text:
Carlton v. Bokee/Opinion of the Court

The lamp, as patented to Reichmann, was one of a large number of attempts made about the time to utilize petroleum and its various products for purposes of illumination. The old lamps adapted to sperm oil, lard, and other gross and sluggish oils were unfitted for the use of so volatile and dangerous a substance. In them the flame was set close to the lamp, and the tube holding the wick was projected downward into the oil, so that the heat of the flame might be communicated thereto in order to render it more fluid and susceptible to the capillary attraction of the wick. Such an arrangement as this with petroleum would have produced a

speedy explosion. This article required that the flame should be elevated as far as possible above the lamp and that the metallic wick tube should not communicate any heat to the fluid. This was one object to be attained in the burners required for the use of the new illuminator. Another was some contrivance for concentrating a current of air upon the flame itself, so as to consume as perfectly as possible all the rapidly escaping volatile gases, both as a saving of light and as a preventive of the disagreeable odors-which they would otherwise diffuse.

Reichmann's burner, illustrated in Figure 1, was intended to accomplish these main objects as well as some subsidiary ones, which will hereafter appear. It consisted of several distinct parts, combined and arranged in a particular manner. First, a flat wick-tube (indicated in the figure by the letter c) attached to the cap or stopper of the lamp, and rising above the same one or two inches, more or less, according to the size of the burner, but not projecting into the lamp below. Secondly, ratchet-wheels attached to the side of the wick-tube on a small shaft (g), for raising and lowering the wick. Thirdly, a slide or sleeve (i) fitted to slip up and down over the wick-tube, and sufficiently tight to stay in any position thereon, and furnished with arms (o, ), two or more, for supporting above the wick-tube a dome or deflector (m''). Fourthly, the dome aforesaid, having an oval or oblong slot for the flame to pass through, so that part of the flame might be above the dome and part below it. The object of this dome was to collect and concentrate the air upon the flame, in order to make it burn more brightly and consume they hydro-carbon and other gases which emanated from the petroleum. It also acted as a deflector of the light proceeding from the lower part of the flame, whereby it was thrown downward towards and around the lamp, whereas the light from that part of the flame above the dome was all thrown upward or horizontally about the room. Fifthly, around the periphery of the dome several narrow slips of the metal (k) were turned up, to act as arms or supports to the glass chimney of the lamp, and between these arms spaces were cut out of the edge of the dome, to allow air to pass up between the dome and chimney for the purpose of guiding the flame and feeding it with additional oxygen. Sixthly, the chimney itself (p), which was placed inside of and upon the said arms or supports, and held in its position thereby.''

This was the combination of elements of which Reichmann's burner consisted, and it will be perceived that the chimney was so elevated that the flame of the lamp below the dome was exposed on every side, and a current of air or a rapid movement of the lamp would extinguish it. This was the great defect of the burner, which prevented its introduction into general use, and rendered it of little value. The principal advantage which Reichmann in his patent claimed for it was that it allowed the light from the under side of the deflector to be reflected or thrown downward upon the table or lamp. This was effected by the use of upright, slender arms to support the dome, so that the space around and underneath the dome was left open and uninclosed. He also claimed some less important advantages in his arrangement of the ratchet-wheels for raising the wick, and one or two other things of no importance in this controversy.

The patent had but one claim and that amounted to the general combination of elements referred to and their peculiar arrangement. It was in these words:

'What I claim as new and desire to secure by letters-patent is, in combination with the lamp, the slotted, open, bell-shaped cap (i. e., the dome) when so constructed, arranged, and operating as to allow light to be deflected downwards, substantially in the manner and for the purpose herein set forth and explained.'

In order to understand how narrow this claim really was, it is necessary to know a little of the history of the art. Two well-known burners are conceded to have been in use before Reichmann's invention, which have a material bearing on his claims; the Vienna burner and Stuber's burner. These have been exhibited to us.

The Vienna burner, shown in Figure 2, contained the flat wick-tube, the ratchet-wheel attached thereto (but covered and not exposed as in Reichmann's), and a slotted dome above the wick for the flame to pass through, and a chimney; but the dome was not supported by slender arms, as in Reichmann's, but was connected with a gallery, which supported the chimney and surrounded the wick-tube and dome, and rested on the lamp or cap below, so that all the light of the flame below the dome was inclosed and lost and could not issue out as in Reichmann's burner. The drawing shows the dome (a), the surrounding gallery (b), and the lower part of the wick-tube (c).

The Stuber burner, invented by John Stuber in 1856, and made in considerable quantities in that and the following years at Utica, New York (shown in Figure 3), was an improvement on the Vienna burner, in this, that the gallery was so low as to leave a considerable open space under the dome for the reflected light to pass out in a downward direction, and the dome was supported by slender arms (d), but these arms were attached to the gallery and not to a sleeve fitted on to the wick-tube. It differed, therefore, from Reichmann's in these respects: the chimney was supported on a low gallery instead of the dome itself, and the dome was supported by arms (d) attached to this gallery instead of arms attached to a sleeve on the wick-tube. Therefore, with these burners before us, all the invention we can discover in Reichmann's burner is the peculiar mode of supporting his dome by slender arms attached to a sleeve fitted on to the wick-tube, and the elevation of the chimney on the outer edge of the dome. The latter peculiarity, as we have seen, is a defect which rendered the burner nearly useless.

The lamp made and sold by the defendants is substantially exhibited (in a section view) in Figure 5, which was patented to L. J. Atwood, October 13th, 1863. The dome and chimney are lifted from their place on the cap of the lamp to show the parts.

The allegation of the complainants that the defendant uses Reichmann's invention of peripheral springs (m) around the edge of the dome (h) for steadying his chimney we regard as fallacious. The transformation by a mere trick of words and vague generalities of the arms or supports used by Reichmann to sustain his chimney into peripheral springs may be ingenious, but it cannot stand the test of sober consideration. It is not pretended that Reichmann produced anything more than the arms or supports shown in his original patent, marked k in Figure 1. These were mere slips of metal turned up around the edge of the dome, such as had been in common use for a great period of time. All that Reichmann did new in this regard was to elevate his chimney on the top of the dome. This, in fact, rendered his lamp in the main useless, and the defendant does not copy it, but slips his chimney down around the dome and places it on a platform perforated with holes, which rests upon the cap of the lamp and answers to the bottom or floor of Stuber's gallery. He thus surrounds the flame with the chimney below as well as above the dome and prevents it from being extinguished by drafts of air without obstructing the issue of the light from below the dome. In this respect his lamp is more like Stuber's than Reichmann's. It is true that he keeps his chimney from coming in contact with the dome by surrounding the latter with a fine spiral spring or metallic fringe (m), but this has no resemblance or analogy to the supporting arms appended by Reichmann to his dome.

The question whether the defendant's burner, which is called the Comet, contains the other peculiarity of Reichmann's burner, namely, the supporting of the dome by slender arms attached directly to a sleeve fitted snugly upon the wick-tube, admits of more discussion. The dome was supported by slender arms both in Stuber's and Reichmann's lamps, but in the former the arms were attached to the surrounding gallery on which the chimney rested, and which was slipped over a raised portion of the base (f) to which the wick-tube was affixed and there held in place by a bayonet fastening, whilst in Reichmann's burner the arms were attached to a sleeve, fitted directly upon the wick-tube so snugly as to support the dome and chimney firmly and steadily, as before described. Now, in the Comet burner of the defendant, the arms supporting the dome (k), Figure 5, are attached to the platform before mentioned, which answers the place of the gallery floor in Stuber's burner, and the central portion of which is perforated with an opening or slot (i) so as to pass down over the wick-tube when being placed on the lamp; around this slot or opening the platform is raised next to the wick-tube in a conical form (g), so that the top edge of the raised part touches the wick-tube, and thus helps to give steadiness to the dome and chimney. The arms are attached to this raised part. But this raised portion of the platform is very far from being Reichmann's sleeve,

which was a peculiar characteristic in his lamp, and the sleeve arrangement was all that Reichmann pretended to have produced. Its generalization in the reissued patent is simply effected by a dexterous use of words and vague generalities. We are constrained to hold, therefore, that the Comet burner is not an infringement of Reichmann's original patent or of the invention which is exhibited in his original specification.

It is proper next to inquire as to the bearing of the reissued patent on the question in litigation between the parties. The defences made by the defendant against this reissue are, first, that it was obtained illegally, wrongfully, and by false pretences, and because it seeks to claim things of which Reichmann was not the original and first inventor; secondly, that the original patent itself was void, because the only thing in it which Reichmann had any pretence of inventing was anticipated by a man by the name of Michael Collins, as early as 1843.

