text:
National Bank v. Johnson/Opinion of the Court

It is contended, on behalf of the plaintiff in error, that the sections of the Revised Statutes in question were intended only to prevent national banks from violating the usury laws of the State in which they were severally organized and established; and that while, by the law of New York, it is usurious to loan or advance money to a party upon his own paper, or upon paper made for his accommodation, at a greater rate of interest or discount than seven per cent per annum, it is not usurious or illegal in that State for natural persons to acquire business paper, that is, paper valid in the hands of the holder, so that he might maintain an action thereon against the prior parties, at any rate of discount agreed upon between the parties to the negotiation, without limit in excess of seven per cent per annum.

It is assigned for error that the Court of Appeals negatived this proposition.

The rate of interest upon the loan or forbearance of money, established and in force by the laws of New York, was, at the time of the transactions in question, seven per cent per annum. Pt. 2, c. 4, tit. 3, 3 Rev. Stat. N. Y. 72, sect. 1.

By sect. 5 of the same act it is provided that all bonds, bills, notes, assurances, conveyances, all other contracts or securities whatever (except bottomry and respondentia bonds and contracts), &c., whereupon or whereby there shall be reserved or taken or secured, or agreed to be reserved or taken, any greater sum or greater value for the loan or forbearance of money, &c., than is above prescribed, shall be void.

It is, and long has been, the law in New York, as decided in Cram v. Hendricks (7 Wend. (N. Y.) 569), that the transfer by the payee of a valid available note, upon which when due he might have maintained an action against the maker, and which he parts with at a discount beyond the legal rate of interest, is not an usurious transaction, although the payee on such transfer indorses the note; and on non-payment by the maker the indorsee may maintain an action against the indorser; but the sum which the indorsee in such case is entitled to recover of the indorser is the amount of the advance made by him, gether with the interest thereon at the legal rate; while in an action against the maker the indorsee is entitled to the whole amount of the note.

This proceeds upon the idea that the original note is founded upon a valid consideration, free from usury in its inception; and that the indorsement and delivery contains two contracts: one, executed, which transferred the title, as upon a sale, as if indorsed without recourse; the other, executory, upon which the indorser is liable to the indorsee, to pay upon the default of the maker, after demand, and due notice thereof; although in the latter case, it will be observed, the recovery is limited by the New York decisions to the actual consideration paid, with lawful interest thereon.

The transaction is treated as a sale of the note, and no limits are fixed by law upon the price of the article sold; but so far as the liability of the venodr is concerned, in order to avoid the consequences of treating the advance of money, which constituted the consideration, as a loan, it is limited to a return thereof, with lawful interest.

The question we have now to determine is, whether, in transactions of this description, in which a national banking association is the transferee, the same view can be taken of the relations and rights of the parties, in the present case the Court of Appeals having decided that the same rule does not apply. Johnson v. National Bank of Gloversville, 74 N. Y. 329.

The very point had been previously raised and decided by that court in Nash v. White's Bank of Buffalo (68 id. 396), which was an action to recover penalties under the State law of 1870, in reference to banking institutions, for discounting paper at a greater rate of interest than seven per cent per annum. That act, being chapter 163 of the Laws of New York of 1870, corresponds almost exactly with sects. 5197, 5198, of the Revised Statutes of the United States, now under consideration, and its declared intent is to place the banking associations of the State on an equality, in the particulars specified, with national banks under the sections referred to. It was held that the fact that the paper discounted was business paper, purchased by the defendant, did not constitute a defence; for the question was not whether it was an illegal transaction under the general statutes against usury, but whether it was within the terms of the prohibition which forbade banks from charging on any discount a rate greater than seven per cent per annum.

And in Atlantic State Bank v. Savery (82 N. Y. 291) it was decided that the purchase of a promissory note for a sum less than its face is a discount thereof, within the meaning of the provision of the banking act of that State (sect. 18, c. 260, Laws of 1838) which authorizes associations organized under it to discount bills and notes. And in support of that definition of the terms, the court cites the authority of MacLeod on Banking, 43, where the author says, 'The difference between the price of the debt and the amount of the debt is called discount,' and 'to buy or purchase a debt is always in commerce termed to discount it.'

In Fleckner v. Bank of the United States (8 Wheat. 338, 350), Mr. Justice Story said: 'Nothing can be clearer than that, by the language of the commercial world and the settled practice of banks, a discount by a bank means, ex vi termini, a deduction or drawback made upon its advances or loans of money, upon negotiable paper or other evidences of debt, payable at a future day, which are transferred to the bank;' and he added, that if the transaction could properly be called a sale, 'it is a purchase by way of discount.'

Discount, as we have seen, is the difference between the price and the amount of the debt, the evidence of which is transferred. That difference represents interest charged, being at some rate, according to which the price paid, if invested until the maturity of the debt, will just produce its amount. And the advance, therefore, upon every note discounted, without reference to its character as business or accommodation paper, is properly denominated a loan, for interest is predicable only of loans, being the price paid for the use of money.

The specific power given to national banks (Rev. Stat., sect. 5136) is 'to carry on the business of banking by discounting and negotiating promissory notes, drafts, bills of exchange, and other evidences of debt.' So that the discount of negotiable paper is the form according to which they are authorized to make their loans, and the terms 'loans' and 'discounts' are synonyms. It was so said in Talmage v. Pell (7 N. Y. 328); and in Niagara County Bank v. Baker (15 Ohio St. 68) the very point decided was that 'to discount paper, as under stood in the business of banking, is only a mode of loaning money with the right to take the interest allowed by law in advance.'

But whether loans and discounts are identical, in the sense of sect. 5197, or not, is quite immaterial, for both are expressly made subject to the same rate of interest. And unquestionably the transfer of the notes, which forms the basis of this controversy, if not a loan, was a discount.

The contention of the plaintiff in error, that under this section whatever by the law of the State is lawful to natural persons in acquiring title to negotiable paper by discount is lawful for national banks, cannot be sustained, and derives no countenance, as is argued, from the decision in Tiffany v. National Bank of Missouri, 18 Wall. 409. All that was said in that case related to loans and to the rate of interest that was allowed thereon; and it was held that where by the laws of a State in which a national bank was located one-rate rate of interest was lawful for natural persons and a different one to State banks, the national bank was authorized to charge on its loans the higher of the two. The sole particular in which national banks are placed on an equality with natural persons is as to the rate of interest, and not as to the character of contracts they are authorized to make; and that rate thus ascertained is made applicable both to loans and discounts, if there be any difference between them. It is not intimated or implied that if, in any State, a natural person may discount paper, without regard to any rate of interest fixed by law, the same privilege is given to national banks. The privilege only extends to charging some rate of interest, allowed to natural persons, which is fixed by the State law.

If it be said that the rate is allowed by the law of the State, when it permits the parties to reserve and receive whatever they may agree upon, then the section furnishes the conclusive answer, that 'when no rate is fixed by the laws of the State, &c., the bank may take, receive, reserve, or charge a rate not exceeding seven per centum.' So that the transaction in question, in either aspect, is within the prohibition of the statute, and subjects the bank to the penalties sued for.

The conclusion is confirmed by the provision which declares that 'the purchase, discount, or sale of a bona fide bill of exchange, payable at another place than the place of such purchase, discount, or sale, at not more than the current rate of exchange for sight-drafts in addition to the interest, shall not be considered as taking or receiving a greater rate of interest.' Here the purchase, discount, and sale of bills of exchange are classed as one, and subject to the same rule and rate of interest. In sect. 5198, the forbidden transaction for which the penalties are prescribed is spoken of as usurious; but this reference is to the prohibitions of the preceding section, and not to the laws of the State.

In the present case, the paper was transferred by an indorsement, imposing the ordinary liability upon the indorser. It may, perhaps, be distinguished from cases where the title to the paper is transferred by an indorsement without recourse, or by mere delivery. The advance in such cases, to the previous holder, of the agreed consideration can hardly be considered a loan, for the relation of debtor and creditor as between them is not created by the transaction, if made, as supposed, in good faith, and not as a cover for usury. Whether it be a discount, within the meaning of the sections we have considered, and therefore subject to the same rule as to the rate of interest at which it may be discounted, which we have decided to be applicable to the transactions described in the present case; and if not, but is to be treated as a purchase of the paper, lawful at any proportion which the price paid bears to the amount ultimately payable by the parties to it, whether, in that case, national banks are authorized by the law of their organization to acquire title to it in that way, are questions which do not arise in this case, and upon which we express no opinion.

Judgment affirmed.


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

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text:
Belk v. Meagher

ERROR to the Supreme Court of the Territory of Montana.

The facts are stated in the opinion of the court.

Mr. Samuel Shellabarger and Mr. E. W. Toole for the plaintiff in error.

Mr. J. C. Robinson and Mr. Richard T. Merrick, contra.

MR. CHIEF JUSTICE WAITE delivered the opinion of the court.

title: Belk v. Meagher


text: Talk:Belk v. Meagher

title: Talk:Belk v. Meagher


text:
Belk v. Meagher/Opinion of the Court

This is an action of ejectment brought by Belk, the plaintiff in error, to recover the possession of a certain alleged quartzlode mining claim, being, as is stated in the complaint, 'a relocation of a part of what is known as the old original lode claim.' Passing by for the present the exceptions taken to the rulings of the court at the trial on the admission and rejection of testimony, the facts affecting the title of the respective parties may be stated as follows:--

In July or August, 1864, George O. Humphreys and William Allison located the discovery claim on the original lode and claims one and two west of discovery. These locations were valid and subsisting on the 10th of May, 1872, and no claim adverse to them then existed. No work was done on them between that date and June, 1875. During the month of June, 1875, and before any relocation had been made, the original locators, or their grantees, resumed work upon the claims, and did enough to re-establish their original rights, if that could be done by a simple resumption of work at that time. No work was afterwards done on the property by the original locators, or any one claiming under them; and it does not appear that they were in the actual possession of the claims, or any part thereof, on the 19th of December 1876, or for a long time before. It is conceded by both parties that the original claims lapsed on the 1st of January, 1877, because of a failure to perform the annual work required by the act of Congress in such cases.

