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Full text of "N.J. Stone, plaintiff and respondent, vs. H.H. Bancroft, defendant and appellant ... E.J. McCutchen, attorney for appellant; Reddy, Campbell & Metson, attorneys for respondent"

BANCROFT 
LIBRARY 

o 

THE LIBRARY 

OF 

THE UNIVERSITY 
OF CALIFORNIA 



San Francisco. No. 



IN THR 





Court 



OF THE 

STATE OF CALIFORNIA 



N. J. STONE, 

Plaint 'iff and Respondent 



vs. 



H. H. BANCROFT, 

Defendant and Appellant 



TRANSCRIPT ON APPEAL 



E. J. McCUTCHEN, 

Attorney for Appellant 



Filed this day of May, 1895 

T. H. WARD, Clerk 
By Deputy Clerk 



"lamtiff and Respondent, v. H. H. BANCROFT 
fendant and Appellant. 

? Cai frnm thC Snperior Court of Contra Costa County John H 



CT & 

For Respondent Reddy, Campbell & Mets^n. 

This action is brought to recover upon a written contract for se^ 
| salary, at the rate of $350 per month, commencing Septem j 
The plaintiff obtained a verdict and judgment for the f ' 
claimed, and the defendant appeals from the judgment a 
bis motion for a new trial. This court in departme 
^ such judgment and order (24 Cal. Dee 696) a i 

eZl *'M *"***' ^ ^^ ^ n which this ac * is co 
enced is the same one involved in a former action brought bv tk 
plaintiff against this defendant for salary for a former period of sV 
i vice, in which plaintiff recovered judgLnt, which iuTmenf w- 
, affirmed by this court. (Stone v. Bancroft, 112 Cal. 652.) We a s 
.convinced, upon a more thorough examination of the record that i 
jthis > court^dhemuo the views expressed in its decision in [he forme 

affirmed. The only difference 
former case there were some 
contract during a small por- 
rtiile there was no work at all 
in this action. That differ- 
rule doAvn in the former case 
fat portion of this time plain- 
ps ready and willing to work 
1 no work was offered, and he 
ict^was in full force, and his 
Upon this branch of the 
ressed in the commissioner's 
inry were warranted in their i 
mtial breach of the contract' 
an requested by appellant, to, 
r engaged in, directly or in- 1 
g business, the verdict must! 

^ 1S als ^ erv clear that 

! Civil Code, noted in the Smm^^^^^ secti on 1980 6f the 

maintained on the contract bv ^^^P^L actlon ca i 'be) 

after the expiration of two 

commenced. It was not 

asva defense, but we are 

case at bar. The statute te^tTn 

may not recover on the contract for 

expiration of two yeans. The lanS 

cannot be enforced against -t!>e emvl 
was manifestly for his protection n 

eaves him at liberty to proceed Tndir 
last sentence of the section 
tion, that for all services rej 
the employee must brino- his 
serted in the statute for^the prote( 
employee, disregarding the contract 
able value of his sr ' 

employer may avail 
sation, as presumably 




* * 



the 

t0 plead this tatute 
ls - not a PPH<*ble to the 
that the 

afte 
GXplieit that ^ 

tW years ' and ^ 
Was en acted. It 

-^ S eleets ' 
reh ? 8 in his 
eXpl / atl n of two 
Ma *<?" ^^, was in- 
^.employer, so that if the 

hlS action for ie reason 

? ^ ^ ht to " 
C Dtraet as to 

- 

, ,'" eaWe against 




deceased. The r^ST estate ^ 
ministration, and the payment c 
in equal proportions. This, thei . 
a voluntary defective conveyance t\ 
to correct and reform the conveyariv 
is unprovided for by deceased. If thr 
chaser for a valuable consideration, if \ 
against the heirs and reformed so. as to j^ 
tended to be conveyed. But the legal title ! 



a decree 
is now <j 


(jU cttKuiV >fuly, o. j.,' j-.^i 6 an, J. 
Cornprring opinion by Angellotti, J. 1 


i 
Mh 


deceased 


diss nt: MfFarland, L^ _ 


rts ( 


S F 23lk^Rese /^/1Q $y the 


cases wh 


Court R2EEW*>*i-S-S r- 


)iTectrv 


executioi 


S F 2398 Stone v Bancroft. Ine 


arty seV 


must sta 
whom he 
the cour 


judgment heretofore entered herein is 
vacated, and cause ordered submitted 
to the Court in bane, pursuant to 
Subd. 2 of Rule XXVIII. Beatty, C. 


aat of thV 
he law musV 
he equities oK 


are, at 1$ 
and nati 


J. Angellotti J., Shaw J. 
S F 2873-2874 Estate of ( Wicker- 


b is the dictate\ x 
wife dying withe. 



should go in part to her surviving husband. This was certam\ 
view of the legislature in enacting our statute of distributions^ 
in such case it makes the husband the owner of one-half the pro 
erty. If this be so, then equity would say to appellant that she should 
allow the respondent his one-half the property. A court of equity in 
terferes to correct a mistake in a written instrument only in further 
ance of justice, and to prevent fraud or some injustice. In this case, 
by refusing to correct the deed, no fraud nor injustice is done to ap 
pellant. She has lost nothing, because she paid no consideration for 
the deed. She has been deprived of nothing the law would otherwise 
give her. It is true the intention of the grantor is not carried out, but 
it would have been equally true if an attempt had been made to make 
a will and it had been defective in a vital part. The court could 
not reform a will nor make it so that it would comply with the law. 
In this case the deceased intended to convey the property, but she did 
not do so. That intention will not now be carried cut in favor of one 
who paid nothing for the conveyance, and against a lawful heir. 

The above principles are supported by an unbroken line of author 
ities. It was long ago said in Dawson v. Dawson, 1 Dev. Eq. 101 : "The 
old beaten ground, long since occupied by the courts of equity, not to 
aid voluntary conveyances, seems to render any reasons that might be 
urged, to show that the bill should be dismissed, both trite and un 
necessary. ' ' 

It is said in Story on Equity Jurisprudence, Vol. 1, Sec. 177: "For 
the same reason equity will not supply a surrender or aid the defective 
execution of a power to the disinheritance of the heir at law. ' ' 

The following cases directly support what has been said : Henderson 
et al. v. Dickey et al., 35 Missouri 120 ; Hout v. Hout et al., 20 Ohio 
119 ; Powell et al. v. Powell, 27 Geo. 38 ; Powell v. Morisey, 98 N. Car 
olina 426; Shears v. Westover, 110 Mich. 505; Else v. Kennedy, 57 



^H 

ulock, 31 N. 

pHef, do not attempt to meet 

. rely upon Section 3399 of the 

/hat the construction or decision 

abject, because our Code has clearly 

, rule is changed by the legislature it 

and fully and completely governs and 

bar." 

.-' ^vides that in ease where by reason of a mu- 

jontract does not truly express the intention 

Sfrbe revised on the application of the party ag- 

*t the word "may" means must, it does not follow 
V ; Vt must be revised, except upon the application of the 
.-?>i' and in accordance with the rules of equity. The 
<id in the sense of the statute means one whose pecuniary 
Affected by the mistake. It would include one who paid 
.rand, which, by mistake, was omitted from the deed. It does 
Ade appellant, who is not aggrieved, except in the sense that 
^AY grieve that she did not get the property. In that sense the 
js^ondent might be said to be aggrieved because the property was not 
^ydveyed to him. But the section was never intended to overthrow 
vvell settled principles upon which equity has been administered under 
the common law. The section certainly does not contain all the law 
with respect to the correction of mistakes in courts of equity. It is 
only where it clearly appears that a long established principle is in 
tended to be overthrown that the court will give such effect to a statute. 
Mills, Estate of, v. Mills et al., filed September 15, 1902, 24 Cal. Dec. 
293. 

It follows that the judgment should be affirmed. 

COOPER, C. 
"We concur: 

HAYNES, C. 
GRAY, C. 

For the reasons given in the foregoing opinion the judgment is 
affirmed. 

VAN DYKE, J. 
HARRISON, J. 
GAROUTTE, J. 



S. F. No. 2398 Department One. December 18, 1902. 

N. J. STONE, Plaintiff and Respondent, v. H. H. BANCROFT, De 
fendant and Appellant. 

CONTRACTS PERSONAL SERVICES PREVENTION OF COMPLETION BY EMPLOYER 
EEMEDY SECTION 1980, C. C." Where a contract for personal services for 
a definite term of years at a monthly salary is made, and there is nothing to show 
that the employer discharged the employee, although the latter was prevented from 
doing the work contracted for during the period in question, by the employer, the 
remedy of the employee is to sue for the compensation agreed upon, not for dam- 



30UBuipj '688 'ON [fig <os [v 
, ( -anuoAt: - 



3in 



uod 



p 



siajduioo oj 



J UOISU3}X3 



UIOJJ S 



1m- 
fchat 



. 



CALIFORNIA DECISIONS. 697 

ages for breach of contract. The fact that the employee for a portion of the 
time he was prevented from working under the contract engaged in other work 
is not a breach of the contract on his part. Where such a contract provides for 
employment for ten years at a certain amount per month, the monthly salary is due 
at the end of each month, and payment is not postponed to the end of the ten 
year period. Section 1980 of the Civil Code is no defense to an action on such a 
contract. 

Appeal from the Superior Court of Contra Costa County John Hunt, 
Judge. ! t 

For Appellant Edward J. McCutchen; Page, McCutchen & Eells, 
Page, McCutchen, Harding & Knight of Counsel. 

For Respondent Reddy, Campbell & Metson. 

This action was brought to recover a salary of $350 per month for 
seven months from September 1, 1893, to April 1, 1894, amounting in 
the aggregate to $2450. The plaintiff obtained a verdict and judgment 
for the full amount claimed. The defendant appeals from the judgment 
and from an order denying him a new trial. 

The action is based on a written agreement made between the parties- 
to the suit on August 20, 1886, in which plaintiff, Stone, agreed to de 
vote ten years, beginning with that date, to the publication 
and sale of the historical works of defendant Bancroft at a monthly 
salary of $350, and defendant agreed to employ him on those terms. 
Suit was maintained for a former period of service under this same con 
tract and the judgment in plaintiff's favor affirmed in Stone v. Ban 
croft, 112 Cal. 652. Reference is here had to that case for a fuller state 
ment of the contract here in suit. It is settled by that case that the 
contract is one for personal services and not a partnership agreement. 

1. It is contended by appellant that in this suit the plaintiff has mis 
taken his remedy, that the defendant discharged plaintiff from his ser 
vice and that, consequently, if plaintiff has any cause of action at all, it 
is one for breach of the contract and not one for services under the con 
tract. But appellant fails to call our attention to any declaration or 
other act of defendant which amounted to an unequivocal discharge of 
the plaintiff from further employment. To be sure it appears that 
plaintiff was prevented from working at all during the period covered 
by the present suit, by the defendant, but it is one thing to prevent a 
party from laboring and quite a different thing to discharge him from 
all further employment. 

In the former instance the contract need not be treated as broken, 
but the party, though he has performed no labor under it, may sue on 
the contract and recover the agreed compensation. In the latter in 
stance there is an unequivocal breach of the contract to employ for a 
specified time by the employer, and the suit should be as for a breach 
of the agreement to employ. All of which is clearly laid down and il 
lustrated in Stone v. Bancroft, supra. The same principle is stated in 
Dingley v. Oler, 117 U. S. 490. The plaintiff testified that he was not 
discharged and stated what was said and done to prevent him from 
working, and on his evidence the jury based their verdict in his favor, 
and thus it was impliedly found that he was not discharged, and we 
think the evidence warranted the finding. If the defendant desired ta 
discharge the plaintiff he should have told him that he was discharged. 



698 



CALIFORNIA DECISIONS. 



Instead of doing this he seems to have adopted a course by which if he 
was sued for a breach of the contract he might plausibly say, ' ' You have 
mistaken your remedy. I did not discharge you"; and if on the other 
hand the suit should be on the contract he might say, "You should have 
sued as for a breach of the contract for I discharged you and thus 
broke my agreement." Where it is admitted that the plaintiff is en 
titled to recover in some form of action this court will not be overnice in 
its distinctions as to what form should be pursued. On the circum 
stances presented we decline to interfere with the judgment on any 
theory of mistake as to remedy. The law touching this point is clearly 
laid down in the former case of Stone v. Bancroft, supra, and need not 
be again repeated. The evidence showing that there was no discharge 
is fully as strong here as it was in that case and there it was conceded 
by appellant that there was no discharge, but it was contended that 
Stone had withdrawn from the contract and abandoned the employment. 
2. The evidence tended to show that plaintiff, during a small portion 
of the period covered by the suit, assisted another in the publication 
and sale of a medical book entitled ' ' Femina, ' ' and it is contended that 
this was a violation of plaintiff's contract "to devote his whole time" 
to the historical works of Bancroft, It appears that Stone was at all 
times ready and willing to fully perform his contract with Bancroft but 
was prevented from so doing. He was left then either to remain idle or 
work at something else. This work did not "interfere with his efforts 
on behalf of the said History Company. ' ' Bancroft was in no way in 
jured by Stone working at something else when he was not permitted 
to work under the contract, and cannot be heard to complain thereat. 
What plaintiff did in connection with the "Femina" publication did 
not, therefore, constitute a substantial breach of his contract with appel 
lant, and the jury were warranted in their conclusion to that effect. 
Herman v. Little-field, 109 Cal. 430. ) This same question, on practically 
the same evidence, was passed on adversely to appellant's contention in 
the former case of Stone v. Bancroft, supra. 

3. Appellant's next contention is that by the terms of the contract 
plaintiff could recover nothing until the expiration of the ten years ' ser 
vice contemplated by said contract. There is no merit in this conten 
tion. This was a contract of hiring for the period of ten years with com 
pensation fixed at $350 per month and that amount was due and owing 
at the conclusion of each month's service. There is nothing in the con 
tract to indicate an intention as to the times of payment, otherwise than 
as above stated. 

4. Appellant's last contention is based on section 1980 of the Civil 
Code, which provides as follows: "A contract to render personal ser 
vice, other than a contract of apprenticeship, as provided in the chapter 
on Master and Servant, cannot be enforced as against the employee be 
yond the term of two years from the commencement of service under it 
but if the employee voluntarily continues his service under it beyond 
that time, the contract may be referred to as affording a presumptive 
measure of the compensation." 

There is nothing in this contention because (1) the statute was not 




that 



CALIFORNIA DECISIONS. 699 

pleaded; (2) it would not have been a bar or defense to this action 
if it had been pleaded. 

The judgment and order should be affirmed. 

GRAY, C. 
(We concur: 

HAYNES, C. 
COOPER, C. 

For the reasons given in the foregoing opinion the judgment and or- 
der are affirmed. 

GAROUTTE, J. 
HARRISON, J. 
VAN DYKE, J. 



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INDEX 



Page. Folio. 

Answer 11 25 

Assignment of Errors 238 707 

Certificate to Judgment Roll 16 42 

Complaint 1 1 

Certificate of Judge to Statement 258 767 

Defendant's Request to Charge the Jury 231 686 

Demurrer to Complaint 8 17 

Instructions to the Jury 215 638 

Judgment on Verdict 15 38 

Notice of Appeal 259 770 

Notice of Intention to Move for New Trial 17 44 

Order Denying Motion for New Trial 258 768 

Order Overruling Demurrer to Complaint 10 24 

Special Issue Requested by Defendant to be Submitted to 

the Jury 214 636 

Specification of Particulars in which Verdict is Against Law 241 717 

Specification of Errors in Law Occurring at the Trial 242 718 

Statement on Motion for New Trial 18 47 

Stipulation 260 773 

Testimony 

Bancroft, H. H., direct 163 482 

" " cross 177 523 

re-direct 201 597 

Boyns, W. C., rebuttal 205 608 

" " cross 206 611 

Crawford, Daniel, direct 87 254 

" " cross 88 256 

Edwards, George, direct 147 435 

cross 148 438 

Elliott, 0. H., direct 139 410 

" " cross 142 419 

Hambly, H. B., direct 85 249 

Hambly, Nyna, direct 92 269 

" " cross 93 273 

Hartwell, W. H., direct 103 301 

cross... . 106 312 




INDEX. 

Page. Folio. 

Hayes, Eleanor, direct 97 284 

" " cross 99 291 

Miller, Dr. J., direct 126 371 

" " cross 132 388 

" " re-direot 139 409 

Monk, H. M., direct 142 420 

" " cross 144 425 

Moore, S. B., rebuttal 206 612 

" " cross 207 615 

Morrison, George H, direct 150 444 

" " cross 154 456 

re-direct 161 477 

" " re-cross 162 479 

" " recalled 202 599 

Sessions, D. R., direct 83 242 

" " cross 85 247 

Staib, F. C., direct 100 294 

" cross 102 398 

Stone, N. J., direct 18 48 

" " cross 43 123 

" " re-direct 71 205 

" " re-cross 81 237 

recalled 123 363 

" " rebuttal 209 621 

" " cross 213 632 

Trigo, Jose M., direct 109 319 

cross 120 354 

" " re-direct.. . 123 361 



IN THE 




STATE OF CALIFORNIA 



Transcript on Appeal. 

In the Superior Court of the City and County 
of San Francisco, State of California. 



2 N. J. STONE, 



Plaintiff. 

vs. 



H. H. BANCROFT, 

Defendant. 



COMPLAINT. 

N. J. Stone, the plaintiff herein, complains of 
H. H. Bancroft, the defendant herein, and for 
cause of action alleges: 



INDEX. 



Page. Folio. 

Hayes, Eleanor, direct 97 284 

" " cross 99 291 

Miller, Dr. J., direct 126 371 

" " cross 132 388 

" " re-direct 139 409 

Monk, H. M., direct 142 420 

" " cross 144 425 

Moore, S. B., rebuttal 206 612 

" " cross 207 615 

Morrison, George H, direct 150 444 

cross 154 456 

" " re-direct 161 477 

re-cross 162 479 

recalled 202 599 

Sessions, D. R., direct 83 242 

" " cross 85 247 

Staib, F. C., direct 100 294 

" cross 102 398 

Stone, N. J., direct 18 48 

' ' cross 43 1 23 

" " re-direct 71 205 

" " re-cross 81 237 

" " recalled 123 363 

" " rebuttal 209 621 

cross 213 632 

Trigo, Jose M., direct 109 319 

" cross 120 354 

" " re-direct.. . 123 361 



IN THE 

SUPREME COURT 



1 

OF THE 



STATE OF CALIFORNIA 



Transcript on Appeal. 

In the Superior Court of the City and County 
of San Francisco, State of California. 



2 N. J. STONE, 

Plaintiff. 

vs. 

H. H. BANCROFT, 

Defendant. 



COMPLAINT. 

N. J. Stone, the plaintiff herein, complains of 
H. H. Bancroft, the defendant herein, and for 
cause of action alleges: 



4 I. 

That heretofore, to wit : on the 20th day of 
August, A. D., 1886, plaintiff and defendant made 
and entered into the following agreement : 

" This agreement, made in San Francisco, Cali- 

ry / / 

fornia, by H. H. Bancroft and N. J. Stone, wit- 
nesseth: That in consideration of the valuable 
services done by the said Stone, in conducting 
the publication and sale of the historical works of 

f- the said Bancroft, the business formerly being 
conducted as the Bancroft's Works Department 
of A. L. Bancroft & Co., but now being done and 
shortly to be incorporated under the laws of Cali 
fornia, as the History Company, the said Ban 
croft hereby sells and assigns to the said Stone a 
one-tenth interest in the said History Company, 
plates, paper, stock, money, outstanding accounts, 
or other property of said company, upon the fol 
lowing conditions : 

6 " The said N. J. Stone is to devote his whole 
time and best energies, so far as his health and 
strength shall permit, for a period of not less than 
ten years from the date o f this agreement, to the 
publication and sale of the historical works of 
H. H. Bancroft, and of such other works, and 
conduct such other business as may be from time 
to time taken up and entered into by said History 
Company ; and the said Stone agrees not to enter 



5 

into or engage in, directly or indirectly, any other 
mercantile or manufacturing business, or to any 
other business or occupation which shall in any 
wise absorb his mind and strength, or interfere 
with his interest or efforts on behalf of the said 
History Company during the said term of ten 
years. 

'' Upon the incorporation of the History Com 
pany one-tenth of the whole number of shares 
shall be issued and delivered to the said N. J. 

o 

Stone; but should the said Stone fail in any wise 
to carry out this agreement, or any part thereof, 
in its full letter and spirit, then the said one-tenth 
interest in the said History Company shall be 
forfeited and revert to the said H. H. Bancroft ; 
provided, and it is distinctly understood and 
agreed, that in case of the death of the said N. J. 
Stone before the expiration of five years from the 
date of this agreement, the said Stone having 
9 fulfilled all the conditions of this agreement up to 
that time, then one-half of the said one-tenth in 
terest of the said Stone in the History Company 
shall go to his heirs, and be their property uncon- 
ditionallv ; and in the event of the death of the 
said Stone at any time after the expiration of five 
years from the date of this agreement, the terms 
hereof having been fully complied with, then the 
whole of the said one-tenth interest shall belong 
to his heirs unconditionally. 



io "The salary of the said Stone shall be $350 a 
month. The copyright of the said historical 
works belongs exclusively to the said Bancroft, 
and shall be fifty cents a volume for the History 
and Diaz, and twenty cents on the little history 
of Mexico. 

" Signed in San Francisco, the twentieth day 
of August, 1886. 

-Witness: H. H. BANCROFT. 

" W. H. HURTWELL. N. J. STONE." 



ii 



II. 



The plaintiff has honestly and faithfully per 
formed all of the terms and conditions of said 
contract, on his part'to be kept and performed. 



III. 

12 

That the defendant has failed and neglected to 
perform the terms and conditions upon his part to 
be performed, and has failed, neglected and re 
fused to pay or cause to be paid to plaintiff, the 
salary mentioned in said contract at the rate of 
three hundred and fifty dollars per month, since 
the first day of July, A. D., 1892, and still fails 
and refuses so to do. 



7 

13 IV. 

That there remains unpaid to plaintiff, under 
the terms of said contract, the sum of four thou 
sand nine hundred dollars, for fourteen months at 
the rate of three hundred and fifty dollars per 
month. 

Wherefore, plaintiff demands judgment for the 
sum of four thousand nine hundred ($4,900) dol 
lars and for costs of suit. 

14 KEDDY, CAMPBELL & METSON, 

Attorneys for Plaintiff. 



STATE OP CALIFORNIA, 
City and County of San Francisco 



> ss. 



15 N. J. Stone, being duly sworn, deposes and 
says: That he is plaintiff in the above-entitled 
action; that he has read the above and forego 
ing complaint, and knows the contents thereof; 
that the same is true of his own knowledge, ex 
cept as to the matters which are therein stated on 
his information or belief, and as to those matters 
that he believes it to be true. 

N. J. STONE. 



8 

1 6 Subscribed and sworn to before me this 12th 
day of September, 1893. 

[SEAL] CHAS. T. STANLEY, 

Notary Public. 

[Endorsed:] Filed September 12, 1893. 

M. C. HALEY, Clerk. 
By WM. H. LYMAN, Deputy Clerk. 

Filed Nov. 4, 1893. 

17 A. A. BAILEY, Clerk, 



DEMURRER TO COMPLAINT. 

[Title of Court and Cause.] 

Now comes the defendant, and demurs to the 
plaintiff's complaint on file herein, upon the fol 
lowing grounds to wit: 

First That said complaint does not state facts 
1 8 sufficient to constitute a cause of action. 

Second That said complaint is ambiguous in 
this: 

(a) That it does not appear therefrom whether 
the corporation referred to in the agreement set 
forth in said complaint was ever formed or or 
ganized. 

O 

(6) That it does not appear therefrom what 
services, if any, were performed by the plaintiff. 



J 9 ^(c) That it does not appear whether the ser 
vices, if any, performed by the plaintiff, were per 
formed for the defendant, or for said corporation, 
the History Company. 

Third That said complaint is uncertain in this : 
(a) That it does not appear therefrom whether 
the corporation referred to in the agreement set 
forth in said complaint was ever formed or organ 
ized. 

20 (b) That it does not appear therefrom what 
services, if any, were performed by the plaintiff 

(c) That it does not appear whether the ser 
vices, if any, performed by the plaintiff, were per 
formed for the defendant, or for said corporation, 
the History Company. 

Fourth That said complaint is unintelligible in 
this : 

(a) That it does not appear therefrom whether 

21 the corporation referred to in the agreement set 
forth in said complaint was ever formed or or 
ganized. 

(6) That it does not appear therefrom what 
services, if any, were performed by the plaintiff. 

(c) That it does not appear whether the ser 
vices, if any, performed, by the plaintiff, were 
performed for the defendant, or for said corpora 
tion, the History Company. 



IO 

22 Wherefore, this defendant prays to go hence 
dismissed with his costs. 

E. J. MoCUTCHEN, 

Attorney for Defendant. 

[Endorsed :] Service of a copy of the within de 
murrer to complaint is hereby admitted this 10th 
day of Oct., 1893. 

REDDY, CAMPBELL & METSON, 

23 Attorneys for Plaintiff. 

Filed October 10, 1893. 

M. C. HALEY, Clerk. 
By J. W. SULLIVAN, Deputy Clerk. 
Filed Nov. 4, 1893. 

A. A. BAILEY, Clerk. 



ORDER OVERRULING DEMURRER. 

[Title of Coutr and Cause.] 

Monday, December 18th, A. D., 1894. Pres 
ent, Hon. Joseph P. Jones, Judge. 

The briefs heretofore ordered having been fur 
nished, it is ordered that the demurrer be sub 
mitted; to the Court for decision; and the Court 
having sufficiently considered the same, it is 
ordered that the said demurrer be and the same is 



II 



25 hereby overruled with ten days, allowed to defen 
dant in which to answer. 



ANSWER. 

[Title of Court and Cause.] 

The above-named defendant, answering unto 
plaintiff's complaint on file herein : 
x- Denies, that plaintiff has honestly and faith 
fully, or honestly or faithfully, or otherwise, per 
formed all or any of the terms and conditions of 
said contract set forth in plaintiff's complaint, on 
his, plaintiff's, part to be performed. 

Denies, that he, defendant, has failed and neg 
lected, or failed or neglected, to perform the 
terms and conditions of the contract mentioned in 
plaintiff's complaint, upon his, defendant's, part to 
be performed ; but avers, that he has duly per- 
27 formed all the conditions on his part to be per 
formed in and by the terms and stipulations of 
said contract. 

Defendant admits that he has not paid or 
caused to be paid to plaintiff the salary mentioned 
in said contract at the rate of $350 per month 
since the 1st day of July, 1892 ; but avers, that 
he is under no obligation to pay said salary or 
any part thereof, and that plaintiff has not, at any 



12 

2S time since the date of said agreement set forth in 
plaintiff's complaint, been in the service or em 
ployment of defendant, under the terms of said 
agreement, or otherwise, or at all. 

Denies, that there remains due or unpaid to 
plaintiff, under the terms and conditions or the 
terms or conditions of said contract mentioned in 
plaintiff's complaint, the further sum of $4,900, 
or any sum, for fourteen or any number of months, 
at the rate of $350, or any sum, per month, or 

2Q 

that there remains due or unpaid to plaintiff any 
sum whatever. 

And as a further and separate answer to plain 
tiff's complaint on file herein, 

Defendant avers that on the twenty-third day 
of September, 1886, the History Company, men 
tioned in the agreement set forth in plaintiff's 
complaint, was duly incorporated under and by 
virtue of the laws of the State of California under 
30 the name of the History Company, and that ever 
since said date the said History Company has 
been and still is a corporation duly organized and 
existing under and by virtue of the laws of the 
State of California, and having its principal place 
of business in the City and County of San Fran 
cisco, State of California. 

That immediately upon the incorporation of 
said History Company defendant transferred to it, 



13 

31 the said corporation, the properties mentioned in 
said agreement set forth in plaintiff's complaint, 
and thereupon, both plaintiff and defendant be 
came, ever since have been, and now are, stock 
holders of and in said corporation, and after said 
formation the said corporation carried on and 
conducted the business mentioned in said agree 
ment, and defendant has had nothing to do with 
said business since that time, except as an officer 
of said corporation. That from the date of the 

T,2 

incorporation of said History Company until on 
or about the said 1st day of July, 1892, plaintiff 
acted in the capacity of General Manager thereof, 
but plaintiff has not at any time since the forma 
tion of said corporation, or at any other time 
since the date of said agreement, performed for or 
rendered to defendant any service whatever. 

And further answering, defendant avers, upon 
his information and belief, that ever since on or 
-i- about the 1st day of July, 1892, said plaintiff has 
been engaged in carrying on and conducting, for 
himself and other persons, and in opposition to 
said History Company, a business of the same 
kind and character as that carried on and con 
ducted by said History Company. 

Wherefore, defendant having fully answered 
prays to be hence dismissed with his costs. 

E. J. McCUTCHEN, 
Attorney for Defendant. 



14 

34 STATE OF CALIFORNIA, ) 

County of San Diego. ) SS * 

H. H. Bancroft, being duly sworn, deposes and 
says : That he is the defendant in the above en 
titled action; that he has read the above and 
foregoing answer, and knows the contents 
thereof; that the same is true of his own knowl 
edge, except as to the matters which are therein 
stated on his information or belief, and as to 

35 those matters that he believes it to be true. 

H. H. BANCROFT. 



Subscribed and sworn to before me this 9th 
day of January, A. D., 1894. 

[SEAL.] W. D. WOODWINE, 

Notary Public. 

[Endorsed :] Service of a copy of the within 
answer is hereby admitted this llth day of Jan 
uary, 1894. 

REDDY, CAMPBELL & METSON, 

Attorneys for Plaintiff. 

Filed January 12th, 1894. 

A. A. BAILEY, Clerk. 
By W. DK MARTINI, Deputy Clerk. 



37 VERDICT. 

(Title of Court and Cause.) 

We, the jury, find for the plaintiff in the sum 
of $4,900, with interest at (7) seven per cent per 
annum. JOHN W. BOYD, Foreman. 

March 23rd, 1894. 

[Endorsed:] Filed March 23, 1894. 

A. A. BAILEY, Clerk. 



38 

JUDGMENT ON VERDICT. 

[Title of Court and Cause.] 

April 23d, 1894. 

Present, Hon. Jos. P. Jones, Judge. 

This action came on regularly for trial. The 
parties appeared by their respective attorneys, 
Patrick Reddy and J. P. Abbott, Esqs., for 
plaintiff, and E. J. McCutchen and W. S. Wells, 

Esqs., for defendant. A jury of twelve persons 
o >^ 

was regularly impaneled and sworn to try the 

cause. Witnesses on the part of plaintiff and de 
fendant were sworn and examined. After hear 
ing the evidence, the arguments of counsel, and 
the instructions of the Court, the jury retired to 
deliberate upon a verdict, and subsequently re 
turned into Court, were called and all answered 
to their names and presented the following ver 
dict, to wit: 



i6 

40 We, the jury, find for the plaintiff in the sum 
of $4,900, with interest at (7) seven per cent per 
annum. JOHN W. BOYD, Foreman. 

March, 23d, 1894. 

Wherefore, by virtue of the law, and by reason 
of the premises aforesaid, it is ordered, adjudged 
and decreed that said N. J. Stone, plaintiff, 
do have and recover from the said H. H. Ban 
croft, defendant, the sum of forty nine hundred 
dollars, with interest thereon with interest thereon 

4 1 amounting to the sum of three hundred and sev 
enty-eight dollars, together with costs and dis 
bursements incurred in this action, amounting: 

' ^2 

to the sum of two hundred and seven dollars. 

Judgment entered this 24th day of March, 
A. D., 1894. 

A. A. BAILEY, Clerk. 
By W. DE MARTINI, Deputy Clerk. 

? CERTIFICATE TO JUDGMENT ROLL. 

4"* 

[Title of Court and Cause] 

I, the undersigned, County Clerk of said 
County, and ex-officio Clerk of the Superior Court 
therein, do hereby certify the foregoing to be a 
true copy of the judgment rendered in the above- 
entitled action, and entered in vol. 5, Judgment 
Book of said Court, at page 178. And I further 
certify that the foregoing papers hereto annexed 
constitute the Judgment Roll in said action. 



43 Witness my hand and the seal of our Superior 
Court affixed this 24th day of March, 1895. 
[SEAL] A. A. BAILEY, Clerk. 

[Endorsed :] Judgment Roll, filed March 24th, 
1894. 

A. A. BAILEY, Clerk. 



NOTICE OF INTENTION TO MOVE FOR 
NEW TRIAL. 

[Title of Court and Cause.] 

To the plaintiff above named, and Messrs. 
Reddy, Campbell and Metson, his attorneys : 

You will please take notice that the defendant 
intends to and will move this Honorable Court to 
set aside and vacate the verdict and decision 
heretofore re ndered and entered in the above- 
entitled action, and to grant a new trial thereof, 
upon the following grounds, to wit: 

First. Insufficiency of the evidence to justify 
45 the verdict of the jury. 

Second. That said verdict is against law. 

Third. Errors in law occurring at the trial and 
excepted to by the defendant. 

Said motion will be made upon a statement of 
the case hereafter to be prepared and served upon 
you. 

Dated March 30th, 1894. 

E. J. McCUTCHEN, 
Attorney for Defendant. 



i8 

tw 
46 [Endorsed:] Service of a copy of the within 

Notice of Intention, etc., is hereby admitted this 
30th day of March, 1894. 

REDDY, CAMPBELL & METSON, 

Attorneys for Plaintiff. 
Filed March 31, 1894. 

A. A. BAILEY, Clerk. 



STATEMENT ON MOTION FOR 
NEW TRIAL. 



[Title of Court and Cause.] 

The above-entitled cause came on regularly for 
trial on the 19th day of March, 1894. Messrs. 
Reddy, Campbell & Metson, and J. P. Abbot 
appeared as counsel for plaintiff, and Messrs. 
E. J. McCutchen and W. S. Wells as counsel 
for defendant. 

A jury was duly impaneled, and after the open 
ing statement by counsel for plaintiff, the follow 
ing testimony was taken and the following pro 
ceedings were had : 

N. J. Stone, the plaintiff, was called as a wit 
ness on behalf of plaintiff, and after being duly 
sworn testified as follows : 

I reside in the City and County of San Fran 
cisco, State of California, and have resided there, 



19 

49 with the exception of eight years, since 1863. I 
was born in New Hampshire, and will be fifty-one 
years of age in June. I have a, family consisting 
of a wife, four boys and a girl. I became 
acquainted with defendant in the latter part of 
1867. First had personal dealings with him in 
the latter part of that year. I was connected 
with the house of A. L. Bancroft & Company. 
Knew for several years, from about 1873, that 
defendant was at work upon a history or an en- 

5 cyclopedia, and knew definitely with reference to 
it in 1882. It was called "The History of the 
Pacific States." He discussed with me his plans 
with reference to the history, and engaged me in 
the enterprise in February, 1882. 

Question by plaintiff's counsel : State the cir 
cumstances ? 

Question was objected to by defendant as irrel 
evant and immaterial. 

rj Objection was overruled, and exception taken. 
Exception No. 1. 

A. Defendant sent for me in February, 1882, 

Question by plaintiff's counsel: Did you make 
any contract with him at that time ? 

Question was objected to by defendant as 
irrelevant and immaterial. 

MR. REDDY : We propose to show the circum 
stances under which the agreement was made. 



20 

52 Objection was overruled and exception taken 
by defendant. 
Exception No. 2. 

A. I did. I was to go on in June or July 
to take charge of the publication of the works 
of Hubert H. Bancroft, and commenced on the 
15th day of June. My salary from the 15th of 
June, '82, until the 31st of December was two 
hundred dollars per month. After the 31st of 
December, they gave me fifty dollars more, mak 
ing two hundred and fifty dollars, and gave me 
fifty dollars on my back salary, making it two 
hundred and fifty dollars ; it ran at two hundred 
and fifty dollars until July, 1883, when it was 
made three hundred dollars. In 1884, three hun 
dred and fifty ; in 1885, four hundred, and I was 
to receive four hundred and fifty in July, 1886, 
and five hundred in July, 1887. The salary was 
four hundred dollars to July and including April, 
54 1886. The salary was being paid by A. L. Ban 
croft & Company, a corporation comprised of 
A. L. Bancroft and H. H. Bancroft, and others 
sufficient to make up a corporation. I entered 
into this arrangement that was represented in 
the written contract in the early part of May, 
1886. In that agreement the History Company 
is referred to. It was decided, after the fire, to 
do business under the name of the History Com- 



21 

55 pany. The property was taken out of the hands 
of A. L. Bancroft & Company and put in the 
hands of the History Company. Prior to this 
agreement, I entered into an oral agreement first, 
which it was agreed should be reduced to writing 
and the agreement was reduced to writing on the 
20th of August, as appears by the papers. It 
was understood that the oral agreement was to 
be reduced to writing, but the particular date on 
which that was to be done was not stated, but we 
acted under it immediately, and I drew only $350 
salary in May instead of $400, and from May on 
I drew only $350 in salary and acted on the 
terms as stated in the written agreement. The 
written agreement was made the day it bears 
date, August 20, 1886 ; but I began immediately 
after the oral agreement was completed. We 
opened our bank account on the 18th of May as 
the History Company. The defendant owned the 

57 enterprise. No one except him owned any part 
of it at that time, nor at the time the written 
agreement was made. There had been no con 
veyance to me of any property, nor was any con 
veyance made to me on the 20th day of August. 
All I had was the agreement. The History 
Company was incorporated on the 23d of Septem 
ber, 1886; that is my impression. I do not know of 
or remember that any conveyance was made by 



22 



5 defendant to the corporation. After the incorpo 
ration, I received certificates representing ten per 
cent of the capital stock of the History Com 
pany. I also received salary. Upon the organi 
zation of the company I was elected Vice-Presi 
dent. The duties assigned me under that office 
were to employ agents and sell the works. I 
continued to discharge the duties of Vice-Presi- 
dent continuously up to May, 1892, up to May 
20th, I think, and was then superseded by Mr. 
Morrison. 

Question by plaintiffs counsel : During the 
time that you were in the management of the 
sale of the History, etc., were any dividends paid ? 

Question was objected to by defendant on the 
Around that it was irrelevant and immaterial, and 

O 

upon the further ground that this is an action 
brought by plaintiff against defendant to recover 
60 salary under this agreement, and it does not make 
any difference whether this corporation paid 
dividends or did not, whether the business was a 
profitable one or a losing one. 

Objection was overruled and exception taken by 
defendant. 

Exception No. 3. 

A. There were. We paid $90,000 dividend 
in 1888, $105,000 in 1889, $85,000 in 1890, and 



23 

L sufficient in 1891 to make the total amount of 
dividends, together with two of $5,000 each, 
which were declared in 1892, a total of $285,000. 
The first dividend in 1892 was declared on the 
18th of January $5,000 ; and another on the 
llth day of March of $5,000 more. I believe 
those are the correct dates. During the several 
years I was engaged in the business, I devoted 
all of rny time to it to the exclusion of everything 
2 in the world. During certain of those years I 
was unembarrassed and not interfered with by any 
one in the History Company. 

Q. State the facts which you claim interfered 
with you in the management of the business ? 

Question was objected to by defendant as im 
material and irrelevant under the pleadings in this 
case. 

Objection overruled and exception taken, 

6^ 

Exception No. 4. 

A. First, by taking my name off the station 
ery ; this was done in 1889. Second, by having 
the letters opened by other parties, without pass 
ing through my hands also, in 1889; and, third, 
by throwing restrictions about me as to engaging 
agents, the advances made to them, and the salar 
ies paid to them, etc.; fourth, by organizing a 



24 

64 bureau, as it was termed, inside the History Com 
pany. Those acts interfered with me as they pre 
vented me from employing agents, and belittled 
me in the business, and made it impossible for me 
to keep the run of the business as I had before. 
In consequence of these acts we had a meeting 
in 1889 at which defendant was present. 

Question by plaintiff's counsel : What was his 
conduct there, and what was the result of it? 

Question was objected to by defendant as irrel- 
evant and immaterial, and not responsive to any 
issue raised in the case. 

Objection was overruled and exception taken by 
defendant. 

Exception No. 5. 

Witness continuing : We held the meeting for 
about three days, and I finally told defendant 
that I was there to do what they prescribed for 
me to do, and if they wished me, I would whittle 
66 the end of a pine stick ; but I told them it would 
be impossible for me to carry on the business on 
the lines they had prescribed. Defendant said in 
reply: "Mr. Stone, we are entirely satisfied with 
everything you have done. Your management 
of the business has been superb. We have not a 
complaint to offer in any respect." I asked him 
what was the occasion of the meeting. He took 
off his glasses, wiped them, put them on, and said, 



25 

67 "Mr. Stone, let us go and have some lunch," and 
that was the end of the matter. Things moved 
on in the usual lines after that, except that I was 
restricted in regard to the employment of agents, 
and my name was not on the stationery, and I did 
not have the opening of letters. That was 
brought up at the meeting at that time, and a 
resolution was passed in regard to it. 

The next disturbance occurred in May, 1892. 
There was a good deal of friction. I did not 

Do 

have charge of the business in the sense I had 
had charge of it previously. I was interfered 
with constantly by defendant. He had the 
entire direction of the corporation from the fact 
that the other directors were simply his wife, 
daughter, Mrs. Stone and myself. The defendant 
said Mrs. Bancroft and his daughter were put in 
as directors for the purpoes of having a corpora 
tion. They were entirely under his direction. I 
69 do not think I ever heard defendant say whether 
or not they were acting under his direction, or 
whether they exercised an independent judgment. 
When we had our meetings it was decided by de 
fendant what was to be done, and they came and 
did it. I have heard him ask one to read resolu 
tions, and others to second them, and those reso 
lutions were passed, and there never was a dis 
senting voice. I attended the meeting of directors 



26 

70 of May 20th, 1892, at which I was superseded as 
director and Vice-President. I received my 
salary for May and for June, but not for July. I 
have not received any salary since July, 1892. I 
have applied for it to Mr. Borland, the Secretary 
and Treasurer of the company. 

Question by plaintiff's counsel : When you 
made application for it, what response did you 
receive ? 

Question was objected to by defendant on the 
' ground that he was not bound by any response 
made to the witness by somebody else. 

Objection was overruled and exception taken 
by defendant. 
Exception No. 6. 

A. He told me that defendant requested him 
not to pay me. 

Witness continuing : I was in the full dis 
charge of the duties of my office up to May 20th. 
72 Then the correspondence was taken away from me 
the daily mail, orders and remittances and letters 
in reference to business from agents, etc. Next 
my stenographer was taken away. 

Q. What next?. 

A. The boy in the office was forbidden to keep 
any letters for me. 

Defendant moved to strike out this answer as 
being a conclusion of the witness, and on the fur- 



27 

73 ther ground that the defendant was not bound by 
it unless he gave the direction. 

The Court stated that it must be connected, 
and denied the motion, to which ruling defendant 
excepted. 
Exception No. 7. 

Witness continuing : Next, my desk was 
moved from its place outside the rail, and then it 
was moved to different parts of the building, in 
some places as far as 150 feet away. It was 
taken away and the casters were taken off so that 
I could not take it back without extreme diffi 
culty ; I couldn't bring it back without carrying 
it. The ink was turned over the top all over 
the papers, the desk, the correspondence and 
everything else. Two inkstands were upset and 
a saw-horse was put on the desk. My chair was 
taken away, and finally my desk was taken up 
stairs on the fifth floor. In the meantime, the 
75 furniture of the office was torn up, and the Ban 
croft Company was moved upstairs, and they oc 
cupied nearly all the space formerly occupied by 
the History Company. My desk was finally 
brought back from upstairs, but placed in a posi 
tion where I couldn't sit down at it, and where I 
couldn't get any light on it. The safe was locked, 
the combination was changed, and the books, 
when I demanded certain books, they were given 
to me. 



28 

76 Question by defendant's counsel : Do I under 
stand defendant did all these things ? 

MR. REDDY : Yes, that he ordered those 
things done, that he was the cause of it. 

O 7 

Witness continuing : I was utterly incapable 
of forming any intelligent idea of the business, or 
performing any intelligent work. I was utterly 
incapable of transacting business. The safe was 
locked, the combinatian was changed so that I 

couldn't unlock it. The contracts and important 

77 

documents were kept in the safe, and I could only 

get them when Mr. Dorland chose to go in and 
open the safe. The employees did not obey my 
orders. I attempted to go in the inside room 
where defendant was at work, and speak to him, 
and ask him what he meant by the manner in 
which he was treating me ; and he replied by 
asking Mr. Morrison to put me out of the room. 
This was after the occurrences which I have re- 
78 peated. Morrison stepped up to the door and 
pushed me out through it. He was Vice-Presi- 
dent. I did not make any other attempt person 
ally to converse with defendant with reference to 
the discharge of my duties, except at the time the 
assessment was put on. That was in September, 
'92. I omitted to say defendant pushed my desk 
away from me one day when I was writing. He 
pushed it seven or eight feet away when I stood 



29 

79 writing at it. I told him that he must not do that ; 
he was going altogether too far. Nothing else oc 
curred at that time. 

Question by plaintiff's attorney : Did you 
ever have any conversation in which defendant 
said or spoke anything about beggaring you, or 
anything of that sort ? 

A. That was previously, along about the 15th 
day of May. That was a day or two before I was 
deposed as Vice-President and director. 

Q. State what occurred ? 

Question was objected to by defendant on the 
ground that the occurrence took place prior to 
the 1st day of June, 1892, and the witness admits 
that he was paid for all services rendered by him 
up to and including that time. 

Objection was overruled, to which ruling de 
fendant excepted. 

Exception No. 8. 

3 1 Witness continuing : He said : " G d 

d n you, I will beggar you ; I will beggar 

your wife ; I will beggar your children ; G d 

d n you, I will make beggars of you all." I 

had had some conversation with defendant of a 
heated nature with regard to the actions of himself 
and Mr. Morrison in reference to myself ; and had 
charged defendant with conspiring with Morrison 
to drive me out of the business. He said he had 



30 

82 not done so. I replied, I knew he had, for I had 
evidence. I had my coat on my arm and was 
starting to leave the office, and he followed me a 
few steps arid made these threats to me. A few 
days after that he sued me for $107,000. The 
suit was filed against me to deprive me of my 
stock, to break the contract, and have the stock 
returned with the dividends I had received ; and 
also charging me with a violation of my contract, 
fraud, conspiracy, etc. After about sixteen months 
the suit was dismissed, and has not been renewed 
to my knowledge. At the time defendant made 
this statement to me about beggaring me, Miss 
Hayes and Mrs. Hambly were present, and Dor- 
land was a few feet away. 

Q. Did defendant assign any reason why he 
would beggar you, or wanted to beggar you ? 

A. We had had a very heated conversation, and 
I told him I should not permit him to carry out 
$* the plans I believed he was inaugurating. That 
was all. The next day or two I spoke to defen 
dant, asking him something about some Mexican 
business in reference to the History. He gave 
me a very impudent answer and told me not to 
speak to him. 

Question by plaintiff's counsel. What was the 
answer ? 

Question was objected to by defendant as irrel- 



3 1 

85 evant and immaterial, on the ground that it took 
place before the time that the defendant refused 
to pay plaintiff's salary. 

Objection was overruled, to which ruling de 
fendant excepted. 

Exception No. 9. 

A. He declined to have anything to do with 
me. He said : " I haven't anything to say 
about it," and not to speak to him about any 
thing;. There was some other conversation, the 

Q 

exact words of which I do not remember. The 
next time he came near me after that was when 
he pushed my desk ; that was in July, 1892. 
About that time, or shortly after that, I went to 
go in his room to speak to him, when Mr. Mor 
rison pushed me out of the door. I next met de 
fendant to talk to him at the meeting at the time 
of the assessment, which I think was November 
29th, 1892. An assessment was then levied. 
3 j Question by plaintiff's counsel : For how 
much ? 

Question was objected to by defendant as irrel 
evant and immaterial. 

Objection was overruled, to which ruling de 
fendant excepted. 

Exception No. 10. 

WITNESS : The assessment was for $50,000. 
Q. Was there any money in the treasury at 
the time that assessment was levied ? 



32 

88 Question was objected to by defendant. 

Objection was overruled, to which ruling de 
fendant excepted. 
Exception No. 11. 

WITNESS : There was somewhere from five to 
seven thousand dollars. 

Question by plaintiff's counsel : They pro 
ceeded so far with the assessment as to advertise 
your stock for sale under that proceeding, didn't 



. 

Question was objected to on the ground that it 

was irrelevant and immaterial. 

Objection was overruled, to which ruling de 
fendant excepted. 

Exception No. 12. 

A. Yes, they did, and the sale of the stock 
was prevented by injunction by a suit, and is still 
enjoined by a suit pending in San Francisco. At 
the time the assessment was levied, I was present, 
90 and Morrison arose to put me out of the room. 
He opened the door and came and stood by me, 
and went to put his hand on me, and I said, 
" Don't you put your hand on me," that I had as 
much right to be there as he had. He said, if I 
had a right to be there, of course he didn't want 
to put me out, but he would refer the matter to 
defendant. Defendant said to throw me out of 
he window ; that he could throw me out of the 



33 

9i window as far as lie, defendant, was concerned. 
Morrison then suggested that we adjourn, but de 
fendant said no. Then they held a consultation 
among themselves, a whispered consultation, and 
concluded to go on. Defendant said, ''We will tro 
on with the meeting," and got up and opened all 
the doors wide, and they read the resolution in re 
gard to the assessment, and I arose and said, " Mr. 
President and stockholders of the History Com 
pany, I object to levying an assessment ; it is 

Q2 

unnecessary, and I protest against it." He said to 
me in reply, " Shut up, or I will throw you out of 
the window." I sat down and the resolution was 
passed. As soon as it was passed he and the 
others started to leave the room. Defendant 
came back and said to the Secretary of the His 
tory Company, " Don't you pay any attention to 
that thing sitting over there in the corner," and 
went out of the room. During the years I have 
a* named, up to May, 1892, I was in attendance at 
the office at business always ; I was never away 
except when detained by sickness. I had some 
vacations, but I never was away from that busi 
ness a day that I did not receive some communi 
cation from the company ; in other words, I did 
not receive any relaxation. I did everything in 
selling books, attending to the business of that 
company in every particular to the detriment of 



34 

94 my health and pleasure. After May, 1892, I 
visited the place regularly and attempted to dis 
charge my duties. I did this up to about the 
31st of December, 1892. At that time my desk 
was moved upstairs again, and then moved down 
again and placed in that position where I could 
not use it ; I could see nothing ; I could do noth 
ing ; I couldn't sit at the desk. I made applica 
tion repeatedly to both Dorland and Morrison for 

instructions as to what I should do or should not 

95 

do. Morrison was then Vice-President and 

Dorland Secretary and Treasurer. 

Question by plaintiff's counsel : What reply 
did you get from Morrison when you applied to 
him for instructions as to what you should do ? 

Question was objected to by defendant as irrel 
evant 'and immaterial, and as defendant cannot 
be bound by statements of Morrison. 

Objection was overruled, to which ruling de- 
96 fendant excepted. 

Exception No. 13. 

A. Morrison told me I had no right there. 
This was upon my applying to him for instruc 
tions in the performance of my duties, and in 
reference to information as to certain collections. 

Q. What was the reply of Dorland ? 

Question was objected to by defendant on the 
ground that defendant was not bound by the 
statements of Dorland. 



35 

97 MR. REDDY: We expect to show he was author 
ized to give this very answer, and was ordered to 
do the very thing he did do, and that Mr. Ban 
croft ordered it. 

THE COURT : If you expect to follow it up it 
will be proper. 

A. Mr. Dorland said he had been instructed 
to take the letters away from me. I continued 
to visit the business place of the History Com 
pany regularly until the 31st of December, 1892. 
I ceased to go there for the reason that my desk 
was taken upstairs, and kept there for several 
days, and then brought down again and put in the 
center of the aisle, where I could only stand up by 
it, and it was put where I couldn't get any light, or 
put a chair to sit upon, by it, and in a draught 
from the door. I could not do any work where 
the desk was put, because there was no chair 
there, and it was impossible for me to place a 
on chair there, and I could not work because I had 
nothing to work with. I couldn't see, and it was 
in the draught from the door. There was not 
sufficient light, either artificial or natural, to per 
mit a person to write, or to see their writing. 
When I found that condition of things, I quit 
going there, but before doing so, or about that 
time, I went and served notice upon Mr. Dorland 
a verbal notice. 



36 

100 Question: To what effect? What did you say 
to him? 

A. I demanded of him that he permit me to 
go to work, to make a place for me to go to work 
under my contract the contract with defendant. 
That I was there for that purpose, and I wished 
him to distinctly understand that I was ready and 
willing at all times to perform my duties under 
the contract, and always had been ready and will- 

101 m % * g ^ WOI% k. I have not engaged in any 
other business since that time until recently the 
middle or latter part of 1893. It was such 
business that I was always ready and am now, to 
perform the contract. I have abandoned the 
business I engaged in. I have not been able to 
realize a dollar from it. I gave this notice to 
Mr. Dorland in the latter part of December and 
the latter part of January. I repeatedly told 
him I was ready to do the work, but I took a wit- 

102 ness on this occasion with me, a Mr. Drew, who 
took the conversation down in shorthand. 

Q. What was the reply made by Dorland on 
that occasion ? 

Question was objected to by defendant on the 
ground that it was irrelevant and immaterial, 
and upon the ground that defendant was not 
bound by the statement of Dorland. 



37 

103 Objection was overruled, to which ruling de 
fendant excepted. 

Exception No. 14. 

A. Dorland said he had been instructed by 
defendant not to let me have the correspondence, 
and not to permit me to do any work there. He 
was Secretary and Treasurer of the History 
Company, and owned ten shares of the stock. 
He was under the direction of defendant. I 

104 know that because he (Dorland) said so. I know 
nothing further about Dorland being at the com 
mands of defendant further than what he said to 
me. 

Question by plaintiff's counsel : State, if you 
know of your own knowledge, of defendant being 
present with yourself and Dorland and others, 
and his giving instructions for actions, and it being 
obeyed by Dorland ? 

105 MR. McCuTCHEN : I object to that question. 
The fact that Dorland had at some time in Mr. 
Bancroft's presence obeyed his instructions at 
some meeting of the company, would not by any 
means lead to the conclusion that on this occa 
sion he was obeying the direction of defendant. 

Objection was overruled, to which ruling de 
fendant excepted. 
Exception No. 15. 



38 

io6 A. I do. I know it, because it is in a series 
of resolutions which were copied in the minutes. 
I saw them in Mr. Bancroft's handwriting. They 
were directed to Mr. Hartwell ; they were subse 
quently copied in the minutes. The originals have 
been in the safe of the History Company. 

[The minute-book of the History Company 
was produced and witness's attention directed, 
by his counsel, to pages 32 and 33.] 

Witness continuing : I do not know of any 
' other resolution or motion passed and being 
ordered by defendant, except by hearsay ; I do 
not recollect any other. There may have been 
other instances, but I do not recollect them at 
this moment. When I addressed Dorland con 
cerning my services, I addressed him as Secretary 
and Treasurer of the corporation, and he answered 
me in that capacity. I have never, at any time, 
neglected any of my duties. I will swear that I 
Io g have not ; never at any time has any demand been 
made upon me for the performance of any duty 
which I did not promptly discharge. 

(Book of " Literary Industries " shown to wit 
ness.) 

This is the 39th volume of Bancroft's works, 
published November 30, 1890, by the authority 
of defendant. I know it was published by his 
authority, because he authorized me to print it 



39 

IO9 and publish it, and bind it and distribute it. 

MR. REDDY : I offer in evidence, and ask to 
read, from several places in this History bearing 
upon the question of how plaintiff discharged his 
duties under this contract, as the declaration of 
Mr. Bancroft. 

The offer was objected to as irrelevant and im 
material; and particularly so at the stage of the 
case at which it was offered. 

MR. REDDY : I desire to read from this book as 
the declaration of Mr. Bancroft to the effect that 
Mr. Stone discharged his duties faithfully, up to 
this time, and he was really a great promoter and 
the cause of its success by his faithful manage 
ment of the enterprise which is in issue and the 
issue of this cause. 

THE COURT : It seems to me it would be admis 
sible under certain conditions. It certainly would 
be admissible in rebuttal if it is brought back to 
m Mr. Bancroft. 

MR. REDDY : I think it is g^ood original evi- 

o o 

dence. I would like to put it in now so that 
counsel may have a full view of our case. 

THE COURT : Very well. Which ruling was 
excepted to by defendant. 

Exception No. 16. 

Thereupon counsel for plaintiff read the follow 
ing extracts : 



40 

H2 Page 586. " Literary Industries " : 

41 Further than this, not only would I print, but I 
would publish. I had no delicacy now in placing the 
imprint of the firm on my title pages. The world might 
call it making merchandise of literature, if they chose; I 
knew it was not, that is to say, in a mercenary sense. There 
was no money in my books to the business; hence, the 
business did not specially want them. In the publication 
of several extensive works, the house had acquired a na 
tional reputation, and I was convinced that it would do 
better with this series of Pacific States Histories than any 
other firm. So I engaged Mr. Nathan J. Stone, lately of 
Japan, but formerly of our house; a man of marked ability, 
of much experience in our establishment and elsewhere) 
to devote himself to the publication and sale of my books. 
Transferring to him the business connected therewith, I 
went on with my writing more vigorously, if possible, 
than before. I requested the Mayor and the Governor to 
visit the library, inspect the work, and then give me a 
certificate expressing their belief in the completion of the 
work as then promised, which was at the rate of three or 
four volumes a year." 

Page 793: " Nathan Jonas Stone was born in Webster, 
Merrimac County, New Hampshire, June llth, 1843, which 
spot was likewise the birthplace of his father, Peter 
Stone. Both of his grandfathers were captains in the 
army, one serving in the Revolutionary War, and the 
other in the War of 1812. Mr. Stone's early life was spent 
on a farm; working during summer, and attending 
school, or teaching, in winter. No better training can be 
devised for making strong, self-reliant men; no better 
place was ever seen for laying the foundations of firm 
principles, and knitting the finer webs of character, than 
a New England country home. In 1863, being then 
twenty years of age, Mr. Stone came to California by 
way of Panama, arriving in San Francisco on the 18th 
day of August, with just ten cents in his pocket. Invest- 



* n & ki 8 capital in Bartlett pears, he seated himself on the 
end of a log, near the wharf where he landed, and ate 
them. Thus fortified for whatever fate might have in 
store, he set out to find work. He knew not a soul in 
the city, having thus cast himself adrift upon the tide of 
his own native resources, in a strange country, at this early 
age, with cool indifference parting from his last penny, 
well knowing that there was no such thing as starvation 
in store for a boy of his mettle. Times were very dull, 
and easy places with good pay were not abundant. Nor 
did he even search for one; but after walking about for 
the greater part of the day, making his first tour of ob 
servation in the country, about 5 o'clock he saw posted 

116 on Kearny Street a notice of workmen wanted, and was 
about making inquiries concerning the same, when he 
was accosted by a man driving a milk wagon, who asked 
him if he was looking for employment. Stone replied 
that he was; whereupon, the man engaged him on the 
spot, at forty dollars a month and board. Three months 

-afterward he was offered, and accepted the superintend 
ence of the Industrial School farm, acting later as teacher 
and deputy superintendent. In 1867, he entered the house 
of H. H. Bancroft & Company, acting as manager first 
of the subscription department, and then of the wholesale 
department. In 1872, he became interested in the awaken 
ing of civilization in Japan, and opened business on his 

117 own account in Yokohama, where his transactions soon 
reached a million of dollars a year, importing general 
merchandise and exporting the products of the country. 
He placed a printing press in the Mikado's palace, which 
led to the establishment of a printing bureau, and the 
cutting out and casting into type of the Japanese charac 
ters. Obliged by ill-health to abandon business, he 
returned to San Francisco in 1878 completely prostrated; 
but after a summer at his old home, he recuperated, his 
health still further improving during a four years' resi 
dence at Santa Rosa, California. Mr. Stone had followed 
me in my historical efforts with great interest from the 



42 

118 first. He had watched the gradual accumulation of ma 
terial, and the long labor of its utilization. He believed 
thoroughly in the work, its plan, the methods by which 
it was wrought out, and the great and lasting good which 
would accrue to the country from its publication. He 
was finally induced to accept the important responsibility 
of placing the work before the world, of assuming the 
general management of its publication and sale, and de 
voting his life thereto. No one could have been better 
fitted for this arduous task than he. With native ability 
were united broad experience and a keen insight into men 
and things. Self-reliant yet laborious in his efforts, bold 
yet cautious, careful in speech, of tireless energy, and 

119 ever jealous for the reputation of the work, he entered 
the field determined upon success. A plan was devised 
wholly unique in the annals of book publishing, no less 
original, no less difficult of execution than were the 
methods by which alone it was made possible for the au 
thor to write the work in the first place. And with un 
flinching faith and loyalty, Mr. Stone stood by the 
proposition until was wrought out of it the most complete 
success." 

Witness continuing : This book was published 
November 20th, 1890. I have a letter from de 
fendant to Mr. Dorland of recent date respecting 
the engagement of my services. This letter was 
written by defendant. I have seen him write re 
peatedly, and am familiar with his handwriting 
and his signature. This is in the handwriting of 
Mr. Hubert Howe Bancroft. The letter is dated 
August 9, 1893, and reads as follows : 

" Aug. 9th, 1893. 
Dear Tom: 

Do you suppose we could get N. J. Stone to 

take charge of the History Company and work the Book 



43 

121 of the Fair for all it is worth on the Pacific Coast. It is 
a great success here, and in connection with the Midwin 
ter Fair there, I am sure a large and profitable business 
can be done by the right kind of a man. The History 
Co. now handle the Book of the Fair at 60 per cent off on the 
Pacific Coast, or such parts of it as they want, and a good 
business should be done in Cal. on write-ups and adver 
tisements. 

