text:
Railroad Company v. Trimble/Opinion of the Court

The controversy between the parties in this court is confined to questions relating to the title of the defendants in error under the extended patent of August 23, 1860, alleged to have been infringed by the plaintiffs in error. The instruction given, and those refused by the court below, which are brought under review, must be examined in the light of the fascts which the bill of exceptions discloses. Before proceeding to consider the main questions in the case, we deem it proper to dispose of others arising upon the record in regard to which we have found no difficulty and entertain no doubt.

The deed of Isaac R. Trimble of the 30th of May, 1861, conveyed all his rights under the patent, whatever they may have been, to the grantees in that instrument. If his title was sufficient, theirs is so. This was not controverted by the counsel for the plaintiffs in error, and needs no further remark.

The assignment of the 11th of June, 1864, to Aaron E. Burton, made by John E. Shaw, as receiver appointed in the case in equity in the Supreme Court of Pennsylvania, wherein Joseph Stone, administrator of Daniel Stone, was complainant, and Isaac R. Trimble defendant, was a nullity, and as such may be land out of view. Looking into the record we find no evidence of the issuing of any process against Trimble, or that he was notified of the pendency of the suit by publication or otherwise. It does not appear that there was any step whatever taken to bring him before the court. The entire proceeding, as disclosed, was coram non judice and void. It may be added that Trimble's deed to his co-plaintiffs was prior in date to the filing of the bill, and that the title of the grantees in that deed could not be affected by a proceeding to which they were not parties.

If Trimble at the date of that deed held the title under the extended patent, which the defendants in error insist he had, the deed of confirmation to him from Howe's administrator, of the 18th of September, 1854, touching the patent of 1846, extended by the one in question, was inoperative and useless. It was referred to in the argument, as showing the construction put by the parties upon the deed of Howe to Trimble of the 9th of July, 1844. Where there is doubt as to the proper construction of an instrument, this feature of the case is entitled to great consideration. But where its meaning is clear in the eye of the law, the error of the parties cannot control its effect. In this view of the subject, conceding that Trimble took this conveyance, not out of abundant caution and to solve in his favor a doubt which might otherwise possibly arise against him, but because he deemed it necessary to give him a title which he did not already possess, his legal rights in this controversy are just what they would have been if that instrument had not been executed.

If the construction given to the deed of Howe by the counsel for the defendants in error be correct, and no part of the title vested in Trimble by that deed passed to Daniel Stone by the agreement of the 30th of September, 1846, between him and Trimble, as the counsel for the defendants in error insist, there was nothing for the deed of Howe's administrator to Stone of the 1st of April, 1861, nor for the deed of Stone's administrator of March 6, 1865, to Burton, to operate upon, and both of them were also without effect upon the rights of the parties in this litigation.

This brings us to the examination of the deed of Howe to Trimble, and of the agreement between Trimble and Stone. They are the hinges upon which the controversy turns. The stress of the argument on both sides was properly confined to these subjects in their several aspects of fact and of law.

The deed from Howe recites that he had obtained from the United States two patents for new and useful improvements in the construction of truss bridges and other structures, one dated on the 10th of July, the other on the 3d of August, in the year 1840. The instrument is a deed poll. After setting out the consideration, it proceeds as follows: 'I have assigned, sold, and set over, and do hereby assign, sell, and set over, all the right, title, and interest which I have in said invention, as secured to me by said letters-patent, and also all right, title, and interest which may be secured to me for alterations and improvements on the same from time to time, for, to, and in the following states, viz.,' &c. . . . 'the same to be held and enjoyed by the said I. R. Trimble for his own use and behoof, and for the use and behoof of his legal representatives to the full end of the term for which said letters-patent are or may be granted, as fully and entirely as the same would have been held and enjoyed by me had this assignment and sale not have been made.' A careful analysis of these provisions eliminates the following results: Howe assigns to Trimble all his title and interest in the inventions secured to him by the two patents mentioned, in respect to the territory specified, and also all the right and title which should be secured to him for alterations and improvements in the inventions, from time to time thereafter, for the same territory, to be held and enjoyed by Trimble to the full end of the terms for which patents had been theretofore, or might be thereafter, granted, in all respects as they would have been held and enjoyed by the assignor if the assignment had not been made.

The language employed is very broad. It includes alike the patents which had been issued and all which might be issued thereafter. No discrimination is made between those for the original inventions and those for alterations and improvements, nor between those which were first issues and those which were reissues or renewals and extensions. The entire inventions and all alterations and improvements, and all patents relating thereto, whensoever issued, to the extent of the territory specified, are within the scope of the terms employed. No other construction will satisfy them. Upon the fullest consideration we have no doubt such was the meaning and intent of the parties.

The effect of such a contract, we think, has been settled by this court in Gayler v. Wilder and others. Fitzgerald, the inventor, before the patent was issued, assigned his entire right to Enos Wilder. The assignment contained a request that the patent should be issued to the assignee, and was duly recorded in the Patent Office. This brought the case within the terms of the 6th section of the act of 1836. Fitzgerald made no assignment after the patent was issued to him. Enos Wilder, his assignee, assigned to Benjamin Wilder, who was the plaintiff in the action. The defendants insisted that Enos Wilder had not the legal, but only an equitable title. Upon the question whether an assignment subsequent to the issuing of the patent was necessary to pass the former to the assignee, this court said: 'We do not think the act of Congress requires it, but that when the patent issued to Fitzgerald, the legal right to the monopoly and the property it created was, by the operation of the assignment then on record, vested in Wilder.' The argument which controlled the judgment of the court may be thus stated: Fitzgerald had an inchoate right at the time of the assignment, the invention being then complete and the specification prepared. It appeared, by the language of the assignment, that it was intended to operate upon the perfect legal title, which he then had a lawful right to obtain, as well as upon the inchoate right which he then possessed. There was no sound reason for defeating the intention of the parties by restricting the assignment to the latter interest, and compelling the parties to execute another transfer, unless the act of Congress required it, which, in the opinion of the court, it did not. The act of 1836 declares that every patent shall be assignable in law. The thing to be assigned is not the mere parchment on which the grant is written, but the monopoly which the grant confers-the right of property which it creates. 'And when the party has acquired an inchoate right to it, and the power to make that right perfect and absolute at his pleasure, the assignment of his whole interest, whether executed before or after the patent issued, is equally within the provisions of the act of Congress.' We concur in these views. The rule laid down is the law of this tribunal upon the subject. There the patent was an original one, here it is an extension. The question before us arises under the 11th and 18th sections of the act of 1836. But the arguments which controlled the decision in that case apply in this with equal force. The same considerations are involved in both. There is no substantial ground of distinction. The application of the same principle to the assignment of an extended patent, made before the extension, is an inevitable corollary from the reasoning and ruling of the court. Without, in effect, overruling that adjudication, we cannot hold that Trimble had not a legal title under the extended as well as under the original patent. In our judgment he had such a title.

In this connection our attention has been called by the counsel for the plaintiffs in error to Wilson v. Rousseau, and several other cases. None of them turned upon the question we have been considering, and neither of them contains anything in conflict with the proposition established by Gayler v. Wilder.

It remains to consider the contract between Trimble and Daniel Stone.

It recites the agreement between Trimble and Howe, and the payments thereby stipulated to be made by Trimble. Stone covenants to pay one-half of the instalments still unpaid as they should mature.

'And the said Isaac R Trimble, in consideration of the said payments, promises, and agreements on the part of the said Daniel Stone as aforesaid, for and on the part of himself, the said Isaac R. Trimble, and his heirs, executors, and administrators, covenants and agrees, and by these presents doth covenant and agree, to sell and transfer, and doth hereby sell and transfer unto the said Daniel Stone, his heirs, executors, and administrators, the one equal moiety or half-part of all the right, title, claim, and interest of him, the said Isaac R. Trimble, of, in, and to the patent-right aforesaid, which he purchased as aforesaid of the said William Howe, the sale heretofore made to Reading excepted.'

A copartnership between the parties in the business of building bridges under Howe's patents was then entered into, and it was agreed that if either party should at any time desire a dissolution, Trimble should name a sum which he would be willing to give or take for a moiety of the rights which he acquired from Howe, including the payments to Howe, and that Stone should thereupon decide whether he would buy or sell. It was further provided that the copartnership might be dissolved at the expiration of six months after notive by either party.

Trimble was examined as a witness, and testified as follows: Stone never made any of the payments which he was required to make by the contract. By common consent of the parties, the contract never went into operation in any way, because Stone was unable to comply with any of his engagements. Trimble was compelled to pay, and did pay, the full amount of the instalments still due on his contract with Howe. Stone during his lifetime never claimed any right under the contract; but, on the contrary, always recognized Trimble's exclusive right to the interest referred to in the agreement, and acted as Trimble's agent in building bridges, under a power of attorney, paying Trimble a part of the profits for the privilege. There was no other evidence on the subject. Trimble's testimony was uncontradicted.

The agreement was recorded in the Patent Office on the 27th of July, 1864, after Stone's death, and more than eighteen years after the date of its execution.

