text:
Swan v. Arthur Fleitman/Opinion of the Court

Sect. 8 of the tariff act of June 30, 1864, c. 171 (13 Stat. 210), provides for the levy and collection of duties on imports, as follows:--

'On all dress and piece silks, ribbons, and silk velvets, or     velvets of which silk is the component material of chief      value, sixty per centum ad valorem. On silk vestings,     pongees, shawls, scarfs, mantillas, pelerines, handkerchiefs,      veils, laces, shirts, drawers, bonnets, hats, caps, turbans,      chemisettes, hose, mitts, aprons, stockings, gloves,      suspenders, watch chains, webbing, braids, fringes, galloons,      tassels, cords, and trimmings, sixty per centum ad valorem.

'On all manufactures of silk, or of which silk is the     component material of chief value, not otherwise provided      for, fifty per centum ad valorem.'

In one of the cases the importation was of laces, in another cigar ribbons, and in the other galloons and braids. The articles in each case were made of silk and cotton, but the silk preponderated so largely that they were substantially silk. The collector charged them with duties at the rate of sixty per cent ad valorem, as silk laces, ribbons, galloons, and braids, while the importers claimed they were dutiable at fifty per cent only, as manufactures of which silk was the component material of chief value, not otherwise provided for. These suits were brought to recover back what had been paid in excess of fifty per cent. In the cases for the laces, galloons, and braids the evidence was positive and uncontradicted to the effect that they were substantially made of silk, and there was no claim that they were commercially known otherwise than as silk goods. Upon these facts the court directed a verdict in favor of the defendant. In the case for the ribbons, the jury was instructed that if the goods were made substantially of silk, and were not commercially regarded as different from silk ribbons, a verdict must also be returned for the defendant. In the last case there was some evidence which, it was claimed, showed that the particular kind of ribbon imported had, by usage, been taken out of the commercial designation of silk ribbons. These writs of error have been brought to reverse the judgments which fllowed from these rulings.

We think the court below was right in the view it took of the law. While tariff acts are generally to be construed according to the commercial understanding of the terms employed, language will be presumed to have the same meaning in commerce that it has in ordinary use, unless the contrary is shown. Outside of commerce there can hardly be a doubt that laces, ribbon, galloons, and braids made substantially of silk would be denominated silk goods. Until, therefore, it was shown that they were regarded differently by dealers, it was right to class them as dutiable at sixty per cent. The burden of bringing them under the reduced rate was thrown on the importer. So far as the laces, galloons, and braids are concerned, there was no attempt to do so, and in respect to the ribbons the attempt that was made failed before the jury. We cannot believe that what are bought and sold in the market as dress o piece silks are not in commercial designation silks because they are to some extent adulterated with a cheaper fibre, if the silk so far predominates over the inferior material that it can be said they are made substantially of silk. If that is true of piece silks it certainly must be of laces, ribbons, galloons, and braids. So, in general, it may be said, as we think, that all goods made substantially of silk will be treated as silk commercially, unless it directly appears that commerce has given another name to the admixture.

Judgments affirmed.


text: Talk:Swan v. Arthur Fleitman/Opinion of the Court

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


text:
Kennedy v. Indianapolis

APPEAL from the Circuit Court of the United States for the District of Indiana.

The facts are stated in the opinion of the court.

The case was argued by Mr. Benjamin Harrison for the appellants, and by Mr. S.C.laypool and Mr. David Turpie for the appellees.

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

title: Kennedy v. Indianapolis


text: Talk:Kennedy v. Indianapolis

title: Talk:Kennedy v. Indianapolis


text:
Kennedy v. Indianapolis/Opinion of the Court

This is a suit in equity brought by the appellants to quiet title to certain lands in the city of Indianapolis. The facts are as follows: By an act of the General Assembly of Indiana 'to provide for a general system of internal improvements,' passed Jan. 27, 1836 (Rev. Stat. Ind., 1838, p. 337, sect. 4), the board of internal improvements was authorized and directed to construct, among other public works, the Central Canal, commencing at the most suitable point on the Wabash and Erie Canal between Fort Wayne and Logansport, running thence to Muncietown, thence to Indianapolis, and thence to Evansville on the Ohio River. For this purpose the board was authorized to enter upon, take possession of, and use any lands, necessary for the prosecution and completion of the work. Sect. 16. In all cases where persons felt aggrieved or injured by what was done, a claim could be made for damages, which were to be appraised in a way specially provided for, but in making the appraisement the benefits resulting to the claimant from the construction of the work were to be taken into consideration. Any sum of money thus found to be due was to be paid by the board, but no claim could be recovered or paid unless made within two years after the property was taken possession of. Sect. 17. The board was also authorized to acquire, by donation or purchase, for the State, the necessary ground for the profitable use of any water-power that might be created by the construction of the canal, and to lease, for hydraulic purposes, any surplus of water there might be over and above what was required for navigation. Sects. 22, 23.

The Constitution of the State, adopted in 1816, which was in force when this act was passed, and until all the rights of the State under it had been acquired, contains the following as art. 1, sect. 7: 'That no man's particular services shall be demanded, or property taken or applied to public use, without the consent of his representatives, or without a just compensation being made therefor.'

The town plat of Indianapolis was laid out on lands granted by Congress to Indiana for a seat of government. On this plat, as originally made, Missouri Street extended across the town from north to south, a distance of one mile. The board of internal improvements located the Central Canal in this street throughout its entire length. From the southerly end of the street the location extended in that direction across what was then known as outlots 121, 125, and 126. These lots were owned, 126 by one Coe, and the other two by Van Blaricum. During the year 1840 or before, the canal was actually built, filled with water, and to some extent navigated from Broad Ripple, a point on the west fork of the White River, about nine miles north of Indianapolis, to a lock in Missouri Street, at Market Street. From Market Street the canal was actually dug, and its banks built to another lock, a distance of a mile or more below; but it was never filled with water for the purposes of navigation, or, in fact, opened for navigation. The lower m .S. 601m lock would perhaps hold the water in the level above, but would not pass a boat below.

About the time this part of the work was finished, the whole project of completing the canal was abandoned, and has never since been resumed. Considerable work had been done on the line as a whole before the abandonment, but the only part ever opened for navigation to any extent whatever was that between Broad Ripple and the Market Street lock. The premises in controversy are between Market Street and the next lock below.

The State made a lease of water-power to be used at this lower lock, and for many years conducted the water to supply that lease through the canal as constructed below Market Street. No other use of the canal was ever made by the State for any purpose, and both the city and the owners of the several outlots have at all times been permitted to fence, bridge, and occupy the property as they pleased, provided they did not interrupt the flow of water to supply the power to a mill that had been built below.

Neither the town of Indianapolis nor Coe ever made any claim on the State for compensation on account of the appropriation of their property. Van Blaricum did, however, do so, and he prosecuted his claim until 1848, when it was finally decided against him. It is conceded that no damages were ever awarded him. The defendants, othe than the city of Indianapolis and the railroad company, are the owners of all the title to the outlots occupied by the canal which did not pass to the State under the appropriation that was made.

In 1850, the General Assembly of Indiana passed an act to sell the canal, and under the authority of that act all the part of the canal north of Morgan County, including the premises in controversy, was conveyed to one Francis N. Conwell for the sum of $2,425. From Conwell the title, such as he got, passed by sundry conveyances to the Water-works Company of Indianapolis. Afterwards that part of the premises south of Market Street, not being essential to the business of the Water-works Company, was sold to the Indianapolis, Cincinnati, and Lafayette Railroad Company.

Between 1872 and 1874, the city of Indianapolis, the legal successor of the town, took actual possession of Missouri Street below the Market Street lock, and used it for sewerage purposes, building a sewer therein and filling up the canal. About the same time McKernan, the ancestor of the present appellees of that name, filled up the canal on the outlots in question, and erected one or more houses thereon. This bill was filed by the mortgagees of the railroad company to quiet the title of the company to this property and protect their security. On the hearing the Circuit Court dismissed the bill for the reason that the appropriation by the State was not sufficient to divest the owners of their title, and consequently the railroad company took nothing by the conveyances under which it claims.

