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United States v. Justice/Opinion of the Court

Before the 19th of March, 1862, all the muskets, with the exception of 472, had been received and approved; and had also been paid for by the United States at the contract price of $20 each. These 472 were delivered on the said 19th of March; on which day Lieutenant Treadwell acknowledged their receipt, and issued to Justice a final voucher showing that there was due to him for these and some other arms, the sum of $19,171.25.

The muskets thus furnished by Justice were given to three regiments of Pennsylvania volunteers in the field, who were accordingly armed with them. Some time afterwards the Ordnance Department receiving serious complaints from these regiments, alleging that the arms were unserviceable, ordered reinspections of the arms in the hands of these troops, as well as of those remaining yet in store. The reinspection of the arms in the hands of each of these regiments was made by Lieutenant Harris, of the Ordnance, Colonel Doubleday, of the Artillery, and Assistant Inspector-General Buford. It showed that many of the guns were made up of parts of condemned muskets; that the stocks were of soft, unseasoned wood, and were defective in construction; that most of the barrels abounded in flaws; that many locks were defective, that the sights had been merely soldered on, and came off with the gentlest handling; that the bayonets bent 'like lead,' and came off, and that so many of the guns burst that the men were afraid to use them; and that as a whole, the arms in the hands of the troops were 'a worthless lot of arms, unfit for service and dangerous to those who used them.'

Of the arms yet in store, the inspection was made by Lieutenant Treadwell in person. He reported to General Ripley, March 28th, 1862, certifying to the ability and integrity of the armorers who had conducted the original inspection, and saying:

'My instructions to them were to inspect the arms, and reject all that, in their opinion, were not good and serviceable, and in all respects fit for use in the field. I think that these instructions were complied with. The arms were offered to me at a time when the demand for arms was most imperative, and it was deemed desirable to accept them, to meet, in part, the pressing demand. Comparing the arms with those of our own manufacture, none would pass inspection, and it was not supposed that they should be subjected to any such standard; but that all that were passed on inspection would prove good and serviceable, was believed. Examining two boxes of these arms in store, I do not find them to have the radical defects complained of, nor can I account for the very different report of their inspection at camp, and that made to me by my inspectors. I find the sights are soldered on, but on tapping twenty of them with a hammer sufficiently hard to dent them, none were found to come off, or even started.'

On the 20th of March, 1862, the Chief of Ordnance informed the Secretary of War that he deemed it his duty to withhold payment of the above voucher for $19,171.25, given by Lieutenant Treadwell to Justice, until the matter could be investigated. He submitted to the secretary all the papers on the subject, and suggested that the matter be referred to the two gentlemen (Messrs. Joseph Holt and Robert Dale Owen) who had been authorized by the secretary to audit and adjust all claims and contracts in respect to ordnance, arms, and ammunition. This recommendation was approved by the Secretary of War, who referred the voucher of March 19th, together with all the papers and reports received from the Ordnance Office, to this committee, who were then sitting in Washington. The committee proceeded to investigate the character and quality of the arms. Justice was in Washington during its session, appeared before it, and was persistent and energetic in presenting his claim. He offered no evidence, but presented several written arguments.

The first report of the committee, who declared that they 'considered it proved that Mr. Justice had not fulfilled his obligation to furnish a serviceable arm to the government,' was condemnatory of all the guns, as 'not suitable in workmanship or material for the public service.' Fourteen days after it was made, Justice succeeded in convincing the commissioners that in thus condemning all the guns they had fallen incontestably into error. He also protested that as his arms were accepted after inspection by government authority, the government could not rightfully decline to pay for all so accepted. A second report corrected the error which Justice had pointed out, and found that the 'complaints of inferiority' related chiefly to 2174 rifled muskets. Accordingly the committee decided, in their second report, that the payments theretofore made to Justice be considered as 'on account,' and that $15 per gun only be allowed for the 2174 rifled muskets, instead of $20, the contract price.

[In their first report they had decided that $15 was an ample equivalent for all the arms.]

The Second Auditor was now instructed by the Chief of Ordnance to settle Justice's account on the voucher of March 19th for $19,171.25, on 'the basis of this decision;' and he accordingly stated an account between Justice and the United States, in which he charged the contractor as with an overpayment of $5 each for all the rifled muskets already paid for at the contract price of $20, and deducted $5 from the contract price of each of the muskets embraced in the voucher of March 19th. As the whole number of these arms was, as has been seen, 2174, the amount deducted from the face of that voucher was thus $10,870, leaving on the face of the account $8301.25 as the balance due.

On the 8th of December, 1862, Justice received from the Treasurer of the United States certificates of indebtedness amounting to $6000, and a treasury draft for $2301.25, amounting in all to $8301.25; the receipt of which he acknowledged in a letter to the Treasurer of the United States, thus:

'SIR: Have received your letter of draft, together with the following certificates of indebtedness, payable to blank, viz.:

No. 36,332 to No. '337, i. e., 6 of $1000, $6000

'Issued on war warrant No. 3405 for that amount in favor of Philip S. Justice.

'Scale No. 12,051.

'Yours, &c.,

'P. S. JUSTICE.

'F. E. SPINNER,

'Treasurer of the United States.'

No other receipt was ever given by Justice for the amount, or any portion of the amount, of the above voucher of March 19th. The amount thus received left a balance of that voucher amounting to $10,870 unpaid; and to recover this balance, Justice, on the 16th of October, 1867 (nearly five years, it will be seen, after receiving it), brought suit in the Court of Claims.

The Court of Claims found for the claimant the $10,870 claimed, and the United States appealed.

Mr. G. H. Williams, Attorney-General, and Mr. W. McMichael, Assistant Allorney-General, for the United States:

The arms were not according to contract. They were not serviceable, nor did they equal the sample furnished by the contractor; the Court of Claims having found, as a fact, that 'these arms, furnished by claimant, were not in all respects similar to the sample arm.' This, although qualified by the subsequent language of the court, nevertheless goes to show a failure to comply with the condition of Lieutenant Treadwell's letter of August 17th, 1861, which provides that the muskets shall be 'equal in all respects to the sample deposited with' him.

These arms were furnished directly by the claimant. The presumption is that he knew their defective character, and he cannot take advantage of a nominal inspection at the arsenal by subordinates, to screen himself from the consequences of the careful inspections of the responsible officers whose reports are above referred to. The obligation of his contract with the United States was, not that his arms should pass an inspection, but that they should be of a certain standard, and this obligation he failed to fulfil.

The result of the examination of Justice's claim by the commission, was a settlement by which he was allowed at the rate of $15 each for the defective arms.

Mr. Justice accepted the sum allowed, after having attended the meetings of the commission, and with full knowledge that it was intended as a final payment of his account; and by this action he was concluded from making any further claim on the United States. United States v. Adams, United States v. Child, United States v. Clyde, rule the case.

Only two questions can be made in this case:

I. Whether the claimant is barred from maintaining this action by reason of having received a part of the amount due upon the voucher of March 19th? And if not—

II. Whether, upon the facts found by the Court of Claims, the government has any legal defence to this suit for the contract price of the arms?

I. The facts of this case do not bring it within the decisions in the Adams, Child, and Clyde cases cited on the other side.

1. The claimant here had a valid and regular executory contract to furnish a number of arms of a certain description at a fixed price. It was made upon the exhibition of a sample, which proved satisfactory to the agents and experts of the government. The arms were to be inspected by those agents and experts according to that sample; and they were to be rejected if found unsatisfactory, and accepted if found satisfactory. Arms of the kind contracted for were delivered, and upon full inspection by the experts of the United States, were accepted and appropriated to the contract. Regular vouchers, officially executed by the inspecting officer, were issued to the contractor. All these vouchers, except one, were duly paid, and the transactions closed.

Complaints being afterwards made against the arms by the troops, the Ordnance Bureau stopped the payment of this voucher. The arms yet in store were reinspected by Lieutenant Treadwell, a trusted officer of the Ordnance Department, who made the contract; and he again certified to their character and quality as conformable to the contract. Then an investigation is undertaken by a board of civilians. Inspections directed by them also show the arms to be on an average equal to the sample. They first make a report, condemning all the claimant's arms as unserviceable, and suggesting a deduction from the whole contract price of the entire lot, and then, nearly a month after, they take this back, and find that only about half of the arms had been the subject of complaint. This report, on its face, is founded on a misconception of the contract of the claimant, viz.: that it was to furnish what they call a 'serviceable' arm, when he expressly stipulated to supply an arm equal to the sample. When the claimant exposes the error of the first report, he protests against any repudiation of the contract on the part of the government. Afterwards he receives, in due course of business, from the Treasury Department, a draft for $2301.25 and certificates of indebtedness for $6000, and, in a letter to the United States Treasurer, he acknowledges the receipt of this draft and these certificates, amounting in all to $8301.25. He gives no other receipt or acquittance. He is not required to take the treasury draft and the certificates of indebtedness, or the amount payable on them, in full satisfaction of the whole claim, and he never acknowledged that amount to be in full satisfaction of the whole claim. No such condition is imposed or fulfilled. Plainly, then, the doctrine of the Adams, the Child, and the Clyde cases do not apply.