The words, 'and do hereby sell and transfer,' found in the copy from the Patent Office, which was used in evidence in the court below, are not in the copy annexed to the bill filed in the Supreme Court of Pennsylvania. But, conceding that they were in the contract as executed, and that the contract had the same effect in transferring to Stone a moiety of Trimble's rights and interests, which Trimble's contract with Howe had in transferring the whole to Trimble, then a question arose for the jury as to the effect of the facts disclosed in Trimble's testimony. Upon the trial the court, at the request of the plaintiffs, charged the jury in effect, that if they found the facts to be as testified by Trimble, the contract between Trimble and Stone 'was not to be regarded as passing any title to Stone, which the defendant was entitled to set up in connection with any other evidence in the cause as a bar to the right of the plaintiffs to recover,' provided they found also the execution and delivery of Trimble's deed to his co-plaintiffs. To this instruction the plaintiffs in error excepted.

If the facts were as alleged by Trimble, his contract with Stone was stillborn. It never had any vitality. Neither the legal representative of Stone nor any one in privity with him asserts its validity in this litigation. It is vicariously put forward by the plaintiffs in error. They seek to give it life and vigor, and invoke its aid for their protection.

If a deed of real estate be executed and recorded, prim a facie it conveys the legal title; but if it be shown it was not delivered, that destroys its effect. A judgment may be assigned without written evidence of the transfer. A party may waive a constitutional provision which applies in his favor. Fraud or mistake in the execution of a deed may be shown at law. The most solemn contracts under seal, where the statute of frauds is not involved, may be changed or abrogated by a new parol agreement, express or implied; and a contract within the statute may be taken out of it by the conduct of the parties. If Stone's administrator were to sue Trimble, and the facts should be established as Trimble alleges them to be, the action would be barred by estoppel in pais. We think the instruction was correct, and that it properly submitted this part of the case to the jury.

The plaintiffs in error submitted eight prayers for instructions. The 2d, 3d, 4th, 5th, 6th, and 8th, were refused. The refusal was excepted to. Some of the points which they present were not insisted upon in the argument at the bar. The others are sufficiently answered by what has already been said.

JUDGMENT AFFIRMED.

Mr. Justice BRADLEY dissented, on the ground that there was not enough language in the assignment of Howe to Trimble to show that a transfer of the extension was intended.


text: Talk:Railroad Company v. Trimble/Opinion of the Court

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text:
Barnard v. Kellogg

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

In the summer of 1864, Barnard, a commission merchant residing in Boston, Massachusetts, placed a lot of foreign wool, received from a shipper in Buenos Ayres, and on which he had made advances, in the hands of Bond & Co., wool brokers in Boston, to sell, with instructions not to sell unless the purchaser came to Boston and examined the wool for himself. These brokers sent to E. N. Kellogg & Co., merchants and dealers in wool, in Hartford, Connecticut, at their request, samples of the different lots of wool, and communicated the prices at which each lot could be obtained. Kellogg & Co., in reply, offered to take the wool, all round, at fifty cents a pound, if equal to the samples furnished, and Bond & Co., for their principal, on Saturday, the 6th day of August, by letter and telegram, accepted this offer, provided Kellogg & Co. examined the wool on the succeeding Monday and reported on that day whether or not they would take it. Kellogg & Co. acceded to this condition, and the senior member of the firm repaired to Boston on the day named and examined four bales in the broker's office as fully as he desired, and was offered an opportunity to examine all the bales, and have them opened for his inspection. This he declined to do, and concluded the purchase on the joint account of all the plaintiffs. Some months after this, on opening the bales it was ascertained that a portion of them were falsely and deceitfully packed, by placing in the interior rotten and damaged wool and tags, which were concealed by an outer covering of fleeces in their ordinary state. This condition of things had been unknown to Barnard, who had acted in good faith. It was, however, communicated to him, and he was asked to indemnify the purchaser against the loss he sustained in consequence of it. This he declined to do, and the purchaser brought this suit. The declaration counted:

1st. Upon a sale by sample.

2d. Upon a promise, express or implied, that the bales should not be falsely packed.

3d. Upon a promise, express or implied, that the wool inside of the bales should not differ from the samples by reason of false packing.

The court below, trying the cause without the intervention of a jury, held that there was no express warranty that the bales not examined should correspond to those exhibited at the brokers' store, and that the law under the circumstances could not imply any. But the court found as matters of fact, that the examination of the interior of the bulk of bales of wool generally, put up like these, is not customary in the trade; and though possible, would be very inconvenient, attended with great labor and delay, and for these reasons was impracticable; and that by the custom of merchants and dealers in foreign wool in bales in Boston and New York, the principal markets of this country where such wool is sold, there is an implied warranty of the seller to the purchaser that the same is not falsely or deceitfully packed, and the court held as a matter of law, that the custom was valid and binding on the parties to this contract, and gave judgment for the purchaser.

This writ of error was taken to test the correctness of this ruling.

Mr. N. Shipman, in support of it:

1. While it is true, to a limited extent, that courts will not recognize customs directly contrary to a well-settled rule of law, yet courts are continually, and of necessity, upholding customs not in conformity with the common law. Indeed, as Lord Kenyon says, it is of the very essence of a custom that it should vary from the common law.

Neither can there be a precise and definite rule established as to the admission of customs. Each custom must stand or fall by itself. If the custom and the common law can both exist, and the custom does not entirely abrogate the law, and is proved by strong testimony, then the custom stands and the common law yields.

Indeed, within its proper sphere, that is to say not destroying the common law, but modifying it in accordance with the suggestions of practical experience, courts regard usage as entitled to the highest consideration. Baldwin, J., in Wilcocks v. Phillips, says:

title: Barnard v. Kellogg


text: Talk:Barnard v. Kellogg

title: Talk:Barnard v. Kellogg


text:
Barnard v. Kellogg/Opinion of the Court

'Its influence is universal. It attaches to nations and individuals. It creates obligations. It interprets laws. General custom is a general law, and forms the law of contracts, and this sometimes, though it be at variance with their terms. It controls even the principles of law. Thus the right to the waygoing crops, days of grace, and time of protest, are regulated by the usage of the place or bank, and affect even those who have no notice of the custom. The ancient, established, uniform, and known custom of persons engaged in any trade, makes a law for that trade, though it is not applicable to other trades. It is their way of doing business. It is the rule to which all who enter that trade, are understood to consent. It makes, supplies, and regulates their contracts. Known and settled usage ought to be respected by courts and juries, unless such usages are against the law or policy of the country, otherwise our dealings with foreigners in foreign lands will fall into disorder and confusion.'

2. The custom of warranty against false packing of wool in bales, is not contrary to the rule of caveat emptor, but is based upon, and is a part of a well-known and established exception to the rule; for when there is no opportunity to inspect the commodity, the maxim caveat emptor does not apply. Now the interior of wool in bales is in fact as much concealed from the buyer as if the bale was in the hold of a vessel on the ocean. The court below finds that the inspection of the interior of the bale is 'impracticable.' As matter of fact it is known that foreign wool or cotton comes into market packed in bales of about one thousand pounds each, secured by iron hoops, and having been subjected to very great pressure. From the nature of the commodity, the difficulty and expense of opening the bales, the lack of machinery with which to repack them, the delay and labor incident to an attempt to examine the interior of the bulk, a personal inspection of the contents of each bale and of each fleece is impossible. Fraudulent packing is thus rendered easy and difficult of detection. Pecuniary redress for the fraud is impracticable unless there is a general rule of warranty extending from the consumer to the original packer or grower. For it would be well-nigh impossible for each successive person through whose hands the goods passed, from the parties in South America to the manufacturer in the United States, to take a special warranty against false packing. A general and universal rule prevents fraud, and renders the rights and liabilities of all parties certain and easy of enforcement. Courts have therefore been constrained to decide that on every sale of cotton or wool in bales, there is an implied warranty, that substances foreign to the article sold were not concealed in the interior of the package.

3. The customs, contravening the rule of caveat emptor, which have been disregarded by the courts, are of a different nature from the one now under consideration. The former were customs whereby the seller impliedly warranted his wares to be 'merchantable,' and were thus directly at variance with the common law. This custom is not a warranty in regard to character or quality, but is in effect a warranty against fraud; that 'material foreign to, and not properly belonging to or with' the article sold has not been secretly placed within the bale.

Mr. Charles E. Perkins, contra.

Mr. Justice DAVIS delivered the opinion of the court.

No principle of the common law has been better established, or more often affirmed, both in this country and in England, than that in sales of personal property, in the absence of express warranty, where the buyer has an opportunnity to inspect the commodity, and the seller is guilty of no fraud, and is neither the manufacturer nor grower of the article he sells, the maxim of caveat emptor applies. Such a rule, requiring the purchaser to take care of his own interests, has been found best adapted to the wants of trade in the business transactions of life. And there is no hardship in it, because if the purchaser distrusts his judgment he can require of the seller a warranty that the quality or condition of the goods he desires to buy corresponds with the sample exhibited. If he is satisfied without a warranty, and can inspect and declines to do it, he takes upon himself the risk that the article is merchantable. And he cannot relieve himself and charge the seller on the ground that the examination will occupy time, and is attended with labor and inconvenience. If it is practicable, no matter how inconvenient, the rule applies. One of the main reasons why the rule does not apply in the case of a sale by sample, is because there is no opportunity for a personal examination of the bulk of the commodity which the sample is shown to represent. Of such universal acceptance is the doctrine of caveat emptor in this country, that the courts of all the States in the Union where the common law prevails, with one exception (South Carolina), sanction it.

