquired a
right to the possession of the property. On the 2d day of July, accord-
ing to the testimony of one of the plaintiffs, he called upon the défend-
ant to be allowed to take possession of the property that had been
seized. It seems that, when the ofïîcers seized the personal property
there, they put padlocks upon the basement door. The boiler and engine
were situated in that basement. The basement, according to some of the
testimony in the case, was the most désirable part of the building ; and,
as the building was designed for renting for factory purposes, the use
of the machinery, including the engine and boiler, was important. They
were located in the basement, and therefore it was that the plaintiffs,
anxious to hâve possession of their property, and anxious to get a tenant
into it, made application to the défendant to hâve the lock removed f rom
the door, so they could hâve possession.
Hère is where the trouble begins, because up to this time there was
nothing of which any fair-minded man could reasonably complain. The
situation of affairs at that time was this : The boiler and engine was
129 F.— 63
994 129 FEDERAL BEPORTER.
real estate, or it was not. If it was real estate, it was abandoned when
the government abandoned and discontinued its suit for the condemna-
tion of the real estate. If it was not real estate, it was personal property,
and it was property which the government was entitled to seize; and
then it was the duty of this défendant, and the officers of the govern-
ment acting under him, within a reasonable time, to remove it from
the premises, or, if they chose to keep it there, to keep it there with-
out détriment to the premises. They did not do it. Negotiations en-
sued. The plaintifïs' lawyers, and the plaintiffs' lawyers' clerks, and
the plaintiffs themselves, visited the internai revenue officers, and
various interviews took place; and it seems that communications were
passing to some extent between the défendant and the Commission-
er of Internai Revenue at Washington. The resuit was that for two
months, practically, from July 2d until August 30th, the plaintiffs
were kept out of the possession of their property. The défendant
may hâve acted in the best of good faith in doing this; but he must
pay for it, if he did it without right. The government of the Unit-
ed States— and you can treat him as the government in this case —
has no right to take possession of the real estate of an individual and
preclude him from enjoying it, unless it does so under color of process
which entitles it to be held by the government. There is nothing of
the kind in this case. If the Commissioner of Internai Revenue him-
self, or the Secretary of the Treasury, assumed to do this without
right, the plaintiffs are entitled to compensation; and the person who
for the time being represented the government must pay for it. If
he has acted honestly in the discharge of his duties, the law authorizes
the court to give him a certificate of probable cause ; and then the con-
séquences do not fall upon him personally, but the recovery is paid by
the government of the United States.
Now, this is about ail there is of this case. From July 2d until Au-
gust 30th the plaintiffs were kept, without right, from the enjoyment of
their property ; and the question for you to détermine is, what verdict
are they entitled to ? What will compensate them for the loss they hâve
sustained ? Well, in the first place, they are entitled, without doubt, to
recover the rental value of the premises during the time they were kept
out of possession. They were not kept out of possession from the 30th
of August until the ist day of March, 1900; and I do not know of any
rule upon which they can recover damages for being kept out of pos-
session during that time. They did not rent the property. They did
not rent it the next spring. I do not know why the government was
at fault for that. That was the plaintiffs' misfortune. Undoubtedly, if
they had had the property in May, they could hâve rented it more readily
than they could in June, or than they could in August, when they got
possession. But they did not get title until the 30th of June — the ist
of July, practically. The best season of the year for renting had already
goné by. Now, they were kept out of occupation for about two months.
The premises remained vacant a year and a half, or more than that.
The plaintiffs are entitled to a verdict for the loss of occupation of the
premises during the time they were deprived of possession by the gov-
ernment. They are not entitled to any damages upon the theory that
they lost an opportunity of renting the premises.
CKAWFOHD V. EIDMAN. 995
Now, how much was the rental value of the premises during the tîrae
tliey were kept out of possession? The witnesses put it from $2,100
to $2,400 a year ; and it seems that, when the plaintiffs did rent it, they
rented it for $1,800.
Now, upon ail this testimony, you are to détermine what was the fair
annual rental value of thèse premises, and allow them for the two
months, practically two months, they were deprived of the use of the
premises at that value.
Now, there is another issue. This was a wrongful act on the part of
the défendant. I do not mean to say that it was an intentionally wrong-
ful act, by any means; but it was an invasion of the rights of thèse
plaintiffs, because, when they demanded possession of the property, it
was the duty of the défendant to see to it that they had possession.
But it is said hère that there were circumstances of oppression, circum-
stances of wanton disregard of the rights of thèse plaintiffs by the de-
fendant; and if you find that to be so, then the plaintiffs are entitled
to what the law terms "exemplary damages." That is to say, it is
in your discrétion to award a sum of money as punishment to the de-
fendant for his wanton disregard of the rights of the plaintiffs. And it
is for you to say, if you corne to the conclusion that the case is one for
punitive damages, how much should be allowed to the plaintiffs on that
account. But is there anything in the case which leads you to believe
that there was any intention or purpose on the part of this défendant
to wrong the plaintiffs ? There is no doubt that there was some dilatori-
ness. There was enough dilatoriness to deserve condemnation. No
Collector of Internai Revenue, and no other officer of the government,
has the right to sit back in his chair, when he has taken possession of
a citizen's property, and compel the citizen to run to him for six weeks
or two months to find out what is going to be done. He is paid for
the discharge of his duties to the citizen, as well as to the government ;
and it is his business to be active and alert, and to see that the citizens
who fall under his jurisdiction are protected in their rights as far as
tliey can be without jeopardy to the government; and it does not do
for one officer to turn a citizen over to another, and for another to turn
him over to another.