According to the later decisions of the Supreme Court of Indiana, when lands were taken by the State under the internal improvement laws, and just compensation made to the owners, the title in fee was transferred from the owner to the State. Water-works Company of Indianapolis v. Burkhart, 41 Ind. 364; Nelson v. Fleming, 56 id. 310. The earlier decisions were the other way. Edgerton and Others v. Huff, 26 id. 35. But, so far as we have been able to discover, it has never yet been held that the title passed out of the owner until 'just compensation' had actually been made. In fact, the decisions appear to have been uniformly to the effect that it did not. Thus, as early as 1838, in Rubottom v. McClure (4 Blackf. 505), it was said in reference to a statute, of which the one now under consideration is almost a literal copy, that it insured 'to any individual whose interest may have been made to yield to the public good, remuneration for his loss. Actual payment to him is a condition precedent to the investment of the title to the property in the State, but not to the appropriation of it to public use.' This was followed in 1846 by Hankins v. Lawrence, 8 id. 266. That was a case in which the White Water Valley Canal Company had acquired the title of the State to the White Water Canal, one of the works the board of internal improvements was authorized to construct under the act of 1836, and the question was whether it could, under its charter, enter upon lands to complete that canal, for the purposes of its incorporation, without first having made just compensation to the owner. Upon this the court said: 'The question whether payment must be made before the land is taken and used. . . has been already decided by this court. . . . The possession and use of the land in question by the White Water Valley Canal Company are upon the condition subsequent, that they will not be in default with respect to the payment for the same as prescribed by the charter, nor with respect to the erecting of the works for which the land is taken. It may be that, should any person claiming under the company remain in possession of the land after a default in such payment, or in erecting the works, he would be considered as a trespasser ab initio.' So far as we have been advised, these cases are still the law of Indiana, and they are certainly supported by high authority. Thus, in Rexford v. Knight (11 N. Y. 308), the Court of Appeals of New York, speaking of statutes similar to that of Indiana, says: 'The construction upon those acts has been that the fee did not vest in the State until the payment of the compensation, although the authority to enter upon and appropriate the land was complete prior to the payment.' And so, in Nichols v. ''Som. & Ken. Railroad Co''. (43 Me. 359), the Supreme Court of Maine, in speaking of an article of the Constitution of that State which declared that private property should not be taken for public uses without just compensation, uses this language: 'While it prevents the acquisition of any title to land or to an easement in it, and does not permit a permanent appropriation of it, as against the owner, without the actual payment or tender of a just compensation, it does not operate to prohibit the legislature from authorizing a temporary exclusive occupation of the land of an individual as an incipient proceeding to the acquisition of title to it, or to an easement in it for a public use, although such occupation may be more or less injurious to the owner. Such temporary occupation, however, will become unlawful, unless the party authorized to make it acquire, within a reasonable time from its commencement, a title to the land, or at least an easement in it.' And again, in Cushman v. Smith (34 id. 247): 'The design seems to have been simply to declare that private property shall not be changed to public property, or transferred from the owner to others for public use, without compensation.' Not to multiply cases further, it seems to us that both on principle and authority the rule is, under such a constitution as that of Indiana, that the right to enter on and use the property is complete as soon as the property is actually appropriated under the authority of law for a public use, but that the title does not pass from the owner without his consent until just compensation has been made to him.

We proceed now to apply this rule to the facts. It is not contended that compensation in money was made for any of the land in dispute. Van Blaricum claimed money, but the tribunal to which, under the statute, his application was referred decided against him. In effect he was told, in answer to his application, that the benefits he would receive from the construction of the canal would be 'just compensation' to him for his property taken. The town and the lot-owners adjoining Missouri Street made no claim for compensation. Neither did Coe, the owner of lot 126. In this way these parties signified under the law their willingness to take as their compensation the benefits which would result to them respectively from the construction of the c nal. The appropriation was for public use by means of a canal, and the owners were to be paid their compensation for the land taken by the construction of a canal thereon. It would seem to follow that if the canal was constructed the compensation which the Constitution guaranteed the owner would be made; otherwise not. If the canal was in law built, therefore, the title passed to the State; if not, it remained in the owner. The failure to claim damages within the two years was no more than a waiver of all compensation except such as grew out of the benefits resulting from the construction of the work for which the appropriation was made. To hold that the title passed by mere appropriation, if no claim for damages was made within the two years, would be in effect to decide that if the State entered on land for a particular use and kept possession as against the owner for two years, it got a title in fee whether the property was actually put to the use or not. Such we cannot believe to be the law.

Was there, then, such a canal constructed over and upon the lands in question as the internal improvement act, under which the appropriation was made, contemplated? A canal in the sense which that term implies in this connection means a navigable public highway for the transportation of persons and property. It must not only be in a condition to hold water that can be used for navigation, but it must have in it, as part of the structure itself, the water to be navigated ready for use. Such an instrumentality for 'the advancement of the wealth, prosperity, and character of the State' (Rubottom v. McClure, supra) might confer benefits that would be a just compensation for the private property taken for its use; but until such a structure is actually furnished complete, it can in no proper sense be said that the works have been constructed from which the benefits that are to make the compensation can proceed. A mill-race carrying water for hydraulic purposes is not enough. There must be a canal fitted in all respects for navigation and open to public use, before the benefits can accrue to the owner which are under the law to overcome his claim for damages. No authority was given the board of improvements to appropriate lands for the use of the water-power created by the canal. That could only be acquired by donation or purchase (sect. 16), and no power could be leased until there was a surplus of water. The canal was to be built for navigation. If when built there was found to be more water than was wanted as a means of transportation, it might be leased, but until there was a canal for navigation there was in law none for power. The use of the water for hydraulic purposes was but an incident to the principal object of the work to be done.

There can be no pretence that this canal was ever navigated below Market Street, or put in a condition for navigation. It was accepted from the contractor, and may have had all its banks and its bed complete; but it is evident from the testimony that it was never finished so that it could be actually used as a navigable canal, and it certainly was never opened by the State to public use in that way. More work had been done on it than on some other parts of the line, but still it was unfinished when the abandonment of the enterprise took place.

We are aware that in the case of the Water-works Company v. Burkhart, supra the Supreme Court of Indiana decided that the title to the land then in dispute had passed from the owner to the State, but that was on the level above Market Street, which had been not only made navigable but had actually been to some extent navigated. The owner, too, had been awarded and paid damages in money. So in Nelson v. Fleming, supra, the canal was completed and had been in actual use by the public as such for a period of between thirty and forty years before the abandonment occurred. In both these cases, according to the rule that has been stated, the compensation was actually made and the title passed. There the qu stion was one of reversion after title once acquired. Here, as we think, the State never got title, since the requisite compensation was never made. Consequently, the State had no title to this property to convey, and the railroad company took nothing by its purchase. It follows that the decree below was right, and it is consequently

Affirmed.


text: Talk:Kennedy v. Indianapolis/Opinion of the Court


text:
Babbitt v. Clark

APPEAL from the Circuit Court of the United States for the Northern District of Ohio. $yThe facts are stated in the opinion of the court.

Mr. John C. Lee for the appellant.

Mr. Isaac C. Pugsley for the appellees.

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

title: Babbitt v. Clark


text: Talk:Babbitt v. Clark

title: Talk:Babbitt v. Clark


text:
Babbitt v. Clark/Opinion of the Court

This suit was brought by Parker P. Clark, George H. Clark, Elijah F. Clark, and George P. Burnett, the appellees, citizens of New York, in the Court of Common Pleas of Lucas County, Ohio, against Albert T. Babbitt, the appellant, a citizen of Wyoming Territory. By the statutes of Ohio regulating practice and pleadings in the courts of that State, a civil action is commenced by filing a petition in the office of the clerk of the proper court, and causing a summons to be issued thereon. Rev. Stat., Ohio (1880), sect. 5035. The summons is ordinarily returnable the second Monday after its date. Id., sect. 5039. The only pleadings are, a petition, demurrer, answer, and reply. Id., sect. 5059. The rule-day for the answer or demurrer to a petition is the third Saturday, and for a reply to the answer the fifth Saturday, after the return-day of the summons; but the court, or a judge thereof in vacation, may for good cause shown extend the time. Id., sects. 5097, 5098. Every material allegation of the petition not controverted by the answer, and every material allegation of new matter in the answer not controverted by the reply, is for the purposes of the action to be taken as true, but the allegation of new matter in the reply is deemed controverted by the adverse party. Id., sect. 5081. When the action is founded on a written instrument as evidence of indebtedness, a copy thereof must be attached to and filed with the petition. Id., sect. 5085. A trial is defined to be 'a judicial examination of the issues, whether of law or fact, in an action or proceeding.' Id., sect. 5127. And all actions are triable as soon as the issues therein, by the time fixed for pleadings, are, or ought to have been, made up. Id., sect. 5135.