On the 19th of December, 1876, Belk made the relocation under which he now claims, and did all that was necessary to perfect his rights, if the premises were at that time open for that purpose. His entry on the property was peaceable, no one appearing to resist. Between the date of his entry and the 21st of February, 1877, he did small amount of work on the claim which did not occupy more than two days of his time, and probably not so much as that, and he had no other possession of the property than such as arose from his location of the claim and his occasional labor upon it. On the 21st of February, 1877, the defendants entered on the property peaceably and made another relocation, doing all that was required to perfect their rights, if the premises were at the time open to them. The possession they had when this suit was begun was in connection with the title they acquired in that way.

Upon this state of facts the questions presented in argument for our consideration are,--

1. Whether the work done in June, 1875, was sufficient to give the original locators, or those claiming under them, an exclusive right to the possession and enjoyment of the property until Jan. 1, 1877.

2. Whether, if it was, a valid relocation of the premises, good as against everbody but the original locators or their grantees, could be made by Belk on the 19th of December, 1876, his entry for that purpose being peaceable and without force.

3. Whether, if Belk's relocation was invalid when made, it became effectual in law on the 1st of January, 1877, when the original claims lapsed; and,

4. Whether, even if the relocation of Belk was invalid, the defendants could, after the 1st of January, 1877, make a relocation which would give them as against him an exclusive right to the possession and enjoyment of the property, their entry for that purpose being made peaceably and without force.

By sect. 3 of the act of May 10, 1872, c. 152 (17 Stat. 91), entitled 'An Act to promote the development of the mining resources of the United States,' it was provided that the locators of all mining locations theretofore made, or which should thereafter be made, on any mineral vein, lode, or ledge situated on the public domain, their heirs and assigns, where no adverse claim then existed, should have the exclusive right of possession and enjoyment of all the surface included within the lines of their locations, so long as they complied with the laws of the United States, and with State, territorial, and local regulations, not in conflict with the laws of the United States, governing their possessory title. The fifth section further provided that on all claims located prior to the passage of the act, ten dollars' worth of work should be performed or improvements made each year for each one hundred feet in length along the vein, until a patent should have issued therefor; and upon a failure to comply with this condition, the claim or mine on which the failure occurred should be open to relocation in the same manner as if no location of the same had ever been made, provided the original locators, their heirs, assigns, or legal representatives had not resumed work on the claim after the failure and before the relocation. By the act of March 1, 1873, c. 214 (17 Stat. 483), the time for making the first annual expenditure, under the act of 1872, was extended to June 10, 1874; and by the act of June 6, 1874, c. 220 (18 Stat. 61), to Jan. 1, 1875. The exact language of this last act is as follows: 'That the provisions of the fifth section of the act. . . passed May 10, 1872, which requires expenditures of labor and improvements on claims located prior to the passage of said act, are hereby so amended that the time for the first annual expenditure on claims located prior to the passage of said act shall be extended to the first day of January, 1875.'

For all the purposes of this case the law stands as it would have stood had the original act of 1872 provided that the first annual expenditure on claims then in existence might be made at any time before Jan. 1, 1875, and annually thnereafter until a patent issued. If it was not made by that time the claim would be open to relocation, provided work was not resumed upon it by the original locators or those claiming under them, before a new location was made. Such being the law, it seems to us clear that if work is renewed on a claim after it has once been open to relocation, but before a relocation is actually made, the rights of the original owners stand as they would if there had been no failure to comply with this condition of the act. The argument on the part of the plaintiff in error is that, if no work is done before January, 1875, all rights under the original claim are gone; but that is not, in our opinion, the fair meaning of the language which Congress has employed to express its will. As we think, the exclusive possessory rights of the original locator and his assigns were continued, without any work at all, until Jan. 1, 1875, and afterwards if, before another entered on his possession and relocated the claim, he resumed work to the extent required by the law. His rights after resumption were precisely what they would have been if no default had occurred. The act of 1874 is in form an amendment of that of 1872, and all the provisions of the old law remain in full force, except so far as they are modified by the new.

From what has thus been said, it is apparent that as work was done in the present case during the year 1875, before any relocation was made, the original claim was continued in force and made operative until there could be another forfeiture by reason of the failure of the owners to do the necessary annual work. The year in which the work was done began on the 1st of January, 1875, and ended on the 31st of December. The law fixes no time within a year when the work must be done. Consequently, if done at any time during the year, it is enough, and there can be no forfeiture until the entire year has gone by. That, in this case, would not be until Dec. 31, 1876; and the work, if completed on that day, would be just as effectual for the protection of the claim as if it had been done on the 1st of January previous. It follows that on the 19th of December, 1876, the owners of the original location had, under the act of Congress, the exclusive right to the possession and enjoyment of the property in dispute.

A mining claim perfected under the law is property in the highest sense of that term, which may be bought, sold, and conveyed, and will pass by descent. Forbes v. Gracey, 94 U.S. 762. There is nothing in the act of Congress which makes actual possession any more necessary for the protection of the title acquired to such a claim by a valid location, than it is for any other grant from the United States. The language of the act is that the locators 'shall have the exclusive right of possession and enjoyment of all the surface included within the lines of their locations,' which is to continue until there shall be a failure to do the requisite amount of work within the prescribed time. Congress has seen fit to maek the possession of that part of the public lands which is valuable for minerals separable from the fee, and to provide for the existence of an exclusive right to the possession, while the paramount title to the land remains in the United States. In furtherance of this policy it was enacted by sect. 9 of the act of Feb. 27, 1865, c. 64 (13 Stat. 441, Rev. Stat., sect. 910), that no possessory action between individuals in the courts of the United States for the recovery of mining titles should be affected by the fact that the paramount title to the land was in the United States, but that each case should be adjudged by the law of possession.

Mining claims are not open to relocation until the rights of a former locator have come to an end. A relocator seeks to avail himself of mineral in the public lands which another has discovered. This he cannot do until the discoverer has in law abandoned his calim, and left the property open for another to take up. The right of location upon the mineral lands of the United States is a privilege granted by Congress, but it can only be exercised within the limits prescribed by the grant. A location can only be made where the law allows it to be done. Any attempt to go beyond that will be of no avail. Hence a relocation on lands actually covered at the time by another valid and subsisting location is void; and this not only against the prior locator, but all the world, because the law allows no such thing to be done. It follows that the relocation of Belk was invalid at the time it was made, and continued to be so until Jan. 1, 1877.

The next inquiry is, whether the attempted location in December became operative on the 1st of January, so as to give Belk the exclusive right to the possession and enjoyment of the claim after that. We think it did not. The right to the possession comes only from a valid location. Consequently, if there is no location there can be no possession under it. Location does not necessarily follow from possession, but possession from location. A location is not made by taking possession alone, but by working on the ground, recording and doing whatever else is required for that purpose by the acts of Congress and the local laws and regulations. As in this case, all these things were done when the law did not allow it; they are as if they had never been done. On the 19th of December the right to the possession of this property was just as much withdrawn from the public domain as the fee is by a valid grant from the United States under the authority of law, or the possession by a valid and subsisting homestead or pre-emption entry. As the United States could not at the time give Belk the right to take possession of the property for the purpose of making his location, because there was an existing outstanding grant of the exclusive right of possession and enjoyment, it would seem necessarily to follow for the purposes of a valid might make must be unavailing for the purposes of a valid location of a claim under the act of Congress. A location to be effectual must be good at the time it is made. When perfected it has the effect of a grant by the United States of the right of present and exclusive possession. As the proceeding to locate is one in which the United States is not directly an actor, but is carried on by the locator alone, so that he may take what the United States has, through an act of Congress, offered to give, it is clear that there can be nothing to take until there is an offer to give. Here Congress has said in unmistakable language that what has been once located under the law shall not be relocated until the first location has expired, and it is difficult to see why, if Belk could make his relocation on the 19th of December, he might not on the 19th of January before. Lansdale v. Daniels, 100 U.S. 113, 116. The original locators and their grantees had precisely the same rights after each date, the only difference being in duration. To hold that, before the former location has expired, an entry may be made and the several acts done necessary to perfect a relocation, will be to encourage unseemly contests about the possession of the public mineral-bearing lands which would almost necessarily be followed by breaches of the peace.

This brings us to the inquiry whether the possession of Belk, after the 1st of January, was such as to prevent the defendants from making a valid relocation and acquiring title under it. The position taken in his behalf is, that even if the original locators, or their grantees, had, under the act of Congress, a right to the possession of their claim until January 1, a statute of limitations in Montana would bar their action against him for its recovery, because they had not been in actual possession within a year previous to his entry, and consequently his entry, though tortious as to them, was good as the beginning of an adverse possession, which if continued for a year, would entitle him to a patent under the provisions of sect. 2332 of the Revised Statutes. The statute of Montana relied on is as follows: 'No action to recover any mining claim, whether placer or quartz, or any quartz lead or lode, or any interests therein or possession thereof, unless the same be held under patent from the government of the United States, shall be commenced or maintained unless that it is proved that the plaintiff, or his assigns, or predecessor in interest, were in the actual seisin or possession of such mining claim, quartz lead or lode, within one year next before the commencement of such action.' Laws of Montana, 1872, p. 591.

