text:
Thorwegan v. King/Opinion of the Court

This was an action at law brought by the defendant in error to recover damages for an alleged deceit. The cause of action, as set out, was substantially as follows: That Thorwegan, the defendant below, was the owner of a steam-boat, called the Grand Republic; that on or about October 1, 1876, knowing the boat to be heavily incumbered with liens, claims, and debts to the amount of about $75,000, with a view and design to injure, cheat, and defraud the plaintiff, he falsely and fraudulently represented to the plaintiff that the boat was substantially free from all liens, claims, debts, and liability, except to a small amount, which he, the defendant, would forthwith pay off and cause to be discharged, as a preliminary to merging the title and ownership of said boat in a corporation to be organized by the defendant to receive such title and ownership, and to issue stock therein, representing the full value of said boat, free and clear of all incumbrances, debts, liens, and liabilities the existing, and that if plaintiff would advance to the defendant, at that time, $12,000, he should become interested in said boat, and that the defendant would forthwith organize such corporation, and convey to it the title to said boat, free of all incumbrance and liability, and issue to the plaintiff 125 shares of stock therein, representing one-eighth of the ownership of the boat, free of all incumbrance, and one-eighth of the capital stock of the corporation; that the plaintiff, relying on said representations, and believing them to be true, and especially that the boat was at that time substantially free and clear of all debts, incumbrance, and liability, and that it would be wholly free and clear of the same when merged in and the title and ownership transferred to the corporation, did, on or about October 1, 1876, advance to the defendant the said sum of $12,000 for the said interest in said boat and the stock of the corporation; that afterwards, about October 6, 1876, the defendant caused said corporation to be organized under the name of the Grand Republic Transportation Company, with a capital stock of $100,000, in shares of $100 each, and conveyed to it the title to the said boat, but the same was at that time subject to incumbrances and liabilities, as aforesaid, to the amount of $75,000, and of the said capital stock caused to be issued to the plaintiff 125 shares, being one-eighth of the whole number; that, in consequence of said incumbrances, said stock was, and continued to be, wholly without value, and thereby the said sum paid for the same was wholly lost to the plaintiff. The defendant answered, denying all charges of fraud and misrepresentation, and pleading in bar of the action his subsequent discharge in bankruptcy. To this the plaintiff replied the fraud alleged in the complaint.

It is manifest that the case of the plaintiff below, as stated in the pleadings, turned upon the questions whether the defendant made the alleged representation as to the liabilities of the boat existing at the time of the advance of money made by the plaintiff, whether such representations, if made, were false and fraudulent, and whether the plaintiff acted on the faith of their truth. Everything else charged in the complaint-that the defendant would pay off the incumbrances and liabilities before transferring the boat to the corporation, and would convey to it a title free and clear of all liability on account of any existing debt-was promissory in its nature, related to the future, depended on contract merely, and could not be, of itself, the foundation of an action for deceit. At most, it would be but a warranty of the title against incumbrances and liability for debts, for breach of which an action on the agreement would accrue.

The only evidence adduced in support of the averments as to the representations made, and alleged to be false and fraudulent, was the testimony of the plaintiff himself as to the circumstances of the transaction. From this it appeared that the entire amount of $12,000 was not advanced in one sum, but in two, at different times. As to the first, of $5,000, it was clear, beyond dispute, that it was made before the transaction relating to the sale of the interest in the boat, and not even in contemplation of it, but as a loan, to meet an immediate necessity of the defendant, and without inquiry or security; and although it was not included in the verdict, the circuit court declined to enter a judgment for the full amount, and required the plaintiff to enter a remittitur of that sum, as the alternative of a new trial, and it was complied with. The second advance of $7,000, it appears, was made a few days afterwards, and in pursuance of negotiations for a sale by the defendant to the plaintiff of an interest in the boat, to be consummated by the transfer to the proposed corporation and the issue of its stock. It is perfectly clear, from the testimony of the plaintiff himself, that, at the time of the second advance of the sum of $7,000, he was informed and well knew that the boat was not free from incumbrances and liabilities. On the contrary, he himself says that he made the advance to enable the defendant to pay debts then existing. He testified that Thorwegan said, 'if he could get that much money it would pay out the debt and would have her clear of all debts; and that if he didn't get the money the boat would be tied up before he left here, and he wouldn't be able to turn a wheel.' This is the strongest statement made by the plaintiff as to any representation of the defendant in reference to the amount of the boat's existing indebtedness. In the same connection, the witness stated that nothing was said about the amount of the indebtedness. On cross-examination, the following questions and answers sum up the transaction: '169 int. As I understand, you testify in your examination in chief that Thorwegan promised that he would pay off the debts due by the boat, and all the demands against her? A. Yes, sir. 170 int. And you relied on that promise? A. Yes, sir. 171 int. And you let him have your money? A. Yes, sir. 172 int. That's the way of it? A. Yes, sir. 173 int. You did'nt care about an interest in this boat particularly, but you wanted to help Thorwegan more than anything else; that was your motive? A. That was the motive. I saw he was in trouble, as he stated to me.' On re-examination, the following question and answer appear: '179 int. At that time, in October, 1876, you placed full reliance on the representations that the boat was free and clear of all debts, didn't you? A. I did; that she was turned over [to] me clear of all debts due and demands up to that date. It was not on the first of October; the boat was to be turned over to me when she was at the wharf ready for receiving cargo. That was the understanding, and the captain will state that fact himself.'

At the time of the transaction the boat was undergoing repairs. When these were finished the corporation was organized as proposed, and the boat transferred to it; but, as appeared from the testimony of the clerk, introduced as a witness on the part of the plaintiff, with an unpaid indebtedness at that time of $68,000, of which about $10,000 were liens upon the boat, the remainder being represented by notes, etc., on building account. The boat was worth from $160,000 to $175,000, in his opinion, at that time. She was lost by fire in September, 1877. There was insurance on her, however, only for $50,250, which went to pay creditors.

On the part of the defendant, a writing obligatory was introduced as evidence, signed, and sealed by the defendant, reciting the agreement with the plaintiff of October, 1876, for a sale of one-eighth interest in the boat, represented by one-eighth of the stock of the corporation, and containing a covenant to hold the plaintiff harmless from all claims, incumbrances, and liabilities existing on said steamer at that date, and agreeing to pay all claims and incumbrances existing on said boat on that day, as well as all maritime and other liens, so that no part thereof as against him should be chargeable to or paid by the new company, a copy of which was set forth in the origianl petition of the plaintiff. The defendant was called on his own behalf, and denied making any representations as to the indebtedness of the boat at the time of the sale. There was evidence, taking up much space in the record, consisting of accounts showing receipts and disbursements on account of the boat for 16 trips, most of them made after the sale to King, and of the examination of the clerk in reference thereto, which, in our opinion, ought not to have been admitted. It was irrelevant, and tended to confuse and mislead the jury to the prejudice of the defendant by suggesting questions of good faith as to the management of the boat, after the transaction in question, which were not part of the issue, and which threw no light upon it.

In this state of the evidence, t e defendant requested, among others, the following instruction to be given to the jury: 'The jury are instructed that unless the evidence clearly shows that defendant, with intent to defraud the plaintiff, falsely represented to him some material facts alleged in the petition, and relied on by the plaintiff, whereby plaintiff, to his damage, was induced to enter into the contract described in the petition, then they must find for the defendant.' This the court refused to give, and to this refusal exception was duly taken. The proposition contained in the request is a correct statement of the law, and strictly applicable to the case. The defendant was entitled to have it given to the jury, if not in the precise form asked, at least in substance. It is not contested in argument as unsound; but the refusal to give it is met by the claim that it was given, substantially as prayed, in the charge of the court. This is set out in full in the bill of exceptions, and it becomes necessary, therefore, to examine it, to ascertain whether it properly covers the point of the instruction asked for and refused. That examination satisfies us that it does not; but that, on the contrary, it contains directions to the jury inconsistent with the instruction requested. Among other things, the court, in its charge, said: 'The complaint is that by fraudulent and false statements, a suppression of the truth on the part of the defendant, the deception was practiced upon the plaintiff.' And: 'The the law will not permit any one to make fraudulent representation, and thus obtain from the party some valuable thing, money, or otherwise. If any one commits a fraud of that kind, and thereby another loses his money, having trusted to what was said to him, why the individual who does it is still responsible to the party thus defrauded. And in this connection, gentlemen, you will view the whole case, not only what the party said, but if you shall come to the conclusion he left things unsaid that he ought to have said,-that is, that there was a suppression of truth when it was demanded from him, or, from other circumstances of the case, he ought to have disclosed the facts, that is just as bad as asserting a fact which does not exist, and, in relation to that, you will have to view it with the acts of the other party also.'