H. H. B. 

Just got 3 orders for the $500 edition, taken by a new 
man, not the one who took Higgenbotham for the first 
$1,000 edition last week." 

12 2 [Admitted in evidence and marked Plaintiff's 
Exhibit 1.] 

I received that in a letter from Mr. Dorland, 
dated August 23, 1893, as folllows: 

" San Francisco, California, August 23, 1893. 
Dear Mr. Stone: 

I received the enclosed letter from Mr. 
Bancroft, it explains itself; what do you think of the 
proposition. They have sold something like $210,000 of 
the work already. 

Yours truly, 

123 T. A. C. Dorland." 

[Marked Plaintiff's Exhibit 2.] 
That is in the handwriting of Mr. Dorland. 

Q. Did you make any reply to their request ? 
A. I did not ; no, sir. 

CROSS-EXAMINATION. 

The agreement which bears date August 20, 
1886, was practically made between defendant 



44 

124 an d me in May, 1886, and the agreement of Au 
gust 26, 1886, contained only the terms of the 
arrangement made between me and defendant in 
May, 1886, and I do riot think it contains anything 
else ; I don't think -there was any element in the 
agreement of May, 1886, which "was not subse 
quently embodied in the agreement of August, 
1886. Between May, 1886, when the oral agree 
ment was made between me and defendant, and 

August, 1886, when the written agreement was 
j 2 c 

executed, I carried on the business substantially 

the same as I did subsequently, after the agree 
ment was executed in August. So far as my in 
terest in the business was concerned, it was the 
same subsequent to May, 1886, as it was subse 
quent to August, 1886. Prior to May, 1886, the 


business which is referred to in the agreement 
and set out in the complaint, was carried on by 
A. L. Bancroft & Company under the name of 
I2 6 the " Bancroft's Works Department" of A. L. 
Bancroft & Company. Subsequent to May, 1886, 
it was carried on under the agreement which I 
made with defendant. At all times from May, 
1886, up to the formation of the corporation of 
the History Company, the business referred to in 
this agreement was done either under the oral 
agreement or under the written agreement. 

I understand that the written agreement itself 



45 

127 conveyed to me a one-tenth interest in the busi 
ness. From the date of the verbal agreement, 
made in May, 1886, I believe I was the owner 
of a one-tenth interest in the business, and also, I 
had a contract running for ten years. It was my 
impression that from the time the agreement was 
made, I was the owner of a one-tenth interest in 
the business, with a contract running over ten 
years at a stipulated salary. As I have testified, 
the History Company, the corporation referred to 

T 28 

in this agreement, was formed, ten per cent of the 
capital stock was issued to me. I received that 
ten per cent under this agreement. That was the 
only agreement I had with defendant. We had 
other agreements with reference to other matters. 
In reference to this matter, it was the only agree 
ment by which I was entitled to ten per cent of 
the capital stock of the corporation. After the 
corporation was formed, it took the property men- 
I2 9 tioned in this agreement; it got all of the prop 
erty. I am not aware that defendant ever did 
turn over to the corporation anything which he 
had agreed by this contract to turn over ; so far 
as I know, I think he performed the contract in 
that respect. After the corporation was formed, 
the Treasurer of the History Company paid me 
the compensation which I received. He was un 
der my orders. 



46 

130 The compensation was paid me in accordance 
with this agreement. I am not aware that I re 
ceived any compensation from the History Com 
pany for salary subsequent to this incorporation, 
except what I received under this agreement. I 
was Vice-President of the corporation for a long 
time after it was formed. 

Q. Did you not receive all the compensation 
paid you by the History Company from the date 
of its formation up to May, 1892, as Vice-Presi- 

131 dent? 

A. Yes, I think I did. 

(Book of By-Laws of the History Company 
shown to witness.) 

I recognize this as the Book of By -Laws of 
the History Company. I was only paid one sal 
ary by the History Company. These by-laws 
were adopted on the 20th of October, 1886. 

(Section 2, Article VIII, of the by-laws was 

132 offered in evidence by defendant, and reads as 
follows : 

" The salary of the Vice-President shall be 
$350 per month." 

Q. That salary was paid you as Vice-Presi- 
dent for how long ? 

A. I received a salary of $350 per month 
until the end of June, 1892. 

Q. How long did you receive that salary as 
Vice-President ? 



47 

133 A. My impression is there was some repeal 
or some action taken in reference to that by-law 
in the early part of 1889. 

Q. Then, from the 20th of October, 1886, 
until some time in 1889, you received a salary of 
$350 per month as Vice-President of the History 
Company ? 

A. Yes, I received that salary under my con 
tract, I presume ; that is the way I understood 
it. I understood it in that way when I signed 
^ these by-laws. My contract did not make me 
Vice-President. 

Q. I ask you whether the salary of $350 per 
month, which vou received from October 20, 

V 

188 6, down to the date of the repeal of this by 
law in 1889, was not paid you as salary as Vice- 
President under this by-law ? 

A. I did not consider it in that way. I con 
sidered I was receiving that salary under the 
X or terms of that contract. 

Q. When you signed this declaration on the 
20th of October, 1886, did you understand that 
that salary of $350 per month payable to the 
Vice-President, was to be paid to you ? 

A. I understood I was to draw $350 per 
month salary on account of that agreement. 

(Question repeated.) 

A. I did not consider it in that way. I never 
thought of it in that connection. 



4 8 

136 Q. Then did you understand when you signed 
this by-law, that the manager of the History 
Company was to receive $350 per month under 
your contract, and that the Vice-President of the 
History Company was to receive $350 per month 
under this by-law ? 

A. No, sir. 

Q. What did you understand ? 

A. I understood I was to draw $350 per 
month, and was to act as Vice-President of the 
" company. I was elected Vice-President of the 
company. As I said before, I never looked at it 
in that connection. I looked at it as I was to 
receive that money under my contract. From 
the date of the formation of the History Com 
pany down to 1892, the business was largely under 
my control, but not altogether. Between May, 
1886, when the oral agreement was made, and 
August, 1886, when the written agreement was 
made, I had charge of this enterprise. I had 
charge of the books. My salary was entered on 
the books ; it was entered in the salary account 
and carried to the expense account. It was 
always entered upon the books from the date of 
the written agreement, and was one of the ex 
penses of the business, and all the profits which 
were divided, either in the shape of dividends or 
in any other way, were net profits after the de- 



49 

139 duction of all expenses, including the deduction 
of my salary. My salary was never charged to 
defendant individually on the books, and he never 
paid the salary individually; the salary was paid 
to me by the cashier who was under my control 
and control of defendant. 

Q. This $350 per month was taken by you 
then from the money belonging to the joint ven 
ture ? 

A. It was not taken by me ; it was paid me 
by Mr. Hart-well, the Treasurer, and came out 
of the moneys belonging to the joint venture The 
arrangement made between me and defendant in 
May, 1886, was crystallized by the agreement in 
August, 1886, and was that I was to get 10 per 
cent of the profits after all the expenses were 
paid, including my own salary. I was to have 
ten per cent of the entire business and ten per 
cent of the net profits. 

j^! I don't know that the taking of my name oft' 
the letter-heads was the first conduct on the part 
of defendant of which I complained ; but it was 
one of the things. I do not know how it was 
done ; that is one of the things I do not under 
stand. I do not know how it was done. I have 
no idea how it was done ; I do not know why it 
was done. I know it was done by a resolution of 
the Board of Directors at defendant's written 



50 

request. I was a member of the Board. I was 
there at that time. I think I voted for the reso 
lution. I think my name was taken off the letter 
heads pursuant to a resolution of the Board, for 
which I voted ; and yet I take the stand here and 
complain that that is one of the things which 

142 prevented the discharge of my duties under this 
contract. I knew this morning I had voted for 
it. There were only two adverse votes in that 
book. There was no use for me to vote against 
it. I knew there was a cut-and-dried arrange 
ment, and that opposition on my part would be 
futile. I seconded the resolution and voted for 
it. I know that resolution was directed to every 
officer of the company. It affected all the officers; 
I found a grievance in that, because I thought 
that in taking my name off the letter-heads, it 
would injure the business ; it had always been on 
there from the time I was first connected with 
the business. I thought it would be noticed by 
outside parties. Defendant's name had been upon 
the letter-heads for a long time before this reso 
lution was passed, but he had nothing to do with 
the correspondence in the field. I was very 
familiar with the business of the company. I 

143 knew what should be done to make it a success. 
I was to get 15 per cent of the profits, and yet I 
was voting for a resolution which I thought 



145 would injure the business and decrease my profits; 
but notwithstanding this indignity to which I was 
subjected in 1889, I continued to act as an em 
ployee of the company, and from that time on 
received $350 per month until the end of June, 
1892, which was always paid to me by the cash 
ier of the History Company, and charged upon 
the books of that company to the expense account. 
It was never charged to defendant individually to 
my knowledge. At the meeting in 1889 which 
lasted three days, I made objections to what de 
fendant proposed to do, and said I would do 
what he directed me to do. 

Q. Then did you regard yourself as under the 
control of defendant at that time ? 

A. Defendant always directed the History 
Company. 

Q. Answer iny question. Did you regard 
yourself under the employment of defendant at 
!47 that time ? 

A. I regarded myself as a member of the His- 
tory Company. 

Q. Were you working for defendant at that 
time ? 

A. No, I presume I was working for the His 
tory Company. 

Q. And at all times from the organization of 
the History Company in 1886 down to 1892, you 
were working for the History Company ? 



52 

148 A. I was working nominally for the History 
Company, but I was working for defendant under 
the contract. In 1889 defendant refused to give 
me the necessary money to employ agents, and 
this was repeated after that all the time, notwith 
standing that I continued there in the discharge 

a o 

of my duties to the best of my ability. 

Q. And were you paid your salary by the 
History Company ? 

A. Every month I received my salary. The 
last salary I received from the History Company 
for services performed was in the month of June, 
1892. During July, 1892, I was there every day 
writing letters. During August, 1892, 1 was there 
occasionally writing letters not very often, and 
the same during September, 1892. In October, 
1892, 1 was there but I did not do much of any 
thing. In November, I was there all the time and 
did less. 

ICQ Q. How much time did you spend there in 
November ? 

A. I was there part of the time ; I may have 
been away a few days. I was ill once or twice 
and away a few days. 

Q. And in December, 1892? 

A. I was there most of the time. About the 
end of December I went there and found my desk 
in a place where I couldn't work, and left. In 



53 

151 January, 1893, I went there every day, and in 
February, 1893, I went there until I served this 
notice upon Mr. Dorland, the early part of 1893, 
and since then, I presume I have been in there 
twenty-five times. The conversation which I had 
with Morrison was in July, 1892. The conversa 
tion which I had with defendant when he said he 
didn't want me to talk to him was on the 22d day 
of May, 1892 ; but notwithstanding that, I re 
mained there. I made a demand on Dorland, 

^ the Treasurer, for the salary claimed to be due 
me after the 20th of May, 1892. I am under 
the impression I made other demands, but it is 
not clear in my mind. I did not make any de 
mand on defendant, and have not spoken to him, 
with the exception of a conversation that we had 
one Sunday afternoon, that was about three or 
four weeks ago. He telegraphed Dorland he 
would like to have me meet him as a special favor 
one Sunday afternoon, just after these letters 
came from Mr. Dorland. 

(Defendant here offers in evidence complaint in 
case of N. J. Stone vs. The History Company, 
pending in the Superior Court of the City and 
County of San Francisco, State of California, 
which complaint is in the words and figures fol 
lowing, to wit :) 

" In the Superior Court of the State of California in 
and for the City and County of San Francisco, 



54 
I 5 4 N - J- STONE, 






Plaintiff. 



THE HISTORY COMPANY (a Corporation), 

Defendant. 

Plaintiff complains of defendant aboved named and 
for cause of action alleges: 

1. That the said defendant, the History Company, is 
and was at all the times herein mentioned, a corporation 
duly organized and existing under and by virtue of the 
laws of the State of California. 

2. That between the 30th day of June, 1892, and the 
first day of August, 1892, at the City and County of San 
Francisco, State of California, the plaintiff performed 
work and labor and rendered services for the defendant 
at its special instance and request as its manager. 

3. That for said work, labor and services the said de 
fendant promised and agreed to pay the said plaintiff the 
sum of three hundred and fifty dollars per month. 

4. That the defendant has not paid the same, nor any 
part thereof. 

Wherefore, plaintiff prays judgment against the said 
defendant for the sum of three hundred and fifty ($350) 
dollars, with interest thereon at the rate of seven per cent 
per annum from the 31st day of July, A. D. 1892, and for 
costs of suit. 
I5 6 REDDY, CAMPBELL & METSON. 

Attorneys for Plaintiff." 

(Witness is handed a second complaint in an 
action instituted by him against the History 
Company.) 

WITNESS : I verified that complaint about the 
day it bears date. 

Said complaint was filed in the Superior Court 
of the City and County of San Francisco, State 



55 

157 ^ California, and is in the words and figures 
following, to wit : 

"In the Superior Court of the State of California in and 
for the City and County of San Francisco. 

N. J. STONE, 

vg Plaintiff. 

THE HISTORY COMPANY (a Corporation), 

Defendant. 

Plaintiff complains of defendant above named and for 
cause of action alleges: 

158 1. That the said defendant, the History Company, ia 
and was at all the times herein mentioned, a corporation 
duly organized and existing under and by virtue of the 
laws of the h'tate of California. 

2. That between the 31st day of July, 1892, and the 
first day of September, 1892, at the City and County of 
San Francisco, State of California, the plaintiff per 
formed work and labor, and rendered services for the de 
fendant at its special instance and request as its manager. 

3. That for said work, labor and service the said de 
fendant promised and agreed to pay the said plaintiff the 
sum of three hundred and fifty dollars per month. 

4. That the defendant has not paid the same, nor any 

1 59 part thereof. 

Wherefore, plaintiff prays judgment against the said 
defendant for the sum of three hundred and fifty dollars 
($650.00) with interest thereon at the rate of seven 
per cent per annum from the 31st day of August, A. D. 
1892, and for costs of suit. 

REDDY, CAMPBELL & METSON, 

Attorneys for Plaintiff." 

Witness continuing : I did not say I had a 
conversation with Dorland in January. I said it 



56 

160 was in the early part of 1893. I could not tell 
whether it was in the month of January or Feb 
ruary. I could not state within sixty days of the 
time it took place. I have no way by which I 
could fix the time. I should think it was a 
month or six weeks after the time I went there 
and found my desk in a place where I couldn't 
work. I was at the History Company's office 
nearly every day up to the time the conversation 
with Dorland took place. I do not know exactly 
when that was. After that time I engaged in 
other business. For a little while I was giving 
my attention to the publication of a work called 
"Femina," for two or three months. I think it 
was May, June and July, somewhere along there. 
During all that time I considered that I was still 
engaged under this contract with the History 
Company, and did very little in relation to the 
" Femina " business I started in to publish that 
book and then decided not to. This was in 1893. 
I was to have an interest in the publication of 
the " Femina " book ; I was in there in the 
capacity of having an interest in it ; then I ar 
rived at the point where I disposed of my inter 
est in it. I did have an interest in it for a time. 
My interest was one-half and the other one-half 
was owned by Dr. Miller. I think my interest 
began somewhere in May or June. It ran along 



57 

163 about three months ; I would not be positive as 
to the date. There were no writings to define 
my interest ; we had not drawn papers between 
ourselves. I devoted two or three months to the 
business. Considerable of that time I was about 
the History Company building, but I did not go 
there regularly. I was devoting some of my 
time to that business during the time covered by 
this suit. I think I had ceased my engagement 
with Dr. Miller at the time the complaint in this 
action was filed, September 7th, 1893. About 
two or three months of the time covered by this 
suit, I was engaged in the publication of "Fe- 
uiina." I had known Miller for a number of 
years. I do not know when I first consulted with 
him about the publication of the book ; I think 
about May, 1893. 

Q. You have testified you went into the busi 
ness in May, 1893. Did you have a preliminary 
165 discussion with Miller ? 

A. I had talked with him several times, yes. 
I went into the business a few weeks after I be 
gan the discussion of the enterprise with him. I 
had had conversations with him a number of times, 
it might have been as far back as a month or two ; 
it may have been as far back as April or March, 
I don't think further than that, but I would not 
say. My impression is it was not further back 



58 

1 66 than March. I have known him a number of 
years and have seen him in the office of the His 
tory Company. He never went there to see me 
about the publication of "Femina" by the His 
tory Company. He did not come to see me in 
the office of the History Company in July, 1892, 
in reference to the publication of that book. I 
am positive I did not tell him in the office of the 
History Company in July, 1892, that I would 

advise him not to have his book published by the 

167 

' History Company as it was about to go to pieces. 

I never at any time made him a statement that 
it was about to go to pieces, and that I would ad 
vise him not to have anything to do with it. 
While 1 was at work on this book of " Femina," I 
considered the contract set out in the complaint in 
this action as binding upon me. I considered that 
the History Company was entitled to call on me 
any time. I have always been ready and am 
ready to-day to render services and consider that 
the History Company was entitled to call upon 
me any day to perform services as manager for it, 
and it was so understood by Dr. Miller that I would 
make no arrangement with him that was not sub 
ject to the call of the History Company. I con 
sidered that all the time I was with him, this 
contract was remaining in full force and effect for 
its full term, and that the History Company was 
entitled to call upon me at any time. 



59 

169 (Witness is shown press copy of a letter ad 
dressed to Professor J. R. Campbell.) 

Witness continuing : "This is a press copy of a 
letter written by me as manager of the 'Femina' 
Company," and the following portion of such let 
ter is offered and read in evidence: 

"1018 VALENCIA ST., SAN FRANCISCO, CAL. 
MY DEAR SIR AND FRIEND: 

Your esteemed favor of June 8th reached me in due 
course, and I was very glad to hear from you. You will 
note by the above that I am no longer at the History 
1 7 Company. I have an enterprise on hand to which I shall 
devote my entire attention just as soon as I am free from 
the History Company and I hope thac will not be very 
long, for I expect to get my second and large suit to trial 
within the next few days; at any rate, I propose to free 
myself so that I can do business again." 

Q. You say, notwithstanding that declaration 
to your friend, Professor Campbell, you under 
stood you were in the employment of the History 
Company and liable for a period of six or seven 
years after the writing of this letter, to be called 
upon to perform services as manager ? 

A. Any day in the world when the History 
Company called upon me to come, I was ready to 
go ; yes, I said I hoped to be free, and I hope so 
still. 

(A press copy of a letter written to Mrs. L. 
Owen is shown witness.) 

Witness continuing : The signature to that let 
ter is mine. This is a copy of a letter addressed 



6o 

172 by me to Mrs. Owen on July 7th, 1893. This 
was the month of July, 1893, and I was endeavor 
ing to obtain compensation from the defendant in 
this suit. 

(A portion of the letter referred to was offered 
and read in evidence, as follows :) 

" I am pleased to tell you that everything looks well, 
ai d best of all, that I am now free so that I can devote 
my whole time to the business without any interference or 
trouble. We have plenty of books on hand and can fill 
jy- orders promptly. Our second lot of bottles have arrived, 
so there will be no delay as regards medicines. We are, 
in fact, supplied with everything but the thermometer, 
and this will be here soon." 

Q. Notwithstanding this declaration to Mrs. 
Owen, in this letter, you claim you were then in 
the employment of the History Company under 
this contract ? 

A. Yes, it was so understood. 

(Press copy of another letter shown witness.) 
174 WITNESS : This letter was written by me. 

(A portion of the letter dated July 10th, 1893, 
addressed to Honorable E. W. Davis, Santa Rosa, 
is offered and read in evidence, as follows :) 

" Dear Mr. Davis: 

As you will notice by this letter 
head, I am free again to engage in business and I can as 
sure you it is very gratifying to me." 

Q. And you were seeking compensation at the 



6i 

175 rate of over ten dollars a day from defendant for 
twenty-one days more of the month of July ? 

A. I stood ready to perform my duties at all 
times, and stand there to-day. 

Witness continuing . I could not tell you 
when the arrangement between Miller and me 
came to an end ; it came to an end because I de 
cided not to go on with the business. It termin 
ated by selling my interest to Miller. No part 
nership existed between us. We had a verbal 

176 

understanding ; we never consummated it ; it was 

simply a verbal understanding. The verbal un 
derstanding was that there was to be a partner 
ship at some time in the future, but it never was 
done in fact. 

(Paper handed to the witness :) 

I have seen this paper before ; the signature to 
it is mine. 

(The paper is offered in evidence and read. It 
177 is in the words and figures following, to wit :) 

" WHEREAS, the partnership existing between John A. 
Miller, party of the first part, and Nathan J. Stone, party 
of the second part, heretofore existing under the firm 
name of The Femina Company, has been dissolved by 
mutual consent, and said party of the second part for a 
valuable consideration, the receipt whereof is hereby 
acknowledged, has sold, transferred and set over unto the 
party of the first part all the right, title and interest of 
the party of the second part in and to all the property 
owned, used and controlled by and in said partnership 



62 

178 and the business thereof, including all books, electrotype 
plates, charts, medicines, medical appliances, papers, cor 
respondence, office furniture, moneys due from agents, 
good- will, etc., used in and belonging to the said The 
Femina Company; and each of said parties having set 
tled, satisfied and adjusted all claims and demands upon 
the other; 

Now THEREFORE, in consideration of the premises, each 
of the said parties does hereby for himself and his legal 
representatives release and absolutely and forever dis 
charge the other of and from all claims and demands, 
actions and causes of actions of every name and nature, 
so that neither of them shall have any claim on the other, 

179 directly or indirectly on any contract or supposed liability 
or thing heretofore undertaken, done, or omitted to be 
done from the beginning of the world to this day. 

In witness whereof, the said parties have hereunto 
set their hands in duplicate this 21st day of October, 1893. 

JOHN A. MILLER 
N. J. STONE. 
In the presence of: 
W. A. METSON 
F. W. VAN REYNEGOM." 

[Endorsed:] " Mutual Release between John A. Miller 
and N. J. Stone." 

1 80 Witness continuing : I say there never was any 
partnership between us. There never was any 
agreement or anything submitted in writing. 
That term was used, I suppose, as a legal term 
in dissolving and winding up the matter. I paid 
a certain amount of money and he paid a certain 
amount of money. 

(Another paper shown witness.) 
WITNESS : That paper was also executed by 
me. 



63 

181 (The paper was offered and read in evidence 
and is in the words and figures following, to wit:) 

l< THIS INDENTURE, made this 21st day of October, A. 
D. 1893, by and between N. J. Stone, of the City and 
County of San Francisco, State of California, party of the 
first part, and J. A. Miller, of the same place, party of 
the second part, 

WITNESSETH: That for and in consideration of the sum 
of $10 lawful money of the United States to him in hand 
paid, the receipt whereof is hereby acknowledged, the 
party of the first part does hereby sell, assign, transfer 
and set over unto the party of the second part all of his 

182 right, title and interest in and to all of the partnership 
property owned or controlled by the partnership heretofore 
existing between the parties hereto, under the firm name 
and style of the Femina Company, including all books, 
electrotypes, plates, charts, medicines, medical appli 
ances, papers, correspondence and office furniture, money 

due from agents, and the good-will of the business here 
tofore carried on by said Femina Company, with all the 
appurtenances thereto. It being understood and agreed 
between the parties hereto that the said party of the 
second part accepts said property, and agrees to pay and 
discharge all debts, claims of any kind, nature or char 
acter now existing against said Femina Company, as 
x 3 shown by the statement annexed hereto. 

In witness whereof, the said parties have hereunto set 
their hands and affixed their seals this 21st day October, 

1893. 

Executed in duplicate, 

N. J. STONE 
JOHN A. MILLER. 
In the presence of: 
W. A. METSON. 
F. W. VAN REYNEGOM. 

The following is a list of all the bills against the 
Femina Company of which N. J. Stone, the party of the 



64 

184 first part, has any knowledge, and which are referred to 
in theBill of Sale to which this is attached. 

Payot, Upham & Co $ 2.01 

Whitall, Tatum & Co 93.41 

Whitall, Tatum & Co 199.71 

Carrick, Williams & Wright 3.00 

Payot, Upham & Co 75 

Payot, Upham & Co 12.25 

F.G.Norman. . .-. . 2.90 



$305.03 

Together with bills for cartage, rent of office, amount 
unknown to the party of the first part." 

-o- [Endorsed:] "Agreement between Nathan J. Stone 
5 and John A. Miller." 

Witness continuing : I must have been in 
business with Miller as long as two or three 
months, and it might have been six months. I 
do not think it began as early as the month of 
January, 1893 ; I am quite sure it did not. That 
would be my- impression. The business of the 
Femina Company was out on Valencia Street, and 
in my opinion we were there three or four months. 
186 I left there finally when those papers were signed. 
I was there only off and on for two or three weeks 
before those papers were signed ; I was there 
only occasionally. My name was on the door 
there as manager all the time we were there. I 
may have been there a week or more before my 
name appeared on the door as manager ; I was 
not there a month or two as manager before that, 
and that impression is very firmly fixed on my 



65 

187 mind. The last time I saw Miller before going 
to the office of the Femina Company to become 
manager of that business, was at his house. The 
Femina Company was engaged in the publication 
of a literary work ; and the History Company 
was also engaged in the publication of literary 
works. I never took Miller to any other concern 
to have his book published, nor did I ever take 
him to any other publishing house ; I never took 

him to the office of the Pacific Publishing Com- 

188 

pany. That Company was selling subscription 

books, and I think was composed of A. S. Latham 
and Mr. Hebert. The partnership papers are so 
drawn. I was in the habit of going to the office 
of that Company occasionally. I never took Dr. 
Miller to Mr. Hebert at the office of the Pacific 
Publishing Company while I was in the employ 
ment of the History Company. I never saw 
Hebert and Miller together. I never in my life 
1 80 s Pk e to Miller about Hebert and Latham. In 
these papers which have been read, there is some 
reference to medicine and medical appliances ; 
they were medicines put up by Dr. Miller, and I 
was selling them in connection with the publica 
tion, with the book. When the arrangement was 
made between Miller and me, I don't know that 
there was any definite arrangement as to the time 
which it was to last. We never made any ar- 



66 

190 rangement ; we never completed any arrange 
ment ; we never entered into any partnership ; 
never drew any papers ; never had any under 
standing. 

Q. In this particular case you dissolved a 
partnership that never existed ? 

A. That was the term used. The under 
standing between Miller and me was that we 
were to divide the profits of the business between 
us, and we were to share the losses between us. 
I had had some experience in business. I say, 
no arrangement was ever completed between 
Miller and myself with regard to profits or 
losses, or any document drawn in any way, shape 
or manner. 

Q. You mean to say you put yourself in the 
position on the 21st of October, 1893. of having 
executed a solemn document declaring a partner 
ship was dissolved, which you say never existed ? 
102 A. That is the term which was used. I say 
we never had made any agreement, or never had 
submitted anything to writing. Those things 
were not fixed between us. There wasn't any 
arrangement. I did not draw those papers. I 
signed them, as I supposed, necessary papers in 
order to protect me hereafter ; to wind up the 
proposition. I had bought some merchandise 
that wasn't paid for, and my name was connected 



6 7 

193 with the enterprise. I thought by signing these 
I would not become liable for anything because it 
simply stated Dr. Miller was to pay the debts. 
That was put in the document that was drawn 
between us, and considered best to be drawn and 
signed. 

Q. The liability you wanted to be released 
from was future liability in the partnership ? 

A. No, sir; it was to wind up. I wanted to 

be released from any liability that might come 
104. 

up in the future. The last time I devoted to 

that business was a few weeks before that paper 
was signed. 

Q. Up to that time you had been quite 
actively engaged ? 

A. Well, the books will show. He kept 
books and they would show about the time. As 
an employee of the History Company I had charge 
and was general manager, and had charge of it to 
IQC a very full extent until 1889; after that, my 
duties were limited, that is, I was circumscribed 
somewhat in them. I did not say that defendant 
had done everything required to be done by him 
under the agreement. Outside of the payment of 
my salary, since May or June, 1892, Mr. Ban 
croft had not done everything which he agreed 
to do under this agreement. He circumscribed 
my duties. The scope of my duties are not as 



68 

196 large as it agreed they should be, and they are 
not as large as they were. But I don't remem 
ber anything else. I will not say there was not. 
I don't remember ; I cannot state anything else 
to the jury now. This salary of $350 per month 
which was paid me by the History Company for 
a period of seven years was paid me by the treas 
urer of the company. I knew it was being^ 
charged on the books of the History Company to 
the salary account. It was not charged to defen- 
dant, and his name was not connected with it. I 
was quite familiar with every detail of the busi 
ness. The treasurer charged my salary to the 
salary account. I was quite familiar with all 
the details of the business and knew my salary 
was being charged up and carried as a salary ac 
count. It was one of the expenses that were 
deducted before defendant or I participated in 
any profits. Subsequent to the 1st of September,. 
1892, I went to the office of the History Com 
pany early every day. I was not absent unless 
detained by sickness. I was there most of the 
time each day. I went there about eight o'clock 
in the morning. Subsequent to the 1st of 
October, 1892, I averaged several hours a day 
there. I did not get there at eight o'clock dur 
ing the month of October every day ; except 
wfren I was down at the farm I was there at 



6 9 

199 eight o'clock. When I was at the farm I couldn't 
get there until nine o'clock. I don't know 
whether I was at the farm during October or 
not ; if I was not at the farm I almost invariably 
arrived at the office at eight o'clock or there 
abouts and remained until evening. I remained 
in the evening until about half-past four or five 
o'clock, somewhere along there. During the 
month of October, 1892, I spent six or seven 

hours a day in the office, or more than that. I 

200 

did not keep any record of it. During the 

month of November I stayed about the same 
time. Not so much during the month of De 
cember. During the month of November 
I was there sitting still most of the time. 
The perambulations of my desk began in July. 
It wasn't moved but once while I was there. 
That was when defendant pushed it. They 
took advantage of my absence to move it. De- 
2OI fendant pushed the desk in July, but I could 
not tell the date. I continued to go there every 
day after that and discharge my duties to the 
best of my ability. My desk was taken upstairs 
towards the latter part of December, before it 
was placed in the position where I could not 
work, and was in a draught. It was taken up, 
stairs and brought back and put in that place. 
The duties I performed in September, October 



2O2 and November were sitting around waiting. It 
was rather tedious, and not as easy as managing 
the business ; it was very little work. I would 
have been willing to have gone there at eight , 
o'clock in the morning and stayed until five o'clock 
at night if my salary had been paid, but I would 
rather have managed the business. The reason 
I left was not because my salary was not paid. 
My desk was put there, my chair was taken 
away, and ink was poured over my desk, and I 
^ was subjected to every indignity that it was pos 
sible for one man to inflict upon another. I con 
sidered it wasn't in duty bound to my family and 
myself to stay there in that draught and get a 
cold, and I so informed Mr. Dorland that I 
couldn't stay there unless he changed the desk. 
I couldn't sit on the desk. At that time my 
desk was out near the side door at the head of 
the stairs. The rollers were not put back on the 
204 desk, they are not put back to this day to my 
knowledge. I could have moved the desk with 
extreme difficulty if I had seen fit, but there was 
no place to move it unless I got up in front, and 
Mr. Dorland forbade my going there. Mr. Dor- 
land is dead. I was told by Morrison I had no 
right there. This was in July, 1892, but not 
withstanding that I continued to go there and 
discharge my duties long after that. I did not 



7* 

205 act upon that suggestion made to me by Morri 
son. With the exception of that statement made 
to me by Morrison, I don't remember that any 
living witness told me that any obstacle would be 
thrown in my way there. 

RE-DIRECT EXAMINATION. 

I found the obstacles. They were sufficient to 
prevent me from doing the work I had been doing. 
In relation to the business with Miller, I was 
simply engaged in negotiating about the business, 
was about to enter under a contract, and during 
the negotiations I had purchased some things and 
became liable for them under the expectation of 
-making a contract with him. I never did com 
plete any contract with him, and at a certain 
stage of the negotiations, I concluded not to enter 
into the business or any engagement, arid having 
reached that conclusion I signed some papers, the 
drawing of which I entrusted to my attorneys 
and the attorney for Miller, and the papers that 
are introduced here are what I was requested to 
sign by my attorney and others, and that is the 
reason I signed it, trusting in their judgment to 
protect me from all liability in my negotiations. 
The papers were made by my counsel and signed 
them at the request of my counsel in the presence 
of both my counsel and the counsel for Miller. 



72 

2o8 Question by plaintiff's counsel: State whether 
you relied upon your own judgment, or the judg 
ment of your counsel in signing the document 
containing the words about the partnership? 

This question was objected to by defendant on 
the ground that it was immaterial. 

The objection was overruled by the Court, to 
which ruling defendant excepted. 
Exception No. 17. 

A. I relied entirely upon the judgment and 
advice of my counsel. I understand the differ 
ence between an ostensible partnership and one 
in fact. 

Question by plaintiff's counsel : State the 
reasons why you signed those papers in full ? 

A. I signed that paper because my attorneys 
requested me to do so. I did not read either of 
them before I signed them. 

Witness continuing : I employed counsel to 
2io bring those two suits against the History Com 
pany, the complaints in which have been offered 
in evidence. They advised me to bring the suits 
against that company. 

Question by plaintiff's counsel : State whether 
they afterwards advised you that was a mistake ? 

This question was objected to by defendant on 
the ground that the suit is still pending against 
the History Company, as they have never been 



73 

2ii dismissed. The presumption is he intends to 
prosecute it. The witness cannot testify to in 
structions given to him by his counsel. The ob 
jection was overruled by the Court, to which 
ruling defendant excepted. 
Exception No. 18. 

A. Yes. 

Question by plaintiff 's counsel : Why did 
you bring this suit, knowing that you had com 
menced two suits against the History Company 

25 Jt 2$ 

for a portion of the money involved in this ? 

This question was objected to by defendant on 
the ground that it was irrelevant and immaterial. 

The objection was overruled by the Court, to 
which ruling defendant excepted. 

Exception No. 19. 

A. The counsel that brought these suits 
against the History Company for me, afterwards 
advised me that these suits were against the 
2I 3 wrong party, and then commenced this suit for 
me, and I followed the advice of my counsel in 
the matter as to who was liable, and relied upon 
that. 

Witness continuing : I performed the services 
which I did perform for the History Company in 
pursuance of my agreement with the defendant. 
I understood by the agreement that the business 
was to be conducted as the History Company and 



74 

314 that I was to perform these services for defendant 
under authority from that Company. All I did 
was according to my judgment under and in pur 
suance of this contract. I have never made any 
contract or agreement with the History Company 
in any shape or form. I was elected Vice-Presi 
dent of that company. I understood I was to 
have the management of that company under 
this agreement. 

Q. And in order to perform your services for 
and in the name of the History Company, under 
this agreement, how could you get any authority 
to do it except by the by-laws? Did you ever 
have any ? 

A. Not any. 

(The following by-laws of the History Com 
pany were then offered and read in evidence by 
plaintiff:) 

" ARTICLE 7. 

PRESIDENT. 

Section 1. The President shall preside at all meetings 
of the Board of Directors and stockholders. He shall 
sign all certificates of stock, and all contracts and other 
instruments in writing, which have first been approved 
by the Board of Directors. He shall call the Directors 
together whenever he deems it necessary. He shall have, 
subject to the advice and control of the Directors, the 
general superintendence of the affairs of the Company, 
and he shall perform such other duties as may be required 
by the Board of Directors. 



75 

217 ARTICLE 8. 

VICE-PRESIDENT. 

Section 1. In the absence of the President, the Vice- 
President shall perform his duties, and he shall perform 
such other duties as may be required by the Board of 
Directors." 

Defendant has been President of the History 
Company from the date of its incorporation up to 
the present time, unless he has recently resigned. 
When these by-laws were adopted, N". J. Stone, 
O. A. Stone, H. H. Bancroft, M. G. Bancroft 
and Kate Bancroft were the stockholders. O. 
A. Stone was my wife, and M. G. Bancroft and 
Kate Bancroft were the wife and daughter, re 
spectively, of defendant. There was no stock 
issued at the time the by-laws were adopted ; it 
was issued shortly after. I was to have ten per 
cent of the stock. The defendant owned the 
whole of it at the time he agreed to convey ten 
per cent to me. There were 10,000 shares in the 
2I o company of the par value of $50 each, and I had 
ten per cent of that. My wife had ten shares 
which were given her to qualify her to act as a 
director. Mrs. and Miss Bancroft had ten shares 
each, also given to them to qualify them to act as 
directors. I learned this from the defendant. 
Defendant and I at that time directed the affairs 
of the company. The by-laws providing for a 
salary of $350 per month for the salary of the 



7 6 

220 Vice-President was repealed, I think, in June, 
1889. I received $350 per month salary during 
May, June and July, 1886, before the Articles of 
Incorporation were drawn. 

Q. Who paid you that money ? 

A. The bank account was opened for the 
History Company by H. H. Bancroft, with the 
Tallant Banking Company. I obtained the 
money by a ckeck from defendant. Nobody else 

was authorized to sign the check until after the 
221 

incorporation. When we drew money from the 

bank, defendant signed the checks up to the time 
of the incorporation. 

Q. After the incorporation, did you get your 
$350 ; how did you get that money ? 

A. The checks were drawn by the History 
Company, by H. H. Bancroft, President ; or by 
the History Company, N. J. Stone, Vice-Presi 
dent, and paid by the Treasurer. That was up 
222 ^0 the time of the repeal of the by-law allowing 
the Vice-President $350 a month. I received 
salary after the repeal of the by-law allowing the 
Vice-President $350 per month just the same as 
before ; it was paid by the Treasurer. There was 
never any other resolution or action that I am 
aware, fixing the salary of the Vice-President by 
the Board of Directors. 

Q. Then the fact is, from the time of the re- 



77 

223 P ea l f that by-law, you received your money, the 
same amount, and by the same means, up to the 
time when they refused to pay it ? 

A. To June 30th, 1892. 

Q. Do you know whether the Board of Direc 
tors and Mr. Bancroft knew how much, and how 
you were receiving this money ? 

A. Yes, sir. 

THE COURT : You say the salary check was 

drawn either by you or by defendant ? 

224 

A. No, sir ; I said all checks were drawn, 

that all checks of that department after the incor 
poration, were signed by me, nearly all the checks 
for the Company ; occasionally Mr. Bancroft 
would sign one. 

Q. They were signed either by you or by Mr. 
Bancroft ? 

A. Yes, sir. 

Mr. REDDY : Q. The accounts were kept, and 
22 c they would show how much you were receiving, 
and the checks and stubs would show how much 
money you received from the bank ? 

A. Yes, sir. Defendant and the Board of 
Directors knew each and every one of those trans 
actions, because we had yearly statements show 
ing the entire transactions of the business, just 
every dollar that was paid out and who it was 
paid to, and every dollar that was received. De- 



226 fendant and the Board of Directors would know 
how the money was drawn out, because the by 
laws provided for it, and the money was drawn 
out strictly in accordance with those by-laws. 
.The money was drawn according to the original 
by-laws ; when we drew it from the bank, all 
checks were signed in the same way, up to the 
end of June, 1892. At that time this notice was 
served upon the bank that I was not authorized to 
draw. I was the possessor of the stock. I was 

22 7 the holder of it. Mr. Bancroft issued it to me, 
and handed it to me on the 20th of October, 
,1886, and I have had it in my possession ever 
since. It entitled me to receive, and I did re 
ceive, fifteen per cent. 

v'Q- Why did you vote to take your name off 
the letter-heads, if it was disagreeable to you ? 

This question was objected to by defendant on 
the ground .that it was irrelevant and immaterial. 

22 g The objection was overruled by the Court, to 
which ruling defendant excepted. 
Exception No. 20. 

A. Because there was no use for me to vote 
otherwise. I will state further that defendant in 
his own handwriting requested that this resolution 
should be passed. I discussed these resolutions 
wi h defendant, and I told him that I thought it 
unwise, and would be an injury to the business, 



239 an d my prediction proved true, and the names of 
the officers were afterwards put back on the paper, 
and my name was put back, and at his request. I 
told him I would vote for all those resolutions if 
he insisted upon them. He insisted ; he wanted 
those resolutions passed, and I think I seconded 
every one of them and voted for every one. My 
name was afterwards replaced by defendant with 
out any resolution ; there was a resolution requir 
ing it to be replaced a long time afterwards; after 
^ they found the names were being used and no 
resolution authorizing them ; then a resolution 
was passed, and after that resolution was passed 
my name was again removed, but the names of 
the other officers were not. My name was re 
moved a second time when I was deposed. After 
all the names had been put back on the letter 
heads, a resolution was adopted authorizing them 
to be put back ; they were put back before any 
resolution was passed, by the request of the Presi 
dent. The men in charge were instructed to 
print letter-heads with the names on, and my 
name was put on by that order, and after that a 
resolution was passed. My name was not again 
removed until I was deposed in May, 1892, and 
after that it was not allowed to appear upon the 
papers. After this indignity, and the removal of 
my name, I still continued to perform my duties 



8o 

332 under my agreement. In May, 1889, I informed 
defendant and the directors that I would do what 
ever defendant directed, and I obeyed his orders 
as President whenever they were given to me in 
any form. I had a conversation with defendant 
at the Lick House three or four months ago. He 
said to me that he would state upon his honor 
that I had done for the History Company what 
he believed no other man could do; that he hadn't 
anything against me, and wanted me to take the 

2 33 sa l e o f this book the Book of the Fair because 
he believed I could do more for it than any other 
living man. My name was put upon the door as 
manager of the business with Miller, because I 
was the party there and had charge of the place, 
the only party there. While there I wrote the 
letters which have been offered in evidence here. 
I am not aware that that interfered in any way 
with the performance of my duties towards the 
History Company. During the time that I was 
deposed and my desk was moved about from place 
to place, I was practically not permitted to do any 
thing at the History Company. I was always 
willing to do it. There were no dividends paid 
by the History Company after I was deposed. 
Morrison still holds the office of Vice- President, 
but there have been no dividends. I said in 
reply to counsel on the other side, that defen- 



8i 

235 dant had performed all the acts on his part under 
this agreement, but I did not mean to include in 
that the payment of my salary. I was to be 
manager of the History business ; that was the 
agreement. I afterwards had 1 5 per cent of the 
stock of the History Company. The agreement 
was I was to manage the matter. Defendant 
allowed me to manage the business, except the 
restrictions which 1 have mentioned. He pre- 

, vented me from managing it by the restrictions 
230 

which I have mentioned, and in the manner which 

I have stated. 

Q. Did you ever understand you were dis 
charged or dismissed from that service? 

~A. I never was. 

Q. You never were dismissed? 

A. No, sir. 

Q. That is, by a formal statement ? 

A. No, sir. I had 15 per cent interest in the 
337 History Company and expected to be allowed to 
manage it the entire term mentioned in the agree 
ment ; I expected to have the entire and absolute 
management of it. Instead of that, some one 
else was put in to manage the business, and to 
take charge of my interest as well as the bal 
ance. 

RE CROSS EXAMINATION. 

The two suits which I brought against the 



82 

238 History Company were not prosecuted because 
my counsel advised me they were brought against 
the wrong party. I understand my claim is 
against defendant. I do not make or assert any 
claim against the History Company under this 
contract at the present time, except if it comes 
in afterwards ; I don't know what the legal status 
would be. I do not now intend to prosecute those 
two suits against the History Company unless 
my counsel advise me to do so. I do not expect 
to collect against two parties for the same ser 
vices. I am now suing defendant. 

Q. Do you now make and assert any claim 
against the History Company under this con 
tract ? 

A. I understand my claim is against defen 
dant. 

Q. Then you have no claim against the His 
tory Company ? 

2 A O A. I have no claim against the History Com 
pany. If the History Company serve notice that 
they expect my services again, I will go to work 
to-morrow morning. I will go to work on the 
demand of defendant and the History Company. 
I am ready to perform my duties to the History 
Company at any time, in the capacity that I was 
to perform my contract. 

Q. All the services you have rendered under 



241 this contract you have rendered for the History 
Company, have you not ? 

THE COURT : The witness stated that up to the 
time of the formation of the corporation he 
worked under that contract, and then continued 
to work under the contract for the corporation up 
to the time of his dismissal in the performance of 
his contract to December, 1892. 



242 D. R. SESSIONS 

was called on behalf of plaintiff, and after being 
duly sworn testified as follows : 

I reside in San Francisco. I am at work for 
- ihe Southern Pacific Railroad Company. I have 
known plaintiff seven years. I know where his 
apartments were in the History Company's build 
ing. I was at work with him most of the time. 
I went into the employment of the History Com- 

243 pany in February, 1885, and into the employ 
ment of the History Company, a corporation, as 
soon as it was formed. It was formed shortly 
after the fire; I believe in September, 1886. My 
work at that time was mostly attending to the 
correspondence of the company. I worked with 
Mr. Stone, so that I could observe what hours of 
labor he passed, and the manner in which he dis 
charge'! his duties. I was working there very 



84 

244 dose to plaintiff" all the time. My recollection 
is that his hours were about seven to six ; begin 
ning at seven in the morning. I have always 
taken plaintiff to be a man of nervous tempera 
ment, one who works with enthusiasm and fervor; 
in fact, it was the constant fear of those inter 
ested in the business that he would break down, 
and I remember telling defendant that plaintiff 
should go away to relieve his mind of the busi 
ness for a time, and defendant's reply was to the 
"^ effect that a man of his temperament could not 
be stopped, that they had to do their work in 
their own way; this was after I had been with 
the company a year or two. It was after the fire 
when we were having a good deal of difficulty in 
reconstructing the business. I ceased working 
for plaintiff in the Spring of 1892; I cannot fix 
the date definitely, because I had some unfinished 
accounts and business with the company, and I 

2 , did not stop going there at a fixed date. I think 
I assumed my present employment in June of 
1892. I think it was about that time that I 
ceased working with plaintiff. I think it was 
about that time that lie was deposed as Vice- 
President and Morrison elected; it seemed to me 
a very good time to go out. I left about that 
time. When I spoke about plaintiff's manner of 
performing duties, I mean during the entire 



s 

period that I was there ; that holds true as a 
general proposition. 

CROSS-EXAMINATION. 

I assumed another employment in June, 1892, 
but my connection with the History Company 
was not severed at once ; I was there very little 
after that time and had very little opportunity to 
observe plaintiff after that time. 

Defendant moved to strike out the testimony 
4 of this witness, on the ground that plaintiff was 
paid up to June, 1892, and that his conduct 
before that time had nothing to do with his 
recovery for services after that time, and that the 
testimony was not responsive to any issue raised 
by the pleadings. 

This motion was denied by the Court, to which 
ruling defendant excepted. 
Exception No 21. 

24.Q 

T7 

H. B. HAMBLT 

was called as a witness^ *t>n behalf of plaintiff, and 
after being duly sworn testified as follows: 

I reside in Sari Francisco and have resided 
there about ten fears. During that time was 
employed first by' A. L. Bancroft & Company and 
afterwards by the History Company. Went into 



86 

250 the employment of the History Company when 
it was incorporated in September, 1886, and re 
mained until February, 1892. Know the plain 
tiff. Remember that he was employed by the 
History Company. Was near him and saw him 
every business day. Sometimes he would be 
there when I reached the office in the momma:; 

O ' 

sometimes he came after I got there. Was quite 
familiar with the duties he performed. He per 
formed his duties very industriously and assidu- 

251 ously. 

Question by plaintiff's counsel : "Do you re 
member about how many hours a day he attended 
in his office ? 

This question was objected to by defendant 
on the ground that it was irrelevant and imma 
terial and incompetent. 

The objection was overruled by the Court, to 
which ruling defendant excepted. 

252 Exception No. 22. 

A. He was there on an average of six or 
seven hours every day. This was up to Febru 
ary 6th, 1892. I was not so familiar with his 
work after that. I had been engaged in this 
same business from July, 1884, up to the forma 
tion of the History Company in the department 
of Bancroft's Works, with plaintiff. There was 
no change nor slacking up in the energy or dili- 



87 

253 gence displayed by plaintiff in the discharge of 
his duties that I know of. Once in a while he 
would overwork and be a little sick, and would 
probably come a little later in the morning, but 
nothing to speak of. Sometimes he would work 
so hard he would become prostrated. I married 
the plaintiff's niece. 



DANIEL CRAWFORD 

** was called as a witness on behalf of plaintiff, and 
after being duly sworn testified as follows: 

I am sixte'en years old and reside in San Fran 
cisco. Have never been upon the witness stand 
before. I worked for the History Company, be 
ginning in February, 1892, and ending in Janu 
ary, 1893, up to February, a full year. Know 
plaintiff and defendant. Saw plaintiff at the office 
of the History Company every day during that 
time, from 8 o'clock to 5. Saw him there during 
the months of July, August, September, October, 
November, December and January every day. 
Received orders from defendant to take the cast 
ers off the desk of plaintiff. I did take two of 
them off ; I couldn't take the back casters off, be 
cause the drawers would fall out, and the desk 
was too heavy, and I could not get at the others. 
They were fixed in deeper than the others; they 



88 

256 were screwed in and the others were staved in. I 
did not make any report to defendant. 

CROSS-EXAMINATION. 

My duties at the History Company were to 
copy letters, and call for and deliver packages. 
I suppose defendant was there three or four 
different months at different times. I have 
seen him. I was there every day from Febru 
ary, 1892, to the end of January, 1893, be- 

357 ." 

ginning my services on the 1st of February, 1892, 

and working until the end of January, 1893. I 
think I saw plaintiff there every day during that 
time. I remember the fact that he was there 
every day from eight until five, because I dusted 
and did everything like that when I got in the 
office. He came in a little while after I did. I 
got there at half-past seven, and sometimes at 
seven. He arrived generally from eight to half- 

358 past eight. He remained sometimes until five 
o'clock, and sometimes he left at four o'clock. I 
cannot say that there was any time during that 
time that he was not there as early as half-past 
eight, and that he did not remain up to four 
o'clock, because I left at six o'clock, and don't 
remember of seeing him any later than eight 
o'clock. I got there about half-past seven in the 
morning, and remained until six in the evening. 



259 Plaintiff was there every day up to that time. 
He always got there as early as half-past eight, 
and remained as late as four o'clock. Sometimes 
he might have come in at nine o'clock, but never 
later than nine. He might have gone away at 
three o'clock, but very seldom. He never went 
away earlier than three o'clock, to my knowledge. 
During the entire time that I was there, there 
was no time that plaintiff was not at the History 
Company at least from nine o'clock in the morn 
ing until three o'clock in the afternoon. I don't 
remember his going away any earlier. I am pre 
pared to say that he was there not later than nine 
o'clock and remained until at least three o'clock 
^every day during the entire year I was there; he 
may have been away if he was sick, but that hap 
pened very seldom. During the time I was em 
ployed by the History Company, I went out to 
see plaintiff and told him I was told to take the 
casters off his desk. Of course, I didn't like to do 
it until I told him. Defendant told me to take 
off the casters. I don't know what time it was; 
it was in the night, the time for us to go home, 
about half-past five. It was during the latter 
part of my service there. I think it was a month 
or two before January, 1893; I think in the 
month of November, 1892. I think it was in 
November, 1892, because there was another boy 



90 

262 went to work there, and this boy went to work, I 
believe, in June, I think it was June or July that 
he went to work there ; he helped me take 
the casters off. I couldn't lift the desk myself, 
and he helped me to take them off. I think it 
was two or three months after he came to work, 
because he didn't know defendant; he hadn't seen 
him before that time, a couple of days before 
that. I could not say whether it was two or three 
months after he came there that he helped me to 
3 take the casters off; I know it was two or three 
or four months ; I know it was some months after. 
I am just as positive about my statement that 
plaintiff was there at the History Company's 
office every day from the 1st of February, 1892, 
until the 31st of January, 1893, from nine o'clock 
in the morning to as late as three o'clock in the 
afternoon, except the times he was sick, as I am 
that defendant gave me this direction. I am just 

264 as P os itive of the one statement as I am of the 
other. I am satisfied that I am not mistaken 
about either statement. Mr. Stone was at the 
office of the History Company on the 31st day of 
January, the day I quit. His desk was moved. 
He was working there doing different things 
around. On the 30th day of January he was do 
ing the same thing. Every day I saw him there, 
he was busy from nine o'clock in the morning until 



265 three o'clock in the afternoon. Different days I 
have been out he might have been there ; I no 
ticed him being there when I came back. I am 
pretty sure that he was always at work from nine 
o'clock in the morning to at least three o'clock in 
the afternoon, during the entire month of Janu 
ary, 1893, and during the entire month of Decem 
ber, 1892. He was at work at his desk ; but at 
one time he couldn't work at his desk, but he 
came there still. 1 did not take much notice of 
whether there was any difference in his attendance 
during the months of December, 1892, and Janu 
ary, 1893, as during the early part of my service 
there, I didn't take much notice of it, only the 
desk was moved and then his desk was moved 
back again. I am pretty sure his attendance was 
just as regular during the months of December, 
1892, and January, 1893, as it was in February 
and March, 1892. It was around January that 

267 he could not work at his desk, but he was still 
there. The desk was moved at different places, 
around from one to another. I would leave it 
there in the night, and come in the morning and 
it would be moved. That occurred four or five 
times I think. One evening I went away and the 
next morning when I came I found the top kind 
of taken out, the screws kind of taken out, a 
couple of screws on the top, and the desk lid had 



92 

268 been opened. The chair was taken away and the 
letter-basket. The desk was standing near the 
washroom where the gas-fixtures come up from 
the floor ; it was standing there, and was moved 
beyond the other desk. The other desk was 
twenty feet long ; it was moved about forty feet 
to the side of the other desk. I am pretty sure 
plaintiff was there every day ; that is my impres 
sion ; I am sure. 

269 

NYNA HAMBLY 

was called as a witness on hehalf of plaintiff, and 
after being duly sworn testified as follows : 

I reside in San Francisco and am the wife of 
Mr. Hambly, who has been called as a witness in 
this case. I am the niece of plaintiff. Prior to 
my marriage, I was employed by the History 
Company. I entered its service on the 18th day 
of February, 1890, I think, and remained until 
the last day of July, 1892. I was stenographer 
and typewriter, and was under the directions of 
plaintiff. I was acting as stenographer and type 
writer all of that time, except towards the last; 
then I had other work to do, but I was still under 
plaintiff; I still took his letters and did other 
work for him, but other work was assigned me. 
During the time I was there I saw plaintiff fre- 



93 

271 quently ; he was always there. Ofttimes he was 
there when he was sick and should not have been 
. there, but he always came down except when he 
was not able to come at all. If he was at the 
ranch he did not come there until nine, but he 
was usually there at eight and before eight, and 
often until as late as six ; we left at half-past five, 
and he was often there when we left. Some 
times we had to stay later, and he was there until 
,six. Usually, though, he left when we did, at 
' five o'clock, between five and half-past. In May, 
1892, I heard a conversation between plaintiff 
and defendant. I was very close to them, but I 
was running the typewriter, so I only heard it 
disconnectedly, but I heard defendant say to 
plaintiff he would beggar him and his wife and 
children. I heard him say, " I will beggar 
you and your wife and your children." Then I 
did not hear any more because I did not listen ; 

27-2 in fact, I did not listen to him until he came 
right up behind me, and Mr. Stone was on the 
other side of the desk. I could not see defen 
dant ; he was right back of me. 

CROSS-EXAMINATION. 

I certainly do feel an interest in this case. I was 
operating on the typewriter at the time I heard 
this conversation. Defendant stood right behind 



94 

274 me > an d plaintiff stood on the other side of the 
counter ; the counter, I should say, was about 
two feet wide, and defendant stood right behind 
my chair ; he was very near the counter. His 
back must have been towards me, and he was 
talking to plaintiff who was on the other side of 
the counter from me ; I should think plaintiff was 
four feet away from me, and defendant about two 
or three feet. During all this time I was operat 
ing the typewriter, but did not know what I was 

27 ^ 

writing from. 1 may have been writing from 

notes, but I was listening. I do not know 
whether I was writing some original matter ; I 
may have been simply making the typewriter go, 
but I don't remember the fact. I cannot tell the 
first of the conversation. They were in the pri 
vate office, and of course we could not hear any 
thing that was going on there. When they 
came out, I glanced around at them. Then Mr. 
Bancroft walked upstairs with Mr. Dorland, and 
then came back. Mr. Stone was there behind 
me, and he walked up to the counter there and 
spoke to Mr. Stone ; but then I did not want to 
turn right around and look at them. He said he 
would beggar Stone and his wife and children. 
That is the substance of it ; there were other 
things said, but I could not hear the words. 
Durino- the time he was uttering these words I 

O '--' 



95 

was operating the typewriter. I think my hear 
ing was acute enough, when I was sitting 
by the typewriter and operating it, to hear a 
statement made two feet away, because I was 
listening to it, and his tone of voice was a great 
deal louder than he usually speaks. He never 
raises his voice except when he is angry, and he 
was angry at that time. I do not know how 
loud the tone was, but I heard it. I do not know 
whether he uttered those words in the same tone 
' of voice as the balance of the conversation. Those 
are the only words I heard. I think there was 
some preliminary conversation in the office ; there 
was some loud talking, but we could not hear it. 
I could not say whether there was anything else 
said in the outer office ; they were right close to 
me when that was said. The substance of what 
defendant said was that he would make beggars 
of Stone, his wife and children. I do not know 
what else he said. I do not know whether he 
said he would make beggars of Stone, his wife 
and children, if Stone sued him. I did not hear 
him say that he would make beggars of Stone,, 
his wife and children if Stone sued him. I was 
examined as a witness in the case of Morrison vs. 
Stone, which was tried in the City and County of 
San Francisco. I was asked at that time to tell 
what portion of this conversation I heard. 



96 

280 Q. Did you not give this answer : ; ' I was 
writing on the typewriter at the time, so I did 
not hear ; I was quite close to them, but on ac 
count of the noise of the typewriter, I only heard 
what Mr. Bancroft said to Mr. Stone as Mr. Stone 
was coming out, and that was to the effect he 
would beggar him, make his wife and children 
beggars if he sued him." Did you make that 
answer at that time ? 

A. I could not say ; I do not know whether 
I did or not. I presume I did if it is on the 
record. 

Witness continuing : I do not remember now 
whether I heard anything said by defendant about 
suing him. 

Q. Why did you not, at that time, when that 
question was asked you, say you were listening, 
and that you were simply operating the type 
writer as a subterfuge ? 

2 g 2 A. I was not asked. I said at that time, that 
I was close to them, but, on account of the noise 
of the typewriter, I only heard what defendant 
said. I have not said that the noise of the type 
writer did not interfere with my hearing. It did 
interfere, so that I only heard the words I have 
told you I heard. I don't know whether Stone 
was standing still or walking when the statement 
was made to him. He had his overcoat on and 



283 was standing close to the door, and defendant was 
going downstairs, and came back and said that. 
I don't know whether defendant made that threat 
at that time and said he would carry it into effect 
if Stone sued him. It is a good while ago. I 
don't remember whether Bancroft said he would 
beggar Stone and his wife and children if he sued 
him. I may have remembered more at the time 
I was a witness a year ago than I do now. I 

have not been thinking about it a whole year. 

/ 

284 

ELEANOR HAYES 

was called as a witness on behalf of plaintiff, and 
after being duly sworn testified as- follows : 

I live in San Francisco. I am a stenographer 
and typewriter. I entered the employment of 
the History Company in 1888. I was there 
about four years and a half, up to November 
2 gr 30th, 1892. Know the plaintiff. As well as I 
can remember he was in attendance there every 
day during that time, with the exception of sick 
ness or something of that kind. I cannot recall 
when he was not present. I was employed there 
as stenographer and typewriter. Am acquainted 
with defendant. Saw defendant at Stone's desk. 
Saw him several times kick Stone's waste basket 
and send it flying' along the aisle, and kick his 



9 8 

286 office chair, and I saw him tumble the things 
over on Mr. Stone's desk and upset the ink bot 
tle. Stone was not present at the time. Defen 
dant put a saw horse on Stone's desk. A few 
moments before, I laid a bill on Mr. Stone's desk, 
and after Mr. Valentine got through with the 
desk, I went up to get a letter and found the ink 
dropped all over the papers and bill heads, and the 
little receptacle that Mr. Stone had his pens and 
rubbers in strewn over the desk. When defen- 
dant engaged in kicking the waste basket and 
kicking the chair his manner indicated anger . 
he acted spitefully, I thought. I heard the 
threat made by defendant to plaintiff. Defendant 
said, "Stone, if you sue me, I will beggar your 
wife and your children," and he used profanity. 
The profanity was muffled, but the rest of it I 
should judge he was speaking through his teeth 
in anger, in a spiteful, threatful tone. I saw 

288 when I came in the office in the morning to my 
desk that Mr. Stone's desk was removed several 
times to the end of the office, or to different por 
tions of the office. I should say the farthest dis 
tance that it was removed from the place where 
Mr. Stone used to keep it was about twice the 
length of this court-room, perhaps three times. 
It was removed to the extreme end of the Historv 
Company's office. I know that the casters were- 



99 

289 removed from his desk. I saw Crawford taking 
the casters off one evening and saw the desk 
turned upside down and both boys attempting to 
remove the casters when I left the office. The 
kicking by defendant which I have spoken of 
took place between the months of August and 
November, 1892. I left there in November, and 
it took place just before that. The threats which 
I have described I heard in the early part of the 
> year. I suppose it was July ; it was just before 
this trouble came. It was the first trouble, or at 
least the first I knew anything of or heard of. 
When Morrison took hold of Stone, he was in the 
private office, and I saw Morrison push him out. 
I cannot tell the time, but it was one of those 
three months. I do not know whether Bancroft 
was there ; he might have been in the private 
office, but I did not see him ; I simply saw Mor 
rison and Stone. I am not now in the employ - 

2 ment of the History Company. I am employed 
by Judge Thompson as stenographer and type 
writer . 