Now, it was entirely natural that the défendant in this case, not be-
ing learned in the law, should désire instruction as to his duties and
his rights. He appHed to the Commissioner of Internai Revenue. The
Commissioner of Internai Revenue — I do not know whether he is a
lawyer or not — could not décide this grave question without referring it
to the Attorney of the United States for the Southern District of New
York ; and it seems to hâve taken that learned officiai several weeks or
less to make up his mind, and in the meantime the plaintiffs were kept
outside their premises and on the sidewalk,
Now, the question is whether the défendant acted in good f aith ; that
is ail. There is some delay which seems to be quite unexplained. On
the I3th of August he got instructions from the Commissioner of In-
ternai Revenue to release this property and surrender possession. Sup-
pose he got the letter on the I5th of August; there were about two
weeks in which he did nothing, waiting until he got ready, I suppose.
Well, I do not suppose he intended to oppress the plaintiffs. I do not
996 129 FEDERAL EEPORTEB.
suppose tliat for a moment. But I do think it was his duty to get tip
out of his chair, or, if he did not, to send some of his officiais to thèse
plaintiffs, and tell them that he had this letter, and that they were en-
titled to the possession of their property.
Now, gentlemen, I leave this case with you. You will not willingly
reach the conviction that this défendant has been guilty of any malicious
or wanton conduct. Nevertheless, the évidence is for your judgment.
Unless you find he has, then your verdict for the plaintiff will be limit-
ed to the loss of rental value of the property during the time they were
kept from its possession.
The jury then retired, and, returnlng, rendered a verdict In favor of the
plaintiffs in the sum of $400.
Mr. Baker. I ask for a certlfleate of probable cause, and rnake the usual
motion for a new trial, and to set aside the verdict as contrary to the évidence
and as not warranted by the évidence, and for a stay of 60 days in which to
prépare a bill of exceptions.
Certificate of probable cause granted, with 30 days' stay in which to make
a bill of exceptions.
GRING V. CHESAPEAKE & DELAWARE CANAL CO.
(Circuit Court, D. Delaware. May 18, 1904.)
No. 232.
1. Pbeliminart Injunction— Ex Parte Afpidavits.
It is a gênerai though not universal rule that a prelimînary Injunction
will not be granted on ex parte affldavits unless in a clear case. The
rule admits of important exceptions including, among others, cases in
which the function of the preliminary injunction is merely to maintain
the status quo until final decree, where comparatively great injury may
resuit from the withholding, and comparatively little can flow from the
granting, of such injunction. In such cases the court regards with just
discrimination the balance of convenience and hardship, and, in the ab-
sence of a final détermination of right, alms so to résolve for the time
being whatever doubt may exist as to do the most good and the least harm.
(Syllabus by the Court)
In Equity.
Willard M. Harris and Harry P. Joslyn, for complaînant.
Ward & Gray and George L. Crawford, for défendant.
BRADFORD, District Judge. This is a motion for a preliminary
injunction on a bill brought by Charles Gring against the Chesapeake
and Delaware Canal Company. The bill sets forth in substance that the
défendant is a corporation created by spécial acts of assembly in Dela-
ware, Maryland and Pennsylvania, and owns and controls a canal ex-
tending from Delaware Bay at Delaware City, Delaware, to the Ches-
apeake River at Chesapeake City, Maryland, which is open and navi-
gable as a public highway free for the transportation of goods, com-
modities and products on payment of the tolls prescribed by law ; that
the complainant is the owner of certain steam tugs and other vessels and
barges, and has for many years been engaged in the business of trans-
porting lumber and other material between ports in North Carolina,
GRING V. CHESAPEAKE & DELAWAEE CANAL CO. 997
Virginia, Maryland and Pennsylvania by means of his vessels, and of
towing barges and vessels with his steam tugs on Chesapeake Bay and
river and Delaware Bay and river, and elsewhere, and particularly
through the canal, and was and is entitled to use the same for navigation,
towing and transportation of freight upon equal terms with other per-
sons making a similar use of it, and without discrimination or undue
obstruction or restraint ; that during his use of the canal he has always
conformed to the régulations of the défendant for the care, préservation,
control and management of the canal and the safety of other vessels
using it; that for a number of years last past the défendant has un-
warrantably interfered with and delayed the progress of his vessels and
barges through the canal and its locks, such interférence and delay
usually occurring on Sunday, while steamers, barges and vessels of other
persons similarly navigating the canal hâve been allowed a free and
unmolested passage through it ; that the complainant's steam tugs with
barges and vessels in tow on many occasions and on days other than
Svmday hâve been unnecessarily and unreasonably delayed and hin-
dered by the défendant in passing through the canal ; that the défend-
ant from 1895 to the présent time has exacted from the complainant, in
addition to the tolls paid by him for transportation through and navi-
gation of the canal, in conformity with its charter and published toll
rates, certain fixed pecuniary charges against his steam tugs by the
trip or passage each way, whether towing loaded barges through the
canal or returning with them light in thirty days, although such steam
tugs do not carry and are not so constructed as to carry the commodi-
ties to which the toll rates are applicable; that such a charge or tax
cannot be imposed upon the ground that the steam tugs are empty of
cargo, for the reason that their tonnage capacity is occupied by the ma-
chinery, boilers and furniture necessary to enable them to engage in
inland and coastwise towing ; that such charge or tax is not imposed by
the défendant upon ail other persons owning tug boats engaged in the
business of transporting lumber and other freight and towing the same
through the canal; that the collection of the fixed charges or taxes
per trip exacted from the complainant was enforced by preventing or
threatening to prevent the passage of his tug boats with their tows
through the canal until the same were paid or secured to the défendant ;
that for a number of years last past the défendant has imposed upon the
complainant's tug boats, vessels and barges and collected from him as
owner thereof greater rates of toll than those collected from other per-
sons making a similar use of the canal ; that during ail that time he has
been compelled by the défendant to pay a toll or tax for each of his
steam tugs returning with light barges within thirty days from the
time such steam tug passed through the canal with such barges loaded,
although the défendant does not exact any charge for the barges towed
back light by complainant's tug boats, the toll paid for the cargo when
on board a barge insuring the free passage of the barge w^hen returning
light within thirty days ; that the complainant's barges frequently hâve
been delayed in unloading and reloading and hâve been unable to re-
turn through the canal within that period, and an entrance fee has
been imposed upon them varying in amount as between différent ves-
sels ; that he has been informed by the défendant that, if his barges
998 129 FEDERAL EEI'OIIIEE.
