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Shields v. Ohio/Opinion of the Court

The plaintiff in error was the conductor of a train of cars upon the Lake Shore and Michigan Southern Railway, between Elvria and Cleveland. Ulrich was a passenger, intending to go from the former to the latter place. The intermediate distance was twenty-five miles. The fare fixed by the company was ninety cents. Ulrich offered to pay seventy-five cents, which w § at the rate of three cents per mile, and refused to pay more. The conductor ejected him from the train, and was thereupon indicted in the proper local court for assault and battery. The court instructed the jury that Ulrich had tendered the proper sum, and that Shields had no legal right to demand more. The case turned upon this point. It was not claimed that the defendant was guilty, if Ulrich was in the wrong. A verdict and judgment were given against Shields. The case was removed by a writ of error to the Supreme Court of the State. The judgment of the court below was affirmed. Shields sued out this writ of error, and brought the case here for review. The only question presented for our determination is his legal right to demand more than Ulrich offered to pay.

A brief chronological statement with respect to the provisions of the Constitution, and those of the laws of the State bearing upon the subject, is necessary to a clear presentation of the point to be decided.

1. An act passed March 2, 1846, incorporated the Junction Railroad Company, and authorized it to build a railroad from Cleveland to Elyria, and thence west. The eleventh section empowered the company to charge such tolls for the transportation of freight and passengers as it might deem 'reasonable.' The twenty-second section declared that after the lapse of ten years from the completion of the road the State might reduce the tolls 'should they be unreasonably high,' and might 'exercise the same power at intervals of every ten years thereafter.' It was upon the road built under this act that the present controversy arose.

2. The act of March 7, 1850, incorporated the Toledo, Norwalk, and Cleveland Company, and the charter was amended by an act of Jan. 20, 1851.

The twelfth section of the latter act declared that, in case the Junction Company should become consolidated with the Toledo, Norwalk, and Cleveland Company, the consolidated company might assume the name of the Cleveland and Toledo Railroad Company, and in that event should be governed by sects. 9, 10, 11, 15, and 17 of the act incorporating the Junction Company, and in other respects by the act incorporating the Toledo, Norwalk, and Cleveland Company, and the acts amendatory thereof. The twenty-second section of the act first named, which allowed the State, after the lapse of ten years, to regulate the tolls of the Junction Company in the event specified, is not one of the sections enumerated.

3. The act of March 3, 1851, was a general act, authorizing the consolidation of railroad companies coming within its provisions. The process was prescribed with great fulness of details. Sect. 3 declared: 'And such new corporation shall possess all the powers, rights, and franchises conferred upon such two or more corporations by the several acts incorporating the same, or relating thereto respectively, and shall be subject to all the duties imposed by such acts, so far as the same may be consistent with the provisions of this act.'

4. The Constitution of Ohio of 1851 took effect on the 1st of September in that year. It declared that 'no special privileges shall ever be granted that may not be altered, revoked, or repealed by the General Assembly.' Art. 1, sect. 2. 'The General Assembly shall pass no special act conferring corporate powers.' Art. 13, sect. 1. 'Corporations may be formed under general laws, but such general laws may from time to time be altered or repealed.' Art. 13, sect. 2.

5. On the 15th of June, 1853, the Junction Company be came consolidated with the Toledo, Norwalk, and Cleveland Company, pursuant to the provisions before mentioned of the acts of Jan. 20, 1851, and March 3, 1851.

6. The act of April 10, 1856, 4 Curwen, 2791, authorizes railroad companies of Ohio to consolidate with such companies of other States. The third section declares that such consolidated companies respectively 'shall be deemed and taken to be one corporation, possessing within the State all the rights, privileges, and franchises, and subject to all the restrictions, li bilities, and duties, of such corporations of this State so consolidated.' It was provided that the old stock should be extinguished, that a board of directors of the consolidated company should be elected, and that new stock should be created and issued to the parties entitled to it. Those refusing to receive it were to be paid the highest market price for their old stock.

The seventh section enacts 'that suits may be brought and maintained against such new corporation in the courts of this State for all causes of action, in the same manner as against other railroad companies of this State.'

7. On the 11th of February, 1869, by an agreement of that date, the Cleveland and Toledo and the Lake Shore Railroad Company became consolidated under the name of the Lake Shore Railway Company.

On the 6th of April, 1869, the Lake Shore and the Michigan Southern and Northern Indiana Railroad Companies were duly consolidated under the name of the Lake Shore and Michigan Southern Railway Company.

Shields, the plaintiff in error, was an employ e of this company when he ejected Ulrich.

8. The act of April 25, 1873, provides that 'any corporation operating a railroad in whole or in part in this State may demand and receive for the transportation of passengers over said road not exceeding three cents per mile for a distance of more than eight miles.'

The defendant in error insists that the power of the company in the case in hand was fixed and limited by this act. The plaintiff in error denies this, and maintains that the eleventh section of the first-named act of 1846 is the governing authority.

In support of this view, it is further maintained that this section was a contract, and that it was simply transferred to each successive consolidated corporation, including, finally, the Lake Shore and Michigan Southern Railway Company, and that at the time of the occurrence here in question it was in full force.

This renders it necessary to consider the legal status and character of the new corporation. In the present state of the law, a few remarks upon the subject will be sufficient.

The legislature had provided for the consolidation. In each case, before it took place, the original companies existed and were independent of each other. It could not occur without their consent. The consolidated company had then no existence. It could have none while the original corporations subsisted. All-the old and the new-could not coexist. It was a condition precedent to the existence of the new corporation that the old ones should first surrender their vitality and submit to dissolution. That being done, eo instanti the new corporation came into existence. But the franchise alone to be a corporation would have been unavailing for the purposes in view.

There is a material difference between such an artificial creation and a natural person. The latter can do any thing not forbidden by law. The former can do only what is authorized by its charter. Railroad Company v. Harris, 12 Wall. 65. It was, therefore, indispensable that other powers and franchises should be given. This was carefully provided for. The new organization took the powers and faculties designated in advance in the acts authorizing the consolidation,-no more and no less. It did not acquire any thing by mere transmission. It took every thing by creation and grant. The language was brief, and it was made operative by reference. But this did not affect the legal result. A deed inter partes may be made as effectual by referring to a description elsewhere as by reciting it in full in the present instrument. The consequence is the same in both cases.

If the argument of the learned counsel for the plaintiff in error be correct, the constitutional restrictions can be readily evaded. Laws may be passed at any time, enacting that all the valuable franchises of designated corporations antedating the Constitution shall, upon their dissolution, voluntary or otherwise, pass to and vest in certain newly created inst tutions of the like kind. The claim of the inviolability of such franchises would rest on the same foundation as the affirmation in the present case. The language of the Constitution is broad and clear, and forbids a construction which would permit such a result.

When the consolidation was completed, the old corporations were destroyed, a new one was created, and its powers were 'granted' to it, in all respects, in the view of the law, as if the old companies had never existed, and neither of them had ever enjoyed the franchises so conferred. The same legislative will created and endowed the new corporation. It did one as much as the other. In this respect, there is no ground for any distinction.

These views are sustained by several well-considered cases exactly in point. One of them embodies the unanimous judgment of this court. Clearwater v. Meredith, 1 Wall. 25; McMahan v. Morrison, 16 Ind. 172; The State of Ohio v. Sherman, 22 Ohio St. 411; Shields v. The State of Ohio, 26 id. 86.

The constitutional provision that 'no special privileges or immunities shall ever be granted that may not be altered, revoked, or repealed by the General Assembly,' entered into the acts under which the consolidations were made, and rendered the corporations created and the franchises conferred subject to repeal and alteration, just as if they had been expressly declared to be so by the act. The act of 1873, in the particular in question, was a legitimate exercise of the reserved power of alteration, and was, therefore, valid. Parker v. The Metropolitan Railroad Co., 109 Mass. 506.

Another branch of the argument of the counsel for the plaintiff in error calls for some further remarks.

It is urged that the franchise here in question was property held by a vested right, and that its sanctity, as such, could not be thus invaded. The answer is consensus facit jus. It was according to the agreement of the parties. The company took the franchise subject expressly to the power of alteration or repeal by the General Assembly. There is, therefore, no ground for just complaint against the State.

Where an act of incorporation is repealed, few questions of difficulty can arise. Equity takes charge of all the property and effects which survive the dissolution, and administers them as a trust fund, primarily for the benefit of the creditors. If any thing is left, it goes to the stockholders. Even the executory contracts of the defunct corporation are not extinguished. Curran v. State of Arkansas, 15 How. 304.

The power of alteration and amendment is not without limit. The alterations must be reasonable; they must be made in good faith, and be consistent with the scope and object of the act of incorporation. Sheer oppression and wrong cannot be inflicted under the guise of amendment or alteration. Beyond the sphere of the reserved powers, the vested rights of property of corporations, in such cases, are surrounded by the same sanctions and are as inviolable as in other cases. Two authoritative adjudications throw a strong light from opposite directions upon this subject. We cite them only for the purpose of illustration. In Miller v. N. Y. & E. Railroad Co., 21 Barb. (N. Y.) 513, the legislature, under the reserved power of alteration, required the company which had been previously incorporated to construct a highway across their road. The work was expensive, and of no benefit to the company. The act imposing the burden was held to be void.