The specification of the reissued patent describes the burner of Reichmann substantially as was done in the original patent, being interspersed, however, with observations as to the uses and objects of particular parts, evidently borrowed from subsequent experience and events. The single claim of the original patent is expanded into seven distinct claims. The first three of these claims, taken with the qualifications which they contain, and limited as they must be by the state of the art at the time when the original patent was applied for, amount to precisely the same thing and to no more than the one claim of the original patent. The first is for a combination of only two elements, it is true, the flat wick-tube and the dome, which combination is found in both the Vienna and Stuber burners; but a qualification is added, that the combination is to be 'under the arrangement substantially as shown and described, so that, while directly connected with each other, the said parts shall allow light to pass out or be reflected from between them, as set forth.' Thus it is made essential to the invention here claimed, not only that the two elements named should be present, but that they should have the arrangement described in the patent, and should have a direct connection with each other, and that the light should be reflected from between them. All these things exist in the Stuber burner except one. In that burner the wick-tube and the dome are not directly connected together. The dome is first connected with the gallery and the gallery with the wick-tube. So that the claim is reduced to the same thing which was calimed in the original patent. The same may be said of the second and third claims. If they mean anything more than the claim in the original patent they are void. Being identical with that they are needlessly multiplied, and by exhibiting a seeming of claims to which Reichmann was not entitled they are callculated to confuse and mislead. We think it proper to reiterate our disapprobation of these ingenious attempts to expand a simple invention of a distinct device into an all-embracing claim, calculated by its wide generalizations and ambiguous language to discourage further invention in the same department of industry and to cover antecedent inventions. Without deciding that a repetition of substantially the same claim in different words will vitiate a patent, we hold that where a specification by ambiguity and a needless multiplication of nebulous claims is calculated to deceive and mislead the public, the patent is void.

The fourth claim was clearly anticipated by the burner of Stuber. It is in the following words:

'A lamp-burner composed of two groups of elements, the first consisting of the base with its wick-tube and wick-adjusting rack and pinions; the second of a chimney-holder, deflector, and such other parts as may be needed for the proper combustion of the fluid so as to produce an illuminating flame, the two groups being united by friction, and the latter when in position in the burner being supported by the former without the intervention of any mechanical device whereby the two may be rigidly connected together, substantially as and for the purposes herein shown and set forth.'

Everything here claimed is found in Stuber's burner. If this claim is valid Stuber could be enjoined. The addition of a bayonet fastening by Stuber does not destroy the identity of his lamp with the alleged invention described in this claim. It follows that this claim is void for this reason, without reference to other objections which have been suggested in relation to it. One void claim, however, does not vitiate the entire patent, if made by mistake or inadvertence and without any wilful default or intent to defraud or mislead the public. Giving to the complainants the whole benefit of this indulgence there is still nothing in the remaining claims which the defendant is called upon to answer. They are merely for combinations of parts in the original burner of Reichmann which the defendant does not use unless the pretence of a claim to peripheral springs as distinguished from Reichmann's arms and supports can be sustained. We have already seen that this cannot be done.

Our conclusion, therefore, is that the Comet burner is no infringement of Reichmann's reissued patent so far as that patent is valid.

This view of the case makes it unnecessary to discuss the question relating to the alleged invention of Collins. Whilst his conduct and testimony and that of the other witnesses who testify to his invention are susceptible of much criticism, we think it proper to say that we should feel great difficulty in disregarding it altogether. If the models presented by him were really his invention at the time sworn to, the Reichmann patent has no foundation whatever to stand on. But waiving the discussion of this question we feel bound to affirm the decree of the Circuit Court for the reasons above stated.

title: Carlton v. Bokee/Opinion of the Court


text: Talk:Carlton v. Bokee/Opinion of the Court

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


text:
Wilson v. City Bank

ON certificate of division in opinion between the judges of the Circuit Court for the District of Minnesota; the case being thus:

The Bankrupt Act of 1867 provides in the earlier part of it, that if any persons residing within the jurisdiction of the United States, shall apply by petition to the judge of the judicial district in which he has resided, &c., setting forth 'his inability to pay all his debts in full, his willingness to surrender all his estate and effects, for the benefit of his creditors,' and his desire to obtain the benefits of the act, he may, after certain proceedings mentioned, and with certain excepted cases, obtain 'a discharge from all his debts.' A subsequent part of the same act provides for proceeding by creditors to obtain a decree of bankruptcy against their debtor, who has not made any such voluntary application.

After the enactment relating to the first case contemplated that is to say, of the debtor, himself, voluntarily applying to be decreed a bankrupt, the act in its thirty-fifth section thus proceeds:

'SECTION 35. That if any person, being insolvent, or in contemplation of insolvency, within four months before the filing of the petition by or against him, with a view to give a preference to any creditor or person having a claim against him, or who is under any liability for him, procures any part of his property to be attached, sequenstered, or seized on execution, or makes any payment, pledge, assignment, transfer, or conveyance of any part of his property either directly or indirectly, absolutely or conditionally, the person receiving such payment, pledge, assignment, transfer, or conveyance, or to be benefited thereby, or by such attachment, having reasonable cause to believe such person is insolvent, and that such attachment, payment, pledge, assignment, or conveyance is made in fraud of the provisions of this act, the same shall be void, and the assignee may recover the property or the value of it from the person so receiving it, or so to be benefited.

'And if any person being insolvent or in contemplation of insolvency or bankruptcy, within six months before the filing of the petition by or against him, makes any payment, sale, assignment, transfer, conveyance, or other disposition of any part of his property to any person who then has reasonable cause to believe him to be insolvent, or to be acting in contemplation of insolvency, and that such payment, sale, assignment, transfer, or other conveyance is made with a view to prevent his property from coming to his assignee in bankruptcy, or to prevent the same being distributed under this act, or to defeat the object of, or in any way impair, hinder, impede, or delay the operation and effect of, or to evade any of the provisions of this act, the sale, assignment, transfer or conveyance shall be void, and the assignee may recover the property, or the value thereof as assets of the bankrupt.

'And if such sale, assignment, transfer or conveyance is not made in the usual and ordinary course of business of the debtor, the fact shall be prim a facie evidence of fraud.'

The thirty-ninth section, which relates to 'involuntary bankruptcy,' enacts thus:

'SECTION 39. That any person residing and owing debts as aforesaid who, after the passage of this act, shall depart from the State, district, or Territory of which he is an inhabitant, with intent to defraud his creditors, or being absent shall, with such intent, remain absent; OR shall conceal himself to avoid the service of legal process, in any action for the recovery of a debt or demand provable under this act, OR shall conceal or remove any of his property to avoid its being attached, taken or sequestered on legal process, OR shall make any assignment, gift, sale, conveyance, or transfer of his estate, property, rights or credits, either within the United States or elsewhere, with intent to delay, defraud, or hinder his creditors, OR who has been arrested and held in custody under or by virtue of mesne process or execution, issued out of any court of any State, district, or Territory, within which such debtor resides or has property, founded upon a demand in its nature provable against a bankrupt's estate under this act, and for a sum exceeding $100, and such process is remaining in force and not discharged by payment or in any other manner provided by the law of such State, district, or Territory applicable thereto, for a period of seven days; OR has been actually imprisoned for more than seven days in a civil action founded on contract for the sum of $100 or upwards; OR who, being bankrupt or insolvent, or in contemplation of bankruptcy or insolvency, shall make any payment, gift, grant, sale, conveyance or transfer of money or other property, estate, rights or credits, or give any warrant to confess judgment; or procure or suffer his property to be taken on legal process, with intent to give a preference to one or more of his creditors, or to any person or persons who are or may be liable for him as indorsers, bail, sureties, or otherwise, or with the intent, by such disposition of his property, to defeat or delay the operation of this act; OR who, being a banker, merchant or trader, has fraudulently stopped or suspended, and not resumed payment of his commercial paper within a period of fourteen days, shall be deemed to have committed an act of bankruptcy, and, subject to the conditions hereinafter prescribed, shall be adjudged a bankrupt on the petition of one or more of his creditors, the aggregate of whose debts provable under this act amount to at least $250, provided such petition is brought within six months after the act of bankruptcy shall have been committed.

'And if such person shall be adjudged a bankrupt, the assignee may recover bank the money or other property so paid, conveyed, sold, assigned or transferred contrary to this act, provided the person receiving such payment or conveyance had reasonable cause to believe that a fraud on this act was intended, or that the debtor was insolvent. And such creditor shall not be allowed to prove his debt in bankruptcy.'

These enactments being in force, one Wilson, assignee in bankruptcy of the firm of Vanderhoof Brothers, lately merchants at the city of St. Paul, filed a bill against the City Bank of the said city to determine which of the parties, complainant or defendant, was entitled to the stock of goods of the bankrupts, or the proceeds thereof. The facts of the case, about which there was no dispute, were thus found by the court:'On the 26th of February, 1870, judgment by default was rendered by one of the District Courts of the State of Minnesota in favor of the bank against Vanderhoof Brothers for the sum of $2130. On the same day execution was issued, and the sheriff immediately made a levy upon the whole stock of goods of the debtors, which was sold by him for $2385, which is now in the hands of the bankrupt court to await the determination of this suit. The suit by the bank was brought on promissory notes, commercial paper made by the debtors Vanderhoof Brothers to the City Bank of St. Paul, one of which notes was more than fourteen days past due when suit was brought thereon by the bank.

'After the levy of the said execution and before the sale by the sheriff, Vanderhoof Brothers were adjudicated bankrupts on the petition of creditors filed against them after judgment had been obtained and levy made under the execution. The Vanderhoofs had no defence to the notes upon which the bank had sued them, and put in no defence. They had no property except their said stock in trade, which, at cost prices, was about equal to the amount of their liabilities.

'The debtors Vanderhoof Brothers were insolvent when said suit was brought against them by the bank, and the bank had then reasonable cause to believe it, and knew that they had committed an act of bankruptcy, and that they had no property but their said stock in trade. The Vanderhoofs gave no notice to any of their creditors of the suit commenced against them by the bank, and having no defence, did not defend it nor go into voluntary bankruptcy, nor otherwise make any effort to prevent the judgment being obtained or the levy of the execution.'

