text:
Talk:Constitution of Ukraine, 2010

Readoption of the 1996 Constitution of Ukraine
The Constitutional Court of Ukraine annulled the 2004 Ukrainian constitutional amendments, and readopted the 1996 constitution on 1 October 2010. A.h. king (talk) 08:22, 16 October 2010 (UTC)

If
this constitution has been abolished in 2014 which constitution is valid today? --2A02:908:C30:3680:19E:28D8:822C:24D6 11:15, 10 July 2017 (UTC)

Constitutional Court of Ukraine adopted Constitution of Ukraine?
Constitutional Court of Ukraine adopted Constitution of Ukraine???? Where is it prescribed that Constitutional Court adopted the Constitution of Ukraine? Aleksandr Grigoryev (talk) 20:06, 5 December 2018 (UTC)

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

title: Talk:Constitution of Ukraine, 2010


text:
Avery v. Hackley

ERROR to the Circuit Court for the Western District of Michigan.

Avery, assignee of Blake, a bankrupt, brought trover in the court below against Hackley & Co. to recover the value of certain saw-logs, alleging that they had been transferred by the bankrupt to the said Hackley & Co. in fraud of the Bankrupt Act.

The case, as found by the court on a waiver of a jury, was thus:

Hackley & Co. were owners of saw-mills and engaged in sawing logs, and so making boards from them. Blake was a lumberman without capital, and engaged in buying logs and bringing them to saw-mills to be thus sawed into boards.

On the 25th of January, 1868, a contract was made between the two parties, by which Blake, on the one hand, agreed to deliver at the saw-mill of the defendants 18,000,000 feet of saw-logs to be sawed into boards, and by which Hackley & Co., on the other, agreed to advance to him $4 per 1000 feet, to be paid from time to time as the sawing advanced, and to be applied exclusively to the purchase of logs to be brought to them to be sawed.

To secure the advances, the property in the logs was conveyed to the defendants and the right of property vested in them; and they covenanted that when the lumber was manufactured they would send it to market and sell it to the best advantage; the proceeds to be equally divided between the parties.

Blake accordingly sent to the defendants large quantities of logs, and the defendants advanced large sums ($77,000) of money upon them; the case, as found, showing that but for the advances Blake could not have got this lumber from the forests, and thence to the defendants' mills.

During the spring of 1868 the price of lumber fell largely, so much so that it seemed likely that all the logs which Blake had sent to the defendants would be inadequate to repay to them their advances on account of it. Hereupon Blake, on the 25th of May, in the year just named, informed the defendants that he was unable to pay his debts, and proposed to make an assignment. They objected to his doing this and requested him to make a bill of sale of his property to them. This he made; the bill of sale embracing not only the logs then at their mills, but certain land from which it was cut, and various property, saws, horses, oxen, wagons, &c., which had been used in getting it from the place where it grew to the mills. The defendants, however, did not deliver up nor cancel, nor agree to deliver up or cancel, the contract of January 25th, but contrariwise, kept it in their possession.

The bill of sale of May 25th was made afterwards, with a view to give the defendants a preference, and therefore in violation of the Bankrupt Act.

On the 2d of June, 1868, Blake was decreed a bankrupt, and Avery, the plaintiff below, appointed his assignee. Soon afterwards, the creditors objecting to the bill of sale, the defendants transferred to the assignee all the property conveyed by the bill except the logs. These they had sold, the proceeds paying them nothing above their advances previous to May 25th, and on their refusing to pay to the assignee these proceeds he brought the action below.

The question, of course, was whether this contract of the 25th of January was abandoned by the defendants doing what they had done subsequent to it (that is to say, by their taking, in the circumstances which they did, the bill of sale of May 25th), and merged in that bill. If so, the defendants had lost their lien, since it was obvious that they could not stand on the new contract of May 25th, it having been plainly void as to creditors. On the contrary, if the old security was not abandoned, then, although the defendants had attempted to strengthen their hold on the logs by an additional security, voidable at the election of creditors, and which the creditors did avoid, the right of lien justly acquired was not lost to the defendants, and they were at liberty to assert it in this action.

The court below decided that the lien was not affected by what was done on the 25th of May, and from that decision this writ of error was taken.

Mr. J. W. Champlin, for the plaintiff in error; Mr. E. A. Storrs, contra.

Mr. Justice DAVIS delivered the opinion of the court.

title: Avery v. Hackley


text: Talk:Avery v. Hackley

title: Talk:Avery v. Hackley


text:
Avery v. Hackley/Opinion of the Court

If the contract of January 25th, 1868, was never surrendered or abandoned it is manifest that the defendants acquired an interest in and lien upon the logs furnished by Blake to the extent of the advances made by them. There could be, therefore, on the theory that the contract of the 25th of January was subsisting, no ground for the maintenance of this action. It is said, however, that the defendants lost their rights under this contract by what occurred and was done subsequently to its execution.

It is undeniable that before the execution of the contract of May 25th the logs in controversy were in the possession of the defendants, who had advanced on them to Blake a very large sum of money. Without these advances the logs could not have been cut, banked, and put in the river; and, unless the defendants have plainly lost their right to retain the logs, common justice requires that they should be repaid. The honesty of the transaction is undisputed. Nor is there anything to show that the defendants were aware of the insolvent condition of Blake until after the logs had been delivered and the money advanced. They were proceeding in good faith to carry out their part of the contract when they were met by information of Blake's inability to go on with his business. The bill of sale, as it is called, which they took embraced not only the logs in controversy, but other personal property and real estate.

It is fair to infer from the facts found in the case that the bill of sale was not intended to clothe the defendants with any greater rights in the logs than they possessed without it, for it is very clear that the parties acted on the idea that the lumber, when manufactured and sold, would fall short of reimbursing the defendants for their advances, interest, and expenses. To save them from anticipated loss was, doubtless, the motive for including the remaining property of Blake, and not any expectation that previously acquired legal rights would be enlarged. The giving this preference has not operated to lessen the estate of Blake, as the creditors got everything but the logs, and these, as it turns out, Blake had no interest in.

If there were any reasonable doubt about the intention of the defendants not to abandon the contract of January 25th, it is set at rest by the consideration that when the bill of sale was executed and delivered there was no agreement to cancel it, nor was it, in fact, cancelled, but was held and retained by the defendants. Naturally, if they had intended to rest their right to the logs exclusively on the bill of sale, they would have surrendered the former security. It is, therefore, not a case where an old security is abandoned and given up, and a new one taken as a substitute for that which previously existed. If, then, the contract of 25th January was not merged in the contract of 25th May, the latter one cannot operate an extinguishment of the former, the fairness of which has not been denied. This would not be the case if both contracts were valid, unless by express agreement, and it would be singular if such an effect could be produced, where one of them could be avoided by creditors as against the policy of the law. The creditors having elected to avoid the fraudulent conveyance, take the property as though it had never been made, and subject to all lawful liens upon it. The assignee, standing in the place of the bankrupt, acquired no greater rights than he possessed, and the defendants neither gained nor lost any rights because of the bill of sale.

These general views are sustained by authorities which seem decisive of the point at issue.

One of these authorities, White v. Gainer, was trover by the assignee of a bankrupt. The defendant, a maker of cloth, who had a lien on some cloth in his possession, purchased it of the bailor, together with several other pieces, after he became bankrupt, and when the cloth was demanded of him by the assignees of the bankrupt, refused to give it up, saying, 'I may as well give up every transaction of my life.'

It was contended at the trial that the lien was merged in the purchase, and that, at all events, it was waived, because not set up when the cloth was demanded. The judge directed the jury that the demand should have been accompanied with a tender of the amount due for the workmanship on the cloths, but reserved the point as to the merger of the lien.

On deciding the motion for a rule nisi to set aside the verdict, Best, C. J., said: 'It has been urged that he (the defendant) bought the cloths after the bankruptcy. If that were so, he stands in the same situation as every other purchaser, under the same circumstances; the purchaser is liable to restore them to the assignees, but the assignees must take them subject to such rights as had accrued previously to their claim, and the bankruptcy of the bailor will not deprive the defendant of the right to which he is entitled,-the right of lien. It might have been otherwise, if the defendant, when called on to surrender the goods, had relied on the purchase; but this was not the case, and the verdict must stand.'

The rule laid down by Chief Justice Best is applicable here.

The assignee of Blake had no right to the property until he had tendered the advances upon it, and there is no evidence that the defendants placed their refusal to deliver the property upon any particular ground. In the absence of this evidence it is a reasonable presumption that the lien, if not asserted in terms, at least, was not when demand was made, waived. It is true the defendants claimed, after the execution of the bill of sale to the creditors of Blake and other persons, to be the absolute owners of the property conveyed to them, but so far as the logs were concerned, this claim was doubtless founded on the belief that the price of lumber would not advance, and if it did not, according to the estimates which were made, Blake had no interest in them. If so, although the claim of absolute ownership might not be legally correct, it had a basis of fact to rest upon, and does not prove that the defendants intended to abandon their lien. Indeed, it would be a harsh rule to infer the abandonment of a lien to the extent of this one, contracted in good faith in the prosecution of a legitimate business, unless the evidence on the subject left no other alternative.

It is said that after the execution of the bill of sale the lumber was not sold no joint account, and, therefore, the lien was waived. The answer to this is that the contract by which the lien was secured did not require the lumber to be sold on joint account. If the defendants sent the lumber to market, sold it to best advantage, and divided the proceeds, the contract on their part was complied with. They had entire control over it, and the manner of sale is immaterial and cannot affect the rights of the parties.

