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Lamar v. Micou (112 U.S. 452)/Opinion of the Court

The authority of the surrogate's court of the county of Richmond and state of New York to appoint Lamar guardian of the persons and property of infants at the time within that county, and the authority of the supreme court of the state of New York, in which this suit was originally brought, being a court of general equity jurisdiction, to take cognizance thereof, are not disputed; and, upon the facts agreed, it is quite clear that none of the defenses set up in the answer afford any ground for dismissing the bill.

The war of the rebellion, and the residence of both ward and guardian within the territory controlled by the insurgents, did not discharge the guardian from his responsibility to account, after the war, for property of the wards which had at any time come into his hands, or which he might, by the exercise of due care, have obtained possession of. A state of war does not put an end to pre-existing obligations, or transfer the property of wards to their guardians, or release the latter from the duty to keep it safely, but suspends until the return of peace the right of any one residing in the enemy's country to sue in our courts. Ward v. Smith, 7 Wall. 447; Montgomery v. U.S. 15 Wall. 395, 400; Insurance Co. v. Davis, 95 U.S. 425, 430; Kershaw v. Kelsey, 100 Mass. 561, 563, 564, 570; 3 Phillim. Int. Law, (2d Ed.) § 589.

The appointment of Micou in 1867 by a court of Alabama to be guardian of the surviving ward, then residing in that state, did not terminate Lamar's liability for property of his wards which he previously had or ought to have taken possession of. The receipt given by Micou was only for the securities and money actually handed over to him by Lamar; and Micou had any authority to discharge Lamar from liability for past mismanagement of either ward's property, he never assumed to do so.

The suggestion in the answer, that the surviving ward, upon coming of age, ratified and approved the acts of Lamar as guardian, finds no support in the facts of the case.

The further grounds of defense, set up in the cross-bill, that Micou participated in Lamar's investments, and that Mrs. Micou approved them, are equally unavailing. The acts of Micou, before his own appointment as guardian, could not bind the ward. And admissions in private letters from Mrs. Micou to Lamar could not affect the rights of the ward, or Mrs. Micou's authority, upon being afterwards appointed administratrix of the ward, to maintain this bill as such against Lamar's representative, even if the amount recovered will inure to her own benefit as the ward's next of kin. 1 Greenl. Ev. § 179. The extent of Lamar's liability presents more difficult questions of law, now for the first time brought before this court. The general rule is everywhere recognized, that a guardian or trustee, when investing property in his hands, is bound to act honestly and faithfully, and to exercise a sound discretion, such as men of ordinary prudence and intelligence use in their own affairs. In some jurisdictions no attempt has been made to establish a more definite rule; in others, the discretion has been confined, by the legislature or the courts, within strict limits.

The court of chancery, before the Declaration of Independence, appears to have allowed some latitude to trustees in making investments. Th best evidence of this is to be found in the judgments of Lord HARDWICKE. He held, indeed, in accordance with the clear weight of authority before and since, that money lent on a mere personal obligation, like a promissory note, without security, was at the risk of the trustee. Ryder v. Bickerton, 3 Swanst. 80, note; S.C.. 1 Eden, 149, note; Barney v. Saunders, 16 How. 535, 545; Perry, Trusts, § 453. But, in so holding, he said: 'For it should have been on some such security as binds land, or something to be answerable for it.' 3 Swanst. 81, note. Although in one case he held that a trustee, directed by the terms of his trust to invest the trust money is government funds or other good securities, was responsible for a loss caused by his investing it in South Sea stock, and observed that neither South Sea stock nor bank stock was considered a good security, because it depended upon the management of the governor and directors, and the capital might be wholly lost, (Trafford v. Boehm, 3 Atk. 440, 444;) yet, in another case, he declined to charge a trustee for a loss on South Sea stock, which had fallen in value since the trustee received it, and said that 'to compel trustees to make up a deficiency, not owing to their willful default, is the harshest demand that can be made in a court of equity.' Jackson v. Jackson, 1 Atk. 513, 514; S.C.. West, Ch. 31, 34. In a later case he said: 'Suppose a trustee, having in his hands a considerable sum of money, places it out in the funds, which afterwards sink in their value, or on a security at the time apparently good, which afterwards turns out not to be so, for the benefit of the cestui que trust; was there ever an instance of the trustee's being made to answer the actual sum so placed out? I answer, 'No.' If there is no mala fides, nothing willful in the conduct of the trustee, the court will always favor him; for, as a trust is an office necessary in the concerns between man and man, and which, if faithfully discharged, is attended with no small degree of trouble and anxiety, it is an act of great kindness in any one to accept it. To add hazard or risk to that trouble, and subject a trustee to losses which he could not foresee, and, consequently, not prevent, would be a manifest hardship, and would be deterring every one from accepting so necessary an office.' That this opinion was not based upon the fact that in England trustees usually receive no compensation is clearly shown by the chancellor's adding that the same doctrine held good in the case of a receiver, an officer of the court, and paid for his trouble; and the point decided was that a receiver, who paid the amount of rents of estates in his charge to a Bristol tradesman of good credit, taking his bills therefor on London, was not responsible for the loss of the money by his becoming bankrupt. Knight v. Plymouth, 1 Dick. 120, 126, 127; S.C.. 3 Atk. 480. And the decision was afterwards cited by Lord HARDWICKE himself as showing that when trustees act by other hands, according to the usage of business, they are not answerable for losses. Ex parte Belchier, 1 Amb. 218, 219; S.C.. 1 Kenyon, 38, 47.

In later times, as the amount and variety of English government securities increased, the court of chancery limited trust investments to the public funds, disapproved investments either in bank stock or in mortgages of real estate, and prescribed so strict a rule that parliament interposed; and by the statutes of 22 & 23 Vict. c. 35, and 23 & 24 Vict. c 38, and by general orders in chancery, pursuant to those statutes, trustees have been authorized to invest in stock of the bank of England or of Ireland, or upon mortgage of freehold or copyhold estates, as well as in the public funds. Lewin, Trusts, (7th Ed.) 282, 283, 287. In a very recent case the court of appeal and the house of lords, following the decisions of Lord HARDWICKE in Knight v. Plymouth and Ex parte Belchier, above cited, held that a trustee investing trust funds, who employed a broker to procure securities authorized by the trust, and paid the purchase money to the broker, if such was the usual and regular course of business of persons acting with reasonable care and prudence on their own account, was not liable for the loss of the money by fraud of the broker. Sir GEORGE JESSEL, M. R., Lord Justice BOWEN, and Lord BLACKBURN affirmed the general rule that a trustee is only bound to conduct the business of his trust in the same manner that an ordinarily prudent man of business would conduct his own; Lord BLACKBURN adding the qualification that 'a trustee must not choose investments other than those which the terms of his trust permit.' Speight v. Gaunt, 22 Ch. Div. 727, 739, 762; 9 App. Cas. 1, 19.

In this country there has been a diversity in the laws and usages of the several states upon the subject of trust investments.

In New York, under Chancellor KENT, the rule seems to have been quite undefined. See Smith v. Smith, 4 Johns. Ch. 281, 285; Thompson v. Brown, 4 Johns. Ch. 619, 628, 629, where the chancellor quoted the passage above cited from Lord HARDWICKE'S opinion in Knight v. Plymouth. And in Brown v. Campbell, Hopk. Ch. 233, where an executor in good faith made an investment, considered at the time to be advantageous, of the amount of two promissory notes, due to his testator from one manufacturing corporation, in the stock of another manufacturing corporation, which afterwards became insolvent, Chancellor SANFORD held that there was no reason to charge him with the loss. But by the later decisions in that state investments in bank or railroad stock have been held to be at the risk of the trustee, and it has been intimated that the only investments that a trustee can safely make without an express order of court are in government or real estate securities. King v. Talbot, 40 N. Y. 76, affirming S.C.. 50 Barb. 453; Ackerman v. Emott, 4 Barb. 626; Mills v. Hoffman, 26 Hun, 594; 2 Kent, Comm. 416, note b. So the decisions in New Jersey and Pennsylvania tend to disallow investments in the stock of banks or other business corporations, or otherwise than in the public funds or in mortgages of real estate. Gray v. Fox, saxt. 259, 268; Halsted v. Meeker, 3 C. E. Green, 136; Lathrop v. Smalley, 8 C. E. Green, 192; Worrell's Appeal, 9 Pa. St. 508, and 23 Pa. St. 44; Hemphill's Appeal, 18 Pa. St. 303; Ihmsen's Appeal, 43 Pa. St. 431. And the New York and Pennsylvania courts have shown a strong disinclination to permit investments in real estate or securities out of their jurisdiction. Ormiston v. Olcott, 84 N. Y. 339; Rush's Estate, 12 Pa. St. 375, 378.