On this case the following questions arose at the trial, in relation to which the judges were opposed in opinion:

'1st. Whether or not an intent on the part of said debtors, Vanderhoof Brothers, to suffer their property to be taken on legal process, to wit, the said execution, with intent to give a preference to said bank, or with intent thereby to defeat or delay the operation of the Bankrupt Act, can be inferred from the foregoing facts?

'2d. Whether, under said facts, the said bank in obtaining said judgment and making the said levy had reasonable cause to believe that a fraud on the Bankrupt Act was intended?

'3d. Whether, under said facts, the bank obtained by the levy of its execution a valid lien on the said goods as against the assignee in bankruptcy?'

The questions were accordingly certified here for decision.

Mr. E. G. Rogers, for the assignee in bankruptcy:

I. Being insolvent, the Vanderhoofs suffered their entire stock of goods to be seized on execution on the judgment by default, obtained against them by the bank, with intent to give a preference to the bank over their other creditors, and in fraud of the thirty-fifth and thirty-ninth sections of the Bankrupt Act.

(1.) They suffered their property to be seized on execution.

(2.) This was a transfer of the property, within the meaning of the thirty-fifth and thirty-ninth sections of the act.

The bank stands in no better position than if the Vanderhoofs had paid the debt in money or in goods.

(3.) It was a transfer out of the usual and ordinary course of Vanderhoof Brothers' business, and, therefore, prim a facie fraudulent.

(4.) The necessary consequence of Vanderhoof Brothers suffering their entire stock in trade, and their entire property to be levied on, was to break up their business and put it out of their power to pay their other creditors. It appropriated their whole property to the payment of a single creditor, putting the property into the hands of that creditor, enabling him to pay himself in full, without regard to whether other creditors were paid or not, and thereby necessarily gave a preference to that creditor.

It was an act of bankruptcy, and under the circumstances it was almost inevitable that the other and unpreferred creditors should proceed against Vanderhoof Brothers in bankruptcy (as has actually been the case), in which event the effect of suffering the levy is to impede, hinder, and delay the operation of the Bankrupt Act.

Vanderhoof Brothers must be presumed to have intended these natural and legal consequences of their conduct; they might have prevented them by filing their petition in voluntary bankruptcy. Not having done so, but having suffered a creditor to obtain a preference which they might have prevented, they must be presumed to have intended to give such preference.

II. The bank having knowledge of the Vanderhoofs' acts of bankruptcy, and having also at least reasonable cause to believe the firm insolvent, had also reasonable cause to believe that a fraud upon the Bankrupt Act was intended by them, and in fact did themselves intend to obtain a preference in fraud of the act.

1. It follows as a necessary conclusion that if the bank had reasonable cause to believe the Vanderhoofs insolvent, 'they had reason to believe that the Vanderhoof Brothers in neglecting to make payment of their debts, in submitting to suit and in neglecting to take the steps contemplated by the Bankrupt Act for the purpose, and equal benefit of all their creditors according to the plain intent and purport of the law, were acting in fraud of the law itself.'

They had reason to believe that if they seized all the Vanderhoof goods on execution, the bank would obtain a preference over their other creditors, and thereby a fraud on the act would be perpetrated. They as well as the Vanderhoofs must be presumed to have intended the consequences of their conduct, and these consequences were to give the bank a preference, and to prevent the property from being distributed equally among all Vanderhoof Brothers' creditors under the provisions of the Bankrupt Act.

2. The transfer effected by the levy being out of the usual and ordinary course of Vanderhoof Brothers' business, was prim a facie evidence to the bank of fraud.

III. The bank, after acts of bankruptcy of the Vanderhoofs, of which it had full knowledge, and with reasonable cause to believe the Vanderhoofs insolvent, could not by proceeding in a State court obtain a valid lien and seize the property of the bankrupts to the exclusion of their other creditors. This is said by the Supreme Court of the United States, in Shawhan v. Wherritt, to be 'the chief and important question involved' in that case, and it was there held that such a proceeding on the part of the creditor was a fraud upon the Bankrupt Act, and therefore void.

Mr. Harvey Officer, contra, citing Wright v. Filley, as in point, and other cases.

Mr. Justice MILLER delivered the opinion of the court.

title: Wilson v. City Bank


text: Talk:Wilson v. City Bank

title: Talk:Wilson v. City Bank


text:
Wilson v. City Bank/Opinion of the Court

The questions presented to this court by the certificate of division require, for a satisfactory answer, a careful consideration and construction of sections thirty-five and thirtynine of the Bankrupt law, with reference to the general spirit and purpose of that law. In looking to these the first and most important consideration which demands our attention is the discrimination made by the act between the cases of voluntary and involuntary bankruptcy. In both classes of cases undoubtedly the primary object is to secure a just distribution of the bankrupt's property among his creditors, and in both the secondary object is the release of the bankrupt from the obligation to pay the debts of those creditors.

But in case of voluntary bankruptcy the aid of the law is invoked by the bankrupt himself, with the purpose of being discharged from his debts as his principal motive, and in the other the movement is made by his creditors with the purpose of securing the appropriation of his property to their payment, the discharge being with them a matter of no weight and often contested.

There is a corresponding difference in the facts on which the action of this court can be invoked in these different classes of bankruptcy. When the party himself weeks the aid of the court the averment he is required to make is a very simple one, namely, that 'he is unable to pay all his debts in full, and is willing to surrender all his estate and effects for the benefit of his creditors, and desires to obtain the benefit of the act,' that is, to be discharged from the claims of his creditors. On filing a petition containing this request he is declared by the court a bankrupt. The allegation cannot be traversed, nor is any issue or inquiry as to its truth permitted. The administration of his effects proceeds thereafter under the direction of the court, and may end in paying all his debts with a surplus to be returned to the bankrupt, or the result may be nothing for the creditors, and the unconditional release of the bankrupt.

But while the debtor may on this broad basis call on the court to administer his estate, the creditor who desires to do the same thing is limited to a few facts or circumstances, the existence of which are essential to his right to appeal to the court. And when any one of these facts is set forth in a petition to the court by the creditor, the truth of the allegation may be denied by the debtor, and on the issue thus found, he may demand the verdict of a jury.

The reason for this wide difference in the proceedings in the two cases is obvious enough. When a man is himself willing to refer his embarrassed condition to the proper court with a full surrender of all his property, no harm can come to any one but himself, and there can be no solid objection to the course he pursues. But when a person claims to take from another all control of his property, to arrest him in the exercise of his occupation, and to impair his standing as a business man, in short to place him in a position which may ruin him in the midst of a prosperous career, the precise circumstances or facts on which he is authorized to do this, should not only be well defined in the law, but clearly established in the court.

It is the thirty-ninth section of the Bankrupt Act which lays down in nine or ten subdivisions the facts and circumstances which give a man's creditors the right to have him declared a bankrupt, and his property administered in a bankruptcy court. One of them is the case of a person who being bankrupt or insolvent, or in contemplation of insolvency, shall make any payment, gift, grant, sale, conveyance, or transfer of money or other property, estate, rights, or credits, or give any warrant to confess judgment or procure or suffer his property to be taken on legal process with intent to give a preference to one or more of his creditors, or to any person or persons who may be liable for him as indorsers, bail sureties, or otherwise, or with intent by such disposition of his property to defeat or delay the operation of the act. And the same section declares that if such person shall be adjudged a bankrupt, the assignee may recover back the money or property so paid, conveyed, sold, assigned, or transferred, contrary to the act; provided, the person receiving such payment or conveyance, had reasonable cause to believe that'a fraud on the Bankrupt Act was intended, or that the debtor was insolvent.

The case before us is one of involuntary bankruptcy, but there is no question here whether the party was rightfully declared a bankrupt. The statement of facts shows that the debtors were insolvent when the bank commenced its proceedings in the State court, and that the bank had then reasonable cause to believe they were insolvent, and knew that they had committed an act of bankruptcy, to wit, had permitted one of their notes to go unpaid more than fourteen days after it was due.

It is maintained that under these circumstances the bankrupt 'suffered his property to be taken on legal process with intent to give a preference to the bank, and to defeat or delay the operation of the act.' Undoubtedly, the facts stated bring the bank within the proviso, as to knowledge of the debtor's insolvency; and if the debtor suffered his property to be taken within the meaning of the statute, with intent to defeat or delay the operation of the act, then the assignee should recover the property. So that this sufferance and this intent on the part of the bankrupt are the matters to be decided. The first and principal question on which the judges became divided is, whether such intent is to be inferred from the facts stated.

The thirty-fifth section of the act, which is designed to prevent fraudulent preferences of a person in contemplation of insolvency or bankruptcy, declares that any attachment or seizure under execution of such person's property, procured by him with a view to give such a preference, shall be void if the act be done within four months preceding the filing of the petition in bankruptcy by or against him. Though the main purpose of the thirty-ninth section is to define acts of the trader which make him a bankrupt, and that of the thirty-fifth is to prevent preferences by an insolvent debtor in view of bankruptcy, both of them have the common purpose of making such preferences void, and enabling the assignee of the bankrupt to recover the property; and both of them make this to depend on the intent with which the act was done by the bankrupt, and the knowledge of the bankrupt's insolvent condition by the other party to the transaction. Both of them describe, substantially, the same acts of payment, transfer, or seizure of property so declared void. It is, therefore, very strongly to be inferred that the act of suffering the debtor's property to be taken on legal process in section thirty-nine, is precisely the same as procuring it to be attached or seized on execution in section thirty-five. Indeed, the words procure and suffer are both used in section thirty-nine.