The leading purpose of the Bankrupt law is to secure an equal distribution of the bankrupt's property among his creditors. This purpose was accomplished in this case when the bill of sale was set aside, but the assignee seeks to go further and increase the estate more than seventy thousand dollars by relieving the bankrupt from the performance of a per-existing valid contract. This he cannot do, unless on the clearest proofs that the defendants intended to abandon this contract and rely wholly on the bill of sale. As these proofs are wanting, the judgment is

AFFIRMED.

title: Avery v. Hackley/Opinion of the Court


text: Talk:Avery v. Hackley/Opinion of the Court


text:
Mays v. Fritton

ERROR to the Supreme Court of Pennsylvania; the case being thus:

In the year 1862, one Born executed a mortgage to Doll and others, on real estate which he then owned. Some years afterwards, that is to say, on the 16th of January, 1868, he gave to a Mrs. Fritton a bond for $4000, payable in one year, with warrant to confess judgment. On this warrant Mrs. Fritton caused a judgment to be entered on the day on which it was given.

On the 31st day of the same month, a petition was presented by a creditor of Born alleging that various acts of bankruptcy had been committed by him on the 1st, 3d, and 4th of the same month, and praying that he might be declared a bankrupt. On the 28th day of February, 1868, he was accordingly adjudged a bankrupt, and on the 18th of March one Mays was appointed assignee.

On the 6th of July, 1868, Doll, the mortgagee, already mentioned, foreclosed his mortgage in one of the county courts of Pennsylvania, and he having received from the sheriff the amount of it (no question as to the validity of his lien having existed), there remained a sum of $5192 above that amount, which the court referred to an auditor to distribute. Going before the auditor, Mrs. Fritton insisted that her judgment was a lien upon the proceeds of the property sold, and that she was entitled to the proceeds.

The assignees appeared by their counsel and claimed the entire fund, on the grounds:

'First. That it was the property of a bankrupt, and that, by reason of the bankruptcy, all his estate passed to the assignees.

'Second. That Mrs. Fritton's judgment was given in fraud of the Bankrupt law,' and was void for various other reasons set forth.

The Bankrupt Act enacts:

'SECTION 35. If any person, being insolvent or in contemplation of insolvency, and within four months before the filing a petition by or against him, with a view to give a preference, procures his property to be attached or seized on execution, or makes any payment, pledge, transfer, or who shall within six months make any sale, transfer, conveyance, or other disposition of his property to any person having reasonable cause to believe that such person is insolvent and such payment, &c., is made in fraud of the provisions of this act, the same shall be void, and the assignee may recover the property, &c., from the person so to be benefited.'

Mrs. Fritton denied the abovementioned allegations of fact made by the assignees, and on her affidavit that they were untrue, a jury was demanded and granted, in pursuance of the practice in such cases in Pennsylvania. The jury found that at the time of giving the bond and warrant Born was insolvent, but that Mrs. Fritton had not reasonable cause to believe that he was, and that the judgment was given to secure a prior debt, but was not given to enable Mrs. Fritton to obtain a preference over other creditors.

After the jury had thus passed upon the questions of fact, the counsel for the assignees again appeared before the auditor, claiming the fund and insisting that under the findings of the jury Born was insolvent when he executed the warrant of attorney to Mrs. Fritton; that it was given to secure a prior debt, and was a fraud upon the provisions of the Bankrupt Act.

The auditor awarded the fund to Mrs. Fritton, and the assignees took an appeal to the Supreme Court.

Upon the appeal to that court it was contended that there was error, among other things, 'in disregarding the various provisions of the United States Bankrupt law in regard to preferences given by bankrupts, and in giving Mrs. Fritton a preference over other creditors, contrary to the twenty-ninth section of the United States Bankrupt Act.'

In stating their position before the Supreme Court the assignees, in their argument, which was contained in the record, said:

'The inquiry is reduced to this: Who is entitled to the fund in court, Mrs. Fritton or Born's assignees?'

The Supreme Court affirmed the award below, which gave the fund to Mrs. Fritton, and the case was now brought here on error by the assignees.

Messrs. Durant and Horner, for the assignees, plaintiff in error:

1. The State court was without jurisdiction over Mrs. Fritton's claim. It erred in granting a feigned issue upon her affidavit, and in giving judgment in her favor. The whole subject belonged to the Federal courts to decide, and when it appeared that proceedings in bankruptcy had been taken and were still pending, the jurisdiction of the State court was at an end, and the matter should have been certified into the District Court of the United States for its determination. Whether the judgment creditor had a lien or not is a question which can only be solved in the Bankrupt court of the United States.

2. The judgment below was erroneous, because Mrs. Fritton's judgment was given to secure a prior debt. The case of Buchanan v. Smith, recently decided by this court, declares in effect that whatever enables a debtor to proceed more rapidly than if he was retarded by the necessary delay of an action, is a fraud upon the Bankrupt Act.

Messrs. A. V. Parsons and J. S. Parsons, contra:

1. Whether if the point now made by the opposing counsel as to jurisdiction had been made below, it would have been a good one, need not be in the least considered, since the record shows in the fullest manner that it was nowhere there made, and shows that everywhere, in fact, it was waived. A party cannot take, in this court, points not taken anywhere below. This is settled practice.

2. No doubt in Buchanan v. Smith many dicta are found which might militate against the present case. But it is manifest from what is said in the subsequent case of Wilson v. The City Bank, that Buchanan v. Smith did not express the views of this court, though it recorded its judgment upon the particular case. Indeed, since the case of Wilson v. The City Bank, it has not been regarded as of any authority.

Mr. Justice HUNT delivered the opinion of the court.

title: Mays v. Fritton


text: Talk:Mays v. Fritton

title: Talk:Mays v. Fritton


text:
Mays v. Fritton/Opinion of the Court

In looking into the record we do not find that the question of the jurisdiction of the State courts over Mrs. Fritton's claim, now made in the argument of the learned counsel of the assignees, was anywhere made in the courts below. It does not appear to have been made before the auditor, or before the Supreme Court on appeal. On the contrary, it affirmatively appears that the assignees submitted the question of the title to the fund to both of these courts, and asked its decision in their favor. In the proceeding before the auditor, before the jury passed on the questions of fact, this was the case. After the jury had passed upon them the counsel for the assignees again appeared before the auditor, claiming the fund and insisting that under the findings of the jury Born was an insolvent when he executed the warrant of attorney to Mrs. Fritton; that it was given to secure a prior debt, and was a fraud upon the provisions of the Bankrupt Act.

So, upon the appeal to the Supreme Court, the same ground was taken.

In all these instances the assignees submitted the decision of their claims to the State courts, and, in asking those courts to decide in their favor, necessarily asked them to decide the case.

While the assignees have made sufficient objection to the judgment rendered against them, we nowhere find an objection to the power of the court to render a judgment. An objection that the court has not decided correctly is a very different thing from an objection that the court has no power to decide.

The present was the case of the foreclosure of a mortgage under the State laws. The disposition of any surplus that might arise from a sale on such mortgage, under a proceeding in the State courts, prim a facie belonged to the State courts. The subject-matter was within their jurisdiction, and under their control. If special circumstances existed which altered that result, it was the duty of the party making such claim to state them and ask a ruling accordingly. Nothing of the kind was done in the present instance.

To be available here an objection must have been taken in the court below. Unless so taken it will not be heard here. It is not competent to a party to assent to a proceeding in the court below, take his chance of success, and, upon failure, come here and object that the court below had no authority to take the proceeding. This point comes before us at every term and is always decided the same way.

We are not called upon, therefore, to decide whether, in a case like the present, the State court having the fund in its possession, was competent to proceed to its distribution, or whether if demand had been made, there having been previous to that time a decree of bankruptcy and the appointment of assignees, the whole subject should have been remitted to the United States court.

The assignees contend further, that the judgment below was erroneous for the reason that the judgment of Mrs. Fritton was void under the Bankrupt Act, and that she was not entitled to the fund awarded to her. This is the question and the only question which was litigated by the assignees in the State courts.

The thirty-ninth section of the Bankrupt Act defines what acts of the debtor afford grounds for declaring him to be a bankrupt upon the petition of his creditor, among which are the following: 'Or who being bankrupt or insolvent,. . . shall make any payment, gift, grant, sale,. . . or give any warrant to confess judgment, or procure or suffer his property to be taken on legal process with intent to give a preference to one or more of his creditors.' The Bankrupt court, on the 31st of January, 1868, adjudged that Born had committed some of the acts in this section specified, by reason of which his creditor was entitled to have him declared a bankrupt.

Whether Mrs. Fritton shall retain this fund or shall lose it, depends upon the thirty-fifth section of the same act. That section enacts that if any person being insolvent or in contemplation of insolvency, and within four months before the filing a petition by or against him, with a view to give a preference, procures his property to be attached or seized on execution, or makes any payment, pledge, transfer, or who shall within six months make any sale, transfer, conveyance, or other disposition of his property to any person having reasonable cause to believe that such person is insolvent, and such payment, &c., is made in fraud of the provisions of this act, the same shall be void and the assignees may recover the property, &c., from the person so to be benefited.

To authorize the assignees to recover the money or property under this section, it is necessary that he should establish the act of the bankrupt, not only of which he complains, but also that it was done with a view to give a preference over other creditors, and that the other party to the transaction had reasonable cause to believe that such person was insolvent. For a full discussion of the law on this general subject, see the recent case of Wilson v. City Bank.