In New England, and in the southern states, the rule has been less strict. In Massachusetts, by a usage of more than half a century, approved by a uniform course of judicial decision, it has come to be regarded as too firmly settled to be changed, except by the legislature, that all that can be required of a trustee to invest is that he shall conduct himself faithfully and exercise a sound discretion, such as men of prudence and intelligence exercise in the permanent disposition of their own funds, having regard, not only to the probable income, but also to the probable safety, of the capital; and that a guardian or trustee is not precluded from investing in the stock of banking, insurance, manufacturing, or railroad corporations within or without the state. Harvard College v. Amory, 9 Pick. 446, 461; Lovell v. Minot, 20 Pick. 116, 119; Kinmonth v. Brigham, 5 Allen, 270, 277; Clark v. Garfield, 8 Allen, 427; Brown v. French, 125 Mass. 410; Bowker v. Pierce, 130 Mass. 262. In New Hampshire and in Vermont, investments, honestly and prudently made, in securities of any kind that produce income, appear to be allowed. Knowlton v. Bradley, 17 N. H. 458; Kimball v. Reding, 11 Fost. 352, 374; French v. Currier, 47 N. H. 88, 99; Barney v. Parsons, 54 Vt. 623.

In Maryland, good bank stock, as well as government securities and mortgages on real estate, has always been considered a proper investment. Hammond v. Hammond, 2 Bland, 306, 413; Gray v. Lynch, 8 Gill, 403; Murray v. Feinour, 2 Md. Ch. 418. So, in Mississippi, investment in bank stock is allowed. Smyth v. Burns, 25 Miss. 422.

In South Carolina, before the war, no more definite rule appears to have been laid down than that guardians and trustees must manage the funds in their hands as prudent men manage their own affairs. Boggs v. Adger, 4 Rich. Eq. 408, 411; Spear v. Spear, 9 Rich. Eq. 184, 201; Snelling v. McCreary, 14 Rich. Eq. 291, 300.

In Georgia the English rule was never adopted; a statute of 1845, which authorized executors, administrators, guardians, and trustees, holding any trust funds, to invest them in securities of the state, was not considered compulsory; and before January 1, 1863, (when that statute was amended by adding a provision that any other investment of trust funds must be made under a judicial order, or else be at the risk of the trustee,) those who lent the fund at interest, on what was at the time considered by prudent men to be good security, were not held liable for a loss without their fault. Cobb, Dig. 333; Code 1861, § 2308; Brown v. Wright, 39 Ga. 96; Moses v. Moses, 50 Ga. 9, 33.

In Alabama the supreme court in Bryant v. Craig, 12 Ala. 354, 359, having intimated that a guardian could not safely invest upon either real or personal security without an order of court, the legislature, from 1852, authorized guardians and trustees to invest on bond and mortgage, or on good personal security, with no other limit than fidelity and prudence might require. Code 1852, § 2024; Code 1867, § 2426; Foscue v. Lyon, 55 Ala. 440, 452.

The rules of investment varying so much in the different states, it becomes necessary to consider by what law the management and investment of the ward's property should be governed. As a general rule (with some exceptions not material to the consideration of this case) the law of the domicile governs the status of a person, and the disposition and management of his movable property. The domicile of an infant is universally held to be the fittest place for the appointment of a guardian of his person and estate; although, for the protection of either, a guardian may be appointed in any state where the person or any property of an infant may be found. On the continent of Europe, the guardian appointed in the state of the domicile of the ward is generally recognized as entitled to the control and dominion of the ward and his movable property every where, and guardians specially appointed in other states are responsible to the principal guardian. By the law of England and of this country, a guardian appointed by the courts of one state has no authority over the ward's person or property in another state, except so far as allowed by the comity of that state, as expressed through its legislature or its courts; but the tendency of modern statutes and decisions is to defer to the law of the domicile, and to support the authority of the guardian appointed there. Hoyt v. Sprague, 103 U.S. 613, 631, and authorities cited; Morrell v. Dickey, 1 Johns. Ch. 153; Woodworth v. Spring, 4 Allen, 321; Milliken v. Pratt, 125 Mass. 374, 377, 378; Leonard v. Putnam, 51 N. H. 247; Com. v. Rhoads, 37 Pa. St. 60; Sims v. Renwick, 25 Ga. 58; Dicey, Dom. 172-176; Westl. Int. Law, (2d Ed.) 48-50; Whart. Confl. Laws, (2d Ed.) §§ 259-268. An infant cannot change his own domicile. As infants have the domicile of their father, he may change their domicile by changing his own; and after his death the mother, while she remains a widow, may likewise, by changing her domicile, change the domicile of the infants; the domicile of the children, in either case, following the independent domicile of their parent. Kennedy v. Ryall, 67 N. Y. 379; Potinger v. Wightman, 3 Mer. 67; Dedham v. Natick, 16 Mass. 135; Dicey, Dom. 97-99. But when the widow, by marrying again, acquires the domicile of a second husband, she does not, by taking her children by the first husband to live with her there, make the domicile which she derives from the second husband their domicile; and they retain the domicile which they had, before her second marriage, acquired from her or from their father. Cumner v. Milton, 3 Salk. 259; S.C.. Holt, 578; Freetown v. Taunton, 16 Mass. 52; School Directors v. James, 2 Watts & S. 568; Johnson v. Copeland, 35 Ala. 521; Brown v. Lynch, 2 Bradf. 214; Mears v. Sinclair, 1 West Va. 185; Pot. Introduction Generale aux Coutumes, No. 19; 1 Burge, Col. Law, 39; 4 Phillim. Int. Law, (2d Ed.) § 97.

The preference due to the law of the ward's domicile, and the importance of a uniform administration of his whole estate, require that, as a general rule, the management and investment of his property should be governed by the law of the state of his domicile, especially when he actually resides there, rather than by the law of any state in which a guardian may have been appointed or may have received some property of the ward. If the duties of the guardian were to be exclusively regulated by the law of the state of his appointment, it would follow that in any case in which the temporary residence of the ward was changed from state to state, from considerations of health, education, pleasure, or convenience, and guardians were appointed in each state, the guardians appointed in the different states, even if the same persons, might be held to diverse rules of accounting for different parts of the ward's property. The form of accounting, so far as concerns the remedy only, must, indeed, be according to the law of the court in which relief is sought; but the general rule by which the guardian is to be held responsible for the investment of the ward's property is the law of the place of the domicile of the ward. Bar, Int. Law, § 106, (Gillespie's translation,) p. 438; Whart. Confl. Laws, § 259. It may be suggested that this would enable the guardian, by changing the domicile of his ward, to choose for himself the law by which he should account. Not so. The father, and after his death the widowed mother, being the natural guardian, and the person from whom the ward derives his domicile, may change that domicile. But the ward does not derive a domicile from any other than a natural guardian. A testamentary guardian nominated by the father may have the same control of the ward's domicile that the father had. Wood v. Wood, 5 Paige, 596, 605. And any guardian, appointed in the state of the domicile of the ward, has been generally held to have the power of changing the ward's domicile from one county to another within the same state and under the same law. Cutts v. Haskins, 9 Mass. 543; Holyoke v. Haskins, 5 Pick. 20; Kirkland v. Whately, 4 Allen, 462; Anderson v. Anderson, 42 Vt. 350; Ex parte Bartlett, 4 Bradf. 221; The Queen v. Whitby, L. R. 5 Q. B. 325, 331. But it is very doubtful, to say the least, whether even a guardian appointed in the state of the domicile of the ward (not being the natural guardian or a testamentary guardian) can remove the ward's domicile beyond the limits of the state in which the guardian is appointed, and to which his legal authority is confined. Douglas v. Douglas, L. R. 12 Eq. 617, 625; Daniel v. Hill, 52 Ala. 430; Story, Confl. Laws, § 506, note; Dicey, Dom. 100, 132. And it is quite clear that a guardian appointed in a state in which the ward is temporarily residing, cannot change the ward's permanent domicile from one state to another. The case of such a guardian differs from that of an executor of, or a trustee under, a will. In the one case, the title in the property is in the executor or the trustee; in the other, the title in the property is in the ward, and the guardian has only the custody and management of it, with power to change its investment. The executor or trustee is appointed at the domicile of the testator; the guardian is most fitly appointed at the domicile of the ward, and may be appointed in any state in which the person or any property of the ward is found. The general rule which governs the administration of the property in the one case may be the law of the domicile of the testator; in the other case, it is the law of the domicile of the ward.

As the law of the domicile of the ward has no extraterritorial effect, except by the comity of the state where the property is situated, or where the guardian is appointed, it cannot, of course, prevail against a statute of the state in which the question is presented for adjudication, expressly applicable to the estate of a ward domiciled elsewhere. Hoyt v. Sprague, 103 U.S. 613. Cases may also arise with facts so peculiar or so complicated as to modify the degree of influence that the court in which the guardian is called to account may allow to the law of the domicile of the ward, consistently with doing justice to the parties before it. And a guardian, who had in good faith conformed to the law of the state in which he was appointed, might, perhaps, be excused for not having complied with stricter rules prevailing at the domicile of the ward. But in a case in which the domicile of the ward has always been in a state whose law leaves much to the discretion of the guardian in the matter of investments, and he has faithfully and prudently exercised that discretion with a view to the pecuniary interests of the ward, it would be inconsistent with the principles of equity to charge him with the amount of the moneys invested, merely because he has not complied with the more rigid rules adopted by the courts of the state in which he was appointed. The domicile of William W. Sims, during his life and at the time of his death in 1850, was in Georgia. This domicile continued to be the domicile of his widow and of their infant children until they acquired new ones. In 1853 the widow, by marrying the Rev. Mr. Ambercrombie, acquired his domicile. But she did not, by taking the infants to the home, at first in New York and afterwards in Connecticut, of her new husband, who was of no kin to the children, was under no legal obligation to support them, and was, in fact, paid for their board out of their property, make his domicile, or the domicile derived by her from him, the domicile of the children of the first husband. Immediately upon her death in Connecticut, in 1859, these children, both under 10 years of age, were taken back to Georgia to the house of their father's mother and unmarried sister, their own nearest surviving relatives; and they continued to live with their grandmother and aunt in Georgia until the marriage of the aunt in January, 1860, to Mr. Micou, a citizen of Alabama, after which the grandmother and the children resided with Mr. and Mrs. Micou at their domicile in that state.