After the jury had retired they requested further instructions, as follows: 'The jury desire to be instructed whether the withholding of the true financial condition of the boat constitutes a fraud?' And, in answer, the court said: 'If the disclosing of it, as I have told you before, became a duty,-that is, if the withholding was intentional, for the purpose of accomplishing a fraud upon the individual,-and it was necessary for it to be disclosed, then such withholding would be a fraud. But if the individual advanced the money without any question, or any question concerning the financial condition of the boat, or if he took other guaranties, so as to secure himself against contingencies, then it might not be necessary. I can't answer the question by saying yea or nay, for the very question depends on the circumstances of the case. For instance, I am talking to an individual designing to accomplish an object. If I find that individual is desirous of obtaining certain information for the purpose of either denying or granting the request I make, and I withhold the information, that is a fraud, provided I do it with the intention of inducing him to do a thing that he would not otherwise do. That is a fraud or deceit, as the law calls it. * *  * If you should come to the conclusion that it became necessary for this individual to know the financial condition of the boat, and it was withheld by the other party intentionally, for the purpose of misleading him, then you should solve this question as you think the testimony justifies.' This charge assumes that the plaintiff's case was based upon a fraudulent suppression of material facts, knowledge of which the defendant was under some legal duty to communicate, and that there was evidence before the jury tending to prove the allegation. The assumption is wrong in both its parts. No such averment is made in the pleadings, and there was nothing in the evidence tending to prove it. The whole case, as we have heretofore stated, as exhibited in the petition or complaint, rested upon an alleged positive misrepresentation of an existing fact; and all the evidence intended to establish the fraud charged was directed to the proof of that actual misrepresentation. There was no suggestion of any such relation between the parties, or of anything in the circumstances of the transaction, that imposed upon the defendant the legal obligation of making any disclosures, in respect to which he failed to speak. The whole charge was that, having undertaken to make a statement of a particular condition of facts, he had done so falsely and fraudulently. The court, therefore, should have confined its instructions to the jury to the point really involved in the issue, and, omitting what was said in respect to fraudulent suppressions, informed them that there was no evidence in the case that authorized their request for further instructions upon the point involved in their inquiry. It was error, therefore, to refuse to give the instruction asked for by the defendant, as set out above.

The judgment is therefore reversed, and the cause remanded, with directions to grant a new trial.

title: Thorwegan v. King/Opinion of the Court


text: Talk:Thorwegan v. King/Opinion of the Court

license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/


text:
Board Suppliers Carroll Company v. Smith

J. G. George, for plaintiff in error.

L. B. Valliant and ''Geo. B. Howry'', for defendant in error.

This was an action at law brought to recover the amount of certain overdue interest coupons, upon municipal bonds, alleged to be obligations of the plaintiff in error, delivered and payable to the Greenville, Columbus & Birmingham Railroad Company or bearer, for $1,000 each. Each bond contains the follow recital: 'The above-mentioned sum being a part of a subscription to the capital stock of the Greenville, Columbus & Birmingham Railroad Company, authorized by the following styled acts of the state of Mississippi, viz.: an act entitled 'An act to incorporate the Arkansas City & Grenada Railroad Company,' approved March 5, A. D. 1872, and an act entitled 'An act to amend an act entitled an act to incorporate the Arkansas City & Grenada Railroad Company, approved March 5, 1872,' approved March 4, A. D. 1873.'

The act first referred to contained the following: 'Sec. 19. Be it further enacted, that upon application by the president or other authorized agent of said corporation to the constituted authorities of any county, city, or incorporated town in the state of Mississippi, or adjacent to the main line and branch railroad of this corporation, for a subscription to a specified amount of the capital stock of said corporation, said constituted authorities are hereby required, without delay, to submit the question of 'subscription' or 'no subscription' to the decision of the qualified voters of said county, city, or incorporated town, at a special or regular election to be held therein, and if two-thirds of said qualified voters be in favor of said subscription, the constituted authorities of said counties, cities, or incorporated towns are hereby required, without delay, and are authorized and required to subscribe to the capital stock of said corporation to the amount agreed upon; and bonds of the county, city, or incorporated town making the subscription, having such time to run and such rates of interest as may be agreed upon, shall be issued, without delay, by the authorities of the counties, cities, or incorporated towns, to the president and directors of said corporation, to the amount of said subscription to the capital stock. * * *'

The second act recited had the effect merely to change the name of the company to that of 'The Greenville, Columbus & Birmingham Railroad Company.'

The complaint alleged that the bonds and coupons described were delivered by the county of Carroll to the railroad company, for value, and that the plaintiff became a purchaser thereof for a valuable consideration before maturity, and was an innocent holder thereof without notice.

The defendant pleaded three pleas, of which the first in order is as follows: 'And for further plea in this behalf said defendant, by attorney, says actio non, because it says that on the third day of March, 1873, on the application of the president of the Greenville, Columbus & Birmingham Railroad Company, a corporation in this state, the board of supervisors of the county of Carroll ordered a special election to be held in said county on the first day of April, 1873, at which the question of subscription or no subscrption, by said county, to the capital stock of said railroad company was to be submitted to the qualified voters of said county. And said defendant avers that said election was accordingly held, and said defendant avers that on the first day of April, 1873, the names of 3,129 registered voters were on the registration books of said county, and there were in fact on the first day of April, 1873, three thousand one hundred and twenty-nine qualified voters in said county, but that only 1,280 of said voters voted at said election, of whom 918 voted in favor of the proposition to subscribe for said stock and 362 voted against it, as fully appears by the returns of the three registrars of said county, filed with the clerk of said board of supervisors of said county. And said defendant says that, notwithstanding the refusal of two-thirds of the qualified voters of said county to vote in favor of subscription for stock, the then board of supervisors of said county, in violation of their duty and the trusts reposed in them, and in violation of the constitution of the state of Mississippi, subscribed to the capital stock of said railroad company, and issued the bonds and coupons in the declaration mentioned in fact, for said subscription for said capital stock in said railroad company, without any statement or recital in said bonds that two-thirds of the qualified voters of said county had assented thereto. And this the said defendant is ready to verify. Wherefore it prays judgment,' etc.

The second was like the first, with the additional averments that the said returns of the registrars of the county, filed and deposited with the clerk of the said board of supervisors of said county, was 'at all times open to the inspection of all persons in the public office of the clerk of the chancery court of said county; and said defendant avers that the said registration of voters of said county was a book of record, deposited and kept in the public office of the clerk of the chancery court of said county as a record book, and open for inspection to all persons, and exhibited the fact that there were 3,129 registered voters in said county at the time of the election.'

The third plea was like the second, with the addition of the following: 'And said defendant avers that before the issuance of any of the bonds and coupons in the declaration mentioned, a bill was exhibited by citizens and tax-payers of said county against the said board of supervisors in the chancery court of the county of Carroll to restrain and enjoin said board of supervisors from the issuance and delivery of the bonds of said county upon a subscription of stock in said railroad company; and thereupon an injunction was ordered and issued, before the issuance and delivery of any of the bonds and coupons mentioned in the declaration, restraining and enjoining the said board of supervisors from the issuance and delivery of such bonds. And said defendant avers that the said bill of injunction was sustained and made perpetual by the judgment and decree of the supreme court of the state of Mississippi. And said defendant says that, notwithstanding the issuance and pendency of said injunction, and notwithstanding the refusal of two-thirds of the qualified voters of said county to vote for said subscription for stock in said railroad company, the said board of supervisors fraudulently and illegally issued and delivered the bonds and coupons in the declaration mentioned, in fact for a subscription for stock in said railroad company. And this the said defendant is ready to verify. Wherefore it prays judgment.'

A demurrer to each of these pleas was sustained, and judgment rendered for the plaintiff below, to reverse which this writ of error is prosecuted.

Mr. J. Z. George for plaintiffs in error submitted on his brief.

[Argument of Counsel from page 560 intentionally omitted]

Mr. Charles B. Howry for defendant in error.

MATTHEWS, J.


text: Talk:Board Suppliers Carroll Company v. Smith


text:
Board Suppliers Carroll Company v. Smith/Opinion of the Court

harter of the railroad company, authorizing the issue of bonds in payment of subscriptions by municipal bodies to its capital stock, is bosed upon article 12, § 14, of the constitution of the state, which declares that 'the legislature shall not authorize any county, city, or town to become a stockholder in, or to lend its credit to, any company, association, or corporation, unless two-thirds of the qualified voters of such county, city, or town, at a special election or regular election to be held therein, shall assent thereto.'

