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Hitz v. National Metropolitan Bank/Opinion of the Court

This is a bill in chancery brought by the bank against John Hitz, Jane C. Hitz, his wife, and Metzerott and Cross, trustees, to declare void a deed, so far as it affects rights of the bank, made by Hitz and wife to Metzerott and Cross, as trustees, for the benefit of the wife. The deed was made December 9, 1878, and filed for record in the proper office, May 13, 1879. The property conveyed, which was real estate in the city of Washington, came to Mrs. Hitz by inheritance from her father, and by the birth of children before the married woman's act of congress of April 10, 1869, (16 St. 45.) Hitz had become entitled to a life estate in it as tenant by the curtesy. It is this right which is the subject of the present controversy. The bank, as creditor of Hitz, obtained a judgment against him on the twenty-eighth day of April, 1879, for the sum of $10,000, with interest and costs, and on the fifth day of June a writ of execution was issued on said judgment and returned nulla bona the same day. On the next day plaintiff caused another execution to be issued on the same judgment, and levied by the marshal on the interest of the said John Hitz in the property described in the trust deed of Hitz and wife to Metzerott and Cross.

We will notice the grounds on which the validity of the deed is assailed, in their order:

1. It is said that the deed was never delivered to the trustees. But the testimony of Mr. Metzerott, complainant's witness, shows clearly that he did receive the deed and kept it for an indefinite length of time, and then placed it in a box which he bought for that purpose, and handed it to Mrs. Hitz, that she might deposit the box with this and other valuable papers in the Bank of the Metropolis. This was done. It is also objected that it was delivered to Metzerott as an escrow, to be recorded, as he expresses it, only when Hitz should have made some adjustment of his indebtedness to the German-American Bank, which has never been done. It is quite obvious, and perhaps natural, that Metzerott should confound his holding the deed as an escrow and withholding it from record as meaning the same thing; and it is very clear from all his testimony and that of Mr. Cross, the other trustee, that only the latter was in question. Both of these gentlemen had been consulted before the deed was made, and had consented to act as trustees in it. As soon as the deed was executed and acknowledged, it was placed in the hands of Metzerott, who received and held it for some time, and then gave it to the party chiefly interested for safe-keeping Leaving out the testimony of Mrs. Hitz, of Hitz, and their sworn answers, in which they both deny that they had ever heard of the deed being delived as an escrow, it is plain that it was executed, delivered, and the trusteeship accepted, and the deed thus became a valid instrument as between the parties to it.

2. As regards the understanding that it was not to be recorded until Hitz's debt to the bank was adjusted, it rests upon Mr. Metzerott's testimony alone. Mrs. Hitz swears that though she was advised by Mr. Cox, her lawyer, who drew up the deed, that it was better not to record it at once, and that Mr. Metzerott expressed the same views to her, she did not adopt them, and made no promise to withhold it from record. Hitz, whose interest in the property was the thing conveyed, says that he had no such understanding, and Cross, the other trustee, knows nothing of it except what was told him by Metzerott. There can be no reason favorable to the purpose of the deed, the interests of Mrs. Hitz, the cestui que trust, why it should be withheld from record, or why she should have made such a promise.

3. This brings us to the third objection to the deed, namely, that it was voluntary, was without consideration, and designed to defraud creditors. It appears that up to a very short time before this deed was made, Mr. Hitz had the entire management of his wife's affairs, and she had trusted him unreservedly. It was a complete surprise to her when she learned that with the failure of the bank, of which her husband was president and principal manager, her own fortune, inherited from her father, had also disappeared. The evidence leaves no doubt that she at once took the management of her affairs out of his hands, not even permitting him to receive or collect for her the rents of what remained, of which the property now in suit was the main part. It appears that, to save himself from prosecution by the bank, or for other reasons, he desired to convey to the bank some real estate, the title of which was in his own name, though it had been purchased partly by her money. He wished her to join him in conveyance of this property to Keyser, the receiver, who had been appointed to close up the affairs of the bank. He had also conveyed to Hatch and wife, for some purpose of his own, a valuable business house on Pennsylvania avenue, which was part of her inheritance, and then had procured these persons to mortgage it to the bank of which he was president, to secure a large debt due by him to the bank. But it had been discovered that Mrs. Hitz had never signed or otherwise executed any conveyance of this lot. Mr. Hitz was in an embarrassing condition with regard to this matter. It was after some resistance on her part to making these matters straight for Mr. Hitz that it was agreed, if he would make the deed of trust by which all the estate in the lots mentioned in it, including his interest, whatever it might be, and hers also, should be secured to Mrs. Hitz and her children by the intervention of trustees, she would make good the title of the lot on Pennsylvania avenue which he had pledged to the bank, and would join him also in the deed to Keyser, the receiver, of what was asserted to be his property. The trust deed was, therefore, made on a valuable consideration. The value of the avenue property alone conveyed by Mrs. Hitz is sworn to be $18,000. What her interest in the other property was worth is not proved, and could not easily be ascertained. No estimate of the value of Hitz's interest in the lots conveyed to the trustees is shown. When, sitting as a court of equity, we see this man trying to rectify the wrong done his wife, we are not required to scan closely the value of what she gave at the moment for his relinquishment of his marital rights in her remaining property. The case is wholly free from fraud. Mrs. Hitz had the same right to buy his curtesy in her real estate, to have it barred by a proper conveyance, as any one else had or could have had. er equity was as good as that of any other creditor, and he could secure her as well as he could the bank. As the present complainant had no lien on the property, the joint right of husband and wife to sell it for value was undoubted, and the right to sell to her by the intervention of trustees is equally clear. The property she gave in exchange for his interest in her lots did not go to him to be secretly used in fraud of his creditors, but was conveyed directly to creditors in satisfaction of his debts. The conveyance was not without consideration, and it was without fraud.

We do not concur in the view of the learned court below, that because the sum of one dollar is mentioned in this trust deed as the consideration, the true consideration cannot be shown by parol evidence.

It is always understood that the one dollar in such connection is merely nominal, and is never actually paid. In this case it means no more than that nothing was paid by the trustees, who took no beneficial interest. It neither contradicts nor varies this statement to show that a valuable consideration passed from Mrs. Hitz to her husband for his conveyance of his life estate to the trustees for her benefit. The question is unimportant in this case, because the bill of complaint calls upon the defendants to show under oath the true consideration of the deed in the following language: 'That defendants by their answers under oath may disclose what was the real and true consideration and purpose for the making of said deed.' That the answer thus called for, showing a valuable and meritorious consideration, which answer is uncontradicted by any evidence whatever, and is well supported on cross-examination of defendants in their depositions, can be disregarded as inadmissible because unfavorable to the party who demanded it, would be to permit the party to trifle with the powers of the court at its pleasure.

4. There remains to be considered the effect to be given to the fact that complainant recovered its judgment against Hitz before this deed was recorded, but issued no execution until after it had been filed according to law with the proper officer for record. On this question a petition for a rehearing points out a mistake in the opinion of the court as originally delivered, in regard to the date of the act repealing the recording statutes as found in sections 446 and 447 of the Revised Statutes, whereby we were misled to believe that the sections mentioned governed the case. It is apparent, however, that the new statute was approved April 29, 1878, and not 1879, and its provision as to the effect of recording, or failing to record, the instrument in question, which was executed in December, 1878, must be governed by that act. It is in the following language: 'That all deeds, deeds of trust, mortgages, conveyances, covenants, agreements, decrees, instruments in writing, which by law are entitled to be recorded in the office of the recorder of deeds, shall take effect and be valid, as to creditors and subsequent purchasers for valuable consideration without notice, from the time such deed, deed of trust, mortgage, conveyance, covenant, agreement, or instrument in writing shall, after having been acknowledged, proved, or certified, as the case may be, be delivered to the recorder of deeds for record, and from that time only.' Supp. Rev. St. 315.

As the deed of trust in question was not recorded until several weeks after the judgment of the bank against Hitz was recovered, and as there is no evidence that the bank ever had actual notice of its existence until after execution was issued and levied on Hitz's interest in the property, we entertain no doubt but that the conveyance would be ineffectual against the bank, or any purchaser at the sale under that judgment. But as this deed interposed no obstruction to the sale, and none to the title of a purchaser, it is not easy to see on what ground the interposition of a court of equity is sought, since the bank having levied on Hitz's interest in the property, which was a legal estate if it was anything, it could be sold under that execution, if liable to sale for his debts, without the aid of a court of equity, the whole proceeding being one at law, and its effect, when completed, a mere question of statutory construction. It may be, however, that the bank had a right to remove the apparent cloud which this deed would throw upon the title of the purchaser at the sale, and this demands of us an examination of the argument advanced at the hearing, that this interest of Hitz in the property of his wife was not liable to sale for his debts, by reason of section 727 of the Revised Statutes for the District of Columbia, which is as follows: 'In the district, the right of any married woman to any property, personal or real, belonging to her at the time of marriage, or acquired during marriage in any other way than by gift or conveyance from her husband, shall be as absolute as if she were unmarried, and shall not be subject to the disposal of her husband, nor be liable for his debts.' There can be no question that this statute exempts the wife's property from the control of her husband, and liability for his debts as to all property coming to her from any source but him, after its enactment. This was on the tenth of April, 1869, and it is insisted that the right of Hitz, as tenant by the curtesy, had then become vested, because the inheritance had then come to Mrs. Hitz, the marriage had taken place, and issue had been born of it.