Upon these facts, the domicile of the children was always in Georgia from their birth until January, 1860, and thenceforth was either in Georgia or in Alabama. As the rules of investment prevailing before 1863 in Georgia and in Alabama did not substantially differ, the question in which of those two states their domicile was is immaterial to the decision of this case; and it is therefore unnecessary to consider whether their grandmother was their natural guardian, and as such had the power to change their domicile from one state to another. See Hargrave's note 66 to Co. Litt. 88b; Reeve, Dom. Rel. 315; 2 Kent, Comm. 219; Code Ga. 1861, §§ 1754, 2452; Darden v. Wyatt, 15 Ga. 414. Whether the domicile of Lamar in December, 1855, when he was appointed in New York guardian of the infants, was in New York or in Georgia, does not distinctly appear, and is not material; because, for the reasons already stated, wherever his domicile was, his duties as guardian in the management and investment of the property of his wards were to be regulated by the law of their domicile.

It remains to apply the test of that law to Lamar's acts or omissions with regard to the various kinds of securities in which the property of the wards was invested.

1. The sum which Lamar received in New York in money from Mrs. Abercrombie he invested in 1856 and 1857 in stock of the Bank of the Republic at New York, and of the Bank of Commerce at Savannah, both of which were then, and continued till the breaking out of the war, in sound condition, paying good dividends. There is nothing to raise a suspicion that Lamar, in making these investments, did not use the highest degree of prudence; and they were such as by the law of Georgia or of Alabama he might properly make. Not is there any evidence that he was guilty of neglect in not withdrawing the investment in the stock of the Bank of Commerce at Savannah before it became worthless. He should not, therefore, be charged with the loss of that stock. The investment in the stock of the Bank of the Republic of New York being a proper investment by the law of the domicile of the wards, and there being no evidence that the sale of that stock by Lamar's order in New York, in 1862, was not judicious, or was for less than its fair market price, he was not responsible for the decrease in its value between the times of its purchase and of its safe. He had the authority, as guardian, without any order of court, to sell personal property of his ward in his own possession, and to reinvest the proceeds. Field v. Schieffelin, Johns. Ch. 150; Ellis v. Essex Merrimack Bridge, 2 Pick. 243. That his motive in selling it was to avoid its being confiscated by the United States, does not appear to us to have any bearing on the rights of these parties. And no statute under which it could have been confiscated has been brought to our notice. The act of July 17, 1862, c. 195, § 6, cited by the appellant, is limited to property of persons engaged in or abetting armed rebellion, which could hardly be predicated of two girls under 13 years of age. 12 St. 591. Whatever liability, criminal or civil, Lamar may have incurred or avoided as towards the United States, there was nothing in his selling this stock, and turning it into money, of which his wards had any right to complain.

As to the sum received from the sale of the stock in the Bank of the Republic, we find nothing in the facts agreed by the parties, upon which the case was heard, to support the argument that Lamar, under color of protecting his wards' interests, allowed the funds to be lent to cities and other corporations which were aiding in the rebellion. On the contrary, it is agreed that that sum was applied to the purchase in New York of guarantied bonds of the cities of New Orleans, Memphis, and Mobile, and of the East Tennessee & Georgia Railroad Company; and the description of those bonds, in the receipt afterwards given by Micou to Lamar, shows that the bonds of that railroad company, and of the cities of New Orleans and Memphis, at least, were issued some years before the breaking out of the rebellion, and that the bonds of the city of Memphis and of the railroad company were, at the time of their issue, indorsed by the state of Tennessee. The company had its charter from that state, and its road was partly in Tennessee and partly in Georgia. Tenn. St. 1848, c. 169. Under the discretion allowed to a guardian or trustee by the law of Georgia and of Alabama, he was not precluded from investing the funds in his hands in bonds of a railroad corporation, indorsed by the state by which it was chartered, or in bonds of a city. As Lamar, in making these investments, appears to have used due care and prudence, having regard to the best pecuniary interests of his wards, the sum so invested should be credited to him in this case, unless, as suggested at the argument, the requisite allowance has already been made in the final decree of the circuit court in the suit brought by the representative of the other ward, an appeal from which was dismissed by this court for want of jurisdiction in 104 U.S. 465.

2. Other moneys of the wards in Lamar's hands, arising either from dividends which he had received on their behalf, or from interest with which he charged himself upon sums not invested, were used in the purchase of bonds of the Confederate states, and of the state of Alabama. The investment in bonds of the Confederate states was clearly unlawful, and no legislative act or judicial decree or decision of any state could justify it. The so-called Confederate government was in no sense a lawful government, but was a mere government of force, having its origin and foundation in rebellion against the United States. The notes and bonds issued in its name and for its support had no legal value as money or property, except by agreement or acceptance of parties capable of contracting with each other, and can never be regarded by a court sitting under the authority of the United States as securities in which trust funds might be lawfully invested. Thorington v. Smith, 8 Wall. 1; Head v. Starke, Chase, 312; Horn v. Lockhart, 17 Wall. 570; Confederate Note Case, 19 Wall. 548; Sprott v. United States, 20 Wall. 459; Fretz v. Stover, 22 Wall. 198; Alexander v. Bryan, 110 U.S. 414; S.C.. 4 SUP. CT. REP. 107. An infant has no capacity, by contract with his guardian, or by assent to his unlawful acts, to affect his own rights. The case is governed in this particular by the decision in Horn v. Lockhart, in which it was held that an executor was not discharged from his liability to legatees by having invested funds, pursuant to a statute of the state, and with the approval of the probate court by which he had been appointed, in bonds of the Confederate states, which became worthless in his hands. Neither the date nor the purpose of the issue of the bonds of the state of Alabama is shown, and it is unnecessary to consider the lawfulness of the investment in those bonds, because Lamar appears to have sold them for as much as he had paid for them, and to have invested the proceeds in additional Confederate states bonds, and for the amount thereby lost to the estate he was accountable.

3. The stock in the Mechanics' Bank of Georgia, which had belonged to William W. Sims in his life-time, and stood on the books of the bank in the name of his administratrix, and of which one-third belonged to her, as his widow, and one third to each of the infants, never came into Lamar's possession; and upon a request made by him, the very next month after his appointment, the bank refused to transfer to him any part of it. He did receive and account for the dividends; and he could not, under the law of Georgia concerning foreign guardians, have obtained possession of property of his wards within that state without the consent of the ordinary. Code 1861, §§ 1834-1839. The attempt to charge him for the value of the principal of the stock must fail for two reasons: First. This very stock had not only belonged to the father of the wards in his life-time, but it was such stock as a guardian or trustee might properly invest in by the law of Georgia. Second. No reason is shown why this stock, being in Georgia, the domicile of the wards, should have been transferred to a guardian who had been appointed in New York during their temporary residence there.

The same reasons are conclusive against charging him with the value of the bank stock in Georgia, which was owned by Mrs. Abercrombie in her own right, and to which Mr. Abercrombie became entitled upon her death. It is therefore unnecessary to consider whether there is sufficient evidence of an immediate surrender by him of her interest to her children.

both the decrees of the circuit court in this case must be     reversed, and the case remanded for further proceedings in      conformity with this opinion.


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Carter v. Carusi

The Revised Statutes of the United States relating to the District of Columbia provide as follows:

'Sec. 715. If any person or corporation shall contract to receive a greater rate of interest than ten per cent. upon any contract in writing, or six per cent. upon any verbal contract, such person or corporation shall forfeit the whole of the interest so contracted to be received, and shall be entitled only to recover the principal sum due to such person or corporation.

'Sec. 716. If any person or corporation shall directly or indirectly take or receive any greater amount of interest than is provided for in this chapter upon any contract or agreement whatever, it shall be lawful for the person or his personal representative or the corporation paying the same to sue for and recover all the interest paid upon any such contract or agreement from him or his personal representative or from the corporation receiving such unlawful interest, but the suit to recover back such unlawful interest shall be brought within one year after such unlawful interest shall have been paid or taken.'

The transactions out of which the cause of action in this case and the defenses thereto arose, occurred in the District of Columbia while these sections were in force. The suit was brought October 16, 1878, by the defendants in error, executors of Nathaniel Carusi, deceased, against Carter, the plaintiff in error, as indorser upon a note, dated May 29, 1873, made by Joseph Daniels, for the payment to Carter of $4,000 three years after date, with interest at the rate of 8 per cent. per annum.

