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Jackson v. Ludeling Vicksburg Shreveport and Texas Railroad Company/Dissent Field

MR. JUSTICE FIELD dissenting.

I agree with the court that the decree should be reversed, but I do not agree with it in allowing the defendants compensation for expenditures and improvements upon the road whilst they were in control of it. This court has held, after elaborate consideration, that they were possessors in bad faith, having obtained control of the road fraudulently. I know of no law and no principle of justice which would allow them any thing for expenditures upon property they wrongfully obtained and wrongfully withheld from the owners, who were constantly calling for its restitution. Why should the owners pay for expenditures they never ordered, or for the construction of works they never authorized? The defendants knew all the time the vice of their title; they knew they were not possessors in good faith; they concocted the scheme by which the fraudulent sale was made; and this court has so adjudged.

In the courts that administer the common law the rights of the owner are paramount and exclusive. An occupant without title is not recognized as entitled to compensation for improvements. Heron, in his History of Jurisprudence, says: There is no case 'decided in England, Ireland, or the United States, grounded upon common-law principles, declaring that an occupant of land, without a special contract, is entitled to payment for his improvements as against the true owners, when the latter had not been guilty of a fraud in concealing the title.' p. 715.

And courts of chancery do not give to an occupant compensation for improvements, unless there are circumstances attending his possession which affect the conscience of the owner, and impose an obligation upon him to pay for them or to allow for their value against a demand for the use of the property. Putnam v. Ritchie, 6 Paige (N. Y.), 390; Story, Eq. Jur., sect. 799; Mill v. Hill, 3 H. L. Cas. 828; Gibson v. D'Este, 2 Y. & C. 542; Mulhallen v. Marum, 3 Dru. & W. 317. To a possessor whose title originates in fraud, or is attended with circumstances of circumvention and deception, no compensation for improvements is ever allowed. Railroad Company v. Soutter et al., 13 Wall. 517; Morrison v. Robinson, 31 Pa. 456; Van Horne v. Fonda, 5 Johns. (N. Y.) Ch. 388, 416; Russell v. Blake, 2 Pick. (Mass.) 505; McKim v. Moody, 1 Rand. (Va.) 58; Morris and Others v. Terrell, 2 id. 6.

The learned counsel for the appellants who argued this case showed, I think, conclusively, by reference to numerous adjudications and approved text-writers, that the civil law as enforced in Europe and in Louisiana draws the same line of demarcation between the possessor in good faith and the possessor in bad faith in allowing for improvements and expenditures on the property of another. Pothier, the great legal writer, referring to the rule that no man ought to enrich himself at the expense of another, upon which compensation for improvements is here claimed, says: 'A bona fide possessor may properly oppose it against an owner, but it is not available to a mala fide possessor. The owner can reply to the latter that equity did not empower him to take possession of his land and to make thereon such changes as he desired and so put the owner to charges that were burdensome, and that he might not wish to bear, and which this possessor had no right to impose. If the latter suffers from the failure to reimburse him, he must blame himself, as being in fault, and no one can complain of consequences he has brought upon himself.' Trait e du Droit de Propri et e, sect. 350.

The civil law as thus stated corresponds with what a great chancellor of England said of the interference of equity to allow one the value of improvements on another's property. 'If a person,' he said, 'really entitled to the estate will encourage the possessor of it to expend his money in improvements, or if he will look on and suffer such expenditures, without apprising the party of his intention to dispute his title, and will afterwards endeavor to avail himself of such fraud, the jurisdiction of equity will attach in such a case. But does it follow from thence that if a man has acquired an estate by a rank and abominable fraud, and shall afterwards expend his money in improving the estate, that therefore he shall retain it in his hands against the lawful proprietor? If such a rule shall prevail, it will certainly justify a proposition which I once heard stated at the bar of the Court of Chancery, that a common equity of this country was to improve a man out of his estate.'

I prefer in this case to stand by the ancient law, than to follow any new doctrines supposed to arise out of the character of railroad property. To me it seems that the peculiar character of that property requires the special application of the old law; for just in proportion to the value of this property is the temptation to get possession of it, and if plunderers can, when compelled to restore it, be allowed for their expenditures and alleged improvements, there will be an added incentive to plunder.

I therefore dissent from so much of the decree of this court as allows for expenditures upon property the possession of which the defendants did not obtain in good faith.


text: Talk:Jackson v. Ludeling Vicksburg Shreveport and Texas Railroad Company/Dissent Field

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Yulee v. Vose

ERROR to the Court of Appeals of the State of New York.

This was a suit commenced Feb. 16, 1868, in the Supreme Court of New York, by Francis Vose against the Florida Railroad Company, David L. Yulee, Edward N. Dickerson, Marshall O. Roberts, and Isaac K. Roberts. The prayer of the complaint was that Edward N. Dickerson, Marshall O. Roberts, and all other associates of Edward N. Dickerson, who, when discovered, should be made parties, might be required to pay a judgment which had been rendered in favor of Vose against the Florida Railroad Company in the Supreme Court of New York, on which there was due $136,534.63, and interest from Feb. 1, 1867; that Dickerson, Yulee, Marshall O. and Isaac K. Roberts, and their associates, who it was alleged held all the franchises and property of the company, might be required to hold the income of the railroad, in trust for the payment of the amount of the judgment; that certain securities alleged to be in the hands of Yulee might be also subjected to the payment of the debt; and for other relief. It further appeared from the averments in the complaint that Yulee was liable as indorser on part of the notes on which the judgment was rendered; and this allegation was not denied in his answer, but no judgment was specifically asked against him on that account.

On the trial of the cause, the complaint was dismissed as to all the defendants. This judgment was affirmed in all respects by the Supreme Court in general term; but in the Court of Appeals it was reversed as to Yulee, and the cause remanded for a new trial as to him, on account of his liability as indorser of the notes. As to all the other defendants and all other relief asked there was an affirmance.

On the 5th of June, 1873, after the mandate went down from the Court of Appeals, Yulee filed in the trial court his petition, accompanied by the necessary bond, for the removal of the suit as against him to the Circuit Court of the United States for the Southern District of New York, under the act of July 27, 1866, 14 Stat. 306. That statute provides that if in any suit already commenced, or which might thereafter be commenced, in any State court against an alien, or by a citizen of the State in which the suit is brought against a citizen of another State, a citizen of the State in which the suit is brought is or shall be a defendant; and if the suit, so far as it relates to the alien defendant, or to the defendant who is the citizen of a State other than that in which the suit is brought, is one in which there can be a final determination of the controversy so far as it concerns him, without the presence of the other defendants as parties, 'then and in every such case the alien defendant, or the defendant who is a citizen of a State other than that in which the suit is brought, may, at any time before the trial or final hearing of the cause, file a petition for removal of the cause as against him into the next Circuit Court of the United States to be held in the district where the suit is pending,. . . and it shall thereupon be the duty of the State court. . . to proceed no further in the cause as against the defendant so applying for its removal.' The petition for removal set forth, in sufficient form and with sufficient particularity, the citizenship of Vose in New York, and of Yulee in Florida, both then and at the time of the commencement of the suit; but it made no mention of the citizenship of the other defendants. In all other respects the petition met fully the requirements of the statute. The accompanying bond was also correct in form, and no objection was made to its sufficiency. Notice of an intention to make the application for the removal was served on the attorneys of Vose on the 17th of April, 1873. Accompanying the petition was an affidavit of Dickerson, under date of June 4, 1873, to the effect that he, Dickerson, and the defendants Roberts were citizens of the State of New York.

The cause came on for trial June 9, 1873, and a jury was sworn, when the counsel for Yulee called the attention of the court to the proceedings which had been taken for the removal, and moved to dismiss the complaint for want of jurisdiction. This motion was overruled, and the trial proceeded, resulting in a verdict, by order of the court, against Yulee for $168,589.30, on which judgment was rendered. Exception to the ruling of the court on the question of removal was duly taken. Upon this state of the record, the case was taken by proper proceedings to the Court of Appeals, where the judgment was affirmed, on the ground that the suit was not removable under the act of 1866 when the petition for removal was filed, because the defendant Yulee was then the only defendant. This ruling of the Court of Appeals is now assigned for error.

Mr. Edward N. Dickerson and Mr. William M. Merrick for the plaintiff in error.

All the essential facts which entitled Yulee to a removal being presented by the petition, and the requisite bond filed, there was no jurisdiction in the State court to try and determine the suit. That jurisdiction was absolutely ousted by the petition, and any further action there was coram non judice. The petition is ipso facto a removal of that cause. Any dispute as to the truth of its averments must be tried not in the State court, but in the Circuit Court of the United States, on a motion to remand the cause or otherwise, as that court may direct. If this were not the law, the right of removal might be defeated by the State court, upon its alleged disbelief of the facts proved by the petitioner, or its misconstruction of the statute. Bell v. Dix, 49 N. Y. 236. See also Fisk v. Union Pacific Railroad Co., 6 Blatchf. 362; s. c. 8 id. 243; Hatch v. Chicago, Rock Island, & Pacific Railroad Co., 6 id. 105; Dennistoun v. Draper, 5 id. 336; Insurance Company v. Pechner, 95 U.S. 183; Gold Washing and Mining Company v. Keyes, 96 id. 202; Railway Company v. Ramsey, 22 Wall. 326.