And sect. 2332 of the Revised Statutes is as follows: 'Where such person or association, they and their grantors, have held and worked their claims for a period equal to the time prescribed by the Statute of Limitations for mining claims of the State or Territory where the same may be situated, evidence of such possession and working of the claims for such period shall be sufficient to establish a right to a patent thereto under the chapter in the absence of an adverse claim.'

The Montana statute was passed Jan. 11, 1872, and the act of Congress, under which both parties claim, on the 10th of May thereafter. Under the act of Congress, as has just been seen, the original locators, or their grantees, had what was equivalent to a grant by the United States of the right to the exclusive possession and enjoyment of the property until January 1. The Montana statute, if in any respect repugnant to this, was repealed to the extent of such repugnancy by the act of Congress. As between possessors, having no other title than such as is derived from mere occupancy, an action would undoubtedly be barred by the Montana statute. Whether that would be so in a case where an actual right of possession had been acquired under the act of Congress is a question we need not consider, as here the controversy is not between Belk and the prior locators. It is clear that, whether in Montana an action could be maintained against him or not, his right of location depended entirely on the act of Congress, and under it, as has already been seen, what he did had no effect to secure to him the grant of any rights. All he got or could get by his entry was possession, and that, to be of any avail, must be actual.

Under the provisions of the Revised Statutes relied on, Belk could not get a patent for the claim he attempted to locate, unless he secured what is here made the equivalent of a valid location by actually holding and working for the requisite time. If he actually held possession and worked the claim long enough, and kept all others out, his right to a patent would be complete. He had no grant of any right of possession. His ultimate right to a patent depended entirely on his keeping himself in and all others out, and if he was not actually in, he was in law out. A peaceable adverse entry, coupled with the right to hold the possession which was thereby acquired, operated as an ouster, which broke the continuity of his holding and deprived him of the title he might have got if he had kept in for the requisite length of time. He had made no such location as prevented the lands from being in law vacant. Others had the right to enter for the purpose of taking them up, if it could be done peaceably and without force. There is nothing in Atherton v. Fowler (96 U.S. 513) to the contrary of this. In that case it was held a right of pre-emption could not be established by a forcible intrustion upon the possession of one who had already settled upon, improved, and enclosed the property. Upon that proposition the court was unanimous. We also all agree that if a peaceable entry had been made on lands which had not been enclosed or improved, a good right might have been secured. The only difference of opinion we had was as to whether the entry in that case was be force or peaceably. A majority of the court thought it was forcible, while the minority considered that the case had been fairly put to the jury on the question of forcible or peaceable entry, and the effect of the verdict was that it had been peaceable.

This brings us to the facts of the present case. No one contends that the defendants effected their entry and secured their relocation by force. They knew what Belk had done and what he was doing. He had no right to the possession, and was only on the land at intervals. There was no enclosure, and he had made no improvements. He apparently exercised no other acts of ownership, after January 1, than every explorer of the mineral lands of the United States does when he goes on them and uses his pick to search for and examine lodes and veins. As his attempted relocation was invalid, his rights were no more than those of a simple explorer. In two months he had done, as he himself says, 'no hard work on the claim,' and he 'probably put two days' work on the ground.' This was the extent of his possession. He was not an original discoverer, but he sought to avail himself of what others had found. Relying on what he had done in December, he did not do what was necessary to effect a valid relocation after January 1. His possession might have been such as would have enabled him to bring an action of trespass against one who entered without any color of right, but it was not enough, as we think, to prevent an entry peaceably and in good faith for the purpose of securing a right under the act of Congress to the exclusive possession and enjoyment of the property. The defendants having got into possession and perfected a relocation, have secured the better right. When this suit was begun they had not only possession, but a right granted by the United States to continue their possession against all adverse claimants. The possession by Belk was that of a mere intruder, while that of the defendants was accompanied by color of title.

It is contended, however, that the court erred in its charge to the jury, because it assumed that the defendants' relocation was good if that of Belk was bad. The notice of the relocation of the defendants was proved by the introduction of the county records, and if we understand correctly the position which is now taken, it is that this notice was defective because of an insufficient affidavit. We cannot find that this precise objection was taken below. When the record was first offered in evidence it seems to have been objected to generally, but afterwards, on a motion to strike it out, the reasons assigned were: 1, that the original was not shown to have been out of the possession or under the control of the defendants; and, 2, that the record did not give a sufficient description of the location. As the affidavit to the notice of the relocation of Belk was identical in form with that of the defendants, it is possible such an objection as is now made was not then desirable; but however that may be, we are clearly of the opinion it cannot be made for the first time in this court. The trial below was conducted entirely on the theory that Belk had the better right, because the defendants could not in law make a relocation at the time they did. The court had thr right to understand that it was conceded the defendants had perfected their title if it could be done under the circumstances, and the special objections made to the evidence that was introduced should not be sustained. Nothing which occurred in the progress of the trial below can be assigned for error here which was not brought to the attention of the court and decided by it. When specific objections are made to the admission of evidence, the court has the right to assume that all others are waived, and proceed with the case accordingly. Consequently, when the specific objections made to the introduction of this notice in evidence were overruled, the court had the right to consider it was no longer contended that the requisite notice had not been given and recorded.

This disposes of all the questions raised on the instructions to the jury. It remains to consider the various exceptions taken to the admission and rejection of testimony. These are:--

1. As to the admission of the book from the office of the recorder of Deer Lodge County to prove the record of the location of the original lode claims by Humphrey and Allison.

2. As to the admission of the books of record from the same office to prove certain deeds by which it was claimed the title of Humphrey and Allison to the original lode claims was transmitted, in whole or in part, to one Murphy; and,

3. The rejection of the testimony of one McFarland, a witness produced at the trial.

1. As to the proof of the record of the location of the original lode claim.

As Belk sets up title only as a relocator of part of the original lode claim, he impliedly admits the validity of the prior location. There can be no relocation unless there has been a prior valid location, or something equivalent, of the same property. It is nowhere disputed that Humphrey and Allison were the locators and owners of the claim originally. The proof by the record was, therefore, probably unnecessary; but if not, it seems to us the book offered was sufficiently authenticated. It was one of the books of record kept in the proper office, and transmitted as such from one officer to another. The original recording appears to have been in a temporary book, and, at a very early date in the history of the county, transcribed by the deputy recorder, under the general supervision of his principal, into the book which has since been recognized as part of the public records of the office. It was sufficiently shown that the original book had been lost or destroyed. This we think enough to justify the use of the present book in its place. Having been recognized as part of the official records of the county almost from the time of the organization of civil government in the Territory, it would be dangerous to exclude it now without any proof of fraud or mistake.

2. As to the deeds. In the view we take of the case, it is entirely unimportant whether the original lode claim had been transferred or not. The work was done in 1875 by Humphrey, one of the original locators, for the express purpose of resuming the claim. He says it was done under an arrangement which he made to that effect with Thornton, who, according to the deeds put in evidence, was the owner of three-fourths of the property, Humphrey himself owning the rest. It is a matter of no importance to Belk whether the work that was done inured to the benefit of Humphrey alone or to him with others. Without, therefore, considering any of the questions presented in the argument as to the competency of the evidence, or the proper execution of the deeds, we are clearly of the opinion that there is nothing in the assignments of error affecting this branch of the case which requires a reversal of the judgment.

3. As to the testimony of McFarland. He was in effect asked whether any one had that day pointed out to him the line between the National Mining and Exploring Company's ground and the defendants'; and, if so, whom; and if he knew where the line was. There was but one question, and the objection was made to the question. It was entirely immaterial, so far as anything appears in the record, whether any one pointed out the line to the witness or not, unless it was some one connected with the suit of the parties. It is true, if he knew of his own knowledge where the line was, he might tell, but in the form the question was put he could well think he would be permitted to tell where it was as it had been pointed out to him. The question was clearly too general, and on that account objectionable. It is quite possible the witness knew facts that were material to the issue which was being tried. If he did, and the plaintiff desired to have them, the question should have been made more specific, and the objections to the form of that which was put removed.

Upon a careful consideration of the whole case we find no error.

Judgment affirmed.

title: Belk v. Meagher/Opinion of the Court


text: Talk:Belk v. Meagher/Opinion of the Court


text:
Giles v. Little (104 U.S. 291)

ERROR to the Circuit Court of the United States for the District of Nebraska.

This was an action for the recovery of lot No. 6, in block 54, in the city of Lincoln, Nebraska.

The following are the material averments of the petition:--

'On June 10, 1869, and thence up to his death, Jacob Dawson was seised and possessed of divers real and personal estates of great value, and had a wife named Edith J., and six children who were on said day minors, and some very young, and all without any property whatever, his wife being seised and possessed in her own right of real and personal estates of the value of ten thousand dollars and over.