In the Child case, Miller, J., by words carefully chosen and expressive, rests the decision upon the effect of the receipt in full, required by the government before payment, and executed by the claimant contemporaneously with the payment of the amount allowed. Bradley, J., in the Clyde case does the same.

2. But there are other legal differences between this case and the preceding cases, which render the decisions in the latter inapplicable to the former.

The nature and character of the demand here involved were different from those asserted in the cases cited. The present demand here was for an ascertained and liquidated, and an undisputed amount. It was liquidated by the legal voucher of the proper officer, acknowledging the fact of the contract, the receipt of the arms, their character as in compliance with the contract, the price payable, and the sum due It was liquidated in the full and absolute sense of the rule of the common law, that the payment of a smaller sum cannot be an accord and satisfaction of a larger debt which is fixed and liquidated. By that rule, such a debt as this cannot be discharged by the payment of a less sum, even though it be acknowledged to be received in full satisfaction. This is well settled by the old and authoritative case of Cumber v. Wane, reported by Strange, to be found with notes in 1 Smith's Leading Cases. A fortiori, it cannot be discharged by the receipt of a less sum, which is not agreed to be taken in full satisfaction.

Neither in the Adams, nor the Child, nor Clyde case was the claim liquidated in any absolute sense. In the Child case, Miller, J., speaks of the claim as 'an unliquidated and controverted demand.' And in the Clyde case the amount was not liquidated until the account was stated by the quartermaster at the reduced rate of the Quartermaster-General.

But this was also an undisputed claim. Undisputed in a legal sense.

The theory of the government would appear to have been, that a better or different contract ought to have been made than was made, or that the claimant ought to have furnished better arms than the inspectors were willing and bound to accept, or than the agreement provided for.

The proceedings of the accounting officers, made by instructions from the Chief of Ordnance, cannot be presumed to have been known to the claimant. But if they could be, the character and amount of the deduction from the face of the voucher preclude the idea that he took, or meant to take, the reduced amount in satisfaction of this debt. By the manner of stating this account in the auditor's office, the government proposed to enforce restitution of over $8000 already in the pocket of the claimant, for arms not embraced at all in this voucher. A reduction was made of the price, not only of 472 muskets in this voucher, but of over 800 other muskets long since paid for; and the supposed overpayment on account of these latter was deducted from the amount certified to be payable in the last voucher. Justice could not, in receiving this parcel of the amount due, have meant to acquiesce in this arbitrary action in respect to his debt, and intended to abide by it. For what was the proceeding, but the assertion by the government of a claim against this party for damages for an alleged breach of warranty, the adjudication of that claim in its own favor, and the execution of that judgment out of the money due the claimant in its own hands?

The appearance of the claimant before the Ordnance Board cannot prejudice his right to recover.

The board took cognizance of the matter upon the action of the War Department. The claimant protested before it that, as his arms were accepted after inspection by government authority, the United States could not rightfully decline to pay for all so accepted. In other words, he denied there, as he had the right to do, that there was power anywhere to release the government from the obligation of its contract with him; though he was, at the same time, not unwilling to aid the board or the War Department in any proper investigation of the facts of the case.

The board fell into two errors in regard to facts connected with the transaction. One (in regard to the number of arms complained of) was corrected; the other (in regard to the actual terms of the contract) remained uncorrected, apparently, on the face of their report to the Ordnance Bureau.

Their report was rendered to that bureau. The claimant received nothing from them; was not required to receive anything or to assent to anything; and did not assent to anything.

He cannot, of course, be affected by the action of the accounting officers, under orders of the Ordnance Bureau.

II. Have the United States, independently of the theory of satisfaction, any legal defence to this claim?

1. There is no dispute in regard to the fact and terms of the contract, or that it was made by competent authority of the Ordnance Department. Nor will it be denied that where a party offers to furnish articles like guns to the government, whose officers are experts, subject to the inspection of those officers by a samble delivered and examined at the time, and, after acceptance of the offer, the guns are delivered and inspected, approved and received in good faith, the government is concluded by the determination of its official inspectors and advisers, and cannot withhold payment of the agreed price on the ground that the guns were not suitable to the public service. It has a right to reject and refuse to pay for all arms disapproved in good faith by its inspectors, as not conformable to the sample. But it is bound to pay for all actually approved and accepted in good faith by these agents. As the contractor cannot complain of the decision of the inspectors, rejecting his arms for want of conformity to the sample, so the government cannot repudiate the action of these inspectors in receiving the arms, as, in their judgment, equal to the sample.

Even if the reports of the inspection of the arms in the hands of the regiments in the field were competent legal evidence of their condition, they would be entitled to little or no consideration; for, independently of the abuse to which all arms in the hands of raw troops at that period were necessarily subject, it is well known that the volunteers of that day all desired to be armed with muskets manufactured by the government; and that this did, in point of fact, lead to unfair treatment of other arms.

The idea of fraud or collusion between Justice and the inspectors in this case is not and cannot be pretended.

Yet, further, there was no express warranty by Justice of the quality of the sample arm deposited with Lieutenant Treadwell. That officer thought the sample arm a serviceable one, but Justice never warranted it as such. The government might have chosen to require a warranty, but failing to do so the rule of caveat emptor must govern. The case shows, however, affirmatively, that Lieutenant Treadwell and the other trusted inspectors of the government regarded the sample as a good, serviceable arm; and fully believed that as all the arms received were equal to the sample, they were likewise suitable and serviceable weapons.

2. Nor has the Court of Claims found that any of the arms were not 'good, serviceable arms, fit in all respects for use in the field.' The court has found that the sample arm 'was not equal to the Springfield refle,' and that 'the Justice arms were far from being a first-class arm.' But that might well be, and yet the arms might nevertheless have been good and serviceable. Indeed, Lieutenant Treadwell states that while they were inferior to the Springfield arm, and could not have passed inspection if subjected to that standard, he believed they would prove 'good and serviceable.'

3. But, lastly, the Court of Claims has found, affirmatively, that these arms, while not in all respects similar to the sample arm, were, on an average, not inferior (i. e., were equal in quality) to the sample.

If this finding can be interpreted as meaning (which we doubt) that some of the guns were not equal to the sample, as it does not show how many were so inferior to the sample, nor how much less they were worth than the contract price, the finding can be of no avail to the United States in maintaining this defence. The finding is, therefore, for all the judicial purposes of this case, equivalent to an ascertainment that all the guns were equal in quality to the sample arm.

Mr. Justice DAVIS delivered the opinion of the court.

It is impossible to escape the conclusion, after reading the evidence which the Court of Claims incorporates with its finding of facts in this case, that the arms obtained by the government from Justice were unserviceable and even unsafe for the troops to handle, whether they were equal to the sample arm furnished by him or not. It is true they had been accepted by Lieutenant Treadwell, with whom the contract of purchase was made, after inspection by subordinates appointed by him, but when difficulty arose in relation to them he said, in justification of his conduct, and to show his interpretation of the contract, that he had instructed these inspecting officers to reject all the arms that, in their opinion, were not good and in all respects fit for use in the field. That the duty with which these officers was charged was, to say the least, negligently performed is evident from the result of the subsequent inspection which was ordered. This inspection was in response to serious complaints from three regiments of Pennsylvania volunteers which had been armed with the muskets in controversy. The arms of each regiment were inspected by a separate commissioned officer of experience, and all united in condemning them as worthless, and, indeed, dangerous to those using them.

In this state of case, the Chief of the Ordnance Bureau informed the Secretary of War that he deemed it his duty to withhold payment of one of the vouchers given for these arms until the matter could be further investigated, and recommended reference of the entire subject to the commission then sitting in Washington, which had been constituted by the proper authority 'to audit and adjust all contracts, orders, and claims on the War Department in respect to ordnance, arms, and ammunition.' In accordance with this recommendation the case was referred to this commission, which, after full investigation, and a patient hearing given to Justice, reported that he had not fulfilled his obligation to furnish 'a serviceable arm,' to the government, and fixed a basis on which the account should be settled. This basis of settlement was adopted, and in accordance with it the Secretary of the Treasury, on the 8th of December, 1862, pursuant to a requisition of the War Department, drew his warrant on the Treasurer of the United States in favor of Justice for the amount found due by the accounting officers, which was transmitted to him, and receipt of it acknowledged by letter. After waiting until the five years' limitation to actions of this kind had nearly expired, he brings this suit to recover the balance of the claim, according to the original contract price, and the question is, can he maintain it?