In Mayor & Aldermen of Worcester v. Norwich & Worcester R. R. Co. and Others, 109 Mass. 103, the legislature had passed an act requiring the railroad companies therein named to unite in a passenger station in the city of Worcester (the place to be fixed as provided), to extend their tracks in the city to the Union station, and, after the extension, to discontinue parts of their existing locations. The act was held to be constitutional and valid, being a reasonable exercise of the right reserved to the legislature to amend, alter, or repeal the charters of those companies. See also The Commonwealth v. Essex Company, 13 Gray (Mass.), 239, and Crease v. Babcock, 23 Pick. (Mass.) 334.

It is unnecessary to pursue the subject further in this case.

Judgment affirmed.

MR. CHIEF JUSTICE WAITE did not sit in this case, nor take any part in deciding it.

title: Shields v. Ohio/Opinion of the Court


text: Talk:Shields v. Ohio/Opinion of the Court

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


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Globe Mutual Life Insurance Company v. Wolef

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

The Globe Mutual Life Insurance Company of New York, on the 5th of November, 1869, issued to Eliza Garber a policy of insurance for $5,000 upon the life of her husband, commencing on the 1st of that month. The premium was payable annually on the 1st of November. The policy stipulated for the payment of the amount of the insurance within sixty days after due notice and proof of the death of the insured, subject, however, to certain express conditions. One of these conditions provided, that, if the premiums were not paid on or before the days mentioned for their payment, the company should not be liable for the sum insured, or any part of it, and that the policy should cease and determine. Another condition provided, that, if the insured resided in any part of the United States south of the 33d degree of north latitude, except in California, between the 1st of July and the 1st of November, without the consent of the company previously given in writing, the policy should be null and void. And the policy declared that agents of the company were not authorized to make, alter, or discharge contracts, or waive forfeitures.

The insured died at the city of New Orleans on the 11th of November, 1872. Between the 1st of July and the 1st of November of that year he had resided at that city, which is south of the 33d degree of north latitude, without the previous consent in writing of the company; and the annual premium due on the first of that month was not paid on or before that day. Due notice and proof of his death having been given to the company, and payment by it refused, suit was brought by Mrs. Garber in the Circuit Court of St. Louis County, whence it was removed, on the petition of the company, to the Circuit Court of the United States for the Eastern District of Missouri. Judgment was rendered for the plaintiff, and the cause removed here by writ of error. Mrs. Garber died and Wolff, her executor, was made the defendant in error.

The other facts are stated in the opinion of the court.

Mr. John W. Noble for the plaintiff in error.

Mr. Montgomery Blair, contra.

MR. JUSTICE FIELD delivered the opinion of the court.


text: Talk:Globe Mutual Life Insurance Company v. Wolef


text:
Globe Mutual Life Insurance Company v. Wolef/Opinion of the Court

By the residence of the insured within the prohibited district of country during the period designated in the policy without the previous consent of the company, and the failure of the assured to pay the annual premium when it became due, the policy, by its express terms, was forfeited, and the company released from liability, unless the forfeiture was waived by the action of the company, or of its agents authorized to represent it in that respect.

The waiver of the forfei ure for the non-payment of the premium due on the 1st of November, 1872, is alleged on the ground that the premium was subsequently paid to an agent of the company, he delivering its receipt for the same, signed by its secretary, and countersigned by the manager and cashier of the local office, the plaintiff contending that the company, by its previous general course of dealing with its agents, and its practice with respect to the policy in suit, had authorized the premiums to be paid and the agent to receive the same after they became due, and thus had waived any right to a strict compliance with the terms of the policy as to the payment of premiums.

The waiver of the forfeiture arising from the residence within the prohibited district between the 1st of July and November, without the previous consent of the company, is also alleged from the subsequent payment of the premium and its receipt by the local agent, the plaintiff contending that the premium was received with knowledge by the agent of the previous residence of the insured within the prohibited district.

It appears from the record that the deceased was taken sick with the yellow fever at New Orleans, on the 6th or 7th of November, 1872, and died on the 11th of the month, between the hours of eleven and twelve in the forenoon. On the previous day a telegram was sent by Mrs. Garber from New Orleans to a gentleman in St. Louis, directing the latter to go to the agency of the company in that city, at which the policy was issued, and pay the premium due on the first of the month. Accordingly, on the following morning, at about nine o'clock, the premium was paid by this gentleman, and a renewal receipt was thereupon delivered to him. This renewal receipt was dated in New York, and signed by the secretary of the company. It not only acknowledged the receipt of the premium, but it continued the policy in force for another year. The practice of the company was to send to its agents in St. Louis receipts in this form, signed by its secretary, to be countersigned by the local manager and cashier before being used. The receipt given was thus countersigned. The payment was made in the present case to a boy in the office of the agent, and by him the renewal receipt was delivered. It was his habit to receive premiums and deliver the proper renewal receipt in the absence of the agent. In this case the money was given by him on the latter's coming to the office the same morning. The agent credited the amount to the company in his semi-monthly account transmitted to the home office. The gentleman who paid the premium was not aware at the time that the insured was sick, and no inquiries were made by the boy or the agent as to his health. It is conceded that they had no information on the subject. A few days afterwards, the agent learned of the death of the insured, and of the sickness which was the immediate cause of it, and informed the home office. The company at once telegraphed the agent to return the premium and demand a surrender of the renewal receipt. The money was accordingly tendered to the gentleman who paid it, and a surrender of the renewal receipt demanded; but the tender was not received, nor the receipt returned.

The conditions mentioned in the policy could, of course, be waived by the company, either before or after they were broken; they were inserted for its benefit, and it depended upon its pleasure whether they should be enforced. The difficulty in this case, and in nearly all cases where a waiver is alleged in the absence of written proof of the fact, arises from a consideration of the effect to be given to the acts of agents of the company in their dealings with the assured. Of course, such agents, if they bind the company, must have authority to waive a compliance with the conditions upon a breach of which the forfeiture is claimed, or to waive the forfeiture when incurred, or their acts waiving such compliance or forfeiture must be subsequently approved by the company. The law of agency is the same, whether it be a plied to the act of an agent undertaking to continue a policy of insurance, or to any other act for which his principal is sought to be held responsible.

The principle that no one shall be permitted to deny that he intended the natural consequences of his acts when he has induced others to rely upon them, is as applicable to insurance companies as it is to individuals, and will serve to solve the difficulty mentioned. This principle is one of sound morals as well as of sound law, and its enforcement tends to uphold good faith and fair dealing. If, therefore, the conduct of the company in its dealings with the assured in this case, and with others similarly situated, has been such as to induce a belief that so much of the contract as provides for a forfeiture if the premium be not paid on the day it is due, would not be enforced if payment were made within a reasonable period afterwards, the company ought not, in common justice, to be permitted to allege such forfeiture against one who has acted upon the belief, and subsequently made the payment. And if the acts creating such belief were done by the agent and were subsequently approved by the company, either expressly or by receiving and retaining the premiums, the same consequences should follow.

This principle applied to the case at bar will render the question presented one of easy solution. The company, notwithstanding the provision in the policy that its agents were not authorized to waive forfeitures, sent to them renewal receipts signed by its secretary, to be used when countersigned by its local manager and cashier, leaving their use subject entirely to the judgment of the local agent. The propriety of their use, in the absence of any fraud in the matter, could not afterwards be questioned by the company. Accompanying these receipts was a notice, printed on the same paper, that policies which became null for non-payment might be renewed at the home office, within a reasonable thim, upon furnishing satisfactory evidence of good health, such satisfactory evidence being left to the judgment of the local agent, and the renewal by the home office consisting of a receipt signed by its secretary, transmitted to such agent, to be used when countersigned by the local manager and cashier. It was the habit of the agent to give such renewal receipts whenever the premiums were paid after the time stipulated; and his accounts to the home office showed such subsequent payment. His action in this respect was not questioned by the company; and the premiums were retained by it without any pretence that the policies had ceased to be obligatory for want of punctuality in their payment. The mode of dealing by the agent with persons taking out policies at the local office, his use of renewal receipts, his acceptance of premiums after the day on which they were payable, were all known to the home company, and its retention of the premiums thus received was an approval of his acts. So far, then, as the waiver of the forfeiture incurred for non-payment of the premiums is concerned, it is clear that the company, by its course of dealing, had, notwithstanding the provision of the policy, left the matter to be determined by its local agent, to whom the renewal receipts were intrusted.