The petition in this action was filed on the 28th of October, 1878, and alleged that on the 10th of June, 1878, the plaintiff recovered judgment in the Court of Common Pleas of the City, County, and State of New York, against Babbitt and one Edgar A. Weed for $2,626.80 debt and costs, which was in full force and unsatisfied, except 'by the following payments, to wit, one of $311.92, and a further payment of $887.50 made, to wit, Oct. 1, 1878.' Judgment was asked for the balance which remained unpaid, and interest at seven per cent. From the record of the New York suit found in the transcript sent up on this appeal, it appears that the action in that court was brought Aug. 7, 1877, to recover a debt for goods sold Babbitt & Weed, Feb. 8, 1877, which it was alleged had been created by the fraud of Babbitt. The answer, which was by Babbitt alone, admitted that the debt had been contracted, but denied the fraud. It then alleged by way of defence, that on the 7th of July, 1877, proceedings in bankruptcy were instituted against Babbitt and Weed in the District Court of the United States for the Northern District of Ohio, which resulted in the acceptance by the creditors of the bankrupts and an approval by the court of a proposition for composition under sect. 17 of the act of June 22, 1874, c. 390 (18 Stat., pt. 3, p. 182), by which the bankrupts were to give their notes indorsed by T. S. Babbitt to their several creditors for forty cents on the dollar of their debts, divided into three equal parts, and payable in three, six, and nine months, respectively, fro July 15, 1877, and that notes for the several amounts due the plaintiffs, according to the terms of the composition, were executed and tendered them in proper time, and ever since had been and were subject to their order and disposal. Upon the issue thus made a trial was had, which resulted in the judgment now sued on.

The summons in the present action bears date Dec. 4, 1878, and Jan. 4, 1879, at rules, Babbitt filed his answer, in which he denied that the several payments credited on the judgment in the petition were made by himself or Babbitt & Weed, but averred that the item of $311.92 was collected by a sale of property on execution, and that of $887.50 was paid the plaintiffs by John R. Osborn, a register in bankruptcy. He then set forth the proceedings in bankruptcy and the composition, substantially as stated in his answer in the New York suit. He then alleged that the composition notes intended for the plaintiffs were paid to Osborn, the register in bankruptcy, as they matured, and that on the 11th of September, 1878, the plaintiffs took from the register the money in his hands for them, with a full knowledge of all the facts.

The rule-day for a reply to this answer was Jan. 18, 1879, but no reply was filed at that time, and no extension of time was asked or given.

The cause, therefore, under the law regulating the practice of the court, stood for trial on the issues presented by the petition and answer. A term of the court began on the 2d of January, and did not end until the 7th of April, though nothing but formal business was done after March 24.

On the 3d of April the plaintiffs filed in the clerk's office a reply without leave of the court, and without notice to Babbitt or his counsel. In this reply the facts in relation to the New York suit are set forth substantially as they appear on the record sued on, and it was insisted that the acceptance of the money from the register in bankruptcy did not operate in law as a satisfaction of the judgment. The next term of the court began on the 28th of April, and on the 3d of May the plaintiffs, also without leave of the court, filed an amendment to their reply, in which they set out certain unsuccessful proceedings by Babbitt in the New York court on the 5th of July, 1878, to obtain an injunction against the further execution of that judgment because of his payment of the composition notes to the register in bankruptcy.

On the 17th of May, which was during the term of the court that began on the 28th of April, and before the cause had ever been called for trial, Babbitt filed his petition to remove the suit to the Circuit Court of the United States for the Northern District of Ohio, on the ground that his defence, 'which was made by answer filed in due time,' was 'one arising under the Constitution and laws of the United States.' The State court ordered the suit transferred, but the Circuit Court on motion remanded it because the petition for removal was not filed in time. To reverse that order the case has been brought here by appeal.

It is insisted that we have no jurisdiction,-1, because an order of a circuit court remanding a cause to a State court on the ground that the petition for its removal from that court had not been presented in time, is not reviewable here either on writ of error or appeal; 2, because, if reviewable at all, this case should have been brought here by writ of error rather than appeal; and, 3, because the value of the matter in dispute does not exceed $5,000.

Before the act of 1875, c. 137 (18 Stat. 470), we held that an order by the Circuit Court remanding a cause was not such a final judgment of decree in a civil action as to give us jurisdiction for its review by writ of error or appeal. The appropriate remedy in such a case was then by mandamus to compel the Circuit Court to hear and decide. Railroad Company v. Wiswall, 23 Wall. 507; Insurance Company v. Comstock, 16 id. 258. But the fifth section of that act provides that if it satisfactorily appears to the Circu t Court that a suit has been removed from a State court which does not really and substantially involve a controversy properly within the jurisdiction of the Circuit Court, it may be remanded, and the order to that effect shall be reviewably by this court 'on writ of error or appeal, as the case may be.'

The appellees contend that the right of appeal or writ of error which is here given applies only to cases which are remanded because the subject-matter of the controversy is not one within the jurisdiction of the Circuit Court. The language of the statute might be more explicit in this particular than it is; but we think it may fairly be construed to include a case where the Circuit Court decides that the controversy is not properly within its jurisdiction because the necessary steps were not taken to get it away from a State court, where it was rightfully pending. The right to remove a suit from a State court to the Circuit Court of the United States is statutory, and to effect a transfer of jurisdiction all the requirements of the statute must be followed. If this is done, the controversy is brought properly within the jurisdiction of the Circuit Court, and may be lawfully disposed of there; but if not; the rightful jurisdiction continues in the State court. When, therefore, the Circuit Court decides that a controversy has not been lawfully removed from a State court, and remands the suit on that account, it in effect determines that the controversy involved is not properly within its own jurisdiction. The review of such an adjudication is clearly contemplated by the act of 1875.

We think, also, this right of review has been given without regard to the pecuniary value of the matter in dispute. There is no pecuniary limit fixed to our jurisdiction in the act of 1875 itself. Final judgments and decrees in the circuit courts in civil actions cannot ordinarily be brought here for review unless the value of the matter in dispute exceeds $5,000 (Rev. Stat., sects. 691, 692; 18 Stat. 315, c. 77, sect. 3); but an order of the Circuit Court remanding a removed suit to the State court is in no just sense a final judgment or decree in the action. It simply fixes the court in which the parties shall go on with their litigation. Under the old law there was no pecuniary limit to our jurisdiction to proceed in this class of cases by mandamus, and we think it was the intention of Congress to substitute appeals and writs of error for that mode of proceeding. If the new remedies are found to be productive of vexatious delays on account of the great accumulation of business in this court, it will be easy for Congress to do away with the evil by a repeal of the law. It follows that if the order in question could properly be brought here by appeal, we have jurisdiction.

Congress evidently intended that orders of this kind made in suits at law should be brought here by writ of error, and that where the suit was in equity an appeal should be taken. That is the fair import of the phrase, 'writ of error or appeal as the case may be.' This was a suit at law, and consequently should have been brought up by writ of error. There seems to have been very little attention paid to this distinction heretofore, and we now find that we have often considered cases on writ of error that ought to have been presented by appeal, and on appeal when the proper from of proceeding would have been by writ of error. No objection was made, however, at the time, and we did not ourselves notice the irregularity. Without deciding whether we would reverse the order of a circuit court if objection were made when the case was brought up in a wrong way, we are not inclined to delay a decision on the merits in this case because of the irregularity which appears, as we think the suit was properly remanded, and the order to that effect should be affirmed.

The act of 1875 requires that the petition for removal shall be filed in the State court at or before the term at which the suit could be first tried and before the trial. The answer of Babbitt n this case was filed in time, and the rule-day for a reply expired on the 18th of January. Had the case been called at any time after that date and before April 3, neither party could have objected to a trial on the pleadings as they then stood. As no reply had been filed, the new facts set out in the answer would have been taken as true, and the rights of the parties determined accordingly. The case arising under the Constitution and laws of the United States was presented by the answer, and the right of Babbitt to his removal was as apparent then as now. It needed no reply to put his case in a condition for judicial examination. His answer required the court to determine whether in law, with all the facts set out and uncontroverted, his composition in bankruptcy presented a valid defence to the judgment sued on. The pleadings presented, to say the least, an issue of law to be tried.