In the nature of things, during such a war as we have just passed through, contracts would in many instances by the made by some of the numerous subordinates intrusted with that duty, in disregard of the rights of the government, or if properly made, would be so unfaithfully executed that the public service would suffer unless their further execution were arrested. Although every just government is desirous of making full compensation to its creditors in all cases of fair dealing, it cannot afford to recognize this rule where an imposition has been practiced upon it. Of necessity it acts through agents, and cannot, therefore, assure its own protection as natural persons in dealing with each other. What, then, was the proper course for the government to pursue in relation to these disputed claims? To pay them, in the existing condition of the country, would set a bad example and lead to the most ruinous consequences, and to withhold payment altogether until Congress or the Court of Claims should act, would be, in case the claim should prove to be meritorious, a hardship. Common fairness required that some mode should be adopted for the speedy adjustment of these differences between the creditor and the government, and what better mode for the accomplishment of this object than the appointment of a commission of intelligent and disinterested persons to hear the respective parties and to settle the allowance to be made? We know by the history of the times, that several commissions for this purpose were appointed during the war, and the record discloses the fact that when this controversy arose these was one sitting in this city, constituted by the Secretary of War under the authority of the President, to audit and adjust claims of like character. It is fair to presume, in the absence of anything in the record to the contrary, that the creation of this commission was a necessity produced by the number and magnitude of the claims presented to the Ordnance Bureau which the head of it deemed unjust, and was, therefore, unwilling to pay. This commission, like all others with similar authority, possessed no judicial power, nor did it attempt to exercise any. It would not compel a claimant to appear before it and submit to its action, nor would its decision, in case there were no adversary party, have any conclusive effect. If, on the contrary, the party whose claim was disputed went before it, participated in its proceedings, and took the sum found to be due him without protest, he cannot afterwards be heard to say that he did not accept this in full satisfaction of his demand. This voluntary submission and reception of the money is an acceptance on the part of the claimant of the mode tendered him by the government for the settlement of his disputed claim, and precludes him from any further litigation.

It is always in the power of parties to compromise their differences. One way of doing this is by arbitrators, mutually chosen, but from such submission neither party is at liberty to withdraw after the award is made. The condition of the government creditor is better than this, for if dissatisfied with the allowance made him by the commission, he can refuse to receive it, or can accompany his receipt of it, if he chooses to take it, with a proper protest. This protest is necessary to inform the government that the compromise is rejected, and that this rejection leaves the claimant free to litigate the matter in dispute before the Court of Claims. If with this knowledge and under these circumstances the money is paid, there can be no just cause of complaint on either side, and the status of the parties is not affected by anything which transpired before the commission.

These views dispose of this case. If it be conceded that the guns obtained from Justice were equal to the sample furnished, still it is manifest they were not a serviceable arm, and were besides unsafe, and that the government withheld the payment of the voucher because the contract, in the opinion of the Ordnance Bureau, was unfaithfully executed. The contract, with the accompanying papers, were referred to the ordnance commission. Justice appeared before it to contest the position of the government, and, although he offered no evidence, argued his case in writing. And as if to leave no doubt of his intention to abide the result, he succeeded, two weeks after the commission had reported on the matter to the Chief of Ordnance, in getting an error against him corrected. And when this was done, and the account stated in conformity with this correction, he receives the amount allowed him without an intimation of dissatisfaction. It is difficult to suppose that at this time he had any other purpose than to acquiesce in the decision which was made. If his purpose were different, why the long delay in instituting suit? It is hard to believe that the course subsequently taken was not the result of an afterthought.

The recent cases in this court of the United States v. Adams and the United States v. Child are like this in principle, although they contain some elements not applicable here.

JUDGMENT REVERSED and the cause remanded to the Court of Claims, with instructions to DISMISS THE PETITION.


text: Talk:United States v. Justice/Opinion of the Court

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United States v. Hunt (81 U.S. 550)

APPEAL from the Court of Claims; the case being thus:

The third section of the act of March 3d, 1865, enacts:

'That from and after the first day of March, 1865, and during the continuance of the present rebellion, the commutation price of officers' subsistence shall be fifty cents per ration: Provided, That said increase shall not apply to the commutation price of the rations of any officer above the rank of brevet brigadier-general, or of any officer entitled to commutation for fuel or quarters.'

Under this enactment, Hunt, a brigadier-general of volunteers, filed a petition in the Court of Claims claiming commutation pay. The United States demurred; thus admitting, of course, that the petitioner was a brigadier-general during the recent civil war, and was not entitled to commutation for fuel and quarters. He was then entitled to the increased commutation for subsistence if his rank of brigadier was not above the rank of brevet brigadier. The question was, was it such?

The Court of Claims gave judgment in favor of the petitioner, and the United States appealed, assigning as error that a brigadier-general is above the rank of a brevet brigadier-general, and therefore not entitled to the benefit of this provision.

Mr. T. J. D. Fuller, in support of the ruling below:

The solution of the question turns upon the word 'rank,' as used in the proviso, and the equality of rank of a brigadier with a brigadier by brevet. The Court of Claims held that the rank of each is the same, and consequently that the one is not above or below the other. Its construction of the act was that the proviso should be read as though the word brevet were not there.

Now we submit that in rank there is no difference between a brevet brigadier, or, more accurately speaking, a brigadier-general by brevet and a brigadier-general without a brevet; that the one may command the other, by virtue of the priority of the date of their respective commissions when thrown together, under circumstances contemplated by the usage of the service and the Articles of War. What is rank in the army? The grades of rank in the army, as known and recognized by law at the present time, are—

1. General.

2. Lieutenant-general.

3. Major-general.

4. Brigadier-general.

5. Colonel.

6. Lieutenant-colonel.

7. Major.

8. Captain.

9. Lieutenants-first and second.

The law knows no intermediate rank, or grade of rank, between the enumerated grades or ranks. There is but one rank of brigadier-generals. There are not two ranks of brigadier-generals, the one inferior or the other superior; but one grade, one rank. There are two kinds of rank in tenure, but nevertheless equal. 'Rank' by brevet is rank in the army generally, as contradistinguished from rank in some one of the divisions of the army. Campbell's Dictionary of Military Science defines brevet to be 'a rank in the army higher than the regimental commission held by an officer. In garrison and brigade duties it confers precedence according to seniority.'

Mr. C. H. Hill, Assistant Attorney-General, contra.

The CHIEF JUSTICE delivered the opinion of the court.

title: United States v. Hunt (81 U.S. 550)


text: Talk:United States v. Hunt (81 U.S. 550)


text:
United States v. Hunt (81 U.S. 550)/Opinion of the Court

Our duty in construing acts of Congress is to give the meaning to words which Congress obviously intended. It may be that in the strict sense of the military term the rank of brigadier and brevet brigadier is the same, but it is well known that practically they are by no neans identical, and that the position of the former is, in many respects, better than that of the latter. Brevet rank is conferred, in theory at least, for special and meritorious services by commission from the President, udner authority of an act of Congress. It does not entitle the holder to corresponding pay or command, except under special circumstances defined by law. When an officer holding rank by brevet receives a regular commission of the same grade, he is said to be promoted and to become a full officer of that rank. These circumstances make it evident that there is a difference of military position between an officer by brevet and an officer by regular commission, and that the one is less eligible than the other. And Congress seems to have referred to this distinction of position rather than to technical rank in the provision under consideration. If they did not, why employ the word brevet at all? Why use the term brevet brigadier when it was so easy to say brigadier, and thus avoid all ambiguity? We think that Congress had in view the distinction between brevet rank and regular rank, to which we have referred, and regarded the latter as above the former. The practice of the Department of War, as we understand, and of the accounting officers, has been in accordance with this view, and seems to us correct.

JUDGMENT REVERSED.


text: Talk:United States v. Hunt (81 U.S. 550)/Opinion of the Court


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Turner v. Smith

ERROR to the Supreme Court of Virginia; the case being this:

Hannon being owner in fee simple and free from lien of a house and lot in Alexandria, granted out of it by an old-fashioned formal ground-rent deed, with clause of right of re-entry, &c., in 1819, a rent charge of $224 to Moore, with right of distress, re-entry, &c. In 1821 Hannon died insolvent, and the rent not being paid, Moore 'took possession' of the house again, though in what mode or whether with any of the requisites of a common law re-entry did not appear.

In 1825 being still in possession he conveyed the rent charge, describing it in form, to one Irwin, and Irwin in 1854 conveyed it with the lot on which it was charged to R. M. and J. M. Smith; Irwin and Smith, each respectively, being in possession of the house and lot, after they became owners of the rent, as Moore had, himself, been after Hannon's death; and each paying the taxes assessed against the house and lot while he held it.