It is claimed, on behalf of the plaintiff in error, that the qualified voters referred to in the constitution of Mississippi and the charter of the railroad company are those who have been determined by the registrars to have the requisite qualifications of electors, and who have been enrolled by them as such, and that it requires a vote of two-thirds of the whole number enrolled as qualified to vote, and not merely two-thirds of such actually voting at an election for that purpose, to authorize the issue of such bonds as those in suit. That presents the single question for our decision, for the averment in the last plea, that 'the board of supervisors fraudulently and illegally issued and delivered the bonds and coupons,' has reference merely to their being issued without the alleged requisite assent of two-thirds of the registered voters, and there is nothing alleged in the plea from which it can be inferred that the injunction bill, pending which the bonds, it is charged, were issued and delivered, was based on any other infirmity. We do not think t e plaintiff in error is precluded from raising this question by any recitals in the bonds. They contain no statement of any election called or held, or of the vote by which the issue of the bonds was authorized. They do not embody even a general statement that the bonds were issued in pursuance of the statutes referred to. The utmost effect that can be given to them is that of a statement that a subscription to the capital stock of the railroad company was authorized by the statutes mentioned, and that the sum mentioned in the bonds was part of it. They serve simply to point out the particular laws under which the transaction may lawfully have taken place. They say nothing whatever as to any compliance with the requirements of the statute in respect to which the board of supervisors were authorized and appointed to determine and certify. They do not, therefore, within the rule of decision acted on by this court, constitute an estoppel, which prevents inquiry into the alleged invalidity of the bonds. Northern Bank of Toledo v. Porter Tp. 110 U.S. 608; S.C.. ante, 254; County of Dixon v. Field, ante, 315; School-dist. v. Stone, 106 U.S. 183; S.C.. 1 SUP. CT. REP. 84. On the other hand, we do not agree with the counsel for the plaintiff in error that the pendency of the injunction bill, referred to in the last plea, affects the title of the defendant in error, as a bona flde holder of the bonds for value; or that this court is bound to follow and apply the judgment of the supreme court of Mississippi in that case, reported as Hawkins v. Carroll Co. 50 Miss. 735, perpetuating the injunction, on the ground that the constitution and laws of the state required a majority of two-thirds of those qualified to vote to be cast at the election, to support the validity of the bonds. The defendant in error was no party to that suit, and the record of the judgment is therefore no estoppel. The bonds were negotiable, and there was, therefore, no constructive notice of any fraud or illegality, by virtue of the doctrine of ''lis pendens. County of Warren v. Marcy'', 97 U.S. 96. It is not alleged in the plea that the defendant in error had actual notice of the litigation, or of the grounds on which it proceeded, or that any injunction was served upon the board of supervisors; and, if he had, that notice would have been merely of the question of law, of which, as we have seen, he is bound to take notice, at all events, and which is now for adjudication in this case. There is nothing in the case of Williams v. Cammack, 27 Miss. 209, 224, to which we are referred by counsel on this point, inconsistent with these views.

The decision in Hawkins v. Carroll Co., supra, is not a judgment of the supreme court of Mississippi, construing the constitution and laws of the state, which, without regard to our own opinion upon the question involved, we feel bound to adopt and apply in the present case. It is a decision upon the very bonds here in suit, pronounced after the controversy arose, and between other parties. It was not a rule previously established, so as to have become recognized as settled law, and which, of course, all parties to transactions afterwards entered into would be presumed to know and to conform to. When, therefore, it is presented for application by the courts of the United States, in a litigation growing out of the same facts, of which they have jurisdiction by reason of the citizenship of the parties, the plaintiff has a right, under the constitution of the United States, to the independent judgment of those courts to determine for themselves what is the law of the state by which his rights are fixed and governed. It was to that very end that the constitution granted to citizens of one state, suing in another, the choice of resorting to a federal tribunal. Burgess v. Seligman, 107 U.S. 20, 33; S.C.. 2 SUP. CT. REP. 10.

We have, however, considered the reasoning of the supreme court of Mississippi, in its opinion in the case of Hawkins v. Carroll Co., with the respect which is due to the highest judicial tribunal of a state speaking upon a topic as to which it is presumed to have peculiar fitness for correct decision, and, while we are bound to admit the carefulness and fullness of its examination of the question, we are not able to adopt its conclusions. On the contrary, we are constrained to follow the decision in St. Joseph Tp. v. Rogers, 16 Wall. 664, and adhere to the views expressed by this court in County of Cass v. Johnston, 95 U.S. 360, in deciding the same question upon the construction of a provision of the constitution of Missouri which is identical with that of the constitution of Mississippi under consideration. It was there declared and decided that 'all qualified voters, who absent themselves from an election duly called, are presumed to assent to the expressed will of the majority of those voting, unless the law providing for the election otherwise declares. Any other rule would be productive of the greatest inconvenience, and ought not to be adopted, unless the legislative will to that effect is clearly expressed.' In Missouri, as in Mississippi, there was a constitutional provision requiring a registration of all qualified voters. State v. Sutterfield, 54 Mo. 391.

Much stress in the argument was laid by the supreme court of Mississippi upon the registration record, as furnishing the standard by which to ascertain the proportion of qualified voters whose assent was required by the constitution. On this point they say, (50 Miss. 761:) 'There exists, therefore, in each county a registration of the list of voters, which ought to show, with approximate accuracy, the names of those entitled to vote 'at any election.' In ascertaining, therefore, the result of an election requiring two-thirds of the qualified voters of the county to assent thereto, we think that the registration books are competent evidence on the point of the number of qualified voters in the county. It would be open to proof to show deaths, removals, subsequently incurred disqualifications, etc. When the constitution uses the term 'qualified electors,' it means those who have been determined by the registrars as having the requisite qualifications by enrolling their names, etc. It would be a fair construction of the fourteenth section to hold that the 'two-thirds' meant that number of the whole number whose names had been enrolled as legal voters. That furnished official evidence of those prima facie entitled to vote. But, in this case, in addition to the information contained in the registration books, it is admitted that there were from 2,000 to 2,500 qualified voters in Carroll county at the date of this election. The proposition submitted did not have the assent of two-thirds, as required by the constitution. The difficulty of proving the number of voters in the county has been obviated by this admission.'

But this reasoning, as it seems to us, does not meet, much less overcome, the difficulty of the argument. The constitution of Mississippi, although it does not recognize any voters as qualified, except such as are registered, does not make all persons, registered as such, qualified. And yet, if it is to be construed, in the clause in question, as referring to the registration as conclusive of the number of qualified voters, then no proof is competent to purge the list of those who never were qualified, or have died, removed, or become otherwise disqualified, thus obliterating the distinction between registered and qualified voters; and if, on the other hand, it is to be construed as meaning voters qualified, in fact and in law, without reference to the sole circumstance of registration, them the body of electors is as indefinite as though there were no registration, and the determination of the whole number, if an actual enumeration is required to determine how many are two-thirds thereof, is completely a atter in pais, and must be inquired of and ascertained, in each case, by witnesses. The difficulty, if not the impossibility, of reaching results by such methods, amounts almost to demonstration that such could not have been the legislative intent, or the meaning of the constitution. The number and qualification of voters at such an election is determinable by its result, as canvassed, ascertained, and declared by the officers appointed to that duty, or as subsequently corrected by a contest or scrutiny in a direct proceeding, authorized and instituted for that purpose; it cannot be contested in any collateral proceeding, either by inquiry as to the truth of the return, or by proof of votes not cast, to be counted as cast against the proposition, unless the law clearly so requires. In our opinion, the constitution of Mississippi did not mean, in the clause under consideration, to introduce any new rule. The assent of two-thirds of the qualified voters of the county, at an election lawfully held for that purpose, to a proposed issue of municipal bonds, intended by that instrument, meant the vote of two-thirds of the qualified voters present and voting at such election in its favor, as determined by the official return of the result. The words 'qualified voters,' as used in the constitution, must be taken to mean not those qualified and entitled to vote, but those qualified and actually voting. In that connection a voter is one who votes, not one who, although qualified to vote, does not vote.

We are, consequently, of opinion that there is no error in the judgment of the circuit court, and it is accordingly affirmed.


text: Talk:Board Suppliers Carroll Company v. Smith/Opinion of the Court


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Page:Copyright, Its History And Its Law (1912).djvu/260

 is distinct from the property in the material object, which accompHshes for the artist the important result that when he sells his painting he does not transfer the copyright, but retains that for himself unless he specifically contracts with the buyer to include in the sale the copyright or the right to copyright. This adopts into the law the decision of the courts that copyright does not pass with a painting unless distinctly included in the transfer. The provision (sec. 41) is specific that the copyright "is distinct from the property in the material object copyrighted, and the sale or conveyance, by gift or otherwise, of the material object shall not of itself constitute a transfer of the copyright, nor shall the assignment of the copyright constitute a transfer of the title to the material object." Thus the author of a work of art has two separate properties, the painting, statue or other work in itself, on the one hand, and the copyright or the right to copyright on the other, neither of which is transferred by the transfer of the other unless both are specifically included in the transfer.

The copyright in certain classes of reproductions of works of art is dependent however on manufacture in this country, as in the case of books. This provision no longer includes photographs as in the preceding law, but is confined specifically (sec. 15) to "text produced by lithographic process, or photo-engraving process," "illustrations within a book consisting of printed text and illustrations produced by lithographic process, or photo-engraving process, and also to separate lithographs or photo-engravings, except where in either case the subjects represented are located in a foreign country and illustrate a scientific work or reproduce a work of art." It is further provided that "in the case of the book . . . if the text be produced by lithographic process, or photo-


text:
Colt v. Colt

B. F. Thurston and L. C. Ashley, for appellants.

''Chas. E. Perkins and Alvan P. Hyde'', for appellees.

