text:
Stimpson v. Woodman/Opinion of the Court

Taking the evidence as stated in the bill of exceptions, it will be seen that the only difference between the prior machine and the plaintiff's, in its combination and arrangement, and in its working and effect upon the leather, is that the metallic roller in the former had a smooth, and in the latter a figured surface. In all other respects the two machines were the same. But, as also appears in the bill of exceptions, this figured revolving roller was old, and the use of it in pebbling leather was also old and well known. Neither the plaintiff nor the defendant could claim any right to it as inventors. The same pebbled grain or finish, as described in plaintiff's patent, had already been produced on leather by subjecting it to pressure while rolling over the table on which the leather was placed. But this pressure was produced by means of hand devices. The field of invention was open to any person to construct new devices or machinery by means of which to operate this old instrument in 'pebbling leather,'-in the language of the patentee in this case, 'so as to accomplish the object desired with greater rapidity and cheapness.' And this the plaintiff would have accomplished by his machine if he had not been anticipated. But the case admits that evidence was given tending to show that the device or machine he has patented for the purpose, so far as used by the defendant, was the same as the Green machine, which was prior in date.

The prayer for the second instruction to the jury prayed for by the defendant is somewhat involved and obscured by too much verbiage; but when analyzed and understood, it was clearly warranted and supported by the evidence, and should have been given. In substance it is, if the jury should find that the figured roller in the plaintiff's machine was not material to the mechanical action of the roller in the combination and arrangement of the machinery by which it was moved, the leather supported, and the pressure made; and if they find that before the plaintiff's a machine was known and in use similar to his, except that the surface of the roller was smooth; and if they find that before the plaintiff's invention figured rollers were known and used in other machines for the same purpose, then the plaintiff's first claim was void. In other words, and, in short, if the plaintiff's machine had been anticipated in every part of its construction except the figures or designs on the roller, which roller was old, he was not entitled to recover. This instruction was refused, which, for the reasons already stated, we think was error.

There is, also, another ground upon which we think this instruction should have been given. Assuming the plaintiff to have been anticipated in the construction of his machine in every part of it, except that the prior machine used a smooth revolving roller, and the plaintiff a figured one, but which figured roller had been used for pebbling leather by pressure, and was well known, all of which the jury would have been warranted in finding, the engraving or stamping of the figure upon the surface of the smooth roller, or the substitution of the old figured roller for the purpose, required no invention; the change with the existing knowledge in the art involved simply mechanical skill, which is not patentable.

JUDGMENT REVERSED. VENIRE DE NOVO.


text: Talk:Stimpson v. Woodman/Opinion of the Court

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


text:
Texas v. Chiles (77 U.S. 127)

THE State of Texas filed a bill, February 15, 1867, against White, Chiles, and several others, to recover possession of some one hundred and eighty-five United States 'Texas Indemnity Bonds' for $1000 each, charged to have been illegally obtained by them. Chiles having been served, put in his answer on May 25th, 1867, in which he accounted specifically for some fifty-one of the bonds. The court decreed that the complainant was entitled to recover the possession of the bonds transferred to White & Chiles, which, at the several times of service of the process in the suit, were in the possession or control of the defendants respectively, or of any proceeds, &c., with notice of the equity; and then proceeded to determine for how many and for which bonds, or their proceeds, the defendants respectively were accountable. But no decree was entered against Chiles for either bonds or proceeds.

Mr. Durant, for the State of Texas, now made a motion on the foot of the decree for a rule on Chiles to show cause why he should not deliver to the clerk of this court twelve of these bonds, which it was charged that he had in his posession and had not accounted for.

The only proofs furnished upon which the rule was prayed for were the answer of White, a co-defendant, and a deposition of one McKinley, all in the original case, and an affidavit of one George Taylor, produced on this motion. The deposition of McKinley showed that some time in the summer of 1867 he thought he delivered to Chilest ten bonds that had been deposited with him as a banker about a year previous for a third person on certain conditions, which had not been complied with. According to the affidavit of Taylor, Chiles admitted to him that he had received of E. K. Thompson, cashier of the Branch Bank of Kentucky, two bonds, after the service of the injunction in the case, and which he said he held subject to the order of the court.

Mr. Hughes opposed the motion.

Mr. Justice NELSON, having recapitulated the facts, delivered the opinion of the court.

title: Texas v. Chiles (77 U.S. 127)


text: Talk:Texas v. Chiles (77 U.S. 127)

title: Talk:Texas v. Chiles (77 U.S. 127)


text:
Texas v. Chiles (77 U.S. 127)/Opinion of the Court

The answer of White, which is one of the proofs on which the present rule is prayed for, not being competent evidence against a co-defendant, needs no notice.

No decree was entered against Chiles for bonds or proceeds, although the same evidence was then before this court, as it respects ten of the bonds in question, as is presented in support of this motion. It would seem, therefore, that in the judgment of the court the pleadings and proofs furnished no ground, legal or equitable, for charging him personally in respect to either the bonds or proceeds.

We may add that the twelve bonds, sought to be brought before the court under the rule to show cause, founded upon the suggestion at the foot of the decree, were received by Chiles after the filing of the bill in February, 1867. The decree, in terms, limits the accounting of the defendants to bonds in their possession at the several times of the service of the process in this suit. The case, therefore, presented is not within the scope or tenor of the decree.

MOTION DENIED.


text: Talk:Texas v. Chiles (77 U.S. 127)/Opinion of the Court


text:
Wiggins v. Burkham

ERROR to the Circuit Court for the District of Indiana, in which court Burkham brought suit to recover an account against Wiggins and four other defendants.

Mr. T. A. Hendricks, for the plaintiff in error; Messrs. McDonald, Roache, and McDonald, contra.

Mr. Justice SWAYNE stated the case, and delivered the opinion of the court.

title: Wiggins v. Burkham


text: Talk:Wiggins v. Burkham

title: Talk:Wiggins v. Burkham


text:
Wiggins v. Burkham/Opinion of the Court

This is a writ of error to the Circuit Court of the United States for the District of Indiana. The action is assumpsit. The declaration contained only the common counts. The case, as shown by the bill of exceptions, is as follows: Burkham, the plaintiff, lived in Chicago, and the defendants at Hagerstown, in Indiana, distant from Chicago about 220 miles by railroad. Upon the trial, evidence was given tending to prove that the plaintiff, on or about the 16th of May, 1866, sent to the defendants by mail a written statement of the account sued upon, in the nature of an account current, and that the defendants made no objection to it till on or about the 28th of that month, when they addressed a letter to the plaintiff by mail objecting to some items of the account, but making no objection to others, to which latter items it did not appear they ever objected until after the commencement of the suit. The plaintiff asked the court to instruct the jury:

'That when an account is rendered by a creditor to his debtor, if the debtor does not, within a reasonable time after he has examined the same, make any objection thereto, his silence unexplained is an implied admission of the correctness of such account, though not conclusive evidence thereof; and if the debtor, within such time, objects to some of the items, and, during such reasonable time, makes no objection to the residue of such items, he ought, prim a facie, to be presumed thereby to admit the correctness of the items not objected to; and in both the foregoing instances the account so in whole or in part admitted, is to be deemed, in legal effect, an account stated.'

This instruction was given. The defendants thereupon asked the court to instruct as follows:

'That if the plaintiff made out his account on the 16th day of May, 1866, and then sent it to the defendants, it was within a reasonable time, if the defendants, on the 28th day of that month, by letter, notified the plaintiff of their dissatisfaction with that account.'

But the court refused to give the said instruction, and, on the contrary, then and there instructed the jury:

'That what was reasonable time for a debtor to object to his creditor's account, after its presentation to him, is a matter of fact for the consideration of the jury, and not a matter of law to be decided by the court.'

The defendants excepted to the instructions given, and to the refusal to instruct, as asked by them. This action of the court presents the only subject for our consideration. The bill of exceptions does not purport to set out all of the evidence. What other evidence was given, if any, does not appear.

The first instruction given by the court below, embraces two propositions:

1. That an account rendered, and not objected to within a reasonable time, is to be regarded as admitted by the party charged to be prim a facie correct.

2. That if certain items in an account under such circumstances are objected to within a reasonable time, and others not, the latter are to be regarded as covered by such an admission.

We see nothing objectionable in these propositions. They are in accordance with all the leading authorities on the subject.

The other exception also involves two propositions:

1. That the court refused to instruct the jury that, upon the hypothesis stated, the account was objected to by the defendants within a reasonable time.

2. That the court did instruct that what was a reasonable time was not a question of law to be decided by the court, but a question of fact for the jury.

Judge Story says: 'Between merchants at home, an account which has been presented, and no objection made thereto, after the lapse of several posts, is treated, under ordinary circumstances, as being, by acquiescence, a stated account.'

The principle which lies at the foundation of evidence of this kind is, that the silence of the party to whom the account is sent warrants the inference of an admission of its correctness. This inference is more or less strong according to the circumstances of the case. It may be repelled by showing facts which are inconsistent with it, as that the party was absent from home, suffering from illness, or expected shortly to see the other party, and intended, and preferred, to make his objections in person. Other circumstances of a like character may be readily imagined. As regards merchants residing in different countries, Judge Story says: 'Several opportunities of writing must have occurred.'