By the terms of the act of July 27, 1866, the right of removal attached to the plaintiff in error at the commencement of the suit, and ran throughout its existence. It was, therefore, not within the power of that court, by its judgment, to make a several case against him, so as to deprive him of a right which exists only where the case assumes a form in which it is capable of a final determination, 'so far as it concerns him, without the presence of the other defendants as parties to the cause.' It appears, therefore, to be within the very spirit, if not the letter, of the statute for a defendant to wait until, by the judgment of the court or by the alterations of the record, a case is presented which dispenses with the presence of the other defendants. In that light the act of severance performed by the judgment of the court below should have been regarded as removing the only impediment to a change of tribunals, instead of being erected into a bar to such change.

Where the right of removal once attaches, a subsequent event, or an amendment of the pleadings, or a change of the parties cannot divest it. Clark v. Mathewson, 12 Pet. 164; Morgon v. Morgon, 2 Wheat. 290; Kanouse v. Martin, 15 How. 198.

Mr. Philip Phillips for the defendant in error.

It is claimed by the plaintiff in error that if the petition for removal, on its face, be in accordance with the statutory requirement, it is a complete bar to all further proceedings in the State court, and that whether the facts stated in the petition are true or not in the record or dehors the record cannot be determined by that court.

Under the twelfth section of the Judiciary Act of 1789 it must appear to the satisfaction of the State court that the defendant is an alien, or a citizen of some other State than that in which the suit is brought, and that the matter in controversy exclusive of costs exceeds the sum of $500. Gordon v. Longest, 16 Pet. 97. It must also determine the sufficiency of the bond.

The act of July 27, 1866, differs only from that of 1789 in providing for the case where there are several defendants of different States.

In view of that decision, it necessarily follows that, under the act of 1866, it must appear to the satisfaction of the court that the petitioner is one of several defendants, and within the description of the act.

The principle contended for by the plaintiff in error is, that the statement in his petition that he is one of several defendants and that his cause can be determined without the presence of the others binds the State court, although the record of the case in which the petition is filed shows that he is the sole defendant.

In Sewing-Machine Companies (18 Wall. 553), the State court refused the application, under the act of March 2, 1867 (14 Stat. 558), made by two of the non-resident defendants, there being another defendant who was a citizen of the same State as the plaintiff. The form of the application was in all things regular; but that court held that the parties were not legally entitled, and on writ of error this court affirmed the judgment. The same question was again made in the Superior Court of Massachusetts; the same ruling was there made, and the judgment was affirmed in Vannevar v. Bryant, 21 Wall. 41.

It is therefore well established that the State court had authority to determine whether, in the case as made by Yulee, he was entitled to the removal of the cause.

The suit in its original constitution being incapable of removal, the plaintiff in error made no attempt to remove it until the question of the joint liability of all the defendants had been eliminated from it by the court of final appeal as to all the defendants except him, against whom only the judgment of the subordinate court was reversed, and a new trial ordered. Thus the suit had utterly ceased to exist as to all the other defendants. Nothing remained of it except an action in favor of Vose against Yulee on a special averment in the complaint of a particular liability against him, distinct from the equitable liability charged against them all jointly. The judgment of the tribunal of last resort put the other defendants out of court, or determined that the suit as to them no longer existed.

The act of 1866 provides only for a case where there are other defendants of the same State with the plaintiff. Yulee's case was not, therefore, within its provisions, and the court of original jurisdiction rightfully proceeded with the trial.

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

title: Yulee v. Vose


text: Talk:Yulee v. Vose

title: Talk:Yulee v. Vose


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Yulee v. Vose/Opinion of the Court

When this suit was commenced in the State court, Vose, the sole plaintiff below, was a citizen of New York, and Yulee a citizen of Florida. If there had been no other defendant but Yulee, he could then have removed the cause to the Circuit Court, under sect. 12 of the Judiciary Act of 1789 (1 Stat. 79), on filing his petition to that effect, and giving the necessary security at the time of entering his appearance. His joinder with other defendants, however, prevented this at that time; and as the suit then stood, it was impossible for him to proceed under the act of 1866, because, although his liability as indorser, in which his co-defendants had no interest, was shown, he was united with them in respect to other matters where there could be no final determination of the controversy, so far as it concerned him, without their presence. When the Court of Appeals decided that there could be no relief in the action, except so far as it related to the liability of Yulee as indorser of the notes, the other parts of the case were disposed of, and that which related to Yulee alone left for final determination. This action of the Court of Appeals separated the controversy in which Yulee was alone concerned as defendant from the rest of the case, and put him for the first time in a condition to invoke the aid of the act of 1866. It is true he was then the sole remaining defendant, but it was in a suit which had been commenced against him and others, and which was still pending undisposed of as to him. Under these circumstances, we are clearly of the opinion that the case was removable, notwithstanding the final judgment in favor of all the other defendants in respect to all the other matters in controversy.

This disposes of the question on which the Court of Appeals based its decision; but as the State court was not bound to surrender its jurisdiction until a case had been made which, upon its face, gave Yulee a right to the transfer, it remains to consider whether the record shows that what was done had that effect.

The petition and accompanying affidavits and bond were filed in court June 5, 1873. This was before the trial and thus in time, under the act of 1866, which in this respect differs from the act of 1789. When the cause was called for trial and after the jury was sworn, the counsel of Yulee directed the attention of the court to the petition for removal, and asked that the complaint be dismissed for want of jurisdiction. This was in effect asking the court to proceed no further in the cause, as it had been withdrawn from the jurisdiction by reason of the proceedings for removal. As no objection was made specifically to the bond which was offered, we are to presume that the security was satisfactory, and that the court refused to withhold further proceedings because a case for removal had not been made.

We think the application was made in time. The trial had not commenced. The most that can be said is that preparations were being made for a trial.

The petition and the affidavits which accompanied it are to be taken together as part of the same instrument. They are also to be considered in connection with the other parts of the record to which they belong.

The evident purpose of the act of 1866 was to relieve a person sued with others in the courts of a State of which he was not a citizen, by one who was a citizen, from the disabilities of his co-defendants in respect to the removal of the litigation to the courts of the United States, if he could separate the controversy, so far as it concerned him, from the others, without prejudice to his adversary. In view of the fact that sometimes in the progress of a cause circumstances developed themselves which made such a transfer desirable, when at first it did not appear to be so, the right of removal in this class of cases was kept open until the trial or final hearing, instead of being closed after an entry of appearance, as was the rule under the act of 1789. We think this gives such a party the right of removal at any time before trial, when the necessary citizenship of his co-defendants is found to exist, and the separation of his interest in the controversy can be made. There is nothing in the act to manifest a contrary intention, and this construction does no more than give the party to whom this new privilege is granted an opportunity of availing himself of any circumstances that may appear in his favor previous to the time when, he is called upon finally to act. In Insurance Company v. Pechner (95 U.S. 183), we held that the act of 1789 clearly had reference to the citizenship of the parties when the suit was begun, because the party entitled to the removal was required to make his election when he entered his appearance. But here a party otherwise entitled to a removal is embarrassed by the presence of those whom he cannot control. In view of this, the time of making his election is extended until he is brought to trial; and it is not at all in conflict with that case to say that he may avail himself of his release from the operation of the disabilities growing out of his joinder in the action with other defendants, whenever that release occurs, if before trial or final hearing as to him.

When the application for removal was made, it appeared on the face of the record that Yulee, a citizen of Florida, had been sued with other defendants by Vose, a citizen of New York, in the courts of the State of New York, and that a part of the other defendants with whom he had been joined were then citizens of the State of New York. It also appeared that the controversy, so far as it concerned Yulee, not only could be, but actually had been by judicial determination, separated from that of the other defendants. This, as we think, gave Yulee a right to the transfer of his part of the suit to the Circuit Court, and required the State court to proceed no further. Inasmuch as the Court of Appeals has sustained the judgment given after the refusal to permit the transfer to be made, the judgment of the Court of Appeals will be reversed, and the cause remanded for such further action in accordance with this opinion as may be necessary; and it is

So ordered.

title: Yulee v. Vose/Opinion of the Court


text: Talk:Yulee v. Vose/Opinion of the Court

title: Talk:Yulee v. Vose/Opinion of the Court


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Hartell v. Tilghman

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

The facts are stated in the opinion of the court.

Mr. William Henry Rawle and Mr. M. D. Connolly for the appellants.

The court below had no jurisdiction. The parties were all citizens of the same State. The suit was founded upon a contract between them, and did not arise under a statute of the United States. Wilson v. Sandford, 10 How. 99; Hartshorn v. Day, 19 id. 211; Slemmer's Appeal, 58 Pa. St. 164; Blanchard v. Sprague, 1 Cliff. 288; Goodyear v. Day, 1 Blatchf. 565; Merserole v. Union Paper Collar Co., 6 id. 356; Goodyear v. Union India-rubber Co., 4 id. 63; Burr v. Gregory, 2 Paine, 426; Hill v. Whitcomb, 1 Holmes, 317; Pulte v. Derby, 5 McLean, 328; Curtis, Patents, sect. 496.

When the defendant's original use of a machine or a process for which letters-patent have been granted to another is unlawful, he is prima facie an infringer, and the Federal jurisdiction attaches to prevent a violation of a right secured by the laws of the United States. But where such use is lawful, he is prima facie not an infringer, and that jurisdiction does not attach. The rights involved rest solely upon contract, and it is only when a breach of it is shown that the continued exercise of them can be enjoined.

