text:
Pennock v. Coe

THIS was an appeal from the Circuit Court of the United States for the northern district of Ohio.

The bill was filed in the Circuit Court by Coe, mortgagee of the road of the railroad company in trust, for securing the payment of its bonds, to enjoin the execution of a judgment recovered at law against the company by Pennock and Hart, two of the defendants.

The facts of the case are stated in the opinion of the court.

After the case was ready for a hearing, at September term, 1857, the Circuit Court passed the following decree:

'This cause came on to be heard upon the bill of the complainant, the joint answer of Joseph Pennock and Nathan F. Hart, the separate answer of the Cleveland, Zanesville, and Cincinnati Railroad Company, the replication to said answer, the exhibits and testimony, and the motion of said Pennock and Hart to dissolve the injunction heretofore allowed in this case, and was argued by counsel. On consideration whereof, the court do overrule said motion; and the entire facts in the case being before the court, and the arguments of the counsel upon the motion to dissolve said injunction embracing the entire merits of the case, the court do order, adjudge, and decree, that said injunction be made perpetual, and that the said Pennock and Hart be forever restrained from selling, or causing to be sold, by the marshal, the locomotives, tenders, and cars, mentioned in said bill, to satisfy the judgment recovered by them against said railroad company therein described.'

From this decree, Pennock and Hart appealed to this court.

It was argued by Mr. Stanton for the appellant, upon which side there was also a brief filed by Mr. Spalding and Mr. Parsons, and by Mr. Otis for the appellee.

The arguments upon the question whether the mortgage was void, on the ground of uncertainty as to the property described or attempted to be described therein, and conveyed to the mortgagee, are omitted from this report, inasmuch as the court did not think it necessary to decide that point. Upon the other and principal branch of the case, viz: whether the mortgage was good as conveying subsequently-acquired property, the views of the respective counsel were as follows, as also upon the point whether the railroad company were authorized to make the road which they did make.

The counsel for the appellants stated the law which governed the case to be the following:

The laws of Ohio authorizing railroad companies to borrow money and secure the payment of the same, are found in the 'act regulating railroad companies,' passed February 11, 1848, sec. 13, and in the 'act to provide for the creation of incorporated companies in the State of Ohio,' passed May 1, 1852, sec. 14.

See Swan's Revised Statutes of Ohio, pages 199 and 203.

To secure the payment of money borrowed, they 'may pledge the property and income of such company.'

The act to revive and amend an act to incorporate the Cleveland and Pittsburgh Railroad Company, passed March 11th, 1845, which is claimed to be the charter of the Cleveland, Zanesville, and Cincinnati Railroad Company, provides, in section six, that 'the said company, by its proper officers, duly authorized by the directors, is hereby authorized and empowered to mortgage, hypothecate, or pledge, all or any part of said railroad, or of any other real or personal property belonging to said company, or of any portion of the tolls and revenues of said company which may thereafter accrue, for the purpose of raising money to construct said railroad, or to pay debts incurred in the construction thereof.'

Local Laws of Ohio, vol. 43, page 401.

It is insisted, on the part of the appellants, that so much of the indenture, made between the Akron branch of the Cleveland and Pittsburgh Railroad Company and George S.C.oe, trustee, on the first day of April, 1852, as purports to put in pledge or mortgage 'future acquisitions,' is inoperative and void.

Yelverton v. Yelverton, Croke Elizabeth, 401.

Comyns Digest, Grant D., vol. 4, page 310.

Mogg v. Baker, 3 Mees. and Welsb., 195.

Jones v. Richardson, 10 Metcalf, 481.

Moody v. Wright, 13 Metcalf, 17.

Otis v. Sill, 8 Barbour S.C.. Rep., 102.

Rose v. Bevan, 10 Md., 466.

The railroad company had no authority, as a corporate body, to make a railway from 'Hudson to Millersburg,' and, as a necessary consequence, had no power to borrow money for that purpose. The charter only authorizes the construction of a railroad from Hudson, in Summit county, to Wooster, in Wayne county, or some other point in the Ohio and Pennsylvania railroad between Massillon and Wooster.

See Ohio Local Laws, vol. 49, page 468.

As the road is located, the southern terminus, according to the charter, would be Orville, in Wayne county, which is a point in the Ohio and Pennsylvania railroad between Massillon and Wooster, distant thirty-eight miles from Hudson.

Money was borrowed to make the road to Millersburg, in Holmes county, which is twenty-three miles south of Orville, where the road should have stopped under the charter.

'Corporate powers are never to be created by implication nor extended by construction.'

Penn. Railroad Company v. the Canal Commissioners, 21 Penn. State Rep., 9.

Stormfeltz v. the Manor Turnpike Co., 13 Penn. State Rep., 555.

East Anglian Railway Co. v. Eastern Counties Railway Co., 7 Eng. Law and Eq., 505.

Act regulating Railroad Mortgages in Ohio, Swan's Rev. Statutes, 241.

Coleman v. the Eastern Counties Railway Co., 4 Eng. Railway Cases, 382.

Perrine v. Chesapeake and Delaware Canal Co., 9 Howard's Rep., 172.

Inhabitants of Springfield v. Connecticut River Railroad Co., 4 Cushing, 63.

Logan v. Earl Courtown, 13 Beav., 22.

Green et al. v. Seymour et al., 3 Sandford's Chan. R., 285.

The Penn. &c. Co. v. Dandridge, 8 Gill and Johns., 248.

'Notes given by a corporation in violation of law are void.'

Mr. Justice McLean in Root v. Goddard, 3 McLean Rep., 102.

title: Pennock v. Coe


text: Talk:Pennock v. Coe

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title: Talk:Pennock v. Coe


text:
Page:United States Statutes at Large Volume 45 Part 1.djvu/1874

 Ifllpmollmqalioft Dittrict, contract Wlth\.., .for connection with La- . «UDA JJam, not modified by Boulder Canyon Project Act__ _ Imperila Volley, Colif., canal. :~bTarmstroBot (talk)t ~_~__~t~ I_ugurol Ceremoniu, 19B9, deficiency appropriation for expenses 01 Joint Congressional Committee_ for maintenance of order, etc______ _ allocation of space in publio buDdinga for troops attending, authorised_ I_uguration of the Pruidem, 19B9t amount authorized for expenses or Com- missioners to maintain order, ete., in connection with. ______ _ regulations for vehicles, licenses, etc., tobemade____________, ______. time of enforeing regulations, licenses, etc_________________________ _ penaltyfor violations. _. ________ _ amount for temporary public comfort stations, personal services, etc__ use permitted of reservations, etc., for the_________________________ _ designated streets, sidewalks, etc___ _ supervision 01 stands, etc.; removal, etc_________________________ _ overhead wires for illumination per- mitted______________________ _ supervision of erection, etc.; time limit for use, etc_____________ _ safety precautions to be taken _____ _ no Government or District expense __ loan 01 Army and Navy tents, t1agll, etc., for· decoration; time limit; in- demnity for loBS or damage____ _ Army hospital tents, appliances, etc.; mdemnity for damage, etc____ _ temporary telegraph, telephone, etc., overhead wires permitted _____ _ Incinerators o[ Combultible Reiuae, D. C. (see City Refuse, D. C.). Inrome T~ of 1918, Ame7Ulment8, deficiencies, in affiliated corporations, if notice has been mailed for years 1922-1927, to a corpora- tion, suspension of statutes of limitations applies to corpora- tion with oonsolidated return En&de_______________________ _ for 1921 and prior years________ _ in all cases, if limitation period not expired _____________________ _ extension of time for payment of, in exceptional cases_____________ _ prompt aasessment, etc., to be granted within one year after written re- quest of executor, fiduciary, etc_ application to corporation intending dissolution, or completed______ _ request to be filed after enactment of Revenue Act of 1928 _________ _ auspension of running of statute of limitations on &8BeBSments and collections, during prohibited period______________________ _ until decision of Board becomes final, and 60 days after _______ _ applicable, if period not expired __ in transferee cases, the same ______ _ waivers for aasessments, after expiration of period of limitation ________ _ INDEX cxxiii 1063 1057 1608 1629 1261 1146 1146 1146 1147 1147 1140 1140 1140 1140 1140 1141 1141 1141 1141 1141 869 869 869 869 869 869 869 870 870 870 870 870 Inrome T~ 011916, Amlfldmem. --con. waivers for aasessments; by written COn- sent of Commisaioner and tax- payer, at any time before the as- sessment ____________________ _ after aaaeasment made, by agreement in writin~ for erlending collec- tion of mcome t..u, by court action ______________________ _ further extension_______________ _ agreements entered into before Jan- uary I, 1929, valid ___________ _ validity of prior, not affected______ _ credit or refund to taxpayer if overpay- ment instead of deficiency, found byBoard__~ _______~ ___ _ time limit for filing claim, or petitioD_ Inrome T~, 7'itlBl,RevenuB Acto! 19t8z applicable to 1928 and succeeding r ears -- - - preVIous years not affected.. ___ ___ _ _ use of croBS referencea ____________ _ classifications of provisioDL _______ _ application to special claasea of tax- payers in Supplements________ _ normal tax on income of individual __ _ one and one-half per cent on firat $4,000______________________ _ three per cent on next $4,000_____ _ five per cent on remainder in exceBS __ surtax in addition to _____________ _ sales of mines and oil and gas wells _______________________ _ capital net gain and IOBS ________ _ accumulations by corporations, to avoid paying, by stockholders __ corporationtax ____________________ _ exempt corporations______________ _ accumulating surplus to avoid sur- tsx ________________________ _ for periods embracing years with differ- entlaws____________________ _ net income defined: basis for oomputing groBB income defined; sources included_ exclusions from gross income; income from life insurance policies____ _ annuities, transfers of, etc_________ _ value 01 gifts, bequests, etc_______ _ interest OD State and Territorial bonds ______________________ _ farm loan bonds _______________ _ Federal, etc., securities _________ _ statement required in returns____ _ limitation on Liberty bonds, etc__ amount received for personal injury or sickneBS __________________ _ as World War Compensation pay- ments: or pensions ___________ _ from d.o~eati" !>u~diilg and loan &B8OCl&tiOD8; limlt____________ _ rental,! for dwellings furnished to nunwters___________________ _ earned income from sources without the United States____________ _ salaries of Territorial employees___ _ income of foreign governments_____ _ States, municipalities, etc_______ _ receip.ts .of shipowners mutu&.l 8880- Cl8tlons ____________________ _ dividends from China Trade cor- porations ___________________ _ inventories may be taken to determine income _____________________ _ distributions by corporations ________ _ Pap. 870 870 870 870 871 871 871 795 795 795 795 795 795 795 795 795 796 797 797 797 797 797 797 797 797 797 797 797 798 798 798 798 798 798 798 798 798 798 798 798 798 799 799 799 799 799

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text:
Pennock v. Coe/Opinion of the Court

McGintry v. Reeves, 10 Ala., 137.