What, then, is the true meaning of that phrase in the act? In both cases it must be accompanied with an intent. In section thirty-five it is to give a preference to a creditor; in section thirty-nine it must be to give a preference to a creditor, or to defeat or delay the operation of the Bankrupt Act. In both there must be the positive purpose of doing an act forbidden by that statute, and the thing described must be done in the promotion of this unlawful purpose.

The facts of the case before us do not show any positive or affirmative act of the debtors from which such intent may be inferred. Through the whole of the legal proceedings against them they remained perfectly passive. They owed a debt which they were unable to pay when it became due. The creditor sued them and recovered judgment, and levied execution on their property. They afforded him no facilities to do this, and they interposed no hindrance. It is not pretended that any positive evidence exists of a wish or design on their part to give this creditor a preference, or oppose or delay the operation of the Bankrupt Act.

There is nothing morally wrong in their course in this matter. They were sued for a just debt. They had no defence to it, and they made none. To have made an effort by dilatory or false pleas to delay a judgment in the State court would have been a moral wrong and a fraud upon the due administration of the law. There was no obligation on them to do this, either in law or in ethics. Any other creditor whose debt was due could have sued as well as this one, and any of them could have instituted compulsory bankrupt proceedings. The debtor neither hindered nor facilitated any one of them. How is it possible from this to infer, logically, an actual purpose to prefer one creditor to another, or to hinder or delay the operation of the Bankrupt Act?

It is said, however, that such an intent is a legal inference from such inaction by the debtor, necessary to the successful operation of the Bankrupt law; that the grand feature of that law is to secure equality of distribution among creditors in all cases of insolvency; and that, to secure this, it is the legal duty of the insolvent, when sued by one creditor in an ordinary proceeding likely to end in judgment and seizure of property, to file himself a petition of voluntary bankruptcy, and that this duty is one to be inferred from the spirit of the law, and is essential to its successful operation.

The argument is not without force, and has received the assent of a large number of the district judges, to whom the administration of the Bankrupt law is more immediately confided.

We are, nevertheless, not satisfied of its soundness.

We have already said that there is no moral obligation on the part of the insolvent to do this, unless the statute requires it, and then only because it is a duty imposed by the law. It is equally clear that there is no such duty imposed by that act is express terms. It is, therefore, an argument solely of implication. This implication is said to arise from the supposed purpose of the statute to secure equality of distribution in all cases of insolvency, and to make the argument complete, it is further necessary to hold that this can only be done in bankruptcy proceedings under that statute. Does the statute justify so broad a proposition? Does it in effect forbid all proceedings to collect debts in cases of insolvency, in other courts, and in all other modes than by bankruptcy? We do not think that its purpose of securing equality if distribution is designed to be carried so far.

As before remarked, the voluntary clause is wholly voluntary. No intimation is given that the bankrupt must file a petition under any circumstances. While his right to do so is without any other limit than his own sworn averment that he is unable to pay all his debts, there is not a word from which we can infer any legal obligation on him to do so. Such an obligation would take from the right the character of a privilege, and confer on it that of a burdensome and, often, ruinous duty.

It is, in its essence, involuntary bankruptcy. But the initiation in this kind of bankruptcy is, by the statute, given to the creditor, and is not imposed on the debtor. And it is only given to the creditor in a limited class of cases. The argument we are combating goes upon the hypothesis that there is another class given to the creditor by inference, namely, where the debtor ought himself to go into court as a bankrupt and fails to do it. We do not see the soundness of this implication from anything in the statute.

We do not construe the act as intended to cover all cases of insolvency, to the exclusion of other judicial proceedings. It is very liberal in the classes of insolvents which it does include, and needs no extension in this direction by implication. But it still leaves, in a great majority of cases, parties who are really insolvent, to the chances that their energy, care, and prudence in business may enable them finally to recover without disastrous failure or positive bankruptcy. All experience shows both the wisdom and justice of this policy.

Many find themselves with ample means, good credit, large business, technically insolvent; that is, unable to meet their current obligations as fast as they mature. But by forbearance of creditors, by meeting only such debts as are pressed, and even by the submission of some of their property to be seized on execution, they are finally able to pay all, and to save their commercial character and much of their property. If creditors are not satisfied with this, and the parties have committed an act of bankruptcy, any creditor can institute proceedings in a bankrupt court. But until this is done, their honest struggle to meet their debts and to avoid the breaking up of all their business is not, of itself, to be construed into an act of bankruptcy, or a fraud upon the act.

It is also argued, that inasmuch as to lay by and permit one creditor to obtain judgment and levy on property necessarily gives that creditor a preference, the debtor must be supposed to intend that which he knows will follow.

The general legal proposition is true, that where a person does a positive act, the consequences of which he knows beforehand, that he must be held to intend those consequences. But it cannot be inferred that a man intends, in the sense of desiring, promoting, or procuring it, a result of other persons acts, when he contributes nothing to their success or completion, and is under no legal or moral obligation to hinder or prevent them.

Argument confirmatory of these views may be seen in the fact that all the other acts or modes of preference of creditors found in both the sections we have mentioned, in direct context with the one under consideration, are of a positive and affirmative character, and are evidences of an active desire or wish to prefer one creditor to others. Why, then, should a passive indifference and inaction, where no action is required by positive law or good morals, be construed into such a preference as the law forbids?

The construction thus contended for is, in our opinion, not justified by the words of either of the sections referred to, and can only be sustained by imputing to the general scope of the Bankrupt Act a harsh and illiberal purpose, at variance with its true spirit and with the policy which prompted its enactment.

Undoubtedly very slight evidence of an affirmative character of the existence of a desire to prefer one creditor, or of acts done with a view to secure such preference, might be sufficient to invalidate the whole transaction. Such evidence might be sufficient to leave the matter to a jury, or to support a decree, because the known existence of a motive to prefer or to defraud the Bankrupt Act would color acts or decisions otherwise of no significance. These cases must rest on their own circumstances. But the case before us is destitute of any evidence of the existence of such a motive, unless it is to be imputed as a conclusion of law from facts which we do not think raise such an implication.

These latter considerations serve to distinguish the present case from that of Buchanan v. Smith, decided at the last term, and which may seem to conflict, in some of the expressions used in that opinion, with those found in this. That was a bill in chancery involving several distinct issues of fact, on which much and conflicting testimony was given, and the contention was mainly as to what was established by the evidence. There was satisfactory proof that the creditor, before pursuing his remedy in the State court, had urgently sought to secure a preference by obtaining from the debtor a transfer of certain policies of insurance on which a loss was due. The case was also complicated by an assignment made by the debtor, under which the assignee took possession before the creditor procured his judgment in the State court. That case was well decided on the evidence before the court. But in the case now before us the questions we have discussed are presented nakedly and without confusion, by facts found by the court and undisputed, and we have been compelled, on careful consideration of the Bankrupt Act, to the following conclusions:

1. That something more than passive non-resistance of an insolvent debtor to regular judicial proceedings, in which a judgment and levy on his property are obtained, when the debt is due and he is without just defence to the action, is necessary to show a preference of a creditor, or a purpose to defeat or delay the operation of the Bankrupt Act.

2. That the fact that the debtor under such circumstances does not file a petition in bankruptcy is not sufficient evidence of such preference or of intent to defeat the operation of the act.

3. That, though the judgment creditor in such case may know the insolvent condition of the debtor, his levy and seizure are not void under the circumstances, nor any violation of the Bankrupt law.

4. That a lien thus obtained by him will not be displaced by subsequent proceedings in bankruptcy against the debtor, though within four months of the filing of the petition.

These propositions require the questions certified to us to be answered as follows: The first and second in the NEGATIVE, and the third in the AFFIRMATIVE.


text: Talk:Wilson v. City Bank/Opinion of the Court


text:
Page:Triangles of life, and other stories.djvu/18

6 worse, and had to be kept sitting on the rough stool between two of them—who humoured and watched him as a little child—because he only wanted to go down that lane and have a dip in the Thames back-water now it was dusk, and no one was about.

Bogan reckoned he was safe enough for the night, with any one to watch him, turn about, and quite harmless. But he saw the thing in another light, later on, when Billy confessed tearfully to Jack Moonlight that he thought he was going mad, because he kept craving to peel Bogan's head with the chopper, like a big pumpkin, and quarter it. He said the Voices were urging him all the time to do it—he could hear them all the time he was speaking. And he wanted to be tied up.