'On said day the said Jacob made his last will and testament, which contained the following sole bequest: After all my lawful debts are paid and discharged, the residue of my estate, real and personal, I give, bequeath, and dispose of as follows, to wit: To my beloved wife Edith J. Dawson I give and bequeath all my estate, real and personal, of which I may die seised, the same to remain and be hers, with full power, right, and authority to dispose of the same, as to her shall seem meet and proper, so long as she shall remain my widow; upon the express condition, that, if she shall marry again, then it is my will that all of the estate herein bequeathed, or whatever may remain, should go to my surviving children, share and share alike; and in case any of my children should have deceased, leaving issue, then the issue so left to receive the share to which said child would be entitled. I likewise make, constitute, and appoint my said wife Edith J. to be executrix of this my last will and testament.

'On the twenty-second day of June, 1869, the said Jacob died at Lancaster County in this district, leaving him surviving his said wife and six children. The said will was duly proved and admitted to probate in the proper court of said county, and letters testamentary thereon were issued out of said court to the said Edith J., who took upon her the execution of said trust.

'The personal property, whereof the said Jacob died possessed, was duly inventoried and appraised at $958; and among the real estates whereof, at his death, the said Jacob was seised, was that certain piece or parcel of land known and described as follows: Lot number 6, in block 54, in the city of Lincoln, in said Lancaster County, except six inches off the entire east line of said lot, which supports the east party-wall of said lot; which lot is of the value of $5,000 and over.

'On the twenty-seventh day of April, 1870, the said Edith J., by her certain deed of conveyance, dated on said day, and duly executed and acknowledged, conveyed the said premises to one Cody, by warranty deed, which contained no reference to nor recited the power in said will, and by divers mesne conveyances from said Cody, the said defendant Little claims and pretends that he is seised in fee of said premises; and he is now in possession thereof by the defendant May, as his tenant.

'On or about the fifteenth day of November, 1879, the said Edith J. intermarried with one Pickering.

'One of the said children of the said Jacob died intestate without issue, and the survivors being in indigent circumstances have joined in a conveyance of the said premises, bearing date Sept. 15, 1869, and duly executed and acknowledged, whereby they conveyed the same in fee to one Burr and one Wheeler, who by their deed have duly conveyed the same to the plaintiff. And by reason of the premises the said plaintiff has become and is seised in fee of said premises above described, and is entitled to the immediate possession thereof; the defendant Little, under the alleged title derived to him as aforesaid, unlawfully keeps the said plaintiff out of possession thereof.'

There was a general demurrer to this petition, which the Circuit Court sustained, and gave judgment for the defendants.

This action of the court is assigned for error.

Mr. James M. Woolworth for the plaintiff in error.

Mr. T. M. Marquett, contra.

MR. JUSTICE WOODS, after stating the case, delivered the opinion of the court.

title: Giles v. Little (104 U.S. 291)


text: Talk:Giles v. Little (104 U.S. 291)

title: Talk:Giles v. Little (104 U.S. 291)


text:
Giles v. Little (104 U.S. 291)/Opinion of the Court

The contention of the plaintiff in error is, that Edith J. Dawson took, under the will of her deceased husband, Jacob Dawson, an estate for life, subject to be determined in case she contracted another marriage, with remainder to the heirs of Jacob Dawson; and that the power of disposal conferred on her by the will was only coextensive with the estate which she took under the will,-that is to say, the power was granted her to dispose of her life-estate, and, consequently, that the estate conveyed by her deed to Cody determined upon her marriage with Pickering.

It was said by this court in Clarke v. Boorman's Executors (18 Wall. 493), Mr. Justice Miller delivering its opinion, that 'of all legal instruments wills are the most inartificial, the least to be governed in their construction by the settled use of legal technical terms, the will itself being often the production of persons not only ignorant of law, but of the correct use of the language in which it is written. Under the state of the science of law as applicable to the construction of wills, it may well be doubted if any other source of enlightenment in the construction of a will is of as much assistance as the application of natural reason to the language of the instrument, under the light which may be thrown upon the intent of the testator by the extrinsic circumstances surrounding its execution, and connecting the parties and the property devised with the testator and with the instrument itself.'

If we apply the methods thus indicated to the construction of the will of Jacob Dawson, there can, it seems to us, be no serious doubt about its meaning.

Accordng to the averments of the petition, it appears that twelve days before his death Dawson executed his last will. At that time he was the owner of some real estate, and of personal property of the value of $958. He was the father of six living children, all of whom were minors, some of them very young, and all without any property in their own right. His wife, Edith J. Dawson, was the owner of real and personal property to the amount of $10,000 or more.

The promptings of natural affection would lead a testator so situated to provide in his will not only for his wife, but also for his infant children.

The disposition of his property is made by a single sentence in his will. It seems clear that his purpose was to give to his wife an estate for life in his property, subject to be divested on her contracting a second marriage, and on the determination of her interest, either by her death or marriage, then an estate in fee to his children. No man unversed in technical rules of construction can, it seems to us, read this will without coming to this conclusion. To hold otherwise would be to suppose the testator, in drafting his will, was governed by abstruse rules of law in regard to the effect of his expressions, of which, it is probable, he never heard, and had not the slightest conception.

The clause of the will which disposes of the testator's entire estate provides first for the payment of his lawful debts. The residue of his estate (after payment of debts) is then disposed of as follows: 'To my beloved wife Edith J. Dawson I give and bequeath all my estate, real and personal, of which I may die seised, the same to remain and be hers, with full power, right, and authority to dispose of the same as to her shall seem meet and proper so long as she shall remain my widow.' This part of the disposing clause of the will is not open to doubt. The phrase, 'so long as she shall remain my widow,' refers to and qualifies the estate granted, as well as the power of disposition. The clear and undoubted meaning of the sentence is, that as long as the devisee remains the widow of the testator, his property, real and personal, shall remain and be hers, with full power to dispose of the same. This construction, so far as it concerns the estate granted, is so obvious that no discussion can make it any plainer. How large an estate the widow was empowered to dispose of will be considered hereafter.

But the testator, not satisfied with this unequivocal declaration of his purpose, and to leave no doubt of his intention, and to give direction to his property when the estate of his wife therein should determine, proceeds to add: 'Upon the express condition that if she shall marry again, then it is my will that all of the estate herein bequeathed, or whatever may remain, should [shall] go to my surviving children, share and share alike.'

It would be hard to express more clearly the purpose of the testator to devise to his wife an estate during her widowhood, and on its determination a remainder in fee to his children.

The contention, however, of the defendants in error is, that the testator by this will gave to his wife an absolute estate in fee-simple, with power, so long as she remained his widow, to dispose of it absolutely.

We find no warrant for this construction of the will, either in its terms or in the circumstances which surrounded the testator. The language is plain that the devisee was to take a life-estate, subject to be determined on her second marriage, with a limitation over to the children of the testator. His purpose was clearly expressed, to provide for his children as well as his widow, to give the latter all his estate as long as she remained his widow, but to put it out of her power to disinherit his children. According to the construction of the defendants in error, the will gave her the power of absolute disposition during her widowhood, so that she could by her conveyance entirely divert the estate from his children; and, having done this, could contract a second marriage without the loss of any interest in the proceeds of the property devised to her by the testator.

We think it was not the purpose of the testator to devise an estate in fee to his wife. As already remarked, the devise is limited by the words 'so long as she shall remain my widow.' But even if these words were wanting, the limitation over to his children in case she should marry again would control and restrict the preceding words by which the estate was granted.

Smith v. Bell (6 Pet. 68) is in point. The will construed in that case declares: 'I give to my wife Elizabeth Goodwin all my personal estate, whatsoever and wheresoever, and of what nature, kind, and quality soever, after payment of my debts, legacies, and funeral expenses, which personal estate I give and bequeath unto my said wife, Elizabeth Goodwin, to and for her own use and benefit and disposal absolutely, the remainder of said estate, after her decease, to be for the use of said Jesse Goodwin,' son of the testator; 'and I do hereby constitute and appoint my said wife, Elizabeth Goodwin, sole executrix of this my last will and testament.'

The court held that this was a devise to the testator's wife for life, with remainder to Jesse Goodwin. Mr. Chief Justice Marshall, in delivering its opinion, said: 'It must be admitted that words could not have been employed which would be better fitted to give the whole personal estate absolutely to the wife, or which would more clearly express that intention. But the testator proceeds: 'The remainder of said estate to be for the use of the said Jesse Goodwin.' These words give the remainder of the estate, after his wife's decease, to the son, with as much clearness as the preceding words give the whole estate to his wife. They manifest the intention of the testator to make a future provision for his son as clearly as the first part of the bequest manifests his intention to make an immediate provision for his wife. . . . The limitation in remainder shows that, in the opinion of the testator, the previous words had given only an estate for life. This was the sense in which he used them.' This case establishes conclusively the contention of plaintiff in error, that the words of the will under consideration, granting an estate to the wife, grant only an estate for life, and not an estate in fee-simple.

But it is contended by defendants in error that there are words in the last clause of the will which imply an absolute power of disposition, and give to the children only what may remain undisposed of in the wife's hands at the termination of her estate. The clause is, 'If she should marry again, then it is my will that all the estates herein bequeathed, or whatever may remain, shall go to my surviving children, share and share alike.' The contention rests upon the words, 'or whatever may remain,' and is, that they imply that a part or all of the estate might be absolutely disposed of by the wife during her widowhood.

If the purpose of the testator in the disposition of his property is what the other parts of his will clearly indicate, then these words cannot be construed to change that purpose. They can have operation without giving them that effect. He was seised of real estate and possessed of personal property. Both were included in the devise to the wife, and she was to have the enjoyment of both during her widowhood. The use of many species of personal property necessarily consumes it. The words under consideration may, therefore, fairly be construed to refer to the personalty, and the entire clause to give to his children a remainder in the real estate, and whatever of the personalty was not consumed by the widow during her widowhood.