Commonwealth v. the Fire and Northeast R. R. Co., 27 Penn. State Rep., 339.

Peavy v. the Calais R. R. Co., 30 Maine Rep., 498.

A right cannot be claimed by a corporation under ambiguous terms.

Mr. Justice McLean in Charles River Bridge Case, 11 Peters, 559.

With respect to that point of the case which related to the power of the company to make the road in question, Mr. Otis, counsel for the appellees, cited and commented on the following statutes of Ohio:

1836, March 14; 1845, March 11.

1851, February 19; 1850, February 21.

1846, February 26; 1846, March 2.

1848, February 18; 1848, February 24.

1847, February 8; 1849, March 12.

It would occupy too much room to follow him through the examination of them all.

With respect to the other point, his argument was as follows:

That the mortgage to Coe is a lien upon the machinery and cars levied upon, though the same were not in existence at the time said mortgage was executed, and though the same did not become a part of the road, by accession, when placed upon it.

For the purpose of this argument, I am willing to admit it to be the general rule of the common law, that nothing can be mortgaged which is not in existence and does not belong to the mortgagor at the time the mortgage is executed.

This proposition is fully established by the following authorities.

Winslow v. Merchants' Ins. Co., 4 Met., 306.

Jones v. Richardson, 10 Met., 481.

Lunn v. Thornton, 1 M. G. and S., 379.

Otis v. Sill, 8 Barb., 102.

But these very authorities also establish the fact that this rule is founded solely upon a technicality. A mortgage is a sale upon condition; and, as before stated, by the rule of the common law there can be no sale of a thing not in existence, and which is not at the time the property of the seller.

The rule of the civil law is the very reverse of that of the common law in this particular, and is thus stated by Domat:

'Those who bind themselves by any engagement whatsoever may, for the security of their performance of the engagement on their part, appropriate and mortgage, not only the estate they are masters of at the time of contracting, but likewise all the estate which they shall be afterwards seized or possessed of. And this mortgage extends to all the things which they shall afterwards acquire, that are capable of being mortgaged, by what title soever it be that they acquire them, and even to those which are not in being when the obligation is contracted; so that the fruits which shall grow upon the lands will be comprehended in the mortgage of an estate to come.'

1 Domat, (Cushing's ed.,) 649, art. 5.

'Although the mortgage be restrained to certain things, yet it will nevertheless extend to all that shall arise or proceed from that thing which is mortgaged, or that shall augment it and make part of it. Thus, the fruits which grow on the lands that are mortgaged are subject to the mortgage while they continue unseparated from the ground. Thus, when a stud of horses, a herd of cattle, or a flock of sheep, is put in pawn into the creditor's hands, the foals, the lambs, and other beasts which they bring forth, and which augment their number, are likewise engaged for the creditor's security. And if the whole herd or flock be entirely changed, the heads which have renewed it are engaged in the same manner as the old stock. Thus, when the bounds of a piece of ground that is mortgaged happen to be enlarged by that which the course of a river may add to it, the mortgage extends to that which has augmented the ground. Thus, a house that is built on a ground which is mortgaged, is subject likewise to the mortgage. And if, on the contrary, a house be mortgaged, and it perishes by fire, or falls through decay, the mortgage will subsist on the ground where the house stood. Thus, when a debtor mortgages a piece of ground of which he had only the bare property, another enjoying the usufruct of it, when the said right to the usufruct comes to be extinct, the mortgage will comprehend the ground with the fruits.'

Ib., 650, art. 7.

There is, therefore, no inherent difficulty in making a mortgage which shall extend to after-acquired property, or property not in esse. And courts of equity which are not trammelled by the technical rules of the common law in the administration of justice, both in England and in this country, uphold such mortgages, in pursuance of the rule of the civil law, when necessary to carry into effect the honest and just contracts of parties according to their real intentions.

Fonblanque, B. 1, ch. 4, sec. 2.

Ib., ch. 5, sec. 8.

1 Powell on Mort., 190.

Coote on Mort. Law, Lib. ed., 185.

Noel v. Burley, 3 Simons, 103.

Metcalf v. Archbishop of York, 1 Myl. and Cr., 553.

Langton v. Horton, 1 Hare, 539.

Matter of Howe, 1 Paige, 125, 129.

White v. Carpenter, 2 Paige, 217, 266.

Abbot v. Gordon, 7 Shepley, 408.

Foreman v. Proctor, 9 B. Mon., 124.

Jenke's Adm. v. Goffe, 1 R. I. Rep., 511.

Field v. the Mayor of New York, 2 Seld., 179, 186.

Winslow v. Mitchell, 2 Story, 630.

Story Eq. Jur., secs. 1040, 1040 b, 1055.

On page 644 of the case of Winslow v. Mitchell, above cited, Judge Story states the rule to be, 'that wherever the parties, by their contract, intended to create a positive lien or charge, either upon real or upon personal property, whether then owned by the assignor or contractor or not, or if personal property, whether it is then in being or not, it attaches in equity as a lien or charge upon the particular property, as soon as the assignor or contractor acquires a title thereto, against the latter, and all persons asserting a claim thereto, under him, either voluntarily or with notice, or in bankruptcy.'

And the particular question raised in this case has been determined in the following cases.

Willinck v. the Morris Canal Co., 3 Green's Chy., 377.

Pierce v. Emery, 32 N. H. Rep., 484.

Seymour v. Canandaigua and Niagara Falls R. R. Co., 25 Barb., 286.

Farmers' Loan and Trust Co. v. Hendrickson, ib., 484.

Philips & Jordon v. Winslow, Trustee, &c., (Kentucky) Court of Appeals,) 2 Weekly Law Gazette, 4.

Ludlow v. Hurd et al., (Superior Court of Cincinnati,) 6 Am. Law Reg., 493.

I also refer to the opinion of Judge McLEAN, pronounced in the case at bar, in the Circuit Court, reported in 6 Am. Law Reg., 27.

Mr. Justice NELSON delivered the opinion of the court.

This is an appeal from a decree of the Circuit Court of the United States for the northern district of Ohio.

The bill was filed in the court below, by Coe, mortgagee of the road of the railroad company, in trust, for securing the payment of its bonds, to enjoin the execution of a judgment recovered at law against the company, by Pennock and Hart, two of the defendants.

The facts of the case are these: The Cleveland, Zanesville, and Cincinnati Railroad Co., created a body politic and corporate by the laws of Ohio, to make a railroad between certain termini in that State, in pursuance of authority conferred by law, issued bonds to the amount of $500,000, payable ten years from date, with interest at the rate of seven per cent., payable semi-annually, on the first day of April and October in each year, and, to secure the payment of the same, executed a mortgage of the railroad and its equipments to the complainant, in trust for the bondholders, the description of which is in the words following: 'All the present and future to be acquired property of the parties of the first part; that is to say, their road, made or to be made, including the right of way, and the land occupied thereby, together with the superstructure and tracks thereon, and all rails and other materials used therein, or procured therefor, with the above-described bonds, or the money obtained therefor, bridges, viaducts, culverts, fences, depots, grounds and buildings thereon, engines, tenders, cars, tools, machinery, materials, contracts, and all other personal property, right thereto, or interest therein, together with the tolls, rents, or income, to be had or levied therefrom, and all franchises, rights, and privileges, of the parties of the first part, in, to, or concerning the same.' 'At the time of the issuing of these bonds, and the execution of the mortgage, the railroad was in the course of construction, but only a small portion of it finished. It was constructed and equipped almost entirely by means of the funds raised from these bonds, together with a second issue to the amount of $700,000. The road cost upwards of $1,500,000. The stock subscribed and paid in, amounted only to some $369,000.

The mortgage securing the payment of the second issue bears date the first of November, 1854, and was made to one George Mygatt, in trust for the bondholders, and the property described in and covered by it is the same as that described in the first mortgage. The road was finished to Millersburg, its present terminus south, in May, 1854, and the whole of the rolling stock was placed on it previous to the date of the second mortgage. This stock was purchased and placed on the road from time to time, as the locomotives and cars were needed in the progress of its construction.

The mortgage to the complainant contained a covenant on the part of the company, that the money borrowed for the construction and equipment of the road should be faithfully applied to that object, and that the work should be carried on with due diligence until the same should be finished.

In case of default in the payment of the principal or interest of the bonds, the trustee was empowered to enter upon and take possession of the road, or, at the election of a moiety of the bondholders, to sell the same at public auction, and apply the proceeds to the payment of the bonds.

The defendants, Pennock and Hart, being the holders of sixteen of the bonds issued under the second mortgage, recovered a judgment on the same, May, 1856, against the railraod company issued execution, and levied on a portion of the rolling stock of the road, and caused the same to be advertised for sale.

This bill was filed to enjoin the sale, and a decree was rendered perpetually enjoining it in the court below, which is now before us on appeal.

The first two grounds of objection taken to this decree may be considered together. They are: 1, that the mortgage to the trustee of the 1st April, 1852, is void or inoperative, as respects the locomotives and cars which were levied on under the execution of the defendants, inasmuch as they were not in existence at the date of it, but were constructed and placed on the road afterwards, being subsequently-acquired property of the company. And, 2, that the mortgage is void, on the ground of uncertainty as to the property described or attempted to be described therein and conveyed to the mortgagee. The description begins by conveying 'all the following present and future acquired property of the said parties of the first part;' and after specifying the road and the several parts of it, together with the rolling stock, there is added, 'and all other personal property, right thereto, and interest therein.' This clause, probably, from the connection in which it is found, was intended to refer to property appurtenant to the road, and employed in its operation, and which had not been enumerated; and if so, the better opinion, perhaps, is, that it would be bound by the mortgage even as against judgment creditors.

But it is unimportant to express any opinion upon the question, as the property in this case (the locomotives and cars levied on are articles specifically enumerated; and the only uncertainty existing in respect to them arises out of their nonexistence at the date of the mortgage. An uncertainty of this character need not be separately examined, as it will be resolved by a consideration of the first question, which is, whether or not the after-acquired rolling stock of the company placed upon the road attaches, in equity, to the mortgage, if within the description, from the time it is placed there, so as to protect it against the judgment creditors of the railroad company?