Mr. Morrison said to me that Stone was not 
working for the History Company. He said he 
had no authority there, that he was simply there 
as a spy. He did not say anything further that 
I can recall. 

CROSS-EXAMINATION. 

My deposition was taken in this case some 



100 

292 time ago at my residence in San Francisco. The 
substance of what Bancroft said to Stone was, 
"Stone, if you sue me, I will beggar your wife 
and children." That was all I could distinctly 
understand. Stone said, " You do your best," I 
believe. I saw the boys in the act of taking the 
casters off the desk. The desk was turned up 
side down and the gas was lighted, and they 
were taking them off. I don't know whether 
they got them off. The desk was turned. It is 

2Q2 

likely the desk was upside down, it might have 
been on its side, I cannot recall. It was either 
on its side, or it was turned with the casters to 
the ceiling. I do not think they could remove 
the casters any other way. I was here when 
Crawford testified about removing the casters. 
When I saw him, the boy was helping him tip it 
over. When I saw him it was being tipped. It 
was either on its side, or the casters towards the 
204 ceiling. As well as I can recall, the desk was on 
its side ; it may be that it was turned upside 
down ; I don't recall. I have an interest in this 
case. If I can help the plaintiff in any way, I am 
willinor to do so. 



F. C. STAIB, 

called as a witness on behalf of plaintiff, and after 
being duly sworn testified as follows: 



101 

295 I am a bookkeeper. I am now employed by 
the Will & Finck Company in San Francisco. 
Was employed by the History Company from 
July, 1886, to February, 1891, and also from the 
17th of March to the 16th of June, 1892. Know 
both the parties to this action. When I was at 
the office of the History Company the plaintiff 
was in attendance there every day. He was 
there every day and hour. My attendance was 
regular except when I went there the second 
time. I made an arrangement with Stone and 
Morrison that I was to get off every Thursday 
afternoon for a half day, but I think I was only 
off three or four of those Thursdays. All the 
balance of the time I was there. I always saw 
plaintiff there when I was there. Heard a con 
versation between plaintiff and defendant one day 
of an unusual character. They were in the in 
side office. I do not know what was going on 

207 there. The door opened, and plaintiff and defen 
dant came out, and defendant said, " Stone, you 
would not do that to me after all I have done for 
you;" and then Stone replied that he would see 
his attorney. I suppose they were talking about 
some law suit, and defendant said, " If you do, I 
will make beggars of you all." I don't know as 
those are the exact words, but that is the sub 
stance of it. That is as I remember it. This 
was about the middle of May, 1892. 



IO2 
298 CROSS-EXAMINATION. 

What first drew my attention was Bancroft's 
statement, " Stone, you would not do anything 
like that after all I have done for you ; " some 
thing like that. And then Stone, I think, re 
plied, he would see his attorney, or something to 
that effect, and Bancroft replied, "If you do I 
will make beggars of all of you." That is about 
all I can remember that was then said. I was 
about forty or fifty feet from Stone and Bancroft 
when the conversation took place. Mrs Hambly 
was twenty feet from me and Miss Hayes was 
twelve feet from Mrs. Hambly. I was back of 
the counter and Mrs. Hambly was outside of the 
counter, and Stone and Bancroft were outside the 
counter, arid Miss Hayes was outside the coun 
ter. Mrs. Hambly was at least twelve feet from 
Stone and Bancroft, and Miss Hayes was at least 
twelve feet further, making twenty-four feet from 
them. I am not positive whether both Stone and 
Bancroft were outside the counter. They were 
coming through the door when he used this lan 
guage, and the door was outside the counter. 
My best recollection is that all of the parties 
were outside the counter when the conversation 
took place. As near as I can recollect, I think 
Mrs. Hambly and Miss Hayes were present. I 
think there were other parties there too. Mrs. 



103 

joi Hanibly was about twelve feet from Mr. Ban 
croft. Bancroft's tone of voice was loud enough 
so I could hear him. It was above his ordinary 
tone of voice conversational tone. 



W. H. HARTWELL 

was called as a witness on behalf of plaintiff, and 
after being duly sworn, testified as follows : 

I reside in San Francisco. I was with the old 
firm of A. L. Bancroft & Company up to the 
time of the fire in April, 1886, and was employed 
by the History Company from that time until 
May 16, 1892. I know both the parties to this 
action. During the time I was with the History 
Company I was Secretary and Treasurer a por 
tion of the time, and Treasurer and Assistant 
Secretary the remainder of the time. During the 
time I was there, I knew whether Stone was in 
-5Q-2 attendance on the business of the company. His 
attendance was very regular, except at times 
when he was sick or had leave of absence. I 
should say he was very diligent. I had an op 
portunity of observing the manner in which he 
performed his duties and all that, and I should 
say he was a man of very prompt and diligent 
habits, always on time in the morning, and ex 
hibited diligence in his work until it was time for 



104 

304 him to go home. He attended strictly to his 
business while he was there arid o-ot through a 

O O 

great deal of work, and could keep a good run of 
the business, too. I think I was Secretary and 
Treasurer until May, 1890, and then Mr. Morri 
son was admitted in the business and I resigned 

o 

as Secretary, and he was appointed to fill the 
place ; then they created the position of Assistant 
Secretary, which I filled in conjunction with the 
office of Treasurer. While I was Secretary and 
3 5 Treasurer, I was supposed to be under the orders 
of the Board of Directors. As they were not 
there a great deal of the time, or as they could 
not be in session all the time, and Mr. Stone was 
Manager, I received orders from him. Occa 
sionally Mr. Bancroft gave me orders. The reso 
lutions were passed in open meeting of the Board 
of Directors. Defendant brought out resolutions 
at different times which he wanted passed, and 
the matter was brought up in open meeting and 
passed. I think they were always passed with 
out exception. Sometimes there was discussion 
before their passage and sometimes there was 
not. I should say the business was run in gen 
eral as defendant wished it run. I remember 
that defendant brought up some resolutions with 
reference to the duties of officers and with refer 
ence to whose names should appear on the papers 
and that sort of thing. 



105 

307 (Witness refers to the Minute Book of the 
History Company.) 

The resolutions I referred to are numbered 33. 
The date of the meeting was June 5, 1889, but it 
was some time before that I saw the resolutions 
in the handwriting of defendant. I forget 
whether they were mailed to me or whether they 
were handed to me personally, but my impression 
is they were mailed to me by defendant. The 
original of the resolutions was written by defen- 

Q \ O i/ 

dant. I don't know that I could point out any 
other resolution which came to me in his hand 
writing, or which I knew were directed by him. 
Mr. Stone had the combination to the safe all the 
time I was there. I know it was changed after- 

O 

wards, because Mr. Dorland came down to the 
Tallant Banking Company, where I was employed 
dt that time, and asked me to change the combi 
nation. He asked me about how the combination 
309 was to be changed. It was a combination in 
which the lock was not opened, but a key was in 
serted and turned to a certain point, and then the 
combination changed from that point. I told him 
of certain papers in the safe which directed a per 
son how to change the combination. I also told 
him I would go to the office and show him if he 
wanted, and he told me he would like to have me 
do so. So I went to the office and we set the 



io6 

310 combination to the original direction and inserted 
the key, and I told him how to change the com 
bination and left him at that point. I think that 
was in the latter part of May, 1892. I should 
say Dorland was elected a Director of the His 
tory Company about a year before that. 

Question by plaintiff's counsel : State, if you 
know, if defendant ever countermanded any of 
Mr. Stone's orders in the business. 

This question was objected to by defendant on 
the ground that it was immaterial and irrelevant. 

Objection was overruled by the Court, to which 
ruling defendant excepted. 

Exception No. 23. 

A. I know that some time prior to my sever 
ing my connection with the company Stone 
ordered me to send some money to Colonel Hatch 
as an agent, and Mr. Bancroft told me I should 
not do it, and 1 referred the matter to Mr. Stone, 
3 12 and he said he would settle the matter, and I left 
it there, and the money was sent afterwards. I 
do not know that I could state any detail of any 
other order made by plaintiff which defendant 
countermanded. 

CROSS-EXAMINATION. 

Q. What was your business between May 
and August, 1886? 



107 

313 A. The fire occurred on April 30th, 1886, 
and I saw a notice in the paper next morning 
that A. L. Bancroft & Company would be con 
ducted on Geary street. 

Q. What were you doing between May and 
August, 1886? 

A. I was trying to explain where I had been 
at that time. I continued in their employ for 
about a month, and then I went to my home up 
in the mountains, and was gone three weeks, and 

^ came back and entered their employ again. It 
was called the History Company at that time. I 
was bookkeeper and cashier, and had the hand 
ling of moneys, and was in charge of the pay 
ment of salaries. During that time I paid Mr. 
Stone's salary. It was charged on the books to 
N. J. Stone's salary account, and was deducted 
as an expense before any dividends or profits were 
declared, and all dividends and profits in which 

-5jc Mr. Stone participated subsequent to the incor 
poration were paid after a deduction of all the 
expenses. The business, as it was carried on 
between May and August, 1886, was continued 
in the same set of books after that time. There 
was no change in the manner of carrying on the 
business at all, so that the expenses incurred 
between May and August, 1886, including Mr. 
Stone's salary, were deducted from the income of 



io8 

316 the corporation before any profits were declared 
or divided. I remember an order having been 
given by Mr. Bancroft to suspend the payment of 
a dividend at one time when he was absent from 
the city. I think he was in San Diego, and he 
wrote me a letter saying not to pay any more 
dividends until his return, or something to that 
effect, and his order was carried out. After that 
the Board of Directors met, but nothing was 
done about it. There was money on hand at 

^ ' that time, to the best of my knowledge, sufficient 
to pay a dividend. Some time after Mr. Ban 
croft returned, a dividend was declared, but I 
don't know whether it was a day or a week or a 
month after. Mr. Stone was a director and had 
one voice in the meeting. He and Mr. Bancroft 
were practically a unit so far as the resolutions 
were concerned. I remember one resolution 
where Mr. Stone made some dissent. That was 

- jg Resolution No. 32, providing for taking the names 
of officers off the stationery, but he assented to 
it finally, and voted for it, and it was passed 
unanimously. I think the resolutions were passed 
by a unanimous vote, or nearly so ; there were 
only two or three dissenting votes on Mr. Stone's 
part, and they were at the last meeting I attended. 
Mr. Stone frequently offered resolutions that 
were passed in regard to hiring an attorney, or 



319 appointing an agent for some field, or for divi 
dends, or something of that kind. I think the 
resolutions which he offered were invariably 
passed, without exception. 



JOSE M. TRIGO 

was called as a witness on behalf of plaintiff, and 
after being duly sworn testified as follows : 

I reside in San Francisco, and have resided 
^20 

there since 1890. I was born in Spain, and have 

been in the United States nine or ten years. 
Know both the parties to this action. Made the 
acquaintance of plaintiff in San Francisco on the 
21st day of May, 1890, and met the defendant 
the same day at his office in the History Com 
pany. I was brought by the History Company 
from New York. Mr. Morrison, the Secretary, 
employed me in New York. I remained with 
221 the company from that time up to the 15th of 
January or the 15th of February, 1893 ; I can 
not remember now when I sent the letter to de 
fendant saying that I should not like to work for 
him any more. I do not remember exactly, now, 
what time that was ; it was the 15th of February 
or the 15th of January, 1893. I have had dif 
ferences with defendant. I now have some liti 
gation pending against him. One suit is pending 



no 

322 in the United States Circuit Court, and two in 
the Superior Court of San Francisco. Those 
suits relate to business transactions in which I 
claim money and dignity from Mr. Bancroft. I 
met Mr. Bancroft in Mexico about the 6th or 
7th day of November, 1891, and also met Mr. 
Morrison there about the 10th of January, 1892. 
He was then, according to my knowledge, the 
Secretary of the History Company. I saw Mor 
rison and Bancroft together very many times 
and many times heard conversations between 
them about getting rid of Stone, and putting him 
out of the business. 

Question by plaintiffs counsel : Will you 
state the substance of the conversation, or con 
versations upon that particular subject ? 

This question was objected to by defendant on 

the ground that it was irrelevant and immaterial. 

Objection overruled by the Court, and the de- 

324 fendant excepts. 
Exception No. 24. 

WITNESS. The substance of all the conversa 
tions were the same. There were a great many 
of them; it was to put Mr. Stone out of the 
way out of the business of the History Com 
pany. This, I think, was about the end of De 
cember, 1891. Bancroft was then residing at the 
Iturbide Hotel, in the City of Mexico. He had 



Ill 

325 had some misunderstanding with Stone, of which 
I was not informed, but at the dining table, and 
everywhere we were together most of the 
time they were talking of Mr. Stone not being 
independent in his business, and not obeying the 
instructions given, and that was the tone of the 
conversations almost every day. Those were the 
principal subjects up to the 10th of June, 1892, 
when Mr. Morrison came to the City of Mexico. 
Then Morrison and Bancroft talked together 
3 about Stone. According to what I heard them 
say, the substance of it was that Stone had sold 
some stock belonging to the History Company to 
some parties, and had virtually made the sale 
~to himself, and that the stock had been sold for a 
third or fourth of its value. In many conversa- 
sations between Morrison and Bancroft, I heard 
the former complain about the conduct of Stone, 
and I heard Morrison ask Bancroft many times if 
he (Bancroft) had anything to do with the sale of 
the goods of the History Company, and Bancroft 
denied that he had. I knew much about the mat 
ter of my own knowledge, and Bancroft told me 
that he had instructed every body and all his em 
ployees in San Francisco to close the business and 
reduce expenses to the last notch. They decided to 
sue Stone, Morrison to bring suit on one side and 
Bancroft on the other side ; then I would also sue 



112 

328 Stone in order to put him in a corner, and reduce 
him to a nullity. It was decided to sue him in 
every way, on all side. The last time I heard 
their conversation was on the day of the depar 
ture of Mr. Bancroft and his family from the 
City of Mexico to San Francisco. That evening, 
just when we went to the cars to see them off, 
it was the conversation of both Morrison and 
Bancroft, to sue Stone as soon as Bancroft should 
arrive in San Francisco, and could round up mat 
ters so as to do it. That conversation was 
simply to sue Stone and get him out of the His 
tory Company in every way possible. I was em 
ployed by the History Company at that time 
when these conversations occurred. I was 
traveling for the sale of some school books pub 
lished by the History Company, but at the same 
time I was taking notes for writing up a book on 
the Resources and Probabilities of Mexico. 
These conversations began in December, 1891. 
The last conversation which I heard between 
Morrison and Bancroft in Mexico, took place on 
the evening that Bancroft left for the United 
States ; I think it was in February, 1892. I 
arrived in San Francisco on July 2, 1892. 
I knew, while still in Mexico, that Bancroft began 
suit against the plaintiff after his return to San 
Francisco I also knew that Morrison began suit 



331 against him after his return to San Fran 
cisco. After he returned to San Francisco, 
Bancroft told me I must sue Stone, and 
must look for a lawyer who would serve me, and 
that he would advance me the money for the suit. 
For some reasons I did not want to do it, though 
I professed a willingness to bring the suit. 

Question by plaintiff's counsel ; Did you get 
a lawyer. I ask you if you did in pursuance to 
Mr. Bancroft's suggestion, or instruction, get a 
33 lawyer to bring that suit ? 

This question was objected to by defendant on 
the ground that it was irrelevant and immaterial, 
and not responsive to any issue presented by the 
pleadings. 

MR. REDDY, Counsel for Plaintiff : I propose 
to go through the whole transaction between Mr. 
Bancroft and the witness. 

The objection was overruled by the Court, to 
,-- which ruling defendant duly excepted. 
Exception No. 25. 

A. I did eventually consult two lawyers, Mr. 
Mitchell and Mr, Eugene Deuprey, of San Fran 
cisco. 

Q. After the consultation with Mr. Mitchell, 
did you report to Mr. Bancroft ? 

This question was objected to by defendant, on 
the ground that it was irrelevant and immaterial, 



H4 

334 an d not responsive to any issue presented by the 
pleadings in the case. 

Objection was overruled by the Court, to 
which ruling defendant duly excepted. 

Exception No. 26. 

A. Yes, sir. 

Q. What did you report to Mr. Bancroft ? 

This question was objected to by defendant, on 
the ground that it was irrelevant and immaterial, 
and not responsive to any issue presented by the 
pleadings in this case. 

The objection was overruled by the Court, to 
which ruling defendant duly excepted, and there 
upon it was understood and agreed between coun 
sel and the Court that all of the testimony of 
this witness on this subject should be deemed to 
be objected to by defendant, the objection over 
ruled by the Court, and exception entered in de 
fendant's favor. 
^ Exception No. 27. 

Witness continuing : After I consulted with 
Mr. Mitchell, I reported to Mr. Bancroft that, 
according to Mr. Mitchell's opinion, I was not 
able to sue Mr. Stone for libel, because that of 
fense which had been furnished me was of Stone 
in the capacity of the company, which was, of 
course, private matter, so I had no case. When 
I informed Bancroft that I had no case, Mr. 



337 T. A. C. Borland was present, and he (Bancroft) 
asked Dorland to find a lawyer one of those 
lawyers that would bring the matter in such a 
shape as to give Stone a constant headache, and 
he suggested Mr. Eugene Deuprey, whom I con 
sulted. But Mr. Deuprey said that he could not 
undertake the case, and besides, that he never 
would undertake a case that would favor, 
directly or indirectly, such a bad man as this de 
fendant. I reported this to the defendant. After 

n8 

** that he did not talk about the matter any more, 

but he was very cool with me. Mr. Bancroft 
made me an offer to pay the expenses of a law 
suit that he was originating for me to bring 
against Stone. During the time I was in the 
employment of the History Company in San 
Francisco, I worked at the office from the time 
of my arrival up to the 15th of August, 1892, 
and I saw Stone around there most all the time. 
When I came in or was going out, I remember 
most of the time to have seen him there from 
the 15th of August up to November 25th, or 
something like that. I worked for the History 
Company, of course, but in my own home, 538 
Haight Street ; in fact, I used to go every day to 
the office, and, so far as I can remember, Mr. Stone 
was in and around from one place to another, and 
giving orders, or something like that. He was 



n6 

340 going from one side of the office to the other, or 
working at his desk. From the 25th of Decem 
ber, up to the time I was with the History Com 
pany, I was a great part of the time outside the 
office, looking after the manufacture of the Book 
of Resources, and going also to the library on 
Valencia Street. Then I had no occasion to be 
in the office much of the time, but I remember 
seeing Mr. Stone around there. 

Q. Did Mr. Bancroft ever speak to you about 

* not printing books or matters of that kind ? 

A. I cannot state the words said about that, 
as I was interested in the printing of some 
books. I remember well they were opposed to 
serving the orders that were received with those 
books, because he did not want Stone to receive 
anything from them. The orders were for the 
purchase of books 

Question by plaintiff's counsel : State all that 

14.2 was sa ^ m re ^ erence to the books, and if any 
thing was said concerning Stone? 

This question was objected to by defendant, on 
the ground it was irrelevant and immaterial, and 
not responsive to any of the issues presented by 
the pleadings in this case. 

The objection was overruled by the Court, to 
which ruling defendant duly excepted. 

Exception No. 23. 



117 

343 A. Defendant said that Stone should never 
receive the benefit of the book I mean the ben 
efit of the sale of those books, or the filling of 
those orders. 

Question by plaintiff's Counsel: State whether 
anything was said concerning Mr. Stone, other 
than what you have stated, after your arrival in 
San Francisco, with reference to getting him out 
of the business, or anything of that character ? 

This question was objected to by defendant on 
the ground that it was not responsive to any issue 
presented by the pleadings in this action. 

The objection was overruled by the Court, to 
which ruling defendant duly excepted. 

Exception No. 29. 

A. Defendant said Stone should not receive 
any profits or derive any benefits from the work 
that was going on in the History Company, and 
so far as I could understand, intended to deprive 
345 him of any benefit from the work to deprive 
Stone of any benefit of anything that might be 
received by the company. I had a conversation 
with defendant concerning a corporation called 
the California Book Company. 

Question by plaintiff's counsel : What was that 
conversation ? 

This question was objected to by defendant on 
the sf round that it was irrelevant and immaterial, 



u8 

346 and not responsive to any issue presented by the 
pleadings in this action. 

Plaintiff's counsel replied that he proposed to 
show that there was a conspiracy between the de 
fendant and Morrison to transfer certain of the 
assets of the History Company to the California 
Book Company. Whereupon the Court over 
ruled the objection of defendant, to which ruling 
defendant duly excepted. 

Exception No. 30. 

347 

Witness continuing: The conversation between 

Bancroft and me was that Bancroft, Morrison 
and some others of the directors of the History 
Company were to form a new corporation called 
the California Book Company, which was to take 
some of the works of the History Company and 
other works, and that the History Company 
would be deprived of those works, and Stone 
would not receive any benefit from them. There 
348 were a great many conversations of this charac 
ter. I was afterwards informed by Morrison that 
the California Book Company was formed, and I 
was also advised by defendant of that fact. 

Question by plaintiff's counsel : State whether 
you were informed by defendant as to whether 
any business of the History Company had been 
transferred to the California Book Company ? 



349 This question was objected to by defendant on 
the ground that it was irrelevant and immaterial, 
and is not an issue that can be tried in this case. 
The objection was overruled by the Court, to 
which ruling defendant duly excepted. 
Exception No. 31. 

A. I know of my personal knowledge that the 
publication of the Book of the Resources and 
Probabilities of Mexico was taken away from the 
History Company. I am the author of that 
book. I wrote it myself. 

Question by plaintiff's counsel: Who caused 
that book to be written Resources and Proba 
bilities of Mexico ? 

MR. McCuTCHEN, counsel for defendant : I 
would like to ask counsel on the other side, be 
cause I want it on the record here if there is not 
a case pending now in the Superior Court of the 
City and County of San Francisco wherein Mr. 
251 Stone is plaintiff, and wherein Mr. Bancroft and 
the History Company are defendants, where that 
very question is in issue, and I object to this 
question on the ground that it is irrelevant and 
immaterial, and not responsive to any issue pre 
sented for trial in this case. 

MR. REDDY : We propose to show that the His 
tory Company paid for the work on that book, 
and it belongs to the History Company ; it is part 



120 

352 of the History Company's property, and it was 
afterwards transferred to the California Book 
Company by the defendant and others connected 
with him. 

The objection was overruled by the Court, to 
which ruling defendant duly excepted. 
Exception No. 32. 

A. When I started the original book, it was 
to be published by the History Company. The 

History Company, through its directors, ordered 

353 

me to have circulars printed, and the expense of 

the publication, so far as I know, had been paid 
by the History Company, up to the date of the 
formation of the California Book Company. I 
furnished the ideas, and the History Company 
furnished the money, and the book was written 
by me, and prepared for publication, and the sale 
of it was transferred to the California Book Com 
pany by the orders of the so-called author of the 
book, H. H. Bancroft not the author, but the 
so-called author. I cannot state the exact date 
when the transfer was made, but it was some 
time in October, 1892, or November, 1892. 

CROSS-EXAMINATION. 

In the conversation that took place in Mexico, 
the understanding was that Bancroft was to sue 
Stone, and that Morrison was to sue him, and 



121 

355 that I was to sue him. I was a party to the con 
versation, but I was not a party to any agreement 
to sue Stone. I was not hired for that purpose. 
I said I would sue Stone at that time, but I did 
not agree to sue him, and I did not sue him. I 
recognize a difference between promising to do a 
thing and my agreement to do a thing a very 
great difference. I was going to sue Stone for 
libel. I do not know, and did not know at that 

time, what he had said about me, of my personal 

^ ^6 

knowledge, I never knew anything only what Ban 
croft and Morrison told me that Stone had said 
about me. When I went to see Mr. Mitchell and 
Mr. Deuprey, I showed them a memorandum of 
what I had been told Stone had said about me ; 
that 1 had misappropriated $600, and that my 
reckless way of doing business was hard for the 
History Company, and that I had misappropri 
ated $200 more of the moneys of the History 
Company ; those were the matters about which I 
went and consulted Mr. Mitchell and Mr. Deu 
prey. I had a good deal of feeling towards Stone 
at that time, and was disposed to fight him the 
first interview I had with him. I was advised 
that a good many more things had been said by 
Stone about me ; that he had said a great many 
uncomplimentary things. I knew that in order 
to bring suit against Stone for libel, I had to have 



122 

358 some writing signed by him ; I was told that that 
writing was in the copy books of Stone. I was 
ordered to make an investigation to see whether 
there was any such writing there ; I did make 
the investigation, but did not find the writing. 
The investigation was made some time in July, 
both before and after I went to Mr. Mitchell, and 
I did not find any such letters in the copy books, 
as I was told were there. I went to consult Mr. 
Mitchell and Mr. Deuprey because 1 was ordered 
to do so. I cannot tell whether I wanted to 
bring suit against Stone at that time or not, be 
cause I did not know the facts of my own knowl 
edge ; I did not know exactly what I wanted to 
do ; I did not know what the facts were, and was 
unable to find the facts, and I did not know what 
course to take. I repeated to the counsel that I 
consulted, the words told me by Morrison and 
Bancroft. I told them what Morrison and Ban- 
croft had told me. I took some letters to Mr. 
Deuprey, but they were letters which in my 
opinion were not good at all, and Morrison and 
Bancroft told me that they held the letter which 
was a good one. They gave me some of the let 
ters, but told me that they held still stronger 
ones back. I have not the letters in my posses 
sion now. At any rate they are not here. The 
letters which I had were ones which could be 



123 

361 construed in such and such a way, but they did 
not contain direct charges. Bancroft said he 
had one which would be a big gun for me to com 
mence suit ; but I did not show the big gun to 
either Mr. Mitchell or Mr. Deuprey. 

RE-DIRECT EXAMINATION. 

The big gun which Bancroft promised me 
did not materialize. I had been told of charges 
that had been made by Stone, and when I was 
informed they were in letter books written by 
him, I was referred to the letter books and was 
told to examine them, and that I would find the 
charges, but I did not, the letters were not there. 
I~examined several thousand. After a full ex 
amination of that number of letters, I found 
there was no direct charge against me. I was 
told by Bancroft that the rascal of a Stone, when 
he wrote a letter that was prejudicial to any one, 
.761 he copied it in a book that he himself was the 
only one that knew where the book was. He 
-never showed me that book. I never saw it. I 
believe it was the copies of the letters in that 
book that were the big guns. 



N. J. STONE, 

being recalled for further cross-examination, testi 
fied as follows : 



124 

364 I never introduced Dr. Miller to either of the 
persons constituting the Pacific Publishing Com 
pany. I never met him with any member of the 
Pacific Publishing Company. I never had a 
conversation with Dr. Miller and Mr. Latham, 
who was a member of that company, at Dr. Mil 
ler's residence in the city and county of San 
Francisco, nor did I ever have such a conversa 
tion under any circumstances. I never met Mr. 
Latham at the residence of Dr. Miller in San 
^ 5 Francisco. I never met Mr. Latham at any 
place in San Francisco with Dr. Miller. I never 
had any discussion with Latham with reference 
to the publication of Dr. Miller's book. I never 
consulted with Miiler in the office of the History 
Company at any time about publishing his book. 
I never had any conversation with Mr. O. H. 
Elliott at any time prior to the 1st of January, 
1892, in reference to the publication of Dr. Mil- 
ler's book. I think Elliott called at my residence 
during the year, 1892, but I do not think I met 
him at my residence in December of that year. 
I never had a word of conversation with him in 
relation to the publication of Dr. Miller's book 
in the year 1892, either at my residence or at any 
other place. I never told him at my residence, 
or at any other place, in the year 1892, that I 
thought of publishing or taking an interest in the 



125 

367 publication of Dr. Miller's book. I was perform 
ing my duties at the History Company during 
the whole of the year 1892. I do not remember 
whether in the year 1891 I had a conversation 
with Mr. Elliott in the office of the History 
Company concerning the business of that Com 
pany. I think I wrote him in August, 1891, re 
questing him to call on me at the History Company. 
I may have done so, I don't remember the date. I 
did not at any time or place state to Elliott that I 
would advise him not to go to work for the History 
Company because that company was going to 
pieces. I never made any such statement at any 
time or place, nor under any circumstances or 
condition. I never said to Mr. Elliott, prior to 
the 1st day of January, 1893, that I was going to 
publish or take an interest in the publication of 
Dr. Miller's book. My desk began to be moved 
around from place to place shortly after the 1st of 

160 Juty' 1892. At that time the furniture in the 
room occupied by the History Company was be 
ing moved from one place to another. At that 
time there were no improvements going on there; 
but some time later there were some shelves be 
ing put up. There was not anything being done 
when my desk first began to be moved. 

Q. You say towards the latter part of your 
visits there the desk was put in a place that was 



126 

370 inconvenient for you, what work was being done 
then ? 

A. I said yesterday the room was being filled 
up with the property of the Bancroft Company. 

Q. What was being done at the time you say 
your desk was moved ? 

A. Nothing, except that the Bancroft busi 
ness was being stopped. The company's business 
was being carried on there. 

Q. The work had stopped ? 

A. The work had entirely stopped. 

PLAINTIFF RESTS. 



DR. J. MILLER 

was called as a witness for defendant and, after 
being duly sworn, testified as follows : 

I am a physician and surgeon, engaged in the 
practice of my profession in the City and County 
of San Francisco, where I have been engaged in 
practice for eighteen years. I have my office and 
residence at No. 1137 Geary Street. Have 
known plaintiff about sixteen years, and have had 
business transactions with him. My first busi 
ness with him was in June, 1892. I had my first 
talk with him at the office of the History Com 
pany on Market Street. I showed him a book of 
which I was the author and solicited his advice 



127 

373 an d interest in the selection of a general agent. 
He told me at that time that the History Com 
pany was unreliable, and that he would not 
recommend me to place my book with it, but that 
he had a person in view whom he thought was 
the most suitable party I could get. I went to 
see him at that time because I knew he was con 
nected with the History Company, which was a 
publishing house. He told me he would see the 
party whom he had in mind, and that on Monday 

*' I should call around again. I did call on him 
two days afterwards at the same place the office 
of the History Company, at which time he told me 
he had seen his party, and that he was favorably 
impressed, and asked me when and where I could 
make an appointment to meet him. I made an 
appointment to meet him the following evening 
at my residence. That evening Mr. Stone called 
with a gentleman whom he introduced as Mr. 

o 

** r Latham. He told me that Mr. Latham was a mem 
ber of the Pacific Publishing Company, and that 
he was the party he had in view. That evening, 
after he had introduced Mr. Latham to me, we 
spoke about the merits of the work, and how it 
should be handled, and about the price, and the 
price I was to get. It was finally decided that 
Mr. Latham was to handle my book, and that I 
was to manufacture it and sell it to him for sev- 



128 

376 enty-five cents a copy. I had a conversation with 
Mr. Latham that evening in the presence of Mr. 
Stone as to the terms on which the Pacific Pub 
lishing Company, acting as general agent, would 
sell my book. That conversation must have lasted 
over an hour. I did not see Mr. Stone after that 
for about two weeks. I next saw him at my resi 
dence, when I had a conversation with him about 
the publication of my book. I told him that I 
had notified Mr. Latham to consider my agree- 

f * ' ment off, inasmuch as he had occupied two weeks 
time to prepare for the sale of my book, and that 
I had called on him at his office the day previ 
ous and found he had not taken any steps what 
ever to find agents, I wrote him the same evening 
that I wanted to consider the engagement off. 
Mr. Stone told me that perhaps it was just as 
well that I had called the proposition off as he ex 
pected to be at liberty in a few months, and at 
least by the end of October, as the suits he was 
involved in would be ended by that time, and he 
would be ready to take hold of the work himself 
and make a specialty of the book and sell an im 
mense amount some two hundred thousand 
copies. I saw him off and on after that time quite 
frequently, and had frequent conversations, but 
they were general conversations, and the matter 
dragged along until the month of December. 



129 

379 The subject of the conversations which I had 
with Stone between the time when he told me he 
thought he would be free in October, and the 
month of December, were always about the sale 
of the book. One evening, in the month of De 
cember, 1892, I called upon Mr. Stone it was 
the 12th of December and I told him that I had 
a new thought, and it was this : That I contem 
plated revising my first edition and making a sec 
ond edition, to change the name of the first edi 
tion to that of " Femina," and that I would cut 
out the prescriptions that were in the first edition, 
and instead thereof I would insert specific terms 
designating certain remedies for the cure of cer 
tain diseases peculiar to women, and it occurred 
to me as he sold the book, he might, at the same 
time, establish a sale for and sell the remedies. 
Mr. Stone thought very favorably of that propo 
sition, and I told him that I thought a scheme of 
that kind was feasible, and that I would be will 
ing to go into a partnership with him, manufac 
ture the book with him, and also the remedies, 
and divide the profits and share the expenses. 
As I said, that was in December, 1892. He said 
he would see me again in a few days. The next 
morning after this conversation had taken place, 
he called at my house and told me that the prop 
osition had grown upon him all night, and that he 



1 3 o 

382 was satisfied it was a big thing, and that there 
was a fortune in it for both of us, and that I 
should lose no time in perfecting all necessary 
arrangements so that he might take hold of the 
proposition. The matter rested there about three 
days, and after that he called on me again and 
said the more he thought of the proposition the 
more he was convinced that there was a good 
deal of money to be made, and that I should lose 
no time in perfecting the arrangements. I said 

3 3 that I had been thinking over the matter, and it 
required a great deal of work and considerable 
capital to go in the business and we had better 
enter into a written agreement. He said it was 
impossible for him to do that inasmuch as he was 
mixed up with litigation, but he gave me his hand 
and word of honor that I should go along as an 
equal partner and pay that which was necessary, 
and whenever we got started in the business he 

184 would reimburse me for his part of the outlay, 
and upon that I continued to work out the prop 
osition. 

Q. Was that statement of his to you, when 
he shook hands with you and said from that time 
you were partners, made in the month of Decem 
ber, 1892 ? Was that in the month of December, 
1892? 



385 A. Yes, sir. I saw Mr. Stone every two or 
three days after that and had conversations with 
him. The subjects of those conversations were 
our business the business in which we were both 
engaged, and in which we were partners. From 
time to time I acquainted him with what I was 
doing, and we continued in this business until the 
month of October, 1893. It was partly trans 
acted at No. 1137 Geary Street and partly at 

1018 Valencia Street. We transacted the busi- 

*86 

ness on Valencia Street from June, 1893. In 

October, 1893, there was a disagreement, and the 
result was that I was forced into a dissolution of 
the partnership the partnership existing between 
me and Mr. Stone. I executed some papers at 
that time. 

(Witness is shown defendant's Exhibit No. 3.) 

I saw Mr. Stone sign that paper. He read it, 

looked it over very carefully before he signed it. 

,37 I also saw him sign defendant's exhibit No. 4. 

He looked that over very carefully. We had 

letter-heads in that business. 

One of the letter-heads, which reads as follows, 
"THE FEMINA COMPANY, 
1018 Valencia Street. 
N. J. STONE, Manager, 

SAN FRANCISCO, CAL., 189 

was offered in evidence and marked " Defendant's 
Exhibit No. 6." 



132 

388 I know those letter-heads were used by Mr. 
Stone. 

CROSS-EXAMINATION. 

The conversation with Stone at the office of the 
History Company was in June, 1892. My visit 
to him was for the purpose of having some advice 
as to procuring a general agent. My book was 
already published and in my possession. I wanted 

Stone to assist me in placing the book on sale 
389 

with a general agent. I had known Stone for 

about fourteen years before that time. I have 
been in San Francisco about eighteen years, and 
have lived there since 1864, with the exception 
of two years tn Europe. I had not inquired for 
anybody else up to that time in whose hands I 
could place my book for sale. I first consulted 
Mr. Stone. He told me that the History Com 
pany was unreliable, and he would not advise me 
390 to place the book with it, but that he had a party 
in view that he considered to be exactly suitable 
for handling my book successfully. No one else 
was present at this conversation. That was be 
tween Stone and me in the History Company's 
office, and it was about eleven o'clock in the 
morning. I next saw him two days after that, 
and he then informed me that he had been 
speaking to the person that he had in mind at the 



133 

time of the former conversation with me, and 
wanted to make an appointment between that 
person and me. The appointment was made to 
meet at my residence. No one was present when 
Stone and Latham called except me. Dr. Lat 
ham is dead. He died about three or four months 
after that time. Latham was not to handle any 
of my medicines with the book, he was simply 
to handle the book. It is not a fact that my 
medicines poisoned Mr. Stone's boy. I called 
to attend his boy at one time, whom I found 
suffering from belladonna poison, which he ob 
tained in the office of the Femina Company, of 
which Mr. Stone was manager, and of which he 
had complete charge. I do not know that it was 
out of a bottle of some of iny prepared medicines 
that he obtained the poison. I was not there 
when he took it, and do not know. Mr. Stone 
did not inform me that the boy received the 
poison out of the office. I attended the boy pro 
fessionally, and afterwards sent a bill to his father 
for five hundred dollars, which he did not pay. 
He refused to pay it, and it has not been paid. 
I was in attendance on the boy on that occasion 
about five hours, and it was worth one hundred 
dollars an hour. My relations to Stone did not 
become strained after that ; we were friendly af 
ter that. My feelings were just the same after 



134 

394 he had refused me one hundred dollars an hour 
for attending upon his boy as they were be 
fore. He and his wife thanked me, and seemed 
more grateful than they ever were in their lives. 
That was after the boy was saved from poison, 
but the bill for it was not rendered until after the 
dissolution of the partnership. My feeling to 
ward Stone was not the same after the bill was 
presented and refused as they had been for weeks 
and months before. My feelings changed consid 
erably, and my feelings towards him have not im 
proved since that time, They have not grown 
worse daily. I have dismissed him from my 
mind, and have dismissed the matter from my 
mind. I presented the bill but took no further 
steps to collect it. I did not say that Stone told 
me that I should perfect arrangements as soon as 
I could as he might enter the business : I said 
that he said, he would enter the business. He 
did decline to enter into a written agreement with 
me; no written agreement was ever entered into. 
I have stated the substance of the conversations 
right along as 1 remember them, and have given 
the full substance of all that transpired between 
us. After he had declined to enter into a writ 
ten agreement with me, he gave me his hand and 
word of honor, and said that from that time on 
we would go forward as partners in business. 



135 

397 There was no one present at that time except 
Stone and myself. This conversation occurred in 
the month of December, in the forenoon, at my 
office. I saw him after that every two or three 
days, at my office or at his house. There was not, 
at that time, any other place for carrying on our 
business except at my office. In March another 
place was rented, but we did not move into it un 
til June. Mr. Stone was acting in this business 
from December until June. I deputed him to do 

o 

a good many things, and he returned the report 
to me. The first thing he did was to get a post- 
office order for twenty -five dollars. That post- 
office order was issued for a trade-mark in our 
business. 

Q. Did Mr. Stone do anything in the way of 
publishing your book between December and June 
following ? 

A. Yes, sir. 

300 During that tinie Mr. Stone got out the second 
edition. The first edition I got out myself and 
had it printed in Oakland. The second edition 
was printed in San Francisco ; the printing and 
binding was done by the Hicks-Judd Company, 
and the contract with them was made by Mr. 
Stone. I do not know when he made the con 
tract, I did not have anything to do with it, nor 
with paying the bill. Mr. Stone was supposed 



136 

400 to have paid it, he said he paid it, and 
I believe that he did. I afterwards refunded 
him the money. The first edition of the 
book I had had printed before talking with 
Mr. Stone. The second edition was gotten 
up later. Must have been gotten out in May or 
June, or it may have been a little later ; specimen 
copies were certainly out in June. That was not 
all Mr. Stone did during the months inter 
vening between July, 1892, and April, 1893. He 
advised with me continually ; we met as a rule in 
the afternoon for consultation. The History 
Company had nothing to do with my book, and 
it never engaged in the publication of it; nor in 
any other matter that I had for publication. As 
nearly as I can state the conversation in which 
Stone stated to me that the History Com 
pany was unreliable, I requested him, if he could, 
to assist me to place the book with a general 

402 a g en t w ho would handle it to the best advantage, 
and he volunteered the information that the His 
tory Company was unreliable, and he would not 
recommend me to give it the book, but that he 
had a person in view whom he could recommend. 
That was all of the conversation. I remember 
that he used the words " the History Company 
is unreliable " I do not remember all of the other 
words used in the conversation, but remember 



137 

403 their import. I cannot remember each and every 
word used in the conversation. 

Q. Can you testify to any exact words used 
by him, except the History Company, and that it 
was unreliable ? 

A. That is the key-note. I remember that. 

Q. You remember those words exactly, but 
the other words, as I understand you, you would 
not undertake to repeat ? 

A No, sir. At the time defendant's exhibits 
3 and 4 were executed, I remember I observed 
and noted closely whether Mr. Stone was reading 
the documents. I did not observe that he was 
reading them carefully, but observed that he 
looked over the documents with care as though 
he was reading them. This took place in the 
office of Judge Van Reynegom. There was no 
one else there when he looked over the papers. 
One of the papers was prepared by Judge Van 
405 Reynegom, and the other by Mr. Metson. 
I was not there before Mr. Stone and Mr. Metson 
came. Mr. Metson came later. Mr. Stone had 
both of these papers off and on for a week. He 
scanned these papers very carefully, I observed 
that. A 

Q. Why^Klid you observe so carefully that 
fact ? That Stone was reading the papers care 
fully, when he had with him his attorneys, or 
when he was acting through an attorney ? 



406 A. I was studying character; I make a study 
of that. It was a matter of following out the 
bent of my mind, in examining and watching peo 
ple to see what they do and examine character, 
and that is what caused me to observe Mr. 
Stone's conduct in reference to the papers. Be 
tween July and October, 1892, when those papers 
were drawn, the business was carried on by Stone 
and some employees. I had some trouble with 
Stone about money matters. That trouble began 
' after we were about three months in business 
about two and a half months it was some 
where along about April, and the trouble 
increased. The defendants in this case became 
acquainted with the private matters which oc 
curred between Stone and me because a third 
party was about to associate with us in the busi 
ness, and that party was intimately acquainted 
with the differences between Stone and me, and 

408 h e seems to be a friend of Mr. Bancroft, and 
that is how I was dragged into this affair, I 
first disclosed to the people connected with the 
defense of this action the facts I have testified 
to, about three weeks ago. They called upon me 
for a letter book, and told me why they wanted 
it, and I gave it to them, and gava them all the 
papers they wanted in reference to that business, 
that was about three weeks ago. 



409 RE-DIRECT EXAMINATION. 

The third party who was to have an interest in 
this business was Mr. Elliott. The bill for five 
hundred dollars for services rendered to Mr. 
Stone's child was given to Stone before the disso 
lution papers were signed, but he did not recog 
nize it, so I did not push it. He did not want to 
pay it, and I dropped it. Both he and the mem 
bers of his family seemed to be very grateful for 

the services which I had rendered in restoring 
410 

the child to health, and I have never been com 
pensated for it to any extent. 

O. H. ELLIOTT 

was called as a witness for defendant, and after 
being duly sworn, testified as follows: 

I am a publisher, and reside in San Francisco, 
and have resided there off and on for nearly forty 
411 y ears - I know the parties to this action, and 
have known Stone twenty -seven years and Ban 
croft for thirty years. Have had business rela 
tions with both of them. In the month of 
August, 1891, I had a conversation with Stone 

o ' 

in the office of the History Company, in the City 
and County of San Francisco. No one was 
present but ourselves. Bancroft had spoken to 
me several times about going to work for the 



140 

412 History Company, and in July he spoke to me 
again about it, and mentioned a salary that he 
thought I could earn, at least $500 a month, and 
in August Mr. Stone sent for me and offered me 
$300 a month, and I told him I was then on the 
eve of purchasing a patent bed and go into the 
manufacture of the same. He requested and ad 
vised me to do so, and stated that the business of 
the History Company was going to pieces, that 
it amounted to nothing, and that Bancroft was 

A T 1. 

very unreliable and could not be depended upon. 
He advised me not to take employment under the 
History Company at that time. He told me 
that Bancroft had requested him to send for me; 
that he had urged him to engage me for the 
Chronicle, a book they were then publishing, en^ 
titled the Chronicles and Builders. I told him I 
had some other scheme on hand, and told him 
what it was. He advised me to buy the patent 
and to secure all the territory possible, and to 
acquire the rights in China and Japan and the 
Pacific Islands, and if I built up the business and 
got it on a paying basis, he would take an inter 
est in it. I think I talked with him about an 
hour in reference to that business, and he said he 
would like to recommend me a bookkeeper, and he 
recommended Mr. Moore, and gave me a letter 
of introduction to him, and I appointed Mr. 



415 Moore bookkeeper in the business in which I pro 
posed to engage. In December, 1892, at Stone's 
residence, I had a conversation with him in refer 
ence to the publication and sale of a book called 
" Femina." He took down the book out of his 
library and showed it to me, and went on to state 
the contents of the book, and how valuable a 
book it was, and it would have a very great sale. 
I told him it was not large enough, and he said he 
was then in consultation with the doctor for a 
new edition, in which they were going to enlarge 
it; it would sell anywhere in connection with the 
remedies; he could sell it to his brother or any 
one he tried, or anywhere. It was a book that 
an agent could go anywhere and get an order for. 
In this conversation, which took place in August, 
1891, Stone told me to be very careful about the 
fact that he had advised me not to go to work for 
the History Company, and not to say anything to 
the old man about it; that is the way he ex 
pressed himself. In December, 1892, I had in 
terviews with Stone very frequently in relation to 
the publication and sale of Femina. He told me 
he was going in with a doctor, but did not state 
the name of the doctor until February, 1893. 
He took me out to Valencia Street, where they 
were going to have an office, and showed me the 
place and the rooms they were going to occupy, 



142 

418 and said he would admit me as a partner to the 
extent of a third interest in the business. On 
the 24th of May, 1893, he borrowed $500 from 
me to pay for the paper for the second edition to 
the Hicks-Judd Company, and the Hicks-Judd 
Company showed me the books that were printed 
and turned out on the 19th day of June, 1893. 
He borrowed this money from me to pay for the 
paper in May, 1893 the 24th of May and he 
showed me the bill for the paper. The Hicks- 
Judd Company showed me their books where 
they had received that money from him. 

"CROSS-EXAMINATION. 

I am now engaged in the publishing business 
at 1842 Capp Street. 



H. M. MONK 

420 was called as a witness for defendant, and after 
being duly sworn, testified as follows : 

I am an employee of the History Company, 
having charge of the subscription department. I 
have been in the employment of the company 
since the 6th day of August, 1892. From the 
6th of August, 1892, until the beginning of 1893, 
I spent rny time in the capacity of bookkeeper 
for the History Company in the large room now 



143 

421 occupied by the Bancroft Company as a book 
store. I had a desk in that room. From the 
6th of August, 1892, to the 1st of February, 
1893, Stone apparently spent very little time in 
the office of the History Company, I could not 
state definitely. Some days he would not be 
there but a very little while; it might be for an 
hour, it might be for three hours. I think there 
were many days between those two dates that he 
was not there more than an hour. I don't think 

A.2 2 

more than half the time between August, 1892, 
and February, 1893, he was there during the en 
tire business hours during the day, say from nine 
o'clock in the morning until four or five in the 
afternoon. I do riot think he was there half of 
the time during business hours between those 
dates. During that time there were improve 
ments being made in the room occupied by. the 
History Company. Carpenters were employed 
in putting up shelves, arranging counters, etc., and 
fitting up the place for a book store. That neces 
sitated the movement of the furniture that was 
in History Company's office. Such desks and 
furniture as were movable, were moved around 
when the carpenters were at work there; they 
were moved as occasion required, just far enough 
to get them out of the way. Only two desks in 
the office were movable, and they were both 



144 

424 moved. The desk that I used was not moveable; 
it was stationary. There was a counter and 
chairs in the room, and general office furniture. 
The chairs were moved. There was a safe and 
that was not moved until the very last. There 
were typewriters there and they were moved. 
Desks which had been stationary previous to that 
time were moved when occasion required it. As 
soon as the carpenters commenced at the Market 
Street end of the building and worked southerly, 
** our desks were all in the southerly part of the 
building and when the carpenters worked up to 
where we were, we were all moved. Everybody 
was interfered with to a great extent while the 
work was going on. 

CROSS-EXAMINATION. 

I occasionally took notes of the time Mr. 
Stone remained in the office. I took notes of his 
426 presence there. I think Mr. Bristol, who had 
charge of the subscription department at that 
time, told me to do so. No one else told me. I 
made a record of it. I do not know where the 
writing is now. I turned it over to Mr. Bristol, 
and he made his minutes in the books every day. 
I was in the same room with Stone. We occu 
pied the same room; our desks were quite close 
to one another. I think Stone was away about 



427 half the time. The notes which I spoke of are 
here, or rather the notes which I made are not 
here. I turned them over to Mr. Bristol, and he 
put them down in this book. I made notes from 
which I could refresh my memory if I had them 
here. I saw the notes which I made this last 
week; I just glanced at them casually. 

[Book handed witness. Witness identifies 
some of the notes as his and some as Bristol's.] 

I turned my notes over to Mr. Bristol in the 
o * 

evening. Mr. Bristol had the book all the time, 
and I made notes from time to time; I made 
notes on the spot on my desk, and at night 
I turned them over to Mr. Bristol, and he 
entered them in this book. This is not in my 
handwriting. I would turn them over in the 
evening, and that is the last I saw of the notes. 
Sometimes I read the notes to him and he would 
put them down. I could not tell how many times 
420 I kept run of the hours that Stone was there. I 
cannot approximate; I did not keep the record 
the whole of the time from the 6th of August 
up to February, 1893. I think I kept it until 
about November, but not all the time. Between 
August and November I said I thought that Stone 
was there half the time. I aimed to keep this 
record all of the time between August and No 
vember, but I may not have done so regularly. I 



146 

430 could not tell you how many times I put the time 
down, as I have said, I did it from August, or 
shortly thereafter, until the end of November. I 
aimed to keep the account regularly between those 
times; I may have missed some of the days. As 
to the number of days I missed, I could not tell 
you. I would say, according to my best judg 
ment, that I kept a record half of the time be 
tween those dates. This is only guess work. I 
am not positive about it; I don't think I kept any 

A *? T 

^ count after November. I did not, at the time I 
made that record, expect to be a witness against 
Mr. Stone. I kept the record because I was 
asked to do it. Mr. Bristol is now in Chicago. 
He has been there for some time, and is in the 
employ of Mr. Bancroft. At the time I speak of 
he was in the employment of the History Com 
pany. I did not know at the time I was instruct 
ed by Bristol to keep an account of Stone's time, 

4 ., 2 that there was any scheme to injure him. I was 
never told that. I am trying to tell you what I 
know, not what I thought. I did not know at 
the time I received this order to keep an account 
of the time, that it was a movement to injure 
Stone or not. I did not question them as to 
what they wanted to do. I did not make any 
inquiry one way or the other as to what 
use this record was to be put. Of course, 



147 

433 I don't know what their object was in keep 
ing the record, but I presume it was to know 
whether Stone was earning his salary or not. I 
will state that I was keeping the time of the 
other employees as well; that was part of my 
duty. It was part of my duty to keep the time 
book, but I did not keep as close a record of the 
other employees as I did of Mr. Stone. I did 
not keep any record of Mr. Stone after Novem 
ber, because I do not think he was around the 

^ office after that time to any great extent; he may 
have come around, but that is my impression ; 
after the last of November he was around the 
office very little, and it was for that reason I did 
not keep any record. I do not know how many 
times he was there after November. When I 
say I think he was not there to any great extent, 
I am simply giving my impression to the best of 
my knowledge, but I do not state it positively. 



GEORGE EDWARDS 

was called as a witness for defendant, and, after 
being duly sworn, testified as follows : 

I am connected with the History Company, 
and have been employed by that company since 
1886. I was employed by the History Company 
during the entire year of 1892. After July, 1892, 



148 

436 Mr. Stone's attendance became more and more 
irregular ; I cannot definitely fix the exact time, 
but I should say that early in 1892 he was there 
pretty much all the time, and less and less each 
day, and finally he called in for a few minutes, and 
at the end of the year I should say his visits 
ceased altogether. His visits grew gradually less 
they grew less frequent. 

Q. And you think before the end of the year 
1892 he had stopped coming there altogether ? 

A *2 T 

A. Well, he may have called in the office oc- 
casonially, once in three or four days after that. 
The length of his visits when he did come grew 
shorter towards the end of 1892 ; they grew 
shorter gradually. He would stay there a little 
less time each visit, and towards the end of the 
year he ceased altogether to call at the office. 



... 

CROSS-EXAMINATION. 

I have charge of the collection department. I 
was in the office most of the time. I did the col 
lection by correspondence. I did not collect per 
sonally. I was in the office pretty much all the 
time daily, except when I went out to get lunch. 
I was in the same room with Stone. It was only 
a general observation of Stone's attendance. It 
grew gradually less and less, but I cannot fix the 
date exactly. I should think there were five or 



149 

439 i x desks in the room occupied by Stone and me. 
In November, 1892, I think pretty much all of 
the desks had been moved out. When the shelves 
were put up, the desks were moved out, the office 
being extended and opened up to the front of the 
building. There were two desks in the room 
that Mr. Stone and I formerly occupied. I occu 
pied one and the cashier the other no, there 
were three desks, one long desk, one joining the 
cashier's desk, and back of that my desk. Across 
the end of the office was a long counter, inside the 
counter were the cashier's desks, two long desks. 
At that time, early in 1892, Mr. Hartwell was 
the cashier, then Mr. Staib. I think at that 
time Mr. Stone's desk also was inside the counter, 
and my own was a large desk a little outside the 
counter. I do not know what became of Stone's 
desk eventually. Everything was moved around 
somewhere. Stone's desk remained there, and 

44 r after awhile I lost track of it. It was removed 
from the office it disappeared. At the time it 
disappeared Mr. Stone was not using it. I should 
say it was removed the latter part of 1892, but I 
might be mistaken. After Stone's desk was re 
moved, Mr. Dorland, the Treasurer of the Ban 
croft Company and the Treasurer of the History 
Company, and myself and Mr. Monk occupied 
desks there. After Stone's desk was removed all 



442 of the other desks there were not occupied. I 
think after a time some of the desks were not oc 
cupied, but* after some of them were removed 
those that remained were occupied. I think 
about the time Stone's desk was moved, nearly all 
the desks were moved out. My own desk was 
taken out of the office and another one the same 
size, and then I took a smaller desk which I now 
occupy. There were three desks which remained 
there after Stone's desk was moved out, one was 

occupied by Mr. Dorland, one by Mr. Petersen, 

and one by Miss . There was no desk 

there for Stone in the latter part of 1892. Every 
thing disappeared from the office. The furniture 
of the office was moved everything taken out 
except these desks, they were in actual use. It is 
my impression that Stone visited the place after 
his desk was removed occasionally, but not every 
day. I should say, in a rough way, once a week, 

. , or once in two or three weeks. 
444 



GEORGE H. MORRISON 

was called as a witness for defendant, and after 
being duly sworn, testified as follows : 

I reside in San Francisco, and have resided there 
folr five or six years. I am a member of the His 
tory Company, and have been for about four or five 



445 y ears - I never, at the office of the History 
Company, nor at any other place, in the year 
1892, instructed Miss Hayes not to take any dic 
tation from Mr. Stone. I never told any steno 
grapher employed by the Historjr Company that 
he or she should not take a dictation from 
Stone. I never told Miss Hayes, at the office of 
the History Company, or at any other place, that 
Mr. Stone was not working for the company, and 
had no right in the office. I never told anybody 
employed by the History Company, that Mr. 
Stone had been discharged or dismissed. I never 
knew that he had been discharged or dismissed. 
He never was discharged or dismissed to my 
knowledge. I never told Trigo, and never stated 
in his presence in the City of Mexico, or at any 
other place, that Mr. Stone was going to be put 
out of the History Company. I never had any 
such thought or knowledge. I told Trio-o that 

' . ^ o O 

A An I had written Stone that I should hold him per 
sonally responsible for selling out the Eastern 
agency of the History Company without my 
knowledge or consent. At that time the Eastern 
agency of the History Company had been sold. 
That was my understanding of it. I was a stock 
holder of the History Company at that time. I 
had been informed of it prior to the statement to 
Trigo, and told him that I should hold Stone 



448 responsible under the law for selling it out. I think 
I showed him (Trigo) a letter to that effect which 
I wrote to Stone ; that was the only litigation I 
ever talked about to Trigo, or in his presence, of 
having with Stone, except, perhaps, when Trigo 
talked to me about bringing the suit against Stone 
for libeling his character. I may have had some 
conversation with him about that. At that time 
Trigo talked to me about bringing suit against 
Stone, he was determined to bring suit against 
him for libeling his character, and he was going 
to kill Stone, and all that sort of thing. I never 
advised him to sue Stone. I was in Court this 
morning when Trigo testified that Bancroft and I 
advised him to get counsel to sue Stone. I 
never gave him any such advice. I never ad 
vised anybody to go into a law suit. Trigo told 
me he was going to base his suit against Stone 
on the letters Stone had written impeaching his 
veracity, and his integrity, and his character. I 
think I showed Trigo one letter written by Stone 
that was addressed to me. I had been finding 
some fault with him about the conduct of his busi 
ness, if I remember rightly, and I showed him a 
letter from Mr. Stone finding fault with him, as 
sustaining my own views. He must have ob 
tained the information in relation to the remarks 
which Stone had made concerning him through 



153 

45 1 some other person than myself. He did not ob 
tain it through me. I did not make any state 
ments to Trigo in relation to what Stone had said 
of him further than to exhibit to him the letter 
which I have mentioned. All other information 
which he had in relation to derogatory statements 
made concerning him by Stone, he obtained 
through some other source than myself. When 
Trigo seemed to exhibit so much ill-feeling towards 
Stone, he told me that Stone had made state- 

^^ ments impeaching his honesty and veracity, and 
that he had treated him like a dog, but I advised 
him not to have any suit with Stone ; that there 
was nothing in it. Mr. Bancroft never instructed 
me~to say to any one of the employees of the 
History Company that Stone had no right there; 
he never instructed, or suggested to me to instruct 
any of the employees of the History Company 
not to render any assistance or service to 

AC -i Stone. Mr. Stone was not a member of the 
Board of Directors at the time the misunder 
standing between him and me, of which he has 
testified took place. It was not a meeting of 
stockholders, it was a meeting of the Board of 
Directors of the History Company, and there was 
no one present besides Mr. Stone who was not a 
member of the board. That was a Director's 
meeting for the transaction of business of the 



454 company. Mr. Stone had not been invited to go 
there by the Board of Directors, so far as I knew, 
as I think he had no right there. I did not tell 
him, in the month of May, 1892, that he had no 
right in the History Company's office, nor in 
June, 1892, nor did I ever tell him that at any 
time. I remember a little episode that took 
place one day in the History Company building, 
when Stone came into the private office of Mr. 
Bancroft. Mr. Bancroft was sitting at his table 
in his private office, and I was standing near him 
in conversation with him and the door suddenly 
opened, and Mr. Stone, very much excited, with 
his hand up, entered the door, that is, pushed the 
door open, and quite loudly said : " Mr. Bancroft, 
I hold you responsible for the movement of my 
desk." He spoke in that way, and Mr. Bancroft 
looked up quietly, made no reply to him, but 
asked me if I would please close the door, and I 

456 stepped to the door and closed it, and in closing 
it, I pushed Mr. Stone out in order to close it. 
There was not a word said at that time, except, as 
near as I can remember, what I have just stated. 
That was Mr. Bancroft's private office. Mr. 
Stone's desk was not in there and never had 
been. 

CROSS-EXAMINATION. 