But, so far as the forfeiture arose from the residence of the insured within the prohibited district, the case is different. There is nothing in the acts of the company which goes to show that it ever authorized its agents to waive a forfeiture thus incurred, or that it ever knew of any residence of the insured within the prohibited district until informed of his death there. In every case where premiums were received after the day they were payable, the fact that a forfeiture had been incurred was made known to the company from the date of the payment, and the retention of the money constituted a waiver of the forfeiture; but no information of a forfeiture on any other ground was imparted by the date of such payment. The agent receiving the premium, in the case at bar, testified that e knew nothing of the residence of the insured within the prohibited district during the excepted period, and the evidence in conflict with his testimony was slight. He knew that the insured had a place of business there, and that he was permitted to make occasional visits there within that period, and to reside there at other times. Every thing produced as evidence of knowledge of residence within the prescribed district is consistent with these occasional visits and residence at other times than during the excepted period. But, even if the agent knew the fact of residence within the excepted period, he could not waive the forfeiture thus incurred, without authority from the company. The policy declared that he was not authorized to waive forfeitures; and to the provision effect must be given, except so far as the subsequent acts of the company permitted it to be disregarded. There is no evidence that the company in any way, directly or indirectly, sanctioned a disreregard of the provision with reference to any forfeitures, except such as occurred from non payment of premiums. As soon as it was informed of the residence of the insured within the prohibited district, it directed a return of the premium subsequently paid. It would be against reason to give to the receipt of the premium by the agent, under the circumstances stated, the efficacy claimed. The court, in its instructions, treated the receipt of the premium by the agent, with knowledge of the previous residence of the insured within the prohibited district, if the agent had such knowledge, as itself a sufficient waiver of the forfeiture incurred, without any evidence of the action of the company when informed of such residence; and in this respect we think the court erred. It is essential that the company should have had some knowledge of the forfeiture, before it can be held to have waived it.

It is true, that, where an agent is charged with the collection of premiums upon policies, it will be presumed that he informs the company of any circumstances coming to his knowledge affecting its liability; and, if subsequently the premiums are received by the company without objection, any forfeiture in curred will be presumed to be waived. But here there was no ground for any inference of this kind from the subsequent action or silence of the company. There was no evidence of a disregard of the condition as to the residence of the insured in any previous year, and, consequently, there could be no inference of a waiver of its breach from a subsequent retention of the premium paid. This is a case where immediate enforcement of the forfeiture incurred was directed when information was received that the condition of the policy in that respect had been broken.

Not only should the company have been informed of the forfeiture before it could be held by its action to have waived it, but it should also have been informed of the condition of the health of the insured at the time the premium was tendered, upon the payment of which the waiver is claimed. The doctrine of waiver, as asserted against insurance companies to avoid the strict enforcement of conditions contained in their policies, is only another name for the doctrine of estoppel. It can only be invoked where the conduct of the companies has been such as to induce action in reliance upon it, and where it would operate as a fraud upon the assured if they were afterwards allowed to disavow their conduct and enforce the conditions. To a just application of this doctrine it is essential that the company sought to be estopped from denying the waiver claimed should be apprised of all the facts: of those which create the forfeiture, and of those which will necessarily influence its judgment in consenting to waive it. The holder of the policy cannot be permitted to conceal from the company an important fact, like that of the insured being in extremis, and then to claim a waiver of the forfeiture created by the act which brought the insured to that condition. To permit such concealment, and yet to give to the action of the company the same effect as though no concealment were made, would tend to sanction a fraud on the part of the policy-holder, instead of protecting him against the commission of one by the company.

It follows that the judgment must be reversed, and the cause remanded for a new trial; and it is

So ordered.


text: Talk:Globe Mutual Life Insurance Company v. Wolef/Opinion of the Court


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United States v. Babbitt (95 U.S. 334)

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

This is an action of debt upon a bond given by Lysander W. Babbitt and the other defendants to the United States, on the ninth day of May, 1853, to recover the sum of $10,000 alleged to have been charged and received by him, during his term of office, as fees for the location of military bounty-land warrants under the provisions of the acts of Congress approved the 11th of February, 1847, the 28th of September, 1850, the 22d of March, 1852, and the 3d of March, 1855, over and above the maximum compensation of $3,000 which he, as such register, was authorized to retain. The bond was conditioned as follows:--

'Whereas the President of the United States hath, pursuant to law, appointed the said Lysander W. Babbitt register of the land-office for the district of land subject to sell at Kanesville, in the State of Iowa, for the term of four years from the sixth day of April, 1853, by commission dated the eighth day of April, 1853: Now, therefore, if the said Lysander W. Babbitt has truly and faithfully executed and discharged, and shall continue truly and faithfully to execute and discharge, all the duties of the said office, according to law, then the above obligation to be void and of none effect; otherwise it shall abide and remain in full force and virtue.'

The defendants, Hall and Burnett, as the sureties on the bond, among other pleas, pleaded separately for themselves that it was no part of the official duties of Babbitt, as such register, to receive the said fees, and that he was not required, by the obligations of said bond, to pay the same to the United States.

Babbitt, for himself alone, among other pleas, pleaded the same defence.

To each of these several pleas the United States demurred.

The court overruled the demurrers, and rendered final judgment in favor of all the defendants.

On the hearing of the demurrers and in the rendition of said judgment, the judges were opposed in opinion upon two questions, which are set forth in the opinion of the court. The United States sued out this writ of error.

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

No counsel appeared for the defendants in error.

MR. JUSTICE SWAYNE delivered the opinion of the court.

title: United States v. Babbitt (95 U.S. 334)


text: Talk:United States v. Babbitt (95 U.S. 334)


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United States v. Babbitt (95 U.S. 334)/Opinion of the Court

This case comes before us upon a certificate of a division of opinion of the judges by whom the case was tried in the Circuit Court.

The questions certified are:--

1. Whether it was the duty of the defendant Babbitt, as register of the land-office, to receive the register's fees from the locators of military bounty-land warrants, upon their being located on the public lands, subject to private entry by such warrants, under the acts of Feb. 11, 1847, Sept. 28, 1850, March 22, 1852, and March 3, 1855.

2. Whether, if such fees were charged and received by Babbitt, as such register, his neglect and refusal to account for and pay over to the United States the surplus, over and above the maximum compensation authorized to be by him received, as determined in this case by the Supreme Court of the United States, in United States v. Babbit, 1 Black, 55, constitutes a breach of the conditions of the official bond of Babbitt, as register, as respects himself alone, and also as respects the sureties in the bond, and whether in such case the remedy is not by an action against Babbitt for money had and received.

The reported case, to which reference is made, contains a careful analysis of the acts of Congress mentioned in the first question, and of several others r lating to the subject. It is unnecessary to go over the same ground again, or to reproduce any thing there said.

It was held in that case that $3,000 per annum was the maximum compensation allowed to the register by law, and that he was not entitled to hold in addition the fees in question in his own right.

The act of March 3, 1853, requires that 'the surplus which shall remain' of such fees, beyond the compensation to which the register is entitled, 'shall be paid into the Treasury of the United States as other moneys.'

There could be no paying without previous receiving. The latter duty is explicitly declared. The prior one is as clearly to be inferred. Both would be alike implied in the absence of the provision as to paying over.

What is implied in a statute, will, deed, or contract is as much a part of it as what is expressed. United States v. Babbit, supra.

The first question certified must, therefore, be answered in the affirmative.

To the second it must be answered, that, if the register received such fees, the neglect and refusal to pay over to the United States the surplus beyond the compensation to which he was entitled by law was a breach of the condition of his official bond, both as respects himself and the sureties in the bond, and that the United States is under no necessity to proceed against the principal in the bond by an action on the case for money had and received.

The judgment will be reversed, and the cause remanded for further proceedings in conformity to this opinion; and it is

So ordered.


text: Talk:United States v. Babbitt (95 U.S. 334)/Opinion of the Court


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Bergdoll v. Pollock

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

On the 22d of January, 1874, the Commissioner of Internal Revenue, acting under the authority of sect. 2 of 'An Act for the reduction of officers and expenses of the internal revenue,' approved Dec. 24, 1872, 17 Stat. 402, Rev. Stat. 3182, assessed a tax of $1,350 on Bergdoll & Psotta, the plaintiffs, for 'one thousand three hundred and fifty barrels of beer sold and removed, & c., without proper stamps, to Oct. 1, 1873.' This assessment having been duly certified to the collector, the tax was paid upon compulsion and under protest. An appeal was then made to the commissioner, under the act of 1864, sect. 44, 13 Stat. 239, as amended in 1866, 14 Stat. 111, Rev. Stat., sect. 3226, to refund the amount paid, which being denied, this action was brought against Pollock, the collector, to recover back the money.

Upon the trial, the plaintiffs offered to prove by witnesses on the stand that, from the date at which the internal revenue act of 1866 went into effect, until the assessment complained of was made, 'no beer was sold or removed from their brewery for consumption or sale except in barrels or parts of barrels, which were all duly stamped with an internal revenue stamp,. . . as required by the act of Congress;' that they 'had made their monthly returns to the collector regularly until and including the month of December, 1873; that there was no understatement or undervaluation in either of said returns of the quantity of beer brewed, or of beer sold or removed from their brewery for consumption or sale, and that neither of the returns was false or fraudulent.' This testimony was excluded by the court, and exceptions taken. Judgment having been rendered against the plaintiffs, they sued out this writ of error.

The errors relied upon are: 1. That the assessment is insufficient in law, because too indefinite and uncertain; and, 2. That the testimony offered was improperly rejected.

Mr. William S. Price for the plaintiffs in error.

Mr. Assistant Attorney-General Smith, contra.

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

title: Bergdoll v. Pollock


text: Talk:Bergdoll v. Pollock

title: Talk:Bergdoll v. Pollock


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Bergdoll v. Pollock/Opinion of the Court

The record presents only the exceptions to the exclusion of the testimony. The objection that the assessment is insufficient in law, because too indefinite and uncertain, cannot be considered ere, as it does not appear to have been taken below.