Applying this acknowledged rule of law to this case, it is easy to settle the rights of the parties, and to interpret the contract which they made. That the wool was not sold by sample clearly appears. And it is equally clear that both sides understood that the buyer, if he bought, was to be his own judge of the quality of the article he purchased. Barnard expressly stipulated, as a condition of sale, that Kellogg should examine the wool, and he did examine it for himself. If Kellogg intended to rely on the samples as a basis of purchase, why did he go to Boston and inspect the bales at all, after notice that such inspection was necessary before the sale could be completed? His conduct is wholly inconsistent with the theory of a sale of sample. If he wanted to secure himself against possible loss, he should either have required a warranty or taken the trouble of inspecting fully all the bales. Not doing this, he cannot turn round and charge the seller with the consequences of his own negligence. Barnard acted in good faith, and did not know or have reason to believe that the wool was falsely packed. The sale on his part was intended to be upon the usual examination of the article, and the proceeding by Kellogg shows that he so understood it, and it is hard to see what ground of complaint even he has against Barnard. It will not do to say that it was inconvenient to examine all the bales, because if inconvenient it was still practicable, and that is all, as we have seen, that the law requires. The case of Salisbury v. Stainer, reported in 19th Wendell, is similar in its facts to this case, and the court applied to it the rule of caveat emptor. There bales of hemp were sold which turned out to be falsely packed. The purchaser wished to treat the sale as a sale by sample; but the court said to him, 'You were told to examine for yourself, and having opened one bale, and at liberty to open all, and omitting to do it, you cannot be permitted to allege that the sale was a sale by sample, nor to recover damages as on an implied warranty.' It is, therefore, clear by the general principles of law, adopted in the interests of trade and commerce, that the seller in this instance was not answerable over for any latent defects in the bales of wool.

But the learned court below having found that by the custom of dealers in wool in New York and Boston there is a warranty by the seller implied from the fact of sale, that the wool is not falsely packed, and having held Barnard bound by it, the inquiry arises whether such a custom can be admitted to control the general rules of law in relation to the sale of personal property.

It is to be regretted that the decisions of the courts, defining what local usages may or may not do, have not been uniform. In some judicial tribunals there has been a disposition to narrow the limits of this species of evidence, in others to extend them, and on this account mainly the conflict in decision arises. But if it is hard to reconcile all the cases, it may be safely said they do not differ so much in principle, as in the application of the rules of law. The proper office of a custom or usage in trade is to ascertain and explain the meaning and intention of the parties to a contract, whether written or in parol, which could not be done without the aid of this extrinsic evidence. It does not go beyond this, and is used as a mode of interpretation on the theory that the parties knew of its existence, and contracted with reference to it. It is often employed to explain words or phrases in a contract of doubtful signification, or which may be understood in different senses, according to the subject-matter to which they are applied. But if it be inconsistent with the contract, or expressly or by necessary implication contradicts it, it cannot be received in evidence to affect it. Usage, says Lord Lyndhurst, 'may be admissible to explain what is doubtful; it is never admissible to contradict what is plain.' And it is well settled that usage cannot be allowed to subvert the settled rules of law. Whatever tends to unsettle the law, and make it different in the different communities into which the state is divided, leads to mischievous consequences, embarrasses trade, and is against public policy. If, therefore, on a given state of facts, the rights and liabilities of the parties to a contract are fixed by the general principles of the common law, they cannot be changed by any local custom of the place where the contract was made. In this case the common law did not, on the admitted facts, imply a warranty of the good quality of the wool, and no custom in the sale of this article can be admitted to imply one. A contrary doctrine, says the court, in Thompson v. Ashton, 'would be extremely pernicious in its consequences, and render vague and uncertain all the rules of law on the sales of chattels.'

In Massachusetts, where this contract was made, the more recent decisions on the subject are against the validity of the custom set up in this case. In Dickinson v. Gay, which was a sale of cases of satinets made by samples, there were in both the samples and the goods a latent defect not discoverable by inspection, nor until the goods were printed, so that they were unmerchantable. It was contended that by custom there was in such a case a warranty implied from the sale that the goods were merchantable. But the court, after a full review of all the authorities, decided that the custom that a warranty was implied, when by law it was not implied, was contrary to the rule of the common law on the subject, and therefore void. If anything, the case of Dodd v. Farlow, is more conclusive on the point. There forty bales of goat skins were sold by a broker, who put into the memorandum of sale, without authority, the words 'to be of merchantable quality and in good order.'

It was contended that by custom, in all sales of such skins, there was an implied warranty that they were of merchantable quality, and, therefore, the broker was authorized to insert the words, but the court held the custom itself invalid. They say, 'It contravenes the principle, which has been sanctioned and adopted by this court, upon full and deliberate consideration, that no usage will be held legal or binding on parties, which not only relates to and regulates a particular course or mode of dealing, but which also engrafts on a contract of sale a stipulation or obligation which is inconsistent with the rule of the common law on the subject.' It is clear, therefore, that in Massachusetts, where the wool was sold and the seller lived, the usage in question would not have been sanctioned.

In New York there are some cases which would seem to have adopted a contrary view, but the earlier and later cases agree with the Massachusetts decisions. The question in Frith v. Barker was, whether a custom was valid that freight must be paid on goods lost by peril of the sea, and Chief Justice Kent, in deciding that the custom was invalid, says: 'Though usage is often resorted to for explanation of commercial instruments, it never is, or ought to be, received to contradict a settled rule of commercial law.' In Woodruff v. Merchants' Bank, a usage in the city of New York, that days of grace were not allowed on a certain description of commercial paper, was held to be illegal. Nelson, chief justice, on giving the opinion of that court, says: 'The effect of the proof of usage in this case, if sanctioned, would be to overturn the whole law on the subject of bills of exchange in the city of New York;' and adds, 'if the usage prevails there, as testified to, it cannot be allowed to control the settled and acknowledged law of the State in respect to this description of paper.' And, in Beirne v. Dord, the evidence of a custom that in the sale of blankets in bales, where there was no express warranty, the seller impliedly warranted them all equal to a sample shown, was held inadmissible, because contrary to the settled rule of law on the subject of chattels. But the latest authority in that State on the subject, is the case of Simmons v. Law. That was an action to recover the value of a quantity of gold-dust shipped by Simmons from San Francisco to New York on Law's line of steamers, which was not delivered. An attempt was made to limit the liability of the common carrier beyond the terms of the contract in the bill of lading by proof of the usage of the trade, which was well known to the shipper, but the evidence was rejected. The court, in commenting on the question, say: 'A clear, certain, and distinct contract is not subject to modification by proof of usage. Such a contract disposes of all customs by its own terms, and by its terms alone is the conduct of the parties to be regulated, and their liability to be determined.'

In Pennsylvania this subject has been much discussed, and not always with the same result. At an early day the Supreme Court of the State allowed evidence of usage, that in the city of Philadelphia the seller of cotton warranted against latent defects, though there were neither fraud on his part or actual warranty. Chief Justice Gibson, at the time, dissented from the doctrine, and the same court, in later cases, has disapproved of it, and now hold that a usage, to be admissible, 'must not conflict with the settled rules of law, nor go to defeat the essential terms of the contract.'

It would unnecessarily lengthen this opinion to review any further the American authorities on this subject. It is enough to say, as a general thing, that they are in harmony with the decisions already noticed. See the American note to Wigglesworth v. Dallison, 1 Smith's Leading Cases, where the cases are collected and distinctions noticed.

The necessity for discussing this rule of evidence has often occurred in the highest courts of England on account of the great extent and variety of local usages which prevail in that country, but it would serve no useful purpose to review the cases. They are collected in the very accurate English note to Wigglesworth v. Dallison, and are not different in principle from the general current of the American cases. If any of the cases are in apparent conflict, it is not on account of any difference in opinion as to the rules of law which are applicable.

These rules, says Chief Justice Wilde, in Spartali v. Benecke, 'are well settled, and the difficulty that has arisen respecting them, has been in their application to the varied circumstances of the numerous cases in which the discussion of them has been involved.' But this difficulty does not exist in applying these rules to the circumstances of this case. It is apparent, that the usage in question was inconsistent with the contract which the parties chose to make for themselves, and contrary to the wise rule of law governing the sales of personal property. It introduced a new element into their contract, and added to it a warranty, which the law did not raise, nor the parties intend it to contain. The parties negotiated on the basis of caveat emptor, and contracted accordingly. This they had the right to do, and by the terms of the contract the law placed on the buyer the risk of the purchase, and relieved the seller from liability for latent defects. But this usage of trade steps in and seeks to change the position of the parties, and to impose on the seller a burden which the law said, on making his contract, he should not carry. By this means a new contract is made for the parties, and their rights and liabilities under the law essentially altered. This, as we have seen, cannot be done. If the doctrine of caveat emptor can be changed by a special usage of trade, in the manner proposed by the custom of dealers of wool in Boston, it is easy to see it can be changed in other particulars, and in this way the whole doctrine frittered away.