It is true that after the court had substantially closed the business of the term, and had stopped the trial of causes, a reply was put on file without leave, which was supplemented the next term, also without leave, and that in this way the issues as they originally stood may have been to some extent changed; but that does not, in our opinion, relieve Babbitt from the consequences of his delay. The act of Congress does not provide for the removal of a cause at the first term at which a trial can be had on the issues, as finally settled by leave of court or otherwise, but at the first term at which the cause, as a cause, could be tried. Under sect. 12 of the act of 1789, c. 20 (1 Stat. 79), the application for removal must have been made by the defendant when he entered his appearance, but under the acts of 1866, c. 288 (14 Stat. 306), and 1867, c. 196 (id. 558), it might be effected at any time before trial. This was the condition of existing legislation when the act of 1875 was passed, and the language of that act shows clearly a determination on the part of Congress to change materially the time within which applications for removal were to be made. It was more liberal than under the act of 1789, but not so much so as in the later statutes. Under the acts of 1866 and 1867 it was sufficient to move at any time before actual trial, while under that of 1875 the election must be made at the first term in which the cause is in law triable.

Clearly, under the laws of Ohio, this case was in a condition for trial, and actually triable, more than two months before the January Term closed. It follows that the presentation of the petition for removal at the next term was too late, and the order of the Circuit Court remanding the cause on that account is consequently

Affirmed.

title: Babbitt v. Clark/Opinion of the Court


text: Talk:Babbitt v. Clark/Opinion of the Court


text:
Hoyt v. Sprague Francklyn

APPEALS from the Circuit Court of the United States for the District of Rhode Island.

The facts are stated in the opinion of the court.

Mr. William Allen Butler and Mr. George F. Comstock for the appellants.

Mr. Charles Thurston and Mr. Benjamin F. Thurston, contra.

MR. JUSTICE BRADLEY delivered the opinion of the court.

title: Hoyt v. Sprague Francklyn


text: Talk:Hoyt v. Sprague Francklyn

title: Talk:Hoyt v. Sprague Francklyn


text:
Hoyt v. Sprague Francklyn/Opinion of the Court

These cases come up on appeal from the decrees of the Circuit Court for the District of Rhode Island dismissing the complainants' bills. One of the bills was filed by William S. Hoyt and the other by Charles G. Francklyn and Susan his wife, against Amasa Sprague, William Sprague, individually, and as guardian of the said Hoyt and said Susan; Fanny Sprague, widow and administratrix of Amasa Sprague, Sen.; Mary Sprague, widow and administratrix of William Sprague, Sen., and formerly guardian of said Hoyt and said Susan; The A. & W. Sprague Manufacturing Company, and Zechariah Chafee, assignee of said company for the benefit of creditors, &c. The general object of the bills is, to establish a lien and trust in favor of the complainants, as grandchildren of William Sprague, Sen., against the property of the A. & W. Sprague Manufacturing Company, now in the hands of h afee, the assignee, each to the extent of one twenty-fourth part of the whole property; that being the amount of their interest in the property of the former firm of A. & W. Sprague, which was transferred to the corporation in 1865, whilst the complainants were infants, in fraud, as they allege, of their rights.

Many charges of fraud are made in the bills against the defendants Amasa Sprague and William Sprague, who carried on the business of the firm after the death of William Sprague, Sen., in 1856, in connection with Byron Sprague, until 1862, and after that by themselves. The cases are substantially the same in all respects, and will be considered together.

In order properly to understand the questions raised it will be necessary to take a summary view of the facts.

Amasa Sprague and William Sprague, brothers, under the name of A. & W. Sprague, carried on the manufacturing business in Rhode Island until 1843, when Amasa died, leaving a widow, Fanny Sprague, and four children, two sons and two daughters. The widow took out letters of administration on her husband's estate. The value of the partnership property at that time was estimated at $100,000. William continued to carry on the business with the joint capital, under the same firm name, for the benefit of himself and his brother's family, for thirteen years, when, on the 19th of October, 1856, he died, leaving a widow, Mary Sprague, a son, Byron Sprague, and four grandchildren, who were the children of a deceased daughter, Susan, and her husband, Edwin Hoyt, of the city of New York. These children were at that time under fourteen years of age. Their names were Sarah, Susan S., William S., and Edwin Hoyt, Jr. Sarah was twelve, Susan eleven, and William S. was nine years old at the time of their grandfather's death. William S. Hoyt is the complainant in one of the cases now under consideration, and Susan S. Hoyt, now wife of Charles G. Francklyn, with her husband, is complainant in the other case.

William Sprague largely extended the business of the firm, so that when he died the property, real and personal, was estimated at about $3,000,000. Shortly before his death, and during his last illness, he took into partnership with him, evidently for the purpose of continuing the business and keeping it together, his own son, Byron, and his two nephews, Amasa and William, the sons of his deceased brother Amasa. The terms of this partnership, and the interest which the young men were to have in it, does not appear. They continued, after William Sprague, Sen.'s, death, to carry on the business, as it had previously been carried on, under the name of A. & W. Sprague, without making a settlement with the representatives or beneficiaries of either Amasa Sprague's or William Sprague's estate.

William Sprague, Sen., left no will; and his widow, Mary Sprague, took out letters of administration on his estate. Whilst, therefore, the three young men, Byron Sprague, Amasa Sprague, and William Sprague, as surviving partners of William Sprague, Sen., carried on the business of the firm of A. & W. SPRAGUE, THE PERSons really interested were, first, the two widows and administratrixes, Fanny Sprague and Mary Sprague, who were legally entitled respectively, by right of administration, to the several interests of Amasa Sprague, Sen., and William Sprague, Sen.; and, secondly, the beneficiaries, or distributees of the estates of Amasa and William, respectively, namely, the widow and four children of Amasa Sprague, Sen., and the widow and two children of William Sprague, Sen.,-one of the latter, Mrs. Hoyt, being deceased, and being represented by her four children.

One of the daughters of Amasa Sprague had been settled with before William's death, and the other shortly afterwards, by her brothers purchasing her interest. This left the beneficial interest of the property divisible into six equal parts, belonging respectively to Fanny Sprague, widow of Amasa, and her two sons, Amasa and William, and Mary Sprague, widow of William, her son Byron, and h e children of her daughter, Susan Hoyt. These persons were all of age, and otherwise sui juris, except the Hoyt children, and were all able to consent, and did consent, that the entire partnership estate should be continued in the business of the firm as it had been before. The Hoyt children, of course, could not give any such consent. They resided with their father, Edwin Hoyt, in New York, who was at the head of a commission-house in that city by the name of Hoyt, Spragues, & Co., which sold on commission a large portion of the goods manufactured by A. & W. Sprague. The partners of the firm were associated with him. Of course he must have been well acquainted with the business of the manufacturing establishment, and the large interest which his children had in the concern must have insured his attention to its management. Mr. Hoyt consented to and approved of the continuance of his children's portion in the business of the partnership; and his natural regard for their interests, in connection with his opportunities for observation, preclude the presumption that such continuance was the result of any fraudulent scheme. Had any such scheme been in contemplation, he must have detected and would have thwarted it.

In addition to the consent and acquiescence of their father. was that of their property guardian in Rhode Island. On the 9th of February, 1857, shortly after William Sprague, Sen.'s, decease, letters of guardianship were issued by the Probate Court of the town of Warwick, R. I., to Mary Sprague, grandmother of the Hoyt children, on the property of said children. Mrs. Sprague consented that both her own interest in the estate and that of her grandchildren and wards should be continued in the partnership business. At that time (1857) this business was no doubt regarded by most persons who had any acquaintance with it as highly prosperous, and an investment in it advantageous and safe. And whilst, according to the strict rules of law, Mary Sprague should have drawn out the children's share, and should not have left it to the hazards of trade, it may be said in her excuse that she was following out the plan of her husband, who had for thirteen years induced his brother's widow to continue the interest of her children in the concern, and had thereby greatly increased their inheritance. At all events, we have no evidence that Mary Sprague was actuated by any other than the most worthy motives in permitting everything to remain in the business. Any charge of fraud against her cannot be entertained for a moment.

The business was conducted without change until 1862, when Byron Sprague sold out his interest to Amasa and William, and upon an account taken at that time said interest was valued at $605,722.78, which amount was accordingly paid to him. No other change in the situation of the parties interested took place until 1865, when it was proposed to place the property of A. & W. Sprague in a corporation, or corporations, charters having been obtained from the legislature of Rhode Island for that purpose. One of these charters was passed in May, 1862, and constituted Byron Sprague, William Sprague, and Amasa Sprague, and their associates, successors, and assigns, a body corporate and politic by the name of A. & W. Sprague Manufacturing Company, with a capital stock of $1,000,000, to be divided into shares of $100 each.