It is argued with much force that congress did not intend by this statute to destroy an existing vested right of the husband under such circumstances, and that if it did so intend it had not the power to do so. We should be slow, however, to impute any such purpose to congress, unless the language in which its statutes are framed demands it. The question does not arise in the case before us.

Three distinct departures from the old law are announced in this new statute in regard to the husband's relation to his wife's property, both real and personal: (1) That her right to it shall be as absolute as if she were unmarried; (2) that it shall not be subject to the disposal of her husband; (3) that it shall not be liable for his debts. In regard to the first of these, it may be conceded that where, at the time of the enactment of this law, the husband had acquired a vested right in the property, congress did not mean to destroy it, and that to that extent her right would not be as absolute as if she were unmarried. It would result from this, that, as between Mrs. Hitz and her husband, his right by the curtesy would remain. It is not necessary to decide in this case whether he could, in view of the second clause of the statute, transfer that right to another by sale or otherwise. If he retained the right to its possession and its use so long as he lived, even after her death, it seems reasonable that a statute which limited his power over it to that use and possession would not be liable to the charge of destroying a vested right. In regard to the third clause, that it shall not be liable for his debts, the argument is still stronger, for that divests him of no right, and does him no injury. What effect it might have as against an existing creditor at the time the law was passed, as impairing the obligation of a contract, we need not decide, for it does not appear that there are now any such creditors, and it appears affirmatively that the debt of the bank in this case was created nearly 10 years after congress declared that her property should not be liable for his debts. In regard to this clause of the statute, and to its operation in this case, it is neither retrospective, nor does it impair the obligation of a contract.

It is urged, however, that the plain purpose of the statute was to deprive the husband of all legal interest in the property of the wife, and it must therefore be construed to relate only to property acquired after the passage of the law. For this purpose, however, the first clause of the declaration, namely, that her right to such property 'shall be as absolute as if she were unmarried,' is amply sufficient. And if that was all that was intended the two subsequent clauses were unnecessary, and tended to weaken that declaration. These latter clauses, however, and especially the last, may be applied to cases where the other would not, namely, to cases of marriage already in existence, and where the husband's marital rights had attached. In this class of cases, the enactment that her property should not be liable for his debts, because he held some right of present control, was in accord with the spirit of the main principle of the statute, and, as applied to debts thereafter created, it did no one injustice.

It is also argued that the property exempted from his debts by the act is her property, and that the life estate of the husband is not her property. But this is a very narrow view, and is not justified by any fair grammatical construction of the language employed. It is the right of a married woman to any property, personal or real, belinging to her at the time of marriage, or acquired during marriage, which shall be as absolute as if she were unmarried, and shall not be subject to the disposal of her husband. It was the purpose of the statute to abolish this tenancy by the curtesy, or any other interest of the husband, in all her property, and to place her in regard to it in the condition of a feme sole. And it was this same property, and not part of it, no separate interest or estate in it, which was exempted from liability for his debts. It would be a queer construction of the statute, looking at its manifest purpose, to hold that it meant, though her property shall never come under his control, and he shall acquire no interest in it, and it shall never be liable for his dobts, the use and possession, the rents and profits of it, may be made liable to his debts as long as he lives. We are of opinion that the statute intended to exempt all property, which came to the wife by and other mode than through the husband, from liability to seizure for his debts, without regard to the nature of the interest which the husband may have in it, or the time when it accrued, and that, in regard to such debts created after the passage of the law, no principle of law or morals is violated by the enactment. On the contrary, if we concede, as in the present case, that the husband had acquired a tenancy by the curtesy in her property before such enactment, it is eminently wise and just that no other person should afterwards acquire such an interest in it as to disturb the joint possession of it, and turn the family resulting from the marriage out, that it may go to pay his debts.

The authorities cited by counsel for appellee rather sustain, and certainly do not contradict, this view of the matter.

In the case of Rose v. Sanderson, 38 Ill. 247, while the court holds that a statute, very much like the act of congress relied on here, did not exempt from sale for the husband's debt his life interest in her real estate which had become vested before the passage of the act, it is apparent, from the record, that the debt for which the writ of attachment was levied on that interest, existed when the statute of exemption was passed. The case states explicitly that the act went into effect April 24, 1861, and the attachment was levied May 10, 1861, and the husband's right, either by the curtesy or for the wife's life, had vested long before. It might, therefore, have been held to impair the obligation of the plaintiff's contract if the act had been so construed as to exempt that interest from liability to sale for that debt.

In the case of Stehman v. Huber, 21 Pa. St. 260, it was simply held that where, on a partition of an estate in which the wife was a part owner, the husband advanced a considerable sum as owelty in her behalf, he thereby became interested in the prop rty allotted to her and conveyed to her and to him jointly, and that the husband, by executing a conveyance of this interest to a third person, who conveyed it to the wife, could not thereby defeat the existing creditor's right to appropriate that interest to the payment of his debts.

In the case of White v. Hildreth, on the other hand, there came before the supreme court of Vermont, for construction, a statute in regard to the debts of the husband very like the act of congress. It enacted that 'the rents, issues, and profits of the real estate of any married woman, and the interest of her husband in her right in any real estate which belonged to her before marriage, or which she may have acquired by gift, grant, devise, or inheritance during coverture, shall, during coverture, be exempt from attachment or levy of execution for the sole debts of her husband: * *  * provided, this act shall not affect any attachment or levy of execution already made.' Comp. St. Vt. 1850, p. 403, § 15. In the case mentioned, 32 Vt. 265, the husband had built upon and improved land of the wife, after which she rented it to her son, in whose hands the rent was attached by trustee process for the debt of the husband. But the court said: 'The legal title to the land, with the supervening improvements and building, is still in the wife. It accrued during coverture. The rent reserved in the lease to her son, is the rent of the land she owns. The statute expressly exempts such rent from the hands of his creditors. This provision of the statute seems to answer what otherwise must have been a well-founded suggestion, viz., that though this money is payable to the wife of the defendant, still it is not the rent of the freehold which the husband held by virtue of the coverture and the birth of issue capable of inheriting, and is, in contemplation of law, entirely the husband's, without invoking the wife as the meritorious cause.' Here the court holds distinctly that this statute, which does not profess to abolish the tenancy by the curtesy, is still an answer to an attempt to subject the rents and profits to his debts, because it declares that the property shall be exempt from levy for his debts.

In Oregon, the constitution of the state declared that 'the property and pecuniary right of every married woman, at the time of the marriage, or afterwards acquired by gift, devise, or inheritance, shall not be subject to the debts or contracts of the husband.' In the case of Rugh v. Ottenheimer, 6 Or. 231, it was held that this provision applied to marriages, and existing and property rights of the husband acquired before the constitution was adopted, and that such property could not be subjected to the husband's debt, though he had wrongfully taken the title in his own name.

For these reasons, we are of opinion that the property levied on by the execution of the bank against Hitz is not subject to sale for his debt, and that the decree of the supreme court must be reversed, and the case remanded to that court with directions to dismiss the bill. It is so ordered.


text: Talk:Hitz v. National Metropolitan Bank/Opinion of the Court

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


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Badger v. Gutierez

''Sol. Gen. Phillips'', for plaintiff in error.

J. Ward Gurley, for defendant in error.

MILLER, J.

title: Badger v. Gutierez


text: Talk:Badger v. Gutierez

title: Talk:Badger v. Gutierez


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Badger v. Gutierez/Opinion of the Court

This is an action by defendant in error against Badger, plaintiff in error, who was collector of the port of New Orleans, for the wrongful seizure and detention of the license, enrollment, shipping articles, and other papers of the schooner Theresa G, of which he was owner. The plaintiff, on the trial, recovered a verdict for the sum of $3,000 damages, and on his remitting $1,000 of the verdict a judgment was rendered for the remainder, with costs. A bill of exceptions set forth the facts in the case as follows:

'Be it remembered, that on the trial of this cause before a jury there was evidence introduced tending to show that the schooner Theresa G, whereof Frank Gutierez was master, sailed from Havana on ninth September, 1879, bound for the port of Shieldsborough; that on or about the twenty-ninth September, 1879, said vessel arrived in Grand Caillon bayou, an inlet of the Gulf of Mexico, lying within the customs collection district of the Teche; that the arrival of said vessel was not reported to collector of the district of the Teche, but that on the twenty-eighth October, 1879, while said vessel was lying in said bayou, and in said district of the Teche, Gutierez reported the arrival of the vessel to collector's office at Shieldsborough, which was the port of her registration, and, in the absence of the collector of that port, a deputy collector received from Gutierez the foreign register of said vessel, and issued to him a coasting license and enrollment.

