text:
Metcalf v. Williams/Opinion of the Court

This was a bill in equity filed for setting aside a judgment at law, the rendering and entry of which, as alleged, were a surprise upon the complainant, who was misled by certain proceedings, which took place in the court. The complainant was sued personally upon a check drawn by him, as he contends, officially, as the vice-president of the Montpelier Female Humane Association of Orange County, Virginia, an incorporated association of that State, having its office in the city of Alexandria. The check was in these words, to wit:--

'No. ___.] ALEXANDRIA, VA., Oct. 2, 1875.

'The First National Bank of Alexandria, Va., pay to the order     of A. E. & C. E. Tilton seven thousand x 100 dollars.

'E. P. AISTROP, Sec'y.

W. G. WILLIAMS, V. Pres't.'

The action was brought in the Circuit Court of the United States in the name of Charles E. Tilton, as surviving partner of himself and Alfred E. Tilton [the payees of the check], for the use and benefit of Ferdinand Metcalf. The writ was returnable on the first Monday of July, 1877, declaration filed at that time, and judgment ordered unless defendant should appear and plead to issue at the next rules, namely, first Monday of August, 1877. At the latter day the rule was confirmed, and on the 17th October, 1877, during the sitting of the court at Richmond, final judgment was moved and entered. The circumstances on which the bill relies for setting aside this judgment are, that the complainant does not owe the money, and made arrangement to have the claim properly litigated; that in September, 1877, he employed counsel to appear and plead to the action; that the said counsel, appearing at the clerk's office, was informed by the clerk that it was usual to file the pleas in open court; that when the court came on in October, and before the judgment was entered, the said counsel called the attention of the judge to the case, and stated that he desired to have entered the plea of nil debet, and to call the attention of the court to some preliminary questions which would have to be settled before a trial could be had on the merits: that the judge informed him that he had ordered all cases against persons living in the congressional district in which defendant resided to be tried in Alexandria; and that the counsel for plaintiffs were residents of Alexandria and were not then in court, and probably kept away from the knowledge of the fact that this suit under the rule would be tried there: that thereupon the counsel said he would not press the matter further, but would wait until the court commenced its term in Alexandria to have said preliminary questions disposed of; that he supposed that the formal plea of nil debet had been noted by the clerk, it not being usual in the State courts to write out the plea of the general issue, but simply for the clerk to note it on the record. The judgment was afterwards entered without the knowledge of complainant or his counsel. When the court came on at Alexandria, in January following, the complainant's counsel attended for the purpose of trying the cause, and was informed that no plea had been entered on the record at Richmond, and the case was not on the docket for trial. Being taken by surprise, he moved the court to reinstate the cause upon the docket; but the judge, doubting his authority to do this, refused the motion. By an amendment to the bill, the complainant states that the check sued on was not his check, but the check of the Montpelier Female Humane Association, the corporation before referred to, of which Metcalf, for whose use the action was brought, was general agent in the city of New York, and of which the complainant was vice-president, and E. P. Aistrop was secretary,-which association was doing business as a public corporation, and all persons dealing with it dealt with it as such; that the check was signed by complainant and by Aistrop in their official characters, of which Metcalf was fully cognizant, and knew that the check was not the individual paper of complainant. Letters of Metcalf, dated in December, 1875, are annexed to the bill, showing that he recognized and treated the check as the check of the association. Tilton, the nominal plaintiff in the action at law, and Metcalf, for whose use it was prosecuted, were made defendants to the bill, and filed a demurrer thereto. Upon the argument, the demurrer was overruled, and thereupon it was agreed by the counsel of both parties that the court should finally dispose of the case upon the merits, and a decree was rendered for the complainant on two grounds: first, that he was not personally bound by the check,-in other words, that it was not his check, but the check of the corporation; and, secondly, that Aistrop was not joined in the action. The latter ground is untenable, because non-joinder of a defendant in an action ex contractu can be taken advantage of only by a plea in abatement. But, upon the other ground, we think that the decree was correct.

First, however, it is proper to inquire whether sufficient cause was shown in the bill for setting aside the judgment. It is manifest that the judgment was a surprise upon complainant. After what passed in the court at Richmond, his counsel had a right to suppose that the cause would be tried in the ensuing term at Alexandria. The practice in Virginia as to entering pleas of general issue on the record sufficiently accounts for the omission to file a formal plea. Had not the term passed by, the district judge would undoubtedly have set aside the judgment, and reinstated the cause on the docket for trial. If, as he supposed, the passage of the term deprived him of power to do this, it became a proper case for equitable interference by bill. When a party has been deprived of his right by fraud, accident, or mistake, and has no remedy at law, a court of equity will grant relief. Perhaps, in view of the equitable control over their own judgments which courts of law have assumed in modern times, the judgment might have been set aside, on motion, for the cause set forth in the bill; but if this were true, the remedy in equity would still be open; and the fact that the court declined to exercise the power upon motion, rendered the resort to a bill necessary and proper. Formerly bills in equity were constantly filed to obtain new trials in actions at law, a practice which still obtains in Kentucky, and perhaps in some other jurisdictions; but the firmly settled practice by which courts of law entertain motions for new trial, and the dislike of one court unnecessarily to interfere with proceedings in another, has caused an almost total disuse of that jurisdiction. Courts of equity, however, still entertain bills to set aside judgments obtained by fraud, accident, or mistake.

As to the merits of the case, we agree with the court below in holding that, according to the showing of the bill, and as between the parties, the check sued on was the check of the Montpelier Female Humane Association, and not the individual check of the defendant. There is nothing on its face to preclude this construction. The bank was requested by two persons, who sign themselves as officers, one as vice-president and the other as secretary, to pay a certain sum. Whether they made this request as officers or as individuals is ambiguous, to say the least. It is evident that an inquiry into the circumstances of the case might render it certain which was intended; as, if the bank had an account with a corporation, of which these persons were the officers designated; if they had been in the habit of checking on that account in that form, with the knowledge and consent of the corporation, and the bank had been in the habit of answering such checks accordingly; and if all this were known to the party taking the checks,-it would be a construction contrary to truth to hold them to be personal checks of the individuals, and not the checks of the corporation. The bill states as facts, that the check in question was the check of the association; that the defendant and Aistrop acted as officers only in drawing the check; and that Metcalf, for whose use the suit was brought, was the general agent of the association, and knew and understood the facts, and treated the checks as the checks of the association. Under these circumstances it would be unjust, as between these common agents of the same corporation, to hold the complainant and Aistrop personally responsible on the check. Where a person acts merely as agent of another, and signs papers in that capacity, that is, signs them as agent, and the party with whom he deals has full knowledge of his agency and of the principal for whom he acts, an express disclosure of the principal's name on the face of the papers, or in the signature, is not essential to protect the agent from personal responsibility.

It is unnecessary to determine whether the form of the document in this case was sufficient to charge innocent holders of the check with notice of its character. The fact that it bore two official signatures, that of the complainant as vice-president and of Aistrop as secretary, is so unusual on the hypothesis of its being an individual transaction, and points so distinctly to an official origin, that it may very well be doubted whether any holder could claim to be innocently ignorant of its true character. But, in the present case, the party claiming to have the beneficial interest in the check was a fellow-agent of the company on whose account it was drawn, actually knew its origin, and cannot pretend that he took it for anything else than a check of the corporation. The plea that the name of the principal was not disclosed on the face of the paper cannot be made by him, for he knew all about it.

The remarks of Mr. Justice Johnson, in delivering the opinion of this court, in the case of Mechanics' Bank v. Bank of Columbia (5 Wheat. 326), are apposite to this case. There the cashier of the bank drew a check and signed it with his individual name without any official designation; but the name of the bank was printed as part of the date. The justice said: 'The question is whether a certain act, done by the cashier of a bank, was done in his official or individual capacity. Had the draft, signed by Paton, borne no marks of an official character on the face of it, the case would have presented more difficulty. But if marks of an official character not only exist on the face, but predominate, the case is really a very familiar one. Evidence to fix its true character becomes indispensable.' Again, in reference to the ambiguity raised on the face of the check as to whether it was personal or official, the justice said: 'It is enough for the purposes of the defendant to establish that there existed on the face of the paper circumstances from which it might reasonably be inferred that it was either one or the other. In that case it became indispensable to resort to extrinsic evidence to remove the doubt. The evidence resorted to for this purpose was the most obvious and reasonable possible, viz. that this was the appropriate form of an official check; that it was in fact cut out of the official check-book of the bank, and noted on the margin; that the money was drawn in behalf of and applied to the use of the Mechanics' Bank; and by all the banks, and all the officers of the banks through which it passed, recognized as an official transaction.'