Carter filed six pleas, the first five of which only it is material to notice. The first two pleas were, in substance, the general issue. The third plea averred that the plaintiffs ought not to recover $992 of the amount of the note sued on, with the interest on said sum, because Carusi, the testator, after becoming the owner of the note, made, on February 4, 1876, a verbal agreement with Daniels, the maker, by which he contracted to receive from Daniels interest at the rate of 10 per cent. per annum, payable quarterly, upon the full amount of the principal and interest due on the note at its maturity, to-wit, $4,960, and, in pursuance of such agreement, did, between February 4, 1876, and January 1, 1878, receive, as illegal interest, eight payments of $124 each, amounting to $992. The fourth plea was similar to the third, except that it averred that the installments of illegal interest were paid, some to Carusi, the testator, in his life-time, and the others, after his death, to the plaintiffs. The fifth plea averred that the defendant was only liable on the note as indorser; that on June 1, 1876, Carusi, the testator, in consideration of the promise of Daniels, the maker, to pay the usurious interest of 10 per cent. on the note, in quarterly installments of $124 each, agreed to extend, and did extend, the time of payment from quarter to quarter as long as Daniels paid the quarterly installments of usurious interest, and that Daniels paid said quarterly installments until January 1, 1878, and that the extension of the time for the payment of the note was agreed to by Carusi without the consent of the defendant Carter. Issue was taken on the pleas, and upon the trial in special term the jury returned a verdict for the plaintiffs, upon which the court rendered judgment. The case was carried, by writ of error, to the supreme court of the District of Columbia, in general term, by which the judgment of the court in special term was affirmed. The present writ of error brings up that judgment for review.

It appeared by the bill of exceptions taken upon the trial that the making and indorsing of the note having been admitted by the counsel for the defendant, the plaintiffs gave evidence tending to prove that demand for payment thereof was duly made upon the maker, and notice of the dishonor was duly given by the plaintiffs to the defendant, and the plaintiffs rested. Thereupon the defendant gave evidence tending to prove that Carusi, the testator, in his life-time, and his executors, after his death, received, after the maturity of the note sued on, from Daniels, the maker, in quarterly installments, interest thereon down to September 1, 1877, at the rate of 10 per cent. per annum, calculated upon the amount of principal and interest due on the note at maturity, and that such installments amounted to $621.10, but that the payments were not made in pursuance of any contract, verbal or written, between Carusi, the testator, and Daniels, or the plaintiffs and Daniels. Thereupon the plaintiffs introduced evidence tending to show the following facts: 'That Joseph Daniels, the maker of the note sued on, had, in or about the month of January, 1876, negotiated a loan of $10,000 from' Carusi, 'the testator' of the plaintiffs, upon which he agreed to pay interest quarterly at the rate of 10 per cent. per annum, and to secure which he offered to execute a deed of trust on certain property in the city of Washington. This property was incumbered by a deed of trust made by Daniels to secure the note sued on, and two others of the same date, made also by him, for $4,000 each, payable to Carter, the first in one and the other in two years. Carusi, learning that the property was thus incumbered, declined to lend the money until the incumbrances were removed; but Daniels promising to do this, and urging Carusi 'to hold said negotiation open' until he could do it, the $10,000 was 'deposited in bank' by Carusi 'and reserved for Daniels.' Carter, being still the holder of the second and third notes executed to him by Daniels, and the second being now overdue, threatened to sell the real estate covered by the deed of trust given to secure them. Thereupon, as a temporary expedient to relieve Daniels, Carusi, the testator, agreed to purchase the third note which had not matured, and the defendant Carter agreed to extend the time for the payment of the second note. The third note, which is the one sued on in this case, was purchased accordingly before maturity by Carusi, and was indorsed by Carter, the payee, who received therefor from Carusi $4,853, that sum being the principal with the interest due thereon at the date of its transfer. Daniels voluntarily offered to pay interest at the rate of 10 per cent. per annum on the amount both of principal and interest due on the note at maturity, that amount being $4,960, but Carusi declined to receive the same without first obtaining the consent of the defendant thereto, and he communicated to the defendant the offer of Daniels to pay interest as aforesaid, and the defendant consented that Carusi might receive the same, and no payment of interest by Daniels was received by the plaintiffs without their first having obtained the consent of Carter thereto. The plaintiffs further gave evidence tending to prove that there was no agreement between them or their testator and Daniels for indulgence or extension of time for payment of the note, or for forbearance to sue thereon.

Upon this state of the pleadings and evidence the defendant requested the court to charge the jury-First, that if either the third or fourth plea was proven, their verdict should be for $4,000, the principal of the note, less whatever amount the jury might regard as proven to have been paid by Daniels in the nature of interest to the testator or to the plaintiffs; second, that if the jury found that either the testator or the plaintiffs at any time after the maturity of the note in suit received interest thereon at a greater rate than 6 per cent. per annum, the receipt of such interest was illegal, and would prevent the plaintiffs from recovering more than the principal of the note, less all amounts of interest paid on account of it. The court refused these charges, and instructed the jury that the only remedy for the recovery of money paid for interest in excess of the interest allowed by law is suit brought, under section 716 of the Revised Statutes of the District of Columbia, within one year, and that the prohibition contained in section 715 of the Revised Statutes of the District of Columbia applies exclusively to cases in which illegal interest has been contracted for, but not paid.

The errors assigned were the refusal of the court to give the instructions prayed for by the defendant, and the instructions given by the court.

H. O. Claughton, for plaintiff in error.

W. D. Davidge, for defendant in error.

WOODS, J.

title: Carter v. Carusi


text: Talk:Carter v. Carusi

title: Talk:Carter v. Carusi


text:
Carter v. Carusi/Opinion of the Court

We are of opinion that there is no error in the charges given, or in the refusal to charge as requested. The sections of the Revised Statutes relating to the District of Columbia were correctly construed by the court. Their meaning is plain. Section 715 provides for the case where the party contracts to receive a greater rate of interest than 10 per cent, upon a written, and 6 per cent. upon a verbal, contract, and declares that he shall forfeit the whole interest so contracted to be received, and shall recover only his principal debt. The evidence tended to show that the payment by Daniels to Carusi, the testator, of 10 per cent. interest was voluntary, and that there was no contract for its payment, or agreement for indulgence or extension of time for payment, on account thereof. It is plain that under this section the plaintiff in error was not entitled to the charges requested by him. Section 716 provides for the recovery, by the person who has paid a greater rate of interest than is allowed by law, upon any agreement or contract, of all interest paid on such contract or agreement, provided he brings suit to recover the same within one year after the unlawful interest shall have been paid. This section, it is also clear, brings no aid to the plaintiff in error. This is not a suit to recover back usurious interest paid, but to enforce the collection of the note upon which it is contended the usurious interest was received. The plaintiff in error did not pay the unlawful interest, but it was paid by Daniels, and it was paid by him more than a year before this suit was brought, and more than a year before the defense set up by the plaintiff in error. If Daniels himself, who paid the alleged usurious interest, had brought a suit to recover it back, his action would have failed, because not begun within the time prescribed by the statute. The plaintiff in error, therefore, who has paid no interest, legal or illegal, is in no better position, at least, than Daniels, and cannot set up the provisions of section 716 in his defense. Under neither section is the plaintiff in error entitled to any relief. His counsel, however, contend that if he is not entitled to relief under the statute, his common-law right to reclaim or set off usurious interest paid still remains to him. But this court has repeatedly decided against this contention of the plaintiff in error.

In ''Farmers', etc., Nat. Bank v. Dearing'', 91 U.S. 29, the court declared that the penalty imposed on a national bank for taking a greater rate of interest than that allowed by the national banking act, was the loss of the entire interest, and that no loss of the entire debt was incurred by the bank as a penalty by reason of the provisions of the usury law of a state. So, in Barnet v. National Bank, 98 U.S. 555, it was held that in a suit by a national bank against the parties to a bill of exchange discounted by it, the assignees of an acceptor could not, having intervened as parties, set up by way of counter-claim or set-off that the bank knowingly took and was paid a greater rate of interest thereon than that allowed by law, but that, the national banking act having prescribed as a penalty for the taking of such unlawful interest that the person paying the same might, in an action of debt against the bank, recover back twice the amount so paid, he could have redress in no other form or mode of procedure. So, in Driesbach v. National Bank, 104 U.S. 52, it was held that usurious interest paid to a national bank on renewing a series of notes, of which those in suit were the last, could not be applied in satisfaction of the principal of the debt. See, also, Cook v. Lillo, 103 U.S. 792, and Walsh v. Mayer, 111 U.S. 31; S.C.. 4 SUP. CT. REP. 260. In the case last cited it was held generally that a statute which prescribes a legal rate of interest, and forbids the taking of a higher rate, under penalty of a forfeiture of the entire interest, and declares that the party paying such higher rate of interest may recover it back by suit brought within 12 months, confers no authority to apply the usurious interest actually paid to the discharge of the principal debt, and that a suit for its recovery, brought within 12 months, was the exclusive remedy. There was, therefore, no error in the refusal of the court to charge as requested or in the charge given.