'That on the thirty-first October the collector at Shieldsborough wrote to General Badger, collector port New Orleans, stating that said papers had been issued improperly in his absence, and requesting him, Badger, to get them from Gutierez; that on the first November, 1878, J. M. Tomlinson, chief clerk of Badger, collector, acting under instructions from Badger, found Gutierez for the purpose of inspection, obtained the papers issued at Shieldsborough from Gutierez; that from this date Badger, acting under the advice or instruction of the secretary of the treasury, refused to deliver the ship's papers to Gutierez, though demand d from him on the same day or subsequently.

'That on the fourth November, 1879, on information given by Badger, collector, the Theresa G was libeled for violation of section 2774, Rev. St., on part of master, and seized by marshal on sixteenth November; that on the eighteenth November, 1879, Gutierez filed his claim and bonded the vessel, and she was delivered up to him.

'That on the eighteenth November, 1879, Gutierez demanded from Badger the papers taken by Tomlinson, which Badger refused to deliver; that thereupon Badger reported the facts to the Secretary of the Treasury, who directed Badger to retain the papers issued at Shieldsborough, and subsequently directed Badger to send papers to Washington, D. C., which was done.

'That on eighteenth November, 1879, Badger stated to Gutierez that the Theresa G might be brought from Caillon bayou to New Orleans by S. W. Pass, Mississippi river, and he, Badger, thereupon sent to boarding officers written instructions to let vessel pass to New Orleans, but that Gutierez declined to bring his vessel on such permission; that this permission was declined by Gutierez on the ground that he must have in his possession documentary permission before he could safely navigate his vessel; that on January 9, 1880, written permission was given by Badger, collector, to master of the Theresa G to bring said vessel from Caillon bayou to Lookout station, in the collection district of New Orleans; that said vessel was thereupon brought to Lookout station, and that on the twenty-fourth day of January, 1880, Collector Badger granted clearance papers to said vessel.

'Be it remembered further, that at the conclusion of said trial the court charged the jury as follows: 'That the papers of the vessel were essential to her prosecuting navigation, and that it was not competent for the collector of the Teche district to have given to the Theresa G clearance papers under which she could have proceeded without the production of the ship's papers detained by Badger; that the defendant had the right to seize the ship, and for such seizure a judgment in another cause had established that there was probable cause, but that if the jury found from the evidence that the defendant detained the papers of the ship at a time when the ship was not under seizure, and which was not deposited with him for the purpose of the vessel's making an entry or clearance, that for such detention the plaintiff could recover damages; that this recovery could be had even if the papers had been improperly issued by the collector at Shieldsborough; that detention of the ship's papers, without giving her others, left her powerless to pursue any navigation of a vessel.' To this instruction, and to each clause of the same, the attorney for the defendant then and there, and in the presence of the jury and before they withdrew to deliberate upon the case, excepted.'

This instruction presents the main question to be decided. Other prayers for instructions were asked by defendant, which were either modified or refused. All of these were based upon the idea that because the master of the schooner had arrived at Grand Caillon bayou, and failed to report his arrival to the collector of the Teche district in due time, she therefore became liable to seizure, and the defendant could take her enrollment and license, however obtained, and detain them, and also her register, as long as it suited him, or that for some other irregularity in issuing them he could do the same thing.

It is to be understood that every vessel of the United States, which is afloat, is bound to have with her from the officers of her home port either a register or an enrollment. The former is used when she is engaged in a foreign voyage or trade, and the latter when she is engaged in domestic commerce, usually called the coasting trade. If found afloat, whether by steam or sail, without one or the other of these, and without the right one with reference to the trade she is engaged in, or the lace where she is found, she is entitled to no protection under the laws of the United States, and is liable to seizure for such violation of the law, and in a foreign jurisdiction, or on the high seas, can claim no rights as an American vessel. To seize and detain these papers, therefore, is to expose her to numerous evils, and, in fact, to prevent her use by her owners, and, as the mildest evil, to tie her up so long as the detention of her papers lasts. It is to be observed that when he procured the enrollment and license at Shieldsborough the owner gave up his register, so that when the license and enrollment were taken from him his vessel was left without any legal evidence whatever of her right to pursue either domestic or foreign trade. It is also to be mentioned that it is the right of the owner to exchange a register for an enrollment, and where this is done the register is necessarily delivered to the officer who issues the enrollment. If this enrollment was for any reason improperly issued there must be methods by which the act may be set aside or canceled, or a penalty enforced for its improper use. In such case the owner would undoubtedly be entitled to a proper issue of another enrollment, or to a return of his register. In no event that we can conceive of had the defendant a right to keep from him both his register and enrollment, and leave his vessel destitute of these indispensable evidences of her national character and right to pursue her vocation. Nor do we think that the offense he committed of remaining in Caillon bayou justified this detention of his ship's papers. For that offense the law prescribed a penalty, which the owner was made to pay. This prosecution for that violation of the law stood on its own ground, and had its own penalty, which did not include a forfeiture or seizure of the papers of the vessel. If plaintiff had voluntarily given up his enrollment there might have been some excuse for withholding it until matters were made right concerning the alleged irregularity of the exchange of the register for a coasting license and enrollment. But even while withholding these latter papers he was clearly entitled to his register, which was refused on demand. But it is also apparent that the enrollment came into Badger's possession by means equivalent to a forcible seizure against the will of plaintiff. The chief clerk of Badger hunted up Gutierez, and under pretense of inspecting these papers obtained possession of them under instruction from Badger, and refused to return them on demand, as did Badger also. Though the secretary of the treasury justified these proceedings, and acting under his advice Badger refused to deliver up any of the ship's papers for a considerable time, and they were finally sent to Washington, we do not see that this made his course in seizing and detaining the papers any the less a tort, for which the secretary could not relieve him from responsibility.

We see no error in the record, and the judgment of the circuit court is affirmed.

title: Badger v. Gutierez/Opinion of the Court


text: Talk:Badger v. Gutierez/Opinion of the Court


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Factors' Traders' Insurance Company v. Murphy

[Syllabus from pages 738-739 intentionally omitted]

[Statement of Case from page 739 intentionally omitted]

G. L. Hall and R. L. Gibson, for plaintiff in error.

''Chas. W. Hornor'', for defendants in error.

MILLER, J.


text: Talk:Factors' Traders' Insurance Company v. Murphy


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Factors' Traders' Insurance Company v. Murphy/Opinion of the Court

This is a writ of error to the supreme court of Louisiana. The defendant in error sued in the proper court of the state to foreclose a mortgage given by Paul Cook and Justus Vairin, Jr., to secure the payment of four notes of $10,000 each, given by them in their partnership name of Paul Cook & Co., of which she was then the holder and owner of two, all the notes being of the same date. She alleged that Cook and Vairin had been declared bankrupts, and that by certain proceeding in the bankruptcy court, and under its order, the mortgaged property had been sold free from incumbrance, and bought in by several persons who had liens on it, by whose order it was conveyed to the Factors' & Traders' Insurance Company, which held the other two notes secured by the mortgage. She further alleged that the effect of this sale was to extinguish the mortgage as to the notes held by that company, and all other liens but hers, and to make that company liable to her for the amount of these notes, with a first lien on the property mortgaged. That the sale under the order in bankruptcy was not binding on her, because she was not made a party to the proceeding and had no notice of it, while it was binding on all the other lienholders whose liens were thereby discharged, leaving hers a paramount lien on the property. The insurance company and the other parties interested answered and insisted that Mrs. Murphy was bound by the bankruptcy sale because she was represented by T. A. Archer, who, as her agent, and having possession of her notes, took part in all the proceedings, and in that character was one of the purchasers, and joined in directing the conveyance to be made to the insu ance company. They admit her interest in the property in proportion to the extent of her notes, but set up certain expenses and charges on it paid by them for taxes, necessary improvements, and prior liens, to the amount of $11,454.83, as a superior claim to her notes. The testimony of Mr. Archer shows that he understood himself as acting for Mrs. Murphy, having as her agent possession of the two notes now in suit. That in that character and no other he took part in all the proceedings for the sale and purchase of the mortgaged property, and that during that time he had frequent conversations with her and explained to her what was going on, to which she made no dissent. But he does not say that she at any time, in express terms, authorized him to represent her in the sale or in the proceedings connected with it. The record of those proceedings, on the contrary, affirm that Mr. Archer acted for Marshall J. Smith & Co., of which company he was a member, and no mention of Mrs. Murphy is found in the record of that case, though both Archer and Smith have sworn they had no real interest in the matter, and only appeared as representing Mrs. Murphy's notes then in their possession, and with her assent. The supreme court of Louisiana, on appeal, held that Mrs. Murphy was not a party to the proceeding in bankruptcy, and was in no sense bound by the sale of the mortgaged property, but that the sale had the effect of extinguishing and satisfying all the liens on the property but hers, and left her notes the only lien on it. While it held that the insurance company was not bound for the debt in personam, it decreed that unless the company paid her debt, with interest, costs, and 5 per cent. attorney's fees, the property should be sold to raise the money, and denied the company's claim for taxes and other necessary outlays for the benefit of the property.