In view of such proposed corporate organization, Mary Sprague, as guardian of her grandchildren, and Edwin Hoyt, their father, in January, 1863, presented a petition to the legislature of Rhode Island, in which, after stating the appointment of Mary Sprague as the guardian of the estate of said minors, and their interest in the property of A. & W. Sprague, they stated that they deemed it advisable to invest the same in such corporations as should be organized under the charters previously granted; and they asked that the said Mary, as such guardian, might be authorized to make such conveyance as would be necessary to that end. On the 9th of March, 1863, a joint resolui on of the legislature was passed, granting said petition, which resolution was in the following terms:--

'Resolution authorizing Mary Sprague, of Warwick, guardian,     to make conveyance of the interest of minors in and to the      property of the firm of A. & W. Sprague.

'Upon the petition of Mary Sprague, of Warwick, widow of     William Sprague, late of Warwick, deceased, and of Edwin      Hoyt, of the city and State of New York, representing that      the said Mary is guardian of the estates; and the said Edwin,      father of Edwin Hoyt, Jr., Susan S. Hoyt, Sarah Hoyt, and      William S. Hoyt, minor children and heirs-at-law of Susan      Hoyt deceased, and praying, for certain reasons, that the      said Mary may be authorized and empowered to make conveyance      in her said capacity, of all the right, title, and interest      of said minor children, as heirs-at-law of their said mother,      in and to all the estate and property, real, personal, and      mixed, now held, owned, and managed by the firm of A. & W.      Sprague of Providence:

'Voted and resolved, that the prayer of said petition be and     the same is hereby granted; and the said Mary Sprague, in her      capacity as guardian of the estate of Edwin Hoyt, Jr., Susan      S. Hoyt, Sarah Hoyt, and William S. Hoyt, is hereby      authorized and fully empowered, whenever any corporation or      corporations shall be organized under either or any of the      charters heretofore granted by the General Assembly of this      State, and conveyance or conveyances shall become necessary      to vest the title of the parties interested in any of said      property so held, owned, or managed by the firm of A. & W.      Sprague, in any such corporation or corporations, to make,      execute, seal, acknowledge, stamp, and deliver all and any      such conveyance and conveyances to any such corporation or      corporations as shall be necessary to vest the right, title,      and interest of the said minors in and to said property, or      any portion thereof, in any such corporation or corporations; and that any such conveyance or      conveyances so executed, acknowledged, stamped, and delivered      shall be deemed and held as valid and effectual in law and in      equity to vest the title of said minors in any such      corporation or corporations as though the same were executed,      acknowledged, stamped, and delivered by said minors after      attaining their majority.

'Provided, that before the delivery of any such conveyance or     conveyances, the said Mary shall have executed and delivered      to the Court of Probate of Warwick every such bond or bonds      with herself in her said capacity, and said Edwin Hoyt, as      principals, in such penal sum or sums and with such sureties      as said probate court shall require, conditioned for the      investment of the amount of the full value of the interests      of said minors, which she shall then be about to convey in      the capital stock of any such corporation or corporations to      which the same shall be conveyed, in the names and for the      use and benefit of said minors.'

Further, in view of the proposed corporate organization, steps were taken by the parties in interest to ascertain the value of the partnership assets, and the relative interest of each shareholder. For this purpose an agreement was entered into on the first day of April, 1865, between all the parties, Fanny Sprague signing individually and as administratrix of Amasa Sprague; Mary Sprague signing individually and as administratrix of William Sprague and as guardian of her grandchildren; and the other parties signing in their own behalf: by which it was agreed that John A. Gardner and Benjamin F. Thurston, the former of whom had been counsel for Amasa Sprague and William Sprague, and the latter counsel of Mary and Byron Sprague, should be, and they were, appointed referees to examine into the entire assets and property of the firm, and to ascertain the value thereof, and each party's interest therein, and should make report of the result. The referees accordingly made such examination, and made their report on the first day of July, 1865, by which they reported and found that the cash value of the entire estate, exclusive of the Quidnick factory (which was estimated by itself, and

was transferred to a separate corporation),

was ............................. $6,732,906

That there were liabilities to amount of. . . . 2,871,921

Leaving the net value of the estate equal to. . . .3,860,984 90 And after adjusting the accounts of the parties they found—

Mary Sprague's interest was..... $624,984

Fanny Sprague's interest......... 625,511

William Sprague's interest....... 978,867

Amasa Sprague's interest......... 978,867

Mary Sprague, guardian of the children of Susan

Hoyt............................ 652,753

Due to Mary Sprague, as administratrix of her

husband, on account of a dividend. 164,250

Making a total of.............$4,025,235

This amount formed the capital stock of the corporation subsequently organized, and was represented by the nominal capital of $1,000,000, making each share equal to over $402. The proportions of William and Amasa were larger than the others, because they had purchased the share of Byron.

The referees, also found due from the firm to Mary Sprague, as guardian of the Hoyt children, the sum of $188,333.33, explained to have been a balance credited to them to equal what the two families in Rhode Island had drawn out of the concern for current expenses.

The Quidnick property, which, as before stated, was kept separate from the rest on account of other persons being interested therein, was appraised in the same way as the A. & W. Sprague property, for the purpose of being transferred to a distinct corporation. The interest of the Hoyt children therein was appraised at $63,353.23.

The appraisement having been completed, Mary Sprague, as guardian of the Hoyt children, on the 5th of August, 1865, after advertising her intent so to do, presented her bond to the Probate Court of Warwick for approval, as required by the joint resolution of March 9, 1863, and prayed authority from the court to transfer the interest of her wards to the A. & W. Sprague Manufacturing Company, as authorized by said resolution; and also prayed like authority to transfer the interest of the minors in the Quidnick property to the Quidnick Manufacturing Company.

A decree was made granting the prayers of the petition and conferring the powers desired.

Thereupon, on the ninth day of August, 1865, all the parties in interest joined in a conveyance of the entire partnership property of the firm of A. & W. Sprague to the A. & W. Sprague Manufacturing Company; and the property of the Quidnick firm to the Quidnick Manufacturing Company; and each party became entitled to their several proportions of the shares of capital stock in those companies respectively. In executing the deed of conveyance Mary Sprague signed in her individual capacity, as administratrix of her husband's estate, and as guardian of the Hoyt children.

In the August Term, 1866, of the Probate Court of Warwick, appraisers were appointed to take an inventory and appraisement of the property of the several wards of Mary Sprague in her hands, and they performed their duty, and said inventories, verified by the oath of Mary Sprague, were filed and recorded, after being passed upon by the court. They amounted to the sum of $251,447.08 each. That of William S. Hoyt was composed of the following items, namely:--

1 U.S. 6-per-cent bond.............. 108

2 N. Y., Prov., & Boston R. R. bond, $950. 1,900

439 shares A. & W. Sprague M'f' Co., 402, 5,225. 176,707

123 shares Quidnick Co. stock, 155, 213. 19,091

Cash................................. 334

---

$204,363

Dividend due from A. & W. Sprague as cash, March 31,

$251,447

The others were nearly identical with this.

The dividend of $47,083.33 was William S. Hoyt's one-fourth part of the sum of $188,333.33 awarded to the Hoyt children as an offset to the sums drawn out by the Rhode Island families for current expenses.

At the same term Mary Sprague presented an account a guardian of each ward, which being verified, and due notice having been published, was received and allowed by the court, and ordered to be recorded.

Sarah Hoyt having now arrived at full age, received the amount of her interest and gave and acquittance for the same.

At the same term of the court, on the petition of Mary Sprague, and her resignation of the guardianship of the three remaining minors, and on the written application of Edwin Hoyt, and due notice given, Mary, Sprague was discharged from the guardianship, and William Sprague was appointed guardian in her stead. The same appraisers were appointed to make an inventory and appraisement of the property of each ward in the hands of William Sprague, guardian; and such inventory and appraisement were duly made, filed, and recorded; showing that the estate of William S. Hoyt amounted, on the first day of September, 1866, to the sum of $255,885.04, consisting of the items before mentioned, with the addition of another dividend of the companies.

The estate of Susan S. Hoyt amounted to about the same sum.

Susan S. Hoyt came of age in October, 1866, and William S. Hoyt in January, 1868; and Susan married Charles G. Francklyn in 1869.

The evidence in the case exhibits several annual accounts rendered by William Sprague, as guardian to the complainant W. S. Hoyt, after he came of age, in 1870, 1871, 1872, and 1873. These accounts show on the credit side the money due and accruing to the complainant, including the sum of $47,083.33 before mentioned, and the dividends made from time to time on the stocks of the A. & W. Sprague Manufacturing Company, the Quidnick Manufacturing Company, and on the bank and other stocks in the guardian's hands. On the debit side they show the moneys drawn by and paid to the complainant, amounting, from the date of Mr. Sprague's appointment as guardian in 1866, to Oct. 31, 1870, to the sum of $5,282.45:--

thence to Oct., 1871............. $8,606

to Oct., 1872.............. 18,500

to Oct., 1873............... 5,000

Leaving a balance still in the guardian's hands of $63,905.18, besides the stocks and bonds forming the corpus of the estate in ward.