That was the private room of Mr. Bancroft, 



457 President of the History Company, for which the 
corporation was paying rent. I speak of them as 
private rooms because the general business was 
not done there. This occurred some time during 
the forenoon, in business hours. I do not know 
that Mr. Bancroft occupied any room as his 
special private room. I explained that I called 
these private rooms in that the general business 
was not performed there. He was there as Pres 
ident of the company, and held those rooms as 
** President of the History Company. He was 
there at work. He was at that time President of 
the Company, and those rooms were occupied by 
him as a member of the company. That was the 
place where he transacted his business with out 
siders, or with officers of the corporation who 
might have business with him. Mr. Stone did 
not say to Bancroft that he would hold him re 
sponsible for the removal of his desk out of his 
4 CQ office. His proposition/ as near as I can repeat, 
was : " Mr. Bancroft, I hold you responsible for 
the moving of my desk." I do not attempt to 
give the exact words, that is the substance of it. 
Mr. Bancroft did not make any reply to him. 
He asked me if I would please close the door. 
Stone was not inside the room at that time. He 
held the door in his hand. I closed the door. 
Stone was not quite in. He had hold of the 



156 

460 door. I stepped up and put my hand on the 
door, and shoved the door together. He seem 
ingly was willing it should be shut, and he went 
back with it. That was the end of the transac 
tion. If I said in my direct examination that I 
pushed Mr. Stone out, it was a slip of the tongue. 
I closed the door, and the idea is, he went with 
the door. The door shoved in his direction ; it 
opened into the office. I cannot say I closed the 
door very gently, but I did not do it violently, it 
did not require violence to close it. When Stone 
went into the room, Mr. Bancroft asksd me to 
please close the door, and I have stated to you 
what I did, and that was the substance of it. I 
never discharged Stone from the History Com 
pany, and never knew of his being discharged. I 
understood he had some sort of a contract with 
Mr. Bancroft, but I knew nothing about his be 
ing discharged from the History Company. I 

462 knew he was Vice-President, and I knew the 
Board failed to re-elect him, and I was elected 
Vice-President. I supposed if he had any rights 
in the History Company the law would protect 
him. I never dismissed him or knew of anybody 
else dismissing him. I think it was in May, 1892, 
that he was not re-elected Vice-President. I do 
not know anything about his being in the employ 
of the History Company after that time. I said 



463 I never dismissed him nor ever heard of his being 
dismissed. This episode that I have just des 
cribed occurred after I was elected Vice -Presi 
dent, but I cannot fix the date. I should say it- 
occurred some months after. A matter of three 
or four months. Mr. Stone was in and out of the 
building during that time. I did not always know 
what he was doing, but he did not seem to be do 
ing much. I was Vice-President, and it was my 
duty to be looking after the work of the company 
and looking after the employees, and I did this. 
I knew that Stone was writing some letters, and 
I knew he was transacting some business, and I 
knew he had some contract with H. H. Bancroft. 
I knew he was writing letters and transacting 
some business for the corporation. He continued 
to transact business in that manner several 
months after. He was in and out doing a little; 
I do not know exactly how many months. I 

45 c think I came back some time in June or July and 
Mr. Stone was there then, and he continued there 
off and on. Sometimes I would see him there 
for an hour or two in the day, sometimes at dif 
ferent times in the days, perhaps for a month or 
two months, perhaps three months after that 
time. I made some inquiry and tried to find out 
what he was doing there. I knew he was trans- 
actino- business for the corporation. I did not 



466 discharge him, because, as I understood it, he had 
no direct connection with the History Company, 
except through some contract with defendant, and 
I felt that whatever rights he had the courts and 
he and Mr. Bancroft would settle between them 
selves. That was the reason I made no special 
inquiries as to what he was doing about there. 
After the election on May 20th he continued as 
manager. After I was Vice-President he claimed 
to be manager. A letter was sent to Mr. Derby 

J Ar 

signed by him as manager. Mr. Derby sent me 
back a letter that he had signed as manager, and 
I knew in that way that he was acting or pro 
ceeding to act as manager right along during 
those months. I never attempted to discharge 
him as manager for the reasons I have given you. 
After my return from Mexico, I commenced an 
action against Mr. Stone. That action was tried 
in the Superior Court of the City and County of 
468 San Francisco before a jury. I do not think I 
ever did, while Mr. Stone was Vice-President of 
the company; apply to Bancroft or approach him 
for the purpose of getting him to depose Stone 
and putting me in his place. I never made any 
such application. Something was said about a 
change of officers and I think I told Mr. Ban- 

o 

croft in a letter that was produced once that I 
have forgotten about, and I heard read, that I 



469 would be willing to accept the position of Vice- 
President, but I never made any application for 
the office. I may have intimated to him that I 
would be glad to take the position which was 
then occupied by Mr. Stone, if it was vacant. 

[Witness is shown a letter which he identifies 
as being in his handwriting, and the signature of 
which he identifies as his. The letter was offered 
in evidence by plaintiff, arid was asked the object 
of it. Plaintiff's counsel stated the object is to 
show that the witness made such an application 
as I have described to obtain the position which 
was then occupied by Mr. Stone, that he sought 
to displace him and to gain the place.] 

The letter was objected to by defendant on the 
ground that it was irrelevant and immaterial and 
not cross-examination. 

The objection was overruled by the Court, to 
which ruling defendant duly excepted. 
471 Exception No. 33. 

Whereupon the letter was read in evidence, as 
follows: 

"HOTEL ITURBIDE, MEXICO. ) 
MEXICO CITY, February 13, 1892. j 

DEAR MK. BANCROFT: 

I desire to wish yourself and family 
a pleasant and safe passage home, and trust that the 
change to our California climate may build Lucy up at 
once. Regarding the business here I will do my best to 



i6o 

472 8e H school books, get cash wherever it is possible, when 
time is given, will get the shortest time possible. Will 
work C. B. for all it is worth. Will do my best to place 
B. W. in colleges and seminaries; will be on the lookout 
for information and names of writers and books, etc., 
that can be had without cost for Gyp. Will get notes for 
school books, discount them, arrange with good commis 
sion house to send us the money as soon as the books are 
received; will always sell the best book possible, but in 
accordance with your wishes, will have such books made 
(in price) as will meet the demand. It is my intention 
to get all over the Republic, that is, to such points as we 
ought to go to where don't reach, and get back to 

473 San Francisco by May 15, '92. For 1 wish, if agreeable 
to you, to take a trip to Montana and get back here in 
September to see Diaz. From what I have read of the 
correspondence between Mexico and the History Com 
pany, in S. F., too much ink, paper, time and money is 
expended in trifling fault finding, and telling what can 
be done, to give confidence in the way business is done; 
the haste, too, with which property was disposed of also 
makes me tremble for the condition of our wives and 
children would find matters in, if we were suddenly taken 
to Paradise; so if you will quietly arrange to have Dor- 
land and Peterson move upstairs and attend to the work 
now attended to by the people there, and thus give the 

474 Vice-President a chance to go out and do some good big 
work for the company. I will be greatly pleased; he is 
a man who knows how the work should be done and 
would, no doubt, be able to accomplish a great deal, and 
the office work could be done just as well, to say the least, 
as it is now, and with Tom at the head I would feel per 
fectly safe, knowing that he would be fair and honest, 
and would do nothing in haste or wrong, or without con 
sulting the interests of all. Mrs. Morrison is a woman 
of rare sense, education and tact, she is deeply interested 
in all that concerns her husband and children, and can 
act for me. She has the most profound respect for your 



475 ability, wisdom and fairness, and you will find her just as 
valuable a person to consult about all matters in which 
I am interested as I would be if personally present. 
I will send her a power of attorney to act for me. My 
judgment is that it would be wise to keep all the room we 
now have, and when you are ready to do so move the 
B. C. upstairs and arrange to divide the rent. If you 
should come to the conclusion that for any reason you 
want to make a change in officers, I would be glad to see 
Tom Borland Secretary and Treasurer, and would be 
glad to accept V. P.; this, I understand, to be in full ac 
cord with your views. In all things I talk to you as 
plainly as if I was thinking aloud, for I am with you and 

476 yours for life, and all our business must be absolutely 
fair, open and just. If you are not wiser than I am at 
many points it would indicate that your years of won 
derful work had not ripened a mind naturally rich; you 
are wiser, anjl I want to derive benefit personally and for 
the business from the large experience that has enabled 
you to accomplish your work, hence speak to me in the 
future as you have in the past, freely. 

I have written you these few words as a sort of a good 
bye. With kindest regards to your most estimable wife 
and children, I am, as ever and always, 
Your friend, 

GEO. H. MORRISON." 

477 

RE-DIREOT EXAMINATION. ' 

[Letter shown witness and identified by him as 
written by plaintiff to him under date of Novem 
ber 22, 1892, the following portion of which is 
offered in evidence:] 

" I shall move out of the large room at the end of the 
hall, for the reason that the saving in rent is over $75. 
The little rooms are not ready for us to move into. We 



l62 

478 may want the large office, and will certainly want it if 

we publish the Encyclopedia. Mr. S has been to see 

me about moving the school department down stairs 
It would be better for us to try and rent a little space in 
this office, and try to cut down expenses in that way." 

I never told Miss Hayes that Mr. Stone was 
around the office of the History as a spy. I 
never made any statement of that kind to any 
body. I do not remember Trigo having any 
conversation with me about the time I returned 
to San Francisco; he spoke to me before he 
parted with me in Mexico, saying he would 
bring a suit against Stone, and I advised him it 
was a very foolish thing to do; there was nothing 
in a law suit. 

RE-CROSS EXAMINATION. 

I do not know what was in my mind when I 
wrote that letter to Mr. Bancroft, which has been 
offered in evidence. I said I never talked to an 
4 o employee of the company about one of my asso 
ciates in the company. I was writing to Mr. 
Bancroft as the head and front of the History 
Company. He was the President, he owned 70 
per cent of the stock of the corporation. He 
was the largest stockholder of the History Com 
pany. I used the expression he was the head 
and front of the History Company, and qualified 
the expression by saying he was the President of 



481 the company. He was the head of the 
corporation, he was the president of it. 
When I used the expression the head and 
front, I simply wanted to convey the idea that 
Mr. Bancroft was President of the company, that 
is why I wrote that letter to him. Mr. Bancroft 
framed the policy of the company, and it was in 
that sense that I used the expression " head and 
front ;" that is the best explanation I can give. 

He framed the policy of it to a very great extent. 
482 



H. H. BANCROFT 

was called as a witness for defendant, and after 
being duly sworn, testified as follows: 

I never, in January, 1892, or at any other time, 
in the City of Mexico, made any arrangement or 
agreement, with Mr. Morrison and Mr. Trigo 
that we should bring suits against Stone. I think 
483 I was in Europe when the plaintiff first came to 
the house of A. L. Bancroft & Coinpany. I 
came back in 1868 or 1869. The firm was then 
H. H. Bancroft & Company, and was continued 
under that name until we moved on Market 
Street in 1869, and then it was changed to A. L. 
Bancroft & Company, and continued to do busi 
ness under that name until 1886, when it was 
burned out. When we moved to Market Street, 



164 

484 Mr. Stone was employed by A. L. Bancroft & 
Company. He was there in two or three capaci 
ties. He had charge of the wholesale department 
at one time, and had charge * of the subscription 
business at one time, I cannot remember exactly 
the dates, they were in paint of order. I think 
it was in 1882 that he began to have anything 
to do with the Bancroft's Works Department of 
A. L. Bancroft & Company. He had charge of 
the sale of those books, and continued to act in 

"" 5 that capacity for A. L. Bancroft & Company 
until the History Company was formed, and after 
that he was manager of the company. The prop 
erty referred to in the agreement set forth in the 
plaintiff's complaint consisted of outstanding ac 
counts for about from $240,000 to $250,000 I think 
some seven thousand, and two or three hundred 
orders for the Histories, which had been taken at 
a cost of from $25 to $75 an order, about half of 

486 ^ being delivered. Then there were plates and 
stock of the histories, and altogether it figured up 
fully $500,000. The capital stock of the History 
Company was $500,000, and, we felt we had an 
equivalent to it in every respect. Mr. Stone was 
one of the incorporators of that company; he 
never paid in a cent; not a dollar from first to last. 
I was the owner of all that'property at the time the 
agreement was made, or shortly afterwards, hav- 



487 ing purchased my brother's interest and paid for 
it with my own money, and I gave him (Stone) 
an undivided one-tenth interest in that property, 
without the payment of anything to me. After 
the formation of the History Company, I trans 
ferred to it the entire property mentioned in that 
agreement, all the property of the Bancroft's 
Works Department, which went to make up the 
History Company the capital. That business 
had been carried on for some years by A. L. Ban 
croft & Company under the title of the Bancroft 
Works Department. The transfer which I made 
to the History Company under this agreement, 
included the good-will of that business, whatever 
it might be worth. Leading up to that agree 
ment, there was a general understanding between 
Mr. Stone and me as to what services he was to 
perform in this new enterprise, and what services 
I was to perform. We consummated the arrange- 

,gg ment, and the business was thereafter conducted 
under the title of the History Company. I told 
him I thought the business could stand a salary 
of $350 per month, and that was given him, and 
after I gave him the ten per cent, I gave him an 
additional five per cent more with a view of 
attaching him to the business and to make him 
loyal and faithful, and able to carry out the busi 
ness to its fullest extent. Both Stone and I were 



1 66 

490 incorporators of the History Company, and signed 
the articles of incorporation, and both of us par 
ticipated in the organization of the company. 
After the formation of the corporation, all the 
property mentioned in this agreement was turned 
over to it. I never, from the time that agreement 
was made, down to the date of the commence 
ment of this suit, paid Stone any salary, and he 
never demanded any salary from me. The salary 
which was paid to him was charged on the books 
49 x of the History Company, but was never charged 
to my personal account. Stone's salary, with 
other expenses, was deducted from moneys real 
ized by the company before any profits or divi 
dends were paid or declared. I think they kept 
a salary account and credited the money to that 
account, and then charged to the expenses; it 
was some such way as that. As large dividends 
were paid by the History Company, the property 
A Q2 of the corporation decreased in value very rapidly. 
The property of the company consisted very 
largely of orders which had been taken for Ban 
croft's Works, and as money was paid on those 
orders, the debts of the company were paid and 
the surplus divided from time to time, so that as 
those moneys were paid in, dividends were de 
clared, and we were constantly decreasing the 
value of the property of the corporation; we 



i6 7 

493 were, in fact, dividing the capital stock. The 
money I put in was paid out in that way; the busi 
ness never made a dollar, and it is over $160,000 
behind to-day. In May, 1892, there were very 
few outstanding accounts left to collect and money 
came in very slowly under the management; for 
a year or two previous to that, all had been col 
lected in that could be, and nothing was done to 
build up the business. There was no new busi 
ness added, and no attempt on the part of Mr. 
Stone to increase or build up the business, and 
the consequence was that before he went out, or 
up to that time, it was very much reduced, and 
the circumstances attending his going out, and 
the influence he brought to bear against the busi 
ness, helped still further to wreck it, until it is 
pretty well gone in. As a matter of fact, we 
made very few sales of the histories after the 1st 
of January, 1892, although the market was just 

40 s as o 0( l then as I won't say as it was before 
still there was a good field for business, but Stone 
stopped trying to sell the histories; he gave up 
the thing altogether, and only tried to collect in 
this money and divide it, so that practically the 
business of the History Company about May, 
1892, simply consisted in collecting in outstand 
ing accounts, and about all those accounts that 
could have been collected, had been collected at 



1 68 

496 that time. There was nothing to speak of after 
that time from which to make a declaration of 
dividends; there was nothing except sufficient to 
meet our expenses and pay our debts. In May, 
1892, Mr. Stone was doing nothing whatever ex 
cept to collect in money and divide it; there was 
no new enterprises being pushed forward; it was 
the money which I had put in that we were get 
ting back, and he was getting his 15 per cent of 
that and $350 per month. From the interest 
L "' which I presented to him, he received in divi 
dends between $60,000 and $70,000, in addition 
to obtaining $350 per month, and I got no com 
pensation at all. Prior to May, 1892, I had a 
great many conversations with Mr. Stone. I 
was trying to get him to do something to make 
more money or to build up the business so that 
we could have something left after the histories 
were sold and the money collected. The expenses 

408 were almost as heavy as they ever were, and 
nothing was coining back except in the way 
of collections, and I saw clearly that the whole 
thing would fall upon me to put up a lot more 
money for him to divide, and I urged him to 
reduce expenses and to make some new business; 
he had always claimed that he was a man of 
great ability, and could build up a business, so 
that we could have something to go upon after 



169 

499 the history was sold and delivered and the money 
collected, but I never could induce him to do any 
thing except to collect in this money and divide 
it. I had a conversation with him in May, 1892. 
I went to him to his desk, and said to him: "What 
is the matter, Stone? Mr. Dorland says you are 
going to bring suit against the History Company, 
or against me, and break up this business." He 
said: "I won't talk to you." "Well," I said, "if 
there is anything that I have done to wrong or 
offend you or displease you, it is not necessary to 
go to law, I ani ready to make everything right, 
I am very glad to do it; I don't want any trouble, 
and tell me what it is, and let us fix it up like 
men and not talk about going to law." He said: 
"I will talk to my wife first, and my lawyer next, 
and you last." I said: "What is there to talk 
about? What do you want to talk to a lawyer 
at all for ? You know, Stone, I have been very 
c O i liberal with you. I gave you first 10 per cent in 
the business, and 5 per cent more, and when I 
gave you the second 5 per cent, your voice 
choked up in your gratitude to me for that gift." 
I said: " Where is your gratitude now '( What 
have I done that you propose to bring suit against 
me and break up the business." His reply was: 
" I will talk to my wife and my lawyer, and you 
last." I said: " Mr. Stone, if there is any one 



iyo 

502 that has occasion to bring a suit, it is for me to 
do it rather than for you. You know you have 
broken faith with me in a dozen different ways. 
You have not been loyal and true to the business; 
you have not built up a business as you promised; 
you have not relieved me from the labor and 
work in this business that I wanted and expected 
to be free from. In no particular have you car 
ried out your agreement with me, or your good 
faith with me." His reply was: " I will talk to 

? my wife first, my lawyer next and to you last." 
I said a good deal more and went over the ground 
pretty thoroughly, and that is all the satisfaction 
I could get. That is all the conversation I can 
readily call to mind. I suppose I could think of 
more, but that was what I said. This was about 
the time that Mr. Morrison was elected Vice- 
President. I think he was elected after that. I 
said to him: " Mr. Dorland told me that you were 

504 g om g to bring suit against me, and break up the 
business." He did not dissent from that, but said 
he would see his lawyer and then talk with me. 
I never had any conversation with Stone from 
that day to this that amounted to anything. I 
never had any conversation with him from May, 
1892, up to June, 1893, to speak of. I saw him 
around the office of the History Company after 
that time. I never in my life threatened to beg- 



505 gar any man, let alone a woman and children, it 
is not possible, it is untrue. I never said to Mr. 
Stone or any other man or woman or child, or 
never thought it in my heart, nor ever could do 
it if I had. I never swore at Stone in my life; I 
never had any violent controversy with him ex 
cept on two occasions when he forced his way into 
my room, and rendered himself odious where he 
had no business to be. I was present at the time 
of the episode that took place in the director's 
room of the History Company. Mr. Stone was 
not a member of that board. At that time we 
were holding a director's meeting and levying an 
assessment. No one had invited Mr. Stone to 
come into the room, on the contrary, he had been 
hanging around the room for some hours, and 

O O ' 

slipped in when he found a director's meeting was 
being held. I was there at the time he claims to 
have been pushed out of the room by Colonel 
c O 7 Morrison. That room was my office and adjoined 
the rooms where the director's meetings were held. 
I had not invited Mr. Stone to come into the 
room. When he came in, I was sitting at the 
desk, and Morrison was standing near the desk, 
and we were talking, he was between the desk 
and the door, and the door was shut. Mr. Stone 
opened the door and put in his head, and shook 
his fist and said, " I will hold you personally 



172 

508 responsible for my desk being moved." I had not 
touched his desk. He was violent and angry in 
his manner. I did not reply, but turned to 
Colonel Morrison and asked him if he would 
please shut the door. I did not say anything to 
Stone at that time, and that is all I said to any 
body there. I never told Mr. Dorland or any 
one else, that Stone had no right around the office 
of the History Company, nor did I ever tell Dor- 
land to tell Stone that. His rights were recog 
nized there by everybody throughout, and never 
interfered with in the slightest degree. I never 
discharged or dismissed Stone from the service of 
the History Company; that question never came 
up. I have an indistinct recollection of passing 
by where Stone was sitting at one time, and the 
carpenters were at work and they had some lum 
ber or something; I wanted to pass along there, 
and 1 think I stopped one of them and said: 

c lo " Take hold of that; we will move this over a 
little ways." Stone was sitting at the desk; I 
don't think it was moved over six inches, and 
very quietly without disturbing him or his papers, 
or anything on it with any view whatever of 
interfering with his work; and as a matter of fact, 
it did not. He hitched his chair up and went on 
with what he was doing; that is all there was 
to that. That is the only time I touched his 



173 

desk while he was at work at it; the carpenters 
were at work at that time and wanted a little more 
room to pass where he was sitting; the end of his 
desk came up to where their lumber was. I 
never kicked Stone's waste-basket over; the 
basket he used belonged to the History Company, 
and it would be very poor taste of me to kick the 
History Company's basket. I never, to my 
knowledge, poured or scattered any ink over the 
desk occupied by Stone. If any ink got on his 
desk through me, I never knew it, and if it did 
it was an accident, and as I say the desk did not 
belong to him but to the History Company, and 
it would be very poor satisfaction to me to turn 
the inkstand over on it and daub it with ink. 
The desk belonged to the History Company and 
not to him, and if I had daubed it all over with 
ink, it would not have spited him. I am inclined 
to think that I did tell somebody to take the 
!-!} casters off Stone's desk. When he would come 
down to wherever his desk was in the morning or 
at noon, he would take the desk and shove it from 
one end of the room to the other, making a great 
racket. He did that over and over again. He 
was trying to make things as disagreeable as he 
could. He was going around whistling and hol 
lering to this one and that one; that seemed a 
part of his performance. I think I told somebody 



-74 

514 it would be just as well to have those casters all 
taken off that desk, it would not make quite as 
much noise. I have an indistinct recollection of 
that. I would not swear I did it or said that; 
that is my best recollection of it, but it was done 
through self-protection, and it did not affect his 
doing his work, and building up the business of 
the History Company if he wanted to, but to 
stop the racket that he made. I never ordered 
his desk to be placed in a position where he could 
not work; I had nothing to do with placing his 
desk; the men were shoving it around the same 
as any other desk; the desk which he occupied 
was an ordinary sized one; he managed to shove 
it around pretty well when it was on castors. 
The desk was not so large or heavy that if put 
up close to the wall, or so close to any other ob 
ject, that a chair could not be put behind it or 
moved out, and a chair lifted behind it. He was 
never restricted as to where he should put his 
desk; he had the whole floor of the room, and 
always had some one there to help him. It was 
not my business to go and look after the desk; he 
was manager there and he looked after the room; 
he was not interfered with in the slightest degree 
in anything; he had the whole room and type 
writers to himself in that room, and was not in 
terfered with in the slightest degree by anybody 



517 He was the manager, and it was not my place to 
tell him what to do. I never told anybody to 
throw any obstacle in the way of Stone, or to put 
his desk in any particular place. I never gave 
any order for the removal of his desk; on the 
contrary, I came down one morning and found it 
gone; somebody had moved it out of the room, I 
do not know where, and I said that it had better 
be put back. I never considered Stone discharged, 
or that his duties were interfered witli in any de 
gree. I had not been accustomed to direct him 
in any particular. I had been away months at a 
time, and when I was there I did not direct him; 
he had full scope in the management of the 
business. It was none of my business to see that 
his desk was placed here or there, or that he had 
a typewriter, or had not, or all the rest of what 
has been set forth here. From November, 1892, 
to March, 1893, I think I was residing in San 
Francisco, and my impression is that I was in 
attendance at the office of the History Company 
during that time. Stone never spoke to me 
about his desk at any time after the 1st of No 
vember, 1892. I had not touched the desk at 
the time he came and threatened to hold me re 
sponsible; I did not know anything about it. He 
never came to me and asked that his desk be 
placed in any particular position. He never 



1 7 6 

520 came to me and stated that his desk had been 
placed in a position where it was in any way in 
convenient for him to work. He would not think 
of such a thing as that, because he could place it 
where he wanted to. No complaint ever came to 
me through any source that Stone's desk had 
been placed in a position where it was inconven 
ient for him to work. No request ever came to 
me through any other source purporting to come 
from him, that his desk had been placed in any 

5 21 other position than that which it occupied. No 
one ever told me that Stone complained that his 
desk had been placed in a position where it was 
impossible for him to work. I never told Trigo 
or Morrison, in the City of Mexico, or any other 
place that I proposed to oust Stone from the 
History Company. I never wanted to oust him; 
I wanted him to stay there; I never told Trigo 
anything of that kind. I never made any such 
statement to Morrison in Trigo's presence. There 
was never any agreement between me and Stone 
that Stone should be Vice-President of the His 
tory Company for any specified time. I never 
told Mr. Dorland not to permit Stone to do any 
work in the History Company. I never offered 
to pay any expenses for any litigation which 
Trigo might institute against Stone. 



177 

523 CROSS EXAMINATION. 

I think I came back from Mexico in February, 
1892. I left here, I think, some time in Septem 
ber, 1891, and reached there early in October, 
and got back the latter part of February or the 
first of March, 1892. I went to the City of 
Mexico; I think it was in February that I left 
there; I stopped at San Diego for awhile on my 
return; I think I was there a month or two. I 

think it was in April that I reached San Fran- 
524 

cisco; I think I was here a month or two before 

the time when Stone threatened to sue me. I think 
it was in May that he made that threat. I cannot 
tell exactly what time in May, it seems to me it was 
about the 10th of the month, or along there. I do 
not remember what time I commenced suit against 
Stone; I think it was the same day I had that 
interview with him. I know Mr. Morrison com 
menced a suit against Stone two or three months 
525 after he returned from Mexico, and I think it was 
about a month after I came up from San Diego 
that I commenced a suit against Stone. After he 
came back from Mexico, I observed Trigo look 
ing over the letters of the History Company off 
and on for a month. He was going to kill Stone 
and going to bring suit against him. 

Q. Who placed those letters at the disposal 
of Mr. Trigo? 



1 78 

526 A. They were at the disposal of anybody in 
the History Company. He was looking for some 
thing to bring suit against Stone, so he told me. 
I thought that in writing these letters that per 
haps I had rendered Trigo injustice in some re 
spects, although I considered I spoke very mildly 
about him, and I did not want any enmity or ill- 
feeling between Stone and Trigo. I wanted them 
to understand one another. The letters I wrote 
Stone in answer to his letters were to quiet him 
down. I did not attempt in any way to soothe or 
prevent Trigo from bringing a suit against Stone. 
I did not do anything about it. I did not incite 
Tritjo to sue Stone or Stone to sue me. In 1886 

O 

I transferred $500,000 of property to the History 
Company, and I gave one-tenth of all the prop 
erty to Stone, and afterwards 5 per cent addi 
tional. The 5 per cent was given to him some 
time after the 10 per cent. I gave him 10 per 
cent of all the property without any consideration 
whatever further than his promise to be faithful 
to the business. He had done nothing before 
that except what he had been well paid for. I 
o-ave him about $50,000, and u;ave it to him out 

o 

and out. I never received a dime in return 
$54,000 I think it was, and this is a specimen of 
what I got for it. I never did so foolish a tiling 
as that before or since in my life. That was the 



179 

529 worst thing I ever did, so far as money was con 
cerned. I had in mind some services Stone had 
performed, but he was paid for those services 
over and over. The recital in the agreement that 
in consideration of the valuable services done by 
the said Stone in conducting the publication and 
sale of the historical works of said Bancroft 
the said Bancroft hereby sells and assigns to said 
Stone, one-tenth interest in said History Com 
pany, paper, stock, etc.," was in one sense a fact, 
in the sense in which it was intended; it was all 
the consideration that was put in that agreement 
which I signed, and what I stated there was the 
fact, but it was not meant there that I owed him 
anything further for what he had done; but, as 
he had been at work on the history, and had 
done very well, in consideration of this fact, and 
the further promise of what he would do, I gave 
him this out and out, but I was under no obliga- 
tions, and no obligation is intended to be implied 
in the written transfer. I did not mean this as 
an equivalent consideration or payment. I did 
mean what was recited in that agreement, with 
this explanation that it had no reference to a 
technical consideration, but that he had worked 
on the history and had been fully paid for it, and 
in consideration of that fact, I would give him 
out and out this property, provided he would be 



i8o 

532 true and faithful to me to the end, as he prom 
ised. The services which he had rendered, re 
ferred to in the agreement, had been amply paid 
for, and I wanted to give him $50,000 for what 
he was going to do, for what he promised to do; 
it was rny purpose in this transaction, knowing 
that Stone had been fully paid for all that he had 
done up to that time, to give him the sum of 
$50,000, and I knew I was doing so making 
him a present of it. I am not frequently in- 

533 S pi r ed with thoughts of that kind. Stone had 
gone into this history business as early as 1883, 
and continued in it for a period of four years. 
He had managed the business. To some extent, 
it was the result of his labor that the History 
Company had reached the degree of prosperity 
in which it was at that time, but it was not pros 
perous at that time. We had $240,000 that 
was due, but there was not much money coming 
in at that time; at the end of four years there was 
that much money coming in. That money came 
out of my pocket. I went into the History Com 
pany. I paid the money for the manufacture of 
the books and getting orders, every dollar came 
out of me or out of the A. L. Bancroft Com 
pany and stood on the books of the History 
Company. I did not say that the condition, I 
.said the prosperity of the History Company was 



535 due to the management of Mr. Stone. Its con 
dition was not due entirely to the management 
of Mr. Stone; no one else managed it but him; 
but its condition was due to other men also; it 
was due to some extent to me. I worked there 
right along. Stone managed the details of the 
business, but I directed the business generally or 
assisted in the direction of it. During that time 
hundreds of thousands of dollars were taken out 
of the A. L. Bancroft Company, and put in the 

** selling of this History; some portion of it has 
come back. 

(Witness identifies a letter as having been 
written by him, a portion of which is read as 
follows:) 

" February 4, 1884. 
Dear Stone: 

The History business is certainly in mag 
nificent shape, and it is to you and no one else that it is 
indebted for being so." 

537 Witness continuing: I wrote that letter. The 
boys require some patting on the back occasion- 
ally. 

Q. Do you pat them on the back with what 
is not true? 

A. To some extent it is true. I meant a 
great deal of it. I do not mean to say that the 
letter was not true which I wrote to Stone. 
Sometimes he is a good deal of a boy. I thought 



182 

538 I could get more work out of him by patting him 
on the back. I did not propose to deceive him 
to get more work out of him than he was doing. 
I was not deceiving him at all. To a certain ex 
tent the statement contained in the letter was a 
fact. 

(Witness identifies another letter as having 
been written by him, which is offered in evidence 
and read as follows:) 

"Jan. 27th, 188S. 
Dear Stone: 

I feel it is due to you for me to say on this 
first dividend day, that you have stood by the History 
Company nobly from first to last, and that it is through 
your steadfastness of purpose in accomplishing a most 
difficult and harrowing piece of work that success has 
finally come. I hope for your sake as well as my own, 
that, the dividends may continue right along, whiln at the 
same time, the value of the plant and property is made all 
the time to increase. A continuance of the same able 
management is sure to bring about this result. For my 
self, Iwill say, once more and once for all. that though I 
may have spoken words which have caused you annoyance 
and have differed from you in opinion once or twice, on 
the whole we have been remarkably of one mind, I think; 
I have never entertained for one moment in my heart of 
hearts, any but the truest, kindest and most loyal senti 
ments towards you. 

Very sincerely, 

H. H. BANCROFT." 

At the time Stone and I made this agreement, 
he was in the employ of A. L. Bancroft & Com 
pany, receiving a salary, I think of $400 per 



'S3 

54 1 month, but I am not sure whether it was that 
amount or not; it was not necessarily to be in 
creased to $450 or $500 the next year. I did not 
promise it to him. I am sure of that. 

(A letter is shown witness which is identified 
as having been written by him, and is offered in 
evidence and read as follows :) 

"Sept. 3rd, 1885. 

Dear Stone: 

I did not see last month's account until 

542 yesterday, when I noticed that you drew only $350. If I 
remember rightly this w^.s the amount you drew last 
year, ending Jane 30th, 1885, and as I understood, it 
has been settled that you were to have $400 next year, 
that is from July, '85 to July, '86, $450 from July, 1886, 
te July, 1887, and then $500 so please draw accordingly. 
Enclosed is a letter to Ora Oak, which, if it meets with 
your approval, please forward. 

H. H. B." 

[Marked "Plaintiff's Exhibit 9."] 
That letter shows that it is settled. That was 
(-43 talked over between Stone and myself; I was 
satisfied for him to receive that amount, so far as 
I was concerned, but the matter had never been 
submitted to or determined by A. L. Bancroft 
& Company, which was a corporation. It never 
had come up before the Board of Directors; it 
had never been passed upon by A. L. Bancroft & 
Company. So far as I was individually concerned 
I was satisfied with that amount, but it was no 



544 expression of anything, because it was in a 
tangled shape, and nothing he could trade on. I 
say that so far as I was concerned, it was settled 
that I was willing to do that. I did not know 
I could do that when I wrote the letter, not by 
myself, it required the Board of Directors of the 
corporation to confirm it. I could not entirely 
have his salary fixed at that figure by myself; I 
did not know that I could have it fixed at that 
when 1 wrote the letter. As I have explained, 

' so far as I was concerned, it was satisfactory to 
me but it had to be confirmed by the company. 
It was settled between him and me, provided 
everything was satisfactory ; that was under 
stood. I told him to draw accordingly, lie might 
draw. It was not settled that he was to have 
that salary ; it was settled between him and me, 
and in the meantime he could draw, and if the com 
pany ratified or sustained me, it was all right. I 

546 do n t pretend that was in the letter, but it was 
understood. Everything was understood. I was 
willing it should be done, but I did not promise. 
He says it was settled. The property I conveyed 
to the History Company consisted of plates, 
paper, and we have those plates yet. The com 
pany has had the use of them right along, and I 
have had the benefit, of course, in accordance 
with my shares in the company. The paper was 



547 used up. Besides money and outstanding accounts, 
there were these orders that cut a very large figr 
ure, and contracts with subscribers; that repre 
sented the subscribers, and also, in a great many 
cases, the amount of money. It is classified here 
as money. We had paid for taking those con 
tracts; we paid from $25 to $75 apiece for taking 
the order, that represented actual money paid out. 
I don't think Stone obtained any of those orders 
that were taken. They were taken by men paid 
for with money out of my pocket. 

(Witness is shown a book called " Literary In 
dustries," which he testifies was published by the 
History Company under his supervision, from 
which the following extract is read:) 

" Mr. Stone had followed me in my historical efforts 
with great interest from the first. He had watched the 
gradual accumulation of material, and the long labor of 
its utilization. He believed thoroughly in the work, its 
plan, the methods by which it was wrought out, and the 
great and lasting good which would accrue to the country 
from its publication. He was finally induced to accept 
the important responsibility of placing the work before 
the world, of assuming the general management of its 
publication and sale, and devoting his life thereto. No one 
could have been better fitted for this arduous task than 
he. With native ability were united broad experience 
and a keen insight into men and things. Self-reliant, 
yet laborious in his efforts, bold, yet cautious, careful in 
speech, of tireless energy, and ever jealous for the reputa 
tion of the work, he entered the field determined upon 
success. A plan was devised wholly unique in the annals 



1 86 

of book publishing, no less original, no less difficult of 
execution than were the methods by which alone it was 
made possible for the author to write the work in the 
first place. And with unflinching faith and loyalty Mr. 
Stone stood by the proposition until was wrought out of 
it the most complete success." 

I was aware of this matter being published in 
the book when it was published. It was not pub 
lished without my knowledge, that is supposed to 
be history. This is not history, it is personal 
reminiscences; I published it as true, and believed 
it to be true. I believed at that time that all I 
said of Mr. Stone was true. My history needs 
some explanation. This book was published in 
1890, and I knew when it was published; I knew 
it was sent forth to the world. That biography 
was written by me in Cheyenne in the year 1884 
or 1885, and while I was in Cheyenne and writ 
ing that there, he was playing the traitor, trying 
to sell me out to my brother on some proposition. 
If I had known at that time what I know now, I 
would not have allowed this to be published in 
1890; I should not have printed it if I had been 
as fully advised as I am now. I would not say 
that if I had known in 1890 what I learned be 
tween 1884 and 1890, I w T ould not have allowed 
the book to go out with that statement. I wanted 
to avoid an eruption with Stone, and if I had 
left that out there would have been trouble. I 



.8 7 

553 revised the book and published another edition; 
that was a year or two later; it was in 1891 or 
1892. I don't know if I was to publish this 
again if I would not print it now. I have never 
wanted to do anything that would injure Mr. 
Stone in any way. I might probably publish now 
what I said there, if I were printing it; I would 
not change it at all. In 1890, when the second 
edition was produced, it was greatly reduced in 
volume. I cut out a great many things; it is 

55^ reduced a good deal. Precisely the same thing 
was published in that edition as was in the first 
one, and it goes to show I did not want any 
quarrel with Mr. Stone. I did not want a row 
with him. 

Q. You told the truth about him because you 
did not want a row with him ? 

A Yes, as far as you tell the truth in giving 
the good qualities of a man in his biography, 

ere leaving out the bad about him. When you speak 
of the facts a man has done you must not neces 
sarily tell the truth about it, or let him alone. 
You can state the good things he has done in 
business and praise him for that, and overlook 
the bad and that is about what I did. I could 
say a great deal bad about the man after I had 
said what I did here in his praise; I did not say 
everything bad there that could be, said. 



1 88 

556 Q. (Reading from the work written by de 
fendant:) 

"Mr. Stone had followed me in my historical efforts 
with great interest from the first. He had watched the 
gradual accumulation of material, and the long labor of 
its utilization. He believed thoroughly in the work, its 
plan, the methods by which it was wrought out and the 
great and lasting good which would accrue to the country 
from its publication. He was finally induced to accept 
the important responsibility of placing the work before 
the world, of assuming the general management of its 
publication and sale, and devoting his life thereto. No 

557 one could have been better fitted for this arduous task 
than he." 

Do you see any place there where you could 
have said anything bad about him ? 

"With native ability were united broad experience and 
a keen insight into men and things. Self-reliant, yet 
laborious in his efforts, bold, yet cautious, careful in 
speech, of tireless energy, and ever jealous for the reputa 
tion of the work, he entered the field determined upon 
success." 

558 That was all true? 
A. Yes, sir. 

Q. "A plan was devised wholly unique in the annals 
of book publishing, no less original, no less difficult of 
execution than were the methods by which alone it was 
made possible for the author to write the work in the first 
place. And with unflinching faith and loyalty, Mr. 
Stone stood by the proposition until was wrought out of it 
the most complete success." 

That was all true ? 



189 

559 A. I should not say that lie was not loyal 
now. That is about the only word there that I 
would qualify. As I have said I made Stone a 
present of 5 per cent additional of the stock of 
the History Company; that was entirely without 
any consideration, but out of my own generous 
feelings. There had been some talk about a 
musical department. Mr. Stone went East to get 
some agency; we wanted the Steinway and some 
other, and failed entirely to do that; failed to ac 
complish anything. On that expectation, and in 
consideration of that partly, and partly to bind him 
further to the proposition, I gave him the 5 per 
cent without any solicitation or any idea on his 
part he was to get it until I handed it to him. 
The reason I gave him the stock was from gener 
osity, and to make him loyal to my interest. The 
value of the gift was about $25,000 as it turned 
out. I viewed it at the time as a gift to him, and 

O 

r^j as a matter of fact it put at least $20,000 in his 
pocket. His labor never brought me anything 
except to collect and apportion out the money I 
had paid in. He had received 5 per cent and got 
$20,000 in the way of dividends. I did not get 
it from his efforts, I got it from money put in 
from A. L. Bancroft & Company, which was put 
in by me, which had been from a lifetime of labor 
and it was that money which was coming back, 



562 and not money that Stone had earned in any way. 
The letter written by me to Stone congratulating 
him on the first dividend, and saying that it was 
to him alone that the success was due, was rather 
exaggerated; I feel that the letter was more 
exaggerated now than at the time I wrote it. 
Circumstances have changed since then. I knew 
how the business had been conducted up to that 
time, knew what the results were, and knew that 
it had resulted in a dividend. I think I got 80 

s- -? 

** per cent or 85 per cent in dividends; the differ 
ence was that I was getting back my money, and 
was getting none of his money: I had no fault to 
find with Stone; at the time when I wrote him I 
meant praise ; I spoke kindly to him and encour 
aged him to go forward and do all he could. I did 
not think the facts were misrepresented to him, to 
construe that statement literally would be to say 
that Stone wrote the history as published, and he 
had got the dividends out of his own labor and 
capital. It is not a fact that I and Stone and a 
third party organized what was called the His 
tory Company of Mexico; I think there was 
some talk of using that term down in Mexico. 
We did not organize a company in the fall and 
lose from $30,000 to $40,000; we did not organize 
any company at that time that I have any recol 
lection of. It was talked of, and I think we used 



565 the name of Mexico, but without any organiza 
tion or any significance in particular. We did 
some business. The third party was Urrea; he 
was merely engaged. There was no agreement 
that Mr. Stone was to have anything except as it 
belonged to the History Company, and his profits 
were to come in under that category. There 
never was any arrangement that Urrea should 
have two-fifths and that Stone and I were to have 
three-fifths. We may have talked of something 
of that kind, and if so, it entirely went out of my 
mind. 

(Paper shown to witness, which he identified 
as being in his handwriting, which is offered in 
evidence and read as follows:) 

" BASIS OF BUSINESS. 

N. J. Stone and H. H. Bancroft will ship goods to Mex 
ico for R. Urrea to sell, Urrea to act as manager, with a 
salary of $250 Mexican money a month, and 2-5 of the 
567 profits, while Stone and Bancroft will have 3-5 of the 
profits without salary and attend to Cal. and U. S. pur 
chases, all goods from the United States to be ordered 
through them exclusively, and the money remitted to 
them for the same. 

Stone and Bancroft to appoint the Cashier, and be 
responsible for his acts. The Cashier will receive and 
account for all money and goods, keep such books and 
write such letters as are necessary, or as he may be able 
to do ; have charge of store and goods, and be responsi 
ble therefor ; make out monthly report, keeping one copy 
on file and rendering a copy to Stone and Bancroft and a 



192 

^68 c Py to Urrea ; every three months rendering a full 
statement of condition of business, with division of pro 
fits, 2-5 to R. Urrea and 3-5 to Stone and Bancroft. The 
business must be done strictly for cash, no money bor 
rowed, nor debts of any kind contracted. Until the His 
tory Company of San Francisco is fully paid for all grtods 
sent, all receipts except Histories in Mexico to be taken 
by Mex. Co. at ^ retail price, American money, but not 
to be charged up at once, but only accounts can be 
adjusted, the whole time however not to exceed six 
months. The Mex. Co. to have the benefit of all sub 
scriptions taken up to this time (March 10th, 1887) free 
of charge, but to stand expense of settlements and col- 

569 lections of Vols. that is to say, to clean up the History 
business in Mexico free of charge. This does not include 
the 100 sets first sold to Govt. on which the Mex. Co. are 
to receive 5 per cent. com. for delivery and collection, 
with no further commissions to outsiders ; no one con 
nected with the business may overdraw his account, or 
use any of the money of the business except for its own 
legitimate purposes, no money of the business is ever to 
be loaned to any person or persons under any considera 
tion ; no one in the service of the Company is to do busi 
ness on his own account. 

A. R. Urrea is to hold himself personally responsible 
to Stone and Bancroft for the faithful performance of 

570 agreement so far as he is concerned. Prices of History 
delivered in S. F. in American money, ^ of retail price ; 
Life of Diaz, the same. Small History of Mexico, the 
same. Readers, prices to be made according to cost. 
After first shipment of goods by History Co. of Cal. and 
the cleaning up of Histories scattered through the Re 
public, all orders of History Co. Mex. to History Co. Cal., 
are to be accompanied by the money. 

The Cashier to send A. R. Urrea a copy of the monthly 
report, and of all reports, wherever he may be ; and the 
History Co. of Cal. to send the History Co. of Mex. a 
statement of accourt every month. The History Co. of 



193 

cyi Mex. are to have the exclusive sale of Bancroft's Works 
in Mexico and Cuba, and on all orders taken by the His 
tory Co. S. F. are to be allowed to the Mex. Co. a com., 
the same as if taken by the History Co. Mex. 

Should any question arise which cannot be settled by 
the parties themselves or deputies, such matters shall be 
settled by arbitration, in the usual way, in San Francisco ; 
neither Urrea, Stone nor Bancroft shall dispose of their 
interest in this business, or any part of it, except to the 
others, or either one of them, until the business is incor 
porated. 

The History Co. of Mexico has the right to sell Life 
of Diaz and Readers ; and Spellers, wherever it may 

572 choose ; but this does not prevent the History Co. of Cal. 
from selling the same anywhere outside of Mexico and 
Cuba. Any person traveling at the expense of the busi 
ness at any time, must on his return file with the Cashier 
a written statement of his expenses, before the same be 
allowed. 

r , Robert Vantright is to be the first Cashier, with 
expenses paid from S. F., and a salary to begin when he 
starts, of $150.00 a month, Mexican money. 

Urrea's expenses to be from S. F. and his salary to date 
from first of March." 

We did not begin business in Mexico upon that 
573 basis; that is a scratch of a paper that I made out, 
a scheme that was running in my head one day 
. and Stone got it and kept it to bring it here in 
this case as an important matter, as an agree 
ment. It was not an agreement, that paper was 
not signed and never was in effect in any way. 
We did not ship any goods to Mexico under that 
transaction. We never shipped any goods on ac 
count of myself and Stone and Urrea. Urrea 



i 9 4 



574 went down there to 3ell goods, bat we never 
trusted him; we didn't begin business in Mexico; 
I did not have prepared a set of school books or 
readers under that memorandum. Stone and 
Urrea and I did not start business there and have 
prepared a set of school books, readers; the His 
tory Company did it, not Stone. Stone and 
Urrea and I did not prepare school books for 
Mexico, and begin trading with them or selling 
them. We prepared them, or the History Coin- 
pany prepared them here, and they were shipped, 
but not Stone and Urrea and myself in partner 
ship. They were made and shipped to Mexico 
and sold there, some of them. We got up sev 
eral series and shipped them there; we had 
several men attending to the selling of them; 
Urrea was one until he proved to be a rascal, and 
then we had another one, and, finally, the last 
rascal we got there was Trigo. All of them 
proved unfaithful. I discovered Trigo to be a 
rascal after he came back here, and had some 
lawsuit with me. To the best of my recollection, 
the memorandum shown me was simply a mem 
orandum that was on my desk and fell into Stone's 
hands, and nothing whatever was done under it; 
no books were opened, and no books were kept to 
the best of my recollection. I had forgotten all 
about this. I did not say that the paper was not 



195 

577 intended to be delivered to Stone, and that he 
found it and kept it ever since for the purpose of 
some law suit; I did not say he took it from my 
desk. I say I scratch off such things very often, 
schemes that come into my head, and I handed 
them to him, submitted them to him. I don't 
know whether it was taken from my desk or I 
handed it to him. As a matter of fact, that 
.property was all given to him. He never paid 
anything on that arrangement. The paper is not 
*' dated that I can see I say the paper had passed 
out of my mind altogether; I have no recollec 
tion of the paper at all, it was a simple memo 
randum of something; I do not know where it 
was written. I do not remember where I was on 
the 10th of March, 1887. 

(Letter shown witness, which he admits to be 
in his handwriting.) 

This paper indicates that I was in the City of 
cjg Mexico on the 9th of March, 1887; without re 
ferring to this I don't remember where I was at 
that time. I should say I was in the City of 
Mexico on the 9th of March. 

(Looking at the page of the memorandum al 
ready offered in evidence.) 

From this, I should say I was in the City of 
Mexico at the time that was written; that I 
wrote it there and mailed it to Mr. Stone, it could 



196 

580 hardly be otherwise. I did not say that it was 
written in San Francisco and on my desk, and 
that Stone got it in a surreptitious way. I said I 
was in the habit of scratching off memoranda; it 
seems that I scratched that off in the City of 
Mexico and sent it to him. I do not remember 
that I enclosed it in this letter; I presumed I 
mailed the letter to Mr. Stone, very likely at that 
time, Mr. Urrea was down there with me at that 
time, if I remember rightly. We did not make 
[ books and ship them down under that arrange 
ment. I do not remember anything about show 
ing this to Urrea, it has passed entirely out of 
my mind; there was nothing done about it that I 
know of. This was not sent by me to Stone as a 
basis of a business proposition which I desired 
him to enter into with me and Urrea. 

Q. This is a letter you have already identified, 
the last one I showed you dated from the City of 

-g 2 Mexico. March llth. I will read a portion of 
the letter: "I will leave letters for Vantright, 
and a copy of the basis of business which I send 
you, so that he will have the situation before him 
as well as I can give it to him. Urrea expects to 
be gone about a week, but probably Vantright 
will get there before Urrea returns, though not 
long before. I have taken the greatest pains to 
make everything clear, both to you and Vant- 



i 9 7 

583 right so that the business here may be intelli 
gently followed by you from the beginning. I 
have done what I came to do. I might see more 
people if I should stay longer, but it would 
amount to nothing. I would be glad to get more 
money, but I should have to stay a month or six 
weeks longer for it, and I know it is in shape now 
for Urrea to get. I hope you will so get this 
business in hand as to be able to manage it with 
out much extra wear upon yourself. I shall have 
" to leave this and everything else before very long 
entirely with you, after you, that and I hope to 
see the day when everything will be on such a 
thoroughly sound and profitable basis as to run 
without the heavy care and risk it is now under; 
in fact, it has got to come to that, and if we now 
work and extend here and there, it is one day, 
and that not very far distant to drop what does 
not pay, even if in the end we come down to a 

rgc peanut stand." You gave a copy of that also to 
Urrea and Vantright, mentioned in that letter ? 
A. I think not, no sir. I should infer from 
the letter that both Urrea and Vantright that 
neither of them were there at that time. I say 
it passed out of my mind, that whole thing, as a 
matter of fact Vantright got there shortly after 
that. If I remember right, Urrea shortly went 
out of the whole thing, and nothing came of it. 



198 

586 I don't remember whether after my return to San 
Francisco, I spoke to Stone about this paper, or 
not. I spoke to him about the Mexican business 
as a matter of course, and we were talking about 
business all the time, one thing and another. I 
presume after this letter of March 10th, I con 
sulted with or wrote Stone concerning the pros 
pects of business in Mexico ; I don't remember 
anything of the kind, but it would be strange if 
I did not. I may have talked to him about enter- 

^ ' ing into, or carrying out business on this basis, 
but I have no recollection of anything about it, 
it fell to the ground, and there was nothing done 
under it. When I returned to San Francisco, 
there was no business talk that I can now remem 
ber. I would not say that this written basis of 
business that I sent him from Mexico was never 
referred to after my return ; I do not remember 
speaking about it ; there is nothing more that I 
recollect about it than appears from these papers. 
I do not rember sending the goods to Mexico by 
Urrea, the result of which was a loss of $30,000 
or $40,000 ; such a loss did not result through 
Urrea. We sent down some goods, I think he 
sent for. He was there and Vantright went 
down and took charge of those goods, and Urrea 
left some time after that, and has had nothing to 
do with the business since. I don't remember 



i 9 9 

589 that there was any loss on his trip down there ; 
there was no association that sent goods to Mex 
ico except the History Company. If Stone and 
I were charged on the books of the History Com 
pany with the goods sent to Mexico, they should 
not have been so charged. I have no recollection 
of having consulted with Morrison to any extent 
as to the removal of Stone from the office of 
Vice-President of the Company ; it may have 
been alluded to that if he did not do better than 
he was doing, he might have to change. I have 
no recollection of consulting with Morrison about 

O 

that matter. I have no recollection of talking to 
Morrison about it ; it seems to me that something 
came up in case that Stone was not elected. I 
did not say that I did not talk with Morrison 
about it, but I have no recollection of it. I did 
not remove Mr. Stone after my return ; I do not 
know that you could call it a removal at the 
en! next election of officers, he was not elected and 
Mr. Morrison was. I think Mr. Morrison was 
not there at the time. Morrison could not have 
been elected without my wishing him to be so. 
The duties which Stone had been performing did 
not devolve upon Morrison after his election. 
Mr. Stone attended to his business as manager, 
and Mr. Morrison to his as Vice-President, and 
attended to outside business. We had never 



200 

592 elected a manager; the by-laws did not provide 
for a manager. The business began to decrease 
after the sale of the histories ; no other business 
was added to it ; it required some work on the 
part of the management to supply the entire 
market with the history ; that end was accom 
plished largely before the organization of the His 
tory Company. At that time there were some 
7,000 and two or three hundred good orders on 
the books. At the time Mr. Stone left, when it 
was W ound up, counting all that had been deliv 
ered, there were some 6,000 good orders, show 
ing a loss during his term there of over 1,000 
good orders instead of a gain ; some of them 
turned out bad ; there was no increase but rather 
a decrease in the number of good orders during 
the time that Stone served as manager of the 
History Company. Some of the orders taken 
before the Bancroft fire were bad. It may have 
keen that the great bulk of the orders which 
turned out bad were taken before the fire, 
although I don't think so. If they were, Mr. 
Stone took them as bad orders and paid out good 
money for them. There were nearly 10,000 
orders taken altogether ; I don't think they were 
all taken before the fire. Besides all that were 
marked as bad, the number that went into the 
History Company at the time of its organization, 



201 

595 there were some seven thousand and two or three 
hundred, the actual value of which it is hard to 
give ; they were supposed to be good at the time 
and were so counted and accepted. A good 
many of them were not collected, I don't know 
exactly how, at the end of the term, there were 
1,000 less good orders than when it started. A 
good many of the orders that Stone took before 
the organization of the History Company turned 
out bad, and some he took after the organization 
of the History Company turned out bad, but I 
don't know what proportion of the lot. I say 
most decidedly that Stone helped to wreck the 
business. I did not intentionally have anything 
to do with wrecking the business. I worked very 
hard for the business during the whole time, 
receiving no salary for it, and if it is wrecked, I 
don't think it could be charged to me. It is 
pretty well wrecked. During the time Stone was 
in the management of it, it was wrecked past 
redemption. My judgment is that Stone wrecked 
it and not myself. It is not a fact that I wrote 
and published things which caused the wreck and 
ruin that I have spoken of. 

RE- DIRECT EXAMINATION. 

I have no recollection of ever having placed a 
saw-horse on the desk of Mr. Stone ; I may have 



202 

598 done so. There were some saw-horses in the aisle 
where they walked along, and his desk not being- 
used, I may have picked up a saw-horse and laid 
it on the desk. I don't remember it. I don't 
remember kicking any basket. The money fur 
nished in this Mexican business to make up what 
ever loss was incurred in it came from the His 
tory Company, but in reality it came from me. 



GEORGE H. MORRISON 

was recalled for further cross-examination, and 
testified as follows : 

I know Mr. Boyns. I first met him about 
three years ago. I do not remember whether I 
knew him in June, 1889. I knew him as an 
employee of the History Company. 

Question by plaintiff's counsel : I will ask you 
if it is not the fact that while Mr. Boyns was an 
600 employee of the History Company, between Sep 
tember, 1889, and March, 1890, at the History 
Company's office, in the City and County of San 
Francisco, you did not point to Mr. Stone and 
say to him, (Boyns), "That man is a snake in the 
grass, he is a bad man, look out for him, have 

O ' * 

nothing to do with him," or words to that effect ? 

This question was objected to by defendant on 

the ground that it was irrelevant and immaterial, 



203 

6oi and not cross examinntion, and as Laving taken 
place two years before Mr. Stone claimed to have 
left the History Company, and on the further 
ground that this witness is not a party to the case, 
and the defendant could not be bound by his state 
ments to Mr. Boyns, or anybody else, that Mr. 
Stone was a snake in the grass, and that it is a 
collateral matter. 

Mr. REDDY : It is the purpose of laying the 

foundation for contradiction on that point. This 

602 

witness stated that he had never said anything 

by way of criticism of a fellow officer or anybody 
else. 

The objection was overruled by the Court, to 
which ruling defendant duly excepted. 

Exception No. 34. 

A. I don't remember using any such expres 
sion to Mr. Boyns, or any one else. 

I know Mr. S. B. Moore. I have known him 
6 O , about the same length of time that I have known 
Mr. Boyns. 

Question by plaintiff's counsel : Do you remem 
ber having said to Mr. S. B. Moore at the place 
I have named in the History Company's office 
along about July, 1889, that Mr. Stone just the 
same as robbed him by discriminating against him 
in the allowance of commission, and that it was 
just the same as taking money out of his pocket, 
or words to that effect ? 



2O4 

604 Tliis question was objected to by defendant on 
the ground that it was irrelevant and immaterial, 
and not cross examination, and entirely collateral 
to any question presented here. 

A. I have no recollection of any such conver 
sation. 

Witness continuing : Mr. Stone was then 
managing the business ; the matter was entirely 
in his hands all the details. I had nothing to 
do with making contracts or fixing commissions. 
If some money was taken out of Mr. Moore and 
paid to the company, I would be a participant in 
the profits with them. I have no recollection of 
any such conversation either with Boyns or 
Moore. I remember that Stone was not very 
regular in his attendance at the business during 
the latter part of the term. During the latter 
months, after my return from Mexico, he was not 
very faithful in his attendance at the office. I do 
606 1)O t mean to state anything as to the manner in 
which Stone transacted the business at the office 
prior to my return from Mexico in 1892. When 
I gave my testimony on that subject, it was in 
relation to his attendance after my return from 
Mexico. Stone never made any application to me 
that I remember to have his desk removed from 
one part of the History Company's office to any 
other part. If he had done anything of that 



205 

607 kind, I should remember it. I never told Stone 
that he had no right in the History Company's 
office. 

DEFENDANT RESTS. 



W. C. BOYNS 

, was called as a witness for plaintiff in rebuttal, 

^ Q 

and after being duly sworn, testified as follows : 
I had conversations on several occasions with 
Mr. Morrison concerning Stone while I was an 
employee of the History Company. My employ 
ment began there in September, 1892, I think, 
but I am not sure. I had a conversation with 
Mr. Morrison in the History Company's office, in 
the City and County of San Francisco, while I 
was an employee of that company several con- 
600 versa tions concerning Mr. Stone, two or three 
that I can say positively. 

Question by plaintiff's counsel : State whether 
you had any conversation with Mr. Morrison in 
the month of September, or at any other time, 
between the month of September, 1889, and 
March, 1890, have a conversation in which Mor 
rison said, pointing to Stone, " That man is a 
snake in the grass, a bad man," or words to that 



206 

610 effect. This question was objected to by defend 
ant on the ground that it was irrelevant and im 
material, that it was an attempt to contradict the 
witness on a collateral matter. 

A. Yes sir ; that expression was used by 
Morrison with reference to Stone on several occa 
sions. He said Stone was a snake in the grass, 
that he was a bad man, and no good generally. 
I cannot recall any specific occasion ; it was sim 
ply the general tenor of his instructions to me 
when he would go away, that I was not to have 
any dealings with Mr. Stone, for the reason that 
he was no good. I cannot remember the exact 
words he used. 

CROSS-EXAMINATION. 

Those were practically standing instructions to 
me. I knew that Stone was the manager of the 
History Company, but I was not working under 
him. I have no feelings toward Mr. Morrison. 
I have not a very high opinion of his character. 
I don't feel friendly towards Mr. Bancroft. I 
have no friendly feelings towards him. I have 
some litigation pending against the History Com 
pany now. 



S. B. MOORE 
was called as a witness for plaintiff in rebuttal, 



207 

613 and after being duly sworn, testified as follows : 

I reside in San Francisco, and am an under 
writer for the New York Life Insurance 
Company. I know Mr. Morrison, and was 
acquainted with him during- the year 1889. I 
was employed by the History Company during 
the whole of that year. 

Question by plaintiff's counsel : State whether 
or not you heard Mr. Morrison, at the History 
Company's office, in the City and County of San 
Francisco, in the month of September, 1889, or 
at any other time between that and the first of 
March of the following year, say to you that Mr. 
Stone had as good as robbed you in discriminat 
ing against you in commission, and that it was 
equivalent to robbery, or words to that effect? 

The question was objected to by defendant, on 
the ground that it was irrelevant and immaterial, 
and an attempt to contradict the witness on a col- 
615 lateral matter. 

The objection was overruled by the Court, to 
which ruling defendant duly excepted. 

Exception No. 35. 

A. I did sir. 

CROSS-EXAMINATION. 

When I was employed by the History Com 
pany, I was engaged by Mr. Stone. Colonel 



208 

616 Morrison told me that Mr. Stone had nothing 
more to do with the work I was engaged in the 
last few months I was with the company, that I 
should not consult with him at all about it, but 
that Morrison was the man, that Mr. Bancroft 
had made him the manager of this particular 
department, and I should look, not only to him 
self, but to Mr. Ruddick and Mr. Boyns, who 
were under him. So far as pay was concerned, I 
was under Mr. Stone's orders, but I was under 
' Mr. Morrison's orders. I don't know that I have 
any particular feeling towards Morrison, only he 
has made statements that don't seem to hold out 
as reported. That was in reference to my com 
mission with the company. He made! some 
misrepresentations about my commission. In 
the conversation which I have testified 
to, Morrison told me that I ought to have 
had more compensation than Stone was willing to 

618 S* ve me - ^ ^at particular time, as far as the 
engagement was concerned, I was with Stone ; I 
should say the bargain was made with Stone for 
this office, and then very much to my astonish 
ment, Mr. Morrison told me that Mr. Stone had 
nothing to do with the bureau, that Mr. Bancroft 
had placed him at the head of it, and I should 
have nothing to do with Mr. Stone whatever. 
He told me that Stone had paid me the very 



209 

619 smallest amount that anybody in the agency had. 
He said, "Mr. Moore, it is like putting his hand 
in your pocket and taking out your good gold, doing 
as he has done ; it is simply robbery," arid then 
he reiterated what he said to Mr. Boyns that he 
was a snake in the grass, and that he wished me 
to have nothing to do with him ; consequently, I 
told him, that thereafter I would not go out 
through Mr. Stone's office, but I would go out of 
the front office, which he told me would be the 
proper thing to do, so that I would not 
come in. contact with Mr. Stone. He told me 
that Stone was a snake in the grass and a bad 
man, and to have nothing to do with him. I 
thought at the time that he was telling me the 
truth, and I afterwards went and examined the 
books. That is the sum and substance of the 
conversation which I had with Mr. Morrison, 
that he wanted me to have more money from the 

6 2 x History Company than Mr. Stone was willing 
to pay me, for the business I had done. 



N. J. STONE, 

the plaintiff, was recalled as a witness for plaintiff 
on rebuttal, and testified as follows: 

I heard the testimony of Dr. Miller while he 
was on the stand, in which he said I had not paid 



210 

622 him the $500 which he charged me for personal 
services to my boy. 

Question by plaintiff's counsel : State whether 
you paid that to him, or not ? 

This question was objected to by defendant on 
the ground that it was irrelevant and immaterial, 
and an attempt to contradict Dr. Miller on a 
question entirely collateral, and brought out by 
plaintiff on cross-examination, and objected to at 
the time by defendant. 

MR. REDDY : If Your Honor please, it would 
be hardly fair to bring Dr. Miller here on the 
stand and put this witness in the light of having 
refused to pay anything for services rendered, and 
not permit him to show the real fact, or contra 
dict him if we can. 