make five full trips in any one season, it will refund any charge or
charges incurred by them in not returning light within thirty days;
that thèse charges are onerous and injurious to the complainant's busi-
ness; that the charges or toll against a tug boat while there is none
against a light barge in tow, both returning within thirty days, is
an unjust and wrongful discrimination in favor of the barge and gives
an undue and unreasonable préférence and advantage as against the
complainant ; that the régulation compelling his tug beats and barges
to return light within thirty days or else suiïer another charge or toll
is, where his barges and vessels hâve paid the rate of toll prescribed for
their cargoes, an unwarranted interférence with the right of free navi-
gation of the canal; that his steam tugs are duly enrolled and licensed
under the laws of the United States for inland and coastwise towing
and are properly inspected under the inspection laws of the United
States ; that their masters and engineers are duly licensed under the
laws of the United States and qualified to command and operate them ;
that the défendant, nevertheless, compels the complainant to secure from
it a permit for each of his steam tugs before using steam and towing
through the canal, under an assumed right in that behalf ; that the de-
fendant arbitrarily reserves to itself the right, if such permit be granted,
at any time to revoke the same and withdraw the privilège of using
steam on the canal; that no such requirement is made with respect
to vessels other than- steam tugs engaged in through towing; that
the right so claimed by the défendant is not warranted by its char-
ter nor is it a rule for the good government of, the canal or for the
gênerai convenience of vessels, but, on the contrary, annexes an onerous
condition to the exercise by the complainant of the right, secured to him
by virtue of the enrollment and license of his steam tugs, to the free and
uncontrolled pursuit of the business of inland and coastwise towing
and towing vessels engaged in Interstate commerce; that the require-
ment by the défendant of such permit is not imposed on certain other
steam tugs engaged in towing on the canal nor on other vessels, barges
and steamers navigating it; that the complainant has been notified by
the défendant that on and after a certain early day, his steam tugs
will be permitted to tow only such vessels and barges as it may desig-
nate, included in a list of his boats to be furnished by him to the( (de-
fendant, and, further, that after such day the défendant must control
the canal towing, and, further, that the towing by the complainant of
barges and vessels, whether owned by other parties or by him, is but
an extension by the défendant of a privilège to him and not a right
vested in him, and, further, that on and after such day ail barges and
vessels, other than those owned by him, towed to the canal by his steam
tugs, will be taken in charge by a steam tug controlled by the défendant
and towed through the canal at a certain towage rate or rate in addition
to the tolls charged on the cargoes of such barges and vessels or on such
barges and vessels as empty, and, further, that, if the complainant shall
effect an entrance into the canal and tow on it barges other than his
own, a towing rate will be imposed on him for each barge towed and the
privilège extended to his tug boats of using steam on the canal will be
revoked, compelling them as well as such barges, whether belonging to
him or to others, to be towed tiirough the canal bv a steam tug or steam
GKING V. CHESAPEAKE & DELAWARE CANAL CO. 91)9
tugs controlled by the défendant, thus enforcing payment of a towing
charge by the complainant's steam tugs as well as by the barges under
his control, in addition to the canal charge for the use of the canal;
that the enforcement of such a régulation by the défendant materially
affects the free navigation of the canal which ever since it was con-
structed in or about 1820 has been open to public use for vessels, sail-
ing as well as steam, upon payment of duly established rates of toU
on commodities ; that the control of the canal towing by the défendant
is foreign to its chartered purpose, which is to provide a navigable
public highway free for the transmission of commodities on payment
of prescribed rates of tolls thereon ; that the rules, régulations and re-
strictions proposed or adopted by the défendant, as above mentioned
are an effort on its part arbitrarily to prescribe the use of the canal to
such steam vessels, tug boats and other vessels as it may choose; that
such restrictions constitute an unlawful interférence with the right
of private property ; that their object is to prevent the free use of steam
tugs, including those of the complainant, in the business for which
they are licensed under the laws of the United States; that the hin-
drance and delays to which the complainant has been subjected in the
premises by the défendant operate to his préjudice and disadvantage
and impose unreasonable restraints and burdens upon subjects of Inter-
state commerce ; and that the détentions, delays, interférence, discrim-
ination and régulations complained of, if continued, will seriously hin-
der the complainant in the management of his business and materially
impair the value of his floating equipment, to his loss and damage in