In the case before us, both of these necessary facts have been found against the assignees. In answer to the second inquiry submitted to them, the jury said that Mrs. Fritton had not reasonable cause to believe that Born was insolvent at the time he executed the warrant of attorney. In answer to the further inquiry, they said that this warrant of attorney was not given with a view to a preference over other creditors. The warrant of attorney cannot, therefore, be held void under the thirty-fifth section of the Bankrupt law. That section does not reach it, and as the act of the parties was valid under the statutes of Pennsylvania, there is nothing to impeach its validity.

We have not the evidence before us, and we must assume that the verdict of the jury is right. The statute assumes that there may be cases where the various acts of conveyance and disposition may be made, which would not amount to giving a preference.

We are of the opinion that the judgment of the Supreme Court of Pennsylvania was right, and that it should be

AFFIRMED.

title: Mays v. Fritton/Opinion of the Court


text: Talk:Mays v. Fritton/Opinion of the Court


text:
Belle of the Sea

APPEAL from the Circuit Court for the Eastern District of Pennsylvania; the case being thus:

The American ship 'Belle of the Sea,' owned by one Kimball, being in the port of New York, a certain Hammond, of that city, lent to her said owner, Kimball, $25,000 on a mortgage of the vessel; and the vessel sailed to Calcutta. On her return voyage from Calcutta to New York, she sprung a leak, was obliged to put into Mauritius for repairs, and to take up $46,000 on bottomry, the bottomry bond (now held by the Messrs. Ward in New York), covering ship, cargo, and freight. There were policies of insurance on both the ship and freight.

Shortly before the arrival of the ship at New York, the mortgage on her being long overdue, and the owner of the vessel, Kimball, being supposed to be unable to pay either bottomry bond or mortgage, Hammond, the holder of the mortgage, addressed himself to Higgins & Co., average adjusters, telling them that on the arrival of the vessel he meant to take possession of her, and that he wanted them to protect his interest in the mortgage generally. According to the account given of the matter by Higgins & Co., they agreed with him 'to transact the business, take up the bond, and divide one-half the commissions that could be earned in the case.' They subsequently saw the Wards, holders of the bond, and offered to take it up in behalf of Hammond, the mortgagee. The Wards agreed that if before twelve o'clock of a day named and then near at hand, Kimball, the owner of the vessel, did not take it up, they, the adjusters, might do so. At about eleven o'clock of the day thus fixed Kimball came with his two sons to the office of the adjusters. Higgins's account of the interview was to this effect:

'Mr. Kimball stated generally that he thought of putting the business of the vessel in our hands. I then told him that we had made all arrangements with Mr. Hammond to take up the bond, and that at twelve o'clock we expected to get it; that I did not think he could raise the requisite amount of money, or find anybody ready at a moment's notice to go into the affair, and that I therefore considered we were pretty certain of getting it.

'I further stated to him that as Hammond was then acting as mortgagee in possession, I didn't see that there need be any conflict, for if he could find any one to supply him with money to pay off Hammond, he would be bound to account for all moneys received by him flowing from the business of the vessel, and told him that I had made an arrangement with Hammond to divide one-half of the commissions with him. Mr. Kimball stated that he hoped to raise money and pay off Hammond, and that in that event he would expect Hammond to account to him for these commissions. I told him that my fee would be made in accordance with the trouble in the case. He then expressed his satisfaction, and volunteered to go and tell Mr. Ward that it was agreeable to him that we should take up the bond. I think I told him that we would endeavor to do justice to all parties interested; and he went away. At twelve o'clock we took up the bond; took an assignment of it from the Wards; and then we went on to manage the business of the vessel; everything being managed by Mr. Hammond, personally, in his capacity as mortgagee in possession. We put a man in possession. Mr. Kimball subsequently transferred the policies of insurance on the ship to us.

'I should state also that the same day, before we took up the bond, we were called on by the charterer, Samuel Stevens, who stated that he expected to have taken up the bond if he could have got it, in order to protect himself for advances made to the ship on account of freight-moneys, which he said amounted to $27,500, or thereabouts, and that he had given notice to all the consignees not to pay the freight to anybody else but himself. I told him that that process would lock the whole freight-money up in court, and involve the whole thing in litigation, and that I didn't see why his rights couldn't be preserved by letting us collect the freight, and hold it subject to all the legal rights of all concerned. He said he thought it could be so done, provided we didn't allow ourselves to prejudice anybody's interest at the expense of another. I told him that it was very desirable that we should all move together, and that if he would lend his aid in having the whole matter amicably settled without litigation, we would pledge ourselves to act with the strictest impartiality to all parties. He expressed himself as entirely satisfied with such a pledge, and so promised, and thereupon went and informed the consignees that they might pay the freight to us.'

The two sons of Kimball, who, as already mentioned, were present at the interview between Kimball and the adjusters, gave an account of it somewhat different from that given by the adjuster. Their statement was as follows:

'Mr. Higgins proposed to pay the bond for Mr. Kimball if Mr. Kimball would give him adjustments of claims against companies. He said that he would not charge any commission for payment of bottomry bond, as he would not be out of that money more than a day or two, as he intended to require payment immediately, and before delivery of cargo, of all charges on cargo, naming the freight and general average thereon; that there were not many owners of cargo, and that they were very earnest to get their goods; several had called, and they would pay any moment the entire freight and estimate of general average on cargo. Mr. Higgins estimated the freight at about $34,000, and the general average on cargo at $20,000, which would more than pay bottomry bond and disbursements on crew inwards, &c. This was all verbally agreed to by both parties. They said that they would apply collections to bond immediately.'Nothing was said at this interview about Mr. Kimball's policies of insurance, but at a subsequent meeting they were handed to Mr. Higgins to be collected, the amount to be applied to payment of the bond, if necessary.

During these operations, one Nickerson was desirous of buying the ship, and finally did buy it. He gave this account of his purchase:

'Before I purchased I had an interview with Higgins & Co., the agents of the former owner, Mr. Kimball, who had placed the affairs of the ship, arising out of her last voyage, in their hands for settlement. In this interview they assured me that if certain claims of the freighters were paid there would be a balance of some $3000 in their hands belonging to the ship. On this assurance I bought the ship, and paid the freighters' claims.'

Higgins in giving an account of this same matter stated that he had put all the accounts before Nickerson, who examined them, and had his own adjusters examine them; and he denied, in effect, that he had made such representations as those alleged.

As things turned out Higgins & Co. could not get all the insurance-money claimed, and asserted by them to be due from the insurers; and there was a deficit which was to fall on some one. On whom it was to fall was the question. The adjusters, Higgins & Co., asserted that it was to fall on the ship under the bottomry bond; they having been subrogated to the rights of the Wards. Nickerson, the purchaser, asserted on the contrary that it was to fall on Higgins & Co., the adjusters, who had undertaken to pay the bond, and to look to freight, insurance, &c., for reimbursement.

The two parties being thus unable to agree, and the vessel being in the port of Philadelphia, Higgins & Co. libelled her there for the deficit. The District Court decreed in their favor, and the Circuit Court on appeal affirmed the decree. Nickerson now brought the case here.

Mr. Henry Flanders, for the appellant:

1. The testimony shows that the adjusters expected confidently that the freight, insurance, &c., would reimburse them, and, therefore, that they agreed to pay and did pay the bottomry bond. The testimony of the two sons of Kimball shows this. Higgins's own testimony shows it no less; for he says that his firm was employed 'to take up the bond.' The bottomry lien being thus once extinguished is not revived-especially is not revived against an innocent purchaser for value-because the adjusters expected to get money which they failed to get. The present case is one of every-day occurrence. The adjusters anticipated uncertain profits, and did not get them. For this, their own error of judgment, they must themselves suffer.

2. In addition to this, we have as a defence the assurance of Higgins to Nickerson, before the purchase of this last, that if certain claims of freighters were paid there would be a balance in favor of the ship; and the fact that on that assurance alone, Nickerson purchased.

The testimony on both parts of the case is, on the appellant's side, positive, specific, and to the point. The other side opposes to it but general denials.

''Mr. S.C.. Perkins, contra:''

1. The purchaser of the vessel alleges, that the lien of bottomry was extinguished by an agreement by the adjusters with the owner of the ship that they would take up the bond and look only to the freight, general average, and insurance for their reimbursement. This he is bound plainly to prove. Has he proved it?

It is evident that the adjusters had proposed to the Wards to pay the bond and take an assignment of it, before they had any interview with Kimball, the owner of the ship. Their occupation being that of adjusters of averages, they were doubtless desirous to be employed in that capacity in reference to this ship. Whatever estimate they may have made of the comparative resources and liabilities of the ship, whatever assurances they may have given as to their ability to marshal and adjust them for the best interests of the owner, these are to be considered as reasons suggested for their employment, rather than as importing a stipulation that they would accept such resources as their sole security for reimbursement. Proposing to pay the amount of the bond and to take an assignment of it, it is improbable that they intended to forego the certain security thus afforded them, and depend upon the problematical sufficiency of the ship's credits to return their large advances. Admitting that they were the agents of the ship-owner, the payment of his debt with their own money would not work a satisfaction of the debt or an extinguishment of the security for it. By the assignment of the bond they took the place of the bottomry creditors, and there is no incompatibility in the rights to which they thus succeeded and their duties and obligations as agents of the debtors. Certainly there is no implication, in equity, at least, that by becoming agents of the debtor they thereby surrendered or lost any of their securities as creditors. Admitting further, that they paid the bond in pursuance of an arrangement with the owner to that effect, still the debt with its incidents subsisted and would only be discharged by payment in money or some other conventional mode. The defence really concedes this much. For it does not allege that the bond itself was satisfied, but only that it is not a lien upon the ship, because the adjusters paid it on the faith and credit of the freights, general average, and insurance exclusively. But such conclusion can only result from an express or implied agreement to that effect. That the adjusters expressly agreed to take up the bond and forego its lien does not appear in all the proofs, nor is it to be inferred from the fact of their agency, or from an agreement to take it up with their money and to adjust the liabilities and marshal the resources of the ship for the best interests of her owner.