The acts under which the tax was assessed-17 Stat. 402, sect. 2; 14 Stat. 104, sect. 9, amending sect. 20 of act of 1864; Rev. Stat., sect. 3182-make it the duty of the Commissioner of Internal Revenue, in any case where upon inquiry it shall be ascertained that any list which has been delivered to a collector is imperfect or incomplete, in consequence of any omission or understatement or undervaluation or false or fraudulent statement contained in any return or returns made by any persons or parties liable to tax, to enter upon any monthly or special list, at any time within fifteen months after the delivery of such incomplete list, the names of the persons or parties in respect to whose returns there have been any omission, &c., together with the amounts for which such persons or parties may be liable over and above the amount assessed upon the return, and to certify the list to the collector, to be proceeded with according to law. By sect. 44 of the act of 1864, 13 Stat. 239, as amended in 1866, 14 Stat. 111, Rev. Stat., sect. 3225, it is provided that, where a second assessment has been made pursuant to this authority, such assessment shall not be remitted, nor shall taxes collected under such assessment be recovered, refunded, or paid back, unless it is proved that the list, statement, or return was not false or fraudulent, and did not contain any understatement or undervaluation. This is a case of second assessment, and the question presented is as to the manner in which a manufacturer of fermented liquors may be permitted to prove that his returns did not contain an understatement.

The 'Act to reduce duties on imports and to reduce internal taxes, and for other purposes,' passed June 6, 1872, 17 Stat. 245, as amended Dec. 24, 1872, 17 Stat. 401, sect. 1, provides in sect. 19, Rev. Stat., sect. 3337, that every manufacturer of fermented liquors shall from day to day enter or cause to be entered, in a book to be kept by him for that purpose, the estimated quantity produced, in barrels, and the actual quantity sold or removed for consumption or sale, in barrels, or fractional parts of barrels; and shall also from day to day enter or cause to be entered, in a separate book to be kept by him for that purpose an account of all materials by him purchased for the purpose, of producing such fermented liquors, including grain and malt, and render to the collector of internal revenue for the district, on or before the tenth day of each month, a true statement, in writing, taken from his books, of the estimated quantity, in barrels, of such liquors brewed and the actual quantity sold; and verify or cause to be verified such statement and the facts therein set forth, by oath or affirmation. These books are to be open at all times for the inspection of the collector, deputy-collector, inspector, or revenue agent, who may take memorandums and transcripts therefrom. Sect. 20 requires the verification of the entries made upon these books by the oaths of the party making them and of the manufacturer, on or before the 10th of each month.

The taxes are to be paid by stamps purchased from the collector of the district and affixed to the packages. Sect. 23. In this way, by a comparison of the returns with the account for stamps sold, a collector can always tell whether the taxes upon the reported production have been paid, and, by a comparison of the estimated production with the actual production as returned and with the quantity of material purchased, he can judge as to the probable honesty of the returns. The entries in the books are intended to be for the mutual protection of the government and the manufacturer. As was said in Dandelet v. Smith, 18 Wall. 647, 'The exact truth always lies in the knowledge of the manufacturer. His books show, or ought to show, every thing that he has produced; and, in an investigation of this kind, if he shows that his returns or stamps fully equal the amount of his production, the burden will then b on the government to show a deficiency.' An honest manufacturer who has kept accurate books has always at hand the ready means of establishing the fact of his compliance with the law.

His return is to be 'a true statement, in writing, taken from his books.' To prove, therefore, the accuracy of his returns, he has but to refer to his books. Parol testimony is only required for the identification of the books. That being done, the books and the returns speak for themselves. Nothing more is required, except to institute the necessary comparison. So, too, of the payment of the tax. The law specifies the amount of the tax upon each package, and the books show, or ought to show, the number of packages. The books also show, or ought to show, the quantity of material purchased for use. Experience has demonstrated what the ordinary production from a given quantity of material is. If the production as shown by the books differed from that which ordinarily would be the yield of the material purchased, the burden, as the law then stood, was cast upon the manufacturer after a reassessment to account for the discrepancy. It is unnecessary now to decide whether this rule of evidence has been changed by the 'Act to define the tax on fermented or malt liquors,' passed May 13, 1876. 19 Stat. 53. The proper mode of overcoming this burden is not by showing that no packages have been removed without the requisite stamp, but by proof of what was actually drawn from the fermenting vessels. The reasonable presumption is that the production of one brewer will not vary materially from the average of production of others operating under similar circumstances and manufacturing a similar article. If it does, an experienced manufacturer ought to be able to account for the difference. For this purpose, his books, which the law makes it his duty to keep, will, if kept as the law requires, furnish the evidence of his daily transactions, and enable him at once, when a deficiency appears, to secure the evidence with which to make the necessary explanation, should one be called for. It he produces a better article by the use of a larger quantity of material, or has sustained special losses in the process of manufacture, or afterwards and before removal, or has sold a part of his material without use, by having his attention called through his daily entries to an apparent deficiency in his production, he can prepare himself for defence against any charge which may grow out of it. His books are not necessarily conclusive for or against the government under all circumstances; but if properly kept, as they must be to avoid the penalties of the law, they ought, so to speak, to furnish the base from which his evidence must spring. If they do not, it is his own fault, and he must suffer the consequences. Certainly, the law does not contemplate that he may relieve himself from the effect of insufficient or improper entries by a resort primarily to the uncertain recollection or knowledge of witnesses as to circumstances which in any event can have only a remote bearing upon the ultimate fact to be established. We do not say that, in the progress of a trial and under some circumstances, such proof as was offered as to removals may not be competent; but we are clearly of the opinion that no foundation was laid in this case for its introduction. The books, with proper explanations in respect to entries which appear in them, ought to constitute the best evidence in the case; and, until it is shown that they cannot be produced, or that they do not contain the information required, no evidence of such remote circumstances is admissible. In this case, there was no attempt to account for the absence of the books, or any claim of defective entries, and we think the court did not err in excluding the testimony.

The other questions presented in the brief filed for the government were not raised in the court below, and need not be considered here.

Judgment affirmed.


text: Talk:Bergdoll v. Pollock/Opinion of the Court


text:
Merchants' National Bank v. Cook

APPEAL from the Circuit Court of the United States for the

Southern District of Ohio.

The facts are stated in the opinion of the court.

Mr. Stanley Matthews for the appellant.

Mr. Edgar M. Johnson, contra.

MR. JUSTICE HUNT delivered the opinion of the court.

title: Merchants' National Bank v. Cook


text: Talk:Merchants' National Bank v. Cook

title: Talk:Merchants' National Bank v. Cook


text:
Merchants' National Bank v. Cook/Opinion of the Court

This action is brought by the assignees of B. Homans, Jr., to recover from the Merchants' Bank certain securities, or their value, received by the bank from Homans. The securities are alleged to have been received in violation of the thirty-fifth section of the Bankrupt Act. That Homans was insolvent when the securities were delivered is not denied, but the bank insists that it had no reasonable cause to believe that such was his condition.

On the morning of Aug. 25, 1869, the bank advanced to Homans, upon his check on New York, the sum of $10,000, less the usual charge of one-eighth of one per cent. In the afternoon of the same day, Homans became satisfied that his failure could no longer be averted, and that his check thus given would not be paid. He therefore placed in an envelope addressed to the bank the securities in question, with the following note:--

'HOMANS & CO., BANKERS, NO. 23 W. THIRD ST.,

CINCINNATI, Aug. 25, 1869.

'D. I. FALLIS, Esq., Pr.

'DEAR SIR,-A disappointment gives us reason to fear that our check of this date may not be paid. I leave with you the enclosed as security.

B. HOMANS, Jr.' On the morning of the 26th, his banking-house was opened for business as usual, Homans himself being present. At nine o'clock A.M. he left his office for Covington, where he lived, instructing Mr. Wood, one of his clerks, that if he did not return at ten o'clock to deliver the envelope addressed to the Merchants' Bank, and another of a like character to another bank. Homans did not return that day; but at ten or half-past ten o'clock, Mr. Albert, another clerk, received directions from him to close the doors, take no more deposits, and pay no more checks. Mr. Albert immediately locked the doors, and, receiving the package from Mr. Wood, at once delivered it to the bank. Upon these facts, with one exception as to time, the parties are agreed.

The president of the Merchants' Bank testifies that he found the envelope on his desk in the bank when he came to the bank at about eight o'clock in the morning, and is quite confident that it could not have been later than half-past eight when he became aware of its contents. On the point of time he may easily have fallen into an error; and, we think, there can be no doubt of his mistake. Mr. Homans testifies that he left the banking-house at nine A.M. to go to Covington, and then gave instructions to Mr. Wood, a clerk, to deliver the envelope, if he did not return by ten o'clock. Mr. Albert also testifies that the banking-office of Homans was opened at nine o'clock, and continued open for about an hour; that he then received orders from Mr. Homans to close the doors; that he did so, and, in pursuance of directions then received from Mr. Wood, proceeded to deliver this envelope, with a similar one to another bank; and that this delivery was made at ten or half-past ten o'clock.