Mr. George Harding, contra.

The bill is founded on letters-patent. The relief sought is an injunction, a discovery, and an account, and not the rescission, the enforcement, or the construction of a contract of license: The court below therefore had jurisdiction. Brooks v. Stolley, 3 McLean, 523; Woodworth v. Weed, 1 Blatchf. 165; Wilson v. Sherman, id. 538; Woodworth v. Cook, 2 id. 160; Wilson v. Sanford, 10 How. 99; Pulte v. Derby, 5 McLean, 336; Day v. Hartshorn, 3 Fish. 32; Goodyear v. Congress Rubber Company, 3 Blatchf. 453; Judson v. Union Rubber Company, 4 id. 66; Bloomer v. Gilpin, 4 Fish. 54; Blanchard v. Sprague, 1 Cliff. 288; Merserole v. Union Paper Collar Co., 3 Fish. 483; Littlefield v. Perry, 21 Wall. 205; Magic Ruffle Company v. Elm City Company, 13 Blatchf. 157.

MR. JUSTICE MILLER delivered the opinion of the court.

title: Hartell v. Tilghman


text: Talk:Hartell v. Tilghman

title: Talk:Hartell v. Tilghman


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Hartell v. Tilghman/Opinion of the Court

This is an appeal from a decree of the Circuit Court of the Eastern District of Pennsylvania, in which Tilghman, the appellee, describes himself in his bill as a citizen of that State, and the defendants as citizens of the same State. It thus appears affirmatively that, if the court had jurisdiction of the case, it was for some other reason than the citizenship of the parties; and it is argued by appellants that there is no such other ground for the jurisdiction.

The counsel for appellee, however, insists that it is 'a case arising under the patent laws of the United States,' and therefore cognizable in the circuit courts of the United States, on account of the subject-matter of the suit.

Subdivision 9 of section 629 of the Revised Statutes, which section is devoted to a definition of the powers of that court, gives it original jurisdiction 'of all suits at law or in equity arising under the patent or copyright laws of the United States.'

This section of the revision is founded on section 55 of the act of July 8, 1870, which declares that all actions, suits, controversies, and cases arising under the patent laws of the United States 'shall be originally cognizable, as well at law as in equity, in the circuit courts of the United States;' and that those courts shall have power to grant injunctions according to the course and principles of courts of equity, to prevent the violation of any right secured by patent, on such terms as the court may deem reasonable; and on a decree for infringement complainant shall be entitled, in addition to profits, to the damages he has sustained thereby. The language of the act of 1836 is substantially the same, except as to the damages to be recovered. We are, therefore, to decide whether this suit is one arising under the patent laws of the United States, within the meaning of the clause we have cited.

If a man owning a tract of land, his title to which is a patent from the United States, should sell or lease that land, and a controversy should arise between him and his vendee or lessee as to their rights in the premises, it could not be said that any suit brought by the vendor to assert his rights was a suit arising under the land laws of the United States; and this would be beyond question if the defendant, admitting the title of plaintiff to the land, should make no other defence than such as was founded in rights derived from plaintiff by contract. That is the case before us, with the variance that plaintiff's title is to a patent for an invention instead of a patent for land.

His bill begins by a statement that he is the original inventor and patentee of a process for cutting and engraving stone, glass, metal, and other hard substances. It is the one known as the sand-blast process.

He then sets out what we understand to be a contract with defendants for the use by the latter of his invention. He declares that defendants paid him a considerable sum for the machines necessary in the use of the invention, and also paid him the royalty which he asked, for several months, for the use of the process, which he claims to be the thing secured to him by patent. He alleges that after this defendants refused to do certain other things which he charges to have been a part of the contract, and thereupon he forbade them further to use his patent process, and now charges them as infringers.

The defendants admit the validity of plaintiff's patent. They admit the use of it and their liability to him for its use under the contract. They set out in a plea the contract as they understand it, and the tender of all that is due to plaintiff under it, and their readiness to perform it.

What is there here arising under the patent laws of the United States? What controversy that requires for its decision a reference to those laws or a construction of them? There is no denial of the force or validity of plaintiff's patent, nor of his right to the monopoly which it gives him, except as he has parted with that right by contract.

The complainant's view of the case is that there was a verbal agreement that he should prepare and put up in defendants' workshop ready for use such parts of the machinery as were of special use in his invention, for which defendants were to pay him at all events. That after this was done defendants should take a license for the use of his invention; that this license was to be the same in its terms as that given to all other persons who used the process, and among these were the right on the part of the patentee to visit the works of the defendants at all times, as well as to inspect their books, with a view to ascertain the amount of work done on which royalty was due. Also, that once every year the complainant had a right to fix the tariff of rates to be paid by defendants, by increasing it if he so determined, with no other limitation than that the increase of rates should apply equally to all licensees of the patent.

It is established by evidence of which there is no contradiction that complainant did furnish and put in place the machines, for which defendants paid him $649. That complainant also furnished a schedule of the rates of royalty to be paid on the different kinds of work to which the patented process was to apply, and that defendants made monthly returns and monthly payments according to this schedule, which were received by plaintiff without objection. That besides the machinery purchased of plaintiff, the defendants had expended about $3,000 in erecting a blower for the use of the sand-blast of complainant's process.

At this stage of the affair complainant tendered to defendants two blank forms of license to be signed by both parties, containing the two conditions we have mentioned. After some fruitless negotiations, defendants refused to sign these papers, and complainant thereupon, as we have said, forbade them to use the process, and on their disregard of this admonition brought his bill in chancery for an injunction, and for an account of profits and additional damages.

The argument of counsel is that defendants, having refused to sign the papers tendered them, are without license or other authority to use his invention, and are naked infringers of his rights under the acts of Congress.

The defendants say that they never agreed to accept a license with the conditions we have mentioned in them; that they never agreed to permit complainant's agents to inspect all the processes of their own works, some of which were valuable secrets, nor, after they had expended thousands of dollars in preparations for the use of his process, to place themselves under his arbitrary control as to the prices they should pay for the use of his invention. And they say that when the machines were in full operation and paid for, and the schedule of rates had been furnished by complainant and accepted by them, the contract was complete, and needed no such written agreement as the one tendered them for signature.

Such were the pleadings and the principal conceded facts on which the court was called to act, and we pause here to consider the question of jurisdiction on the case thus stated.

Burr v. Gregory (2 Paine, 426), one of the earliest cases on this subject, was a bill to procure a decree that the assignment of a patent by Burnap to Gregory was to the extent of three-fifteenths for the benefit of complainant, Burr, and to have a conveyance executed accordingly. Mr. Justice Thompson said that if the validity of the patent or of the assignment could be drawn in question, the Circuit Court might have jurisdiction. But as it was a matter which grew out of the contract, and there was no averment of citizenship, the amount prayed for, growing out of the profits, did not vary the case so as to give jurisdiction. This decision was made before the act of 1836, but is indicative of the sound doctrine that controversies arising out of contracts concerning patent-rights did not necessarily belong to the Federal courts.

The next case in chronological order was founded on the act of 1836, the language of which, as we have seen, was on this point preserved in the act of 1870, and is embodied in the Revised Statutes. It is the only authoritative construction of the statute on that point made by this court, except Littlefield v. Perry (21 Wall. 205), which is in accord with it, and we think it covers the case under consideration. We refer to Wilson v. Sanford (10 How. 99), and the opinion was delivered by Mr. Chief Justice Taney.

The complainant was assignee of the Woodward planing-machine patent, and had licensed the defendants to use one machine upon payment of $1,400, of which $250 was paid down, and notes payable in nine, twelve, eighteen, and twenty-four months given for the remainder. This license contained a provision that if either of the notes was not punctually paid at maturity, all the rights under the license ceased and reverted to 'Wilson, who became reinvested in the same manner as if the license had never been made.' Upon failure to pay the first two notes, Wilson brought his bill, charging that notwithstanding this, the defendants were using the machine, and thus infringing his patent. He prayed an injunction, an account, &c.

The bill was dismissed in the court below, and on appeal to this court the appeal was dismissed because the amount in controversy did not exceed $2,000. If, however, it had been a case arising under the patent laws of the United States, no sum was necessary to give jurisdiction.

The precise question, therefore, to be decided was whether the suit arose under the patent laws of the United States; and the Chief Justice, after reciting the clause in the act of 1836 which gives the circuit courts jurisdiction in all such cases, proceeds to discuss that question in this manner: 'The peculiar privilege,' he says, 'given to this class of cases was intended to secure uniformity of decision in the construction of the act of Congress in relation to patents. Now, the dispute in this case does not arise under any act of Congress, nor does the decision depend upon the construction of any law in relation to patents. It arises out of the contract stated in the bill, and there is no act of Congress providing for or regulating contracts of this kind. The rights of the parties depend altogether upon common-law and equity principles. The object of the bill is to have this contract set aside and declared to be forfeited; and the prayer is, 'that the appellant's reinvestiture of title to the license granted to the appellees, by reason of the forfeiture of the contract, may be sanctioned by the court,' and for an injunction. But the injunction he asks for is to be the consequence of the decree of the court sanctioning the forfeiture. He alleges no ground for an injunction, unless the contract is set aside. And if the case made in the bill was a fit one for relief in equity, it is very clear that whether the contract ought to be declared forfeited or not in a court of chancery depended altogether upon the rules and principles of equity, and in no degree whatever upon any act of Congress concerning patent-rights. And whenever a contract is made in relation to them, which is not provided for and regulated by Congress, the parties, if any dispute arises, stand upon the same ground with other litigants as to the right of appeal.'