In Brockway v. Allen (17 Wend. (N. Y.) 40), where the makers of a note appended to their signatures the words 'Trustees of the Baptist Society,' the Supreme Court of New York held that they were entitled to show by proof that there was a corporation called The Trustees of the First Baptist Society of the village of Brockport; that they were its trustees; that the note was given by them in their official capacity; and that the plaintiff, the payee, knew this fact.

In Kean v. Davis (21 N. J. L. 683), the bill was signed 'John Kean, President Elizabeth & Somerville R. R. Co.' The Court of Errors and Appeals of New Jersey, in an elaborate opinion by Chief Justice Green, decided that parol proof was admissible to show that the bill was the bill of the company, and not of the defendant individually; and held that, although where a written instrument is not ambiguous or uncertain on its face, parol proof cannot be resorted to to show what was the real intention of the parties; yet, that in cases of ambiguity on the face of the instrument, as in that case, it might be introduced to explain which of two doubtful constructions was the intent of the parties.

The ordinary rule undoubtedly is, that if a person merely adds to the signature of his name the word 'agent,' 'trustee,' 'treasurer,' &c., without disclosing his principal, he is personally bound. The appendix is regarded as a mere descriptio personce. It does not of itself make third persons chargeable with notice of any representative relation of the signer. But if he be in fact a mere agent, trustee, or officer of some principal, and is in the habit of expressing, in that way, his representative character in his dealings with a particular party, who recognizes him in that character, it would be contrary to justice and truth to construe the documents thus made and used as his personal obligations, contrary to the intent of the parties.

It is hardly necessary to review the long catena of decisions on this subject. They are very numerous, and somewhat conflicting, but we do not think that there is any preponderating authority which prevents us from giving to the instrument in question that construction and effect which was given to it by the parties themselves.

Decree affirmed.


text: Talk:Metcalf v. Williams/Opinion of the Court

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


text:
Dudley v. Easton

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

The facts are stated in the opinion of the court.

Mr. John D. S. Dryden for appellant.

Mr. J. M. Krum and Mr. C. H. Krum, contra.

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

title: Dudley v. Easton


text: Talk:Dudley v. Easton

title: Talk:Dudley v. Easton


text:
Dudley v. Easton/Opinion of the Court

This is an appeal from a decree dismissing on demurrer a bill filed by Dudley, the assignee in bankruptcy of William P. Bush. The case stated in the last amended bill is substantially as follows:-

On the 10th of October, 1873, Easton and Stillwell severally sued Bush in the Circuit Court of Monroe County, Missouri,-Easton on a note for $3,000, and Stillwell on one for $5,000. In due course of proceeding, judgments by default could be taken in each of the suits on the 30th of October. Bush was at the time laboring under great financial embarrassment, although, as he thought, actually possessed of lands and other property greatly in excess of his debts. On the 24th of October, after service of process upon him in the suits, he met a portion of his creditors, including Easton and Stillwell, and made known to them his embarrassed condition, and the pendency of the suits. He also stated that Easton and Stillwell would, by obtaining judgments, secure an advantage over his other creditors, and he was desirous that all should share equally in his property. He thereupon proposed that all the creditors present should accept in satisfaction of their respective debts his notes, payable in equal instalments in one, two, three, and four years from date, with interest at the rate of ten per cent, secured by a mortgage executed by himself and wife, to a trustee to be selected by the parties, on all his real estate, and that Easton and Stillwell should dismiss their suits and not take judgment against him. It is then averred that all the creditors present, including Easton and Stillwell, agreed with each other and with him to accept the notes and security as proposed, and extend the time, and that he agreed to give the notes and make the mortgage. As part of the agreement thus entered into, Easton and Stillwell were to dismiss their suits.

Relying on this agreement, Bush set about the preparation of his notes and mortgage, and paid no attention to the suits. He did not appear in court, or make any defence, as he otherwise would have done, by setting up the agreement for an extension. Consequently, at the proper time, October 30, judgments were taken against him by default, of which it is averred he had no actual notice until November 3, after the term of the court had closed.

Without any unnecessary delay, Bush executed his notes and a mortgage to the defendant Logan as trustee, in accordance with the agreement which had been made. They were all dated October 29, but the mortgage did not take effect until after the judgments were rendered. For this reason, the lien of the judgments was prior to that of the mortgage. All the creditors represented at the meeting, except Easton and Stillwell, accepted the notes, and now retain them. They are not parties to this suit, unless they are represented by the assignee. Easton and Stillwell refused to carry out their agreement, and they rely on their judgments and the priority of lien thereby acquired.

On the 28th of February, 1874, proceedings in bankruptcy were begun against Bush by some of his creditors, which resulted in an adjudication of bankruptcy and the appointment of Dudley as assignee, to whom, on the 24th of March, the general assignment was made under the law. This bill was subsequently filed against Easton, Stillwell, Logan, the trustee under the mortgage, and Bush and wife. It sets forth the foregoing facts in detail, and then avers:--

'Your orator further says that at the time of the making of said agreement of extension and of said deed of trust said Bush had a large amount of property, not included or intended to be included in said deed, sufficient in value to satisfy all the debts owing by said Bush to his other creditors, who were not parties to said agreement; that said deed was not made, nor was said agreement entered into, by said Bush with any intent to give a preference thereby to the parties to said agreement or any of them over his other creditors, or with the intent thereby to convey his said property or any of it in fraud of the provisions of said act of Congress or the acts amendatory thereof, but solely under the belief on the part of said Bush that by obtaining such extension of time of payment as aforesaid he would be enabled to pay all his creditors their debts in full, together with interest at the rate of ten per cent per annum; that the entire indebtedness secured by said deed of trust, including that to said Stillwell and Easton, amounted to $40,394,70, and that all the lands mentioned in said deed were then thought to be worth, and in fact were worth, the sum of $50,000, especially if a reasonable time could be obtained to negotiate a sale of the same; that among the property described in said deed of trust was that occupied by said Bush and his family as a homestead, out of which he was entitled to have set apart to him as exempt from levy and sale under execution a homestead of the value of $1,500 under the laws of this State; that because of the release of the dower interest of the defendant, Emma C. Bush, wife of said bankrupt, in all of his lands described in said deed, and the waiver and conveyance of all his right to exemption of a homestead given and made by said deed, and for other good and sufficient reasons, it is to the interest of all of the creditors of said bankrupt's estate, save only said Easton and Stillwell, that the said deed of trust should be recognized, confirmed, and enforced by your orator as assignee as aforesaid, and in fact this bill is filed by your orator at the request and by the direction and on the behalf of all the creditors of said Bush, whether secured or unsecured, excepting only said Easton and Stillwell.'

The prayer of the bill is as follows:--

'Wherefore your orator prays that a decree may be made by your honorable court requiring the said defendants, Easton and Stillwell, on their part respectively to execute and perform said agreement, to accept said notes, and the benefit of said trust mortgage respectively, in satisfaction of the demands which they respectively had against said William P. Bush on the 29th of October, 1873, and then sued for in the said Monroe Circuit Court, and severally to execute to your orator a release of all lien and claim upon any real estate which was of said Bush at the time of the commencement of said proceedings in bankruptcy against said Bush, which they respectively may have under or by virtue of said several judgments of said Monroe Circuit Court, or under or by virtue of the levy of any execution issued thereon, and that said judgments as to said Bush may be set aside and for naught held and esteemed respectively, and that the said defendants, Easton and Stillwell, may by said decree be forever enjoined and restrained from enforcing said judgments respectively, or from claiming any benefit or lien thereof as against any property which belonged to said Bush at the time of the rendition thereof, and that he may have all such other and further relief as to equity belongs and the circumstances of his case may require.'

The first question to be settled is, whether an assignee in bankruptcy can sue for the relief which is asked. The inquiry is not whether the creditors who accepted the notes and mortgage can compel Easton and Stillwell to give up their judgment liens and come in equally with them under the mortgage, nor whether the bankrupt or his wife can be relieved against their mortgage of their homestead or dower rights, but whether the assignee in bankruptcy stands in such a relation to the alleged agreement and the parties that he can require the agreement to be carried into effect, if called upon for that purpose by all the creditors.

An assignee in bankruptcy represents the general or unsecured creditors, and his duties relate chiefly to their interests. He is in no respect the agent or representative of secured creditors, who do not prove their claims. He need not take measures for the sale of incumbered property, unless the value of the property is greater than the incumbrance. He has nothing to do with the disputes of secured creditors among themselves, unless it becomes necessary for him to interfere in order to settle their rights in the general estate, or to determine whether there is an excess of property over what is required for the purposes of the security. McHenry v. La Soci et e Francaise, 95 U.S. 58. He cannot enforce contracts between creditors, except so far as they may directly or indirectly affect the fund he is to get into his hands for distribution under the law. Neither is it any part of his duty to protect the dower rights of the wife of the bankrupt against the consequences of her own acts before the bankruptcy, or to inquire whether the bankrupt or his wife can claim homestead rights as against incumbrancers whose title is superior to his own. As to everything except fraudulent conveyances and fraudulent preferences under the bankrupt law, he takes by his assignment, as a purchaser from the bankrupt, with notice of all outstanding rights and equities. Whatever the bankrupt could do to make the assigned property available for the general creditors he may do, but nothing more, except that he may sue for and recover that which was conveyed in fraud of the rights of creditors, and set aside all fraudulent preferences. As to such preferences and conveyances he has all the rights of a judgment creditor, as well as the powers specifically conferred by the bankrupt law.