This is a bill in equity to recover certain shares of the capital stock of Colt's Patent Fire-arms Manufacturing Company, a corporation of Connecticut at Hartford, in the hands of the executors of Samuel Colt, deceased, as a part of his residuary estate, under his will. The complainants are children of the late Christopher Colt, a brother of the testator, and Mrs. Theodora G. Colt, their mother, who is assignee of the interest of a deceased son. The defendants are executors of the last will of Samuel Colt, and trustees, and others, legatees claiming interests under the same. The testator, Samuel Colt, made his last will and testament, June 6, 1856, and thereafter two codicils, one on January 12, 1858, the other, February 2, 1859. He died at his domicile, Hartford, Connecticut, in 1862, and his will and codicils were duly admitted to probate and record. A large part of his estate was comprised in 9,996 shares of the capital stock of the Colt's Patent Arms Manufacturing Company. By his will he bequeathed 1,000 shares of this stock to his widow for life, with remainder to his after-born children, and to each of the latter also 500 shares; 100 shares to Samuel Caldwell Colt, a son of a brother, 'when he shall have arrived at the age of twenty-one years;' to the children of his brother Christopher 100 shares each, 'as they shall arrive at the age of twenty-one years,' respectively. He gave other legacies of stock to other named persons, and provided means for the foundation and establishment of a school or institution for the instruction and education of young men in practical mechanics and engineering. It contained also the following:

'To my brother, James B. Colt, now of said city of Hartford, I give and bequeath the use and improvement during his life of five hundred shares of the stock of said Colt's Patent Fire-arms Manufacturing Company, and, after the death of my said brother, to his issue lawfully begotten, as an absolute estate. This bequest is on condition that the said James B. Colt shall waive and relinquish all claims and demands, actual or pretended, which he may have against me or against said Colt's Patent Fire-arms Manufacturing Company.

'I also give and bequeath to my executors and their successors in said office five hundred shares of the stock of said Colt's Patent Fire-arms Manufacturing Company, in trust for the issue of said James B. Colt, lawfully begotten, the profits and dividends thereof to be applied to the education of his said issue, so far as the same may be necessary for that purpose, until the youngest surviving of said issue shall have reached the age of twenty-one years, when said stock and all accumulations thereof, if any, shall go to said issue, in equal proportions, as an absolute estate.'

He gave also a legacy in stock to each of his executors.

The residuary clause is as follows: 'All the rest and residue of my estate, of every kind and description, not herein disposed of, I give, bequeath, and devise as follows: All the remaining stock of said Colt's Patent Fire-arms Manufacturing Company, of which I shall die possessed, shall be divided among the several persons and parties to whom I have hereinbefore given legacies of stock, in the ratio and proportion in which said legacies of stock are hereinbefore given. All my other residuary estate shall be divided among the several persons to whom I have hereinbefore given pecuniary legacies in gross, in the ratio and proportion in which I have hereinbefore given such pecuniary legacies, meaning that my residuary estate in said stock shall be shared by the same persons to whom I have given specified legacies in stock, and in precisely the same ratable proportions, and that my other residuary estate shall be shared by the same persons to whom I have given gross pecuniary legacies, and in precisely the same ratable proportions.'

The first codicil contains the following: 'I also revoke and cancel, for reasons growing out of his late unbrotherly conduct towards me, the legacy of five hundred shares of the stock of Colt's Patent Fire-arms Manufacturing Company, given in the aforesaid will to James B. Colt for life, remainder to his children; and, in lieu thereof, I give and bequeath said five hundred shares of stock to the trustees named in said will, for founding a school for practical mechanics and engineers, subject to the uses and trusts created in said will for that purpose.'

By the second codicil, all the provisions previously made for founding and carrying on the school for mechanics were canceled. It also contains the following: 'I hereby give and bequeath to each of the children of James B. Colt a legacy of one hundred dollars, and I hereby cancel and wholly revoke any and all other legacies or devises by me heretofore at any time made to or for the use and benefit of said children, or any of them. I give to the eldest son of my brother, Christopher Colt, a legacy of one hundred dollars and no more and all legacies heretofore made in his favor are canceled and revoked; and I hereby give, bequeath, and devise to the other children of my said brother (said eldest son not being included herein) the property, to-wit, five hundred shares of the stock of the Colt's Patent Fire-arms Manufacturing Company, which in and by said original will is bequeathed to my executors in trust for the use of the children of said James B. Colt, to have and to hold to said other children of the said Christopher in equal proportions. This last bequest is in trust for said children, and the property hereby bequeathed is to be held by my executors for said children in the same manner and subject to the same limitations as are provided in said original will in the bequest to the children of said James B. Colt. And I hereby confirm and establish said original will as altered, changed, and modified by this and the previous codicil, as and for my last will and testament.'

Elizabeth H. Colt, the testator's widow, Richard D. Hubbard, and R. W. H. Jarvis were appointed and qualified as executors of the will.

After the death of the testator, his brother, James B. Colt, claimed that the cancellation by the first codicil of the specific legacy in the will to him for life, with remainder to his issue, of 500 shares of the stock, did not have the effect of canceling his interest under the residuary clause, on the ground that that clause should be construed as an independent disposition of the remaining stock, to the very persons, only, described as those to whom specific legacies of stock had been thereinbefore, that is, in the will, given, as if they had been again named; and not as a dependent legacy to those who, under the codicils as well as the will, became ultimately entitled as legatees to specific legacies of stock, although these legacies might be of the same stock which, in the will itself, had been originally given to others, and afterwards canceled. This claim, it will be observed, consisted of two parts: First, of a right in himself to share in the residuum; and, second, to exclude from it those to whom, by the codicils alone, and not by the will, specific legacies were given. This branch of the claim necessarily antagonized the right of the children of Christopher Colt to participate in the residuum by reason of the legacy given to them in the second codicil.

To assert his interest in the residuary estate, and to determine its amount, and the several interests of all entitled to share in it, James B. Colt, in July, 1864, filed his bill in equity in the superior court of Connecticut for Hartford county. To that bill parties defendant, among others, were made as follows: Mrs. Elizabeth Hart Colt, as claiming an interest under the will, and also as executrix, and as administratrix of Henrietta Colt, deceased, and as guardian of Caldwell Hart Colt, a minor; Richard D. Hubbard, as claiming an interest under the will, and as executor; Richard W. H. Jarvis, as claiming an interest under the will, and as executor; Isabella De Wolf Colt, Le Baron B. Colt, Ed ward D. Colt, and Samuel Pomeroy Colt,-all the last three being minors; Theodore De Wolf Colt, their guardian; and were duly served with process. A demurrer to this petition was filed on beha f of all the defendants, and was reserved for the advice of the supreme court of errors, whose decision thereon is reported as Colt v. Colt, 32 Conn. 422. From that report, the case seems to have been fully argued and thoroughly considered. The demurrer was overruled. The court decided that the bequest of a share of the residuary stock to James B. Colt had not been revoked; that the language of the revocation was plainly limited to the first 500 shares; and that the second legacy to him of a share in the residuary stock must be regarded as an independent legacy, the reference to him as a person to whom the previous legacy had been given being merely designatio personoe, not having the effect of attaching together the two bequests, as necessarily connected in the same ownership, and that the latter was, consequently, not affected by the revocation. The cause thereupon came on again in the superior court, the respondents having been ordered to answer over, and where, it is recited in its record, 'the parties again appear and are at issue upon a general denial of the allegations in the plaintiffs' bill,' and thereupon the court made a finding of facts. Among other findings, after referring to the will and codicils of the testator, it is stated that 'the parties in this cause are interested in the estate of the said Samuel, in manner and form and to the extent and proportion in said will and codicils expressed, set forth, and contained.' It is also stated that there are children of Christopher Colt, a brother of the testator, 'to-wit, the eldest son of the said Christopher, named in said will, and the said Isabella De Wolf Colt, and three children of the said Christopher, then minors under the age of twenty-one years, to-wit, Le Baron B. Colt, Edward D. W. Colt, and Samuel Pomeroy Colt, of which minor children the said Theodora De Wolf Colt was and is the legal guardian,-all of whom are residents in Hartford,-but the said Edward D. W. Colt has, since the last term of this court, arrived at his majority.' It had been previously recited that when the parties appeared the minors 'were duly represented by their guardians.' The superior court reserved, for the advice of the supreme court of errors, the following questions arising upon the record of the case:

'(1) Whether the interest taken in the residuum by James B. Colt is a life estate or an estate in fee. (2) Whether said Colt shall receive interest upon the dividends made on his residuary stock; and if so, from what time. (3) Have the legacies which the children of the testator, who deceased in his lifetime, would have taken had they survived him, lapsed, or are they to be considered and treated as intestate estate? (4) Do the said children of Christopher Colt take any share in the residuum of stock in respect to their legacy of 500 shares given to them in the codicil to said will? (5) Do the said R. W. H. Jarvis and H. C. Deming both take a legacy of stock under said will, or only one of them, or neither of them? (6) What is the amount of the residuum of the stock, and who are entitled thereto, and in what proportions?

'This court also reserves all other questions arising upon the record, and also the question as to what decree shall be passed in this suit.'