In May, 1861, on the outbreak of the rebellion, Smith abandoned his residence and went within the rebel lines.

On the 5th of August of that year, Congress passed an act laying a 'direct tax of $20,000,000 annually upon the United States,' and apportioning the same in a manner which it set forth, among the several States. The act provided particularly for assessing and collecting of the tax, directing that it should be collected from persons at their dwellings, in the first instance; and if not paid should be obtained by distress and sale of personal property; and if persons could not be found, and there was no personal property, then 'by public sale of so much of the said property as shall be necessary to satisfy the taxes due thereon, together with an addition of 20 per cent.' The act then provided for giving a deed, but did not in any part declare what should be the effect of the sale or deed, or that it should divest liens of any kind.

The act authorized each State to assume, assess, collect, and pay its quota of the tax; and the loyal States did do this. In the rebel States nothing could be done.

On the 7th of June, 1862, Congress passed another act, entitled 'An Act for the Collection of Direct Taxes in Insurrectionary Districts,' &c. The act enacted:

'SECTION 1. That when, in any State,. . . by reason of insurrection or rebellion, the civil authority of the government of the United States is obstructed so that the provisions of the act approved August 5th, 1861 [the act last above mentioned], cannot be peaceably executed, the said direct taxes by the said act apportioned among the several States, &c., shall be apportioned and charged in each, upon all the lands or lots of ground situate therein respectively. . . as the said lands or lots of ground were enumerated and valued under the last assessment and valuation thereof, made under the authority of said State. . . previous to the 1st day of January, 1861; and each and every parcel of the said lands, according to the said valuation, is hereby declared to be. . . charged with the payment of so much of the whole tax laid and apportioned by said act upon the State, &c., wherein the same is respectively situate, as shall bear the same direct proportion to the whole amount of the direct tax apportioned to said State, &c., as to value of said parcels of land shall respectively bear to the whole valuation of the real estate in said State, according to the said assessment and valuation made under the authority of the same. And, in addition thereto, a penalty of 50 per cent. of said tax shall be charged thereon.

'SECTION 2. That on or before the 1st day of July next, the President by his proclamation shall declare in what States and parts of States said insurrection exists, and thereupon the said several lots or parcels of land shall become charged respectively with their respective portions of said direct tax, and the same, together with the penalty, shall be a lien thereon without any other or further proceeding whatever.

'SECTION 3. That it shall be lawful for the owner or owners of said lots or parcels of lands within sixty days after the tax commissioners herein named shall have fixed the amount, to pay the tax thus charged, &c.

'SECTION 4. That the title of, in, and to each and every piece or parcel of land upon which said tax has not been paid as above provided, shall thereupon become forfeited to the United States; and upon the sale hereinafter provided for, shall vest in the United States or in the purchasers at such sale, in fee simple, free and discharged from all prior liens, incumbrances, right, title, and claim whatsoever.

'SECTION 5. That the President of the United States, by and with the advice and consent of the Senate, may appoint a board of three tax commissioners, &c.

'SECTION 7. That the said board of commissioners shall be required, in case the taxes charged on the said lots shall not be paid,. . . to cause the same to be advertised for sale; and at the time and place of sale to cause the same to be severally sold to the highest bidder for a sum not less than the taxes, penalty, and costs, and 10 per cent. per annum interest on said tax, pursuant to said notice; [and the said commissioners shall at said sale strike off the same severally to the United States, at that sum, unless some person shall bid the same or a larger sum,] who shall upon paying the purchase-money. . . be entitled to receive from such commissioners their certificate of sale; which said certificate shall be received in all courts and places as prim a facie evidence of the regularity and validity of such sale, and of the title of said purchaser under the same: Provided, that the owner of said lots of ground, or any loyal person of the United States having any valid lien upon or interest in the same, may at any time within sixty days after said sale appear before the said board of tax commissioners. . . and. . . upon paying the amount of said tax and penalty, with interest, &c., together with the expenses of sale and subsequent proceedings, may redeem said lots of land from said sale.'

On the 6th of February, 1863, Congress passed a short 'act to amend' this act above so largely quoted, and entitled 'An Act for the Collection of Direct Taxes in Insurrectionary Districts,' &c. The new act says that the old act shall be amended so as to read as follows in section 7:

'That the said board of commissioners shall be required,. . . at the time and place of sale, to cause the same to be severally sold to the highest bidder for a sum not less than the taxes, penalty, and costs, and 10 per centum per annum interest on said tax, pursuant to notice, [in all cases where the owner of said lots or parcels of ground shall not, on or before the day of sale, appear in person before the board of commissioners and pay the amount of said tax, with 10 per centum interest thereon, with costs of advertising the same, or request the same to be struck off to a purchaser for a less sum than two-thirds of the assessed value of said several lots or parcels of ground, the said commissioners shall be authorized, at said sale, to bid off the same for the United States at a sum not exceeding two-thirds of the assessed value thereof, unless some person shall bid a larger sum.']

The part in [ ] of the new section is a change, it will be seen, upon the part of the old one (supra, pp. 555-6) in similar [ ].

In a subsequent part of it, this substituted section 7, makes, like the old one, a right of redemption of the land sold (within sixty days), 'to any loyal person of the United States having any valid lien upon or interest in the same;' with a provision for persons under disabilities, &c.

With these statutes on the statute-book, and the property in Alexandria, mentioned at the beginning of this statement, being assessed on the land-book of Virginia, on the 1st of March, 1864, at $3500, the tax commissioners of the United States (not themselves bidding at all) sold it, in professed pursuance of the acts of Congress, for $1750 (less than two-thirds, $2333, of its assessed value) to one Turner, describing it as a house on Royal Street, between King and Prince Streets at Alexandria, in the State of Virginia, 'said to have belonged to R. M. and J. M. Smith,' and charged to them on the land-book of the State aforesaid for the year 1860.

The rebellion being suppressed the Smiths-never having offered as 'holders of a valid lien' or otherwise to redeem brought suit in proper form against Turner to recover certain arrears of the ground-rent. Turner claimed title to the lot free of rent under the sale for taxes, made by authority of the several acts of Congress, already mentioned, for imposing and collecting a direct tax. The decision of the court where the suit was brought was against the title thus set up, that is to say, it was in favor of the Smiths, and their rent, and this decision being affirmed in the highest court of the State, the case was here for review.

Mr. F. L. Smith, for Turner, plaintiff in error:

The length of time in which Moore and those who succeeded him were in possession, that is to say, the lapse of time from 1821 (when Hannon died and Moore resumed possession of his house) to 1864, when this sale was made, is sufficient to raise a presumption of either a re-entry in 1821 with all the requisite forms of the common law, or of a re-lease then or afterwards by Hannon's heirs. After such a term as forty-two years, almost any presumption necessary to sustain a party in possession will e made. By such a re-entry or release, a merger took place, and there ceased to be two separate estates in the one property. The house and lot, free of ground-rent, thus became Smith's; and being regularly sold to Turner, he was owner of it discharged of all incumbrance.

This would all be so on principles of common law, but the fourth section of the act of June 7th, 1862, gives a disincumbered estate to the purchaser, even if the owner of the fee held it incumbered to its entire value. The estate may indeed be defeated by the holder by any valid lien, being a loyal person, if he redeem in the mode specified in the acts. But no such redemption is pretended. In any aspect, therefore, the judgment should be reversed.

Mr. C. W. Wattles, contra:

1. The case showed only that the owner of the rent charge took possession of the premises. A re-entry with common-law formalities cannot from this be inferred, nor a release from the heirs of the owner of the ground. The only inference is an act of trespass by the owner of the rent and a violation by him of the rights of his tenant. And this inference is made a certainty by Moore's conveyance of the rent eo nomine in 1825 to Irwin, as a thing then existing.

No time will run against a rent charge, so as to divest title or extinguish it. The limitation applies only to the recovery of rent in arrears by distress or action. The estate itself remains for all time unless merged or extinguished. The principle is elementary. The case then is that—

1st. Of a title to the land in Hannon's heirs, in fee simple (subject to the rent), at the time of the tax sale; a corporeal hereditament; and,

2d. Of a fee simple title to the rent charge in the Smiths; an incorporeal hereditament.

Hence there were two separate and distinct estates; one of them, the land, was sold for the tax; the other, the rent, remained intact.

It would, indeed, be a forced construction to say that an incorporeal hereditament is a lien, incumbrance upon, or a right, title, or claim to land, in the sense contemplated by the act, for the rent may have been held by a citizen most devoted to the cause of the United States, and residing in a State not in insurrection; who could have no notice of a contemplated sale of his property, either directly or by the terms of the act, as it does not provide for a tax upon such species of property.