Counsel for defendant in error deny the jurisdiction of this court and move to dismiss the writ. But it is apparent that the only controversy in the case relates to the effect to be given to the sale under the order of the district court of the United States, to sell the mortgaged property free from incumbrance. Both parties assert rights under this order and sale. Plaintiffs in error assert that the sale as made was valid, and, being sold free from incumbrances, extinguished Mrs. Murphy's lien as well as others. Defendant asserts that it had the effect of discharging all other liens but hers, and thus gave her the exclusive, paramount lien on all the property so sold. Both the parties, therefore, rely upon rights under federal authority, and as the right of plaintiff in error was denied by the court the writ of error lies.

As regards the merits, it is impossible to shut one's eyes to the injustice of the decree. The plaintiffs in error, who were led to suppose that they were acting in concert with Mrs. Murphy, or at least with the holders of her notes by her consent, join in purchasing the property for the benefit of all the lienholders and receive the title in trust for their common benefit. It is immediately necessary, to save it from loss, to pay taxes and other prior liens and to make improvements necessary to its preservation to the extent of over $11,000, for which they advance the money. Mrs. Murphy, who was aware of all these proceedings, and that the holder of her notes co-operated in them by virtue of those notes, now, when, by reason of depreciation in the value of the property, it is insufficient to pay her debt alone, asks that the others shall be sacrificed, that it shall all go to satisfy her debt, and even the money advanced to save the property from sale for taxes and from falling to decay, which is paid by others and inures now to her benefit, shall fall upon them as a dead loss. If this be the necessary legal result of that proceeding in bankruptcy, the decree of the state court must be affirmed, but it will certainly be a result at variance with the policy of a statute whose main pur ose was to secure an equal distribution of an insolvent debtor's property among all his creditors.

The first question to be decided is whether Mrs. Murphy was a party to the bankruptcy proceeding, so as to bind her to the order that the sale was free from incumbrance, by which, while her lien with all others was discharged, she had a right to her proportion of the price bid for it. We are of opinion, with the supreme court of Louisiana, that the record in this case does not show such service of process or other notice as makes Mrs. Murphy such a party to the bankruptcy proceeding as binds her to the sale and discharges her lien. The case of Ray v. Norseworthy, 23 Wall. 128, is conclusive on that subject, and is, we think, sound in principle. The effect of this proposition is that after the sale was made she was at liberty to accept such a part of the sum for which the property sold as her two notes would entitle her to in their relation to all other liens on it, by which she would have ratified the sale; or to proceed in her own way to subject the property to payment of her debt, which she has done by the foreclosure suit now on review. * But in this suit she has not elected to proceed in disregard of that sale, whereby, when the property would be sold under her decree of foreclosure, the proceeds of it must be brought into court and distributed among the lienholders according to their priorities; but she seeks to affirm that sale as free from all incumbrances except her own, thereby assuming the benefit of a decree to which she was not a party, while denying its obligation on herself, without which the decree would not have been made. The adoption of this view by the supreme court of Louisiana is based by that court upon the doctrine of confusion found in the Civil Code of that state. Without examining into the decisions of the state courts on that subject, it is sufficient to say that, in construing the effect of this sale under the order of the district court of the United States, it must be decided by those general principles which govern bankruptcy proceedings under that statute, rather than the Code of the state in regard to voluntary sales of mortgaged property between individuals.

In this view of the subject it is not possible, consistently with any equitable view of the case, to hold that this sale discharged part of the liens against the property, and increased thereby the value of other liens at the expense of the purchasers. That the parties who honestly bid off the property and consented to hold it discharged of the claim of the assignee, but for the benefit of all the lienholders, thereby cut themselves off from any benefit of these liens to make good a lien which had no priority over theirs. If this were done by mistake, in supposing that all the lienholders were represented or were consenting, the mistake should be rectified by restoring the parties to their rights as if no sale had been made. If Mrs. Murphy chooses to assert her lien and demand a new sale of the land, let her have it, but it must be subject to the rights of all parties as they stood before the other sale, which, by reason of her absence and her objection, is ineffectual to bar incumbrances, as it was intended to do.

So far as the doctrine of confusion of the Louisiana Code may be said to be the equivalent of the doctrine of merger, in the common law and in equity, in the latter it has been uniformly held that where an incumbrancer, by mortgage or otherwise, becomes the owner of the legal title or of the equity of redemption, the merger will not be held to take place if it be apparent that it was not the intention of the owner, or if in the absence of any intention said merger was against his manifest interest. Applying this just principle to the case before us, it is quite apparent that no merger can be sustained.

It is clearly proved that the property was purchased, as they supposed, at the time by all the lienholders, Mr. Archer acting for Mrs. Murphy, at a sum far below the amount due on the liens, and that no money was paid except the costs of sale, or intended to be paid, but that the property should be held, as it was before the sale, for the benefit of all these lienholders, in the proportion of their interest. This was carried into effect, not by a new sale to the insurance company, as is asserted, but by a conveyance under that sale, at the request of these lienholders, to that company, as trustee, for them all.

It was not, therefore, intended to extinguish their liens by this proceeding, but to keep them alive until the property should finally be sold and the money divided. So it is equally clear that it was not for the interest of these lienholders, who were actually purchasing, to extinguish their liens and thereby make Mrs. Murphy's notes a first lien, and enable her to get all her money at their expense. The rule on this subject is thus stated by Jones, Mortg. § 848: 'It is a general rule that when the legal title becomes united with the equitable, so that the owner has the whole title, the mortgage is merged by the unity of possession. But if the owner has an interest in keeping these titles distinct, or if their be an intervening right between the mortgage and the equity, there is no merger.' And, in the case of Forbes v. Moffatt, 18 Ves. 384, Sir WILLIAM GRANT says: 'The question is always upon the intentions, actual or presumed, of the person in whom the interests are united.' Other authorities cited by Mr. Jones sustain the principle. Clark v. Clark, 56 N. H. 105, is directly in point. Loud v. Lane, 8 Metc. (Mass.) 517; Armstrong v. McAlpin, 18 Ohio St. 184.

It is to be observed, in the present case, that, as the mortgage which secured the two notes owned by the insurance company was the same which secured Mrs. Murphy's notes, as between which there was no priority, it would hardly be held, on the order of the court to sell the property free from all incumbrances, that the purchase by the insurance company merged part of the mortgage, while part was kept alive. This is expressly decided in Barker v. Flood, 103 Mass. 474.

The result of these views is, that while Mrs. Murphy is not precluded by the judicial sale, under the order of the bankruptcy court, from foreclosing the mortgage for her notes, neither are the parties who took part in that proceeding barred of the right to set up their liens, as they existed before that sale, and share in the proceeds of the new sale accordingly; and, so far as the expenditures of the insurance company, in payment of taxes and prior liens and in improvements necessary to the prevention of loss and deterioration in the property, were required for the benefit of all the lienholders, it is to be first paid out of the proceeds of the sale, and plaintiff in error should account for rents and profits, if there were any. The decree of the supreme court of Louisiana is accordingly reversed, with directions to enter a decree in conformity to this opinion; and it is so ordered.


text: Talk:Factors' Traders' Insurance Company v. Murphy/Opinion of the Court


text:
Butchers' Union Slaughter-House Live-Stock Landing Company v. Crescent Slaughter-House Company

 B. R. Forman, for appellant.

''Thos. J. Semmes'', for appellee.

MILLER, J.


text: Talk:Butchers' Union Slaughter-House Live-Stock Landing Company v. Crescent Slaughter-House Company


text:
Butchers' Union Slaughter-House Live-Stock Landing Company v. Crescent Slaughter-House Company/Opinion of the Court

This is an appeal from the circuit court for the Eastern district of Louisiana. The appellee brought a suit in the circuit court to obtain an injunction against the appellant forbidding the latter from exercising the business of butchering, or receiving and landing live-stock intended for butchering, within certain limits in the parishes of Orleans, Jefferson, and St. Bernard, and obtained such injuction by a final decree in that court. He ground on which this suit was brought and sustained is that the plaintiffs had the exclusive right to have all such stock landed at their stock landing-place, and butchered at their slaughter-house, by virtue of an act of the general assembly of Louisiana, approved March 8, 1869, entitled 'An act to protect the health of the city of New Orleans, to locate the stock landing and slaughterhouses, and to incorporate the Crescent City Live-stock Landing & Slaughter-house Company.' An examination of that statute, especially of its fourth and fifth sections, leaves no doubt that it did grant such an exclusive right. The fact that it did so, and that this was conceded, was the basis of the contest in this court in the slaughter-house Cases, 16 Wall. 36, in which the law was assailed as a monopoly forbidden by the thirteenth and fourteenth amendments to the constitution of the United States, and these amendments, as well as the fifteenth, came for the first time before this court for construction. The constitutional power of the state be enact the statute was upheld by this court. This power was placed by the court in that case expressly on the ground that it was the exercise of the police power which had remained with the states in the formation of the original constitution of the United States, and had not been taken away by the amendments adopted since. Citing the definition of this power from Chancellor KENT, it declares that the statute in question came within it. 'Unwholesome trades, slaughter-houses, operations offensive to the senses, the deposit of powder, the application of steam-power to propel cars, the building with combustible materials, and the burial of the dead, may all (he says) be interdicted by law in the midst of dense masses of population, on the general and rational principle that every person ought so to use his property as not to injure his neighbors; and that private interests must be made subservient to the general interest of the community.' 2 Kent, Comm. 340; 16 Wall. 62. In this latter case it was added that 'the regulation of the place and manner of conducting the slaughtering of animals, and the business of butchering within a city, and the inspection of the animals to be killed for meat, and of the meat afterwards, are among the most necessary and frequent exercises of this power.'