Just before dark a solitary swagman, or "traveller," came along—on his way from a shearing shed to the coach-road, he said and seeing and hearing how things stood, he volunteered to look after Billy first part of the night, as he'd only made a short stage, and rest over next day, if they liked, with an eye to Billy and the cooking. He said he'd had to do with such cases before, and understood. He was a likely looking chap for the job—tall, with saddish brown eyes—so they washed a tin plate, knife and fork, and pint pot for him, with an audible breath of relief. But afterwards One-Eyed Bogan carefully collected the chopper, knives and forks, and all edged tools about camp and lashed them together in a bundle with bagging, a spare tent fly, and bits of clothes-line and wire—for general safety, he said. He said, "Yer couldn't


text:
Carpenter v. United States

APPEAL from the Court of Claims; the case as found by that court having been thus:

In July, 1863, Major Hunt, of the corps of engineers, entered into negotiations with one Carpenter, owner of an island in Narragansett Bay, for the purchase of it by the United States for military uses; and a parol contract for the purchase and sale was then formally concluded; the terms being approved by the Secretary of War. The price, as stipulated, was $21,000. In August following, the officers of the government, with the consent of Carpenter, entered into possession of the island and began to prepare for fortifying it. The possession then taken they have ever since retained. Upon examination, however, it was found and so reported by the Attorney-General, that under an act of May 1st, 1820, an executrive department had by law no authority to purchase land on account of the government. Consequently the verbal arrangement with Carpenter remained unconsummated, until 1866. On the 12th of June, of that year, Congress made an appropriation for the purchase of sites then occupied, and proposed to be occupied for sea-coast defence, and on the 7th of August next following, the purchase-money of the island ($21,000) was paid to Carpenter, and accepted by him without any claim for interest or rents, so far as it appeared, and he delivered a deed for the property to the United States. In this state of things Carpenter now, December 7th, 1867, filed a petition in the Court of Claims, claiming compensation from the United States for the use and occupation of the island from the time the United States officers, with his consent, took possession, after the verbal arrangement to purchase, until the deed was made and the purchase-money was paid, that is, from August, 1863, to August, 1866.

The question was whether, upon the case stated, an action for use and occupation could be sustained.

The Court of Claims, as appeared by its opinion, considered that the law (i. e., the statute of 11 George II, chapter 19, § 14) which gives the action for use and occupation always required that some contract of demise should subsist; in other words, that the relation of landlord and tenant must be established; that there was no such relationship here. That independently of this the claim rested on an implied contract, but that where there was an express contract to buy, a contract to pay rent could not arise by mere inference. Relying on these views, and citing the English case of Kirtland v. Pounsett, it accordingly decreed a dismissal of the petition. From that decree the claimant appealed.

Messrs. J. M. Carlisle and J. D. McPherson, for the appellant:

The right to sue for use and occupation does not rest, as the court below assumed, on the statute of 11 George II. It existed previously; though until the passing of the statute mentioned the plaintiff was nonsuited, if a demise was proved. Use and occupation may well lie without a demise.

The English case of Kirtland v. Pounsett, cited by the Court of Claims, does not apply. The report says:

'Mansfield, C. J., at first inclined to think the action might be supported; for that if a man had contracted for the purchase of an estate of the annual value of many thousand pounds, and had through the imprudence of the vendor been permitted to take possession, which he might possibly retain for several years pending the discussion of the title in a court of equity, it would be strange if the purchaser could hold possession and receive the profits during all that time without paying any consideration for it to the vendor. But upon the ground that during all the defendant's occupation of the premises the plaintiff had been in possession of the purchase money, of which he had made or might have made interest, the Chief Justice directed a nonsuit, with liberty to move to set it aside.'

title: Carpenter v. United States


text: Talk:Carpenter v. United States

title: Talk:Carpenter v. United States


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

On the motion to set aside the Chief Justice said he doubted extremely whether in any case the plaintiff could recover. If no money had been paid, he said, it might perhaps be a different question, but if one paid his money and took possession, he asked:

'Is it not just that one party should take back his money and the other take back his house?'

On the other hand, Howard v. Shaw, in the English Exchequer, is in our favor. There the defendant had entered into possession under a valid contract to purchase, and deposited part of the price. He afterward took advantage of some dispute to demand back his deposit, and received part, but not receiving the whole kept possession, until an action of ejectment was brought against him, when he surrendered the premises. The vendor then sued for use and occupation. At the trial the point was made by the defendant that the action could not be maintained, because the relation of landlord and tenant had never existed; and the Chief Baron being of that opinion, nonsuited the plaintiff. Upon rule being moved for, to set aside the nonsuit and enter a verdict, the Chief Baron said he had entertained doubts, but was satisfied the plaintiff ought to recover; that 'while the defendant occupied under a valid contract for the sale of the property he could not be considered as a tenant.' He goes on:

'But what is the relation of the parties when the contract of sale has gone off? The defendant remains in possession with the consent of the landlord, but without any title to or contract to purchase the land. Under these circumstances he is a tenant at will, and if the occupation is beneficial to him, that is sufficient to imply a contract to pay a reasonabe sum by way of compensation for such occupation.'

Baron Parke was of the same opinion. Baron Alderson said on the point:

'While the defendant was in possession under this contract for sale, he was a tenant at will under a distinct stipulation that he should be rent free, therefore for that term no action for use and occupation can be brought against him, but when that contract is at an end, he is a tenant at will simply: therefore from that time he is to pay for occupation.'

Baron Rolfe concurred; and the rule was made absolute.

The Court of Claims, in its opinion, assumes that the defendants entered under 'a contract' of purchase, and that this 'contract' was finally consummated when the 'statutory obstacles' were removed.

But there was no such 'contract.' Carpenter offered to sell the land, but there was no one to buy; no one to agree to buy. Carpenter never was bound to convey, for there was no one to whom he could be bound. The contract was not 'consummated' in 1866; it was but made in 1866. Carpenter's offer was a continuing offer, which he could have withdrawn at any time, and it was not accepted till 1866. There was no statutory obstacle 'removed,' but statutory power was given. The act of May, 1820, was not repealed, nor its provisions suspended; they were complied with.

Mr. S. F. Phillips, Solicitor-General, contra.

Mr. Justice STRONG delivered the opinion of the court.

Though it has sometimes been said that an action of debt, or assumpsit, for the use and occupation of land, can be maintained only when the relation of landlord and tenant has existed between the plaintiff and defendant, this is not strictly accruate, if it be meant that a demise must be in fact proved. It is true that the statute of 11 George II, chapter 19, § 14, enacted that the action might be sustained when a demise has been proved, but the action existed before the statute was enacted, and the only effect of the statute was to enlarge its sphere. Privity of contract is doubtless essential in all cases. But when the defendant has entered and occupied by permission of the plaintiff, without any express contract, the law implies a promise on his part to make compensation or pay a reasonable rent for his occupation. In such a case, the consent of the owner to the defendant's entry, followed by such entry and by subsequent occupation, may be considered equivalent to a demise, or at least prim a facie evidence of a demise. This is because a demise with a corresponding agreement to pay rent, or make compensation for the use of the property, is consistent with an unexplained entry by the owner's consent, and because it is a reasonable presumption that occupation thus taken was intended to be paid for. No reason, however, for such an implication exists, when an express contract or an arrangement between the parties shows that it was not intended by them to constitute the relation of landlord and tenant, but that the occupation was taken and held for another purpose. And this is shown when the entry has been made in pursuance of an agreement to purchase, whether that agreement was in writing or in parol. Such an agreement sufficiently explains the allowed entry, without the necessity of resorting to any implication of a contract other than that actually made. Accordingly, it was ruled in Kirtland v. Pounsett, that an action for use and occupation cannot be maintained against one who took possession under a contract of sale, which failed afterwards to be consummated, in consequence of the vendor's inability to make title. It is true it appeared in that case the purchase-money had been paid, and by the use of it the vendor might have been regarded as compensated for the defendant's occupation, yet C. J. Mansfield said: 'A contract cannot arise by implication of law under circumstances the occurrence of which neither of the parties ever had in contemplation.' The same principle was asserted in Rumball v. Wright. And in the later case of Winterbottom v. Ingham, the same doctrine was declared, though the purchase-money had not been paid, and the reason given was, that when the defendant was let into possession, both parties understood that he made no promise to pay rent. The holding was in the expectation that title would be made and the purchase completed. There are other decisions to the same effect. It is true that in Howard v. Shaw, it was held that after a contract of sale had been rescinded, an action for use and occupation might be maintained against a defendant who had remained in possession with the consent of the owner, but without any title or contract for the purchase of the land, and that a recovery might be had for the possession retained after the contract of purchase was terminated. But he was not held liable for rent during the time the contract subsisted, and he could not have been for the obvious reason that the contract was inconsistent with any understanding that rent was to be paid. And no case can be found, it is believed, in which one who entered in virtue of an agreement or understanding that he was to be a purchaser, has been held liable in an action for the use and occupation of the land, if the purchase was actually concluded.

It is contended, however, on behalf of the present plaintiff, that the contract of purchase under which, or in the expectation of the completion of which the United States entered, and under which they continued to hold until the deed was made and the purchase-money was paid, was invalid; that until the act of Congress of 1866 was passed, no executive department had authority to purchase the island, and that, therefore, there was no legal contract for the purchase in existence until the deed was made and the price paid. But if this be conceded, it can make no difference. Let it be that neither party could have enforced the parol arrangement, it is still true that it was utterly inconsistent with any understanding that the parties contemplated the one was to pay and the other was to receive rent for the occupation of the property. The understanding of the parties is the material thing. Unless it was in their contemplation that compensation, other than the price stipulated to be paid for the transfer of the title, should be made, as C. J. Mansfield said, in Kirtland v. Pounsett, a contract to pay rent cannot arise by implication of law.

The plain common sense of the case is, that if the plaintiff was entitled to anything beyond what he has received, it was to interest on the purchase-money from the time the possession was taken until the price of the sale was paid. That he should have demanded before he delivered his deed. Not having done so, but having accepted the principal and consummated the sale, he cannot now assert that the relation in which his vendee stood to him was that of a tenant to a landlord, and recover interest in the shape of damages for the breach of an implied promise to pay rent for the use and occupation of the island. There is no room in the facts found by the Court of Claims for the implication of any such promise.