William S. Hoyt, some time in 1873, received his stocks and interest in the Quidnick Company, and makes no complaint in regard to the same.

A number of letters of the complainant, asking for, and acknowledging the receipt of, money from his guardian, after coming of age, were put in evidence. One of these, dated Nov. 9, 1870, was directed to Mr. Greene, book-keeper of the A. & W. Sprague Manufacturing Company, asking for a memorandum of the bank stock, shares, and whatever there might be belonging to him. In his testimony the complainant states that this information was furnished to him. A similar statement had been furnished to Mrs. Francklyn in March of the same year; and annual accounts were rendered to her from October, 1869, to October, 1873.

In the fall of 1873, Hoyt, Spragues, & Co. and the A. & W. Sprague Manufacturing Company suspended payment, and the latter, by deed of assignment dated Nov. 1, 1873, assigned to Zechariah Chafee all its property, in trust for the benefit of creditors,-in which deed Amasa and William Sprague, and Fanny and Mary Sprague also joined. In April, 1874, a more full assignment was made.

The bills in this case were filed in June and July, 1875, and their general object has already been stated. They respectively state most of the facts of which the foregoing is an outline; but interlarded with reiterated charges of fraudulent design and concealment on the part of the Spragues: whereby, as is alleged, the complainants were kept in ignorance of their rights and of the state of their property, and the transformations under which it went, until shortly before the filing of the bill.

The defendants severally answered the bills, denying all fraudulent motives and any intentional concealment; averring that they acted according to their best judgment as to what was for the interest of all the parties interested in the estate; is isting upon the legal validity of their proceedings respectively, and especially of the transfer of the minors' interest to the corporations; setting up the laches and acquiescence of the complainants; and pleading the Statute of Limitations to the relief sought by the bill.

The first question to be determined is, the nature of the complainant's rights, with regard to the partnership effects of A. & W. Sprague in 1865, at the time when the property was transferred to the A. & W. Sprague Mauufacturing Company.

At the death of William Sprague, Sen., in 1856, there is no doubt that each party in interest was entitled to call for a liquidation and settlement of the partnership affairs and a division of the surplus property, and had a lien on the entire property and effects for that purpose. In the real estate and corporal chattels they were tenants in common with the surviving partners, and over the entire property including the credits and other assets they had the lien referred to, which they had a right to enforce at once if the surviving partners refused to make a settlement. These partners had the right of possession, and, in the choses in action, the right of property, to enable them to settle up the concern. But these rights of survivorship were subordinate to the lien of those beneficially interested, who thereby had a right to enforce the due appropriation of the partnership effects.

But who were the parties beneficially interested in this case? Primarily, the personal representatives of Amasa Sprague, Sen., and William Sprague, Sen.; namely, the two widows, Fanny Sprague and Mary Sprague, administratrixes respectively of the estates of Amasa and William. The ultimate beneficiaries could only reach the property through them. If they abused their trust they would be liable to their respective cestuis que trust. They had the power, if they saw fit, unless restrained by their beneficiaries, to allow the estates of their deceased intestates to be continued in the business of the partnership; and if it was continued by their allowance and consent, the property became liable to the partnership debts subsequently incurred as well as to prior debts; but with this qualification, that the property which remained unchanged was still subject to the partnership lien in preference to after-incurred debts; whilst new property which, in the course of business, took the place of the old, was not subject to said lien in preference to such debts.

This seems to be the result of the cases, though they are apparently somewhat in conflict. A cursory reading of the opinion in Skipp v. Harwood (1747), (2 Swans. 586), and Lord Hardwicke's opinion in the same case on appeal, West v. Skipp (1 Ves. Sen. 239), and the opinions in Stocken v. Dawson (9 Beav. 239), and same case on appeal (17 Law J. Ch. 282), would lead to the conclusion that the executor's lien in such cases attaches to the whole property, as well that newly acquired as that which remains of what was in existence at the testator's or intestate's decease. But this is inconsistent with the decisions in Nerot v. Burnand (4 Russ. 247) and Payne v. Hornby (25 Beav. 280; S.C.. 4 Jur. N. S. 446), which hold that where the business is carried on with the consent of the outgoing partner, or the representative of the deceased partner, debts incurred during that period have a preference over the partnership lien upon all newly acquired property. A comparison of the cases will show that the rule laid down by Lords Hardwicke and Cottenham in West v. Skipp and Stocken v. Dawson was applied by them to cases in which the property of the retiring or deceased partner was used in the business against the will, or without the consent, of the persons entitled thereto. The law is laid down with much accuracy in the last edition of Lindley on Partnership, pp. 700-702, where it is said: 'Whilst the partnership lasts, the lien attaches to everything that can be considered partnership property, and is not thr efore lost by the substitution of new stock for old. Further, on the death or bankruptcy of a partner, his lien continues in favor of his representatives or assignees, and does not terminate until his share has been ascertained and provided for by the other partners. But after the partnership is dissolved, the lien is confined to what was partnership property at the time of the dissolution, and does not extend to what may have been subsequently acquired by the persons who continue to carry on the business.'

Sir John Romilly, in giving judgment in Payne v. Hornby, cited above, after admitting that, by a mortgage of his stock in trade, a man might bind after-acquired property (as to which see Holroyd v. Marshall (10 H. L. Cas. said: 'But on the death of a partner the case is altogether different. There is, as Lord Eldon very accurately expresses it, 'a quasi lien;' there is, in point of fact, only a right to the specific property. The executors of the deceased partner are joint tenants with the surviving partners, and accordingly they are entitled to require the surviving partners to do one of two things,-either to wind up the partnership business at once, or to fix the value of the testator's property and secure payment of the amount. . . . If the executors do not apply for a receiver, but simply file a bill for the winding up of the partnership, I apprehend that the new stock which has been acquired during the time that the business has been carried on by the surviving partner belongs, in the first place, to the creditors who have been created by such subsequent dealings, and not to the creditors of the old partnership; and that it is the duty of the executors, if they wish to prevent any dealings with the stock, to come at once to this court for the appointment of a receiver; otherwise they, in fact, sanction the commission of a fraud, by leading the subsequent creditors to believe that they are dealing with a person who is liable out of his stock in trade to discharge their debts.' 4 Jur. N. S. 446.

These remarks of the Master of the Rolls have respect to the rights of creditors. As between the surviving partners themselves and the representatives of the deceased partner, the lien of the latter will extend to after-acquired property resulting from the employment of the partnership stock, so as to entitle them, at their option, either to demand a share of the profits, or interests on the value of the decedent's share at the time of his death; unless the transactions between them have been such as to indicate a sale of the deceased partner's share to the survivors. A sale, however, can hardly be inferred where no steps have been taken to ascertain the value of the share.

Recurring now to the circumstances of the case before us and the proceedings of the parties, we find that the legal representatives of the deceased partners, and all the beneficiaries of the two estates who were in law capable of acting, entirely acquiesced in, and consented to, the continued employment of the partnership property in the business of the partnership subsequently carried on by the surviving partners; and this state of things continued for the eight or nine years that intervened between the death of William Sprague, Sen., and the transfer of the property to the corporations. And as to the share of the Hoyt children, it was not only consented to by Mary Sprague as administratrix of her deceased husband's estate, but as guardian of the property of the said children.

It seems to have been an understood thing between all the parties, from the beginning, that, without any formal settlement of the estates of Amasa and William Sprague, Sen., the several beneficiaries entitled to distribution should be and were considered as interested in the common partnership property in the proportional amount of their beneficial interest. The active partners represented their own respective shares. Mary Sprague as administratrix and as guardian of the Hoyt children represented her own share and theirs. t is objected to her that she omitted to file any inventory or account; but as there was no difficulty or dispute between the parties in interest as to the extent of the several shares, there was no imperative necessity of presenting accounts to the Probate Court as long as it was deemed expedient to continue all the property in the joint business. An inventory could settle nothing, because the property in which all were equally interested was constantly changing, and an account would have had no practical value, because no immediate settlement of the estate was proposed. The cardinal question, so far as these cases are concerned, was that which related to continuing the shares of the minors in the concern, and keeping the property together. Conceding that to have been the proper course to take, the omission on the part of Mary Sprague to exhibit the accounts prescribed by statute cannot be regarded in the same light as it would have been if she had had possession of the property and was devoting it to her own use. It may have been unwise, but, under the circumstances, it can furnish no evidence of want of good faith, or a desire to do other than the best that could be done for the interests of her grandchildren and wards.