These questions were decided by the supreme court of errors, as found in the report of the case of Colt v. Colt, 33 Conn. 270. In answering them the court held that James B. Colt took an interest in the residuary stock for his life only. It said: 'The revocation was not sufficiently broad to take away the interest of James B. in the residuum. It was broad enough to take away that of the children. But there is nothing whatever to show an intention to enlarge the interest of James B., and such could not be the legal effect of a mere revocation of the interest of the other parties. It is not material to inquire what disposition is to be made of that remainder.' In answer to the question, whether the children of Christopher Co t take any share in the residuum in respect of their legacy of 500 shares given to them in the codicil to the will, the court said: 'The fourth question must be answered in the negative. In giving a construction to the will, we held that the residuum was given independently to the persons and parties to whom stock was thereinbefore given. It follows logically that persons and parties to whom stock was not thereinbefore given cannot take under the residuary clause.' Finally the court declared that the amount of the residuum of stock was 5,346 shares, and proceeded to allot it to each person entitled by name, and, among others, to Christopher's children 459 27-31 shares, and to J. B. Colt for life, 574 26-31 shares. In pursuance of these instructions, a final decree was entered in the superior court, adjudging the above amounts of stock, respectively, among others, to James B. Colt, for life, and to the children of Christopher Colt, 'in the manner specified in the will.' It will be observed that this decree, which was entered in March, 1866, disposed of the title and right in the whole residuary stock, then in the hands of the executors for final distribution, except the remainder in 574 26-31 shares, set apart to James B. Colt for life. In accordance with its terms, the distribution of the stock, and of its dividends and accumulations, was actually made to the parties respectively; the executors, however, continuing to hold the stock awarded to the children ofChristopher Colt, as trustees under the will, until January 11, 1873, when the youngest, having arrived at full age, and that being the period for division among them, final payment and division to each was made, and a full settlement had between them and the executors, as such, and as trustees. The executors also held the stock allotted to James B. Colt for life, from the entry of the decree of the superior court establishing his right, paying to him its income until death, which took place October 28, 1878, and thereafter for final distribution to those entitled.

The complainants, who are the appellants, thereupon, on January 4, 1879, then being citizens of Rhode Island, filed the present bill, in which, as finally amended, they set out the various provisions of the will and codicils of Samuel Colt, heretofore recited, and their claims thereunder as the children of Christopher Colt, their mother joining with them, as assignee and representative of the share of one deceased. They set out that, up to the time of filing the bill, they had only received from the estate of the testator the following, to-wit: One hundred shares each of stock, legacies given to them under the will; 460 shares of the residuary stock in respect of said legacies of 100 shares each, and the accumulations thereon; $2,500 gross legacies, and the residuum thereon; said 500 shares of stock and dividends thereon given in trust for them in the codicil; which last had been paid over to them on January 11, 1873, excepting such portions of the accumulations thereon as had been included in payments made by the trustees to some of them for purposes of education during their minority. But they claimed that in addition they were entitled to receive the 574 26-31 shares of stock, still in the hands of the executors, in which James B. Colt had a life estate, and so far as any of said residuary stock and the accumulations thereon, rightfully belonging to them, under a proper construction of the will, had been transferred to the executors personally or distributed to others, parties defendant to the bill, that the equities between them should be adjusted by the court so as to make good and restore to them the amount of stock rightfully belonging to them under the will and codicils, with the accumulations thereon; and this they claimed to be such proportion of the entire original residuary stock as the 500 shares given them in the codicil bears to the whole amount of other legacies given in said will and codicils, and such proportion of the 574 26-31 shares which the executors held, subject to the life estate of James B. Colt, deceased, and now for distribution, upon the basis of their right therein as owners of the 500 shares, and of the 100 shares each, given them in the will, making 900 shares in all.

Referring to the proceedings and decrees of the superior court and supreme court of errors of Connecticut, the bill insists that the complainants are not bound or barred thereby for these reasons: (1) Because they were minors under the age of 21 years, not represented by a guardian ad litem, their general guardian, although made a party for that purpose, having no power or authority to represent them. (2) Because the question as to their rights in respect of the legacy of 500 shares, given to the executors in trust for them, could not be considered or passed upon until the period of payment and division, when the youngest became of age. (3) Because the said Elizabeth Hart Colt, Richard D. Hubbard, and Richard W. H. Jarvis, trustees, under the will and codicil for them, were not summoned to appear in said proceedings in their capacity as said trustees, and entered no appearance in that capacity in their behlaf, and employed no counsel to appear in their behalf as such trustees, and no issues were made up by said trustees in volving the rights and interests of the children in and to the residuary stock. (4) Because, if the appearance of said persons as executors is deemed to be equivalent to their appearance as trustees, they in fact opposed and did not maintain the claim of the complainants as they should have done. (5) Because Mrs. Theodora G. Colt, on account of her inexperience and ignorance of such matters, and her belief that the executors were charged with the duty of defending the rights of the children, and were doing so, neglected to employ counsel on their behalf to protect their interests.

For similar reasons the complainants also claim that the settlements with the executors and trustees, by them, and in the probate court, are not conclusive; and pray for an account and a transfer to them of the stock which they are entitled to under the will and codicils, with the accumulations thereon, and for general relief.

The case was put at issue by answers and replications, and was heard upon pleadings and proofs; the final decree, brought here by this appeal, denying all relief to the complainants, (Colt v. Colt, 19 Blatchf. 399,) to whom, however, was awarded the same proportion of the 574 26-31 shares, now fallen into the residuum for ultimate distribution by the death of James B. Colt, to that given to them in the residuum distributed by the decree of the superior court of Connecticut, viz., to each of the complainants 100-4150 of the said 574 26-31 shares. The decree declared:

'That the said plaintiffs, Le Baron B. Colt, Samuel P. Colt, Theodora G. Colt, assignee, Frank E. De Wolf, and Isabella D. W. Colt De Wolf, are not entitled to any other or further interest in the estate of said Samuel Colt, as claimed in and by their said bill of complaint, than their above proportions of said 574 26-31 shares of said stock and dividends, under the said will of said Samuel Colt.

That especially the said plaintiffs are not entitled to any residuary stock of said company, or dividends thereon, under said will, by virtue of the gift of five hundred shares of stock, as prayed in said bill, or to any interest in the dividends made upon the said 574 26-31 shares, which accrued during the life of said James B. Colt.'

[Argument of Counsel from pages 575-577 intentionally omitted]

MATTHEWS, J.

title: Colt v. Colt


text: Talk:Colt v. Colt

title: Talk:Colt v. Colt


text:
Colt v. Colt/Opinion of the Court

The first inquiry upon this appeal manifestly is as to the effect to be given in this suit to the decree of the superior court of Connecticut; for if, as set up and claimed by the appellees, it is an estoppel by record, the matter of the bill is res adjudicata, and we cannot open it. And in considering the grounds on which it is sought to repel the bar of this decree, we must disregard at once all that do not attack the jurisdiction of the cou t over the cause or the parties. It cannot be assailed collaterally for mere error. It follows, therefore, that we cannot notice the allegation that the appellants were minor defendants, for whom a general guardian only, and not a guardian ad litem, appeared to defend; for the infants, having been properly served, were before the court, and are bound by its action, even if erroneous; the failure to appoint a guardian ad litem, at most, is error merely, and does not defeat the jurisdiction. What was the proper method of proceeding against defendants, whether by general guardian or guardian ad litem, is a question local to the law of the jurisdiction, and, in the proceeding under review, was passed on by the state court. It found in the decree that 'the said minors were duly represented by their guardians,' and that finding cannot be questioned collaterally, as it is not a question of jurisdiction. Coit v. Haven, 30 Conn. 190; Christmas v. Russell, 5 Wall. 290; Thompson v. Whitman, 18 Wall. 457. It seems to be in accordance with the general practice in Connecticut for a general guardian to be made a party and to defend for his ward, and that, in such cases, the appointment and appearance of a guardian ad litem are not necessary. Reeve, Dom. Rel. 267; 1 Swift, System, 217; 1 Swift, Dig. 61; Wilford v. Grant, Kirby, 114. We dismiss, also, without further remark, those grounds of objection which seem to proceed upon some supposed breach of duty or trust on the part of the executors and general guardian in not making proper defense. The bill does not charge any such breach of trust, or seek relief on that ground; and any suggestions of that character cannot affect the integrity and effect of the decree of the superior court. The objection that no question could be passed upon in that case affecting the rights of the complainants to the interest claimed by them in the residuary stock, because the time for the actual enjoyment of the legacy was postponed by the will until the youngest attained the age of majority, is equally untenable and has not been insisted upon. The interest was vested and the question of distribution in right, if not in possession, was before the court.

This leaves, as the single ground on which the estoppel is opposed, that the executors, who by the will were trustees of the 500 shares bequeathed to the complainants, were not parties to the cause, nor before the court in their capacity as trustees, but only as executors; that, consequently, the title and estate held by them as trustees were not represented by any one competent to do so, and that, consequently, the decree, not binding the legal title of the trust estate, cannot operate upon the beneficial interest of the cestuis que trust.

This argument proceeds upon the assumption that, by the terms of the will, the natural persons who were appointed as executors of the will were also, but with a distinct title, made trustees for the appellant of the legacies given for their benefit; that there was vested in these trustees a separate and independent legal title and estate in the subject of the legacies, as much so as if they had been different natural persons; that that title and estate could not be affected by any judicial proceedings to which they were not parties as such trustees; and that the beneficial interest of the appellants is equally protected, as it was for that very purpose that the legal estate was vested in others as their trustees; and that, consequently, the decree set up as an estoppel is not an adjudication between the same parties as are now before the court in the present suit.