It may be for the interest of the creditors who carried out the agreement now under consideration for an extension of time, and received notes under the mortgage, that Easton and Stillwell should vacate their judgment liens and forego the preference they thereby acquired; but we are unable to discover from anything stated in the bill how the interest which the assignee represents would be specially benefited by making Easton and Stillwell share equally with the other creditors rather than maintain their preference. The object of the bill is not to set aside any fraudulent preference which has been obtained over the general creditors of the estate, but to settle the rights of secured creditors as between themselves. In no event is the property to be relieved from any part of the present incumbrance. The only question is how, as between the several incumbrancers, it shall be appropriated. From anything which appears in the bill, we cannot say that the overplus of the property, after the debts are paid, will be more, whether the distribution is made in one way or the other. If there should be a deficiency, and some part of the secured debt be proved up against the general estate, it is not material to the general creditors whether the unpaid part of the debt belongs to all the secured creditors, including Easton and Stillwell, equally, or to the others alone. In either event, the amount chargeable on the general fund will be the same.

We have not overlooked the fact that in the bill it is averred that when the mortgage was made the lands included were thought to be worth, and in fact were worth, the sum of $50,000, especially if a reasonable time could be obtained to negotiate a sale, and also that 'it is to the interest of all the creditors of said bankrupt's estate, save only Easton and Stillwell, that the said deed of trust (mortgage) should be recognized, confirmed, and enforced by your orator as aforesaid;' but this, in our opinion, is not enough. The way in which the interests of the general creditors would be injuriously affected by enforcing the judgment liens rather than the mortgage should have been stated, so that the court can see whether it is sufficient to entitle the assignee to the relief he asks. The request of all the creditors, that the assignee institute and carry on the suit, amounts to nothing, unless the interests which he in law represents are such as to make it his duty to do what is wanted.

It may, perhaps, be fairly inferred from what is stated in the bill, that the bankruptcy of Bush was brought about by the failure of Easton and Stillwell to carry out their agreement. Because he could not get the time he wanted he subjected himself to the proceedings which were instituted against him, but that furnishes no ground for the relief which is now asked. If Easton and Stillwell are compelled to give up their judgment liens and take under the mortgage, neither the adjudication in bankruptcy nor the assignment under it will be vacated. The assignee will be compelled to go on with the administration of his trust, whether he succeeds in this suit or not, and he has not shown to us in any precise or definite way that the relief he asks will change in any material respects the result which will otherwise flow from the conversion of the assets as they now stand into money for the purpose of distribution under the law. So far as we discover, the only object of the assignee is to compel Easton and Stillwell to share equally with the other secured creditors in the proceeds of the mortgaged property, instead of retaining their present preference, and this, too, without showing that the fund he is to gather in for distribution will be in any manner affected thereby. Clearly he has no interest in saving the dower rights of Mrs. Bush, or in protecting the homestead of the family from sale under the mortgage which has been executed. A fraud may have been perpetrated on the bankrupt and his wife, but it is not one which the assignee has any official interest in redressing.

As what we have said is decisive of the case, without considering any of the other questions discussed in the briefs, we affirm the decree below.

Decree affirmed.

title: Dudley v. Easton/Opinion of the Court


text: Talk:Dudley v. Easton/Opinion of the Court


text:
Koon v. Insurance Company

ERROR to the Circuit Court of the United States for the Northern District of Illinois.

This is an action of debt brought by the Phoenix Mutual Life Insurance Company against Henry H. Koon as principal, and the other defendants as sureties, on a bond in the penal sum of $10,000, conditioned for the faithful performance of his duties as agent of the company. The defendants pleaded nil debet.

It appears from the bill of exceptions that upon the retirement of the jury 'it was agreed by the parties that the jury might, when they had agreed upon their verdict, if the court should not then be in session, sign and seal the same, and deliver the same to the officer in charge and disperse.'

The jury, having agreed upon their verdict when the court was not in session, signed, sealed, and delivered it to the officer in charge, who returned it into court, where it was ordered to be opened and read. It was in the following words and figures, to wit: 'We, the jury, find for the plaintiffs, and fix the sum due on the bond at $7,500, and damages at one cent.' The envelope in which it was enclosed also contained another paper, on which was the following writing: 'The undersigned jury signed the enclosed verdict as a compromise, being the largest amount we can get;' signed by five of the jurors.

Thereupon the court directed the clerk to put the verdict in the following form: 'We, the jury, find the issue for the plaintiff, and find the debt ten thousand dollars, and assess the damages at seven thousand five hundred dollars; the said debt to be discharged on payment of said damages.'

To which action, in ordering the verdict to be opened and read in the absence of the jury and in changing its form, the defendants excepted, and moved the court to correct the entry so as to make it conform to the verdict as returned. The motion was overruled, and judgment rendered on the verdict as recorded. The defendants used out this writ of error.

Mr Robert G. Ingersoll for the plaintiff in error.

Mr. Lewis H. Boutell, contra.

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

title: Koon v. Insurance Company


text: Talk:Koon v. Insurance Company

title: Talk:Koon v. Insurance Company


text:
Koon v. Insurance Company/Opinion of the Court

The stipulation 'that the jury might, when they had agreed on their verdict, if the court should not then be in session, sign and seal the same, and deliver the same to the officer in charge and disperse,' was equivalent to an agreement by both parties, on the retirement of the jury, that the court might, when the sealed verdict was handed in by the officer, open it in the absence of the jury and reduce it to proper form, if necessary. The stipulation was also a waiver of the right to poll the jury if they should not be in court.

The issue to be tried was on a plea of nil debet. This admitted the execution of the bond, and required the jury only to find the amount due. If anything was found to be due, the law fixed the form of the verdict and judgment. The jury found there was $7,500 due on the debt and one cent damages for the detention. That finding, reduced to proper form, was in favor of the plaintiff for the penalty of the bond, to be discharged on payment of $7,500. All the court did was to enter the verdict in that form. In doing so it only gave legal effect to what the jury unmistakably found. This was allowable, both under sect. 954 of the Revised Statutes and the Practice Act of Illinois.

Judgment affirmed.


text: Talk:Koon v. Insurance Company/Opinion of the Court


text:
Jones v. Randolph

ERROR to the Supreme Court of the District of Columbia.

The facts are stated in the opinion of the court.

Mr. Walter D. Davidge for the plaintiffs in error.

Mr. John Selden, contra.

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

title: Jones v. Randolph


text: Talk:Jones v. Randolph

title: Talk:Jones v. Randolph


text: Talk:Werner Erhard vs. Columbia Broadcasting System


text:
Jones v. Randolph/Opinion of the Court

This was an action of ejectment, and the defendants below, plaintiffs in error here, set up title under a deed of trust made by William O'Neale, Nov. 12, 1820, to William A. Bradley, cashier of the Bank of Washington, to secure a debt to that bank. On the 31st of December, 1839, at the request of the father of Margaret R. Timberlake, a minor, French S. Evans, her guardian, paid to the bank with her moneys in his hands the amount of the debt. The note which evidenced it was assigned to him in proper form, and from that time he was allowed to collect the rents of the property covered by the trust deed. The amount he paid was $1,072.41, which, it is conceded, was the actual sum then due the bank. His guardianship terminated in July, 1843. He then settled his accounts with the proper court, and filed in court the note he had got from the bank. After that, in 1845, proceedings were instiance under the trust deed to sell the property to pay the balance due on the debt. At the sale the plaintiffs in error claim to have become purchasers and to have acquired title, under which they took the possession they now hold.

On the trial it became a material question whether the debt secured by the trust deed had been paid before the attempted sale. The evidence was that the guardian, between the time he got the note and the time he went out of office, had collected only about six hundred dollars of rents. These were credited by him in his accounts with his ward, but there was nowhere in the testimony anything tending to show that any other person representing the owners of the debt ever had the possession of the property or had ever actually collected any more of the rents. The rights of the parties at the trial in reference to this part of the case, so far as the record shows, depended upon the actual collection of rents, and not upon the value of the use and occupation of the property, while the creditor assumed the right to collect the rents as they accrued and appropriate them to the discharge of the debt.