We see no objection to the rule as he lays it down, in respect to parties in the same country.

When the account is admitted in evidence as a stated one, the burden of showing its incorrectness is thrown upon the other party. He may prove fraud, omission, or mistake, and in these respects he is in no wise concluded by the admission implied from his silence after it was rendered.

If the car-time between Hagerstown and Chicago were ten hours, as is alleged by the counsel for the defendant in error, and there were 'serveral posts' between the time when the account sent to the defendants, on the 16th of May, reached them, and the 28th of that month, when they replied, the court properly refused the instruction which they asked. Whether these facts were in evidence does not appear. We are asked to take judicial notice of them. This we cannot do, however well satisfied we may be upon the subject. They should have been proved by proper testimony. But error is not to be presumed. It must be affirmatively shown. The facts in question may have been proved, and this may have been the reason of the refusal by the court to instruct as asked by the defendants. The propriety of the refusal depended upon the state of the evidence. The terms of the instruction do not necessarily imply that there were not facts in proof bearing upon the subject, besides those of which the instruction was expressly predicated. The car-time and the number of mails may have been proved or admitted. If these facts were not in proof the bill of exceptions, under the circumstances, should have so stated. It does not appear, from anything in the record, that the court erred in refusing to given the instruction. The presumption is the other way.

The proposition that what is reasonable time in such cases is a question for the jury, as laid down by the court below, cannot be sustained. Where the facts are clear, it is always a question exclusively for the court. The point was so ruled by this court in Toland v. Sprague. Where the proofs are conflicting, the question is a mixed one of law and of fact. In such cases the court should instruct the jury as to the law upon the several hypotheses of fact insisted upon by the parties.

If the evidence in the case was such as warranted the court in refusing the instructions asked by the defendants,-if there were several posts between the time of the receipt of the account by the defendants and the date of the letter objecting to it,-the court should have instructed the jury that the letter was not within a reasonable time, which is the opposite of the instruction asked. This would have been conclusive against the defendants. The error of the court in submitting the question to the jury was therefore favorable to them, and they have no right to complain.

JUDGMENT AFFIRMED.

title: Wiggins v. Burkham/Opinion of the Court


text: Talk:Wiggins v. Burkham/Opinion of the Court


text:
Clark v. Bousfield

ON certificate of division between the judges of the Circuit Court for the Northern District of Ohio, the case being this:

The Patent Act of July 4th, 1836, 'to promote the progress of the useful arts,' authorized the patenting of any 'new and useful art, machine, manufacture or composition of matter,' and gives an exclusive right to the patentee for a term of fourteen years, with a privilege of renewal for seven in certain cases, but this act did not allow a patent for mere designs.

The eleventh section of an act of March 2d, 1861, entitled 'An act in addition to an act to promote the progress of the useful arts,' extends this privilege of patent. It secures to the inventor or producer of any original design, &c.; or any new and original impression or ornament, to be placed on any article of manufacture, &c.; or any new and useful pattern, or print, or picture, to be either worked on, or printed, or painted, on any article of manufacture; or any new and original shape or configuration of any article of manufacture, not known or used before, &c., a patent for the exclusive property therein; and it gives this right for a term of years, different from the term granted by the act of 1836 to the inventor of a machine, &c.

With both acts in force, R. & A. Cross obtained, December 27th, 1864, a patent for a new and useful improvement in machines for graining pails, and other analogous uses. [See the diagram, page 135.] The nature of it, as declared by them in the schedule to the letters patent, consisted in constructing an elastic bed, containing the impression or impressions of the device to be grained upon the pail, in separate panels, each panel to be of different design, so that by moving the pail over the same the various designs would be stamped upon the pail, thus producing a pail whose staves were painted in imitation of different kinds of wood. The patentees then described the instrument or machine, which they stated to be a box, into which the elastic material, with the required designs to be grained upon the pail, is placed, and which might, according to their statement, be constructed of wood or iron, or any other suitable material, and so shaped (describing the shape minutely), that when the pail was adjusted properly upon the bed, and rolled upon and over it, the upper or larger end of the paid should follow the outer curve of the bed, and the lower or smaller should follow the interior or smaller curve with exactness and precision. 'The elastic bed,' they say, 'may present one continuous or uniform design if desired, or it may be arranged in blocks or staves, each of different designs, so that the pail grained thereon or thereby shall present the appearance of being constructed of different kinds or species of wood. The elastic bed may be composed of any suitable impressible material, as rubber or leather; but a compound of glue and molasses, such as is used for printers' rollers, is preferred.'

The patentees then described the contrivances for working the elastic bed in connection with the pail, so as to effect the graining of the latter. By this contrivance the pail, they state, is readily rolled by hand across the bed, leaving upon it the desired design or figure, or the pail may be suspended on handles, and the elastic bed itself moved beneath it, in a suitably arranged groove or track, producing the same result. The patentees then set forth their claims, the first two of which only are material:

First. 'We claim constructing the bed of the elastic material used in graining machines, in the form herein shown, substantially as and for the purposes specified.'

Second. 'We claim arranging the elastic material aforesaid, whether curved or rectangular in form, in a series of distinct staves or designs, substantially as and for the purposes herein shown and set forth.'

On a suit below, by Clark and others, assignees of Cross, the patentees, against one Bousfield, for infringement, it was suggested on behalf of the defendant that the second claim was for nothing more or other than a design to be impressed on the bed: and if this was so, that the claim would be void, as a patent could not properly contain a valid claim for a machine, and contain also a claim for a design; that the two things were patentable under different acts and for different terms of time.

The judges of the Circuit Court were accordingly divided upon the question whether this second claim in said letters patent was for anything patentable other than under the already mentioned section eleven of the act of March 2d, 1861? And if not, whether the patent was not void?

Messrs. J. Canfield and A. G. Riddle, for the plaintiff:

We admit that if this second claim is, in substance, a claim for a design, instead of a claim for a principle in an apparatus, it should have been patented under the act of 1861; but if it is for a principle in an apparatus, then we assert that it does not come under the act of 1861, but under the act of 1836. Now Judge Grier, in Corning v. Burden, has thus defined the principle patentable as a machine:

'It is for the discovery or invention of some practicable method or means of producing a beneficial result, or effect itself. It is when the term process is used to represent the means or method of producing a result, that it is patentable; and it will include all methods or means which are not effected by the mechanism or mechanical combinations. But the term process is often used in a more vague sense, in which it cannot be the subject of a patent; thus, we say that a board is undergoing the process of being planed, grain of being ground, iron of being hammered or rolled. Here the term is used subjectively or passively, as applied to the material operated on, and not to the method or mode of producing that operation, which is by mechanical means or the use of a machine, as distinguished from a process. In this use of the term it represents the function of a machine, or the effect produced by it on the material, subjected to the action of the machine. But it is well settled that a man cannot have a patent for the function or abstract effect of a machine, but only for the machine which produces it.'

This language is both concise and correct, and tested by it our second claim is for the machine which produces the effect, and not for the effect itself. In other words, it is for the machine which grains a pail in staves, which staves represent different kinds of wood, and not for the impression upon the pail, representing staves of different kinds of wood. The means of producing this effect on the pail, is our machine, which comes under the act of 1836; the effect as produced, is a design, which comes under the act of 1861, and for which we claim nothing.

Mr. George Willey, with a printed brief of Messrs. George Willey, John E. Carey, and H. S. Sherman, contra:

The nature and object of the invention, as stated in the specification, contemplated a design and the construction of a bed corresponding with the shape of the design, but as an obvious sequence or incident of the design. Nothing is claimed on the material, or box or bed or its material, nor as to form could anything be claimed in the way of invention, inasmuch as it involves the mere measurement of surface, the simplest of mechanical operations. Then it says, 'the elastic bed may present one continuous or uniform design if desired, or it may be arranged in blocks or staves, each of different designs,' meaning block or stave designs. Again, it speaks of 'different designs arranged in staves,' which is but another form of representing stave designs. Again, it speaks of the 'pail being rolled across the bed and grained in staves in imitation of various woods or marbles.' The specification does not say, series of separate pieces or blocks, but a 'series of distinct staves or designs,' and the specification speaks of 'different designs arranged in staves, impressed upon a single united mass, so as to produce the same effect as when constructed in separate blocks,' evidently treating staves and designs as synonymous or convertible, the word 'staves' meaning stave designs; so that from all these considerations it is obvious that stave designs impressed on a bed, whether curved or rectangular, for the purpose of transferring said stave designs to a pail or 'other analogous uses,' or to rectangular objects, is the substantial object or meaning of this second claim. If this be so, then the doubt suggested below is well founded and the plaintiff has no valid patent.