2. If the adjusters represented to Nickerson, the purchaser of the vessel, that if certain claims of the freighters were paid, there would be a balance in their hands in favor of the ship, or her owner, and he thereupon paid these claims and purchased the ship, they could not maintain this suit. But this is a fact which it devolves upon the respondent to prove. The proof of it rests upon his unsupported testimony. It is denied by the libellant, Higgins, who is alleged to have made the representation. Thus affirmed by one party, and denied by the other, it cannot be considered as established, and the estoppel, which rests upon it, necessarily fails.

Mr. Justice STRONG delivered the opinion of the court.

title: Belle of the Sea


text: Talk:Belle of the Sea

title: Talk:Belle of the Sea


text:
Belle of the Sea/Opinion of the Court

Very clearly the ship was not discharged from the bottomry lien, unless the bond was actually paid, or unless the libellants agreed to pay it and look to the freights, the general average, and the insurances exclusively for their reimbursement. Of actual payment there is no evidence whatever. On the arrival of the ship at New York, Mr. E. A. Hammond, who had a mortgage upon her, which, with interest, amounted to more than $30,000, took her into his possession, in virtue of authority conferred by the mortgage, and employed the libellants to take up the bottomry bond, to collect the freight, the general average and insurance, and generally to transact the business of the vessel. Subsequently this arrangement was assented to by the owner and the charterer. Accordingly the libellants took up the bond by taking an assignment of it from the Messrs. Ward who held it, and proceeded to adjust the business of the ship, collecting the freights, general average, and insurance, and making the necessary disbursements, but as they were unable to realize from the insurances what was expected, the sums collected proved insufficient to pay the expenses of discharging the ship, the commissions, and the necessary disbursements, together with the bottomry bond. They now claim the right to apply what they have been able to collect, first, to reimburse themselves, the commissions, necessary expenses, and disbursements made by them on account of the ship; and, secondly, to the discharge of the bottomry lien, looking to the ship for that portion of the bond which, by such marshalling of the fund, remains unpaid. And such, we think, are their rights, if they have not been surrendered. By the assignment of the bottomry bond to them, they became bottomry creditors, and even if there had been no such assignment, and had they in fact paid the bond at the instance of the owner and mortgagee, they would have been entitled in equity to the rights of the bottomry creditor. Being thus creditors by bottomry and also by payments on behalf of the ship for expenses, they have a clear right to apply whatever funds of the ship come to their hands, first, to the satisfaction of their unsecured claims, and secondly, to the bond, and to look to the ship for any unpaid balance of the bottomry. If, however, when they undertook their agency they agreed to pay the bond, and thus discharge its lien, looking to the freight, the general average, and the insurance alone for reimbursement, or to the personal liability of the owner, as the appellants insist they did, they cannot now set up a lien on the ship. But we do not think the evidence establishes any such agreement, and its existence is quite improbable. They were adjusters of averages, and they desired to be employed as such to attend to the business of the ship. To secure such employment, they made the most favorable representation of what they were able and willing to do. But they proposed to the Messrs. Ward, who held the bond, to take it up, taking an assignment of it, before they had any interview with Mr. Kimball, the owner. They could then have had no accurate knowledge of the amount of the freight, the general average, and the insurance. They could not have known that the ship's resources would suffice to pay the bottomry, and the other expenses necessary to make the freight and the general average available. And they had then no control over the insurances. It is, therefore, quite unlikely that they undertook to pay the bond and discharge the lien. Their arrangement was with the mortgagee, and there is no evidence that they agreed with him to do anything more than take the bond from the holder and act as general agents of the ship in adjusting its affairs. The proofs do not establish that in that arrangement they undertook to satisfy the bottomry and extinguish its lien without regard to the amount of freight, general average, and insurances which could be collected, and without regard to the necessary disbursements and commissions. Such is not the testimony of Mr. Higgins, nor has the mortgagee so testified, and the owner was not present at the arrangement.

The appellants, however, rely upon the statement of two sons of the owner, who do not speak at all of the arrangement with the mortgagee. They speak only of a subsequent interview of Mr. Higgins with the owner, from whom the possession had been taken, and who had then no control over the settlement of the ship's affairs. Their statement is that Higgins proposed to pay the bottomry bond for the owner if he would give his firm adjustments of claims against insurance companies, and expressed his convictions of what his firm could do, making some promises respecting the rate of commissions, and promising to apply collections to the bond immediately. The sons state further that this was verbally agreed to, but the policies were not delivered in pursuance of any such agreement, nor was there any agreement to deliver them, and what is very remarkable, the sons state that nothing was said at that interview about the policies. They were subsequently handed to Mr. Higgins to be collected, and the amount to be applied to the payment of the bottomry bond, if necessary. These witnesses are contradicted in some particulars by Mr. Higgins, but assuming that their statement is correct, it falls far short of proof that Higgins agreed to discharge the ship from the bottomry line, or agreed to pay the bond and look only to the freight, insurances, and general average. And, even if the firm could be considered as agents of the owner, the payment of his debt, or the debt of the ship, could not work a satisfaction of the debt, or extinguish its lien. It would only change the creditor. We are of opinion, then, that no arrangement witht he owner has been proved by which the libellants have been disabled from enforcing the bottomry lien.

Another defence has been set up. The appellants contend that the libellants are estopped from resorting to the ship for any balance of the bond unpaid, by their representations. They insist that they purchased the ship relying upon a representation of Mr. Higgins, that if they purchased and would settle certain claims of the charterers, there would be at least three thousand dollars beyond what was needed to pay the bottomry bond, and other claims of his firm. There is, however, no sufficient proof of such representations. They are denied by Mr. Higgins, and the only person who affirms they were made is Mr. Nickerson, the purchaser himself. And even the testimony of Nickerson appears to assert only that Higgins expressed an opinion respecting what would be the result, rather than a positive assertion of the fact. This is quite an insufficient basis for an estoppel, and manifestly the opinion was not relied upon. Nickerson had examined for himself some of the accounts at least.

This disposes of the case. Admitting the libellants have no lien in admiralty for their fees and commissions, or even for their disbursements on account of the ship, they had, as we have said, a right to apply the funds they had in hand, first to the satisfaction of the debt due them for such fees, commissions, and disbursements, applying only the remainder to the bond. For the balance unpaid they have the security of the bottomry lien.

DECREE AFFIRMED, with interest at the rate allowed in Pennsylvania, and with costs.

title: Belle of the Sea/Opinion of the Court


text: Talk:Belle of the Sea/Opinion of the Court


text:
The Montello (87 U.S. 430)

APPEAL from the Circuit Court for the Eastern District of Wisconsin.

In the southern part of the State of Wisconsin, about a mile and a half east of Portage City, and at a point about equidistant from the eastern and western boundaries of the State, rises the Fox River. The stream flows in a northeasterly direction, through Lake Winnebago into Green Bay, thence into Lake Michigan, so connecting through that lake and lakes Huron, Erie, and Ontario with the river St. Lawrence, and other great waters having their hydrographic basin on the Atlantic coast, and discharging themselves into the Atlantic Ocean.

In a bend before Portage City sweeps the Wisconsin River, which, rising in the regions far northwest of the place just named, before arriving at Portage City runs eastwardly, and then turning to the west and flowing a certain distance falls into the Mississippi River. In this way a natural watercourse has been always open from the head-waters of the Mississippi through the Wisconsin River to the spot now known as Portage City.

Of course when a 'portage,' or carriage by land, was made of merchandise from the Wisconsin River at Portage City to the sources of Fox River, less than two miles east, the merchandise coming from the head-waters of the Mississippi was on waters whose course was towards the Atlantic Ocean.

In its natural state, there were, however, in parts of the Fox River rapids and falls. At Grand Chute there was a rock making a fall two feet perpendicular; and below certain rapids known as the De Pere, the navigation was especially difficult. There were many other similar though less difficult places. All these embarrassed the navigation of early days, but they did not destroy nor even much arrest it. The stream was always used for purposes of trade; including especially the great fur trade, a trade carried on before our Revolution, and when French and British were pursuing their adventurous commerce far into the savage regions of the Northwest. Smith, the historian of Wisconsin, states that even so far back as 1718, one of 'the great avenues from the St. Lawrence to the Mississippi was by way of Fox and Wisconsin Rivers.' In 1763, Marquette and Joliet, French explorers of the source of the Mississippi, followed the line of the two streams mentioned. The stream was then navigated by long, narrow boats, called Durham boats-vessels from seventy to one hundred feet long and twelve broad, drawing, when loaded, from two to two and a half feet of water-which men would push with poles or propel by oars, or have dragged by horses and mules; sometimes, in very shallow water, wading alongside and pushing the boats onward themselves. At places where progress on the stream was impracticable the vessel would be unloaded and a 'portage' made, till the navigator had got beyond the difficult place, and then a reshipment would be made of the merchandise into some other boat beyond, or into the same boat, which unloaded, and drawing less water than before, could be got across the place that in a loaded state had stopped it. Arriving at the very source of the Fox River, a 'portage' of less than two miles would be made, and the merchandise was on the Wisconsin, and thence it floated to the Mississippi. In May, 1838, a regular line of Durham boats was advertised to run from Green Bay, near Lake Michigan, to the portage at the head of the Fox River.