If we are at liberty to determine this question by the terms and clear intent of the agreement of the parties, it will be found a very plain one. The company have agreed with the bondholders, (for the mortgagee represents them,) that if they will advance their money to build the road, and equip it, the road and equipments thus constructed, and as fast as constructed, shall be pledged as a security for the loan. This is the simple contract, when stripped of form and verbiage; and, in order to carry out this intent most effectually, and with as little hazard as possible to the lender, the company specially stipulate that the money thus borrowed shall be faithfully applied in the construction and equipment of the road. And in further fulfilment of the intent, the company agree, that in case of default in the payment of principal or interest, the bondholders may enter upon and take possession of the road, and run it themselves, by their agents, applying the net proceeds to the payment of the debt.

The bondholders have fulfilled their part of the agreement they have advanced the money on the faith of the security; the company have also fulfilled theirs-they have made the road and equipped it; it has been partially in operation since January, 1852, and in operation upon the whole line since May, 1854. The road, therefore, as described in the mortgage, from Hudson to Millersburg, and which was in the course of construction at the date of the instrument, has been finished, and the rolling stock, locomotives, tenders, and cars, also described in it, and which were to be afterwards acquired, have been brought into existence, and placed upon it-all in conformity with the agreement of the parties; and the question is, whether there is any rule of law or principle of equity that denies effect to such an agreement.

The main argument urged against it is founded upon the maxim, that 'a person cannot grant a thing which he has not:' ille non habet, non dat; and many authorities are referred to at law to prove the proposition, and many more might have been added from cases in equity, for equity no more than law can deny it. The thing itself is an impossibility. It may, at once, therefore, be admitted, whenever a part undertakes, by deed or mortgage, to grant property, real or personal, in presenti, which does not belong to him or has no existence, the deed or mortgage, as the case may be, is inoperative and void, and this either in a court of law or equity.

But the principle has no application to the case before us. The mortgage here does not undertake to grant, in presenti, property of the company not belonging to them or not in existence at the date of it, but carefully distinguishes between present property and that to be afterwards acquired. Portions of the road had been acquired and finished, and were in operation, when the mortgage was given, upon which it is conceded it took effect; other portions were acquired afterwards, and especially the iron and other fixtures, besides the greater part of the rolling stock.

The terms of the grant or conveyance are: 'all present and future to be acquired property, of the parties of the first part;' that is to say, 'their road, made or to be made, and all rails and other materials, &c., including iron rails and equipments, procured or to be procured,' &c. We have no occasion, therefore, of calling in question, much less denying, the soundness of the maxim, so strongly urged against the effect of the mortgage upon the property in question, as its force and operation depend upon a different stated of facts, and to which different principles are applicable. The inquiry here is, not whether a person can grant in presenti property not belonging to him, and not in existence, but whether the law will permit the grant or conveyance to take effect upon the property when it is brought into existence, and belongs to the grantor, in fulfilment of an express agreement, founded on a good and valuable consideration; and this, when no rule of law is infringed or rights of a third party prejudiced? The locomotives and cars were all placed upon the road as early as February, 1854, when, at the furthest, the mortgage attached to those in question, according to its terms, if at all, and the judgment of the defendants was not recovered till May, 1856.

We think it very clear, if the company, after having received the money upon the bonds and given the mortgage security, had undertaken to divert the fund from the purpose to which it was devoted, namely, the construction of the road and its equipment, and upon which the security mainly depended, a court of equity would have interposed, and enforced a specific performance. One of the covenants was, that the money should be faithfully applied to the building and equipment of the road; or if, after the road was put in operation, the company had undertaken to divert the rolling stock from the use of the road, a like interposition might have been invoked, and this in order to protect the security of the bondholders. And if a court of equity would thus have compelled a specific performance of the contract, we may certainly with confidence conclude that it would sanction the voluntary performance of it by the parties themselves, and give effect to the security as soon as the property is brought into existence.

The case of Langton v. Hasten (1 Hare's Ch. R., 549) supports this view. The mortgage security in that case was the assignment of the ship Foxhound, then on her voyage to the South seas, together with all and singular her masts, &c., 'and all oil and head matter, and other cargo, which might be caught or brought home on the said ship, on and from her then present voyage.' The cargo was levied on by a judgment creditor on the arrival of the ship at home. A bill was filed to have the mortgage declared a good and valid security for the moneys advanced, and that the complainants be entitled to the benefit of the security, in preference to the judgment creditor.

The vice chancellor, in giving his opinion, observed: 'Is it true that a subject to be acquired after the date of contract cannot, in equity, be claimed by a purchaser for value under that contract?'

And, in answer to the question, he said: 'It is impossible to doubt, for some purposes at least, that by contract an interest in a thing not in existence at the time of the contract may, in equity, become the property of the purchaser for value.' And, after reviewing the cases in the books, he concludes: I cannot, without going in opposition to many authorities which have been cited, throw any doubt upon the point that Bixnie, the contracting party, would be bound by the assignment to the plaintiffs.'

There are many cases in this country confirming this doctrine, and which have led to the practice extensively of giving this sort of security, especially in railroad and other similar great and important enterprises of the day. (2 Selden R., 179; 3 Green Ch. R., 377; 32 N. H. Rep., 484; 25 Barb., 286; ib., 284; 18 B. Munro, 431; Redfield on Railways, 590, and note; 2 Story R., 630; 7 Jurist, 771; Tapfield v. Hillman.)

In the case of Tapfield v. Hillman, Tindall, Ch. J., seems inclined to the opinion that, even at law, a mortgage security of future acquisitions might have effect given to it, if the terms indicated an intent to comprehend them.

The counsel for the appellee referred to the case of Chapman v. Weimer & Steinbacker, (4 Ohio R., 481,) as denying effect to a mortgage upon after-acquired property. But that was a case at law; and even there the court held that the mortgage attached after the property was acquired, from the time the right was asserted by the mortgagee.

In conclusion upon this point, we are satisfied that the mortgage attached to the furture acquisitions, as described in it, from the time they came into existence. As to the claim of the judgment creditors, there are several answers to it.

In the first place, the mortgage being a valid and effective security for the bondholders of prior date, they present the superior equity to have the property in question applied to the discharge of the bonds. It is true, if the property covered by the mortgage constituted a fund more than sufficient to pay their demands, the court might compel the prior encumbrancer to satisfy the execution, or, on a refusal, the mortgage having become forfeited, compel a foreclosure and satisfaction of the bond debt, so as to enable the judgment creditor to reach the surplus. Or the court might, upon any unreasonable resistance of the claim of the execution creditor, or inequitable interposition for delay, and to hinder and defeat the execution, permit a sale of the rolling stock sufficient to satisfy it. But no such ground has been presented, or could be sustained upon the facts before us. On the contrary, it cannot be denied but that the whole of the property mortgaged is insufficient to satisfy the bondholders under the first mortgage, much less when those under the second are included. To permit any interference, therefore, on the part of the judgment creditors, with a view to the satisfaction of their debt, consistent with the superior equity of the bondholders, would work only inconvenience and harm to the latter, without any benefit to the former. (3 Hare's Ch. R., 416; 9 Georgia R., 377; Redfield on Railw., 506; 5 Ohio R., 92.)

In the second place, the judgment sought to be enforced by the defendants was recovered upon bonds of the second issue, and secured, in common with all the bonds of that issue, upon this property, by virtue of the second mortgage. These bondholders have a common interest in this security, and are all equally entitled to the benefit of it; and in case of a deficiency of the fund to satisfy the whole of the debt, in equity, a distribution is made among the holders pro rata. The payment of the bonds of the second issue are also postponed until satisfaction of the issue comprehended within the first mortgage, as the second was taken with a full knowledge of the first. To permit, therefore, one of the bondholders under the second mortgage to proceed at law in the collection of his debt upon execution would not only disturb the pro rata distribution in case of a deficiency, and give him an inequitable preference over his associates, but also have the effect to prejudice the superior equity of the bondholders under the first mortgage, which possesses the prior lien.

As the judgment creditors can have no interest in the management or disposition of the property, except as bondholders, on account of the deficiency of the fund, it is unimportant to inquire whether or not the court was right in regusing a receiver, or to direct a sale of the road with a view to a distribution of the proceeds. For aught that appears, the road has been managed, under its present directors, with prudence and fidelity, and to the satisfaction of the bondholders, the parties exclusively interested.

Another objection taken to the validity of the mortgage is, the want of power under the charter to construct the road from Hudson to Millersburg, and consequently to borrow money and pledge the road for this purpose. There is certainly some obscurity in the statutes creating this corporation as to the extent of the line of its road; but we agree with the court below, that, upon a reasonable interpretation of them, the power is to be found in their charter. They were authorized to construct the road from some convenient point on the Cleveland and Pittsburgh road, in Hudson, Summit county, through Cuyahoga Falls, and Akron, to Wooster, or some point on the Ohio and Pennsylvania railroad, between Massillon and Wooster, and to connect with said Ohio and Pennsylvania road, and any other railroad running in the direction of Columbus. It was clearly not limited, in its southern terminus, to its connection with the Ohio and Pennsylvania road, for there is added, 'and any other railroad running in the direction of Columbus.' The extension of the road to the Ohio Central road at Zanesville, or at some other point on this road, comes fairly within the description.

We have not referred particularly to the authority of the company, under the statute laws of Ohio, to borrow money and pledge the road for the security of the payment, as no such question is presented in the brief or was made on the argument. Indeed, the authority seems to be full and explicit.