2. The land was sold for less than two-thirds of its value. This made the sale void. The act of 1863 requires the tax commissioners to bid off the land to the United States 'at a sum not exceeding two-thirds of the assessed value.' They did no such thing. The assessed value was $3500. Two-thirds of that sum is $2333.33. They sold it for $1750. Literally construed, indeed, the language 'authorized to bid off' may be but permissive, and not mandatory. But it is a general rule of construction that where power is conferred by statute on public officers in language which, literally construed, is but permissive, the language will be construed as peremptory whenever the power is conferred for the benefit of the public or of individuals. And by no court has this doctrine been declared more emphatically than by this. Witness the case of Supervisors v. United States, in which words so little mandatory in form as the words 'may, if deemed advisable,' were construed as imposing a positive and absolute duty; the court citing cases from old reports like Skinner and Salkeld; 'leading cases on the subject,' which it declares 'have been followed in numerous English and American adjudications,' to this day. In the present case the authority was conferred for the benefit of the government of the United States, representing the whole public; and the government had a right to claim its exercise by the commissioners as a duty imperative on them. Congress could not, by the act of 1863, have intended to leave the commissioners to say what lands should be bid off and what not; any more than it could have so intended by the act of 1862, in which, certainly, it did not so intend. It meant, in all cases, to take the land for the United States if it could be obtained on the terms specified in the act, and to deny authority to the commissioners to sell it to any other purchaser.

Mr. Justice MILLER delivered the opinion of the court.

title: Turner v. Smith


text: Talk:Turner v. Smith

title: Talk:Turner v. Smith


text:
Turner v. Smith/Opinion of the Court

Two propositions are relied on to defeat the title under the sale for taxes.

1. That the land was sold at the tax sale for less than two-thirds of its assessed value.

2. That the plaintiffs below, in whose favor the judgment was rendered, were the owners of a rent charge on the land, which was not extinguished by the sale for the unpaid taxes.

1. The first of these propositions is founded on the amendment to the seventh section of the act of June 7th, 1862, passed February 6th, 1863. The latter act undoubtedly was intended to be a substitute for the seventh section of the former, and to supersede it entirely. In a case of doubtful construction it is, therefore, important to consider what changes are made by the latter in regard to the matter now in controversy. By the original section the commissioners who were appointed for the collection of the tax were required, at the time and place of sale, to cause the lots and lands to be severally sold to the highest bidder for a sum not less than the tax, penalty, and costs, and 10 per centum per annum interest on said tax, pursuant to notice, and to strike off the same severally to the United States at that sum, unless some person should bid the same or a larger sum.

The amendment says that the commissioners shall be required, 'at the time and place of sale, to cause the same to be severally sold to the highest bidder for a sum not less than the taxes, penalty, and costs, and 10 per centum per annum interest on said tax, pursuant to notice; in all cases where the owners of said lots or parcels of ground shall not, on or before the day of sale, appear in person before the board of commissioners and pay the amount of said tax, with 10 per centum interest thereon, with costs of advertising the same, or request the same to be struck off to a purchaser for less than two-thirds of the assessed value of said several lots or parcels of ground, the said commissioners shall be authorized, at said sale, to bid off the same to the United States at a sum not exceeding two-thirds of the assessed value thereof, unless some person shall bid a larger sum.'

The first act and the second are alike in the provision that the land shall be sold to the highest bidder for a sum not less than what is due on it for tax, interest, and cost. This, in both cases, refers to bids by others than the United States. In reference to bids made by the commissioners on behalf of the United States, there is a change. The first statute made it imperative that the commissioner should strike off the land to the United States at the amount of the tax, interest, and costs, unless others bid that or a larger sum; and it is a fair inference that the commissioners were not authorized to bid at all for the land, unless it be called a bid to strike it off to the government, when no one else would take it, for the tax, interest, and costs.

The second statute makes a material change in this part of the law. When the owner does not pay, or request the same to be struck off to a purchaser for a less sum than two-thirds of its value, the commissioners are authorized to bid off the same to the United States at a sum not exceeding two-thirds of such assessed value.

The intention in making this change seems to us to be to remove the restriction by which the United States must either take the land for the taxes, or let it go to whoever would pay the taxes, or any greater sum, if he was the highest bidder. After the amount due was offered the government was, by the first statute, no longer a competing bidder, and the owner was at the mercy of private bidders. Under the new statute the commissioner could become a competitor after the amount of the tax was bid, with two limitations. First, he should not bid against a purchaser whom the owner, by request, preferred. And, secondly, he should not bid beyond two-thirds of the value.

Instead of being bound to bid that sum, he was authorized to bid any sum not exceeding that, and could not bid that if the purchaser requested that it might be struck off to a friend for less than that sum. If the language had been that he was authorized to bid it off at two-thirds, it would be a forced and unnatural construction of the section to hold that the words were imperative. The language which would express that idea would be that he was required to do it, or that he should not bid it off for a less sum. But here, while he is authorized to bid, that bid may be for any sum not exceeding two-thirds its value.

But the sale in this case comes within the first category. The United States did not bid at all. A private person bid a sum sufficient to pay the tax, interest, and cost, and the commissioner let him have it, and we see nothing in the statute which forbids it. Certainly we cannot infer because the United States authorized the commissioner in a defined contingency to bid off the land for a sum not exceeding two-thirds its value, that he was therefore bound in all cases to make it bring that much.

We think there was error in the Appellate Court of Virginia in holding the sale void because this was not done.

2. In the act of August 5th, 1861, apportioning the tax of $20,000,000 among the States, according to population, provision is made for its collection out of the lands within those States, if not paid by the States. Under the provisions of that act it might admit of some doubt whether the tax was in its essence a tax on the land, and on all the various estates into which the fee may have been divided, or was a tax on the owner of the land, and levied on the interest of the owner in it, and on no other subordinate or incorporeal interest. But no tax was ever collected, or any land sold under that act. The States which, in the war for the support of which this tax was levied, supported the General Government, assumed and paid the portion allotted to each. With regard to the States which were in insurrection, Congress passed a new law for the assessment and collection of their portion, under which the sale in this case was made. That act, the statute of 1862, to which we have already referred, directed the commissioners to whom the collection of the tax was intrusted, to take the last assessment of the value of the lands made in each State for State taxation as the basis on which the tax charged to that State by the act of 1861 should be apportioned among the several lots and parcels within that State, and a penalty of fifty per cent. was added in each case for non-payment. The President was directed to declare by his proclamation what States or parts of States were in insurrection, and 'thereupon the said several lots or parcels of land became charged respectively with their respective portions of said direct tax, and the same, together with the penalty, became a lien thereon, without any further proceedings whatever.' Section three gave a time in which this tax might be paid, and section four proceeds to say that 'the title of, in, and to each and every parcel of land upon which said said tax has not been paid as above provided, shall thereupon become forfeited to the United States, and upon the sale hereinafter provided for shall vest in the United States, or in the purchaser at such sale, in fee simple, free and discharged from all liens, incumbrances, right, title, and claim whatsoever.'

There is nothing in the statute which requires the tax commissioners to hunt up the owner, or to make the tax out of personal property of his, or which may be found upon the land. It is clearly a direct tax on the land, and on all the estates, interests, and claims connected with or growing out of the land. All this was forfeited to the United States on non-payment of the taxes, and passed with the sale to the purchaser, subject alone to the right of redemption, which the law allowed. In that respect it was a defeasible title, but in all other respects perfect, complete, and entire. The language of the statute is explicit to this purport, and the policy and necessity of the government, which could not look after the fugitive and hostile owners, required such a tax, and such a mode of collecting it.

We are of opinion, therefore, that the sale being a valid one the rent charge of the defendant in error was cut off and destroyed by it.

JUDGMENT REVERSED, and and cause remanded for further proceedings IN CONFORMITY TO THIS OPINION.

title: Turner v. Smith/Opinion of the Court


text: Talk:Turner v. Smith/Opinion of the Court


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Gregg v. Moss

ERROR to the Circuit Court for the Northern District of Illinois; the case, as assumed by the court from a bill of exceptions covering thirty 8vo. pages, in long primer type, without any assignment of errors, having been thus:

Richard Gregg sued W. S. Moss, in assumpsit, on this instrument; Kellogg, the party signing it with Moss, having been wholly insolvent.

PEORIA, December 23d, 1856.

RICHARD GREGG, ESQUIRE.

DEAR SIR: Mr. Elder is here, and wants to take the funds with him to pay drafts due to-morrow. It is not right that he should be forced to pay this money for our accommodation. If you will send us two drafts at sixty days, $5000 each, we will return you the money before the expiration of the sixty days. It must be done, as we cannot get along any other way. Mr. E. wishes to leave in the cars.

Yours truly,

W. KELLOGG,

W. S. MOSS.

The defendant pleaded non assumpsit, &c.