JUDGMENT AFFIRMED.


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


text:
United States v. Isham

ON certificate of division in opinion between the judges of the Circuit Court for the Eastern District of Michigan; the case being thus:

The act of June 30th, 1864, 'to provide internal revenue to support the government,' &c., requires certain instruments, specified in a schedule which it contains, to be stamped. The schedule is as follows:

BANK-CHECK, draft, or order for the payment of any sum of money whatever, drawn upon any bank, banker, or trust company, or for any sum exceeding $10 drawn upon any other person or persons, companies or corporations, at sight or on demand, 2 cents.

Bill of exchange (inland), draft, or order for the payment of any sum of money not exceeding $100, otherwise than at sight or on demand, or any promissory note (except bank notes issued for circulation, and checks made and intended to be forthwith presented, and which shall be presented to a bank or banker for payment), or any memorandum, check, receipt, or other written or printed evidence of an amount of money to be paid on demand, or at a time designated, for a sum not exceeding $100, 5 cents.

And for every additional $100, or fractional part thereof in excess of $100, 5 cents.

This statute being in force, the United States filed, in 1871, a criminal information in the court below against E. B. Isham, for issuing without a stamp and with intent to evade the provisions of the above-quoted act, a paper in the form of a draft drawn upon one C. J. Canda. The paper, which was attached to and made part of each count of the information, was in this form:

It appeared from the testimony offered by the government, that the Iron Cliffs Company was a corporation of Michigan, situated at Negaunee, in the State just named, and engaged in mining iron-ore and in manufacturing pigiron. It had an office at Negaunee, where its business was carried on, and a head office in New York, where its board of directors met, and its funds were kept. Isham was superintendent of the works at Negaunee, and resided there. Canda was treasurer of the company, and resided in New York. The company had been in the practice of issuing paper like the instrument above set forth, in payment for labor or other debts due at the mine since January, 1868, nearly all payments of balances due for labor having been made since that time and up to 1871, when the information was filed, in it. The amount issued annually since that time had been about $100,000. The blanks were sent to Isham from New York, and signed by him as drawn. The denominations issued were of $1, $2, $3, $5 and $10. When the Iron Cliffs Company began to issue this paper, there were hardly any facilities for getting currency into the country, except taking it through one hundred and twenty miles of staging, and through a wilderness chiefly; and when it was issued, it, to some extent, went into circulation, and answered the purpose of a local currency. It was taken at a store, in which the company was interested, in payment for goods; and by all the banks and banking-houses in that region, and sometimes paid out by them on checks. But when in the course of business it came into the hands of a bank or banker, or a merchant, it was generally retained until a considerable amount of it was on hand-say from $1000 to $2000-and then either sent to New York by express for redemption, or Isham took it up and gave to the holder a draft on New York for the amount. When Isham took this paper in this way, by giving the holder a large draft for it, he frequently reissued it, or paid it out again in the course of the company's business at the mine; but when it was finally paid in New York, it was cancelled and destroyed.

On this and similar evidence the following questions arose, concerning which the defendant requested the court to instruct the jury in his favor, and for a verdict of acquittal:

'1st. Whether the instrument was on its face subject to be stamped?

'2d. Whether the evidence tending to prove that Isham was superintendent of the Iron Cliffs Company, and drew the instrument in that capacity, or that Canda was the treasurer of the said company, and the instrument was drawn upon him in that capacity, or that the said paper was drawn in the course of the company's business, was relevant and admissible?

'3d. Whether, if the paper in question was made and issued with the design that it should be used as a local circulating medium, and was actually used by the holders as such, it thereby became subject to be stamped, and whether the evidence given by the prosecution, tending to prove these facts, was relevant and admissible?

'4th. Whether, assuming every fact which the evidence in support of the prosecution tended to prove, the defendant was guilty of the offence charged?

'5th. Whether the information in this case sufficiently charged any offence under the laws of the United States?'

And the following further question, upon which the district attorney requested the court to charge in favor of the prosecution:'6th. Whether if the instrument set forth in the information and adduced in evidence was issued with the design and intent to secure time for the payment of the debt it represented, it was therefore subject to stamp duty?'

Which questions (the judges being divided in opinion upon them) were now certified to this court for its opinion.

Mr. S. F. Phillips, Solicitor-General, for the United States:

The schedule of instruments required by the act of 1864 to be stamped, includes in its second paragraph (as quoted supra, p. 496), 'any memorandum, check, &c., or other written or printed evidence of an amount of money to be paid on demand.'

The instrument under consideration is a 'check.' If not a 'check,' it is a 'memorandum, or other written or printed evidence of an amount of money to be paid on demand.' This would be the ordinary and popular view of the instrument, and if either a 'memorandum' or 'check,' 'or other written or printed evidence for a sum of money to be paid on demand,' &c., it must be stamped.

In legal view, however, instruments which assume the form of drafts, but which are drawn by a party upon himself, although loosely and for general purposes, as we have said, styled drafts or checks, are, in essence, promissory notes. The case is the same where the drawer and the drawee are apparently different persons, but in truth mere agents of one person known to all parties, and acknowledged as the only debtor in the transaction. In such cases the paper is accepted from its origin, and the contingent liability of the drawer, so characteristic of mere checks, never arises, being merged before issue in the absolute liability of the same person, as acceptor. That such instruments are promissory notes, was decided in England in the leading case of Miller v. Thomson, and has been sustained in several cases in this country; notably by the high commercial authority of the Court of Appeals of New York in Fairchild v. The Ogdensburgh Railroad Company.

Now, here the evidence shows, that the drawer (Isham), payee (Isham again), and drawee (Canda) were agents of one corporation, the only debtor; and indeed that Isham himself, the drawer, redeemed the bills when they had got in considerable amounts ($1000 to $2000) in the hands of a bank, banker, or merchant.

Independently of the evidence the character of the instrument is disclosed on its face. It is there numbered 1190. It is shown to be one of a large number, of like sort, issued by a company in the region of the iron mines, engaged in dealing in iron. Isham, the drawer and payee, is styled 'sup't,' superintendent. Canda, designated as of New York, the source of capital, no one could doubt was a treasurer.

Alike visibly and by proofs, the transaction was a device to avoid the payment of a stamp duty, and its operation was a fraud on the internal revenue act.

Messrs. C. P. James and J. Hubley Ashton, for the prisoner, argued contra:

1st. That doubtless the words 'memorandum, check,' printed in the statute-book with a comma between them, were, in respect of the comma, incorrectly printed; that statutes as engrossed had no punctuation in them; that, as this court has said, punctuation is 'a most fallible standard' by which to interpret an instrument, and that the act as passed was doubtless 'memorandum check.' Aided by the printer, the words should have appeared 'memorandum-check.' This quite altered the sense.

As for the rest of the phrase, 'other written or printed evidence,' &c., the preceding part of the schedule having, by exclusion, specifically described this instrument, the general words would not apply.

2d. That the instrument was, in form, a draft or order for the payment of money drawn upon a person other than 'a bank, banker, or trust company,' and it was for less than $10; that the stamp duty was to be regulated by the form of the paper; and that not being in form a promissory note, the stamp requisite for instruments which were in that form was unnecessary.

The paper, therefore, required no stamp, and the prosecution must fail.

Mr. Justice HUNT delivered the opinion of the court.

title: United States v. Isham


text: Talk:United States v. Isham

title: Talk:United States v. Isham


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

We are of the opinion that the position taken by the counsel of the defendant is correct,-that the paper issued required no stamp, and that the prosecution must fail.

The schedule of instruments required by the statute of 1864 to be stamped, designates the various instruments and writings to be taxed by the well-known names and descriptions of the paper, and specifies the amounts of duty in substance as follows:

1st. Every bank-check, 2 cents.

2d. Every draft or order for the payment of any sum of money at sight or on demand (except where the draft or order is so drawn on a person, company, or corporation other than a bank, banker, or trust company, and for a sum not exceeding $10), 2 cents.

3d. Every bill of exchange, draft, or order for the payment of any sum of money otherwise than at sight or on demand, for every $100, 5 cents.

4th. Every promissory note, for each $100, 5 cents.

5th. Every memorandum, check, receipt, or other written or printed evidence of an amount of money to be paid on demand or at a time designated, for a sum not exceeding $100, 5 cents.

6th. If the draft or order is drawn on a person not a banker, or a bank or a trust company, and does not exceed $10, then no stamp is required.

There is probably an error in the punctuation of the statute in regard to the item which reads, 'memorandum, check, receipt, or other written or printed evidence of an amount of money to be paid.' It should read 'memorandum-check (with a hyphen between the words), receipt, or other written or printed evidence.' A 'check' was specifically provided for already in the schedule, and it is not to be assumed that Congress would, in the same schedule, make two provisions, differing from each other, for the same subject. A memorandum-check, however, is an instrument well known in the commercial law, which, it might be claimed, did not come under the general term of a check, and which, therefore, had not been specifically provided for. A memorandum-check is in the ordinary form of a bank-check, with the word 'memorandum' written across its face, and is not intended for immediate presentation, but simply as evidence of an indebtedness by the drawer to the holder.