And as to the question of fraud, we may at once state, that we entirely agree with the court below, that the case furnishes no evidence to sustain that charge, either as against Mary Sprague or any of the other parties concerned. They may have judged unwisely, but we see no ground for believing that they were actuated by any desire to cheat or defraud the children of Susan Hoyt out of anything that justly belonged to them. We are sure that such a thought could not be attributed to their grandmother, and we have no evidence to believe that it was ever entertained by Amasa Sprague or William Sprague. We must regard the decision of Mrs. Sprague, and of Edwin Hoyt, the father, to keep the property of the children in the concern, as an error of judgment only, rather than as the result of any design or intent to defraud. We may well conceive that the supposed wishes of William Sprague, Sen., who by his energy and talent had created the estate, and who had persistently kept it together as a common property for the equal benefit of his brother's family and himself, had great weight with Mrs. Sprague and her son-in-law, as well as with the surviving partners, in leading them to adopt the conclusion they did. And for many years the result seemed to justify the conclusion to which they came.

But whatever may have been the responsibility which Mary Sprague, as administratrix and guardian assumed, it cannot be doubted that she had the power to keep the property in the business, for it was subject to her disposal. And as it was kept in the business by her consent and allowance, she ceased to have a lien upon the property as against subsequent creditors of the concern. And, as she in her representative capacity ceased to have such lien, it is difficult to see how the minors themselves, when they arrived at full age, could have any such lien, whatever remedy they may have had against Mary Sprague. If the ultimate beneficiaries of a deceased partner's estate could thus revive a lien which has become extinguished as against creditors, there would be little safety in dealing with commercial partnerships, in which any partner has ever died.

This consideration is conclusive against the claim made by the bills to be paid out of the assets in the hands of Chafee, the trustee, in preference to, or even pari passu with, the creditors of the corporation. For where the representative of a deceased partner allows the interest of his decedent to be used in the business by the surviving partner, and thereby loses his lien upon the partnership property, he does not thereby become a creditor of the new firm, and cannot come into concourse with the creditors thereof; but the property of the firm is first subject to the claims of such creditors, and after they are satisfied the representative's rih t to have an account against the surviving partner remains as before.

But whilst the rights of creditors are thus protected against the lien of a deceased partner's representatives, who have consented to the continuance of the business without a settlement, the beneficiaries standing behind those representatives are entitled to call them to an account for the manner in which they have dealt with the estate. And where, as in this case, they depart from the ordinary mode prescribed by law, and expose the property to the hazards of trade, they run the risk of making themselves answerable for any loss that may occur. In the present case, however, we have no evidence that loss occurred during the period under consideration. The estimated cash value of the minors' share of the property on the 31st of March, 1865, as appeared by the appraisement then made,

was ............................ $652,753

Allowance to offset family expenses of the other

parties......................... 188,333

Interest in Quidnick property, including E.

Hoyt's curtesy.................. 116,112

Total.......................... $957,206

As gold was then 150, the specie value of this total would be $638,137.96. No satisfactory proof has been adduced to show that this amount was not fully equal to what the interest of the minors ought to have been in view of the value of the estate in 1856, at the time of William Sprague, Sen.'s, decease.

Up to the time of organizing the corporations, therefore, and the transfer of the property thereto, we have no evidence that any loss, or diminution of value, had occurred.

Still, if the matter stood there, the defendants, or at least Mary Sprague, might be called upon to render an account, and to show by affirmative proof that all the property which came into her hands as administratrix, or guardian, for the use and benefit of her daughter Susan's children, was forthcoming and ready to be paid over to them. It is necessary, therefore, to take into view what occurred in 1865 and afterwards, in relation to the disposition made of the property to the corporations before referred to, and to the conduct of the complainants after coming of age, in order to determine whether they are entitled to any portion of the relief sought by the bills.

It is contended by the defendants that the authority given to Mary Sprague, as guardian of the Hoyt children, by the joint resolution of 1863, to transfer all the property of her wards to the corporations indicated, was a complete justification for her acts in that behalf; and releases her from all further obligation except that of accounting for the shares of capital stock received therefor and any dividends accruing thereon whilst in her possession.

It is contended by the defendants, secondly, that the complainants, after coming of age, had so long acquiesced in the arrangements made in 1865, before bringing suit or taking any steps to set them aside, that they are now precluded by their own laches and by the lapse of time from having the relief which they seek.

As to the first point, it seems to be beyond doubt, that if the legislature had the power to pass the resolution referred to, it was a complete authority and justification for the conveyance by Mrs. Sprague of the interests of her wards to the corporations mentioned. The resolution itself is sufficiently broad to give the requisite authority. The question is as to the legislative power.

With regard to the general legislative power of a State to act upon persons and property within the limits of its own territory there can be no doubt. Mr. Justice Story lays down three fundamental rules on the subject of private international law, the first of which is expressed thus: 'I. The first and most general maxim or proposition is that which has been already adverted to, that every nation possesses an exclusive sovereignty and jurisdiction within its own territory.' And he adds, 'The direct consequence of this rule is, that the laws of every State affect and bind directly all property, whether real or personal,w ithin its territory, and all persons who are resident within it, whether natural-born subjects or aliens, and also all contracts made and acts done within it.' The second rule declares that no State or nation can, by its laws, directly affect or bind property out of its own territory, or persons not resident therein. The third is, that whatever force and obligation the laws of one country have in another, depend solely upon the laws of the latter, that is, upon the comity exercised by it. Story, Conflict of Laws, sects. 18-23.

One of the ordinary rules of comity exercised by some European States is, to acknowledge the authority and power of foreign guardians, that is, guardians of minors and others appointed under the laws of their domicile in other States. But this rule of comity does not prevail to the same extent in England and the United States. In regard to real estate it is entirely disallowed; and is rarely admitted in regard to personal property. Justice Story, speaking of a decision which favored the exterritorial power of a guardian in reference to personal property, says: 'It has certainly not received any sanction in America, in the States acting under the jurisprudence of the common law. The rights and powers of guardians are considered as strictly local; and not as entitling them to exercise any authority over the person or personal property of their wards in other States, upon the same general reasoning and policy which have circumscribed the rights and authorities of executors and administrators.' Story, Confl. Laws, sects. 499, 504, 504a. And see Wharton, Confl. Laws, sects. 259-268, 2d ed.; 3 Burge, Colon. and For. Laws, 1011. And some of those foreign jurists who contend most strongly for the general application of the ward's lex domicilii admit that, when it comes to the alienation of foreign assets, an exception is to be made in favor of the jurisdiction within which the property is situate, for the reason that this concerns the ward's property, and not his person. Wharton, sects. 267, 268.

But whilst the English and American law require a guardianship where the property is situated, it is conceded, that, in the due exercise of comity, preference would ordinarily be given to the person already clothed with the authority of guardian in the minor's own country. Phillimore, vol. iv. 381; Wharton, sect. 266. In the case before us it does not appear that the minors had any other guardian in New York than their natural guardian, Edwin Hoyt, who applied for the appointment of Mary Sprague as guardian of their estate in Rhode Island.

As the question before us is one of power and not of comity, we think there can be no doubt that the legislature of Rhode Island, where the property was situate, had power, first, to pass laws for the appointment of guardians of the property of nonresident infants, situate in that State; and, secondly, it had power to prescribe the manner in which such guardians shall perform their duties as regards the care, management, investment, and disposal of such property; and that this power is as full and complete as where the minors are domiciled in the State.

Not only did the power exist, but we find that it was exercised. The laws of Rhode Island gave explicit power to the Probate Court to appoint a guardian of the property of nonresident infants. The act of Oct. 31, 1844, declared that 'the courts of probate of the several towns are hereby authorized and empowered to appoint guardians, when occasion shall require, over the property or estate of persons who reside out of the State and possess property therein.' The previous act of Jan. 6, 1837, had authorized the same courts, in case of incapacity of parents of any minors, or for other sufficient cause, to appoint a guardian of the property of such minors, without connecting therewith the guardianship of such minors' persons.

There is no force in the objection made to these laws, that they give chancery powers to the Probate Court, contrary, as contended, to sect. 2 of art. 10 of theC onstitution of Rhode Island adopted in 1843, which says: 'Chancery powers may be conferred on the Supreme Court, but on no other court to any greater extent than is now provided by law.' The answer to this objection is obvious. The appointment of guardians is not, and never has been, peculiarly a chancery power. Guardians at common law became such by their relation to the minor, without any judicial appointment. Guardians were also appointed by testament by the father of any minor from time immemorial in the province of York, and on failure to thus appoint, the ordinary had the power of appointment. Swinburne on Wills, 282. In this country the power to appoint guardians and to pass upon their accounts has generally by statute been conferred upon the probate courts. In Rhode Island the power was exercised by these courts long before the Constitution of 1843 was adopted.