It is further assigned for error that the court neglected to give the jury any instruction upon the issue raised by the fifth plea, the plaintiff in error contending that there was evidence to support that plea, and that the court, though not requested, should have submitted to the jury the issue of fact raised by the plea. We look in vain through the record to find any evidence that would have justified the jury in returning a verdict for the defendant on the fifth plea. On the contrary, the evidence tended strongly to disprove it The court might, therefore, without injustice to the defendant, have withdrawn from the jury the consideration of the fifth plea. Parks v. Ross, 11 How. 373; Hickman v. Jones, 9 Wall. 197; Pleasants v. Fant, 22 Wall. 116; Commissioners v. Clark, 94 U.S. 278. But even if there had been evidence to support the plea, as it does not appear that the court was requested to charge the jury upon the issue raised thereby, the failure of the court to do so cannot be assigned for error. Express Co. v. Kountz, 8 Wall. 342.

We find no error in the record. The judgment of the supreme court of the District of Columbia must therefore be affirmed.

title: Carter v. Carusi/Opinion of the Court


text: Talk:Carter v. Carusi/Opinion of the Court


text:
Birdsell v. Shaliol

W. W. Leggett, for appellants.

No brief for appellees.

GRAY, J.

title: Birdsell v. Shaliol


text: Talk:Birdsell v. Shaliol

title: Talk:Birdsell v. Shaliol


text:
Birdsell v. Shaliol/Opinion of the Court

This was a bill in equity for an injunction and damages for the infringement of a patent for an improvement in machines for threshing and hulling clover-seed. The answer set up a former decree as an estoppel. The case was heard in the circuit court upon a statement of facts agreed by the parties, by which it appeared to be as follows: Birdsell was the inventor and patentee of the improvement, and granted to the Birdsell Manufacturing Company, a corporation of which he was the president and active manager, and owner of a large part of the stock, an exclusive oral license to make, vend, and use his invention, but did not give it authority to license others to make, vend, and use. The corporation paid him no royalty, but set apart a sinking fund to defray the expense of defending the patent in the courts. A former suit in equity was brought by Birdsell against the Ashland Machine Company for an infringement of his patent by making and selling large unmbers of machines. The Birdsell Manufacturing Company was not made a party to that suit, but participated in instituting it and carrying it on till its close. In that suit a perpetual injunction was decreed, and the case was referred to a master, before whom damages sustained by the Birdsell Manufacturing Company were proved and claimed, and who reported that the defendant had made no profits for which it should account, and that, if any damages had been sustained, they had been sustained by the Birdsell Manufacturing Company, a stranger to the suit, and that Birdsell, the plaintiff, was entitled to recover only one dollar, as nominal damages. The Ashland Machine Company afterwards, pending that suit, became insolvent; and a decree was rendered in Birdsell's favor according to the master's report, for nominal damages and for costs, which were paid by that company. The present suit was brought by Birdsell and the Birdsell Manufacturing Company against Gerhart Shaliol and John Feikert, who had used one of the machines manufactured by the Ashland Machine Company, and embraced in the master's report in the suit against that company. The circuit court held that in the former suit the Birdsell Manufacturing Company, although not named as a party plainfiff in the bill, was in reality a co-plaintiff with Birdsell, and that, by the final decree in that suit, and the recovery and payment of nominal damages, Birdsell and the Birdsell Manufacturing Company were estopped to maintain the present bill; and therefore dismissed the bill, with costs. The plaintiffs appealed to this court.

The plaintiffs in the present suit-Birdsell, the patentee, in whom is the legal title, and the Birdsell Manufacturing Company, his licensee, in whom is the beneficial interest-make three objections to the decree set up by way of estoppel: (1) That the Birdsell Manufacturing Company was not a party; (2) that the present defendants were not parties; (3) that only nominal damages were recovered and paid.

1. A licensee of a patent cannot bring a suit in his own name, at law or in equity, for its infringement by a stranger; an action at law for the benefit of the licensee must be brought in the name of the patentee alone; a suit in equity may be brought by the partentee and the licensee together. Gayler v. Wilder, 10 How. 477, 495; Littlefield v. Perry, 21 Wall. 205, 223; Paper Bag Cases, 105 U.S. 766, 771. In a suit in equity brought by the patentee alone, if the defendant seasonably objected to the non-joinder of the licensee, the court might, as Judge LOWELL did in Hammond v. Hunt, 4 Ban. & A. 111, order him to be joined. But when a suit in equity has been brought and prosecuted, in the name of the patentee alone, with the licensee's consent and concurrence, to final judgment, from which, if for too small a sum, an appeal might have been taken in the name of the patentee, we should hesitate to say that the licensee, merely because he was not a formal plaintiff in that suit, could bring a new suit to recover damages against the same defendant for the same infringement.

2. It is a more serious question whether a decree in favor of the patentee, upon a bill in equity against one person for making and selling a patented machine, is a bar to a subsequent suit by the patentee against another person for afterwards using the same machine within the term of the patent. A license from the patentee to make, use, and sell machines gives the licensee the right to do so, within the scope of the license, throughout the term of the patent; and has the same effect upon machines sold by the licensee under authority of his license, that a sale by the patentee has upon machines sold by himself, of wholly releasing them from the monopoly, and discharging all claim of the patentee for their use by anybody; because such is the effect of the patentee's voluntary act of licensing or selling, in consideration of the sum paid him for the license or sale. Adams v. Burke, 17 Wall. 453. But an infringer does not, by paying damages for making and using a machine in infringement of a patent, acquire any right himself to the future use of the machine. On the contrary, he may, in addition to the payment of damages for past infringement, be restrained by injunction from further use, and, when the whole machine is an infringement of the patent, be ordered to deliver it up to be destroyed. Suffolk Co. v. Hayden, 3 Wall. 315, 320; Root v. Railway Co. 105 U.S. 189, 198; Needham v. Oxley, 8 Law T. Rep. (N. S.) 604; S.C.. 2 New Rep. Eq. & C. L. 388; Frearson v. Loe, L. R. 9 Ch. Div. 48, 67. No more does one, who pays damages for selling a machine in infringement of a patent, acquire for himself or his vendee any right to use that machine. In the case of a license or a sale by the patentee, the rights of the licensee or the vendee arise out of contract with him. In the case of infringement, the liability of infringers arises out of their own wrongful invasion of his rights. The recovery and satisfaction of a judgment for damages against one wrong-doer do not ordinarily confer, upon him or upon others, the right to continue or repeat the wrong.

This view is in accord with the judgment of Vice Chancellor WOOD (after wards Lord Chancellor HATHERLEY) in two suits brought by a patentee, the one against the manufacturer, and the other against the user, where the plaintiff asked for an injunction against each, for an account against the manufacturer, and for damages against the user, and declined to accept an offer of the user to pay him the like royalties that other persons paid. It was argued in behalf of the user that the patentee was not entitled to damages against him, as well as to an account against the manufacturer, and could not have an account against the seller without adopting the sale, and, if he adopted the sale, had no right to get anything from the purchaser. But the vice chancellor held that the plaintiff was entitled to an injunction, to an account, or, upon his waiving that, to damages against the manufacturer, and also to damages against the user, and said: 'With regard to the damages, it has never, I think, been held in this court that an account, directed against a manufacturer of a patented article, licenses the use of that article in the hands of all the purchasers. The patent is a continuing patent, and I do not see why the article should not be followed in every man's hand until the infringement is got rid of. So long as the article is used, there is continuing damage.' 'As to the royalties, I cannot compel the plaintiff to accept the same royalty from these defendants as he receives from others. I cannot in the decree do less than give the plaintiff his full right, and I cannot bargain for him what he may choose or may not choose to do.' Penn v. Bibby, L. R. 3 Eq. 308; S.C.. 15 Wkly. Rep. 192.

3. If one person is in any case exempt from being sued for damages for using the same machine for the making and selling of which damages have been recovered against and paid by another person, it can only be when actual damages have been paid, and upon the theory that the plaintiff has been deprived of the same property by the acts of two wrong-doers, and has received full compensation from one of them. In that view, the case of the patentee, whose right of property under his patent had been invaded, would be analogous to that of one from whom personal property had been taken. But, according to the law of England, as well as of America, the owner of a chattel, which others have taken from him and converted to their own use, is not deprived of his property therein by recovering judgment for damages against any or all of them, without actual satisfaction by somebody. By the law of England, indeed, as declared by its courts, upon technical grounds, the owner of a chattel, who has recovered judgment for its value in trover against one of two joint tort-feasors, cannot, although that judgment remains unsatisfied, bring a like action against the other for the same cause. But, even by that law, such a judgment against the one, without satisfaction, does not vest the property in the chattel in him, or bar a subsequent action against the other for continuing to detain the chattel. HOLROYD and LITTLEDALE, JJ., in Morris v. Robinson, 5 Dowl. & R. 34, 47, 48; S.C.. 3 Barn. & C. 196, 206, 207; Brinsmead v. Harrison, L. R. 6 C. P. 584, and L. R. 7 C. P. 547, 554; Ex parte Drake, L. R. 5 Ch. Div. 866. In Brinsmead v. Harrison, Mr. Justice WILLES observed that to say that the mere obtaining judgment for nominal damages vests the property in the defendant would be an absurdity. L. R. 6 C. P. 588. By our law, judgment against one joint trespasser, without full satisfaction, is no bar to a suit against another for the same trespass. Lovejoy v. Murray, 3 Wall. 1. The reasons are therefore stronger, if possible, here than in England for holding that a judgment for nominal damages against one wrongdoer does not bar a suit against another for a continuance of the wrong.