Mr. Justice NELSON delivered the opinion of the court.

title: Clark v. Bousfield


text: Talk:Clark v. Bousfield

title: Talk:Clark v. Bousfield


text:
Clark v. Bousfield/Opinion of the Court

It will be seen by reference to the eleventh section of the act of 1861, that if the second claim is patentable under this section, it must be a claim for an original design or impression, or ornament, or pattern, or picture, and the like, wholly irrespective of the means of producing it. The patent is simply for the design, &c., itself.

In order to understand the full meaning of this second claim, it will be useful to settle the meaning of the first, as the two are intimately connected.

The first, as we have seen, is for constructing the bed for the elastic material used in graining machines in the form shown and for the purposes specified. The patentees describe it as a box or bed, and which may be constructed of wood or iron, or of any other suitable material. This box or bed is made for the purpose of holding the elastic material, whether of rubber or leather, or the compound of glue and molasses, which is preferred. Now, the second claim is for arranging the elastic material, when placed in this box or bed, whether curved or rectangular in form, 'in a series of distinct staves or designs,' for the purpose specified, that is, for the purpose of graining pails in the variety of colors or figures described. The elastic bed may be arranged, as is stated in the specification, so as to present one continuous or uniform design, or it may be arranged in blocks or staves, each of different designs, so that the vessel shall present the appearance of different kinds of wood, as rosewood, oak, walnut, and others. It may also be constructed of separate pieces or blocks, as shown in the drawing, or the material may be a single united mass, impressed by different designs arranged in staves, so as to produce the same effect as when constructed in separate blocks. The two claims, as we see, are closely connected, and each essential to the complete construction of the instrument or apparatus, which, when put into practical operation by the contrivances pointed out in the specification, can accomplish the desired result, which result is the graining of the exterior body of the pail with a variety of colors and figures.

The learned counsel for the defendants below insists that this second claim is only an arrangement of designs, and, in a limited sense, he is no doubt right, but in its connection with the first claim, and with the machine for transferring the design to pails, it is more; it is a part of the machine or instrument, and an indispensable part; it is the elastic bed of rubber, or of leather, or compound of glue and molasses, of any arranged figure or design, that constitutes an element in the machine, and which, with the curved box and contrivances for working the instrument, produces the desired result. The figure or design is but incidental, and, as such, has no other protection than that which the patent secures to the inventor of the machine. The right to the use of the machine carries along with it the right to use the designs.

The arranged figure in the elastic bed is not the one protected by the eleventh section of the act of 1861; that is the one which is transferred to the pail or wares, where its beauty is first visible to the eye. While it remains in the elastic material it exhibits no more beauty than if engraved on stone or metal.

It may be that the inventors of the machine for impressing figures or designs upon pails or other wares would not be protected from using figures or designs, the right of property in which had been secured to the original inventor under this eleventh section, but they may clearly use any and all not thus protected. The machine in question is invented for reducing to practical use these figures and designs, and will make them profitable to the original inventors or owners of them, if they choose to employ it.

We are of opinion that the first question should be answered in the affirmative and the second in the negative.

title: Clark v. Bousfield/Opinion of the Court


text: Talk:Clark v. Bousfield/Opinion of the Court


text:
Feild v. Farrington

ERROR to the Circuit Court for the Eastern District of Arkansas, the case being this:

Feild, a resident of Little Rock, Arkansas, owning a quantity of cotton, put it, personally, on the 9th October, 1865, into the hands of Farrington & Howell, commission merchants of Memphis, Tennessee, with directions to sell it; cotton being then worth not less than 50 cents a pound. On the next day, being not on his way homeward, he telegraphed to them, 'Do not sell my cotton till I see you.' The market at this time was excited, and higher than at any subsequent time. A short time after this, Feild returned to Memphis, and being about to visit the Eastern cities, requested Farrington & Co. to make him an advance of $11,000 on the cotton, which they made him. The advance was very nearly if not quite equal to its value. He then went to the Eastern cities. According to the testimony of Farrington, by whom the business of the firm with Feild was chiefly managed, Feild, on that occasion, left the cotton 'to be sold at their discretion; but expressed great confidence in higher prices;' and according to the same testimony, on his return from the Eastern cities, approved of the course of the firm in not selling, and 'said he would appreciate it, and remember it in future.' The market was all this time rather a declining one, and the firm justified whatever of irregularity their action in not selling in the face of their quite large advance might be supposed to have, on the ground, sworn to by Farrington, 'that Mr. Feild was always represented to them as entirely solvent and able to pay his debts, and that they wished to follow his own views about the sale.' Feild, it was testified, had promised them, when making this one, further consignments.

According to the testimony of Feild, however, he gave Farrington & Co., when he was going to the Eastern cities, express instructions to sell within ten days, and to reimburse themselves for the money advanced; which according to his testimony they promised to do. Feild's testimony proceeded thus:

'I then went East, and returned in about fourteen or fifteen days to Memphis, where I only made an hour's stay on my way home to Little Rock, which I occupied in seeing the firm. Cotton had declined one cent on the pound since I had told them to sell, and I remonstrated with them for not having sold. They excused themselves by saying that they had only been acting for my interest, which excuse I accepted. I, however, renewed my instructions, and the last words I said to Mr. Farrington, on shaking hands with him, were these: 'Whatever you do, do not let the cotton fall one cent lower.'

This the witness testified was between the 25th and the 28th of October, 1865. Nothing further took place till the 16th of November following, when cotton having declined, the firm thus addressed Feild:

MEMPHIS, November 16th, 1865.

DEAR SIR: We have not sold your cotton, as the market has been dull and on the decline every day since you left. The dispatches from New York yesterday quote middling cotton about 50c., and very dull. The public dispatches quote 50@51c., while the private give 49@50. Your cotton would not, in the present market, sell here for over 43@44c. As the money market is very tight, we will be compelled to sell your cotton unless you make other shipments, or remit us as a margin in cash.

We have held on thus far to meet your views, but the declining tendency of the market induces us to write this letter. Please to let us hear from you on receipt.

Very truly, your friends,

FARRINGTON & HOWELL.

This letter Feild received, but never answered or in any way took notice of. Referring in his testimony on the trial to his receipt of it, and to his omission to answer, he said thus:

'I was surprised to learn that the cotton had not been sold. I thought the plaintiffs had made themselves liable by their neglect to sell. ''I was afraid to answer their letter, as I regarded it as a mere endeavor to obtain some admission or concession from me; and I concluded to abandon the matter, leaving them with whatever responsibility they might have incurred. Cotton had fallen in the market'', and I did not feel disposed to make myself a party to their delinquency.'

Nothing further was said or written, on either side, till August 8th (nearly nine months after the preceding letter), when cotton still declining the firm wrote again to Feild thus:

MEMPHIS, August 8th, 1866.

DEAR SIR: We have been much astonished at not bearing from you in regard to your cotton. We wrote you on the subject, and requested a reply, but have heard nothing from you. By the same mail we wrote to other parties in your city, and we received due acknowledgment. This was many months ago, date not recollected. When you left your cotton here you were not satisfied with the market, although that was about 50c. When you returned from the Northern cities you approved of our efforts to promote your interest, and that the cotton had not been sold. The price has greatly declined, and the expenses have been going on. Now let us hear your views. The cotton will not pay your account, as you know, and we ask you to remit us for the balance. According to the present market the cotton would be well sold at 32c., including internal revenue. We have now waited to meet your views until it is necessary for something to be done. Will you please write us on receipt of this, for we are anxious to hear from you?

Very respectfully,

FARRINGTON & HOWELL.

This letter the firm inclosed to one of their correspondents at Little Rock (Feild's residence), in order that it might be certainly delivered to him, and it was delivered, and the firm advised accordingly. Of this second letter Feild took no notice; stating in his testimony on the trial that he had omitted to do so for the same reason that he had omitted to take notice of the first one.

About five weeks afterwards, that is to say, on the 12th September, 1866, cotton having gradually declined from the month in which it was put into the lands of Farrington & Co. till now, they sold it all; the chief part at 30 cents a pound, and the residue at 25 and 20 cents. 'The cotton was sold at this time,' said Farrington in his testimony, 'because we had despaired hearing of Mr. Feild, who appeared to us to have abandoned it, and to have had no intention of assuming the control of it, or of paying us the amount he owed us. . . . I had but one wish,' he continued, 'and that was to act in a manner which would be satisfactory to Mr. Feild.'

Feild was immediately advised by letter of the sale, and that low as the prices obtained seemed, the sale was at the highest rates of the then market, and that the firm would send account sales and account as soon as the cotton was delivered. To this letter Feild paid no attention.

Five days afterwards, that is to say, on the 17th September, 1866, the cotton being now delivered, the firm sent the accounts, and drew for $6695, the difference between the sum due on the advance made in October, 1865, and the sum for which the cotton was now sold. Feild took no notice of this letter, and refused payment of the draft.

Whereupon in January, 1867, Farrington & Howell sued him in the court below for the balance.

On the trial the defendant asked the court to give the following instructions, to wit:

'1. If the jury find from the evidence that, after the cotton was placed in the hands of the plaintiffs, Feild gave them instructions to sell before the price should fall any lower, and that the plaintiffs failed to do so, then the plaintiffs must suffer any loss occasioned by reason of their failure to sell at that time, and Feild is entitled to a credit for the amount that the cotton would have brought if sold at the time such instructions were given.