It is proper to add, in concluding this opinion, that the conduct of the parties shows clearly that they did not know of this custom, and could not therefore have dealt with reference to it.

JUDGMENT REVERSED, and the cause remanded with directions to award a

VENIRE DE NOVO.

BRADLEY and STRONG, JJ., dissented.

title: Barnard v. Kellogg/Opinion of the Court


text: Talk:Barnard v. Kellogg/Opinion of the Court


text:
United States v. Hodson

In error to the Circuit Court of the District of Wisconsin, the case being thus:

The Internal Revenue Act of June 30, 1864, makes it obligatory on persons meaning to be distillers to take out a license, and makes the business of distilling without a license an offence punishable by fine and imprisonment. And the 53d section of the statute enacts.

'That any person required by law to be licensed as a distiller SHALL, in addition to what is required by other provisions of law, make an application therefor to the assessor of the district, and before the same is issued, the person so applying shall give bond to the United States in such sum as shall be required by the collector, with one or more sureties to be approved by said collector, 'conditioned'--

in effect—

'(1.) That if he shall use any additional still he will report the fact to the assessor.

'(2.) That he will from day to day enter in a book to be kept for that purpose the number of gallons that may be distilled, and the quantity of grain he may use; and that the book shall be open at all times to the inspection of the assessor.

'(3.) That he will render to the assessor, on certain days of each month, an exact account in writing of the number of gallons distilled, of the number placed in warehouse, and of the number sold or removed for consumption and sale, and also of the quantities of grain used for the fractional part of a month next preceding the report, and the proof thereof, which report is to be verified by affidavit.

'(4.) That he will not sell, or permit to be removed for consumption and sale, any spirits distilled under his license until they have been inspected, gauged, proved, and entered upon his books, as aforesaid.

'(5.) That he will, at the time of rendering his account to the collector, pay the duty imposed by law upon such spirits.'

'And the said bond,' the act proceeds, 'may be renewed or changed from time to time in regard to the amount and sureties thereof, according to the discretion of the collector.'

The statute, which is entitled 'An Act to Provide Ways and Means for the Support of the Government and for other Purposes,' is a statute of 182 sections, many very long, and contains a great variety of provisions on a great variety of subjects; some being matters enjoined, and some matters forbidden; some enforced by penalties, fine, and imprisonment; and some not so made operative. The statute, however, obviously not contemplating that the bond shall be conditioned for the performance of any duties but those for which it says that it shall be.

In section 57th, separated both as to place and by intervening topics from that one (the 53d), which sets out in what the bond of the distiller is to be conditioned, it is enacted

'That. . . every person who shall use any still, boiler, or other vessel as aforesaid,. . . shall from day to day make true and exact entry, in a book to be kept for that purpose, the number of gallons of spirits distilled, and also the number of gallons placed in warehouse, and also the number sold and removed for consumption and sale, and the proof thereof.'

But it is not enacted that the distiller's doing this shall be incorporated among the conditions of the bond which the 53d section declares that he shall give.

With this statute in force, the United States took from one William Hodson, a distiller, to whom license had been granted, a bond precedent to the grant of license. The bond was not conditioned in the way that the already quoted 53d section prescribes, nor conditioned for the doing of specific things at all. The language of the condition was thus:

'That whereas the said William Hodson has made application to the collector of internal revenue for the second collection district of the State of Wisconsin for a license as a distiller at Turtleville. Now, therefore, if the said William Hodson shall truly and faithfully conform to all the provisions of an act entitled 'An act to provide internal revenue,' approved June 30, 1864, AND such other acts as are now or may hereafter be in this behalf enacted, then the above obligation to be void and of no effect, otherwise it shall abide and remain in full force and virtue.'

The United States sued for the penalty of the bond, and assigned various breaches, and among them this as part of a first one, 'that the defendant Hudson did manufacture a large quantity of distilled spirits, to wit, 100,000 gallons, and did not from day to day make a true entry in a book kept for that purpose of the number of gallons by him distilled, and also of the number of gallons by him placed in warehouse, and of the number of gallons by him sold and removed for consumption and sale, and the proof thereof.'

Several other breaches were assigned, which were not denied to be breaches of acts for the performance of which the statute requires the bond to be conditioned.

The defendants traversed each of the breaches, including of course the part of the first above given one.

Upon the trial the United States offered in evidence the bond and proof of the several breaches. The defendants objected to the evidence on the ground that the conditions were not required by, and were not in conformity with, the statutes of the United States. The court sustained the objection. And the correctness of this ruling was the matter now here for review.

Mr. Bristow, Solicitor-General, and Mr. C. H. Hill, Assistant Attorney-General, for the United States:

1. It nowhere appears that the bond in question was exacted or extorted by the collector in the particular form in which it was given. Accordingly, the rule that a bond taken by a public officer colore officii, who has illegally exerted his authority, and thereby compelled the obligor to enter into an obligation not required by law is void, has no application here.

The condition of the bond embraces two separate and distinct matters, which make it divisible into two parts. The latter part, we admit, does not come within the requirements of the act directing the bond to be taken. Yet, even as a statutory bond, it is not to be regarded as ineffectual on that account. For if a bond taken under a statute contain, in addition to the condition prescribed by the statute, a condition not required by it, such condition may be void; but unless the statute provides that the bond shall be void if it contain any other condition than that required, the bond will be valid and binding for the performance of the legitimate condition. So where part of the condition of a bond taken under a statute is prescribed by the statute, and part is not, if the condition be divisible, a recovery may be had for breach of the former. The several parts of such a condition are as much independent of and unaffected by each other as if the obligors had become bound thereto severally by separate instruments.

2. That part of the condition which requires the principal obligor to 'truly and faithfully conform to all the provisions' of the act of 1864, ex vi termini includes the various duties enumerated in the section describing the particulars in which the bond shall be conditioned; and the instrument, being thus in substantial though not in literal compliance with the statute, is good as a statutory bond. Now in such bonds, where there is a substantial compliance with the law the want of a rigid conformity with its letter is not a fatal objection to the bond. And when the substance of a bond is prescribed by statute, if the bond be so drawn as to in clude all the obligations imposed by the statute, and to allow every defence given by law, it will be valid, though variant from the form prescribed.

It is true, the phraseology of the condition of this bond, viz., to 'conform to all the provisions' of the act, may, in its generality, include more than the statute required to be inserted in the condition. But the bond being given with reference to the statute, must be construed by the statute, so that the unnecessarily comprehensive language of the condition will be restrained in its operation to what may be lawfully included therein. Accordingly, no breaches are properly assignable thereunder for anything not within the requirements of the statute.

The case of Ohio v. Findley, which arose under a law of that State, passed in 1831, prescribing the duties of county treasurers, is in point. One section of that act required 'that each county treasurer, previous to entering on the duties of his office, shall give bond. . . conditioned for the paying over, according to law, all moneys which shall come into his hands for State, county, township, or other purposes.' Subsequent sections prescribed various other duties to be performed by the county treasurer. The court held that a bond given by a county treasurer under that act conditioned that he should 'faithfully and impartially discharge all the duties of his said office agreeably to law,' is a good statutory bond for so much as is prescribed by the statute and comprehended in the condition, even though it may be void for the residue.

But if the bond is not good as a statutory bond, yet having been voluntarily given, and being neither prohibited by the statute nor against the policy of the law, it is valid as a common law obligation.

Story, J., giving an opinion of the court, fully admits, and indeed asserts this doctrine in United States v. Tingey.

In Bank of Brighton v. Smith, it is said by Bigelow, C. J.:

title: United States v. Hodson


text: Talk:United States v. Hodson

title: Talk:United States v. Hodson


text:
United States v. Hodson/Opinion of the Court

'The rule of law is well settled, that a bond given for the faithful performance of official duties, or in pursuance of some requirement of law, may be valid and binding on the parties, although not made with the formalities or executed in the mode provided by the statute under which it purports to have been given. This rule rests on the principle that, although the instrument may not conform to the special provisions of a statute or regulation in compliance with which the parties executed it, nevertheless, it is a contract voluntarily entered into upon a sufficient consideration for a purpose not contrary to law, and therefore it is obligatory on the parties to it in like manner as any other contract or agreement is held valid at common law.'

In support of this doctrine additional authorities may be cited:

The 57th section of the act does in fact require no more than what the united conditions of the bond, as prescribed by the 53d section, do. He is to keep 'books' as to all the matters mentioned in the conditions, so that assigning, breaches in the language of the 57th section is, in truth, assigning them in what would have been the language of the condition of the bond in this case if the condition had been in literal compliance with the words of the statute.