Mr. Yergason, the cashier of the Merchants' Bank, presented at Homans's office a clearing-house check, and payment thereof was refused. Mr. Albert testifies that this check was presented and payment demanded by the cashier after the doors were closed and after the envelope had been delivered at the bank. Mr. Fallis testifies to the same purport, and that this demand and refusal was made between nine and ten o'clock in the morning,

That Homans intended to give the bank a preference over other creditors,-that is, that he expected and intended by means of the enclosures sent that the bank should receive the full amount of its $10,000 check, while other creditors would receive but a portion of their debts,-is too evident to require discussion. Mr. Homans states in explicit terms that he was at that time aware of his inabili y to pay his creditors in full then or in the future.

The important question remains, Had the Merchants' Bank, when it received the packages, reasonable cause to believe that Homans was insolvent? If it had, the thirty-fifth section of the Bankrupt Act declares the transaction to be void. If it had not, it may lawfully hold the securities or their avails.

The president of the bank testifies that there was nothing in the note sent with the securities, or in the transaction itself, that led him to suspect the insolvency of Homans. While it is impossible certainly to indicate the operation of the human mind, we cannot but think the witness is again at fault in his recollection, and that his idea at the time of testifying was not the one that controlled his action when the occurrence took place.

1. The transaction, on the theory of the solvency of Homans, is quite inexplicable. It was the general practice of these parties, as of all bankers in their city, to deal in exchange on New York. The practice was thus: The Merchants' Bank wanted $10,000 to be used in the city of New York. Mr. Homans had the money there, which he did not need for his own purposes. The bank gives him $10,000 in currency, less the difference in exchange, and takes his check on his banker in New York for the sum named. This is the theory of the transaction. In fact, Homans had no funds in New York, but gave his check that he might obtain the currency to be used to meet pressing demands at home. The theory of the bank, however, was as is above stated.

That a banker in Cincinnati, having sold a sight-draft on New York, should the next day, without agreement or solicitation, send to the holder collaterals to secure the payment of the draft, would be an extraordinary transaction, and, in the language of Mr. Cook, president of the Fourth National Bank of Cincinnati, it would be a taint upon the standing of the drawer, and would at once impress one with the idea that the drawer was insolvent, or in great financial difficulty. Such is the evidence also of Mr. Griffiths and Mr. Espy, bankers of the same place. The giving of security under such circumstances is in repugnance to the idea of the whole transaction, which is that of a quick and simple commercial exchange of funds. One who lends money on bond or time notes may well expect and take security for their payment. It is in harmony with the transaction. But if a check is taken in payment of an account presented, no one would expect to receive collateral security for its payment. It would not, however, be more incongruous, or more inharmonious, than the giving of collateral security for the payment of the draft in question. The giving and acceptance of the collateral could have but one significance to the mind of a banker.

2. The letter accompanying the collaterals, we think, gave a notice which a business man could not misunderstand, especially in connection with the fact, known to the bank, that a short time prior thereto there were evidences that Homans was in need of money, and that there were clearing-house checks to a large amount outstanding against him. The letter enclosed said: 'A disappointment gives us reason to fear that our check of this date may not be paid. I leave with you the enclosed as security.' Its language is expressive to a business man. It means, not that we fear our check may not be paid, but that it will not be paid. We are disappointed in obtaining the funds to pay it.

This disappointment is not the result of an accident or of a misunderstanding, for that apology would have been given if it existed; nor is the disappointment a temporary one, for that would have been stated if true. We do not expect to be able to pay it, and we enclose you securities, which will not indeed give the money to which you are entitled, but will protect you from ultimate loss. This is what the letter means. It is a statement of inability from want of funds to meet a current and most pressing debt, either in New York or in Cincinnati, the non-payment of which involved publ c suspension and bankruptcy. Practically it was so understood, for we find—

3. That immediately upon its receipt the Merchants' Bank sent for payment its clearing-house check, previously unpresented. The testimony of Mr. Albert shows that the Merchants' Bank was not in the habit itself of presenting clearing-house checks, but that, in about fifteen minutes after he had left the envelope and securities at the bank, Mr. Yergason, the cashier, in person presented the clearing-house check and requested its payment. The relation of cause and effect is a more rational explanation of this speedy demand than to suppose it to be a mere coincidence.

It is scarcely necessary to discuss the authorities as to the meaning of the words 'having reasonable cause to believe the party to be insolvent.' When the condition of a debtor's affairs are known to be such that prudent business men would conclude that he could not meet his obligations as they matured in the ordinary course of business, there is reasonable cause to believe him to be insolvent. Knowledge is not necessary, nor even a belief, but simply reasonable cause to believe. Toof v. Martin, 13 Wall. 40; Buchanan v. Smith, 16 id. 277; Wager v. Hall, id. 584.

There is nothing in the subsequent decisions of this court to vary these principles, and it is not worth while to go through the English cases founded upon a statute containing different language from our own.

Upon the whole case, we are all of the opinion that the court below decided correctly in holding that Homans was insolvent; that the securities were transferred with a view to give a fraudulent preference; and that the bank had reasonable cause to believe that Homans was insolvent when it received and appropriated the securities presented to it.

Decree affirmed.


text: Talk:Merchants' National Bank v. Cook/Opinion of the Court


text:
Sessions v. Johnson

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

The facts are fully stated, and the assignment of errors is set forth in the opinion of the court.

Mr. Benjamin F. Butler for the plaintiff in error.

Mr. George W. Morse and Mr. R. M. Morse, Jr., contra.

MR. JUSTICE CLIFFORD delivered the opinion of the court.

title: Sessions v. Johnson


text: Talk:Sessions v. Johnson

title: Talk:Sessions v. Johnson


text:
Sessions v. Johnson/Opinion of the Court

Even without satisfaction, a judgment against one of two joint contractors is a bar to an action against the other, within the maxim transit in rem judicatam; the cause of action being changed into matter of record, which has the effect to merge the inferior remedy in the higher. King v. Hoare, 13 Mee. & W. 504.

Judgment in such a case is a bar to a subsequent action against the other joint contractor, because, the contract being merely joint, there can be but one recovery; and consequently the plaintiff, if he proceeds against one only of two joint promisors, loses his security against the other, the rule being that by the recovery of the judgment the contract is merged and a higher security substituted for the debt. Robertson v. Smith, 18 Johns. (N. Y.) 477; Ward v. Johnson, 13 Mass. 149; Cowley v. Patch, 120 id. 138; Mason v. Eldred et al., 6 Wall. 231.

But the rule is otherwise where the contract or obligation is joint and several, to the extent that the promisee or obligee may elect to sue the promisors or obligors jointly or severally: but even in that case the rule is subject to the limitation, that, if the plaintiff obtains a joint judgment, he cannot afterwards sue them separately, for the reason that the contract or bond is merged in the judgment; nor can he maintain a joint action after he has recovered judgment against one of the parties in a separate action, as the prior judgment is a waiver of his right to pursue a joint remedy.

Different modifications of the rule also arise where the controversy grows out of the tortious acts of the defendants. Where a trespass is committed by several persons, the party injured may sue any or all of the wrong-doers, but he can have but one satisfaction for the same injury, any more than in an action of assumpsit for a breach of contract.

Courts everywhere in this country agree that the injured party in such a case may proceed against all the wrong-doers jointly, or he may sue them all or any one of them separately; but if he sues them all jointly, and has judgment, he cannot afterwards sue any one of them separately; or, if he sues any one of them separately, and has judgment, he cannot afterwards seek his remedy in a joint action, because the prior judgment against one is, in contemplation of law, an election on his part to pursue his several remedy.

Where the injury is tortious, the remedy may be joint or several; but the rule in this country is that a judgment against one without satisfaction is no bar to an action against any one of the other wrong-doers. Lovejoy v. Murray, 3 Wall. 1; s. c. 2 Cliff. 196; Livingston v. Bishop, 1 Johns. (N. Y.) 290; Drake v. Mitchel, 3 East. 258.

Sufficient appears to show that the bankrupts, Kane, Sprague, & Co., on April 5, 1870, mortgaged their stock, tools, fixtures, and machinery to W. W. Sprague, to secure him as their indorser; that the mortgagee, on the 13th of the same month, assigned the mortgage to the defendant below as security for a debt due from the mortgagee to the assignee of the mortgage. On the 4th of October following, the bankrupts made a second mortgage, including the property descirbed in the first mortgage, together with other property, to E. A. Goodnow, for $4,000, which sum the mortgagee paid to the mortgagee of the first mortgage, as the agent of the bankrupts, and which he, the agent, used in part to pay three notes given by the bankrupts, upon which the mortgagees in both mortgages were indorsers. Eight days later, the bankrupts sold to Nichols and Johnson the whole property covered by the mortgages, and received in payment their notes and those of Henry W. Snow, to the amount of $6,000, which they divided as follows: $2,444.40 to the assignee of the first mortgagee, and $3,555.60 to the second mortgagee, who thereupon released their respective mortgages.

Bankruptcy proceedings against the mortgagors in the two mortgages were commenced on the 2d of November in the same year, and the plaintiffs were duly appointed assignees of the bankrupts' estate. Subsequently they sued the mortgagee in the second mortgage to recover the value of the property covered by his mortgage; and judgment was, by agreement, entered in their favor for $4,000, interest and costs, and the evidence shows that the judgment was satisfied by the judgment debtor. They, the assignees, also brought another suit against the same party to recover for the preference he obtained when the agent of the bankrupts paid three of their notes upon which the defendant in the last-named suit was indorser, which suit was settled by the payment of $2,000 and a release given by the assignees of all their claims against the defendant in that suit.