'2. If the jury find from the evidence that the cotton was left by the defendant in the hands of the plaintiffs to sell without any specific orders as to the time and mode of sale, and that the plaintiffs had made large advances on account of said cotton, then the plaintiffs were bound to sell, in the exercise of a sound discretion, at such time and in such mode as the usage of trade might require, and to reimburse themselves for their advances out of the proceeds of the sale, and the defendant could not, by his silence, prevent the plaintiffs from making such sale; and if the jury find from the evidence that the plaintiffs did not exercise a sound discretion in the premises, and kept the cotton on hand for an unreasonable and improper length of time, then the defendant is entitled to a credit for the amount which it would have brought, if sold in accordance with the usage of trade and the exercise of such discretion.

'3. If the jury find from the evidence that the cotton was shipped, by the defendant, to the plaintiffs, as commission merchants, to be sold; and that the plaintiffs made large advancements on the same; and that the plaintiffs wrote to the defendant that, unless other shipments were made them, or the defendant made them remittances in cash, they would sell the cotton, then, on the failure of defendant to write to plaintiffs in reply, the plaintiffs were bound to sell the cotton in a reasonable time; and the defendant is entitled to a credit on the plaintiffs' demand for the amount which the cotton would have brought, if sold within a reasonable time after the failure of the defendant to answer said letter.'

But the court refused to give these instructions, or any of them; and in lieu thereof, instructed the jury:

'That in case they find that defendant gave the plaintiffs instructions orally to sell the cotton before any further fall in the price; and that the plaintiffs failed to do so, but afterwards, on the 16th day of November, 1865, wrote the letter of that date; and that Feild refused to answer the same, then the plaintiffs are responsible for any loss sustained by reason of the fall in prices up to the time of the failure of the defendant to reply to said letter, but all losses sustained after that time must be borne by the defendant.'

The court also charged that, as a general principle, the plaintiffs, as factors, were bound to use due diligence, care, and skill in the sale of the cotton committed to them for sale; and that it was their duty to obey instructions given them by defendant in regard to a sale.

Exceptions were taken to the refusal to charge as asked, and to the charge as given, and verdict and judgment having gone for the plaintiffs, in $5690, the defendant brought the case here, where it was submitted on briefs.

Messrs. Watkins and Rose, for the plaintiffs in error; Mr. A. H. Garland, contra.

Mr. Justice STRONG delivered the opinion of the court.

title: Feild v. Farrington


text: Talk:Feild v. Farrington

title: Talk:Feild v. Farrington


text:
Feild v. Farrington/Opinion of the Court

There is some conflict in the testimony respecting the instructions given to the plaintiffs below by the defendant, at the time when he obtained the advance on his consignment, and at the time when he last saw them, some fifteen days afterwards. It is claimed that he then gave them instructions to sell the cotton before the price should fall any lower, and that this direction was given not later than the 28th of October, 1865. It was upon this theory that his first prayer for instructions to the jury was framed. It is very obvious that no such directions, as that prayer asked for, should have been given to the jury. The prayer was based upon a very imperfect statement of the case. It overlooked material facts, without considering which it could not be determined to what amount of credit he was entitled. There was undisputed evidence that on the 16th of November, 1865, some three weeks after the defendant's alleged directions were given to the plaintiffs, they wrote to him a letter informing him that they had not sold his cotton, as the market had been dull and on the decline every day since he left, that his cotton would not then sell for more than from forty-three to forty-four cents per pound, and that they would be compelled to sell unless he made other shipments, or remitted in cash as a margin, the money market being tight. They wrote farther that they had held on thus far to meet his views, but that the declining tendency of the market induced them to write, and they asked to hear from him on his receipt of their letter. It was also in evidence that the defendant received this letter, and that he purposely declined to answer it. No allusion was made to these facts in the defendant's first prayer for instructions to the jury. Yet it is manifest they ought not to have been overlooked by the court, for they bear directly upon the question whether the defendant was entitled to credit for the sum for which the cotton would have sold if the plaintiffs had sold it before the price fell in the market. The effect of his refusal to reply to their letter within a reasonable time after he received it, was undoubtedly to raise a presumption that he approved of what his factors had done, so far as their letter informed him. In the absence of anything to rebut that presumption, he must be regarded as having consented to whatever delay had occurred in effecting a sale, even though it was contrary to his directions. He could not, therefore, hold his factors responsible for the consequences of acts which he had ratified. Mr. Livermore, in his Treatise on Agency, says that 'when the relation of principal and agent does in fact exist, although in the particular transaction the agent has exceeded his authority, an intention to ratify will always be presumed from the silence of the principal who has received a letter informing him what has been done on his account.' And in Story on Agency, it is said that, 'In the ordinary course of business between merchants and their correspondents, it is understood to be the duty of one party receiving a letter from the other to answer the same within a reasonable time, and if he does not, it is presumed he admits the propriety of the acts of his correspondent, and confirms and adopts them.' Whatever, then, may have been the instructions given to the plaintiffs by the defendant respecting the time of sale, even though they were disobeyed, and though the cotton was not sold before the price had fallen, his refusal or neglect to reply to the plaintiffs' letter of November 16th, 1865, which notified him of the fall in the market price, and informed him that they had not sold but had held on thus far to meet his views, must be deemed an approval of their delay, and equivalent to an antecedent authority. It has been argued that at most it raised a presumption of fact that should have been submitted to the jury. To this it may be answered there was nothing in the case to repel the presumption, and the jury would, therefore, have been bound by it had it been submitted. But the defendant's prayer for instruction ignored it, and, in effect, called upon the court to withdraw it from the jury.

There is still another reason why the court should not have affirmed the defendant's first proposition. The plaintiffs had made large advances on the cotton consigned to them, advances very nearly, if not quite, equal to its value, and much more than its market value at any time after their letter to the defendant was written. They had, therefore, acquired a special property in the cotton, and they held it for their own indemnity as well as for the benefit of the defendant. Now, though it is true that factors are generally bound to obey all orders of their principals respecting the time and mode of sale, yet when they have made large advances or incurred expenses on account of the consignment, the principal cannot by any subsequent orders control their right to sell at such a time as in the exercise of a sound discretion, and in accordance with the usage of trade, they may deem best to secure indemnity to themselves, and to promote the interests of the consignor. Of course they must act in good faith and with reasonable skill. This is the rule as laid down in Brown v. McGran, in which it was said that 'where a consignment has been made generally without any specific orders as to the time or mode of sale, and the factor makes advances or incurs liabilities on the footing of such consignment, then the legal presumption is, that the factor is intended to be clothed with the ordinary rights of factors to sell, in the exercise of a sound discretion, at such time and in such mode as the usage of trade and his general duty require, and to reimburse himself for his advances and liabilities out of the proceeds of sale, and the consignor has no right, by any subsequent orders given after advances have been made or liabilities incurred by the factor, to suspend or control this right of sale, except so far as respects the surplus of the consignment not necessary to the reimbursement of such advances or liabilities.' In view of this it is apparent that the jury had more to find than the fact that Feild gave instructions to sell the cotton before any fall in the price, in order to justify a credit to him for the amount the cotton would have brought if sold at the time the instructions were given. There was, therefore, no error in denying the defendant's first prayer for instructions to the jury.

And the second prayer was correctly refused for the reason that it allowed no effect to the letter of November 16, 1865, and the defendant's refusal to reply.

But we think there was error in refusing to affirm the defendant's third proposition, and the instruction which was given.

The instruction given, we think, was not sufficiently qualified. It gave undue effect to the plaintiff's letter and to the defendant's neglect, or refusal, to reply to it. Surely it cannot be maintained that, by leaving their letter unanswered, the defendant relieved the plaintiffs from the consequences of subsequent neglect, or want of good faith. His silence, at most, was an assent to what they had done up to the time when they informed him of their breach of his orders. It was a condonation of past neglect, not a permission given for future negligence or faithlessness. It did not relieve the plaintiffs from their continuing obligation to sell the cotton within a reasonable time, all the circumstances of the case being considered, and to sell at the best price that could be obtained. They were still his factors, and under the obligations of factors. Though the order to sell before a fall in the price had expired, they were still agents to sell, and without any particular instructions. It cannot be said that the letter of the plaintiffs proposed, or that the defendant by his silence assented to an indefinite or unreasonable postponement of a sale of the cotton. On the contrary, the letter threatened an immediate sale, unless other shipments were made or cash was remitted, and the silence of the defendant can be deemed no more than an assent to what his correspondents had done, and to what they proposed to do. Yet the charge of the court shielded them against all responsibility for good faith and diligence after the defendant neglected to reply to their letter, and threw upon him all loss sustained after that time, though it may have been occasioned in whole or in part by their failure to sell when they should have sold. The plaintiffs held the cotton, without making a sale, nearly ten months after their letter of November 16, 1865, in which they notified the defendant that they would be compelled to sell unless he made other shipments or remittances. During this period the price of cotton was constantly falling in the market, until at last they sold what they said was worth in November, 1865, forty-three to forty-four cents, for thirty, twenty-five, and twenty cents. Whether this long delay, in view of a falling market, was in the exercise of a sound discretion, good faith, and reasonable diligence, was a question that should have been submitted to the jury. If the delay was unreasonable, if it was in violation of the plaintiffs' duty as factors, they, rather than the defendant, should bear the loss that resulted from it. Such was the instruction the defendant sought to obtain by his third prayer; but it was denied, and the jury were charged that he must bear all losses sustained after his refusal to answer the plaintiffs' letter, without excepting such portion of the loss as may have been caused by the fault of the plaintiffs. Herein we think was error.