Such being the condition of the evidence on this branch of the case, all of which was embodied in the bill of exceptions, the court charged the jury as follows:--

'If the jury find from the evidence that William O'Neale died on Oct. 24, 1837, having by his last will and testament, and the codicil thereto, disposed of his estate as set out in the paper hereunto annexed and marked A, and that after his death, and down to Dec. 31, 1839, the said Rhoda O'Neale collected the rents and profits of the two brick houses mentioned in the said codicil, and was in possession of the same, under color of authority derived from the said last will and testament; that on the day and year last aforesaid the last renewal of the note mentioned in the deed of trust executed by the said William O'Neale was in part unpaid and outstanding in the hands of the Bank of Washington, mentioned in the said deed of trust; that on that date one French S. Evans, while guardian of one Miss Margaret R. Timberlake, then eleven years of age, and daughter, by a former husband, of the said Mrs. Margaret L. Eaton, mentioned in the said last will and testament, from and with the means of his said ward paid unto the said bank the whole amount then due on the said note, and the same, with the security created by the said deed of trust, caused to be assigned to himself as such guardian; and if the jury further find that thereafter and between the said thirty-first day of December, 1839, and the twenty-ninth day of July, 1843, the said Evans, as guardian aforesaid, of the rents and profits of the estate so as aforesaid disposed of by the said last will and testament, and with the consent of the said Rhoda O'Neale, made collections from time to time, and applied them to the said note, until the same, both as to principal and interest, was fully paid, and that on the said twenty-ninth day of July, 1843, the said Evans, in the Orphans' Court of this District, closed his account as such guardian, then the jury are instructed, as matter of law, that the said note, on or before the twenty-ninth day of July, 1843, became extinguished, and that no valid sale could be made of the property in question under the said deed of trust, in the year 1845.

'If the jury find that the note in question was paid on or before July 29, 1843, or at any time prior to 1845, out of the proceeds or income of the estate of William O'Neale, deceased, under the direction or consent of his widow, the deed of trust became thereby extinguished.'

Inasmuch as the evidence did not tend to show that more than about six hundred dollars had been actually collected from the rents by Evans or any other person for the account of the holder of the note, we cannot but think this charge was misleading. It assumed that the jury might find that full payment had been made in that way, when there was no evidence whatever to support such a verdict. It is possible that the guardian, or some other person who for the time being properly represented the ward, while permitted to collect the rents, ought to have collected more, and was on that account chargeable with more than he actually got, or that the debt had been otherwise paid; but that was not the question submitted to the jury. Under the instructions the jury were to inquire only whether there had been a satisfaction of the debt through actual collection of rents.

As this leads to a reversal of the judgment, we deem it unnecessary to consider any of the other errors assigned, and especially whether the instruction requested by the defendants was properly modified. The same questions may not arise on a second trial.

The judgment will be reversed and the cause remanded with directions to grant a new trial and proceed accordingly.

So ordered.

title: Jones v. Randolph/Opinion of the Court


text: Talk:Jones v. Randolph/Opinion of the Court


text:
Nevada Bank v. Sedgwick

Error to the Circuit Court of the United States for the District of California.

The facts are stated in the opinion of the court.

Mr. John E. Ward for the plaintiff in error.

No counsel appeared for the defendant in error.

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

title: Nevada Bank v. Sedgwick


text: Talk:Nevada Bank v. Sedgwick

title: Talk:Nevada Bank v. Sedgwick


text:
Nevada Bank v. Sedgwick/Opinion of the Court

This suit was broght by a bank incorporated under the laws of, and having its principal place of business in, California, against a collector of the internal revenue of the United States, to recover taxes alleged to have been illegally exacted under the second clause of sect. 3408 of the Revised Statutes. That clause provides for the levy and and collection of 'a tax of one twenty-fourth of one per centum each month upon the capital of any bank, association, company, corporation, and on the capital employed by any person in the business of banking, beyond the average amount invested in United States bonds.' A part of the capital of this bank was, as is alleged, 'invested abroad and in foreign countries,' and in assessing the taxes this was included as capital with the rest. The case stands on demurrer to the complaint, and the single question we are asked to consider is, whether the capital of a State bank 'invested abroad and in foreign countries' can be taxed by the United States. In what manner the investments were made does not appear. The averment in the complaint is in the general language we have quoted.

As long ago as 1819 it was said by this court, speaking through Mr. Chief Justice Marshall, in McCulloch v. State of Maryland (4 Wheat. 316), that all subects over which the sovereign power of a State extends are objects of taxation. Acting on this principle, we held recently, in Kirtland v. Hotchkiss (100 U.S. 491), that a State might tax her resident citizens for debts held by them against non-residents, and secured by mortgage on property in another State. That seems to us conclusive of this case. The Nevada Bank was incorporated and organized under the laws of one of the States of the Union, and it had its principal place of business within the United States. It was, therefore, subject to the sovereign power of the United States, and a proper object of taxation. The investments abroad are still the property of the bank and part of its capital. In the absence of any averments to the contrary, we must presume they were such as banks usually make in doing a banking business, and that their legal situs was at the home office of the corporation. We need not consider, therefore, whether, if they had been made in fixed property subject exclusively to another jurisdiction, a different rule would apply. As the case is presented, it comes clearly within the principle which was applied in Kirtland v. Hotchkiss, supra.

Judgment affirmed.


text: Talk:Nevada Bank v. Sedgwick/Opinion of the Court


text:
Railroad Company v. Mellon

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

On Oct. 2, 1866, letters-patent No. 58,447 were granted to Edward Mellon for an improvement in the mode of attaching tires to the wheels of locomotives. For the purpose of illustration, three figures, numbered respectively 1, 2, and 3, were appended to the specification on which the application for the letters was based. The specification is as follows:-- 'Figures 1 and 2 are central sectons of a locomotive wheel having a tire applied to it according to my invention. Figure 3, a section of a portion of a locomotive wheel having its tire affected by wear, drawn with a view of showing the advantage of one feature of my invention. Similar letters of reference indicate like parts.

'This invention has for its object the securing of tires on the wheels of locomotives without the aid of bolts, and in such a manner that the tire, in case of becoming loose, cannot casually slip off from the wheel.

'The invention consists in having the wheel, or the tire which is to be fitted on the same, provided with a single flange, arranged in such a manner that said flange, in connection with the usual flange on the tire, will keep the latter on the wheel. The invention also consists in constructing the tire with a rounded edge at one side of its inner surface in order to prevent said edge from indenting and sinking into the periphery of the wheel, a contingency which would otherwise occur in consequence of the tire becoming stretched by use.

'A represents a locomotive wheel which may be constructed in the usual or any proper manner, and B is the tire fitted thereon. The periphery of the wheel A is provided at the inner edge with a flange a, as shown in Figures 1 and 2.

'The tire B is shrunk on the periphery of the wheel A, as usual, and it will be seen that the flange a prevents the tire, should it become loose on the wheel A, from slipping off at the inner side of the wheel, and the flange b of the tire will of course prevent the latter from slipping off at the outer side of the wheel.

'By this arrangement no bolts or set screws are required to aid in fastening the tire on the wheel, for it is impossible for the tire to leave the wheel either at the right or left side thereof.

'The same result may be attained by having the surface of the tire at its outer edge provided with a flange, a', as shown at the upper part of Figure 2.

'The inner surface of the tire at its inner edge is rounded, as shown at c, in all the figures, in order to prevent said edge from indenting or sinking into the periphery of the wheel. The tires of locomotive wheels are, under the jars, concussions, and wear to which they are subjected, considerably stretched, and they invariably become concave at their inner surface (see Figure 3), the edges spreading over the sides of the wheel, and forming in a lock, in some cases, so as to render the cutting of the tire necessary, in order to detach it from the wheel. With my improvement the flange a would cause the inner edge of the inner surface of the tire to indent the periphery of the wheel, or form a crease in it if the edge c were not rounded.

'The great feature in this invention is that I retain the tire on the wheel without the employment of bolts, rivets, keys, or other like attachments. I heat my tire until it has expanded sufficiently to be slipped over the periphery of the wheel; it then cools and contracts, and holds or binds the wheel firmly.

'After the wheel, as completed, has been in use a certain length of time, the tire will stretch and thus become loose on the wheel; then the pressure of the resistance against the rail will bear or force the tire inward against the flange a of the wheel.

'Now, it is not intended to run the engine unnecessarily with a loose tire, but should this tire become loose while on the road, there is sufficient safety in running the engine until the depot is reached, or until it will be convenient to repair or replace it by a new one.

'The tire can be readily slipped off, there being no rivets or other fastenings to undo, and the convenience and utility of my improvement is apparent.

'I am aware of the invention described in patent to N. Hodge, Nov. 18, 1851, but I wish it to be understood that I do not claim the invention therein described, viz. the angular flange upon the inner edge of the wheel and the flange upon the outer edge of the wheel, but I do claim as my invention the wheel with the curved flange upon the inner edge in combination with a tire with a rounded corner to fit said curved flange, as set forth.'