Beyond doubt, the first mortgage was valid, but it was given to secure the mortgagee as indorser for the mortgagors, and inasmuch as the defendant failed to prove that the mortgagee had taken up any paper on which he was so liable, it is evident that the defendant derived no right to the proceeds of the property paid to him by virtue of that mortgage. Nothing having been paid by the defendant as indorser for the bankrupts, the money paid him for the release of his mortgage was plainly a preference by the way of indemnity. Proceedings in bankruptcy were commenced within four months thereafter; and the assignees brought the present suit in the District Court against the defendant to recover back the proceeds of so much of these notes given to the defendant for the release of his mortgage from the bankrupt debtors, the claim being that the amount was paid to secure the defendant for his indorsements for the insolvent debtors, he having reasonable cause to believe that they were insolvent, and that the payment was made to prevent the property from coming to the assignees for distribution, and to impede and evade the provisions of the Bankrupt Act.

Service was made; and the defendants appeared and pleaded the general issue, and that the plaintiffs previously recovered judgment against E. A. Goodnow for the value of the same property, and that the said judgment has been fully paid and satisfied.

Issue being thus raised, the parties went to trial; and the verdict and judgment were for the plaintiffs in the sum of $2,786.56 and costs of suit. Exceptions were filed by the defendant; and he removed the cause into the Circuit Court, where the parties were again heard, and the Circuit Court affirmed the judgment, and the defendant removed the cause into this court.

Five errors are assigned, to the effect following: 1. Because the District Court did not instruct the jury that the action is not maintainable, the assignees having disaffirmed the sale of the goods and received the value of the property. 2. Because the District Court did not instruct the jury that the plaintiffs were estopped by their previous proceedings from maintaining the suit. 3. Because the District Court did not instruct the jury that the plaintiffs could only have judgment for the value of the property, deducting the amount previously recovered. 4. Because the District Court did not instruct the jury that the plaintiffs could not recover the proceeds of the property in the hands of the mortgagee so long as any contingent liability remained. 5. Because the issue submitted to the jury, whether the defendant had paid any thing for the bankrupts, was an immaterial one, if there was any outstanding and undischarged indorsement of the defendant for which he was liable.

Separate mortgage were held by the defendant and the other mortgagee, of different dates, and it appears that they were given for entirely different considerations. Of course, the respective mortgagees held the property subject to an equity of redemption in the mortgagors; and the case shows that the mortgagors sold the respective equities of redemption, and distributed the proceeds of the sale between the respective mortgagees. Throughout, the relations of the mortgagees to the insolvent debtors were entirely separate. They never held any joint claim against the insolvent mortgagors, nor did the mortgagees ever receive any joint security from the insolvent debtors for their separate claims. Instead of that, the respective equities of redemption remained in the mortgagors, and the conceded facts show that they sold the equities and distributed the proceeds between the respective mortgagees, showing to a demonstration that there never was any joint contract relation between the mortgagees and the insolvent debtors.

Even the proceeds of the sale of the equities of redemption, as distributed between the respective mortgagees, were entirely separate; nor would it make any difference if the mortgagees, in receiving their respective portions of those proceeds, had acted jointly, as it is well-settled law that where the tort is joint the injured party may have a joint or several remedy, the rule being that a judgment against one wrong-doer without satisfaction is no bar to an action against any one of the other joint tort-feasors. Lovejoy v. Murray, supra.

Joint wrong-doers may be sued separately; and the plaintiff may prosecute the same until the amount of the damages is ascertained by verdict, but the injured party can have only one satisfaction, the rule being that he may make his election de melioribus damnis, which, when made, is conclusive in all subsequent proceedings. Heydon's Case, 11 Co. 50; White v. Philbrick, 5 Greenl. 147; Knickerbocker v. Colver, 8 Cow. (N. Y.) 111; O'Shea v. Kirker, 4 Bosw. (N. Y.) 120.

Without more, these remarks are sufficient to show that the theory of estoppel cannot be maintained, and that the first two errors assigned must be overruled, for two reasons: 1. Because the relation of joint co tractors never subsisted between the insolvent debtors and the mortgagees, to whom the proceeds of the equities of redemption were distributed by the insolvent mortgagors. 2. Because the mortgagees, acted separately in accepting certain portions of the proceeds of that sale; nor would it have made any difference if they had acted jointly, as it is settled by all the authorities that when several persons have been jointly concerned in the commission of a wrongful act they may all be charged jointly as principals, or the plaintiff may sue any one of the parties separately, torts being in their nature several, even when the wrongful act was jointly committed. Ad. Torts (3d ed.), 939.

Suppose that is so, still it is insisted by the defendant that the plaintiff cannot, in any proper view of the facts, recover more than the difference between the amount paid by the other mortgagee and the value of the property distributed. What the plaintiffs claim is the amount the defendant received from the insolvent debtors as part of the proceeds of the sale of the equities of redemption. Abundant proof is exhibited that he received $2,444.40, and it is conceded that the whole of that amount remains in the hands of the defendant.

Two sums, amounting in the whole to $6,000, were received by the plaintiffs of the second mortgagee before the present suit was instituted. $4,000 of the amount was recovered by judgment in favor of the plaintiffs. They also instituted a second suit against the same party, to recover the amount received by him in payment of the notes upon which he was liable as indorser; which action was compromised by the payment to the assignees of $2,000, as appears by the agreed statement of facts. Such payment being made, the assignees executed a release to the defendant in that suit of all claims and demands which they, as such assignees, had against him on that account.

Judgments bind parties and privies, but they do not bind strangers; and it is clear that the present defendant was neither a party nor privy to the action in the first suit, nor had he any thing to do with the compromise of the second suit between those parties.

Enough appears in the evidence to establish that theory; but if any possible doubt could otherwise arise in respect to the conclusion, the matter is set entirely at rest by the verdict of the jury. They were told by the court that if the plaintiffs had once received full satisfaction for the proceeds of the sale from the other mortgagee, 'then they can recover nothing from the defendant;' and it follows from the verdict that they did not recover in the suits against the other mortgagee any thing for the portion of notes taken for the sale of the equities which was distributed to the defendant in the present suit. All that he received remains in his hands; and inasmuch as the assignees are not estopped by the proceedings against the second mortgagee from prosecuting their claim against the defendant for the portion of the proceeds of the equities of redemption which was distributed to him by the insolvent debtors, it follows that the assignee may recover the whole amount of that portion without regard to the antecedent proceedings against the second mortgagee, which is all that need be said in response to the third assignment of error.

Both parties agree that the first mortgagee was not a creditor of the mortgagors, and that the mortgage was given merely to secure future advances or future liabilities to be incurred by indorsing the paper of the mortgagors. Nothing had been paid by the mortgagee; but the defendant insists that the portion of the notes distributed to him cannot be recovered back if any outstanding undischarged contingent liability of the kind remains.

Grave doubts arise whether that proposition is well founded in law, for two reasons: 1. Because it was the equities of redemption which the mortgagors sold, and the notes distributed represented the proceeds of that sale. 2. Because it does not distinctly appear that any such contingent liability remained at the time of the trial.

But it is unnecessary to decide that question, because the bill of exceptions does not show that the district judge gave any instruction contrary to that construction of the mortgage to the defendant, nor does the record show what, if any, instructions he gave in that regard. Unsustained by the record, as the fourth assignment of error is, it must be overruled as inapplicable to the questions presented for decision.

Evidence to show that the defendant had paid any paper which he had indorsed for the insolvent debtors, so far as appears, was entirely wanting; nor does the transcript show that any was introduced to prove that any indorsement made by the defendant was outstanding and undischarged. Assume the facts to be so, and it would be clear that the mortgage could not avail the defendant as a defence to the claim of the assignees; and it is equally clear, that, if there were no such outstanding indorsements, then it was important for the defendant to prove that he had advanced moneys to discharge such liability.

Viewed in that light, it is impossible to sustain the fifth assignment of error, for the reason that it is shown that the inquiry whether the defendant had made any payment for the insolvent debtors was an important inquiry, and one that was properly submitted to the jury. Proper instructions, it must be assumed, were given to the jury in respect to all the issues in the case not made the subject of complaint in the bill of exceptions, and that all questions involved in the pleadings, except those presented by the assignment of errors, are correctly settled by the verdict, from which it follows that there is no error in the record.

Judgment affirmed.


text: Talk:Sessions v. Johnson/Opinion of the Court


text:
Cochrane v. Deener (95 U.S. 355)

MOTION to set aside the decree rendered at the last term in Cochrane v. Deener, 94 U.S. 780, and to dismiss the appeal.

Mr. George Harding in support of the motion.

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

MR. JUSTICE BRADLEY delivered the opinion of the court.

title: Cochrane v. Deener (95 U.S. 355)


text: Talk:Cochrane v. Deener (95 U.S. 355)

title: Talk:Cochrane v. Deener (95 U.S. 355)


text:
Cochrane v. Deener (95 U.S. 355)/Opinion of the Court

After a careful examination of the evidence adduced on the motion to vacate the decree in this case, we see no ground to believe that the appellants are chargeable with any collusion with the appellees in reference to the argument of the appeal. On the contrary, the weight of the evidence is, that they repelled any arrangement or proposition which might look to that end. Whilst we would not hesitate to set aside a decree collusively obtained, the proof ought to be very clear to induce us to do this at the instance of strangers to the suit, though incidentally affected by the decision of the questions involved.