By the Ordinance of 1787, for the government of the Northwest Territory, it was enacted that—

'The navigable waters leading into the Mississippi and St. Lawrence, and the carrying places between the same, shall be common highways, and forever free as well to the inhabitants of the said Territory as to the citizens of the United States, and those of any other States that may be admitted into the confederacy, without any tax, impost, or duty therefor.'

This clause was substantially enacted in the constitution of Wisconsin, which provides that—

'The river Mississippi and the navigable waters leading into the Mississippi and St. Lawrence, and the carrying places between the same, shall be common highways and forever free, as well to the inhabitants of the State as to the citizens of the United States, without any tax, impost, or duty therefor.'

By the act of Congress of 1846, passed on the admission of Wisconsin as a State into the Union, a quantity of land was granted to the State—

'For the purpose of improving the navigation of the Fox and Wisconsin Rivers, in the Territory of Wisconsin, and of constructing the canal to unite the said rivers at or near the portage.'

And it was provided that the—

'Said rivers, when improved, and the said canal, when finished, shall be and forever remain a public highway for the use of the government of the United States, free from any toll or other charge whatever, for the transportation of the mails, or for any property of the United States, or persons in their service passing upon or along the same.'

The State of Wisconsin accepted the grant, and, pursuant to the authority and power vested in the State, a company was incorporated by an act approved July 6th, 1853, for the improvement of the Fox and Wisconsin Rivers. That act vested in the corporation all the rights and privileges granted to the State by the act of Congress. And the improvement company in carrying out the object of its creation, built dams, locks, and canals in Fox River, from Portage City to below De Pere Rapids. The works of this company were on a grand scale, and by them Fox River was changed from its natural condition to an improved thoroughfare, for the use of which all boats were required to pay toll. It became the property of and was exclusively managed by a corporate body, with power to demand and receive tolls from all crafts passing through the locks, not excepting boats enrolled and licensed for coasting trade.

In consequence of the acts of Congress, and of the State, and of the increase of trade from the Northwest, over the Wisconsin River, across the portage, and upon the Fox River and the lakes, the Fox River was cleared of the obstructions caused by its rapids, or falls, and the difficult or impracticable passes were removed by locks, canals, dams, and other artificial navigation, so that there was now, and had been for several years, uninterrupted water communication for steam vessels of considerable capacity from the Mississippi to Lake Michigan, and thence to the St. Lawrence, through the Wisconsin and Fox Rivers; and steamboats had passed, and were constantly passing, over these rivers with passengers and freight destined to points and places outside of the State of Wisconsin.

In this state of things the government libelled the steamer Montello in admiralty, for non-compliance with certain acts of Congress making enrolment and license, and certain provisions as to steam valves necessary for all vessels of the tonnage of which the Montello was, navigating the navigable waters of the United States. The owners of the steamer denied that the Fox River was 'navigable water' of the United States, within the act of Congress; and whether it was so was the question in the case.

The case had been here before, but the libel was defective and the evidence insufficient to determine the question, and it was remanded for further proceedings, to enable the parties by new allegations and evidence to present the exact character of Fox River as a navigable stream. This was now done, and there was, therefore, nothing now in the way of a correct solution of the inquiry.

The court below-resting its decision on the ground that before the navigation of the river was artificially improved there had been numerous obstructions to a continuous navigation, especially below the De Pere Rapids-decided that the river was not a part of the public navigable waters of the United States, within the doctrine laid down in The Daniel Ball, and The Montello, and dismissed the libel. The United States appealed, and now assigned as error—

1. That by the Ordinance of 1787 and subsequent acts of Congress, as well as by the constitution of Wisconsin, the Fox River was declared and made part of the public navigable waters of the United States, and consequently fell within the doctrine in respect of that class of waters laid down by this court; and

2. That the Fox River was a part of the navigable waters of the United States, notwithstanding the fact that its navigation was defective by reason of the falls and rapids, which had been remedied of late times by artificial navigation.

Mr. G. H. Williams, Attorney-General, and Mr. C. H. Hill, Assistant Attorney-General, for the plaintiff in error:

1. Whether a stream constitutes part of the navigable waters of the United States, does not depend upon the question whether artificial improvements are required in order to render it navigable. Some of the greatest rivers on the continent, like the St. Lawrence and the Ottawa, are so interrupted by rapids as to require artificial means to enable them to be navigated continuously, and the great lakes themselves, by the employment of artificial means only, form an uninterrupted line of navigation with the ocean. Where the natural navigation is the principal one, and the artificial merely dependent and ancillary thereto, and the natural stream is in fact navigable within the ordinary acceptation of the word, then the river forms a part of the navigable waters of the United States, if, by means of the artificial navigation, it is practically made so, and interstate commerce is actually carried on. All the State courts, and they are numerous, which have had occasion to discuss the question of what is a navigable stream have given a very broad and liberal construction to these words. In Wisconsin this very river is treated as a navigable river.

2. If this were not so, the Ordinance of 1787 and the subsequent act of Congress, and the constitution of Wisconsin, make the Fox River 'navigable water of the United States.'

Mr. J. H. Hauser, contra:

1. What is meant by 'navigable waters of the United States?'

The first definition of them given by this court was given in The Daniel Ball, where the court says:

'Those rivers must be regarded as public navigable rivers in law which are navigable in fact when they are used, or are susceptible of being used, in their ORDINARY CONDITION, as highways for commerce over which trade and travel are or may be conducted in the customary modes of travel on water.'

And in the present case, on the former appeal, speaking of the Fox River, it says:

'It can only be deemed a navigable water of the United States when it forms by itself, or by its connections with other waters, a continued highway over which commerce is or may be carried on with other States or foreign countries, in the customary modes in which such commerce is conducted by water.'

The State courts have discussed the question of navigable waters only as a fact in their own State, and not as relating to commerce with other States or foreign countries. Their decisions do not apply.

2. Is the Fox River a navigable water of the United States?

The Fox was, in parts, not a navigable stream prior to 1846. It had numerous rapids and abrupt falls. At Grand Chute there was a solid rock, making a fall of two and a half feet perpendicular. No commerce could be carried up the river in the ordinary and customary manner, and under no circumstances could it be pretended to be a public navigable stream prior to the act of Congress of August 6th, 1846. Exclusive control was granted by that act to the State of Wisconsin, only reserving that it should be a public highway for the use of the United States. The State of Wisconsin, by an act of its legislature, approved July 6th, 1853, ceded all the rights and privileges which the State had obtained from the United States, to this company.

From 1840 to 1853 the control of the Fox River belonged to the State of Wisconsin, and since that it has belonged to the Fox and Wisconsin Rivers Improvement Company, and was not a public navigable water of the United States. And after this grant passed into the hands of the improvement company it became a canal or slack-water navigation, and comes within the case of Veazie v. Moor, which decides that the Penobscot River is not a public navigable river of the United States, for the reason that it has no navigable connection with the seas, unless made so by artificial or private means.

If the Fox River is a navigable stream of the United States, it would be impossible to conceive of any body of water that is not or might not become such navigable water.

3. Did Congress by the Ordinance of 1787 intend to include Fox River?

Certainly not on the ground of its being navigable; for prior to the building of the canal and slack-water navigation the case shows that only Durham boats could at certain stages of the water pass up and down the river, and then only by unloading at certain places and lifting the boats over the rapids. This court says in The Daniel Ball, that the water must be navigable in its 'ordinary condition,' and in this case on the former appeal, 'It must be water over which commerce can be carried on in the customary modes in which such commerce is conducted by water.'In its ordinary condition it was impossible to get steamboats up or down the river. Even Durham boats could pass up or down only by being unloaded and lifted over the falls. This was not the customary modes by which commerce is conducted by water. The true definition of 'navigable water' of the United States must be water which, in its ordinary condition, by itself or by its connections with other waters, forms with them a continual highway over which commerce is or may be carried on with other States or foreign countries in vessels which Congress has deemed of suitable size to be recognized in its commercial and revenue laws.

The literal construction of the Ordinance of 1787 would include all the navigable waters in the State, for all the lakes and rivers of the State empty either in the Mississippi or St. Lawrence. The Indians in their commerce carried their boats from lake to lake.

4. Does the subsequent legislation of Congress show that the waters of the Fox River were included in the Ordinance of 1787?

If the Ordinance of 1787 applied to Fox River, then all subsequent legislation of Congress and of the State of Wisconsin in regard to said river is in violation of said ordinance.

Again, 'common highway,' as used in the Ordinance of 1787, is used in a broader sense than admiralty jurisdiction, for while it includes navigable waters it also includes carrying-places between the same, and admiralty jurisdiction has not yet extended to land as well as navigable water.

While the United States did grant land to aid in improvement of the river, yet the improvement was largely made by private energy and sacrifice, and the government reserved no rights except as above stated.