Let us see how closely these remarks and the case to which they related apply to the present case. In that case a contract was made under which the defendant entered on the use of the invention. This is also true of the case before us. In that case it is charged that an act to be performed by the defendant and licensee under the contract was not performed, to wit, payment of the notes. In the case before us it is alleged in like manner that the defendants failed to perform part of the contract, to wit, to sign a license.

In that case the complainant asserted, as in this, that all right under the contract had ceased, and he was remitted to his original rights under the patent, and could, therefore, sue in the Federal court under the statute; but the court held this to be erroneous, and that the rights of the parties depended on the contract and not on the statute. Why does not the same rule apply to the present case? Wilson's case was stronger than Tilghman's case, for two reasons:--

1. Because the contract was all in writing, and there was no dispute about its meaning. Here it was in parol, and there is not only dispute about its meaning, but the rights of the parties depend almost wholly upon the points in dispute, which have no relation to the patent laws of the United States.

2. In Wilson's case there was an express provision in writing that a failure to pay any note when due forfeited the license and reinvested Wilson with all his original rights. No such provision is set up in the contract between Tilghman and the defendants.

In this case, as in that, the defendants had bought the machine and paid for it and used it. In this case, as in that, the right to its further use depended upon the contract, and was to be determined by its construction and effect. In this, as in that, the case, in Judge Taney's language, 'does not arise under an act of Congress, nor does the decision depend upon the construction of any law in relation to patents. The rights of the parties depend altogether upon common-law and equity principles.

In Goodyear v. Union India-rubber Company (4 Blatchf. 63), where the licensees had neglected for three years to pay the royalty which they had agreed to pay, and refused to permit their books to be inspected, and where one of the prayers of the bill was that until they had so accounted and paid the royalty due they should be enjoined from the use of the invention, Judge Ingersoll held that the bill stated no case arising under the patent laws of the United States, but did not make a case for relief on the contract. Judge Blatchford stated the doctrine still more strongly in Merserole et al. v. Union Paper Collar Co., 6 id. 356.

In the case of Blanchard v. Sprague (1 Cliff. 288), decided by Mr. Justice Clifford in 1859, he said: 'No dispute arises in the case under any act of Congress, nor does the decision depend in any respect on any law of Congress in relation to patents. On the contrary, it arises entirely out of the agreement, express or implied, for a license, and the rights of the parties depend altogether upon the ordinary rules of law. . . . What the complainant really claims is that he terminated or revoked the license under the agreement which previously existed between the parties, by giving the notice, and that the respondent subsequently continued the use of the machine without any stipulation as to the rate of tariff.' How precisely descriptive of the case under consideration, in which Tilghman, claiming that he has terminated at his own option the arrangement under which the defendants had been operating, can now sue in the Federal court for an infringement in violation of the acts of Congress. In the case mentioned Judge Clifford held otherwise.

To the same purport is Hill v. Whitcomb, decided by Judge Shepley, and reported in 1 Holmes, 317.

It may be conceded that the case of Brooks v. Stolly (3 McLean, 523), decided by Mr. Justice McLean on the circuit prior to the act of 1836, is, in some respects, opposed to the authorities we have cited. But in them it stands alone, and is not supported by the better reason.

We may be asked, if we concede the complainant's statement of the verbal agreement to be correct, what remedy has he on it? The answer is very easy. He can establish his royalty once every year, and sue at law and recover every month or every year for what is due. If he desires to assert his right of examining the works of the defendants, he can, in a proper case made, compel them to submit to this examination. If he desires to enforce the agreement for executing a written contract of license, he can bring a suit in equity for specific performance, and with or without that specific relief ask the court to enjoin them from using the patented process until they execute the agreement and comply with its requirements. All these and perhaps other remedies are open to him to enforce the contract. He may also file a bill in chancery to have it annulled or set aside because of the difficulties placed in the way of its fair execution by the defendants.

Not content, however, with all these remedies, the complainant assumes that he has, under the condition of things he has proved, the right in himself to abandon the contract, to treat it as a nullity, and to charge the defendants as infringers, liable as trespassers under the act of Congress to pay both profits and damages.

The analogy of an action of ejectment to recover possession of land in cases of a broken contract of sale is referred to. The analogy, however, is imperfect and deceptive. That action is one at law, depending on the existence of the strict legal title to land in plaintiff, and the doctrine that the right of possession follows the title. It is a peculiar action, founded on a peculiar doctrine limited to real estate, and liable to be defeated in equity by a bill for specific performance and an injunction.

In the case of a patent, plaintiff does not recover any specific property, real or personal. He recovers damages or compensation for the use of his monopoly; and if he has made a bargain with the defendant, his right to rescind or annul it must depend on all the equitable circumstances of the case.

Here, where he has sold and received a considerable sum for a machine of no use for any other purpose; where the defendants have spent several thousand dollars on other machinery, which is also valueless except in connection with the use of this process; where defendants have paid and plaintiff received for many months the royalty which plaintiff established, and are still ready and willing to continue payment; and where the contract being in parol the parties differ about one or two of its minor terms,-we do not agree that either party can of his own volition declare the contract rescinded, and proceed precisely as if nothing had been done under it. If it is to be rescinded, it can be done only by a mutual agreement, or by the decree of a court of justice. If either party disregards it, it can be specifically enforced against him, or damages can be recovered for its violation. But until so rescinded or set aside, it is a subsisting agreement, which, whatever it is, or may be shown to be, must govern the rights of these parties in the use of complainant's process, and must be the foundation of any relief given by a court of equity.

Such a case is not cognizable in a court of the United States by reason of its subject-matter, and as the parties could not sustain such a suit in the Circuit Court by reason of citizenship, this bill should have been dismissed.

The decree of that court will, therefore, be reversed, with directions to dismiss the bill without prejudice; and it is

So ordered.

MR. JUSTICE STRONG did not hear the argument nor take any part in the decision of the case.

MR. JUSTICE BRADLEY, with whom concurred MR. CHIEF JUSTICE WAITE and MR. JUSTICE SWAYNE, dissenting.


text: Talk:Hartell v. Tilghman/Opinion of the Court


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Hartell v. Tilghman/Dissent Bradley

MR. JUSTICE BRADLEY, with whom concurred MR. CHIEF JUSTICE WAITE and MR. JUSTICE SWAYNE, dissenting.

I dissent from the opinion of the court in this case. I cannot see the slightest room for doubt as to the jurisdiction of the Circuit Court. The suit is a bill in equity, which sets up letters-patent issued to the complainant for a new and useful improvement in cutting and engraving stone, metal, and glass; and complains that the defendants are infringing said patent by using the said process without any license therefor, and praying an injunction, and decree for profits and damages. The bill also states the fact that negotiations had passed between the complainant and the defendants for a license to use the said invention, but that the defendants had failed to comply with the conditions, and hence had no right to continue the use; but persisted in doing so. This is the substance of the bill. It is a clear case, it seems to me, 'arising under the patent laws of the United States,' and is therefore properly cognizable by the Circuit Court of the United States under sect. 629, art. 9, and sects. 4919 and 4921 of the Revised Statutes, and the laws from which that article and those sections were compiled. The cause of action, or ground of relief, is the infringement of the patent. The plaintiff chooses to place himself on that ground alone. By doing so he runs the risk of any defence which would show a right to use the invention, whether license from himself, invalidity of the patent, non-infringement, or any other proper defence to a suit on a patent. He states in his bill, as he had a right to do by the rules of equity pleading, what the supposed defence would be, and answers it. This anticipation of the defence does not change the nature of the suit in the least. Perhaps he need not have anticipated the defence, but might have left the defendants to develop it in their answer. Certainly in that case the character of the defence would not have ousted the court of its jurisdiction. If a cause of action is cognizable by the United States court, the defendant cannot oust that jurisdiction by his defence to the action. He may defeat the action, but he cannot destroy the jurisdiction.

It will not do to say that the remedy of the complainant was a bill for a specific performance of the parol agreement that the defendants would take a license. Perhaps he had such a remedy. But he did not choose to pursue it. He waived it by suing as for an infringement. He chose to take the responsibility of having a right to put an end to the agreement without juridical aid. Having done this, his only remedy was to sue on the patent as for an infringement. He certainly had a right to do this. He was not bound to sue for specific performance. Nor was he bound to sue for the avoidance of the supposed agreement. It may be that it would have been his better remedy. It may be that the result of the negotiation is to create a defence to the suit for infringement, amounting to a parol leave and license, or a license in law. If so, he has only made a mistake in suing as for an infringement of his patent, and may fail in his action. How that may be it is unnecessary now to inquire, since the majority of this court has decided the case on the question of jurisdiction. But whether it be so or not, the character of the present suit is not changed, as a suit for injunction and damages for the alleged infringement.

How, I would ask, could a State court have determined this suit? Suppose the defence of license, express or implied, had failed, what would the State court have done? Could it have taken an account of profits? Could it have assessed damages for the infringement? Could it have granted an injunction to restrain the defendants in the use of the invention? This would have been a new branch of jurisdiction and inquiry for it to have assumed. It is too obvious for argument, as it seems to me, that no State court has, or could rightfully take, jurisdiction of the suit.