MR. McCuTCHEN : We brought Dr. Miller 
here to testify to such things as we considered 
relevant, and counsel went out of the way, in 
624 s P^ e f our objection, and insisted that Dr. Mil 
ler should state the facts in relation to the ser 
vices rendered to the plaintiff's boy, and the ren 
dition of his bill therefor. This was on his cross- 
examination and against our objection. 

The objection was overruled by the Court, to 
which ruling defendant duly excepted. 

Exception No. 36. 

A. I did pay him the bill. I paid $500. 



211 

625 I never told Mr. Elliott the History Company 
was going to pieces. I never said anything to 
him about the condition of the History business. 
I never stated to Mr. Bancroft in any conversa 
tion with him that I would bring suit and break 
up the business of the History Company. Mr. 
Bancroft never presented to me 5 per cent of 
the stock of the History Company. Prior to the 
purchase of the Bancroft Company in 1887, and 
between that time and the organization of the His 
tory Company in 1886, Bancroft and I were 
associated together, in the Mexican Company. 
We were equal partners in publishing books and 
selling them in Mexico, together with Mr. Urrea, 
according to an arrangement we entered into 
together, we did not draw papers, that was the 
understanding, that we were to manufacture 
books and send them to Mexico, and carried on 
the business. After the purchase of A. L. Ban- 
croft by the Bancroft Company, the subscription 
department of A. L. Bancroft was taken at once 
in the History Company and became a part of it, 
and Mr. Bancroft and I were equal partners in 
that, and we also secured the agency, Eastern 
agency, for books and he and I were equal part 
ners in that, and we were also equally interested 
in the Bancroft Company. After we had 
arranged these matters, I was placed in the posi- 



212 

628 tion of being an equal partner in the Bancroft 
Company, a business down stairs which was all 
right, and up stairs I was in charge of the sub 
scription department and I was in charge of the 
Mexico branch of the History, in which I had 
one-half, and I was owner of ] per cent of the 
History Company, and I told Mr. Bancroft it 
was a very awkward position to place a man in, 
and I thought he should adjust that matter ; I 
only having an interest of 10 per cent of the 
stock in one part of the business and 50 per cent 
of the other, so afterwards in settling that mat 
ter, we decided he should issue to me 5 per cent, 
more of the History stock, and my interest in 
the entire thing should be 15 per cent and that 
was the arrangement, and that was done. We 
carried on business in Mexico under that arrange 
ment, and it continued up to the time I was 
deposed as Vice-President. The History Com- 

610 P an y became responsible in San Francisco, and 
paid for the material that was sent to Mexico. 
We paid it in San Francisco from the general 
funds, with the understanding that that was to be 
the first money that was paid back, and 
after that we were to divide the profits. That 
was the consideration upon which the 5 per cent 
of the History Company's stock was delivered to 
me by Mr. Bancroft. It is not a fact that the 



213 

631 dividends that were paid by the History Com 
pany came from the collections of accounts and 
matters which Bancroft had transferred to the 
History Company. They came from the orders 
that were taken very largely after the organiza 
tion of the History -Company ; after the fire. 
Only a small proportion of the accounts trans 
ferred by Bancroft to the History Company were 
collectable. I know that over 60 per cent of the 
orders which remained on the books at the time 
^ of the fire, were cancelled as worthless. A great 
deal was found to cost as much to collect as it 
was worth. 

CROSS-EXAMINATION. 

I was the manager of the department. This 
Mexican business, on the basis of which I got 5 per 
cent more of the stock of the History Company, 
got all its money from the History Company to 
633 P av a ^ *ts expenses, and at the time that money 
was being paid out 90 per cent of it belonged to 
Mr. Bancroft and 10 per cent of it belonged to 
me. Yet I was to have 50 per cent of it, and 
he was to have 50 per cent, although his money 
was used in that proportion to build up the busi 
ness, and I was to manage it. I did not pay out 
a dollar individually in entering into this Mexi 
can enterprise, of which I was to get 5 per cent 



214 

634 f th e stock of the History Company, it all came 
out of the History Company in which I had an 
interest of but 10 per cent, and when I got 
through with all these transactions, I had 1 5 per 
cent of the stock without paying out any money, 
whereas I only had 10 per cent before that. The 
demand which I made on Mr. Dorland was 
shortly after the first of January, 1893. I can 
not tell the date. It was taken down by a short 
hand reporter, who may have written it up, but 
^ I don't know. Mr. Borland's reply was that he 
had no authority and would not allow me to go 
to work there, that Mr. Bancroft was away and 
he was not in charge, and he had no authority 
and would not permit me to go to work. That was 
his language, I am quite sure of that. We had 
several more conversations back and forth. That 
was all he said on that subject. I asked him if 
he was in charge, and he said he was. I asked 
him if he would let me go to work and he said 
he would not, that he had no authority to let me 
go to, work, that he would not let me go to work. 



Thereupon, the testimony was closed. De 
fendant moved and requested the Court to sub 
mit to the jury the following special issue, to wit: 



215 

637 Were the services claimed to have been per 
formed by the plaintiff rendered for the History 
Company, or for the defendant ? 

The motion and request were denied by the 
Court, to which ruling defendant duly excepted. 
Exception No. 37. 

Thereupon, the Court charged the jury, as fol 
lows : 

CHARGE TO THE JURY : 

GENTLEMEN OF THE JURY : This is an action 
630 

brought by N. J. Stone against H. H. Bancroft, 

setting up as the foundation of the suit, a con 
tract which has been read to you several times 
during the trial, and alleging that the plaintiff has 
honestly and faithfully performed all the terms 
and conditions of such contract, and that the 
defendant has failed and neglected to perform the 
terms and conditions upon his contract to be per 
formed, and has failed and neglected and refused 
639 to pay the stipulated amount as claimed to be pro 
vided in the contract, and demands judgment in 
the sum of forty-nine hundred dollars for salary 
for fourteen months, at the rate of three hundred 
and fifty dollars a month, and claims in the prayer 
that the plaintiff is entitled to forty-nine hun 
dred dollars and interest thereon, at the rate of 
seven per cent per annum. The answer 
denies that the plaintiff has honestly and faith- 



2l6 

640 fully or honestly or faitlifull}' or otherwise per 
formed the terms and conditions of the contract. 
And denies that the defendant has failed and neg 
lected to perform the conditions of the contract 
mentioned in the plaintiff's complaint upon this 
defendant's part to be performed ; and denies, that 
he agreed under said contract to pay to plaintiff 
the sum of $350 for his services and denies that 
there remains due and unpaid under the contract 
the sum of $4900, or any sum whatever ; and for 
a further and separate answer to plaintiff's 
complaint, the defendant avers that on the 23d 
day of September, 1886, the History Company 
mentioned in the agreement set forth in plaintiff's 
complaint was duly incorporated under and by 
virtue of the laws of the State of California, 
under the name of the History Company, and 
that ever since said date, the said History Com 
pany has been and still is a corporation duly 

642 organized, and by virtue of the laws of the State 
of California, have been engaged in business in 
the City of San Francisco, State of California ; 
that immediately upon the incorporation of said 
History Company, defendant transferred to the 
said corporation, the properties mentioned, in said 
agreement set forth in plaintiff's complaint, and 
thereupon both plaintiff and defendant became 
and ever since have been and now are stock- 



217 

643 holders of and in said corporation, arid after the 
formation of said corporation carried on and con 
ducted the business mentioned in said agreement, 
and defendant has had nothing to do with the 
business since that time, except as an officer of 
the said corporation; that from the date of the 
incorporation of the said History Company until 
on or about the first day of July, 1892, plaintiff 
acted in the capacity of general manager thereof, 
but plaintiff has not at any time since the forma- 
"" tion of said corporation, or at any other time 
since the date of the said agreement, performed 
for or rendered any services to the defendant 
_ whatever ; and further answers that ever since on 
or about the 1st day of July, 1892, said plaintiff 
has been engaged in carrying on and conducting 
for himself and other persons, and in opposition 
to said History Company a business of the same 
kind and character of that carried on and con- 

6 A c ducted by the said History Company, and where 
fore, the defendant having fully answered prays 
to be dismissed with his costs. 

That plaintiff has asked some instructions, 
which I give as follows : The Jury are instructed 
by the Court that the agreement set forth in the 
complaint, and which has been read to you, is 
admitted by the answer, and you should find the 
facts accordingrlv. 



2l8 

646 You are instructed that the true intent and 
meaning of said agreement was that the History 
Company referred to therein, should be incorpor 
ated under the laws of the State of California, 
by the corporate name of the History Company. 

That after the said incorporation of said Com 
pany, it should conduct the business of publish 
ing and selling the Historical Works of H. H. 
Bancroft, and such other works, and conduct such 
other business, as it might from time to time 
*' determine upon. 

That the said Bancroft at the time of the mak 
ing of said agreement, did thereby sell and assign 
to said Stone, one-tenth interest in the said His 
tory Company, and the property of said Corn- 
any, upon the following conditions : That the 
said N. J. Stone should devote his whole time 
and best energies as far as his health and strength 
would permit, for the period of ten years, from 
the date of said agreement, to the publication and 
sale of the Historical Works of H. H. Bancroft, 
and of such other works and business, and con 
duct such other business as from time to time 
might be taken up by the said History Company, 
and that the said Stone should not enter in or 
engage in, directly or indirectly, any other mer 
cantile or manufacturing business, or in any other 
business or occupation, which should in any wise 



219 

649 absorb his mind and strength, or interfere with 
his interest in behalf of the History Company, 
during the said term of ten years. 

If you find from the evidence that plaintiff 
engaged in any business or occupation, it must 
appear it was of the character specified and pro 
hibited in the agreement ; otherwise, it cannot be 
regarded as a breach of said agreement, or an act 

^ o 

prohibited thereby. 

Upon the incorporation, plaintiff was entitled 
to 10 per cent of the capital stock of the His 
tory Company, upon the conditions mentioned, 
and that in case of failure on the part of said 
Stone to carry out the agreement in its full letter 
and spirit, or any part thereof, then the said one- 
tenth interest in said History 'Company was to 
be forfeited, and to revert to the said H. H. Ban 
croft. 

There is no provision that said Stone should 
forfeit his salary provided for in said agreement, 
or, that he should forfeit anything more than the 
one-tenth interest in said History Company, so 
long as Stone performed the duties required of 
him by the contract, he is entitled to such salary 
of $350. 

There are other conditions mentioned in said 
agreement which are not involved in this suit, 



220 



652 and therefore, it is not necessary to call your 
attention specially to them. 

The contract referred to is a contract between 
the plaintiff, N. J. Stone, and the defend 
ant, H. H. Bancroft. It is not a contract 
between Stone and the History Company, but a 
contract between Stone and Bancroft, requiring 
on the part of Stone a performance of the acts 
above prescribed and none other 

If you find from the evidence that the said N. 
53 J. Stone performed the services required of him 
by said contract, or that he was willing and ready 
at the time, and has continued willing and ready, 
and in the manner required by said agreement, to 
perform said services, but was prevented from 
doing so by the defendant, or under his directions, 
you should find in favor of the plaintiff. 

You are instructed that the plaintiff', if pre 
vented from performing the services prescribed 

6 "4 by" said contract, by the defendant, had the right 
to engage in any occupation or business not pro 
hibited by the terms of said contract, and to earn 
as much money as he could, in such occupation or 
business. The only effect of engaging in such 
occupation or business would be, that whatever 
he earned, should be deducted from the amount 
of the salary claimed in this action. 



221 

655 There is testimony tending to show that the 
plaintiff was not discharged from employment 
under said agreement, either by the defendant or 
the History Company. Under this state of facts, 
the plaintiff was simply bound to hold himself in 
readiness to perform such services as may have 
been required of him by the said defendant or the 
History Company. If you find from the evi- 
, dence, that he was not required or allowed by 
either the said History Company or the said 
defendant to perform any services, but held him 
self in readiness to execute the contract, in accord 
ance with its terms, such readiness to perform is 
equivalent to performance. 

It is alleged in the complaint and admitted by 
the defendant in his answer, that the salary sued 
for by the plaintiff has not been paid ; that is to 
say, it is admitted in the answer that the salary 
has not been paid, since the first day of July, 
1892. If you find from the evidence that the 
defendant, either by himself or in conjunction 
with others, prevented the plaintiff from discharg 
ing the duties required of him under the said 
contract, the defendant cannot complain of the 
non-performance of acts or duties which he him 
self prevented ; and the plaintiff in such case, and 
in so far as he was prevented from performing by 
the acts of the defendant, is entitled to the salary 



222 

658 mentioned in the complaint, the same as if all the 
duties required by said contract had been per 
formed. 

The defendant asks some instructions, which I 
give as follows: 

If you find that the services for which the 
plaintiff seeks to recover in this action, were 
rendered for the History Company and not for 
the defendant, then, I instruct you that he can 
not recover against the defendant. 

MR. REDDY: To that instruction we object as 
not being within the pleadings. 

MR. MoCuTOHEN : We will take our excep 
tions afterwards. 

This is an action to recover for services ren 
dered by the plaintiff, and in order to find for the 
plaintiff you must find that he actually rendered 
the services for which he sues, or was prevented 
from so doing by the defendant, or by his direc- 
660 tions. In this case it is not necessary to show 
that he was prevented from performing services 
by some person other than the defendant, or by his 
directions. If you find that the plaintiff was not 
dismissed or discharged from the employment, but 
that he quit such employment on account of the 
treatment to which he was subjected from others, 
and not by the defendant, then I instruct you 
that this was an abandonment of the employment 



223 

66 1 by him, and that he cannot recover except for 
services rendered before such abandonment. 

This is an action to recover for services claimed 
to have been rendered under that contract, and it 
is therefore necessary, in order to find for the 
plaintiff, to find that he actually rendered the 
services, or was prevented from so doing by the 
defendant or under his direction. 

I instruct you that the defendant is not bound 
by any declaration of any officer of the History 
Company, unless such declaration was made by 
him or by his direction. 

If you find from the evidence that after the 
making of the agreement set out in the com 
plaint, the plaintiff entered into, or engaged in, 
directly or indirectly, any other mercantile or 
manufacturing business which did in any way ab 
sorb his mind and strength, then I instruct you 
that when he so entered in or engaged in such 
66- business he violated the agreement. 

The Court instructs the jury as a matter of law, 
that where two parties enter into a lawful con 
tract upon sufficient consideration, and one of the 
parties is ready and willing to perform and makes 
preparation and offers to perform on his part, but 
is prevented from performing by the other party, 
the party so ready and willing to perform can re 
cover all damages suffered by him by reason of 
the default of the other party. 



224 

664 r ^^ ie Court instructs the jury that to entitle the 
plaintiff to recover in this case, he must prove by 
a preponderance of evidence the contract substan 
tially as alleged in the declaration, and also the 
breach of the contract as therein alleged and 
charged for him, the plaintiff, to recover, and un 
less he has done so, the jury should find for the 
defendant. 

Before any party to an obligation can require 
another party to perform any act under it, he 
^ must fulfill all conditions precedent thereto im 
posed upon himself and must be able and offer to 
fulfill all conditions concurrent so imposed upon 
him on the like fulfillment of the other party. 

When one party offers to fulfill his part in a 
concurrent obligation, and the other refuses or 
neglects to perform his part, he who is ready and 
offers has fulfilled his engagement, and may 
maintain on action for the default of the other. 
555 An employment, even for a specified term, may 
be terminated at any time, by the employer in 
case of any willful breach of duty by an employee, 
in the course of employment, or in case of hab 
itual neglect of his duty, or continued incapacity 
to perform it. 

An etnyloyment, even fora specified term, may 
be terminated by the employee at any time, in 
case of any wilful or permanent breach of the ob- 



225 

667 ligations of his employer to him as an employee. 

An employee who quits the service of his em 
ployer for good cause, is entitled to such propor 
tion of the compensation which would become 
due in case of full performance, as the services 
which he had already rendered bear to the ser 
vices which he was to render as full performance. 

For the breach of an obligation arising from 
contract, the measure of damages, is the amount 
which will compensate the party aggrieved for all 
the detriment proximately caused thereby, or 
which in the ordinary course of things, would be 
likely to result therefrom. 

The detriment caused by the breach of an 
obligation to pay money only, is deemed to be the 
amount due by the terms of the obligation, 
with interest thereon. 

The Jury are the judges of the effect and value 
of evidence addressed to them ; but this power 
669 f J u dg m g f the effect of evidence is not arbi 
trary, but to be exercised with legal discretion 
and in subordination of the rules of evidence. 

The Jury are not bound to decide in conform 
ity with the declarations of any number of wit 
nesses which do not produce conviction in their 
minds, against a less number, or against a pre 
sumption or any other evidence satisfying their 
minds. 



226 

670 A witness who willfully testifies falsely as to 
one fact is to be distrusted in other parts of his 
testimony. If you find that a witness has delib 
erately testified falsely in one part of his testi 
mony in this case, you have the right to reject 
the whole of the testimony of that witness, 
which is not shown by other evidence in the case 
to be true. 

In civil cases the affirmative of the issue must 
be proved, and when the evidence is contradic- 
7 1 tory, the decision must be made according to the 
preponderance of evidence. 

Three-fourths of the Jury may agree upon a 
verdict. 

The form of your verdict will be, '* We, the 

Jury, find for the plaintiff in the sum of 

dollars, naming the amount. 

Or, " We, the Jury, find for the defendant." 
The verdict to be signed by the foreman. 

672 

Defendant duly excepted to the following por 
tion of said charge, to wit : 
Exception No. 38. 

" If you find from the evidence that plaintiff 
engaged in any business or occupation, it must 
appear it was of the character specified and pro 
hibited in the agreement otherwise, it cannot be 



673 regarded as a breach of said agreement, or an act 
prohibited thereby." 

Defendant duly excepted to the following por 
tion of said charge, to wit : 
Exception No. 39. 

" If you find from the evidence that the said 
N. J. Stone performed the services required of 
him by said contract, or that he was willing and 
ready at the time, and continued willing and 
ready and in the manner required by said 
'* agreement, to perform said services, but was 
prevented from doing so by the defendant, or 
under his directions, you should find in favor of 
the plaintiff." 

Defendant duly excepted to the following por 
tion of said charge, to wit : 

Exception No. 40. 

" You are instructed that the plaintiff if pre 
vented from performing the services prescribed by 
675 said contract by the defendant, had the right to 
engage in any occupation or business not prohib 
ited by the terms of said contract, and to earn 
as much money as he could in such occupation or 
business. The only effect of engaging in such 
occupation or business would be, that whatever 
he earned, should be deducted from the amount 
of the salary claimed in this action." 



228 

676 Defendant duly excepted to the following por 
tion of said charge, to wit : 
Exception No. 41. 

" There is testimony tending to show that the 
plaintiff was not discharged from employment 
under said agreement, either by the defendant or 
by the History Company. Under this state of 
facts, the plaintiff was simply bound to hold him 
self in readiness to perform such services as may 
have been required of him by the said defendant or 
77 the History Company. If you findTrom the evi 
dence, that he was not required or allowed by 
either the said History Company or the said 
defendant to perform any services, but held him 
self in readiness to execute the contract, in accord 
ance with its terms, such readiness to perform is 
equivalent to performance." 

Defendant duly excepted to the following por 
tion of said charge, to wit : 

678 " It is alleged in the complaint and admitted by 
the defendant in his answer, that the salary sued 
for by the plaintiff has not been paid ; that is to 
say, it is admitted in the answer that the salary 
has not been paid since the first day of July* 
1892. If you find from the evidence that the 
defendant, either by himself or in conjunction 
with others, prevented the plaintiff from dis 
charging the duties required of him under the 



229 

679 sa id contract, the defendant cannot complain of 
the non-performance of acts or duties which he 
himself prevented ; and the plaintiff in such case, 
and in so far as he was prevented from perform 
ing by the acts of the defendant, is entitled to 
the salary mentioned in the complaint, the same 
as if all the duties required by said contract had 
been performed." 
Exception No. 42. 

Defendant duty excepted to the following por 
tion of said charge, to wit: 

" The Court instructs the jury as a matter of 
law where two parties enter into a lawful con 
tract upon sufficient consideration, and one of the 
parties is ready and willing to perform and makes 
preparation and offers to perform on his part, but 
is prevented from performing by the other party, 
the party so ready and willing to perform can re 
cover all damages suffered by him by reason of 
68 1 the default of the other party." 

Exception No. 43. 

Defendant duly excepted to the following por 
tion of said charge, to wit: 

"The Court instructs the jury that to entitle 
the plaintiff to recover in this case, he must prove 
by a preponderence of evidence the contract sub 
stantially as alleged in the declaration, and also 
the breach of the contract as therein alleged and 



230 

682 charged for him, the plaintiff to recover, and un 
less he has done so, the jury should find for the 
defendant." 
Exception No. 44. 

Defendant duly excepted to the following por 
tion of said charge to wit: 

" Before any party to an obligation can require 
another party to perform any act under it, he 
must fulfill all conditions precedent thereto im 
posed upon himself, and must be able and offer 
to fulfill all conditions concurrent so imposed upon 
him on the like fulfillment by the other party. 

Exception No 45 

Defendant duly excepted to the following por 
tion of said charge, to wit: 

"When one party offers to fulfill his part in a 

concurrent obligation, and the other refuses or 

neglects to perform his part, he who is ready and 

offers has fulfilled his engagement, and may main- 

684 tain an action for the default of the other." 

Exception No. 46. 

Defendant duly excepted to the following por 
tion of said charge, to wit: 

" For the breach of an obligation arising from 
contract, the measure of damages is the amount 
which will compensate the party aggrieved for all 
the detriment proximately caused thereby, or 



231 

685 which, in the ordinary course of things, would be 
likely to result therefrom. " 
Exception No. 47. 

Defendant duly excepted to the following por 
tion of said charge, to wit: 

" The detriment caused by the breach of an ob 
ligation to pay money only, is Deemed to be the 
amount due by the terms of the obligation, with 
interest thereon." 

Exception No. 48. 

686 



Defendant requested the Court to charge the 
jury as follows: 

~" If you find from the evidence that after the 
execution of the written agreement set out in the 
complaint, a corporation called the History Com 
pany was formed; that defendant turned over or 
transferred to that corporation the property men- 
687 tioned in the agreement, and caused to be issued 
and delivered to the plaintiff, certificates repre 
senting one-tenth of the capital stock, then I in 
struct you that said agreement was fully per 
formed by the defendant." 

Defendant requested the Court to charge the 
jury as follows: 

"You are instructed that the written agree 
ment set forth in the complaint does not provide 



232 

688 that the salary of plaintiff shall be paid by defen 
dant." 

The Court refused to give such instruction, to 
which refusal defendant duly excepted. 
Exception No. 49. 

Defendant requested the Court to charge the 
jury as follows: 

" If the corporation, the History Company, 
was formed and the property mentioned in the 
_ agreement turned over to it, and one-tenth of the 
stock issued and delivered to plaintiff, and plain 
tiff acted as and became the manager of the cor 
poration, then I instruct that if plaintiff has any 
claim it is against the History Company, and not 
against defendant.'' 

" Not warranted by the pleadings, not given. 
Jos. P. Jones, Judge." 

The Court refused to give such instruction, to 
which refusal defendant duly excepted. 
690 Exception No. 50. 

Defendant requested the Court to charge the 
jury as follows: 

" This is an action to recover for services ren 
dered by plaintiff, and in order to find for the 
plaintiff, you must find that he actually rendered 
the services for which he sues. In this action it 
is not enough for him to show that he was pre 
vented from performing the service." 



233 

691 The Court refused to give such instruction, to 
which ruling defendant duly excepted, but modi 
fied said instruction so as to make it read as fol 
lows: " This is an action to recover for services 
rendered by plaintiff, and in order to find for the 
plaintiff, you must find that he actually rendered 
the services for which he sues, or was prevented 
from so doing by the defendant, or by his direc 
tion. In this action it is not enough for him to 
show that he was prevented from performing the 
services by some other person other than defend 
ant, or by his direction," and as so modified gave 
said instruction to the jury. 
Exception No. 51. 

- Defendant requested the Court to charge the 
Jury as follows : 

" If you find that plaintiff was not dismissed 
or discharged from the employment, but that he 
quit said employment on account of the treat- 
693 ment to which he was subjected, then I instruct 
you that this was an abandonment of the employ 
ment by him and that he cannot recover except 
for services rendered before such abandonment." 

The Court refused to give such instruction to 
which refusal defendant duly excepted, but mod 
ified said instruction so as to make it read as fol 
lows : "If you find that plaintiff was not dis 
missed or discharged from the employment, but 



234 

694 that he quit said employment on account of the 
treatment to which he was subjected from others 
and not by the defendant, then I instruct you 
that this was an abandonment of the employment 
by him and that he cannot recover except for 
services rendered before such abandonment," and 
as so modified gave said instruction to the Jury. 
Exception No. 52. 

Defendant requested the Court to charge Jury 
as follows : 

" This is not an action to recover damages for 

o 

breach of the contract set out in the complaint 
it is to recover for services claimed to have been 
rendered under that contract and it is therefore 
necessary in order to find for plaintiff, to find 
that he actually rendered the service." 

The Court refused to give such instruction, to 
which refusal defendant duly excepted, but mod 
ified said instruction so as to make it read as fol- 
696 l ws : '' This is an action to recover for services 
claimed to have been rendered under that con 
tract and it is therefore necessary in order to find 
for plaintiff, to find that he actually rendered the 
service, or was prevented from so doing by the 
defendant, or under his direction," and as so mod 
ified gave said instruction to the Jury. 
Exception No. 53. 

Defendant requested the Court to charge the 
Jury as follows : 



235 

697 " The remedy of an employee who is prevented 
from performing service is not an action for wages 
but he should sue for damages for the breach of 
his contract." 

The Court refused to give such instruction, to 
which refusal defendant duly excepted. 
Exception No. 54. 

Defendant requested the Court to charge the 
Jury as follows : 

" I instruct you that defendant is not bound by 
any declaration by any officer of the History 
Company unless such declaration was made by 
his direction." 

The Court refused to give such instruction, to 
which refusal defendant duly excepted, but mod 
ified said instruction so as to make it read as fol 
lows : "I instruct you that defendant is not 
bound by any declaration by any officer of the His 
tory Company, unless such declaration was made 
699 by him or by his direction," and as so modified 
gave said instruction to the Jury. 

Exception No. 55. 

Defendant requested the Court to charge the 
Jury as follows : 

"If you find from the evidence that after the 
making of the agreement set out in the com 
plaint, the plaintiff entered into or engaged in, 
directly or indirectly, any other mercantile or 



236 

yoo manufacturing business, then I instruct you that 
when he so entered into or engaged in such busi 
ness, he violated the agreement." 

The Court refused to give such instruction, to 
which refusal defendant duly excepted, but modi 
fied said instruction so as to make it read as fol 
lows : " If you find from the evidence that after 
the making of the agreement set out in the com 
plaint, the plaintiff entered into or engaged in, 
directly or indirectly, any other mercantile or 
' manufacturing business, which did in anywise 
absorb his mind and strength, then I instruct you 
that when he so entered into or engaged in such 
business, he violated the agreement," and as modi 
fied gave said instruction to the Jury. 

Exception No. 56. 

Thereupon, the jury retired, and returned and 
rendered a verdict in favor of plaintiff and against 
the defendant for the sum of forty-nine hundred 
702 dollars. 

Thereafter, and within the time allowed by law, 
the defendant duly served upon plaintiff, and filed 
in this Court, his Notice of Intention to Move 
for a New Trial, of which said notice, the follow 
ing is a copy, to wit: 

In the Superior Court in and for the County of 
Contra Costa, State of California. 



237 

703 N. J. STONE, 

Plaintiff. 

vs. 

H. H. BANCKOFT, 

Defendant. 



To the plaintiff above named, and Messrs. 
764 Reddy, Campbell & Metson, his attorneys: 

You will please take notice that the defendant 
intends to and will move this Honorable Court 
to set aside and vacate the verdict and decision 
heretofore rendered and entered in the above en" 
titled action, and to grant a new trial thereof, 
upon the following grounds, to wit: 

First Insufficiency of the evidence to justify 
the verdict of the jury. 

Second That said verdict is against law. 
' 5 Third Errors in law occuring at the trial and 
excepted to by the defendant. 

Said motion will be made upon a statement of 
the case hereafter to be prepared and served upon 
you. 

Dated March 30th, 1894. 

E. J. McCUTCHEN, 
Attorney for Defendant. 



2 3 8 

706 And the defendant now specifies the following 
particulars in which the evidence was and is in 
sufficient to justify the verdict of the Jury, and 
the following particulars in which said verdict 
was and is against law, and assigns the following 
errors in law occurring at the trial of said action, 

O * 

and excepted to by the defendant. 



ASSIGNMENT OF ERRORS. 

707 j 

Particulars in which the evidence was insuffi 
cient to justify the verdict of the jury. 

The evidence was insufficient to justify the ver 
dict of the jury in this: 

(a.) That the evidence did not show that 
plaintiff had performed any services under the 
contract set forth in his complaint, between the 
first day of July, 1892, and the first day of Sep- 

708 tember, 1893. 

(6.) The evidence did not show that plaintiff 
had performed ari} T services under said contract for 
the defendant. 

(c.) The evidence showed that plaintiff did not 
perform any service for defendant under said con 
tract, or under any other contract. 

(d. ) The evidence showed that all of the ser 
vice which plaintiff performed under that contract, 



239 

709 and for which he seeks to recover in this action, 
was performed for the History Company. 

(e.) The evidence showed that said contract 
had been fully performed by the defendant. 

(/.) The evidence showed that the defendant 
had not failed to do anything which he had under 
taken or agreed by the terms of said contract 
to do. 

(g.) The evidence did not show that defend 
ant agreed to pay plaintiff the salary mentioned 
' and referred to in said agreement. 

(Ji.) The evidence did not show that plaintiff 

was entitled to receive said salary from defendant. 

(i.) The evidence showed that plaintiff was 

not entitled to receive said salary from defendant. 

(j.) The evidence showed that defendant did 

not agree to pay said salary to plaintiff. 

(k.) The evidence showed that plaintiff did not 

perform the service for which he seeks a recov- 

711 erv lu ^ s ac ti n > but that he voluntarily left and 

abandoned the service of the History Company 

in the year 1892. 

(I.) The evidence showed that during the time 
for which plaintiff seeks to recover from the 
defendant in this action for services alleged to 
have been performed under the agreement set 
forth in his complaint, he had engaged and was 



240 

712 engaged in carrying on and conducting another 
mercantile and manufacturing business. 

(m.) The evidence showed that the plaintiff 
violated the agreement set forth in his complaint, 
in the month of December, 1892, by engaging 
in a mercantile and manufacturing business other 
than that of the History Company. 

(n.) The evidence showed that the plaintiff 
violated the agreement set forth in his complaint, 
by engaging, during the period between the 
' I ^ months of May and September, 1893, in a mer 
cantile and manufacturing business, other than 
the business of the History Company. 

(o.) The evidence showed that during two or 
three months in the year 1893, the plaintiff vio 
lated the agreement set forth in his complaint, 
by engaging in a mercantile and manufacturing 
business other than the business of the History 
Company. 

(p.) The evidence did not show that plaintiff 
had faithfully or honestly performed the contract 
set forth in his complaint, but, on the contrary, 
the evidence showed that the plaintiff violated 
said contract by engaging for a period of two or 
three months, during the year 1893, in a mercan 
tile and manufacturing business other than the 
business of the History Company, to wit : by 
forming a co-partnership with one Miller, for the 



241 

715 publication of a book and for the manufacture 
and sale of medical remedies, and by actually 
engaging in and carrying on said business. 

(q.) The evidence showed that plaintiff did 
not honestly or faithfully perform all or any of 
the terms or conditions of said contract set forth 
in his complaint. 

(r.) The evidence did not show that plaintiff 
performed all the terms and conditions of said 
contract, but on the contrary, the evidence showed 
7 1 * that plaintiff did not perform any service what 
ever under said contract after the 31st day of 
December, 1892. 

(s.) The evidence did not show that defend 
ant agreed to pay to plaintiff the salary stipu 
lated in said contract, but on the contrary, the 
evidence showed that said salary was to be paid 
by the History Company and that both plaintiff' 
and defendant understood that defendant was not 
to pay and was not required to pay any portion of 
said salary. 

II. 

Defendant specifies the following particulars in 
which said verdict was against law, to wit : 

(a.) The Court instructed the jury that if the 
services for which plaintiff sought to recover in 
said action, were rendered for the History Com 
pany and not for the defendant, then the plaintiff 



242 

718 could not recover against the defendant, and that 
all the testimony showed and the plaintiff him 
self admitted and testified that the services for 
which he sought to recover in said action, were 
performed for the History Company, and not for 
the defendant. 

III. 

And the defendant specifies and assigns the 
following errors in law occurring at the trial of 

719 said action and excepted to by defendant, to wit: 

First The Court erred in overruling the objec 
tion of defendant to the following question pro 
pounded to the witness, N. J. Stone: State the 
circumstances ? 

Second The Court erred in overruling the ob 
jection of defendant to the following question pro 
pounded to the witness, N. J. Stone: Did you 
make any contract with him at that time? 

Third The Court erred in overruling the ob- 

' jection of defendant to the following question 

propounded to the witness, N. J. Stone: During 

the time that you were in the management of the 

sale of the History, etc., were any dividends paid? 

Fourth The Court erred in overruling the ob 
jection of defendant to the following question pro 
pounded to the witness, N. J. Stone: State 
when, if ever, any one interfered with you, any 



243 

721 one who had authority with the company, inter 
fered with your management of the business ? 

Fifth The Court erred in overruling the ob 
jection of defendant to the following question 
propounded to the witness, N. J. Stone: What 
was his conduct there and what was the result of 
it? 

Sixth The Court erred in overruling the ob 
jection of defendant to the following question 
propounded to the witness, N. J. Stone: When 

722 

you made application for it, what response did 

you receive ? 

Seventh The Court erred in denying the mo 
tion of defendant to strike out the following 
answer given by the witness, N. J. Stone: The 
boy in the office was forbidden to keep any letters 
for me. 

Eighth The Court erred in overruling the ob 
jection of defendant to the following question 
propounded to the witness, N. J. Stone: State 
what occurred ? 

Ninth The Court erred in overruling the ob 
jection of defendant to the following question 
propounded to the witness, N. J. Stone: What 
was the answer ? 

Tenth The Court erred in overruling the ob 
jection of defendant to. the following question 
propounded to the witness, N. J. Stone: For 
how much ? 



244 

724 Eleventh The Court erred in overruling the 
objection of defendant to the following question 
propounded to the witness, N. J. Stone: Was 
there any money in the treasury at the time that 
assessment was levied ? 

Twelfth The Court erred in overruling the ob 
jection of defendant to the following question 
propounded to the witness, N. J. Stone: They 
proceeded so far with the assessment as to adver 
tise your stock for sale under that proceeding, 
? 25 didn't they ? 

Thirteenth The Court erred in overruling the 
objection of defendant to the following question 
propounded to the witness, N. J. Stone: What 
reply did you get from Morrison when you ap 
plied to him for instructions as to what you 
should do ? 

Fourteenth The Court erred in overruling the 
objection of defendant to the following question 
726 P ro P oun ded to the witness, N. J. Stone : What 
was the reply of Dorland ? 

Fifteenth The Court erred in overruling the 
objection of defendant to the following question 
propounded to the witness, N. J. Stone: To what 
effect; what did you say to him ? 

Sixteenth The Court erred in overruling the 
objection of defendant to the following question 
propounded to the witness, N. J. Stone: What 



245 

727 was the reply made by Dorland on that occasion ? 

Seventeenth The Court erred in overruling the 
objection of defendant to the following question 
propounded to the witness, N. J. Stone: State, 
if you know of your own knowledge, of defend 
ant being present with yourself and Dorland and 
others, and his giving instructions for actions, and 
it being obeyed by Dorland ? 

Eighteenth The Court erred in overruling the 
objection of defendant to the introduction of ex- 
' tracts from the book, " Literary Industries " 
offered b}^ plaintiff. 

Nineteenth The Court erred in overruling the 
objection of defendant to the following question 
propounded to the witness, N. J. Stone: State 
whether you relied upon your own judgment, or 
the judgment of your counsel in signing the 
document containing the words about the partner 
ship. 

Twentieth The Court erred in overruling the 
objection of defendant to the following question 
propounded to the witness, N. J. Stone: State 
the reasons why you signed those papers in full ? 
Twenty-first The Court erred in overruling the 
objection of defendant to the following question 
propounded to the witness, N. J. Stone: State 
whether they afterwards advised you that was a 
mistake ? 



246 

730 Twenty-second -The Court erred in overruling 
the objection of defendant to the following ques 
tion propounded to the witness, N. J. Stone: 
Why did you bring this suit, knowing that you 
had commenced two suits against the History 
Company, for a portion of the money involved in 
this? 

Twenty-third The Court erred in overruling 
the objection of defendant to the following ques 
tion propounded to the witness, N. J. Stone: 
" Why did you vote to take your name off the 
letter-heads if it was disagreeable to you ? 

Tiuenty-fourth The Court erred in denying the 
motion of defendant to strike out the testimony 
of the witness, D. R. Sessions. 

Twenty -fifth- -The Court erred in overruling the 
objection of defendant to the following question 
propounded to the witness, H. B. Hambly: Do 
you remember about how many hours a day he 
attended in his office ? 

Twenty-sixth The Court erred in overruling 
the objection of defendant to the following ques 
tion propounded to the witness, W. H. Hartwell: 
State, if you know, if defendant ever counter 
manded any of Mr. Stone's orders in the business ? 

Twenty-seventh The Court erred in overruling 
the objection of defendant to the following ques 
tion propounded to the witness, Jose M. Trigo: 



247 

733 Will you state the subject of the conversation, 
or conversations, upon that particular subject ? 

Twenty-eighth The Court erred in overruling 
the objection of defendant to the following ques 
tion propounded to the witness, Jose M. Trigo, 
Did you get a lawyer; I ask if you did, in pursu 
ance to Mr. Bancroft's suggestion or instruction, 
get a lawyer to bring that suit ? 

Twenty-ninth The Court erred in overruling 

the objection of defendant to the following ques- 

'34 tion propounded to the witness, Jose M. Trigo: 

After the consultation with Mr. Mitchell, did you 

report to Mr. Bancroft ? 

Thirtieth The Court erred in overruling the 
objection of defendant to the following question 
propounded to the witness, Jose M. Trigo; What 
did you report to Mr. Bancroft ? 

Thirty -first The Court erred in overruling the 
objection of defendant to the following ques- 
tion propounded to the witness, Jose M. Trigo: 
State all that was said in reference to the books, 
and if anything was said concerning Stone ? 

Thirty-second The Court erred in overruling 
the objection of defendant to the following ques 
tion propounded to the witness, Jose M. Trigo: 
State whether anything was said concerning Mr. 
Stone, other than what you have stated, after your 
arrival in San Francisco, with reference to getting 



248 

736 him out of the business, or anything of that char 
acter ? 

Thirty-third The Court erred in overruling the 
objection of defendant to the following question 
propounded to the witness, Jose M. Trigo: What 
was that conversation ? 

Thirty-fourth The Court erred in overruling 
the objection of defendant to the following ques 
tion propounded to the witness, Jose M. Trigo: 
State whether you were informed by defendant as 
'*' to whether any business of the History Company 
had been transferred to the California Book Com 
pany ? 

Thirty-fifth The Court erred in overruling 
the objection of defendant to the following ques 
tion propounded to the witness, Jose M. Trigo : 
Who caused that book to be written Resources 
and Probabilities of Mexico ? 

Thirty-Sixth- The Court erred in overruling the 
718 bjection of defendant to the offering in evidence 
of a letter written by the witness, George H. 
Morrison to defendant. 

Thirty -Seventh The Court erred in overruling 
the objection of defendant to the fol 
lowing question propounded to the witness, 
George H. Morrison : I will ask you if it is not 
the fact, that while Mr. Boyns was an employee 
of the History Company, between September, 



249 

739 1889 > and March, 1890, at the History Com 
pany's office, in the City and County of San 
Francisco, you did not point to Mr. Stone and 
say to him (Boyns), " That man is a snake in the 
grass, he is a bad man, look out for him, have 
nothing to do with him " or words to that effect ? 
Thirty-eighth The Court erred in overruling 
the objection of defendant to the following ques 
tion propounded to the witness, George H. Mor 
rison : Do you remember having said to Mr. S. 

?* B. Moore, at the place I have named in the His 
tory Company's office, along about July, 1889, 
that Mr. Stone just the same as robbed him by 
discriminating against him in the allowance of 
commission, and that it was just the same as tak 
ing money out of his pocket, or words to that 
effect ? 

Thirty -ninth The Court erred in overruling the 
objection of defendant to the following question 

741 propounded to the witness, W. C. Boyns : State 
whether you had any conversation with Mr. Mor 
rison in the month of September, or at any other 
time, between the month of September, 1889, and 
March, 1890, have a conversation in which Mor 
rison said, pointing to Stone, " That man is a 
snake in the grass, a bad man," or words to that 
effect ? 



250 

743 Fortieth The Court erred in overruling the 
objection of defendant to the following question 
propounded to the witness, S. B. Moore : State 
whether or not you heard Mr. Morrison, at the 
History Company's office, in the City and County 
of San Francisco, in the month of September, 
1889, or at any other time between that and the 
first of March of the following year, say to you 
that Mr. Stone had as good as robbed you in dis 
criminating against you in commission, and that 

7A1 

it was equivalent to robbery, or words to that 
effect ? 

Forty- first The Court erred in overruling the 
objection of defendant to the following question 
propounded to the witness, N. J. Stone : State 
whether you paid that to him, or not ? 

Forty-second The Court erred in refusing to 
submit to the jury the following special issue, 
requested by defendant : Were the services 
claimed to have been performed by the plaintiff 
rendered for the History Company, or for the 
defendant. 

Forty-third The Court erred in giving to the 
jury the following instruction, to wit : 

" If you find from the evidence that plaintiff 
engaged in any business or occupation, it must 
appear it was of the character specified and pro 
hibited in the agreement ; otherwise, it cannot be 



25' 

745 regarded as a breach of said agreement, or an act 
prohibited thereby." 

Forty-fourth- The Court erred in giving to the 
jury the following instruction, to wit : 

" If you find from the evidence that the said 
N. J. Stone performed the services required of 
him by said contract, or that he was willing and 
ready at the time, and has continued willing and 
ready, and in the manner required by said agree 
ment, to perform said services, but was prevented 
from doing so by the defendant, or under his 
directions, you should, find in favor of the 
plaintiff." 

Forty-fifth The Court erred in giving to the 
jury the following instruction, to wit : 

" You are instructed that the plaintiff if pre 
vented from performing the services prescribed by 
said contract by the defendant, had the right to 
engage in any occupation or business not prohib- 
ited by the terms of said contract, and to earn as 
much money as he could in such occupation or 
business. The only effect of engaging in such 
occupation or business would be, that whatever 
he earned, should be deducted from the amount 
of the salary claimed in this action." 

Forty-sixth The Court erred in giving to the 
jury the following instruction, to wit : 



252 

748 " There is testimony tending to show that the 
plaintiff was not discharged from employment 
under said agreement, either by the defendant 
or by the History Company. Under this state 
of facts, the plaintiff was simply bound to hold 
himself in readiness to perform such services as 
may have been required of him by the said de 
fendant or the History Company. If you find 
from the evidence, that he was not required or 
allowed by either the said History Company or 

' the said defendant to perform any services, but 
held himself in readiness to execute the contract, 
in accordance with its terms, such readiness to 
perform is equivalent to performance." 

Forty-seventh The Court erred in giving to the 
jury the following instruction, to wit: 

" It is alleged in the complaint and admitted 
by the defendant in his answer, that the salary 
sued for by the plaintiff has not been paid; that is 

co to say, it is admitted in the answer that the sal 
ary has not been paid since the first day of July, 
1892. If you find from the evidence that the de 
fendant, either by himself or in conjunction with 
others, prevented the plaintiff from discharging 
the duties required of him under the said contract, 
the defendant cannot complain of the non-per 
formance of acts or duties which he himself pre 
vented; and the plaintiff in such case, and in so 



253 

751 far as he was prevented from performing by the 
acts of the defendant, is entitled to the salary 
mentioned in the complaint, the same as if all the 
duties required by said contract had been per 
formed." 

Forty '-eight -The Court erred in giving to the 
jury the following instruction, to wit: 

" The Court instructs the jury as a matter of 
law, that where two parties enter into a lawful 

contract upon sufficient consideration, and one of 

7 ^2 

/0 the parties is ready and willing to perform and 

makes preparation and offers to perform on his 
part, but is prevented from performing by the 
other party, the party so ready and willing to 
perform can recover all damages suffered by him 
by reason of the default of the other party." 

forty-ninth The Court erred in giving to the 
jury the following instruction, to wit: 

" The Court instructs the jury that to entitle 
the plaintiff to recover in this case, he must prove 
by a preponderence of evidence the contract sub 
stantially as alleged in the declaration, and also 
the breach of the contract as therein alleged and 
charged, and unless he has done so, the jury 
should find for the defendant." 

Fiftieth The Court erred in giving to the jury 
the following instruction, to wit: 



254 

754 " Before any party to an obligation can require 
another party to perform any act under it, he 
must fulfill all conditions precedent thereto im 
posed upon himself, and must be able and offer to 
fulfill all conditions concurrent so imposed upon 
him on the like fulfillment by the other party." 

Fifty-first- --The Court erred in giving to the 
jury the following instruction, to wit : 

" When one party offers to fulfill his part in a 

concurrent obligation, and the other refuses or 

7SS 

neglects to perform his part, he who is ready and 

offers has fulfilled his engagement, and may main 
tain an action for the default of the other." 

Fifty-second The Court erred in giving to the 
jury the following instruction, to wit: 

"For the breach of an obligation arising from 
contract, the measure of damages is the amount 
which will compensate the party aggrieved for all 
the detriment proximately caused thereby, or 
which, in the ordinary course of things, would be 
likely to result therefrom." 

Fifty-third The Court erred in giving to the 
jury the following instruction, to wit: 

"The detriment caused by the breach of an 
obligation to pay money only, is deemed to be the 
amount due by the terms of the obligation, with 
interest thereon." 



255 

757 Fifty-fourth The Court erred in refusing to 
give to the jury the following instruction 
requested by defendant, to wit : 

"If you find from the evidence that after the 
execution of the written agreement set out in the 
complaint, a corporation called the History Com 
pany was formed ; that defendant turned over or 
transferred to that corporation the property men 
tioned in the agreement and caused to be issued 
and delivered to the plaintiff, certificates repre- 

'* senting one-tenth of the capital stock, then I 
instruct you that said agreement was fully per 
formed by the defendant." 

Fifty-fifth The Court erred in refusing to give 
to the jury the following instruction requested by 
defendant, to wit : 

" You are instructed that the written agree 
ment set forth in the complaint does not provide 
that the salary of plaintiff shall be paid by defend- 

759 ant " 

Fifty-sixth The Court erred in refusing to 

give to the jury the following instruction, 
requested by defendant, to wit : 

" If the corporation, the History Company was 
formed and the property mentioned in the agree 
ment turned over to it, and one-tenth of the stock 
issued and delivered to plaintiff, and plaintiff 
acted as and became the manager of the corpora- 



760 tion, then I instruct you that if plaintiff has any 
claim, it is against the History Company and not 
against defendant." 

Fifty-seventh The Court erred in refusing to 
give to the jury the following instruction 
requested by defendant, to wit : 

"This is an action to recover for services ren 
dered by plaintiff and in order to find for the 
plaintiff, you must find that he actually rendered 

the services for which he sues. In this action it 

761 

' is not enough for him to show that he was pre 
vented from performing the service." 

Fifty-eighth The Court erred in refusing to 
give to the jury the following instruction 
requested by defendant, to wit : 

"If you find that plaintiff was not dismissed 
or discharged from the employment, but that he 
quit said employment on account of the treat 
ment to which he was subjected, then I instruct 
762 vou ^ ia ^ tf 1 * 8 was an abandonment of the employ 
ment by him and that he cannot recover except 
for services rendered before such abandonment." 

Fifty -ninth The Court erred in refusing to 
give to the jury the following instruction 
requested by defendant, to wit : 

" This is not an action to recover damages for 

o 

breach of the contract set out in the complaint, 
it is to recover for services claimed to have been 



257 

763 rendered under that contract and it is therefore 
necessary in order to find for plaintiff, to find that 
he actually rendered the service." 

Sixtieth The Court erred in refusing to give 
to the jury the following instruction requested by 
defendant, to wit : 

" The remedy of an employee who is prevented 
from performing service is not an action for wages 
but he should sue for damages for the breach of 
his contract." 

' ^ Sixty-first The Court erred in refusing to 
give to the jury the following instruction 
requested by defendant, to wit : 

" I instruct you that defendant is not bound 
by any declaration by any officer of the History 
Company unless such declaration was made by 
his direction." 

Sixty-second The Court erred in refusing to 
give to the jury the following instruction 
76^ requested by defendant, to wit : 

" If you find from the evidence that after the 
making of the agreement set out in the com 
plaint, the plaintiff entered into or engaged in, 
directly or indirectly, any other mercantile or 
manufacturing business then I instruct you that 
when he so entered into or engaged in such busi 
ness, he violated the agreement. 

E. J. McCUTCHEN, 
Attorney for Defendant. 



766 STIPULATION. 

It is hereby stipulated that the above and fore 
going be settled and allowed as the statement 
of the case on motion for new trial in the above 
entitled action. 

Dated November 27, 1894. 
REDDY, CAMPBELL & METSON, 

Attorneys for Plaintiff. 
E. J. MoCUTCHEN, 
Attorney for Defendant. 



CERTIFICATE OF JUDGE. 

The foregoing having been agreed to by the 
respective parties to the above entitled action, as 
the statement of the case on motion for new 
trial, the same is hereby settled and allowed. 

Dated January 10, 1895. 

Jos. P. JONES, Judge. 

[Endorsed:] Filed this 10th day of January, 
1895. 

F. L. GLASS, Clerk. 



ORDER DENYING MOTION FOR NEW 
TRIAL. 

[Title of Court and Cause.] 

MONDAY, February 18, 1895 
Court met at 10 o'clock A. M. 



259 

769 Present, Hon. Jos. P. Jones, Judge ; R. R. 
Veale, Sheriff; F. L. Glass, Clerk. 

On reading the stipulation of counsel on file 
herein the motion of defendant for a new trial of 
this cause is submitted to the Court for decision 
without argument, and the Court being fully ad 
vised in the premises it is ordered that the said 
motion for a new trial be and the same is hereby 
denied. 



770 



NOTICE OF APPEAL. 

(Title of Court and Cause.) 

You will please take notice that the defendant 
in the above entitled action hereby appeals to the 
Supreme Court of the State of California, from 
the judgment therein entered in the said Superior 
Court on the 24th day of March, 1894, in favor 
of the plaintiff in said action and against said de- 
77 * fendant, and from the whole thereof; and also 
from the order denying said defendant's motion 
for new trial, made and entered in the minutes of 
said Court the 18th day of February, 1895. 
Dated, February 28, 1895. 

E. J. McCUTCHEN, 
Attorney for Defendant. 



26o 

772 To the Clerk of the said Superior Court, and to 
the plaintiff in the above entitled action, and 
Reddy, Campbell & Metson, his attorneys. 

[Endorsed:] Service of a copy of the within 
. JJotice of Appeal is hereby admitted this 28th 
day of February, 1895. 

REDDY, CAMPBELL & METSON, 

Attorneys- for Plaintiff. 
Filed February 28, 1895. 

F. L. GLASS, Clerk. 

773 



STIPULATION. 

We, the undersigned, the attorneys for the re 
spective parties herein, do hereby stipulate that 
the above and foregoing are correct copies of the 
Judgment Roll and Statement of the Case, used 
on the hearing of the Motion for New Trial and 

Notice of Appeal in the above-entitled action, 

774 

and on file in said cause, and of the order denying 

defendant's motion for new trial made and entered 
in the minutes of the Court on the 18th day of 
February, 1895; that the same are true and cor 
rect, and that they shall constitute the transcript 
on appeal herein. 

We further certify that a sufficient undertaking 
on appeal in due form of law was on the 4th day 



26l 

775 of March, 1895, duly filed in said cause in the 
office of the Clerk o said Court. 

Dated, June 7^1895. j 




Attorneys for Plaintiff and Respondent. 




Attorney for Defendant and Appellant. ] 



Service of a copy of the within Transcript on 

Appeal is hereby admitted this 

day of May, 1895. 

Attorneys for Respondent. 



San Francisco. No. 171. 



IN THE 



^TT 

OUl LV 



COURT 



OK THK 



STATE OF CALIFORNIA. 



N. J. STONE, 

Plaintiff' and Respondent, 

ys. 

H. H. BANCROFT, 

Defendant and Appellant. 

Appellant's Points and Authorities, 



EDWARD J. McCuTCHEN, 

Attorney for Appellant. 
REDDY, CAMPBELL & METSON, 

Attorneys for Respondent. 



Filed this... day of November, A. D. 1895. 

T. H. WARD, Clerk, 



Deputy Clerk. 



THE SUPREME COURT 



STATE OF CALIFORNIA. 



N. J. STONE, 

Plaintiff and Respondent, 

vs. 
H. H. BANCROFT, 

Defendant and Appellant. 



APPELLANT'S POINTS AND AUTHORITIES. 

The action is to recover for services claimed to 
have been rendered by plaintiff for defendant. 

The complaint alleges the execution by plaintiff 
and defendant of the agreement hereinafter set 
forth; that plaintiff has honestly and faithfully 
performed all of the terms and conditions thereof 
on his part; "that defendant has failed and neg 
lected to perform the conditions upon his part to 
be performed, and has failed, neglected and re 
fused to pay or cause to be paid to plaintiff the 
* salary mentioned in said agreement, at the rate of 
three hundred and fifty dollars per month, since 
the 1st day of July, 1892." 

The answer denies that plaintiff has performed, 



or that defendant has failed to perform, the con 
tract, and avers that defendant has performed all 
of the conditions on his part to be performed; 
admits that defendant has not paid the salary men 
tioned in the contract, and avers that he is under 
no obligation to pay it. The answei further avers 
that the History Company mentioned in the agree 
ment was incorporated under the laws of Califor 
nia on the 23d day of September, 1886, and that 
immediately after its incorporation defendant 
transferred to it all of the property mentioned in 
the agreement; that from the date of its incorpor 
ation said History Company has carried on and 
conducted the business mentioned in the agree 
ment, and defendant has had nothing to do with 
said business except as an officer of said corpora 
tion; that from the date of incorporation until 
the 1st day of July, 1892, the plaintiff acted in 
the capacity of general manager of the company, 
but that he has not at any time since the date of 
the agreement performed for or rendered to de 
fendant or to said corporation any service what 
ever. The answer further avers, that during the 
time for which the plaintiff seeks to recover com 
pensation he was engaged in carrying on and con 
ducting for himself and other persons, and in 
opposition to the History Company, a business of 
the same kind and character as that carried on by 
said company. 



Statement of the case as made by the 

plaintiff. 

. > 

Confining ourselves to the plaintiff's testimony 
the following is a fair statement of the facts: 

Prior to May, 1886, defendant was engaged in 
the publication and sale of historical works and 
other literary publications and was carrying on 
business under the name of Bancroft's Works De 
partment of A. L. Bancroft & Co., and was the 
owner of the plates, paper, stock, money, out 
standing accounts, and other property belonging 
to said business. For a long time prior to May, 
1886, the plaintiff had been employed to manage 
said business and during that month the parties 
made an agreement which on August 20, 1886, 
was reduced to writing. The agreement was in 
these words: 

" This agreement made in San Francisco, Cali- 
u fornia, by H. H. Bancroft and N. J. Stone, wit- 
" nesseth: That in consideration of the valuable 
" services done by the said Stone in conducting 
" the publication and sale of the historical works 
" of the said Bancroft, the business formerly being 
" conducted as the Bancroft's Works Department 
" of A. L. Bancroft & Co., but now being done 
" and shortly to be incorporated under the laws 
" of California as the History Company, the said 
" Bancroft hereby sells and assigns to the said 
u Stone a one-tenth interest in the said History 



" Company, plates, paper, stock, money, outstand- 
" ing accounts, or other property of said com- 
" pany, upon the following conditions: 

" The said N. J. Stone is to devote his whole 
" time and best energies, so far as his health and 
" strength shall permit, for a period of not less 
" than ten years from the date of this agreement, 
" to the publication and sale of the historical 
" works of H. H. Bancroft, and of such other 
" works, and conduct such other business as may 
" be from time to time taken up and entered into 
" by said History Company; and the said Stone 
" agrees not to enter into or engage in, directly 
" or indirectly, any other mercantile or manu- 
" facturing business, or to any other business or 
" occupation which shall in any wise absorb his 
" mind and strength, or interfere with his in- 
" terest or efforts on behalf of the said History 
" Company during the said term of ten years. 

" Upon the incorporation of the History Com- 
" pany one-tenth of the whole number of shares 
" shall be issued and delivered to the said N. J. 
" Stone; but should the said Stone fail in any- 
" wise to carry out this agreement, or any part 
" thereof, in its full letter and spirit, then the said 
" one-tenth interest in the said History Company 
" shall be forfeited and revert to the said H. H. 
" Bancroft; provided, and it is distinctly under- 
" stood and agreed, that in case of the death of 



" the said N. J. Stone before the expiration of 
" five years from the date of this agreement, the 
" said Stone having fulfilled all the conditions of 
" this agreement up to that time, then one-half of 
" the said one-tenth interest of the said Stone in 
" the History Company shall go to his heirs, arid 
" be their property unconditionally; and in the 
" event of the death of the said Stone at any 
" time after the expiration of five years from the 
" date of this agreement, the terms hereof having 
" been fully complied with, then the whole of 
" the said one-tenth interest shall belong to his 
" heirs unconditionally. 

" The salary of the said Stone shall be $350 a 
" month. The copyright of the said historical 
" works belongs exclusively to the said Bancroft, 
" and shall be fifty cents a volume for the History 
" and Diaz, and twenty cents on the little history 
" of Mexico. 

" Signed in San Francisco, the twentieth day 
" of August, 1886. 

" H. H. BANCKOFT, 
" N. J. STONE." 

Between May, 1886 and the 23d day of Sep 
tember, 1886, plaintiff arid defendant carried on 
the business referred to in the agreement under 
the name History Company, the plaintiff own 
ing one-tenth of said business and the defendant 
the remaining nine-tenths. The salary of plaintiff 



6 

was paid out of the moneys belonging to both the 
parties and charged as an expense of the busi 
ness. (Trans., folio 140.) On the 23d day of 
September, 1886, the parties formed a corporation 
under the laws of California, called History Com 
pany, to which was transferred all of the property 
referred to in the agreement, and from its forma 
tion until the commencement of this action it 
carried on the business previously carried on by 
plaintiff and defendant. Plaintiff admits that 
defendant has performed the agreement on his 
part unless the payment of the salary is imposed 
by the agreement upon defendant individually. 
(Trans., folios 234 and 235). Immediately after 
the formation of the corporation the plaintiff re 
ceived certificates representing one-tenth of the 
capital stock thereof. From the date of the form 
ation of the corporation until May, 1892, the 
plaintiff was a director and vice-president thereof, 
and from the date of the formation until July, 
1892, he acted as the manager of its business. A 
by-law of the History Company adopted imme 
diately after its incorporation and to which the 
plaintiff assented in writing, fixed the salary of 
the vice-president at three hundred and fifty dol 
lars per month. At all the times after the forma 
tion of the corporation the salary of the plaintiff 
was paid to him by the treasurer thereof, who was 
under his orders. The salary paid to the plaintiff 



was treated as one of the expenses of the business 
and was always entered upon the books of the 
company as such an expense, and all of the profits 
which were divided either in the shape of divi 
dends, or in any other way, were the net profits 
after the deduction of all expenses, including the 
plaintiff's salary. (Trans., folio 197.) It is ad 
mitted by the plaintiff that his salary was never 
charged to or paid by defendant individually. 
(Trans., folio 139.) The arrangement at the 
time it was made, as understood by the plaintiff, 
was that he was to have ten per cent, of the en 
tire business and ten per cent, of the net profits 
after all expenses were paid, including his own 
salary. (Trans., folio 140.) 

Plaintiff received the salary of three hundred 
and fifty dollars a month from the History Com 
pany until the end of June, 1892. Before the 
commencement of this action he commenced two 
suits against the History Company, in each of 
which he sought to recover three hundred and 
fifty dollars, the first being for services rendered 
as its manager during the month of July, 1892, 
and the second for services rendered as its man 
ager during the month of August, 1892. He sub 
sequently brought this action to recover for 
services alleged to have been actually performed 
between the 1st day of July, 1892, and the date 
when the complaint was filed, a period of fourteen 
months, ending August 31, 1893. 



8 

It is not claimed by the plaintiff that during all 
of the time for which he seeks to recover from the 
defendant for services rendered, he was actually 
engaged either in the service of the defendant or 
the service of the History Company. It is claimed 
that some time in the early part of 1892, the de 
fendant determined to prevent the plaintiff from 
performing his duties as manager of the business 
of the corporation, and that after June, 1892, he 
was not able, by reason of the interference of the 
defendant and those under him, to perform the 
duties of that position. He says his desk was 
moved from place to place, and that he was sub 
jected to every indignity that one rnan could in 
flict upon another; that his desk was placed in a 
draught, and he notified the secretary of the cor 
poration that he could not remain unless its posi 
tion was changed. He did remain, however, for 
a long time after he had been so badly treated 
(Trans., folio 204), and says emphatically he was 
never dismissed or discharged (Trans., folio 236). 
Plaintiff chaims to have visited the office of the 
company every day during the month of July, 
1892; occasionally, but not very often, during 
August and September, 1892; that he was there 
during October, but did not do much of anything; 
that he was there part of the time in November 
and most of the time during December. He went 
there every day during January, 1893, and every 



9 

day during February, 1893, until he served a 
notice upon Borland, the secretary and treasurer 
of the History Company, and said he was ready 
to work (Trans., folios 149 to 152). 