The application for letters-patent, as is shown by the filewrapper, was made Oct. 6, 1865. It was twice rejected; the last time on April 23, 1866.

The bill in this case charged that the letters-patent had been infringed by the Lehigh Valley Railroad Company, the defendant, and it prayed for an injunction and an account of profits.

The answer of the company denied that Mellon was the first inventor of the mode of attaching tires to wheels of locomotives, described in his letters-patent, and it also set up former letters-patent and publications, bearing date many years before his alleged invention, and showing, as was claimed, tires and wheels such as the company use.

Among them are letters-patent No. 8526, granted to Nehemiah Hodge, Nov. 18, 1851, for a new and useful improvement in railroad car wheels. One of the drawings (that designated as Figure 2) annexed to his specification on which the letters-patent were granted shows a flange or shoulder from the rim of the wheel-centre projecting over and overlapping the tire.

The answer, by way of further defence, denied infringement.

The Circuit Court upon final hearing found against the company upon both issues made by the answer, perpetually enjoined it from further infringement, and directed an account of profits to be taken. Upon the coming in of the master's report a decree was rendered in favor of Mellon for the sum of $3,018.

This appeal was thereupon taken by the company.

Figures 1, 2, and 3 appended to Mellon's specification are as follows:-- The following represents Figure 2 of the drawings annexed to the specification of Hodge.

Mr. Alexander D. Campbell and Mr. Medward N. Dickerson for the appellant.

Mr. Furman Sheppard, contra.

MR. JUSTICE WOODS, after making the foregoing statement of facts, delivered the opinion of the court.

title: Railroad Company v. Mellon


text: Talk:Railroad Company v. Mellon

title: Talk:Railroad Company v. Mellon


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

It appears from the evidence that railroad locomotive wheels are composed of two parts,-the body of the wheel, called the wheel-centre, and a tire which surrounds it, substantially in the same manner in which the tire surrounds the felloes of an ordinary wagon wheel.

The invention of Mellon relates solely to a method of fastening tires upon locomotive wheel-centres. It appears from the record that, generally speaking, there are two ways of fastening these tires upon their wheel-centres; one by making the tire a little smaller in diameter than the wheel-centre, then heating it so that it will expand somewhat more than the difference between its diameter and the diameter of the wheel-centre, and in that condition slipping it on the centre and allowing it to cool, thus following the method of a blacksmith in shrinking a wagon tire upon a wooden wheel. Another method is to fasten the tire cold upon the wheel-centre by means of screws or bolts.

The former method is now almost universally used. In shrinking the tires on the wheels, the practice usually followed at present is to turn the wheel-centre, bore the tire in a cylindrical form, and rely solely upon the contraction of the tire by cooling to retain it upon the wheel.

A modification of this method is, in place of the wheel-centre and tire meeting each other in a cylindrical joint, to have some kind of a flange, lip, or shoulder to project either from the circumference of the wheel-centre or from the bore of the tire, to fill a corresponding groove or recess in the opposite part, so that when the tire has been shrunk on the wheel-centre it cannot be driven sideways, off the wheel against the resistance of this flange. The wheels exhibited in the drawings of Mellon's patent belong to this latter class.

The right of Mellon to the relief prayed for in the bill depends in part upon the construction to be placed on his letters-patent.

His counsel contends that they cover two things, which, it is claimed, are in substance set forth in his specification as follows:--

First, In having the wheel, or the tire which is to be fitted on the same, provided with a single flange arranged in such a manner that said flange, in connection with the ordinary flange on the tire, will keep the latter on the wheel.

Second, In constructing the tire with a rounded edge at one side of its inner surface, in order to prevent said edge from indenting and sinking into the periphery of the wheel, a contingency which would otherwise occur in consequence of the tire being stretched by use.

Conceding that the patent is to be construed according to the contention of the appellee, we are of opinion that he has not shown himself entitled to relief.

An inspection of the specification and drawings which accompany the letters-patent granted to Nehemiah Hodge under date of Nov. 18, 1851, shows precisely the contrivance first described in the specification of the appellee's patent. The drawing, representing a central cross-section of a car-wheel, appended to Hodge's specification, accurately illustrates the first alleged invention described in the specification of appellee's patent. His patent cannot, therefore, be held to include that contrivance. So far as that part of his alleged invention is concerned, the defence of want of novelty is conclusively established.

But there is another answer to this part of his case.

The act of July 4, 1836, c. 357 (5 Stat. 117), under which this patent was issued, requires that an applicant for a patent shall not only 'deliver a written description of his invention or discovery,' but 'shall also particularly specify and point out the part, improvement, or combination which he claims as his own invention or discovery.' This provision is substantially re-enacted in the act of July 8, 1870, c. 230 (16 Stat. 198), Rev. Stat., sect. 4888, and remains in force.

As a rule, therefore, the specification filed with the application for letters-patent contains a general description of the invention sought of be patented, which is followed by what is technically called the 'claim.' In reference to this latter part of the specification this court, speaking by Mr. Justice Bradley, has said: 'It is well known that the terms of the claim in letters-patent are carefully scrutinized in the Patent Office. Over this part of the specification the chief contest generally arises. It defines what the office, after a full examination of previous intentions and the state of the art, determines the applicant is entitled to.' Burns v. Meyer, 100 U.S. 671. See also Keystone Bridge Co. v. Phoenix Iron Co., 95 id. 274, 278.

In view, therefore, of the statute, the practice of the Patent Office, and the decisions of this court, we think that the scope of letters-patent should be limited to the invention covered by the claim, and that though the claim may be illustrated, it cannot be enlarged by the language used in other parts of the specification.

We are, therefore, justified in looking at the 'claim' with which the specification of the appellee's invention concludes, to determine what is covered by his letters-patent.

The claim, so far from covering an angular flange upon the wheel, expressly excludes such a flange, and embraces only a flange with a curved or rounded corner.

In this case the description of the appellee's invention is much broader than his claim. It seems quite clear from the present form of his specification, and from the fact that his application for a patent was twice rejected, that he was compelled by the Patent Office to narrow his claim to its present limits before the commissioner would grant him a patent. In doing this he neglected to amend the descriptive part of his specification. He cannot go beyond what he has claimed and insist that his patent covers something not claimed, merely because it is to be found in the descriptive part of the specification.

The appellee is, therefore, precluded from claiming relief against the appellant for the use of a flange with a square corner. He is, consequently, driven to the second branch of his alleged invention, as set out in his bill of complaint, as the basis of any relief against appellant.

This, as is clear from his claim, consists simply in rounding off that corner of the inner side of the tire which fits into the re-entrant corner made by the flange upon the rim of the wheel-centre, so as to prevent the corner of the tire from indenting and sinking into the periphery of the wheel-centre.

The charge in the bill of infringement of this part of appellee's alleged invention is not sustained by the proof. The answer, which is under oath, denies infringement. Infringement must, therefore, be shown by satisfactory proof; it cannot be presumed. The evidence for the appellee entirely fails to establish this part of his case. On the contrary, the proof adduced by the appellant is not only persuasive, but conclusive to show that it never made or used the flange with the rounded corner.

We are of opinion, therefore, that the record discloses no case against the appellant. The decree of the Circuit Court must, therefore, be reversed, and the cause remanded with instructions to dismiss the bill; and it is

So ordered.


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


text:
Chicago v. Tebbetts

APPEAL from the Circuit Court of the United States for the Northern District of Illinois.

James D. Bruner, the owner of certain premises in the city of Chicago, conveyed them by two deeds of trust bearing date July 10, 1866, and June 12, 1867, respectively, to Levi D. Boone, as trustee, to secure to the Union Mutual Life Insurance Company the payment of two notes, one for $10,000 and one for $8,000. On Sept. 9, 1867, Bruner conveyed the premises to Charles A. Gregory, subject to the outstanding indebtedness. Dec. 12, 1867, $2,000 with interest was paid on the $8,000 note.

The city council having, May 25, 1868, passed an ordinance for the extension of Dearborn Street, it became necessary to take the premises for that purpose. Condemnation proceedings were had accordingly, and and the damages assessed at $36,000. The city paid Gregory, March 22, 1869, $20,000, and on the early part of the following May issued to him a voucher for $16,000, which he, on the eighteenth day of that month, assigned to Boone as trustee and general agent of the company, as collateral security for the payment of the notes.

Certain property-holders who had a large pecuniary interest in the opening of the street stipulated, in writing, that if Boone would take no steps to prevent the city from immediately occupying the land and defer enforcing the collection of the notes, they would pay the company interest semi-annually on the said sum of $16,000, or on so much thereof as should remain unpaid. It was stipulated that Boone and the company did not thereby 'waive or abandon any right they might have on said notes against the maker thereof, or any right of suit against the said city for the recovery of said money, or any right of entry or possession of said land.'