But in the year 1879 the state of Louisiana adopted a new constitution, in which were the following articles:

'Art. 248. The police juries of the several parishes, and the constituted authorities of all incorporated municipalities of the state, shall alone have the power of regulating the slaughtering of cattle and other live-stock within their respective limits: Provided, no monopoly or exclusive privilege shall exist in this state, nor such business be restricted to the land or houses of any individual or corporation: provided, the ordinances designating places for slaughtering shall obtain the concurrent approval of the board of health or other sanitary organization.'

'Art. 258. * *  * The monopoly features in the charter of any corporation now existing in the state, save such as may be contained in the charters of railroad companies, are hereby abolished.'

Under the authority of these articles of the constitution the municipal authorities of the city of New Orleans enacted ordinances which opened to general competition the right to build slaughter-houses, establish stock landings, and engage in the business of butchering in that city under regulations established by those ordinances, but which were in utter disregard of the monopoly granted to the Crescent City Company, and which in effect repealed the exclusive grant made to that company by the act of 1869. The appellant here, the Butchers' Union Slaughter-house Company, availing themselves of this repeal, entered upon the business, or were about to do so, by establishing their slaughter-house and stock landing within the limits of the grant of the act of 1869 to the Crescent City Company. Both these corporations, organized under the laws of Louisiana and doing business in that state, were citizens of the same state, and could not, in respect of that citizenship, sue each other in a court of the United States. The Crescent City Company, however, on the allegation that these constitutional provisions of 1879, and the subsequent ordinances of the city, were a violation of their contract with the state under the act of 1869, brought this suit in the circuit court as arising under the constitution of the United States, art. 1, § 10. That court sustained the view of the plaintiff below, and held that the act of 1869, and the acceptance of it by the Crescent City Company, constituted a contract for the exclusive right mentioned in it for 25 years; that it was within the power of the legislature of Louisiana to make that contract, and as the constitutional provisions of 1879 and the subsequent ordinances of the city impaired its obligation, they were to that extent void. No one can examine the provisions of the act of 1869, with the knowledge that they were accepted by the Cresecent City Company, and so far acted on that a very large amount of money was expended in a vast slaughter-house, and an equally extensive stock-yard and landing-place, and hesitate to pronounce that in form they have all the elements of a contract on sufficient consideration. It admits of as little doubt that the ordinance of the city of New Orleans, under the new constitution, impaired the supposed obligation imposed by those provisions on the state, by taking away the exclusive right of the company granted to it for 25 years, which was to the company the most valuable thing supposed to be secured to it by the statutory contract. We do not think it necessary to spend time in demonstrating either of these propositions. We do not believe they will be controverted.

The appellant, however, insists that, so far as the act of 1869 partakes of the nature of an irrepealable contract, the legislature exceeded its authority, and it had no power to tie the hands of the legislature in the future from legislating on that subject without being bound by the terms of the statute then enacted. This proposition presents the real point in the case. Let us see clearly what it is. It does not deny the power of that legislature to create a corporation, with power to do the business of landing live-stock and providing a place for slaughtering them in the city. It does not deny the power to locate the place where this shall be done exclusively. It does not deny even the power to give an exclusive right, for the time being, to particular persons or to a corporation to provide this stock landing and to establish this slaughter-house. But it does deny the power of that legislature to continue this right so that no future legislature, nor even the same body, can repeal or modify it, or grant similar privileges to others. It concedes that such a law, so long as it remains on the statute-book as the latest expression of the legislative will, is a valid law, and must be obeyed, which is all that was decided by this court in the Slaughter-house Cases. But it asserts the right of the legislature to repeal such a statute, or to make a new one inconsistent with it, whenever, in the wisdom of such legislature, it is for the good of the public it should be done. Nor does this proposition contravene the established principle that the legislature of a state may make contracts on many subjects which will bind it, and will bind succeeding legislatures for the time the contract has to run, so that its provisions can neither be repealed nor its obligation impaired. The examples are numerous where this has been done and the contract upheld. The denial of this power, in the present instance, rests upon the ground that the power of the legislature intended to be suspended is one so indispensable to the public welfare that it cannot be bargained away by contract. It is that well-known but undefined power called the police power. We have not found a better definition of it for our present purpose than the extract from Kent's Commentaries in the earlier part of this opinion. 'The power to regulate unwholesame trades, slaughter-houses, operations offensive to the senses,' there mentioned, point unmistakably to the powers exercised by the act of 1869, and the ordinances of the city under the constitution of 1879. While we are not prepared to say that the legislature can make valid contracts on no subject embraced in the largest definition of the police power, we think that, in regard to two subjects so embraced, it cannot, by any contract, limit the exercise of those powers to the prejudice of the general welfare. These are the public health and public morals. The preservation of these is so necessary to the best interests of social organization, that a wise policy forbids the legislative body to divest itself of the power to enact laws for the preservation of health and the repression of crime.

It cannot be permitted that, when the constitution of a state, the fundamental law of the land, has imposed upon its legislature the duty of guarding, by suitable laws, the health of its citizens, especially in crowded cities, and the protection of their person and property by suppressing and preventing crime, that the power which enables it to perform this duty can be sold, bargained away, under any circumstances, as if it were a mere privilege which the legislator could dispose of at his pleasure. This principle has been asserted and repeated in this court in the last few years in no ambiguous terms. The first time it seems to have been distinctly and clearly presented was in the case of Boyd v. Alabama, 94 U.S. 646. That was a writ of error to the supreme court of Alabama, brought by Boyd, who had been convicted in the courts of that state of carrying on a lottery contrary to law. In his defense, he relied upon a statute which authorized lotteries for a specific purpose, under which he held a license. The repeal of this statute, which made his license of no avail against the general law forbidding lotteries, was asserted by his counsel to be void as impairing the obligation of the contract, of which his license was evidence, and the supreme court of Alabama had in a previous case held it to be a contract. In Boyd's Case, however, that court held the law under which his license was issued to be void, because the object of it was not expressed in the title as required by the constitution of the state. This court followed that decision, and affirmed the judgment on that ground. But in the concluding sentences of the opinion by Mr. Justice FIELD, the court, to repel the inference that the contract would have been irrepealable if the statute had conformed to the special requirement of the constitution, said: 'We are not prepared to admit that it is competent for one legislature, by any contract with an individual, to restrain the power of a subsequent legislature to legislate for t e public welfare, and to that end to suppress any and all practices tending to corrupt the public morals,' citing Moore v. State, 48 Miss. 147, and Metropolitan Board of Excise v. Barrie, 34 N. Y. 663. This cautionary declaration received the unanimous concurrence of the court, and a year later the principle became the foundation of the decision in the case of Beer Co. v. Massachusetts, 97 U.S. 28. In that case the plaintiff in error, the Boston Beer Company, had been chartered in 1828 with a right to manufacture beer, which this court held to imply the right to sell it. Subsequent statutes of a prohibitory character seemed to interfere with this right, and the case was brought to this court on the ground that they impaired the obligation of the contract of the charter. But the court, speaking by Justice BRADLEY, held that, on this subject, the legislature of Massachusetts could make no irrepealable contract. 'Whatever differences of opinion,' said the court, 'may exist as to the extent and boundaries of the police power, and however difficult it may be to render a satisfactory definition of it, there seems to be no doubt that it does extend to the protection of the lives, health, and property of the citizens, and to the preservation of good order and public morals. The legislature cannot by any contract divest itself of the power to provide for these objects. They belong emphatically to that class of objects which demand the application of the maxim, salus populi suprema lex, and they are to be attained and provided for by such appropriate means as the legislative discretion may devise. That discretion can no more be bargained away than the power itself.'

In the still more recent case of Stone v. Mississippi, 101 U.S. 814, the whole subject is reviewed in the opinion delivered by the chief justice. That also was a case of a chartered lottery, whose charter was repealed by a constitution of the state subsequently adopted. It came here for relief, relying on the clause of the federal constitution against impairing the obligation of contracts. 'The question is therefore presented, (says the opinion,) whether, in view of these facts, the legislature of a state can, by the charter of a lottery company, defeat the will of the people authoritatively expressed, in relation to the further continuance of such business in their midst. We think it cannot. No legislature can bargain away the public health or the public morals. The people themselves cannot do it, much less their servants. The supervision of both these subjects of governmental power is continuing in its nature, and they are to be dealt with as the special exigencies of the moment may require. Government is organized with a view to their preservation, and cannot divest itself of the power to provide for them. For this purpose the legislative discretion is allowed, and the discretion cannot be parted with any more than the power itself.'