It is perfectly well settled, I admit, that where a suit is brought on a contract of which a patent is the subject-matter, either to enforce such contract, or to annul it, the case arises on the contract, or out of the contract, and not under the patent laws. But where infringement of the patent is the ground of action, and redress is sought therefor, the case does arise under the patent laws, and is cognizable in the Federal court,-no matter what collateral issues may be raised by the defendant. He may set up that the patent is void, that he does not infringe, that he has a license, or a release, or what not; the Federal court is fully competent to try any of the issues thus made.

The case principally relied on by the majority of the court is that of Wilson v. Sanford, 10 How. 99. But there the bill prayed to have the license declared void. The Chief Justice said: 'The object of the bill is to have this contract set aside, and declared to be forfeited, and the prayer is that the appellant's reinvestiture of title to the license granted to the appellees, by reason of the forfeiture of the contract, may be sanctioned by this court, and for an injunction.' In such a case it may be that relief is properly to be sought in the State court. But if the question were a new one, I should think that where the complainant seeks damages for infringement and an injunction against the use of the invention, making that the basis of his suit, it would not be improper, nor oust the jurisdiction of the Federal court, to join in such a bill, as ancillary to the principal relief sought, an application to avoid an inequitable license held by the defendant. I see nothing incongruous in the joinder of such matters in the bill. It seems to me that the views on this subject, expressed in Brooks v. Stolley (3 McLean, 523), are perfectly sound and just. There the complainant had given a license to use a patented invention, determinable on non-payment of the royalty. On failure to pay he filed his bill for an injunction and damages, at the same time stating the granting of the license, and the failure to perform the conditions of it. Mr. Justice McLean said: 'It is suggested that, as the whole controversy in the case arises under the contract of license, the parties to which being citizens of this State, the Federal court cannot take jurisdiction. This objection would be unanswerable, if no right were involved in the controversy except what arises out of the contract, as, for instance, the Circuit Court could take no jurisdiction under the contract of an action, merely to recover the sums agreed to be paid by the defendant; but the present aspect of the case, it is not limited to the contract. The complainants set up their right under the patent, and allege that the defendant is infringing that right; that the license affords no justification whatever to the defendant. The right then of the complainants to an injunction is not founded by them on the contract, but on the assignment of the patent. If the object of the bill were merely to enforce the specific execution of the contract, the Circuit Court of the United States could exercise no jurisdiction in the case.' See also Curtis, Patents, sect. 496, to the same purpose, citing this opinion.

It seems to me, with all due submission, that if we are to have regard to 'the better reason,' we shall find it expressed in these remarks of Mr. Justice McLean.

It may be laid down, I think, as a general principle, that where a case necessarily involves a question arising under the Constitution or laws of the United States, and cannot be decided without deciding that question, it is a case arising under said Constitution and laws, and may be brought, as the law now stands, in the Circuit Court of the United States, although other questions may likewise be involved which might be tried and decided in the State courts. I do not believe in the doctrine that the presence of a question of municipal law in a case which necessarily involves Federal questions can deprive the Federal courts of their jurisdiction. It is too narrow a construction of the judicial powers and functions of the Federal government and its courts.

But in this case the complainant asks no relief in relation to the supposed agreement between him and the defendants. He places himself solely on his rights accruing under the patent and on the defendants' infringement of them. I think, therefore, the jurisdiction of the Circuit Court of the United States was undoubted.

title: Hartell v. Tilghman/Dissent Bradley


text: Talk:Hartell v. Tilghman/Dissent Bradley


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Page:History of West Australia.djvu/519

OLONIALS can well boast of theirs being the home of freedom and liberty. A divine beatitude has enabled lights formerly shining under bushels to blaze forth into brilliancy. It is here that a man's true worth can be readily reckoned. On an equal footing with his neighbour politically, and on an unequal footing mentally, there must be an extended field for such a tender sapling as talent to find nurture and development. England can boast of no better arena for her sons than Australia, where worth and merit find their true place.

Mr. Charles Ernest Deeley was born in Warwickshire, England, in July, 1849. He was sent to college when comparatively young, and then, showing an aptitude for commerce, his father took him into his business, which carried on an extensive hardware trade in Birmingham, under the name of Deeley, Wignall, and Wilson. In 1869 he resolved to sail for the colonies. It was no idle self-sophistication when he impressed on himself and his people that beyond the seas there was a country where extensive fields and spheres contained indefinite possibilities and rich probabilities of gain and profit. He reached Melbourne in 1869, and joined the firm of McLean Brothers and Rigg, one of the largest hardware houses in the colony, and became their travelling representative over almost the whole area of Australia. He remained a successful servant in that employ for ten years—a period of great value to him in many respects. In that decade he had gained an insight into mining operations and all its appurtenances. He took a trip to England and returned again to Melbourne, this time joining his former firm as partner. He opened a branch business in Adelaide in 1882, and supervised it for several years. His enthusiasm for mining increased, and he invested considerable capital in South Australian mines, and became chairman of directors of the old Balhannah mine. He dissolved partnership with the firm of McLean Brothers and Rigg in 1887, and from that time his sole concern has been mining. He became a keen investor and a member of the Adelaide Stock Exchange, and shared the universal excitement of the Broken Hill boom. In January, 1894, he came to Western Australia, and gave an exhaustive report from Hannan's on the Coolgardie blocks, which are now universally known as the Great Boulder, Lake View, Royal Mint, and Ivanhoe. This report was elaborately and carefully compiled for the benefit of Adelaide shareholders, whose interests he was commissioned to represent. After this careful survey he went to London on mining business, and with the ready assistance of a few friends successfully launched a new corporation called the Gold Estates of Australia, Limited, which was floated in 1894 for £100,000. He returned to Western Australia, and underwent trying experiences at Hannan's. By his capable representations many excellent properties were floated by his company. First came the Menzies Proprietary Reefs, with a capital of £175,000; then in succession followed Menzies Crusoe (£200,000) and Menzies Consolidated (£225,000). Mr. Deeley early foresaw that the scarcity of water would hamper mining development, and he wrote to the company at home suggesting, among other proposals, the formation of a small water company for the express purpose of conducting water to the several batteries. His proposal was unanimously accepted, and a water company was there and then formed, with a capital of £60,000. The prime object of this scheme was to conduct water from Lake Prinsep by several mechanical contrivances to the various batteries on the fields. Operations were speedily commenced, and a short time afterwards saw the water raised to a level of 200 feet in height. Through 6-inch galvanised pipes the water was pumped up to Crusoe Hill, and reticulated from there through various mains supplying batteries all along the route of conduction. Many companies in and around Menzies pay handsome prices for such an advantageous supply, with the result that this water experiment has been highly useful and remunerative.

The Octagon Explorers, Limited, was subsequently floated by his company, with a capital of £200,000. All these flotations owe their success to the confidential and able advice of Mr. Deeley. Speculation with him was a pliable and versatile gift. From the attractions of mining, as binding as exciting, he could pass cool and calm to unenriched land speculations. For his company he made several purchases of real estate. In 1895 he bought "Maylands," with an area of 716 acres, which is now being subdivided and sold in lots. At the first Government sale in Menzies he purchased for a small sum several blocks on the main street which are now (1896) being sold at £40 per foot. There is one feature about this company which is highly praiseworthy, and that is an honest aversion to deception by fraud, cheatery, and "wildcats." Everything must undergo some little process of development before being put on the market. The first company to return a dividend was the Menzies Proprietary Reefs, which paid two shillings per share on £175,000 capital. Mr.

title: Page:History of West Australia.djvu/519


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Colby v. Reed

ERROR to the Circuit Court of the United States for the Eastern District of Wisconsin.

The facts are stated in the opinion of the court.

Mr. Edwin H. Abbot for the plaintiff in error.

''Mr. Matt. H. Carpenter, contra''.

MR. JUSTICE CLIFFORD delivered the opinion of the court.

title: Colby v. Reed


text: Talk:Colby v. Reed

title: Talk:Colby v. Reed


text:
Colby v. Reed/Opinion of the Court

Tender, when the demand is of money, for a definite sum or for an amount capable of being made certain, may at common law be made on the very day the money becomes due, but it will constitute a defence only when made before the action is brought. Chitty, Contr. (10th ed.) 732, 733; 2 Pars. Contr. (6th ed.) 148; 9 Bac. Abr., Tender D. 321; Suffolk Bank v. Worcester Bank, 5 Pick. (Mass.) 106; Pitcher v. Bailey, 8 East, 171; Briggs v. Calverly, 8 T. R. 629.

In actions of debt and assumpsit the principle of the plea of tender is that the defendant has always been ready to perform the contract, and that he did perform it as far as he was able by tendering the requisite money, the plaintiff himself having prevented a complete performance by his refusal to accept the tender. Such a tender and refusal do not discharge the debt, and hence the plea must proceed to allege that the defendant is still ready to perform, and it must contain a profert in curia of the money tendered. Ayers v. Pease, 12 Wend. (N. Y.) 393.