At the same time, as the decision in this case is made the basis of applications for injunctions against third parties in the Circuit Court, it is right that we should say, that, in the argument of the appeal before us, the case on the part of the appellees was, as it seemed to us, very imperfectly presented; and the evidence laid before us on this motion demonstrates the fact that the appellees, in consequence of the conditional arrangement with the appellants, which they secured before the argument was had, or for some other cause, omitted to prosecute their defence with that degree of zeal and efficiency which the importance of the case would otherwise have demanded. The result was, that the labor of the court, and its liability to overlook points of weight and importance, were greatly increased. As the case was presented to us, we see no cause for changing our views. But, under the circumstances, we think that third parties, who had no opportunity of being heard, and whose interests as opposed to the Cochrane patents are very important, should not be concluded from having a further hearing upon them whenever a future case may be presented for our consideration.

Motion denied.


text: Talk:Cochrane v. Deener (95 U.S. 355)/Opinion of the Court


text:
Alvord v. United States (95 U.S. 356)

APPEAL from the Co rt of Claims.

The facts are stated in the opinion of the court.

Mr. Thomas Wilson and Mr. Jeremiah M. Wilson for the appellant.

The Solicitor-General, contra.

MR. JUSTICE MILLER delivered the opinion of the court.

title: Alvord v. United States (95 U.S. 356)


text: Talk:Alvord v. United States (95 U.S. 356)


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Alvord v. United States (95 U.S. 356)/Opinion of the Court

It appears by the findings of the Court of Claims, from whose judgment this case is appealed, that, by five different written contracts made in 1858, appellant agreed with the Postmaster-General to carry the mail over as many different routes between Iowa City, in the State of Iowa, and Fort Kearney, in Nebraska. On the 25th of July, 1861, it was agreed between him and the Postmaster-General, that, for an improved service on part of this route, namely, between Omaha on the Missouri River, and Fort Kearney, plaintiff should receive $14,000 per annum additional, from its commencement on the 5th of August, 1861. The second and third of the series of facts found by the court we give verbatim, as follows:--

'2. On the 16th of September, 1861, in consequence of the route established by Congress for the through California mail having been broken by the burning of bridges, the Postmaster-General ordered the California mail to be sent over claimant's routes; and the claimant transported it under and in pursuance of such order from the 16th of September to the 25th of December, 1861. It greatly exceeded in bulk the other mail matter which the claimant transported under his contracts, and on some of his routes required for its conveyance at times as many as five coaches per day in addition to the one coach which he would otherwise have run, and it at all times and on all of his routes required one or more additional coaches, which were used exclusively for it; and the fair and reasonable value of the service for the period named was the sum of $35,100.

'3. Immediately after the claimant's services for carrying the California mail, as set forth in the second finding, had terminated, he presented his account therefor to the Postmaster-General, and requested that it be liquidated and paid, but the Postmaster-General refused to allow or pay the same, and directed the Second Assistant Postmaster-General to reply, 'that, when he made the arrangement to give him the $14,000 per annum additional for improved service between Columbus and Fort Kearney, it was in view of his conveying the overland mails over that route and through Iowa free of additional expense, should circumstances make it necessary temporarily so to send them; and that if the claim for additional compensation for such service is to be pressed, he would feel compelled at once to annul that arrangement.' The Second Assistant Postmaster-General reduced such instructions to writing, in the form of a letter from himself to the claimant, and caused it to be mailed to the claimant as his residence in Indianapolis, Indiana. Subsequent to the mailing of such letter, and while the additional mail service at $14,000 per annum was still being rendered, the claimant presented documents to prove the justice of his claim for conveying the California mail, and otherwise pressed his demand by personal interviews with the Second Assistant Postmaster-General, with whom all of the business relating to this claim had previously been transacted. He did not otherwise notify the Postmaster-General that his claim for the California mail service would be pressed. The Second Assistant Postmaster-General did not inform the Postmaster-General that the claimant thus pressed his demand for the California mail service. The claimant continued to run a daily mail between Omaha and Fort Kearney, and to receive the consideration at the rate of $14,000 per annum, from the 12th of February, 1862, when the Postmaster-General's decision was made, up to the termination of the original contract on the 30th of June, 1862.' On the facts thus found, the court was of opinion that the law was for defendants, and dismissed appellant's bill.

The ground assumed by the majority of the Court of Claims is, that by co tinuing to perform the services for which the $14,000 extra was allowed, and receiving the pay for it, after receipt of the Postmaster-General's letter, he waived his right to insist on the $35,100 which that court find was otherwise justly his due.

The Solicitor-General takes another view of the matter, and insists that Alvord did not press his claim after the receipt of that letter; and for that reason, and by continuing the $14,000 contract, must be held to have waived his claim to the $35,100.

Neither of these views seem to us to be sound. The court below distinctly states that after the date of the letter from the Second Assistant Postmaster-General, in which it was stated that the arrangement for additional compensation under the $14,000 contract would be annulled if the other claim was pressed, 'the claimant presented documents to prove the justice of his claim for carrying the California mails, and otherwise pressed his demand by personal interviews with the Second Assistant Postmaster-General, with whom all the business relating to this claim had previously been transacted.'

It is difficult to see how he could more actively have pressed his claim in that department; and it cannot be admitted that it was not pressed, because the evidence and the arguments were presented to the assistant instead of the head of the department. We suppose that the assistant postmaster-general were appointed for precisely such functions as this one discharged in the matter, and it would be a dangerous principle to hold that the department is bound alone by what is transacted by the Postmaster-General in person; for the same rule would free parties dealing with the department from obligations not assumed directly with its head.

Considering, then, that Alvord did press this claim, how can he be said to have waived it? The Postmaster-General's statement was, that if you press this claim, I shall be compelled to abrogate the other. If he had abrogated the other, the correspondence might have been a sufficient justification for so doing. If this suit had been brought to recover under the $14,000 contract, what took place might have shown some reason against a recovery. But it is clear, from all the facts found, that the department, although Alvord did press his claim for carrying the California mail earnestly and without remission, did not choose to exercise its option or execute its threat to discontinue the other arrangement, but permitted it to stand, probably because the good of the service required it. Instead of that, it concluded to resist the present claim.

The correspondence with the Postmaster-General, therefore, does not affect the merits of this claim; and as the findings of the court show a case in which the fair and reasonable value of the additional service rendered under the peremptory order of the Postmaster-General by the claimant was $35,100, we see no reason why he should not have recovered it. At the time he made his original contracts they were for a certain number and character of coaches for so many days in the week. The California mail was then carried by sea. Later, it was carried to St. Joseph, on the Missouri River, two hundred miles south of claimant's route, by rail, and then overland by another contractor. This mail exceeded all the other mail matter which he was expected to carry, and did carry, under his original contract; and it was only in consequence of the destruction of the railroad bridges in Missouri by the guerilla warfare of the early days of the insurrection that the whole of that mail was ordered to be carried temporarily over claimant's lines through the State of Iowa.

If this mail could have been carried by the same number and character of coaches run for the same number of days in the week, which were stipulated in his contracts, perhaps no additional compensation would have been due. But the court distinctly finds that under the order, which he had no right to resist, he was compelled to put on five additional coaches per day on some of his routes, and at a l times and on all his routes one or more additional coaches were used exclusively for the increased mail. For this service, altogether beyond what his contract required of him, he is entitled to compensation on every principle of law and justice.

Judgment reversed and cause remanded, with directions to render a judgment for the plaintiff for $35,100, the value of his services, as already found by the Court of Claims.


text: Talk:Alvord v. United States (95 U.S. 356)/Opinion of the Court


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Page:The Records of the Federal Convention of 1787 Volume 3.djvu/608

 Pinckney’s original plan as its basis. Not only does it radically differ from the original plan in several essential matters, it is constructed on an entirely different framework. Indeed, when one notes its striking resemblance to the draft reported by the Committee of Detail on August 6, it is difficult not to agree with Mr. Jameson’s conclusion that if Pinckney had copied “the printed report of the Committee of Detail, paraphrasing to a small extent here and there, and interweaving as he went along some of the best remembered features of his own plan,” the results would have been precisely like the document that was sent to John Quincy Adams. There is no proof, however, it is only a possible hypothesis, that in the points of difference from the draft of the Committee of Detail the document sent to Adams reproduces portions of the original plan. The most that can be said is, that when other evidence con- firms the inclusion of such provisions, a possible reading of those clauses may here be found.

Following the same line of argument, although ignoring the amendments to the Articles of Confederation and treating the Observations with “considerable skepticism,” Mr. Jameson was able to establish the main points of Pinckney’s original plan. By a piece of brilliant criticism Mr. Jameson was thus enabled to identify a document among the Wilson drafts of the Committee of Detail as a series of extracts from the Pinckney Plan, and Mr. McLaughlin was able to identify another document among the same papers as an outline of the entire plan.