It is true the court also charged that, as a general principle, the plaintiffs, as factors, were bound to use due diligence, care, and skill in the sale of the cotton, and to obey instructions given them by the defendant in regard to the sale. But this was not said as a qualification of the specific instructions previously given, and the jury must have understood that if they found the facts as stated by the court, they must charge the defendant with all the loss which accrued after his failure to answer the plaintiffs' letter.

REVERSED, AND A NEW TRIAL ORDERED.


text: Talk:Feild v. Farrington/Opinion of the Court


text:
Bank of the Republic v. Millard

IN error to the Supreme Court of the District of Columbia, the case being this:

Millard, a captain in the military service of the United States, was, in 1865, on leaving the service, a creditor of the government for $859, arrears of pay as captain. In settlement of this account the proper paymaster of the army drew and issued a check for that sum upon The National Bank of the Republic, a depositary of public moneys and financial agent of the United States, for the custody, transfer, and disbursement of the government funds, having funds for the payment of the check.

The bank, as testimony tended to show, had once paid the check on a forged indorsement of Millard's name. Ascertaining and exposing the forgery, and recovering possession of the check, Millard now presented the same, demanding payment to himself. This payment the bank refused to make. Thereupon he sued it, declaring on a special count on the transaction, and also on a general count for money had and received by the bank to his use.

On the trial the bank requested the court to charge, 'that unless the jury were satisfied from the evidence that it accepted the check in favor of the plaintiff, or his assignees, or promised to pay the same to the plaintiff, or his assignees, he was not entitled to recover.' But the court refused so to charge, and verdict and judgment having gone against the bank, it brought the case here on error; the questions here argued and considered being: 1st. The general one,-whether the holder of a bank check could sue the bank for refusing payment in the absence of proof that it was accepted by the bank or charged against the drawer. 2d. If not, whether the fact existing in this particular case, that the check was on a National bank (a public depositary of the government funds) by an officer of the government, in favor of a public creditor, varied the general rule.

Mr. Edwin L. Stanton, in support of the judgment below:

1. It may be admitted that the holder of a bill of exchange might not be able to sue without acceptance or a promise of it; but no argument from analogy can hence be made against such right in the holder of a common check drawn against funds confessedly existing on deposit.

A bill of exchange is, prim a facie, a single transaction between the drawer and the drawee; the latter does not hold himself out as the custodian and disburser of the former's money. He may not be a debtor to him at all. And even if he has money belonging to him, though an order to pay over the exact sum would, on notice, operate as an equitable assignment, yet he is under no obligation to pay it out in fragments, nor to several persons. Hence, in the case of a bill of exchange, a necessity may arise for the drawee's acceptance. It is recognition by him of the drawer's competence to give the direction expressed by the bill.

But bank checks are drawn on common repositories where many persons agree to keep their cash, to be always and immediately ready at their call or subject to their directions, in any amount, to any and every payee. Such checks, therefore, require no acceptance. In point of fact, none is ever given or thought of being asked for in regard to them. No custom is more prevalent, none more practically affects the dealings of men, than the usage and regular course of business out of which arise an understanding and expectation that a check, upon presentment for payment (if the drawer has the money on deposit to meet it), transfers to the holder the title to the money it calls for, and will at once be paid. Upon the strength and convenience of this usage and understanding, checks pass from hand to hand like cash, and are used in most payments and settlements between individuals and between banks.

The right of the holder to sue without acceptance has been sustained in Illinois, in Munn v. Burch; in South Carolina in two cases, as also in Louisiana. And this right rests upon what is said by this court in Mandeville v. Welch, that 'an obligation to accept may be fairly implied from the custom of trade or the course of business between the parties as part of their contract.'

2. But this plaintiff, an officer of the government, had a special and indeed a statutory right. The National Bank of the Republic was not a bank holding the deposits of a common customer and transacting ordinary banking business. It was a financial agent of the United States; a depositary and disburser of its funds; directly and completely the representative of the government, because the government can only act through its proper agent. The plaintiff was a creditor of the United States. The money for his payment was appropriated by law; his demand was admitted and definitely ascertained and payable in money. The bank, as agent of the government, held the sum set apart for his payment. It held it therefore to his use, payable on his proper demand, which was the presentment of this check. By statute, the refusal of such an agent to obey such an order and promptly pay such a check is, upon trial of an indictment, prim a facie evidence of embezzlement. Claiming credit for payment without having made payment is conversion of the amount, punishable by fine and imprisonment.

Messrs. Bradley and Cox, contra.

Mr. Justice DAVIS delivered the opinion of the court.

title: Bank of the Republic v. Millard


text: Talk:Bank of the Republic v. Millard

title: Talk:Bank of the Republic v. Millard


text:
Bank of the Republic v. Millard/Opinion of the Court

The only question presented by the record which it is material to notice is this: Can the holder of a bank check sue the bank for refusing payment, in the absence of proof that it was accepted by the bank, or charged against the drawer?

It is no longer an open question in this court, since the decision in the cases of The Marine Bank v. The Fulton Bank and of Thompson v. Riggs, that the relation of banker and customer, in their pecuniary dealings, is that of debtor and creditor. It is an important part of the business of banking to receive deposits, but when they are received, unless there are stipulations to the contrary, they belong to the bank, become part of its general funds, and can be loaned by it as other moneys. The banker is accountable for the deposits which he receives as a debtor, and he agrees to discharge these debts by honoring the checks which the depositors shall from time to time draw on him. The contract between the parties is purely a legal one, and has nothing of the nature of a trust in it. This subject was fully discussed by Lords Cottenham, Brougham, Lyndhurst, and Campbell, in the House of Lords, in the case of Foley v. Hill, and they all concurred in the opinion that the relation between a banker and customer, who pays money into the bank, or to whose credit money is placed there, is the ordinary relation of debtor and creditor, and does not partake of a fiduciary character, and the great weight of American authority is to the same effect.

As checks on bankers are in constant use, and have been adopted by the commercial world generally as a substitute for other modes of payment, it is important, for the security of all parties concerned, that there should be no mistake about the status, which the holder of a check sustains towards the bank on which it is drawn. It is very clear that he can sue the drawer if payment is refused, but can he also, in such a state of case, sue the bank? It is conceded that the depositor can bring assumpsit for the breach of the contract to honor his checks, and if the holder has a similar right, then the anomaly is presented of a right of action upon one promise, for the same thing, existing in two distinct persons, at the same time. On principle, there can be no foundation for an action on the part of the holder, unless there is a privity of contract between him and the bank. How can there be such a privity when the bank owes no duty and is under no obligation to the holder? The holder takes the check on the credit of the drawer in the belief that he has funds to meet it, but in no sense can the bank be said to be connected with the transaction. If it were true that there was a privity of contract between the banker and holder when the check was given, the bank would be obliged to pay the check, although the drawer, before it was presented, had countermanded it, and although other checks, drawn after it was issued, but before payment of it was demanded, had exhausted the funds of the depositor. If such a result should follow the giving of checks, it is easy to see that bankers would be compelled to abandon altogether the business of keeping deposit accounts for their customers. If, then, the bank did not contract with the holder of the check to pay it at the time it was given, how can it be said that it owes any duty to the holder until the check is presented and accepted? The right of the depositor, as was said by an eminent judge, is a chose in action, and his check does not transfer the debt, or give a lien upon it to a third person without the assent of the depositary. This is a well-established principle of law, and is sustained by the English and American decisions.

The few cases which assert a contrary doctrine, it would serve no useful purpose to review.

Testing the case at bar by these legal rules, it is apparent that the court below, after the plaintiff closed his case, should have instructed the jury, as requested by the defendant, that the plaintiff, on the evidence submitted by him, was not entitled to recover. The defendant did not accept the check for the plaintiff, nor promise him to pay it, but, on the contrary, refused to do so. If it were true, as the evidence tended to show, that the bank, before the check came to the plaintiff's hands, paid it on a forged indorsement of his signature, to a person not authorized to receive the money, it does not follow that the bank promised the plaintiff to pay the money again to him, on the presentation of the check by him for payment.

It may be, if it could be shown that the bank had charged the check on its books against the drawer, and settled with him on that basis, that the plaintiff could recover on the count for money had and received, on the ground that the rule ex aequo et bono would be applicable, as the bank, having assented to the order and communicated its assent to the paymaster, would be considered as holding the money thus appropriated for the plaintiff's use, and therefore, under an implied promise to him to pay it on demand.