The result is that, in any view of the case, the decree of the circuit court dismissing this bill was erroneous, and must be reversed.


text: Talk:Birdsell v. Shaliol/Opinion of the Court


text:
Arthur v. Morgan

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

Edward Hartley and Walter H. Coleman, for defendant in error.

BLATCHFORD, J.

title: Arthur v. Morgan


text: Talk:Arthur v. Morgan

title: Talk:Arthur v. Morgan


text:
Arthur v. Morgan/Opinion of the Court

Julia Morgan imported into the port of New York, from Europe, in May, 1876, a carriage on which, at the appraised value of $667, the collector exacted a duty of 35 per cent., amounting to $233.45, under the following provision of Schedule M of section 2504 of the Revised Statutes, p. 474, (2d Ed.:) 'Carriages and parts of carriages: thirty-five per centum ad valorem.' She protested in writing to the collector against paying the 35 per cent. duty, on the ground that the carriage was 'personal effects,' and had been used by her 'over a year,' and that she had shown that fact by affidavit; and that, under section 2505 of the Revised Statutes, 'personal effects in actual use' were free from duty. She appealed from the decision of the collector to the secretary of the treasury, and he affirmed it, and then she brought this suit. At the trial the above facts were shown, and the plaintiff proved that the affidavit referred to was to the effect that the carriage was old, and had been in use by her abroad for more than one year before its importation; that the affidavit was deposited with the defendant, and transmitted by him to the secretary, with the appeal; that she was a native citizen of the United States, and had lived abroad some three years, as a temporary resident, prior to the importation, and had returned to this country about two weeks before the importation; that the carriage had been purchased by her in France, and had been used by her as a family carriage abroad for more than one year before its importation; and that it was imported by her for her own use in this country, and was not intended for any other person or persons, or for sale. The defendant offered no testimony, but moved the court to direct a verdict for the defendant on the following grounds: 'First, that no evidence was offered to support the claim made in the plaintiff's protest, that the carriage was a personal effect in actual use, within the meaning of that term as used in section 2505 of the Revised Statutes of the United States; second, that the said protest was insufficient to raise the point that the carriage was included within the meaning of the term 'household effects,' as that term is used in section 2505 of the Revised Statutes of the United States; third, that, even if the protest be considered sufficient to raise the last point, the carriage in question cannot properly be held to be included within the true sense and meaning of the term 'household effects,' as that term is used in section 2505 of the Revised Statutes of the United States.'

The court denied the motion on each ground, and the defendant excepted to each ruling. A verdict was rendered for the plaintiff, the court having directed it on the ground that on the testimony and within the meaning of section 2505, the carriage was 'a household effect,' and the exaction of duties was illegal. The defendant excepted to the direction, and, after a jugment against him, brought this writ of error.

It was provided by section 2505, Rev. St. 1874, that the importation of the following articles should be exempt from duty:

First. Page 484, (2d Ed.) 'Books, household effects, or libraries, or parts of libraries, in use, of persons or families from foreign countries, if used abroad by them not less than one year, and not intended for any other person or persons, nor for sale.'

Second. Page 487, (2d Ed.) 'Personal and household effects, not merchandise, of citizens of the United States dying abroad.'

Third. Page 489, (2d Ed.) 'Wearing apparel, in actual use, and other personal effects, (not merchandise,) professional books, implements, instruments, and tools of trade, occupation, or employment of persons arriving in the United States. But this exemption shall not be construed to include machinery or other articles imported for use in any mannfacturing establishment, or for sale.' By section 1 of the act of August 10, 1790, c. 39, (1 St. 181,) there were exempted from duty 'the clothes, books, household furniture, and the tools or implements of the trade or profession of persons who come to reside in the United States.' This exemption was continued by section 2 of the act of May 2, 1792, c. 27, (1 St. 260.) As to the above clause 1, Schedule I of the act of July 30, 1846, c. 74, (9 St. 49,) exempted from duty 'household effects, old and in use, of persons or families from foreign countries, if used abroad by them, and not intended for any other person or persons, or for sale.' The same exemption was continued in section 3 of the act of March 3, 1857, c. 98, (11 St. 194,) and in section 23 of the act of March 2, 1861, c. 68, (12 St. 195.) By section 22 of the act of July 14, 1870, c. 255, (16 St. 265, 268,) exemption was extended, in addition to 'household effects of persons and families returning or emigrating from foreign countries, which have been in actual use abroad by them, and not intended for any other person or persons, or for sale, not exceeding the value of five hundred dollars.' The above clause 1 first appeared in section 5 of the act of June 6, 1872, c. 315, (17 St. 234,) and is now in force as part of section 2503 of the Revised Statutes, by virtue of section 6 of the act of March 3, 1883, c. 121, (22 St. 518.) As to the above clause 2, section 9 of the act of August 30, 1842, c. 270, (5 St. 560,) exempted from duty 'books and personal and household effects, not merchandise, of citizens of the United States dying abroad.' Omitting the words 'books and,' this provision was repeated in Schedule I of the act of July 30, 1846, c. 74, (9 St. 49,) and in section 3 of the act of March 3, 1857, c. 98, (11 St. 194,) and in section 23 of the act of March 2, 1861, c. 68, (12 St. 195,) and is now in force as part of section 2503 of the Revised Statutes, by virtue of section 6 of the act of March 3, 1883, c. 121, (22 St. 520.) The history of clause 3 above is fully given in Astor v. Merritt, 111 U.S. 210; S.C.. 4 SUP. CT. REP. 413.

In June, 1876, the attorney general advised the secretary of the treasury that the words 'personal effects,' in clause 3 above, did not include carriages previously in use, but only such things as are worn, like apparel, upon the person, or are used in connection therewith; and shortly afterwards he advised the same officer that the words 'household effects,' in clause 1 above, did not include carriages used abroad not less than one year and intended for personal use here. 15 Op. 113, 125. On this construction the department has acted. The last opinion proceeded on the ground that early and repeated decisions in England had held that books, wares, horses, etc., did not pass under bequests of 'household goods and effects,' and that the express mention of books in clause 1, and the omission of other articles so determined not to be included under the general term 'household effects,' indicated that 'carriages' were not within the exemption. The word 'effects' means 'property or worldly substance.' When it is accompanied, in a will, by words of narrower import, the bequest, if not residuary, may be confined to species of property ejusdem generis with those previously described. But the analogies to be derived from wills are not strictly applicable to a case like the present, and no material aid can be derived from decisions in regard to wills. The construction of the words 'household effects' in a will often depends largely on the meaning of words in other provisions in the will, and upon the qualification by the word 'other,' as referring to specific articles before named, like the word 'other' in clause 3 above. In the present case the only direct qualification of 'effects' is 'household.'

Persons who dwell together as a family constitute a 'household.' In New York a statute exempted from execution a cow 'owned by any person being a householder.' In Woodward v. Murray, 18, Johns. 400, a judgment debtor, who owned a cow, had left his wife and children, they continuing to reside in the house he had occupied. While they were on the road, removing to the house of the wife's father, with the cow and their household furniture, the cow was seized on execution. The court held that the exemption continued so long as the wife and children remained together 'as a family,' and that they continued to be the debtor's 'household,' and he the 'householder.' The question for decision in this case is whether the carriage of the plaintiff fell under either of these heads: (1) Household effects in use of a person or a family from a foreign country, used abroad by the person or the family not less than one year, and not intended for any other person or persons, nor for sale; (2) personal effects, (not merchandise,) nor for sale, of a person arriving in the United States.

The carriage had been in use as a family carriage, abroad, by the plaintiff as owner for more than a year. She came from abroad after a temporary residence there of three years, and imported the carriage two weeks later for use here, and not for any other person, nor for sale. Was it 'household effects' or 'personal effects' of the plaintiff? We think that it fell within clause 1 and was 'household effects.' In the provision respecting the 'household effects' of persons or families, there is an evident intention to include articles which pertain to a person as a householder, or to a family as a household, which have been used abroad not less than a year, and are not intended for others, nor for sale. A carriage is peculiarly a family or household article. It contributes in a large degree to the health, convenience, comfort, and welfare of the householder or of the family. The statute is not limited to articles of household furniture, or to things whose place is necessarily within the four walls of a house. Clause 2 above uses the words 'personal and household effects.' This serves to show that, by the use of the words 'household effects' alone in clause 1, in the same section of the statute, something is intended different from 'personal effects,' and that those words embrace articles which the words 'personal effects' do not cover. So, too, if the words 'other personal effects' in clause 3 should be extended to embrace articles properly covered by the words 'household effects' in clause 1, such household effects would come in free, although not used abroad for a year, and the door would be opened wide for the introduction without duty of large numbers of articles as 'household effects' which it is intended should pay duty. We do not find it necessary in this case to consider any further the construction of the words 'other personal effects' in clause 3, because we place our decision on the ground that this carriage was 'household effects' of the plaintiff.