If private enterprise makes waters navigable which were not before navigable, and capable of carrying vessels which are of sufficient capacity to come within the jurisdiction of the Federal courts, which before were not navigable by any of the ordinary modes of commerce, will the United States then come in and take jurisdiction and control, especially where this improvement is wholly within a State, and subject to State law and State taxation? Such a policy would not be for the best interest of the General and State governments, and would be such a centralization of power in the Federal government, and such an encroachment on the powers reserved to the States by the Constitution, that this court will be slow to make such a radical change and to extend the jurisdiction of the Federal courts, that by the same reasoning the General government would take control of every trade, manufacture, and enterprise throughout the country.

Mr. Justice DAVIS delivered the opinion of the court.

title: The Montello (87 U.S. 430)


text: Talk:The Montello (87 U.S. 430)

title: Talk:The Montello (87 U.S. 430)


text:
The Montello (87 U.S. 430)/Opinion of the Court

This court held in the case of The Daniel Ball, that those rivers must be regarded as public navigable rivers in law which are navigable in fact. And they are navigable in fact when they are used, or are susceptible of being used, in their ordinary condition, as highways for commerce, over which trade and travel are or may be conducted in the customary modes of trade and travel on water. And a river is a navigable water of the United States when it forms by itself, or by its connection with other waters, a continued highway over which commerce is, or may be, carried with other States or foreign countries in the customary modes in which such commerce is conducted by water. Apply these tests to the case in hand, and we think the question must be answered in the affirmative.

The Fox River has its source near Portage City, Wisconsin, and flows, in a northeasterly direction, through Lake Winnebago into Green Bay, and thence into Lake Michigan, and by means of a short canal of a mile and a half it is connected at Portage City with the Wisconsin River, which empties into the Mississippi. From its source to Oshkosh the river is frequently spoken of as the 'Upper Fox.' From Lake Winnebago to Green Bay it is called the 'Lower Fox.' There are several rapids and falls in the river, but the obstructions caused by them have been removed by artificial navigation, so that there is now, and has been for several years, uninterrupted water communication for steam vessels of considerable capacity from the Mississippi to Lake Michigan, and thence to the St. Lawrence, through the Wisconsin and Fox Rivers; and steamboats have passed, and are constantly passing, over these rivers with passengers and freight destined to points and places outside of the State of Wisconsin.

It is said, however, that although the Fox River may now be considered a highway for commerce, over which trade and travel are, or may be, conducted in the ordinary modes of trade and travel on water, it was not so in its natural state, and, therefore, is not a navigable water of the United States within the purview of the decisions referred to.

It is true, without the improvements by locks, canals, and dams, Fox River, through its entire length, could not be navigated by steamboats or sail vessels, but it is equally true that it formed, in connection with the Wisconsin, one of the earliest and most important channels of communication between the Upper Mississippi and the lakes. It was this route which Marquette and Joliet took in 1673 on their voyage to discover the Mississippi; and the immense fur trade of the Northwest was carried over it for more than a century. Smith, in his History of Wisconsin, says: 'At this time (1718) the three great avenues from the St. Lawrence to the Mississippi were, one by the way of the Fox and Wisconsin Rivers, one by way of Chicago, and one by the way of the Miami of the Lakes, when, after crossing the portage of three leagues over the summit level, a shallow stream led into the Wabash and Ohio.' It is, therefore, apparent that it was one of the highways referred to in the Ordinance of 1787, and, indeed, among the most favored on account of the short portage between the two rivers. In more modern times, and since the settlement of the country, and before the improvements resulting in an unbroken navigation were undertaken, a large interstate commerce has been successfully carried on through this channel. This was done by means of Durham boats, which were vessels from seventy to one hundred feet in length, with twelve feet beam, and drew when loaded two to two and one-half feet of water. These boats, propelled by animal power, were able to navigate the entire length of Fox River, with the aid of a few portages, and would readily carry a very considerable tonnage.

In process of time, as Wisconsin advanced in wealth and population, and had a variety of products to exchange for the commodities of sister States and foreign nations, Durham boats were found to be inadequate to the wants of the country, and Congress was appealed to for aid to improve the navigation of the river, so that steam power could be used. This aid was granted, and since the river was improved commerce is carried over it in one of the usual ways in which commerce is conducted on the water at the present day. But commerce is conducted on the water, even at the present day, through other instrumentalities than boats propelled by steam or wind. And, independently of the Ordinance of 1787, declaring the 'navigable waters' leading into the Mississippi and St. Lawrence to be 'common highways,' the true test of the navigability of a stream does not depend on the mode by which commerce is, or may be, conducted, nor the difficulties attending navigation. If this were so, the public would be deprived of the use of many of the large rivers of the country over which rafts of lumber of great value are constantly taken to market.

It would be a narrow rule to hold that in this country, unless a river was capable of being navigated by steam or sail vessels, it could not be treated as a public highway. The capability of use by the public for purposes of transportation and commerce affords the true criterion of the navigability of a river, rather than the extent and manner of that use. If it be capable in its natural state of being used for purposes of commerce, no matter in what mode the commerce may be conducted, it is navigable in fact, and becomes in law a public river or highway. Vessels of any kind that can float upon the water, whether propelled by animal power, by the wind, or by the agency of steam, are, or may become, the mode by which a vast commerce can be conducted, and it would be a mischievous rule that would exclude either in determining the navigability of a river. It is not, however, as Chief Justice Shaw said, 'every small creek in which a fishing skiff or gunning canoe can be made to float at high water which is deemed navigable, but, in order to give it the character of a navigable stream, it must be generally and commonly useful to some purpose of trade or agriculture.'

The learned judge of the court below rested his decision against the navigability of the Fox River below the De Pere Rapids chiefly on the ground that there were, before the river was improved, obstructions to an unbroken navigation. This is true, and these obstructions rendered the navigation difficult, and prevented the adoption of the modern agencies by which commerce is conducted. But with these difficulties in the way commerce was successfully carried on, for it is in proof that the products of other States and countries were taken up the river in its natural state from Green Bay to Fort Winnebago, and return cargoes of lead and furs obtained. And the customary mode by which this was done was Durham boats. As early as May, 1838, a regular line of these boats was advertised to run from Green Bay to the Wisconsin portage. But there were difficulties in the way of rapid navigation even with Durham boats, and these difficulties are recognized in the Ordinance of 1787, for not only were the 'navigable waters' declared free, but also the 'carrying-places' between them, that is, places where boats must be partially or wholly unloaded and their cargoes carried on land to a greater or less distance. Apart from this, however, the rule laid down by the district judge as a test of navigability cannot be adopted, for it would exclude many of the great rivers of the country which were so interrupted by rapids as to require artificial means to enable them to be navigated without break. Indeed, there are but few of our fresh-water rivers which did not originally present serious obstructions to an uninterrupted navigation. In some cases, like the Fox River, they may be so great while they last as to prevent the use of the best instrumentalities for carrying on commerce, but the vital and essential point is whether the natural navigation of the river is such that it affords a channel for useful commerce. If this be so the river is navigable in fact, although its navigation may be encompassed with difficulties by reason of natural barriers, such as rapids and sand-bars.

The views that we have presented on this subject receive support from the courts of this country that have had occasion to discuss the question of what is a navigable stream.

From what has been said, it follows that Fox River is within the rule prescribed by this court in order to determine whether a river is a navigable water of the United States. It has always been navigable in fact, and not only capable of use, but actually used as a highway for commerce, in the only mode in which commerce could be conducted, before the navigation of the river was improved. Since this was done, the valuable trade prosecuted on the river, by the agency of steam, has become of national importance. And emptying, as it does, into Green Bay, it forms a continued highway for interstate commerce. The products of other States and foreign countries, which arrived at Green Bay for points in the interior, were formerly sent forward in Durham boats, and since the completion of the improvements on the river these products are reshipped in a small class of steamboats. It would be strange, indeed, if this difference in the modes of conducting commerce, both of which, at the times they were employed, were adapted to the necessities of navigation, should operate a change upon the national character of the stream.

Before the Union was formed, and while the French were in possession of the territory, the Wisconsin and Fox Rivers constituted about the only route of trade and travel between the Upper Mississippi and the great lakes. And since the territory belonged to us this route has been regarded of national importance. To preserve the national character of all the rivers leading into the Mississippi and St. Lawrence, and to prevent a monopoly of their waters, was the purpose of the Ordinance of 1787, declaring them to be free to the public; and so important was the provision of this ordinance deemed by Congress that it was imposed on Wisconsin as a condition of admission into the Union.

Congress, also, when the State was admitted, made to it a grant of lands, in order that the Fox and Wisconsin might be united by a canal, their navigation improved, and the rivers made in fact, what nature meant they should be, a great avenue for trade between the Mississippi and Lake Michigan. The grant was accepted, the navigation improved, and the canal constructed. These objects were, however, accomplished by a private corporation chartered for the purpose, which was allowed to charge tolls as a source of profit. The exaction of these tolls created dissatisfaction outside of the State, and Congress, in 1870, in response to memorials on the subject of the importance of these rivers as a channel of commerce between the States, passed an act authorizing the General government to purchase the property, and after it was reimbursed for advances, to reduce the tolls to the lowest point which should be ascertained to be sufficient to operate the works and keep them in repair. Although this legislation was not needed to establish the navigability of these rivers, it shows the estimate put by Congress upon them as a medium of communication between the lakes and the Upper Mississippi.

It results from these views that steamboats navigating the waters of the Fox River are subject to governmental regulation.