The language of the original bequest of the 500 shares of stock is: 'I also give and bequeath to my executors and their successors in said office, * *  * in trust for the issue of said James B. Colt, lawfully begotten, the profits and dividends thereof to be applied to the education of his said issue, so far as the same may be necessary for that purpose, until the youngest surviving of said issue shall have reached the age of twenty-one years, when said stock and all accumulations thereof, if any, shall go to said issue, in equal proportions, as an absolute estate.' And the codicil, which revokes that bequest, gives the same property 'to the other children of my said brother, *  *  * to have and to hold to said other children of the said Christopher in equal proportions. This last bequest is in trust for said children, and the property hereby bequeathed is to be held by my said executors for said children in the same manner and subject to the same limitations as are provided in said original will in the bequest to the children of the said James B. Colt,' etc.

We have no difficulty, notwithstanding the language of this bequest, giving the property, in the first instance, directly to the children, in holding that it creates a trust for their benefit; but we have as little in holding, both as to it and the original bequest which it displaced, that the trust constituted was vested in the executors, in their official capacity as such, so that, in case one or all of them had at any time ceased to be executors, he or they would, at the same time, have ceased to be trustees; and that, in case a vacancy in the office of either of the executors had occurred and been filled, as provided in the will, by the appointment of a successor by the remaining executors, the trust would have devolved upon the new executors, virtute officii, so that the executors for the time being would always be the trustees, and so that whatever in their official capacity, as executors, they did in respect to the subject of this legacy, is to be imputed to them also, in their character as trustees, and equally affected and bound the trust and its beneficiaries. The 500 shares came into their hands as executors. It remained there for the general trusts of the administration of the estate until they were fully served. The possession of them, thereafter, the law imputed to them still as executors, but in trust for the special purposes, to which, by the will, they were appropriated. There was no change of possession; there was no change of the legal title; there was but a succession of uses, according to the terms of the will. They continued to hold this stock as executors, although in trust, until its actual payment to the legatees.

In the original bequest to the children of Christopher Colt in the will, of annuities for education and support during minority, and 100 shares of stock payable on arriving at age, there are no words creating a trust; and yet the executors, in the mean time, were bound to them, in respect to these benefits and interests, as executors, and yet in trust, quite as much as they were, in respect to the 500 shares, by the words of that bequest. As long as personal property is held by executors as part of the estate of the testator, for the payment of debts or legacies, or as a residuum to be distributed, they hold it by virtue of their office and are accountable for it as executors; that liability only ceases when it has been taken out of the estate of the testator and appropriated to and made the property of the ''cestui que trust. Bond v. Graham, 1 Hare, 482, 484; Arthur v. Hughes'', 4 Beav. 506; Penney v. Watts, 2 Phil. Ch. 149; Hall v. Cushing, 9 Pick. 395; Dorr v. Wainwright, 13 Pick. 328; Towne v. Ammidown, 20 Pick. 540; Newcomb v. Williams, 9 Metc. (Mass.) 525; Conkey v. Dickinson, 13 Metc. (Mass.) 51; Prior v. Talbot, 10 Cush. 1; Miller v. Congdon, 14 Gray, 114; Ad. Eq. 251. 'And it may be here observed,' says Williams, Ex'rs, p. 1796, pt. 4, bk. 2, c. 2, § 2, 'that when personal property is bequeathed to executors, as trustees, the circumstance of taking probate of the will is, in itself, an acceptance of the particular trusts. Therefore, where the will contains express directions what the executors are to do, an executor, who proves the will, must do al which he is directed to do as executor, and he cannot say that, though executor, he is not clothed with any of those trusts.' Lewin, Trusts, 156.

But, in whatever sense the executors were trustees for the appellants, what was the subject and scope of their trust, and of their duties as trustees? It embraced, it will be said, the 500 shares of stock bequeathed by the codicil. In respect to that their duties were defined. They were to hold it, collect the profits and dividends, and apply them to the education of the children while under age, and divide and pay it to them when they attained their majority. And in any litigation, involving the title of possession of that specific stock, which had been segregated from the body of the estate and appropriated to the uses of the trust, it might well be that the executors, in their distinct capacity as such trustees, were necessary parties, bound to protect the trust estate and property, without whose presence any judicial determination would be nugatory. How far in such a case their presence as parties is formal for the mere purpose of binding the legal title, or how far it is essential so as to impose upon them the active duty of defense, must depend upon the nature and terms of the trust, and the circumstances of particular cases. Mr. Calvert, in his work on Parties, (page 283,) says: 'The general inference to be derived from those cases, in which strangers file bills adversely to property held in trust, is that the cestuis que trust are necessary parties, and ought to have an opportunity of appearing in defense of their rights. Indeed, that it is the main duty of trustees in these cases to take care that all the cestuis que trust are before the court; this duty performed, they may abstain from taking part in the argument, and leave the cestuis que trust to carry on the contest.' Holland v. Baker, 3 Hare, 73. But the trust supposed did not extend to whatever else under the will the beneficiaries chose to claim; it certainly did not extend to the residuary stock, at that time undistributed. That was still in the hands of the executors, as such; and, in respect to it, they were under no duty to the appellants, other than that which they owed to all other legatees claiming an interest in it. They could not, with propriety, take part with one against another, for of that they were trustees for all who by law were entitled to share in it. The most that could be required of them would be that, upon every question involved in the distribution, opportunity should be given for each legatee to obtain the judgment of the court upon his claims. It would have been competent and quite proper for the executors, when James B. Colt preferred his claim to share in the residuary stock, to have filed a bill in equity to obtain a construction of the will and the advice of the court. In that they would have been complainants, as executors. They would have made all other legatees and distributees, or those claiming to be entitled as such, parties defendant. They could not make themselves defendants, as trustees; and they could not file the bill as complainants in a double character and for different purposes, and represent inconsistent interests; although they could, as executors and complainants, set forth whatever case existed, with all its questions and claims, in which they might have inconsistent interests, officially and personally, bringing themselves before the court in every character in which they had an interest to assert or defend, and all others beneficially interested in the subject-matter of the controversy. Their duty would have been, in such a case, fully discharged, if, as was done by James B. Colt, in the proceedings in question, the appellants had been summoned with their guardian, and, upon a fair statement of the case, their interests had been placed under the protection of the court, acting according to the forms of equity procedure. Nothing more could be required, as nothing more was needed for effectually securing the substantial justice of a full and fair hearing and determination for each party in his own right. In the case as it was made they were present as executors of the will, having possession of the undistributed residuum of stock, asking the court for its judgment whether they should hold any part of it, and, if any, how much as trustees for the appellants, all parties in interest being before the court and heard, or with the opportunity to be heard; in the case of the appellants, by guardian or counsel. The subject-matter of the litigation was not any trust estate in property held by the executors for the appellants. It was the residuary stock, and the respective rights and interests of all the legatees in its distribution. The executors were not trustees for the appellants of their claim to share in this residuum, in the sense of being bound to assert it adversely to all others, for whom equally they were trustees of the residuum, although that claim was founded on the interest of the appellants in the 500 shares which the executors did hold for them in trust. The very question was whether they had a corresponding interest in the residuum. If it should be judicially determined that they had, then, too, that interest would be held thereafter by the executors for them in trust as the other shares. But no such trust could arise until their right was established. And the executors were not bound, as against other legatees, to assume the burden of establishing its existence; much less were they at liberty to assume its existence before it was established. Their duty, both as trustees and executors, was fully performed when they invoked the judgment of the court, in the proceeding as framed, in the presence of all the parties beneficially interested. They were present also as executors, and therefore as trustees, so far as the determination and judgment of the court might render that necessary or important; for if that judgment had sustained the claim of the appellants, it would have been a decree that the executors should hold the share of the residuary stock awarded to them in trust for them according to the terms of the will. It was, however, the other way, and declared that as to the matter in dispute the executors were not their trustees. That judgment, pronounced and acted upon, in our opinion is conclusive as an adjudication in the present litigation, and precludes inquiry into the merits of the original claims and questions which it was intended to adjust and end. For that reason the decree of the circuit court is affirmed.

title: Colt v. Colt/Opinion of the Court


text: Talk:Colt v. Colt/Opinion of the Court

title: Talk:Colt v. Colt/Opinion of the Court


text:
Mobile Railway Company v. Jurey

[Syllabus from pages 584-585 intentionally omitted]

[Statement of Case from page 585 intentionally omitted]

David Clopton and ''Thos. G. Jones'', for plaintiff in error.

[Argument of Counsel on pages 585-586 intentionally omitted]

D. S. Troy, H. C. Tompkins, and Henry C. Semple, for defendants in error.

Mr. JUSTICE WOODS delivered the opinion of the court.

title: Mobile Railway Company v. Jurey


text: Talk:Mobile Railway Company v. Jurey

title: Talk:Mobile Railway Company v. Jurey


text:
Mobile Railway Company v. Jurey/Opinion of the Court

The defendants in error, Jurey and Gillis, brought this action for the use of the Factors' & Traders' Insurance Company against the plaintiff in error, the Mobile & Montgomery Railway Company, to recover $12,000 for the failure of the latter to deliver certain cotton which had been placed in its possession as a common carrier. The complaint, which was drawn according to the form prescribed by the Code of Alabama, was as follows:

"The plaintiffs claim of the defendant the sum of twelve thousand dollars as damages for the failure to deliver certain goods, viz., one hundred and ninety-seven bales of cotton, weighing ninety-six thousand nine hundred and thirty-six pounds, received by the defendant, as a common carrier, to be delivered to the plaintiffs at New Orleans, La., for a reward, which it failed to do."