Arrangements were made between the parties to advance material aid in the construction of a certain land-grant railroad, and to promote that object the defendant agreed with the plaintiff, in writing under seal, that he would take stock in the company to the amount of $200,000, and that he would pay or deliver to the order of the plaintiff $45,000 of the proceeds of the subscription. Pursuant to the agreement, the defendant subsequently paid the agreed sum in money, and received the certificates of the stock to the same amount. Progress was made in the undertaking, but it turned out that more money was needed to complete the enterprise; which made it necessary that the same parties should subscribe for an additional hundred thousand dollars of the stock. It appears that they were willing to do so; but that the plaintiff could not furnish his proportion of the money for the new subscription, and that the defendant, in consideration of receiving $5,000 out of the plaintiff's stock, agreed to pay the entire amount of the additional subscription and to take the whole of the new stock, which left in his hands only $40,000 of the original stock belonging to the plaintiff. Money to the amount of $2,000 was, about the same time, borrowed for six months by the plaintiff of the defendant, on a pledge of $8,000 of plaintiff's stock in the hands of the defendant, which the record shows was never repaid, leaving in the possession of the defendant only $32,000 of the first subscription.

Throughout these transactions the relations between the parties were amicable; but they subsequently became hostile, and on the 28th of May, 1875, the plaintiff instituted the present suit in the Circuit Court, in which he claimed judgment against the defendant for the stock of the railroad in his hands to the amount of $45,000, with interest, as alleged in the complaint.

Service was made; and the defendant filed an answer, setting up several defences: 1. That the allegation that he refused to deliver the stock mentioned in the complaint is not true. 2. That no proper demand for the delivery of the same was ever made. 3. That the demand made was for the delivery of $45,000 of the stock when the defendant well knew that he was only entitled to demand $32,000 of the same, and the defendant avers that he always was and still is ready and willing to deliver the true amount. 4. That the plaintiff is indebted to the defendant in the sum of $2,000, for which he claims an allowance as a set-off or as a counter-claim. 5. That the value of the stock is much below par, and that the pledge to him for the loan is inadequate as security.

Preliminary matters being closed, the parties went to trial. Evidence was introduced on both sides, and the court submitted certain questions to the jury, to which they responded to the effect following: That the plaintiff before the commencement of the action made a demand of the stock from the defendant, and that the defendant refused to deliver the same. That the parties entered into the agreement set forth in the answer, by which the plaintiff was to deliver to the defendant the excess of the stock originally subscribed, above $40,000, in the event that it should become necessary to make the additional subscription of $100,000, and that the notice required of the defendant in that contingency was waived by the plaintiff; and the jury also found that the amount of stock which the plaintiff was entitled to demand and receive was only $32,000, and that the cash value of the same was and is $9,600, which finding appeared to be satisfactory to the plaintiff, as he moved for judgment in his favor; but the defendant filed two motions,-one that the plaintiff be ordered to accept the stock found to be due in mitigation of damages, and the other that a new trial be granted.

Hearing was had, and the court overruled the motions of the defendant and rendered judgment for the plaintiff in the sum of $7,641.72. Before doing so, however, the court adjusted the equities between the parties as follows: Interest in favor of the plaintiff was added to the sum found due by the jury as the value of the stock, and the court, deducting therefrom the counter-claim and interest set up by the defendant, rendered judgment for the balance.

Seasonable exceptions were filed by the defendant and he sued out the pending writ of error.

Numerous errors are assigned by the defendant, but in the view taken of the case it will not be necessary to give them a separate examination. Attention will be called to the substantial issues presented in the pleadings and to the material questions which arose in the progress of the trial and in the rendition of the judgment.

Both parties agree that the controversy grew out of a contract between them, and that the redress sought by the plaintiff is compensation for the alleged breach of it and the failure of the defendant to comply with its terms. Every pretence of conversion, therefore, may be dismissed in the outset without the least consideration, as there is nothing either in the cause of action, or the form of the remedy, or in the allegations of the complainant, or in the averments of the answer, or in the evidence introduced by either party, which gives such a theory any support whatever. Instead of that, the plaintiff set up the agreement and alleges that the defendant broke it, and he claims compensation for the damage he suffered from its non-performance by the defendant. Demand of performance is also alleged by the plaintiff, which is explicitly denied by the defendant, who avers in his answer that he was always ready and willing to perform to the full extent of his obligation under the agreement.

Neither the answer nor the evidence shows that the defendant ever did perform the agreement to deliver, but what he alleged and attempted to prove was that the plaintiff claimed $13,000 of stock more than he, the defendant, contracted to deliver, and his theory is that the demand being in excess of the obligation created by the contract, was null and of no effect, and inasmuch as the demand exceeded the right, he was not required to perform what the contract required.

Two issues of law were presented by the defendant in respect to the alleged demand: 1. That it must be in writing, and that an oral demand was insufficient. 2. That a request to deliver more property than the party is entitled to receive and a failure to deliver placed on that ground do not in law constitute a sufficient demand and refusal to sustain an action like the one before the court.

Had the contract contained the stipulation that the demand should be in writing, there would be much force in the suggestion; but inasmuch as the contract is silent upon the subject, the court is of the opinion that the ruling of the Circuit Court that it might be verbal or in writing is undoubtedly correct. Smith v. Young, 2 Dev. & Bat. (N. C.) 26.

Responsive to the second request, the judge told the jury that where a party demands more than he is entitled to receive, that that circumstance alone will not justify the other party in refusing to deliver that part of the property to which the party making the demand is entitled, provided it is distinct, well known, and clearly distinguishable from that to which the demanding party had no right; that if the plaintiff demanded $45,000 of the stock when he was only entitled, to $32,000 of the same, the defendant could not properly refuse to deliver what the plaintiff was entitled to receive, on the ground that the demand was excessive. Injustice and inconvenience would flow from any different rule, and inasmuch as we are all of the opinion that the instruction was correct, it is not deemed necessary to pursue the subject. 2 Greenl. Evid., sect. 604.

Matters of fact in the case need no examination, as they are found by the jury, and are not the subject of review in his court. Actual demand, it is conceded, was necessary to complete the cause of action, and the court is of the opinion that the demand was not vitiated because it was for too much, as the party of whom it was made was under no obligation to tender more than was due. Chitty, Contr. (10th ed.) 738. Both demand and refusal are established by the special verdict, which is all that need be said upon the subject.

Two other assignments of error deserve to be considered, and they may be examined together, as they involve the same question. They are as follows: 1. That the court erred in denying the motion of the defendant to require the plaintiffs to accept the stock tendered by the defendant to the plaintiff in open court in reduction of the damages. 2. That the court erred in rendering judgment for the full value of the stock in money, and in not applying the stock deposited in court in mitigation of damages, at its value as fixed by the jury.

Tender of the stock before breach of the condition or before the commencement of the action is not pretended, nor is it pretended that the defendant ever made a money tender of the debt due to the plaintiff, either before or after the action was commenced. Such a tender, if made before action brought and kept good, is a defence to the action, as the money to pay the debt remains in the court, and the party plaintiff is not entitled to prevail unless the sum tendered was insufficient, nor is it questioned that such a tender in a proper case, and payment of the money into court, may be made after action brought; but the rule is universal, that in that event the tender and the payment must include the costs to that time as well as the debt. Addison, Contr. (6th ed.) 954.

Authority undoubtedly exists in the defendant to tender the debt, if it is of a definite amount, before action brought; but it is equally well settled, even if it be large enough to pay the whole debt, that it is utterly nugatory after action brought, unless it also include a sum sufficient to pay the costs. Emerson v. White, 10 Gray (Mass.), 351; The People v. Banker, 7 How. (N. Y.) Pr. 258.

Exceptional cases may be found, but they arise in States where the matter is regulated by statute. Ashburn v. Poulter, 35 Conn. 553; Call v. Lothrop, 39 Me. 434; Rev. Stats. (Me.) 642; Gen. Stats. (Miss.) 671.

No such regulation has ever been adopted by the State in which this controversy arose, from which it follows that it must be governed by the general rules, which do not give the right of tender after action brought, except in the form and under the conditions before explained.

Concede that, and still it is insisted by the defendant that the court erred in refusing his request to order the plaintiff to accept the certificates of stock in mitigation of damages, which presents the principal question in the case.

Power to tender back the property in trover, where the gist of the action is conversion, is certainly vested in the defendant, and its exercise is a matter of frequent occurrence, where it appears that the property is in the same condition as when taken. Such a right may doubtless be exercised where the charge is conversion or a wrongful taking even after action brought, if it be accompanied with a tender of costs and intervening damages. Rutland & Washington Railroad Co. v. Bank of Middlebury, 32 Vt. 639; Kaley v. Shed, 10 Metc. (Mass.) 317.

There can be no manner of doubt that the defendant in actions of trover and trespass de bonis asportatis, in cases where the taking was not unlawful and the property is not essentially injured, will be allowed to surrender the property in specie in mitigation of damages. Hart v. Skinner, 16 Vt. 138; Fisher v. Prince, 3 Burr. 1363; Pickering v. Truste, 7 T. R. 54.

Courts, beyond doubt, may in a proper case, where the action is trover or trespass de bonis, order the plaintiff to accept the property in mitigation of damages against his wishes; and the rule is that the return of the property in such a case will reduce the damages to those actually sustained for the wrongful taking, together with intervening damages, and costs. Yale v. Saunders et al., 16 Vt. 243.

Orders of the kind are frequently given in actions of trover and trespass de bonis asportatis, but the practice is not applicable in actions of assumpsit for a breach of contract, the rule being that the party, if he desires to stop the litigation, must adopt the measure prescribed by the common law, except in jurisdictions where a different mode of proceeding is prescribed by statute.