The bond sued on was void. By the act under which it was given, no person could carry on the business of a distiller without giving a bond conditioned in a mode particularly prescribed. And it is plain that in regard to the condition prescribed, Congress meant that the collector should not make a change. Why otherwise is the condition minutely and with such pains prescribed? and why in regard to amount and sureties is the collector authorized to make a change? The act expressly refers to other duties 'required by other provisions of law,' which are 'in addition' to those which the bond is meant to enforce. But these former it enforces not by bond with sureties, but by penal or other sanctions. Such is the system which Congress, in its wisdom, saw fit to adopt. The collector here, has, therefore, taken a bond which no law required, one which supersedes the system of Congress and adopts a new system of the collector's own instead. The bond is thus one which 'under color and pretence of an act of Congress, and under color of office was required and extorted against the form and effect of a statute.' Such a bond is adjudged in United States v. Tingey, cited on the other side, to show it good, to be void; the nullity of the bond being in truth, the only point adjudged in the case, and the various remarks relied on by the other side, about the difference between such a bond and voluntary bonds being mere dicta of Story, J., extra-judicial, and irrelative, and from the purpose of the judgment which declared the bond bad.

That a bond was required, or exacted, or extorted, is certain. The distiller had to give it or give up his vocation. He 'shall' give it, is the language of the act of Congress, before he gets his license. Certainly no distiller gives voluntarily such a bond as distillers are required by the statute to give, or gives it otherwise than because he is required by the law, which commands obedience from all, to give it, and because if he don't give it he can get no license, and will be fined and imprisoned for exercising his business. Is a bond thus given, voluntarily given-given by choice? Certainly not. If it were, a statute requiring it-declaring that the party SHALL give it, and visiting him with a loss of his license if he does not-would be useless. A bond may be exacted or extorted by influences, having nothing in them of duress of person. When the law speaks it compels, it forces. The collector presents his bond ready drawn. He is particularly bound to know what sort of security the government requires. The distiller can rarely know. Independently of which the collector is 'in office,' and 'obeyed,' of course. The bond is presented for the distiller's signature, and he must sign or forfeit his right to exercise his calling. He acts at his peril if he misjudges as to the right of the government to have the exact bond put before him for his signature. And he does not presume to judge at all, but signs it as of course.

Mr. Justice SWAYNE delivered the opinion of the court.

This is a writ of error to the Circuit Court of the United States for the District of Wisconsin. The action was debt upon a penal bond in the sum of five thousand dollars. The condition was not set out and no breaches were alleged in the declaration. The declaration was framed to recover the penalty. The defendants craved oyer of the condition, and it was given. It is set out in the record, and is substantially as follows:

That William Hodson had applied to the collector of internal revenue for the second collection district in the State of Wisconsin for license as a distiller at Turtleville, in that State, and that if the said William Hodson should faithfully conform to all the provisions of an 'act to provide internal revenue to support the government, and to pay interest on the public debt, and for other purposes,' approved June 30th, 1864, and such other acts as now are or may be hereafter in this behalf enacted, then the above obligation to be void, otherwise to remain in full force.

The defendants pleaded performance. The plaintiffs thereupon replied and assigned the following breaches in their replication:

(1.) That the defendant, Hodson, did manufacture a large quantity of distilled spirits, to wit: 100,000 gallons, and did neglect to make a true entry and report of the same, and did not from day to day make a true entry in a book kept for that purpose of the number of gallons by him distilled, and also of the number of gallons by him placed in warehouse, and of the number of gallons by him sold and removed for consumption and sale, and the proof thereof, and that he did not cause the same to be done.

(2.) That the said Hodson did not conform to the provisions of said act and acts in this, to wit: that he did sell and remove from his distillery, for consumption and sale, a large quantity of distilled spirits manufactured by him, to wit: 50,000 gallons, and did neglect to render to the assessor or assistant assessor of the said second collection district, &c., a true account in duplicate, taken from his books, of the number of gallons of spirits distilled by him, and also of the number of gallons sold and removed for consumption and sale.

(3.) That the said Hodson did not conform to the laws aforesaid in this, to wit: that he did remove from his distillery a large quantity, to wit: 100,000 gallons of spirits, then and there by him manufactured, upon which duties were by law imposed, and which duties he neglected to pay.

(4.) And that the said Hodson did not conform to the provisions of the laws aforesaid in this, to wit: that he did manufacture a large quantity of spirits, to wit: 100,000 gallons, and did remove the same from his distillery for consumption and sale, before the same were inspected, gauged, and branded by an inspector appointed to perform such duties, and did neglect to cause the spirits so removed to be inspected, gauged, and branded before the same were removed, as aforesaid.

The defendants filed a rejoinder, specially traversing each of the breaches assigned, and concluded to the country. This put the cause at issue. Upon the trial the United States offered in evidence the bond and proof of the several breaches. The defendants objected to the evidence upon the ground that the conditions were not required by, and were not in conformity with, the statutes of the United States. The court sustained the objection and excluded all the evidence. A verdict and judgment were thereupon rendered for the defendants. The United States excepted, and have brought this ruling here for review.

The only inquiry presented for our consideration is the validity of the bond upon which the suit was founded.

It would have been more regular to raise the question by a demurrer after oyer, or by a motion in arrest of judgment. But if the bond were void it was competent for the defendants to raise the objection at any stage of the trial. The court was not bound to proceed further, when it became clear that, whatever the verdict, the plaintiff could not recover. To proceed with the trial under such circumstances would have been idly to waste the time of the court and trifle with the forms of justice.

The bond was taken under the 53d section of the act of June 30th, 1864, ch. 173. That section required a bond to be given by every licensed distiller, and prescribes its conditions. They are substantially:

That if the distiller shall use any additional still he will report the fact to the assessor.

That he will from day to day enter in a book to be kept for that purpose, the number of gallons that may be distilled, and the quantity of grain he may use; and that the book shall be open at all times to the inspection of the assessor.

That he will render to the assessor, on the 1st, 11th, and 21st days of each month an account in writing of the number of gallons distilled, of the number placed in warehouse, and of the number sold or removed for consumption and sale, and also of the quantity of grain used for the fractional part of a month next preceding the report, and the proof thereof, which report is to be verified by affidavit.

That he will not sell, or permit to be removed for consumption and sale, any spirits distilled under his license until they have been inspected, gauged, proved, and entered upon his books, as aforesaid.

And that he will at the time of rendering his account to the collector pay the duty imposed by law upon such spirits.

It is not denied that all the breaches are within the requirements of the statute touching the bond, except that part of the first one, which is, that the licensee did not, from day to day, 'make true and exact entry thereof in a book to be kept for that purpose, of the number of gallons by him placed in warehouse, and the number of gallons by him sold and removed for consumption and sale, and the proof thereof.' It is said the statute required him to do this, but did not require him to give a bond that he would do so. The statute required the bond to be conditioned that he would, from day to day, enter in a book to be kept for that purpose, the number of gallons distilled; that the book should be open to the inspection of the assessor; that he would render, at the time specified, 'an exact account in writing' of the number of gallons sold, or removed for sale and consumption, and the proof thereof; and that he would not sell, or permit to be sold or removed, for consumption or sale, any spirits distilled by him until the quantity had been 'duly entered upon his books, as aforesaid.' Considering these provisions together, we think the implication clear, that they require such an account to be kept as the breach alleges was not kept, and that if the conditions, as prescribed, had been set out at length in the bond, such would have been their legal effect. The first part of the 57th section is silent as to the bond, but is explicit as to the account, and strongly supports the conclusion at which we have arrived. The question must be considered in the light of the entire context bearing upon the subject. What is implied in a statute is as much a part of it as what is expressed.

Revenue statutes are not to be regarded as penal, and therefore to be construed strictly. They are remedial in their character, and to be construed liberally, to carry out the purposes of their enactment.

We hold this, like all the other breaches, to be within the conditions which the statute enacts the bond shall contain.

In one view of the case, this fact is important; in another and perhaps more important one, it is no wise material. Both will be presently considered.

The record is silent as to any coercion or duress. The bond is, therefore, to be considered a voluntary one. A bond in this form is not prohibited by the statute, nor is it contrary to public policy. It was founded upon a sufficient consideration, and was intended to subserve a lawful purpose.

In The United States v. Tingey, the suit was upon the bond of a purser in the navy. The statute declared 'that every purser, before entering on the duties of his office, shall give bond, with two or more sufficient sureties, in the penalty of two thousand dollars, conditioned faithfully to perform all the duties of purser in the navy of the United States.' The court said 'it is obvious that the condition of the present bond is not in the terms prescribed by the act,. . . and it is not limited to the duties or disbursements of Deblois as purser, but creates a liability for all moneys received by him, and for all public property committed to his care, whether officially as purser or otherwise.' The bond was held to be valid. The decision was put upon the grounds that the government had the capacity to make the contract, that the United States were a body politic, and that, as incident to its general right of sovereignty, it was competent to enter into any contract not prohibited by law, and found to be expedient in the just exercise of the powers confided to it by the Constitution. Dugan v. The United States was referred to as sustaining this proposition. It was remarked that a different principle would involve a denial to the General and the State governments of the ordinary rights of sovereignty. In conclusion, it was said, in relation to the bond there in question, 'The United States have a political capacity to take it. We see no objection to its validity in a legal or moral view.' Tingey, who was a surety, pleaded, among other things, in the court below, that the bond 'was under color and pretence of said act of Congress, and, under color of office, required and extorted from the said Deblois, and from the defendant, as one of his sureties, against the form and effect of the said statutes, by the then secretary of the navy.' The United States demurred. The court overruled the demurrer, and gave judgment for the defendant. The United States prosecuted a writ of error. This court held the plea sufficient and affirmed the judgment.