This construction is warranted by the language of this court in Smith v. Bell (supra), which was as follows: 'This suit is brought for slaves, a species of property not consumed by the use and in which a remainder may be limited after a life-estate. They composed a part, and probably the most important part, of the personal estate given to the wife, 'to and for her own use and benefit and disposal absolutely.' But in this personal estate, according to the usual condition of persons in the situation of the testator, there were trifling and perishable articles, such as stock on a farm, household furniture, the crop of the year, which would be consumed in the use, and over which the exercise of absolute ownership was necessary to a full enjoyment. These may have been in the mind of the testator when he employed the strong words of the bequest to her.'

This passage shows that, in order to carry out the evident purpose of the testator, general words which are applicable to property of different kinds may be restricted to property of a particular kind. For instance, that the phrase 'or whatever may remain,' in the will under consideration, may be limited to personal property only, though used in a sentence which applies to both real and personal estate.

On this subject Green v. Hewett, decided by the Supreme Court of Illinois (12 Cent. Law Jour. 58), is precisely in point. The will in that case provided as follows: 'Second. After payment of such debts and funeral expenses, I give and bequeath to my beloved wife the farm on which we now reside; also all my personal property of every description, so long as she remains my widow, at the expiration of that time the whole, or whatsoever remains, to descend to my daughter, M. T.'

The court held that under this devise the widow did not take a fee, and said: 'The use of that expression [whatsoever remains] is of no vital significance, and cannot be permitted to override the clearly expressed intention that the widow should take a life-estate only.'

The next position of the defendants in error is, that even conceding that the will gives the widow of testator an estate for life, yet it conferred on her during her widowhood the power to convey the entire estate in fee, and she having so conveyed, the defendants in error who claim under her have a good title.

But the authorities are adverse, and show that when a power of disposal accompanies a bequest or devise of a life-estate, the power is limited to such disposition as a tenant for life can make, unless there are other words clearly indicating that a larger power is intended.

Thus, in Brant v. Virginia Coal & Iron Co. (93 U.S. 326), the words of the will were: 'I give and bequeath to my beloved wife Nancy Sinclair all my estate, both real and personal; that is to say, all my lands, cattle, horses, sheep, farming utensils, household and kitchen furniture, with everything that I possess, to have and to hold during her life, and to do with as she sees proper before her death.'

By virtue of this power the widow undertook to convey the fee of the land. But this court, speaking by Mr. Justice Field, said: 'The interest conveyed by the devise to the widow was only a life-estate. The language admits of no other conclusion; and the accompanying words, 'to do with as she sees proper before her death,' only conferred power to deal with the property in such manner as she might choose, consistently with that estate, and, perhaps, without liability for waste committed. The words used in connection with a conveyance of a leasehold estate would never be understood as conferring a power to sell the property so as to pass a greater estate. Whatever power of disposal the words confer is limited by the estate with which they are connected.' See also Bradley v. Wescott, 13 Ves. Jr. 445; Smith v. Bell, supra; Boyd v. Strahan, 36 Ill. 355.

It is next insisted by the defendants in error that the statute of Nebraska, according to which the will must be construed, favors the construction contended for by them. The statute declares, 'every devise of land, in any will hereafter made, shall be construed to convey all the estate of the devisor therein which he could lawfully devise, unless it shall appear by the will that the devisor intended to convey a less estate.' General Statutes of Nebraska, sect. 124, c. 17. We are at a loss to see how the statute supports the view of one party to this suit more than the other. According to the construction of the plaintiff in error, the devise vested in the widow of the devisor a life-estate, remainder in fee to his children; according to the construction of defendants in error, it vested the fee in the widow. By either construction, the devise conveyed all the estate of the devisor in the property devised. This is all the statute demands.

Lastly, it is claimed by defendants in error that it is the settled rule that where a devisee, whose estate is undefined, is directed to pay debts, the devisee takes an estate in fee.

The rule has no application here, for, as we have seen, the estate of the devisee and executrix is clearly defined. A direction to pay debts cannot enlarge it. The case of Smith v. Bell (supra) is precisely in point against the application of the rule to this case.

We have no doubt about the true construction of this will. Edith J. Dawson took under it an estate for life in the testator's lands, subject to be divested on her ceasing to be his widow, with power to convey her qualified life-estate only. Her estate in the land and that of her grantees determined on her marriage with Pickering.

The judgment of the Circuit Court must, therefore, be reversed, and the cause remanded to that court, with directions to proceed in the case in conformity with this opinion; and it is

So ordered.


text: Talk:Giles v. Little (104 U.S. 291)/Opinion of the Court


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Ex Parte Woollen

PETITION for a writ of mandamus.

The facts are stated in the opinion of the court.

Mr. Philip Phillips, Mr. Joseph E. McDonald, and Jr. John M. Butler in support of the petition.

Mr. Samuel Shellabarger and Mr. Jeremiah M. Wilson in opposition thereto.

MR. CHIEF JUSTICE WAITE delivered the opinion of the court.

title: Ex Parte Woollen


text: Talk:Ex Parte Woollen

title: Talk:Ex Parte Woollen


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Ex Parte Woollen/Opinion of the Court

The petition in this case shows that a claim against a bankrupt estate was rejected by the District Court for the District of Indiana on the 19th of December, 1879, and that on the same day the creditor took an appeal to the Circuit Court under sect. 4980 of the Revised Statutes. When the appeal was taken the Circuit Court was in session. The term began on the first Tuesday of the preceding November, and continued without a final adjournment until late in April, 1880. The next term did not begin until the first Tuesday in May. On the 28th of March the assignee moved the Circuit Court to dismiss the appeal because it had not been entered in that court. This motion was resisted by the creditor on the ground that he had until the next term to enter the case. The court, after hearing, granted the motion, and we are now asked to require, by mandamus, a reinstatement of the appeal.

Many objections are made to this application, but as it is conceded that if the question which lies at the foundation of the whole proceeding is decided adversely to the petitioners the writ must be denied, we pass everything else by and proceed at once to the consideration of that question, which is, whether, under the law, the creditor had until the May Term, 1880, to enter his appeal in the Circuit Court.

The eighth section of the original bankrupt law of March 2, 1867, c. 176, required the appeal to 'be entered at the term of the Circuit Court which shall be first held within and for the district next after the expiration of ten days from the time of claiming the same.' 14 Stat. 520. The tenth section provided (id. p. 521) that the justices of this court should, subject to the provisions of the act, frame 'general orders,' among other things, 'for regulating the practice and procedure upon appeals.' Under this authority, the justices could not by their orders alter or amend the law, but they could prescribe rules and regulations to aid in carrying it into effect. Anything not inconsistent with it might be ordered for the despatch of business. It was not in so many words provided that appeals might be entered in the Circuit Court at the first term which began its session after the expiration of ten days from the time they were claimed, and so the justices, in framing their orders at the December Term, 1866 (May 16, 1867), provided (No. 26) that appeals by a creditor from a decision of the District Court rejecting his claim should be filed in the clerk's office of the Circuit Court within ten days after they were taken. As this was evidently done to promote the speedy settlement of bankrupt estates, which we have often said was the obvious policy of the law (Bailey v. Glover, 21 Wall. 342; Wiswall v. Campbell, 93 U.S. 347), there would, in our opinion, be no difficulty in sustaining the regulation if the matter stood as it was originally. The law and the regulation are perfectly consistent with each other. In effect it was judicially determined that sect. 8 required appeals to be filed during the first term which happened to be in session after the expiration of the ten days, and the regulation simply fixed the time in that term when the filing must be done. Undoubtedly the provisions of the regulation were directory rather than mandatory. If the entry of the cause was not made in the Circuit Court within the prescribed time, it would be within the power of that court, in the exercise of its discretion, to allow it to be done afterwards, but after the time had gone by the assignee could appear and ask to have the appeal dismissed.

But whatever may have been the condition of the law in this particular originally, there can be no doubt what it has been since the Revised Statutes, sect. 4990 of which is as follows: 'The general orders in bankruptcy heretofore adopted by the justices of the Supreme Court, as now existing, may be followed in proceedings under this title; and the justices may, from time to time, subject to the provisions of this title, rescind or vary any of those general orders, and may frame, rescind, or vary other general orders for the following purposes:. . . Fourth. For regulating the practice and procedure upon appeals.'

Order No. 26 was then in force, and there was in this section a distinct legislative recognition of its validity. In sect. 4982 the word 'first,' where it occurs in that part of sect. 8 of the original act quoted above, was omitted, so that the provision in the Revised Statutes is that 'such appeal shall be entered at the term of the Circuit Court which shall be held within the district next after the expiration of ten days from the time of claiming the same.' By this change the original meaning was not materially altered; but if it had been, the result would be the same, so far as the question now under consideration is concerned, because in so many words it was provided (sect. 4990) that the old orders as they stood should be applicable to the revision. In amending the general orders at the October Term, 1874, the justices continued No. 26 in the same form it was originally adopted.

Such being the condition of the law when the proceedings now complained of were had in the Circuit Court, we think it was clearly in the power of that court to dismiss the appeal because it had not been entered in time.

Petition denied.

title: Ex Parte Woollen/Opinion of the Court


text: Talk:Ex Parte Woollen/Opinion of the Court


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Libby v. Hopkins

ERROR to the Supreme Court of the State of Ohio.