It is hardly necessary to say, that the check in question having been drawn on a public depositary, by an officer of the government, in favor of a public creditor, cannot change the rights of the parties to this suit. The check was commercial paper, and subject to the laws which govern such paper, and it can make no difference whether the parties to it are private persons or public agents.

As soon as the deposit was made to the credit of Lawler as paymaster, the bank was authorized to deal with it as its own, and became answerable to Lawler for the debt in the same manner that it would have been had the deposit been placed to his personal credit.

JUDGMENT REVERSED AND A VENIRE DE NOVO AWARDED.


text: Talk:Bank of the Republic v. Millard/Opinion of the Court


text:
Dean v. Nelson

APPEAL from the Circuit Court of the United States for West Tennessee; the case having been thus:

Thompson Dean, of Cincinnati, prior to the breaking out of the late rebellion, was the owner of a large amount of capital stock in the Memphis Gaslight Company, a corporation of Tennessee, situated and doing business at Memphis, in that State. In May, 1861, he transferred his entire stock to one Pepper, secretary of the company, to enable him (Pepper) to make some disposition of it in view of approaching hostilities.

On the 11th day of June, 1861, Pepper sold and transferred fifty shares, of $100 each, to a certain Nelson, then of Memphis, at par, receiving for the consideration Nelson's note, under seal, dated June 11th, 1861, whereby he promised to pay to the order of Pepper $5000, with interest at six per cent. per annum out of the net receipts of earnings on the sum of $5000 of the capital stock of the company, payable in quarterly instalments, the interest being first paid and balance of said net receipts then to be applied upon the principal, which instalments should amount to such sum of money as should be equal to the quarterly net receipts of earnings on $5000 of the capital stock of the company; it was further expressed in the note that it was given for the purchase-money of $5000 of the capital stock of the company, sold and transferred to Nelson by Pepper; and that if Nelson failed to pay any of the instalments quarterly, as aforesaid, after the receipt by the company of said net earnings, then the full sum of $5000, with interest, less interest and instalments paid, should become due and payable.

To secure the payment of this note Nelson, on the same day, executed to Pepper a paper, in the ordinary form of a mortgage, conveying to Pepper, his heirs and assigns, the following real and personal property, viz., 'so much of Nelson's individual interest, right, title, and estate in the property and premises of and belonging to the Memphis Gaslight Company as should be represented by and equal to the $5000 of capital stock of said company at par,' then describing the real and personal property which the company owned, being gas works and other property in Memphis, and concluding with the usual condition, to be void on the payment of the note according to the tenor and effect thereof. This instrument was duly acknowledged and recorded in the registry of mortgages for Shelby County. On the 20th day of July, 1861, Pepper sold and transferred to Nelson one hundred and fifty-four additional shares of said company, at the par value of $15,400, and received a similar note and instrument for the consideration thereof. It appeared from the evidence in the case that Pepper sold this stock to Nelson and the remainder of Dean's stock to other persons, when he did, under apprehension that it would be confiscated by the Confederate authorities, as was threatened to be done, and from a desire to leave Memphis (which he soon afterwards did do, going north) for his own personal safety. But Nelson swore that he made the purchase of the stock in good faith, and that he received it without any trust or pledge for its return.

The war soon began to rage with severity, and all intercourse between the States in rebellion (including Tennessee) and the other States of the Union was not only interrupted, but was prohibited by President Lincoln's proclamation of August 16th, 1861, made in pursuance of the act of Congress of the 13th of July previous.

Nelson continued to reside at Memphis, within the Confederate lines, and received the regular quarterly dividends on the two hundred and four shares of stock, but did not and could not make any payment to Pepper or to Dean, to whom Pepper assigned the notes and mortgages, they both being within the Union lines. The amount of dividends thus received by Nelson was $3672.

On the 1st of June, 1862, Nelson transferred one hundred and ninety-four shares of the stock to Miriam Nelson, his wife, having previously transferred ten shares to a certain Benjamin May. Both transfers were without consideration, except that the object of the transfer to May was to make him a director, and the professed object of the transfer to Nelson's wife was to make her a separate provision for maintenance.

On the 6th of June, 1862, the Federal forces entered the city of Memphis, and held military possession of that part of Tennessee until the close of the war. Dean visited Memphis during the summer and autumn of 1862, and saw Nelson there, who failed to make any payment on the notes. Nelson swore in the proceeding below, that Dean refused to receive any payment, alleging that the stock was absolutely for feited by the failure to pay. Dean swore that he asked Nelson what he proposed to do about the payment of the net earnings which he had received, and that Nelson answered that he was not disposed to pay it, because he might have to pay it again to the Confederate government. From the evidence in the case this court expressed itself as inclined to believe that this ground was assumed by Nelson, and that he did not make an unequivocal tender of the money due, and whilst it admitted that it was probably true that Dean insisted that the stock was forfeited, it was not satisfied that his conduct was such as to obviate the necessity of a tender by Nelson if the latter wished to prevent the principal from becoming due. At this time Nelson was allowed to remain peaceably within the Union lines, and there was no reason why he should not have paid the money to Dean.

On the 5th of April, 1863, Nelson, with his family, was ordered to remove south of the lines of the United States forces, and not to return. This order was made in retaliation for some outrages committed by guerillas in the vicinity. In pursuance of it Nelson and his family removed within the Confederate lines, and remained therein during the remainder of the war; and were not permitted to re-enter Memphis, although Nelson, at one time, requested permission to do so. The other complainant, May, was within the Confederate lines during the entire contest.

On the 25th of April, 1863, General Veatch, then commanding the military district of Memphis, by a special order, established and organized a court or civil commission for the hearing and determination of all complaints and suits instituted by loyal citizens for the collection of debts, enforcement of contracts, prevention of frauds, recovery of the possession of property, and generally to do whatever can be done by a court deriving its powers from military authority. Before this court or civil commission, on the 1st day of September, 1863, Dean filed a petition setting forth the fact of the sale of the stock to Nelson, that Nelson had given a note, and to secure the payment of said note had executed and delivered mortgages on all the interest of said Nelson in said company, represented by said stock, which mortgages were recorded, &c.; and praying for the foreclosure of the 'said mortgages,' and sale of the two hundred and four shares of stock, in order to raise the amount due on the notes. Nelson and wife, and May, were made defendants, but were returned Not found; and publication of notice to them to appear was made in accordance with the laws of Tennessee existing prior to the rebellion. No appearance being effected, a decree was made, execution issued, and the stock was sold by the marshal on the 23d day of October, 1863, to one Hanlin, and was subsequently transferred to him on the books of the company by the secretary, pursuant to an order of the civil commission. Hanlin immediately transferred the stock to Dean. From that time till June, 1865, Dean drew the dividends on the stock.

In the month just named, Nelson, his wife, and May, filed a bill in the court below, praying, in substance, that the stock might be decreed to belong to them, and that Dean might account for all the dividends received by him, to be applied to the payment of the notes, &c., and for general relief.

Dean, in his answer, set up and insisted upon two grounds of defence:

First, the forfeiture of the condition of the mortgage, which, under the circumstances of the case, and from the unconscionable nature of the transaction, he insisted should be held to be an absolute forfeiture, without benefit of redemption; in other words, that the instrument should be regarded as a conditional assignment or transfer, and not as a mortgage.

Secondly, he set up the proceedings before the civil commission, by which, as he contended, even if the instrument were a mortgage, all equity of redemption in the stock was foreclosed. The defendants, Nelson, his wife, and May, on the contrary, insisted that the paper was a mere mortgage; that the condition in the notes making the principal due if the instalments were not regularly paid, was in the nature of a penalty, and should not have been enforced in an equitable proceeding; that the court or civil commission was illegal and without authority; that it never had any jurisdiction of the person of the appellants, nor of the property attempted to be foreclosed; that the existence of the war, and the residence of the appellees within the Confederate lines, forbade any legal proceedings against them or their property; that, therefore, they had been illegally dispossessed of the latter, and were entitled to have it restored to them without conditions; and, finally, that Dean was accountable to them for the dividends received by him, to be credited on the notes.

The court below decreed that Dean should transfer to Mrs. Nelson, for her sole and separate use, one hundred and ninety-four shares of the stock, and to May ten shares, so as to restore the stock to them respectively, as they had it prior to the decree of the civil commission divesting it out of them. And that a master should take and state—

An account of what amount of dividends had been declared and paid on the said two hundred and four shares since the sale to Nelson by Pepper, and when, how, and to whom they were paid:

And an account between Nelson and Dean, as assignee of Pepper, which should show the amount of principal and interest of the notes executed by Nelson to Pepper, for the two hundred and four shares, with all amounts of dividends and profits received on them by Dean, applied as credits according to the laws of Tennessee, as to the application of partial payments, and showing what balance, if any, was now due upon the said obligations, or what balance, if any, was due from Dean, after paying the said obligations in full.

From this decree Dean took an appeal here.