The railroad company pleaded the following pleas:

"1. The defendant for answer to the complaint says it is not guilty of the matters alleged therein.

"2. For further answer to the complaint the defendant says that the plaintiffs, the said Jurey and Gillis, were paid the damages for recovery of which this suit is brought, before the action was commenced."

The plaintiffs demurred to the second plea. The demurrer was sustained. The cause was then tried on an issue joined on the first plea, and resulted in a verdict and judgment for the plaintiffs for $19,344.25. The defendants have by this writ of error brought the judgment under review.

All the evidence in the case is set out in the bill of exceptions taken at the trial. It tended to show the following facts: The cotton mentioned in the complaint was delivered at Montgomery, Alabama, by the defendants in error, Jurey & Gillis, to the plaintiff in error, the railroad company, to be transported to New Orleans, and there delivered to the shippers. The cotton consisted of 264 bales. The train upon which it was shipped was made up as follows: There were eight or ten box cars next to the engine; behind these were four flats loaded with the cotton, not covered by tarpaulins; and next to them and last of the trian, was a cab car in which the conductor rode. There were two men with buckets of water, besides the conductor and brakemen, to watch the cotton. While running down grade at about 20 miles an hour, and when the engine was not emitting any sparks, the signal to halt was given by the bell, and the cotton was discovered to be on fire. Every effort was made to stop the train as soon as possible, and, when this was done, the hands on the train did what they could to save the cotton; but the fire was too hot, and the burning cars and cotton were consumed. The woods, through which the train was running when the fire occurred, were on fire, and the woods were frequently burning along the defendant's road at that time of the year.

It further appeared that all the cotton loaded on the platform cars, consisting of 197 bales, was consumed and, of course, never delivered to Jurey & Gillis.

The contract for the transportation of the cotton was made by Jurey with T. K. Scott, the agent of the railroad company in Montgomery. Jurey testified: 'I arranged with Scott to take the two hundred and sixty bales to New Orleans for two dollars per bale. When the cotton was ready for shipment and hauling to the railroad depot I again visited Mr. Scott, at the company's office in Montgomery, in order to ascertain when my risk ceased and that of the company began, and Scott answered that soon as the cotton was delivered on the railroad platform the cotton would be at the risk of the company.' Jurey further stated: 'I contracted with the railroad company, through its agent, Mr. Scott, to deliver the cotton in New Orleans for two dollars per bale, with the distinct understanding that it was at the railway company's risk as soon as delivered on its platform at Montgomery. After the cotton had been destroyed by fire I saw the bill of lading for the first time, and noticed that risk by fire was excepted. I immediately went to Mr. Scott and called his attention to it, and that such was not our agreement. The bill of lading was obtained by Mr. C. Hall, the broker in the premises. I paid an outside rate of freight in consideration of having the cotton transported without any exceptions or conditions.' He further stated as follows: 'We have been paid by the Factors' & Traders' Insurance Company, of this city, (New Orleans,) by reason of its having been covered under our open policy, and this suit is for the use and benefit of that company as subrogee of our rights, because we reinsured the cotton in that company notwithstanding that defendant had guarantied its delivery.' Scott testified that, while the cotton was being delivered on the railroad platform at Montgomery, and before the signing of the bill of lading, Jurey asked him if the railroad company would be responsible in the event the cotton was burned on the platform or in the cars, and he replied it would be in either event. Crenshaw Hall testified that he was a cotton broker in Montgomery, and acted for Jurey in delivering the cotton at the railroad company's depot; that he made no agreement and had no understanding with the railroad company in regard to the rate of freight, but simply sent the cotton to the depot by orer of Jurey; Jurey told him that he himself would make the contract with the railroad company, as he thought he could get better rates. When the cotton was all delivered at the depot, witness received a bill of lading therefor. When the bill was delivered to him, Jurey, according to his recollection, was in the country, 10 miles from Montgomery, and did not return until news had been received of the burning of the cotton. The bill of lading was signed in the handwriting of M. H. Sayer, a freight clerk at the depot of the railroad company in Montgomery. It was as follows:

'MOBILE AND MONTGOMERY RAILWAY COMPANY.

'Received, from C. Hall, two hundred and sixty-four (264)     bales cotton, _____ of which are in bad order, marked as      stated below, and consigned to Jurey & Gillis, to be tr      nsported and delivered to same, New Orleans, at the rate of      _____. And, in consideration of above rate, it is agreed upon     and distinctly understood that the shipper releases the      Mobile & Montgomery Railway Co. and connections from all      liabilities for any loss or damage that may occur from the      bursting of ropes and bagging, old damage, wet, or from fire      while upon their roads.'

Then followed a statement of the number of bales of cotton and the marks. At the foot of the bill were the words and figures: 'Frt. $2.00 bale.'

The court, of its own motion, among other instructions, gave the jury the following: 'That the ground taken in argument by counsel for the railroad company was not the law; to-wit, if Jurey & Gillis, before the commencement of the suit, had been paid by the Factors' & Traders' Insurance Company, as insurers, paying the loss it had insured against, and if Jurey & Gillis had no interest in the recovery, then the insurance company was the real plaintiff, and the burden of proof was on it to show the jury, by satisfactory evidence, how much it had so paid; and that if it failed to do so, or to give the jury evidence to enable them to determine satisfactorily what its loss or damage was, then nothing more than nominal damages could be recovered.' The court further charged the jury, of its own motion, that if the plaintiffs were entitled to recover, the measure of the damages would be the value of the cotton at New Orleans, where it was to have been delivered, together with interest on said sum so ascertained, at the rate of 8 per cent. per annum, from the time when the cotton ought to have been delivered. The court, at the instance of the plaintiff's counsel, gave the following instruction: 'That the paper read in evidence by the defendant, as a bill of lading, contains no restriction upon the liability of the defendant as a common carrier.'

The defendant asked the court to give the jury the following instructions: '(2) If the jury find from the evidence that Jurey & Gillis insured said cotton in and by the Factors' & Traders' Insurance Company, for whose use this suit is brought, then, upon the loss of the cotton by fire, and payment of the insurance money by the insurance company to Jurey & Gillis, the insurance company was subrogated to the rights of Jurey & Gillis, and can maintain a suit in the name of Jurey & Gillis for their use to recover the amount paid by them to Jury & Gillis; but upon these facts the plaintiffs cannot recover under the complaint in this case, and if the jury find such to be the facts, they must find for the defendant. (4) If the jury find from the evidence that Jurey & Gillis were paid by the Factors' & Traders' Insurance Company (for whose use this suit is brought) before this suit was brought, for the damages sustained by Jurey & Gillis by the burning of the cotton, then the plaintiffs cannot recover in this action and under the complaint in this case.' The court refused to give either of these instructions.

The first assignment of error argued by the counsel for plaintiffs in error relates to the admission in evidence of the testimony of Jurey and Scott, in respect to the terms of the contract by which the railroad company undertook to transport the cotton of the defendants in error to New Orleans. The contention is that the bill of lading was the contract, and, being in writing, no parol evidence could be received to vary its stipulations. Before this rule can be applied the contract in writing must be shown to be the contract of the parties. One of the vital questions in the case was, what was the contract between the parties? No particular form or solemnity of execution is required for a contract of a common carrier to transport goods. It may be by parol, or it may be in writing; in either case it is equally binding. ''Amer. Transp. Co. v. Moore'', 5 Mich. 368; Shelton v. Merchants' Dispatch T. Co. 59 N. Y. 258; Roberts v. Riley, 15 La. Ann. 103. The defendants in er or insisted that the contract between them and the railroad company was by parol; that it was made between Jurey for the defendants in error, and by Scott for the railroad company, and denied that the bill of lading was the contract, and alleged that it had never been delivered to the defendants in error, but only to Hall, who was not authorized to make a contract for them. It is plain, upon this statement of the controversy, that evidence of the parol contract was perfectly competent, and it was a question to be decided by the jury whether the understanding, as detailed by the witnesses, or the bill of lading expressed the agreement of the parties. The evidence that the contract was by parol, and was not the contract expressed in the bill of lading, came from Jurey, one of the defendants in error, and from Scott, the agent of the plaintiff in error, between whom it was made, and was not contradicted. The contention that this evidence should have been excluded, is certainly not based on any solid ground. There is nothing in this assignment of error for which the judgment should be reversed.