But the case of the Fertilizing Co. v. Hyde Park, 97 U.S. 659, is, perhaps, more directly in point as regard the facts of the case, while asserting the same principle. The Fertilizing Company was chartered by the Illinois legislature for the purpose of converting, by chemical processes, the dead animal matter of the slaughter-houses of the city of Chicago into a fertilizing material. Some ordinances of the village of Hyde Park, through wich this dead matter was carried to their chemical works, were supposed to impair the rights of contract conferred by the charter. The opinion cites the language of the court in Beer Co. v. Massachusetts, supra, and numerous other cases, of the exercise of the police power in protecting health and property, and holds that the charter conferred no irrepealable right for the 50 years of its duration to continue a practice injurious to the public health.

These cases are cited, and their views adopted in the opinion of the supreme court of Louisiana, in a suit between the same parties, in regard to the same matter as the present case, and which was brought to this court by writ of error, and dismissed before a hearing by the present appellee.

The result of these considerations is that the constitution of 1879, and the ordinances of the city of New Orleans which are complained of, are not void as impairing the obligation of complainant's contract, and that the decree of the circuit court must be reversed, and the case remanded to that court, with directions to dismiss the bill.


text: Talk:Butchers' Union Slaughter-House Live-Stock Landing Company v. Crescent Slaughter-House Company/Opinion of the Court


text:
Hitz

B. F. Butler and O. D. Barrett, for petitioner.

R. Ross Perry and A. S. Worthington, for respondent.

WAITE, C. J.

title: Hitz


text: Talk:Hitz

title: Talk:Hitz


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Hitz/Opinion of the Court

This is an application by Mr. John Hitz for a writ of certiorari, commanding the supreme court of the district of Columbia to certify to this court an indictment and the proceedings thereunder against him in that court, on the ground that when the indictment was filed, and when the offenses therein charged were committed, he was the diplomatic representative of the Swiss Confederation, duly accredited to and received and recognized by the United States, under the title of political agent. The indictment was filed on the seventeenth of June, 1881.

From the return which has been made to the rule to show cause it appears that the indictment is for an offense against the provisions of section 5209 of the Revised Statutes, alleged to have been committed by Mr. Hitz while and as president of the German-American National Bank of Washington. It also appears that he was for many years the consul general of the Swiss Confedation within the United States, and that on the twenty-eighth of February, 1868, he was accredited to the United States by the same government as political agent. On the thirtieth of May, 1881, he was requested by the Swiss Confederation to resign both these offices, and this he did on the fifteenth of June. On the twentieth of June his resignations were accepted. Precisely what the relations of Mr. Hitz to the United States were as political agent of the Swiss Confederation we have not been advised, and on application to the department of state, made on the suggestion of the court by the counsel in this proceeding, we are informed that the records of the department show nothing upon this subject except a letter from him under date of March 30, 1868, inclosing his letter of credence, and soliciting an interview with the secretary of state for its formal presentation; the answer of Secretary Seward according such an interview, and fixing the second of April as the time; and a letter from Secretary Fish to Mr. Hitz, under date of June 28, 1870, informing him that he (the secretary) did not find, in his relations to the United States, any ground for continuing the privilege to him of a free entry of goods imported for his use.

Under these circumstances, as the writ of certiorari, when applied for by a defendant, is not a writ of right, but discretionary with the court, (Bac. Abr. 'Certiorari,') A,) we deny this application, leaving the parties to such remedies as they may be entitled to elsewhere, or under any other form of proceeding.

title: Hitz/Opinion of the Court


text: Talk:Hitz/Opinion of the Court

title: Talk:Hitz/Opinion of the Court


text:
City and County of San Francisco v. Scott

Harry I. Thornton, for plaintiff in error.

Sidney V. Smith, Jr., for defendant in error.

WAITE, C. J.


text: Talk:City and County of San Francisco v. Scott


text:
City and County of San Francisco v. Scott/Opinion of the Court

There is no federal question in this case. The right of San Francisco under the treaty of Guadalupe Hidalgo to the lands in dispute as pueblo lands is not denied. Precisely what that right was may not be easy to state. Mr. Justice FIELD, speaking for the court, said, in Townsend v. Greely, 5 Wall. 336: 'It was not an indefeasible estate; ownership of the lands in the pueblos could not in strictness be affirmed. It amounted in truth to little more than a restricted and qualified right to alienate portions of the land to its inhabitants for building or cultivation, and to use the remainder for commons, for pasture lands, or as a source of revenue, or for other purposes. This right of disposition and use was, in all particulars, subject to the control of the government of the country.' This definition was accepted as substantially accurate in Grisar v. McDowell, 6 Wall. 372, and Palmer v. Lowe, 98 U.S. 16.

The act of July 1, 1864, c. 194, § 5, (13 St. 333,) simply released to the city all the right and title of the United States in the lands, (Hoadley v. San Francisco, 94 U.S. 5), and thus perfected the incomplete Mexican title for the uses and purposes specified. Palmer v. Lowe, supra. Its effect was to surrender all future control of the United States over the disposition and use of the property by the city.

The only controversy in this case is as to the effect of the alcalde grant of the pueblo title; and the precise question submitted to the supreme court of the state for determination was, 'whether, after the conquest * *  * and before the incorporation of the city of San Francisco, and before the adoption of the constitution of the state of California, a person exercising the functions of an alcalde of the pueblo of San Francisco *  *  * could make a valid grant of pueblo lands, as such officers had been before such conquest accustomed to do,' and, if so, what would be the effect of such a grant? This does not depend on any legislation of congress, or on the terms of the treaty, but on the effect of the conquest upon the powers of local government in the pueblo under the Mexican laws. That is a question of general public law, as to which the decisions of the state court are not reviewable here. This has been many times decided. Delmas v. ''Ins. Co.'' 14 Wall. 661; Tarver v. Keach, 15 Wall. 68; ''New York Life Ins. Co. v. Hendren, 92 U.S. 286; Dugger v. Bocock, 104 U.S. 596; Allen v. McVeigh'', 107 U.S. 433; S.C.. 2 SUP. CT. REP. 558.

It follows that we have no jurisdiction, and the writ of error is dismissed.


text: Talk:City and County of San Francisco v. Scott/Opinion of the Court


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Edrington v. Jefferson

U. M. Rose and A. H. Garland, for appellant.

D. E. Myers and ''Wm. M. Sneed'', for appellee.

WAITE, C. J.

title: Edrington v. Jefferson


text: Talk:Edrington v. Jefferson

title: Talk:Edrington v. Jefferson


text:
Edrington v. Jefferson/Opinion of the Court

In the view we take of this case, it is only necessary to consider the following facts:

James H. Edrington and J. T. Jefferson were partners in business at Memphis, Tennessee. Upon the dissolution of the firm, on or about the nineteenth of March, 1874, Edrington and his wife, who is the appellant in this case, conveyed certain lands in Arkansas, known as the Whitmore and Fain plantations, to John W. Jefferson, a brother of J. T. Jefferson, in trust to secure the payment of 14 notes, amounting in the aggregate to $28,754.21, executed by James H. Edrington to the trustee for the benefit of some of the creditors of the firm whose names were set out in a schedule attached. By the terms of the trust, the trustee was empowered to advertise and sell the property, if default should be made in the payment of the notes. James H. Edrington died on the twelfth of August, 1874, having made a will by which he devised his property to his widow for certain purposes, and appointed her the executrix. The will was admitted to probate, and letters testamentary granted to Mrs. Edrington on the thirty-first of August.

On the second of December, 1874, John W. Jefferson, the trustee, advertised the trust property for sale on the twenty-first of January, 1875, for default in the payment of the notes. On the eleventh of December, Mrs. Edrington, in her own right and as executrix, began this suit in the circuit court of Mississippi county, Arkansas, against John W. Jefferson, the trustee, John Matthews, George W. L. Crook, and Emily R. Hazard and John Hazard, administrators of James H. Hazard, deceased, to enjoin the sale and obtain a settlement of the partnership accounts, the allegations being, among others, that the deed of trust was procured by the fraud of J. T. Jefferson when James H. Edrington was sick and incapable of transacting business, and that in equity J. T. Jefferson should pay the debts secured thereby. Matthews, and the representatives of James H. Hazard, were made parties as the holders of prior incumbrances on the trust property. Among other allegations in the bill was one to the effect that the trustee advertised the sale at the instigation of J. T. Jefferson rather than of the creditors who were the beneficiaries under the trust. On the filing of the bill, a preliminary injunction was granted and served on the trustee.