He made a demand on the treasurer of the cor 
poration for the salary which he claimed to be due 
subsequent to June, 1892, but never made any 
demand on defendant (Trans., folio 152). When 
he addressed Dorland concerning his services he 
addressed him as secretary and treasurer of the 
corporation, and Dorland answered him in that 
capacity (Trans., folio 170). 

The plaintiff says he gave the notices to Dor- 
land in December, 1892, and January, 1893 
(Trans., folio 101). He claims to have been at 
the office of the History Company nearly every 
day up to the time of the demand made upon 
Dorland, and after that time he engaged in other 
business (Trans., folio 169). During the months 
of May, June and July, 1893, he admits he was 
giving his attention to the publication of a work 
called " Femina," in which he had acquired an 
interest (Trans., folio 161). For each of those 
three months he recovered in this action three 
hundred and fifty dollars for services alleged in 
his complaint to have been rendered to defendant. 
In the publication of the work called " Femina. " 
he was associated with one Miller, each of them be 
ing equally interested in the business (Trans., folia 



10 

162). He says he considered that during the time 
he was engaged in business with Miller the His 
tory Company was entitled to call upon him to 
perform services as manager for it, and that it was 
understood between him and Miller that he would 
make no arrangement by which he would not be 
subject to the call of the History Company. He 
claims to have considered all the time he was with 
Miller that the contract set out in the complaint 
was in full force and effect, and that the History 
Company was entitled to call upon him at any time 
(Trans., folio 168). 

On the 21st day of October, 1893, the plaintiff 
and Miller signed and executed an instrument in 
writing, in which they declared that the partner 
ship existing between John A. Miller, party of the 
first part, and Nathan J. Stone, party of the sec 
ond part, under the firm name of the Femina 
Company, was that day dissolved by mutual con 
sent. The execution of this document was wit 
nessed by one of the counsel for the plaintiff. 

The Femina Company had an office, and the 
plaintiff's name appeared on the door as manager 
of its business (Trans., folio 186). That company 
was engaged in publishing a literary work and the 
History Company was engaged in publishing 
literary works (Trans., folio 387). 

The only object in calling attention to these 
facts in this statement is, to emphasize the fact 



11 

that the Court below, in this action to recover for 
services alleged to have been rendered, gave 
plaintiff a judgment as compensation for services 
claimed to have been rendered by him for a 
period during which, by his own admission, he 
was actually engaged in conducting a rival busi 
ness. 

I. 

The demurrer to the complaint should have been 
sustained. 

A demurrer was interposed by defendant to the 
complaint in which it was claimed : First, that it 
did not state facts sufficient to constitute a cause of 
action; and, second, that it was ambiguous, uncer 
tain and unintelligible in that: (a) it did not appear 
whether the corporation referred to in the agree 
ment was ever formed; (b) that it did not appear 
what services were performed by plaintiff, and 
(c) that it did not appear whether the services, if 
any, performed by him were rendered to the de 
fendant or to the History Company. 

Separate assignments were made as to ambig 
uity, uncertainty and unintelligibility. 

It is to be remembered that the action is not for 
the breach of the contract and that the complaint 
does not allege any damage, but, on the contrary, 
it alleges performance of the agreement for which 
the plaintiff claims a stipulated compensation. 

When the agreement was executed defendant 



12 

was the owner of a business "then being done 
and shortly to be incorporated under the laws of 
California," under the name of History Company, 
and was the owner of all the property belonging 
or appertaining thereto. By the instrument he 
" sold and assigned to plaintiff a one-tenth interest 
in the said History Company, plates, paper, stock, 
money, outstanding accounts, and other property 
of said company." (Trans., folio 5.) This is all 
defendant did or agreed to do. There is nothing 
executory in the agreement so far as he is con 
cerned. The complaint alleges the execution of 
the instrument by him, which is equivalent to an 
allegation that at that date he transferred and sold 
to plaintiff a one-tenth interest in the property 
mentioned, and from that time forward plaintiff 
became and was jointly interested with defendant 
in the business, defendant owning nine-tenths and 
plaintiff one-tenth thereof. 

Plaintiff, upon his part, agreed to devote his 
whole time for ten years after the date of the 
agreement to the business of the History Company, 
and that during that time he would not engage in 
any manufacturing business, or any business that 
would interfere with his interests in or efforts on 
behalf of said History Company. 

The obligation imposed by the agreement upon 
plaintiff was to render service, not to the defend 
ant, but to the History Company, and when he 



13 

alleges that he has performed the agreement on his 
part, he is to be understood as saying that he has 
rendered to the History Company the stipulated 
service. This service must have been rendered 
to the History Company, a corporation, or to a co 
partnership doing business under that name and 
composed of plaintiff and defendant. If the agree 
ment was so far executed as that plaintiff per 
formed all of its covenants on his part, the parties 
must have carried on the business as copartners, 
or a corporation must have been formed to which 
the property and business were transferred. If 
plaintiff performed any part of the agreement be 
fore a corporation was formed, then it necessarily 
follows that he and defendant were carrying on 
the business of the History Company and their 
relations were those of partners. When defend 
ant executed and delivered the assignment and 
transfer to plaintiff the latter became proprietor 
of an interest in a going business, of which prior 
to that time defendant was the sole owner. The 
agreement provided for a continuance of the busi 
ness, to which the plaintiff was to devote his en 
tire time for a period of ten years. No one will 
seriously contend that this was a contract of em 
ployment wherein defendant was the employer 
and plaintiff the employee. Defendant did not 
take plaintiff into his employment, but took him 
into the business, into the History Company, and 



14 

whereas he had up to that time been only an em 
ployee of the defendant, he was thenceforth in 
terested with him in the business; in other words, 
was his partner. 

Defendant did not undertake to pay the plaintiff 
the salary stipulated in the agreement, but both 
plaintiff and defendant agreed that plaintiff's 
salary should be three hundred and fifty dollars 
per month, which salary was, of course, to be paid 
by the History Company. It will hardly be 
questioned that from the date of the agreement 
the parties were to share in the profits and losses 
of the business in proportion to their respective 
interests. 

Section 2395 of the Civil Code defines partner 
ship thus: "Partnership is the association of two 
" or more persons for the purpose of carrying on 
" business together and dividing the profits be- 
" tween them." The agreement in this case ex 
pressly stipulated that the parties were to carry on 
business together, and no one will say they were 
not to divide the profits. In other words, the 
agreement brings them clearly within the provis 
ions of this section of the Civil Code. 

It may be suggested that the agreement does 
not contain any express provision that the parties 
are to divide the profits of the business. In Bloom- 
field vs. Buchanan, 13 Or., 108, it was held that it 
was not absolutely necessary in order to create a 



15 

partnership that the word " partnership " should 
be used, " or any express mention made in regard 
" to profit or loss, * * * and it is not neces- 
" sary that there should be an express stipulation 
" between partners to share the profit and loss, as 
" that is an incident to the- prosecution of their 
" joint business." 

In Richards vs. Grinnell, 63 Iowa, 44, Chief 
Justice Rothrock quotes with approval the follow 
ing from Parsons on Contracts: "Where parties 
" agree to enter into an association for the purpose 
" of buying or selling and carrying on joint busi* 
" ness indefinitely, no stipulation for dividing 
" profit and loss is necessary, as that is an incident 
" to the prosecution of their joint business." 

It seems entirely unnecessary to multiply au* 
thorities on this point. As has been suggested) 
the portion of the contract providing that "the 
salary of the said Stone shall be three hundred 
and fifty dollars a month," did not impose upon 
the defendant an obligation to pay that sum or any 
sum, but simply meant that out of the business in 
which the parties were about to engage the plaintiff 
should receive the salary agreed upon by them. 
His salary was one of the expenses of the business 
to be deducted before the division of profits, and 
hence he was himself to contribute one-tenth of 
his compensation. 

A case on all fours with the one at bar and de- 



16 

cisive of the question now under discussion is 
Weaver vs. Upton, 7 Iredell's Law (N. C.), 458. 
The opinion is short and we quote it in full: 

" Weaver and Upton, on the 16th of Decem- 
" ber, 1840, leased of one McKenzie a tract of 
" land for three years to mine for gold; the rent 
" was to be one-sixth part of the gold that should 
" be obtained by the lessees. On the 27th of 
" December, 1841, the lessees entered into the 
" agreement under their seals, mentioned in the 
" case. Upton was to work twenty hands, and 
" Weaver four hands, ' bearing a proportionable 
" ' part of the expense attached thereto. The 
" ' said Upton, of the first part, bargains and agrees 
" ' to give me, the said Weaver, of the second 
" * part, four hundred and fifty dollars to manage 
" ' the business, which I agree to manage accord- 
" * ing to the best of my judgment.' It seems to 
" us, that the agreement was one of partnership; 
" and the law being well settled, that the acting 
" and business partner is never entitled to claim 
" pay of the firm for his services, unless he stipu- 
" lates for it in the articles of copartnership or 
" otherwise; the parties therefore agreed, that 
" Weaver should manage the business, and Upton, 
" the other partner, agreed to give him $450 ' to 
" manage the business.' Weaver was to bear his 
" proportion of the expense of managing and 
" working the mine. The salary of the, superin- 



" tendent was a part of the expense of the firm. 
" And the firm ought, according to the true construc- 
" tion of the articles, to bear this expense in propor- 
" tion to the number of hands each partner worked 
" in the mine. The words ' The said Upton bar- 
" gains and agrees to give me, the said Weaver, 
" $450 to manage the business,' only denoted 
*' the assent of Upton, that Weaver, although a 
" partner, should be paid for his services $450. 
" The parties were stipulating concerning the part- 
" nership business, and the terms on which it was to 
" be carried on; and among others that Upton bar- 
" gained and agreed to let Weaver have $450 for 
" his services that year. It seems to us that it 
" would be against justice and right, to construe 
" the covenant to be an agreement by Upton, that 
" he would pay that sum out of his own pocket. 
" We think that it was an item in the expense 
" account of the firm and that the firm should pay 
" it." 

In the Weaver case the language was " the said 
Upton bargains and agrees to give me, the said 
Weaver, $450 to manage the business," while in 
the case at bar the language is, " the salary of said 
Stone shall be $350 a month." From what has 
been said, it necessarily follows that the plaintiff 
did not have a cause of action against the defend 
ant to recover the salary which it was agreed he 
should receive, and hence, the general demurrer 



18 

should have been sustained. The special demurrer 
was likewise well taken. If the services claimed 
to have been performed by the plaintiff were 
rendered for a corporation formed by the parties, 
or a copartnership consisting of the parties, then 
such services were not rendered to the defendant, 
and as the complaint failed to show to whom the 
service was rendered, and also failed to show 
whether or not a corporation had been formed, it 
was ambiguous, uncertain and unintelligible in the 
particulars specified in the demurrer. 

II. 

The plaintiff did not perform the contract. 

Without desiring to repeat what has been said 
in relation to the insufficiency of the complaint, 
we again call attention to the fact that it sets forth 
a cause of action for services actually performed 
by plaintiff. The action is not one to recover 
damages for breach of the agreement. No damage 
is alleged. The salary of the plaintiff was paid by 
the History Company for all services rendered by 
him to and including the end of June, 1892. In 
this action he recovered judgment for services al 
leged to have been rendered from July 1, 1892, to 
September, 1893. By his own admission he did 
not render any service after January, 1, 1893, 
and little, if any, subsequent to July, 1892. Dur 
ing a large part of the year 1893 he was engaged 
in other business. He claims to have notified the 



19 

secretary of the History Company in December, 
1892, and January, 1893, that he was ready to 
work, and the theory upon which he recovered in 
this action was that although he did not actually 
perform the services alleged in his complaint to 
have been performed, he was ready and willing 
to perform; that performance on his part was pre 
vented by defendant and that readiness to per 
form was in such a case equivalent to performance. 
This sounds very startling but is nevertheless true. 
In this case the allegation of actual performance is 
claimed to have been proven by showing that 
there was no performance. The action here is for 
salary, and to have recovered salary plaintiff should 
have shown performan-ce of the service. Assum 
ing for the moment that defendant agreed to pay 
the salary, he was not liable to pay it except upon 
performance by plaintiff. One who has been hired 
for a term is entitled to recover damages from the 
employer if prevented by the latter (without good 
cause) from performing the service contracted for, 
but an employee discharged without cause before 
the expiration of the term for which he was hired 
cannot recover wages from the employer lor the 
time intervening between the date of his dis-* 
charge and the end of the term for which he was* 
employed. He can recover wages only when he 
has actually rendered the service for which the 
wages were to be paid. If prevented from per- 



20 

forming his contract of service, he cannot, al 
though he may have been ready and willing to 
perform, recover the wages agreed to be paid, but 
must have resort to an action for damages for the 
breach of the contract of hiring. The doctrine 
of " constructive service " (and it was upon the 
supposed soundness of that doctrine that plaintiff 
recovered in the Court below) has been exploded 
and repudiated by the courts of this country and 
England. We quote the following from Woods 
Law of Master and Servant, page 254: 

"Formerly there is no question but that a ser- 
" vant, under such circumstances, was regarded 
" as entitled to hold himself in readiness to per- 
" form his contract, and, being able, ready and 
" willing to do so, was entitled to recover his 
" wages for the whole term, upon the ground of 
" constructive service. This doctrine had its ori- 
" gin in a decision rendered by Lord Ellenborough 
" in a nisi prius case tried before him. In that 
" case the plaintiff was discharged before the 
" termination of the quarter for which he was 
" employed, and in an action for his wages for the 
" entire quarter, Lord Ellenborough said, that ' as 
" the plaintiff had served a part of the quarter, and 
** was ready and willing to serve for the residue, 
" he might, in contemplation of law, be consid- 
<l ered to have served the whole.' This doctrine 
" has been adopted in numerous English cases 



21 

" since, which it will not be profitable to notice 
" here; but after being repudiated, and then 
" again adopted, it was finally exploded, and the 
" doctrine established that a person wrongfully 
" discharged could not, by simply holding himself 
" in readiness to perform his contract, be regarded 
" as having in fact performed it, and thus be en- 
" titled to sue for and recover his wages for the 
" entire term, but that he must be restricted in his 
" recovery to the amount of his actual loss. The 
" action in such cases is not for wages, but for 
" damages for breach of the contract. It cannot 
" with any propriety be claimed that an action for 
" wages can be sustained when the servant has in 
" fact rendered no service. Such a doctrine is in 
" defiance of the meaning of the term, and rests 
" upon no solid foundation, either in principle or 
" policy. Not in principle, because it conflicts 
'* with the doctrine that every person injured by 
" the act of another is bound to use ordinary dili- 
" gence to make the burden as light as possible, 
" and therefore is bound not to hold himself in 
** readiness to perform the contract, but to use 
" reasonable efforts to secure other employment; 
" not in accordance with sound public policy, be- 
" cause it encourages indolence, and in the lan- 
" guageof Parke, B., 'such a doctrine, if sanctioned, 
" would be of pernicious consequences.' The true 
" rule, which is generally adopted in this country, 



22 

" is, as previously stated, that such actions must be 
" for damages for a breach of contract." 

The leading case on the subject in this country 
is Howard vs. Daly, 61 N. Y., 362. After citing 
a large number of American and English cases in 
which the doctrine of constructive service is re 
pudiated, it is said: 

" These cases and authorities hold, in substance, 
" that if a servant be wrongfully discharged, he 
" has no action for wages, except for past services 
." rendered, and for sums of money that have be- 
" come due. As far as any other claim on the 
" contract is concerned, he must sue for the injury 
" he has sustained by his discharge, in not being 
" allowed to serve and earn the wages agreed 
" upon. * * * This doctrine (constructive 
* service) is, however, so opposed to principle, so 
" clearly hostile to the great mass of the authori- 
" ties, and so wholly irreconcilable to that great 
" and beneficent rule of law, that a person dis- 
" charged from service must not remain idle, but 
" must accept employment elsewhere if offered, 
" that we cannot accept it. If a person discharged 
" from service may recover wages, or treat the 
" contract as still subsisting, then he must remain 
" idle in order to be always ready to perform the 
" service. How absurd it would be that one rule 
" of law should call upon him to accept, other em- 
" ployment, while another rule required him to 



23 

" remain idle in order that he may recover full 
" wages. The doctrine of ' constructive service ' 
" is not only at war with principle, but with the 
" rules of political economy, as it encourages idle- 
" ness, and gives compensation to men who fold 
" their arms and decline service, equal to those 
" who perform with willing hands their stipulated 
" amount of labor. Though the master has com- 
" mitted a wrong, the servant is not for one mo- 
" ment released from the rule that -he should 
" labor; and no rule can be sound which gives 
" him full wages while living in voluntary idle- 
" ness. For these reasons, if the plaintiff was 
" discharged after the time of service commenced, 
" she had an immediate cause of action for 
" damages." 

In James vs. Allen County, 44 Ohio St., 228, 
this question was presented in a case almost ident 
ical with the one at bar. The plaintiff sued to 
recover wages claimed to be due under a contract 
for service which defendant had prevented him 
from performing. The Court held the remedy 
of plaintiff was an action for damages, and after 
citing a number of cases, said: 

" The decisions in these cases appear to rest 
" upon the doctrine of ' constructive service." In 
" several of them it is adopted in words; in others 
" the principle is assumed without designating it 
" by that title. If that is not their basis it is 



" difficult to see that they have any. The theory 
" of that doctrine seems to be that inasmuch as 
" the employee holds himself ready to do the work, 
" therefore he has done the work; that readiness 
" is, for all purposes, equivalent to performance. 
" For the purpose of allowing a recovery in some 
" amount, his readiness to do and tender of per- 
" formance may have the effect of performance to 
" the extent of putting the employer in the wrong, 
" but how can it be said, in truth, that he has done 
" the work? that he has performed? The claim 
" is based upon a fiction, an untruth. There is 
" no acceptance of the services; there is no de- 
" livery of them; the defendant has not had the 
" benefit of them; he has not had value received, 
" and upon what principle is it that in law he is 
" liable for the agreed price when he has not re- 
" ceived the commodity which he agreed to buy, 
" and the other party has not parted with the 
" commodity which he agreed to sell? The doc- 
" trine of ' constructive service,' as applied to a 
*' case of this character, is one beset with difficul- 
" ties. It requires a plaintiff to assume that to 
" exist which in fact has no existence. He is de- 
" manding wages ichen he has rendered no service. 
" The doctrine contradicts the very term itself. 
" How can he truthfully aver, as indebitatus as- 
" sumpsit, that the defendant is indebted to him 
" for work and labor done? Averring it, how 



25 

" could he prove it? But, aside from the matter 
" of pleading and proof, in order to recover upon 
" the strength of this doctrine, the employee must 
" not only be willing to perform on his part, but 
" must hold himself in readiness to perform. This 
" implies that he will remain idle. Public policy, 
" not to say public morals, forbids the encourage- 
" ment of an idle class. Being subject to the 
" universal rule that a person injured by the act 
" of another, is bound to use ordinary diligence to 
" make the damage as light as may be, the dis- 
" charged employee must use ordinary care to 
" obtain employment. He may not be required 
'* to seek elsewhere, or to engage in a different 
" industry. But he is bound to use ordinary effort 
" to obtain similar employment in the same vicin- 
" ity; at least, if such employment is offered, he 
" is bound to take advantage of it. It would be 
" a direct encouragement to idleness to hold that 
" he who may have, but refuses, similar service, 
" is entitled to full compensation the same as 
" though he performed full labor. This rule stands 
" squarely across the path of ' constructive service.' 
' For if the workman is bound to accept employ- 
" ment of another employer how can he continue 
" ready to resume work under his former em- 
" ployer? A learned writer, whose valued paper 
" in support of the doctrine of ' constructive ser- 
** vice " is cited by counsel, uses this language: 



26 

" ' The doctrine of constructive service, however, 
" ' does not permit an employee who has been 
" ' wrongfully discharged to remain wilfully idle 
" ' during the period for which he had been en- 
" ' gaged.' A most singular conception of the 
" ground work of the doctrine, it seems to us. 
" Being actually at work for B, how can he be 
" constructively at work for A? Being required 
" to hold himself in readiness to resume his work 
" for A, how can he engage with B? Engaging 
" with B, how can he be ready to resume work 
" with A? 

" 'Constructive service,' as here sought to be 
" applied, never had, as we think, support in prin- 
" ciple, and the support derived from authority is 
" at least very considerably impaired." 

In the note to Decamp vs. Hewitt, 43 Am. De 
cisions, 205, the question is discussed at length, 
and many authorities cited, holding that a dis 
charged employee cannot maintain an action to 
recover wages for services which he has not actu 
ally performed. 

III. 

If service was rendered by plaintiff it i.oas ren 
dered to the History Compang and not to defendant. 

This question was necessarily referred to in the 
discussion of the points raised on demurrer. The 
facts disclosed by the record make the position of 
the defendant on this issue absolutely unanswer- 



27 

able. While the agreement itself shows conclu 
sively that defendant did not employ the plaintiff, 
the conduct of the parties shows beyond the 
shadow of a doubt that the plaintiff did not con 
sider the defendant his employer and did not look 
to him for the payment of his salary. Between 
May, 1886, and the 23d of September, 1886, the 
business was carried on by the parties as a part 
nership, the plaintiff owning one-tenth and the 
defendant nine-tenths. The salary of plaintiff was 
paid out of the moneys belonging to both the par 
ties and charged as an expense of the business. 
(Trans., folio 140). The arrangement at the time 
it was made as understood by the plaintiff was, 
that he was to have ten per cent, of the entire 
business and ten per cent, of the net profits after 
all expenses were paid, including his own salary. 
As soon as the corporation was formed the prop 
erty and business were transferred to it, the 
plaintiff received one-tenth of the capital stock 
and the business was carried on by the corporation 
until the date of the commencement of this action. 
The plaintiff acted as manager for the corpora 
tion until the end of June, 1892, and all of the 
service which he claims to have rendered subse 
quent to June, 1892, he claims to have rendered 
to the corporation. From the date of its forma 
tion until the end of June, 1892, the corporation 
paid his salary. It was paid through the treasurer 



28 

of the company who was under the direction of 
the plaintiff, was entered upon the books of the 
corporation as an expense of the business, and all 
profits which were divided either in the shape of 
dividends or in any other way, were the net 
profits after the deduction of all expenses includ 
ing the plaintiff's salary. He commenced actions 
against the corporation to recover for services 
rendered it during the months of July and Au 
gust, 1892. For the payment of the salary which 
he claimed to be due him subsequent to June, 
1892, he made demand on the treasurer of the 
corporation, but never made any demand on the 
defendant. (Trans., folio 152.) When his right 
to act as manager of the History Company was 
interfered with he addressed Dorland as the sec 
retary and treasurer of the corporation, and Dor- 
land answered him in that capacity. He claims 
that when he made the arrangement with Miller 
he informed the latter that he was subject to the 
call of the History Company, and he considered 
that during all the time he was engaged in busi 
ness with Miller that the History Company was 
entitled to call upon him at any time to perform 
the service stipulated by him in this agreement to 
be performed. (Trans., folio 168.) The plaint 
iff managed the business of the copartnership and 
of the corporation and deducted all expenses, in 
cluding his own salary, before dividing profits or 



29 

declaring dividends, and took at one time one- 
tenth, and later fifteen one-hundredths of the 
profits remaining after such deduction. 

We feel that it is not necessary to discuss this 
question at any greater length, and we leave it 
with the statement that it is impossible to read the 
testimony of the plaintiff and reach any other 
conclusion than that he thoroughly understood 
that after the formation of the corporation he was 
in its service and not the service of the defendant, 
and that his compensation was to be paid not by 
the defendant but by the corporation. 

The authorities cited in support of the demurrer 
(particularly Weaver vs. Upton) are conclusive 
against the plaintiff on this question. 

IV. 

The defendant fully performed the agreement. 

The plaintiff admits that defendant transferred 
to him one-tenth of the property, and that upon 
the formation of the corporation the property and 
business were transferred to it, and he received 
certificates representing one-tenth of the capital 
stock. This was all defendant agreed to do, and 
hence there was no testimony sustaining the alle 
gation of the complaint that he had failed to per 
form the terms and conditions on his part. 



30 

V. 

The plaintiff was not dismissed or discharged, 
and hence can only recover for the services actually 
rendered. 

While it is claimed by the plaintiff that the 
conduct of some of the officers and employees of 
the History Company was such as to make it very 
disagreeable for him to remain at the office of the 
company, he does not claim that at any time dur 
ing the period for which he claimed compensation 
in this action, the defendant personally did or said 
anything calculated to prevent him from acting as 
the manager of the business of the corporation. 
When interfered with in the discharge of his duties 
he served notice on the secretary and treasurer of 
the corporation, but had no conversation of any 
kind with the defendant between July, 1892, and 
the time when this action was commenced (Trans., 
folio '152). 

The immediate cause for the plaintiff quitting 
the service of the company is stated by him as 
follows: (Trans., folio 203): "I considered I 
wasn't in duty bound to my family and myself to 
stay there in that draught and get a cold, and so 1 
informed Mr. Dorland that I couldn't stay there 
unless he changed the desk." He claims that 
Dorland, told him he had been instructed by de 
fendant not to let him have the correspondence 
and not to permit him to do any work at the office 



31 

of the company. He states that Borland was un 
der direction of defendant " because Borland said 
so," hut admits that he knew that Borland was 
acting under direction of the defendant only be 
cause Borland said so. (Trans., folio 104). 

While it is true that plaintiff testified that Mor 
rison, the vice-president of the company, told him 
he had no right there in July, 1892, he continued 
to go there and discharge his duties for a long 
time after that, and did not act upon the sugges 
tion which Morrison made to him. (Trans., folios 
204 and 205). Notwithstanding the conduct of 
Borland and Morrison, the plaintiff says posi 
tively and unequivocally that he was never dis 
missed or discharged from the service of the His 
tory Company. (Trans., folio 236). 

There cannot be found anywhere in the record 
any testimony showing that the defendant dis 
missed or discharged the plaintiff, or directed any 
one to dismiss or discharge him. While it is true 
he claims that the defendant treated him without 
consideration on one or two occasions, everything 
which he charges against defendant took place 
long before he voluntarily left the History Com 
pany's office. The last thing which defendant 
did, so far as the testimony discloses, was to push 
the plaintiff's desk, and this occurred in the month 
of July, 1892. (Trans., folios 200 and 201.) He 
certainly could not have taken that act as a dis- 



32 

charge, as on his own showing he remained and 
discharged his duties for a long time after that. 
The only reason why he discontinued his visits to 
the office of the company is that his salary was 
not paid. He says that the duties he performed 
during September, October and November were 
" sitting around and waiting. It was rather te 
dious and not as easy as managing the business. 
It was very little work. I would have been willing 
to have gone there at eight o'clock in the morning 
and stayed until five o'clock at night if my salary 
had been paid; but I would rather have managed 
the business." This testimony not only fails to 
show that the defendant dismissed the plaintiff, but 
there is no showing that he was dismissed by any 
officer of the History Company. We do not for 
a moment claim that if the testimony of the plaintiff 
be true, there did not exist good cause for him to 
quit the service of the History Company. But 
quitting service for cause is not equivalent to a 
discharge. While an employee who is, without 
good cause, discharged before the end of the term 
for which he was hired, may recover damages for 
breach of the contract by the employer, one who 
quits the service for good cause, can only recover 
compensation for the portion of the term during 
which he has actually rendered service. Harsh 
treatment may have justified the abandonment of 
the contract of service by plaintiff, but did not 



33 

amount and could not have amounted to a dis 
charge by defendant. If, by reason of the harsh 
treatment to which plaintiff was subjected, he 
abandoned the contract of service, his recovery is 
measured by the provisions of sections 2003 of 
the CivilCode : 

Civil Code, Sec. 2003: "An employee who quits 
" the service of his employer for good cause is en- 
" titled to such proportion of the compensation 
" which would become due in case of full perform- 
" ance as the services which he has already ren- 
" dered bear to the services which he was to ren- 
" der as full performance." 

The manifestation of a disposition by the em 
ployer to force the employee to quit the employ 
ment does not amount to a discharge nor warrant 
the rescission of the contract by the employee. 

De Camp vs. /Stevens, 4Blackford (Ind.), 24. 

The fact that the master constantly found fault 
with the servant in respect to the manner of his 
work, is not sufficient cause to warrant the servant 
to terminate the contract. 

Henderhen vs. Cook, 66 Barb., 21. 

Telling a servant to go to hell is not only not a 
discharge, but is not sufficient ground to warrant 
the servant in quitting the employment. 
Marsh vs. Ruksson, 1 Wend., 514. 



34 

While the discussion of this question seems out 
of place in an action to recover for services al 
leged to have been rendered, an examination of 
this record will disclose that part of the time the 
case was tried on the theory that it was an action 
to recover for service actually performed, and at 
other times it seems to have been treated as an 
action to recover damages for breach of the con 
tract of hiring. 

VI. 

The order denying defendant's motion for new 
trial should be reversed for numerous errors com 
mitted by the lower Court. 

Something over sixty exceptions were taken by 
the defendant during the trial, and we think most 
of them well taken. The testimony which was 
admitted against defendant's objection was not re 
sponsive to any issue presented by the pleadings 
and was calculated to and did influence the jury 
to his prejudice. 

The first two exceptions were taken to orders of 
the Court overruling defendant's objection to 
testimony in relation to certain matters which 
took place in 1882, more than four years before 
the making of the contract between plaintiff and 
defendant, and ten years before the alleged breach 
of contract. (Trans., folios 51 and 52.) There 
was no issue presented to which this testimony was 
responsive, and while it may be said that it did 



35 

not hurt defendant, it is to be presumed that the 
jury attached some importance to it. 

Exceptions 3 and 4 (Trans., folios 60 and 63) 
were taken to orders of the Court overruling ob 
jections to questions propounded to the plaintiff in 
relation to the payment of dividends, and the con 
duct of the History Company's business prior to 
March, 1892. The plaintiff was paid the salary 
which he claimed to and including June, 1892, 
and it certainly made no difference whether the 
company paid dividends prior to that time or not. 
The object of this testimony and its effect must 
have been to exaggerate the importance of the 
plaintiff and to prejudice the jury against the de 
fendant. Still more objectionable was the testi 
mony to the effect that the defendant interfered 
with the plaintiff in 1889, three years before the 
alleged breach, by taking his name off the letter 
heads of the History Company. 

Exception No. 5 (Trans., folio 65) was to an 
order overruling an objection to a question calling 
for the conduct of the defendant at a meeting of 
the directors of the History Company in 1889. 
This did not show or tend to show any breach of 
the contract in 1892, and indeed there is no claim 
in the pleadings of any failure of performance by 
the defendant, except his refusal to pay the 
plaintiff's salary subsequent to June, 1892. 

Exception No. 6 (Trans., folio 71) was to an or- 



36 

der overruling an objection to a question pro 
pounded to the plaintiff calling for the response 
made by Dorland to a demand made upon him as 
the secretary and manager of the History Com 
pany, for the payment of plaintiff's salary subse 
quent to July, 1892. There was no showing that 
Dorland was authorized to speak for the defend 
ant, and the plaintiff himself testified later on that 
the only knowledge he had that Dorland was 
authorized to speak for the defendant was the fact 
that Dorland himself had told him so. (Trans., 
folio 104.) The fact that the plaintiff made de 
mand upon the secretary of the History Company 
for his salary shows conclusively that he considered 
the History Company his employer, and in an 
action against the corporation such testimony would 
have been relevant and competent; but it was 
neither relevant nor competent in an action against 
the defendant until it was shown that Dorland was 
the agent of defendant. 

Exception No. 8 (Trans., folio 80) was to an 
order of the Court overruling an objection to a 
question propounded to the plaintiff and calling 
for information in relation to a conversation be 
tween plaintiff and defendant, about the 15th of 
May, 1892. As has been said, the plaintiff was 
paid for all services rendered by him up to and 
including the 30th day of June, 1892. He 
claims he was never discharged or dismissed, 



37 

and asserts that he actually rendered service until 
the latter part of the year 1892. Hence the tes 
timony called for by this question was wholly 
irrelevant and immaterial. An examination of 
the testimony given in response to the question 
will show that its object was to place the defend 
ant in a most unfavorable light before the jury, and 
that the object was accomplished. 

The same may be said of Exception No. 9 
(Trans., folio 85). 

Exception No. 10 (Trans., folio 87) was to an 
order overruling an objection to a question pro 
pounded to the plaintiff, in relation to the levy of 
an assessment in November, 1892, and exceptions 
Nos. 11 and 12 (Trans., folios 88 and 89) present 
substantially the same question. Whether an as 
sessment was or was not levied or paid had noth 
ing to do with this case, nor with the performance 
of plaintiff's contract, nor the failure of defend 
ant or the History Company to pay him his salary, 
nor the refusal of the History Company or the 
defendant to permit him to perform the contract. 

Exception No. 13 (Trans., folio 96) was to an 
order overruling an objection to a question pro 
pounded to the plaintiff in relation to the reply 
made to a question which he had put to Morrison. 
The objection, which was certainly well taken, 
was upon the ground that defendant was not bound 
by any statement made by Morrison, and there 



38 

was no attempt made at any time during the trial 
to show that defendant had authorized Morrison 
to speak for him. The same question is presented 
by Exception No. 14 (Trans., folio 103) in rela 
tion to statements made by Dorland, the plaintiff 
admitting that the only evidence he had of the 
fact that Dorland was permitted to speak for the 
defendant was that Dorland told him so (Trans., 
folio 104). The same question is presented by 
Exception No. 15 (Trans., folio 105). 

Exception No. 16 (Trans., folio 111) was to an 
order of the Court overruling an objection to the 
reading of an extract from a volume of defendant's 
works published in 1890. The conduct of the 
plaintiff during that year was not in issue arid any 
statement which defendant may have made con 
cerning him during that year was entirely irrele 
vant and immaterial. 

Exception No. 22 (Trans., folio 252) was to an 
order overruling defendant's objection to a ques 
tion put to the witness Hambly calling for a state 
ment of the number of hours which plaintiff spent 
in the office of the History Company each day 
from September, 1886, to February, 1892. The 
plaintiff's conduct prior to July, 1892, was not in 
issue and had no relevancy or materiality to any 
question upon which the jury was to pass. 

Exception No. 23 (Trans., folio 311) was to an 
order overruling a question put to the witness 



Hartwell, asking if defendant ever countermanded 
any of plaintiff's orders in relation to the business 
of the History Company. Hartwell left the ser 
vice of the company in May, 1892, and no issue 
was presented in relation to the conduct of plaintiff 
or defendant prior to that time. The effect of this 
testimony was to place the defendant in an un 
favorable light before the jury. 

Exceptions Nos. 24, 25, 26, 27, 28, 29, 30, 31, 
and 32 (Trans., folios 324, 333, 334, 336, 342 ; 344, 
346, 349 and 352) were to orders of the Court 
overruling objections made to questions propounded 
to the witness Trigo. The object of the testimony 
to which these objections were made was to prove 
the formation of a conspiracy, in the latter part of 
1891 or the early part of 1892, to prevent the 
plaintiff from performing his contract of service, 
to prevent him, as a stockholder, from receiving 
any profit from the corporation, and to rob the 
History Company of a portion of its property. 
How this testimony, or any of it, tended to show 
the performance of the contract by the plaintiff, 
or that defendant was liable to plaintiff for the 
agreed salary, which were the only issues pre 
sented by the pleadings, is difficult to understand. 
It is very easy to appreciate, however, that the 
testimony placed the defendant in a very unen 
viable light before the jury, and induced for the 
plaintiff a great deal of sympathy to which he 
was not entitled. 



40 

Exception No. 33 (Trans., folio 471) is to an 
order overruling an objection to the introduction 
of a letter written by Morrison in February, 1892. 
The plaintiff stated that the letter was offered for 
the purpose of showing that the witness had ap 
plied to the defendant for the office of vice-presi 
dent of the History Company. The plaintiff was 
not suing to recover for services as vice-president 
of the History Company, and it is riot claimed that 
any agreement was made that he should have or 
retain that office. At any rate, nothing of that 
kind is said in the agreement on which the action 
is founded. The object of the letter was to show 
that the witness Morrison had attempted to under 
mine the plaintiff, and its effect was to place him 
and the defendant in an unfavorable light. 

Exception No. 35 (Trans., folio 615) was to an 
order overruling a question to the witness Moore, 
in relation to certain statements made to him by 
Morrison. This was an attempt to contradict Mor 
rison on a collateral matter brought out by the 
plaintiff on his cross-examination. Having ex 
amined him on a collateral matter, he was bound 
by his answer and should not have been permitted 
to contradict him. 

The same objection is presented to Exception 
No. 35 (Trans., folio 624). On the cross-exam 
ination of Miller the plaintiff against the defend 
ant's objection went into certain collateral matters 



and then attempted to contradict the testimony of 
the witness on those subjects. 

Exception No. 39 (Trans., folio 673) was to an 
instruction given to the jury to the effect that if 
they found that plaintiff was ready to perform the 
service and was prevented by defendant from per 
forming, they should find in his favor; and the 
same question is presented by Exception No. 
40 (Trans., folio 674). As we have several 
times suggested, the Court below confounded 
this with an action for damages for breach of 
contract and admitted evidence and instructed 
the jury on that theory. While the rule laid 
down might have been proper in an action 
to recover damages for the refusal of the de 
fendant to permit the plaintiff to perform his con 
tract it had no application in an action to recover 
for services alleged to have been actually rendered. 
The jury should have been told that in order to 
entitle plaintiff to recover in this action, he should 
have shown actual performance of the service al 
leged in his complaint to have been performed. 

Exception No. 41 (Trans., folio 676) is to an 
instruction reading as follows: "There is testi- 
" mony tending to show that the plaintiff was not 
" discharged from employment under said agree- 
" inent either by the defendant or by the History 
" Company. Under this state of facts, the plaintiff 
" was simply bound to hold himself in readiness 



42 

" to perform such services as may have been re- 
" quired of him by the said defendant or the 
" History Company. If you find from the evi- 
41 dence that he was not required or allowed by 
" either the said History Company or the said 
" defendant to perform any services, but held 
" himself in readiness to execute the contract, in 
" accordance with its terms, such readiness to per- 
" form is equivalent to performance." This in 
struction told the jury that the defendant was 
responsible, not alone for his own conduct, but for 
the conduct of the History Company; not alone 
for his own default, but for the default of the 
History Company; not alone for his own refusal 
to permit the plaintiff to perform his contract, but 
also for the refusal of the History Company to 
permit him to perform; and that if plaintiff was 
ready to perform and the History Company re 
fused to allow him to perform, such readiness was 
equivalent to performance and entitled him to a 
verdict, not against the History Company but 
against the defendant, for the full amount for 
which he sued. 

This instruction was particularly hurtful to the 
defendant, as the Court had admitted against his 
objection testimony tending to show acts unfriend 
ly to the plaintiff on the part of the treasurer and 
vice-president of the History Company, and the 
jury were told in effect that if those officers had 



43 

thrown obstacles in the way of the performance of 
the agreement by plaintiff, that defendant was 
answerable therefor, although he had not done 
anything calculated to interfere with the plaintiff 
or to prevent him from carrying out his contract. 
Exception No. 42 (Trans., folio 679) was to an 
instruction in which the jury was told that if the 
defendant prevented the plaintiff from discharging 
the duties required of him, he was entitled to the 
salary mentioned in the agreement " the same as 
if all the duties required by said contract had been 
performed." This was not only a bad instruction 
in this case, but would not have been good even 
in an action to recover damages for the breach of 
the contract. A discharged employee is not under 
any circumstances entitled to his salary " the same 
as if all the duties required by the contract of 
hiring had been performed." He is entitled to 
recover as damages the amount which he has lost 
by having been prevented from performing the 
agreement, but it by no means follows that his loss 
is the salary stipulated to be paid to him. The 
measure of the plaintiff's recovery in an action for 
damages is correctly stated in the instruction to- 
which Exception No. 43 (Trans., folio 681) was 
taken. The latter instruction would have been 
proper in an action for breach of contract, but it 
was improper in this case, and further than that, 
it was impossible for the jury to reconcile it with 



44 

the instruction to which Exception No. 42 was 
taken. 

Exceptions Nos. 46, 47 and 48 (folios 684 and 
685) were to instructions charging the jury in re 
lation to the amount which plaintiff was entitled 
to recover. The Court committed error in giving 
each of these instructions, as this was not an ac 
tion for " default," no " measure of damage " was 
in issue, because no damage was alleged, nor was 
"the detriment caused by the breach of an obli 
gation " presented to or to be passed upon by the 
jury. 

Exception No. 48A (Trans., folio 687) was to 
the refusal of the Court to give an instruction re 
quested by defendant, and we submit that it is 
only necessary to read it in order to see that the 
instruction was proper and should have been 
given. 

Exception No. 49 (Trans., folio 688) was to the 
refusal of the Court to instruct the jury as follows: 
" You are instructed that the written agreement 
" set forth in the complaint does not provide that 
" the salary of the plaintiff shall be paid by de- 
" fendant." It was the duty of the Court to 
construe the agreement and to tell the jury upon 
whom rested the obligation to pay the salary. 
That the agreement did not provide for the pay 
ment of the salary by defendant, we think we 
have conclusively demonstrated. 



45 

Exception No. 50 (Trans., folio 689) was to the 
refusal of the Court to instruct the jury that if a 
corporation had been formed and the property 
mentioned in the agreement turned over to it and 
one-tenth of the capital stock issued to the plaint 
iff, and the plaintiff became and acted as the 
manager of the corporation, the claim of the 
plaintiff, if he had any, was against the corpora 
tion and not against the defendant. 

Exception No. 51 (Trans., folio 690) was to the 
refusal of the Court to instruct the jury that in 
order to find for the plaintiff they must find that 
he actually rendered the service for which he 
sued, and that in this action it was enough for him 
to show that he was prevented from performing 
such service. This instruction correctly stated 
the law upon the subject to which it related, and 
should have been given. 

Exception No. 52 (Trans., folio 693) was to the 
refusal of the Court to give an instruction reading 
as follows: "If you find that plaintiff was not 
" dismissed or discharged from the employment, 
" but that he quit said employment on account of 
" the treatment to which he was subjected, then I 
" instruct you that this was an abandonment of the 
* employment by him, and that he cannot recover, 
" except for services rendered before such aban- 
" donment." This instruction correctly stated the 
rule of law laid down in section 2003 of the Civil 



46 

Code, and should have been given. The Court 
modified the instruction so as to provide that if the 
plaintiff quit the employment on account of the 
treatment to which he was subjected by persons 
other than the defendant, that it was an abandon 
ment of the service, and he could not recover 
except for the services actually rendered. If the 
plaintiff quit the employment on account of the 
treatment to which he was subjected, it was cer 
tainly an abandonment of the employment, whether 
he was subjected to such treatment by the defend 
ant or by any one else. If he was not dismissed* 
but quit the employment no matter for what 
reason he was not entitled to recover for any 
service not actually rendered. 

Exception No. 53 (Trans., folio 695) was to the 
refusal of the Court to instruct the jury as follows: 
" This is not an action to recover damages for 
" breach of the contract set out in the complaint. 
'" It is to recover for services claimed to have been 
" performed under that contract, and it is there- 
" fore necessary, in order to find for plaintiff, to 
41 find that he actually rendered the service." 
This was but stating that in order for the plaintiff 
to recover he must have satisfied the jury of th 
truth of the allegations of his complaint. > 

Exception No. 56 (Trans., folio 700) was to the 
refusal of the Court to instruct the jury as follows: 
" If you find from the evidence that after the 



" making of the agreement set out in the com- 
" plaint, the plaintiff entered into or engaged in 
" directly or indirectly, any other mercantile or 
" manufacturing business, then I instruct you that 
11 when he so entered into or engaged in said busi- 
" ness, he violated the agreement." 

The agreement contains this provision: " The 
" said Stone agrees not to enter into or engage in 
" directly or indirectly any other mercantile or 
" manufacturing business, or to any other business 
" or occupation which shall in anywise absorb his 
" mind or strength or interfere with his interest 
" or efforts on behalf of this History Company, for 
" said term of ten years." There was testimony 
tending to show that he had entered into a mer 
cantile and manufacturing business with Miller. 
The proper construction of this provision of the 
agreement is that plaintiff should not engage, 
directly or indirectly, in any other mercantile or 
manufacturing business of any kind, and that he 
should engage in no other business which should 
absorb his mind or interfere with his 
efforts on behalf of the History Company. 
He is not given the right to engage 
in any other mercantile or manufacturing 
business, even if it does not in anywise absorb his 
mind or interfere with his efforts on behalf of the 
company, but is absolutely prohibited from en 
gaging in any such business. He may, under the 



48 

provisions of the agreement, engage in any other 
occupation or business, except a mercantile or 
manufacturing business, which does not in any 
wise absorb his mind or interfere with his efforts 
on behalf of the corporation. The business which 
the agreement provided should be carried on was 
a mercantile and manufacturing business. It is 
quite clear that the parties intended that the 
plaintiff should not engage in any other business 
of the same character, and unless this be the 
proper construction, the words "any other mer 
cantile or manufacturing business " are entirely 
without force or effect. In other words, if it had 
been intended that plaintiff should have the right 
to engage in any mercantile or manufacturing 
business which did not absorb his mind or inter 
fere with his efforts on behalf of the corporation, 
the restriction would have been confined to "any 
other business or occupation which should in any 
wise absorb his mind," etc., which would have in 
cluded mercantile and manufacturing business and 
every other branch of business. In construing an 
agreement every portion of it should be given 
effect, if possible. That the Court below in de 
clining to instruct the jury as requested construed 
the agreement as if the words, " any other mer 
cantile or manufacturing business " had been en 
tirely omitted from it, is quite clear. 4 



49 

VII. 

The verdict ivas against law. 

The Court instructed the jury that if the services 
rendered, were rendered for the History Company 
and not for the defendant, then the plaintiff could 
not recover against the defendant, yet all the testi 
mony showed and the plaintiff himself admitted 
and testified, that the services claimed to have 
been performed by him, were performed for the 
History Company and not for the defendant. 

The judgment and the order denying defend 
ant's motion for new trial should be reversed. 
Respectfully submitted, 

EDWARD J. McCUTCHEN, 

Attorney for Appellant* 



Due service of the within is hereby admitted 
this day of ^895. 

Attorney for 



No. 



IN THE 

SUPREME COURT 

OF THE 

STATE OF CALIFORNIA. 



N. J. STONE, 

Plaintiff and Respondent, 
vs. 

H. H. BANCROFT, 

Defendant and Appellant. 



Respondent's Points and Authorities, 



REDDY, CAMPBELL & METSON, 

Attorneys for Respondent. 



Filed this day of .., A. D. 189 

T. H. WARD, Clerk. 

By Deputy Clerk. 

JAMES H. BARRY, PKINTHK, 439 MONTGOMHRV STREET, SAM FRANCISCO. 



IN THE SUPREME COURT 

OF THE 

STATE OF CALIFORNIA. 



N. J. STONE, 

Plaintiff, 



vs. 
H. H. BANCROFT, 



Defendant. 



STATEMENT OF FACTS. 

This action is brought, upon a written con 
tract, a copy of which is set forth in the com 
plaint, for fourteen months' salary at the rate 
of three hundred and fifty dollars per month, 
commencing on the 1st day of July, 1892, 
amounting in the aggregate to the sum of four 
thousand nine hundred dollars. 

The defendant interposed a demurrer to the 
complaint, which was overruled. 

The defendant answered and admitted the 



2 

due execution of the contract, and that the 
amount sued for had not been paid, and denied 
his liability for the payment thereof upon 
three grounds: 

First. That defendant was not personally 
liable to the plaintiff on the contract for the 
salary sued for, but that the same was payable 
out of the earnings and profits o? the History 
Company. 

Second. That the plaintiff, on his part, did 
not keep and perform the terms and conditions 
of the contract. 

Third. That the defendant, on his part, did 
perform all the terms and conditions of the 
contract. 

The first defense involves the construction 
of the written agreement, and presents a pure 
question of law. 

The second and third defenses give rise to 
questions of fact. 

These are the only issues presented by the 
pleadings. 

The jury rendered a verdict in favor of the 
plaintiff and against the defendant, upon which 
verdict the Court rendered judgment. 
Trans., pp. 15-16. 

The defendant moved for a new trial. The 



motion was denied, and from the judgment and 
order the defendant has taken this appeal. 

RESPONDENT'S POINTS AND AUTHORI 
TIES. 

INTERPRETATION OF AGREEMENT: THE DEFEND 
ANT IS PERSONALLY LIABLE TO THE PLAINTIFF ON 
V THE CONTRACT, FOR THE PAYMENT OF THE SALARY 
MENTIONED THEREIN. 

The defendant and the plaintiff were the 
only parties to the contract. 

It is an elementary principle that "both were 
bound, each to perform his part of the agree 
ment. Neither party pretended to bind any 
body but himself. 

The execution of the agreement superseded 
all the oral negotiations or stipulations con 
cerning its matter, which preceded or accompa 
nied the execution of the instrument. 

C. C., Sec. 1625. 

The language of the contract is clear and ex 
plicit, and should therefore govern in its inter 
pretation. 

C. C., Sec. 1638. 



It is a contract of employment. 
C. C., Sec. 1965. 

The recitals contained in the instrument are 
conclusive of the facts therein recited. These 
show that Mr. Bancroft had heen engaged in the 
business mentioned for a considerable length 
of time, and had carried it on under various 
names, but latterly under the name of the His 
tory Company, and that Mr. Stone had conducted 
the business for him ; that Mr. Bancroft appreci 
ated the value of the services of Mr. Stone, and 
desired to acquire them by an agreement for a 
period of ten years; and, in consideration of 
the valuable services already performed by 
Mr. Stone, Mr. Bancroft sold and assigned to 
Mr. Stone a one-tenth interest in said History 
Company, and its plates, paper, stock, etc., 
upon the conditions set forth. 

Trans., pp. 4, 5. and 6, fols. 6-10 inclu 
sive. 

All that is required of Mr. Stone under the 
contract is that he shall devote his whole time 
and best energies, for a period of ten years, to 
the business mentioned. 

The grant of the property mentioned, as will 



be seen, was upon condition subsequent, and 
the salary of three hundred and fifty dollars 
per month was dependent upon the perform 
ance of the services required. 

The services were to be rendered to the His 
tory Company, but the History Company be 
fore the execution of the agreement was a 
myth. There was no company. Mr. Bancroft 
was the real party, and he used the name of 
the company in conducting his own business, 
and after the agreement and up to the time of 
the incorporation of the History Company, 
Bancroft was the owner of ninety per cent, of 
the business and property, and an agreement 
to render services to the History Company, was 
an agreement to render services to Bancroft 
himself. 

The contract was not one of partnership, but, 
as above stated, was one of employment, by 
which Mr. Stone, for the consideration named, 
agreed to render his services to the History 
Company. 

All that had been transferred or promised to 
Mr. Stone was in the way of compensation for 
services which had been and were to be ren 
dered. 



6 

It was not the intent of the parties to become co 
partners or to conduct the business as such. 

The agreement shows that the so-called His 
tory Company was to be incorporated. 

Upon incorporation ten shares of stock were 
to be delivered to Mr. Stone, in lieu of the in 
terest conveyed by Mr. Bancroft. 

It was not the intention to convey a one- 
tenth interest in the History Company and 
property mentioned, and ten shares after cor 
poration. 

Whether so or not, the fact that the Com 
pany was to be incorporated and shares of 
stock issued shows that they did not intend to 
conduct the business as co-partners. 

Therefore, Mr. Stone and Mr. Bancroft did 
not associate themselves together prior to the 
incorporation, for the purpose of carrying on 
the business together and dividing the profits 
between them, in the sense of Section 2395 of 
the Civil Code. 

Assuming, for the purpose of argument, that 
the agreement was one of co-partnership at the 
time of its execution, and that the partnership 
was to continue until the incorporation, it was 
competent for Mr. Bancroft to agree to pay his 
co-partner three hundred and fifty dollars per 



month, for devoting his entire time and atten 
tion to conducting the business, and it would 
create a personal obligation on the part of Mr. 
Bancroft to pay that salary, and upon such an 
agreement Mr. Bancroft would be liable, even 
though the concern should never realize a 
dollar, and even though its entire capital 
should be lost. 

It is not stated in the agreement that the 
three hundred and fifty dollars should be paid 
out of the capital, earnings, or profits of the 
alleged partnership. 

To make the salary payable out of the funds, 
earnings, or profits of the concern, would be at 
least to reduce the salary of Mr. Sfone, and, if 
the concern should not be successful, might de 
prive him of any salary at all. 

A partner has a right to maintain an action 
against a partner upon a contract of this kind, 
as he would have upon a promissory note. 

He had no cause of action against the cor 
poration, not having any contract with it. 

The contract is between Mr. Stone and Mr. 
Bancroft, requiring Mr. Stone to render his ser 
vices to the History Company. 

" If A contracts with B to make a coat for C, 
" A must pay for it, though C wears it." 



8 

Addison on Contracts, Vol. 1, 3rd Am. 

Ed., Sec. 38, p. 72; 8th Ed., p. 70. 
C. C., Sec. 1965. 

The contract of Mr. Bancroft created no obli 
gation on the part of the History Company to 
pay the salary. If the History Company had 
never been incorporated Mr. Bancroft would 
have been liable on the contract. 

Mr. Bancroft had entire control of the His 
tory Company before its incorporation, and its 
officers after incorporation. Before incorpora 
tion he could have dissolved the alleged part 
nership and could have closed the business at 
any time, but that would not release him from 
his obligation on the contract. 

The corporation might fail in business. It 
might be dissolved and go out of existence, and 
upon proceedings for a dissolution the claim of 
Mr. Stone for salary could not be regarded as a 
debt of the corporation. 

Who then would be liable for his salary, or 
for a breach of the contract of employment? 
We apprehend that it- would be Mr. Bancroft, 
the other party to the contract. 

It is contended by counsel for the appellant 
that the salary is payable by the History Com 
pany. 



9 
Appellant's Brief, page 14. 

We have already shown that Mr. Stone had 
no contract whatever with the History Com 
pany and that the corporation was not liable 
to him. 

Nor was he authorized to pay himself out of 
any money belonging to the corporation. 

It is contended by counsel for appellant 
(appellant's Brief, page 14, 1st paragraph), 
" That defendant did not undertake to pay the 
" plaintiff the salary stipulated in the agree- 
" ment, and both plaintiff and defendant 
" agreed that plaintiff's salary should be $350 
" per month, which salary was of course, to be 
" paid by the History Company." 

Of course an agreement might have been 
made between the plaintiff and the defendant, 
that the plaintiff should rely upon the earnings 
of the corporation for his salary, provided the 
corporation would sign it, but the difficulty in 
this case is, that they did not make that kind 
of an agreement. 

Counsel, however, say that of course it was to 
be paid by the History Company, but neither 
the parties nor the History Company agreed 
that it should be so paid. 

There is not a word in the agreement which 



10 

indicates or intimates that the History Com 
pany, should pay any part or portion of the 
salary named in the agreement. 
. The language is: " The salary of said Stone 
ls shall he three hundred and fifty dollars per 
" month." 

There is no reference to payment out of any 
fund, or by any party except H. H. Bancroft. 
Can that language be regarded as a stipula 
tion that he should look for payment to any 
fund or to any person other than Mr. Ban 
croft? 

Mr. Stone agreed to render his services in the 
manner required by the contract, and that is 
all he stipulated to do, and all other parts of 
the agreement were stipulations and promises 
on the part of Mr. Bancroft. 

Can it be contended that the language used 
was not an assurance and agreement on the 
part of Mr. Bancroft that Mr. Stone should re 
ceive three hundred and fifty dollars per 
month? 

Was it not a promise that he should be paid 
that amount? Is there any difference between 
saying, " the salary of the said Stone shall be 
" three hundred and fifty dollars per month," 
and saying, " the said Stone shall be paid 



11 

" three hundred and fifty dollars per month?" 
In the hitter ca*e would any one contend that 
Mr. Bancroft was not liable for the payment? 

If Mr. Bancroft had said: " I hereby employ 
" N. J. Stone as manager of the History Com- 
;< pany, for the period of ten years, and the 
<l salary of the said Stone shall be three hun- 
" dred and fifty dollars per month," could 
such language be construed to mean that the 
History Company was to pay it and that Mr. 
Bancroft was not? 

Counsel proceed (Brief, page 14. last clause 
of first paragraph): " It will hardly be ques- 
" tioned that from the date of the agreement, 
" the parties were to share in the profits and 
'* losses of the business in proportion to their 
" respective interests." 

The answer to this is, that the written agree 
ment contains no such provision. Nor do we 
think that it can be fairly implied from any 
language contained therein that Mr. Stone was 
to share in the losses of the business in pro 
portion to his interest. 

But even if he was, it would make no differ 
ence in his right to recover three hundred and 
fifty dollars per month from some one. The 
only question is whether he could recover that 



12 

salary from some one who had not entered into 

ft 

any contract with him, or from some one who 
had. 

It. 

THE DEMURRER TO THE COMPLAINT WAS 
PROPERLY OVERRULED. 

It is contended by the appellant (Appellant's 
Brief, page 11), that the demurrer interposed 
by the defendant should have been sustained: 

" First. Because the complaint did not state facts 
" sufficient to constitute a cause of action." 

We do not see how this contention can be 
supported. The contract is between the plain 
tiff, Stone, and the defendant, Bancroft. The 
parties agreed upon the amount of salary to be 
paid. The language of the agreement is, " The 
" salary of the said Stone shall be three hun- 
" dred and fifty dollars per month." 

If the contract had expressly provided that 
the services were to be rendered directly to Mr. 
Bancroft, and the contract contained the same 
language, could there be any question as to 
the liability of Mr. Bancroft to pay the 
salary? 

The fact that the agreement required that 



13 

the services were to be rendered to a third per 
son does not alter the case. 

Addison on Contracts, Vol. 1, 3rd Am. 

Ed., Sec. 38 p. 72. 
Addison on Contracts, Vol. 1, 8th Ed., 

p. 70. 

C. C., Sec. 1965. 
Craig vs. Fry, 68 Cal., 363. 

The corporation might receive the benefit of 
the services, and yet Mr. Bancroft, by reason 
of his written promise, be liable for the pay 
ment of the salary. 

In this case, however, at the time of the ex 
ecution of the agreement, Mr. Bancroft was the 
owner of ninety per cent, of the property and 
business In fact, there was no one to be bene 
fited at that time but Mr. Bancroft. 

The complaint stated a cause of action. It 
is shown by the agreement and by the allega 
tions of the complaint that the plaintiff had 
performed, and that the defendant had refused 
and neglected to perform, and that defendant 
had failed to pay, from a certain date, the 
salary agreed upon. 

" Second. That the complaint was ambiguous, 
1 unintelligible and uncertain, in that it did not 



14 

" appear whether the corporation referred to in the 
" agreement was ever formed or not.' 1 

That could make no difference as to the lia 
bility of the defendant. 

The plaintiff could not perform the services 
for the corporation until after incorporation. 

The service was to begin at the date of the 
agreement and the plaintiff was to serve the 
then so-called History Company until the in 
corporation. If the company was never incor 
porated, it could not affect the agreement be 
tween the plaintiff and the defendant. 

" Third. That it did not appear what services 
'' were performed by plaintiff." 

The allegation in the complaint that the 
plaintiff had faithfully performed the terms 
and conditions of the contract, on his part to 
be kept and performed, was a sufficient allega 
tion of performance by him. 

The agreement set forth in the complaint 
showed clearly what he was to do. and taking 
this with the allegations of performance, there 
could be no uncertainty or ambiguity as to 
what services were to be performed. 

" Fourth. That it did not appear from the 
" complaint whether the services were performed for 
" the defendant or for the History Company ." 



15 

The agreement set forth in the complaint 
and the allegation of performance were quite 
sufficient to inform the defendant upon this 
point. 

In support of his demurrer, it is stated by 
appellant (Appellant's Brief, page 11): 

' It is to be remembered that the action is 

' not for the breach of the contract, and that 

;' the complaint does not allege any damage, 

4 but, on the contrary, it alleges performance 

: ' of the agreement for which the plaintiff 

" claims a stipulated compensation." 

We agree with counsel that it is not an 
action for breach of contract, in the general 
sense, but it is an action on the contract 
for the amount due thereon and remaining 
unpaid. 

The contract is still in force and the plain 
tiff is under obligation to obey a call to per 
form his duties thereunder. 

The salary was to be paid monthly. Sup 
pose there was no question whatever about per 
formance on the part of the plaintiff, or on the 
part of the defendant, except as to the pay 
ment of the salary. Would not the plaintiff 
have the right at the end of each and every 
month to demand his salary under the terms 



16 

of the agreement; and, if refused, would he not 
have the right to bring suit therefor, or would 
he have to wait until the end of the term, 
namely, ten years, before he could draw any 
salary, or enforce its payment? 

III. 

THE PLAINTIFF ON HIS PART FULLY AND FAITH 
FULLY KEPT AND PERFORMED ALL THE TERMS AND 
CONDITIONS OF THE CONTRACT. 

The defendant directed the election of the 
plaintiff as vice-president and director of the 
corporation, in order to enable him to manage 
and conduct the business referred to in the 
agreement. 

A by-law of the History Company, adopted 
immediately after its incorporation, to which 
the defendant assented in writing, fixed the sal 
ary of the vice-president at three hundred and 
fifty dollars per month. 

This was all under the direction of the de 
fendant, and was a means adopted by him to 
place the plaintiff in a position to manage and 
conduct the business referred to in the agree 
ment. 