On the trial no question was made but that the money asked for in the letter, or its equivalent, had been advanced by the plaintiff. But it seemed that there existed at that time in Peoria, where the transaction occurred, and where all the parties resided, a partnership formed, to build a railroad, styled Kellogg, Moss & Co., of which the plaintiff and defendant, and Kellogg and others were members, and that the money furnished by Gregg had been used for the benefit of this partnership, which had now spent its funds and failed in its enterprise. The defendant alleged that the money had been advanced by the plaintiff to the partnership, and on its credit, and not on the individual credit of Kellogg and Moss; and that if this were not so at the time, that the plaintiff afterwards (on the 1st of December, 1857) had agreed that this sum, with others advanced by him to the partnership, should become capital in the partnership business, and thus increase his share of the capital.

The plaintiff proved the signatures to the letter, and that the sum mentioned in it was received by Kellogg, partly in money and partly in drafts, which answered the purpose; and, in the further progress of his case, offered to prove by a competent witness that only a few minutes after Kellogg had obtained the money, he told the witness that he had received the money from the plaintiff, and had 'fixed Elder off,' and that Elder had gone home. On objection by the defendant the court excluded the testimony, and the exclusion was the subject of the first bill of exceptions.

Testimony was given on both sides on the point above stated to have been the grounds on which the defendants chiefly put the case, to wit, that the $10,000 had been advanced, originally to the partnership, and on its credit; and if not, that by the agreement of 1st December, 1857, the plaintiff had agreed that it should become capital in it. It was not denied that all the partners of the firm of Kellogg & Co., had, on the 1st of December named, made an agreement reciting that some of the members had advanced money and funds beyond their shares in the partnership, and agreeing that 'each and every member of the said firm should make a statement of. . . advancements made to said firm, together with 10 per cent. interest from the dates of them, which after the said 1st of December, 1857, should remain as the capital stock of the firm, and represent the capital stock of each individual member of the firm, and fix their interests therein respectively and pro tanto.' But Gregg swore that he had never funded this debt; that he had made out the statement in accordance with the agreement of December 1st, 1857, and that this $10,000 was not included in that account. Other testimony, however, tended to prove that when the agreement of 1st December was made Gregg did agree to put in this $10,000, and that it was one condition on which other partners signed it.

The evidence being closed the court charged fully saying, among other things, to the jury:

'If the evidence satisfies you that the plaintiff, at the time the agreement of the 1st of December, 1857, was made, assented to treat this $10,000 as a part of his advances to the firm of Kellogg, Moss & Co., and to have the same funded, as contemplated in said agreement, such assent on his part is binding upon him, and releases Kellogg & Moss from their promise to pay the said sum or see the same paid. It is a substitution of the liability of the new firm to ultimately reimburse this amount as a part of the capital put into the old firm by the plaintiff for the individual liability of Kellogg & Moss, to him. But it is for you to say, under the evidence, whether such assent or agreement to fund was, in fact, made or not. If made, the defence is made out.

'Nor is it material whether the plaintiff afterwards included this amount in his statement of advances to the old firm or not. It is enough that he agreed to do so. Granting that Kellogg & Moss were liable to make it good to him in December, 1857, still, if the plaintiff agreed that the sum for which they were so liable should be carried over to his capital stock with Kellogg, Moss & Co., then the agreement is binding on the plaintiff, because this sum had already clearly been put into the affairs of the firm, and either the plaintiff or Kellogg & Moss were entitled to have it charged up as part of the assets furnished and sunk in the past business of the firm.'

Verdict and judgment having gone for the defendant the case was now brought here, where it was submitted on a printed brief of Mr. O. Jackson, for the plaintiff in error; a like brief by Messrs. Harding and McCoy, for the defendant in error; a reply by Mr. Jackson, and an answer by Mr. Harding to the same. The argument of the counsel of the plaintiff in error was directed to prove,--

1st. That there was error in the exclusion of the testimony to show what Kellogg had said a few minutes after obtaining the money; that this ruling was erroneous, because the plaintiff had a right to prove the admission of one of the joint promisors as to the receipt of the money, made at about the time of or immediately after the transaction took place; a position which the learned counsel sustained by an able argument; relying on Lowle v. Boteler, Bachman v. Killinger, Cady v. Shepard, and other cases in Massachusetts and elsewhere, though he admitted that the rule was different in New York, and perhaps in some other States.

2d. Because, as matter of fact, the testimony did not show with sufficient certainty either that the plaintiff had originally advanced the money to the partnership, or that he had subsequently, on the 1st of December, 1857, agreed to fund it.

3d. That the charge on this branch of the subject (and quoted supra) was erroneous.

Mr. Justice MILLER delivered the opinion of the court.

title: Gregg v. Moss


text: Talk:Gregg v. Moss

title: Talk:Gregg v. Moss


text:
Gregg v. Moss/Opinion of the Court

This cause has been submitted to us on printed arguments on each side, with replies and counter-replies, none of which contains any regular assignment of errors, as required by the twenty-first rule of this court. The record presents a bill of exceptions of thirty printed pages of testimony, which is certified to be all that was given on the trial, and the arguments address themselves to the entire merits on this evidence.

We have felt very much inclined to dismiss the writ of error or affirm the judgment without an attempt to look up the questions of law which might possibly be involved in the record, for the number of cases coming to this court in which the bill of exceptions embodies all the evidence offered, and counsel, tempted by this, argue before us the whole case as if the verdict concluded nothing, requires a decisive remedy.

As far as we are able to see there are but two questions of law raised by the record.

The first relates to the exclusion of a single item of evidence offered by the plaintiff, and the second to the charge of the court.

The plaintiff having proved the signatures to the letter of December 23d, 1856, and that the sum mentioned in it was received by Mr. Kellogg, offered in the further progress of his case to prove by a competent witness that only a few minutes after Kellogg had obtained the money he told the witness that he had received the money from the plaintiff, and had 'fixed Elder off,' and that Elder had gone home. The exclusion of this testimony is the occasion of the first bill of exception.

We have a learned argument on the vexed question of the admissibility of the declarations of one partner, or joint obligor, against the other. But we are of opinion that the ruling of the court presents no error which should reverse the judgment, because its rejection worked no harm to the plaintiff. The execution of the paper was not denied, nor was it controverted, except by the general form of the pleading, that Kellogg had received the money. It had already been proved by several other witnesses and was at no time made a point in the case. The whole controversy before the jury turned on the question whether the money so received was advanced by Gregg on the credit of Kellogg and Moss alone, and if so, whether he had afterwards agreed to convert it into capital. The admission of Kellogg that he had received the money from Gregg gave no light on either of these questions. The judgment should not be reversed for the rejection of this testimony, whether it was in strict legal principle admissible or not.

The brief of the plaintiff proceeds to argue that the evidence before the jury does not sustain either of the allegations of advancing the money to the partnership, or the agreement of the plaintiff to convert it into capital of the partnership. With this we can have nothing to do. It was the province of the jury to determine whether either of these allegations was proved, for either of them was a valid defence to this action, and they have found in favor of defendant.

It is argued, however, that the instructions of the court on this branch of the subject were erroneous-to the prejudice of the plaintiff.

We have examined carefully the points of the charge objected to as well as the other parts of it, and, without elaborating the matter, we are of opinion that it puts this, the turning-point of the case, to the jury on fair grounds, and we can see no objection to the legal propositions stated by the court and excepted to by counsel.

JUDGMENT AFFIRMED.

title: Gregg v. Moss/Opinion of the Court


text: Talk:Gregg v. Moss/Opinion of the Court

title: Talk:Gregg v. Moss/Opinion of the Court


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Philpot v. Gruninger

ERROR to the Circuit Court for the Northern District of Illinois; the case being this:

On the 19th of October, 1864, Gruninger, by articles of agreement, sold, or agreed to sell, to B. Philpot and H. Picket, residing at Titusville, Pennsylvania (who, with George Sherman, of Philadelphia, had been speculating in oil wells), a well 'on the Blood Farm,' near the town named; Philpot and Picket agreeing by the articles to pay Gruninger $3500 within thirty days. The money was not thus paid. Gruninger, after the sale, went to Massachusetts, but by the 24th of February, 1865, had returned to Titusville. On the day just mentioned Picket writes to him expressing satisfaction at his return, and acknowledging the receipt of a letter from him 'some time since; an answer to which had been neglected on account of press of business until it had passed out of mind,' and saying:'I think we can fix up that Blood Farm matter satisfactorily, when you come up.'