The protest claimed that the carriage was 'personal effects' in actual use, under section 2505, and, as such, free and not subject to the duty imposed on it, but did not claim it to be 'household effects.' The solicitor general concedes that the objection to the protest is a 'bare technicality,' and that its language could hardly mislead the officers. A proper protest, as well as an appeal, are prerequisites to the right to sue. Section 3011, Rev. St., as amended by the act of February 27, 1877, c. 69, (19 St. 247.) The protest must set forth 'distinctly and specifically' the grounds of objection to the decision of the collector as to the rate and amount of duties. Section 2931, Rev. St. This provision was taken from the act of June 30, 1864, c. 171, § 14, (13 St. 214,) and is substantially the same as that in the act of February 26, 1845, c. 22, (5 St. 727.) A protest is not required to be made with technical precision, but is sufficient if it shows fairly that the objection afterwards made at the trial was in the mind of the party and was brought to the knowledge of the collector, so as to secure to the government the practical advantage which the statute was designed to secure. Converse v. Burgess, 18 How. 413; Swanston v. Morton, 1 Curt. C. C. 294; Kriesler v. Morton, Id. 413; Burgess v. Converse, 2 Curt. C. C. 216; Steegman v. Maxwell, 3 Blatchf. 365; Frazee v. Moffitt, 20 Blatchf. 267; S.C.. 18 Fed. Rep. 584. This protest apprised the collector that the carriage was claimed to be free, under section 2505, as a carriage actually used abroad over a year. The 'household effects' clause was in the mind of the party, and the collector could not fail to so understand. The protest was sufficient. The judgment of the circuit court is affirmed.

title: Arthur v. Morgan/Opinion of the Court


text: Talk:Arthur v. Morgan/Opinion of the Court


text:
England v. Gebhardt

A. Q. Keasbey, for plaintiff in error.

John R. Emery, for defendant in error.

This is a writ of error brought under the act of March 3, 1875, c. 137, § 5, (18 St. 472,) to reverse an order of the circuit court remanding a suit at law to the state court from which it had been removed. The suit was begun by Jacob W. Gebhardt, the defendant in error, against Isaac W. England, the plaintiff in error, in the supreme court of New Jersey, and a summons was duly served on England. The pleadings were made up and issue joined in the state court. When that was done there was nothing in the record to show the citizenship of the parties, but on the sixth of September, 1883, which was in time, England filed a petition, accompanied by the necessary bond, for the removal of the suit to the circuit court of the United States for the district of New Jersey. The petition set forth that England was a citizen of New Jersey and Gebhardt a citizen of New York, both at the time of the commencement of the suit and at the time of the presentation of the petition. The removal was asked for solely on the ground of the citizenship of the parties. Upon the presentation of the petition the state court entered an order to the effect that it would proceed no further, and a copy of the record was filed in the circuit court on the twenty-fifth of September.

On the fourteenth of March, 1884, the following order was made in the cause: 'This cause, coming on to be heard on a motion to remand this cause to the New Jersey supreme court, in the presence of Joseph A. Beecher, attorney for the plaintiff, and of A. Q. Keasbey, attorney for the defendant, and the matter having been argued by the respective attorneys, and the court having taken time to consider the same, and the court being of opinion that there is not in said cause so attempted to be removed to this court a controversy between citizens of different states, according to the true intent and meaning of the act of congress in this behalf, it is now, * * * on motion of Joseph A. Beecher, ordered that the said motion be, and the same is hereby, granted, and this cause is remanded to the New Jersey supreme court to proceed therewith according to law; and it is further ordered that the said plaintiff do recover of the said defendant, Isaac W England, the costs of this motion, to be taxed.' The motion on which this order was made is not set out in the record There are, however, in the transcript what purport to be certain affidavits, sworn to in the months of November and December, 1883, and filed February 25, 1884, which have indorsed thereon, 'Affidavits, on motion to remand,' and there is also what purports to be the opinion of the judge denying the motion, from which it appears that 'the motion to remand this cause is founded upon the allegation that both the plaintiff and defendant were citizens of the state of New Jersey when the summons was issued and served, and the petition for removal was filed. It is resisted by the defendant upon the ground that at both of these periods of time the plaintiff was residing in, and was a citizen of, New York.' There is no bill of exceptions in the record, and no authentic finding or statement of the facts on which the order to remand was made, or of the evidence submitted by the parties. Neither does the order to remand itself refer in any manner to the affidavits as the foundation of the action which was taken.

[Argument of Counsel from 504 intentionally omitted]

WAITE, C. J.

title: England v. Gebhardt


text: Talk:England v. Gebhardt

title: Talk:England v. Gebhardt


text:
England v. Gebhardt/Opinion of the Court

It was decided in Babbitt v. Clark, 103 U.S. 611, that 'congress evidently intended that orders of this kind in suits at law should be brought here by writ of error, and that where the suit was in equity an appeal should be taken.' This was a suit at law, and it was therefore properly brought here by writ of error. But as a writ of error brings up for review only such errors as are apparent on the face of the record, it follows that nothing can be considered here on such a writ in this class of cases, any more than in others, that is not presented in some appropriate form by the record. This record shows an averment in the petition for removal that the parties to the suit were citizens of different states, and a finding of the court that they were not. This implies the finding of a fact upon evidence submitted upon a hearing by the court, but before the questions presented and decided at such a hearing can be re-examined on a writ of error, they must be brought into the record by a bill of exceptions, or an agreed statement of facts, or a special finding in the nature of a special verdict, or in some other way known to the practice of courts of error for the accomplishment of that purpose. Storm v. U.S. 94 U.S. 81; Suydam v. Williamson, 20 How. 428; Baltimore & P. R. Co. v. Trustees Sixth Presbyterian Church, 91 U.S. 130. That this rule is applicable to the class of cases to which that now under consideration belongs was expressly decided in Kearney v. Denn, 15 Wall. 56. The record in the case contains nothing of the kind. The affidavits, copies of which appear in the transcript, form no part of the record proper. The mere fact that a paper is found among the files in a cause does not of itself make it a part of the record. If not a part of the pleadings or process in the cause, it must be put into the record by some action of the court. Sargeant v. State Bank of Indiana, 12 How. 384; Fisher v. Cockerell, 5 Pet. 254. This may be done by a bill of exceptions or something which is equivalent. Here, however, that has not been done. It nowhere appears that the affidavits were ever brought to the attention of the court, much less that they constituted the evidence on which the ruling was made. The case is, therefore, in this respect different from Bronson v. Schulten, 104 U.S. 412, where the order setting aside the judgment referred to and identified in terms the affidavits found in the transcript as the foundation of the order which was made. Neither is the opinion of the court a part of the record. Our rule 8, § 2, requires a copy of any opinion that is filed in a cause to be annexed to and transmitted with the record, on a writ of error or an appeal to this court, but that of itself does make it a part of the record below. The order to remand is affirmed.


text: Talk:England v. Gebhardt/Opinion of the Court


text:
New Orleans Insurance Company v. E. D. Albro Company

C. E. Schmidt, for plaintiff in error.

O. B. Sansum, for defendant in error.

WAITE, C. J.


text: Talk:New Orleans Insurance Company v. E. D. Albro Company


text:
New Orleans Insurance Company v. E. D. Albro Company/Opinion of the Court

The motion to dismiss is put on the ground that the security bond is defective, (1) because the sureties are not jointly or severally bound for the full amount of the obligation, but each severally for a specified part only; and (2) because the judgment brought under review by the writ of error is not described with sufficient certainty. The bond is certainly unusual in form, but we cannot say that it is not within the legal discretion of a justice or judge, under some circumstances, to take it. Cases may arise in which it will be impossible to obtain security if this mode is not adopted. It being within the discretion of the judge to accept such a bond as security, his action in that particular is final, and, under the rule laid down in Jerome v. McCarter, 21 Wall. 17, not reviewable here. In the matter of the description of the judgment the bond is in the form which has been much in use, except that it omits the term at which the judgment was rendered. The better practice undoubtedly is to specify the term in describing the judgment, but the omission of such a means of identification is not necessarily fatal, and certainly, before dismissing a case on that account, opportunity should be given to furnish new security.