The suit was brought in the Superior Court of Cincinnati by A. T. Stewart & Co., of which firm the plaintiffs in error are the survivors, against Lewis C. Hopkins and wife, and Isaac M. Jordan, trustee in bankruptcy of Hopkins.

It appears from the record that A. T. Stewart & Co., merchants, of the city of New York, loaned, June 6, 1866, Hopkins, a merchant of Cincinnati, Ohio, $100,000, and took his promissory note of that date therefor, payable on demand with interest from date, to secure the payment of which he executed and delivered to them several mortgages on real estate in Cincinnati and its vicinity. Both before and after that date he bought of them large quantities of goods, and as a matter of convenience kept with them two accounts,-one a cash and the other a merchandise account. They were his bankers. All his remittances were sent to them and credited to him in the cash account. By drafts thereon he paid his debts for merchandise to them and other New York merchants, and in order to replenish it he borrowed the $100,000 above mentioned, and it was carried to his credit in that account. On May 4, 1867, he paid on his note $25,000. On Nov. 12, 1867, he remitted to Stewart & Co. § 10,000, on Dec. 27, 1867, § 17,000, on the 28th of the same month, $10,000, and on the 30th, $48,025. He directed these remittances to be applied to the payment of his note, and to be credited thereon. It is now no longer disputed that the first three of these remittances were so applied. The last two, with the interest thereon, constitute the sum now in controversy.

On Jan. 1, 1868, Hopkins suspended business, insolvent. At that time he owed A. T. Stewart & Co. $231,515 on account, and unsecured. His liabilities to others amounted to more than $500,000. A petition in bankruptcy was filed against him February 29. He was adjudicated a bankrupt March 30. On April 30 Jordan was appointed trustee.

As to the foregoing facts there is no dispute.

In August, 1868, on what day the record does not show, Stewart & Co. commenced this suit for the foreclosure of the mortgages, claiming as due the full amount of the note, less the payment of $25,000.

The answer, besides other defences not pertinent to any contention now raised, averred that Hopkins had paid on the note, not only the said sum of $25,000, but also the remittances above mentioned, making the total amount paid thereon $110,025; and, after alleging that said payments were made in fraud of the Bankrupt Act, demanded, by way of counterclaim, a judgment against Stewart & Co. therefor.

The reply admitted that Hopkins requested Stewart & Co. to credit the remittances on his mortgage debt, and averred that they were held subject to his order, and continued to be so held, up to the time when the rights of Jordan, trustee, attached, subject to such law of set-off as is provided in the Bankrupt Act. It nowhere appeared in the pleadings that Hopkins was indebted to the plaintiffs on any unsecured claim, or in any other way, except upon the note for $100,000. No unsecured debt of Hopkins was pleaded as a set-off or otherwise.

The Superior Court found that the mortgages were valid, and the first lien on the premises therein described, and that there was due thereon, including interest, the sum of $75,957.06. It rendered a final decree that unless that sum with interest be paid within one hundred and eighty days therefrom to Stewart & Co., the mortgaged premises should be sold.

The court further found that when Hopkins made the last two remittances, of $10,000 and $48,025, respectively, it was with the intent and the express instruction in writing to Stewart & Co. to apply them in discharging the mortgage claim; that Stewart & Co. refused to do so, but assumed, without his authority or consent, to apply and did apply them to his credit on the general account against him for merchandise; that Stewart & Co. had no right to make such application; and that the remittances remained in their hands as his moneys from the several days of their payment until Feb. 29, 1868, when the title of Jordan as trustee attached thereto. It also found that the said two several sums were not subject to any claim of set-off or cross-demand, or of mutual debts or credits, on the part of Stewart & Co., under sect. 20 of the Bankrupt Act, or otherwise.

The court, therefore, rendered a decree in favor of Jordan, trustee, against Stewart & Co. for $58,025, the aggregate of the last two remittances, with interest, amounting in all to $75,981.36.

The case was carried, by the petition in error of Stewart & Co., and the cross-petition in error of Jordan, trustee, to the Supreme Court of Ohio, by which the decree of the Superior Court was affirmed.

Stewart & Co. thereupon brought the case here by writ of error. Some of the members of the firm have died, and Libby and another are its surviving members.

Mr. Aaron F. Perry for the plaintiffs in error.

Mr. Jackson A. Jordan and Mr. Isaac Dayton, contra.

MR. JUSTICE WOODS, after stating the facts, delivered the opinion of the court.

title: Libby v. Hopkins


text: Talk:Libby v. Hopkins

title: Talk:Libby v. Hopkins


text:
Libby v. Hopkins/Opinion of the Court

The only question to which our attention is directed by the plaintiffs is that of set-off under the twentieth section of the act of March 2, 1867, c. 176 (14 Stat. 517), which is as follows: 'In all cases of mutual debts or mutual credits between the parties, the account between them shall be stated, and one debt set off against the other, and the balance only shall be allowed or paid, but no set-off shall be allowed of a claim in its nature not provable against the estate: Provided, that no set-off shall be allowed in favor of any debtor to the bankrupt of a claim purchased by or transferred to him after the filing of the petition.' This provision was in force at the time of the trial, and is now substantially incorporated in sect. 5073 of the Revised Statutes.

The contention of the plaintiffs is that they were entitled under this section to set off an unsecured account due them from Hopkins against the $58,025 remitted to them by him with directions to credit it on his mortgage debt, and which they refused so to apply.

Waiving the difficulty that they have not pleaded that account as a set-off, we shall consider the question made by them. The account is a claim provable against the bankrupt estate, and it was not purchased by or transferred to them after the filing of the petition in bankruptcy. The controversy is, therefore, reduced to this issue: Were that account and the money transmitted by Hopkins to them, and held and not applied by them to the mortgage debt, mutual credits, or mutual debts which could be set off against each other under the twentieth section of the Bankrupt Act?

The plaintiffs insist that the term 'mutual credits' is more comprehensive than the term 'mutual debts' in the statutes relating to set-off; that credit is synonymous with trust, and the trust or credit need not be money on both sides; that where there is a deposit of property on one side without authority to turn it into money, no debt can arise out of it; but where there are directions to turn it into money it may become a debt, the reason being that when turned into money it becomes like any other mutual debt. They say that the first of the two remittances under consideration is not proved to have been other than money, but as it was only $10,000 its application to the note could not be required. The larger remittance was in drafts, and their application could not be required. But there was authority to turn them into money, and that to get the money on them it was necessary that the drafts should be indorsed by the plaintiffs, and that the indorsement to and collection by them put the money received in the same plight as if the drafts had been sent to them for collection. We cannot assent to these views, and they receive but little support from the adjudged cases.

Ex parte Deeze (1 Atk. 228) arose under the twenty-eighth section of the statute 5 Geo. II. c. 30, which provides that 'when it shall appear to the said commissioners [in bankruptcy] or the major part of them, that there hath been mutual credit given by the bankrupt and any other person, or mutual debts between the bankrupt and any other person, at any time before such person became bankrupt, the said commissioners, or the major part of them, or the assignees of such bankrupt's estate, shall state the account between them, and one debt shall be set against another, and what shall appear to be due on either side on the balance of said account, and on setting such debts against one another, and no more shall be claimed on either side respectively.' In that case, a packer claimed to retain goods not only for the price of packing them, but for a sum of 500 lent to the bankrupt on his note. Lord Hardwicke determined that he had such right on the ground of mutual credits, holding that the words 'mutual credits' have a larger effect than 'mutual debts,' and that under them many cross-claims might be allowed in cases of bankruptcy, which in common cases would be rejected.

But this ruling was subsequently made narrower by Lord Hardwicke himself, in Ex parte Ockenden (id. 235), and was in effect overruled in Rose v. Hart, 8 Taunt. 499. In that case trover was brought for cloths deposited by the bankrupt previously to his bankruptcy, with the defendant, a fuller, for the purpose of being dressed. It was held that the defendant was not entitled to detain them for his general balance for such work done by him for the bankrupt previously to his bankruptcy, for there was no mutual credit within that section. And the court declared that the term 'mutual credits' in the act meant only such as must in their nature terminate in debts.

The rule established in this case, as to the nature of the credits which can be the subject of set-off, has been declared in other cases. Smith v. Hodson, 4 T. R. 211; Easum v. Cato, 5 Barn. & Ald. 861. The effect of the authorities is, that the term 'mutual credits' includes only such, where a debt may have been within the contemplation of the parties.

These authorities make it clear that, even under the Bankrupt Act of 5 Geo. II., the plaintiffs would have no right to the set-off claimed by them. And they lose sight of the controlling fact that the money and the drafts which they turned into money were remitted, with express directions to apply them on a specific debt. Without the consent of Hopkins they could never be changed into a debt due to him from the plaintiffs, and that consent has never been given.

Whether or not be had the right to direct the application, is immaterial. There was no legal obstacle to the application as directed. The fact that he gave the direction imposed on the plaintiffs the obligation to apply the money as directed, or to return it to him.

They had no better right to refuse to make the application and to retain the money and set off against it the debt due to them from Hopkins, than if they had been directed to pay the money on a debt due from him to another of his creditors, or than they had to apply to the payment of his debt to them money which he left with them as a special deposit.