In the case of The United States Bradley, the views of the court expressed in The United States v. Tingey were restated and, upon the fullest consideration, were reaffirmed.

The United States v. Linn, was an action against a receiver of public moneys and his sureties. The statute in that case required that the receiver should 'give bond, with approved security, in the sum of ten thousand dollars, for the faithful discharge of his trust.' The instrument given was without seal, and was, therefore, not the security required by the statute. The counsel for the defendants insisted that the instrument was void for the reasons, among others, that it was not the form of security required by the statute; that the prescribing of one security was an implied prohibition of all others, and that if the instrument in question could be sustained, the statute might in all cases be disregarded and a mortgage of realty or personalty or any other imaginable security might be substituted for that which the statute required. The court responded: 'If this is a contract, entered into by competent parties and for a lawful purpose, not prohibited by law, and is founded upon a sufficient consideration, it is a valid contract at common law.' 'A mortgage, or any other approved security voluntarily given, would no doubt be valid.'

These cases are conclusive of the question before us. Their authority has not been shaken by any later adjudication; we think they rest upon the soundest principles, and are in accordance with a wise and salutary policy. We feel no disposition to re-examine the propositions they affirm.

A narrower view of the instrument in question may be taken, which will also maintain its validity to the extent of the breaches assigned in the declaration. It is a settled principle of law that where a bond contains conditions, some of which are legal and others illegal, and they are severable and separable, the latter may be disregarded and the former enforced. Applying this principle to the case before us, all which this instrument contains with reference to statutes other than the act of 1864, under which it was taken, may be rejected, and the generality of the reference to that act may be so limited as to include only what is covered by the conditions prescribed by the statute, as if those conditions were incorporated and set out in the bond in hoec verba. An authority exactly in point, for this construction, is found in the well-considered case of Ohio v. Findley and others. The principal in the bond in that case was a county treasurer. The bond was conditioned that he should perform his official duties according to law. The statute, as in the case before us, was specific in its requirements as to what the bond should contain, and the condition, it was admitted, largely exceeded them. The court said: 'That part which is legal is marked out in the statute-book itself, and is therefore as completely severable from the rest as if the two parts were separated in the condition of the bond.'

But we prefer to place our judgment upon the broader ground marked out by the adjudications of this court, to which we have referred. Every one is presumed to know the law. Ignorance standing alone can never be the basis of a legal right. If a bond is liable to the objection taken in this case and the parties are dissatisfied, the objection should be made when the bond is presented for execution. If executed under constraint, the constraint will destroy it. But where it is voluntarily entered into and the principal enjoys the benefits which it is intended to secure and a breach occurs, it is then too late to raise the question of its validity. The parties are estopped from availing themselves of such a defence. In such cases there is neither injustice nor hardship in holding that the contract as made is the measure of the rights of the government and of the liability of the obligors.

Judgment REVERSED, and the cause remanded with an order to issue a

VENIRE DE NOVO.


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


text:
Ducat v. Chicago

ERROR to the Supreme Court of the State of Illinois; the case being thus:

Statutes passed by the legislature of Illinois in 1853 and 1857, 'to regulate the agencies of insurance companies not incorporated by the State of Illinois,' required the agents of all such insurance companies, desirous to transact business in the State, to take out a license from the auditor of the State; and, before obtaining it, to furnish him with a statement, under the oath of the president or secretary of the company, showing its name and locality, the amount of its capital stock, the portion paid in, the assets of the company, and to furnish also a written instrument, under the company's seal, authorizing the agents to accept service of process, and agreeing that service on them shall be valid. Upon all this being done, and $5 paid for filing and examining the statement, and $1 for the certificate, a license authorizing the agent applying for it 'to transact the business of insurance in this State,' is then allowed to be granted from year to year.

By another act, passed a few years later (1863), incorporating the city of Chicago, the legislature of the State enacted that all foreign insurance companies engaged in effecting insurances in that city should pay to the city treasurer the sum of $2 upon the $100, and at that rate upon the amount of all premiums which shall have been received; designating the time and mode of payment. The law, also, in case of default of payment, provided that it should be unlawful for the company to transact any business of insurance in the city until the payment was made, and that the rates might be recovered of the company, or of its agent, in the name and for the use of the city.

With these laws in force, one Ducat, residing in the city of Chicago, and the agent there of several insurance companies chartered in the State of New York, took out licenses in 1865, authorizing him to carry on the business of insurance as agent of said companies. He paid the State for his license, but refused to pay anything to the city of Chicago, on the ground chiefly that corporations were citizens within the meaning of that clause of the Constitution which declared that the citizens of each State shall be entitled to all the privileges and immunities of citizens in the several States, and the city thereupon brought this suit to recover the rates which he thus refused to pay.

The court below decided in favor of the city, and Ducat brought the case here chiefly for the purpose of having the point above raised decided, the parties and counsel to the present case not knowing of the then pendency of the case of Paul v. Virginia, in which it was soon afterwards decided that corporations were not 'citizens' within the above quoted clause of the Constitution, and decided also that each State may prescribe the terms on which corporations created in other States may be allowed to carry on their corporate business, especially when it is that of insurance, within that State.

Mr. S. W. Fuller, for the plaintiff in error:

Paul v. Virginia decides the main point which we brought this case here to raise. But the facts of our case may perhaps take it out of the scope and effect of the decision in that.

This license here granted by the State is, in form and substance, a license to foreign insurance companies to transact their business in the State of Illinois, as domestic companies may do. The disclosures and statements made to the auditor, the stipulations as to service of process, and the fee paid that officer for each license, must be regarded as a good consideration paid by the companies for such permission. By taking out the licenses issued by the auditor the companies become, as it were, naturalized, and legally domiciled in the State. No doubt the State might, under Paul v. Virginia, have excluded them altogether; but having enacted general laws permitting, if not inviting, them to come there and to do business under them, the privilege thus granted ought not to be diminished or impaired by unequal and discriminating taxes, levied by the cities in which the agencies are established; taxes not levied on domestic companies.

The sections of the city charter which provide for the collection of this tax are a part of the revenue system of the city, and the tax cannot be regarded as the price paid for the privilege of coming into the State and doing business, because the auditor issued the license under the general law, and, pursuant to that license, the companies commenced business in Chicago, and received the premiums, two per cent. of which are now demanded by the city of Chicago. This is a tax levied upon property; a tax, too, of a most oppressive character; for a tax on gross receipts is a tax upon that in which the company may not have any interest after paying the losses sustained upon the risks for which the premiums were paid, for there may be nothing left to it after paying those losses.

It is true that the amount of its tax or its fairness does not affect the question of the power to levy it; but, if it is not a license fee, then it is a tax levied according to an arbitrary rule, and its unjust and unequal character is a proper subject of consideration in passing upon the validity of the law imposing it.

Paul v. Virginia hardly concludes this case. There Paul refused to comply with all the terms required by the law of Virginia of foreign insurance companies, upon establishing agencies for the transaction of insurance business in that State, and therefore did not have a license for carrying on the business. For this violation of the law he was prosecuted by the State to recover the penalty imposed upon persons guilty of its violation; and this court decided that the law was valid, and that he was liable to the penalty; but it did not decide, that if he had obtained the license, the property of the companies represented by him could be taxed by the State of Virginia, at a greater rate than the like property of the citizens of that State, merely because it belonged to foreign insurance companies. That question was not presented by the facts of the case.

A license to foreign companies is required on grounds of public policy, to protect the community against loss from irresponsible insurance companies, and a license has here been had. We have now a tax in addition levied upon the company's property; an unequal, and as we maintain, an invalid tax.

Mr. M. F. Tuley, city counsel, contra:

This court decided, in Paul v. Virginia, not only that corporations are not 'citizens' in the sense set up, but decided also that 'corporations created in one State had not even an absolute right of recognition in other States, but depend for that and for the enforcement of their contracts upon the assent of those States, which may be given accordingly on such terms as they the other States-please.' Counsel endeavor to avoid this by the proposition that 'by taking out licenses issued by the auditor, the companies become, as it were, naturalized and legally domiciled in the State.' In other words, that the company becomes a quasi citizen. But the Constitution does not recognize quasi citizens, or their rights.

The State, through its legislature, prescribed the terms upon which the State will give recognition to foreign corporations; upon which it will permit them to do business in the State, and upon which it will recognize their special privileges, and enforce contracts made by them. These terms are that they shall file the sworn statement, and obtain the certificate (or license) from the auditor of the State, in accordance with the acts of 1855 and 1857, and that they shall also render to the city-if they transact business in it-the account required of them, and pay $2 upon the $100 of their gross receipts to the city treasurer, as provided in the act of 1863.