This did not cancel the contract between the 
plaintiff and the defendant. 



17 

The corporation and its officers were the 
agents of Mr. Bancroft. Every act of the cor 
poration and its officers was directed by him. 

The salary which he agreed to pay he caused 
to be paid by the corporation up to the 1st day 
of July, 1892, and after that date he ordered 
the Treasurer of the corporation not to pay the 
salary, which orders were fully obeyed. 

It made no difference to the plaintiff who 
paid his salary, but after the date last men 
tioned the corporation, under the direction of 
the defendant, ceased to pay him his salary, 
and refused to accept his services, and plaintiff 
was then compelled to look to his contract with 
the defendant. 

The plaintiff faithfully performed the duties 
assigned him as long as he was permitted to do 
so. This was shown by the fact that $90,000 
in dividends were paid in 1888; $105,000 in 
1889; $85,000 in 1890, and sufficient in 1891 to 
make the total amount of dividends, together 
with two of $5000 each that were declared in 
1892,$290,000. 

Trans., pp. 22-3, fols. 60-2. 

After the plaintiff was deposed from the 
office of Vice-President and prevented from 



18 

conducting and managing the business, as he 
had theretofore, no dividends were ever made 
or declared. 

Trans., p. 80, fol. 234. 

The plaintiff did not quit the service of the 
defendant or of the History Company, and 
never refused to perform the services required 
by the contract; but, on the contrary, called at 
the office of the company regularly for months, 
prepared to discharge his duties. 

After May, 1892, the plaintiff, visited the 
office of the Company and attempted to dis 
charge his duties, and continued to do so up to 
the 31st of December, 1892. 

Trans., p. 34, fol. 94. 

In July, 1892, the plaintiff being at the 
office, went into the room of the defendant to 
speak to him, but was pushed out of the door 
by the Vice-President in the presence of the 
defendant. 

Trans., p. 31, fol. 86. 

The plaintiff, on the 31st day of December, 
1892, visited the office of the Company, for the 
purpose of performing his duties, but was pre- 



19 

vented from doing so. He made application 
repeatedly to both Dorland and Morrison, Sec 
retary and Vice-President respectively, for in 
structions as to what he should or should 
not do. 

He was informed by Morrison that he had 
no right there. Dorland informed him that he 
had been instructed to take away the letters 
from him. 

Trans., pp. 34-5, fols. 94-7. 

It was impossible for the plaintiff to do any 
work for the reason stated by him. 

Trans., p. 35, fol. 99. 

Where the plaintiff says: 

" I ceased to go there for the reason that my 
" desk was taken up stairs, and kept there for 
" several days, and then brought down again, 
" and put in the center of the aisle, where 
" I could only stand up by it, and it was put 
" where I couldn't get any light, or put a chair 
" to sit upon by it, and in a draft from the 
" door. I could not do any work there where 
" the desk was put, because there was no chair 
" there, and I could not work because I had 
'' nothing to work with. I couldn't see, and it 



20 

" was in the draft from the door. There was 
" not sufficient light, either artificial or natural, 
" to permit a person to write or to see their 
" writing. When I found that condition of 
" things, I quit going there, but before, doing 
" so, about that time, I went up and served 
'' notice upon Mr. Borland, a verbal notice.'' 

Trans., p. 36, fols. 100-2. 

" I demanded of him that he permit me to 
go to work, to make a place for me to go to 
'' work under my contract, the contract with 
" defendant. That I was there for that pur- 
" pose, and I wished him to distinctly under- 
" stand that I was ready and willing at all 
'' times to perform my duties under the con- 
<l tract, and had always been ready and willing 
" to go to work. I have not engaged in any 
" other business since that time, until recently 
'' the middle or latter part of 1893. It was 
" such business that i was always ready, and 
11 am now, to perform the contract. 1 have 
" abandoned the business I engaged in. I have 
" not bean able to realize a dollar from it. I 
' gave this notice to Mr. Dorland in the latter 
'' part of December, and the latter part of Jan- 
" uary. I repeatedly told him that 1 was ready 



21 

'' to do the work, but I took a witness on this 
" occasion with me, a Mr. Drew, who took the 
'' conversation down in shorthand/' 

" Borland said (Trans., p. 37, fol. 103), he 
" had been instructed by defendant not to let 
" me have the correspondence and not to per- 
" mit me to do any work there. He was Sec- 
" retary and Treasurer of the History Com- 
" pany, and owned ten shares of the stock. He 
" was under the direction of the defendant." 

The testimony of the plaintiff shows (Trans., 
p. 33, fol. 92), that he faithfully performed his 
duties up to May, 1892, and his efforts and at 
tempts to perform such duties ever since. 

This fact is also shown by the letters of Mr. 
Bancroft. 

Trans., p. 182, fols. 539-40; p. 183, fol. 
542; p. 185, fol. 549; p. 186, fol. 550; 
p. 188, fols. 556-8; pp. 191-3, fols. 
556-72. 

IV. 

PLAINTIFF DID NOT VIOLATE THE CONTRACT BY 
'ENGAGING IN OTHER BUSINESS. 

The evidence shows that the plaintiff did not, 
on the 1st day of July, 1892, or at any time, 



22 

engage in carrying on and conducting for him 
self and others, in opposition to the History 
Company, a business of the same kind and 
character as that carried on by the History 
Company. 

It does not appear that the literary work of 
the Femina Company was in the same field as 
that of the History Company, or that it con 
flicted in any way with its business. 

The testimony of the plaintiff is that he 
never realized a dollar from it. 

Trans., p. 36, fol. 101. 

The plaintiff also testified: (Trans., p. 59, 
fol. 171): " Any day in the world when the 
" History Company called upon me to come, 1 
" was ready to go; yes, I said I hoped to be 
'' free, and 1 hope so still." 

The plaintiff testified in relation to the bus 
iness with Dr. Miller: 

" I was simply engaged in negotiating about 
" the business, and was about to enter under a 
" contract, and during the negotiations I had 
4< purchased some things and become liable for 
u them under the expectation of making a 
" contract with him. I never did complete 
" any contract with him, and at a certain stage 



' of the negotiations, I concluded not to enter 
" into the business or any engagement, and 

' having reached this conclusion I signed some 

' papers, the drawing of which I entrusted to 
" my attorney and the attorneys for Miller, and 
" the papers that are introduced here are what 

* I was requested to sign by iny attorney and 
" others, and that is the reason I signed it, 
" trusting in their judgment to protect me 
" from all liability in my negotiations." 

Trans., p. 71, fols. 206-7. 

The bringing of the suits by the plaintiff 
against the History Company, referred to 
(Trans., p. 72, fols. 210-12), is not material upon 
the question of the liability of the defendant, 
for neither the opinion of the plaintiff or that 
of the defendant, as to the effect of the agree 
ment, is of any consequence whatever, where 
the written agreement is clear and explicit 
upon the point. 

The plaintiff testified (Trans., p. 58, fols. 167- 
8): "While I was at work on this book of 
" ' Femina,' I considered the contract set out 
" in the complaint in this action as binding 
" upon me I considered that the History 
" Company was entitled to call on me at any 



24 

" time. I have always been ready, and am 
" ready to-day, to render services, and consider 
" that the History Company was entitled to 
" call upon me any day to perform services as 
" manager for it, and it was so understood by 
41 Dr. Miller, that I would make no arrange- 
" ment with him that was not subject to the 
'' call of the History Company. I considered 
" that all the time 1 was with him this contract 
" was remaining in full force and effect for its 
'' full term, and that the History Company was 
" entitled to call upon me at any time." 

There was no violation of the contract on 
the part of the plaintiff by reason of his rela 
tions or business with Dr. Miller. It was all 
subsubject to the contract in question. 

So long as the defendant or the History 
Company did not require the services of the 
plaintiff, or declined to receive them, he could 
not force either to accept them, but the defend 
ant could not, by causing the History Company 
to decline the services of the plaintiff, relieve 
himself from the obligation to pay the salary 
as it fell due, so long as the plaintiff was ready 
and willing to perform. 



25 
V. 

THE DEFENDANT DID NOT PERFORM HIS PART OF 
THE CONTRACT BUT WILLFULLY PREVENTED THE 
PLAINTIFF FROM ACTUALLY RENDERING THE SER 
VICES DESCRIBED IN THE AGREEMENT. 

The property conveyed by Mr. Bancroft to 
Mr. Stone, and the shares of stock to be de 
livered, were upon condition that if the said 
Stone should fail in any wise to carry out the 
agreement or any part thereof, in its full letter 
and spirit, then the property so conveyed was 
to be forfeited arid to revert to the said defen 
dant. 

The evidence shows that after the dividend 
of $90,000 had been paid in 1888, the defend 
ant, having full control of the corporation and 
the management of its officers, began to inter 
fere with the plaintiff and prevent him from 
discharging his duties as prescribed by the 
agreement. 

Trans., p. 23, fols. 63-5. 

The acts of the defendant, his treatment of 
the plaintiff, his efforts to prevent him from 
discharging his duties, and his directions to 
the officers of the corporation and knowledge 



26 

of their conduct towards the plaintiff, appear in 
the Trans., pp. 23-38, inclusive. 

On the 15th of May, 1892, the defendant 
commenced a suit under the forfeiture clause 
contained in the agreement to recover the 
stock conveyed by the defendant to the plain 
tiff mentioned in the agreement, and the divi 
dends which the plaintiff had received thereon, 
and charged the plaintiff with a violation of 
the agreement. 

Finding the suit unavailing, he dismissed 
the same and nothing more has been heard 
of it, 

Trans., p. 30. 

Almost every means within the power of the 
defendant, and he was seemingly all-powerful, 
were used to prevent the plaintiff from per 
forming his part, of the agreement and com 
pelling him to quit the service, in order that 
the defendant could -enforce the forfeiture 
clause of the agreement against him. 
. The deiendant was responsible for the acts 
of the corporation and its officers, because they 
were but the agents of the defendant for the 
purpose of carrying on his own business. 

The officers and servants of the corporation, 
with the knowledge and consent of the defend- 



27 

ant, and b}^ his direction, were impertinent and 
insulting, and tried in every way to prevent 
the plaintiff from performing his duties. 

The defendant actually participated in some 
of these acts, and it is plain that many of the 
acts of the corporation servants and agents 
were with his consent, and under his actual 
direction. 

The plaintiff informed the defendant of the 
treatment which he received at the hands of 
the corporate officers, and their interference 
with him in the performance of his duties. 

The testimony of every witness called on the 
part of the plaintiff shows the indignities 
which were heaped upon the plaintiff, and that 
it was impossible for him to manage and con 
duct the business under the circumstances. 

The evidence shows that the plaintiff was, by 
the direction of the defendant, deposed from 
his position as Vice-President and manager of 
the business, and that others were put in his 
place. 

Trans., pp. 70-1, fols. 202-5. 

It is evident that the defendant did not in 
tend to make any order, either dismissing the 
plaintiff from his service, or the service of the 
History Company. 



28 

His plan was to force the plaintiff to quit or 
commit a breach of the contract, so that the 
defendant could take advantage of the forfeit 
ure clause of the agreement, and this purpose 
is also shown by the suit above referred to. 

He never did dismiss or discharge the plain 
tiff. 

Trans., p. 81, fol. 230. 

See the testimony of the defendant (Trans., 
p. 172, fols. 508-9), where he says: 

" I never discharged or dismissed the plain- 
" tiff from the service of the History Company. 
" That question never came up." 

The plaintiff was present at a meeting of the 
Board of Directors in November, 1892, when 
an assessment was levied. 

Morrison, in the presence of the defendant, 
arose to put the plaintiff out of the room. He 
opened the door, stood by the plaintiff, and at 
tempted to put his hand on him. Plaintiff said 
he had as good a right to be there as Mr. Mor 
rison, whereupon the question was referred to 
the defendant, who said that he (Morrison) 
could throw plaintiff out of the window as far 
as he, defendant, was concerned. 

Trans., p. 33, fols. 90-1. 



29 

The order levying the assessment having 
been passed, the defendant, with others, started 
to leave the room, but defendant came back 
and said to the Secretary of the History Com 
pany, namely, Mr. Borland, "Uon't you pay 
" any attention to that thing sitting over there 
" in the corner," and went out of the room. 

Trans., p. 33, fol. 92. 

The treatment which the plaintiff received 
at the hands of the defendant and officers of 
the corporation was hardly such as would be 
expected by a man who was to conduct the 
business of the concern. 

Not only were his offers to perform refused, 
but positive orders were given not to permit 
him to do any work there. 

From the evidence in the case, can there be 
any doubt or question as to the purpose and 
intent of defendant to prevent the plaintiff 
from performing his part of the agreement, 
and to take advantage of the forfeiture clause 
and avoid the payment of the salary? 



30 

VI. 

PERFORMANCE. 

An offer in good faith to perform on the 
part of the plaintiff is equivalent to per 
formance, where the services were declined or 

refused, or performance prevented hy the de- 



fend ant. 

The defendant and the History Company 
had a perfect right at any time to decline the 
services of the plaintiff. That would not re 
lease the -defendant from his obligation to pay 
the salary for the term agreed upon. He would 
have the right, however, to call upon the plaintiff 
at any time to resume the performance of his 
duties. The plaintiff did not quit, hut simply 
obeyed the order of the defendant and the His 
tory Company, but at the same time both were 
informed that he was always ready and will 
ing to perform any services that might be re 
quired of him. 

Simply declining for a time to accept the 
service would not be a breach of the contract 
or give the plaintiff a cause of action. The 
plaintiff was never notified by the defendant 
that he was relieved from his obligations under 
the contract and that his services would not be 



31 

required in the future, and hence was bound to 
hold himself in readiness to perform them un 
der penalty of the forfeiture of his stock and 
perhaps the dividends which had been paid 
thereon. 

Mr. Bancroft testifies that he never did dis 
charge the plaintiff. 

Trans., p. 172, fols. 508-9. 

The plaintiff testifies that he never quit, but 
was always ready and willing to perform. The 
mere fact that his services were declined for a 
time did not terminate the relation of the de 
fendant as employer, or release him from his 
obligation to the plaintiff. 

The ease of Webster vs. Wade, 19 Cal., 292, we 
think is decisive of this case. 

If the defendant did discharge, or if his con- 
duet and treatment could be regarded as a dis 
charge of, the plaintiff, before the termination 
of the term of service mentioned in the con 
tract, he would still be liable for the salary 
agreed upon. 

Webster vs. Wade, supra. 

The questions of fact namely, whether the 
plaintiff performed, or whether he was pre- 



32 

vented from performing by the defendant 
were passed upon by tbe jury, and we contend 
that the evidence was ample to support the 
verdict upon those questions. 

If there was a substantial conflict in the evi 
dence upon these points, the rule is well set 
tled that the verdict of tbe jury and the order 
of the Court denying the motion for a new 
trial are conclusive. 

VII. 

SUCCESSIVE ACTIONS ON THE SAME CONTRACT. 

Successive actions may be maintained upon 
the same contract or transaction whenever, 
after the former action, another cause of action 
arises therefrom. 

C. C. P., Sec. 1047. 

When several claims payable at different 
times arise out of the same contract or trans 
action, separate actions can be brought as each 
liability accrues. 

Am. & Eng. Ency. of PI. & Prac., Vol. I, 
pp. 154-5, notes 1 and 3. 

In this case the plaintiff had the right to 



33 

maintain an action for eacli month's salary 
after it became due, and to join several of 
such causes in one action. Otherwise, he 
would be compelled to wait for his salary until 
the end of the term ten years. 

THE ORDER DENYING DEFENDANT'S MOTION 
FOR A NEW TRIAL SHOULD BE AFFIRMED. 

DEFENDANT'S EXCEPTIONS. 

Exceptions Jos. 1 and 2 (Trans., pp. 19 and 20). 
This testimony, if error, was harmless. It 
was not erroneous, but simply explained the 
relations of the parties prior to the execution 
of the agreement. The work done by Mr, 
Stone before that time is expressly referred to 
therein, and this testimony simply gave some 
of the details. It gives the record of the 
History Company, the duties assigned to the 
plaintiff under the contract, in what capacity 
he acted, and when he was superseded. 

Exception No. 3 (Trans., p. 22, fol. 60). 

The evidence sought by the question tended 
to prove performance on the part of the plain 
tiff, and shows the motive on the part of Mr. 
Bancroft to prevent such performance and to 



34 

take advantage of the forfeiture clause of the 
agreement. 

The special ground of objection made by 
counsel was that it would make no difference 
whether the corporation paid dividends or 
whether the business was a profitable or a los 
ing one. 

If the theory of counsel is correct, that the 
plaintiff was to be paid out of the profits or 
earnings of the corporation, the testimony is 
favorable to the appellant, and therefore could 
do him no harm. 

Exception No. 4 (Trans., p. 23, fol. 63). 

This exception is not well taken. The testi 
mony was direct upon the question of perform 
ance by the plaintiff, and prevention of per 
formance by the defendant. 

Exception No. 5 (Trans., p. 24, fol. 65). 

The question related to the conduct of the 
defendant in preventing the plaintiff from per 
forming his contract. 

The plaintiff had the right to perform his 
duties in the ordinary way, and any act of the 
defendant tending to obstruct him was relevant 
to the question of performance. 



35 

Exceptions Nos. 6 and 7 (Trans., pp. 26-7, fols. 
71-3). 

The question related to the application of 
the plaintiff to Mr. Borland, the secretary and 
treasurer for the payment of his salary. The 
objection was upon the ground that the reply 
of Mr. Dorland was not binding upon the cor 
poration. 

The corporation was a mere agency for the 
transaction of the defendant's business. He 
was the president and had full control. Its 
officers were under his direction. The treas 
urer was his agent and obeyed his orders. It 
appears that when directed to pay the salary 
of the plaintiff he did so, and when directed 
not to pay it, he obeyed that order. 

All the evidence shows that he was acting 
under the orders of the defendant, and was his 
agent. 

The matter of paying or refusing to pay was 
within the scope of his duties as treasurer of 
the corporation and as agent of the defendant, 
and his statements concerning payment or re 
fusal to pay, made at the time, are binding 
upon his principal. 

Greenleaf on Evidence, 14th Ed., Vol. I, 
Sec. 113. 



36 

Green vs. Ophir C. S. & G. M. Co., 45 

Gal., 522. 
Tait vs. Hall, 71 Gal., 150. 

If error, it was harmless. It is admitted 
that both the corporation and the defendant 
refused to pay. 

The defendant moved to strike out the fol 
lowing answer as being a conclusion of the wit 
ness, and on the further ground that the de 
fendant was not bound by it unless he gave 
the direction. 

Trans., pp. 26-7, fols. 72-3. 

(A.) The boy in the office was forbidden to 

keep any letters for me. 

This, in our opinion, is not a conclusion of 
the witness, but a plain statement of fact. 

The ruling of the Court upon the question 
was proper. 

C. C. P., Sec. 1834. 

The evidence subsequently admitted in the 
case proved conclusively that the defendant 
directed the action of all the servants and 
agents of the corporation. The evidence is 
direct and overwhelming that the defendant 



37 

did prevent the plaintiff from performing his 
duties, and therefore this particular part could 
do the defendant no harm. 

Exception No. 8 (Trans., p. 29, fol. 80). 

The evidence was direct, and the conduct of 
the defendant towards the plaintiff in the mat 
ter of performance was relevant. If error, it 
was harmless, for it was on a point upon which 
the evidence is overwhelming. 

Exception No. 9 (Trans., p. 31, fol. 85). 

This exception is on the same footing with 
Exception No. 8. 

Exceptions Nos. 10, 11, and 12 (Trans., p. 31, 
fol. 87). 

The questions were relevant to the motive of 
the defendant to drive the plaintiff out of the 
corporation, to acquire his stock, to force him 
to quit the service of the defendant and the 
corporation and prevent him from performing 
his contract. 

Exception No. 13 (Trans, p. 34, fol. 96). 

Mr. Morrison was the Vice-President and Dor- 
land was the Treasurer of the corporation, and 
the acts and statements of the Vice-President 



38 

and Treasurer were binding upon the corpora 
tion within the scope of their duties. 

Greenleaf on Evidence. 14th Ed., Vol. I, 

Sec. 113. 
Green vs. Ophir C. S. & G. M. Co., 45 Gal., 

522 
Tail vs. Hall, 71 Gal., 150. 

Both of these officers were the agents of Mr. 
Bancroft. Mr. Bancroft directed them, as shown 
by all the evidence in the case. It is harmless, 
because it is admitted throughout that the cor 
poration and the defendant declined and re 
fused to accept the services of the plaintiff. 

The ruling of the Court was proper under 
Section 1034 of the Gode of Civil Procedure. 

Exception No. 14 (Trans., p. 37, fol. 103). 

This exception stands upon the same ground 
as Exception No. 13. 

Exception No. 15 (Trans., p. 37, fols. 104-5). 

The question was proper. It tended to show 
the relation between Borland and the defend 
ant and the statements of Borland were bind 
ing upon the defendant. 

See authorities last above cited. 



39 



Exception No. 16 (Trans., p. 39, fol. 111). 
This exception was not well taken. The ob 
jection was that the testimony was irrelevant 
and immaterial. It was an admission of Mr. 
Bancroft, and related to the ability of the 
plaintiff and his faithful performance of the 
contract. 

Exceptions Nos. 17, 18, 19, 20, 21 (Trans., pp. 

72-85, fols. 209-251). 

As these exceptions have not been referred to 
in the appellant's Brief, we take it that they 
have been abandoned. 

Exception No. 22 (Trans., p. 86, fol. 252). 

This was competent on the question of the 
performance of the contract by the plaintiff. 

Exception No. 23 (Trans., p. 106, fol. 311). 

The question was material and relevant as 
bearing upon the question of whether or not 
the defendant prevented the plaintiff from 
performing his contract. 

Exception No. 24 (Trans., p. 110, fol. 323). 

This question was relevant and material. 
The conversations related to getting rid of Mr. 
Stone and putting him out of the business. 



40 

Exception No. 25 (Trans., p. 113, fols. 332-8). 

The question was relevant and material as 
showing the purpose and conduct of Mr. Ban 
croft with reference to performance by Mr. 
Stone. 

The same may be said of Exceptions Nos. 
26, 27, 28, 29, 30, 31, and 32 (Trans., pp. 114- 
120, fols. 336-352). 

Exception No. 33 (Trans., p. 159, fol. 471). 

The evidence was relevant and material to 
contradict the witness and to show his rela 
tions with the defendant. 

Exception No. 34 (Trans., p. 203, fol. 602). 

This exception seems to bo abandoned by 
appellant, as no reference is made to it in his 
Brief. 

Exception No. 35 (Trans., p. 207, fol. 615). 

This evidence was relevant and material to 
contradict defendant and to show his feeling 

o 

against the plaintiff. 

It shows his desire to embarrass the plaintiff 
and his efforts to prevent him from performing 
his duties under the contract. 



41 

Exception No. 36 (Trans., p. 209, fols. 621-4). 

The plaintiff having called Dr. Miller, who 
testified that plaintiff had not- paid him a cer 
tain sura of money charged for personal ser 
vices to plaintiff's boy, it was competent, rele 
vant, and material for plaintiff to contradict 
that testimony. 

Exceptions Nos. 37 and 38 (Trans., p. 215, fol. 
637; p 226, fol. 67-). 

These exceptions seem to be abandoned, as 
counsel make no reference to them in their 
Brief. 

Exception No. 39 (Trans., p. 227, fol. 673). 

That part of the charge excepted to, we con 
tend, correctly states the law. 

Webster vs. Wade, 19 Cal., 292. 

Exception No. 4Q (Trans., p. 227, fol. 674). 

That part of the charge excepted to correctly 
states the law. It was most favorable to the 
defendant, and he was not injured thereby. 

The instruction is supported by DeCamp vs. 
Hewitt, 43 Am. Rep., 211. 



42 

Exception No. 41 (Trans., p. 228, fol. 676). 

The exception is not well taken. The in 
struction states the law. 

Webster vs. Wade, supra. 

Exception No. 42 (Trans., p. 229, fol , 680). 

This instruction is also supported by the case 
of Webster vs. Wade, supra. 

Exceptions Nos. 48, 44. and 45 (Trans, pp 229- 

230, fols. 681-684) 

Are abandoned, as no reference is made to 
them in counsel's Brief. 

Exceptions Nos. 46, 47, and 48 (Trans., pp. 230- 

231, fols. 684-685). 

These exceptions are not well taken. The 
rule of law is correctly stated in the charge. It 
could not injure the defendant. 

Exception No. 48 A. 

We find no exception numbered in this way 
in the Transcript, but identifying it by the 
folio (Trans., fol. 687), we contend that the in 
struction was properly refused. The question 
of whether the agreement was fully performed 
bv the defendant was one of fact. 



43 

Exception No. 49 (Trans., p. 232, fol. 688). 

This instruction was properly refused by the 
Court for the reasons stated. Neither the 
agreement nor evidence warranted such an in 
struction. 

Exception No. 50 (Trans., p. 232, fol. 690). 

This request was properly refused. It does 
not state the law. 

Webster vs. Wade, supra. 
The instruction as modified was correct. 

Exception No. 51 (Trans., p. 233, fol. 692.) 

The request was properly refused and the in 
struction as given by the Court states the law 
most favorably for the defendant, and he could 
not have been injured thereby. 

Exception No. 52 (Trans., p. 234, fols. 694-5). 

The request did not state the law. As mod 
ified, the instruction was correct. 

Webster vs. Wade, supra. 

Exception No. 53 (Trans., p. 234, fol. 696). 
The request does not state the law. 
Webster vs. Wade, supra. 



44 

Exception No. 55 is not referred to in the Brief 
of appellant, and therefore we presume it is 
abandoned. 

Exception No. 56 evidently was not the excep 
tion referred to in appellant's Brief (page 46), 
but from the folio we presume that Exception 
No. 55 was intended. (Trans , pp 235-6, fols. 
699-701). 

The request does not state the law, but the 
instruction as modified by the Court, stated 
the law most favorably for the defendant, and 
he was not injured thereby. 

Counsel for appellant have made no refer 
ence to the assignment of error contained in 
the Transcript as to the insufficiency of evi 
dence to justify the verdict, and we therefore 
presume that it has been abandoned. 

THE APPELLANT (BRIEF, PAGE 49) AS 
SIGNS AS ERROR THAT "THE VERDICT 
" WAS AGAINST LAW." 

"All the testimony showed, and the plaintiff 
" himself admitted and testified, that the ser- 
" vices claimed to have been performed by him 
" were performed for the History Company, 
" and not for the defendant." 

We think counsel is mistaken in saying that 



45 

all the testimony showed that the services were 
performed for the History Company, and not 
for the defendant. 

The testimony of the plaintiff was as follows 
(Trans., p. 36, fols. 109-101): 

" I demanded of him (Borland) that he per- 
' mit me to go to work, to make a place for 
" me to go to work under my contract the 
" contract with defendant. That I was there 
' for that purpose, and I wished him to dis- 
' tinctly understand that I was ready and will- 
' ing at all times to perform my duties under 
' the contract, and always had been ready and 
" willing to work." 

See also Trans., page 48, fol. 137, where he 
says: 

"I looked at it as I was to receive that 
" money under my contract. From the date 
;< of the formation of the History Company 
" down to 1892, the business was largely under 
" my control." 

See also page 51, fol. 146: 

" Q. Then did you regard yourself as under 
" the control of .defendant at that time? 

*'A. Defendant always directed the History 
" Company. 



46 

" Q. Were you working for defendant at 
" that time? 

"A. No; I presume I was working for the 
" History Company. 

"Q And at all times from the organization 
" of the History Company, in 1886 down to 
" 1892, you were working for the History Com- 
" pany? 

" A. (Trans., p. 52, fol. 148). I was work- 
" ing nominally for the History Company, but 
" I was working for defendant under the con- 
" tract." 

We apprehend that it is unnecessary to cite 
any further testimony of the plaintiff upon 
this point, as that evidence is sufficient to sus 
tain the verdict rendered. 

The judgment and order denying the motion 
of the defendant for a new trial should be af 
firmed. 

Respectfully submitted. 

REDDY, CAMPBELL & METSON, 

Attorneys for Respondent. 



STONE o. BANCROFT. 






lion and support of the hoisting tackl--. 
ic task of setting up or rigging tlu^e 
lives, and of safely maintaining then.. 
a part of the duty of plaintiff's t'ello'v 
>yes, the defendants were not liable o 
tiff for injuries which might have iv- 
1 to him from a negligent performance 
>at duty. These propositions arc n t 
questioned. But it is strenuous! 
I that the evidence adduced upon the 
trial pr'-sents a different state of I'.-ici: . 
stablishes that, the riggers of the ves- 
ere not fellow servants of the injured 
A most careful examination of the 
nony fails to support this claim. It 
1 be profitless to set forth at length the 
nations of the different witnesses, but 
allowing brief quotation from the testi- 

of plaintiff serves as a fair illustration 
: "The foreman of the stevedore firm 

a gang of men. and takes them on 
[ the ship. He directs four or five to go 
id rig the vessel. -the gear, and just 
;>n as the gearing is finished we all start 
:>rk. That is the usual practice." In 
of this evidence, and of the opinion up- 
le former appeal, where the questions 
laborately considered, the judgment is 
led. 



[-ONE v. BANCROFT. (S. P. 171.) 
erne Court of California. May 21, 189t;.i 

LA.CT PAKTNKKSHIP OK EMPLOYMENT AC 
TION FOK SALARY. 

.A contract between plaintiff, S., and de 
nt, B., recited that B. was conducting a 
ihing business under the name of the H. 
ibout to be incorporated, and that, in con- 
ttion of the valuable services rendered by 
connection therewith, B. sells and assigns 
a tenth interest in said company, on the 
ring conditions: S. is to devote all liis 
for not less than 10 years to the pub- 
>n and sale of the works which the II. 
lay take up. On the incorporation of the 
x, one-tenth of the shares shall be issued 
; but, if he fails to carry out his agree- 

said one-tenth interest shall be forfeited 

provided that, in case of the death of S. 
s> expiration of five years, he having ful- 

his agreement to that time, then one- 
if said one-tenth interest shall become the 
rty. unconditionally, of the heirs of S. 
salary of The said S. shall be :v>.~"iO per 
i. //(/</, that this was not a contract <il' 
ership, but of hiring. 

. Under such contract. B. is liable to S. 
is salary, though the H. Co. receives the 
it of his services. 

. One properly sues on his contract of 
yment for his salary, rather than for dam- 
for breach thereof, where he has not been 
irged. and has held himself in readiness, 
h he has rendered no services, because no 

has been offered him. 

tartment 1. Appeal from superior court, 
a Costa county; Joseph P. Jones. Judge, 
ion by N. J. Stone against H. H. Ban- 
Judgment for plaintiff. Defendant ap- 
Affirmed. 



E. J. McCutcheon, for appellant. Reddy, 
Campbell & Met son, for respondent. 

<;AR(H.'TTE, J. This action is brought to 
recover upon a written contract for 14 months' 
salary, at the rate of $350 per month, com 
mencing upon January 1, 1892. The verdict 
of the jury was in favor of plaintiff, and de 
fendant appeals from the judgment and order 
denying his motion for a new trial. 

A general demurrer was interposed to the 
complaint, and also a special demurrer to the 
point that the complaint was ambiguous, un 
certain, and unintelligible in various particu 
lars. The consideration of this demurrer leads 
us to an examination of the contract made 
by these parties, for that contract is set out 
in full in the complaint. The material parts 
thereof recite: ''This agreement, made in San 
Francisco. California, by H. H. Bancroft and 
N. J. Stone, witnesseth: That in considera 
tion of the valuable services done by the said 
Stone in conducting the publication and sale 
of the historical works of the said Bancroft, 
the business formerly being conducted as the 
Bancroft Works Department of A. L. Bancroft 
& Co.. but now being done, and shortly to 
be incorporated under the laws of California, 
as the History Company, the said Bancroft 
hereby sells and assigns to the said Stone a 
one-tenth interest in the said History Compa 
ny, plates, paper, stock, money, outstanding 
accounts, or other property of said company, 
upon the following conditions: The said X. 
J. Stone is to devote his whole time and best 
energies, so far as his health and strength 
shall permit, for a period of not less than 
ten years from the date of this agreement, 
to the publication and sale of the historical 
works of H. H. Bancroft, and of such other 
works, and conduct such other business, as 
may be from time to time taken up and enter 
ed into by said History Company. The 
said Stone agrees not to enter into or engage 
in, directly or indirectly, any other mercantile 
or manufacturing business, or any other busi 
ness or occupation which shall in any wise 
absorb his mind and strength, or interfere 
with his interest or efforts on behalf of the 
said History Company during the said term 
of ten years. Upon the incorporation of the 
History Company, one-tenth of the whole 
number of shares shall be issued and delivered 
to the said N. J. Stone; but should the said 
Stone fail in any wise to carry out this agree 
ment, or any part thereof, in its full letter 
and spirit, then the said one-tenth Interest in 
the said History Company shall be forfeited 
and revert to the said H. II. Bancroft; provid 
ed, and it is distinctly understood and agreed, 
that, in case of the death of the said X. J. 
Stone before the expiration of five years from 
the date of this agreement, the said Stone 
having fulfilled all the conditions of this agree 
ment up to that time, then one-half of the said 
one-tenth interest of the said Stone in the His 
tory Company shall go to his heirs, and be 



1070 



44 PACIFIC REPORTER. 



their property unconditionally. The salary of 
the said Stone shall be $350 a month." 

We think the only fair interpretation to be 
given this contract is that Bancroft was to 
pay Stone $350 per month for his services. 
There is but a single theory that can be ad 
vanced looking to a contrary construction, and 
that is to the effect that this contract between 
Bancroft and Stone constituted them partners 
(Stone possessing a one-tenth interest in the 
partnership), and that, consequently, the sal 
ary of said Stone was to be paid by the part 
nership. Upon a mere cursory examination 
of the contract, it is plainly evident that it 
does not, and was never intended to, create a 
partnership between these two parties. This 
is patent from the fact that it was contem 
plated in the writing itself that in the near 
future the "History Company" was to be in 
corporated. It is doubly apparent when we 
consider that the one-tenth interest in the 
property given by Bancroft to Stone failed to 
vest any absolute title in him, but was depend 
ent upon conditions, and liable to be forfeited 
and revert to Bancroft at any moment. That 
Stone had no such interest in this business as 
to constitute him a partner is further made 
plain when we look at the provision of the 
contract wherein it is expressly stipulated 
that, if Stone should die within five years 
from its date, then only one-half of the one- 
tenth interest should pass to his heirs. To 
hold these parties partners under the agree 
ment would make Stone's salary dependent 
upon the profits of the business. There is 
nothing contained therein to indicate any such 
intention, and it is certainly not so provided. 
We conclude that the contract should be con 
strued as a contract of hiring of Stone by 
Bancroft at an agreed price of $350 per month. 
There are no other matters of law raised by 
the demurrer of sufficient importance to de 
mand our attention. 

Within a few months after the aforesaid 
agreement was entered into, the History 
Company was incorporated, with a capital 
stock of 100 shares, 10 of which were issued 
to Stone, in pursuance of the agreement, and 
he was thereupon elected vice president of 
the corporation. Prior to the agreement with 
Stone, and the subsequent incorporation, 
Bancroft was the sole owner of the business, 
conducting it under the name of the History 
Company. For several years after incorpo 
ration, the business progressed amicably and 
prosperously, and then differences arose. No 
salary was forthcoming, and this litigation 
resulted. It is now insisted by appellant 
that, during the 14 months covered by this 
litigation, respondent is not entitled to any 
salary, for the reason that he performed no 
service. It must be borne in mind that this 
action is not one for damages based upon the 
breach of a contract of hiring, but is an ac 
tion based upon the contract itself, upon an 
express promise to pay. and in this regard 
the complaint was advisedly framed, for the 



evidence of both the plaintiff and defe: 
expressly shows that lie (Stone) was- 
discharged from his employment; an 
was hired for a term of 10 years at a 
ly salary, until he was discharged by 
ployer, or voluntarily gave up the * 
inent, we know of no legal reason v 
employer's promise to pay is not bindi 
enforceable in an action at law. T'I 
dence may well be said to be conflic: 
1o the amount of work done by plaint 
ing the term covered by the complai 
the action of the jury, followed by 
cision of the trial court, as to these n 
is binding upon us. And, even coi 
that during a great portion of thi 
plaintiff was not working at all, yet 
was ready and willing to work at aL 
if work had been offered, and no wor 
offered, and he had not been discharge 
the contract was in full force, and hi 
of action upon it cannot be gainsaid, 
no defense to an action upon the c< 
under such circumstances to say that 
tiff has not performed his duties there 
It was said in the early case of Web 
Wade, 19 Gal. 292: "In the present ca. 
steamer upon which Collins was em; 
as steward was laid up by the defenc -i 
pursuance of a contract made by 1 
that effect with other parties; but t: 
fendant did not notify Collins that he ^ 
no longer employ him, and Collins con 
at all times ready to perform the servi 
quired by the contract. The mere lay 
of the steamer did not, of course, ten 
the relation of the defendant as emplc 
release him- from his obligations to the 
ard [Collins]." It was further said a 
case that a discharge of the employe w 
cause did not defeat an action upon th 
tract. But it would seem that in later 
the true rule has been recognized to b 
an action in damages ror the breach 
proper remedy in such a case. Bancrof 
president of the corporation, and it i; 
dent that neither he nor the History C< 
ny wanted the plaintiff to assist in th< 
duct of the business. At the same 
plaintiff was not discharged, and there 5 
dence in the record to indicate that tt 
teution of Bancroft was not to discharge 
but rather to make his position as ac 
ploy so unpleasant and disagreeable 
cause him to withdraw from the contrac 
der which he began his labors. The i 
petty annoyances to which he was subj 
by defendant can only be accounted for 
such ground. The reason for this cour 
conduct may possibly be found in a c 
upon Bancroft's part to cause Stone's 
drawal from the x firm without legal e 
for such withdrawal would have result 
the forfeiture and reversion of Stone's 
to his benefit, as provided in the agreei 
There is evidence in the record pointii 
the direction indicated; but, whatever 



PEOPLE v. 11ANGOD. 



1071 



re been Bancroft's reason in not openly 

J directly discharging Stone, it is inuua- 

ial, for the fact' remains that he was never 

charged, and the further fact remains that 

never voluntarily withdrew from the ein- 

yinent, or relinquished his claims under 

i contract, and those are the salient fads 

h justify this action. The many cases 

by appellant holding that, if a servant 

rongfully discharged, his remedy is by 

iges upon the breach of the contract, 

no weight here, for there is no dis- 

rge in this case. 

point is made that, if plaintiff rendered 
ic, such service was rendered to the His- 
Compauy, and not to the defendant. 
Uancroft and the History Company 
to its incorporation were actually one, 
practically one after its incorporation, 
thus service rendered to the History 
)any was in effect service rendered to 
roft himself, still, in order to show the 
ness of appellant's contention in this re- 
, we are not even forced to that posi- 
It is in no way material to this case to 
mine who received the benefit of Stone's 
es. He was hired by Bancroft to per- 
labor in the publication of certain liter- 
,orks, and Bancroft was to pay his sal- 
Stone was to do this work under the 
u-t, and whether Bancroft or the His- 
inpany or some one else got the ben- 
f his labor is a matter immaterial, as 
earing upon Bancroft's liability. 
I. ere are many exceptions taken to the 
;s of the trial court in the admission 
ejection of evidence; but, upon an ex- 
ition of them, we find a majority not 
' taken, and others, even if meritorious 
'ie abstract, still are of minor impor- 
and not prejudicial. Neither can we 
liiat plaintiff violated his contract by en- 
iu other business during this time, 
matter was fairly submitted to the jury 
the evidence and the law, and a finding 
against appellant's contention. 
h complaint is made to the instruc- 
giveu to the jury as to the law of the 
We will not review many of them in 
but, as fairly illustrative of appel- 
position, we cite the following: "(1) 
i find from the evidence that the said 
i Stone performed the services required 
i by said contract, or that he was will- 
id ready at the time, and has contin- 
illing and ready, and in the manner 
I by said agreement, to perform said 
>s, but was prevented from doing so 
Defendant or under his directions, you 
find in favor of the plaintiff. (2) 
is testimony tending to show that the 
iff was not discharged from etnploy- 
i niler said agreement, either by the de- 
u or the History Company. Under 
tate of facts, the plaintiff was simply 
o hold himself in readiness to per- 
ich services as may have been re 



quired of him by the said defendant or the 
History Company. If you find from the evi 
dence that he was not required or allowed 
by either the said company or the said de 
fendant to perform any services, but held 
himself in readiness to execute the contract 
in accordance wMi its terms, such readiness 
to perform is equivalent to performance. t:.;> 
If you find from the evidence that the de 
fendant, either by himself or in conjunction 
with others, prevented the plaintiff from dis 
charging the duties required of him under 
the said contract, the defendant cannot com 
plain of the uonperforinance of acts or du 
ties which lie himself prevented; and the 
plaintiff in such case, and in so far as he 
was prevented from performing by the acts 
of the defendant, is entitled to the salary 
mentioned in the complaint, the same as if 
all the duties required by said contract had 
been performed." Our views already ex 
pressed are in full accord with this law de 
clared by the trial court. Bancroft testi 
fied that Stone was not discharged, and 
counsel for appellant in his brief concedes 
that he was not discharged. There being no 
question of Stone's discharge from employ 
ment in the case, the contractual relation still 
existed between them; and, Stone being 
ready and willing at all times to perform the 
services which he agreed to perform, he is in 
a position to rely upon the contract. The in 
structions quoted only cover this principle of 
law, and are entirely sound. 

There is no substantial merit in the other 
points made by appellant. The judgment 
and order are affirmed. 



J. 



We concur: HARRISON, J.; VAN FLEET, 



SUPREME COURT. 
IN BANC 

Rowe v Black, rehearing den June 19 
Hellman v Merz, same 
Stone v Bancroft, same 



1. An indictment for rape oYa iVuiaie under 
l^ears old need not allege force and want of 
conmut. 

Sti/Slhe positive statements of the prosecu- 
trix in a iKipe case, with the corroborative fact. 
that defendant was seen coming from her mom 
at f> o'clock in the morning;- is sufficient to sup 
port a verdict of guilty. 

.". The failure to caution the jury as to the 
danger of convicting defendant in a rape case 
on the sole testimony of prosecutrix is not re 
versible error, where defendant does not re 
quest it. 

4. Where the prosecutrix is materially cor 
roborated, it is not proper to caution the jury 
as to the danger of convicting defendant on the 
sole testimonyxifprosecutrix, and an intima 
tion that her testimony should be carefully 
scanned is all that is warranted. 

5. An instruction that ''any penetration," 
however slight, is sufficient in a rape case, is 
not objectionable beean.se of the omission of the 
word "sexual." where there are instructions de 
nning the offense, which, when read in con. 



Due service of the within is hereby admitted 
this day o/_ 189 



San Francisco. No. 171. 




H 



H 




STATE OF CALIFORNIA. 



N. J. STONE, 



Plaintiff and Respondent, 



VS. 



H. H. BA NCRO FT, 



Defendant and Appellant. 



PETITION FOR HEARING IN BANK 



EDWARD J. McCuxcHEN, 

Attorney for Petitioner. 
PAGE. McCuxcHEN & EELLS, 

Of Counsel. 



Filed this day of June,. A. D. 1896. 

T. H. WARD, Clerk, 



By 



Deputy. 



THE SUPREME COURT 



OF THE 



STATE OF CALIFORNIA 



N. J. STONE, 

Plaintiff and Respondent, 

vs. 
H. H. BANCROFT, 

Defendant and Appellant. 



PETITION FOR HEARING IN BANK. 

To the Honorable, the Supreme Court of the State 

of California: 

The appellant in the above-entitled cause re 
spectfully prays that the same may be heard and 
determined by the Court in bank The case was 
submitted in Department One, and the judgment 
rendered by that Department affirms the judgment 
below on grounds which it is respectfully submitted 
are entirely insufficient to support the decision, 
and which seem to be themselves based upon a 
misapprehension of the points made by appellant. 
Aside from the personal interests of the appellant 
which are at stake here, an important principle of 
the law of master and servant is involved, and it 
is submitted that this Court should not lay down 
a rule which on principle and authority is so 
highly questionable. 



Statement of the Case as Made by the 
Plaintiff. 

The facts of the ease as shown by the plaintiff's 
own testimony at the trial are as follows: 

Prior to May, 1886, defendant was engaged in 
the publication and sale of historical works and 
other literary publications and was carrying on 
business under the name of Bancroft's Works 
Department of A. L. Bancroft & Co., and was the 
owner of the plates, paper, stock, money, out 
standing accounts, and other property belonging 
to said business. For a long time prior to May, 
1886, the plaintiff had been employed to manage 
said business and during that month the parties 
made an agreement which on August 20, 1886, 
was reduced to writing. The agreement was in 
these words: 

" This agreement made in San Francisco, Cali- 
" fornia, by H. H. Bancroft and N. J. Stone, wit- 
*' liesseth: That in consideration of the valuable 
" services done by the said Stone in conducting 
" the publication and sale of the historical works 
" of the said Bancroft, the business formerly being 
" conducted as the Bancroft's Works Department 
" of A. L. Bancroft & Co., but now being done 
" and shortly to be incorporated under the laws 
" of California as the History Company, the said 
" Bancroft hereby sells and assigns to the said 
" Stone a one-tenth interest in the said History 



" Company, plates, paper, stock, money, outstand- 
" ing accounts, or other property of said company, 
" upon the following conditions: 

" The said N. S. Stone is to devote his whole 
" time and best energies, so far as his health and 
" strength shall permit, for a period of not less 
" than ten years from the date of this agreement, 
" to the publication and sale of the historical 
" works of H. H. Bancroft, and of such other 
" works, and conduct such other business as may 
" be from time to time taken up and entered into 
" by said History Company; and the said Stone 
" agrees not to enter into or engage in, directly 
" or indirectly, any other mercantile or manu- 
" facturing business, or to any other business or 
"occupation which shall in any wise absorb his 
" mind and strength, or interfere with his interest 
" or efforts on behalf of the said History Company 
" during the said term of ten years. 

" Upon the incorporation of the History Com- 
" pany one-tenth of the whole number of shares 
" shall be issued and delivered to the said N. J. 
" Stone; but should the said Stone fail in anywise 
" to carry out this agreement, or any part thereof, 
" in its full letter and spirit, then the said one- 
" tenth interest in the said History Company shall 
" be forfeited and revert to the said H. H. 
" Bancroft; provided, and it is distinctly under- 
" stood and agreed, that in case of the death of 



" the said N. J. Stone before the expiration of 
" five years from the date of this agreement, the 
" said Stone having fulfilled all the conditions of 
" this agreement up to that time, then one-half of 
" the said one-tenth interest of the said Stone in 
" the History Company shall go to his heirs, and 
" be their property, unconditionally; and in the 
" event of the death of the said Stone at any time 
" after the expiration of five years from the date 
" of this agreement, the terms hereof having been 
" fully complied with, then the whole of the said 
" one-tenth interest shall belong to his heirs un- 
" conditionally. 

" The salary of the said Stone shall be $350 a 
" month. The copyright of the said historical 
" works belongs exclusively to the said Bancroft, 
" and shall be fifty cents a volume for the History 
" and Diaz, and twenty cents on the little history 
" of Mexico. 

" Signed in San Francisco, the twentieth day 
" of August, 1886. 

" H. H. BANCROFT, 
" N. J. STONE." 

Between May, 1886 and the 23d day of Sep 
tember, 1886, plaintiff' and defendant carried on 
the business referred to in the agreement under the 
name History Company, the plaintiff owning one- 
tenth of mid business and the defendant the remain- 



ing nine-tenths. The salary of plaintiff was paid 
out of the moneys belonging to both the parties and 
charged as an expense of the business. (Trans., 
folio 140.) On the 23d day of September, 1886, 
the parties formed a corporation under the laws 
of California, called History Company, to which 
was transferred all of the property referred to in 
the agreement, and from its formation until the 
commencement of this action it carried on the 
business previously carried on by plaintiff and 
defendant. 

Immediately after the formation of the corpora 
tion, the plaintiff received certificates represent 
ing one-tenth of the capital stock thereof. From 
the date of the formation of the corporation until 
May, 1892, the plaintiff was a director and vice- 
president thereof; and from the date of the forma 
tion until July, 1892, he acted as the manager of 
its business. A by-law of the History Company 
adopted immediately after its incorporation and to 
which the plaintiff assented in writing, fixed the 
salary of the vice-president at three hundred and 
fifty dollars per month. At all the times after the 
formation of the corporation the salary of the plain 
tiff i.cas paid to him by the treasurer thereof, who 
was under his orders. The salary paid to the plain 
tiff was treated as one of the expenses of the busi 
ness and ivas always entered upon the boo/cs of the 
company as such an expense, and all of the profits 



6 

which were divided either in the shape of dividends, 
or in any other ivay, were the net profits after the 
deduction of all expenses, including the plaintiff's 
salary. (Trans., folio 197.) It is admitted by the 
plaintiff' that his salary was never charged to or 
paid by defendant individually. (Trans., folio 
139.) The arrangement- at the time it was made, 
as understood by the plaintiff', was that he was to 
have ten per cent, of the entire business and ten 
per cent, of the net profits after all expenses were 
paid, including his own salary. (Trans., folio 140.) 

Plaintiff received the salary of three hundred 
and fifty dollars a month from the History Com 
pany until the end of June, 1892. Before the 
commencement of this action he commenced two 
suits against the History Company, in each of 
which he sought to recover three hundred and 

c5 

fifty dollars, the first being for services rendered 
as its manager during the month of July, 1892, 
and the second for services rendered as its man 
ager during the month of August, 1892. He sub 
sequently brought this action to recover for services 
alleged to have been actually performed, between the 
1st day of July, 1892, and the date when the com 
plaint was filed, a period of fourteen months, end 
ing August 31, 1893. 

It is not claimed by the plaintiff that during all 
of the time for which he seeks to recover from the 



defendant for services rendered, he was actually 
engaged either in the service of the defendant or 
the service of the History Company. It is claimed 
that some time in the early part of 1892, the de 
fendant determined to prevent the plaintiff from 
performing his duties as manager of the business 
of the corporation, and that after June, 1892, he 
was not able, by reason of the interference of the 
defendant and those under him, to perform the 
duties of that position. 

He made a demand on Dorland, the treasurer of 
the corporation, for the salary which he claimed to 
be due subsequent to June, 1892, but never made 
any demand on defendant. (Trans., folio 152.) 
When he addressed Dorland concerning his 
services, he addressed him as secretary and treas 
urer of the corporation, and Dorland answered him 
in that capacity. (Trans., folio 170.) 

The plaintiff says he gave notice to Dorland in 
December, 1892, and January, tftftfr, that he was 

A 

ready to work. (Trans., folio 101.) He claims to 
have been at the office of the History Company 
nearly every day up to the time of the demand 
made upon Dorland, and after that time he en 
gaged in other business. (Trans., folio 169.) 
During the months of May, June and July, 1893, he 
admits he ivas giving his attention to the publication 
of a ivork called "Femina" in which he had ac 
quired an interest. (Trans., folio 161.) 



8 

In the publication of the work called "Femina" 
he was associated with one Miller, each of them be 
ing equally interested in the business. (Trans., folio 
162.) He says he considered that during the time 
he was engaged in business with Miller the His 
tory Company was entitled to call upon him to 
perform services as manager for it, and that it was 
understood between him and Miller that he would 
make no arrangement by which he would not be 
subject to the call of the History Company. He 
claims to have considered all the time he was with 
Miller that the contract set out in the complaint 
was in full force and effect, and that the History 
Company was entitled to call upon him at any time. 
(Trans., folio 168.) 

On the 21st day of October, 1893, the plaintiff 
and Miller signed and executed an instrument in 
writing, in which they declare that the partner 
ship existing between John A. Miller, party of the 
first part, a'nd -Nathan J. Stone, party of the sec 
ond part, under the firm name of the Femina 
Company, was that day dissolved by mutual con 
sent. The execution of this document was wit 
nessed by one of the counsel for the plaintiff. 

The Femina Company had an office, and the 
plaintiff's name appeared on the door a^ manager 
of its business. (Trans., folio 186.) That company 
was engaged in publishing a literary work and the 



9 

History Company was engaged in publishing 
literary works. (Trans., folio 187.) 

These were the facts as testified to by the plain 
tiff himself on the trial; and yet he brought this 
action against Bancroft individually on the written 
contract above set forth for the salary of $350 a 
month, from the 1st of July, 1892, to the 31st of 
August, 1893, alleging full performance; in the 
trial Court judgment was rendered against defend 
ant, and this judgment has been affirmed by the 
decision in Department of this Court. Should 
that decision stand? 

The defendant interposed a demurrer to the 
complaint on the ground, among others, that it 
did not state facts sufficient to constitute a cause 
of action, and thus raised the point that the contract 
was a contract of partnership, that Stone was em 
ployed by the partnership, and subsequently by the 
corporation, and that he therefore had no cause of 
action against Bancroft. 

The defendant moved for a new trial on the 
ground of the insufficiency of the evidence to 
justify the verdict of the jury; on the further 
ground that the verdict was against law; and 
thirdly, because of errors of law occurring at the 
trial; and thereby raised this question, among 
others, as to whether, under a contract of service, 
a servant who has been wrongfully prevented by his 



10 

employer from performing the services contemplated, 
can bring an action on the contract for his wages 
and truthfully allege full performance. 

On these points, particularly, appellant respect 
fully prays for a reconsideration by the Court of 
the decision rendered in Department. 

I. 

The Demurrer to the Complaint should 
have been Sustained. 

A demurrer was interposed by defendant to the 
complaint in which it was claimed: First, that it 
did not state facts sufficient to constitute a cause 
of action; and second, that it was ambiguous, un 
certain and unintelligible in that: (a) it did not 
appear whether the corporation referred to in the 
agreement was ever formed; (b) that it did not 
appear what services were performed by plaintiff, 
and (c) that it did not appear whether the ser 
vices, if any, performed by him were rendered to 
the defendant or to the History Company. 

Separate assignments were made as to ambi 
guity, uncertainty and unintelligibility. 

It is to be remembered that the action is not for 
the breach of the contract and that the complaint 
does not allege any damage, but, on the contrary, 
it alleges performance of the agreement, for which 
the plaintiff claims a stipulated compensation. 



11 

When the agreement was executed defendant 
was the owner of a business " then being done and 
shortly to be incorporated under the laws of Cali 
fornia," under the name of History Company, and 
was the owner of all the property belonging or 
appertaining thereto. By the instrument he " sold 
and assigned to plaintiff a one-tenth interest in the 
said History Company, plates, paper, stock, money, 
outstanding accounts, and other property of said 
company." (Trans., folio 5.) This is all defend 
ant did or agreed to do. There is nothing execu 
tory in the agreement, so far as he is concerned. 
The complaint alleges the execution of the instru 
ment by him, which is equivalent to an allegation 
that at that date he transferred and sold to plaintiff 
a one-tenth interest in the property mentioned, 
and from that time forward plaintiff became and 
was jointly interested with defendant in the busi 
ness, defendant owning nine-tenths and plaintiff 
one-tenth thereof. 

Plaintiff, upon his part, agreed to devote his 
whole time for ten years after the date of the 
agreement to the business of the History Company, 
and that during that time he would not engage in 
any manufacturing business, or any business that 
would interfere with his interests in or efforts on 
behalf of said History Company. 

The obligation imposed by the agreement upon 
plaintiff was to render service, not to the defend- 



12 

ant, but to the History Company, and when he 
alleges that he has performed the agreement on his 
part, he is to be understood as saying that he has 
rendered to the History Company the stipulated 
service. This service must have been rendered 
to the History Company, a corporation, or to a co 
partnership doing business under that name and 
composed of plaintiff and defendant. If the agree 
ment was so far executed as that plaintiff per 
formed all of its covenants on his part, the parties 
must have carried on the business as copartners, 
or a corporation must have been formed to which 
the property and business were transferred. If 
plaintiff performed any part of the agreement be 
fore a corporation was formed, then it necessarily 
follows that he and defendant were carrying on 
the business of the History Company and their 
relations were those of partners. When defend 
ant executed and delivered the assignment and 
transfer to plaintiff the latter became proprietor 
of an interest in a going business, of which prior 
to that time defendant was the sole owner. The 
agreement provided for a continuance of the busi 
ness, to which the plaintiff was to devote his en 
tire time for a period of ten years. No one will 
seriously contend that this was a contract of em 
ployment wherein defendant was the employer 
and plaintiff the employee. Defendant did not 
take plaintiff into his employment, but took him 



13 

into the business, into the History Company, and 
whereas he had up to that time been only an em 
ployee of the defendant, he was thenceforth in 
terested with him in the business; in other words, 
was his partner. 

Defendant did not undertake to pay the plain 
tiff the salary stipulated in the agreement, but both 
plaintiff and defendant agreed that plaintiff's sal 
ary should be three hundred and fifty dollars per 
month, which salary was, of course, to be paid by 
the History Company. It will hardly be ques 
tioned that from the date of the agreement the 
parties were to share in the profits and losses of 
the business in proportion to their respective in 
terests. 

Section 2395 of the Civil Code defines partner 
ship thus: " Partnership is the association of two 
" or more persons for the purpose of carrying on 
" business together and dividing the profits be- 
" tween them." The agreement in this case ex 
pressly stipulated that the parties were to carry on 
business together, and no one will say they were 
not to divide the profits. In other words, the 
agreement brings them clearly within the provis 
ions of this section of the Civil Code. 

It may be suggested that the agreement does 
not contain any express provision that the parties 
are to divide the profits of the business. In Bloom- 
field vs. Buchanan, 13 Or., 108, it was held that it 



14 

was not absolutely necessary in order to create a 
partnership that the word " partnership " should 
be used, "or any express mention made in regard 
" to profit or loss, * * * and it is not neces- 
" sary that there should be an express stipulation 
" between partners to share the profit and loss, as 
" that is an incident to the prosecution of their 
" joint business." 

In Richards vs. Grinnell, 63 Iowa, 44, Chief 
Justice Rothrock quotes with approval the follow 
ing from Parsons on Contracts: " Where parties 
" agree to enter into an association for the purpose 
*' of buying or selling and carrying on joint busi- 
" ness indefinitely, no stipulation for dividing 
" profit and loss is necessary, as that is an incident 
" to the prosecution of their joint business." 

It seems entirely unnecessary to multiply au 
thorities on this point. As has been suggested, 
the portion of the contract providing that " the 
*' salary of the said Stone shall be three hundred 
" and fifty dollars a month," did not impose upon 
the defendant an obligation to pay that sum or any 
sum, but simply meant that out of the business in 
which the parties were about to engage the plaintiff 
should receive the salary agreed upon by them. 
His salary was one of the expenses of the business 
to be deducted before the division of profits, and 
hence he was himself to contribute one-tenth of 
his compensation. 



15 

In its opinion the Department says on this 
point: 

" We think the only fair interpretation to be 
" given to this contract is that Bancroft was to 
" pay Stone $350 per month for his services. 
" There is but a single theory that can be ad- 
""vanced looking to a contrary construction, and 
" that is to the effect that this contract between 
" Bancroft and Stone constituted them partners 
" (Stone possessing a one-tenth interest in the 
" partnership), and that consequently, the salary 
" of said Stone was to be paid by the partnership. 
" Upon a mere cursory examination of the con- 
" tract, it is plainly evident that it does not, and 
" was never intended to, create a partnership be- 
" tween these two parties." 

The Court then assigns the grounds on which 
it bases its conclusion that no partnership was ever 
intended. It says, in the first place: "This is 
" patent from the fact that it was contemplated in 
u the writing itself that in the near future the 
" History Company was to be incorporated." It 
is difficult to see just what the Court means by 
this, unless it argues that because the relation be 
tween the parties was soon to be changed into 
something else, it could not, meanwhile, be a 
partnership; that the partnership could not have 
a beginning, because it was soon to have an end- 



16 

ing. And if that is the argument of the Court, it 
is more difficult still to appreciate its weight. 
Whatever inference is to be drawn from the pro 
vision in the contract as to the incorporation of 
the Company, would seem to lead to the directly 
opposite conclusion. There can be no question 
but what it was contemplated by the contract that 
when the corporation was formed Bancroft and 
Stone were to be on the same footing as stockhold 
ers in the corporation, differing only in the 
amount of stock held. This was to be a substitute 
for the arrangement, that preceded it, and 
what is more natural than to suppose that that 
arrangement ,was intended to be of an analogous 
character and that Bancroft and Stone were to be 
copartners until they should become fellow-stock 
holders. It would be a new idea that persons who 
associate themselves in business with the ultimate 
idea of incorporating are from this very fact to be 
regarded meanwhile as something other than 
partners; nor is it quite clear what the Court on 
this line of reasoning would hold them to be prior 
to the incorporation. It is, certainly, not one of 
the essential elements in a partnership that there 
should be an intention never to form a corporation. 

The Court continues, secondly: " It is doubly 
" apparent when we consider that the one-tenth 
" interest in the property given by Bancroft to 
" Stone failed to vest any absolute title in him, 



17 

" but was dependent upon conditions, and liable 
4< to be forfeited and revert to Bancroft at any 
moment." Again, we fail to see how the fact that 
by some contingency Stone might ultimately lose 
his interest in the property could affect the relation 
ship which inevitably existed as long as that inter 
est continued. This seems to be but another phase 
of the preceding argument that the partnership 
could not exist because it might at some future 
time be terminated. It is certainly possible to 
make the continued existence of a partnership 
dependent on certain conditions, to fix the time 
at which the relationship should terminate by the 
happening of a certain event, or possibly to im 
pose as a consequence of a breach of the partner 
ship agreement the forfeiture by the defaulting 
partner of his interest in the partnership prop 
erty; and yet there could be no question mean 
while as to the continued existence of the partner 
ship. In Campbell vs. 8herman, 8 N. Y. Suppl., 
630, 55 Hun (N. Y.), 609, an agreement not un 
like the agreement in question here, was under 
consideration. That agreement provided for a 
forfeiture by one of the parties to the agreement 
of all his interest in the concern in case he should 
fail to perform his part of the contract. The 
Court, nevertheless, in the face of the contention 
by the opposing side that the contract was merely 
one of employment, took the view that a partner- 



18 

ship had been created. It does not appear that in 
that case the provision for a forfeiture was even 
considered as throwing any doubt on the exist 
ence of the partnership. 