On June 1, 1869, the city, with the consent of the company, entered upon the land, and has since that date kept and used it for a public street. On June 5 the city paid Boone $6,000, which, with the $2,000 before referred to, paid the $8,000 note.

It is admitted by stipulation that the city, after the execution of the agreement, had knowledge thereof, and, but for such knowledge, would not then have taken possession of the premises; also, that it had only paid $26,000 on account of the damages awarded.

Neither the balance due on the voucher nor the $10,000 note having been paid, Boone, as trustee, pursuant to the power of sale contained in the deed of trust, sold the premises at public auction to the insurance company, and executed to it a conveyance therefor. The company conveyed, Dec. 27, 1872, to William C. Tebbetts, a citizen of Massachusetts, the premises, together with any claim which it had either against the city or Bruner. At the same time Boone, as trustee and general agent of the company, indorsed and delivered to him the voucher of the city. Failing to obtain payment thereof, Tebbetts, in November, 1873, brought ejectment against the city, but dismissed his action before judgment.

In June, 1877, Tebbetts filed his bill against the city to compel the payment of the balance due on the voucher.

The court below decreed in his favor for the $10,000 due on the voucher, together with interest at six per cent per annum from Jan. 1, 1870.

The city thereupon appealed to this court.

Mr. William C. Goudy for the appellant.

Mr. W. B. Wilson and Mr. George Payson, contra.

MR. JUSTICE BRADLEY delivered the opinion of the court.

title: Chicago v. Tebbetts


text: Talk:Chicago v. Tebbetts

title: Talk:Chicago v. Tebbetts


text:
Chicago v. Tebbetts/Opinion of the Court

The decree in this case must be affirmed. The grounds taken by the appellant for resisting payment of the $10,000 due on the note given by Bruner to the insurance company, and secured by the trust deed given to Boone, are quite remarkable. It is conceded that the land embraced in the deed was regularly condemned for a street in 1868, and assessed at $36,000, without any deduction for benefits; and that no one was interested in it except Gregory, the owner of the fee, and Boone, as trustee for the insurance company, who held two deeds of trust thereon to secure two several notes for money loaned,-one for $10,000, before referred to, and one for a balance of $6,000. On March 22, 1869, the city paid Gregory, the owner of the equity of redemption, his proportion of the award, namely, $20,000, and on the 14th of May following the board of public works of the city gave him a voucher, showing the amount of the award, the payment made to him, and the balance still due, namely, $16,000, being the amount due to the insurance company and secured by the deeds of trust. This voucher Gregory indorsed with an order to pay the said balance to Boone as trustee of the insurance company in full of principal due said company for lien on the land, and delivered the same to him. Boone thereupon made demand on the city for this balance. On May 21, 1869, the city authorities gave notice that the assessments had been collected, and that the money was ready in the hands of the city treasurer to be paid over to the parties entitled; and on the 5th of June they paid to Boone, the trustee, $6,000, which he applied to the note on which that amount was due, which was sufficient to cancel the same. The balance of $10,000, though frequently demanded, was never paid, and this suit was brought by the appellee as assignee of the company, to recover the money or the land.

That it was the intent of the parties that Gregory should, and that they supposed he did, transfer to the company all claim to the balance of the award made for the land, over and above the $20,000 received by himself as owner of the equity of redemption, there cannot be the slightest doubt. The mortgagee was entitled to it, and it was the owner's duty to make the assignment, if any assignment was necessary; and it was, in fact, made, or supposed to be made, by the indorsement of the voucher to the trustee. It was sufficiently made to vest in the company, or its trustee, the entire equitable interest in the money and in such security for its payment as yet remained; and it was manifestly the duty of the city to pay it accordingly.

But, notwithstanding the notice to that effect, it seems that the city did not, at the time, have in hand the requisite funds to pay the last $10,000. The company, however, on receiving guaranties from other parties, who were interested in the street, that the interest should be paid at all events (there being some doubt whether the city would be liable for interest), consented to let the city take possession and go on with the improvement; but with the express reservation and condition that such consent was not to be a waiver or abandonment of any right against the debtor, or any right of suit against the city for the recovery of the money or the land. This indulgence on the part of the insurance company has been the prime cause of all the trouble experienced by it and its assignee (the present appellee) in collecting the said $10,000. It is conceded that he has never received his money; that the city has the land, and claims the right to keep it for the purposes of the street; that the assessed value was sufficient to pay this claim over and above what was due to others; and that the company was entitled to the money in 1869. Payment, however, is resisted, so far as we can understand the defence, on the ground that the company, being unable to get its money, treated the land as still subject to its claim, and directed its trustee to advertise and sell the same by way of foreclosure, and bid it in at such sale for the amount of the demand. This, the appellant contends, satisfied the debt. But the city still claimed the land, and resisted every attempt of the company to get possession of it. Actions of ejectment were brought, but were strenuously defended, and the company was forced to abandon them. The counsel for the city contended then, as they contend now, that by virtue of the condemnation proceedings all interests and titles in the land were condemned, as well that of the trustee under the trust deeds, as that of the owner of the fee. Hence their argument on the branch of the case is, that the proceedings for foreclosing the trust deed were illusory and vain. Therefore the company acquired no title by the foreclosure and sale, and its assignee, the appellee, has none.

It is thus supposed to be conclusively reasoned out, upon the soundest principles of logic, first, that the debt is satisfied by the foreclosure and purchase of the land; and, secondly, that all claim to the land was extinguished by the proceedings for condemnation. If this argument is sound, the appellee certainly has not a particle of ground to stand on. His debt is gone because he has got the security; and the security is gone because it was taken for the street; and yet the company, or its assignee, has not received a cent of money, nor any other consideration whatever.

When, by a train of abstract reasoning, we are brought to an absured conclusion, it behooves us carefully to reconsider the steps by which we have been led up to it. If the last conclusion of the appellent is well founded, namely, that there was nothing left for the deed of trust to operate upon, and that the proceedings in foreclosure were indeed illusory and vain, the first conclusion, that the debt was satisfied by the form of sale which was gone through in such proceedings, cannot be true.

It is admitted on all hands that the proceedings for condemning the land for a street were duly and properly pursued, and that the company waived its right to oppose the taking possession thereof by the city before payment of the assessment. The courts were probably right in holding, in the actions of ejectment which have been referred to, that the city could not be dispossessed. But as the company, when permitting the possession to be taken, reserved all its rights for the recovery of the money yet due, and as it is conceded that the city has not paid that money, it is surely against good conscience and every principle of equity to refuse to pay it. We think, therefore, that the company, or its assignee, standing in the position of mortgagee of the land, or, which is the same thing, as cestui que trust under the trust deed, and afterwards as assignee of the balance due on the award, had a clear ground of equity for filing the bill in this cause, and is entitled to a decree.

The question of interest has been largely discussed by counsel. But in our view of the matter it needs but little consideration. It has been the express statute law of Illinois, at least ever since 1845, that interest at the rate of six per cent per annum shall be allowed 'on money withheld by an unreasonable and vexatious delay of payment.' We have no hesitation in declaring that this is such a case. It is now more than twelve years since the property was condemned. The money has been due, and ought to have been paid long ago. It was the duty of the city to provide for its payment. Instead of that, it has litigated and contested the demand year after year, and in court after court.

It is unnecessary to make a minute examination of the statute law for ascertaining the days and times when, in the due course of proceeding, the money might have been collected from the owners of property benefited by the street. It is manifest that it might have been collected long before the commencement of this suit. But a party guilty of unreasonable and vexatious delay in making payment of a just claim cannot be relieved by offering to pay interest from the time when the delay began to be unreasonable and vexatious. If he is guilty of such delay, he is chargeable with interest on the debt from the time it became due as upon other debts enumerated in the law. We see nothing to criticise in the amount of interest allowed by the court below.

Decree affirmed.


text: Talk:Chicago v. Tebbetts/Opinion of the Court


text:
Barton v. Barbour

ERROR to the Supreme Court of the District of Columbia.

The facts are stated in the opinion of the court.

Mr. Saul S. Henkle for the plaintiff in error.

Mr. Linden Kent, contra.

MR. JUSTICE WOODS delivered the opinion of the court.

title: Barton v. Barbour


text: Talk:Barton v. Barbour

title: Talk:Barton v. Barbour


text:
Barton v. Barbour/Opinion of the Court

This was a suit brought by Frances H. Barton, the plaintiff in error, against John S. Barbour, the defendant in error, as receiver of the Washington City, Virginia Midland, and Great Southern Railroad Company.