Assuming, then, that the Probate Court had the power to make the appointment, we have been unable to see anything informal or improper in the appointment of Mary Sprague as the guardian of her infant grandchildren. The petition for her appointment was made by the most suitable persons in the world,-their father, Edwin Hoyt, and Byron Sprague, their mother's only brother.

It is true, as suggested, that the duties of Mary Sprague as administratrix might clash with her duties as guardian; but this was not a necessary consequence. The same person is often appointed executor of a will and guardian of the testator's children. It is seldom that any practical difficulty arises from the joinder of the two capacities. We do not perceive that their joinder in the present case had, or was likely to have, any deleterious effect upon the interests of the infants concerned. At all events, it did not avoid or vitiate the appointment.

The guardian having been duly appointed, and no deterioration of the estate being shown prior to the conveyance to the corporations, the next inquiry relates to the authority for making such conveyance, given by the joint resolution of 1863. As already intimated, it cannot be doubted that the legislative power extends to the regulation of the investments and the management of minor's estates by their guardians. The legislature certainly might, if it saw fit, pass a general law authorizing a guardian to invest the property of his ward in the capital stock of a corporation engaged in manufacturing, trading, or financial operations, or in a particular class of operations, as banking, insurance, or any other that might be specified. Usually, such authority, if given would be required to be exercised under the allowance and supervision of a court; but that would be a matter of legislative discretion. That such an authority could be conferred by law there can be no doubt. Analogous powers have been conferred from time immemorial.

But it is objected that the resolution of March 9, 1863, under which the guardian in this case derived her authority to make the investment under consideration, was not a legislative, but a judicial act, and beyond the legislative power.

The only provision in the Constitution of Rhode Island which bears upon this question is the usual one which distributes the powers of government into three departments, legislative, executive, and judicial, and assigns to each the powers appropriate priate to it. Thus, 'The legislative power shall be vested in two Houses,' &c. 'The judicial power shall be vested in one Supreme Court, and in such inferior courts as the General Assembly may, from time to time, ordain and establish.'

The question of the power of a legislature, when not restrained by a specific constitutional provision, to pass special laws, has been much mooted in the courts of this country; and it would subserve no useful purpose to go over the whole ground of controversy on this occasion. Suffice it to say, that laws of this character, for the purpose of healing defects, giving relief, aid, and authority in cases beyond the force of existing law, have been frequently passed in almost every state in the Union, and have received the sanction not only of this court, but of other courts of high authority. The exercise of this power has been most conspicuous in that class of cases in which the legislature has been called upon to act as parens patrioe on behalf of lunatics, minors, and other incapacitated persons. Laws authorizing the sale of the estates of such persons have frequently been passed, and have been upheld as fairly within the legislative power. The passage of such laws is not the exercise of judicial power, although by general laws the discretion to pass upon such cases might be confided to the courts. But when it is not confided to the courts, the power exercised is of a legislative character, the legislature making a law for the particular case. In some modern constitutions the exercise of this power has been prohibited to the legislative department. But where not so prohibited, and where it has never been authoritatively condemned in the jurisprudence of the State, we cannot deny to the legislature the right to exercise it in those cases in which it has been accustomed to be exercised, amongst which we think the present case may be fairly reckoned. Such laws are not judgments upon any person's rights, but they confer powers upon the exercise of which judgment may afterwards be given.

The only cases in Rhode Island decided since the adoption of the Constitution of 1843, which have been cited as having a bearing on the subject, are Taylor v. Place, 4 R. I. 324, and Thurston v. Thurston, 6 id. 296. The general conclusion to be derived from these cases is favorable to the view we have taken.

In the first of these cases, the legislature having passed a vote for opening a judgment, allowing new affidavits to be filed on the ground of accident and mistake, setting aside a verdict and granting a new trial, the court very properly held this to be an exercise of judicial power, and declared the vote to be void. But they distinguished the case from those laws passed to confer special powers upon executors, &c.; as in Watkins v. Holman (16 Pet. 25), where an act authorizing an administratrix residing in another State to sell land in Alabama for the purpose of paying debts was held by this court to be within the legislative power and valid. In the other case cited (Thurston v. Thurston), the court held that it was beyond the power of the Court of Chancery in that particular case to decree a sale of infants' lands; that the power, if possessed by any court, was vested by statute in the Probate Court; but added: 'If a case should arise within the spirit, though not within the letter, of such or a similar statute, a special authority to a trustee to convert the real estate of his infant, lunatic, or otherwise incapable cestui, would seem to partake, as intimated by this court in Taylor v. Place, more of a legislative than of a judicial character, and would be, having been long exercised and not prohibited by the Constitution, within the constitutional competence of the General Assembly. Watkins v. Holman, 16 Pet. 25; Davis v. Johnnot, 7 Met. 388; Snowhill v. Snowhill, 2 Green, Ch. 20; Norris v. Clymer, 2 Barr, 277; Spotswood v. Pendleton, 4 Call, 514; Dorsey v. gilbert, 11 Gill & Johns. 87.' This is certainly a very clear intimation of the constitutionality of the class of laws to which that now under consideration belongs.

But another objection made to the validity of the joint resolution is that it was not in proper form, in not being preceded by the proper enacting clause. The Constitution declares that the style of the laws shall be: 'It is enacted by the General Assembly as follows.' If this requirement is anything more than directory, it cannot be decreed to apply to-that species of enactments which are usually denominated joint resolutions, and which are often used to express the legislative will in cases not requiring a general law. The practice of the Congress of the United t ates, and of almost every legislative body in the country, may be adduced to show that a resolution of the nature now under consideration could not have been within the intent of the provision referred to.

It is unnecessary to enter upon a particular review of the proceedings taken by the parties to effect a transfer of the partnership estate to the corporations chartered for that purpose. We have given them our careful attention, and are satisfied that they were substantially regular. We have no doubt of the guardian's power to submit to referees the ascertainment of the value of the minors' interest in the property; nor of the binding effect of the award made by the referees. Our conclusion is that the guardian, Mrs. Mary Sprague, had full power and authority to invest the said interest in the capital stocks of the corporations referred to; and that having done so, she was no further answerable therefor, but only answerable for the shares of capital stock and the dividends realized there-on, respecting which we do not understand that any complaint is made.

But aside from the legality and binding effect of the proceedings for investing the minors' interest, as here stated, the acquiescence of the complainants, after they came of age, effectually precludes them from obtaining the relief sought by their respective bills. The bills were not filed until June and July, 1875, in the one case nearly nine years, and in the other more than seven years after the minors became sui juris, and could have known, if they did not know, the exact position and history of their property. Notwithstanding all the asseverations to the contrary, the evidence fails to show that they were not allowed every opportunity of which they chose to avail themselves of obtaining this knowledge. And the fact is clearly demonstrated that they did have sufficient knowledge to leave them without any excuse for lying by and giving no sign of dissatisfaction. For several years they received regular annual accounts. These accounts showed the character of the property, and in what it consisted. It further appears that in 1870 each of the complainants received from the book-keeper in rhode island a lIst of all the stocks and securities in which they were respectively interested. It also appears that they accepted the stock of the Quidnick Company, and they make no complaint of that part of the settlement.

Without further discussion, it suffices to say, that the complainants came into the court too late to obtain relief, even if when they came of age they could have justly complained of the conversion of their property into the stock of the corporations. In such cases, it is not merely a question as to what information respecting their rights parties do actually obtain; but as to what information they might have obtained had they used the means and opportunities directly at their command. Others, acting in good faith, also have rights; the world must move; and it is the interest of the community that controversies should have an end.

Decrees affirmed.


text: Talk:Hoyt v. Sprague Francklyn/Opinion of the Court


text:
Williams v. Louisiana

ERROR to the Supreme Court of the State of Louisiana.

The facts are stated in the opinion of the court.

Mr. Simon Sterne and Mr. George W. Biddle, with whom were Mr. A. Sydney Biddle and Mr. James Lowndes, for the plaintiff in error.

Mr. Gustave A. Breaux and Mr. James Lingan for the defendant in error.

MR. JUSTICE MILLER delivered the opinion of the court.

title: Williams v. Louisiana


text: Talk:Williams v. Louisiana

title: Talk:Williams v. Louisiana