If these corporations are merely creations of the local law which created them; if they are not citizens; if they have no 'privileges or immunities' which other States are bound to recognize; and if the other States may prohibit them doing business-their very existence-within the limits of such other States respectively (all of which has been decided in Paul v. Virginia), then it follows that the State of Illinois has the right to provide, as in the acts of 1855, 1857, and 1863, that any foreign corporation, as a condition to its doing business in the city of Chicago, shall not only take out a State license, but shall also pay a pro rata of their premiums received from business transacted in the city to the city treasurer.

Counsel argue, that having received the certificate (or license) from the auditor, the foreign corporation thereby acquires the right to transact its business anywhere in the State, on an equality with local or domestic corporations. The proposition assumes, that the only terms exacted of the foreign companies are the filing of the statement with the auditor, and the obtaining the certificate or license from him. But this is a false assumption. If the acts of 1855, 1857, and the act of 1863 are not inconsistent, and can all stand together, then there is a very important limitation or condition which the counsel has omitted; which is, that if the foreign company desires to do business in the city of Chicago, it must, in addition to filing the statement with the auditor, and obtaining the license from him, pay to the city treasurer $2 on every $100 of its gross receipts, and render its account to the city controller, as required by the act of 1863. The terms which the State has pleased to prescribe are, compliance with all three of the acts of 1855, 1857, and (the city charter) 1863.

Mr. Justice NELSON delivered the opinion of the court.

title: Ducat v. Chicago


text: Talk:Ducat v. Chicago

title: Talk:Ducat v. Chicago


text:
Ducat v. Chicago/Opinion of the Court

This case was pending here when that of Paul v. Virginia was argued and decided; the decision in which, as is admitted by the learned counsel for the plaintiff in error, has already disposed of all the principal questions involved.

Paul, the agent of the insurance companies in that case, refused to comply with some of the conditions annexed by the law of Virginia to the granting of the license, on the ground: 1, that the corporations he represented were entitled to all the privileges and immunities of citizens of the several States, and that the law imposing discriminating conditions against foreign corporations was void as repugnant to this clause of the Constitution; and 2, that it was void as against the commercial power. Both these grounds of defence were overruled for the reasons assigned in the opinion of the court, which need not be repeated, and the agent held liable to the penalty imposed for a violation of the act. The principle of that case must govern the one before us. The only difference between the statute of Virginia and that of Illinois is, that the latter is more onerous to the companies than the former. The difference is in degree, not in principle.

The power of the State to discriminate between her own domestic corporations and those of other States, desirous of transacting business within her jurisdiction, is clearly established in the case we have referred to, as it also had been in the previous case of Augusta v. Earle. #fn-s-s As to the nature or degree of discrimination, it belongs to the State to determine, subject only to such limitations on her sovereignty as may be found in the fundamental law of the Union. We find no such limitations in this case.

JUDGMENT AFFIRMED.

title: Ducat v. Chicago/Opinion of the Court


text: Talk:Ducat v. Chicago/Opinion of the Court


text: Masterson v. Herndon

title: Masterson v. Herndon


text: Talk:Masterson v. Herndon

title: Talk:Masterson v. Herndon


text:
Masterson v. Herndon/Opinion of the Court

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

Howard and others filed in the court below a bill of peace and for conveyance of pretended title to a tract of land described, against S. A. Maverick and J. H. Herndon, and on that bill the court decreed that the complainant 'have and recover of the said S. A. Maverick and the said J. H. Herndon the tract of land in the bill described, and that their title to the same is hereby decreed to be free from all clouds cast thereon by the said defendants.'

From this decree Herndon appealed. In regard to Maverick, the petition, which was signed by counsel only, and was not sworn to, was thus:

'Your petitioner says that his co-defendant, Maverick, refuses to prosecute this appeal with him.'

Mr. P. Phillips, for the appellees, now objected that there was no valid appeal in the case, because the decree being a joint decree against Herndon and Maverick, Herndon alone had asked for an appeal.

Mr. W. W. Boyce, contra.

Mr. Justice MILLER, after stating that a careful examination of the record satisfied the court that the decree was a joint decree, and that the appeal was clearly taken by Herndon alone, delivered its opinion as follows:

It is the established doctrine of this court that in cases at law, where the judgment is joint, all the parties against whom it is rendered must join in the writ of error; and in chancery cases, all the parties against whom a joint decree is rendered must join in the appeal, or they will be dismissed. There are two reasons for this: 1. That the successful party may be at liberty to proceed in the enforcement of his judgment or decree against the parties who do not desire to have it reviewed. 2. That the appellate tribunal shall not be required to decide a second or third time the same question on the same record.

In the case of Williams v. Bank of the United States, the court says that where one of the parties refuses to join in a writ of error, it is worthy of consideration whether the other may not have remedy by summons and severance; and in the case of Todd v. Daniel, it is said distinctly that such is the proper course. This remedy is one which has fallen into disuse in modern practice, and is unfamiliar to the profession; but it was, as we find from an examination of the books, allowed generally, when more than one person was interested jointly in a cause of action or other proceeding, and one of them refused to participate in the legal assertion of the joint rights involved in the matter. In such case the other party issued a writ of summons, by which the one who refused to proceed was brought before the court, and if he still refused, an order or judgment of severance was made by the court, whereby the party who wished to do so could sue alone. One of the effects of this judgment of severance was to bar the party who refused to proceed, from prosecuting the same right in another action, as the defendant could not be harassed by two separate actions on a joint obligation, or on account of the same cause of action, it being joint in its nature. This remedy was applied to cases of writs of error when one of the plaintiffs refused to join in assigning errors, and in principle is no doubt as applicable to cases where there is a refusal to join in obtaining a writ of error or in an appeal. The appellant in this case seems to have been conscious that something of the kind was necessary, for it is alleged in his petition to the Circuit Court for an appeal, that Maverick refused to prosecute the appeal with him.

We do not attach importance to the technical mode of proceeding called summons and severance. We should have held this appeal good if it had appeared in any way by the record that Maverick had been notified in writing to appear, and that he had failed to appear, or, if appearing, had refused to join. But the mere allegation of his refusal, in the petition of appellant, does not prove this. We think there should be a written notice and due service, or the record should show his appearance and refusal, and that the court on that ground granted an appeal to the party who prayed for it, as to his own interest. Such a proceeding would remove the objections made to permitting one to appeal without joining the other, that is, it would enable the court below to execute its decree so far as it could be executed on the party who refused to join, and it would estop that party from bringing another appeal for the same matter. The latter point is one to which this court has always attached much importance, and it has strictly adhered to the rule under which this case must be dismissed, and also to the general proposition that no decree can be appealed from which is not final in the sense of disposing of the whole matter in controversy, so far as it has been possible to adhere to it without hazarding the substantial rights of parties interested. We dismiss this appeal with the less regret, as there is still time to obtain another on proceedings not liable to the objection taken to this.

APPEAL DISMISSED.


text: Talk:Masterson v. Herndon/Opinion of the Court


text:
The Mabey

ON motion. Atkins had libelled the steam tug Mabey in the District Court at New York, for injury done by the Mabey to a vessel of his, then in New York harbor. The District Court decreed in his favor, and the Circuit Court affirmed the decree. The owner of the Mabey appealed to this court; and Mr. T. M. Wheeler, in his behalf, now moved the court for a commission to take further evidence to be read in this court on the hearing. The affidavits on which the motion was founded gave the names of several witnesses represented as residing in New York and Brooklyn, and swore that 'they were material and necessary witnesses in the action on behalf of the appellant, without the benefit of whose testimony he could not safely proceed to trial, as he is informed and believes, and as he is advised by his counsel therein, after a full and fair statement of the facts which the appellants expect to prove by the said witnesses.'

Mr. Justice NELSON delivered the opinion of the court.

title: The Mabey


text: Talk:The Mabey

title: Talk:The Mabey


text:
The Mabey/Opinion of the Court

No excuse is shown in the papers, on which the motion is founded, why the witnesses named, and proposed to be examined, were not examined in some one of the courts below before the hearing there. The affidavit simply states that the testimony of these witnesses is material, as advised by counsel.

This is not in accordance with the practice of the court. Some excuse, satisfactory to this court, should be shown for the failure to examine them in the courts below, such as that the evidence was discovered when it was too late to procure such examination, or that the witnesses had been subpoenaed and failed to appear, and could not be reached by attachments, and the like.

Many of the cases bearing on this subject are cases of amendment in the appellate court by adding new allegations and giving new proofs. But they involve the practice applicable to motions simply to examine witnesses in the appellate court. There can be no substantial amendment in this court; but if the pleadings or evidence are so defective that no decree can be founded upon them, and the case appear to have merits, the court will reverse the decree and remand the cause to the court below with directions to permit amendments and further proofs.

It is quite apparent, if commissions were to be allowed by this court to issue as a matter of course, on a formal application under the twelfth rule, without requiring any excuse for not taking the evidence in the usual way before the courts below, the privilege would be open to great abuse, disturbing the orderly proceedings in courts of admiralty. Instead of taking proofs in the cause in the courts below, and there thoroughly trying it, much of the evidence could safely be omitted, relying on the new evidence in this court. There is no hardship upon the parties in guarding against this abuse with great care and strictness, as they have two opportunities to procure the attendance and examaination of the witnesses before they come here on appeal: first, before the District Court, and again before the Circuit.