By the 21st of April, 1865, Philpot, Picket, and the Sherman already named had become interested as partners, under the name of Philpot, Sherman & Co., in the well on Blood Farm (if indeed Sherman had not been partner with the other two from the first) and in other oil wells; and on that day the partnership, under the firm name, along with several other projectors in oil (not, however, including Gruninger) entered into an agreement to form a joint stock company; Philpot, Sherman & Co. agreeing to put into the company certain wells, but not this one, which they had bought or agreed to buy, on the Blood Farm.

On the 6th of May, 1865, Gruninger also agreed to put in a certain well which he still owned; one on the Smith Farm; and on the same day, by deed, witnessed and acknowledged, 'in consideration of the sum of $3000,' which was acknowledged to have been to him 'paid, and the receipt of which he acknowledged,' conveyed to Philpot, Sherman & Co., the already mentioned well on the Blood Farm. On that same day, but without reciting on account of what transaction, Philpot gave the firm note for $3000, payable to Gruninger on demand.

The joint stock company apparently fell through. Gruninger, at any rate, would not put in his well on Smith's Farm.

On the 5th July, Picket, one of the persons to whom Gruninger had agreed to sell the well on the Blood Farm, and a member of the now admitted firm of Philpot, Sherman & Co., writes to Gruninger, from Titusville, signing the firm name:

'We have learned that the note given you by our firm has been sent to Philadelphia for collection. All I can say is, we are, at present, unable to pay it. The change in times has so contracted our means as to make it doubtful if we are able to pay your note in cash at all. We will be glad to settle with you by letting you have some good property any time; but money, at the present time, is out of the question with us. Let us hear from you soon.'

And on the same day Philpot, in Philadelphia, writes to him from there:

'The note given by me to you has been presented by a collector for payment. We think this a strange proceeding under the circumstances the note was obtained, and a part having been paid. We have your name to a contract assigning us your interest in well on the Smith Farm, and we would recommend that you withdraw that note, and, as soon as convenient, meet us in Philadelphia, when a satisfactory adjustment of the whole can be arrived at. If you push that note, we shall assuredly demand that interest which we have you bound for, and proceed accordingly.'

Gruninger replies, two days afterwards, by a single letter addressed to the firm:

'Yours of July 5th was received with one also of same date. You write me that the note given by you to me was presented to you by a collector for payment, and you think it a very strange proceeding. I myself can't see anything strange in it. You know that the note ought to have been paid this long time. I am in need of money, and must have it.

'I am sorry to see you mention in your letter about a contract I assigned to you, and you would 'recommend me to withdraw that note as soon as convenient,' &c.; and that if I push that note you shall demand the interest, which, you say, you have me bound for, and proceed accordingly. If you think this kind of talk goes with me, you better try it. I am sorry that you have wrote so. And the note I have given to collect must and shall be collected, if--. I am sorry to answer you in this way, but you commenced it.'

No arrangement being made, Gruninger sued all three persons as partners on the note. Philpot and Picket pleaded jointly and Sherman separately and alone. The defence was, in substance, that the note was given by them to Gruninger in consideration of the agreement of Gruninger that he would become a member of the proposed oil company, and put certain property in it, and also in consideration of the transfer to them of the well on the Blood Farm; and that he had failed and refused to perform his agreement, and that the well had no value.

Gruninger, on the other hand, asserted that it was given in consideration alone of the transactions of October 19th, 1864, and of an existing debt.

The controversy thus involved was, of course, what the consideration of the note really was.

On the trial the defendants offered in evidence articles of partnership dated 8th November, 1864, and between them, in order to show that the partnership between the three was not in existence when the articles of agreement of October 19th, 1864, were made; but they did not offer or propose to offer any other evidence of the same fact.

The court rejected the articles.

The plaintiff and defendants each gave evidence tending to show on the one side that the well on the Blood Farm was worth what it cost, on the other that it was worthless.

In charging, after adverting to the various letters already quoted, including that of July 5th, by Picket, in the firm's name, in which no objection is taken to the validity of the note, and the cause of its non-payment is stated to be that the firm was then unable to pay it in money, and after adverting to some other evidence the court said:

'If, in point of fact, the note was given in consideration of past transactions, of obligations already accrued or accruing, then, of course, the defence fails.

'If, on the other hand, the note was given in consideration of the agreement, on the day, 6th of May, made by Gruninger, to enter into the company; and also, in consideration of the transfer of the said well, and he did not enter into the company, but failed to comply with his agreement, and there was no value in the well, as stated in the plea, then the defence is made out.'

The court, however, said further:

'But it is proper for you to consider whether or not this might have been the state of the case: that there were transactions between the parties; that there was a claim on one side, and which may have arisen, or did arise, in consequence of these transactions. Now, was there a present, existing indebtedness from Philpot and Picket, or from Philpot, Sherman & Co., to Gruninger, and was the execution of this agreement by Gruninger, on the 6th of May, simply a motive for the giving of the note and not the consideration of the note? It may be that that was held out as an inducement to the defendants to give the note, as a motive for putting the debt in the shape of a note rather than let it remain in its then present form. If that were so, then the defence would fail, because that proceeds upon the ground, as I understand, that the actual consideration of the giving of the note, not the motive for putting the claim in that form, was the signing of this agreement of the 6th of May, and the transfer of the well on the Blood Farm.

'It may well happen that A. may owe a valid debt to B., and B. may say to A., 'If you will put the debt in the shape of a note I will do some act for you;' and then, when it is done, the promise to put the debt in that shape is not the consideration of the note, but the debt which is due from one to the other.'

The jury found for the plaintiff, and judgment was given accordingly. On exceptions to the portion of the charge last above quoted, and to the rejection of the partnership articles, and on some other matters not necessary in any part to be reported, the case was now here.

Messrs. S. B. Gookins and J. H. Roberts, for the plaintiffs in error:

I. The jury were misled in view of the evidence in this case

First. By the distinction made by the court between the motive or inducement for giving the note, and the consideration of the note; and,

Secondly. (If the distinction were a sound one) in applying it to the contingency of a present existing debt from Philpot and Picket or Philpot, Sherman & Co., whereas it should have been confined to a present existing indebtedness from Philpot, Sherman & Co.

As to the latter proposition—

Assuming that the jury might have fairly found that there was a debt of $3500 from Philpot and Picket only for the well purchased on the 19th of October, 1864, yet, as to Sherman, who did not owe the debt, what possible motive could he have for becoming liable to Gruninger for this debt? 'The execution of this agreement by Gruninger,' says the court. Then, if without that agreement he would not have been induced to put the debt in that shape, it follows that such agreement was, as to him, the consideration of the note.

As to Sherman, therefore, especially, this distinction between the motive or inducement and the consideration, if well founded in any case, was inapplicable to the facts in evidence, and was, therefore, well calculated to, and in fact did, mislead the jury.

Then, as to our first proposition, that the distinction made by the court, in view of the evidence in this case, between the consideration of the note and the motive or inducement operating to cause defendants to give it, misled the jury.

There was obviously controversy between Gruninger and defendants just previous to and at the time this note was given, as to the sale of the well on the Blood Farm. Concede that the evidence is insufficient to show that it was worthless, and that on the whole the defendants were lawfully indebted to Gruninger $3500 for it, but in good faith thought otherwise and refused payment or would only consent to pay or execute the note in question, provided Gruninger would agree to go into and put his property into the proposed new company.

Now, says the court to the jury:

'It may well happen that A. may owe a valid debt to B., and B. may say to A., 'If you will put the debt in the shape of a note I will do some act for you;' and then, when it is so done, the promise to put the debt in that shape is not the consideration of that note, but the debt which is due from one to the other.'

This was put by way of illustration, to show the distinction between the consideration and the motive or inducement. If this distinction is known to the books, it can only apply to such a case as this put by the court, where A. owes a valid debt to B. and does not dispute it, but it could never apply to a case where, although A. owed a valid debt to B., he believed otherwise and denied it, and B. in order to induce A. to give him an acknowledgment of it in the shape of a promissory note, promises on his part to do some other thing. In such case, while the valid debt may be in part the consideration of the note, it is not the whole consideration, and to allow B. to repudiate his promise and sue and recover on that note would be to encourage fraud.

II. We submit also that the court erred in excluding from the consideration of the jury the articles of copartnership between Philpot, Sherman, and Picket.

Mr. O. K. Hutchings, contra.

Mr. Justice STRONG delivered the opinion of the court.

title: Philpot v. Gruninger


text: Talk:Philpot v. Gruninger

title: Talk:Philpot v. Gruninger


text:
Philpot v. Gruninger/Opinion of the Court

That a part of the consideration of the note was the debt due for the oil well which Gruninger had sold six months before to Philpot and Picket, or that the note was intended as an adjustment of that debt, is but faintly denied; but the plaintiffs in error insist that a part at least of the consideration was the agreement of the promisee to contribute to the formation of the proposed company, an agreement which they allege he has failed to perform; and they complain that the jury were misled by an instruction that they might consider whether the signing of the agreement, or the undertaking of Gruninger to put into the company the interests mentioned, was anything more than an inducement to the making of the note by the defendants, furnishing a motive for giving it, but constituting no part of the consideration.