Decree below affirmed.

title: Pennock v. Coe/Opinion of the Court


text:
Page:United States Statutes at Large Volume 45 Part 1.djvu/1875

 CXXJ.V Income Paz, Title 1t R~ue Act oJ 19B8- Continuea. determination of gain or loss on sales of property__ •••.•••• .••••. .• computation of gross income from sources within and without the United States•.• .•• ..• .. __ . __ deductions in computing net income; business expenses, including traveling, etc_ •••• __ _ • L ______ • interest on debts••••••••• ________ _ taxes; exceptions_________________ _ accrual of estate, etc. z tax _______ _ tax of shareholder paia by the cor· poration ____________________ _ losses in trade or business_________ _ not connected with trade or busi· ness ________________________ _ casualty losses not connected with business ____________________ _ losses by corporations ____________ _ basis for determining___________ _ disallowance of loss on sales of securities ___________________ _ net losses for prior years__________ _ worthless debts__________________ _ exhaustion, etc., of business prop- erty; real estate in life tenancy; property in trust_____________ _ depletion in mines, oil and gas wells, timber, etc__________________ _ leases held in life tenancy, prop- erty in trust. ___ ___ ___ ___ ___ _ basis for determining depletion, etc_________________________ _ gifts for public use; corporation, etc., for religious, sClentific, etc., pu~es- vocatIOnal rehabilitation fund ___ _ War veterans' associations, etc•• _ fraternal lodges, etc_______ • ___ ._ limit, etc.; unlimited deductions__ allowance for reserve for future lia- bilities, etc.; under contract of casual sales of real property__ ._ dividends from corporations, domes- tic___________ •• _____ • __ •• __ _ foreignl condition______________ _ from \.ibiDa Trade corporations, etc., excluded _____________ • __ amount transferred to pension trust byemployer________________ _ items not deductible in computing net income; personal expenses____ _ property betterments; restoring prop- erty___ • ____________________ _ premiums on life insurance for em- ployees _____________________ _ amountsfrom life orterminable inter- ests, acquired by gifts, etc ____ _ tax realized on tax free covenant bonds____________________ • __ _ credits allowed for normal tax of indi- viduals; dividends from domestic corporations_________________ _ foreign corporations havinK.more than fifty per cent from United States sources __________ - _- _-- from China Trade corporations excepted____________________ _ interest on Federal securities __ • __ _ _ personal exemption of $1,500 for a single person _______. __ _ _ _ __ -- $3,500 for head of a family, hus- band and wife living together__ _ INDEX. 799 799 799 799 799 799 799 800 800 800 800 800 800 800 800 800 800 800 800 800 801 801 801 801 801 801 801 802 802 802 802 802 802 802 802 802 803 803 803 803 Income Taz, Tiae 1, Revenue Act oJ 1988- COntinued. credits allowed for normal tax of indi· viduals; personal exemption of additional $400 each for minora Bta d~rr,!~u.-f~;·c~it·of dependent___ • _______________ _ computation on change of taxable year~••• _________________ •• __ allowance for death in taxable year_ credits allowed corporations; interest on Federal securities___ • ____ • __ domestic corporations; specific of $3,000, if net income less than $25,000. ______ . _____________ _ limitation, if exceeding $25,000_ ._ credits against tax__________________ • "earnedjncome" means wages, etc., for personal services; allowed if combined with capital for busi- ness_. ______________________ _ "earned income deductions" means ~educti?ns allowed for comput- Ing net Incomes______________ _ "earned net income" means excess over deductioIl.. ___ ___ __ ___ ___ _ allowance of, for amount of earned income______________________ _ extent of, for taxes of foreign coun- tries,etc____________________ _ taxes withheld at source__________ _ erroneous payments______________ _ for fiscal year beginning in 1927 and ending in 1928_______________ _ accounting period and methods______ _ net income computed on basis of annual accounting period____________ _ on calendar year, if no accounting period ______________________ _ deductions and credits for taxable year in which paid or accrued, or paid orincurred__________________ _ dealers in personal property on install- ments, on payments annually received _____________________ _ returns from casual sales of personalty or of realty__________________ _ computation of income on change to installment basis_____________ _ recognition of gain or loss on dis- posal of installment obligations_ basis of computing_____________ _ allocation of income and deductions, if same interests control one or more businesses ______________ _ on change of accounting period, net income based on new period. __ _ returns for short period when account- ingperiodchanged __ •• __ __ _ • __. income computed on period of separate returns__________ • __ _ _ computation of taxable income___ _ application of capital gain or loss, onearnedincome. ___ • ___ • ___ _ reduction of personal credits for fractions of a year._. _ __ ••••• __ definition of "taxable year;" first taxable year 1928. ___ . _ ... __ - "paid or incurred," and "paid or accrued" _. ___ ___ ___ ••••• __ _ • returns and payment of tax•• _______ _ individuals to make sworn return of gross income, deductions, and credits______ • _•• _____ • ______ _

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text: Talk:Pennock v. Coe/Opinion of the Court


text:
Page:United States Statutes at Large Volume 45 Part 1.djvu/1876

 IfJl:mne Ta, Title 1, Revenue Act 0/ 1918- Continued. individuals to make sworn return of gross income; ifincomeSl,500orover, if single ____________________ _ $3 500 or over, if married and living with husband or wife ___ _ gross incom9 of $5,000 or over_____ _ husband and wife living together with income of $3,500 or over; separate or joint_____________ _ by agent, etc., of persons under dis- ability~ _____________________ _ by fjduciaries.. ___________________ _ corporation returns, specific require- ments; by receivers, trustees, etc_________________ ~ _____ - - - collection of tax________________ _ consolidated returns of affiliated ___ _ filing of returns; time for ___________ _ extensions_____________________ _ by individuals to collector of dis- trict; Baltimore ______________ _ by corporations, in district where office located; Baltimore ______ _ records to be kept by taxpayers _____ _ special statements to determine tax__ information at source ___________ _ open inspection of returns, 88 in Reve- nue Act of 1926______________ _ payment of tax on designated date___ _ installments allowed ______________ _ whole amount on failure to pay__ _ extension of time on request_________ _ payment on expiration__________ _ pnor to prescribed date allowed ____ _ jeopardy payments_______________ _ tax withheld at source ____________ _ fractions of a cent disregarded _____ _ receipts on request _______________ _ eVidence of tax paid____________ _ surrender to creditor 88 payment ondebt_____________________ _ returns to be examined and tax to be determined 88 soon 88 practi- ca~e _______________________ _ addition to tax, see Supplement M ___ _ criminal penalties, see in Section 146 ________________________ _ administrative proceedings; de~ciency assessment, Supplement L ____ _ interest on, additk'n to tax, Supple. - ment M ____________________ _ claims against tran,,;erees and fidu- ciaries, Supplement N ________ _ overpayment, Supplement 0 ________ _ all revenutllaws made applicable _____ _ regulations to be prescribed and pub- lished ______________________ _ table of taxes in lieu of taxes under 1926,Aet____________________ _ short title "Income Tax of 1928" ____ _ effective on enactment; exceptions___ _ tax in case of capital net gain _______ _ cap.ital net loss_,. - __ - ; __ __ _ ~-;;- meamng of terms; capital gam ____ _ "capital loss" ___________________ _ "capital deductions" _____________ _ "capital net gain" _______________ _ "capital net loss " ________________ _ "ordinary net income" ___________ _ "capital assets" _________________ _ property not included __________ _ property received on exchange___ _ period of property holder_______ _ stock received on reorganization__ INDEX. cxxv l'ap. 807 807 807 808 808 808 808 808 808 808 808 808 808 808 808 809 809 809 809 809 809 809 809 809 809 809 809 810 810 810 810 810 810 810 810 810 810 810 810 811 811 811 811 811 811 811 811 811 811 811 812 812 812 812 I n«nne Ta:e, Titl6 11 lUueftve Act oj 19S8- Continuea. collection and payment of tax on net gain and net loss_____________ _ sales of min6.l!, and.oil or gas wells, tax , on selling pnce ______________ _ limit on 12~ per cent rate of tax___ _ exemption of tax on corporations____ _ labOr, agricultural, etc., organiza.- tions _______________________ _ mutual savings banks____________ _ fraternal beneficiary societies_____ _ domestio buildinr; and loan associa.- tions_____ ~ ________ • ________ _ mutual cemetery companies_______ _ corporations"communitr. chests, etc., for religious, scientific, etc., pur- poses _______________________ _ business leagues__________ ., . __ _ _ __ _ civic leagues, employees' associations, etc_________________________ _ r~e:iumeclce:- mutual-diich: etc., companies ______________ _ farmers mutual insurance companies_ cooperative association of farmers, etc., for marketing their prod- ucts________________________ _ purchasing supplies and equipment for members_________________ _ capital stock associations re- stricted_____________________ _ limitation on marketing products of nonmembers ______________ _ organizations by exempt associations for financing crop products of members ____________________ _ restrictions 88 to dividend rate of stock; reserve allowed ________ _ trustees for exempted <?rganization __ Federal loan banks, farm loan asso- ciations, intermediate .. credit banks______________________ _ voluntary employees beneficiary as- sociation for life, accident, etc., benefit _____________________ _ teachers retirement fund associ&- tions _____ ~ _________________ _ tax OD income of corporations accumu- lating gains, etc., to avoid BUrtax on its shareholders___ ~ _______ _ additional to corporation tax_____ _ evjdence of p,urpose of evasion_____ _ meaning of •net income" 88 used__ _ additional ·tax not applicable if distributive share mcluded in income of shareholders________ _ subsequent distribution exempt__ _ computation of tax for period beginning in one calendar year and ending in the following ______________ _ computation of net income__________ _ basis of determining gain or loss an disposal of property__ .. _______ _ com1=-:~0~:_~!01:15, 25 September 2010 (UTC)_~_~: deductions on exchangeof property; limitation___________________ _ if acquired before March 1, 1913__ in case of stock________________ _ amount realized on sale of property_ determination of gain or 1088 ______ _ installment sales _______________ _ recognition of entire gain or loss on !!ales or exchange of property__ 812 812 812 812 812 812 812 812 813 813 813 813 813 813 813 813 813 813 814 814 814 814 814 814 814 814 814 815 815 815 815 815 815 815 815 815 816 816 816 816 816 816