No summons was issued or served on any of the defendants, but on the first of March, 1875, John W. Jefferson and J. T. Jefferson both appeared and filed separate answers to the complaint, in which they met all the charges in the bill, and, among other things, alleged that the prior incumbrances had been paid. Each answer concluded with a prayer in the usual form that the respondent be dismissed, with his costs. On the third of March the defendant John Matthews was appointed receiver of the property. At the same time the bill was dismissed as to Crook; and the Washington Fire & Marine Insurance Company, the Planters' Insurance Company, J. C. Ward & Co., Appleton, Noyes & Co., and the North America Tie Company, creditors of Edrington & Jefferson, and beneficiaries under the trust, were, on motion, admitted as defendants in the suit, and given 20 days to file their answers and cross-bills. On the fourth of March, 1875, the cause was continued by consent of parties until the next term. At the September term, 1875, F. Banksmith & Co. and Taylor Bros., other creditors and beneficiaries, were admitted as defendants, and they, with the other creditors who had been admitted before, were allowed 90 days to answer and file cross-bills. Several orders connected with the administration of the cause were passed at this term on motion of the different parties. It does not appear from the record that the original complaint was ever amendel so as to name the intervening creditors as defendants, or to make any charges against them, other than such as were contained in the complaint when the answers of the original defendants, the Jeffersons, were filed. On the twenty-sixth of February, 1876, in vacation, the Washington Fire & Marine Insurance Company, and the other creditors who had been formally admitted as defendants, with some other creditors, also beneficiaries under the trust, filed an answer to the original complaint and a cross-bill. To the cross-bill all the defendants in the original bill, except Crook, were made defendants, and also the infant children of James H. Edrington, and all the creditors of Edrington & Jefferson, beneficiaries under the trust, who were not complainants. The prayer was that the claims of the alleged prior incumbrancers might be discharged or made subordinate to the trust; that the amount due the several credito § might be ascertained; and that the property might be sold to pay what was found due.

Answers were filed to the cross-bill by some of the persons named as defendants, and at the May term of the court, after several orders of administration, the cause was continued. After this continuance, and in vacation, other answers were filed to the cross-bill. Testimony was taken and filed at the November term. On the fifteenth of November, 1876, the complainants in the cross-bill dismissed their bill as to all the defendants therein named, except Mrs. Edrington, her children, and the several alleged prior incumbrancers, and thereupon, on the sixteenth of November, John W. Jefferson, J. T. Jefferson, and the several creditors who had answered the original complaint, filed their petition for the removal of the cause to the circuit court of the United States for the Western district of Arkansas. In their petition they set forth the citizenship of the parties as in different states, and 'that said suit cannot and could not be tried at the present term of this court, as the same is not ready for trial or in a condition to be tried.' It is also stated that 'in said suit there is a controversy wholly between petitioners and the said Nancy A. Edrington, individually and as said executrix, John Matthews, and the children and heirs of James H. Edrington, deceased, which can be fully determined as between them without the presence of the other parties.'

The cause was docketed in the district court for the Eastern district of Arkansas on the ninth of March, 1877, and, on the thirteenth of March, Mrs. Edrington moved to remand the case on the ground, among others, that the petition for removal was not filed on or before the first term at which the cause could have been tried. On the tenth of October, 1877, additional grounds for remanding were presented, but, on the eleventh of October, the motion was denied.

At the October term, 1879, a decree was entered dismissing the original bill of Mrs. Edrington and finding that all the incumbrances upon the property prior to the trust deed had been fully paid and discharged. The decree then found the amount due on the trust notes, for principal and interest, and ordered a sale of the trust property, free of all alleged prior incumbrances, to pay what was due. Under this decree a sale was made and confirmed by the court at the March term, 1880.

From the decree of the October term, 1879, Mrs. Edrington took this appeal, and, among other things, assigns for error the refusal of the court to remand the cause upon her motion.

We are of opinion that the petition for removal was filed too late, and that the motion to remand should have been granted. As Mrs. Edrington was kept in the district court, and forced to a hearing there, she has the right, having saved her point on the record, to have that error corrected here after final decree below. Removal Cases, 100 U.S. 475; Railroad Co. v. Koontz, 104 U.S. 16. By the laws of Arkansas there were two terms of the state circuit court during the year 1875, one beginning on the first Monday in March, and the other on the first Monday in September. There were also two terms in 1876, one in May and the other in November. All the contesting defendants to the original complaint filed answers and ended the pleadings, so far as they were concerned, on the first of March, 1875. As these answers contained no counter-claim or set-off, the issues were complete between the original parties at that time, and the plaintiff or the defendants could either of them demand a trial at the next term, which was in November, 1875. When these answers were filed, John W. Jefferson, the trustee, represented all the creditors who were beneficiaries under the trust. His pleading was in law their pleading, and bound them as well as him. Some of the creditors were admitted as defendants, not because they were necessary parties to the suit, but that they might be present to protect their own intere ts if necessary. To let them in, no amendment of the complaint was needed, because the original allegations against their trustee were in reality allegations against them. They were given 20 days' time to answer for themselves and to file a cross-bill. They failed to avail themselves of this rule, and consequently were in default at the next term. The case, therefore, stood for trial at the next term with issues joined between the plaintiff and the representative of the creditors on the record. As far as the trustee was concerned, that was the last term at which he could ask for a removal, whether the pleadings were amended and new issues raised or not. The case stood for trial on its merits, with pleadings completed. Some of the creditors who were beneficiaries had already appeared. Others were admitted at that term. They made no complaint of the conduct of their representative upon the record. His pleadings were their pleadings, and the issues which he had presented for trial were their issues. The trustee did not see fit to take steps at that time for a removal; neither did they. When the term ended, the term at which the cause, as a cause, could be first tried had passed by, and all right of removal under the act of March 3, 1875, then in force, was gone. It is true that the creditors got leave to file pleadings within 90 days, and that their answers and cross-bills were in before that time expired, but this operated only as an amendment of the original pleadings, and created no new right of removal. As was said in Babbitt v. Clark, 103 U.S. 612, 'the act of congress does not provide for the removal of a cause at the first term at which a trial can be had on the issues as finally made up by leave of court or otherwise, but at the first term at which the cause, as a cause, could be tried.'

Without considering any of the other questions presented by the record, we reverse the decree, and remand the cause to the district court, with instructions to send the case back to the state court, from which it was improperly removed.


text: Talk:Edrington v. Jefferson/Opinion of the Court


text:
Greenhood v. Randall

Edwin W. Toole, for plaintiff in error.

S. Shellabarger and J. M. Wilson, for defendant in error.

WAITE, C. J.

title: Greenhood v. Randall


text: Talk:Greenhood v. Randall

title: Talk:Greenhood v. Randall


text:
Greenhood v. Randall/Opinion of the Court

This judgment is affirmed. The record fails entirely to present in proper form any of the questions which have been argued for the plaintiff in error. Affirmed.


text:
USAMGIK Ordinance 38

HEADQUARTERS

UNITED STATES ARMY FORCES IN KOREA

Office of the Military Governor

Seoul, Korea

ORDINANCE NUMBER 38 27 November 1945

 * BY DIRECTION OF THE COMMANDING GENERAL

 * UNITED STATES ARMY FORCES IN KOREA

A. V. ARNOLD

Major General, United States Army

Military Governor of Korea.

군정법령 제38호

title: USAMGIK Ordinance 38


text: Talk:Greenhood v. Randall/Opinion of the Court


text:
Burnham v. Bowen

John W. Cary, for appellants.

James Hagerman, D. B. Henderson, and F. B. Daniels, for appellee.

WAITE, C. J.

title: Burnham v. Bowen


text: Talk:Burnham v. Bowen

title: Talk:Burnham v. Bowen


text:
Burnham v. Bowen/Opinion of the Court

The facts presented by this appeal are as follows:

On the first of June, 1871, the Chicago, Dubuque & Minnesota Railroad Company executed a trust deed, in the nature of a mortgage, conveying all its railroad property and 'all the revenues and income' thereof to John A. Burnham, Stephen V. R. Thayer, and James H. Blake, trustees, to secure an issue of bonds amounting in the aggregate to $4,125,000. No interest was paid on these bonds, but the company remained in peaceable possession and operated its road until the early part of the year 1875, when the trustees commenced a suit for the foreclosure of the mortgage in the circuit court of Dubuque county, Iowa, and had a receiver appointed. In the order appointing the receiver no special provision was made for the payment of d bts owing for current expenses. The receiver took possession on the thirteenth of January, and from that time operated the road under the direction of the court. When the receiver took possession the company was indebted to the Northern Illinois Coal & Iron Company for coal used in running the locomotives. In the agreed facts, upon which the case was heard below, it is stated that the coal was furnished during the year 1874, but the precise time in the year is not given. From what does appear, however, we are satisfied that at the time of the appointment of the receiver, this was one of the current debts for operating expenses made in the ordinary course of a continuing business, to be paid out of current earnings, and that the payment would have been made at the time agreed on if the company had remained in possession. The renewed acceptances, given after the receiver was appointed, indicate that the originals were for different amounts, maturing a month apart, thus implying monthly settlements of monthly accounts, with a somewhat extended credit to meet the business requirements of what may have been, and probably was at the time, an embarrassed railroad company.

On the fifth of January, 1876, E. H. Bowen, who was then the holder of the acceptances, presented a petition to the state court for the allowance and payment of his claim out of the funds in the receiver's hands. The claim was allowed, but in connection with the allowance the following entry was made: 'This allowance not intended to allow or establish any lien, but simply to allow them [the acceptances] to be presented and determined as to their rights of payment on final hearing.' After this was done the cause was removed to the circuit court of the United States for the district of Iowa, and docketed there on the eleventh of January. The receiver appointed by the state court continued in possession and operated the road until June 23, 1876, when another was put in his place. The net earnings of the road while in the hands of the receivers amounted to more than $25,000.