Mr. Holman, for the appellant:

The assignments of stock by Pepper to Nelson were made without any consideration whatever. There was no mutuality in the contracts. They imposed no obligation on Nelson. His agreement to pay for the stock out of his own net earnings was not a valuable consideration for its assignment to him. Pepper acted under what was, practically, duress; under an influence which disturbed his judgment, and deprived him of the capacity to act calmly; and this condition of mind was brought about by the prospect of a rebellion; by the acts of traitors, with whom Nelson was doubtless himself in concert. Is he to profit by a profitable contract obtained by him at such a moment? Certainly, if this contract were executory, equity could not, under the decision in this court of Dorsey v. Packwood, enforce it. But Dean, without fraud on his part, has, through the decree of the military court, got the legal title to the stock in his hands, and the other side come in to ask the aid of equity. In such a case the court will consider the original contract, its fairness, and the consideration on which it was founded, in determining whether the party asking relief is in equity entitled to it, and the court will refuse its aid, as in case of a bill for specific performance, if the original contract, if executory, ought not to have been enforced.

These instruments were not mortages, but were absolute conveyances of the stock with defeasance, to be null and void if the conditions were performed, but to be absolute upon default. The condition of paying over dividends received has been broken. The conveyances, therefore, have become absolute, and all of Nelson's title has been divested, and vested in Pepper, and in Dean, his assignee, even without reference to the decree of the civil commission. Certainly, in view of the unconscionable character of the bargain on Nelson's part, this is the light in which the court must consider the instruments.

We assume, of course, that whatever the instruments were, they operated on shares of stock. Nelson, indeed, had nothing else on which they could operate.

If prior to June 6th, 1862, Nelson could pretend to be excused from paying the dividends he had received by reason of the hostile military power, which he had himself doubtless contributed to organize, between the city of Memphis and Cincinnati, the domicile of Dean, no such excuse could avail after the 6th of June, 1862, when the Federal forces took possession of Memphis, or when he met Dean in Memphis, in the autumn of that year. And, considered as contracts, time was clearly of their essence.

Even if the instalments are to be regarded as mortgages, still upon the failure of Nelson to fulfil his contracts, if he possessed any right or interest in this stock, it was only a right in equity to redeem; and a court of equity will not aid a party to redeem, and relieve him from the consequence of his default, when he seeks thereby to obtain the benefit of an unconscionable contract, which, if executory, a court of equity would not enforce.

But a right of redemption arises, in any case, but from the payment or tender of payment of the debt. Here Nelson and May, still retaining the $3672 of dividends received on this stock, without payment or tender to Dean of that sum, or of any portion of the debts, both long since due by the terms of the contracts, seek by their bill to be reinvested with the title to the stock. The claim set up is against equity and good conscience.

But, independently of this, the decree of the civil commission affords a judicial bar to this bill. That a military commander, in a conquered district, in which the civil authority is overthrown or suspended, may, to aid him in the protection of private rights and to preserve civil order, establish agencies of civil government, and among them courts of justice, is scarcely open to discussion. The humane principles of modern international law not only recognize this power in a military commander, but would seem to demand its exercise, thus ameliorating as far as may be the severities of military law. The duty of the Federal government to protect the rights of all of its loyal citizens rendered the application of those enlightened principles of international law to the districts of country under military occupation in the late war imperative. General Veatch, commanding the military district of Memphis, a commercial city of sixty thousand people, with intimate commercial relations with many of the loyal States of the Union, was not only authorized, but was bound to establish in that city, while held be force of arms, such a tribunal. The validity of the proceedings of such tribunals, established by military power, seems to be sustained by many decisions in the courts of this country.

Mr. P. Phillips, contra; a brief of Messrs. Kortrecht and Craft being also filed:

1. Even if this were a bill for the specific performance of an executory contract it would be maintained; for it is not necessary that a consideration should be adequate, but only that it be valuable. The parties themselves are the best judges of the adequacy, and, therefore, inadequacy will not be an answer in equity to the prayer for specific performance, if not so gross as to prove fraud or imposition. But we here stand on an executed contract, and ask relief only to enforce the rights which pertain to it. The distinction between the two classes of cases is elementary. Where in such a contract there is neither fraud, accident, nor mistake, however absurd the stipulations, the contract will be enforced. In those cases where the inequality of the bargain is so gross that the mind cannot resist the inference of fraud, the court interposes, not on the ground of the inequality, but because from its grossness there arises the most vehement presumption of fraud. The inadequacy complained of in this case is, that the payments were to be made only out of the dividends received from the stock; but as these dividends were regarded as certain to be made, they were merely taken as the measure of the payments.

The contract in this case is no doubt an unusual one; but the condition of the country when it was made, and by which it was suggested, was unusual; for more unusual than a contract of such a nature itself.

It is again objected that the complainant is not entitled to relief, because the sale of the stock was made under circumstances which constituted duress. Admit that these sales would not have been made if the country had been at peace. What has that to do with the result? When it was supposed, as for a short time during the rebellion it was by some, that Washington would be captured by the rebels, the stress of that belief forced sales of property at great sacrifices. The contingencies of the war operated in determining the judgment and action of men; but such considerations, in the absence of fraud or imposition, have not heretofore been considered as sufficient to avoid a contract for duress. We do not deal with the question of 'free will' as one of metaphysics. All that the law requires is the exercise of a sane mind, with liberty of action. That Pepper and Dean were of sound mind and discretion is admitted. They speculated as to the chances of war. If they had firmly believed in the defeat of the rebel cause, the sale would not have been made. That it was made, is but an evidence they did not so believe.

The force which deprives the party of his free will must have a direct relation to, and connection with the contract which is sought to be avoided. Violence, and the rule of a mob, or the action of the elements, may create such apprehension for the safety of property as to induce its sale for an inadequate consideration. But however strong the apprehension, and however it may sway the mind, the will is still left free, what to choose, and what to do. The owner may retain his property, and take the hazard of its destruction, or he may dispose of his title to others who have more confidence in its safety. If his judgment, influenced by fraud or imposition, induces him to select the latter course, this is the exercise of free will. He cannot in legal parlance assert that he was forced to enter into the contract. If Pepper had made the sale in Cincinnati, and to one of its citizens, with what pretext could he have maintained the right to annul it? How would such a sale differ from the sale made in Memphis in execution of the determination arrived at in Cincinnati? If the apprehension that confiscation laws might be passed induced the sale, this is not a duress which authorizes a repudiation of the contract, when the danger had ceased to exist.

2. If the instruments which we call mortgages were, as it is contended on the other side they were, conditional sales, still they are conveyances only of Nelson's interest in the property of the Gaslight Company, and stock would not pass under them. But we submit that this theory is too far at variance with the whole history of the transaction, and with Dean's statements made in the petition filed in the civil commission, to be now considered. As a question of law, however, this transaction has none of the elements of conditional sales. If they had been conveyances of stock, only the equitable title would have passed, because the legal title could not be transferred except upon the stock books of the company. The legal principles as to conditional sales, sought to be relied upon, have application only to legal titles.

3. The decisions cited on the other side in support of the lawfulness of the civil commission, fail to show that a military commander of a city in easy communication, as it is matter of public history that Memphis then was, with the capital, may without any authority from Congress or the President establish courts of Justice. If not confined to the commander-in-chief, then it must exist in every officer in command of a particular place, even though the command may not extend beyond a corporal's guard.

4. But if it were a lawful court, of what value was its decree of divestment in this special case? The same military power which sent Nelson beyond the Federal and into the rebel lines, with a prohibition against return, a few months thereafter, renders a decree pro confesso against him, because he did not respond to an advertisement directing his appearance, and becuase though called to come into court, he made no answer. Such a decree cannot be maintained except we adopt the fiat of arbitrary power 'sic volo, sic jubeo.' Then, indeed, no advertisement and no proclamation are necessary. But tested by the principles of universal justice, it is a mere nullity. The law of nations, the acts of Congress, nay, the direct command of this military power itself, forbade Nelson from appearing, even if accident had brought the publication to his notice. The law cannot create a default when the law forbids a performance. In England, in Sir Alexander Don's case, in the House of Lords, a decree was reversed which permitted a judgment against Don recovered in France without personal service, during the war, to be given in evidence to avoid the plea of prescription in a suit brought against Don in Scotland after the war; Don, at the institution of the proceedings, being a subject of Great Britain, resident therein.

In the northern part of our own country (Illinois), a decree of foreclosure, founded on such an advertisement as the one here, was set aside, though the statutory period of redemption had passed. The court considering that 'titles thus acquired would rest on the basis of robbery, not upon a judicial divestiture of the debtor's interest recognized as just 'jure gentium." And the same doctrine is held in the southern part (Georgia), in a case where the jurisdiction was exercised within Confederate lines against a defendant being at the time in one of the loyal States.