Hopkins sent them the money and drafts, upon the faith and trust that they would be applied according to his instructions. The refusal so to apply them did not change the relations of the parties to this fund, nor make that a debt which before such refusal was a trust. To so hold would be to permit a trustee to better his condition by a refusal to execute a trust which he had assumed. Winslow v. Bliss (3 Lans. (N. Y.) 220) and Scammon v. Kimball (92 U.S. 362), cited by the plaintiffs to support their contention, are cases where a bank or banker was allowed to set off the money of a depositor against a debt due from him to the bank. The answer to these authorities is that the relation between a bank and its general depositor is that of debtor and creditor. When he deposits moneys with the bank, it becomes his debtor to the amount of them. Foley v. Hill, 2 H. L. Cas. 28; Bank of the Republic v. Millard, 10 Wall. 152; Bullard v. Randall, 1 Gray (Mass.), 605. When, therefore, he becomes indebted to the bank, it is a case of mutual debt and mutual credit, which may well be set off against each other.

But in this case there was no deposit. The relation of banker and depositor did not arise, consequently there was no debt. When A. sends money to B., with directions to apply it to a debt due from him to B., it cannot be construed as a deposit, even though B. may be a banker. The reason is plain. The consent of A. that it shall be considered a deposit, and not a payment, is necessary and is wanting.

Another answer to the contention of the plaintiffs is found in the language of the twentieth section of the Bankrupt Act of March 2, 1867, c. 176, which differs materially from that of the twenty-eighth section of 5 Geo. II. c. 30. In our act the terms 'credits' and 'debts' are used as correlative. What is a debt on one side is a credit on the other, so that the term 'credits' can have no broader meaning than the term 'debts.' We find no warrant in the language of the section or its context for extending the term 'credits' so as to include trusts. Generally we know that 'credit' and 'trust' are not synonymous terms. They have distinct and well-settled meanings, and we see no reason why they should be confounded in interpreting the twentieth section of the Bankrupt Act.

To authorize a set-off there must be mutual credits or mutual debts. The remitting of certain money assets by Hopkins to the plaintiffs, to be applied by them according to his instructions, did not make them his debtors, but his trustees. So that there were in the case no mutual credits or debts. The indebtedness was all on the side of Hopkins. The plaintiffs owed him nothing. They held his money in trust to apply it as directed by him.

They refused to make the application as he directed. They held it, therefore, subject to his order. They continued so to hold it until the rights of the trustee in bankruptcy attached, and until he sought to recover it by his counter-claim filed in this case.

The only contention of the plaintiffs set up in this court is that the Supreme Court of Ohio approved of the action of the Superior Court of Cincinnati, in refusing to allow the plaintiffs to set off the unsecured debt due to them by Hopkins against funds intrusted to them by him for an entirely different purpose. We are of opinion that the decision of the. Superior Court was correct. The judgment of the Supreme Court of Ohio must, therefore, be

Affirmed.

title: Libby v. Hopkins/Opinion of the Court


text: Talk:Libby v. Hopkins/Opinion of the Court


text:
Pickering v. McCullough

APPEAL from the Circuit Court of the United States for the Western District of Pennsylvania.

The facts are stated in the opinion of the court.

Mr. James E. Maynadier for the appellants.

Mr. William Bakewell, contra.

MR. JUSTICE MATTHEWS delivered the opinion of the court.

title: Pickering v. McCullough


text: Talk:Pickering v. McCullough

title: Talk:Pickering v. McCullough


text:
Pickering v. McCullough/Opinion of the Court

This is a bill in equity, filed by the appellants, to restrain the appellees from infringing reissued letters-patent No. 6166, dated Dec. 8, 1874, to George Nimmo, for an improvement in moulding crucibles, and for an account, the patent having been reissued to the complainants as assignees of Nimmo, the inventor and original patentee.

The original patent, No. 49,140, granted to him, bears dated Aug. 1, 1865.

The subject of the alleged invention is an improvement in the manufacture of moulding crucibles and pots, made of a plastic material, composed of plumbago, or so-called black-lead and fire-clay, used principally in the manufacture of steel. They were formerly made by hand, on a common potter's wheel, the hand and eye of the skilled workman building them up in the desired shape, as the material revolved upon the wheel. It is recited in the original patent to Nimmo that they had also been made in a mould, by a pressing instrument, for which reference is made to letters-patent, granted Oct. 26, 1852, to John Akrill. It is stated also by Nimmo, in the specification to his original patent, that 'difficulty has heretofore been experienced in removing the crucibles from the mould, in consequence of the adhesive nature of the black-lead compound or mixture employed for such crucibles. The amount of water, also, that is required to make the mixture sufficiently plastic causes the material frequently to crack and break in shrinking as it dries.'

The following is the description of the invention, as contained in the specification, referring to the drawing accompanying it:--

'The nature of my said invention consists in the manufacture     of crucibles in a plaster mould, which gives shape to the pot      externally and absorbs the moisture from the pot, causing it      to dry uniformly and at the same time shrink away from the      mould, preventing the air acting on the outside of the pot      until after the moisture has been mostly absorbed, and      prevents the pot from splitting or cracking from unequal      contraction in drying. I mount my plaster mould in a     revolving chuck, and employ a rib attached to a lever for      spreading the plastic crucible material on the inside of the      mould, and at the same time hardening, consolidating, and      polishing the crucible on the inside by means of said rib.

'In the drawings is a bed carrying the vertical spindle, on     the upper end of which is the hollow chuck, into which the      plaster mould fits, and these parts are revolved by a belt to      a wheel and crank, or by any other competent means. Near the     chuck is an upright frame, with rollers over which the chain      or rope passes, on one end of which is the counter-weight,      and on the other the lever, having a handle at one end and      carrying the rib. This lever is guided by the upright frame,     and when not in use is drawn up by the weight. The crucible     material is placed in the plaster mould, and partially spread      by hand or by a conical muller. The back end of the lever is     then brought beneath the stop or fulcrum, and pressed down      until the lever takes a stop. The rib on the lever smooths,     compresses, hardens, and polishes the interior of the mould, forming a perfect crucible, possessing great strength      and beauty. At the same time there is great uniformity in the     crucibles made in this manner. The crucible and mould are to     be lifted off the chuck, and another mould introduced in the      chuck, and the operation repeated.

'The crucible and mould are set aside. When the plaster of     the mould has absorbed the moisture from the crucible, and      the crucible has contracted away from the mould, and become      sufficiently dry to be exposed to the air without risk of      cracking, the crucible is to be removed and dried in any      usual manner, and may be baked or burned.'

The claims are as follows:--

'What I claim and desire to secure by letters-patent is,--

'1. Manufacturing crucibles in a plaster mould, in the manner     and for the purposes specified.

'2. Lever l and rib n, applied in the manner specified to     form the interior of a crucible contained within a revolving      mould, as set forth.

'3. The combination of the revolving chuck c, plaster mould     d, lever l, and rib n, as and for the purposes specified.

'4. Mounting the lever l and rib n in the frame g in the     manner specified, in combination with the counterpoise k,      fulcrum o, and stop p, for determining the size of the      interior of the crucible, as specified.'

It is conceded by counsel for the appellants that the claims in this patent were invalid, as being too broad, and that it was for this reason, and for a more definite and limited description of the real invention intended to be claimed, that it was surrendered and reissued.

The state of the art, at the date of his original patent, is described by Nimmo in the reissue, as follows:--

'Long prior to said Nimmo's invention the mode of     manufacturing certain articles of pottery by means of a rib      or former to give the desired shape to the inside of the      article, and a revolving plaster vessel to properly present      the 'ball' (as the lump of tempered clay is called) to and      support it under the action of the rib, was well known; but      this mode of manufacture was not applicable in the      manufacture of crucibles, because the crucible would be      injured or destroyed the crucile would be injured or      destroyed in removing the rib, by the end of the rib striking the upper part of the crucible,      as will be plain to all skilled in the art of      crucible-making, and acquainted with the mode of manufacture      above referred to.

'Another mode of manufacturing certain articles of     pottery-ware by means of a rib or former for the inside of      the article, and a revolving table (a common potter's wheel)      which partially presented the ball to and supported it under      the action of the rib, the workman using his hands to aid in      presenting the ball to and supporting it under the action of      the rib, is described in a French work published in 1857,      entitled 'Lecons de C eramique,' par M. A. Salvetat, volume      second, pages 121-2. This last-named mode of manufacture was     applicable to the manufacture of crucibles, the apparatus      being such that the rib was guided so as to cause it to      approach the axis of the pot, where it was necessary that it      should do so in order to prevent injury to the pot; but, even      if useful at all in that manufacture, it is without doubt      very much inferior to the mode of manufacture invented by      Nimmo, and hereinafter described, the distinguishing      difference between them being that the ball is presented to      the rib and supported under its action, not by a flat      revolving metal disk, but by a vessel made of plaster, which      takes the place of both the flat revolving disk and the      workman's hands, performing all the functions performed by      this disk and the hands of the workman, but in a much more      perfect manner and in less time.

'The invention of said Nimmo is, in fact, an improvement on     the mode of manufacture, as well as on the apparatus,      described in Salvetat's work, the improvement consisting in      the different mode of presenting and supporting the ball; but      we do not wish to be understood as claiming this mode of      presenting and supporting the ball as the invention of said      Nimmo, as his improved mode of manufacture is new solely      because it is, as a whole, substantially different from the      mode described by Salvetat, and from the mode first above      referred to; indeed, as a short general description of      Nimmo's improved mode, it may be said to be substantially the      same as that described by Salvetat, so far as shaping the      inside of the crucible is concerned, and substantially the      same as the mode first above referred to, so far as      presenting the ball to and supporting it under the action of      the rib is concenred. By Nimmo's improved mode of manufacture     much labor and expense are saved, and, what is still more      important, crucibles are produced which are superior to those      made by any practical mode known prior to said Nimmo's      invention, in many very important respects.' The drawings are the same in both the original and reissued patent, but in the description of the machine, with reference to the drawing contained in the reissue, prominence is given to the mode of operating the rib, after the crucible is formed, by which it can be withdrawn without striking and injuring the crucible, as to which no allusion was made in the original patent. It is admitted, however, that this mechanism is substantially the same as that described by Salvetat in the publication referred to.