DECREE REVERSED, and cause remanded for further proceedings,

IN CONFORMITY WITH THIS OPINION.


text: Talk:The Montello (87 U.S. 430)/Opinion of the Court


text:
Home Insurance Company v. Morse

ERROR to the Supreme Court of Wisconsin; the case being thus:

A statute of Wisconsin, passed in 1870, enacts as follows:

'It shall not be lawful for any fire insurance company, association, or partnership, incorporated by or organized under the laws of any other State of the United States, or any foreign government, for any of the purposes specified in this act, directly or indirectly to take risks or transact any business of insurance in this State, unless possessed of the amount of actual capital required of similar companies formed under the provisions of this act; and any such company desiring to transact any such business as aforesaid by any agent or agents, in this State, shall first appoint an attorney in this State on whom process of law can be served, containing an agreement that such company will not remove the suit for trial into the United States Circuit Court or Federal courts, and file in the office of the secretary of state a written instrument, duly signed and sealed, certifying such appointment, which shall continue until another attorney be substituted.'

This statute being in force, the Home Insurance Company of New York, a corporation organized under the laws of the State of New York, and having its office and principal place of business in the city of New York, being desirous of doing business in the State of Wisconsin, established an agency there, and in compliance with the provisions of the above-quoted statute, filed in the office of the secretary of state of Wisconsin an appointment of H. S. Durand as their agent in it, on whom process might be served. The power of attorney thus filed contained this clause:

'And said company agrees that suits commenced in the State courts of Wisconsin shall not be removed by the acts of said company into the United States Circuit or Federal courts.'

Being thus established in the State, the company issued a policy of insurance to one Morse, and a loss having occurred, as was alleged, under it, Morse sued the company in the County Court of Winnebago, one of the State courts of Wisconsin, to recover the amount alleged to be due on the policy. The company entered its appearance in the suit and filed its petition to remove the case, under the twelfth section of the Judiciary Act of 1789, into the Circuit Court for the district. The section under which the company filed its petition for removal is in these words:

'If a suit be commenced in any State court. . . by a citizen of the State in which the suit is brought against a citizen of another State,. . . and the defendant shall at the time of entering his appearance in such State court, file a petition for the removal of the cause for trial into the next Circuit Court to be held in the district where the suit is pending. . . and offer good and sufficient surety for his entering in such court on the first day of its session copies of said process against him, and also for his there appearing,. . . it shall then be the duty of the State court to accept the surety and proceed no further in the cause.'

The petition was in proper form and was accompanied by the required bond and bail.

The State court of Wisconsin in which the suit was brought held that the statute above quoted, of the State, and the agreement under it justified a denial of the petition to remove the case into the Circuit Court of the United States; and a trial having been had, gave judgment for the plaintiff on a verdict found in his favor. A similar view as to the effect of the statute of the State and the agreement under it, was taken by the Supreme Court of Wisconsin, and the judgment was there affirmed. Thereupon the insurance company brought the case here; and whether the statute and the agreement were sufficient to justify the refusal to remove the case was the point now presented for consideration.

The Constitution of the United States ordains as follows:

'This Constitution and the laws of the United States which shall be made in pursuance thereof. . . shall be the supreme law of the land; and the judges in every State shall be bound thereby; anything in the constitution or laws of any State to the contrary notwithstanding.

'The judicial power of the United States. . . shall extend to. . . controversies between citizens of different States.'

The case was twice argued.

Mr. J. W. Cary, in support of the judgment below:

That corporations created by the laws of one State have not the absolute right to recognition, and to do business in another State, is not a subject for argument; the question has been adjudicated by this court.

In the recent case of Paul v. Virginia, this court, speaking through Field, J., says:

'Having no absolute right of recognition in other States, but depending for such recognition and the enforcement of its contracts upon their assent, it follows, as a matter of course, that such assent may be granted upon such terms and conditions as those States may think proper to impose. They may exclude the foreign corporation entirely, they may restrict its business to particular localities, or they may exact such security for the performance of its contracts with their citizens as in their judgment will best promote the public interest.'

This case did but recognize what Taney, C. J., had expressed in behalf of the court in Bank of Augusta v. Earle, and what Curtis, J., said equally for it in The Lafayette Insurance Company v. French.

title: Home Insurance Company v. Morse


text: Talk:Home Insurance Company v. Morse

title: Talk:Home Insurance Company v. Morse


text:
Home Insurance Company v. Morse/Opinion of the Court

If, therefore, a State corporation has no rights in States other than in the one in which created, except 'by the permission, express or implied, of those States,' and if a State has an absolute right to prohibit a foreign corporation from doing business within its limits, it follows of necessity that when a State grants permission to do business, to a foreign corporation, it has a right to impose such terms and conditions as it may see fit. The only point, therefore, upon the question of removal is whether the contract or stipulation required by the statute of Wisconsin of 1870 inures to the State alone, or inures to both the State and to each policyholder.

The provision is for the benefit of the assured, and inserted for a beneficent purpose, to wit: to give to the assured a certain remedy without delay. It meant to prevent him from being compelled to go a great distance from his home to assert his claims, and that if he wishes a writ of error or an appeal to what is decided against him he shall not be subjected to the expense of coming to this high court in Washington; a court often at a very great distance from the suitor, and where of necessity he is often subjected to great delay and to great cost. These foreign companies say to the State, 'We wish to do business in your State.' The State replies: 'If we permit you to do business here and any of our people suffer a loss, you can, under existing laws, subject them, if you refuse to pay, to the great inconvenience of going a long distance from their homes to enforce their rights. However, we will give our consent to your doing business here provided you will agree to waive your rights under a certain act of Congress, which, in controversies between citizens of different States gives to the defendant a right to be heard in the Federal courts, and will consent that all litigation shall be in our courts, the courts of our State.' The companies answer, 'We consent.' And with such understanding they are permitted to do business, and now they assert that they are not bound by the agreement!

It is well settled that a party cannot be allowed to take benefits and at the same time repudiate obligations. The legislature was granting a favor. It could impose its own conditions, it matters not how much those conditions might conflict with the legal or constitutional rights of these companies.

This contract of insurance in the present case was made under the law in question. A contract made under a law is presumed to be made in reference to it; for the law of every State where a contract is made enters into and makes part of the contract. Under the provisions of this law the status of the assured and insurer is the same as if the company had put an express condition in the policy that the insurer should not remove an action upon it from the State to the Federal courts.

The only question, as we have before stated, is whether the contract is with both assured and the State, or with the State alone. That is a question which it belongs to the Supreme Court of Wisconsin to decide, and not to the courts of the United States.

Messrs. W. M. Evarts and H. M. Finch, contra.

Mr. Justice HUNT delivered the opinion of the court.

The refusal of the State court of Wisconsin to allow the removal of the case into the United States Circuit Court of Wisconsin, and its justification under the agreement of the company and the statute of Wisconsin form the subject of consideration in the present suit.

The State courts of Wisconsin held that this statute and their agreement under it justified a denial of the petition to remove the case into the United States court. The insurance company deny this proposition, and this is the point presented for consideration.

Is the agreement thus made by the insurance company one that, without reference to the statute, would bind the party making it?

Should a citizen of the State of New York enter into an agreement with the State of Wisconsin, that in no event would he resort to the courts of that State or to the Federal tribunals within it to protect his rights of property, it could not be successfully contended that such an agreement would be valid.

Should a citizen of New York enter into an agreement with the State of Wisconsin, upon whatever consideration, that he would in no case, when called into the courts of that State or the Federal tribunals within it, demand a jury to determine any rights of property that might be called in question, but that such rights should in all such cases be submitted to arbitration or to the decision of a single judge, the authorities are clear that he would not thereby be debarred from resorting to the ordinary legal tribunals of the State. There is no sound principle upon which such agreements can be specifically enforced.

We see no difference in principle between the cases supposed and the case before us. Every citizen is entitled to resort to all the courts of the country, and to invoke the protection which all the laws or all those courts may afford him. A man may not barter away his life or his freedom, or his substantial rights. In a criminal case, he cannot, as was held in Cancemi's Case, be tried in any other manner than by a jury of twelve men, although he consent in open court to be tried by a jury of eleven men. In a civil case he may submit his particular suit by his own consent to an arbitration, or to the decision of a single judge. So he may omit to exercise his right to remove his suit to a Federal tribunal, as often as he thinks fit, in each recurring case. In these aspects any citizen may no doubt waive the rights to which he may be entitled. He cannot, however, bind himself in advance by an agreement, which may be specifically enforced, thus to forfeit his rights at all times and on all occasions, whenever the case may be presented.

That the agreement of the insurance company is invalid upon the principles mentioned, numerous cases may be cited to prove. They show that agreements in advance to oust the courts of the jurisdiction conferred by law are illegal and void.

In Scott v. Avery (one of the cases), the Lord Chancellor says: 'There is no doubt of the general principle that parties cannot by contract oust the ordinary courts of their jurisdiction. That has been decided in many cases. Perhaps the first case I need refer to was a case decided about a century ago. That case was an action on a policy of insurance in which there was a clause that in case of any loss or dispute it should be referred to arbitration. It was decided there that an action would lie, although there had been no reference to arbitration. Then, after the lapse of half a century, occurred a case before Lord Kenyon, and from the language that fell from that learned judge, many other cases had probably been decided which are not reported. But in the time of Lord Kenyon occurred the case which is considered the leading case on the subject, of Thompson v. Charnock. That was an action upon a charter-party, in which it was stipulated that if any difference should arise it should be referred to arbitration. That clause was pleaded in bar to the action brought upon breach of the contract, with an averment that the defendant was, and always had been, ready to refer the same to arbitration. This was held to be a bad plea, upon the ground that a right of action had accrued, and that the fact that the parties had agreed that the matter should be settled by arbitration did not oust the jurisdiction of the courts.' Upon this doctrine all the judges who delivered opinions in the House of Lords were agreed.