Mr. Justice BRADLEY, having stated the case, delivered the opinion of the court.

title: Dean v. Nelson


text: Talk:Dean v. Nelson

title: Talk:Dean v. Nelson


text:
Dean v. Nelson/Opinion of the Court

In determining the questions raised by this record, the court is of opinion in the first place, that Dean must be regarded as concluded on the question of the sale of his stock. Had the transaction been merely an agreement for a sale upon the terms on which the sale was actually made, and this a bill by the vendees for a specific performance, we should find great difficulty in distinguishing this case from that of Dorsey v. Packwood. But here the sale was actually made, and the stock was actually transferred to Nelson, so that, in the absence of fraud, it became absolutely his. And in support of the bona fides of the transaction, it may be said that in view of all the contingencies of the situation, the arrangement was at the time an advantageous one for Dean. At all events, he chose, on the whole, to acquiesce in it, and in his bill to foreclose the stock, presented before the civil commission, he makes no claim but that of holder of the mortgage, affirming and claiming under Nelson's title throughout. And in his answer to the present bill he nowhere hints that Nelson was guilty of any bad faith in the transaction, or made any agreement to hold the stock for him, or in any other way than as a bona fide purchaser thereof. And it is hardly correct to say that Nelson incurred no obligation in the transaction. He agreed to pay the whole amount immediately in case of failure to pay any instalment after the receipt by the company of the net quarterly earnings. And this condition was not in the nature of a penalty, as surmised by the appellees; but was of the substance of the contract. So that, on failure to pay or tender the money received by him, or by the company, on account of the stock purchased, the whole debt became due and payable as a personal obligation of Nelson.

But, at all events, the stock was actually sold and transferred, and became the property of Nelson, and was possessed by him. The contract was an executed contract, and that transaction cannot now be impeached.

The next question relates to the character of the instrument given by Nelson to Pepper as security for the payment of his notes. Was it a conditional sale, or was it a mortgage? On this question hardly a doubt can be raised. The court is asked by the appellant, under the circumstances of the case, which the appellant asserts to have been unconscionable on Nelson's part, to consider the instrument as a conditional conveyance of the stock, and not a mortgage. But the court has no power over the transaction to make it other than, or different from, what the parties themselves made it. If it is a mortgage, it is the duty of the court to declare it a mortgage; and if it is a mortgage it has, perforce, all the incidents and privileges of a mortgage; and that it is a mortgage there is no room for question. The principal engagement is contained in the note, which creates a debt as soon as earnings or dividends are received. The other instrument is secondary, and is intended as security for the payment of the note. The appellee himself, in his proceedings before the civil commission, treats his claim as a debt, and the instrument of security as a mortgage. He calls it a mortgage; and the doctrine of 'once a mortgage, always a mortgage,' applies to it.

Then, being a mortgage, whether of real or personal property, the mortgagor has an equity of redemption, unless it has been extinguished in some legal way. The great question of the cause is, whether the equity of redemption has been extinguished.

It is unnecessary to decide whether the mortgage was one of real or of personal estate, or whether it was a legal or only an equitable mortgage. As no attempt has been made to cut off the equity of redemption, in any other manner than by legal proceedings, the question is reduced to the simple one, whether those legal proceedings are valid and effectual for the purpose.

It is objected that the court or civil commission was not legally established; but it is not necessary to determine that question, as the proceedings themselves were fatally defective. The defendants in the proceedings (the appellees here) were within the Confederate lines at the time, and it was unlawful for them to cross those lines. Two of them had been expelled the Union lines by military authority, and were not permitted to return. The other, Benjamin May, had never left the Confederate lines. A notice directed to them and published in a newspaper was a mere idle form. They could not lawfully see nor obey it. As to them, the proceedings were wholly void and inoperative.

This leaves the equity of redemption in the mortgaged property unextinguished; and it is, therefore, the right of the appellees to redeem it.

In the opinion of the court, the whole principal and interest of the notes have become due and payable, and a redemption and retransfer of the stock should be decreed only on condition of the payment of principal and interest in full, after giving to the appellees credit for the sums received by the appellant; legal interest on each side to be allowed.

The decree of the Circuit Court, therefore, will be so far modified that, instead of requiring the appellant to forthwith transfer the stock, as directed in the decree, he be decreed to transfer it to the defendants, Miriam W. Nelson and Benjamin May, respectively, as therein directed, upon payment by the appellees to the appellant of the amount which shall be found to be due to him on the said two notes, after taking and stating the account in the said decree afterwards directed; neither party to recover costs of the other in this appeal.

DECREE MODIFIED ACCORDINGLY.

title: Dean v. Nelson/Opinion of the Court


text: Talk:Dean v. Nelson/Opinion of the Court


text:
Downham v. Alexandria Council

ERROR to the Fourth Judicial District Court of the State of Virginia. The case was thus:

The Constitution by one clause declares that 'Congress shall have power to regulate commerce with foreign nations, and among the several States;' and by another that 'the citizens of each State shall be entitled to all the privileges and immunities of citizens of the several States.' With these provisions existing, the city council of Alexandria, in Virginia, passed in June, 1867, an ordinance for the purpose of raising revenue for that year, and by it imposed a license tax, in proportion to the capital invested, upon all merchants commencing business, and a tax proportioned to their sales, upon all merchants who had been carrying on business for one year, prior to the first of June. The same ordinance also imposed a special license tax upon commission merchants commencing business, and a tax in proportion to the commissions received upon those who had been doing business for one year prior to the first of June. The ordinance further imposed a license tax of two hundred dollars 'on all agents or dealers in beer or ale by the cask, not manufactured in this city (Alexandria), but brought there for sale.'

In this state of things Downham & Co. were, at the commencement of this action, in August, 1867, and had been from the first of the previous June, conducting the business of liquor merchants and commission merchants in Alexandria, and at the same time had been dealing on commission in beer and ale by the cask, which was not manufactured in the city, but was brought there for sale. They obtained, as required by the ordinance, a license from the mayor of the city, as merchants and commission merchants, for the year ending June 1st, 1868, and paid the liquor tax; but they did not obtain a license to deal in beer and ale by the cask, which were not manufactured in Alexandria, but were brought there for sale; nor did they pay the tax of two hundred dollars required by the ordinance for such license. The city council brought the present action to recover that sum. The defendants set up by way of defence, that the ordinance, in the imposition of a tax upon dealers in beer or ale by the cask, when not manufactured in the city of Alexandria, but brought there for sale, was in conflict with the two clauses of the Constitution already above quoted.

The case was submitted to the Circuit Court of Alexandria County upon an agreed statement of facts, the parties waiving all matters of form and pleading, and expressing a desire to present for the decision of the court two questions:

1st. Whether the city council of Alexandria had exceeded its authority in imposing the tax upon dealers in 'foreign ale or beer?'

2d. Whether the license of the defendants, as merchants and commission merchants, authorized them to deal in ale or beer by the cask, which was not manufactured in Alexandria, but brought there for sale, when the ordinance imposed a specific license tax upon this particular branch of the trade?

The Circuit Court gave judgment for the city, and the District Court affirmed the judgment, and this latter court being the highest court of law in the State in which a decision could be had, the case was brought here for review; the plaintiffs in error assuming that the case came within the twenty-fifth section of the Judiciary Act.

Messrs. Brent and Wattles, for the plaintiffs in error, urged in this court the same positions which the defendant set up below.

Mr. D. L. Smoot, for the city council of Alexandria, contra.

Mr. Justice FIELD, after stating the case, delivered the opinion of the court as follows:

title: Downham v. Alexandria Council


text: Talk:Downham v. Alexandria Council

title: Talk:Downham v. Alexandria Council


text:
Downham v. Alexandria Council/Opinion of the Court

The argument of counsel proceeds upon the supposition that the beer and ale in which the defendants dealt was manufactured either in a foreign country, or in another State of the Union; but there is nothing in the record to warrant the supposition. The first question that the parties desired to present in the agreed statement is not, in truth, raised by the facts admitted. It is not alleged in the statement that the defendants were dealers in 'foreign beer or ale,' or even in beer or ale manufactured without the State of Virginia. It is only alleged that they were dealers in beer and ale by the cask, which was not manufactured in the city of Alexandria. For anything which appears, the beer and ale in which they dealt may have been manufactured in other parts of the State. If manufactured within the State, the exaction of the special license tax for the privilege of selling them in casks in Alexandria, would not, of course, be obnoxious to either clause of the Constitution cited. In that case, it would not interfere with any regulation of commerce with foreign nations, or between the States, or with any authority to make regulations for such commerce. Nor would it, in that case, impair any privileges or immunities of citizens of other States, who, equally with citizens of Virginia, and upon the same terms, could deal in the city of Alexandria in similar goods. It is only equality of privileges and immunities between citizens of different States that the Constitution guarantees.

The defendants have, in fact, presented for our consideration a possible, but not an actual question, on which may hereafter arise under the ordinance, but which has not arisen as yet; at least the record does not aver any facts which show that it has arisen, and we cannot indulge in presumptions to supply the omissions of material averments.

The secound question presented in the statement depends for its solution upon the construction of local statutes, and does not involve the consideration of any act of Congress, or any provision of the Constitution of the United States.

We are of opinion that no question is raised by the record which this court can consider under the twenty-fifth section of the Judiciary Act, and the writ of error must, therefore, be

DISMISSED.


text: Talk:Downham v. Alexandria Council/Opinion of the Court