a large amount, to wit, $20,000. The bill in substance prays, among oth-
er things, that the défendant may be perpetually restrained from hin-
dering, delaying or interfering with the passage through the canal, at
any time, of the steam tugs, barges or vessels of the complainant or
those chartered or managed by him, upon the payment or offer to pay
the prescribed rate of tolls on cargo on board ; or from charging, de-
manding or collecting any toll, tax or charge against the complainant
or his tug boats, while engaged in aiding, towing or pushing vessels
and barges through the canal; or from making any larger charge
against the complainant and his tug boats, barges and other vessels for
the transportation of freight through the canal than that charged
against any other person or company for the transportation of similar
freight through it, whether the différence in charge be made by draw-
back, rebate, or in any other manner ; or from charging, demanding or
collecting any toll from the complainant and his tug boats and from
him and his barges and vessels when returning light through the canal
after the expiration of thirty days from the time when tolls were levied
and collected on cargoes on board such barges or vessels ; or from in-
terfering or preventing the use of steam on the complainant's tug
boats in towing on or navigating the canal, or requiring him to secure
a permit to use steam or to tow on the canal, or withdrawing or re-
voking any permit, privilège or right granted by the défendant, or ex-
ercised by the complainant with respect to the use of steam and tow-
ing on the canal ; or from charging, demanding or collecting from the
complainant or his steam tugs or barges any charge for towage or tow-
ing privilège, in addition to the regular tolls charged against him or his
1000 J2.9 ITEDERAL REPORTER.
barges or vessels for the transportation of freight through the canal, or
hindering or delaying the passage through the canal of his steam tugs
arriving at the locks, with such barges as may be in tow, until such
towage charge heretofore or hereafter demanded is paid or secured, or
on any pretext whatever, if the regular tolls for the transportation of
the freight through the canal are paid or tendered by the complainant
or his agents; or from requiring the complainant to give to the de-
fendant a list of his boats ; or from controlling the canal towing. The
bill also prays for a preliminary injunction restraining the défendant
from "any further hindrance or interférence pending this cause." In
this latter prayer it is not asked that the défendant until the further or-
der of the court or during the pendency of the suit be restrained in like
manner as set forth in the prayer for a permanent injunction. It well
may be doubted whether a prayer against "any further hindrance or
interférence" is sufficiently definite or broad enough to include the
several kinds of relief specifically mentioned in the former prayer. But,
entirely aside from this considération, there are sufficient reasons why,
without the expression at this stage of the case of any opinion touch-
ing its merits, a preliminary injunction should be denied. The bill,
answer and affidavits présent grave questions of law and fact which can
satisfactorily be solved only on final hearing after plenary proofs shall
hâve been adduced. The affidavits are numerous, voluminous and con-
flicting on material points. It would be not only prématuré but improp-
er to express an opinion as to the merits on the présent showing, nor
can the court perceive any reason why the préparation of the case for
final hearing should entail much delay. It has been at issue since Oc-
tober 19, 1903. It is a gênerai, though not universal, rule, repeatedly
enforced in this district, that a preliminary injunction will not be grant-
ed on ex parte affidavits unless in a clear case. The rule admits of im-
portant exceptions. Those exceptions include, among others, cases in
which the function of the preliminary injunction is merely to maintain
the status quo until final decree, where comparatively great injury may
resuit from the withholding, and comparatively little can flow from the
granting, of such injunction. In such cases the court regards with
just discrimination the balance of convenience and hardship, and, in the
absence of a final détermination of right, aims so to résolve for the time
being whatever doubt may exist as to do the most good and the least
harm. This case does not fall within the exceptions to the rule. It
appears from the bill that some of the régulations complained of hâve
been enforced for years. With respect to thèse a preliminary injunction
would operate, not to préserve the status quo in any legitimate sensé,
but to change the method and System of the défendant, and possibly
cause confusion in the conduct of its business. Nor is there any such
exigency as to demand immédiate relief by injunction. It does not ap-
pear, nor is it alleged, that the défendant is insolvent or has not abun-
dant means with which to respond to the complainant in damages for
any wrongs in the premises it may hâve inflicted or may until final de-
cree inflict on him.
The application for a preliminary injunction must, therefore, be de-
nied ; the costs to abide the event of the cause.
M'NtrLTT V. FEINGOLD. 1001
McNULTY T. FEINGOLD et aL
(District Court, E. D. Pennsylvanla. May 16, 1904.)
No. 1.