Judgment affirmed.

title: Colby v. Reed/Opinion of the Court


text: Talk:Colby v. Reed/Opinion of the Court

title: Talk:Colby v. Reed/Opinion of the Court


text:
McBurney v. Carson

APPEAL from the Circuit Court of the United States for the District of South Carolina.

The facts are stated in the opinion of the court.

Mr. Edward McCrady for the appellants.

Mr. James Lowndes and Mr. Clarence A. Seward, contra.

MR. JUSTICE SWAYNE delivered the opinion of the court.

title: McBurney v. Carson


text: Talk:McBurney v. Carson

title: Talk:McBurney v. Carson


text:
McBurney v. Carson/Opinion of the Court

This case was before us at a former time. 19 Wall. 94. The decree of the Circuit Court was reversed, and the cause remanded for further proceedings. Such proceedings have been had, and it is again before us by appeal. A brief statement of the facts and of the further history of the case is necessary.

William Carson, of South Carolina, died in August, 1856, leaving a widow, Caroline, and two minor sons, William and James. He left considerable personal property, and a plantation known as Dean Hall. By his will he appointed Robertson and Blacklock his executors, and directed all his estate to be sold on such terms as they should deem proper. The proceeds, after the payment of his debts, were to be divided into three parts, to be held in trust by his executors. The interest of one-third was to be paid to the widow. The interest of the other two-thirds was to be devoted to the education and support of the two sons until they should come of age. The principal was then to be paid over to them.

The executors sold Dean Hall to Elias N. Ball, and took his bonds and mortgage for a part of the purchase-money. In 1863, Ball sold the property to Hyatt, McBurney, & Co., a firm consisting of Hyatt, McBurney, Gillespie, Hazletine, and McGhan. The conveyance was made to Gillespie and McBurney. The firm paid for the property in Confederate treasury notes. Out of the proceeds Ball paid his bonds to Robertson, and took them up and discharged the mortgage. Blacklock, the other executor, was then absent from the country, and upon his return refused to recognize the transaction. Hyatt sold his interest in the plantation to the other members of the firm, and Gillespie and McBurney gave him a lien upon it to secure the payment of the purchase-money. When the executors sold this property to Ball, they sold to him also a considerable amount of personal property on credit, and took his bond, with W. J. Ball as surety, for the price.

As the sons of the testator came of age they transferred their entire interest in the estate of their father to their mother. She filed the bill to set aside the cancellation of the mortgage upon Dean Hall as fraudulent and void, and to charge Elias N. Ball and his surety with the amount due upon their bonds given for the personal property. The bill did not make any member of the firm of McBurney & Co. a party, except McBurney. Hyatt, it appeared, was a resident of New York, of which State the complainant was also a resident and citizen. Elias N. Ball was made a party, but was not served with process. The Circuit Court decreed in favor of the complainant. This court held that Hyatt was not an indispensable party, as the decree would not affect his rights; but that Ball and Gillespie were such parties. The decree was therefore reversed, and the cause remanded for further proceedings.

After the cause was reinstated in the Circuit Court, the complainant filed an amended bill. In the mean time, Elias N. Ball had removed to the State of New Jersey, had there gone into bankruptcy, and Elias N. Miller had been appointed his assignee. Ball afterwards received his discharge and died. The defendants named in the bill were McBurney, McGhan, Gillespie, and Hazletine, being all the members of the firm of Hyatt, McBurney, & Co., except Hyatt, Robertson, and Black-lock, the executors, and Elias N. Miller, the assignee in bankruptcy of Ball. We hold, as we held before, that Hyatt is not an indispensable party. Hazletine could not be found. He was thereupon notified pursuant to the act of Congress of June 1, 1872 (17 Stat. 198, sect. 13). It is objected that the act could not apply to a suit pending when it was passed. It was not applied retrospectively, but only as to parties sought to be brought into the case more than a year after its passage. Such a result is consistent with its terms. There is no reason why it should not be so applied. It is a remedial statute, and should be liberally construed to accomplish the end in view. This construction is abundantly supported by well-considered authorities. Southwick v. Southwick, 49 N. Y. 510; Ex parte Lane, 3 Metc. (Mass.) 213; Holyoke v. Haskins, 9 Pick. (Mass.) 259; Rader v. Southeasterly Road, &c., 36 N. J. L. 273; Tilton v. Swift & Co., 40 Iowa, 78; People v. Mortimer, 46 Cal. 114; Cooley, Const. Lim. 381.

But as we held before, and still hold, that Hazletine was not an indispensable party, we forbear to pursue the subject further. He is sufficiently represented by his copartners, Gillespie and McBurney, in whom is vested the legal title of the Dean Hall property. Both of them appeared and answered. Miller, the assignee in bankruptcy of Ball and Gillespie, was ordered to appear and plead, answer, or demur to the bill. Both acknowledged service of the order. This brought them effectually before the court. In McBurney's answer he insisted that Miller, as assignee, and the facts of Ball's bankruptcy, discharge, and death, could be brought into the case only by a supplemental bill. The court thereupon ordered such a bill to be filed for that purpose, and it was filed accordingly. It made Miller alone a defendant. Here it has been insisted that all the other defendants to the amended bill should have been made parties to the supplemental bill also. To this objection it is a sufficient answer that it does not appear to have been taken below. It cannot, therefore, be taken here. Were we to hold otherwise, we should in this respect exercise original instead of appellate jurisdiction. There are other answers equally conclusive, but it is needless to consume time by adverting to them.

It is also objected that William Carson and James Carson, the sons of William Carson, deceased, had only a right of action, and that this right could not be transferred to the complainant. This is an inverted view of the subject. The bill charges fraud, conspiracy, and spoliation. If the charge is untrue, the bill should be dismissed. If otherwise, there is a recoil upon the wrong-doers, and those intended to be despoiled are unaffected. Their rights are just what they would have been if the scheme had been neither conceived nor executed. A different result would be a legal solecism.

All the obstructions are thus removed from our way to the examination of the merits of the case.

The last amended bill is silent as to the sale of the personal property, and the decree relates only to the bonds of Ball for the purchase-money of the plantation and the mortgage securing them upon that property. The decree charges upon the property the amount due on the bonds, and directs the mortgage to be enforced in all respects as if the bonds had not been surrendered and the mortgage had not been cancelled. McBurney and McGhan are the only appellants. Our further remarks will be confined to the subject of the decree.

The executors sold the property to Ball in the spring of 1857 for $50,000. He paid $15,000 down, and gave his bonds for the balance, secured by a mortgage upon the premises, as before stated. The property was valuable, and the amount due was well secured. The debt was payable only in lawful money of the United States, and the executors had no right to take any thing in payment but such money or its equivalent. Such was the condition of things in the spring of the year 1863.

The civil war was then flagrant in South Carolina. McBurney says, that having a large quantity of cotton on hand, and the city being blockaded, his firm 'were willing to change some of their investments into real estate until peace should be restored.' This was shrewd and wise. The sole currency there was Confederate money. The Dean Hall property lay invitingly before them, but was incumbered by a heavy mortgage for the benefit of the widow and the orphans. The plan was conceived of acquiring the title and getting rid of the mortgage, both by means of Confederate currency. They thus executed it: They gave Ball $100,000 in Confederate notes for the property, and took a conveyance from him. They placed a part of the Confederate money in his hands, as McBurney says, 'to enable him to pay off his bonds to said executors and to satisfy said mortgage.' Robertson received payment in this paper and thereupon gave up the bonds, and as soon as he could get access to the record entered satisfaction of the mortgage. He invested the notes in Confederate bonds, which became utterly worthless at the close of the war.

McBurney & Co. and the Carsons thus changed places. The former still hold the broad acres, while the latter have lost every dollar of their investment, so well secured at the outset upon the property. They became, as it were, the insurers of the fate of battles and of the result of war. There was evidently a plot. McBurney & Co. were its contrivers, Ball was their instrument, Robertson was their dupe, and the Carsons were the victims.

If the case stopped here we could not hesitate as to what our judgment should be. But in its strictly legal aspect it is equally free from doubt.

In Ward v. Smith (7 Wall. 451), this court held that a valid payment could not be made to an agent in the Confederate States during the rebellion in any thing but lawful money of the United States, or bank-notes of the current value of their face, without the consent of the creditor.

In Horn v. Lockart (17 id. 570), an executor had sold property, invested the proceeds in Confederate bonds, and his conduct had been approved and ratified by a decree of the Probate Court. It was held by this court that the investment was void, that the decree of the Probate Court was a nullity, and that the executor was liable to the distributees in good money for the full amount involved.

Fretz v. Stover (22 id. 198), in its most prominent features, is not unlike the case before us. There, a citizen of Pennsylvania, just before the breaking out of the war, took the bond of a citizen of Virginia, secured by a deed of trust upon real estate. The attorney of the creditor was the trustee in the deed. During the war the attorney received payment in Confederate notes, and Virginia bank-notes of no greater value, the entire capital of the bank having been converted into Confederate bonds. After the close of the war the creditor sued for his debt. This court adjudged that the transaction between the attorney and the debtor was illegal, fraudulent, and void, and decreed the enforcement of the bond and deed of trust.

The question has been raised whether Robertson acted, touching the bonds and mortgage of Ball, as executor or trustee. The matter is immaterial in this case. An executor guilty of a devastavit, whereby assets are diverted from their proper application, and a trustee guilty of a breach of trust, and their accomplices, if they have any, are held liable upon the same principle and to the same extent. Field v. Schrieffelin, 7 Johns. (N. Y.) Ch. 150; Hill v. Simpson, 7 Ves. 152.