Combining all of these sources of information it is possible to obtain a fairly good idea of the Pinckney Plan in its original from. The following is the plan thus reconstructed. (Italics and quotation marks indicate respectively the outline and extracts used by Wilson in the Committee of Detail; statements based upon the “Observations” are placed in parentheses; numbers attached to the different articles have little significance).

''A Confederation between the free and independent States of N. H. &c. is hereby solemnly made uniting them together under one general superintending Government for their common Benefit and for their ''


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County of Cass v. Johnston

ERROR to the Circuit Court of the United States for the Western District of Missouri.

Johnston, a citizen of Iowa, brought this action Sept. 3, 1874, against the 'County of Cass, trustee for Camp Branch Township in said county, State of Missouri,' to recover the amount of certain overdue coupons attached to bonds whereof he alleged that he was the lawful holder. A copy of one of the bonds and of a coupon annexed thereto is as follows:--

'UNITED STATES OF AMERICA,

'State of Missouri.

'CASS COUNTY BOND.

'No. 53.] Interest ten per cent per annum. [$500.

'Know all men by these presents, that the County of Cass, in the State of Missouri, acknowledges itself indebted and firmly bound to the St. Louis and Santa Fe Railroad Company, Missouri division, in the sum of $500, which the said county of Cass, for and on account of Camp Branch Township, for value received, hereby promises to pay said company, or bearer, at the banking-house of Northrup & Chick, in the city of New York, and State of New York, ten years after date, with interest thereon from the date hereof at the rate of ten per cent per annum, payable semiannually on the eleventh days of January and July of each year, on the presentation and delivery at said banking-house of Northrup & Chick, in said city of New York, State of New York, of the coupons of interest hereto attached.

'This bond is issued pursuant to an order of the county court of said County of Cass, made by authority of an act of the General Assembly of the State of Missouri, entitled 'An Act to facilitate the construction of railroads in the State of Missouri,' and approved on the twenty-third day of March, A.D. 1868, and authorized by a vote of more than two-thirds of the voters of said township.

'In testimony whereof, the said County of Cass has executed this bond by the presiding justice of the county court of said county, under the order of said court, signing his name hereto, and by the clerk of said court, under the order thereof, attesting the same and affixing hereto the seal of said court.

'This done at the office of the clerk of said court, this eleventh day of July, A.D. 1870.

[SEAL.] 'JEHIEL C. STEVENSON,

'Presiding Justice of the County Court of Cass County, Mo.

'C. H. DORE,

Clerk County Court Cass County, Mo.

'HARRISONVILLE, CASS COUNTY, July 11, 1870.

'The County of Cass promises to pay the sum of $25 on the eleventh day of January, 1873, being interest on bond No. 53, for $500, payable at the banking-house of Northrup & Chick, in the city of New York, State of New York.

'C. H. DORE,

Clerk of the County Court of Cass County, Mo.

The act referred to in the bond is generally known as 'The Township Aid Act.' The first, second, third, and fifth sections are as follows:--

'SECTION 1. Whenever twenty-five persons, tax-payers and residents, in any municipal township, for election purposes, in any county in this State, shall petition the county court of such county, setting forth their desire, as a township, to subscribe to the capital stock of any railroad company in this State, building or proposing to build a railroad into, through, or near such township, and stating the amount of such subscription, and the terms and conditions on which they desire such subscription shall be made, it shall be the duty of the county court, as soon as may be thereafter, to order an election to be held in such township, to determine if such subscription shall be made; which election shall be c nducted and returns made in accordance with the law controlling general and special elections; and if it shall appear, from the returns of such election, that not less than two-thirds of the qualified voters of such township voting at such election are in favor of such subscription, it shall be the duty of the county court to make such subscription in behalf of such township, according to the terms and conditions thereof, and if such conditions provide for the issue of bonds in payment of such subscription, the county court shall issue such bonds, in the name of the county, with coupons for interest attached, but the rate of interest shall not exceed ten per cent per annum; and the same shall be delivered to the railroad company.

'SECT. 2. In order to meet the payments on account of the subscription to the stock, according to its terms, or to pay the interest and principal on any bond which may be issued on account of such subscription, the county court shall, from time to time, levy and cause to be collected, in the same manner as county taxes, a special tax, which shall be levied on all the real estate lying within the township making the subscription, in accordance with the valuation then last made by the county assessor for county purposes.

'SECT. 3. The county treasurer shall be authorized and required to receive and collect, of the sheriff of the county, the income from the tax provided in the previous section, and to apply the same to the payment of the stock subscription according to its terms, or to the payments of interest and principal on the bonds, should any be issued in payment of such subscription; he shall pay all interest on such bonds, out of any money in the treasury collected for this purpose, by the tax so levied, as the same becomes due, and also the bonds as they mature, which shall be cancelled by the county court; and this service shall be considered a part of his duty as county treasurer.'

'SECT. 5. In all cases hereafter, where a railroad or branch railroad in this State shall be built, in whole or in part, by subscriptions to its stock, by counties, cities, or townships, the proceeds of all State and county taxes, levied upon such railroad company or branch so built, or the property thereof, shall be paid into the treasury of the counties where collected, and the county treasurers shall apportion the same, according to their several subscriptions, to such counties, cities, or townships so subscribing stock, until the whole amount of such subscription is refunded to them; and such sums so apportioned shall be paid over to the county or city treasurer, and applied to the payment of the interest and principal of the bonds issued by such county or city on account of their subscription stock as aforesaid, if any are outstanding, and, if not, it shall by them be placed to the credit of the school fund in such county, city, or township.'

The remaining sections do not affect any question here involved. They declare when the act shall take effect, and provide for granting to tax-payers certificates convertible into railway stock.

The Constitution of Missouri took effect July 4, 1865; and sect. 14, art. 11, is as follows:--

'The General Assembly shall not authorize any county, city, or town to become a stockholder in, or to loan its credit to, any company, association, or corporation, unless two-thirds of the qualified voters of such county, city, or town, at a regular or special election, to be held therein, shall assent thereto.'

In 1871, the legislature of Missouri so amended sect. 2 of the Township Aid Act of 1868 as to make the tax therein provided for a tax upon all the real estate and personal property within the township. The county answered, that said bonds were issued in payment of a pretended subscription by said county in behalf of said Camp Branch Township, to the St. Louis and Santa Fe Railroad Company, under the authority of the act of March 23, 1868, and that prior to the date of them the township had no authority to subscribe for stock in said co pany or issue bonds therefor, or to have the same done for it by the county court; that prior to April 20, 1869, said company had not been organized, that on March 13, 1869, twenty-five voters of said township filed a petition, setting forth the desire of said township to subscribe _____ dollars to the capital stock of the St. Louis and Santa Fe Railroad Company, proposed to be organized, to build a railroad through said township, said subscription to be paid in bonds to be issued by said county court for and on account of the township; that on that day the court ordered an election in said township to be held on April 20, 1869; that on April 20, 1869, articles of incorporation were filed in the office of the secretary of state as provided by law, and thereby said company in said State became incorporated; that at the election so held two-thirds of the qualified voters of the township did not vote in favor of the subscription, although more than two-thirds of them voted at such election; and that by reason of the premises said bonds were null and void.

The plaintiff demurred to the answer; and, the demurrer having been sustained, judgment was rendered that the plaintiff recover of 'said county, trustee for said township,' the amount of said coupons, with interest thereon and costs, and that said county do pay the same 'out and from taxes levied on the taxable property of said township.'

The county thereupon sued out this writ of error.

The case was argued by Mr. Willard P. Hall and Mr. John C. Gage for the plaintiff in error, and by Mr. John B. Henderson for the defendant in error.

The plaintiff in error submitted the following propositions:

1. The Township Aid Act of 1868, under which the bonds in suit were issued, is repugnant to the Constitution of Missouri of 1865. It authorizes a municipal subscription to the capital stock of railroad companies, if two-thirds of the qualified voters voting at an election held under its provisions are in favor of it, whereas the Constitution requires the assent of two-thirds of all the qualified voters to render such subscription valid. Sufficient notice of this objection appears in the recitals of the bonds to put the holder on inquiry. State v. Winkelmeier, 35 Mo. 103; State v. Sutterfield, 54 id. 391; Harshman v. Bates County, 92 U.S. 569.

2. The record shows that the bonds were issued in payment of a subscription, by the township, to the capital stock of a railroad company which had no existence when the tax-payers petitioned for an election to take the sense of the people upon the question of the subscription, and when the election was ordered. They are, therefore, invalid, even in the hands of an innocent holder. Rubey v. Shain et al., 54 Mo. 207; The People v. Franklin, 5 Lans. (N. Y.) 129.

3. The bonds are to all intents and purposes township, not county, bonds. The county has incurred no liability to pay them. They are to be paid out of a special fund, derived from a tax upon the real and personal property within the township. The levy of that tax is imposed on the county court. A mandamus to compel the requisite levy is the appropriate and exclusive remedy of the bond-holder. An action on them will not lie against the county, and the judgment rendered in this case is evidently erroneous. The State v. Linn County, 44 Mo. 504; State v. Justices of Bollinger County, 48 id. 475.

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

title: County of Cass v. Johnston


text: Talk:County of Cass v. Johnston

title: Talk:County of Cass v. Johnston