And the principle, Mr. Justice Story, in his Commentaries on Equity Jurisprudence, says is applicable in courts of equity as well as in courts of law. 'And where the stipulation, though not against the policy of the law, yet is an effort to divest the ordinary jurisdiction of the common tribunals of justice, such as an agreement in case of dispute to refer the same to arbitration, a court of equity will not any more than a court of law interfere to enforce the agreement, but it will leave the parties to their own good pleasure in regard to such agreements. The regular administration of justice might be greatly impeded or interfered with by such stipulations if they were specifically enforced.'

In Stephenson v. ''P. F. and M. C. Ins. Co.'', the court say: 'While parties may impose as condition precedent to applications to the courts that they shall first have settled the amount to be recovered by an agreed mode, they cannot entirely close the access to the courts of law. The law and not the contract prescribes the remedy, and parties have no more right to enter into stipulations against a resort to the courts for their remedy in a given case, than they have to provide a remedy prohibited by law; such stipulations are repugnant to the rest of the contract, and assume to divest courts of their established jurisdictions; as conditions precedent to an appeal to the courts, they are void.' Many cases are cited in support of the rule thus laid down. Upon its own merits, this agreement cannot be sustained.

Does the agreement in question gain validity from the statute of Wisconsin, which has been quoted? Is the statute of the State of Wisconsin, which enacts that a corporation organized in another State shall not transact business within its limits, unless it stipulates in advance that it will not remove into the Federal courts any suit that any be commenced against it by a citizen of Wisconsin, a valid statute in respect to such requisition, under the Constitution of the United States?

The Constitution of the United States declares that the judicial power of the United States shall extend to all cases in law and equity arising under that Constitution, the laws of the United States, and to the treaties made or which shall be made under their authority,. . . to controversies between a State and citizens of another State, and between citizens of different States.

The jurisdiction of the Federal courts, under this clause of the Constitution, depends upon and is regulated by the laws of the United States. State legislation cannot confer jurisdiction upon the Federal courts, nor can it limit or restrict the authority given by Congress in pursuance of the Constitution. This has been held many times.

It has also been held many times, that a corporation is a citizen of the State by which it is created, and in which its principal place of business is situated, so far as that it can sue and be sued in the Federal courts. This court has repeatedly held that a corporation was a citizen of the State creating it, within the clause of the Constitution extending the jurisdiction of the Federal courts to citizens of different States.

The twelfth section of the Judiciary Act of 1789 provides that if a suit be commenced in any State court by a citizen of the State in which the suit is commenced, against a citizen of another State, where the matter in dispute exceeds $500, and the defendant at the time of entering his appearance shall file a petition for the removal of the cause for trial into the next Circuit Court of the United States, and shall offer good bail for his proceedings therein, 'it shall be the duty of the State court to accept such security and proceed no farther in the cause.'

This applies to all the citizens of another State, whether corporations, partnerships, or individuals. It confers an unqualified and unrestrained right to have the case transferred to the Federal courts upon giving the security required. In the case recently decided in this court, of Insurance Company v. Dunn, it was held that no power of action thereafter remained to the State court, and that every question, necessarily including that of its own jurisdiction, must be decided in the Federal court.

The statute of Wisconsin, however, provides as to a certain class of citizens of other States, to wit, foreign corporations, that they shall not exercise that right, and prohibits them from transacting their business within that State, unless they first enter into an agreement in writing that they will not claim or exercise that right.

The Home Insurance Company is a citizen of New York, within this provision of the Constitution. As such citizen of another State, it sought to exercise this right to remove to a Federal tribunal a suit commenced against itself in the State court of Wisconsin, where the amount involved exceeded the sum of $500. This right was denied to it by the State court on the ground that it had made the agreement referred to, and that the statute of the State authorized and required the making of the agreement.

We are not able to distinguish this agreement and this requisition, in principle, from a similar one in the case of an individual citizen of New York. A corporation has the same right to the protection of the laws as a natural citizen, and the same right to appeal to all the courts of the country. The rights of an individual are not superior in this respect to that of a corporation.

The State of Wisconsin can regulate its own corporations and the affairs of its own citizens, in subordination, however, to the Constitution of the United States. The requirement of an agreement like this from their own corporations would be brutum fulmen, because they possess no such right under the Constitution of the United States. A foreign citizen, whether natural or corporate, in this respect possesses a right not pertaining to one of her own citizens. There must necessarily be a difference between the status of the two in this respect.

We do not consider the question whether the State of Wisconsin can entirely exclude such corporations from its limits, nor what reasonable terms they may impose as a condition of their transacting business within the State. These questions have been before the court in other cases, but they do not arise here. In Paul v. Virginia, Mr. Justice Field used language, in speaking of corporations, which has been supposed to sustain the statute in question. 'Having (he says), no absolute right of recognition in other States, but depending for such recognition and the enforcement of its contracts upon their assent, it follows, as a matter of course, that such assent may be granted upon such terms and conditions as those States may think proper to impose. They may exclude the foreign corporation entirely, they may restrict its business to particular localities, or they may exact such security for the performance of its contracts with their citizens as in their judgment will best promote the public interest.' So in the Bank of Augusta v. Earle, the language of Chief Justice Taney has been invoked for the same purpose.

In each of these cases, the general language of the learned justice is to be expounded with reference to the subject before him. They lay down principles in general terms which are to be understood only with reference to the facts in hand. Thus, the case in which the opinion was delivered by Mr. Justice Field was one involving the construction of that clause of the United States Constitution which declares that 'the citizens of each State shall be entitled to all the privileges and immunities of citizens in the several States,' and of that clause regulating commerce among the States, not of the one now before us. It involved the question whether the State might require a foreign insurance company to take a license for the transaction of its business, giving security for the payment of its debts, and decided that taking insurance risks was not a transaction of commerce, within the meaning of the two clauses of the Constitution cited. It had no reference to the clause giving to citizens of other States the right of litigation in the United States courts, and certainly had no bearing upon the right of corporations to resort to those courts, or the power of the State to limit and restrict such resort.

It was not intended to impair the force of the language used by Mr. Justice Curtis in the La Fayette Insurance Company v. French, where he says: 'A corporation created by Indiana, can trausact business in Ohio, only with the consent, express or implied, of the latter State. This consent may be accompanied by such conditions as Ohio may think fit to impose, and these conditions must be deemed valid and effectual by other States, and by this court; provided, they are not repugnant to the Constitution and laws of the United States, or inconsistent with those rules of public law which secure the jurisdiction and authority of each State from encroachment by all others, or that principle of natural justice which forbids condemnation without opportunity for defence.' Nearly the same language is used by Mr. Justice Nelson in Ducat v. The City of Chicago.

None of the cases so much as intimate that conditions may be imposed which are repugnant to the Constitution and laws of the United States, or inconsistent with those rules of public law which secure the jurisdiction and authority of each State from encroachment by others.

The case of the Bank of Columbia v. Okely, is relied upon by the court below to sustain the statute and the agreement in question. In that case it was provided in the fourteenth section of the charter of the bank that whenever a borrower of the bank should make his note by an agreement in writing negotiable at the bank and neglect its payment when due, the president of the bank should cause a demand in writing to be served upon the delinquent, and if the money was not paid within ten days after such demand it was made lawful for the bank to present to the county clerk the note so unpaid, with proof of the demand, and to require him to issue an execution or attachment against the debtor. Before such execution could issue the bank was required to file an affidavit of the amount due on the note. 'If the defendant shall dispute the whole or any part of the debt (the statute adds) on the return of the execution, the court shall order an issue to be joined and a trial to be had, and shall make such other proceedings that justice may be done in the speediest manner.' This statute was sustained in the case cited. Mr. Key, for the plaintiff, argued in its support on the theory that the whole effect of the provision was to authorize the commencement of a suit by attachment instead of the usual common-law process. Mr. Jones, contra, contended that it was in violation of the provision of the constitution of Maryland and of the United States securing to parties the right of trial by jury when the value in controversy exceeded twenty dollars. In rendering the decision the court say: 'This court would ponder long before it would sustain this action if we could be persuaded that the act in question produced a total prostration of the trial by jury, or even involved the defendant in circumstances which rendered that right unavailing for his protection. . . . If the defendant does not avail himself of the right given to him of having an issue made up and the trial by jury, which is tendered to him by the act, it is presumable that he cannot dispute the justice of the claim.'

We are not able to discover in this case any countenance for the statute of Wisconsin which we are considering.

On this branch of the case the conclusion is this:

1st. The Constitution of the United States secures to citizens of another State than that in which suit is brought an absolute right to remove their cases into the Federal court, upon compliance with the terms of the act of 1789.

2d. The statute of Wisconsin is an obstruction to this right, is repugnant to the Constitution of the United States and the laws in pursuance thereof, and is illegal and void.

3d. The agreement of the insurance company derives no support from an unconstitutional statute and is void, as it would be had no such statute been passed.

We are of opinion, for the reasons given, that the Winnebago County Court erred in proceeding in the case after the filing the petition and the giving the security required by the act of 1789, and that all subsequent proceedings in the State court are illegal and should be vacated. The judgment in that court, and the judgment in the Supreme Court of Wisconsin, should be REVERSED, and the prayer of the petition for removal should be GRANTED.

ORDERED ACCORDINGLY.