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text:
Page:United States Statutes at Large Volume 45 Part 1.djvu/1877

 cxxvi lfU»mfJ TID, Tide II BflIIfJftU41Act 0/19.8- Continuea. no gain or loss on exchanltl for similar__. for similar stock in same corporation_ stock received for stock on reorgani- zation ______________________ _ property for stock of party to re- organisation __________ .. __ __ _ _ transfers for stock 01 corporation under same controL _________ _ gain from exchanges not solely in kind __ ~ ____________________ _ for property received additional to that on which gain recognized __ reorganization distribution consid- ered as taxable dividends_____ _ reorganization with property and nther stock received__ ~ ____ ~ __ _ no ~n if distributed!ln organiza- tion _____ ~ __________________ _ gain recognized if not distrihuted__ no loss if property received other than that on which gain or loss recog- nized_________________ ~ _____ _ no gain or loss for involuntary conver- sion into similar property_____ _ gain recognized on part not used __ _ no gain if additional stock received on reorganizatian, and holding not surrendered _________________ _ stock distributed on reorganization not construed as earnin~, etc_____ _ definition of "reorganization"; corpo- ration acts constituting_______ _ corporations i~clu~ed"as "a party to a reorgaDlzation _____________ _ ownership of stock constituting con- troL _______________________ _ basis for determining gain or loss____ _ property acquired after February 28, 1918, the cost thereof________ _ inventoryvalu8________________ _ value of gifts after December 31, 1920; ascertainment _________ _ trust property acquired after De- cember 31, 1920, value as in hand of grantor _____________ _ gifts or trusts before December 31, · 1920, fair market Talue_______ _ property acquired by bequest, etc., for fair market ValU8 _________ _ transfer. in tI'ud with right of revo- cation ______________________ _ property acquired on exchanges; partly by exchange and other property____________________ _ stock issues as consideration, ex- cepted______________________ _ property other than stock acquired by same corporation after December 31,1917____________________ _ not applicable to stock issues___ _ acquired after December 31,1920, on reorganisation and same party in controL___________ ,.. _ stock, etc., distributed on reorgani- zation after December 31, 1923_ property a~qulred by involuntary converslon __________________ _ wash sales of propertr. acquired for stock disposed 0, on which no )088 allowed _________________ _ property acquired during affiliation; period of affiliation determined __ basis in 1929 and subsequent years _______________________ _ INDEX. Pqe. 816 816 816 816 816 817 817 817 817 817 817 817 817 817 818 818 818 818 818 818 818 818 818 819 819 819 819 819 819 819 820 820 820 820 820 820 821 IfU»mfJ TID, Title 11 B~uIJAct 0/19.8- COntinuea. gain orko:c~n lrlOf~:_TarmstroBot (talk) 01:15, 25 September 2010 (UTC)_~f based on cost or fair market value; which ever is greater _________ _ basis for depreciation same 88 for gain or 1088 on same~ _____________ _ depletion 10811 same as for sale, etc_________________________ _ mines discovered after February 28, 1913 i former market value__ maximum oss; minerals included_ oil and gas wells allowed; maxi- mum_______________________ _ distribution by corporations _________ _ dividend means distribution out of earnings, etc., accumulated since February 28, 1913 ___________ _ sources of; accumulations, etc., before March 1, 1913, f~ of tax ________________________ _ distribution in liquidation, a payment for stock____________________ _ determination of gain or loss; partial distribution _________________ _ other distributions not from increase of value nor out of earnin~s ___ _ from depletion reserves of mines __ distributions by personal service cor- porations, exempt from tax.. ___ _ stock dividends not subject to tax____ _ proceeds of redemption of stock, tax- able dividends _______________ _ cancellation of stock after January I, 1926 _______________________ _ definition of partial liquidation ______ _ exclusion from gross income_________ _ additional items exempt from taxation_ earned income of nonresident citizens, from sources outside United Statea ______________________ _ teachers in Alaska and Hawaii; Fed- eral compensation excepted __ ~_ income of foreign Governments from investmentBin the United States_ income of States from public utilities_ if under. prior contracts for opera- tion thereoL _______ ~ _______ _ _ tax levied on proceeds prior to divi- sion of State, etc____________ _ mund to State, etc_.:. __________ _ if no part accruing to State, etc., net income of persons taxable__ _ bridges to be acquired by State, etc__ tax on operation proceeds prior to divislOn ____________________ _ refund to State, etc.; restriction __ if no part accruing to State, etc., net income from operation taxable__ dividends of Chinese residents;from China Trade corporations _____ _ receipts of ship owners mutual asso- ciations, etc _________________ _ net losses, determination____________ - limitation on deductions __________ _ losses not connected with business__ _ cat»tallosses __________________ _ depletion __________________ -. __ _ corporation dividends __________ _ interest free from tAX.. ___ ___ ___ _ _ net loss for prior year not allowed_ amount of, in computing income for next taxable year ____________ _ allowed, if existing in net income for succeeding year __________ _ Pap" 821 821 821 821 821 821 821 822 822 822 822 822 822 822 822 822 822 823 823 823 823 823 823 823 823 823 823 823 824 824 824 824 824 824 824 825 825 825 825 825 825 825 825 825 825

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text:
Page:United States Statutes at Large Volume 45 Part 1.djvu/1878

 INDEX. cxxvii lfU:Omfl Ta, Tille I, &vmt141 Act oj 1918- p .. .. Income Ta, TiCk I, Bet>eftt141 Act 0/1918- Paae. Continued. Contbiued. net lOIIIIe8; application for capital 10118 corporations treated .. foreign; In 830 sustained in second year; if ex- United States poese88iODS ______ istinlJ in net income ___________ 825 under China Trade Act ____________ 830 for ~}ltal gain _________________ 825 credit or refund for payments made for thi year_____________________ 825 under 1926 Act_______________ 830 app'lication for 10118 for 192&-1927 ___ 825 consolidated returns b~liated cor- if fiscal year differs from calendar porations for 1. and 8Ubse- year_________________________ 825 quentyears__ ~ _______________ 831 proportion for different rates _____ 825 consent of all members required_____ 831 loss on sales of stock or securities re- regulations to determine tax liabili!},_ 831 stricted if similar property ac- computation of assessments; 0 y quired __________________ ~ __ __ 826 one specific credit_____________ 831 by corporation____________________ 826 corrrations deemed affiliated ______ 831 if acquisition only i~art-- 826 omestic corporations of United gross income,from Uni States sources_ 826 Sta~SBe88ions excluded_____ ' 831 interest on bonds of residents_______ 826 China e Act corporations not excePtionsv::ftdjErsons not in bus- affiliated _____________________ 831 inees in nite States _________ 826 corporations in United States posses- if less thantwenty per cent acquired sions deemed foreign __________ 831 from United States sources ____ 826 subsidiary to domestic cowrations from foreign bank acceptances____ 827 formed to comply wit foreign dividends from domestic corpora.- law l deemed domestic _________ 832 tions; exceptions______________ 827 applicat on of suspension of statute from foreign corporations; excep- of limitation to consolidated ra- tions ________________________ 827 tums________________________ 832 deductions to constitute net income allocation of income and deduction to from United States sources_____ 827 related trades, etc ____________ 832 gross incomes from sources without the United States; other interest ___ 827 consolidated corporation returns for 1928 ________________________ 832 other dividends ___________________ 827 computation of proportionate assess- for labor, etc., without the United States _______________________ 827 ment; only one specific credit__ 832 for rentals, etc., without the United corporation deemed affiliated; not 832 affiliated _____________________ States_______________________ 827 application of suspension of statute from reaUy sales without the United of limitation _________________ 832 States _______________________ 827 allocation of income and deductIOn net income from sources without the to related trade and businesses__ 832 United States; determination of_ 828 fiduciaries to make sworn statement of income f.rom partly wi~hin and rartly 828 income of beneficiaries_________ 833 Wlthout; apportIOnment 0 _____ if Iiet income of $1,500 or over, if transportation and other services ___ 828 single________________________ 833 sales of property__________________ 828 married, etc., of $3,500 or over_____ 833 purchase and sale of persona)" prop- having gross income of $5,000 or erty; exceptions ______________ 828 over________________________ 833 synonl.mous meaning of words used ___ 828 estates or trusts of $1,500 or over__ 833 unliIDlted deductions for charitable, gross income of $1,500 or over______ 833 etc., contributions if exceeding of nonresident beneficiaries_________ 833 ninety per cent of net income__ 828 by joint fiduciaries ________________ 833 credit for income t etc., taxes paid by 829 subject to provisions applicable to in- citizens to oreign countnes, etc_ dividualS ______________,___ ___ 833 by re:'ident to United States pOsses- 829 withhotding tax at soIH'Ce ____________ 833 SlOns ________________________ alien residents to foreign countries requirements of co~ration agreeing to . alIo,wing similar credits ________ 829 pa binterest rea from tax. _____ 833 partn~rs or trus~ beneficiaries to for- tax to e withheld from,nonresident el~ countnes________________ 829 alien individuals______________ 833 exceptlOns and limitations__________ 829 foreignCQrporatioD8; other individ- redetermination if tax paid differ from uals; unknown owners________ 834 credit claimed ________________ 829 exception on notice of credit-withheld if accrued and not paid; bond re- of individual; nonresident aliens_ 834 quired_" __ ~ __________________ 829 lower rate on notice of interest of may be taken in year accrued; sub- income not exceeding '4,0Q0--- 834 sequent years ________________ 829 restrictions On obligor and ohlisee_ 834 evidence, etc., of foreign income 830 normal tar on nonresident aliens pay,. acquired _____________________ able at sourcei exceptions______ 834 from subsidiary of domestic corpora- returns, etc., from wlthholding agent__ 834 tiona assumed to have been paid by recipient of tax withheld _______ 834 from dividendtax__ ~ _________ 830 tax paid by recipient not recollect- limit on credit allowed ____________ 830 ib~ _______________ __________ 835 meaning of "accumulated profits" ___ 830 refund and credit of overpayment determination by Commissioner____ 830 to withholding agent __________ 835