1. Bankbttptcy— District Coubts— Jubisoiction.
Bankr. Act July 1, 1898, c. 541, § 2, 30 Stat. 545 [TI. S. Comp. St 1901,
p. 3420], conferring on the District Courts of the United States, in the
several states, jurlsdictlon at law and in equlty sufflcient to enable them
to exercise original jurlsdictlon in bankruptcy, and cause the assets of
bankrupts to be collected, reduced to money, and distributed, and to dé-
termine controversies in relation thereto, applies to the powers of recelv-
ers or the marshal to take charge of property of bankrupts in the pos-
session of third persons after the filing of the bankruptcy pétition, and
until It is dismissed or a trustée bas qualifled, when such possession is
necessary for the préservation of the estate.
2. Same— Eqtjity Jueisdiotion.
Under Bankr. Act, § 67e, as amended by Act Gong. Feb. 5, 1903, c. 487,
32 Stat. 800 [U. S. Comp. St. Supp. 1903, p. 417], provldlng that, for the
purpose of recovery of property of a bankrupt fraudulently transferred,
any court of bankruptcy, and any such court whlch would bave had
jurlsdictlon if bankruptcy had not intervened, shall bave concurrent
jurisdiction of a suit to recover the same, a trustée in bankruptcy was
entltled to maintaln a suit In equity for an accounting In the Unifed
States District Court against fraudulent transférées of certain accounts
of the bankrupt, consisting of a large number of Items, the actual value
of whlch could only be ascertalned by an accounting, though complaln-
ants knew the face value of the accounts.
Davison & Seymour, for complainants.
Furth & Singer, for respondents.
HOLLAND, District Judge. The trustée în this case allèges that on
the 5th day of October, 1903, the bankrupts transferred to the respond-
ents certain book accounts, amounting to $1,323.81. The day follow-
ing, to wit, October 6th, a pétition was filed in the District Court of the
United States for the Eastern District of Pennsylvania praying that the
said Louis Wiesen et al., copartners, trading as Wiesen Bros., and the
Penn Waist & Suit Company, be adjudged bankrupts ; and on the 27th
day of October, 1903, the adjudication in bankruptcy was made. The
bankrupts admitted in writing they were insolvent on the 5th day of
October, 1903 ; and Elias Wiesen, one of the bankrupts, testified before
the référée that he knew between the I5th and 20th days of September
that the firm of Wiesen Bros, was in faiUng circumstances. It is
further alleged that the transfer was made without considération, and
that no money was paid for the said transfer, nor were goods or mer-
chandise given in exchange therefor. The bill asserts a want of adé-
quate remedy at law, and prays that the respondents named in the bill
be compelled to render an accounting of ail sums of money collected by
them as proceeds of the accounts assigned or transferred to them by
Wiesen Bros. To this bill the respondents demur : (i) That the plain-
tiffs hâve an adéquate remedy at law ; (2) the amount of the accounts is
known to the complainants and stated in the bill ; (3) the trustée may
ascertain ail the information necessary in a suit at law to recover the
1002 129 FEDERAL EEPOKTEB.
value of the book accounts, or by an examination of the respondents
before the référée.
The parties hère hâve been adjudged bankrupts, a trustée appointed,
and suit is instituted by him against third parties for the value of prop-
erty fraudulently conveyed to them by the bankrupt. It is therefore
a controversy at lavir or in equity, within the provision of section 23
(Act July I, 1898, c. 541, 30 Stat. 552 [U. S. Comp. St. 1901, p. 3431]).
and not a proceeding in bankruptcy, wherein summary proceeding can
be had. Bardes v. Hawarden Bank, 20 Sup. Ct. 1000, 44 L,. Ed. 1175.
By section 2 of the original bankrupt act (30 Stat. 545 [U. S. Comp.
St. 1901, p. 3420]), District Courts of the United States in the several
States are invested, within their respective territorial limits, "with
such jurisdiction at lavv and in equity as will enable them to exercise
original jurisdiction in bankruptcy proceedings * * * ^q cause
the assets of bankrupts to be collected, reduced to money and dis-
tributed, and détermine controversies in relation thereto, except as here-
in otherwise provided." This applies to the powers of receivers or
the marshal to take charge of property of bankrupts in the possession
of third persons after the fîling of the pétition, and until it is dismissed
or the trustée is qualified, when that is absolutely necessary for the
préservation of the estate (Bryan v. Bernheimer, 21 Sup, Ct. 557, 45 L.
-Ed. 814), and would be a proceeding in bankruptcy, as distinguished
il om a controversy at law or in equity, within the true interprétation of
ijection 23 (In re Rochford, 124 Fed. 182, 59 C. C. A. 388, 10 Am.
Bankr. R. 608).
The transfer comes within the prohibition of section 67e of the bank-
ruptcy act, forbidding the transfer of the property within four month.s
prior to the filing of the pétition, with intent and purpose on the part of
the transfcrror to hinder, delay, and defraud creditors ; and the trustée
is authorized to recover and reclaim the same, by légal proceedings
Of otherwise, for the benefit of creditors. The subdivision of this sec-
tion was amended by act of Congress of February 5, 1903, c. 487, 32
Stat. 800 [U. S. Comp. St. Supp. 1903, p. 417], as follows:
"For tlie purpose of such recovery, any court of bankruptcy, as hereinbefore
deflned, anl any such court which would hâve had Jurisdiction if bankruptcy
had not Intervened, sball hâve concurrent jurisdiction."