The reissue expressly disclaims as the invention of Nimmo both the modes and both the apparatus above mentioned, that is, the use of a rib or former to give the desired shape to the inside of the article, and the revolving plaster vessel or mould; and the mode and apparatus described by Salvetat, that is, the use of a rib or former, the apparatus being such that the rib is guided so as to cause it to approach the axis of the crucible, when it was necessary that it should do so in order to prevent injury to it.

The importance of this feature in any apparatus of the kind becomes manifest from the fact that crucibles of the character of those intended to be made by this process usually have what is termed 'a bilge,' that is, are smaller in circumference at the mouth or top than at some other point; so that if the rib or former were lifted out perpendicularly from the position it occupies while in operation, it would necessarily strike against the interior surface of the crucible as it rose. To avoid this, it has to be withdrawn from the position it occupies while in the act of forming the internal surface of the crucible, to one nearer to the axis of rotation, so that being lifted, it may pass upward through the mouth of the crucible without striking against the sides. And considering how characteristic is this feature of the apparatus, and how essential it is to its profitable use, it is worthy of note that Nimmo, in his original patent, does not allude to it, although his claim for managing his rib includes it; and equally so, that it does not seem to have suggested to him, at that time, its utility in connection with the manufacture of crucibles with a bilge, for his description does not distinguish between those which have and those which have not a bilge, and his drawing is that of a mould with a flaring mouth, for the making of which such a motion of the former, in withdrawing it, is not necessary. In addition the mould itself, made of plaster, for vessels having a bilge, is required to be in two parts, in order that it may be removed from the crucible after the operation is complete,-an adaptation which does not appear either in Nimmo's specifications or drawing.

Nimmo's actual claim, as made in the reissue, is as follows:

'The improved apparatus above described, having the specific     character, objects, and functions above explained, and      consisting of the rib, the revolving mould, and the mechanism      by which the rib is guided toward the axis of revolution of      the mould as it is withdrawn, as set forth, these elements      being claimed only in combination each with all the others,      and no claim is made to any combination of any of them less      than the whole.'

It is admitted in argument by counsel for the appellants that the mould is old and the rib is old, but it is claimed that prior to Nimmo's invention the mechanism for combining the rib and mould into one machine was such that the rib could not be moved bodily towards the axis of the mould or away from that axis.

Besides a denial of the alleged infringement, the appellees maintained several defences. They claimed that the reissued patent is void: because the claim is too broad; because there is no coactive combination between the elements of the claim; because the state of the art, as set forth in the specification, shows that there is no novelty in the alleged combination; because the reissue is for a different invention from that described in the original patent; and because the alleged invention of Nimmo had been fully anticipated. The anticipations set out in the answer and relied on were:--

1. By the Salvetat publication.

2. By the Wise patent, being a patent granted to Jacob Wise and Freeman Wise, dated Nov. 30, 1852, No. 9437, for an 'improvement in the manufacture of stone and earthen ware.'

3. By the Smith patent, being a patent granted to William Smith, dated Nov. 3, 1863, No. 40,506, for apparatus for making plumbago crucibles.

4. By prior knowledge and use of the alleged invention at Kier's works in Pttsburgh.

The decree below dismissed the bill, to reverse which this appeal is prosecuted.

The account given in the specification of the reissued patent, of the state of the art at the date of the alleged invention, and the reference to Salvetat's publication, describing the method and apparatus referred to, and a comparison of that with the claims and disclaimers of the appellants, require a more particular examination of Salvetat's description of the device and its mode of operation, as contained in his publication. It will be observed that the reissue represents Salvetat as having fully described the rib or former, and the mechanism which guides it so that it can be withdrawn from the crucible, when completed, without injury, even when it has a bilge; but as omitting in connection with it any use of a mould. The statement of the reissue is, that while Salvetat described the use of the rib for forming the interior of the vessel, its external form was moulded by the unassisted hand of the workman, manipulating the ball while revolving on the flat disc of the common potter's wheel. And the alleged invention of Nimmo consists merely in adding a mould to the apparatus described by Salvetat to form the combination which he claims as his invention.

An examination of the extract from Salvetat's publication, descriptive of this apparatus and method, which is contained in the record, makes it doubtful whether the account of it given in the specification of the reissued patent is not a misconception. The drawings illustrating it, it is true, do not show a mould, and the text in referring to them says the vessel is supported by the wheel. But this, perhasps, is explained by the statement that it is intended to show merely how Messrs. Bourgon and Chalot, the originators of it, have arranged the rib in a very ingenious manner for hollowing out hollow-ware with the rib itself. The whole article or chapter is entitled, 'Hollow-ware pressing in plaster moulds;' and its very purpose seems to be to explain the use and utility of moulds in shaping the forms of pottery by pressing, and all the other processes and devices mentioned certainly refer to moulds as used. If the rule noscitur a sociis applies, there would be little room to doubt that the one in question also contemplated their use, and it seems difficult to understand how the vessel can be shaped externally unless the mould is implied.

But we assume, for the purposes of this case, that the account, as contained in the reissued patent, of this method and apparatus is correct, and that Salvetat does not describe the use of a mould in combination with the rib. There is, however, no doubt whatever that Salvetat describes the operation of a rib, by means of a mechanism which directs it in the formation of the interior of a vessel, while in motion on a revolving wheel, and guides it when the vessel is formed, even when it has a bilge, so that, by bringing it into a proper relation with the axis of revolution, it can be withdrawn from the side of the vessel which it has shaped, and lifted through its mouth or top, without touching and injuring its sides. This is conceded by the appellants, and is admitted in the patent itself. It is also confessed that the use of the mould for supporting the ball, while the rib or former presses it on the inside, and thus shapes its corresponding outside, is old, and is not of itself claimed as the invention of Nimmo. The alleged invention, then, consists merely in supplying to the apparatus described by Salvetat a mould for supporting the ball and giving shape externally to the crucible.

We are clearly of opinion that this is not patentable. It comes plainly within the rule, as stated by Mr. Justice Strong, in Hailes v. Van Wormer (20 Wall. 353, 368), where he said: 'All the devices of which the alleged combination is made are confessedly old. No claim is made for any one of them singly, as an independent invention. It must be conceded that a new combination, if it produces new and useful results, is patentable, though all the constituents of the combination were well known and in common use before the combination was made. But the results must be a product of the combination, and not a mere aggregate of several results, each the complete product of one of the combined elements. Combined results are not necessarily a novel result, nor are they an old result obtained in a new and improved manner. Merely bringing old devices into juxtaposition, and there allowing each to work out its own effect, without the production of something novel, is not invention.'

'The combination, to be patentable,' said Mr. Justice Hunt, in Reckendorfer v. Faber (92 U.S. 347, 357), 'must produce a different force or effect, or result, in the combined forces or processes, from that given by their separate parts. There must be a new result produced by their union: if not so, it is only an aggregation of separate elements.'

In Nimmo's apparatus, it is perfectly clear that all the elements of the combinations are old, and that each operates only in the old way. Beyond the separate and well-known results produced by them severally, no one of them contributes to the combined result any new feature; no one of them adds to the combination anything more than its separate independent effect; no one of them gives any additional efficiency to the others, or changes in any way the mode or result of its action. In a patentable combination of old elements, all the constituents must so enter into it as that each qualifies every other; to draw an illustration from another branch of the law, they must be joint tenants of the domain of the invention, seised each of every part, per my et per tout, and not mere tenants in common, with separate interests and estates. It must form either a new machine of a distinct character and function, or produce a result due to the joint and co-operating action of all the elements, and which is not the mere adding together of separate contributions. Otherwise it is only a mechanical juxtaposition, and not a vital union.

In the case of this apparatus the mould was known, and a rib or former was known, and their use in combination was known. Salvetat described a rib, so arranged that, after it had performed it function in shaping the interior of the vessel, it could be withdrawn, through the top of the vessel, so as not to produce injury by striking against its side. This rib Nimmo substituted for the old one in the same combination. And this is the whole of the invention. Upon the principle stated, there is no invention in it.

We are also of opinion that the invention claimed for Nimmo, as described in the reissued patent, is covered by the prior patents to Wise and to Smith.

Undoubtedly they both embody the principle of a former used in combination with a mould, for the purpose of manufacturing crucibles, connected so that the former can be withdrawn in the case of vessels having a bilge, without injury.

It is objected, however, that the machines described in these patents are mere paper machines, not capable of successful practical working. But on examination it sufficiently appears, we think, that the objections can be sustained only as to minor matters of detail in construction, not affecting the substance of the invention claimed, and could be removed by mere mechanical skill, without the exercise of the faculty of invention. In this view, the Wise and Smith patents are not rendered inefficient as defences in this suit, by reason of the alleged imperfections of the machines described in them.

The bill of the appellants was dismissed by the court below, on the ground of the prior knowledge and use of the alleged invention at Kier's works in Pittsburgh. We are of opinion that the testimony sustains that finding.

Decree affirmed.


text: Talk:Pickering v. McCullough/Opinion of the Court