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text: Flowers v. Foreman

title: Flowers v. Foreman


text:
Page:United States Statutes at Large Volume 45 Part 1.djvu/1879

 cnm Income TtU, Titk I, RsvImUtl Act of 1918- Continued. payment of tax at source by foreign corporation not in United States; ra~ ___________ ~ _________ ~ __ ra~ when interest guaranteed free of tax____________ ~_~ _______ _ penalty for willful failure tQ pay tax, make retllJ'llll, etc... __ __ ~ __ _ _ __ _ willful failure to collect tax, avoid payment, accounting, etc_____ _ "peI'lJOn" liable for violations. __ _ closing of taxable year by Commis- sioner ___________ ~-- ________ _ immediate payment demanded if acts of taxpayer prejudice collect~on_ notice to be mailed; findings of Com- missioner, presumption of .in- tent _______________ " __ _ __ __ _ _ bond accepted ~..~payer not in default; conditlon___ ~ __ __ __ __ _ enforc~nt on approval of_____ _ discretionary, waiving of require- ments of citizens _____________ _ aliens must furnish tax-paid certifi- ,cates before goin~ abroad _____ _ additional tax for vlolation______ _ returns to be made by all persons paying annually to another $!J5OO or more ______________ _ by united States officials _______ _ details required.. _______________ _ of interest on corporation bonds, etc., regardless of amount ____ _ collection 'of foreign dividends, etc_________________________ _ names and addresses of recipients on demand__________________ _ not app'licable to United States secunties ______ ~ __ __ __ __ __ __ _ by corporations, of dividend pay- ments ____________________ ,__ _ profits, etc., declared as dividends_ accumulated gains; names of per- sons eptitled thereto if distrib- uted~_' _____________________ ~. by bro~ers, of all business trans- actions_ ~ _____ ___ • ___ __ ___ __ _ licenses required for collecting foreign coupons,etc ________________ _ regulations to obtain information of_ punishment for collecting, without __ estates and trusts, tax on income of__ _ trust accumulations ____________ ~ __ periodically distributed ___________ _ receiving during administration ____ _ for discretionary distribution of____ _ payment by beneficiary ___________ _ computation of, as of individuals; exceptions __________________ _ deduction without limitation of gifts, etc., under will or trust_______ _ additional allowance for current dis- tribution and limitation______ _ deductions for payment to benefi- , ciaries; included. in their income_ nonnaI personal exemptions allowed heirs, etc ___________________ _ credi,ts ~ow~ beneficiaries in com- putm~ mcome ______________ _ computation for different taxable years_______________________ _ profi~o:TarmstroBot (talk) _TarmstroBot (talk).~ _TarmstroBot (talk) _TarmstroBot (talk)l~.:~ distributees taxed on amount re- ceived; credit allowed _________ _ INDEX; p .... 835 835 835 835 835 836 836 836 836 836 836 836 836 836 837 837 837 837 837 837 837 837 837 837 838 838 838 838 838 838 838 838 838 838 838 838 839 839 839 839 839 839 Income TtU, Titk I, lUvenue Act of 1988- Continued. estates and trusts; income ,from reo-: vokable trusts; included as of grantor _____________________ _ distribution of income for benefit of grantor from a trust__________ _ determination of capital net gain and lossinreturns~__ • ____________ _ special allo wance for net losses ____ _ forei~n tax allowed as credit of bene- . ,. Cl&l'y s mcome ______________ _ partnerships not taxable; partners taxed as individuals _______________ _ distributive share included in income of partner___________________ _ computation of rates under different laws__________'______ ~ _~ ____ _ net income, same asindividuals__ _ credits allowed; determination of earned income__________ ~ ____ _ application of capital net gains and losses ___________________ _ deduction of net loss _____________ _ credit for foreign taxes _____________ _ sworn statement of gross income required___"__________________ _ insurance companies________________ _ tax on life insurance companies______ _ rate on net income of domestic ____ _ foreign, from liOurces in United States_______________________ _ gross income; sources of______________ _ applicatioJ.! . of "reserve fund re- quired bylaw"_______ ~ ______ _ net income, means gross income less deductions___________________ _ tax free interest__________________ _ reserved on weekly payment assess- ments________________________ _ dividends from corporations, do- mestic; foreign ____________ ' __ _ _ reserves for deferred dividends_____ _ investment expenses; limitation____ _ real estate taxes; exceptions_______ _ exchange of property___________ " __ interest on debts; exception _______ _ specific money credit, if income , $25,000 or less_______________ _ rental value of real estate; limita- tion___________ ~ __ __ __ __ __ __ _ tax on foreign companies, net income of United States business______ _ tax on insurance companies other than life or mutual_________________ ~ domestic companies; foreign compa- nies from United States 80urces_ meaning of terms; "gross income" __ "net income" ___________________ _
 * investm~n~ in~ome"~,8ources of_

underwntmg mcome _________ _ "premiums earned on insurance contracts during taxable year," computation of_______________ _ "losses incurred"; computation ~~-- "expenses incurred" ; computa- tion ot. ______________________ _ net income deductions allowed; Qusi- ness expenses________________ _ interest. ______ _______ _______ _____ _ taxes ___________________________ _ losses ____________________ ~ __ _ _ _ _ __ _ losses from sales of property_______ _ worthless debts __________________ _ dividends from corporations ________ _ Pa&e. 840 840 840 840 840 840 840 841 841 841 841 842 842 842 842 842 842 842 842 842 842 842 843 843 843 843 843 843 843 843 844 844 844 844 844 844 844 844 844 845 845 845 845 845 845 845 845 845

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text: Talk:Flowers v. Foreman

title: Talk:Flowers v. Foreman


text:
Flowers v. Foreman/Opinion of the Court

THIS case was brought up by writ of error from the Circuit Court of the United States for the district of Maryland.

It was an action of assumpsit brought by Charles Flowers and Alice Flowers, of Louisiana, claiming to be heirs and universal legatees of Charles Mulhollan, against Foreman, surviving partner of Keller & Foreman.

There was a tract of land in Louisiana, which Calvit conveyed to Davis, Davis to Keller & Foreman, and these last to Mulhollan, under a power of attorney dated 21st December, 1827. The attorney conveyed it to Mulhollan with a clause of general warranty.

Mulhollan, on the same day, conveyed a part of it to Reuben Carnal, but nothing more need be said about this deed for the purpose of explaining the questions which arose in this case.

The heirs of Calvit, in 1838, filed a petition in the District Court, parish of Rapides, State of Louisiana, alleging that they were the sole heirs of their mother, who was the lawful wife of Anthony Calvit; that during the community between said Anthony Calvit and his wife, he purchased said tract of land; that the said wife died, leaving the petitioners her heirs, and their father their natural tutor; that in the year 1822, while petitioners were minors, he sold the whole of said land to A. J. Davis, in violation of the rights of petitioners, who were entitled to one-half thereof, as the heirs of their mother; that said land was then in possession of said Charles Mulhollan and Reuben Carnal, and the petition prays that one-half of said land may be adjudged to them.

Carnal filed his answer, denying the allegations in the petition, alleging that he purchased said land from Charles Mulhollan, who was bound to defend the title, and citing him in warranty in the suit.

Mulhollan filed his answer, denying all the allegations of the plaintiffs, and alleging that he purchased said land from said Keller & Foreman, under a general warranty, and he prays that said Keller & Foreman, as warrantors, may be cited to defend him in his title and possession, and that curators ad hoc may be appointed to represent the said warrantors, who are absentees.

In conformity with the prayer contained in Mulhollan's answer, a citation issued, not to Keller & Foreman, but to George K. Waters, who is styled curator ad hoc of the parish of Rapides, and said Waters appeared and filed an answer, and undertook to defend the cause for the absentees, on whom no process was served, and who had no notice nor knowledge of the case.

The District Court gave judgment in favor of the defendant.

The case was appealed, and the Supreme Court of Louisiana, on the 26th of November, 1845, reversed the decision of the District Court, and ordered, adjudged, and decreed, 'that said James and Coleman Calvit do recover of the defendant, each and respectively, one undivided eighth of the tract of land described in their petition, that they be quieted in their title to the said undivided eighth hereby decreed to them respectively as against the defendant or any person claiming through or under them;' but with regard to the question of improvements and rents and profits, so far as James and Coleman Calvit were interested, and as to the question of damages between the warrantees, the case was remanded to the District Court. And on a rehearing, the Supreme Court, on the 29th of October, 1845, decreed that its former judgment be maintained as far as it went, and that, in addition to the purposes for which it was ordered to be remanded, it be also remanded for the further purpose of ascertaining whether the price received by the plaintiffs' father and tutor for the property in dispute was applied to the payment of the community debts of the father and mother of the plaintiffs, to which said James and Coleman were bound to contribute in proportion to their rights thereto; and that in the mean time no writ of possession issue until they have paid the amount which may be found to be due by them on the trial of the cause in the lower court.

During the progress of the cause, Charles Mulhollan died, and Charles Flowers and Alice Flowers appeared therein as his heirs and universal legatees.

Charles Mulhollan died in 1846. Shortly afterwards, Thomas O. Moore, the acting executor, paid to James and Coleman Calvit twelve hundred dollars each for their relinquishment of their claims to the tract of land in question.

On the 31st of May, 1853, the District Court rendered judgment in favor of Charles Flowers and Alice Flowers against Keller & Foreman, who were represented by the curator ad hoc. The judgment was for eight hundred and fifty dollars, with interest thereon, at five per cent., from the 14th of November, 1846, and costs.

There being no mode of reaching Keller & Foreman, under this judgment, an action of assumpsit was brought against them, as before stated, in the Circuit Court of the United States for the district of Maryland. The defendants pleaded the statute of limitations of Maryland.

The two statutes of this State are the following, viz:

The act of 1715, chapter 23, section 2, provides that all actions upon the case shall be brought 'within three years ensuing the cause of such action, and not after,' with a saving by section 22 in favor of persons beyond seas.

The act of 1818, chapter 216, section 1, repeals the saving in the act of 1715, in favor of persons beyond seas.

The reader will perceive that the only question in the case was when the statute began to run, whether in 1846 or 1853.

The Circuit Court granted the following instruction.

The defendant prays the court to instruct the jury, first, that the act of the State of Maryland, passed in the year 1715, chapter 23, entitled, 'An act for limitation of certain actions, for avoiding suits at law,' and the act of said State, passed in the year 1816, chapter 216, entitled, 'An act to avoid suits at law,' constitute a bar to the recovery by the plaintiff in this case. To the granting of which instruction the plaintiff excepted, and upon this exception the case came up to this court.

It was argued by Mr. Brent and Mr. Phelps for the plaintiff in error, and by Mr. Brown, upon a brief filed by Brown and Brune, for the defendant.

The counsel for the plaintiff in error maintained the following proposition:

That upon all the evidence in the case it appears, either that our cause of action did not accrue at all, until 31st May, 1853, or only accrued sub modo, and in abeyance, and did not mature until that date; in either of which cases, we are within the statutory limits.

Such part of the argument of the counsel for the plaintiff in error as there is room to insert, was as follows:

That said contract was broken, giving a right of action to the plaintiff.

(Upon the defence of limitations.) That such action accrued within three years prior to the institution of the suit.

These two points will be considered together.

The contract was concerning land situated in Louisiana. It was made in Louisiana, and there it was to be performed. The inquiry therefore is, what, by the lex loci, was necessary to constitute a beach of the contract?

Story's Conf. Laws.

By the civil law, the remedy upon the obligation of warranty is two-fold, and each remedy has respect to a distinct and independent cause of action.

The more usual remedy in the French and Louisiana practice is the one which was originally resorted to in the present case, while pending in the Louisiana court. By it, the warrantor is formally vouched or cited in to defend his vendee's title, as soon as proceedings are commenced against the latter. If the seller thus called in cannot defend, 'the judge condemns him to indemnify the defendant, by the same sentence by which he pronounces in favor of the original plaintiff.'

In this from of proceeding, the cause of action may be said to arise as soon as the vendee is troubled in his possession by a suit, for at that moment his right to call in his vendor in warranty accrues.

The other remedy is the one now being prosecuted, and which was rendered necessary by the fact that the first was ineffectual, the court which gave judgment not having jurisdiction over the absent parties.

In substance, this remedy corresponds to the ordinary common-law action of covenant, and, like it, is not available until final sentence is pronounced, and cannot be brought before the vendee has sustained an eviction, either actual or constructive.