The next contention of the plaintiffs in error is that the court erred in instructing the jury 'that the paper read in evidence by the defendant as a bill of lading contains no restriction upon the liability of the defendant as a common carrier.' It is insisted that the purport of the charge is that, independent and irrespective of the parol evidence, and upon its face, the contract contains no restriction. But such is evidently not the meaning of the instruction, because the words of the bill of lading clearly import an exception to the liability of a common carrier. What the court must have meant was that, in view of the circumstances under which the bill of lading was executed, as detailed by the uncontradicted evidence of the witnesses, taken in connection with the fact that the rate of freight, which is stated to be the consideration for the exception, is left blank in the body of the bill of lading. it was not the intention of the parties to the contract that the railroad company should be exempted from any of the liabilities of a common carrier. The court was called upon to construe a paper writing. It must be conceded that the writing was open to construction. It was the right and duty of the court, in order to decide upon its meaning, to look not only to the language employed, but to the subject-matter and surrounding circumstances. Barreda v. Silsbee, 21 How. 161; Nash v. Towne, 5 Wall. 689; Canal Co. v. Hill, 15 Wall. 94. When, therefore, the court was required to state authoritatively to the jury the meaning of the bill of lading, it cannot be presumed that it shut its eyes to the strong light thrown on it by the facts attending its execution, or that its instruction is to be interpreted as applying only to the words of the contract. It must be presumed that the court used all proper means to ascertain the true meaning of the bill of lading, and we think its interpretation, in view of all the circumstances of the case, was the right one.

The next ground upon which the plaintiffs in error ask a reversal of the judgment is the refusal of the court to give the charges numbered 2 and 4 as requested by the plaintiff in error. The argument in support of this assignment is as follows: Section 2891 of the Code of Alabama provides: 'In all cases where suits are brought in the name of the person having the legal right, for the use of another, the beneficiary must be considered as the sole party in the record.' In no part of the body of the complaint is there any averment showing in what way and by what means the Factors' & Traders' Insurance Company acquired an interest in this suit or a right to bring this action in the name of the owners of the cotton for their use, or that they have any interest in the suit; and as the evidence shows that the Factors' & Traders' Insurance Company acquired their right to bring a suit against a carri r by having paid their insurance liability to Jurey & Gillis, which was a secondary liability, the carrier being primarily liable, the form of complaint adopted in this case was not sufficient; that the complaint should state with certainty the facts showing the right of the insurance company to bring the action and the amount of the recovery to which they are entitled. The ground of their contention is that the recovery must be limited to the amount paid by the insurance company to the defendants in error, and that the burden is on the insurance company to prove what sum was so paid. This is an attempt to reverse the judgment of the circuit court on a question of pleading. The record in the case, in our opinion, shows that the plaintiff in error made a contract for the transportation of the cotton of the plaintiffs, with no exception of the carrier's common-law liability; that it did not deliver the cotton, for the value of which this suit is brought; that the cotton was destroyed while in the possession of the plaintiff in error, and was a total loss; and that the loss has been paid to the defendants in error by the insurance company. Under these circumstances, as it plainly appears on the face of the record that the judgment of the circuit court was right, it would not be reversed for an error which could not possibly have worked any injury to the plaintiff in error. Brobst v. Brock, 10 Wall. 519; Decatur Bank v. St. Louis Bank, 21 Wall. 294.

But we are of opinion that the ground upon which this assignment of error is based is not tenable, which is that the recovery must be limited to the amount paid by the insurance company to the defendants in error, and that the burden is on the insurance company to show how much it paid. Although the suit is brought for the use of the insurer, and it is the sole party beneficially interested, yet its rights are to be worked out through the cause of action which the insured has against the common carrier. The legal title is in the insured, and the carrier is bound to respond for all the damages sustained by the breach of his contract. If only part of the loss has been paid by the insurer, the insured is entitled to the residue. How the money recovered is to be divided between the insured and the insurer is a question which interests them alone, and in which the common carrier is not concerned. The payment of a total loss by the insurer works an equitable assignment to him of the property, and all the remedies which the insured had against the carrier for the recovery of its value. Mason v. Sainsbury, 3 Doug. 61; Yates v. Whyte, 4 Bing. N. C. 272; Clark v. Hundred of Blything, 2 Barn. & C. 254; ''AEtna Ins. Co. v. Tyler'', 16 Wend. 385; ''Atlantic Ins. Co. v. Storrow'', 5 Paige, 285.

This rule is so strictly applied that when two ships belonging to the same owner came into collision with each other, and one of them sank and became a total loss, it was held that the insurers of the lost ship did not, upon their payment of a total loss, become entitled to make any claim for the loss against the insured as the owner of the ship in fault in the collision, for their right existed only through the owner of the ship insured, and not independently of him, and as he could not have sued himself they could have no remedy against him. Simpson v. Thompson, 3 App. Cas. 279. See, also, ''Globe Ins. Co. v. Sherlock'', 25 Ohio St. 50.

In Gales v. Hailman, 11 Pa. St. 515, it was held that a shipper who has received from the insurer the part of the loss insured against, might sue the carrier on the contract of bailment, not only in his own right for the unpaid balance due himself, but as trustee for what has been paid by the insurer in case of the carrier, and upon the trial of such a case the court will restrain the carrier from setting up the insurer's payment of his part of the loss as partial satisfaction.

Insurers of a ship which has been run down and sunk by the fault of another ship, are, upon their payment of a total loss, subrogated to the right of the insured to recover therefor against the owners of the latter vessel, and if their policy was a valued one, their payment of this value will give them the whole spes recuperandi, and the right to the whole damages, though the insured vessel was, in fact, worth a larger sum than the valuation named in the policy. ''North of England Ins. Ass'n v. Armstrong'', L. R. 5 Q. B. 244. See, also, Clark v. Wilson, 103 Mass. 227.

The authorities above cited which relate to marine policies apply, as well as the other cases cited, to the question in hand, for in Hall v. Railroad Cos. 13 Wall. 367, it was held that 'there is no reason for the subrogation of insurers by marine policies to the rights of the assured against a carrier by sea which does not exist in support of a like subrogation in case of an insurance against fire on land.'

We are of opinion, therefore, that the recovery in this case might properly have been, as it was, for the entire loss sustained by the nominal plaintiffs, without regard to the amount of insurance paid. The only effect of the provision of section 2891, Code of Alabama, is to make the party for whose use the suit is brought dominus litis, and to give it the same rights as if it were the assignee of the cause of action. Its recovery is on the nominal plaintiff's cause of action. But as there is no formal assignment, and the suit is in the name of the nominal plaintiff, the party beneficially interested is only bound to establish the cause of action, without proof of his equitable right to the recovery.

It follows from these views that the complaint was sufficient for the case as presented by the evidence, and that the evidence tended to sustain the case stated in the complaint.

The next ground for reversal argued by the plaintiff in error is that the circuit court erred in sustaining the demurrer to the second plea. It has already been stated that, under the Code of Alabama, where a suit is brought in the name of the person having the legal right for the use of another, the beneficiary must be considered as the sole party to the record. In view of this provision of the statute, in a suit brought by one person for the use of another, a plea of payment which does not allege a payment to the beneficial plaintiff, or a payment to the person holding the legal title, before the person holding the beneficial interest acquired his right, is clearly bad. The plea which was adjudged insufficient makes neither of these averments, and was therefore bad. The object of the plea seems to have been to raise the question whether the payment by the insurer to the insured, for property lost while in the possession of a common carrier, discharged the liability of the common carrier. If the plea was based on any such theory, the views we have expressed show that it did not present a bar to the present action.

The last assignment of error which we shall notice is based on the charge of the court, to the effect that 'the measure of damages would be the value of the cotton in New Orleans, where it was to have been delivered, together with interest on said sum at 8 per cent. per annum from the time when the cotton ought to have been delivered.' The error alleged is that the rate of interest should have been placed at 5 per cent., which is the legal rate in Louisiana, where the contract was to be performed, and not at 8 per cent., which was the legal rate in Alabama, where the contract was made.

Conceding that the charge in respect to the rate of interest was erroneous, the judgment should not be reversed on account of the error. The charge contained at least two propositions: First, that the measure of damages was the value of the cotton in New Orleans, with interest from the time when the cotton should have been delivered; second, that the rate of interest should be 8 per cent. It is not disputed that the first proposition as correct. But the exception to the charge was general. It was therefore ineffectual. It should have pointed out to the court the precise part of the charge that was objected to. 'The rule is that the matter of exception shall be so brought to the attention of the court, before the retirement of the jury to make up their verdict, as to enable the judge to correct any error, if there be any, in his instructions to them.' Jacobson v. State, 55 Ala. 151. 'When an exception is reserved to a charge, which contains two or more distinct or separable propositions, it is the duty of counsel to direct the attention of the court to the precise point of objection.' South & N. A. R. Co. v. Jones, 56 Ala. 507. So, in Lincoln v. Claflin, 7 Wall. 132, this court said: 'It is possible the court erred in its charge upon the subject of damages in directing the jury to add interest to the value of the goods. * *  * But the error, if it be one, cannot be taken advantage of by the defendants, for they took no exception to the charge on that ground. The charge is inserted at length in the bill. * *  * It embraces several distinct propositions, and a general exception cannot avail the party if any one of them is correct.'

On these authorities we are of opinion that the ground of error under consideration was not well saved by the bill of exceptions. Many other grounds of error have been assigned, though not argued by counsel for the plaintiff in error. But what we have said covers most of them. The others are not well taken. We find no error in the record. The judgment of the circuit court is therefore affirmed.


text: Talk:Mobile Railway Company v. Jurey/Opinion of the Court


text:
Gibbs Sterrett Manufacturer's Company v. Brucker

W. P. Lynde, for plaintiff in error.

''Edwd. S. Bragg'', for defendant in error.

WOODS, J.


text: Talk:Gibbs Sterrett Manufacturer's Company v. Brucker