In 1871 the company purchased lands in Dubuque for its depot and offices, and secured the purchase money by a mortgage on the property. This debt being unpaid, a suit for the foreclosure of the mortgage was begun, which resulted in a decree of sale on the fifth of June, 1876, to pay the amount due, being $7,898. By order of the circuit court of the United States this amount was paid from the earnings of the receivership in monthly installments, beginning on the fifth of June and ending on the fourth of September, 1876. In addition to this, $14,897.94 was paid on a judgment rendered against the company January 8, 1875, for the right of way over certain property in Brownsville. Of this amount, $5,000 was paid June 28, and the remainder, November 1, 1876. Other judgments for rights of way, amounting in the aggregate to $3,020.55, were paid, some in 1875, and others in 1876. On the twenty-eighth of October, 1876, a decree was entered in the suit for the foreclosure of the trust mortgage, finding due upon the bonds $5,980,166, and barring the redemption if payment of this amount was not made in 90 days. It was also further ordered that the trustees have immediate possession of the mortgaged property from the date of the decree and of the net income from the commencement of the suit. The decree also contained this provision: 'It is further decreed that this cause, with all the matters in controversy between the plaintiffs and all and any of the defendants and intervenors and claimants, is continued until the next term of this court, and such rights and claims and matters in controversy are in nowise affected or determined by this decree.' Default was made in the payment of the mortgage debt, and the property was put into the possession of the trustees by the receivers under the decree of strict foreclosure. Among the property which went into the hands of the trustees under this decree were the depot and offices in Dubuq e, which had been relieved of incumbrance by the payments from the income of the receivership, and the several rights of way also paid for from the same fund.

The original petition of intervention filed in the cause by Bowen, the appellee, for the payment of his acceptances for coal, from the files, and on the eighteenth of October, 1878, on leave of the court, another was substituted in its place, asking that a judgment might be rendered in his favor against the railroad company for the payment of the amount due, 'and that such judgment be declared a lien on the property and road of said company in the hands of said trustees and their grantees.' On the thirtieth of October, 1880, a decree was entered finding due Bowen, on his claim, as of that date, the sum of $6,515.42, and declaring that the mortgaged property in the hands of the trustees under the decree of foreclosure was equitably bound for the payment thereof, 'said property having passed to said trustees, subject to the rights and equities of said Bowen, intervenor, and said trustees, and all parties holding under them, taking said property subject to such rights and equities on part of said Bowen, intervenor.' Provision was then made for a sale of the property if the claim was not paid. From this decree the trustees appealed.

In our opinion the view which the circuit court took of this case was the correct one. The company had never paid its bonded interest. From the very beginning it was in default in this particular, yet the mortgage trustees suffered it to keep possession and manage the property. The maintenance of the road and the prosecution of its business were essential to the preservation of the security of the bondholders. The business of every railroad company is necessarily done more or less on credit, all parties understanding that current expenses are to be paid out of current earnings. Consequently it almost always happens that the current income is incumbered to a greater or less extent with current debts made in the prosecution of the business out of which the income is derived.

As was said in Fosdick v. Schall, 99 U.S. 252, 'the income [of a railroad company] out of which the mortgagee is to be paid is the net income obtained by deducting from the gross earnings what is required for necessary operating and managing expenses, proper equipment, and useful improvements. Every railroad mortgagee in accepting his security impliedly agrees that the current debts made in the ordinary course of business shall be paid from the current receipts before he has any claim on the income.' Such being the case, when a court of chancery, in enforcing the rights of mortgage creditors, takes possession of a mortgaged railroad, and thus deprives the company of the power of receiving any further earnings, it ought to do what the company would have been bound to do if it had remained in possession; that is to say, pay out of what it receives from earnings all the debts which in equity and good conscience, considering the character of the business, are chargeable upon such earnings. In other words, what may properly be termed the debts of the income should be paid from the income, before it is applied in any way to the use of the mortgagees. The business of a railroad should be treated by a court of equity, under such circumstances, as a 'going concern,' not to be embarrassed by any unnecessary interference with the relations of those who are engaged in or affected by it.

In the present case, as we have seen, the debt of Bowen was for current expenses and payable out of current earnings. It does not appear from anything in the case that there was any other liability on account of current expenses unprovided for when the receiver took possession, and there is nothing whatever to indicate that this debt would not have been paid at maturity from the earnings, if the court had not interfered at the instance of the trustees for the protection of the mortgage creditors.

It is said, owever, that as no part of the income, before the appointment of the receiver, was used to pay mortgage interest, or to put permanent improvements on the property, or to increase the equipment, there was no such diversion of the funds belonging in equity to the labor and supply creditors as to make it proper to use the income of the receivership to pay them. The debt due Bowen was incurred to keep the road running, and thus preserve the security of the bond creditors. If the trustees had taken possession under the mortgage, they would have been subjected to similar expenses to do what the company, with their consent and approbation, was doing for them. There is nothing to show that the receiver was appointed because of any misappropriation of the earnings by the company. On the contrary, it is probable, from the fact that the large judgment for the right of way was obtained about the same time the receiver was appointed, that the change of possession was effected to avoid anticipated embarrassments from that cause. But, however that may be, there certainly is no complaint of diversion by the company of the current earnings from the payment of the current expenses. So far as anything appears on the record, the failure of the company to pay the debt to Bowen was due alone to the fact that the expenses of running the road and preserving the security of the bondholders were greater than the receipts from the business. Under these circumstances, we think the debt was a charge in equity on the continuing income, as well that which came into the hands of the court after the receiver was appointed as that before. When, therefore, the court took the earnings of the receivership and applied them to the payment of the fixed charges on the railroad structures, thus increasing the security of the bondholders at the expense of the labor and supply creditors, there was such a diversion of what is denominated in Fosdick v. Schall the 'current debt fund,' as to make it proper to require the mortgagees to pay it back. So far as current-expense creditors are concerned, the court should use the income of the receivership in the way the company would have been bound in equity and good conscience to use it if no change in the possession had been made. This rule is in strict accordance with the decision in Fosdick v. Schall, which we see no reason to modify in any particular.

But it is further insisted that, even though the court did err in using the income of the receivership to pay the fixed prior charges on the mortgaged property, and thus increase the security of the bondholders, there is no power now to order a sale of the property in the hands of the trustees to pay back what has thus been diverted. In Fosdick v. Schall, p. 254, it was said that if in a decree of foreclosure a sale is ordered to pay the mortgage debt, provision may be made for a restoration from the proceeds of the sale of the fund which has been diverted, and this clearly because, in equity, the diversion created a charge on the property for whose benefit it had been made. Here the parties interested preferred a decree of strict foreclosure, which the court gave, but in giving it saved the rights of all intervenors, and continued the case for the final determination of all such questions. The present appeal is from a decree which grew out of this reservation. As the diversion of the fund created in equity a charge on the property as security for its restoration, it is clear that if the mortgagees prefer to take the property under a decree of strict foreclosure, they take it subject to the charge in favor of the current-debt creditor whose money they have got, and that he can insist on a sale of the property for his benefit if they fail to make the payment without. The agreed facts show that $9,897.94 of the income of the receivership was paid on the judgment for the right of way, November 1, 1876, which was after the decree of strict foreclosure was entered.

Lastly, it is claimed that the appellee is barred by his laches, and because he is the assignee of the original creditor. It was decided in Union Trust Co. v. Walker, 107 U.S. 596, S.C.. 2 Sup. CT. REP. 299, that the assignment of a claim of this kind carried with it the right of the original holder to claim payment out of the fund upon which it is charged. When the receiver was appointed the debt was evidenced by business paper maturing at a future date. It was no waiver of any claim on the fund which might come into the hands of the receiver to renew the paper at maturity for the convenience of the holder. It was undoubtedly given originally to enable the coal company to use it as commercial paper if occasion required, and the renewal may have become desirable on account of the use which had been made of it. The original petition of intervention was not filed until January 5, 1876, but it was before any application of the income of the receivership for the special benefit of the mortgagees, and before the decree of foreclosure was passed, and the rights of the intervenor were saved by that decree. The petition was pending from the time it was filed. The loss of the original petition did not abate the suit. The substitution of the new petition for the old was nothing else, in effect, than a restoration of the lost paper to the files.

We do not now hold, any more than we did in Fosdick v. Schall, or Huidekoper v. Locomotive Works, 99 U.S. 260, that the income of a railroad in the hands of a receiver, for the benefit of mortgage creditors who have a lien upon it under their mortgage, can be taken away from them and used to pay the general creditors of the road. All we then decided, and all we now decide, is that if current earnings are used for the benefit of mortgage creditors before current expenses are paid, the mortgage security is chargeable in equity with the restoration of the fund which has been thus improperly applied to their use.

The decree of the circuit court is affirmed.

title: Burnham v. Bowen/Opinion of the Court


text: Talk:Burnham v. Bowen/Opinion of the Court


text:
United States White v. Knox

S. V. White, for plaintiff in error.

''Nath. Wilson'' for defendant in error.

WAITE, C. J.

title: United States White v. Knox


text: Talk:United States White v. Knox

title: Talk:United States White v. Knox