In Petrakion vs. Arbeely, 26 N. Y. Suppl., 731, 
23 Civil Proc. R., 183, an agreement was under 
consideration which provided that, on payment 
by one party of a certain sum, as a contribution 
to the partnership capital, one-fourth of a printing 
establishment should belong to him. The amount 
had not been paid, and the contention was that 
the payment was a condition precedent and no 
partnership had been created. The Court said, 
however: "The existence of conditions precedent 
" to a partnership agreement is not presumed, and, 
" in the absence of some restriction in the con- 
" tract, the relation is presumed to arise at the 
" time of the execution of the articles." So in 
the case at bar. Stone's performance of the stip 
ulation was at most a condition subsequent on which 
his continued interest in the partnership de 
pended. But meanwhile there was an absolute 
transfer to him of a one-tenth interest in the bus 
iness with the necessary consequence of a share 
in the profits and a responsibility for the liabili 
ties. 

In the case of Hills vs. Bailey, 27 Vt., 548, it 
appears that the interest of one of the partners in 



19 

the firm property was subject td complete defeas 
ance on his failure to make certain payments to 
his copartners, and that his copartners who had 
provided the capital while he provided the labor 
and skill, had apparently entered into a personal 
contract to pay him a certain sum of money annu 
ally as his salary. He sued them on this agree 
ment, but the Court held that the liability was a 
partnership liability. 

The Department continues to give a third reason 
why, in its opinion, the agreement is to be held not 
a partnership agreement, and says: "That Stone 
" had no such interest in this business as to con- 
" stitute him a partner, is further made plain when 
" we look at the provision of the contract wherein 
" it is expressly stipulated that, if Stone should 
" die within five years from its date, then only one- 
" half of the one-tenth interest should pass to his 
" heirs." This seems to be only a restatement in 
another form of the argument which precedes it, 
and stands or falls with that. If Stone's interest 
in the property of the company was to terminate 
on a failure on his part to give his services to the 
company for ten years, it would be natural to 
stipulate that in case death was the cause of his 
failure to perform, the forfeiture should still be to 
a certain extent enforced. This is added as a 
proviso, and is in fact merely an added term of the 
stipulation as to forfeiture, guaranteeing to Stone's 



20 

heirs at least one-half of the one-tenth interest, 
although Stone should be prevented by death from 
contributing his services to the company for the 
full period contemplated. 

The Court continues (but whether this is to be 
regarded as an additional reason for construing 
the agreement as something other than a partner 
ship agreement does not appear) : " To hold these 
" parties partners under the agreement, would 
" make Stone's salary depend upon the profits of 
" the business. There is nothing contained there- 
" in to indicate any such intention, and it is cer- 
" tainly not so provided." Is it meant by this that 
the agreement is not to be construed as a partner 
ship agreement, because that construction would 
leave Stone without any salary in case the business 
were unprofitable? By what rule of law is the 
salary of a member of a partnership made depend 
ent on the profits of the partnership business? 
Are not the partners ultimately liable individually 
for the legitimate debts incurred by the partner- 



ship, whether the partnership be a successful one 
or not? On the other hypothesis advanced by the 
Court, Stone's salary would depend on Bancroft's 
solvency, and on the hypothesis that there was a 
partnership, no creditor of the partnership, whether 
an employee or not, could suffer as long as Ban 
croft remained solvent. And even if the fact were 
that Stone's salary depended upon the profits of 



21 

the business, we submit it is not putting the case 
fairly to say there is nothing contained in the con 
tract to indicate any such intention. Even sup 
posing that that were a necessary consequence 
from the partnership agreement, must a contract 
of partnership enumerate all its consequences in 
order to create a partnership? The Court says 
there is nothing contained in the contract to indi 
cate any such intention; and we feel confident that 
the argument is answered fully by the assertion 
that there is nothing in the contract either to in 
dicate the opposite intention; and in the absence 
of an express provision imposing upon Bancroft 
the payment of the salary, the presumption is that 
it was to be paid by the firm. 

A case on all fours with the one at bar and de 
cisive of the question now under discussion is 
Weaver vs. Upton, 7 IredelPs Law (N. C.), 458. 
The opinion is short and we quote it in full: 

" Weaver and Upton, on the 16th of Decem- 
" ber, 1840, leased of one McKenzie a tract of 
" land for three years to mine for gold; the rent 
" was to be one-sixth part of the gold that should 
" be obtained by the lessees. On the 27th of 
" December, 1841, the lessees entered into the 
" agreement under their seals, mentioned in the 
" case. Upton was to work twenty hands, and 
" Weaver four hands, ' bearing a proportionable 



22 

" ' part of the expense attached thereto. The 
" ' said Upton, of the first part, bargains and agrees 
" ' to give me, the said Weaver of the second 
" * part, four hundred and fifty dollars to manage 
" ' the business, which I agree to manage accord- 
" ' ing to the best of my judgment.' It seems to 
4 ' us, that the agreement was one of partnership; 
" and the law being well settled, that the acting 
41 and business partner is never entitled to claim 
" pay of the firm for his services, unless he stipu- 
" lates for it in the articles of copartnership or 
" otherwise; the parties therefore agreed, that 
" Weaver should manage the business, and Upton, 
" the other partner, agreed to give him $450 'to 
" manage the business.' Weaver was to bear his 
" proportion of the expense of managing and 
" working the mine. The salary of the superin- 
" tendent was a part of the expense of the firm. 
" And the firm ought, according to the true construc- 
" tion of the article, to bear this expense in propor- 
" tion to the number of hands each partner worked 
" in the mine. The words * The said Upton bar- 
" gains and agrees to give me, the said Weaver, 
" $450 to manage the business,' only denoted 
" the assent of Upton that Weaver, although a 
" partner, should be paid for his services $450. 
" The parties were stipulating concerning the part- 
" nership business, and the terms on which it was to 
" be carried on; and among others that Upton bar- 



23 

" gained and agreed to let Weaver have $450 for 
" his services that year. It seems to us that it 
" would be against justice and right, to construe 
" the covenant to be an agreement by Upton, that 
" he would pay that sum out of his own pocket. 
" We think that it was an item in the expense 
" account of the firm and that the firm should pay 
" it." 

The Court says in opening that there is but a 
" single " theory that can be advanced looking to 
a construction of this agreement as anything but a 
contract of service. That is very true, and yet a 
single unassailable theory is better than a dozen 
questionable ones, and its force is rather strength 
ened than weakened by the fact that it is a single 
theory. The arguments on which the Court sup 
ports its conclusion, it is submitted, amount on 
analysis simply to the assertion that the arrange 
ment cannot be regarded as a partnership, because 
it was contemplated that at some time in the future 
it might terminate, either by the formation of a 
corporation or by the failure of Stone to perform 
certain conditions. On the other side there is the 
undeniable fact that the agreement conveyed to 
Stone a one-tenth interest in the property of the 
concern, with the inevitable consequence, as we 
have already said, of a share in the profits and in 
the liabilities. Besides this Stone agreed to take 
charge of the business for ten years, and was to 



24 

receive a salary of $350 a month. If this is not 
in letter and spirit a partnership agreement by 
which one partner contributes the bulk but not 
the whole of the capital, and the other contributes 
his services, it is difficult to see what kind of 
agreement could constitute a partnership, and the 
Court itself bears unconscious testimony to the 
naturalness of this view of the relationship be 
tween Bancroft and Stone when it speaks of 
" Stone's withdrawal from the firm," although it 
had been so strenuously insisting but a few pages 
before that there never had been a "firm " at all. 

II 

The Court should have Granted Defendant 
a New Trial. 

1. The evidence showed that there was a partner 
ship and that Stone was employed by the partnership, 
and not by Bancroft. The verdict was therefore 
against evidence and law. 

If any doubt arose, as a matter of law, as to the 
construction to be put upon the agreement by an 
inspection of it, that doubt would be solved by the 
plaintiff's own testimony at the trial. It is a 
familiar rule that in case of doubt the intention of 
parties to an agreement may be gathered from 
their subsequent conduct in the execution of the 
contract. Plaintiff himself testified that he never 
looked to the defendant individually for the pay- 



25 

merit of his salary, but that it was always charged 
as one of the expenses of the business, and that 
the profits of the business, of which he received 
one-tenth, were net profits after the deduction of 
all expenses, including his own salary. The sal 
ary was paid to him by the cashier, who was under 
his own control as well as the control of defendant. 
He testified further that his own understanding 
of the agreement in suit was that he was to have 
ten per cent, of the entire business and ten per 
cent, of the net profits after all the expenses were 
paid, including his own salary. (Trans., folios 
138-140.) Again and again it appeared in the 
evidence given by the plaintiff, not merely that 
there was a History Company entirely independ 
ent of Bancroft himself, but that the plaintiff re 
garded himself as working for that company. 
In fact, the instructions given to the jury by the 
Court at the request of plaintiff, proceed on the 
very assumption of the independent existence 
of the History Company. If this company did 
have an independent existence, what could it 
have been before incorporation, if it were 
not a partnership? We dwell so long on 
this fact of there being actually a partnership,, 
because the Department has expressly denied it in 
its opinion in the case, and has based its de 
cision on the non-existence of the partnership. 
It has not said, what indeed it could not say, that 



26 

granting the partnership, the employment of Stone 
nnd the undertaking to pay him was still Bancroft's 
personal agreement. The case of Weaver vs. Upton, 
hereinbefore referred to and cited in appellant's 
points and authorities, is conclusive on this latter, 
point. In that case an agreement was under dis 
cussion which did not provide eo nomine for a part 
nership but which was construed by the Court to 
be a partnership agreement. It was executed by 
Weaver and Upton and contained as one stipula 
tion the following: " The said Upton of the first 
" part, bargains and agrees to give me, the said 
" Weaver of the second part, four hundred arid 
" fifty dollars to manage the business, which I 
" agree to manage according to the best of my 
" judgment." The Court held that this was not 
Upton's individual employment of Weaver, but 
that the salary was an item in the expense account 
of the firm, and should be paid by the firm. It is 
submitted that the contract under consideration in 
that case was much stronger against Upton, than 
this contract is against Bancroft; for there was 
there apparently an express promise to pay made 
by Upton, whereas in the case at bar, there was, 
in an agreement executed by both, merely a gen 
eral stipulation that "the salary of the said Stone 
" shall be $350 a month." 

Toward the end of the opinion of the Court 
another reference is made to the contention of ap- 



pellant that the contract of service was made by the 
History Company, and not with Bancroft person 
ally. In the brief filed by appellant there is a 
full discussion of this question. The stumbling 
block of the Court has seemed to be, however, the 
question as to whether there had ever been any 
partnership at all, not as to whether, granting the 
partnership, the subsidiary agreement for the pay 
ment of Stone's services was a personal or a part 
nership undertaking. We have tried to show that 
the reasons adduced by the Court to show that no 
partnership ever existed have no real force; and 
once admitting the partnership, we think the Court 
cannot question for a moment that Stone's services 
were to be rendered to the partnership, and sub 
sequently to the corporation, and that the part 
nership and the corporation alone were liable for 
his salary. It seems to us, then, that the Court 
has failed to see the force of appellant's argument 
that the services were shown to have been ren 
dered to the company and not to Bancroft person 
ally. The question being whether Bancroft or the 
partnership had agreed to pay the salary, any evi 
dence showing that the services were rendered, 
not to Bancroft himself but to the company, 
seems to us in the highest degree material; and 
the force of such evidence is not to be destroyed 
by assuming as already disproved the very state 
of affairs, the existence of which it was introduced 



28 

to show. The question being as to the real inten 
tion of the parties to the agreement, evidence to 
show how the agreement was in fact carried out 
must be given its due weight. And if Stone's 
services were in fact rendered to the company, and 
not to Bancroft personally, certainly that fact not 
merely tends to show who it was that originally 
employed him, but also points in no uncertain 
fashion to the independent existence of the com 
pany apart from Bancroft himself, which was one of 
the facts in issue. The appellant certainly did not 
contend that, if it were once established that Ban 
croft had himself employed Stone to do work for 
the partnership, he was to be released from lia 
bility because the work was, as a matter of fact, 
done for the partnership; but he did contend that, 
if the services were actually rendered to the part 
nership and paid for by the partnership, then it 
was a fair inference that the partnership existed 
and that it was the partnership which had con 
tracted for the services. And we do not see that 
anything the Court says weakens the force of this 
contention. 

And the Court seems to disregard the undis 
puted facts of the case when it says: " While 
" Bancroft and the History Company prior to its 
" incorporation were actually one and practically 
" one after its incorporation, and thus service ren- 
" dered to the History Company was in effect 



29 

" service rendered to Bancroft himself, still, in 
" order to show the weakness of appellant's con- 
" tention in this respect, we are not even forced to 
" that position." We have tried to show that the 
Court is forced into that position, and a considera 
tion of what that position is, becomes of some im 
portance. Does the Court mean to say that 
although Bancroft owned but a nine-tenths interest 
in the property of the History Company before 
its incorporation, he and the History Company 
were still " actually " one? And that after the 
incorporation, though he held but nine-tenths in 
the beginning, and thereafter only eighty-five per 
cent of the capital stock, he and the corporation 
were "practically" one? And the conclusion that 
the Court draws from these statements is equally 
startling, namely: that "service rendered to the 
" History Company was in effect service rendered to 
" Bancroft himself," that is to say, because one 
m,an owns the majority of the capital stock of a 
corporation, all the incidents of its corporate exis 
tence disappear, the minority stockholders are 
wiped out of existence, and a servant employed by 
the corporation, working for the corporation, and 
paid by the corporation, is to be regarded in law 
and in fact as the servant of the one man who 
owns the majority of the stock. 

Stone received one-tenth of the capital stock 
immediately upon the formation of the corpora- 



30 

tion, and shortly thereafter obtained from de 
fendant an additional five per cent., from which 
time he owned fifteen per cent, and defendant 
owned eighty-five per cent. It is not suggested 
by the Court that Stone's rights differed from 
those of a stockholder in any other corporation, 
but to say that defendant and the company were 
practically one is to entirely ignore Stone as a 
stockholder. 

Or, if we take the other view that it was not 
because Bancroft and the corporation were prac 
tically one that he was liable for Stone's salary, 
but because he originally agreed to pay it, we are 
forced to a conclusion which seems to demonstrate 
conclusively the unsoundnessof the opinion. As has 
been suggested, Stone obtained from Bancroft five 
per cent, of the capital stock in addition to the 
one-tenth given him by the agreement. Supposing 
he had purchased the whole of Bancroft's stock, 
would the latter still have been liable personally 
for the salary? If the construction placed by the 
Department upon the contract be correct, the per 
sonal liability of Bancroft did not and does not 
depend upon the number of shares of the stock 
of the corporation which he owned. If defendant 
is personally liable for the salary, it must be by 
virtue of the agreement, so that if Stone were to 
buy all of the defendant's stock, although Stone 
and the company would then be " practically " 



31 

one, Bancroft would still, on the Court's theory, 
be liable for the salary. And we should have 
Bancroft, without any interest in the business what 
ever, under obligation to pay Stone $350 a month 
salary for managing his own business. This is the 
possible result of this agreement between Stone 
and Bancroft if the theory of the Court is to be 
adopted. Is it not more reasonable to say that a 
construction that would lead to such results cannot 
represent the intention of , the parties, and to hold 
that they themselves took the very natural view 
of the transaction which we have been urging on 
the Court, and which involves no such absurdities 
as this? 

2. The evidence showed that the defendant should 
have had a verdict, because the plaintiff did not prove 
perform-ance of the contract on his own part. 

Another contention of appellant is dismissed by 
the Department on grounds which, it is respectfully 
submitted, are as inadequate as those which form 
the basis of the opinion of the Court in regard to 
the nature of the original agreement. 

The position taken by appellant is that an em 
ployee under contract of service for a definite 
period and discharged before the expiration of the 
term, or prevented by the employer from performing 
the services, has his choice of but two remedies 
to sue in quantum meruit for the value of the ser- 



32 

vices actually performed, or to set up a breach of 
the contract by his employer, and sue for damages. 
Plaintiff in this action has admitted!} 7 done neither; 
he has regarded the contract as in full force, has 
alleged full performance of his part of the contract, 
and has demanded performance on the part of the 
alleged employer. (We shall assume for the sake 
of the present argument, on the theory of plaintiff, 
that Bancroft was the employer.) The undisputed 
evidence shows, however, that there had been no 
actual performance on the part of Stone, and he 
advances as an excuse for non-performance that 
he was prevented by his employer from perform 
ing. On this theory appellant in his argument 
made the contention above shown, and supported 
the contention by a line of unambiguous author 
ities. 

Stone says in his testimony that after July, 1892, 
that is to say, during the whole period covered by 
this action, he was not able by reason of the inter 
ference of the defendant and those under him, to 
perform the duties of his position. He does not 
say that there were no duties attached to that posi 
tion. He says his desk was moved from place to 
place, and that he was subjected to every indig 
nity that one man could inflict upon another; that 
his desk was placed in a draught, and he notified 
the secretary of the corporation that he could not 
remain unless its position was changed. He did 



33 

remain, however, for a long time after he had been 
so badly treated. (Trans., folio 204), and says 
that he was not discharged. (Trans., folio 236). 
He claims to have visited the office of the com 
pany every day during the month of July, 1892; 
occasionally, but not very often, during August 
and September, 1892; that he was there during 
October, but did not do much of anything; that 
he was there part of the time in November, and 
most of the time during December. He went 
there every day during January, 1893, and every 
day during February, 1893, until he served a 
notice upon Dorland, the secretary and treasurer 
of the History Company, and said he was ready to 
work. (Trans., folios 149 to 152.) He claims to 
have been at the office of the History Company 
nearly every day until he served the notice upon 
Dorland, and after that time he engaged in other 
business. During May, June and July, 1893, he 
admits that he was associated with another man in 
an independent business (Trans., folios 161-162); 
but he says that he considered during the whole 
time that he was in the employ of the History 
Company, and that the company was entitled to 
call upon him at any time to perform services as 
manager for it. 

The Court in its opinion admits that if the case 
had been one of wrongful discharge, the action 
could not have been maintained in its present 



34 

form, but says that a different rule applies when 
the employee has been simply prevented from 
performing, without having been actually dis 
charged. The whole argument of appellant on 
the point, and all the cases on which the argument 
is based, are dismissed with the assertion that they 
are not applicable, because the case is not one of 
wrongful discharge; and the position taken by 
respondent and by the Court is attempted to be 
supported by a quotation from a single case. It is 
submitted, however, that a careful consideration of 
the subject will show that no sound distinction can 
possibly be made between the case where the servant 
is discharged, and that where he is prevented from 
performing; that not only do the cases make no 
such distinction, but their language is either ex 
pressly or impliedly made applicable to both cases 
indiscriminately, and that the case cited by the 
Court to support the opposite view is not at all in 
point. 

In the first place, what rational distinction can 
be drawn between the rights of the employee under 
a contract of service, where he has been wrong 
fully discharged, and his rights where he has been 
wrongfully prevented from performing? The 
Court suggests no basis of distinction whatever, 
the cases indicate none, and we are at a loss to 
advance one, even for the purpose of showing its 
unsoundness. The Court admits that if Stone had 



35 

been wrongfully discharged, he could not have 
maintained the action in its present form. What 
different principles are applicable to the case 
where he is prevented from performing? Is the 
employer any the more guilty of a breach of the 
contract where he discharges the servant, than he 
is when he prevents him from performing? Does 
a breach ^cfece consequences seem to be identical 



with those of another, affect the rights of the 
parties in such a different way, that in one case 
the employee may maintain an action, which 
would not be allowed in the other? In what 
better position before the law is a servant who has 
been prevented from performing than one who has 
been discharged, that the forme,r is to be allowed to 
support a claim against the employer which is not 
permitted to the latter? 

As to the authorities cited by the appellant on 
this point, though unnoticed in the opinion, 
it is only necessary to consult them to see 
that they are directly applicable to the case at bar. 
Wood, " Master and Servant,'" at page 253, intro 
duces the discussion of the subject which is quoted 
at length in appellant's points and authorities, by 
saying: "There is some apparent confusion in 
" the doctrine, both of the English and the Amer- 
" ican cases, as to what the real remedies of a 
" servant wrongfully discharged, or wrongfully pre- 
" vented from performing a contract of service 



36 

' are." The Court in its opinion in the case at 
bar has adopted Mr. Wood's view as regards the 
remedies of a servant wrongfully discharged; it 
cannot consistently with either principle or author 
ity reject the same view, when the servant has 
been wrongfully prevented from performing. The 
whole discussion of the subject in the leading case 
of Howard vs. Daly, 61 N. Y., 362, also cited by 
appellant, was based on the assumption that the 
rights of a servant wrongfully prevented from per 
forming are identical in this respect with those of 
a servant wrongfully discharged. The complaint 
in that case, as appears at page 363, set forth that 
the plaintiff " was prevented by the defendant and 
" his servants from acting and fulfilling her part 
" of the contract, although she was then, and ever 
" since has been, willing and anxious to do so." 
It is not necessary to consider further the reason 
ing of the authorities. Every word of it will be 
found to be as applicable to the case where the 
servant is wrongfully prevented from performing, 
as to the case of wrongful discharge. And a Court 
which recognizes the soundness of the reasoning 
and of the conclusion in the one case, as the De 
partment in its opinion here has done, cannot, it is 
submitted, consistently refuse to apply the prin 
ciple to the case at bar. 

To support its own position, however, the Court 
has cited the California case of Webster vs. Wade, 



37 

19 CaL, '292. It might be enough now, in the light 
of what has already been said, to call the attention 
of the Court to the fact that when the Depart 
ment questioned the authority of the case on the 
point of the remedies of a servant wrongfully dis 
charged, it destroyed its force as authority for the 
point to which it was cited. But more than that, 
the case never was authority for the point. Is 
there any true analogy, much less identity, between 
the case of a servant who does no work because, 
under the peculiar circumstances of the case, there 
are no duties attached to the position which he oc 
cupies and the servant who, although he holds a 
responsible position in an active business doesn't do 
a stroke of work because, as he alleges, he is pre 
vented from performing the unquestioned duties of 
his office. In the one case, the servant did all there 
was to be done, which was nothing. In the other, the 
servant did nothing, though there was much to be 
done. What reason is there in saying that because 
the former can truthfully allege arid prove per 
formance, the latter can do the same? 

But, even granting, for the sake of argument,, 
that there is some such distinction to be drawn, as 
that attempted by the Court between the situation 
of the servant who is wrongfully prevented from 
performing and that of one who is wrongfully dis 
charged, and that a person who has been pre 
vented from performing may show that fact as 



38 

proof ot performance, yet the question still re 
mains, how, under the evidence, Stone can pos 
sibly be held to have shown performance by him 
of that part of the agreement by which he cove 
nanted " not to enter into or engage in, directly 
" or indirectly, any other mercantile or manufac- 
" turing business, or to any other business or occupa- 
" tion which shall in anywise absorb his mind or 
" strength or interfere with his interest or efforts 
" on behalf of the said History Company, during 
" the said term of ten years." The Court says 
that " that matter was fairly submitted to the jury 
" upon the evidence and the law, and a finding 
" made against appellant's contention." How can 
this be said to be the case when the Court refused 
to instruct the jury that it would be a breach of 
the contract on Stone's part to enter into or en 
gage in, directly or indirectly, any other mercan 
tile or manufacturing business, though that is the 
plain meaning of the contract; and instructed the 
jury instead that it would be a breach for Stone 
to enter into or engage in any other mercantile or 
manufacturing business, which did in am/wise ab 
sorb his mind and strength, thus introducing a new 
element which was not contemplated in the agree 
ment. 

3. The case ivas not tried on any consistent 
theory, and the defendant was prejudiced by numer 
ous errors of law made by the Court in its admission 



39 

or rejection of evidence, and in its granting or refusal 
to grant instructions. 

Difficult as it is to reconcile Stone's two views 
of the relation in which he stood to Bancroft and 
the History Company under the contract, or to 
find anything like a consistent support in his own 
evidence of the view which has been adopted in 
the opinion of the Court, it is still more difficult to 
find any theory under which may he brought the 
, various views taken by the plaintiff himself and 
the trial Court, of the nature of his right of action 
or of the suit which he himself was bringing. The 
theory adopted by the Department in its opinion 
certainly does not reconcile the inconsistencies. 
The Department says that the action is " not one 
" for damages based upon the breach of a contract 
" of hiring, but is an action based upon the con- 
" tract itself, upon an express promise to pay, and 
" in this regard the complaint was advisedly 
" framed," and yet it approves the following in 
struction given to the jury by the Court below: 
" For the breach of an obligation arising from con- 
<k tract, the measure of damages is the amount 
" which will compensate the party aggrieved," etc. 
Moreover, it approves, also, the instruction in 
which the Court told the jury that if the defend 
ant prevented the plaintiff from discharging the 
duties required of him, he was entitled to the sal 
ary mentioned in the agreement "the same as if 



40 

" all the duties required by said contract had been 
" performed." How a jury could be expected to 
straighten out such inconsistent instructions as 
these and bring in any rational verdict must be 
left to conjecture. 

The Department says with regard to the excep 
tions taken to the rulings of the Court in the admiss 
ion and rejection of evidence that "upon anexami- 
" nation of them we find a majority not well taken 
" and others, even if meritorious in the abstract, 
" still are of minor importance and not prejudicial." 
It is submitted that the Court has failed to give 
these exceptions their proper weight. Where the 
real issues presented by the pleadings were so clear, 
and the verdict that the jury should have brought 
in on the evidence that was clearly relevant to those 
issues is so manifest, it is difficult to reach any 
other conclusion than that the jury was confused 
and prejudiced by the mass of irrelevant testi 
mony admitted and the unjustifiable and incon 
sistent instructions given by the Court on the con 
flicting theories on which the case was tried. 

These matters were considered in the points arid 
authorities of appellant on file herein, which we 
ask the Court to consider with this petition. 

It only remains for us to say that we have crit 
icized the judgment of the Department wher 
ever we have found it subject in our judgment to 



41 

criticism, but we trust that we shall be found 
guilty of no remarks which shall seem unfair or 
unnecessary or wanting in due respect or which 
should not be found in a communication between 
Court and counsel. 

Respectfully submitted, 

EDWARD J. McCUTCHEN, 

Attorney for Petitioner. 

PAGE, McCUTCHEN & EELLS, 
Of Counsel. 



CHICAGO, ST. P., M. & O. RY. CO. V. BELLIWITH. 443 

erbal act, which was a part of the res gesta3. The statement of 
>le was not made at or near the time when the act to which it re- 
j was done. It was not made until about six months after the 
nt which it describes had happened, and it was a mere narration of 
5 past event, founded, not on what Poole saw or heard at the time, j 

on whaf some one else had told him that he saw or heard. This 
dement was entirely detached from any material act that is perti- 
t to the issue in this case, and was itself nothing but hearsay. 
urance Co. v. Mosley, 8 Wall. 307, 405, 416; Vicksburg & M. R. 
v. O'Brien, 119 U. S. 99, 104, 105, 7 Sup. Ct. 118; Association v. 
Tock, 36 U. S. App. 658, 667, 20 C. C. A. 3, 8, and 73 Fed. 774, 778. 
1 testimony of Kort was therefore hearsay repeating hearsay, and 
hould have been rejected. 

t is assigned as error that the court refused to give to the jury 
following instruction: 

f you find that the plaintiff, after going round to the east gap, where he 
erstood he was to wait for the incoming train, from motives of curiosity, or 
his own pleasure, went much nearer the burning tank, and was injured by 
ion of so doing, he cannot recover; and you are to consider, in that connec- 
, whether the reason which he now gives for going back is truthful, or 
ther it is a mere subterfuge to excuse his conduct." 

Vith the exception of that part which relates to the reason which 
liwith gave for going back, this is substantially the same instruc- 
i which we held in Chicago, St. P., M. & O. Ry. Co. v. Myers, 25 C. 
&. 486, 80 Fed. 361, a case arising out of the same accident, 
uld have been given. Our reasons for this view, and some of the 
horities which support it, will be found in Judge Thayer's opinion 
:hat case, and will not be repeated here. Belliwith testified that 
went back towards the burning tank to get a package that he hud 
in the passenger car which he had occupied on his way from Min- 
polis. Several witnesses, how r ever, testified that he had told them 
various times that he went back to find his handkerchief, which 
discovered he had lost from his pocket. In view of the testimony 
:hese witnesses, and the general character of the evidence given 
Belliwith, we think the latter part of this request was not objec- 
lable, and are of the opinion that the entire request should have 
n given, if the case was to be submitted to the jury, at all. 
'here are other assignments of error in this record, but the ques- 
is which they present are not likely to arise again in the case, arid 
good purpose w r oUld be served by discussing them. The judgment 
DW must be reversed, with costs, and the case must be remanded 
the court below, with directions to grant a new trial; and it is so 
ered. 







444 83 FEDERAL REPORTER. 



HAM ELY v. BANCROFT. 

(Circuit Court, N. D. California. November 15, 1897.) 
No. 12,383. 

1. ACTION FOR SALARY PARTNERSHIP. 

S. made an agreement with defendant by which, in consideration of past 
services rendered by S. to a certain business about to be incorporated as 
the H. Co., defendant sold to him a one-tenth interest in that company and in 
its assets; and S. agreed, for at least 10 years to come, to devote his entire 
attention to the business of the company. Upon the incorporation of the 
company, S. was to receive one-tenth of the stock, subject to forfeiture 
for his breach, and subject to defeasance, as to one-half, in case of his death 
within five years. The agreement added, "The salary of the said S. shall 
be $350 a month." Held, that the contract was one of employment, and 
not of partnership, and that defendant was personally liable for S.'s salary. 

2. JUDICIARY ACT STATE LAW AS RULE OF DECISION. 

Section 34 of the judiciary act of 1789 (1 Stat. 92; Rev. St. 721), pro 
viding that "the laws of the several states * * * shall be regarded as 
rules of decision * * * in the courts of the United States * * *," does 
not apply to a decision of a state court determining the construction of a 
contract. 

This was an action at law by H. B. Hambly against H. H. Ban 
croft to recover the sum of $9,833.33, alleged to be due as salary 
owing under a contract of employment. Demurrer that the com 
plaint does not state facts sufficient to constitute a cause of action. 

Reddy, Campbell & Metson, for plaintiff. 
Page, McCutchen & Eells, for defendant. 

MORROW, Circuit Judge. The present suit was removed to this 
court on June 21, 1897, from the superior court of this state in and 
for the city and county of San Francisco. The plaintiff is a citi 
zen of this state; and the defendant, a citizen of the state of Mas 
sachusetts. The action is brought by the plaintiff, H. B. Hambly, 
as the assignee of N. J. Stone, to recover the sum of $9,833.33, al 
leged to be due by the defendant, H. H. Bancroft, as salary owing 
to Stone under a contract of employment. The case now comes up 
on a demurrer to the complaint, it being claimed that the facts 
stated in the complaint are not sufficient to constitute a cause of 
action. The complaint sets out, substantially, that on the 20th day 
of August, 1886, N. J. Stone and the defendant, H. H. Bancroft, 
made and entered into the following agreement: 

"That in consideration of the valuable services done by the said Stone in con 
ducting the publication and sale of tlie historical works of the said Bancroft, 
the business formerly being conducted as the Bancroft's Works Department of 
A. L. Bancroft & Co., but now being done and shortly to be incorporated under 
the laws of the state of California as the History Company, the said Bancroft 
hereby sells and assigns to the said Stone a one-tenth interest in the said His 
tory Company, plates, paper, stock, money outstanding, accounts, or other prop 
erty of said company, upon the following conditions: The said N. J. Stone is 
to devote his whole time and best energies, so far as his health and strength 
shall permit, for a period of not less than ten years from the date of this agree 
ment, to the publication and sale of the historical works of H. H. Bancroft, 
and of such other works, and conduct such other business, as may be from time 
to time taken up and entered into by said History Company; and the said 



HAMBLY V. BANCROFT. 445 

ne agrees not to enter into or engage in, directly or indirectly, any other 
rcantile or manufacturing business, or in any other business or occupation 
ich shall in any wise absorb his mind and strength, or interfere with his in- 
sst or efforts on behalf of the said History Company, during the said term 
ten years. Upon the incorporation of the History Company, one-tenth of 
whole number "of shares shall be issued and delivered to the said N. J. 
ne; but should the said Stone fail in any wise to carry out this agreement, 
my part thereof, in its full letter and spirit, then the said one-tenth interest 
lie said History Company shall be forfeited, and revert to the said H. H. 
icroft: provided, and it is distinctly understood and agreed, that, in case 
lie death of the said N. J. Stone before the expiration of five years from the 
e of this agreement, the said Stone having fulfilled all the conditions of this 
cement up to that time, then one-half of the said one-tenth interest of the 

I Stone in the History Company shall go to his heirs, and be their property, 
onditionally; and in the event of the death of the said Stone at any time 
;r the expiration of five years from the date of this agreement^ the terms 
of having been fully complied with, then the whole of the said one-tenth 
rest shall belong to his heirs, unconditionally. The salary of the said Stone 

II be $350 a month. The copyright of the said historical works belongs ex- 
lively to the saifl Bancroft, and shall be fifty cents a volume for the History 

Diaz, and twenty cents on the little History of Mexico. 
Signed in San Francisco the twentieth day of August, 1886. 

"H. H. Bancroft. 

"N. J. Stone. 
Witness: W. N. Hartwell." 

't is further averred that N. J. Stone duly performed all the con- 
ions of said contract on his part to be kept and performed, and 
it he is now, and always has been, ready and willing to perform 
the terms and conditions of said contract on his part to be kept 
1 pin-formed, but that said defendant has failed and neglected to 
form the terms and conditions of said contract upon his part to 
kept and performed, and has failed and neglected and refused to 
7 or cause to be paid to the said Stone the salary mentioned in 
d contract, and still refuses to pay said salary, although often 
uested so to do; that no part of said salary has been paid to 
d Stone from the 1st day of April, 1894, to the 20th day of Au 
*t, 1896; that prior to the commencement of this action, to wit, 
the 13th day of June, 1896, said Stone sold, assigned, and trans- 
red to the plaintiff herein all of his right, title, and interest m 
(r moneys then due or thereafter to become due under the said 
itract with the said defendant as hereinbefore set forth; that 
thing has been paid by defendant to plaintiff on account there- 
It is contended upon this demurrer by counsel for the defend- 
t that the parties, by the terms of the contract set out in the 
nplaint, created a partnership, and not a contract of employ - 
nt, and that, therefore, the present suit, being predicated upon 
contract of employment, cannot be maintained. On the other 
ad, it is contended by counsel for the plaintiff that the contract 
>d upon is one of employment, and that the supreme court of this 
te, in a case involving the same contract, and between the par- 
3 to it, so decided, and that this decision is binding on this court, 
e interpretation of the contract sued on in this case was in- 
ived in the suit of Stone v. Bancroft, brought in the state court, 
me sued Bancroft in the state court for his salary at the con- 
.ct rate of $350 per mouth for the period of 14 months. He re- 



446 83 FEDERAL REPORTER. 

covered judgment, and the case was appealed to the supreme court, 
where the judgment was affirmed. 112 Cal. 652, 44 Pac. 1069. The 
supreme court held that the contract was one of employment, and 
not of partnership, and that the action to recover his salary was 
a proper one, instead of a suit for damages for breach of contract, 
in view of the fact that the evidence introduced in that case showed 
that Stone had never been discharged bv Bancroft from his employ 
ment under the contract. That suit was brought by Stone to re 
cover his salary for the period extending from January 1, 1892, to 
May 1, 1893. The present suit is brought to recover his salary from 
April 1, 1894, to August 20, 1896. 

The first question which arises is whether the interpretation 
placed by the supreme court of this state on the contract sued upon 
is binding on this court, under the thirty-fourth section of the ju 
diciary act of 1789 (1 Stat. 92; section 721, Rev. St.). That section 
provides that: 

"The laws of the several states, except where the constitution, treaties, or 
statutes of rlie United States otherwise require or provide, shall be regarded 
as rules of decision in trials at common law, in the courts of the United States, 
in cases where they apply." 

The expression "laws of the several states" includes the deci 
sions of the state courts construing the laws. Swift v. Tyson, 16 
Pet. 1. The general rule as to when decisions of the state courts, 
under the above-quoted section, are binding on the federal courts, 
and when they are not, is well stated in the case just cited, in the 
following language: 

"In all the various cases which have hitherto come before us for decision, 
this court have uniformly supposed that the true interpretation of the thirty - 
fonrlh section limited its application to state laws, strictly local: that is to say. 
to the positive statutes of the state, and the construction thereof adopted by the 
local tribunals, and to rights and titles to tilings having a permanent locality, 
such as the rights and titles to real estate, and other matters immovable and 
intraterritorial in their nature and character. It has never been supposed by us 
that flie section did apply, or was designed to apply, to questions of a more gen 
eral nature, not at all dependent upon local statutes or local usages of a fixed 
and permanent operation, as, for example, to the construction of ordinary con 
tracts or other written instruments, and especially to questions of general com 
mercial law, where the state tribunals are called upon to perform the like 
functions as ourselves; that is, to ascertain, upon general reasoning and legal 
analogies, what is the true exposition of the contract or instrument, or what 
is the just rule furnished by the principles of commercial law to govern the 
case. And we have not now the slightest difficulty in holding, that this section. 
upon its true intendment and construction, is strictly limited to local statutes 
and local usages of the character before stated, and does not extend to con 
tracts and other instruments of a commercial nature, the true interpretation 
and effect whereof are to be sought, not in the decisions of the local tribunals. 
but in the general principles and doctrines of commercial jurisprudence. Un 
doubtedly, the decisions of the local tribunals upon such subjects are entitled 
to, and will receive, the most deliberate attention and respect of this court: 
but they cannot furnish positive rules or conclusive authority by which our own 
judgments are to be bound up and governed." 

It is true that in the case cited the supreme court were consid 
ering and interpreting a negotiable instrument in the light of the 
principles of commercial law, but their language is equally appli 
cable to the interpretation of ordinary contracts. Subsequent de- 



HAMBLY V. BANCROFT. 447 

cisions only tend to reaffirm this rule, and in Lane v. Vick, 3 How. 
404. it was said: 

"With the greatest resperi, it may lie proper to say that this court do not 
follow the state courts in their construction of a will or any other instrument, 
as they do in the construction of statutes." 

See, also, Carpenter v. Insurance Co., 16 Pet 495; Butz v. City 
of Muscatiue, 8 Wall. 575; Gates v. Bank, 100 U. S. 2:51); Watson v. 
Tarpley, 18 How. 517; Amis v. Smith, 16 Pet. 303, 314; Railroad 
Co. v. National Bank, 102 U. S. 14, 54; Liverpool & G. W. Steam 
Co. v. Phenix Ins. Co., 129 U. S. 397, 443, 9 Sup. Ct. 469. 

The only question involved in the case at bar, as in the suit of Stone 
v. Bancroft in the state court, is one of the interpretation of the con 
tract sued upon. No rule of property can be said to be involved, nor 
does the decision in the case depend upon the construction given 
by the state court, in the case referred to, to the laws of this state. 
The question is confined to the single inquiry as to the interpre 
tation to be given the contract sued on; that is, whether it is one 
of hiring or one of partnership. This obviously calls for the inde 
pendent judgment of the court. Reverting, therefore, to the ground 
of demurrer, that the complaint does not state facts sufficient to 
constitute the cause of action sought to be made, it is plain that 
the disposition of this question depends upon the interpretation to 
be given to the contract set out in the complaint. Looking at the 
instrument without the aid of any extraneous evidence, it is 
difficult to escape the conclusion that it was drawn up as, and ex 
presses, a contract of employment, and not of partnership. Stone 
agreed with Bancroft that he would render certain services in con 
nection with the publication and sale of the historical works of Ban 
croft, and of such other work, and conduct such other business, as 
might be, from time to time, taken up and entered into by the His 
tory Company, for which services he w r as to receive a. monthly sal 
ary of $350. He was engaged by Bancroft, and the latter agreed 
to pay him. Stone, in return, agreed "to devote his whole time and 
best energies, so far as his health and strength shall permit, for a 
period of not less than ten years from the date of the agreement," 
to the purposes and objects above specified. The period of serv 
ice was distinctly stated and agreed upon to be not less than 10 
years, and Bancroft, fully cognizant of this stipulation, neverthe 
less agreed to pay Stone during that period, for the services ren 
dered under the contract^ the sum of $350 a month. This Bancroft 
agreed to do, although it is recited in the agreement for the em 
ployment of Stone's services that the History Company, so-called, 
was shortly to be incorporated. Therefore, from the terms of the 
contract itself, Bancroft deliberately engaged and contracted that 
Stone should render services to himself and to the History Company, 
when it should be incorporated, for a certain period, specified at not 
less than 10 years, and for a stipulated salary. The fact that, upon 
the incorporation of the company, Stone was to render his services. 
under the contract with Bancroft, to the company, does not, in law, 
relieve Bancroft from Ms solemn engagement to pay Stone for the 
services called for by the contract, and which the latter was ready 



448 83 FEDERAL RKPORTER. 

and willing to render. It is immaterial whether the services were 
rendered to Bancroft personally, or to the History Company. It is 
enough that Stone was engaged by Bancroft to do certain work, 
and that he entered upon the discharge of his duties at the solicita 
tion of Bancroft, and upon his written promise to pay for such 
services. The company might receive, under the terms of the con 
tract between Stone and Bancroft, the benefit of Stone's services, 
and yet, in law, Bancroft, by virtue of his written promise, be liable 
for the payment of the salary. That one may engage the services 
of another to be rendered to a third party is elementary law. 1 
Add. Cont. (3d Am. Ed.) 38; Craig v. Fry, 68 Cal. 363, 9 Pac. 550; 
Civ. Code Cal. 1965. One can search the contract in vain for a 
statement or admission that Stone was hired or to be employed by 
the History Company upon its incorporation, and was to be paid 
by the company for the services he rendered under his contract 
with Bancroft. On the contrary, a careful reading of the agree 
ment leads to the conclusion that Stone was to be paid by Bancroft, 
with whom he entered into the contract. 

It is claimed, however, that the contract was one of partnership, 
and that, by the terms of the contract, Stone was to get a one- 
tenth interest in the History Company, and that, therefore, the 
salary to Stone was intended to be paid by the partnership, and 
not by Bancroft personally. But the difficulty about this conten 
tion is that Stone was not given the one-tenth interest in consid 
eration of the services called for under the contract. This one- 
tenth interest was for past services, which had nothing to do with 
those to be performed under the contract sued upon. It was : 

"In consideration of the valuable. services done by ttoe said Stone in conduct 
ing the publication and sale of the historical works of the said Bancroft, the 
business formerly being conducted as the Bancroft Works Department of A. 
L. Bancroft & Co., but now being done and shortly to be incorporated under 
the laws of California as the History Company." 

This transfer of a one-tenth interest was, however, qualified by 
a stipulation in the agreement that: 

"Should the said Stone fail in any wise to carry out this agreement, or any 
part thereof, in its full letter and spirit, then the said one-tenth interest in the 
said History Company shall be forfeited, and revert to the said H. H. Bancroft." 

There was a further stipulation in the agreement that, should 
Stone die before the expiration of five years from the date of the 
agreement, his heirs would only get one-half of the one-tenth in 
terest referred to. Outside of this transfer of a one-tenth inter 
est for past services, there is nothing in the language or terms of 
the contract sued upon which would justify the interpretation that 
it was ever intended to be, and is, in legal effect, a contract of part 
nership. The word "partners" is not once used, nor, in fact, does the 
instrument contain any expressions from which it could be reason 
ably and fairly deduced that the parties considered that they were 
entering into partnership relations. Indeed, the recital in the in 
strument that the History Company, so-called, was shortly to be in 
corporated, would seem to be inconsistent with the idea that Stone 
and Bancroft considered that they were entering into a partner- 



STUFFLEBEAM V. DE J.ASHMUTT. 44H 

ship. The supreme court of this state, in the case before referred 
to, involving this agreement, took the view, as stated, that the con 
tract was one of employment, and not of partnership. While it is 
true that this decision, under the authorities heretofore cited, is 
not binding on this court, involving, as it does, merely the inter 
pretation of an instrument, still it is entitled to great respect. 
Swift v. Tyson, supra. The interpretation of the contract in ques 
tion arose, as in the case at bar, upon a general demurrer to the 
complaint. The supreme court, in affirming the decision of the 
trial court overruling the demurrer, used the following language: 

"We think the only fair interpretation to be given this contract is that IVi'i 
croft was to pay Stone three hundred and fifty dollars per month for his 
services. There is but a single theory that can be advanced looking to a <-n 
trary construction, and that is to the effect, that this contract between Bancroft 
and Stone constituted them partners (Stone possessing a one-tenth interest in 
the partnership), and that consequently .the salary of said Stone was to be paid 
by the partnership. Upon a mere cursory examination of the contract, it i. 
plainly evident that it does not, and was never intended to, create a partnership 
between these two parties. This is patent from the fact that it was contem 
plated in the writing itself that in the near future the History Company was 
to be incorporated. It is doubly apparent when we consider that the one-tenth 
interest in the property given by Bancroft to Stone failed to vest any absolute 
title in him, but was dependent upon conditions, and liable to be forfeited and 
revert to Bancroft at any moment. That Stone had no such interest in this 
business as to constitute him a partner is further made plain when we look at 
the provision of the contract wherein it is expressly stipulated that, if Stone 
should die within five years from its date, then only one-half of the one-tenth 
interest should pass to his heirs. To hold these parties partners under the 
agreement would make Stone's salary dependent upon the profits of the busi 
ness. There is nothing contained herein to indicate any such intention, and it 
is certainly not so provided. We conclude that the contract should be construed 
as a contract of hiring of Stone by Bancroft, at an agreed price of three hundred 
and fifty dollars per month." Stone v. Bancroft, 112 Cal. GT>2, >."., 44 Pac. 1009. 

The view taken, and thus expressed, by the supreme court of this 
state, accords with the view I take of the legal effect of the contract 
in question. In my opinion, the plaintiff's cause of action is legally 
and properly based upon the contract as one of employment; and 
the complaint, in my judgment, states facts sufficient to consti 
tute a cause of action. The demurrer will be overruled, with leave 
to the defendant to answer within 10 days, if he shall be so advised. 



STUFFLEBEAM v. DE LASHMUTT. 

(Circuit Court, D. Oregon. November 18, 1807.) 

No. 2,409. 

1. NATIONAL BANKS LIABILITY OF STOCKHOLDER - PURCHASE INDUCED BY 

FRAUD. 

One who is induced by fraud to purchase stock of an insolvent national 
bank, and have it transferred to him on the books of the bank, and who, 
upon discovery of the fraud, takes prompt action to rescind the contract, 
is not liable to assessment on such stock, except on behalf of persons who ex 
tended credit to the bank, after the transfer, without knowledge of the fraud. 

2. APPARENT STOCKHOLDER GROUND OF LIABILITY ESTOPPEL. 

The binding character of the obligation of one whose name appears as a 
stockholder on the books of a corporation is on the principle of estoppel, 
83 F. 29 



450 83 FEDERAL REPORTER. 

which precludes him from denying a relation he has assumed, and upon the 
strength of which others have acted. 

W. H. Effinger, for plaintiff. 
E. B. Williams, for defendant. 

BELLINGER, District Judge. This is a demurrer to the separate 
answer of De Lashmutt to the complaint in an action brought to 
recover an assessment upon national bank stock held by defendant, 
on the ground that the facts alleged do not constitute a defense to 
the cause of action set out in the complaint. The separate answer 
alleges, in effect : That defendant was induced by false representa 
tions, fraudulently 'made, as to the condition of the National Bank of 
Moscow, by Brown, the president of the bank, and Brune, its cashier, 
to convey land of the value of $15,000 to Brown in consideration of 
the transfer to defendant of stock in the bank of the par value of 
|12,500. That about 20 days thereafter said' bank was closed by 
the officers of the United States government, and the bank taken in 
charge by them. That then, for the first time, the defendant became 
apprised of the condition of the affairs of such bank, and of the 
fraud practiced upon him. That he then learned that said bank 
was insolvent at the time the stock was assigned to defendant. That 
the stock at that time was valueless, and the holders thereof were, 
moreover, liable to be called upon for assessments to pay creditors. 
That, as soon as this condition of the affairs was made known to 
defendant, he rescinded the contract he had made with Brown, and 
called upon him to reconvey the land taken by him; and defendant 
tendered the stock, duly assigned, to Brown. That Brown refused 
to accept such tender, or make reconveyance, as demanded. That 
immediately thereupon, and prior to the assessment sued on, defend 
ant brought a suit against Brown to rescind such contract, and re- 
convey the land so fraudulently, as alleged, procured to be conveyed 
by Brown and Brune. The plaintiff contends that the liability of 
defendant is absolute; that it follows the legal ownership of the stock 
in his hands, regardless of any right in defendant to have the con 
tract by which he took such title canceled. 

It is held in numerous cases and there is nothing to the contrary 
that a subscriber who is induced to subscribe for stock in a corpora 
tion by fraudulent representations may set up such fraudulent rep 
resentations by way of defense in an action to recover the purchase 
price of the stock so taken. Bank v. Peck, 29 Conn. 384. And a re 
ceiver has only the right existing in the corporation at the time of 
his appointment. The case mainly relied upon in support of the 
demurrer is that of Pauly v. Trust Co., 165 U. S. 606, 17 Sup. Ct. 
465. This case holds that if the owner of stock transfers his 
shares to another as collateral securitv for a debt due to the latter 
from such owner, and if, by the direction or with the knowledge of 
the pledgee, the shares are placed on the books of the association in 
such way as to imply that the pledgee is the real owner, then the 
pledgee may be treated as a shareholder, within the meaning of 
section 5151 of the Revised Statutes of the United States, and there 
fore liable, upon the basis prescribed by that section, for the con- 



CALIFORNIA DECISIONS. 695 

deceased. The real estate vested by operation of law, subject to ad 
ministration, and the payment of debts, in the appellant and respondent 
in equal proportions. This, therefore, is an action by a grantee under 
a voluntary defective conveyance to obtain the aid of a court of equity 
to correct and reform the conveyance as against an heir at law, who 
is unprovided for by deceased. If the deed had been made to a pur 
chaser for a valuable consideration, it would in equity be sustained 
against the heirs and reformed so as to make it convey the land in 
tended to be conveyed. But the legal title to the land sought to be, by 
a decree of court of equity, read into and made a part of the deed, 
is now cast in appellant and respondent, equally, as heirs at law of 
deceased. It is a universal principle of courts of equity that, in all 
cases where relief is asked by aiding and correcting mistakes in the 
execution of instruments and powers, the party seeking such relief 
must stand upon some equity superior to that of the party against 
whom he asks it. If the equities are equal the law must prevail, and 
the court will remain silent and passive. The equities of respondent 
are, at least, equal to those of appellant. It is the dictate of equity 
and natural justice that the property of a wife dying without issue 
should go in part to her surviving husband. This was certainly the 
view of the legislature in enacting our statute of distributions, for 
in such case it makes the husband the owner of one-half the prop 
erty. If this be so, then equity would say to appellant that she should 
allow the respondent his one-half the property. A court of equity in 
terferes to correct a mistake in a written instrument only in further 
ance of justice, and to prevent fraud or some injustice. In this ease, 
by refusing to correct the deed, no fraud nor injustice is done to ap 
pellant. She has lost nothing, because she paid no consideration for 
the deed. She has been deprived of nothing the law would otherwise 
give her. It is true the intention of the grantor is not carried out, but 
it would have been equally true if an attempt had been made to make 
a will and it had been defective in a vital part. The court could 
not reform a will nor make it so that it would comply with the law. 
In this case the deceased intended to convey the property, but she did 
not do so. That intention will not now be carried out in favor of one 
who paid nothing for the conveyance, and against a lawful heir. 

The above principles are supported by an unbroken line of author 
ities. It was long ago said in Dawson v. Daivson, 1 Dev. Eq. 101 : "The 
old beaten ground, long since occupied by the courts of equity, not to 
aid voluntary conveyances, seems to render any reasons that might be 
urged, to show that the bill should be dismissed, both trite and un 
necessary. ' ' 

It is said in Story on Equity Jurisprudence, Vol. 1, Sec. 177: "For 
the same reason equity will not supply a surrender or aid the defective 
execution of a power to the disinheritance of the heir at law. ' ' 

The following cases directly support what has been said: Henderson 
et al. v. Dickey et al., 35 Missouri 120 ; Hout v. H out et al., 20 Ohio 
119 ; Powell et al. y. Powell, 27 Geo. 38 ; Powell v. Morisey, 98 N. Car 
olina 426 ; Shears v. Westov er, 110 Mich. 505 ; Else v. Kennedy, 57 



696 CALIFORNIA DECISIONS. 

Iowa 376 ; Gwyer v. Spauldmg, 33 Neb. 573 ; Mulock v. Mulock, 31 N. 
J. Eq. 602. 

Counsel for appellant, in their reply brief, do not attempt to meet 
the many cases cited by reispondent, but rely upon Section 3399 of the 
Civil Code and say: "We care not what the construction or decision 
of Eastern courts may be upon this subject, because our Code has clearly 
laid down the rule, and until that rule is changed by the legislature it 
remains the rule in this State, and fully and completely governs and 
controls the law of the case at bar. ' ' 

The section referred to provides that in case where by reason of a mu 
tual mistake "a written contract does not truly express the intention 
.of the parties, it may be revised on the application of the party ag 
grieved. ' ' 

If we concede that the word "may" means must, it does not follow 
that an instrument must be revised, except upon the application of the 
p'arty aggrieved and in accordance with the rules of equity. The 
party aggrieved in the sense of the statute means one whose pecuniary 
interest is affected by the mistake. It would include one who paid 
value for land, which, by mistake, was omitted from the deed. It does 
not include appellant, who is not aggrieved, except in the sense that 
she may grieve that she did not get the property. In that sense the 
respondent might be said to be aggrieved because the property was not 
conveyed to him. But the section was never intended to overthrow 
well settled principles upon which equity has been administered under 
the common law. The seejtion certainly does not contain all the law 
with respect to the correction of mistakes in courts of equity. It is 
only where it clearly appears that a long established principle is in 
tended to be overthrown that the court will give such effect to a statute. 
Mills, Estate of, v. Mills et al., filed September 15, 1902, 24 Cal. Dec. 
293. 

It follows that the judgment should be affirmed. 

COOPER, C. 

We concur: 

HAYNES, C. 
GRAY, C. 

For the reasons given in the foregoing opinion the judgment is 
affirmed. 

VAN DYKE, J. 
HARRISON, J. 
GAROUTTE, J. 



S. F. No. 2398 Department One. December 18, 1902. 

N. J. STONE, Plaintiff and Respondent, v. H. H. -BANCROFT, De 
fendant and Appellant. 

CONTRACTS PERSONAL SERVICES PREVENTION OF COMPLETION BY EMPLOYER 
EEMEDY SECTION 1980, C. C. Where a contract for personal services for 
a definite term of years at a monthly salary is made, and there is nothing to show 
that the employer discharged the employee, although the latter was prevented from 
doing the work contracted for during the period in question, by the employer, the 
remedy of the employee is to sue for the compensation agreed upon, not for dam- 



CALIFORNIA DECISIONS. 697 

ages for breach of contract. The fact that the employee for a portion of the- 
time he was prevented from working under the contract engaged in other work 
is not a breach of the contract on his part. Where such a contract provides for 
employment for ten years at a certain amount per month, the monthly salary is due 
at the end of each month, and payment is not postponed to the end of the ten 
year period. Section 1980 of the Civil Code is no defense to an action on such a 
contract. 

Appeal from the Superior Court of Contra Costa County John Hunt, 
Judge. ' !, 

For Appellant Edward J. McCutchen; Page, McCutchen & Eells, 
Page, McCutchen, Harding & Knight of Counsel. 

For Respondent Reddy, Campbell & Metson. 

This action was brought to recover a salary of $350 per month for 
seven months from September 1, 1893, to April 1, 1894, amounting in 
the aggregate to $2450. The plaintiff obtained a verdict and judgment 
for the full amount claimed. The defendant appeals from the judgment 
and from an order denying him a new trial. 

The action is based on a written agreement made between the parties 
to the suit on August 20, 1886, in which plaintiff, Stone, agreed to de 
vote ten years, beginning with that date, to the publication 
and sale of the historical works of defendant Bancroft at a monthly 
salary of $350, and defendant agreed to employ him on those terms. 
Suit was maintained for a former period of service under this same con 
tract and the judgment in plaintiff's favor affirmed in Stone v. Ban 
croft, 112 Cal. 652. Reference is here had to that case for a fuller state 
ment of the contract here in suit. It is settled by that case that the 
contract is one for personal services and not a partnership agreement. 

1. It is contended by appellant that in this suit the plaintiff has mis 
taken his remedy, that the defendant discharged plaintiff from his ser 
vice and that, consequently, if plaintiff has any cause of action at all, it 
is one for breach of the contract and not one for services under the con 
tract. But appellant fails to call our attention to any declaration or 
other act of defendant which amounted to an unequivocal discharge of 
the plaintiff from further employment. To be sure it appears that 
p]aintiff was prevented from working at all during the period covered 
by the present suit, by the defendant, but it is one thing to prevent a 
party from laboring and quite a different thing to discharge him from 
all further employment. 

In the former instance the contract need not be treated as broken, 
but the party, though he has performed no labor under it, may sue on 
the contract and recover the agreed compensation. In the latter in 
stance there is an unequivocal breach of the contract to employ for a 
specified time by the employer, and the suit should be as for a breach 
of the agreement to employ. All of which is clearly laid down and il 
lustrated in Stone v. Bancroft, supra. The same principle is stated in 
Dingley v. Oler, 117 U. S. 490. The plaintiff testified that he was not 
discharged and stated what was said and done to prevent him from 
working, and on his evidence the jury based their verdict in his favor, 
and thus it was impliedly found that he was not discharged, and we 
think the evidence warranted the finding. If the defendant desired to 
discharge the plaintiff he should have told him that he was discharged. 



698 CALIFORNIA DECISIONS. 

Instead of doing this he seems to have adopted a course by which if he 
was sued for a breach of the contract he might plausibly say, ' ' You have 
mistaken your remedy. I did not discharge you"; and if on the other 
hand the suit should be on the contract he might say, ' ' You should have 
sued as for a breach of the contract for I discharged you and thus 
broke my agreement." Where it is admitted that the plaintiff is en 
titled to recover in some form of action this court will not be overnice in 
its distinctions as to what form should be pursued. On the circum 
stances presented we decline to interfere with the judgment on any 
theory of mistake as to remedy. The law touching this point is clearly 
laid down in the former case of Stone v. Bancroft, supra, and need not 
be again repeated. The evidence showing that there was no discharge 
is fully as strong here as it was in that case and there it was conceded 
by appellant that there was no discharge, but it was contended that 
Stone had withdrawn from the contract and abandoned the employment. 

2. The evidence tended to show that plaintiff, during a small portion 
of the period covered by the suit, assisted another in the publication 
and sale of a medical book entitled "Femina," and it is contended that 
this was a violation of plaintiff's contract "to devote his whole time" 
to the historical works of Bancroft. It appears that Stone was at all 
times ready and willing to fully perform his contract with Bancroft but 
was prevented from so doing. He was left then either to remain idle or 
work at something else. This work did not ' ' interfere with his efforts 
on behalf of the said History Company. ' ' Bancroft was in no way in 
jured by Stone working at something else when he* was not permitted 
to work under the contract, and cannot be heard to complain thereat. 
What plaintiff did in connection with the "Femina" publication did 
not, therefore, constitute a substantial breach of his contract with appel 
lant, and the jury were warranted in their conclusion to that effect. 
Herman v. Littlefield, 109 Cal. 430. ) This same question, on practically 
the same evidence, was passed on adversely to appellant's contention in 
the former case of Stone v. Bancroft, supra. 

3. Appellant's next contention is that by the terms of the contract 
plaintiff could recover nothing until the expiration of the ten years ' ser 
vice contemplated by said contract. There is no merit in this conten 
tion. This was a contract of hiring for the period of ten years with com 
pensation fixed at $350 per month and that amount was due and owing 
at the conclusion of each month's service. There is nothing in the con 
tract to indicate an intention as to the times of payment, otherwise than 
as above stated. 

4. Appellant's last contention is based on section 1980 of the Civil 
Code, which provides as follows: "A contract to render personal ser 
vice, other than a contract of apprenticeship, as provided in the chapter 
on Master and Servant, cannot be enforced as against the employee be 
yond the term of two years from the commencement of service under it ; 
but if the employee voluntarily continues his service under it beyond 
that time, the contract may be referred to as affording a presumptive 
measure of the compensation." 

There is nothing in this contention because (1) the statute was not 



CALIFORNIA DECISIONS. 699 

pleaded; (2) it would not have been a bar or defense to this action 
if it had been pleaded. 

The judgment and order should be affirmed. 

GRAY, C. 
L "We concur: 

HAYNES, C. 
COOPER, C. 

For the reasons given in the foregoing opinion the judgment and or 
der are affirmed. 

GAROUTTE, J. 
HARRISON, J. 
VAN DYKE, J. 



Service of a copy of the within is hereby admitted 
this day of A. D. 1896.