Pothier des Ventes, part 2, C. 1, sec. 2, art. 5, sec. 2.

Domat, lib. 1, tit. 2, sec. 10.

In the present case, therefore, the cause of action did not accrue until eviction was consummated.

'Eviction' is defined to be 'the loss suffered by the buyer of the totality of the thing sold, or a part thereof, occasioned by the right or claim of a third person.'

Civil Code, art. 2476.

It is decided that this text does not require actual dispossession. Any holding by the vendee by a title different from that acquired from his warrantor, falls within its terms. As, if the disturbed vendee purchases in the paramount title to quiet his possession, he thereby sustains a constructive eviction, and has a right of action upon his warranty.

Pothier des Ventes, No. 96.

Landry v. Gamet, 1 Rob., 362.

Thomas v. Clement, 11 Rob., 397.

Before proceeding to apply these principles to the facts, it is necessary premise that those facts appear from two distinct species of evidence. First, the record evidence, consisting of the certified transcript of proceedings of the District Court of Rapides parish, in the suit of Calvit v. Mulhollan. And second, the parol and documentary evidence returned with the commission.

This distinction is important, in view of the peculiar form of the instruction given below. If that instruction can be supported upon the facts disclosed by the record evidence alone, we concede that it is unobjectionable in point of form. If, however, it is predicated in any the least degree upon the parol testimony, it is fatally defective; and for this plain reason, that it takes the testimony from the jury, who are the sole judges of its credibility, by a peremptory charge that the statutes of limitations constituted a bar.

The law should have been given to the jury hypothetically, leaving them to find the facts.

Budd v. Brooke, 3 Gill, 198.

Calvert v. Coxe, 1 Gill, 95.

Charleston Ins. Co. v. Corner, 2 Gill, 410.

Ragan v. Gaither, 11 G and J., 472.

It may also be premised, that in an action for breach of warranty, the record of the suit in which the title paramount was litigated is conclusive evidence of the eviction, in cases where the warrantor had notice, and an opportunity to defend his vendor's title. Where no such title was given, the record is still prima facie evidence, not only of the validity of the paramount claim, but of its extent, &c.

Civ. Code, art., 2493, 2494.

Clark v. Carrington, 7 Cranch, 308.

It may well be argued, that in the present case the defendant had such notice.

Field v. Gibbs, Pet. C. C. R., 155.

Roberts v. Caldwell, 5 Dana, 512.

Wernwag v. Pawling, 5 G. and J., 500.

But, whether notice or not, the record is properly in evidence.

Hanson v. Buckner, 4 Dana, 251.

Owings v. Hull, 9 Peters, 627.

Now, first examine the facts of this case, as they appear from the record evidence, independent of the parol testimony, to determine whether these facts alone do not give the plaintiff a right of action, to which the statute of limitations is not a bar.

The litigation upon the paramount title commences in 1838. In 1843, the District Court renders an adverse judgment, and the defeated claimants appeal. In 1845, the appellate court affirms this judgment as to two of the claimants, but reverses it as to the two youngest, and decides that they are entitled to recover each an undivided eighth.

Pausing an instant at this point, we ask whether this decree, even if it had been in terms a final judgment, would, by the law of Louisiana, have per se amounted to an eviction.

The answer is clearly that it would not.

Murray v. Bacon, 7 New S., 271.

The recital in the final judgment, 'whereas his legal representatives have been evicted by the decree of the court,' &c., when taken in connection with the decree to which it refers, obviously does not use the term in its strict, technical sense. If a technical eviction is meant at all, it can only be by relation.

But the decision of the appellate tribunal was not a final decree, but, on the contrary, preliminary and prospective merely, contemplating further proceedings, and prescribing future action as a condition precedent to a complete eviction.

So far, then, there is no eviction-therefore, no breach of warranty-therefore, no right of action; and hence we may safely assume that down to November, 1845, limitations have not commenced to run against us.

Resuming the inspection of the Louisiana record, (to which, for the present, we are confining ourselves,) from the time the decree of the appellate tribunal was filed in the District Court in November, 1845, nothing appears which has the remotest relation to an eviction, until 1853-the intervening minutes showing no more than that the suit was still pending in the District Court, revived in the name of the 'legal representatives' of the deceased defendant, Mulhollan.

On the 30th May, 1853, the present plaintiff, with his now deceased co-plaintiff, for the first time appear in the cause, make themselves parties in their capacity as 'heirs and universal legatees' of the original defendant, adopt his answers and defences, and ask for judgment over against the warrantors, in case judgment be rendered in favor of plaintiffs.

And on the next day (31st May) there is an entry of what purports to be a final judgment of the District Court, reciting the decree of the court above, and also reciting the fact, which for the first time appears, that 'the legal representatives of Charles Mulhollan have purchased the claims of said Calvits for the sum of $2,400.'

Within the principles laid down, this recital furnishes at once a state of facts such as by the lex loci amounts to an eviction, and gives a right of action upon the warranty.

See cases before cited, 1 Rob. 362, and 11 R., 397.

The record, however, does not furnish the date at which the purchase was made. That it does not do this expressly, is certain. That it does not fix the exact date by implication, is equally clear.

It is true, the judgment in awarding interest upon the $850, the sum which it entitles the Flowers's to recover against the warrantors, does compute from the 14th November, 1846. But it does not connect this date in any manner with the previons recital of the purchase; and it would be a violent construction, certainly, which should force such a connection, independent of any extrinsic information. And it is to be borne in mind, that we are now considering the case upon the record evidence alone.

Nor is it for us to supply the omission caused by the silence of the record with respect to time. It is for the defendant, who relies upon limitations, to show that we are barred. It is enough for us to show, that at all events, upon the 31st May, 1853, we had a cause of action, without being required to prove how long before we might have had it.

If, then, it appears by the record alone, that upon the 31st May, 1853, the litigation upon the paramount title was brought to a close by final judgment, and that upon that day we stood as purchasers of the paramount claims, with nothing in the record to show that we were such purchasers long anterior to that time, we submit that the instruction given by the court below, that we were barred by limitations, was erroneous, inasmuch as we commenced one suit within less than three years from said date, to wit: on the 3d November, 1855.

We now proceed to consider the case, as it may be modified by the parol testimony.

The depositions of J. A. Calvit and Judge Ogden disclose the fact that the relinquishment of the paramount claims was made on the 14th November, 1846, and that the purchase was made by Thomas O. Moore, the acting executor of Mulhollan.

Upon this evidence, the attempt is made to set up the bar of limitations against the heirs, by dating their right of action back to the time when a voluntary payment was made by the executor.

There is nothing to show that the heirs authorized this arrangement concerning their land, or that they were privy to it in any manner. And we submit, that they were not bound nor concluded by it, directly or indirectly, until the 31st May, 1853, when the final judgment, rendered the day after their appearance in the suit, by reciting the payment, showed that they had ratified and adopted it as their own.

Until adopted by the heirs, the purchase of the Calvits' claims by Moore, although doubtless made in 'good faith,' and as the 'best arrangement that could be made for the estate,' yet not being within the scope of his executorial powers, was no more the act of the heirs than if made by an entire stranger for purposes of speculation.

Brush v. Ware, 15 Pet., 93-111.

Code La., art. 1652.

Anderson's Executors v. Anderson's Heirs, 10 La., 35.

The doctrine is well settled, that an action upon warranty may be brought by the executors, provided the breach be during the lifetime of the testator; but if the breach occur after his death, the action can only be maintained by the heirs.

1 Parsons Cont., 109.

Rawlings v. Adams, 7 Md., 49.

It is plain, therefore, that no right of action accrued upon this contract of warranty, until the 31st May, 1853. The executors could not have sued: 1st, because the payment by them did not constitute an eviction at all, they not being authorized to represent the land; and 2d, because, even if such payment did constitute an eviction, the breach was not until after the death of Mulhollan, the warrantee, in which case the heirs alone could maintain an action.

Nor could the heirs have sued, for they had not then ratified the voluntary and gratuitous act of the executors, and made the payment their own.

There being no parties competent to sue, limitations could not run.

Fishwick v. Sewell, 4 H. and J., 393.

The counsel for the defendant in error made the following points:

I. This is an action of trespass on the case on a promise, otherwise called an action of assumpsit.

The cause of action of the plaintiff in error, if any he had, accrued, and limitations began to run on the 14th of November, 1846, when payment was made by the executor of Mulhollan in behalf of the estate. And therefore more than three years had elapsed before the bringing of this action on the 3d of November, 1855, and the claim is barred by the acts of limitation of the State of Maryland of 1715, ch. 23, sec. 2, and 1818, ch. 216, sec. 1.

Beatty's Adm'rs. v. Burnes's Adm'rs., 8 Cranch, 98.

Murdoch v. Winter, 1 H. and G., 471.

Frey v. Kirk, 4 G. and J., 509.

Sprague v. Baker, 17 Mass., 591.

Loomis v. Bedel, 11 N. H., 74.

Day v. Chism, 10 Wheat., 452.

2 Greenleaf's Ev., sec. 244.

Foote v. Burnet, 10 Ohio Wilcox, 330.

II. The judgment of the District Court of the State of Louisiana, in favor of Charles H. Flowers and Alice Flowers against Christopher Keller and Francis Foreman, for $850, with interest from the 14th of November, 1846, the date of the payment by Mulhollan's executor, is void, the court below having no jurisdiction in the case, the defendants never having been served with process, and never having had notice or knowledge of the case. The judgment against Keller is by a wrong name. His true name was Christian, not Christopher Keller, and he was in fact dead at the time when it was rendered, although that fact does not appear by the record. But the plaintiff in error does not sue on this judgment, or claim thereunder. If the judgment were valid, his cause of action would be merged therein, and suit would have to be brought on the judgment, and the form of action would be debt, not assumpsit.

Harris v. Hardeman, 14 How., 339.

Mr. Justice WAYNE delivered the opinion of the court.

We shall cite such facts in this record as are necessary to show the relations and obligations of the parties to it, under the laws of the State of Louisiana, and in that of the Circuit Court of the United States for the district of Maryland, from which it has been brought here by writ of error.

The plaintiffs are the heirs and universal legatees of Charles Mulhollan, to whom Keller & Foreman sold a tract of land, with an obligation of warranty. On the same day that the conveyance was executed to Mulhollan, he conveyed by deed a part of the land to Reuben Carnal, with a like clause of general waranty.