Mr. Parsons, in his work on Notes and Bills, says: 'It has been said that the word 'memorandum,' or 'mem.,' written on the check would not affect the right of the holder. We think this might have been doubted, because there is a well-known custom in all our commercial cities of drawing and using checks in this form merely as due-bills, or as what they are, and are called 'memorandum-checks."

In Dykers v. The Leather Manufacturers' Bank, it was said: 'The weight of the testimony is, that this memorandum amounts to nothing more than an indication of an understanding that the check is not to be presented immediately for payment, so as to destroy the drawer's credit with the bank, where he has not provided funds to meet the draft.'

It is stated further in Parsons, that the holder may present the same for payment, if the name of the bank is not cancelled on the check.

In Franklin Bank v. Freeman, the court speak of memorandum-checks as well known in Boston, and say that the rules of business with regard to them are well understood.

In Glover v. Graeser, it is said that memorandum-checks, being regular bank-checks with the word 'memorandum' written on their face, are constantly used in settlement of accounts between merchants, as admissions of amounts of money due.

This reading makes the statute harmonious and sensible, providing for bank-checks, drafts, inland bills, promissory notes, memorandum-checks, receipts, and assigning to each its proper position.

It is said that in many instances the statute refers to the same subject more than once, under different names, and with different rates of duty, and that embarrassment in the construction of the statute may arise from this cause. Thus a check, whether drawn upon a bank or an individual, is in the nature and form of an inland bill of exchange, having a drawer, a drawee, and usually a payee. The statute describes checks, drafts, and promissory notes, and subsequently speaks of a memorandum-check; also of a receipt or other written or printed evidence of an amount of money to be paid. These general terms plainly include the specifications already made. A bank-check, a memorandum-check, a draft, or a bill of exchange each furnishes written or printed evidence of an amount of money to be paid. So does a promissory note. A note is, indeed, the regular and usual evidence in dealings between men, that money is to be paid, whether in cities or in the country, and whether the transactions be limited or extensive; and yet, bank-checks and drafts, or orders at sight or on demand, require different stamps from memorandum-checks, bills of exchange, and promissory notes.

A few simple rules will dispose of the most of the difficulties that may arise:

1st. Instruments described in technical language, or in terms especially descriptive of their own character, are classed under that head, and are not to be included in the general words of the statute.

2d. The words of the statute are to be taken in the sense in which they will be understood by that public in which they are to take effect. Science and skill are not required in their interpretation, except where scientific or technical terms are used.

3d. The liability of an instrument to a stamp duty, as well as the amount of such duty, is determined by the form and face of the instrument, and cannot be affected by proof of facts outside of the instrument itself.

4th. If there is a doubt as to the liability of an instrument to taxation, the construction is in favor of the exemption, because, in the language of Pollock, C. B., in Girr v. Scudds 'a tax cannot be imposed without clear and express words for that purpose.'

These principles are based in good sense, and are sustained by the authorities.

In Williams v. Jarrett, where the question was, whether a bill was liable to the stamp duty imposed upon bills 'exceeding two months after date,' it was held, that the date meant the time expressed on the face of the bill, and that it did not depend upon the fact that the bill actually had more than two months to run. Denman, C. J., says: 'If a bill bears no date, we must ascertain by evidence the day when it issued, but where there is a date, that must be considered as the time to which the schedule refers.'

In Whistler v. Forster, the same language is used by Erle, C. J., and by Willes, J. The latter says: 'Drafts payable to order, not being affected by either of those enactments, fall within the law as to bills of exchange, which have been repeatedly held not to be void by post-dating, though that should have the effect of making the instrument require a less stamp than if it had been dated correctly and payable at the same time.'

In Bull v. O'Sullivan, decided in 1871, the cases of Whistler v. Forster, and Williams v. Jarrett, are approved, and the rule is thus announced: 'There is nothing in the statutes to invalidate a post-dated check on a banker payable to order on demand, and in determining what is the requisite stamp to make such an instrument admissible in evidence, the instrument alone is to be looked at. Such a check is available in the hands of a person who took it with knowledge that it was post-dated, and is admissible in evidence with only a penny stamp.' Hannan, J., further says: 'We are of opinion that the stamp acts above referred to, so far as they relate to bills of exchange and orders for the payment of money, deal with those documents only as they appear on their face, without reference to any collateral agreement or condition by which their apparent operation may be affected.'

It is not necessary, in this view of the case, to decide whether an order drawn by one officer of a corporation upon another officer of the same corporation is in law a promissory note, nor whether it may simply be treated as such in pleading; nor is it necessary to decide whether the fact that the order is drawn upon Mr. Canda individually, and not as treasurer of the corporation, will affect the result. Whatever may be the law on this subject, it will not affect the case before us. The instrument we are considering is, in form, a draft or check upon an individual. It is not in form a promissory note. It must, therefore, pay the stamp duty of a draft or order, and not that of a promissory note. It is not permissible to the courts, nor is it required of individuals who use the instrument in their business, to inquire beyond the face of the paper. Whatever upon its face it purports to be, that it is for the purpose of ascertaining the stamp duty. The paper here, as we have said, has the distinctive form of a draft or check upon an individual. It falls under that specific description, and is to be taxed according to that description, not varied by proof, and not ranked under any general terms contained in the statute.

It is said that the transaction proved upon the trial in this case, is a device to avoid the payment of a stamp duty, and that its operation is that of a fraud upon the revenue. This may by true, and if not true in fact in this case, it may well be true in other instances. To this objection there are two answers:

1st. That if the device is carried out by the means of legal forms, it is subject to no legal censure. To illustrate. The Stamp Act of 1862 imposed a duty of two cents upon a bank-check, when drawn for an amount not less than twenty dollars. A careful individual, having the amount of twenty dollars to pay, pays the same by handing to his creditor two checks of ten dollars each. He thus draws checks in payment of his debt to the amount of twenty dollars, and yet pays no stamp duty. This practice and this system he pursues habitually and persistently. While his operations deprive the government of the duties it might reasonably expect to receive, it is not perceived that the practice is open to the charge of fraud. He resorts to devices to avoid the payment of duties, but they are not illegal. He has the legal right to split up his evidences of payment, and thus to avoid the tax. The device we are considering is of the same nature.

Another answer may be given to the objection, more comprehensive in its character. It is this: that the adoption of a rule that the form of the instrument can be disregarded, and its real character be investigated for the purpose of determining the stamp duty, would produce difficulties and inconveniences vastly more injurious than that complained of. Such a rule would destroy the circulating capacity of bills, or drafts, or orders. The present act imposes the same stamp duty upon inland bills of exchange and promissory notes, but this is an accidental circumstance only. Suppose that the draft is made subject to a tax of five cents on the hundred dollars, and the note to a tax of ten cents on the hundred dollars. The defendant contends that a draft or bill drawn by one officer of a company upon another officer of the same company, is, in legal effect, a promissory note. Upon the supposition thus made, its real character would require a tax of twice the amount of that indicated upon its face, and if the stamp be too small, the instrument is absolutely void from its inception. In the language of the statute, it shall be 'deemed invalid and of no effect.'

Is every man to whom a paper in the form of a bill of exchange is presented, bound to inquire whether there are not outside circumstances that may affect its nature? Having ascertained this, is he bound to delay all proceedings until he can take legal advice upon its nature and character? This he must do upon the theory contended for, and he must be certain, also, that his advice is correct; otherwise he will lose the money he advances upon the bill. The same rule, it is contended, will apply where the drawee does not appear upon the face of the bill to be an officer of the company. Such is the case before us, where Mr. Canda, the drawee, does not appear upon the bill itself to be connected with the company, and yet the prosecution contends that it may be proved that he is its treasurer, and that thereupon the instrument ceases to be a draft or order for the payment of money, and becomes a promissory note.

That the rule contended for is impracticable in a commercial country is too obvious to require farther illustration. We are satisfied that the principles heretofore laid down must govern the case before us.

These views require that an answer in the negative should be given to each of the questions certified to this court. They are accordingly so answered, and the record must be returned to the court below with directions to

DISMISS THE INFORMATION.


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


text:
Author:Walter Leo Hildburgh

Works

 * Spanish Medieval Enamels (1936).
 * Spanish Medieval Enamels (1936).

Works about Hildburgh

 * Obituary – The Times: 28 November 1955 link

title: Author:Walter Leo Hildburgh


text:
Packet Company v. McCue

ERROR to the Circuit Court for the Eastern District of Wisconsin. The case was thus:

Patrick McCue was a common laboring man, living in Prairie du Chien, Wisconsin, and employed in the railroad warehouse in that place. On the evening of the 11th of July, 1868, the steamer War Eagle, owned by the Northwestern Packet Company, arrived at the landing in Prairie du Chien for the purpose of taking freight from the warehouse. Being short of hands, the mate of the boat went to the warehouse, and there employed McCue and four or five other persons to assist in carrying freight from the warehouse and putting it on board the boat. This employment continued about two hours and a half, at the end of which time McCue and the rest were told to go to 'the office' upon the boat (the packet company having no office on shore for the purpose of making such payments) and receive their pay.

They proceeded there accordingly, were paid, and then started to go ashore. As McCue was going ashore, the men on board the boat pulled in the gangway plank while he was on it. He was thus thrown down against the dock and injured, and a few days afterwards died from the injury thus received.

Hereupon Mary McCue, his widow and administratrix, brought suit in the court below, under a statute of Wisconsin, to recover damages for the injuries which he had sustained.