It is apparent from the record that the writ of error must have been sued out for delay only. The suit was upon a policy issued by the insurance company to the Albro Company for the insurance of a cargo of mahogany and cedar wood on board the bark Commodore Dupont, against the perils of the sea and the barratry of the master of the bark at and from the port of Santa Anna, Mexico, to the port of New Orleans. The bark was driven on the bar at Santa Anna and wrecked in a severe gale while loading, and her cargo was cast on the sea and driven ashore. While in this condition the cargo was sold, and the proceeds, which were but small, after deducting charges and expenses, paid over by the master to the Albro Company. In the petition the loss of the vessel and her cargo is averred, and also the sale of the cargo under the orders of the port authorities at Santa Anna. In the answer the loss of the vessel was admitted, but it was insisted, by way of defense, that due diligence was not used by the master in saving the cargo and forwarding it to its place of destination as the policy required. Upon the trial 'the plaintiffs introduced evidence tending to show that the sale of the insured cargo by the master was made under such circumstances as constituted a necessity for making the same, and rendered the act of the master in making the same the act of the defendant, in that, under the law of insurance, the authority therefor would be implied. The defendant introduced evidence tending to establish the absence of those circumstances which so gave authority to the master to make such sale, and tending to show the failure on his part to seasonably communicate with the owners and underwriters; and the same evidence, introduced by the defendant, besides being applicable to the two issues, as stated above, tended further to establish that the act of the master in making the said sale of the insured cargo was an act of barratry, in that it was made, and especially was made, in time and manner, knowingly contrary to his best judgment and to the injury of whomsoever it might concern; and all the evidence tending to establish a barratrous sale came from the defendant.

'The court instructed the jury that, under the pleadings, the evidence which had been adduced before them in the cause authorized them to inquire and find-First. Whether the sale by the master was made under such circumstances as, according to the principles or rules in the law of marine insurance, (which were stated to the jury,) made the act of sale on the part of the master the act of the underwriters, and that if upon this question they found for the plaintiff, then the defendant's liability was established. Secondly. The court instructed the jury that if they found that according to the principles and rules of marine insurance (which had been stated to them) the act of sale on the part of the master was not the act of the underwriters, but they found that, while he had exceeded his authority, he had acted in good faith, then the defendant was discharged from all liability. Thirdly. The court further instructed the jury that if they found that according to the rules and principles of marine insurance (which had been explained to them) the act of sale by the master was not the act of the underwriters, the defendants, still, if they found that such sale was barratrously made, i. e., was an act of barratry, which was defined to them by the court, then also the liability of the defendant was established. No exception was taken by the counsel for the defendant to the rules or principles of law by which the court, in its instructions, had stated they must determine the question of implied authority from the defendant on the part of the master to make the sale, nor to the test by which the jury was to determine whether an act of barratry had been committed. But the counsel for the defendant, before the jury retired to deliberate upon their verdict, reserved an exception to that part of the charge of the court alone by which the court submitted the question of barratry or no barratry to the jury, in the instruction numbered third.'

We are unable to discover even the semblance of an error in the part of the charge excepted to. The petition presented distinctly the question of the liability of the insurance company, under its policy, for the loss of the cargo, which had been stranded by a peril of the sea, and sold by the master of the vessel. The defense was, in effect, that the cargo ought to have been gathered up after the stranding, and forwarded to the place of destination. Upon the issue thus raised by their pleadings, the parties went to trial, and testimony was submitted to the jury on both sides. That of the insurance company tended to show, not only that the sale was not justified by the circumstances, but that, in making the sale, the master was guilty of barratry. The court told the jury, in substance, that, if the master, acting in good faith, sold the cargo when he ought not to have done so, the insurance company would not be bound by his sale; but, 'if the sale was barratrously made, i. e., was an act of barratry,' the company must make good the loss; and this clearly because it had insured against the barratry of the master as well as the perils of the sea. It is true that the parties did not, in their pleadings, rely upon the barratry either as a ground of action or of defense, but the insured did sue for the loss occasioned by the perils of the sea and the sale by the master, and the insurance company, in attempting to prove that the sale was not justifiable under the circumstances, gave evidence tending to prove that it was barratrously made. It was upon this evidence coming from the insurance company that the court told the jury that the barratry of the master would not relieve the company from its liability in this action for the loss which follo wed from the stranding by a peril of the sea, and the subsequent barratrous sale. Certainly, we are not called upon the retain a case on our docket for argument upon such a question.

There was sufficient color of right to a dismissal to make it proper for us to entertain a motion to affirm with the motion to dismiss. The motion to dismiss is denied, but that to affirm is granted. Affirmed.


text: Talk:New Orleans Insurance Company v. E. D. Albro Company/Opinion of the Court


text:
United States v. North

''Sol. Gen. Phillips'', for the United States.

A. McDonald McBlair, for North.

W. J. Moberly and S. S. Henkle, for Emory.

WAITE, C. J.

title: United States v. North


text: Talk:United States v. North

title: Talk:United States v. North


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

James H. North was an officer in the navy of the United States from May 29, 1829, to January 14, 1861, when he resigned. He served in the war with Mexico, as lieutenant, on board the frigate Potomac, from February 10, 1846, until July, 1847, when his vessel sailed for the United States. William H. Emory was an officer in the regular army of the United States most of the time from July 1, 1831, to July 1, 1876, when he was placed on the retired list. He was appointed first lieutenant of topographical engineers July 7, 1838, and promoted to captain April 24, 1851. On or about the first of October, 1847, while he was lieutenant of engineers, he was appointed by the president as lieutenant colonel in the District of Columbia and Maryland volunteers for service during the war with Mexico. He took the oath of office in Washington about the second of October and joined his regiment in Mexico, under the orders of the war department, and served with it 'in the war with Mexico' until mustered out of service as lieutenant colonel, on the twenty-fourth of July, 1848. Upon his muster out as lieutenant colonel he resumed his former rank as lieutenant of engineers, and continued his service as such. These suits were brought to recover the 'three months' extra pay' allowed to those 'who were engaged in the military service of the United States in the war with Mexico' by the following statutes:

(1) Act of July 19, 1848, c. 104, § 5, (9 St. 248:) 'Sec. 5. And be it further enacted, that the officers, non-commissioned officers, musicians, and privates engaged in the military service of the United States in the war with Mexico, and who served out the time of their engagement, or may have been honorably discharged,-and first to widows, second to the children, third to the parents, and fourth to the brothers and sisters of such who have been killed in battle, or who died in service, or who, having been honorably discharged, have since died, or may hereafter die, without receiving the three months' pay herein provided for,-shall be entitled to receive three months' extra pay: provided, that this provision of this fifth section shall only apply to those who have been in actual service during the war.'

(2) Act of February 19, 1879, c. 90, (20 St. 316:) 'Be it enacted, etc., that the secretary of the treasury be, and he is hereby, directed, out of any moneys in the treasury not otherwise appropriated, to pay to the officers and soldiers 'engaged in the military service of the United States in the war with Mexico, and who served out their time of engagement, or were honorably discharged,' the three months' extra pay provided for by the act of July nineteenth, eighteen hundred and forty-eight, and the limitations contained in said act, in all cases, upon the presentation of satisfactory evidence that said extra compensation has not been previously received: provided, that the provisions of this act shall include also the officers, petty officers, seamen, and marines of the United States navy, the revenue marine service, and the officers and soldiers of the United States army employed in the prosecution of said war.'

The court of claims gave judgment in favor of North for three months' seaservice pay as lieutenant in the navy, and in favor of Emory for three months' pay as lieutenant colonel of volunteers, without the allowances of an officer in addition to his pay. From these judgments the United States appealed.

The questions are: (1) Whether the officers of the navy and of the regular army who were employed in the prosecution of the war with Mexico are entitled to the three months' extra pay provided for by the act of 1848; and if so, then (2) what is the 'pay' to which they are entitled?

We have no hesitation in answering the first of these questions in the affirmative. All the doubts there may have been upon that subject when the act of 1848 stood alone were, in our opinion, removed by the act of 1879. It is difficult to see why the proviso was added to that act, if it were not to make it plain that congress intended to include 'the officers, petty officers, seamen, and marines of the United States navy, the revenue marine service, and the officers and soldiers of the United States army employed in the prosecution of said war' among those who were entitled to the 'extra pay' provided for. The answer to the second question is, to our minds, attended with no greater difficulty. Those of the regular army or navy who were 'engaged in the military service of the United States in the war with Mexico' may be said to 'have served out the term of their engagement,' or to have been 'honorably discharged,' within the meaning of those terms as used in the act of 1848, when the war was over, or when they were ordered or mustered out of that service. Being in the army and navy, their 'engagement' was to serve wherever they were ordered for duty. Their engagement to serve in the war with Mexico ended when they were taken away from that service by proper authority. The pay they were to receive was evidently that which they were receiving at the end of their engagement, or when they were honorably discharged. charged. The language is, 'shall be entitled to receive three months' extra pay,' evidently meaning the same pay they would have received if they had remained in the same service three months longer. It follows that as North was serving at sea when he was ordered away, he was entitled to three months' sea pay, and as Emory was mustered out of his service in the war as lieutenant colonel of volunteers, his pay must be in accordance with that rank.

As the effect of the statutes on which the several claimants rely was fully and elaborately considered in the opinion of the court of claims, and we affirm the judgments of that court, it is unnecessary to do more than state in this brief way the conclusions to which we have come. The judgment in each case is affirmed.

BLATCHFORD, J., took no part in the decision of this cause.


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


text:
The Elizabeth Jones the Willis

Wirt Dexter, for appellant.

Robert Rae, for appellee.

BLATCHFORD, J.

title: The Elizabeth Jones the Willis


text: Talk:The Elizabeth Jones the Willis

title: Talk:The Elizabeth Jones the Willis