It is, however, not easy to see how the jury could have been misled, to the injury of the plaintiffs in error, by calling attention to a possible distinction between the motive which may have induced giving the note and its consideration, even if no such distinction can be made. For if it be assumed, as was claimed, that the promisee's undertaking to unite in the formation of a joint stock company was a part of the consideration, it could not aid the promisors. It would not be a step toward showing that the consideration had failed. Gruninger's neglect or refusal to perform his agreement is not to be confounded with the agreement itself. The latter was the consideration, not its performance. He might be answerable in damages for non-performance, but his undertaking to perform would have been the price of the defendants' promise. That undertaking they stil have, and with it the full consideration. Nothing is more common than a promise in consideration of a promise, and the defendants' pleas in this case aver that Gruninger's undertaking was the price of their stipulation. Were it then conceded, as the defendants claimed, the jury would not have been warranted in finding that the consideration of the note had failed.

It is, however, not to be doubted that there is a clear distinction sometimes between the motive that may induce to entering into a contract and the consideration of the contract. Nothing is consideration that is not regarded as such by both parties. It is the price voluntarily paid for a promisor's undertaking. An expectation of results often leads to the formation of a contract, but neither the expectation nor the result is 'the cause or meritorious occasion requiring a mutual recompense in fact or in law.' Surely a creditor may do a favor to his debtor, or may enter into a new and independent contract with him, induced by which the debtor may assent to giving a note for the previously-existing indebtedness. Without the favor or the new contract there is in such a case a full consideration for the note, and the parties may not have contemplated that the favor or the new contract was to be paid for. To regard them as entering into the consideration of the note would be to make a contract for the parties to which their minds never assented.

It is argued that if Sherman did not owe the debt due from Philpot and Picket to Gruninger (as the jury might have found), there was no motive or inducement, much less even consideration, for his becoming a joint promisor in the note, unless it was Gruninger's agreement, and hence it is inferred that the jury were misled in being allowed to consider that agreement as merely a motive or inducement to his assumption. But he was then a partner of Philpot and Picket, and a joint owner with them of the property for which the debt had been contracted. A consideration moving to his corpromisors was enough to support his promise. The note was given for a smaller sum than the price for which the property had been sold to them. It was accepted as a settlement of the promisee's claim, and a conveyance of the property was made to all the defendants, including Sherman. There was, then, adequate consideration for his promise apart from Gruninger's agreement to put other property into the proposed company. For these reasons, we think, there was no error in the instructions given by the court to the jury.

The second assignment is that the court erred in excluding articles of copartnership between the defendants, dated November 8th, 1864. They were offered to show that the partnership did not commence until after the sale of the oil well was made to Philpot and Picket, which was on the 19th of October, 1864, and therefore that Sherman was not a debtor to Gruninger at that time or when the note was afterwards given. The proposed evidence seems to have been intended to show that the debt due for the well was not the consideration of Sherman's promise, and to raise the inference that Gruninger's agreement to join in forming the stock company was. We have already considered that, and from what we have said it appears that the rejection of the evidence did not injure the the defendants. That there was error in the rejection has not been seriously contended.

JUDGMENT IS AFFIRMED.


text: Talk:Philpot v. Gruninger/Opinion of the Court


text:
Page:Folklore1919.djvu/542

176 them down; but some time later when he had begun the study of Coptic he found that they must have belonged to that language, and accordingly made many efforts through his converts to recover them. But it was then too late; the generation which had preserved the memory of a song that was no longer intelligible had already passed away.

Religion long kept the two races, Arab and Egyptian, apart, and when eventually the Christian fellaḥ in the neighbourhood of Cairo had become Mohammedan, the Mohammedan Arab had become a townsman with a townsman’s sense of superiority over the country bumpkin. Hence the humour of the Cairo folk-tales is directed against the fellaḥ because he is a fellaḥ ignorant of the ways of the city, and for no other reason. The Arab of Cairo, indeed, felt himself the inferior rather than the superior of the city Copt: the financial and civil administration of the state was practically in Coptic hands, and the skilled artizan was almost always a Copt, as he continued to be down to the time when I first knew Cairo, what we call “Arab” art being really the art of Christian Egypt. I know of no Cairene folk-tales which satirize the Copts as such; Cairene wit is directed against the fellaḥin, the Nubians, the Europeans, and more especially the Turks, but not against the Copts.

The Turk was hated on account of his rapacity, his cruelty, and above all, his stupidity. This is the feature which is chiefly prominent in the stories in which he figures. The sharp-witted Cairene revenged himself upon Turkish tyranny by caricaturing him and inventing stories at his expense. And the stupidity of the Turk is represented, not as the naïve stupidity of the ignorant fellaḥ, but as an innate and overwhelming stupidity which no amount of education would cure.

The folk-tales of Upper Egypt are of a different class altogether. There is nothing of the city in them, and

title: Page:Folklore1919.djvu/542


text:
The Delaware

APPEAL from the Circuit Court for the District of California; the case being thus:

The Oregon Iron Company, on the 8th of May, 1868, shipped on board the bark Delaware, then at Portland, Oregon, 76 tons of pig-iron, to be carried to San Francisco, at a freight of $4.50 a ton. The bill of lading was in these words:

'Shipped, in good order and condition, by Oregon Iron Company, on board the good bark Delaware, Shillaber, master, now lying in the port of Portland, and bound to San Francisco, to say seventy-five tons pig iron, more or less (contents, quality, and weight unknown), being marked as in the margin, and are to be delivered in like good order and condition at the aforesaid port of San Francisco, at ship's tackles (the dangers of the seas, fire, and collision excepted) unto _____, or assigns, he or they paying freight for the said goods in United States gold coin (before delivery, if required), as per margin, with 5 per cent. primage and average accustomed.

'In witness whereof the master or agent of said vessel hath affirmed to three bills of lading, all of this tenor and date; one of which being accomplished, the others to stand void. Vessel not accountable for breakage, leakage, or rust.

'C. E. SHILLABER,

'For the captain.

'PORTLAND, May 8th, 1868.'

The iron was not delivered at San Francisco; and on a libel filed by the Iron Company, the defence set up was that by a verbal agreement made between the Iron Company and the master of the ship before the shipment or the signing of the bill of lading, the iron was stowed on deck, and that the whole of it, with the exception of 6 tons and 90 lbs., had been jettisoned in a storm.

On the trial, the owners of the vessel offered proof of this parol agreement. The libellants objected, and the court excluded the evidence on the ground that parol proof was inadmissible to vary the bill of lading; and decreed in favor of the libellants for the iron that was thrown overboard. On appeal the case was disposed of in the same way in the Circuit Court. It was now here; the question being, as in the two courts below, whether in a suit upon a bill of lading like the one here, for non-delivery of goods stowed on deck, and jettisoned at sea, it is competent, in the absence of a custom to stow such goods on deck, to prove by parol a verbal agreement for such a stowage.

The District Court, in its opinion, among other things, said as follows:

'It is not disputed that the ordinary bill of lading imports that the goods are to be safely stowed under deck. It must also be admitted that, if they are stowed on deck with the consent of the shipper, or in accordance with a well-established and generally recognized usage, either of the particular trade or in respect of a particular kind of goods, the ship will not be liable. The point presented is, whether the consent of the shipper can be proved by parol.

'The case of Creery v. Holly, is directly in point. In that case Mr. Justice Nelson says:

"It is true that in this case nothing is said in the bill of lading as to the manner of stowing the goods, whether on deck or under deck; but the case concedes that the legal import of the contract, as well as the understanding and usage of merchants, impose upon the master the duty of putting them under deck, unless otherwise stipulated; and if such is the judgment of the law upon the face of the instrument, parol evidence is as inadmissible to alter it as if the duty was stated in express terms. It was part of the contract. It seems to me it would be extremely dangerous, and subject to the full force of every objection that excludes the admission of this species of evidence, to permit any stipulation, express or implied, in these instruments, to be thus varied. . . . If the implied obligation of the master in this case, arising out of the conceded construction of the bill of lading, may be varied by parol evidence, I do not see how any other stipulation included in it could be sustained upon an offer to impeach it in the same way."

'In Niles v. Culver, the same principle was applied to a memorandum, which imported a contract.

'In White v. Van Kirk, parol proof offered by a shipper of goods to show that the master agreed to take a particular route was held to be inadmissible.

'In The Waldo, the language of Mr. Justice Ware is nearly identical with that of Mr. Justice Nelson, above quoted:

title: The Delaware


text: Talk:The Delaware

title: Talk:The Delaware