The declaration was as follows: 'The plaintiff, Frances H. Barton, sues the defendant, John S. Barbour, as receiver of the Washington City, Virginia Midland, and Great Southern Railroad Company, a corporation organized under a law of the State of Virginia, and doing business and having an office in the District of Columbia, for that the defendant, on the eleventh day of January, 1877, was running and operating a railroad through the State of Virginia, and upon said railroad the defendant was a common carrier of freight and passengers for hire. That, on the day and year aforesaid, the plaintiff was a passenger in a sleeping-car upon said railroad, and by reason of a defective and insufficient rail upon the track of said railroad the car in which the plaintiff was a passenger was thrown from the track and turned over down an embankment, and she was greatly hurt and injured, and her bodily health permanently injured; that the defendant did not use due care in relation to said defective rail, and the injury to the plaintiff was occasioned by the negligence and carelessness of the defendant, but the plaintiff used due care. The plaintiff claims $5,000 damages.'

To this declaration the defendant below filed a plea to the jurisdiction, in which he alleged that at the time of service of process on him he was the receiver of all the property, rights, and franchises of said railroad company, by virtue of a decree made by the Circuit Court for the city of Alexandria, in the State of Virginia, on July 13, 1876, in a cause depending on the equity side of said court, wherein John C. Graham, who sued for himself and others, was complainant, and said railroad company and others were defendants; that said decree authorized him to defend all actions brought against him as such receiver, by the leave of said court, and declared that he should not in any case incur any personal or individual liability in conducting the business of said railroad, by reason of any act done by him or his servants, he acting in good faith and in the exercise of his best discretion, but that the property in his hands as such receiver should nevertheless be chargeable with any claim which might be established in any action brought against him as such receiver under leave of the court first had and obtained.

The plea then averred that the plaintiff had not obtained leave of said court to bring and maintain said suit. Wherefore the defendant prayed judgment whether the court could or would take further cognizance of said action.

The plaintiff filed the general demurrer to the plea.

The court below gave judgment overruling the demurrer, and against the plaintiff for costs. She prosecutes this writ of error to reverse that judgment.

The question presented by the record is the sufficiency of the plea to the jurisdiction of the court.

The defendant insists that the Supreme Court of the District of Columbia had no jurisdiction to entertain the suit without leave of the court by which he was appointed receiver.

It is a general rule that before suit is brought against a receiver leave of the court by which he was appointed must be obtained. Davis v. Gray, 16 Wall. 203, and the cases there cited. But the learned counsel for the plaintiff in error strenuously contends that the only consequence resulting from prosecuting the suit without such leave is that the plaintiff may be restrained by injunction or attached for contempt, and that the rule applies only to cases where the suit is brought to take from the receiver property whereof he is in possession by order of the court. We conceive that the rule is not so limited.

The evident purpose of a suitor who brings his action against a receiver without leave is to obtain some advantage over the other claimants upon the assets in the receiver's hands. His judgment, if he recovered one, would be against the defendant in his capacity as receiver, and the execution would run against the property in his hands as such. Hall v. Smith, 2 Bing. 156; Camp v. Barney, 4 Hun (N. Y.), 373; Commonwealth v. Runk, 26 Pa. St. 235; Thompson v. Scott, 4 Dill. 508.

If he has the right, in a distinct suit, to prosecute his demand to judgment without leave of the court appointing the receiver, he would have the right to enforce satisfaction of it. By virtue of his judgment he could, unless restrained by injunction, seize upon the property of the trust or attach its credits. If his judgment were recovered outside the territorial jurisdiction of the court by which the receiver was appointed, he could do this, and the court which appointed the receiver and was administering the trust assets would be impotent to restrain him. The effect upon the property of the trust, of any attempt to enforce satisfaction of his judgment, would be precisely the same as if his suit had been brought for the purpose of taking property from the possession of the receiver. A suit therefore, brought without leave to recover judgment against a receiver for a money demand, is virtually a suit the purpose of which is, and effect of which may be, to take the property of the trust from his hands and apply it to the payment of the plaintiff's claim, without regard to the rights of other creditors or the orders of the court which is administering the trust property. We think, therefore, that it is immaterial whether the suit is brought against him to recover specific property or to obtain judgment for a money demand. In either case leave should be first obtained.

And it has been so held in effect by this court. In Wiswall v. Sampson (14 How. 52), this court said: 'It has been argued that a sale of the premises on execution and purchase occasioned no interference with the possession of the receiver, and hence no contempt of the authority of the court, and the sale, therefore, in such a case should be upheld. But, conceding the proceedings did not disturb the possession of the receiver, the argument does not meet the objection. The property is a fund in court to abide the result of the litigation, and to be applied to the payment of the judgment creditor who has filed his bill to remove impediments in the way of his execution. If he has succeeded in establishing his right to the application of any portion of the fund, it is the duty of the court to see that such application is made. And in order to effect this, the court must administer it independently of any rights acquired by third persons pending the litigation. Otherwise the whole fund may have passed out of its hands before the final decree, and the litigation become fruitless.'

So in Ames v. Trustees of Birkenhead Docks (20 Beav. 332), Lord Romilly, Master of the Rolls, said that it is an idle distinction that the rule forbidding any interference with property in the course of administration in the Court of Chancery, only applies to property actually in the hands of the receiver, and declared that it applied to debts, rents, and tolls, which the receiver was appointed to receive.

It is next asserted by the plaintiff that the fact that the receiver in this case is in possession of, and is conducting the business of, a railroad as a common carrier, takes his case out of the rule that he is only answerable to the court by which he is appointed, and cannot be sued without its leave. Her contention is that parties who deal with such a receiver, either as freighters or passengers upon his railroad, may for any injury suffered, either in person or property, sue him without leave of the court by which he was appointed.

We do not perceive how the fact that the receiver, under the orders of the court, is doing the business usually done by a common carrier makes his case any exception to the rule under consideration. It was said by this court in Cowdrey v. ''Galveston, &c. Railroad Co.'' (93 U.S. 352), that 'the allowance for goods lost in transportation, and for damages done to property whilst the road was in the hands of the receiver, was properly made. The earnings received were as much chargeable with such loss and damage as they were chargeable with the ordinary expenses of managing the road. The bondholders were only entitled to what remained after charges of this kind, as well as the expenses incurred in their behalf, were paid.' This puts claims against the receiver, in his capacity as a common carrier, on the same footing precisely as the salaries of his subordinates, or as claims for labor and material used in carrying on the business. If a passenger on the railroad, who is injured in person or property by the negligence of the servants of the receiver, can, without leave, sue him to recover his damages, then every conductor, engineer, brakeman, or track-hand can also sue for his wages without leave. To admit such a practice would be to allow the charges and expenses of the administration of a trust property in the hands of a court of equity to be controlled by other courts, at the instance of impatient suitors, without regard to the equities of other claimants, and to permit the trust property to be wasted in the costs of unnecessary litigation.

Such is not the course and practice of courts of equity in administering a trust estate. The costs and expenses of the trust are allowed by the court upon a reference to its own master. If the adjustment of the claim involves any dispute in regard to the alleged negligence of the receiver, or any other fact upon which his liability depends, or in regard to the amount of the damages sustained by a party, the court, in a proper case, in the exercise of its legal discretion, either of its own motion or on the demand of the party injured, may allow him to sue the receiver in a court of law, or direct the trial of a feigned issue to settle the contested facts.

The claim of the plaintiff, which is against the receiver for a personal injury sustained by her while travelling on the railroad managed by him, stands on precisely the same footing as any of the expenses incurred in the execution of the trust, and must be adjusted and satisfied in the same way.

We, therefore, think that the demand of the plaintiff is not of such a nature that it may of prosecuted by suit without leave of the court.

The plaintiff lastly contends that want of leave to bring the suit does not take away the jurisdiction of the court in which it was brought to hear and determine it, but only subjects the plaintiff to liability to be attached for contempt, or to be enjoined from its further prosecution. In other words, she says that leave to prosecute the suit is not a jurisdictional fact, and that, therefore, the plea to the jurisdiction should not have been sustained.

Our decision upon this question will be limited to the facts of this case, which are that the receiver was appointed by a court of the State of Virginia, and the property in course of administration was in that State; the suit was brought in a court of the District of Columbia, a foreign jurisdiction, and the cause of action was an injury received by plaintiff in the State of Virginia, by reason of the negligence of the defendant while carrying on the business of a railroad, under the orders of the court by which he was appointed. No leave was obtained to bring the suit, and it does not appear that any application was made, either to the receiver or to the court by which he was appointed, to allow and pay the demand of the plaintiff.

Upon these facts we are of opinion that the Supreme Court of the District of Columbia had no jurisdiction to entertain a suit.

This point has been substantially settled by this court in the case of Peale v. Phipps, 14 How. 368.