This amendment empowers the complainants to bring their suit in
the District Court. The only question to be determined is whether it
should be by bill or suit at common law. We hâve hère the question
of accounting together with that of fraud involved, both of which are
subjects of equity jurisdiction. The face value of thèse accounts, of
course, is known to the complainants ; but their actual value is a différ-
ent iiiatter, and known only to the respondents, who hâve, no doubt,
colles^ted and reduced them to cash so far as this could be done, and
their actual value is entirely within their knowledge.
Unutr the circumstances, we think that this bill should be sustained,
upon tiic' authority of the Suprême Court of Pennsylvania in the case of
Bierbowt'i's Appeal, 107 Pa. 14. It is there said:
"The fait that in such case an action of assumpslt might be brought against
the prlncitul delondant to recover back such excess wlll not oust the jurlsdic-
GILSON V. MUTUAL RESERVE FUND LIFE ASS'N. 1003
tlon in equity, where the parties and circumstances are sucti that tlie remedy
alïorded in equity is more approprlate and more convenient than at law."
The case of Conyngham's Appeal, 57 Pa. 474, was a case involving
a pledge of collaterals, and, because the account between the parties in-
volved a number of items, it was held properly cognizable in equity.
The accounts hère assigned are in fraud of creditors, consisting of a
number of items, the actual value of which can only be ascertained by an
accounting, and this can be accomplished more expeditiously and con-
veniently in this proceeding.
The demurrer is overruled.
GILSON V. MUTUAL RESERVE FUND LIFE ASS'N.
(Circuit Court, W. D. Kentucky. March 29, 1904.)
1. FEDERAL COUETS— JUEISDICTION— AmOUNT IN CONTEOVEESY.
Where plaintlfC sued défendant Insurance company to recover dues and
assessments amounting to $1,527.25, togetlier with Interest, in ail amount-
ing to $2,346.50, and prayed judgment against défendant "for tlie sum of
$2,346.50, being the amount of dues and assessments paid to date, with
interest" to September 1, 1900, and for interest on the same from that
date, and for costs, the fact that the interest was added to the principal
did not change it to principal, so as to justify a removal of the cause to
the fédéral courts on the ground that the parties were citizens of différent
States, and that the amount involved exceeded $2,000, exclusive of interest
and costs.
Means & Farnsley, for plaintifï.
Pirtle, Trabue, Doolan & Cox, for défendants.
EVANS, District Judge. In 1885 the plaintiflf received a certifîcate
of membership (équivalent to a policy of life insurance) in the défend-
ant company for $5,000. He continued to pay the dues and assessments
up to some time in 1901, when, as he avers, the company increased the
amount of such dues and assessments far beyond what was stipulated
in the contract, and beyond his ability to pay, and thus forced him out
of the association. The dues and assessments thus paid by him amount-
ed to $1,527.25, and he has sued to recover that sum, with interest
thereon from the respective dates of payment, the aggregate of which
on September i, 1903, was $2,346.50. The prayer of the pétition is in
this language:
"Wherefore plaintifC prays judgment against the défendant In the sum of
$2,346.50, being the amount of dues and assessments paid to this date, with
interest on the same to September 1, 1903, and for interest on the same from
said date, for the costs herein expended, and for ail proper and équitable re-
lief."
The défendant, alleging itself to be a citizen of New York, and the
plaintifï to be a citizen of Kentucky, removed the case into this court,
If 1. Jurisdiction of circuit courts as determined by amount in controversy,
see notes to Auer v. Lombard, 19 C. C. A. 75 ; Tennent-Stribling Shoe Co. v.
Roper, 36 C. C. A. 459.
See Kemoval of Causes, vol. 42, Cent. Dig. § 130.
1004 129 FEDERAL REPORTER.
and the plaintiff has moved to remand the same to the state court. By
the judiciary act now in force, it was compétent for the défendant, upon
the ground alleged, to remove the case to this court, provided the
amount in controversy, exclusive of interest and costs, exceeded the sum
or value of $2,000. It is insisted by the defendant's counsel that while
the amount of dues and assessments paid was only $1,527.25, and there-
fore did not exceed $2,000, yet that the prayer of the pétition and the
claim made by the plaintiff hâve converted the interest up to September
I, 1903, into principal ; and he likens it to a case where there had been
a judgment for the amount of principal and interest, such latter case,
where suit was brought on the judgment, having been held to be re-
movable if the amount of the judgment was more than $2,000. While,
if there had been a judgment, the interest would be merged therein
so as thereafter to make the whole debt principal, yet the court is
clearly of opinion in the case now before it that the interest has not,
by the mère frame of the plaintiff's pétition, been transmuted into
principal. The utmost that can be said of the pétition is that it seeks
to recover compound interest, but, in the opinion of the court, it is
nevertheless interest, and nothing more, within the meaning of the
judiciary act, and consequently it does not appear that the amount
claimed in the pétition of the plaintiff, exclusive of interest and costs,
exceeds the sum of $3,000. Indeed, ail except the dues and premi-
ums is expressly claimed as interest, and expressly shown to be interest,;
and nothing else.
It results that the motion to remand the action to the state court must
be, and it is, sustained.
MEMORANDUM DECISIONS.
AMERICAN BRIDGE CO. v. PEDEN. (Circuit Court of Appeals, Seventh
Circuit. Xovember 3, 1903.) No. 985. In Error to the Circuit Court of the
United States for the Northern District of Illinois. Nathan E. Utt, for plain-
tiff in erxor. Simon Kruse, for défendant in error. No opinion. Judgment
affirmed. See 120 Fed. 523.