Afterwards, William J. Calvit, Elizabeth G. Calvit, James A. Calvit, and Coleman W. Calvit, filed their petition in the District Court for the parish of Rapides, alleging that they were the heirs of their mother, the lawful wife of their father, Anthony Calvit, and that they were entitled to half of the land, as it had been purchased by their father during their mother's coverture with him, which superinduced between them a community of acquests or gains-there having been by them no stipulation to the contrary. And they allege, also, that their father, as their natural tutor, had sold the land, for a part of which they petitioned, while they were minors, in violation of their rights.

They further state, that Charles Mulhollan and Reuben Carnal were in possession of the land, and ask that one-half of it might be adjudged to them, as the heirs of their mother.

Being thus brought into court, Mulhollan and Carnal filed their answers. Each deny the allegations of the plaintiffs-Carnal citing Mulhollan into court as his warrantor; and Mulhollan alleges, in his answer, that he had purchased the land from Keller & Foreman, with a general warranty. He asks that they might be cited, to defend him in his title and possession; and that, as they were absentees from the State of Louisiana, he prayed for the appointment of curators ad hoc, to represent them in the case.

George K. Waters was designated by the court as their curator; and, upon being summoned, appeared in that relation, and, assuming to be the attorney of Keller & Foreman, filed an answer for them. Keller & Foreman, however, never had any knowledge of the suit, nor any notice of the appointment of Waters as curator.

Waters, in his answer, cited in warranty the legal representatives of A. J. Davis, deceased, from whom Keller & Foreman had bought the land.

The legal representatives of Davis appeared, by George Purvis, their curator, and in their turn cite in warranty, Anthony Calvit, their ancestor's vendor, who was the father of the plaintiff, by whom the land had been sold to Davis. Anthony Calvit appeared by attorney, denying the petitioner's allegations.

After several continuances, the case was brought to trial in the District Court, and judgment was entered for the defendants. The plaintiff carried it by appeal to the Supreme Court of Louisiana. The judgment of the court below was reversed, on the 26th November, 1845. That court decided that the two youngest petitioners, James and Coleman Calvit, were each entitled to one undivided eighth of the land in controversy; but that William J. Calvit and Elizabeth G. Calvit were excluded from recovering, on account of the prescription of ten and twenty years, which Mulhollan had pleaded in his answer. The court then remanded the cause to the District Court, for further proceedings on the question of improvements, costs, and profits, and of damages between the warrantors.

Afterwards, on a rehearing, the Supreme Court directed a further inquiry to be made, for the purpose of ascertaining whether the price received for the land by the father and tutor of the plaintiff had been applied to the payment of the debts of the community of their father and mother; 'and it ordered, if any of it had been, that James and Coleman Calvit should contribute in proportion to their rights in the land; and that, in the mean time, no writ of possession should issue until they had paid the amount which the court below might determine to be due by them.'

After the rendition of the Supreme Court's decree, Charles Mulhollan died. His will was admitted to probate on the 11th July, 1846. On the same day his death was suggested, and an order was passed to renew the suit in the names of his legal representatives. Three days afterwards, Thomas O. Moore, the executor of Mulhollan, paid to James and Coleman Calvit $2,400 for a relinquishment of their claims to the land in controversy, and of all their rights in the judgment which had been rendered in their favor.

No further proceedings were had in the suit from the 11th November, 1846, to the 30th May, 1853, when the plaintiffs in this suit made themselves parties, as heirs and universal legatees of their uncle, Charles Mulhollan, the original defendant. They adopted his answers and defences, and ask for judgment against his warrantors, Keller & Foreman; which was given on the following day, in the District Court, to which the cause had been remanded, for those purposes only heretofore stated.

Such have been the relations of the parties named in the record, in the District and Supreme Court of the State of Louisiana. Whatever was the liability of Keller & Foreman, as warrantors of Mulhollan, they never were subjected to the jurisdiction of the District Court, by any valid proceeding from it, to enable that court to carry that liability into a judgment in favor of Mulhollan, their vendee, or in favor of his representatives, Charles and Alice Flowers.

When Mulhollan answered the petition of the Calvits, and asked that Keller & Foreman should be cited into court as his warrantors, no citation for that purpose was served upon them to do so. One was issued for and served upon Waters, to represent them as curator ad hoc; but that was insufficient to give to the District Court jurisdiction to pronounce judgment against them, though that court did do so. Hence it is that this action of assumpsit was instituted, to recover damages alleged to have been sustained upon a breach of the warranty of Keller & Foreman to Mulhollan.

In the declaration in this action, it is recited that Keller & Foreman had conveyed to Mulhollan a tract of land, with warranty, and that the Supreme Court had adjudged that James and Coleman Calvit were each entitled to an undivided eighth of the same. They were declared to have entered into the same, and evicted Mulhollan from it; in consequence of which, Mulhollan, to regain his possession, had paid to James and Coleman Calvit twenty-four hundred dollars, for the relinquishment of their claims to the land. To this action, the defendant pleaded non assumpsit; and it was agreed in writting, by the counsel in the cause, that, under such issue, all errors in pleading should be mutually waived, and that the defendant was to be permitted, under it, to rely upon the statute of limitations.

Upon the trial of the case, that point was urged. The statutes of Maryland of the years 1715, ch. 23, and 1818, ch. 216, entitled, Acts to avoid suits at law, were insisted upon, as constituting a bar to the recovery of the plaintiff. Such was the instruction given by the court.

There is no error in the instruction. More than three years had elapsed after their right of action had accrued, before the plaintiffs brought their suit. Their uncle had been judicially declared not to be entitled to a part of the land by the decree of the Supreme Court. That of itself was an eviction under the law of Louisiana, though the court postponed giving a writ of possession to the parties in whose favor its decree was made, for the purpose of having certain points ascertained in which all the parties to the cause were interested-no one of them more so than Mulhollan himself. The date of the Supreme Court's decree in favor of the two Calvits is 26th November, 1845, shortly after Mulhollan died. The District Court had not then adjudged those points for which the case had been remanded to it.

Before that was done by the court, and soon after Mulhollan's death, his active executor, Moore, on the 14th November, 1846, bought from the two Calvits their claim to that part of the land which had been decreed to them by the Supreme Court. This itself was an eviction, though the Supreme Court, in deciding upon these rights to the land, had wihheld from the Clavits a writ of possession. It is not necessary, to constitute an eviction, that the purchaser of land should be actually dispossessed. (11 Rob., 397.) It was also ruled, in the same case, that an eviction may take place when the vendee continues to hold the property under a different title from that transferred to him by his vendor. In this instance, Mulhollan's representatives held the title to a part of the land, originally bought by him from Davis as a whole, by the purchase of James and Coleman Calvit's undivided eighth.

The same conclusions had been previously ruled by the same court in Auguste Landry v. Honore Felix Gamel, 1 Robinson, 362. The court's language is: 'It is true that, by the authorities to which we have been referred, the doctrine is well established, that, in order to constitute an eviction, it is not absolutely necessary that the purchaser should be actually dispossessed. That eviction takes place, although the purchaser continues to hold the property, if it be under a title which is not that transferred to him by his vendor, as if he should extend the property, or should acquire it by purchase from the true owner.' (Pothier, Vente, No. 96; Troplong, Vente, No. 415; Toullier, vol. 16; Continuation by Duvergier, vol. 1, Nos. 309, 313.) Other cases in the Louisiana reports have the same conclusions, but we do not think it necessary to cite them. The rulings in 1 and 11 Robinson announce it to be the uncontested doctrine in the Louisiana courts, that actual dispossession is not necessary to constitute an eviction, and that, if the purchaser holds under another title than that of his vendee, an eviction may take place. Those decisions cover the case in hand in both particulars, and they show that the purchaser of the land had suffered an eviction by the decree of the Supreme Court, in the meaning of that term in the law of Louisiana, though a writ of possession had not been issued. But if that was doubtful, it is certain that the eviction was accomplished when the executor of Mulhollan bought, for the benefit of his testator's estate, the claim to the land which James and Coleman Calvit had acquired.

Mulhollan, by his will, granted to his executors, immediately on his death, full and entire seizin and possession of all his estate, to hold and manage the same until all the legacies given by him were paid over and fully discharged. The signification of a delivery of seizin to an executor will be found in articles 1652, 1664, 1666, 1667, of the Civil Code, and in 35 of Revised Statutes, 3. These articles provide that a testator may give the seizin of the whole or of a part of his estate to his executor, accordingly as he may express himself. The seizin usually continues for a year and a day, but may be prolonged by an act of the court, and may be terminated whenever the heirs shall deliver to the executor a sum sufficient to pay the movable legacies. The seizin of the executor is distinct from and paramount to the seizin which the law vested in the heir immediately on the death of his ancestor, and the heir can only deprive the executor of it by providing security for the performance of his obligations. The executor represented the reception, in so far as respects creditors and legatee. (Bird v. Jones, 5 Ann. La. Rep., 645.) When the testamentary executor submitted to the title of the Calvits, and paid them for it, that was an eviction, which gave to him a right of action in behalf of the succession against the warrantors of his testator. His right of action passed to the heirs of Mulhollan when he delivered the succession to them, or whenever it came to their hands by due course of law. It was delivered to them, and the executor's seizin terminated in the year 1847, though the precise day does not appear in the record. The heirs, upon its termination, were reinstated in all the rights which had been temporarily administered by the executor. Those rights will be found in articles 934, 935, 936, of the Code. One of the effects of those rights is to authorize the heir to institute all the actions which the testator could have done, to prosecute to a conclusion such as had been commenced by the testamentary executor, and to commence all actions which he had failed to institute belonging to the succession. (15 Lou., 527; 7 Rob., 183; 2 Ann., 339; 7 Ann., 397.) In such a suit by the heirs, the same defences may be made which could have been applied if the executor's seizin had been continued. But in this instance, neither the executor nor the heirs, the plaintiffs in the suit, took any legal step to carry to a judgment Mulhollan's citation of Keller & Foreman in warranty in the District Court of the parish of Rapides, until the 30th May, 1853, more than fourteen years after the eviction of Mulhollan had occurred, and after the rights of the Calvits had been bought. The heirs now, however, seek by this suit in assumpsit in the Circuit Court of the United States for the district of Maryland, to recover damages from Foreman, the survivor of his partner, Keller, for the failure of their warranty to Mulhollan, the suit having been commenced between eight and nine years after their right of action had accrued. The defendant relies upon the statutes of limitation of Maryland as his defence to prevent a recovery. We think it must prevail, and that the court below, in giving to the jury such an instruction, committed no error. We therefore direct its judgment to be affirmed.

title: Flowers v. Foreman/Opinion of the Court