In that case it appeared that, under a law of the State of Mississippi, by the decree of the Circuit Court of Adams County in that State, the charter of the Agricultural Bank at Natchez was declared forfeited and the corporation dissolved, and Peale, the plaintiff in error, appointed trustee and assignee of its assets, and was the sole legal representative of the corporation; that he became legally liable to the creditors of the bank to the extent of the assets, and that he had assets in his possession sufficient to pay all the debts of the corporation. The defendants in error claimed that there was due them from the bank a large sum of money on account of mesne profits, &c., of certain real estate in Natchez, from which they had been unlawfully expelled by the bank, and the possession of which they had recovered from the bank in an action of ejectment. The defendants in error presented their claim to Peale, the receiver, for allowance as a valid claim against the bank, who refused to admit or allow it, or any part of it.

Thereupon the defendant in error brought suit against Peale in the United States Circuit Court for the Eastern District of Louisiana, to recover said mesne profits, and effected service upon him in that district. Peale, among other defences, filed an exception, in which he denied the jurisdiction of the court. This was overruled and judgment was rendered against him for $20,058, to be satisfied out of the assets of the bank in the hands of Peale as trustee. The case havinb been brought on error to this court, the judgment was reversed. The court, Mr. Chief Justice Taney delivering its opinion, said: 'As we think this exception,' the one just mentioned, 'decisive against the jurisdiction of the Circuit Court of Louisiana, it is unnecessary to set out the other exceptions. We see no ground upon which the jurisdiction of the court can be sustained. The plaintiff in error held the assets of the bank as the agent and receiver of the court of Adams County and subject to its order, and was not authorized to dispose of any assets or pay any debts due from the bank, except by order of the court. He had given bond for the performance of his duty, and would be liable to an action if he paid any claim without the authority of the court from which he received his appointment and to which he was accountable. The property in legal contemplation was in the custoday of the court of which he was an officer, and had been placed there by the laws of Mississippi. And while it thus remained in the custoday and possession of that court, awaiting its order and decision, no other court had a right to interfere with it and wrest it from the hands of its agent and thereby put it out of his power to perform his duty.' And the court declared that the facts stated in the petition showed 'that the Circuit Court of Louisiana had no jurisdiction' of the case.

That case differs from the one now under consideration only in this, that it was a suit to recover a judgment against the trustee and receiver upon a demand due from the bank before his appointment; while the present case seeks to establish a demand against the receiver for a claim which, according to the decision of this court (Cowdrey v. Galveston, &c. Railroad Co., supra), forms a part of the charges and expenses of executing that trust. Such charges are specially subject to the control and allowance of the court which is administering the trust property.

We think, therefore, that the case just cited is decisive of this.

The argument is much pressed, that by leaving all questions relating to the liability of receivers in the hands of the court appointing them, persons having claims against the insolvent corporation, or the receiver, will be deprived of a trial by jury. This, it is said, is depriving a party of a constitutional right. To support this view the following cases are cited: Palys v. Jewett, New Jersey Court of Error and Appeals, Am. Law Reg., Sept., 1880, 553; Kinney v. Crocker, 18 Wis. 74; Allen v. Central Railroad of Iowa, 42 Iowa, 683.

But those who use this argument lose sight of the fundamental principle that the right of trial by jury, considered as an absolute right, does not extend to cases of equity jurisdiction. If it be conceded or clearly shown that a case belongs to this class, the trial of questions involved in it belongs to the court itself, no matter what may be its importance or complexity.

Thus, upon a bill filed for an injunction to restrain the infringement of letters-patent, and for an account of profits for past infringement, it is now the constant practice of courts of equity to try without a jury issues of fact relating to the title of the patentee, involving questions of the novelty, utility, prior public use, abandonment, and assignment of the invention patented. The jurisdiction of a court of equity to try such issues according to its own course of practice is too well settled to be shaken. Rubber Company v. Goodyear, 9 Wall. 788; Cawood Patent, 94 U.S. 695; Marsh v. Seymour, 97 id. 348.

So, in cases of bankruptcy, many incidental questions arise in the course of administering the bankrupt estate, which would ordinarily be pure cases at law, and in respect of their facts triable by jury, but, as belonging to the bankruptcy proceedings, they become cases over which the bankruptcy court, which acts as a court of equity, exercises exclusive control. Thus a claim of debt of damages against the bankrupt is investigated by chancery methods. The bankruptcy court may, and in cases peculiarly requiring such a course will, direct an action or an issue at law to aid it in arriving at a right conclusion. But this rests in its sound discretion. True, if one claims that the assignee has wrongfully taken possession of his property as property of the bankrupt, he is entitled to sue him in his private capacity as a wrong-doer in an action at law for its recovery.

Very analogous to the case of an assignee in bankruptcy is that of a receiver of an insolvent railroad company or other corporation. Claims against the company must be presented in due course, as the court having charge of the case may direct. But if, by mistake or wrongfully, the receiver takes possession of property belonging to another, such person may bring suit therefor against him personally as a matter of right; for in such case the receiver would be acting ''ultra vires. Parker v. Browning, 8 Paige (N. Y.), 388; Paige v. Smith'', 99 Mass. 395; Hills v. Parker, 111 id. 508. So far the case seems plain. But if claims arise against the receiver as such, whilst acting under the powers conferred on him, whether for labor performed, for supplies and materials furnished, or for injury to persons or property, then a question of some difficulty arises as to the proper mode of obtaining satisfaction and redress. The new and changed condition of things which is presented by the insolvency of such a corporation as a railroad company has rendered necessary the exercise of large and modified forms of control over its property by the courts charged with the settlement of its affairs and the disposition of its assets. Two very different courses of proceeding are presented for adoption. One is the old method, usually applied to banking, insurance, and manufacturing companies, of shutting down and stopping by injunction all operations and proceedings, taking possession of the property in the condition it is found at the instant of stoppage, and selling it for what it will bring at auction. The other is to give the receiver power to continue the ordinary operations of the corporation, to run trains of cars, to keep the tracks, bridges, and other property in repair, so as to save them from destruction, and as soon as the interest of all parties having any title to or claim upon the corpus of the estate will allow, to dispose of it to the best advantage for all, having due regard to the rights of those who have priority of claim.

It is evident that the first method would often be highly injurious, and result in a total sacrifice of the property. Besides, the cessation of business for a day would be a publie injury. A railroad is authorized to be constructed more for the public good to be subserved, than for private gain. As a highway for public transportation it is a matter of public concern, and its construction and management belong primarily to the Commonwealth, and are only put into private hands to subserve the public convenience and economy. But the public retain rights of vast consequence in the road and its appendages, with which neither the company nor any creditor or mortgagee can interfere. They take their rights subject to the rights of the public, and must be content to enjoy them in subordination thereto. It is, therefore, a matter of public right by which the courts, when they take possession of the property, authorize the receiver or other officer in whose charge it is placed to carry on in the usual way those active operations for which it was designed and constructed, so that the public may not suffer detriment by the non-user of the franchises. And in most cases the creditors cannot complain, because their interest as well as that of the public is promoted by preventing the property from being sacrificed at an untimely sale, and protecting the franchises from forfeiture for non-user.

As a choice, then, of least evil, if not of the most positive good (but generally of the latter also), it has come to be settled law that a court of equity may, and in most cases ought to, authorize its receiver of railroad property to keep it in repair, and to manage and use it in the ordinary way until it can be sold to the best advantage of all interested. The power of the court to do this was expressly recognized in Wallace v. Loomis, 97 U.S. 146.

But here arises a dilemma. If the receiver is to be suable as a private proprietor of the railroad would be, or as the company itself whilst carrying on the business of the railroad was, it would become impossible for the court to discharge its duty to preserve the property and distribute its proceeds among those entitled to it according to their equities and priorities. It has, therefore, been found necessary, and has become a common practice for a court of equity, in its decree appointing a receiver of a railroad property, to provide that he shall not be liable to suit unless leave is first obtained of the court by which he was appointed.

If the court below had entertained jurisdiction of this suit, it would have been an attempt on its part of adjust charges and expenses incident to the administration by the court of another jurisdiction of trust property in its possession, and to enforce the payment of such charges and expenses out of the trust property without the leave of the court which was administering it, and without consideration of the rights and equities of other claimants thereto. It would have been an usurpation of the powers and duties which belonged exclusively to another court, and it would have made impossible of performance the duty of that court to distribute the trust assets to creditors equitably and according to their respective priorities.

We therefore declare it as our opinion that when the court of one State has a railroad or other property in its possession for administration as trust assets, and has appointed a receiver to aid it in the performance of its duty by carrying on the business to which the property is adapted, until such time as it can be sold with due regard to the rights of all persons interested therein, a court of another State has not jurisdiction, without leave of the court by which the receiver was appointed, to entertain a suit against him for a cause of action arising in the State in which he was appointed and in which the property in his possession is situated, based on his negligence or that of his servants in the performance of their duty in respect of such property.

Judgment affirmed.

MR. JUSTICE MILLER dissenting.

title: Barton v. Barbour/Opinion of the Court


text: Talk:Barton v. Barbour/Opinion of the Court