ASIERICAN SALES BOOK CO. et al. v. CARTEB-CRUME CO. et al.
(Circuit Court of Appeals, Second Circuit April 25, 1904.) No. 193. Appeal
from the Circuit Court of the United States for the Western District of New
ïorij. M. B. Phillipp, for appellants. Charles H. Duell, for appellees. Be-
fore WALLACE, LACOMBE, and TOWNSEND, Circuit Judges. Decree (123
Fed. 499) reversed in open court.
AMERICAN gPIRITS MFG. CO. v. EASTON et al. (Circuit Court of Ap-
peals, Seventh Circuit. October 15, 1903.) No. 1,001. Appeal from the Cir-
MEMORANDUM DECISIONS. 1005
cuit Court of the Uuiteâ States for the Northern District of IlUnols. Levy
Mayer, for appellant John S. Stevens, for appelles. No opinion. Decree
(120 Fed. 440) reversed, and cause remanded.
CAMP et al. V. PEACOCK, HUNT & WEST CO. et al. (Circuit Court of
Appeals, Fifth Circuit. January 12, 1904.) No. 1,308. Appeal from the Cir-
cuit Court of the United States for the Southern District of Florida. For
opinion below, see 128 Fed. 1005. J. N. Stripling, for appellants. C. M.
Cooper and J. C. Cooper, for appellees. Before PARDEE, McCORMICK, and
SHELBY, Circuit Judges.
PER CURIAM. A majority of the court is of the opinion that there is no
réversible error in the record. Afl5rmed.
DOWAGIAC MFG. CO. v. MINNESOTA BIOLINB PLOW CO. et al. (Cir-
cuit Court of Appeals, Eighth Circuit. May 13, 1904.) No. 2,033. Appeal
from the Circuit Court of the United States for the District of Minnesota.
Fred L. Chappell, for appellant. Ephraim Banning and Thomas A. Banning,
for appellees. Affirmed, with costs, without an opinion. For opinion below,
see 124 Fed. 736.
EMPIRE STATE-IDAHO MINING & DEVELOPING CO. V. BUNKER
HILL & SULLIVAN MINING & CONCENTRATING CO. (two cases). (Cir-
cuit Court of Appeals, NInth Circuit. May 4, 1904.) Nos. 993, 994. Appeal
from the Circuit Court of the United States for the District of Idaho, North-
ern Division. W. B. Heyburn, for appellant. Curtis H. Lindley, Henry
Eickhoiï, John R. McBride, and Myron A. Folsom, for appellee. Dismissed
pursuant to stipulation. See 106 Fed. 471, and 108 Fed. 189.
HOADLET V. CHASE. (Circuit Court of Appeals, Seventh Circuit. Oc-
tober 21, 1903.) No. 994. Appeal from the Circuit Court of the United States
for the District of Indiana. Wm. A. Ketcham and Joseph WIlby, for ap-
pellant. Addison C. Harris and D. W. Sims, for appellee. No opinion. De-
cree (126 Fed. 818) affirmed.
HORAN V. HUGHES. (Circuit Court of Appeals, Second Circuit March
2, 1904.) No. 141. Appeal from the District Court of the United States for
the Southern District of New York. LeRoy S. Gove, for appellant. Peter S.
Carter, for appellee. Before WALLACE, LACOMBE, and TOWNSEND, Cir-
cuit Judges.
PER CURIAM. Decree of District Court (129 Fed. 248) affirmed, with In-
terest and costs.
KALAMAZOO CORSET CO. v. SIMON. (Circuit Court ot Appeals, Seventh
Circuit. October 15, 1903.) No. 1,008. In Error to the Circuit Court of the
United States for the Eastern District of Wisconsin. Paul D. Durant, for
plalntiff in error. Edward P. VUas, for défendant in error. No opinion.
Judgment (129 Fed. 144) affirmed.
LEHIGH VALLEY TRACTION CO. V. HALB & KILBURN MFG. CO.
(Circuit Court of Appeals, Third Circuit May 19, 1904.) Appeal from the
1006 129 FEDERAL REPORTEB.
Circuit Court of the United States for the Eastem District of Pennsylvanla.
Geo. H. Knight, for appellant. S. O. Edmonds, for appellee. Dismissed by
consent of counsel, witliout costs. See 126 Fed. 653.
LEWIS T. ^TNA INS. CO. (Circuit Court of Appeala, Second Circuit.
Aprll 19, 1904.) No. 153. Appeal from the District Court of the United
States for the Southern District of New York. This is an appeal from a final
decree entered August 20, 1903, in favor of the libelant, for $1,337.71, belng
the amount found due upon a policy of Insurance Issued by the respoudent to
Insure the owners of the lighter Stamford. The circumstances attending the
strandlng of the lighter hâve been consldered by this court In the action
brought by this libelant against the tug Quigley and the Barber Asphalt Com-
pany. The facts wlll be found In the opinion filed by the District Court In
that case. 123 Fed. 161. The opinion In the case at bar Is reported In 123
Fed. 157. John F. Poley, for appellant. Herbert Green, for appellee. Before
LACOMBB, TOWNSEND, and COXE, Circuit Judges.