MOTION DENIED.

title: The Mabey/Opinion of the Court


text: Talk:The Mabey/Opinion of the Court

title: Talk:The Mabey/Opinion of the Court


text:
Campbell v. Wilcox

ERROR to the Circuit Court for the Southern District of Ohio.

A statute of July 13th, 1866, enacts, that any person who shall accept, negotiate, or pay, or cause to be accepted, negotiated, or paid, any promissory note, without the same being duly stamped, or having an adhesive stamp for denoting the tax chargeable thereon, and cancelled, &c., 'with intent to evade the provisions of the act,' shall forfeit $50, and that such instrument or note 'not being stamped according to law, shall be deemed invalid and of no effect.' A mode is provided in the act by which instruments may be stamped after being issued.

These provisions being in force, Wilcox sued A. &. L. Campbell in the court below, declaring upon four promissory notes of theirs, dated 4th August, 1866. The declaration contained the usual averments according to the established precedents in such cases, but did not aver that the notes were stamped as required by the act of Congress, either at their date or at any subsequent time. The defendants demurred generally. The demurrer was overruled, and they pleaded to the merits. The case being submitted by consent to the court without the intervention of a jury, judgment was given in favor of the plaintiffs for $10,805 On error the only question was on the demurrer.

Mr. Stanbery, for the plaintiff in error:

The English precedents of declaration upon instruments subject to stamp duties, do not indeed contain an averment that they were stamped at their date, or at any subsequent time, but they are not in point, for the want of a stamp does not in England invalidate the instrument, but only excludes it from being used in evidence until stamped. Our statutes declare the unstamped instrument invalid until a stamp is affixed by an application to an internal revenue officer. If the stamp is necessary to give validity to the instrument, it would seem that the declaration should aver that the note was stamped.

Mr. W. Cornell, contra.

Mr. Justice FIELD delivered the opinion of the court.

title: Campbell v. Wilcox


text: Talk:Campbell v. Wilcox

title: Talk:Campbell v. Wilcox


text:
Campbell v. Wilcox/Opinion of the Court

The only question in this case arises upon the demurrer to the declaration. The action is upon four promissory notes of the defendants, and the declaration contains the usual averments according to the established precedents in such cases, but does not aver that the notes were stamped as required by the act of Congress, either at their date or at any subsequent time. The demurrer is general, that the declaration does not set forth facts sufficient in law to constitute a good cause of action; but the omission of an averment, in the particular mentioned, constitutes the special ground of objection presented in the brief of counsel.

To the objection there are several answers. In the first place, the act of Congress which requires promissory notes and other instruments to be stamped, only declares that they 'shall be deemed invalid and of no effect' when the stamp is omitted 'with intent to evade the provisions' of the act-that is, with intent to defraud the government of the stamp duty. It is a fraudulent and not an accidental omission at which the penalty of the statute is levied. Such fraudulent omission, if available at all to the maker of the note, can only be set up by special plea or urged on the trial. It cannot be taken advantage of on demurrer.

In the second place, if a stamp were essential to the validity of paper of this kind, the avernment in the declaration that the defendants had made and delivered to the plaintiff their promissory notes, would imply that the instruments were at the time in the form and condition required by law. It has been held that in a declaration upon a contract, some memorandum of which, under the statute of frauds, must be in writing, a compliance with the requisition of the statute is implied in the averment that the contract was made, and that such compliance need not be specifically stated, although it must be proved if denied by the defendant. So in this case the existence of a stamp upon the notes, as in the case stated, the existence of a writing, is a matter of evidence and not of pleading.

In the third place, the filing of a plea to the merits after the demurrer was overruled, operated as a waiver of the demurrer. The pleading was thus abandoned, and ceased thenceforth to be a part of the record.

The defence is without merit, and the writ of error appears to us to have been prosecuted merely for delay. The judgment will therefore be

AFFIRMED WITH TEN PER CENT. DAMAGES.

title: Campbell v. Wilcox/Opinion of the Court


text: Talk:Campbell v. Wilcox/Opinion of the Court


text:
United States v. Vigil (77 U.S. 423)

THIS was a motion to dismiss an appeal taken on the part of the United States from the Supreme Court of the Territory of New Mexico.

The suit was brought by Vigil and others to recover a parcel of land in that Territory, under a special act of Congress, passed 21st June, 1860, which gave the right of appeal to either party, if asked for within one year from the rendition of the judgment. A judgment was rendered against the United States in the court below, at the January Term, 1867, from which an appeal was sought to be taken. The only question was as to its regularity. It was maintained on the part of the government that the appeal was prayed for by the district attorney of the United States in court at the time already mentioned, when the judgment was rendered, and was granted, but that the clerk, for some unexplained reason, neglected to make an entry in the minutes of what was thus done.

This omission of the clerk did not appear to have been discovered by the district attorney till January Term, 1869. In the meantime this officer in the Territory had retired from the office, and when the omission was brought to his notice by his successor he expressed his surprise, and stated that he not only prayed for the appeal but charged the clerk to make the entry, and, as he believed, gave him a memorandum to that effect. As soon as the omission came to the knowledge of his successor, he made an application to the court below to amend the record so that it might appear that the appeal had been prayed for, according to the facts, at the term in which the judgment was rendered.

The court granted the application and ordered that an entry be made, nunc pro tunc, of an appeal in the cause, asked for at the January Term, 1867, and that the same be granted. But, of course, no transcript of the record was returned and filed in this court before the end of the next term after the allowance of the appeal regarding it as of that date.

Messrs. Watts and Ewing, Jr., in support of the motion,

Adverting to the fact that the record showed no citation, insisted that although the proceedings finally taken below might establish the appeal and make it valid, as of the January Term, 1867, yet, according to the settled practice of the court, a transcript of the record in the court below must be returned by the clerk and filed in this court before the end of the next term after the allowance of the appeal; otherwise that it would be dismissed for want of jurisdiction, and that, in this respect, the appeal was defective.

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

Mr. Justice NELSON delivered the opinion of the court.

title: United States v. Vigil (77 U.S. 423)


text: Talk:United States v. Vigil (77 U.S. 423)


text:
United States v. Vigil (77 U.S. 423)/Opinion of the Court

The action of the court below, granting the application made to it by the new district attorney, and ordering that an entry be made nunc pro tunc of an appeal in the cause, asked for at the January Term, 1867, and that the same be granted, completed the appeal, and we think it was well sustained by the proofs before the court.

The practice relied on for the present motion for dismissal, may be admitted, but there are exceptions to the rule. The United States v. Gomez is an instance. There the proceedings on the appeal had been suspended for the purpose of a motion in the court below to set it aside, and the clerk also had refused to return and file the transcript. These facts were regarded as a sufficient excuse for the delay in filing the record in this court at a subsequent term. The United States v. Booth had already established an exception. That was the case of a writ of error and the clerk had refused to return or file the transcript, which occasioned the delay.

The same principle was adopted in the case of Alviso v. The United States. The case had been dismissed at the December Term, 1866, for want of a citation. A motion was made at the succeeding term to reinstate it upon the docket on the production of proof that a citation had been signed by the judge and served on the United States district attorney in due time. Ojection was taken that the proof came too late, as, according to the settled practice of the court, the motion to reinstate must be made at the same term at which the motion to dismiss was granted. But it appearing from the proofs that the clerk's office, where the records were kept, had been partially destroyed by fire in July, 1866, which occasioned great confusion and some loss of the papers, the court regarded the facts as affording a sufficient excuse for the delay.

Now in the case before us the fault of the clerk in not entering the prayer for the appeal has mainly occasioned the delay in perfecting it. It is true the vigilance of the United States district attorney might have corrected the error, but unfortunately he labored under the conviction that the appeal had been prayed for, and allowed, at the time the judgment was rendered, and that nothing was left to be done but the return and filing of the transcript by the clerk, and was not undeceived till his attention was called to the case by his successor.

This neglect of duty by the clerk and inattention of the district attorney led to the necessity of a motion to the court to amend the record, so as to make it appear thereon that the proper steps had been taken in due time to secure an appeal on the part of the government. The prayer for an appeal in due time, although not granted then by the court, secures this right, and no delay by the court in its allowance can impair it. The order nunc pro tunc contains the allowance. It is true some considerable delay has taken place in perfecting this appeal, but the court is of opinion that it has been sufficiently accounted for from the facts and circumstances appearing on the face of the record. The government is obliged to trust the conduct of cases, in remote parts of the country, to subordinate agents, and the distance in the present instance is so great from the seat of government that a very considerable lapse of time is required to communicate with the head of the department. In such cases some indulgence must be extended to the officers thus engaged, and this difficulty of communication should be taken into consideration in determining the question of delay in conducting the legal proceedings of the government.

The want of a citation was mentioned on the argument as another ground of dismissal, but the answer is, the appeal was taken in open court at the term in which the judgment was rendered. In such cases no citation is necessary.

MOTION DENIED.


text: Talk:United States v. Vigil (77 U.S. 423)/Opinion of the Court


text: Tappan v. Beardsley

title: Tappan v. Beardsley


text: Talk:Tappan v. Beardsley

title: Talk:Tappan v. Beardsley