The marr. alleged that McCue had never before been, either generally or at intervals, a servant of the packet company, and that at the time when the injuries occurred and the cause of action accrued he was not so; but that contrariwise he had been employed by the company to work for it on this occasion alone, and 'for a short space of time, to wit, for the space of one hour;' that this time had elapsed; that the work had been done, and that McCue had been paid for it, and that after all this, and after the relation of master and servant had thus ceased, and McCue was attempting to get off the boat, and using due care, &c., 'the defendant and its agents then and there,' regardless of their duty, recklessly and without any reasonable cause, pulled in and from under his feet, &c., the gangway plank, &c., by which he fell and was injured, &c.

The defendant pleaded not guilty.

There was no doubt from the evidence that McCue was without fault, and that the injuries which caused his death were owing to the reckless carelessness of the servants of the packet company.

On the trial it appeared that McCue had before been occasionally employed by the packet company in the same way in which he had now been; but there did not seem to be any evidence that he was in their general employment: and this was the first time in the year 1868 in which he had been employed in this sort of work by the company.

The counsel of the packet company insisted, as the hiring was in the warehouse, as McCue had proceeded thence, as the freight was to be carried thence, and as the packet company had no office on shore or anywhere else than the office upon the boat, where McCue could be paid, that his relationship to his employers had not terminated by the simple fact of his getting his money at the office on the boat, but, on the contrary, continued until he got back to the warehouse, or at least and rather until he had got off the boat; that until such latter time he was the servant of the company, and that the injuries done to him having been done to him by his fellow-servants of the company he could not recover from their common master, the packet company.

The counsel of the company therefore requested the court to charge according to this view, and as matter of law upon the conceded facts that the plaintiff could not recover.

The court declined so to charge, and charged thus:

'McCue had been occasionally employed by the defendants' boats in the way in which he was in this instance; but there does not seem to be any evidence to show that he was in their general employment, and in this particular year it would appear that this was the first time he had been employed in this way, so that he was employed for a special purpose, which being accomplished, the agreement or contract ceased.

'The contract was made in the warehouse, the freight was there, the execution of the contract began there, and as soon as the last portion of the freight was carried on board of the boat, the contract terminated, unless, indeed, it continued because he was to be paid off and had the right to go ashore from the boat, and to be provided with the proper means of going ashore, so that in one sense it is true, I suppose, that the contract began on shore and was terminated by the act of going on shore by McCue.

'At the same time it may also be said that as soon as he did the last work he was required to do, and was paid off, that he was after that his own master with respect to the contract made between them; that then it was optional with him to do just as he chose.

'Therefore it will be left to the jury to say whether there was the relation of servant and principal or master, as between the deceased McCue and the defendant, at the time of the injury. And I am not now prepared to say, even if it were true that the relation of servant and master did subsist, that then the action could not be maintained, and I would like to have you find, gentlemen (inasmuch as it may be a material point, and of service hereafter), whether, as a matter of fact, there was or not a termination of the employment between the company and the deceased prior to or at the time of the injury. The counsel for the defendant insists that this is a question of law under the conceded facts; that, inasmuch as soon as McCue was paid off he immediately proceeded to go on shore and was in the act of going on shore, that constituted a part of the service. But as the court thinks, for the reason that as soon as paid off, McCue was his own master, and had the entire control and disposition of himself, to remain on board or go ashore, just as he pleased, in one aspect it may be said that the service was terminated. That question, however, the court leaves to the jury, and asks them to find what the fact is, from the evidence, on this point.

'Then, gentlemen, leaving the questions of fact to the jury, it will be for the jury to say under the evidence whether the plaintiff has made out his case as stated in the declaration. If the service was terminated and this injury was the result of the negligence of the servants of the defendant, then the plaintiff may recover.'

The jury having found a verdict of $2800 for the plaintiff, and judgment having gone accordingly, the packet company brought the case here on exceptions to the refusal to charge as requested, and to those parts of the charge within brackets, as given.

Mr. J. P. C. Cottrill, for the plaintiff in error (a brief of Mr. J. W. Cary being filed on the same side):

1. A master is not responsible to those in his employ for injuries resulting from the negligence of a fellow-servant engaged in the same general business; and this is so although the grades of the servants are different, and the person injured is inferior in rank and subject to the directions and general control of him by whose act the injury is caused. Neither is it necessary that the servants-the one that suffers and the one that causes the injury-should be at the time engaged in the same operation or particular work. It is enough that they are in the employment of the same master, engaged in the same common enterprise, both employed to perform duties and services tending to accomplish the same general purposes. This rule, in the full extent in which we state it, is one supported by authorities perfectly known to all. Its application to this case is plain, if the relationship of McCue was not terminated by the act of his receiving his pay at the office on the boat; the captain's office, we suppose.

2. It was not so terminated. The engagement with McCue was on shore. His relation of servant there made continued until be finally got back to shore. If not, what relation did he sustain to the owner of the boat between the moment that he got his pay and that in which he was in the act of finally going ashore? He was not a passenger. He was not a trespasser. Having lawfully entered upon the boat as a servant, and being required to leave it at the end of the service, he would still be a servant until he had finally quit the boat. One of the risks which he assumed in entering upon his employment was his passage over the gangplank, in going to and from the boat, in loading the freight. Can it be said that he did not assume this risk in passing over it, when finally leaving the boat, as much as he did at any other time when passing over the same plank, in the course of his employment? Those in charge of the boat were in duty bound to permit him to go ashore after he had finished carrying freight. They were bound to furnish him with the means of going ashore. And he was himself bound by the contract which he had made to go ashore. He could not have remained on the boat under the contract which he had made, and to have been entitled to remain there he would have been obliged to make some other contract. His contract of service, therefore, did not terminate until he got ashore.

3. The court left it to the jury to determine as a question of fact whether or not McCue, at the time he was injured, was a servant of the packet company; whether there was or not a termination of the employment between him and it prior to or at the time of the injury.

This was an error. The question was purely one of law. The facts were all undisputed and conceded. It was conceded that McCue was hired by the mate on shore to assist the crew in carrying freight from the warehouse to and upon the boat over the plank, and that he did so assist; that as soon as he deposited his last load of freight on the boat, he was directed to go to the office on the boat and get his pay; that he went and got his pay and immediately thereafter started to leave the boat by passing over the plank, and that while he was upon it, passing to the shore, it was hauled in by the crew and he was thrown against the dock and injured. It was further undisputed that the packet company had no office or place on shore for paying its servants, and that the only place for paying them was at the office on the boat. So of all the facts; all were undisputed and conceded. Now, on such a case, it was the duty of the court to determine as a question of law what the relation was existing between the packet company and McCue at the time he was injured, and it was error to leave this question to the jury.

Messrs. Matthew Hale Carpenter and G. W. Lakin, contra.

Mr. Justice DAVIS delivered the opinion of the court.

title: Packet Company v. McCue


text: Talk:Packet Company v. McCue

title: Talk:Packet Company v. McCue


text:
Packet Company v. McCue/Opinion of the Court

It is insisted on the part of the plaintiff in error that a master is not responsible to a servant for injuries caused by the negligence or misconduct of a fellow-servant engaged in the same general business. Whether this general proposition be true or not it is not necessary to determine in the state of this record. It is conceded, if the employment of McCue by the company terminated before the injury complained of was suffered, that the company is liable, and this the jury have found to be the fact.

But it is said it was the province of the court, and not the jury, to determine the point of time at which the service was ended; that as the facts were undisputed, it was a question of law, and the court should have told the jury the relation of master and servant subsisted when the accident happened.

We do not think so. One of the theories on which the suit was prosecuted was that McCue's special employment had ceased when he was injured. This theory was resisted by the defence, and the court, not taking upon itself to determine as an absolute proposition when the employment terminated, left it to the jury to find how the fact was. This ruling, in our opinion, was correct. It was for the jury to say, from the nature of the employment, the manner of engaging the hands, the usual mode of transacting such a business, and the other circumstances of the case, whether the service had or had not ceased at the time of the accident. The point was submitted fairly to the jury, with no more comments than the evidence justified. It was argued by the plaintiff in error that the employment of necessity terminated on the land, because it was there McCue was engaged to do the work, and he had the right to be provided with the proper means of reaching it from the boat. On the contrary, the defendant in error contended the special service ceased when McCue had finished his work and was paid off; that after this he was not subject to the control or direction of the officers of the boat, but at liberty to stay on the boat or go off as he pleased. The jury took this latter view of the relation of the parties, and we cannot say that they did not decide correctly. At any rate, their decision on a question of fact is not subject to review in this court. The defence at the best was a narrow one, and in our opinion more technical than just.

JUDGMENT AFFIRMED.

[See Railroad Company v. Fort, infra, p. 553.]


text: Talk:Packet Company v. McCue/Opinion of the Court


text:
Goodwin v. United States

APPEAL from the Court of Claims, in which court one Goodwin, who had chartered a schooner to the United States, at a fixed per diem, sought to recover the per diem during one hundred and forty-four days in which, under the circumstances hereinafter mentioned, the vessel had been detained by the marshal of the United States on a libel filed against her.

The Court of Claims dismissed his petition, and Goodwin took this appeal.

Mr. T. J. D. Fuller, for the appellants; Messrs. G. H. Williams and C. H. Hill, contra.

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

title: Goodwin v. United States


text: Talk:Goodwin v. United States

title: Talk:Goodwin v. United States