There can, however, be no doubt upon the point suggested. 'Where the will contains express directions what the executors are to do, an executor who proves the will must do all which he is directed to do as executor, and he cannot say that though executor he is not clothed with any of those trusts.' 3 Williams, Executors, 1796.

Proving the will is an acceptance of the trust. Mucklow v. Fuller, Jacob 198. Where a trust is created by a will and no trustee appointed, 'the executor is bound to act as such trustee.' Holbrook v. Harrington and Others, 16 Gray (Mass.), 102. In such case the sureties in the bond of the executor are liable for his defaults, whether in one sphere of duty or the other. Newcomb v. Williams, 9 Metc. (Mass.) 525; Prior v. Tulbott, 10 Cush. (Mass.) 1; Door v. Wainright, 13 Pick. (Mass.) 328; Towne v. Ammidown, 20 id. 535.

Decree affirmed.

title: McBurney v. Carson/Opinion of the Court


text: Talk:McBurney v. Carson/Opinion of the Court


text:
Elliott v. Railroad Company

ERROR to the Circuit Court of the United States for the Eastern District of Pennsylvania.

This is an action of trespass on the case by the East Pennsylvania Railroad Company against William B. Elliott, collector of internal revenue for the first district of Pennsylvania. The jury returned a special verdict as follows:--

1. That the plaintiff is a railroad company, incorporated under the laws of the State of Pennsylvania, and having its principal office in the first United States internal-revenue collection district of said State at the date of the returns and payments hereinafter mentioned.

2. That the defendant was, at the date of the said payments, collector of internal revenue of the United States for the said district.

3. That on the eighteenth day of January, 1870, a dividend of $39,276, being three per cent on the capital stock of the said company, became due and payable, and was paid to the stockholders of the said company by the Philadelphia and Reading Railroad Company as rent for the railroad of the said plaintiff, payable for the preceding six months, under the provisions of a lease and contract dated May 19, 1869, whereby the railroad of the said plaintiff was leased to the Philadelphia and Reading Railroad Company, and the said rent was received and made payable directly by the latter company to the stockholders of the said company plaintiff, without the declaration of any dividend by the directors of the said company plaintiff.

4. That on the fifteenth day of December, 1871, the said company, in accordance with the requirement of the assessor for the said district, made a return (accompanied by a written protest), whereby it appeared that a tax of five per cent upon the said dividend ($39,276), with the sum of $2,067.16 (five per cent of a sum of which the said dividend is ninety-five per cent) added thereto, would amount to $2,067.16.

5. That a list containing said return was duly forwarded by the said assessor to the collector of internal revenue for the said district.

6. That on the twenty-ninth day of July, 1873, the said company paid the said sum of $2,067.16 to the said defendant, then collector as aforesaid, together with alleged penalties, amounting to $475.45 (viz. $103.36, five per cent on said tax, and $372.01, interest at the rate of one per cent per month from Jan. 1, 1872, to July 1, 1873), making in all the sum of $2,542.61; that said payment was made under compulsion, and was accompanied by a written protest of the company against its liability therefor.

7. That on the sixteenth day of January, 1872, a dividend of $39,276, being three per cent on the capital stock of the plaintiff, was paid to the holders of the shares of the said capital stock by the Philadelphia and Reading Railroad Company as rent for the preceding six months, under the provisions of the lease above mentioned.

8. That on the tenth day of January, 1872, the said company, in accordance with the requirement of the assessor for the said district, made a return (accompanied by a written protest), whereby it appeared that a tax of two and one-half per cent upon the said dividend ($39,276), with the sum of $1,007.08 (two and one-half per cent of a sum of which the said dividend is ninety-seven and one-half per cent) added thereto, would amount to $1,007.08.

9. That a list containing said return was duly forwarded by the said assessor to the collector of internal revenue for the said district.

10. That on the twenty-ninth day of July, 1873, the said company paid the said sum of $1,007.08 to the said defendant, then collector as aforesaid, together with the alleged penalties, amounting to $211.48 (viz. $50.35, five per cent on said tax, and $161.13, interest at the rate of one per cent per month from March 1, 1872, to July 1, 1873), making in all the sum of $1,218.56; that said payment was made under complusion, and was accompanied by a written protest of the company against its liability therefor.

11. That on the twenty-fifth day of September, 1873, the said company duly presented claims to the Commissioner of Internal Revenue of the United States for refunding the said sums of $2,542.61 and $1,218.56.

12. That on the sixth day of February, 1874, the said claims were rejected by the said Commissioner of Internal Revenue of the United States.

Judgment having been entered in favor of the company for '$686.93 (being the penalty of five per cent, and interest thereon at the rate of one per cent per month, as mentioned in said verdict), together with interest thereon from July 29, 1873, $183.64, in all, the sum of $870.57,' the collector brought the case here.

Mr. Attorney-General Devens and Mr. Assistant Attorney-General Smith for the plaintiff in error.

Mr. James E. Gowen, contra.

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

title: Elliott v. Railroad Company


text: Talk:Elliott v. Railroad Company

title: Talk:Elliott v. Railroad Company


text:
Elliott v. Railroad Company/Opinion of the Court

In Erskine v. Milwaukee & St. Paul Railroad Co. (94 U.S. 619), we decided that the only penalty to which a corporation was liable for default under sect. 122 of the internal-revenue act of June 30, 1864 (13 Stat. 284), as amended July 13, 1866 (14 id. 138), was that of $1,000, specially provided for in that section. We are now asked to review that ruling; but after a careful consideration of the elaborate arguments which have been submitted, we are satisfied that it was right. The language of the section to be construed is as follows: 'And for any default in making or rendering such list or return, with the declaration annexed, or of the payment of the tax as aforesaid, the company making such default shall forfeit as a penalty the sum of $1,000; and in case of any default in making or rendering said list or return, or of the payment of the tax or any part thereof as aforesaid, the assessment and collection of the tax and penalty shall be made according to the provisions of law in other cases of neglect and refusal.' In that case we were asked to hold that the company, in case of default, was liable for the penalty of five per cent and interest at the rate of one per cent a month, provided for in sect. 119, as amended (13 id. 283; 14 id. 480); but we decided that this provision applied only to cases of default in payment of the duties imposed by that section. The correctness of that ruling is now conceded; but it is claimed that the company is liable for a penalty of five per cent and interest at the rate of one per cent a month, under sect. 28 of the act of June 30, 1864, as amended July 13, 1866 (14 Stat. 106), sect. 11 of the act of July 13, 1866 (id. 150), and sect. 8 of the act of March 2, 1867 (id. 473). The last-named act simply provides that when for a failure to pay a tax at the time and in the manner provided by law a penalty of ten per cent additional upon the amount of the tax so due and unpaid had been exacted, the person or persons so failing or neglecting to pay the tax, instead of paying ten per cent, should pay five per cent and interest at the rate of one per cent a month. The sections of the other acts referred to were evidently intended to apply to taxes and duties included in the regular annual and monthly lists required by law to be made out and placed in the hands of collectors, and not to the taxes on interest and dividends collected through or from the corporations, under the provisions of sect. 122. Penalties are never extended by implication. They must be expressly imposed or they cannot be enforced. Full power is given in sect. 122, by reference to the other provisions of the internal-revenue law, for the collection of the tax and penalty there provided for; but it nowhere appears, by reference or otherwise, that it was the intention of Congress to add to the one penalty which is expressly given for the failure to do what that section requires. As has been said, it is conceded that the addition of five per cent and interest provided for in sect. 119 applies only to individual incomes. In this connection it is a noticable fact that although by sect. 8 of the act of March 2, 1867 (14 Stat. 473), a reduction was made from ten per cent to five per cent and interest at the rate of one per cent a month in all cases where a penalty of ten per cent had been imposed for any failure to pay any internal-revenue tax, it was deemed necessary in sect. 13 of the same act (id. 480) to amend sect. 119 specially, so as to reduce in the same way the additional percentage of ten per cent imposed by that section. If it had been supposed that the penalties prescribed in the other parts of the act for failure to pay taxes applied to taxes upon incomes, this special amendment would not have been necessary. But if they did not apply to sect. 119, it is difficult to see how they can to sect. 122. As it was supposed to be necessary to make express provision in sect. 119 for the payment of this additional percentage in order to charge the tax-payer, and it was omitted in sect. 122, the conclusion is irresistible, that it was the intention of Congress to impose no other penalty for a failure to comply with the requirements of this section than the one which is specifically given.

We see nothing in the act of July 14, 1870 (16 Stat. 260), under which a portion of the taxes paid by the defendant in error was assessed, to manifest any intention on the part of Congress to add to the penalties imposed by sect. 122 while that section was in force. The penalty of $1,000 is confined to a default in making the required return, instead of default in making the return or in making the payment, as it was in sect. 122. In other respects the provisions as to penalties in the two acts are substantially the same.

Judgment affirmed.


text: Talk:Elliott v. Railroad Company/Opinion of the Court


text:
Pence v. Langdon

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

The facts are stated in the opinion of the court.

Mr. C. K. Davis for the plaintiff in error.

Mr. William Lochren, contra.

MR. JUSTICE SWAYNE delivered the opinion of the court.

title: Pence v. Langdon


text: Talk:Pence v. Langdon

title: Talk:Pence v. Langdon