PER CURIAM. The opinion of the District Judge so clearly and satlsfac-
torily conslders and décides ail the important questions In Issue that Uttle
can be added that Is not repetltlonal. There is no controversy upon the facts,
and, as we agrée with the conclusions of law found by the District Judge, we
conclude to affirm the decree upon hls opinion, wlth Interest and costs.
In re MILES et al. (Circuit Court of Appeals, Eighth Circuit. May 8,
1904.) No. 30. F. L. Hamer, for petltloners. On pétition for review. Dis-
missed, with costs, for want of prosecution.
THE NEW ENGLAND. (Circuit Court of Appeals, First Circuit. Aprll 14,
1904.) No. 488. Appeal from the District Court of the United States for the
District of Massachusetts. Thomas J. Gargan, Patrick M. Keatlng, and Sewall
C. Brackett, for appellant. Walter C. Cogswell, for appellee. Before COLT
and PUTNAM, Circuit Judges, and ALDRICH, District Judge.
PER CURÏAM. Appeal dismissed, for failure of the appellant to cause the
record to be printed, as provided by ruie 23 (90 Fed. Ivil, 31 C. C. A. Ivii), with
costs for the appellee. See 110 Fed. 415.
In re NBWMAN. (Circuit Court of Appeals, First Circuit Aprll 26, 1904.)
No. 518. Adouiram J. Cushing, for petitloner. Henry 0. Cram, for respoudents.
Before COLT and PUTNAM, Circuit Judges.
PER CURIAM. Pétition dismissed, without costs to either party.
NORWICH & N. Y. TRANSP. CO. v. INSURANCE CO. OF NORTH AMER-
ICA. SAME V. SBCURITY INS. CO. OF NEW HAVBN. SAME v. PIRE-
MAN'S FUND INS. CO. OF SAN FRANCISCO. SAME v. CHUBB et al.
(Circuit Court of Appeals, Second Circuit. Aprll 14, 1904.) Nos. 134^137.
Appeals from the District Court of the United States for the Southern Dis-
trict of New York. Thèse causes come hère upon appeals from decrees award-
ing certain proportions of losses of particular and gênerai average underpoU-
cies of marine Insurance upon libelant's steamer City of Worcester, whlch
struck on Cormorant Rock, outside New London Harbor, tearing out a part of
her forward bottom, and was subsequently stranded by her master near
Greeu's Harbor, not far from New London, The opinion of the District Court
UEMORANDUM DECISIONS. 1007
Is reported In 118 Fed. 307. Lawrence Kneeland, for appelîants. Wllhelmus
Mynderse, for appellees. Before WALLACB, LACOMBE, and COXB, Circuit
Judges.
PBR CURIAM. Tlie opinion of the District Judge most thoroughly and
carefully discusses the facts and tlie single question of law which arises
thereon, and, since we fully concur In hls flndlngs, reasonlng and conclusion,
it seems unnecessary to write any further opinion. The deciees are afQrmed,
wltli interest and costa.
PHILLIPS et al. v. HBAD. (Circuit Court of Appeals. Elghth Circuit
April 2, 1904.) No. 2,037. In Error to the Circuit Court of the United States
for the Western District of Arkansas. W. H. Arnold, Thomas C. McRae, and
W. V. Tompkins, for plalntiffs in error. Oscar D. Scott and James D. Head,
for défendant in error. Dismissed, with costs, pursuant to the stipulation of
the parties. See 114 Fed. 489.
TAYLOR et al. v. SOUTHERN PAC. CO. et al. (Circuit Court of Appeals,
Sixth Circuit. October 6, 1903.) No. 1,216. Appeal from the Circuit Court of
the United States for the Western District of Kentucky. J. B. Foraker, Ed-
ward Lauterbach, Eugène Treadwell, and Augustus E. Willson, for appelîants.
Humphrey, Burnett & Humphrey, Lawrence Maxwell, Jr., and Maxwell Evarta,
for appellees. Dismissed by agreement. See 122 Fed. 147.
THOMAS, Collector, y. HEMPSTEAD. (Circuit Court of Appeals, Third
Circuit. March 8, 1904.) No. 13. Appeal from the Circuit Court of the
United States for the Eastern District of Pennsylvania.
PER CURIAM. This cause came on to be heard on the transcript of record
from the Circuit Court of the United States for the Eastern District of
Pennsylvania. On motion of counsel for appellant, it Is now hère ordered,
adjudged, and decreed by this court that the appeal from the sald Circuit
Court in this cause be, and the same Is hereby, dismissed. See 122 Fed. 752.
TONOPAH & S. li. MIN. CO. T. TONOPAH MIN. CO. OF NEVADA. (Cir-
cuit Court of Appeals, Ninth Circuit. May 16, 1904.) Nos. 1,075-1077. Appeal
from the Circuit Court of the United States for the District of Nevada. Ket
Pittman & Dickson and Ellis & Bllis, for appellant. J. C. Campbell, K. M. Jack-
son, W. H. Metson, and Campbell, Metson & Campbell, for appellee. Motion
to dismiss argued by J. C. Campbell, counsel for the appellee, no one appearing
for the appellant, and submitted. Motion granted, and appeal dismissed, with
costs. See 125 Fed. 389. 400, 408.
ËSD or Cases nr YoL-lSSi
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